Your Directors present the Nineteenth Annual Report (Boards' Report) together with theAudited Financial Statements of the Company (Company or TDPS) for the financial year endedMarch 31 2018.
| ||For the year ended ||For the year ended |
| ||March 31 2018 ||March 31 2017 |
| ||(Rs. in Lakhs) ||(Rs. in Lakhs) |
|Revenue from operations & other Income ||45173.17 ||41776.88 |
|Revenue from operations & other Income (net of excise duty) ||44884.19 ||38740.20 |
|Earnings before interest tax depreciation & amortization || || |
|including other income and exceptional item ||5079.12 ||3290.43 |
|Finance cost ||662.13 ||406.17 |
|Depreciation & amortization ||2705.54 ||2772.21 |
|Profit before Tax (PBT) including exceptional item ||1711.45 ||112.05 |
|Tax expense ||472.16 ||71.90 |
|Profit after Tax (PAT) including exceptional item ||1239.29 ||40.15 |
|Other Comprehensive Income ||10.22 ||(22.15) |
|Total Comprehensive Income including exceptional item ||1249.51 ||18.00 |
Note: The above figures are extracted from the standalone financial statement of thecompany
The total income is Rs.44884.19 lakhs (net of excise duties) in Fiscal 2018 ascompared to Rs.38740.20 (net of duties) in Fiscal 2017 was higher by 16%.. Net sales frommanufacturing business was Rs.37129.32 lakhs compared to Rs.30914.56 lakhs in Fiscal2017 contributing 82.72% of our Total Income in Fiscal 2018. Net sales from our ProjectBusiness was Rs.6144.28 lakhs compared to Rs.6031.46 Lakhs in Fiscal 2017 contributing13.62% of our Total Income in Fiscal 2018. Exports and deemed exports continued contribute68% of manufacturing Revenue in Fiscal 2018 reflecting our focus on growing our overseasmarkets. Your company continues to add new customers in steam gas turbine hydro &diesel segments in Europe Japan and India. A long term order in the traction segment hasbeen concluded during the year for supply traction motor components to a Multinationalcompany in India.
Earnings Before interest tax depreciation & amortization including other incomeand exceptional item (EBITDA) increased by Rs.1788.69 lakhs or 54.36% to Rs.5079.12 Lakhsin Fiscal 2018 as compared to Rs.3290.43 Lakhs in Fiscal 2017. Profit before tax andexceptional item increased by Rs.1599.40 Lakhs to Rs.1711.45 Lakhs in Fiscal 2018 fromRs.112.05 Lakhs in Fiscal 2017. Profit after tax including exceptional item increased byRs.1199.14 Lakhs to Rs.1239.29 Lakhs in Fiscal 2018 from Rs.40.15 Lakhs in Fiscal 2017.Total comprehensive income including exceptional item increased by Rs.1231.51 Lakhs inFiscal 2018.
The pending orders as of March 31 2018 are Rs.10475.52 lakhs comprising of bothmanufacturing Rs.10048.67 lakhs including order for railway business of Rs.7495 Lakhsand project business of Rs.426.85 lakhs.
The net worth of the Company stands at Rs.48676.55 lakhs with the accretion ofRs.529.44 lakhs to total reserves during the year.
No material changes & commitments affecting the financial position of the Companyhave occurred between the end of the financial year of the Company to which thesefinancial statements relate and the date of this report.
On consolidated basis total income is Rs.45075.95 lakhs (net of excise duties) inFiscal 2018 as compared to Rs.40014.81 (net of duties) in Fiscal 2017 was higher by 13%.Earnings Before interest tax depreciation & amortization including other income(EBITDA) decreased by Rs.417.36 lakhs to Rs.2424.46 Lakhs in Fiscal 2018 as compared toRs.2841.82 Lakhs in Fiscal 2017. Loss before tax increased by Rs.594.37 Lakhs toRs.952.39 Lakhs in Fiscal 2018 from Rs.358.02 Lakhs in Fiscal 2017. Loss after taxincreased by Rs.999.80 Lakhs to Rs.1442.44 Lakhs in Fiscal 2018 from Rs.442.64 Lakhs inFiscal 2017. Total comprehensive loss increased by Rs.973.15 Lakhs in Fiscal 2018.
The Board has recommended a dividend of Rs.1.80 per equity share for the year endedMarch 31 2018 as the same declared for the year ended March 31 2017. This Dividend issubject to approval of the shareholders at the forthcoming Annual General Meeting (AGM).The dividends will entail a payout of Rs.720.07 lakhs including dividend distribution taxof Rs.121.80 lakhs.
Particulars of contracts or arrangements made with related parties
Your Company has formulated a policy on related party transactions which is availableon Company's website www.tdps.co.in. Particulars of contracts or arrangements withrelated parties referred to in Section 188(1) of the Companies Act 2013 in theprescribed Form AOC-2 is appended as Annexure 3 the Boards' Report.
Management Discussion & Analysis
Pursuant to Regulation 34 read with Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (hereinafter called as LODR / ListingRegulations) the Management Discussion & Analysis report covering operationsperformance & outlook of the Company is attached as Annexure 9 to the Boards' Report.
Corporate Governance Report
In terms of Regulation 34 read with Schedule V of LODR a Report on CorporateGovernance along with Compliance Certificate issued by Practicing Company Secretary isattached as Annexure 10 and forms an integral part of this Report (hereinafter referred toas "Corporate Governance Report").
Note on Board evaluation Board Diversity Policy Training of independent directors -familiarization of directors Whistle Blower policy / Vigil mechanism Nomination andRemuneration policy form part of the Corporate Governance report.
Declaration by Independent Director
The Company has received necessary declaration from Independent Directors under Section149 (7) of the Companies Act 2013 that he/she meets the criteria of independence laiddown in Section 149 (6) of the Companies Act 2013 and Regulation 16 and other applicableprovisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015(LODR).
Policy on Directors' appointment and remuneration
The current policy is to have an appropriate mix of executive and independent directorsto maintain the independence of the board and separate its functions of governance andmanagement. The policy of the Company on directors' appointment and remunerationincluding criteria for determining qualifications positive attributes independence ofdirectors and other matters as required under Section 178(3) of the Companies Act 2013 isavailable on the Company's website www.tdps.co.in. There has been no change in the policysince the last fiscal year. We affirm that remuneration paid to the directors is as perthe terms laid out in the Nomination and Remuneration policy of the Company.
Details of Policy on directors' appointment and remuneration form part of theCorporate Governance report - Annexure 10.
As on March 31 2018 the Company has five (5) wholly owned subsidiaries - DF PowerSystems Private Limited (an Indian Subsidiary) TD Power Systems (USA) Inc. in the UnitedStates of America TD Power Systems Japan Limited in Japan TD Power Systems Europe GmbHin Germany & TD Power Systems Jenerator Sanayi Anonim Sirketi in Turkey. Eachof the above subsidiaries is directly owned 100% by TD Power systems Limited.
During the year the Board of Directors reviewed the affairs of the subsidiaries. Inaccordance with Section 129(3) of the Companies Act 2013 read with Rule 8 of Companies(Accounts) Rules 2014 the Company has prepared its consolidated financial statementsincluding all the said subsidiaries which is forming part of this Report. Further astatement containing the salient features of the financial statement of the saidsubsidiaries in Form AOC-1 is appended as Annexure 2 of the Boards' Report.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on our websitewww.tdps.co.in. These documents will also be available for inspection during businesshours at our registered office in Bengaluru India. A review of the operations of thesubsidiaries is as follows:
During the year ended March 31 2018 DF Power Systems Private Limited did not conductany activities except the residual activities in respect of completed projects in respectof EPC contracts undertaken by it. For the year ended March 31 2018 this companyincurred a loss of Rs.2303.16 lakhs in the absence of operating revenue. Networth of theCompany as at March 31 2018 is negative The Company is evaluating further businessproposals to render engineering services to utilize the tax credits and is negotiatingwith trade creditors for settlement with remission/reduction in liability on account ofproduct warranty on equipment supplied by them which will reduce the negative networth. USSubsidiary
The operations of this subsidiary have seen a revival during the year. The Marketingteam has been strengthened resulting in improved market reach & increased orders. .The operations of this Company during the year under report have resulted in revenue ofRs.1110 lakhs as compared to Rs.1862 lakhs in Fiscal 2017. The loss before tax is Rs.217lakhs in Fiscal 2018 as compared to Rs 95 lakhs in fiscal 2017.
Major activities of this subsidiary have been conducted through the Company's Branchoffice at Japan and accordingly there were no revenue in Fiscal 2018. Loss before tax isRs.112 lakhs in Fiscal 2018 as compared to profit of Rs.4 lakhs in Fiscal 2017.
TDPS Europe has enhanced our market outreach in Europe improving access to Europeancustomers with potential to grow our order pipeline. Hydro has been the biggestcontributor to the sales in 2017 - 18 with 85% of the total sales. New customers have beenadded in steam hydro and gas segments. TDPS Europe continues to improve access toEuropean customers with potential to grow our order pipeline. The revenue for the year2017-18 is Rs. 2571 lakhs as compared to Rs 162 lakhs in fiscal 2017. Loss before tax isRs. 2.70 lakhs in Fiscal 2018 as compared to Rs. 281 lakhs in Fiscal 2017.
TD Power Systems Jenerator Sanayi Anonim Sirketi was incorporated in Turkey in June2017 to manufacture AC Generators for the Turkish market. Efforts are on to identify localpartners and suppliers who will partner with the company in producing the Turkish madegenerators meeting the local content requirements. Certain orders are under negotiation&the company is well placed to bag these orders for delivery in March 2019. As ofMarch 31 2018 Rs 33 Lakhs has been invested as capital in the company to fundpre-operative expenses.
Internal Financial Control
The Company has designed and implemented a process driven framework for InternalFinancial Controls ("IFC") within the meaning of the explanation to Section134(5) (e) of the Companies Act 2013. For the year ended March 31 2018 the Board is ofthe opinion that the Company has sound IFC commensurate with the nature and size of itsbusiness operations and operating effectively and no material weakness exists. The Companyhas a process in place to continuously monitor the same and identify gaps if any andimplement new and/or improved controls wherever the effect of such gaps would have amaterial effect on the Company's operations.
Directors' Responsibility Statement
Pursuant to clause (c) of sub section (3) of Section 134 of the Companies Act 2013with respect to the Directors' Responsibility Statement it is hereby confirmed that a. Inthe preparation of the annual accounts for the financial year ended March 31 2018the applicable accounting standards have been followed along with proper explanationrelating to material departures; b. The directors have selected such accounting policiesand applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairsof the Company at the end of the financial year and of the profit and loss ofthe Company for that period; c. The directors have taken proper and sufficient care forthe maintenance of adequate accounting records in accordance with the provisions ofthis Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; d. The directors have prepared the annualaccounts on a going concern basis; e. The directors have laid down internalfinancial controls to be followed by the Company and that such internalfinancial controls are adequate and were operating effectively; and f. Thedirectors have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
Board of Directors' & Key Managerial Personnel
Consequent on retirement from services of the Company Mr K. G. Prabhakar ceasedto be whole time Director from closing of business hours of June 27 2018. As a non-wholetime Director he is liable to retire by rotation at the ensuing Annual General Meetingand being eligible seeks re-appointment. The Board recommends his re-appointment.Ms. Prathibha Sastry was appointed as an Additional Director of the Company effectiveSeptember 27 2017 pursuant to the provisions of Section 161 of the Companies Act 2013and Article 134 of the Article of Association of the Company to hold the office ofdirector up to the date of this AGM i.e. September 26 2018. Pursuant to therecommendations of the Nomination & Remuneration Committee of the Board Ms. PrathibhaSastry is to be appointed as Director of the Company pursuant to Section 152 of theCompanies Act 2013 to hold office as an Independent Director in terms of Section 149(10)of the Companies Act 2013 and rules made thereunder for a fixed initial term of fiveyears up to September 262022 (effective from September 27 2017). A brief resume andother details of Mr. K.G. Prabhakar Ms. Prathibha Sastry Mr. Nithin Bagamane andRavi Kanth Mantha as required under the Listing Regulations Companies Act 2013 andSecretarial Standard form part of Corporate Governance Report/Notice of 19th AGM.
Ms. Nandita Lakshmanan and Mr. Arjun Kalyanpur Independent Directors of the Companyhave resigned as directors with effect from August 10 2017 and January 10 2018respectively due to professional pre-occupation. Your directors place on record theirsincere appreciation of valuable service rendered by Ms. Nandita Lakshmanan and Mr. ArjunKalyanpur during their tenure as directors of the Company.
Risk Management Policy
Pursuant to Section 134(n) of the Companies Act 2013 a Risk Management Committee ofthe Board of Directors of the Company has been constituted. The details of the Committeeand its terms of reference are set out in the corporate governance report forming part ofthis report.
While the Company has identified certain major risks and initiated appropriate measuresto mitigate the said risks steps to strengthen the risk management framework has beeninitiated.
_The Auditors' report for the fiscal 2018 does not contain any qualificationreservation or adverse remark. The Auditors' Report is enclosed with the financialstatements in this Annual Report. During the year under review the Auditorshave not reported any fraud in terms of Section 143(12) of the Companies Act 2013.
The Secretarial Auditors' report for the fiscal 2018 does not contain anyqualification reservation or adverse remark. The Secretarial Auditors' Report isenclosed with Annexure 8 to the Board Report in this Annual Report.
_ As provided in the Listing Regulations/LODR the certificate oncorporate governance is enclosed to the Board's report. The said report does notcontain any qualification reservation or adverse remark.
M/s. Varma & Varma Chartered Accountants (Firm Registration No:004532S) have beenappointed as the Statutory Auditors of the Company for a period of five Years from theconclusion of the previous Annual General Meeting held on September 27 2017 till theconclusion of the 23rd Annual General Meeting of the Company. The requirement ofratification of Statutory Auditors at every Annual General Meeting of the Company has beendispensed by the Companies Amendment Act 2017.
As required under Section 204 of the Companies Act 2013 and Rules made thereunder theBoard has appointed Mr. Sudhir V Hulyalkar Practicing Company Secretary Bangalore asthe Secretarial Auditor for the Financial Year 2018-19.
In terms of Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 M/s. Rao Murthy & Associates CostAccountants Bangalore have been appointed as Cost Auditors of the Company for theFinancial Year 2018-19.
Extract of the Annual Return
In accordance with Section 134(3) (a) of the Companies Act 2013 an extract of theAnnual Return in the prescribed format is appended as Annexure 1 to the Boards' Report.
Number of Board Meetings
The Board met five times during the Financial Year 2017-18. The details of which aregiven in the Corporate Governance report that forms part of this Annual Report. Themaximum gap between any two meetings did not exceed 120 days as prescribed by theCompanies Act 2013.
Conservation of Energy Research and Development Technology Absorption ForeignExchange Earnings and Outgo
Information required under Section 134(3)(m) of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules 2014 for the financial year ended 31st March 2018 inrelation to the Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo is provided in the Annexure 4 forming an integral part of this BoardReport.
Particulars of Loans Guarantees or Investments
Loans and investments covered under Section 186 of the Companies Act 2013 during thefinancial year 2017-18 are as follows
|Nature of Transaction ||Date of Board Resolution/ Transaction ||Name of the person to whom it is made ||Amount ||Purpose |
|Loan ||06/08/2015 ||TD Power Systems (USA) Inc. || ||Working Capital |
| ||13/04/2017 || ||USD 100000 || |
| ||03/08/2017 || ||USD 200000 || |
|Loan ||02/02/2017 ||TD Power Systems Europe GmbH || ||Working Capital |
| ||27/04/2017 || ||Euro 100000 || |
| ||03/08/2017 || ||Euro 100000 || |
|Capital ||05/09/2017 || ||Euro 200000 || |
|Capital ||18/05/2017 ||TD Power Systems Jenerator || ||Establishment of the |
| ||15/06/2017 ||Sanayi Anonim Sirketi ||USD 3700 ||company & operating |
| ||10/08/2017 || ||USD 10650 ||expenses |
| ||25/10/2017 || ||USD 25000 || |
| ||31/01/2018 || ||USD 12000 || |
Particulars of employees
The ratio of the remuneration of each whole- time Director and Key Managerial Personnel(KMP) to the median of employees' remuneration as per the provisions of Section 197(12) ofthe Companies Act 2013 read with Rule 5 of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is appended as Annexure 5 to this Board Report.
Additionally the following details form part of Annexure 6 to the Boards' report
Details of employees in receipt of a remuneration of Rs. 1.02 crore ormore per year
Statement containing the name of top 10 employees in terms ofremuneration drawn
None of the employees is in receipt of a remuneration of Rs.8.5 lakhs or more a monthfor part of the year.
None of the employees employed throughout the financial year or part thereof was inreceipt of remuneration in that year which in the aggregate or as the case may be at arate which in the aggregate is in excess of that drawn by the managing director orwhole-time director or manager and holds by himself or along with his spouse and dependentchildren not less than two percent of the equity shares of the Company.
Committees of the Board
According to the Companies Act 2013 and SEBI LODR the Board has five (5) Committees ason March 31 2018 i.e. Audit Committee Nomination and Remuneration CommitteeStakeholders Relationship Committee Corporate Social Responsibility Committee and RiskManagement Committee. The detailed note on composition of the Board and its committees isdisclosed in the Report on Corporate Governance forming part of this report.
Corporate Social Responsibility Committee
The Board has a Corporate Social Responsibility (CSR) Committee which ascertains theactivity to be undertaken by the Company. The details of Composition of CSR Committeeterms of reference and annual report on CSR activities as required under the Companies(Corporate Social Responsibility Policy) Rules 2014 has been appended as Annexure 7 andforms an integral part of this Report. Your Company's Corporate Social ResponsibilityPolicy (CSR Policy) is available on the website of the Company at www.tdps.co.in.
Your Directors state as follows
1. No significant or material orders were passed by the Regulators or Courts orTribunals impacting the going concern status and Company's operations in future.
2. There was no issue of equity shares with differential rights as to votingdividend or otherwise.
3. There was no issue of shares including as sweat equity shares or employeestock options.
4. There were no deposits covered under Chapter V of the Companies Act 2013.
5. No money has been provided by the Company for purchase of its own shares byemployees or by trustees for the benefit of employees. 6. No subsidiaries have paidremuneration to Managing Director.
7. The Company has in place an Anti-Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up toredress complaints received regarding sexual harassment. During the year underreview there were no cases filed pursuant to the Sexual Harassment of Women at theWorkplace (Prevention Prohibition & Redressal) Act 2013.
Electronic copies of the Annual Report 2017-18 and the Notice of the 19th AnnualGeneral Meeting will be sent to all members whose email addresses are registered with theCompany/Depository Participants. For members who have not registered their emailaddresses physical copies are sent in the permitted mode.
Your Directors place on record their appreciation of the contribution and support ofthe employees at all levels. They also place on record their appreciation of the continuedsupport and faith extended during the year by the Company's customers suppliers bankersand shareholders.
| ||For and on behalf of the Board of Directors |
|Bangalore ||Mohib N. Khericha |
|May 23 2018 ||Chairman |