Danlaw Technologies India Ltd Management Discussions.


The financial statements have been prepared in compliance with accounting standards IND AS. The financial statements for Danlaw Technologies Inc. (our US subsidiary) have been prepared in compliance with US GAAP. Our Management accepts full responsibility for the integrity of these financial statements.

Market Scenario and Trends

The economic impact of the COVID-19 pandemic is likely to be significant as pointed out by several global experts. As the effects of the virus slows down, countries and economies are expected to regain economic momentum.

The automotive industry in India was pulling itself up from a prolonged slump when the pandemic threw everything out of gear. The Indian automotive industry produced a total 26.36 Million vehicles including Commercial Vehicles, Two Wheelers, Passenger Vehicles & Three Wheelers during the period April-March 2020, registering a de-growth of (-) 14.73 percent over the same period last year.

While the short term looks challenging, the long-term outlook continues to remain positive and strong, with the current phase seen only as a temporary one. We believe that recovery is likely to be gradual.

There is marked optimism among the Indian OEMs to adopt new age Digital solutions like Telematics and associated services, where your company continues to stay focussed, invested to create cutting edge products and solutions.


The COVID-19 outbreak is bringing in a major change in the way automotive industry adopts Digitisation. Digital initiatives are being seen as a necessary key enabler, for enhancing the customer experience and to boost sales. Automotive OEMs are prioritising investments in digital platforms than ever before.

The automotive OEM Telematics Market Size in India is anticipated to grow at a significant growth rate presenting a significant opportunity for your company. Some of the factors fuelling the growth for telematics services in India are:

Government rules and regulations for telematics

Government rules and regulations for the safety, security, and tracking of vehicles in different regions drives the growth of the telematics market. For instance, in April 2018, government of India passed rule for all the public transport vehicles over six-seater capacity should have tracking device installed in them. Therefore, government regulations for vehicle telematics fuels the growth of the market.

Rising trend of connectivity solutions

Smartphones have changed the definition of connectivity over time. People wish to stay connected with the outer world even while travelling. Now that connectivity has become the need of the hour, automobile manufacturers adopt connectivity solutions in their vehicles to boost their automobile sales. Consumers are expecting their vehicles to perform tasks similar to computers and smart phones. Adding connectivity solutions in the vehicle has become the topmost priority for automobile manufacturers. Connectivity can be provided in a car using embedded, integrated, or tethered connectivity solutions. The automotive industry is witnessing a phase of digital revolution. Therefore, the telematics market is expected to grow at a promising rate due to the rise in customer demands for staying connected 24*7 even while travelling.

Ease in vehicle diagnosis

Advanced diagnostic systems are expected to boost the growth of the commercial telematics market. In advanced diagnostics, the system in the vehicle will supply data of the vehicle to both the automobile dealer / service point and the customer, which can help predict potential automobile issues before they take place in the field.

In fleet management, it is easy to track vehicle records and decide which vehicle has travelled the most and accordingly offer service with the help of connectivity solutions. The diagnostic service offered is an efficient way to diagnose the status of the vehicles. It allows the consumers to manage the maintenance of their vehicle, thus saving money and time by avoiding unwanted expenses & breakdowns. The system provides a maintenance schedule and timely reminders to the consumer. The diagnostic system keeps a track of the smoke emission and fuel consumption of the vehicles, thereby monitoring its engine health. This service sends a detailed report about the vehicle to the decision maker who decides on the service schedules for the automobile. Thus, ease of vehicle diagnosis with the help mobile applications is expected to fuel the growth of the market.

Globally, the vehicle telematics market is expected to grow from $39 Billion to about $103 Billion by 2022. In that time frame APAC, which includes India, is expected to grow to be the leading contributor to the CV telematics market. (Courtesy Roland Berger report). Commercial Vehicle telematics market is expected to grow at 25% per annum.

Telematics ecosystem will involve diversified competencies:

• Manufacturing of hardware

• Distribution Connected Vehicle devices

• Connectivity Hardware

• Connectivity Services

• Data Analytics and knowledge generation

• Creation of applications and software.

The opportunities for Indian telematics providers include:

• Connectivity solutions

• Driver assistance and related services

• IT services including Cyber security

Threats, Risks and Concerns

The Indian telematics industry remains highly competitive. The competitive environment is further expected to intensify with increasing product extensions, more advanced offerings, technological innovations, and Mergers & Acquisitions.

To remain competitive, we keep abreast of global developments as well as emerging technologies and develop innovative solutions of our own.

The exchange rate between USD and Rupee has fluctuated significantly in recent years and may continue to fluctuate in the future. Currency fluctuations can adversely affect our gross margins.

The global economic uncertainties may lead to economic slowdown and hence our clients may defer their technology spending significantly. This may negatively affect our revenues and profitability.

These risks are broadly industry wide risks. Your company has taken steps to address these unforeseen events and minimize the impact on the company.

Performance and Business Outlook

Your companys Engineering Division continues to create Intellectual Property by developing various hardware and software solutions to address the domestic opportunities. Some of the products are going into production phase as well as new products are being piloted at several existing and potential new customers.

While we continue to serve our existing automotive OEMs and Tier-1s with embedded software and testing services, we also place heavy emphasis on emerging technologies and opportunities. Our continued relationship with Danlaw Inc. enables us to stay in the forefront of the "connected vehicle" space

Your company continues to expand its customer base and invest in the advanced technologies.

These along with our continued commitment to customer satisfaction enables us to grow our revenues.

Internal Control System and its Adequacy

Your Company has a policy of maintaining effective internal control system and focuses on strict implementation of these policies and procedures to safeguard the assets and interests of the Company.

Your Company has an Audit Committee comprising of two-thirds of Independent Directors of the Company. The findings of internal audit are periodically placed before the Audit Committee and the

Board of Directors of the Company. The Audit Committee also reviews periodically the performance of statutory and internal auditors, and adequacy of the internal control systems.

To ensure that the financial transactions comply with current legislative requirements and accounting standards, your Company has developed a Financial Accounting Procedure Manual (FAM). The FAM contains procedures, which cover the effective and efficient financial administration of the Company.

Financial Performance

During the year under review the Paid Up Share Capital of the Company as on date is Rs. 3,70,74,900/ comprising of 37,07,490 Equity Share of Rs. 10/each.

The net Revenue for current year are Rs.5608.13 Lakhs as compared to Rs.5555.85 Lakhs in the last fiscal year. The net loss after tax is Rs.520.41 Lakhs as compared to Loss of Rs.91.12 Lakhs in the previous FY. Due to slow down in the Automotive industry (the main source of your companys revenue) during the year, your companys continued investments in R&D, the company has incurred loss.

Material Development in Human Resources

We are employee centric and believe that our employees are the heart of the organization. The managements responsibility is to care and support our employees. We continue to provide them with opportunities for career enhancement and growth. We continually strive to provide our employees with competitive compensation and benefit packages.

We are committed to provide the necessary training opportunities to enable them to adapt to the latest technological advancements. Additionally, we are taking steps to ensure the resources we have are utilized optimally.

As on date the Company has a total strength of 238 Employees.

Cautionary Statement

Statements in the Management Discussion and Analysis describing the Companies objectives, projections, estimated and expectations may be forward-looking statement. Actual results may vary materially from those expressed or implied.


(pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015)


The Members

Danlaw Technologies India Limited

Plot No.43, Sagar Society, Road No.2,

Banjara Hills, Hyderabad - 500034

We have examined the relevant registers, records, forms, returns and disclosures received from the Directors of Danlaw Technologies India Limited having CIN L72200TG1992PLC015099 and having registered office at Plot No.43, Sagar Society, Road No.2, Banjara Hills, Hyderabad - 500034 (hereinafter referred to as ‘the Company), produced before us by the Company for the purpose of issuing this Certificate, in accordance with Regulation 34(3) read with Schedule V Para-C Sub clause 10(i) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Our opinion and to the best of our information and according to the verifications (including Directors Identification Number (DIN) status at the portal www.mca.gov.in) as considered necessary and explanations furnished to us by the Company & its officers, We hereby certify that none of the Directors on the Board of the Company as stated below for the Financial Year ending on 31st March, 2020 have been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such other Statutory Authority.

S.No Name of Director DIN Date of Appointment in the Company
1 Raju Satyanarayana Dandu 00073484 19/11/1999
2 Sundaramma Patibandla 02366355 25/03/2015
3 Nagasatyanarayana Sappata 02423978 31/10/2008 (Designated as Independent Director on 30/09/2014)
4 Kotti Nanda Praveen Kumar 03147134 19/07/2010 (Designated as Independent Director on 30/09/2014)
5 Ravi Kumar Thamma 05306747 25/06/2012 (Designated as Independent Director on 30/09/2014)
6 Sirish Batchu 08335245 11/02/2019

Ensuring the eligibility of for the appointment / continuity of every Director on the Board is the responsibility of the management of the Company. Our responsibility is to express an opinion on these based on our verification. This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.


As required by Schedule V (D) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, this is to confirm that the Company has adopted a Code of Conduct for all Board Members and Senior Management of the Company. The Code is available on the Companys website. I confirm that the Company has in respect of the financial year ended March 31, 2020, received from the senior management team of the Company and the Members of the Board, a declaration of compliance with the Code of Conduct as applicable to them.


We, Sirish Batchu, Managing Director and A V R K Varma, Chief Financial Officer of Danlaw Technologies India Limited, to the best of our knowledge and belief certify that:

1. We have reviewed the Balance Sheet, Profit and Loss Account, its schedules & notes to the accounts and cash flow statement for the year ended 31st March 2020 and that to the best of our knowledge and belief:

a) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

b) these statements together present a true and fair view of the Companys and are in compliance with existing accounting standards, applicable laws and regulations.

2. We also certify, that based on our knowledge and the information provided to us, there are no transactions entered into by the Company during the year which are fraudulent, illegal or violate the Companys code of conduct.

3. We accept the responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps taken or propose to take to rectify these deficiencies.

4. We have indicated to the Auditors and the Audit Committee:

a) significant changes in internal control during the year;

b) significant changes in accounting policies during the year and the same have been disclosed in notes to the financial statements; and

c) Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the companys internal control system.