Dynamatic Technologies Ltd Directors Report.


Your Directors are pleased to present their 46th Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March 2021.


The Financial Results of the Company for the year ended 31st March 2021, were as follows: ( in Lakhs)



Particulars Year Ended 31 March 2021 Year Ended 31 March 2020 Year Ended 31 March 2021 Year Ended 31 March 2020
Continuing Operations: Revenue from Operations 1,11,820 1,23,007 51,374 56,963
Less: Cost of material and increase/decrease in stock 55,011 59,574 22,850 24,494
Less: Employee benefit expenses 22,147 24,288 8,008 8,379
Less: Other Expenses 19,761 20,069 8,259 9,834
EBITDA 14,901 19,076 12,257 14,256
EBITDA Margin 13.33% 15.51% 23.86% 25.03%
Add: Other Income 607 1,782 437 1,636
Less: Finance Charges 6,999 8,045 5,776 7,026
Less: Depreciation and Amortisation Expense 7,754 7,988 3,191 3,389
Less: Exceptional item - - - 27,108
Profit/(Loss) from Continuing Operations before Tax 755 4,825 3,727 (21,631)
Profit before tax margin 0.68% 3.92% 7.25% (38.00%)
Less: Tax expense 557 (2,531) 902 (2,457)
Profit/(Loss) after Tax from Continuing Operations 198 7,356 2,825 (19,174)
Profit after Tax margin 0.18% 5.98% 5.50% (33.70%)
Discontinued Operations:
Add: Loss from Discontinued Operations (2,385) (3,450) - (1,600)
Add: Other Comprehensive Income/(Losses) 2,057 921 184 (70)
Profit/(Loss) for the year (130) 4,827 3,009 (20,844)
Profit/(Loss) available for appropriation (130) 4,827 3,009 (20,844)
Balance carried to Balance Sheet (130) 4,827 3,009 (20,844)

Note: Previous year numbers were restated as appropriately to make these comparable to FY 2021 numbers.


FY2021 was a challenging year due to pandemic related slowdown in global economic activities. The Indian economy was impacted severely in the first half of the year due to lockdown globally and weak consumer sentiments. However, second half of the year was encouraging as it experienced better than expected recovery as the economy gradually opened. Consolidated net sales for FY2021 was Rs 1,11,820 lakhs, reduced by 9% as compared to Rs 1,23,007 lakhs in FY2020.

Consolidated EBITDA for FY2021 was reported as Rs 14,901 lakhs as compared to 19,076 lakhs during FY2020. EBITDA margin for the year under review was 13.3% compared to 15.51% in FY2020.


The Aerospace & Defence segment recorded a revenue of Rs 37,395 lakhs compared to Rs 49,760 lakhs in FY2020. The performance of the segment was impacted primarily due to travel related restrictions during pandemic. Various travel bans between countries and decline in passenger traffic due to Covid-19 continued to impact the performance of the civil aviation sector. However, Dynamatic Technologies Limiteds (DTL) defense vertical continued to grow driven by order book execution and delivery, in particular, orders from Boeing T7A and Bharat Electronics Limited, which helped to minimize the underperformance of the sector. Segment EBITDA for the year was Rs 11,131 lakhs, reported alongside 15,252 lakhs in FY2020.

The performance of the Hydraulics segment was severely impacted in the first half of the year due to global slowdown and pandemic related lockdowns. However, in second half of the year the tractor industry in India witnessed good bounce back largely due to low base in the year before, subdued Q1 and pro- farm sector initiatives announced by the Government of India. A fairly large percentage of business for Dynamatic Hydraulics comes from the Agri Tractor segment and this revival of demand augured well for the business. Though, the industry did have continued challenges in supply chain ecosystem, last two quarters witnessed fairly good growth to end the year with numbers similar to FY2020. Likewise, Dynamatic Hydraulics UK operations too witnessed very flat Q1 and Q2 driven again by the impact of pandemic on supply chain, logistics and overall demand. H2 witnessed higher pull from the market with most economies opening up post Wave -1. Payroll support from the local government for furloughed employees improved our margins to some extent in addition to good product mix and cost optimisation measures.

Revenues for this segment increased marginally to Rs 29,763 lakhs compared to Rs 29,500 lakhs in the same period last year. EBITDA for FY2021 was Rs 3,109 lakhs and Rs 2,286 lakhs during last year.

The Auto industry showed resilience during the second half of the year which supported the moderate top line growth of the segment. Profitability was impacted due to ongoing pandemic. Revenue for this segment was Rs 44,187 lakhs compared to same period last year Rs 43,499 lakhs. Segment EBITDA was Rs 1,820 lakhs compared to Rs 2,970 lakhs in FY2020.


Over the years, Dynamatic Technologies has created its own brand image and has found its niche presence in the industry. Dynamatic Technologies supplies products to the worlds renowned Original Equipment Manufacturers (OEMs) such as Airbus, Boeing, Bell Helicopters, Textron, Hyundai, Daimler, BMW, Honeywell, John Deere and Mahindra & Mahindra.

The Company is focused on expanding the size of business with existing customers and expanding its customer base with addition of new customers. However, all our business segments were adversely impacted at different degrees by the global slowdown and the Covid-19 pandemic. To reduce the financial impact of the pandemic, the Company has undertaken various cost control measures including alternative raw material sourcing and renegotiation of vendor contracts. Going forward, we are closely monitoring segments where we operate globally and are taking appropriate steps to minimize the impact of pandemic on our business. With a strong business foundation, technological excellence and industry recognition for products, we are confident of creating utmost value for all of our stakeholders.


The outbreak of the COVID-19 virus and the ensuing lockdown imposed across the country led to the standstill of

the economy for a major part of FY2021. Towards the later part of the fiscal year, consequent to the gradual opening of economic activity across the nation, the demand had picked up. This was driven mainly by the consumer durables sector and revival of infrastructure activities.

India is currently experiencing a second wave of Covid-19 infections that has halted economic activity. Although there is near term uncertainty, consumer confidence remains positive for the medium to long term. The situation is gradually improving and active cases are declining. With the role out of vaccination, the economy is expected to continue its growth trajectory.

As a major supplier to global OEMs, Dynamatic Technologies has undertaken various measures to contain the impact of the virus on its employees and ensure their safety and well-being. Dynamatic Technologies had tremendous responsibility to keep the industrial output in pace with the demand. Our proactive measures on Covid control like PPEs, social distancing, thermal screening, sanitisation, awareness drives and also setting up of our own BIOSECURITY lab with most advanced equipment and senior microbiologist to conduct and analyse RT-PCR test on every single employee helped create a safe bubble at work place. Dynamatic Technologies SOPs have been referred to by number of industries and government bodies as a template for taking care of lives and livelihoods.

The Company has launched vaccination drives to provide vaccination to all employees and their families in line with Government guidelines and regulations. We have also undertaken the responsibility of conducting regular Covid-19 tests to ensure that employees are staying safe and to restrict the spread of the virus.


The Board of Directors of your Company, after considering holistically the relevant circumstances and keeping in view the current economic conditions has decided that it would be prudent, not to recommend any dividend for the year under review.


As of 31st March 2021, the Company had an authorized share capital of Rs 2,500 lakhs, divided into 2,00,00,000 equity shares of Rs 10/- each and Rs 500 lakhs divided into 5,00,000 redeemable cumulative preference shares of Rs 100/- each. During the year under review, there was no change in the Companys issued, subscribed and paid-up equity share capital. As of 31st March 2021, the Company had issued, subscribed and paid-up equity share capital of Rs 634.14 lakhs divided into 63,41,443 equity shares of Rs 10/- each.


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


During the year under review, the Company incurred capital expenditure of 1,591 lakhs for physical infrastructure, 73 lakhs for procurement of intangible assets and 5,995 lakhs towards Right of Use Asset and 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 the Company.


The Consolidated Financial Statements prepared by the Company in accordance with the relevant Indian Accounting Standards (Ind AS) issued by the Institute of Chartered Accountants of India, form part of the Annual Report.


The Company has ten subsidiaries. There are no associate or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of the business of the subsidiaries. The structure of Dynamatic Technologies Limited and its subsidiaries as on 31st March 2021, is appended hereunder:

Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient features of financial statements of the Companys subsidiaries in Form No. AOC-1 is attached to the financial statements of the Company.


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 and is a nonoperating company.

JKM Ferrotech Limited, India (JFTL) is Wholly owned Subsidiary and held through JKM Erla Automotive Limited and Eisenwerk Erla GmbH, Germany.

On 11th February 2020, the members of M/s. JKM Ferrotech Limited ("JFTL"), subject to confirmation by National Company Law Tribunal, Bengaluru Branch ("NCLT"), had approved a capital reduction resolution under section 66 of Companies Act, 2013. As of the date of this report, the Company is awaiting Order from NCLT.

During the Financial Year, JFTL received a Binding Term Sheet from Danblock Brakes India Private Limited, having its registered office at Suite No. 311, Vardhman Diamond Plaza, D.B. Gupta Road, Paharganj, New Delhi - 110 055, India, for acquiring 100% ownership and rights of its Assets.

The Board of JFTL at its meeting held on 1st February 2021, approved the aforesaid proposal and executed an Asset Purchase Agreement (APA) on 7th April 2021.

As of the date of this report, transfer of assets would be effective subject to satisfactory completion of terms & conditions of the Asset Purchase Agreement, on such date as mutually agreed between the parties.

JKM Automotive Limited (JAL) is a wholly owned subsidiary of JEAL and is a non-operating company.


JKM Global Pte. Limited, Singapore, continues to be an investment hub for overseas businesses.

Dynamatic Limited, Swindon, UK, (DLUK) is a wholly owned subsidiary and held through JKM Global Pte. Limited, Singapore.

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

Originally Yew Tree Investments Limited and Dynamatic Limited are the subsidiaries of JKM Global Pte. Limited. Post-merger, DLUK has its Hydraulics unit in Swindon and its Aerospace unit, Dynamatic-Oldland Aerospace in Bristol and Swindon.

Dynamatic Hydraulics, a division of DLUK located in Swindon, UK, produces high performance engineered hydraulic products. The plant has over 50 years of experience in gear pump design and manufactures and caters to agriculture, construction and off-highway vehicle manufacturers. Products include combined variable and fixed displacement pump packages, temperature controlled fan drive systems and fixed displacement pumps in aluminium and cast iron with a range of additional integrated valve options.

Dynamatic-Oldland Aerospace, a division of Dynamatic Limited UK, is located in Bristol and Swindon, and is a leader in Aeronautical Precision Engineering and is currently working on components for most of the Airbus family of aircraft.

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

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

Eisenwerk Erla GmbH, Germany (Eisenwerk) became a subsidiary of the Company, subsequent to its holding company, JKM Erla, becoming a subsidiary of the Company. Eisenwerk has been in business for over 630 years and is a preferred supplier to leading global OEMs including Audi, BMW and Volkswagen. The manufacturing capabilities of this subsidiary include high precision, machining of complex metallurgical products for automotive engines and turbochargers.


Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient features of financial statements of the Companys subsidiaries in Form No. AOC -1 is attached to the financial statements of the Company as Annexure-1.

There are no associate or joint venture companies within the meaning of Section 2(6) of the Act. There has been no material change in the nature of the business of the subsidiaries.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries, are available on the website of the Company (https://www.dynamatics.com).


Based on the framework of Internal Financial Controls and compliance systems established and maintained by the Company, the work performed by the Internal Auditors,Statutory Auditors and Secretarial Auditors, including the Audit of Internal Financial Controls over financial reporting by the Statutory Auditors 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 Financial Year 2020-21.

Accordingly, pursuant to Sections 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that:

i. in the preparation of the annual accounts, for the Financial Year ended 31st March 2021, the applicable accounting standards have been followed and there are no material departures;

ii. they 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 of the Company for that period;

iii. they have 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. they have prepared the Annual Accounts for the Financial Year ended 31st March 2021, on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.


Your Directors confirm that the Secretarial Standards issued by the Institute of Company Secretaries of India, have been complied with.


Inductions, Re-appointments, Retirements & Resignations:

Pursuant to the provision of Section 152 of the Companies Act, 2013, Mr. Arvind Mishra (DIN: 07892275), Executive Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment. A resolution seeking shareholders approval for his reappointment forms part of the Notice

Pursuant to the provisions of Section 149 of the Act, the independent directors have submitted declarations that each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations. There has been no change in the circumstances affecting their status as independent directors of the Company.

During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company other than reimbursement of expenses incurred by them for the purpose of attending meetings of the Board / Committee of the Company.

The Independent Directors had no pecuniary relationship or transactions with the Company, other than sitting fee and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board / Committee of the Company

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

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on 31st March 2021 are:

• Mr. Udayant Malhoutra, CEO & Managing Director

• Mr. P S Ramesh, Executive Director, Group Technical Services and Human Resource

• Mr. Arvind Mishra, Executive Director, Global COO - Hydraulics, Head of Homeland Security

• Mr. Chalapathi P, Chief Financial Officer

• Mr. Shivaram V, Head - Legal, Compliance & Company Secretary.

Declaration by Independent Directors:

All the Independent Directors of the Company have provided their declarations to the Company under Section 149(7) of the Act that they meet the criteria of independence as provided under Section 149(6) of the Act and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations). In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstances or situations which exist or may be reasonably anticipated that could impair or impact their ability to discharge their duties.

In the opinion of the Board, they fulfil the conditions of independence as specified in the Act and the Listing Regulations and are independent of the management.


Seven meetings of the Board were held during the year under review. For details of meetings of the Board, please refer to the Corporate Governance Report, which is a part of this report


The Board has seven committees:

1. Audit and Risk Management Committee,

2. Nomination and Remuneration Committee,

3. Stakeholders Relationship Committee,

4. Technology & Strategy Development Committee,

5. Finance Committee,

6. Corporate Social Responsibility Committee and

7. 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 the recommendations made by the Committees of Board of Directors during the year under review, with no instances where recommendations of the Audit Committee were not accepted by the Board.


The philosophy for remuneration of directors, Key Managerial Personnel and all other employees of the Company is based on the commitment of fostering a culture of leadership with trust. Dynamatic Technologies believes in providing an opportunity that is strongly linked to and constantly reinforces the performance culture of the Company. Dynamatic Technologies has laid down remuneration policy in line with globally accepted governance practices. The remuneration policy is designed with the objective to attract, motivate, retain human capital and improve productivity by creating a congenial work environment, encouraging initiative, personal growth and teamwork while simultaneously offering appropriate remuneration packages. The remuneration policy is also market-led and takes into account the competitive circumstance of each business so as to attract and retain quality talent and leverage performance significantly. Remuneration Policy is annexed as Annexure - 2.

Members can download the complete remuneration policy on the Companys website www.dynamatics.com in Investors Desk section.


In line with the core strategy, the Company understands the importance of maintaining board diversity. Ensuring optimal mix of varied perspectives, skills, expertise, industry experience, age gender, race, ethnicity and cultural background is critical to foster innovation and helps us to 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. The Company has an optimum mix of executive and non-executive independent directors and woman director.


An appropriate induction for new directors and ongoing training for all directors ensure high corporate governance in the Company. Dynamatic Technologies conducts an induction programme for every new independent director. The induction program has been developed with the objective to provide them with comprehensive understanding about the Company, its businesses, markets and the regulatory environment in which it operates. The programme also aims to familiarize the independent directors with the management and its operations 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 to enhance their understanding as mentioned above. 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. In pursuit of this objective, the Directors are updated on a continuous basis on developments in the corporate and industry scenario, including those pertaining to the regulatory and economic

environment, to enable them to take well informed and timely decisions. The details of the familiarisation programme are uploaded on the Companys corporate website www.dynamatics.com in Investors Desk section.


In terms of the provisions of Section 178(3) of the Companies Act, 2013 and Regulation 19 of the Listing Regulations, the Nomination and Remuneration Committee (NRC) has formulated the criteria for determining qualifications, positive attributes and independence of Directors, the key features of which are as follows:

a. Qualifications - The Board nomination process encourages diversity of thought, experience, knowledge, age and gender. It also ensures that the Board has an appropriate blend of functional and industry expertise.

b. Positive Attributes - Apart from the duties of Directors as prescribed in the Companies Act, 2013, the Directors are expected to demonstrate high standards of ethical behaviour, communication skills and independent judgment. The Directors are also expected to abide by the respective Code of Conduct as applicable to them.

c. Independence - A Director will be considered independent if he / she meets the criteria laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations.


The Board of Directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act and SEBI Listing Regulations. The Evaluation was based on the criteria and framework adopted by the Board. The performance also included inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information, functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members based on criteria such as the composition of committees, effectiveness of committee meetings, etc. The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on 5th January 2017. In a separate meeting of independent directors, performance of non-independent directors, the Board as a whole and the Chairman of the Company was evaluated, considering the views of executive directors and non-executive directors. The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. At the board meeting that followed the meeting of the independent directors and meeting of Nomination and Remuneration

Committee, the performance of the Board, its Committees, and individual directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the independent director being evaluated.


The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys 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 disclosures.

The Company has ensured that adequate systems for internal control commensurate with its size and complexity are in place. These systems and controls ensures that all assets are safeguarded and protected and that the transactions are authorized, recorded and reported correctly. In addition, the Company has also ensured that adequate checks and balances are in place to determine the accuracy and reliability of accounting data. All the related processes are properly documented and appropriate steps are undertaken to ensure adherence to the internal control systems. Roles and responsibility of various stakeholders involved in the process is clearly demarcated.

The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit 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 & 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.


There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12) of the Act and the rules made thereunder.


Explanations or comments made by the Board on every qualification, reservation or adverse remark or disclaimer made:

a. by the Statutory Auditor in their report: There are no qualifications, reservations or adverse remarks reported by M/s. Deloitte Haskins & Sells., LLP, (ICAI Firm Registration No. 117366W/W-100018) statutory auditors in their report for the year under review.

b. by the Company Secretary in Practice in his Secretarial Audit Report; Mr. Ratish Tagde & Associates, Company Secretary in practice, has made no qualifications or reservations or adverse remark in the secretarial audit report.

The auditors above mentioned have used appropriate disclaimers to limit the scope of their audit to the documents provided by the management and explanations / representations made by the management


a) Transfer of Unclaimed Dividend to Investor Education and Protection Fund (IEPF):

Particulars of Dividend remaining unclaimed in terms of Section124(5) of the Act, amounts transferred to the Unpaid Dividend Account of the Company, which remain unpaid or unclaimed for a period of seven years from the date of such transfer, shall be transferred by the Company to the IEPF established by the Central Government along with the underlying shares.

The details pertaining to the transfers is forming part of the Corporate Governance Report which is annexed to this report.

b) Transfer of Shares to IEPF:

As required under Section 124(6) of the Act, Equity Shares in respect of which dividend has not been claimed by the members for seven consecutive years or more have already been transferred by the Company to the IEPF Authority. Details of shares transferred is available on the website of IEPF as well as the Company.

c) Demat Suspense Account Unclaimed Shares:

As on 31st March 2021, there are 11 members, holding 851 Equity Shares of 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.


All Related Party Transactions during the FY2021 were executed at arms length basis and in the ordinary course of business. These transactions were in compliance with the applicable provisions of the Act and the Listing Regulations.

During the year, there were no materially significant Related Party Transactions undertaken by the Company which required shareholder approval under the Listing Regulations. All Related Party Transactions are placed before the Audit Committee for approval. Additionally, prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and other terms and conditions of the transactions.

The Related Party Transactions Policy adopted by the Company, as approved by the Board, is uploaded on the Companys website. Details of transactions with related parties are provided in the accompanying financial statements. No transactions undertaken during the year were required to be reported in Form AOC-2, annexed as Annexure - 3.


Your Company is in compliance with all the applicable provisions of Corporate Governance as stipulated under Chapter IV of the Listing Regulations. A detailed report on Corporate Governance as required under the Listing Regulations is provided in a separate section and forms part of the Annual Report. A Certificate from a Practicing Company Secretary regarding compliance with the conditions stipulated in the Listing Regulations forms part of the Corporate Governance Report.

The Company has a legacy of maintaining highest standards of corporate governance practices. This is based on the philosophy that effective corporate governance practices provides a strong and stable foundation for a successful enterprise. The Company always emphasizes on ensuring integrity and transparency in all its dealings which is always critical to retain the trust of all stakeholders. The core values of the Companys Corporate Governance system comprises of independence, transparency, accountability, responsibility, compliance, ethics, values and trust. We believe that our Corporate Governance practices will enable us to efficiently and ethically execute business operations and enhance shareholders wealth sustainably for all our stakeholders.

Dynamatic Technologies is committed to maintaining the best standards of Corporate Governance and proactively adopts ethical and transparent governance practices even before they are 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 including transparency and integrity. Strong leadership and best-inclass corporate governance practices are considered one of the major strengths of the Company.

The Company is in compliance with all the applicable provisions of Corporate Governance as stipulated under Chapter IV of the Listing Regulations. A detailed report on Corporate Governance, pursuant to the requirements of the Listing Regulations, forms part of the Annual Report. M/s. Ratish Tagde & Associates, Company Secretary in Practice, had conducted the Corporate Governance audit for the year under review. A certificate from M/s. Ratish Tagde & Associates, regarding compliance of conditions of Corporate Governance as stipulated under Listing Regulations is presented in a separate section forming part of this Annual Report.


Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the Management Discussion and Analysis Report is presented in a separate section forming part of this Annual Report.


As required under Regulation 34 of the Listing Regulations, the Business Responsibility Report is provided in a separate section and forms part of the Annual Report.


Statutory Auditors:

Under Section 139 of the Companies Act, 2013 and the Rules made thereunder, it is mandatory to rotate the statutory auditors on completion of the maximum term permitted under the said section. In line with the requirements of the Act, M/s. Deloitte Haskins & Sells., LLP, (ICAI Firm Registration No. 117366W/W-100018) are the Statutory Auditors of the Company for a period of five years from the conclusion of 44th Annual General Meeting until the conclusion of 49th Annual General Meeting.

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 Auditors Report does not contain any qualification, reservation or adverse remark.

Cost Auditors:

As per Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the Company is required to have its cost records audited by a Cost Accountant in practice. The Board of Directors, based on the recommendation of the Audit Committee, has appointed M/s. Rao, Murthy & Associates, Cost Accountants, as Cost Auditor of the Company for conducting the Cost Audit for the FY2022, to conduct cost audits pertaining to relevant products prescribed under the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time. The Members are hereby requested to ratify the remuneration payable to Cost Auditors for the FY2022.

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. KPMG Assurance & Consulting Services LLP was appointed as Internal Auditors of the Company to undertake Internal Audit for the FY2021.

Secretarial Auditor:

The Company had appointed M/s. Ratish Tagde & Associates, Company Secretary in practice, to conduct its Secretarial Audit for the financial year ended 31st March 2021. 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.


At Dynamatics, Risk management is a part of the Business DNA which aids the management adopt an integrated approach to manage current and emerging threats. It plays a key role in business strategy and planning discussions at Dynamatic Technologies setting the boundaries for Group level risk taking within the framework of Dynamatic Technologies risk appetite

Dynamatic Technologies has a robust process in place to identify key risks across the Company and priorities relevant action plans to mitigate all the risks that the organization faces such as strategic, financial, liquidity, security, regulatory, legal, reputation and other risk that have been identified and assessed to ensure that there is sound Risk Management Policy in place to address such concern/risk. Our aim is to help reinforce our resilience by encouraging a holistic approach to the management of risk and return throughout our organization as well as the effective management of our risk, capital and reputation profile.

SEBI has recently vide Notification dated 5th May 2021, extended the applicability and requirement to constitute the Risk Management Committee (RMC) to top 1000 listed entities by market capitalization from the existing top 500 listed entities.

Your Company being one of the top 1000 listed entities by market capitalization will now need to constitute a dedicated committee for Risk Management. Accordingly, a Risk Management Committee, having scope to ensure appropriate risk methodology, processes and systems are in place to monitor, evaluate identified risks and oversee implementation of Risk Management Policy alongside adequacy of risk management systems has been constituted on 7th June 2021.

The RMC has been entrusted with the responsibility of assisting the Board members with risk assessment and its minimization procedures, which includes discussing the management submissions on risks, prioritizing key risks and approving action plans to mitigate such risks.

The Company has a Risk Management Policy in place which enables framing an appropriate action for the key risks identified, so as to make sure that risks are adequately compensated or mitigated in the designated response time.

The main objectives of the said policy include:

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 Companys website (www.dynamatics.com/investor.html).


Loans, guarantees and investments covered under 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report.


During the year under review, the Company has neither accepted nor renewed any deposits from the public and, as such, no amount of principal or interest was outstanding as on the Balance Sheet date within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.


Dynamatic Technologies believes that Human Resources (HR) are the backbone for the overall growth of the organization and identifying, upgrading of talent & competence of employees is a must. The HR function is to foresee the changes likely to happen in the industry and prepare the employees capabilities accordingly. Multiskilling ability to keep pace with the demands of the digital world, continuously changing diverse labour laws and social scenarios, are kept in mind while steering the human resource. The HR should remain vibrant and flexible to adopt to challenging times. Dynamatic Technologies undertakes the best possible efforts not only to maintain cordial relationships with the employees but also to create an equitable, just, and harmonious work environment conducive to their personal and professional development. Dynamatic Technologies has put in place a customised software to capture attendance of employees and assist carrying out payroll activity completely in a digital format. This software addresses all HR modules from recruitment to separation thus eliminating human intervention and subjectivity. Data pertaining to employees is kept safe and protected in digital form. All communications to employees, both blue and white collared, are made through this platform. As employees can access this system remotely, communication has been more effective.

The Companys focus has always been to acquire, nurture and develop the best talent to prepare them for leadership roles within the organization. There are various ongoing exercises being undertaken to enhance the skills of employees through constant training and learning initiatives. HR team organises sensitization programs and encourage communication to ensure an organizational culture that always provides for a fair and safe working environment for all the employees. The 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 labour unrest.

HR team has coordinated the activities to protect the health and safety of the employees during the pandemic. Guidelines were prepared listing proactive measures to be taken and routine disciplines to be followed by employees every day to prevent spread of Corona. The necessary infrastructure was put in place on the shop floor and in the canteen areas to maintain social distancing.

Every employees RT-PCR test status is monitored and periodical testing is ensured, The Company has launched vaccination drives to provide vaccination to all employees and their families in line with Government guidelines and regulations.


Your Company has a Policy on Corporate Social Responsibility which has been posted on the website of the Company at www.dynamatics.com. Pursuant to the provisions of section 135 and other applicable provisions of the Act read with applicable rules, the company has undertaken various initiatives during FY2021, as follows:

Your company focuses its CSR activities on three thematic areas - Education, Environmental protection and Health care activities.

Dynamatic Technologies engages with "Directorate of Employment & Training, Government of Karnataka" for supporting Industrial Training Institute (ITI) as a centre for excellence for skill development and vocational training. ITI is being supported with provision of equipment for laboratories, volunteering of employees for training sessions, developing training modules and enrolling women students who belong to rural community along with students from underprivileged backgrounds.

Dynamatic Technologies has strengthened its objectives of CSR and through its Skill Development Initiative Team, has been imparting skills to trainees with ITI / Diploma background and in serving workers from the Aerospace Industry, who volunteer to enhance their skill levels. The Dynamatic Skill Initiative team has developed a curriculum for systematically training the ITI passed students, both in theory subjects and on the practical aspects of aircraft structural assembly work which serves as the basis for the 3 months long bridge course. Dynamatic Technologies had two such batches completing their course successfully during this year and the graduated trainees have been employed in various aerospace industries in and around Bangalore. This curriculum has been widely appreciated and is now approved as a two years long Trade (aerospace fitters trade) in Government ITIs all over the country. The course addresses the technical skills in operations such as sheet metal forming, material handling, drilling, riveting, painting and NDT etc.

The Aerospace Skill Development Centre which has been established with all the necessary infrastructure to train the trainees in aerospace subjects under Institute Management Committee, has further come up with two CNC program courses this year, one is in turning and other is in milling. CNC machines are in place at the ITI facility and necessary cutting tools and raw material for practicing on the machines have been provided by Dynamatic Technologies. Classes for fresh batch of trainees are being conducted in these trades and at the same time, the ITI students in the existing trades are also trained in technical and certain soft skills.

The Senior ITI Machinist trainees and ITI faculty were trained on CNC programming both in theory and in practical subjects.

An existing seminar hall at Government Industrial Training Institute has been converted into a fully equipped hall for conducting classes to regular ITI trainees.

CNC Operator-Turning - A Level 3 Course which is registered under Chief Ministers Kaushalya Karnataka Yojane (CMKKY) in Department of Skill Development and Entrepreneurship and Livelihood is continuing to be provided during the year.

Under health care activities, DTL has served the frontline workers in Police departments with necessary PPEs periodically.

The Annual Report on CSR activities in terms of the requirements of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure - 5, which forms part of this Report.


As per the requirements of Section 92(3) of the Act and Rules framed thereunder, the extract of the Annual Return for FY 2020-21 is uploaded on the website of the Company and the same is available at www.dynamatics.com


The Company has zero tolerance for sexual harassment at the workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules made thereunder. The Policy aims to provide protection to employees at workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure.

As a proactive measure and to bring awareness about the Act, training sessions from legal experts are conducted for the women employees. Such sessions are now being extended to all employees in a phased manner.

Policy for Safety and Well Being of Women:

An awareness program on Prevention of Sexual Harassment at the workplace was conducted by a team from SASHA (Support against Sexual Harassment) to ensure a safe, secure, friendly and respectful work-environment to all employees. SASHA assists workplaces in the effective implementation of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013. The Company strives to create a safe, friendly and inclusive work environment for its employees. During the Financial Year 2020-21, the Company received one complaint on sexual harassment and as of the date of this report the same is pending investigation.

Further, the Company has a fully functional Creche at the Aerospace Division. The facility is maintained by an efficient team of caretakers and equipped with amenities like a kitchen, rest room and childrens play area. The facility is open to all the employees children and is also monitored through CCTVs for safety. During the year the Creche facility has been temporarily closed owing to on going Covid-19 pandemic and government regulations. However, the women employees with infant/s have been provided work from home facility. In addition, they are also suitably compensated for Creche facility.

Womens Day celebrations this year included a chat with the CEO. On this occasion, women employees had an open house with the CEO & Managing Director and shared experiences of working at DTL. All the women employees of the Hydraulics and Aerospace Divisions participated and were excited about meeting with CEO & MD. Womens Day was celebrated at Sheraton Hotel, Bangalore in the month of March-21 by engaging all women employees in the campaign of Choose to Challenge by strictly adhering to all protocols stipulated by the Ministry of Health and State Government authorities, in respect to Covid-19.

This seeks to keep all global citizens aware of the challenges that women still face and the importance of celebrating the social, political, economic and cultural achievements of women.

The HR team has more women in your company than men proving the point that the company has the mandate to increase the women employees in all its functions and improve the gender ratio.


The Company has adopted a Vigil Mechanism Policy through which all stakeholders including Directors and employees may report unethical behaviour, malpractices, actual or suspected fraud, wrongful conduct and violation of the Companys 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.

This Policy provides for adequate safeguards against victimization of employees who avail of this mechanism. The Policy also provides for direct access to the Chairman of the Audit & Risk Management Committee in order to best manage such events and to enable integrity of information. It is affirmed that no personnel of the Company will be denied access to the Audit Committee. The policy on vigil mechanism may be accessed on the Companys website (https://www. dynamatics.com/investor.html)


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 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 - 6, which forms part of this report.


The Company continuously strives to reduce its environmental footprint, while enhancing livelihood of people across the product value chain. In view of this objective, the Company has adopted several measures for improvement 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.


The information relating to conservation of energy, technology absorption, Research & Development and Foreign Currency is appended as Annexure - 7.


Events Subsequent to the Date of the Financial Statements

There have been no material changes / commitments affecting the financial performance of the Company which occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of this Report.

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 Companys operations in future.

Partnerships and Collaborations

During the year, the Company entered into two major partnerships with Academia and DRDO. It signed a MOU with Indian Institute of Technology (IIT) Kanpur for design and development of unmanned solutions aimed at surveillance and reconnaissance. The Company has also signed an agreement with Central Scientific Instruments Organisation (CSIO) for advanced optical sensors and payload design and development. The partnerships are aimed at developing indigenous products and solutions for Indian Defence and Paramilitary in line with our Prime Ministers clarion call for self-reliance, Atma Nirbhar Bharat.

Credit Rating:

During the year under review, the Companys debt facilities were rated by India Ratings and Research. The instrument wise ratings are as below:

Instrument Type Rating / Outlook
Long Term Issuer Rating IND BBB+/Posi- tive
Fund Based Working Capital Limit IND BBB+ / Positive / IND A2+
Non-Fund Based Working Capital Limit IND A2+
Term loan IND BBB+/Posi- tive

Listing with Stock Exchanges

The Company confirms that it has paid the Annual Listing Fees for the year FY2021 to NSE (DYNAMATECH) and BSE (505242) where the Companys Shares are listed.


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 GREEN INITIATIVES:

In commitment to keep in line with the Green Initiatives and going beyond it, electronic copy of the Notice of 46th Annual General Meeting of the Company including the Annual Report for FY 2020-21 are being sent to all Members whose e-mail addresses are registered with the Company / Depository Participant(s).


Your Directors take this opportunity to thank the employees, customers, vendors, investors of the Company and the communities in which the Company operates, for their unstinted co-operation and valuable support extended during the year. Your Directors also thank the Government of India, Government of Karnataka and Government of various States in India and government departments / agencies concerned for their co-operation. Your Directors appreciate and value the contributions made by each and every member of the Dynamatic family. The Board would also like to take this opportunity to thank all the Companys customers without whom our success story would not have been possible.

For and on behalf of the Board of Directors

CEO & Managing Director ED - Group Technical Services & HR
DIN : 00053714 DIN : 05205364
Place: Bengaluru
Date: 7th June 2021