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M M Forgings Ltd.

BSE: 522241 Sector: Engineering
NSE: MMFL ISIN Code: INE227C01017
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VOLUME 10219
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P/E 27.44
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OPEN 877.00
CLOSE 888.50
VOLUME 10219
52-Week high 954.00
52-Week low 301.00
P/E 27.44
Mkt Cap.(Rs cr) 2,078
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

M M Forgings Ltd. (MMFL) - Director Report

Company director report

1. FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2021

(Rs. in Lakhs)
2020-21 2019-20
1.1. Forging sales 71146.74 71090.46
1.2 Profit before exceptional items/extraordinary items and Tax 5493.05 5741.88
1.3 Exceptional/Extraordinary Items 0.03 0.44
1.4 Profit Before Tax 5493.08 5742.32
1.5 Tax
For current year 725.00 818.12
Relating to previous years 0.00 1.86
Mat Credit Entitlement / adjusted 0.00 (818.12)
Deferred Tax 107.36 1116.70
832.36 1118.56
Profit after Tax 4660.72 4623.76
2. DIVIDEND AND FINANCIAL RESULTS (Rs. in Lakhs)
2.1 Profit after Tax 4660.72 4623.76
2.2 Balance in P & L Account 115.54 309.74
2.3 Profit available for appropriation 4776.28 4933.50
2.4 Transfer to General Reserve 3200.00 3400.00
2.5 Interim Dividend paid 0.00 1417.93
2.6 Proposed Dividend 1455.09 0.00
2.7 Balance carried forward 121.17 115.56

The Directors declared 50% dividend ( ' 5/ per share ) of face value of' 10 / each. in their meeting held on 21 June 2021.

The Directors do not recommend any final dividend for the year 2020-21.

3. SHARE CAPITAL

There was no change in the share capital during the year.

4. HIGHLIGHTS OF THE COMPANY'S OPERATIONAL PERFORMANCE

4.1 The Company has overall Revenue which is above ' 700 crores.

4.2 The Company's PBT is ' 55 crores.

4.3 The Company's PAT stands at ' 46 crores.

4.4 The Company continues to be a net foreign exchange earner. The netforeign exchange earnings during the current year were ' 338.66 crores.

4.5 The Company has retained its ISO 9001 and TS 16949 Certificationfor its Quality Management.

4.6 The exports sales is ' 354.89 Crores and the domestic sales standsat ' 356.58 Crores.

4.7. Although the pandemic affected the performance the Company hasretained 50% dividend for the year.

5. INDIAN ACCOUNTING STANDARD ( IND AS) IFRS CONVERGED STANDARDS

Pursuant to the notification of the Companies ( Indian AccountingStandard) Rules 2015 by the Ministry of Corporate Affairs ( MCA) on 16 February 2015 thecompany has adopted Indian Accounting standards ( IND AS ).

6. EXPENSES MADE MORE THAN 10 % OF THE TURNOVER

Raw Material - ' 331.52 Crores (44.37 %)
Personnel - ' 76.49 Crores (10.24 %)

7. MANAGEMENT DISCUSSION AND ANALYSIS :

Economic Overview - Global

It is one year since COVID-19 was declared as a global pandemic a yearof tremendous loss of lives and livelihoods. Adaptation to life with pandemic inducedrestriction has enabled the global economy to do reasonably well despite overall subduedmobility leading to a stronger-than-anticipated rebound on average across regions.

2020 2021* 2022*
World output -3.3 6.0 4.4
Advanced economies -4.7 5.1 3.6
Emerging Markets -2.2 6.7 5.0

*Projection Source: World economic outlook IMF

After an estimated contraction of 3.3% in 2020 the global economy isprojected to grow 6% in 2021 moderating to 4.4% in 2022. The contraction for 2020 is 110basis points lesser than the projected in October 2020 World Economic Outlook reflectinghigher than the expected growth outruns in the second half of 2020 for most regions afterlockdowns were eased.

The projections for 2021 and 2022 are 0.8% points stronger than in theprevious forecast reflecting additional fiscal support in a few large economies and theanticipated vaccine-powered recovery in the second half of the year. This pace reflectscontinued adaptation of all sectors of the economy to the challenging health situation.

Beyond 2022 global growth is projected to moderate to 3.3% in themedium term. The near-term outlook for global manufacturing remains positive as evidencedin the February global manufacturing purchasing managers' index indicators whichpoint to a continuing expansion though at a slower pace. While the near term recoverycould be tempered by the resurgence of COVID-19 cases in several major economiesevidenced from social distancing measures in the late 2020 and early 2021 in Europe andUnited Kingdom suggests a relatively limited impact on manufacturing activity.

After the near-term widespread availability of vaccines andnear-normalization of economic activity together with continued policy support shouldhelp fuel the manufacturing recovery. Further normalization of global capital expenditurewill be an important source of demand for manufacturing.

Management Discussion and Analysis

Economic Overview - India

India is one of the few countries which went into total lockdown whenCOVID-19 was declared as a pandemic in end March 2020. This affected the GDP of the nationas a whole from April through September 2020.

The phased un-locking of the economy with government interventioneased manufacturing and supply chains. Though the growth is expected to be muted throughthe year there are definite signs of the economy starting to revive.

The second wave of the pandemic has pulled down the momentum and thecurrent outlook for the year is definitely better than the previous year. The recoverycycle is expected to pick up from the second of half of FY21-22 and reach stable levels inthe year FY22-23 and may moderate from FY23-24 onwards. The IMF has upwardly revised thegrowth forecast to 9.5% for FY22 and 8.5% for FY23.

India's GDP which shrink from $2.87 trillion in FY20 to $2.66trillion in the following year is estimated to reach around $4 trillion in FY25.

The second half of the COVID-struck financial year FY21 saw anunprecedented rally in domestic steel prices which seems unstoppable even in the currentfiscal FY22. Steel prices have increased 15% higher yoy.

Market segments outlook: Key segment analysis: Commercial Vehicles (CV)

The CV segment plays a significant role of MMF with sales of 75%.Passenger car segment constitutes 18% and others 7%.

CV segment is poised to witness a robust turnaround domestically aswell as in North America and Europe. US class 8 truck sales recorded significant numbersin Calendar Year 2018 (325000) and 2019 (345000). This led to a dismal sales in 2020with the onset of the pandemic. In 2021 the market is expected to be back to 250000levels.

European market has witnessed consistent demand through the years inexcess of 300000+ HCV for the last 3 calendar years. This is expected to perform at theselevels till 2025 with overall growth forecast of the economies at European region ataround 4.4% in 2021 moderating at 3.8% for 2022.

In India MHCV production which peaked in FY19 at 444000 vehicles hastapered to 234000 vehicles in FY20 and 181000 in FY21. The outlook going into FY22 ismuted in the first quarter with indications of demand pick up during the second half ofFY22. The near-term outlook though is positive due to the pent up demand which is due tolower sales in the previous 8 quarters. With forecast of economy growth near doubledigits we expect demand to stabilize in 2nd half of FY22 with significantgrowth in FY23.

Currency movement: [USD vs INR]

INR currently at ' 74.50 vs USD is expected to remain consistentthrough 2022 at the same levels.

Management Discussion and Analysis M M FORGINGS - Achievements in FY21

Despite the second wave of pandemic the following were achieved duringFY21

1. Domestic sales : ' 357 crore
2. Export sales : ' 355 crore
3. Total sales : ' 712 crore
4. Overall sales around : ' 747 crore
5. Production tonnage : 48000 Tons

6. Changes in steel prices which are in line with international marketsare generally being passed on to customers as is the industry practice.

7. We are focusing on capacity utilization to take advantage of theproduction capacities created in the last 4 years.

8. Key financial ratios :
Debtors Turnover : 138 days
Inventory Turnover : 4.04
Interest Coverage Ratio : 3.88
Current Ratio : 1.79
Debt Equity Ratio : 0.76
Operating Profit Margin (%) : 7.35%
Net Profit Margin (%) : 6.24%

As highlighted in the Directors' Report Return on Net Worth is8.96% and Return on Capital Employed is 10.74%. Total Outside Liabilities to Net Worthstands at 1.45.

Human Resources and Industrial Relations

1. Our company continues to focus on the development of its humanresources to improve its performance.

2. As on 31st Mar 2021 the company currently hasapproximately 3968 employees. It is their invaluable contribution that has primarilyresulted in our company's position of strength in the industry.

3. Focus on a safe working atmosphere constantly evolving systems forrecognition and reward consistent communication and imparting skills and training - allthese focused on meeting customer needs characterize the HR development of the Company.

4. Every year each plant of the Company celebrates‘Founder's Day' in a family atmosphere with all employees and theirhousehold members. Fortunately these were completed well before the onset of Covid in endMarch 2020.

Health Safety and Environment

1. The Company follows a policy of zero tolerance towards accidents.Wherever possible visible controls and fail-safe systems are provided to ensureprevention of accidents. Regular communication periodic reviews of practices and trainingplay a vital role in maintaining safety standards.

2. The Company ensures compliance with all pollution controlregulations. Adequate pollution control equipment's have been installed to treateffluents and to control air pollution.

Risk Management

1. The Company is a leading manufacturer of automotive components.Automotive industry is subjected to cyclical variations in performance and is verysensitive to policy changes. The market is very competitive. Prices of raw materialschange based on supply and demand. Margins remain under constant pressure. Any steepreduction in off-take exposes the Company to high fixed costs.

2. A considerable portion of the customers of the Company are situatedoutside of India. Hence demand for the Company's product is subject to the health ofthe global economy.

3. The Company has spread its risks by increasing the geographic spreadof its customer base. The Company proposes to improve capacity utilization in its existingfacilities. Working capital management will receive high priority.

4. Risk Management Committee (RMC) has been formed w.e.f 21Jun21.

5. RMC shall meet twice a year.

6. The responsibilities of RMC includes formulating risk managementpolicy implementation of the policy monitor evaluate risks device appropriatemethodology processes and systems.

M M FORGINGS - forging ahead with Manufacturing Excellence

Our goals in the coming months:

? Focus on improving sales in keeping with market conditions.

? Utilizing the production capacity of 120000 Tons.

? Focus on cost reduction continuously - particularly on reducingenergy consumption and improving productivity.

? Enhance IT systems with the continued development of the ERP systemin place.

? Continue the evolution into green sources of energy in the comingmonths.

? Reduce the impact on the environment.

Sources :

1. IMF World Economic Output

2. The Economist

3. SIAM data

8. TRANSFER TO RESERVE

Transfer to General Reserve - ' 32 Crores

9. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

The company has made advance to the tune of ' 82.98 Crores to itsSubsidiary Company DVS Industries Private Limited repayable at prevailing rates.

The details of the investments made by the company are given in thenotes to the financial statements.

10. DIRECTORS

There has been no change in the constitution of Board of Directorsduring the year under review - the structure of the Board remains the same.

11. RETIRE BY ROTATION

Shri. Vidyashankar Krishnan will retire by rotation and being eligiblehas offered himself for re-appointment.

12. DETAILS OF DIRECTORS OR KMP RESIGNED DURING THE YEAR - NIL

13. BOARD AND COMMITTEE MEETING DATES

Details are provided in Annexure III of this Report.

14. DETAILS OF RECOMMENDATIONS OF AUDIT COMMITTEE WHICH WERE NOTACCEPTED BY THE BOARD ALONG WITH REASONS - None

13. RISK MANAGEMENT

Your Company has implemented a mechanism for risk management and hasformulated a Risk Management Policy. The Policy provides for identification of risks andmitigation measures. The Audit Committee is informed on the risk assessment andminimizations mechanism adopted by the Company.

The Company has formed Risk Management Committee which consist ofmajority of Board Members.

14. RELATED PARTY TRANSACTION

The Company has formulated a policy on related party transactions andthe same is uploaded on the Company's website

https://www.mmforgings.com/uploads/policies/Policy_on_Related_Party_Transactions1.pdfThere were no Related Party transactions during the financial year 2020-21 as per Section188 of the Companies Act 2013 and the Rules framed thereunder. There are no"Material" contracts or arrangement or transactions at arm's length basis.

There are no materially significant Related Party transactions made bythe Company with Promoters Directors and Key Managerial Personnel which may have apotential conflict with the interest of the Company at large.

For related party transactions as per Accounting Standards referAnnexure 3 under the head ‘Related Party Disclosures'

15. CORPORATE SOCIAL RESPONSIBILITY

A Board Level Committee of CSR has been constituted and the Board hasadopted a CSR Policy as recommended by the Committee. The thrust areas of CSR Policy areEradicating Hunger and Poverty Education Combating Diseases and Social BusinessProjects.

Amount to be spent under CSR for F21 - ' 165.27 lakhs
Amount spent in F21 - ' 166.03 lakhs
Excess spent for F21 - ' 0.76 lakhs

Annual report on CSR has been provided in Annexure III of this Report.

16. POLICY ON DIRECTORS'APPOINTMENT AND REMUNERATION

In terms of provision of section 178 of the Companies Act 2013 readwith Rules prescribed a policy for the Directors KMP and other employees has beenadopted by the Board of Directors of the Company which analyzes the criteria fordetermining qualifications positive attributes and independence of a Director.

The said Policy is provided in Company's website link

www.mmforgings.com/uploads/policies/Nomination and Remuneration Policy( amended).pdf

17. PARTICULARS OF EMPLOYEES

The information required under the rules prescribed has been given inthe annexure appended hereto and forms part of this Report.

18. PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES :

18.1 The ratio of remuneration of each Director to the medianremuneration of the employees: Name Ratio

Shri Srinivasan. N 0.00 : 1
Shri Vaidyanathan. V 2.40 : 1
Shri A.Gopalakrishnan 1.80 : 1
Smt Kavitha Vijay 1.80 : 1
Shri Vidyashankar Krishnan 179.22 : 1
Shri Venkataramanan K 178.87 : 1

For this purpose sitting fees paid to the Directors have not beenconsidered as remuneration.

18.2 Percentage increase in remuneration of each Director KMP in thefinancial year:

Name % Increase
Shri Srinivasan N 91.67%
Shri Vaidyanathan V -1.56%
Shri Gopalakrishnan A 9.56%
Smt Kavitha Vijay 3.55%
Shri Vidyashankar Krishnan -3.40%
Shri K. Venkatramanan -3.52%
Smt J.Sumathi -9.76%
Shri R. Venkatakrishnan -3.09%

18.3 Percentage increase in median remuneration of employees is 64.60%in the financial year 2020-21.

18.4 The number of permanent employees on the rolls of Company : 2203.

18.5 Explanation of relationship between average increase inremuneration and company performance : PAT - ( last year) - ' 4623.76 Lakhs; PAT - ( thisyear) - ' 4660.72 Lakhs.

Increase 0.80% against which the average increase in remuneration is -30.5%.

18.6 Comparison of remuneration of each KMP against performance ofcompany

Name Designation CTC in Rs. % Decrease PAT Rs. in Lakhs % in PAT
Vidyashankar Krishnan CEO 29861556 48.08
J.Sumathi Company Secretary 991719 12.62 4660.72 0.80
R.Venkatakrishnan CFO 1542284 3.69

18.7 Variation in market cap/net worth of company:

Date Paid up Capital (Shares) Closing market Price per share in Rs. EPS PE Ratio Market Capitalisation Rs. in Crores
31.03.2020 24140800 166.00 19.15 8.67 400.74
31.03.2021 24140800 495.00 19.31 25.63 1194.97

18.8 Justification of increase in managerial remuneration with that ofincrease in remuneration of other employees.

Average Increase in Remuneration for employees other than Directors andKMP is - 30.50%. Average Increase in Remuneration for KMP and Senior Management is -3.50%.

18.9 Key parameters for any variable remuneration of Directors:

Directors are paid Commission. However the overall managerialremuneration payable is subject to the provisions of the Companies Act 2013.

18.10 Ratio of remuneration of highest paid Director to other employeeswho gets remuneration more than highest paid Director - NOT APPLICABLE.

18.11 Is remuneration as per remuneration policy of the Company: YES.

19 SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATIONS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:

Not applicable.

20 MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY WHICH HAS OCCURRED SINCE 31.03.2020 TILL THE DATE OF THE REPORT:

Not applicable.

21 DIRECTORS RESPONSIBILITY STATEMENT:

The Directors have fulfilled their responsibility for the preparationof the accompanying financial statements by taking all reasonable steps to ensure that -

21.1 In the preparation of the annual accounts the applicableaccounting standards have been followed along with proper explanation relating tomaterial departures;

21.2 The Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the company as at 31 March 2021and of the profit or loss of the company for that period ended on that date;

21.3 The Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act for safeguarding the assets of the company and for preventing and detectingfraud and other irregularities;

21.4 The Directors had prepared the annual accounts on a going concernbasis.

21.5 The Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively.

21.6 The Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

22 ESTABLISHMENT OF VIGIL MECHANISM

The Company has in place a vigil mechanism pursuant to which a WhistleBlower Policy has been in vogue. The Whistle Blower Policy covering all employees andDirectors is hosted on the Company's web

https://www.mmforgings.com/uploads/policies/Whistle Blower Policy2.pdf

A high level Committee has been constituted which looks into thecomplaints raised. The Committee reports to the Audit Committee and the Board.

23 ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Company had laid down Internal Financial Controls and such internalfinancial controls are adequate with reference to the Financial Statements and wereoperating effectively.

It also ensures the orderly efficient conduct of its businessincluding adherence to Company's policies the safe guarding of its assets the preventionand detention of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information during the year suchcontrols were tested and bi-material weakness in the operations were observed.

24 CORPORATE GOVERNANCE REPORT

The guidelines evolved by SEBI were applicable to the company. Thecompany is committed to ethical management and excellence in performance. Details areprovided in Annexure III.

25 ANNUAL RETURN

In accordance with the Companies Act 2013 the annual return in theprescribed format is available at https://www.mmforgings.com/uploads/general share/AnnualReturn4.pdf

26 A STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL EVALUATIONHAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES ANDINDIVIDUAL DIRECTORS;

1. Nomination and Remuneration Committee of the Board had prepared andsent through its Chairman draft parameterized feed back forms for evaluation of the BoardIndependent Directors and Chairman.

2. Independent Directors at a meeting without anyone from thenon-independent Directors and management considered/evaluated the Board's performanceperformance of the Chairman and other non-independent Directors. Their meeting was held on17 November 2020.

3. The Board subsequently evaluated performance of the Board theCommittees and Independent Directors (without participation of the relevant Director)

4. 1. Observations of board evaluation carried out for the year: Themain inputs received from the Directors covering various aspects of the Boardsfunctioning was with regard to adequacy of the composition of the Board and itsCommittees Board culture execution and performance of specific duties obligations andgovernance.

A separate exercise was carried out to evaluate the performance ofindividual Directors including the Chairman of the Board who were evaluated on parameterssuch as level of engagement and contribution independence of judgement safeguarding theinterest of the Company and its minority shareholders. The performance evaluation of theIndependent Directors was carried out by the entire Board. The performance evaluation ofthe Non Independent Directors and Top Managerial Personnel were carried out by theIndependent Directors. The Directors expressed their satisfaction with the evaluationprocess.

2. Previous year's observations and actions taken - NIL

3. Proposed actions based on current year observations - NIL

27 FAMILIARISATION OF PROGRAMME ARRANGED FOR INDEPENDENT DIRECTORS

• M M Forgings Limited has put in place a system to familiarisethe independent Directors about the company its products business and the on-goingevents relating to the company.

• Independent Directors of the Company are made aware of theirrole responsibilities and liabilities at the time of their appointment / re-appointment through a formal letter of appointment which also stipulates various terms and conditionsof their engagement.

• They are also made aware of Company's Board and Board Committeeframework policies and procedures.

• As part of Board Discussions presentations on business of theCompany are made to the Directors from time to time.

• Important announcements and press releases for various newsrelated to the company are forwarded to the Directors from time to time.

• Each member of the Board including the independent Directorshave been given complete access to any information relating to the Company.

• You may also view the company websitehttps://www.mmforgings.com/uploads/Familiarisation programme/Familiarization programme.pdf

28 AUDITORS:

G R N K & Co. Chartered Accountants (FRN 016847S) have beenappointed as the Statutory Auditors of the Company in the 71st Annual General Meeting heldon 26 September 2017. They will hold office for a period of five years.

There is no audit qualification reservation or adverse remark for theyear under review.

29. SECRETARIAL AUDIT REPORT

Pursuant to Section 204 of the Companies Act 2013 and Rulesthereunder the Company has appointed V.Shankar Practicing Company Secretary (C.P. No.12974) as the Secretarial Auditor for the financial year 2021-22.

30. COST AUDITOR

Pursuant to the provisions contained in Rule 14 of the Companies (Audit and Auditors) Rules 2014 Shri. S. Hariharan ( CP No. 20864) has been appointed asCost Auditor for the financial year 2021-22

31. SUBSIDIARY COMPANY - DVS INDUSTRIES PRIVATE LIMITED

Incorporated in 1992 DVS Industries (with the paid-up share capitalcurrently being ' 15929900 and turn-over of ' 56.94 Crores in FY 2021) is a North Indiabased player with its manufacturing unit located in Pantnagar Uttarakhand. DVS Industriesis well equipped with robust manufacturing processes precision equipment in house toolroom inspection facilities well trained personnel etc.

32 EXPLANATION TO AUDITOR'S REMARK

There are no qualifications reservations or adverse remarks ordisclaimers made by the Statutory Auditors and Company Secretary in practice in theirreports respectively. The Statutory Auditors have not reported any incident of fraud tothe Audit Committee of the Company in the year under review.

33 SAFETY

Employees have been encouraged to adhere to safety in all theiractivities in and out of the Company premises. Safety training at all levels have beenprovided by the Company.

34 DEPOSITS:

The Company does not have any deposits. Fresh deposits are not beingaccepted by the Company.

35 ENERGY TECHNOLOGY & FOREIGN EXCHANGE:

Disclosures as per requirements of Section 134 (3) of the CompaniesAct 2013 read with the Companies (Accounts)) Rules 2014 with respect to EnergyConservation Technology Absorption Research & Development and Foreign ExchangeEarnings / Outgo are given in Annexure

36 DECLARATION GIVEN BY INDEPENDENT DIRECTORS:

All the Independent Directors have given the necessary declarations tothe Company as required under sub section (6) of Section 149 of the Companies Act 2013.

37 PROHIBITION AND REDRESSAL OF SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE

During the year under review pursuant to the new legislation‘Prevention Prohibition and Redressal of Sexual Harassment of Women at WorkplaceAct 2013' introduced by the Government of India which came into effect from 09 December2013 the Company has framed a Policy on Prevention of Sexual Harassment at Workplace.There were no cases reported during the year under review under the said Policy.

Disclosures in relation to the Sexual Harassment of Women in work place:

No. of complaints filed during the year - 0

No of complaints disposed of during the year - 0

No of complaints pending as on the end of the financial year - 0

The company has complied with the provisions relating to theconstitution of Internal Complaints Committee under the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.

38 COVID 19

• The Company's operations were hit substantially for the first 2Quarters due to intermittent lock down restrictions.

• Gradually the lockdown was lifted and manufacturing operationswere established through well-rehearsed safety protocols during 3rd and 4thQuarter.

• Corporate Office was shut down during lock down but theCompany adopted Work From Home policy during the entire duration of the lockdown.

• The Company is following Covid-19 guidelines rules andregulations issued by Central and State governments.

39. BUSINESS RESPONSIBILITY REPORT

The Report is attached to this Report. ( Annexure 5 )

40 INDEPENDENT DIRECTOR SELF ASSESSMENT TEST

• Shri. N. Srinivasan and Shri. V. Vaidyanathan are exempted fromundergoing self assessment test.

• Shri A. Gopalakrishnan and Smt. Kavitha Vijay have passed theself assessment test conducted by the Ministry of Corporate Affairs.

41 ACKNOWLEDGEMENT:

Your Directors would like to express their gratitude for thecooperation and continued assistance received from Citibank N.A. DBS bank HDFC BankState Bank of India ICICI Bank and Federal Bank

Your Directors wish to record their appreciation for the exemplaryservices rendered by the employees of the company. The results achieved would not havebeen possible but for their outstanding effort.

Above all the Directors thank the shareholders for their continuedconfidence in the management.

.