johnson controls hitachi air condition india ltd Directors report

MANAGEMENT DISCUSSION & ANALYSIS

Dear Members,

Your Directors hereby present the Thirty Eighth Annual Report and the Audited Financial Statements, for the year ended March 31, 2023.

Financial Highlights

The highlights of financial results of the Company for the year under review are given below:

( Rs. in Million)

Particulars	For the year ended March 31, 2023	For the year ended March 31, 2022
Revenue from operations	23844	21590
Other Income	120	81
Total Revenue	23964	21671
(Loss) / Profit before finance cost, depreciation and tax	(68)	1046
Finance Cost	75	91
Depreciation and amortization expenses	753	721
(Loss) / Profit before exceptional Items and tax	(896)	233
Exceptional Items	156	7
(Loss) / Profit before Tax	(1052)	226
Tax expense	(231)	65
(Loss) / Profit for the year	(821)	161

Dividend

Considering losses during the year, your Directors do not recommend dividend for the year ended March 31, 2023.

Industry Outlook

As Indias population continues to grow and its economy undergoes a transformation, the Air Conditioning industry has emerged as one of the high potential industries in the country. Changing lifestyles of Indian consumers have created a growing need for accessible and convenient products that improve comfort level of customers. Rising GDP, growing per capita income, increased a_ordability due to easy availability of finance and growing e-commerce sector are some of the factors driving Indian Air Conditioning industrys growth.

Industry is working on product innovation to meet the demand for energy saving products. Additionally, due to the highly competitive market environment, manufacturers are working to provide features such as seamless Wi-Fi connectivity and Inverter type Air Conditioners at affordable rates, which are expected to drive growth in the Indian Air Conditioning market in the coming years.

Climate change has had an unrelenting effect on India. In last few years, in the northern regions of the country, temperatures passed the 50 degrees Celsius mark several times. Temperatures in the

Indian summer over the last decade or so have repeatedly broken heat records, and there is no sign of respite from heat waves in the foreseeable future, making air conditioners an increasingly important fixture in Indian homes.

Increasing demand for Air Conditioners, along with_ a fairly low penetration rate, has left the Indian air conditioning market with plenty of room to grow. Since October 2020, the Indian government has banned imports of ready-to-install air conditioners, providing a boost to manufacturing in India. Air Conditioning Brands are focusing on expanding their delivery and service centers along with launching products with innovative features, including power-saving and auto-clean features.

As per research reports, Indian Air Conditioning market is projected to grow at a CAGR of 10-12% approximately in medium to long term.

During 2022-23, the demand for Room Air conditioners was impacted as disruptions in global supply chain continued. Cost pressures in terms of high commodity prices, costlier crude and depreciation in Indian Rupee as against USD resulted in negative margins.

Business Overview

During the year, revenue of the Company has increased from Rs. 21671 Million to Rs. 23964 Million i.e. 10.6%. However, the Company incurred losses of Rs. 896 Million as against profits of Rs. 233 million last year.

Despite the growth in revenue, Company incurred losses as sti_ competition in the market prevented Company from passing on the commodity inflation to the market. During the year, Company has also incurred significant costs on restructuring its manpower resulting in one time payout which will have a payback in future leading to better operational efficiencies.

Sales of the Company at the onset of summer of 2023 (Feb-Mar) have been impacted due to intermittent rains in North region, which represents a significant portion of your companys projected sales. During the year 2021-22, the company had embarked on a journey to develop a completely new range of Air Conditioners to establish a contemporary and unique position. The product launch was delayed due to unforeseen challenges on development side resulting in loss of sales in Q4 of 2022-23.

Going forward, we have built gross margin improvement work streams wherein our focus is not only on short term measures but we are also updating our long terms strategies to regain the pre-pandemic momentum and improve gross margins.

The Company is re-calibrating product and channel mix for improving margins while optimizing product portfolio in an endeavor to achieve profitable growth going forward. Further, the cost structures are being optimized through part commonization, localization in line with ‘Make in India policy, product innovation, and creative ideation to support the growth going forward. Company is closely watching all macro and micro economic elements including inflation which may dampen demand. Your Company has been deploying mitigation strategies to counter the headwinds and accelerate the path of recovery.

Room Air Conditioners

Amongst Room Air Conditioners, the Split Air Conditioner segment is expected to sustain its growth trajectory in the coming years, driven by factors such as rising urbanization, growing disposable incomes, heightened awareness of air quality, noise reduction and energy efficiency. The adoption of inverter technology is one of the industrys significant trends, offering superior energy efficiency and reduced electricity bills. Indian governments initiatives to promote energy-efficient appliances, such as the Bureau of Energy Efficiencys (BEE) star rating system for ACs, have also contributed to the industrys expansion by boosting demand for higher-rated energy-efficient ACs.

The company introduced future-ready inverter models starting from March 2022 to comply with the new star rating criteria with effect from July 2022.

With a decent product range and a special focus on channel management, despite various market challenges, the company managed to register ~20% growth in the Inverter Split AC range and ~9% growth in split AC over last year in value terms. In Window AC series company registered ~15% growth over last year by value. Overall company registered ~ 10% value growth over last year in Residential AC segment.

Your Company is offering new models, features, technology regularly and creating better air-conditioning experience for our esteemed customers who are looking for new & superior products coupled with technologically advanced features. During the year, we launched our campaign "new air" thereby positioning our brand as an aspirational premium brand.

Commercial Air Conditioners

Variable Refrigerant Flow (VRF)

An increasing demand for air conditioners from rising construction activities at airports, metros, and commercial buildings, increasing government spending on public infrastructure, and technological advancements are creating opportunities for the growth of VRF Air Conditioning Market in India.

As a segment, company considers VRF as a high potential product. Your company has a wide range of VRF air conditioning systems, which cater to Commercial, light-commercial and residential air-conditioning needs. With a wide range of VRF ODU series and multiple IDU options, Company aims to achieve a technological edge over its competitors. Your company was able to register a growth of ~44% over the last year in value terms. The new product lineup that was introduced in the last few years have registered good growth in categories like supermarkets, premium light commercial complexes, High end residences, hospitals, hotels etc. Although, the India VRF Air Conditioner market is highly competitive with international and local brands jostling for space, growth in several construction projects across metro & tier-2 cities, is likely to increase the demand for VRF air conditioners in the country in the coming years._

Light Commercial Air Conditioners

In the commercial Air Conditioner range, apart from VRF, company offers wide range of light commercial air conditioning products which includes ductable type, Concealed type, Flexi Split type and Cassette type Air Conditioners. Most of these models are pre-charged with environment friendly refrigerants like R32 and R410 which has low GWP. Also, majority of these product come with multi circuit option for better partial load.

The company has a strong channel presence nationwide and further planning to enhance it going forward. Company has registered 37% value growth in the light commercial segment. Looking at the improvement in living standards of Indian consumers, recovery of organized commercial segment, push from Government for energy-e_cient products and growth of hypermarkets, malls, hospitals etc., the light Commercial Air Conditioners category is poised to grow. The company is expecting a further increase in demand and growth of the overall commercial chain, which in turn is expected to boost the sale of light commercial AC category in the coming period.

International Sales

The Company has faced challenges in its export business due to the global economic scenarios and the impact of the pandemic. However, it has taken steps to mitigate these challenges and continue its operations in various countries.

In the SAARC countries (Nepal, Bhutan, Bangladesh, Sri Lanka, and Maldives), the Company has already established direct business operations. Additionally, it is implementing an expansion plan by partnering with new channel partners in these territories. This approach aims to strengthen the Companys presence and increase its market share in the SAARC region. While strategizing mid-long term growth plans in these countries, due consideration is given to the geopolitical challenges, economic conditions to protect companys interest parallelly.

Further, the Company also exports its products to Indonesia, Vietnam, Middle East and Africa while partnering with associate group companies.

Risks, Concerns and Challenges

Seasonality Risk

Being an Air Conditioning product company, dependency of business is more seasonal in nature and hence any unfavorable and unforeseen situations like pandemic and weather events like intermittent rains, wide-range temperature fluctuations etc. may impact companys business. To mitigate this risk of loss of opportunity or excess inventory, the company has put in place a demand and supply planning process that allows it to stay nimble and react to seasonal variations.

Technology Changes

With globalization and post pandemic experience, consumer preferences have drastically changed. Consumers are expecting new products to come with smart and futuristic features. Being a

22 consumer- focused company, we keep the pace with technological changes and frequent upgrades. To mitigate this risk, the company has put in place a robust product development process that develops a 3-year roadmap of new products and upgrades combining customer insights, smart technologies, and regulatory requirements.

Raw Material price fluctuations

The company, always focuses on providing world class quality product to its customers and to do so, we engage in sourcing key components from reliable global sources. Due to raw material cost fluctuations the cost of components changes drastically, and the supply chain also gets impacted. Fluctuation in raw material cost may put strain on companys profitability. To mitigate this risk, the company has actively engaged in developing a network of local vendors and dual sourcing for key components.

Government Policies

Government is actively working on implementing various new initiatives and policies. The companys core product businesses is highly dependent on Government policies related to energy efficiency standards, Environmental regulations, manufacturing standards, non-tari_ barriers, incentives, anti dumping duties and taxes etc. Such policies may impact product and its prices directly or indirectly and may impact the companys business. To mitigate this risk, the company remains alert and updated about all such policies and keep taking required actions when needed.

Human Resources

We believe that meaning at work is created when people relate to the purpose of the organisation, feel connected to their leaders and colleagues and have a sense of belonging. Our focus is on providing our people a work environment that welcomes diversity, nurtures positive relationships, provides challenging work assignments and provides opportunities based on meritocracy for people to grow and build their careers with us, in line with their aspirations.

Human Capital

As on March 31, 2023 the total strength of employees (Staff and Operators) of the Company was 1361. Our people play a pivotal role in realising the Companys vision and business objectives, and help in building a better society.

Talent Acquisition

Our human assets play a key role in seamless operations in todays ever-evolving business environment. We have a platform that nurtures and rewards hardworking, sincere, honest, and dedicated individuals. Every person we employ adds value to the organisation. It is our endeavour, as an organisation, to provide the right atmosphere and an enabling environment to realise ones potential and take the organisation to the next level. We are committed to creating opportunities at all levels for people to give expression to their creative instincts and unleash their potential.

Diversity and Inclusion

We are committed to fostering a more diverse, inclusive and uni_ed culture that is representative of our employees, our customers and society in which we live.

The company is committed to offering open opportunities to female candidates. When it comes to advancing professional careers and embracing different dimensions of diversity, eliminating unconscious biases is pivotal. It builds a workplace culture that respects the unique perspectives, needs, and potential of all the employees._ The company has taken serious steps to increase the percentage of women in the workforce from 8 % to 11.3%. We have put in place several initiatives to promote gender diversity. In past few years, the Companys efforts have been directed towards strengthening and promoting gender diversity at the workplace. We welcome participation from women and our practices are curated to support gender inclusion at all levels. Compensation standards and structures are solely based on education, talent and experience of employees. Few initiatives include; ensuring consideration of female candidates during the hiring process, identification of High Potential females who can take up higher responsibilities and promoting them to higher grade. We have Implemented progressive policies, practices, benefits and support to improve practices and policies to remove barriers, enable inclusion and realise equity. We selected a pool of 25 Mid Career females for Women Leadership Potential & Impact Program. This program empowered the females to enhance leadership skills to address issues faced by women at work and in business.

Talent Management

Building a strong future-ready talent pool and robust leadership succession pipeline continue to be priority areas for us in Talent Management. We continue to give prominence to identifying and developing our high potential employees across every line of business and have steered towards more holistic and comprehensive approach. Through our Organisation Talent Review process, we have identified members from the middle and senior management to create a strong succession plan. Further, in this dynamic environment where the new-age skills are emerging in areas of IOT, Data analytics, automation (Robotic Process Automation, automatic dashboards etc.), the talent pool is continuously adjusted to embrace this changing skill needed to promote innovation in our products and processes.

Organisation Transformation

This year, to synergize & integrate businesses we have re-aligned our Field structure. Consolidation of functions and roles have been carried out thereby enhancing business efficiencies in Field. To strengthen Plant operations, we implemented APU (Autonomous Production Unit) / APZ (Autonomous Production Zone) across the plant._ For this, the plant is divided in 5 APUs and various APZs under each APU._ These APUs and their respective APZs will function as "One team" to drive operation excellence through problem solving while focusing on Safety, Quality, Delivery, Cost and Employee engagement.

Employee Wellness and Engagement

Our endeavour is to provide a happy, vibrant and engaging work environment. Revitalising a culture of connect and camaraderie has been yet another area of significant attention for us. Our leaders and managers across levels are also deeply involved in identifying and implementing actions towards enhancing employee engagement, the results of our employee engagement survey "YOUR VOICE" is serving as input for this. We are also reinforcing the importance of health and wellbeing through wellness programs and initiatives.

Internal Control and Systems

The Company has a well-defined and adequate internal control system commensurate to the size of its business and the nature of industry it operates in. The Internal Control system ensures safeguarding and protecting the assets of the Company. Internal Audit has been conducted by external Auditors at plant as well as at all the branches of the Company within the detailed scope defined and approved by the Audit Committee. The Internal Audit is planned to substantiate and review the adequacy of internal controls and laid down procedures & systems. Observations of Internal Auditors and the detailed plan of action are reviewed and discussed at the meetings of the Audit Committee on a periodic basis.

Auditors

Pursuant to the provisions of Section 139 of the Companies Act, 2013, Members of the Company, at the Annual General Meeting held on 15th September 2021, appointed M/s. Price Waterhouse & Co. Chartered Accountants LLP (Firm Registration No. 304026E / E300009) as Auditors of the Company to hold office from the conclusion of Annual General Meeting held on 15th September, 2021 till the conclusion of the sixth consecutive Annual General Meeting.

Directors Responsibility Statement

Your Directors confirm that: a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures; b) Such accounting policies selected and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) Annual accounts have been prepared on a going concern basis; e) Internal financial controls which are to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively; and f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Change in Board of Directors

Since April 1, 2022, there were following changes in the Board of Directors of the Company:

1. Appointment of Ms. Shalini Kamath as an Independent Director with effect from April 1, 2022.

2. Appointment of Mr. Tatsuya Sugawara as a Director of the Company with effect from May 26, 2022.

3. Cessation of Mr. Shinichi Iizuka as a Director of the Company with effect from May 26, 2022.

4. Cessation of Mr. Gurmeet Singh as Managing Director as well as Director of the Company with effect from closing hours as on June 30, 2023.

5. Appointment of Mr. Sanjay Sudhakaran as Director as well as Managing Director of the Company with effect from July 1, 2023.

6. Cessation of Mr. Tatsuya Sugawara as a Director of the Company with effect from June 30, 2023.

7. Appointment of Mr. Nobuyuki Tao as a Director of the Company with effect from June 30, 2023.

Performance Evaluation

The Board has carried out an annual evaluation of the performance of the Board, Audit Committee, Stakeholder Relationship Committee, Nomination and Remuneration Committee, Executive Committee, Vigil Mechanism Committee and CSR Committee. The Board has also carried out annual evaluation of the performance of individual Directors, who were evaluated considering levels of their engagement and contribution, safeguarding the interests of the Company and its minority shareholders, etc. The performance evaluation of the Chairman and the Non-Independent Directors were carried out by the Independent Directors at their separate meeting.

Details of Establishment of Vigil Mechanism

The Company has established a Vigil Mechanism process as an extension of the Companys Code of Conduct whereby an employee, director, customer, vendor or associate of the Company can disclose his genuine doubt in good faith to any member of Vigil Mechanism Committee about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct or ethics policy, so that appropriate action can be taken to safeguard the interest of the Company. In exceptional cases, a complaint can be reported by a complainant to a Chairperson of Audit Committee. This mechanism is overseen by the Audit Committee.

Disclosure under section 197(12) of the Companies Act, 2012 read with Rule 5(1) of Companies (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	4.9%	22.4:1
Mr. Shinichi Iizuka	Director	NA	NA
Mr. Yoshikazu Ishihara	Director	NA	NA
Mr. Tatsuya Sugawara	Director	NA	NA
Mr. Ashok Balwani	Independent Director	NA	NA
Mr. Mukesh Patel	Independent Director	NA	NA
Ms. Shalini Kamath	Independent Director	NA	NA
Mr. Rishi Mehta	Chief Financial Officer	20.3%	9.2:1
Mr. Parag Dave	Company Secretary	9.6%	2.2:1

24

Comparison of remuneration against Companys 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 8.9%
Percentage increase in the median remuneration of employees in the financial year	7.2%
No. of permanent employees on the rolls of Company	1361
Average percentage increase already made in the salaries of employees other than the managerial personnel in the last financial year and 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	- Average % increase in the salaries of employees other than the managerial personnel 10.71%
remuneration	- Total remuneration of KMP increased by 8.9%

* represents increase in base pay only and does not include long term incentives.

We hereby afirm that the remuneration given to all the employees, Directors and KMP is as per the Remuneration policy of the Company.

Risk Management System

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

Risks are identified and then classified into different categories such as Strategic, Operational, and Business risk. Then score based on level and significance of risk is given and subsequently risk mitigation steps are taken. ERM cover various functional risks including Cyber securities related risks.

As required under SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, Board has formed a Risk Management to discuss the critical and vital risks.

Internal Financial Control

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

1. Conduct of its business by adherence to Companys policies.

2. Safeguarding of assets.

3. The accuracy and completeness of the accounting records, Prevention and detection of frauds 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 the Company were held during the year under review on May 26, 2022, 4th August, 2022, 19th October, 2022 and 25th January, 2023.

2. Members of the Audit Committee were: a. Mr. Mukesh Patel – Chairman b. Mr. Ashok Balwani – Member c. Mr. Gurmeet Singh – Member

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

4. Details of the CSR amount spent for the year 2022-23 is attached as Annexure-A. Details about the Policy on Corporate Social Responsibility (CSR) and projects to be implemented by the Company for the year 2023-24, as required under Section 134(3)(o), 135(2) read with Companies (Corporate Social Responsibility Policy) Rules, 2014 has been placed on the website of the Company and Weblink is as under: https://buy.hitachiaircon.in/cms/materials/e0779a7474.pdf

5. Formal Appointment and Evaluation Policy of the Board of Directors and Senior Management of the Company which has been formulated and recommended by Nomination and Remuneration Committee and adopted by Board of Directors covering appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) has been placed on the website of the Company and Weblink is as under: https://buy.hitachiaircon. in/cms/materials/858c85c293.pdf

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

7. The Draft Annual Return in form MGT-7 as provided under sub-Section (3) of section 92 has been placed on the website of the Company and Weblink is as under: https://buy.hitachiaircon.in/cms/materials/baab76c33b.pdf

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

9. Details of the significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including:

Sr. No.	Ratio	As at March 31, 2023	As at March 31, 2022	% Variance	Reason for Variance*
1	Current Ratio	1.3	1.4	-8%
2	Debt-Equity Ratio	0.3	0.2	93%	The variance is primarily on account of increase in current borrowings by Rs. 1,000.2 million during the year ended March 31, 2023.
3	Debt Service Coverage Ratio	(0.7)	2.9	-125%	Refer Explanation
4	Return on Equity (ROE)(%)	-11.7%	2.2%	-633%	Refer Explanation
5	Inventory Turnover Ratio	2.7	2.3	20%
6	Trade receivables turnover ratio	8.1	7.9	2%
7	Trade payables turnover ratio	3.4	3.6	-4%
8	Net capital turnover ratio	8.1	5.6	44%	The variance is primarily on account of overall reduction in working capital as at March 31, 2023 which is consequent to increase in current borrowings.
9	Net profit ratio(%)	-3.4%	0.7%	-561%	Refer Explanation
10	Return on capital employed (ROCE)(%)	-12.1%	3.8%	-418%	Refer Explanation
11	Return on investments(%)	3.7%	2.5%	48%	The variance is primarily on account of increase in interest rates in respect of deposits placed with bank during the year ended March 31, 2023.
12	Operating Profit Margin (%) (before exceptional items)	-0.3%	4.84%	-105.9%	Cost inflation in Rs..1 could not be recovered fully in pricing

Explanation: The variance is primarily on account of loss during the year ended March 31, 2023. The said loss is mainly on account of increase in commodity prices during the year ended March 31, 2023 which is not fully compensated by increase in sale prices of products. Further, the Company has incurred the expenditure towards termination benefits paid/payable to the employees in the current year. For detailed information please refer Note 43 of Notes forming part of the Financial Statements.

10. Secretarial Audit Report: Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Report of the Secretarial Auditors is annexed as Annexure-B.

11. There is no material fraud reported by Auditors under Section 143(12) of the Companies Act, 2013 during the year under review. 12. Particulars of loans, investments or guarantees under section 186: Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered under Section 186. Company has not made any investment in securities of other Body Corporate. Company has given guarantee of Rs. 75 Million against the credit facilities availed by dealers.

13. There is no subsidiary and/or joint venture of the Company. Further, there is no associate Company in which Company has a significant influence. Therefore, no disclosure in this regard is required in Form AOC 1.

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

15. During the year, Company has not accepted deposits covered under Chapter V.

16. There is no qualification, reservation or adverse remark or disclaimer made by the Auditors in their report.

17. There is no qualification, reservation or adverse remark or disclaimer made by the Company Secretaries in practice in their Secretarial Audit Report.

18. There is no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.

19. Details of complaints relating to sexual harassment during the year under review: Number of complaints pending as on March 31, 2022: Nil Number of complaints received during the year: 1 Number of complaints disposed of during the financial year: 1 Number of complaints pending as on March 31, 2023: Nil 20. The information as per Rule 5(2) of the Companies

26 (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (‘Rules), forms part of this Report. However, as per second proviso to Section 136(1) of the Act and second proviso of Rule 5(3) of the Rules, the Report and Financial Statements are being sent to the Members of the Company excluding the statement of particulars of employees under Rule 5(2) of the Rules. Any Member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company.

21. Related party transactions under Section 188(1): All transactions entered by the Company with related parties during the year under review were in ordinary course of business and on an arms length basis. There were no material Related Party Transactions (RPTs) undertaken by the Company during the year that require shareholders approval under Section 188 of the Act. Therefore, the disclosure in Form AOC-2 under Section 134(3)(h) of the Companies Act, 2013 is not applicable.

Policy on dealing with Related Party Transactions has been disclosed on Companys website and a weblink is as under: https://buy.hitachiaircon.in/cms/materials/1bbefe4542.pdf

22. Revision in Accounts or Board‘s Report: There are no revisions made in the Accounts or Board‘s Report.

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

24. Issue of Sweat Equity Shares: There was no issue of Sweat Equity Share during the year under review.

25. Employee Stock Option and Employee Stock Purchase Schemes: No Employee Stock Option and Employee Stock Purchase Schemes were launched by the Company during the year under review.

26. Disclosure under Regulation 34(3) read with Schedule V of the SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015: a. The Equity Shares of the Company are not delisted or suspended during the year under review. b. Equity Shares of the Company are listed on the BSE Limited and the National Stock Exchange of India Limited. c. Annual listing fees have been paid to both the stock exchanges mentioned above.

27. Dividend Distribution Policy has been disclosed on Companys website and a weblink is as under: https://buy.hitachiaircon.in/cms/materials/9de980b488.pdf 28. Company has complied with Secretarial Standards applicable to Company.

29. Information pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, relating to conservation of energy, Technology absorption and Foreign exchange earnings and outgo are attached in Annexure C.

ACKNOWLEDGEMENT

Your Directors thank all Customers, Suppliers, Investors, Bankers and other stakeholders 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 by the employees of the Company at all levels.