DIRECTOR REPORT

The Board of Directors is pleased to present the Thirty-Seventh Annual Report of the Company (hereinafter
referred to as “ThejoVThejo Engineering’Tthe Company’Tyour Company”) and its audited financial
statements (standalone and consolidated) for the Financial Year ended 31^st March, 2023. The summarised
financial results for the year ended 31^st March, 2023 are given below:

FINACIAL

REVIEW OF FINANCIAL PERFORMANCE AND STATE OF COMPANY’S AFFAIRS

During the year under review, the Company continued its focus on value-added products under the
Manufacturing Division and on profitable operations at site level in respect of the Services and Operation
and Maintenance Division. The Company implemented the expansion of manufacturing facilities with focus
on working capital management. The increase in operational costs has resulted in marginal decrease in
profitability despite increase in turnover. The financial performance of the Company at standalone and
consolidated levels are given below.

STANDALONE

Your Company recorded revenue (from operations) of ' 33,269.82 lakhs for the year ended 31^st March,
2023 as against ' 27,753.92 lakhs in the previous year. It achieved an EBITDA of ' 4,883.68 lakhs (previous
year' 4,825.52 lakhs), resulting in a net profit of ' 2,758.17 lakhs as against ' 2,924.71 lakhs in 2021-22,
registering a growth of 1.21% in terms of EBITDA and a decline of 5.69% in terms of net profit.

CONSOLIDATED

The Consolidated Financial Statements of the Company have been prepared as per Ind-AS 110. The
Company’s consolidated revenue from operations in the year under review aggregated ' 47,445.59 lakhs
(previous year ' 42,446.34 lakhs) on which it made EBITDA of ' 6,257.25 lakhs (previous year ' 6,995.92
lakhs) and net profit (attributable to the Owners of the Company) of ' 3,241.75 lakhs as against ' 3,763.03
lakhs in 2021-22, registering a decline of 10.56% and 13.85% in terms of EBITDA and net profit (attributable
to the Owners of the Company), respectively.

DIVIDEND

The Board of Directors is pleased to recommend payment of dividend of 20% i.e., ' 2/- per equity share of '
10/- each for the Financial Year ended 31st March, 2023 (previous year: 20%). Based on the equity shares
outstanding as on 31^st March, 2023, the dividend would absorb an amount of ' 214.02 lakhs (previous year
-' 213.56 lakhs). Dividend Distribution Tax has now been abolished. Pursuant to the Finance Act, 2020,
the dividend income will be taxable in the hands of the Shareholders with effect from 1^st April, 2020 and the
Company is required to deduct tax at source (“TDS”) from dividend payable to the Members at the rates
prescribed in the Income-tax Act, 1961. The dividend payment is subject to the approval of the Members at
the ensuing Annual General Meeting.

EMPLOYEES STOCK OPTION SCHEME

The Members of the Company at their 29^th Annual General Meeting held on 26^th August, 2015 had approved
the Thejo Employees Stock Option Scheme 2015 (“ESOP 2015”), with a view to attract and retain the best
talent and promote increased participation by the employees in the growth of the Company.

The Compensation / Nomination and Remuneration Committee of the Board inter alia administers and
monitors the ESOP 2015.

During the year under review, there were no material changes in the ESOP 2015 and the Scheme is in
compliance with the SEBI Regulations on ESOPs.

Information in respect of options granted under the Thejo Employee Stock Option Plan 2015 is given in Note
26.9 forming part of the Financial Statements. As per Regulation 14 of the SEBI (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021, the details of the ESOPs are uploaded on the Company’s
website https://www.theio-engg.com/sites/ESOPs2Q23.pdf

The total shareholding of the Company changed due to the allotments made under ESOP 2015. The details
of movement in shareholding are as follows:

A Certificate from the Secretarial Auditors of the Company as required under Regulation 13 of the Securities
and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, is
attached to the Board’s Report.

CREDIT RATING

During the Financial Year 2022-23, CRISIL has upgraded the long-term credit rating on the bank facilities
from CRISIL A-/Stable to CRISIL A/Stable and short-term credit ratings on the bank facilities from CRISIL
A2 to CRISIL A1.

REPORT ON MANAGEMENT DISCUSSION AND ANALYSIS
GLOBAL ENVIRONMENT

The global environment is facing dynamic headwinds amid financial sector turmoil and high inflation in the
US, ongoing effects of Russia’s invasion of Ukraine and three years of COVID. The baseline forecast is
for growth to fall from 3.4% in 2022 to 2.8% in 2023, before settling at 3.0% in 2024. Advanced economies
are expected to see an especially pronounced growth slowdown, from 2.7% in 2022 to 1.3% in 2023. In a
plausible alternative scenario with further financial sector stress, global growth declines to about 2.5% in
2023 with advanced economy growth falling below 1%. (Source: World Economic Outlook, IMF, April 2023).

India

The output growth of country’s eight core industries hit a five-month low of 3.6% in March 2023 lower than
4.3% achieved in the same month last year. Output growth for the entire 2022-23 came in at 7.6%, lower
than the 10.4% achieved in the previous fiscal. According to the World GDP Ranking 2023 list, India is
the fifth largest economy in the world. The Indian steel industry outlook for 2023 looks promising with the
country gearing to become a US $5 trillion economy by 2030 (or sooner). And as per market predictions and
reports, the steel industry in India will play a pivotal role in steering India towards its goal (Source: EY-CII
report). According to predictions by the World Steel Association, the steel demand is estimated to grow by
6.7% in 2023 as against 8.2% in 2022.

Australia

While many major economies are at risk of recession in 2023, the IMF has forecast that the Australian
economy will continue to grow. Australia continued to outperform other advanced economies during 2022,
with a growth rate of 3.7%. The IMF forecasts that Australia’s economy will grow by 1.6% in 2023, compared
to an average of 1.3% for advanced economies. With talented workforce, renewable energy resources, and
open trade and investment, Australia is well placed to lead and innovate in the Asia-Pacific region. (Austrade
Benchmark Report). We expect Thejo Australia Pty Ltd to benefit from the same.

Saudi Arabia

Saudi Arabia's economic growth is expected to decelerate to 2.2% in 2023 with the oil sector expected
to contract by about 2% on the back of Saudi Arabia abiding by OPEC agreed production cuts. In this
background, the overall growth would be driven by non-oil sector, which is projected to grow by 4.3%,
(Source: World Bank). The growth is likely to be driven by a sturdy fiscal policy geared towards increasing
investment spending and the expected reforms by the Saudi government would provide robust opportunities
in the coming years. Thejo Hatcon Industrial Services Company is expected to capitalise on the business
opportunity and enhance growth.

Brazil

In 2023, real GDP growth is expected to slow to 0.9% due to monetary tightening, continued high inflation,
and subdued global demand. Together, these factors are likely to depress private consumption, exports,
and investment. Brazil’s project portfolio spans across all key sectors of the country’s economy and has
had significant positive impacts on people’s lives—including, in particular, the most vulnerable. The mining/
mineral industries of Brazil are expected to be back in the growth path during 2023 after witnessing a negative
growth in 2022. Despite the fall in mining during 2022, on the back of low base and steady establishment of
our products with key clients, our subsidiary in Brazil, Thejo Brasil Comercio E Servicos Ltda, could maintain
its profitable position.

Chile

The Chile economy grew by about 2.4% in 2022 after registering an impressive 11.67% growth in 2021. The
economy is expected to register a marginal growth in 2023 and 2024 with the medium-term prospects getting
shaped by ability to generate more inclusive and productivity-driven growth with sound macroeconomic
fundamentals. On the back of the steady establishment of our products and our brand in the market, the
operations of our subsidiary in Chile, Thejo Engineering LatinoAmerica SpA, recorded satisfactory growth
with good profits during the year.

With internationalisation of operations and expansion of existing business, our Subsidiaries are expected
to grow in the long term.

INDUSTRY STRUCTURE AND DEVELOPMENT

Global steel experts led by World Steel Association have predicted that India is going to be the epicentre of
the global steel growth. India’s finished steel production has increased by over 6% whereas globally steel
production declined by 4.2% in the year 2022. With indigenisation, rapid growth in export by defence sector
and policy support from government, the steel sector is expected to invest in capex in the medium term.

The Company continued to focus on value-added products along with high volume products. The Company
is also focussed on increasing services business with robust working capital management. The Company
continues to develop its overseas markets and pay attention to exports as domestic growth is expected to
be average in the long run.

COMPANY PROFILE AND KEY DEVELOPMENTS
Profile

Thejo Engineering Limited is a premium engineering solution provider to mining, mineral processing and
bulk material handling industries through manufacturing products and offering onsite maintenance through
technical services. Industries served are mining, mineral processing, steel making, aggregates and sand,
power, chemical and fertiliser, cement, ports, and others. The Products business of the Company centres
around design, development, manufacture and supply of rubber and polyurethane-based engineered
products for belt cleaning, spillage control, flow enhancement, impact and abrasion protection, and screening
applications. Thejo Engineering is one of the few companies in the sub-continent offering manufacturing,
marketing, and servicing activities under one roof.

Thejo Engineering has global presence with subsidiaries in Australia, Saudi Arabia, Brazil and Chile. The
Company caters to India, Australasia, Middle East, South America, North America, Sub-Sahara and West
Africa markets. The Company has four facilities and an in-house R&D Centre in Chennai. The Company
has distributor networks in the UAE and Africa.

Expansion of manufacturing facilities

As part of the expansion activities, your Company has set up a 3,10,000 sq. ft expanded manufacturing facility
in Ponneri, Chennai. This facility caters to the production of rubber screens, mill liners, diaphragms, shell
lifter bars, pinch valves, splicing kits, rubber sheets, etc. This state-of-art expanded manufacturing facility
was inaugurated on 24^th March, 2023 under the august presence of Mr. R. Dinesh, President Designate,
CII, National Council, Mr. Gulshan Malik, DMD, SBI, Mumbai, Mr. David Eggleston, Deputy Consul General
of the Australian Consulate and Prof Anand Narasimhan, Professor of Global Leadership and Dean of
Research, IMD Switzerland.

The objective is to expand the existing facility as a state-of-the-art manufacturing facility with capacity increase
of the moulded products by 50% to 3,600 MT per annum. The enhanced manufacturing capacity will meet the
current market demand as well as manufacture new related products required by the industry. This will help
both international and Indian clients, though the primary focus would be to cater to the international market.

RESEARCH AND DEVELOPMENT

The R&D Centre of the Company is focussing on developing new and innovative products as well as
bringing about continuous improvement of existing products to meet the needs of the customers and to tap
new markets. The sustained efforts of the Research and Development Team have helped the Company
to develop diverse product ranges capable of withstanding some of the hardest working conditions in core
sector industries.

The R&D Centre of the Company was recognized as one of the Top 25 Innovative Companies under CII’s
Industrial Innovation Awards for two consecutive years in 2019 and 2020. The Company was also declared
as the winner under the Manufacturing Medium Enterprise Category in the CII Industrial Innovations Awards
for the year 2020.

During the year under review, the Company had applied for patents in respect of several products/inventions.
As at the end of the financial year, the Company had applied for 32 product patents and three design patents,
of which 19 product patents have been awarded and the balance are in process.

SAFETY

As part of its policy of giving utmost importance to safety, the Safety Department of your Company is
continuously evaluating every process at its manufacturing as well as work sites and taking necessary steps
for the safety of personnel as well as of properties. The Company conducts safety review on regular basis
and takes appropriate steps based on the findings.

The Company has its Excellence Centre to train the technicians of the Company on safety and various
technical aspects of the job. Safety, quality and speed are key to our services business.

OPPORTUNITIES AND THREATS
Opportunities

The Company has been broadening and deepening customer relationships by continually looking for new
opportunities and newer areas in their businesses to add value, proactively investing in building newer
capabilities, exploring new markets, re-skilling its workforce and launching newer services towards long¬
term sustainability goals.

Majority of the product division output goes to steel sector and mines. The products as well as services
offerings of the Company are primarily intended for the core sector industries. The opportunities for the
industry in which the Company operates go hand in hand with the opportunities for core sector industries.
The government’s thrust towards infrastructure projects is a major contribution due to which steel demand
outlook is likely to rise. Increased infrastructure spending measures are a positive sign towards growth in
Core Industries and provide the Company with the possibility of new business opportunities.

The Company has a balanced portfolio of products and services, which helps to moderate the impact of
cyclicality experienced by its customers. It also helps the Company to tap the business opportunity during
expansion as well as during regular operations. The Company looks at taking services business to the
international markets and expanding the distributorship for its products in overseas geographies as the
key areas of opportunity for the future. With expansion of operations and penetration into the UAE market
through the proposed subsidiary, connectivity to international clients is likely to enhance, resulting in newer
business opportunities and growth in exports over the medium term.

Services sector finds talent supply as a challenging area in terms of technical competency, culture, and
efficiency. Cost cutting through multiskilled manpower and preventive maintenance through training on safety
and skill upgradation could enhance quality service and sustainable, consistent growth and development
in the future. International market has good potential for services sector with skilled manpower, for the
Company to capitalise.

The Company’s bet on Operation and Maintenance (O&M) as the mainstay for the future is yet to materialize
on the ground as O&M continues to be viewed as a commodity with consequent price pressures bordering
on manpower contract. Under these circumstances, the Company intends to focus primarily on such O&M
contracts that would add value to the Company as well as to the customers. The Company continues to
expect good potential in O&M in the long term as and when the market matures.

The Company has been offering bundled products and is taking various measures to establish its products
and services in the overseas markets as well. Mill liners and pipe conveyor maintenance are other areas
where the Company believes there will be enormous growth opportunities.

Threats

The steel prices witnessed a sharp drop and then a reasonable rise during FY23, after witnessing high price
levels during FY22 on the back of high commodity prices. On account of lower demand in China and fears
of recession, the prices of steel are expected to remain volatile. The US banking crisis is expected to have
an overall impact on the supply-demand situations.

Rising inflation trend in the global market can have an adverse impact on the price of raw materials, inventory
and labour. It can make it difficult for the market to gauge the current value of the companies that make up
market indexes. Any adverse movements in economic cycles in the Company’s target markets is mitigated
to some extent due to the Company’s presence in multiple and diverse markets.

The domestic product business is prone to cyclicality in the economy, especially the core sector. The
competition from the unorganized sector is a challenge for the services business of the Company. In
Operation & Maintenance, there is intense competition with manpower-based contracts being bagged by
industry players at lower prices, especially during times of economic downturn.

The Company could be susceptible to strategy, innovation, and business or product portfolio related risks if
there is any significant and unfavourable shift in industry trends, customer preferences, or returns on R&D
investments. Thejo does have the benefit of being very well entrenched with many of its customers, involved
in their critical and strategic initiatives and years of established relationship. Therefore, client concentration
related risks are mitigated to an extent.

Policy changes in respect of core sector industries will have a direct impact on the business of the Company
as it primarily caters to core sector industries in the domestic market.

In the backdrop of the global growth decline and fluctuations in pricing, the prices of most of the raw materials
used by the Company are volatile. The Company is doing its best to address this risk of material prices by
framing appropriate procurement and pricing policies.

FUTURE OUTLOOK

Policymakers the world over are currently facing a predicament. The last two years have seen the global
economy struggling to deal with overlapping crises, the latest being the liquidity troubles after a series of global
bank crises. While the impact appears to have been contained, these uncertainties continue to undermine
the confidence among consumers and businesses to spend, therefore impacting economic growth.

It is believed that investment will play an important role over the next two years. It is investments that will
provide India with necessary momentum to take off on a path of sustained domestic demand-led growth for
the next few years. A strong digitization drive the world over, cost-cutting measures by businesses to deal
with the impending slowdown, and the growing trend of remote working increased demand for exports of
services in technology, where India has a comparative advantage. Interestingly, the share of business and
professional services in total services exports also increased as companies globally now prefer outsourcing
a wide range of professions, such as accounting, audit, R&D, quality assurance, and after-sales service.

The overall economic outlook of India remains positive. Investments are expected to see a turnaround and
propel the economy into sustainable growth. India is expected to grow at a moderate pace of 6.0%-6.5%
in FY 2023-24, even as the global economy continues to struggle. Growth in the next year is likely to pick
up as investments kickstart the virtuous circle of job creation, income, productivity, demand, and exports
supported by favourable demographics in the medium term.

It looks like the world has come out of the shadow of the pandemic and has, in fact, learned to live with it.
However, geopolitical crises, supply chain reorientations, global inflation, and tight monetary policy conditions
will weigh on the outlook. In this backdrop, outlook for the future is positive combined with a high degree of
uncertainty and unpredictability. Though global uncertainties will weigh on growth, the Company and the
Management are prepared to take swift decisions based on emerging situation, keeping the interest of all
stakeholders in mind.

FINANCIAL PERFORMANCE

The financial performance of the Company in the year under review has shown growth in terms of turnover
with a slight dip in the profitability. The turnover from Manufacturing Division has increased. The Services
Division saw a better performance with increase in turnover. With expansion in progress and increase in
operational costs and some indirect costs that had remained low for the past two years on account of the
pandemic, the current year costs have shown a marginal spike and the same is expected to strike a balance
in the coming years. The Company has also stepped up its Information Technology spending focussing on
enhanced digitization and digitalization. Exports registered a marginal increase of about 8% compared to
the previous year. Your Company is expanding its business in the overseas markets through its subsidiaries
and branch, which is expected to improve the export turnover in future.

The production of moulded and extruded products was 2,289 tonnes during 2022-23, registering a growth
of 37% over the previous year (1,665 tonnes). The production of adhesives during the year under review
was 369 tonnes, showing a growth of 8% over the previous year (342 tonnes).

SEGMENT WISE PERFORMANCE

Your Company has 3 segments of revenue - Manufacturing Units, Service Units and Others. Audited
financial results of these segments are furnished in Note 26.3, forming part of the Financial Statements.

RISKS AND CONCERNS

The Company has put in place a Risk Management Policy and Procedures for identification, assessment,
management, monitoring and minimization of risks. It has identified potential risks under various categories
like Business Dynamics, Operations, Liquidity, Market/Industry, Human Resources, Systems and Disaster
Management. The Company is periodically reviewing the risks and their identification, assessment, monitoring
and mitigation procedures. It does not perceive any major technological, operational, financial or environmental
risks in the near future except for the US market fluctuations, prevailing Russian Ukraine conflict and their
impact on the global economy.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has adequate internal control systems combined with delegation of powers and periodical
review of the process. The control system is also supported by internal audits and management reviews of
documented policies and procedures.

DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Company continues to look at, identify, create and execute initiatives that enhance productivity and
efficiency. To enthuse the employee base and increase the linear relationship between performance and
reward, increments/incentives and ESOP are being provided based on performance.

The Company will invest as hitherto in people through various initiatives which enable the workforce to meet
the production and service expectations and challenges related thereto and to infuse positive enthusiasm
towards the organisation.

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

During the Financial Year 2022-23, the Company focussed on bagging KPI based O&M contracts, bagging
product orders for better capacity utilisation at manufacturing facilities, receivable and working capital
management. With the support of employees across divisions and aided by the rebound witnessed during
the financial year, the Company could successfully increase its turnover. However, as the Company is
progressing to the next levels of growth, there is a rise in operational cost, increase in other indirect costs that
had remained low during the past two years on account of Covid-19 and stepped-up spending on Information
Technology resulting in a dip in the profitability. The Company registered a profitability of ' 2,758.17 lakhs
as against ' 2,924.71 lakhs in the previous year with a reasonable growth in sales.

As a result of the above factors, the Return on Net Worth decreased to 16.51% in FY 23 compared to
20.87% in FY22.

During FY23, there was significant change (i.e. change of 25% or more as compared to the previous year)
in the following key financial ratios:

Net Capital Turnover Ratio: The turnover of the Company has increased from ' 27,661.40 lakhs in FY22 to
' 33,222.20 lakhs in FY 23. Due to the focus on working capital management, the working capital employed
has reduced from ' 9,470.66 lakhs in FY22 to ' 9,032.46 lakhs in FY23 despite the increase in turnover.
This has resulted in the Net Capital turnover ratio increasing from 2.92 times in FY22 to 3.68 times in FY23.

Interest Coverage Ratio: Interest Coverage ratio has decreased from 17.43 times to 11.02 times on account
of increase in the finance cost of the Company, on account of higher interest cost during the current year, on
account of term loans taken by the Company for expansion of its manufacturing units and increased interest
on Lease Liabilities combined with marginal dip in the profitability.

There were no significant changes in the other key financial ratios.

CAUTIONARY STATEMENT

Certain statements in the Management Discussion and Analysis, describing the Company’s views about
the industry, objectives and expectations, etc. may be considered as ‘forward looking statements.’ The
Company has tried to identify such statements by using words such as ‘expect’, ‘anticipate’, ‘hope’, ‘likely’,
‘plan’, ‘projected’, ‘believe’, estimated, etc. While making these statements, the Management has made
certain assumptions which it believes are prudent. There is no guarantee that the assumptions would prove
to be accurate. Actual results may differ substantially or materially from those expressed or implied in the
statements. The Company undertakes no obligation to update any of the statements, whether as a result of
any future events, change in assumptions or for any other reason, whatsoever. These statements are purely
intended to put certain things in perspective based on the assumptions and estimates of the Management
and in no way solicit investment or guarantee any performance or returns. Members and others are requested
to make their own judgment before taking any decision to invest in the shares of the Company.

INTERNAL FINANCIAL CONTROL SYSTEM

The Company has in place adequate internal financial controls commensurate with its size. During the year,
such controls were tested and no reportable material weaknesses were observed.

SUBSIDIARY COMPANIES

As on the date of this Report, the Company has four subsidiaries, namely, Thejo Hatcon Industrial Services
Company, Kingdom of Saudi Arabia (Thejo Hatcon) with 51% shareholding, Thejo Australia Pty Ltd.,
Australia (Thejo Australia) with 74% shareholding, Thejo Brasil Comercio E Servicos Ltda, Brazil (Thejo
Brasil) with 99.99% shareholding and Thejo Engineering LatinoAmerica SpA, Chile (Thejo Chile) with 99.86%
shareholding.

PERFORMANCE OF SUBSIDIARY COMPANIES

Thejo Hatcon Industrial Services Company (Thejo Hatcon) is engaged primarily in rubber lining and related
industrial services activities. During the period, 1^st April, 2022 to 31^st March, 2023, Thejo Hatcon achieved a
turnover of SAR 10.13 million (' 2,135.18 lakhs) on which it made a net profit of SAR 2.21 million ('494.83 lakhs).

Thejo Australia Pty Ltd (Thejo Australia) is a servicing Company, primarily engaged in belt splicing, belt
jointing, maintenance and related activities including sale of associated products and spares. During the
period, 1st April, 2022 to 31st March, 2023, Thejo Australia achieved a turnover of AUD 21.57 million
(' 12,042.38 lakhs) with a profit of AUD 0.01 million (-' 18.68 lakhs).

Thejo Brasil Comercio E Servicos Ltda (Thejo Brasil) is mainly engaged in selling materials used in core
sector industries for bulk material handling, mineral processing and corrosion protection. During the period,
1^st April, 2022 to 31^st March, 2023, Thejo Brasil achieved a turnover of BRL 1.70 million (' 272.47 lakhs)
with a profit of BRL 0.59 million (' 94.08 lakhs).

Thejo Engineering LatinoAmerica SpA (Thejo Chile) is primarily engaged in selling materials used in core
sector industries for bulk material handling, mineral processing and corrosion protection. During the period,
1^st April, 2022 to 31^st March, 2023, Thejo Chile achieved a turnover of CLP 1,815.37 million (' 1,815.37
lakhs) with a profit of CLP 270.29 million (' 330.02 lakhs).

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION,
FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo,
as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts)
Rules, 2014 are given in Annexure 1, forming part of the Board’s Report

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

Your Directors have constituted a Corporate Social Responsibility Committee (CSR Committee), with
Mr. V.K. Srivastava as Chairman and Mr. Thomas John, Mr. V.A. George, Mr. Sridhar Ganesh and
Mr. Srinivas Acharya as Members.

The Committee has been entrusted with the responsibility of formulating and recommending to the Board, a
Corporate Social Responsibility Policy (CSR Policy) and a CSR Annual Action Plan indicating the activities
to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and
recommending the amount to be spent on CSR activities. The CSR Policy is provided in the Corporate
Governance Report.

During the year 2022-23, the Company was required to incur CSR expenditure of ' 57.70 lakhs being 2% of the
average net profits for the immediately preceding three Financial Years. In compliance with this requirement,
the Company spent ' 58.00 lakhs on eligible projects approved by the Board on the recommendation of
the CSR Committee, thus fully meeting the CSR target for the year under review. Annual Report on CSR
Activities for the Financial Year 2022-23 is given in Annexure 2, forming part of the Board’s Report. Brief
particulars of the CSR projects undertaken is also given as part of Annexure 2.

DIVIDEND DISTRIBUTION POLICY

The Company has formulated a Dividend Distribution Policy in compliance with Regulation 43A of the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The same is uploaded on the
Company’s website at

https://www.theio-engg.com/theio-admin/upload/allstatutorv/DivDisbPolicv.pdf
ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return of

the Company is available on the Company’s website at

https://www.theio-engg.com/investors/AnnRet

NUMBER OF MEETINGS OF BOARD

Five meetings of the Board of Directors were held during the year. Particulars of the Meetings held and the
Directors present are given in the Corporate Governance Report, which forms part of the Board’s Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors state that:

a) in the preparation of the annual accounts for the year ended 31^st March, 2023, the applicable accounting
standards have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgements
and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of
the Company as at 31^st March, 2023 and of the profit of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a ‘going concern’ basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such
internal financial controls are adequate and are operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable
laws and that such systems are adequate and operating effectively.

POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

The Policy of the Company on Directors’ appointment and remuneration, including criteria for determining
qualifications, positive attributes, independence of a Director and other matters provided under
Section 178(3) of the Companies Act, 2013, adopted by the Board of Directors is given in the Corporate
Governance Report forming part of the Board’s Report.

AUDITORS’ REPORT

The Auditors’ Report for the year ended 31^st March, 2023 does not contain any qualification. During the year
under review, the Auditors have not reported any matter under Section 143 (12) of the Companies Act, 2013.

AUDITORS

M/s.Brahmayya & Co., Chartered Accountants, were re-appointed as Auditors at the 36^th Annual General
Meeting of the Company held on 27^th August, 2022 to hold office up to the conclusion of the 41^st Annual
General Meeting of the Company.

SECRETARIAL AUDIT

The Board appointed Mrs. Sindhuja Porselvam, Practising Company Secretary, to conduct Secretarial Audit
for the Financial Year 2022-23. The Secretarial Audit Report of Mrs. Sindhuja Porselvam for the Financial
Year is attached as Annexure 3 to the Board’s Report. The Secretarial Audit Report does not contain any
qualification, reservation or adverse remark.

SECRETARIAL STANDARDS

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

COST RECORDS

For the financial year 2022-23, the Company is required to maintain cost records as specified by the Central
Government under Section 148(1) of the Companies Act, 2013. The Company is accordingly making and
maintaining such accounts and records.

COST AUDITORS

As per Section 148 of the Companies Act, 2013, your Company is required to have the audit of its cost
records conducted by a Cost Accountant in practice for the financial year 2023-24. Accordingly, the Board
of Directors, based on the recommendation of the Audit Committee, have approved the appointment of
Ms. Latha Venkatesh, Latha Venkatesh & Associates, Cost Accountant in practice (FRN 101017), as the Cost
Auditors of your Company for the financial year 2023-24. As required under the Act, a resolution seeking
ratification of the remuneration payable to the Cost Auditors forms part of the Notice convening the ensuing
37^th Annual General Meeting.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Particulars of loans given, investments made and guarantees given which are required to be disclosed under
Section 186 (4) of the Companies Act, 2013 are given in Annexure 4, forming part of the Board’s Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

Particulars of contracts or arrangements with related parties required to be given under Section 188 (2) of
the Companies Act, 2013, in Form No. AOC-2, are set out in Annexure 5, forming part of the Board’s Report.

COMMITTEES OF THE BOARD

Currently, the Company has six Committees of the Board of Directors, namely, the Audit Committee,
Compensation/Nomination and Remuneration Committee, Corporate Social Responsibility Committee,
Stakeholders’ Relationship Committee, Allotment Committee and Risk Management Committee¹. The terms
of reference of the Committees are provided in the Corporate Governance Report, forming part of the Board’s
Report. The composition of the Committees, as at 31^st March, 2023, is as follows:

Notes: 1. Risk Management Committee has been constituted by the Board at its Meeting held on 25^th May,
2023.

2. Mr. Srinivas Acharya has been elected as the Chairman of the Stakeholders’ Relationship Committee
by the Committee at its Meeting held on 25^th May, 2023.

All the recommendations made by the Audit Committee during the year were accepted by the Board of
Directors, without any exception.

VIGIL MECHANISM

The Company has put in place a Whistle Blower Policy and established the requisite Vigil Mechanism for
employees and Directors for reporting concerns about unethical behaviour, actual or suspected fraud or
violation of law to a designated Committee. The Committee consists of Mr. M.D. Ravikanth, Chief Financial
Officer & Secretary, Mr. S Premjit - Senior Vice President- Services and Mr. Thomas K Abraham - Senior
Vice President- HR & Admin. This mechanism also provides for adequate safeguards against victimisation
of reporting employees. The Policy has been disseminated to all the employees through display on Notice
Boards and the Company’s website.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Thomas John (DIN 00435035), Director retires by rotation at the ensuing Annual General Meeting and,
being eligible, offers himself for reappointment.

Mr. V.A. George (DIN 01493737), Executive Chairman, retires by rotation at the ensuing Annual General
Meeting and, being eligible, offers himself for reappointment.

A brief resume of Mr. Thomas John and Mr. V.A. George together with related information is given in the
Notice convening the ensuing Annual General Meeting.

The Board recommends their re-appointment as Directors of the Company.

The details of Directors and Key Management Personnel, who were appointed or have resigned during the
Financial Year 2022-23 are as follows:

Mr. Sridhar Ganesh (DIN 01681018) was appointed as an Additional Director designated as Independent
Director of the Company for a period of 5 years with effect from 15^th November, 2021, by the Board at its
meeting held on 14^th November, 2021, based on the recommendation of the Compensation/Nomination
and Remuneration Committee. The appointment of Mr. Sridhar Ganesh as an Independent Director was
approved by the Members at their 36th Annual General Meeting held on 27^th August, 2022.

Mr. M P Vijay Kumar (DIN 05170323), who was serving as an Independent Director on the Board, resigned
from the Board on 2^nd November, 2022 as he was being considered for appointment as a Whole time Director
of M/s Sify Technologies Limited and he wanted to restrict his Independent Directorship to three listed entities,
in line with the spirit of Regulation 17A of SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015. He had joined the Board of the Company as an Independent Director in January, 2012. The Company
benefitted greatly from his expertise, experience and guidance during his tenure as Independent Director.

Dr. C N Ramchand (DIN 05166709), who was serving as an Independent Director on the Board, resigned
from the Board on 8^th March, 2023, due to his personal and professional commitments. He had joined the
Board of the Company as an Independent Director in January, 2012. The Company benefitted greatly from
his expertise, experience and guidance during his tenure as Independent Director.

Both Mr. M P Vijay Kumar and Dr. C N Ramchand have confirmed that there were no other material reasons
other than as mentioned above for their resignation from the Board.

On the recommendation of the Compensation/Nomination and Remuneration Committee, Mr. Nilesh Shivji
Vikamsey (DIN 00031213) was appointed by the Board as an Additional Director under the category of
Independent Director with effect from 8^th March, 2023. The Company has sought the approval of the Members
for the appointment of Mr. Nilesh Shivji Vikamsey as an Independent Director under Sections 149, 150, 152
read with Schedule IV and all other applicable provisions, if any, of the Companies Act, 2013 for a term upto
7^th March, 2028 vide Postal Ballot Notice dated 25^th May, 2023. None of the Company’s Directors has any
family relationships with Mr. Nilesh Shivji Vikamsey. In the opinion of the Board, Mr. Nilesh Shivji Vikamsey
possesses the required integrity, expertise and experience (including proficiency) for being appointed as
an Independent Director.

On the recommendation of the Compensation/Nomination and Remuneration Committee, Mr. Srinivas
Acharya (DIN 00017412) was appointed by the Board as an Additional Director under the category of
Independent Director with effect from 8^th March, 2023. The Company has sought the approval of the Members
for the appointment of Mr. Srinivas Acharya as an Independent Director under Sections 149, 150, 152 read
with Schedule IV and all other applicable provisions, if any, of the Companies Act, 2013, for a term upto
7^th March, 2028 vide Postal Ballot Notice dated 25^th May, 2023. None of the Company’s Directors has any
family relationships with Mr. Srinivas Acharya. In the opinion of the Board, Mr. Srinivas Acharya possesses
the required integrity, expertise and experience (including proficiency) for being appointed as an Independent
Director.

In the opinion of the Board, the Independent Directors appointed during the year, possess requisite expertise,
experience, proficiency and integrity.

A brief resume of Mr. Nilesh Shivji Vikamsey and Mr. Srinivas Acharya together with related information is
given in the Postal Ballot Notice dated 25^th May, 2023, which is available in the website of the Company at
https://www.theio-engg.com/theio-admin/upload/notices/Theio PB Notice 2023 Final.pdf

The Company has received declarations from all the Independent Directors of the Company, confirming that
they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and
Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

None of the Independent Directors will retire by rotation at the ensuing Annual General Meeting.

BOARD EVALUATION

A formal annual evaluation is required to be made by the Board of its own performance and that of its
Committees and individual Directors. Section 178(2) of the Companies Act, 2013 requires the Compensation/
Nomination and Remuneration Committee to specify the manner for effective evaluation of the performance
of the Board, its committees and individual directors to be carried out either by the Board, by the Nomination
and Remuneration Committee or by an independent external agency and review its implementation
and compliance. Schedule IV of the Companies Act, 2013 states that the performance evaluation of the
Independent Directors is to be done by the entire Board of Directors, excluding the Director being evaluated.

Accordingly, the Board of Directors carried out the annual performance evaluation of the Board, its
Committees, Individual Directors and Chairperson during the year under review pursuant to the provisions
of the Companies Act, 2013 and SEBI Listing Regulations. As approved by the Compensation/ Nomination
and Remuneration Committee, the evaluation of the performance of the Board, its committees and individual
directors, for the current year was done through web by filling the questionnaire uploaded in the web module.

The performance of the Non-Independent Directors and of the Board as a whole was evaluated by the
Independent Directors at a separate meeting held by them. The evaluation of all the Directors made was
on the basis of the criteria and framework adopted by the Compensation/Nomination and Remuneration
Committee based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board
of India on January 5, 2017.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures relating to remuneration and other details as required under Section 197(12) of the Act read
with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
are attached as Annexure 6 to the Board’s Report.

In terms of provisions of Section 197(12) of the Companies Act, 2013 and Rule 5(2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing names of
the employees drawing remuneration and other particulars, as prescribed in the said Rules forms part
of this report. However, in terms of proviso to Section 136(1) of the Act and Rule 5(3) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Annual Report, excluding the
aforesaid information is being sent to the Members of the Company. The said information is available for
inspection at the Registered Office of the Company during working hours and any Member who is interested
in obtaining these particulars may write to the Company Secretary of the Company. During the Financial
Year, no employee (excluding Managing/Executive Directors) received remuneration in excess of the
limits prescribed under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014.

CORPORATE GOVERNANCE

Your Company is committed to the well-being of the Environment, Society and upholding high standards of
Governance. The Company has voluntarily complied with the requirements of Corporate Governance to a
large extent. A report on Corporate Governance is attached as Annexure 7 to the Board’s Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING

The Business Responsibility and Sustainability Report (“BRSR”) for the Financial Year is attached as Annexure
8 to the Board’s Report. The BRSR indicates the Company’s performance in respect of the principles of the
‘National Guidelines on Responsible Business Conduct’.

GENERAL

Your Directors state that there were no transactions in respect of the following items during the year under
review requiring disclosure or reporting:

1. Deposits covered under Chapter V of the Companies Act, 2013.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Receipt of remuneration or commission by the Managing Director or the Whole-time Directors of the
Company from any of its subsidiaries.

4. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going
concern status and Company’s operations in future.

5. Application made or proceeding pending under Insolvency and Bankruptcy Code, 2016.

6. Difference between amount of valuation done at the time of one-time settlement and valuation done
while taking loan from the Banks or Financial Institutions.

Your Directors further state that the Company has constituted an Internal Complaints Committee and during
the year under review, there was no case filed pursuant to the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.

ACKNOWLEDGEMENT

The Directors wish to thank the Company’s Bankers for their continued support. The Directors also wish to
thank the Company’s customers and stakeholders for their patronage.

Your Directors place on record their appreciation of the good work done by the employees of the Company
at all levels.

For and on behalf of the Board

V.A. GEORGE THOMAS JOHN MANOJ JOSEPH

Chennai Executive Chairman Vice Chairman Managing Director

25^th May, 2023 DIN 01493737 DIN 00435035 DIN 0434579