Your Directors have pleasure in presenting the 18th Annual Report and
audited accounts for the Financial Year (FY) ended March 31, 2013
(Rs. in Million)
|Revenue from operations (net)
|Operating Profit (EBITDA )
|Depreciation & amortisation
|Profit before tax (PBT )
|Profit after tax (PAT )
|Earning per equity share of Rs. 1 each (in Rs.)
|Equity dividend (including dividend distribution tax)
|Preference dividend (including dividend distribution tax)
|Transfer to General Reserve
|Surplus carried forward
The Board of Directors of your Company are pleased to recommend dividend on 8%
cumulative redeemable preference shares and equity shares for FY13 ended March 31, 2013 as
(a) Rs. 0.80 per preference share of face value of Rs. 10/- each (8%), the total
dividend payout for preference shares would be Rs. 2.62 million (including dividend
distribution tax) and
(b) final dividend of Rs. 0.55 per equity share of face value of Rs. 1/- each (55%).
The total equity dividend including the interim dividend for FY13 of Rs. 0.25 per equity
share (25%) paid in November 2012, amounts to Rs.0.80 per equity share (80%) and the total
outgo on account of equity dividend would be Rs. 308.12 million (including dividend
Even though the enquiry book remains healthy, the domestic market continues to remain
sluggish with order finalisation getting delayed. The Company expects some improvement in
the capex cycle if there is a cut in interest rates by the Reserve Bank of India. Even
though the order back-log as on March 31, 2013 of Rs. 4.7 billion is slightly lower than
last year, the expected order intake during the first quarter of FY14 will enable the
Company to improve its year on year performance. We expect a growth in export
order-booking and sales during FY14 on the back of the last two years intensive
global marketing efforts. With the strong focus on exports and after-market, the Company
expects to maintain its margins in the coming year.
The good work done in the past few years on innovation, research & development and
new product introductions catering to changing global customers needs are
continuing. Strengthening the Companys intellectual property and 3ling of new
patents globally, will continue as a focus area. Our joint venture, GE Triveni Ltd. is
executing another order for two 40 MW turbines, and we expect further break-throughs in
the domestic and international market in the coming year.
In terms of Section 212 of the Companies Act, 1956 read with the General Circular No.
2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs (MCA), the
Company is not required to attach the annual accounts of its subsidiary, GE Triveni
Limited (GETL), subject to fulfilment of the conditions stipulated in the said circular.
Accordingly, these accounts and the related detailed information will be made available to
any shareholder of the Company/ subsidiary company seeking such information. The annual
accounts of the subsidiary company will also be kept for inspection of shareholders at the
Companys Corporate Office and that of its subsidiary company. However, as per the
said circular issued by MCA, financial data of the subsidiary has been furnished in the
consolidated financial statements forming part of the Annual Report.
Information relating to the subsidiary Company, as required under Section 212 of the
Companies Act 1956, is provided in Annexure C of this Report.
We are maintaining a well motivated team. All critical positions are suitably manned
and the attrition rate is comfortable in single digit at about 8%. The talent pool scheme
continues and extra thrust has been put on skill building. Average training during the
year was 10 man days per employee. With the Companys added thrust on research and
development and innovation, the technology team has been further strengthened. The
Management signed a new wage settlement with the unionised staff valid till December 31,
2015 and industrial relations have remained cordial.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard 21 on Consolidated Financial Statements,
your Directors have pleasure in attaching the consolidated financial statements of the
Company which form a part of the Annual Report and Accounts.
EMPLOYEE STOCK OPTIONS
In accordance with the provisions of the Scheme of Arrangement between Triveni
Engineering and Industries Ltd (TEIL ) and the Company, duly approved by Honble
Allahabad High Court vide its Order dated April 19, 2011 and pursuant to SEBI (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the Company has
formulated an Employee Stock Option Scheme viz. "Triveni Turbine Ltd New Stock Option
Scheme" (NSOS), for making corporate adjustment in respect of 40,000 outstanding
vested options under "Triveni Employees Stock Option Scheme 2009 held by
an employee of TEIL whose services were transferred to the Company pursuant to the Scheme
of Arrangement .
Accordingly on April 10, 2013 the Remuneration Committee of the Board of Directors /
Directors of the Company have approved the corporate adjustment to the 40,000 options
under NSOS entitling the holder 1,84,000 equity shares of Rs. 1/- each of the Company
against such options at an exercise price of Rs. 52/- per share or Rs. 239.20 per option.
The Company has applied to the Stock Exchanges (NSE and BSE) for listing of the equity
shares to be issued upon exercising the options by the concerned employee of the Company
in terms of NSOS. The relevant disclosure under SEBI (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines 1999 is provided in Annexure D.
REDEMPTION OF PREFERENCE SHARES
In accordance with the Scheme of Arrangement duly approved by the Allahabad High Court
vide its Order dated April 19, 2011 and as per the terms and conditions of issue, the
Board of Directors of the Company have approved the redemption of 2,800,000 8%
Cumulative Redeemable Preference Shares of Rs.10/- each aggregating to Rs. 28 million on
May 31, 2013 out of the profits of the Company with pro-rata dividend for the period April
01, 2013 till date of redemption.
A separate report on Corporate Governance is given in Annexure E along with
the Auditors statement on its compliance in Annexure F.
M/s J.C. Bhalla & Co., Chartered Accountants, Auditors of the Company shall retire
at the conclusion of the forthcoming Annual General Meeting (AGM) and they have consented
to continue in Office, if appointed. They have confirmed their eligibility under the
provisions of the Companies Act, 1956 for their reappointment.
The Cost Audit is applicable to the Company with effect from FY13. Accordingly,
pursuant to Section 233 B of the Companies Act, 1956 read with the directions issued by
the MCA, M/s J.H. Associates, Cost Accountants, Bangalore were appointed as Cost Auditors
for the FY13 ended March 31, 2013 to conduct the audit of its engineering operations
(comprising of steam turbines manufacturing).
As required under "The Companies (Cost Accounting Records) Rules, 2011", the
Cost Compliance report for the FY12 ended March 31, 2012, duly certified by the Cost
Accountant, has been 3led by the Company with MCA on December 26, 2012, which is well
within the due date.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:
i. In the preparation of the Annual Accounts, applicable accounting standards have been
ii. Appropriate accounting policies have been selected and applied consistently, and
judgments and estimates that are reasonable and prudent have been made so as to give a
true and fair view of the statement of affairs of the Company as on March 31, 2013 and of
the profit of the Company for the year ended March 31, 2013;
iii. Proper and sufficient care has been taken for the maintenance of adequate
accounting records, in accordance with the provisions of the Companies Act, 1956, for
safeguarding the assets of the Company and detecting fraud and other irregularities;
iv. The Annual Accounts have been prepared on a going concern basis.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars required under Section 217 (1)(e) of the Companies Act, 1956, read with
Companies (Disclosure of Particulars in the Report of the Board of Directors), Rules, 1988
are provided in Annexure A to this Report.
PARTICULARS OF EMPLOYEES
As required under the provisions of sub section (2A) of Section 217 of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the
particulars of employees are set out in the Annexure B to the Directors
Report. However as per the provisions of Section 219(1)(b)(iv) of Act, the report and the
accounts are being sent to the shareholders excluding the aforesaid information. Any
shareholder desirous of obtaining copy of the same may write to the Company Secretary at
the registered/corporate Office of the Company whereupon the relevant detail would be
In accordance with the relevant provisions of Companies Act, 1956 read with the
Articles of Association of the Company- Mr Tarun Sawhney and Lt. Gen. K.K. Hazari (Retd)
retire from the Board by rotation at the ensuing AGM of the Company, and being eligible,
offer themselves for reappointment.
Mr Shekhar Datta, Mr Arun Prabhakar Mote and Mr. Meleveetil Damodaran were appointed as
Additional Directors by the Board with effect from October 29, 2012, November 1, 2012 and
April 10, 2013 respectively and they shall hold Office up to the date of the ensuing AGM
of your Company. All of them being eligible, offer themselves for appointment. Notices
have been received from the members pursuant to Section 257 of the Companies Act, 1956
proposing the appointment of Mr. Shekhar Datta, Mr. Arun Prabhakar Mote and Mr. Meleveetil
Damodaran as Directors on the Board of the Company.
The Board has recommended the appointment/re-appointment of all the aforesaid
Directors. The Board has also, subject to approval of the shareholders by a special
resolution at the ensuing AGM, appointed Mr Arun Prabhakar Mote as Wholetime Director
(designated as Executive Director) of the Company for a period of two (2) years effective
November 1, 2012 and fixed his remuneration.
The Company has not accepted any public deposits under Section 58A of the Companies
Act, 1956 during the year.
Your Directors wish to take the opportunity to express their sincere appreciation to
our customers, suppliers, shareholders, employees, the Central and Karnataka Government,
financial institutions, banks, and all other stakeholders for their wholehearted support
and co-operation. Your Directors also wish to record their appreciation for the continued
cooperations and support received from the Joint Venture partners.
Your Directors gratefully acknowledge the support given by them and we look forward to
their continued support and encouragement.
||For and on behalf of the Board of Directors,
|Place : Bengaluru
||Dhruv M. Sawhney
|Date : May 23, 2013
||Chairman and Managing Director
(A) CONSERVATION OF ENERGY
(a) Energy Conservation Measures
Installed UPS for air compressor of 5 axis vertical machining centre to avoid
machining cycle restart after power failure. This has resulted in energy saving of about
Provision of standby UPS for emergency oil pump has resulted in avoiding running
DG set while testing of turbines. This has resulted in saving of 360 liters of diesel per
Achieved energy savings of about 7000 KWH/year by replacing mercury lamps with
CFL lamps, installing AC drive for CNC machines, providing variable frequency drive
connections for refurbishing rotor testing and reducing pump operation time by installing
fluid level controllers.
Reduction of cycle time in high end CNC machines has resulted in savings of
Utilisation of condenser to recover water of about 6 lac litres of water / per
annum from exhaust steam.
(b) Additional Investment and proposals for Reducing Energy Consumption
Substitute existing lighting with energy efficient LED lighting system for
office area and inside shop floor.
(c) Impact of Above Measures
The above measures have helped to conserve power, fuel and water in our plant, which
otherwise would have not been saved.
Disclosure of particulars with respect to conservation of Energy (to the extent
Power and Fuel Consumption
|Units (000s KWH)
|Total Amount (Rs. in million)
|b) Own Generation
|Through Diesel Generators
|Units (000s KWH)
|Units Per Litre of Diesel Oil
|Cost / Unit (Rs.)
|2. Furnace Oil
|Quantity in (Kilo Ltrs.)
|Total Amount (Rs. in million)
|Rate (Rs. / Ltr.)
Disclosure of particulars with respect to technology absorption
(A) Research & Development (R & D)
1 Specific Areas in which R&D was carried out by the Company
a) 3 year run of higher steam parameter of extraction steam turbine for sugar
application is completed and feedbacks implemented.
b) Efficient HP reaction stages are incorporated in higher range turbines and first
c) Blade vibration measurement testing was conducted successfully in advanced design
third generation LP blade family and put in bigger models.
d) New design of cost competitive series of models is completed and orders are being
e) Advanced aero IP stages are tested and built into bigger condensing and back
f) Development of large flow, low pressure turbine is completed, tested and dispatched.
g) High back pressure turbine developed and commissioned.
h) High pressure, large size bleed condensing turbine developed & tested.
2 Benefits as a result of the above R&D
a) Filling the gap in the Companys product range with improved performance and
reliability and reduced carbon footprint.
b) Field stabilisation of models in higher steam parameter segment which is a growth
c) Agile engineering system developed to better handle customised turbine requirements.
3 Future plan of action
a) Introduction of further reaction stages for efficiency improvement.
b) Cost reduction for key model segments.
c) Further development of higher MW series of steam turbines for straight &
extraction condensing application.
d) Further development of small single stage turbines for distributed power generation.
e) Further development of axial exhaust turbine.
f) Further development of high loading reaction stages for compacting turbines.
Expenditure on R&D
||(Rs. in Million)
|d) Total R&D expenditure as percentage of turnover
(B) Technology absorption, adaptation and innovation
The details of R&D efforts, benefit derived and technology developed is provided in
(A) above. The Company has been commercially exploiting the technology in the past. The
Company has not imported any technology in the last five years.
(C) Foreign exchange earnings and outgo
(Rs. in Million)
|1) Earnings in Foreign Exchange
|Value of exports on F.O.B. basis
|2) Foreign Exchange Outgo
|(Includes raw materials, components, spare parts, and other expenditure in foreign
Statement pursuant to section 212 of Companies Act, 1956
||GE Triveni Limited
|1 Financial Year ended
||March 31, 2013
|2 Extent of holding Companys interest at the end of financial year of the
||50% + 1 share
|3 The net aggregate amount of the subsidiarys profit/(loss), so far as it
concern the members of the holding Company and is not dealt with in the Companys
|a) For the financial year ended March 31, 2013 of the subsidiary company (Rs. million)
|b) For the previous financial years of the subsidiary since it became the holding
Companys subsidiary (Rs. million)
|4 a) The net aggregate amount of the subsidiarys profit/(loss), for the
financial year of the subsidiary so far as those profit/(loss) are dealt with in the
holding Companys accounts
|b) The net aggregate amount of the subsidiarys profit/(loss), for the previous
financial years of the subsidiary since it became the holding Companys subsidiary so
far as those profit/(loss) are dealt with in the holding Companys accounts
|5 Changes in the holding Companys interest in the subsidiary between the end of
financial year of the subsidiary and holding Company
|6 Material changes which have occurred between the end of the subsidiary
Companys financial year and at the end of the holding Companys financial year
in respect of:
|i) The subsidiarys fixed assets
|ii) Its investments
|iii) The money lent by it
|iv) The funds borrowed by the subsidiary
Details of the Triveni Turbine Limited New Stock Option Scheme
|Nature of Disclosure
|a) Option granted ( Number )
||40,000 options under NSOS representing the right to apply for a maximum of 1,84,000
|b) The Pricing Formula
||In accordance with the relevant provisions of the Scheme of Arrangement and SEBI
||Guidelines, the adjustment to the outstanding vested stock options has been made,
considering the global best practices and ensuring that the fair value of options before
and after the corporate action remains unchanged. The fair value has been arrived using
Black Scholes Option Pricing formula.
||Accordingly, a fair and reasonable adjustment has been made in the entitlement to
shares under the options, the exercise price having been determined based upon the market
|c) Options vested
|d) Options exercised
|e) The Total number of equity shares arising as a result of exercise of options
|f) Options lapsed
||Nil (without considering 20,000 options which have lapsed subsequent to the close of
the financial year)
|g) Variation of terms of options
||Nil (other than the corporate adjustment necessitated on account of demerger)
|h) Money realised by exercise of options
|i) Total number of options in Force
||40,000 (without considering 20,000 options which have lapsed subsequent to the close
of the financial year)
|j) Employee wise detail of options granted
|(i) Senior managerial personnel
||Name of employee Number of options granted (post corporate adjustment) Mr. Arun Mote
|(ii) Any other employee who receives a grant in any one year of options amounting to
5% or more of options granted during the year.
|(iii) Identical employees who were granted option, during one year equal to or
exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the
Company at the time of grant.
|k) Diluted earnings per share (EPS) pursuant to issue of shares on exercise of options
calculated in Accordance with Accounting Standard ( AS) 20 Earnings per share.
||Rs. 3.23 per share
|l) Method of calculation of employee Compensation Cost.
||The employee compensation cost is calculated using the intrinsic value method to
account for the stock options. The stock-based compensation cost as per the intrinsic
value method for the financial year 2012-13 is Nil, since the exercise price was
determined based upon the market value of the shares, on the date of original grant.
|Difference between the employee compensation cost computed using the intrinsic value
of the stock options and the employee compensation cost that shall been recognised if the
fair value of the options granted had been used and its impacts on profits and EPS of the
||Had fair value method been adopted instead of the intrinsic value method, the impact
||a) The ESOP compensation charge debited to the statement of Profit & Loss of the
current year would have been higher by Rs.0.12 lacs and consequently, the profit of the
Company for the year would have been lower by Rs. 0.12 lacs.
||b) Basic as well as diluted EPS would have remain unchanged at Rs. 3.23 per share
(ignoring nominal fractional paise reduction)
|m) (i) Weighted average exercise prices and weighted average fair value of options
whose exercise price equals the market price of the stock.
||Weighted average exercise price per option as granted on corporate adjustment :
Rs.239.20 per option (or Rs.52.00 per share entitled under the option) Weighted average
fair value per option : Rs. 29.30
|(ii) Weighted average exercise prices and weighted average fair value of options whose
exercise price exceeds the market price of the stock.
||No such grants
|(iii) Weighted average exercise prices and weighted average fair value of options
whose exercise price is less than the market price of the stock.
||No such grants
|n) A description of the method and significant assumptions used during the year to
estimate the fair value of the options, including the following weighted average
||The fair value of the options granted on corporate adjustment, have been determined
using the Black-Scholes Option Pricing formula and the significant assumptions made in
this regard are as follows:
|(i) Risk Free Interest rate
|(ii) Expected life
|(iii) Expected Volatility
|(iv) Expected Dividend
|v) The price of the underlying share in market at the time of options granted
||Rs. 52 per share