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Sundaram Brake Linings Ltd.

BSE: 590072 Sector: Auto
NSE: SUNDRMBRAK ISIN Code: INE073D01013
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VOLUME 10
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Sundaram Brake Linings Ltd. (SUNDRMBRAK) - Director Report

Company director report

Your Directors have pleasure in presenting the Forty Eighth AnnualReport of the Company together with Audited Accounts for the year ended 31st March 2022.

FINANCIAL RESULTS:

The financial performance of your company is stated hereunder:

( Rs in lakhs)

Particulars 2021-22 2020-21
Revenue from Operations 29520.03 23684.70
Profit before exceptional item interest depreciation and tax 566.77 878.72
Less : Interest 180.72 106.49
Profit before exceptional item depreciation and tax 386.05 772.23
Less : Depreciation 599.15 562.38
Profit / (Loss) before tax and exceptional items (213.10) 209.85
Add : Exceptional item:
(i) Reversal of liability towards contract with customers -
Rs 433.33 lacs 226.37 -
(ii) Additional depreciation on tools due to change in useful life -
Rs (-)206.96 lacs
Profit before tax 13.27 209.85
Less : Provision for Taxation
Current Tax 2.07 35.02
Prior Period Tax - (421.38)
Deferred Tax Liability / (Asset) (net) 3.43 (3.89)
Profit after tax 7.77 600.10
Add : Surplus / (Deficit) brought forward 2087.93 1487.84
Less : Transfer to Other Comprehensive Income - -
Surplus Carried over 2095.70 2087.94

DIVIDEND

In the year under review your Company saw strong demand across allsegments and achieved 26% sales growth compared to the prior year.

Profitability was however significantly impacted by the unprecedentedprice rise in key Raw Materials like Phenol Glass Fibre etc despite passing through someof these increases to our Customers .

With the unrelenting increase in raw material and energy costs alooming US led global recession and escalating supply chain disruptions drivingsignificant business uncertainty your directors are constrained to skip dividends for theyear. Various steps are being taken however to improve the performance of the Company.

CHANGES IN PROMOTERS OF THE COMPANY

The members of the TVS Family had entered into a Memorandum of FamilyArrangement ("MFA") dated 10th December 2020 in order to align and synchronizethe ownership / control over various companies/ businesses with the management of therespective companies as is being currently done by the respective branches/ subbranchesof the TVS Family. In the context of the above a Composite Scheme of Amalgamation andArrangement ("Scheme") under sections 230 to 232 of the Companies Act 2013 wasfiled with Hon'ble National Company Law Tribunal Chennai Bench ("NCLT") and anorder was pronounced on 6th December 2021 sanctioning the Scheme by the NCLT. The Schemewas made effective on January 6 2022 ("Effective Date").

Consequent to the same and with effect from 4 February 2022 the SBLBusiness Undertaking of the T V Sundram Iyengar & Sons Pvt Ltd (TVSS) including1285290 equity shares representing 32.67% equity shares of Sundaram Brake Linings Ltdwas as a result of the demerger from TVSS transferred to and vested upon to MaduraiAlagar Enterprises Pvt Ltd. Consequent to the above Madurai Alagar Enterprises Pvt Ltdhas become the Promoter company of Sundaram Brake Linings Ltd.

AUTOMOBILE INDUSTRY SCENARIO-2021-22

India enjoys a strong position in the global heavy vehicles market asthe largest manufacturer of tractors second- largest bus manufacturer and third-largestheavy truck manufacturer. The industry's annual production volume was 229.14 lakh unitsand sales volume was 231.16 lakh units for the year 2021-22 as compared to 226.52 lakhunits and 227.45 lakh units in the previous financial year a growth of only 1.0% inproduction volume and 2% in sales volume.

The Indian automotive industry is however expected to record stronggrowth in 2022-23 recovering from CoVID-19 caused slow downs. Electric vehiclesespecially two-wheelers are likely to witness significant increases in sales in 2022-23and the entire industry is expected to grow to US Rs 300 billion by 2026.

SBL'S SALES PERFORMANCE

Your company's net sales during the year 2021-22 increased by 26% at Rs292.63 crores compared to Rs 232.94 crores the prior year. Domestic sales increased by 21%and export sales by 32%. This growth was possible due to measures taken to mitigate theimpact of severe challenges in supply chain logistics & shipment delays for import ofRaw Materials and container shortages for export in the year under review.

DOMESTIC

Your company's 14% sales growth in the OEM segment is due to its statusas either the single or major source of frition for most CV manufacturers with itsproducts homologated in 2019-20 for almost all BS VI compliant vehicles. This has beenpossible to maintain as both product performance chracteristics and quality meet or exceedstrict OE specifications and parameters. Strong growth in OE segment is expected tocontinue in the coming years.

The aftermarket segment growth of 38% was a result of both increasedfocus in the segment post CoVID and the conscious decision to prioritize growth there.

EXPORTS

Export segment sales continued to be robust with growth clocking in at32% and helped your company to sustain performance in this segment.

Net Foreign Exchange earned by your company in the year under reviewwas Rs 62.64 crores as against Rs 63.74 crores in 2020-21.

Your company continues to retain its two-star export house status inaccordance with the provisions of Foreign Trade Policy 2015-2020 with a certificateissued by the Director General of Foreign Trade Chennai for a period of five years from9th March 2018 to 8th March 2023. This focus on high quality exports from the inceptionof your company was recognized by the Export Excellence Award for its Plant V in MahindraCity.

OUTLOOK FOR 2022-23

The Indian Economy is expected to grow 7.5% to 8% in 2022-23 and itsautomotive industry has attained the pre-pandemic levels of sales volume in FY2021-22having built a solid foundation in 2021 despite the semiconductor shortage hamperingproduction.

With the expected buoyancy in economic growth the automobile sector isexpected to do well in FY 2022-23. This expectation however can be easily confounded byrising crude oil prices and commodity prices due to excessive money injection into the USeconomy the conflict in the Ukraine and rising domestic inflation. Steep increase in keyraw materials prices and resultant strain on profitability and wage demands are majorconcerns in the months to come.

RESEARCH AND DEVELOPMENT

Your Company's R&D facility located in Padi has been recognized asan approved R&D unit by the Department of Scientific & Industrial Research (DSIR)Ministry of Science & Technology Government of India New Delhi and the recognitionhas been renewed up to 31.03.2024.

During the year under review the focus of the department was onincreasing capacity in CV linings and new product development in the motorcycle market fornew and existing customers. Efforts for energy costs optimization continued in the yearunder review.

The total expenditure for R&D incurred in 2021-22 was Rs 7.14crores as against Rs 7.07 crores in the previous year.

SHARE CAPITAL

During the year under review your Company has not issued any type ofShares. Hence there is no change in the share capital of the Company.

TRANSFERS TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to Section 124 of the Companies Act 2013 ("theAct") read with the Investor Education and Protection Fund Authority (AccountingAudit Transfer and Refund) Rules 2016 ("The Rules") all unpaid or unclaimeddividends are required to be transferred by the Company to the Investor Education andProtection Fund (IEPF) established by the Central Government after completion of sevenconsecutive years from the date of transfer of such amount to unpaid dividend account.Further according to the Rules the shares in respect of which dividend has not been paidor claimed for seven consecutive years or more shall also be transferred to the demataccount of IEPF Authority.

During this year no shares / amounts were liable to be transferred tothe IEPF authority. Further Members/ claimants whose shares and / or unclaimed dividendwhich have been transferred pertaining to the earlier financial years to the IEPF DematAccount or the Fund as the case may be may claim the shares or apply for refund ofdividend by making an application to the IEPF Authority in Form IEPF-5 (available on http://www.iepf.gov.in) along with requisite fee as decided by the IEPF Authority from timeto time.

PUBLIC DEPOSITS

Your Company has neither accepted nor renewed any deposits from publicwithin the meaning of Section 73 of the Companies Act 2013 read with Companies(Acceptance of Deposits) Rules 2014 during the year.

CASH FLOW STATEMENT

In compliance with the provisions of Section 134 of Companies Act 2013and Regulation 34(2)(c) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Cash flow statement for the financial year ended 31st March 2022forms part of this Annual Report.

BOARD MEETINGS

The Board of Directors met 5 (five) times during the financial yearended 31st March 2022. i.e. 22nd May 2021 12th August 2021 13th November 2021 27thJanuary 2022 and 5th February 2022. The gap between the Board meetings was within themaximum period prescribed under the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and as amended and notified from time to time.Detailed statement of attendance of directors at the Board Meetings and other meeting ofall Committees held during the financial year ended 31st March 2022 are given in theCorporate Governance report which is forming part of this Annual Report.

PASSING OF RESOLUTION BY CIRCULATION

During the financial year there was no resolution passed by the Boardof Director or Committees of the Board. CHANGE IN DIRECTORS AND KEY MANAGERIALPERSONNEL:

i. CHANGE IN DIRECTORS - APPOINTMENT CHANGE IN DESIGNATION ANDRESIGNATION RE-APPOINTMENT

During the financial year Mr. Krishna Mahesh was reappointed as theManaging Director of the Company for a term of 3 years with effect from 6th February 2022with the approval of the shareholders of the company through the Postal Ballot process andremote e-Voting.

RETIREMENT BY ROTATION AND RE-APPOINTMENT

Pursuant to Section 152(6)(c) of Companies Act 2013 during thefinancial year Ms. Shobhana Ramachandhran Non-Executive Director of the Company beingliable to retire by rotation retired by rotation at the 47th Annual General Meeting ofthe Company held on 11th August 2021 and being eligible was re-appointed.

Further Pursuant to Section 152(6)(c) of Companies Act 2013 Mrs.Shripriya Mahesh Ramanan Non-Executive Director of the Company who retires by rotationand being eligible for re-appointment offers herself for re-appointment as a Director ofthe Company and the same is being placed before the 48th Annual General Meeting forapproval of shareholders of the Company.

ii. CHANGE IN KEY MANAGERIAL PERSONNEL

During the financial year ended 31st March 2022 there were no changesin Key Managerial personnel in the Company.

AUDIT COMMITTEE

Pursuant to Section 177(8) of Companies Act 2013 the Company hasconstituted an Audit Committee. The particulars of composition of the Audit Committeemeetings held during the year and other particulars have been detailed in the CorporateGovernance Report forming part of this Annual Report.

DETAILS OF RECOMMENDATIONS OF AUDIT COMMITTEE WHICH WERE NOT ACCEPTEDBY THE BOARD ALONG WITH REASONS

The Audit Committee generally makes certain recommendations to theBoard of Directors of the Company during their meetings held to consider any financialresults (Unaudited and Audited) and such other matters placed before the Audit Committeeas per the provisions of Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 from time to time. During the year the Board of Directorshas considered all the recommendations made by the Audit Committee and has accepted andcarried on the recommendations suggested by the Committee to its satisfaction. Hence thereare no recommendations which were unaccepted by the Board of Directors of the Companyduring the year under review.

MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to Regulation 34(2) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 read with Schedule - V thereof the ManagementDiscussion and Analysis report has been annexed to the Board's Report as ANNEXURE - IV andforms a part of the Annual Report.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Company has received declarations from all the IndependentDirectors who are occupying the Board as on the end of financial year 2021-22 confirmingthat they continue to meet the criteria of Independence as prescribed under Section 149(6)of the Companies Act 2013 and Regulation 25 & 16 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and amendments made under there at. The formatof the said Disclosure is given as ANNEXURE V which forms part of this AnnualReport.

NOMINATION AND REMUNERATION POLICY

The Company believes that a diverse and inclusive culture is integralto its success. A diverse Board among others will enhance the quality of decisions byutilizing different skills qualifications professional experience and knowledge of theBoard members necessary for achieving sustainable and balanced development. Accordinglythe Board based on the recommendation of the Nomination and Remuneration Committee hasformulated a policy on Director's appointment remuneration of Directors Key ManagerialPersonnel and Senior Management of the Company. The policy covers the appointmentincluding criteria for determining qualification positive attributes independence andremuneration of its Directors Key Managerial Personnel and Senior Management Personnel.The key highlights of the policy forms part of this Report. The entire Nomination andRemuneration Policy may be accessed on the Company's website at www.tvsbrakelinings.com.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy establishing vigilmechanism to provide a formal mechanism to the Directors and employees to report theirconcerns about unethical behavior actual or suspected fraud or violation of the Company'sCode of Conduct or ethics policy. The Policy provides for adequate safeguards againstvictimization of employees who avail the mechanism and also provides for direct access tothe Chairman of the Audit Committee. It is affirmed that no personnel of the Company havebeen denied access to the Audit Committee. The policy of Vigil mechanism is available onthe Company's website www.tvsbrakelinings.com. No complaint has been received fromany employee since inception of the vigil mechanism.

MATERIAL CHANGES & COMMITMENTS

There are no material changes and commitments affecting the financialposition of the Company which have occurred between the end of the financial year (FY2021-22) of the Company to which the financial statements relate and date of the report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Sections 134(3) (c) and 134(5) of theAct in relation to the audited financial statements of the Company for the year endedMarch 31 2022 the Board of Directors hereby confirms that:

1. in the preparation of the annual accounts the applicable accountingstandards have been followed along with proper explanations relating to materialdepartures wherever applicable;

2. the Directors have selected such accounting policies and appliedthem consistently and made judgements and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of your Company as at 31st March2022 and of the profit of your Company for the year ended on that date;

3. the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of your Company and for preventing and detecting fraud andother irregularities;

4. that they had prepared the annual accounts on a going concern basis;

5. the Directors have laid down internal financial controls to befollowed by your Company and that such internal financial controls are adequate and areoperating effectively; and

6. the Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.

INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THESUBSIDIARIES / ASSOCIATES / JV AND INFORMATION ABOUT SUBSIDIARY / JV / ASSOCIATE COMPANY

There are no Subsidiary or Associate Company or JV companies and hencethese disclosures are not applicable.

ANNUAL RETURN

The Annual Return of the Company as on 31st March 2022 in Form MGT - 7in accordance with Section 92(3) of the Act read with the Companies (Management andAdministration) Rules 2014 is available on the website of the Company at https://tvsbrakelinings.com/images/assets/pdf/Draft%20Annual%20Return%2031.03.2022.pdf

STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of Companies Act 2013 readwith the Companies (Audit and Auditors) Rules 2014 as amended M/s. Brahmayya & CoChartered Accountants Chennai having Firm Registration Number 000511S were StatutoryAuditors of your Company for a term of 5 years from the 43rd Annual General Meeting of theCompany till the conclusion of 48th Annual General Meeting.

The Annual Accounts of the Company including its Balance SheetStatement of Profit and Loss and Cash Flow Statement including the Notes and Schedules tothe Accounts have been audited by M/s. Brahmayya & Co Chartered Accountants Chennai.The Independent Auditors' Report given by the Auditors on the financial statements of theCompany is forming part of the Annual Report. There has been no qualificationreservation adverse remark or disclaimer given by the Auditors in their Report whichrequires any explanation / comments by the Board.

Pursuant to the provisions of Section 139 of Companies Act 2013 readwith the Companies (Audit and Auditors) Rules 2014 as amended an ordinary resolutionseeking re-appointment of M/s. Brahmayya & Co Chartered Accountants Chennai havingFirm Registration Number 000511S as Statutory Auditors of the Company for the second termof 5 consecutive years from 48th Annual General Meeting of the Company till the conclusionof 53rd Annual General Meeting.

SECRETARIAL AUDITORS

Pursuant to the Section 204(1) of the Companies Act 2013 read withRule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the Board of Directors had appointed M/s. V. Suresh Associates Practicing CompanySecretaries Chennai as the Secretarial Auditors of the Company for conducting theSecretarial Audit for the financial year 2021-22. The Secretarial Audit Report for theFinancial Year 2021-22 does not contain any adverse remark qualification or reservationor disclaimer which requires any explanation / comments by the Board. The SecretarialAudit Report is forming part of this Annual Report.

M/s. V. Suresh Associates Practicing Company Secretaries Chennai hasbeen re-appointed as the Secretarial Auditors of the Company for conducting theSecretarial Audit for the financial year 2022-23 at the meeting of Board of Directors heldon 27th May 2022.

INTERNAL AUDITORS

Pursuant to Section 138 of the Companies Act 2013 read with rule 13 ofthe Companies (Accounts) Rules 2014 and all other applicable provisions (including anyamendment thereto) if any of the Companies Act 2013 M/s. Sundaram and SrinivasanChartered Accountants Chennai are the Internal Auditors of the Company who wereoriginally appointed in the Board meeting held on 4th Aug. 2017. They have been carryingout their Audit as per the Plan submitted to and approved by Audit Committee.

The audit conducted by the Internal Auditors is based on an internalaudit plan which is reviewed each quarter in consultation with the Audit Committee. Theseaudits are based on risk based methodology and inter alia involve the review of internalcontrols and governance processes adherence to management policies and review ofstatutory compliances. The Internal Auditors share their findings on an ongoing basisduring the financial year for corrective action. The Audit Committee oversees the work ofInternal Auditors.

COST AUDIT

Cost Audit is not applicable to the Company from the Financial Year2014-15 based on the amended Companies (Cost Audit & Record) Rules 2014 dated 31stDecember 2014 issued by the Ministry of Corporate Affairs Govt. of India.

QUALIFICATIONS IN AUDIT REPORTS

There are no qualifications in Statutory Auditors' Report and inSecretarial Auditors' Report.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS

The auditors of the Company have stated that during the course of theiraudit there were no material fraud by the Company or on the Company by its officers oremployees noticed or reported in Independent Auditors' Report which forms part of thisReport. Hence no requirement arises to report the same to Audit Committee or Board ofDirectors of the Company.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS

During the Financial Year 2021-22 your Company has complied withapplicable Secretarial Standards namely SS-1 & SS-2 issued by the Institute ofCompany Secretaries of India.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO

A. CONSERVATION OF ENERGY

(a) Energy conservation measures taken during 2021-22:

• Replacing plant-scale furnace oil fired thermopacs withindividual electrically powered mould heating to proactively address rising furnace oilprices and emissions.

• Redesign of layout / regrouping of machines / redesign resizingof machines being continued to reduce the usage of power & manpower.

(b) Impact of the above measures:

The measures taken above have helped in reducing fuel cost for themachines under implementation and would continue to help in reducing the overall energycost for SBL in the years to come.

B. TECHNOLOGY ABSORPTION Research & Development (R&D)

(1) Specific areas in which R&D carried out by the Company

• Benchmarked developed and commercialized Drum Brake Linings forMedium & Heavy Commercial Vehicle applications for domestic Aftermarket.

• Developed two-wheeler insitu bonded shoes for Export two wheelertaxi application.

• Developed low-copper (B level) & copper-free (N-level) discpads for Heavy Commercial Vehicle Export application to meet upcoming Regulatoryrequirements.

• Developed friction discs for Agricultural Tractor Wet Brake (OilImmersed Brake) applications.

(2) Benefits derived as a result of the above

• Continued recognition of in-house R&D by Department ofScientific and Industrial Research (DSIR) Government of India.

• Obtained approval and commercialized Passenger Car drum brakelinings for OEM application.

(3) Future Plan of action:

• Development of Disc pads and Drum brake linings for variouspassenger and commercial vehicle applications in Domestic OEM & Export Markets.

• Development of Woven Clutch Facings for commercial vehicleapplications in Domestic OEM & Export Markets.

• Development of specialized resins with improved thermalstability for various product applications.

• Reduction in Raw material costs through upgradation in qualityyield improvement and development of alternative sources.

(4) Expenditure on R&D

( Rs in Lakhs)

S. No Particulars Financial Year 2021-22
a Capital 5.50
b Revenue 708.38
c Total 713.88
d Total R & D expenses as % of total turnover 2.4%

C. TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION:

1. Efforts in brief made towards technology absorption adaptation andinnovation:

• Process optimization for Quality Improvement through ThermoElectric Heating System (TEHS) - each curing mould is closely controlled by individualheating system in place of centralized heating system.

• Product and Process improvement by benchmarking the productagainst global leaders.

2. Benefits derived as a result of the above efforts:

• Development of superior and competitive products for Export andDomestic markets.

• Quality upgradation and optimal use of resources leading tosavings.

D. FOREIGN EXCHANGE EARNINGS AND OUTGO

( Rs in Lakhs)

S. No Particulars Financial Year
2021-22 2020-21
A Foreign Exchange earned 11479.47 9726.90
B Foreign Exchange used 5215.10 3353.30
C Net Foreign Exchange earned (A-B) 6264.37 6373.60

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS ORCOURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

During the year 2021-22 there have been no significant and materialorders passed by the Regulators or Courts or Tribunals impacting the going concern statusand company's operations in future.

REPORT AS PER SECTION 134 READ WITH RULE 8 AND SUB RULE 5 OF COMPANIES(ACCOUNTS) RULES 2014

Change in nature of business if any: Nil

Name of Companies which have become or ceased to be its subsidiariesJoint Ventures or associate companies during the year: Not Applicable

INTERNAL CONTROL AND SYSTEMS AND THEIR ADEQUACY

The Company has an adequate internal control system which iscommensurate with the size scale and complexity of its operations. The Internal Auditormonitors and evaluates the efficacy and adequacy of internal control system in theCompany its compliance with operating systems accounting procedures and policies at alllocations of the Company. Based on the report of internal audit function process ownersundertake corrective action in their respective areas and there by strengthen thecontrols. A report of Auditors pursuant to Section 143(3) (i) of the Companies Act 2013certifying the adequacy of Internal Financial Controls is annexed with the IndependentAuditors' Report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

During the year the Company has not given any loan (Secured orUnsecured) or guarantees covered under the provision of Section 186 of the Companies Act2013. The details of the investments made by the Company are given in the notes to thefinancial statements which form part of this Annual Report.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

The Company firmly provides a safe supportive and friendly workplaceenvironment - a workplace where our values come to life through the underlying behaviours.Positive workplace environment and a great employee experience are integral parts of ourculture.

No woman employee has been engaged by the Company. Hence the complianceunder the provisions of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 does not arise.

RISK MANAGEMENT AND POLICY

Pursuant to Section 134(3)(n) of the Companies Act 2013 the Companyhas framed Risk Management Policy which lays down the framework to define assessmonitor and mitigate the business operational financial and other risks associated withthe business of the Company.

All the risks associated with the business of the Company have beentaken care of by taking adequate measures by the Company which have been reviewed by theAudit committee and the Board in their meetings held from time to time.

The Company has been addressing risks impacting the Company inManagement Discussion and Analysis Report which forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In compliance with the requirements of Section 135 and Schedule VII ofthe Companies Act 2013 read with the Companies (Corporate Social Responsibility Policy)Rules 2014 as amended the Board of Directors have framed a policy on CSR as recommendedby the CSR committee duly constituted and the said policy is available on the Company'swebsite https://www.tvsbrakelinings.com/images/assets/pdf/SBL%20CSR%20Policy.pdf.

The composition and terms of reference of the CSR Committee aredetailed in the Corporate Governance Report which forms part of this Annual Report.

The disclosure on Corporate Social Responsibility initiatives duringthe financial year has been provided in ANNEXURE - III which forms part of thisAnnual Report.

RELATED PARTY TRANSACTIONS

During the financial year all the related party transactions enteredby the Company were ordinary business transactions in the ordinary course of business andon arm's length basis and there were no transactions requiring approval of theShareholders. However prior approval of the Audit Committee was sought for entering intothe Related Party Transactions as required under Companies Act 2013 read with rules madethereunder and Regulation 23 (2) of SEBI Listing Regulations 2015. Further the detailsof Related Party Transactions entered into by the Company pursuant to each of the omnibusapprovals given are also placed before the Audit Committee for its review on a quarterlybasis.

During FY 2021-22 there were no material related party transactions interms of Regulation 23 of the SEBI Listing Regulations 2015.

Form AOC-2 pursuant to Section 134 (2) (h) of the Companies Act 2013read with Rule 8 (2) of the Companies (Accounts) Rules 2014 is set out the ANNEXURE -II to the report.

The Company has adopted a policy on materiality of related partytransactions and dealing with Related Party Transactions and the same is disclosed on thewebsite of the Company viz. www.tvsbrakelinings.com

JUSTIFICATION FOR ENTERING INTO RELATED PARTY TRANSACTIONS

The Company's Related party transactions have been made to meet therequirements of operations and at an arm's length basis and have been entered in theordinary course of business.

BOARD EVALUATION

In terms of Section 134 (3) (p) of the Companies Act 2013 andRegulation 4(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board reviewed and evaluated its own performance from the followingperspectives:

(a) Company Performance;

(b) Risk management;

(c) Corporate Ethics;

(d) Performance of the Individual Directors; and

(e) Performance of the Committees viz. Audit Committee Nominationand Remuneration Committee (NRC) and Corporate Social Responsibility Committee &Stakeholders' Relationship Committee (SRC).

The Board has carried out an annual evaluation of its own performancethe directors and also Committees of the Board based on the guidelines formulated by theNomination & Remuneration Committee under Self-evaluation method. Board compositionquality and timely flow of information frequency of meetings and level of participationin discussions were some of the parameters considered during the evaluation process.

The Board upon evaluation considered that the Board is well balancedand diverse and is commensurate with the business profile and size of the Company.

The Board reviewed and noted with satisfaction of its own performanceand that of its Committees and individual Directors.

RATIO OF REMUNERATION OF DIRECTOR

The information as required under the provisions of Section 197(12) ofthe Companies Act 2013 and read with Rule 5(1) 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are set out in ANNEXURE- I which forms part of this Annual Report

PARTICULARS OF EMPLOYEES

No employee of the Company was in receipt of remuneration of not lessthan Rs 1.02 crores during the year or Rs 8.50 lakhs per month during any part of the saidyear as per Section 197 of the Companies Act 2013 read with Rule 5 (2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.

COMPLIANCE WITH CODE OF CONDUCT

The Company has framed a Code of Conduct for the Board of Directors andSenior Management personnel of the Company. The Code of Conduct is available on theCompany's website www.tvsbrakelining.com. All the Board of Directors and seniormanagement personnel have affirmed compliance with the Code of conduct as on 31st March2022.

As required under Regulation 34(3) and Schedule V (D) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a declaration from Mr. KrishnaMahesh Managing Director to this effect is annexed to the Report on corporate governancewhich forms part of this Annual Report.

LISTING OF SHARES

The equity shares of the Company are listed on the Stock Exchange viz.National stock exchange of India Ltd (NSE). The Company was paid the applicable listingfees to the Stock Exchange within the stipulated time for the financial year 2021-22.

CORPORATE GOVERNANCE

Your company has taken adequate steps to adhere to all the conditionslaid down in SEBI (Listing obligations and disclosure requirements) regulations 2015 withrespect to Corporate Governance. Pursuant to Regulation 34(3) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 read with Schedule-V thereofthe report on Corporate Governance has been furnished in the Annual Report and forms partof the Annual Report.

A Certificate from the Statutory Auditors of the Company confirming thecompliance of conditions of Corporate Governance as stipulated in SEBI (Listingobligations and disclosure requirements) regulations 2015 forms part of this AnnualReport.

The Managing Director and the Chief Financial officer of the Companyhave certified to the Board the financial statements and other matters in accordance withthe Regulation 17(8) of the SEBI (Listing obligations and disclosure requirements)regulations 2015 pertaining to CEO/CFO certification for the financial year ended 31stMarch 2022 and the same is enclosed as part of Annual Report.

PERSONNEL

Employee relations have been very cordial during the financial yearended 31st March 2022. The Board wishes to place on record its appreciation to all theemployees in the Company for their sustained efforts and immense contribution to the highlevel of performance and growth of the business during the year.

ACKNOWLEDGEMENT

Your Directors wish to thank State Bank of India and ICICI Bank Limitedfor their continued support and assistance.

Your Directors wish to thank all the Customers the wholesalers both inIndia and worldwide for their continued support.

Your Directors wish to place on record their sincere appreciation forthe good work of all the employees of the Company.

For and on behalf of the Board
KRISHNA MAHESH K S D SAMBASIVAM
Place: Chennai Managing Director Director
Date : 27th May 2022 (DIN: 00420048) (DIN: 01937321)

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