Your Directors have pleasure in presenting the 23rd Annual Report andaudited financial statements for the financial year ended March 31 2018.
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|- Equity dividend (including dividend distribution tax)* || |
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|- Transfer to General Reserves || |
|Retained earnings carried forward || |
* including proposed final dividend of the previous year which was paidduring the year.
With the plough back of profitability of ` 504.48 million during theyear in the Retained Earnings Other Equity stands at
` 4131.53 million and the net worth of the Company is ` 4461.50 millionas on 31.3.18.
No material changes and commitments affecting the financial position ofthe Company have occurred between the end of the financial year of the Company to whichthese financial statement relate and the date of this report.
The performance may be considered satisfactory given the subduedbusiness conditions in the domestic and international market and various key positivesachieved by the Company.
During the year the Company has achieved 18% higher order intake overthe previous year. This has been made possible through effective marketing and focus onkey markets and our international offices have played a pivotal role in achieving thetarget. A healthy carry forward order book higher by 12% over the previous year's formsthe basis for an expected improved performance during the next financial year. Furtherworld class new manufacturing facility has been set up which will help the Company inquality improvement shortening delivery lead time manufacturing turbines of higher rangeand making available capacity to meet higher demand.
The order booking in the domestic market during the year was almost atthe same level as the previous year. There are some early signals of moderate improvementin the domestic market of under 30 MW in the last quarter of the year. This may be due togradual wearing of the effects of demonetisation and GST. New enquiry generation duringthe current year has been good with an increase of 7 percent over last year.
The order booking in the international market was higher by 44% overthe previous year and the trend of order booking continues to be encouraging till the dateof the report. During the year the business buoyancy was not broad based but was limitedto only a few select regions showing spurts of growth but our Company has consciouslybroad based our offerings over a wider geography thereby minimising the risk ofoverdependence on few geographies. The Company has consciously also focused efforts onhigh potential pockets for growth in identified areas.
In order to maintain sustainable revenue growth in near future theCompany has focused to strengthen the marketing organisation with competent professionalsclear accountability and targets. Necessary investments have been made in productdevelopment and marketing set-up in India and for foreign subsidiaries. The benefits ofthese investments is expected to be reflected in the future operations.
Despite subdued business conditions the aftermarket business has showngood growth of 14%. The activity level in the domestic market has picked up steam and hasseen a steady growth in enquiry generation. Driven by our persistent efforts in thedomestic market in several key sectors we could persuade customers for improvements andupgrades on their existing steam turbines. Building up on the past efforts in setting upglobal offices and ensuring close proximity to our customer base the Company is activelypursuing new enquiries with a view to grow international aftermarket business. The Companyhas already seen a build-up in sentiment in select export markets.
A robust R&D is at the core of our strategy to benchmark againstthe global leaders and narrow any gap that may exist in product performance andcompetitiveness without sacrificing on cost competitiveness and our unique ability ofdelivering against aggressive timelines. The Company strives to build on its leadershipposition in industrial steam turbines by providing a value proposition to customers technically effcient products and world class service backed by technology.
The Board has in its meeting held on November 08 2017 declared anInterim dividend of 45% (Rs 0.45 per equity share). Further the Board of Directors haverecommended a final dividend of 55% (Rs 0.55 per equity share) for the financial yearended March 31 2018 and consequently the total equity dividend for FY 18 amounts to `1.00 per equity share (100%) and the total outgo including for the proposed final dividendfor the FY 18 is ` 397.50 million (including dividend distribution tax) versus ` 476.58million (corresponding to 120 % dividend) in the previous year.
Dividend Distribution Policy
As per the provision of Regulation 43A of Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 (ListingRegulations) the top 500 listed companies based on Market Capitalisation shall formulatea Dividend Distribution Policy (Policy). Accordingly the Policy was adopted to set outthe parameters and circumstances that will be taken into account by the Board indetermining the distribution of dividend to the shareholders of the Company and to retainprofits earned by the Company. The Policy is available on the web site of the Company athttp://www.triveniturbines. com/key-policies.
The Company has a domestic subsidiary (considered as a Joint Venturefor the purposes of consolidated financial statements) namely GE Triveni Ltd (GETL)Bengaluru a wholly owned foreign subsidiary namely Triveni Turbines Europe Pvt. Ltd.(TTEPL) UK two step-down foreign subsidiaries namely Triveni Turbines DMCC (TTDMCC)Dubai (wholly owned subsidiary of TTEPL) and newly incorporated foreign subsidiarynamely Triveni Turbines Africa (Pty) Ltd (TTAPL) (wholly owned subsidiary of TTDMCC ).As required under the provisions of Section 129 of the Companies Act 2013 read withCompanies (Accounts) Rules 2013 a statement containing salient features of the financialstatements of subsidiaries is provided in the prescribed format AOC-1 as Annexure Ato the Board's Report.
The performance of GETL for the current year has not been satisfactorydue to deferment of some high value despatches to next year as per requirement of thecustomers. The loss after tax during the year is at ` 69.05 million mainly on account oflow turnover and increase in expenses. However based on the enquiry levels it isexpected that GETL will be able to secure more orders and scale up its activities and makeits presence felt in the segment it is operating.
The wholly owned foreign subsidiaries are expanding their foot printsand presence in their respective regional territories. This international structures areproviding strong marketing support for product order booking and aftermarket services.
In accordance with Regulation 16 of Listing Regulations none of thesubsidiaries is a material non Listed subsidiary. The Company has formulated a policy fordetermining material subsidiaries. The policy has been uploaded on the website of theCompany at http://www.triveniturbines.com/key-policies.
Consolidated Financial Statements
In accordance with Section 136 of the Companies Act 2013 andRegulation 34 of the Listing Regulations read with other applicable provisions yourDirectors have attached the Consolidated Financial Statements of the Company for financialyear ended March 31 2018 prepared in accordance with the applicable Ind AS which form apart of the Annual Report.
The financial statements including consolidated financial statementsand the audited accounts of each of the subsidiary are available on the Company's websitewww.triveniturbines. com These documents will be made available for inspection at theRegistered Office of the Company during business hours.
Directors' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013 your directorsconfirm that:
a) In the preparation of the annual accounts for the financial yearended March 31 2018 the applicable accounting standards have been followed and there areno material departures;
b) The directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;
c) The directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 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 internal financial controls to befollowed by the Company and that such internal financial controls are adequate and areoperating effectively; and
f) The directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.
In accordance with SEBI Regulations a separate report on CorporateGovernance is given in Annexure B along with the Auditors' Certificate on itscompliance in Annexure C to the Board's Report. The Auditors' Certificate does notcontain any qualification reservation and adverse remark.
Related Party Transactions
The Company has formulated a Related Party Transactions Policy whichhas been uploaded on its website at http://www. triveniturbines.com/key-policies. It isthe endeavour of the Company to enter into related party transaction on commercial andarms' length basis with a view to optimise the overall resources of the group.
All transactions entered into with related parties during the year werein the ordinary course of business of the Company and at arms-length basis. The Companyhad not entered into any contract/arrangement/transaction with related parties which couldbe considered material in accordance with the policy of the Company on the materiality ofrelated party transactions. Form AOC-2 is not attached with this Report as there was nosuch related party transaction for which disclosure in terms of Section 134(3)(h) of theCompanies Act 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014 isrequired.
Risk Management Policy and Internal Financial Controls
The Company follows a risk management policy the objective of which isto lay down a structured framework and system to identify potential threats to theorganisation and likelihood of their occurrences with a view to formulate effectivemitigation with a clear accountability and ownership. It is the endeavour of the Companyto devise processes and controls to improve the overall risk profile of the Company. Therisk policy aims at controlling and minimising the risks through effective mitigationmeasures internal controls and by defining risk limits and parameters.
Pursuant to the risk management policy the Company has instituted acomprehensive risk management framework. Detailed identification of risks is carried outalong with categorisation thereof based on severity of impact on the organisationincluding on its reputation. Such categorisation gives highest weightage to the riskswhich have the potential to threaten the existence of the Company. The Risk Committeecomprising of functional heads and the Executive Director oversees the risk managementactivities in the Company. The risk management policy and framework are reviewed regularlyto assess and maintain its effectiveness and relevance.
As required under Section134 (5) (e) of Companies Act 2013 andintegrated with the risk management framework Internal Financial Controls System has beenlaid out which comprehensively deals with and elaborates financial controls financialreporting and timely preparation of reliable financial statements. Additionally clearlydefined delegation of authority policies and procedures for effcient conduct of thebusiness operating and financial controls have been put in place to safeguard the assetsto identify and minimise leakages and wastages and to detect and prevent frauds anderrors. There is an inbuilt mechanism through self-certification periodic testing andinternal audit to ensure that all controls are working effectively.
Directors and Key Managerial Personnel (KMP)
As per the provisions of the Companies Act 2013 Mr. Dhruv M Sawhneywill retire by rotation at the ensuing Annual General Meeting (AGM) of the Company andbeing eligible seeks reappointment. The Board has recommended his re-appointment.
By virtue of provisions of Section 161(1) of the Act the Board ofDirectors of the Company have appointed Dr. Santosh Pande as an Additional Director witheffect from July 19 2017. The Shareholders of the Company at their 22nd AGM held onAugust 09 2017 appointed Dr. Pande as an Independent Director of the Company for a periodof 5 years.
The Company has received declarations of Independence in terms ofSection 149 of the Act and also under the Listing Regulations from all the IndependentDirectors. As required under the provisions of Section 203 of the Act the Key ManagerialPersonnel namely Chairman & Managing Director Vice Chairman & ManagingDirector Executive Director Executive Vice President & CFO and Company Secretarycontinue to hold that office as on the date of this report.
Employees Stock Option
There are no outstanding stock options and no stock options were eitherissued or allotted during the year.
M/s Walker Chandiok & Co LLP (ICAI Firm Registration No.001076N)/N500013 (WCC) were appointed as Statutory Auditors of the Company at the 22ndAGM to hold office for a period of five consecutive years from the conclusion of that AGMuntil the conclusion of 27th AGM of the Company to be held in the year 2022.
The Auditors report for FY 18 does not contain any qualificationreservation or adverse remark. Further pursuant to section 143(12) of the Act theStatutory auditors of the Company has not reported any instances of fraud committed in theCompany by its officers or employees the details of which would need to be mentioned inthe Board's Report.
In terms of the provisions of Section 148 of the Companies Act 2013read with the Companies (Audit and Auditors) Rules 2014 and the Companies (Cost Recordsand Audit) Rules 2014 duly amended cost audit is applicable to the Company for the FY 19.M/s J.H & Associates Cost Accountants Bengaluru have been appointed as the CostAuditors to conduct the cost audit of your Company for the FY 19. The Board recommends theratification of the remuneration to the Cost Auditors.
In terms of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Boardappointed M/s Sanjay Grover
& Associates a firm of Company Secretaries in practice toundertake the Secretarial Audit of the Company for FY 18. The report on secretarial auditis annexed as Annexure D to the Board's Report. The report does not contain anyqualification reservation or adverse remark.
Corporate Social Responsibility (CSR)
A CSR policy was formulated by the CSR committee which on itsrecommendation was approved by the Board. The CSR Policy is available on the Company'swebsite athttp://www. triveniturbines.com/key-policies.The composition of CSR Committeeand Annual Report on CSR Activities during FY 18 as approved by the CSR Committee isprovided in Annexure E to the Board's Report.
The composition of Audit Committee is provided in the CorporateGovernance Report that forms part of this Annual Report.
The Company has established a vigil mechanism through a Whistle BlowerPolicy and through the Audit Committee it oversees genuine concerns expressed by theemployees and other Directors. The Company has also provided adequate safeguards againstvictimisation of employees and Directors who may express their concerns pursuant to thispolicy. The Company has also provided a direct access to the Chairman of the AuditCommittee on reporting issues concerning the interests of the employees and the Company.The policy is uploaded on the website of the Company at http://www.triveniturbines.com/key-policies.
Disclosure under the sexual harassment of women at workplace(Prevention Prohibition and Redressal) Act 2013
The Company has in place an Anti-Sexual Harassment policy in line withthe requirements of sexual harassment of women at Work place (Prevention Prohibition andRedressal) Act 2013. The Internal Complaint Committee (ICC) has been setup to redresscomplaints received regarding sexual harassment. During the period under review nocomplaint was received by the ICC.
During the year four Board Meetings were held the details of whichare given in the Corporate Governance Report that forms part of the Board's Report. Themaximum interval between the two meetings did not exceed 120 days as prescribed in theCompanies Act 2013.
Particulars of loans guarantees or investments made under Section 186of the Companies Act 2013
The investment made by the Company in body corporate comprise onlyinvestments made by it in equity share capital of its subsidiary as disclosed in the notesto the audited financial statements forming part of this Annual Report. The Company hasnot given any loans or given any guarantee or provided any security in connection with aloan to any body corporate or a person.
Conservation of energy technology absorption foreign exchangeearnings and outgo
The particulars required under Section 134(3) (m) of the Companies Act2013 read with the relevant rules are provided in Annexure F to the Board's Report.
Particulars of Employees
The information as required under Section 197 of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is provided in Annexure G to the Board's Report. Theparticulars of employees drawing remuneration in excess of limits set out in the Rule 5(2)of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 areprovided in Annexure H to the Board's Report. However as per the provisions ofSection 136 of the Companies Act 2013 the annual report is being sent to all the membersof the Company excluding the aforesaid information. The said information is available forinspection by the members at the registered office of the Company up to the date of theensuing Annual General Meeting. Any member interested in obtaining such particulars maywrite to the Company Secretary at the registered office of the Company.
Management's discussion and analysis
In terms of provisions of Regulation 34 of the Listing Regulations theManagement's discussion and analysis is set out in this Annual Report.
Business Responsibility Report
The Listing Regulations mandate top 500 listed entities based on themarket capitalisation as on March 31 2018 the inclusion of the Business ResponsibilityReport as part of the Directors Report of the Company. The report in the prescribed formis annexed as Annexure I to the Board Report.
The Company has devised proper systems to ensure compliance with theprovisions of all applicable Secretarial Standards issued by the Institute of CompanySecretaries of India and that such systems are adequate and operating effectively.
The Company has not accepted any public deposits under Section 73 ofthe Companies Act 2013.
Extracts of Annual Return
Pursuant to section 92(3) of the Companies Act 2013 and Rule12(1) ofthe Companies (Management and Administration) Rules 2014 extracts of the annual returnin the prescribed form is annexed as Annexure J to the Board's Report.
Significant and material orders
There are no significant and material orders passed by regulators orcourts or tribunals impacting the going concern status and Company's operations in future.
The Company operates in technologically dynamic environment andcompetes with globally reputed players. The Company engages highly trained and motivatedteam to market its products carry out continual product improvements evolve newtechnologies provide value proposition for its customers and offer products which meetbenchmark effciency and quality standards.
The Company believes in continuous learning and the state-of-the-artin-house learning centre provides theme based training to all employees round the year tokeep them abreast with the technological and market developments. The learning centreimparts focused training programmes dealing with product knowledge skill building designcapabilities and in-house developed computer based training on product and leadership.Specially designed development modules have been created for our customer care engineers.
The Company has a robust and effective performance management system toidentify and nurture talents provide personal growth and job enrichment for retentionreward for their performance and achievements through set KRAs and goals. During FY18 2.5man days of training for each employee including workmen was achieved.
Policy on Directors' appointment and remuneration
The policy of the Company on the appointment and remuneration of thedirectors as approved by the Board including criteria for determining qualificationspositive attributes independence of a director and other matters provided undersub-section (3) of Section 178 of the Companies Act 2013 is uploaded on the website ofthe Company at http://www.triveniturbines.com/ key-policies. There has been no change inthe policy since the last fiscal year and the remuneration paid to the directors is as perthe terms laid out in the policy.
Board Evaluation Mechanism
Pursuant to the provisions of Companies Act 2013 and the ListingRegulations the Board has carried out annual performance evaluation of its ownperformance those of directors individually as well as evaluation of its committees. Theevaluation criteria as defined in the Nomination and Remuneration Policy of the Companycovered various aspects of Board such as composition performance of specific dutiesobligations and governance. The performance of individual directors was evaluated onparameters such as number of meetings attended contribution in the growth andformulating the strategy of the Company independence application of judgementsafeguarding the interest of the Company and minority shareholders time devoted apartfrom attending the meetings of the Company active participation in long term strategicplanning ability to contribute by introducing best practices to address businesschallenges and risks etc. The directors expressed their satisfaction with the evaluationprocess.
Your directors wish to take the opportunity to express their sincereappreciation to our customers suppliers shareholders employees the Central andKarnataka Government financial institutions banks and all other stakeholders for theirwholehearted support and co-operation. Your Directors also wish to record theirappreciation for the continued co-operation and support received from the Joint Venturepartner. We look forward to their continued support and encouragement.
For and on behalf of the Board of Directors
Dhruv M. Sawhney
Chairman and Managing Director DIN: 00102999
Place: Noida (U.P.) Date: May 22 2018