To the Members,
th
The Board of Directors has pleasure in presenting 36 Annual Report of the Company for
the year ended 31 March, 2023.
Financial Summary
(Rs in million)
| Particulars |
Financial Year ended 31 March, 2023 |
Financial Year ended 31 March, 2022 |
| Revenue from Operations |
28,066.10 |
22,032.44 |
| Add: Other Income |
531.75 |
142.89 |
| Total Income |
28,597.85 |
22,175.33 |
| Less: Total Expenses |
23,362.64 |
17,793.49 |
| Profit before tax (PBT) |
5,235.21 |
4,381.84 |
| Less: Tax expenses |
1327.76 |
1110.79 |
| Net Profit after tax (PAT) |
3,907.45 |
3,271.05 |
| Add: Other Comprehensive Income |
7.68 |
(23.92) |
| Total Comprehensive Income |
3,915.13 |
3,247.13 |
During FY 2022-23, the Company recorded a strong revenue growth of 27% YOY. This
increase is driven by growth across most of the end market sectors. Total expenses
increased by 31% during the same period on account of inflationary impact on metals and
other expenses. The PBT is Rs 5,235.21 million in FY 2022-23 as compared to Rs 4,381.84
million in FY 2021-22. Increase in PBT can be attributed to increase in sales due to
increased business volume. The Financial Statements for FY 2022-23 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 and long-term growth projects. Cash and cash equivalents and
investments in mutual funds as at 31 March, 2023 were Rs 3,942.94 million as compared to
Rs 1,137.46 million as at 31 March, 2022. The year also saw better working capital
management in the areas of receivables, payables and inventory which is also reflected
under cash flow and financial ratios section. For more details on financial position,
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 (15%) for the year ended 31 March, 2023. Dividend Distribution Policy is
available on the website of the Company and can be accessed at
www.timken.com/en-in/investors/policies/.
New Manufacturing Facility
New manufacturing facility is being set up at Bharuch, Gujarat to manufacture Spherical
Roller Bearings (‘SRB') and Cylindrical Roller Bearings (‘CRB') and components
thereof. The Company already has manufacturing plant at Bharuch, Gujarat wherein primarily
Tapered Roller Bearings (‘TRB') and its components are manufactured. At the same
premises wherein existing plant is situated, new facility will be set up to manufacture
SRB and CRB and components thereof which will enhance manufacturing capacity of the
Company. Commercial production from new facility is expected to start in the month of
January, 2025. The Company will be investing approx. Rs 600 crore for setting up this
facility.
Directors and Key Managerial Personnel
As on 31 March, 2023, the Board comprised 8 Directors out of which 4 were Independent,
2 were Executive and 2 were Non-Executive Directors. During the year under review:
• Re-appointment of Mr. Sanjay Koul (DIN: 05159352) as Managing Director was
approved by the members at 35 AGM of the Company.
• Appointment of Mr. George J Ollapally (DIN: 09607523) as an Independent Director
was approved by members at 35 AGM of the Company.
• Appointment of Mr. Veerappan V (DIN: 01593254) as an Independent Director was
approved by members at 35 AGM of the Company.
• Appointment of Mr. Hansal Patel (DIN: 09607506) as a Director was approved by
members at 35 AGM of the Company.
Mr. Bushen Lal Raina (DIN: 00182160) ceased to be a part of the Board of Directors of
the Company due to his sad demise on 2 August, 2022.
Mr. Douglas Smith (DIN: 02454618), Director will retire by rotation at 36 AGM and being
eligible, offers himself for re-appointment.
Based on recommendation of the Nomination and Remuneration Committee, the Board of
Directors of the Company has approved:
Appointment of Mr. Ajay Sood (DIN: 03517303) as an Independent Director of the Company
w.e.f. 1 October, 2023 for a period of 2 years subject to approval of the members of the
Company.
• Appointment of Dr. Lakshmi Lingam (DIN: 10181197) as an Independent Director of
the Company w.e.f. 1 October, 2023 for a period of 2 years subject to approval of the
members of the Company.
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 has recommended their appointment at 36 AGM.
The Company is in receipt of Notices under Section 160 of the Companies Act, 2013 (the
‘Act') in respect of proposed appointment of Mr. Ajay Sood and Dr. Lakshmi Lingam as
mentioned above at ensuing AGM.
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.
The Company has received necessary declarations from all Independent Directors of the
Company confirming that each of them has met with the 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 databank of Independent Directors maintained by Indian
Institute of Corporate Affairs (‘IICA').
Corporate Governance
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 - I.
Details relating to composition of the Board and its Committees along with its meetings
held during FY 2022-23 are given in Corporate Governance Report which is attached as Annexure
- I. One meeting of the Independent Directors was held on 20 February, 2023 which was
attended by all the Independent Directors without participation of Non-Independent
Directors and members of management.
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 by the 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.
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. 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 Managerial 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 Managerial Personnel.
During the year under review, no change was made in the Nomination and Remuneration
Policy. This Policy is disclosed on the Company's website at
https://www.timken.com/en-in/investors/policies/.
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 & Chief - Compliance 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 20 February, 2023 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 the year
under review, new Risk Management Policy was approved mainly to capture the new Enterprise
Risk Management processes that were adopted by the Company as per ISO 31000: 2018 to
continually improve risk and opportunity management at enterprise level. Updated Policy is
disclosed on the Company's website at https://www.timken.com/en-in/investors/policies/.
Vigil Mechanism/Whistle Blower Policy
For details, please refer Corporate Governance Report attached as Annexure I.
Corporate Social Responsibility
The Corporate Social Responsibility (‘CSR') Committee of the Board is responsible
for evaluation and implementation of CSR Projects. The Company has spent Rs. 3,42,56,535/-
on various CSR Activities during FY 2022-23 including administrative overheads. Further,
the Company has transferred Rs. 2,46,63,101/- on account of ongoing project to Unspent CSR
Account. For more details on CSR expenditure during the year under review, please refer
Annual Report on CSR Activities attached as Annexure III. Salient features of the
CSR Policy are as follows:
l It lays down CSR Philosophy, Vision and Commitment of the Company. l It specifies
guidelines for implementation of CSR Projects through CSR Partners including eligibility
criteria for CSR Partners. l It also lays down roles and responsibilities of the CSR
Committee.
During the year under review, no change was made in the CSR Policy. This Policy is
disclosed on the Company's website at
https://www.timken.com/en-in/investors/policies/.
Statutory Audit
Pursuant to Section 139 of the Act, M/s Deloitte Haskins & Sells LLP, Chartered
Accountants (Registration No. 117366W/W100018) have been re-appointed as Statutory
Auditors of the Company for a period of 5 years from conclusion of 35 (‘AGM') till 40
AGM. During the year under review, there was no fraud reported by the auditors to the
Audit Committee/Board under section 143(12) of the Act. The Report given by the Statutory
Auditors on the financial statements of the Company forms a part of this Annual Report.
Statutory Auditors have given unmodified opinion. However, they have pointed out that
proper books of accounts as required by law were kept except back up on daily basis of
such books of accounts in electronic mode in server physically located in India. The
Company is exploring options available for maintaining backup on daily basis and this is
work-in-progress and it will be implemented soon.
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 FY 2022-23 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 2023-24. 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
2023-24 has been inserted in the Notice convening 36 AGM. The Board requests members to
approve/ratify remuneration of Rs. 6,30,000/- (Rupees Six Lakhs and Thirty Thousand Only)
plus applicable taxes and out of pocket expenses payable to Cost Auditors for FY 2023-24.
The Cost Audit Report of the Company for FY 2021-22 was filed on 14 October, 2022 (within
the stipulated due date).
Secretarial Audit
Pursuant to Section 204 of the Act, M/s. V Sreedharan & Associates, Practicing
Company Secretaries, 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).
Internal Audit
KPMG Assurance and Consulting Services LLP acted as Internal Auditors for FY 2022-23.
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
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. The Audit
Committee reviews this Policy from time to time and also reviews and approves all related
party transactions, to ensure that the same are in line with the provisions of applicable
laws and 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 2022-23 are disclosed in the Financial
Statements for the year ended 31 March, 2023.
In terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules,
2014, material related party transactions entered during FY 2022-23 in the ordinary course
of business and on arm's length basis are given in Form AOC-2, attached to this Report
marked as Annexure V. For FY 2023-24, the Company anticipates that material related
party transactions would be entered with four parties, for which approval is being sought
in 36 AGM.
Listing with Stock Exchanges
The Company confirms that it has paid Annual Listing Fees for FY 2023-24 to National
Stock Exchange of India Limited and BSE Limited, where the Company's shares are listed.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
Particulars 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 FY 2022-23:
| Particulars |
Amount (in Rs) |
| Dividend paid by erstwhile ABC Bearings Limited (amalgamated with the Company) for FY
2014-15 |
3,43,620/- |
| Dividend paid by the Company for FY 2021-22 against shares already transferred to IEPF |
13,91,739/- |
(ii) Unpaid dividend for FY 2015-16 relating to the Company and ABC Bearings Limited
(amalgamated) is due for transfer to IEPF in the month of September, 2023.
Annual Return
A copy of Annual Return filed during FY 2022-23 is placed on the Company's website at
https://www.timken.com/en-in/investors/statutory-compliances/. Draft Annual Return as on
31 March, 2023 is available on the website of the Company at
https://www.timken.com/en-in/investors/statutory-compliances/.
Financial Performance of any Subsidiary / Associate/ Joint Venture Company
The Company does not have any Subsidiary, Associate or Joint Venture Company.
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.
Deposits
The Company has not accepted Deposits covered under Chapter V of the Act and Rules
framed thereunder.
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 Code of 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 believes in providing and ensuring a workplace
free from discrimination and harassment based on gender. 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 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 Shares |
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 Stock Option 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 |
In terms of applicable SEBI Circulars, the Company has opened a Suspense Escrow Demat
Account to credit shares in physical folios to aforesaid account in case of non-receipt of
demat request from the securities holder/claimant within 120 days of the date of issuance
of Letter of Confirmation. For more details, please refer Corporate Governance Report
attached as Annexure - I. |
| Settlement with Banks/Financial Institutions |
Not applicable. |
| Proceedings pending under Insolvency and Bankruptcy Code, 2016 |
Not applicable. |
Acknowledgment
We thank all our stakeholders, employees, suppliers and investors for continuous
support due to which we could achieve great results. The Company has innovative
applications, strong leadership and therefore, better positioned to capitalize new
opportunities and achieve stronger performance.
|
For and on behalf of the Board of Directors |
|
Sd/- |
|
Sanjay Koul |
| Date : 30 June, 2023 |
Chairman & Managing Director |
| Place : Bengaluru |
DIN: 05159352 |
|