Your Directors have pleasure in presenting the 79th Annual Report andaudited accounts for the Financial Year (FY) ended March 31 2015.
|FINANCIAL RESULTS || || |
| || ||(Rs. in lacs) |
| ||2014-15 ||2012-14 |
| || ||(18M)* |
|Sales (Net) ||206101.56 ||315357.65 |
|Operating Profit (EBITDA) ||(16.18) ||9282.21 |
|Finance Cost ||12207.62 ||18522.93 |
|Depreciation & amortisation ||5922.17 ||11878.33 |
|Profit before tax (before exceptional items) ||(18145.97) ||(21119.05) |
|Exceptional items ||-- ||(4381.63) |
|Profit before Tax (PBT) ||(18145.97) ||(16737.42) |
|Tax expenses ||(1736.88) ||(1459.60) |
|Profit after Tax (PAT) ||(16409.09) ||(15277.82) |
|Earning per equity share of Rs. 1 each (in Rs.) ||(6.36) ||(5.92) |
|Surplus brought forward ||(15228.54) ||-- |
|Surplus available for ||(31637.63) ||(15277.82) |
|Appropriation || || |
|Appropriation: || || |
|Equity dividend (including dividend distribution tax) ||-- ||-- |
|Dividend adjustment of previous year (incl. tax) ||-- ||0.03 |
|CSR Expenditure/ commitments ||NA ||NA |
|Transfer to/withdrawn from molasses storage fund reserve (net) ||9.78 ||(49.31) |
|Surplus carried forward ||(31647.41) ||(15228.54) |
* The FY 13 with the permission of the Registrar of Companies was extended by sixmonths to end on March 2014.
With the loss of Rs. 164.09 crore during the year the total deficit in the Profit& Loss Account is at Rs. 316.47 crore and the total net worth of the Company is at Rs.615.44 crore.
No material changes and commitments affecting the financial position of the Companyhave occurred between end of the financial year of the Company to which these financialstatements relate and the date of this report.
REVIEW OF BUSINESSO PERATIONSA ND FUTURE PROSPEC TS
The Company has reported a loss (after tax) of Rs. 164.09 crore predominantly due tocontinuing losses in the sugar operations.
Sugar business continues to be of concern as despite a better operating performancethe year under review has resulted in sizeable losses. During the Season 2014-15 asurplus of about 4 million tonnes of sugar is expected in the country buoyed by higherproduction in all the leading States Maharashtra Uttar Pradesh and Karnataka. Globallyalso 2014-15 will be a surplus year. These factors have led to an unprecedented declinein sugar prices across globe. The Central Governments intervention with limitedpolicy initiatives has not been adequate to offset the effect of decline in domestic sugarprices. This has resulted in substantial losses in the Sugar business and the industry islooking towards the Government to increase the quantum of subsidies / support to bail outthe ailing sugar industry across the country and especially in U.P. and usher in reformsto lay down a clear road map for a long term sustainable solution to restore the viabilityof the sector.
As a long term measure it is not practical to be at the mercy of the Government everyyear and thus it is imperative that the cane pricing policies should be based on sometransparent and rational parameters and only then will the sugar industry have thewherewithal to manage free market forces.
The Co-generation and Distillery businesses performed well during the year but theirprofitability was not adequate to mitigate the losses of sugar operations. Recentinitiatives by the Central Government indicate that we can expect more focus on thissector in the near future.
The performance of the Water business was also not satisfactory due to the slowdown inthe economy and the consequent financial crunch with some of its customers. This has ledto increased project completion time which in turn has led to losses and higherprovisioning. While the Water business has participated in tenders of substantial valuethe order finalisation has been slow. However the management expects fruition ofsubstantial orders in FY 16 which will help it to achieve its revenue and profit targets.
Notwithstanding the short term challenges the business has enormous potential and withthe Governments much publicised Clean Ganga programme and its focus on environmentprotection and preservation there will be ample opportunities which will arise for thisbusiness.
The performance of Gears business is satisfactory considering the status of the capitalgoods industry state of economy in the country and customers reluctance toundertake new capital expenditure. Inspite of not very business conducive environment thebusiness has been able to achieve a modest growth in revenues and profitability.
During September 2014 the Company signed a Strategic Supply Agreement with GE Oil& Gas for the manufacture of high speed and low speed gears and gearboxes with norestrictions on the geographies. Pursuant to such agreement the orders have startedflowing in and it is expected that a sizeable quantum of orders will be available to Gearsbusiness in FY 16 onwards. The business is incurring capital expenditure in order to be ina position to service the new order inflows from new and existing customers.
Owing to losses in the year under review the directors are constrained not to declareany dividend on equity shares.
SUBSIDIARY AND ASSOCIATE COMPANIESP ERFORMANCE
Triveni Turbine Ltd. (TTL)
The Company holds 21.82% stake in equity shareholding of TTL. The performance of TTLduring FY 15 has been commendable especially in the backdrop of economic slowdown in thedomestic capital goods industry - there is a growth in Turnover by 23 % and an increase inProfit after tax by 33%. The growth in exports and aftermarket services has been a majorcontributing factor. TTL has been receiving enquiries from over 90 countries. Orderbooking during FY 15 has shown a healthy improvement especially from exports andaftermarket services and has achieved an overall growth of 9% year on year. The orders onhand at the year end have increased by 5% over the previous year.
Aqwise-Wise Water Technologies Ltd.
The Company holds 25.04% stake in the equity shareholding of Aqwise. The performance ofthe Company for calendar year 2014 had been significantly better than in calendar 2013with an increase in revenue by 40%. While the Company has earned a net profit on astandalone basis the losses on consolidated basis have substantially reduced by 90%. TheCompany achieved a growth of 55% in order booking which was at USD 16 million spreadacross all major geographies. The Companys strong carry forward order book and ahealthy pipeline of enquires should enable the Company to further improve its performancegoing forward.
The Company has five wholly owned subsidiaries namely: Triveni Engineering Ltd.Triveni Entertainment Ltd. Triveni Energy Systems Ltd. Svastida Projects Ltd. andBhudeva Projects Ltd. These companies are relatively much smaller and there has not beenany material business activities in these companies.
As required under the provisions of Section 129 of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 a statement containing salient features of the financialstatement of subsidiaries and associates is provided in Annexure A in the prescribedformat.
In accordance with Clause 49 (V)(D) of the Listing Agreement none of the subsidiariesof this Company is a material non listed subsidiary. The Company has formulated a policyfor determining material subsidiaries. The policy has been uploaded on the website of theCompany at http://www.trivenigroup.com/ investor/corporate-governance/policies.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard 21 and the provisions of the Companies Act2013 on Consolidated Financial Statements your Directors have pleasure in attaching theconsolidated financial statements of the Company which form a part of the Annual Report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 your directors confirm that:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;
b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the directors have prepared the annual accounts on a going concern basis;
e) the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
A separate report on Corporate Governance is given in Annexure-B along with theAuditors statement on its compliance in Annexure-C.
RELATED PARTY CONTRACTS / TRANSACTIONS
The Company has formulated a Related Party Transactions Policy which has been uploadedon its website at http://www. trivenigroup.com/investor/corporate-governance/policies. Itis the 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.
During the year the Company had not entered into any contract/ arrangement/transactionwith related parties which could be considered material in accordance with the policy ofthe Company on the materiality of related party transactions. Hence the Form AOC-2 is notattached with this Report as there was no such related party transaction for whichdisclosure in terms of Section 134((3)(h) of the Companies Act 2013 read with Rule 8(2)of the Companies (Accounts) Rules 2014 is required.
RISK MANAGEMENT POLICY AND INTERNAL FINANCIAL CONTROL SYSTEM
The Company has a Risk Management Policy to manage the risks associated with thebusinesses of the Company. The policy aims at establishing structured and robust systemsto identify potential threats to the organisations evaluating likelihood of theiroccurrences and prescribing effective mitigation measures with clear accountability todeal with and address the most likely threats. The Policy recognises that all the risks inthe business cannot be eliminated but these could be minimised by having good internalcontrols or by defining the limits beyond which risks would not be assumed for anybusiness activity. Pursuant to the Risk Management Policy the Company has instituted acomprehensive risk management framework. A detailed identification of risks has beencarried out for all the businesses along with their categorisation based on their impacton the organisation its directors and the reputation of the Company. Such categorisationgives the highest weightage to the risks which have the potential to threaten theexistence of the Company.
As a part of internal financial controls of the Company the Company has elaborate andadequate financial controls with respect to timely preparation of reliable financialstatements. The ERP system assists in minimising the manual errors and omissions. Besidessubjecting all the major items to a detailed scrutiny the financial statements are alsosubject to quality overview and are extensively analysed with a view to have supportingexplanations for all variances.
DIRECTORSAND KEY MANAGERIAL PERSONNEL (KMP)
As per the provisions of the Companies Act 2013 (Act) Mr. Tarun Sawhney will retireby rotation at the ensuing Annual General Meeting (AGM) of the Company and being eligibleseek re-appointment. The Board has recommended his re-appointment.
With the approval of the shareholders Mr Dhruv M. Sawhney has been re-appointed asManaging Director (designated as Chairman and Managing Director (CMD) of the Company for afurther period of five years effective March 31 2015 without any remuneration exceptcertain benefits for effectively discharging and attending to his official duties andfunctioning as CMD of the Company.
The Company has received declarations of Independence in terms of Section 149 of theCompanies Act 2013 read with Clause 49 of the Listing Agreement from all the IndependentDirectors.
The appointment of Key Managerial Personnel (KMP) namely Chairman and ManagingDirector Vice Chairman and Managing Director Chief Financial Officer and CompanySecretary was formalised by the Board on May 28 2014. All of them continue to hold thatOffice except Mr. Dhruv M Sawhney CMD who has relinquished his Office as KMP with effectfrom September 30 2014. However he will continue to be the CMD of the Company.
EMPLOYEES STOCK OPTION
During the year under report no stock options were issued under the Triveni EmployeesStock Option Scheme 2009 (ESOP 2009) and TEIL ESOP 2013. The required disclosure inrespect of certain outstanding vested options exercised by the employees under ESOP 2009is provided in Annexure-D.
At the 78th Annual General Meeting (AGM) held on August 6 2014 in terms ofSections 139 and 143 of the Companies Act 2013 M/s J.C. Bhalla & Co. CharteredAccountants (JCB) were appointed as the Statutory Auditors and M/s Virmani &Associates Chartered Accountants (VA) as the Branch Auditors of the Companys Gearsbusiness and Water business Groups for a period of three consecutive years until theconclusion of 81st AGM of the Company subject to ratification by the membersat every AGM. The Company has received letters from JCB and VA that they are eligible forcontinuation as Statutory Auditors and Branch Auditors respectively of the Company andconsented to continue in Office on ratification by the shareholders.
The Board recommends the ratification of the appointment of JCB and VA as the StatutoryAuditors and Branch Auditors respectively to hold Office till the next AGM.
COMMENTS / QUALIFICATIONSIF A NY IN THE AUDIT REPORT ON FINANCIAL STATEMENTS
There were no qualifications or adverse comments or reservations or disclaimers in theaudit report on the Financial Statements of the Company for the financial year 2014-15.
In terms of the provisions of Section 148 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 and the notifications issued by Ministry ofCorporate Affairs M/s R.M. Bansal & Co. and Mr T.L. Sangameswaran Cost Accountantshave been appointed as Cost Auditors to conduct the cost audit of the sugar businesses(including co-generation and distillery) and Gears business respectively of the Companyfor the financial year 2015-16 subject to ratification of their remuneration by theshareholders at the ensuing Annual General Meeting. The Board recommends the ratificationof the remuneration to the Cost Auditors for the financial year 2015-16.
SECRETARIAL AUDIT REPORT
In terms of Section 204 of the Act read with the Companies (Appointment andremuneration of Managerial Personnel) Rules 2014 the Board appointed M/s Suresh Gupta& Associates firm of Company Secretaries in practice to undertake the SecretarialAudit of the Company. The report on secretarial audit is enclosed in Annexure-E.The report does not contain any qualification.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
A CSR Policy was formulated by the CSR Committee which on its recommendation wasapproved by the Board. The CSR Policy is available on the Companys website athttp://www.trivenigroup. com/investor/corporate-governance/policies. The composition ofthe CSR Committee is provided in the Corporate Governance Report that forms part of thisAnnual Report. In view of losses no CSR activity has been initiated during the periodunder review and therefore no annual report on CSR activity is provided with thisreport.
The composition of Audit Committee is provided in the Corporate Governance Report thatforms part of this Annual Report.
The Company has established a vigil mechanism through the Whistle Blower Policy andoversees through the Audit Committee the genuine concerns expressed by the employees andother Directors. The vigil mechanism also provides for adequate safeguards againstvictimisation of employees and Directors who may express their concerns. It has alsoprovided direct access to the Chairperson of the Audit Committee in appropriate orexceptional cases. The policy is uploaded on the website of the Company athttp://www.trivenigroup.com/ investor/corporate-governance/policies.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. The Internal Complaint Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. During the period under review no compliant wasreceived by the ICC.
During the year six board meetings were held the details of which are provided in theCorporate Governance Report that forms part of this Annual Report.
PARTICULARS OF LOANS GUARANTEES ORI NVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
The particulars of loans guarantees or investments made under the provisions ofSection 186 of the Companies Act 2013 are given in the notes forming part of the financialstatements provided in the Annual Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGSA ND OUTGO
The particulars required under Section 134(3)(m) of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 are provided in Annexure F of this report.
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 set out in Annexure G.
The particulars of employees drawing remuneration in excess of limits set out in theRule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is set out in Annexure H. However as per the provisions of Section 136 of theCompanies Act 2013 the annual report is being sent to all the members of the Companyexcluding the aforesaid information. The said information is available for inspection bythe members at the registered Office of the Company up to the date of the ensuing AnnualGeneral Meeting. Any member interested in obtaining such particulars may write to theCompany Secretary at the registered Office of the Company.
The Company has not accepted any public deposits under Section 73 of the Companies Act2013.
During the period under review the privately placed 1000 12.45% Secured RedeemableNon-Convertible Debentures of the face value of Rs. 10 lac each aggregating to Rs. 100crore were fully redeemed and extinguished.
EXTRACTS OF ANNUAL RETURN
Pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of the Companies(Management and Administration) Rules 2014 extracts of the annual return in theprescribed formis annexed as Annexure I.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators or courts ortribunal impacting the going concern status and Companys operations in future.
Your Company believes and considers its human resources as the most valuable asset. Themanagement is committed to provide an empowered performance oriented and stimulating workenvironment to its employees to enable them realise their full potential. Industrialrelations remained cordial and harmonious during the year.
POLIC Y ON DIRECTORS APPOINTMENT AND REMUNERATION
The policy of the Company on directors appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters provided under sub-section (3) of Section 178 of the Companies Act2013 adopted by the Board is annexed as Annexure J to this report.
BOARD EVALUATION MECHANISM
Pursuant to the provisions of Companies Act 2013 and Clause 49 of the ListingAgreement the Board has carried out the annual performance evaluation of its ownperformance that of individual Directors 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 on parameters such as number ofmeetings attended contribution made in the discussions contribution towards formulationof the growth strategy of the Company independence of judgement safeguarding theinterest of the Company and minority shareholders time devoted apart from attending themeetings of the Company etc. The Directors have expressed their satisfaction with theevaluation process.
Your Directors wish to take the opportunity to express their sincere appreciation toour customers suppliers shareholders employees the Central and Uttar PradeshKarnataka Government financial institutions banks and all other stakeholders for theirwhole-hearted support and co-operation. We look forward to their continued support andencouragement.
| ||For and on behalf of the Board of Directors || |
|Place : Noida (U.P.) ||Tarun Sawhney ||Lt. Gen. K.K . Hazari (Retd.) |
|Date : May 27 2015 ||Vice Chairman and ||Director |
| ||Managing Director || |
STATEMENT CONTAINING SALIENT FEATURES OF THE FINANCIAL STATEMENT OF SUBSIDIARIES /ASSOCIATE COMPANIES / JOINT VENTURES
PART A : SUBSIDIARIES
| || || || || ||(Rs. in lacs) |
|Name of the subsidiary ||Triveni Energy Systems Ltd. ||Triveni Engineering Ltd. ||Triveni Entertainment Ltd. ||Bhudeva Projects Ltd. ||Savistda Projects Ltd. |
| ||(TESL) ||(TEL) ||(TENL) ||(BPL) ||(SPL) |
|1. Reporting period for the subsidiary concerned if different from the holding Companys reporting period ||NA ||NA ||NA ||NA ||NA |
|2. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries ||NA ||NA ||NA ||NA ||NA |
|3. Share capital ||205.00 ||205.00 ||287.00 ||5.00 ||205.00 |
|4. Reserves & surplus ||-5.82 ||-19.38 ||-24.38 ||-1.08 ||-5.30 |
|5. Total assets ||201.08 ||201.28 ||262.85 ||4.70 ||200.48 |
|6. Total Liabilities ||1.90 ||15.66 ||0.23 ||0.78 ||0.78 |
|7. Investments ||- ||- ||- ||- ||- |
|8. Turnover ||- ||- ||- ||- ||- |
|9. Profit before taxation ||-1.14 ||-1.13 ||0.93 ||-0.80 ||-5.01 |
|10. Provision for taxation ||- ||- ||0.98 ||- ||- |
|11. Profit after taxation ||-1.14 ||-1.13 ||-0.05 ||-0.80 ||-5.01 |
|12. Proposed Dividend ||- ||- ||- ||- ||- |
|13. % of shareholding ||100.00% ||100.00% ||100.00% ||100.00% ||100.00% |
Note: All the above subsidiaries are relatively much smaller and there has not beenany material business activities in these companies.
PART "B": ASSOCIATESA ND JOINT VENTURES
| || ||(Rs. in lacs) |
|Name of Associates / Joint Ventures ||Triveni Turbine Ltd. ||Aqwise-WiseWater Technologies Ltd. |
|1. Latest audited Balance Sheet Date ||31-Mar-15 ||31-Dec-14 |
|2. Shares of Associate / Joint Ventures held by the Company on the year end || || |
|- No of shares ||72000000 ||13008 |
|- Amount of Investment in Associates / Joint Venture (Rs. Lacs) ||720.07 ||3006.19 |
|- Extent of Holding % ||21.82 ||25.04 |
|3. Description of how there is significant influence ||Due to holding of stake of more than 20% ||Due to holding of stake of more than 20% |
|4. Reason why the associate / joint venture is not consolidated ||Being consolidated ||Being consolidated |
|6. Networth attributable to Shareholding as per latest audited Balance Sheet (Rs. lacs) ||4988.65 ||494.06 |
|7. Profit / Loss for the year (after tax) (Rs. lacs) as per consolidated financial statements ||9321.89 ||-6.26* |
|i. Considered in Consolidation (Rs. lacs) ||1788.61 ||-1.57* |
|ii. Not Considered in Consolidation ||-- ||-- |
* Based on unaudited consolidated results for the period 1.4.2014 to 31.3.2015
| || ||For and on behalf of the Board of Directors |
| ||Lt. Gen. K.K . Hazari (Retd.) ||Tarun Sawhney |
| ||Director ||Vice Chairman and Managing Director |
| ||Suresh Taneja ||Geeta Bhalla |
| ||Group CFO ||GGM & Company Secretary |
|Place: Noida (U.P.) || || |
|Date : May 27 2015 || || |