To The shareholders
Your Directors have pleasure in presenting the Thirty Eighth (38th) Directors' Reportof your Company along with the financial statements for the Financial Year ended 31stMarch 2020.
1. Operating results
Certain key aspects of your Company's performance during the Financial Year ended 31stMarch 2020 as compared to the previous Financial Year are summarised below:
| || || || ||(Rs in 000) |
| ||Standalone year ended ||Consolidated year ended |
|Particulars ||31.03.2020 ||31.03.2019 ||31.03.2020 ||31.03.2019 |
|Income for the year ||916445.48 ||576193.65 ||1249282.87 ||1011910.61 |
|Profit before Interest Depreciation and Tax ||(14443.09) ||30094.97 ||7401.51 ||50132.80 |
|Finance Charges ||61130.95 ||31171.15 ||61163.63 ||46441.97 |
|Profit before Depreciation and Taxes ||(75574.04) ||(1076.18) ||(53762.12) ||3690.83 |
|Depreciation & Amortization ||59607.40 ||31732.09 ||66472.33 ||39753.07 |
|Provisions for Taxation/ Deferred Tax ||695.31 ||587.98 ||2839.18 ||(2735.16) |
|Prior Period Items / Exceptional Items ||- ||- ||- ||- |
|Minority Interest & Profit from Associate Company ||- ||- ||- ||- |
|Net Profit for the Current Year ||(135876.75) ||(33396.22) ||(123073.67) ||(33327.05) |
|Add: other Comprehensive Income (oci) ||131.93 ||(294.57) ||10945.00 ||(2226.59) |
|Total Comprehensive Income for the Year ||(135744.82) ||(33690.79) ||(112128.67) ||(35553.64) |
|Earlier Years Balance Brought Forward ||(82678.16) ||48725.15 ||41909.38 ||1940.84 |
|Net Profit available for Appropriation (136538.71) (131403.31) ||(113426.65) ||39968.54 |
|Transfer to/from General Reserves ||- ||- ||- ||- |
|Balance carried to Balance Sheet (including oci) ||(219216.87) ||(82678.16) ||(71517.27) ||41909.38 |
The Standalone Gross Revenue from operations for Financial Year 2019-20 was Rs916445.48 (000) (Previous Year: Rs 576193.65 (000)). The operatingLoss before tax stood at Rs 135181.44 (000) as against loss of Rs 32808.24(000) in the Previous Year. The Net Loss after tax for the year stood at Rs135876.75 (000) against Rs 33396.22 (000) reported in the Previous Year.
The Consolidated Gross Revenue from operations for Financial Year 2019-20 was Rs1249282.87 (000) (Previous Year: Rs 1011910.61 (000). The Consolidatedoperating Loss before tax stood (for continued operations) at Rs 120234.46 (000)(Previous Year: Rs 36062.21 (000)). The Consolidated Loss after tax stood at Rs123073.67 (000) (Previous Year: Rs 33327.05 (000)).
The Directors do not recommend any dividend for the Financial Year ended 31st March2020.
3. Share capital
During the year under review the Company had issued and allotted 4380106 EquityShares of the face value of
Rs 10/- each pursuant to the Scheme of Amalgamation between the Company Arrow TextilesLimited (First Transferor Company or ATL) and MMG India Private Limited (Second TransferorCompany or MMG) and their respective shareholders as approved by Hon'ble National CompanyLaw Tribunal Mumbai bench (NCLT) vide its order dated 27th December 2019 (the Scheme).Accordingly as on 31st March 2020 the issued paid up share capital of the Companystood at Rs 108511200/- (Rupees Ten Crores Eighty Five Lacs Eleven Thousand Two Hundredonly) comprising of 10851120 Equity Shares of Rs10/- each. The authorized capital ofthe Company increased from Rs 100000000/- (Rupees Ten Crores only) comprising of10000000 Equity Shares of Rs 10/- each to Rs 460000000/- (Rupees Forty Six Croresonly) comprising of 46000000 Equity Shares of Rs 10/- each on account of clubbing ofauthorized share capital of ATL and MMG with that of the Company pursuant to the scheme.
Further the Company had applied for listing of shares to BSE Limited and NationalStock Exchange of India Limited (the Stock Exchanges) and received the listing permissionfor 4295623 Equity Shares held in dematerialised mode from the Stock Exchanges on 27thApril 2020. The 84483 Equity Shares held in physical mode are held in abeyance as theShare Certificates could not be dispatched due to nationwide lockdown due to COVID-19Pandemic. The Company is in process of dispatching share certificates. Once sharecertificates are dispatched the Company will apply for listing of these shares.
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 2019-20 viz. on 22nd May 2019 09thAugust 2019 13th November 2019 20th January 2020 and 13th February 2020. 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 2020 the applicable accounting standards have beenfollowed along with proper explanation relating to material departures;
ii. The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at 31st March 2020 and of the loss ofthe Company for that period.
Iii. The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.Iv. The Directors have prepared the annual accounts for Financial Year ended 31st March2020 on a going concern' basis.
V. The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate efficiently and have beenoperating .
Vi. The Directors have devised proper systems to ensure compliance with provisions ofall applicable laws and that such systems were adequate and operating effectively.
7. Declaration By independent directors
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 178 of the Act and Regulation 19 of Listing Regulationsis 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 2019-20 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 2019-20 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 INDAS-24 are set out in notes to accounts 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.
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.
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.
16. Subsidiary joint venture and associate companies
During the year under review MMG India Private Limited ceased to be subsidiary of theCompany pursuant to the Scheme. No company has become subsidiary joint venture andassociate company during the year.
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 statements and related information of the Company and audited accounts of each of itssubsidiaries are available on Company's website www.deltamagnets.com. These documentswill also be available for inspection during working hours at our Registered Office of theCompany.
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 Year2019-20 in terms of Chapter V of the Act.
18. Significant and material orders passed By The regulators or courts or tribunals materialorders passed by the Regulators/Courts which would impact the going concern Therearenosignificant status of the Company and its future operations.
19. Significant eventes during The financial year 2019-20
1. Scheme of amalgamation
The Hon'ble National Company Law Tribunal Mumbai Bench vide it's order dated 27thDecember 2019 had approved the Scheme of Amalgamation between the Company Arrow TextilesLimited (First Transferor Company or ATL) and MMG India Private Limited (Second TransferorCompany or MMG) and their respective shareholders (the Scheme). The appointed date of theScheme was 01st october 2018 and the Scheme became effective from 20th January 2020. Theallotment made to erstwhile shareholders of ATL in the exchange ratio of 23 (Twenty Three)fully paid-up Equity Shares of Rs 10/- each of the Company for every 100 (Hundred) fullypaid up Equity Shares of Rs 10/- each held by the shareholders of ATL on the record datei.e. 07th February 2020.
The amalgamation has been accounted for under the "pooling of interest"method referred to in Appendix C of Ind AS 103 - Business Combinations and the previouslyissued financial statements of the Company for the year ended 31st March 2019 have beenrestated to give effect to the Scheme. All the assets and liabilities of the ATL & MMGhave been transferred to and vested in the Company at it's carrying value w.e.f. 01stoctober 2018 and the amount of Rs 208486.14 (000) is recorded as Capital Reserveon account of the Scheme.
2. Change of name and object clause of the company
Pursuant to the Scheme the name of the Company was changed from Delta MagnetsLimited to Delta Manufacturing Limited w.e.f. 20th February 2020 as well as main objectclause of the Memorandum of Association of the Company amended pursuant to the Scheme.
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 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.
21. 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 (AGM) and beingeligible offers himself for re-appointment.
The Board on recommendation of the Nomination and Remuneration Committee has appointedMs. Anjali Mody (DIN: 02784924) as an Additional Director with effect from 13th February2020. Accordingly Ms. Anjali Mody holds office as Additional Director up to the date ofthe ensuing AGM and is eligible to be appointed as a Director of the
Company liable to retire by rotation in accordance with the provisions of Section 161of the Act and Rules made thereunder. The Company has received a notice from a memberproposing her appointment at the ensuing AGM as an Non-Executive Non-Independent Directorof the Company in accordance with provisions of the Act and the Rules made thereunderMr. Samir Chinai (DIN: 00112601) and Ms. Ambika Kothari (DIN: 01162900) resigned asDirectors of the Company w.e.f. 13th February 2020. The Board places on record itsappreciation for the valuable services and guidance given by Mr. Samir Chinai and Ms.Ambika Kothari to the Company during their tenure as Director of the Company.
1. Statutory auditor
M/s. M.H.S & Associates Chartered Accountants (Firm Registration No: 141079W) wereappointed as Statutory Auditors of the Company at 36th AGM till the conclusion of 41stAGM.
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.
There are no qualifications reservations or adverse remarks or disclaimers made byStatutory Auditors of the
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 the Secretarial Audit of the Companyfor the year ended 31st March 2020. The Secretarial Audit Report is appended as annexureV to this Report.
There are no qualifications reservations or adverse remarks or disclaimers made bySecretarial Auditor of the
Maintenance of cost records and Cost Audit as specified by the Central Government underSection 148(1) of the Act is not required by the Company.
23. Reporting of frauds
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and / or Board under Section 143(12)of Act and Rules framed thereunder.
24. 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.
25. 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 with acertificate from the practicing Company Secretary confirming compliance with theconditions of Corporate Governance forms an integral part of this Annual Report.
26. 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.
27. 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 email to the Company Secretary email@example.com.
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.
28. 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.
29. 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 2019-20.
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.
Due to covid-19 pandemic and the consequent lock down announced by the Government ofIndia the operations of the Company have been suspended since the third week of March2020. The Government has also been announcing phased lifting of lock down and the generalexpectations are that normalcy could be gradually restored during the Financial Yearending 31st March 2021. The management has also evaluated the possible impact of thispandemic on the business operations and the financial position of the Company and based onits initial assessment of the current indicators of the future economic conditionsbelieves that there is no significant impact on the financial results of the Company asat and for the year ended 31st March 2020. In view of the outbreak of the pandemic theCompany undertook timely and essential measures to ensure the safety and wellbeing of allits employees at all its locations. The Company observed all the government advisories andguidelines thoroughly and in good faith.
| ||For and on behalf of the Board of directors |
| ||Jaydev mody |
| ||Chairman |
| ||Din: 00234797 |
|Place: mumbai || |
|Date: 14tha ugust 2020 || |