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Directors Report of Triveni Turbine Ltd.

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the 19th Annual Report and audited accounts for the Financial Year (FY) ended March 31, 2014

Financial Results

(Rs. in Million) 2013-14 2012-13

Revenue from operations (net) 5056.88 6568.47

Operating Profit (EBITDA ) 1148.20 1716.30

Finance cost 5.99 27.25

Depreciation & amortisation 128.60 122.62

Profit before tax (PBT) 1013.61 1566.43

Tax expense 329.09 500.18

Profit after tax (PAT) 684.52 1066.25

Earning per equity share of Rs. 1 each (in Rs.) 2.07 3.22

Surplus available for Appropriation 1168.49 1244.71

Appropriation:

Equity dividend (including dividend 289.51 308.12 distribution tax)

Preference dividend (including dividend 0.43 2.62 distribution tax)

Transfer to General Reserve 100.00 450.00

Transfer to Capital redemption reserve 28.00 -

Surplus carried forward 750.55 483.97

Review of Operations

Revenue from operations decreased by 23% owing to reduced order booking in the second half of FY 13 and Q1 FY 14. This was due to subdued demand arising from the economic slow- down and low business sentiments. Even in the international market, there were undue delays in the fnalisations of orders owing to multiple reasons - currency depreciation in the ASEAN, and SAARC countries, political unrest in some European and Asian countries and the general economic slowdown. Our PBT margins were reduced due to the reduced turnover, but in spite of this decline, we have been able to achieve margins above 20%. Our focus continues to be on expansion of our footprints in the global market and to exploit the after-market business potential especially in the international market. Normalcy was restored in the second half of the year under review when almost 70% of the orders booked during the year were received. At the end of FY 14, our outstanding order book is comfortable at Rs. 5.8 billion, an increase of 23% versus end FY 13 on a

standalone basis, and Rs. 7.1 billion on a consolidated basis, which is a growth of 45%. The fow of orders from the export market is continuing and it gives us confdence that our performance in the financial year 2014-15 will greatly improve, and be close to the level achieved in FY 13.

We have received increased enquiries from Europe, Turkey, SAARC region and Africa which augurs well for future orders from these countries. We have identified key countries and sectors for a focused marketing thrust. We are also increasing our efforts on creating brand awareness and positioning Triveni Turbines as a strong global brand which offers the best product efficiencies and customer Specific value propositions. During the year, our R&D department, which is approved by the Department of Scientifc Industrial Research, Government of India, designed and developed eleven advanced models and variants. These new models address the requirements for both ends of the product range and proven hybrid technologies have been employed to enhance the value of the product to the customer. The company is meticulously safeguarding its intellectual property and during the year achieved 42 IP flings in India and overseas.

During the year, GE Triveni Limited (GETL) a subsidiary of the Company and a joint venture with General Electric Inc., achieved increased order bookings of Rs. 1.82 billion which included international orders of Rs. 1.46 billion. Having achieved a breakthrough in the international market, the outlook for GETL in the coming years appears very promising.

Dividend

The Board of Directors of your Company are pleased to recommend a fnal dividend of Rs. 0.55 per equity share of face value of Rs. 1/- each (55%). The total equity dividend for FY 2014 including the interim dividend of Rs. 0.20 per equity share (20%) paid in November 2013, amounts to Rs. 0.75 per equity share (75%) and the total outgo on account of equity dividend would be Rs. 289.51 million (including dividend distribution tax).

Subsidiary Company

During the year under report, the Board of Directors reviewed the affairs of the subsidiary company. As per section 212 of the Companies Act, 1956, the Company is required to attach the balance sheet, statement of profit and loss and other documents of its subsidiary. However, the Ministry of Corporate Affairs (MCA), General Circular No. 2/2011 dated February 8, 2011, has granted general exemption to companies from annexing the individual financial statements of the subsidiary along with the audited financial statements of the Company, subject to fulflment of conditions stipulated in the said circular. Your Company meets these conditions and, therefore, the financial statements of the subsidiary company, GE Triveni Ltd. are not annexed.

The related information on the Annual Report will be made available to the shareholders of the Company, who may seek such information at any point of time. The annual report of the subsidiary company will also be kept for inspection by investors at the Company''s corporate office as well as the registered office of the subsidiary company. However, as per the said circular issued by MCA, financial data of the subsidiary has been furnished in the consolidated financial statement 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.

Human Resources

Your Company focuses on engineered-to-order Turbo Generator island. To continuously deliver an engineered product to the customers as desired, we foster a robust team of skilled manpower, and this has been one of our critical success factor. This manpower is well motivated and all the critical positions are manned suitably, trained to deliver. Attrition rate in TTL last year was at 7%, which is well below the average market rate. The company has a robust Performance Measurement System (PMS) and has introduced various initiatives for performance enhancement and employee engagement. The learning centre conducts a number of programmes on skill building, motivation, team building and leadership. A special effort is being made for our export service engineers and design staff. The Company delivered training of an average 4.3 man days to each employee.

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

During the year under report, pursuant to the approval of the shareholders, the Company has instituted TTL ESOP 2013 providing for issuance of options resulting into not exceeding 3 million equity shares of Rs. 1/- each. No stock options were issued under TTL ESOP 2013.

Subsequent to the year, with the exercise of outstanding vested stock options by an eligible employee, TTL NSOS stands terminated. The required disclosures of the TTL NSOS are provided in Annexure ''D''.

Change in Capital Structure

During the year under report, the Company had made allotment of 64,400 equity shares of Rs. 1/- each to an eligible employee under TTL NSOS. Subsequently on May 07, 2014 the Company had made an allotment of 27,600 equity shares of Rs. 1/- each under TTL NSOS. These equity shares have been listed and admitted to dealings/ in the process of listing on the BSE Ltd. and National Stock Exchange of India Ltd.

As on the date of this report, the issued subscribed and paid-up equity share capital of the Company is Rs. 32,99,72,150/- divided into 32,99,72,150 equity shares of Rs. 1/- each.

Corporate Governance

A separate report on Corporate Governance is given in Annexure ''E'' along with the Auditors'' statement on its compliance in Annexure ''F''.

Auditors

M/s J.C. Bhalla & Co., Chartered Accountants (JCB), Statutory Auditors of the Company and M/s Virmani & Associates, Chartered Accountants (VA) Branch Auditors of the Company''s Works at Bengaluru, hold office till the conclusions of the ensuing Annual General Meeting of the Company and are eligible for re-appointment.

The Company has received letters from both of them to the effect that their re-appointment, as Statutory Auditors and Branch Auditors if made, would be within the prescribed limits under Section 141 of the Companies Act, 2013 and that they are not disqualifed for reappointment. They have consented to continue in office, if re-appointed.

Cost Auditor

In pursuance of 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 Auditor to conduct the cost audit of the engineering operations (comprising of steam turbines manufacturing) for the financial year ended on March 31, 2014.

The Cost Audit Report and the Compliance Report for the financial year 2012-13 ended on March 31, 2013 was fled by the Cost Auditor with MCA within the prescribed time.

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 followed;

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, 2014 and of the profit of the Company for the year ended March 31, 2014;

iii. Proper and suffcient 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.

Corporate Social Responsibility

Over the years, the Company has been taking various initiatives towards community development in key areas – Education, healthcare, environment, community enhancement and sports and recreation.

As per the Companies Act 2013, all companies having net worth of Rs. 500 crore or more, or turnover of Rs. 1000 crore or more or a net profit of Rs. 5 crore or more during any financial year will be required to constitute a corporate social responsibility (CSR) committee of the Board of Directors comprising of three or more directors, at least one of whom will be an independent director.

Aligning with the guidelines, we have constituted a committee comprising of Dr. (Mrs.) Vasantha S Bharucha - Independent Director, Mr. Nikhil Sawhney - Vice Chairman and Managing Director, Mr. Tarun Sawhney and Mr. Arun Prabhakar Mote - Directors of the Company. The committee is responsible for formulating and monitoring the CSR Policy of the Company.

Particulars of employees

As required under the provisions of sub section (2A) of Section 217 of the Companies Act, 1956 (Act) 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, having regard to the provision of section 219(1) (b) (iv) of the Companies Act, 1956, the Annual Report is being sent to all the shareholders excluding the aforesaid information. Any shareholder desirous of obtaining the same may write to the Company Secretary at the registered/ corporate office of the Company.

Directors

As per the provisions of the Companies Act, 2013 (Act), Mr. Tarun Sawhney will retire by rotation at the ensuing Annual General Meeting (AGM) of the Company and being eligible, seeks re-appointment. The Board has recommended his re-appointment.

By virtue of provisions of Section 161(1) of the Act, Dr. (Mrs) Vasantha S Bharucha was appointed as Additional Director by the Board with effect from March 19, 2014 and she shall hold office upto the date of the ensuing AGM. The Company has received notice, pursuant to Section 160 of the Act from a member signifying his intention to propose the appointment of Dr. Bharucha as Independent Director of the Company. Being eligible, Dr. Bharucha offers herself for appointment. The Board has recommended her appointment as an Independent Director for a term of upto five consecutive years.

To comply with the provisions of Section 149 and other applicable provisions of the Act, the Board has recommended the appointment of all the existing non-executive Independent Directors as Independent Directors, with Lt. Gen. K.K. Hazari (Retd.), Mr. Amal Ganguli and Mr. Shekhar Datta to hold office as per there tenure of appointment mentioned in the notice of the forthcoming Annual General Meeting. All of them being eligible, offer themselves for appointment.

During the year, Mr. Nikhil Sawhney was elevated as Vice Chairman and Managing Director with effect from November 6, 2013. The other terms and conditions of his appointment remain the same as approved by the Shareholders.

The term of Mr. Arun Prabhakar Mote, as Whole-time Director (designated as ''Executive Director'') is due to expire on October 31, 2014. The Board is seeking re-appointment of Mr. Mote as Whole-time Director, liable to retire by rotation, for a further period of 2 years with effect from November 1, 2014.

Mr. Meleveetil Damodaran and Mr. K.N. Shenoy ceased to be Directors of the Company due to their resignation with effect from September 9, 2013 and May 8, 2014 respectively. Your Directors place on record their gratitude and appreciation for the guidance provided by the outgoing Directors.

Public Deposits

The Company has not accepted any public deposits under Section 58A of the Companies Act, 1956 during the year.

Green Initiatives

As a part of green initiatives of the Company and minimizing the impact on the environment, like the earlier years, this year too, electronic copies of the Annual Report 2014 and the Notice of the 19th AGM are being sent to all the members whose email addresses are registered with the Company/Depository Participants(s). For members who have not registered their email addresses, physical copies of the Annual Report 2014 and the Notice of the 19th AGM are being sent in the permitted mode. Members requiring physical copies can send a request to the Company Secretary.

Appreciation

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 whole- hearted support and co-operation. Your Directors also wish to record their appreciation for the continued co–operations and support received from the Joint Venture partner.

We look forward to their continued support and encouragement.

For and on behalf of the Board of Directors,

Place : Noida ( U.P) Dhruv M. Sawhney

Date : May 27, 2014 Chairman and Managing Director


Mar 31, 2013

The Directors have pleasure in presenting the 18th Annual Report and audited accounts for the Financial Year (FY) ended March 31, 2013

FINANCIAL RESULTS

(Rs. in Million)

2012-13 2011-12

Revenue from operations (net) 6,568.47 6,318.82

Operating Profit (EBITDA) 1,716.29 1,561.24

Finance cost 27.25 95.93

Depreciation & amortisation 122.62 115.93

Profit before tax (PBT) 1,566.42 1,349.38

Tax expense 500.17 438.57

Profit after tax (PAT) 1,066.25 910.81

Earning per equity share of Rs. 1 each 3.22 2.75 (in Rs.)

Surplus available 1,244.71 580.28

Appropriation:

Equity dividend (including dividend 308.12 249.22 distribution tax)

Preference dividend (including dividend 2.62 2.60 distribution tax)

Transfer to General Reserve 450.00 150.00

Surplus carried forward 483.97 178.46

DIVIDEND

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 under:

(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 distribution tax).

OUTLOOK

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 year''s 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 Company''s intellectual property and filing 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.

SUBSIDIARY COMPANY

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 Company''s 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.

HUMAN RESOURCES

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 Company''s 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 Hon''ble 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.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is given in Annexure ''E'' along with the Auditors'' statement on its compliance in Annexure ''F''.

AUDITORS

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.

COST AUDITOR

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 filed 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 followed;

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 sent.

DIRECTORS

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.

PUBLIC DEPOSITS

The Company has not accepted any public deposits under Section 58A of the Companies Act, 1956 during the year.

APPRECIATION

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 whole- hearted support and co-operation. Your Directors also wish to record their appreciation for the continued co-operations 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


Mar 31, 2012

The Directors have pleasure in presenting the 17th Annual Report and audited accounts for the Financial Year ended March 31, 2012

LISTING OF EQUITY SHARES As informed in our previous year's report, the Scheme of arrangement (Scheme) between Triveni Engineering and Industries Ltd. (TEIL), Triveni Turbine Ltd. (the Company) and their respective shareholders and creditors, providing for the transfer and vesting of the Steam Turbine Business of TEIL in the Company from October1, 2010, was sanctioned by the Hon'ble Allahabad High Court vide its order dated April 19, 2011, and became effective upon its filing with the Registrar of Companies. In accordance with the Scheme 329,880,150 equity shares of Rs1/- each fully paid up, of your Company were listed and admitted for dealing on Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd. from October 28, 2011.

FINANCIAL RESULTS

(Rs in Million) 2011-12 2010-11

Sales (net) 6,318.82 3,050.46

Operating Profit/ (Loss) (EBITDA ) 1,561.24 717.06

Finance cost 95.93 47.13

Depreciation & amortisation 115.93 58.77

Profit/ (Loss) before tax (before 1,349.38 611.16 extraordinary/ exceptional items )

Extraordinary/ Exceptional charges - 559.82

Profit/ (Loss) before tax (PBT ) 1,349.38 51.34

Tax expense 438.57 124.02

Profit/ (Loss) after tax (PAT ) 910.81 (72.68)

Earning per equity share of Rs1 each (in Rs)

- Before Extraordinary charge 2.75 2.27

- After Extraordinary charge 2.75 (0.34)

Surplus/ (Loss) available 580.27 (330.53) Appropriation:

Equity dividend (including dividend 249.22 - distribution tax)

Preference dividend (including divi- 2.60 - dend distribution tax)

Transfer to General Reserve 150.00 -

Surplus / (Loss ) carried forward 178.45 (330.53)

During the year under review, the Company was able to wipe off all the accumulated losses and build up reserves of Rs 328.45 million after payment of dividends. It achieved one of the highest net margins in the industry at 14.4 % of profit after tax on sales.

DIVIDEND

The Board of Directors have recommended a dividend of Rs 0.80 per preference share of Rs 10/- each on 2,800,000 - 8% Cumulative Redeemable Preference Shares for the year 2011-12. The total dividend payout would be Rs 2.60 million (including dividend distribution tax).

The Board of Directors have also recommended a final dividend of Rs 0.20 per equity share of face value of Rs 1/- each (20%) for the year 2011-12 in addition to two interim dividends aggregating to Rs 0.45 per equity share (45%) paid in November 2011 and February 2012. The total equity dividend payout would be Rs 249.22 million (including dividend distribution tax).

OUTLOOK

Product orders in hand of Rs 4.95 billion as on April 1, 2012, have been enhanced with further orders of Rs 0.68 billion in April, 2012, all of which will be executed in financial year 2012-13 without dilution in the margins. The domestic market is a matter of concern but we expect position to improve in the second half of financial year 2012-13. The growth in exports and services is expected to continue, and we expect to build up a sizeable pipeline for execution in financial year 2013-14. Our efforts in Research and Development in the last two years have shown commendable results through the introduction of new world class models in terms of efficiency, robustness, and value to the customer. We intend to intensify these efforts in the coming years which will enhance the Company's competitiveness on a global scale. The Company is conscious of safeguarding its inventions through our R&D initiatives and during the year it has registered a substantial number of patents and copyrights in India and abroad.

SUBSIDIARY COMPANY

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 fulfillment 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 Company's 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.

HUMAN RESOURCES

Critical resources for Research and Development, Design and Project Management were filled during the year. Implementation of the talent pool scheme, skill building programme, and training at 12 man days per employee, coupled with strong communication initiatives, have increased motivation and engagement levels within the organisation. Our new Innovation and Appreciation Policy is now in full force.

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.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is given in Annexure 'D' along with the Auditors' statement on its compliance in Annexure 'E'

AUDITORS

M/s J.C. Bhalla & Co., Chartered Accountants, Auditors of the Company shall retire at the conclusion of the forthcoming Annual General Meeting 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.

According to the Order dated January 24, 2012 of Cost Audit Branch of Ministry of Corporate Affairs (MCA), read with Section 233 B of the Companies Act, 1956, the audit of cost accounting records are required for the Company in respect of its engineering operations (comprising of steam turbine manufacturing). The Board of Directors of your Company, subject to the approval of the Central Government, has appointed M/s J.H. & Associates, Cost Accountants, Bengaluru to undertake such audit for the financial year 2012-13.

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 followed;

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, 2012 and of the profit of the Company for the year ended March 31, 2012;

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 provision 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 provision of section 219(1)

(b) (iv) of the Companies Act, 1956, the report and the accounts are being sent to all the shareholders excluding the aforesaid information. Any shareholder desirous of obtaining the same may write to the Company Secretary at the registered/ corporate office of the Company whereupon the relevant details would be sent.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr K.N. Shenoy and Mr. Amal Ganguli retire by rotation at the ensuing Annual General Meeting (AGM) of the Company, and being eligible, offer themselves for reappointment. The Board has recommended their re-appointment.

PUBLIC DEPOSITS

The Company has not accepted any public deposits under Section 58A of the Companies Act, 1956 during the year.

APPRECIATION

Your Directors gratefully acknowledge the support given by our customers, suppliers, shareholders, employees, the Central and Karnataka Government, financial institutions, banks, and all other stakeholders, and we look forward to their continued support and encouragement.

For and on behalf of the Board of Directors,

Place : Noida (U.P.) Dhruv M. Sawhney

Date: May 07,2012 Chairman and Managing Director

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