Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Sourcing of Component: Increasing trend of Chinese products acceptance in the market due to longer delivery periods.
• Market Risk: Oil prices have not improved in the Middle East market.
• Exchange Risk: Exchange rate fluctuations.
• Manpower Requirement: Shortage of skilled local labor.
• Power: Power cuts and interruptions.
• Chinese Factor: Increased competition from Chinese companies in export markets.

Mitigation Strategies

• Increase production capacities of component suppliers and create additional manufacturing capacity in-house.
• Explore alternate markets like Africa, Iran, and Australia.
• Expect exchange rate to be stable due to RBI policies.
• Modernize manufacturing methods by mechanization and automation.
• Buy power directly from private power producers.
• Maintain market share with shorter deliveries, increased production capacities, and new product designs.

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• fittings for 2” and under pipe sizes in Ductile Iron
• several items in Stainless Steel products for railway brake systems and water treatment plants

Environmental Metrics

Environmental Achievements

• Replaced most of the less efficient machines with newer and less power consuming equipments in all the areas of manufacturing.
• Long term contract has been executed with wind energy suppliers thereby reducing costs and less dependency on fossil fuel energy. Nearly 80% of the energy requirement will be from wind energy.

Social Achievements

• Relationship with the employees/labor was cordial during the year under review.
• Company envisaged a project of constructing a school building at a Government Municipal School at Madhapur village at a cost of Rs 27 lacs.

Governance Achievements

• All Directors and senior management of the Company have affirmed Compliance with the Code of Conduct of National Fittings Limited for the financial Year ended 31st March 2017.
• The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

Climate Goals & Targets

Environmental Challenges

• Due to the continuing low crude oil prices the countries In the Middle East have reduced their spending on infrastructure like high rise residential buildings, shopping malls, hotels and convention halls where our products are being used in Fire Protection and Air Conditioning systems.
• Competitive prices from China have made it difficult to get approvals on new projects.
• Frequent change of man power in critical operations are presenting a challenge in training of unskilled new labor.

Mitigation Strategies

• Backlog of orders for the existing projects will allow us to maintain our sale at reduced margin during the next 10 months.
• Company is working with the component suppliers to improve productivity and reduce costs.
• Steps have been taken by replacing the older equipments with relatively higher production machines to improve productivity in house and reduce costs.
• Company has been increasing the salary and other benefit structure substantially to retain local and expat labor.
• Also steps have been taken to mechanize more of the operations, to improve productivity and utilizing semi-skilled labor.
• Company has developed larger size fittings to HVAC market. Also the Company has developed and will be getting approval from testing agencies for new products to stay ahead of competition.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Community Development
• Energy Conservation
• Water Conservation

Environmental Achievements

• Completed the construction of a school building at a Government Municipal School at Madhapur village at a cost of Rs 34.56 lacs.
• Company has replaced most of the less efficient machines with newer and less power consuming equipments in all the areas of manufacturing.
• Long term contract has been executed with wind energy suppliers there by reducing costs and less dependency on fossil fuel energy. Nearly 80% of the energy requirement will be from wind energy.

Social Achievements

• Relationship with the employees/labor was cordial during the year under review.
• Company continuous to rely on expat labour from northern belt for nearly 70% of work force due to non-availability of local labour in production areas.
• Company has installed more automated machine operations to reduce manpower.

Governance Achievements

• All Directors and senior management of the Company have affirmed Compliance with the Code of Conduct of National Fittings Limited for the financial Year ended 31st March 2018.
• The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

Climate Goals & Targets

Environmental Challenges

• Input costs have increased nearly 20% resulting in the total cost increase by 10-12%. Due to the increased competition from China and other companies using China as a manufacturing base has resulted in reduction of selling price nearly 20% from last year prices. Cost increase and the reduction in selling price has eroded our margin substantially. Export market is becoming more and more unviable.
• Indian currency did not depreciate enough to offset the input cost increase and to meet the low cost products from China in the international markets. China has depreciated their currency nearly 10% during the last six months.
• Company has been buying wind power for nearly 10 months of the year and has resulted in reduction of power cost in total cost of production. Grid power supply has improved substantially.
• Company continuous to rely on expat labour from northern belt for nearly 70% of work force due to non-availability of local labour in production areas. Cost of manpower has nearly doubled in the last one year.

Mitigation Strategies

• Company is taking effective steps to increase our domestic market share by appointing distribution network and regional sales personnel.
• Company has taken steps to re-design the products by optimizing the weight without scarifying performance and has resulted in input cost reduction.
• Company has taken steps to diversify the product base into pumps for domestic and international market requirements. Design will be attractive enough to get a acceptable share of the domestic and export market. Developed models are under testing and will be into production line during the current year. Company will provide the major components like casting in Iron and Stainless Steel. Machining and assembly will be done by outside sources.
• Company has installed more automated machine operations to reduce manpower.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• More of the manufacturing infrastructure units have been replaced with more efficient units. Input and output norms have been improved to reduce energy usage. More of the energy required is being bought from renewable energy sources.

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Continued competition from China on exports; Non-availability of qualified labor force; Increase in input costs due to abnormal price increase in raw-materials; Foreign currency to rupee exchange rate volatilities.

Mitigation Strategies

• Increase selling price; Utilize balance capacity for manufacturing components for pump, valve and automotive segments; Mechanize operations; Improve productivity without increasing operational cost; Increase domestic market sales; Select export markets with better prices.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• CSR

Environmental Achievements

• Replaced older furnaces with new power-saving units; continues to buy renewable energy.

Social Achievements

• Cordial relationship with employees; no sexual harassment complaints received.

Governance Achievements

• Compliance with Corporate Governance guidelines; all Directors and Senior Management affirmed compliance with Code of Conduct.

Climate Goals & Targets

Environmental Challenges

• Severe competition from Chinese manufacturers; non-availability of skilled manpower; high raw material prices; exchange rate fluctuations.

Mitigation Strategies

• Maintaining market share through large-size fittings; mechanising production; subcontracting to small businesses; evaluating production methods to improve yields; increasing domestic market sales.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Commodity Price Volatility
• Market Competition
• Regulatory Compliance
• Foreign Exchange Risk
• Supply Chain Disruptions
• Economic Downturns
• Man power availability

Mitigation Strategies

• Improving yields, reducing rejections and diversifying supply sources
• Focusing on items where competition is not competitive, improving quality and customer service, making inroads into the domestic infrastructure market
• Investing in staying updated with regulatory changes, maintaining certifications, and implementing robust compliance procedures
• Increasing domestic market share
• Working with distribution channels to maintain higher buffer stocks and contingency plans
• Diversifying customer base, maintaining strong relationships with key distributors, and implementing cost-saving measures
• Consolidating operations to reduce skilled manpower requirements and pursuing subcontract manufacturing

Supply Chain Management

Climate-Related Risks & Opportunities