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EQUITY - MARKET SCREENER

Escorts Ltd
Industry :  Automobiles - Tractors
BSE Code
ISIN Demat
Book Value()
500495
INE042A01014
422.1895568
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
ESCORTS
27.54
25169.57
EPS(TTM)
Face Value()
Div & Yield %
67.78
10
0.4
 

As on: Jan 18, 2022 03:31 PM

Dear Shareholders,

Your Directors have pleasure in presenting the Seventy Fifth Annual Report of the Company along with Company's audited financial statements (standalone and consolidated) for the financial year ended on March 31, 2021.

Financial Results

(Rs. crores)

Standalone

Consolidated

Particulars Year ended on March 31, 2021 Year ended on March 31, 2020 Year ended on March 31, 2021 Year ended on March 31, 2020
Revenue from operations 6929.29 5760.95 7,014.42 5,810.09
Other income 154.56 92.25 160.38 97.60
Total income 7083.85 5853.20 7,174.80 5,907.69
Profit from operations before Interest, Depreciation, Exceptional Items & Tax 1283.79 768.07 1,286.40 758.92
Finance Cost 10.98 15.46 13.34 17.23
Profit from operations before Depreciation, Exceptional Items & Tax 1272.81 752.61 1,273.06 741.69
Depreciation & Amortisation 115.70 104.55 118.28 107.22
Profit from operations before Exceptional Items & Tax 1157.11 648.06 1,154.78 634.47
Exceptional Item - (9.22) - (9.22)
Profit from operations before Tax 1157.11 638.84 1,154.78 625.25
Tax Expense 283.05 153.30 283.15 153.53
Profit from operations after Tax 874.06 485.54 871.63 471.72
Net profit for the period 874.06 485.54 871.63 471.72

Financial Performance/ State of Company Affairs

The brief highlights of the Company's performance (Standalone) for the financial year ended March 31, 2021 are:-

Your Company sold 106741 tractors during the year under review as against 86018 tractors sold during the last financial year. The directors are also pleased to inform that in fiscal 2020-21, for the first time ever in any financial year, your Company has crossed the 1,00,000 unit landmark in terms of tractor sales and tractor production in India.

The brief highlights of the Company's performance (Consolidated) for the financial year ended March 31, 2021 are:-

• Total income of the Company for FY 2021 stood at Rs.7,174.80 crores (' 5,907.69 crores in FY 2020)

• Profit from operations before Interest, Depreciation, Exceptional Items & Tax stood at Rs.1,286.40 crores.

• Profit from operations before Tax (PBT) stood at Rs.1,154.78 crores. Net profit for the period stood at Rs.871.63 crores.

The details on the individual businesses of the Company are provided in the Management Discussion & Analysis section provided in this annual report. On our response to COVID-19 pandemic, please refer sustainability report at page 70.

Management Discussion & Analysis

In terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred as the "SEBI Listing Regulations"), the Management Discussion and Analysis is set out in this Annual Report and provides a detailed analysis on the performance of individual businesses and their outlook.

Dividend

Based on the Company's performance, your Directors are pleased to recommend, for approval of the members, the following dividend for the financial year ended March 31, 2021:

a. Normal Final Dividend @ 50% per share of Face Value of Rs.10/- each (i.e. Rs.5.00 per share)

b. Additional Special one-time Platinum Jubilee (75th Year) Dividend @ 25% per share of Face Value of Rs.10/- each (i.e. Rs.2.50 per share)

c. Total Dividend @ 75% per share i.e. Rs.7.50 per equity share payable on all outstanding shares except on the equity shares held by Escorts Benefit & Welfare Trust.

The dividend payout is subject to the approval of members at the ensuing Annual General Meeting (AGM).

The dividend payout for the period under review has been formulated in accordance with shareholders' aspirations and the Company's Dividend Distribution Policy to pay sustainable dividend linked to long-term growth objectives of the Company to be met by internal cash accruals.

The dividend distribution policy is available on our website at https://www.escortsaroup.com/investors/aovernance.html.

Employee Stock Option Scheme

The Escorts Employees Stock Option Scheme ("Scheme") is in line with the SEBI (Share Based Employee Benefits) Regulations, 2014 ("SBEB Regulations") and there were no material changes to the scheme during the financial year 202021. The Scheme is being implemented in accordance with the SBEB Regulations and the resolutions passed by the members. The auditors certificate would be available during the Annual General Meeting for inspection by members. The details as required to be disclosed under the SBEB Regulations would be available on the Company's website at www.escortsgroup.com.

The Board of Directors in its meeting held on May 14, 2021 on the recommendation of the Nomination, Remuneration and Compensation Committee meeting held on May 11, 2021, has approved the changes in Employee Stock Option Scheme (‘Scheme') of the Company subject to the approval of shareholders of the Company.

Directors and Key Managerial Personnel

In accordance with the provisions of Companies Act, 2013 (hereinafter referred as "the Act") and Articles of Association of the Company, Mr. Shailendra Agrawal (DIN: 03108241) and Ms. Nitasha Nanda (DIN: 00032660), Directors retire by rotation at the ensuing AGM and being eligible, offer themselves for re-appointment.

The Board of Directors in its meeting held on July 16, 2020 co-opted Mr. Harish N. Salve (DIN: 01399172) as an Additional and Independent Director on the Board of the Company on the recommendations of Nomination and Remuneration Committee. The Board considered the domain knowledge and experience of Mr. Harish N. Salve in the areas of constitutional, commercial and taxation law while approving his appointment as an Independent Director on the Board of the Company. The Board is of the opinion that Mr. Harish N. Salve possesses requisite qualification, experience, expertise and holds high standard of integrity. Mr. Salve was regularised as Independent Director in the Annual General Meeting held on August 24, 2020.

The Board of Directors in its meeting held on July 16, 2020, appointed Mr. Dai Watanabe (DIN: 08736520) and Mr. Yuji Tomiyama (DIN: 08779472) as an additional directors on the Board of the Company based on the recommendations of the Nomination and Remuneration Committee of the Company and pursuant to the Share Subscription Agreement dated March 20, 2020 read with the amendment agreement dated July 15, 2020 ("SSA"), with Kubota Corporation, Japan and certain Specified Promoters. The shareholders of the Company in the Annual General Meeting held on August 24, 2020 had approved the regularization of Mr. Watanabe and Mr. Tomiyama as the Non-Executive Directors of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with criteria of independence as prescribed under subsection (6) of Section 149 of the Act and under Regulation 16(1)(b) & 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 (hereinafter referred as "the Listing Regulations"). The policy on Appointment and Removal of Director's and Members of Senior Management is attached as Annexure - A and forms an integral part of this Report.

The Company has devised a Policy for performance evaluation of Independent Directors, Board, Board Committees and individual Directors, which includes criteria for performance evaluation of the Non-Executive and Executive Directors. In accordance with the Policy, a process was followed by the Board for evaluation of its own performance and that of its Committees and individual Directors. The remuneration policy for directors, key managerial personnel, senior management and other employees is annexed as Annexure - B and forms an integral part of this Report.

The Company has devised a process whereby various presentations/ programs are being conducted to familiarise the Directors with various developments at Industry level, new business initiatives and organisation strategies etc.

The details of programme for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company - www.escortsgroup.com.

The Company recognises and embraces the importance of a diverse board in its success. Your Company believes that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help it retain its competitive advantage.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Act read with Companies (Accounts) Rules, 2014 are provided as Annexure - C and forms an integral part of this Report.

Corporate Governance

Corporate Governance is about maximising shareholders value, ethically and sustainably. At Escorts the goal of corporate governance is to ensure fairness for every stakeholder. Your Company believes that strong corporate governance is critical to enhancing and retaining investor trust. Your Company also endeavours to enhance long term shareholder value and respect minority rights in all its business decisions.

Your Company reaffirms its commitment to the good corporate governance practices and has adopted the Code of Business Conduct which has set out the systems, processes and policies conforming to international standards. Pursuant to Regulation 34(3) of the SEBI Listing Regulations, Corporate Governance Report and Auditors' Certificate regarding compliance of conditions of Corporate Governance are enclosed as Annexure - D and forms an integral part of this Report.

Corporate Social Responsibility (CSR)

The key philosophy of all CSR initiatives of the Company is to make CSR a key business process for sustainable development of the society. The initiatives aim at enhancing welfare measures of the society based on the immediate and long term social and environmental consequence of its activities.

The Company intends to undertake other need-based initiatives in compliance with Schedule VII of the Act.

The CSR Policy may be accessed on the Company's website www.escortsgroup.com under Investors Information Section. During the year, the Company has spent Rs.11.82 crores. ^Including amount transferred to unspent CSR account (refer note 30 of the standalone financial statements)

The Annual Report on CSR activities is enclosed as Annexure - E and forms an integral part of this Report.

Consolidated Financial Statements

The Consolidated Financial Statements have been prepared in accordance with the Act and Indian Accounting Standard (IND AS) - 110 applicable to the Consolidated Financial Statements read with IND AS-28 on Accounting for Investments in Associates and IND AS-31 on Financial Reporting of Interests in Joint Ventures issued by The Institute of Chartered Accountants of India. The Audited Consolidated Financial Statements along with the Auditors' Report thereon are annexed with this Report.

Subsidiaries, Joint Ventures and Associate Companies

The statement in Form AOC-1 containing salient features of financial statements of subsidiaries, associate and joint venture companies prepared in accordance with Section 129 of the Act read with Rule 5 of Companies (Accounts) Rules, 2014, forms an integral part of this Report. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiaries, associate and joint venture companies.

During the financial year ended on March 31, 2021, the Company has infused additional equity capital in the following Companies at different point of times:

1. Escorts Crop Solutions Limited, Subsidiary

2. Tadano Escorts India Private Limited, Joint Venture

3. Escorts Kubota India Private Limited, Joint Venture

The Company has also entered into another Joint Venture with Kubota Corporation, Japan during the year. The Company has made an investment of Rs.90 crores being 40% stake in the Equity Capital of Kubota Agricultural Machinery India Private Limited being the Joint Venture of your Company with Kubota Corporation.

The Company will make available the Annual Accounts of its subsidiaries, associate and joint venture companies and related information to the members of the Company who may be interested in obtaining the same. The annual accounts of its subsidiaries, associate and joint venture companies will also be available for inspection.

Further, the Company along with other shareholders of Escorts Securities Limited ("ESL"), the subsidiary of Escorts Limited, have entered into a Share Purchase Agreement ("SPA") with M/s. Choice Equity Broking Private Limited ("the Acquirer'') a wholly owned Subsidiary of M/s. Choice International Limited, to sell and transfer their entire shareholding in ESL to the Acquirer, subject to obtaining all applicable regulatory approvals. Upon completion of the aforesaid transaction in terms of the SPA, Escorts Limited will sell and transfer its entire 40.444% shareholding in ESL to the Acquirer and ESL will cease to be subsidiary of the Company.

The details of the above investments/ disinvestment are provided in the note 7 & 16 of the Notes to Accounts of Standalone Financial Statements of the Company.

Contracts and Arrangements with Related Parties

All contracts/ arrangements/ transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on the materiality of related party transactions.

The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act in the prescribed Form AOC-2 is appended as Annexure - F to this report.

The Policy on materiality of related party transactions and dealing with related party transactions may be accessed on the Company's website www.escortsgroup.com under Investors Information Section.

Your Directors draw attention of the members to note 47 in the notes to accounts in the standalone financial statement and to note 47 in the notes to accounts in the consolidated financial statement which sets out related party disclosures.

Auditors and Auditors' Report Statutory Auditors

Pursuant to the provisions of Section 139 of the Act read with Companies (Audit and Auditors) Rules, 2014, the shareholders of the Company in the 71st AGM held on September 21, 2017 had appointed M/s Walker Chandiok & Co LLP, Chartered Accountants, New Delhi (Firm Registration No. 001076N/ N500013) as Statutory Auditors of the Company for a period of 5 years i.e. upto the conclusion of AGM to be held in the year 2022.

In accordance with the Companies (Amendment) Act, 2017 enforced on May 7, 2018 by MCA, the appointment of Statutory Auditors is not required to be ratified by members at every AGM.

The observations and comments given by M/s. Walker Chandiok & Co LLP, Chartered Accountants, Statutory Auditors in their report read together with notes to Accounts for the year ended March 31, 2021 are self-explanatory and hence, do not call for any further comments under Section 134 of the Act.

The Statutory Auditors of the Company have not reported any fraud as specified in Section 143(12) of the Act.

Cost Auditors

The Board of Directors of the Company has re-appointed M/s. Ramanath Iyer and Co., Cost Accountants, New Delhi (Firm Registration No. 000019), Cost Auditors of the Company under Section 148 of the Act, for conducting the audit of cost records for the financial year 2021-22.

The due date of filing the Cost Audit Report for the year ended on March 31, 2020 was September 30, 2020 and the same had been filed on August 24, 2020.

Further, this is to confirm that the requirement of maintaining cost records as per Section 148(1) of the Act is applicable to the Company and accordingly, the Company has made and maintained cost records.

Secretarial Auditors

The Board of Directors of the Company had appointed M/s. Jayant Gupta and Associates, Practicing Company Secretaries to conduct secretarial audit of the Company for the financial year 2020-21.

The Secretarial Audit Report for the financial year ended March 31, 2021 is enclosed as Annexure - G and forms an integral part of this Report.

The observations and comments given by the Secretarial Auditors in their report are self-explanatory and hence, do not call for any further comments under Section 204(3) of the Act.

The Board has also re-appointed M/s. Jayant Gupta and Associates, Practicing Company Secretaries to conduct secretarial audit of the Company for the financial year 2021-22.

Risk Management

The Risk Management Committee of the Board has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company's enterprise wide risk management framework; and (b) Overseeing that all the risks that the organisation faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks.

The Company has laid down a Risk Management Policy and the same is available on the website of the Company at https:// www.escortsaroup.com/investors/aovernance.html

The details of constitution of Risk Management Committee of the Company is provided in Report on Corporate Governance at Annexure - D of the Directors' Report.

Internal Financial Control and its Adequacy

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, the safeguarding of its assets, the prevention and detection of fraud, error reporting mechanisms, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

The Company has in place adequate internal financial controls for ensuring the orderly and efficient conduct of its business.

During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

Disclosures Meetings of the Board

Eight meetings of the Board of Directors were held during the year. For further details, please refer Report on Corporate Governance annexed as Annexure - D to this Report.

Audit Committee

For constitution and other details of the Audit Committee, please refer Report on Corporate Governance annexed as Annexure-D to this Report.

All the recommendations made by the Audit Committee were accepted by the Board.

Extracts of Annual Return

The extracts of the Annual Return in Form MGT-9 is available on the Company's website at www.escortsgroup.com. The Annual Return for Financial Year 2019-20 is also available on the Company's website at www.escortsgroup.com.

Vigil Mechanism

The Company has adopted a Whistle Blower Policy establishing vigil mechanism for Directors and Employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct. The mechanism provides for adequate safeguards against victimisation of effected Director(s) and Employee(s). In exceptional cases,

Directors and Employees have direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

The Whistle Blower Policy is available on Company's website at https://www.escortsgroup.com/investors/ governance.html

Registrar and Share Transfer Agent

The Share Transfer and related activities are being carried out by M/s KFin Technologies Private Limited (earlier Karvy Fintech Private Limited), Registrar and Share Transfer Agent from the following address:-

M/s KFin Technologies Private Limited Tower B, Plot No. 31-32, Selenium Building, Gachibowli, Financial District, Nanakramguda, Hyderabad-500032, Telangana

General Reserves

An amount of Rs.0.21 crores (previous year: 0.33 crores) transferred to general reserves on account of vested employees stock options lapsed during the year.

Change in Share Capital Preferential Issue

During the year, the Board of Directors of the Company had approved the allotment of 1,22,57,688 Equity Shares of Rs.10/- each at a premium of Rs.840/- each for a total consideration of Rs.1041.90 crores to M/s Kubota Corporation, Japan.

The reporting on the utilisation of funds raised through preferential allotment is as follows:

Original Object Modified Object, if any Original Allocation Modified allocation, if any Funds Utilised Amount of Deviation/ Variation for the quarter according to applicable object Remarks if any
For the Agri Machinery Business of the Company i.e. the business of manufacturing, assembly, sales, marketing, financing, servicing, research and development of: (a) tractors; (b) construction equipment (i.e., backhoe loaders and other items to be mutually agreed between Promoters
and Kubota Corporation); (c) implements; (d) transmission for tractors, construction equipment (i.e., backhoe loaders and other items to be mutually agreed between the Promoters and Kubota Corporation) and implements; and (e) spare parts of the items referred in (a), (b), (c) and (d), and for the manufacture of engines by the Company Not Applicable ' 1041.90 crores NIL ' 142.30 crores NIL

Capital Reduction

During the year, the Audit Committee and Board of Directors in their meeting held on July 15, 2020 separately had approved the proposal of Capital Reduction of 1,22,57,688 Equity Shares of Rs.10/- each of the Company held by Escorts Benefit and Welfare Trust without payment of any consideration.

The Shareholders of the Company approved by way of Postal Ballot on February 21, 2021 the scheme of Capital Reduction of 1,22,57,688 Equity Shares of Rs.10.00 each of the Company held by Escorts Benefit and Welfare Trust subject to the confirmation by the Hon'ble National Company Law Tribunal, Chandigarh Bench (NCLT).

Post approval of the shareholders, the scheme of Capital Reduction was filed for approval of the NCLT.

Particulars of Loans given, Investments made, Guarantees given and Securities provided

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient has been given below. The details are also provided elsewhere in the Annual Report and forms an integral part of this Report.

Details of Investments made during the year:

Name of Party Amount (Rs. in crores)
Tadano Escorts India Private Limited 26.22
Escorts Crop Solutions Limited 3.55
Kubota Agricultural Machinery India Private Limited 90.00

Details of existing Guarantees and Loans given:

Nature Purpose Party Name Amount (' in crores)
Guarantee Given The Corporate Guarantee was issued in favour of Mizhuo Bank Limited for an amount of Rs.11.025 crores for its share of 49% in Tadano Escorts India Private Limited (TEI), a Joint Venture Company. The facility for an amount of Rs.22.50 crores was availed by TEI for meeting their non-fund based requirements. Mizhuo Bank Limited 11.025
Guarantee given The Corporate Guarantee was issued in favour of Tata Capital Financial Services Limited for credit facility of Rs.7.50 crores availed by Escorts Securities Limited, a subsidiary of the Company for meeting their working capital requirements which was renewed and increased to Rs.10.00 crores Tata Capital Financial Services Limited 10.00

 

Nature Purpose Party Name Amount (Rs. in crores)
Loan given An amount of Rs.1 crores was given to Adico Escorts Agri Equipments Private Limited, a Joint Venture Company for meeting their business requirements at a rate of interest of 13% p.a. for a period of one year and the same was renewed for another year. Adico Escorts Agri Equipments Private Limited 1.00

Particulars of Employees and related disclosures

In terms of provisions of Section 197(12) of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the prescribed limits are available with the Company Secretary. Having regard to the provisions of Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. Any member interested in obtaining such particulars may write to the Company Secretary of the Company and the same will be furnished on request.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure - H and forms an integral part of this Report.

Public Deposits

The Company has not accepted/ renewed any Fixed Deposit during the financial year and as such no amount of principal or interest was outstanding as of the Balance Sheet date.

Investor Education and Protection Fund (IEPF)

Pursuant to the applicable provisions of the Companies Act, 2013, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘the Rules'), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven years.

Further, according to the rules, the shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account created by the IEPF Authority. Accordingly, the Company was required to transfer the unclaimed and unpaid dividends and shares from time to time as per the requirements of the IEPF rules, details of which are provided on our website.

As on March 31, 2021, no unclaimed deposits are pending for transfer to Investor Education and Protection Fund.

Credit Rating

During the year, the credit rating of the Company is as under:

ICRA Limited has upgraded the long-term rating from "ICRA AA-" to "ICRA "AA" with change in status from "Watch with developing implication" to "Stable" and reaffirmed Short-term rating at "ICRA A1+".

CRISIL has upgraded the long term rating from "CRISIL AA-" to "CRISIL AA" with Stable outlook and reaffirmed Short-term rating at "CRISIL A1+".

Material Changes and Commitment affecting the financial position

There are no material changes affecting the financial position of the Company subsequent to the closure of the Fiscal 2021 till the date of this report except the impact of COVID-19, however, impact thereof is not expected to be significant.

Prevention of Sexual Harassment

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. The Company is committed to provide equal opportunities without regard to their race, caste, sex, religion, colour, nationality, disability, etc. All women associates (permanent, temporary, contractual and trainees) as well as any women visiting the Company's office premises or women service providers are covered under this Policy. All employees are treated with dignity with a view to maintain a work environment free of sexual harassment whether physical, verbal or psychological.

The Company has also complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Secretarial Standards

The Company is in compliance with all the applicable Secretarial Standards.

Business Responsibility Report (BRR)

The SEBI Listing Regulations mandate the inclusion of BRR as part of the Annual Report for top 1000 listed entities based on market capitalisation.

In compliance with the SEBI Listing Regulations, the BRR describing the initiatives taken by the Company from an environmental, social and governance perspective is enclosed as Annexure - I and forms an integral part of this Report.

Application made or any proceeding pending under the Insolvency and Bankruptcy Code

As on the date of the Report any application is not pending under the Insolvency and Bankruptcy Code, 2016 and the Company did not file any application under (IBC) during the Financial Year 2020-21.

Directors' Responsibility Statement

Pursuant to the requirement under Section 134(5) of the Act, with respect to Directors' Responsibility Statement, your Directors, to the best of their knowledge and ability, hereby confirm that:

(i) in the preparation of the annual accounts for the year ended March 31, 2021, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed alongwith proper explanation relating to material departures;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgements 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 March 31, 2021 and of the profit and loss of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the Directors have prepared the annual accounts for financial year ended March 31, 2021 on a ‘going concern' basis;

(v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

(vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report.

4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. However, members attention is drawn to note 34 in the notes to accounts in the standalone financial statement and to note 35 in the notes to accounts in the consolidated financial statement which sets out information on Commitments and Contingencies.

6. Details of difference between amount of 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.

Acknowledgement

Your Directors would like to express their sincere appreciation of the positive co-operation received from the Central Government, the Government of Haryana and Uttaranchal and Karnataka, Financial Institutions and the Company's Bankers, Customers, Dealers and all other business associates.

The Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers, workers, employee unions and staff of the Company resulting in the successful performance of the Company during the year.

The Board also takes this opportunity to express its deep gratitude for the continued co-operation and support received from its valued shareholders.

For and on behalf of the Board of Directors
Place: New Delhi Nikhil Nanda
Date: May 14, 2021 Chairman & Managing Director