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Suprajit Engineering Ltd.

BSE: 532509 Sector: Auto
NSE: SUPRAJIT ISIN Code: INE399C01030
BSE 12:27 | 16 Aug 329.30 1.25
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NSE 12:14 | 16 Aug 329.10
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OPEN

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OPEN 339.00
PREVIOUS CLOSE 328.05
VOLUME 15589
52-Week high 478.00
52-Week low 272.25
P/E 32.41
Mkt Cap.(Rs cr) 4,558
Buy Price 328.85
Buy Qty 17.00
Sell Price 329.40
Sell Qty 7.00
OPEN 339.00
CLOSE 328.05
VOLUME 15589
52-Week high 478.00
52-Week low 272.25
P/E 32.41
Mkt Cap.(Rs cr) 4,558
Buy Price 328.85
Buy Qty 17.00
Sell Price 329.40
Sell Qty 7.00

Suprajit Engineering Ltd. (SUPRAJIT) - Director Report

Company director report

Your Directors have pleasure in presenting their Thirty Sixth (36th)Annual Report and the Audited Financial Statements for the financial year ended March312021 together with the Independent Auditor's Report.

STANDALONE AND CONSOLIDATED FINANCIAL RESULTS:

Rs. in Million

Particulars Standalone Consolidated
2020-21 2019-20 2020-21 2019-20
Total Income 11484.07 10962.30 16744.47 15852.16
Profit before exceptional items and tax expense 1811.06 1757.88 1943.38 1603.01
Less: Exceptional items - 259.92 - 274.38
Profit before tax expense 1811.06 1497.96 1943.38 1328.63
Less: Provision for taxation 416.89 337.51 501.33 362.33
Profit after tax before prior period adjustment 1394.17 1160.45 1442.05 966.30
Current Tax relation to prior year 14.96 (72.87) 14.95 (73.35)
Profit after tax 1379.21 1233.32 1427.10 1039.65
Add: Surplus from last year 1803.03 1748.75 1739.94 1897.30
Add: Other Comprehensive income 0.35 (2.90) 0.62 (2.47)
Add: Net change in fair value of Hedging instrument - - 5.53 (6.13)
Profit available for appropriation after adjustments prior period taxes 3182.59 2979.17 3173.19 2928.35
APPROPRIATIONS:
1. First interim dividend [Rs. 0.75 (March 312020 Rs. 0.75) per share] 104.90 104.90 104.90 104.90
2. Second Interim dividend [Nil (March 312020 Rs. 1.00) per share] - 139.87 - 139.87
3. Final dividend [March 312020: Rs. Nil (March 312019 : Rs. 0.85) per share] - 118.89 - 118.89
4. Tax on Dividend - 62.48 - 74.75
5. Transfer to General Reserve 750.00 750.00 750.00 750.00
6. Balance carried to Balance Sheet 2327.69 1803.03 2318.29 1739.94

TRANSFER TO RESERVES:

During the financial year the Company has transferred an amount of Rs.750 Million to General Reserves.

DIVIDEND:

An Interim Dividend of Rs. 0.75 per Share of Rs. 1/ -each (75%) wasdeclared and paid during the financial year under report. After careful review yourDirectors have recommended a final dividend of Rs. 1.00 (100%) subject to necessaryapproval by the shareholders.

Total dividend outgo during the year is thus Rs. 243.28 million(without Tax) as against Rs. 321.24 million (with Tax) during the year 2019-20.

PARTICULARS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED DURINGTHE FINACIAL YEAR ENDED MARCH 31 2021:

During the financial year Mr. Akhilesh Rai and Mr. Harish HassanVisweswara were appointed as Directors of the Company.

Except this there were no other changes in the Board of Directors ofthe Company.

The composition of the Board of Directors of the Company as on March312021 is as below:

1 Mr. Kula Ajith Kumar Rai - Executive Chairman
2 Mr. Mohan N.S - Managing Director & Group CEO
3 Mr. Akhilesh Rai - Director & Chief Strategy Officer
4 Mr. Ian Williamson - Independent Director
5 Mr. Suresh Shetty - Independent Director
6 Mrs. Supriya A. Rai - Non Executive Director
7 Mr. M. Lakshminarayan - Independent Director
8 Mr. Harish Hassan Visweswara- Independent Director
9 Mrs. Bharati Rao - Independent Director

SHARE CAPITAL:

During the financial year there were no changes in the AuthorizedShare Capital and Paid up Share Capital of the Company.

As on March 31 2021 the Authorized Share Capital of the Company wasRs. 850000000/- (Rupees Eight fifty Million) and the Paid up Share Capital was Rs.139872473/- (Rupees One Thirty Nine Million Eight Hundred Seventy Two Thousand FourHundred Seventy Three Only).

BUY-BACK OF SHARES:

The Board of Directors approved the proposal of buyback of 1500000equity shares of Rs. 1/- @ Rs. 320 per equity share aggregating to Rs. 480000000/-during February 2021 and completed the entire buyback process by way of extinguishment ofshares in the month of May 2021 after making payment of consideration with necessarycompliances of applicable SEBI guidelines. Post buy-back the paid up share capital of theCompany reduced to Rs. 138372473/-(Rupees One Thirty Eight Million Three Hundred SeventyTwo Thousand Four Hundred Seventy Three Only).

DISCLOSURE REGARDING ISSUE OF EQUITY SHARES WITH DIFFERENTIAL VOTINGRIGHTS AND / OR ISSUE OF SWEAT EQUITY SHARES:

During the financial year under review the Company has not issued anyShares with Differential voting Rights and / or any Sweat Equity Shares.

CHANGE IN NATURE OF BUSINESS:

The Company is engaged in the business of manufacturing and selling ofautomotive and other components and that are considered as single segment. There were nochanges in the nature of business during the financial year.

OPERATIONS - MANAGEMENT DISCUSSION AND ANALYSIS:

The Indian Automotive industry recorded a negative growth of 13.50%during the year. Your Company on a standalone basis recorded an operational income ofRs. 11122.75 Million during the financial year 2020-21 as against Rs. 10709.46 Millionduring the financial year 2019-20. The Profit for the year was Rs. 1379.21 Million duringthe financial year 2020-21 as against the Profit of Rs. 1233.32 Million during thefinancial year 2019-20. The consolidated group operational income was Rs. 16408.55Million for the financial year 2020-21 as against Rs. 15628.32 Million for the financialyear 2019-20. The consolidated Profit for the year was Rs. 1427.10 Million during thefinancial year 2020-21 as against Rs. 1039.65 Million during the financial year 2019-20.

DOMESTIC CABLE DIVISION (DCD):

The Greenfield new plant at Narsapura had first full year ofsatisfactory performance. The aftermarket business had a robust growth along with steadyperformance in the OEM segment. The overall performance has been ahead of the industry.

PHOENIX LAMPS DIVISION (PLD):

The overall performance has been satisfactory with aftermarketoutperforming ahead of other segments. The Karnai (Chennai) plant acquired from Osramhad a full year of performance and continues to work closely with PLD management toimprove operational performance. The purchase of halogen bulbs from Osram has been inexcess of the buyback commitment.

WHOLLY OWNED SUBSIDIARIES:

The consolidated sales of all the subsidiaries were Rs. 5285.80Million against Rs. 4918.86 Million previous financial year. The EBIDTA was Rs. 536.00Million against Rs. 259.67 Million previous financial year. The Profit Before Tax was Rs.132.32 Million against ' (154.87) Million previous financial year. The Profit After Taxwas Rs. 47.89 Million against ' (193.67) Million previous financial year.

Suprajit Automotive Private Limited (SAL) and Suprajit Europe (SEU):

The sales were Rs. 1924.70 Million against Rs. 1677.30 Millionprevious year. The EBIDTA was Rs. 435.69 Million against Rs. 333.24 Million previous year.The Profit Before Tax was Rs. 335.53 Million against Rs. 228.80 Million previous year. TheProfit After Tax was Rs. 249.39 Million against Rs. 178.56 Million previous year.

The new plant at Doddaballapur is fully operational. This has addedmuch needed capacity for export and helped in further enhancing performance. The warehouseat Koper (Slovenia) helped in derisking Brexit related issues.

Suprajit USA Inc (Wescon Controls LLC):

Suprajit USA Inc (Wescon Controls LLC) 100% owned subsidiary of yourCompany continues its focus on non-automotive business. The sales were Rs. 2837.38Million against Rs. 2654.05 Million previous year. The EBIDTA was Rs. 260.13 Millionagainst Rs. 139.87 Million previous year. The Profit Before Tax was ' (38.91) Millionagainst ' (334.58) Million previous year. The Profit After Tax was ' (34.40) Millionagainst ' (310.81) Million previous year.

Initiatives to drive the costs down increase the productivity andacquire new businesses have started yielding positive momentum during the year.

Mr. James Gerard Ryan (Jim Ryan) an Industry veteran with extensiveglobal knowledge of cables joined Suprajit to strengthen the core team of the group.

Trifa and Luxlite:

Trifa and Luxlite the 100% owned subsidiaries of PLD to had achallenging year. The combined sales was Rs. 1073.25 Million (€12.38 Million)against Rs. 1198.96 Million (€ 15.21 Million) previous financial year. The EBIDTAwas Rs. (67.63) Million (€ (0.78) Million) against Rs. (125.74) Million (€(1.60) Million) previous financial year.

The restructuring as informed last year was fully in place resultingin better operating performance despite difficult business environment and Covid-19pandemic. However the overall performance of subsidiaries combined with PLD improvedduring the year.

CURRENT YEAR OUTLOOK AND COVID-19 IMPACT:

Indian economy rebounded well post the lockdowns due to 1s*wave last year. Unfortunately with vaccination levels are at a very low levels in Indiaprecautions thrown in the wind the second wave has hit India severely with infection anddeath reaching levels a few believed possible. With lockdowns imposed again by moststates the economic activities have ground to a minimum in many areas. After a robustpick up till March 2021 a significant downtrend is visible from April onwards. This isexpected to continue during the year. Unless the vaccination picks up well expertsbelieve the 3rd wave could also be devastating in India. The Western world particularlyUS UK & EU appear in better position thanks to vaccination and better adherence toCovid-19 protocols despite going through difficult Covid-19 outbreaks. However thebusiness outlook is still uncertain in these geographies due to shortage of electroniccomponents port congestion commodity price increases along with Covid-19 uncertainty.

Commodity price increases are adding to the already fragile economicscenario in India. Under these circumstances it is difficult to assess the economicactivity for the near term. The automotive industry's prospects are equally uncertain. Theyear is expected to be a very challenging and difficult. Your Company is taking steps tominimize the negative impact of Covid-19. With an excellent team in place clearly focusedon optimizing costs and improving performance your Company is confident of facing theseuncertainties and emerge as a stronger Company in the medium term.

The Company and Suprajit Foundation have initiated many projects toassist Covid-19 related relief for the needy. This includes providing Oxygen generatorsPPE kits dry rations etc. to Covid-19 Care Centers Primary Health Centres and needypopulation in addition to the donation to related activities.

SALIENT FEATURE OF FINANCIAL STATEMENT OF SUBSIDIARIES:

A separate statement in Form AOC-1 is given as Annexure-1 whichcontains the salient features of the financial statement of Subsidiaries. The AnnualAccounts and related documents of the Subsidiary Companies will be kept open forinspection at the Registered Office of the Company. The aforesaid documents will also bemade available to the Members of the Company upon receipt of written request from them.

CREDIT RATING:

The Company's financial discipline and prudence are reflected in thestrong credit ratings ascribed by rating agencies as exhibited below:

Instrument Rating Agency Rating Outlook
Long Term Debt CRISIL AA Stable
Long Term Debt ICRA AA Stable
Long Term Debt India Ratings & Research AA Stable
Short Term CRISIL A1 + Stable
Short Term ICRA A1 + Stable
Short Term India Ratings & Research A1 + Stable

FRAUD REPORTED BY THE AUDITORS DURING THE FINANCIAL YEAR:

Not applicable as there were no such instances during the year.

DEPOSITS:

Your Company has not invited/accepted/renewed any deposits from publicas defined under the provisions of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014. Accordingly the Company had no deposits as on March312021.

MATERIAL CHANGES & COMMITMENTS AFFECTING THE FINANCIAL POSITION OFTHE COMPANY BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT:

There were no material changes and commitments between the end of thefinancial year and the date of the Report which affect the financial position of theCompany.

COPY OF ANNUAL RETURN:

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act2013 the Company has placed a copy of annual return of the financial year 2020-21 on itswebsite at www.suprajit.com.

PARTICULARS OF LOANS INVESTMENTS GUARANTEES GIVEN OR SECURITYPROVIDED BY THE COMPANY:

During the financial year the Company has not provided any loan/guarantee / security which fall under the provisions of Section 186 of the Companies Act2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERREDTO IN SECTION 188(1) OF THE COMPANIES ACT 2013:

All related party transactions which were entered into during thefinancial year were at arm's length basis and were in the ordinary course of business andwith the omnibus approval of the Audit Committee. There are no materially significantrelated party transactions made by the Company with Promoters Directors Key ManagerialPersonnel or other designated persons which may have a potential conflict with theinterest of the Company at large.

All related party transactions wherever applicable are placed beforethe Audit Committee. The quarterly disclosures of transactions with related parties aremade to the Audit Committee. In compliance with the provisions of Section 134(3) of theCompanies Act 2013 particulars of contracts or arrangements with related partiesreferred to in the provisions of Section 188(1) of the Companies Act 2013 are enclosedin the Form AOC-2 as part of this report as "Annexure- 2".

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:

Meetings of the Board are held at regular intervals with a time gap ofnot more than 120 days between two consecutive Meetings. During the financial year 4(Four) Meetings were held on June 12 2020 August 212020 November 12 2020 February10 2021.

DIRECTORS' RESPONSIBILITY STATEMENT:

In pursuance of Section 134(3)(c) of the Companies Act 2013 the Boardof Directors of the Company confirms and submits that:

i. in the preparation of the annual accounts the applicable AccountingStandards have been followed and there have been no material departure;

ii. the selected accounting policies were applied consistently and thejudgments and estimates made are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 312021 and of the profits of theCompany for the year ended on that date;

iii. proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

iv. the annual accounts have been prepared on a 'going concern' basis;

v. adequate system of internal financial controls has been laid downand the said system is operating effectively; and

vi. proper systems to ensure compliance with the provisions of allapplicable laws have been devised and such systems were adequate and are operatingeffectively.

CORPORATE GOVERNANCE AND BUSINESS RESPONSIBILITY REPORT:

Being a Listed Company necessary measures are taken to comply withSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (LODR) as amendedfrom time to time. A report on Corporate Governance along with a Certificate ofcompliance from a Practising Company Secretary forms part of this report.

The Business Responsibility Report as required to be annexed to thisreport is annexed as Annexure -3.

DIVIDEND DISTRIBUTION POLICY:

The Company has a Dividend Distribution Policy in place which isavailable on the website of the Company at www.suprajit.com(http://www.suprajit.com/investors/compliance/policies-codes/) and also annexed asAnnexure-4.

RISK MANAGEMENT POLICY:

The Company has Risk Management Policy in place to oversight in thearea of financial risks and controls through Risk Management Committee. Major risksidentified by the businesses and functions are systematically addressed through mitigatingactions on a continuing basis.

The development and implementation of Risk Management Policy has beencovered in the management discussion and analysis which forms part of this report. TheCompany has taken Directors' and Officers' Liability Insurance Policy.

CORPORATE SOCIAL RESPONSIBILITY (CSR)/ SUPRAJIT FOUNDATION:

In line with Section 135 read with Schedule VII of the Companies Act2013 the Board has constituted a Corporate Social Responsibility (CSR) Committee andadopted a CSR Policy which is based on the philosophy "Giving Back to Society".

During the year the Company has paid Rs. 27.58 Million and SuprajitAutomotive has paid Rs. 4.90 Million to Suprajit Foundation towards the various projectsundertaken by Suprajit Foundation. Annual Report on Corporate Social Responsibility (CSR)activities provided in Annexure-5 to this report. The copy

of the CSR Policy is available on the website of the Company atwww.suprajit.com(http://suprajit.com/investors/compliance/ policies-codes/).

The Company has been active in CSR activities through SuprajitFoundation and has undertaken various projects in the areas of Education Healthcare andRural Development since 2011. Your Directors take this opportunity to thank the honoraryTrustees of the Foundation who continue to devote their valuable time and energy inplanning directing monitoring and reviewing its activities.

DETAILS OF EMPLOYEES STOCK BENEFIT SCHEMES:

The Shareholders of the Company have approved 'SEL Employee StockAppreciation Rights Plan 2017' ("ESAR 2017") at the 32nd AnnualGeneral Meeting of the Company held on November 11 2017. The Company through Nominationand Remuneration Committee has taken necessary steps to implement the same. Disclosurepursuant to Regulation 14 of Securities and Exchange Board of India (SEBI) (Share BasedEmployee Benefits) Regulations 2014 is enclosed as Annexure -6.

CONSERVATION OF ENERGY:

Conservation of energy continues to be one of the highest prioritymeasures directly supervised by the Chief Strategy officer of the Company. We continue toreplace / upgrade old high power consumption equipment with new more modern equipment andthese include the Air compressors Diesel Gensets Injection molding machines etc.

The following energy conservation measures were implemented during theyear under review.

• Monitoring and regular review of power consumption maintainingthe power factor value nearby 0.99 to reduce the reactive power losses.

• Up-gradation of the machine by using VFDs (Variable FrequencyDrives) and TPRs (Thyristor Power Regulators) to increase the m/c efficiency and reductionof power consumption.

• Periodical inspection and testing of DG sets and transformershave been done as per Indian electricity rule 1956 by Assistant Director ElectricalSafety.

• AC drives (VFD) has been installed for high-capacity inductionmotors to take care of the power consumption in AC motors.

In addition the following new initiatives have been undertaken duringthe financial year at various plants:

a. The Company has installed 100 kWp solar capacity. Further 904 KWp isplanned to be installed in FY22.

b. A focused effort at our Halogen bulb manufacturing facilities toreduce consumption of gasses and electricity used to manufacture the bulbs.

RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION ADAPTATION &INNOVATION:

a) Research and Development (R&D):

1. The Company has a centralized Suprajit Tech Centre (STC) atBengaluru. STC has Engineers for R&D testing and validation teams to products as percustomers' requirements. The Group also has tech centers at Tamworth U.K (Suprajit EuropeLimited) Suprajit Automotive Private Limited Doddaballapur and Wichita USA (Wescon) forCables and mechanisms. The company has a R&D facility at the plant in the NOIDA SEZfocused on developing new types of Halogen and LED bulbs.

2. The Company has product & process patents which are deployedcommercially. The Company's R&D has developed many specialized cables speedometersLamps and other products for Customers as per the end user requirements. This is beingsuccessfully deployed by the customer with significant cost savings.

3. Development cells in respective units have been upgraded with moreEngineers and latest equipment.

4. The Company has developed many types of equipment and automationspecialized for cable and lamps with significant energy savings and increasedproductivity.

5. "Product Life Cycle Management"-software has beenimplemented to enhance standardization of new product launch and change management.

6. A newly formed cell within the STC has started to focus on theAutomotive Electronics and specifically on Digital Speedometers.

7. A project on completely indigenized "Throttle PositionSensor" is underway and the developed product is under testing with the customers.

8. As a part of extension beyond Cables end mechanisms like theseeding Gear box Combination braking system are also being developed.

9. STC successfully developed tested and established formulae for thebrake shoes during the year.

b) Expenditure on Research and Development:

Rs. in Million

Particulars 2020-21 2019-20
Salaries Wages & Bonus 26.80 24.59
Cost of materials consumed 2.03 2.43
Other expenses 6.31 4.62
Total 35.13 31.63

c) Technology Absorption Adaptation Innovation and particulars ofimported technology:

1) The Company has not imported any technology during the financialyear.

2) The Company has developed innovative and pathbreaking products andprocesses for both lamps and

Cables for which patents are pending.

3) The Company has successfully adopted customer's designs for newtypes of cables halogen lamps and also other products.

GREEN INITIATIVES:

The Company has initiated a sustainability initiative with the aim ofgoing green and minimizing our impact on the environment. Like the previous years thisyear too the Company is publishing only the statutory disclosures in the print version ofthe Annual Report.

FOREIGN EXCHANGE EARNINGS AND OUTFLOW:

The Company earned Rs. 2759.21 Million and expended '829.24 Millionduring the financial year under review.

INDUSTRIAL RELATIONS:

Industrial relations have been cordial and constructive which havehelped your Company to achieve production targets.

DECLARATION BY THE INDEPENDENT DIRECTORS:

The Company has received necessary declarations from each IndependentDirectors pursuant to the provisions of Section 149(7) of the Companies Act 2013 thathe/she meets the criteria of Independence laid down in the provisions of Section 149(6) ofthe Companies Act 2013.

Further the Board hereby confirms that all the Independent Directorsof the Company fulfill the conditions as specified in SEBI (Listing Obligations andDisclosure Requirements) Regulation 2015 and all the Independent Directors areindependent of the management.

BOARD EVALUATION:

Pursuant to the provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (as amended from time to time)the Board has carried out an annual performance evaluation of Independent Directors. TheIndependent Directors have carried out evaluation of Non Independent Directors Chairmanand all the Committees of the Board.

FAMILIARISATION PROGRAMMES OF INDEPENDENT DIRECTORS:

To familiarize the new inductees with the strategy operations andfunctions of the Company the Executive Directors / Senior Managerial Personnel makepresentations to the inductees about the Company's strategy operations product andservice offerings markets organization structure finance human resources technologyquality facilities and risk management at the Board Meetings. The copy of FamiliarizationProgramme of Independent Directors is available on the website of the Company atwww.suprajit.com(http://www.suprajit.com/ investors/compliance/policies-codes/).

NOMINATION AND REMUNERATION POLICY:

Your Company has adopted a Nomination and Remuneration Policy onDirectors' Appointment and Remuneration including

criteria for determining qualifications positive attributesindependence of a Director and other matters as provided under the provisions of Section178(3) of the Companies Act 2013. The Policy is available at the website of the Companyat www.suprajit. com (http://suprajit.com/investors/compliance/policies-codes/).

COMPOSITION OF AUDIT COMMITTEE:

The Company has complied with the requirements of Section 177 of theCompanies Act 2013 and Regulation 18 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 relating to the composition of the Audit Committee.During the financial year the composition of the Audit Committee was as follows:

Mr. Suresh Shetty - Chairman
Mr. Ian Williamson - Member
Mr. K.Ajith Kumar Rai - Member

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

Your Company has formulated the Whistle Blower Policy with a view toprovide a mechanism for Employees and Directors of the Company to approach the ComplianceOfficers / the Chairman of the Audit Committee of the Company in compliance with Section177(9) of the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. Details of the Whistle Blower Policy are explained in theReport on Corporate Governance and Whistle Blower Policy of the Company is available onthe website of the Company at www.suprajit.com(http://suprajit.com/investors/compliance/policies-codes/).

AUDITORS:

i. Statutory Auditors:

The Members of the Company at the 32nd(Thirty Second) Annual GeneralMeeting of the Company held on November 11 2017 appointed Messrs S. R. Batliboi&Associates LLP Chartered Accountants (Firm Registration No. 101049W/ E300004) asStatutory Auditors of the Company for a period of 5 (Five) years. They will continue to beStatutory Auditors of the Company till the conclusion of 37*h (Thirty Seventh)Annual General Meeting to be held in the year 2022.

As per the Companies (Amendment) Act 2017 and rules made there underwith effect from May 7 2018 the Central Government notified the omission of therequirement related to ratification of appointment of Statutory Auditors by Members atevery Annual General Meeting. Accordingly the Resolution for ratification has not beenplaced before the Members.

ii. Cost Auditors:

Messrs G N V Associates Cost Accountants Bangalore wasappointed asthe Cost Auditors of your Company for the financial year 2020-21.

iii. Secretarial Auditor:

The Board has appointed Mr. Parameshwar G. Bhat a Practising CompanySecretary (Membership No.FCS-8860) Bangalore as the Secretarial Auditor as per theprovisions of Section 204 of the Companies Act 2013 for the financial year 2020-21. TheSecretarial Audit Report issued by him is enclosed as "Annexure-7" to thisReport.

QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BYTHE STATUTORY AUDITORS:

There are no qualifications or adverse remarks in the StatutoryAuditors' Report which require any explanation from the Board of Directors. The StatutoryAuditors have expressed an unmodified opinion in the audit reports in respect of theAudited standalone and consolidated Financial Statements for the financial year endedMarch 312021.

Further there are also no qualifications reservations or adverseremarks or disclaimers made by Secretarial Auditor in his Secretarial Audit Report.

REGULATORY / COURT ORDERS:

There were no significant and material orders passed by the Regulatorsor Courts or Tribunals impacting the going concern status of the Company and its futureoperations.

HEALTH SAFETY AND ENVIRONMENTAL PROTECTION (HSE):

The Company's efforts towards reinforcing a positive safety culturehave resulted in reduction of total lost time due to Injuries this year. Similarly thelost Time Injury Frequency Rate reduced from a year ago.

Further during the financial year no occupational illness case wasreported. Due to continued efforts to conserve water and energy specific water and energyconsumption also got reduced.

The Company has demonstrated its commitment to HSE by Establishing HSEPolicy same was communicated across the plants Employees and interested parties (madeavailable through website) and all the new manufacturing plants have been certified forEnvironmental Management System (ISO 14001:2015) during the year.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013:

The Company has in place a Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this Policy.

Summary of sexual harassment complaints received and disposed offduring the financial year 2020-21:

No. of complaints received: NIL

No. of complaints disposed off: NA

PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 read with Rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of employees of the Company will be provided upon request. In terms of Section136 of the Act the Report and Accounts are being sent to the Members and others entitledthereto excluding the Registered Office of the Company during business hours on workingdays of the Company up to the date of the ensuing Annual General Meeting. If any Member isinterested in obtaining a copy thereof such member may write to the Company Secretary inthis regard.

The ratio of the remuneration of each Director to the median employee'sremuneration and other details in terms of Section 197(12) of the Companies Act 2013 readwith Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are forming part of this report as "Annexure-8".

SECRETARIAL STANDARDS:

The Company complies with applicable mandatory secretarial standardsissued by the Institute of Company Secretaries of India.

CAUTIONARY NOTE:

Management Discussion and Analysis forming part of this Report is incompliance with Corporate Governance Standards SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 with the Stock Exchanges and such statements may be"forward looking" within the meaning of applicable securities laws andregulations. Actual results could differ materially from those expressed or implied.Important factors that could make a difference to the Company's operations includeeconomic conditions affecting demand/supply and price conditions in the domestic andoverseas markets/currency fluctuations in which the Company operates changes in theGovernment regulations tax laws and other statutes and other incidental factors.

ACKNOWLEDGEMENT:

The Directors place on record their appreciation for valuablecontribution made by employees at all levels active support and encouragement receivedfrom various Governmental agencies Company's Bankers Customers vendors distributorsBusiness Associates and other Acquaintances.

Your Directors recognize the continued support extended by all theShareholders and gratefully acknowledge with a firm belief that the support and trust willcontinue in the future.

For and on behalf of the Board
K Ajith Kumar Rai
Chairman
(DIN: 01160327)
Place : Bengaluru
Date : May 29 2021

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