subros ltd share price Directors report

Dear Members,

Your Directors are pleased to present the 38th Annual Report of the Company together with the audited financial statements for the year ended March 31, 2023.





Current Year 2022-23 Previous Year 2021-22 Current Year 2022-23 Previous Year 2021-22

(Rs. in Crores)

Revenue from operations (Net of excise duty)

2806.28 2238.64 2806.28 2238.64

Other income

20.57 9.92 20.29 9.54

Profit before depreciation, interest and tax

188.08 158.65 187.79 158.27

Less: Financial Charges

6.78 10.92 6.78 10.91

Less: Depreciation

110.28 102.35 110.28 102.35

Add: Share of profits/loss of joint venture (equity method)

- - 0.12 0.29

Net profit before Taxation

71.02 45.38 70.85 45.30

Less: Tax

22.93 12.80 22.93 12.80

Profit after Taxation

48.09 32.58 47.92 32.50

Profit brought forward

478.68 449.24 476.78 449.64

Profit available for appropriation

518.65 474.68 518.79 476.78


The net revenue from operations for the financial year ended March 31, 2023 is Rs. 2806.28 Crores as against Rs. 2238.64 Crores in the previous financial year. The Net Profit before Tax is Rs 71.02 Crores as compared to Rs. 45.38 Crores in the previous financial year.

The Indian automobile industry is setting out on a journey with hopes for a sustained growth momentum in FY 2023-24 and further embracing clean technology amid the lurking speed breakers of rising interest rates, cost increases and new emission and safety norms, having witnessed a strong comeback from the COVID-led downturn this year. The semiconductor shortage continues to be dynamic. The domestic automotive industry is expected to grow at high single-digit levels in FY 2023-24.

In view of the Covid-19 pandemic, considering the current internal and external factors, the Company has made detailed assessment of its liquidity position / cash flow and of the carrying value of its assets and liabilities as at March 31, 2023 and has concluded that there are no adjustments required in the financial statements. The Company will continue to closely monitor the future economic conditions.

The performance of the Company is also discussed in Management Discussion and Analysis, as stipulated under Regulation 34 of the Listing Regulations with the Stock Exchanges, which forms part of the Directors Report.

There has been no change in the nature of business of the Company.


After two years of demand variations due to Covid, the FY 2022-23 has been a year of stabilized positive growth for the Indian Automobile Industry. Passenger vehicles (PV) segment recorded highest ever production of 4.6 million vehicles, marking a growth of 25% over last year. There has been a clear shift in consumer preference from car segment to SUV segment, with SUVs share going up to 49% (FY 2022-23) from 46% (FY 2021-22). Car segment share has dropped to 48% (FY 2022-23) from 51% (FY 2021-22). The automobile sales in FY 2022-23 have some impact due to supply chain constraints and semiconductor shortages mainly in first half of the FY, which led to some constraint on Original Equipment Manufacturer (OEM) production vs market demand. The penetration of BEV/ Hybrid/CNG vehicle witnessed significant growth from the last year, with major OEM launching BEV/Hybrid/CNG Vehicles. The commercial vehicle segment also witnessed a growth of 29% from FY 2021-22 along with EV Commercial vehicles increasing their numbers. The passenger carrier (Bus) segment has shown a strong growth with significant demand continuing for AC Ambulances and exceeded production of pre-covid year (FY 2019-20). Also the goods carrier segment (Truck) witnessed a growth of 23% from last year. The pressure on Companys cost remains high as there has been significant rise in input costs due to various economic and geopolitical situations, and though trend seem to be easing towards H2 of FY 2023-24 but it remains volatile and input costs continued to be higher than pre COVID levels.

The future outlook for passenger vehicle and commercial vehicle remains positive, though growth is likely to moderate in FY 2023-24 to higher single digit for PVs, and slightly higher than this for CVs. The Company continues to remain watchful of possible impact of increasing interest rates, increased vehicle prices & volatile global economic & supply chain situations on end consumer & OEM demand.

The BEV/Hybrid/CNG (alternate fuel) vehicle penetration is expected to increase in coming years due to Govt. push through various regulations & schemes and also increase in customer acceptability for clean or alternate fuel vehicles. The Company is focused to develop segments like Bus AC with more variety of products and also EV AC kits, and also Rail Coach AC segment where Company has successfully obtained necessary facility approval in FY 2022-23 for development & supply for Indian Railways.


The Company expanded their capacity at Chennai location and commenced supplies for New Products. The Company has also introduced products for Hybrid & Electric Vehicle in FY22-23 and would introduce more such products in coming years. The Company is focused on localization and cost optimization activities across all product segments to marginalize impact of global economic factors. There is capacity & product optimization and enhancement plan with focus on Make in India along with increased local manufacturing to ensure sufficient capacity is available for all customers across locations in line with growing market demand across all the segments.

The Company is also gearing up for meeting future customer demands in-line with Govt. regulations with strong focus on long term technology development. New product development for Inter combustion engine & EV for Passenger vehicles, Bus, Truck, Off-road are in progress for various OEM Models in-line with their project milestones. New Projects for Rail Cab AC & Coach AC are also under development & execution. The long term growth prospects for the Companys product remains robust with passenger vehicle industry production likely to touch 7 million vehicles by 2030.


Your Company has earned a net profit (after tax) of Rs. 48.09 Crores as against Rs. 32.58 Crores in the previous year. The Board has recommended a dividend of Rs. 1.00 per share (50% on the face value of equity shares of Rs. 2 each) for the financial year ended March 31,2023, as against Rs. 0.70 per share (35% on the face value of equity shares of Rs. 2 each) in the previous year.

The dividend, if approved by the Members at the ensuing Annual General Meeting (AGM), shall absorb a sum of Rs. 6.52 Crores.

The Dividend Distribution Policy of the Company is available on the Companys website at


Your Company proposes to transfer Rs. 1.50 Crores to the General Reserve.


There were no material changes and commitments that affect the financial position of the Company subsequent to the date of financial statement.


During the year there is no change in the Capital Structure of your Company.


During the year under review the following changes took place in the Board and Key Managerial Personnel of your Company:

i. Ms. Shradha Suri was re-appointed as the Chairperson & Managing Director for a period of three years w.e.f. 12.05.2022.

ii. Mr. Hisashi Takeuchi was appointed as Nominee Director of Suzuki Motor Corporation Japan, w.e.f. 01.10.2022 in place of Mr. Kenichi Ayukawa.

iii. Mr. Naohisa Kuriyama was appointed as Nominee Director of M/s DENSO Corporation, Japan in place of Mr. Hidemasa Takahashi w.e.f. 29.03.2023.

iv. Mr. Yasuhiro lida was appointed as Alternate Director to Mr. Hidemasa Takahashi in place of Mr. Yasuaki Matsunaga w.e.f. 25.01.2023. His office was vacated with resignation of Mr. Hidemasa Takahasi. Mr. Yasuhiro lida was again appointed as Alternate Director to Mr. Naohisa Kuriyama w.e.f. 29.03.2023.

v. Mr. Shiv Ram Singh was appointed as Company Secretary & Compliance Officer w.e.f. 01.06.2022 on superannuation of Mr. Rakesh Arora, then Company Secretary and Compliance Officer. Mr. Shiv Ram Singh later resigned w.e.f. 15.11.2022.

vi. Mr. Kamal Samtani was appointed as Company Secretary & Compliance Officer w.e.f 28.04.2023.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr.Tomoaki Yoshimori, Director of the Company retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. His brief resume as required under the Listing Regulations and Secretarial Standards is provided in the Notice of the 38th AGM of the Company. The requisite resolution pertaining to the re-appointment appears at the respective item of the Notice along with the Statement and is recommended to the Members for approval.

Declaration from Independent Directors:

The Company has received necessary declaration(s) from all the Independent Director(s) of the Company as laid down under Section 149(7) of the Companies Act, 2013 confirming that they meet the criteria as laid down under Section 149(6) of the Companies Act, 2013 and the Listing Regulations.

Board Meeting:

The Board of Directors met five times during the financial year 2022-23, the details of which are given in the Corporate Governance Report which forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed under the Companies Act, 2013.

Policy on Directors Appointment and Remuneration:

The policy of the Company on Directors appointment and remuneration including criteria for determining qualifications, positive attributes and other matters is available on the website of the Company.


The Composition of Audit Committee of the Company is described in Corporate Governance Report as stipulated under Listing Regulations, which forms integral part of this Report.


As required under Section 134 (5) of the Companies Act, 2013, your Directors hereby confirm that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

c) The Directors have taken proper and sufficient care 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) 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 were operating effectively; and

f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


DENSO Subros Thermal Engineering Centre India Private Limited, a Joint Venture, achieved revenue of Rs. 17.62 Crores during the FY 2022-23 as against Rs. 17.95 Crores in the previous year. The Joint Venture achieved a profit of Rs. 0.45 Crores during the year as against Rs. 1.11 Crores in the previous year due to increase in other expenses because of provision of contingencies amounting to Rs 130.08 Lakhs (i.e. PF contribution in respect of international workers Rs. 11.02 Lakhs and interest on delayed payment of GST on Expat employee under reverse charge Rs. 119.05 lakhs). Your Company is holding 26% shares in this Joint Venture.

The Company does not have any subsidiary.


In accordance with the Companies Act, 2013 and IND AS 110 - Consolidated Financial Statements read with IND AS 31 - Interest in Joint Ventures, your Directors have pleasure in attaching the Audited Consolidated Financial Statements, which forms a part of this Annual Report.


The information in terms of Section 134(3)(m) of the Companies Act, 2013, read with relevant rules is annexed herewith as Annexure-1 and forms integral part of this report.


The Annual Return as on March 31, 2023, in terms of provisions of Section 134(3) and other applicable provisions of the Companies Act, 2013, read with Rules thereto is available on website of the Company and forms integral part of this Annual Report.


Statutory Auditors: As per the provisions of Section 139 of the Companies Act, 2013, the shareholders have approved the re-appointment of M/s Price Waterhouse Chartered Accountants LLP, as Statutory Auditors of the Company for the 2nd term of 5 years from the conclusion of the 37th AGM till the conclusion of 42nd AGM.

The Auditors Report to the Members for the year under review does not contain any qualification, reservation or adverse remark. The observations of the Auditors and the relevant notes on accounts are self-explanatory and therefore do not call for any further comments.

Cost Auditors: The Company has re-appointed M/s. Chandra Wadhwa & Company, Cost Accountants, as Cost Auditors of the Company to conduct the audit of cost records maintained by the Company for the FY 2023-24 in accordance with Section148(1) of the Companies at 2013. The ratification of remuneration payable to Cost Auditors for the FY 2023- 24 is being sought from the Members of the Company at the ensuing AGM.

Secretarial Auditors: The Company has re-appointed M/s. RSM & Co., Company Secretaries as Secretarial Auditors to conduct the audit of secretarial and related records of the Company for the FY 2023-24. The Secretarial Audit Report for the financial year ended March 31, 2023 is annexed as Annexure-2 and the same is self-explanatory. The said Secretarial Audit Report does not contain any qualification or adverse remark.


During the year under review, your Company has neither invited nor accepted any deposits from the Public.


No significant material order was passed by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations in future.


The adequacy of Internal Financial Controls is discussed in Management Discussion and Analysis, as stipulated under the Listing Regulations with the Stock Exchanges, which forms part of this Report.


The Company has not given any inter- corporate loans and/or provided any guarantees. Details related to the investments made by the Company are given in Note 5(a)(ii) to the Standalone Financial Statement of the Company.

There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016.

There was no instance of one time settlement with any Bank or Financial Institution.


The Company has formulated a Corporate Social Responsibility (CSR) Policy to undertake CSR initiatives as specified in Schedule VII of the Companies Act, 2013. The Company has constituted a robust and transparent governance structure to oversee the implementation of CSR Policy, in compliance with the requirements of Section 135 of the Companies Act, 2013. The Annual Report on CSR activities is annexed as Annexure-3 and forms integral part of this report. This Policy is placed on the website of the Company investors.html.


The Company has a risk management policy and framework in place to ensure proper identification and treatment of risks. The identification and mitigation of strategic, business, operational and process risks are carried out for all functions. The key strategic risks along with mitigation plan are presented to the risk management committee on half-yearly basis. Few of such risks which may pose challenges are set out in the Management Discussion and Analysis which forms part of this Annual Report. The implementation of the ERM framework is continuously evolving and has progressed well during the financial year 2022-23.

In addition to the ongoing Risk Management activities, the Company has focused on reviewing and mitigating the Cyber Security related risk and environment related Risk.


Pursuant to Section 177(9) of the Companies Act, 2013, the Company has established a Vigil Mechanism/ Whistle Blower Policy for directors, employees, suppliers, contractors and other stakeholders of the Company. The purpose and objective of this Policy is to cover serious concerns that would have a larger impact on image and values of the Company due to incorrect financial reporting or improper conduct. The Whistle Blower Policy has been placed on the website of the Company

The Statutory Auditors, Cost Auditors or Secretarial Auditors have not reported any frauds under Section 143(12) of the Companies Act, 2013 and rules made thereunder.


The Company has in place a Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Committee has been set up to redress complaints received regarding sexual harassment. During the year the Company did not receive any complaint.


The Board of Directors has formulated a Related Party Transaction Policy for determining material related party transactions. The Related Party Transaction Policy is available on the website of the Company investors.html. A statement of all particulars of Contracts or Arrangements with material related parties referred to in Section 188(1) of the Companies Act, 2013, is annexed as Annexure-4 and forms integral part of this report.


The Equity Shares of your Company continue to be listed on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). The listing fees for the financial year 2023 - 24 have been paid to the said stock exchanges.


In compliance with the provisions of the Companies Act, 2013, Listing Regulations and Guidance Note issued by SEBI the Board has formulated a framework, inter alia, for formal evaluation of its performance as well as that of its committees and directors.

In this regard the Board has, inter alia, carried out an annual evaluation of the performance of all the independent director(s). The Nomination & Remuneration Committee ("NRC"), inter alia, reviewed the performance of directors and the Board as a whole and its committee(s). The Independent Directors, inter alia, reviewed performance of non-independent directors, the Board as a whole and its committees and assessed the quality, quantity and timeliness of flow of information between the Companys management and the Board.

The evaluation criteria of the performance of every director, Board & its committees included, inter alia, their structure/ composition, meeting attendance, expertise drawn from diverse domains banking, administration, strategic and technical and bring specific competencies relevant to the Companys business. The Board members participation and overall functioning was quite satisfactory and effective during the year under review. There are no specific observations on the Board evaluation carried out during the year as well as for the previous year.


ICRA has assigned/reaffirmed the Long Term Ratings as [ICRA] AA- "Positive" and for Short Terms Ratings as [ICRA] A1 + "Positive" and revised outlook from stable to positive.


Disclosure in respect to remuneration and other details as per the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure to this Report having regard to the provisions of the second proviso to Section 136(1) of the Companies Act, 2013, the Annual Report excluding the said statement of employees under Section 197(12) of Companies Act, 2013 is being sent to the Members of the Company. The said information is available for inspection at the registered office of the Company during working hours and any Member interested in obtaining said statement may write to the Company Secretary at the registered office of the Company.


The Company is committed to maintain the highest standards of corporate governance. The Company has complied with the corporate governance requirements, as stipulated under the Listing Regulations. A report on Corporate Governance along with a certificate from the Practicing Company Secretaries regarding compliance on the conditions of corporate governance prescribed under Listing Regulations is annexed herewith and forms integral part of this Report. All Policies of the Company are available on the website of the Company


A report on adoption of responsible business practices in the interest of the social, governance and environmental perspective are as vital as their financial and operational performance. Conforming to the requirements of the clause

(f) of sub-regulation (2) of Regulation 34 of Securities and Exchange Board of India (LODR) Regulations, 2015, the Business Responsibility and Sustainability Report for Financial Year 2022-23 is annexed herewith and forms integral part of this Report.


The disclosure of IEPF related activities during the year under review forms a part of the report on Corporate Governance.


The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on meetings of Board of Directors, its Committee(s) and General Meetings.


Your Board wishes to convey its appreciation to all the employees for their enormous efforts, hard work and dedication as well as their collective contribution to the Companys performance, without which it would not be possible to achieve the growth of the Company.

Your Board convey heartfelt gratitude to the Companys valued customers, Maruti Suzuki India Limited, Tata Motors Limited, Mahindra & Mahindra Limited, Renault Nissan Automotive India Private Limited and Force Motors Limited, for the trust and confidence reposed by them in the Management for their co-operation and support provided to the Company.

Your Board acknowledges with gratitude the co-operation and support extended by Companys bankers, HDFC Bank, ICICI Bank, State Bank of India, Kotak Mahindra Bank & other Banks and our collaborators, DENSO Corporation, Japan and Suzuki Motor Corporation, Japan for their continued support.

The Board also wishes to thank all Members, vendors and business associates for their trust and constant support to the Company.

For and on behalf of the Board of Directors
Chairperson & Managing Director
(DIN: 00176902)
Place: New Delhi
Dated: May 25, 2023