tega industries ltd share price Directors report


Dear Members,

Your Directors have the pleasure of presenting the 47th Annual Report together with the Audited Financial Statements of your Company for the Financial Year ended March 31,2023.

FINANCIAL SNAPSHOT

(H in Million)

Particulars

Consolidated

Standalone

Year ended March 31, 2023 Year ended March 31, 2022 Year ended March 31, 2023 Year ended March 31,2022

Total Income

12,346.56 9,759.54 7,400.97 6,370.48

Total Expenses

10,028.75 8,237.98 5,904.96 5,132.76

Profit before share of net profit of Joint Venture accounted for using equity method and tax

2,317.81 1,521.56 - -

Share of net profit of Joint Venture accounted for using equity method

43.18 28.15 - -

Profit before tax

2,360.99 1,549.71 1,496.01 1,237.72

Total Tax

520.69 380.72 357.81 278.33

Profit After Tax

1,840.30 1,168.99 1,138.20 959.39

Other Comprehensive Income (net of tax)

18.40 54.14 (3.71) 0.82

Total Comprehensive Income

1,858.70 1,223.13 1,134.49 960.21

Basic Earnings Per Share (in H)

27.76 19.65 17.17 16.13

DIVIDEND AND ITS DISTRIBUTION POLICY

We obtain our Financial Capital through the funds generated from our business operations and financing activities. Our strong performance on the back of meticulous execution over the years, as reflected in the combination of high growth and profitability, has led to building a strong, debt-free, and liquid Balance Sheet. Our focus is on ensuring a sustainable and profitable financial position. We also understand that our stakeholders expect us to deliver long-term growth riding on a solid strategy and prudent business decision and are looking for good returns on their investment and dividends.

For the Financial Year ended March 31, 2023, the Board of Directors has recommended a final dividend of H2/- per equity share i.e. 20% on the Ordinary Shares of the Company of the face value of H10 (ten) each, subject to shareholders approval in the ensuing AGM.

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, the procedure for dividend declaration, etc. The said Policy is available on the website of your Company at the following web-link: https://www.tegaindustries.com/investors/policies/dividend_ distribution_policy.pdf.

The dividend payout for the year under review is in accordance with your Companys policy to pay sustainable dividend linked

to long-term growth objectives of your Company to be met by internal cash accruals.

PERFORMANCE REVIEW & STATE OF COMPANYS AFFAIRS

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, based on sales. Your Company offers comprehensive solutions to marquee global clients in the mineral beneficiation, mining and bulk solids handling industry, through its wide product portfolio.

During the year under review your Company expanded scale that resulted in improved operating leverage and substantial margin improvement. We have witnessed robust sales growth across all regions, reflecting the effectiveness of our strategies and the value we provide to our customers. Despite the challenging global macro environment characterized by geopolitical issues in Europe, a recessionary outlook in leading economies, currency volatility and inflationary pressures on raw materials, your Company have managed to deliver significant improved results.

The Businesses continued to drive improvement in profitability through multi-pronged interventions viz. consumer centricity, focus on execution excellence, premiumization, supply chain agility, agility in seizing market opportunities, focus on execution excellence, judicious pricing actions and strategic cost management initiatives.

Overall for FY 2022-23, at a consolidated basis, the total Income at H12,346.56 Million (previous year: H9,759.54 Million) increased by 26.5 %, while EBITDA increased by 40.59 % to H2910.98 Million. Profit Before Tax and Exceptional items at H2,360.99 Million grew by 52.3 % over previous year and Profit After Tax stood at H1,840.30 Million (previous year: H1,168.99 Million). Earnings Per Share for the year stood at H27.76 (previous year: H19.65)

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.

ACQUISITION OF MCNALLY SAYAJI ENGINEERING LIMITED

Your Company has made an important strategic move by acquiring McNally Sayaji Engineering Limited. On February 24, 2023, your Company received an approval from the Honourable National Company Law Tribunal (NCLT) for acquisition of McNally Sayaji Engineering Limited (MSEL) through Corporate Insolvency Resolution Process (CIRP) process. Your Company completed the acquisition of MSEL on March 29, 2023, through Tega Equipments Private Limited, a wholly-owned subsidiary of your Company. With this acquisition your Company has taken a decisive step forward to become a comprehensive solutions provider in the global mineral beneficiation, mining and bulk solids handling industry. The acquisition of MSEL, an Original Equipment Manufacturer (OEM) for the mining and mineral beneficiation sector is expected to enhance your Companys footprint in India and offer comprehensive solutions to global clients through a wide synergistic product portfolio. Your Company designs and manufactures critical-to-operate and recurring consumable products in the mineral processing industry, offers comprehensive solutions across the world. This acquisition is directed at holistic value-creation for all stakeholders. Your Company is now positioned as one of the most integrated global companies in its space, strengthening its brand and visibility as a turn-to global solutions provider.

MSEL enjoys a rich track record of having installed equipment in India, Russia, Kenya, Mozambique, Zambia, South Africa, Indonesia, UAE, Oman and Saudi Arabia. The Company intends to build existing MSEL competencies and extensive global presence to graduate it into one of the leading equipment manufacturing players the world over.

INDUSTRY SCENARIO AND OUTLOOK

Global growth is projected to moderate from an estimated 3.4% in 2022 to 2.9% in 2023, then rise to 3.1% in 2024 - lower than the historical annual average of 3.8%. The lower growth in 2023 is due to the rising central bank rates to combat inflation and the war in Ukraine. Emerging market and developing economies are expected to recover in 2023 and 2024, while advanced economies will experience a decline in growth. The world trade growth is forecasted to decline to 2.4% in 2023 before rising to 3.4% in 2024. In 2023, oil prices are projected to fall by about 16%, while nonfuel commodity prices are expected to fall, on average, by 6.3%.

The global mining market grew from $2022.6 billion in 2022 to $2145.15 billion in 2023 at a compound annual growth rate (CAGR) of 6.1%. The Russia-Ukraine war disrupted the chances of global economic recovery from the COVID-19 pandemic, at least in the short term. The war between these two countries has led to economic sanctions on multiple countries, a surge in commodity prices and supply chain disruptions, causing inflation across goods and services and affecting many markets across the globe. The mining market is expected to grow to $2775.5 billion in 2027 at a CAGR of 6.7%.

Government policies to support the mining industry are expected to drive the mining market. Governments are providing subsidies and encouraging foreign direct investments in the mining industry. Growing industrialization, urbanisation and expansion in the mining industry are the leading factors catalysing the need for natural minerals which has developed the needs of various business opportunities for the global mining processing market. Mineral processing market is divided into types and applications in terms of types: crushing, screening, grinding and classification along with metal ore mining and non-metallic ore mining in terms of applications. Moreover, the global mining machinery and equipment market size is expected to grow from $70.35 billion in 2022 to $78.08 billion in 2023 at a compound annual growth rate (CAGR) of 11%. The mining machinery and equipment market is expected to reach $113.35 billion in 2027 at a CAGR of 9.8%. The increasing demand for mining is fueling the growth of the mining machinery and equipment market. Underground advanced mining equipment such as trucks, loaders and diggers are used to dig up the material and are usually transported to the ground through skips or lifts for further production. Mining has performed a key role in the economic growth of developed nations such as Australia, USA and Canada. The demand for iron ore, copper and other metals and minerals are expected to drive the growth of the mineral processing industry.

Global mill liner market is expected to reach USD 1078.54 million by 2029 with a CAGR of 5% between 2023 and 2029 on account of growing awareness pertaining to environmental issues, 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. Mill liners improve a mills performance and durability; 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 key mill liner consuming regions include North America, Europe, Asia-Pacific (APAC), Middle East and Africa (MEA) and South America. Faster growth in the mining industry (metal mill liner and rubber mill liner) is the major growth driver of this industry.

The global grinding mill liner market size is expected to grow at a CAGR of 5.5% from 2021 to 2030. The Asia Pacific is expected to be the fastest-growing region during the forecast period. The growth of this market can be attributed to the increasing demand for cement and minerals in this region. The global hydrocyclones market has reached $664 million in 2022 and is expected to expand at a CAGR of 6.7% to reach a market valuation of $1.27 billion by the end of 2032. Europe remained 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. As per Future Market Insights, the trommel screen market is expected to attain a value of $180 million by the end of 2023. Global demand for trommel screens is expected to grow at a CAGR of 3.3% to $250 million in 2032. The demand for global trommel screen is mainly fueled by copper and iron mines in Latin American countries, contributing to 35% of the global trommel screen revenue. The trommel screen market presents opportunities in emerging markets such as Asia-Pacific and Latin America, where there is growing demand for waste management solutions and a need to improve the efficiency of construction and mining operations. As these regions continue to develop and urbanize, the trommel screen market is expected to witness growing demand.

The global copper market size will grow from $160.7 billion in 2022 to $176.74 billion in 2023 at a compound annual growth rate (CAGR) of 10% The growth in the copper market is due to increasing construction projects in rapidly developing countries such as China and India owing to the rising population and infrastructure. Asia-Pacific was the largest region in the copper ore mining market in 2022. Autonomous drilling systems are being implemented by the copper industries to enhance safety, efficiency and productivity. This technology is being used to accurately identify drill location and drill production blast holes more effectively using advanced levelling technologies. The copper market size is expected to grow from $254.33 billion in 2027 at a CAGR of 9.5%. Increase in demand for gold and increase in the use of gold in various industries drive the growth of the gold mining market. These factors are expected to drive the growth of mineral mining equipments in the coming years.

OPERATIONS

Your Company operates in six cutting edge manufacturing plants across the world, with three located in India and three strategically placed in major mining locations including Chile, South Africa, and Australia. Your Companys sales and distribution network spans over 70 countries.

Your Company has adopted Industry 4.0 by leveraging digital for competitiveness through implementation of a fully automated Enterprise Resource Planning solutions that uses plant level Supervisory Control and Data Acquisition (SCADA) to generate monthly bills. Your Company has invested in a digital Management Information System that has enhanced a granular understanding of our business and prompted data-based initiatives. This has strengthened our procurement, manufacturing, sales, HR and costing.

Industrial Relations at Kalyani Unit, Industrial Product Division, Samali and Dahej Unit, Gujarat continued to be satisfactory during the year under review.

HUMAN RESOURCES

Your Companys human resource objective is to build the organization as an employer of choice. Your Company seeks to motivate employees to realize the best out of them and align employee goals with the organizational objective, ensuring that employees work happily. With an intent to break the barriers, provide equitable opportunities, your Company has maintained its strong focus on Diversity, Equity, and Inclusion. Women employees have been engaged across senior positions. During the year under review, from the existing 26 weeks, the Maternity leave was extended for 26 weeks (work from home) for women employees. A focus to engage women on sabbatical was initiated, coupled with bridge orientation programs.

Your Company implemented Darwin box to enhance human resource automation that empowered employees to address their HR needs online; online recruitment management widened an awareness across all employees of global opportunities within your Company.

BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

Your Company is on a mission to achieve new standards in sustainability goals. We aspire towards a net zero carbon footprint. Caring for the planet and its people is the core of our purpose of doing business. Even while solving complex challenges for the industry, we stay protective about the impact that our operations and conduct create on the world around us. We have rolled out Environment, Sustainability & Governance (ESG) drive across your Company to subscribe to international benchmarks and compliances. Our intra-company ESG drive covers steps to amplify environment friendly, safe and ethical governance practices. We are actively fine-tuning our systems and strategies around ESG roadmap and report.

Regulation 34(2) of the Listing Regulations, inter alia, provides that with effect from the financial year 2022-23, the top one thousand listed entities based on market capitalization shall submit a Business Responsibility and Sustainability Report in the format as specified by the Securities and Exchange Board of India. Since your Company is one of the top 500 listed entities, it has presented its Business Responsibility and Sustainability Report for the FY 2022-23, in the prescribed format and the same forms an integral part of this report as Annexure - I.

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 - II attached hereto and forms part of this 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 is available on the website of your Company at https://www.tegaindustries.com/investors/policies/ corporate_social_responsibility_policy.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 behaviour.

• 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 31,2023 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 III to this Report.

RISK MANAGEMENT

Risk Management at your Company forms an integral part of Management focus. The Risk Management Policy of the Company, which is approved by the Risk Management Committee of the Board (RMC) and the Board of Directors, provides the framework of Enterprise Risk Management (ERM) by describing mechanisms for the proactive identification and prioritization of risks based on the scanning of the external environment and continuous monitoring of internal risk factors. The ERM framework identifies, evaluates, manages and reports risks arising from the Companys operations and exogenous factors. The Company has deployed both bottom-up and top-down approaches to drive enterprisewide risk management. The Leadership Team as well as the RMC identifies and assesses long-term, strategic and macro risks for the Company. The RMC oversees the risk management process in the Company. The RMC is chaired by an Independent Director. Further, the Chairman of the RMC briefs the Board at its Meetings about the significant discussions at each of the RMC Meetings. This robust governance structure has also helped in the integration of the ERM with the Companys Strategic Planning Process where emerging risks are used as inputs in such process. Identified risks are used as one of the key inputs in the strategy and business plans. Considering the volatility, uncertainties and unprecedented challenges involved in the businesses, the risk management has gained more importance over the last few years, and it is imperative to manage and address such challenges effectively. Some of the risks identified are set out in the Management Discussion & Analysis which forms part of this Annual 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. Your Company has an Internal Financial Controls (IFC) framework, commensurate with the size, scale, and complexity of your Companys operations. The Board of Directors of your Company is responsible for ensuring that Internal Financial Controls (IFC) have been laid down by your Company and that such controls are adequate and operating effectively. The internal control framework has been designed to provide reasonable assurance with respect to recording and providing reliable financial and operational information, complying with applicable laws, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance with corporate policies.

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 has already developed and implemented a framework for ensuring internal controls over financial reporting. The framework includes entity level policies, process, and operating level controls & policies. 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 risk control matrix (RCM) 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 significant deficiency / material weakness was observed.

The Internal Audit team develops an annual audit plan based on the risk profile of the business activities. The Internal Audit plan is approved by the Audit Committee, which also reviews compliance to the plan. The Internal Audit team monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures, and policies at all locations of the 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 quarterly meeting.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company and its subsidiaries for FY 2022-23 are prepared in compliance with the applicable provisions of the Act and as stipulated under Regulation 33 of the SEBI Listing Regulations as well as in accordance with the Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015. The Audited Consolidated Financial Statements together with the Auditors Report thereon form part of this Report. Pursuant to the provisions of Section 136 of the Act, the Financial Statements of the Company, along with relevant documents and separate annual accounts in respect of subsidiaries are available on the website of the Company.

SHARE CAPITAL

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.

During the year under review, 60,963 equity shares of H10/- each were allotted to the employees pursuant to the exercise of options under the Employee Stock Option Scheme 2011. This resulted in a change in the total paid-up Equity share capital from H662.93 million to H663.54 million.

As on March 31, 2023, the total paid up Equity share capital of your Company is H663.54 Million divided into 6,63,54,112 equity shares of H10/- each. The total shareholding of the Promoter(s) and Promoter Group of your Company is 79.10% and none of the Promoters/ Promoter 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.

TRANSFER TO GENERAL RESERVES

Your Directors do not propose to transfer any amounts to the general reserves of your Company, instead have recommended to retain the entire amount of profits for the financial year ended March 31, 2023 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.

EMPLOYEE STOCK OPTION SCHEME

In view of the regulatory changes with the introduction of the Securities Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, the Members of your Company approved the amendments /modifications in the existing provisions of Employee Stock Option Scheme-2011 ("ESQP—2011") in accordance with the aforesaid regulations vide postal ballot dated April 03, 2022. Your Company received inprinciple approval from the Stock Exchanges for the said scheme.

During the year under review, the Nomination and Remuneration Committee of your Company has approved the allotment of 60,963 Equity Shares to employees of your Company vide resolution by circulation passed on February 02, 2023. Your Company received listing and trading approval from the Stock Exchanges for the aforesaid shares.

The objective of ESOP-2011 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 had 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://www.tegaindustries.com/AGM/ ESOPdisclosure.pdf.

DEPOSITS

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 as on March 31, 2023.

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 the first proviso to Section 129(3) of the Companies Act, 2013 (the "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 compliance.officer@tegaindustries.com.

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.

As on March 31,2023, the Company had 11 subsidiaries (1 in India and 10 overseas) and 1 Joint Venture. There has been no material change in the nature of the business of the subsidiaries. During the year under review, Tega Investments Limited, Bahamas, wholly-owned subsidiary was dissolved and accordingly ceased to be a subsidiary of the Company with effect from November 14, 2022. Subsequent to the year end, MSEL became a Subsidiary of the Company with effect from March 29, 2023. Further, Tega Equipments Private Limited, another subsidiary, was merged with the above subsidiary with effect from March 29, 2023. Hosch Equipment (India) Limited is a Joint Venture between your Company and Hosch (G.B.) Limited, England (50:50).

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: www.tegaindustries.com/investors/policies/ policy_for_determining_material_subsidiaries.pdf.

FINANCE

Your Company continues to enjoy the support and patronage of Axis Bank Limited, Standard Chartered Bank, Citibank, RBL Bank Limited, ICICI Bank Limited and for financing its loan requirements.

RELATED PARTY TRANSACTIONS

During the financial year ended March 31, 2023, all transactions with the Related Parties as defined under the Act read with Rules framed thereunder and SEBI Listing Regulations, as amended from time to time, 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 maybe 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, the disclosure of related party transactions as required under Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 is not applicable to the Company for FY 2022-23 and hence does not form part of this Annual Report. With a view to ensure continuity of day- to-day operations, an omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and on an arms length basis. A statement giving details of all related party transactions entered pursuant to the omnibus approval so granted is placed before the Audit Committee on a quarterly basis for its review. In terms of Regulation 23 of the SEBI Listing Regulations, the Company submits details of related party transactions on a consolidated basis as per the specified format to the stock exchanges on a halfyearly basis. The details of the transactions with related parties are provided in the accompanying Financial Statements.

The Company has formulated a Policy on Related Party Transactions (RPT Policy) for identifying, reviewing, approving and monitoring of Related Party Transactions. The Policy on Related Party Transactions as approved by the Board can be accessed on your Companys website at following web- link: https://www.tegaindustries.com/investors/policies/policy_on_ related_party_transactions.pdf

The details of the related party transactions are set out in the notes to the financial statements.

INTER-CORPORATE LOANS AND INVESTMENTS

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.

ANNUAL RETURN

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.

CREDIT RATING

Details of Credit Ratings assigned to your Company are given in the Corporate Governance Report.

BOARD MEETINGS

Your Company follows the 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.

7 (Seven) Board Meetings were held during the FY 2022-23, the details of which are given in the Corporate Governance Report attached to this Report. The maximum time gap between any 2 (two) consecutive meetings did not exceed 120 (one hundred twenty) 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, StakeholdersRelationship Committee, Corporate Social Responsibility Committee and Risk Management Committee. During the year under review, there were no instances when the recommendations of the Committees were not accepted by the Board.

During the year under review, two new Committees were constituted by the Board of Directors (i) the Finance & Operations Committee for operational convenience in handling day to day banking and operations related matters and (ii) Sustainability Committee, to oversee and drive sustainability initiatives within the organization. This Committee is responsible for developing and effectively implementing sustainability-based policies and strategies that are not only techno-economically viable but which also ensure that it meets the expectations and concerns of all interested stakeholders.

The details of composition, terms of reference, etc., pertaining to these committees are mentioned in the Corporate Governance Report.

DIRECTORS

The Board of Directors of your Company at their meeting held on March 31,2022, had appointed Mr. Ashwani Maheshwari (DIN: 07341295), as an Additional Director (Category - Non - Executive Director) with effect from April 01, 2022. Mr. Maheshwari was appointed as an Independent Director of your Company, not liable to retire by rotation, for a term of 5 (Five) consecutive years commencing from April 01,2022, till March 31, 2027, by the way of a Special Resolution passed by the Shareholders through a postal ballot dated June 26, 2022.

Mrs. Madhu Dubhashi (DIN: 00036846), who was appointed as an Independent Director of your Company for a term of 2 (two) years upto April 30, 2023, has been re-appointed for a second term as an Independent Director of the Company, not liable to retire by rotation, to hold office for a second term of 5 (five) consecutive years commencing from May 1, 2023 till April 30, 2028, by the Shareholders of your Company at the Annual General Meeting held on September 22, 2022, based on the recommendation of the Board of Directors at their meeting held on August 06, 2022.

Mr. Mehul Mohanka (DIN: 00052134), who was appointed as the Managing Director of your Company for a term of 5 (five) years upto April 11, 2023, has been re-appointed as the Managing Director of the Company & Group CEO for a further period of five years with effect from April 12, 2023 to April 11, 2028, by the Shareholders of your Company at the Annual General Meeting held on September 22, 2022, based on the recommendation of the Board of Directors at their meeting held on August 06, 2022.

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the relevant Rules and your Companys Articles of Association, Mr. Syed Yaver Imam (DIN: 00588381) retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.

The brief resume/details relating to Director(s) 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 a 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 proficiency) 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 with respect to Familiarisation programmes for Independent Directors are available on the link: https://www. tegaindustries.com/investors/policies/policy_on_familiarization_ programme_for_independent_directors.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 (11C A) and their names presently stands included in the Databank of IICA. The Independent Directors have successfully qualified the Online Proficiency Self Assessment Test, as may be applicable.

KEY MANAGERIAL PERSONNEL

During the year under review, Ms. Manjuree Rai was appointed as the Global Head - Legal & Compliance, Company Secretary and Compliance Officer of your Company with effect from August 07, 2022 in place of Mr. Manoj Kumar Agarwal, Director- Global Finance & Chief Financial Officer of your Company, who was earlier appointed as the Interim Company Secretary and Compliance Officer of your Company.

Mr. Manoj Kumar Agarwal, Director - Global Finance & Chief Financial Officer of your Company ceased to be associated with your Company with effect from close of business hours on January 31, 2023 to pursue other opportunities outside the Tega Group, in the interim, till the appointment of the Chief Financial Officer, Mr. Kaushal Sureka, Deputy General Manager - Finance & Accounts, was made in charge of the Finance Function.

In terms of the provisions of Section 2(51) and Section 203 of the Act, the following are the Key Managerial Personnel of the Company as on March 31,2023 -

1) Mr. Madan Mohan Mohanka (DIN: 00049388), Chairman & Wholetime Director;

2) Mr. Mehul Mohanka (DIN: 00052134), Managing Director and Group CEO;

3) Mr. Syed Yaver Imam (DIN: 00588381), Wholetime Director; and

4) Ms. Manjuree Rai, Global Head - Legal & Compliance, Company Secretary & Compliance Officer.

BOARD EVALUATION

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. Further, the Independent Directors at their meeting reviewed the performance and role of non-independent directors and the Board as a whole and Chairperson of your Company. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report attached to this Report.

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 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. The amended Policy may be accessed on the link - https://www.tegaindustries.com/investors/policies/ nomination_and_remuneration_policy.pdf

ANNUAL RETURN

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

VIGIL MECHANISM AND WHISTLE BLOWER POLICY

The Company has devised an effective whistleblower mechanism enabling stakeholders, including individual employees and their representative bodies, to communicate their concerns about illegal or unethical practices freely. The Company has also established a vigil mechanism for stakeholders to report concerns about any unethical behavior, actual or suspected fraud or violation of the Companys code of conduct.

Your Company has formulated a codified 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://www.tegaindustries.com/ investors/policies/whistle_blower_policy.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, your Company received 1 (One) complaint of sexual harassment which was disposed off following the due

process as per the laid down policy. The said policy is available on the website of your Company at https://www.tegaindustries. com/images/articles/pdf/POSH_Policy.pdf.To build awareness in this area, the Company has been conducting awareness sessions during induction of new employees and also periodically for permanent employees, third-party employees and contract workmen through online and in person sessions.

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.

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 31,2023 and the date of this Report.

CORPORATE GOVERNANCE

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 - IV.

STATUTORY AUDITORS AND THEIR AUDIT 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, 2022, 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, 2023 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.

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. Accordingly, the Board of Directors of your Company has on the recommendation of the Audit Committee on May 30, 2023, approved the appointment of M/s Mani & Co. as the Cost Auditors of your Company for the financial year ended March 31, 2024. As required under the Act, a resolution seeking ratification of the remuneration payable to the Cost Auditors forms part of the Notice convening the ensuing Annual General Meeting for FY 2022-23.

SECRETARIAL AUDITORS

As per Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company is required to have the audit of its secretarial records conducted by a Company Secretary in Practice.

Accordingly, your Company appointed Mrs. Sweety Kapoor, Practising Company Secretary (Membership No. FCS 6410, Certificate of Practice No. 5738) holding a Peer Review Certificate No. 660/2020 as the Secretarial Auditor of your Company for Financial Year 2022-23 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, 2023 does not contain any qualification, reservation or adverse remark or disclaimer and the same forms part of the Annual Report as Annexure V.

COMPLIANCE OF SECRETARIAL STANDARDS

The Directors have devised proper systems and processes for complying with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India and such systems were adequate and operating effectively.

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, 2023 and state that:

(i) in the preparation of the annual accounts for the financial year ended March 31, 2023, 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, 2023 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.

GENERAL DISCLOSURES

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.

• 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.

ACKNOWLEDGEMENTS

The Directors appreciate the hard work, dedication, and commitment of all its employees including workmen at the plants towards the success of the Company. The Directors also acknowledge the support extended by the Companys Shareholders and would also like to thank the financial institutions, banks, government authorities, customers, vendors and other stakeholders for their continued support and co-operation.

On behalf of the Board of Directors

Sd/-

Madan Mohan Mohanka

Place: Kolkata

Chairman

Date: May 30, 2023

DIN: 00049388