To the Members,
The Board of Directors has pleasure in presenting 35th
Annual Report of the Company for the year ended 31 March, 2022.
Financial Summary
(Rs in million)
Particulars |
Financial Year ended 31 March, 2022 |
Financial Year ended 31 March, 2021 |
Revenue from Operations |
22,032.44 |
14,105.20 |
Add: Other Income |
142.89 |
196.04 |
Total Income |
22,175.33 |
14,301.24 |
Less: Total Expenses |
17,793.49 |
12,350.61 |
Profit before tax (PBT) |
4,381.84 |
1,950.63 |
Less: Tax expenses |
1110.79 |
518.84 |
Net Profit after tax (PAT) |
3,271.05 |
1,431.79 |
Add: Other Comprehensive Income |
(23.92) |
(3.11) |
Total Comprehensive Income |
3,247.13 |
1,428.68 |
During FY 2021-22, the Company's revenue was up by 56% Y-o-Y, as
operations of the Company were back to normal as compared to the previous year, which were
impacted by COVID-19 pandemic driven lockdown and the Company also shown strong growth in
the business throughout the year. Total expenses increased by 44% during the same period.
The PBT is Rs 4,381.84 million for FY 2021-22 as against Rs 1,950.63 million in FY
2020-21. Increase in PBT can be attributed to increase in sales due to increased business
volume.
The Financial Statements for FY 2021 -22 have been prepared in
accordance with Indian Accounting Standards ("Ind-AS").
Financial Position
The Company continues to remain debt free and generated adequate cash
flow to meet its working capital needs. Trade receivables increased by Rs 1,674.27 million
in line with the increased revenue during the FY 2021-22 compared to FY 2020-21. Cash and
cash equivalents and investments in mutual funds as at March 31,2022 were Rs 1137.46
million as compared to Rs 1,704.04 million as at March 31,2021. For more details on
financial position and business review, please refer Management Discussion and Analysis.
The business of the Company has not undergone any change in the
financial year under review.
Post Balance sheet event
There is no reportable event comprising material changes and
commitments between the date of financial year end and the date of this report affecting
the financial position of the Company.
Reserves
The Board of Directors of the Company did not propose to transfer any
amount to reserves during the financial year under review.
Dividend
The Board of Directors, subject to approval of Members at ensuing
Annual General Meeting ('AGM'), has recommended dividend of Rs. 1.5/- per equity share of
Rs. 10/- each fully paid up (1 5%) for the year ended 31 March, 2022. Dividend
Distribution Policy is available on the website of the Company and can be accessed at
https://www.timken.com/en-in/investors/policies/.
Corporate Governance
Company's mission, vision and core values guide the Company and this
direction keeps the Company successfully working together, so as to enable us to make the
world a more productive place and deliver value to our stakeholders. The Vision Statement
of the Company expresses its aspiration to be the global leader in bearings and mechanical
power transmission, continually improving performance, reliability and efficiency. The
Company strongly believes that it can become a strong leader only by way of maintaining
good and sound Corporate Governance structures. Good Corporate Governance practices
followed by the Company inter-alia include strong and independent Board, transparency and
accountability, robust policies and regulatory compliance framework, strong internal
controls and monitoring of such controls, empowerment of employees/various stakeholders
and timely disclosures. The Company continuously monitors market trends and reviews
changing legal requirements and wherever required fine-tunes its procedures, structures,
systems so as to comply with applicable legal and regulatory requirements. Pursuant to
Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
('Listing Regulations'), Corporate Governance Report along with Compliance Certificate
from Practicing Company Secretary is attached as Annexure-1.
Directors and Key Managerial Personnel
During the FY 2021-22, the Board comprised 6 Directors out of which 3
were Independent, 2 were Executive and one was Non -Executive Director. During the year
under review, re-appointment of Mrs. N S Rama (DIN:06720033) as an Independent Director
was approved by the members at 34th AGM of the Company.
Based on recommendation of the Nomination and Remuneration Committee,
the Board of Directors of the Company has approved:
Appointment of Mr. George J Ollapally (DIN: 09607523) as an
Additional & Independent Director of the Company w.e.f. 1 June, 2022 fora period of 2
years subject to approval of the members of the Company.
Appointment of Mr. Veerappan V (DIN: 01593254) as an Additional
& Independent Director of the Company w.e.f. 1 June, 2022 for a period of 2 years
subject to approval of the members of the Company.
Re-appointment of Mr. Sanjay Koul (DIN:05159352) as a Managing
Director of the Company for a further period of 5 years w.e.f. 26 October, 2022 subject to
approval of the members of the Company.
Appointment of Mr. Hansal Patel (DIN: 09607506) as an Additional
Director of the Company w.e.f. 1 June, 2022.
In the opinion of the Board, aforesaid persons possess requisite
expertise, skills, integrity and experience and their association and leadership will be
beneficial to the Company. Hence, the Board recommended their appointment/re-appointment
at 35th AGM.
The Company is in receipt of Notices under Section 160 of the Companies
Act, 2013 (the 'Act') in respect of proposed appointment/re- appointment of Mr. Ollapally,
Mr. Veerappan, Mr. Koul & Mr. Patel as mentioned above at ensuing AGM.
Mr. Avishrant Keshava (DIN: 07292484), Director will retire by rotation
at 35th AGM and being eligible, offers himself for re-appointment.
Pursuant to Section 203 of the Act, Mr. Sanjay Koul as Managing
Director, Mr. Avishrant Keshava as Chief Financial Officer and Mr. Mandar Vasmatkar as
Company Secretary serve as whole-time Key Managerial Personnel ('KMP'). During the year
under review, there has been no change in KMP.
Directors' Responsibility Statement
In pursuance of Section 134(5) of the Act, the Directors hereby confirm
that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed and no material departures have been made;
b) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profit and loss of the Company for that period;
c) they have 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 have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls to be followed bythe
Company and that such internal financial controls are adequate and were operating
effectively; and
f) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
Annual Declarations from Independent Directors
The Company has received necessary declarations from all Independent
Directors of the Company confirming that each of them has met with criteria of
independence laid down in Section 149 of the Act and Regulation 16 of Listing Regulations.
Independent Directors' details have been included in the databankof Independent Directors
maintained by Indian Institute of Corporate Affairs ('IICA').
Meetings of the Board and its Committees
The Board has met six times and Audit Committee has met five times in
FY 2021-22. The gap between two consecutive Board Meetings and two consecutive Audit
Committee Meetings was within prescribed timelines under the Act and Listing Regulations.
The Board of Directors of the Company has accepted all recommendations put forward to it
by the Audit Committee. The Nomination and Remuneration Committee, Stakeholders
Relationship Committee and Corporate Social Responsibility Committee met once while the
Risk Management Committee met three times during FY 2021-22. Details relating to
composition of the Board and its Committees along with its meetings held during FY 2021-22
are given in Corporate Governance Report which is attached as Annexure -1.
Independent Directors Meeting
One meeting of the Independent Directors was held on 21 February, 2022
which was attended by all the Independent Directors without participation of
Non-Independent Directors and members of management.
Nomination and Remuneration Policy
Based on recommendation of the Nomination and Remuneration Committee,
the Board has laid down a Policy for remuneration of Directors, KMPs and other employees.
During the year under review, changes were made in the Nomination and Remuneration Policy
mainly to comply with amendments in Listing Regulations. Changes mainly cover amendment in
definition of material related party transactions and concept of material modification in
related party transactions. Updated Policy is disclosed on the Company's website at
https://www.timken.com/en-in/investors/policies/.
The salient features of the Policy are as follows:
It covers role of the Nomination and Remuneration Committee in
line with Section 178 of the Act and Listing Regulations.
It lays down factors and personal specifications that need to be
considered for appointment of a Director.
It specifies terms and conditions that need to be considered for
appointment of Directors, KMPs and Senior Management Personnel including tenure of
appointment, removal and retirement.
It also lays down parameters for payment of remuneration to
Executive Directors, Non- Executive/ Independent Directors, KMPs and Senior Management
Personnel.
Ratio of Remuneration
Pursuant to Section 197 of the Act read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time
to time, applicable details are given in specified format which is attached as Annexure -
II.
Information required under Section 197(12) of the Act read with Rules
5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, as amended from time to time, is annexed to this report. However, this Report
and the Financial Statements are being sent to the shareholders of the Company excluding
aforesaid information. Any shareholder interested in obtaining such information may write
to the Company Secretary at the Registered Office of the Company. The said information is
also available for inspection at the Registered Office during working hours up to the date
of AGM.
Formal Annual Evaluation of the Board of Directors, its Committees and
individual Directors
The Board has carried out performance evaluation of the Board of
Directors as a whole, various Committees of the Board and individual Directors based on
performance evaluation criteria. Each Director has provided feedback in writing to
Chairman about the Board as a whole, various Committees and individual Directors. Further,
Independent Directors in their separate meeting held on 21 February, 2022 have evaluated
performance of Non- Independent Directors, Chairman and the Board as a whole.
Risk Management
The Board of Directors of the Company has constituted Risk Management
Committee which inter-alia is responsible for assessment of risks, establishment of
framework for monitoring risks and developing strategy for mitigation of various risks.
During FY 2021-22, the Company was certified for ISO 31000:2018 Standards.
Enterprise Risk Management ('ERM') is the process of identifying and
addressing methodically the potential events that represent risks to achievement of
strategic objectives, or to opportunities to gain competitive advantage. Risk management
is an essential element of the strategic management of the Company and the same is
embedded in the ongoing activities of the business. The Company has adopted
ISO 31000:2018 as a reference and developed its enterprise risk
management policy & system around framework and principles of ISO 31000:2018. The
fundamental elements of ERM as developed at the Company includes assessment of significant
risks and implementation of suitable risk responses. Risk responses include acceptance or
tolerance of a risk; avoidance or termination of a risk and reduction or mitigation of
risk via internal control procedures or other risk prevention activities. Other important
elements of aforesaid ERM are risk philosophy or risk strategy, risk culture and risk
appetite. These are expressions of attitude to risk in the Company, and the amount of risk
that the Company is willing to take. In March 2022 , the Company completed its process of
risk management certification through third party Auditing agency thereby demonstrating
its capability to adapt framework and structure of ISO 31000:2018 and to continually
improve risk and opportunity management at enterprise level.
Vigil Mechanism
The Whistle Blower Policy of the Company is disclosed on the Company's
website at https://www.timken.com/en-in/investors/policies/ . The Company feels that
turning ethics into action is everyone's responsibility. To help protect Company's values
and reputation, associates and business partners are encouraged to speak up if something
just doesn't seem right or when they have a question. It enables the Company to better
uphold its values and fulfill commitments towards shareholders, customers, suppliers and
the community. The Company has adopted a Whistle Blower Policy in terms of which
associates, business partners of the Company are provided with mechanism to raise and
resolve their concern or question. Open door policy of the Company supports an environment
that encourages associates to ask questions and report concerns. When associates have a
question or concern, they can speak with a supervisor or manager with whom they feel
comfortable. If associates are not comfortable disclosing their identity, they may choose
to submit concern or question to "Timken Helpline", a toll free phone number and
choose not to disclose their identity. The Company investigates all reports promptly,
thoroughly and fairly, and takes actions when appropriate. The Company expects to
participate in investigations if required but safeguards confidentiality both during and
after the investigation. The Company does not tolerate acts of retaliation against anyone
who makes report in good faith.
Corporate Social Responsibility
The Corporate Social Responsibility ('CSR') Committee of the Board is
responsible for evaluation and implementation of CSR Projects. Based on recommendation of
the CSR Committee, the Board has spent Rs. 5,20,53,075/-on CSR activities during FY2021-22
in line with CSR Policy of the Company. During the year under review, changes were made in
CSR policy to comply with changes in the Act and Rules made thereunder and updated CSR
Policy is available on the Company's website at
https://www.timken.com/en-in/investors/policies/. Details about CSR Projects carried out
in FY 2021-22 are also available on Company's website at https://www.timken.com/en-
in/investors/statutorv-compliances/#other
Salient features of the CSR Policy are as follows:
It lays down CSR Philosophy, Vision and Commitment of the
Company.
It specifies guidelines for implementation of CSR Projects
through CSR Partners including eligibility criteria for CSR Partners.
It also lays down roles and responsibilities of the CSR
Committee.
Annual Report on CSR Activities is attached to this Report as Annexure-
III.
Statutory Audit
Current term of Deloitte Haskins & Sells LLP, Chartered Accountants
(Firm Registration No. 117366W/W-100018) as Statutory Auditors will come to an end at 35th
AGM of the Company. Pursuant to Section 139 of the Act, it is proposed to re-appoint
Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No.
117366W/W-100018) as the Statutory Auditors of the Company for a further period of 5 years
from conclusion of 35th AGM till 40th AGM. The Statutory Auditors
have confirmed that they are eligible for re-appointment and are notdisqualified.
The Independent Auditor's Report for FY 2021-22 do not contain any
qualification or adverse remark. During the year under review, there were no frauds
reported by the Statutory Auditors to the Audit Committee/ Board under Section 143(12) of
the Act.
Secretarial Audit
Pursuant to Section 204 of the Act, Mr. Nagarjun Y G, (ACS: 52406 &
CP No: 19301), Company Secretary in Practice, has submitted the Secretarial Audit Report
which is attached as Annexure - IV. There are no qualifications or adverse remark made by
the Secretarial Auditor. The Company has complied with norms of applicable Secretarial
Standards issued by the Institute of Company Secretaries of India (ICSI).
Cost Audit
In terms of Section 148 of the Act, the Company is required to maintain
cost records and have its records audited by Cost Accountant. The Company has maintained
the cost records for FY2021 -22 as required under Section 148 of the Act.
The Board of Directors, on recommendation of the Audit Committee, has
re-appointed M/s Shome and Banerjee (Firm Registration No. 000001) as Cost Auditors for FY
2022-23. In terms of Section 148 of the Act read with Rules made thereunder, remuneration
payable to Cost Auditors is required to be ratified by Members of the Company.
Accordingly, appropriate resolution for ratification of remuneration payable to Cost
Auditors for FY 2022-23 has been inserted in the Notice convening 35th AGM. The
Board requests members to approve/ratify remuneration of Rs. 6,00,000/-(Rupees six lakhs
only) plus applicable taxes and out of pocket expenses payable to Cost Auditors for FY
2022-23.
The Cost Audit Report of the Company for FY 2020-21 was filed on 5
October, 2021 (within the stipulated due date).
Internal Audit
KPMG Assurance and Consulting Services LLP acted as Internal Auditors
for FY 2021-22. They conducted periodical audits and submitted their reports to the Audit
Committee. Their reports have been reviewed by the Audit Committee.
Internal Financial Controls
The Company has a system of internal controls commensurate with the
nature of its business and the size and complexity of its operations. The Company has
adequately documented policies, procedures and authorization matrix aligned with the level
of responsibility which is designed to provide reasonable assurance on recording of
transactions, effectiveness, and efficiency of operations, providing reliable financial
information and safeguarding of assets. The Company has developed and implemented a
framework for ensuring internal controls over financial reporting. The Company has carried
out evaluation of design and effectiveness of these controls and noted no significant
material weaknesses or deficiencies which can impact financial reporting.
Related Party Transactions
In terms of Section 134 of the Act read with Rule 8 of the Companies
(Accounts) Rules, 2014, a summary of material related party transactions in the ordinary
course of business and on arm's length basis is given in Form AOC-2, attached to this
Report marked as Annexure- V.
The Company has adopted Related Party Transactions Policy and all its
transactions in ordinary course of business are entered in accordance with the said
Policy. Related Party Transactions Policy is available on the website of the Company at
https://www.timken.com/en-in/investors/policies/. All related party transactions entered
into by the Company during FY 2021-22 are disclosed in the Financial Statements for the
year ended 31 March, 2022.
Listing with Stock Exchanges
The Company confirms that it has paid Annual Listing Fees for FY
2022-23 to National Stock Exchange of India Limited and BSE Limited, where the Company's
shares are listed.
Annual Return
A copy of Annual Return as on 31 March, 2021 is placed on the Company's
website atwww.timken.com/en-in. Draft Annual Return as on 31 March, 2022 is available on
the website of the Companvatwww.timken.com/en-in.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
Details relating to Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and Outgo are attached to this Report marked as Annexure-VI.
Investor Education and Protection Fund
Pursuant to Section 124 of the Act and Rules made thereunder:
(i) the Company has transferred following unclaimed dividend amounts to
Investor Education and Protection Fund ('IEPF') during FY2021-22:
Particulars |
Amount (in Rs) |
Dividend paid by erstwhile ABC Bearings
Limited (amalgamated with the Company) for FY 2013-14 |
3,12,788/- |
Interim dividend paid by the Company for FY
2014-15 |
36,12,621/- |
Dividend paid by the Company for FY 2020-21
against shares already transferred to IEPF |
13,09,696/- |
(ii) During FY 2021-22, the Company also transferred 60,742 equity
shares to IEPF.
(iii) Unpaid dividend for FY 2014-15 relating to ABC Bearings Limited
(amalgamated) is due for transfer to IEPF in the month of September, 2022.
Financial Performance of any Subsidiary/Associate/Joint Venture Company
The Company does not have any Subsidiary, Associate or Joint Venture
Company.
Deposits
The Company has not accepted Deposits as defined in the Act and Rules
framed thereunder.
Particulars of Loans, Guarantees or Investments
Particulars about investments made by the Company during the year are
disclosed in the Financial Statements. During the year under review, the Company did not
give any loans except to its employees as part of the conditions of service. Also, the
Company did not give any guarantee or extended any securities in connection with any loan.
Significant and/or material orders passed by the Regulators
No significant and/or material order was passed by any Regulator, any
Court in India or any Tribunal, impacting going concern status and the Company's
operations in future.
Other Reports/Annexures
Pursuant to the Act and Listing Regulations, following reports form
part of this report:
1. Management Discussion and Analysis -Annexure -VII
2. Declaration regarding compliance with Codeof Conduct-Annexure-VIII
3. Business Responsibility and Sustainability Report-Annexure- IX
Disclosures under Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013
The Company does not tolerate discrimination, sexual harassment or any
other harassment whether engaged in by management or associates or other individual with
whom associates come into contact during work. The Company has adopted Anti-Sexual
Harassment Policy in line with Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013. The Company has constituted Internal Complaints
Committee to redress complaints received regarding sexual harassment as required by
aforesaid Act. During the year under review, the Company has not received any sexual
harassment complaint.
Other Disclosures
Sweat Equity Share |
The Company has not issued any Sweat Equity Share and
therefore, disclosure norms are not applicable to the Company. |
Shares with differential Rights |
The Company has not issued any Share with differential rights
and therefore, disclosure norms are not applicable to the Company. |
Shares under Employees StockOption Scheme |
The Company does not have any stock option scheme and
therefore, disclosure norms are not applicable to the Company. |
Purchase by Company or giving of loans by it for purchase of
its shares |
The Company has not purchased or given any loan to purchase
its Equity Share and therefore, disclosure norms are not applicable to the Company. |
Buy Back of Shares |
The Company has not bought back any Equity Share and
therefore, disclosure norms are not applicable to the Company. |
Demat Suspense/Unclaimed Suspense Account |
Notapplicable. |
Settlement with Banks/Financial Institutions |
Notapplicable. |
Proceedings pending under Insolvency and Bankruptcy Code,
2016 |
Notapplicable. |
Acknowledgment
We wish to place on record sincere thanks to employees, customers,
shareholders and suppliers. Each one of you are vital to the Company's continuous success.
The Company is in a great position to deliver new level of performance in FY 2022-23 while
remaining committed to long term strategy and growing as global leader.
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For and on behalf of the Board of Directors |
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Sdl- |
Date : |
1 July, 2022 |
Sanjay Koul Chairman & Managing Director |
Place |
: Bengaluru |
DIN: 05159352 |
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