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Delta Manufacturing Ltd.

BSE: 504286 Sector: Engineering
NSE: DELTAMAGNT ISIN Code: INE393A01011
BSE 00:00 | 26 Nov 64.65 -1.55
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67.70

HIGH

67.70

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64.65

NSE 00:00 | 26 Nov 65.00 -0.95
(-1.44%)
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67.30

HIGH

68.15

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OPEN 67.70
PREVIOUS CLOSE 66.20
VOLUME 1989
52-Week high 76.15
52-Week low 20.20
P/E
Mkt Cap.(Rs cr) 70
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 67.70
CLOSE 66.20
VOLUME 1989
52-Week high 76.15
52-Week low 20.20
P/E
Mkt Cap.(Rs cr) 70
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Delta Manufacturing Ltd. (DELTAMAGNT) - Auditors Report

Company auditors report

To the members of delta manufacturing limited (formerly known as ‘delta magnetslimited') report on the audit of the standalone financial statements opinion

1. We have audited the accompanying standalone financial statements of DeltaManufacturing Limited (Formerly known as ‘Delta Magnets Limited') (‘theCompany') which comprise the Standalone Balance Sheet as at March

31 2020 the Standalone Statement of Profit and Loss (including Other ComprehensiveIncome) the Standalone

Cash Flow Statement and the Standalone Statement of Changes in Equity for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (‘Act') in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India includingIndian Accounting Standards (‘Ind AS') specified under section 133 of the Act of thestate of affairs of the Company as at March 31 2020 and its loss (including othercomprehensive income) its cash flows and the changes in equity for the year ended on thatdate.

Basis for opinion

3. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (‘ICAI') togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.

Emphasis of matter – covid-19 impact

4. We draw attention to Note 44 to the accompanying standalone audited financialstatements with regard to the management's evaluation of uncertainty due to the outbreakof covid-19 and its impact on the future performance operations of the Company. Ouropinion is not modified in respect of this matter.

Key audit matter

5. Key audit matters are those matters that in our professional judgment were of mostsignificancein our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

6. We have determined the matters described below to be the key audit matters to becommunicated in our report.

Key audit matter How our audit addressed the key audit matter
1. Revenue recognition Our audit procedures included but were not limited to The following:
(Refer note 2.8 for the accounting policy on revenue Recognition note 23 of the standalone financial Obtained and updated our understanding of the
Statement for revenue recognized during the year And note 40 for disaggregate revenue information Under Ind AS 115) Revenue business process.
Evaluated the design and tested the operating
Revenue is one of the key profit drivers and is Therefore susceptible to misstatement. Cut-off is Effectiveness of key controls over the recognition and Measurement of revenue.
The key assertion in so far as revenue recognition Around dispatches/deliveries inventory reconciliations
Is concerned since an inappropriate cut-off can And circularization of receivable balances substantive
Result in material misstatement of results for the Year. Testing for cut-offs and analytical review procedures. Evaluated the appropriateness of disclosures made In the financial statements with respect to revenue Recognized during the year as required by applicable Accounting standards.
2. Accounting for Common Control Business Combination - Our audit procedures included but were not limited to The following:
Refer note 42 to the Standalone financial Statements. The Scheme of Arrangement (‘the Scheme') presented under Section 230 to 232 and Other applicable provisions of the Companies Act 2013 read with the rules prescribed thereunder For the business combination of Arrow Textiles Limited (‘ATL') & MMG India Private Limited (MMG) With the Company was approved by the Hon'ble National Company Law Tribunal vide its order Dated December 27 2019 ("the NCLT order"). The Certified copy of the NCLT order was filed With Registrar of Companies on January 20 2020. We evaluated the appropriateness of ‘Pooling of interest' Method of accounting adopted by the management to Account for the common control business combination.
We corroborated management's alignment of Accounting policies and estimates by comparing the Significant accounting policies and estimates of ATL & MMG and comparing with the Company's accounting Policies and estimates.
Consequently the Scheme became operative From January 20 2020 and effective from october 01 2018 i.e. Appointed date. The said business Combination has been accounted under the ‘pooling of interests' method in accordance with Appendix C of lnd AS 103 ‘Business Combination' And comparatives have been restated for business Combination. We read the Scheme and focused on accounting of The same as per Appendix C - Ind AS 103 Business Combination and calculation of capital reserve on the Business combination.
We evaluated appropriateness of the disclosures in Respect of this business combination in the Standalone Financial statement and assessed the completeness And mathematical accuracy of the relevant disclosures.

Information other than the financial statements and auditor's report thereon

7. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe standalone financial statements and our auditor's report thereon. The Annual Report isexpected to be made available to us after the date of this auditor's report.

Our opinion on the standalone financial statements does not cover the other informationand we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

When we read the Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.

Responsibilities of management and Those charged with governance for the standalonefinancial statements

8. The accompanying standalone financial statements have been approved by the Company'sBoard of Directors.

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the Ind ASspecifiedunder section

133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

9. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

10. Those Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's responsibilities for the audit of the financial statements

11. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.

12. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficientand appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control;

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls;

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management;

Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern;

Evaluate the overall presentation structure and content of the financialstatementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

13. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

14. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

15. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financialstatements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

16. As required by section 197(16) of the Act based on our audit we report that theCompany has paid remuneration to its directors during the year in accordance with theprovisions of and limits laid down under section 197 read with Schedule V to the Act.

17. As required by the Companies (Auditor's Report) order 2016 (‘the order')issued by the Central Government of

India in terms of section 143(11) of the Act we give in the Annexure A a statement onthe mattersspecifiedin paragraphs 3 and 4 of the order.

18. Further to our comments in Annexure A as required by section 143(3) of the Actbased on our audit we report to the extent applicable that: a. We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose of our audit of the accompanying standalonefinancial statements; b. In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books; c. Thestandalone financial statements dealt with by this report are in agreement with the booksof account; d. In our opinion the aforesaid standalone financialstatements comply withInd AS specified under section 133 of the Act; e. On the basis of the writtenrepresentations received from the directors and taken on record by the Board of

Directors none of the directors is disqualified as on March 31 2020 from beingappointed as a director in terms of section 164(2) of the Act; f. We have also audited theinternal financial controls with reference to financial statements of the Company as onMarch 31 2020 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date and our report dated June 26 2020 as per AnnexureB expressed unmodifiedopinion; and g. With respect to the other matters to be included inthe Auditor's Report in accordance with rule 11 of the Companies (Audit and Auditors)Rules 2014 (as amended) in our opinion and to the best of our information and accordingto the explanations given to us: i. The Company as detailed in note 32(a) to thestandalone financial statements has disclosed the impact of pending litigations on itsfinancial position as at March 31 2020. Ii. The Company did not have any long-termcontracts including derivative contracts for which there were any material foreseeablelosses as at March 31 2020; iii. There has been no delay in transferring amountsrequired to be transferred to the Investor Education and Protection Fund by the Companyduring the year ended March 31 2020; iv. The disclosure requirements relating toholdingsaswellasdealingsinspecifiedbank notes were applicable for the period from November08 2016 to December 30 2016 which are not relevant to these standalone financialstatements. Hence reporting under this clause is not applicable.

For m h s & associates
Chartered Accountants
Firm's Registration No.: 141079W
Mayur h. Shah
Partner
Membership No.: 147928
Udin: 20147928aaaaap4957
Place: Mumbai
Date: June 26 2020

Annexure a

To the independent auditor's report of even date to the members of delta manufacturinglimited (formerly known as ‘Delta Magnets Limited') on the standalone financialstatements for the year ended March 31 2020

Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that: i. (a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management during the yearand no material discrepancies were noticed on such verification. In our opinion thefrequency of verification of the fixed assets is reasonable having regard to the size ofthe Company and the nature of its assets. (c) The title deeds of immovable properties areheld in the name of the Company except for immovable properties acquired as a part ofScheme of Arrangement [see note 42] in the current year. As explained to us Registrationof title deeds is in progress in respect of such immovable properties. Ii. In our opinionthe management has conducted physical verification of inventory at reasonable intervalsduring the year and no material discrepancies between physical inventory and book recordswere noticed on physical verification. Iii. The Company has not granted any loan securedor unsecured to companies firms Limited Liability Partnerships

(llps) or other parties covered in the register maintained under Section 189 of theAct. Accordingly the provisions of clauses 3(iii)(a) 3(iii)(b) and 3(iii)(c) of theorder are not applicable. Iv. In our opinion the Company has complied with the provisionsof Sections 185 & 186 of the Act. V. In our opinion the Company has not accepted anydeposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptanceof Deposits) Rules 2014 (as amended). Accordingly the provisions of clause 3(v) of theorder are not applicable. Vi. We have broadly reviewed the books of account maintained bythe Company pursuant to rules prescribed by the Central Government for the maintenance ofthe cost records under Sub-Section (1) of Section 148 of the Act and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained. Vii.(a) Undisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax service tax duty of customs duty of excise value added taxcess goods and service tax and other material statutory dues as applicable havegenerally been regularly deposited to the appropriate authorities though there has beendelays in a few cases. Further no undisputed amounts payable in respect thereof wereoutstanding at the year-end for a period of more than six months from the date they becamepayable except service tax sales tax tax deducted at source(TDS) provident fund. Astatement showing arrears of outstanding statutory dues as at the last date of theFinancial Year for a period more than six months is as under:

Name of the Statute Nature of Dues Amount (Rs in ‘000) Period to which The amount Relates Due date Paid amount (in Rs) Date of Payment
Finance Act 1994 Service Tax 2875.76 August 2015 to June 2017 6th of the following month of the Respective months except from March Month. For March it is 31st of March. Nil Not Paid
The Central Sales Tax 1956 CST 438.21 September 2015 To June 2017 21st of the following month of the Respective months Nil Not Paid
Tamil Nadu Value Added Tax Act 2006 VAT 312.67 September 2015 To June 2017 22nd of the following month of the Respective months Nil Not Paid
The Income Tax Act 1961 TDS 1928.76 Mar-19 30th April 2019 Nil Not Paid
The Employees Provident Funds & Miscellaneous Provisions Act 1952 Provident Fund 622.93 November 2018 January 2019 And March 2019 15th of the following month of the Respective months Nil Not Paid

(b) The dues outstanding in respect of income-tax sales-tax service-tax duty ofcustoms duty of excise and value added tax on account of any dispute are as follows:

statement of disputed dues

Name of the statute Nature of Dues Amount (Rs in ‘000) Amount paid Under protest (Rs in ‘000) Period to which The amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 2373.94 474.79 F.Y. 2010-11 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 3091.64 618.33 F.Y. 2011-12 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 3175.84 635.17 F.Y. 2012-13 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 2244.43 448.89 F.Y. 2013-14 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 1300.50 260.23 F.Y. 2014-15 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 2329.86 Nil F.Y. 1989-90 F.Y.1993-94 and F.Y. 1994-95 Mumbai High Court
Income Tax Act 191 Income Tax 2595.35 Nil F.Y. 2011-12 Rectification u/s. 154 is pending before the Assessing Officer
Income Tax Act 191 Income Tax 534.68 Nil F.Y. 2017-18 Rectification u/s. 154 is pending before the Assessing Officer
The Central Sales Tax 1956 Sales Tax 11443.23 Nil F.Y. 2015-16 Appeal to be filed before Appellate Deputy Commissioner of Commercial Taxes Chennai (East) Division

Viii. The Company has not defaulted in repayment of loans or borrowings to any bank orfinancial institution or government during the year. The Company did not have anyoutstanding debentures during the year.

Ix. Money raised by way of term loans during the year have been applied for the purposefor which they were raised. The Company has not raised any money by way of initial publicoffer or further public offer (including debt instruments) during the year.

X. No fraud by the Company or on the company by its officers or employees has beennoticed or reported during the period covered by our audit.

Xi. Managerial remuneration has been paid and provided by the company in accordancewith the requisite approvals mandated by the provisions of Section 197 of the Act readwith Schedule V to the Act.

Xii. In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the order are not applicable.

Xiii. In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable Ind AS.

Xiv. During the year the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures. Xv. In our opinion thecompany has not entered into any non-cash transactions with the directors or personsconnected with them covered under Section 192 of the Act. Xvi. The company is not requiredto be registered under Section 45-IA of the Reserve Bank of India Act 1934.

For m h s & associates
Chartered Accountants
Firm's Registration No.: 141079W
Mayur h. Shah
Partner
Membership No.: 147928
Udin: 20147928aaaaap4957
Place: Mumbai
Date: June 26 2020

Annexure B

Independent Auditor's Report on the internal financial controls with reference to thestandalone financial statements under clause (i) of sub-section 3 of section 143 of thecompanies act 2013 (‘the act')

1. In conjunction with our audit of the standalone financial statements of DeltaManufacturing Limited (Formerly known as ‘Delta Magnets Limited') (‘theCompany') as at and for the year ended March 31 2020 we have audited the internalfinancial controls with reference to financial statements of the Company as at that date.

Responsibilities of management and Those charged with governance for internal financialcontrols

2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal financial controls with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of the Company's business including adherence to theCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditor's responsibility for the audit of the internal financial controls withreference to financial statements

3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Standards on Auditing issued by the Institute of CharteredAccountants of India (‘ICAI') prescribed under Section 143(10) of the Act to theextent applicable to an audit of internal financial controls with reference to financialstatements and the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (‘the Guidance Note') issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls withreference to financial statements were established and maintained and if such controlsoperated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements includes obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient opinion on theCompany's internal financial controls with reference to financial statements.

Meaning of internal financial controls with reference to financial statements

6. A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent limitations of internal financial controls with reference to financialstatements

7. Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects adequate internalfinancial controls with reference to financial statements and such controls were operatingeffectively as at 31 March 2020 based on the internal financial controls with referenceto financial statements criteria established by the Company essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India.

For m h s & associates
Chartered Accountants
Firm's Registration No.: 141079W
Mayur h. Shah
Partner
Membership No.: 147928
UDIN: 20147928AAAAAP4957
Place: Mumbai
Date: June 26 2020

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