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EQUITY - MARKET SCREENER

Tube Investments of India Ltd
Industry :  Cycles And Accessories
BSE Code
ISIN Demat
Book Value()
540762
INE974X01010
140.0006182
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
TIINDIA
65.6
31174
EPS(TTM)
Face Value()
Div & Yield %
24.63
1
0.22
 

As on: May 20, 2022 07:15 AM

Dear Shareholders,

The Directors take pleasure in presenting the 13th Annual Report together with the audited financial statements of the Company for the year ended 31st March 2021.

1. Business Environment

Outbreak of the COVID-19 pandemic in early 2020 and the sharp resurgence of the pandemic again in the recent months of 2021, even as the situation appeared to be kept under good control, in the form of a more serious and devastating second wave, have come to pose an unprecedented global crisis, of a scale never witnessed before in the annals of the history of mankind. Measures to contain rapid spread of the pandemic through the imposition of lockdowns/lockdown like restrictions, while helping in stemming the spread of the pandemic to a large extent, have, at the same time, applied brakes on economic activity with serious implications to consumption and investment. The impact is well evident as India's Gross Domestic Product (GDP) contracted by 7.3%, in 2020-21 as per the provisional National Income estimates released by the National Statistical Office recently. The Gross Value Added (GVA) in the economy shrank 6.2% in 2020-21 compared to an increase of 4.1% in the previous year. While this is the bleakest performance on record for the economy, the fourth quarter of 2020-21 helped in repairing the damage, with a higher than expected growth of 1.6% in the GDP. This marked the second quarter of positive growth after the country entered a technical recession in the first half of the year. With a lower contraction in the GDP as well GVA in 2020-21, the sharp recovery projected for 2021-22 for the Indian economy by a number of agencies like the International Monetary Fund, at 12.5% and the Reserve Bank of India, at 10.5% may appear difficult at this point as the scourge of the Novel Coronavirus has returned to hurt and blunt economic activity once again.

Although the global economic output is recovering from the collapse triggered by the COVID-19 pandemic, it appears that it will remain below pre-pandemic trends for a prolonged period of time. The pandemic has exacerbated the risks associated with a decade-long wave of global debt accumulation. As per the World Economic Update issued by the World

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

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

As per the Society of Indian Automobile Manufacturers (SIAM), the apex automobile body in the country, all segments of the Indian auto sector witnessed a de-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% and two-wheelers (2Ws) at -9.2%.

As the country is still trying its best to navigate through this unparalleled crisis, the Government and the Reserve Bank of India are taking well calibrated measures to support a robust economic recovery. The Union Budget 2021 was one good example of the initiatives of the Government in focusing on regaining the growth momentum in the economy through several measures including keeping the tax rates stable and enhancing investments in infrastructure.

2. Standalone Financial Highlights

(Rs in Cr.)
Particulars 2020-21 2019-20
Sale of Products 4,026.23 4,052.67
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 of profit 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 4,026 Cr., registering a very marginal de-growth of 0.7% over the previous year due to country wide lockdown imposed on account of the outbreak of COVID-19 pandemic. The Company focused on reducing fixed costs, manage working capital more efficiently and making capital expenditure prudently on critical growth projects. The Profit before Depreciation, Interest, Exceptional Items and Tax was at Rs 549 Cr. as against Rs 610 Cr. in the previous year. The Profit before Tax and Exceptional Items was at Rs 381 Cr. as against Rs 421 Cr. in the previous year.

During the year, the Company implemented voluntary retirement schemes in certain locations at a cost of Rs 22 Cr. to improve the productivity and competitiveness of its business. This is shown as exceptional loss in the financial statements.

The Cycles and Accessories segment recorded revenue of Rs 847 Cr. as compared to Rs 781 Cr. during 2019-20, a growth of 8%, despite the adverse market conditions and pandemic. The operating profit before interest and tax stood at Rs 44 Cr. as compared to Rs 26 Cr. during the previous year, registering a growth of 70%.

The Engineering segment registered revenue of Rs 2,317 Cr. as compared to Rs 2,258 Cr. during the previous year. The operating profit before interest and tax stood 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 1,274 Cr. as compared to Rs 1,399 Cr. during the previous year, a de-growth of 9%.

The operating profit before interest and tax stood at Rs 87 Cr. as compared 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 the lockdown/curfew introduced by the Central and State Governments, the operations in the Company's manufacturing plants situated across various locations of the Country had to be shut down or were disrupted till the latter half of April 2020.

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

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

Considering the seriousness of the pandemic situation, the Company is taking various measures to ensure the health and safety of its employees and to comply with the directives regularly being issued by the Central and the respective State Governments besides the local authorities at all its business locations. The Company will continue to monitor the situation for taking timely action based on the guidance from the Governments and the authorities.

The Company has considered the possible effects/ impact arising from COVID-19 on its financial results for the year 2020-21 and at this stage, it has concluded that no material adjustments are required to the same. The Company will continue to closely 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 interest in M/s. CG Power and Industrial Solutions Limited ("CG Power"), which is engaged in the industrial and power sector, with its equity shares listed on the BSE Limited and the National Stock Exchange of India Limited. CG Power has 18 manufacturing facilities and provides gainful employment to over 11,000 persons directly and indirectly.

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

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

The Company further decided in early September 2020 to make an additional investment to facilitate the enhanced funding needs of CG Power, as subsequently assessed, by way of subscription to additional equity shares on a preferential issue basis for about Rs 100 Cr.

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

The Company was allotted on 26th November 2020 by CG Power, upon making the agreed investment, a) 64,25,23,365 equity shares of the face value of Rs 2/- each at a price of Rs 8.56/- (including premium) per equity share, for an aggregate consideration of about Rs 550 Cr.; & b) 17,52,33,645 warrants, each carrying a right exercisable by the Company as the warrant holder to subscribe to equal number of equity shares 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 upon exercise of the warrants.

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

Subsequently, on 19th December 2020, the Company was allotted 6,87,28,522 equity shares of Rs 2/- each at a price of Rs 14.55/- per equity share (including premium) for an aggregate consideration of about Rs 100 Cr. towards the additional investment committed by the Company.

Arising from the above, the Company presently holds 71,12,51,887 equity shares of Rs 2/- each of CG Power, resulting in a 53.16% shareholding, and along with the investment in 17,52,33,645 convertible share warrants as per details aforementioned, the Company holds an aggregate shareholding of 58.58% in CG Power on a fully diluted basis.

Towards easing of the fund constraints of CG Power, the Company, with the approval of its shareholders, at the Extraordinary General Meeting held on 30th November 2020, pursuant to Section 186 of the Companies Act, 2013 and the Rules thereunder, furnished guarantee(s) in favour of the lenders of CG Power for the financial assistance to be availed by CG Power for an aggregate amount of up to Rs 1,365 Cr. CG Power is well on course to improve its financial and operational performance so as to service and satisfy fully all its debts by itself without any need for the lenders of CG Power to seek recourse to the guarantees furnished by the Company.

CG Power completed the One Time Settlement (OTS) process with its existing lenders on 24th December 2020 (confirmed on 28th December 2020) with payment of an upfront consideration of Rs 650 Cr., submission of counter guarantee for the non-fund based facilities, issuance of unrated, unsecured, unlisted, non-convertible debentures for Rs 200 Cr. and the recognition of debt of Rs 150 Cr. in the books against its corporate headquarters viz., CG House property. As per the terms of the OTS process, the lenders of CG Power provided a waiver of about Rs 1,100 Cr.

With the credit lines becoming assured and regular, post-acquisition of controlling interest by the Company, CG Power has started showing steady improvement in its operational and financial performance and the Board of Directors of the Company is confident that the operations of CG Power would, barring any unforeseen developments, stabilize and turnaround within a reasonable period of time and also create better 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 bicycles of the Standard and Special variety including alloy bikes & specialty performance bikes, cycling accessories, bicycle components sold as spares and home fitness equipment.

Industry Scenario

Bicycles fall under two distinct categories – Standards and Specials. While Standard cycles are largely used for commuting, especially in small towns & rural areas, Special cycles cater to recreational usage, where the product is used for fun, fitness and leisure activities. During the financial year, the Trade industry witnessed a growth of about 8% as against the previous year. Standards have de-grown by 10% and Specials have grown by about 20%. However, Performance Cycling Group (PCG) as a subset of Specials have declined by 10% due to lower affinity for premium products in general. In addition to this, movements by the unorganized players based on economy offerings 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 major players. The smaller regional players and imports constitute the balance. TI Cycles enjoys a share of about 24% of the total organised trade market with a much higher share in the premium segment.

Review of Performance

Due to nation-wide lock down in first few months of the year, all the businesses were affected in the initial part of the year. TI Cycles sold about 22.34 lakh bicycles during the year in trade, which is about 1.10 lakh bicycles higher as compared to 2019-20. Overall Trade bicycle industry itself registered a growth of 8.38% over the previous year. The thrust on Specials segment was driven by a concerted effort to enhance consumer experience through exclusive retail outlets under the exclusive retail brand ‘Track & Trail'. Moreover, the expansion of export business and domestic spares business is considered to be a new avenue of business to the Company. To participate in the growing economy sub-segment, 9 low cost products were launched in major categories like Kids and Mountain Terrain Bikes (MTB).

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

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

6.2. Engineering

TI's Presence

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

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

Industry Scenario

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

Across all segments of automotive industry there was a de-growth over the last fiscal year. Passenger vehicle, commercial vehicle and two-wheeler segments were lower 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 the businesses were affected in the initial part of the year. The Engineering segment was able to maintain its revenues during the year despite the adverse business environment.

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

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

The business focused on reducing working capital and spending capital expenditure 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 path initiatives were taken up to provide opportunities to employees within the organization for new openings and to enable cross function exposure and growth.

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

India and some other countries, the Countervailing Duty (CVD) and Anti-dumping Duty (AD) on the Company's exports to the US market, the Company has participated in the first review and obtained a favourable outcome which will enable improved opportunities on exports to US.

6.3. Metal Formed Products TI's presence

Automotive & industrial chains, fine blanked products, roll-formed car doorframes and cold roll formed sections for passenger coaches constitute the Metal Formed Products segment.

Industry scenario

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

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

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

Due to the COVID-19 pandemic situation, the Railways business is going through a difficult phase as demand continues to be subdued. However, the green shoots are visible 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 the businesses were affected in the initial part of the year. Though the first quarter was severely impacted due to the pandemic, the auto and industrial segments came back strongly from Q2 onwards. The Company continued to focus in the aftermarket segment benefiting from the two-wheeler population growth.

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

Doorframe sales were lower by 14% during 2020-21, consequent to the de-growth in the passenger car segment. Despite the same, the business manages to hold on to the market due to good traction seen on select models with renowned auto majors. The focus is on generating more business from the auto Original Equipment Manufacturers (OEMs), leveraging the Tier-1 position with specific emphasis on roll formed products and other tubular parts used in passenger cars. In addition, strengthening the current position in respect of coach parts, focusing on metros and expanding the customer base are some of the opportunities that are looked into closely which will drive the Railways business 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, which was 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 and together with the Interim Dividend of Rs 2/- per equity share, already declared and paid, in respect of the financial year 2020-21,

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

The dividend pay-out is in accordance with the Company's Dividend Distribution Policy. The said Policy as approved by the Board is uploaded and is available on the following link on the Company's website, http://www.tiindia.com/article/values/601.

8. Share Capital

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

9. Finance

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

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

9.1. Preferential Issue of Equity Shares

During the year, with the approval of the shareholders at the Extraordinary General Meeting (EGM) held on 21st December 2020 pursuant to Section 62(1)(c) and other applicable provisions of the Companies Act, 2013, and the Rules thereunder, the Company had issued and allotted 47,83,380 equity shares, in accordance with 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 a preferential 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 the purposes/objects as stated in the Offer document and Explanatory Statement to the Notice of the said EGM. The Board of Directors and the Company are thankful to the investors for their investment and the confidence reposed in the Company.

9.2. Non-Convertible Debentures

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

9.3. Deposits

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

9.4. Particulars of Loans, Guarantees or Investments

During the year under review, the Company entered into a Securities Subscription Agreement with CG Power and Industrial Solutions Limited ("CG Power"), pursuant to which, the Company made investments in acquiring 71,12,51,887 equity shares of Rs 2/- each viz., for a consideration of Rs 650 Cr. in the aggregate, resulting in a 53.16% shareholding in CG Power and also invested in 17,52,33,645 warrants issued by CG Power which are convertible into an equal number of equity shares at an exercise price of Rs 8.56 per share, including premium, within 18 months against which the Company has paid an upfront consideration of 25% viz., Rs 37.50 Cr., resulting in a shareholding of 58.58% by the Company in CG Power on a fully diluted basis. The Company had also given Corporate Guarantee to the lenders of CG Power in connection with the term loans and fund based working capital limits sanctioned to CG Power for an amount not exceeding Rs 1,365 Cr., after obtaining the approval of its shareholders under the provisions of Section 186 of the Companies Act, 2013, the details relating to which form part of the Notes to the financial statements provided in this Annual Report.

As part of treasury management, the Company also deploys any short-term surplus in units of mutual funds, the details relating to which form part of the Notes to the 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) 6,083.29 4,750.39
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. in 2020-21 against Rs 242 Cr. in the previous year. Profit before tax was Rs 26 Cr. (previous year: Rs 33 Cr.). During the year, SGL renewed its focus on re-establishing itself in the market and gaining new customers.

SGL continued to look at enlarging its market presence, create a robust channel, enhance its process capabilities and launch new products to meet the growing expectations of customers.

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

10.2. Financire C10 SAS (FC10)

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

10.3. TI Tsubamex Private Limited (TTPL)

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

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

10.4. Great Cycles (Private) Limited (GCPL)

GCPL is the Company's subsidiary in Sri Lanka acquired in March 2018. 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 loss before tax: Rs 1 Cr.).

10.5. Creative Cycles (Private) Limited (CCPL)

CCPL is the Company's subsidiary in Sri Lanka acquired in March 2018. 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 loss before tax: Rs 2 Cr.).

10.6. CG Power and Industrial Solutions Limited (CGPISL)

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

During the year under review, CGPISL recorded revenue of Rs 1,393 Cr. and registered profit before tax of Rs 46 Cr. between December 2020 and March 2021.

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

11. Financial Review

The statement containing salient features of the financial statements of the Company's Subsidiaries/ Joint Venture is attached as Annexure-A. The Consolidated Financial Statements of the Company and its subsidiaries, prepared in accordance 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 by 9.5% on standalone basis, considering the adverse market conditions and pandemic situation.

All the business segments of the Company maintained their focus on servicing customers, improving efficiencies, controlling working capital and reducing resources employed in the business.

11.2. Capital Expenditure

The Company continues to assess the trends emerging in the industry and the changing requirements of its customers and invests appropriately for the long-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 year 2020-21 from Rs 29 Cr. in the previous year mainly on account of lower borrowing and better management of net working capital. With strong focus on cash generation, the Company 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 31st March 2021 as compared to the net borrowing (net of Cash and Current Investments) of Rs 149 Cr. as on 31st March 2020.

11.4. Financial Ratios

The key financial ratios of the Company in which there were significant changes (more than 25%) during the financial year compared to the previous financial year, with 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 key to its effective functioning. The Company believes that internal control is one of the key pillars of governance which provides freedom to the management within a framework of appropriate checks and balances. Given the nature of business and size of operations, the Company has designed and instituted a robust internal control system that comprises well-defined organisation structure, roles and responsibilities, documented policies and procedures to reduce business risks through a framework of internal controls and processes. These controls ensure:

• Recording of transactions are accurate, complete and properly authorised;

• Adherence to Accounting Standards, compliance to applicable Statutes, Company policies 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 a well-established, independent and multi-disciplinary in-house Internal Audit function that carries out periodic audits across locations and functions. The scope and authority of the Internal Audit function is derived from the Internal Audit charter duly approved by the Management. The Internal Audit function reviews compliance vis-a-vis the established design of the internal control, as also the efficiency and effectiveness of operations. Internal Audit function is responsible for providing, assurance on compliance with operating systems, internal policies and legal requirements as well as suggesting improvements to systems and processes. It reviews and reports to management and the Audit Committee about compliance with internal controls, and the efficiency and effectiveness of operations as well as the key process risks. The Company also has established whistle-blower mechanism operative across the Company.

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

The Audit Committee of the Board of Directors, comprising of a majority of independent directors, regularly reviews the audit plans, significant audit findings, adequacy of internal controls, compliance with accounting standards as well as reasons for changes in accounting policies and practices, if any.

The summary of the Internal Audit findings and status of implementation of action plans for risk mitigation are submitted to the Audit Committee every quarter for review, and concerns if any, are reported to the Board. This process ensures robustness of internal control system and compliance with laws and regulations including resource utilisation and system efficacy.

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

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

11.6. Internal Financial Control Systems with reference to the Financial Statements

The Company has complied with the specific requirements of the Companies Act, 2013, which call for establishment and implementation of an Internal Financial Control framework that supports compliance with requirements of the said Act in relation to the Directors' Responsibility Statement.

The Company's business processes are enabled by an Enterprise-wide Resource Platform (ERP) as its core IT system. The operating management is not only responsible for revenue and profitability, but for also maintaining financial discipline and accountability. The systems and processes are continuously improved by adopting best in class processes, automation and implementing latest Information Technology tools.

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

12. Enterprise Risk Analysis and Management

The Company has an established risk assessment and minimisation framework. This framework provides a mechanism to identify the risk, evaluation of likelihood of happening and consequences. It also provides for assessment of options to mitigate the risk and develop appropriate risk management plans. There are normal constraints of time, efficiency and cost.

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

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

Some of the risks associated with the business and the related mitigation plans are discussed hereunder. The risks given below are not exhaustive and the evaluation 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 its tradition of philanthropy and community service. The Company's philosophy is to reach out to the community by establishing service-oriented philanthropic institutions in the field of education and healthcare as the core focus areas. The CSR Policy of the Company is 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 was required to spend Rs 6.33 Cr., during the financial year 2020-21. Against the same, the Company spent Rs 7.50 Cr. towards the identified CSR projects in the fields of education, health care and disaster management and relief during the year. The Annual Report on CSR for 2020-21 is annexed to and forms part of this Report as Annexure-B as well as in the Company'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 corporate governance.

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

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

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

15. Business Responsibility Reporting

As required under the SEBI Listing Regulations which mandate the inclusion of a Business Responsibility Report as part of the Annual Report for the top 1000 listed entities, the Business Responsibility Report forms part of the Annual Report as Annexure-D. The Business Responsibility Policy of the Company is displayed in the Company's website at the following link, http://www.tiindia.com/article/values/667 With the increasing emphasis on reporting on the ESG (Environmental, Social and Governance) matters, as a proactive measure in the said direction, although ESG reporting is made mandatory only from 2022-23 onwards, the Company has already taken steps to bring focus to its ESG initiatives.

16. Human Resources

The Company continued to lay emphasis on creating a high performing work culture to achieve organisational goals of the present as well as those of the future in a sustainable way by establishing a culture of process discipline, organisational oneness and achievement orientation across its businesses through simplification and digitization, empowerment, project-based working and customer centricity. The initiatives taken by the Company are in line with its long-term Human Resources Strategy which has been drawn up with three broad thrust areas – TI Way of working, High-Performance Work Culture (HPWC) and TI Talent Management Engine.

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

Towards the quest for delivering consistently superior results, an initiative focussing on HPWC as a strategy was taken up which articulates a framework to manage performance of organisations, teams and individuals. Various actions were piloted in 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 a higher sense of accountability enabling organizational growth.

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

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

System (TPS) for the Cycles division is also making good progress, helping in improving productivity, sequencing production in the plant & reducing inventory by deploying TPS tools & techniques.

The total number of permanent employees on the rolls of the Company as on 31st March 2021 is 3,120. Industrial relations continued to remain cordial at all the Company's units during the period under review. The information relating to employees and other particulars required under Section 197 of the Companies Act, 2013 read 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 Act, 2013, the Report and Accounts are being sent to the Members excluding the information on employees, particulars of which are available for inspection by the Members at the Registered Office of the Company during business hours on all working days of the Company up to the date of the forthcoming Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in the said regard.

The disclosure with regard to remuneration as required under Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial 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 workplace in 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 in compliance with the requirements of the said Act. The policy extends to all employees (permanent, contractual, temporary and trainees). Employees at all levels are being sensitized about the new Policy and the remedies available thereunder.

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

18. Employee Stock Option Scheme

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

Details in respect of the ESOP 2017 as required under the relevant SEBI Regulations 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 a framework of internal financial controls and compliance system, which is monitored and reviewed by the Audit Committee and the Board besides the statutory, internal and secretarial auditors. To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: a) that in the preparation of the annual Financial Statements for the year ended 31st March 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) that such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2021 and of the profit of the Company for the year ended on that date; c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; 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 laid down and that the financial controls are adequate and were operating effectively; & f) that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

20. Auditors

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

In terms of the aforesaid resolution passed by the Members with regard to the appointment of the Statutory Auditors, the said appointment is subject to ratification by the Members at every Annual General Meeting and their remuneration will be recommended to the Shareholders at the time of taking up such ratification of appointment each year. In the said regard, by an amendment to the Companies Act, 2013 in 2017, the requirement for ratification of appointment of the Statutory Auditors at each Annual General Meeting has been done away with. Accordingly, there is no requirement under law for ratification of appointment of the Statutory Auditors and hence, the same is not proposed. The remuneration payable to them in respect for the financial year 2021-22 has already been fixed at the 12th Annual General Meeting as required under Section 142 of the Companies Act, 2013.

The Company is required to maintain cost records in respect of Steel Products, Metal Formed Products and parts & accessories of auto components of the Company 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 for auditing the cost accounting records maintained by the Company in respect of the applicable products for the financial year 2021-22. Necessary resolution for ratification of their remuneration in respect of the aforesaid term of appointment for the financial year 2021-22 forms part of the Notice for the ensuing Annual General Meeting.

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

M/s. S R Batliboi & Associates LLP, the Statutory Auditors, have furnished a qualified opinion vide their Report on the Audit of the Consolidated Financial Statements ("CFS") for the year ended 31st March 2021 (please refer to page 182 of 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 of accounts and recasting of financial statements of M/s. CG Power and Industrial Solutions Limited ("CG Power"), ongoing investigation by the Serious Fraud Investigation Office ("SFIO") of the affairs of CG

Power and certain subsidiaries in respect of periods prior to acquisition and resulting non-compliance of laws and regulations by CG Power and, inclusion in the CFS of certain subsidiaries of CG Power which have been consolidated by CG Power based on information prepared by the management and have not been subjected to audit/review.

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

22. Related Party Transactions

All related party transactions that were entered into during the financial year under review were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions during the 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 in the notes to the Financial Statements.

The policy on Related Party Transactions as approved by the Board is uploaded 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 the Company.

23. Directors

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

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

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

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

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

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

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

Mr. Anand Kumar was appointed as an Additional Director in the Independent Director category of the Company on 24th March 2021 and his appointment is subject to the shareholders' approval in the ensuing Annual General Meeting.

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

Mr. Vellayan Subbiah, Managing Director of the Company appointed for a term of five years, will retire by rotation at the ensuing Annual General Meeting to facilitate 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 the recommendations of the Nomination and Remuneration Committee, takes pleasure in recommending the appointment of Mr. Anand Kumar as Independent Director for a term of 5 years from 24th March 2021 till 23rd March 2026 (both dates inclusive), the appointment of Ms. Sasikala Varadachari as Independent Director for a term of 4 years from 17th June 2021 till 16th June 2025 (both dates inclusive) and also the re-appointment of Mr. Vellayan Subbiah as Director, not liable to retire by rotation, at the forthcoming Annual General Meeting.

All the Independent Directors of the Company have furnished necessary declaration in terms of Section 149(6) of the Act affirming that they meet the criteria of independence as stipulated thereunder. All the Independent Directors of the Company are registered on the Independent Directors Databank as required under the Companies Act, 2013 and the applicable Rules in the said regard. In the opinion of the Board, all the Independent Directors have the integrity, expertise and experience including the proficiency as required to effectively discharge their roles and responsibilities in directing and guiding the affairs of the Company.

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

24. Declarations/Affirmations

During the year under review:

- there were no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate viz., 31st March 2021 and the date of this Report; & - there were no significant material orders passed by the regulators or courts or tribunals impacting the Company's going concern status and its operations in future.

25. Secretarial Audit

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

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

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

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

26. Annual Return

A copy of the Annual Return of the Company is placed on the website of the 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 Srinivasan, President & 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 per Section 203 of the Companies Act, 2013.

28. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

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

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