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Tube Investments of India Ltd.

BSE: 540762 Sector: Others
NSE: TIINDIA ISIN Code: INE974X01010
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OPEN 1360.00
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VOLUME 1462
52-Week high 1545.00
52-Week low 543.00
P/E 61.04
Mkt Cap.(Rs cr) 26,798
Buy Price 0.00
Buy Qty 0.00
Sell Price 1391.10
Sell Qty 4.00
OPEN 1360.00
CLOSE 1359.90
VOLUME 1462
52-Week high 1545.00
52-Week low 543.00
P/E 61.04
Mkt Cap.(Rs cr) 26,798
Buy Price 0.00
Buy Qty 0.00
Sell Price 1391.10
Sell Qty 4.00

Tube Investments of India Ltd. (TIINDIA) - Director Report

Company director report

Dear Shareholders

The Directors take pleasure in presenting the 13th AnnualReport together with the audited financial statements of the Company for the year ended 31stMarch 2021.

1. Business Environment

Outbreak of the COVID-19 pandemic in early 2020 and the sharpresurgence of the pandemic again in the recent months of 2021 even as the situationappeared to be kept under good control in the form of a more serious and devastatingsecond wave have come to pose an unprecedented global crisis of a scale never witnessedbefore in the annals of the history of mankind. Measures to contain rapid spread of thepandemic through the imposition of lockdowns/lockdown like restrictions while helping instemming the spread of the pandemic to a large extent have at the same time appliedbrakes on economic activity with serious implications to consumption and investment. Theimpact is well evident as India's Gross Domestic Product (GDP) contracted by 7.3% in2020-21 as per the provisional National Income estimates released by the NationalStatistical Office recently. The Gross Value Added (GVA) in the economy shrank 6.2% in2020-21 compared to an increase of 4.1% in the previous year. While this is the bleakestperformance on record for the economy the fourth quarter of 2020-21 helped in repairingthe damage with a higher than expected growth of 1.6% in the GDP. This marked the secondquarter of positive growth after the country entered a technical recession in the firsthalf of the year. With a lower contraction in the GDP as well GVA in 2020-21 the sharprecovery projected for 2021-22 for the Indian economy by a number of agencies like theInternational Monetary Fund at 12.5% and the Reserve Bank of India at 10.5% may appeardifficult at this point as the scourge of the Novel Coronavirus has returned to hurt andblunt economic activity once again.

Although the global economic output is recovering from the collapsetriggered by the COVID-19 pandemic it appears that it will remain below pre-pandemictrends for a prolonged period of time. The pandemic has exacerbated the risks associatedwith a decade-long wave of global debt accumulation. As per the World Economic Updateissued by the World

Bank although the recent vaccine approvals have given rise to hopes ofa turnaround in the pandemic situation later this year renewed waves and new variants ofthe Coronavirus pose concerns for the outlook. Amid exceptional uncertainty the globaleconomy is projected to grow 5.5% in 2021 and 4.2% in 2022.

For the Indian automotive industry which accounts for nearly half ofthe manufacturing GDP of the country the year 2020-21 was an exceptional one for thewrong reasons. The industry was replete with and staring at a series of problems onebigger than the other that affected production productivity and sales. Even as the yearstarted in the backdrop of a very long slowdown still looming large the industry was awitness to a further list of bigger problems like economic uncertainty transition toBS-VI the pandemic and the resultant lockdown constraints in supply chain and themigration of labour.

As per the Society of Indian Automobile Manufacturers (SIAM) the apexautomobile body in the country all segments of the Indian auto sector witnessed ade-growth in sales during 2020-21 with passenger vehicles (PVs) witnessing a CAGR of-6.2% commercial vehicles (CVs) at -12.8% three wheelers (3Ws) at -30.2% andtwo-wheelers (2Ws) at -9.2%.

As the country is still trying its best to navigate through thisunparalleled crisis the Government and the Reserve Bank of India are taking wellcalibrated measures to support a robust economic recovery. The Union Budget 2021 was onegood example of the initiatives of the Government in focusing on regaining the growthmomentum in the economy through several measures including keeping the tax rates stableand enhancing investments in infrastructure.

2. Standalone Financial Highlights

(Rs in Cr.)
Particulars 2020-21 2019-20
Sale of Products 4026.23 4052.67
Profit Before Exceptional Items 380.71 420.72
and Tax
Profit on Shares tendered under - 19.11
Buyback Scheme
Provision for Employee Voluntary (21.67) (21.97)
Retirement Scheme Expense
Profit Before Tax 359.04 417.86
Tax Expense (85.86) (87.31)
Profit After Tax 273.18 330.55

The Board of Directors has decided to retain the entire amount ofprofit for the financial year 2020-21 in the Statement of Profit and Loss.

3. Performance Overview

During 2020-21 the Company achieved a turnover of Rs 4026 Cr.registering a very marginal de-growth of 0.7% over the previous year due to country widelockdown imposed on account of the outbreak of COVID-19 pandemic. The Company focused onreducing fixed costs manage working capital more efficiently and making capitalexpenditure prudently on critical growth projects. The Profit before DepreciationInterest Exceptional Items and Tax was at Rs 549 Cr. as against Rs 610 Cr. in theprevious year. The Profit before Tax and Exceptional Items was at Rs 381 Cr. as against Rs421 Cr. in the previous year.

During the year the Company implemented voluntary retirement schemesin certain locations at a cost of Rs 22 Cr. to improve the productivity andcompetitiveness of its business. This is shown as exceptional loss in the financialstatements.

The Cycles and Accessories segment recorded revenue of Rs 847 Cr. ascompared to Rs 781 Cr. during 2019-20 a growth of 8% despite the adverse marketconditions and pandemic. The operating profit before interest and tax stood at Rs44 Cr. as compared to Rs 26 Cr. during the previous year registering a growth of 70%.

The Engineering segment registered revenue of Rs 2317 Cr. as comparedto Rs 2258 Cr. during the previous year. The operating profit before interest and taxstood at Rs 251 Cr. as compared to Rs 264 Cr. during 2019-20 a de-growth of 5%.

The Metal Formed Products segment recorded revenue of Rs 1274 Cr. ascompared to Rs 1399 Cr. during the previous year a de-growth of 9%.

The operating profit before interest and tax stood at Rs 87 Cr. ascompared to Rs 123 Cr. during previous year a de-growth of 29%.

4. COVID-19 and its impact

Consequent to the outbreak of the COVID-19 pandemic and thelockdown/curfew introduced by the Central and State Governments the operations in theCompany's manufacturing plants situated across various locations of the Country hadto be shut down or were disrupted till the latter half of April 2020.

With the easing in the lockdown/curfew and the Governments permittingoperations to be resumed with necessary permission from the local authorities the Companyfrom end April 2020 onwards resumed operations in a partial manner in almost all theplants. As the situation improved the Company's operations were also scaled up tothe pre-pandemic level in line with improvement in the economic activity in the Country.

With the widespread resurgence of the COVID-19 virus resultingin a more serious second wave of the pandemic the Governments across various States ofthe country started imposing lockdown/lockdown-like restrictions again from the month ofApril 2021 onwards. These measures have come to impact the operations of the manufacturingplants and warehouses of the Company located in those States leading to no or minimumlevel operations only as permitted in the respective States.

Considering the seriousness of the pandemic situation the Company istaking various measures to ensure the health and safety of its employees and to complywith the directives regularly being issued by the Central and the respective StateGovernments besides the local authorities at all its business locations. The Company willcontinue to monitor the situation for taking timely action based on the guidance from theGovernments and the authorities.

The Company has considered the possible effects/ impact arising fromCOVID-19 on its financial results for the year 2020-21 and at this stage it has concludedthat no material adjustments are required to the same. The Company will continue toclosely monitor any material changes to future economic conditions.

5. Acquisition of controlling interest in CG Power

During the year under review the Company acquired controlling interestin M/s. CG Power and Industrial Solutions Limited ("CG Power") which is engagedin the industrial and power sector with its equity shares listed on the BSE Limited andthe National Stock Exchange of India Limited. CG Power has 18 manufacturing facilities andprovides gainful employment to over 11000 persons directly and indirectly.

The decision by the Company to acquire controlling interest in CG Powerwas driven by the strong conviction and belief that the Company's operationalfinancial and governance capabilities and experience will help towards removing thedifficulties and hardships faced by CG Power largely resulting from paucity of funds forworking capital and in the process facilitate value creation for the Company as well asCG Power. With both the companies being engaged in the engineering business theacquisition it was further expected would bring in synergy for both of them.

CG Power being a well-established company of over eight decadesstanding with a robust business model was under significant financial stress due to lackof steady credit lines and its lenders had initiated the process for resolution of thestress under the Reserve Bank of India (Prudential Framework for Resolution of StressedAssets) Directions 2019. Identifying the business opportunity presented by CG Power theCompany entered into a Securities Subscription Agreement on 7th August 2020with CG Power which provided for the Company acquiring for an all cash consideration byway of subscription to fresh equity shares and convertible share warrants of CG Power forabout Rs 700 Cr. subject to approval of the Competition Commission of India andsatisfactory fulfilment of the Conditions Precedents contained in the said SecuritiesSubscription Agreement. To take the process forward the Company further made a proposalfor a binding bid under the Swiss Challenge bid process launched by the lenders of CGPower for interested suitors to bid for acquiring controlling interest in CG Power underthe said RBI Directions and at the end of the said bid process the lenders of CG Poweron 28th August 2020 declared the Company's offer as the successful offerand the Company as the successful bidder for the acquisition of controlling interest in CGPower.

The Company further decided in early September 2020 to make anadditional investment to facilitate the enhanced funding needs of CG Power assubsequently assessed by way of subscription to additional equity shares on apreferential issue basis for about Rs 100 Cr.

The acquisition received the approval of the CCI under Section 31(1) ofthe Competition Act 2002 on 13th October 2020.

The Company was allotted on 26th November 2020 by CG Powerupon making the agreed investment a) 642523365 equity shares of the face value of Rs2/- each at a price of Rs 8.56/- (including premium) per equity share for an aggregateconsideration of about Rs 550 Cr.; & b) 175233645 warrants each carrying a rightexercisable by the Company as the warrant holder to subscribe to equal number of equityshares within 18 months from allotment for a subscription amount of about Rs 37.50 Cr.being 25% of the aggregate consideration payable for subscribing to equity shares uponexercise of the warrants.

Consequent to the aforesaid allotment of equity shares the Companyacquired controlling interest in CG Power thereby becoming its promoter holding 50.62% ofthe issued subscribed and paid up equity share capital of CG Power and also CG Powerbecame a subsidiary of the Company with effect from 26th November 2020 underSection 2(87)(ii) of Companies Act 2013. In terms of the Subscription Agreement theBoard of Directors of CG Power also was reconstituted.

Subsequently on 19th December 2020 the Company wasallotted 68728522 equity shares of Rs 2/- each at a price of Rs 14.55/- per equityshare (including premium) for an aggregate consideration of about Rs 100 Cr. towards theadditional investment committed by the Company.

Arising from the above the Company presently holds 711251887 equityshares of Rs 2/- each of CG Power resulting in a 53.16% shareholding and along with theinvestment in 175233645 convertible share warrants as per details aforementioned theCompany holds an aggregate shareholding of 58.58% in CG Power on a fully dilutedbasis.

Towards easing of the fund constraints of CG Power the Company withthe approval of its shareholders at the Extraordinary General Meeting held on 30thNovember 2020 pursuant to Section 186 of the Companies Act 2013 and the Rulesthereunder furnished guarantee(s) in favour of the lenders of CG Power for the financialassistance to be availed by CG Power for an aggregate amount of up to Rs 1365 Cr. CGPower is well on course to improve its financial and operational performance so as toservice and satisfy fully all its debts by itself without any need for the lenders of CGPower to seek recourse to the guarantees furnished by the Company.

CG Power completed the One Time Settlement (OTS) process with itsexisting lenders on 24th December 2020 (confirmed on 28th December2020) with payment of an upfront consideration of Rs 650 Cr. submission of counterguarantee for the non-fund based facilities issuance of unrated unsecured unlistednon-convertible debentures for Rs 200 Cr. and the recognition of debt of Rs 150 Cr. in thebooks against its corporate headquarters viz. CG House property. As per the terms of theOTS process the lenders of CG Power provided a waiver of about Rs 1100 Cr.

With the credit lines becoming assured and regular post-acquisition ofcontrolling interest by the Company CG Power has started showing steadyimprovement in its operational and financial performance and the Board of Directors of theCompany is confident that the operations of CG Power would barring any unforeseendevelopments stabilize and turnaround within a reasonable period of time and also createbetter value for itself and the Company in the coming years.

6. Business Review – Standalone

6.1. Cycles and Components TI's Presence

The Cycles and Components segment of the Company comprises of bicyclesof the Standard and Special variety including alloy bikes & specialty performancebikes cycling accessories bicycle components sold as spares and home fitness equipment.

Industry Scenario

Bicycles fall under two distinct categories – Standards andSpecials. While Standard cycles are largely used for commuting especially in small towns& rural areas Special cycles cater to recreational usage where the product is usedfor fun fitness and leisure activities. During the financial year the Trade industrywitnessed a growth of about 8% as against the previous year. Standards have de-grown by10% and Specials have grown by about 20%. However Performance Cycling Group (PCG) as asubset of Specials have declined by 10% due to lower affinity for premium products ingeneral. In addition to this movements by the unorganized players based on economyofferings have also impacted the organized trade (All India Cycle Manufacturers' Association-AICMA)players' sales volume.

Over 74% of the country's requirements are met by four majorplayers. The smaller regional players and imports constitute the balance. TI Cycles enjoysa share of about 24% of the total organised trade market with a much higher share in thepremium segment.

Review of Performance

Due to nation-wide lock down in first few months of the year all thebusinesses were affected in the initial part of the year. TI Cycles sold about 22.34 lakhbicycles during the year in trade which is about 1.10 lakh bicycles higher as compared to2019-20. Overall Trade bicycle industry itself registered a growth of 8.38% over theprevious year. The thrust on Specials segment was driven by a concerted effort to enhanceconsumer experience through exclusive retail outlets under the exclusive retail brand‘Track & Trail'. Moreover the expansion of export business and domesticspares business is considered to be a new avenue of business to the Company. Toparticipate in the growing economy sub-segment 9 low cost products were launched in majorcategories like Kids and Mountain Terrain Bikes (MTB).

In 2020-21 43 new model bicycles were launched and 54 older modelswere refreshed. 29% of the trade sales volume came from new products. Multiple innovationswere introduced for the first time in the industry notable among them being introductionof knuckle guard in ‘Hercules Black Hunter' bicycle. Coloured rims in neoncolours were introduced as FX200 DX2 and FX100 models in MTB segment.

On the consumer outreach front the business consistently ran digitalcampaigns for its major brands with BSA Ladybird Hercules Roadeo and Montra deliveringa significant lift in brand awareness. The objective of the campaign was to increase brandawareness and product consideration among the target group.

6.2. Engineering

TI's Presence

The Engineering Segment of the Company consists of cold rolled steelstrips and precision steel tubes viz. Cold Drawn Welded tubes (CDW) and Electric

Resistance Welded tubes (ERW). These products primarily cater to theneeds of the automotive boiler bicycle general engineering and process industries. TheCompany is further engaged in the manufacture of large diameter welded tubes mainly fornon-auto application which are largely imported.

Industry Scenario

During 2020-21 the automotive industry's production volume waslower by 14% impacted mainly by the pandemic in H1 (de-growth by 43%) and partiallyrecovered with a surge in demand in H2 (21% growth).

Across all segments of automotive industry there was a de-growth overthe last fiscal year. Passenger vehicle commercial vehicle and two-wheeler segments werelower by 11% 17% and 13% respectively over the last fiscal year.

Review of Performance

Due to nation-wide lock down in first few months of the year all thebusinesses were affected in the initial part of the year. The Engineering segment was ableto maintain its revenues during the year despite the adverse business environment.

The volumes of tubes business grew by 1% cold rolled steel stripsbusiness de-grew by 2.4% and large diameter tubes grew by 16%. Tubes overall export volumegrew by 12.4% during the year.

Given the situation of lower demand the business focused on internalmeasures to control cash fixed expenses optimize manufacturing cost reduction and otherfixed expenses to partially offset the drop on account of lower volumes.

The business focused on reducing working capital and spending capitalexpenditure prudently on critical growth projects.

The business continued to focus on Total Quality Management (TQM)journey to improve its quality and focused on employee development. Career pathinitiatives were taken up to provide opportunities to employees within the organizationfor new openings and to enable cross function exposure and growth.

With regard to the ongoing investigation by the US Department ofCommerce on complaint of alleged dumping of cold-drawn steel mechanical tubes from

India and some other countries the Countervailing Duty (CVD) andAnti-dumping Duty (AD) on the Company's exports to the US market the Company hasparticipated in the first review and obtained a favourable outcome which will enableimproved opportunities on exports to US.

6.3. Metal Formed Products TI's presence

Automotive & industrial chains fine blanked products roll-formedcar doorframes and cold roll formed sections for passenger coaches constitute the MetalFormed Products segment.

Industry scenario

During 2020-21 production of two-wheeler segment and passengervehicles de-grew by 13% and 11% respectively.

This segment is one of the major players in the manufacturing of rollerchains and fine blanked parts for the automotive industry in India. From end of the secondquarter the Chains fine blanked products and doorframes recovered well from the COVID-19pandemic impact backed by resumption in auto sector.

With international car majors continuing to invest in the country andincreasingly using India as an export base many component manufacturers have theopportunity to cater to the global needs of automobile manufacturers and their Tier 1suppliers.

Due to the COVID-19 pandemic situation the Railways business is goingthrough a difficult phase as demand continues to be subdued. However the green shoots arevisible which could help bring the railways business back on track.

Review of Performance

Due to nation-wide lock down in first few months of the year all thebusinesses were affected in the initial part of the year. Though the first quarter wasseverely impacted due to the pandemic the auto and industrial segments came back stronglyfrom Q2 onwards. The Company continued to focus in the aftermarket segment benefiting fromthe two-wheeler population growth.

The Industrial chains business segment will continue its core businessprocesses to handle both volume fluctuations and change in the product mix to meetcustomers' demand. The replacement market continues to provide opportunities forgrowth notwithstanding good competition and the business expects to strengthen on thesales structure deepen its coverage and launch new products for new categories.

Doorframe sales were lower by 14% during 2020-21 consequent to thede-growth in the passenger car segment. Despite the same the business manages to hold onto the market due to good traction seen on select models with renowned auto majors. Thefocus is on generating more business from the auto Original Equipment Manufacturers(OEMs) leveraging the Tier-1 position with specific emphasis on roll formed products andother tubular parts used in passenger cars. In addition strengthening the currentposition in respect of coach parts focusing on metros and expanding the customer base aresome of the opportunities that are looked into closely which will drive the Railwaysbusiness towards growth path.

7. Dividend

The Board of Directors declared an Interim Dividend of Rs 2/- per share(@ 200%) on equity share of face value of Rs 1 each for the financial year 2020-21 whichwas paid on 9th March 2021 to all the eligible shareholders. Rs 1.50 per share(@ 150%) of Final Dividend has been proposed by the Board for the said financial year andtogether with the Interim Dividend of Rs 2/- per equity share already declared and paidin respect of the financial year 2020-21

Rs 3.50 per share (@ 350%) will be considered as the total Dividend forthe said financial year.

The dividend pay-out is in accordance with the Company's DividendDistribution Policy. The said Policy as approved by the Board is uploaded and is availableon the following link on the Company's websitehttp://www.tiindia.com/article/values/601.

8. Share Capital

The paid-up Equity Share Capital as on 31st March 2021 wasRs 19.28 Cr.

9. Finance

Cash and Cash Equivalents as at 31st March 2021 were Rs 7.09Cr. In addition Company has investments in Liquid Schemes of Mutual Funds for Rs 304.30Cr.

The Company continues to focus on judicious management of its workingcapital. The Company has taken many steps during the year to improve the working capitalturns. The working capital parameters were kept under strict check through continuousmonitoring.

9.1. Preferential Issue of Equity Shares

During the year with the approval of the shareholders at theExtraordinary General Meeting (EGM) held on 21st December 2020 pursuant toSection 62(1)(c) and other applicable provisions of the Companies Act 2013 and the Rulesthereunder the Company had issued and allotted 4783380 equity shares in accordancewith the applicable SEBI Regulations to identified investors (M/s. Azim Premji Trust– Rs 200 Cr. approx. and M/s. SBI Mutual Fund – Rs 150 Cr. approx.) on apreferential basis at a price of Rs 731.70 per share (including a premium of Rs 730.70)aggregating about Rs 350 Cr. The issue proceeds were fully utilised by the Company for thepurposes/objects as stated in the Offer document and Explanatory Statement to the Noticeof the said EGM. The Board of Directors and the Company are thankful to the investors fortheir investment and the confidence reposed in the Company.

9.2. Non-Convertible Debentures

During the year Non-Convertible Debentures (NCDs) aggregating Rs 100Cr. were redeemed and NCDs for Rs 100 Cr. were issued by way of private placement duringthe year which was made in accordance with the SEBI circular on fund raising dated 26thNovember 2018. As on 31st March 2021 NCDs aggregating Rs 100 Cr. areoutstanding.

9.3. Deposits

The Company has not accepted any fixed deposits under Chapter V of theCompanies Act 2013 and as such no amount of principal and interest were outstanding ason 31st March 2021.

9.4. Particulars of Loans Guarantees or Investments

During the year under review the Company entered into a SecuritiesSubscription Agreement with CG Power and Industrial Solutions Limited ("CGPower") pursuant to which the Company made investments in acquiring 711251887equity shares of Rs 2/- each viz. for a consideration of Rs 650 Cr. in the aggregateresulting in a 53.16% shareholding in CG Power and also invested in 175233645 warrantsissued by CG Power which are convertible into an equal number of equity shares at anexercise price of Rs 8.56 per share including premium within 18 months against which theCompany has paid an upfront consideration of 25% viz. Rs 37.50 Cr. resulting in ashareholding of 58.58% by the Company in CG Power on a fully diluted basis. The Companyhad also given Corporate Guarantee to the lenders of CG Power in connection with the termloans and fund based working capital limits sanctioned to CG Power for an amount notexceeding Rs 1365 Cr. after obtaining the approval of its shareholders under theprovisions of Section 186 of the Companies Act 2013 the details relating to which formpart of the Notes to the financial statements provided in this Annual Report.

As part of treasury management the Company also deploys any short-termsurplus in units of mutual funds the details relating to which form part of the Notes tothe financial statements provided in this Annual Report.

9.5. Consolidated Financial Highlights

Rs in Cr.

Particulars 2020-21 2019-20
Revenue from contract with customers (net) 6083.29 4750.39
Profit Before Exceptional items and Tax 454.07 425.18
Exceptional items (41.85) (21.97)
Profit Before Tax and exceptional items 412.22 403.21
Tax Expense (107.53) (89.94)
Net Profit for the Year 304.69 313.27

10. Business Review – Subsidiaries and Joint Venture

10.1. Shanthi Gears Ltd (SGL)

SGL a subsidiary of the Company recorded revenue of Rs 216 Cr. in2020-21 against Rs 242 Cr. in the previous year. Profit before tax was Rs 26 Cr. (previousyear: Rs 33 Cr.). During the year SGL renewed its focus on re-establishing itself in themarket and gaining new customers.

SGL continued to look at enlarging its market presence create a robustchannel enhance its process capabilities and launch new products to meet the growingexpectations of customers.

SGL also declared and paid an Interim Dividend of Rs 1.50 per share forthe financial year 2020-21.

10.2. Financire C10 SAS (FC10)

FC10 the Company's wholly owned subsidiary in France recordedconsolidated revenue of Euro 26 Mn in 2020 (previous year: Euro 32 Mn). The loss after taxfor the year was Euro 0.80 Mn as compared with the loss of Euro 0.70 Mn. in the previousyear. The consolidated results of FC10 include results of its subsidiaries viz. SedisSAS Sedis GmbH and Sedis Co Ltd in UK.

10.3. TI Tsubamex Private Limited (TTPL)

TTPL (Company's shareholding: 78.3%) had consequent todiscontinuance of its operations sale of its assets and settling of its liabilities madean application to the Registrar of Companies Chennai during the year under review forstriking off its name from the Register of Companies. The final approval is awaited.

Necessary impairment in the entire investment made by the Company inTTPL has already been recognized in the books of account of the Company for the financialyears 2017-18 and 2018-19.

10.4. Great Cycles (Private) Limited (GCPL)

GCPL is the Company's subsidiary in Sri Lanka acquired in March2018. The Company holds 80% of GCPL's equity capital.

During the year under review GCPL recorded revenue of Rs 19 Cr.(previous year: Rs 3 Cr.) and registered profit before tax of Rs 2 Cr. (previous year lossbefore tax: Rs 1 Cr.).

10.5. Creative Cycles (Private) Limited (CCPL)

CCPL is the Company's subsidiary in Sri Lanka acquired in March2018. The Company holds 80% of CCPL's equity capital.

During the year under review CCPL recorded revenue of Rs 41 Cr.(previous year: Rs 8 Cr.) and registered loss before tax of Rs 2 Cr. (previous year lossbefore tax: Rs 2 Cr.).

10.6. CG Power and Industrial Solutions Limited (CGPISL)

CGPISL is the Company's subsidiary acquired in November 2020. TheCompany holds 53.16% of CGPISL's equity capital.

During the year under review CGPISL recorded revenue of Rs 1393 Cr.and registered profit before tax of Rs 46 Cr. between December 2020 and March 2021.

The statement containing salient features of the financial statementsof the company's subsidiaries/ Joint venture is attached as Annexure - A. TheConsolidated Financial Statements of the Company and its subsidiaries prepared inaccordance with the Indian Accounting Standards.

11. Financial Review

The statement containing salient features of the financial statementsof the Company's Subsidiaries/ Joint Venture is attached as Annexure-A. TheConsolidated Financial Statements of the Company and its subsidiaries prepared inaccordance with the Indian Accounting Standards form part of the Annual Report.

11.1. Profits & Profitability

The Profit before Tax and exceptional items registered has de-grown by9.5% on standalone basis considering the adverse market conditions and pandemicsituation.

All the business segments of the Company maintained their focus onservicing customers improving efficiencies controlling working capital and reducingresources employed in the business.

11.2. Capital Expenditure

The Company continues to assess the trends emerging in theindustry and the changing requirements of its customers and invests appropriately for thelong-term with a view to servicing its customers in a more timely and efficient manner.

11.3. Interest Cost

The Company's interest cost reduced to Rs 19 Cr. in the year2020-21 from Rs 29 Cr. in the previous year mainly on account of lower borrowing andbetter management of net working capital. With strong focus on cash generation theCompany achieved a significant level of net debt reduction of Rs 159 Cr. during the year.The Company had a cash surplus of Rs 10 Cr. (net of borrowings) as on 31stMarch 2021 as compared to the net borrowing (net of Cash and Current Investments) of Rs149 Cr. as on 31st March 2020.

11.4. Financial Ratios

The key financial ratios of the Company in which there were significantchanges (more than 25%) during the financial year compared to the previous financial yearwith reasons therefor are as under:

Sl. No. Financial Ratio* FY 2020-21 FY 2019-20 % change over previous year Reasons
1 Interest Coverage Ratio (times) 27.7 21.1 31% Favourable average borrowing rates
2 Debt-Equity Ratio (times) 0.1 0.2 -19%
3 Net Profit Margin 6.8% 8.2% -17%
4 Return on Net Worth 11.9% 19.3% -38%
5 Return on Capital Employed 15.4% 22.5% -32% Profitability impacted during Q1 on account of nation-wide lockdown
6 Revenue Growth -0.5% -19.1% -97% Impacted due to limited economic activity during Q1
7 Debtors Turnover (times) 7.7 8.4 -8%
8 Inventory Turnover (times) 5.4 4.7 15%
9 Current Ratio (times) 1.0 1.0 -5%
10 Operating Profit Margin 9.9% 11.1% -10%

11.5. Internal Control Systems

Internal control systems in the organisation are looked at as the keyto its effective functioning. The Company believes that internal control is one of the keypillars of governance which provides freedom to the management within a framework ofappropriate checks and balances. Given the nature of business and size of operations theCompany has designed and instituted a robust internal control system that compriseswell-defined organisation structure roles and responsibilities documented policies andprocedures to reduce business risks through a framework of internal controls andprocesses. These controls ensure:

• Recording of transactions are accurate complete and properlyauthorised;

• Adherence to Accounting Standards compliance toapplicable Statutes Company policies and procedures and timely preparation of financialstatements;

• Effective usage of resources and safeguarding of assets;

• Prevention and detection of frauds/errors;

• Efficient conduct of operations.

To ensure efficient internal control systems the Company has awell-established independent and multi-disciplinary in-house Internal Audit function thatcarries out periodic audits across locations and functions. The scope and authority of theInternal Audit function is derived from the Internal Audit charter duly approved by theManagement. The Internal Audit function reviews compliance vis-a-vis the establisheddesign of the internal control as also the efficiency and effectiveness of operations.Internal Audit function is responsible for providing assurance on compliance withoperating systems internal policies and legal requirements as well as suggestingimprovements to systems and processes. It reviews and reports to management and the AuditCommittee about compliance with internal controls and the efficiency and effectiveness ofoperations as well as the key process risks. The Company also has establishedwhistle-blower mechanism operative across the Company.

To further strengthen its Internal Audit process through appointment ofa specialist agency in order to benefit from the best of practices available (includingthe use of analytical tools) to monitor various processes the Company has appointed M/s.PricewaterhouseCoopers ("PwC") as Internal Auditors of the Company for thefinancial year 2021-22.

The Audit Committee of the Board of Directors comprising of a majorityof independent directors regularly reviews the audit plans significant audit findingsadequacy of internal controls compliance with accounting standards as well as reasons forchanges in accounting policies and practices if any.

The summary of the Internal Audit findings and status of implementationof action plans for risk mitigation are submitted to the Audit Committee every quarter forreview and concerns if any are reported to the Board. This process ensures robustness ofinternal control system and compliance with laws and regulations including resourceutilisation and system efficacy.

Revenue and capital expenditures are governed by approved budgets andthe levels are defined by a delegation of authority mechanism. Review of capitalexpenditure is undertaken with reference to benefits expected in line with the policy forthe same.

Investment decisions are subject to formal detailed evaluation andapproved by the relevant authority as defined in the delegation of authority mechanism.The Audit Committee reviews the plan for internal audit significant internal auditobservations and functioning of the Company's Internal Audit department on a periodicbasis.

11.6. Internal Financial Control Systems with reference to theFinancial Statements

The Company has complied with the specific requirements of theCompanies Act 2013 which call for establishment and implementation of an InternalFinancial Control framework that supports compliance with requirements of the said Act inrelation to the Directors' Responsibility Statement.

The Company's business processes are enabled by an Enterprise-wideResource Platform (ERP) as its core IT system. The operating management is not onlyresponsible for revenue and profitability but for also maintaining financial disciplineand accountability. The systems and processes are continuously improved by adopting bestin class processes automation and implementing latest Information Technology tools.

The Company has a formal system of internal financial control to ensurethe reliability of financial and operational information and regulatory and statutorycompliances. This is reviewed regularly and tested by Internal Audit Team. TheCompany's business processes are enabled by the ERP for monitoring and reportingprocesses resulting in financial discipline and accountability.

12. Enterprise Risk Analysis and Management

The Company has an established risk assessment and minimisationframework. This framework provides a mechanism to identify the risk evaluation oflikelihood of happening and consequences. It also provides for assessment of options tomitigate the risk and develop appropriate risk management plans. There are normalconstraints of time efficiency and cost.

The Risk Management Committee of the Board of Directors reviews therisk mitigation plans periodically to monitor the key risks of the Company and evaluatethe management of such risks for effective mitigation.

During the year under review the Risk Management Committee met on 11thFebruary 2021 and reviewed the risks and mitigation plans of the SBUs of the Company.

Some of the risks associated with the business and the relatedmitigation plans are discussed hereunder. The risks given below are not exhaustive and theevaluation of risk is based on management's perception:

12.1. Bicycles and Components

Risk Why considered as Risk Mitigation Plan/Counter Measure
Product • Availability of alternatives • Higher variety in all sub-segment Economy Mass and Premium
Obsolescence • Increased affordability for motorised vehicles
Risk • Shrinking road space for cycling • Innovation to establish point of differentiation to increase sales and brand aspiration
• E-bike will be introduced to reduce cycling effort
• "Cycling" as a concept beyond commuting – leisure fitness fun and recreation
Sourcing Risk • Raw material supply chain issues due to pandemic • Continuous upgrading of vendor capability
• Relationship building
• Volatility in volumes • Reduce import dependency
• Continuous increase in raw material price
Competition Risk • Competitors investing in capacity expansion • Increase focus on brand awareness & visibility initiatives
• Investment in e-Cycle manufacturing plant to capitalize on domestic and exports volume • Launch of e-Cycles targeting global market
• International range licensing • Introducing new models with a healthy innovation funnel
• Consistent quality and timely delivery
Volume & • Rapid decline in Standards segment • Prioritizing high growth segment
Profitability Risks • Volatility in premium segment • Ensure consistent supply of premium range
• Low price competition in Specials segment • Creating competitive portfolio addressing economy price point
• Continuous rise in demand for kids segment • Cost reduction measures to enhance profitability
• Increasing capability / capacity for kids segment
Technology Risk • Lack of capacity and capability to handle large scale shift to alloy bikes • Capability building for manufacture and assembly of alloy bikes
• Establishing reliable source for high end bikes

12.2. Engineering

Risk Why considered as Risk Mitigation Plan/Counter Measure
User Industry • Significant exposure to auto sector • New products/applications to existing customers
Concentration Risk • Time lag in pass through of input cost changes • Introduction of new products catering to non- auto users
• Increase in exports volume with focused business development on select product segments
• Leverage application engineering skills for tubular solutions
• Drive operational efficiencies vigorously
Technology • Cheaper alternatives for auto applications affecting revenue streams • Imbibing new and relevant technologies
Obsolescence Risk • Equipment up gradations to address emerging demand for light weighting and high strength tubes (stabilizer bar tubes)
Raw Material Risk • Volatility in steel price • Alliance with steel producers
• Inconsistency in quality • Global sourcing
• High inventory holding • Strategic sourcing including developing new grades by suppliers
• Rationalization and standardization of grades
• Move to products with higher value addition
Competition Risk • Competition from integrated steel mills • Consistent quality and timely delivery
• New entrants with financial strength • Import substitution development of new grades
• Imports • Product range of offering leveraging all businesses of the Company
• Innovate on products process and applications.
• Leveraging metallurgy skills
• Regional balancing and common capability across all plants
• Digital initiatives for faster response
Export related risks • Increased trade protectionism and import tariff • Identification of new export markets and customers
• Global competition
• Need for higher capability • Capability building
• Focussing on new product categories and newer markets across geographies

12.3. Metal Formed Products

Risk Why considered as Risk Mitigation Plan/Counter Measure
Product Risk • Revenues are model specific • Indigenization of equipment
• Risk of product failures • Pursue options for other business using the same facilities
• Model specific investments to be done by OEMs
• More rigorous analysis of risks before taking up the project
User Industry • Dependence on auto sector • Diversification into non-auto business
Concentration Risk • Impact of slow down • Focus on industrial applications
• Develop range of power transmission products
Customer Risk • Retention of Customers • Cost competitiveness through Operational
• Significant revenues from few customers Excellence initiatives
• Availability of alternative source • Leverage design strength
• Disruption in supplies • Leverage proximity to customer
• Build technology superiority
• Product - plant rationalization
• Focus on addition of new customers
Entry of competition • Low technology barrier • Leverage position with customer as technology leader
• Impact on profit • Continuous upgrading of technical specifications
• Cost reduction
• Concentration in focus markets
Entry of internationally established players in domestic market • Better product range • Enhance product portfolio leveraging acquisition
• Tie-up with local player/end user • Leverage leadership and competitive position in industry
• ‘High quality' image • Strengthen collaboration with R&D team of customers
• Pursue opportunities in systems/components
• Pursue options for collaborating with other multi-national player(s) of repute
Sourcing Risk • Dependence on a few vendors for certain components • Vendor relationship building
• Enhancing vendor base both locally as well as overseas
• Leveraging collective bargaining capability of the group
Pricing risk • Year-on-Year price reduction expectation • Utilisation of existing assets optimal investment assumptions and reduced cost of operations
• Price recovery due to dependence on a few OEMs • Value engineering and value analysis in business re-engineering process
• Claims from customer for lower volumes
• Relationship building and joint / dynamic estimation of cost with OEMs leading to smooth price increase settlement
Technology risk • Advent of Electric Vehicles (EVs) • To identify new business in the EV segment
• Focus on exports
• Focus on new products and customers
Employee risk • Skill development • Skill development of employees
• Increase in labour cost • Categorisation of labour requirement
• Process automation
12.4.General
Risk Why considered as Risk Mitigation Plan/Counter Measure
Human Resource Risk • Build Talent Pipeline for meeting growth aspirations • Conceptualize and implement TI Talent Management approach
• Retention of talent • Coaching and team building
• Availability of adequate flexible workforce post COVID-19 • Individual career and development plan
• Effective communication exercises
• Continuous engagement with identified talent pool
• Deskill operations
• Continuously engage with contractors and contract labour for their wellness & engagement.
Currency Risk • Foreign currency exposure on exports imports and borrowings • Early identification and monitoring of exposures
• Hedging of exposures based on risk profile
IT/Cyber Related Risk • Confidentiality integrity and availability • Access controls
• Secure Network Architecture
• Infrastructure redundancies & disaster recovery mechanism
• Audit of controls
Project Management Risk • Delay in implementation • Effective project management
• Increase in cost • Pre-implementation planning
• Potential delay in stabilization of production • Deployment of adequate resources
• Effective monitoring

13. Corporate Social Responsibility (CSR)

The Company being part of the Murugappa Group is known for itstradition of philanthropy and community service. The Company's philosophy is to reachout to the community by establishing service-oriented philanthropic institutions in thefield of education and healthcare as the core focus areas. The CSR Policy of the Companyis available on the Company's website at the following link http://www.tiindia.com/article/values/467.

As per the provisions of the Companies Act 2013 the Company wasrequired to spend Rs 6.33 Cr. during the financial year 2020-21. Against the same theCompany spent Rs 7.50 Cr. towards the identified CSR projects in the fields of educationhealth care and disaster management and relief during the year. The Annual Report on CSRfor 2020-21 is annexed to and forms part of this Report as Annexure-B as well as in theCompany's website at the following link http://www.tiindia.com/docs/CSR_Annual_Report_2020-21.pdf

14. Corporate Governance

The Company is committed to maintaining high standards of corporategovernance.

The Company was and is wholly in compliance with the requirements ofthe Listing Agreement with the Stock Exchanges as well as the SEBI Listing Regulations.

A report on corporate governance together with a certificate from thePractising Company Secretary is annexed in accordance with the terms of the SEBI ListingRegulations and forms part of the Board's Report as Annexure-C. The Managing Directorand the Chief Financial Officer have submitted a certificate to the Board regarding thefinancial statements and other matters in terms of Part B of Schedule II [CorporateGovernance] of the SEBI Listing Regulations.

The Report further contains details as required to be provided in theBoard's Report on the policy on Directors' appointment and remunerationincluding the criteria annual evaluation by the Board and Directors composition andother details of Board committees implementation of risk management policywhistle-blower policy/vigil mechanism dividend policy etc.

15. Business Responsibility Reporting

As required under the SEBI Listing Regulations which mandate theinclusion of a Business Responsibility Report as part of the Annual Report for the top1000 listed entities the Business Responsibility Report forms part of the Annual Reportas Annexure-D. The Business Responsibility Policy of the Company is displayed in theCompany's website at the following link http://www.tiindia.com/article/values/667With the increasing emphasis on reporting on the ESG (Environmental Social andGovernance) matters as a proactive measure in the said direction although ESG reportingis made mandatory only from 2022-23 onwards the Company has already taken steps tobring focus to its ESG initiatives.

16. Human Resources

The Company continued to lay emphasis on creating a high performingwork culture to achieve organisational goals of the present as well as those of the futurein a sustainable way by establishing a culture of process discipline organisationaloneness and achievement orientation across its businesses through simplification anddigitization empowerment project-based working and customer centricity. The initiativestaken by the Company are in line with its long-term Human Resources Strategy which hasbeen drawn up with three broad thrust areas – TI Way of working High-PerformanceWork Culture (HPWC) and TI Talent Management Engine.

An integrated effort to ensure a well-articulated and documentedprocess covering all functions was taken adopting certain standard of working across theCompany's Business Units Divisions Platforms resting on three key pillars viz.process discipline organizational oneness and achievement orientation to facilitate theTI Way.

Towards the quest for delivering consistently superior results aninitiative focussing on HPWC as a strategy was taken up which articulates a framework tomanage performance of organisations teams and individuals. Various actions were pilotedin few Business Units across three themes viz. Better Faster and More efficient.In this quest employees across levels are aimed at for empowering inculcating in them ahigher sense of accountability enabling organizational growth.

Talent Management Engine will systematically acquire build traindevelop and retain talent from within to help the Company meet its talent requirements.

Total Quality Management (TQM) which is being practised at the Chainsand Tubes divisions has helped in reducing the overall plant rejections and improvingproduct capability. Similarly Toyota Production

System (TPS) for the Cycles division is also making good progresshelping in improving productivity sequencing production in the plant & reducinginventory by deploying TPS tools & techniques.

The total number of permanent employees on the rolls of the Company ason 31st March 2021 is 3120. Industrial relations continued to remain cordialat all the Company's units during the period under review. The information relatingto employees and other particulars required under Section 197 of the Companies Act 2013read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel)Rules 2014 will be provided upon request. In terms of Section 136 of the Companies Act2013 the Report and Accounts are being sent to the Members excluding the information onemployees particulars of which are available for inspection by the Members at theRegistered Office of the Company during business hours on all working days of the Companyup to the date of the forthcoming Annual General Meeting. If any Member is interested inobtaining a copy thereof such Member may write to the Company Secretary in the saidregard.

The disclosure with regard to remuneration as required under Section197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is attached and forms part of this Report as Annexure-E.

17. Prevention of sexual harassment at workplace

The Company has policy on prevention of sexual harassment at workplacein line with the requirement of the Sexual Harassment of Women at the Workplace(Prevention Prohibition & Redressal) Act 2013. An Internal Complaints Committee(ICC) to redress complaints received regarding sexual harassment has been constituted incompliance with the requirements of the said Act. The policy extends to all employees(permanent contractual temporary and trainees). Employees at all levels are beingsensitized about the new Policy and the remedies available thereunder.

One complaint was received by the ICC and disposed off during the yearunder review with its recommendations. No complaint was pending as at the end of theyear.

18. Employee Stock Option Scheme

During the year under review there was no grant of stock options bythe Company.

Details in respect of the ESOP 2017 as required under the relevant SEBIRegulations are displayed in the Company's website at the following link http://www.tiindia.com/article/values/554.

19. Directors' Responsibility Statement

The Board of Directors confirm that the Company has in place aframework of internal financial controls and compliance system which is monitored andreviewed by the Audit Committee and the Board besides the statutory internal andsecretarial auditors. To the best of their knowledge and belief and according to theinformation and explanations obtained by them your Directors make the followingstatements in terms of Section 134(3)(c) of the Companies Act 2013: a) that in thepreparation of the annual Financial Statements for the year ended 31st March2021 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any; b) that such accounting policies as mentioned inthe Notes to the Financial Statements have been selected and applied consistently andjudgment and estimates have been made that are reasonable and prudent so as to give a trueand fair view of the state of affairs of the Company as at 31st March 2021 andof the profit of the Company for the year ended on that date; c) that proper andsufficient care has been taken for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; d) that theannual Financial Statements have been prepared on a going concern basis; e) that properinternal financial controls to be followed by the Company have been laid down and that thefinancial controls are adequate and were operating effectively; & f) that propersystems have been devised to ensure compliance with the provisions of all applicable lawsand that such systems were adequate and operating effectively.

20. Auditors

M/s. S R Batliboi & Associates LLP Chartered Accountants (LLPIdentity no.AAB-4295) were appointed as Statutory Auditors at the 9th AnnualGeneral Meeting held on 6th November 2017 for a period of five years viz. fromthe conclusion of the said 9th Annual General Meeting till the conclusion ofthe 14th Annual General Meeting.

In terms of the aforesaid resolution passed by the Members with regardto the appointment of the Statutory Auditors the said appointment is subject toratification by the Members at every Annual General Meeting and their remuneration will berecommended to the Shareholders at the time of taking up such ratification of appointmenteach year. In the said regard by an amendment to the Companies Act 2013 in 2017 therequirement for ratification of appointment of the Statutory Auditors at each AnnualGeneral Meeting has been done away with. Accordingly there is no requirement under lawfor ratification of appointment of the Statutory Auditors and hence the same is notproposed. The remuneration payable to them in respect for the financial year 2021-22 hasalready been fixed at the 12th Annual General Meeting as required under Section142 of the Companies Act 2013.

The Company is required to maintain cost records in respect of SteelProducts Metal Formed Products and parts & accessories of auto components of theCompany and such accounts and records are made and maintained. M/s. S Mahadevan & Co.(firm no.000007) Cost Accountants were appointed as the Cost Auditors of the Company forauditing the cost accounting records maintained by the Company in respect of theapplicable products for the financial year 2021-22. Necessary resolution for ratificationof their remuneration in respect of the aforesaid term of appointment for the financialyear 2021-22 forms part of the Notice for the ensuing Annual General Meeting.

21. Explanation on Statutory Auditor's Qualified Opinion on theConsolidated Financial Statements

M/s. S R Batliboi & Associates LLP the Statutory Auditors havefurnished a qualified opinion vide their Report on the Audit of the Consolidated FinancialStatements ("CFS") for the year ended 31st March 2021 (please refer to page 182of this Annual Report for details) vide sub-paragraphs (a) and (b) under the paragraph on‘Basis for Opinion' therein which in brief relate to reopening of books ofaccounts and recasting of financial statements of M/s. CG Power and Industrial SolutionsLimited ("CG Power") ongoing investigation by the Serious Fraud InvestigationOffice ("SFIO") of the affairs of CG

Power and certain subsidiaries in respect of periods prior toacquisition and resulting non-compliance of laws and regulations by CG Power andinclusion in the CFS of certain subsidiaries of CG Power which have been consolidated byCG Power based on information prepared by the management and have not been subjected toaudit/review.

As regards the above qualified opinion under sub-para (a) of the Reportof Statutory Auditors on the audit of the CFS as stated therein the said opinion pertainsto matters arising prior to the acquisition of controlling interest by the Company in CGPower and that post acquisition by the Company CG Power is actively engaged in resolvingthe issues and also providing necessary co-operation to the SFIO in the ongoinginvestigation. As regards sub-para (b) the financial statements of certain subsidiariesof CG Power could not be audited due to their loss of control bankruptcy anddiscontinuance of operations. CG Power is actively working towards completing the pendingproceedings of such subsidiaries.

22. Related Party Transactions

All related party transactions that were entered into during thefinancial year under review were on an arm's length basis and were in the ordinarycourse of business. There are no materially significant related party transactions duringthe year which may have a potential conflict with the interest of the Company at large.Necessary disclosures as required under the Indian Accounting Standards have been made inthe notes to the Financial Statements.

The policy on Related Party Transactions as approved by the Board isuploaded and is available on the following link on the Company's website http://www.tiindia.com/article/values/476.None of the Directors had any pecuniary relationships or transactions vis--vis theCompany.

23. Directors

Mr. M M Murugappan after a long association with the Company spanningalmost two decades stepped down on his reaching 65 years of age as the Chairman andalso as a Director of the Company during November 2020 in order to pursue hisphilanthropic and other interests.

Mr. M M Murugappan joined the Board of the Company prior to itsdemerger in March 2002 as a non-executive Director and was elected the Chairman of theBoard in November 2006 in which position he continued till 31st July 2017.Post-demerger he joined the Board of Directors of the Company effective 1stAugust 2017 and was elected the Chairman on 9th August 2017.

Mr. M M Murugappan has played a key role and contributed richly to thegrowth of the Company pre- as well as post- demerger through his leadership andwise counsel and the Board places on record its appreciation of his distinguished servicesin the course of his long association with the Company.

ConsequenttotheretirementofMr.MMMurugappan Mr. M A M Arunachalam asenior member of the promoter family was co-opted to the Board as Director and wasappointed as the new Chairman of the Company during the year under review.

Mr. Ramesh K B Menon a Non-Executive Director of the Company resignedduring the year to focus on his other interests.

The Board further places on record its appreciation of thedistinguished services rendered by Mr. Ramesh K B Menon during his term of office as aDirector of the Company.

Mr. K R Srinivasan President of the TI Metal Formed Products Divisionwas inducted to the Board during November 2020 and appointed as President and Whole-timeDirector of the Company for a three year term of office from 11th November 2020to 10th November 2023 (both dates inclusive). The appointment of Mr. K RSrinivasan as Director and as the President & Whole-time Director of the Company alsoreceived the approval of the Shareholders at the Extraordinary General Meeting of theCompany held on 21st December 2020.

Mr. Anand Kumar was appointed as an Additional Director in theIndependent Director category of the Company on 24th March 2021 and hisappointment is subject to the shareholders' approval in the ensuing Annual GeneralMeeting.

Ms. Sasikala Varadachari has been appointed as Additional Director inthe Independent Director/ Woman Director category of the Company on 17thJune 2021 and her appointment is also subject to the shareholders' approval in theensuing Annual General Meeting.

Mr. Vellayan Subbiah Managing Director of the Company appointed for aterm of five years will retire by rotation at the ensuing Annual General Meeting tofacilitate compliance of the requirements of Section 152 of the Companies Act 2013("the Act") and being eligible he offers himself for re-appointment.

The Board based on and after taking into consideration therecommendations of the Nomination and Remuneration Committee takes pleasure inrecommending the appointment of Mr. Anand Kumar as Independent Director for a termof 5 years from 24th March 2021 till 23rd March 2026 (both datesinclusive) the appointment of Ms. Sasikala Varadachari as Independent Director fora term of 4 years from 17th June 2021 till 16th June 2025(both dates inclusive) and also the re-appointment of Mr. Vellayan Subbiah asDirector not liable to retire by rotation at the forthcoming Annual General Meeting.

All the Independent Directors of the Company have furnished necessarydeclaration in terms of Section 149(6) of the Act affirming that they meet the criteria ofindependence as stipulated thereunder. All the Independent Directors of the Company areregistered on the Independent Directors Databank as required under the Companies Act 2013and the applicable Rules in the said regard. In the opinion of the Board all theIndependent Directors have the integrity expertise and experience including theproficiency as required to effectively discharge their roles and responsibilities indirecting and guiding the affairs of the Company.

Mrs. Madhu Dubhashi will be retiring at the conclusion of the ensuingAnnual General Meeting on completing her second term of office as Independent Director.The Board places on record its grateful appreciation of the distinguished servicesrendered by Ms. Madhu Dubhashi during her association since October 2015 as IndependentDirector of the Company before and after its demerger.

24. Declarations/Affirmations

During the year under review:

- there were no material changes and commitments affecting thefinancial position of the Company which have occurred between the end of the financialyear of the Company to which the financial statements relate viz. 31stMarch 2021 and the date of this Report; & - there were no significant material orderspassed by the regulators or courts or tribunals impacting the Company's going concernstatus and its operations in future.

25. Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013and The Companies

(Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has appointed Mr. R Sridharan of Messrs. R. Sridharan

& Associates a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Reportis annexed herewith and forms part of this Report as Annexure-F.

The Company has ensured compliance of the Secretarial Standards issuedby the Institute of Company Secretaries of India during the period under review.Accordingly no qualifications or observations or other remarks have been made by theSecretarial Auditor in his said Report.

26. Annual Return

A copy of the Annual Return of the Company is placed on the website ofthe Company and the same is available on the following link http://www.tiindia.com.

27. Key Managerial Personnel

Mr. Vellayan Subbiah Managing Director Mr. K R SrinivasanPresident & Whole Time Director Mr. K Mahendra Kumar Chief Financial Officer and Mr.S Suresh Company Secretary are the Key Managerial Personnel (KMPs) of the Company as perSection 203 of the Companies Act 2013.

28. Energy Conservation Technology Absorption and Foreign ExchangeEarnings and Outgo

The information on conservation of energy technology absorption andforeign exchange earnings and outgo stipulated under Section 134(3) (m) of the CompaniesAct 2013 read with Rule 8 of The Companies (Accounts) Rules 2014 is annexed herewith andforms part of this Report as Annexure-G. The Directors thank all Customers VendorsFinancial Institutions Banks State Governments and Investors for their continuedsupport to your Company's performance and growth. The Directors also wish to place onrecord their appreciation of the contribution made by all the employees of the Companyresulting in the good performance during the year under review.

On behalf of the Board
Chennai M A M Arunachalam
17th June 2021 Chairman

.