The Board of Directors has pleasure in presenting the 35th Annual Report and AuditedFinancial Statements for the financial year ended 31st March 2020 together with theIndependent Auditors' Report.
Your Company has achieved net Revenue from Operations of Rs. 2236.0 Million for theyear 2019-20 with a decline of 7.6% over previous year 2018-19. The decline in revenue wasas a result of disruption of business activities from early part of March 2020 and lockdown of the Company's factories and other establishments from of March 23 2020 due toCovid-19. All business activities including plants were locked down as mandated by theGovernment of India for controlling the unprecedented spread of Covid-19 pandemic. Profitafter tax for the year however increased by 2.8 % to Rs. 285.6 Million from the previousyear. The pandemic has affected India and the whole world and its impact on the economy isexpected to be significant.
Summarized financial results for the year are given below.
|Description ||2019-20 ||2018-19 |
|Revenue from Operations (net) ||2236.0 ||2419.2 |
|Profit before depreciation tax & finance cost ||424.3 ||419.5 |
|Less: Depreciation ||34.8 ||21.0 |
|Less: Finance Cost ||4.3 ||4.0 |
|Less: Tax Expenses (including deferred tax) ||99.6 ||116.7 |
|Profit after Tax ||285.6 ||277.8 |
|Add: Other Comprehensive income ||(1.2) ||1.0 |
|Total Comprehensive income for the year net of tax ||284.4 ||278.8 |
|Add: Balance in Profit & Loss account brought forward from previous year ||1343.5 ||1069.0 |
|Profit Available for Appropriation ||1627.9 ||1347.8 |
|Appropriations: || || |
|Final Dividend (proposed) including tax thereon ||3.6 ||4.4 |
|Balance in Profit & Loss Account ||1624.3 ||1343.4 |
|Earnings Per Share (Rs) ||196.4 ||191.03 |
|Market price per share as at March 31 (Rs) ||3380.0 ||6220 |
The Company has adapted Ind AS 116 "Leases" with the date of initialapplication being April 1 2019. On transition to Ind AS 116 Right-of-use assets as atApril 1 2019 for leases previously classified as operating leases were recognized andmeasured at an amount equal to lease liability. As a result the comparative informationhas not been restated.
PERFORMANCE OF THE COMPANY
The overall performance of your Company for the financial year 2019-20 was largelyimpacted during the fourth quarter of the year due to Corona virus (Covid-19) pandemic andconsequent country wide lockdown and complete stoppage of business activities from March23 2020. Company's revenue for the year reduced by 7.6% to Rs. 2236.0 Million howeverthe Profit after tax for the year increased by 2.8% to Rs. 285.6 Million from the previousyear 2018-19. Deliveries of equipment to the customers and deliveries from the supplierswere disrupted and stopped during the lock down period.
The Company was already witnessing the economic down turn in the Automobile industryfor the past 3 quarters of 2019-20 which resulted in low plant utilization of automotiveplants which in turn impacted the demand for castings in the industry. This had asignificant impact on the Company's order intake for the year. However the Company hasproactively reviewed its capacity and cost to realign to the lower demand and undertakenmeasures to bring down cost of input materials employee cost and other discretionaryexpenses. Focus on various lean initiatives were reinforced for improvement inproductivity. Despite the adverse economic trends and the effect of the pandemic theCompany has been able to register a decent performance for the year and it has been ableto serve its key customers and maintain its market share in all its major product lines.
The Company has taken significant steps to ensure the safety of employees during thepandemic by implementing 'work from home' option during the lockdowns and providedcontinuous guidance in travels and related matters. Guidance were provided from thehighest level of the Company programs were conducted to provide assistance to allemployees create awareness prevention and corrective action in regular intervals.Standard Operating Practices (SOP) in the offices and factories were implemented andstrict adherence to the SOP was enforced. Business Continuity Plan (BCP) was prepared andupdated at regular intervals to ensure the control on both business and employees' safety.
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business of the Company during the financialyear.
Considering the dividend history of the Company and keeping in view the future outlookyour Board of Directors recommends a final Dividend of Rs. 2.50/- (i.e. 25%) per EquityShare of Rs.10/- each for the year amounting to Rs. 3.6 Million. It is important to notethat tax on dividend will henceforth be paid by the recipients as provided in the FinanceAct 2020. Information about taxation of dividend is included in AGM Notice.
The Company has not proposed to transfer any amount to the general reserve.
The Authorized Equity Share Capital of your Company is Rs. 50 Million. The IssuedSubscribed and Paid-up Equity Share Capital of your Company as on 31st March 2020 stood atRs. 14.54 Million.
During the year under review the Company has not issued any shares with differentialvoting rights nor granted Stock Options or Sweat Equity. The Company has also not boughtback any of its shares during the year under review. As on March 31 2020 no otherDirectors held shares or convertible instruments of the Company except the ManagingDirector who held 10 (ten) shares of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
ECONOMIC SCENARIO AND OUTLOOK
The Year 2020-21 starts with a lot of uncertainties due to COVID- 19 situation. It hascreated alarming issues for mankind and businesses. Never in the history has anyone seensuch an unprecedented nature of a global pandemic and it is unknown to all as to how longand how deep this would hit the humans and the business. The continuous lockdown situationover the last few months has put all activities of the companies in disarray. The decisionto start with few activities as mandated by the Governments has not helped to make goodstart of operations. The supply chain is disrupted its suppliers and customers facilitiesare not fully operational to full capacity as we write this report.
The Index of Industrial Production (IIP):
The GDP estimates for the country from all quarters seem to be projecting a significantcontraction by almost 4% to 5% for the FY 2020-21. Underutilization of existing capacitiesand liquidity is a big issue and it will impact the pace of growth of capital goodsindustry. This is a year of unpredictability for all the businesses and your Company is noexception to it. However the Company has the inherent ability to act and respond to theever-changing external developments from time to time.
INDUSTRY OUTLOOK AND OPPORTUNITIES
IIP & PMI have historically been good indicators for business sentiments in CapitalGoods Order Intake.
The forecast for both IIP and PMI is significantly down. This is expected to have alarge-scale impact on the Company's performance in future. India had witnessed the COVID19 on an already subdued economic scenario and this has made matters worse. GDP growth of7% in 2018-19 has declined to 5% in 201920 and projection for year 2020-21 is negative.It reflects the state of the current Indian economy. While business activity of India isexpected to witness a reduction during 2020-21 a slow recovery in the business isexpected in the year 2021-22.
In the long term the Government spending on Railways Defense and Infrastructure andthe FDI investments in various other sectors shall continue to play an important role inthe revival of the economy.
Manufacturing PMI :
Your Company's resolve in this situation is to continue to lead the industry andconsolidate its position further in the Indian market.
Your Company's offer to the market has been to provide Full Foundry Solutions for HighPressure Moulding lines under one umbrella of Norican. The Company has furtherstrengthened it through Norican Digital offer. The new Norican Digital offer is tointegrate the full foundry in a highly automated environment and provide productivityenhancement solutions to Company's valued customers by integrating Artificial Intelligenceand Machine Learning approach.
Apart from the above your Company has now created ease of doing business for itsAftermarket customers by appointing 4 distributors in India. This is to cover the marketsfor South North West and East India. The Company has moved the stocks of spares closerto the customer locations which provide them easy access to availability and delivery.
As required by SEBI (LODR)(Amendment) Regulations 2018 the Company is required tofurnish the details of significant changes (i.e. change of 25% or more as compared to theimmediately previous financial year) in key financial ratios along with detailedexplanations for the changes.
The Company has identified the following ratios as Key financial ratios:
|Particulars || |
|2019-20 ||2018-19 ||Change % ||2019-20 ||2018-19 ||Change % |
|Operation Profit Margin (EBITA) % ||14.0% ||13.6% ||3% ||14.0% ||13.6% ||3% |
|Net Profit Margin % ||12.8% ||11.5% ||11% ||12.7% ||11.4% ||12% |
|Debtor Turnover Ratio % ||8.2% ||7.8% ||5% ||8.4% ||8.3% ||1% |
|Inventory Turnover Ratio % ||24.6% ||26.6% ||-7% ||24.1% ||25.9% ||-7% |
|Earnings Per Share (Rs) ||196.40 ||191.03 ||3% ||203.41 ||196.74 ||3% |
During the year there were no significant changes in the above key ratios.
The details of return on net worth at standalone and consolidated levels are givenbelow:
|Particulars || |
|2019-20 ||2018-19 ||Change % ||2019-20 ||2018-19 ||Change % |
|Return on Net Worth % ||17.4% ||20.4% ||-15% ||17.8% ||20.8% ||-15% |
Return on net worth is computed by dividing the net profit by year end net worth.Sluggish growth in Net profit during the year has reduced the return on Net worth.
CORPORATE SOCIAL RESPONSIBILITY
Your Company is committed to comply with Corporate Social Responsibility as a goodcorporate citizen. The Directors are pleased to report that the Company is diligentlypursuing its efforts to support the community circles in which it operates. The Company'sCSR program titled "NORICAN Scholarship has helped in providing financialassistance to less privileged students up to standard twelve as well to students seekingdiplomas in Engineering.
"NORICAN Scholarship program has made scholarship available to students ineight educational institutions in the neighborhood of our plants situated at Tumkur andHosakote in Bengaluru. During the financial year scholarships were provided to 289 needystudents. In addition your Company also invested in infrastructure development for theschools to provide drinking water teaching aids and School sanitation. Your Company hasalso extended scholarships to 51 meritorious Engineering students through an NGO'Foundation for Excellence India Trust'.
The Company has also partnered with the National Institute of Foundry and ForgeTechnology (NIFFT) Ranchi and put in place a scholarship in the name of "JanJohansen DISAMATIC Scholarship to provide scholarship to 5 top meritorious studentsevery year to create Industry Academia interface to create future foundry men. During theyear the Company has spent Rs. 0.375 Million towards this scholarship.
The Company's policy on Corporate Social Responsibility is available on the website ofthe Company at https:// www.disagroup.com/en-in/investor-relations/policies.
The Composition of CSR Committee details of the amounts spent during the currentfinancial year and the manner in which it was spent are provided in Annexure"A.
Your Company has formulated a Risk Management Policy and a mechanism to apprise theBoard about risk assessment and mitigation procedure. It also undertakes periodical reviewto ensure that Executive Management controls risks by means of properly designed riskmanagement framework.
All the insurable assets of the Company are deemed to have been adequately insured.
As an established practice at each Meeting of the Board the Directors are updated onrisk identification and steps taken to mitigate the same. Risk Management Policy is hostedon the Company's website at https://www.disagroup.com/en-in/ investor-relations/policies.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has a Whistle Blower Policy for vigil mechanism which is available onwebsite of the Company at https:// www.disagroup.com/en-in/investor-relations/policies/.To the extent that complaints are raised they are dealt with as per this policy. Nocomplaints have been substantiated during the last year.
DIRECTORS AND KMP
The Company has three Key Managerial Persons (KMP) Mr. Lokesh Saxena ManagingDirector Mr. Amar Nath Mohanty Chief Financial officer and Mr. G. Prasanna BairyCompany Secretary & Compliance Officer.
Mr. Sanjay Arte who was appointed as the Chairman of the Company with effect from July12 2019 continues to steer the Board of Directors.
Mr. Anders Wilhjelm Mr. Andrew James Matsuyama and Ms. Ulla Hartvig Plathe Tonnesenwere appointed as Additional Directors with effect from July 12 2019. During the last AGMheld on August 8 2019 they have been appointed as Directors.
In terms of the provisions of the Companies Act 2013 and the Articles of Associationof the Company Mr. Anders Wilhjelm Director retires at the forthcoming Annual GeneralMeeting and being eligible offers himself for re-appointment.
The first term of five years of all the three Independent Directors of the Companyexpired in February 2020 and March 2020. Mr. Sanjay Arte Independent Director and Ms.Deepa Hingorani Independent Director being eligible for re-appointment for a second termwere approved by Shareholders in the Annual General Meeting held on August 8 2019.However Mr. Shyamal Kumar Sinha Independent Director did not seek his re-appointment forthe second term owing to his personal reasons and his term expired on March 22 2020. Mr.Sinha ceases to be a Director of the Company from the said date. Your Board places onrecord its appreciation for the relentless support and guidance extended by Mr. ShyamalKumar Sinha during his tenure as Director of the Company.
The first tenure of three-years of Mr. Lokesh Saxena Managing Director of the Companyexpires on June 20 2020. Nomination & Remuneration Committee and the Board ofDirectors in their respective meetings held on June 3 2020 have approved thereappointment of Mr Lokesh Saxena as Manging Director of the Company for another term ofthree years from June 21 2020 to June 20 2023 as per the terms and conditions and theremuneration as set out in the AGM Notice subject to the approval of the Shareholders.
Your Board is happy to note that both Independent Directors i.e. Ms. Deepa AgarHingorani and Mr. Sanjay Narendrakumar Arte have maintained highest standards of integrityin their dealings with the Company. They also possess the requisite expertise andexperience (including Proficiency) necessary for acting as Independent Directors of theCompany.
As required by the Companies (Appointment and Qualification of Directors) FifthAmendment Rules 2019 and the Companies (Creation and Maintenance of databank ofIndependent Directors) Rules 2019 Ms. Deepa Agar Hingorani and Mr. Sanjay NarendrakumarArte have registered their names in the data bank of Independent Directors maintained byIndian Institute of Corporate Affairs. However since both have been serving as Directorsfor not less than 10 years as on the date of registration they are exempt from passingthe online proficiency selfassessment test as specified in the amended Rules. AnnualDeclarations received from both of them for the year 2019-20 contain affirmationsregarding registrations in the data bank.
The Remuneration Policy of the Company for appointment and remuneration of theDirectors Key Managerial Personnel and Senior Executives of the Company and other relatedinformation have been provided in the Corporate Governance Report which forms part of thisreport.
Policy on appointment and remuneration of Directors and KMPs is available on thewebsite of the Company at https:// www.disagroup.com/en-in/investor-relations/policies/.
Declarations under Section 149(7) of the Companies Act 2013 have been received fromall the Independent Directors of the Company confirming that they meet the criteria ofindependence as provided in Sub-Section 6 of Section 149 of the said Act and as per theSEBI (LODR) Regulations 2015 (The Listing Regulations).
On October 22 2019 MCA had released the Companies (Accounts) Amendment Rules 2019the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules 2019 andthe Companies (Creation and Maintenance of databank of Independent Directors) Rules 2019.These rules have come into force on December 1 2019 and your Company has complied withthese requirements.
SEBI (LODR)(Amendment) Regulations 2018 has changed the evaluation criteria ofIndependent Directors from April 1 2019. As per the amendment evaluation of IndependentDirectors by the entire Board shall include:
(a) Performance of Directors and
(b) Fulfilment of independence criteria as specified in LODR Regulations 2015 andtheir independence from the management.
Board has evaluated the Independent Directors and confirms that Ms. Deepa Hingorani andMr. Sanjay Arte fulfilled the independence criteria as specified in LODR Regulations 2015and their independence from the management.
Details on terms of appointment of Independent Directors and the familiarizationprogram have been displayed on website of the Company athttps://www.disagroup.com/en-in/investor- relations/policies/.
MEETINGS OF THE BOARD OF DIRECTORS
During the financial year five (5) Meetings of the Board of Directors were held asrequired under the Companies Act 2013 and the Listing Regulations. The details of theMeetings are furnished in the Corporate Governance Report.
The Meetings of the Board are held at regular intervals with a time gap of not morethan 120 days between two consecutive Meetings. The Ministry of Corporate AffairsGovernment of India vide its circular dated March 24 2020 has increased the maximum timegap between two meetings to 180 days until September 30 2020 in view of the Covid-19pandemic. The previous meeting of the Board of Directors of the Company was held onFebruary 05 2020 and the next meeting of the Board was held on June 3 2020 which waswithin the extended time gap of 180 days. The Agenda of the Meetings were circulated toDirectors in advance. Minutes of the Meetings of the Board of Directors were circulatedamongst the Directors for their perusal.
Pursuant to the requirements of the Companies Act 2013 and the Listing Regulationsthe Board of Directors has carried out an annual evaluation of its own performance itsCommittees and of individual Directors.
Further the Independent Directors at their exclusive Meeting held on February 52020 reviewed the performance of the Board its Chairman and Non-Executive Directors andother items as stipulated under the Listing Regulations. The Independent Directors havealso declared their independence. The Nomination and Remuneration Committee has reviewedthe existing criteria for evaluation of performance of the Independent Directors and theBoard and reviewed the existing policy of remuneration of Directors.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement: -
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that year;
(c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern basis;
(e) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
INTERNAL FINANCIAL CONTROL
Your Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. Internal Controls in the Company have been designed tofurther the interest of all its stakeholders by providing an environment which isfacilitative to conduct its operations and to take care of inter alia financial andoperational risks with emphasis on integrity and ethics as a part of work culture.
The scope and authority of the Internal Audit (IA) is defined every year by the AuditCommittee. To maintain its objectivity and independence the Internal Auditors report toChairman of the Audit Committee and the Board. The Internal Auditors monitor and evaluatethe efficacy and adequacy of internal control system in the Company and its compliancewith accounting procedures financial reporting and policies at all locations of theCompany. Based on the report of internal audit process owners undertake corrective actionin their respective areas and thereby strengthen the controls. Any significant auditobservations and corrective actions thereon are presented to the Audit Committee and theBoard. No major internal control weakness was identified during the year. The Company alsohas a well-functioning Whistle Blower Policy in place.
The Board has appointed M/s. Protiviti India Member Private Limited as InternalAuditors of your Company for the year 202021 in place of M/s. Dandekar & CompanyChartered Accountants.
Your Company has neither accepted nor renewed any Deposits from the public within themeaning of the Companies Act 2013 and hence no amount of principal or interest wasoutstanding on the date of the Balance Sheet and also on the date of this Report.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
Your Company has one Wholly Owned Subsidiary "Bhadra Castalloy PrivateLimited (Formerly Bhadra Castalloys Private Limited).
The performance of Subsidiary during the financial year 2019-20 being the fourth yearof operations has been quite satisfactory. The audited financial results of the WhollyOwned Subsidiary for the financial year ended March 31 2020 are consolidated with thefinancial results of the Company for the financial year. Revenue from operations andProfit after tax of the Subsidiary Company were Rs. 111.8 Million and Rs. 10.2 Millionrespectively. Revenue from operations for the year was 0.7% lower but the Profit after taximproved by 22.9% as compared to previous year.
Consolidated Revenue from Operations of the Company for the year was Rs. 2333 Millionfor the year as against Rs. 2516.7 Million in the previous year with a decline of 7.3%.
Statement relating to Subsidiary Company in Form AOC-1 is part of this report.
Your Company did not have any Joint Venture or Associate Company as at the end of thefinancial year.
RELATED PARTY TRANSACTIONS
All related party transactions which were entered during the financial year were in theordinary course of business on an arm's length basis and were as per prior omnibusapprovals of the Audit Committee. There are no materially significant related partytransactions made by the Company with Promoters Directors Key Managerial Personnel orother designated persons which may have a potential conflict with the interest of theCompany at large.
All the related party transactions were placed before the Audit Committee as well asthe Board for approval. Prior omnibus approval of the Audit Committee was obtained on ayearly basis for the transactions which are of a foreseen and repetitive nature. Thetransactions entered into pursuant to the omnibus approval so granted are audited and astatement giving details of all related party transactions is placed before the AuditCommittee and the Board of Directors for their noting/approval on quarterly basis. Thedetails of all related party transactions are disclosed in the SI. No. 40 of the Notesforming part of the Financial Statements.
None of the Directors have any pecuniary relationships or transactions vis-a-vis theCompany.
Form for disclosure of particulars of contracts/arrangements entered into by theCompany with related parties in Form AOC-2 is part of this report.
The Policy on related party transactions as approved by the Board is uploaded on theCompany's website and the details of all the related party transactions are disclosed inthe financials. None of the Directors has any pecuniary relationships or transactionsvisa-vis the Company. The 'Related Party Transaction Policy' is available on website ofthe Company at https:// www.disagroup.com/en-in/investor-relations/policies.
Persons constituting Group coming within the definition of "Group as definedin the Competition Act 2002 includes the following:
|Name of Subsidiary ||Country |
|1 WGH Holding Corp ||British Virgin Islands |
|2 Wheelabrator Group (Canada) ULC ||Canada |
|3 DISA (Changzhou) Machinery Ltd. ||China |
|4 DISA Trading (Shanghai) Co. Ltd. ||China |
|5 Italpresse Industrie (Shanghai) Co. Ltd. ||China |
|6 Kunshan Italpresse Die-Casting Equipment Co Ltd ||China |
|7 StrikoWestofen Thermal Equipment (Taicang) Ltd. ||China |
|8 Wheelabrator Czech S.r.o. ||Czech Republic |
|9 DISA Holding A/S ||Denmark |
|10 DISA Holding II A/S ||Denmark |
|11 DISA Industries A/S ||Denmark |
|12 Norican A/S ||Denmark |
|13 Norican Global A/S ||Denmark |
|14 Norican Group ApS ||Denmark |
|15 Norican Holdings ApS ||Denmark |
|16 Wheelabrator Group SAS ||France |
|17 DISA Industrieanlagen GmbH ||Germany |
|18 Light Metal Casting Equipment GmbH ||Germany |
|19 Light Metal Casting Solutions Group GmbH ||Germany |
|20 LMCS Group Holding GmbH ||Germany |
|21 Norican Digital GmbH ||Germany |
|22 OFT Oberflachentechnik Maschinen und Werkzeuge Handels Gmbh ||Germany |
|23 StrikoWestofen GmbH ||Germany |
|24 SWO Holding GmbH ||Germany |
|25 Wheelabrator Berger Stiftung GmbH ||Germany |
|26 Wheelabrator Group GmbH ||Germany |
|27 Wheelabrator Group Holding GmbH ||Germany |
|28 Wheelabrator OFT Gmbh ||Germany |
|29 DISA Limited Hong Kong ||Hongkong |
|30 Bhadra Castalloy Private Limited ||India |
|31 DISA India Ltd. ||India |
|32 DISA Technologies Private Ltd. ||India |
|33 Gauss Automazione S.p.A. ||Italy |
|34 Italpresse France S.a.r.l. ||Italy |
|35 Italpresse Industrie S.p.A. ||Italy |
|36 Walter Trowal Sa.r.l. ||Italy |
|37 DISA K.K. ||Japan |
|38 IP Mexico Die Casting S.A. de C.V. ||Mexico |
|39 StrikoWestofen de Mexico S.A. de C.V. ||Mexico |
|40 WG Plus de Mexico S de RL de CV ||Mexico |
|41 WG Plus Servicios S de R. I de CV ||Mexico |
|42 SWO Polska Sp. Z.o.o. ||Poland |
|43 Wheelabrator Schlick Sp. Z.o.o. ||Poland |
|44 Wheelabrator Group SLU ||Spain |
|45 DISA Holding AG ||Switzerland |
|46 DISA Industrie AG ||Switzerland |
|47 Striko UK Ltd. ||United Kingdom |
|48 WGH UK Holdings Limited ||United Kingdom |
|49 WGH UK Ltd. ||United Kingdom |
|50 Wheelabrator Group Ltd. ||United Kingdom |
|51 Wheelabrator Technologies (UK) Ltd. ||United Kingdom |
|52 Castalloy Inc. ||United States |
|53 DISA Holding LLC ||United States |
|54 DISA Industries Inc. ||United States |
|55 Italpresse of America Inc. ||United States |
|56 StrikoWestofen Dynarad Furnace Corp. ||United States |
|57 WG Global LLC ||United States |
|58 Wheelabrator (Delaware) LLC ||United States |
|59 Wheelabrator Group Inc. ||United States |
|60 Impact Finishers Ltd. ||United Kingdom |
|61 Matrasur Composites SAS ||France |
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYBETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT
There were no material changes and commitments between the end of the financial yearand the date of the report which affects the financial position of the Company.
PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN OR SECURITY PROVIDED BYTHE COMPANY
Your Company has made an investment of Rs. 44 Million in the Equity Share Capital ofits Wholly Owned Subsidiary Company Bhadra Castalloy Private Limited. It has extendedinterest-bearing intercompany demand loan of Rs. 26 Million for purpose of financing thepurchase considerations paid for acquisition of the foundry by the Subsidiary. The Companyhad also given a Corporate Guarantee of Rs. 35 Million to Kotak Mahindra Bank on behalf ofits subsidiary for providing banking facilities. The above Investment in equity loanextended and guarantees given are well within limits prescribed under the provisions ofSection 186 of the Companies Act 2013.
Pursuant to provisions of Section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 the Company at its 33rd AGM held on August 92018 had appointed M/s. Deloitte Haskins & Sells Chartered Accountants as StatutoryAuditors of the Company for a second and final term of 5 years from the financial year2018-19 to 2022-23.
During the year the statutory auditors have confirmed that they satisfy theindependence criteria as per Companies Act 2013 and Code of ethics issued by theInstitute of Chartered Accountants of India.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 the cost records maintained by the Company inrespect of its activity are required to be audited. Your Directors have in their Meetingheld on May 23 2019 based on the recommendation of the Audit Committee appointed M/s.Rao Murthy & Associates Bengaluru as Cost Auditors of the Company for the financialyear ended 31st March 2020.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed Mr. Vijayakrishna KT Bengaluru a Company Secretary in Whole Time Practiceto undertake the Secretarial Audit of the Company for the financial year ended 31st March2020. The Report of the Secretarial Auditor is annexed in Annexure-B.
EXPLANATION BY BOARD ON ADVERSE COMMENTS BY AUDITORS
There were no adverse comments by the Auditors of the Company and hence noexplanations are provided.
As required under the Listing Regulations certificates from Mr. Vijayakrishna KTPractising Company Secretary regarding compliance with conditions of Corporate Governanceas well as a confirmation [as required by Schedule V Part C (10)(i)] that none of thedirectors on the Board of the Company have been debarred or disqualified from beingappointed or continuing as directors of companies by the SEBI/Ministry of CorporateAffairs or any such statutory authority are annexed as Annexure C.
Report on Corporate Governance is annexed as Annexure D .
As required by SEBI (LODR)(Amendment) Regulations 2018 'Annual Secretarial ComplianceReport' issued by Mr. Vijayakrishna KT Practising Company Secretary for the financialyear ended 31st March 2020 has been filed with BSE on June 16 2020 within the extendeddue date of July 31 2020.
Further in compliance with the Listing Regulations your Board has adhered to theCorporate Governance Code. All the requisite Committees are functioning in line with theguidelines.
As reported earlier a reputed firm of independent Chartered Accountants has beencarrying out the responsibilities of Internal Audit of the Company and periodicallyreporting their findings on systems procedures and management practices.
BUSINESS RESPONSIBILITY REPORT
From this year onwards your Company is required to include Business ResponsibilityReport in the Annual Report describing the initiatives taken by the Company fromenvironmental social and governance perspective. Business Responsibility Report isannexed as Annexure D.
Industrial relations have been cordial and constructive which have helped your Companyto achieve production targets. The Company's three-year long-term agreement with theworkmen union which had expired on September 30 2018 was renewed on July 4 2019 and waseffective from October 01 2018 to September 30 2021.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY
The company's constant endeavor is to reduce consumptions of energy in all forms and atall levels in the manufacturing facilities and in offices. Traditional lighting systemshave been replaced with energy efficient lightings in all locations which has reduced theenergy consumptions.
Your Company gives highest priority to conservation of energy through bettersupervision and training of employees to reduce the usage of electricity.
TECHNOLOGY ABSORPTION RESEARCH AND DEVELOPMENT
Your Company has been continuously seeking and adapting new technology from Principalsin order to develop skills locally and meet specific needs of Indian and global customers.Personnel at all levels are routinely sent to Principal's factories and design officesabroad for training and updating their skills.
During the financial year your Company has not spent any amount on Research andDevelopment.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company earned Rs. 250.6 Million of foreign exchange and expended Rs. 326.1 Millionforeign exchange during the financial year under review.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) of the Companies Act 2013 and the Companies (Management andAdministration) Rules 2014 a copy of the annual return is provided as Annexure E to thisReport and is placed on the website of the Company at https://www.disagroup.com/en-in/investor-relations.
MATERIAL ORDER PASSED BY ANY COURT OR REGULATOR OR TRIBUNALS IMPACTING GOING CONCERNSTATUS OF COMPANY
There were no orders passed by any Court or Regulator or Tribunal during the year underreview which impacts the going concern status of the Company.
PARTICULRS OF EMPLOYEES
During the year there was one employee receiving remuneration exceeding Rs.10200000/- (Rupees One Crore Two Lakhs only) per annum and/or Rs. 850000/- (RupeesEight Lakhs Fifty Thousand only) per month. The details are as under:
|Name of the employee ||Designation ||Remuneration |
| || ||(in Rs. Million) |
|Mr. Lokesh Saxena ||Managing Director ||12.67 |
There were no employees posted and working in a country outside India not beingDirectors or relatives drawing more than the amount prescribed under the Rule 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014. Hence thedetails are not required to be circulated to the Members and also not required to beattached to this Annual Report.
The statement containing names of top ten employees in terms of remuneration drawn andthe particulars of employees as required under Section 197(12) of the Act read with Rule5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules 2014 is provided in a separate annexure (Annexure F)forming part of this report. Further the report and the accounts are being sent to theMembers excluding the aforesaid annexure. In terms of Section 136 of the Act the saidannexure is open for electronic inspection at the Registered Office of the Company. AnyMember interested in obtaining a copy of the same may write to the Company Secretary.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place a Gender-Neutral Policy on Zero Tolerance towards SexualHarassment at Workplace in line with the requirements of the Sexual Harassment of Women atthe Workplace (Prevention Prohibition & Redressal) Act 2013. Internal ComplaintsCommittee (ICC) has been set up to redress complaints received regarding sexualharassment. All employees (permanent contractual temporary trainees) are covered underthis Policy.
The following is a summary of sexual harassment complaints received and disposed offduring the financial year 2019-20:
No of complaints received: NIL. No of complaints disposed off: NIL.
Your Directors place on record the appreciation for valuable contribution made byemployees at all levels active support and encouragement received from the Government ofIndia the Government of Karnataka Company's Bankers Customers Principals BusinessAssociates and other Acquaintances.
Your Directors recognize the continued support extended by all the Shareholders andgratefully acknowledge with a firm belief that the support and trust will continue in thefuture also.
| ||For and on behalf of the Board of Directors |
| ||For DISA India Limited |
| ||Sanjay Arte |
|Date : June 3 2020 ||Chairman |
|Place: Mumbai ||DIN:01000716 |