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G G Dandekar Machine Works Ltd.

BSE: 505250 Sector: Engineering
NSE: N.A. ISIN Code: INE631D01026
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VOLUME 1029
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P/E 1.83
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OPEN 65.00
CLOSE 61.75
VOLUME 1029
52-Week high 81.70
52-Week low 56.30
P/E 1.83
Mkt Cap.(Rs cr) 30
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

G G Dandekar Machine Works Ltd. (GGDANDEKAR) - Director Report

Company director report

#MDStart#

MANAGEMENT DISCUSSION & ANALYSISREPORT:

To the Members

G. G. DANDEKAR MACHINE WORKS LIMITED

Your Directors have the pleasure of presenting the 83rdAnnual Reportwith the Audited Statement of Accounts of the Company for the year ending 31st March 2022.

Financial Performance

(Amt in Rs. Lakhs)

Particulars Standalone Consolidated
2021-22 2020-21 2021-22 2020-21
Total Income 2138.44 524.79 2138.44 524.79
Profit/(Loss) before exceptional items and tax 1720.83 (112.04) 1720.83 (112.04)
Exceptional Items - - - -
Profit before tax 1720.83 (112.04) 1720.83 (112.04)
Tax Expense (Current and Deferred Tax) 75.53 2.63 75.53 2.63
Net Profit/(Loss) after Tax 1645.30 (114.67) 1645.30 (114.67)
Share of Profit of Associate Company - - 2.85 122.24
Net Profit/(Loss) for the period 1645.30 (114.67) 1648.15 7.57
Other Comprehensive Income -97.97 1096.91 -97.97 1096.91
Total Comprehensive Income for the year net of tax 1547.33 982.25 1550.19 1104.48

Note: Consolidated results show the company's sharein the netprofit of the associate company viz. Navasasyam Dandekar Private Limited.

DIVIDEND

Your Directors do not recommend any dividend for the financial year2021-22.

MANAGEMENT DISCUSSION & ANALYSIS REPORT:

1. This section includes discussion on the following matters within thelimits set by the Company's Competitive position:

(A) OVERVIEW

G G Dandekar Machine Works Limited (The Company) is addressing RiceMilling Machinery business. The company is capable of addressing products as well asturnkey solution for rice milling plants. Rice milling machinery business is cyclic innature as such company decided to address non-rice grains and successfully developedmachinery for millets wheat spices etc. It validated company's thought process to enterin non-rice grain processing machinery.

After careful analysis and considering opportunities in non-rice grainsector the company decided to take a concrete step in focusing on this business. Therequirement was addressed by forming an associate company with subject experts who broughtin with them rich industry experience. The new associate company has shown quick positiveresults and gains for the company. It has helped company to graduate from existing ricemilling machinery business to various other grains legumes and spices etc.

Considering the developments in the economic and commercialenvironment the Company has diversified into real estate and leasing of property businessby making modification in the object clause of Memorandum of the Company. The recentchange in the object clause will help the company in securing moderate to lucrativebusiness opportunities. The change will also help in generating steady returns over thelong term which shall ensure consistent value creation for the members of the company.The Company foresees appreciation in the value of land and real estate based on the risein demand for real estate spaces which may positively impact the financial performance ofthe Company.

(B) INDIAN ECONOMY

In its February 10 2022 Report the Reserve Bank of India (RBI) statedthat "Notwithstanding a highly transmissible third wave driven by the Omicron variantof COVID-19 India is charting a different course of recovery from the rest of the world.India is poised to grow at the fastest pace year-on-year among major economies accordingto projections made by the International Monetary Fund (IMF)".

The Organization for Economic Co-operation and Development (OECD) inits interim economic outlook report of December 2021 has stated that the economic shockhas been weaker than during the 2020 wave. Since the summer of 2021 growth has reboundedpulled by exports consumer demand and more importantly a very strong base effect.Prospects of an economic rebound in India are firming up as GDP is set to expand by 8.1%in FY 2022-23 supported by the increasing pace of vaccination which is boostingconsumers' sentiment and relaxations in curbs imposed in view of the pandemic.

We are hopeful that the economy will return to pre-pandemic levels in2022-23 fiscal year.

(C) INDUSTRY STRUCTURE AND DEVELOPMENT

The Company now operates in two verticals viz. manufacturing ofmachinery and real estate & leasing of property business.

Manufacturing Of Machinery:

The Company's business is manufacturing Food Processing Machineriesespecially for Rice Milling. The Associate company addresses machinery required forprocessing rice as well as non-rice grains legumes spices etc. The high production ofgrains in this region and increasing demand for good quality food products are some keydrivers for the growth of the grain processing machinery market in India. Also the risein urbanization nuclear family and working husband-wife culture has shifted purchasinghabits from lose grain to packaged ready-to-use products. It is generating demand formodern grain processing machinery market in India.

The grain processing industry is broadly divided into two types ofsuppliers of grain processing machineries a) organized players addressing multiple grainswith much larger product range and working on pan India basis including exportrequirements b) Local players which are grain specific and operate in geographical pocketwith limited products range.

The Associate Company is part of the organized sector category andhence gets opportunity to address larger market. The company through its associate companyis one of the leading suppliers of grain processing machineries in India and offerscomplete grain processing plant solution under one roof. At present it has major focus onRice and Lentil (Dal) processing plants within India and exports in neighboring countries.

Real Estate & Leasing of Property:

The real estate industry is the third-largest contributor to India'seconomic growth and is expected to contribute 13% of India's GDP by 2025. The sectoralgrowth is driven by remarkable growth witnessed in India's retail hospitality andcommercial real estate sector. New home launches and sales witnessed significant growth.

The residential real estate market in India has become more attractivefor ultra-high-net-worth individuals and NRIs due to growing transparency and easedinvestment norms. NRIs are traditionally known to purchase properties in India as aninvestment for rental purposes. The pandemic widened the market for NRIs who sought securehomes in their country of origin.

Initially the pandemic was a setback for the real estate sector butthe rebound was surprising. The pandemic catalyzed housing demand driven by low-interestrates and a growing need for larger homes.

India is a growing market for real estate and the implementation ofRERA (The Real Estate (Regulation and Development) Act GST (Goods and Services Tax) andREITs (Real Estate Investment Trusts) 100% Foreign direct Investment (FDI) has motivatedinvestor's sentiment in a positive direction for the real estate. Besides growingurbanization and economic growth catalyzes commercial real estate market growth.

(D) OPPORTUNITIES AND THREATS

The demand for food grains is increasing with the rise in populationwhich has encouraged many grain processing companies to expand production by opening newprocessing plants. It is propelling the demand for grain processing machines. It isexpected to drive market growth and provides ample business opportunities for the companyand its associate company.

The grain processing machinery market is getting mature and customersare showing more faith in Indian manufacturers for quality prompt service and assuredconsistent performance. This change will work in favour of Indian manufacturers where incompany will get benefitted.

The rich legacy of the company and new team's experience in grainprocessing field is an edge over competition. Further to mention that the associateCompany has successfully completed its two full years of operation and is getting goodresponse from the Indian as well as overseas customers.

The Government has taken various initiatives in the real estate sector.It has proposed to extend the increase in differential rate between the circle rate andagreement value from 10% to 20% applicable till 30 June 2022 from 30 June 2021.

Under the Union Budget 2022-23 the Government allocated Rs. 48000Crore under PMAY for urban and rural in FY 2022-23. It introduced a high-level committeefor urban planners and institutes to frame policies for development. This will provide animpetus to the real estate sector by helping transform Tier 2 and 3 cities.

To revive around 1600 stalled housing projects across leading citiesthe Union Cabinet approved the setting up of Rs. 25000 Crore alternative investment fund(AIF). The Government created an Affordable Housing Fund (AHF) in the National HousingBank (NHB) with an initial corpus of Rs. 10000 Crore using priority sector lendingshortfall of banks/ financial institutions for microfinancing of the HFCs.

The Indian real estate sector continues to be largely unorganised.Stronger compliances (laws and regulations varying from state to state) are needed. Anymodification in State laws could delay approvals and warrant a revised schedule of projecttimelines.

The growing population of India and the work-from-home regime haveproved a blessing for the sector. Small towns have also joined the need for more homesstrengthening the demand. However the work-from-home regime may affect the commercialleasing real estate segment negatively in short term.

The company has considered the possible effects that may result fromCOVID-19 in the preparation of these financial results including the recoverability ofcarrying amounts of financial as well as non-financial assets. In developing theassumptions relating to the possible future uncertainties in the economic conditionsbecause of COVID-19 the company has at the date of approval of financial results usedinternal and external sources of information and expects that the carrying amount ofassets will be recovered. The impact of COVID -19 on the Company's financial results maydiffer from that estimated at the date of its approval.

(E) SEGMENT-WISE PERFORMANCE OR PRODUCT-WISE PERFORMANCE

The Company through its associate company has maintained its customerbase and leadership in traditional flagship products like Dandekar Cone Polishers andTable Type Paddy Separator. The Company has done major business in Cleaning Polishing andGrading section. Other than Rice the company's products are preferred for Millets andWheat processing.

In the year 2022-23 the Company has purchased pre-leased commercialproperty in Pune which is a rapidly developing city and counted among the best urbaninfrastructure in India. It is ranked second in the Ease of Living Index 2020 by theMinistry of Housing and Urban Affairs in India. It was ranked highest among all Indiancities by Mercer's 21st Annual Quality of Living Rankings in 2019 and ranked seventh interms of per capita income. The city's real estate sector growth is driven by ITeducation automobile and manufacturing sectors. India's Smart Cities Mission has driventhe growth of Pune's urban infrastructure. Investments valued at more than Rs. 650 Bn areexpected to be infused over eight years for establishing metro rail links a new airportterminal and a ring road.

(F) OUTLOOK

Manufacturing of Machinery:

India is the world's biggest rice exporter and second biggest producer.Rice output is estimated to rise.

The company will benefit due to the continued growth in domestic riceproduction as well as increasing rice exports.

The increase in production is largely attributed to several significantinterventions at the central level. The Government has consistently been focusing onbringing new areas under pulses along with ensuring that productivity is also increased inthe existing areas under cultivation. Therefore the production and productivity of pulsesmust be further sustained and increased through the approach of both horizontal andvertical expansion.

The rise in pulse cultivation and production is resulting in growth indemand for pulse processing plants. It will generate good business opportunities for thecompany through its associate company as they have expertise in this field.

Normally the farmers after harvest sell their product to traderswithout any further processing. Even a mere primary processing like cleaning and gradingwill give higher price to the farmers. The government focus on grain processing sectorwill boost demand for the company's products.

The monsoon forecast is critical to India's food production and GDPgrowth. A good well-distributed and timely monsoon will mean another year of bumper farmproduction in 2022 which could have a cascading positive impact and one less reason toworry for an economy battling another wave of COVID-19 infections. The IndiaMeteorological Department (IMD) upped its 2022 monsoon forecast to 103 percent of the LongPeriod Average (LPA) meaning most parts of the country can expect to get normal to abovenormal rainfall. Rainfall between 96-104 per cent of the LPA is considered a normalrainfall. The forecast is with a model error of plus and minus 4 percent.

This will improve overall economic growth especially at a time whenagriculture is expected to be the only bright spot for India. The growth agriculturesector creates more opportunities for the company's growth through increase in demand forits products.

The company will benefit from these positive factors leading to gooddemand for grain processing machineries.

Real Estate and Leasing of Property:

India's population is expected to be 1.52 Bn by 2036 with a 70%increase in the urban areas. India's urban population is expected to grow from 35% in 2022to 39% by 2036 driving the growth of the real estate sector. India has more than 50% ofthe population below the age of 25 and more than 65% of the population below the age of35. This demographic advantage is expected to translate into increased real estate demand.

The Government of India allowed FDI up to 100% in the Indian realestate sector which is expected to attract increasing investments.

The pandemic-infused trends coupled with low-interest ratesaffordability and other favorable factors harnessed the positive sentiments in thesemarkets resulting in growing property sales.

Besides the state capital and metro cities Tier II & III citiesemerged as strong growth real estate sector drivers. Tier-II cities like Pune LucknowAmritsar New Chandigarh Faridabad Indore Ahmedabad and others reported traction fromproperty buyers. Due to the infra developments planned connectivity livability andworld-class social infrastructure Tier II & III cities are attracting buyers.

The Government focused on Smart Cities Mission & Affordable HousingPrograms. The extension of the Pradhan Mantri Awas Yojana (PMAY) scheme to March 2023 andallocation of Rs. 48000 Crore could enhance affordable housing benefit schemes for 80Lakh new beneficiaries within the middle class and economically weaker sections.

(G) RISK AND CONCERNS

Rice milling machinery has its up and down zones as such companyalways carried a threat of extreme effects due to external factors like rainfall minimumsupport purchase price by government and political agendas etc. Further rice millingmachinery is a cyclic business which makes it capital intensive.

The following risks and concerns will apply to Real Estate business ingeneral: 1. Market feasibility. 2. Environmental issues. 3. Delays in receiving approvalsfrom various statutory authorities. 4. Timely completion of projects. 5. Sales/leasingimpacting the returns. 6. Consistent increase in Interest rates

Risks of critical importance have been identified over a period oftime. These risks are ranked on the basis of their impact on company's business andlikelihood of their occurrence. A cross-functional team takes stock of these risks andcalls for necessary measures to mitigate the risks from the concerned risk owners. Therisk owners then produce action plans for risk mitigation which are then evaluated by theteam. New risks are added with the changes in economic and market scenarios and undergothe same process.

Identified risks include:

A. Manufacturing of Machinery

• Cyclic Business affected by political decisions: Along withrice also address non-rice grains with the help of industry experts.

• Sudden changes in demand due to mismatch in rice production andmilling capacity in rice cultivation pockets: Pocket wise forecasting rainfallpredictions and stocking policy helps to address it.

• Rise in low cost - poor quality machinery manufacturersdividing existing business amongst many small suppliers: Address organized customers withstrong engineering process knowledge and quality products supported by strong post-salesservice.

B. Real Estate & Leasing of Property

The Company has commenced business of leasing of property in the FY2022-23. Though this business in the evolving stage following risks are identified:

• Geographic risk - The Company's focus on a few areas couldaffect growth. However the Company enjoys a presence in Nagpur (Manufacturing Plant) witha growing focus on Pune.

• Funding risk - The Company has a strong debt-equity ratio. Itdid not have any borrowings till Q1 of FY 202223.

• Competition risk - The Company's expertise in project planningand execution along with the expertise of its directors makes it an ideal choice. We arelooking at a mixed-development offering that includes retail and commercial spaces insmart buildings.

Your Board is conscious of these risks and will take adequate measuresto mitigate the risks before considering any further investments in development ofprojects.

(H) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate internal control systems to ensure operationalefficiency accuracy and promptness in financial reporting and compliance of various lawsand regulations.

The internal control system is supported by the internal audit process.An Internal Auditor has been appointed for this purpose. The Audit Committee of the Boardreviews the Internal Audit Report and the adequacy and effectiveness of internal controlsperiodically.

(I) COMPANY'S FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONALPERFORMANCE Standalone:

During the financial year under review your company has achievedturnover of Rs. 138.29 Lakhs (previous year Rs. 457.04 Lakhs). The Profit beforeexceptional items and tax for the period is Rs. 1720.84 Lakhs (as against Loss of Rs.112.04 Lakhs during FY 2020-21). The net profit for the period is Rs. 1645.31 Lakhs (asagainst net loss Rs. 114.67 Lakhs during FY 2020-21).

Consolidated (Includes PAT of Associate Company proportionate toCompany share):

During the financial year under review your company has achievedturnover of Rs. 138.29 Lakhs (previous year Rs. 457.04 Lakhs). The Profit beforeexceptional items and tax for the period is Rs. 1720.84 Lakhs (as against Loss of Rs.112.04 Lakhs during FY 2020-21). The net profit for the period is Rs. 1648.15 Lakhs (asagainst net profit Rs. 7.57 Lakhs during FY 2020-21).

(J) MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONSFORMAT INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company seeks to recruit and retain quality industry professionalsand provide them with a high-performance environment.

During the financial year total workforce of the Company stands at 13.

(K) ENVIRONMENT

The Company takes due care in the selection and usage of appropriatematerial and methods in order to avoid violation of norms formulated to safeguard theenvironment.

(L) CAUTIONARY STATEMENT

Statements in this Report particularly those which relate toManagement Discussion and Analysis describing the Company's objectives projectionsestimates and expectations may constitute "forward looking statements" withinthe meaning of applicable laws and regulations. Actual results might differ materiallyfrom those either expressed or implied.

(M) LISTING FEES

The annual listing fees for the year under review have been paid to BSELimited where your Company's shares are listed.

(N) COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

As on 31st March 2022 the Company has consolidated theaccounts by taking into consideration the financials of Navasasyam Dandekar PrivateLimited.

There are no companies that have become or ceased to be subsidiariesjoint ventures or associate companies of the Company during the year.

The Board presents Audited Standalone & Consolidated FinancialStatements as prepared in compliance with the Indian Accounting Standards and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS:

Details of significant changes i.e. change of 25% or more ascompared to the immediately previous Financial Year in key financial ratio along withdetailed explanation therefore:

Sr. Particulars No. Ratio as on 31 March 2022 Ratio as on 31 March 2021 % of Change

Explanation if any

1. Debtors' Turnover* 11.27 6.78 66.22

Reduction in Debtors

2. Inventory Turnover* 1.66 0.82 102.44

Reduction in inventory.

3. Interest Coverage Ratio NA NA NA

The Company does not have any interest cost.

4. Current Ratio* 65.63 1.73 3693.64

Increase in assets.

5. Debt Equity Ratio* NA NA NA

The Company does not have any borrowings.

6. Operating Profit Margin (%) 76.94 (21.85) 452.13

The company has earned profit on sale of the land.

7. Net Profit Margin* (%) 72.36 187.17 -61.34

Impact of other comprehensive income.

Note: Last yearfigures are re-grouped/updated as necessary.

* Calculated in accordance with the Guidance Note issued by ICAI on IndAS and Schedule III of the Companies Act 2013. Previous year numbers are restatedaccordingly.

There are no sector specific equivalent ratios for disclosure by theCompany.

The Company does not have any borrowings during the year. Hence thereis no information regarding the difference between amount of the valuation done at thetime of one-time settlement and the valuation done while taking loan from the banks orfinancial institutions along with the reasons thereof.

RETURN ON NET WORTH:

Details of change in Return on Net Worth as compared to the immediatelyprevious Financial Year are as follows:

Sr. Particulars No. Ratio as on 31 March 2022 Rs. in Lakhs Ratio as on 31 March 2021 Rs. in Lakhs % of Change

Explanations

1 Net Worth 28.27 25.02 12.99

Profit for the year ended on 31.03.2022 includes profit on sale of Land and Building

PARTICULARS OF INFORMATION FORMING PART OF THE BOARD'S REPORT PURSUANTTO SECTION 134 OF THE COMPANIES ACT 2013 RULE 8 OF THE COMPANIES (ACCOUNTS) RULES 2014AND RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES2014

ANNUALRETURN:

As required under Section 92(3) read with section 134(3)(a) of theCompanies Act 2013 read with rule 12 of the Companies (Management and Administration)Rules 2014 including amendments thereunder the Annual Return filed with the Ministry ofCorporate Affairs (MCA) for the Financial Year 2020-21 is available on the web-link (http://www.ggdandekar.com/templatesen/Annual%20Return%202020-21.pdf) and the Annual Return for Financial Year 2021-22will be made available on the website of the Company - www.ggdandekar.com once itis filed with the MCA.

NUMBER OF MEETINGS OF THE BOARD:

During the year under review seven (7) Board Meetings were convenedand held on June 29 2021 August 13 2021 November 3 2021 January 6 2022 January 212022 February 9 2022 and February 14 2022. The intervening gap between the Meetings waswithin the period prescribed under the Act.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(5) of the Act in respectof Directors' Responsibility Statement your Directors state that:

a) in the preparation of the annual accounts for the year ended 31stMarch 2022 the applicable accounting standards had been followed and there were nomaterial departures from the applicable accounting standards;

b) accounting policies as mentioned in Notes to the FinancialStatements have been selected and applied consistently. Further judgments and estimateshave been made that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company as at 31st March 2022 and of the loss of theCompany for the year ended on that date;

c) proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d) the Annual Financial Statements have been prepared on a goingconcern basis;</p>

e) proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively and

f) proper systems to ensure compliance with the provisions of allapplicable laws were in place and that such systems were adequate and operatingeffectively.

DECLARATION BY THE INDEPENDENT DIRECTORS

The Company has received necessary declaration from all Independent Directorsunder Section 149(6) of the Act and Regulation 16(1)(b)& 25(8) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 that they meet the criteria ofindependence as laid down.

The Company has also received declarations from all the IndependentDirectors of the Company confirming that they have complied with the Code for IndependentDirectors as prescribed in Schedule IV to the Companies Act 2013 including amendmentsthereunder. The said Code is available on the Company's website.

All the Independent Directors of the Company have enrolled themselvesin the data bank with the 'Indian Institute of Corporate Affairs' New Delhi India andeligible Independent Directors have completed the proficiency test.

COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:

The Board of Directors on the recommendation of the Nomination &Remuneration Committee has adopted a policy that lays guidelines for selection andappointment of Directors Key Managerial Personnel and Senior Management personneltogether with their remuneration. The Nomination and Remuneration Policy is available onthe website of the Company. Web-link(http://www.ggdandekar.com/templatesen/Nomination%20and%20Remuneration%20Policy GGD.PDF)

AUDITORS

a. Statutory Auditor

As per the provisions of Section 139 of Companies Act 2013 M/sKulkarni Soman & Associates Chartered Accountants Pune was appointed in the 80th AGMheld on 27.09.2019 for a period of five years. The tenure of the Auditors would becompleted on the conclusion of the 85thAnnual General Meeting as contemplatedby the provisions of Section 139 of the Companies Act 2013.

The Company has received necessary certificate from the StatutoryAuditors as required under Section 139(1) of the Companies Act 2013 stating thattheirappointment is in accordance with the provisions of Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

The Statutory Auditor has informed the company that they have joinedhands with CNK & Associates LLP (CNK). They are now part of a network of M/s. CNK& Affiliates (CNK Network) w.e.f. 01.07.2022. As a result the firm name has changedfrom 'Kulkarni Soman & Associates' to 'CNK JBMS & Associates'. The StatutoryAuditor continues to be a partnership firm registered with ICAI with Firm RegistrationNo.: 139786W.

b. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has appointed Mr. Mahesh Athavale Partner - Kanj & Co LLP Practicing CompanySecretary (Membership No. FCS No. 2412 CP No. 1488) to undertake Secretarial Audit of theCompany.

c. Cost Auditor

As per the provisions of Section 148 of the Companies Act 2013 andRules made thereunder the Company is not required to maintain cost records and appointcost auditor.

EXPLANATION ON COMMENTS ON STATUTORY AUDITORS' AND SECRETARIALAUDITORS' REPORT:

Statutory Audit Report

There are no qualifications reservations or adverse remarks ordisclaimers made by M/s. Kulkarni Soman & Associates Statutory Auditors in theirAudit report. There was no instance of fraud during the year under review which requiredthe Statutory Auditors to report to the Audit Committee and/or Board under Section 143(12)of Act & Rules thereof including amendments thereunder.

Secretarial Audit Report

The Secretarial Audit Report submitted by Company Secretary in Practiceaccording to the provisions of Section 204 of the Companies Act 2013 read with Rule 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isenclosed as a part of this report as 'Annexure I'.

Mr. Mahesh Athavale Company Secretary in Practice in his SecretarialAudit Report has provided the observation/remark which is self-explanatory. However thereare no qualifications reservations or adverse remarks or disclaimers made in theSecretarial Audit Report for FY 2021-22.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENT UNDER SECTION 186 OF THECOMPANIES ACT 2013

Your Company has not given any loan or guarantee or security ascontemplated by Section 186 of the Companies Act 2013. Your Company has made followinginvestmentduring the financial year under review.

On May 25 2021 the company invested Rs. 380.01 Lakhs in the associatecompany Navasasyam Dandekar Private Limited (NDPL). Company subscribed to and wasallotted 14989 nos 6% Compulsorily Convertible (Non-Cumulative) Preference Shares ofNDPL having face value of Rs. 100/- per share at premium of Rs. 2435.28/- per shareaggregating to Rs. 380.01 Lakhs.

Company has sold following investments in shares during the year underreview

Date of Sale Name No of Shares Sale Proceeds* (Rs. in Lakhs)
07.05.2021 Gujarat Gas Ltd 33000 174.73
11.05.2021 Lakshmi Machine Works Ltd. 3680 225.40
21.12.2021 Lakshmi Machine Works Ltd. 1485 127.52
Total 527.65

*Note: Values of sale proceeds are given net of brokerage.

The Company has received payment against sale of shares as mentionedabove. The profit earned by the Company from sale of investment was Rs. 476.24 Lakhs.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERREDTO IN SUB-SECTION (1) OF SECTION 188:

The contracts or arrangements entered into by the Company with RelatedParties during the financial year 2021-2022 were at arm's length and in the ordinarycourse of business. Hence no particulars are being provided in Form AOC-2.Regulation 23of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015includingamendments are not applicable to the Company for FY 2021-22 as per Regulation 15 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

The policy on Related Party Transactions as adopted by the Board isuploaded on the Company's website. The disclosures as per IND-AS 24 for transactions withrelated parties are provided in the Financial Statements of the Company.

STATE OF COMPANY'S AFFAIRS:

Discussion on the state of Company's affairs has been covered in theManagement Discussion and Analysis Report.

AMOUNTS PROPOSED TO BE CARRIED TO RESERVES:

Particulars of the amounts proposed to be carried to reserves have beencovered in Notes to the financial statements of the company.

MATERIAL CHANGES AND COMMITMENTS BETWEEN THE DATE OF THE BALANCE SHEETAND THE DATE OF REPORT:

Sale of Investment:

Your Company has sold the following investments held in the form ofshares.

Date of Sale

Name

No of Shares Sale Proceeds (Rs. in Lakhs)
07-04-2022

Lakshmi Machine Works Ltd.

285 28.61
12-05-2022

Gujarat Gas Ltd

17000 93.59
16-05-2022

CRISIL Ltd

6224 229.37
19-05-2022

CRISIL Ltd

5487 202.47
20-05-2022

Indraprastha Gas Ltd

57420 215.43
23-05-2022

CRISIL Ltd

1785 67.65
23-05-2022

Indraprastha Gas Ltd

50000 187.03
23-05-2022

Marico Ltd

29950 159.43
24-05-2022

CRISIL Ltd

2094 76.95
24-05-2022

ICRA Ltd

1000 40.50
26-05-2022

ICRA Ltd

1000 40.11
26-05-2022

Indraprastha Gas Ltd

50000 184.05
27-05-2022

ICRA Ltd

1450 58.72
27-05-2022

Indraprastha Gas Ltd

34014 126.19
30-05-2022

ICRA Ltd

1451 58.76
30-05-2022

Indraprastha Gas Ltd

50000 188.00
31-05-2022

Indraprastha Gas Ltd

49941 192.35

Total

2149.26

Your Company has received payment against sale of shares as mentionedabove. The profit earnedfrom sale of investment was Rs. 2007.25 Lakhs.

Manufacturing Activity:

Since 2021 some of the persons engaged to work at the manufacturingfactory at Butibori Nagpur through a contractor refused to work. This caused disruptionin manufacturing activity to some extent. The Company has approached its legal advisor forappropriate action against the persons engaged through the contractor. The precise impactof this disruption is not quantifiable. Management is taking the required steps to protectpersons and property of the Company.

Real Estate Activity:

The Company has purchased property situated at Erandwane Pune(Maharashtra) vide Deed of Apartment executed and registered on 01.07.2022 for a totalconsideration of Rs. 377689648/- (Rupees Thirty-Seven Crore Seventy-Six Lakh Eighty-Nine Thousand Six Hundred And Forty-Eight Only) including stamp duty and registrationcharges. The description of the property is as follows: Suma Center Floor 4 to Floor 6(admeasuring about 30000 sq. ft.) Survey no. 8+13 CTS no. 1409+1410 Erandwane Pune411004.

The Company has executed & registered on 12.08.2022 Agreement forSale for a total consideration of Rs. 53213570/- (Rupees Five Crore Thirty-Two LakhThirteen Thousand Five Hundred And Seventy Only) including stamp duty and registrationcharges for the property situated at Suma Center South Wing Floor 2 (admeasuring about5000 sq. ft.) Survey no. 8+13 CTS no. 1409+1410 Erandwane Pune 411004.

Other material changes and commitments affecting the financial positionof the Company which has occurred between the end of the financial year of the Company towhich the financial statements relate and the date of the report are covered in theManagement Discussion and Analysis Report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO

A. Conservation of energy and Technology Absorption:

Pursuant to Section 134 (3) (m) of the Act read with Rules there underthe report regarding conservation of energy technology absorption is annexed herewith as 'AnnexureII'

B. Foreign exchange earnings and Outgo:

Sr' Particulars No. 2021-22 2020-21
i) Foreign Exchange earned in terms of actual inflows during the year Nil Nil
ii) Foreign Exchange outgo during the year in terms of actual outflows Nil Nil

RISK MANAGEMENT POLICY:

The Company has in place a mechanism to identify assess monitor andmitigate various risks to key business objectives. Major risks identified aresystematically addressed through risk mitigating actions on a continuing basis. These arediscussed at the meetings of the Audit Committee and the Board of Directors of the Companyfrom time to time.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

As on 31st March 2021 net worth of the Company was not morethan Rs. 500 crore its turnover was not more than Rs. 1000 crore and its net profit wasnot more than Rs. 5 crore.Consequently the provisions of section 135 of the CompaniesAct 2013 were not applicable to the Company for FY 2021-22 and the Company was notrequired to constitute the Corporate Social Responsibility frame the CSR policy or spendthe amount on CSRin FY 2021-22.

BOARD EVALUATION:

Pursuant to provisions of section 134(3)(p) 149(8) and Schedule IV ofthe Companies Act 2013annual performance evaluation of Directors as well as of the AuditCommittee Nomination & Remuneration Committee and Stakeholders' RelationshipCommittee of the Board has been carried out.

The performance evaluation of the Independent Directors was carried outby the entire Board and the Performance Evaluation of Chairman and Non-IndependentDirectors was carried out by the Independent Directors.

The manner in which the evaluation has been carried out is providedbelow.

Criteria for performance evaluation:

The Nomination and Remuneration Committee lays down the criteria forperformance evaluation of Directors. The annual evaluation of Directors is made on thefollowing criteria:

i. Attendance for the meetings participation and independence duringthe meetings;

ii. Interaction with Management;

iii. Role and accountability of the Board and

iv. Knowledge and proficiency.

DETAILS OF SUBSIDIARIES JOINT VENTURES (JV) OR ASSOCIATE COMPANIES(AC):

Your Company has a business tie-up with a team of experts in grainprocessing machinery technology and on 29.11.2019 it formed a Joint Venture Company in thename of 'Navasasyam Dandekar Private Limited' (NDPL) with 49% of equity stake in JVC. Asper section 2(6) of the Companies Act 2013 as amended from time to timeNDPL is anassociate company.

PERFORMANCE AND FINANCIAL POSITION OF EACH OF THESUBSIDIARIESASSOCIATES AND JOINT VENTURE COMPANIES:

The Company has received audited financial results of the associatecompany (Navasasyam Dandekar Private Limited)for the year 2021-22and profit after tax isconsolidated with the company's financial results in proportion of company's shareholdingin associate company. Associate company has clocked a turnover of Rs. 1897.10Lakhs in thefinancial year ended on March 31st 2022 (previous year Rs. 2495.29 Lakhs) profit beforetax is Rs. 8.92Lakhs (previous year Rs. 308.19 Lakhs) and profit after tax is Rs. 3.65Lakhs (previous year Rs. 254.55 Lakhs).

On May 25 2021 the Company invested Rs. 380.01 Lakh in associatecompany& was allotted 14989 nos 6% Compulsorily Convertible (Non-Cumulative)Preference Shares of NDPL having face value of Rs.100/- per share at premium of Rs.2435.28/- per share aggregating to Rs. 380.01 Lakh.

CHANGE IN THE NATURE OF BUSINESS IF ANY:

During the year under review the shareholders of the Company videresolution passed through Postal Ballotapproved alteration in the object clause to enablethe Company to explore suitable business opportunities in real estate and leasing ofproperty.

On April 1 2022 the Registrar of Companies Mumbai has issued aCertificate of Registration of the Special Resolution Confirming Alteration of ObjectClause of the Memorandum of Association of the Company.The Corporate Identity Number (CIN)of the Company has been changed from L99999MH1938PLC002869 to L70100MH1938PLC002869.

There has been no other change in the nature of business during thefinancial year under review.

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL APPOINTED/ RESIGNEDDURING THE YEAR 2021-22:

During the year under review:

1. Mrs. Anagha Kulkarni is appointed as Chief Financial Officer &Key Managerial Personnel of the Company w.e.f. 29.06.2021.

2. Appointment of Mr. Mangesh Joshi (DIN: 07244555) as an ExecutiveDirector w.e.f. 25.07.2021 for 3 years was approved by shareholdersat the Annual GeneralMeeting held on 14.09.2021.

3. Mr. Pranav Deshpande was appointed as a Chief Executive Officer& Key Managerial Personnel w.e.f. 06.01.2022.

4. Mr. Chinmay Bhandari (DIN: 07843049) Non-Executive and IndependentDirector has tendered his resignation w.e.f. 24.01.2022due to other professional andfamily commitments. The Company has received confirmation from Mr. Bhandari that there isno other material reason for his resignation other than those mentioned in his resignationletter dated 24.01.2022. The resignation letter & confirmation letter were filed withBSE Limited on 24.01.2022.

5. Mr. Nihal Kulkarni (DIN: 01139147) Non-Executive Director andChairman has tendered his resignation w.e.f. 09.02.2022 as he is desirous of pursuing hisown ambitions and interests which are different and independent of the Kirloskar groupbusinesses. The Board of Directors in its meeting held on 09.02.2022 has accepted hisresignation with immediate effect. Mr. Nihal Kulkarni and his family also conveyed theirintention of discontinuation as 'Promoter' of the Company or otherwise directly /indirectly participate in the management of the Company and also sale of their equityshares in compliances with applicable laws/regulations vide letter dated 09.02.2022. Theabove-mentioned letters were filed with BSE Limited on 09.02.2022.

Other than the above there are no other appointment / re-appointmentof Directors of the Company in Financial Year 2021-22.

In the financial year 2022-23:

1. Mr. Mangesh Joshi (DIN: 07244555) Executive Director& KeyManagerial Personnel resigned w.e.f. 06.04.2022.

2. Mr. Pranav Deshpande (DIN: 06467549) was appointed as an AdditionalDirector and designated as an Executive Director & Key Managerial Personnel w.e.f.06.04.2022 for 3 (three) years.The company has approved these appointments vide anordinary resolution and a special resolution respectively passed through postal ballot on03.07.2022. The result of the postal ballot was declared on 05.07.2022.

The Board of Directors considered that Mr. Mangesh Joshi (DIN:07244555) and Mr. Pranav Deshpande (DIN: 06467549) possess the requisite expertise andexperience (including the proficiency) and they are persons of high integrity and reputeand accordingly approved their appointment/re-appointment as Executive Director(s) whichwas approved by the members of the Company.

DIRECTOR(S) PROPOSED TO BE APPOINTED / RE-APPOINTED AT THE ENSUINGANNUAL GENERAL MEETING

Ms. Smita Raichurkar (DIN 08179533) who retires by rotation at theensuing Annual General Meeting and being eligible offers herself for re-appointment. TheCompany has also received the requisite disclosure/declaration from Ms. Smita Raichurkar.

Considering the same the Board recommends an Ordinary resolution forher reappointment as a Non-Executive Director.

The brief resume and other details relating to the Director who isproposed to be appointed /re-appointed as required to bedisclosed under Regulation 36(3)of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 form partofthe Explanatory Statement to the Notice of the Annual General Meeting.

The resolution seeking approval of members for the appointment andre-appointment of this Director has beenincorporated in the Notice of the forthcomingAnnual General Meeting of the Company.

DETAILS RELATING TO DEPOSITS COVERED UNDER CHAPTER V OF THE COMPANIESACT 2013:

Your Company has not accepted any deposits under the provisions ofSection 73 of the Companies Act 2013 read with Companies (Acceptance of Deposit) Rules2014 as amended from time to time from the public or its employees etc. during the yearunder review.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS ORCOURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:

The Company has not receivedany significant or material order fromRegulators Courts or Tribunals during the year which may impact the Going Concern Statusor the Company's operations in future.

The Company has neither made application nor any proceedings arepending under the Insolvency and Bankruptcy Code 2016 (31 of 2016) during the year.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITHREFERENCE TO THE FINANCIAL STATEMENTS

The Company has in place adequate internal financial controls withreference to financial statements.

Regular management oversight and rigorous periodic testing of internalcontrols makes the internal controls environment strong at the Company. The AuditCommittee along with Management overseas results of the internal audit and reviewsimplementation on a regular basis.

BOARD COMMITTEES:

Your Company has in place the following Committees under the provisionsof the Companies Act 2013. There are currently three committees of the Board namely:

• Audit Committee

• Nomination & Remuneration Committee

• Stakeholders' Relationship Committee

• Corporate Social Responsibility Committee (w.e.f. 30.05.2022)

The composition of the above Committees of the Board is available onthe website of the Company - http://www.ggdandekar.com/en/About Us/ProfessionalManagement/

During the year under review the Board has accepted all therecommendations given by the Committees of the Board which are mandatorily required.

INFORMATION FORMING PART OF THE BOARD'S REPORT PURSUANT TO RULE 5 OFTHE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014

The relevant information pursuant to Rule 5of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed at 'AnnexureIII' to this report.

VIGIL MECHANISM

The Company has formulated and implemented the Whistle Blower Policy /Vigil Mechanism ('the Policy'). This Policy provides a mechanism for directors andemployees of the Company and other persons dealing with the Company to report to theChairman of the Audit Committee any instance of unethical behavior actual or suspectedfraud or violation of the Company's code of conduct or leakage of Unpublished PriceSensitive Information (UPSI) by any person who is in possession of UPSI to any otherperson in any manner whatsoever except as otherwise permitted under the SEBI (Prohibitionof Insider Trading) Regulations or any other instance.

No person has been denied access to the Audit Committee in this regard.There were no complaints filed / pending with the Company during the year.

The policy has also been uploaded on the Company's website. Web-link (http://www.ggdandekar.com/templatesen/Whistle%20Blower%20Policy GGD.pdf)

CASH FLOW

A cash flow statement for the year ended 31st March 2022 isattached to the Balance Sheet as a part of Financial Statements.

CORPORATE GOVERNANCE:

As per Regulation 15(2) compliances under Regulation 17 17A 18 1920 2122 23 24 24A 25 26 27 and clauses (b) to (i)and (t) of sub-regulation (2) ofregulation 46 and para C D and E of Schedule Vof the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 are not applicable to the listed entity havingpaid up equity share capital not exceeding rupees ten crore and net worth not exceedingrupees twenty-five crore as on the last day of the previous financial year.

As per Standalone Audited Financial Statements as on 31st March 2021the paid-up capital of the Company is Rs. 4761387/- and the Net worth is Rs.139889447/-. Hence the above regulations were not applicable to the Company for FY2021-2022.

As per Standalone Audited Financial Statements as on 31st March 2022the paid-up capital of the Company is Rs. 4761387/- and the Net worth is Rs.352044314/-. Hence the above regulations became applicable to the Company for FY2022-2023.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

The Company has in place an Anti-Sexual Harassment Policy in line withthe requirements of The Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013.

Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.

No complaints were received during the year 2021-22.

PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 197 READ WITH RULE 5 OFTHE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014

Particulars of employees pursuant to section 197 of the Companies Act2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are provided in the Annual Report.

The particulars of employees pursuant to Section 197(12) of theCompanies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules2014 including amendments thereunder forms part of thisreport. In terms of Section 136 (1) of the Companies Act 2013 & Rules thereofincluding amendments thereunder the Directors' Report is being sent to the shareholderswithout this Annexure. A copy of this annexure will be made available in electronic formto the Members on request raised by them on the dedicated email id of the Company at cs@ggdandekar.com.

DISCLOSURE OF REMUNERATION OR COMMISSION RECEIVED BY A MANAGING ORWHOLE-TIME DIRECTOR FROM THE COMPANY'S HOLDING OR SUBSIDIARY COMPANY:

There were no instances of receiving remuneration or commission by aManaging or Whole-time Director of the company from its holding or subsidiary companyduring the FY 2021-22 requiring the disclosure under section 197(14) of the Companies Act2013.

EVENT-BASED DISCLOSURES IN DIRECTORS REPORT:

The Company has not issued any shares with differential voting rightsor Sweat Equity shares or shares under ESOP. The Company has not provided any money to itsemployees for purchase of its own shares hence the company has nothing to report inrespect of Rule 4(4) Rule 12(9) and Rule 16 of the Companies (Share Capital &Debentures) Rules 2014.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with all applicable Secretarial Standardsissued by the Institute of Company Secretaries of India.

ACKNOWLEDGMENTS

Your Directors wish to place on record their appreciation for thecontribution made and support provided to the Company by the shareholders employees andbankers during the year under the report.

For and on behalf of the Board of Directors
Pranav Deshpande Pawan Rathi
Executive Director Independent Director
Place: Pune DIN: 06467549 DIN: 06669485
Date: August 25 2022

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