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Notes to Accounts of TD Power Systems Ltd.
Mar 31, 2025
The Company reviews pending cases, claims by
third party and other contingencies, if any on
an on-going basis. For contingent losses that are
considered probable, estimated loss is recorded
as an accrual in financial statements. A disclosure
for contingent liabilities is made where there is
a possible obligation or present obligation that
may probably not require an outflow of resources.
When there is a possible obligation or present
obligation where the likelihood of outflow of
resources is remote, no provision or disclosure
is made in the standalone financial statements.
Gain contingencies are not recognised until the
contingencies are resolved and the amounts are
received or recoverable.
Provision for warranty related cost are recognised
when the product is sold. Initial recognition is
based on historical experience and future estimates
of claims by the management. The estimate of such
warranty related cost is revised annually.
Provision for Credit Loss:
The Company reviews the position of trade
receivable and ascertains a provision for life time
credit loss after considering the industry and
economic conditions in which customer operate,
the profile of the customer and the past experience.
1.23 Segment Reporting
Operating segments are reported in a manner
consistent with the internal reporting provided to
the chief operating decision maker.
1.24 Earnings per share:
Basic earnings/ (loss) per share are computed
by dividing profit or loss attributable to equity
shareholders of the Company by the weighted
average number of equity shares after adjustments
for treasury shares, outstanding during the year.
Diluted earnings per share is computed by dividing
the profit after tax as adjusted for dividend, interest
and other changes or income relating to the dilutive
potential equity shares, by the weighted average
number of equity shares considered for deriving
basic earnings per share and weighted average
number of shares which could have been issued
on the conversion of all dilutive potential equity
shares.
The number of equity shares is adjusted
retrospectively for all periods presented for any
share splits and bonus shares issued.
1.25 Dividend Distribution:
Dividend paid (including income tax thereon) is
recognised in the period in which the interim
dividend is approved by the Board of Directors, or
in the respect of the final dividend when approved
by shareholders.
1.26 Onerous contracts
Present obligations arising under onerous contracts
are recognised and measured as a provision. An
onerous contract is considered to exist where
the Company has a contract under which the
unavoidable costs of meeting the obligations under
the contract exceed the economic benefits expected
to be received under it.
Other Information:
I The Company has only one class of equity shares having par value of '' 10/- each (sub-divided into '' 2/- each). Each
holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees.
The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual
General Meeting.
II In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets
of the Company, after distribution of all liabilities. The distribution will be in proportion to the number of equity
shares held by the shareholders.
III For the period of five years immediately preceding the date as at which the Balance Sheet is prepared:
a. No shares allotted pursuant to a contract without consideration being received in cash.
b. No shares allotted as fully paid up by way of bonus shares
c. No shares were bought back
IV The particulars of employee stock option is given in note no.51. There were no other shares reserved for issue under
options and contracts/commitments for the sale of shares/disinvestment.
V There were no calls unpaid or forfeited shares.
* During May 2021, the company has received demand from Income tax department of '' 1,942.67 lakhs for AY 2017-18
with respect to Transfer Pricing and other disallowance u/s 143(3) r.w.s 144C (3) read with section 144B of the Income-
tax Act. The Transfer Pricing Officer (TPO) has passed an order with demand considering transfer pricing adjustment
on the overall turnover of the Company instead of restricting to transactions with Associate Enterprises. The Sales to
Associate Enterprises for the said year is '' 1,964.90 lakhs as compared to the Sales of the entire Company of '' 36,944.03
lakhs. Disputing the said order, the Company filed an objection before the Dispute Resolution panel of the Income Tax
Department at Bengaluru on May 26 2021. Further, consequent to a writ petition filed by the Company, the operation
of the assessment order & recovery proceedings has been stayed by the Hon''ble High Court of Karnataka vide it''s order
dated June 30 2021.
The Company has received assessment order u/s 143(3) r.w.s 260 read with section 144B of the Income Tax Act based on
directions of Dispute Resolution panel. Further, consequent to a writ petition filed by the Company, the operation of the
assessment order & recovery proceedings has been stayed by the Hon''ble High Court of Karnataka vide it''s order dated
March 21, 2022.
41 | FINANCIAL INSTRUMENTS - ACCOUNTING CLASSIFICATIONS AND FAIR VALUE MEASUREMENTS
A. The Fair value of cash and cash equivalents, bank balances, loans, trade receivables, trade payables and others
approximates their carrying amount. Trade receivables are evaluated after taking into consideration for Expected
Credit Losses. Company uses the following hierarchy for determining and disclosing the fair value of financial
instruments by valuation technique.
Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable
Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable
C. Financial Risk Management
Objectives and Policies
The company''s Financial Risk Management is an integral part of business strategies. The Company''s focus is to
foresee the unpredictability of financial markets and seek to minimise potential adverse effects on its financial
performance. The primary market risk to the Company is foreign exchange risk. In addition, Company is exposed
to the following risks from its use of financial instruments:
⢠Credit risk
⢠Liquidity risk
⢠Market risk
This note presents information about the Company''s exposure to each of the above risks, the Company''s objectives,
policies and processes for measuring and managing risk, and the Company''s management of capital. Further
quantitative disclosures are included throughout these financial statements.
The Company''s principal financial liabilities comprise short term borrowings, trade and other payables. The main
purpose of these financial liabilities is to support entity''s operations. The entity''s principal financial assets include
cash and cash equivalents, investment in Non-convertible Debentures and trade and other receivables that derive
directly from its operations.
All activities for risk management purposes are carried out by experienced teams that have the appropriate skills,
experience and supervision. It is the entity''s policy that no activities in derivatives will be undertaken except
foreign exchange forward contract. The Board of Directors review and agree policies for managing each of these
risks, which are summarised below.
Credit Risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The
maximum exposure to the credit risk at the reporting date is primarily from trade receivables. The customer
credit risk is managed as per Company''s established policy, procedure and controls relating to customer credit
risk management. It requires different processes and policies to be followed based on the business risks, industry
practice and customer profiles.
In order to contain the business risk, the creditworthiness of the customer is through scrutiny of its financials,
status of financial closure of the project, to the extent available in public domain and if required, market reports and
reference checks. The Company remains vigilant and regularly assesses the financial position of customers during
execution of contracts with a view to restrict risks of delays and default. In view of nature of business profile and
considering the size of the Company, credit risks from receivables are well contained on an overall basis.
The Company''s maximum exposure to credit risk at the reporting date is the carrying amount of trade receivables.
Provision for expected credit losses
The life time expected credit loss (âECLâ) is estimated on trade receivables, other amounts due from entities where
there is no track record of short receipts. Delays in receiving payments from the customers pursuant to sale of
goods or under contracts are not considered if such delays are commonly prevalent in the industry. Other short
receipts other than arising from claims are duly considered in determining ECL.
The Company follows âsimplified approach'' for recognition of impairment loss allowance on trade receivables. The
Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based
on a provision matrix. The provision matrix takes into account historical credit loss experience based on past trend.
Considering the above as well as business model of the Company, engineered-to-order products and the profile of
trade receivables, the determination of a provision based only on age analysis may not be a realistic considering
the economic and industry circumstances. Hence, the provision for expected credit loss is determined by the
management for the specific trade receivables after considering the above facts and circumstances, particularly in
view of the fact that there has no significant bad debts in the recent past.
Provision matrix (%, amount in lakhs) of ECL for trade receivables and the reconciliation of the movement in the
provision is given below.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its
financial liabilities that are settled by delivering cash. The Company''s approach in managing the same is to ensure,
as far as possible, sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions.
The company''s principal sources of liquidity are cash and cash equivalents, balances with banks and the cash flow
that is generated from operations. The cash and cash equivalent and other bank balances (including bank deposits
with more than 12 months maturity) aggregates to '' 14,760.24 lakhs at the end of the year (PY - '' 20,049.90 lakhs).
In addition the net trade receivables '' 48,659.96 lakhs (PY '' 31,034.56 lakhs) at the end of the year. The Company
believes that the working capital is sufficient to meet its current requirements after considering the position of
trade receivables along with Cash & Bank balances. Accordingly, no liquidity risk is perceived.
The following are the contractual maturities of non-derivative financial liabilities due within one year based on
contractual cash flows:
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates that will affect
the Company''s income or the value of its holdings of financial instruments. The objective of market risk management
is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
The Company also operates internationally and a major portion of the business is transacted in several currencies
and consequently the Company is exposed to foreign exchange risk through its sales and services and purchases
from overseas suppliers in various foreign currencies.
i) Foreign currency risk exposure The company''s exposure to foreign currency risk at the end of reporting
year, are as follows:
a) The foreign exchange forward contracts outstanding as on March 31, 2025 in respect of Euro is 3,33,00,000
is (PY: Euro 60,00,000)
b) The total foreign currency exposures as at the end of the year is as under:
c) Sensitivity analysis:
A strengthening or weakening of the Indian Rupee, as indicated below, against the USD, Euro, JPY and
others as at March 31, 2025 would have increased (decreased) profit or loss by the amounts shown below.
This analysis is based on foreign currency exchange rate variances that the Company considered to be
reasonably possible at the end of the reporting period. The analysis is performed on the same basis for
previous year, even though the actual foreign exchange rate variances were different.
ii) Interest Rate Risk:
The Company''s investments are primarily in Fixed rate interest bearing deposits and non-convertible
debentures. Also the borrowings bear fixed rate of interest which are reviewed periodically by the banks.
Hence, the Company is not significantly exposed to interest rate risks.
iii) Commodity price risk exposure:
The Company is not exposed to significant volume of commodity price risk as the Company hedges major raw
materials based on dips.
D Capital Management:
While managing capital, the Company''s objective is to safeguard its ability to continue as a going
concern, so that it can continue to provide returns for shareholders and benefit for other stakeholders.
The Board of Directors monitor the earnings before interest, depreciation and tax (EBITDA), which the Company
defines as result from operating activities before considering finance cost, depreciation & amortisation, exceptional
items and tax expenses. The Board of Directors also monitors the level of dividends to equity shareholders.
The Company''s EBITDA is 16.66% for the year ended March 31, 2025 in comparison to 16.63% for the year ended
March 31, 2024.
The Company monitors capital, taking a medium and long term view, on the basis of a number of financial ratios
generally used by industry and by the rating agencies.
42 | a. The company does not have any pending litigations which would impact its financial position as on the
reporting date except to the extent disclosed in Note 37.
b. The company does not have any long term contracts including derivative contrats for which there were any
material foreseeable losses.
c. There are no amounts required to be transferred to the Investor Education and Protection Fund by the
Company as on the reporting date.
d. To the best of the knowledge and belief of the management, no funds have been advanced or loaned or invested
(either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or
in any other person or entity, including foreign entity (âIntermediariesâ), with the understanding, whether
recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest
in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate
Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
e. To the best of our knowledge and belief of the management, no funds have been received by the Company
from any person or entity, including foreign entity (âFunding Partiesâ), with the understanding, whether
recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate
Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
43 | SEGMENT REPORTING
The company''s operation comprises of Manufacturing business including spares & after market business (erstwhile
project business). Primary segment reporting comprises of manufacturing business. Secondary segment reporting is
based on geographical location of activities. Under primary segment revenue and direct expenses, which relate to a
particular segment and which are identifiable, are reported under that segment.
Certain expenses, which are not allocable to any specific segment, are separately disclosed at the enterprise level.
Cash and bank balances in India are reported at the enterprise level as the company operates common bank accounts.
Property, plant and equipments, liabilities, current assets and current liabilities relating to specific business segments
are identified and reported. Those that are not identifiable are reported as common items.
Secondary segment is reported based on the geographical location of the company, viz., India and Japan. Revenues in
the secondary segment are based on the sales made by the Branch Office. Sales to and purchases from Japan branch are
separately identified and reported. Property, plant and equipments, current assets including cash and bank accounts,
and current Liabilities are identified based on the Branch office to which they relate and are reported accordingly.
51 | EMPLOYEE STOCK BENEFIT PLANS
During August 2019, the Company had instituted an Employee Stock Option Plan I (GIL ESOP I) as approved by the
Board of Directors and the Shareholders, for the allotment of 10,00,000 shares in aggregate, out of which not more than
5,65,000 shares to be acquired by the Trust through Secondary Acquisition and not more than 4,35,000 shares shall be
issued by way of Primary / Fresh shares The maximum number of options that may be granted to any employee in any
year and in aggregate shall not exceed 2,00,000 options under the plan.
In accordance with the shareholders'' approval in Annual General Meeting held on August 12, 2019, the Board, based on
the recommendations of the Nomination and Remuneration Committee, has approved grant of 5,63,884 employee stock
options (âESOPs) and 3,99,216 employee stock appreciation rights (âESARsâ) to the eligible employees of the Company
and/or its Subsidiary Company(ies) under its TDPSL Equity Based Compensation Plan 2019 ("Planâ).
Out of which 97,962 ESOPs and 56,160 ESOPs have been granted to former Company Secretary and Chief Financial
Officer of the company respectively.
The fair value of each equity settled award is estimated on the date of grant using the Black-Scholes-Merton model with
the following assumptions:
During the year ended March 31, 2025 (PY: March 31, 2024), 13,511 (PY: 1,27,466) Equity Shares of face value of '' 2 each
(previously '' 10 each) were issued & allotted to the TDPSL Employee Welfare Trust (Trust) in respect of the exercise of
14,075 (PY: 1,37,518) ESARs by grantees. Consequently, the paid up capital of the Company as at March 31, 2025 stands
at '' 3,123.67 lakhs (PY: '' 3,123.40 lakhs) comprising 15,61,83,612 (PY: 15,61,70,101) Equity Shares of '' 2/-each. As per the
TDPSL Equity Based Compensation Plan 2019, the said shares were transferred by the Trust to the ESAR Grantees in
settlement of the ESAR''S Exercised.
During the year ended March 31, 2025 (PY: March 31, 2024), Nil (PY: Nil ) ESOPs of face value of '' 2 each (previously
'' 10 each) were vested and Nil (PY: 30,813) options were exercised at an exercise price of '' 67.25 against which Nil (PY:
30,813) Equity shares of the Company were transferred to the ESOP grantees by TDPSL Employee Welfare Trust. '' Nil
(PY: '' 20.72 lakhs) was received from the ESOP grantees upon the Exercise of ESOPs.
mi (a) The net worth of the indian subsidiary continues to be positive owing to substantial reduction of accumulated
losses. The Indian Subsidiary Company is awaiting improvement in market conditions which is gradually
recovering due to the receding pandemic to evaluate opportunities from time to time with required
support from the parent Company. Based on an assessment of risk of claims & counter claims which the
Indian Subsidiary Company will have against Creditors for supply of project related equipment, as well as
project cancellation, appropriate write backs have been accounted in respect of these creditors in earlier
year, resulting in the Indian Subsidiary Company''s Net worth turning positive. Accordingly, the financial
statements of the Indian Subsidiary Company continue to be prepared on a going concern basis which is
considered appropriate by the management of the Indian Subsidiary Company. However, on a conservative
basis, the Parent Company has provided '' 300 lakhs towards possible impairment of this investment and
reported under exceptional items in the statement of profit and loss for the year ended March 31, 2025.
(b) During the previous year, the required procedure for voluntary liquidation of TD Power System Japan Ltd
, wholly owned subsidiary, was complied in accordance with the applicable law/regulation in Japan and
ceased to be in existence with effect from June 26, 2023 in terms of the closed registration certificate from the
Tokyo Legal affairs Bureau. JPY 9.93 lakhs (equivalent to '' 5.67 lakhs) being the value residual assets has been
remitted to the Company towards repayment of Share Capital (held as Investment with Nil carrying value in
the Company). This repayment has been reported as âExceptional itemsâ in the statement of profit and loss for
the year ended March 31, 2024.
53 | ADDITIONAL DISCLOSURES:
a) The Company does not have transactions or balances with struck off companies.
b) The Company does not have any charges/satisfaction which is yet to be registered with ROC beyond the statutory
period.
c) The Company has not traded or invested in Crypto currency or Virtual Currency during the year.
d) The Company is not declared as a willful defaulter by any bank or financial institution or other lender or Government
or Government authorities. Accordingly, no disclosures are made in this regard.
e) The Company does not have any such transaction which is not recorded in the books of account that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as,
search or survey or any other relevant provisions of the Income Tax Act, 1961.
f) Based on the assessment of financial ratios, aging and expected dates of realisation of financial assets and payment
of financial liabilities, and other information accompanying the financial statements, the management is of the
opinion that no material uncertainty exists as on the date of the balance sheet that the Company is capable of
meeting its liabilities existing at the date of the balance sheet as and when they fall due within a period of one year
from the balance sheet date.
g) The Company is in compliance with the requirement of Section 2(87) of the Companies Act, 2013 read with the
Companies (Restriction on number of Layers) Rules, 2017
jD The Company has borrowings from banks on the basis of security of current assets. The quarterly statement of
current assets filed by the Company with banks during the year are in agreement with the books of accounts
excluding conversion & carrying cost of inventory and Japan branch related assets. Below is the details of the
same.
56 The Company has implemented voluntary retirement scheme (VRS) namely TD Power Systems Ltd Employees
Voluntary Retirement Scheme 2023-24 for providing financial support and was open for permanent workmen
with minimum 10 years of service & 40 years of age. 8 permanent workmen opted for this scheme and the financial
implication of '' 321.82 lakhs has been accounted in the financial year 2023-24.
57 | RECENT PRONOUNCEMENTS:
Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to time. On May 07, 2025, MCA amended the Companies (Indian
Accounting Standards) Amendment Rules, 2025, as below:
Ind AS 21 - The Effects of Changes in Foreign Exchange Rates:
This amendment has made it mandatory for the Companies to estimate the spot exchange rate when exchangeability
between two currencies is missing. Further, the Standard has provided criteria to determine when a currency is
exchangeable into another currency. The effective date for adoption of this amendment is annual periods beginning on
or after April 1, 2025. The amendments are not expected to have a material impact on the Company.
58 | PRIOR PERIOD COMPARATIVES
The previous year''s figures have been regrouped where necessary to confirm with current year''s classification. The
impact of such regrouping is not material to the standalone financial statements.
As per our report of even date attached
For and on behalf of Board of Directors of
TD Power Systems Limited For ARMA & VARMA
CIN No. L31103KA1999PLC025071 Chartered Accountants
Firm Registration No. 004532S
MOHIB N KHERICHA NIKHIL KUMAR ABRAHAM BABY CHERIAN
Chairman Managing Director Partner
DIN: 00010365 DIN:00062243 Membership No.218851
Place: Ahmedabad Place: Frankfurt Place: Bangalore
Date : May 12, 2025
M N VARALAKSHMI BHARAT RAJWANI
Chief Financial Officer Company Secretary
Place: Bangalore Membership No. A50096
Date : May 12, 2025 Place: Bangalore
Mar 31, 2024
A. The borrowings and non fund based facilities from Bank of Baroda, Kotak Mahindra Bank & HDFC Bank are secured by way of:
1. 1st Pari passu charge with Kotak Mahindra Bank & HDFC Bank by way of equitable mortgage of unit-1 of factory comprising of factory land and buildings situated at plot nos.27,28,29 & 30A area, 25304 sq. mts Phase-I KIADB Dabaspet Industrial Area, Yedehalli Village, Bengaluru Rural District, Bengaluru.
2. 1st Pari passu charge with Kotak Mahindra Bank & HDFC Bank by way of equitable mortgage of unit-II of factory comprising of factory land and buildings situated at Sy.No.59/2, area 4 acres 33 gunta (19526 Sq. mts including 7 gunta kharaba land) yedahalli village Dabaspet, Bangalore.
3. 1st Pari passu charge with Kotak Mahindra Bank & HDFC Bank by way of equitable mortgage of unit-II of factory comprises of factory land and buildings situated Sy.No. 55 (Part1), 56/1, 56/2, 57 & 58 Yedehalli Village, Dabaspet Bangalore Rural District, Bangalore measuring 12.55 acres.
4. 1st Pari passu hypothecation charge with Kotak Mahindra Bank & HDFC Bank on entire plant and machinery of the company.
B. The Group does not hold any Benami Property which is either recorded or not recorded in the books of account and there are no proceedings initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act,1988 and rules made thereunder. Accordingly, no disclosure made in this regard.
The Karnataka Industrial Areas Development Board (KIADB) has on terms & conditions stated in its letter dated November 27, 2023 allotted 15.00 acres of land at Japanese Industrial Township, Vasanthanarasapura 3rd Phase Industrial Area, Tumkur, Karnataka to the Company for setting up a facility to manufacture âElectrical Generators, Motors, their subassemblies and Parts". The Company has received possession certificate for the said land on 30th January 2024 and entered into "Lease cum Sale Agreement" on 11th March 2024 for a period of 10 years. The lease cum sale agreement has been since registered on 17th May 2024.
(b) The above balances includes dues from related parties (Refer Note 45)
(c) No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person. Further, there are no trade or other receivables which are due from firms or private companies in which any director is a partner, a director or a member except as disclosed in note 45 to the financial statement.
(d) Trade receivable are non interest bearing and are generally on terms of 0 to 180 days. [Refer note 41C]
(e) There are no trade receivables under dispute or which have significant increase in credit risk or credit impaired as per the information available with the Company except as disclosed above.
I The Company has only one class of equity shares having par value of 10/- each (sub-divided into 2/- each). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting (Refer Note 53).
II In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders
III For the period of five years immediately preceding the date as at which the Balance Sheet is prepared:
a. No shares allotted pursuant to a contract without consideration being received in cash.
b. No shares allotted as fully paid up by way ofbonus shares
c. 23,04,174 equity shares were brought back by the Company during the financial year 2019-2020
IV The particulars of employee stock option is given in note no.51. There were no other shares reserved for issue under options and contracts/commitments for the sale of shares/disinvestment.
V There were no calls unpaid or forfeited shares.
a) Securities premium is used to record the premium on issue of shares. This is utilised in accordance with the provisions of the Companies Act, 2013.
b) General Reserve: General reserve is appropriation of the net profit in respect of reserves created pursuant to the provisions of the Companies Act, 1956 with respect to declaration of dividend. Such mandatory transfer to general reserve is not prescribed under the Companies Act, 2013.
c) Capital Redemption Reserve: The capital redemption reserve represents the face value (10) of the shares bought back. This is created by transfer from securities premium as per requirement of Sec.69 of the Companies Act, 2013.
d) Retained Earning: Retained earnings are the profits that the Company has earned till date, less transfer to general reserve, dividend or other distribution paid to shareholders.
e) Stock Option Outstanding Account: The balance in this account represents the Employee Share based remuneration debited to the Statement of Profit and Loss after adjustments for ESOPs/ESARs exercised.
f) Shares Purchased by ESOP Trust: The shares held by the ESOP Trust are treated as treasury shares and included under other equity.
Loans from Bank of Baroda is secured by first pari-passu charge along with Kotak Mahindra Bank & HDFC Bank on all the current assets of the Company (present and future) excluding the current assets relating to orders from a particular customer which are exclusive first charge in favour of Bank of Baroda.
The loans are further collaterally secured as under: -
1. 1st Pari passu charge with Kotak Mahindra Bank & HDFC Bank by way of equitable mortagage of unit-1 of factory comprising of factory land and buildings situated at plot nos.27,28,29 & 30A area,
25304 sq. mts Phase-I KIADB Dabaspet Industrial Area, Yedehalli Village, Bengaluru Rural District, Bengaluru.
2. 1st Pari passu charge with Kotak Mahindra Bank & HDFC Bank by way of equitable mortagage of unit-II of factory comprising of factory land and
buildings situated at Sy.No.59/2, area 4 acres 33 gunta (19526 Sq. mts including 7 gunta kharaba land) yedahalli village Dabaspet, Bangalore.
3. 1st Pari passu charge with Kotak Mahindra Bank & HDFC Bank by way of equitable mortagage of unit-II of factory comprises of factory land and buildings situated Sy.No. 55 (Part1), 56/1, 56/2, 57 & 58 Yedehalli Village, Dabaspet Bangalore Rural District, Bangalore measuring 12.55 acres.
4. 1st Pari passu hypothecation charge with Kotak Mahindra Bank & HDFC Bank on entire plant and machinery of the company.
All the above are common securities for all fund based and non-fund based facilities obtained by the Company.
Loan from Kotak Mahindra Bank is secured by first pari-passu charge with Bank of Baroda on all existing and future receivable/current assets of the Company excluding the current assets relating to orders from a particular customer.
Loan from HDFC Bank Limited is secured on all existing and future receivable/current assets of the Company excluding the current assets relating to orders from a particular customer.
Interest at 9.25% p.a.(PY: 8.65% p.a.) is applicable on Rupee loans from Bank of Baroda which will be reviewed annually
Interest at 10.15% p.a.(PY: 9.45% p.a.) is applicable on Rupee loans from Kotak Mahindra Bank Limited which will be reviewed annually
Interest at 9.19% p.a. (PY: 3M MCLR 0.05%) is applicable on Rupee loans from HDFC Bank Limited which will be reviewed annually
The management believes, based on internal assessment and / or legal advice, that the probability of an ultimate adverse decision and outflow of resources of the Company is not probable and accordingly, no provision for the above is considered necessary.
* During May 2021, the company has received demand from Income tax department of '' 1,942.67 lakhs for AY 2017-18 with respect to Transfer Pricing and other disallowance u/s 143(3) r.w.s 144C (3) read with section 144B of the Income-tax Act. The Transfer Pricing Officer (TPO) has passed an order with demand considering transfer pricing adjustment on the overall turnover of the Company instead of restricting to transactions with Associate Enterprises. The Sales to Associate Enterprises for the said year is '' 1,964.90 lakhs as compared to the Sales of the entire Company of '' 36,944.03 lakhs. Disputing the said order, the Company filed an objection before the Dispute Resolution panel of the Income Tax Department at Bengaluru on May 26 2021. Further, consequent to a writ petition filed by the Company, the operation of the assessment order & recovery proceedings has been stayed by the Hon''ble High Court of Karnataka vide it''s order dated June 30 2021.
The Company has received assessment order u/s 143(3) r.w.s 260 read with section 144B of the Income Tax Act based on directions of Dispute Resolution panel. Further, consequent to a writ petition filed by the Company, the operation of the assessment order & recovery proceedings has been stayed by the Hon''ble High Court of Karnataka vide it''s order dated March 21, 2022.
41 Financial Instruments - Accounting Classifications and Fair value measurements
A. The Fair value of cash and cash equivalents, bank balances, loans, trade receivables, trade payables and others approximates their carrying amount. Trade receivables are evaluated after taking into consideration for Expected Credit Losses. Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique.
Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
C. Financial Risk Management Objectives and Policies
The company''s Financial Risk Management is an integral part of business strategies. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk. In addition, Company is exposed to the following risks from its use of financial instruments:
⢠Credit risk
⢠Liquidity risk
⢠Market risk
This note presents information about the Company''s exposure to each of the above risks, the Company''s objectives, policies and processes for measuring and managing risk, and the Company''s management of capital. Further quantitative disclosures are included throughout these financial statements.
The Company''s principal financial liabilities comprise short term borrowings, trade and other payables. The main purpose of these financial liabilities is to support entity''s operations. The entity''s principal financial assets include cash and cash equivalents, investment in Non-convertible Debentures and trade and other receivables that derive directly from its operations.
All activities for risk management purposes are carried out by experienced teams that have the appropriate skills, experience and supervision. It is the entity''s policy that no activities in derivatives will be undertaken except foreign exchange forward contract. The Board of Directors review and agree policies for managing each of these risks, which are summarised below.
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables. The customer credit risk is managed as per Company''s established policy, procedure and controls relating to customer credit risk management. It requires different processes and policies to be followed based on the business risks, industry practice and customer profiles.
In order to contain the business risk, the creditworthiness of the customer is through scrutiny of its financials, status of financial closure of the project, to the extent available in public domain and if required, market reports and reference checks. The Company remains vigilant and regularly assesses the financial position of customers during execution of contracts with a view to restrict risks of delays and default. In view of nature of business profile and considering the size of the Company, credit risks from receivables are well contained on an overall basis.
Provision for expected credit losses
The life time expected credit loss (âECLâ) is estimated on trade receivables, other amounts due from entities where there is no track record of short receipts. Delays in receiving payments from the customers pursuant to sale of goods or under contracts are not considered if such delays are commonly prevalent in the industry. Other short receipts other than arising from claims are duly considered in determining ECL.
Considering the above as well as business model of the Company, engineered-to-order products and the profile of trade receivables, the determination of a provision based only on age analysis may not be a realistic considering the economic and industry circumstances. Hence, the provision for expected credit loss is determined by the management for the specific trade receivables after considering the above facts and circumstances, particularly in view of the fact that there has no significant bad debts in the recent past.
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash. The Company''s approach in managing the same is to ensure, as far as possible, sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions.
The company''s principal sources of liquidity are cash and cash equivalents, investment in non-convertible debentures, balances with banks and the cash flow that is generated from operations. The cash and cash equivalent, other bank balances and investment in non-convertible debentures aggregates to 20,049.90 lakhs at the end of the year (PY - 17,150.79 lakhs). In addition the net trade receivables 31,034.56 lakhs (PY 25,476.08 lakhs) at the end of the year. The Company believes that the working capital is sufficient to meet its current requirements after considering the position of trade receivables along with Cash & Bank balances. Accordingly, no liauidity risk is perceived.
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates that will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
The Company also operates internationally and a major portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services and purchases from overseas suppliers in various foreign currencies.
A strengthening or weakening of the Indian Rupee, as indicated below, against the USD, Euro, JPY and others as at 31st March 2024 would have increased (decreased) profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Company considered to be reasonably possible at the end of the reporting period. The analysis is performed on the same basis for previous year, even though the actual foreign exchange rate variances were different.
The Company''s investments are primarily in Fixed rate interest bearing deposits and non-convertible debentures. Also the borrowings bear fixed rate of interest which are reviewed periodically by the banks. Hence, the Company is not significantly exposed to interest rate risks.
While managing capital, the Company''s objective is to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefit for other stakeholders.
The Board of Directors monitor the earnings before interest, depreciation and tax (EBITDA), which the Company defines as result from operating activities before considering finance cost, depreciation & amortisation, exceptional items and tax expenses. The Board of Directors also monitors the level of dividends to equity shareholders.
The Company''s EBITDA is 16.63% for the year ended 31st March 2024 in comparison to 14.44% for the year ended 31st March 2023.
The Company monitors capital, taking a medium and long term view, on the basis of a number of financial ratios generally used by industry and by the rating agencies.
42 a. The company does not have any pending litigations which would impact its financial position as on the reporting date except to the extent disclosed in Note 37.
b. The company does not have any long term contracts including derivative contrats for which there were any material foreseeable losses.
c. There are no amounts required to be transferred to the Investor Education and Protection Fund by the Company as on the reporting date.
d. To the best of the knowledge and belief of the management, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the
Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
e. To the best of our knowledge and belief of the management, no funds have been received by the Company from any person or entity, including foreign entity (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
The company''s operation comprises of Manufacturing business including spares & after market business (erstwhile project business). Primary segment reporting comprises of manufacturing business. Secondary segment reporting is based on geographical location of activities. Under primary segment revenue and direct expenses, which relate to a particular segment and which are identifiable, are reported under that segment.
Certain expenses, which are not allocable to any specific segment, are separately disclosed at the enterprise level. Cash and bank balances in India are reported at the enterprise level as the company operates common bank accounts. Property, plant and equipments, liabilities, current assets and current liabilities relating to specific business segments are identified and reported. Those that are not identifiable are reported as common items.
Secondary segment is reported based on the geographical location of the company, viz., India and Japan. Revenues in the secondary segment are based on the sales made by the Branch Office. Sales to and purchases from Japan branch are separately identified and reported. Property, plant and equipments, current assets including cash and bank accounts, and current Liabilities are identified based on the Branch office to which they relate and are reported accordingly.
The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to gratuity at 15 days salary (15/26 X last drawn basic salary plus dearness allowance) for each completed year of service subject to a maximum of 20 Lakhs. The gratuity liability arises on account of future payments, which are required to be made in the event of retirement, death in service or withdrawal. The liability has been assessed using projected unit credit actuarial method. The company made annual contributions to the Employee''s Group Gratuity scheme of the Life Insurance Corporation of India.
The sensitivity analysis above has been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. This analysis may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such company is exposed to various risks such as increase in salary, investment risk, discount rate, mortality, disability and withdrawals.
B Long term Leave Liability - Non-funded
The company provides for earned leave benefit to the employees which accrue at 15 days (maximum) for the year. The earned leave is encashable while in service and upto a maximum of 105 days on retirement. The leave liability has been treated as other long term benefits and has been assessed using projected unit credit actuarial method.
The Company has taken office facilities, guesthouse and residential premises of employees under short term lease and are renewable on a periodic basis, and cancellable at its option. Rental expenses recorded for short term leases for the year is 33.73 lakhs (Previous year 33.91 lakhs).
47 Provision for warranties towards sale of goods are made on an estimated basis as actual claims cannot be determinable. During the year, the Company has made provisions towards Warranty claims, the details of the same are as under:
On 8th November 2023, (PY: 8th February 2023) the Board of Directors of the Company has considered and declared an interim dividend of 0.50 (PY: 0.50) per equity share ofthe Company.
(b) Final Dividend
On 23rd May 2024, (PY: 9th May 2023) the Board of Directors of the Company have proposed a dividend of 0.60 (PY: 0.50) (subdivided into 2/- each) per share in respect of the year ended 31st March 2024 subject to approval of shareholders at the Annual General Meeting.
51 Employee Stock Benefit Plans
During August 2019, the Company had instituted an Employee Stock Option Plan I (GIL ESOP I) as approved by the Board of Directors and the Shareholders, for the allotment of10,00,000 shares in aggregate, out of which not more than 5,65,000 shares to be acquired by the Trust through Secondary Acquisition and not more than 4,35,000 shares shall be issued by way of Primary / Fresh shares The maximum number of options that may be granted to any employee in any year and in aggregate shall not exceed 2,00,000 options under the plan.
In accordance with the shareholders'' approval in Annual General Meeting held on 12th August 2019, the Board, based on the recommendations of the Nomination and Remuneration Committee, has approved grant of 5,63,884 employee stock options (ââESOPs) and 3,99,216 employee stock appreciation rights (ââESARsâ) to the eligible employees of the Company and/or its Subsidiary Company(ies) under its TDPSL Equity Based Compensation Plan 2019 ("Planâ).
Out of which 97,962 ESOPs and 56,160 ESOPs have been granted to Company Secretary and Chief Financial Officer of the company respectively.
During the year ended 31st March 2024 (PY: 31st March 2023), 1,27,466 (PY: 1,05,029) Equity Shares of face value of '' 2 each (previously '' 10 each) were issued & allotted to the TDPSL Employee Welfare Trust (Trust) in respect of the exercise of 1,37,518 (PY: 93,403) ESARs by grantees. Consequently, the paid up capital of the Company as at March 31, 2024 stands at '' 3,123.40 Lakhs (PY: '' 3,120.85 Lakhs) comprising 15,61,70,101 (PY: 15,60,42,635) Equity Shares of '' 2/-each. As per the TDPSL Equity Based Compensation Plan 2019, the said shares were transferred by the Trust to the ESAR Grantees in settlement of the ESAR''S Exercised.
During the period ended 31st March 2024 (PY: 31st March 2023), NIL (PY: 1,87,961 ) ESOPs of face value of 2 each (previously '' 10 each) were vested and 30,813 (PY: 1,57,148) options were exercised at an exercise price of '' 67.25 against which 30,813 (PY: 1,57,148) Equity shares of the Company were transferred to the ESOP grantees by TDPSL Employee Welfare Trust. '' 20.72 lakhs (PY: 105.68 lakhs) was received from the ESOP grantees upon the Exercise of ESOPs.
52 (a) The net worth of the Indian Company continues to be positive owing to substantial reduction of accumulated losses. The improvement in market condition which was expected post pandemic has been sluggish without a clear picture about the direction in which market likely to head. However the Company continues to evaluate opportunities from time to time with required support from the parent Company. Based on an assessment of risk of claims & counter claims which the Company will have against Creditors for supply of project related equipment, as well as project cancellation, appropriate write backs have been accounted in respect of these creditors in financial year 2022-2023 amounting to '' 62.78 lakhs ((2021-2022: '' 757.72 lakhs) and earlier year, resulting in the Company''s Net worth turning positive. Accordingly, the financial statements of the Indian subsidiary continue to be prepared on a going concern basis which is considered appropriate by the management of that Company.
(b) The overseas subsidiary in USA has accumulated losses exceeding its share capital and has eroded its networth as at the end of the reporting period. The subsidiary has shown significant improvement in revenue and profits over the last 2 years. Though, the accumulated losses exceed its share capital as at the end of the reporting period, the improved operating performance is enabling the reduction of the accumulated losses and the subsidiary is heading towards a positive net worth . Though the subsidiary''s liabilities exceed its total assets by '' 401.62 lakhs (As at 31st March 2023: '' 537.36 lakhs), a substantial portion of the liabilities is loan from the Holding company against which repayments to the tune of '' 343.28 lakhs (PY: '' 237.79 lakhs) have been made which reflects improvement of its cash flows. Thus, the subsidiary is able to sustain its operating requirements as well as partially repay the holding company loans. The Holding company is however renewing the loans on timely basis reflecting its resolve to support the subsidiary and grow the market. Further, the holding company is authorised by its Board to infuse further funds as and when required. Considering the above factors, the management is of the opinion that the going concern assumption in preparation of the financial statements of subsidiary is appropriate. Hence, considering the future prospects of the said subsidiary no provision for impairment in the carrying value of the investment in this subsidiary is considered necessary by the management of the company in the standalone financial statements.
(c) The required procedure for voluntary liquidation having been complied with the applicable law/regulation in Japan, TD Power System Japan Ltd, a wholly owned subsidiary of the Company, has been voluntarily liquidated and ceased to be in existence with effect from June 26, 2023 in terms of the closed registration certificate from the Tokyo Legal Affairs Bureau. JPY 9.93 lakhs (equivalent to '' 5.67 lakhs) being the value residual assets has been remitted to the Company towards repayment of Share Capital (held as Investment in the Company). Since the Company had made provision for diminution in the value of investment during the financial year ended March 31, 2023, this repayment is reported under âExceptional Itemsâ in the financial statements and the remaining investment value of '' 116.77 lakhhas been written off during the year.
53 At the Annual general Meeting( AGM) of the members of the Company held on September 27, 2022, the shareholders of the Company approved sub-division of the existing Equity Shares of the Company having face value of '' 10 each into 5 Equity Shares of '' 2 each on the date to be determined by the Board of Directors. Consequent changes to the Capital Clause of the Memorandum and Articles Of Association of the Company were also approved at the said AGM. Based on a record date set as November 1 2022, the required corporate action giving effect to the aforesaid sub division of the shares has been completed as of date. Accordingly, the Authorised & Paid up capital of the Company stands at '' 3,500.00 lakhs comprising of17,50,00,000 Equity Shares of '' 2/- each & '' 3,120.85 lakhs comprising of 15,60,42,635 equity shares of '' 2/-each respectively. As per the requirements of IND AS 33, the Earnings per share presented for all the periods in these results is after considering the said sub-division of equity shares.
(a) The Company does not have transactions or balances with struck off companies.
b) The Company does not have any charges/satisfaction which is yet to be registered with ROC beyond the statutory period.
c) The Company has not traded or invested in Crypto currency or Virtual Currency during the year.
d) The Company is not declared as a willful defaulter by any bank or financial institution or other lender or Government or Government authorities. Accordingly, no disclosures are made in this regard.
e) The Company does not have any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
f) Based on the assessment of financial ratios, aging and expected dates of realisation of financial assets and payment of financial liabilities, and other information accompanying the financial statements, the management is of the opinion that no material uncertainty exists as on the date of the balance sheet that the Company is capable of meeting its liabilities existing at the date of the balance sheet as and when they fall due within a period of one year from the balance sheet date.
55 The Company has borrowings from banks on the basis of security of current assets. The quarterly statement of current assets filed by the Company with banks during the year are in agreement with the books of accounts excluding conversion & carrying cost of inventory and Japan branch related assets. Below is the details of the same.
During the previous year ended 31st March 2023, the Company sold unutilised land measuring 4 acre and 31 Guntas situated at Pemmanahalli village, Sompura Hobli, Nelamangala Taluk, Bangalore Rural District '' 429.75 lakhs . The net profit of '' 71.63 lakhs arising from the sale of said land after considering the carrying cost of land of '' 323.62 lakhs and the estimated cost of development of '' 34.50 lakhs, has been included under exceptional item. The formalities relating to execution and registration of the sale deed was completed during financial year 2022-2023.
58 The Company has implemented voluntary retirement scheme (VRS) namely TD Power Systems Ltd Employees Voluntary Retirement Scheme 2023-24 for providing financial support and was open for permanent workmen with minimum 10 years of service & 40 years of age. 8 permanent workmen opted for this scheme and the financial implication of '' 321.82 lakhs has been accounted in the financial year 2023-24.
59 Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
The previous year''s figures have been regrouped where necessary to confirm with current year''s classification. The impact of such regrouping is not material to the standalone financial statements.
Mar 31, 2023
The borrowings and non fund based facilities from Bank of Baroda & Kotak Mahindra Bank are secured by way of:
1. 1st Pari passu charge with Kotak Mahindra Bank by way of equitable mortgage of unit-1 of Company comprises of land and buildings situated at plot nos.27,28,29 & 30A area, 25304 sq. mts Phase-I KIADB Dabaspet Industrial Area, Yedehalli Village, Bengaluru Rural District, Bengaluru.
2. 1st Pari passu charge with Kotak Mahindra Bank by way of equitable mortagage of unit-II of Company comprises of land and buildings situated at Sy.No.59/2, area 4 acres 33 gunta (19526 Sq. mts including 7 gunta kharaba land) yedahalli village Dabaspet, Bangalore.
3. 1st Pari passu charge with Kotak Mahindra Bank by way of equitable mortagage of unit-II of Company comprises of land and buildings situated Sy.No. 55 (Part1), 56/1, 56/2, 57 & 58 Yedehalli Village, Dabaspet Bangalore Rural District, Bangalore measuring 12.55 acres.
4. 1st Pari passu hypothecation charge with Kotak Mahindra Bank on entire plant and machinery of the company.
Also, the borrowings and non fund based facilities from HDFC Bank are secured on above securities. This remain un-utilised on account of non-ceding of pari-passu charge and no due certificate from Bank of Baroda
5. The Company does not hold any Benami Property which is either recorded or not recorded in the books of account and there are no proceedings initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act,1988 and rules made thereunder. Accordingly, no disclosure made in this regard.
*The company had entered into an agreement/MOU for purchase of land during 2009 & 2010 and accordingly, amount aggregating to '' 3,372.75 lakhs was paid from time to time in pursuance of this agreement. Pending execution of sale deed and completion of certain works related to the land the balance amount is carried under capital advance. The management of the company is of the view that considering the nature of the transaction, the registration of the sale of the land would be completed in due course and on completion, the said amount would be capitalised. The total advances of '' 882.26 lakhs (PY '' 856.63 lakhs) represents '' 182.26 lakhs (PY '' 156.63 lakhs) towards approx. 6.75 acres (PY 6.75 acres) of land and '' 700 lakhs (PY '' 700 lakhs) towards development cost of the land. The management of the company does not expect any significant further cash outflow towards the acquisition except for the cost of registration and related expenses.
I The Company has only one class of equity shares having par value of '' 10/- each (sub-divided into '' 2/- each). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting (Refer Note 51).
II In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders
III For the period of five years immediately preceding the date as at which the Balance Sheet is prepared:
a. No shares allotted pursuant to a contract without consideration being received in cash.
b. No shares allotted as fully paid up by way of bonus shares
c. 23,04,174 equity shares were brought back by the Company during the year 2019-2020
IV The particulars of employee stock option is given in note no.49. There were no other shares reserved for issue under options and contracts/commitments for the sale of shares/disinvestment.
V There were no calls unpaid or forfeited shares.
a) Securities premium is used to record the premium on issue of shares. This is utilised in accordance with the provisions ofthe Companies Act, 2013.
b) General Reserve: General reserve is appropriation of the net profit in respect of reserves created pursuant to the provisions of the Companies Act, 1956 with respect to declaration of dividend. Such mandatory transfer to general reserve is not prescribed under the Companies Act, 2013.
c) The Remeasurements gains in respect of employee benefits included under retained earnings are as under:
As at the beginning of the year
Remeasurements gain/(loss) on defined benefit plans Income tax effect on above Balance at the end of the year
d) Capital Redemption Reserve: The capital redemption reserve represents the face value ('' 10) of the shares bought back. This is created by transfer from securities premium as per requirement of Sec.69 of the Companies Act, 2013.
e) Retained Earning: Retained earnings are the profits that the Company has earned till date, less transfer to general reserve, dividend or other distribution paid to shareholders.
f) Stock Option Outstanding Account: The balance in this account represents the Employee Share based remuneration debited to the Statement of Profit and Loss after adjustments for ESOPs exercised.
g) Shares Purchased by ESOP Trust: The shares held by the ESOP Trust are treated as treasury shares and included under other equity.
Additional Information
Details of security for secured loans
Loans from Bank of Baroda is secured by first pari-passu charge along with Kotak Mahindra Bank on all the current assets of the Company (present and future) excluding the current assets relating to orders from a particular customer which are exclusive first charge in favour of Bank of Baroda.
The loans are further collaterally secured as under:-
1. 1st Pari passu charge with Kotak Mahindra Bank by way of equitable mortagage of unit-1 of Company comprises of land and buildings situated at plot nos.27,28,29 & 30A area, 25304 sq. mts Phase-I KIADB Dabaspet Industrial Area, Yedehalli Village, Bengaluru Rural District, Bengaluru.
2. 1st Pari passu charge with Kotak Mahindra Bank by way of equitable mortagage of unit-II of Company comprises of land and buildings situated at Sy.No.59/2, area 4 acres 33 gunta (19526 Sq. mts including 7 gunta kharaba land) yedahalli village Dabaspet, Bangalore.
3. 1st Pari passu charge with Kotak Mahindra Bank by way of equitable mortagage of unit-II of Company comprises of land and buildings situated Sy.No. 55 (Part1), 56/1, 56/2, 57 & 58 Yedehalli Village, Dabaspet Bangalore Rural District, Bangalore measuring 12.55 acres.
4. 1st Pari passu hypothecation charge with Kotak Mahindra Bank on entire plant and machinery of the company.
All the above are common securities for all fund based and non-fund based facilities obtained by the Company.
Loan from Kotak Mahindra Bank is secured by first pari-passu charge with Bank of Baroda on all existing and future receivable/current assets of the Company excluding the current assets relating to orders from a particular customer.
Also refer to details of equitable mortgage mentioned under borrowings from Bank of Baroda in relation to land and buildings.
Loan from HDFC Bank Limited is secured on all existing and future receivable/current assets of the Company excluding the current assets relating to orders from a particular customer.
Also refer to details of equitable mortgage mentioned under borrowings from Bank of Baroda in relation to land and buildings.
However this remains unutilised on account of non-ceding of pari-passu charge and no due certificate from Bank of Baroda.
Interest at 8.65% p.a.(PY: 8%) is applicable on Rupee loans from Bank of Baroda which will be reviewed annually.
Interest at 9.45% p.a. (PY: 7.25% p.a. ) is applicable on Rupee loans from Kotak Mahindra Bank Limited which will be reviewed annually.
Interest at 3M MCLR 0.05% is applicable on Rupee loans from HDFC Bank Limited which will be reviewed annually
-Total outstanding dues of micro enterprises and Small enterprises* -Total outstanding dues of creditors other than micro enterprises and Small enterprises
All trade payables are non interest bearing and payable or settled within normal operating cycle of the company
Additional Information:
* The details of amounts outstanding to micro, small and medium enterprises under Micro Small and Medium Enterprises Development Act, 2006 (MSMED Act), based on the available information with the Company are as under:
1. Principal amount due and remaining unpaid
2. Interest due on (1) above and the unpaid interest
3. The amount of interest paid by the buyer in terms of section 16 of Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006), along with the amount of the payment made to the supplier beyond the appointed day during each accounting year.
4. The amount of interest due and payable for the period of delay in making payment (which has been paid but beyond the appointed day during the year) but without adding the interest specified under the Micro, Small and Medium Enterprises Development Act, 2006
5. The amount of interest accrued and remaining unpaid at the end of each accounting year
6. The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues above are actually paid to the small enterprise, for the purpose of disallowance of a deductible expenditure under section 23 of the Micro, Small and Medium Enterprises Development Act, 2006. The amount due to micro, small and medium enterprises is based on the information received and available with the Company.
|
35 CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for) Contingent Liabilities Performance Guarantees |
11,280.74 |
11,847.93 |
|
Performance Guarantees given to customers on behalf of subsidiary companies |
1,374.36 |
1,328.18 |
|
Advance Guarantees given to customers on behalf of subsidiary companies |
175.17 |
252.68 |
|
Indirect Tax demand disputed by the company |
6.89 |
- |
|
Income Tax demand disputed by the company* |
1,986.03 |
1,986.03 |
|
Other sums for which the Company is contingently liable |
5.02 |
2.32 |
The management believes, based on internal assessment and / or legal advice, that the probability of an ultimate adverse decision and outflow of resources of the Company is not probable and accordingly, no provision for the above is considered necessary.
* During May 2021, the company has received demand from Income tax department of '' 1,942.67 lakhs for AY 2017-18 with respect to Transfer Pricing and other disallowance u/s 143(3) r.w.s 144C (3) read with section 144B of the Income-tax Act. The Transfer Pricing Officer (TPO) has passed an order with demand considering transfer pricing adjustment on the overall turnover of the Company instead of restricting to transactions with Associate Enterprises. The Sales to Associate Enterprises for the said year is '' 1,964.90 lakhs as compared to the Sales of the entire Company of '' 36,944.03 lakhs. Disputing the said order, the Company filed an objection before the Dispute Resolution panel of the Income Tax Department at Bengaluru on May 26 2021. Further, consequent to a writ petition filed by the Company, the operation of the assessment order & recovery proceedings has been stayed by the Hon''ble High Court of Karnataka vide it''s order dated June 30 2021.
The Company has received assessment order u/s 143(3) r.w.s 260 read with section 144B of the Income Tax Act based on directions of Dispute Resolution panel. Further, consequent to a writ petition filed by the Company, the operation of the assessment order & recovery proceedings has been stayed by the Hon''ble High Court of Karnataka vide it''s order dated March 21, 2022.
|
Commitments |
||
|
Estimated amount of contracts remaining to be executed on capital account |
||
|
and not provided for (net of advances) |
1,997.45 |
1,885.03 |
39 Financial Instruments - Accounting Classifications and Fair value measurements
A. The Fair value of cash and cash equivalents, bank balances, loans, trade receivables, trade payables and others approximates their carrying amount. Trade receivables are evaluated after taking into consideration for Expected Credit Losses. Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique.
Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
C. Financial Risk Management Objectives and Policies
The company''s Financial Risk Management is an integral part of business strategies. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk. In addition, Company is exposed to the following risks from its use of financial instruments:
⢠Credit risk
⢠Liquidity risk
⢠Market risk
This note presents information about the Company''s exposure to each of the above risks, the Company''s objectives, policies and processes for measuring and managing risk, and the Company''s management of capital. Further quantitative disclosures are included throughout these financial statements.
The Company''s principal financial liabilities comprise short term borrowings, trade and other payables. The main purpose of these financial liabilities is to support entity''s operations. The entity''s principal financial assets include cash and cash equivalents, investment in Non-convertible Debentures and trade and other receivables that derive directly from its operations.
All activities for risk management purposes are carried out by experienced teams that have the appropriate skills, experience and supervision. It is the entity''s policy that no activities in derivatives will be undertaken except foreign exchange forward contract. The Board of Directors review and agree policies for managing each of these risks, which are summarised below.
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables. The customer credit risk is managed as per Company''s established policy, procedure and controls relating to customer credit risk management. It requires different processes and policies to be followed based on the business risks, industry practice and customer profiles.
In order to contain the business risk, the creditworthiness of the customer is through scrutiny of its financials, status of financial closure of the project, to the extent available in public domain and if required, market reports and reference checks. The Company remains vigilant and regularly assesses the financial position of customers during execution of contracts with a view to restrict risks of delays and default. In view of nature of business profile and considering the size of the Company, credit risks from receivables are well contained on an overall basis.
Provision for expected credit losses
The life time expected credit loss (âECLâ) is estimated on trade receivables, other amounts due from entities where there is no track record of short receipts. Delays in receiving payments from the customers pursuant to sale of goods or under contracts are not considered if such delays are commonly prevalent in the industry. Other short receipts other than arising from claims are duly considered in determining ECL.
Considering the above as well as business model of the Company, engineered-to-order products and the profile of trade receivables, the determination of a provision based only on age analysis may not be a realistic considering the economic and industry circumstances. Hence, the provision for expected credit loss is determined by the management for the specific trade receivables after considering the above facts and circumstances, particularly in view of the fact that there has no significant bad debts in the recent past.
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash. The Company''s approach in managing the same is to ensure, as far as possible, sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions.
The company''s principal sources of liquidity are cash and cash equivalents, investment in non-convertible debentures, balances with banks and the cash flow that is generated from operations. The cash and cash equivalent, other bank balances and investment in non-convertible debentures aggregates to '' 17,150.79 lakhs at the end of the year (PY - '' 16,434.78 lakhs). In addition the net trade receivables '' 25,476.08 lakhs (PY '' 24,508.09 lakhs) at the end of the year. The Company believes that the working capital is sufficient to meet its current requirements after considering the position of trade receivables along with Cash & Bank balances. Accordingly, no liquidity risk is perceived.
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates that will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
The Company also operates internationally and a major portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services and purchases from overseas suppliers in various foreign currencies.
i) Foreign currency risk exposure -: The company''s exposure to foreign currency risk at the end of reporting year, are as follows:
a) The foreign exchange forward contracts outstanding as on 31.03.2023 in respect of Euro is 2,20,00,000 is (2022: Euro 1,41,00,000 and USD 26,00,000)
A strengthening or weakening of the Indian Rupee, as indicated below, against the U SD, Euro, JPY and others as at 31st March 2023 would have increased (decreased) profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Company considered to be reasonably possible at the end of the reporting period. The analysis is performed on the same basis for previous year, even though the actual foreign exchange rate variances were different.
The Company''s investments are primarily in Fixed rate interest bearing deposits and non-convertible debentures. Also the borrowings bear fixed rate of interest which are reviewed periodically by the banks. Hence, the Company is not significantly exposed to interest rate risks.
While managing capital, the Company''s objective is to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefit for other stakeholders.
The Board of Directors monitor the earnings before interest, depreciation and tax (EBITDA), which the Company defines as result from operating activities before considering finance cost, depreciation & amortisation, exceptional items and tax expenses. The Board of Directors also monitors the level of dividends to equity shareholders.
The Company''s EBITDA is 14.44% for the year ended 31st March 2023 in comparison to 11.06% for the year ended 31st March 2022.
The Company monitors capital, taking a medium and long term view, on the basis of a number of financial ratios generally used by industry and by the rating agencies.
40 a. The company does not have any pending litigations which would impact its financial positon as on the reporting date except
to the extent disclosed in Note 35.
b. The company does not have any long term contracts for which there were any material foreseeable losses.
c. There are no amounts required to be transferred to the Investor Education and Protection Fund by the Company as on the reporting date.
d. To the best of the knowledge and belief of the management, no funds have been advanced or loaned or invested (either from
borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
e. To the best of our knowledge and belief of the management, no funds have been received by the Company from any person or entity, including foreign entity (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
The company''s operation comprises of Manufacturing business and project business. Primary segment reporting comprises of manufacturing business & project business segments. Secondary segment reporting is based on geographical location of activities. Under primary segment revenue and direct expenses, which relate to a particular segment and which are identifiable, are reported under that segment.
Certain expenses, which are not allocable to any specific segment, are separately disclosed at the enterprise level. Cash and bank balances in India are reported at the enterprise level as the company operates common bank accounts. Property, plant and equipments, liabilities, current assets and current liabilities relating to specific business segments are identified and reported. Those that are not identifiable are reported as common items.
Secondary segment is reported based on the geographical location of the company, viz., India and Japan. Revenues in the secondary segment are based on the sales made by the Branch Office. Inter-segmental purchases and sales are separately identified and reported. Property, plant and equipments, current assets including cash and bank accounts, and current Liabilities are identified based on the Branch office to which they relate and are reported accordingly.
42 Disclosure as per Ind AS 19 on ''Employee benefits A Gratuity - Funded
The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to gratuity at 15 days salary (15/26 X last drawn basic salary plus dearness allowance) for each completed year of service subject to a maximum of '' 20 Lakhs. The gratuity liability arises on account of future payments, which are required to be made in the event of retirement, death in service or withdrawal. The liability has been assessed using projected unit credit actuarial method. The company made annual contributions to the Employee''s Group Gratuity scheme of the Life Insurance Corporation of India.
The sensitivity analysis above has been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. This analysis may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such company is exposed to various risks such as increase in salary, investment risk, discount rate, mortality, disability and withdrawals.
B Long term Leave Liability - Non-funded
The company provides for earned leave benefit to the employees which accrue at 15 days (maximum) for the year. The earned leave is encashable while in service and upto a maximum of 105 days on retirement. The leave liability has been treated as other long term benefits and has been assessed using projected unit credit actuarial method.
The Company has taken office facilities, guesthouse and residential premises of employees under short term lease and are renewable on a periodic basis, and cancellable at its option. Rental expenses recorded for short term leases for the year is '' 33.91 lakhs (Previous year '' 33.55 lakhs).
45 Provision for warranties towards sale of goods are made on an estimated basis as actual claims cannot be determinable. During the year, the Company has made provisions towards Warranty claims, the details of the same are as under:
On 9th May 2023, (2022: 10th May 2022) the Board of Directors of the Company have proposed a dividend of '' 0.50 (2022: '' 0.70) per share in respect of the year ended 31st March 2023 subject to approval of shareholders at the Annual General Meeting.
The shortfall of '' Nil (PY '' 16.00 lakhs) has been transferred to a separate bank account within 30 days from the end of the year for utilisation in the ongoing projects in the subsequent years.
49 Employee Stock Benefit Plans
During August 2019, the Company had instituted an Employee Stock Option Plan I (GIL ESOP I) as approved by the Board of Directors and the Shareholders, for the allotment of 10,00,000 shares in aggregate, out of which not more than 5,65,000 shares to be acquired by the Trust through Secondary Acquisition and not more than 4,35,000 shares shall be issued by way of Primary / Fresh shares The maximum number of options that may be granted to any employee in any year and in aggregate shall not exceed 2,00,000 options under the plan.
In accordance with the shareholders'' approval in Annual General Meeting held on 12th August 2019, the Board, based on the recommendations of the Nomination and Remuneration Committee, has approved grant of 5,63,884 employee stock options (ââESOPs) and 3,99,216 employee stock appreciation rights ("ESARsâ) to the eligible employees of the Company and/or its Subsidiary Company(ies) under its TDPSL Equity Based Compensation Plan 2019 ("Planâ).
Out of which 97,962 ESOPs and 56,160 ESOPs have been granted to Company Secretary and Chief Financial Officer of the company respectively.
During the year ended 31st March 2023 (PY: 31st March 2022), 1,05,029 (PY: 1,70,084) Equity Shares of face value of '' 10 each (now sub-diveded in to '' 2 each) were issued & allotted to the TDPSL Employee Welfare Trust (Trust) in respect of the exercise of 93,403 (PY: 2,26,760) ESARs by grantees. Consequently, the paid up capital of the Company as at March 31, 2023 stands at '' 3,120.85 Lakhs (PY: '' 3,110.35 Lakhs) comprising 15,60,42,635 Equity Shares of '' 2/-each (PY: 3,11,03,498 Equity shares of '' 10/- each (now subdivided in to '' 2/- each)). As per the TDPSL Equity Based Compensation Plan 2019, the said shares were transferred by the Trust to the ESAR Grantees in settlement of the ESAR''S Exercised.
During the year ended 31st March 2023 (PY: 31st March 2022), 1,87,961 (PY: 1,87,901) ESOPs of face value of '' 10 each (now sub-diveded in to '' 2 each) were vested and 1,57,148 (PY: 1,87,901) options were exercised at an exercise price of '' 67.25 against which 1,57,148 (PY: 1,87,961) Equity shares of the Company were transferred to the ESOP grantees by TDPSL Employee Welfare Trust. '' 105.68 lakhs (PY: '' 126.41 lakhs) was received from the ESOP grantees upon the Exercise of ESOPs.
50 (a) The net worth of the Indian Subsidiary Company continues to be positive owing to substantial reduction of accumulated
losses. The Company is awaiting improvement in market conditions which is gradually recovering due to the receding pandemic to evaluate opportunities from time to time with required support from the parent Company. Based on an assessment of risk of claims & counter claims which the Company will have against Creditors for supply of project related equipment, as well as project cancellation, appropriate write backs have been accounted in respect of these creditors in financial year 2021-2022 amounting to '' 757.72 lakhs and earlier year, resulting in the Company''s Net worth turning positive. Further, efforts are ongoing to recover receivables by which management is hopeful of significantly improving the Company''s ability to settle claims from creditors, if any. Accordingly, the financial statements of the Indian subsidiary continue to be prepared on a going concern basis which is considered appropriate by the management of that Company.
(b) The overseas subsidiary in USA has accumulated losses exceeding its share capital and has eroded its networth as at the end of the reporting period. The Subsidiary''s liabilities exceeds its total assets by '' 537.36 lakhs (PY: '' 882.84 Lakhs). A substantial portion of the liabilities is loan from the Parent company which is being renewed on timely basis reflecting the parent company''s resolve to support and grow the market. Over the last 3-4 years this subsidiary has improved foothold in the American market and has delivered certain initial orders from very reputed customers. This will help in receiving improved orders in the forthcoming years enabling better operating performance. The subsidiary is managing it''s cash flow requirements. However, the parent company is authorised by its Board to infuse further funds as and when required. Based on this, the management of that company is of the opinion that the going concern assumption in preparation of the financial statements of that company is appropriate. Hence, considering the future prospects of the said subsidiary no provision for impairment in the carrying value of the investment in this subsidiary is considered necessary by the management of the company in the standalone financial statements.
(c) Exceptional Item
TD Power Systems Japan Ltd has filed an application for dissolution subject to statutory requirements. Accordingly, a provision to the tune of carrying value of the investment amounting to '' 122.44 Lakhs in this subsidiary is provided in the standalone financial statements of and included under exceptional items.
51 At the Annual general Meeting (AGM) of the members of the Company held on September 27, 2022, the shareholders of the Company approved sub-division of the existing Equity Shares of the Company having face value of '' 10 each into 5 Equity Shares of '' 2 each on the date to be determined by the Board of Directors. Consequent changes to the Capital Clause of the Memorandum and Articles Of Association of the Company were also approved at the said AGM. Based on a record date set as November 1 2022, the required corporate action giving effect to the aforesaid sub division of the shares has been completed as of date. Accordingly, the Authorised & Paid up capital of the Company stands at '' 3,500.00 lakhs comprising of 17,50,00,000 Equity Shares of '' 2/-each & '' 3,120.85 lakhs comprising of 15,60,42,635 equity shares of '' 2/-each respectively. As per the requirements of IND AS 33, the Earnings per share presented for all the periods in these results is after considering the said sub-division of equity shares.
(a) The Company has borrowings from banks on the basis of security of current assets. The quarterly statement of current assets filed by the Company with banks during the year are in agreement with the books of accounts.
b) The Company does not have any charges/satisfaction which is yet to be registered with ROC beyond the statutory period.
c) The Company has not traded or invested in Crypto currency or Virtual Currency during the year.
d) The Company is not declared as a willful defaulter by any bank or financial institution or other lender or Government or Government authorities. Accordingly, no disclosures are made in this regard.
e) The Company does not have any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
f) The Company does not have transactions or balances with struck off companies.
g) Based on the assessment of financial ratios, aging and expected dates of realisation of financial assets and payment of financial liabilities, and other information accompanying the financial statements, the management is of the opinion that no material uncertainty exists as on the date of the balance sheet that the Company is capable of meeting its liabilities existing at the date of the balance sheet as and when they fall due within a period of one year from the balance sheet date.
During the year ended 31st March 2023, the Company sold unutilised land measuring 4 acre and 31 Guntas situated at Pemmanahalli village, Sompura Hobli, Nelamangala Taluk, Bangalore Rural District '' 429.75 lakhs. The net profit of '' 71.63 lakhs arising from the sale of said land after considering the carrying cost of land of '' 323.62 lakhs and the estimated cost of development of '' 34.50 lakhs, has been included under exceptional item. The formalities relating to execution and registration of the sale deed was completed during this quarter.
55 Recent amendments to Standards:
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, as below:
Ind AS 1 - Presentation of financial Statements:
This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after April1,2023. The Company has evaluated amendment and the impact of the amendment is insignificant in the standalone financial statements.
Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors:
This amendment has introduced a definition of âaccounting estimates'' and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated amendment and and there no impact of the amendment on the standalone financial statements.
This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and off setting temporary differences.
The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The amendments are not expected to have a material impact on the Company.
Prior year amounts have been regrouped/reclassified wherever necessary to conform to the current year''s presentation.
Mar 31, 2018
Corporate Information
The Company is incorporated and domiciled in India. Consequent to a Special Resolution of the Members, passed at the Companyâs Extra Ordinary General Meeting held on 17th January 2011, the Company was converted to a Public Limited Company by altering its Articles of Association in terms of Section 31 read with Section 44 of the Companies Act 1956, and a fresh Certificate of Incorporation dated 4th February 2011 was issued by the Registrar of Companies, Karnataka. The registered office of the Company is located at Dabaspet, Nelamangala Taluk, Bangalore - 562 111. The Company is engaged in manufacturing AC Generators and Electric Motors for various applications which are specifically designed and tailor-made to suit the needs of the customers based on their requirements and specifications.
The financial statements for the year ended March 31, 2018 were approved by the Board of Directors and authorised for issue on May 23, 2018.
The companyâs subscription to the Share Capital of its Wholly Owned Subsidiaries included in investment under non-current assets as at 31st March 2018 are as follows: -
a. 80,100 Equity Shares of USD 10 each in TD Power Systems USA Inc, USA
b. 2,000 Equity Shares of JPY 10,000 each in TD Power Systems Japan Limited, JAPAN
c. 5,50,000 * Equity Shares of Euro 1 each in TD Power Systems Europe GmbH, EUROPE (*erstwhile Platin 1255 GmbH acquired by the company during January 2016)
d. 59,99,998 Equity Shares of Rs.10 each in D F Power Systems Private Limited (excluding two shares beneficially held by the Directors of the Company)
e. 1,893 Equity Shares of Turkish Lira 100 each in TD Power System Jenerator Sanayi Anonim Sirketi which was incorporated on 21st June 2017
* The company has entered into an agreement/MOU for purchase of land during 2009 and 2010 and accordingly, amount aggregating to Rs.3372.75 lakhs was paid from time to time in pursuance of this agreement. Pending execution of sale deed and completion of certain works related to the land the said balance amount is carried under capital advance. The management of the company is of the view that considering the nature of the transaction, the registration of the sale of the land would be completed in due course and on completion the said amount would be capitalized. The total advances of Rs.1301.31 lakhs represents Rs.601.31 lakhs towards approx. 10 acres of land and Rs.700 lakhs towards development cost of the land. The management of the company does not expect any significant further cash outflow towards the acquisition except for the cost of registration and related expenses.
Other Information
I The Company has only one class of equity shares having par value of Rs.10/- each. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
II In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all liabilities. The distribution will be in proportion to the number of Equity Shares held by the shareholders
III For the period of five years immediately preceding the date as at which the Balance Sheet is prepared, there were:
a. No shares allotted pursuant to a contract without consideration being received in cash.
b. No shares allotted as fully paid up by way of bonus shares
c. No shares were bought back
IV There were no shares reserved for issue under options and contracts/commitments for the sale of shares/ disinvestment.
V There were no calls unpaid or forfeited shares.
1. FIRST-TIME ADOPTION OF IND AS â 101
i) Transition to Ind AS
The financial statements of the Company has been prepared in accordance with Ind AS. For the purposes of transition to Ind AS, the Company has followed the guidance prescribed in Ind AS 101-First Time adoption of Indian Accounting Standard, with April 1, 2016 as the transition date and IGAAP as the previous GAAP.
The transition to Ind AS has resulted in changes in the presentation of the financial statements, disclosures in the notes there to and accounting policies and principles. The accounting policies set out in note 1 have been applied in preparing the standalone financial statements for the year ended 31st March 2018 and the comparative information.
An explanation of the transition from previous GAAP to Ind AS on the Companyâs financial statements, is set out below. Exemptions on first time adoption of Ind AS availed in accordance with Ind AS 101 have also been set out in note 37 (ii) below.
ii) Exemptions and exceptions availed
Ind-AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The company has accordingly applied the following exemptions.
(a) Ind AS optional exemption
1 Deemed cost
Ind AS 101 permits a first time adopter to elect to continue with carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as a deemed cost as at the date of transition. This exemption can also be used for Intangible assets covered by Ind AS 38 and investment property covered by Ind AS 40.
Accordingly, the Company has elected to measure all of its property, plants and equipments, intangible assets at their previous GAAP carrying value.
2 Investments in equity of subsidiaries
The company has elected to continue with the carrying value of its investments in equity instruments of subsidiary companies recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its cost as of the transition date after making adjustment provision for impairment as estimated by the management.
iii) Reconciliations
The following reconciliations provides the effect of transition to Ind AS from IGAAP in accordance with Ind AS 101
Notes to Reconcilation statement:
a. Under Ind AS 109, the Company has evaluated the financial position of itâs Indian Subsidiary for the purposes of transition to Ind_AS and has accordingly recorded a provision of Rs.1440.75 lakhs being the excess of the carrying value of the investment of the subsidiary over the face value, by debit to the Other Equity as on 1st April 2016.
b. Payment of gratuity as per payment of gratuity Act is administered by Life Insurance Corporation of India (LIC) and Company is funding as recommended by LIC. The Company has recognised excess of fair value of plan assets over defined benefit obligations relating gratuity as asset amounting to Rs.122.18 lakhs as at 1st April 2016 and Rs.129.14 lakhs as at 31st March 2017 respectively as per the requirement of Ind AS. During the year 2016-2017, the Company has recognised excess funding towards gratuity amounting to Rs.6.96 lakhs as an asset, Rs.122.18 lakhs was considered as a transition adjustment and Rs. 6.96 lakhs was considered as Ind As Adjustment for the statement of profit and loss for the year ended 31st March, 2017.
c. Under previous GAAP, the Company followed completed contract method for revenue recognition in case of service contracts. As per requirement of IND AS, the Company has recognised revenue under percentage of completion method for service contracts. Consequently, Company has recognised revenue amounting to Rs.20.65 lakhs as on 1st April 2016 and Rs.22.65 lakhs as on 31st March 2017 respectively. As a result there is increase in the revenue for the year ended 31st March 2017 amounting to Rs.1.99 lakhs which is disclosed as Ind As Adjustment in the statement of profit and loss for the year ended 31st March, 2017.
d. Under previous GAAP Advance to employees were recognised on the historical value. Under IND AS, long term employee advances are to be recognised after considering the effective interest rate. Consequently, advance given to employees which are more than 12 months are recognised after considering the impact of interest which amounts to Rs.0.22 lakhs as at 1st April 2016 and Rs.0.07 lakhs as at 31st March 2017. This has resulted in net impact on the other income of Rs.0.14 lakhs for the year ended 31st March 2017.
e. The Company has reversed the provision for proposed dividend and dividend distribution tax made in earlier year amounting to Rs.1,241.49 lakhs to retained earnings as on 1st April 2016, since the dividends were actually declared after the balance sheet date which is in accordance with Ind As 10. Accordingly, the actual amount of dividend and dividend distribution tax paid or payable during the year ended 31st March, 2017 has been debited to the retained earnings.
f. Under previous GAAP, actuarial gains and losses were recognised in the statement of profit and loss. Under Ind AS, the actuarial gains and losses from re-measurement of net defined benefit liability / asset is recognised in other comprehensive income in the respective years. Company has reclassified acturial loss amounting to Rs.33.87 lakhs for the year ended 31st March 2017 as Other comprehensive Income from Employee benefit expenses as per IND AS requirement. Also the Company has accounted the income tax effect of Rs. 11.72 lakhs on the acturial loss in other comprehensive income.
viii. Effect on IND AS Adoption on the Statement of Cash flow for the year ended 31st March 2017
The transition from the previous GAAP to IND AS has no impact on the statement of cash flows except for regrouping among the cash flow from operating, financing and investing activities and classifying cash and bank balances into cash and cash equivalents and bank balances other than cash and cash equivalents.
2. Financial Instruements - Accounting Classifications and Fair value measurements
a). The Fair value of cash and cash equivalents, bank balances, loans, trade receivables, trade payables and others approximates their carrying amount. Trade receivables are evaluated after taking into consideration for Expected Credit Losses. Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique.
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
c. Financial Risk Management Objectives and Policies
The companyâs Financial Risk Management is an integral part of business strategies. The Companyâs focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk. In addition, Company is exposed to the following risks from its use of financial instruments:
- Credit risk
- Liquidity risk
- Market risk
This note presents information about the Companyâs exposure to each of the above risks, the Companyâs objectives, policies and processes for measuring and managing risk, and the Companyâs management of capital. Further quantitative disclosures are included throughout these financial statements.
The Companyâs principal financial liabilities comprise short term borrowings, trade and other payables. The main purpose of these financial liabilities is to support entityâs operations. The entityâs principal financial assets include cash and cash equivalents and trade and other receivables that derive directly from its operations.
All activities for risk management purposes are carried out by experienced teams that have the appropriate skills, experience and supervision. It is the entityâs policy that no activities in derivatives will be undertaken except foreign exchange forward contract. The Board of Directors review and agree policies for managing each of these risks, which are summarised below.
Credit Risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables. The customer credit risk is managed as per Companyâs established policy, procedure and controls relating to customer credit risk management. It require different processes and policies to be followed based on the business risks, industry practice and customer profiles.
In order to contain the business risk, the creditworthiness of the customer is through scrutiny of its financials, status of financial closure of the project, if required, market reports and reference checks. The Company remains vigilant and regularly assesses the financial position of customers during execution of contracts with a view to restrict risks of delays and default. In view of nature of business profile and considering the size of the Company, credit risks from receivables are well contained on an overall basis.
The Companyâs maximum exposure to credit risk at the reporting date is the carrying amount of trade receivable.
Receivables in excess of 10% of individual business represents receivables from four customers as on 31st March 2018, three customers as on 31st March 2017 and two customers as on 1st April 2016.
Provision for expected credit losses
The life time expected credit loss (âECLâ) is estimated on trade receivables other amounts due from entities where there is no track record of short receipts. Delays in receiving payments from the customers pursuant to sale of goods or under contracts are not considered if such delays are commonly prevalent in the industry. Other short receipts other than arising from claims are duly considered in determining ECL.
Considering the above as well as business model of the Company, engineered-to-order products and the profile of trade receivables, the determination of a provision based only on age analysis may not be a realistic considering the economic and industry circumstances. Hence, the provision for expected credit loss is determined by the management for the specific trade receivables after considering the above facts and circumstances, particularly in view of the fact that there has no bad debts in the recent past.
Provision matrix (%, amounts) of ECL for trade receivables and the reconciliation of the movement in the provision is given below.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash. The Companyâs approach in managing the same is to ensure, as far as possible, sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions.
The companyâs principal sources of liquidity are cash and cash equivalents, balances with banks and the cash flow that is generated from operations. The cash and cash equivalent and other bank balances aggregates to Rs.15,770.38 lakhs at the end of year (2017-Rs.19,030.90 lakhs, 2016-Rs.19,219.33 lakhs). The company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.
The following are the contractual maturities of non-derivative financial liabilities, based on contractual cash flows:
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Companyâs income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
The Company operates internationally and a major portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services and purchases from overseas suppliers in various foreign currencies.
i) Foreign currency risk exposure -: The companyâs exposure to foreign currency risk at the end of reporting period, are as follows:
a) The foreign exchange forward contracts outstanding as on 31.03.2018 in respect of Euro is Rs. 1,453.29 lakhs (2017: Nil and 2016: Nil)
b) The total foreign currency exposures of the year is as under:
c) Sensitivity analysis
A movement of the Indian Rupee, as indicated below, against the USD, Euro, JPY and others at 31st March 2018 would have increased (decreased) profit or loss by the amounts shown below. This analysis is in respect of foreign currency exposure as mentioned in (b) above and based on foreign currency exchange rate variances that the Company considered to be reasonably possible at the end ofthe reporting period. The analysis is performed on the same basis for previous year, even though the actual foreign exchange rate variances were different.
ii) Interest Rate Risk
The Companyâs investments are primarily in Fixed rate interest bearing deposits. Also the borrowings bear fixed rate of interest. Hence, the Company is not significantly exposed to interest rate risks.
d). Capital Management
While managing capital, the Companyâs objective is to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefit for other stakeholders.
The Board of Directors monitors the earnings before interest, depreciation and tax (EBITDA), which the Company defines as result from operating activities before considering finance cost, depreciation & amortisation, exceptional items and tax expenses. The Board of Directors also monitors the level of dividends to equity shareholders
The Companyâs EBITDA is 6.58% as at 31.03.2018 in comparison to 7.56% as at 31.03.2017.
The Company monitors capital, taking a medium and long term view, on the basis of a number of financial ratios generally used by industry and by the rating agencies.
3 a. The Company does not have any pending litigations which would impact its financial positon as on the reporting date except to the extent disclosed in Note.36.
b. The Company does not have any long term contracts including derivatie contracts for which there were any material foreseeable losses. Adequent provision has been made for losses in respect of short term foreign exchange forward contract (Refer Note.22).
c. There are no amounts required to be transferred to the Investor Education and Protection Fund by the Company as on the reporting date-.
4. SEGMENT REPORTING
The companyâs operation comprises of Manufacturing business & Project Business. Primary segment reporting comprises of Manufacturing Business & Project Business Segments. Secondary segment reporting is based on geographical location of Activities. Under primary segment revenue and direct expenses, which relate to a particular segment and which are identifiable, are reported under that segment.
Certain expenses, which are not allocable to any specific segment, are separately disclosed at the enterprise level. Cash and bank balances in India are reported at the enterprise level as the company operates common bank accounts. Property, plant and equipments, Liabilities, Current assets and Current liabilities relating to specific business segments are identified and reported. Those that are not identifiable are reported as common items.
Secondary segment is reported based on the geographical location of the company, viz., India and Japan. Revenues in the secondary segment are based on the sales made by the branch office. Inter-segmental purchases & sales are separately identified and reported. Property, plant and equipments, Current Assets including Cash and Bank accounts, and Current Liabilities are identified based on the branch office to which they relate and are reported accordingly.
5. Disclosure as per Ind AS 19 on âEmployee benefits
A. Gratuity
The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to gratuity at 15 days salary (15/26 X last drawn basic salary plus dearness allowance) for each completed year of service subject to a maximum of Rs.20 Lakhs. The gratuity liability arises on account of future payments, which are required to be made in the event of retirement, death in service or withdrawal. The liability has been assessed using projected unit credit actuarial method. The company made annual contributions to the Employeeâs Group Gratuity scheme of the Life Insurance Corporation of India.
vi. Risk Exposures
Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such company is exposed to various risks such as increase in salary, investment risk, discount rate, mortality, disability and withdrawals.
B. Long term Leave Liability - Unfunded
The company provides for earned leave benefit to the employees which accrue at 15 days (maximum) for the year. The earned leave is encashable while in service and up to a maximum of 105 days on retirement. The leave liability has been treated as other long term benefits and has been assessed using projected unit credit actuarial method.
6. Operating Lease
The Company has various operating leases for office facilities, guesthouse and residential premises of employees that are renewable on a periodic basis, and cancelable at its option. Rental expenses for operating leases included in the financial statements for the year is Rs.46.81 lakhs (Previous year Rs.48.36 lakhs).
Provision is made for estimated warranty claims in respect of products sold which are still under warranty at the end of the reporting period. Management estimates the provision based on historical warranty claim information and any recent trends that may suggest future claims could differ from historical amounts.
7. Subsequent Events
On 23rd May 2018 (2017: 18th May 2017, 2016: 11th May 2016), the Board of Directors of the Company have proposed a dividend of Rs.1.80 (2017: Rs.1.80 2016: Rs.3.05) per share for the year ended 31st March 2018 subject to approval of shareholders at the Annual General Meeting.
8. Research & Development
Following expenses have been incurred by the company towards Research & Development activities
9. Corporate Social Responsibility
a. Gross amount required to be spent by the company as at the year end - Nil
b. Amount spent as at the end of year is:
a. Gross amount required to be spent by the company during previous year Rs.146.59 lakhs
b. Amount spent during previous year on
10. Consequent to closure of the guarantee provided to the Indian Subsidiary, the company has recovered guarantee commission from itâs Indian Subsidiary which was prohibited by the Bank under the terms of the Guarantee document. The amount of commission so recovered from the subsidiary aggregating to Rs.1,702.09 lakhs (excluding tax) has been disclosed under exceptional items in the above financial statement. Exceptional items also include other service charges not recovered from the said subsidiary earlier amounting to Rs. 511.89 lakhs (excluding tax) which have been recovered during the year.
11. The company has evaluated the financial position of its Indian Subsidiary for the purposes of transition to Ind_AS and has accordingly recorded a provision of Rs.1,440.75 lakhs being the excess of the carrying value of the Investment of the subsidiary over the face value, by debit to the Other Equity as on 1st April 2016.
No further provision for impairment in the carrying value of the investments of the subsidiaries in the standalone financial statements is considered necessary as in the view of the management, the diminution in the net value of assets of these subsidiaries is not of a permanent nature cosidering the furture business prospect of these subsidiaries.
12. The standalone financial information of the Company for transition date i.e. opening standalone balance sheet date being April 1, 2016 and previous year ended March 31, 2017, included in these standalone financial statements, are based on the previously issued standalone financial statments which were prepared under previous GAAP and audited by a firm of Chartered Accountants other than Varma & Varma, Chartered Accountants as adjuested for the differences in the accounting principles adopted by the Company on transition to Ind AS, which have been audited by Varma & Varma, Chartered Accountants.
Mar 31, 2016
Other Information
I The Company has only one class of equity shares having par value of Rs. 10/- each. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
For the period ended 31st March 2016 (31 March 2015, Rs. 2.645), a dividend per share of Rs. 3.05/- has been provided for payment to shareholders subject to approval at the Annual General Meeting of the Company.
II Equity shares include
a Shares allotted pursuant to a contract without consideration being received in cash.
Issued to the shareholder of subsidiary company, DF Power Systems Private Limited, in exchange of 1,700,000 fully paid up equity shares of Rs. 10/- each on 19th October 2010
b Shares allotted by way of bonus shares.
On Capitalization out of Reserves to an extent of 16,246,934 Equity Shares of Rs. 10/- each on 11th January 2011.
Defined Benefit Plan
The employees'' gratuity fund scheme managed by a trust is a defined benefit plan. The Present value of obligation is determined based on actuarial valuation using the projected unit credit method.
1. SEGMENT REPORTING
The Company''s operation comprises of Manufacturing business & Project Business. Primary segmental reporting comprises of Manufacturing Business & Project Business Segments. Secondary Segmental reporting is based on geographical location of Activities. Under primary segment revenue and direct expenses, which relate to a particular segment and which are identifiable are reported under that segment.
Certain expenses, which are not allocable to any specific segment, are separately disclosed at the enterprise level. Cash and bank balances in India are reported at the enterprise level as the company operates common bank accounts. Fixed assets, Liabilities, Current assets and Current liabilities relating to specific business segments are identified and reported. Those that are not identifiable are reported as common items.
Secondary segment is reported based on the geographical location of the company, viz., India and Japan. Revenues in the secondary segment are based on the sales made by the branch office. Inter-segmental purchases & sales are separately identified and reported. Fixed assets, Current Assets including Cash and Bank accounts, and Current Liabilities are identified based on the branch office to which they relate and are reported accordingly.
2. OPERATING LEASE
The Company has various operating leases for office facilities, guesthouse and residential premises of employees that are renewable on a periodic basis, and cancelable at its option. Rental expenses for operating leases included in the financial statements for the year are Rs. 10,878,320/- (Previous year Rs. 13,986,741/-).
3. WARRANTY CLAIMS
Provisions for warranties are made on an estimated basis. During the reporting period, the Company has made provisions towards Warranty claims; the details of the same areas under:
4. a. The company does not have any pending litigations which would impact its financial position as on the reporting date.
b. The company does not have any long term contracts including derivative contracts for which there were any material foreseeable losses.
c. There are no amounts required to be transferred to the Investor Education and Protection Fund by the Company as on the reporting date.
d. Previous reporting year figures have been regrouped wherever required in conformity with the presentation for the current reporting year.
Dividend declared is higher by 15% at Rs. 3.05 per share and the Dividend payout will account for 67.67 % excluding dividend distribution tax.
Forward-Looking Statement
Statements in the Management Discussion and Analysis describing the Company''s plans, estimates and projections may be ''forward looking statements'' within the meaning of applicable securities laws and regulations. Actual results may materially differ from those expressed or implied in the report. The Company assumes no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent developments, information or events.
Mar 31, 2015
1. SHARE CAPITAL
I Equity shares include
a Shares allotted pursuant to a contract without consideration being
received in cash.
Issued to the shareholder of subsidiary company, DF Power Systems
Private Limited, in exchange of 1,700,000 fully paid up equity shares
of Rs. 10/- each on 19th October 2010.
b Shares allotted by way of bonus shares.
On Capitalisation out of Reserves to an extent of 16,246,934 Equity
Shares of Rs. 10/- each on 11th January 2011.
As at As at
31.03.2015 31.03.2014
Rs. Rs.
2. CONTINGENT LIABILITIES AND COMMITMENTS
(to the extent not provided for)
Contingent Liabilities
Claims against the Company not - -
acknowledged as debts
Guarantees 592,944,983 715,518,533
Letters of credit 279,059,745 175,303,155
The management believes, based on internal
assessment and/or legal advice, that
the probability of an ultimate adverse
decision and outflow of resources of the
Company is not probable and accordingly,
no provision for the same is considered
necessary.
Commitments
Estimated amount of contracts remaining to
be executed on capital account and
not provided for (net of advances) 89,393,155 93,300,798
Corporate Guarantee issued to the bankers
of the subsidiary company (DFPS)
1,420,000,000 5,540,000,000
Corporate Guarantee issued on behalf of
subsidiary company (Japan WOS)
17,506,701 182,270,682
Outstanding Bills discounted under
Letter of Credit - -
Department of Income Tax (TDS Circle) have issued demand notice under
section 201(1)/201(1a) of the Income Tax act, based on tax payer''s data
reflected in the computer system of the department for Short deduction
/ Short payments and interest thereon, for the financial years 2006-07,
2007-08, 2008-09, 2009-2010, 2010-2011 amounting to Rs. 754,934/-
including Rs. 322,946/- towards interest on such short
deduction/payment under Forms 27EQ, 26Q & 24Q. The Company has pursued
the matter with the department and the same is under appeal for such
short deduction/late payment.
The Company has obtained EPCG licence No. 073001256 dt. 10.07.2013 to
the extent of Rs. 6.95 Crores for importation of capital goods without
payment of custom duties. Under the licence the company will have to
fulfill the export obligation of Rs. 41.71 Crores.
The Company has obtained EPCG licence No. 0730014370 dt.31.03.2015 to
the extent of Rs. 1.92 Crores for importation of capital goods without
payment of custom duties. Under the licence the company will have to
fulfill the export obligation of Rs. 11.574 Crores.
3. SEGMENT REPORTING
The Company''s operation comprises of Manufacturing business & Project
Business. Primary segmental reporting comprises of Manufacturing
Business & Project Business Segments. Secondary Segmental reporting is
based on geographical location of Activities. Under primary segment
revenue and direct expenses, which relate to a particular segment and
which are identifiable are reported under that segment.
Certain expenses, which are not allocable to any specific segment, are
separately disclosed at the enterprise level. Cash and bank balances in
India are reported at the enterprise level as the company operates
common bank accounts. Fixed assets, Liabilities, Current assets and
Current liabilities relating to specific business segments are
identified and reported. Those that are not identifiable are reported
as common items.
Secondary segment is reported based on the geographical location of the
company, viz., India and Japan. Revenues in the secondary segment are
based on the sales made by the branch office. Inter-segmental purchases
& sales are separately identified and reported. Fixed assets, Current
Assets including Cash and Bank accounts, and Current Liabilities are
identified based on the branch office to which they relate and are
reported accordingly.
4. RELATED PARTIES DISCLOSURE
Name of the Related Party Relationship
DF Power Systems Private Limited Subsidiary
TD Power Systems (USA) Inc. Subsidiary
TD Power Systems Japan Limited Subsidiary
Nikhil Kumar Key Managerial Personnel
Hitoshi Matsuo Key Managerial Personnel
Tadao Kuwashima Key Managerial Personnel
Mohib N. Khericha Key Managerial Personnel
5. OPERATING LEASE
The Company has various operating leases for office facilities,
guesthouse and residential premises of employees that are renewable on
a periodic basis, and cancelable at its option. Rental expenses for
operating leases included in the financial statements for the year are
Rs. 13,986,741/- (Previous year Rs. 15,337,415/-).
6. a. The company does not have any pending litigations which would
impact its financial positon as on the reporting date.
b. The company does not have any long term contracts including
derivative contracts for which there were any material foreseeable
losses.
c. There are no amounts required to be transferred to the Investor
Education and Protection Fund by the Company as on the reporting date.
d. Previous reporting year figures have been regrouped wherever
required in conformity with the presentation for the current reporting
year.
Mar 31, 2014
Contingent Liabilities
Claims against the Company not
acknowledged as debts  19,711,242
Guarantees 715,518,533 521,904,676
Letters of credit 175,303,155 107,318,622
The management believes,
based on internal assessment
and / or legal advice, that
the probability of an
ultimate adverse decision
and outflow of resources of
the Company is
not probable and accordingly,
no provision for the same
is considered necessary.
As at 31.03.2014 As at 31.03.2013
Rs. Rs.
CONTINGENT LIABILITIES
AND COMMITMENTS (Contd.)
Commitments
Estimated amount of
contracts remaining to be
executed on capital account
and not provided for
(net of advances) 93,300,798 472,196,698
Corporate Guarantee issued
to the bankers of the
subsidiary company (DFPS) 5,540,000,000 5,540,000,000
Corporate Guarantee issued
on behalf of subsidiary
company.
(Japan WOS) 182,270,682 Â
Outstanding Bills
discounted under Letter of
Credit  24,715,274
Department of Income Tax (TDS Circle) have issued demand notice under
section 201(1)/201(1a) of the Income Tax act, based on tax payer''s data
reflected in the computer system of the department for Short deduction /
Short payments and interest thereon, for the financial years 2006-07,
2007-08, 2008-09, 2009-2010, 2010-2011 amounting to Rs. 40,543,629/-
including Rs. 10,742,443/- towards interest on such short
deduction/payment under Forms 27EQ, 26Q & 24Q. The company has pursued
the matter with the department during the year and the balance demand
of Rs. 393,400/- is under appeal including Rs. 109,520/- towards
interest on such short deduction/late payment.
2. SEGMENT REPORTING
The company''s operation comprises of Manufacturing business & Project
Business. Primary segmental reporting comprises of Manufacturing
Business & Project Business Segments. Secondary Segmental reporting is
based on geographical location of Activities. Under primary segment
revenue and direct expenses, which relate to a particular segment and
which are identifiable, are reported under that segment.
Certain expenses, which are not allocable to any specific segment, are
separately disclosed at the enterprise level. Cash and bank balances in
India are reported at the enterprise level as the company operates
common bank accounts. Fixed assets, Liabilities, Current assets and
Current Liabilities relating to specific business segments are identified
and reported. Those that are not identifiable are reported as common
items.
Secondary segment is reported based on the geographical location of the
company, viz., India and Japan. Revenues in the secondary segment are
based on the sales made by the branch office. Inter-segmental purchases
& sales are separately identified and reported. Fixed assets, Current
Assets including Cash and Bank accounts, and Current Liabilities are
identified based on the branch office to which they relate and are
reported accordingly.
3. OPERATING LEASE
The Company has various operating leases for office facilities,
guesthouse and residential premises of employees that are renewable on
a periodic basis, and cancellable at its option. Rental expenses for
operating leases included in the financial statements for the year are
Rs. 15,337,415/- (Previous year Rs.29,318,726/-).
4. PREVIOUS REPORTING YEAR
Previous reporting year figures have been regrouped wherever required in
conformity with the presentation for the current reporting year
Mar 31, 2013
1 SEGMENT REPORTING
The company''s operation comprises of Manufacturing business & Project
Business. Primary segmental reporting comprises of Manufacturing
Business & Project Business Segments. Secondary Segmental reporting is
based on geographical location of Activities. Under primary segment
revenue and direct expenses, which relate to a particular segment and
which are identifiable, are reported under that segment.
Certain expenses, which are not allocable to any specific segment, are
separately disclosed at the enterprise level. Cash and bank balances in
India are reported at the enterprise level as the company operates
common bank accounts. Fixed assets, Liabilities, Current assets and
Current liabilities relating to specific business segments are
identified and reported. Those that are not identifiable are reported
as common items.
Secondary segment is reported based on the geographical location of the
company, viz., India and Japan. Revenues in the secondary segment are
based on the sales made by the branch office. Inter-segmental purchases
& sales are separately identified and reported. Fixed assets. Current
Assets including Cash and Bank accounts, and Current Liabilities are
identified based on the branch office to which they relate and are
reported accordingly.
2 OPERATING LEASE
The Company has various operating leases for office facilities,
guesthouse and residential premises of employees that are renewable on
a periodic basis, and cancelable at its option. Rental expenses for
operating leases included in the financial statements for the year are
Rs. 29,318,726/- (Previous year Rs.29,285,271/-).
3 INITIAL PUBLIC OFFERING (IPO]
During the financial year 2011-2012 the company raised funds amounting
to Rs. 2,269,999,872/- through an Initial Public Offer by filing
prospectus with SEBI through a book building process. A share of the
company was issued at the premium of Rs.246/- having face value of
Rs.10 each. All the Issue Related Expense have been debited to Share
Premium Account to Rs. 139,082,279/- and the statement of utilisation
of IPO Proceeds is as follows:
4 MANAGERIAL REMUNERATION
1. Consequent to completion of the term of appointment, Mr. Hitoshi
Matsuo ceased to be the Managing Director of the Company with effect
from September 30,2012.
In terms of a resolution of the Shareholders by a postal ballot
approved on August 27,2012 and on December 22,2012, Mr. Hitoshi Matsuo
was appointed as a Whole time Director of the company designated as
Director - International from October 1,2012 for a period of 2 years,
to be based in Japan, subject to approval of the Central government.
Since Mr. Matsuo is a Non-Resident, an application has been made to the
Central government in this regard.
2. Mr. Nikhil Kumar Joint Managing Director was re-designated as
Managing director of the company effective October 1, 2012 as approved
by the Company''s shareholders through a postal ballot on August
27,2012. Approval of the Central government has been received for the
same in terms of Section 268 of the Companies Act, 1956.
3. Notwithstanding the shareholders'' approval, agreements with the
Managing director and whole time directors and the central government
approval as applicable for a higher remuneration, the Board of
Directors of the Company vide circular resolution dated November
19,2012 approved in principle and finally approved atthe Board meeting
held on February 6, 2013 that, the remuneration payable to Mr. Nikhil
Kumar, Managing Director, Mr. Hitoshi Matsuo, Whole time Director and
Mr. Tadao Kuwashima, Whole time Director shall be computed in terms of
Section 349 & 350 of the Companies Act, 1956 subject to however that,
the total remuneration payable to all such Directors shall not exceed
10% of the net profits of the company. Accordingly, the remuneration
payable to Managing & Whole time Directors for the financial year
2012-2013 is provided in the Books of Accounts of the Company.
5 PREVIOUS REPORTING YEAR
Previous reporting year''s figures have been regrouped wherever required
in conformity with the presentation for the current reporting period
Mar 31, 2012
I The Company has only one class of equity shares having par value of
Rs.10/- each. Each holder of equity shares is entitled to one vote per
share. The Company declares and pays dividends in Indian rupees. The
dividend proposed by the Board of Directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting.
During the period ended 31 March 2012, the amount of per share dividend
recognised as distribution to equity share holders is Rs. 2/- (31 March
2011 Rs.2/-)
Additional information
(*) Accumulated depreciation as on 01st April 2004 under Owned Assets
includes accumulated depreciation of leased asset also.
(**) Dues w.r.t Motor Vehicles under Hire Purchase Scheme from ICICI
Bank Limited amounts to Rs. 3,825,755 (Previous Year Rs. 7,634,710)
1 SEGMENT REPORTING
The company''s operation comprises of Manufacturing business & Project
Business. Primary segmental reporting comprises of Manufacturing
Business & Project Business Segments. Secondary Segmental reporting is
based on geographical location of Activities. Under primary segment
revenue and direct expenses, which relate to a particular segment and
which are identifiable, are reported under that segment
Certain expenses, which are not allocable to any specific segment, are
separately disclosed at the enterprise level. Cash and bank balances in
India are reported at the enterprise level as the company operates
common bank accounts. Fixed assets, Liabilities, Current assets and
Current liabilities relating to specific business segments are
identified and reported. Those that are not identifiable are reported
as common items.
Secondary segment is reported based on the geographical location of the
company, viz., India and Japan. Revenues in the secondary segment are
based on the sales made by the branch office. Inter-segmental purchases
& sales are separately identified and reported. Fixed assets, Current
Assets including Cash and Bank accounts, and Current Liabilities are
identified based on the branch office to which they relate and are
reported accordingly.
2 OPERATING LEASE
The Company has various operating leases for office facilities,
guesthouse and residential premises of employees that are renewable on
a periodic basis, and cancelable at its option. Rental expenses for
operating leases included in the financial statements for the year are
Rs.29,285,271/- (Previous year Rs.17,045,961/-).
3 INITIAL PuBLIC OFFERING (IPO)
During the half year ended 30th September 2011 the company has raised
funds amounting to Rs. 2,269,999,872/- through an Initial Public Offer
by filing prospectus with SEBI through a book building process. The
shares of the company was issued at the premium of Rs.246/- having face
value of Rs.10 each. All the Issue Related Expense have been debited to
Share Premium Account to Rs. 139,082,279/-.
Consequent to a Special Resolution passed at the Extra ordinary General
Meeting held on 17th January 2011, the Company converted to a Public
Limited Company. Accordingly, in terms of the expert opinion obtained
by the Company, the appointments of the Managing director, Jt Managing
director and Director- Technical are deemed to be appointments u/s
Section 269 of the Companies Act 1956 and the remuneration payable to
the aforesaid directors for the period 17- Jan-2011 and onwards through
the respective tenure of appointment, is governed by Clause (C) of
Section II of Part II of Schedule XIII of the Companies Act 1956 and
until the company turns into listed public company, approval of the
Central government would not be required thereto in terms of the
amendment to schedule XIII of the Companies Act ,1956 vide Notification
number GSR .70(E) dated 8th February 2011.
The company turned into a listed public company w.e.f September 8, 2011
consequent to its equity capital being listed on the BSE and NSE
pursuant to an Initial public offering by the company. Accordingly, the
company has filed applications seeking approval of the Central
Government for payment of remuneration as above, to the managing
Director, Jt. managing director and Director - Technical. However,
provision has been made in the books of accounts relating to the
remuneration as above payable to the managing Director, Jt. Managing
Director and Director - Technical for the fiscal 2012, in terms of the
respective terms of appointment amended from time to time. Further, the
Jt. Managing Director is also the Managing Director of the wholly owned
subsidiary of the company accordingly the remuneration payable shall be
in terms of Section III of Schedule XIII of the Companies Act, 1956.
4 PREVIOUS REPORTING PERIOD
Previous reporting period''s figures have been regrouped wherever
required in conformity with the presentation for the current reporting
period.
Mar 31, 2011
1. 31.03.2011(Rs.) 31.02.2010(Rs.)
Contingent Liabilities etc.:
i. Estimated amount of contracts
remaining to be executed on Capital
Account and not provided for
(net of advances) 78,916,794 -
ii. Guarantees, Counter Guarantees
given on Imports and Sale Contract
etc. (net of margins held by bank) 1,055,047,279 829,048,472
iii. Corporate Guarantee issued to
the bankers of the subsidiary
company 3,790,000,000 3,790,000,000
iv. Corporate Guarantee issued on
behalf of subsidiary company. 450,040,508 450,040,508
v. Outstanding Bills discounted
under Letter of Credit 81,577,318 -
2. Operational Lease
The Company has various operating lease for office, transit house and
residential premises for employees that are renewable on a periodic
basis, and cancelable at its option. Rental expenses for operating
lease included in the Income Statement for the year is Rs.17,045,961/-
(Previous Year Rs.15,346,913/-).
3. Segment Reporting
the company''s operation comprises of Manufacturing business & Project
Business. Primary segmental reporting comprises of Manufacturing
Business & Project Business Segments. Secondary Segmental reporting is
based on geographical location of Activities. Under primary segment
revenue and direct expenses, which relate to a particular segment and
which are identifiable, are reported under that segment.
Certain expenses, which are not allocable to an-/ specific segment, are
separately disclosed at the enterprise level. Cash and bank balances in
India are reported at the enterprise level as the company operates
common bank accounts. Fixed assets, Liabilities, Current assets and
Current liabilities relating to specific business segments are
identified and reported. Those that are not identifiable are reported
as common items. Secondary segment is reported based on the
geographical location of the company, viz., India and Japan. Revenues
in the secondary segment are based on the sales made by the branch
office. Inter-segmental purchases & sales are separately identified and
reported. Fixed assets, Current Assets including Cash and Bank
accounts, and Current Liabilities are identified based on the branch
office to which they relate and are reported accordingly.
4. Deferred Tax Liability is calculated in accordance with AS 22, and
the net tax liability for the year is debited to Profit & Loss Account.
5. Disclosure in terms of Accounting Standard 29, on Provisions,
Contingent Liabilities & Contingent Assets.
Consequent to a Special Resolution passed at the Extra ordinary General
Meeting held on 17th January 2011, the Company converted to a Public
Limited Company. In terms of the opinion obtained by the company the
existing appointments are deemed to be appointments u/s Section 269 of
the Companies Act 1956 and the remuneration payable to the aforesaid
directors for the period 17-Jan-2011 to 31- Mar-2011 amounting to Rs.
16,912,549/- is governed by Clause (C) of Section II of Part II of
Schedule XIII of the Companies Act 1956 and as specified the
remuneration paid as above were approved by the Remuneration Committee
of the Board at it''s meeting held on 15th March 2011 and is subject to
approval of the Shareholders.
6. Based on availability and subject to its captive requirements, the
company makes available its technical, marketing and financial
personnel on chargeable basis to its subsidiary company M/s DF POWER
SYSTEMS PRIVATE LIMITED, for execution of projects undertaken by the
said subsidiary company. The value of this transaction was Rs.
30,782,480/- (Previous Year Rs.25,481,038/-)- The company has been
advised that the same would not be covered by Section 297 of the
Companies Act 1956.
7. Department of Income Tax (TDS Circle) have issued demand notice
under section 201(l)/201(la) of the Income Tax act, based on tax
payer''s data reflected in the computer system of the department for
Short deduction / Short payments and interest thereon, for the
financial years 2006-07, 2007-08, 2008-09 amounting to Rs.31,391,530/-
including Rs.9,096,720/- towards interest on such short
deduction/payment under Forms 27EQ, 26Q & 24Q. The company has
preferred an appeal against the demand notice for an amount of Rs.
31,377,260/- and rectification thereon.
8. Disclosure under The Micro, Small & Medium Enterprises Development
Act, 2006 in respect of establishments considered as Micro, Small &
Medium Enterprise based on the information made available by the
Suppliers.
9. Consequent to the announcement by the ICAI in 2005, following are
the disclosures as required for the derivative instruments on hedging
foreign currency exposures.
10. Disclosure requirement of AS-15 Revised (2005) "Employee Benefits"-
Defined Contribution Plan
11. All the expense related to proposed capital rising is grouped
under pre-paid expenses.
12. Figures in brackets refer to previous year ended 31st March 2010
and are re-grouped wherever necessary to conform to the presentation of
the current year accounts and have been rounded off to the nearest
Rupee.
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- Product Mix
- Banker/Auditor/Registrar
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Company History
- BSE Price History
- NSE Price History
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TD Power Systems Ltd. Key Financial Ratios
- Ratios
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TD Power Systems Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
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TD Power Systems Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
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TD Power Systems Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
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TD Power Systems Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
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