Dear Shareholders,
The Directors take pleasure in presenting the 16th Annual
Report together with the audited financial statements of the
Company for the financial year ended 31st March 2024.
1. Business Environment
While reflecting on the financial year 2023-24, it was a turbulent year with concerns
about possibility of some of the economies slipping into recession, adverse geopolitical
developments between many countries, food inflation continuing above the tolerance band in
spite of moderation in the overall picture, higher interest rates and muted growth in
economic activities across countries. In spite of a gloomy global economic landscape, the
remarkable resilience displayed by many global economies helped the world in navigating
the recession blues and showing signs of economic recovery with growth holding steady. The
world is watching the significant advancement and expansion in the artificial
intelligence, with a sense of cautiousness, on its future impact on the global labour
market.
The Indian story was the silver lining during FY 2023-24 with 8.2% growth. India
remains as the fastest growing large economy and is projected to grow by 6.8% in FY
2024-25 with the public investment being the key driver. Strong domestic demand for
consumption, higher levels of manufacturing & service activities and continuing
capital investments are the key drivers for the growth. Reserve Bank of India decided to
retain the key policy repo rate throughout the year indicating their focus on taming
inflation within the tolerance band while supporting growth. Considering the brighter
outlook and strengthening of informal sector activity, the rural demand is slowly catching
up.
In order to sustain the growth momentum, a continuous focus on employment growth to
leverage the demographic dividend is required. It will also be mainly driven by
consumption and private investments backed by supportive Government policies to improve
the infrastructure and business ecosystem. On the risks front, one of the multiple risks
is on account of the visible climate change with increase in temperature caused by El Nino
which may affect the harvest levels & crop production. An impact on the agricultural
produce will have a domino effect on the inflation, monetary policy and investment
activities.
The Government's emphasis on building infrastructure will have a multiplier effect on
the economy, strengthening of deep-tech technologies will help in the growth of sunrise
domains and bilateral treaties will help in promoting investments. The production linked
incentive schemes aim to make Indian manufacturers globally competitive.
During FY 2023-24, the automotive industry displayed robust performance across all
segments. It is expected that there will be a slight moderation in the next fiscal year as
the pent-up demand was met during the current year. The Government's backing in
strengthening the electric-vehicle ecosystem by supporting manufacturing and charging
infrastructure will help the EV industry over the long term. The upgradation of railway
coaches to Vande Bharat standard will help the private sector railway manufacturers
through new refurbishment contracts.
The current logistics crisis which disrupted the supply chain and distorted many
economies is yet to improve. With no end in sight, it may substantially affect the global
trade in 2024. It is expected that increasing geopolitical tensions may have a ripple
effect on the global supply chain, inflation, investment & economic growth. Reduction
of protectionist policies by the Governments will only help in growth of global trade and
reduce the risk to global economic resilience. The risks associated with climate change
may cast a long shadow on the global economy. Though these factors may slowdown the growth
of Indian economy, it is expected that healthy macroeconomic fundamentals and strong
domestic demand will help the Indian economy to continue its growth momentum.
2. Financial Summary
The Company's financial performance (standalone and consolidated) for the year ended 31st
March 2024 is summarised below:
(in Cr.)
Particulars |
Standalone |
Consolidated |
2023-24 |
2022-23 |
2023-24 |
2022-23 |
Sale of Products |
7,144.42 |
6,791.61 |
16,334.92 |
14,430.95 |
Profit Before Exceptional Items and Tax |
970.11 |
928.29 |
168338 |
1,592.44* |
Exceptional
items |
- |
(52.72) |
0.08 |
8.06 |
Profit Before Tax |
970.11 |
875.57 |
168348 |
1,600.50* |
Tax Expense |
235.60 |
210.37 |
495.95 |
422.58 |
Profit After Tax |
734.51 |
665.20 |
1,187.51* |
1,177.92* |
*excludes profit from discontinued operations (net of taxes) & share of
profit/(loss) from Associates and Joint Ventures (net of taxes).
The Board of Directors has decided to retain the entire amount of profit for the
financial year 2023-24 in the Statement of Profit and Loss.
3. Performance Overview
During FY 2023-24, the Company has achieved a turnover of f7,144 Cr., registering a
growth of 5% over the previous year. The Profit before Depreciation, Interest, Exceptional
Items and Tax was at Rs1,140 Cr. as against Rs1,095 Cr. in the previous year. The Profit
before Tax was at Rs970 Cr. as against Rs928 Cr. in the previous year.
The Engineering segment registered a revenue of Rs4,921 Cr. as compared to Rs4,562 Cr.
during the previous year, a growth of 8%. The operating Profit before Interest and Tax
stood at Rs617 Cr. as compared to Rs549 Cr. during previous year, a growth of 12%.
The Metal Formed Products segment recorded a revenue of Rs1,519 Cr. as compared to
Rs1,424 Cr. during the previous year, a growth of 7%. The operating Profit before Interest
and Tax stood at Rs187 Cr. as compared to Rs174 Cr. during previous year, a growth of 8%.
The Mobility segment recorded a revenue of Rs664 Cr. as compared to Rs800 Cr. during
previous year, a de-growth of 17%, due to adverse market conditions. The operating
Profit/(Loss) before Interest and Tax stood at Rs (18) Cr. as compared to Rs17 Cr. during
the previous year.
Other businesses segment including industrial chains registered a revenue of Rs834 Cr.
as compared to Rs768 Cr. during the previous year, a growth of 9%. The operating profit
before interest and tax stood at Rs65 Cr. as compared to Rs48 Cr. during previous year, a
growth of 36%.
4. Other business initiatives
4.1. TI Clean Mobility Private Limited
The Company, through its subsidiary M/s. TI Clean Mobility Private Limited
("TICMPL'), is focussing on the clean mobility solutions. TICMPL is pursuing electric
three-wheelers and electric tractors businesses. During the year, TICMPL launched the
passenger three-wheeler in the Southern states covering Kerala, Karnataka, Andhra Pradesh,
Telengana and Tamilnadu. TICMPL is a leading player in the Southern markets. TICMPL is
also developing cargo and e-auto rickshaw variants, which are expected to be launched
during FY 2024-25.
During the year, TICMPL acquired 50% of M/s. Jayem Automotives Private Limited, part of
Engineering Research & Development (ER&D) services industry with specific focus on
Automobile ER&D services for Rs206 Cr.
5^ TUBE INVESTMENTS OF INDIA LIMITED : ANNUAL REPORT 2023-24
TICMPL forayed into manufacture of electric small commercial vehicles through TIVOLT
Electric Vehicles Private Limited ("TIVOLT), a subsidiary. During the year,
TICMPL invested Rs120 Cr. representing 80% of the share capital of TIVOLT. A new
manufacturing facility is coming up at Gummidipundi, near Chennai for manufacture of the
electric small commercial vehicle in the range of 2T to 3.5T. The vehicle is expected to
be launched during FY 2024-25. The range and utility are expected to be propositions of
the vehicle.
During the year, Cellestial E-Mobility Private Limited and Cellestial E-Trac Private
Limited merged with TICMPL with effect from 1st April 2023.
Pursuant to the definitive agreements entered by TICMPL with TII, M/s. Multiples
Private Equity Fund III, M/s. Multiples Private Equity Fund IV, M/s. Multiples Private
Equity Gift Fund IV and their co-investors (together "Investors), TII completed
investment of Rs250 Cr. towards Equity Shares and Rs500 Cr. towards Series B Compulsorily
Convertible Preference Shares ("CCPS) and the Investors completed subscription
to Equity Shares and Series A1 CCPS for about Rs1200 Cr. On 6th May 2024,
TICMPL entered into definitive agreements with TII, M/s. South Asia Growth Invest III LLC
and M/s. South Asia EBT Trust III (together "New Investors) for raising about
Rs580 Cr. through issue of Equity Shares and CCPS to the New Investors.
4.2. 3xper Innoventure Limited
Pursuant to the agreement entered by TII with Mr. N Govindarajan, 3xper Innoventure
Limited ("3xper), a subsidiary for pursuing the contract development and
manufacturing operation and active pharmaceutical ingredients business, was incorporated
on 12th May 2023. During the year, TII invested about Rs86 Cr. and Mr. N
Govindarajan invested about Rs15 Cr. in 3xper.
3xper has established a R&D facility at Chennai and manufacturing facility is
coming up at Naidupet, Andhra Pradesh.
5. Business Review - Standalone
5.1. Engineering Tl's Presence
The Engineering segment of the Company consists of cold rolled steel strips and
precision steel tubes viz., Cold Drawn Welded tubes (CDW) and Electric Resistance Welded
tubes (ERW). These products primarily cater to the needs of the automotive, boiler,
bicycle, general engineering and process industries. The Company is further engaged in the
manufacture of large diameter welded tubes mainly for non-auto applications which are
largely imported.
Industry Scenario
During 2023-24, the automotive industry's production volume grew by 9.6%. Passenger
vehicle and commercial vehicle grew by 6.9% and 3.5% respectively and two-wheeler segment
grew by 10.3% over the last fiscal year.
Review of Performance
The Engineering segment was able to grow its volumes leveraging the growth of
passenger, commercial vehicles and two wheeler segment. The business also focussed and
realized the increased opportunities in the export market. The volumes of tubes in the
domestic market grew by 12%, export market by 25% and cold rolled steel strips business
grew by 16%.
The business continued to drive efficiency improvement and prudent spending on capital
expenditure on critical growth projects. The business is in the process of increasing
capacities for large diameter tubes, and setting up green field plant for tubes and cold
rolled steel strips in the Western India to meet the increased market demand.
The business started Lean implementation for eliminating/reducing wastes in the value
chain by focussing on productivity & quality improvement, inventory reduction &
creating a flow in production system using Lean tools & techniques.
Career path initiatives were taken up to provide opportunities to employees within the
organization for new openings and to enable cross function exposure and growth.
The business continued to participate in the reviews of US Department of Commerce on
complaint of alleged dumping of cold-drawn steel mechanical tubes from India and some
other countries, the Countervailing Duty (CVD) and Anti-dumping Duty (AD) on the Company's
exports to the US market, to reduce duty rates to enhance export volumes.
5.2. Metal Formed Products
TI's presence
Automotive chains, fine blanked products, roll-formed car door frames and shell
sub-assemblies for passenger coaches constitute the Metal Formed Products segment.
Industry scenario
During 2023-24, production of two-wheeler segment grew by 10.3% and passenger vehicles
grew by 6.9%.
During 2023-24, total domestic sales rose from 21.2 million units to 23.8 million
units, passenger vehicle
sales rose 8.4%, three wheelers 41.5%, two wheelers 13.3%, commercial vehicles
marginally by 0.6%.
Passenger vehicles segment led the growth with overall sales touching almost 5 million
units including 4.2 million domestic (growth of 8.4%) and 0.7 million exports.
Two wheeler segment continued the recovery path with a handsome growth of 13.3% in
domestic sales to almost 18 million units, even though still lower than the earlier peak
of 21 million units in 2018-19.
Moving on to exports of vehicles, overall exports remained under stress during the last
financial year with sizeable drop in commercial vehicles, two wheelers and three wheelers
though passenger vehicles grew marginally. However, good recovery was seen in the last
quarter, especially for two-wheelers, indicating better potential for the current year.
Review of Performance
Backed by the demand in the four-wheeler segment, the businesses dependent on this
segment did extremely well. Despite the two-wheeler industry volume not reaching the
pre-pandemic level, business maintained its market share in key segments. The Company
continued to focus in the aftermarket segment benefiting from the two-wheeler population
growth. The replacement market continues to provide opportunities for growth
notwithstanding competition and the business expects to strengthen on the sales structure,
deepen its coverage and launch new products for new categories.
Door frame & Fine Blanking sales were higher by 8% during 2023-24 and the business
manages to hold on to the market due to good traction seen in four wheeler segment. The
businesses continue to gain additional market share by maintaining high quality standards
and customer satisfaction. The focus has been on generating more new businesses from
Exports and Original Equipment Manufacturers (OEMs)/Tier 1 Suppliers to OEMs by value
addition and cost competitiveness. The business is also focused on exploring new products/
technologies for growth in the top line.
5.3. Mobility Business TI's Presence
Mobility segment of the Company comprises of bi-cycles of Standards and Specials
including alloy bikes & performance bikes, cycling accessories, bi-cycle components
sold as spares and home/semi commercial fitness equipment. Last year the scope of business
was expanded by introducing SMART- Spares, Maintenance, Accessories, Recreational and
Toddler. Company has also embarked on the export market as a growth lever/strategy.
TUBE INVESTMENTS OF INDIA LIMITED : ANNUAL REPORT 2023-24 pT"
Industry Scenario
As the subdued performance of the bicycle industry persists in India, there's a
noticeable trend towards market consolidation. Consumer demand continued towards economy
range of products and unbranded players with low priced products gained an edge in the
industry.
There was a significant downward shift in the average selling price, particularly in
the kids and the Mountain Terrain Bikes ("MTB) segments. To counter the
penetration of unbranded players, playing on price, the organised players i.e., AICMA (All
India Cycle Manufacturer's Association) have ventured into launching low priced products
in Kids and MTB segments.
During the financial year, the organised trade industry witnessed a marginal growth of
4% as against the previous year. Standards segment grew by 4% and specials segment by
about 5% mainly driven by the growth in kids' segment.
Over 60% of the country's requirements are met by four major players. The smaller
regional players and imports constitute the balance. TI Cycles enjoys a share of about 21%
of the total organised trade market.
Review of Performance
TI Cycles sold 15 lakh bicycles during the year in trade, which was lower by 13%
compared to previous year.
To participate in the growing economy sub-segment, economy products were launched in
major categories like Kids and MTB. The thrust on Specials segment was driven through
frequent new product launches, product innovations, enhanced digital marketing and
superior consumer experience through exclusive retail outlets under the exclusive retail
brand 'Track & Trail' and a new concept "Star MBO- a shop-in-shop
experience leveraging multi-brand outlets. During the previous year we have opened 70 such
shops.
In 2023-24, 55 new model bicycles were launched and 72 models were refreshed.
Expansion of export market, spares and fitness growth are being pursued as future
growth engines.
6. Dividend
The Board of Directors declared an Interim Dividend of Rs2/- per equity share of Rs1/-
each (@200%) for the financial year 2023-24, which was paid on 21st February
2024 to all the eligible shareholders.
The Board recommended Rs1.50/- per equity share of Rs1/- each (@150%) of Final Dividend
and is subject to the approval of the members at the ensuing Annual General Meeting for
the said financial year.
: TUBE INVESTMENTS OF INDIA LIMITED : ANNUAL REPORT 2023-24
The total Dividend in respect of the financial year 2023-24 shall be Rs3.50/- per
equity share of Rs1/- each (@350%).
Though the dividend pay-out is in line with the Company's policy on Dividend
Distribution, the Company has proposed to conserve cash for the capital expenditure and
funding requirements. The said Policy as approved by the Board is uploaded and is
available on the following link on the Company's website: https://tiindia.com/dividend-distribution-policy/
7. Share Capital
The paid-up Equity Share Capital of the Company as on 31st March 2024 was
Rs19,34,02,216/- consisting of 19,34,02,216 Equity Shares of the face value of Rs1/- each
fully paid up. During the financial year 2023-24, the Company allotted 2,81,140 Equity
Shares consequent to exercise of employee stock options.
8. Finance
Cash and Cash Equivalents as at 31st March 2024 were Rs52 Cr. In addition,
Company has investments in Liquid Schemes of Mutual Funds for Rs229 Cr. The Company
continues to focus on judicious management of its working capital. The Company has taken
many steps during the year to improve the working capital turns. The working capital
parameters were kept under strict check through continuous monitoring.
8.1. Non-Convertible Debentures
There are no Non-Convertible Debentures outstanding as on 31st March 2024.
8.2. Deposits
The Company has not accepted any deposits under Chapter V of the Companies Act, 2013
and as such no amount of principal and interest were outstanding as on 31st
March 2024.
8.3. Particulars of Loans, Guarantees or Investments
As per Section 186 of the Companies Act, 2013, details of the loans, guarantees and
investments made during the FY 2023-24 are given below:
Name of the |
Nature of transactions - |
Rs in Cr. |
Company |
Investments/Loans |
TI Clean Mobility Private Limited |
Investment in Compulsorily Convertible Preference Shares |
333.00 |
TI Medical Private Limited |
Investment in Equity Shares |
232.81 |
3xper Innoventure Limited |
Investment in Compulsorily Convertible Preference Shares
and Equity Shares |
86.00 |
Name of the |
Nature of transactions - |
Rs in Cr. |
Company |
Investments/Loans |
Dalavaipuram Renewables Private Limited |
Investment in Equity Shares |
4.63 |
Moshine
Electronics Private Limited |
Inter-Corporate Deposits |
4.10 |
The aforesaid loans and investments are in compliance with Section 186 of the Companies
Act, 2013 and used for the business activities by the respective companies. Further
details form part of the Notes to the financial statements provided in this Annual Report.
As part of treasury management, the Company also deploys any short-term surplus in
units of mutual funds, the details of which form part of the Notes to the financial
statements provided in this Annual Report.
9. Subsidiaries, Joint Ventures and Associate Companies
The Company, in accordance with Section 129(3) of the Act has prepared Consolidated
Financial Statements of the Company and all its subsidiaries, associates and joint
ventures. Further, the report on the performance and financial position of each
subsidiary, associate and joint venture and salient features of their Financial Statements
in the prescribed Form AOC-1 is annexed to this report (refer Annexure-A)
Business Review
9.1. Shanthi Gears Ltd (SGL)
SGL, a subsidiary of the Company, recorded revenue of Rs536 Cr. in 2023-24 against
Rs446 Cr. in the previous year. Profit before tax was Rs110 Cr. (Previous year: Rs90 Cr.)
During the year, SGL renewed its focus on re-establishing itself in the market and gaining
new customers.
SGL continued to look at enlarging its market presence, create a robust channel,
enhance its process capabilities and launch new products to meet the growing expectations
of customers.
SGL also declared and paid an Interim Dividend of Rs3/- per share for the financial
year 2023-24.
9.2. Financiere C10 SAS (FC10)
FC10, the Company's subsidiary in France, recorded consolidated revenue of Euro 40.92
Mn in 2023 (previous year: Euro 38.98 Mn). The profit after tax for the year was Euro 0.80
Mn as compared with the profit after tax of Euro 0.40 Mn. in the previous year. The
consolidated results of FC10 include results of its subsidiaries viz., Sedis SAS, Sedis
GmbH and Sedis Co Ltd in UK.
9.3. Great Cycles (Private) Limited (GCPL)
GCPL is a subsidiary of the Company in Sri Lanka. The Company holds 80% of GCPLs equity
capital. During the year under review, GCPL recorded revenue of Rs0.05 Cr. (previous year:
Rs6 Cr.) and registered Loss before tax of Rs2 Cr. (Previous year: Rs1 Cr.)
9.4. Creative Cycles (Private) Limited (CCPL)
CCPL is a subsidiary of the Company in Sri Lanka. The Company holds 80% of CCPLs equity
capital. During the year under review, CCPL registered Loss before tax of Rs5 Cr.
(Previous year profit before tax: Rs3 Cr.)
9.5. CG Power and Industrial Solutions Limited (CG Power)
CG Power is a subsidiary of the Company acquired in November 2020.
The Company holds 58.05% of CG Power's equity capital.
During the year under review, CG Power recorded consolidated revenue of Rs8,046 Cr.
(previous year: Rs6,973 Cr.) and registered consolidated profit before tax of Rs1,137 Cr.
(Previous year: Rs950 Cr.).
CG Power has registered an impressive turnaround which only reaffirms the confidence of
the Board at the time of acquisition that CG Power would create better value for itself
and the Company in the coming years.
CG Power also declared and paid an Interim Dividend of Rs1.30 per share for the
financial year 2023-24.
9.6. TI Clean Mobility Private Limited (TICMPL)
TICMPL, a subsidiary of the Company was incorporated in February 2022.
During the year under review, TICMPL recorded Rs123 Cr. as revenue on a standalone
basis and registered a loss before tax of Rs98 Cr.
During the year under review, IPLTech Electric Private Limited, a subsidiary of TICMPL,
recorded a revenue of Rs33 Cr. and registered a loss before tax of Rs106 Cr.
During the period under review, Jayem Automotives Private Limited, a subsidiary of
TICMPL, recorded a revenue of Rs79 Cr. and registered a profit before tax of f7 Cr. from
the date of acquisition.
During the period under review, TIVOLT Electric Vehicles Private Limited, a subsidiary
of TICMPL recorded a loss before tax of Rs57 Cr. from the date of incorporation.
9.7. Moshine Electronics Private Limited (MEPL)
MEPL, a subsidiary of the Company was acquired in September 2022.
CORPORATE OVERVIEW
MANAGEMENT REPORTS
FINANCIAL STATEMENTS
During the year under review, MEPL recorded Rs12 Cr. as revenue and registered a loss
before tax of Rs2 Cr.
9.8. X2Fuels and Energy Private Limited (X2Fuels)
X2Fuels, a joint venture company was acquired in February 2023.
During the year under review, Til's share of loss from X2Fuels is Rs0.30 Cr.
9.9. 3xper Innoventure Limited (3xper)
3xper, a subsidiary of the Company was incorporated in May 2023.
During the period under review, 3xper recorded Rs0.03 Cr. as revenue and registered a
loss before tax of Rs15 Cr. from the date of incorporation.
9.10. TI Medical Private Limited (TIMPL), formerly known as Lotus Surgicals Private
Limited
TiMPL, a subsidiary of the Company was acquired in May 2023.
During the period under review, TiMPL recorded Rs164 Cr. as revenue and registered a
profit before tax of Rs22 Cr. from the date of acquisition.
10.4. Financial Ratios
10. Financial Review
10.1. Profits & Profitability
The Profit before Tax and exceptional items has registered a growth by 5%. All the
business segments of the Company maintained their focus on servicing customers, improving
efficiencies, controlling working capital and reducing resources employed in the business.
10.2. Capital Expenditure
The Company continues to assess the trends emerging in the industry and the changing
requirements of its customers and invests appropriately for the long-term, with a view to
servicing its customers in a more timely and efficient manner.
10.3. Interest Cost
The Company's interest cost during FY 2023-24 was Rs30 Cr. compared to Rs22 Cr. in the
previous year. The Company had a net debt of Rs180 Cr. (Net of Cash & Cash Equivalents
and investment in mutual funds) as on 31st March 2024 as compared to Rs69 Cr.
as on 31st March 2023.
The key financial ratios of the Company during the financial year compared to the
previous financial year are as under:
Sl. No. |
Financial Ratio* |
FY 2023-24 |
FY 2022-23 |
% change over previous year |
1 |
Interest Coverage Ratio (times) |
38.6 |
50.7 |
(23.8%) |
2 |
Debt-Equity Ratio (times) |
0.1 |
0.1 |
(19.2%) |
3 |
Net Profit Margin |
9.7% |
9.2% |
5.0% |
4 |
Return on Net Worth |
20.2% |
22.2% |
(8.9%) |
5 |
Return on Capital Employed |
24.5% |
27.6% |
(11.7%) |
6 |
Revenue Growth |
5.2% |
13.8% |
|
7 |
Debtors Turnover (times) |
9.4 |
10.4 |
(9.3%) |
8 |
Inventory Turnover (times) |
7.8 |
7.5 |
5.1% |
9 |
Current Ratio (times) |
1.1 |
1.1 |
1.7% |
10 |
Operating Profit Margin |
12.9% |
13% |
(0.2%) |
*Ratios are tracked by the Company on a standalone basis
10.5. Internal Control Systems
Internal control systems in the organisation are looked at as the key to its effective
functioning. The Company believes that internal control is one of the key pillars of
governance which provides freedom to the management within a framework of appropriate
checks and balances. Given the nature of business and size of operations, the Company has
designed and instituted a robust internal control system that comprises well-defined
organisation structure, roles and responsibilities, documented policies and procedures to
reduce business risks through a framework of internal
controls and processes. These controls ensure:
Recording of transactions are accurate, complete and properly authorised;
Adherence to Accounting Standards, compliance to applicable Statutes, Company
policies and procedures and timely preparation of financial statements;
Effective usage of resources and safeguarding of assets;
Prevention and detection of frauds/errors; &
Efficient conduct of operations.
To ensure efficient internal control systems, the Company has a well-established,
independent and multi-disciplinary Internal Audit function that carries out periodic
audits across locations and functions. The scope and authority of the Internal Audit
function is derived from the Internal Audit charter duly approved by the Management. The
Internal Audit function reviews compliance vis-a-vis the established design of the
internal control, as also the efficiency and effectiveness of operations. Internal Audit
function is responsible for providing, assurance on compliance with operating systems,
internal policies and legal requirements as well as suggesting improvements to systems and
processes. It reviews and reports to management and the Audit Committee about compliance
with internal controls, and the efficiency and effectiveness of operations as well as the
key process risks. The Company also has established whistle-blower mechanism operative
across the Company.
In its continued efforts to further strengthen its Internal Audit process through
utilizing the services of a specialist agency in order to benefit from the best of
practices available (including the use of analytical tools) to monitor various processes,
the Company re-appointed M/s. Pricewaterhouse Coopers ("PwC) as Internal
Auditors of the Company for the financial years 2023-24 and 2024-25. The Company is seeing
benefits from the professional approach and practices adopted by the said Internal
Auditors.
The Audit Committee of the Board of Directors, comprising of independent directors,
regularly reviews the audit plans, significant audit findings, adequacy of internal
controls, compliance with accounting standards as well as reasons for changes in
accounting policies and practices, if any.
The summary of the Internal Audit findings and status of implementation of action plans
for risk mitigation are submitted to the Audit Committee every quarter for review, and
concerns if any, are reported to the Board. This process ensures robustness of internal
control system and compliance with laws and regulations including resource utilisation and
system efficacy.
Revenue and capital expenditures are governed by approved budgets and the levels are
defined by a delegation of authority mechanism. Review of capital expenditure is
undertaken with reference to benefits expected in line with the policy for the same.
Investment decisions are subject to formal detailed evaluation and approved by the
relevant authority as defined in the delegation of authority mechanism. The Audit
Committee reviews the plan for internal audit,
significant internal audit observations and functioning of the Company's Internal Audit
function on a periodic basis.
10.6. I nternal Financial Control Systems with reference to the Financial Statements
The Company has complied with the specific requirements of the Companies Act, 2013
which call for establishment and implementation of an Internal Financial Control framework
that supports compliance with requirements of the said Act in relation to the Directors'
Responsibility Statement.
The Company's business processes are enabled by an Enterprise-wide Resource Platform
(ERP) as its core IT system. The operating management is not only responsible for revenue
and profitability, but for also maintaining financial discipline and accountability. The
systems and processes are continuously improved by adopting best in class processes,
automation and implementing latest Information Technology tools.
The Company has a formal system of internal financial control to ensure the reliability
of financial and operational information, and regulatory and statutory compliances. This
is reviewed regularly and tested by Internal Audit Team. The Company's business processes
are enabled by the ERP for monitoring and reporting processes resulting in financial
discipline and accountability.
11. Enterprise Risk Analysis and Management
The Company has an established risk assessment and minimisation framework. This
framework provides a mechanism to identify the risk, evaluation of likelihood of happening
and consequences. It also provides for assessment of options to mitigate the risk and
develop appropriate risk management plans. There are normal constraints of time,
efficiency and cost.
The Risk Management Committee of the Board of Directors reviews the risk mitigation
plans periodically to monitor the key risks of the Company and evaluate the management of
such risks for effective mitigation.
During the year under review, the Risk Management Committee met on 2nd
August 2023, 30th October 2023 & 22nd March 2024 and reviewed
the risks and mitigation plans of the divisions.
Some of the risks associated with the business and the related mitigation plans are
discussed hereunder. The risks given below are not exhaustive and the evaluation of risk
is based on management's perception.
11.1 Engineering
Risk |
Why considered as Risk |
Mitigation Plan/Counter Measure |
User Industry |
Significant exposure to auto sector |
New products/applications to existing customers |
Concentration Risk |
Time lag in pass through of input cost changes |
Introduction of new products catering to non-auto users |
|
|
Increase in exports volume with focused business development
on select product segments |
|
|
Leverage application engineering skills for tubular solutions |
|
|
To study the new opportunities that will emerge with the
launch of electric vehicles and plan for participation in same |
|
|
Drive efficiency improvement through Lean approach for
sustainable competitive advantage. |
Technology Obsolescence |
Cheaper alternatives for auto |
Imbibing new and relevant technologies |
Risk |
applications affecting revenue streams |
Equipment upgradations to address emerging demand for light
weighting and high strength tubes (stabilizer bar tubes) |
Raw Material Risk |
Volatility in steel price |
Alliance with steel producers |
|
Inconsistency in quality |
Back-to-back arrangement with customers to |
|
High inventory holding |
ensure timely recovery of steel price increases |
|
|
Global sourcing |
|
|
Strategic sourcing including developing new grades by
suppliers |
|
|
Rationalization and standardization of grades |
|
|
Move to products with higher value addition |
Competition Risk |
Competition from integrated steel |
Consistent quality and timely delivery |
|
mills |
Import substitution, development of new grades |
|
New entrants with financial strength~ Imports |
Product range of offering leveraging all businesses of the
Company |
|
|
Innovate on products, process and applications |
|
|
Leveraging metallurgy skills |
|
|
Regional balancing and common capability across all plants |
|
|
Digital initiatives for faster response |
Export related risks |
Increased trade protectionism and import tariff |
Identification of new export markets and customers |
|
Global competition |
Capability building |
|
Need for higher capability |
Focussing on new product categories and newer markets across
geographies |
|
|
Continue participation in US AD/CVD reviews to reduce duty
rates |
|
|
Efficiency improvement through Lean approach for sustainable
competitive advantage |
11.2 Metal Formed Products |
|
|
Risk |
Why considered as Risk |
Mitigation Plan/Counter Measure |
Demand Risk |
Slowdown in 2W industry growth |
Widen profile across product and customer portfolio. |
|
|
Continue to focus on cost reduction opportunities. |
|
|
Improving focus on exports. |
Pricing Risk |
Year-on-Year price reduction expectation |
Relationship building and joint/dynamic estimation of cost
with OEMs leading to smooth price increase settlement. |
|
|
Arrangement with customers for the timely recovery of steel
price increases in line with the industry standards. |
|
|
Maximize the benefit from sourcing and consolidated buying to
reduce impact |
|
|
Value Analysis/Value Engineering (VAVE) initiatives. |
|
|
Optimal investment and reduced cost of operations. |
Product Risk |
Revenues are model specific |
Continuous engagement with customers |
|
Risk of product failures |
Indigenization of equipment |
|
|
Pursue options for other business using the same facilities |
|
|
Model specific investments to be done by OEMs |
|
|
More rigorous analysis of risks before taking up the project |
Technology Risk |
Adoption of Electric Vehicles |
Engagement with major EV manufacturers. |
|
|
Focus on adjacencies and exports. |
|
|
Identification of new business opportunities. |
Employee Risk |
Increase in labour cost and nonavailability of skilled
resource |
Identifying talent and training for critical roles. |
|
Gap in talent availability |
Skill development of employees. |
|
|
Process automation |
Sourcing Risk |
Availability of raw material |
Vendor relationship building |
|
Dependency on few vendors |
Strengthening planning system to ensure timely availability. |
|
|
Identification of alternate source for critical items. |
11.3 Bicycles and Components
Risk |
Why considered as Risk |
Mitigation Plan/Counter Measure |
Product Obsolescence Risk |
Decline in sales, revenue and profitability |
Adapt to product alternatives like |
|
Increase in inventory |
E-bikes |
|
|
Focus on Exports |
|
|
Activations to promote cycling as a lifestyle/fitness category |
|
|
Monitor NPD (New Product Development) cycle
and address the exceptions periodically |
Sourcing Risk |
Raw material supply chain issues due to pandemic |
Continuous upgrading of vendor capability through vendor score |
|
Volatility in volumes |
card rating and closing the gaps, |
|
Continuous increase in raw material |
implementing Kaizens and ensuring timely delivery. |
|
price |
Relationship building and ensuring stable volumes to keep the
supplier operations running through altering Share of Businesses and rationalizing the
supply base continuously. |
|
|
Reduce import dependency and pass on the increase to market,
ensuring commodity settlement to suppliers every month. |
Competition Risk |
Investment in e-Cycle manufacturing plant to capitalize on
domestic and |
Increase focus on brand awareness & visibility initiatives |
|
exports volume International range licensing |
Launch of e-cycles targeting global market |
|
|
Introducing new models with a healthy innovation funnel |
|
|
Consistent quality and timely delivery |
Volume & Profitability Risks |
Shift to mass premium from Premium |
Be price competitive and leverage |
|
High price competition in specials |
innovation |
|
Increase in number of unbranded players with competitive
offering |
Premium imagery and designs at competitive price points |
|
|
Star Multi Brand Outlets with a vision to enhance consumer
in-store experience and store footprint |
|
|
Focus on optimized sourcing thereby have price competitive
products |
|
|
Increase focus on brand awareness & visibility initiatives |
Technology Risk |
Lack of capacity and capability to handle large scale shift to
alloy bikes |
Capability building for manufacture and assembly of alloy
bikes by: |
|
|
- Frame alloy manufacturing |
|
|
- Water Decal establishing |
|
|
- Support Indigenization for all imported components excepts gears
& shifters |
|
|
Establishing reliable source for high end bikes by approval of
alloy tube manufacturer |
|
|
Development of alloy child parts |
11.4 General
Risk |
Why considered as Risk |
Mitigation Plan/Counter Measure |
Human Resource Risk |
Build Talent Pipeline for meeting growth aspirations~
Retention of talent |
Conceptualize and implement TI Talent Management approach as a
key focus area |
|
Availability and skill upgradation of |
Coaching and team building |
|
non-permanent workforce |
Individual career and development plan |
|
|
Effective communication exercises |
|
|
Continuous engagement with identified talent pool |
|
|
De-skill operations |
|
|
Continuously engage with contractors and contract labour for
their wellness & engagement. |
Currency Risk |
Foreign currency exposure on exports, imports and borrowings |
Early identification and monitoring of exposures |
|
|
Hedging of exposures based on risk profile. |
IT/Cyber Related Risk |
Confidentiality, integrity and availability |
Access controls |
|
|
Secure Network Architecture |
|
|
Infrastructure redundancies & disaster recovery mechanism |
|
|
Audit of controls |
Project Management Risk |
Delay in implementation |
Effective project management |
|
Increase in cost |
Pre-implementation planning |
|
Potential delay in stabilization of |
Deployment of adequate resources |
|
production. |
Effective monitoring |
12. Corporate Social Responsibility (CSR)
The Company, being part of the Murugappa Group, is known for its tradition of
philanthropy and community service. The Company's philosophy is to reach out to the
community by establishing service-oriented philanthropic institutions in the field of
education and healthcare as the core focus areas. The CSR Policy of the Company is
available on the Company's website at the following link: https://tiindia.com/csr-policy/.
As per the provisions of the Companies Act, 2013, the Company was required to spend
T11.54 Cr. and had also carried forward an excess balance of T0.26 Cr. After adjustment of
the said excess carried forward balance, the net obligation required to be spent during
the financial year 2023-24 was T11.28 Cr, against which, the Company spent T5.71 Cr.
towards identified CSR projects in the fields of education, health care and community
development during the year and transferred T5.63 Cr. to TII Unspent CSR Account towards
an ongoing project The Company expects the ongoing project to be completed within the
timelines prescribed under the Companies Act, 2013.
The Annual Report on CSR for 2023-24 is annexed to and forms part of this Report (refer
Annexure-B) as well as on the Company's website at the following weblink:
https://tiindia.com/wp-content/uploads/2024/07/CSR-Annual-Report-2023-24.pdf
13. Corporate Governance
The Company is committed to maintaining high standards of corporate governance.
The Company was wholly in compliance with the requirements of the Listing Agreement
with the Stock Exchanges as well as the SEBI Listing Regulations.
A report on corporate governance together with a certificate from the Practising
Company Secretary is annexed in accordance with the terms of the SEBI Listing Regulations
and forms part of the Board's Report (refer Annexure-C). The Managing Director and the
Chief Financial Officer have submitted a certificate to the Board regarding the financial
statements and other matters in terms of Part B of Schedule II [Corporate Governance] of
the SEBI Listing Regulations.
The Report further contains details as required to be provided in the Board's Report on
the policy on
TURF INVESTMENTS OF INmA IIMITFD : ANNIIAI REPORT 9093-94 I 59
Directors' appointment and remuneration including the criteria, annual evaluation by
the Board and Directors, composition and other details of Board committees, implementation
of risk management policy, whistleblower policy/vigil mechanism, dividend policy etc.
14. Business Responsibility and Sustainability Reporting
As required under the SEBI Listing Regulations which mandate the inclusion of a
Business Responsibility and Sustainability Report as part of the Annual Report for the top
1000 listed entities, the Business Responsibility and Sustainability Report forms part of
the Annual Report (refer Annexure-D).
The Business Responsibility Policy of the Company is displayed on the Company's website
at the following link: https://tiindia.com/business-responsibility-policy/.
The report emphasises reporting on the ESG (Environmental, Social and Governance)
matters and describes the initiatives taken by the Company with specific focus on ESG.
15. Human Resources
The Company has embarked on a 'High Ambition Culture'. This culture embodies the
Company's aspirational goal, encouraging every employee to strive for their highest
potential. The journey began with a Culture Visioning Workshop, where themes and action
plans were finalised to kick-start implementation and transition towards a High Ambition
Culture, ultimately making it a way of life at TII (TI Way).
Employee engagement survey was conducted in February 2024 capturing insights,
identifying areas of enhancement and evaluating the efficacy of existing initiatives.
Effective implementation of action plans led to tangible improvements in engagement scores
over time. By actively listening to employee perspectives and prioritising their feedback,
the Company successfully cultivated a culture of continuous improvement and commitment to
employee satisfaction.
Talent development emphasis on nurturing internal leadership to meet the ambitious
business growth targets set by the Company. The Talent Development Engine
("TDE) has been meticulously crafted to cultivate executives at every level
converting them from Individual Contributors to Enterprise Leaders, through a structured
and systematic developmental journey. Over the last year, 20% of executives have embarked
on this developmental journey through the various interventions. Senior leaders actively
engage in mentoring these high-potential managers.
As part of the TDE, three senior leaders were nominated for the Harvard Advanced
Management Programme to
make them future ready to take on leadership roles in existing as well as new
businesses.
TII embarked on its Lean (Kaizen) journey under the guidance of Japanese consultants,
aimed at optimising operations, maximising value for customers, employees, and
shareholders, and achieving sustainable long-term growth. This ongoing initiative ensures
competitiveness, adaptability, and strategic positioning for future expansion.
The total number of permanent employees on the rolls of the Company as on 31st
March 2024 was 3,233.
Industrial relations continued to remain cordial at all the Company's units during the
period under review.
The information relating to employees and other particulars required under Section 197
of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment &
Remuneration of Managerial Personnel) Rules, 2014 will be provided upon request. In terms
of Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the
Members excluding the information on employees, particulars of which are available for
inspection by the Members at the Registered Office of the Company during business hours on
all working days of the Company up to the date of the forthcoming Annual General Meeting.
If any Member is interested in obtaining a copy thereof, such Member may write to the
Company Secretary in the said regard.
The disclosure with regard to remuneration as required under Section 197 of the Act
read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 is attached and forms part of this Report (refer Annexure-E).
16. Prevention of sexual harassment at workplace
The Company has a policy on prevention of sexual harassment at workplace in line with
the requirement of the Sexual Harassment of Women at the Workplace (Prevention,
Prohibition & Redressal) Act, 2013. An Internal Complaints Committee ("ICC)
to redress complaints received regarding sexual harassment has been constituted in
compliance with the requirements of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013. The policy extends to all employees
(permanent, contractual, temporary and trainees). Employees at all levels are being
sensitized about the Policy and the remedies available thereunder.
No complaints were received by the ICC during the year under review and no complaint
was pending as at the end of the year.
17. Employee Stock Option Scheme
During the year under review, the Company had granted 19,480 options to eligible
employees under its Employee Stock Option Plan viz., ESOP 2017.
The scheme is in compliance with Securities and Exchange Board of India (Share Based
Employee Benefits) Regulations, 2014 and Securities and Exchange Board of India (Share
Based Employee Benefits and Sweat Equity) Regulations, 2021 and the Companies Act, 2013
(the Act).
Details in respect of the ESOP 2017 as required under the Act/relevant SEBI Regulations
are displayed on the Company's website at the following link: https://tiindia.com/esop/
18. Directors' Responsibility Statement
The Board of Directors confirm that the Company has in place a framework of internal
financial controls and compliance system, which is monitored and reviewed by the Audit
Committee and the Board besides the statutory, internal and secretarial auditors. To the
best of their knowledge and belief and according to the information and explanations
obtained by them, your Directors make the following statements in terms of Section
134(3)(c) of the Companies Act, 2013:
a) that in the preparation of the annual accounts for the year ended 31st
March 2024, the applicable accounting standards read with requirements set out under
Schedule III to the Act have been followed and there are no material departures from the
same;
b) that such accounting policies as mentioned in the Notes to the Financial Statements
have been selected and applied consistently and judgment and estimates have been made that
are reasonable and prudent so as to give a true and fair view of the state of affairs of
the Company as at 31st March 2024 and of the profit of the Company for the year
ended on that date;
c) that proper and sufficient care has been taken for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act, 2013 for
safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities;
d) that the annual Financial Statements have been prepared on a going concern basis;
e) that proper internal financial controls to be followed by the Company have been laid
down and that the financial controls are adequate and were operating effectively; and
f) that proper systems have been devised to ensure compliance with the provisions of
all applicable laws and that such systems were adequate and operating effectively.
19. Auditors Statutory Auditors
M/s. S R Batliboi & Associates LLP, Chartered Accountants (Firm Registration
Number: 101049W/ E300004) were appointed as Statutory Auditors at the 14th
Annual General Meeting held on 2nd August 2022 for a period of four years viz.,
from the conclusion of the said 14th Annual General Meeting till the conclusion
of the 18th Annual General Meeting.
The report of the Statutory Auditors forms part of this Annual Report.
Cost Auditors
In accordance with the provisions of Section 148(1) of the Act, read with the Companies
(Cost Records and Audit) Rules, 2014, the Company has maintained cost records in respect
of Steel Products, Metal Formed Products and parts & accessories of auto components of
the Company and such accounts and records are made and maintained. The Board has appointed
M/s. S Mahadevan & Co. (firm no.000007), Cost Accountants as the Cost Auditors of the
Company for auditing the cost accounting records maintained by the Company in respect of
the applicable products for the financial year 2024-25. Necessary resolution for
ratification of their remuneration in respect of the aforesaid terms of appointment for
the financial year 2024-25 forms part of the Notice for the ensuing Annual General
Meeting, which the Board recommends for the shareholders' approval.
20. Related Party Transactions
All related party transactions that were entered into during the financial year under
review were on an arm's length basis and were in the ordinary course of business.
The Company did not enter into any materially significant related party contracts or
arrangements or transactions during the financial year which may have a potential conflict
with the interest of the Company at large or which is required to be reported in Form No.
AOC-2 in terms of Section 134(3) (h) read with Section 188 of the Act and Rule 8(2) of the
Companies (Accounts) Rules, 2014.
Necessary disclosures as required under the Indian Accounting Standards have been made
in the notes to the Financial Statements.
The policy on Related Party Transactions as approved by the Board is uploaded and is
available on the following link on the Company's website: https://tiindia.com/rpt-policy/
None of the Directors had any pecuniary relationships or transactions vis-a-vis the
Company.
21. Directors
During the year under review, the following key Board level changes were effected.
Mr. V S Radhakrishnan was appointed as an Independent Director for a term of three
consecutive years from 5th July 2023 to 4th July 2026 (both days
inclusive).
Mr. Sanjay Johri ceased to be an Independent Director from the close of business hours
on 3rd August 2023 consequent to the completion of his term of office as an
Independent Director. The Board placed on record its grateful appreciation for the
distinguished services rendered by Mr. Sanjay Johri during his association as an
Independent Director of the Company.
Mr. K R Srinivasan will cease to be a President and Whole Time Director from the close
of business hours on 30th June 2024 consequent to his retirement. The Board
places on record its appreciation for the services rendered by Mr. K R Srinivasan during
his entire tenure at the Company.
Mr. Mukesh Ahuja, Managing Director retires by rotation at the ensuing Annual General
Meeting to facilitate the compliance of the requirements of Section 152 of the Companies
Act, 2013 ("the Act) and being eligible, he offers himself for re-appointment.
The Board, based on and after taking into consideration the recommendations of the
Nomination and Remuneration Committee, recommends the re-appointment of Mr. Mukesh Ahuja
as Director, liable to retire by rotation only to comply with the provisions of the Act,
at the forthcoming Annual General Meeting.
All the Independent Directors of the Company have furnished the necessary declaration
in terms of Section 149(6) of the Act, affirming that they meet the criteria of
independence as stipulated thereunder. In the opinion of the Board, all the Independent
Directors have the integrity, expertise and experience including the proficiency as
required to effectively discharge their roles and responsibilities in directing and
guiding the affairs of the Company and, are independent of the management. The Independent
Directors have complied with the Code for Independent Directors prescribed in Schedule IV
to the Act.
22. Declarations/Affirmations
During the year under review:
- there were no material changes and commitments affecting the financial position of
the Company, which have occurred between the end of the financial year of the Company to
which the financial statements relate viz., 31st March 2024 and the date of
this Report; and
- there were no significant material orders passed by the regulators or courts or
tribunals impacting the Company's going concern status and its operations in future.
23. Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has
appointed Mr. R Sridharan of Messrs R. Sridharan & Associates, a firm of Company
Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial
Audit Report for the FY 2023-24 is annexed herewith and forms part of this Report (refer
Annexure-FI). The Company has followed the applicable Secretarial Standards, with respect
to Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the
Institute of Company Secretaries of India. Accordingly, no qualifications or observations
or other remarks have been made by the Secretarial Auditor in his said Report.
Further, in terms of the requirements under the SEBI Listing Regulations, the
Secretarial Audit Report of the Company's material unlisted subsidiary, TI Clean Mobility
Private Limited is annexed to this report (Annexure-F2)
24. Annual Return
A copy of the Annual Return of the Company is placed on the website of the Company and
the same is available on the following link: https://tiindia.com/financial-information/
25. Key Managerial Personnel
Mr. M A M Arunachalam, Executive Chairman, Mr. Vellayan Subbiah, Executive Vice
Chairman, Mr. Mukesh Ahuja, Managing Director, Mr. K R Srinivasan, President &
Whole-time Director, Mr. AN Meyyappan, Chief Financial Officer and Ms. S Krithika, Company
Secretary are the Key Managerial Personnel (KMPs) of the Company as per Section 203 of the
Companies Act, 2013. Mr. S Suresh stepped down as the Company Secretary & Compliance
Officer with effect from the close of business hours on 30th June 2023 and
continues to handle other responsibilities in the Company.
26. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
The information on conservation of energy, technology absorption and foreign exchange
earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with
Rule 8 of The Companies (Accounts) Rules, 2014 is annexed herewith and forms part of this
Report (Refer Annexure-G).
27. Acknowledgment
The Directors thank all Customers, Vendors, Financial Institutions, Banks, State
Governments, Investors for their continued support to your Company's performance and
growth. The Directors also wish to place on record their appreciation of the contribution
made by all the employees of the Company resulting in the good performance during the year
under review.
Chennai 13th May 2024
On Behalf of Board of Directors
M A M Arunachalam
Executive Chairman DIN: 00202958