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डायनामाइट टेक्नॉलजी निदेशकों की रिपोर्ट, डायनामाइट टेक्नॉलजी निर्देशकों द्वारा रिपोर्ट

डायनामाइट टेक्नॉलजी

बीएसई: 505242  |  NSE: DYNAMATECH  |  ISIN: INE221B01012  |  Pumps

खोजें डायनामाइट टेक्नॉलजी कनेक्शन Mar 17
निदेशकों की रिपोर्ट वर्षांत : Mar '18

The Directors are pleased to present their 43rd Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2018.

1. FINANCIAL RESULTS

The Financial Results of the Company for the year ended 31st March, 2018, were as follows:

(Rs. in Lacs)

Particulars

Consolidated

Standalone

Year Ended 31 March 2018

Year Ended 31 March 2017

Year Ended 31 March 2018

Year Ended 31 March 2017

Gross Revenue

140,842

153,918

56,895

53,143

Less: Excise duty

872

3,308

642

2,640

Net Revenue

139,970

150,610

56,253

50,503

Less: Cost of material and increase/decrease in stock

71,961

83,804

26,877

22,937

Less: Employee benefit expenses

24,838

22,958

8,178

6,718

Less: Other Expenses

29,932

27,320

12,089

11,128

EBITDA

13,239

16,528

9,109

9,720

EBITDA Margin

9.46%

10.97%

16.19%

19.25%

Add: Other Income

578

576

647

1,588

Less: Finance Charges

7,442

7,836

6,328

6,162

Less: Depreciation and Amortisation Expense

5,644

5,282

2,875

2,816

Less: Exceptional Expense

-

426

-

314

Profit before tax

731

3,560

553

2,016

Profit before tax margin

0.52%

2.36%

0.98%

3.99%

Less: Tax expense

659

1,598

174

484

Profit After Tax

72

1,962

379

1,532

Profit After Tax margin

0.05%

1.30%

0.67%

3.03%

Add: Other Comprehensive Income/(Losses)

2,226

(2,138)

(142)

(20)

Profit for the year

2,298

(176)

237

1,512

Profit available for appropriation

2,298

(176)

237

1,512

Balance carried to Balance Sheet

2,298

(176)

237

1,512

Note: Previous years’ figures have been recast wherever necessary. COMPANY PERFORMANCE

FY2018 was a year of important reforms in the Indian economy including the Goods & Service Tax (GST). While in the short term, it faced temporary challenges of implementation, on a long-term basis it will lead to improved business environment and renewed investment opportunities. Recent regulatory changes coupled with our strategy of rationalizing product mix resulted in a subdued business performance. Consolidated net sales for FY2018 decreased by 7.06% to Rs. 139,970 lacs as compared to Rs. 150,610 lacs in FY2017.

Consolidated EBITDA (excluding other income) for FY2018 decreased by 19.9% to Rs. 13,239 lacs as compared to Rs. 16,528 lacs during the same period last year. This EBITDA (excluding other income) included an impact of Rs. 957 lacs on account of unfavorable foreign exchange variations. After adjusting for this impact, EBITDA (excluding other income) for the year would have been Rs. 14,196 lacs, representing a decline of 14.1% compared to FY2017. EBITDA (excluding other income) margin for the year under review was 9.4% compared to 10.9% in FY2017. On account of the implementation of GST, our working capital utilization increased, leading to higher short-term borrowings and finance charges on a y-o-y basis.

The Aerospace & Defence segment recorded a revenue growth of 3.1% to reach Rs. 35,634 lacs compared Rs. 34,569 in FY2017. Continuing order book execution led to substantial revenue growth in Q4 FY2018. Further, ramp up of phase 2 Airbus orders started resulting in stabilization of overall operations. Segment EBITDA was Rs. 8,143 lacs compared with from Rs. 10,473 lacs in FY2018. While India operations registered a 11.5% growth in revenue, UK performance increased by 17% on constant currency basis.

During the year, the Aerospace & Defence segment continued its focus on product innovation and advanced technology platform. The division announced commercial production of Airbus A330 Long Range FTBs to be manufactured in India and the UK during the life of the program. The Company successfully started the ramp up of phase 2 of Airbus orders, putting in place a state-of-the-art infrastructure and achieved a full-scale industrialization of the entire value chain. Further, the Company became the sole supplier of major sub-assemblies for Bell 407 helicopter cabins.

Hydraulics segment continued its strong performance during Q4 and FY2018, mainly on account of better order off takes. Revenues for this segment increased by 12.4% to Rs. 31,111 lacs compared to Rs. 27,683 lacs in the same period last year. One-time impact of long term union wages revision led FY2018 EBITDA to decline by 6.8% to Rs. 3,712 lacs. With a recent established sales office in the US, the Company expects to expand further in the North American markets. With improved farm sentiment and infrastructure investments, this segment is expected to remain strong.

With a focus on margin expansion, low margin products rationalization continued for the Automotive and Metallurgy business during FY2018. Adoption of such rationalization strategy impacted the financials performance during the year but resulted in significant improvement in EBITDA during the last quarter of FY2018. Revenue for this segment was Rs. 73,225 lacs, representing a decline of 17.1% compared to same period last year. Segment EBITDA was Rs. 1,849 compared to Rs. 2,939 in FY2017. New order ramp up and new machining facility in Germany expected to drive growth for this division going forward.

SHARE CAPITAL

As of March 31, 2018, the Company had an authorized share capital of Rs. 2,500 lacs, divided into 2,00,00,000 equity shares of Rs. 10/- each and Rs. 500 lacs divided into 5,00,000 redeemable cumulative preference shares of Rs. 100/- each. During the year under review, there was no change in the Company’s issued, subscribed and paid-up equity share capital. As of 31st March, 2018, the Company had issued, subscribed and paid-up equity share capital of Rs. 634.14 lacs divided into 63,41,443 equity shares of Rs. 10/- each.

TRANSFER TO RESERVES

During the year under review, your Directors do not propose to transfer any amount to General Reserve.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has duly complied with the provisions of Section 186 of the Companies Act, 2013 during the year under review. The details of loans availed by the Company during the year under review are mentioned in the notes to accounts that form part of this Annual Report.

DIVIDEND

During the year under review, your Directors do not propose to declare any dividends due to poor economic conditions and paucity of profits.

CAPITAL EXPENDITURE

During the year under review, your Company incurred capital expenditure of Rs. 7,085 lacs for physical infrastructure and Rs. 218 lacs for procurement of intangible assets. Significant investments have been made in building infrastructure, state-of-the-art machinery, design software, data security, information systems, and design and development activities; for the future benefits of your Company.

DEPOSITS

During the year under review, the Company neither accepted any deposits nor there were any amounts outstanding at the beginning of the year which were classified as ‘Deposits’ in terms of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 and hence, the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the Companies Act, 2013 is not applicable.

SUBSIDIARIES

The Company has ten subsidiaries. Pursuant to Section 129(3) of the Companies Act, 2013 and Accounting Standard- 21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the Financial Statements of its Subsidiaries.

Consolidated Financial Statements forms part of this Annual Report. Statement containing the salient features of the Financial Statements of the Company’s subsidiaries, associate(s) and joint venture(s) are enclosed as Annexure 1 in form AOC-1 to this Annual Report.

In terms of provisions of Section 136 of the Companies Act, 2013, the Company shall place separate audited accounts of the Subsidiary Companies on its website at www.dynamatics.com

The structure of Dynamatic Technologies Limited and its subsidiaries as on March 31, 2018 is appended hereunder :

INDIAN SUBSIDIARIES

JKM Research Farm Limited, India, (JRFL) is a wholly owned subsidiary of the Company. It continues to be the Research & Development facilitator to the Company. It operates a unique facility for testing and analysing complete tractor aggregates and systems.

JKM Erla Automotive Limited, India (JEAL) continues to be a wholly owned subsidiary of the Company.

JKM Ferrotech Limited, India (JFTL) is a subsidiary of Dynamatic Technologies. JFTL is into the manufacturing of ferrous alloy and castings, having its operations in Gummidipoondi, Tamil Nadu. This subsidiary has expertise in producing High Si-Mo automotive components and is certified to the highest quality standards specified by the Automotive Industry.

JKM Automotive Limited (JAL) is a wholly owned subsidiary of JKM Erla Automotive Limited.

OVERSEAS SUBSIDIARIES

JKM Global Pte. Limited, Singapore, is a wholly owned subsidiary of the Company. It continues to be a holding company for the overseas businesses.

Dynamatic Limited, UK, (DLUK) is a subsidiary of your Company having aerospace and hydraulics units at Bristol and Swindon.

Yew Tree Investments Limited, Bristol, UK is a wholly owned subsidiary of Dynamatic Limited, UK.

Dynamatic LLC, US is a subsidiary of Dynamatic Limited, UK.

JKM Erla Holdings GmbH, Germany (JKM Erla GmbH) is engaged in the business of setting up automotive components processing/manufacturing units.

Eisenwerk Erla GmbH, Germany (Eisenwerk) is a subsidiary of the Company. Eisenwerk has been in business for over many years and is a preferred supplier to leading global OEMs such as Audi, BMW, Borg Warner Turbo Emission Systems, Volkswagen and Daimler. The capabilities of this subsidiary includes high precision, complex metallurgical products for automotive engines and turbochargers.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Inductions, Re-appointments, Retirements & Resignations

During the year under review, the Board of Directors at their meeting held on 09th August, 2017 appointed Mr. Arvind Mishra as Additional Director of the Company.

Mr. Raymond Keith Lawton (DIN:01687605) stepped down from the Board Directors of the Company with effect from 19th July, 2017.

Mr. Vijai Kapur (DIN:00056415) and Mr. Krishnaswamy Srinivasapuram (00056250) ceased to be with effect from 13th August, 2017.

Mr. Arvind Mishra has been appointed as Executive Director and Global Chief Operating officer, Hydraulics & Head of Homeland Security.

Mr. Hanuman Kumar Sharma (DIN:07012725) stepped down from the Board Directors of the Company with effect from 14th February, 2018.

Mr. Chalapathi P, has been appointed as a Chief Financial Officer of the company with effect from 13th December 2017.

Mr. Sirish Saraf (DIN:0001918219) vacated the office of Directorship under section 167 read with 164(2)(a) of Companies Act, 2013.

Mr. James Tucker, Non-Executive Director of the Company would retire by rotation in accordance with section 152 of the Companies Act, 2013 and being eligible, offers himself for reappointment.

None of the Directors of the Company except Mr. Sirish Saraf, are disqualified from being appointed as Directors as specified under Section 164 of the Companies Act, 2013.

Details of all the Directors have been covered in Corporate Governance Report which forms part of the Annual Report.

Declaration by Independent Directors

All Independent Directors of the Company meet the criteria of Independence laid down in Section 149(6) of the Companies Act, 2013. In line with the provisions of section 134(3)(d) of the Companies Act, 2013, the declaration from Independent Directors, confirming their independence in terms of section 149 of the Companies Act, 2013 have been obtained.

Key Managerial Personnel (KMP)

During the year under review, the Company has designated following personnel as KMPs as per the definition under Section 2(51) and Section 203 of the Act:

- Mr. Udayant Malhoutra, CEO & Managing Director

- Mr. P S Ramesh, Executive Director & COO - Aerospace, India

- Mr. Arvind Mishra has been appointed as Executive Director and Global Chief Operating officer, Hydraulics & Head of Homeland Security.

- Mr. Naveen Chandra P, Head Legal, Compliance and Company Secretary

- Mr. Chalapathi P, has been appointed as a Chief Financial Officer of the company with effect from 13th December 2017.

BOARD MEETINGS

The Company prepares a Board and allied committee meeting calendar and circulates to all the directors in advance for their concurrence. During FY2018, seven meetings of the Board of Directors were held.

Details of the composition of the Board and its Committees and of the Meetings held, attendance of the Directors at such Meetings and other relevant details are provided in the Corporate Governance Report. These Board meetings were held during the FY2018 and not more than one hundred and twenty days had intervened between two consecutive meetings of the Board.

COMMITTEES OF BOARD OF DIRECTORS

The Board has seven committees viz; the Audit and Risk Management Committee, Nomination and Remuneration Committee, Stakeholders’ Relationship Committee, Technology & Strategy Development Committee, Finance Committee, Corporate Social Responsibility Committee and Independent Directors’ Committee. Details of all the Committees of Board of Directors as per the Secretarial Standard-1 as issued by the Institute of Company Secretaries of India have been disclosed in the Corporate Governance Report. The Board has accepted most of the recommendations made by all the Committees of Board of Directors during the year under review.

familiarization programme for the independent

DIRECTORS

An appropriate induction for new directors and ongoing training for all directors ensure high corporate governance in the Company. Dynamatic conducts induction programme for every new independent director to provide them an opportunity to build an understanding about Dynamatic, its businesses and the markets and regulatory environment in which it operates; familiarize with its management and its operations so as to gain a clear understanding of their roles and responsibilities and contribute significantly towards the growth of the Company. They have full opportunity to interact with Senior Management Personnel and are provided all the documents required and sought by them for enabling them to have a good understanding of the Company, its various operations and the industry in which it operates. Dynamatic Technologies firmly believes that a Board, which is well informed /familiarised with the Company, can contribute significantly to effectively discharge its role of trusteeship in a manner that fulfils stakeholders’ expectations.

During the year under review, the Company had carried out familiarisation programme for Independent Directors by organizing workshop at Auto unit, Eisenwerk Erla GmbH, Germany; Aerospace unit, Dynamatic Limited, Bristol, UK and Hydraulics unit, Dynamatic Limited, Swindon, UK.

In pursuit of this, the Directors are updated on a continuing basis on developments in the corporate and industry scenario including those pertaining to regulatory and economic environment, to enable them to take well informed and timely decisions. The details of the familiarisation programme may be accessed on the Company’s corporate website (www. dynamatics.com/investor.html)

PARTICULARS OF REMUNERATION OF DIRECTORS, KMP AND EMPLOYEES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is attached as Annexure 2 which forms part of this report. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure 2 which forms part of this report.

DIVERSITY IN THE BOARD

The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us retain our competitive advantage. The Board has adopted the policy on appointment, continuation and cessation of Directors which sets out the approach to diversity in the composition of the Board.

PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The Companies Act, 2013 states that a formal annual evaluation needs to be performed by the Board of its own performance, various committees of the Board and that of the individual directors. Schedule IV of the Companies Act, 2013, states that the performance evaluation of independent directors shall be done by the entire Board, excluding the director being evaluated.

The evaluation of all the directors and the Board as a whole was carried out based on the criteria and framework adopted by the Board as explained in the Corporate Governance Report. The Board of Directors expressed their satisfaction with the evaluation process.

REMUNERATION POLICY

The philosophy for remuneration of directors, KMP and all other employees of the Company is based on the commitment of fostering a culture of leadership with trust. Furthermore, the Company believes in providing an opportunity that has a strong linkage to and reinforces the performance culture of the Company. The remuneration policy is aligned to this philosophy. The Company has laid down remuneration policy which is designed to attract, motivate, retain manpower and improve productivity by creating a congenial work environment, encouraging initiative, personal growth and teamwork besides offering appropriate remuneration package. Pursuant to the applicable provisions of the Companies Act, 2013 and the Listing Regulations, the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company and Individual Directors, including Independent Directors. The said policy has been enclosed as Annexure 3.

Members can download the complete remuneration policy on the Company’s website (www.dynamatics.com/investor. html).

CORPORATE SOCIAL RESPONSIBILTY (CSR)

- Dynamatic Technologies Ltd has strengthened its objectives of CSR and created a Skill Development Initiative Team to develop skills in trainees with ITI / Diploma and in serving workers from aerospace industry, who volunteer to enhance their skill levels. The team also focuses in upgrading the technical skills in operations such as sheet metal forming, material handling, painting and NDT etc.

- To accomplish this task in earnest, your company adopted ITI Devanahalli under PPP program and has developed and introduced special curriculum in Aerospace Fitter Trade to train the students in structural assembly techniques such as drilling, reaming, riveting and sealant application. Classes for the ITI trainees were conducted in some existing trades to provide basic introduction to aerospace technology and certain soft skills.

- During the current year an exclusive Building along with a Borewell to provide drinking water was constructed and state-of- the-art teaching aids, tools and materials were acquired to create a new Skill Development Center at ITI Devanahalli.

- This new Skill Development Center at ITI Devanahalli has adequate Training Rooms for theory classes, Workshop practices and Rest Rooms for the trainee students. The required infrastructure such as Compressor and Generator have been procured and installed. The Building is fully furnished and was inaugurated on 12th December 2017 by the amidst designatories and CEO & MD of Dynamatic Technologies Ltd. ITI authorities from the State Government, IMC Chairman and Members, and other industry partners were present on the occasion.

- Total amount spent for various CSR activities for ITI Devanahalli was over Rs. 7 lakh.

RISK MANAGEMENT POLICY

Risk management forms an integral part of the management system and determines the risk situation in business processes and organizational units. Risk management provides the organization at all levels with an instrument for detecting risks early and taking steps to eliminate, reduce, and consciously deal with risks The Company has a robust process in place to identify key risks across the Group and prioritise relevant action plans to mitigate these risks. The Audit & Risk Management Committee has been entrusted with the responsibility to assist the Board members about the risk assessment and its minimization procedures, which includes discussing the management submissions on risks, prioritising key risks and approving action plans to mitigate such risks. The Policy suggests framing an appropriate response action for the key risks identified, so as to make sure that risks are adequately compensated or mitigated.

The main objectives of the said policy are.

i. To ensure that all the current and future material risk exposures of Dynamatic Technologies are identified, assessed, quantified, appropriately mitigated and managed;

ii. To establish a framework for Dynamatic Technologies’ risk management process and to ensure company-wide implementation;

iii. To ensure systematic and uniform assessment of risks related with each of the units of Dynamatic Technologies;

iv. To enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices; and

v. To assure business growth with financial stability.

The said policy has been uploaded on Company’s website (www.dynamatics.com/investor.html)

WHISTLE BLOWER POLICY AND VIGIL MECHANISM

The Company has adopted a Vigil Mechanism Policy through which all stakeholders including Directors and employees may report unethical behavior, malpractices, wrongful conduct, fraud, violation of the Company’s code of conduct without fear of reprisal. Details of complaints received and the action taken are reviewed by the Audit & Risk Management Committee. During the year under review, the Company / Committee has not received any such complaint. The functioning of the vigil mechanism is reviewed by the Audit & Risk Management Committee from time to time. The policy on vigil mechanism may be accessed on the Company’s website (https://www. dynamatics.com/investor.html)

POLICY FOR SAFETY AND WELL BEING OF WOMEN

To motivate our Women work force, Women’s Day was celebrated with full gusto in all the Divisions. In keeping with our resolve to ensure zero incidents of sexual harassment at workplace, provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of complaints of sexual harassment at workplace are being strictly adhered to. Awareness programmes and workshops are held periodically to educate all employees. There have been no complaints of sexual harassment received during the year. Work on construction of a Creche in Aerospace Division has commenced and likely to be completed by end May 2018.

AUDITORS

Statutory Auditors

M/s. B S R & Co. LLP, Chartered Accountants are the Statutory Auditors of the Company for a period of five years with effect from 14th August 2014. M/s. B S R & Co., LLP have confirmed to the Company that they are not disqualified under section 141 of the Companies Act, 2013, or any other applicable provisions for the time being in force and are eligible for continuing as statutory auditors of the Company. M/s. B S R & Co., LLP have also confirmed to the Company that, their appointment, if made, would be within the limits prescribed under the Companies Act, 2013.

The report of the Statutory Auditors along with notes to Schedules is enclosed to this report. The observations made in the Auditors’ Report are self-explanatory and therefore do not call for any further comments. The Auditor’s Report does not contain any qualification, reservation or adverse remark.

Cost Auditors

As per Section 148 of the Act, the Company is required to have the audit of its cost records conducted by a Cost Accountant in practice. M/s Rao, Murthy & Associates who were appointed as Cost Auditors of the Company for the FY2018 conduct cost audits pertaining to relevant products prescribed under the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time.

Internal Auditors

The Internal Audit function is responsible for assisting the Audit & Risk Management Committee on an independent basis with a full status of the risk assessments and management. M/s. Ernst & Young, LLP were appointed as Internal Auditors of the Company for the FY2018.

Secretarial Auditor

The Company had appointed Mr. R Vijayakumar, Company Secretary in practice in Bangalore, to conduct its Secretarial Audit for the financial year ended 31st March, 2018. The Secretarial Auditors have submitted their report, confirming compliance by the Company of all the provisions of the applicable corporate laws. The Report does not contain any qualification, reservation or adverse remark. The Secretarial Audit Report is annexed as Annexure 4 to this report.

Tax Auditors

M/s BVS & Associates, Chartered Accountants, are the Tax Auditors of the Company. The Tax Auditor’s Report does not contain any qualification, reservation or adverse remark.

INTERNAL CONTROLS SYSTEMS AND THEIR ADEQUACY

According to Section 134(5)(e) of the Companies Act, 2013, the term Internal Financial Control (IFC) means the policies and procedures adopted by a company for ensuring the orderly and efficient conduct of its business, including adherence to the company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

The Company has a well-placed, proper and adequate internal financial control system which ensures that all assets are safeguarded and protected and that the transactions are authorised, recorded and reported correctly. The Company’s internal financial control system also comprises due compliances with Company’s policies, standard operating procedures and audit and compliance by an in-house internal audit division, supplemented by internal audit checks from M/s. Ernst &Young, LLP, the Internal Auditors and various transaction auditors.

The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting to the Audit & Risk Management Committee of the Board. A CEO and CFO Certificate, forming part of the Corporate Governance Report, further confirms the existence and effectiveness of internal controls and reiterates their responsibilities to report deficiencies to the Audit & Risk Management Committee and rectify the same. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

OTHER DISCLOSURES

Events Subsequent to the Date of the Financial Statements

There were material changes / commitments affecting the financial position of the company between March 31, 2018 and the date of Board’s Report.

The Board at its meeting held on 28th February, 2018 had approved the Divestment of Automotive and wind Farm business located at Chennai and Coimbatore. The shareholders had approved the proposal of Divestment through postal ballot process. Mr. Vijay Kumar (practicing Company Secretary had issued the scrutinizer report dated 16th May, 2018 and declared the resolution passed with requisite majority and the same is made available on the website of the Company.

Change in the Nature of Business, if any

The Company continues to focus on its key business segments and looks for selective growth / expansion opportunities. There was no change in the nature of business during the year under review. State of the affairs of the Company and future plan of action and outlook is discussed in this report.

Significant & Material Orders Passed by the Regulators

During the year under review, no significant / material orders were passed by the regulators or the Courts or the Tribunals impacting the going concern status and the Company’s operations in future.

Demat Suspense Account unclaimed shares

As on 31st March, 2018 there are 22 members, holding 1,161 equity shares of Rs. 10/- each, lying in the escrow account due to non-availability of their correct particulars. A detailed note in this regard is provided in the Corporate Governance Section under “Suspense Account for the unclaimed shares”. The voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.

Extract of the Annual Return

Pursuant to the provisions of section 92(3) of the Companies Act,2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return is made part of this Annual Report.

Listing with Stock Exchanges

The Company confirms that it has paid the Annual Listing Fees for the year 2017-2018 to NSE and BSE where the Company’s Shares are listed.

Consolidated Financial Statements

The Directors have pleasure in attaching the Consolidated Financial Statements prepared by the Company in accordance with the relevant Accounting Standards issued by the Institute of Chartered Accountants of India, which form part of the Annual Report.

RELATED PARTY TRANSACTIONS

With reference to Section 134(3)(h) of the Companies Act, 2013, all contracts and arrangements with related parties under Section 188(1) of the Act, entered into by the Company during the financial year, were in the ordinary course of business and on an arm’s length basis.

As per the Listing Regulations, all related party transactions are placed before the Audit & Risk Management Committee for approval. Prior omnibus approval of the Audit & Risk Management Committee has been obtained for the transactions which are of foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval are presented to the Audit & Risk Management Committee by way of a statement giving details of all related party transactions. The Company has developed a Related Party Transactions Manual for the purpose of identification and monitoring of such transactions. Particulars of Contracts or Arrangements with Related parties referred to in Section 188(1) is disclosed in Form AOC- 2 as Annexure 6.

ENVIRONMENTAL PROTECTION MEASURES

Your Company continuously strives to reduce our environmental footprint, while enhancing livelihood of people across our product value chain. Accordingly the Company has adopted a number of measures to improve in the field of environment, safety and health. Measures like standard operating procedures, training programmes for all levels of employees regarding resource conservation, environment protection and housekeeping have been conducted. Sustainable living is a part of long-term business strategy of the Company.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGOING

The information relating to conservation of energy and technology absorption are appended hereunder:

Conservation of Energy

All our facilities in India and abroad are built with the environment in mind and the processes are designed for efficiency, energy conservation and to ensure that no waste is transmitted into the environment. The industrial complexes are highly energy efficient and completely non-polluting. This is being systematized and quantifiable by implementing ISO 14000.

Technology Absorption

Research & Development plays a vital role in developing and adopting new technologies to enhance our operational efficiencies. The Company owns the world’s best hydraulic technologies. The Company has added technology from Plessey through the acquisition of Dynamatic Limited, UK, in 2007.

The Aerospace & Hydraulics units in India & the UK; Automotive units in India and Germany work together in resolving engineering challenges leading to better synergies across the group.

Research & Development (R&D)

R&D and Innovation continues to be an integral part of the Company’s growth strategy, business profitability, sustainability and as a part of its contribution towards the building of the Nation. Dynamatic Science Lab, created by consolidating various research and technology functions, helps to enhanced value delivery by leveraging skills and competencies to create new business opportunities. The Company’s Research & Development is actively driven by a Board level committee constituted as the Technology & Strategy Development Committee.

The Technology & Strategy Development Committee of the Board provides direction to the Company’s R&D strategy and on key issues pertaining to R&D technology. The Committee regularly reviews and updates the skills and competencies required, the structure and the processes needed to ensure that the R&D initiatives of today result in products necessary for the sustained and long term growth of the Company.

MANAGEMENT’S DISCUSSION & ANALYSIS REPORT

Pursuant to regulations 34 of the Listing Regulations, Management’s Discussion & Analysis Report for the year is presented in a separate section forming part of the Annual Report.

CORPORATE GOVERNANCE

Corporate Governance is a set of principles, processes and systems which govern a company. The Company believes that an effective corporate governance practices provides a strong foundation for a successful enterprise. The key principles on which a sound Corporate Governance system is based are independence, transparency, accountability, responsibility, compliance, ethics, values and trust. Corporate Governance enables an organization to perform efficiently and ethically generate long term wealth and create value for all its stakeholders.

Dynamatic Technologies is committed to maintain the best standards of Corporate Governance and adopted many ethical and transparent governance practices even before they were mandated by law. The Company has always strived towards building trust with shareholders, employees, customers, suppliers and other stakeholders based on the principles of good corporate governance. Strong leadership and best-in-class corporate governance practices are considered one of the major strength of the Company.

A detailed report on Corporate Governance, pursuant to the requirements of Regulation 34 of the Listing Regulations, forms part of the Annual Report. The certificate from the Practicing Company Secretary confirming compliance of the Corporate Governance norms as stipulated in the Listing Regulations is also included in the Annual Report.

PROMOTERS

The list of the promoters is disclosed for the purpose of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

Mr. Udayant Malhoutra is the promoter of the Company within the definition of ‘Promoter’ for the purpose of regulations 2(1)(s) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

Details of the promoter group are appended as under:

No.

Name of the entity / person

1.

JKM Holdings Private Limited

2.

Udayant Malhoutra and Company Private Limited

3.

JKM Offshore India Private Limited

4.

Wavell Investments Private Limited

5.

Mrs. Barota Malhoutra

6.

Vita Private Limited

7.

Christine Hoden (India) Private Limited

8.

Primella Sanitary Products Private Limited

9.

Greenearth Biotechnologies Limited

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the section 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of knowledge and belief and according to the information and explanations obtained by them, hereby confirm that:

a. In the preparation of accounts for the financial year ended March 31, 2018, the applicable Accounting Standards have been followed with proper explanation relating to material departures if any.

b. We have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Profit & Loss Account of the Company for the year under review.

c. We have taken proper and sufficient care for the maintenance of adequate records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. We have prepared the accounts for the financial year ended March 31, 2018, on a ‘going concern’ basis.

e. We have laid down internal financial controls to be followed by the company and that the internal financial controls are adequate and are operating effectively.

f. We have devised proper systems to ensure compliance with the provisions of all applicable laws and the systems are adequate and operating effectively.

g. Transfer of amounts to Investor Education and Protection Fund

Pursuant to the provisions of the Companies Act, 2013 (as amended from time to time), dividends and shares which remained unclaimed for a period of seven years, have been transferred by the Company to the Investor Education and Protection Fund.

HUMAN RESOURCES

The Company believes that human resources are critical for the overall success of the organization and ensures to undertake best efforts for maintaining a cordial relationship with the employees. Dynamatic’s focus has always been to acquire, nurture and develop the best talent to prepare them for leadership roles within the organization. Various initiatives to improve the skills of its employees though training initiatives are ongoing exercise at the Company. Such initiatives are important to ensure job enrichment, engagement and accountability for performance, career progression, reward, recognition and welfare of the employees. Your Company has an excellent track record of cordial and harmonious industrial relations and over the years not a single man-day has been lost on account of labor unrest

ACKNOWLEDGMENTS

Your Directors would like to wish their sincere appreciation to the investors, financial institutions and banks for their continued support during the year. Your Directors would like to thank the regulatory authorities and government authorities and agencies for their continued guidance and support. Your Directors also wish to place on record their deep sense of appreciation to employees and executives at all levels for their efforts and dedication. Their hard work and commitment has enabled the Company to be on the forefront of the industry. We also take this opportunity to thank all our customers without whom our success story would not have been possible.

For and on behalf of the Board of Directors

Udayant Malhoutra P S Ramesh

CEO & Managing Director Executive Director

DIN : 00053714 & COO, Aerospace, India

DIN:05205364

Place : Bangalore

Date : 29 May 2018

स्रोत: रेलीगरे टेचनोवा

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