thejo engineering ltd Management discussions

The global environment is facing dynamic headwinds amid financial sector turmoil and high infl ation in the US, ongoing effects of Russias invasion of Ukraine and three years of COVID. The baseline forecast is for growth to fall from 3.4% in 2022 to 2.8% in 2023, before settling at 3.0% in 2024. Advanced economies are expected to see an especially pronounced growth slowdown, from 2.7% in 2022 to 1.3% in 2023. In a plausible alternative scenario with further financial sector stress, global growth declines to about 2.5% in 2023 with advanced economy growth falling below 1%. (Source: World Economic Outlook, IMF, April 2023).

India

The output growth of countrys eight core industries hit a fi ve-month low of 3.6% in March 2023 lower than 4.3% achieved in the same month last year. Output growth for the entire 2022-23 came in at 7.6%, lower than the 10.4% achieved in the previous fi scal. According to the World GDP Ranking 2023 list, India is the fi fth largest economy in the world. The Indian steel industry outlook for 2023 looks promising with the country gearing to become a US $5 trillion economy by 2030 (or sooner). And as per market predictions and reports, the steel industry in India will play a pivotal role in steering India towards its goal (Source: EY-CII report). According to predictions by the World Steel Association, the steel demand is estimated to grow by 6.7% in 2023 as against 8.2% in 2022.

Australia

While many major economies are at risk of recession in 2023, the IMF has forecast that the Australian economy will continue to grow. Australia continued to outperform other advanced economies during 2022, with a growth rate of 3.7%. The IMF forecasts that Australias economy will grow by 1.6% in 2023, compared to an average of 1.3% for advanced economies. With talented workforce, renewable energy resources, and open trade and investment, Australia is well placed to lead and innovate in the Asia-Pacifi c region. (Austrade Benchmark Report). We expect Thejo Australia Pty Ltd to Benefit from the same.

Saudi Arabia

Saudi Arabias economic growth is expected to decelerate to 2.2% in 2023 with the oil sector expected to contract by about 2% on the back of Saudi Arabia abiding by OPEC+ agreed production cuts. In this background, the overall growth would be driven by non-oil sector, which is projected to grow by 4.3%, (Source: World Bank). The growth is likely to be driven by a sturdy fi scal policy geared towards increasing investment spending and the expected reforms by the Saudi government would provide robust opportunities in the coming years. Thejo Hatcon Industrial Services Company is expected to capitalise on the business opportunity and enhance growth.

Brazil

In 2023, real GDP growth is expected to slow to 0.9% due to monetary tightening, continued high infl ation, and subdued global demand. Together, these factors are likely to depress private consumption, exports, and investment. Brazils project portfolio spans across all key sectors of the countrys economy and has had signifi cant positive impacts on peoples lives—including, in particular, the most vulnerable. The mining/ mineral industries of Brazil are expected to be back in the growth path during 2023 after witnessing a negative growth in 2022. Despite the fall in mining during 2022, on the back of low base and steady establishment of our products with key clients, our subsidiary in Brazil, Thejo Brasil Comercio E Servicos Ltda, could maintain its profi table position.

Chile

The Chile economy grew by about 2.4% in 2022 after registering an impressive 11.67% growth in 2021. The economy is expected to register a marginal growth in 2023 and 2024 with the medium-term prospects getting shaped by ability to generate more inclusive and productivity-driven growth with sound macroeconomic fundamentals. On the back of the steady establishment of our products and our brand in the market, the operations of our subsidiary in Chile, Thejo Engineering LatinoAmerica SpA, recorded satisfactory growth with good profi ts during the year.

With internationalisation of operations and expansion of existing business, our Subsidiaries are expected to grow in the long term.

INDUSTRY STRUCTURE AND DEVELOPMENT

Global steel experts led by World Steel Association have predicted that India is going to be the epicentre of the global steel growth. Indias fi nished steel production has increased by over 6% whereas globally steel production declined by 4.2% in the year 2022. With indigenisation, rapid growth in export by defence sector and policy support from government, the steel sector is expected to invest in capex in the medium term. The Company continued to focus on value-added products along with high volume products. The Company is also focussed on increasing services business with robust working capital management. The Company continues to develop its overseas markets and pay attention to exports as domestic growth is expected to be average in the long run.

COMPANY PROFILE AND KEY DEVELOPMENTS Profi le

Thejo Engineering Limited is a premium engineering solution provider to mining, mineral processing and bulk material handling industries through manufacturing products and offering onsite maintenance through technical services. Industries served are mining, mineral processing, steel making, aggregates and sand, power, chemical and fertiliser, cement, ports, and others. The Products business of the Company centres around design, development, manufacture and supply of rubber and polyurethane-based engineered products for belt cleaning, spillage control, fl ow enhancement, impact and abrasion protection, and screening applications. Thejo Engineering is one of the few companies in the sub-continent offering manufacturing, marketing, and servicing activities under one roof.

Thejo Engineering has global presence with subsidiaries in Australia, Saudi Arabia, Brazil and Chile. The Company caters to India, Australasia, Middle East, South America, North America, Sub-Sahara and West Africa markets. The Company has four facilities and an in-house R&D Centre in Chennai. The Company has distributor networks in the UAE and Africa.

Expansion of manufacturing facilities

As part of the expansion activities, your Company has set up a 3,10,000 sq. ft expanded manufacturing facility in Ponneri, Chennai. This facility caters to the production of rubber screens, mill liners, diaphragms, shell lifter bars, pinch valves, splicing kits, rubber sheets, etc. This state-of-art expanded manufacturing facility was inaugurated on 24^th March, 2023 under the august presence of Mr. R. Dinesh, President Designate, CII, National Council, Mr. Gulshan Malik, DMD, SBI, Mumbai, Mr. David Eggleston, Deputy Consul General of the Australian Consulate and Prof Anand Narasimhan, Professor of Global Leadership and Dean of Research, IMD Switzerland.

The objective is to expand the existing facility as a state-of-the-art manufacturing facility with capacity increase of the moulded products by 50% to 3,600 MT per annum. The enhanced manufacturing capacity will meet the current market demand as well as manufacture new related products required by the industry. This will help both international and Indian clients, though the primary focus would be to cater to the international market.

RESEARCH AND DEVELOPMENT

The R&D Centre of the Company is focussing on developing new and innovative products as well as bringing about continuous improvement of existing products to meet the needs of the customers and to tap new markets. The sustained efforts of the Research and Development Team have helped the Company to develop diverse product ranges capable of withstanding some of the hardest working conditions in core sector industries.

The R&D Centre of the Company was recognized as one of the Top 25 Innovative Companies under CIIs Industrial Innovation Awards for two consecutive years in 2019 and 2020. The Company was also declared as the winner under the Manufacturing Medium Enterprise Category in the CII Industrial Innovations Awards for the year 2020.

During the year under review, the Company had applied for patents in respect of several products/inventions. As at the end of the financial year, the Company had applied for 32 product patents and three design patents, of which 19 product patents have been awarded and the balance are in process.

SAFETY

As part of its policy of giving utmost importance to safety, the Safety Department of your Company is continuously evaluating every process at its manufacturing as well as work sites and taking necessary steps for the safety of personnel as well as of properties. The Company conducts safety review on regular basis and takes appropriate steps based on the fi ndings.

The Company has its Excellence Centre to train the technicians of the Company on safety and various technical aspects of the job. Safety, quality and speed are key to our services business.

OPPORTUNITIES AND THREATS Opportunities

The Company has been broadening and deepening customer relationships by continually looking for new opportunities and newer areas in their businesses to add value, proactively investing in building newer capabilities, exploring new markets, re-skilling its workforce and launching newer services towards long-term sustainability goals.

Majority of the product division output goes to steel sector and mines. The products as well as services offerings of the Company are primarily intended for the core sector industries. The opportunities for the industry in which the Company operates go hand in hand with the opportunities for core sector industries. The governments thrust towards infrastructure projects is a major contribution due to which steel demand outlook is likely to rise. Increased infrastructure spending measures are a positive sign towards growth in Core Industries and provide the Company with the possibility of new business opportunities.

The Company has a balanced portfolio of products and services, which helps to moderate the impact of cyclicality experienced by its customers. It also helps the Company to tap the business opportunity during expansion as well as during regular operations. The Company looks at taking services business to the international markets and expanding the distributorship for its products in overseas geographies as the key areas of opportunity for the future. With expansion of operations and penetration into the UAE market through the proposed subsidiary, connectivity to international clients is likely to enhance, resulting in newer business opportunities and growth in exports over the medium term.

Services sector fi nds talent supply as a challenging area in terms of technical competency, culture, and effi ciency. Cost cutting through multiskilled manpower and preventive maintenance through training on safety and skill upgradation could enhance quality service and sustainable, consistent growth and development in the future. International market has good potential for services sector with skilled manpower, for the Company to capitalise.

The Companys bet on Operation and Maintenance (O&M) as the mainstay for the future is yet to materialize on the ground as O&M continues to be viewed as a commodity with consequent price pressures bordering on manpower contract. Under these circumstances, the Company intends to focus primarily on such O&M contracts that would add value to the Company as well as to the customers. The Company continues to expect good potential in O&M in the long term as and when the market matures.

The Company has been offering bundled products and is taking various measures to establish its products and services in the overseas markets as well. Mill liners and pipe conveyor maintenance are other areas where the Company believes there will be enormous growth opportunities.

Threats

The steel prices witnessed a sharp drop and then a reasonable rise during FY23, after witnessing high price levels during FY22 on the back of high commodity prices. On account of lower demand in China and fears of recession, the prices of steel are expected to remain volatile. The US banking crisis is expected to have an overall impact on the supply-demand situations.

Rising infl ation trend in the global market can have an adverse impact on the price of raw materials, inventory and labour. It can make it diffi cult for the market to gauge the current value of the companies that make up market indexes. Any adverse movements in economic cycles in the Companys target markets is mitigated to some extent due to the Companys presence in multiple and diverse markets.

The domestic product business is prone to cyclicality in the economy, especially the core sector. The competition from the unorganized sector is a challenge for the services business of the Company. In Operation & Maintenance, there is intense competition with manpower-based contracts being bagged by industry players at lower prices, especially during times of economic downturn.

The Company could be susceptible to strategy, innovation, and business or product portfolio related risks if there is any signifi cant and unfavourable shift in industry trends, customer preferences, or returns on R&D investments. Thejo does have the Benefit of being very well entrenched with many of its customers, involved in their critical and strategic initiatives and years of established relationship. Therefore, client concentration related risks are mitigated to an extent.

Policy changes in respect of core sector industries will have a direct impact on the business of the Company as it primarily caters to core sector industries in the domestic market.

In the backdrop of the global growth decline and fl uctuations in pricing, the prices of most of the raw materials used by the Company are volatile. The Company is doing its best to address this risk of material prices by framing appropriate procurement and pricing policies.

FUTURE OUTLOOK

Policymakers the world over are currently facing a predicament. The last two years have seen the global economy struggling to deal with overlapping crises, the latest being the liquidity troubles after a series of global bank crises. While the impact appears to have been contained, these uncertainties continue to undermine the confi dence among consumers and businesses to spend, therefore impacting economic growth. It is believed that investment will play an important role over the next two years. It is investments that will provide India with necessary momentum to take off on a path of sustained domestic demand–led growth for the next few years. A strong digitization drive the world over, cost-cutting measures by businesses to deal with the impending slowdown, and the growing trend of remote working increased demand for exports of services in technology, where India has a comparative advantage. Interestingly, the share of business and professional services in total services exports also increased as companies globally now prefer outsourcing a wide range of professions, such as accounting, audit, R&D, quality assurance, and after-sales service. The overall economic outlook of India remains positive. Investments are expected to see a turnaround and propel the economy into sustainable growth. India is expected to grow at a moderate pace of 6.0%–6.5% in FY 2023–24, even as the global economy continues to struggle. Growth in the next year is likely to pick up as investments kickstart the virtuous circle of job creation, income, productivity, demand, and exports supported by favourable demographics in the medium term.

It looks like the world has come out of the shadow of the pandemic and has, in fact, learned to live with it. However, geopolitical crises, supply chain reorientations, global infl ation, and tight monetary policy conditions will weigh on the outlook. In this backdrop, outlook for the future is positive combined with a high degree of uncertainty and unpredictability. Though global uncertainties will weigh on growth, the Company and the Management are prepared to take swift decisions based on emerging situation, keeping the interest of all stakeholders in mind.

FINANCIAL PERFORMANCE

The financial performance of the Company in the year under review has shown growth in terms of turnover with a slight dip in the profi tability. The turnover from Manufacturing Division has increased. The Services Division saw a better performance with increase in turnover. With expansion in progress and increase in operational costs and some indirect costs that had remained low for the past two years on account of the pandemic, the current year costs have shown a marginal spike and the same is expected to strike a balance in the coming years. The Company has also stepped up its Information Technology spending focussing on enhanced digitization and digitalization. Exports registered a marginal increase of about 8% compared to the previous year. Your Company is expanding its business in the overseas markets through its subsidiaries and branch, which is expected to improve the export turnover in future.

The production of moulded and extruded products was 2,289 tonnes during 2022-23, registering a growth of 37% over the previous year (1,665 tonnes). The production of adhesives during the year under review was 369 tonnes, showing a growth of 8% over the previous year (342 tonnes).

SEGMENT WISE PERFORMANCE

Your Company has 3 segments of revenue – Manufacturing Units, Service Units and Others. Audited financial results of these segments are furnished in Note 26.3, forming part of the Financial Statements.

RISKS AND CONCERNS

The Company has put in place a Risk Management Policy and Procedures for identifi cation, assessment, management, monitoring and minimization of risks. It has identifi ed potential risks under various categories like Business Dynamics, Operations, Liquidity, Market/Industry, Human Resources, Systems and Disaster Management. The Company is periodically reviewing the risks and their identifi cation, assessment, monitoring and mitigation procedures. It does not perceive any major technological, operational, financial or environmental risks in the near future except for the US market fl uctuations, prevailing Russian Ukraine confl ict and their impact on the global economy.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has adequate internal control systems combined with delegation of powers and periodical review of the process. The control system is also supported by internal audits and management reviews of documented policies and procedures.

DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Company continues to look at, identify, create and execute initiatives that enhance productivity and effi ciency. To enthuse the employee base and increase the linear relationship between performance and reward, increments/incentives and ESOP are being provided based on performance.

The Company will invest as hitherto in people through various initiatives which enable the workforce to meet the production and service expectations and challenges related thereto and to infuse positive enthusiasm towards the organisation.

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

During the Financial Year 2022-23, the Company focussed on bagging KPI based O&M contracts, bagging product orders for better capacity utilisation at manufacturing facilities, receivable and working capital management. With the support of employees across divisions and aided by the rebound witnessed during the financial year, the Company could successfully increase its turnover. However, as the Company is progressing to the next levels of growth, there is a rise in operational cost, increase in other indirect costs that had remained low during the past two years on account of Covid-19 and stepped-up spending on Information Technology resulting in a dip in the profi tability. The Company registered a profi tability of 2,758.17 lakhs as against 2,924.71 lakhs in the previous year with a reasonable growth in sales.

As a result of the above factors, the Return on Net Worth decreased to 16.51% in FY 23 compared to 20.87% in FY22.

During FY23, there was signifi cant change (i.e. change of 25% or more as compared to the previous year) in the following key financial ratios:

Particulars	Financial Year 2022-23	Financial Year 2021-22
Net Capital Turnover Ratio (Times)	3.68	2.92
Interest Coverage Ratio (Times)	11.02	17.43

Key reasons for signifi cant change in the above-mentioned key financial ratios are as follows:

Net Capital Turnover Ratio: The turnover of the Company has increased from 27,661.40 lakhs in FY22 to

33,222.20 lakhs in FY 23. Due to the focus on working capital management, the working capital employed has reduced from 9,470.66 lakhs in FY22 to 9,032.46 lakhs in FY23 despite the increase in turnover. This has resulted in the Net Capital turnover ratio increasing from 2.92 times in FY22 to 3.68 times in FY23. Interest Coverage Ratio: Interest Coverage ratio has decreased from 17.43 times to 11.02 times on account of increase in the fi nance cost of the Company, on account of higher interest cost during the current year, on account of term loans taken by the Company for expansion of its manufacturing units and increased interest on Lease Liabilities combined with marginal dip in the profi tability.

There were no signifi cant changes in the other key financial ratios.

CAUTIONARY STATEMENT

Certain statements in the Management Discussion and Analysis, describing the Companys views about the industry, objectives and expectations, etc. may be considered as ‘forward looking statements. The Company has tried to identify such statements by using words such as ‘expect, ‘anticipate, ‘hope, ‘likely, ‘plan, ‘projected, ‘believe, estimated, etc. While making these statements, the Management has made certain assumptions which it believes are prudent. There is no guarantee that the assumptions would prove to be accurate. Actual results may differ substantially or materially from those expressed or implied in the statements. The Company undertakes no obligation to update any of the statements, whether as a result of any future events, change in assumptions or for any other reason, whatsoever. These statements are purely intended to put certain things in perspective based on the assumptions and estimates of the Management and in no way solicit investment or guarantee any performance or returns. Members and others are requested to make their own judgment before taking any decision to invest in the shares of the Company.

INTERNAL FINANCIAL CONTROL SYSTEM

The Company has in place adequate internal financial controls commensurate with its size. During the year, such controls were tested and no reportable material weaknesses were observed.

SUBSIDIARY COMPANIES

As on the date of this Report, the Company has four subsidiaries, namely, Thejo Hatcon Industrial Services Company, Kingdom of Saudi Arabia (Thejo Hatcon) with 51% shareholding, Thejo Australia Pty Ltd., Australia (Thejo Australia) with 74% shareholding, Thejo Brasil Comercio E Servicos Ltda, Brazil (Thejo Brasil) with 99.99% shareholding and Thejo Engineering LatinoAmerica SpA, Chile (Thejo Chile) with 99.86% shareholding.

PERFORMANCE OF SUBSIDIARY COMPANIES

Thejo Hatcon Industrial Services Company (Thejo Hatcon) is engaged primarily in rubber lining and related industrial services activities. During the period, 1^st April, 2022 to 31^st March, 2023, Thejo Hatcon achieved a turnover of SAR 10.13 million ( 2,135.18 lakhs) on which it made a net profi t of SAR 2.21 million (494.83 lakhs).

Thejo Australia Pty Ltd (Thejo Australia) is a servicing Company, primarily engaged in belt splicing, belt jointing, maintenance and related activities including sale of associated products and spares. During the period, 1st April, 2022 to 31st March, 2023, Thejo Australia achieved a turnover of AUD 21.57 million ( 12,042.38 lakhs) with a profi t of AUD 0.01 million (- 18.68 lakhs).

Thejo Brasil Comercio E Servicos Ltda (Thejo Brasil) is mainly engaged in selling materials used in core sector industries for bulk material handling, mineral processing and corrosion protection. During the period, 1^st April, 2022 to 31^st March, 2023, Thejo Brasil achieved a turnover of BRL 1.70 million ( 272.47 lakhs) with a profi t of BRL 0.59 million ( 94.08 lakhs).

Thejo Engineering LatinoAmerica SpA (Thejo Chile) is primarily engaged in selling materials used in core sector industries for bulk material handling, mineral processing and corrosion protection. During the period, 1^st April, 2022 to 31^st March, 2023, Thejo Chile achieved a turnover of CLP 1,815.37 million ( 1,815.37 lakhs) with a profi t of CLP 270.29 million ( 330.02 lakhs).

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are given in Annexure 1, forming part of the Boards Report

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

Your Directors have constituted a Corporate Social Responsibility Committee (CSR Committee), with Mr. V.K. Srivastava as Chairman and Mr. Thomas John, Mr. V.A. George, Mr. Sridhar Ganesh and Mr. Srinivas Acharya as Members.

The Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) and a CSR Annual Action Plan indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities. The CSR Policy is provided in the Corporate Governance Report.

During the year 2022-23, the Company was required to incur CSR expenditure of 57.70 lakhs being 2% of the average net profi ts for the immediately preceding three Financial Years. In compliance with this requirement, the Company spent 58.00 lakhs on eligible projects approved by the Board on the recommendation of the CSR Committee, thus fully meeting the CSR target for the year under review. Annual Report on CSR Activities for the Financial Year 2022-23 is given in Annexure 2, forming part of the Boards Report. Brief particulars of the CSR projects undertaken is also given as part of Annexure 2.

DIVIDEND DISTRIBUTION POLICY

The Company has formulated a Dividend Distribution Policy in compliance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The same is uploaded on the Companys website at https://www.thejo-engg.com/thejo-admin/upload/allstatutory/DivDisbPolicy.pdf

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return of the Company is available on the Companys website at https://www.thejo-engg.com/investors/AnnRet

NUMBER OF MEETINGS OF BOARD

Five meetings of the Board of Directors were held during the year. Particulars of the Meetings held and the Directors present are given in the Corporate Governance Report, which forms part of the Boards Report.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors state that: a) in the preparation of the annual accounts for the year ended 31^st March, 2023, the applicable accounting standards have been followed and there are no material departures from the same; b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2023 and of the profi t of the Company for the year ended on that date; c) the Directors have taken proper and suffi cient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Directors have prepared the annual accounts on a ‘going concern basis; e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Policy of the Company on Directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under Section 178(3) of the Companies Act, 2013, adopted by the Board of Directors is given in the Corporate Governance Report forming part of the Boards Report.

AUDITORS REPORT

The Auditors Report for the year ended 31^st March, 2023 does not contain any qualifi cation. During the year under review, the Auditors have not reported any matter under Section 143 (12) of the Companies Act, 2013.

AUDITORS

M/s.Brahmayya & Co., Chartered Accountants, were re-appointed as Auditors at the 36^th Annual General Meeting of the Company held on 27^th August, 2022 to hold offi ce up to the conclusion of the 41^st Annual General Meeting of the Company.

SECRETARIAL AUDIT

The Board appointed Mrs. Sindhuja Porselvam, Practising Company Secretary, to conduct Secretarial Audit for the Financial Year 2022-23. The Secretarial Audit Report of Mrs. Sindhuja Porselvam for the Financial Year is attached as Annexure 3 to the Boards Report. The Secretarial Audit Report does not contain any qualifi cation, reservation or adverse remark.

SECRETARIAL STANDARDS

The Company complies with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

COST RECORDS

For the financial year 2022-23, the Company is required to maintain cost records as specifi ed by the Central Government under Section 148(1) of the Companies Act, 2013. The Company is accordingly making and maintaining such accounts and records.

COST AUDITORS

As per Section 148 of the Companies Act, 2013, your Company is required to have the audit of its cost records conducted by a Cost Accountant in practice for the financial year 2023-24. Accordingly, the Board of Directors, based on the recommendation of the Audit Committee, have approved the appointment of Ms. Latha Venkatesh, Latha Venkatesh & Associates, Cost Accountant in practice (FRN 101017), as the Cost Auditors of your Company for the financial year 2023-24. As required under the Act, a resolution seeking ratifi cation of the remuneration payable to the Cost Auditors forms part of the Notice convening the ensuing 37^th Annual General Meeting.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Particulars of loans given, investments made and guarantees given which are required to be disclosed under Section 186 (4) of the Companies Act, 2013 are given in Annexure 4, forming part of the Boards Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

Particulars of contracts or arrangements with related parties required to be given under Section 188 (2) of the Companies Act, 2013, in Form No. AOC-2, are set out in Annexure 5, forming part of the Boards Report.

COMMITTEES OF THE BOARD

Currently, the Company has six Committees of the Board of Directors, namely, the Audit Committee, Compensation/Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders Relationship Committee, Allotment Committee and Risk Management Committee¹. The terms of reference of the Committees are provided in the Corporate Governance Report, forming part of the Boards Report. The composition of the Committees, as at 31^st March, 2023, is as follows:

Name of the Committee		Composition of the Committee	Status
Audit Committee		Mr. V K Srivastava	Independent Director, Chairman
		Mr. A Satyaseelan	Independent Director, Member
		Mrs. Sujatha Jayarajan	Independent Director, Member
		Mr. Nilesh S Vikamsey	Independent Director, Member
Compensation/Nomination and		Mrs. Sujatha Jayarajan	Independent Director, Chairperson
Remuneration Committee		Mr. V K Srivastava	Independent Director, Member
		Mr. Sridhar Ganesh	Independent Director, Member
		Mr. Nilesh S Vikamsey	Independent Director, Member
Corporate Social Responsibility		Mr. V K Srivastava	Independent Director, Chairman
Committee		Mr. Thomas John	Non-Executive Director, Member
		Mr. V A George	Executive Chairman, Member
		Mr. Sridhar Ganesh	Independent Director, Member
		Mr. Srinivas Acharya	Independent Director, Member
Name of the Committee	Composition of the Committee		Status
Stakeholders Relationship	Mr. Srinivas Acharya		Independent Director, Member*
Committee	Mr. V K Srivastava		Independent Director, Member
	Mr. Thomas John		Non-Executive Director, Member
	Mrs. Sujatha Jayarajan		Independent Director, Member
Allotment Committee	Mr. A Satyaseelan		Independent Director, Chairman
	Mr. Thomas John		Non-Executive Director, Member
	Mr. V A George		Executive Chairman, Member
	Mr. Manoj Joseph		Managing Director, Member
	Mr. Rajesh John		Whole-time Director, Member

Notes: 1. Risk Management Committee has been constituted by the Board at its Meeting held on 25^th May, 2023.

2. Mr. Srinivas Acharya has been elected as the Chairman of the Stakeholders Relationship Committee by the Committee at its Meeting held on 25^th May, 2023.

All the recommendations made by the Audit Committee during the year were accepted by the Board of Directors, without any exception.

VIGIL MECHANISM

The Company has put in place a Whistle Blower Policy and established the requisite Vigil Mechanism for employees and Directors for reporting concerns about unethical behaviour, actual or suspected fraud or violation of law to a designated Committee. The Committee consists of Mr. M.D. Ravikanth, Chief Financial Offi cer & Secretary, Mr. S Premjit – Senior Vice President- Services and Mr. Thomas K Abraham – Senior Vice President- HR & Admin. This mechanism also provides for adequate safeguards against victimisation of reporting employees. The Policy has been disseminated to all the employees through display on Notice Boards and the Companys website.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Thomas John (DIN 00435035), Director retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for reappointment.

Mr. V.A. George (DIN 01493737), Executive Chairman, retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for reappointment.

A brief resume of Mr. Thomas John and Mr. V.A. George together with related information is given in the Notice convening the ensuing Annual General Meeting.

The Board recommends their re-appointment as Directors of the Company.

The details of Directors and Key Management Personnel, who were appointed or have resigned during the Financial Year 2022-23 are as follows: Mr. Sridhar Ganesh (DIN 01681018) was appointed as an Additional Director designated as Independent Director of the Company for a period of 5 years with effect from 15^th November, 2021, by the Board at its meeting held on 14^th November, 2021, based on the recommendation of the Compensation/Nomination and Remuneration Committee. The appointment of Mr. Sridhar Ganesh as an Independent Director was approved by the Members at their 36th Annual General Meeting held on 27^th August, 2022.