Your Directors have pleasure in presenting the 46th Annual Report together with the Audited Financial Statements of your Company for the financial year ended March 31, 2022.
FINANCIAL SUMMARY & STATE OF AFFAIRS
|Year ended March 31, 2022||Year ended March 31, 2021||Year ended March 31, 2022||Year ended March 31, 2021|
|Profit before share of net profit of Joint Venture accounted for using equity method and tax||1,521.56||1,811.84||-||-|
|Share of net profit of Joint Venture accounted for using equity method||28.15||26.78||-||-|
|Profit before tax||1,549.71||1,838.62||1,237.72||3,045.55|
|Profit After Tax||1,168.99||1,364.05||959.39||2,735.58|
|Other Comprehensive Income (net of tax)||54.14||140.63||0.82||2.33|
|Total Comprehensive Income||1,223.13||1,504.68||960.21||2,737.91|
|Basic Earnings Per Share (H)||19.65||24.10||16.13||48.33|
Your Company is a leading manufacturer and distributor of specialized ‘critical to operate and recurring consumable products for the global mineral beneficiation, mining and bulk solids handling industry, on the basis of sales. Globally, your Company is the second largest producer of polymer-based mill liners, on the basis of revenue. Your Company offers comprehensive solutions to marquee global clients in the mineral beneficiation, mining and bulk solids handling industry, through its wide product portfolio. Some of the key highlights of your Companys consolidated performance during the year under review are:
Total Income is H9,759.54 Million as against H8,566.84 Million in the last year.
Profit before taxation is H1,549.71 Million as against H1,838.62 Million in the last year.
Net Profit after taxation is H1,168.99 Million as against H1,364.05 Million in the last year.
The total assets under management of the Tega Group is H11,792.13 Million as against H10,183.39 Million in the last year.
The Financial Statements of your Company have been prepared in accordance with the Ind AS and the relevant provisions of the Companies Act, 2013 and rules made therein, as applicable, Regulation 33, Regulation 34 and Regulation 48 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as ‘SEBI Listing Regulations, 2015). Accounting policies have been consistently applied except where a newly issued accounting standard, if initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. Your Company discloses standalone and consolidated unaudited financial results on a quarterly basis, which are subjected to limited review, and standalone and consolidated audited financial results on an annual basis.
INDUSTRY SCENARIO AND OUTLOOK
The Indian mining industry is one of the core industries in the country, providing basic raw materials to significant industries. India produces over 85 minerals including coal, lignite, bauxite, chromite, copper ore and concentrates, iron ore, manganese ore, silver, diamond, limestone, phosphorite and others.
The major mining states of India are Andhra Pradesh, Jharkhand, Odisha, Rajasthan, Karnataka, Madhya Pradesh and Maharashtra. in addition, India is the second-largest producer and importer of coal in the world. Indias coal consumption is anticipated to rise by 3.9% annually to 1.18 Billion Tonnes in 2024, based on 7.4% GDP growth rate between 2022 and 2024, this growth is partly catalysed by the timely availability of coal mined from within the country.
As of 2021, the number of reporting mines in India were estimated at 1,229, out of which mines for metallic minerals were estimated at 545 and non-metallic minerals at 684. Rise in infrastructure development, automotive production, power and cement sector are the major growth drivers of the sector. Therefore, Indias consumption outlook for various mineral resources is expected to remain optimistic in the long-term.
Besides, demand for iron and steel is set to continue given the strong growth expectations for the residential and commercial building industry. India is the second largest producer of steel in the world and contributes about 1.5% to its GDP. This sector is one of the leading sectors forming the cornerstone of the economy. in FY 2021-22, the production of crude steel was estimated at 112-114 MT, an increase of 8-9% year on year.
Crude steel production is anticipated to grow by 18%, to reach 120 Million Tonnes by the end of 2022, driven by abundant availability of raw materials and cost-effective labour. Indias finished steel exports (globally) were at 12.20 Million Tonnes in FY 2021-22, against 10.78 Million Tonnes in FY 2020-21.
Indias per capita steel consumption was 70 Kgs in FY 2020-21, compared with the global average of 227.5 Kgs, indicating room for growth. This represents the optimism of why Indias steel industry is expected to produce 300 MTPA by FY 2030-31, catalysed by demand from the construction, infrastructure, automotive, oil and gas and consumer durable sectors.
Indias power generation ranges from conventional sources like coal, lignite, natural gas, oil, hydro and nuclear power to non-conventional sources like wind, solar, agricultural and domestic waste. India is the third-largest producer and second-largest consumer of electricity. The countrys installed power generation capacity was 399.49 GW as on March 31, 2022.
The countrys installed renewable energy capacity stood at 152.36 GW, representing 38.56% of the overall installed power capacity. Electricity consumption per capita was around 2,280 Billion kilowatt hours in India in FY 2021-22 and is expected to reach 4,500 Billion kilowatt hours by FY 2031-32.
Indias power industry is forecast to grow at 6.5% a year between 2022 and 2024, catalysed by growing consumption from residential and industrial segments as well as general economic growth. By FY 2026-27, Indias power generation is expected to be around 620 GW, of which 38 % could be from coal and 44% from renewable energy sources, catalysed by schemes like Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY), Ujwal DISCOM Assurance Yojana (UDAY) and Integrated Power Development Scheme (IPDS).
Copper is one of the most important non-ferrous metals in India, addressing diverse needs. The size of the Indian copper industry is estimated at around 6.6 lakh Tonnes per annum, merely 3% of the global copper market in 2021. The factors influencing the growth of copper ofitake in India are regulations and performance of the London Metal Exchange, currency exchange rates, infrastructure developments, electric sector, telecom growth, renewable energy, electric vehicle ofitake and consumer durables, among others. Indias per capita consumption of copper was 0.5 Kg against a global average of 3.1 Kg in terms of exploration, only 20,000 sq. km. area has been explored out of a potential 60,000 sq. km in India. The country is a net exporter of refined copper as it has a higher refining capacity than that of its domestic demand.
Further, the refined copper sector is expected to grow at a CAGR of 7% until 2030.
With a rich heritage of gold mining, India is considered as one of the largest consumers of gold in the world. The countrys gold consumption was estimated at 850 Tonnes in 2022 compared to 797.30 Tonnes in 2021, the highest in last six years. Indias gold and trade contributed ~7.5% to Indias Gross Domestic Product (GDP) and 14% to Indias total merchandise exports. Moreover, the largest reserves of gold ore are located in Bihar (44%), Rajasthan (25%), Karnataka (21%), West Bengal (3%), Andhra Pradesh (3%) and Jharkhand (2%).
The Indian governments Jal Jeevan Mission, Pradhan Mantri Awas Yojana (PMAY), Bharatmala and Sagarmala policies are expected to catalyse public investment; projects like the dedicated freight corridor, metro railways, UJALA, port modernisation, new airports, renewable energy and irrigation projects could result in consumption growth.
Under the Union Budget for FY 2022-23, the government allocated H47 crore (USD 6.2 Million) to the Ministry of Steel. The government seeks to increase domestic per capita steel consumption to 160 Kg by 2030, creating a larger market for the mining sector.
The Indian governments ‘Power for all focus also accelerated capacity addition; it allocated H19,500 crore (USD 2.57 Billion) for the PLI scheme to accelerate manufacture of high-e_ciency solar modules.
To boost copper recycling in India, the Indian government announced a reduction in import duty on copper scrap from 5% to 2.5%.
The National Steel Policy aims to boost per capita steel consumption to 160 Kgs by FY 2030-31. Moreover, the government has a fixed objective of increasing rural consumption of steel from the current 19.6 Kgs per capita to 38 Kgs per capita by FY 2030-31.
The Indian government approved the production-linked incentive (PLI) scheme for speciality steel in 2021. The scheme is expected to attract investment worth ~ H400 Billion (USD 5.37 Billion) and expand speciality steel capacity by 25 Million Tonnes (MT), to 42 MT in FY 2026 -27 from 18 MT in FY 2020 -21.
As part of unlocking Indias vast mineral potential by exploration, the Ministry of Mines handed 152 mineral block reports to different state governments in 2021. Also, 52 potential G-4 mineral blocks approved by the Geological Survey of India (GSI) were handed to 15 state governments.
GLOBAL SCENARIO FOR FY 2021-22
The global economy grew at an estimated 5.9% in 2021 compared to a de-growth of 3.3% in 2020. This improvement was largely due to increased vaccination rollout the world over and a revival in economic activity based on catch-up consumption.
The prominent feature of the global economic activity during the year under review was a sharp revival in commodity prices to record levels following the drop at the time of pandemic outbreak. The commodities that reported a sharp increase in prices comprised steel, coal, oil, copper, food grains, fertilizers and gold.
The global mining market was estimated at USD 2.06 Trillion in FY 2021-22, higher than USD 1.84 Trillion in FY 2020-21. As the global economy gradually recovers from the pandemic, the metals and mining sector is benefitting from rebounding prices. Demand for most minerals were driven by the release of pent-up consumer spending, new government stimulus efforts and an accelerating global energy transition. Further, the global mining market is expected to reach USD 3.36 Trillion by 2026, growing at a CAGR of 12.9% during the forecasted period.
Exploration will continue to be a focus on the regions that have largely mitigated the pandemics impacts. The mining market is segmented into mining support activities, general minerals, stones, copper, nickel, lead and zinc, metal ore, and coal, lignite and anthracite. As of 2021, the coal, lignite and anthracite market is considered the largest segment of the mining market by type, accounting for 62.4% of the total market.
Asia Pacific was the largest region in the global mining market, accounting for 70.5% of the market in 2021, followed by North America, Western Europe and the other regions. Going forward, South America and the Middle East are expected to be the fastest growing regions in the mining market growing at a CAGR of 23.7% and 22.4% respectively from FY 2021-2026.
Increasing use of renewable energy is helping the mining companies across the globe to reduce power costs and control emissions in the mines. Besides, the solar or wind projects are built close to the mine sites, reducing the cost of connecting to the power grids. Site-appropriate renewable energy sources are reliable, consistent and economical. Therefore, various mining companies across the globe have started using renewable energy sources in their mines.
The global mineral processing industry was estimated at USD 83,150 Million in 2021 compared to USD 77,220 Million in 2020. Increasing industrialization, urbanisation and expansion in the mining industry are the leading factors catalysing the need for natural minerals which in return is creating various business opportunities for the global mining processing market.
Mineral processing market is segmented into types and applications. in terms of types: crushing, screening, grinding and classification. in terms of applications: metal ore mining and non-metallic ore mining. Further, the global mineral processing industry is expected to reach USD 168,130 Million in 2028, growing at a CAGR of 10.6% during the forecasted period. The demand for iron ore, copper and other metals & minerals are expected to drive the growth of the mineral processing industry.
Due to rise in awareness pertaining to environmental issues, the demand for environmental-friendly mining tools has increased and players in the global mining equipment are developing highly dependable machineries that are safe to the environment. The global mill liner market was estimated at USD 2.03 Billion in 2021. Mill liners are used to improve a mills performance and longevity; protecting the mill from wear and tear while also increasing its efficiency.
The metal mill liner section accounted for the largest share of the global grinding mill liner market. The five major mill liner consuming regions include North America, Europe, Asia-Pacific (APAC), Middle East and Africa (MEA) and South America. Rapid growth in the mining industry (metal mill liner and rubber mill liner) is the key growth driver of this industry. Moreover, the global grinding mill liner is expected to grow at a CAGR of 5.5% from 2021 to 2028.
Hydro cyclones are primarily used in mineral slurry separation. The global market size for hydro cyclones was estimated at USD 617 Million in 2020 and projected at USD 1.2 Billion by 2030, growing at a CAGR of 3.2% over the forecasted period FY 2020-2027. Gold, copper and iron ore segments account for 60% of the demand for hydro cyclones.
Demand for hydro cyclones experienced a rebound following Covid-19 relaxation, especially in the automotive, construction, consumer durables and other segments. Europe is the largest manufacturer of hydro cyclones with a market share of more than 50%, followed by North America and China.
Trommel screen, a mechanical screening machine used to separate materials, mainly in the mineral and solid-waste processing industries.
The global trommel screen market was expected to reach USD 0.94 Billion in 2020. The demand for global trommel screen is primarily driven by copper and iron mines in Latin American countries, accounting for 35% of the global trommel screen revenue. Continuous demand from various mineral companies, water resource management industries, solid-waste processing industries and rising industrialization and mining are catalysing the growth of this kind of _ltration screen. Copper, being the third most consumed metal in the world, was estimated at USD 20,231 Million in 2021. The growth was driven by increasing construction projects in rapidly developing countries such as China and India owing to rise in population and infrastructure.
The copper market is segmented by end-user industry which include automotive and heavy equipment, construction, electrical and electronics, industrial and other end-user industries. The global copper mine production was estimated at 21 Million Tonnes (MT) in 2021 and is expected to reach 25 MT in 2025. Further, this industry is expected to grow at a CAGR of 5.33% from 2021 to 2027. Besides, with ~5,600 kilo Tonnes (KT) of copper mined in 2021, Chile was the top copper producer worldwide, followed by Peru (2,200 KT) and China (1,800 KT).
Gold is considered as one of the most popular metal commodities, used as a long-term store of value and serves as a hedge against inflation. The global gold mining market was pegged at USD 214.10 Billion in 2021. The industry is expected to reach USD 249.60 Billion by 2026, growing at 3.1% from 2021 to 2026. Increasing gold reserves by central banks and government vaults, cultural a_nity, Covid-19 recovery and wealth creation are the major factors driving the growth of gold mining market. Further, the global gold production is expected to surpass 130 Million ounces (Moz) by 2024.
These factors will largely contribute to the optimistic market scenario in global mining equipment industry post the Covid-19 pandemic.
DIVIDEND AND ITS DISTRIBUTION POLICY
In accordance with Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations, 2015"), a Dividend Distribution Policy has been adopted by your Company, covering, inter alia, the parameters for declaration of dividend, utilisation of retained earnings, procedure for dividend declaration etc. The said Policy is available on the website of your Company at the following web-link: https://tegaindustries.com/DividendDistributionPolicy.pdf. Your Company has selected to not announce a dividend on the Equity Shares of your Company for the year under review, despite reporting a profit.
The decision was taken in the long-term interests of your Company for the following reasons: one, the Company is presently engaged in an asset building phase that warrants the maximized use of accruals; the larger the quantum of accruals that are reinvested will only reduce the Balance Sheet load of the ongoing capital expenditure.
Your company also believes that, given its sound long-term profitability, every rupee reinvested could generate an attractive business return across the foreseeable future than the dividend in the hands of shareholders today. By the virtue of aggressive accruals reinvestment, we are optimistic of accelerating a virtuous cycle of investment cum profitability that becomes larger. We believe that prudent payout conservatism at this point can only generate superior and sustainable returns, enhancing value for all stakeholders.
TRANSFER TO GENERAL RESERVES
Your Directors do not propose to transfer any amounts to the general reserves of the Company, instead have recommended to retain the entire amount of profits for the financial year ended March 31, 2022 in the profit and loss account.
Your Company did not have any amounts due or outstanding as at Balance Sheet date to be credited to the Investor Education and Protection Fund.
Your Company has not accepted any deposits from the public and consequently, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014.
During the year under review, your Company made a strong stock market debut and completed the Initial Public Offering (IPO) of 1,36,69,478 Equity Shares of Face Value of H10 each, aggregating to H6,192.27 Million. The IPO comprised an offer for sale of 33,14,657 equity shares aggregating to H1,501.54 Million by Mr. Madan Mohan Mohanka; 6,62,931 equity shares aggregating to H300.31 Million by Mr. Manish Mohanka (together with Madan Mohan Mohanka, the "Promoter Selling Shareholders") and 96,91,890 equity shares aggregating to H4,390.43 Million by Wagner Limited ( "Investor Selling Shareholder"). The IPO of your Company was subscribed over 219 times.
The total Authorized Share Capital of your Company is H1,050 Million divided into 7,00,00,000 equity shares of H10/- each and 3,50,00,000 preference shares of H10/- each. The total Paid up Equity Share capital of your Company is H662.93 Million divided into 6,62,93,149 equity shares of H10/- each.
The equity shares of your Company were listed on National Stock Exchange of India Limited (‘NSE) and BSE Limited (‘BSE) on December 13, 2021 at a 68% premium to its issue price of H453 per equity share at H760 per equity share.
As on March 31, 2022, the total shareholding of the Promoters Group of your Company is 79.17% and none of the Promoter/ Promoters Group shareholding is under pledge. Further, in compliance with Regulation 31(2) of SEBI Listing Regulations, 2015, the entire shareholding of promoter(s) and promoter group is in dematerialized form.
Further, during the year under review, 8,692,281 Compulsorily Convertible Participatory Preference (CCPP) shares earlier issued to Wagner Limited, Investor Selling Shareholder by your Company, were converted into equity shares as per the terms of Share Purchase Agreement and formed a part of the Companys Capital structure before IPO and offered for sale to the public.
EMPLOYEE STOCK OPTION SCHEME (ESOP)
Your Company has two ESOP schemes viz., ESOP 2011 and ESOP 2021.
Post IPO, the Members of your Company approved the amendments/modifications in the existing provisions of ‘Employee Stock Option Scheme-2011 ("ESOP–2011") in accordance with the aforesaid regulations vide postal ballot dated April 03, 2022. Further, no options have been granted under ESOP 2021.
The additional details of stock options are provided under Notes to Financial Statements (Standalone).
During the year under review, your Company did not issue or allot stock options.
Further, in compliance with Regulation 13 of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, a certificate from Secretarial Auditors confirming implementation of the scheme(s) in accordance with these regulations will be available electronically for inspection by the Company during the Annual General Meeting (AGM).
The objective of ESOP is to attract, retain and motivate the best available talent by way of rewarding employee stock options for their performance and to motivate them to participate in the growth of your Company, besides creating long term wealth in their hands. Accordingly, Options have been granted from time to time to the eligible employees of your Company.
The details as required to be disclosed under the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are available at https://tegaindustries.com/ESOPdisclosure.pdf.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Statement in Form AOC-1 containing the salient features of the financial statement of your Companys subsidiaries and joint ventures pursuant to first proviso to Section 129(3) of the Companies Act, 2013 (Act) read with Rule 5 of the Companies (Accounts) Rules, 2014, forms part of the Annual Report. Further, in line with Section 129(3) of the Act read with the aforesaid
Rules, SEBI Listing Regulations, 2015 and in accordance with the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS Rules) read with Schedule III to the Companies Act, 2013, Consolidated Financial Statements prepared by your Company includes the financial information of its subsidiary companies.
A Report on the performance and financial position of each of the subsidiaries included in the Consolidated Financial Statements prepared by your Company as per Rule 8(1) of the Companies (Accounts) Rules, 2014, forms part of the annual accounts of each of the subsidiary companies and also forms part of Form AOC-1. The said Report is not repeated here for the sake of brevity. Members interested in obtaining a copy of the annual accounts of the subsidiaries may write to the Company Secretary at the email id firstname.lastname@example.org.
In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of your Company and audited accounts of each of its subsidiaries, are available on your Companys website www.tegaindustries.com.
Hosch Equipment (India) Limited is a Joint Venture between your Company and Hosch (G.B.) Limited, England (50:50).
Highlights of the performance of subsidiaries and their contribution to the overall performance of your Company during the year under review are given below: (H in Million)
|Particulars||Country||Revenue from Operation||Profit / (Loss) Before Tax (PBT)||Profit/(Loss) After Tax (PAT)|
|Tega Industries Inc.||USA||380.59||4.80||3.22|
|Tega Industries Australia Pty. Ltd.||Australia||580.29||43.51||49.44|
|Tega Industries Canada Inc.||Canada||775.59||62.69||45.61|
|Tega Investments Limited||The Bahamas||-||0.21||(2.04)|
|Tega Holdings Pte Limited||Singapore||293.90||108.03||98.73|
|Tega Holdings Pty Ltd||Australia||-||(33.33)||(23.19)|
|Losugen Pty Ltd||Australia||414.94||16.58||11.09|
|Tega Industries Chile SpA and its subsidiaries (Material||Chile||2,204.09||191.49||154.54|
|Tega Investments South Africa Proprietary Limited||South Africa||-||0.50||0.50|
|Tega Industries Africa Proprietary Limited||South Africa||1,432.07||199.37||141.46|
|Tega Do Brasil Servicos Technicos Ltda||Brazil||1.25||(0.29)||(1.23)|
Your Company has formulated a Policy for determining Material Subsidiaries in accordance with SEBI Listing Regulations, 2015. The said policy is available on your Companys website at the following link: https://tegaindustries.com/PolicyforDeterminingMaterialSubsidiaries.pdf.
Details of Credit Ratings assigned to your Company are given in the Corporate Governance Report.
INTERNAL CONTROL SYSTEMS
As per Section 134(5)(e) of the Companies Act, 2013, the Directors have an overall responsibility for ensuring that your Company has implemented a robust system and framework of Internal Financial Controls. This provides the Directors with reasonable assurance regarding the adequacy and operating effectiveness of controls with regards to reporting, operational and compliance risks. Your Company has devised appropriate systems and framework including proper delegation of authority, policies and procedures, effective IT systems aligned to business requirements, risk based internal audits, risk management framework and whistle blower mechanism. Your Company had already developed and implemented a framework for ensuring internal controls over financial reporting.
The framework includes entity level policies, process and operating level standard operating procedures.
The entity level policies include anti-fraud policies (like code of conduct, insider trading policy and whistle blower policy) inter alia others. Your Company has also prepared Standard Operating Procedures (SOP) for each of its key processes, like, procure to pay, order to cash, hire to retire, treasury, fixed assets, inventory, manufacturing operations, etc. During the year, controls were tested and no reportable material weakness in design and effectiveness was observed.
The Internal Audit team monitors and evaluates the efficacy and adequacy of internal control systems in your Company, its compliance with operating systems, accounting procedures and policies at all locations of your Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action(s) in their respective area(s) and thereby strengthen the controls. Significant audit observations and corrective action(s) thereon are presented to the Audit Committee.
The Audit Committee reviews the reports submitted by the Internal Auditors in each of its meeting. Also, the Audit Committee at frequent intervals has independent sessions with the external auditor and the Management to discuss the adequacy and effectiveness of internal financial controls.
The risk strategy of your Company is enunciated and overseen by the Risk Management Committee of the Board, an independent Board level sub-committee that strives to put in place specific policies, frameworks and systems for effectively managing the various risks.
The policy on risk assessment and minimisation procedures was laid down by the Board of Directors of your Company at their meeting held on August 03, 2021, the said policy is reviewed by the Risk Management Committee, Audit Committee and the Board as and when required. The policy facilitates identification of risks at appropriate time and ensures necessary steps to be taken to mitigate the risks. Brief details of risks and concerns are given in the Management Discussion and Analysis Report.
Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return of your Company is available at www.tegaindustries.com.
Your Company follows a practice of drawing up an annual calendar for Board and Committee Meetings to ensure the presence of maximum number of Directors in all the Meetings. Primary business of the Board consists of evolving strategy, annual business plans, review of actual performance and course correction, and any other matter as may be deemed fit. The role of the Board also includes structuring, investment, and business re-organization. Matters such as capital expenditure, recruitment of senior level personnel, safety and environment, HR related developments, compliance with status and risk management are also reviewed by the Board from time to time.
Your Companys commitment to good governance practice allows the Board to effectively perform these functions. Your Company ensures that timely and relevant information is made available to all the Directors in order to facilitate their effective participation and contribution during the meetings and discussions.
Ten (10) Board Meetings were held during the FY 2021-22, the details of which are given in the Corporate Governance Report attached to this Report. The maximum time gap between any two (2) consecutive meetings did not exceed one hundred twenty (120) days.
COMMITTEES OF THE BOARD
Pursuant to various requirements under the Companies Act, 2013 and the SEBI Listing Regulations, 2015 , the Board of Directors has constituted/reconstituted (whenever necessitated) various committees such as Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and Risk Management Committee.
During the year under review, the Board of Directors of your Company constituted an Initial Public Offering (IPO) Committee, inter alia to approve and undertake various activities in relation to the Initial Public Offer.
The details of composition, terms of reference, etc., pertaining to these committees are mentioned in the Corporate Governance Report.
The Board of Directors at their meeting held on April 30, 2021, appointed Mr. Jagdishwar Prasad Sinha (DIN: 02345086) as an Independent Director of your Company for a period of five consecutive years with effect from May 01, 2021 till April 30, 2026, based on the recommendation of the Nomination and Remuneration Committee and subject to approval of the shareholders of your Company. Further, Mr. Sinha was appointed as an Independent Director of your Company for a period of five years with effect from May 01, 2021 till April 30, 2026 at the Extraordinary meeting held on August 07, 2021.
The Board of Directors at their meeting held on April 30, 2021, appointed Mrs. Madhu Dubhashi (DIN: 00036846) as an Independent Director of your Company for a period of two consecutive years with effect from May 01, 2021 till April 30, 2023, based on the recommendation of the Nomination and Remuneration Committee and subject to approval of the shareholders of your Company. Further, Mrs. Dubhashi was appointed as an Independent Director of your Company for a period of two years with effect from May 01, 2021 till April 30, 2023 at the Extra-ordinary meeting held on August 07, 2021. Further, during the year under review, Mr. Syed Yaver Imam (DIN: 00588381) has been re-designated as an Whole Time Director of your Company with effect from April 01, 2021.
During the year under review, Mrs. Manju Mohanka (DIN: 00052345) resigned as Director of your Company w.e.f. August 03, 2021 in terms of Section 168 of the Companies Act, 2013 due to personal pre-occupations.
Further, Mr. Dhiraj Poddar (DIN: 01946905) ) resigned as Director of your Company w.e.f. November 10, 2021 in terms of Section 168 of the Companies Act, 2013 due to personal pre-occupations. Further, Mr. Hemant Madhusudan Nerurkar (DIN: 00265887) and Mr. Rudolph Michael Edge (DIN: 00626151) ceased to be Directors of your Company w.e.f. March 31, 2022 due to completion of their term as Independent Directors.
The Board placed on record its deep appreciation for the contributions of Mrs. Mohanka, Mr. Poddar, Mr. Nerurkar and Mr. Edge during their tenure as Directors in the Company. Further, the Board of Directors of your Company at their meeting held on March 31, 2022, appointed Mr. Ashwani Maheshwari (DIN: 07341295), as an Additional Director (Category – Non - Executive Director) and Independent Director of your Company for a period of 5 (five) consecutive years with effect from April 01, 2022 subject to the approval of the shareholders.
In accordance with the provisions of Section 152 of the Companies Act, 2013 (Act) and the relevant Rules and your Companys Articles of Association, Mr. Madan Mohan Mohanka (DIN: 00049388) retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.
The brief resume/details relating to Directors who are proposed to be appointed/re-appointed are furnished in the Notice of the ensuing AGM. The Board of Directors of your Company recommends the appointment/re-appointment of the above Directors.
Your Company has received declaration from each of the Independent Directors under Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of SEBI Listing Regulations, 2015 that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI Listing Regulations, 2015 and that he/she is not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact his/her ability to discharge his/her duties with an objective of independent judgement and without any external influence. With regard to integrity, expertise and experience (including the prescience) of the Independent Director appointed/re-appointed ,the Board of Directors are of the opinion that all the Independent Directors are persons of integrity and possess relevant expertise and experience and their continued association as Directors will be of immense benefit and in the best interest of your Company.
All requisite declarations were presented before the Board. Further, the Board of Directors, took on record the declaration and confirmation submitted by the Independent Directors under Regulation 25(8) of SEBI Listing Regulations, 2015, after undertaking due assessment of the veracity of the disclosures submitted. Further, at the time of appointment of Independent Directors, a formal letter of appointment is given to the Director, inter alia explaining the role, duties and responsibilities of the Director. Disclosures w.r.t. Familiarisation programmes for Independent Directors are available on the link: https://tegaindustries.com/ PolicyonFamiliarisationProgrammeforIndependentDirectors.pdf.
Pursuant to Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2019 (‘the Rules) effective from December 01, 2019, the Independent Directors of your Company have registered themselves with the Databank maintained by the Indian Institute of Corporate Affairs (IICA) and their names presently stands included in the Databank of IICA. The Independent Directors have successfully qualified the Online Presidency Self Assessment Test, as may be applicable.
Further, Mr. Mehul Mohanka, Managing Director & Group CEO of the Company, was in receipt of remuneration of H26.99 Million for the FY 2021-22 from Tega Holding Pte Ltd., wholly owned subsidiary of your Company.
KEY MANAGERIAL PERSONNEL
During the year under review, the Board of Directors at their meeting held on December 23, 2021 have appointed Mr. Manoj Kumar Agarwal, Chief Financial Officer, a qualified Company Secretary and Chartered Accountant, as the Chief Financial Officer, Company Secretary & Compliance Officer of your Company with effect from December 23, 2021 on an interim basis in place of Mr. Sudipta Bhowal, who had resigned from the office of Company Secretary of your Company effective from closure of the business hours of December 19, 2021.
As on March 31, 2022, Mr. Madan Mohan Mohanka (DIN: 00049388), Chairman & Executive Director, Mr. Mehul Mohanka (DIN: 00052134), Managing Director and Group CEO, Mr. Syed Yaver Imam (DIN: 00588381), Whole Time Director and Mr. Manoj Kumar Agarwal, Chief Financial Officer, Company Secretary & Compliance Officer are the Key Managerial Personnel (KMPs) of your Company in terms of the provisions of Section 203 of the Act.
NOMINATION & REMUNERATION POLICY
The Board of Directors of your Company have adopted a Policy on Selection & Remuneration of Directors, Key Managerial Personnel and other employees based on the recommendation of the Nomination & Remuneration Committee pursuant to the provisions of Section 178(3) of the Companies Act, 2013 and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This policy formulates the criteria for determining qualifications, competencies, positive attributes and independence for the appointment of a director (executive/non-executive) and also the criteria for determining the remuneration of the directors, key managerial personnel (KMPs) and other employees. The Policy was amended by the Board during the year, inter alia, in consonance with the applicable provisions of the SEBI Listing Regulations, 2015 pursuant to the IPO of your Company. The amended Policy may be accessed on the link - https://tegaindustries. com/NominationAndRemunerationPolicy.pdf.
Pursuant to the provisions of the Act and Regulation 17 of the SEBI Listing Regulations, 2015, the Board has carried out the evaluation of its own performance and that of its Committees as well as evaluation of performance of the individual directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report attached to this Report.
Your Company continues to enjoy the support and patronage of Axis Bank Limited, Standard Chartered Bank, Citibank, RBL Bank Limited, ICICI Bank Limited and ICICI Bank UK PLC for financing its loan requirements.
RELATED PARTY TRANSACTIONS
During the financial year ended March 31, 2022, all transactions with the Related Parties as defined under the Act read with Rules framed thereunder, were in the ordinary course of business and at arms length basis.
During the year under review, your Company did not enter into any material Related Party Transaction which requires prior approval of the Members. There have been no materially significant related party transactions made by your Company with the Promoters, the Directors or the Key Managerial Personnel which may be in conflict with the interests of your Company at large. Since all related party transactions entered into by your Company were in the ordinary course of business and also on an arms length basis, therefore, details required to be provided in the prescribed Form AOC - 2 are not applicable to your Company.
The Policy on Related Party Transactions as approved by the Board can be accessed on your Companys website at following web-link: https://tegaindustries.com/RelatedPartyTransactions.pdf. The details of the related party transactions are set out in the notes to the financial statements.
VIGIL MECHANISM AND WHISTL EBLOWER POLICY
Your Company has formulated a codi_ed Whistle-Blower Policy incorporating the provisions relating to Vigil Mechanism in terms of Section 177 of the Companies Act, 2013 and Regulation 22 of SEBI Listing Regulations, 2015, in order to encourage Directors and Employees of your Company to escalate to the level of the Audit Committee any issue or concerns impacting and compromising with the interest of your Company and its stakeholders in any way. Your Company is committed to adhere to highest possible standards of ethical, moral and legal business conduct and to open communication and to provide necessary safeguards for protection of employees from reprisals or victimisation, for whistle blowing in good faith. The said Policy is available on your Companys website at https://tegaindustries. com/WhistleBlowerPolicy.pdf
Further, no complaints were reported under the Vigil Mechanism during the year.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has a zero tolerance for sexual harassment at workplace and has adopted a policy viz., Policy on Prevention of Sexual Harassment in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act). Your Company is also in compliance with the provisions of the POSH Act, with respect to the constitution of Internal Complaints Committee.
During the year under review, no complaint / case was filed or was pending for redressal. The said policy is available on the website of the Company at https://www.tegaindustries.com/hr-philosophy/prevention-of-sexual-harassment/.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names of the top ten employees in terms of remuneration drawn and names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Report. Disclosures relating to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. Having regard to the provisions of the second proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of your Company. Any member interested in obtaining such information may address their email to compliance.officer@ tegaindustries.com.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTFLOW
The particulars relating to the conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act are given in Annexure – I attached hereto and forms part of this Report.
MATERIAL CHANGES AND COMMITMENTS
Except those disclosed in this Annual Report, there are no material changes and commitments affecting the financial position of your Company between the end of the financial year i.e. March 31, 2022 and the date of this Report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS/ TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND YOUR COMPANYS OPERATIONS IN FUTURE
There are no such orders passed by the regulators/courts/ tribunals impacting the going concern status and your Companys operations in future.
In terms of the provisions of Regulation 34(3) of the SEBI Listing Regulations, 2015, the Corporate Governance Report and the Certificate on the compliance of conditions of Corporate Governance forms part of the Annual Report and are given separately as Annexure - II.
BUSINESS RESPONSIBILITY REPORT
Regulation 34(2) of the Listing Regulations, inter alia, provides that the annual reports of the top 1000 listed entities based on market capitalisation (calculated as on March 31st of every financial year), shall include a Business Responsibility Report. Since your Company is one of the top 1000 listed entities, it has presented its Business Responsibility Report for the FY 2021-22, as Annexure - III to this Report.
STATUTORY AUDITORS AND AUDITORS REPORT
Pursuant to the applicable provisions of the Companies Act, 2013, the members of your Company at their 44th Annual General Meeting (AGM) held on October 20, 2020, appointed M/s. Price Waterhouse & Co Bangalore LLP, Chartered Accountants (Firm Registration No. 007567S/S-200012), as the Statutory Auditors of your Company to hold office from the conclusion of the 44th AGM until the conclusion of the 49th AGM of your Company to be held in the year 2025.
The reports given by the Statutory Auditors, M/s. Price Waterhouse
& Co Bangalore LLP, Chartered Accountants on the standalone and consolidated financial statements of your Company for the year ended March 31, 2022 forms part of this Annual Report and there is no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Reports.
The Auditors of your Company have not reported any fraud in terms of the second proviso to Section 143(12) of the Act.
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. Accordingly, the Board of Directors of your Company has on the recommendation of the Audit Committee on May 24, 2022, approved the appointment of M/s Mani & Co. as the Cost Auditors of your Company for the financial year ended March 31, 2023. As required under the Act, a resolution seeking rati_cation of the remuneration payable to the Cost Auditors forms part of the Notice convening the ensuing Annual General Meeting for FY 2021-22.
As per Section 204 of the Companies Act 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company is required to have the audit of its secretarial records conducted by a Company Secretary in Practice.
Accordingly, your Company appointed Mr. Sachin Kumar, Practicing Company Secretary (Certificate of Practice No. 14154) as the Secretarial Auditor of your Company for FY 2021-22 to conduct the Secretarial Audit pursuant to Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
The Secretarial Audit Report for the financial year ended March 31, 2022 does not contain any qualification, reservation or adverse remark or disclaimer and the same forms part of the Annual Report as Annexure - IV.
INTER-CORPORATE LOANS AND INVESTMENTS
Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the financial statements forming part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by your Company, which has been approved by the Board. The Policy was last revised by the Board at its meeting held on August 03, 2021 and is available on the website of the company at https://www.tegaindustries.com/csrpolicy.pdf. Your Company strives to meet its commitment towards the community by committing its resources and energies to social development. The CSR Committee of your Company has formulated a CSR Policy which describes the multiple lines around which the CSR activities of your Company are positioned being education and skills development, social and economic welfare, environmental sustainability and such other activities included in Schedule VII of the Act as may be identified by the CSR Committee from time to time.
Your Company has identified five focus areas of engagement which are as under:
Health: Affordable solutions for healthcare through improved access, awareness and health seeking behavior.
Education: Access to quality education, training and skill enhancement.
Protection of National Heritage, Art and Culture.
Rural Transformation: Creating sustainable livelihood solutions, addressing poverty, hunger and malnutrition.
Environment: Environmental sustainability, ecological balance, conservation of natural resources.
Your Company strives to meet its commitment towards the community by committing its resources and energies to social development. Your Company spends amount on projects keeping in mind sustainability, impact on the desired recipients and efficacy of implementing agencies. Further, your Company believes in contributions which have a long term impact on the society at large. Accordingly, during the year under review your Company made contributions in ongoing projects with an objective of social welfare and development. The unspent amount arising out of these ongoing projects has been transferred by your company within a period of thirty days from the end of the financial year to a special account opened by your company in that behalf, and such amount shall be spent by your company in pursuance of its obligation towards the Corporate Social Responsibility Policy within a period of three financial years from the date of such transfer.
A report on Corporate Social Responsibility (CSR) during the financial year ended March 31, 2022 pursuant to the provisions of clause (o) of sub-section (3) of Section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014 is given as Annexure V to this Report.
Industrial relations at Kalyani and Samali units in West Bengal and Dahej unit in Gujarat continue to be satisfactory during the year under review.
COMPLIANCE OF SECRETARIAL STANDARDS
Your Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
DIRECTORS RESPONSIBILITY STATEMENT
The Board of Directors acknowledge the responsibility for ensuring compliance with the provisions of Section 134(3)(c) read with Section 134(5) of the Act and Regulation 18 of the SEBI Listing Regulations, 2015 in the preparation of the annual accounts for the year ended March 31, 2022 and state that:
(i) in the preparation of the annual accounts for the financial year ended March 31, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(ii) they 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 your Company at the end of the financial year and of the profit of your Company for the year;
(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;
(iv) they have prepared the annual accounts for the financial year ended March 31, 2022 on a going concern basis;
(v) they have laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and are operating effectively;
(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws to your Company and the systems are adequate and operating effectively.
Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these matters during the year under review:
Issue of Equity shares with differential rights as to dividend, voting or otherwise.
Issue of sweat equity shares.
There has been no change in the business of your Company.
There is no proceeding pending under the Insolvency and bankruptcy Code, 2016.
There is no instance of one time settlement with any Banks/ financial institutions.
Your Directors would like to express their grateful appreciation for the excellent support and co-operation received from its Shareholders, the Financial Institutions, Banks, Central & State Government Authorities, RBI, SEBI, MCA, Stock Exchanges, Depositories, Credit Rating Agencies, Customers, Manufacturers, Vendors, Suppliers, Business Associates and other Stakeholders during the year under review. Your Directors also place on record their deep appreciation for the valuable contribution of the employees for the progress of your Company during the year and look forward to their continued co-operation in realization of the corporate goals in the years ahead.
|On behalf of the Board of Directors|
|Madan Mohan Mohanka|
|Date: May 24, 2022||DIN: 00049388|