TO THE SHAREHOLDERS
Your Directors have pleasure in presenting the Thirty Seventh (37th) Directors' Reportof your Company along with the financial statements for the Financial Year ended 31 stMarch 2019.
1. FINANCIAL SUMMARY AND HIGHLIGHTS
Certain key aspects of your Company's performance during the Financial Year ended 31stMarch 2019 as compared to the previous Financial Year are summarised below:
| || || |
(Rs. in 000)
|Particulars ||Standalone Year Ended ||Consolidated Year Ended |
| ||31.03.2019 ||31.03.2018 ||31.03.2019 ||31.03.2018 |
|Income for the year ||264526.72 ||249185.42 ||794522.52 ||734694.11 |
|Profit before Interest Depreciation and Tax ||29388.53 ||21077.82 ||24379.65 ||42886.47 |
|Finance Charges ||17736.59 ||14847.12 ||45269.34 ||48346.79 |
|Profit before Depreciation and Taxes ||11651.94 ||6230.70 ||(20889.69) ||(5460.32) |
|Depreciation & Amortization ||7891.23 ||8082.20 ||21688.27 ||22173.52 |
|Provisions for Taxation/ Deferred Tax ||(728.17) ||(2436.36) ||811.59 ||6785.53 |
|Net Profit for the Current Year ||4488.88 ||584.86 ||(43389.55) ||(34419.37) |
|Earlier Years Balance Brought Forward ||48725.14 ||46938.53 ||4534.48 ||35746.16 |
|Net Profit available for Appropriation ||53214.02 ||47523.39 ||(38855.06) ||3166.11 |
|Appropriation: || || || || |
|Other Comprehensive Income ||653.63 ||1201.75 ||680.84 ||1368.37 |
|Transfer to/from Reserves ||- ||- ||- ||- |
|Balance carried to Balance Sheet ||53867.66 ||48725.14 ||(38174.23) ||4534.48 |
The Standalone Gross Revenue from operations for financial year 2018-19 was Rs.250324.11 Thousand (Previous Year: Rs. 238346.76 Thousand). The Operating Profitbefore tax stood atRs. 3760.72 Thousand as against loss of Rs. 1851.50 Thousandin the Previous Year. The Net Profit after tax for the year stood at Rs. 4488.89 Thousandagainst Rs. 584.86 Thousand reported in the Previous Year.
The Consolidated Gross Revenue from operations for financial Rs. 792024.64 Thousand(Previous year 2018 Year: Rs. 726014.30 Thousand) The Consolidated Operating Profitbefore tax stood (for continued operations) at Rs. (42577.96) Thousand (Previous Year:Rs. (27633.83) Thousand). The Consolidated Profit Rs. (43389.55)after tax stoodThousand(Previous Year: Rs. (32580.05) Thousand).
The Directors do not recommend any dividend for the Financial Year ended 31st March2019.
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. 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 Report and is alsoavailable on the Company's website www.deltamagnets.com.
5. NUMBER OF MEETINGS OF THE BOARD
The Board met Five (5) times in Financial Year 2018-19 viz. on 18th May 2018 10thAugust 2018 19th September 2018 02nd November 2018 and 08th February 2019. Theparticulars of meetings held and attended by each Director are detailed in the CorporateGovernance Report which forms part of this Annual Report.
6. DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors hereby confirm that: i. In the preparation of the annual accounts forFinancial Year ended 31st March 2019 the applicable accounting standards have beenfollowed along with proper explanation relating to material departures; ii. The Directorshave 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 2019 and of the profit 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 2019 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.
7. DECLARATION BY INDEPENDENT DIRECTOR
The Independent Directors of the Company have submitted the declaration of Independenceas required under Section 149(7) of the Act and Regulation 25(8) of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 (Listing Regulations) confirming that they meet the criteria of independence underSection 149(6) of the Act and Regulation 16 (1)(b) of Listing Regulations as amended fromtime to time. The Independent Directors have also confirmed that they have complied withthe Company's Code of Business Conduct & Ethics.
8. 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 and Regulation 19 ofListing Regulations is appended as Annexure II to this Report.
9. 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 read with Companies (Meetings of Board and Its Powers) Rules 2014are given in the notes to the Financial Statements forming part of this Annual Report.
10. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the Financial Year 2018-19 your Company has entered into transactions withrelated parties as defined under Section 2(76) of the Act Rules made thereunder andRegulation 23 of the Listing Regulations. During the Financial Year 2018-19 the Companyhas not entered into transactions with related parties which qualify as materialtransactions as per Listing Regulations. The Form AOC - 2 pursuant to Section 134 (3)(h)of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014 is appended as AnnexureIII to this Report.
The details of related party transactions as required under IND AS-24 are set out innotes to accounts to the Standalone Financial Statements forming part of this AnnualReport. The Policy on Related Party Transactions may be accessed on the Company's websiteat the link:http://www.deltamagnetsgroup.com/dml/downloads/policies/Related-Party-Transaction-Policy.pdf.
11. 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 this Report.
12. 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 appended as Annexure IV to this Report.
13. BUSINESS RISK MANAGEMENT
The Board of Directors of the Company has constituted a Risk Management Committee toframe implement and monitor the risk management plan for the Company. The Company has arobust Risk Management framework to identify evaluate business risks and opportunities.This framework seeks to create transparency minimize adverse impact on the businessobjectives 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.
14. VIGIL MECHANISM
The Company has adopted Vigil Mechanism and Whistle Blower Policy for Directors andEmployees in compliance with the provisions of Section 177(10) of the Act and Regulation22 of the Listing Regulations to report genuine concerns and to provide for adequatesafeguards against victimization of persons who may use such mechanism. During the year nopersonnel of the Company was denied access to the Audit Committee. The said policy is alsoavailable on the Company's website www.deltamagnets.com.
15. 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 performance of the Board its Committees andIndividual Directors.
The Nomination and Remuneration Committee has defined the evaluation criteria for theBoard its Committees and Individual Directors. The Board's functioning was evaluatedafter taking inputs from the Directors on various aspects including inter alia degree offulfillment of key responsibilities Board structure and composition establishment anddelineation of responsibilities to various Committees effectiveness of Board processesinformation 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. Theperformance evaluation of the Independent Directors was carried out by the entire Boardexcluding the Director being evaluated. The performance evaluation of the Chairman and theNon-Independent Directors was carried out by the Independent Directors who also reviewedthe 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.
16. SUBSIDIARY JOINT VENTURE AND ASSOCIATE COMPANIES
During the year under review no company has become or ceased to be subsidiary jointventure and associate 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 associateand joint venture company as per the Act and Rules made thereunder is provided in thefinancial 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 subsidiaries are available on Company's websitewww.deltamagnets.com. These documents will also be available for inspection during workinghours at our Registered Office of the Company.
Further the Company has material Indian subsidiary as defined under Regulation16(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.
17. DETAILS RELATING TO DEPOSITS COVERED UNDER CHAPTER V OF THE ACT
The Company has neither accepted nor renewed any deposits during the Financial Year2018-19 in terms of Chapter V of the Act.
18. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS materialorders Therearenosignificant passed by the Regulators/Courts which would impact the goingconcern status of the Company and its future operations.
19. 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 Indian Accounting Standards notified under Section 133 and other applicableprovisions if any of the Act read together with the Companies (Indian AccountingStandards) Rules 2015.
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.
20. DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Section 152(6)(e) of the Act Dr. Ram H.Shroff will retire by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment.
Pursuant to recommendation of the Nomination and Remuneration Committee and subject toapproval of members at ensuing Annual General Meeting Mr. Rajesh Jaggi Mr. Javed TapiaDr. Vrajesh Udani and Mr. Samir Chinai will be re-appointed as an Independent Directors onthe Board of Directors of the Company in accordance with Section 149(4) of the Act witheffect from 04th August 2019 to hold office for a 2 nd term of 5 (five) consecutiveyears. Further pursuant to recommendation of the Nomination and Remuneration Committeeand subject to approval of members at forthcoming Annual General Meeting Mr. DariusKhambatta will be appointed as an Independent Director on the Board of Directors of theCompany in accordance with Section 149(4) of the Act with effect from conclusion ofensuing Annual General Meeting to hold office for period of 5 (five) consecutive years.
1. Statutory Auditor
M/s. M.H.S & Associates Chartered Accountants (Firm Registration No: 141079W) wereappointed as Statutory Auditors of the Company at 36th Annual General Meeting till theconclusion of 41st Annual General Meeting.
Your Company has received a confirmation from M/s. M.H.S & Associates CharteredAccountants (Firm Registration No: 141079W) to the effect that they are not disqualifiedwithin the meaning of Section 141 and other applicable provisions of the Act and Rulesmade thereunder.
Statutory Auditor's Emphasis on Matter and Managements Reply
As regard Auditors observation with respect to utilization of MAT credit entitlement ofRs. 5108.73 (000) on Standalone basis and Rs. 7976.72 (000) on Consolidatedbasis as per management future business projections such credit will be fully utilizedwithin 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 Companyhave appointed M/s. A. K. Jain & Co. Company Secretaries in Practice to undertake theSecretarial Audit of the Company for the year ended 31st March 2019. The SecretarialAudit Report is appended as Annexure V to this Report.
There are no qualifications reservations or adverse remarks or disclaimers made bySecretarial Auditor of the Company.
22. REPORTING OF FRAUDS
There was no instance of fraud during the year under review which required theStatutory Auditor and Secretarial Auditor to report to the Audit Committee and / or Boardunder Section 143(12) of Act and Rules framed thereunder.
23. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As per Regulation 34(2) read with Schedule V of the Listing Regulations Management andDiscussion and Analysis Report is provided in a separate section and forms an integralpart of this Annual Report.
24. CORPORATE GOVERNANCE
As per Regulation 34(3) read with Schedule V of the Listing Regulations a separatesection on corporate governance practices followed by the Company together certificatefromthe practicing Company with Secretary confirming compliance with the conditions ofCorporate Governance forms an integral part of this Annual Report.
25. AUDIT COMMITTEE OF THE COMPANY
The Audit Committee of the Company comprises of the following Directors:
1. Mr. Rajesh Jaggi (Chairman);
2. Mr. Javed Tapia;
3. Dr. Ram H. Shroff and
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.
26. PARTICULARS OF EMPLOYEES
A statement comprising the names of top 10 employees in terms of remuneration drawn andevery persons employed throughout the year who were in receipt of remuneration in termsof Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is not being sent alongwith this annual report to the members of the Companyin line with the provisions of Section 136 of the Act. Members who are interested inobtaining these particulars may write to the Company Secretary at the Registered Office ofthe Company.
The disclosures in terms of the provisions of Section 197(12) of the Act read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are provided in Annexure VI to this Report.
27. COMPLIANCE OF THE SECRETARIAL STANDARDS
During the financial year the Company has complied with the applicable SecretarialStandards i.e SS-1 and SS-2 as issued by the Institute of the Company Secretaries ofIndia.
28. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has complied with the provisions relating to constitution of InternalComplaints Committee and has Anti-Sexual Harassment policy pursuant to the provisions ofThe Sexual Harassment of Woman at Workplace (Prevention Prohibition & Redressal) Act2013. The Company has Anti-Sexual Harassment policy pursuant to the provisions of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
The Company did not receive any such complaints during the financial year 2018-19.
29. SCHEME OF AMALGAMATION
The Company as per the order of the National Company Law Tribunal Mumbai Bench(NCLT') dated 15th March 2019 had convened a meeting of the members on 22nd April2019 wherein the members have approved the scheme of amalgamation of Arrow TextilesLimited (First Transferor Company') and MMG India Private Limited (SecondTransferor Company') with Delta Magnets Limited (Transferee Company) and their respectiveshareholders with requisite majority. Further The Company has filed a petition withNational Company 25th April 2019 for obtaining sanction to the Scheme pursuant to theprovisions of Section 230 to Section 232 of the Companies Act 2013. The final hearing onthe same is awaited.
Your Directors express their sincere appreciation for 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 |
| ||DIN: 00234797 |
|Place: Mumbai || |
|Date: 09th August 2019 || |
|Registered Office: || |
|B-87 MIDC Ambad || |
|Nashik-422 010 Maharashtra. || |
|CIN : L32109MH1982PLC028280 || |
|Email ID : firstname.lastname@example.org || |
|Website : www.deltamagnets.com || |
|Tel No : 91-253-2382238 || |
|Fax No : 91-253-2382926 || |