Danlaw Technologies India Ltd Directors Report.

To,

The Members,

The Directors submit annual report of Danlaw Technologies India Limited (DTIL) along with the audited financial statements for the financial year ended March 31, 2021 Consolidated performance of the Company and its subsidiary has been referred to wherever required.

Financial Results

(Rs. In Lakhs)

2020-21 2019-20
Particulars DTIL DTI DEAL Cons. DTIL DTI DEAL Cons.
Net Sales/Income from operations 2780.82 11.25 7095.94 9888.01 1534.25 135.19 3815.53 5484.97
Other Income 109.03 0.86 44.12 154.01 114.51 6.11 2.54 123.16
Total Income 2889.85 12.11 7140.06 10042.02 1648.76 141.30 3818.07 5608.13
Cost of materials 1827.73 0.00 4564.59 6392.32 606.19 0.00 2380.62 2986.81
Employees Cost 984.52 7.29 973.37 1965.18 928.81 95.70 918.20 1942.71
Finance Cost 13.89 0.00 75.87 89.76 24.26 0.00 19.44 43.70
Depreciation 222.99 0.00 170.84 393.83 187.85 0.00 132.52 320.37
Other Expenses 208.22 5.93 720.49 934.64 330.99 6.90 642.93 980.82
Total Expenses 3257.35 13.22 6505.16 9775.73 2078.10 102.60 4093.71 6274.41
Profit / (Loss) before tax (367.50) (1.11) 634.90 266.29 (429.34) 38.70 (275.64) (666.28)
Current Tax 0.00 (0.11) 89.75 89.64 0.00 8.91 0.00 8.91
Prior-period Taxx 0.00 0.00 28.41 28.41 0.25 0.00 (6.20) (5.95)
Deferred Tax (98.89) 0.00 87.30 (11.59) (102.48) 0.00 (46.35) (148.83)
Profit / (Loss) after tax (268.61) (1.00) 429.44 159.83 (327.11) 29.79 (223.09) (520.41)
Profit / (Loss) attributable to:
- Owners of the Company (268.61) (1.00) 300.61 31.00 (327.11) 29.79 (156.17) (453.49)
- Non controlling interests 0.00 0.00 128.83 128.83 0.00 0.00 (66.93) (66.93)
Paid up equity share capital 370.75 295.66 516.97 370.75 370.75 295.66 516.97 370.75
Reserves and Surplus
(Excl. revaluation reserve) 1460.94 346.80 1342.80 1833.14 1737.79 367.09 935.97 1850.56
Earnings per share - basic (7.25) (0.03) 8.31 0.84 (8.82) 46.55 (4.32) (12.23)
Earnings per share - diluted (7.25) (0.03) 8.31 0.84 (8.82) 46.55 (4.32) (12.23)

DTIL: Danlaw Technologies India Limited

DTI : Danlaw Technologies Inc - 100% wholly owned subsidiary

DEAL: Danlaw Electronics Assembly Limited - subsidiary

Dividend

In view of the accumulated losses, your directors do not recommend any dividend for the Financial Year 2020-2021

Transfer to Reserve

Since there is no surplus in Profit and Loss account, there is no transfer to general reserve.

Share Capital

During the year under review, there were no changes in the share capital of the Company. Share Capital of the Company as on March 31, 2021 was as follows:

Authorized Capital - Rs. 5,00,00,000/- (Rupees Five Crores only) divided into 50,00,000 (Fifty Lakhs Only) Equity Shares of Rs. 10 each. Issued, Subscribed and Paid Up Capital – Rs. 3,70,74,900/- (Rupees Three Crores Seventy Lakhs Seventy Four Thousand Nine Hundred Only) divided into 37,04,790 (Thirty-Seven lakhs four thousand Seven Hundred and Ninety only) Equity Shares of Rs. 10 each.

Companys Performance (Stand Alone)

Revenue from operations has increased by 81% to Rs.2780.82 lacs. The net Loss for the fiscal year is 268.60 lacs as compared to a Loss of Rs.327.11 lacs in the previous year.

The other income of Rs.109.03 lacs include Rs.88.09 lacs of Lease Rental income, Rs.10.02 lacs interest income.

Companys Performance (Consolidated)

Revenue from operations has increased by 80% to Rs.9888.01 lacs. The net Profit for the fiscal year is 31 lacs as compared to a Loss of Rs.453.49 lacs in the previous year.

The other income of Rs.154.01 lacs include Rs.88.09 lacs of Lease Rental income, Rs.13.27 lacs interest income and Rs.40.88 lacs exchange gain.

Change in the nature of business, if any

During the year under review, there has been no change in the nature of business of the Company.

Material Changes and Commitments Affecting the Financial Position of the Company

There have been no material changes and commitments, affecting the financial position of the company which occurred during and between the end of the financial year to which the financial statements relate and the date of this report.

Scheme of Amalgamation

During the FY 2020-21, the Scheme of Amalgamation between Danlaw Technologies India Limited (Transferee Company) and Danlaw Electronics Assembly Limited (Transferor Company) and their respective Shareholders and Creditors as per Sections

230 to 232 of the Companies Act, 2013 and other applicable provisions, if any, of the Companies Act, 2013 filed with the BSE on 01.09.2020 and the no observation letter from BSE received on 20.04.2021. The said scheme was filed with the National Company Law Tribunal(NCLT), Hyderabad Bench on 24.05.2021.The Honble National Company Law Tribunal, Hyderabad Bench (“Honble Tribunal” or “NCLT”) by an order dated Thursday, 29th July 2021 read with corrigendum Order dated 05th August, 2021, in the Company Scheme Application No. C.A. (CAA) NO. 34/230/HDB/2021 (“Order”) has directed that a meeting of the equity shareholders of the Company, scheduled on Saturday, September 18, 2021 at 12:30 P.M (IST). through Video Conferencing ("VC")/ Other Audio Visual Means (“OAVM”) to consider, and if thought fit, to approve the said Scheme.

Events subsequent to the date of financial statement

There are not major events subsequent to the date of financial statement

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future

There are no significant and material orders were passed by regulators or courts or tribunals impacting the going concern status and Companys operations in future.

Internal financial control systems and their adequacy

The Companys internal financial control systems are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, executing transactions with proper authorization and ensuring compliance of corporate governance.

Subsidiary Companies

Danlaw Technologies, Inc - wholly owned subsidiary in USA Danlaw Electronics Assembly Limited Subsidiary Company, India

Performance and financial position have been given above in the financial results. A Statement containing salient features of the financial statement of our subsidiaries in the prescribed format AOC-1 as appended as Annexure-I.

Deposits from public

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the data of the balance sheet.

Auditors

In terms of the provisions of Section 139(1) of the Companies Act, 2013 and Companies (Audit and Auditors) Rules, 2014 the Company appointed the Statutory Auditors for a period of five years from the conclusion of the 24th Annual General Meeting upto the conclusion of 29th Annual General Meeting. Your Company has received confirmation from the said Auditor that their appointment is within the limits prescribed under Section 139(1) of the Companies Act, 2013 and Rule 4(1)(a) of Companies (Audit and Auditors) Rules, 2014.

The requirement for the annual ratification of auditors appointment at the AGM has been omitted pursuant to Companies (Amendment) Act, 2017 notified on May 7, 2018.

Auditors report

There are no qualifications, reservations or adverse remarks made by M/s. CSVR & Associates, Chartered Accountants, and Statutory Auditors in their report for the Financial Year ended 31st March, 2021. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company under sub-section (12) of section 143 of the Companies Act, 2013, during the year under review.

Secretarial Auditors :

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules made thereunder, the Company has appointed Syed Meera Mohiddin, Company Secretary in Practice (CP No 7813) to conduct the Secretarial Audit of the Company and related records for the year ended 31st March 2021. The Secretarial Audit Report of the Company is annexed herewith as Annexure and forms an integral part of this report.

Secretarial Auditors Report

There are no qualifications, reservations or adverse remarks made by Syed Meera Mohiddin, Practicing Company Secretary in their report for the financial year ended 31st March, 2021.

Internal Auditor

The Board on the recommendations of the Audit Committee has appointed M/s. Ramana Reddy & Associates, Chartered Accountants as internal auditors of the Company. The Internal Auditors are submitting the reports regularly.

Maintenance of cost records

The company is not required to maintain cost records as specified by the central government under sub section (1) of section 148 of the Companies Act, 2013.

Extract of the Annual Return

The extract of the annual return in Form No. MGT 9 is annexed and shall form part of the Boards Report.

Conservation of energy and technology absorption

a) Conservation of energy

Your Company is engaged in the business of software and information technology and has no specific activities relating to conservation of energy and technology absorption as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) the Companies (Accounts) Rules, 2014. The Company has taken necessary measures wherever possible for the conservation of energy. However, your Company uses information technology extensively in its operations and also continues its endeavor to improve energy conservation and utilization, safety and environment.

b) Research & Development and Technology Absorption:

(i) R & D: Your Company has a team of people working on R & D. This year Rs.141.09 lacs spent on R&D.

(ii) Technology Absorption: Your Company continues to use state of the art technology for improving the productivity and quality of its products and services.

To create adequate infrastructure, your Company continues to invest in the latest hardware and software.

Foreign exchange earnings and outgo:

The particulars of foreign exchange earnings and outgo are given below.

Particulars 2020-2021 2019-2020
Earnings 4,02,75,280 5,47,97,087
Outgo 43,46,365 3,28,86,619

Corporate social responsibility policy

The Company was not required to constitute Corporate Social Responsibility (CSR) Committee as the company has not met any of the thresholds mentioned in section 135 of the Companies Act, 2013 during the financial year under review. Hence reporting about the policy on Corporate Social Responsibility and initiative taken are not applicable to the company.

Directors and Key Managerial Personnel

1. Mr Raju S Dandu Whole-time Director and Executive Chairman

2. Mr Sirish Batchu Managing Director

3. Mr Naga Satyanarayana Sappata Independent Director

4. Mr K N Praveen Kumar - Independent Director

5. Mr T Ravikumar Independent Director

6. Mrs M Sridevi Non Executive Non Independent Director*

7. Mr A V RK Varma CFO

8. Mr Gaurav Padmawar - Company Secretary

All the Independent Directors of your Company have given declarations under Section 149(7) of the Companies Act, 2013 that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and the Rules made there under and also as per applicable regulations of the SEBI (LODR) Regulations, 2015. None of the Directors are disqualified from being appointed or holding office as Directors, as stipulated under Section 164 of the Companies Act, 2013. * The Board of Directors of the Company through Circular Resolution approved the appointment of Mrs. Sridevi Madati [DIN: 02446610], as an Additional Director(non-executive and non-independent) of the company under the category of Woman director of the Company with effect from 24th December 2020, who shall hold office up to the date of ensuing Annual General Meeting or last date on which the Annual General Meeting should have been held, whichever is earlier. There are no changes in the office of Key Managerial personnel of the company during the year.

Meeting of the Board of Directors

Four meetings of the board were held during the year. The Meetings were held on, 30th June, 2020, 22nd August 2020, 13th November 2020, 13th February 2021. The maximum interval between any two meetings did not exceed 120 days. The meeting of Independent Directors held on 13th February 2021.

Audit Committee

As on 31st March, 2021, the Audit Committee consists of four directors as its members, out of whom three are independent non-executive directors and one is Whole-time Director. There were 4 (four) meetings held on 30th June 2020, 22nd August 2020, 13th November 2020, 13th February 2021 during the Financial Year 2020-21 Names of the members and the Chairman of the Committee as on 31st March, 2021:

Name Category
Mr. Raju S Dandu Executive Director
Mr. Naga Satyanarayana Sappata Non-Executive - Independent Director
Mr. K N Praveen Kumar Non-Executive - Independent Director
Mr. T Ravikumar Chairman Non-Executive - Independent Director

Necessary quorum was present in all meetings .Mr.T Ravikumar Chairman of the Audit Committee attended the last Annual General Meeting (AGM) of the Company. The terms of reference to the Audit Committee cover the matter specified for Audit Committee under Regulation 18 of SEBI Listing Regulations and Section 177 (1) of the Companies Act, 2013 and SEBI Listing Regulations.

Nominations and Remuneration Committee

The Nomination and Remuneration Committee of the Board of Directors meets the criteria laid down under section 178 of the Companies Act, 2013 read with the Regulation 19 of the SEBI Listing Regulations. One meeting of the Nomination and Remuneration Committee was held during the year. The dates on which the said meetings was held on 13.02.2021 Names of the members and the Chairman of the Committee as on 31st March, 2020 are given below

Name Category
Mr. Naga Satyanarayana Sappata Independent Non-executive - Chairman
Mr. Kotti Nanda Praveen Kumar Independent Non-executive
Mr.Ravi Kumar Tamma Independent Non-executive

Stakeholder Relationship Committee

The Stakeholder Relationship Committee (SRC) of the Board of Directors meets the Criteria laid down under Section 178 of the Companies Act, 2013, read with the Regulation 20 of the SEBI Listing Regulations.

One meeting of the Stakeholders Relationship committee was held during the year. The dates on which the said meetings was held on 13.02.2021 M/s. KFin Technologies Private Limited, the Registrars and Share Transfer Agents, maintains the share accounting package and upgrades the data on weekly basis, as per the information received from NSDL / CDSL. No investor complaints were received during the entire financial year.

Names of the members and the Chairman of the Committee as on 31st March, 2020 are given below

Name Category
Mr Dandu Satyanarayana Raju Executive Director
Mr. Naga Satyanarayana Sappata - Independent Non-executive
Mr.Ravi Kumar Tamma - Independent Non-executive- Chairperson
Mr Sirish Batchu Executive Director

Particulars of loans, guarantees or investments under section 186

In the Financial Year 2020-21, the Company has not given any loan, guarantees or made any investments exceeding sixty per cent of its paid-up share capital, free reserves and securities premium account or one hundred per cent of its free reserves and securities premium account, whichever is higher, as prescribed in Section 186 of the Companies Act, 2013.

Particulars of contracts or arrangement with related parties:

None of the transactions with related parties falls under the scope of Section 188(1) of the Act. Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure II in Form AOC-2 and the same forms part of this report.

Managerial Remuneration

a. The ratio of remuneration of Managing Director to the median remuneration of the employees of the Company for the financial year: 23.8

b. The ratio of remuneration of Whole Time Director to the median remuneration of the employees of the Company for the financial year: 5.01

c. No other directors are paid remuneration except sitting fees

d. The number of permanent employees on the rolls of the Company: 124

Particulars of Employees

None of the employees of your Company is in receipt of remuneration requiring disclosure pursuant to the provisions of Section 134(3) (q) of the Companies Act, 2013 read with Rule 5(2) the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Hence, no such particulars in this regard are annexed.

Vigil Mechanism/ Whistle Blower Policy

The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act and in terms of regulation 22 of the SEBI Listing Regulation (URL: www.danlawtechnologies.com).

Obligation of Company under the Sexual Harassment of Women Workplace (Prevention,Prohibition and Redressal) Act, 2013

During the financial year 2020-2021, the Company has not received any complaint of sexual harassment against women employees of the Company.

Industry based disclosures as mandated by the respective laws governing the company

The Secretarial audit report for the financial year 2020-21 has briefed on compliance of industry-based disclosures and concerned laws governing the company.

Managements Discussion and Analysis:

In terms of the provisions of Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Managements discussion and analysis is set out in this Annual Report & marked as Annexure.

Directors Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are 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 of the Company for that period;

iii. the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the directors had prepared the annual accounts on a going concern basis; v. the directors had laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; vi. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Companys internal financial controls were adequate and effective during the financial year 2020-21.

Corporate Governance Report

As per the provisions of 15(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”), the compliances with corporate governance provisions as specified in Regulations 17 to 27 are applicable to the Company only if its paid up Capital exceeds Rs. 10 Crores and if Net worth is above Rs. 25 Crores. The following are the Paid up Capital and Networth details as on 31st March 2020 and 31st March 2021 of the Company

Particulars Amount as on 31.03.2020 Amount as on 31.03.2021
1 Paid up Capital 3,70,74,900 3,70,74,900
2 Networth 21,08,53,715 18,31,68,532

Hence, the compliance of provisions of Regulations 17 to 27 of SEBI (LODR) Regulations are not applicable to the Company. In light of the above, Corporate Governance Report is not applicable to the Company during the period under review.

Acknowledgement

Your Directors place on record their gratitude and appreciation for the continued cooperation and excellent support received from all the quarters. Your Directors also wish to place on record their appreciation for the sincere contributions received from the employees of the Company in enabling it to achieve the performance during the year under review and the valuable co-operation and continuous support extended by the Bankers, Consultants, Stakeholders, Strategic Investor, various Government and Statutory authorities and other business associates.

By order of the Board
For Danlaw Technologies India Ltd
Place : Hyderabad Raju S Dandu
Date : 14-08-2021 Chairman
(DIN : 00073484)