Sundram Fasteners Ltd. (SFL), a TVS Group company, has announced a reduction in the employees’ remuneration in the range of 15% to 35% due to COVID-19 that impacted the company’s financial performance for FY20 along with the slowdown in the automobile sector.The chairman has voluntarily reduced his remuneration by 50%. The chairman, managing director and the joint managing director have voluntarily waived the commission payable to them for FY21 resulting in a reduction in their remuneration by 70%, said the company in a statement. Meanwhile, SFL’s standalone net profit for the fourth quarter ended March 2020 contracted 56.40% to ₹46.80 crore following economic slowdown and the outbreak of pandemic during March 2020, the firm said.
During the period under review, revenue from operations stood at ₹720 crore against ₹1,004 crore recorded in the corresponding year-ago period.
The fourth quarter results also included exceptional item amounting to ₹11.30 cror representing provision recorded for impairment in respect of investments in a certain overseas subsidiary, triggered by the changes in the business environment, including the impact of the pandemic, said the company in a regulatory filing.
StatingAsserting that its export sales were impacted due to the global economic slowdown and COVID-19, SFL said during FY20, it posted an export sales of ₹1,117.16 crore against ₹1,382.99 crore in the previous year. SFL’s key customers in the U.S. faced a slowdown due to the cyclical nature of the industry, the company said in a statement.
During the year, SFL incurred ₹304.70 crore towards capital expenditure as a part of capacity expansion of existing lines and for establishing a new facility at Sri City, Tada in Andhra Pradesh.
The company said it established SEZ Sundram Fasteners Ltd. at Sri City, Andhra Pradesh with an initial investment of ₹100 crore to make and export high precision engineering components to a leading European manufacturer for onward supply to its global marquee OEM customers for their existing as well as new programs.
The unit commenced commercial production and the first shipment left to Germany on January 27, 2020. The new unit will provide further impetus to the company’s export thrust through an addition of products to its portfolio as well as diversifying its export customer base, it said.
SFL had already paid two interim dividends aggregating to ₹4.15 per share for FY20. No final dividend was proposed.