TO THE SHAREHOLDERS
Your Directors have pleasure in presenting the Thirty Fifth (35th) Directors' Report ofyour Company along with the financial statements for the Financial Year ended 31st March2017.
1. OPERATING RESULTS
Certain key aspects of your Company's performance during the Financial Year ended 31stMarch 2017 as compared to the previous Financial Year are summarised below:
( Rs. in 000)
| ||Standalone ||Consolidated |
|Particulars ||Year Ended ||Year Ended |
| ||31.03.2017 ||31.03.2016 ||31.03.2017 ||31.03.2016 |
|Income for the year ||183428.61 ||173678.98 ||610118.51 ||557600.07 |
|Profit before Interest Depreciation and Tax ||3922.96 ||3568.20 ||23380.09 ||16799.44 |
|Finance Charges ||6389.43 ||3927.49 ||32045.67 ||28180.46 |
|Profit before Depreciation and Taxes ||(2466.47) ||(359.30) ||(8665.58) ||(11381.01) |
|Depreciation & Amortization ||5209.92 ||4087.53 ||18959.49 ||15442.36 |
|Provisions for Taxation/ Deferred Tax ||1811.06 ||(421.25) ||7101.67 ||12887.34 |
|Prior Period Items / Exceptional Items ||85.27 ||(628.48) ||195.63 ||28462.91 |
|Minority Interest & Profit from Associate Company ||- ||- ||- ||- |
|Net Profit for the Current Year ||(9572.72) ||(3397.09) ||(34922.36) ||(68173.62) |
|Earlier Years Balance Brought Forward ||(56405.71) ||(53584.25) ||(29481.66) ||38116.33 |
|Net Profit available for Appropriation ||575.63 ||575.63 ||933.17 ||575.63 |
|Transfer to/from General Reserves ||- ||- ||- ||- |
|Balance carried to Balance Sheet ||(65402.80) ||(56405.71) ||(63470.85) ||(29481.66) |
The Directors do not recommend any dividend for the Financial Year ended 31st March2017.
3. SHARE CAPITAL
During the year under review there was no change in the Company's share capital.
The Paid up Capital of the Company is Rs. 64710140/- comprising of 6471014 EquityShares of Rs. 10/- each.
4. OVERVIEW OF OPERATIONS:
During the year under review on a consolidated basis your Company recorded a totalincome of Rs. 610118.51 (000) as compared to last year's income of Rs. 557600.07(000) and net loss of Rs. 34922.36 (000) as compared to last year's net lossof Rs. 68173.62 (000). For further information kindly refer to ManagementDiscussion and Analysis Report forming part of this Annual Report.
5. EXTRACT OF ANNUAL RETURN
The Extract of Annual Return as provided under Section 92(3) of the Companies Act 2013(the Act) and as prescribed in Form No. MGT-9 of the Companies (Management andAdministration) Rules 2014 is appended as Annexure I to this Annual Report.
6. NUMBER OF MEETINGS OF THE BOARD
The Board met Four (4) times in Financial Year 2016-17 viz. on 12th May 2016 10thAugust 2016 10th November 2016 and 10th February 2017.
7. DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors hereby confirm that: i. In the preparation of the annual accounts forFinancial Year ended 31st March 2017 the applicable accounting Standards have beenfollowed along with proper explanation relating to material departures; ii. The Directorhave selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at 31st March 2017 and of the loss of the Company forthat period. iii. The Directors have taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of this Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities. iv. The Directors have prepared the annual accounts for Financial Yearended 31st March 2017 on a going concern' basis. v. The Directors have laid downinternal financial controls to be followed by the Company and that such internal financialcontrols are adequate and have been operating efficiently. vi. The Directors have devisedproper systems to ensure compliance with provisions of all applicable laws and that suchsystems were adequate and operating effectively.
8. DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors of the Company have submitted the declaration of Independenceas required under
Section 149(7) of the Act confirming that they meet the criteria of independence underSection 149(6) of the Act and Regulation 16 of the Securities Exchange Board of India(Listing Obligations and Disclosures Requirements) Regulations 2015 (ListingRegulations).
9. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Policy of the Company on Directors' appointment and remuneration including criteriafor determining qualifications positive attributes independence of a Director and othermatters provided under sub-section (3) of
Section 178 of the Act is appended as Annexure II to this Annual Report.
10. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT
The details of Loans Guarantees and Investments covered under the provisions ofSection 186 of the Act are given in the notes to the Financial Statements.
11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the Financial Year 2016-17 your Company has entered into transactions withrelated parties as defined under Section 2(76) of the Act read with the Companies(Specification and Definitions Details) Rules 2014 in accordance with the provisions ofthe Act Rules issued thereunder and Regulation 23 of the Listing Regulations.
During the Financial Year 2016-17 the Company has not entered into transactions withrelated parties which qualify as material transactions under Listing Regulations. The FormAOC- 2 pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) of the Companies(Accounts) Rules 2014 is set out as Annexure III to this Annual Report. Thedetails of related party transactions as required under AS-18 are set out in notes toaccounts to the Standalone Financial Statements forming part of this Annual Report.
The Policy on Related Party Transactions may be accessed on the Company's website atthe link: http://www.deltamagnetsgroup.com/dml/downloads/policies/Related-Party-Transaction-Policy.pdf.
12. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the Financial Year of the Company towhich the financial statements relate and the date of the report.
13. PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO
The particulars in respect of conservation of energy technology absorption and foreignexchange earnings and outgo as required under Section 134(3)(m) of the Act read with theCompanies (Accounts) Rules 2014 is given in Annexure IV to this Annual Report.
14. BUSINESS RISK MANAGEMENT
The Board of Directors of the Company have constituted a Risk Management Committee toframe implement and monitor the risk management plan for the Company.
The Company has a robust Risk Management framework to identify evaluate business risksand opportunities. This framework seeks to create transparency minimize adverse impact onthe business objectives and enhance the Company's competitive advantage.
The business risk framework defines the risk identification and its management approachacross the enterprise at various levels including documentation and reporting. Theframework helps in identifying risks trend exposure and potential impact analysis on aCompany's business.
15. VIGIL MECHANISM
The Company has adopted a Vigil Mechanism Policy for directors and employees to reportgenuine concerns and to provide for adequate safeguards against victimization of personswho may use such mechanism. The said policy is posted on the Company's websitewww.deltamagnets.com
16. ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD
Pursuant to the provisions of the Act and Regulation 19 of the Listing Regulations theBoard has carried out an annual evaluation of its own performance performance of theDirectors as well as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee has defined the evaluation criteria for theBoard its Committees and Directors.
The Board's functioning was evaluated after taking inputs from the Directors on variousaspects including inter alia degree of fulfillment of key responsibilities Boardstructure and composition establishment and delineation of responsibilities to variousCommittees effectiveness of Board processes information and functioning.
The Committees of the Board were evaluated after taking inputs from the CommitteeMembers on the basis of criteria such as degree of fulfillment of key responsibilitiesadequacy of Committee composition and effectiveness of meetings.
The Board and the Nomination and Remuneration Committee reviewed the performance of theindividual directors on aspects such as attendance and contribution at Board/ CommitteeMeetings and guidance/support to the management outside Board/ Committee Meetings. Inaddition the Chairman was also evaluated on key aspects of his role including settingthe strategic agenda of the Board encouraging active engagement by all Board Members.
The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the Director being evaluated. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors who alsoreviewed the performance of the Board as a whole.
In a separate meeting of Independent Directors performance of Non-IndependentDirectors performance of the board as a whole and performance of the chairman wasevaluated taking into account the views of Executive directors and Non-Executivedirectors.
17. SUBSIDIARY COMPANIES
Your Company as on 31st March 2017 has 2 direct subsidiaries and 1 step downsubsidiary. During the year under review Pilamec Ltd. UK has become step down subsidiaryof the company. During the year under review no company has become joint venture orassociate company.
During the year the Board of Directors reviewed the affairs of the subsidiaries. Inaccordance with Section 129(3) of the Act the Company has prepared consolidated financialstatements of the Company and all its subsidiaries which form part of the Annual Report.A report on the performance and financial position of each of the subsidiaries associatesand joint venture companies as per the Act is provided as Annexure A to theconsolidated financial statement and hence not repeated here for the sake of brevity.
In accordance with Section 136 of the Act the audited financial statements includingthe consolidated financial statements and related information of the Company and auditedaccounts of each of its subsidiary are available on Company's websitewww.deltamagnets.com. These documents will also be available for inspection duringbusiness hours at our Registered Office of the Company.
Further the Company has 1 material non-listed Indian subsidiary as defined underRegulation 16 (1)(c) of the Listing Regulations.
The Policy for determining material subsidiaries as approved may be accessed on theCompany's website at the link:http://www.deltamagnetsgroup.com/dml/downloads/policies/Policy-for-Determining-Material-Subsidiaries.pdf.
18. DETAILS RELATING TO DEPOSITS COVERED UNDER CHAPTER V OF THE ACT
During the year under review the Company has not accepted any deposit from the public.
19. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.
20. INTERNAL CONTROL WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has in place adequate internal financial control with reference tofinancial statements. The Company has adopted accounting policies which are in line withthe Accounting Standards prescribed in the Companies (Accounting Standards) Rules 2006that continue to apply under Section 133 and other applicable provisions if any of theAct read with Rule 7 of the Companies (Accounts) Rules 2014 and relevant provisions ofthe Act to the extent applicable. These are in accordance with generally acceptedaccounting principles in India.
The Company in preparing its financial statements makes judgments and estimates basedon sound policies and uses external agencies to verify/validate them as and whenappropriate. The basis of such judgments and estimates are also approved by the StatutoryAuditors and Audit Committee.
The Internal Auditor evaluates the efficacy and adequacy of internal control systemaccounting procedures and policies adopted by the Company for efficient conduct of itsbusiness adherence to Company's policies safeguarding of Company's assets preventionand detection of frauds and errors and timely preparation of reliable financialinformation etc. Based on the report of internal audit function process owners undertakecorrective action in their respective areas and thereby strengthen the controls.Significant audit observations and corrective actions thereon are presented to the AuditCommittee of the Board.
21. DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the Articles of Association of the Company and the provisions of theSection 152(6)(e) of the Act Mr. Darius Khambatta (DIN: 00520338) Director of theCompany will retire by rotation at the ensuing Annual General Meeting (AGM) and beingeligible offers himself for re-appointment.
The Board of Directors of the Company at its meeting held on 11th August 2017subject approval of Members at AGM re-appointed Dr. Ram H. Shroff (DIN: 00004865) asManaging Director and Executive Vice Chairman of the Company for a further term of Five(5) years commencing from 01st October 2017 to 30th September 2022. Members arerequested to refer Item N. 4 of the Notice of the AGM and the explanatory statement forthe terms of re-appointment and remuneration of Dr. Ram H. Shroff.
1. Statutory Auditor
The Board of Directors recommends ratification of appointment of M/s. Amit Desai &Co. Chartered Accountants
(Firm Registration No.: 130710W) who were appointed as Statutory Auditors of theCompany at AGM held on 25th September 2014 to hold office from the conclusion of 32nd AGMtill the conclusion of 36th AGM subject to ratification of their appointment at everyAGM. The Board of Directors of the Company at its meeting held on 17th May 2017recommended to Members of the Company ratification of appointment of M/s. Amit Desai &Co
Chartered Accountants as the Statutory Auditors of the Company for Financial Year2017-2018.
Your Company has received a letter from M/s. Amit Desai & Co. to the effect thattheir re-appointment if made would be under the second and third proviso to Section 139(1) of the Act and that they are not disqualified within the meaning of Section 141 of theAct read with Rule 4(1) of the Companies (Audit and Auditors) Rules 2014.
Statutory Auditor's Emphasis on Matter and Managements Reply
(a) As regard Auditors observation with respect to utilization of MAT creditentitlement of Rs. 2868.00 (000) as per management future business projectionssuch credit will be fully utilized within the stipulated period.
2. Secretarial Auditor
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors of the Companyhad appointed M/s. A. K. Jain & Co. Company Secretaries in Practice to undertake theSecretarial Audit of the Company for the year ended 31st March 2017. The SecretarialAudit Report is annexed as Annexure V to this Annual Report.
There are no qualifications reservations or adverse remarks or disclaimers made bySecretarial Auditor of the
Company in his secretarial audit report.
23. CORPORATE GOVERNANCE
Pursuant to Listing Regulations the Management Discussion & Analysis Report andCorporate Governance Report together with Certificate from Practicing Company Secretaryon compliance with the conditions of Corporate
Governance as laid down forms part of this Annual Report.
24. AUDIT COMMITTEE OF THE COMPANY:
The Company's Audit Committee comprises the following Directors:
1. Mr. Rajesh Jaggi (Chairman);
2. Dr. Ram H. Shroff;
3. Mr. Javed Tapia;
4. Dr. Vrajesh Udani
The composition of the Audit Committee is in compliance with the requirements ofSection 177 of the Act and Regulation 18 of the Listing Regulations.
25. PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of the employees drawing remuneration inexcess of the limits set out in the said rules and disclosures pertaining to remunerationand other details as required under Section 197(12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are providedin Annexure VI to this Annual
Your Directors express their sincere appreciation of the co-operation received fromshareholders bankers and other business constituents during the year under review. YourDirectors also wish to place on record their deep sense of appreciation for the commitmentdisplayed by all executives officers and staff resulting in the successful performanceof the Company during the year.
| ||For and on behalf of the Board of Directors |
| ||JAYDEV MODY |
| ||Chairman |
|Mumbai 11th August 2017 ||DIN: 00234797 |
|Registered Office: || |
|B-87 MIDC Ambad || |
|Nashik-422 010 Maharashtra. || |
|CIN : L32109MH1982PLC028280 || |
|Email ID : email@example.com || |
|Website : www.deltamagnets.com || |
|Tel No : 91-253-2382238 || |
|Fax No : 91-253-2382926 || |