thejo engineering ltd Directors report

The Board of Directors is pleased to present the Thirty-Seventh Annual Report of the Company (hereinafter referred to as "Thejo"/"Thejo Engineering"/"the Company"/"your Company") and its audited financial statements (standalone and consolidated) for the Financial Year ended 31^st March, 2023. The summarised financial results for the year ended 31^st March, 2023 are given below: in lakhs

	Standalone		Consolidated
	Year Ended	Year Ended	Year Ended	Year Ended
	31st March,	31st March,	31st March,	31st March,
	2023	2022	2023	2022
Revenue from Operations	33,269.82	27,753.92	47,445.59	42,446.34
Other income	205.84	145.08	313.43	124.07
Total Income	33,475.66	27,899.00	47,759.02	42,570.41
Expenses
Operating Expenditure	28,591.98	23,073.48	41,501.77	35,574.49
Depreciation and amortisation expense	803.24	680.58	1,219.02	1,053.05
Total Expenses	29,395.22	23,754.06	42,720.79	36,627.54
Profi t before fi nance costs, exceptional item	4,080.44	4,144.94	5,038.23	5,942.87
and tax
Finance Costs	370.17	237.76	460.84	314.99
Profi t before Exceptional item and tax	3,710.27	3,907.18	4,577.39	5,627.88
Exceptional item	-	-	-	-
Profi t before tax	3,710.27	3,907.18	4,577.39	5,627.88
Tax expense	952.10	982.47	1,097.17	1,376.75
Profi t for the year	2,758.17	2,924.71	3,480.22	4,251.13
Attributable to:
Owners of the Company	2,758.17	2,924.71	3,241.75	3,763.03
Non-controlling interests	-	-	238.47	488.10
Opening balance of retained earnings	12,111.96	9,399.86	12,791.50	9,317.36
Profi t for the year	2,758.17	2,924.71	3,241.75	3,763.03
Dividend	213.56*	212.61	213.56*	212.61
Transfer to Statutory Reserve	-	-	15.56	76.27
Closing balance of retained earnings	14,656.57	12,111.96	15,804.13	12,791.50

* Dividend pertains to the Financial Year 2021-22. No appropriation for dividend has been made in the Accounts for the dividend recommended for the Financial Year 2022-23, pending approval by the Members at the ensuing Annual General Meeting.

REVIEW OF FINANCIAL PERFORMANCE AND STATE OF COMPANYS AFFAIRS

During the year under review, the Company continued its focus on value-added products under the Manufacturing Division and on profi table operations at site level in respect of the Services and Operation and Maintenance Division. The Company implemented the expansion of manufacturing facilities with focus on working capital management. The increase in operational costs has resulted in marginal decrease in profi tability despite increase in turnover. The financial performance of the Company at standalone and consolidated levels are given below.

STANDALONE

Your Company recorded revenue (from operations) of 33,269.82 lakhs for the year ended 31^st March, 2023 as against 27,753.92 lakhs in the previous year. It achieved an EBITDA of 4,883.68 lakhs (previous year 4,825.52 lakhs), resulting in a net profi t of 2,758.17 lakhs as against 2,924.71 lakhs in 2021-22, registering a growth of 1.21% in terms of EBITDA and a decline of 5.69% in terms of net profi t.

CONSOLIDATED

The Consolidated Financial Statements of the Company have been prepared as per Ind-AS 110. The Companys consolidated revenue from operations in the year under review aggregated 47,445.59 lakhs (previous year 42,446.34 lakhs) on which it made EBITDA of 6,257.25 lakhs (previous year 6,995.92 lakhs) and net profi t (attributable to the Owners of the Company) of 3,241.75 lakhs as against 3,763.03 lakhs in 2021-22, registering a decline of 10.56% and 13.85% in terms of EBITDA and net profi t (attributable to the Owners of the Company), respectively.

DIVIDEND

The Board of Directors is pleased to recommend payment of dividend of 20% i.e., 2/- per equity share of 10/- each for the Financial Year ended 31st March, 2023 (previous year: 20%). Based on the equity shares outstanding as on 31^st March, 2023, the dividend would absorb an amount of 214.02 lakhs (previous year

- 213.56 lakhs). Dividend Distribution Tax has now been abolished. Pursuant to the Finance Act, 2020, the dividend income will be taxable in the hands of the Shareholders with effect from 1^st April, 2020 and the Company is required to deduct tax at source ("TDS") from dividend payable to the Members at the rates prescribed in the Income-tax Act, 1961. The dividend payment is subject to the approval of the Members at the ensuing Annual General Meeting.

EMPLOYEES STOCK OPTION SCHEME

The Members of the Company at their 29^th Annual General Meeting held on 26^th August, 2015 had approved the Thejo Employees Stock Option Scheme 2015 ("ESOP 2015"), with a view to attract and retain the best talent and promote increased participation by the employees in the growth of the Company.

The Compensation / Nomination and Remuneration Committee of the Board inter alia administers and monitors the ESOP 2015.

During the year under review, there were no material changes in the ESOP 2015 and the Scheme is in compliance with the SEBI Regulations on ESOPs.

Information in respect of options granted under the Thejo Employee Stock Option Plan 2015 is given in Note 26.9 forming part of the Financial Statements. As per Regulation 14 of the SEBI (Share Based Employee Benefi ts and Sweat Equity) Regulations, 2021, the details of the ESOPs are uploaded on the Companys website https://www.thejo-engg.com/sites/ESOPs2023.pdf

The total shareholding of the Company changed due to the allotments made under ESOP 2015. The details of movement in shareholding are as follows:

Date	Details	No of equity shares Allotted	No. of equity shares (Cumulative)
1st April, 2022	Opening Balance		1,06,57,126
25th April, 2022	Allotment under ESOP	3,300	1,06,60,426
8th June, 2022	Allotment under ESOP	8,650	1,06,69,076
11th July, 2022	Allotment under ESOP	7,300	1,06,76,376
04th August, 2022	Allotment under ESOP	1,800	1,06,78,176
14th September, 2022	Allotment under ESOP	4,800	1,06,82,976
18th October, 2022	Allotment under ESOP	4,332	1,06,87,308
22nd November, 2022	Allotment under ESOP	5,000	1,06,92,308
06th January, 2023	Allotment under ESOP	4,300	1,06,96,608
06th March, 2023	Allotment under ESOP	4,350	1,07,00,958

A Certifi cate from the Secretarial Auditors of the Company as required under Regulation 13 of the Securities and Exchange Board of India (Share Based Employee Benefi ts and Sweat Equity) Regulations, 2021, is attached to the Boards Report.

CREDIT RATING

During the Financial Year 2022-23, CRISIL has upgraded the long-term credit rating on the bank facilities from CRISIL A-/Stable to CRISIL A/Stable and short-term credit ratings on the bank facilities from CRISIL A2+ to CRISIL A1.