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 — 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 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 (“ECL”) 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 ‘simplified 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 (“Intermediaries”), 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 (“Ultimate
Beneficiaries”) 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 (“Funding Parties”), 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 (“Ultimate
Beneficiaries”) 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 (”ESOPs) and 3,99,216 employee stock appreciation rights (”ESARs”) to the eligible employees of the Company
and/or its Subsidiary Company(ies) under its TDPSL Equity Based Compensation Plan 2019 ("Plan”).
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 “Exceptional items” 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 (“MCA”) 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
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