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Triveni Turbine Ltd.

BSE: 533655 Sector: Engineering
NSE: TRITURBINE ISIN Code: INE152M01016
BSE 00:00 | 24 Mar 308.20 -6.65
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NSE 00:00 | 24 Mar 308.75 -5.90
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OPEN 315.00
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VOLUME 74074
52-Week high 368.30
52-Week low 146.90
P/E 72.86
Mkt Cap.(Rs cr) 9,798
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 315.00
CLOSE 314.85
VOLUME 74074
52-Week high 368.30
52-Week low 146.90
P/E 72.86
Mkt Cap.(Rs cr) 9,798
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Triveni Turbine Ltd. (TRITURBINE) - Director Report

Company director report

Dear Shareholder

Your Directors are pleased to present the 27th Annual Report along with the auditedfinancial statements for the financial year ended March 31 2022.

Financial Results (Rs In millions) Consolidated Standalone 2021-22 2020-212021-22 2020-21

Revenue from operations 8522.4 7025.8 8113.7 6969.3 Operating Profit (EBITDA)1921.4 1667.0 1580.3 1594.4 Finance Cost 10.2 11.4 7.9 11.2 Depreciation andAmortisation 202.8 202.1 200.2 201.8 Profit before share of profit/(loss) of joint venture1708.4 1453.6 1508.3 1381.5 Share of net profit/(loss) of joint venture accounted for(42.4) 52.5 - -using the equity method Profit before exceptional items and tax 1666.01506.1 1508.3 1381.5 Exceptional Items* 1981.9 (185.2) 1889.0 (185.2) Profit beforeTax (PBT) 3647.9 1320.9 3397.3 1196.3 Tax Expenses 946.0 296.3 902.3 309.0 Profitafter Tax (PAT) 2701.9 1024.6 2495.0 887.2 Other Comprehensive income (net of tax)198.4 49.4 4.0 50.1 Total Comprehensive income 2900.3 1074.0 2498.9 937.4 Earning perequity share of Rs 1 each (in Rs) 8.36 3.17 7.72 2.74 Retained earnings brought forward5999.8 4964.1 5560.8 4662.5 Appropriation: - Equity dividend 711.3 - 711.3 -Retainedearnings carried forward 7987.7 5999.8 7341.7 5560.8

*In FY22 exceptional items represent settlement consideration of Rs 1889 millions(net of expenses) received by the Company pursuant to settlement agreement dated September6 2021. In FY21 exceptional items represents payment towards Voluntary Retirement Scheme(VRS) for workmen.

No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year of the Company to which thesefinancial statements are related to and the date of this report.

Business Operations

The Company withstood a difficult start for the year with the onset of the deltavariant of COVID-19 and was able to achieve satisfactory overall performance. Limitationson international travel during the peak infection periods led to a lower internationalorders during initial half of the year but this challenge was overcome and the Company metits expected annual order booking targets. Some of these orders could not be executed andlowered the international share of turnover.

On consolidated basis revenue from operations during the year was Rs 8522 million anincrease of 21%. Operating profit (EBITDA) was higher by 15% at Rs 1921 million againstprevious year's Rs 1667 million. Operating margins of the Company have been maintainedthrough adequate controls on selling and administration expenses and the Company returnedback to its pre-COVID performance levels. The Company was largely able to absorb thehigher cost structure as a result of steep rise in raw material prices in the currentyear. Cash flows from operations were satisfactory and liquidity has improvedsubstantially.

In the domestic market the Company was able to double order finalization in the lastquarter compared to the same period the prior year. This resulted in a 66% increase inorder intake over the previous year. International order bookings grew at a faster ratethan the domestic market with an annual increase of 122% over the previous year. Oil& gas sugar distillery food processing pulp & paper chemicals and waste heatrecovery (steel and cement) were the primary industries that generated enough traction toallow for the finalization of new products in the current year. The surge in order bookingin the aftermarket industry was driven by spares and service orders from internationalmarkets.

Apart from remaining focused on its existing market the Company took steps to extendits addressable market by reaching out to new geographies and customer segments andconsolidating its position. This is consistent with the Company's five-year growthstrategy. Enhancements in execution capacities are also being carried out to complementthis development strategy by enhancing in-house assembly and testing capacity. In order tosupport the Company's strategy of keeping a competitive edge in the core value chainoperations the Company is upgrading its supplier and subcontracting ecosystem.

The Company's employees are at the core of all of these accomplishments and programs.The Company increased its investment in strengthening its human resources in order tobuild capability to handle the challenges ahead.

Dividend

Pursuant to the requirements of the regulation 43A of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 ("Listing Regulations") the Companyhas adopted a Dividend Distribution Policy. This Policy has been uploaded on the websiteof the Company and can be accessed at http://www.triveniturbines.com/key-policies.

At its meeting on October 26 2021 the Board of Directors declared an interim dividendof 40% (Rs 0.40 per equity share) and a special dividend of 60% (0.60 per equity share)based on the criteria set forth in the Dividend Distribution Policy which were paidsubsequently. In addition the Board of Directors has recommended a final dividend of 85%(Rs 0.85 per equity share) and a special dividend of 70% (0.70 per equity share) for thefiscal year 2021-22. The total dividend for the fiscal year 2021-22 is 255% (Rs 2.55 perequity share) including interim and special dividend of 100%. The total outlay for equitydividends for the year is Rs 824.4 million resulting in a dividend payout of 30.26% ofthe standalone profits of the Company.

Transfer to reserves

We do not propose to transfer any amount to general reserve.

Subsidiaries/Joint ventures

During the year Triveni Turbines DMCC (TTDMCC) Dubai (a wholly-owned subsidiary ofTTEPL) acquired 70% equity shares of TSE Engineering Pty. Ltd. (TSE) a companyregistered under the laws of South Africa which is engaged in high precision engineeringrepairs and servicing of industrial plant machinery in South African Development Community(SADC) region. Consequently TSE became a step down subsidiary of the Company.

Presently the Company has a wholly-owned foreign subsidiary namely Triveni TurbinesEurope Pvt. Ltd. (TTEPL) UK three step-down foreign subsidiaries namely TTDMCCTriveni Turbines Africa (Pty) Ltd. (TTAPL) South Africa (a wholly-owned subsidiary ofTTDMCC) and TSE and a wholly-owned domestic subsidiary namely Triveni Energy SolutionsLtd (TESL) (formerly known as GE Triveni Ltd.).

As reported earlier for more than two years the Company had several disputes with DINetherland BV (DI) joint venture (JV) partners and General Electric and its affiliates(GE Parties) in relation to TESL the Company's erstwhile joint venture. The Company andGE Parties including DI executed a Settlement Agreement on September 6 2021 to fullyand finally settle and resolve all such disputes litigation and arbitration pendingbefore various legal forums which have been withdrawn. According to the Settlementagreement the Joint Venture Agreement and other Ancillary Agreements with GE Parties wereterminated and the Company purchased the entire stake of DI in TESL for Rs 80 million andthe name of the JV Company was changed from GE Triveni Ltd. to Triveni Energy SolutionsLtd. (TESL). Consequently TESL ceased to be a joint venture and became a wholly ownedsubsidiary of the Company on September 6 2021. However TESL was considered as a JointVenture for the purposes of consolidated financial statements up to September 6 2021.

DI paid the Company a settlement consideration of Rs 1889 million (net of expenses)was recorded as an exceptional item in the statement of profit and loss.

During the year except for TSE and TESL as stated earlier no company became orceased to be your Company's subsidiaries joint ventures or associates. As required underSection 129 of the Companies Act 2013 read with the Companies (Accounts) Rules 2013 astatement highlighting the salient aspects of the financial statements ofsubsidiaries/joint ventures is submitted as Annexure A to the Board's Report in thestandard format AOC-1.

Consolidated Financial Statements

Your Directors have attached the Consolidated Financial Statements of the Company forthe financial year ended March 31 2022 prepared in accordance with the applicable IndAS which form a part of the Annual Report in accordance with the provisions of theCompanies Act 2013 and Indian Accounting Standards (Ind AS) as specified in Section 133 ofthe Companies Act 2013 (‘'Act'') and Regulation 34 of the Listing Regulationsread with other applicable provisions.

The financial statements including consolidated financial statements and accounts foreach of the subsidiaries are available on the Company's website at https://www.triveniturbines.com/annual-report-subsidiaries.html.

Directors' Responsibility Statement

Pursuant to Section 134(5) of the Act your Directors confirm that: a) In thepreparation of the annual accounts for the financial year ended March 31 2022 theapplicable accounting standards have been followed and there are no material departures;

b) They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for that period;

c) They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d) They have prepared the annual accounts on a ‘going concern' basis;

e) They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively; and

f) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.

Corporate Governance

In accordance with Listing Regulations a separate report on Corporate Governance isgiven in Annexure B along with the Auditors' Certificate on its compliance in Annexure

C to the Board's Report. The Auditors' Certificate does not contain any qualificationreservation and adverse remark.

Related Party Transactions

The Company has formulated a Related Party Transactions Policy which has been uploadedon its website at http://www.triveniturbines.com/key-policies. The Company strivesto enter in to related party transactions on a commercial and arm's length basis in orderto optimize the overall resources of the group.

During the year all transactions with related parties were in the ordinary course ofbusiness on an arm's length basis.

According to the Company's policy on the materiality of related party transactions theCompany had not entered into any contract/arrangement/transaction with related partiesthat may be considered material. This Report does not include Form AOC-2 since there wasno related party transaction that required disclosure under Section 134(3) (h) of the Actand Rule 8(2) of the Companies (Accounts) Rules 2014.

Risk Management Policy and Internal Financial Controls

In accordance with the amended terms of the Listing Regulations the Company revisedand implemented its new Enterprise Risk Management (ERM) Framework & Policy. Not onlydid the new policy meet the criteria of the amended Listing Regulations but it is also inline with ISO 31000:2018 and the COSO ERM framework. The policy framework strives to matchthe Company's actions and procedures with its strategy and governance practices.

To respond to the dynamic nature of events around the business risk-based thinking isencouraged at all levels of management and decision-making. The pandemic years of 2020 and2021 demonstrated the importance of developing robust business processes in order toachieve desired business goals in the face of uncertainty. While the Company's managementworks with the best possible information available at the time it also strives to improveon a continuous basis through learning and experience. At the operational level the riskis owned by the head of each business function who conduct frequent reviews to plan andimplement risk mitigation strategies in a structured manner. This structured andcomprehensive approach to enterprise risk management takes into account human behaviorsand cultural factors to ensure that the risk management policy and framework is aseffective as possible.

As required under Section 134 (5) (e) of the Act and integrated with the riskmanagement framework Internal Financial Controls System has been laid out whichcomprehensively deals with and elaborates financial controls financial reporting andtimely preparation of reliable financial statements. Additionally clearly defineddelegation of authority policies and procedures for efficient conduct of the businessoperating and financial controls have been put in place to safeguard the assets identifyand minimize leakages and wastages and to detect and prevent frauds and errors. There isan inbuilt mechanism through self- certification periodic testing and internal audit toensure that all controls are working effectively.

Directors and Key Managerial Personnel (KMP)

As per the provisions of the Act Mr. Arun Prabhakar Mote (DIN: 01961162) ExecutiveDirector is liable to retire by rotation at the ensuing Annual General Meeting (AGM) ofthe Company and being eligible seeks re-appointment. The Board recommends hisreappointment. The notice convening the 27th AGM sets out the details.

Mr. Vijay Kumar Thadani (DIN: 00042527) was on the recommendation of Board/Nominationand Remuneration Committee (NRC) appointed as an Independent director with the approvalof shareholders through postal ballot for a period of 5 years w.e.f. December 15 2021whose office shall not be liable to retire by rotation.

The Board of Directors of the Company in the meeting held on March 17 2022 on therecommendation of NRC and subject to the approval of shareholders approved theappointment of Mr. Vipin Sondhi (DIN: 00327400) as an Independent Director for a period of5 years w.e.f March 17 2022 whose office shall not be liable to retire by rotation andMr Pulak Chandan Prasad (DIN: 00003557) as non-executive non- Independent director whoseoffice shall be liable to retire by rotation. The approval of members is being soughtthrough postal ballot.

Mr. Thadani and Mr. Sondhi Independent Directors and Mr. Prasad non-independentdirector have necessary expertise experience knowledge and are persons of integrityaccording to the Board.

With deep regret we report the sad demise of Dr. Santosh Pande (DIN: 01070414) onSeptember 202021 who was on the Board since 2017 as a non-executive Independent director.The Board places on record its appreciation for his invaluable contribution and guidanceprovided to the Company during his tenure.

The Company has received necessary declaration from each of the Independent Directorunder Section 149 of the Act that he/she meets the criteria of independence laid down inSection 149(6) of the Act and Regulation 25 of the Listing Regulation.

As required under the provisions of Section 203 of the Act the Key ManagerialPersonnel namely the Chairman & Managing Director the Vice Chairman & ManagingDirector the Executive Director the Vice President & CFO and the Company Secretarycontinue to hold that office as on the date of this report.

Board Evaluation Mechanism

Pursuant to the provisions of Companies Act 2013 and the Listing Regulations the Boardhas carried out an annual performance evaluation of its own performance those ofindividual Directors as well as of its committees. The evaluation criteria as defined inthe Nomination and Remuneration Policy of the Company covered various aspects of theBoard such as composition performance of specific duties obligations and governance.

The performance of individual Directors was evaluated on parameters such as number ofmeetings attended contribution made in the discussions contribution towards formulationof the growth 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 have expressed their satisfaction with theevaluation process.

Policy on Directors' appointment and remuneration

The policy of the Company on the appointment and remuneration of the Directors asapproved by the Board Including criteria for determining qualifications positiveattributes independence of a director and other matters provided under sub-section (3) ofSection 178 of the Companies Act 2013 and the Listing Regulation has been uploaded on thewebsite of the Company at http://www. triveniturbines.com/key-policies. The remunerationpaid to the Directors is as per the terms laid out in the policy.

Board Meetings

During the year six Board Meetings were held the details of which are given in theCorporate Governance Report that forms part of the Board's Report. The maximum intervalbetween the two meetings did not exceed 120 days as prescribed in the Companies Act 2013and the Listing Regulations.

Audit Reports and Auditors Audit Report

The Auditors report for FY 22 does not contain any qualification reservation oradverse remark. Further pursuant to Section 143(12) of the Act the Statutory Auditors ofthe Company have not reported any instances of fraud committed in the Company by itsofficers or employees the details of which would need to be mentioned in the Board'sReport.

Statutory Auditors

Under Section 139(2) of the Companies Act 2013 and the Rules made thereunder it ismandatory to rotate the statutory auditors on completion of two terms of five consecutiveyears and each such term would require approval of the shareholders. In line with therequirements of the Companies Act 2013 Statutory Auditor Walker Chandiok & Co LLP(ICAI Firm Registration No.001076N/ N500013) (WCC) were appointed as Statutory Auditor ofthe Company at the 22nd AGM held on 9th August 2017 to hold office from the conclusion ofthe said meeting till the conclusion of the 27th AGM to be held in the year 2022. The termof office of WCC as Statutory Auditors of the Company will conclude from the close of theforthcoming AGM of the Company.

The Board of Directors of the Company based on the recommendation of the auditcommittee at its meeting held on May 13 2022 have recommended the reappointment of WCCas the Statutory Auditor of the Company to hold office for a second term of fiveconsecutive years from the conclusion of the 27th AGM till the conclusion of the 32nd AGMfor the approval of the shareholders at the ensuing AGM. During the year the statutoryauditors have confirmed that they satisfy the independence criteria required under theCompanies Act 2013. The Board recommends their reappointment to the shareholders. Thenotice convening the 27th AGM sets out the details.

Cost Auditor

In terms of the provisions of Section 148 of the Act read with the Companies (Auditand Auditors) Rules 2014 and the Companies (Cost Records and Audit) Rules 2014 dulyamended cost audit is applicable to the Company for the FY 22. The Company has beenmaintaining cost accounts and records in respect of applicable products. M/s J.H

& Associates Cost Accountants Bengaluru have been appointed as the Cost Auditorsto conduct the cost audit of your Company for the FY 23. The Board recommends theratification of the remuneration to the Cost Auditors.

Secretarial Auditor

In terms of Section 204 of the Act read with the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board appointed M/s Sanjay Grover& Associates a firm of Company Secretaries in practice to undertake the SecretarialAudit of the Company for FY 22. The report on secretarial audit is annexed as Annexure Dto the Board's Report. The report does not contain any qualification reservation oradverse remark.

Corporate Social Responsibility (CSR)

During the year a revised CSR policy was formulated by the CSR committee which on itsrecommendation was approved by the Board. The revised CSR Policy is available on theCompany's website at http://www.triveniturbines. com/key-policies. The composition of theCSR Committee and Annual Report on CSR Activities during FY 22 as recommended by the CSRCommittee and approved by the Board is provided in Annexure E to the Board's Report.

Audit Committee

The composition of the Audit Committee is provided in the Corporate Governance Reportthat forms part of this Annual Report.

Vigil Mechanism

The Company has established a vigil mechanism through a Whistle Blower Policy andthrough the Audit Committee to oversee genuine concerns expressed by the employees andother Directors. The Company has also provided adequate safeguards against victimizationof employees and Directors who may express their concerns pursuant to this policy. TheCompany has also provided a direct access to the Chairman of the Audit Committee onreporting issues concerned with the interests of the employees and the Company. The policyhas been uploaded on the website of the Company at http:// www.triveniturbines.com/key-policies.

Disclosure under the Sexual harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013

The Company has an Anti-Sexual Harassment policy in line with the requirements ofSexual Harassment Of Women at The Workplace (Prevention Prohibition and Redressal) Act2013. The Internal Complaint Committee (ICC) has been set up to address complaintsreceived regarding sexual harassment. During the period under review no complaint wasreceived by the ICC.

Particulars of loans guarantees or investments made under Section 186 of the CompaniesAct 2013

Note 5 of the standalone financial statements of the Company included in the AnnualReport provides the particulars of the investments made by the Company in the security ofother corporate bodies. The Company has not given any loans or guarantees nor provided anysecurity in connection with a loan to any corporate body or person.

Conservation of energy technology absorption foreign exchange earnings and outgo

The particulars required under Section 134(3) (m) of the Companies Act 2013 read withthe 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 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is provided in Annexure G to the Board's Report. The particulars of employees drawingremuneration in excess of limits set out in the Rule 5(2) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in Annexure H to theBoard's Report. However as per the provisions of Section 136 of the Companies Act 2013the Annual Report is being sent to all the members of the Company excluding the aforesaidinformation. The said information is available for inspection by the members at theregistered office of the Company up to the date of the ensuing Annual General Meeting.Any member interested in obtaining such particulars may write to the Company Secretary atthe registered office of the Company.

Employees Stock Option

There are no outstanding stock options and no stock options were either issued orallotted during the year.

Management's discussion and Analysis

In terms of provisions of Regulation 34 of the Listing Regulations the Management'sdiscussion and analysis is detailed out in this Annual Report.

Business Responsibility Report

The Listing Regulations mandate top 1000 listed entities based on the marketcapitalization as on March 31 of every financial year to include the BusinessResponsibility Report as part of the Director's Report of the Company. The report in theprescribed form is annexed as Annexure I to the Board Report.

Secretarial Standards

The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand that such systems are adequate and operating effectively.

Deposits

The Company has not accepted any public deposits under Section 73 of the Companies Act2013.

Annual Return

The Annual Return of the Company for the financial year 2021-22 is available on theCompany's website at www.triveniturbines.com

Significant and material orders/General disclosures

There are no significant and material orders passed by regulators or courts ortribunals impacting the going concern status and the Company's future operations.

During the year under review neither any application was made nor any proceedings ispending against the Company under the Insolvency and Bankruptcy Code 2016. Further therewas no instance of one-time settlement with any bank or financial institution.

Human Resources

We strongly believe that employees continue to be the key driving force and a pivotalsource to enable competitive advantage of the Company. The Company's ongoing efforts toalign organizational priorities with employees' aspirations have helped in the developmentof a robust and resilient workforce in a significant way. The employee's mental toughnessfocus and the sense of belonging enabled them to continue their journey in supporting theCompany's priorities without interruption. As an organization the two-tiered approach– timely COVID-19 vaccination of all employees & their family members as well ascoverage under "Corona Kavach" to safeguard them from medical risk –immensely helped the Company in terms of zero man-hours lost owing to the Pandemic.

The Company's HR processes and practices for attracting engaging motivating andretaining employees have made significant contribution to creating an environment whereemployees can give their best. The continuing focus on fostering a high performing cultureand building competencies for the present and future has supported in adapting to thechanging business scenario.

The keys to dealing with uncertainty are adaptability flexibility and agility. Thiswas exemplified effectively while driving the GETs' introduction into the Company.Although the Pandemic delayed GETs onboarding it did not deter the induction andpreparedness of GETs for business roles from being completed on schedule. This wasaccomplished while maintaining the content quality and intensity of the Company'smarquee GET induction program.

The Company continues its efforts to connect communicate and engage with employees inorder to foster a learning culture that will enable high-performing teams to cope with theVUCA world. Development engagement and successful talent management through constantre-skilling and upskilling of employees as well as building the leadership bench andcreating a talent pipeline for the future are critical to the growth ambitions of theCompany.

Appreciation

Your Directors wish to take this opportunity to express their sincere appreciation toall the stakeholders customers suppliers shareholders employees the CentralGovernment the Karnataka Government financial institutions banks and all other businessassociates for their whole-hearted support and co-operation. We look forward to theircontinued support and encouragement.

For and on behalf of the Board of Directors
Dhruv M Sawhney
Chairman & Managing Director
Date: May 13 2022 DIN 00102999

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