tvs srichakra ltd share price Directors report

Dear Members,

Your directors are pleased to present the Annual Report and the audited Financial Statement together with the consolidated Financial Statement of your Company for the financial year ended 31st March 2023.

Financial Results and State of Affairs

Rs. in Crores

Particulars	Standalone		Consolidated
	Year ended 31st March 2023	Year ended 31st March 2022	Year ended 31st March 2023	Year ended 31st March 2022
Sales & Other Income	2873.26	2467.98	2994.14	2549.36
Profit before finance cost and depreciation	223.62	167.53	238.10	173.30
Less: Finance Cost	38.40	30.75	39.63	31.60
Depreciation	88.44	77.07	91.54	79.81
Profit after finance cost and depreciation	96.78	59.71	106.93	61.89
Less: Exception items	5.49	2.77	5.49	2.77
Profit before taxation	91.29	56.94	101.44	59.12
Less: Provision for
Income tax	18.17	14.79	20.58	15.66
Income tax (previous years)	(3.09)	-	(3.09)	-
Deferred tax	6.09	0.58	6.13	0.14
Profit after tax	70.12	41.57	77.82	43.32
Profit/(Loss) attributable to the Non-Controlling Interest	-	-	(0.17)	(0.14)
Profit/ (Loss) attributable to the owners	-	-	77.99	43.47
Surplus brought forward from Previous Year	778.84	763.48	762.27	745.04
Re-measurement of post-employment benefit obligation (net of tax)	1.35	(3.24)	1.31	(3.27)
Dividend paid	(12.48)	(22.97)	(12.48)	(22.97)
Dividend Tax paid	-	-	-	-
Impact of IND AS 116
- Lease Rentals
Balance carried to Balance Sheet	837.83	778.84	829.09	762.27

During the year under report, your standalone Companys revenue from operations increased to Rs 2865.39 Crores in the year 2022-23 in comparison to Rs 2462.06 Crores in the previous year, an increase of 16.38% over the previous year. Your Company has increased its profit before tax to Rs 91.29 crores from Rs 56.94 crores, an increase of 60.33% year on year. EPS has increased to Rs. 91.57 in March 2023 from Rs. 54.29 in March 2022 a 68.67% increase year on year.

Operational Performance

The year gone by saw challenges in the form of continuous inflation, especially in the form of raw material costs as well as energy costs. Your Company put in place internal as well as market facing measures to mitigate against these adverse factors, with a degree of success as the year went by.

Your Company remained a leader in the domestic two and three wheeler Original Equipment (OE) segment, gained share in the domestic replacement market and has made strides in penetrating the emerging Electric Vehicle (EV). The Company is set to emerge as a leading supplier in this segment too.

Exports grew strongly, even in the face of global challenges, driven by the expanding product range as well as expansion of the geographical areas serviced by your Company - both in the two/three wheeler category as well as the off highway tyre category.

Your Company continued to expand its product portfolio to meet market requirements. During the year under report, your Company introduced a slew of new products, for the domestic as well as global markets. Your Companys commitment to expand its product portfolio, launch new products, and invest in software tools for NPD demonstrates the Companys dedication to innovation, market responsiveness and delivering solutions that meet the diverse needs of customers.

Capital Expenditure and Expansion Project

During the year under review, the capital expenditure was Rs.206.92 Crores. The production capacity was augmented during the year in the off-highway segment, in line with the expansion program announced in December 2021.

Your Company has a robust working capital management process that facilitates continuous monitoring and control over receivables, payables and other parameters.

Cash and cash equivalent as of 31st March 2023 was Rs. 7.54 Crores.

Dividend

Pursuant to Regulation 43A of SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015, as amended, your Company has formulated a Dividend Distribution Policy. The Policy has been uploaded on the website of your Company and can be accessed at the investors section of Companys website at https://tvseurogrip.com/wp-content/uploads/investor-relations/POLICY/DIVIDEND-DISTRIBUTION-POLICY.pdf.

Considering the improved performance of your Company, the board of directors are pleased to recommend final dividend of Rs. 32.05/- (@320.50%) per Equity Share of a face value of Rs. 10/- per Equity Share. The dividend recommendation is according to Dividend Distribution Policy of your Company.

The dividend will result in a total pay-out of Rs. 24.54 crores, upon approval by the members at the Annual General Meeting.

Consolidated Performance

On a consolidated basis, your Company registered a turnover of Rs 2,984.97 crores, an increase of 17.38%. Companys consolidated net profit stood at Rs. 77.82 crores as against the previous years net profit of Rs. 43.32 crores, an increase of 79.66%.

Highlights of performance of subsidiary companies

TVS Srichakra Investments Limited (TSIL), wholly owned subsidiary Company, recorded a profit of Rs 1.03 crores (previous year net loss of Rs 0.28 crores).

TVS Sensing Solutions Private Limited (TSSPL), wholly owned subsidiary of TSIL, recorded a net operational turnover of Rs.118.99 crores during the year under review, showing an increase of 47.6% compared to the previous year. TSSPL recorded a Profit after tax of Rs.9.51 crores showing an increase of 174% compared to the previous year.

Fiber Optic Sensing Solutions Private Limited (FOSSPL), subsidiary of TSSPL, recorded a net operational turnover of Rs 1.64 crore showing an increase of 86.4% compared to the previous year. FOSSPL made loss after tax of Rs.1.71 Crores compared to a loss of Rs.1.47 Crores in the previous year.

Subsidiary/associate companies

The audited accounts of the following subsidiary companies have been consolidated with the Company as on 31st March, 2023.

The consolidated financial statements of your Company for the year ended 31st March 2023 are prepared in compliance with the applicable provisions of the Companies Act, 2013 ("Act"), Indian Accounting Standards and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI (LODR) Regulations"). The audited consolidated financial statements along with all relevant documents and the Auditors Report thereon form part of Annual Report and may be accessed on the Companys website https://tvseurogrip.com/.

Pursuant to Section 129(3) of the Act, a statement containing salient features of the financial statement of the subsidiaries in the prescribed Form AOC-1 is attached as Annexure 1. The Financial Statements of the subsidiary companies are available for inspection by the members at the Registered Office of the Company pursuant to the provisions of Section 136 of the Act. The Company shall provide free of cost, a copy of the financial statement of its subsidiary companies to the members upon request. The financial statements of the subsidiary companies are also available on the website of the Company at https://tvseurogrip.com/.

Awards and Recognition

Your Company was honored to receive the prestigious E4M Pride of India Brands Award in 2022-23. This distinguished award recognizes companies that have demonstrated excellence across various domains, including marketing, branding, innovation and business growth. Please refer to Management and Discussion Analysis Report for more details on achievements during the year.

Transfer to Reserves

Your Company does not propose to transfer any amount to general reserve for financial year 2022-23.

Deposits

Your Company has neither accepted nor renewed any deposits in terms of Chapter V of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 during the financial year 2022-23.

Related Party Transactions

The Policy on Related Party Transactions has been uploaded on the website of the Company at https://y9u4s6b5.rocketcdn.me/wp-content/uploads/investor-relations/POLICY/Related-Party-Tran sactions-Policy-with-effect-from-April-1-2022.pdf

During the financial year ended March 31, 2023, all transactions with the Related Parties as defined under the Companies Act, 2013 read with Rules framed thereunder were in the ‘ordinary course of business and ‘at arms length basis. All Related Party Transactions entered during the year, were contracted with the prior approval of Audit Committee and the board of directors, as required under the SEBI (LODR) Regulations. Monitoring of related party transactions was carried on a quarterly basis by Audit Committee and the board. During the year, there was no materially significant Related Party Transaction having potential conflict with the interest of the Company. There are no transactions with related parties to be reported as per Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 and report on the same is given in Annexure 2 in Form AOC - 2 and forms part of this Report. Further, your Company does not have a ‘Material Subsidiary as defined under SEBI (LODR) Regulations.

Particulars of Loans, Guarantees or Investments

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the Notes to the financial statements provided in the Annual Report.

Risk Management

Board has constituted a Risk Management Committee pursuant to Regulation 21 of SEBI (LODR) Regulations.

This committee has been set up to effectively address the evolving and dynamic risks prevalent in the current business environment. The dimensions of risk include areas such as cyber security, information security, business continuity, data privacy and the execution of large deals. Risk Management Committee has formulated a risk management policy covering a framework for internal and external risks faced by your Company.

This policy provides a structured approach to address the aforementioned risks and ensures that appropriate measures are in place to mitigate their impact. By establishing the Risk Management Committee and implementing a well-defined risk management policy, your Company demonstrates its commitment to proactive risk management and ensuring the resilience of its operations in the face of evolving threats. These measures help to safeguard the Companys interests and enhance its ability to navigate the complex and dynamic business landscape effectively. Members may refer to the Management Discussion and Analysis Report for more details.

In the opinion of the board, no element of risk is identified which threatens the existence of the Company.

Material changes and commitments affecting the financial position during the financial year and the date of the report.

No material changes and commitments have occurred between the end of the financial year and the date of this Report which affect the financial position of the Company in respect of the reporting year.

Change in nature of business

There has been no change in the nature of business of the Company during the year under review.

Share Capital

There is no change in the Share Capital of your Company and the paid-up Equity Share Capital is Rs.7,65,70,500/- comprising of 76,57,050 Equity Shares of Rs.10/- each fully paid up.

Issue of Equity Shares with differential rights

Company has not issued Equity Shares with differential rights.

Human Resources Management

Your Company promotes a collaborative, transparent and participative organization culture, duly rewarding merit and sustained high performance. The industrial relations in all manufacturing units have been cordial.

Particulars of Employees and Related Disclosures

In terms of the first proviso to Section 136 of the Act, these reports and accounts are being sent to the shareholders excluding the information required under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Any shareholder interested in obtaining the same may write to the Company Secretary. The said information is available for inspection by the members at the Registered Office of the Company on any working day of the Company upto the date of 40th Annual General Meeting.

The statement containing information as required under the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure 3 and forms part of this Report.

Prevention of sexual harassment at workplace

TVS Srichakra is known for providing a safe and secure environment to its women employees across its functions and other women stakeholders, as women are considered an integral and important part of the organization. In terms of provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder, your Company has duly adopted a policy and has also constituted an Internal Complaints Committee (ICC) to consider and resolve sexual harassment complaints reported by women.

The ICC has worked extensively on creating awareness through campaigns across all its manufacturing units, warehouses and office premises to encourage its employees to be more responsible and alert while discharging their duties.

During the year, there was no complaint of sexual harassment received by the ICC.

Issue of Sweat Equity shares and Employee stock options

Company has not issued shares to the employees of the Company under any scheme.

Corporate Governance

Our corporate governance practices are reflective of the culture of the organization grown over the years to deliver optimum shareholder value legally and ethically. Your Company adheres to Corporate Governance requirements as set out by the Securities and Exchange Board of India (SEBI), in letter and spirit.

Our Corporate Governance report for fiscal 2023 forms part of this Report.

Board diversity

Your Company embraces the importance of a diverse board in its success. The details on board diversity are available in the Corporate Governance Report that forms part of this Report.

Meetings of the board of directors

An annual calendar of board and committees meetings for the fiscal 2023 was circulated in advance to the directors. The board of directors met 10 (ten) times during the year ended 31st March, 2023. The details of the board meetings and the attendance of the directors are provided in the Corporate Governance Report, which forms part of this Report.

Remuneration Policy

The details of board and committee composition, tenure of directors, areas of expertise and other details are available in the Corporate Governance Report that forms part of this Report.

On the recommendation of the Nomination and Remuneration Committee (NRC), the board has adopted and framed a policy on Directors appointment and remuneration, including remuneration for Senior Management, covering Key Managerial Personnel and other employees, in line with the provisions of Act and SEBI (LODR) Regulations which is available on Companys website at: https://tvseurogrip.com/wp-content/uploads/investor-relations/POLICY/Remuneration-Policy.pdf.

Board hereby affirms that the remuneration paid to Executive/ Independent Directors is in line with the above policy and Non-Executive Directors are compensated by way of profit-sharing commission and sitting fees for attending the board/committee meetings.

Declaration by Independent Directors

The Independent Directors have given declarations that they meet the criteria specified under Section 149(6) of the Companies Act, 2013 and Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and relevant provisions of rule 6 of the Companies (Appointments and Qualifications of Directors) Rules, 2014. The board is of the opinion that the Independent Directors of your Company possess requisite qualifications, experience and expertise and they hold highest standards of integrity.

Board Evaluation

As per the provisions of the Act and SEBI (LODR) Regulations, the evaluation process on the performance of the board, its committees and individual directors was carried out internally. The evaluation process, inter alia, comprised parameters like attendance of directors at board, committee meetings and Annual General Meeting, effective participation, domain knowledge etc. The performance evaluation of the Chairman and Non-Independent Directors was carried out by Independent Directors. The evaluation parameters and the process have been explained in the Corporate Governance Report.

Familiarization Programme for Independent Directors

Company regularly carries out familiarisation programme for Independent Directors through periodic presentations on business strategy and updates on the performance of the Company. This apart, programmes were organized to familiarize Independent Directors with the Company, their responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters.

The details of the familiarization programme are provided in the Corporate Governance Report.

Directors and Key Managerial Personnel (KMP)

Director liable to retire by rotation

Mr. R Naresh, (DIN: 00273609), Executive Vice Chairman, is liable to retire by rotation at the ensuing AGM, and being eligible, seeks reappointment. Based on performance evaluation and the recommendation of Nomination and Remuneration Committee, board has recommended his reappointment. The notice convening 40th Annual General Meeting sets out the details.

Reappointment

During the year, Mr. R. Naresh (DIN:00273609) was reappointed as Managing Director (designated as Executive Vice Chairman) of the Company for a period of three (3) years effective from 16th June 2023. Ms. S. V. Mathangi (DIN:02596421) was reappointed as Independent Director for second term of five (5) years effective from 1st April 2023.

The term of Mr. V. Ramakrishnan (DIN: 00002931) as Independent Director will expire on 26th September 2023. Board of directors, based upon the recommendation of the Nomination and Remuneration Committee, has, subject to the approval of the members of the Company at 40th Annual General Meeting, reappointed Mr. V. Ramakrishnan as Independent Director of the Company for second term effective from 27th September 2023. The proposal together with other details are set out in the notice of 40th Annual General Meeting seeking approval of the members.

Key Managerial Personnel

Mr. V. R. Venkatakrishnan, Company Secretary resigned on 25th July 2022. Consequently Mr. Chinmoy Patnaik was appointed as Company Secretary with effect from 20th October 2022.

Committees of Board

Audit Committee

Audit Committee comprises of 4 (four) members viz. Mr H. Janardana Iyer, Chairman, Mr M. S. Viraraghavan, Mr Rasesh R Doshi and Mr S. Ravichandran, members. The Chairman of the committee is an Independent Director. The committee met 9 (nine) times during the year. The Company has constituted certain committees of directors as per the mandatory requirements of SEBI (LODR) Regulations, details of which are disclosed in the Corporate Governance Report. During the year, all recommendations made by committee were approved by the board.

Vigil Mechanism / Whistle Blower Policy

Over the years, your Company has established a reputation of doing business with integrity and displays zero tolerance towards any form of unethical behaviour. "Whistle Blower Policy" (WBP) is the vigilance mechanism instituted by the Company to report concerns about unethical behaviour in compliance with the requirements of the Act and SEBI (LODR) Regulations and provides adequate safeguard against victimization of persons who use such mechanism.

The whistle-blower policy is put on the Companys website and can be accessed at: https://tvseurogrip.com/wp-content/uploads/investor-relations/POLICY/WHISTLE-BLOWER-POLICY.pdf No instances were reported under this mechanism and more detail about this policy are available in the Corporate Governance Report.

Managerial Remuneration

Neither Managing Director nor the Managing Director designated as Executive Vice Chairman of the Company receive any remuneration or commission from any of its subsidiary companies.

Internal Financial Controls and its adequacy

Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures. These controls include well documented procedures, covering financial and operational functions. These controls are assessed on a regular basis by Internal Audit for its adequacy.

Significant and Material Orders

No significant or material orders were passed by the regulators or courts or tribunals impacting the going concern status and Companys operation in future.

Disclosure under Insolvency and Bankruptcy Code

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

Disclosure under one-time settlement

There was no instance of onetime settlement with any Bank or Financial Institution

Reporting of Frauds by Auditors

During the year under review, Statutory Auditors, Internal Auditor, Cost Auditor and Secretarial Auditor have not reported to the Audit Committee any instances of fraud committed against the Company by its officers or employees.

Annual Return

The extract of annual return as required under the provisions of Section 92(3) of the Companies Act, 2013 and rule 12 of the Companies (Management and Administration) Rules, 2014 is available on your Companys website at www.tvseurogrip.com.

Secretarial Standards

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

Listing on Stock Exchanges

Companys shares are listed on BSE Limited and the National Stock Exchange of India Limited. The Company has paid listing fees for the financial year 2022-23 to the stock exchanges, where its Equity Shares are listed.

Investor Education and Protection Fund (IEPF)

During the year, your Company has transferred unclaimed and un-encashed dividends of Rs.55,24,847/- for the FY 2014-15, Rs. 48,66,480/- for the FY 2015-16 Interim Dividend I and Rs.46,11,210/- Interim Dividend II. Further 5,504 shares for the FY 2014-15, 5,390 shares for the FY 2015-16 Interim Dividend I and 4,614 shares for Interim Dividend II, on which dividends remained unclaimed for seven consecutive years, were transferred as per the requirements of the IEPF Rules. The details of such shares are uploaded on IEPF website and are also available on Companys website at www.tvseurogrip.com

Directors Responsibility Statement

In terms of Section 134(5) of the Act, your directors, to the best of their knowledge and belief, state that:

a) in the preparation of the annual accounts the applicable accounting standards had been followed along with proper explanation relating to material departures, if any.

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

c) they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) they had prepared the annual accounts on a going concern basis;

e) they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively, and

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

Auditors Reports and Auditors

? The Statutory Auditors Report for fiscal 2023 does not contain any qualification, reservation or adverse remark. The Report is enclosed with the financial statements contained in this Annual Report.

? The Secretarial Auditors Report for fiscal 2023 does not contain any qualification, reservation or adverse remark. The Secretarial Auditors Report is enclosed as Annexure 4 to the Boards report.

? The Statutory Auditors Certificate confirming compliance with conditions of corporate governance as stipulated under SEBI (LODR) Regulations, for fiscal 2023 is attached to the Corporate Governance Report.

Auditors

Statutory Auditors

M/s. PKF Sridhar & Santhanam LLP, Chartered Accountants, (Firm Registration No. 003990S / S200018) were reappointed as Statutory Auditors of the Company at 39th AGM held on 21st September, 2022, to hold office for second term of five (5) consecutive years from the conclusion of 39th AGM till the conclusion of 44th AGM of the Company at a remuneration as may be agreed between the board of directors and the Statutory Auditors.

Company has obtained necessary certificate under Section 141 of the Companies Act, 2013 conveying their eligibility for being the Statutory Auditors of the Company and have confirmed that they satisfy the independence and other criteria required under the Companies Act, 2013. Statutory Auditors have also confirmed that they are not disqualified from continuing as auditors of your Company.

Cost Auditor

In terms of Section 148 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, cost records are made and maintained by the Company as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013.

Dr. I. Ashok, Practising Cost Accountant, is appointed as Cost Auditor of the Company for the financial year 2023-24 by the board, based on the recommendation of Audit Committee, as required under Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014. A resolution seeking members ratification for the remuneration payable to the Cost Auditor forms part of the Notice of 40th AGM and the same is recommended for your approval.

A certificate from Dr. I. Ashok, Cost Accountant, has been received to the effect that his appointment as Cost Auditor of the Company will be within the limits specified under Section 141 of the Act and rules thereunder.

Secretarial Auditor

Mr. N. Balachandran, Practising Company Secretary, is appointed as Secretarial Auditor of the Company for the financial year 2023-24, as required under Section 204 of the Act and Rules and Regulation 24 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR) initiatives of the Company are aimed at inclusive development of the community at large, through a range of social interventions, enhancing skills and building social infrastructure to improve the livelihood of the beneficiaries.

CSR committee constituted in accordance with Section 135 of the Act has developed and implemented the Corporate Social Responsibility policy. The CSR Committee comprises of Ms. Shobhana Ramachandhran, Chairperson, Mr. V. Ramakrishnan and Mr. Rasesh R Doshi, Members.

The Companys CSR policy is available on Companys website, at https://tvseurogrip.com/wp-content/uploads/investor-relations/POLICY/CSR-POLICY.pdf. The Annual Report on Companys CSR Activities is appended as an Annexure 5 to the Boards Report. Your Company undertakes CSR initiatives in compliance with Schedule VII to the Act. The highlights of the initiatives undertaken by the Company form part of this Report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars as prescribed under Section 134 of the Act, read with the Companies (Accounts) Rules, 2014, are enclosed as Annexure 6 to the Boards report.

Business Responsibility and Sustainability Report

In terms of Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Business Responsibility and Sustainability Report of the Company for the financial year ended 31st March 2023 is given in separate section of the Annual Report which forms part of the Annual Report.

Management Discussion and Analysis Report

Management Discussion and Analysis of financial conditions and results of operations of the

Company is provided in the Management Discussion and Analysis Report which forms part of the Annual Report.

Acknowledgement

We thank our clients, vendors, investors, bankers, employees for their continued support during the year. We place on record our deep appreciation for the contribution made by our employees at all levels during the year. We owe our success to their dedicated hard work, perseverance and commitment to the organization.

We thank governments of the states where the Company has its business operations. We thank Government of India and its ministries, Central Board of Direct Taxes, Central Board of Indirect Taxes and Customs, GST Authorities, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges, Depositories and other government agencies for their support and we look forward to their continued support in the future.

	For and on behalf of the Board
R Naresh	Shobhana Ramachandhran
Executive Vice Chairman	Managing Director
DIN: 00273609	DIN: 00273837
Madurai
22nd June, 2023