Mar 31, 2022
The Board of Directors has the pleasure in presenting the 37th Annual Report and Audited Financial Statements for the Financial Year ended March 31, 2022 together with the Independent Auditors'' Report.
FINANCIAL RESULTS
Your Company has achieved highest ever Revenue from Operations of Rs. 2,476.7 Million for the year 2021-22 with an increase of 39.5% over previous year 2020-21 despite the challenging economic activity both during 2nd and 3rd wave of the pandemic, which mounted operational challenges by restricting movement & disrupting supply chain. Profit After Tax for the year increased by 58.9% to Rs. 374.4 Million from the previous year boosted by the external price corrections, higher revenue, procurement & cost control strategies executed to suit the environment. Company''s drive to focus on employee health and safety was continued and unabated throughout the year.
Summarized financial results for the year are given below.
Rs. Million |
||
Description |
2021-22 |
2020-21 |
Revenue from Operations(net) |
2,476.7 |
1,775 1 |
Profit before depreciation, tax & finance cost |
544.5 |
356.9 |
Less: Depreciation |
33.4 |
374 |
Less: Finance Cost |
7.8 |
3.9 |
Less: Tax Expenses (including deferred tax) |
128.9 |
80.0 |
Profit After Tax |
3744 |
235.6 |
Add: Other Comprehensive income |
1.0 |
32 |
Total Comprehensive income for the year, net of tax |
375 4 |
238.8 |
Add: Balance in Profit & Loss account brought forward from previous year |
1,844.3 |
1,620.0 |
Profit Available for Appropriation |
2,2197 |
1,858.8 |
Appropriation: |
||
Interim Dividend declared for the year |
218.1 |
- |
Final Dividend (proposed) |
14.5 |
14.5 |
Balance in Profit & Loss Account |
1,987.1 |
1,844.3 |
Earnings Per Share (Rs) |
257 5 |
162.0 |
Market price per share as on March 31 (Rs) |
6,240.0 |
4,682.9 |
PERFORMANCE OF THE COMPANY
The best ever Revenue from Operations for the Financial Year 2021-22 of Rs 2,476.7 Million was achieved driven by strong order backlog at the beginning of the year and operational efficiencies. This excellent milestone was achieved in a very
uncertain environment of mounted operational challenges restricting movement, disruption of supply chain and the factory expansion work being undertaken in Tumkur manufacturing facility to build the factory of the future. Company''s various strategies to overcome supply chain hurdles, to contain inflationary pressures, control discretionary expenses and conservation of cash reflected in the lead to a best result for the year in the history of the Company.
The Company was able to sustain the inflationary pressure of input materials and logistics cost through its advance buying strategy which helped improve the operating margin. Increase in Aftermarket Parts Revenue contributed significantly in improving profit for the year.
The relentless commitment and dedication of every employee to overcome many business challenges has enabled the Company to close the year with a robust financial performance in the uncertain situation which prevailed throughout the year. The Company continued to stay focused on the health and wellbeing of its employees and their families through multiple health care measures. The Company continued its initiatives and actions for keeping the employee safe, by ''work from home'' option and continuous guidance on the uncertain environment. Standard Operating Practices and COVID-19 preventive measures were continued with more focus. Business Continuity Plan (BCP) was reviewed regularly to ensure the control on both business and employees'' health & safety.
The slide in the automotive sector in the middle of the year with challenging numbers on cars, two wheelers and HCV segments led to deceleration of growth seen in the last fiscal. However, the infrastructure industries showed a progressive trend in segments of Railways, Renewable Energy, Steel, Cement, Airports and ports and exports. Broadly, industrial segment even now is better poised for growth than the automotive segment.
In this scenario, the Company has maintained its market share in key businesses.
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business of the Company during the Financial Year.
DIVIDEND
The Company has been accruing and preserving cash for growth, for future capital investment, to meet working capital requirements and to cover for appropriate market & economic risks.
Considering the dividend track record of the Company and based on the Company''s performance during the current Year 2021-22, Board of Directors have declared an Interim Dividend of Rs 150/- per Equity Share (1500%) involving a cash outlay of Rs.218.1 Million, which was paid on April 25, 2022. The Directors have also recommended a Final Dividend of Rs. 10/- per Equity Share of Rs. 10/- each (i.e., 100%), amounting to Rs. 14.5
Million. Total Dividend for the year, subject to approval of Final Dividend by the shareholders works out to Rs. 232.6 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.
The Company has not proposed to transfer any amount to the general reserve.
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 March 31, 2022 stood at Rs. 14.5 Million.
During the year under review, your 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, 2022, 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 REPORTECONOMIC SCENARIO AND OUTLOOK
As we enter the new Financial Year, we are seeing a much more unpredictable world due to global situation arising out of the war in Ukraine, and the subsequent impact of the same across the world. We are not immune to any of these situations. Your Company does not have a direct business exposure to the war zone and not impacted by restrictions on both Russia and Belarus. This war has indirectly disrupted supply chains, put unprecedented inflationary pressures leading to extremely unpredictable business environment.
At the same time Covid-19 also keeps coming back in many ways due to its very nature.
There is still underutilization of existing capacities and liquidity continues to be a big issue. This would 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 take suitable measures to tide over these environments and respond to the ever-changing external developments from time to time.
INDUSTRY OUTLOOK AND OPPORTUNITIES
The GDP growth estimates for the Financial Year 202223 is approximately 7.5% - 8%. The government spending on infrastructure continues to run full steam. Divestment initiatives have been implemented to generate funds to use for the infrastructure development programs. This would help your
Company to work for new applications across segments like Steel, Construction and Energy. Your Company is also looking to support companies doing exports for establishing right quality for their end products. Your Company also sees many export opportunities to the Middle East, Turkey, Brazil and a few SubSaharan nations seeking to industrialize their economies.
Although there are no visible signs of the 4th Wave, things could change quickly, which may have a negative impact on the overall business environment like the last few waves.
The Index of Industrial Production (IIP) and Purchasing Managers'' Index (PMI) have historically been good indicators for business sentiments in capital goods order intake. Movements in IIP and PMI have been explained through the following charts.
Your Company was recovering well from the hugely uncertain environment impacted by the Pandemic. But the threat of uncertainties, unfolded by the current geopolitical issues, has hindered the market.
The Company''s full foundry solution is more visible not only in India but also in Middle East, where your Company is building a new foundry at Doha, Qatar with a new customer. The Company has also exported a few machines to Turkish market with the help of group company in Denmark.
Norican digital offer to the market has been evaluated and the same is also getting implemented in some of the flagship foundries in India, creating a stronger partnership beyond equipment sales.
Aftermarket distribution business has now 6 distributors across 9 warehouse locations across all parts of the country near the key installation base - Ludhiana, Manesar, Kolhapur, Pune, Jamshedpur, Coimbatore, Ahmedabad, Rajkot and Bangalore. 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.
Your Company has embarked upon the journey of SBTi (Science Based targets initiative) by signing the pledge along with the Parent, Norican Group to reduce carbon footprint. There is an immense focus on the implementation of this initiative and to
find out areas of impact to start the process.
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 immediate 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:
Particulars |
Standalone |
Consolidated |
||||
2021-22 |
2020-21 |
Change % |
2021-22 |
2020-21 |
Change % |
|
Operation Profit Margin (EBITA) % |
16.5% |
12.6% |
3°.2 |
16.6% |
12.6% |
31.1 |
Net Profit Margin % |
15.1% |
13.3% |
13.9 |
15.1% |
13.0% |
15.5 |
Debtor Turnover Ratio |
9.3 |
9.5 |
(2.3) |
9.° |
9.2 |
(2.1) |
Inventory Turnover Ratio |
6.2 |
4.3 |
46.6 |
6.3 |
4.3 |
45.3 |
Earnings Per Share (Rs) |
257-5 |
162.0 |
58.9 |
265.4 |
166.0 |
59.8 |
During the year, there were significant favorable changes in the above ratios. Increase in Revenue by 39.5% and control on cost have improved both Operating Profit Margin & Net profit margin for the year and has resulted in higher Earnings Per Share. Increase in Inventory Turnover Ratio was due to higher
buying of input materials for executing increased order intake during the year and to overcome the unavailability due to uncertain external environment.
The details of return on net worth at standalone and consolidated levels are given below:
Particulars |
Standalone |
Consolidated |
||||
2021-22 |
2020-21 |
Change % |
2021-22 |
2020-21 |
Change % |
|
Return on Net Worth % |
18.6% |
12.6% |
47.7 |
18.7% |
12.7% |
-4> CO |
Return on net worth is computed by dividing the net profit by year end net worth. Increase in Net profit during the year has increased the return on Net worth.
CORPORATE SOCIAL RESPONSIBILITY
Your Company is committed to comply with Corporate Social Responsibility (CSR) as a good corporate citizen. The Directors are pleased to report that your Company is pursuing its efforts to support the community circles in which it operates. The Company''s CSR program titled âNORICAN Scholarshipâ has helped in providing financial assistance to less privileged students up to standard twelve as well to students seeking diplomas in Engineering.
âNORICAN Scholarshipâ program has made scholarship available to students in eight educational institutions in the neighborhood of your Company''s plants situated at Tumkur and Hosakote in Bengaluru. During the Financial Year, scholarships were provided to 454 needy students. Directors have the pleasure to report that your Company has provided scholarships to 2,341 students since inception. In addition, your Company has invested in infrastructure development for the schools to provide drinking water, teaching aids and sanitation. Your Company has also extended scholarships to 50 meritorious Engineering students
through an NGO ''Foundation for Excellence India Trust'' and since inception 442 students have been given the scholarships.
The Company has also partnered with National Institute of Advanced Manufacturing Technology (NIAMT) [Formerly National Institute of Foundry and Forge Technology (NIFFT)], Ranchi and put in place a scholarship in the name of âJan Johansen DISAMATIC Scholarshipâ 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.
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 âAâ.
During the year, your Board has constituted Risk Management Committee comprising three Directors, Managing Director and the Chief Financial Officer. The Committee met two times
during the year. This Committee shoulders the responsibility of monitoring and reviewing the risk management plan and periodical review of the Risk Management Policy and appraise the Board about risk assessment and mitigation procedure. It also undertakes 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.
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 in the website of the Company at https://www.disagroup.com/en-in/investor-relations/disa-india-ltd/policies/. Complaints raised, if any, are dealt with as per this policy. No complaints have been received during the year 2021-2022.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
There has been no change in the constitution of Board during the year under review. None of the Directors is disqualified from being appointed as such under the provision of Section 164 of the Companies Act, 2013.
In terms of the provisions of the Companies Act, 2013, and the Articles of Association of the Company, Mr. Michael Declan Guerin, Director, retires at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. The Independent Directors, 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. Annual Declarations received from both for the year 2021-22 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 in the website of the Company at https://www. disagroup.com/en-in/investor-relations/disa-india-ltd/policies.
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).
The Board has evaluated the Independent Directors and confirms that Ms. Deepa Hingorani and Mr. Bhagya Chandra Rao have fulfilled the independence criteria as specified in the Listing Regulations and their independence from the management.
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, five (5) 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 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.
Further, the Independent Directors, at their exclusive Meeting held on February 03, 2022, reviewed the performance of the Board, its Chairman and Non-Independent 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 to continue as the Internal Auditors of your Company for the Financial Year 2022-23.
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 âBhadra
Castalloy Private Limitedâ.
The performance of Subsidiary during the Financial Year 2021-22, being the sixth year of operations, has been quite satisfactory. The Audited Financial Results of the Wholly Owned Subsidiary for the Financial Year ended March 31, 2022, 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. 106.6 Million and Rs. 11.5 Million respectively. Revenue from operations for the year was 25.7% higher and Profit after tax was 94.9% higher as compared to previous year.
Consolidated Revenue from Operations of the Company for the year was Rs. 2560.7 Million as against Rs. 1850.6 Million in the previous year, with an increase of 38.4%.
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 at the end of the Financial Year.
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 an 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 reviewed 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. 44 of the Notes forming part of the Financial Statements.
None of the Directors has any pecuniary relationships or transactions vis-a-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. The Policy is available on the 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 âGroupâ as defined in the Competition Act, 2002 includes the following:
Name of Subsidiary |
Country |
Bhadra Castalloy Private Limited |
India |
Italpresse Gauss S.p.A. |
Italy |
DISA K.K. |
Japan |
WG Plus de Mexico S de RL de CV |
Mexico |
WG Plus Servicios S de RL de CV |
Mexico |
StrikoWestofen de Mexico, S.A. de |
Mexico |
C.V |
|
IP Mexico Die Casting S.A. de C.V. |
Mexico |
Wheelabrator Schlick Sp. Z.o.o. |
Poland |
SWO Polska Sp. Z.o.o. |
Poland |
Wheelabrator Group SLU |
Spain |
DISA Industrie AG |
Switzerland |
DISA Holding AG |
Switzerland |
Blast Cleaning Techniques Ltd |
United Kingdom |
Castalloy Europe Ltd |
United Kingdom |
WGH UK Holdings Limited |
United Kingdom |
WGH UK Ltd. |
United Kingdom |
Wheelabrator Technologies (UK) Ltd. |
United Kingdom |
Wheelabrator Group Ltd. |
United Kingdom |
Striko UK Ltd. |
United Kingdom |
Abrasive Developments Ltd |
United Kingdom |
Spencer & Halstead Ltd |
United Kingdom |
Impact Finishers Ltd. United Kingdom |
United Kingdom |
100% Dormant |
|
Vacu-Blast International |
United Kingdom |
DISA Industries Inc. |
United States |
WG Global LLC |
United States |
DISA Holding LLC |
United States |
Wheelabrator Group Inc. |
United States |
Castalloy Inc |
United States |
Wheelabrator (Delaware) LLC |
United States |
StrikoWestofen Dynarad Furnace |
United States |
Corp. |
|
Italpresse of America Inc |
United States |
Schmidt Manufacturing, Inc |
United States |
Bob Schmidt, Inc |
United States |
Name of Subsidiary |
Country |
Norican A/S |
Denmark |
Norican Global A/S |
Denmark |
Norican Group ApS |
Denmark |
Norican Holdings ApS |
Denmark |
DISA Holding A/S |
Denmark |
DISA Holding II A/S |
Denmark |
DISA Industries A/S |
Denmark |
Wheelabrator Group NV |
Belgium |
WGH Holding Corp. |
British Virgin Islands |
Wheelabrator Group (Canada) ULC |
Canada |
DISA (Changzhou) Machinery Ltd. |
China |
Italpresse Industrie (Shanghai) Co. Ltd. |
China |
Kunshan Italpresse Die-casting Equipment Co., Ltd |
China |
StrikoWestofen Thermal Equipment (Taicang) Co. Ltd. |
China |
Wheelabrator Czech s.r.o. |
Czech Republic |
Matrasur Composites SAS |
France |
Wheelabrator Group SAS |
France |
Walther Trowal S.a.r.l |
France |
Italpresse France S.a.r.l |
France |
Wheelabrator Group GmbH |
Germany |
Wheelabrator Group Holding GmbH |
Germany |
Wheelabrator-Berger Stiftung GmbH |
Germany |
OT Oberflachentechnik Maschinen und Werkzeuge Handels GmbH |
Germany |
DISA Industrieanlagen GmbH |
Germany |
Wheelabrator OFT GmbH |
Germany |
Nolten GmbH |
Germany |
LMCS Group Holding GmbH |
Germany |
Light Metal Casting Solutions Group GmbH |
Germany |
SWO Holding GmbH |
Germany |
Norican Digital GmbH |
Germany |
Light Metal Casting Equipment GmbH |
Germany |
StrikoWestofen GmbH |
Germany |
DISA Limited Hong Kong |
Hong Kong |
DISA India Limited |
India |
DISA Technologies Private Ltd. |
India |
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 Equity Share Capital of its Wholly Owned Subsidiary Company, Bhadra Castalloy Private Limited during the year 2015-16. It has extended interest-bearing intercompany demand loan of Rs. 26 Million in the year 2016-17 for the 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 the limits prescribed under the provisions of Section 186 of the Companies Act, 2013.
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 M/s. 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.
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 Board has, in its Meeting held on May 20, 2021, based on the recommendation of the Audit Committee, appointed M/s. Rao, Murthy & Associates, Bengaluru as Cost Auditors of the Company for the Financial Year ended March 31, 2022.
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, Practising Company Secretary to undertake the Secretarial Audit of the Company for the Financial Year ended March 31, 2022. 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.
As required under 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 March 31, 2022 will be filed with BSE within the due date of May 30, 2022.
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 the year 2020-21 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. The 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 expired on September 30, 2021 and it has been renewed with another three-year long-term agreement effective from October 01, 2021 to September 30, 2024.
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. The Company is also exploring the procurement of green energy to meet the energy requirements of its factories and that of its subsidiary.
TECHNOLOGY ABSORPTION
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. 497.1 Million of foreign exchange and expended Rs. 397.8 Million foreign exchange during the Financial Year under review.
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/extract-of-annual-return.
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.
During the year, there were two employees 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 Rs. Million |
Mr. Lokesh Saxena |
Managing Director |
15.2 |
Mr. Amar Nath |
Chief Financial |
10.2 |
Mohanty |
Officer |
the report and the accounts are being sent to the Members excluding the particulars of top ten employees. In terms of Section 136 of the Act, the particulars of top ten employees 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 2021-22.
No of complaints received: NIL.
No of complaints disposed off: NIL.
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
Date: May 25, 2022 Deepa Hingorani
Place: Singapore Chairperson
DIN: 00206310
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,
Mar 31, 2018
The Board of Directors has pleasure in presenting the 33rd Annual Report and Audited Financial Statements for the financial year ended 31st March 2018 together with the Independent Auditorsâ Report. FINANCIAL RESULTS
Your company achieved an all-time high net Revenue from Operations of Rs. 1,958.6 Million during the financial year 2017-18 with a growth of 24.4% over previous year. Profit after tax for the year also improved significantly by 46.1% to Rs. 163.4 Million. Summarized financial results for the year are given below.
(Rs. in Million)
Description |
2017-18 |
2016-17 |
Revenue from Operations (net) |
1,958.6 |
1,5749 |
Profit before depreciation, |
||
tax & finance cost |
273.4 |
199.8 |
Less: Depreciation |
19.1 |
20.0 |
Less: Finance Cost |
1.3 |
1.4 |
Less: Tax Expenses (net of deferred tax) |
90.7 |
67.3 |
Profit After Tax |
162.3 |
111.1 |
Add: Other Comprehensive Income |
1.1 |
2.9 |
Total Comprehensive Income |
||
for the year, net of tax |
163.4 |
114.0 |
Add: Balance in Profit & Loss account |
||
brought forward from previous year |
910.0 |
817.7 |
Profit Available for Appropriation |
1,073.4 |
931.7 |
Appropriations: |
||
Utilized for Buyback of equity shares |
- |
17.1 |
Final Dividend (proposed) incl. |
||
tax thereon |
4.4 |
4.6 |
Balance in Profit & Loss Account |
1,069.0 |
910.0 |
Earnings Per Share (Rs) |
111.61 |
74 52* |
Market price per share as at March 31 (Rs) |
6,000.2 |
4,999.5 |
*Weighted average, post Buy Back of Shares.
The Company and its subsidiary have adopted Indian Accounting Standards (Ind AS) for the first time with effect from April 01, 2017 pursuant to the notification of the Companies (Indian Accounting Standard), Rules 2015 issued by the Ministry of Corporate Affairs. Date of transition to Ind AS is April 01, 2016. Previous year figures have been recast to be Ind AS compliant.
PERFORMANCE OF THE COMPANY
Overall performance of your Company for the financial year 2017-18 under review improved significantly with 24.4% growth in net revenue from operations and 46.1% growth in profit after tax as compared to the previous financial year 2016-17 driven by an all-time high orders inflow during the financial year, cost reduction initiatives undertaken in bringing down the manufacturing and other costs, maintaining head count and improvement in productivity. Your Company has been able to maintain its market share in all its major product lines and expect the trend to continue going ahead.
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 past records of the Company and keeping in view the future positive outlook, your Board of Directors recommends a final Dividend of Rs. 2.50/- (i.e., 25%) per Equity Share of Rs.10/- each, for the year amounting to Rs.4.4 Million including taxes on dividend.
RESERVE
The Company has not proposed to transfer any amount to the general reserve.
SHARE CAPITAL
The Authorised 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 2018 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, 2018, none of the Directors hold Shares or convertible instruments of the Company.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has a Whistle Blower Policy for vigil mechanism which is available on website of the Company at https://www.disagroup.com/ en-in/investor-relations/policies/ and there were no cases reported during last year.
DIRECTORS AND KMP
During the financial year, Mr. Lokesh Saxena was appointed as the Managing Director of the Company for a period of three (3) years with effect from June 21, 2017. Mr. Viraj Naidu stepped down as Managing Director of the Company with effect from May 25, 2017 in view of his relocation to a global position within the group. However, he continued as a Non-Executive Director of the Company.
Mr. Robert E Joyce Jr. stepped down as the Chairman and Director of the Company with effect from June 21, 2017 due to his other commitments and Mr. Andrew Thomas Carmichael was appointed as the Chairman of the Company with effect from June 21, 2017.
In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Viraj Naidu, Director, retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for reappointment.
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 KMP is available on the website of the Company at https:// www.disagroup.com/en-in/investor-relations/policies/.
INDEPENDENT DIRECTORS
Declarations from all the Independent Directors of the Company have been received under Section 149(7) of the Companies Act, 2013 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 Listing Regulations.
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/policies/.
MEETINGS OF THE BOARD OF DIRECTORS
During the year, five (5) Meetings of the Board of Directors were held, as required under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 (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 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 Listing Regulations, the Board of Directors has carried out an annual evaluation of its own performance, its Committees and of individual Directors.
Further, the Independent Directors, at their exclusive Meeting held during the year reviewed the performance of the Board, its Chairman and Non-Executive Directors and other items as stipulated under the Listing Regulations. Nomination and Remuneration Committee has reviewed the performance of the Independent Directors.
DIRECTORSâ 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; and
(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.
(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.
DEPOSITS
Your Company has neither accepted nor renewed any Deposits from the public within the meaning of Companies Act, 2013 as such, 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 a Wholly Owned Subsidiary âBhadra Castalloy Private Limitedâ. During the financial year, the Subsidiaryâs name was changed by removing âSâ from âCASTALLOYSâ to âCASTALLOYâ in order to align with the CASTALLOY business of the Norican Group, (being the ultimate Parent Company).
The performance of Subsidiary during the financial year 2017-18, being the second year of operation has been quite satisfactory. The audited financial results of the Wholly Owned Subsidiary for the financial year ended March 31, 2018 are consolidated with the financial results of Company for the financial year. The net sales and the Profit after tax of the Subsidiary Company were Rs.98.9 Million and Rs.4.2 Million respectively.
Consolidated net Revenue from Operations of the Company crossed Rs. 2,000 Million during the year.
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 that were entered during the financial year were in the ordinary course of business and on an armâs length basis. 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 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-a-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 Companyâs website and the details of all the related party transactions are disclosed in the financials. The âRelated Party Transaction Policyâ is available on website of the Company at https:// www.disagroup.com/en-in/investor-relations/policies.
GROUP COMPANIES
Persons constituting Group coming within the definition of âGroupâ as defined in the Competition Act, 2002 includes the following:
S.No. |
Name of the Entity |
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 |
Kunshan Italpresse Die-Casting Equipment Co. Ltd. |
China |
6 |
Italpresse Industrie (Shanghai) Co. Ltd. |
China |
7 |
StrikoWestofen Thermal Equipment (Taicang) Ltd. |
China |
8 |
Wheelabrator Czech s.r.o. |
Czeck Republic |
9 |
Norican A/S |
Denmark |
10 |
Norican Global A/S |
Denmark |
11 |
Norican Group ApS |
Denmark |
12 |
DISA Holding A/S |
Denmark |
13 |
DISA Industries A/S |
Denmark |
14 |
Matrasur Composites SAS |
France |
15 |
Wheelabrator Group SAS |
France |
16 |
Wheelabrator Group GmbH |
Germany |
17 |
Wheelabrator Group Holding GmbH |
Germany |
18 |
LMCS Group Holding GmbH |
Germany |
19 |
Light Metal Casting Solutions Group GmbH |
Germany |
20 |
SWO Holding GmbH |
Germany |
21 |
Norican Digital GmbH |
Germany |
22 |
Light Metal Casting Equipment GmbH |
Germany |
23 |
StrikoWestofen GmbH |
Germany |
24 |
DISA Limited Hong Kong |
Hong Kong |
25 |
DISA India Ltd. |
India |
26 |
DISA Technologies Private Ltd. |
India |
27 |
Italpresse Industrie S.r.l. |
Italy |
28 |
Gauss Automazione S.p.A. |
Italy |
29 |
DISA K.K. |
Japan |
30 |
WG Plus de Mexico S de RL de CV |
Mexico |
31 |
StrikoWestofen de Mexico, S.A. de C.V |
Mexico |
32 |
IP Mexico Die Casting S.A. de C.V. |
Mexico |
33 |
Wheelabrator Schlick Sp. Z.o.o. |
Poland |
34 |
SWO Polska Sp. Z.o.o. |
Poland |
35 |
Wheelabrator Group SLU |
Spain |
36 |
DISA Industrie AG |
Switzerland |
37 |
DISA Holding AG |
Switzerland |
38 |
WGH UK Holdings Limited |
United Kingdom |
39 |
WGH UK Ltd. |
United Kingdom |
40 |
Wheelabrator Technologies (UK) Ltd. |
United Kingdom |
41 |
Wheelabrator Group Ltd. |
United Kingdom |
42 |
Striko UK Ltd. |
United Kingdom |
43 |
DISA Industries, Inc. |
United States |
44 |
WG Global LLC |
United States |
45 |
DISA Holding LLC |
United States |
46 |
Wheelabrator Group, Inc. |
United States |
47 |
Wheelabrator (Delaware) LLC |
United States |
48 |
StrikoWestofen Dynarad Furnace Corp. |
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 are 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 Equity Share Capital of its Wholly Owned Subsidiary Company, Bhadra Castalloy Private Limited. It has extended an interest-bearing intercompany demand loan of Rs.8.5 Million to the subsidiary in May 2018 for the purpose of financing the purchase considerations to be paid for acquisition of the foundry by the subsidiary. This loan is in addition to Rs 17.5 Million given by the Company during the last financial year for the same purpose. The Company had also given a Corporate Guarantee of Rs.35.0 Million to Kotak Mahindra Bank on behalf of its subsidiary for providing bank guarantees for the acquisition. Out of Rs. 35 Million, only Rs 12.5 Million guarantee was outstanding as on the end of the financial year, which expired at the end of May 2018. 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.
AUDITORS
Messrs Deloitte Haskins & Sells, Chartered Accountants, Bangalore retire at the ensuing Annual General Meeting. The Company has received a Certificate under Section 141 of the Companies Act, 2013 stating that their appointment, if approved, would be within the limits specified therein. The Board proposes to appoint Messrs Deloitte Haskins & Sells, Chartered Accountants, as statutory auditors of the Company for the second term of five years from the financial year 2018-19 to 2022-23.
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 May 25, 2017, based on the recommendation of the Audit Committee, appointed Messrs Rao, Murthy & Associates, Bangalore as Cost Auditors of the Company for the financial year ended 31st March 2018.
SECRETARIAL AUDIT
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, Bangalore, a Company Secretary in Whole Time Practice to undertake the Secretarial Audit of the Company. 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 SEBI (LODR) Regulations, 2015, a report on Corporate Governance and a Certificate from Mr. Vijayakrishna KT, Practising Company Secretary, regarding compliance of conditions of Corporate Governance are annexed as Annexure C and Annexure D.
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 of systems, procedures and management practices.
INDUSTRIAL RELATIONS
Industrial relations have been cordial and constructive, which have helped your Company to achieve production targets.
RESEARCH AND DEVELOPMENT, CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION CONSERVATION OF ENERGY
Your Company gives highest priority to conservation of energy through better supervision and training of employees to reduce the usage of electricity.
RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
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 Principalâs factories and design offices abroad for training and updating their skills.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company earned Rs.121.1 Million of foreign exchange and expended Rs. 373.4 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, Extract of Annual Return is provided as Annexure E to this Report.
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 going concern status of the Company.
DISCLOSURE RELATING TO REMUNERATION OF EMPLOYEES
The particulars of employees as required by Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in âAnnexure - Fâ forming part of this Report.
During the year, there were no employees receiving remuneration more than Rs. 1,02,00,000/- (Rupees One Crore Two Lakhs) per annum and/ or Rs.8,50,000/- (Rupees Eight Lakhs Fifty Thousand) per month. Hence, details as required by Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are not furnished.
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.
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 year 2017-18:
No of complaints received: NIL. No of complaints disposed off: NIL.
ACKOWLEDGEMENT
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, Companyâs 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
Date: June 18, 2018 Andrew Thomas Carmichael
Place: Altrincham, UK Chairman
DIN: 03634151
Mar 31, 2017
The Board of Directors has pleasure in presenting the 32nd Annual Report and Audited Financial Statements of the Company for the financial year ended 31st March, 2017 together with the Independent Auditorsâ Report.
FINANCIAL RESULTS
Rs. in Million
Description |
2016-17 |
2015-16 |
Revenue from Operations |
1,572.2 |
1,4273 |
Profit before depreciation, |
||
tax & financial charges |
204.0 |
193.8 |
Less: Depreciation |
20.0 |
28.5 |
Less: Interest |
1.2 |
0.2 |
Less: Provision for taxation |
||
(net of deferred tax) |
68.8 |
59.1 |
PROFIT AFTER TAX |
114.0 |
106.0 |
Add: Profit & Loss account Balance b/f |
813.4 |
712.0 |
PROFIT AVAILABLE FOR APPROPRIATION |
927.4 |
818.0 |
APPROPRIATIONS: |
||
Utilized for Buyback |
17.1 |
- |
Amount transferred to General Reserve |
- |
- |
Balance in Profit & Loss Account |
910.35 |
818.0 |
Proposed Dividend & Tax thereon |
4.4 |
4.6 |
Earnings per share |
76.47* |
70.19 |
Market price per share as at March 31- Rs |
4,999.5 |
3,803.0 |
*Weighted average, post Buy Back of Shares.
PERFORMANCE OF THE COMPANY
Performance of your Company for the year 2016-17 improved as compared to the previous year. Revenue from operations and Profit after tax for the financial year 2016-17 improved by 10% and 8% respectively as compared to the previous financial year 2015-16. Various cost reduction initiatives undertaken by the Company in bringing down the manufacturing cost and maintaining head count resulted in the improvement for the year. Your Company has been able to maintain its market share in all its major product lines despite the slump in the capital equipment industry.
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business of the Company during the year.
DIVIDEND
Considering the past records of the Company and keeping in view the future outlook, your Board of Directors recommends a final Dividend of Rs. 2.50/- (i.e., 25%) per Equity Share of Rs. 10/- each, for the year amounting to Rs. 4.38 Million including taxes on Dividend.
RESERVE
The Company has not proposed to transfer any amount to the general reserve.
SHARE CAPITAL
The Paid-up Equity Share Capital of your Company as on 31st March, 2017 has reduced by Rs. 0.56 Million to Rs. 14.54 Million as against Rs. 15.10 Million as on March 31, 2016 consequent upon Buy Back of Equity Shares undertaken by the Company as described here in after.
During the year under review, your Company has neither issued any shares with differential voting rights nor granted stock options or sweat equity. As on 31st March, 2017 none of the Directors held shares or convertible instruments of the Company.
Buy Back of Equity Shares:
During the year, after obtaining requisite approvals, your Company bought back 56,000 fully paid up Equity Shares of Rs. 10/- each from the existing shareholders/beneficial owners of Equity Shares on a proportionate basis through the tender offer route at a price of Rs. 4,800/- per share for an aggregate amount of Rs. 268.8 Million. The Equity Shares bought back represents 3.71% of the pre Buy Back Equity Share Capital of the Company. The Buy Back offer size of Rs. 268.8 Million represents 24.88% of the total Paid up Capital and Free Reserves of the Company as per the audited accounts of the Company for the financial year ended March 31, 2016. The Buy Back offer was closed on November 17, 2016.
The Buy Back of Equity Shares by the Company was in accordance with the Articles of Association of the Company, provisions of the Companies Act, 2013, SEBI (Buy-Back of Securities) Regulations 1998 and other applicable provisions of law and approved by the Board of Directors and Shareholders of the Company through Postal Ballot.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT ECONOMIC SCENARIO & OUTLOOK
There were some signs of gradual improvement in the economy during year until the third quarter of the year which were reflected by the higher order intake in some industry segments. However, the fiscal year ended on a soft note in the final quarter, with the Demonetization Shock. New BS-IV norms and GST are expected to be the next push for the economy.
INDUSTRY OUTLOOK & OPPORTUNITIES
IIP & PMI have historically been good indicators for business sentiments in Capital Goods Order Intake. The New Series of IIP (Base 2011-12) seems to be even better.
The low rate of IIP growth has dragged down the Capital Goods Industry for the last 4 years now. However, your Company is seeing a sustained growth in Passenger Cars Segment, while the Commercial Vehicles Segment turned dull during the last quarter of the financial year. Tractors improved, but Demonetization took the wind out of the sails. However, Demonetization impact seems to be wearing off now.
The Companyâs key focus segment of Foundry industry is heavily dependent on the Automotive and Agricultural industrial growth. Low or no growth in these end segments resulted in margin stress for the Company. The Companyâs continued focus on the new products, new markets, new customers and wider product portfolio has however helped in offsetting any potential decline in top line.
MARKET DEVELOPMENT
Your Companyâs latest launch of C3 DISAMATIC Machine and the VH Series Wheelabrator Shot Blast Machines have been well received in the market, as it helps the Technology Upgrade journey of the Indian Foundries, by making the âTop End Technology More Affordable".
Your Company continues its marketing thrust through Exhibitions, Seminars and Symposiums, a very successful Customersâ Day was celebrated in October 2016 at Tumkur Plant, to showcase full range of products and some of the companyâs newest products.
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 has further enhanced its efforts to support the community circles in which it operates. The companyâs CSR program titled âDISA Wheelabrator Scholarship" has helped in providing financial assistance to less privileged students up to standard twelve as well to students seeking diplomas in Engineering.
âDISA Wheelabrator Scholarship" program has made scholarship available to students in eight educational institutions in the plant neighborhood of Tumkur and Hosakote in Bangalore. During the year, 241 scholarships were provided to the 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 59 meritorious Engineering students through an NGO ''Foundation for Excellence India Trustâ.
The Companyâs policy on Corporate Social Responsibility is available on the website of the Company at https://www.disagroup.com/en-in/ investor-relations/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 given in Annexure âA".
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 have been adequately insured and all the insurable risks have been insured.
As an established practice, at each Meeting of the Board, the Directors are updated on risks identification and steps taken to mitigate the same. Risk Management Policy is hosted on the Companyâs website at https://www.disagroup.com/en-in/investor-relations/policies.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has a Whistle Blower Policy for vigil mechanism which is available on website of the Company at https://www.disagroup.com /en-in/investor-relations/policies/ and there were no cases reported during last year.
DIRECTORS AND KMP
In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Andrew Thomas Carmichael., Director, retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for reappointment.
In view of relocation to a global position within the group, Mr. Viraj Naidu has stepped down as Managing Director of the Company with effect from May 25, 2017. However, he will be continuing as a Non Executive Director of the Company.
Your Board undertook the process of identifying a suitable candidate to fill in the office of the Managing Director. Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors in its meeting held on June 21, 2017 has appointed Mr. Lokesh Saxena as Managing Director for a period of three (3) years with effect from June 21, 2017. His appointment is placed before the Shareholders for their approval in the Notice convening the 32nd Annual General Meeting of the Company. His brief profile is part of the Notice.
In view of other commitments, Mr. Robert E Joyce Jr has stepped down as the Chairman and Director of the Company with effect from June 21, 2017. Your Board places on record its appreciation for the contribution and services rendered by Mr. Robert E Joyce Jr during his tenure as Chairman and Director of the Company. After due consideration, your Board has appointed Mr. Andrew Thomas Carmichael as the Chairman of the Company with effect from June 21, 2017.
Your Board also places on record its appreciation for Mr. Viraj Naiduâs contribution during his tenure as Managing Director of the Company, for the last one decade.
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 KMP is available on the website of the Company at https:// www.disagroup.com/en-in/investor-relations/policies/.
INDEPENDENT DIRECTORS
Declarations from all Independent Directors of the Company have been received under Section 149(7) of the Companies Act, 2013 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 Listing Regulations.
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/ policies/.
MEETINGS OF THE BOARD OF DIRECTORS
During the year, four (4) Meetings of the Board of Directors were held, as required under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 (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 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 Listing Regulations, the Board of Directors has carried out an annual evaluation of its own performance, its Committees and of individual Directors.
Further, the Independent Directors, at their exclusive Meeting held during the year reviewed the performance of the Board, its Chairman and Non-Executive Directors and other items as stipulated under the Listing Regulations. Nomination and Remuneration Committee has reviewed the performance of the Independent Directors.
DIRECTORSâ 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; and
(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.
(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.
DEPOSITS
Your Company has neither accepted nor renewed any Deposits from the public within the meaning of Companies Act, 2013 as such, 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 a Wholly Owned Subsidiary ''''Bhadra Castalloys Private Limited".
The financial year 2016-17 was the first year of operation of the Subsidiary Company and the performance of Company has been quite satisfactory. The operations of Bhadra Castalloys Private Limited was formally commenced from April 01, 2016. The audited financial results of the Wholly Owned Subsidiary for the financial year ended March 31, 2017 were consolidated with the financial results of the Company for the year. The net sales and the Profit after tax of the Subsidiary Company was Rs. 74.1 Million and Rs. 1.2 Million respectively. 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 on the end of the financial year.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered during the financial year were in the ordinary course of business and on an armâs length basis. 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 approval on quarterly basis. The details of all related party transactions are disclosed in the SI. No. 24.2 of the Notes forming part of the Financial Statements.
None of the Directors has any pecuniary relationships or transactions vis-a-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.
However, certain material related party transactions which need approval from the Shareholders in terms of the applicable laws are being placed before Shareholders for due consideration and approval, details of which are appended to the Notice of the 32nd Annual General Meeting in the explanatory statement.
The Policy on related party transactionsâ as approved by the Board is uploaded on the Companyâs website and the details of all the related party transactions are disclosed in Sl. No. 24.2 of the notes forming part of the financial statements. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company. The ''Related Party Transaction Policyâ is available on website of the Company at https:// www.disagroup.com/en-in/investor-relations/policies.
GROUP COMPANIES
Persons constituting Group coming within the definition of âGroup" as defined in the Competition Act, 2002 includes the following:
S.No. |
Name of the Entity |
Country |
1. |
Wheelabrator Group NV |
Belgium |
2 |
WGH Holding Corp. |
British Virgin Island |
3 |
Wheelabrator Group (Canada), Ltd. |
Canada |
4 |
DISA Machinery Limited |
China |
5 |
DISA Trading (Shanghai) Co., Ltd. |
China |
6 |
Wheelabrator Czech s.r.o. |
Czech Republic |
7 |
DISA Holding A/S |
Denmark |
8 |
DISA Holding II A/S |
Denmark |
9 |
DISA Industries A/S |
Denmark |
10 |
DISA Management Services ApS |
Denmark |
11 |
Norican A/S (formerly Naciron A/S)# |
Denmark |
12 |
Norican Global A/S |
Denmark |
13 |
Norican Group ApS |
Denmark |
14 |
Norican Holdings ApS |
Denmark |
15 |
Matrasur Composites SAS |
France |
16 |
Walther TrowalSARL |
France |
17 |
Wheelabrator Group SAS |
France |
18 |
DISAIndustrieanlagen GmbH |
Germany |
19 |
Nolten GmbH |
Germany |
20 |
OT OberflachentechnikMaschinen und |
|
WerkzeugeHandels GmbH |
Germany |
|
21 |
Wheelabrator Group GmbH |
Germany |
22 |
Wheelabrator Group Holding GmbH |
Germany |
23 |
Wheelabrator OFT GmbH |
Germany |
24 |
Wheelabrator-Berger Stiftung GmbH |
Germany |
25 |
DISA Liimited |
Hong Kong |
26 |
Bhadra Castalloys Private Limited |
India |
27 |
DISA India Limited |
India |
28 |
DISA Technologies Private Limited |
India |
29 |
DISAKK |
Japan |
30 |
WG Plus de Mexico S de R, I de CV |
Mexico |
31 |
WG Plus Servicios S de R, I de V |
Mexico |
32 |
Wheelabrator Schlick Sp. Z.o.o. |
Poland |
33 |
Wheelabrator Group SLU |
Spain |
34 |
DISA Holding AG |
Switzerland |
35 |
DISA Industrie AG |
Switzerland |
36 |
Blast Cleaning Techniques Ltd |
UK |
37 |
WGH UK Holdings Limited |
UK |
38 |
WGH UK Limited |
UK |
39 |
Wheelabrator Group Limited |
UK |
40 |
Wheelabrator Technologies (UK) Limited |
UK |
41 |
Bob Schmidt, Inc. |
USA |
42 |
Castalloy, Inc. |
USA |
43 |
DISA Holding LLC |
USA |
44 |
DISA Industries, Inc. |
USA |
45 |
Schmidt Manufacturing, Inc. |
USA |
46 |
WG Global LLC |
USA |
47 |
Wheelabrator Group, Inc. |
USA |
# The name of Naciron A/S was changed to Norican A/S from October 02, 2015 Dormant, Non-Operating or Inactive Entities |
||
1 |
Abrasive Developments Ltd. |
UK |
2 |
Impact Finishers Ltd. |
UK |
3 |
Spencer & Halstead Ltd. |
UK |
4 |
Vacu-Blast International |
UK |
5 |
Surface Preparation (Gibraltar) Ltd. |
Gibraltar |
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 are 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 Equity Share Capital of its Wholly Owned Subsidiary Company, Bhadra Castalloys Private Limited. It has extended an interest-bearing demand loan of Rs. 17.5 Million to the subsidiary during the year. The Company has also given a Corporate Guarantee of Rs. 35.0 Million to Kotak Mahindra Bank on behalf of its subsidiary for providing bank guarantees. The above Investment, loan extended and guarantees given are well within limits prescribed under the provisions of Section 186 of the Companies Act, 2013.
AUDITORS
Pursuant to provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, Messrs Deloitte Haskins & Sells, Chartered Accountants were appointed as Statutory Auditors of the Company for a term of 3 years, to hold office from the conclusion of 30th Annual General Meeting held on 6thAugust, 2015 until the conclusion of 33rd Annual General Meeting, subject to ratification of their appointment at every subsequent Annual General Meeting. The Company has received a Certificate under Section 141 of the Companies Act, 2013 from the auditors stating that the ratification for the 3rd year would be as per the terms provided in the Companies Act, 2013.
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 May 26, 2016, based on the recommendation of the Audit Committee, appointed Messrs Rao, Murthy & Associates, Bangalore as Cost Auditors of the Company for the financial year ended 31st March, 2017.
SECRETARIAL AUDIT
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, Bangalore, a Company Secretary in Whole Time Practice to undertake the Secretarial Audit of the Company. 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 SEBI (LODR) Regulations, 2015, a report on Corporate Governance and a Certificate from Mr. Vijayakrishna KT, Practising Company Secretary, regarding compliance of conditions of Corporate Governance are annexed as Annexure C.
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 Audits of the Company and reporting periodically their findings of systems, procedures and management practices.
INDUSTRIAL RELATIONS
Industrial relations have been cordial and constructive, which have helped your Company to achieve performance targets.
RESEARCH AND DEVELOPMENT, CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION CONSERVATION OF ENERGY
Your Company gives highest priority to conservation of energy through better supervision and training of employees to reduce the usage of electricity.
RESEARCH AND DEVELOPMENT, TECHNOLOGY, ABSORPTION, ADAPTATION AND INNOVATION
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 Principalâs factories and design offices abroad for training and updating their skills.
FOREIGN EXCHANGE EARNINGS AND OUTFLOW
The Company earned Rs. 230.3 Million of foreign exchange and expended Rs. 273.7 Million foreign exchange during the financial year under review as stated in SI. No. 23.4, 23.5, 23.6 and 23.8 of the Notes Forming part of the Financial Statements.
EXTRACTS OF ANNUAL RETURN
As required pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in Form MGT-9 is attached as a part of this Annual Report as Annexure E.
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 going concern status of the Company.
DISCLOSURE RELATING TO REMUNERATION OF EMPLOYEES
The particulars of employees as required by Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure F forming part of this Report.
The details of top ten employees of the Company in terms of remuneration drawn during the year as required by Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are furnished in ''Annexure Fâ. During the year, there were no employees receiving remuneration more than Rs. 1,02,00,000/-(Rupees One Crore Two Lakhs only) per annum and/or Rs. 8,50,000/-(Rupees Eight Lakhs Fifty Thousand) per month. Hence, such details are not furnished.
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.
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 year 2016-17:
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, Companyâs 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
Date: June 21, 2017 Andrew Thomas Carmichael
Place: Altrincham, UK. Chairman
DIN: 03634151
Mar 31, 2015
Dear Members,
The Board of Directors has pleasure in presenting the 30th Annual
Report and Audited Statement of Accounts for the 15 months' period
ended 31st March, 2015 together with the Independent Auditors' Report.
FINANCIAL RESULTS
(Rs. in Lakhs)
1st January, 1st January,
2014 to 2013 to 31st
Description 31st March, December,
2015 2013
(15 Months) (12 Months)
Sales & Service 18,377 17,445
Profit before depreciation, tax &
financial charges 3,252 3,410
Less: Depreciation 391 380
Less:Interest 35 2
Less: Provision for taxation
(net of deferred tax) 1,038 1,078
PROFIT AFTER TAXATION 1,788 1,950
Add: Profit & Loss account Balance b/f 5,378 3,667
PROFIT AVAILABLE FOR APPROPRIATION 7,166 5,617
APPROPRIATION:
Amount transferred to General Reserves - 195
Proposed Dividend & Tax thereon 46 44
Balance in Profit & Loss Account 7,120 5,378
DIVIDEND:
The continued recession and overall slowdown did impact the business of
your Company leading to shortfall in performance against Budget.
Considering the foreseeable future road map, your Board of Directors
recommend a Dividend of Rs.2.50 per Equity Share of Rs.10/- each
(i.e.25%).
RESERVE:
The Company has not proposed to transfer any amount to the General
Reserve.
SHARE CAPITAL:
The paid up Equity Share capital as on 31st March, 2015 was Rs. 151.02
Lakhs. During the period under review, the Company has not issued
shares with differential voting rights nor granted stock options nor
sweat equity. As on 31st March, 2015 none of the Directors held Shares
or convertible instruments in the Company.
PERFORMANCE OF THE COMPANY:
The current financial period is for 15 months commencing from January
1, 2014 to March 31, 2015.
Compared to Y2013, when your Company achieved its highest ever sales of
Rs.174 Crores, the Y2014-15 saw the continuing slowdown, take its toll
on the Company's sales & margins. The mix shift from Project Sales to
Standalone machine sales also affected margins, as Greenfield project
expansions are hardly there in the foundry markets currently.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT ECONOMIC SCENARIO & OUTLOOK:
The Indian Economy is still passing through, probably the longest
slowdown in the last few decades. The change in industry sentiments was
evident with a new majority government at the centre, however the real
growth revival is yet to be seen. The slowdown which started from end
Y2011, is still persisting and it continues to choke any significant
growth sentiments.
INDUSTRY OUTLOOK & OPPORTUNITIES:
During the period October'2011- March'2015, the average YoY growth in
the Index of Industrial Production (IIP) stood at:
* For Manufacturing : 0.9%
* For Capital Goods : -2.0%
Such marginal growth can be easily met by Manufacturing Industry
through efficiency improvements alone, and capacity expansions are not
required. This hits Capital Equipment Industry (like DISA INDIA
LIMITED) hard.
During the same period, the Passenger Vehicles (Cars and Utility
Vehicles) Market has stagnated at about the same level of 31 Lakhs
vehicles annually. The Commercial Vehicles (Buses and Trucks) on the
other hand have collapsed from 9.1 Lakhs/Year to 7.0 Lakhs/Year. The
robust Tractors Market - which had been compensating to some extent
earlier - also collapsed in FY2014-15, by about 9% compared to
FY2013-14.
Your Company's key focus segment of Foundry Industry is heavily
dependent on the automotive and agricultural industry growth. The
prolonged slowdown in these end segments, has led to high volume/
margin stress on our customers.
However, the continuing focus on new products & new markets has helped
the Company offset the drop to a great extent. Actually almost one
third of the turnover is now from the new products introduced over the
last few years. This gives the confidence that a much wider product
portfolio will bring positive growth, when the growth cycle in these
end segments starts again. It is encouraging to see the sustained
gradual recovery in the Commercial Vehicles volumes since the middle of
Y2014, even though the total numbers are still significantly below the
peak reached in end Y2011.
MARKET DEVELOPMENT:
The successful localization and introduction of the high end DISAMATIC
& DISA MATCH Machines and also the whole new range of Shot Blasting
solutions from the Wheelabrator Group, now gives the Company a much
wider portfolio for the target market segments. The Company has seen
some good success in bringing our Special Shot Blasting Solutions for
the Construction Industry - with impressive customer list of Telcon,
L&T Case, Volvo, Caterpillar, Komatsu & JCB.
While your Company continues its marketing push through Exhibitions,
Seminars & Symposiums, we also arranged a very successful Customers'
Day in April'2015 at Tumkur Plant, to showcase some of the newest
products.
CORPORATE SOCIAL RESPONSIBILITY:
Your Company is committed to discharging its Corporate Social
Responsibility as a good corporate citizen
The Directors are pleased to report that your Company has taken steps
to comply with the requirements of the Companies Act, 2013 in this
connection.
The Composition of CSR Committee, details of the amounts to be spent
during the current financial period and the manner in which it was
spent are given in Annexure A.
RISK MANAGEMENT:
The Company has formulated a Risk Management Policy and a mechanism to
inform the Board Members about risk assessment and mitigation
procedures. Also undertakes periodical review to ensure that executive
management controls risks by means of a properly designed framework.
The Risk Management Committee is constituted with all the Directors on
the Board as members of the Committee. Mr. Robert E Joyce Jr. is the
Chairman of the Committee.
As an established practice, at each Meeting of the Board, the Directors
are updated on risks identification and steps taken to mitigate the
same. Risk Management Policy is hosted on the Company's website;
http://www.disagroup.com/pdf/DII__Risk_Management_Policy.pdf
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has a Whistle Blower Policy for vigil mechanism which is
available on website of the Company and there were no cases reported
during the last Period. http://www.disagroup.com/pdf/
DIL_Whistle_Blower_Policy.pdf
GROUP COMPANIES:
Persons constituting Group coming within the definition of "Group" as
defined in the Competition Act, 2002 include the following:
S. Name of the Company
No.
1. Naciron Holdings A/S (Denmark)
2. Naciron A/S (Denmark)
3. Norican Holdings ApS (Denmark)
4. Norican Group ApS (Denmark)
5. DISA Holding A/S (Denmark)
6. DISA Holding II A/S (Denmark)
7. DISA Management Services ApS (Denmark)
8. DISA Industries A/S (Denmark)
9. DISA Holding AG (Switzerland)
10. DISA Industrie AG (Switzerland)
11. Wheelabrator Group Holding GmbH (Germany)
12. Wheelabrator Group GmbH (Germany)
13. Wheelabrator OFT GmbH (Germany)
14. Wheelabrator Berger Stiftung GmbH (Germany)
15. DISA Industrienlagen GmbH (Germany)
16. WGH UK Holdings Ltd. (UK)
17. WGH UK Limited (UK)
18. Wheelabrator Technologies (UK) Ltd (UK)
19. Wheelabrator Group Limited (UK)
20. Surface Preparation (Gibraltar) Ltd
21. Wheelabrator Group SLU (Spain)
22. Wheelabrator Group NV (Belgium)
23. Wheelabrator Group SAS (France)
24. Matrasur Composites SAS (France)
25. Walter Trowal SARL (France)
26. Wheelabrator Schlick Sp. z o.o. (Poland)
27. Wheelabrator Czech s.r.o. (Czech Republic)
28. WGH Holding Corp. (BVI)
29. DISA Holding LLC (Michigan USA)
30. DISA Industries, Inc. (Illinois, USA)
31. WG Global LLC (Delaware, USA)
32. Wheelabrator Group, Inc. (Delaware, USA)
33. Castalloy, Inc. (Delaware, USA)
34. Wheelabrator Group (Canada) Ltd (Canada)
35. WG Plus de Mexico S de RL de CV (Mexico)
36. WG Plus Servicios S de R, L de CV (Mexico)
37. DISA K K (Japan)
38. Wheelabrator Group Limited (Hong Kong Branch)
39. DISA Machinery Limited (China)
40. DISA Trading (Shanghai) Co Limited (China)
41. DISA Technologies Private Limited (India)
DIRECTORS AND KMP:
In terms of the provisions of the Companies Act, 2013 and the Articles
of Association of the Company, Mr. Robert E Joyce Jr, Director, retires
by rotation at the forthcoming Annual General Meeting and is eligible
for reappointment.
During the period Mr. Mohan Subramaniam has been appointed as Chief
Financial Officer of the Company w.e.f. 8th May, 2014 and Mr. Ankit
Surana has been appointed as Company Secretary w.e.f. 24th April 2015.
Nomination and Remuneration Committee has been formed and policy on
appointment and remuneration of Directors and KMP is available on
website of the Company. http://www.disagroup.com/pdf/
DIL_Remuneration_Policy_of_DISA_India_Ltd.pdf
INDEPENDENT DIRECTORS
All Independent Directors have given declarations that they meet the
criteria of independence as laid down under Section 149(6) of the
Companies Act, 2013 and Clause 49 of the Listing Agreement.
During the period Mr. Jan Johansen, Non-Executive Independent Director
resigned from the office of Director w.e.f. 22nd December, 2014, due to
personal reasons and pre-occupation with other commitments. Mr. Shyamal
Kumar Sinha was appointed as Independent Director of the Company w.e.f.
from 23rd March, 2015.
More details on terms of appointment of Independent Directors and
details of familiarization efforts can be viewed on the website of the
Company at:
http://www.disagroup.com/pdf/
Terms_of_appt_of_Indp_Directors_March%202015.pdf
http://www.disagroup.com/pdf/
Familiarisation_program_for_Independent_Directors.pdf
MEETINGS OF THE BOARD OF DIRECTORS:
The Meetings of the Board are held at regular intervals with a time gap
of not more than 120 days between two consecutive Meetings. Additional
Meetings of the Board of Directors are held when necessary. During the
period under review six Board Meetings and five Audit Committee
Meetings were held.
The Agenda of the Meeting is circulated to the Directors in advance.
Minutes of the Meetings of the Board of Directors are circulated
amongst the Members of the Board for their perusal.
Nomination and Remuneration Committee has formulated a policy relating
to the remuneration of the Directors, KMPs and other employees and it
has been disclosed in Corporate Governance Report Annexure D.
BOARD EVALUATION:
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has established an annual performance
evaluation of its own performance and the Individual Directors
performance.The manner of evaluation has been explained in the
Corporate Governance Report.
DIRECTORS' RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134(5) of the Companies
Act, 2013 the Board hereby submit its responsibility Statement:-
(a) in the preparation of the annual accounts, the applicable
accounting standards have 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 period and of the profit and
loss of the Company for that period;
(c) The Directors have 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 have prepared the annual accounts on a going concern
basis; and
(e) The Directors, have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively
(f) The Directors have 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
The Company has an Internal Control System, commensurate with the size,
scale and complexity of its operations. 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 Audit function
reports to the Chairman of the Audit Committee of the Board. The
Internal Audit monitors and evaluates 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. Significant audit observations and
corrective actions thereon are presented to the Audit Committee of the
Board.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:
The Company does not have any Subsidiary, Joint Venture or Associate
Company.
DEPOSITS:
The Company has neither accepted nor renewed any deposits during the
period under review.
RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the
financial period were on an arm's length basis and were in the ordinary
course of business. 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 Related Party Transactions are placed before the Audit Committee as
also the Board for approval. Prior omnibus approval of the Audit
Committee is obtained on an 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 approval on a
quarterly basis.
The policy on Related Party Transactions as approved by the Board is on
the Company's website and the details of all related party transactions
are disclosed in the financials, refer Notes forming part of the
Financial Statements Sl.No.233.
None of the Directors has any pecuniary relationships or transactions
vis-a-vis the Company. http://www.disagroup.com/pdf/ DIL_RPT_Policy.pdf
MATERIAL CHANGES & COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE
COMPANY, BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE
REPORT:
There are no material changes and commitments between the end of the
Financial Period and the Date of the Report, which affect the financial
position of the Company.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR
SECURITY PROVIDED BY THE COMPANY:
The Company has not given any loan or guarantees covered under the
provisions of Section 186 of the Companies Act, 2013.
AUDITORS:
The Auditors, Messrs Deloitte Haskins & Sells, Chartered Accountants,
Bangalore, retire at the ensuing Annual General Meeting. The Company
has received a certificate under Section 141 of the Companies Act, 2013
from them stating that their appointment would be within the limits
specified therein.
COST AUDITORS:
Pursuant to Section 148 of the Companies Act, 2013 read with the
Companies (Cost Records and Audit) Amendment Rules, 2014, the cost
audit records maintained by the Company in respect of its activity is
required to be audited. Your Directors have, on the recommendation of
the Audit Committee, appointed Messrs Rao, Murthy & Associates,
Bangalore, to audit the cost accounts of the Company for the financial
period ended 31st March, 2015.
SECRETARIAL AUDIT:
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,
Bangalore, a Company Secretary in Practice to undertake the Secretarial
Audit of the Company. 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 Auditors of the Company and hence no
explanations provided.
Referring to the Secretarial Audit Report, the Company had initiated
action on recruitment of Company Secretary well in advance and since
the process of recruitment took longer time, the appointment was made
effective from 24th April, 2015.
CORPORATE GOVERNANCE
In compliance with the Listing Agreement with the Stock Exchange, 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
Auditors and periodically they have been reporting their findings of
systems, procedures and management practices.
A separate note on Corporate Governance is included in this Report as
Annexure C.
As required under Clause 49 of the Listing Agreement with Stock
Exchange, a report on Corporate Governance and a Certificate from
Mr.Vijayakrishna KT, Practicing Company Secretary, confirming
compliance with the requirements of Corporate Governance forms integral
part of this Report as Annexure D.
INDUSTRIAL RELATIONS:
Industrial relations have been cordial and constructive, which have
helped your Company to achieve production targets.
CONSERVATION OF ENERGY:
Your Company gives high priority for conservation of energy through
better supervision and training of employees to economize the usage of
electricity.
RESEARCH AND DEVELOPMENT, TECHNOLOGY, ABSORPTION, ADAPTATION &
INNOVATION:
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 Principals' factories and
design offices abroad for training and updating their skills.
FOREIGN EXCHANGE EARNINGS AND OUTFLOW:
The Company earned Rs 2,349 Lakhs (Rs 2,809 Lakhs) in foreign exchange
and expended Rs. 3,184 Lakhs (Rs 2,151 Lakhs) in foreign exchange
during the period under review.
EXTRACTS OF ANNUAL RETURN:
Extracts of Annual Return in Form No. MGT-9 is annexed as Annexure E.
MATERIAL ORDER PASSED BY ANY COURT OR REGULATOR OR TRIBUNALS IMPACTING
GOING CONCERN STATUS OF THE COMPANY:
No order was passed by any court or regulator or tribunal during the
period under review which impacts going concern status of the Company.
PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 read with Rule 5(1)
and (2) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 in respect of employees of the Company are given
in the Annexure F forming part of the Report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:
The Company has in place an Anti Sexual Harassment Policy 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.
There were no complaints received during the period of 2014-15.
ACKNOWLEDGEMENT:
The Directors place on record their appreciation for valuable
contribution made by employees at all levels, active support and
encouragement received from the Government of India, 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 future also.
For and on behalf of the Board of Directors
Place: Bangalore Deepa Hingorani Viraj Naidu
Date: 27th June, 2015 Director Managing Director
Dec 31, 2013
The Board of Directors has pleasure in presenting the 29th Annual
Report and Audited statement of Accounts for the year ended 31st
December, 2013 together with the Auditors'' Report.
FINANCIAL RESULTS
(Rs.in Crores)
Description 2013 2012
Sales & Service 1744 152.4
Profit before depreciation, tax &
financial charges 34.1 30.5
Less: Depreciation 3.8 3.2
Less-. Interest - 0.1
Less: Provision for taxation
(net of deferred tax) 10.8 8.4
PROFIT AFTER TAXATION 19.5 18.8
Add: Profit &. Loss account
Balance b/f 36.7 20.2
PROFIT AVAILABLE FOR APPROPRIATION 56.2 39
APPROPRIATION-.
Amount transferred to General
Reserves 2.0 1.9
Proposed Dividend & Tax thereon 0,4 0.4
Balance in Profit &. Loss Account 53.8 36.7
DIVIDEND
The continued recession and overall slowdown did impact the business of
your Company leading to shortfall in performance against Budget/
Target. However, your Company achieved better results with improved
bottom-line as compared to that of the previous year. Considering the
foreseeable future road map, your Board of Directors recommend a
Dividend of Rs.2.50 per equity shares of Rs.10 each (i.e 25%).
PERFORMANCE OF THE COMPANY
New Products and New Market Segments - aided by Increased Exports -
helped your Company to achieve its highest ever sales in Y2013 at
Rs.174 Crores. This 14% growth in sales could however get us only 11%
increase in EBITA, mainly due to significant mix shift from project
sales to standalone sales. Overall the project sales went down
marginally, but this was more than offset by the sales in standalone
machines spares.
Unlike last year, your Company started Y2014 with a lower Order Backlog
of Rs.72 Crores (as against Rs.105 Crores last year). Conversion of
some key high value enquiries in the first half of Y2014 will therefore
be crucial for the volumes this year.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The current manufacturing slowdown in India has been one of the longest
ever. If the manufacturing growth is sluggish, capacity additions stop
and the capital goods industry dips sharply. This is clearly reflected
in the adjacent graphs - the YoY Growth in Manufacturing IIP averages
just 0.9% for the 29 months period since July till Nov''i3.
Against this background, your Company has managed to hold and even grow
its sales. This was made possible, primarily because of the continuous
thrust on New Product Introductions and aggressive expansion into new
Market Segments.
Some of these new product introductions have actually come at the
expense of cannibalising direct imports from DISA Denmark to Indian
customers. On the other hand, the growth in Shot Blasting & Filters
Sales, is almost entirely due to sales push (and gain in market
penetration) into newer market segments, outside the traditional
foundry markets.
Even in the current slowdown, your Company has observed clear trends
towards increasing automation by Indian Foundries, mainly to address
the key challenges on - 1) Manpower availability for foundries, &. 2)
Increasing Expectations on Consistency of Castings Quality. Such
Upgrade Investments into automation, have continued unabated - quite
unlike the Greenfield Investments, which grew very fast during boom
times, but have slowed down currently.
In such markets, the Company''s long term focus on - Making the High End
Technology more affordable to Indian Foundries, through increasing
localization - has not only remained intact, but has got further
reinforced.
The successive IFEX Launches of our "Fully-Made-in-India" New
Technology Machines:
Y2007 Agra : New ARPA with Pneumatic Controls
Y2008 Chennai : DISA SAM-6 Power-Efficient Mixer, DISA Filters for Fume
& Dust Extraction
Y2010 Ahmadabad : DISA SAM-3 Power-Efficient Mixer
Y2011 Chandigarh : DISA-030 Vertical High Pressure Moulding Machine
Y2012 Bangalore : DISA Match-2024 Horizontal Flask less High Pressure
Moulding Machine
Wheelabrator MB-500S Metal Belt Tumblast Machine
Y2013 Kolkata : DISA Core-2oFP Multi-Parting Cold Box Core
Making Machine
Wheelabrator DS-i Manipulator Type Shot Blasting Machine
Y2014 Ahmadabad : DISA Match-2024 Horizontal Flaskless High Pressure
Moulding Machine - With AMH
Updated DISA Core-2oFP Multi-Parting Cold Box Core Making Machine
Such Continuing Innovation & Value Addition by DISA / Wheelabrator in
India, remains unmatched in the Industry ! With increasing focus of
global competitors in India, your Company has further enhanced its
marketing push with frequent Customer Symposiums and ongoing PR,
Your Company also completed another expansion of the Tumkur Plant by
1000 sqm, which is now operational since the beginning of Y2014. With
this expansion, the Company has now used up almost all available land
areas in Tumkur and Hosakote and any future expansion will therefore
have to come from a new site - which will be explored, once the markets
come out of the current slowdown phase.
To counter inflationary pressures, Management has initiated a range of
Focus Projects on Cost Reduction and Efficiency Improvement,
The Company has adequate internal control systems as part of the
Management Information System in place. Regular Audits are being
conducted on all fronts by the Statutory and Internal Auditors.
GROUP COMPANIES
Persons constituting Croup coming within the definition of "Croup" as
defined in the Monopolies and Restrictive Trade Practices Act, 1969
include the following:
S.
No. Name of the Company
1 Norican Holdings ApS (Denmark)
2 Norican Croup ApS (Denmark)
3 DISA Holding A/S (Denmark)
4 DISA Holding II A/S (Denmark)
5 DISA Holding AC (Switzerland)
6 DISA Holding LLC (Michigan USA)
7 DISA Industries A/S (Denmark)
8 DISA Industries AC (Switzerland)
9 DISA Industries, Inc. (Illinois, USA)
10 DISA Industries s.r.o. (Czech Republic)
11 DISA Industrienlagen CmbH (Germany)
12 DISA K K (Japan)
13 DISA Limited (Hong Kong)
14 DISA Machinery Limited (China)
15 DISA Trading (Shanghai) Co Limited (China)
16 DISA Technologies Private Limited (India)
17 Surface Preparation (Gibraltar) Ltd
18 WCH Holding Corp. (BVI)
19 WC Global LLC (Delaware, USA)
20 Wheelabrator Croup, Inc. (Delaware, USA)
21 Wheelabrator Group (Canada) Ltd, (Canada)
22 Castalloy, Inc. (Delaware, USA)
23 WCH UK Holdings Ltd. (UK)
24 WGH UK Limited (UK)
25 Wheelabrator Technologies (UK) Ltd (UK)
26 Wheelabrator Group SLU (Spain)
27 Wheelabrator Group Holding GmbH (Germany)
28 Wheelabrator Group GmbH (Germany)
29 Wheelabrator OFT GmbH (Germany)
30 Wheelabrator Group NV (Belgium)
31 Wheelabrator Group SAS (France)
32 Matrasur Composites SAS (France)
33 Wheelabrator Croup Limited (UK)
34 Wheelabrator Schlick Sp. z 0.0. (Poland)
35 WG Plus de Mexico S de RL de CV (Mexico)
36 DISA Management Services ApS (Denmark)
37 WG Plus Servicios S de R, L de CV (Mexico)
CORPORATE GOVERNANCE
In compliance with the Listing Agreement with the Stock Exchange, your
Board has adhered to the Corporate Governance Code. All the requisite
Committees are functioning in line with the guidelines and on
operational need basis.
As reported earlier, a reputed firm of independent Chartered
Accountants has been carrying out the responsibilities of Internal
Auditors and periodically they have been reporting their findings of
systems, procedures and management practices. A separate note on
Corporate Governance is included in this Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Your Directors confirm as follows:
(a) The Statement of Accounts has been prepared in conformity with
appropriate Accounting Standards.
(b) Accounting policies have been selected and consistently applied so
as to give a true and fair view of the financial statements. Change in
Accounting Policy and its impact on financial statements are disclosed
separately as required under relevant Accounting Standards.
(c) Internal controls are in place to provide reasonable assurance and
reliability of the accounting records and to safeguard the assets of
the Company and also to detect fraud and other irregularities, if any.
A reputed independent accounting firm acts as Internal Auditors of your
Company and they conduct regular audits.
(d) The Directors are satisfied that the Company has enough resources
to carry on business and therefore have finalized the accounts as a
''going concern.''
CONSERVATION OF ENERGY
Your Company gives high priority for conservation of energy through
better supervision and training of employees to economize the usage of
electricity.
RESEARCH AND DEVELOPMENT, TECHNOLOGY, ABSORPTION, ADAPTATION &
INNOVATION
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 Principals'' factories and
design offices abroad for training and updating their skills.
FOREIGN EXCHANGE EARNINGS AND OUTFLOW
The Company earned Rs.28.10 (Rs.24.0) Crores in foreign exchange and
expended Rs.21.5 (Rs.31.0) Crores in foreign exchange during the year
under review.
INDUSTRIAL RELATIONS
Industrial relations have been cordial and constructive, which have
helped your Company to achieve production targets.
PERSONNEL
Particulars of employees as required under Section 2i7(2A) of the
Companies Act, 1956, read with the Companies (Particulars of employees)
Rules, 1975 are given in the Annexure forming part of the Report.
There was no complaint lodged by any woman employee under Sexual
Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013, with the Company during the period under report.
DIRECTORS
In terms of the provisions of the Companies Act, 1956 and the Articles
of Association of the Company, Mr. Robert E Joyce Jr and Mr. Andrew
Carmichael, Directors, retire by rotation at the forthcoming Annual
General Meeting and are eligible for reappointment.
AUDITORS
The Auditors, Messrs Deloitte Haskins iL Sells, Chartered Accountants,
Bangalore, retire at the ensuing Annual General Meeting. The Company
has received a certificate under Section 224 -i(B) of the Companies
Act, 1956 from Messrs Deloitte Haskins &. Sells, Chartered Accountants,
Bangalore that their appointment would be within the limits specified
therein.
Your Directors recommend their appointment.
ACKNOWLEDGEMENT
The Directors place on record their appreciation for valuable
contribution made by employees at all levels, active support and
encouragement received from Government of India, 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
Place: Bangalore Deepa Hingorani Viraj Naidu
Date: 26.02.2014 Director Managing Director
Dec 31, 2012
The Board of Directors have pleasure in presenting the 28th Annual
Report and Audited statement of Accounts for the year ended 31st
December, 2012 together with the Auditors'' Report.
FINANCIAL RESULTS
(Rs.in ''000)
Description 2012 2011
Sales & Service 1,512,936 1,539,853
Profit before depreciation, tax &
financial charges 305,070 369,671
Less: Depreciation 32,132 21,935
Less: Interest 442 525
Less: Provision for taxation
(net of deferred tax) 84,119 120,553
PROFIT AFTER TAXATION 188,377 226,658
Add: Profit & Loss account Balance b/f 201,469 385,453
PROFIT AVAILABLE FOR APPROPRIATION 389,846 612,111
APPROPRIATION:
Amount transferred to General Reserves 18,837 59,602
Proposed Dividend & Tax thereon 4,388 351,040
Balance in Profit & Loss Account 366,621 201,469
DIVIDEND
In an overall low market in Y2012, your Company was still able to
retain its top line - mainly due to the successful introduction of some
major new products & markets, over the last few years. However,
inflation took an impact on the bottom-line. While the high opening
backlog for Y2013 gives a good sign of growth again - subject to the
Indian Markets recovering in Y2013 - the Company has also initiated
focus projects, for reducing costs & increasing efficiencies. Against
this background, the Board of Directors, recommend a dividend of
Rs.2.50/- per Equity Share of Rs.10.00/- each (i.e. 25%).
PERFORMANCE OF THE COMPANY
After the sharp recovery of the Indian Industry since the last quarter
Y2009, and subsequent acceleration in Y2010 & Y2011, the Company could
clearly see the slowdown hitting again from End Y2011. The major
customer segment - foundries - ran at a much lower capacity utilization
levels throughout Y2012 and this still continues in Q1-2013. The slump
across the entire Automotive sector - with severe drop in heavy trucks
- is very significant. Capital Goods Industry - like your Company -
normally drops sharply in such a market situation, mainly because the
fresh capacity expansions slow down very suddenly. However, with the
continued focus of the Norican Group (the parent entity of DISA &
Wheelabrator Groups worldwide) on New Product Introductions through
your local company, your Company could still hold our topline sales in
Y2012. Actually, throughout the year the Company had sluggish pick up
of ready equipment from the customers, which were pushed out finally in
the last quarter. Y2012 Revenues thus ended at Rs. 152 Crores, against
Rs.154 Crores of Y2011. Operating Profit declined from Rs.32 Crores in
Y2011 to Rs.27 Crores in Y2012 - mainly due to Inflation in Salaries &
Expenses. Any major Material Cost Inflation was however avoided by
product mix & control.
Success of the New Products / Markets focus is now evident in the fact
that your Company had the Record Highest Order Intake of Rs.192 Crores
in Y2012 - the previous highest was Rs.148 Crores in Y2011. Almost
1/3rd of the Order Intake is on account of New Products / Markets
introduced in the last 4-5 years. This also led to the Record Highest
Opening Order Backlog of Rs.105 Crores for Y2013 - up by nearly 60% on
the previous year''s opening backlog of Rs.66 Crores.
GROUP COMPANIES
Persons constituting Group coming within the definition of "Group" as
defined in the Monopolies and Restrictive Trade Practices Act, 1969
include the following:
S.No. Name of the Company
1 Norican Holdings ApS (Denmark)
2 Norican Group ApS (Denmark)
3 DISA Holding A/S (Denmark)
4 DISA Holding II A/S (Denmark)
5 DISA Holding AG (Switzerland)
6 DISA Holding LLC (Michigan USA)
7 DISA Industries A/S (Denmark)
8 DISA Industrie AG (Switzerland)
9 DISA Industries, Inc. (Illinois, USA)
10 DISA Industries s.r.o. (Czech Republic)
11 DISA Industrienlagen GmbH (Germany)
12 DISA K K (Japan)
13 DISA Limited (Hong Kong)
14 DISA Machinery Limited (China)
15 DISA Trading (Shanghai) Co Limited (China)
16 DISA Technologies Private Limited (India)
17 Surface Preparation (Gibraltar) Ltd
18 WGH Holding Corp. (BVI)
19 WG Global LLC (Delaware, USA)
20 Wheelabrator Group, Inc. (Delaware, USA)
21 Wheelabrator Group (Canada) Ltd, (Canada)
19 Castalloy, Inc. (Delaware, USA)
20 WGH UK Holdings Ltd. (UK)
21 WGH UK Limited (UK)
22 Wheelabrator Technologies (UK) Ltd (UK)
23 Wheelabrator Group SLU (Spain)
24 Wheelabrator Group Holding GmbH (Germany)
25 Wheelabrator Group GmbH (Germany)
26 Wheelabrator OFT GmbH (Germany)
27 Wheelabrator Group NV (Belgium)
28 Wheelabrator Group SAS (France)
29 Matrasur Composites SAS (France)
30 Wheelabrator Group Limited (UK)
31 Wheelabrator Schlick Sp. z o.o. (Poland)
32 WG Plus de Mexico S de RL de CV (Mexico)
33 DISA Management Services ApS (Denmark)
34 WG Plus Servicios S de R, L de CV (Mexico)
CORPORATE GOVERNANCE
In compliance with the Listing Agreement with the Stock Exchange, your
Board has adhered to the Corporate Governance Code. All the requisite
Committees are functioning in line with the guidelines and on
operational need basis.
As reported earlier, a reputed firm of independent Chartered
Accountants has been carrying out the responsibilities of Internal
Auditors and periodically they have been reporting their findings of
systems, procedures and management practices. A separate note on
Corporate Governance is included in this Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Your Directors confirm as follows:
(a) The Statement of Accounts has been prepared in conformity with
appropriate Accounting Standards.
(b) Accounting policies have been selected and consistently applied so
as to give a true and fair view of the financial statements. Change in
Accounting Policy and its impact on financial statements are disclosed
separately as required under relevant Accounting Standards.
(c) Internal controls are in place to provide reasonable assurance and
reliability of the accounting records and to safeguard the assets of
the Company and also to detect fraud and other irregularities, if any.
A reputed independent accounting firm acts as Internal Auditors of your
Company and they conduct regular audits.
(d) The Directors are satisfied that the Company has enough resources
to carry on business and therefore have finalized the accounts as a
''going concern.''
CONSERVATION OF ENERGY
Your Company gives high priority for conservation of energy through
better supervision and training of employees to economize the usage of
electricity.
RESEARCH AND DEVELOPMENT, TECHNOLOGY, ABSORPTION, ADAPTATION &
INNOVATION
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 Principals'' factories and
design offices abroad for training and updating their skills.
FOREIGN EXCHANGE EARNINGS AND OUTFLOW
The Company earned Rs.203.64 (Rs.160.34) Million in foreign exchange
and expended Rs.464.42 (Rs.175.88) Million in foreign exchange during
the year under review.
INDUSTRIAL RELATIONS
During the period, the earlier wage agreement with the worker''s union
expired and a new agreement for a further period of three years, to be
signed is under discussion.
PERSONNEL
Particulars of employees as required under Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of employees)
Rules 1975 are given in the Annexure forming part of the Report.
DIRECTORS
In terms of the provisions of the Companies Act, 1956 and the Articles
of Association of the Company, Ms.Deepa Hingorani and Mr.Jan Johansen,
both Independent Directors retire by rotation at the forthcoming Annual
General Meeting and are eligible for reappointment.
AUDITORS
Messrs M K Dandeker & Co., Chartered Accountants, Chennai, Auditors of
the Company retire at the end of forthcoming Annual General Meeting and
have decided not to seek appointment. Based on the recommendation of
the Audit Committee and in line with the provisions of the Companies
Act, 1956, the Board recommends the appointment of Messrs Deloitte
Haskins & Sells, Chartered Accountants, Bangalore as Auditors to hold
office up to the date of the next Annual General Meeting.
ACKNOWLEDGEMENT
The Directors place on record their 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
Place: Bangalore Deepa Hingorani Viraj Naidu
Date: 28.02.2013 Director Managing Director
Dec 31, 2011
The Board of Directors have pleasure in presenting the 27th Annual
Report and Audited statement of Accounts for the year ended 31st
December 2011 together with the Auditors' Report.
FINANCIAL RESULTS
(Rs.in 'ooo)
Description 2011 2010
Sales & Service 1,539,853 1,076,365
Profit before depreciation, tax
& financial charges 369,671 251,294
Less: Depreciation 21,935 18,009
Less: Interest 525 332
Less: Provision for taxation
(net of deferred tax) 120,553 81,92
PROFIT AFTER TAXATION 226,658 151,030
Add: Profit & Loss account Balance b/f 385453 234423
PROFIT AVAILABLE FOR APPROPRIATION 612,111 385453
APPROPRIATION:
Amount transferred to General Reserves 59,602 NIL
Proposed Dividend & Tax thereon 351,040 NIL
Balance in Profit & Loss Account 201,469 385453
DIVIDEND
After the severe market drop from End Y2008 till Mid Y2009, your
Company had been preserving cash as a precaution against any potential
double dip recession in the global economy and its extended effect on
the Company's business in India. However, in view of the sharp rise in
the Company's performance since Y2009, and also based on the good
initial market response for the new products being introduced by your
Company in recent years, there is improved business confidence now. The
Board of Directors, therefore, recommends an exceptional dividend of
Rs. 200 per equity share of Rs. 10 each (2000 ACU-).
PERFORMANCE OF THE COMPANY
The sharp recovery of the Indian Industry since the last quarter Y2009,
kept accelerating and almost peaked till the mid ofY20ii. This led to a
record order intake of about Rs.150 Crores by your Company during
Y2011. Your Company was also able to scale up its operations
substantially to meet with this high demand successfully.
Year-on-year Sales rose by 43 ACU-, while PBT rose by 49 ACU-. High
Inflation both Materials ACY- Salaries - has been a challenge for all
Indian companies in 2011, but your Company was able to offset the
inflation impact - at least in part - through Product Mix ACY-
Pricing.
A significant part of the Management efforts was to keep scaling up -
both in terms of internal output ACY- external vendor base development -
as demand remained high during the year. The success of these efforts
was evident with the very sharp rise in the last two quarters
performance.
CORPORATE GOVERNANCE
In compliance with the listing agreement with the Stock Exchange, your
Board has adhered to the Corporate Governance Code. All the requisite
Committees are functioning in line with the guidelines and on
operational need basis.
As reported earlier, a reputed firm of independent Chartered
Accountants has been carrying out the responsibilities of Internal
Auditors and periodically they have been reporting their findings of
systems, procedures and management practices. A separate note on
Corporate Governance is included in this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors confirm as follows:
(a) The Statement of Accounts has been prepared in conformity with
appropriate Accounting Standards.
(b) Accounting policies have been selected and consistently applied so
as to give a true and fair view of the financial statements Change in
Accounting Policy and its impact on financial statements are disclosed
separately as required under relevant Accounting Standards.
(c) Internal controls are in place to provide reasonable assurance and
reliability of the accounting records and to safeguard the assets of
the Company and also to detect fraud and other irregularities, if any.
A reputed independent accounting firm acts as Internal Auditors of your
Company and they conduct regular audits.
(d) The Directors are satisfied that the Company has enough resources
to carry on business and therefore have finalized the accounts as a
going concern.
CONSERVATION OF ENERGY
Your Company gives high priority for conservation of energy through
better supervision and training of employees to economize the usage of
electricity.
RESEARCH AND DEVELOPMENT. TECHNOLOGY, ABSORPTION, ADAPTATION ACY-
INNOVATION
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 Principals' factories and
design offices abroad for training and for updating their skills.
FOREIGN EXCHANGE EARNINGS AND OUTFLOW
The Company earned Rs.160.34 (Rs.1n.14l Million in foreign exchange and
expended Rs. 175.88 (Rs.97.06) Million in foreign exchange during the
year under review.
INDUSTRIAL RELATIONS
Industrial relations have been cordial and constructive, which have
helped your Company to achieve production targets.
PERSONNEL
Particulars of employees as required under Section 217I2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules 1975 are given in the Annexure forming part of the Report.
DIRECTORS
In terms of the provisions of the Companies Act, 1956 and the Articles
of Association of the Company, Mr. Sanjay Arte, retires by rotation at
the forthcoming Annual General Meeting and is eligible for
reappointment.
AUDITORS
The Auditors, Messrs. M. K. Dandeker ACY- Co., Chartered Accountants,
Chennai, retire at the ensuing Annual General Meeting. The Company has
received a certificate under Section 224 -i(B) of the Companies Act,
1956 from Messrs. M. K. Dandeker ACY- Co., Chartered Accountants, that
their appointment would be within the limits specified therein.
Your Directors recommend their appointment.
ACKNOWLEDGEMENT
The Directors place on record their appreciation for valuable
contribution made by employees at all levels, active support and
encouragement received from Government of India, Government of
Karnataka, Company's Bankers, Customers, Principals and Business
Associates.
Your Directors also recognize the continued support extended by all the
Shareholders and gratefully acknowledge with a firm belief that the
support and trust wi1l continue in the future also.
For and on behalf of the Board of Directors
Place: Bangalore Deepa Hingorani Viraj Naidu
Date: 29.02.2012 Director Managing Director
Dec 31, 2010
The Board of Directors have pleasure in presenting the 26th Annual
Report and Audited statement of Accounts for the year ended 31st
December 2010 together with the Auditors Report.
FINANCIAL RESULTS
(Rs.in 000)
Description 2010 2009
Sales & Service 1,076,365 712,929
Profit before depreciation, tax
& financial charges 251,294 175,205
Less: Depreciation 18,009 19.941
Less:Interest 332 2,416
Less: Provision for taxation
(net of deferred tax) 81,923 54,225
PROFIT AFTER TAXATION 151,030 98,623
Add: Profit & Loss account
Balance b/f 234,423 135,800
PROFIT AVAILABLE FOR APPROPRIATION 385,453 234,423
APPROPRIATION:
Proposed Dividend 8c Tax there on NIL NIL
Balance in Profit 8c Loss Account 385.453 234,423
DIVIDEND
Your Board has carefully reviewed the payout policy of the Company and
recalls kind attention of the shareholders to the Dividend record and
the bonus debentures issued and allotted out of Shareholders funds.
The Directors after careful consideration have opined that uncertain
business scenario with recent recession fresh in mind impacting the
profitability is not to be overlooked. It has now been established that
globally the best opportunity to invest surplus funds lies in India and
accordingly, your Company recognizing this fact is exploring suitable
opportunities towards this objective. Your Company sees multifold
growth opportunities in the coming times:
1. Growth of Indian Foundries, which will require more automation/
upgrades that the Company currently provides
2. Growth of Wheelabrator range of machines into new market segments
beyond foundries
3. Export of specific new products for which DISA India is now
identified as Global supplier
4. Growing the filters business more strongly into new application
segments
5. Strong opportunities for inorganic growth
These will provide major investment opportunities which will all lead
to shareholder value enhancements. Accordingly, the Directors do not
recommend Dividend for the year under report.
PERFORMANCE OF THE COMPANY
The recovery of the Indian Industry was evident by the last quarter of
2009 and during the whole of 2010, the Company saw industrial
confidence getting stronger.
A significant part of the Management effort was to ramp up resources,
as demand returned very fast during the year. The success of these
efforts was evident with the very sharp rise in the last two quarters
performance.
Fresh Order Intake was boosted up during the year and your Company
finished with the highest ever Annual Order Intake of Rs.122 Crores.
The year end Order Backlog was at a very healthy level of Rs.66 Crores,
with an equally strong enquiry book.
While overall topline grew 51%, PBDIT growth was at 43% only, mainly
due to some of the lower margin orders accepted during the slowdown
time. Your Company is now seeing cost inflation on major bought outs &.
also on salaries, as the demand for good talent is high.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
While the Global recovery is still sluggish, the Indian emergence from
the slowdown of 2009 has been quite dramatic. India has now emerged as
the Worlds 2nd Largest Foundry Producer and the trend seems to be
further getting reinforced.
DISAs major markets - Indian Foundries - are currently facing a major
demand boom, but against a background of severe crunch in availability
of labour 8c power. This is now driving a clear move of upgrading
towards High Productivity Automated High pressure Moulding Lines.
Additionally, with the Global Merger of the Wheelabrator Group with the
DISA Group in 2009, we now start focusing on Automotive & Steel
Processing Industries for the whole range of Surface Preparation
Equipment.
Your Company is well poised to capture a significant majority of these
opportunities, as it covers the whole range of technologies within the
DISA & Wheelabrator Groups.
The New DISAFLEX80, which was successfully commissioned during the
year, has expanded the range in the Horizontal Flask Lines Category.
Your Company also developed 8c installed the Automatic Mould Handling
(AMH) Systems in India, for the New range of Medium &. Large DISAMATCH
machines, which came from Denmark.
The Company also launched the First Made in India DISAMATIC Vertical
Moulding Machine - DISA 030 - which was very well received in the IFEX
in Feb2011. Your Company has already received two orders for this DISA
030 machine and is hopeful of a good response from the Indian Foundries
in the coming years.
The first machine (HB-l) from the Wheelabrator range was localised for
the Indian Non-Foundry markets and has been well received for many of
its novel features.
All these new product introductions 8c the continuing capacity upgrade
/ expansion trends by all Major Customers, lead to expect a good
revenue growth for the Company in Year 2011.
To match this growth potential, your Company has already started
further investments - since mid 2010 - into expansion of our
manufacturing equipment & facilities, at both the Tumkur &. Hosakote
Plants. During the year, the company increased its team strength
significantly and are continuing to do so.
While the growth engine in India seems quite strong now, the high
inflation and the Interest rate hikes have the potential to slow down
this growth. The high inflation is also likely to hit margins, with
major impact expected from steel price spikes.
The Company has adequate internal control systems as part of the
Management Information System in place. Regular Audits are being
conducted on all fronts by the Statutory and Internal Auditors.
GROUP COMPANIES
Persons constituting Croup coming within the definition of "Group" as
defined in the Monopolies and Restrictive Trade Practices Act, 1969
include the following:
SI.no Name of the Company
1 Norican Holdings ApS (Denmark)
2 Norican Group ApS (Denmark)
3 DISA Holding A/S (Denmark)
4 DISA Holding II A/S (Denmark)
5 DISA Holding AG (Switzerland)
6 DISA Holding Acquisition LLC (Michigan USA)
7 DISA Industries A/S (Denmark)
8 DISA Industries AG( Switzerland)
9 DISA Industries, Inc. (Illinois, USA)
10 DISA Industries s.r.o. (Czech Republic)
11 DISA K K (Japan)
12 DISA Machinery Limited (China)
13 DISA Trading (Shanghai) Co Limited (China)
14 DISA Technologies Private Limited (India)
15 WGH Holding Corp. (BVI)
16 WG Global LLC (Delaware, USA)
17 Wheelabrator Group, Inc. (Delaware, USA)
18 Wheelabrator Group (Canada) Ltd, (Canada)
19 Castalloy, Inc. (Delaware, USA)
20 WGH UK Holdings Ltd. (UK)
21 WGH UK Limited (UK)
22 Wheelabrator Technologies (UK) Ltd (UK)
23 Wheelabrator Group SLU (Spain)
24 Wheelabrator Group Holding GmbH (Germany)
25 Wheelabrator Group GmbH (Germany)
26 Wheelabrator Group SAS (France)
27 Matrasur Composites SAS (France)
28 Wheelabrator Group Limited (UK)
29 WG Plus de Mexico S de RL de CV (Mexico)
CORPORATE GOVERNANCE
In compliance with the listing agreement with the Stock Exchange, your
Board has adhered to the Corporate Governance Code. All the requisite
Committees are functioning in line with the guidelines and on
operational need basis.
As reported earlier, a reputed firm of independent Chartered
Accountants has been carrying out the responsibilities of Internal
Auditors and periodically they have been reporting their findings of
systems, procedures and management practices. A separate note on
Corporate Governance is included in this Report.
DIRECTORS RESPONSIBILITY STATEMENT
Your Directors confirm as follows:
(a) The Statement of Accounts has been prepared in conformity with
appropriate Accounting Standards.
(b) Accounting policies have been selected and consistently applied so
as to give a true and fair view of the financial statements. Change in
Accounting Policy and its impact on financial statements are disclosed
separately as required under relevant Accounting Standards.
(c) Internal controls are in place to provide reasonable assurance and
reliability of the accounting records and to safeguard the assets of
the Company and also to detect fraud and other irregularities, if any.
A reputed independent accounting firm acts as Internal Auditors of your
Company and they conduct regular audits.
(d) The Directors are satisfied that the Company has enough resources
to carry on business and therefore have finalized the accounts as a
going concern.
CONSERVATION OF ENERGY
Your Company gives high priority for conservation of energy through
better supervision and training of employees to economize the usage of
electricity.
RESEARCH AND DEVELOPMENT, TECHNOLOGY, ABSORPTION, ADAPTATION &
INNOVATION
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 Principals factories and
design offices abroad for training and updating their skills.
FOREIGN EXCHANGE EARNINGS AND OUTFLOW
The Company earned Rs. 111.14 (Rs.30.48) Million in foreign exchange
and expended Rs. 88.20 (Rs.63.45) Million in foreign exchange during
the year under review.
INDUSTRIAL RELATIONS
Industrial relations have been cordial and constructive, which have
helped your Company to achieve production targets.
PERSONNEL
Particulars of employees as required under Section 217UA) of the
Companies Act, 1956, read with the Companies (Particulars of employees)
Rules 1975 are given in the Annexure forming part of the Report.
DIRECTORS
In terms of the provisions of the Companies Act, 1956 and the Articles
of Association of the Company, Mr.Jan Johansen retires by rotation at
the forthcoming Annual General Meeting and is eligible for
reappointment.
AUDITORS
The Auditors, Messrs. M. K. Dandeker &. Co., Chartered Accountants,
Chennai, retire at the ensuing Annual General Meeting. The Company has
received a certificate under Section 224 -i(B) of the Companies Act,
1956 from Messrs. M. K. Dandeker &. Co., Chartered Accountants, Chennai
that their appointment would be within the limits specified therein.
Your Directors recommend their appointment.
ACKNOWLEDGEMENT
The Directors place on record their appreciation for valuable
contribution made by employees at all levels, active support and
encouragement received from Government of India, Government of
Karnataka, Companys Bankers, Customers, Principals and Business
Associates.
Your Directors also 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
Place: Bangalore Deepa Hingorani Viraj Naidu
Date: 25.02.2011 Director Managing Director
Dec 31, 2009
The Board of Directors have pleasure in presenting the 25th Annual
Report and Audited statement of Accounts for the year ended 31st
December 2009 together with the Auditors Report.
FINANCIAL RESULTS
(Rs.in 000)
Description 2009 2008
Sales & Service 712,929 859,288
Profit before depreciation, tax 175,205 205,757
& financial charges
Less: Depreciation 19,941 16,970
Less: Interest 2,416 5,595
Less: Provision for taxation
(net of deferred tax) 54,225 63,486
PROFIT AFTER TAXATION 98,623 119,706
Add: Profit & Loss account
Balance b/f 135,800 16,094
PROFIT AVAILABLE FOR
APPROPRIATION 234,423 135,800
Amount transferred to reserve NIL NIL
Balance carried to Profit &
Loss Account 234,423 135,800
DIVIDEND
Despite the recovery trend, the profitability achieved during the year
under report has been less than that of the previous year. Your
Directors felt it appropriate to conserve the cash resources and
therefore do not recommend any Dividend for the year.
PERFORMANCE OFTHE COMPANY
The year 2009 saw a wide fluctuation in the demand for your Companys
products and a significant part of the management challenge was to
match resources with the changing markets. While the first half of the
year was very low - continuing from Y2008s major slowdown of the
Indian Industry - the second half saw a recovery trend.
Fresh Order Intake was very low throughout the year; however, the last
quarter brought in significant order finalisations, which raised the
Companys order backlog to a reasonably healthy figure by the year end.
However, the recovery seen in the second half of the year could not
offset the huge drop seen in the first half. As such, compared to
Y2008, Sales in Y2009 went down 17%.
On the other hand, the Management actions on cost cutting - both on
Variable & Fixed Costs - are clearly reflected with Operating Profit
(PBDIT) going down 15% only.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Global Recession & its resulting slowdown in the Indian Industry
took away a major chunk of the demand in the first half of 2009.
Thankfully, the Indian market improved in the second half, thereby
fuelling the business confidence of most of the major customers. While
the Global recovery is still considered very slow and in some pockets
still doubtful, the full confidence is yet to be built up.
This external environment had strong impact on the Capital Equipment
Industry, as the Fresh Order Intake came down sharply. It was only
thanks to some high order intakes in the last quarter, that the Total
Order Intake in Y2009, for your Company, actually went up marginally to
Rs.73 Crores (against Rs.70 Crores in Y2008).
The decline was across all the Product Offerings - Moulding, Shot Blast
& Filters. Your Company saw a small growth in our Spares / Services
business, as the Company continued to focus on this area for increasing
penetration and the effect of increased installed base in the recent
years.
The New Flex 80 Flask Line was delivered in 2009 and will be
commissioned shortly. With this, the Company continues to make further
inroads in the High Pressure Moulding Lines using Horizontal Flask
system.
There have been significant learnings from the market upheavals of the
last two years. Focus on cost reduction & working capital improvement,
are higher than ever before, with significant improvements already
made.
The Company is now in a cautious ramping up of the resources again, so
as to leverage from the sharp recovery seen over the last few months.
The Company has adequate internal control systems as part of the
Management Information System in place. Regular Audits are being
conducted on all fronts by the Statutory and Internal Auditors.
GROUP COMPANIES
Persons constituting Group coming within the definition of "Group" as
defined in the Monopolies and Restrictive Trade Practices Act, 1969
include the following:
SI. no Name of the Company
1 DISA Holding A/S, Denmark
2 DISA Holding II A/S, Denmark
3 DISA Holding AG, Switzerland
4 DISA Holding Corporation, Oswego
5 DISA Industrianlagen GmbH, Germany
6 DISA Industries A/S, Denmark
7 DISA Industries AG, Switzerland
8 DISA Industries Oswego, USA
9 DISA Industries s.r.o., Czech Republic
10 DISA Industries UK Limited, UK
11 DISA K K.Japan
12 DISA Limited, Hong kong
13 DISA Machinery Limited, China
14 DISA Trading (Shanghai) Co Limited
15 DISA Technologies Private Limited, India
16 GF DISA England Limited, UK
17 WGH HOLDING GROUP (BVI)
18 WG GLOBAL LLC (Delaware)
19 WHEELABRATOR GROUP, INC (Delaware)
20 WHEELABRATOR GROUP (Canada) Inc, (Canada)
21 ISPC II LLC (Delaware)
22 ISPC II & Cie SCS (Luxembourg)
23 International Surface Preparation Company Sarl(Luxembourg)
24 WGH UK Holdings Ltd. (UK)
25 WGH UK Limited (UK)
26 Wheelabrator Technologies (UK) Ltd, UK
27 Wheelabrator Group SLU (Spain)
28 Wheelabrator Group Holding GmbH (Germany)
29 Wheelabrator Group SAS (France)
30 Wheelabrator Group NV (Belgium)
31 Blast Cleaning Techniques Ltd (UK)
32 Wheelabrator Group Limited, (UK)
33 Wheelabrator Group s.r.o. (Czech Republic)
34 Wheelabrator Group SRL (Romania)
CORPORATE GOVERNANCE
In compliance with the listing agreement with the Stock Exchange, your
Board has adhered to the Corporate Governance Code. All the requisite
Committees are functioning in line with the guidelines and on
operational need basis.
As reported earlier, a reputed firm of independent Chartered
Accountants has been carrying out the responsibilities of Internal
Auditors and periodically they have been reporting their findings of
systems, procedures and management practices. A separate note on
Corporate Governance is included in this Report.
DIRECTORS RESPONSIBILITY STATEMENT
Your Directors confirm as follows:
(a) The Statement of Accounts has been prepared in conformity with
appropriate Accounting Standards.
(b) Accounting policies have been selected and consistently applied so
as to give a true and fair view of the financial statements. Change in
Accounting Policy and its impact on financial statements are dis-
closed separately as required under relevant Account- ing Standards.
(c) Internal controls are in place to provide reasonable assurance and
reliability of the accounting records and to safeguard the assets of
the Company and also to detect fraud and other irregularities, if any.
A reputed independent accounting firm acts as Internal Auditors of your
Company and they conduct regular audits.
(d) The Directors are satisfied that the Company has enough resources
to carry on business and therefore have finalized the accounts as a
going concern.
CONSERVATION OF ENERGY
Your Company gives high priority for conservation of energy through
better supervision and training of employees to economize the usage of
electricity.
RESEARCH AND DEVELOPMENT, TECHNOLOGY, ABSORPTION, ADAPTATION &
INNOVATION
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 Principals factories and
design offices abroad for training and updating their skills.
FOREIGN EXCHANGE EARNINGS AND OUTFLOW
The Company earned Rs. 30.48 (Rs.51.3) Million in foreign exchange and
expended Rs. 63.45 (Rs.300.14) Million in foreign exchange during the
year under review.
INDUSTRIAL RELATIONS
During the period, the earlier wage agreement with the workers union
expired and a new agreement for a further period of three years, to be
signed is under discussion.
Industrial relations have been cordial and constructive, which have
helped your Company to achieve production targets.
PERSONNEL
Particulars of employees as required under Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of employees)
Rules 1975 are given in the Annexure forming part of the Report.
DIRECTORS
During the year under review, Mr. Kent Arentoft and Mr. Lars
Christensen resigned as Chairman and Director respectively, due to
personal reasons. Your Board places on record its deep appreciation on
the yeomen services rendered by Mr. Kent Arentoft and Mr. Lars
Christensen. Mr.Viraj Naidu was re-designated as Managing Director
with effect from 1st Jan 2010 and his terms were altered within the
limits of Schedule XIII to the Companies Act, 1956, as already approved
by the Shareholders.
In terms of the provisions of the Companies Act, 1956 and the Articles
of Association of the Company, Ms.Deepa Hingorani, and Mr. Sanjay Arte
retire by rotation at the forthcoming Annual General Meeting and are
eligible for reappointment.
AUDITORS
The Auditors, Messrs. M. K. Dandeker & Co., Chartered Accountants,
Chennai, retire at the ensuing Annual General Meeting. The Company has
received a certificate under Section 224 -1 (B) of the Companies Act,
1956 from Messrs. M. K. Dandeker & Co., Chartered Accountants, Chennai
that their appointment would be within the limits specified therein.
Your Directors recommend their appointment.
ACKNOWLEDGEMENT
The Directors place on record their appreciation for valu- able
contribution made by employees at all levels, active support and
encouragement received from Government of India, Government of
Karnataka, Companys Bankers, Customers, Principals and Business
Associates.
Your Directors also recognize the continued support ex- tended 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
Place: Bangalore Deepa Hingorani Viraj Naidu
Date: 26.02.2010 Director Managing Director