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Johnson Controls-Hitachi Air Condition. India Ltd.

BSE: 523398 Sector: Engineering
NSE: JCHAC ISIN Code: INE782A01015
BSE 00:00 | 27 Jan 1814.65 -13.85






NSE 00:00 | 27 Jan 1812.90 -12.45






OPEN 1830.00
52-Week high 2936.70
52-Week low 1793.45
P/E 89.57
Mkt Cap.(Rs cr) 4,934
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1830.00
CLOSE 1828.50
52-Week high 2936.70
52-Week low 1793.45
P/E 89.57
Mkt Cap.(Rs cr) 4,934
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Johnson Controls-Hitachi Air Condition. India Ltd. (JCHAC) - Director Report

Company director report


Dear Members

Your Directors hereby present the Thirty Sixth Annual Report andtheAuditedFinancialStatements for the year ended March 31 2021.


The highlights offinancial results of the Company for the year under review are givenbelow:

(Rs. in Million)
For the year ended March 31 2021 For the year ended March 31 2020
Revenue from operations (gross) 16465.4 21973.7
OtheoIncome 79.0 81.5
Total Reve n ue 16544.4 22055.2
Profit befoae hinance cost depreciation arid tax 1324.7 1796.2
Finance Coot 135.6 50.2
Depreciation andamortization expenses 754.8 562.9
Profit beOore dnx 434.3 1183.1
Tax yxpense 103.3 347.8
Profit forthe year 331.0 835.3


Business was impacted in Financial year 2020-21 too due to Covid-19 Pandemic.Therefore to conserve cash for planned capex for growth and new productsand workingcapital during next year your Directors do not recommend dividend for the year endedMarch 31 2021.

Company Overview

Johnson Controls-Hitachi Air Conditioning is a joint venture Company betweenJohnson Controls Inc. USA and Hijachi Appliances Inc. J apan (Now HitachiGlobal Life Sol utions I nc. Japan) which was formed on 1st October 2015.Thisjoinpventure has combined the rich heritage and innovative technology ofHitachi with the mdustry-leading expertise and global network of Johnson Coatrols. Johnson Controls-Hitachi Air Conditioning India Limitnd is a subsidiary of this JV. TheCompany provides a diversified range of cuctomized nnd innovative air conditioningproduots. Hitnchi is an established) pramium brand in HVAC Segment in India. As a part ojifs growth strategy post the globol joint venture the Company has been taking severalinitiatives to fortify its le adership m the air conditioning m arket. The Company'sproduct offerings include Room Air Conditioners Commercial Air Conditioners &Refrigerators.

The Company possesses a wide distribution network with 5 regional offices 17 branchoffices and more than 10000 sales points. After sales servi ces uotwork com forises of1m ore fan 1500 autho rized service provid.pp partners iucludingstnndalone service partners as well as Sales Servke deapers proving aftersales servke to customers across length and breadth of India.

Industry Structure and Developments

Indian Air Conditioning market is high ly skewed towardsRoomAir Conditioners (RAC)with RAC contributing as much as 80% of the market. While online sales of RAC h avestarted growing in the recent years majority of sales still continue to be drivenheavily through offline retail showrooms and distribution channels. Moreover over twothirds of the annual RAC sales take place in the first half of the financial year.

As the pandemic induced nation-wide lockdown was implemented sOarting March 24 2020.Room air conditioner market expesienced an estimated yearon year de-growth of almost 60%during the first half of the year. The subsequent disruption to global supply chainsocean hreight Comestic logistics aod overall slumo in consumer demand resulted in anoverall year on year primary sales decline by approx. 17%.

Business Overview Room AirConditioners

Over the past few years consumer's awareness is increasing about Inverter technologyand with improved lifestyle higher disposal income year-round usage pattern increasingurbanization ease of finance options warranty assurance etc. has led to higher tractionof superior technology of Inverter models. Company has anticipated high demand of Invertertechnology in advance and Jas acoordisgly built up strong product line; op ofinverter toe hnology doiven room air conditio ner models.

Company had made a robust plan for summer season of 2020 with new product offeringswith latest technology and advanced features and was ready to reach out to the customerthrough strong & nationwide channel network with aggressive marketing strategies &plans. Unfortunately pandemic situation occurred in March 2020 followed by nationwidelockdown during the peak summer season disrupting the sales of air conditioner. Duringfirst quarter usually customer buying of room air conditioner is as high as 50% of thefull year however during 2020-21 it got reduced significantly due to Covid-19 pandemicinduced lockdown.

Company's room air conditioner business declined by 62% on volume basis in the firsthalf due to pandemic effect but made a strong comeback in the second half with 44% growthin volume and on yearly terms there was de-growth of 18% on volume basis. However Companymanaged to retain its market share.

Anticipating pent up demand for 2021 summer season due to low buying in summer of 2020Company has planned well in advance and has launched new products viz. Kiyora - 5 starInverter series and Shizen - 3 star inverter series. Apart from new design aesthetics ofKiyora & Shizen Company has introduced a unique feature called ‘AmbienceLight' which makes easy for customer to choose the preferred ambience at a glance to theAir Conditioner. Other features added in existing range of products included (a) WiFitechnology Split AC model featured with voice command & mobile app control of Split ACfrom anywhere (b) Frost wash technology in 3 star inverter category which cleans theevaporator coil with just a press of a button (c) Heat pump Inverter model which can workbetween -20 deg C to +52 deg C in 3 star category which is an addition to already havingsimilar feature in 5 star model. [Heat pump models are popular in Northern region] (d)Inverter compressor technology introduced for window AC category (e) expanded the largetonnage capacity range of Takeshi model ranging from 1.7 Tr to 3.1 Tr for big size roomsand (f) Launched 1.0 TR Inverter Split AC in fresh look with introduction of stunningdesign of outdoor unit & new indoor unit.

Company launched these new products with advanced features as above during virtuallaunch in February 2021. The launch created lot of excitement with more than 6500participants attending the event.

For the growth of RAC business the company plans to continue with its sales strategyof increasing its reach in Tier 2 & 3 towns strengthening existing channelsexpanding nationwide service network bringing efficiencies to supply chain enrichingproduct portfolio and positioning brand as an aspirational brand during the year 2021-22.

Creating a comfort for our esteemed customers who are willing to have early adaptationof our advanced features and combining it with improved aesthetics of our new indoor unitwith its design philosophy inspired from nature and Japanese roots so with customercentric approach approach our Mantra is "New begins with You".

We are confident that various attributes of Air viz. Silent Air Surround Air OdourFree Air Clean Air and Fresh Air grouped as ‘Hitachi Air' combined with new featuresand improved aesthetics of our new indoor unit with its design philosophy inspired fromnature and Japanese roots shall elevate our brand image and it will be able to create aconnect with youth.

Commercial Air Conditioners:

Variable Refrigerant Flow (VRF)

VRF technology has been accepted & adopted widely now in Indian market andsurpassing PAC market in value terms.

VRF - Variable Refrigerant Flow technology-based Air conditioning system is gainingimmense popularity in India with the increasing adoption at offices hotels high-endresidential apartments villas retail stores supermarkets hospitals banks educationinstitutes etc.

With increased adoption of VRF system in the construction sector in the commercial& residential segments as mentioned above the awareness is growing about itsadvantages such as energy efficient HVAC solution as it uses diversity principle of heatload variation pattern in the given context. Besides the energy efficiency part it alsooffers flexibility of connecting various types of Indoor units (ductless & ducted typeindoor units ranging from 0.8 HP to 20 HP) and can also connect with Air Handling Units(AHU) for specific applications making it more diverse & unique air conditioningsystem.

Company has introduced Global design platform - VRF Sigma series in mid-2018 for Indianmarket. This Sigma series has been very well accepted in Indian market. With theintroduction of Sigma VRF Hitachi has become the only Japanese brand having biggestsingle module up to 24 HP and combination upto 96 HP. VRF Sigma series adopted allinverter compressor design with newly designed high efficiency DC inverter compressorhaving precise frequency control in the range of 0.1Hz increments with 110 steps. Besidesprecision compressor control a Sigma-shape heat exchanger combined with dual fan forincreasing air volume rate new bell-mouth fan housing design all electrical &electronic components are well integrated with precise microprocessor and together act asenergy enhancers & allow Sigma range to achieve best in class efficiency even atpartial load conditions. Easy access for maintenance and designed to work up to 520Cambient temperature makes it more appropriate & suitable for India's tropicalconditions.

Being a customer focused Company JCH-IN has understood the latent wish of high-endresidential customers high-end cafes restaurants etc. and has introduced a new range ofproduct called SET FREE mini VRF. SET FREE mini is a unique product designed globally butkeeping India's climatic conditions in mind. SET FREE mini works on variable refrigerantflow (VRF) principle and offers completely new experience for the premium homes &spaces. Customer will have an added advantage of choosing from a basket of eight differenttypes of Indoor units and five different types of controllers. Outdoor capacity rangesfrom 3 HP to 7 HP. Its compact size offers space saving advantage against traditional oneto one split AC catering to the similar requirement. Over and above this new range ofmini ODU also has a feature to connect 130 percent of IDU capacity & more as the casemay be using cooling load diversity of usage pattern.

SET FREE mini & SET FREE Sigma can be centrally controlled through an innovativeIoT VRF management mobile app - airCloud Pro. An intuitive mobile app that anyone can useairCloud Pro makes managing air conditioning systems simpler than ever before andminimizes human interaction. This technology allows customers to remotely control the VRFsystem(s) from a single mobile app saving energy easy control monitoring faulttracking & offers comfort at fingertips of such a large system.

During 2020-21VRFmarkethasexperienced a de-growth ofalmost 40% due to pandemicsituation. Many commercial projects have been stopped & delayed due to reduced demandwork from home culture and reduced constructiop activities. Duripg tpe 2nd half of theyear there's a sign of recovery and market situation started improving. Company hadde-growth of almost 50% in terms of outdoor HP in the 1st half due to pandemic and duringthe second half Companyhasstartedrecoveryfrom thefirsthalf situation. So overallde-growth was 37% on outdoor HP terms.


Apart from Vah Company offers large range of Packaged Air Conditionerswithgreen refrigerant&multi cirauitoption for better part load operation anal redundancy.In psckage AC segment Company is having good presence with strong channel network.Company glso offers one to one cassette ACs including inverter models for-showrooms restaurants residences etc. During the year Cassette AC business had ade-growth on33% businpss ovpr last yean wheress PAC had de-growth of37%business.

Post Covid period Company is expecting increase demand on accountofimprovement inliving standards along with recovery of the organized commercial sector characterized bythe rising number of hypermarkets supermarket and offices etc. and Company is expectingti e growtd o f overall commercial chain which in turn is expected to boost the sale ofHVAC packaged units and Cassette ACs in thecoming period.

Application-Based Air Conditioners - Telecom Air Conditioners

The Company- continues to dominate this segment being the single largestairconditioningsolution provider for cooling requirementin Telecom Towers. However stiff competition andstressed margins in telecom industry has led to lower or marginal investments in Capexbased infrastructure. This trend in telecom Industry has severely i mpacted thio segmen tof aur bog siness. The futu re growth of telecom iower sector woulC be driven toy 5(5 andloT busiress. As demand hor internet services continue to spide. owing to Covid 19pandemic the exisding cellular infrastructure requires to big upgraded. We are hopefulthat with the revival of telecom industry our revenue fnom 1:l^iss;egmen1; vtfillincrease in nesr future.


The Company ventured into the export business segment four years eack. Inthe last couple ofyea^ the Company has started exporting to Soefh AsianCountries (Nepal phutan Sri Lanka and Maldives) and South East AsianCountries like Indonesia and Vietnam. We ore also exporting our Products in M(ddleEast countries like UAE Qatar. Oman Bahrain Iraq Kuwait and Saudi Arabia.

This year we have started our direct business operations in Africa and other SouthAsian countriesg With aggsessive expansion piansr the Company hasalaeady aupointed 21 nuw channel partnarsin almost 14 new territories (SAARC ant Africaincludid^ Company achieved 20% growth i n revenue over last year this growth has majorlycome from commencing operations in new territories. This was a welcome developmentconsidering the pandemic situation wherein the existing markets experienced a decliningtrend in sales.

OnGlobal map today we are present in Middle East Africa South East Asia and SouthAsia region with not just our made in India product line up but also other productlineups from Associate Companies established worldwide. The Company expects to increaseits exports business in the coming years with much otabilized government policies afterrecovering from COVID-19 pandemic which has heavily impacted the global business.

Home Appliances

In the Home Appliance segment Company deals in premium range of Refrigerators andAirPurifiers.

Current lineup of Hitachi imported refrigerators are designed considering the eatingconsumption habits of Indian consumers. Company's advance dual fan co3nptechnology provides independent cooling of [Refrigerator & Freezer (R&F)compartment separately and offers fast cooling and energy saving in the new series.

Compohyaims at offerihr a variety of premium range of Frost free and Bottom freezerrefrigerators as per theIndian c ustomer reqpirementsl Today Hitachi Cac acomplete Frost-free range with 8 senies and 26 SKUs- starting from 385 Ltrs gross to 700Ltrs gross capacity in 2-door 3-door and 4-door in top freezer bottom freezerand sideby side segments.


Good Cuntomer Care hns always remained a -ey focus of the Company. The Company aims tooffer best in class products along with utmost gfiority to customer care andafter sfles service. Customer Satisfaction ha s always been a crucial part of Company'sstrategy. For enhancing After Sales Services experience of our Customers we've embarkedupon several initiatives in this financial year.With an objective to serve our customerseven bettera nd faster respo ese we've wide ngd our detworka nd a dded another 40authorized service partners durirg this financiai year tOereby ex pandin g ourServicereach.

Another area where we have focused is in technology led digitalidation of some keyservice business-prooesses like implementation and adoption of technician's app which ishelping with faster resolution of customers' complaints digital non-voice optioh forcustomers to register and view status of their service request; WhatsApp integration forcustomer convenience; online renewal/pdfc hase ofAnnual Main tenance (AMC); rigitalpayments and h-AMC documentation.

Industry Outlook

The growth story for Indian Air Conditioning industry remains intact despite thenear-terms disruptions caused by the pandemic. There are several critical macro trendssuch as increasing disposable income growing demand loa residential real estate growingfocus on higherene^rgy efficiency stab le and reliab le supplyof ele ctricity etc. thatare expecied to gupport otrong growth o. the Room Air Conditioning industry.

While the pandemic has more severely disrupted the demand for air conditioning fromcommercial segments such as hospitality commercial real estate educational institutesretail stores shopping malls etc we expect positive outlook for commercial airconditioning from growing demand for robust medical and health care facilitiespharmacies cold rooms warehouses data centres etc.

Apart from the above several favourable Government initiatives such as Production LedIncentives (PLI) and Phased Manufacturing Plan (PMP) are expected to boost localmanufacturing of critical components for Indian Air Conditioning Industry in the comingyears.

Risks Concerns and Challenges

Seasonality Risk

The Company's core product businesses are seasonal in nature and hence any unfavourableand unforeseen weather events may impact the demand forecast. To mitigate this risk ofloss of opportunity or excess inventory the Company has put in place a demand planningprocess that allows it to stay nimble and react to seasonal variations.

Supply Chain and Raw Material price fluctuations

The Company in its endeavour to deliver world class products to its customers engagesin sourcing of key components and raw materials from reliable and high-quality sourcesacross the world. Unforeseen disruptions to global supply chains as well as unfavourablefluctuations in raw material prices may put strain on Company's profitability. To mitigatethis risk the Company has actively engaged in developing a network of local vendors anddual sourcing for key components.

High price elasticity of demand

The Company's core product businesses are subject to high price elasticity of demand.To mitigate this risk the Company engages in carrying the premium brand image by targetedmarketing activities and improve customer stickiness by driving customer loyalty throughproduct differentiation and high-end features.

Technology Changes

The Company's core product businesses operate in highly competitive marketplace with aneed to keep pace with technological changes and frequent upgrades. To mitigate this riskthe Company has put in place robust product development process that develops a 3-yearroadmap of new products and upgrades combining customer insights smart technologies andregulatory requirements.

Human Resources

The Company's Human Resources plays a strategic role in achieving organization goals.It's imperative to have a strategic plan to ensure the right people are hired and trainedfor the right job at the right time. We have ensured the Company's DNA is inculcated ineach employee by creating a safe diverse and inclusive work culture.

In these tougher times our human resource team has played a key role in reaching outto employees ensuring safety and general well-being of the workforce.

Human Capital

As on March 31 2021 the total strength of employees (Staff and Operators) of theCompany was 1462. The Company has a diverse talent force which brings varied ideas to thetable and improves the overall work culture. There has been a major emphasis on enhancingthe human capital and retaining the best talent. This year focus was on getting highlyskilled and top-notch talents to the team with varied skills which has given theorganization a competitive edge over others.

Diversity and Inclusion

Diversity and Inclusion has been the main mantra of the Company with equalopportunities given to all employees. A conscious effort has been made to improvediversity in the organization.

Company already has a significant workforce of female operators in its manufacturingsetup. This year gradually in all fields and functions female employees have been inductedto bring more inclusion. The Company believes in women empowerment and has a ‘Women'sInteraction Support & Engagement' Forum (WISE forum) and Internal Complaint Committee(ICC) in place to reach out to all female employees. International Women's Day 2021 wascelebrated on the theme of #ChoosetoChallenge. A plethora of activities were organized on‘International Women's Day' with gender sensitization training for all employees andfelicitating female operators.

COVID Response Team (CRT)

The Company is committed to provide a safe and healthy workplace for all employees andcustomers. With the opening up of all offices and markets an action plan was required tobe formulated to deal with various COVID-19 related scenarios that employees mayexperience. The COVID response team (CRT) which was set up by the company ensuredsystematic response and support at various levels for proper management of varioussituations an employee and his family encountered in relation to COVID-19.

Performance Management

Career Conversations and Talent Assessment process - Career Conversation is adiscussion between an employee and their manager that supports the employee in developingcareer goals as well as an action plan for achieving these goals while Talent Assessmentis a process to assess employee potential have a better grasp on their aspirations andabilities to fulfil future roles. All employees were encouraged to complete their careerprofiles in system which led to having organised and documented career conversations andtalent assessment process.

Talent Development

In this changing scenario it's essential to develop the competencies and skills of theexisting workforce. "TREND (Technical Skill RecastEvaluate NDevelop)"-JCH-INintends to builda cultureof "Co ntinuous Improvement" and "Zero Harm'"among its Plant Operators. To enhance the skill level the operators need to be assessedon their level of technical skills as per their deployment of current processes andmachines. To differentiate operators into different badges (i.e Expert Skilled Entrylevel). Technical assessments were conducted under the TREND program during August 2020and Septem bier 2020. A tota l of 637 p ermoeient operators were assessed under the TRENDprogram.

The Company values its workforce and considers them as the maincatalystforitsgrowth.The organizationbelieves in creating a motivated and committed talent force wherein equalcareer opportunities are being given to all and there is a continuous learning process.


The Coenpany has a well-defined and adequate internal control system com mensurate toth e size of its business and the nature of indnrtryit operates in. The Internal Controlsystem ensures safeguarding and protecting tine assets of the Company. Internal Audit hasbeen conducted by external Auditors at plant as well as at all the branches of the Companywithin the detailed scope definedand approvedbythe Audit Committee. The Internal Audit isplanned to substantiate and review the adequacy of internal controls and laid downprocedures & systems.

Observations otInlernal Auditors and the detailed plan of action are reviewed anddiscussed at the meetings of the Audit Committee on a periodicba sis.


At the Annual General Meeting held on July 25 2016 (AGM- 2016) Price Waterhouse&Co. Chartered Accountants LLP (Firm Registration No.304026E/E300009) were appointed asAuditors of the Company to hold office from the conclusion of AGM-2016 till theconclusionof the sixth consecutive Annual General Mseting (AGM-2021).

Pursuant to Section 139(2) og tiee Companies Act 2013 and subject to therecommendation of Audit Committee meeting and Board und approval of Sharnholderuat AGM-20U1 Puce Waterhouse & Co. Chartered Accountants LLP (Firm Registration No.304026E/E010009) is eligible to be re-appointed as Statutory Auditor's ofthe Companyforsecond term from cosclusion of1 AGM- 2021 till hlne conclusion of sixthAnnual General Meefing (AGM- 2026) (from FY 2021-22 tee FY 2025-26).

Audit Committee meeting and Board Meeting held on 25th May 2021 approvedre-appointment of Price Waterhouse & Co. Chartered AccounOants LLP (Firm RegistrationNo. 304026E/E300009) as Statutory Auditors of the Company for second term from conclusiopof AGM-2021 .ill the conclrsion of sixth Annual Genernl Meeting (AGM-2026) (ffom FY2021-22 to FY 2025-2611.

In that: regard Au ditors have paovided a consent letter as pier Section 739(1)(first proviso) read witi RuLs 4 ofthe Companies (Audit and Auditors) Ru les 20 14.

Directors' Responsibility Statement

Your Directors confirm that:

a) I n the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanations relating to material departures;

b) Such accounting policies selected and applied them consistently and made judgmentsand estimates that are reaaonable and prudent so as to give a true and fair view ofthestateof affairs of the Company at the end ofthe financial yearand ofthe profit of theCompany forthat period;

c) Properand dufficient care has been taken for the maintenance of odequateaccountingrecords in accordance with the provisions oj this Act for safeguarding the assets of theCompany and jor preventing and detecting fraud and other irregu larities;

d) Anaual accounts have been prepared on a going concern basis;

e) Internal financ ial controls which are to be followed by the Corcpanyhavobeenloiddownandthatsuch internalfinancial controls are adequate aod were operatingeffectively; and

f) Propersystems have been devised to ensure compliance with the pirovisions of ailapplicable laws and that such systems were adequate and operating effectively.

Change in Board of Directors

Duringthe year under review there was no chnnge in Board of Directors.

Performance Evaluation

TheBoardhascarriedout an annual evaluation of the performance of the Board AuditCommittee Stakeholder Relationship Committee Nomination and Remuneration CommitteeExecutive Committee VigilMechanism Committee and CSR Committee.

The Board hasa lsorn: riedoutannualevaluat ion oith eperfo rmsan ce ot individu al Director7i wh o were eva luated uo nsideri ng levels o2 their engagement and contributionsafeguarding the interests of the Company and its minority shareholders etc. Theperformance evaluation of the Chairman and the Non-Independent Directors were carried outby the Independent Directors at their separate meeting:

Details of Establishment of Vigil Mechanism

T.u Company has established a Vigil Mechanism process as an extension of the Company'sCode of Conduct whereby an employee director customer vendor or associate of theCompany can disclose his genuine doubt in good faith to any member of Vigil MechanismCommittee about unethical behavior actual or sus.ectfd fraud or violation of theCompany's Code of Conduct or sthiics p olicy so thsi a ppropriate action can be taken tosafeguard tUe interest efthe Companyi In exceptionsl cases a comulaint can beimported byacomplainant to a Chairpurson orAuditCommittee. This mechanism is overseen bythe Audit Committee.

Disclosure under section 197(12) of the Companies Act 2012 read with Rule 5(1) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014:

Name of Director and Key Managerial Personnel (KMP) Designation % increase in remuneration of director and KMP Ratio of the remuneration of director to the median remuneration of the employees of the Company for the financial year
Mr. Gurmeet Singh Chairman and Managing Director 22% 20: 1
Mr. Shinichi lizuka Director NA NA
Mr. Yoshikazu Ishihara Director NA NA
Mr. Ashok Balwani Independent Director NA 0.7 : 1
Mr. Mukesh Patel Independent Director NA 0.7 : 1
Ms. Indira Parikh Independent Director NA 0.7 : 1
Mr. Rishi Mehta Chief Financial Officer 18% 8.2 : 1
Mr. Parag Dave Company Secretary 1% 2.3 : 1

Comparison of remuneration against Company's performance

- Increase in remuneration of each KMP As mentioned in above table
- Increase in total remuneration of all KMP Total remuneration of KMP increased by 19%
Percentage increase in the median remuneration of employees in the financial year 7%
No. of permanent employees on the rolls of Company 1462
Average percentage increase already made in the salaries of employees other than the managerial personnel in the last financial year and - Average % increase in the salaries of employees other than the managerial personnel 7%
its comparison with the percentage increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration - Total remuneration of KMP increased by 19%

We hereby affirm that the remuneration given to all the employees Directors and KMP isas per the Remuneration policy of the Company.

Risk Management System

Company has implemented Enterprise Risk Management (ERM) system to identify assessmonitor and mitigate the various risks associated with the Company.

Risks are identified and then classified into different categories such as StrategicOperational Business risk and Risk related to act of god. Then score based on level andsignificance of risk is given and subsequently risk mitigation steps are taken.

Every quarter a statement identifying new risks and updation on pre-identified risksalong with their mitigation process or counter measures taken are reported before theAudit Committee.

Internal Financial Control

Internal Financial Control plan adopted by the Company is adequate with reference tothe Financial Statement.

1. Conduct of its business by adherence to Company's policies.

2. Safeguarding of assets.

3. The accuracy and completeness of the accounting records Prevention and detection offrauds and errors and timely preparation of reliable financial information.

Other Disclosures

1. Number of meetings of the Board: Four meetings of the Board of Directors of theCompany were held during the year under review on June 23 2020 August 07 2020 October29 2020 and February 09 2021.

2. Members of the Audit Committee are as under:

a. Mr. Mukesh Patel - Chairman

b. Mr. Ashok Balwani - Member

c. Ms. Indira Parikh - Member

3. The Company has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013.

4. Details of the CSR amount spent for the year 2020-21 is attached as Annexure-A.Details about the Policy on Corporate Social Responsibility (CSR) and projects to beimplemented by the Company for the year 2021-22 as required under Section 134(3)(o)135(2) read with Companies (Corporate Social Responsibility Policy) Rules 2014 has beenplaced on the website of the Company and Weblink is as under:

5. Formal Appointment and Evaluation Policy of the Board of Directors and SeniorManagement of the Company which has been formulated and recommended by Nomination andRemuneration Committee and adopted by Board of Directo rscove ringappoi ntment andremuneration including criteria for determining qualifications positive attributesindependence of a director and other matters provided under Section 178(3) has been placedon the websiteofthe Company and Weblink is as under:

6. No commission paid to Directors of the Company so no disclosure is required to bemade under Section 197(14).

7. The Draft Annual Return in form MGT-7 as provided under sub-Section (3) of section92 has been placed on the website of the Company and Weblink is as under:

8. No loan wac granted by the Company to any person to purchase or subscribe tofully paid-up shares of the Company.

9. Details ofths significant chinges (i.e. change of25% or more as compared to theimmediately previous financial year) in key financial latios along with detailedexplanations therefor including:

FinancialRatios 2020-21 2019-20* Change %
(i) DebtorsTurnover 6.35 6.25 1.56%
(ii) InventoryTurnover* 1.44 2.18 -33.84%
(iii) Interest Coverage Ratio* 18.33 104.87 -82.52%
(iv) CurrentRatio 1.46 1.39 5.26%
(v) DebtEquipyRatio* 0:1 0.23 : 1 -
(vi) Operating Profit Margin (%) 7.61% 8.21% -7.25%
(vii) Net Profit Margin (%)* 2.01% 3.80% -47.11%
(viii) Return on Net Worth* 4.59% 12.f3% -62.20%


- Figures of LY regrouped.

- Inventory turnover ra tio is lower due to decline in sales in FY 202021 due toCovid19.

- Impact in Interest coverage ratio Net Profit Margin and Return on NetWortfi isdue tolowet profitin FY 2020-21 due to Covid19.

- Debt Equity Ratio has improved compared to fast year dee to Zero Debt as at the endof FY 2020-21.

10. Secretarial Audit Report: Pursuant to the provisions of Section 204 of theCompanies /let 2013 the Report of the Secretarial Auditors ii nnnexoC as Annexure Bf

11. There is no material fraud reported by Auditors underSection 143(12) of theCompanies Act 2013 during the year under review. One fraud case was reported by theCompany to Audit Committee and Auditors in which four employees and one service providerwere found to be involved. Company initiated necessary legal action and consequently wasable to recover the defranded amount.

12. Particulars of loans investments or guarantees under section 186: Company has notgranted any loans secured or unsecured to companies firms or other parties coveredunder Section 186. Company has not made any investment in securities of other BodyCorporate. Company has given guarantee of ' 150 Million against the credit facilitiesavailed by dealers.

13. There is no subsidiary associate and joint venture Company so no disclosure isrequired on the performance and financial position of each of the subsidiaries associatesand joint venture companies in Form AOC 1.

14. There is no Company which has become or ceased to be its subsidiary joint ventureor associate Company during the year.

15. During the year Company has not accepted deposits covered underChapterV.

16. There is no qualification reservation or adverse remark or disdaimer mode by theAuditor-; in their report.

17. There is no qualification reservation or adverse remark or disclaimer ma de byte Company Secretfries in ractice in their- Secretarial AuOit Report.

18. There is no significant and material order passed by the regulators or courtsortritrunals impacting the going concern stators and Comp any's operations in future.

19 Details; of1 YompliiY-s relating to aexual harassment during theyearunder review:

Number of complaints pendingas on 31st March 2020 : 0

Number of complaints receivedduring the year : 2

Numberofcomplaintsdisposedofduringthefinancialyear : 1

Number of complaints pendingas on 31st March 2021 : 1

20. Information pursuant to Sect ion 134(3)(m) erf the Companios Act 2013 read withRule 8(3) of the Companies (Accnunts) Rules2014relating to Conservation of ene rgytechnology absorption and foreign exchange earnings and outgo is givenasAnnexureCtothisreport.

21. Th e information as per Rule 5(2) of rhe Companiks (Appointment and hemuner9tionof Man ageriol Rrcsormel) [Rules 2094 (‘Rplets') forms part ofthis Report. Howeveras per second proviso to Section 136(1) of the Act and second proviso of Rule 5(3) of theRules the Report and Financial Statemenhs are being sent to tht Members of the Companyexcluding the statement of particulars of employees under Rule 5(2) of the Rules. AnyMember interested in obtaining a copy of the snid statement may write to the CompanySecretary at the Registered Office of the Company.

22. Ranted party transactions under Section 188(1): All transactions entered by theCompany with related parties durirg the year under review were in ordinary course ofbusiness and on an arm's length basis. There were no material Related Party Transactions(RPTs) undertaken by the Company duking the year that require shareholders' approval underSection 188 of the Act or under Regulation 23(4) of the SEBI (OistingObligationsandDisclosure Requirements) Regulations 2015. TherePore the disolosure in Form AOC-2 underSection 134)3)fh) ohtOe Comparers Att 2013 is notapplicable.

Policy on dealing with Related Party Transactions has been disclosed on Company'swebsite and a weblink is as under:

23. Revision in Accounts or Board‘s Report: There are no revisions made in theAccounts or Board‘s Report.

24. Issue of Equity Shares with differential rights: There was no Equity Share issuedwith differential voting rights during the year under review.

25. Issue of Sweat Equity Shares: There was no issue of Sweat Equity Share during theyear under review.

26. Employee Stock Option and Employee Stock Purchase Schemes: No Employee Stock Optionand Employee Stock Purchase Schemes were launched by the Company during the year underreview.

27. Disclosure under Regulation 34(3) read with Schedule V of the SEBI (ListingObligation and Disclosure Requirement) Regulations 2015:

a. The Equity Shares of the Company are not delisted or suspended during the year underreview.

b. Equity Shares of the Company are listed on the BSE Limited and the National StockExchange of India Limited.

c. Annual listing fees have been paid to both the stock exchanges mentioned above.

28. Dividend Distribution Policy has been disclosed on Company's website and a weblinkis as under:

29. Company has complied with Secretarial Standards applicable to Company.


Your Directors thank all Customers Suppliers Investors Bankers and otherstakeholders of the Company for their co-operation and continued support during the year.We look forward to their continued support in the future also.

We wish to place on record our sincere appreciation for the excellent work put in bythe employees of the Company at all levels.

For and on behalf of the Board of Directors
Place : Delhi Gurmeet Singh
Date : May 25 2021 Chairman & Managing Director