–

Living
Harmony
Empowering business
and enriching life

Annual Report 2018-19

Johnson Controls-Hitachi
Air Conditioning India Limited
 –
Read through the Report
Company Overview Statutory Reports
About Us 02 Directors’ Report and 17
Management Discussion & Analysis
Chairman & Managing 04
Director’s message Report on Corporate Governance 36

Product Portfolio 06 Business Responsibility Report 44

Marketing Initiatives: The year gone by 08

Financial Statements
Marketing Initiatives: The year ahead 10
Independent Auditors’ Report 50
Making a difference 12
Balance Sheet 58
Board of Directors 14
Statement of Profit and Loss 59
Awards 16
Statement of Cash Flows 60

Statement of Changes in Equity 62

– Notes to Financial Statements 63

Corporate
Information
Board of Directors Auditors
Gurmeet Singh Price Waterhouse & Co.
Chairman & Managing Director Chartered Accountants LLP
Ahmedabad
Shinichi Iizuka
Director
Registered Office
Yoshikazu Ishihara
Director 9th Floor, Abhijeet-I, Mithakhali Six Roads,
Ahmedabad - 380 006, Gujarat
Ashok Balwani
Independent Director
Works
Indira Parikh
Independent Director Hitachi Complex, Karannagar - 382 715
Kadi, Dist. : Mehsana, Gujarat
Mukesh Patel
Independent Director
Registrars & Share Transfer Agent

Chief Financial Officer Link Intime India Pvt Limited

506-508, Amarnath Business
Rishi Mehta Centre-1 (ABC-1),
Besides Gala Business Centre
Near St. Xavier’s College Corner
Company Secretary Off C G Road, Ahmedabad - 380 006
Parag Dave Gujarat
Radical, pioneering and inventive, JCH-IN is characterised
by its uniqueness and zeal to perform. Actively engaged in
the trending corporate revolution where the businesses of
today are pledging to alter their perspectives and practices
to streamline their operational strategies, JCH-IN today has
emerged as an organization that is not just dedicated, but
also dauntless in its progression.
Guided by the objectives of simultaneously enriching lives and empowering business,
we at JCH-IN are completely and absolutely immersed in our intent to seek
excellence. Our identity today is the product of the goodwill, leading technologies and
maximum corporate value that we have garnered over the years. With our expertise
in providing cooling solutions and consistently constructing ourselves as a dynamic
and global presence, at the axiom of JCH-IN is its integrity and desire to change lives
positively.
With the impetus of enhancing and endowing the lives of our numerous customers
spread across innumerable regions and in turn churning out competence and
potentiality to champion our business, we are a Company that has indeed been
exemplary in embodying in its being, the goal of ‘living harmony’.
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

–
About Us
Our identity

A joint-venture between
two organizations, the
US-based Johnson
Controls and Japan-
based, Hitachi Appliances,
Johnson Controls-Hitachi
Air Conditioning India
Limited (JCH-IN) today
has emerged as one of
2
the main players in the
Indian air-conditioning
market. A pioneering
figure among the most
respected and regarded
business entities in the
industry, JCH-IN has
evolved radically.
Headquartered in Ahmedabad, Gujarat, the Company
has its cutting-edge manufacturing facilities
stationed at Kadi, Mehsana. With access to one of
the largest manufacturing facilities in India, spread
across a staggering +1,82,000 sq.m, the Company’s
manufacturing unit, holds the capacity to assemble
under a single roof, a wide range of cooling products
that cover both residential and commercial cooling
functions.

With a host of options pertaining to products in the

cooling segment, our aspiration to become the number
one HVAC Company in India by 2021 is complemented
by our desire to enhance our market share in both B2c
and B2B.
JCH-IN’s rich heritage Awards won
With industry stints of both the companies running over Winning accolades and achieving coveted awards is no
100 years of business efficiency characterised by a powerful new feat for Hitachi. Being an accomplished organization
and enriching lineage and culture, the harmony of invention distinguished by its innovative advancements and laudable
and innovation driven technology of Hitachi Appliances and performances, some of the jewels in our crown include -
the addition of Johnson Controls’ best in class expertise
and enlarged global presence has resulted in what we know
today as Johnson Controls-Hitachi Air Conditioning Company.
With its Indian counterpart Johnson Controls-Hitachi Air
Conditioning India Limited, the Company plans to provide to
its clientele, an array of products which shall form the most
distinguished and assorted product portfolio in the air-
conditioning industry.

JCH-IN’s offerings
JCH-IN is involved in the business of manufacturing and
marketing an extensive range of air-conditioning solutions

FINANCIAL STATEMENTS
which incorporates items for both commercial and residential
categories. With innovation and expertise supporting our
advancement and endeavours to contribute quality products
to customers, our products cater to the needs of home,
industrial and commercial cooling solutions that cover
commercial air conditioning, residential and conditioning
systems, which includes Room air conditioners, VRF
Systems, Ductable air conditioners, Chillers & space makers.
With a vision to manufacture cooling solutions that is both
a fulfilling and a touching experience, we are dedicated and
STATUTORY REPORTS

devoted towards our goal of being committed to quality. The

company also deals in Refrigerators and Air Purifiers in India.

A renowned presence
COMPANY OVERVIEW

Multi-faceted and composite, we enjoy a robust, solid and Apart from this, your company has several accreditations
extensive distribution network that comprises of more and certifications to its credit. We are an ISO 14001:2015
than 10,000 accomplices in the form of trade partners and Environment System (EMS), OHSAS 18001:2007 Occupational
retailers. We have been fruitful in our efforts to consolidate Health and Safety Systems and ISO 9001: 2015 Quality
and amplify our presence across the varied topographies of Management System (QMS) Certified organization. We
India and have accelerated further, the reach of our Company. likewise have our own NABL authorized Testing Laboratories.
 Johnson Controls-Hitachi Air Conditioning India Limited

–
Chairman &
Managing
Director’s
message
4

With productive Dear Shareholders,

Heartiest Greetings to all of you!

Initiatives and
As the Chairman and Managing Director of Johnson Controls–Hitachi Air
constant innovation Conditioning India Ltd. (JCH-IN), I would like to thank you all for your
Undeterred support and faith in us.
in consumer centric
We noticed a major shift in buying pattern of AC by customers in residential
technology, I am sure AC segment. During the year a lot of advancement happened in technology

JCH-IN will emerge such as inverter technology, smart air conditioners, eco-friendly products
etc. which created demand for new age technology air conditioners across
as a leading AC player India.

in the Indian industry. FY19 was slightly tough year for us in terms of all-round performance due
to sluggish real estate sector and poor investments in the manufacturing
With an objective of and construction sectors. The Company reported a total Revenue from
Operations of H 2,241 crores against H 2,258 crores of FY18.
sustained profitable Our new lineup of Expandable Inverter ACs are leading the way for our rising
growth, we shall keep growth.

providing a wide Driving customer and operational excellence

range of innovative The vertical of Hitachi Room Air Conditioning witnessed significant shift from
Fixed Speed to Inverter ACs. The share of inverter ACs increased from 22%
and advanced air- to 66% Variable Refrigerant Flow Systems (VRF) in India has been growing at
conditioning solutions. a healthy rate and is expected to grow at a CAGR of 15% over the next few
years. Our new Set Free-Sigma Series boosted our business have helped position Hitachi among the top players of
healthily, witnessing a double digit growth of 25% and we are Inverter split-ACs. With continued investments into brand
really optimistic about our prospects. promotion in local languages, improving the brand recall
and fostering channel advocacy, JCH-IN has been making
Other segments were quite a mixed bag as Cassette ACs significant progress in improving its presence in South India.
witnessed a good double digit growth of 33% whereas for
the Packaged Air Conditioning (PAC), we maintained last In commercial segment, JCH-IN has been able to nurture its
year’s numbers with marginal dip in contribution. loyal channel partner base through exclusive programs such
as ‘Xpert Lounge’ while at the same time attracting new
The company’s ventures also pertain to trading of channel partners. In addition, one of the key investments
Refrigerators and Air Purifiers, which caters to a niche that JCH-IN has made to support the growth is into the
segment. establishment of one of a kind training centers, called
Engineering Excellence Centers, in four corners of the
Manufacturing was another area where the Company
country consisting of several practical labs, class rooms
invested. The Company’s Annual Performance Factor (APF)
and customer experience centers. These centers have
Labs were NABL Accredited according to revised ISO /
been imparting training on installation & commissioning,
IEC 17025:2007 standard, with capacity enhancement and
troubleshooting and selling skills to our channel partners.
addition of international standards like ISO 5151, SASO
2681. This will help us to enhance our reach, garner a wider We are also very excited to share with you all that we are
acceptability of our test results and help us to expand our setting up a new, advanced Global Development Center
export business. (GDC) in India, adjacent to our factory in Kadi, Gujarat. This
state of the art facility will focus on residential and packaged
The Company, along with offering good quality products to
air conditioner products for India, Southeast Asia, Middle
customers, has also given utmost priority to good customer 5
East and EU markets. The GDC is going to be equipped with
care and service. The Company continues to invest in the
superior engineering and testing facilities for HVAC product,
training of its human resources and upgradation of their
and it will dramatically increase our product development
technical skills to ensure growth stability. Amongst the
capabilities.
various initiatives that we undertook, Special Task Force,
Free Service Camps and Customer Delight Program were the
key highlights of last year.
Road Forward

FINANCIAL STATEMENTS
In Human Resource department, we have made major
With productive initiatives and regular investments in new
changes this year. At JCH-IN, we truly believe that human
technology, I am sure JCH-IN will emerge as a leading AC
resources are the biggest and most reliable resource
player in the Indian industry. With an objective of sustained
a company can possibly possess. A new performance
profitable growth, we shall keep providing a wide range of
management system for employees has been put in place,
innovative and advanced cooling solutions.
with policies promoting better work-life balance as well as
schemes for employee reward and recognition. The objective With this, I would like to thank all the stakeholders of
of increasing gender diversity across managerial levels and JCH-IN, the employees for their sincere efforts, our various
businesses by FY19 is being driven systematically through vendors for their valued support, the customers for their
STATUTORY REPORTS

conscious and planned hiring, with women-centric initiatives trust in our products and our respected shareholders for
across locations. showing their continuous faith in our business.

We are committed to deliver the best value to all of you.

Strategic initiatives
I wish all of you the best of health and prosperity in the year
In order to drive accelerated growth, JCH-IN has launched ahead.
a series of strategic initiatives focusing on strengthening
the core businesses of Room Air Conditioners (RAC) and
COMPANY OVERVIEW

commercial air conditioners (VRF and PAC). In RAC segment,

over the last two years, JCH-IN has been able to add
nearly 4000 additional selling points in Tier-II and III cities,
introduce new series of inverter driven RAC products and
started to reposition the brand into the Mid-market while Gurmeet Singh
maintaining its strength in Premium segment. These actions Chairman and Managing Director
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

–
Product portfolio
At JCH-IN, we base our approach on a deep
understanding of our core markets. This
understanding allows us to anticipate tomorrow’s
customer needs. We work closely with our
customers in our target markets, helping the
Company develop effective and customised
cooling solutions for our customers at reasonable
prices. Our products are innovative, application-
specific and incorporate functionalities
beyond just cooling. These factors are our key
6
differentiators in the market.
Marked by integrated technology platforms and distinctive innovative strengths, our products help us
create a strong competitive position in the market along with generating a reputation for ourselves
through positive endorsements.

With a commitment to provide the best to our customers, we focus on manufacturing products with
innovative solutions. Our state-of-the-art design and development team ensures that our end products
are of top quality and design yet energy-efficient and appropriate for the Indian tropical climate. We
are one of the top AC companies in India to launch an entire range of Inverter Split ACs with BEE Star
Rating.

Residential Cooling Solutions Commercial Cooling Solutions Home Appliances Solution

• Inverter Split Air Conditioners • Packaged Air Conditioners • Refrigerators

• Fixed Speed Split Air Conditioners • Chillers • Air Purifiers

• Window Air Conditioners • VRF

• Space maker
Residential Air Conditioners

Kashikoi Expandable Inverter Takeshi Inverter/Fixed Speed Toushi Inverter AC Sugoi Inverter AC
AC Series AC Series

Zunoh Fixed Speed AC Ace Inverter AC Merai Inverter AC Logicool Inverter/Fixed Speed AC

Summer QC AC Kaze Plus AC

Commercial Air Conditioners

7

FINANCIAL STATEMENTS
SET FREE Sigma SET FREE Kyosho SET FREE Front Flow Cassette AC
(Top Flow) (Top Flow)

STATUTORY REPORTS

Water Cooled Screw Chiller Air Cooled Screw Chiller Direct Drive Centrifugal Chiller Ductable Air Conditioners

Home Appliances
COMPANY OVERVIEW

Side by Side Series Top Freezer Series: Bottom Freezer Series Top Freezer Series: Air Purifiers
Big French Series New Stylish Line Series
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

–
Marketing Initiatives:
The year gone by
Our constant innovations in technology ensure that
our brand builds a name for itself. We are not just
only delivering a wide range of products, but we are
also distributing them in speed to hold our position in
this competitive world. Our brand building initiatives
promote our consistent growth in the market.
Driving sales in such a competitive market is not as easy as it seems, but products play a vital role in increasing
these numbers. We feel that our products establish a connection between the Company and the end users.
Understanding the needs of our consumers and creating customised products for their needs is very important
and a strong marketing channel helps the Company achieving the same. The Company has a widespread
8 product presence across India and the credit goes to its effective marketing exercises and vigorous distribution
network. Investing in brand building initiatives and distribution network have contributed a lot to the Company
by delivering consistency in sales growth.

TV Commercial 1

TV Commercial 2
Innovation is at the centre of everything we do at JCH-IN. Our sole purpose is not just to sell
the products to the consumers but give them an outstanding experience by creating a marketing
model that focuses on providing solutions. The Company promoted Inverter Air Conditioners in
2018 with its campaign “Every Home Deserves Hitachi Inverter AC” which was pushed on various
mediums with heavy frequency. Multiple mediums like TV, Print, Outdoor and Digital Media
were used to run this campaign to attain as much reach as possible in a market which is full of
competition. The brand used a range of distribution channels to help its products reach to various
corners of the country. Furthermore, the Company’s increased focus on innovation and strong
marketing communication helped the brand grow on a large scale. With more then 10,000 selling
points across 1,350 cities and towns across India, the Company feels proud of its strong B2C
sales network which is supported by a strong team of more than 100 members. The brand also
partnered with more than 500 distributors in the PAC segment and more than 200 distributors in
the VRF segments, to enhance our B2B presence in more than 140 cities across India.

9
Newspaper & Magazine Ads

FINANCIAL STATEMENTS
STATUTORY REPORTS
COMPANY OVERVIEW
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

–
Marketing Initiatives:
The year ahead
Hitachi Cooling & Heating India, as a global brand
seeks to translate its global reach into market
leadership. In order to reach the leading position,
the brand worked on a new positioning and value
proposition strong enough to differentiate itself
and offer a value add to its customers.
Our new brand promise, Living Harmony, defines the way
we introduce ourselves to the world. It has a strategic
base focused on becoming an iconic life partner that brings
balance to people’s lives. We want to create a world where
people live in harmony with themselves and the environment
that surrounds them. We aim to be the catalysts of that
harmony and by doing that, the brand seeks to be recognised
as the master in the creation of living spaces.

Hitachi air
10
Air is a wonderful thing. It is invisible, silent and life-giving.
It is unpredictable at times but at Hitachi, we have the
expertise to condition such air and create a perfect indoor
environment for you. We call this air as Hitachi air. This is
how our brand campaign was conceptualised and brought to
life as, “Hitachi air, feel it to believe it”.

Fr
t air e
Fro sh

ilenFlow Fan st
Wa a
sh ir
S T- Wave Blade iFresh
Design
Surr

Big Flow
iClean+
Wide

Cleater Cleaning

Deflector
n air
Angle
oun
Mov

Fil
eme

Auto

Soft Dry
d air
nt

Auto Coil Dry

Odour-free air
Hitachi air is a combination of Fresh air, Clean air, Silent air,
Surround air and Odour-free air. We believe in the art of
balancing energy with calm, sound with silence and light with
shade, hence, giving you complete control over the air that
surrounds you. Everything combined, Hitachi air gives you a
truly harmonious indoor air experience.
 Newspaper & Magazine Ads

B2C Newspaper Ad B2C Newspaper Ad B2C Magazine Ad B2B Magazine Ad

OOH Campaign and Website Redesigning

11

FINANCIAL STATEMENTS
OOH Campaign Website Redesigning

Technology Videos for Sales Promotion

STATUTORY REPORTS

Wave Blade Technology Auto Filter Clean Technology Frost Wash Technology Auto Coil Dry Technology Wide Angle Deflector movement

Digital Film: Product Feature

COMPANY OVERVIEW

Silent air Clean air Fresh air Odour-free air Surround air
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

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Making a difference
We recognise that conducting business in a sustainable
and responsible manner is integral to ensuring our future
viability. Sustainability considerations underpin our strategy
and are integrated into the way we carry on our business.
At Hitachi cooling & healing, the CSR activities that are to be included in the Corporate Social Responsibility Policy of the
Company are recommended and monitored by the CSR Committee. This committee comprises of our Chairman & Managing
Director – Mr. Gurmeet Singh Sethi, Director Mr. Yoshikazu Ishihara and our Independent Director, Mr. Ashok Balwani.

12
Some of our CSR initiatives undertaken during the year are as follows:

Water Tank Project Sanitation Project

With over 11,500 inhabitants, the major source of drinking The CSR objectives were concretized through our CSR
water supply for Karan Nagar village has been bore wells. initiatives which encapsulated areas in the hinterland
However, the quality of water in these wells have become a of rural impoverished villages of Gujarat impacting and
major threat to health for the villagers. In order to provide enhancing hygiene and sanitation by making within a 10 km
safe potable water for all, we contributed H 10 lakhs to the radius around its plant, an ODF zone and building within it
local administrative body of Karan Nagar for the construction 500 toilets for the houses that lacked toilet facilities. This
of an overhead water tank by Water and Sanitation improved their hygiene and sanitation standards in line with
Management Organization (WASMO), established by the the Swachh Bharat Abhiyan (Clean India Mission) by the
Government of Gujarat. Government of India.

Health Project Skill development Project (AC Repair & Maintenance) 13

The Primary Health Center (PHC) in Karan Nagar village In collaboration with Industrial Training Institutes (ITI),
provided only basic medical treatment. In case of any Government of Gujarat and Government of Andhra Pradesh
emergencies and advanced treatments, the villagers had initiative under Skill India, we conducted skill building
to travel to the nearest Community Health Center which is courses in vocations such as AC Repair and Maintenance
nearly 15kms away. Primary Health Centre supported by us, for rural and underprivileged youth and helped them to gain
facilitates the villagers with services such as 24x7 ambulance,

FINANCIAL STATEMENTS
suitable employment. We also provided the equipment,
specialist doctors, para medic and medicines which provides tool kit, instructors, and other required peripherals for
medical support to more than 4,000 patients mitigating most conducting this course successfully. Skill Development
of the medical emergencies with bare minimum turnaround Centers have trained over 225 school dropouts from villages
time. The ambulance takes care of the needs of the 16 in Air Conditioner repairing skills enabling them to gain
villages under PHC Karan Nagar (24/7) and approximately employment. Approximately 30% students got the jobs after
benefits 37 thousand villagers living near JCH-IN plant. completing the course. STATUTORY REPORTS

Education Project Sponsorship project for Para Athletes

Most of the primary schools located near the plant of 10 para athletes are being supported with complete aid for
JCH-IN age about 50-years and are in devastated and their participation for Gold in the 2020 Paralympics. We have
deplorable conditions. Children who attended open classes utmost faith and confidence in these athletes and thus, are
in the courtyard were exposed to vagaries of the nature. striving to work towards training and nurturing them well to
We played our part responsibly by building schools that can help them win medals and make our country proud. The Para
accommodate more than 900 children from Class 1 to Class
COMPANY OVERVIEW

athletes under the CSR wings of JCH-IN have already won

8th and separate Girls’ toilet facilities that led to increased medals at National and international levels.
attendance.
Besides these, we often associate with other organizations
and bodies to empower people by helping them to acquire
the right skill set that enables them to grow. Thus, we can
proudly say that CSR is not just a concept for us, but is an
active part of our Company’s ethos.
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

–
Board of Directors

Gurmeet Singh Shinichi Iizuka Yoshikazu Ishihara

Chairman and Director Director
Managing Director
Mr. Shinichi Iizuka began his career Vice President and General Counsel
Chairman and Managing Director with Hitachi Ltd. in 1979, responsible of Johnson Controls Hitachi Air
of Johnson Controls-Hitachi Air for the design of Air Conditioning Conditioning, Yoshikazu Ishihara holds
Conditioning India Ltd. (JCH-IN), Mr. export. He has held various management experience in leading
Gurmeet Singh, has left no stone positions in Product Development, the international practice group of an
unturned in successfully leading Environmental Equipment, and international law firm and overseeing
the management team and the Refrigeration & Air Conditioning the legal departments of multinational
14 operations of the Company in India. Division. He started to work in corporations. He has been a key
After completing his MBA in 1988, India in 2002 and was appointed business partner within the Company’s
he has been actively involved in as the Managing Director of the executive team and has been serving
various diversified roles including Company in 2006. He returned to as a board member for over 20
Sales, Marketing, Business Planning Japan and became head of Tochigi operating companies across multiple
and Strategy, proving his expertise Air Conditioning. He has been an jurisdictions including a number of JVs.
in different fields. With an initial 15 Executive Director and Chief of the He has managed 15 legal professionals
years of experience in Sales and Air Conditioning Division since 2013. and collaborated with over 200 legal
the last 15 years in more exhaustive Throughout his career, he has held professionals at Johnson Controls.
management roles, Mr. Singh has various positions in Engineering/ He also manages all compliance
not just established himself in the Design, Product Development, and investigation matters within the
industry but has also contributed to Manufacturing, and specializes in company.
the organization with his strategic Business Operations. He holds a
and creative work. He has devotedly bachelor’s degree in Science and
worked for more than 20 years at Technology from Sophia University. He
Hitachi. became COO and President of Johnson
Controls – Hitachi Air Conditioning
effective since October, 2015.
Ashok Balwani Prof. Indira J Parikh Mukesh Patel
Independent Director Independent Director Independent Director
Mr. Ashok Balwani has general Prof. Indira J. Parikh is the President An Eminent Advocate and International
management, strategy and business of Antardisha (Directions from Within), Tax Expert, Mr. Mukesh Patel enjoys
development experience combined a private entity creating a space for over four decades of extensive
with a rich international experience individuals, collectivities, organizations experience and expertise in the
covering knowledge based services, and institutions to have a dialogue to fields of Personal and Corporate
industrial projects and products and discover themselves, to review their Tax Planning, Appellate Matters,
consumer product industries. He is past, to reflect on the present ‘Here International Taxation, Tax and
a Director with Strategic Resources and Now’ and renew themselves Investment Planning for Non-Resident 15
Group and advises companies for the future. She is the Founder Indians and Foreign Collaborations.
on strategy, risk management, President of FLAME University, Pune
international business, organizational until 2015. In October, 2015, he was appointed
development, human resources and by the Finance Minister, as an Expert
process development. He was formerly Prof. Parikh has completed her M.Ed on the Justice Easwar Committee for
the President of Man Industries (India) from University of Rochester, New York Simplification of the Income-tax Act,
USA and her Doctorate from Gujarat Rules and Procedures. In November,

FINANCIAL STATEMENTS
Limited serving the international oil
and gas market. Prior to this, he had University. She was a faculty at IIM- 2017, he has been appointed by the
handled several assignments with Ahmedabad for over 30 years and Dean Government of India as an Expert on
increasing responsibility in Det Norske from 2002 to 2005. She has taught the Six Member Official Task Force,
Veritas (DNV). His experience includes at INSEAD, Fontainebleau (France) which has been entrusted the key
Mafatlal Industries Limited as Vice and Texas A&M University. Recently, assignment of drafting a New Income-
President (and CEO) Larsen & Toubro she has joined DALHAME, the name Tax Act, in tune with best international
Limited. stands for Design, Arts, Liberal Arts, tax practices and the economic
Humanities, Architecture, Media and needs of India. In April, 2017 he was
He graduated in Electrical Engineering Economics. conferred with ‘The Order of the
STATUTORY REPORTS

from BITS Pilani and has a Masters Rising Sun’, the highest Decoration
degree in Business Administration Prof. Parikh has been honored with & Recognition from the Emperor of
from the University of Delhi. several life time achievement awards Japan and the Japanese Government,
both nationally and internationally for in appreciation of his 45 years long
her contribution in Education, HR and association and contributions for
for Women. furthering Indo-Japanese Relations on
academic, business and cultural fronts.

Visiting Faculty with the Gujarat Law

COMPANY OVERVIEW

Society, the IIM, Ahmedabad and also

a Columnist of renowned newspapers.
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

–
Awards

The Emerson Cup - For Product 2018- Frost & Sullivan’s ‘Indian Smart Air Conditioners
Innovation in Air Conditioning – 2016 Company of the Year’ Award

16

2018- India Copper Association’s ‘Copper Excellence ISO 14001- 2015 Environment Management System (EMS)
Award’-For Successfully providing reliable and energy Certified
efficient room air conditioners by using 100% copper tubes

ISO 9001-2015 Quality Management System (QMS) NABL - Certificate of Accreditation for Testing Laboratories
Certified
DIRECTORS’ REPORT AND MANAGEMENT
DISCUSSION & ANALYSIS
Dear Members,

Your Directors have pleasure in presenting the Thirty Fourth Annual Report and the Audited Financial Statements, for the year
ended March 31, 2019.

Financial Highlights
The highlights of financial results of the Company for the year under review are given below:
(H In Million)
For the year ended For the year ended
March 31, 2019 March 31, 2018
Revenue from operations (gross) 22,413.0 22,582.7
Other Income 154.2 73.9
Total Revenue 22,567.2 22,656.6
Profit before finance cost, depreciation and tax 1,792.2 2062.6
Finance Cost 26.9 19.8
Depreciation and amortization expenses 441.6 529.2
Profit before Tax 1,323.7 1,513.6 17
Tax expense 464.3 512.1
Profit for the year 859.4 1,001.5

Dividend Industry Structure and Developments

FINANCIAL STATEMENTS
Your Directors recommend a dividend of H 1.50 per Equity Fiscal year 2019 has been very challenging for the industry
Share for the year ended March 31, 2019. This is subject to with market showing a de-growth of approx. 3%. Inspite of
the approval of the Members at the ensuing Annual General rising consumer demand for advanced technologies, energy-
Meeting. efficiency and improvement in the standard of living the growth
of the industry was stagnant.
Company Overview
With increase in number of initiatives towards electrification
Johnson Controls-Hitachi Air Conditioning is a joint venture of households, even the farthest corners of the country are
Company of Johnson Controls, USA and Hitachi Appliances, being electrified, the hope for an increased demand for air
Japan which was formed on 1st October, 2015. This joint venture
STATUTORY REPORTS

conditioners in Tier III and Tier IV cities has grown. With the
has combined the rich heritage and innovative technology of changing preference, AC has no longer remained a luxury
Hitachi with the industry-leading expertise and global network good, instead it has become a necessary appliance for the
of Johnson Controls. Johnson Controls-Hitachi Air Conditioning consumers. Further, with rising urbanisation and technological
India Limited is a Subsidiary of this JV. The Company provides a innovation, air quality is becoming one of the major concern,
diversified range of customized and innovative air conditioning particularly in the big cities. As a result of this, established AC
products. Hitachi is an established, premium brand in HVAC manufacturers in the market are now upgrading their ACs with
Segment in India. As a part of its growth strategy, post the advanced filters to clean the air from all types of pollutants,
global joint venture, the Company has been taking several bacteria, viruses, dust particles, and foul odours using a
initiatives to fortify its leadership in the Air conditioning flawless arrangement of multi-layer filters working in tandem.
COMPANY OVERVIEW

market. The Company’s product offerings include Room and

Commercial air conditioners, Refrigerators and Air purifiers. The coming period anticipates higher adoption of superior
The Company possesses a wide distribution network with technology and power efficient range of inverter air
5 regional offices, 23 branch offices, above 10,000 sales points conditioners by consumer, with North India remaining a major
and more than 1,500 service points. demand driver. The sales in the segment are further anticipated
to grow with rising temperature in the summer. In addition to
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

this, higher rural electrification and rise in disposable income Further, these innovative range of inverter air conditioning
and aspiration levels are also expected to push the demand solutions are eco-friendly products, primarily designed for
in the market. With these factors boosting the growth of AC optimum cooling comfort besides being energy efficient.
in the market, the air conditioner industry is set to grow at a With its innovative range of cooling solutions, Hitachi aims to
healthy rate of 14-15% in FY2020. (Source: Livemint, Business reach every Indian household and become India’s leading air
Standard) conditioning brand by 2021. During the year, Company benefitted
from the value growth in the inverter Air Conditioners.
Business Overview Hitachi has been the front runner and flag bearer of Energy
Efficient Room Air Conditioners in India. With 6.1 ISEER,
Operations
Hitachi’s Kashikoi 5100X+ (1.0 TR, 5 Star) became India’s best
During the year under review, Room Air Conditioners business in class Energy Efficient Split Air Conditioner. Frost & Sullivan
saw a marginal growth on volume basis, while Cassette awarded the Company with Smart Air Conditioners Award
business grew by 33% and VRF by 25%. Packaged AC volume 2018. Company was also felicitated with Copper Excellence
was marginally lower than last year. Telecom business saw a Award 2018.
decline in growth, while the exports business grew 13 times
Commercial Air Conditioners
this year on a low base. On overall basis there was marginal
growth in business as compared to last year while the markets Indian HVAC market has been witnessing a considerable growth
either remained flat or exhibited a de-growth on volume basis. due to rise in commercial offices and buildings, industries,
hospitals, data centres, server rooms, and universities. Further,
Cooling Products
rising infrastructure spending in the country is also driving
Room Air Conditioners the growth of the Indian HVAC market. Several infrastructure
projects such as ongoing and upcoming airports and metro
Improving micro-economic conditions, increase in population, railway expansion projects are coming up across the country.
cheaper financing options, development of smarter cities, high
potential for economic growth and greater product availability Variable Refrigerant Flow (VRF)
with increased electricity reach is likely to boost the demand
18 During the year, the Company also saw a positive growth in
for Air Conditioner in future. Currently, India is experiencing a
the VRF systems primarily because of the launch of new line-
continual shift towards inverter ACs, which now contributes
up called Set Free- Sigma Series in VRF Systems. With least
over 50% of the overall industry wall mounted Split Air
energy wastage, maximal capacity in minimalistic floor space,
Conditioner sales.
SET FREE-Sigma Series delivered energy efficient performance
With its diverse range of energy efficient and environment combined with premium looks. Adoption of eco-friendly, energy
friendly air conditioning solutions, Hitachi Cooling & Heating efficient air-conditioning, design flexibility and space saving
aims to bring about a revolution in the Indian Air Conditioning were the key USPs of Set-free sigma series which actually
industry and to become India’s leading HVAC brand. In order attracted the market. Apart from launch of Set-Free sigma
to expand its reach in tier II and III markets, the Company has series, Company has also invested through Engineer Excellence
launched several new products in its inverter air conditioner Center across the four locations across India (North, South,
range which are designed to cater needs of the first-time East and West Region). Company has also worked on channel
buyers and mid-segment Air Conditioner buyers also. With expansion in order to reach and meet various customer needs.
nearly 35 models in its Room Air Conditioners line-up, Hitachi Company has also participated in various exhibition, seminars
is committed to provide Air conditioning solutions to every and meetings to explain the benefits of Set-fee Sigma Series.
segment of consumer. The Company is one of the top brands in The Company’s VRF segment registered a growth of 14% in
India with a market share of approx. 12% in the Air Conditioner the previous financial year while, during this period, the growth
segment and is further anticipated to increase significantly by rate was 25%. The Company has also taken various initiatives
2020-21. to promote this Category and is very confident that with the
inclusion of new products in the current VRF product range,
Further, with the increasing demand of inverter segment, its commitment to provide enhanced technology with energy
all the new range of Company’s 5 star Air Conditioners are efficient product range, it will be able to provide better cooling
expandable which are specially designed to address the hot solutions to customers and experience an exponential business
climatic conditions of northern plains and extremely hot and growth in set-free VRF category.
humid conditions of coastal areas. Even at a temperature of
52 degree Celsius in these areas, the Expandable Inverter Air Application-Based Air Conditioners – Telecom Air Conditioners
Conditioners provides maximum comfort to the consumers.
The company continues to dominate this segment being the
These new series of Inverter Air Conditioners provides comfort
single largest air conditioning solution provider for cooling
to the consumers with 60% faster cooling, 20% more moisture
requirement in Telecom Towers. However, stiff competition
removal and 10% higher performance than other standard
and stressed margins in telecom industry has led to lower or
inverter air conditioners.
marginal investments in Capex based infrastructure. This trend
in telecom Industry has severely impacted this segment of needs of customers and also improve their standard of living. The
our business. We are hopeful that with the revival of telecom Company continuously invests in training of human resources and
industry, our revenue from this segment will increase in years upgradation of their technical skills to ensure better services.
to come. During the year under review, the Company undertook a major
initiative “Special Task Force” to provide timely resolution to
complicated and technical issues and to handle escalated matters.
Exports
For this purpose, a team of over 100 technicians was formed and
Since last few years, the Company has expanded its was trained to improve their technical skills.
geographical boundaries in export business. In the last couple
of years, the Company has started exporting to Sri Lanka, Set up of Global Development Center
Indonesia, Bangladesh, UAE, and Nepal, and this year added
Bhutan, Myanmar, Maldives, Oman, Bahrein, Qatar, Saudi The new Global Development Center (GDC), which is currently
Arabia, Iraq and few countries like Kenya and Djibouti in Africa under construction, will increase the Company’s product
Continent. With aggressive focus and improved product line- development capabilities, particularly in commercial package
up for exports, the Company has registered significant growth air conditioning and residential air conditioning systems.
over last year. Located adjacent to the Company’s factory in Karannagar,
Kadi, this development center will consist of an office space of
Looking at the growth of business this year, Company is positive 6,600 square meters and multiple labs spread over 12,000
about further growth of export business in coming years. square meters of floor space. These labs will include state-
of-the-art research and testing facilities for measuring
Home Appliances performance, reliability and electro-magnetic compliance.
The facilities will allow for testing of air conditioners for
In the Home appliance segment, Company deals in premium global requirements in ambient temperatures ranging from
range of refrigerator and air purifiers. -40 degrees C to + 60 degrees C.

The domestic refrigerator industry is witnessing a major New GDC will focus on developing residential and packaged
transformation right from product and design innovations air conditioner products for India, Southeast Asia, Middle East
to giving value for money and energy efficient solutions to and EU markets. In addition, a range of capabilities related to 19
consumers with a variety of choices. Gradually the consumer user experience, industrial design, simulation, controls, design
preference is moving towards high capacity models. These quality, project management and engineering information
high capacity models offer the latest technologies like inverter systems will be established at the new center.
technology with dual fan cooling, vacuum insulation panels,

FINANCIAL STATEMENTS
intelligent controls etc. Hitachi also has a complete frost-free
range with 21 models and 39 SKUs- starting from 253 litre gross
Outlook
to 722 litre gross capacity in 2-door, 3-door, 4 door and 6-door • India Emerging as Leading Economy Worldwide which
in top freezer, bottom freezer and side by side segments. has large market for Air conditioning business with huge
potential to grow in premium room Air Conditioning and VRF
The Indian residential air purifiers market is anticipated
segment by launching innovative technology and products.
to grow at a CAGR of over 29% from the current level of
14.14 million dollars to 38.99 million dollars in 2023, on the back • Growing trend in Infrastructure Sector, is expected to
of rapid urbanisation, increasing purchasing power, expanding bring growth in demand of air conditioning business and
urban population and deteriorating air quality. Air Purifiers are will help in growth of this industry.
preferred in select cities and Hitachi ensures its availability in
STATUTORY REPORTS

such markets, which are growing but at moderate speed. • Smart city projects, High-Rise Buildings, Shopping
Complexes, Malls, Hypermarkets now Penetrating in Tier
2 Cities as well are going to increase demand of air-
Service
conditioning business. Company is focusing and leveraging
The Company aims to offer best in class products to customers the strength of our channel partners.
and gives utmost priority to good customer care and service.
• Increasing standards of Bureau of Energy Efficiency (BEE)
For this purpose, the Company has also undertaken multiple
for energy efficiency in products and focus on promoting
service-oriented initiatives such as free service camp providing
Inverter Air Conditioners is a huge opportunity for
discounted service in pre-summer, customer delight program
companies who have large line-up of energy efficient
COMPANY OVERVIEW

as well as free product check-up in off season. These factors

products.
helped the Company retain its client base and provides service
to over 1,500,000 customers. • Growth of e-commerce retail portals and increasing nos. of
organized retail formats in Tier II and III towns are going to
Further, Customer Voice and Customer Satisfaction has always
create good growth opportunity for Room Air Conditioners
been a crucial part of Company’s strategy. It aims to fulfil the
category.
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

• Various government projects like Metro Rail, Airports, and emerge as an equal opportunity recruiter. For this, the
High Speed Trains etc. are going to open big opportunity Company conducted sensitivity programs for gender diversity
for commercial air-conditioning segment. and provided departmental targets for the same. Over the next
year, female manufacturing line will be introduced so as to
promote STEM in operators.
Risks, Concerns and Challenges
Talent Development:
• Fluctuation in raw material prices: Change in price of
raw material have an adverse impact on the Company’s Employees need to be developed, to bring about change
income and product demand as it results in increase in required in the system and their growth.
the final price of the product. However, the Company has
efficient supply chain management in place which focuses Rising star program was organized for selected (25 Nos) high
on cost efficiency and improved profitability measures and potential employees. Teams were formed to deliver viable
mitigates the impact of increased raw material prices. projects in a period of 6 months. Global mentors were guiding
them through this period. During this period, the projects were
• Technological development: In the constantly changing reviewed and regularly monitored by global leaders. These
business environment, it is imperative to stay updated projects were combined with rigorous classroom training in
with the state-of-the-art technologies in order to deliver 4 phases covering wide range of topics including Innovation,
latest and upgraded products to the customers. Failure Leadership Skills, Project Execution and Management being
to do so can severely impact the demand for Company’s few of them.
product and also result in increased cost of production.
Thus, Company continuously makes investments towards Evolve program was launched across the Company promoting
enhancement of design and manufacturing to keep pace the 6 working principles – Sense of Urgency, Taking Stock,
with upcoming technological changes and constant Strategic Planning, Accountability, Conflict and Commitment.
upgradation of its features. These principles have become guiding philosophy and way
of working. The Company also launched Evolve Champions
• Availability of electricity: Electricity consumption in India is Program, where it recognized and shared the achievement of
a big concern. The growth of Air Conditioner market and its employees demonstrating these 6 working principles, thereby,
20 penetration is highly dependent on availability of stable and setting positive examples for others in the organization.
consistent electric Supply. With rising number of initiatives
towards provision of electricity in every households in the Synchronized Happy Innovative Neo Employee (SHINE) program
farthest of areas, the impact of this risk is gradually declining. was also developed for intra department communication, self-
discovery, stress management, internal self-conflict and to be in
• Emergence of intense competition in core business: A sync with one self. It was an initiative to encourage employees
number of key players are entering the HVAC segment, to attain self-discovered goals and not just professional goals.
resulting in increased competition and posing threat to the
market share of the Company. Hitachi, however, mitigates JCMS-Empowered People:
this challenge through its diversified product portfolio
and respected brand name which helps the Company in Johnson Controls Manufacturing System (JCMS) is the one
retaining its customer base as well as share in the market. manufacturing practice which is practiced across the Johnson
Controls organizations. It consists of stringent practices
and process which need to be adhered for attaining Level 5
Human Resources (Distinguished). The Company has achieved Level 2 (Developing)
in JCMS. The aim of this principle is to empower its people to
In the present times, a dynamic and analytical human resources
improve their workplace performance.
is a crucial requirement for surviving in this competitive world.
Hitachi, thus, provides its employees an opportunity to develop,
innovate and enhance themselves in the system. During the Internal Control and Systems
year, the Company witnessed a robust growth in numbers and
youth entering in the Company. The Company has a well-defined and adequate internal control
system commensurate to the size of its business and the nature
Human Capital: of industry it operates in. The Internal Control system ensures
safeguarding and protecting the assets of the Company. Internal
As on March 31, 2019 the total strength of employees (Staff and Audit has been conducted by external Auditors at plant as well
Operators) of the Company was 1548. In addition, the Company as at all the branches of the Company within the detailed scope
also hired Graduate Engineering Trainees to encourage youth defined and approved by the Audit Committee. The Internal
opportunity and new perspective in system. Audit is planned to substantiate and review the adequacy of
internal controls and laid down procedures & systems.
Diversity and Inclusion:
Observations of Internal Auditors and the detailed plan of
Hitachi works with a mission to achieve high level of gender
action are reviewed and discussed at the meetings of the Audit
diversity at all levels. It is given top most priority, so as to
Committee on a periodic basis.
Auditors f) Proper systems have been devised to ensure compliance
with the provisions of all applicable laws and that such
Pursuant to the provisions of Section 139 of the Companies Act, systems were adequate and operating effectively.
2013, Members of the Company, at the Annual General Meeting
held on July 25, 2016, appointed M/s. Price Waterhouse & Co.
Chartered Accountants LLP (Firm Registration No. 304026E /
Board of Directors
E300009) as Auditors of the Company to hold office from the During the year under review, there was no change in the
conclusion of Annual General Meeting held on July 25, 2016 Board of Directors.
till the conclusion of the sixth consecutive Annual General
Meeting.
Performance Evaluation
Directors’ Responsibility Statement The Board has carried out an annual evaluation of the
performance of the Board, Audit Committee, Stakeholder
Your Directors confirm that: Relationship Committee, Nomination and Remuneration
Committee, Executive Committee, Vigil Mechanism Committee
a) In the preparation of the annual accounts, the applicable
and CSR Committee.
accounting standards have been followed along with
proper explanations relating to material departures; The Board has also carried out annual evaluation of the
performance of individual Directors, who were evaluated
b) Such accounting policies selected and applied them
considering levels of their engagement and contribution,
consistently and made judgments and estimates that are
safeguarding the interests of the Company and its minority
reasonable and prudent so as to give a true and fair view
shareholders, etc. The performance evaluation of the Chairman
of the state of affairs of the Company at the end of the
and the Non-Independent Directors were carried out by the
financial year and of the profit of the Company for that
Independent Directors at their separate meeting.
period;

c) Proper and sufficient care has been taken for the Details of Establishment of Vigil Mechanism
maintenance of adequate accounting records in accordance
21
with the provisions of this Act for safeguarding the assets The Company has established a Vigil Mechanism process as
of the Company and for preventing and detecting fraud an extension of the Company’s Code of Conduct whereby
and other irregularities; an employee, director, customer, vendor or associate
of the Company can disclose his genuine doubt in good
d) Annual accounts have been prepared on a going concern faith to any member of Vigil Mechanism Committee about

FINANCIAL STATEMENTS
basis; unethical behavior, actual or suspected fraud or violation
of the Company’s Code of Conduct or ethics policy, so that
e) Internal financial controls which are to be followed by
appropriate action can be taken to safeguard the interest of the
the Company have been laid down and that such internal
Company. In exceptional cases, a complaint can be reported
financial controls are adequate and were operating
by a complainant to a Chairperson of Audit Committee. This
effectively; and
mechanism is overseen by the Audit Committee.

Disclosure Under Section 197(12) of The Companies Act, 2012 Read With Rule 5 of Companies
(Appointment And Remuneration of Managerial Personnel) Rules, 2014:
STATUTORY REPORTS

Name of Director and Key Designation % increase in Ratio of the remuneration of director to
Managerial Personnel (KMP) remuneration of the median remuneration of the employees
director and KMP of the Company for the financial year
Mr. Gurmeet Singh Chairman and 29% 18.71 : 1
Managing Director
Mr. Franz Cerwinka Director NA NA
Mr. Yoshikazu Ishihara Director NA NA
Mr. Ashok Balwani Independent Director NA 0.82 : 1
COMPANY OVERVIEW

Mr. Mukesh Patel Independent Director NA 0.81 : 1

Ms. Indira Parikh Independent Director NA 0.78 : 1
Mr. Rishi Mehta Chief Financial Officer Note 1 8.66 : 1
Mr. Parag Dave Company Secretary 10% 2.32 : 1
Note 1: Mr. Rishi Mehta appointed as a Chief Financial Officer with effect from January 30, 2018.
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Comparison of remuneration against Company’s performance

- Increase in remuneration of each KMP As mentioned in above table
- Increase in total remuneration of all KMP Total remuneration of KMP decreased by 31% due to
resignation of Executive Directors
Percentage increase in the median remuneration of employees 10%
in the financial year
No. of permanent employees on the rolls of Company 1548
Average percentage increase already made in the salaries of - Average % increase in the salaries of employees other than
employees other than the managerial personnel in the last the managerial personnel 14%
financial year and its comparison with the percentage increase - Average % decrease in the managerial remuneration 19%
in the managerial remuneration and justification thereof (due to resignation of Executive Directors)
and point out if there are any exceptional circumstances for
increase in the managerial remuneration

We hereby affirm that the remuneration given to all the 3. The Company has received necessary declaration from each
employees, Directors and KMP is as per the Remuneration Independent Director under Section 149(7) of the Companies
policy of the Company. Act, 2013, that he/she meets the criteria of independence
laid down in Section 149(6) of the Companies Act, 2013.
Risk Management System 4. Details about the Policy on Corporate Social Responsibility
(CSR) and projects implemented by the Company during
Company has implemented Enterprise Risk Management (ERM)
the year under review, as required under Section 134(3)
system to identify, assess, monitor and mitigate the various
(o), 135(2) read with Companies (Corporate Social
risks associated with the Company.
Responsibility Policy) Rules, 2014 has been placed on the
Risks are identified and then classified into different categories website of the Company and Weblink is as under:
such as Strategic, Operational, Business risk and Risk related
https://www.hitachiaircon.in/investors
to act of god. Then score based on level and significance of
22
risk is given and subsequently risk mitigation steps are taken. 5. Formal Appointment and Evaluation Policy of the Board of
Directors and Senior Management of the Company which
Every quarter a statement identifying new risks and updation
has been formulated and recommended by Nomination
on pre-identified risks along with their mitigation process
and Remuneration Committee and adopted by Board
or counter measures taken are reported before the Audit
of Directors covering appointment and remuneration
Committee.
including criteria for determining qualifications, positive
attributes, independence of a director and other matters
Internal Financial Control provided under Section 178(3) has been placed on the
website of the Company and Weblink is as under:
Internal Financial Control plan adopted by the Company is
adequate with reference to the Financial Statement. https://www.hitachiaircon.in/investors

1. Conduct of its business by adherence to Company’s policies. 6. No commission paid to any Director of the Company, so no
disclosure is required to be made under Section 197(14).
2. Safeguarding of assets.
7. The details forming part of the extract of the Annual
3. The accuracy and completeness of the accounting records,
Return in form MGT 9 as provided under sub-Section (3)
Prevention and detection of frauds and errors and timely
of section 92 is annexed as Annexure A.
preparation of reliable financial information.
8. No loan was granted by the Company to any person to
Other Disclosures purchase or subscribe to fully paid-up shares of the Company.

1. Number of meetings of the Board: Four meetings of the 9. Details of the significant changes (i.e. change of 25%
Board of Directors of the Company were held during or more as compared to the immediately previous
the year under review on May 23, 2018, July 27, 2018, financial year) in key financial ratios, along with detailed
November 01, 2018 and January 29, 2019. explanations therefor, including:

2. Members of the Audit Committee are as under: Financial Ratios 2018-19 2017-18 Change %
(i) Debtors Turnover 4.99 6.28 -20.55%
a. Mr. Mukesh Patel – Chairman (ii) Inventory Turnover 2.89 3.09 -6.24%
b. Mr. Ashok Balwani – Member (iii) Interest Coverage 66.62 104.17 -36.05%
Ratio *
c. Ms. Indira Parikh – Member
(iv)Current Ratio 1.33 1.44 -7.57%
 Financial Ratios 2018-19 2017-18 Change % 23. Contract or arrangement under Section 188(1): There
(v) Debt Equity Ratio * 0.31 : 1 0.02 :1 1450.00% were no contracts or arrangements entered by the party
(vi) Operating Profit 8.00% 9.44% -15.28% falling under Section 188(1). Particulars of contracts or
Margin (%) arrangements with related parties are provided in Form
(vii) Net Profit Margin (%) 3.83% 4.58% -16.35% AOC 2 as Annexure D.
(viii) Return On Net wroth 14.02% 18.71% -25.10%
24. Policy on dealing with Related Party Transactions has been
* During the year Company has setup the global design center, Company disclosed on Company’s website and a weblink is as under:
has spent capital expenditure of H 610 Mn.
https://hitachiaircon.in//storage/uploads/Policy-on-
11. Secretarial Audit Report: Pursuant to the provisions of
Related-Party-Transactions-2019-05-16.pdf
Section 204 of the Companies Act, 2013, the Report of the
Secretarial Auditors is annexed as Annexure B. 25. Revision in Accounts or Board‘s Report: There are no
revisions made in the Accounts or Board‘s Report.
12. There is no fraud reported by Auditors under Section 143(12)
of the Companies Act, 2013 during the year under review. 26. Issue of Equity Shares with differential rights: There was
no Equity Share issued with differential voting rights during
13. Particulars of loans, investments or guarantees under
the year under review.
section 186: Company has not granted any loans, secured
or unsecured, to companies, firms or other parties covered 27. Issue of Sweat Equity Shares: There was no issue of Sweat
under Section 186. Company has not made any investment Equity Share during the year under review.
in securities of other Body Corporate. Company has given
guarantee of H 150 Million against the credit facilities 28. Employee Stock Option and Employee Stock Purchase
availed by dealers. Schemes: No Employee Stock Option and Employee Stock
Purchase Schemes were launched by the Company during
14. There is no subsidiary, associate and joint venture the year under review.
Company, so no disclosure is required on the performance
and financial position of each of the subsidiaries, associates 29. Disclosure under Regulation 34(3) read with Schedule V of
and joint venture companies in Form AOC 1. the SEBI (Listing Obligation and Disclosure Requirement)
Regulations, 2015: 23
15. There is no Company which has become or ceased to be
its subsidiary, joint venture or associate Company during a. The Equity Shares of the Company are not delisted or
the year. suspended during the year under review.

16. During the year, Company has not accepted deposits b. Equity Shares of the Company are listed on the BSE

FINANCIAL STATEMENTS
covered under Chapter V. Limited and the National Stock Exchange of India
Limited.
17. There is no qualification, reservation or adverse remark or
disclaimer made by the Auditors in their report. c. Annual listing fees have been paid to both the stock
exchanges mentioned above.
18. There is no qualification, reservation or adverse remark or
disclaimer made by the Company Secretaries in practice in 30. Dividend Distribution Policy is given as Annexure E to this
their Secretarial Audit Report. report.
19. There is no significant and material order passed by the 31. Company has complied with Secretarial Standards
regulators or courts or tribunals impacting the going applicable to Company.
STATUTORY REPORTS

concern status and Company’s operations in future.

20. Details of complaints relating to sexual harassment during Acknowledgement

the year under review:
Your Directors thank all Customers, Suppliers, Investors,
Number of complaints received during the year: 1 Bankers and other stakeholders of the Company for their co-
Number of complaints disposed of during the financial year: 1 operation and continued support during the year. We look
Number of complaints pending as on 31st March, 2019: 1. forward to their continued support in the future also.

21. Information pursuant to Section 134(3)(m) of the We wish to place on record our sincere appreciation for the
Companies Act, 2013 read with Rule 8(3) of the Companies excellent work put in by the employees of the Company at all
COMPANY OVERVIEW

(Accounts) Rules, 2014, relating to Conservation of energy, levels.

technology absorption and foreign exchange earnings and
outgo is given as Annexure C to this report. For and on behalf of the Board of Directors

22. Statement showing particulars of employees under Rule

5(2) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 is attached separately Place : Ahmedabad Gurmeet Singh
with this Annual Report. Date : May 16,2019 Chairman & Managing Director
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Annexure - A
FORM NO. MGT - 9
Extract of Annual return
As on the financial year ended March 31, 2019

[Pursuant to Section 92(3) of the Companies Act, 2013, and

Rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. Registration and Other Details:

i. CIN :
L29300GJ1984PLC007470
ii. Registration Date 7th December, 1984
:
iii. Name of the Company :
Johnson Controls-Hitachi Air Conditioning India Limited
iv. Category / Sub-Category of the Company :
Public Limited Company having Share Capital
v. 9th Floor, Abhijeet, Mithakhali Six Roads, Ahmedabad: 380006
Address of the Registered Office and contact details :
Ph. 079-26402024
vi. Whether listed Company : Yes
vii. Name, address and contact details of Registrar and : Link Intime India Pvt. Limited,
Transfer Agent, if any 506-508 Amarnath Business Center-1,
Beside Gala Business Centre,
Nr. St. Xavier’s College Corner,
Off C.G Road, Navrangpura,
Ahmedabad-380009
24

II. Principal Business Activities of The Company

All the Business Activities contributing 10% or more of the total turnover of the Company shall be stated:
Sr. Name and Description of main NIC Code of the Product / Service % to total turnover of the
No. Products / Services Company
1 Sales and service of Air conditioners 28192 92%

III. Particulars of Holding, Subsidiary and Associate Companies

Sr. Name and Address of the Company CIN / GLN Holding/ % of Shares Applicable
No. Subsidiary/ Held Section
Associate

1 JCHAC India Holdco Limited Not applicable Holding Company 74.252 Section 2(87)(ii)
C/o Mofo Notices Limited City Point,
One Ropemaker Street, London,
EC2Y 9AW,
United Kingdom
2 Johnson Control Hitachi Air Not applicable Holding Company 0.003 Section 2(87)(ii)
Conditioning Holding(UK)Limited
2, The Briars, Waterlooville,
Hampshire, PO7 7YH,
United Kingdom
Total 74.255
IV. Share Holding Pattern (Equity Share Capital Breakup as percentage of Total Equity)
i) Category-wise Shareholding

Category of shareholders No. of shares held at the beginning of No. of shares held at the end of the %
the year year change
Demat Physical Total % of Demat Physical Total % of during
total total the
shares shares year
A. Promoters & Promoters Group
(1) Indian
a) Individual / HUF - - - - - - - - -
b) Central Govt. - - - - - - - - -
c) State Govt.(s) - - - - - - - - -
d) Bodies Corporate - - - - - - - - -
e) Banks / FI - - - - - - - - -
f) Any Other…. - - - - - - - - -
Sub-Total (A)(1) - - - - - - - - -
(2) Foreign
a) NRIs - Individuals - - - - - - - - -
b) Other-Individuals - - - - - - - - -
c) Bodies Corp. 20190529 - 20190529 74.25 20190529 - 20190529 74.25 -
d) Banks / FI - - - - - - - - -
e) Any Other…. - - - - - - - - -
Sub-Total (A)(2) 20190529 - 20190529 74.25 20190529 - 20190529 74.25 -
Total Shareholding of Promoters (A) 20190529 - 20190529 74.25 20190529 - 20190529 74.25 -
= (A)(1)+(A)(2)
B. Public Shareholding
1. Institutions
a) Mutual Funds/ UTI 2984777 100 2984877 10.98 2940640 100.00 2940740 10.82 -0.16 25
b) Banks / FI 1635 100 1735 0.01 2390 100.00 2490 0.01 0.00
c) Central Govt. 107954 0 107954 0.40 121280 0.00 121280 0.45 0.05
d) State Govt.(s) - - - - - - - - -
e) Venture Capital Funds - - - - - - - - -

FINANCIAL STATEMENTS
f) Insurance Companies 947060 800 947860 3.49 1012910 800.00 1013710 3.73 0.24
g) FIIs 445047 0 445047 1.64 380709 0.00 380709 1.40 -0.24
h) Foreign Venture Capital Funds - - - - - - - - -
i) Others (Foreign Portfolio - - - - - - - - -
Investors)
Sub-Total (B)(1): 4486473 1000 4487473 16.52 4457929 1000 4458929 16.41 -0.11
2. Non Institutions
a) Bodies Corporate
i) Indian 264830 0 264830 0.97 379150 0 379150 1.39 0.42
ii) Overseas - - - - - - - - -
b) Individuals
STATUTORY REPORTS

i) Individual Share-holders 425503 0 425503 1.56 367515 0 367515 1.35 -0.21

holding nominal share
capital upto H 1 lac
ii) Individual Share-holders 1286840 369466 1656306 6.09 1314814 316526 1631340 6.00 -0.09
holding nominal share capital
in excess of H 1 lac
c) Others (NRI) 47283 0 47283 0.17 60237 0 60237 0.22 0.05
d) Others (Trust / HUF) 118960 0 118960 0.44 103184 0 103184 0.38 -0.06
Sub-Total (B)(2) 2143416 369466 2512882 9.23 2224900 316526 2541426 9.34 0.11
Total Shareholding of Public (B) = (B) 6629889 370466 7000355 25.75 6682829 317526 7000355 25.75 -
(1)+(B)(2)
COMPANY OVERVIEW

C. Shares held by Custodian for GDRs & - - - - - - - - -

ADRs
Grand Total (A+B+C) 26820418 370466 27190884 100.00 26873358 317526 27190884 100.00 -
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

ii) Shareholding of promoters

Sr. Shareholders Name Shareholding at the Shareholding at the % change
No. beginning of the year end of the year in share
No. of % of % of Shares No. of % of % of Shares holding
Shares total Pledged / Shares total Pledged / during the
shares Encum-bered shares encumbered year
of the to total of the to total
Company shares Company shares
1 JCHAC India Holdco 20189894 74.25 - 20189894 74.25 - -
Limited
2 Johnson Control 635 0.00 - 635 0.00 - -
Hitachi Air Conditioning
Holding(UK)Limited
Total 20190529 74.25 - 20190529 74.25 - -

iii) Change in Promoters’ Shareholding:

Sr. No. of Shares % of total shares

No. of the Company
1 At the beginning of the year 20190529 74.25
2 Date wise Increase/Decrease in Promoters Shareholding during the year
specifying the reasons for increase / decrease (e.g. allotment / transfer / No change during the year
bonus / sweat equity etc):
3 At the end of the year 20190529 74.25

26 v) Shareholding pattern of Top 10 Shareholder (Other than Directors and Promoters)

Sr. Name of Shareholder Date Increase / No of Reasons % of

No. Decrease Shares for total
No of increase / shares of
Shares decrease the Co
1 Bajaj Allianz Life At the beginning of the year 1-Apr-18 610569 2.25
Insurance Company Ltd 13-Apr-18 5000 615569 Transfer 2.26
6-Jul-18 800 616369 Transfer 2.27
29-Sep-18 -1000 615369 Transfer 2.26
5-Oct-18 10000 625369 Transfer 2.30
7-Dec-18 3500 628869 Transfer 2.31
14-Dec-18 4006 632875 Transfer 2.33
21-Dec-18 82 632957 Transfer 2.33
28-Dec-18 3800 636757 Transfer 2.34
4-Jan-19 -5000 631757 Transfer 2.32
1-Feb-19 1200 632957 Transfer 2.33
8-Feb-19 923 633880 Transfer 2.33
22-Feb-19 1200 635080 Transfer 2.34
1-Mar-19 -6500 628580 Transfer 2.31
8-Mar-19 2000 630580 Transfer 2.32
15-Mar-19 -9900 620680 Transfer 2.28
22-Mar-19 -71000 549680 Transfer 2.02
At the end of the year 31-Mar-19 58000 607680 Transfer 2.23
2 Reliance Capital At the beginning of the year 1-Apr-18 211344 0.78
Trustee Co. Ltd At the end of the year 31-Mar-19 211344 0.78
3 Franklin India At the beginning of the year 1-Apr-18 218419 0.80
Smaller Companies Fund 12-Oct-18 188 218607 Transfer 0.80
14-Dec-18 -4071 214536 Transfer 0.79
21-Dec-18 -9355 205181 Transfer 0.75
28-Dec-18 -1532 203649 Transfer 0.75
31-Dec-18 -474 203175 Transfer 0.75
4-Jan-19 -16879 186296 Transfer 0.69
Sr. Name of Shareholder Date Increase / No of Reasons % of
No. Decrease Shares for total
No of increase / shares of
Shares decrease the Co
11-Jan-19 -347 185949 Transfer 0.68
1-Feb-19 -687 185262 Transfer 0.68
8-Feb-19 -50902 134360 Transfer 0.49
22-Feb-19 -4050 130310 Transfer 0.48
1-Mar-19 -25366 104944 Transfer 0.39
8-Mar-19 -24414 80530 Transfer 0.30
4 Birla Sun Life At the beginning of the year 1-Apr-18 843023 3.10
Trustee Co Pvt Ltd At the end of the year 31-Mar-19 843023 3.10
5 Canara HSBC Oriental At the beginning of the year 1-Apr-18 336491 1.24
Bank Of Commerce 13-Apr-18 2613 339104 Transfer 1.25
20-Apr-18 -1840 337264 Transfer 1.24
27-Apr-18 -2420 334,844 Transfer 1.23
18-May-18 -2557 332,287 Transfer 1.22
1-Jun-18 -291 331996 Transfer 1.22
15-Jun-18 51 332047 Transfer 1.22
30-Jun-18 65 332112 Transfer 1.22
6-Jul-18 84 332196 Transfer 1.22
13-Jul-18 16012 348208 Transfer 1.28
20-Jul-18 2414 350622 Transfer 1.29
27-Jul-18 1235 351857 Transfer 1.29
3-Aug-18 3571 355428 Transfer 1.31
10-Aug-18 436 355864 Transfer 1.31
17-Aug-18 3313 359177 Transfer 1.32
24-Aug-18 3397 362574 Transfer 1.33
31-Aug-18 800 363374 Transfer 1.34 27
14-Sep-18 -4271 359103 Transfer 1.32
21-Sep-18 65 359168 Transfer 1.32
29-Sep-18 242 359410 Transfer 1.32
5-Oct-18 230 359640 Transfer 1.32
12-Oct-18 625 360265 1.32

FINANCIAL STATEMENTS
Transfer
19-Oct-18 -218 360047 Transfer 1.32
26-Oct-18 -185 359862 Transfer 1.32
2-Nov-18 227 360089 Transfer 1.32
9-Nov-18 184 360273 Transfer 1.32
7-Dec-18 -140 360133 Transfer 1.32
14-Dec-18 701 360834 Transfer 1.33
21-Dec-18 -672 360162 Transfer 1.32
28-Dec-18 568 360730 Transfer 1.33
31-Dec-18 0 360730 Transfer 1.33
4-Jan-19 -381 360349 Transfer 1.33
STATUTORY REPORTS

11-Jan-19 -24 360325 Transfer 1.33

18-Jan-19 0 360325 Transfer 1.33
25-Jan-19 0 360325 Transfer 1.33
1-Feb-19 -682 359643 Transfer 1.32
8-Feb-19 1208 360851 Transfer 1.33
15-Feb-19 0 360851 Transfer 1.33
22-Feb-19 0 360851 Transfer 1.33
1-Mar-19 850 361701 Transfer 1.33
8-Mar-19 0 361701 Transfer 1.33
15-Mar-19 15303 377004 Transfer 1.39
22-Mar-19 28226 405230 1.49
COMPANY OVERVIEW

Transfer
At the end of the year 31-Mar-19 405230 1.49
6 Birla Sun Life Trustee Co At the beginning of the year 1-Apr-18 1022134 3.76
Pvt Ltd
13-Apr-18 15783 1037917 Transfer 3.82
20-Apr-18 5940 1043857 Transfer 3.84
27-Apr-18 5940 1049797 Transfer 3.86
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Sr. Name of Shareholder Date Increase / No of Reasons % of

No. Decrease Shares for total
No of increase / shares of
Shares decrease the Co
4-May-18 7153 1056950 Transfer 3.89
11-May-18 14137 1071087 Transfer 3.94
18-May-18 7623 1078710 Transfer 3.97
25-May-18 11673 1090383 Transfer 4.01
1-Jun-18 10125 1100508 Transfer 4.05
8-Jun-18 10665 1111173 Transfer 4.09
15-Jun-18 9315 1120488 Transfer 4.12
22-Jun-18 8125 1128613 Transfer 4.15
30-Jun-18 6120 1134733 Transfer 4.17
6-Jul-18 6075 1140808 Transfer 4.20
13-Jul-18 3780 1144588 Transfer 4.21
20-Jul-18 1800 1146388 Transfer 4.22
21-Sep-18 2160 1148548 Transfer 4.22
29-Sep-18 36220 1184768 Transfer 4.36
5-Oct-18 224 1184992 Transfer 4.36
2-Nov-18 12938 1197930 Transfer 4.41
7-Dec-18 1620 1199550 Transfer 4.41
21-Dec-18 5596 1205146 Transfer 4.43
4-Jan-19 702 1205848 Transfer 4.43
11-Jan-19 3782 1209630 Transfer 4.45
18-Jan-19 270 1209900 Transfer 4.45
1-Mar-19 6793 1216693 Transfer 4.47
At the end of the year 31-Mar-19 43316 1260009 4.63
7 Birla Sun Life Trustee Co At the beginning of the year 1-Apr-18 235000 0.86
28 Pvt Ltd
25-May-18 30000 265000 Transfer 0.97
15-Feb-19 -14729 250271 Transfer 0.92
At the end of the year 31-Mar-19 -56162 194109 0.71

8 Aditya Birla Sun Life At the beginning of the year 1-Apr-18 134866 0.50
Trustee Co Pvt. Ltd 19-Oct-18 -6871 127,995 Transfer 0.47
26-Oct-18 -12800 115,195 Transfer 0.42
21-Dec-18 -5498 109,697 Transfer 0.40
11-Jan-19 -3503 106,194 Transfer 0.39
At the end of the year 31-Mar-19 -7218 98976 Transfer 0.36
9 Blue Diamond At the beginning of the year 1-Apr-18 94491 0.35
Properties Pvt. Ltd At the end of the year 31-Mar-19 94491 0.35
10 Kotak Mahindra At the beginning of the year 1-Apr-18 96711 0.36
(International) Limited At the end of the year 31-Mar-19 96711 0.36
11 Sundaram India Premier At the beginning of the year 1-Apr-18 108541 0.40
Fund
22-Mar-19 1841 110382 Transfer 0.41
At the end of the year 31-Mar-19 110382 0.41

vi) Shareholding of Directors and Key Managerial Personnel

For each of the Directors Shareholding at the beginning of the year Cumulative Shareholding during the year
and KMP No. of % of total shares No. of % of total shares
Shares of the Company Shares of the Company
Mr. Mukesh Patel 1500 0.01 1500 0.01
V. Indebtedness
Indebtedness of the Company including interest outstanding/accrued but not due for payment
(H in Million)
Name of Director Secured Loans Unsecured Deposits Total
Excluding deposits Loans Indebtedness
Indebtedness at the beginning of the financial year
i) Principal Amount 0.0 126.6 0.0 126.6
ii) Interest due but not paid 0.0 0.0 0.0 0.0
iii) Interest accrued but not due 0.0 0.0 0.0 0.0
Total (i+ii+iii) 0.0 126.6 0.0 126.6
Change in Indebtedness during the financial year
Addition 0.0 1769.60 0.0 1769.60
Reduction 0.0 0.0 0.0 0.0
Net Change 0.0 1769.60 0.0 1769.60
Indebtedness at the end of the financial year
i) Principal Amount 0.0 1896.20 0.0 1896.20
ii) Interest due but not paid 0.0 0.0 0.0 0.0
iii) Interest accrued but not due 0.0 0.0 0.0 0.0
Total (i+ii+iii) 0.0 1896.20 0.0 1896.20

VI. Remuneration of Directors and Key Managerial Personnel

A. Remuneration to Managing Director, Whole-time Directors and/or Manager
(H In Million)
Sr. Particulars of Remuneration Mr. Gurmeet Singh Total Amount 29
No. Chairman and
Managing Director
1 Gross Salary
(a) Salary as per provisions contained in Section 17(1) of the Income 18.0 18.0

FINANCIAL STATEMENTS
Tax Act, 1961
(b) Value of perquisites under Section 17(2) Income Tax Act, 1961 0.1 0.1
(c) Profit in lieu of salary under Section 17(3) Income Tax Act, 1961 - -
2 Stock Options - -
3 Sweat Equity - -
4 Commission - -
- as % of profit - -
- others, specify…. - -
5 Others, please specify– Retirement benefits and tax exempted benefits 0.4 0.4
Total (A) 18.5 18.5
STATUTORY REPORTS

B. Remuneration to other Directors:

1. Independent Directors
(H In Million)
Sr. Particulars of Remuneration Name of Director Total Amount
No. Mr. Ashok Balwani Ms. Indira Parikh Mr. Mukesh Patel
1 Fee for attending Board/ 0.8 0.8 0.8 2.4
Committee Meetings
2 Commission - - - -
COMPANY OVERVIEW

3 Others, please Specify - - - -

Total (1) 2.4
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

2. Other Non-Executive Directors

(H In Million)
Sr. Particulars of Remuneration Mr. Franz Cerwinka Mr. Yoshikazu Ishihara Total Amount
No.
1 Fee for attending Board /Committee Meetings - - -
2 Commission - - -
3 Others, please Specify - - -
Total (2) -
Total (B)=(1+2) 2.4
Total Managerial Remuneration (Excluding Sitting Fees) 18.5
Overall Ceiling as per the Act 147.4
(11% of the net profits of the Company calculated as per Section 198 of the Companies Act, 2013)

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD

Key Managerial Personnel (H In Million)
Sr. Particulars of Remuneration Mr. Rishi Mehta Mr. Parag Dave Total Amount
No. Chief Financial Officer Company Secretary
1 Gross Salary
a) Salary as per provisions contained in Section 7.6 2.2 9.8
17(1) of the Income Tax Act, 1961
(b) Value of perquisites under Section 17(2) 0.01 0.03 0.04
Income Tax Act, 1961
(c) Profit in lieu of salary under Section 17(3) - - -
Income Tax Act, 1961
2 Stock Options - - -
3 Sweat Equity - - -
30
4 Commission - - -
- as % of profit - - -
- others, specify…. - - -
5 Others, please specify – Retirement benefits and 0.6 0.1 0.7
tax exempted benefits

VII. Material Penalties / Punishments / Compounding of Offences

Type Section of the Brief Details of Penalty / Authority Appeal made,
Companies Act Description Punishment / [RD / NCLT / if any
Compounding fees COURT] (give details)
imposed
A. Company
Penalty
Punishment None
Compounding
B. Directors
Penalty
Punishment None
Compounding
C. Other Officers in Default
Penalty
Punishment None
Compounding
Annexure B
Form No. MR-3
Secretarial Audit Report
As on the financial year ended March 31, 2019

[Pursuant to Section 92(3) of the Companies Act, 2013, and

Rule 12(1) of the Companies (Management and Administration) Rules, 2014]

To,
The Members,
Johnson Controls - Hitachi Air Conditioning India Limited,
9th Floor, Abhijeet-1,
Mithakhali Six Roads,
Ahmedabad – 380 006

We have conducted the Secretarial Audit of the compliance (v) The following Regulations and Guidelines prescribed under
of applicable statutory provisions and the adherence to the Securities and Exchange Board of India Act, 1992 (‘SEBI
good corporate practices by Johnson Controls - Hitachi Air Act’):
Conditioning India Limited (CIN: L29300GJ1984PLC007470)
(hereinafter called “the company”). Secretarial Audit was (a) The Securities and Exchange Board of India (Substantial
conducted in a manner that provided us a reasonable basis for Acquisition of Shares and Takeovers) Regulations,
evaluating the corporate conducts/statutory compliances and 2011;
expressing my opinion thereon.
(b) The Securities and Exchange Board of India (Prohibition 31
Based on our verification of the Johnson Controls - Hitachi of Insider Trading) Regulations, 2015;
Air Conditioning India Limited’s books, papers, minute books,
(c) The Securities and Exchange Board of India (Issue of
forms and returns filed and other records maintained by the
Capital and Disclosure Requirements) Regulations,
company and also the information provided by the Company,
2009/2018;

FINANCIAL STATEMENTS
its officers, agents and authorized representatives during the
conduct of Secretarial Audit, We hereby report that in our (d) The Securities and Exchange Board of India (Share
opinion, the company has, during the audit period covering Based Employee Benefits) Regulations, 2014; (Not
the financial year ended on 31st March, 2019 complied with applicable to the Company during the Audit Period)
the statutory provisions listed hereunder and also that the
Company has proper Board-processes and compliance- (e) The Securities and Exchange Board of India (Issue and
mechanism in place to the extent, in the manner and subject Listing of Debt Securities) Regulations, 2008;
to the reporting made hereinafter:
(f) The Securities and Exchange Board of India (Registrars
We have examined the books, papers, minute books, forms and to an Issue and Share Transfer Agents) Regulations,
returns filed and other records maintained by “the company”, 1993 regarding the Companies Act and dealing with
STATUTORY REPORTS

having its Registered Office at “9th Floor, Abhijeet-1, Mithakhali client;

Six Roads, Ahmedabad – 380 006 for the financial year ended
(g) The Securities and Exchange Board of India (Delisting
on 31st March, 2019 according to the provisions of:
of Equity Shares) Regulations, 2009; and (Not
(i) The Companies Act, 2013 (the Act) and the rules made applicable to the Company during the Audit Period)
there under;
(h) The Securities and Exchange Board of India (Buyback
(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) of Securities) Regulations, 1998/2018; (Not applicable
and the rules made there under; to the Company during the Audit Period)
COMPANY OVERVIEW

(iii) The Depositories Act, 1996 and the Regulations and Bye- (vi) The Company has complied with the following specifically
laws framed thereunder; other applicable laws to the Company:

(iv) Foreign Exchange Management Act, 1999 and the rules (a) E-waste Management Rules, 2012
and regulations made there under to the extent of Foreign
We have also examined compliance with the applicable
Direct Investment, Overseas Direct Investment and
clauses of the following:
External Commercial Borrowings;
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

(i) Secretarial Standards issued by The Institute of operations of the company to monitor and ensure compliance
Company Secretaries of India. with applicable laws, rules, regulations and guidelines.

(ii) SEBI Listing (Obligations and Disclosure Requirements) We further report that during the audit period, the company
Regulations, 2015. has no specific events / actions having a major bearing on the
company’s affairs in pursuance of the above referred laws, rules,
During the period under review the Company has complied regulations, guidelines, standards, etc. except the following:
with the provisions of the Act, Rules, Regulations, Guidelines,
Standards, etc. 1. The Company has decided to invest 20 Million USD
(Approx. H 150 Crores) to expand its existing design and
We further report that development capabilities by setting up additional labs and
hiring more engineers in a phased manner. Through this
The Board of Directors of the Company is duly constituted with
development center, the company plans to cater not only
proper balance of Executive Directors, Non-Executive Directors
to Indian market but also to global requirements across
and Independent Directors. The changes in the composition of
Johnson Controls-Hitachi group entities.
the Board of Directors that took place during the period under
review were carried out in compliance with the provisions of
the Act. FOR M C Gupta & Co,
Company Secretaries
Adequate notice is given to all directors to schedule the Board UCN: S1986GJ003400
Meetings, agenda and detailed notes on agenda were usually
sent seven days in advance, and a system exists for seeking and
obtaining further information and clarifications on the agenda Mahesh C Gupta
items before the meeting and for meaningful participation at Place : Ahmedabad Proprietor
the meeting. Date : 16th May, 2019 FCS: 2047 (CP: 1028)

There were no dissenting views on any matter.

Note: This Report is to be read with Our Letter of even date
We further report that there are adequate systems and which is annexed as Annexure “A” and forms an integral part
32 of this report.
processes in the company commensurate with the size and

Annexure A
To,
The Members,
Johnson Controls - Hitachi Air Conditioning India Limited,
9th Floor, Abhijeet-1,
Mithakhali Six Roads,
Ahmedabad – 380 006

Our Report of even date is to be read along with this Letter; 5. The compliance of the provisions of Corporate and other
applicable laws, rules, regulations, standards, is the
1. Maintenance of Secretarial Record is the responsibility of responsibly of the management. Our examination was
the management of the company. Our responsibility is to limited to the verification of the procedures on test basis.
express an opinion on Secretarial Records based on our
Audit. 6. The Secretarial Audit report is neither an assurance as to
the future viability of the company not of the efficacy or
2. We have followed the audit practices and processes as effectiveness with which the management has conducted
were appropriate to obtain reasonable assurance about the affairs of the company.
the correctness of the contents of the Secretarial Records.
The verification was done on test basis to ensure that
correct facts are reflected in Secretarial records. We FOR M C Gupta & Co,
believe that the processes and practices we followed Company Secretaries
provide a reasonable basis for our opinion. UCN: S1986GJ003400
3. We have not verified the correctness and appropriateness
of financial records and books of accounts of the company.
Mahesh C Gupta
4. Wherever required, we have obtained the Management Place : Ahmedabad Proprietor
Representation about the compliance of laws, rules and Date : 16th May, 2019 FCS: 2047 (CP: 1028)
regulations and happening of events etc.
Annexure C
Information pursuant to Section 134(3)(m) of the Companies 7. Development of 9.5 Amps inverter controller serves for
Act, 2013 read with Rule 8(3) of the Companies (Accounts) models capacity ranges from 1.0TR ~ 1.5TR with DC
Rules, 2014, relating to conservation of energy, Technology ODU Motor, The base of this controller is Cascade vector
absorption and Foreign exchange earnings and outgo. control.

8. Development of Highest ISEER Models in 1.0TR / 1.5TR /

Conservation of Energy 1.8TR Inverter segments.
Company saved total 562K-KWH in a year by initiating following 9. Development of Inverter Series with Capillary as refrigerant
measures: expansion means instead of EXVs.
1. Replacement of MHL lamps by LED lamps on shop floor at 10. Development of 1, 1.5 and 2 HP compact HAT model with
the Plant (Around 3.5 Lac unit per year). left and right side piping provision and developed models
will be used against imported unit.
2. Installation of High efficient IE-4 water circulation pumps
for cooling water circulation. (Around 1.2 Lac unit per 11. Development of 8 and 10 HP in the ceiling IDU with single
Year). expansion valve and optimized heat exchanger.
3. Installation of High speed blower for cooling and flushing 12. Development of 16 and 20 HP VRF ceiling suspended IDU/
of heat exchangers in place of compressed air (Around Convertible IDU.
42,000 units per Year).
13. Development of 0.8 HP hi wall IDU.
5. Installed heater insulated jackets on Moldings machines
saving Kwh. (Around 40,000 units / Year). 14. Development of 7.5TR FSP model (Flexibility to connect
Cassette, HiWall, HAT IDU with single ODU). 33
6. Installed new LT panel with bus coupler system in between
2 transformers for saving running losses of one transformer
during off season. (10K units / Year). Technology absorption
1. iFresh technology serves mainly to clean the heat
Research and development exchanger automatically to maintain the unit performance

FINANCIAL STATEMENTS
applicable to RAC Inverter series.
1. Development of Eco refrigerant (R-32) Constant speed
Split Air conditioners Complete Line up. 2. Using BMS / IoT connectivity in Takumi units to get plugged
into a RTG CMS for automation & predictive maintenance
2. Development of iFresh Technology serves in automatic (With provision of a IoT based Central Station Gateway,
cleaning of heat exchanger timely and significantly reduce we can achieve multiple connectivity options & offer the
the power consumption and maintain the Airflow around same flexibility to our customers with connectivity to open
the year. protocol systems like BMS & other IoT systems.)
3. Development of Bigger capacity units as 1.6 & 2.1 TR using During the year Company has purchased and absorbed
STATUTORY REPORTS

bigger Indoor to explore the capacity size and product Technology as under:
verities to serve in the market where the demand is for
higher airflow and capacity. (i) iFresh technology for RAC Inverter.

4. Development of New aesthetic designed panels for Indoor

units. Foreign exchange earnings and outgo

5. Development of Basic Premium Remote Handset. The required information in respect of foreign exchange
earnings and outgo has been given in the notes forming part of
6. Performance evaluation of Multi Inverter products for the Financial Statements.
Europe.
COMPANY OVERVIEW
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Annexure D
Form No. AOC-2
[Pursuant to Section 92(3) of the Companies Act, 2013, and
Rule 12(1) of the Companies (Management and Administration) Rules, 2014]

Form for disclosure of particulars of contracts/arrangements entered into by the Company with
related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including
certain arm’s length transactions under third proviso thereto
1. Details of contracts or arrangements or transactions not at arm’s length basis:

Name(s) of the Nature of Duration Salient terms of Justification Date(s) of Amount Date on which
related party contracts of the the contracts or for entering approval by paid as the special
and nature of arrange-ments contracts arrange-ments into such the Board advances, resolution
relationship transactions / arrange- or transactions contracts if any: was passed
ments including the or arrange- in general
transactions value, if any ments or meeting as
transactions required under
first proviso to
section 188
(a) (b) (c) (d) (e) (f) (g) (h)
No such transaction
34
2. Details of material contracts or arrangement or transactions at arm’s length basis:
Name(s) of the Nature of Duration of the contracts / Salient terms of Date(s) of Amount paid as
related party contracts arrangements / transactions the contracts or approval by advances, if any:
and nature of arrange-ments arrange-ments the Board, if
relationship transactions or transactions any:
including the
value, if any:
(a) (b) (c) (d) (e) (f)
Details of Related party Royalty payment: Seven years. Approval No advance
transactions are disclosed in Technical Know How fees: On of Board of amount paid for
Financial Statement receipt of Technical Information. Directors is Related party
Other transactions: Ongoing nature not required transactions
Annexure E
Dividend Distribution Policy

Introduction Financial parameters that shall be considered

while declaring dividend:
As required under SEBI (Listing Obligations and Disclosure
Requirements) (Second Amendment) Regulations, 2016, 1. Current year profits.
Company is required to formulate a Dividend Distribution
Policy. 2. Possibilities of increasing cash requirements in the
business including capital expenditure.
The Board of Directors shall recommend dividend in compliance
with this policy, the provisions of the Companies Act, 2013 and 3. Any potential unforeseen events and contingencies with
Rules made thereunder and other applicable legal provisions. financial implications.

Company, presently, has only one class of shares, i.e. Equity

Internal and external factors that shall be
Shares, for which this Dividend policy is applicable.
considered for declaration of dividend:

Circumstances under which the shareholders 1. Available distributable surplus.

may expect dividend: 2. Company’s liquidity position and future cash flow needs.
1 Adequate profit for current year calculated as per
3. Track record of Dividends distributed by the Company.
Companies Act, 2013 and adequate accumulated profit of
previous year(s). 4. Capital expenditure requirements for expansion and other
opportunities.
2 Company’s current and future financial requirements, 35
including growth opportunities. 5. Further business potential for the Company.

6. Any other relevant factors that the Board may deem fit to
Circumstances under which the shareholders consider before declaring Dividend.
may not expect dividend:

FINANCIAL STATEMENTS
1. Inadequate profit of current year and / or inadequate Policy as to how the retained earnings shall be
accumulated profit of previous year(s). utilized:
2. Board has planned Capital expenditure for next year. Retained earnings will be used inter alia for the Company’s
growth plans, working capital requirements, debt repayments,
if any and other contingencies.

STATUTORY REPORTS
COMPANY OVERVIEW
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

REPORT ON CORPORATE GOVERNANCE

I. Company’s Philosophy on Code of Corporate 4. Compliance of laws and regulations applicable to the
Governance Company with true letter and spirit;

Your Company is committed to adopt best management 5. To ensure awareness of the Shareholders, Customers,
practices for achieving its pre-defined objectives with Suppliers, Employees. Timely disclosure of all
ethical standards and transparent & fair conduct of the operational and financial information of the Company
business. within the purview of the laws.

Company believes that vital components of prudent 6. To create, maintain and ensure safe and clean
Corporate Governance are - Compliance of laws, internal environment for sustainable development for next
control systems, transparent accounting practices generation.
and policies, timely disclosures, optimum mixture of
independent directors in the Board, etc. II. Board of Directors, Committees and
Company’s Corporate Governance is framed on the basis
Remuneration of Directors
of following principles: Board of Directors
1. Ethical and fair conduct of business to achieve its Present strength of the Board of Directors of your
goal by enhancing the brand equity and value of the Company is six members. The composition of the Board
Company. is in conformity with Regulation 17(1) of the SEBI (Listing
Obligation and Disclosure Requirement) Regulations, 2015.
2. Internal Control systems applied to all operations of
The Board of Company has optimum combination of Non-
the Company.
independent and Independent Directors. As on March 31,
36
3. Appropriate size and mixture of the board containing 2019, Board of the Company consists of one (1) Executive
one half of Independent Directors. Directors have Director (Chairman and Managing Director), two (2) Non-
expertise in different areas. executive Directors and three (3) Independent Directors.

Details of their position and number of Board / Committees in which they are Chairman / Member are as under:
Name of Director Promoter / Executive / No. of Directorship in No. of Committees*
Non-executive / Independent Listed Indian Companies Position held as
(Including this Company) Chairman Member
Mr. Gurmeet Singh Chairman / Executive (Managing Director) 1 - 1
Mr. Franz Cerwinka Promoter / Non-Executive 1 - -
Mr. Yoshikazu Ishihara Promoter / Non-Executive 1 - 1
Mr. Ashok Balwani Non-Executive / Independent 1 - 1
Ms. Indira Parikh Non-Executive / Independent 4 - 3
Mr. Mukesh Patel Non-Executive / Independent 3 4 2
*Includes only Audit Committee and Stakeholders Relationship Committee.

Directors are holding Directorship in following Listed Companies (including this Company):
Name of Director Name of Company Category of Directorship
Mr. Ashok Balwani Johnson Controls-Hitachi Air Conditioning India Limited Independent Director
Mr. Mukesh Patel Johnson Controls-Hitachi Air Conditioning India Limited Independent Director
Cadila Healthcare Limited Independent Director
The Sandesh Limited Independent Director
Ms. Indira Parikh Johnson Controls-Hitachi Air Conditioning India Limited Independent Director
Deepak Nitrite Limited Independent Director
Force Motors Limited Independent Director
Reliance Nippon Life Insurance Company Limited Independent Director
Skills/expertise/competence of the board of directors: • Inspiring team with a vision for success

List of Core Skills / expertise / competencies identified • Effective Delegation

by the Board of Directors as required in the Context of • Ensuring good two-way communication
the Company’s Business for it to function effectively and
available with the Board are as under: 5. Team Management Skills

1. Vision, Strategic planning and Decision making • Ensure team knows their role

• Know where business is heading and how to • Set clear goals and communicate
position it to get there • Put in place clear lines of communication
• Understand the challenges and opportunities • Clarify lines of responsibility
business faces and the best ways to address them
• Involve all team members in decision-making as
• Intuition, reasoning and application of techniques much as possible
• Improve the overall performance of business • Introduce ways to manage and resolve differences
• Analysis and use of information • Encourage training and personal development
• Risk Management and mitigation capabilities • Build in regular reviews

2. Business skill 6. Promoters of Vision, Mission and Values of Johnson

Controls Group – Integrity First, Purpose Led, Customer
• Industry knowledge - experience and knowledge
Driven, Future Focused and One Team
of the Air conditioning and Refrigeration Industry
• Design and development of products of the 7. Have flair for sustainable development, environment
Company protection and social upliftment

• Production – knowledge of effective and efficient 8. Adopters of an inclusive and beneficial approach for all
processes of production stakeholders 37

• Marketing - advertising, promotion and PR Certification regarding Directors:

• Sales - pricing, negotiating, customer service and
Company has obtained a certificate from Tejal Shah &
tracking competitors
Associates that none of the directors on the board of the

FINANCIAL STATEMENTS
3. Functional Skill company have been debarred or disqualified from being
appointed or continuing as directors of companies by the
• Finance – Knowledge of accounts and taxation, Board/Ministry of Corporate Affairs or any such statutory
Budgeting, cash flow planning and credit- authority.
management
Independent Directors:
• Legal – Understanding laws and regulations
relevant to Company / Industry Company has received declarations from Independent
Directors under Section 149(7) of the Companies Act,
• Internal Controls – Ability to advice on
2013 and Regulation 25(8) of SEBI (Listing Obligations
strengthening of checks and balances
STATUTORY REPORTS

and Disclosure Requirements) Regulations, 2015. Board

• Procurement and buying – managing contracts, opines that they meet criteria of Independence and they
stock control and inventory planning fulfill the conditions specified in Companies Act, 2013 and
SEBI (Listing Obligations and Disclosure Requirements)
• Personnel - recruitment, dispute resolution,
Regulations, 2015 and are independent of the management.
motivating staff and managing training
• General administration No Independent Director has resigned during the year.

4. Leadership skill The details of familiarization program have been disclosed

on the Company’s website and a web link is as under:
• Involving team in decision-making
COMPANY OVERVIEW

h t t p s : / / w w w. h i t a c h i a i r c o n . i n / s t o r a g e / u p l o a d s /
• Providing personal encouragement Familiarization-program-for-Independent-
• Recognizing and rewarding good performance Directors-2018-19.pdf

• Helping to build team’s confidence to use own

initiative
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Attendance of Board Meeting and Annual General Meeting During the year from April 01, 2018 to March 31, 2019
4 (Four) Audit committee meetings were held i.e. on
Schedule of Board meetings for the year is decided at the May 23, 2018, July 27, 2018, November 01, 2018 and
beginning of the year. The Board meets at least once in a January 29, 2019. Attendances of the members at the
quarter, inter-alia, to review the performance of the quarter. meetings were as under:
During the year from April 01, 2018 to March 31, 2019,
Name of Members of Committee Meetings attended
4 (Four) Board Meetings were held i.e. on May 23, 2018,
Mr. Mukesh Patel 4
July 27, 2018, November 01, 2018 and January 29, 2019.
Mr. Ashok Balwani 4
The last Annual General Meeting (AGM) was held on
Ms. Indira Parikh 4
July 27, 2018. The attendance of Directors at these Board
Meetings and the last AGM were as under: Nomination and Remuneration Committee

Name of Director Board Annual General Nomination and Remuneration Committee takes all
Meetings Meeting decisions relating to remuneration of Executive Directors
Mr. Gurmeet Singh 4 Present and recommends appointment of Directors and Senior
Mr. Franz Cerwinka 2 Absent Management Personnel of the Company subject to such
Mr. Yoshikazu Ishihara 3 Present approval of Shareholders and Central Government as and
Mr. Ashok Balwani 4 Present when required.
Ms. Indira Parikh 4 Present
Mr. Mukesh Patel 4 Present Members of the Nomination and Remuneration Committee
as on March 31, 2019 are as under:
Number of Shares held by Non-Executive Directors
Mr. Mukesh Patel – Chairman
Details of Number of Shares held by Non-executive Mr. Ashok Balwani – Member
Directors in their own name or in the name of other persons Ms. Indira Parikh – Member
on beneficial basis as on March 31, 2019 are as under:
During the year under review, 2 (Two) Nomination and
38 Name of Director No of Shares held Remuneration Committee Meetings were held i.e. on
Mr. Franz Cerwinka Nil May 23, 2018, and January 29, 2019. Attendance of the
Mr. Yoshikazu Ishihara Nil members at the meetings were as under:
Mr. Ashok Balwani Nil
Ms. Indira Parikh Nil Name of Members of Committee Meetings attended
Mr. Mukesh Patel 1,500 Mr. Mukesh Patel 2
Mr. Ashok Balwani 2
Inter-se relationship between Directors Ms. Indira Parikh 2

None of the Directors is in any way related to other Terms of Appointment / Remuneration
Directors of the Company.
Executive Directors including Managing Director are usually
Audit Committee appointed for three years at the remuneration within the
limit prescribed under the Companies Act, 2013.
Audit Committee comprises of three members, all being
Non-executive Independent Directors. Audit Committee is Independent Directors are paid sitting fees of H 80,000
empowered to exercises its role, responsibilities and powers for attending Board meeting, H 80,000 for attending
as prescribed in Regulation 18(3) Part C of schedule 2 of SEBI Audit Committee Meeting, H 60,000 for attending CSR
(Listing Obligation and Disclosure Requirements) Regulation, Committee meeting, H 20,000 for attending Nomination
2015 and Section 177A of the Companies Act, 2013. and Remuneration Committee Meeting, H 20,000 for
attending Executive Committee Meeting and H 30,000 for
Members of the Audit Committee as on March 31, 2019 are attending Stakeholders Relationship Committee Meeting.
as under:

Mr. Mukesh Patel – Chairman

Mr. Ashok Balwani – Member
Ms. Indira Parikh – Member
 Details of Remuneration of directors during the year under review are as under:
(H in Million)
Name of Director Salary Perquisites Performance Retire-ment Sitting Fees Total
linked Incentives benefits Remuneration
Mr. Gurmeet Singh 10.5 3.9 3.1 1.0 Nil 18.5
Mr. Franz Cerwinka Nil Nil Nil Nil Nil Nil
Mr. Yoshikazu Ishihara Nil Nil Nil Nil Nil Nil
Mr. Mukesh Patel Nil Nil Nil Nil 0.8 0.8
Mr. Ashok Balwani Nil Nil Nil Nil 0.8 0.8
Ms. Indira Parikh Nil Nil Nil Nil 0.8 0.8

No Director is holding share under Stock Option since no There has been no instance of non-compliance by the
Stock Option Scheme is launched by the Company. Company on any matter related to capital markets during
the last three years and hence no penalty or strictures
There was no other pecuniary relationship or transaction imposed on the Company for such matters by Stock
of the Non-executive Director vis-à-vis the Company Exchanges or SEBI or any statutory authority.
during the year under review.
Commodity price risk/foreign exchange risk and hedging
Formal appointment and evaluation policy of the Board activities:
and senior management has been placed on the website
of the Company. The Company’s robust planning and strategy ensures that
its interest is protected against Commodity price risk.
Stakeholders Relationship Committee The Company enters into the forward contracts to hedge
against its foreign currency exposures while do not enter
Stakeholders Relationship Committee consisted of
into the forward contracts to hedge against the Commodity
following members as on March 31, 2019:
price risk.
Mr. Mukesh Patel – Chairman
The details of foreign exchange exposures as on 39
Mr. Gurmeet Singh – Member
March 31, 2019 are disclosed in Notes to the financial
Mr. Yoshikazu Ishihara – Member
statements.
Number of shareholders’ complaints received during
Performance evaluation criteria for independent
the year under review:
directors:

FINANCIAL STATEMENTS
Number of pending complaints as on Nil
The performance evaluation of Independent Directors shall
April 01, 2018
be done by the Board of Directors, excluding the Director
Number of complaints received 4
being evaluated. While making assessment, Board will
Number of complaints redressed 4
consider the active participation and the guidance and
Number of pending complaints as on Nil
direction given in the subject matter of the Agenda on the
March 31, 2019
basis of his experience and expert knowledge.
None of the complaints and share transfers are pending for
Credit rating
a period exceeding one month where all the documents
required under the statutory regulations are submitted Company is not required to obtain credit rating as during the
STATUTORY REPORTS

with the Company. year review as no debt instruments issued by the Company
or there is no fixed deposit program or any scheme or
Name and designation of Compliance Officer: Mr. Parag
proposal involving mobilization of funds whether in India
Dave – Company Secretary
or abroad.
E-mail ID of Compliance Officer: [email protected]
No preferential allotment or qualified institutions
placement
III. Other disclosures
During the year no preferential allotment or qualified
Statutory Disclosures: institutions placement made by the Company.
COMPANY OVERVIEW

There were no materially significant related party Total Fees paid to Auditors:
transactions that may have potential conflict with the
interests of Company at large. Policy on dealing with Company has paid total fees of H 5.1 Million during the
Related Party Transactions has been disclosed on year to Statutory Auditors and total fees of H 0.5 Million
Company’s website and a weblink is as under: to entities in the network firm/network entity of which the
statutory auditor is a part.
https://www.hitachiaircon.in/cms/materials/f94328b002.pdf
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Disclosure in relation to Sexual harassment of women 4. To Re-appoint Mr. Anil Shah as CFO and Executive
at Workplace (Prevention, Prohibition and Redressal) Director of the Company for a period of 3 years w.e.f.
Act, 2013: June 01, 2016.

Number of complaints received during the year: 1 5. To increase remuneration of Mr. Vinay Chauhan as
an Executive Director of the Company from Financial
Number of complaints disposed of during the financial year: 1
Year 2015-16.
Number of complaints pending as on March 31, 2019: 1.
6. To Re-appoint Mr. Vinay Chauhan as an Executive
Whistle Blower Policy: Director of the Company for a period of 3 years w.e.f.
May 15, 2016.
The Whistle Blower policy has been put on the website of
the Company and we affirm that: 7. To increase remuneration of Mr. Gurmeet Singh as
an Executive Director of the Company from Financial
The Company has an adequate Whistle Blower mechanism Year 2015-16.
and that no personnel was denied access to the audit
Committee. 8. To approve Change of Name of the Company.

All mandatory requirements have been complied with by 9. To maintain the Register of Member at Ahmedabad
the Company during the year. office of M/s Link Intime India Pvt. Limited, Registrar
and Transfer Agent.
Others:
10. To substitute all Articles of ‘Articles of Association’.
a. There are no non-compliance of requirement under
sub para (2) to (10) of Schedule V(C) of SEBI (Listing Date and Time: August 08, 2017, 9.30 a.m.
Obligations and Disclosure Requirements) Regulations,
2015. Venue: H T Parekh Convention Center, Ahmedabad
Management Association, ATIRA Campus,
b. There are no shares in demat suspense account Dr. Vikram Sarabhai Marg, Vastrapur Road,
40 / unclaimed suspense account, accordingly no Ahmedabad – 380015
disclosure is required under Schedule V(F) of SEBI
(Listing Obligations and Disclosure Requirements) Special resolutions passed:
Regulations, 2015.
1. Re-appointment of Ms. Indira Parikh as an Independent
c. Company has not adopted non-mandatory Director of the Company.
requirements as prescribed under Schedule II(E) of
SEBI (Listing Obligations and Disclosure Requirements) 2. To appoint Mr. Gurmeet Singh as a Managing Director
Regulations, 2015. of the Company.

Information relating to last three Annual General 3. To maintain Register of members at Office of Registrar
Meetings and Share Transfer Agent – Link Intime India Pvt. Ltd.

Date and Time: July 25, 2016, 9.30 a.m. Date and Time: July 27,2018, 9.30 a.m

Venue: J B Auditorium, Ahmedabad Management Association, Venue: Center for Environment Education, Nehru
ATIRA Campus, Foundation for Development, Vastrapur-
Gurudwara Road, Ahmedabad: 380054
Dr. Vikram Sarabhai Marg, Vastrapur Road,
Ahmedabad – 380015 Special resolutions passed:

Special resolutions passed: 1. To approve continuation of appointment of Ms. Indira

Parikh as an Independent Director of the Company.
1. To appoint Mr. Atsushi Ohtsuka as Managing Director
for a period of 3 years w.e.f. September 01, 2015. No special resolution has been passed through postal
ballot in last financial year.
2. To appoint Mr. Varghese Joseph as an Executive
Director of Company for the period of 3 years w.e.f. Means of communication
August 01, 2015.
The quarterly results are published in Business Standard
3. To increase remuneration of Mr. Anil Shah as CFO and (English) and Jaihind (Gujarati) and the same are
Executive Director of the Company from the Financial also displayed on the website of the Company www.
Year 2015-16. hitachiaircon.in. The information is being made available
to the Stock Exchanges to upload the same on their
websites.
The official news releases are displayed on the website of Book closure: From August 10, 2019 to August 14, 2019
the Company. (Both days inclusive)

No presentations are made to institutional investors or to Dividend Payment Date: Dividend, if declared, will be paid
the analysts. on or after August 28, 2019.

General Shareholder Information Listing on Stock Exchanges where the shares of the
Company are listed
Ensuing Annual General Meeting
Stock Stock Exchange
Day and Date Time Venue Code
Wednesday 9.30 a.m. Center for Environment 523398 BSE Limited, Floor 25, Phiroze Jeejeebhoy
August 14, Education, Nehru Foundation Towers, Dalal Street, Mumbai - 400 001.
2019, for Development, JCHAC National Stock Exchange of India Limited,
Vastrapur-Gurudwara Road, Exchange Plaza, Bandra-Kurla Complex,
Ahmedabad: 380054 Bandra (East), Mumbai - 400 051
Financial year: From April 01, 2018 to March 31, 2019 The Company has paid Annual Listing Fees for the year
2019-20 to the Stock Exchanges.

Market Price Data

Highest & Lowest market prices of the shares during each month in last financial year and performance in comparison to broad
based indices such as BSE Sensex and NSE Nifty are as under:
Company’s Share SENSEX Company’s Share NIFTY
Price quoted at BSE Price quoted at NSE
High Low High Low High Low High Low
April-2018 2684 2,439 35,213 32,973 2,686 2,470 10,759 10,111
May-2018 2,750 2,455 35,994 34,303 2,758 2,465 10,929 10,418 41
June-2018 2,671 2,317 35,877 34,785 2,675 2,366 10,893 10,551
July-2018 2,420 1,859 37,645 35,107 2,440 1,932 11,366 10,605
August-2018 2,229 1,940 38,990 37,129 2,210 1,900 11,760 11,235
September-2018 2,150 1,515 38,934 35,986 2,015 1,538 11,752 10,850

FINANCIAL STATEMENTS
October- 2018 1,874 1,505 36,617 33,292 1,865 1,526 11,036 10,005
November-2018 1,882 1,695 36,389 34,303 1,945 1,653 10,922 10,342
December-2018 1,855 1,665 36,555 34,426 1,869 1,715 10,985 10,334
January-2019 1,869 1,635 36,701 35,376 1,860 1,665 10,988 10,584
February-2019 1,854 1,650 37,172 35,287 1,842 1,650 11,118 10,586
March-2019 2,099 1,701 38,749 35,927 2,106 1,690 11,630 10,817
The Equity Shares of the Company are not delisted or suspended during the year ended March 31, 2019.

Registrars and Share Transfer Agent Shareholding Pattern as on March 31, 2019
STATUTORY REPORTS

Link Intime India Pvt. Ltd. Category No. of % of

506-508 Amarnath Business Center-1 (ABC-1), Shares Held Shareholding
Beside Gala Business Centre, Promoters’ Holding 20,190,529 74.25
Nr. St. Xavier’s College Corner, Non-Promoters’ Holding
Off C.G. Road, Mutual Funds 2,940,740 10.82
Ahmedabad-380006 Foreign Portfolio Investors 380,709 1.40
Financial Institutions/ 2,490 0.01
Share Transfer System
Banks
Since the Company’s shares are compulsorily traded in the Insurance Companies 1,013,710 3.73
COMPANY OVERVIEW

demat segment on Stock Exchanges, bulk of the transfers Central Government (IEPF)
take place in the electronic form. For expediting transfers Bodies Corporate 242,131 0.89
of physical shares, the authority has been delegated to NRIs 60,237 0.22
the Registrars and Share Transfer Agent to complete share Individuals 2,360,338 8.68
transfer formalities at least once in a fortnight. Total 27,190,884 100.00
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Distribution of shareholding as on March 31, 2019

Shares Balance No. of Holders % of Holders No. of Shares % of Shares

1-500 14,427 95.91 1,145,180 4.21
501-1000 345 2.29 260,016 0.96
1001-2000 121 0.80 176,952 0.65
2001-3000 35 0.23 90,764 0.33
3001-4000 21 0.14 73,699 0.27
4001-5000 12 0.08 55,311 0.21
5001-10000 32 0.22 247,848 0.91
10001 and above 49 0.33 25,141,114 92.46
Total 15,042 100.00 27,190,884 100.00

Dematerialization of shares and liquidity Registrars and Share Transfer Agent:

The Company’s shares are available for dematerialisation Link Intime India Pvt. Ltd
on both the depositories viz. National Securities Depository 506-508 Amarnath Business Center-1 (ABC-1),
Ltd. (NSDL) and Central Depository Services (India) Ltd. Beside Gala Business Centre, Nr. St. Xavier’s College
(CDSL). As on March 31, 2019, 26,873,358 (98.83%) shares Corner, Off C.G Road, Ahmedabad-380006.
of the Company were in Dematerialised form. Demat ISIN Ph.: 079-26465186 E-mail: [email protected]
No. of the Equity Shares of the Company: INE782A01015.
Declaration under Code of Conduct
Outstanding Financial Instruments which have an
impact on Equity To the Shareholders of Johnson Controls-Hitachi Air
Conditioning India Limited
The Company has not issued any GDRs/ADRs/warrants as
on date. On the basis of the affirmation letters received from Board
Members and Senior Management Personnel, I declare
42
Plant Location that, they have complied with all the provisions of Code
of Conduct laid down by the Board of Directors of the
Hitachi Complex, Village: Karannagar – 382727 Ta.: Kadi, Company.
Dist.: Mehsana, Gujarat

Addresses for Correspondence

Company: For Johnson Controls-Hitachi Air Conditioning India Limited

Johnson Controls-Hitachi Air Conditioning India Limited.

(Formerly Known as Hitachi Home & Life Solutions (India)
Limited) Sd/-
9th Floor, Abhijeet, Mithakhali Six Roads, Gurmeet Singh
Ahmedabad: 380 006 Chairman and Managing Director
Ph.: 079-26402024
 Auditors’ Certificate regarding compliance of conditions of Corporate Governance

To the Members of Johnson Controls-Hitachi Air Conditioning India Limited

We have examined the compliance of conditions of Corporate Governance by Johnson Controls-Hitachi Air Conditioning India
Limited, for the year ended March 31, 2019 as stipulated in Regulations [17, 18, 19, 20, 21, 22, 23, 24, 24A, 25, 26, 27 and clauses
(b) to (i) of sub-regulation (2) of regulation 46 and para C, D and E of Schedule V of the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) (collectively referred to as “SEBI Listing
Regulations, 2015”).

The compliance of conditions of Corporate Governance is the responsibility of the Company’s management. Our examination
was carried out in accordance with the Guidance Note on Certification of Corporate Governance, issued by the Institute of
Chartered Accountants of India and was limited to procedures and implementation thereof, adopted by the Company for ensuring
the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial
statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has
complied with the conditions of Corporate Governance as stipulated in the SEBI Listing Regulations, 2015.

We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness
with which the management has conducted the affairs of the Company.

For Price Waterhouse & Co. Chartered Accountants LLP

Firm Registration Number: 304026E/E-300009 43
Chartered Accountants

FINANCIAL STATEMENTS
UDIN: 19107038AAAAAE3345 Sachin Parekh
Place: Ahmedabad Partner
Date: May 16, 2019 Membership Number: 107038

STATUTORY REPORTS
COMPANY OVERVIEW
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Business Responsibility Report

SECTION A: General Information About The Company
1. Corporate Identity Number (CIN) of the Company L29300GJ1984PLC007470
2. Name of the Company Johnson Controls-Hitachi Air Conditioning India Limited
(Formerly known as Hitachi Home & Life Solutions (India)
Limited)
3. Registered address 9th Floor, Abhijeet, Mithakhali Six Roads, Ahmedabad: 380006
4. Website https://www.hitachiaircon.in/
5. E-mail id [email protected]
6. Financial Year reported April 01, 2018 to March 31, 2019
7. Sector(s) that the Company is engaged in (industrial Division 28: Manufacturing of Air conditioners
activity code-wise)
8. List three key products/services that the Company Manufacturing of Air conditioners
manufactures/provides (as in balance sheet)
9. Total number of locations where business activity is None
undertaken by the Company
a. Number of International Locations 5 Regional Offices, 20 Branch Offices,
(Provide details of major 5) 4 Engineering Excellence Centre, 4 Regional Service Offices and
b. Number of National Locations 6 Service Centres
10. Markets served by the Company – Local/State/National/ Pan India
International

44 SECTION B: Financial Details of The Company

1. Paid up Capital (H) 271.9 Million
2. Total Turnover (H) 22413 Million
3. Total profit after taxes (H) 859 Million
4. Total Spending on Corporate Social Responsibility (CSR) as percentage of profit after tax (%) of 2.69%
current year
5. List of activities in which expenditure in 4 above has been incurred 4

SECTION C: Other Details

1. Does the Company have any Subsidiary Company/ Companies? No
2. Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If No
yes, then indicate the number of such subsidiary company(s)
3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, No
participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/
entities? [Less than 30%, 30-60%, More than 60%]

SECTION D: BR Information
1. Details of Director/Directors responsible for BR
a. Details of the Director responsible for implementation
of the BR policies
1. DIN 06938403
2. Name Mr. Gurmeet Singh
3. Designation Managing Director
b. Details of the BR head
1. DIN Number (if applicable) Not applicable
2. Name Mr. Sanjay Kumar
3. Designation Vice President – Human Resources
4. Telephone No. +91-2764-277571
5. Email Id [email protected]
2. (a) Principle-wise (as per NVGs) BR Policy/policies (Reply in Y/N)

No. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
1 Do you have a policy/ policies for.... Y Y Y Y Y Y Y Y Y
2 Has the policy been formulated in consultation with the All policies have been formulated in consultation with the
relevant stakeholders? stakeholders of the Company.
3 Does the policy conform to any national / international Policies are in line with International standards and practices
standards? If yes, specify? such as ISO 9000, ISO 14000,
OHSAS 18000 guidelines.
4 Has the policy being approved by the Board? All policies have been approved by Board.
Is yes, has it been signed by MD/ owner/ CEO/ Policies are signed by Managing Director / Owner of the
appropriate Board Director? policy.
5 Does the company have a specified committee of the Process owners are responsible for implementation of
Board/ Director/ Official to oversee the implementation policies.
of the policy?
6 Indicate the link for the policy to be viewed online? Policies are available on website of the Company. Links are
as under:
1. www.hitachiaircon.in/cms/materials/387ddc9fc6.pdf
2. www.hitachiaircon.in/cms/materials/3aa857e9d6.pdf
3. www.hitachiaircon.in/cms/materials/14955dcfd1.pdf
4. www.hitachiaircon.in/cms/materials/0b23554d12.pdf
7 Has the policy been formally communicated to all Yes
relevant internal and external stakeholders?
8 Does the company have in-house structure to implement Yes
the policy / policies?
9 Does the Company have a grievance redressal Yes
mechanism related to the policy/ policies to address 45
stakeholders’ grievances related to the policy/ policies?
10 Has the company carried out independent audit/ Yes
evaluation of the working of this policy by an internal
or external agency?

FINANCIAL STATEMENTS
2 (b) If answer to the question at Serial Number 1 against any principle, is ‘No’, please explain why:

- Not applicable

3. Governance related to BR
a. Indicate the frequency with which the Board of Directors, Annual
Committee of the Board or CEO to assess the BR
performance of the Company. Within 3 months, 3-6
STATUTORY REPORTS

months, Annually, More than 1 year

b. Does the Company publish a BR or a Sustainability BR report will be part of Annual Report of the Company and will
Report? What is the hyperlink for viewing this report? be placed on the website of the Company
How frequently it is published?
COMPANY OVERVIEW
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

SECTION E: Principle-Wise Performance transactional matters and all three complaints have been
resolved satisfactorily.
Principle 1
3. For each such product, provide the following details in
1. Does the policy relating to ethics, bribery and corruption respect of resource use (energy, water, raw material etc.):
cover only the company? Yes/ No. Does it extend to the
Group/Joint Ventures/ Suppliers/Contractors/NGOs / a) Reduction during sourcing/production/ distribution
Others? achieved since the previous year throughout the
value chain?
Integrity is at the centre of everything we do at Johnson
Controls. The Company’s ongoing success stems from • Company is committed and focused towards
deeply engrained culture of ethics and integrity which reduction of energy, water and other utilities
strengthens relationships with customers, employees, consumption by utilizing optimum resources as
suppliers and communities. per the prescribed norms by regulatory authorities
/ bodies.
Ethics policy applies to everyone at Johnson Controls
including the Board of Directors, employees, contract • We carried out geo hydrological study at our
workers and everyone who deals with the Company. site as a part of CGWA guidelines and as per
the outcome of the study we have constructed
The Company is committed to transparency and best 6 nos. of recharge wells in company premises
practices are also extended to suppliers through the Code for recharge of ground water during monsoon
of Conduct for suppliers. This code warrants compliance season.
with laws prohibiting child labour, taking responsibility for
the health and safety of their employees, and ensuring • We have installed and commissioned Effluent
that suppliers act in accordance with applicable statutory Treatment Plant having capacity of 100 KLD with
and international standards regarding environmental provision of Primary Secondary and Tertiary
protection. Similarly, all channel partners are covered treatment facilities to improve quality of treated
through Code of Conduct for Channel Partners. water.
46
2. How many stakeholder complaints have been received • We have installed and commissioned Sewage
in the past financial year and what percentage was Treatment Plant having capacity of 250 KLD with
satisfactorily resolved by the management? provision of MBBR technology to improve quality
of treated water.
Integrated complaint mechanism is available to all
Stakeholders under Johnson Controls Ethics Policy. Such • For pre-treatment process in our paint shop
complaints are handled globally by Johnson Controls. At we have started using sludge free chemical for
local level, such type of complaints are handled by HR reduction of hazardous waste. Hence, we have
Department of the Company. reduced the requirement of landfilling of sludge
generated.
Principle 2
b) Reduction during usage by consumers (energy,
1. List up to 3 of your products or services whose design water) has been achieved since the previous year?
has incorporated social or environmental concerns, risks
and/or opportunities. • Government of India (Bureau of Energy Efficiency,
Ministry of Power) introduced the Standards
a. Room Air Conditioners. and Labelling Program in May 2006. Under this
b. Packaged Air Conditioners. program the manufacturers are required to
c. VRF and Chillers. disclose a label showing how much electricity the
appliance will consume during operations. Energy
2. How many stakeholder complaints have been received Efficiency is indicated by Number of ‘Stars’. More
in the past financial year and what percentage was Stars indicates more energy efficient appliance.
satisfactorily resolved by the management? Company’s products are available in the range of
2 Star to 5 Star. Company focuses on promoting
Integrated complaint mechanism is available to all and developing energy efficient products. During
Stakeholders under Johnson Controls Ethics Policy. Such previous year more than 50% of Company’s
complaints are handled globally by Johnson Controls. At models were 4 star and 5 star rated models.
local level, such type of complaints are handled by HR
Department of the Company. • We have replaced conventional lights with
LED lights at manufacturing facility to reduce
During the financial year 2018-19, two complaints electricity consumption.
were received from employees regarding disciplinary
 • We are utilizing treated water from Waste Water • Company has developed many local producers
Treatment Plant in gardening inside company within 50 kms radius of the company. Having mutual
premised to avoid fresh water consumption for beneficial relationship with the Company these
green belt development inside company premises. associated local producers have also grown and
established themselves fruitfully and has increased
• We have started using RO Plant reject water in the ratio of local employment.
washroom flush to reduce the requirement of
fresh water consumption. 6. Does the company have a mechanism to recycle products
and waste? If yes what is the percentage of recycling of
4. Does the company have procedures in place for products and waste.
sustainable sourcing (including transportation)?
• The company is committed to increase waste
(a) If yes, what percentage of your inputs was sourced efficiency through the ISO 14001 certification. Waste
sustainably? is segregated into hazardous and non-hazardous
waste and managed through a waste management
• Sustainability agenda is extended to suppliers
system.
through the Supplier Code to which all suppliers
have been made aware. It lays down the • Hazardous waste is sent to GPCB authorized
requirements on various aspects of sustainability hazardous waste processors recyclers or to GPCB /
such as legal compliance, bribery and corruption, CPCB Authorized TSDF (transportation, storage and
human rights, health and safety and environment disposal facilities) for disposal.
protection. The Company sources its materials
through suppliers and vendors who are compliant • E-waste is sent to GPCB registered and authorized
with applicable regulatory requirements. E-waste recyclers.

• Supplier selection, assessment and evaluation process • Plastic waste is sent to GPCB registered and authorized
includes elements of sustainability. This includes self- recycler.
assessments by suppliers, risk assessments by the
Company and external audits by third party. • Industrial Effluent and Sewage is treated in the 47
effluent treatment plant and sewage treatment plant
5. Has the company taken any steps to procure goods for treatment of waste water and treated water from
and services from local & small producers, including ETP and STP is recycled in washroom flushes and
communities surrounding their place of work? maintaining a green belt.

FINANCIAL STATEMENTS
• Material from third party suppliers is sourced locally • The Company complies with the requirements of
from within the boundary of India. Out of this some are RoHS & Waste Management Rules.
sourced from local and small producers. Several local
and small producers are attached to the Company.

Principle 3

1. Please indicate the Total number of employees: 4265

2. Please indicate the Total number of employees hired on temporary/contractual/casual basis. 2717
3. Please indicate the Number of permanent women employees. 54
STATUTORY REPORTS

4. Please indicate the Number of permanent employees with disabilities 3

5. Do you have an employee association that is recognized by management? Yes
6. What percentage of your permanent employees is members of this recognized employee association? 43%
7. Please indicate the Number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment in
the last financial year and pending, as on the end of the financial year.
No. Category No of complaints filed during the No of complaints pending as on
financial year end of the financial year
a. Child labour/forced labour/involuntary labour Nil Nil
b. Sexual harassment 1 1
COMPANY OVERVIEW

c. Discriminatory employment Nil Nil

8. What percentage of your under mentioned employees were given safety & skill up-gradation training in the last year?
No. Skill upgradation Safety
a. Permanent Employees 73% 60%
b. Permanent Women Employees 73% 28%
c. Casual/Temporary/Contractual Employees 77% 52%
d. Employees with Disabilities 100% Nil
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Principle 4 3. Does the company identify and assess potential

environmental risks?
1. Has the company mapped its internal and external
stakeholders? Yes. Risk assessments for the environment, mitigation
strategies and contingency measures are reviewed and
Yes revised every year.
2. Out of the above, has the company identified the 4. Does the company have any project related to Clean
disadvantaged, vulnerable & marginalized stakeholders. Development Mechanism? Also, if Yes, whether any
environmental compliance report is filed?
Yes, the company has identified the marginalized
stakeholders. • The Company has not applied for any projects under
the Clean Development Mechanism. However, the
3. Are there any special initiatives taken by the company
Company has been active in reducing its waste in
to engage with the disadvantaged, vulnerable and
all its operating sites by implementing measures to
marginalized stakeholders?
minimize waste.
The company provides free of cost training in its state
• Additionally, we have also implemented organic
of the art training facilities to mechanics, repairers and
convertor, where all food and organic wastes are
technicians employed by dealers, which community, the
converted to compost and used for gardening.
company has identified as disadvantaged, vulnerable
and marginalised. Adopting a win-win approach for its • Company has upgraded its waste water treatment
business, customers, dealers such trainings not only help plant to improve the treatment and increasing the
trainees to learn skills which are helpful in their future treatment capacity.
employability and entrepreneurship but also help company
to provide quality after sales services at affordable cost. 5. Has the company undertaken any other initiatives on –
clean technology, energy efficiency, renewable energy,
Principle 5 etc.?
48 1. Does the policy of the company on human rights cover • The Company is continually developing products
only the company or extend to the Group/Joint Ventures/ leading to energy efficiency and enhancement
Suppliers/Contractors/NGOs/Others? of eco-friendly products like usage of R410A &
R32 refrigerant.
Policy is extended to the Group, Suppliers and Contractors.
6. Are the Emissions/Waste generated by the company
2. How many stakeholder complaints have been received in
within the permissible limits given by CPCB / SPCB for
the past financial year and what percent was satisfactorily
the financial year being reported?
resolved by the management?
• Yes. The emissions/waste generated by the Company
No complaint has been received in the past financial year.
for the Financial Year 2018-19 are within permissible
Principle 6 limits given by CPCB / SPCB.

1. Does the policy related to Principle 6 cover only the • Analysis of treated effluent is carried out by NABL
company or extends to the Group/Joint Ventures/ accredited and GPCB approved schedule-II laboratory.
Suppliers/Contractors/NGOs/others.
7. Number of show cause/ legal notices received from
The Environmental Policy of the Company covers all CPCB / SPCB which are pending (i.e. not resolved to
employees and contractors of the Company. satisfaction) as on end of Financial Year.

2. Does the company have strategies/ initiatives to address • As on 31 March, 2019, there is no pending show cause
global environmental issues such as climate change, or legal notice received from CPCB or SPCB.
global warming, etc.? Y/N. If yes, please give hyperlink
Principle 7
for webpage etc.
1. Is your company a member of any trade and chamber
• Yes. The Company is committed towards a sustainable
or association? If Yes, Name only those major ones that
global environment by encouraging use of R410 &
your business deals with:
R32 refrigerant which is an eco-friendly gas. Hence
preventing ozone layer depletion. Yes. Johnson Controls –Hitachi Air conditioning India Ltd is
a member of following industrial and trade bodies namely:
• Also, rain water harvesting project has been installed
to promote recharging of ground water during rainy a. CEAMA (Consumer Electronics and Appliances
season. Manufacturers Association).
 b. RAMA (Refrigeration and Air-conditioning 2. Have you advocated/lobbied through above associations
Manufacturers Association of India). for the advancement or improvement of public good?

c. Confederation of Indian Industry Yes. Company is actively involved and advocated through
the above organizations on Energy Security and industry
d. The Gujarat Chamber of Commerce and Industry. developments.

Principle 8

1. Does the company have specified programmes/initiatives/projects in pursuit of the policy related to Principle 8?
Following projects/ programmes initiated by the Company during the year:
Sr. Projects Amount (H)
No
1 PHC Karan Nagar Project - / Two specialist doctors / Medicines/ Para medic staff /Ambulance 1,186,844
Driver (2018-19)
2 Vocational Training -ITI Kadi Project (April 2018 to March 2019 - 4 batches) 460,260
3 Vocational Training- AC Repairing & Maintenance (April 2018 to March 2019 - 8 batches - 2 2,037,137
centres) - Andhra Pradesh
4 Sanitation Project 3rd 188 Toilets 4,658,640
6 Children Balwadi - Budasan Village 1,852,468
7 Construction of Karan Nagar Primary School Project (6 classrooms/ one shed/ Drinking water / 5,362,107
Toilet blocks)
8 Sponsorship to Para athletes (10 Para athletes) 4,021,234
9 Sanitation Project- 4th 100 Toilets@ Village Mokasan-50, Siyapura - 50) 2,672,700
Total 22,251,390

2. Are the programmes/projects undertaken through in- 2. Does the company display product information on the 49
house team/own foundation/external NGO/government product label, over and above what is mandated as per
structures/any other organization? local laws?

All Program are in house by the company directly. Label / packages of Company’s products are complying
with the regulations such as Legal Metrology Act, Star

FINANCIAL STATEMENTS
3. Have you done any impact assessment of your initiative? rating under Bureau of Energy Efficiency and E-Waste
(management) Rules.
Yes. We monitor each CSR initiative and we have done the
impact assessment of each program as a part of program 3. Is there any case filed by any stakeholder against the
process. company regarding unfair trade practices, irresponsible
advertising and/or anti-competitive behaviour during the
4. What is your company’s direct contribution to community last five years and pending as at end of financial year?
development projects- Amount in H and the details of the
No case is filed by any stakeholder against the Company
projects undertaken?
regarding unfair trade practices, irresponsible advertising
Please see point no. 1 above. and/or anti-competitive behaviour during the last five years.
STATUTORY REPORTS

5. Have you taken steps to ensure that this community 4. Did your company carry out any consumer survey/
development initiative is successfully adopted by the consumer satisfaction trends?
community? As a process of taking consumer feedbacks, we carry out
regular happy calling surveys of our customers. Currently
We have taken the feedback of the community and the
the happy calling score indicates that approx 90% of our
users regarding the services that we have provided. We
customers are satisfied with our product and services.
also conducted the survey to evaluate the use and impact
of the services provided by JCH-IN to the community. 5. Does the company have a mechanism to recycle products
and waste?
Principle 9
COMPANY OVERVIEW

Company does not have a mechanism to recycle products

1. What percentage of customer complaints/consumer and waste. However Company complies with E-Waste
cases are pending as on the end of financial year. (Management) Rules according to which all e-waste
generated during manufacturing process and after sales
During the year 2018-19, 1.02% complaints are pending
service process as well as ‘End of life’ e-waste received
at the end of financial year. Out of these 0.6% complaints from customers are sent to Authorised recyclers for
received during last five days of the financial year. environment friendly disposal.
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Independent Auditor’s Report

To the Members of Johnson Controls-Hitachi Air
Conditioning India Limited

Report on the audit of the financial statements

Opinion

1. We have audited the accompanying financial statements responsibilities under those Standards are further described
of Johnson Controls-Hitachi Air Conditioning India Limited in the Auditor’s Responsibilities for the Audit of the Financial
(“the Company”), which comprise the Balance Sheet as at Statements section of our report. We are independent of
March 31, 2019, and the Statement of Profit and Loss (including the Company in accordance with the Code of Ethics issued
Other Comprehensive Income), Statement of Changes in Equity by the Institute of Chartered Accountants of India together
and Statement of Cash Flows for the year then ended, and notes with the ethical requirements that are relevant to our audit of
to the financial statements, including a summary of significant the financial statements under the provisions of the Act and
accounting policies and other explanatory information. the Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and
2. In our opinion and to the best of our information and according to the Code of Ethics. We believe that the audit evidence we
the explanations given to us, the aforesaid financial statements have obtained is sufficient and appropriate to provide a basis
give the information required by the Companies Act, 2013 for our opinion.
(“the Act") in the manner so required and give a true and fair
view in conformity with the accounting principles generally Key audit matters
accepted in India, of the state of affairs of the Company as at
March 31, 2019, and total comprehensive income (comprising 4. Key audit matters are those matters that, in our professional
of profit and other comprehensive income), changes in equity judgment, were of most significance in our audit of the
50 financial statements of the current period. These matters
and its cash flows for the year then ended.
were addressed in the context of our audit of the financial
Basis for opinion statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
3. We conducted our audit in accordance with the Standards on
Auditing (SAs) specified under section 143(10) of the Act. Our

Key audit matter How our audit addressed the key audit matter
Assessment of Provision for warranty costs and related disclosures
(Refer to Note 34 to the financial statements) We have performed the procedures including the following:
The Company provides warranty on sale of Air Conditioners and • Understood, evaluated and tested the design and operating
Refrigerators to customers and recognizes provision in respect of effectiveness of the controls over estimation of warranty
the costs expected to fulfil the warranty obligation over the period costs and related accruals.
of the warranty which ranges between 1 to 10 years.
• Understood the warranty terms offered by the Company on
In accordance with the requirements of Ind AS 37 – Provisions, sale of products.
Contingent Liabilities and Contingent Assets, the provision towards
warranty obligation is estimated by the Company, primarily • Assessed management’s estimation process by performing a
considering factors such as historical trend, average historical look-back analysis for warranty costs accruals made in prior
failure rate, estimation of expected pattern of future claims and year.
estimated replacement cost. In the case of recently launched
• Evaluated the method used by management in making the
products, management’s internal technical experts are involved
accounting estimate by verifying various input factors such
in the estimation of the failure rate during the period of warranty.
as historical trend, average historical failure rate, estimation
The estimation of warranty costs involve significant management of expected pattern of future claims and estimated
judgements and estimates as described above, and the amount replacement cost, and by carrying out discussions with
and disclosures are significant to the financial statements. management’s internal technical experts.
Accordingly, this has been considered as key audit matter.
• Verified the computation of provision for warranty costs.

• Verified the computation for determining the present value

in the case of warranty for periods exceeding one year.
 • Verified the adequacy of the disclosures in the financial
statements.

Based on the above audit procedures performed, we did not

find any material exceptions with regard to the management
assessment of provision for warranty costs and the related
disclosures thereof.

Other Information changes in equity and cash flows of the Company in

accordance with the accounting principles generally accepted
5. The Company’s Board of Directors is responsible for the other in India, including the Accounting Standards specified under
information. The other information comprises the Directors’ section 133 of the Act This responsibility also includes
Report and Management Discussion & Analysis, Report on maintenance of adequate accounting records in accordance
Corporate Governance and Business Responsibility Report with the provisions of the Act for safeguarding of the assets
(but does not include the financial statements and our of the Company and for preventing and detecting frauds and
auditor’s report thereon), which we obtained prior to the date other irregularities; selection and application of appropriate
of this auditor’s report and the Message from Chairman and accounting policies; making judgments and estimates that
Managing Director to the stakeholders and Overview of the are reasonable and prudent; and design, implementation
Company and Corporate Social Responsibility report, which is and maintenance of adequate internal financial controls,
expected to be made available to us after that date. that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant to
Our opinion on the financial statements does not cover the
the preparation and presentation of the financial statements
other information and we do not and will not express any form
that give a true and fair view and are free from material
of assurance conclusion thereon. 51
misstatement, whether due to fraud or error.
In connection with our audit of the financial statements, our
7. In preparing the financial statements, management is
responsibility is to read the other information identified above
responsible for assessing the Company’s ability to continue as
and, in doing so, consider whether the other information is
a going concern, disclosing, as applicable, matters related to
materially inconsistent with the financial statements or our
going concern and using the going concern basis of accounting
knowledge obtained in the audit, or otherwise appears to be

FINANCIAL STATEMENTS
unless management either intends to liquidate the Company
materially misstated.
or to cease operations, or has no realistic alternative but
If, based on the work we have performed on the other to do so. Those Board of Directors are also responsible for
information that we obtained prior to the date of this auditor’s overseeing the Company’s financial reporting process.
report, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We Auditor’s responsibilities for the audit of the financial
have nothing to report in this regard. statements
When we read the Message from Chairman and Managing 8. Our objectives are to obtain reasonable assurance about
STATUTORY REPORTS

Director to the stakeholders and Overview of the Company whether the financial statements as a whole are free from
and Corporate Social Responsibility report, if we conclude material misstatement, whether due to fraud or error, and to
that there is a material misstatement therein, we are required issue an auditor’s report that includes our opinion. Reasonable
to communicate the matter to those charged with governance assurance is a high level of assurance, but is not a guarantee
and take appropriate action as applicable under the relevant that an audit conducted in accordance with SAs will always
laws and regulations. detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
Responsibilities of management and those charged individually or in the aggregate, they could reasonably be
with governance for the financial statements expected to influence the economic decisions of users taken
on the basis of these financial statements.
COMPANY OVERVIEW

6. The Company’s Board of Directors is responsible for the

matters stated in section 134(5) of the Act with respect to 9. As part of an audit in accordance with SAs, we exercise
the preparation of these financial statements that give a true professional judgment and maintain professional scepticism
and fair view of the financial position, financial performance, throughout the audit. We also:
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

• Identify and assess the risks of material misstatement of reasonably be thought to bear on our independence, and
the financial statements, whether due to fraud or error, where applicable, related safeguards.
design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and 12. From the matters communicated with those charged with
appropriate to provide a basis for our opinion. The risk governance, we determine those matters that were of most
of not detecting a material misstatement resulting from significance in the audit of the financial statements of the
fraud is higher than for one resulting from error, as fraud current period and are therefore the key audit matters. We
may involve collusion, forgery, intentional omissions, describe these matters in our auditor’s report unless law or
misrepresentations, or the override of internal control. regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a
• Obtain an understanding of internal control relevant to matter should not be communicated in our report because
the audit in order to design audit procedures that are the adverse consequences of doing so would reasonably be
appropriate in the circumstances. Under Section 143(3) expected to outweigh the public interest benefits of such
(i) of the Act, we are also responsible for expressing our communication.
opinion on whether the Company has adequate internal
financial controls with reference to financial statements
Report on other legal and regulatory requirements
in place and the operating effectiveness of such controls.
13. As required by the Companies (Auditor’s Report) Order, 2016
• Evaluate the appropriateness of accounting policies used
(“the Order”), issued by the Central Government of India in
and the reasonableness of accounting estimates and
terms of sub-section (11) of section 143 of the Act, we give
related disclosures made by management.
in the Annexure B a statement on the matters specified in
• Conclude on the appropriateness of management’s use paragraphs 3 and 4 of the Order, to the extent applicable.
of the going concern basis of accounting and, based
14. As required by Section 143(3) of the Act, we report that:
52 on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that (a) We have sought and obtained all the information and
may cast significant doubt on the Company’s ability explanations which to the best of our knowledge and
to continue as a going concern. If we conclude that a belief were necessary for the purposes of our audit.
material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures (b) In our opinion, proper books of account as required by
in the financial statements or, if such disclosures are law have been kept by the Company so far as it appears
inadequate, to modify our opinion. Our conclusions are from our examination of those books.
based on the audit evidence obtained up to the date of
(c) The Balance Sheet, the Statement of Profit and Loss
our auditor’s report. However, future events or conditions
(including other comprehensive income), the Statement
may cause the Company to cease to continue as a going
of Changes in Equity and Cash Flow Statement dealt
concern.
with by this Report are in agreement with the books of
• Evaluate the overall presentation, structure and content account.
of the financial statements, including the disclosures, and
(d) In our opinion, the aforesaid financial statements comply
whether the financial statements represent the underlying
with the Accounting Standards specified under Section
transactions and events in a manner that achieves fair
133 of the Act.
presentation.
(e) On the basis of the written representations received from
10. We communicate with those charged with governance
the directors as on March 31, 2019 taken on record by the
regarding, among other matters, the planned scope and
Board of Directors, none of the directors is disqualified as
timing of the audit and significant audit findings, including
on March 31, 2019 from being appointed as a director in
any significant deficiencies in internal control that we identify
terms of Section 164 (2) of the Act.
during our audit.
(f) With respect to the adequacy of the internal financial
11. We also provide those charged with governance with a
controls with reference to financial statements of the
statement that we have complied with relevant ethical
Company and the operating effectiveness of such
requirements regarding independence, and to communicate
controls, refer to our separate Report in “Annexure A”.
with them all relationships and other matters that may
 (g) With respect to the other matters to be included in ii. The Company has long-term contracts as at March 31,
the Auditor’s Report in accordance with Rule 11 of the 2019 for which there were no material foreseeable
Companies (Audit and Auditors) Rules, 2014, in our losses. The Company did not have any long-term
opinion and to the best of our information and according derivative contracts as at March 31, 2019.
to the explanations given to us:
iii. There has been no delay in transferring amounts,
i. The Company has disclosed the impact of pending required to be transferred, to the Investor Education
litigations on its financial position in its financial and Protection Fund by the Company.
statements – Refer Note 32(a) to the financial
statements. iv. The reporting on disclosures relating to Specified
Bank Notes is not applicable to the Company for the
year ended March 31, 2019.

For Price Waterhouse & Co. Chartered Accountants LLP

Firm Registration Number: 304026E/E-300009
Chartered Accountants

Sachin Parekh
Place: Ahmedabad Partner
Date: May 16, 2019 Membership Number: 107038

53

FINANCIAL STATEMENTS
STATUTORY REPORTS
COMPANY OVERVIEW
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Annexure A to Independent Auditors’ Report

Referred to in paragraph 14(f) of the Independent Auditors’ Report 4. Our audit involves performing procedures to obtain audit
of even date to the members of Johnson Controls-Hitachi Air evidence about the adequacy of the internal financial controls
Conditioning India Limited on the financial statements for the year with reference to financial statements and their operating
ended March 31, 2019 effectiveness. Our audit of internal financial controls with
reference to financial statements included obtaining an
understanding of internal financial controls with reference
Report on the Internal Financial Controls with
to financial statements, assessing the risk that a material
reference to financial statements under Clause (i) of
weakness exists, and testing and evaluating the design
Sub-section 3 of Section 143 of the Act
and operating effectiveness of internal control based on
1. We have audited the internal financial controls with the assessed risk. The procedures selected depend on the
reference to financial statements of Johnson Controls- auditor’s judgement, including the assessment of the risks of
Hitachi Air Conditioning India Limited (“the Company”) as of material misstatement of the financial statements, whether
March 31, 2019 in conjunction with our audit of the financial due to fraud or error.
statements of the Company for the year ended on that date.
5. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit
Management’s Responsibility for Internal Financial opinion on the Company’s internal financial controls with
Controls reference to financial statements.

2. The Company’s management is responsible for establishing

and maintaining internal financial controls based on the Meaning of Internal Financial Controls with reference
internal control over financial reporting criteria established to financial statements
by the Company considering the essential components of
6. A company's internal financial controls with reference to
internal control stated in the Guidance Note on Audit of
54 financial statements is a process designed to provide
Internal Financial Controls Over Financial Reporting issued
reasonable assurance regarding the reliability of financial
by the Institute of Chartered Accountants of India (ICAI).
reporting and the preparation of financial statements for
These responsibilities include the design, implementation and
external purposes in accordance with generally accepted
maintenance of adequate internal financial controls that were
accounting principles. A company's internal financial controls
operating effectively for ensuring the orderly and efficient
with reference to financial statements includes those policies
conduct of its business, including adherence to company’s
and procedures that (1) pertain to the maintenance of records
policies, the safeguarding of its assets, the prevention and
that, in reasonable detail, accurately and fairly reflect the
detection of frauds and errors, the accuracy and completeness
transactions and dispositions of the assets of the company; (2)
of the accounting records, and the timely preparation of
provide reasonable assurance that transactions are recorded
reliable financial information, as required under the Act.
as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles,
Auditors’ Responsibility and that receipts and expenditures of the company are being
made only in accordance with authorisations of management
3. Our responsibility is to express an opinion on the Company's
and directors of the company; and (3) provide reasonable
internal financial controls with reference to financial
assurance regarding prevention or timely detection of
statements based on our audit. We conducted our audit
unauthorised acquisition, use, or disposition of the company's
in accordance with the Guidance Note on Audit of Internal
assets that could have a material effect on the financial
Financial Controls Over Financial Reporting (the “Guidance
statements.
Note”) and the Standards on Auditing deemed to be
prescribed under section 143(10) of the Act to the extent
applicable to an audit of internal financial controls, both Inherent Limitations of Internal Financial Controls
applicable to an audit of internal financial controls and both with reference to financial statements
issued by the ICAI. Those Standards and the Guidance Note
7. Because of the inherent limitations of internal financial
require that we comply with ethical requirements and plan
controls with reference to financial statements, including the
and perform the audit to obtain reasonable assurance about
possibility of collusion or improper management override
whether adequate internal financial controls with reference
of controls, material misstatements due to error or fraud
to financial statements was established and maintained and
may occur and not be detected. Also, projections of any
if such controls operated effectively in all material respects.
 evaluation of the internal financial controls with reference to Opinion
financial statements to future periods are subject to the risk
that the internal financial controls with reference to financial 8. In our opinion, the Company has, in all material respects, an
statements may become inadequate because of changes in adequate internal financial controls with reference to financial
conditions, or that the degree of compliance with the policies statements and such internal financial controls with reference
or procedures may deteriorate. to financial statements were operating effectively as at
March 31, 2019, based on the internal control over financial
reporting criteria established by the Company considering
the essential components of internal control stated in the
Guidance Note on Audit of Internal Financial Controls Over
Financial Reporting issued by the Institute of Chartered
Accountants of India.

For Price Waterhouse & Co. Chartered Accountants LLP

Firm Registration Number: 304026E/E-300009
Chartered Accountants

Sachin Parekh
Place: Ahmedabad Partner
Date: May 16, 2019 Membership Number: 107038

55

FINANCIAL STATEMENTS
STATUTORY REPORTS
COMPANY OVERVIEW
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Annexure B to Independent Auditors’ Report

Referred to in paragraph 13 of the Independent Auditors’ Report v. The Company has not accepted any deposits from the public
of even date to the members of Johnson Controls-Hitachi Air within the meaning of Sections 73, 74, 75 and 76 of the Act
Conditioning India Limited on the financial statements for the year and the Rules framed there under to the extent notified.
ended March 31, 2019
vi. Pursuant to the rules made by the Central Government of India,
i. (a) The Company is maintaining proper records showing full the Company is required to maintain cost records as specified
particulars, including quantitative details and situation, of under Section 148(1) of the Act in respect of its products.
fixed assets. We have broadly reviewed the same, and are of the opinion
that, prima facie, the prescribed accounts and records have
(b) The fixed assets of the Company have been physically been made and maintained. We have not, however, made a
verified by the Management during the year and no material detailed examination of the records with a view to determine
discrepancies have been noticed on such verification. In whether they are accurate or complete.
our opinion, the frequency of verification is reasonable.
vii. (a) According to the information and explanations given to
(c) The title deeds of immovable properties, as disclosed us and the records of the Company examined by us, in
in Note 3 – Property, Plant and Equipment and Note 5- our opinion, the Company is regular in depositing the
Investment Property to the financial statements, are held undisputed statutory dues, including provident fund,
in the name or erstwhile name of the Company. employees’ state insurance, income tax, sales tax, service
tax, duty of customs, duty of excise, value added tax,
ii. The physical verification of inventory have been conducted at
cess, goods and service tax and other material statutory
reasonable intervals by the Management during the year. The
dues, as applicable, with the appropriate authorities. Also
discrepancies noticed on physical verification of inventory as
refer note 32(a)(3) to the financial statements regarding
compared to book records were not material.
management's assessment on certain matters relating to
iii. The Company has not granted any loans, secured or unsecured, provident fund.
56
to companies, firms, Limited Liability Partnerships or other
(b) According to the information and explanations given to
parties covered in the register maintained under Section 189 of
us and the records of the Company examined by us, there
the Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b)
are no dues of duty of customs which have not been
and (iii)(c) of the said Order are not applicable to the Company.
deposited on account of any dispute. The particulars of
iv. In our opinion, and according to the information and dues of income tax, sales tax, service tax, duty of excise,
explanations given to us, the Company has complied with the value added tax, and goods and service tax as at March
provisions of Section 186 of the Act in respect of the loans 31, 2019 which have not been deposited on account of a
or investments made, or guarantees or security provided dispute, are as follows:
by it. The Company has not granted any loans or provided
any guarantees or security to the parties covered under
Section 185 of the Act.

Name of the statute Nature of dues Amount* Period to Forum where the
(H in million) which the dispute is pending
amount relates
The Central Excise Act, 1944 Excise duty including 9.7 2012-13 The Custom, Excise and
Interest and Penalty as Service Tax Appellate
applicable Tribunal
0.9 2008-09 and Commissioner (Appeals)
2010-11
The Finance Act, 1994 (Service Service tax including 153.2 2004-05 to The Custom, Excise and
Tax) Interest and Penalty as 2013-14 Service Tax Appellate
applicable Tribunal
36.8 July 2012 to Commissioner (Appeals)
March 2016
Sales Tax Acts (Central & States) Sales tax/value 2.9 2002-03 to Hon'ble Supreme Court
added tax including 2003-04 of India
Interest and Penalty as 7.2 2000-01 to Appellate Tribunal
applicable 2007-08
105.1 2005-06 to Upto Commissioner
2017-18 (Appeals)
 Name of the statute Nature of dues Amount* Period to Forum where the
(H in million) which the dispute is pending
amount relates
The Goods and Service tax Act, Goods and Service Tax 0.2 2018-19 Commissioner (Appeals)
2017 including interest and
penalty as applicable
The Income Tax Act, 1961** Income Tax including 1.3 2005-06 to High Court
Interest and Penalty as 2006-07
applicable 32.2 2006-07 to Income Tax Appellate
2014-15 Tribunal
39.6 2003-04 to Commissioner of Income
2006-07 Tax (Appeals)

*Net of deposits under protest xi. The Company has paid/ provided for managerial remuneration
in accordance with the requisite approvals mandated by the
**Represents matter decided in favour of the Company provisions of Section 197 read with Schedule V to the Act.
against which department has filed further appeals.
xii. As the Company is not a Nidhi Company and the Nidhi Rules,
viii. According to the records of the Company examined by us and 2014 are not applicable to it, the provisions of Clause 3(xii) of
the information and explanation given to us, the Company has the Order are not applicable to the Company.
not defaulted in repayment of loans or borrowings to any bank
as at the balance sheet date. The Company did not have any xiii. The Company has entered into transactions with related
outstanding loans or borrowings to any financial institution parties in compliance with the provisions of Sections 177
or Government nor has it issued any debentures as at the and 188 of the Act. The details of related party transactions 57
balance sheet date. have been disclosed in the financial statements as required
under Indian Accounting Standard (Ind AS) 24, Related Party
ix. The Company has not raised any moneys by way of initial Disclosures specified under Section 133 of the Act.
public offer, further public offer (including debt instruments)
and term loans. Accordingly, the provisions of Clause 3(ix) of xiv. The Company has not made any preferential allotment or
the Order are not applicable to the Company. private placement of shares or fully or partly convertible

FINANCIAL STATEMENTS
debentures during the year. Accordingly, the provisions of
x. During the course of our examination of the books and records Clause 3(xiv) of the Order are not applicable to the Company.
of the Company, carried out in accordance with the generally
accepted auditing practices in India, and according to the xv. The Company has not entered into any non-cash transactions
information and explanations given to us, we have neither with its directors or persons connected with him. Accordingly,
come across any instance of material fraud by the Company the provisions of Clause 3(xv) of the Order are not applicable
or on the Company by its officers or employees, noticed or to the Company.
reported during the year, nor have we been informed of any
such case by the Management. xvi. The Company is not required to be registered under Section
45-IA of the Reserve Bank of India Act, 1934. Accordingly, the
STATUTORY REPORTS

provisions of Clause 3(xvi) of the Order are not applicable to

the Company.

For Price Waterhouse & Co. Chartered Accountants LLP

Firm Registration Number: 304026E/E-300009
Chartered Accountants

Sachin Parekh
COMPANY OVERVIEW

Place: Ahmedabad Partner

Date: May 16, 2019 Membership Number: 107038
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Balance Sheet
as at March 31, 2019

J in million
Note As at As at
No. March 31, 2019 March 31, 2018
A ASSETS
I Non-Current Assets
(a) Property, Plant and Equipment 3 2,156.6 2,221.8
(b) Capital work-in-progress 4 941.3 15.8
(c) Investment Property 5 12.4 12.7
(d) Intangible assets 6 153.3 208.2
(e) Financial assets
(i) Loans 7 (a) 46.8 44.0
(ii) Other financial assets 7 (b) 2.7 2.4
(f) Deferred tax assets (net) 8 166.0 138.8
(g) Non current tax assets (net) 9 0.4 13.5
(h) Other non-current assets 10 354.4 260.1
Total Non-current assets 3,833.9 2,917.3
II Current assets
(a) Inventories 11 5,554.7 4,421.0
(b) Financial Assets
(i) Trade receivables 12 (a) 4,771.2 4,142.7
(ii) Cash and cash equivalents 12 (b) 295.5 354.9
(iii) Bank balances other than (ii) above 12 (c) 3.0 3.2
(iv) Loans 12 (d) 10.2 14.5
(v) Other financial assets 12 (e) 124.9 205.3
(c) Contract assets 13 214.9 -
(d) Other current assets 14 869.4 502.1
Total Current assets 11,843.8 9,643.7
TOTAL ASSETS (I+II) 15,677.7 12,561.0
B EQUITY AND LIABILITIES
I Equity
58
(a) Equity Share Capital 15 271.9 271.9
(b) Other Equity 16 5,858.0 5,080.1
Total Equity 6,129.9 5,352.0
LIABILITIES
II Non-current liabilities
(a) Provisions 17 499.3 458.0
(b) Other non - current liabilities 18 124.1 31.5
Total Non-current liabilities 623.4 489.5
III Current liabilities
(a) Financial Liabilities
(i) Borrowings 19 (a) 1,896.2 126.6
(ii) Trade Payables
(a) total outstanding dues of micro and small enterprises 19 (b) 164.1 183.8
(b) total outstanding dues of creditors other than micro and small enterprises 19 (b) 5,244.1 4,774.3
(iii) Other financial liabilities 19 (c) 587.9 525.8
(b) Contract liabilities 20 299.9 -
(c) Provisions 21 150.3 169.9
(d) Current tax liabilities (net) 22 6.0 58.4
(e) Other current liabilities 23 575.9 880.7
Total Current liabilities 8,924.4 6,719.5
TOTAL EQUITY AND LIABILITIES (I+II+III) 15,677.7 12,561.0

The accompanying Notes form an integral part of the Financial Statements.

As per our report of even date

For Price Waterhouse & Co Chartered Accountants LLP For and on behalf of the Board of Directors
Firm Registration No.304026E/E300009
Chartered Accountants

Sachin Parekh Gurmeet Singh Yoshikazu Ishihara

Partner Chairman & Managing Director Director
Membership No.: 107038 DIN : 06938403 DIN : 07998690

Rishi Mehta Parag Dave

Chief Financial Officer Company Secretary
Membership No.: 12626
Place: Ahmedabad Place: Ahmedabad
Date: May 16, 2019 Date: May 16, 2019
Statement of Profit and Loss
for the year ended March 31, 2019

J in million
Note Year ended Year ended
No. March 31, 2019 March 31, 2018
I INCOME
(a) Revenue from Operations 24 22,413.0 22,582.7
(b) Other income 25 154.2 73.9
Total income 22,567.2 22,656.6
II EXPENSES
(a) Cost of materials consumed 10,422.7 8,425.0
(b) Purchase of Stock-in-trade 5,040.7 5,575.7
(c) Changes in inventories of finished goods, Stock-in -trade and 26 (1,024.5) (75.7)
work-in-progress
(d) Excise duty - 728.8
(e) Employee benefit expense 27 1,651.5 1,409.8
(f) Finance costs 28 26.9 19.8
(g) Depreciation and amortisation expenses 29 441.6 529.2
(h) Other expenses 30 4,684.6 4,530.4
Total expenses 21,243.5 21,143.0
III Profit before tax (I-II) 1,323.7 1,513.6
IV Tax expense
(a) Current tax 31 491.5 569.7
(b) Deferred tax 31 (27.2) (57.6)
Total tax expense 464.3 512.1
V Profit for the year (III-IV) 859.4 1,001.5 59
VI Other comprehensive Income
Items that will not be reclassified to profit or loss
(i) Re-measurements of post-employment benefit obligations- gain/ (49.6) (4.2)
(loss)
(ii) Income tax relating to above item 17.3 1.5

FINANCIAL STATEMENTS
Other comprehensive Income for the year, net of tax (32.3) (2.7)
VII Total comprehensive income for the year (V+VI) 827.1 998.8
VIII Basic and Diluted earnings per share [face value J 10 each] in J 42 31.6 36.8

The accompanying Notes form an integral part of the Financial Statements.

As per our report of even date

For Price Waterhouse & Co Chartered Accountants LLP For and on behalf of the Board of Directors
Firm Registration No.304026E/E300009
STATUTORY REPORTS

Chartered Accountants

Sachin Parekh Gurmeet Singh Yoshikazu Ishihara

Partner Chairman & Managing Director Director
Membership No.: 107038 DIN : 06938403 DIN : 07998690

Rishi Mehta Parag Dave

Chief Financial Officer Company Secretary
Membership No.: 12626
Place: Ahmedabad Place: Ahmedabad
COMPANY OVERVIEW

Date: May 16, 2019 Date: May 16, 2019

 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Statement of Cash flow

for the year ended March 31, 2019

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
(A) Cash flow from operating activities
Profit before tax 1,323.7 1,513.6
Adjustment for :
Depreciation and amortisation expense 441.6 529.2
Loss / (gain) on sale / retirement of fixed assets (net) (5.0) 2.0
Liabilities no longer required written back (24.5) -
Finance costs 26.9 19.8
Unrealised foreign exchange (gain)/loss (net) at year end (0.1) 0.6
Provision for doubtful debts and Bad Debts 33.4 33.4
Lease rent income (3.8) (3.3)
Interest income (68.3) (26.4)
Government Grants (13.3) (15.3)
Operating profit before working capital changes 1710.6 2,053.6
Changes in working capital:
Adjustment for (increase) / decrease in operating assets:
Increase / (Decrease) in inventories (1,133.7) 178.6
(Increase) in trade receivables (643.2) (1,345.3)
(Increase) in other financial assets (128.5) (26.4)
(Increase) in other current assets (420.7) (186.3)
Increase in current liabilities 354.5 741.5
60 Increase / (Decrease) in other provision (35.6) 46.2
Cash generated from operations (296.6) 1,461.9
Income tax paid (net of refunds) (513.5) (489.8)
Net cash inflow / (outflow) from operating activities (A) (810.1) 972.1
(B) Cash flow from investing activities
Purchase of fixed assets (including capital work in progress and capital advance) (1,079.6) (372.7)
Proceeds from sales of fixed assets 57.5 23.5
Investment in bank deposits (with maturity more than three months) (0.3) (0.2)
Lease rent income 3.8 3.3
Interest received 68.3 26.4
Net cash outflow from investing activities (B) (950.3) (319.7)
(C) Cash flow from financing activities
Proceeds from / Repayment for short-term borrowings (net) 1,769.6 (473.4)
Payment of finance cost (19.2) (8.0)
Payment of dividend (including dividend distribution tax) (49.4) (49.1)
Net cash inflow/(outflow) from financing activities (C) 1,701.0 (530.5)
Net Increase / (Decrease) in cash and cash equivalents (A+B+C) (59.4) 121.9
Add : Cash and cash equivalents at the beginning of the year 354.9 233.0
Cash and cash equivalents at the end of the year [Refer Note 12(b)] 295.5 354.9

a) The above Statement of Cash Flows has been prepared under the "Indirect Method" as set out in the Ind AS - 7 on Statement of Cash
Flows.

b) Cash flow from Operating activities includes J 22.1 million (March 31, 2018 - J 13 million) being cash flows towards Corporate social
responsibility initiatives. [Refer Note 30(b)]
Statement of Cash flow
for the year ended March 31, 2019

c) Net debt reconciliation:

Year ended Year ended

March 31, 2019 March 31, 2018
Working Capital Working Capital Commercial
loans loans papers
Net Debt at the beginning of the year 126.6 - 595.2
Cash Inflow / (Outflow) 1,769.6 126.6 (600.0)
Finance costs 19.2 8.0 4.8
Finance cost paid (19.2) (8.0) -
Net Debt at the closing of the year 1,896.2 126.6 -

The accompanying Notes form an integral part of the Financial Statements.

As per our report of even date

For Price Waterhouse & Co Chartered Accountants LLP For and on behalf of the Board of Directors
Firm Registration No.304026E/E300009
Chartered Accountants

Sachin Parekh Gurmeet Singh Yoshikazu Ishihara

Partner Chairman & Managing Director Director
Membership No.: 107038 DIN : 06938403 DIN : 07998690

Rishi Mehta Parag Dave

61
Chief Financial Officer Company Secretary
Membership No.: 12626
Place: Ahmedabad Place: Ahmedabad
Date: May 16, 2019 Date: May 16, 2019

FINANCIAL STATEMENTS
STATUTORY REPORTS
COMPANY OVERVIEW
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Statement of Changes in Equity

for the year ended March 31, 2019

A. Equity share capital

J in million
Note No. Equity share capital
Balance as at April 1, 2017 271.9
Changes in equity share capital -
Balance as at March 31, 2018 15 271.9
Changes in equity share capital -
Balance as at March 31, 2019 15 271.9

B. Other equity
J in million
Note No. Reserves and Surplus Total
Capital Securities General Retained equity
reserve premium reserve earnings
Balance as at April 1, 2017 0.7 895.4 229.8 3,004.5 4,130.4
Profit for the year - - - 1,001.5 1,001.5
Other comprehensive income for the year, - - - (2.7) (2.7)
(net of income tax)
Total comprehensive income for the year - - - 998.8 998.8
Transactions with Owners in their capacity as
owners:
62 Dividend paid (including dividend distribution tax) - - - (49.1) (49.1)
Balance as at March 31, 2018 16 0.7 895.4 229.8 3,954.2 5,080.1
Profit for the year - - - 859.4 859.4
Other comprehensive income for the year, (net - - - (32.3) (32.3)
of income tax)
Total comprehensive income for the year - - - 827.1 827.1
Transactions with owners in their capacity as
owners:
Dividend paid (including dividend distribution tax) - - - (49.2) (49.2)
Balance as at March 31, 2019 16 0.7 895.4 229.8 4,732.1 5,858.0

The accompanying Notes form an integral part of the Financial Statements.

As per our report of even date

For Price Waterhouse & Co Chartered Accountants LLP For and on behalf of the Board of Directors
Firm Registration No.304026E/E300009
Chartered Accountants

Sachin Parekh Gurmeet Singh Yoshikazu Ishihara

Partner Chairman & Managing Director Director
Membership No.: 107038 DIN : 06938403 DIN : 07998690

Rishi Mehta Parag Dave

Chief Financial Officer Company Secretary
Membership No.: 12626
Place: Ahmedabad Place: Ahmedabad
Date: May 16, 2019 Date: May 16, 2019
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Background c. Expected to be realized within twelve months after

the reporting period, or
Johnson Controls-Hitachi Air Conditioning India Company (‘the
Company’) was incorporated in December 1984 as “Acquest Air d. Cash and cash equivalents unless restricted from
Conditioning Systems Private Limited”. being exchanged or used to settle a liability for at
least twelve months after the reporting period.
The Company is engaged in the business of manufacturing, selling
and trading of ‘Hitachi’ brand of Air conditioners, refrigerators, All other assets are classified as non-current.
chillers and VRF (variable refrigerant flow) systems. During the
A liability is current when:
year, the Company has started providing design and development
services to Group Company to design, and/or support development a. It is expected to be settled in the normal operating
and improvement of features in new and existing air conditioning cycle
products. Manufacturing facility for Air conditioners is set up
at Kadi (North Gujarat). The Company performs its marketing b. It is held primarily for the purpose of trading
activities through twenty three branches and four regional service
centers spread across India. The Company is a public limited c. It is due to be settled within twelve months after the
company incorporated in India and is listed on the BSE Limited and reporting period, or
National Stock Exchange of India Limited.
d. There is no unconditional right to defer the
settlement of the liability for at least twelve months
Note 1: Significant accounting policies after the reporting period.

This note provides a list of the significant accounting policies All other liabilities are classified as non-current.
adopted in the preparation of financial statements. These
accounting policies are applied consistently to all the periods Operating cycle
63
presented in the financial statements, unless otherwise stated.
Based on the nature of products / activities of the
(a) Basis of accounting and preparation of financial statements Company and the normal time between acquisition of
assets and their realisation in cash or cash equivalents,
(i) Compliance with Ind AS the Company has determined its operating cycle as
12 months for the purpose of classification of its assets

FINANCIAL STATEMENTS
The financial statements comply in all material aspects and liabilities as current and non-current.
with Indian Accounting Standards (Ind AS) notified under
Section 133 of the Companies Act, 2013 ("the Act"), as (b) Segment reporting
amended and other relevant provisions of the Act.
Operating segments are reported in a manner consistent with
(ii) Historical cost convention the internal reporting provided to the Chairman & Managing
Director (CMD) of the Company who is identified as the
The financial statements have been prepared on a chief operating decision maker (CODM). The CMD assesses
historical cost basis, except for the following: the financial performance and position of the Company, and
makes strategic decisions.
• certain financial assets and liabilities (including
STATUTORY REPORTS

derivative instruments) that is measured at fair The Company is engaged in the business of manufacturing,
value; and selling and trading of ‘Hitachi’ brand of Air conditioners,
refrigerators, chillers and VRF (variable refrigerant flow)
• defined benefit plans - plan assets measured at fair
systems and during the year the Company has started
value.
providing design and development service to Group Company.
(iii) Current /Non-Current Classification Accordingly, the Chief Operating Decision Maker (CODM)
have identified that the Company’s business falls within
The entity presents assets and liabilities in the balance two business segment of Cooling Products for comfort and
sheet based on current/non-current classification. commercial use and design and development services.
COMPANY OVERVIEW

An asset is treated as current when it is: (c) Foreign currency transactions and translations

a. Expected to be realized or intended to be sold or (i) Functional and presentation currency

consumed in the normal operating cycle
Items included in financial statements are measured
b. Held primarily for the purpose of trading using the currency of 'the primary economic environment
in which the entity operates ("the functional currency").
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Notes forming part of the Financial Statements

for the year ended March 31, 2019

The financial statements are presented in Indian Rupees 4. Revenue from contract with customer for installation and
(H), which is the entity's functional and presentation commissioning of air conditioning system is recognised
currency. with reference to stage of completion. The stage of
completion is measured by reference to the contract
(ii) Transactions and balances costs incurred up to the end of the reporting period as
a percentage of total estimated costs for each contract.
Foreign currency transactions are translated into the
Costs incurred in the year in connection with future
functional currency using exchange rates at the date
activity on a contract are excluded from contract costs in
of the transaction. Foreign exchange gains and losses
determining the stage of completion. When the outcome
resulting from the settlement of such transactions and
of a construction contract cannot be estimated reliably,
from the translation of monetary assets and liabilities
contract revenue is recognised only to the extent of
denominated in foreign currencies at year end exchange
contract costs incurred that are likely to be recoverable.
rates are recognised in the statement of profit or loss.
(e) Government Grants
Non-monetary items that are measured at fair value in a
foreign currency are translated using the exchange rates Grants from the government are recognised at their fair value
at the date when the fair value was determined. Non- where there is a reasonable assurance that the grant will
monetary assets and liabilities that are measured based be received and the Company will comply with all attached
on historical cost in a foreign currency are translated at conditions.
the exchange rate at the date of the transaction.
Government grants relating to income are deferred and
(d) Revenue recognition recognised in the Statement of profit or loss over the period
necessary to match them with the costs that they are intended
Effective April 1, 2018, the Company has adopted Indian
to compensate and presented within other income.
Accounting Standard 115 - 'Revenue from Contracts with
64
Customers' (‘Ind AS 115’) with modified retrospective Government grants relating to the purchase of property,
approach. Accordingly, the comparative information for plant and equipment are included in current and non-current
previous year has not been restated. liabilities as deferred Government Grant and are credited to
the Statement of profit or loss on a straight-line basis over
Sale of Products:
the expected lives of the related assets and presented within
Sales of products are recognised as revenue when control other income.
of the products has transferred, being when product are
(f) Income Tax
delivered to the customer. Sales are net of returns, trade
discounts, rebates, and goods and service tax (GST), as The income tax expense for the period is the tax payable on
applicable. Delivery occurs when the products have been the current period’s taxable income based on the applicable
shipped to the specific location, the risks of obsolescence income tax rate adjusted by changes in deferred tax assets
and loss have been transferred to the customer, and either and liabilities attributable to temporary differences.
the customer has accepted the products in accordance with
the sales contract, the acceptance provisions have lapsed, Current and deferred tax is recognized in the Statement
or the Company has objective evidence that all criteria for of Profit and Loss except to the extent it relates to items
acceptance have been satisfied. recognized directly in equity or other comprehensive income,
in which case it is recognized in equity or other comprehensive
Sale of Service: income, respectively.

Sale of services includes following:- Current income tax

1. Revenue from Annual Maintainance Contracts (AMCs) is Current tax payable is based on taxable profit for the year. The
recognised over the period of respective contract on a tax rates and tax laws used to compute the amount are those
straight line basis. that are enacted or substantively enacted, at the reporting
date. Management periodically evaluates positions taken in
2. Revenue from Design and development services is
tax returns with respect to situations in which applicable tax
recognised over the period of time.
regulation is subject to interpretation. It establishes provisions,
3. Revenue from specific repairs and maintenance (other where appropriate, on the basis of amounts expected to be
than AMCs) contracts is recognised at a point in time in paid to the tax authorities.
accordance with the terms of the contract.
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Current tax assets and liabilities are offset when there is a finished goods and work in progress comprises raw materials,
legally enforceable right to set off current tax assets against direct labour and an appropriate proportion of variable and
current tax liabilities and Company intends either to settle fixed overhead expenditure, the latter being allocated on the
on a net basis, or to realise the asset and settle the liability basis of normal operating capacity.
simultaneously.
Materials and other items held for use in the production of
Deferred tax inventories are not written down below cost if the finished
products in which they will be utilised are expected to be sold
Deferred tax is provided in full, using the liability method, on at or above cost.
temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting Net realisable value is the estimated selling price in the ordinary
purposes at the reporting date. Deferred tax assets are course of business, less the estimated cost of completion and
recognized to the extent that it is probable that future the estimated cost necessary to make the sale.
taxable income will be available against which the deductible
temporary differences could be utilized. Custom duty on goods where title has passed to the Company
and material has reached Indian ports is included in the value
Deferred tax assets and liabilities are measured based on the of inventories.
tax rates that are expected to apply in the period when the
asset is realized or the liability is settled, based on tax rates Provision for inventory obsolescence is made considering various
and tax laws that have been enacted or substantively enacted factors such as likely usage, technical obsolescence, etc.
by the balance sheet date.
(j) Financial instruments
The carrying amount of deferred tax assets is reviewed at each
A financial instrument is any contract that gives rise to a
reporting date and adjusted to reflect changes in probability
financial asset of one entity and a financial liability or equity
that sufficient taxable profits will be available to allow all or 65
instrument of another entity.
part of the asset to be recovered.
Financial assets and liabilities are recognised when the
Deferred income tax assets and liabilities are off-set against
Company becomes a party to the contractual provisions of
each other and the resultant net amount is presented in the
the instrument.
Balance Sheet, if and only when, (a) the Company has a legally
enforceable right to set-off the current income tax assets and

FINANCIAL STATEMENTS
(i) Financial assets
liabilities, and (b) the deferred income tax assets and liabilities
relate to income tax levied by the same taxation authority. Classification

(g) Cash and cash equivalents The Company classifies its financial assets in the following
measurement categories:
For the purpose of presentation in the Statement of Cash
flows, cash and cash equivalents includes cash on hand, • those to be measured subsequently at fair value
deposits held at call with financial institutions, other short- (either through other comprehensive income, or
term, highly liquid investments with original maturities of through profit or loss), and
STATUTORY REPORTS

three months or less that are readily convertible to known

• those measured at amortised cost.
amounts of cash and which are subject to an insignificant risk
of changes in value. The classification depends on the entity’s business model
for managing the financial assets and the contractual
(h) Trade receivables
terms of the cash flows.
Trade receivables are recognised initially at fair value and
Initial Recognition & Measurement
subsequently measured at amortised cost using the effective
interest method, less provision for impairment if any. Financial assets are recognized when the Company
becomes a party to the contractual provisions of the
(i) Inventories
COMPANY OVERVIEW

instrument. Financial assets are recognized initially at fair

Inventories are stated at lower of cost and net realisable value. value plus, in the case of financial assets not recorded
Cost is determined using the weighted average method. at fair value through Statement of Profit and Loss,
transaction costs that are attributable to the acquisition
The cost of raw materials, stores and spares and stock in trade of the financial asset. Transaction costs of financial assets
comprises purchase cost and all cost incurred in bringing the carried at fair value through Profit and Loss are expensed
inventory to their present location and condition. The cost of in the Statement of Profit and Loss.
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Notes forming part of the Financial Statements

for the year ended March 31, 2019

Subsequent Measurement in which it arises. Interest income from these financial

assets is recognised in the Statement of profit and loss.
After initial recognition, financial assets are measured at:
Equity instruments:
• fair value (either through Other Comprehensive
Income or through Profit and Loss), or All equity investments in scope of Ind AS 109 are
measured at fair value. Equity instruments which are held
• amortized cost. for trading are classified as at FVTPL. For all other equity
instruments, the Company decides to classify the same
Debt instruments: either as at FVTOCI or FVTPL.
Debt instruments are subsequently measured at amortized The Company makes such election on an instrument-
cost, fair value through other comprehensive income by-instrument basis. The classification is made on initial
(‘FVOCI’) or fair value through Profit and Loss (‘FVTPL’) recognition and is irrevocable.
till de-recognition on the basis of (i) the entity’s business
model for managing the financial assets and (ii) the If the Company decides to classify an equity instrument
contractual cash flow characteristics of the financial asset. as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognized in other
Amortised cost: comprehensive income (OCI). There is no recycling of the
amounts from OCI to Statement of Profit and Loss, even
Assets that are held for collection of contractual cash
on sale of such investments.
flows where those cash flows represent solely payments
of principal and interest are measured at amortised cost. Equity instruments included within the FVTPL category
A gain or loss on a debt investment that is subsequently are measured at fair value with all changes recognized in
measured at amortised cost is recognised in the Statement the Statement of Profit and Loss.
66 of Profit and Loss when the asset is derecognised or
impaired. Interest income from these financial assets is Impairment of financial assets:
included in other income using the effective interest rate
method. The Company applies Expected Credit Loss (ECL) model
for measurement and recognition of impairment loss on
Fair Value Through Other Comprehensive Income the following financial assets and credit risk exposure:
(FVOCI):
• financial assets that are debt instruments, and are
Assets that are held for collection of contractual cash measured at amortised cost e.g., loans, deposits,
flows and for selling the financial assets, where the and bank balance,
assets’ cash flows represent solely payments of principal
and interest, are measured at FVOCI. Movements in • trade receivables.
the carrying amount are taken through OCI, except for
The Company follows ‘simplified approach’ for recognition
the recognition of impairment gains or losses, interest
of impairment loss allowance on trade receivables which
revenue and foreign exchange gains and losses which are
do not contain a significant financing component.
recognised in the Statement of Profit and Loss. When
the financial asset is derecognised, the cumulative gain The application of simplified approach does not require
or loss previously recognised in OCI is reclassified from the Company to track changes in credit risk. Rather,
equity to Statement of Profit and Loss and recognised in it recognises impairment loss allowance based on
other income. Interest income from these financial assets lifetime ECLs at each reporting date, right from its initial
is included in other income using the effective interest recognition.
rate method.
Derecognition of financial assets:
Fair Value Through Profit and Loss (FVTPL):
A financial asset is derecognized only when:
Assets that do not meet the criteria for amortised cost or
FVOCI are measured at FVTPL. A gain or loss on a debt • the Company has transferred the rights to receive
investment that is subsequently measured at FVTPL is cash flows from the financial asset or
recognised in Statement of Profit and Loss in the period
Notes forming part of the Financial Statements
for the year ended March 31, 2019

• retains the contractual rights to receive the cash effective interest method. Interest expense and foreign
flows from the financial asset, but assumes a exchange gains and losses are recognized in statement of
contractual obligation to pay the cash flows to one profit and loss. Any gain or loss on derecognition is also
or more recipients. recognized in statement of profit and loss.

Where the entity has transferred an asset, the Company Derecognition

evaluates whether it has transferred substantially all
A financial liability is derecognised when the obligation
risks and rewards of ownership of the financial asset. In
specified in the contract is discharged, cancelled or
such cases, the financial asset is derecognized. Where
expires.
the entity has not transferred substantially all risks and
rewards of ownership of the financial asset, the financial (iii) Derivative financial instruments:
asset is not derecognized.
The Company uses derivative financial instruments,
Where the entity has neither transferred a financial asset such as foreign exchange forward contracts to manage
nor retains substantially all risks and rewards of ownership its exposure to foreign exchange risks. Such derivative
of the financial asset, the financial asset is derecognized financial instruments are initially recognised at fair value
if the Company has not retained control of the financial on the date on which a derivative contract is entered into
asset. Where the Company retains control of the financial and are subsequently re-measured at fair value.
asset, the asset is continued to be recognized to the
extent of continuing involvement in the financial asset. Derivatives are carried as financial assets when the fair
value is positive and as financial liabilities when the fair
Income recognition: value is negative.
Interest income: The Company enters into derivative contracts to hedge
risks and are not designated in any hedging relationship 67
Interest income from debt instruments is recognized using
i.e. hedge accounting is not followed. Such contracts are
the effective interest rate method. The effective interest
accounted for at FVTPL.
rate is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial (k) Offsetting financial instruments
asset to the gross carrying amount of a financial asset.
Financial assets and liabilities are offset and the net amount

FINANCIAL STATEMENTS
(ii) Financial liabilities: is reported in the balance sheet where there is a legally
enforceable right to offset the recognised amounts and there
Initial recognition and measurement:
is an intention to settle on a net basis or realize the asset
Financial liabilities are recognised when the Company and settle the liability simultaneously. The legally enforceable
becomes a party to the contractual provisions of the right must not be contingent on future events and must be
instrument. Financial liabilities are initially measured at its enforceable in the normal course of business and in the event
fair value plus or minus, in the case of a financial liability of default, insolvency or bankruptcy of the Company or the
not at fair value through profit or loss, transaction costs counterparty.
that are directly attributable to the issue of the financial
STATUTORY REPORTS

(l) Property, plant and equipment

liability.
Freehold land is carried at historical cost. All other items of
Subsequent measurement:
property, plant and equipment are stated at historical cost
Financial liabilities are classified as measured at amortized less depreciation. Historical cost includes expenditure that is
cost or FVTPL. A financial liability is classified as at FVTPL directly attributable to the acquisition of the items.
if it is classified as held for trading, or it is a derivative
Subsequent costs are included in the asset’s carrying amount
or it is designated as such on initial recognition. Financial
or recognised as a separate asset, as appropriate, only when
liabilities at FVTPL are measured at fair value and net gains
it is probable that future economic benefits associated with
and losses, including any interest expense, are recognized
COMPANY OVERVIEW

the item will flow to the Company and the cost of the item can
in statement of profit and loss. Other financial liabilities
be measured reliably. The carrying amount of any component
are subsequently measured at amortized cost using the
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Notes forming part of the Financial Statements

for the year ended March 31, 2019

accounted for as a separate asset is derecognised when expenditure is capitalised to the asset’s carrying amount only
replaced. All other repairs and maintenance are charged to when it is probable that future economic benefits associated
the Statement of profit or loss during the reporting period in with the expenditure will flow to the Company and the cost
which they are incurred. of the item can be measured reliably. All other repairs and
maintenance costs are expensed when incurred. When part
Depreciation methods, estimated useful lives and residual of an investment property is replaced, the carrying amount of
value the replaced part is derecognised.
Depreciation on tangible fixed assets is provided on a pro-rata Investment properties are depreciated using the straight-
basis on the straight line method over the following useful life line method over their estimated useful lives. Investment
based on management technical estimate: properties generally have a useful life of 28 years. The useful
Class of assets Useful Life Useful Life life has been determined based on technical evaluation
followed prescribed in performed by the management’s expert.
by the Schedule II to
management the Companies (n) Intangible assets
(in years) Act (in years)
Building 28 to 58 30 to 60 Intangible assets are stated at acquisition cost, net of
Road 10 10 accumulated amortisation and accumulated impairment
Moulds and tools 3 8 losses, if any. They have a finite useful life. Costs associated
Toolkits 3 5 with maintaining software programmes are recognised as an
Plant and Machinery (Other 3 to 15 15 expense as incurred.
than moulds and tools, and
toolkits) (i) Amortisation methods and periods
Server and network 4 6
End user devices such as 3 3 The Company amortises intangible assets with a finite
68 desktops and laptops useful life using the straight-line method over the
Furniture & fittings 3 to 7 10 following periods:
Office equipment 3 to 5 5
Class of assets Useful Life
Electric Installations 7 10
Vehicles 4 to 8 8
(in years)
Computer Software 3
Amortisation of leasehold improvements are over the lease Licensed Technical Know-how 5
period or useful life as above, whichever is lower.
The amortisation period and the amortisation method
For the assets added during the financial year, depreciation is are reviewed at least at each financial year end. If the
charged on pro-rata basis from the date of commissioning. expected useful life of the asset is significantly different
from previous estimates, the amortisation period is
The useful lives have been determined based on technical changed accordingly.
evaluation done by the management in order to reflect the
actual usage of the assets. The residual values are not more Gains or losses arising from the retirement or disposal
than 5% of the original cost of the asset. of an intangible asset are determined as the difference
between the net disposal proceeds and the carrying
The assets residual values and useful lives are reviewed, and amount of the asset and recognised as income or expense
adjusted if appropriate at the end of each reporting period. in the Statement of Profit and Loss.
An asset’s carrying amount is written down immediately
to its recoverable amount if the asset’s carrying amount is Intangible assets under development consists of
greater than its estimated recoverable amount. Gains and expenditure towards assets which are not yet operational
losses on disposals are determined by comparing proceeds as on balance sheet date.
with carrying amount. These are included in the Statement of
profit or loss within other income. (ii) Research and development cost

(m) Investment Property Research costs are expensed as incurred. Development

expenditure incurred on an individual project is recognised
Property that is held for long-term rental yields or for capital as an intangible asset when all of the following criteria
appreciation or both, and that is not occupied by the Company, are met:
is classified as investment property. Investment property is
measured initially at its cost, including related transaction • It is technically feasible to complete the intangible
costs and where applicable borrowing costs. Subsequent asset so that it will be available for use or sale.
Notes forming part of the Financial Statements
for the year ended March 31, 2019

• There is an intention to complete the asset. Other borrowing costs are expensed in the period in which
they are incurred.
• There is an ability to use or sale the asset.
(r) Provisions and contingencies
• The asset will generate future economic benefits.
Provisions
• Adequate resources are available to complete the
development and to use or sell the asset. Provisions (including for litigation and service warranties)
are recognised when the Company has a present legal
• The expenditure attributable to the intangible asset or constructive obligation as a result of past events, it is
during development can be measured reliably. probable that an outflow of resources will be required to
settle the obligation and the amount can be reliably estimated.
Following the initial recognition of the development
Provisions are not recognised for future operating losses.
expenditure as an asset, the cost model is applied requiring
the asset to be carried at cost less any accumulated Where there are a number of similar obligations, the likelihood
amortisation and accumulated impairment losses, if any. that an outflow will be required in settlement is determined
Amortisation of the asset begins when development is by considering the class of obligations as a whole. A provision
complete and the asset is available for use and it is amortised is recognised even if the likelihood of an outflow with respect
on straight line basis over the estimated useful life. to any one item included in the same class of obligations
may be small.
(o) Impairment of assets
Provision for service warranty consider historical trends and
Intangible assets that have an indefinite useful life are not
experience regarding, average failure rate, replacement cost
subject to amortisation and are tested annually for impairment,
and other variables.
or more frequently if events or changes in circumstances
indicate that they might be impaired. Other assets are tested Provisions are measured at the present value of management’s 69
for impairment whenever events or changes in circumstances best estimate of the expenditure required to settle the present
indicate that the carrying amount may not be recoverable. obligation at the end of the reporting period. The discount
An impairment loss is recognised for the amount by which rate used to determine the present value is a pre-tax rate
the asset’s carrying amount exceeds its recoverable amount. that reflects current market assessments of the time value
The recoverable amount is the higher of an asset’s fair value of money and the risks specific to the liability. The increase

FINANCIAL STATEMENTS
less costs of disposal and value in use. For the purposes of in the provision due to the passage of time is recognised as
assessing impairment, assets are grouped at the lowest levels interest expense.
for which there are separately identifiable cash inflows which
are largely independent of the cash inflows from other assets Contingencies
or groups of assets (cash-generating units). Non-financial
Contingent liabilities are disclosed when there is a possible
assets that suffered an impairment are reviewed for possible
obligation arising from past events, the existence of which
reversal of the impairment at the end of each reporting period.
will be confirmed only by the occurrence or non-occurrence
(p) Capital work in progress of one or more uncertain future events not wholly within the
control of the Company or a present obligation that arises
STATUTORY REPORTS

All expenditure incurred towards tangible assets are from past events where it is either not probable that an
accumulated and shown as capital work in progress and not outflow of resources will be required to settle or a reliable
depreciated until such assets are ready for commercial use. estimate of the amount cannot be made.

(q) Borrowings costs When there is possible obligation or present obligation but
the likelihood of outflow of resources is remote, no provision
General and specific borrowing costs that are directly attributable
or disclosure is made.
to the acquisition, construction or production of a qualifying
asset are capitalised during the period of time that is required (s) Employees Benefits
to complete and prepare the asset for its intended use or sale.
COMPANY OVERVIEW

Qualifying assets are assets that necessarily take a substantial (i) Short-term employee benefits
period of time to get ready for their intended use or sale.
Liabilities for wages and salaries, accumulated leave and
Investment income earned on the temporary investment of non-monetary benefits that are expected to be settled
specific borrowings pending their expenditure on qualifying wholly within 12 months after the end of the period in
assets is deducted from the borrowing costs eligible for which the employees render the related service are
capitalisation. recognised in respect of employees’ services up to the end
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Notes forming part of the Financial Statements

for the year ended March 31, 2019

of the reporting period and are measured at the amounts recognised in the period in which they occur, directly
expected to be paid when the liabilities are settled. in other comprehensive income. They are included in
retained earnings in the Statement of changes in equity
(ii) Long-term employee benefits and in the balance sheet.

Compensated absences which are not expected to occur Changes in the present value of the defined benefit
within twelve months after the end of the period in which obligation resulting from plan amendments or curtailments
the employee renders the related service are actuarially are recognised immediately in the Statement of profit or
valued at the end of year measured at the present value loss as past service cost.
of expected future payments to be made in respect of
services provided by employees up to the end of the Defined contribution plans
reporting period using the projected unit credit method.
The benefits are discounted using the market yields at The Company contributes on a defined contribution
the end of the reporting period on government bonds basis to Employees’ Provident Fund / Pension Fund,
that have terms approximating to the terms of the related Employees’ State Insurance and Superannuation Fund.
obligation. Remeasurements as a result of experience The contributions towards Provident Fund / Pension Fund
adjustments and changes in actuarial assumptions are and State Insurances is made to regulatory authorities
recognised in statement of profit or loss. and contribution towards Superannuation Fund is made
to Life Insurance Corporation of India. Such benefits
The classification of compensated absences into current are classified as Defined Contribution Schemes as the
and non-current as shown in financial statements is as Company does not carry any further obligations, apart
per actuarial valuation report. from the contributions made on a monthly basis.

(iii) Post-employment obligations (t) Leases

70
The Company operates the following post-employment As a lessee
schemes:
Leases in which a significant portion of the risks and rewards
(a) defined benefit plans - gratuity, and of ownership are not transferred to the Company as lessee
are classified as operating leases.
(b) defined contribution plans – superannuation,
provident fund and employees’ state insurance. Payments made under operating leases (net of any incentives
received from the lessor) are charged to the Statement of
Defined benefit plans profit or loss on a straight-line basis over the period of the
lease unless the payments are structured to increase in line
The liability or asset recognised in the balance sheet in
with expected general inflation to compensate for the lessor’s
respect of defined benefit gratuity plan is the present
expected inflationary cost increases.
value of the defined benefit obligation at the end of the
reporting period less the fair value of plan assets. The As a lessor
defined benefit obligation is calculated at the year end
by an independent actuary using the projected unit credit Lease income from operating leases where the Company is
method. a lessor is recognised in income on a straight-line basis over
the lease term unless the receipts are structured to increase
The present value of the defined benefit obligation in line with expected general inflation to compensate for the
denominated in INR is determined by discounting the expected inflationary cost increases. The respective leased
estimated future cash outflows by reference to market assets are included in the balance sheet based on their nature.
yields at the end of the reporting period on government Initial direct costs incurred in negotiating and managing an
bonds that have terms approximating to the terms of the operating lease are added to the cost of the leased asset and
related obligation. recognised as an expense over the term on the same basis as
the lease income.
The net interest cost is calculated by applying the
discount rate to the net balance of the defined benefit (u) Earnings per share
obligation and the fair value of plan assets. This cost is
included in employee benefit expense in the Statement of (i) Basic earnings per share
profit and loss.
Basic earnings per share is calculated by dividing:
Remeasurement gains and losses arising from experience
adjustments and changes in actuarial assumptions are • the profit attributable to equity share holders of the
Company,
Notes forming part of the Financial Statements
for the year ended March 31, 2019

• by the weighted average number of equity shares The accounting by lessors will not significantly change. Some
outstanding during the financial year, adjusted for differences may arise as a result of the new guidance on
bonus elements in equity shares issued during the the definition of a lease. Under Ind AS 116, a contract is, or
year. contains, a lease if the contract conveys the right to control
the use of an identified asset for a period of time in exchange
(ii) Diluted earnings per share for consideration.

Diluted earnings per share adjusts the figures used in the The Company is in the process of assessing the detailed
determination of basic earnings per share to take into impact of Ind AS 116 on its financial statements.
account:
There are no other standards, changes in standards and
• the after income tax effect of interest and other interpretations that are not in force up to reporting period
financing costs associated with dilutive potential that the Company expects to have a material impact arising
equity shares, and from its application in its financial statements.

• the weighted average number of additional equity

shares that would have been outstanding assuming Note 2: Critical estimates and judgements
the conversion of all dilutive potential equity shares.
The preparation of financial statements requires the use of
(v) Rounding of amounts accounting estimates which, by definition, will seldom equal the
actual results. This note provides an overview of the areas that
All amounts disclosed in the financial statements and notes involved a higher degree of judgement or complexity, and of items
have been rounded off to the nearest million of rupees as per which are more likely to be materially adjusted due to estimates
the requirement of Schedule III, unless otherwise stated. and assumptions turning out to be different than those originally
assessed. Detailed information about each of these estimates and
(w) New standards or interpretations 71
judgements is included in relevant notes together with information
The Ministry of Corporate Affairs (MCA) notified the Companies about the basis of calculation for each affected line item in the
(Indian Accounting Standards) Amendment Rules, 2019 and financial statements.
Companies (Indian Accounting Standards) Second Amendment
The areas involving critical estimates or judgements are:
Rules, 2019 (the ‘Rules’) on March 30, 2019. These rules are
effective from April 1, 2019. Relevant disclosures required

FINANCIAL STATEMENTS
• Estimated useful life of property, plant & equipment and
by Ind AS 8, Accounting Policies, Changes in Accounting intangible assets (note – 1 (l), 1(m), 1(n), 3, 5 and 6)
Estimates and Errors for new Ind AS/amendments issued but
not yet effective are as follows: • Estimation of defined benefit obligation (note – 1(s) and 35)

Ind AS 116 - Leases • Estimation of provision for warranty claims (note – 1(r) and 34)

Ind AS 116 will affect primarily the accounting by lessees and • Impairment of trade receivables (note – 1(j) and 12(a))
will result in the recognition of almost all leases on balance
• Recognition of revenue from contracts for installation and
sheet. The standard removes the current distinction between
commissioning of air conditioning system (note – 41)
STATUTORY REPORTS

operating and finance leases and requires recognition of an

asset (the right-of-use the leased item) and a financial liability • Provision for sales incentives schemes (note – 1(d) and 19(c))
to pay rentals for virtually all lease contracts. An optional
exemption exists for short-term and low-value leases. • Contingent liabilities (note – 1(r) and 32)

The statement of profit and loss will also be affected because • Current tax expense and payable (note – 1(f) and 31)
the total expense is typically higher in the earlier years of a
lease and lower in later years. Additionally, operating expense • Inventory obsolescence (note – 1(i) and 11)
will be replaced with interest and depreciation, so key metrics
Estimates and judgements are continually evaluated. They are
like EBITDA will change.
based on historical experience and other factors, including
COMPANY OVERVIEW

Operating cash flows will be higher as repayments of the lease expectations of future events that may have a financial impact on
liability and related interest are classified within financing the Company and that are believed to be reasonable under the
activities. circumstances.
 72
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 3: Property, plant and equipment

J in million
Freehold Leasehold Buildings Plant and Furniture Vehicles Office Electrical Computers Total
land Improvements Machinery and equipment Installations
fixtures
I. Gross carrying amount
Balance as at April 1, 2017 228.3 14.5 397.1 1,701.5 56.0 118.0 54.3 83.2 97.9 2,750.8
Additions - 7.1 16.7 190.8 31.3 25.3 30.3 22.6 8.4 332.5
Disposals - - - (12.0) (2.2) (17.5) (4.6) (2.1) (2.1) (40.5)
Transfer to Investment Property - - (1.0) - - - - - - (1.0)
Balance as at March 31, 2018 228.3 21.6 412.8 1,880.3 85.1 125.8 80.0 103.7 104.2 3,041.8
II. Accumulated depreciation
Balance as at April 1, 2017 - 3.2 18.2 301.9 11.1 19.7 13.5 14.4 25.8 407.8
For the year - 3.8 18.5 303.7 13.6 23.0 16.1 17.6 30.9 427.2
Disposals - - - (3.6) (0.9) (6.3) (2.6) (0.5) (1.1) (15.0)
Johnson Controls-Hitachi Air Conditioning India Limited

Transfer to Investment Property* - - - (0.0) - - - - - -

Balance as at March 31, 2018 - 7.0 36.7 602.0 23.8 36.4 27.0 31.5 55.6 820.0
Net carrying amount as at March 31, 2018 (I-II) 228.3 14.6 376.1 1,278.3 61.3 89.4 53.0 72.2 48.6 2,221.8

J in million
Freehold Leasehold Buildings Plant and Furniture Vehicles Office Electrical Computers Total
land Improvements Machinery and equipment Installations
fixtures
I. Gross carrying amount
Balance as at April 1, 2018 228.3 21.6 412.8 1,880.3 85.1 125.8 80.0 103.7 104.2 3,041.8
Additions - 7.7 7.6 208.2 22.3 30.0 18.9 19.4 13.8 327.9
Disposals - - (12.3) (19.3) (4.5) (21.4) (5.2) (1.0) (7.1) (70.8)
Balance as at March 31, 2019 228.3 29.3 408.1 2,069.2 102.9 134.4 93.7 122.1 110.9 3,298.9
II. Accumulated depreciation
Balance as at April 1, 2018 - 7.0 36.7 602.0 23.8 36.4 27.0 31.5 55.6 820.0
For the year - 5.2 17.9 234.2 15.5 22.5 17.7 20.1 22.2 355.3
Disposals - - (1.9) (7.5) (2.6) (11.0) (4.0) (0.4) (5.6) (33.0)
Balance as at March 31, 2019 - 12.2 52.7 828.7 36.7 47.9 40.7 51.2 72.2 1,142.3
Net carrying amount as at March 31, 2019 (I-II) 228.3 17.1 355.4 1,240.5 66.2 86.5 53.0 70.9 38.7 2,156.6

*Depreciation pertaining to Investment Property amounts to J 32,998

a. Building having gross block of J 7.3 million (excludes self constructed buildings on freehold land) is held in the erstwhile name of the Company. The Company has initiated the process
of getting title deeds updated with the present name of the Company viz. Johnson Controls-Hitachi Air Conditioning India Limited.
b. Refer Note 32(b) for disclosure of capital commitments in respect of acquisition of property, plant and equipment.
Annual Report 2018-19

c. No borrowing costs have been capitalised during the year ended March 31, 2019 and in the previous year ended March 31, 2018.
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 4: Capital work-in-progress

J in million
Balance as at March 31, 2018 15.8
Balance as at March 31, 2019 941.3

Note: Capital Work-in-progress as at March 31, 2019 mainly comprise of Plant and machinery and Building being constructed for Design
and development services.

Note 5: Investment property

J in million
Buildings As at As at
March 31, 2019 March 31, 2018
I. Gross carrying amount
Opening Balance 13.2 12.2
Transfer from Property, plant and equipment - 1.0
Closing Balance 13.2 13.2
II. Accumulated depreciation
Opening Balance 0.5 0.2
Depreciation charge for the year 0.3 0.3
Transfer from Property, plant and equipment - 0.0
Closing Balance 0.8 0.5
Net carrying amount (I-II) 12.4 12.7
73

(i) Amounts recognised in the Statement of profit and loss for investment properties

J in million
Year ended Year ended
March 31, 2019 March 31, 2018

FINANCIAL STATEMENTS
Rental Income 3.8 3.3
Profit from investment property before depreciation 3.8 3.3
Depreciation 0.3 0.3
Profit from investment property 3.5 3.0

(ii) Fair Value

J in million
As at As at
STATUTORY REPORTS

March 31, 2019 March 31, 2018

Investment Property (Buildings) 41.2 36.7

(iii) Estimation of fair value

Considering nature of properties, the Company obtains valuation for investment properties atleast annually. The best evidence of fair
value is current prices in an active market for similar properties in the area in which these properties are located adjusted for certain
factors. The fair value estimates for investment properties are categorised as level 3 as per Ind AS -113 - Fair value measurement.

(iv) Leasing arrangements

COMPANY OVERVIEW

Certain investment properties are leased to tenants under cancellable operating lease arrangement for a period of 11 months.
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Notes forming part of the Financial Statements

for the year ended March 31, 2019

Note 6:Intangible Assets

J in million
Software Licensed technical Total
and licenses Know-how
I. Gross carrying amount
Balance as at April 1, 2017 52.6 271.7 324.3
Additions 10.3 81.0 91.3
Disposals - - -
Balance as at March 31, 2018 62.9 352.7 415.6
II. Accumulated amortisation
Balance as at April 1, 2017 14.2 91.5 105.7
For the year 20.4 81.3 101.7
Balance as at March 31, 2018 34.6 172.8 207.4
Net carrying amount as at March 31, 2018 (I-II) 28.3 179.9 208.2

J in million
Software Licensed technical Total
and licenses Know-how
I. Gross carrying amount
Balance as at April 1, 2018 62.9 352.7 415.6
Additions 35.1 10.8 45.9
Disposals (29.8) - (29.8)
74 Balance as at March 31, 2019 68.2 363.5 431.7
II. Accumulated amortisation
Balance as at April 1, 2018 34.6 172.8 207.4
For the year 14.4 71.6 86.0
Disposals (14.9) - (14.9)
Balance as at March 31, 2019 34.1 244.4 278.5
Net carrying amount as at March 31, 2019 (I-II) 34.1 119.1 153.3

Note 7: Non-Current Financial assets

Note 7(a): Loans

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Security Deposits 44.4 42.0
Loans to employees 2.4 2.0
Total 46.8 44.0

Sub-classified as:

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Loans considered good - Secured - -
Loans considered good - Unsecured 46.8 44.0
Loans which have significant increase in credit risk - -
Loans - credit impaired - -
Total 46.8 44.0
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 7: Non-Current Financial assets (Contd..)

Note 7(b): Other non-current financial assets

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Unsecured, Considered good
Margin Money Deposits with Bank 2.7 2.4
Total 2.7 2.4
Note: Margin money deposit is pledged with government authority against legal matters.

Note 8: Deferred tax Assets (net)

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
The balance comprises temporary differences attributable to:
Deferred tax assets
Provision for doubtful debts 32.9 25.4
Provision for compensated absences 38.8 27.8
Provision for litigations 55.8 55.7
Provision for inventory obsolescence 70.3 79.3
Other disallowance 24.3 19.9
Total deferred tax assets 222.1 208.1 75
Deferred tax liability
Differences in block of fixed assets as per tax books and financial books (47.7) (62.2)
Others (8.4) (7.1)
Total deferred tax liabilities (56.1) (69.3)
Deferred Tax assets (net) 166.0 138.8

FINANCIAL STATEMENTS
Note: Deferred tax assets and deferred tax liabilities have been offset as they relate to same governing taxation law.

Note (a):Movement in deferred tax assets/liabilities

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Balance at the Beginning of the year 138.8 81.2
Deferred Tax Assets
STATUTORY REPORTS

Provision for doubtful debts 7.5 8.2

Provision for compensated absences 11.0 6.3
Provision for litigations 0.1 0.5
Provision for inventory obsolescence (9.0) 4.4
Other disallowance 4.4 (0.7)
Total 14.0 18.7
Deferred Tax Liabilities
Differences in block of fixed assets as per tax books and financial books 14.5 39.5
Others (1.3) (0.6)
Total 13.2 38.9
COMPANY OVERVIEW

Movement in Deferred tax assets (net) 27.2 57.6

Balance at the closing of the year 166.0 138.8
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Notes forming part of the Financial Statements

for the year ended March 31, 2019

Note 9: Non current Tax asset (Net)

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Advance income tax (Net of provision for taxation H 1,465.4 million (March 31 2018: 0.4 13.5
H 1,298.3 million))
Total 0.4 13.5

Note 10: Other non-current assets

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Capital advances 65.0 21.0
Indirect tax credit receivable 237.8 183.3
Tax paid against appeal 51.6 55.8
Total 354.4 260.1

Note 11: Inventories

(valued at cost and net realisable value whichever is lower)

76 J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Raw Material 1,568.7 1,466.7
(Including goods in transit H 363.3 million (March 31, 2018 H 182.9 million))
Work-in-progress 136.1 152.8
Finished goods 2,243.6 1,283.9
Stock-in-trade 1,498.9 1,417.3
(Including goods in transit H 229.9 million (March 31, 2018 H 119.1 million))
Stores and spares 107.4 100.3
Total 5,554.7 4,421.0

Amounts recognized in the Statement of profit and loss

Write-downs of inventories amounted to H 58.1 million (March 31, 2018 - H 122.5 million) during the year. These were recognized as an
expense during the year and included in ‘Changes in inventories of finished goods, Stock-in-Trade and work-in-progress' in the Statement
of profit and loss.

Note 12: Current financial assets

Note 12(a): Trade receivables

J in million
Particulars Year ended Year ended
March 31, 2019 March 31, 2018
Trade Receivables 4,575.0 4,191.4
Receivables from related parties (Refer Note 38) 290.4 23.8
Less: Allowance for doubtful trade receivables (94.2) (72.5)
Total 4,771.2 4,142.7
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 12: Current financial assets (Contd..)

Sub-classified as:

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Trade receivables considered good - Secured 26.7 18.5
Trade receivables considered good - Unsecured 4,787.8 4,155.0
Trade receivables which have significant increase in credit risk - -
Trade receivables - credit impaired 50.9 41.7
Total 4,865.4 4,215.2
Less: Allowance for doubtful trade receivables (94.2) (72.5)
Total 4,771.2 4,142.7
Note: Trade Receivable - credit impaired comprises of parties where the Company has initiated legal proceedings for recovery.

Note 12(b): Cash and cash equivalents

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Cash on hand* 0.0 0.1
Balance with banks :
In current accounts 272.6 333.0
In cash credit accounts 22.9 21.8 77
Total 295.5 354.9
*Cash on hand amounts to H 42,123 as at March 31, 2019.

Note 12(c) Bank balances other than cash and cash equivalents

FINANCIAL STATEMENTS
J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Unpaid Dividend 3.0 3.2
Total 3.0 3.2

Note 12(d): Loans

J in million
STATUTORY REPORTS

Year ended Year ended

March 31, 2019 March 31, 2018
Loans to employees 7.9 6.0
Security deposits 2.3 8.5
Total 10.2 14.5

Sub-classified as:

J in million
Year ended Year ended
COMPANY OVERVIEW

March 31, 2019 March 31, 2018

Loans considered good - Secured - -
Loans considered good - Unsecured 10.2 14.5
Loans which have significant increase in credit risk - -
Loans - credit impaired - -
Total 10.2 14.5
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Notes forming part of the Financial Statements

for the year ended March 31, 2019

Note 12: Current financial assets (Contd..)

Note 12(e):Other current financial assets

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Unsecured, considered good
Unbilled revenue - 145.3
Derivative contracts 4.5 8.7
Receivables from related parties (Refer Note 38) 117.9 51.2
Other receivables 2.5 0.1
Total 124.9 205.3

Note 13: Contract asset

J in million
As at As at
March 31, 2019 March 31, 2018
Unbilled revenue (Refer Note 41) 214.9 -
Total 214.9 -

Note 14: Other current assets

78
J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Advance to suppliers 46.8 67.8
Prepaid expenses 37.3 44.4
Balances with government authorities:
- GST (input tax credit) 721.6 281.4
- Others 47.1 106.1
Export incentive receivable 15.9 0.8
Employee Advance 0.7 1.6
Total 869.4 502.1

Note 15: Equity share capital

J in million
As at March 31, 2019 Year ended March 31, 2018
No. of shares Amount No. of shares Amount
Authorised
Equity shares of H 10 each 3,00,00,000 300.0 3,00,00,000 300.0
Issued, Subscribed and fully paid-up
Equity shares of H 10 each 2,71,90,884 271.9 2,71,90,884 271.9

The above excludes 47,281 (31 March 2018: 47,281) equity shares of H 10/- each relating to rights issue (2003-04 and 2013-14), which are
kept in abeyance since the matter is pending for disposal at City Civil Court, Kolkata.

(i) There is no movement in number of equity shares and the amount outstanding thereon during current year and previous year.

(ii) Rights, Preferences and Restrictions attached to Equity shares

The Company has only one class of equity shares having a face value of H 10/- per share. Each holder of equity shares is entitled
to one vote per share. The dividend recommended by the Board of Directors is subject to the approval of the Shareholders in the
ensuing Annual General Meeting, except in case of interim dividend.
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 15: Equity share capital (Contd..)

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the
shareholders.

(iii) Number of Shares of the Company held by holding Company or ultimate holding Company or subsidiaries of ultimate holding
Company

Particulars As at Year ended

March 31, 2019 March 31, 2018
JCHAC India Holdco Limited, UK - Holding Company 20,189,894 20,189,894
Johnson Controls Hitachi Air Conditioning Holding (UK) Limited - Subsidiary of 635 635
Ultimate Holding Company

(iv) Details of shareholders holding more than 5% of the Equity shares in the Company:

As at March 31, 2019 Year ended March 31, 2018

No. of shares % of holding No. of shares % of holding
JCHAC India Holdco Limited 20,189,894 74.25% 20,189,894 74.25%
Aditya Birla Sun Life Trustee Company Pvt Limited 2,440,982 8.98% 2,320,367 8.53%

(v) There were no shares bought back nor allotted either as fully paid up bonus shares or under any contract without payment being
received in cash during five years immediately preceding March 31, 2019.
79

Note 16: Other equity

J in million
Year ended Year ended
March 31, 2019 March 31, 2018

FINANCIAL STATEMENTS
Reserves and Surplus
(a) Securities premium (Note (i) below) 895.4 895.4
(b) General reserve (Note (ii) below) 229.8 229.8
(c) Capital reserve (Note (iii) below) 0.7 0.7
(d) Retained earnings
Opening Balance 3,954.2 3,004.5
Add: Profit for the year 859.4 1,001.5
Less: Dividend on equity shares (40.8) (40.8)
Less: Dividend Distribution tax (8.4) (8.3)
STATUTORY REPORTS

Items of Other Comprehensive Income (OCI) recognised directly in retained earnings:

Remeasurement of post employment benefit obligations gain/ (loss), net of taxes (32.3) (2.7)
Total retained earnings 4,732.1 3,954.2
Total 5,858.0 5,080.1

Notes:

(i) Securities premium is used to record the premium on issue of shares. It is to be utilized in accordance with the provisions of the Act.

(ii) General reserve represents amounts appropriated out of retained earnings in accordance with the provisions of the Act.
COMPANY OVERVIEW

(iii) Capital reserve has arisen mainly on account of re-issue of forfeited shares.
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Notes forming part of the Financial Statements

for the year ended March 31, 2019

Note 17: Non Current provisions

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Employee benefit obligations:
(i) Compensated absences (Refer Note 35) 115.3 81.7
(ii) Gratuity (Refer Note 35) 3.3 -
Provision for Litigation (Refer Note 34) 241.6 254.5
Provision for Warranty (Refer Note 34) 139.1 121.8
Total 499.3 458.0

Note 18: Other non-current liabilities

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Deferred Government Grant 124.1 31.5
Total 124.1 31.5

Note 19: Current financial liabilities

Note 19(a): Current Borrowing

80
J in million
As at As at
March 31, 2019 March 31, 2018
Unsecured
Working capital loans repayable on demand from bank 1,896.2 126.6
Total current borrowings 1,896.2 126.6
Note: Rate of interest range from 7.9% p.a to 8.25% p.a

Note 19(b):Trade payables

J in million
As at As at
March 31, 2019 March 31, 2018
Total outstanding dues of micro and small enterprises (Refer below) 164.1 183.8
Total Outstanding dues of creditors other than micro and small enterprises 5,244.1 4,774.3
Total 5,408.2 4,958.1

The Company has certain dues payable to suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006
(‘MSMED Act’). The disclosures pursuant to the said MSMED Act are as follows:

J in million
As at As at
March 31, 2019 March 31, 2018
Principal amount outstanding to suppliers registered under the MSMED Act and 164.1 183.8
remaining unpaid as at year end
Interest due on above principal amount payable to suppliers registered under the 0.8 0.4
MSMED Act and remaining unpaid as at year end
Principal amounts paid to suppliers registered under the MSMED Act, beyond the 467.7 262.8
appointed day during the year
Interest paid, under Section 16 of MSMED Act, to suppliers registered under the 1.4 -
MSMED Act, beyond the appointed day during the year
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 19: Current financial liabilities (Contd..)

J in million
As at As at
March 31, 2019 March 31, 2018
Interest paid, other than under Section 16 of MSMED Act, to suppliers registered - -
under the MSMED Act, beyond the appointed day during the year
Interest due and payable towards suppliers registered under MSMED Act, for 2.3 1.4
payments already made
Interest accrued and remaining unpaid at the end of each accounting year 3.1 1.8
Further interest remaining due and payable for earlier years 0.4 -

Note (a): The above information regarding dues payable to Micro and Small enterprises is compiled by management to the extent the
information is available with the Company regarding the status of suppliers as Micro and Small enterprises.

Note (b): The amount debited to the Statement of profit and loss for the year ended March 31, 2019 is H 2.7 million (March 31, 2018
H 1.4 million)

Note 19(c) Other financial liabilities

J in million
As at As at
March 31, 2019 March 31, 2018
Amount due to customers - 30.2
Deposit from dealers and others 28.2 20.5 81
Payable for capital supplies 188.9 28.3
Derivative contracts 25.2 0.7
Unclaimed Dividends * 3.0 3.2
Refund liability (Payable for Discount to Customers) 342.6 442.9
Total 587.9 525.8

FINANCIAL STATEMENTS
* There are no amounts due for payment to the Investor Education and Protection Fund under Section 125 of the Companies Act, 2013 as at the year end.

Note 20: Contract Liabilities

J in million
As at As at
March 31, 2019 March 31, 2018
Advance received from customers 190.5 -
Deferred Income pertaining to annual maintenance contracts 89.1 -
STATUTORY REPORTS

Liabilities for contract in progress 20.3 -

Total 299.9 -

Note 21: Current provisions

J in million
As at As at
March 31, 2019 March 31, 2018
Provision for compensated absences (Refer Note 35) 21.6 22.1
Provision for Warranty (Refer Note 34) 128.7 147.8
COMPANY OVERVIEW

Total 150.3 169.9

 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Notes forming part of the Financial Statements

for the year ended March 31, 2019

Note 22: Current tax Liability (Net)

J in million
As at As at
March 31, 2019 March 31, 2018
Income tax Liability (Net of advance tax H 464.9 million (31 March 2018: 6.0 58.4
H 512.6 million)
Total 6.0 58.4

Note 23: Other current liabilities

J in million
As at As at
March 31, 2019 March 31, 2018
Employee related payables 119.9 80.4
Statutory dues 442.7 513.3
Advance received from customers - 186.9
Deferred Income pertaining to annual maintenance contracts - 83.7
Deferred Government Grant 13.3 16.4
Total 575.9 880.7

Note 24: Revenue from operations

82 J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Revenue from contract with customers (Refer Note: 41)*
Sale of Products
- Manufactured Goods 14,716.1 14,116.3
- Traded Goods 6,118.3 7,150.8
20,834.4 21,267.1
Sales of services 1,396.3 1,158.8
Other operating revenues 182.3 156.8
Total 22,413.0 22,582.7
*Goods and Services Tax (GST) which is effective from July 01, 2017 has replaced excise duty and certain other indirect taxes. In accordance with the requirements of
Ind AS, revenue from operations upto June 30, 2017 is inclusive of Excise Duty and revenue from operation from July 1, 2017 is net of GST. Accordingly, the adjusted
revenue from operations (i.e. net of GST and excise duty, as applicable) for comparable purpose is as under:

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Revenue from operations (Net of GST and Excise Duty, as applicable) 22,413.0 21,853.9

Reconciliation of revenue recognised with contract price:

J in million
Year ended
March 31, 2019
Contract Price 23,960.9
Adjustment for:
Incentives and performance bonus (1,547.9)
Revenue recognised 22,413.0
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 25: Other Income

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Interest income :
- from banks on term deposits 68.3 26.4
- from others 2.9 8.5
Lease rent income 3.9 3.6
Government Grants 13.3 15.3
Miscellaneous income 65.8 20.1
Total 154.2 73.9

Note 26: Changes in inventories of finished goods, Stock-in-trade and work-in-progress

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Inventories at the end of the year
Work-in-progress 136.1 152.8
Finished goods 2,243.6 1,283.9
Stock-in-trade 1,498.8 1,417.3
(A) 3,878.5 2,854.0
Inventories at the beginning of the year 83
Work-in-progress 152.8 237.5
Finished goods 1,283.9 1,583.5
Stock-in-trade 1,417.3 1,208.7
(B) 2,854.0 3,029.7
Excise duty on (Increase) / decrease of inventories - (251.4)
Total (1,024.5) (75.7)

FINANCIAL STATEMENTS
Note 27: Employee benefit expense
J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Salaries, wages and bonus 1,437.2 1,213.0
Contribution to provident and other funds (Refer Note 35) 94.6 84.9
Workmen and Staff welfare expense 119.7 111.9
STATUTORY REPORTS

Total 1,651.5 1,409.8

Note 28: Finance costs

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Interest Cost on borrowings at amortised cost 16.5 11.4
Interest due and payable towards suppliers registered under MSMED Act 2.7 1.4
COMPANY OVERVIEW

Unwinding of interest on provisions 7.7 7.0

Total 26.9 19.8
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Notes forming part of the Financial Statements

for the year ended March 31, 2019

Note 29: Depreciation and amortization expenses

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Depreciation of property, plant and equipment (Refer Note 3) 355.3 427.2
Depreciation on investment property (Refer Note 5) 0.3 0.3
Amortization of intangible assets (Refer Note 6) 86.0 101.7
Total 441.6 529.2

Note 30: Other expenses

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Consumption of stores and spares 50.3 27.7
Power and fuel 95.0 84.7
Contract labour / staff charges 506.7 470.8
Rent (Refer Note 39) 432.2 379.9
Repairs and maintenance - Building 14.1 7.1
Repairs and maintenance - Machinery 41.5 29.6
Repairs and maintenance - Others 16.9 46.4
Insurance 43.1 52.0
84 Rates and taxes 6.3 27.0
Royalty 439.7 434.4
Advertisement and sales promotion (net of recoveries) 645.2 716.4
Annual Maintenance Contract (AMC) expenses 336.4 289.2
Freight and forwarding expenses 823.6 795.4
Warranty expenses 430.5 401.7
Legal and professional fees 98.6 93.2
Corporate Social Responsibility expenses [Refer Note 30(b)] 23.1 14.7
Provision for doubtful debts 21.7 22.9
Bad Debt 11.7 10.5
Payment to Auditors [Refer Note 30(a)] 5.2 4.0
Net loss on sale of fixed assets - 2.0
Loss on foreign exchange fluctuations (net) 66.2 59.3
Miscellaneous expenses 576.6 561.5
Total 4,684.6 4,530.4

Note 30(a): Details of payment to auditors

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Payments to auditors:
- As auditors 3.3 3.3
- For other audit services 1.8 0.6
- Reimbursement of expenses 0.1 0.1
Total 5.2 4.0
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 30: Other expenses

Note 30(b): Corporate social responsibility expenses
J in million
Year ended Year ended
March 31, 2019 March 31, 2018
(a) Gross amount required to be spent by the Company : 22.8 19.4
(b) Amount spent :
In cash
(i) Construction/acquisition of any asset 14.7 -
(ii) On purposes other than (i) above 8.4 14.7
* The company has paid H 22.1 million (March 31, 2018 - H 13.0 million) and balance H 1.0 million (March, 31, 2018 - H 1.7 million) is provided
at the year end.

Note 31: Current and Deferred Tax

Note 31(a): Movement of Current tax expense

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Tax Expenses
Current tax
Current tax on profits for the year 488.2 572.5
85
Adjustments for current tax of prior periods 3.3 (2.8)
Total current tax expense 491.5 569.7
Decrease / (increase) in deferred tax assets (14.0) (18.7)
(Decrease) / increase in deferred tax liabilities (13.2) (38.9)
Total deferred tax expense/(credit) (27.2) (57.6)
Tax expenses 464.3 512.1

FINANCIAL STATEMENTS
Note 31 (b): Income Tax of H 17.3 million (March 31, 2018 - H 1.5 million) has been recognised in other comprehensive income on account
of actuarial remeasurements of post employment benefit obligations.

No aggregate amounts of current and deferred tax have arisen in the reporting periods which have not been recognized in net profit or
loss or other comprehensive income but directly debited/ (credited) to equity.

Note 31 (c): The reconciliation between the statutory income tax rate applicable to the Company and the effective income tax rate of
the Company is as follows:
STATUTORY REPORTS

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Profit before tax from continuing operations 1,323.7 1,513.6
Rate of income tax 34.944% 34.608%
Income tax expenses 462.5 523.8
Differences due to:
Expenses not deductible for tax purposes 8.5 5.7
Additional deduction for Research and Development expenses (7.2) (18.6)
COMPANY OVERVIEW

Income exempt from income tax or taxable at concessional rate (0.4) (0.3)
Others 0.9 1.5
Expense recognised 464.3 512.1
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Notes forming part of the Financial Statements

for the year ended March 31, 2019

Note 32: Contingent liabilities, contingent assets & commitments

(a) Contingent liabilities

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Legal matters under dispute :
Service tax 190.5 156.1
Sales tax 97.6 89.5
Excise duty 11.7 14.4
Goods & Services tax 0.9 -
Guarantees given by the bankers on behalf of the Company 2.5 2.9
Claims against the Company not acknowledged as debts 7.3 5.4
Bonus liability pertaining to financial year 2014-15 5.8 5.8
Total 316.3 274.1

1. Legal matters under dispute:

The Company is contesting the demands and the management believes that its position is likely to be upheld in the appellate process.
It is not practicable to estimate the timing of cash outflows, if any, in respect of legal matters, pending resolution of the proceedings
with the appellate authorities.

2. Bonus liability: Based on stay order of Gujarat High Court dated April 5, 2016, the Company has not provided bonus liability for 2014-
86 15.

3. The Company is in the process of evaluating the impact of the recent Supreme Court Judgment in case of "Vivekananda Vidyamandir
And Others Vs The Regional Provident Fund Commissioner (II) West Bengal" and the related circular (Circular No. C-I/1(33)2019/
Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employees’ Provident Fund Organisation in relation to non-
exclusion of certain allowances from the definition of "basic wages" of the relevant employees for the purposes of determining
contribution to provident fund under the Employees' Provident Funds & Miscellaneous Provisions Act, 1952. In the assessment of the
management, the aforesaid matter is not likely to have a significant impact.

(b) Capital commitments

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Estimated value of contracts in capital account remaining to be executed and 435.5 38.7
not provided for (net of advances)
Total 435.5 38.7

(c) Other commitments

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
The Company has imported Capital Goods under the Export Promotion Capital 354.3 566.6
Goods Scheme, of the Government of India, at concessional rates of duty on an
undertaking to fulfil quantified exports within specified years. Export obligation
outstanding at the year end is:
Total 354.3 566.6

(d) There are no contingent assets recognised as at the year end (March 31, 2018 - Nil)
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 33: Research and Development

Details of expenditure incurred on approved in-house Research and Development facility:

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Capital expenditure 0.5 5.5
Revenue expenditure 36.6 93.2
Balance at end of year 37.1 98.7

Note: Incurred in respect for cooling products for comfort and commercial use.

Note 34: Provisions

(i) Information about provisions:

Provision for Warranty

The Company gives one year complete warranty (service and parts), 2 year warranty on parts, 5 year warranty on controllers and 5/10
years warranty on compressors at the time of sale to the ultimate customer of its products. It is expected that the most of expenses
against the provision will be incurred within warranty period, as the case may be.

Provision for litigations

Provision for litigations include likely claims against the Company in respect of certain legal matters like VAT, Service tax, excise duty, 87
etc., whose outcome depends on ultimate settlement / conclusion with relevant authorities.

(ii) Movement in provisions:

Movement in each class of provision during the financial year, are set out below:

FINANCIAL STATEMENTS
J in million
Provision for Provision for Total
Warranty litigations
As at April 1, 2017 236.3 249.1 485.4
Charged/(credited) to profit or loss -
-additional provision recognized 173.9 5.4 179.3
-unused amounts reversed (4.6) - (4.6)
-unwinding of discount 7.0 - 7.0
Amounts used during the year (143.0) - (143.0)
STATUTORY REPORTS

As at March 31, 2018 269.6 254.5 524.1

Charged/(credited) to profit or loss
-additional provision recognized 172.2 - 172.2
-unused amounts reversed (4.3) (12.9) (17.2)
-unwinding of discount 7.7 - 7.7
Amounts used during the year (177.4) - (177.4)
As at March 31, 2019 267.8 241.6 509.4

Note:Provision for warranty during the year and utilization do not include H 262.6 million for the year ended March 31, 2019
(March 31, 2018 - H 232.4 million) contractually payable to dealers and service providers to meet warranty cost.
COMPANY OVERVIEW
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Notes forming part of the Financial Statements

for the year ended March 31, 2019

Note 35: Employee benefit obligations

(a) Compensated absences

The Compensated absences covers the liability for privilege leave and sick leave. The classification of compensated absences into
current and non-current is based on the report of independent actuary.

(b) Post employment obligations

Defined contribution plans

The Company contributes to defined contribution plan viz., employees' provident fund / pension fund, employees state insurance
and superannuation fund. The obligation of the Company is limited to the amount contributed and it has no further contractual or
constructive obligation.

The expense recognized during the year towards defined contribution plan is as under:

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Employer’s Contribution to Provident fund 53.5 47.2
Employer’s Contribution to Employee State Insurance 5.7 7.5
Employer’s Contribution to Superannuation fund 13.3 9.6
Total 72.5 64.3

Note : The above amount does not include administrative charges.

88
Defined benefit plans

Gratuity

The Company provides gratuity to employees in India. Employees who are in continuous service for a period of 5 years are eligible
for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed
proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan. The scheme is
funded with Life Insurance Corporation in the form of a qualifying insurance policy.

The amount recognized in the balance sheet and movement of defined benefit obligation for the year are as follows:

J in million
Present value Fair value of Net amount
of obligation plan assets

April 1, 2017 129.1 (128.2) 0.9

Current service cost 17.7 - 17.7
Interest expense/(income) 9.0 (9.0) -
Total amount recognized in the Statement of Profit and Loss 26.7 (9.0) 17.7
Remeasurements
Return on plan assets, excluding amounts included in interest - 1.7 1.7
expense/(income)
(Gain )/loss from change in financial assumptions (7.6) - (7.6)
Experience (gains)/losses 10.1 - 10.1
Total amount recognized in Other comprehensive income 2.5 1.7 4.2
Employer contributions - (18.3) (18.3)
Benefit payments (15.7) 11.2 (4.5)
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 35: Employee benefit obligations (Contd..)

J in million
Present value Fair value of Net amount
of obligation plan assets

March 31, 2018 142.6 (142.6) -

Current service cost 19.0 - 19.0
Interest expense/(income) 10.7 (11.1) (0.4)
Total amount recognized in the Statement of Profit and Loss 29.7 (11.1) 18.6
Remeasurements
Return on plan assets, excluding amounts included in interest - 4.9 4.9
expense/(income)
(Gain )/loss from change in demographic assumptions (3.1) - (3.1)
(Gain )/loss from change in financial assumptions 35.4 - 35.4
Experience (gains)/losses 12.4 - 12.4
Total amount recognized in Other comprehensive income 44.7 4.9 49.6
Employer contributions - (66.9) (66.9)
Benefit payments (5.4) 7.4 2.0
March 31, 2019 211.6 (208.3) 3.3

The net liability disclosed above relates to funded plan is as follows:

J in million
Year ended Year ended 89
March 31, 2019 March 31, 2018
Fair value of plan assets (208.3) (142.6)
Present value of funded obligation 211.6 142.6
Surplus/(Deficit) of gratuity plan 3.3 -

FINANCIAL STATEMENTS
Categories of plan assets are as follows:

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Insurer managed fund 208.3 142.6
Total 208.3 142.6

Significant estimates: Actuarial assumptions and sensitivity

STATUTORY REPORTS

The significant actuarial assumptions were as follows:

Year ended Year ended

March 31, 2019 March 31, 2018
Discount rate (p.a.) 7.65% 7.85%
Salary growth rate (p.a.) Operators : 15% for 7.00%
first 4 years, 8%
thereafter,
Others : 7.5%
COMPANY OVERVIEW
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Notes forming part of the Financial Statements

for the year ended March 31, 2019

Note 35: Employee benefit obligations (Contd..)

Sensitivity analysis

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:

J in million
Defined benefit obligation Year ended Year ended
March 31, 2019 March 31, 2018
Discount rate (Change in assumptions)
Increase by 1% 189.6 132.1
Decrease by 1% 221.0 154.6
Salary growth rate (Change in assumptions)
Increase by 1% 237.3 154.6
Decrease by 1% 176.3 131.9

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is
unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit
obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the
projected unit credit method) has been applied as when calculating the defined benefit liability recognized in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

Risk Exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed as below:
90
Investment risk : If the actual return on plan assets were below the return anticipated on the basis of the discount rate, the net
defined benefit obligation would increase, assuming there were no changes in other parameters. This could happen as a result of a
drop in return by Life Insurance Corporation.

Interest-rate risk: A decrease in the market yields in the government bond will increase the plan liability; however, this will be
partially offset by an increase in the return on the plan's debt investments.

Demographic risk: The gratuity plan provides a lump sum payment to vested employees at the time of retirement, death, incapacitation
or termination of employment. Change in attrition rate or mortality assumption as compared to actual rate may result in change in
benefit obligations, benefit expense and/ or payments than previously anticipated.

Salary escalation: The present value of defined benefit plan liability is calculated considering future salaries of plan participants. As
such, an increase in the salary of the plan participants will increase the plan's liability.

Defined benefit liability and employer contributions

Expected contributions to post-employment benefit plans for the year ending March 31, 2020 is H 12.6 million, (March 31, 2019 -
H 12.5 million)

The weighted average duration of the defined benefit obligation is 14.52 years (March 31, 2018 – 9.67 years). The expected maturity
analysis of undiscounted gratuity benefits is as follows:

J in million
Duration Year ended Year ended
March 31, 2019 March 31, 2018
Less than a year 12.6 12.5
Between 1-2 years 10.9 15.4
Between 2-5 years 27.9 36.4
Over 5 years 91.8 68.1
The above disclosure of obligation is limited to outflows over the period of 10 years.
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 36: Fair value measurements

(i) Classification of Financial Instruments

This section mentions the classification of financial instruments as under:

J in million
Year ended March 31, 2019 Year ended March 31, 2018
FVPL FVOCI Amortised FVPL FVOCI Amortised
cost cost
Financial assets
Trade Receivables - - 4,771.2 - - 4,142.7
Loans to Employees - - 10.3 - - 8.0
Unbilled revenue - - - - - 145.3
Derivative Contracts 4.5 - - 8.7 - -
Other receivables - - 120.4 - - 51.3
Margin money deposits - - 2.7 - - 2.4
Security deposits - - 46.7 - - 50.5
Cash and cash equivalents - - 295.5 - - 354.9
Bank balances other than Cash and cash - - 3.0 - - 3.2
equivalents above
Total financial assets 4.5 - 5,249.8 8.7 - 4,758.3
Financial liabilities
Borrowings - - 1,896.2 - - 126.6
Trade payables - - 5,408.2 - - 4,958.1 91
Deposit from dealers and others - - 28.2 - - 20.5
Capital Creditors - - 188.9 - - 28.3
Unclaimed dividends - - 3.0 - - 3.2
Amount due to customers - - - - - 30.2
Derivative Contracts 25.2 - - 0.7 - -

FINANCIAL STATEMENTS
Refund liability (Payable for discount to customer) - - 342.6 - - 442.9
Total financial liabilities 25.2 - 7,867.1 0.7 - 5,609.8

(ii) Fair value hierarchy

This section explains the judgements & estimates made in determining the fair value of the financial instruments. The fair value
of financial instruments as referred to in note above have been classified into three categories depending on the inputs used in
the valuation technique. The hierarchy gives the highest priority to quoted prices in active market for identical assets or liabilities
(level 1 measurements) and lowest priority to unobservable inputs (level 3 measurements).
STATUTORY REPORTS

(a) Only derivative contracts are measured at fair value. These derivative contracts are categorised as Level 2 financial
instruments.

(b) Assets and liabilities which are measured at amortised cost for which fair values are disclosed.

For all financial instruments referred above that have been measured at amortised cost, their carrying values are reasonable
approximations of their fair values. These are classified as level 3 financial instruments.

There were no transfers between Level 1, Level 2 and Level 3 during the year.
COMPANY OVERVIEW

The categories used are as follows:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the counter derivatives)
is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-
specific estimates. Considering that all significant inputs required to fair value such instruments are observable, these are included in
level 2.
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Notes forming part of the Financial Statements

for the year ended March 31, 2019

Note 36: Fair value measurements (Contd..)

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

(iii) Valuation technique used to determine fair value of financial instruments

- Measured at FVPL / FVOCI

The fair value of derivative contracts is determined using counterparty quote based on forward exchange rates as at the
balance sheet date.

- Measured at amortised cost

The carrying amounts of current financial assets and liabilities are considered to be the same as their fair values due to short-term
nature of such balances and no material differences in the values. Difference between fair value of non-current financial instruments
carried at amortised cost and the carrying value is not considered to be material to the financial statement.

(iv) Valuation processes

The finance department of the Company includes a team that performs the valuations of financial assets and liabilities required for
financial reporting purposes, including level 3 fair values. This team reports directly to the Chief Financial Officer (CFO).

Note 37: Financial risk management and Capital management

Financial risk management

92 The Company's activities expose it to variety of financial risks namely market risk, credit risk and liquidity risk. The Company has various
financial assets such as deposits, trade and other receivables and cash and bank balances directly related to their business operations. The
Company's principal financial liabilities comprise of trade and other payables. The Company's senior management's focus is to foresee the
unpredictability and minimize potential adverse effects on the Company's financial performance. The Company's overall risk management
procedures to minimise the potential adverse effects of financial market on the Company's performance are as follows :

The Company’s Board of Directors have overall responsibility for the establishment and oversight of the Company’s risk management
framework.

The Company’s risk management is carried out by the management in consultation with the Board of Directors. The Board provides
principles for overall risk management, as well as policies covering specific risk areas.

Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, unbilled revenue, derivative
financial instruments, cash and cash equivalents, bank deposits and other financial assets.

This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.

(A) Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Company’s receivables from customers and from deposits with banks and
other financial instruments.

i) Trade receivables

The carrying amount of trade receivables represent the maximum credit exposure net of provision for impairment. The maximum
exposure to credit risk was H 4,771.2 million as of March 31, 2019 (March 31, 2018 - H 4142.7 million).

Trade receivables are derived from revenue earned from customers. Credit risk for trade receivable is managed by the Company
through credit approvals, establishing credit limits and periodic monitoring of the creditworthiness of its customers to which the
Company grants credit terms in the normal course of business. Trade receivables are typically unsecured and are derived from
revenue earned from customers primarily located in India. Additionally, the Company has granted corporate guarantees to bank
against the credit facilities availed by customers amounting to H 150.0 million (March 31, 2018 - H 150.0 million). This is not considered
significant component to the overall operations of the Company.
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 37: Financial risk management and Capital management (Contd..)

The Company does not have a high concentration of credit risk to a single customer exceeding 10% of company revenue. Single
largest customer have the total exposure in receivables of H 237.0 million as of March 31, 2019 (March 31, 2018 - H 360.8 million).

The Company uses the Expected Credit Loss (ECL) model to assess the impairment gain or loss. As per ECL simplified approach, the
Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into
account a continuing credit evaluation of Company's customers’ financial condition; aging of trade accounts receivable; the value and
adequacy of collateral received from the customers in certain circumstances (if any); the Company's historical loss experience; and
adjustment based on forward looking information. The Company defines default as an event when there is no reasonable expectation
of recovery.

The movement in the allowance for impairment in respect of trade receivables follows:

J in million
As at As at
March 31, 2019 March 31, 2018
Balance at the beginning 72.5 49.6
Impairment loss recognised/(reversed) 33.4 33.4
Amounts written off (11.7) (10.5)
Balance at the end 94.2 72.5

ii) Cash and cash equivalents, bank balances, bank deposits, unbilled revenue and other financial assets

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was
93
H 483.1 million and H 624.3 million as at March 31, 2019 and March 31, 2018, respectively, being the total of the carrying amount of
balances with banks, bank deposits, unbilled revenue and other financial assets. The bank balances and deposits are held with banks
having high credit rating. None of the other financial instruments of the Company result in material concentration of credit risk.

(B) Management of Liquidity risk

FINANCIAL STATEMENTS
Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company’s
approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring
unacceptable losses. In doing this, management considers both normal and stressed conditions. A material and sustained shortfall in
cash flow could undermine the Company’s credit rating and impair investor confidence.

Maturities of financial liabilities

The following table shows the maturity analysis of the Company's financial liabilities based on contractually agreed undiscounted cash
flows as at the Balance sheet date:
STATUTORY REPORTS

J in million
As at March 31, 2019 Note Carrying Less than More than Total
No. amount 12 months 12 months
Non derivatives
Current Borrowings 19 (a) 1,896.2 1,896.2 - 1,896.2
Trade payables 19 (b) 5,408.2 5,408.2 - 5,408.2
Deposits from dealers and others 19 (c) 28.2 28.2 - 28.2
Payable for capital suppliers 19 (c) 188.9 188.9 - 188.9
Unclaimed dividends 19 (c) 3.0 3.0 - 3.0
Refund liabilities (Payable for Discounts to customers) 19 (c) 342.6 342.6 - 342.6
COMPANY OVERVIEW

Derivatives
Derivative contracts 19 (c) 25.2 25.2 - 25.2
Total liabilities 7,892.3 7,892.3 - 7,892.3
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Notes forming part of the Financial Statements

for the year ended March 31, 2019

Note 37: Financial risk management and Capital management (Contd..)

J in million
As at March 31, 2018 Note Carrying Less than More than Total
No. amount 12 months 12 months
Non derivatives
Current Borrowings 19 (a) 126.6 126.6 - 126.6
Trade payables 19 (b) 4,958.1 4,958.1 - 4,958.1
Deposits from dealers and others 19 (c) 20.5 20.5 - 20.5
Payable for capital suppliers 19 (c) 28.3 28.3 - 28.3
Unclaimed dividends 19 (c) 3.2 3.2 - 3.2
Amount due to customers 19 (c) 30.2 30.2 - 30.2
Refund liabilities (Payable for Discounts to customers) 19 (c) 442.9 442.9 - 442.9
Derivatives
Derivative contracts 19 (c) 0.7 0.7 - 0.7
Total liabilities 5,610.5 5,610.5 - 5,610.5

(C) Market Risk

Market risk comprises of foreign currency risk and interest rate risk. Interest rate risk arises from variable rate borrowings that
expose the Company's financial performance, financial position and cash flows to the movement in market rates of interest. Foreign
currency risk arises from transactions that are undertaken in a currency other than the functional currency of the Company. Further,
the financial performance and financial position of the Company is exposed to foreign currency risk that arises on outstanding
receivable and payable balances at a reporting year end date.
94
Foreign currency risk

The fluctuation in foreign currency exchange rates may have potential impact on the Statement of profit and loss.

Considering the economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in
foreign currency exchange rates. The risks primarily relate to fluctuations in US Dollar (USD) and Japanese Yen (JPY) to the functional
currency (H) of the Company.

The Company, as per risk management policy, uses forward exchange derivative contracts to hedge foreign currency risk. The
Company evaluates the impact of foreign exchange rate fluctuations by assessing exposure to exchange rate risks. It hedges a part
of these risks by using derivative financial instruments in line with risk management policies. The foreign exchange rate sensitivity
is calculated by aggregation of the net foreign exchange exposure and a simultaneous parallel foreign exchange rate shift of USD by
5% and JPY by 5% against the functional currency of the Company.

The Company undertakes import and export transactions which expose the Company to foreign currency risk. It imports capital
goods, raw materials, components, spare parts and stock-in-trade.

The Company's foreign currency exposure arises mainly from foreign currency imports. As at the end of the reporting period, the
carrying amount of the Company's foreign currency denominated monetary assets and liabilities in respect of various foreign currency
and derivative to hedge the exposure is as follows:

Foreign currency exposure

J in million
As at March 31, 2019 As at March 31, 2018
USD JPY Others USD JPY Others
Assets
Trade Receivables 313.7 - - 2.9 - -
Other financial assets 117.9 - - 51.2 - -
431.6 - - 54.1 - -
Liabilities
Trade Payable 1,700.8 20.0 1.9 1,077.7 16.6 -
Other financial liabilities 31.7 - 26.8 8.0 1.6 4.2
1,732.5 20.0 28.7 1,085.7 18.2 4.2
Derivative to hedge exposure
Forward contracts (Buy) 1,512.8 - - 1,029.6 - -
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 37: Financial risk management and Capital management (Contd..)

Sensitivity - Foreign Currency

The sensitivity of profit or loss to changes in the exchange rates is as follows:

J in million
Increase / (decrease) in profit after tax
March 31, 2019 March 31, 2018
USD Sensitivity
Depreciation of H against USD by 5% (31 March 2018 - 5%)* 6.9 (0.1)
Appreciation of H against USD by 5% (31 March 2018 - 5%)* (6.9) 0.1
JPY Sensitivity
Depreciation of H against JPY by 5% (31 March 2018 - 4%)* (0.5) (0.5)
Appreciation of H against JPY by 5% (31 March 2018 - 4%)* 0.5 0.5
* Holding all other variables constant

Interest rate risk

The Company's short term borrowings are primarily in fixed rate interest bearing borrowings. Hence, the Company is not significantly
exposed to interest rate risk.

Capital management

(a) Risk management

95
The Company considers the following components of its balance sheet to be managed as capital:

Total equity as shown in the balance sheet includes share capital, general reserve, retained earnings, capital reserve & securities
premium.

The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise

FINANCIAL STATEMENTS
returns to shareholders. The capital structure of the Company is based on management’s judgement of the appropriate balance
of key elements in order to meet its strategic and day-to day needs. The Company considers the amount of capital in proportion
to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying
assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders,
return capital to shareholders or issue new shares.

The Company's policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor,
creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate
steps in order to maintain, or if necessary adjust, its capital structure. The Company is not subject to financial covenants in any
STATUTORY REPORTS

of its significant financing agreements.

The Board of directors monitors the return on capital as well as the level of dividends to shareholders. The Company’s goal is
to continue to be able to provide return to shareholders by continuing to distribute dividends in future periods. Refer the below
note for dividend declared and paid.
COMPANY OVERVIEW
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Notes forming part of the Financial Statements

for the year ended March 31, 2019

Note 37: Financial risk management and Capital management (Contd..)

(b) Dividend

J in million
March 31, 2019 March 31, 2018
Equity shares
Final Dividend for the year ended March 31, 2018 - H 1.5 (March 31, 2017 - 40.8 40.8
H 1.5) per fully paid-up share
Dividends not recognised at the end of the reporting period
In addition to the above dividends, since year end, the directors have 40.8 40.8
recommended the payment of a final dividend of H 1.5 per fully paid-up
equity share (March 31, 2018 – H 1.5). This proposed dividend is subject to
the approval of shareholders in the ensuing annual general meeting.

Note 38: Related party disclosure (As per Ind AS -24)

I Relationship

A. Parties exercising control Ultimate Parent

Johnson Controls International PLC, Inc., USA (JC)
Intermediate parent
Johnson Controls, Inc., USA
Immediate Parent
96 JCHAC India Holdco Limited, UK
B. Parties under common control (Fellow Subsidiaries) Johnson Controls-Hitachi Air Conditioning Technology (Honkong)
Ltd., Hong kong
Johnson Controls-Hitachi Components ( Thailand ) Co. Ltd., Thailand
Johnson Controls Hitachi Air Conditioning Malaysia Sdn. Bhd., Malaysia
Johnson Control International (L.L.C).,(UAE)
Johnson Controls India Pvt. Ltd., India
Johnson Controls Marine And Refrigeration India Limited, India
(merged with Johnson Controls India Pvt. Ltd w.e.f. August 24, 2018
Johnson Controls-Hitachi Air Conditioning Spain, S.A.U, Spain
Johnson Controls-Hitachi Air Conditioning Wuhu Co. Ltd., China
Johnson Controls-Hitachi Air Conditioning & Refrifration INC., Dubai
Johnson Controls-Hitachi Wanbao Air Conditioning Guangzhou Co.
Ltd., China
Johnson Controls Hitachi Air Conditioning Holding (UK) Ltd, United
Kingdom
Johnson Controls (S) PTE Ltd., Singapore
Johnson Controls Technology Company (JCTC).,(USA)
Johnson Controls technology GmbH, Switzerland
Johnson Controls-Hitachi Air Conditioning Technology (Wuxi) Co.
Ltd., China
Johnson Controls-Hitachi Air Conditioning Taiwan Co. Ltd., Taiwan
Hitachi Johnson Controls Air Conditioning Inc., Japan
Rola Star Pvt. Limited, India
Ruskin Titus India Pvt. Limited, India
C. Associate/Joint Venture in JC Group Shanghai Hitachi Electrical Appliances Co. Ltd., China
Highly Electrical Appliances India Pvt. Ltd.
D. Associates Entities having significant influence over the Company
Hitachi Appliances Inc., Japan
Subsidiaries of entities having significant influence over the
Company
Hitachi Automotive System (India) Pvt. Limited
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 38: Related party disclosure (As per Ind AS -24) (Contd..)
Hitachi Consumer Marketing Inc.
Hitachi Consumer Products (Thailand) Ltd.
Hitachi High Technologies Hong Kong Ltd.
Hitachi High- Technologies India Pvt. Ltd.
Hitachi High-Technologies ( Shanghai ) Co. Ltd.
Hitachi High-technologies (Shenzhen) Co. Ltd
Hitachi High-Technologies Corporation
Hitachi Hirel Power Electronics Pvt. Ltd.
Hitachi Home Electronics Asia(s) Pte. Limited
Hitachi India Pvt. Ltd.
Hitachi Koki India Ltd.
Hitachi Lift India Pvt. Ltd.
Hitachi Metals (India) Pvt. Limited
Hitachi Metals Singapore Pte Ltd.
Hitachi Payment Services Pvt. Ltd
Hitachi Procurement Service Co. Ltd.
Hitachi Systems Micro Clinic Pvt Ltd.
Qingdao Hisense Hitachi Air- Conditioning Systems Co. Ltd
Taiwan Hitachi Co. Ltd.
Tata Hitachi Construction Machinery Company Pvt. Ltd.
E. Key Managerial Personnel Mr. Gurmeet Singh (Chairman and Managing Director)
Mr. Franz Cerwinka (Non-executive non-independent Director)
Mr. Yoshikazu Ishihara (Director) (With effect from 30 January 2018) 97
Mr. Mukesh Patel (Independent Director)
Mr. Ashok Balwani (Independent Director)
Ms. Indira Parikh (Independent Director)
Mr. Vinay Chauhan (Executive Director) (upto January 30, 2018)
Mr. Varghese Joseph (Executive Director) (upto January 30, 2018)

FINANCIAL STATEMENTS
Mr. Devender Nath (Independent Director) (upto January 30, 2018)
Mr. Ravindra Jain (Independent Director) (upto January 30, 2018)
Mr. R S Mani (Independent Director) (upto January 30, 2018)
Mr. Vinesh Sadekar (Independent Director) (upto January 30, 2018)

F. Post employment benefit plan of Johnson Controls-Hitachi Air Conditioning India Limited

Johnson Controls-Hitachi Air Conditioning India Limited Employees Gratuity Scheme (Trust) (Refer Note 35 for contribution
made)
STATUTORY REPORTS
COMPANY OVERVIEW
 98
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 38: Related party disclosure (As per Ind AS -24) (Contd..)
II The nature and volume of transaction carried out and balances with related parties in ordinary course of business are as follows:

Sr. Transactions Parties Referred to Parties Referred to Parties Referred to Parties Referred to Parties Referred to
No. A Above B Above C Above D Above E Above
For the year ended For the year ended For the year ended For the year ended For the year ended
March March March March March March March March March March
31, 2019 31, 2018 31, 2019 31, 2018 31, 2019 31, 2018 31, 2019 31, 2018 31, 2019 31, 2018
A Transaction during the year
1 Purchase of raw material
Shanghai Hitachi Electrical Appliances Co. Ltd., China - - - - - 28.9 - - - -
Highly Electrical Appliances India Pvt. Ltd. - - - - 1,625.6 1,565.0 - - - -
Johnson Controls-Hitachi Components ( Thailand ) Co. Ltd., - - 906.8 506.5 - - - - - -
Thailand
Hitachi Procurement Service Co. Ltd. - - - - - - - - -
Johnson Controls-Hitachi Air Conditioning India Limited

133.2
Hitachi Johnson Controls Air Conditioning Inc., Japan - - 62.5 - - - - - - -
Johnson Controls-Hitachi Air Conditioning Taiwan Co. Ltd., Taiwan - - 82.1 - - - - - - -
Hitachi High-Technologies Corporation - - - - - - 156.0 - - -
Others - - 12.6 161.1 - - 6.3 10.5 - -
Total - - 1,064.0 667.6 1,625.6 1,593.9 162.3 143.7 - -
2 Purchase of stock-in-trade
Hitachi Consumer Products (Thailand) Ltd. - - - - - - 895.3 1,317.8 - -
Hitachi Johnson Controls Air Conditioning Inc., Japan - - 33.4 59.9 - - - - - -
Johnson Controls (S) PTE Ltd., Singapore - - - 29.5 - - - - - -
Rola Star Pvt. Limited, India - - - 49.0 - - - - - -
Ruskin Titus India Pvt. Limited, India - - - 19.0 - - - - - -
Qingdao Hisense Hitachi Air- Conditioning Systems Co. Ltd - - - - - - 320.5 - - -
Others - - 19.4 - - - 0.1 14.6 - -
Total - - 52.8 157.4 - - 1,215.9 1,332.5 - -
3 Technical know-how fees (capitalised)
Johnson Controls-Hitachi Air Conditioning Technology - - - 55.0 - - - - - -
(Honkong) Ltd., Hong kong
Hitachi Johnson Controls Air Conditioning Inc., Japan - - 10.8 - - - - - - -
Others - - - 1.8 - - - - - -
Total - - 10.8 56.8 - - - - - -
4 Other Income
Hitachi Johnson Controls Air Conditioning Inc., Japan - - 10.8 - - - - - - -
Total - - 10.8 - - - - - - -
5 Commission income
Hitachi Johnson Controls Air Conditioning Inc., Japan - - 6.3 4.2 - - - - - -
Annual Report 2018-19

Total - - 6.3 4.2 - - - - - -

Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 38: Related party disclosure (As per Ind AS -24) (Contd..)
II The nature and volume of transaction carried out and balances with related parties in ordinary course of business are as follows:

Sr. Transactions Parties Referred to Parties Referred to Parties Referred to Parties Referred to Parties Referred to
No. A Above B Above C Above D Above E Above
For the year ended For the year ended For the year ended For the year ended For the year ended
March March March March March March March March March March
31, 2019 31, 2018 31, 2019 31, 2018 31, 2019 31, 2018 31, 2019 31, 2018 31, 2019 31, 2018
6 Sale of products
Johnson Controls India Pvt. Ltd., India - - - 2.6 - - - - - -
Hitachi Home Electronics Asia(s) Pte. Limited - - - - - - 73.2 31.5 - -
Johnson Controls Marine And Refrigeration India Limited, India - - 96.9 13.1 - - - - - -
Johnson Control International (L.L.C).,(UAE) - - 312.9 - - - - - - -
Others - - 5.0 0.1 - - 4.4 6.7 - -
Total - - 414.8 15.8 - - 77.6 38.2 - -
7 Sale of services
Johnson Controls India Pvt. Ltd., India - - - 0.2 - - - - - -
Hitachi Johnson Controls Air Conditioning Inc., Japan - - 156.9 - - - - - - -
Others - - 0.3 - - - 10.4 7.6 - -
Total - - 157.2 0.2 - - 10.4 7.6 - -
8 Advertisement, Salary & Other Expense recovery
Hitachi Johnson Controls Air Conditioning Inc., Japan - - 53.8 12.6 - - - - - -
Hitachi Consumer Products (Thailand) Ltd. - - - - - - - 3.5 - -
Others - - 2.5 - - - - - - -
Total - - 56.3 12.6 - - - 3.5 - -
9 Proceed from Sale of Fixed asset
Hitachi Johnson Controls Air Conditioning Inc., Japan - - 33.2 - - - - - - -
Total - - 33.2 - - - - - - -
10 Key management personnel compensation
Short term employee benefits
Mr. Vinay Chauhan - - - - - - - - - 9.4
Mr. Gurmeet Singh - - - - - - - - 18.5 14.3
Mr. Varghese Joseph - - - - - - - - - 6.9
Directors sitting fees
Mr. Mukesh Patel - - - - - - - - 0.8 0.4
Mr. Ashok Balwani - - - - - - - - 0.8 0.4
Ms. Indira Parikh - - - - - - - - 0.8 0.1
Mr. Devendra Nath - - - - - - - - - 0.4
Mr. Ravindra Jain - - - - - - - - - 0.4
Mr. RS Mani - - - - - - - - - 0.2
Mr. Vinesh Sadekar - - - - - - - - - 0.2
Total - - - - - - - - 20.9 32.7
99

COMPANY OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

 100
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 38: Related party disclosure (As per Ind AS -24) (Contd..)
II The nature and volume of transaction carried out and balances with related parties in ordinary course of business are as follows:

Sr. Transactions Parties Referred to Parties Referred to Parties Referred to Parties Referred to Parties Referred to
No. A Above B Above C Above D Above E Above
For the year ended For the year ended For the year ended For the year ended For the year ended
March March March March March March March March March March
31, 2019 31, 2018 31, 2019 31, 2018 31, 2019 31, 2018 31, 2019 31, 2018 31, 2019 31, 2018
11 Royalty (excluding service tax)
Johnson Controls-Hitachi Air Conditioning Technology - - - 246.7 - - - - - -
(Honkong) Ltd., Hong kong
Hitachi Johnson Controls Air Conditioning Inc., Japan - - 251.4 - - - - - - -
Hitachi Appliances Inc., Japan - - - - - - 185.6 180.2 - -
Others - - 2.7 - - - - - - -
Total - - 254.1 246.7 - - 185.6 180.2 - -
12 Purchase of capital goods
Johnson Controls-Hitachi Air Conditioning India Limited

Hitachi High Technologies Hong Kong Ltd. - - - - - - - 6.9 - -

Hitachi Johnson Controls Air Conditioning Inc., Japan - - - 0.5 - - - - - -
Johnson Controls (S) PTE Ltd., Singapore - - 18.0 - - - - - - -
Total - - 18.0 0.5 - - - 6.9 - -
13 Reimbursement of salaries & other expenses
Hitachi Appliances Inc., Japan - - - - - - 5.9 - - -
Hitachi Johnson Controls Air Conditioning Inc., Japan - - 31.1 55.1 - - - - - -
Hitachi Consumer Marketing Inc. - - - - - - 5.1 - -
Johnson Controls, Inc., USA - 5.4 - - - - - - - -
Others - - 0.5 - - - 0.4 - -
Total - 5.4 31.6 55.1 - - 5.9 5.5 - -
14 Dividend Payment - -
JCHAC India Holdco Limited, UK 30.3 30.3 - - - - - - - -
Total 30.3 30.3 - - - - - - - -
(B) Balance at year end
Receivable - -
Hitachi Johnson Controls Air Conditioning Inc., Japan - - 152.7 - - - - - - -
Johnson Controls-Hitachi Air Conditioning & Refrifration INC., - - 34.1 - - - - - - -
Dubai
Johnson Control International (L.L.C).,(UAE) - - 95.0 - - - - - - -
Hitachi Consumer Products (Thailand) Ltd. - - - - - - 117.9 51.2 - -
Johnson Controls Marine And Refrigeration India Limited, India - - - 16.7 - - - - - -
Others - - 8.6 1.7 - - - 5.4 - -
Total Amount - - 290.4 18.4 - - 117.9 56.6 - -
Annual Report 2018-19
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 38: Related party disclosure (As per Ind AS -24) (Contd..)
II The nature and volume of transaction carried out and balances with related parties in ordinary course of business are as follows:

Sr. Transactions Parties Referred to Parties Referred to Parties Referred to Parties Referred to Parties Referred to
No. A Above B Above C Above D Above E Above
For the year ended For the year ended For the year ended For the year ended For the year ended
March March March March March March March March March March
31, 2019 31, 2018 31, 2019 31, 2018 31, 2019 31, 2018 31, 2019 31, 2018 31, 2019 31, 2018
Payable
Johnson Controls, Inc., USA - 5.4 - - - - - - - -
Hitachi Appliances Inc., Japan - - - - - - 83.6 75.7 - -
Hitachi Consumer Products (Thailand) Ltd. - - - - - - 261.9 210.0 - -
Hitachi Johnson Controls Air Conditioning Inc., Japan - - 108.9 150.8 - - - - - -
Highly Electrical Appliances India Pvt. Ltd. - - - - 412.3 592.3 - - - -
Johnson Controls-Hitachi Components ( Thailand ) Co. Ltd., - - 153.6 54.1 - - - - - -
Thailand
Qingdao Hisense Hitachi Air- Conditioning Systems Co. Ltd - - - - - - 151.2 - - -
Johnson Controls (S) PTE Ltd., Singapore - - - 30.0 - - - - - -
Others - - 28.6 26.2 - - 17.0 9.2 - -
Total Amount - 5.4 291.0 261.1 412.3 592.3 513.8 294.9 - -

Note:

(a): There are no allowances on account for impaired receivables in relation to any outstanding balances, and no expense have been recongnised in respect of impaired receivables due
from related parties.

(b): Exclude provision for gratuity and compensated absences since these are based on actuarial valuation on overall company basis.

(c): The Remuneration Committee recommended and the Board of Directors has approved revision in remuneration limit of Chairman and Managing Director from H 17.5 million to H 25.0
million on January 29, 2019. The revised remuneration limit is subject to approval of the shareholders in the ensuing Annual General Meeting.

III. Terms and Conditions

Transactions relating to dividends were on same terms and conditions that applied to other shareholders. All other transactions were made on normal commercial terms and conditions
and at arms lengt prices. All outstanding balances are unsedcured and will be settled in cash.

COMPANY OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

101
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Notes forming part of the Financial Statements

for the year ended March 31, 2019

Note 39: Leases

(a) Company as lessee

Certain premises and equipments are obtained on cancellable and non-cancellable operating leases that are renewable either at the
option of lessor or lessee, or both. Further, there are no subleases nor any restrictions imposed in lease agreements. Lease rentals
debited to Statement of Profit and Loss for the year is H 432.2 million (March 31, 2018 H 379.9 million).

The future minimum lease rentals payable at the balance sheet date in respect of non-cancellable operating leases are as follows:

J in million
As at As at
March 31, 2019 March 31, 2018
Not later than one year 34.8 40.3
Later than one year but not later than five years 104.7 58.0
Later than five years - -

(b) Company as lessor

Certain premises and equipments are given on cancellable operating leases that are renewable either at the option of lessor or lessee,
or both. Further, there are no subleases nor any restrictions imposed in lease agreements.

J in million
As at As at
102 March 31, 2019 March 31, 2018
Lease rentals credited to the Statement of Profit and Loss 3.9 3.6

Note 40: Segment Reporting

A. Description

The Company's chief operating decision maker (CODM), Chairman & Managing Director (CMD), assesses the financial performance
and position of the Company, and make strategic decisions. The Company has identified the following two reportable segments.

Reportable Segments Operations

Cooling Products for comfort and commercial use Providing Cooling products for comfort and commercial use in India and
outside India and related services.
Design and development services The Company has started providing Design and development services with
effect from October 1, 2018. It provides Design and development services
related to Air Conditioning to group company outside India and also, to the
Company's segment- Cooling Product for comfort and commercial use.

The Company's chief operating decision maker (CODM), Chairman & Managing Director (CMD) reviews internal management report
of each segment at least monthly.
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 40: Segment Reporting (Contd..)

B. Information about reportable segment

Information related to each reportable segment is set out below. Segment profit before tax, as included in internal management
reports reviewed by the CODM, is used to measure performance because management believes that such information is the most
relevant in evaluating the results of the respective segments relative to other entities that operate in the same industries.

J in million
2018-19 2017-18
Cooling products Design and Total Cooling products Design and Total
for comfort and development for comfort and development
commercial use Services commercial use Services
Segment Revenue
External Sales 22,256.1 209.7 22,465.8 22,582.7 - 22,582.7
Less : Inter - Segment Sales - 52.8 52.8 - - -
Total Revenue from 22,256.1 156.9 22,413.0 22,582.7 - 22,582.7
operations
Segment Results
Earnings before Interest and 1324.4 26.2 1350.6 1533.4 - 1533.4
Tax
Less: Interest expense 26.9 - 26.9 19.8 - 19.8
Profit before tax 1,297.5 26.2 1,323.7 1,513.6 - 1,513.6
Segment Assets 14,518.4 980.9 15,499.3 12,561.0 - 12,561.0
Unallocated corporate assets - - 178.4 - - - 103
Total Segment assets 14,518.4 980.9 15,677.7 12,561.0 - 12,561.0
Segment Liabilities 9,317.0 224.8 9,541.8 7,209.0 - 7,209.0
Unallocated corporate - - 6.0 - - -
liabilities
Total Segment Liabilities 9,317.0 224.8 9,547.8 7,209.0 - 7,209.0

FINANCIAL STATEMENTS
C. Geographic information

The Cooling products for comfort and commercial use and Design and development services are sold / provided to customer in India
and outside India. The manufacturing facilities and sales offices are primarily located in India.

In presenting the following information, segment revenue is based on the geographic location of customers.

J in million
2018-19 2017-18
STATUTORY REPORTS

Cooling products Design and Total Cooling products Design and Total
for comfort and development for comfort and development
commercial use Services commercial use Services
Segment revenue
India 21630.9 52.8 21,683.7 22,530.6 - 22,530.6
Outside India 625.2 156.9 782.1 52.1 - 52.1
Total 22256.1 209.7 22,465.8 22,582.7 - 22,582.7
Less: Inter Segment Revenue - (52.8) (52.8) - - -
Total segment revenue from 22,256.1 156.9 22,413.0 22,582.7 - 22,582.7
operations
COMPANY OVERVIEW
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Notes forming part of the Financial Statements

for the year ended March 31, 2019

Note 40: Segment Reporting (Contd..)

D. Non-Current Asset

J in million
2018-19 2017-18
Cooling products Design and Total Cooling products Design and Total
for comfort and development for comfort and development
commercial use Services commercial use Services
India 3,833.9 - 3,833.9 2,917.3 - 2,917.3
Outside India - - - - - -
Total segment asset 3,833.9 - 3,833.9 2,917.3 - 2,917.3

E. The Company does not have any customer contributing 10 per cent or more of total revenue.

Note 41: Changes in accounting policies

a) The Company applied Ind AS 115 for the first time by using the modified retrospective method of adoption with the date of initial
application of April 1, 2018. Comparative prior period has not been adjusted.

The Company applying the modifying retrospective method can elect to apply the revenue standard only to contracts that are not
completed as at the date of initial application. The Company has applied the revenue standard only to contracts that were not
completed as at date of initial application. The impact on the Company's retained earning as at April 1, 2018 is not material.

b) The following table presents the amount by which each financial statement line item is effected in the current year ended
104 March 31, 2019 by the application of Ind AS 115 as compared to previous accounting standard on revenue recognition. The adjustments
are explained more detail by standard below:

J in million
Extract of Balance Sheet As at Increase / As at
March 31, 2019 (Decrease) March 31, 2019
Current asset
Other financial asset 339.8 (214.9) 124.9
Contract asset - 214.9 214.9
Total 339.8 - 339.8
Current liabilities
Other financial liability 608.2 (20.3) 587.9
Contract liability - 299.9 299.9
Other current liability 855.5 (279.6) 575.9
Total 1463.7 - 1463.7

The Impact of Ind AS 115 adjustment on the Statement of profit and loss is not material to the financial statement.

c) Presentation of assets and liabilities related to contracts with customers

The Company has changed the presentation of certain amounts in the balance sheet to reflect the terminology of Ind AS 115:

1. Contract assets recognised in relation to income accrued were previously presented as part of other financial assets of
H 214.9 million at March 31, 2019. Contract assets are in the nature of unbilled revenue which arises when Company satisfies a
performance obligation but does not have an unconditional right to consideration.

2. Contract liabilities in relation to contracts of installation and commissioning were previously included in other financial liabilities
of H 20.3 at March 31, 2019.

3. Contract liabilities in relation to the advance received from customer and deferred income pertaining to annual maintenance
contract were previously included in other current liabilities of H 279.6 at March 31, 2019.
Notes forming part of the Financial Statements
for the year ended March 31, 2019

Note 41: Changes in accounting policies (Contd..)

d) Disaggregation of Revenue

In the following table, revenue is disaggregated by primary geographical market, major products/service lines and timing of revenue
recognition. The table also includes a reconciliation of the disaggregated revenue with the Company’s two strategic divisions, which
are its reportable segments.

J in million
Cooling products Design and Total
for comfort and development
commercial use Services
Primary geographical markets
India 21,630.9 - 21,630.9
Outside India 625.2 156.9 782.1
Total 22,256.1 156.9 22,413.0
Major Products /service lines
Room air conditioners 15,305.0 - 15,305.0
Commercial air conditioners 2,708.4 - 2,708.4
Home appliances 1,469.8 - 1,469.8
Service Income 1,196.2 156.9 1,353.1
Others 1,576.7 - 1,576.7
Total 22,256.1 156.9 22,413.0
Timing of revenue recognition
105
Goods / Services Transferred at a point of time 21,161.3 - 21,161.3
Service transferred over time 1,094.8 156.9 1,251.7
Total 22,256.1 156.9 22,413.0

Refer Note :40 in respect of segment reporting

FINANCIAL STATEMENTS
e) Significant changes in the contract assets and the contract liabilities balances during the period are as follows:

J in million
Contract assets Contract liabilities
Opening balance 145.3 300.8
Revenue recognised that was included in the contract liability balance at the - 231.1
beginning of the period
Increases due to cash received, excluding amounts recognised as revenue - 230.2
during the period
Transfers from contract assets recognised at the beginning of the period to 54.4 -
STATUTORY REPORTS

receivables
Increases as a result of changes in the measure of progress 124.0 -
Closing balance 214.9 299.9

Unsatisfied performance obligation :

J in million
As at As at
March 31, 2019 March 31, 2018
Aggregate amount of the transaction price allocated to construction contracts 474.5 -
COMPANY OVERVIEW

that are partially unsatisfied as at reporting date

Management expects that 88% of transaction price allocated to the unsatisfied contracts as on March 31, 2019 will be recognised as
revenue during the next reporting period 2019-20.
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

Notes forming part of the Financial Statements

for the year ended March 31, 2019

Note 42 Earnings per share

J in million
Year ended Year ended
March 31, 2019 March 31, 2018
Net Profit after Tax as per Statement of profit and loss attributable to Equity 859.4 1,001.5
Shareholders (H in million)
Weighted average number of Equity shares outstanding during the financial year (Nos.) 2,71,90,884 2,71,90,884
Nominal face value of an Equity share (in H) 10.0 10.0
Basic and diluted earnings per share (in H) 31.6 36.8

Note: The Company does not have any outstanding dilutive potential equity shares. Consequently, the basic and diluted earning per share
of the Company remain the same.

Note 43: Disclosures pursuant to Section 186(4) of the Companies Act, 2013
J in million
Purpose Year ended Year ended
March 31, 2019 March 31, 2018
Corporate guarantees given to bank against To partially address dealers 150.0 150.0
the credit facilities availed by dealers working capital requirement

106 Note 44: Events occurring after reporting period

The Company evaluated subsequent events through May 16, 2019, the date the financial statements were available for issuance, and
determined that there were no additional material subsequent events requiring disclosure.

Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification /
disclosure.

As per our report of even date

For Price Waterhouse & Co Chartered Accountants LLP For and on behalf of the Board of Directors
Firm Registration No.304026E/E300009
Chartered Accountants

Sachin Parekh Gurmeet Singh Yoshikazu Ishihara

Partner Chairman & Managing Director Director
Membership No.: 107038 DIN : 06938403 DIN : 07998690

Rishi Mehta Parag Dave

Chief Financial Officer Company Secretary
Membership No.: 12626
Place: Ahmedabad Place: Ahmedabad
Date: May 16, 2019 Date: May 16, 2019
Notes
Notes
–
Key events in 2019

Mr. Gurmeet Singh Sethi received the prestigious Chairman’s Hitachi Sales Meet happened in Pattaya,Thailand
Award

Inauguration of Skill Development Center (ITI) in Vijaywada & Inaugurated Kolkata EEC (Victoria)
Kakinada

Inaugurated Mumbai EEC (Gateway) Primary School inauguration at Acharasan under CSR project
–
Johnson Controls-Hitachi Air Conditioning India Limited

HEAD OFFICE AND WORKS

Hitachi Complex, Karan Nagar, Kadi, Call: 079-71414848 (Landline), 756788-4848 (Mobile)
Dist.- Mehsana - 382727, Gujarat, India. E-mail: [email protected]

REGISTERED OFFICE
9th Floor, Abhijeet – I, Mithakhali Six Roads,
Air Conditioners and Refrigerators are e-waste products and should
Ahmedabad – 380 006, Gujarat, India. be segregated for environmental friendly recycling and should not be
T - +91-79-26402024 mixed with general household waste at the end of its useful life. For
CIN No. L29300GJ1984PLC007470 more details kindly visit our website or contact Hitachi Dial-a-Care.
Email: [email protected]
Website: www.hitachiaircon.in

https://www.facebook.com/HitachiHomes/ https://twitter.com/HitachiHomes

https://www.youtube.com/user/hitachihome

https://www.linkedin.com/company/johnson-controls-hitachi-air-conditioning
 Johnson Controls-Hitachi Air Conditioning India Limited
NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Thirty Fourth Annual General 7. To consider and if thought fit, to pass with or without
Meeting of the members of the Johnson Controls-Hitachi Air modification(s), the following resolution as a Special Resolution:
Conditioning India Limited will be held on Wednesday, 14th day of
“RESOLVED THAT pursuant to provisions of Section 149, 152
August, 2019 at 9.30 a.m. at Center for Environment Education,
and other applicable provisions of Companies Act, 2013 and
Nehru Foundation for Development, Vastrapur-Gurudwara Road,
the Rules made thereunder read with Schedule IV of the
Bodakdev, Ahmedabad: 380054 to transact the following business:
Companies Act, 2013, Mr. Mukesh Patel (DIN 00053892), who
was appointed as an Independent Director of the Company
ORDINARY BUSINESS: for a first term upto March 31, 2019 by the Shareholders, be
and is hereby reappointed as an Independent Director of the
1. To consider and adopt the audited financial statements of the
Company for second term with effect from April 01, 2019 to
Company for the financial year ended March 31, 2019 and the
March 31, 2024.”
reports of Board of Directors and Auditors thereon.
8. To consider and if thought fit, to pass with or without
2. To declare dividend on Equity Shares for the financial year
modification(s), the following resolution as a Special Resolution:
ended March 31, 2019.
“RESOLVED THAT pursuant to the provisions of Sections
3. To appoint a Director in place of Mr. Yoshikazu Ishihara
196 and 197 read with Schedule V and any other applicable
(DIN 07998690), who retires by rotation and being eligible,
provisions of the Companies Act, 2013 and the rules framed
offers himself for re-appointment. there under and any further statutory modification(s) thereof,
for the time being in force the consent of the members be
SPECIAL BUSINESS: and is hereby accorded for the revision in the maximum
remuneration payable to Mr. Gurmeet Singh (DIN 06938403)
4. To consider and if thought fit, to pass with or without 1
as a Chairman & Managing Director of the Company with
modification(s), the following resolution as an Ordinary effect from February 01, 2019 on the terms and conditions of
Resolution: appointment and remuneration as set out in the explanatory
“RESOLVED THAT pursuant to the provisions of Section 148 statement attached to this notice.”
and all other applicable provisions of the Companies Act, “FURTHER RESOLVED THAT the Board (term “Board” referred
2013 and Rules framed there under and any amendment of hereinafter includes Board of Directors of the Company and
such provisions from time to time, M/s. Kiran J Mehta & Co. Nomination and Remuneration Committee) be and is hereby
(FRN - 000025), Cost Accountants, appointed by the Board of authorised to vary and / or modify the terms and conditions
Directors of the Company to conduct the Audit of Cost records including remuneration, benefits and perquisites payable /
of the Company for the financial year from April 01, 2019 to made available to the appointee in such manner as may be
March 31, 2020, be paid a remuneration of H 1.25 Lacs and agreed upon between the Board and the appointee.”
reimbursement of actual travel and out-of-pocket expenses.”
“FURTHER RESOLVED THAT in the event of loss, absence or
5. To consider and if thought fit, to pass with or without inadequacy of profits of the Company during the term of the
modification(s), the following resolution as an Ordinary office of the appointee, the remuneration as mentioned in
Resolution: the Explanatory Statement shall be paid to him as minimum
“RESOLVED THAT Mr. Shinichi Iizuka (DIN 00266660), appointed remuneration.”
as an Additional Director by the Board of Directors with effect “FURTHER RESOLVED THAT the Board be and is hereby
from May 08, 2019 and who holds office upto the date of this authorised to do all such acts, deeds and things and execute all
Annual General Meeting, be and is hereby appointed as a such documents, instruments and writings, as may be required
Director of the Company whose period of office as a director is and to delegate all or any of its powers herein conferred to any
liable to retire by rotation.” Committee of Directors or to any director or to any employee
6. To consider and if thought fit, to pass with or without of the Company to give effect to the aforesaid resolutions.”
modification(s), the following resolution as a Special Resolution: Notes:
“RESOLVED THAT pursuant to provisions of Section 149, 152 a. A member entitled to attend and vote at the Annual General
and other applicable provisions of Companies Act, 2013 and Meeting is entitled to appoint a proxy to attend and vote
the Rules made thereunder read with Schedule IV of the instead of himself and a proxy need not be a member of the
Companies Act, 2013, Mr. Ashok Balwani (DIN 02292791), who Company. The instrument appointing proxy must be deposited
NOTICE

was appointed as an Independent Director of the Company at the Registered Office of the Company not less than forty
for a first term upto March 31, 2019 by the Shareholders, be eight hours before the time fixed for the meeting.
and is hereby reappointed as an Independent Director of the
Company for second term with effect from April 01, 2019 to A person can act as a proxy on behalf of members not exceeding
March 31, 2024.” fifty and holding in the aggregate not more than ten percent
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

of the total capital of the Company carrying voting rights. A Company’s Registrars and Share Transfer Agent, for issuance
member holding more than ten percent of the total share of duplicate dividend warrant(s).
capital of the Company carrying voting rights may appoint a
single person as proxy and such person shall not act as a proxy g. Dividend pertaining to financial years 2009-10 and 2010-
for any other person or shareholder. 11 have already been transferred to Investors Education
and Protection Fund. Shares of those shareholders whose
b. The relative Explanatory Statement pursuant to Section 102 of Dividend was unpaid for last 7 years, have been transferred to
the Companies Act, 2013 in respect to the Special business to Investors Educations and Protection Fund.
be transacted at the Meeting is annexed hereto.
h. The facility for making nominations is available for members
c. The Register of Members and Share transfer books of in respect of the shares held by them. Nomination form can be
the Company will be closed from 10th August, 2019 to obtained from the Company’s Registrars and Share Transfer
14th August, 2019 (both days inclusive). Agent.

d. Dividend, if declared, will be paid as under: i. Electronic copy of the Annual Report for the year 2018-19,
Notice of the Annual General Meeting of the Company along
• Physical Shares: To the members whose names appear with Attendance Slip and Proxy Form are being sent to all the
on the Register of members of the Company as on closing members whose email IDs are registered with the Company
hours of 9th August, 2019. / Depository Participant for communication purposes unless
• Dematerialised Shares: To the beneficial owners as on any member has requested for a hard copy of the same.
closing hours of 9th August, 2019 as per information to be For members who have not registered their email address,
furnished by Depositories for this purpose. physical copies are being sent in the permitted mode.

Dividend Payment Date: Dividend, if declared, will be paid on j. Members desirous of obtaining information in respect of
or after 28th August, 2019. accounts of the Company, are requested to send queries in
writing to the Company at the registered office, so as to reach
e. Members are requested to notify promptly any change in at least seven days before the date of the meeting.
their address to the Company’s Registrars and Share Transfer
Agent, Link Intime India Pvt. Limited at its present address k. The shares of the Company have been listed at BSE Limited and
at 506-508, Amarnath Business Centre-1 (ABC-1), Besides National Stock Exchange of India Limited and Company has paid
Gala Business Centre, Near St. Xavier’s College Corner, Off Listing Fees to the said Stock Exchanges for the year 2019-20.
2
C G Road, Ellisbridge, Ahmedabad 380006, Gujarat, India. l. In compliance with provisions of Section 108 of the Companies
The members are also requested to send all correspondence Act, 2013 and Rule framed thereunder the Company is pleased
relating to Shares, including transfers and transmissions to to provide members, a facility to exercise their right to vote at
the Registrars and Share Transfer Agent. the Annual General Meeting (AGM) by electronic means and
f. All members who have not encashed their dividend warrants the business may be transacted through e-Voting Services
for the financial years 2011-12, 2012-13, 2013-14, 2014-15, provided by Central Depository Services (India) Limited (CDSL).
2015-16, 2016-17 and 2017-18 are requested to write to the

By Order of the Board of Directors

Place: Ahmedabad Parag Dave

Date: May 16, 2019 Company Secretary

Johnson Controls-Hitachi Air Conditioning India Limited

Corporate Identification Number (CIN): L29300GJ1984PLC007470
Regd. Office: 9th Floor, Abhijeet, Mithakhali Six Roads, Ahmedabad: 380006
Phone: 079-26402024 E-mail: [email protected], Web: https://www.hitachiaircon.in/

EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013:

Item No. 4 Such remuneration has to be ratified by the Shareholders of the

Company. Therefore, consent of the Members is sought for passing
Pursuant to the provisions of Section 148 of the Companies Act, 2013 an Ordinary resolution for ratification of the Remuneration payable
and Rule 14 of the Companies (Audit and Auditors) Rules, 2014, on to Cost Auditors for the financial year from April 01, 2019 to
recommendation of Audit Committee, the Board has considered and March 31, 2020.
approved appointment of M/s. Kiran J Mehta & Co. (FRN - 000025),
Cost Accountants, as Cost Auditors to conduct Audit of Cost None of the Directors and Key Managerial Personnel of the
records of the Company for the financial year from April 01, 2019 to Company and their relatives are concerned or interested, financially
March 31, 2020 at a remuneration of H 1.25 Lacs plus Service Tax and or otherwise, in the resolution.
reimbursement of actual travel and out-of-pocket expenses.
Considering above, the Board recommends the resolution for
approval of the members.
Item No. 5 In the event of loss, absence or inadequacy of profits of the
Company in any financial year during the term of the office of the
Mr. Shinichi Iizuka was appointed as an additional Director of the appointee, the remuneration as mentioned above shall be paid to
Company by the Board of Directors of the Company with effect him as minimum remuneration.
from May 08, 2019 and holds his office upto the date of this
Annual General Meeting. Consent of the Members is sought for his Annual / interim increments will be decided as per the policy of the
appointment as Director of the Company. Company on the basis of performance of the appointee.

Except Mr. Shinichi Iizuka, being an appointee, none of the other

Directors and Key Managerial Personnel of the Company and their
Information as required under Section II of the
relatives are concerned or interested, financially or otherwise, in
Part II of Schedule V of the Companies Act, 2013
the resolution. I. General Information
Considering above, the Board recommends the resolution for a) Nature of Industry: Company is engaged in manufacturing
approval of the members. and selling of Air conditioners and trading of Refrigerators,
Washing Machines.
Item No. 6 & 7
b) Date or expected date of commencement of commercial
Based on the skills, experience, knowledge and performance
production: Company commenced its business in the
evaluation, Board of the Company has accorded approval for
year 1985.
re-appointment of Mr. Ashok Balwani and Mr. Mukesh Patel as
Independent Director for Second term from April 01, 2019 to March c) In case of new companies, expected date of
31, 2024. They have given a declaration to the Board that they meet commencement of activities as per project approved by
the criteria of independence as provided under Section 149(6) of financial institutions appearing in the prospectus: Not
the Companies Act and in the opinion of the Board, they fulfils the applicable.
conditions specified in the Act and the Rules framed there under for
re-appointment as Independent Director. d) Financial performance based on the given indicators: For
the year 2018-19, Income was 22,413 Million and Profit
Consent of the Members is sought for their appointment as before tax was 1323.7 Million.
Independent Director of the Company.
e) Foreign investments or collaborations, if any: Johnson
Except Mr. Ashok Balwani and Mr. Mukesh Patel, being appointees, Controls–Hitachi Air conditioning is holding 74.25% of
3
none of the other Directors and Key Managerial Personnel of the total paid up share capital as well as Company has
the Company and their relatives are concerned or interested, entered into Technical Collaboration agreements with
financially or otherwise, in the resolution. Johnson Controls–Hitachi Air Conditioning Technology
(Hong Kong) Limited for the products of the Company.
Considering above, the Board recommends the resolution for
approval of the members. II. Information about the appointee

Item No. 8 a) Back ground details: Brief resume of the appointee is

provided as part of this notice.
Nomination and Remuneration Committee and Board of
Directors has increased the maximum limit of Remuneration of b) Past remuneration: For the year 2018-19 H 18.5 Million.
Mr. Gurmeet Singh Chairman & Managing Director with effect from
c) Job Profile and his suitability:
1st February, 2019 as under:
Mr. Gurmeet Singh is an Honours Graduate in Physics
Salary:
from the University of Delhi with a Post Graduate
Not to exceed H 25,000,000 per Annum (inclusive of perquisites Diploma in Management. In his total experience of nearly
as stated under). 31 years, he has worked in various companies and product
categories. In his career he has worked in fields of Sales,
Perquisites: Marketing, Business Planning, Service and Strategy.

Category A: d) Remuneration proposed to appointee: Remuneration as

stated above.
The Company shall provide furnished accommodation or house
rent allowance and any other perquisites as may be decided by the e) Comparative remuneration profile with respect to
Company from time to time. industry, size of the Company, profile of the position and
person (in case of expatriates the relevant details would
Category B: be w.r.t. the country of his origin): With globalisation and
Company’s car and telephone at residence. Extent of usage of liberalisation taking roots in India, the demand for the
these perquisites for official duties, shall not be included in the knowledge and skill in various fields are on the rise and
computation of the limit of the above remuneration ceiling. there has been a phenomenal growth in the remuneration
package for key positions in the last few years.
Apart from the aforesaid remuneration, he will be entitled to
Pecuniary relationship directly or indirectly with the Company,
NOTICE

reimbursement of all expenses incurred in connection with the

or relationship with the managerial personnel, if any: Apart
business of the company.
from the remuneration, he does not have any pecuniary
The appointee shall not be entitled to any sitting fees for Board / relationship with the Company or with the managerial
Committee meetings. personnel or with the other Directors of the Company.
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

III. Other Information Company and their relatives are concerned or interested,
financially or otherwise, in the resolution.
Reasons of loss or inadequate profits: Not applicable since,
during the year 2018-19, Company has made profit before tax The above explanatory statement sets out an abstract of
of H 1323.7 Million. material terms and conditions of the appointment and hence
the same may be treated as an abstract of memorandum
IV. Disclosures of interest in accordance with Section 190 of the
The disclosures of remuneration shall be reported in Corporate Companies Act, 2013.
Governance Report attached to the Directors’ Report. The Board commends the resolution for approval of the
Except Mr. Gurmeet Singh being appointee, none of the other members.
Directors and Key Managerial Personnel of the

By Order of the Board of Directors

Place: Ahmedabad Parag Dave

Date: May 16, 2019 Company Secretary

Johnson Controls-Hitachi Air Conditioning India Limited

Corporate Identification Number (CIN): L29300GJ1984PLC007470
Regd. Office: 9th Floor, Abhijeet, Mithakhali Six Roads, Ahmedabad: 380006
Phone: 079-26402024 E-mail: [email protected], Web: https://www.hitachiaircon.in/

Instructions for E-voting either in physical form or in dematerialized form, as on

the cut-off date of 7th August, 2019 may cast their vote
1. In compliance with provisions of Section 108 of the Companies electronically. The e-voting module shall be disabled by
Act, 2013 and Rule framed thereunder the Company is pleased CDSL for voting thereafter.
4 to provide members, a facility to exercise their right to vote at
the Annual General Meeting (AGM) by electronic means and (ii) The shareholders should log on to the e-voting website
the business may be transacted through e-Voting Services www.evotingindia.com.
provided by Central Depository Services (India) Limited (CDSL).
(iii) Click on Shareholders.
2. Facility for voting, either through ballot or polling paper shall
also be made available at the meeting and members attending (iv) Now Enter your User ID
the meeting who have not already cast their vote by remote a. For CDSL: 16 digits beneficiary ID,
e-voting shall be able to exercise their right at the meeting.
b. For NSDL: 8 Character DP ID followed by 8 Digits
3. Members who have cast their vote by remote e-voting prior Client ID,
to the meeting may also attend the meeting but shall not be
entitled to cast their vote again. c. Members holding shares in Physical Form should
enter Folio Number registered with the Company.
4. Tejal Shah & Associates, Company Secretaries in practice
(Membership no. ACS-13316), has been appointed as the (v) Next enter the Image Verification as displayed and Click
Scrutinizer to scrutinize the e-voting process (including the on Login.
Ballot Form received from the Members who do not have access
(vi) If you are holding shares in demat form and had logged
to the e-voting process) in a fair and transparent manner.
on to www.evotingindia.com and voted on an earlier
5. (i) The voting period begins on 11th August, 2019 (09.00 am voting of any company, then your existing password is to
IST) and ends on 13th August, 2019 (05.00 pm IST). During be used.
this period shareholders’ of the Company, holding shares

(vii) If you are a first time user follow the steps given below:
For Members holding shares in Demat Form and Physical Form
PAN Enter your 10 digit alpha-numeric PAN issued by Income Tax Department (Applicable for both
demat shareholders as well as physical shareholders)
• Members who have not updated their PAN with the Company/Depository Participant are
requested to use the sequence number which is printed on Postal Ballot / Attendance Slip
indicated in the PAN field.
Dividend Bank Details Enter the Dividend Bank Details or Date of Birth (in dd/mm/yyyy format) as recorded in your demat
OR Date of Birth (DOB) account or in the company records in order to login.
• If both the details are not recorded with the depository or company please enter the member
id / folio number in the Dividend Bank details field as mentioned in instruction (iv).
 (viii) After entering these details appropriately, click on • After receiving the login details, user would be able to
“SUBMIT” tab. link the account(s) for which they wish to vote on.

(ix) Members holding shares in physical form will then directly • The list of accounts linked in the login should be
reach the Company selection screen. However, members mailed to [email protected] and on
holding shares in demat form will now reach ‘Password approval of the accounts they would be able to cast
Creation’ menu wherein they are required to mandatorily their vote.
enter their login password in the new password field.
Kindly note that this password is to be also used by the • A scanned copy of the Board Resolution and Power of
demat holders for voting for resolutions of any other Attorney (POA) which they have issued in favour of the
company on which they are eligible to vote, provided Custodian, if any, should be uploaded in PDF format in
that company opts for e-voting through CDSL platform. the system for the scrutinizer to verify the same.
It is strongly recommended not to share your password
(xx) In case you have any queries or issues regarding e-voting,
with any other person and take utmost care to keep your
you may refer the Frequently Asked Questions (“FAQs”)
password confidential.
and e-voting manual available at www.evotingindia.
(x) For Members holding shares in physical form, the com, under help section or write an email to helpdesk.
details can be used only for e-voting on the resolutions [email protected].
contained in this Notice.
Brief resume of the Directors seeking appointment or re-
(xi) Click on the EVSN for the relevant Johnson Controls- appointment at this Annual General Meeting (Pursuant to
Hitachi Air Conditioning India Limited on which you Regulation 36(3) of the SEBI (Listing Obligations & Disclosure
choose to vote. Requirements) Regulations, 2015)

(xii)
On the voting page, you will see “RESOLUTION Mr. Gurmeet Singh
DESCRIPTION” and against the same the option “YES/
Mr. Gurmeet Singh is an Honors’ Graduate in Physics from the
NO” for voting. Select the option YES or NO as desired.
University of Delhi with a Post Graduate Diploma in Management.
The option YES implies that you assent to the Resolution
In his total experience of nearly 31 years, he has worked in various
and option NO implies that you dissent to the Resolution.
companies and product categories. In his career he has worked in
(xiii) Click on the “RESOLUTIONS FILE LINK” if you wish to fields of Sales, Marketing, Business Planning, Service and Strategy. 5
view the entire Resolution details. He has been associated with Company for almost 15 years in
2 stints. He had initially joined the Company in 2001.
(xiv) After selecting the resolution you have decided to
vote on, click on “SUBMIT”. A confirmation box will be There is no inter-se relation of Mr. Gurmeet Singh with any other
displayed. If you wish to confirm your vote, click on Director of the Company.
“OK”, else to change your vote, click on “CANCEL” and
Directorship / Membership of Committee of the Board held in
accordingly modify your vote.
other public limited companies in India: None.
(xv) Once you “CONFIRM” your vote on the resolution, you
No. of Shares held in Company: Nil.
will not be allowed to modify your vote.
Mr. Shinichi Iizuka
(xvi) You can also take a print of the votes cast by clicking on
“Click here to print” option on the Voting page. Mr. Shinichi Iizuka holds a bachelor’s degree in Science and
Technology from Sophia University. He has held various positions in
(xvii) If a demat account holder has forgotten the login password
Product Development, Environmental Equipment, and Refrigeration
then Enter the User ID and the image verification code
& Air Conditioning Division. He started to work in India in 2002 and
and click on Forgot Password & enter the details as
was appointed as the Managing Director of the Company in 2006.
prompted by the system.
He became COO and President of Johnson Controls – Hitachi Air
(xviii) Shareholders can also use Mobile app - “m - Voting” for Conditioning effective since October, 2015.
e-voting. m - Voting app is available on Apple, Android
He become COO & President of Johnson Controls – Hitachi Air
and Windows based Mobile. Shareholders may log in to
Conditioning effective October, 2015.
m - Voting using their e voting credentials to vote for the
company resolution(s). There is no inter-se relation of Mr. Shinichi Iizuka with any other
Director of the Company.
(xix) Note for Non – Individual Shareholders and Custodians
Directorship / Membership of Committee of the Board held in
• Non-Individual shareholders (i.e. other than
other public limited companies in India: None.
Individuals, HUF, NRI etc.) and Custodian are required
to log on to www.evotingindia.com and register No. of Shares held in Company: Nil.
themselves as Corporates.
Mr. Yoshikazu Ishihara
NOTICE

• A scanned copy of the Registration Form bearing the

stamp and sign of the entity should be emailed to Mr. Yoshikazu Ishihara is a Graduate from the University of
[email protected]. Southern California and Post Graduate from Emory University
 Johnson Controls-Hitachi Air Conditioning India Limited Annual Report 2018-19

School of Law. He is having total experience of nearly 23 years in Mr. Mukesh Patel
the field of Legal.
An Eminent Advocate and International Tax Expert, Mr. Mukesh
There is no inter-se relation of Mr. Yoshikazu Ishihara with any Patel enjoys over four decades of extensive experience in the
other Director of the Company. legal profession, with expertise in the fields of Personal and
Corporate Tax Planning, Appellate Matters, International Taxation,
Directorship / Membership of Committee of the Board held in Tax and Investment Planning for Non-Resident Indians and Foreign
public limited listed companies in India: Nil Collaborations. Over the past 40 years, he has been actively
involved in Legal Education and Tax Journalism, has occupied the
No. of Shares held in Company: Nil
designation as Visiting Faculty with the Gujarat Law Society, the
Mr. Ashok Balwani IIM, Ahmedabad and also a Columnist of renowned newspapers.

Mr. Ashok Balwani is a B.E.(Hons) (Elec.) from BITS, Pilani and He is associated with the Company since March, 2003.
an MBA from FMS, University of Delhi. He has over 30 years’
There is no inter-se relation of Mr. Mukesh Patel with any other
experience and was associated with many large corporates like
Director of the Company.
L&T Ltd, Det Norske Veritas and Man Industries (India) Ltd. He is
now working as an independent management consultant. Directorship / Membership of Committee of the Board held in
other public limited companies in India:
There is no inter-se relation of Mr. Ashok Balwani with any other
Director of the Company. No. of Shares held in Company: 1500.
Directorship / Membership of Committee of the Board held in Particulars of employees as required under Section 197(12) of
other public limited companies in India: None. the Companies Act, 2013 read with Rule 5(2) of Companies
(Appointment and Remuneration of Managerial Personnel)
No. of Shares held in Company: Nil.
Rules, 2014 for the year ended March 31, 2017 Employees
employed throughout the year:

Employees employed throughout the year:

6 Name of the Designation Qualification Age Experi- Remuneration Date of Last Employment held
Employee (Yrs) ence (H in Million) commence-
(Yrs) ment of
employment
Mr. Gurmeet Singh Chairman & Graduate in 53 31 18.4 08-Feb-2014 Orient Paper And
Managing Physics & PGD in Industries Ltd.
Director Management
Mr. Vinay Chauhan Director-GDC B.E. (Mechanical) 59 34 15.0 06-Dec-1993 Koron Business
PGD in Industrial Systems Ltd.
Engineering
Mr. Ichio Iwai Asst. Vice Graduate in Politics 56 33 15.1 06-Oct-2013 Hitachi Consumer
President and Economics Marketing Inc. Japan
Mr. Jitendhar G S Sr. Vice B.Tech 55 28 9.9 13-Mar-2018 EAFT Technologies
President
Mr. Rishi Mehta Chief Financial M.Com, Chartered 40 17 8.2 08-Jan-2018 Adient India Pvt. Ltd
Officer Accountant
Mr. Sanjay Kumar Vice President M.B.A, B.A 49 27 7.7 27-Jan-2015 Tafe Motor And
Tractors Ltd.
Mr. Vikas Verma Sr. Vice B.E. 49 20 7.6 27-Jan-18 Daikin Air conditioning
President India Private Limited

Employees employed for a part of the year:

Name of the Designation Qualification Age Experi- Remuneration Date of Last Employment held
Employee (Yrs) ence (H in Million) commence-
(Yrs) ment of
employment
Mr. Naoji Anjiki Sr. Vice B.E. 61 39 9.5 05-Jun-2017 Hitachi-Johnson Controls
President Air Conditioning Inc.
Mr. Masahiko Asst. Vice B.E. 50 27 7.6 18-Apr-2017 Hitachi Johnson Controls
Watanabe President (Mechanical) Air Conditioning Inc. Japan
Mr. Sanjeev Agarwal Director-Sales M.A. 56 33 7.5 20-Sep-18 L G Electronics
 Johnson Controls-Hitachi Air Conditioning India Limited
Corporate Identification Number (CIN): L29300GJ1984PLC007470
Regd. Office: 9th Floor, Abhijeet, Mithakhali Six Roads, Ahmedabad: 380006 Phone: 079-26402024
E-mail:[email protected], Web: https://www.hitachiaircon.in/

ATTENDANCE SLIP

Name of Sole / First named Member : ____________________________________________________________________________

Registered Folio No. / DP ID No.-Client No. : ____________________________________________________________________________
Number of Shares Held : ____________________________________________________________________________
I/We hereby record my / our presence at the 34th Annual General Meeting of the Company held on 14th August, 2019 at Center for
Environment Education, Nehru Foundation for Development, Vastrapur-Gurudwara Road, Ahmedabad: 380054 at 9.30 a.m.
_____________________________________________ _____________________________________________
Member’s / Proxy’s Name Signature of Member / Proxy
Shareholders / Proxy holders are requested to bring the attendance slip with them duly completed when they come to the meeting and
hand over at the Gate duly signed.

Johnson Controls-Hitachi Air Conditioning India Limited

Corporate Identification Number (CIN): L29300GJ1984PLC007470
Regd. Office: 9th Floor, Abhijeet, Mithakhali Six Roads, Ahmedabad: 380006 Phone: 079-26402024
E-mail:[email protected], Web: https://www.hitachiaircon.in/

34th Annual General Meeting on 14th August, 2019

PROXY FORM

Name of the Member(s) : _______________________________________________________________________________________

Registered Address : _______________________________________________________________________________________
E-mail Id : _______________________________________________________________________________________
Folio No. / DP ID No.-Client No. : _______________________________________________________________________________________
I/We being the member(s) of _______________________________________________ shares of the above named Company hereby appoint:
(1) Name __________________________________ Address ____________________________________________________________________
e-mail ID _______________________________ Signature _______________________________________________________ or failing him
(2) Name __________________________________ Address ____________________________________________________________________
e-mail ID _______________________________ Signature _______________________________________________________ or failing him
(3) Name __________________________________ Address ____________________________________________________________________

e-mail ID _______________________________ Signature ___________________________________________________________________

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 33rd Annual General Meeting of the Company to be
held on Wednesday, August 14, 2019 at Center for Environment Education, Nehru Foundation for Development, Vastrapur-Gurudwara Road,
Ahmedabad: 380054 at 9.30 a.m. and at any adjournment thereof in respect of such resolutions as are indicated below:

1. Adoption of Financial Statement for the year ended March 31, 2019
2. To declare Dividend for the year ended March 31, 2019
3. To re-appoint Mr. Yoshikazu Ishihara as Director who retires by rotation
4. To appoint Cost Auditors for the year starting from April 01, 2019 to March 31, 2020
5. To appoint Mr. Shinichi Iizuka as a Director of the Company
6. To re-appoint Mr. Ashok Balwani as Independent Director for 2nd term
7. To re-appoint Mr. Mukesh Patel as Independent Director for 2nd term
8. To increase maximum limit of remuneration of Mr. Gurmeet Singh, Chairman & Managing Director

Affix
1 Rupee
Signed this _______________day of ________________2019
Revenue
Signature of Shareholder: ___________________ Signature of Proxy Holder(s) ___________________ Stamp

Note: This form of Proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not
less than 48 hours before the commencement of the meeting.
Route map of AGM place Center for Environment Education, Nehru Foundation for Development,
Vastrapur-Gurudwara Road, Ahmedabad: 380054

Thaltej Cross
Roads

Acropolis Mall
SAL Hospital
Towards Thaltej Cross Roads

Towards SAL Hospital

Towards Gurudwara
Govinddham
Centre for Environment
Education Nehru Foundation

AGM Location

Ahmedabad Education
Society
NFD Circule

Towards Vastrapur