Disa India Ltd Directors Report.

The Board of Directors has pleasure in presenting the 36th Annual Report and Audited Financial Statements for the financial year ended 31st March 2021 together with the Independent Auditors’ Report.

FINANCIAL RESULTS

Your Company has achieved net Revenue from Operations of Rs. 1,775.1 Million for the year 2020-21 which declined by 20.6% over previous year 2019-20 due to lock down as mandated by the Government and disruption of business activities due to COVID-19 from early part of year. Consequently, Profit after tax for the year, decreased by 17.5% to Rs. 235.6 Million from the previous year due to lower volume. The Pandemic’s uncertainties prevailed throughout the year.

Summarized financial results for the year are given below.

(In Millions)

Description 2020-21 2019-20
Revenue from Operations (net) 1,775.1 2,236.0
Profit before depreciation, tax & finance cost 356.9 424.3
Less: Depreciation 37.4 34.8
Less: Finance Cost 3.9 4.3
Less: Tax Expenses (including deferred tax) 80.0 99.6
Profit after Tax 235.6 285.6
Add: Other Comprehensive income 3.2 (1.2)
Total Comprehensive income for the year, net of tax 238.8 284.4
Add: Balance in Profit & Loss account brought forward from previous year 1,620.0 1,339.2
Profit Available for Appropriation 1,858.8 1,623.6
Appropriations:
Final Dividend (proposed) including tax thereon 14.5 3.6
Balance in Profit & Loss Account 1,844.3 1,620.0
Earnings Per Share (Rs) 162.0 196.4
Market price per share as at March 31 (Rs) 4,682.9 3,380.0

PERFORMANCE OF THE COMPANY

The overall performance of your Company for the financial year 2020-21 was largely impacted by the uncertainty created due to Corona virus (Covid-19) pandemic and its subsequent impact on the economy and business. However, due to the Company’s various initiatives to control discretionary expenses, protecting its assets and conservation of cash led to a reasonable outcome for the year. Customer services were provided through virtual mode to have minimal impact of the customer’s service.

The automotive industry saw a sharp recovery after September of 2020, with all segments of business showing good signs. Owing to this movement, the Company also witnessed sharp rise in the order intake in both Q3 and Q4 of the financial year. It is not only automotive but also agriculture segment which showed huge recovery and was a direct impact on our business with orders from pumps and motor manufacturers. Since 2019-20 was an exceptional year for your Company, the Company proactively took actions and reviewed its capacity and cost, to realign to the lower demand in 2020-21 and has undertaken measures to bring down cost of input materials, employee cost and other discretionary expenses. In these unprecedented times the Company has been able to register a decent performance. In this environment, the Company has kept its market share intact in segments of its business.

The Company continued to take prompt and significant steps to ensure the safety of employees during the pandemic. The management team addressed employees on a continuous basis to keep the morale high and provide guidance around initiatives and actions for keeping them safe, by implementing ‘work from home’ option and continuous guidance on travels etc. Standard Operating Practices (SOP) on sanitization and COVID-19 preventive measures were implemented in the offices and factories and strictly monitored. Business Continuity Plan (BCP) was reviewed regularly to ensure the control on both business and employees’ health & safety.

CHANGE IN THE NATURE OF BUSINESS

There has been no change in the nature of business of the Company during the financial year.

DIVIDEND

Considering the dividend history of the Company, liquidity position that is required to be maintained to meet the future capital investment, to ensure appropriate cover for market risk and to maintain a consistent level of dividend pay-out your Board of Directors recommends Final Dividend of Rs. 10/- (i.e., 100%) per Equity Share of Rs.10/- each, for the year amounting to Rs. 14.54 Million. As provided in the Finance Act 2020, from the Financial Year 2020-21 and onwards dividend is being taxed in the hands of recipients. Information about taxation of dividend is included in AGM Notice.

RESERVE

The Company has not proposed to transfer any amount to the general reserve.

SHARE CAPITAL

The Authorized Equity Share Capital of your Company is Rs. 50 Million. The Issued, Subscribed and Paid-up Equity Share Capital of your Company as on 31st March 2021 stood at Rs. 14.54 Million. During the year under review, the Company has not issued any shares with differential voting rights nor granted Stock Options or Sweat Equity. The Company has also not bought back any of its shares during the year under review. As on March 31, 2021, no other Directors held shares or convertible instruments of the

Company except the Managing Director who held 1 (one) equity share of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT ECONOMIC SCENARIO AND OUTLOOK

As a consequence of a fierce second wave of the global pandemic Covid-19, which started in the end of February 2021, major industrial states of Maharashtra, Karnataka, Tamil Nadu, Gujarat, Delhi, Chattisgarh, Madhya Pradesh, Uttar Pradesh etc. have been impacted severely. These states constitute to more than 50% of the country GDP. The infections have increased more than 4 times on an everyday basis. The medical infrastructure has been severely challenged, death rates are alarmingly high, and they are going unabated. As we write this note, the pandemic has assumed alarming proportions with severe pressure on health infrastructure. More and more states have announced partial or full lockdown severely impacting the business activities. Inflation both retail & wholesale continue to accelerate with CPI index up 5.2% in March 2021 (from 5% in previous month) and WPI surging to 7.4% (up from 4.2%) being highest in 8 years. Commodity prices have been at the peak and show no signs of reduction. Due to shortages on medical oxygen, steel plants have reviewed their capacity to produce steel and have diverted the use of oxygen to protect human lives.

Customers’ operations in western part of India, which is a significant business region of the Company, have been frequently interrupted, supplies from vendors have also been disrupted. Employee travels have been stopped temporarily until further notice. Some of the employees and their families have been infected. The Company has been vigilant in employee health & safety, sanitization and extending medical support to infected employees.

The GDP estimates for the year 2020-21 is 7.3% (negative) which reflects a 183% fall from the previous year. Underutilization of existing capacities and liquidity continue to be a big issue, and it will impact the pace of growth of capital goods industry. The year begins with unpredictability for all the businesses and your Company is no exception to it. However, the Company has the inherent ability to act and respond to the ever-changing external developments from time to time.

INDUSTRY OUTLOOK AND OPPORTUNITIES

IIP & PMI have historically been good indicators for business sentiments in capital goods order intake.

The budget has estimated the GDP for the year at 11% growth for the FY. Although we are seeing a short-term hindrance in Q1 and Q2 of the FY, but we are likely to cover them over the full FY. Automotive industry is projected to do much better than last FY. The Government spending on Infrastructure continues to be robust. IIP and PMI is expected to follow the broad growth guidelines and so is inflation. In this external environment we are likely to see a growth in our business in FY 2021-22. The extent of growth however shall be largely dependent on the way the India as a country manage the new pandemic environment which has thrown the health infrastructure in complete disarray. At the same time, it will also be dependent on speed at which we shall be in a position to vaccinate the population, for which there is an effort on war footing basis.

MARKET DEVELOPMENT

Your Company is standing tall in this hugely uncertain environment and is leading the way in true sense for the industry. This is helping your Company to consolidate its position further in the Indian market.

The Company’s full foundry solution is more robust than ever under the strong umbrella of Norican. Norican digital offer to the market has been evaluated by the key Indian foundries and the Company is likely to start a few initiatives in this area in the new FY. Aftermarket distribution business has been quick in appointing distributors across the country. The Company now has representations in Punjab, Haryana, Maharashtra, Jamshedpur, Coimbatore to cover large foundry markets to service parts closer to the customers. The Company has also waged a war against the pirate parts sellers, by conducting performance trials and proving reduction on overall cost of operations for the end users.

KEY RATIOS

As required by SEBI (LODR)(Amendment) Regulations, 2018, the Company is required to furnish the details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations for the changes.

The Company has identified the following ratios as Key financial ratios:

Standalone Consolidated
Particulars 2020-21 2019-20 Change % 2020-21 2019-20 Change %
Operation Profit Margin (EBITA) % 12.6% 14.0% (10.0) 12.5% 14.0% (10.7)
Net Profit Margin % 13.2% 12.8% 3.1 13.0% 12.7% 2.3
Debtor Turnover Ratio % 11.0% 8.2% 34.1 11.6% 8.4% 38.1
Inventory Turnover Ratio % 15.9% 24.6% (35.3) 15.9% 24.1% (34.0)
Earnings Per Share (Rs) 162.0 196.4 (17.5) 166.0 203.4 (18.4)

During the year, there was 35.3% favorable changes in the Inventory turnover ratio. This favorable impact was due to strict control put in inventory buying and stocking in the wake of COVID-19. Debtors turnover ratio was unfavorably impacted due to delayed commissioning of customer project due to COVID-19 and delayed realization of money.

The details of return on net worth at standalone and consolidated levels are given below:

Standalone Consolidated
Particulars 2020-21 2019-20 Change % 2020-21 2019-20 Change %
Return on Net Worth % 12.5% 17.4% (28.2) 12.5% 17.8% (29.8)

Return on net worth is computed by dividing the net profit by year end net worth. Decrease in Net profit during the year has reduced the return on Net worth.

CORPORATE SOCIAL RESPONSIBILITY

Your Company is committed to comply with Corporate Social Responsibility as a good corporate citizen. The Directors are pleased to report that the Company is diligently pursuing its efforts to support the community circles in which it operates. The Company’s CSR program titled "NORICAN Scholarship" has helped in providing financial assistance to less privileged students up to standard twelve as well to students seeking diplomas in Engineering.

"NORICAN Scholarship" program has made scholarship available to students in eight educational institutions in the neighborhood of our plants situated at Tumkur and Hosakote in Bengaluru. During the financial year, scholarships were provided to 410 needy students. In addition, your Company also invested in infrastructure development for the schools to provide drinking water, teaching aids and school sanitation. Your Company has also extended scholarships to 51 meritorious Engineering students through an NGO ‘Foundation for Excellence India Trust’.

The Company has also partnered with the National Institute of Foundry and Forge Technology (NIFFT), Ranchi and put in place a scholarship in the name of "Jan Johansen DISAMATIC Scholarship" to provide scholarship to 5 top meritorious students every year to create Industry Academia interface to create future foundry men. During the year, the Company has spent Rs. 0.4 Million towards this scholarship.

In line with the Ministry of Corporate Affairs Circular No. 10/2020 dated March 23, 2020, your Company has spent Rs. 0.3 Million on Covid-19 related expenses during the year.

The Company’s policy on Corporate Social Responsibility and CSR projects pursued by the Company are available on the website of the Company at https://www.disagroup.com/en-in/investor-relations/disa-india-ltd/policies.

The Composition of CSR Committee, details of the amounts spent during the current financial year and the manner in which it was spent are provided in Annexure "A".

RISK MANAGEMENT

Your Company has formulated a Risk Management Policy and a mechanism to apprise the Board about risk assessment and mitigation procedure. It also undertakes periodical review to ensure that Executive Management controls risks by means of properly designed risk management framework.

All the insurable assets of the Company are deemed to have been adequately insured.

As an established practice, at each Meeting of the Board, the Directors are updated on risk identification and steps taken to mitigate the same. Risk Management Policy is hosted on the Company’s website at https://www.disagroup.com/en-in/ investor-relations/disa-india-ltd/policies.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company has formulated a Whistle Blower Policy for vigil mechanism which is available on website of the Company at https:/ /www.disagroup.com/en-in/investor-relations/disa-india-ltd/ policies/. To the extent that complaints are raised, they are dealt with as per this policy. No complaint was reported during the year.

DIRECTORS AND KMP

Mr. Sanjay Arte, who was the Chairman of your Company from July 12, 2019, expired on November 10, 2020. Mr. Sanjay Arte was a highly accomplished professional and an exceptional human being with humility and kindness. Your Board places on record its appreciation for the guidance extended and value added by Mr. Sanjay Arte during his tenure as Director and Chairman of the Company.

Ms. Deepa Hingorani, Independent Director was appointed as Chairperson of the Company with effect from January 28, 2021. Mr. Bhagya Chandra Rao was appointed as an Independent Director of the Company from January 28, 2021.

Mr. Andrew James Matsuyama, Director resigned with effect from October 8, 2020 consequent upon his resignation as CFO and as a Director of Norican Group and Mr. Neil Moseley was appointed as an Additional Director from that date. Mr. Neil Moseley has resigned from the Office of Director with effect from February 11, 2021 and Mr. Michael Declan Guerin, CFO of Norican Group was appointed as an Additional Director from that date. Mr. Michael Declan Guerin’s term as Additional Director expires in this AGM and it is proposed to appoint him as a Director.

In terms of the provisions of the Companies Act, 2013, and the Articles of Association of the Company, Ms. Ulla Hartvig Plathe Tonnesen, Director, retires at the forthcoming Annual General Meeting and being eligible offers herself for re-appointment. The first tenure of three-years of Mr. Lokesh Saxena, Managing Director of the Company expired on June 20, 2020. Nomination & Remuneration Committee and the Board of Directors in their respective meetings held on June 3, 2020 have approved the reappointment of Mr. Lokesh Saxena as Manging Director of the Company for another term of three years from June 21, 2020 to June 20, 2023. Shareholders in the last AGM held on August 12, 2020 approved the re-appointment of Mr. Lokesh Saxena for the second term.

Your Board is happy to note and report that both Independent Directors i.e., Ms. Deepa Hingorani and Mr. Bhagya Chandra Rao have maintained highest standards of integrity in their dealings with the Company. They also possess the requisite expertise and experience (including Proficiency) necessary for acting as Independent Directors of the Company. Mr. Sanjay Arte also had maintained highest standards of integrity in his dealings with the Company.

As required by the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019 and the Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019, Ms. Deepa Hingorani and Mr. Bhagya Chandra Rao have registered their names in the data bank of Independent Directors maintained by Indian Institute of Corporate Affairs. Since Ms. Deepa Hingorani has been serving as Director for not less than 10 years as on the date of registration, she is exempt from passing the online proficiency self-assessment test as specified in the amended Rules. Mr. Bhagya Chandra Rao has cleared the online proficiency self-assessment test and furnished the proof of same. Annual Declarations received from both of them for the year 2020-21 contain affirmations regarding registrations in the data bank. The Company has three Key Managerial Persons (KMP), Mr. Lokesh Saxena, Managing Director, Mr. Amar Nath Mohanty, Chief Financial Officer and Mr. G. Prasanna Bairy, Company Secretary & Compliance Officer.

The Remuneration Policy of the Company for appointment and remuneration of the Directors, Key Managerial Personnel and

Senior Executives of the Company and other related information have been provided in the Corporate Governance Report which forms part of this report.

Policy on appointment and remuneration of Directors and KMPs is available on the website of the Company at https:// www.disagroup.com/en-in/investor-relations/disa-india-ltd/policies/.

INDEPENDENT DIRECTORS

Declarations under Section 149(7) of the Companies Act, 2013 have been received from all the Independent Directors of the Company confirming that they meet the criteria of independence as provided in Sub-Section 6 of Section 149 of the said Act and as per the SEBI (LODR) Regulations, 2015 (the Listing Regulations). On October 22, 2019, MCA had released the Companies (Accounts) Amendment Rules, 2019, the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019 and the Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019. These rules have come into force on December 1, 2019 and your Company has complied with these requirements.

SEBI (LODR)(Amendment) Regulations, 2018 has changed the evaluation criteria of Independent Directors from April 1, 2019. As per the amendment, evaluation of Independent Directors by the entire Board shall include:

(a) Performance of Directors and

(b) Fulfilment of independence criteria as specified in the Listing Regulations, and their independence from the management. Mr. Bhagya Chandra Rao was appointed as an Independent Director of the Company with effect from January 28, 2021. Board has evaluated the Independent Directors and confirms that Ms. Deepa Hingorani and Mr. Bhagya Chandra Rao fulfilled the independence criteria as specified in the Listing Regulations and their independence from the management. As Mr. Sanjay Arte has expired on November 10, 2020, his evaluation was not done. Details on terms of appointment of Independent Directors and the familiarization program have been displayed on website of the Company at https://www.disagroup.com/en-in/investor-relations/disa-india-ltd/policies/.

MEETINGS OF THE BOARD OF DIRECTORS

During the financial year, six (6) Meetings of the Board of Directors were held, as per the Companies Act, 2013 and the Listing Regulations. The details of the Meetings are furnished in the Corporate Governance Report.

The Meetings of the Board are held at regular intervals with a time gap of not more than 120 days between two consecutive Meetings. The Ministry of Corporate Affairs, Government of India vide its circular dated March 24, 2020 has increased the maximum time gap between two meetings to 180 days until September 30, 2020 in view of the Covid-19 pandemic. The gap between meeting of the Board of Directors of the Company held on February 05, 2020 and June 3, 2020 was within the extended time gap of 180 days. The Agenda of the Meetings were circulated to Directors in advance. Minutes of the Meetings of the Board of Directors were circulated amongst the Directors for their perusal.

BOARD EVALUATION

Pursuant to the requirements of the Companies Act, 2013 and the Listing Regulations, the Board of Directors has carried out an annual evaluation of its own performance, its Committees and of individual Directors. As Mr. Sanjay Arte expired on November 10, 2020, his evaluation was not done.

Further, the Independent Directors, at their exclusive Meeting held on February 11, 2021, reviewed the performance of the Board, its Chairman and Non-Executive Directors and other items as stipulated under the Listing Regulations. The Independent Directors have also declared their independence. The Nomination and Remuneration Committee has reviewed the existing criteria for evaluation of performance of the Independent Directors and the Board and reviewed the existing policy of remuneration of Directors.

DIRECTORS’ RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement: -

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the Directors have 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 and loss of the Company for that year;

c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors had prepared the annual accounts on a going concern basis;

e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) 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.

INTERNAL FINANCIAL CONTROL

Your Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. Internal Controls in the Company have been designed to further the interest of all its stakeholders by providing an environment which is facilitative to conduct its operations and to take care of, inter alia, financial and operational risks with emphasis on integrity and ethics as a part of work culture.

The scope and authority of the Internal Audit (IA) is defined every year by the Audit Committee. To maintain its objectivity and independence, the Internal Auditors report to Chairman of the Audit Committee and the Board. The Internal Auditors monitor and evaluate the efficacy and adequacy of internal control system in the Company and its compliance with accounting procedures, financial reporting and policies at all locations of the Company. Based on the report of internal audit, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Any significant audit observations and corrective actions thereon are presented to the Audit Committee and the Board. No major internal control weakness was identified during the year. The Company also has a well-functioning Whistle Blower Policy in place.

The Board has appointed Protiviti India Member Private Limited as Internal Auditors of your Company for the year 2021-22.

DEPOSITS

Your Company has neither accepted nor renewed any Deposits from the public within the meaning of the Companies Act, 2013, and hence, no amount of principal or interest was outstanding on the date of the Balance Sheet and also on the date of this Report.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

Your Company has one Wholly Owned Subsidiary "Bhadra Castalloy Private Limited" (Formerly, Bhadra Castalloys Private Limited). The performance of Subsidiary during the financial year 2020-21, being the fifth year of operations, has been quite satisfactory. The audited financial results of the Wholly Owned Subsidiary for the financial year ended March 31, 2021 are consolidated with the financial results of the Company for the financial year. Revenue from operations and Profit after tax of the Subsidiary Company were Rs. 84.8 Million and Rs. 5.9 Million respectively. Revenue from operations for the year was 24% lower and Profit after tax was 42% lower as compared to previous year impacted by the Covid-19 crisis.

Consolidated Revenue from Operations of the Company for the year was Rs. 1,850.6 Million for the year as against Rs. 2,333.0 Million in the previous year, with a decline of 21%.

Statement relating to Subsidiary Company in Form AOC-1 is part of this report.

Your Company did not have any Joint Venture or Associate Company as at the end of the financial year.

RELATED PARTY TRANSACTIONS

All related party transactions which were entered during the financial year were in the ordinary course of business, on an arm’s length basis and were as per prior omnibus approvals of the Audit Committee. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All the related party transactions were placed before the Audit Committee as well as the Board for approval. Prior omnibus approval of the Audit Committee was obtained on a yearly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their noting/approval on quarterly basis. The details of all related party transactions are disclosed in the SI. No. 40 of the Notes forming part of the Financial Statements. None of the Directors has any pecuniary relationships or transactions vis--vis the Company.

Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties in Form AOC-2 is part of this report.

The Policy on related party transactions as approved by the Board is uploaded on the Company’s website and the details of all the related party transactions are disclosed in the financials. None of the Directors has any pecuniary relationships or transactions vis--vis the Company. The ‘Related Party Transaction Policy’ is available on website of the Company at https://www.disagroup.com/en-in/ investor-relations/disa-india-ltd/policies.

GROUP COMPANIES

Persons constituting Group coming within the definition of "Group" as defined in the Competition Act, 2002 includes the following:

Sl. No. Name of Subsidiary Country
1 WGH Holding Corp British Virgin Islands
2 Wheelabrator Group (Canada) ULC Canada
3 DISA (Changzhou) Machinery Ltd. China
4 DISA Trading (Shanghai) Co. Ltd. China
5 Italpresse Industrie (Shanghai) Co. Ltd. China
6 StrikoWestofen Thermal Equipment (Taicang) Ltd. China
7 Wheelabrator Czech S.r.o. Czech Republic
8 DISA Holding A/S Denmark
9 DISA Holding II A/S Denmark
10 DISA Industries A/S Denmark
11 Norican A/S Denmark
12 Norican Global A/S Denmark
13 Norican Group ApS Denmark
14 Norican Holdings ApS Denmark
15 Wheelabrator Group SAS France
16 Matrasur Composites SAS France
17 DISA Industrieanlagen GmbH Germany
18 Light Metal Casting Equipment GmbH Germany
19 Light Metal Casting Solutions Group GmbH Germany
20 LMCS Group Holding GmbH Germany
21 Norican Digital GmbH Germany
22 OFT Oberflachentechnik Maschinen und Werkzeuge Handels Gmbh Germany
23 StrikoWestofen GmbH Germany
24 SWO Holding GmbH Germany
25 Wheelabrator Berger Stiftung GmbH Germany
26 Wheelabrator Group GmbH Germany
27 Wheelabrator Group Holding GmbH Germany
28 Wheelabrator OFT Gmbh Germany
29 DISA Limited Hong Kong Hongkong
30 Bhadra Castalloy Private Limited India
31 DISA India Ltd. India
32 DISA Technologies Private Ltd. India
33 Gauss Automazione S.p.A. Italy
34 Italpresse France S.a.r.l. Italy
35 Italpresse Industrie S.p.A. Italy
36 Walter Trowal Sa.r.l. Italy
37 DISA K.K. Japan
38 IP Mexico Die Casting S.A. de C.V. Mexico
39 StrikoWestofen de Mexico, S.A. de C.V. Mexico
40 WG Plus de Mexico S de RL de CV Mexico
41 WG Plus Servicios S de R. I de CV Mexico
42 SWO Polska Sp. Z.o.o. Poland
43 Wheelabrator Schlick Sp. Z.o.o. Poland
44 Wheelabrator Group SLU Spain
45 DISA Holding AG Switzerland
46 DISA Industrie AG Switzerland
47 Striko UK Ltd. United Kingdom
48 WGH UK Holdings Limited United Kingdom
49 WGH UK Ltd. United Kingdom
50 Wheelabrator Group Ltd. United Kingdom
51 Wheelabrator Technologies (UK) Ltd. United Kingdom
52 Impact Finishers Ltd. United Kingdom
53 Castalloy Europe Limited United Kingdom
54 Blast Cleaning Techniques Limited United Kingdom
55 Spencer & Halstead United Kingdom
56 Vacu-Blast International United Kingdom
57 Abrasive Developments Ltd. United Kingdom
58 Castalloy, Inc. United States
59 DISA Holding LLC United States
60 DISA Industries, Inc. United States
61 StrikoWestofen Dynarad Furnace Corp. United States
62 WG Global LLC United States
63 Wheelabrator (Delaware) LLC United States
64 Wheelabrator Group, Inc. United States
65 Bob Schmidt, Inc. United States
66 Schmidt Manufacturing, Inc. United States

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY, BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT

There were no material changes and commitments between the end of the financial year and the date of the report, which affects the financial position of the Company.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN, OR SECURITY PROVIDED BY THE COMPANY

Your Company has made an investment of Rs. 44 Million in the year 2015-16 in the Equity Share Capital of its Wholly Owned Subsidiary Company, Bhadra Castalloy Private Limited. It has extended interest-bearing intercompany demand loan of Rs. 26 Million in the year 2016-17 for purpose of financing the purchase considerations paid for acquisition of the foundry by the Subsidiary. The Company had also given a Corporate Guarantee of Rs. 35 Million to Kotak Mahindra Bank on behalf of its subsidiary for providing banking facilities. The above Investment in equity, loan extended and guarantees given are well within limits prescribed under the provisions of Section 186 of the Companies Act, 2013.

STATUTORY AUDITORS

Pursuant to provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, the Company at its 33rd AGM held on August 9, 2018 had appointed Messrs. Deloitte Haskins & Sells, Chartered Accountants, as Statutory Auditors of the Company for a second and final term of 5 years from the financial year 2018-19 to 2022-23.

During the year, the statutory auditors have confirmed that they satisfy the independence criteria as per Companies Act, 2013 and Code of ethics issued by the Institute of Chartered Accountants of India.

COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost records maintained by the Company in respect of its activity are required to be audited. Your Directors have, in their Meeting held on June 3, 2020, based on the recommendation of the Audit Committee, appointed Messrs. Rao, Murthy & Associates, Bengaluru as Cost Auditors of the Company for the financial year ended 31st March 2021.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Vijayakrishna KT, Bengaluru, a Company Secretary in Whole Time Practice to undertake the Secretarial Audit of the Company for the financial year ended 31st March 2021. The Report of the Secretarial Auditor is annexed in Annexure-B.

EXPLANATION BY BOARD ON ADVERSE COMMENTS BY AUDITORS

There were no adverse comments by the Auditors of the Company and hence, no explanations are provided.

CORPORATE GOVERNANCE

As required under the Listing Regulations, certificates from Mr. Vijayakrishna KT, Practising Company Secretary, regarding compliance with conditions of Corporate Governance as well as a confirmation [as required by Schedule V Part C (10)(i)] that none of the directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of companies by the SEBI/Ministry of Corporate Affairs or any such statutory authority are annexed as Annexure C.

Report on Corporate Governance is annexed as Annexure D. As required by SEBI (LODR)(Amendment) Regulations, 2018, ‘Annual Secretarial Compliance Report’ issued by Mr. Vijayakrishna KT, Practising Company Secretary for the financial year ended 31st March 2021 will be filed with BSE within the due date. Further, in compliance with the Listing Regulations, your Board has adhered to the Corporate Governance Code. All the requisite Committees are functioning in line with the guidelines. As reported earlier, a reputed firm of independent Chartered Accountants has been carrying out the responsibilities of Internal Audit of the Company and periodically reporting their findings on systems, procedures and management practices.

BUSINESS RESPONSIBILITY REPORT

From last year onwards, your Company is required to include Business Responsibility Report in the Annual Report describing the initiatives taken by the Company from environmental, social and governance perspective. Business Responsibility Report is annexed as Annexure D.

INDUSTRIAL RELATIONS

Industrial relations have been cordial and constructive, which have helped your Company to achieve production targets. The Company’s three-year long-term agreement with the workmen was renewed on July 4, 2019 and is effective from October 01, 2018 to September 30, 2021.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO CONSERVATION OF ENERGY

Your Company’s constant endeavor is to reduce the consumption of energy in all forms and at all levels, in the manufacturing facilities and in offices. Traditional lighting systems have been replaced with energy efficient lightings in all locations which has reduced the energy consumption.

Your Company gives highest priority to conservation of energy through better supervision and training of employees to reduce the usage of electricity.

TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT

Your Company has been continuously seeking and adapting new technology from Principals in order to develop skills locally and meet specific needs of Indian and global customers. Personnel at all levels are routinely sent to Principal’s factories and design offices abroad for training and updating their skills. During the financial year, your Company has not spent any amount on Research and Development.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company has earned Rs. 172.4 Million of foreign exchange and expended Rs. 289.8 Million foreign exchange during the financial year under review.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013 and the Companies (Management and Administration) Rules, 2014, a copy of the annual return is placed on the website of the Company at https://www.disagroup.com/en-in/investor-relations/financial-reports.

MATERIAL ORDER PASSED BY ANY COURT OR REGULATOR OR TRIBUNALS IMPACTING GOING CONCERN STATUS OF COMPANY

There were no orders passed by any Court or Regulator or Tribunal during the year under review which impacts the going concern status of the Company.

PARTICULRS OF EMPLOYEES

During the year, there was one employee receiving remuneration exceeding Rs. 1,02,00,000/- (Rupees One Crore Two Lakhs only) per annum and/or Rs. 8,50,000/- (Rupees Eight Lakhs Fifty Thousand only) per month. The details are as under:

Name of the employee Designation Remuneration (in Rs. Million)
Mr. Lokesh Saxena Managing Director 12.9

There were no employees posted and working in a country outside India, not being Directors or relatives, drawing more than the amount prescribed under the Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Hence, the details are not required to be circulated to the Members and also not required to be attached to this Annual Report.

The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure (Annexure E) forming part of this report. Further, the report and the accounts are being sent to the Members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for electronic inspection at the Registered Office of the Company. Any Member interested in obtaining a copy of the same may write to the Company Secretary.

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

The Company has in place a Gender-Neutral Policy on Zero Tolerance towards Sexual Harassment at Workplace in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. The following is a summary of sexual harassment complaints received and disposed off during the financial year 2020-21: No of complaints received: NIL. No of complaints disposed off: NIL.

ACKNOWLEDGEMENT

Your Directors place on record the appreciation for valuable contribution made by employees at all levels, active support and encouragement received from the Government of India, the Government of Karnataka, Company’s Bankers, Customers, Principals, Business Associates and other Acquaintances. Your Directors recognize the continued support extended by all the Shareholders and gratefully acknowledge with a firm belief that the support and trust will continue in the future also.

For and on behalf of the Board of Directors
For DISA India Limited
Deepa Hingorani
Date : May 20, 2021 Chairperson
Place: New Delhi DIN: 00206310

Affirmation regarding Compliance with Code of Conduct

The Board has laid down a code of conduct for all Directors and Senior Management of the Company. The code of conduct is available on the website of the Company at https://www.disagroup.com/en-in/investor-relations/disa-india-ltd/policies.

I hereby confirm that all the Directors and the Senior Management Personnel of the Company have affirmed compliance with the Code of Conduct as applicable to them, for the Financial Year ended March 31, 2021.

For DISA India Limited
Lokesh Saxena
Date : May 20, 2021 Managing Director
Place : Bengaluru DIN: 07823712