Yuken India Ltd Directors Report.

To,

The Members of YUKEN INDIA LIMITED

Your Directors have pleasure in presenting their 45th Annual Report of the Company together with the Audited Financial Statements for the year ended 31st March, 2021.

1. FINANCIAL RESULTS:

The Companys financial performance for the year under review along with previous years figures are given hereunder:

Financial Highlights: Rs. In Lakhs
Particulars

Standalone

Consolidated

Year ended Year ended Year ended Year ended
31.03.2021 31.03.2020 31.03.2021 31.03.2020
Net Income 19,361.68 20,789.52 22,347.01 24,622.27
Total expenditure 17,104.41 19,027.58 19,888.64 22,724.76
Profit/(Loss) before interest, depreciation and tax 2,257.27 1,761.94 2,458.37 1,897.51
Finance cost 814.76 917.95 1,012.69 1,088.09
Depreciation 483.29 426.65 872.18 756.49
Profit/(Loss) Before Tax 959.22 417.34 573.50 52.93
Provision for Taxation (Net of deferred tax) 208.17 (179.56) 65.80 (235.53)
Profit/(Loss) After Tax 751.05 596.90 507.70 288.46
Share of Profit/(Loss) of Associates - - 10.91 13.87
Net Comprehensive Income for the year (23.05) (23.65) (22.94) (24.20)
Total Comprehensive Income for the year 728.00 573.25 495.67 278.13
Total comprehensive income attributable to Controlling interest - - 502.47 288.82
Balance in Statement of profit and loss 16,474.99 16,191.07 15,537.83 15,538.35
Amount available for appropriation 17,202.99 16,764.32 16,040.30 15,827.16
Appropriations:
Equity Dividend paid (72.00) (240.00) (72.00) (240.00)
Tax on Equity Dividend - (49.33) - (49.33)
Balance carried to Balance Sheet 17,130.99 16,474.99 15,968.30 15,537.83

On Standalone basis, the Company has registered a net income of Rs. 19,361.68 lakhs (including income from sale of property located at Patancheru, Hyderabad amounting to Rs. 597.07 lakhs) as compared to Rs. 20,789.52 lakhs of previous year. The total revenue is decreased due to COVID-19 pandemic situation globally.

On Consolidated basis, the Company has registered net income of Rs. 22,347.01 lakhs as compared to Rs. 24,622.27 lakhs of previous year. (Including income from sale of property located at Patancheru, Hyderabad amounting to Rs. 597.07 lakhs)

2. DIVIDEND:

Your Directors recommend payment of a dividend of 6% (Six percent) i.e. Rs. 0.60 (Sixty Paisa only) per equity share of Rs. 10/- each for the year ended 31st March, 2021, subject to the approval of the members at the ensuing Annual General Meeting.

3. IMPACT OF COVID-19 PANDEMIC ON COMPANYS BUSINESS:

The World Health Organization (WHO) declared the outbreak of the Coronavirus Disease (COVID-19) as a global pandemic on 11th March, 2020. Consequent to this, the Government of India declared a nation-wide lockdown on 23rd March, 2020, due to which the Company suspended its operations at all its factories and offices in compliance with the lockdown instructions issued by the Central and State Governments.

Considering the lockdown, the Company has suspended its operations at all manufacturing facilities and offices with effect from 24th March, 2020 to 04th May, 2020. The plant was operational from 05th May, 2020 with minimum employees.

To curb the effects of the COVID-19 pandemic, The Company has undertaken several measures to operate in the safest ways possible.

The recent Second wave of Covid-19 also affected all the industries very badly. On impact of Second wave, due to lock down in the State of Karnataka from mid of April-2021, our Company also operating at a low capacity. We hope very soon we shall see a positive outcome.

4. ANNUAL RETURN:

In accordance with the Companies Act, 2013, the Annual Return in the prescribed format is available at Companys website at https://www.yukenindia.com/report-result/

5. BOARD MEETINGS HELD DURING THE YEAR:

During the year, 6 (Six) meetings of the Board of Directors and one meeting of Independent Directors were held. The details of the meeting are furnished in the Corporate Governance Report.

6. COMPLIANCE ON CRITERIA OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS:

All Independent Directors of the Company have given declarations to the Company under Section 149 (7) of the Companies Act, 2013 that, they meet the criteria of independence as provided in SubSection 6 of Section 149 of the Act and also under the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

The Board is of the opinion that, the Independent Directors of the Company possess requisite qualifications, experience and expertise in the field of manufacturing, finance, auditing, tax, economic, legal and Regulatory matters, Strategic thinking/planning, decision making, leadership, knowledge about the Companys business and protect interest of all stakeholders.

In compliance with the Rule 6(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors have registered themselves with the Indian Institute of Corporate Affairs.

7. REMUNERATION POLICY OF THE COMPANY:

The Remuneration Policy of the Company for appointment and remuneration of the Directors, Key Managerial Personnel and Senior Management of the Company along with other related matters have been provided in the Corporate Governance Report.

As and when need arises for appointment of Director, the Nomination and Remuneration Committee (NRC) of the Company will determine the criteria based on the specific requirements. NRC while recommending candidature to the Board, will take into consideration the qualification, attributes, experience and Independence of the Candidate. Director(s) appointment and remuneration will be as per NRC Policy of the Company.

A Statement of Disclosure of Remuneration pursuant to Section 197 of the Act. Read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is forming part of this report.

8. ANNUAL EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS:

The Board of Directors has carried out an annual evaluation of its own performance, its Committees and Directors pursuant to the requirements of the Act and the Listing Regulations.

Further, the Independent Directors, at their exclusive meeting held during the year, reviewed the performance of the Board, its Chairman and Non- Executive Directors and other items as stipulated under the Listing Regulations.

9. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY:

There has been no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations. All orders received by the Company during the year are of routine in nature which have no significant/material impact.

10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

LOANS:

During the year under review, your Company has not granted any loan within the meaning of Section 186 of the Companies Act, 2013.

Investments:

There are no new investments made during the financial year 2020-21.

Corporate Guarantee:

During the year under review, the Company has not granted any Corporate Guarantees to its Subsidiary/Associate Companies. However, existing Guarantees are renewed and outstanding balances of Corporate Guarantees as on 31st March,2021 are as under.

Rs. in Lakhs
Sl. No. Particulars Name of Bank Outstanding Balance as on 31.03.2021
1 Coretec Engineering India Private Limited HDFC Bank 750
Sumitomo Mitsui Banking Corporation 1,100
2 Grotek Enterprises Private Limited HDFC Bank 600
Sumitomo Mitsui Banking Corporation 1,000

The above loans, guarantees and investments are within the limits prescribed under Section 186 of the Companies Act, 2013.

11. AMOUNT, IF ANY, PROPOSED TO BE TRANSFERRED TO RESERVES:

During the year under review, the Company has not transferred any money towards General Reserve.

12. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

A. TRANSFER OF UNPAID DIVIDEND:

As required under Section 124 of the Companies Act 2013, the unclaimed dividend amount aggregating to Rs. 71,626/- lying with the Company for a period of 7 (Seven) years pertaining to the financial year ended on 31st March, 2013 was transferred during the financial year 2020-21 to the Investor Education and Protection Fund ("IEPF") established by the Central Government.

B. TRANSFER OF SHARES:

As per the provisions of Section 124 of the Companies Act, 2013, 1,350 equity shares of Rs. 10/- each, in respect of which dividend has not been claimed by the members for 7 (Seven) consecutive years or more, have been transferred by the Company to Investor Education and Protection Fund Authority (IEPF) during the financial year 2020-21. Details of shares transferred have been uploaded on the website of IEPF as well as the Company.

13. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, the Statement of Profit & Loss and other documents of the Subsidiary Companies are not being attached to the Balance Sheet of the Company. The consolidated financial statements presented by the Company includes financial results of its Subsidiary and Associate Companies.

The Annual Accounts of the Subsidiary Companies are available on the website of the Company at https://www.yukenindia.com/report-result/

The details of financial performance of Subsidiaries and Associate Companies are furnished as under:

Rs. In Lakhs
Particulars

Subsidiary

Associates

Grotek Enterprises Private Limited. Coretec Engineering India Private Limited. Kolben Hydraulics Limited. Yuflow Engineering Private Limited. Sai India Limited. Bourton Consulting (India) Private Limited.
Total Income
FY 2020-21 4,021.28 2,095.23 420.32 90.97 1,674.76 8.18
FY 2019-20 4,613.18 2,410.07 476.39 11.83 2,049.35 41.05
Total expenditure
FY 2020-21 3,685.15 2,075.15 483.77 109.21 1,475.81 9.87
FY 2019-20 4,328.57 2,370.08 578.26 57.05 1,837.64 41.53
Profit/(Loss) before interest, depreciation and tax
FY 2020-21 336.13 20.08 (63.45) (18.25) 198.95 (1.69)
FY 2019-20 284.61 39.99 (101.87) (45.22) 211.70 (0.48)
Finance cost
FY 2020-21 125.82 130.04 - 0.27 80.35 -
FY 2019-20 82.45 127.34 - 0.32 83.54 -
Depreciation
FY 2020-21 281.58 91.57 10.29 5.45 85.26 4.67
FY 2019-20 235.54 82.33 10.85 3.17 92.39 3.38
Profit/(Loss) before tax and exceptional item
FY 2020-21 (71.27) (201.53) (73.74) (23.97) 33.35 (6.36)
FY 2019-20 (33.38) (169.68) (112.72) (48.71) 35.77 (3.86)
Exceptional Item
FY 2020-21 - - - - - 0.57
FY 2019-20 - - - - -
Provision for taxation (Net of deferred tax)
FY 2020-21 (24.23) (92.68) (25.46) (0.36) (0.23)
FY 2019-20 (8.64) (9.97) (37.22) - (0.92) 0.10
Other comprehensive income for the year
FY 2020-21 (0.97) 1.08 - - (2.31) -
FY 2019-20 (0.12) (0.43) - - 0.46
Profit/(Loss) after tax(Including other comprehensive income)
FY 2020-21 (48.01) (107.77) (48.28) (23.97) 31.40 (5.56)
FY 2019-20 (24.86) (160.14) (75.50) (48.71) 37.15 (3.96)
Earnings per share (in Rs.)
FY 2020--21 (0.94) (3.01) (4.83) (1.20) 3.75 (4.40)
FY 2019-20 (0.49) (20.16) (7.55) (2.44) 4.08 (3.14)

Statement containing salient features of financial statements of subsidiaries and associate Companies in Form AOC-1 is enclosed herewith as Annexure-1 forming part of this report.

14. RELATED PARTY TRANSACTIONS:

The Board of Directors has adopted a policy on Related Party Transactions. The objective is to ensure proper approval, disclosure and reporting of transactions as applicable, between the Company and any of its related parties. All contracts or arrangements with related parties, entered into or modified during the financial year were at arms length basis and in the ordinary course of the Companys business.

Transactions with related parties, as per requirements of Indian Accounting Standard 24 are disclosed in the Note No. 44 of the Notes forming part of the financial statements in the Annual Report.

Your Companys Policy on Related Party Transactions, as adopted by your Board, can be accessed on the Companys website.https://www.yukenindia.com/corporate-governance-and-code-of-conduct/

Particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contracts or arrangements in Form AOC-2 is enclosed herewith as Annexure-2, forming part of this report.

15. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY FROM THE END OF FINANCIAL YEAR AND TILL THE DATE OF THIS REPORT:

The Company has received letter dated 15.03.2021 on 20.03.2021 from Regional Director, Hyderabad w.r.t return back of our application with respect to Scheme of Amalgamation of Yuflow Engineering Private Limited with Yuken India Limited due to some reasons.

In view of the above, your Board of Directors at their meeting held on 15th April, 2021 approved the draft Scheme of Amalgamation ("Scheme") of Yuflow Engineering Private Limited (Wholly Owned Subsidiary) with Yuken India Limited and their respective Shareholders & Creditors. Such Scheme was presented under

Section 230 - 232 and other applicable provisions of the Companies Act, 2013 and the rules & regulations made thereunder. The approval of the Scheme is subject to sanction of the Scheme by the National Company Law Tribunal (NCLT).

Apart from this, there has been no other material changes and commitments, affecting the financial performance of the Company occurred between the end of the financial year of the Company to which the Financial Statements relate and the date of this Report.

16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Pursuant to provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014. The details are as under:

1. Conservation of Energy:

A. Steps taken or impact on conservation of energy:

• Replaced conventional light fixtures with energy efficient LED light fixtures in the plant.

• Power factor was maintained at 0.99 by identifying and replacing faulty capacitors, increasing the frequency of periodic/preventive maintenance of capacitor banks.

• Installation of Servo Stabilizer in Shop floor and certain office lighting reduced maintenance cost and saving in energy.

• Reduction in total energy footprint through various capital projects ranging from installation of energy efficient pumps, solar street lights in walking area and factory areas, etc.

• Replacement of old age screw compressor having low working efficiency with new air compressor.

• For natural lighting, transparent sheet has been installed in all the plants to reduce energy consumption.

• To reduce the temperature inside the shop floor, various types of plants has been planted vertically on the walls.

2. Foreign Exchange Earnings and Outgo:

A. Foreign Exchange Earnings: Rs. in lakhs
Sl. No. Particular Year ended 31.03.2021 Year ended 31.03.2020
1 Export Sales 254.33 234.18
2 Other Income 35.51 6.24

 

B. Expend iture in Foreign Currency: Rs. in lakhs
Sl. No Particular Year ended 31.03.2021 Year ended 31.03.2020
1 Brand fee 65.48 78.48
2 Others - 40.77

 

C. Remittance in Foreign Currency on Account of: Rs. in lakhs
Sl. No Particular Year ended 31.03.2021 Year ended 31.03.2020
1 Dividend 28.80 96.00

3. Research and Development (R&D):

The Company continues to invest in R&D activities towards development of new products and applications, improvement in operating efficiencies and reduction in manufacturing costs.

The Company has developed certain pumps, valves etc., which are energy efficient and as per the customer requirements. The core idea of the Companys investments in R&D is to initiate product upgradations and to develop new products that would give an edge over competitors.

(a) Specific areas in which R&D is carried out by the Company:

i. Upgradation and modification of chip compacting machine which was originally designed by Yuken Kogyo Co. Ltd., Japan.

ii. Several concepts of energy saving hydraulic power units have been designed to suit customer requirements.

iii. Development of high pressure valves and pumps for steel industries.

iv. The Company is in the process of developing various types of Electro Hydraulic Drives and equipments for the purpose of construction and mobile segments.

(b) Benefits derived as a result of above R&D efforts:

Special products developed to meet specific requirements of customers which enable your Company to develop niche markets for growth.

(c) Future plan of action:

• Development of additional range of products.

• Strong focus on employee involvement to eliminate waste in operations through focused initiatives.

• Focus on process improvements to enable the Company to penetrate into the export market.

(d) Expenditure on R&D:

There is a continuous increase in R&D expenditure as the scope of activities carried out keeps on increasing.

4. Technology Absorption, Adaptation and Innovation:

(a) Efforts in brief, made towards technology absorption, adaptation and innovation:

• Special models of energy saving pumps and valves have been designed to meet specific needs of customers and these have enabled us to extend our customer base to include a wider range of industries.

• Indigenization is a continuous ongoing effort, the Company is focusing on Make in India concept and Atmanirbhar Bharat Abhiyan introduced by Government of India.

(b) Benefits derived as a result of the above efforts:

• Dependency on imports is minimized / import substitution.

• Reduction of material cost.

• Improvement in Quality and product performance characteristics.

• Ability to innovate and produce new products.

(c) Information regarding technology imported during the last five years reckoned from the beginning of the financial year:

NIL

17. DETAILS OF CHANGE IN NATURE OF BUSINESS, IF ANY:

During the year, there was no change in the nature of business of the Company.

18. THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR:

There is no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2013 as on 31st March, 2021.

19. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF:

Not Applicable.

20. DEPOSITS:

During the year under review, your Company did not accept any deposit within the meaning of the provisions of Chapter V - Acceptance of Deposits by Companies read with the Companies (Acceptance of Deposits) Rules, 2014.

Pursuant to the Ministry of Corporate Affairs notification amending the Companies (Acceptance of Deposits) Rules, 2014, the Company has filed with the Registrar of Companies the requisite returns for outstanding receipt of money/loan by the Company, which are not considered as deposits.

21. BOARD OF DIRECTORS:

The Board of Directors comprises of a combination of Executive/ Non-Executive Directors and Independent Directors who are professionals in their respective fields and bring in a wide range of skills, experience and expertise. The composition of Board is as under;

Sl. No. Name of the Director Designation
1 Capt. N S Mohanram Independent Director
2 Mr. R Srinivasan Independent Director
3 Dr. Premchander Independent Director
4 Mrs. Indra Prem Menon Independent Director
5 Mr. Hidemi Yasuki Non-Executive Director
6 Mr. Hideharu Nagahisa Non-Executive Director
7 Mr. Kenichi Takaku Non-Executive Director
8 Mrs. Vidya Rangachar Non-Executive Director
9 Mr. C P Rangachar Managing Director

Mr. Kenichi Takaku appointed as an Additional Director of the Company with effective from 09th May, 2020 and re-designated as Director on 24th September, 2020.

At the Annual General Meeting held on 24th September, 2020, Mr. C P Rangachar - Managing Director has been re -appointed for a period of 5 years with effect from 01st May, 2020 to 30th April, 2025.

Mrs. Indra Prem Menon appointed as an Additional, Lady Independent, Non- Executive Director of the Company with effective from 24th September, 2020. She shall hold the office up to the date of ensuing Annual General Meeting of the Company. The Board recommends for her appointment as Lady Independent, Non-Executive Director for period of 5 years with effect from 24th September, 2020, at the ensuing Annual General Meeting.

Mr. Hideharu Nagahisa, Non-Executive Director, retires by rotation and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

22. KEY MANAGERIAL PERSONNEL ("KMP"):

Pursuant to provisions of Section 203 of the Companies Act, 2013, following persons are Key Managerial Personnel as on 31st March,2021:

Sl. No. Name of the KMP Designation
1 Mr. C P Rangachar Managing Director
2 Mr. K Gopalkrishna Executive Director
3 Mr. H M Narasinga Rao Chief Financial Officer
4 Mr. A Venkatakrishnan Chief Executive Officer
5 Mr. Vinayak Hegde Company Secretary

Mr. A Venkatakrishnan appointed as a Chief Executive Officer (CEO) of the Company with effective from 06th August, 2020.

23. INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The details on Internal Control Systems and their adequacy are provided in the Managements Discussion and Analysis which forms part of this Report.

24. RISK MANAGEMENT POLICY:

In compliance with the provisions of Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Risk Management Committee has been constituted by the Board. However, provisions of Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to the Company for the FY 2020-21.

Risks are identified by the respective departmental heads. Each Strategic Business Unit (SBU) & Corporate will carry out the Risk Assessment for each identified risk, as applicable to them and will document the results for each risk in the Risk Register. Action will be taken based on the possible impact of the identified risk.

The Company has mitigated some of the risks as mentioned below.

a. Measures taken by IT department of the Company to mitigate risk relating to security of data and systems of the Company.

b. Security measures in the manufacturing units of the Company to prevent accidents.

c. Installation of CC TV cameras and siren at factory for safety of the employees.

d. Measures taken by the Company to mitigate foreign exchange transaction risks.

25. CORPORATE SOCIAL RESPONSIBILITY ("CSR") INITIATIVES:

The Company has a Policy on Corporate Social Responsibility and has constituted a CSR Committee as required under the Act, for implementing the various CSR activities. Composition of the Committee and other details are provided in Corporate Governance Report. Education, Health Care, Protection of Indian Art and Culture, Animal Welfare, Rural Development, disaster management including relief etc., are the focal areas under the CSR Policy.

The Company has implemented various CSR projects directly and/ or through implementing partners and the projects undertaken by the Company are in accordance with Schedule VII of the Act. The Company has spent an amount of Rs. 16,26,226/- for identified CSR activities during the financial year ending 31st March, 2021. A detailed Report on CSR is enclosed as Annexure-3 forming part of this report.

26. DIRECTORS RESPONSIBILITY STATEMENT:

To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3) and 134 (5) of the Act, that:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) The directors had selected such accounting policies 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 as at the end of the financial year and of the profit and loss of the Company for that period;

(c) The Directors had taken proper and sufficient care 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) The Directors had prepared the annual accounts on a going concern basis;

(e) The Directors had laid down internal financial controls to be followed by the Company as applicable to listed companies and such internal financial controls are adequate and were operating effectively; and

(f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

27. SECRETARIAL STANDARDS:

The Company complies with all the applicable mandatory secretarial standards issued by Institute of Company Secretaries of India.

28. COMMITTEES OF THE BOARD:

As on 31st March, 2021, the Board had 4 (Four) committees: The Audit Committee, the Corporate Social Responsibility Committee, the Nomination and Remuneration Committee, and the Stakeholders Relationship Committee. A majority of the committees consists entirely of independent directors. During the year, all recommendations made by the committees were approved by the Board. A detailed note on the composition of the Board and

its committees are provided in the Corporate governance report, which forms part of this report.

29. WHISTLE BLOWER POLICY:

The Company has a Vigil Mechanism for Directors and Employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of conduct. The mechanism provides for adequate safeguards against victimization of Director(s) and Employee(s) who avail of the mechanism.

The Company has published the Whistle Blower Policy in its website, a web link of which is as under: https://www.yukenindia.com/corporate-governance-and-code-of- conduct/

30. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT 2013:

The Company has zero tolerance towards sexual harassment at the work place and has adopted a policy on prevention, prohibition and redressal of sexual harassment at work place in line with the provisions of the Sexual Harassment of women at work place (Prevention, Prohibition and Redressal) Act, 2013 and rules made thereunder. As required under law, an internal Compliance Committee has been constituted for reporting and conducting inquiry into the complaints made by the victim on the harassments at the work place. During the year, no complaint of sexual harassment has been received.

31. DETAILS OF REVISION OF FINANCIAL STATEMENTS:

During the year, there were no revision of the financial statements of the Company.

32. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:

As part of the Familiarization Programme, Independent Directors of the Company have been made aware of the following information:

a. Rules and regulations pertaining to their appointment as Independent Directors,

b. Duties and responsibilities of the Independent Directors towards the Company and its stakeholders,

c. Code of conduct to be followed by them and

d. Companys policies and procedures.

33. DETAILS OF REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:

a. Ratio of remuneration of each Director/KMP to the median employees remuneration and the percentage increase in the median remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year 2020-21:

Name of the Director / Key Managerial Personnel (KMP) Remuneration for the financial year 2020-21 (In Rs.) Remuneration for the financial year 2019-20 (In Rs.) % increase (decrease) in remuneration in the financial year 2020-21 Ratio of remuneration of each Director/ KMP to that of Median remuneration of employees
Mr. C P Rangachar, Managing Director 62,23,252 69,19,876 (10.07) 11.17:1
Capt. N S Mohanram, Non-Executive, Independent Director 2,63,250 2,37,917 10.65 0.47:1
Mr. R Srinivasan, Non-Executive, Independent Director 2,79,250 2,09,917 33.03 0.50:1
Dr. Premchander, Non-Executive, Independent Director 2,47,250 2,57,917 (4.14) 0.44:1
Mrs. Indra Prem Menon, Non-Executive, Lady Independent Director w.e.f 24.09.2020 1,03,250 - - 0.19:1
Mrs. Vidya Rangachar, Non-Executive Director 1,51,250 1,29,917 16.42 0.27:1
Mr. Hideharu Nagahisa, Non-Executive Director 1,19,250 57,916 105.90 0.21:1
Mr. Hidemi Yasuki, Non-Executive Director 1,19,250 57,916 105.90 0.21:1
Mr. Kenichi Takaku, Non-Executive Director, appointed w.e.f 09.05.2020 1,19,250 - - 0.21:1
Mr. K Gopalkrishna , Executive Director 56,88,023 56,54,562 0.59 10.21:1
Mr. H M Narasinga Rao, Chief Financial Officer 48,90,708 47,61,972 2.70 8.78:1
Mr. A Venkatakrishnan, Chief Executive Officer, appointed w.e.f 06.08.2020 26,92,628 27,91,752 (3.55) 4.83:1
Mr. Vinayak Hegde, Company Secretary 6,84,620 5,92,173 15.61 1.23:1

Notes:

1. The Net Profit after tax has increased by Rs. 154.15 lakhs (excluding other comprehensive income) as compared to the previous year and the remuneration of the Managing Director has decreased by 10.07%.

2. Remuneration paid /payable to Managing Director and NonExecutive Directors for the financial year 2020-21 is inclusive of Salary, Commission and Sitting Fees.

3. All Non-Executive and Independent Directors are eligible for Commission of 1% on the Net profit of the Company, The Net profit is calculated as per the provisions of Section 198 of the Companies Act, 2013.

b. The number of permanent employees on the rolls of the Company as on 31st March, 2021 was 317 (previous year :313).

c. Percentage decrease in median remuneration of employees for the financial year is 19.16%.

d. Average percentage increase/(decrease) already made in the salaries of employees other than the key 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 remuneration:

• Percentage decrease of salaries of employees other than the key managerial personnel in the financial year: 15.73% as compared to previous year.

• Percentage Decrease in the key managerial remuneration: 2.61% as compared to previous year.

Impact of Covid-19 pandemic on performance of the Company for the FY 2020-21, the Company has reduced the manpower and cut down the existing salary of the employees Hence, total salary is reduced as compared to previous year.

e. The key parameters for any variable component of remuneration availed by the Directors.

Commission payable to Directors has calculated on the basis of net profits of the Company under the provisions of Section 197 of the Companies Act, 2013 and based on the Nomination and Remuneration Policy of the Company. The Directors are eligible for the commission on the net profit of the Company for the financial year 2020-21.

f. The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year: NIL

It is hereby affirmed that the remuneration paid to the Directors is as per the Nomination and Remuneration Policy of the Company.

g. Information as per Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

i. Employed throughout the financial year and were in receipt of remuneration for the year, in the aggregate of not less than Rs. 102 lakhs - NIL

ii. Employed for a part of the financial year and were in receipt of remuneration for any part of the year, at a rate which, in the aggregate, was not less than Rs. 8.50 lakhs per month - NIL

iii. Employed throughout the financial year or part thereof, was in receipt of remuneration in the year in excess of that drawn by the managing Director and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the Company - NIL

34. SHARE CAPITAL:

The Board provides following disclosures pertaining to Companies

(Share Capital and Debentures) Rules, 2014:

Sl. No. Particulars Disclosure
1 Issue of Equity shares with differential rights Nil
2 Issue of Sweat Equity shares Nil
3 Issue of employee stock option Nil
4 Provision of money by Company for purchase of its own shares by trustees for the benefit of employees Nil

The Authorized share Capital of the Company is Rs. 15,00,00,000 consisting of 1,50,00,000 Equity Shares of Rs. 10/- each and paid up equity share capital of the Company is Rs. 12,00,00,000 consisting of 1,20,00,000 equity shares of Rs. 10/- each as on 31st March, 2021.

During the year under review, the Company has not issued any shares or any convertible instruments.

35. COST AUDITORS:

Pursuant to the provisions of Section 148 of the Companies Act, 2013, read with The Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, the Board of Directors, on the recommendation of the Audit Committee, have appointed M/s. Adarsh Sharma & Co, Cost Accountants, Bengaluru, as Cost Auditors for conducting Cost Audit for the financial year 2021-22. Your Directors proposed to ratify the remuneration payable to them for the financial year 2021-22 at the ensuing Annual General Meeting.

A resolution seeking Members approval for remuneration payable to Cost Auditor forms part of the Notice of the Annual General Meeting of the Company and same is recommended for your consideration.

36. STATUTORY AUDITORS:

Pursuant to provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, M/s. Walker Chandiok and Co., LLP, Chartered Accountants (Firm Registration No.001076N /N500013), were appointed as Statutory Auditors of the Company for a term of 5 years and to hold the office up to the conclusion of 46th Annual General Meeting of the Company to be held in the year 2022.

There are no qualifications in their report for the financial year ended 31st March, 2021. Further, the Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Act. The Auditors Report is enclosed with the financial statements.

37. SECRETARIAL AUDITORS:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules made there under, the Board of Directors has appointed M/s. Joseph & Chacko LLP, Practicing Company Secretaries to undertake the Secretarial Audit of the Company for FY 2020-21. The Secretarial Auditors Report for FY 2020-21 does not contain any qualifications. The Report of the Secretarial Audit is annexed herewith as Annexure 4 forming part of this report.

The Board of Directors have re-appointed M/s. Joseph & Chacko LLP, Company Secretary in Practice to conduct the Secretarial Audit for FY 2021-22 also.

38. CORPORATE GOVERNANCE REPORT AND CERTIFICATE:

Your Company is committed to maintain high standards of Corporate Governance. A report on Corporate Governance along with a Certificate from the Statutory Auditors on compliance of Corporate Governance is attached as Annexure -5 forming part of this report. The certificate does not contain any qualifications.

39. BUSINESS RESPONSIBILITY REPORT:

In terms of Regulation 34 of SEBI (LODR) Regulations, the business Responsibility Report for the year 2020-21 describing the initiatives taken from environment, social and governance perspectives, in the prescribed format is attached as Annexure - 6 forming part of this report.

40. MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis (MDA) forms part of the Annual Report setting out an analysis of business including the industry scenario, performance, financial analysis and risk mitigation. Refer page No. 12

41. CONSOLIDATED FINANCIAL STATEMENTS:

In accordance with the Accounting Standard Ind AS-110 on "Consolidated Financial Statements" read with Accounting Standard Ind AS-28 on "Accounting for Investments in Associates" the audited Consolidated Financial Statements are provided in the Annual Report.

42. FORWARD-LOOKING STATEMENTS:

This report contains forward-looking statements that involve risks and uncertainties. When used in this report, the words "anticipate", "believe" "estimate", "expect" "intend" "will" and other similar expressions as they relate to your Company and / or its business are intended to identify such forward-looking statements.

Your Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performance or achievements could differ materially from those expressed or implied in such forward looking statements. This report should be read in conjunction with the financial statements included herein and notes thereto.

43. ACKNOWLEDGEMENTS:

Your Directors place on record their sincere thanks to the Customers, bankers, business associates, consultants, Regulatory authorities, Stock Exchanges, various Government Authorities and all the stakeholders for their continued support extended to your Companys activities during the year. Your Directors also acknowledge their gratitude to the Shareholders of the Company, for their continuous support and confidence reposed on the Company. Your Directors wish to place on record their appreciation of the dedicated and untiring hard work put by the employees at all levels.

For and on behalf of the Board of Directors
Capt. N S Mohanram R Srinivasan C P Rangachar
Place: Bengaluru Director Director Managing Director
Date: 07th June, 2021 (DIN:02466671) (DIN:00043658) (DIN: 00310893)