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Tube Investments of India Ltd.

BSE: 540762 Sector: Auto
NSE: TIINDIA ISIN Code: INE974X01010
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P/E 86.55
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OPEN 2600.00
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VOLUME 2690
52-Week high 3046.25
52-Week low 1458.70
P/E 86.55
Mkt Cap.(Rs cr) 49,100
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

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

Company director report

#MDStart#

Management Discussion and Analysis

Dear Shareholders

The Directors take pleasure in presenting the 14th AnnualReport together with the Audited Financial Statements of the Company for the year ended 31stMarch 2022.

1. Business Environment

The fiscal year 2021-22 was a year of transition with the focusshifting away from the pandemic and more towards recovery and growth. Due to thewidespread vaccine coverage the economic impact of the recurrent COVID-19 wave was muchlesser than witnessed during the total lockdown in 2020-21. While the pandemic influencedthe first quarter's performance to some extent there was a strong recovery in thesubsequent quarters.

Nonetheless the global ecosystem is still in a state of flux. Theinvasion of Ukraine by Russia has resulted in a slew of new supply-chain bottlenecks andadversely impacted the international crude oil prices. The recent spike of COVID-19 casesin China resulting in lockdowns in some parts of that country and the economic turmoil inSri Lanka point to a challenging future.

Due to projection revisions global growth was predicted to moderatefrom 5.9% in 2021 to 4.4% in 2022 down half a percentage point from the World EconomicOutlook October 2021 Forecast of the World Bank. In the advanced as well as the emergingeconomies inflation has become the key problem with the rising prices of energy non-foodcommodities inputs the global supply chain disruptions and increased freight costscontinuing to fuel it across sparing none. In India the consumer price inflation fell to5.2% in 2021-22 (April-December) from 6.6% in 2020-21. It was 5.6% higher than theprevious year in December 2021. WPI (Wholesale Price Inflation) is likewise in doublefigures.

Following a contraction of 7.3% in 2020-21 the Indian economy isexpected to grow to 8.9% in real terms in 2021-22. In 2022-23 the GDP is predicted to be7.2%. The Government and the Reserve Bank of India ("RBI") are taking well-timedsteps to assist a robust economic recovery such as establishing Production LinkedIncentive (PLI) Scheme for thirteen industries including automobiles telecommunicationsand pharmaceuticals. The Indian Railways' capital expenditure increased to `155181Cr. (US$ 20.78 Bn.) in 2020-21 up from an average annual expenditure of `45980 Cr. (US$6.15 Bn.) between 2009 and 2014 and is further expected to increase to `215058 Cr. (US$28.80 Bn.) in 2021-22 a five-fold increase over the 2014 figure. Additional impetus hasbeen given by the Government in the Union Budget 2022 for capital expenditure with anallocation of `7.5 lakh Cr. up from `5.54 lakh Cr. providing greater fiscal space toStates for capital investments amongst other initiatives.

As per the Society of Indian Automobile Manufacturers (SIAM) in2021-22 sales of passenger vehicles (PVs) grew by 17% commercial vehicles (CVs) by 31%three-wheelers (3Ws) by 24% while two-wheelers (2Ws) declined by 3%. The overallautomobile sector experienced a decline of 6% in FY 2022 in sales. However on the back ofGovernment initiatives on infrastructure spending the PLI Scheme for auto and autocomponents vehicle scrappage policy favourable policies for adoption of electricvehicles by OEMs etc the auto industry is expected to come back strong on performance in2022-23 putting the sector back on track.

Overall macro-economic stability indicators show that the Indianeconomy is well-positioned to meet the challenges of 2022-23 as per the Economic Survey2021-22. However the challenges posed by the external environment need to be kept firmlyin view for a timely and effective strategy to achieve stability and growth. Of realconcern are the current economic indicators which signal some key issues for theGovernment's intervention and action namely the rising inflation increasingcommodity food and fuel prices to an extent due to the geo-political situation.These have also resulted in the RBI coming forward with a hike in the interest rates andthe Cash Reserve Ratio (CRR) to check the runaway inflation. World over including the USAan increase in interest rates is seen. It is likely that such a measure could impact anddampen consumer demand in the medium term. The investment climate may also slow down dueto higher interest rates amongst others. With RBI keeping a close watch on the situationit is likely that periodical calibrated interventions through more rate hikes can beexpected in the current fiscal.

2. Standalone Financial Highlights

Rs. in Cr.
Particulars 2021-22 2020-21
Sale of Products 5986.79 4026.23
Profit Before
Exceptional Items and 628.04 380.71
Tax
Provision for Employee
Voluntary Retirement - (21.67)
Scheme Expense
Profit Before Tax 628.04 359.04
Tax Expense (152.87) (85.86)
Profit After Tax 475.17 273.18

The Board of Directors has decided to retain the entire amount ofprofit for the financial year 2021-22 in the Statement of Profit and Loss.

3. Performance Overview

During 2021-22 the Company has achieved a turnover of `5986.79 Cr.registering a growth of 49% over the previous year. The Profit before DepreciationInterest Exceptional Items and Tax was at `785 Cr. as against `549 Cr. in the previousyear. The Profit before Tax and Exceptional Items was at ` 628 Cr. as against `381 Cr. inthe previous year.

The Mobility segment recorded a revenue of `963 Cr. as comparedto `847 Cr. during 2020-21 a growth of 14% despite adverse market conditions. Theoperating profit before interest and tax stood at `55 Cr. as compared to `44 Cr. duringthe previous year registering a growth of 25%.

The Engineering segment registered a revenue of `3868 Cr. as comparedto `2317 Cr. during the previous year a growth of 67%. The operating profit beforeinterest and tax stood at `376 Cr. as compared to `251 Cr. during 2020-21 a growth of50%.

The Metal Formed Products segment recorded a revenue of `1240 Cr. ascompared to `1032 Cr. during the previous year a growth of 20%. The operating profitbefore interest and tax stood at `136 Cr. as compared to `75 Cr. during previousyear a growth of 81%.

4. Second wave of the pandemic

With a resurgence in the COVID-19 pandemic resulting in a second wavelockdown/lockdown-like restrictions were again imposed across several States from April2021 which had some impact on the operations of the manufacturing plants and warehousesof the Company located in those States during the first quarter of the financial year2021-22.

With the easing of restrictions and the vigorous vaccination drivelaunched by the Central Government to inoculate the huge population contributing to anoverall improvement in the confidence level in managing the situation operations startedfrom mid-June 2021 onwards leading to improved revenue growth. The Company on its partinitiated multiple vaccination drives to inoculate its employees their relatives andcontract staff to provide a safe and healthy work environment to everyone.

The Company has considered the possible effects/ impact arising fromCOVID-19 on its financial results for 2021-22 and at this stage it has concluded that nomaterial adjustments are required to the same. The Company will continue to closelymonitor any material changes in future economic conditions.

5. Venturing into Clean Mobility business

5.1. Incorporation of Wholly-owned Subsidiary: TI Clean MobilityPrivate Limited

The Company has been exploring various new opportunities in its pursuitfor growth. The Company has identified the clean mobility space which offers goodbusiness potential and exciting prospects to grow.

To bring more focus to this the Company formed a wholly-ownedsubsidiary during the year under review to focus on clean mobility.

TI Clean Mobility Private Limited ("TICMPL") was accordinglyincorporated as a wholly-owned subsidiary on 12th February 2022 to focusexclusively on clean mobility solutions. The Company invested `100 Cr. in subscribing to10 crore equity shares of `10/- each of TICMPL. The Company has also extended anInter-Corporate Deposit amounting to `64 Cr. to TICMPL for its business operations as on31st March 2022. This new subsidiary will comprise of the electricthree-wheeler venture and other EV-related ventures of the Company.

The assets of the three-wheeler electric vehicle business which wasearlier part of the Company were moved from the Company to TICMPL. TICMPL is activelyengaged on the product launch preparations which is expected in Q2 of FY 2023 andwork is on towards product reliability testing getting statutory approvals manufacturingand infrastructure facilities readiness ensuring quality systems sales channel andservice set-up and brand building activities.

5.2. Acquisition of Cellestial E-Mobility Private Limited

In continuation of its foray into clean mobility withshareholders' approval the Company through its subsidiary TICMPL acquired 69.95%in the equity share capital of M/s. Cellestial E-Mobility Private Limited("Cellestial") for a total investment of `161 Cr. through a combinationof primary infusion and secondary purchase of shares.

TICMPL was allotted 44030 equity shares of the face value of `10/- pershare for an aggregate amount of `50 Cr. and acquired 97647 equity shares from theexisting shareholders of Cellestial for a total consideration of `110.88 Cr.

Consequent to the aforesaid allotment and acquisition of equity sharesTICMPL acquired a controlling interest of 69.95% in Cellestial. Cellestial thus became asubsidiary of TICMPL under Section 2(87) of the Companies Act 2013 (hereinafter referredto as "the Act" in this Report) with effect from 4th March 2022(treated as a joint venture under Ind AS).

Cellestial is a start-up engaged inter alia in the design andmanufacture of e-Tractors. The e-Tractors developed by Cellestial offer several advantageslike a swappable battery and lower total cost of ownership compared to the conventionalinternal combustion engine tractors. Besides these e-Tractors will also result in lowercarbon di-oxide emissions promote green farming and will take a step towards a circulareconomy.

Further another new Company viz. M/s. Cellestial E-Trac PrivateLimited was incorporated as a wholly-owned subsidiary of Cellestial on 25thFebruary 2022 with an authorized share capital of `5 lakhs. The paid-up capital of thesaid Company as on 31st March 2022 was `1 lakh.

Cellestial is currently working towards building 7 prototypes withdifferent mechanical variants catering to different customer and industry segments.Product testing is at its peak and a roadmap has been prepared for product variations newproduct development and platform development. Distribution partners are also being onboarded. It has also finalized a location in Chennai for manufacturing.

6. Business Review – Standalone

6.1. Mobility Business TI's Presence

Mobility segment of the Company comprises of bicycles of the Standardand Special variety including alloy bikes & speciality performance bikes cyclingaccessories bicycle components sold as spares and home fitness equipment. This year thescope of business expanded by introducing the flagship product of e-bicycle.

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 cater to recreational usage where the product is used for funfitness and leisure activities. During the year under review the trade industry witnesseda negative growth of about 13% as against the previous year. Standards de-grew by 13% andSpecials too de-grew by about 14%. In addition to this movements by the unorganizedplayers based on economy offerings have also impacted the organized trade (All India CycleManufacturer's Association-AICMA) players' sales volume.

Significant increase in commodity prices over last year has impactedproduct pricing in the market resulting in consumers downgrading to mass and economyrange of products. In addition to this the cycling euphoria of 2021 post the firstlockdown was not seen post the second lockdown as schools workplaces and fitness centresopened up changing the consumer behaviour towards cycling resulting in a market drop.

Over 86% of the country's requirements are met by four majorplayers and the smaller regional players and imports constitute the balance. TheCompany's cycles business viz. TI Cycles enjoys a share of about 26% of the totalorganised trade market. The Company's exports segment registered a growth of 23% ande-commerce by over 100% compared to the last fiscal.

Review of Performance

TI Cycles sold about 20.6 lakh bicycles during the year in trade whichwas lower by 6.6% compared to the previous year. Overall Trade bicycle industry itselfregistered a de-growth of 13% over the previous year. Despite tough market conditions TICycles registered an overall market share gain of 1.8%. The thrust on Specials segment wasdriven through frequent new product launches product innovations enhanced digitalmarketing and superior consumer experience through exclusive retail outlets under theexclusive retail brand ‘Track & Trail'. Moreover the expansion of exportbusiness and domestic spares business is considered to be a new avenue of business to theCompany. To participate in the growing economy sub-segment 9 low cost products werelaunched in major categories like Kids and Mountain Terrain Bikes (MTB).

In 2021-22 66 new model bicycles were launched and 23 models wererefreshed. 24% of the trade sales volume came from new products.18 innovations wereintroduced for the first time in the industry notable among them being introduction ofsplit basket in junior SLR pedal light dual braking force turbo drive 2.0 and anti-slipchain 2.0.

On the consumer outreach front the business onboarded Mr. RishabhPant well known Indian cricketer as the brand ambassador for Hercules and consistentlyran digital influencer campaigns for its major brands with BSA Ladybird HerculesRoadeo and Montra delivering a significant lift in brand awareness. The objective of thecampaigns was to increase brand awareness and product consideration among the targetgroup.

6.2. Engineering TI's Presence

The Engineering segment of the Company consists of Cold Rolled SteelStrips (CRSS) and precision steel tubes viz. Cold Drawn Welded tubes (CDW) and ElectricResistance Welded tubes (ERW). These products primarily cater to the needs of theautomotive boiler bicycle general engineering and process industries. The Company isfurther engaged in the manufacture of large diameter welded tubes mainly for non-autoapplication which are largely imported.

Industry Scenario

During 2021-22 the automotive industry's production volumede-grew by 6%. Passenger vehicle and commercial vehicle grew by 19% and 29% respectivelyand two-wheeler segment de-grew by 3% over the previous year.

Review of Performance

The Engineering segment was able to grow its volumes leveraging thegrowth of passenger vehicles and commercial vehicles. The business also focussed andrealized the increased opportunities in the export market. The volumes of tubes indomestic business grew by 18% CRSS business grew by 14% and large diameter tubes grew by26%. Overall export volume grew by 98% during the year.

The business continued to drive efficiency improvement and spendingcapital expenditure prudently on critical growth projects.

The business started Lean implementation for eliminating/reducingwastes in the value chain by focussing on productivity & quality improvementinventory reduction & creating a flow in production system using Lean tools &techniques.

Career path initiatives were taken up to provide opportunities toemployees within the organization for new openings and to enable cross function exposureand growth.

The business continued to participate in the reviews of the USDepartment of Commerce on the complaint of alleged dumping of cold-drawn steel mechanicaltubes from India and some other countries the Countervailing Duty (CVD) and Anti-dumpingDuty (AD) on the Company's exports to the US market to reduce duty rates to enhanceexport volumes.

6.3. Metal Formed Products

TI's presence

Automotive chains fine blanked products roll-formed car doorframesand cold roll formed sections for passenger coaches constitute the Metal Formed Productssegment.

During 2021-22 production of two-wheeler segment de-grew by 3% andpassenger cars grew by 17%.

The financial year was a challenging one amidst the rise in steelprices global shortage in semi-conductor chips coupled with negligible growth of autoindustry. The business demonstrated resilience despite these challenges through prudentcapital spending operating with an optimum working capital along with control over costs.

This segment is one of the major players in the manufacturing of rollerchains and fine blanked parts for the automotive industry in India.

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.

Post COVID-19 pandemic the Railways business continued to go through aturbulent phase as demand continues to be subdued.

Review of Performance

Due to State-wide lock down in first few months of the year all thebusinesses were affected during the first quarter. Though the first quarter was impacteddue to the pandemic the auto segment improved from the second quarter onwards. The globalshortage of semi-conductor chips affected certain segments of the businesses during theyear. The Company continued to focus in the aftermarket segment benefiting from thetwo-wheeler population growth. The replacement market continues to provide opportunitiesfor growth notwithstanding good competition and the business expects to strengthen onsales structure deepen its coverage and launch new products for new categories.

Doorframe sales were higher by 11% during 2021-22 and the businessmanages to hold on to market due to good traction seen in select models with renowned automajors. The focus is on generating more business from the auto OEMs leveraging the Tier-1position with specific emphasis on roll formed products and other tubular parts used inpassenger cars. In addition increased volumes in coach parts focus on metros andexpanding the customer/product base are some of the driving factors that will put theRailways business back on track.

6.4. Others Segment

Effective 1st April 2021 the Company has reorganizedcertain business units and its operating structure across all the business units and areporting segment "Others" was formed.

This segment consists of the Industrial Chains and New Businesses ofthe Company viz Truck Body Works TMT Bars and TI Opto Electronic Solutions

Industrial Chains business manufactures Power Transmission ChainsEngineering Class Chains Agricultural Chains and Textile Chains for use in agriculturecement steel sugar textiles food and other sectors. This business has performed wellduring the year with healthy growth in both domestic and exports.

New businesses comprising of Truck Body Works TMT Bars and TI OptoElectronic Solutions have begun to stabilize post the 1st and 2ndwave of COVID-19 pandemic and are expected to grow their performance in the coming years.

7. Dividend

The Board of Directors declared an Interim Dividend of `2/- per share(@ 200%) on equity share of face value of `1/- each for the financial year 2021-22 whichwas paid on 4th March 2022 to all the eligible shareholders. Final dividend of`1.50/- per share (@ 150%) has been proposed by the Board for the said financialyear and together with the Interim Dividend of `2/- per equity share already declared andpaid in respect of the financial year 2021-22 `3.50 per share (@ 350%) will beconsidered as the total Dividend for the said financial year.

The dividend payout is in accordance with the Company's Policy onDividend Distribution. The said Policy as approved by the Board is uploaded and isavailable on the following link on the Company's website:https://tiindia.com/dividend-distribution-policy/

Details thereof also form part of this Annual Report for theinformation of shareholders.

8. Share Capital

The paid-up Equity Share Capital of the Company as on 31stMarch 2022 was `192950221/- consisting of 192950221 Equity Shares of the face valueof ` 1/- each fully paid up.

9. Finance

Cash and Cash Equivalents as at 31st March 2022 were `2.36Cr. In addition the Company has investments in liquid schemes of mutual funds for `280.45Cr. The Company continues to focus on judicious management of its working capital. TheCompany took many steps during the year to improve the working capital turns. The workingcapital parameters were kept under strict check through continuous monitoring.

9.1. Non-Convertible Debentures

During the year Non-Convertible Debentures (NCDs) aggregating `50 Cr.were redeemed. As at 31st March 2022 NCDs aggregating `50 Cr. wereoutstanding which were subsequently redeemed in April 2022 on the due date. Accordinglyno NCDs of the Company are outstanding as on date of this Report.

9.2. Deposits

The Company has not accepted any fixed deposits under Chapter V of theAct and as such no amount of principal and interest were outstanding as on 31stMarch 2022.

9.3. Particulars of Loans Guarantees or Investments

During the year under review the Company incorporated a Wholly-OwnedSubsidiary M/s. TI Clean Mobility Private limited ("TICMPL") and invested `100Cr. in its equity capital. Further the Company had given an Inter-Corporate Loan of `64Cr. to TICMPL under Section 186 of the Companies Act 2013 the details relating to whichform part of the Notes to the Audited Financial Statements provided in this Annual Report.

During the year under review the Company made a strategic investmentin M/s. Aerostrovilos Energy Private Limited ("AEPL") a Chennai based start-upengaged in the development of micro-gas turbine technology by way of subscription to4151 equity shares for an aggregate sum of `3.46 Cr. representing 27.78% of the paid-upequity share capital of AEPL and 25% of the equity share capital considering the ESOPPool. Consequently AEPL became an associate Company with effect from 24thNovember 2021. AEPL is currently carrying on the process of building the proto-type ofmicro gas turbine.

During the year under review in February 2022 the Company exercisedthe option to convert 9 crore Share Warrants into equal number of equity shares of M/s. CGPower and Industrial Solutions Limited ("CG Power") the Company'ssubsidiary by paying the balance subscription amount of `57.78 Cr. and was allotted equalnumber of equity shares by CG Power.

Post allotment of the shares on conversion of the Share Warrants theCompany holds 801251887 equity shares of `10/- each fully paid up of CG Powerconstituting 55.57% of the subscribed and paid up capital of CG Power.

The Company decided to exercise the option to convert the remaining85233645 Share Warrants in May 2022 into equity shares of CG Power in the currentfinancial year 2022-23 and paid the balance of the purchase consideration of about `54.72Cr. Post allotment of the shares in respect of the second and final conversion ofWarrants the Company holds 886485532 equity shares of `10/- each representing 58.05%of the subscribed and paid up capital of CG Power on a fully diluted basis.

Consequent to the improved business performance of CG Power State Bankof India ("SBI") the lender of CG Power released and cancelled the corporateguarantee earlier provided by the Company in favour of SBI towards the fund-basedfacilities aggregating `1365 Cr. extended by SBI to CG Power.

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 Audited Financial Statements provided in this Annual Report.

9.4. Consolidated Financial Highlights

Rs. in Cr.
Particulars 2021-22 2020-21
Revenue from contract with customers (net) 12060.40 5827.46
Profit before share of profit of a Joint Venture and Exceptional items 1134.87 406.38
Share of profit/ (Loss) of Joint Venture (2.92) -
Exceptional items 20.21 (41.88)
Profit Before Tax and exceptional items 1152.16 364.50
Tax Expense 160.77 78.76
Profit for the year before Minority
Interest and share of profit from Associate 991.39 285.74

10. Business Review – Subsidiaries and Joint Venture

10.1. Shanthi Gears Ltd (SGL)

SGL a subsidiary of the Company recorded revenue of `337 Cr. in2021-22 against `216 Cr. in the previous year. Profit before tax was `59 Cr. (previousyear: `26 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 declared and paid an Interim Dividend of `2.50 per share for thefinancial year 2021-22.

10.2. Financi?re C10 SAS (FC10)

FC10 the Company's wholly-owned subsidiary in France recordedconsolidated revenue of Euro 33 Mn. in 2021 (previous year: Euro 26 Mn.). The profit aftertax for the year was Euro 0.25 Mn. as compared with the loss of Euro 0.67 Mn. in theprevious year. The consolidated results of FC10 include results of its subsidiaries viz.Sedis SAS Sedis GmbH and Sedis Co Ltd in UK.

10.3. 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 `32 Cr.(previous year: `19 Cr.) and registered profit before tax of `9 Cr. (previous year profitbefore tax: `2 Cr.).

10.4. 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 `77 Cr.(previous year: `41 Cr.) and registered loss before tax of `14 Cr. (previous year lossbefore tax: `2 Cr.).

10.5. CG Power and Industrial Solutions Limited (CG Power)

CG Power is the Company's subsidiary acquired in November 2020.The Company holds 55.57% of CG Power's equity capital.

During the year under review CG Power recorded revenue of `5561 Cr.and registered profit before exceptional items and tax of `527.82 Cr.

The operations of CG Power have stabilized and its performance hasregistered an impressive turnaround during 2021-22 which only reaffirms the confidence ofthe Board at the time of acquisition that CG Power would create better value for itselfand the Company in the coming years.

10.6.TI Clean Mobility Private Limited (TICMPL)

TICMPL is the Company's wholly-owned subsidiary incorporated on 12thFebruary 2022.

During the year under review TICMPL recorded Nil revenue andregistered a loss before tax of `12.96 Cr.

During the year under review Cellestial E-Mobility Private Limitedrecorded revenue of `0.06 Cr and registered a loss before tax of `4.36 Cr

10.7. TI Tsubamex Private Limited (TTPL)

Consequent to discontinuance of its business operations theapplication made by TTPL to the Registrar of Companies Tamilnadu Chennai (RoC) wasapproved and the name of TTPL was struck off the Register of Companies maintained by theRoC and TTPL stood dissolved effective 25th October 2021.

11. Financial Review

11.1. Profits & Profitability

The Profit before Tax and exceptional items has registered a growth by65%. All the business segments of the Company maintained their focus on servicingcustomers improving efficiencies controlling working capital and reducing resourcesemployed in the business.

11.2. Capital Expenditure

The Company continues to assess the trends emerging in the industry andthe changing requirements of its customers and invests appropriately for the long-termwith a view to servicing its customers in a more timely and efficient manner.

11.3. Interest Cost

The Company's interest cost reduced to `12 Cr. in 2021-22 from `19Cr. in the previous year mainly on account of lower borrowing and better management ofnet working capital. The Company had a net debt of `65.26 Cr. (Net of borrowings cash andinvestment in mutual funds; and debt securities) as on 31st March 2022 ascompared to the cash surplus (Net of borrowings cash and investment in mutual funds; anddebt securities) of `10 Cr. as on 31st March 2021.

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 2021-22 FY 2020-21

% change over previous year

Reasons
1 Interest Coverage Ratio (times) 60.4 25.2 139.6% Favourable average borrowing rates
2 Debt-Equity Ratio (times) 0.1 0.1 (4.3%) -
3 Net Profit Margin 7.5% 6.4% 17.1% Improvement in profit mainly due to reduced fixed cost and interest cost
4 Return on Net Worth 17.6% 11.9% 47.7%
5 Return on Capital Employed 22.6% 17.8% 27.0% Increase in profits with improved business scenario
6 Revenue Growth 49.0% (0.5%) Higher sales driven primarily after post-pandemic period
7 Debtors Turnover (times) 9.5 8.4 13.1%
8 Inventory Turnover (times) 7.1 5.4 31.5% Better management of working capital
9 Current Ratio (times) 1.1 1.0 10.0%
10 Operating Profit Margin 12.3% 12.9% (0.1%) Increase in profits with improved business scenario

*Ratios are tracked by the Company on a standalone basis

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 its operationsthe Company 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 properly authorised;

• Adherence to Accounting Standards compliance to applicable Statutes Companypolicies and procedures and timely preparation of financial statements;

• 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.

In its continued efforts to further strengthen its Internal Auditprocess through utilizing the services of a specialist agency in order to benefit from thebest of practices available (including the use of analytical tools) to monitor variousprocesses the Company has re-appointed M/s. Price water house Coopers ("PwC")as Internal Auditors of the Company for the current financial year 2022-23 also. TheCompany is seeing benefits from the professional approach and practises adopted by thesaid Internal Auditors.

The Audit Committee of the Board of Directors comprising ofindependent 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 the Actwhich call for establishment and implementation of an Internal Financial Control frameworkthat supports compliance with requirements of the said Act in relation to theDirectors' 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 the 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 17thJune 2021 27th October 2021 and 16th March 2022 and reviewed therisks and mitigation plans of the SBUs of the Company. Some of the risks associated withthe business and the related mitigation plans are discussed hereunder. The risks givenbelow are not exhaustive and the evaluation of risk is based on management'sperception.

12.1. Bicycles and Components

Risk Why considered as Risk Mitigation Plan/Counter Measure
Product • Decline in sales revenue and profitability • Adapt to product alternatives like E-bikes
Obsolescence Risk • Increase in inventory • Export markets
• Activations to promote cycling as a lifestyle/ fitness category
• Monitor NPD (new product development) cycle and address the exceptions periodically
Sourcing Risk • Raw material supply chain issues due to pandemic • Continuous upgrading of vendor capability through Vendor score card rating and closing the gaps implementing Kaizens and ensuring timely delivery
• Volatility in volumes
• Continuous increase in raw material price • Relationship building and ensuring stable volumes to keep the supplier operations running through altering SoBs and rationalizing the supply base continuously
• Reduce import dependency and pass on the increase to market ensuring commodity settlement to suppliers every month
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 & Profitability Risks • Shift to mass premium from premium • Be price competitive and leverage innovation
• High price competition in specials • Premium imagery and designs at competitive price points
• Increase in number of unbranded players with competitive offering • Retail 2.0 with a vision to enhance consumer in-store experience and store footprint
• Focus in optimized sourcing thereby have price competitive products
• Increase focus on brand awareness & visibility initiatives
Technology Risk • Lack of capacity and capability to handle large scale shift to alloy bikes • Capability building for manufacture and assembly of alloy bikes by
- Frame alloy manufacturing
- Water Decal establishing
- Support indigenization for all imported components excepts gears & shifters
• Establishing reliable source for high end bikes by approval of alloy tube manufacturer
• Development of alloy child parts

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
• To study the new opportunities that will emerge with the launch of electric vehicles and plan for participation in same
• Drive efficiency improvement through Lean approach for sustainable competitive advantage
Technology Obsolescence Risk • Cheaper alternatives for auto applications affecting revenue streams • Imbibing new and relevant technologies
• Equipment upgradations 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 • Back-to-back arrangement with customers to ensure timely recovery of steel price increases
• High inventory holding
• Global sourcing
• 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 • Capability building
• Need for higher capability • Focusing on new product categories and newer markets across geographies
• Continue participation in US AD/CVD reviews to reduce duty rates
• Efficiency improvement through Lean approach for sustainable competitive advantage
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 exports
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
• ‘High quality' image • Leverage leadership and competitive position in industry
• 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
• Arrangement with customers for the timely recovery of steel price increases
Technology risk • Advent of 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 • Delay in implementation • Effective project management
Risk • 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 linkhttps://tiindia.com/csr-policy/.

As per the provisions of the Act the Company was required to spend`7.34 Cr. and had also carried forward an excess balance of `1.17 Cr. After adjustment ofthe said excess carried forward balance the minimum mandatory amount required to be spentduring the financial year 2021-22 was `6.17 Cr against which the Company spent `6.48 Cr.towards identified CSR projects in the fields of education health care and publicinfrastructure during the year.

The Annual Report on CSR for 2021-22 is annexed to and forms part ofthis Report as well as in the Company's website at the following link https://tiindia.com/csr-budget-and-spend-details/

14. Corporate Governance

The Company is committed to maintaining high standards of corporategovernance.

The Company was wholly in compliance with the requirements of theListing 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. The Managing Director and the ChiefFinancial Officer have submitted a certificate to the Board regarding the financialstatements and other matters in terms of Part B of Schedule II [Corporate Governance] ofthe 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 Report.

The Business Responsibility Policy of the Company is displayed in theCompany's website at the following linkhttps://tiindia.com/business-responsibility-policy/

With the increasing emphasis on reporting on the ESG (EnvironmentalSocial and Governance) matters the Company has taken steps to bring focus to ESGinitiatives.

16. Human Resources

The Company continues 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 initiatives taken by the Company are in line with its long-term HRstrategy drawn up with three broad thrust areas – TI Way of working TI talentdevelopment and creating a high-performance work culture.

As the Company embarked on its ambitious plan for expansion and growthit has co-created a comprehensive operational framework to guide the employees in thisjourney covering all divisions/ business units/functions. ‘TI Way' is a set ofguidelines for critical processes in the organization thereby uniting their approachesirrespective of the business units. TI Way rests on key three pillars – processdiscipline organisational oneness and achievement orientation and powered by three keydirectional initiatives – talent development Lean management and businessacquisition. The journey on all these three initiatives has started well.

As part of the talent development engine the Company has developed aframework that will ensure a structured approach towards identification development andavailability of talent ready pool for occupying elevated roles in top middle and juniormanagement categories. The Company has constituted a ‘Talent Board' which is anintegral part of the talent development engine. The Talent Board will play an active rolein development of resources across levels and will guide support and constantly reviewthe various developmental actions interventions and suggest appropriate next steps foraccelerated talent development in the Company.

In order to further strengthen the value chain and being competitivethe Company focuses on "we must to do more with less" and adapt to changes inthe market and economy. In line with this the Company started the Lean implementation foreliminating/ reducing wastes in the value chain and for improving customer defined valueto products and services. Lean is being practised at Tube Products of India TI Cycles ofIndia Industrial Chains and the Fine Blanking businesses and also at Shanthi GearsLimited focussing on Muda (waste) elimination implementation of standard workproductivity & quality improvement inventory & creating a flow in the productionsystem using Lean tools & techniques.

The total number of permanent employees on the rolls of the Company ason 31st March 2022 is 3107.

Industrial relations continued to remain cordial at all theCompany's units during the period under review.

The information relating to employees and other particulars requiredunder Section 197 of the Act read with Rule 5 of the Companies (Appointment &Remuneration of Managerial Personnel) Rules 2014 will be provided upon request. In termsof Section 136 of the Act the Report and Accounts are being sent to the Members excludingthe information on employees particulars of which are available for inspection by theMembers at the Registered Office of the Company during business hours on all working daysof the Company up to the date of the forthcoming Annual General Meeting. If any Member isinterested in obtaining a copy thereof such Member may write to the Company Secretary inthe said regard.

The disclosure with regard to remuneration as required under Section197 of the Act read with Rule 5 of the aforementioned Rules is attached and forms part ofthis Report.

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 aforementioned Act. The policy extends to allemployees (permanent contractual temporary and trainees). Employees at all levels arebeing sensitized about the said Policy and the remedies available thereunder.

No complaints were received by the ICC during the year under review andno complaint was pending as at the end of the year.

18. Employee Stock Option Scheme

During the year under review the Company had granted 285400 Optionsto eligible employees under its Employee Stock Option Plan viz. ESOP 2017.

Details in respect of the ESOP 2017 as required under the relevant SEBIRegulations are displayed in the Company's website at the following link: https://tiindia.com/esop/

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 the preparation of the annual Financial Statements for theyear ended 31st March 2022 the applicable accounting standards have beenfollowed along with proper explanation relating to material departures if any;

b) that such accounting policies as mentioned in the Notes to theFinancial Statements have been selected and applied consistently and judgment andestimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31st March 2022 and of theprofit of the Company for the year ended on that date;

c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d) that the annual Financial Statements have been prepared on a going concern basis;

e) that proper internal financial controls to be followed by the Company have been laiddown and that the financial controls are adequate and were operating effectively; &

f) that proper systems have been devised to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

20. Auditors

M/s. S R Batliboi & Associates LLP Chartered Accountants (FirmRegistration Number : 101049W/ E300004) were appointed as Statutory Auditors at the 9thAnnual General Meeting held on 6th November 2017 for a period of five yearsviz. from the conclusion of the said 9th Annual General Meeting till theconclusion of the ensuing 14th Annual General Meeting.

As the term of the Statutory Auditors is valid only till the ensuingAnnual General Meeting it is proposed to re-appoint M/s. S R Batliboi & AssociatesLLP Chartered Accountants as Statutory Auditors of the Company for a second term towhich they are eligible under the Act.

The Statutory Auditors will be completing audit of the financials ofthe Company for a continuous period of ten years in FY 2025-26 if their appointment in thecasual vacancy to do the statutory audit in FY 2016-17 is also reckoned. It is henceproposed to recommend a second term of four years only for re-appointment of the StatutoryAuditors viz. from the conclusion of the ensuing 14th Annual General Meetingto the conclusion of the 18th Annual General Meeting.

Necessary consent for the re-appointment has been received from M/s. SR Batliboi & Associates LLP. The resolution proposing the said re-appointment of M/s.S R Batliboi & Associates LLP as Statutory Auditors of the Company for a period offour years along with the remuneration thereof forms part of the Notice for the ensuing 14thAnnual General Meeting which the Board recommends for the shareholders' approval.

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 2022-23. Necessary resolution for ratificationof their remuneration in respect of the terms of their appointment for the financial year2022-23 forms part of the Notice for the ensuing Annual General Meeting which the Boardrecommends for the shareholders' approval.

21. 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.

The Company did not enter into any materially significant related partycontracts or arrangements or transactions during the financial year which may have apotential conflict with the interest of the Company at large or which is required to bereported in Form No. AOC-2 in terms of Section 134(3)(h) read with Section 188 of the Actand Rule 8(2) of the Companies (Accounts) Rules 2014.

Necessary disclosures as required under the Indian Accounting Standardshave been made in the 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 https://tiindia.com/rpt-policy/.None of the Directors had any pecuniary relationships or transactions vis-?-visthe Company.

22. Directors

During the year under review the following key Board level changeswere effected to evolve and realign the senior management team after considering thegrowth aspirations in the existing businesses the number of new initiatives/businesses inthe anvil and towards long-term succession planning:

- Mr. M A M Arunachalam who was the non- executive Chairman till 31st March2022 was appointed as a Whole-time Director (Key Managerial Personnel) designated as theExecutive Chairman for a 5-year term of Office from 1st April 2022 to 31stMarch 2027 (both days inclusive) for guiding the Company's existing businessinterests helping in identifying new business interests actively promoting goodgovernance nurturing business relationships and other corporate affairs includingrepresenting the Company at various forums interacting with the Government for activepromotion of the Company's business interests etc.;

- Mr. Vellayan Subbiah who was the Managing Director till 31st March 2022was appointed as a Whole-time Director (Key Managerial Personnel) designated as theExecutive Vice Chairman for a 5-year term of Office from 1st April 2022 to 31stMarch 2027 (both days inclusive) for providing the overall leadership identifying thegrowth vectors for the Company and look at the long-term business opportunities organicas well as inorganic besides continuing to provide tactical direction to guide andsupport the business teams and its leaders in strategic and operational matters; and

- Mr. Mukesh Ahuja who was heading Tube Products of India the largest division of theCompany was appointed as Additional Director and as the Managing Director (Key ManagerialPersonnel) for a 5-year term of Office from 1st April 2022 to 31stMarch 2027 (both days inclusive) as part of long-term succession planning and in view ofappointment of Mr. Vellayan Subbiah as the Executive Vice Chairman to focus on growingthe existing businesses and to facilitate future growth of the Company.

Mr. Tejpreet Singh Chopra was appointed by the Board of Directors as anAdditional Director in the Independent Director category of the Company on 16thMarch 2022.

In respect of all the four appointments as aforementioned the Boarddecided to recommend the same to the shareholders and further seek the approval of theshareholders through the issue of a Notice of Postal Ballot & E-voting dated 12thMay 2022 since the amended SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 stipulates inter alia that in respect of appointment of anydirectors shareholders' approval be taken within three months from the date ofappointment by the Board of Directors.

Consequent to his appointment as the Executive Vice Chairman(Whole-time Director) effective 1st April 2022 Mr. Vellayan Subbiahstepped down as ManagingDirectoreffectivecloseofbusinesshourson 31st March2022.

The Board further places on record its appreciation of the major roleplayed by Mr. Vellayan Subbiah as the Managing Director of the Company during his term ofOffice from 19th August 2017 to 31st March 2022 in actively drivingthe growth of the existing businesses of the Company apart from providing strategicdirection for the acquisitions and step outs into new lines of business by the Company.The Board also wishes him Mr. M A M Arunachalam and Mr. Mukesh Ahuja the very best intheir respective new roles.

During the year 2021-22 Ms. Madhu Dubhashi Independent Directorretired on the completion of her second term at the 13th Annual GeneralMeeting of the Company. Mr. Mahesh Chhabria Independent Director resigned from the Boardin October 2021 citing potential conflict of interest on account of the Company'sbusiness strategies with his senior management position with another Company.

The Board places on record its appreciation of the distinguishedservices rendered by Ms. Madhu Dubhashi and Mr. Mahesh Chhabria during their term ofoffice as Directors of the Company.

Mr. K R Srinivasan President and Whole-time Director retires byrotation at the ensuing Annual General Meeting to facilitate the compliance of therequirements of Section 152 of the Act and being eligible he offers himself forre-appointment. The Board based on and after taking into consideration therecommendations of the Nomination and Remuneration Committee recommends the re-appointmentof Mr. K R Srinivasan as Director not liable to retire by rotation at the forthcomingAnnual General Meeting.

All the Independent Directors of the Company have furnished thenecessary declaration in terms of Section 149(6) of the Act affirming that they meet thecriteria of independence as stipulated thereunder. 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 and are independent of the management.

23. Declarations/Affirmations

During the year under review:

- there were no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate viz. 31st March 2022 and the dateof this Report; &

- there were no significant material orders passed by the regulators or courts ortribunals impacting the Company's going concern status and its operations in future.

24. Secretarial Audit

Pursuant to the provisions of Section 204 of the Act and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. R Sridharan of Messrs.

R. Sridharan & Associates a firm of Company Secretaries inPractice to undertake the Secretarial Audit of the Company. The Report of the SecretarialAuditor is annexed herewith and forms part of this Report.

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