DIRECTORS' REPORT TO THE SHAREHOLDERS Your Directors have pleasure in presenting the 33rd Directors' Report of your Company along with the financial statements for the financial year ended 31st March, 2015. 2. DIVIDEND: The Directors do not recommend any dividend for the Financial Year Ended 31st March, 2015. 3. SHARE CAPITAL During the year the Company has issued, 3,97,351 fully paid-up Equity Shares of Rs. 10/- each, at a price of Rs. 32.43/-per Equity Share (including a premium of Rs. 22.43/- per Equity Share) by way of Preferential Allotment to M/s. SSI Trading Private Limited on 2nd April, 2014. Consequently, the issued, subscribed and paid-up capital of the Company has increased from 60,73,663 Equity Shares of Rs. 10/- each to 64,71,014 Equity Shares of Rs. 10 /- each. 4. OVERVIEW OF OPERATIONS: During the year under review, your Company recorded a total income of Rs. 568,299.69 Thousands (Consolidated) and Net Profit of Rs. 12,258.87 Thousands (Consolidated). For further information, kindly refer to Management Discussion 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 and as prescribed in Form No. MGT-9 of the Companies (Management and Administration) Rules, 2014 is appended as Annexure I to this Annual Report. 6. NUMBER OF MEETINGS OF THE BOARD The Board met four times in financial year 2014-15 viz., on 28th May, 2014, 4th August, 2014, 5th November, 2014 and 31st January, 2015. 7. DIRECTORS' RESPONSIBILITY STATEMENT Your Directors hereby confirm that: i. In the preparation of the annual accounts for financial year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures; ii. 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 31st March, 2015 and of the profit of the Company for that period. iii. 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. iv. The Directors have prepared the annual accounts for financial year ended 31st March, 2015 on a 'going concern' basis. v. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and have been operating efficiently. vi. The Directors have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively. 8. DECLARATION BY INDEPENDENT DIRECTORS The Independent Directors of the Company have submitted the declaration of Independence as required under Section 149(7) of the Companies Act, 2013 confirming that they meet the criteria of independence under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. 9. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION The Policy of the Company on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of section 178 of the Companies Act, 2013, is appended as Annexure II to this Annual Report. 10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 The details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. 11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES During the financial year 2014-15, your Company has entered into transactions with related parties as defined under section 2(76) of the Companies Act, 2013 read with the Companies (Specification and Definitions Details) Rules, 2014 in accordance with the provisions of the Companies Act, 2013, Rules issued thereunder and Clause 49 of the Listing Agreement. During the financial year 2014-15, the Company has not entered into transactions with related parties which qualify as material transactions under the Listing Agreement. The Form AOC- 2 pursuant to Section 134 (3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as Annexure III to this Annual Report. The details of related party transactions as required under Accounting Standard-18 are set out in notes to accounts to the Standalone Financial Statements forming part of this Annual Report. Policy on related party transactions is available on Company's website and same may be accessed on Company's website at the 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 of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the Report. 13. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGS AND OUTGO The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is given in Annexure IV to this Annual Report. 14. BUSINESS RISK MANAGEMENT Pursuant to Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee (RMC). The Committee comprises of Mr. Rajesh Jaggi, Dr. Ram H. Shroff and Mr. Javed Tapia. Terms of Reference of Risk Management Committee are as follows: 1. To lay down a framework for identification, measurement, analysis, evaluation, prioritization, mitigation & reporting of various risks in line with the Risk Management Policy of the Company. 2. To review the strategies, policies, frameworks, models and procedures that lead to the identification, measurement, reporting and mitigation of various risks. 3. To implement risk mitigation plans in the interest of the Company. 4. To help the Board define the risk appetite of the organization and to ensure that the risk is not higher than the risk appetite determined by the Board. 5. To safeguard Company's properties, interests, and interest of all stakeholders. 6. To evolve the culture, processes and structures that are directed towards the effective management of potential opportunities and adverse effects, which the business and operations of the Company are exposed to. 8. To monitor the effectiveness of risk management functions throughout the organization. Ensure that infrastructure, resources and systems are in place for risk management and are adequate to maintain a satisfactory level of risk management discipline. 9. To create awareness among the employees to assess risks on a continuous basis and to ensure that risk awareness culture is pervasive throughout the organization. 10. To review issues raised by Internal Audit that impact the risk management framework. 11. To review and approve risk disclosure statements. The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk identification and its management approach across the enterprise at various levels including documentation and reporting. The framework helps in identifying risks trend, exposure and potential impact analysis on a Company's business. 15. VIGIL MECHANISM The Company has adopted a Whistle Blower Policy for Directors and Employees to report genuine concerns and to provide for adequate safeguards against victimization of persons who may use such mechanism. The said policy is posted on the Company's website www.deltamagnets.com 16. ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD Pursuant to the provisions of the Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees. The Nomination and Remuneration Committee has defined the evaluation criteria for the Board, its Committees and Directors. The Board's functioning was evaluated on various aspects, including inter alia degree of fulfillment of key responsibilities, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning. Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members. Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings. The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors 17. SUBSIDIARY COMPANIES The Company as on 31st March, 2015 has 2 direct subsidiaries. During the year under review no company has become/ceased to be a subsidiary, joint venture or associate company. During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared consolidated financial statements 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 subsidiary companies as per the Companies Act, 2013 is provided as Annexure A to the consolidated financial statement and hence not repeated here for the sake of brevity. In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries, are available on Company's website www.deltamagnets.com These documents will also be available for inspection during business hours at our Registered Office of the Company. Further, the Company does not have any material non-listed Indian subsidiary as defined under Clause 49 of the Listing Agreement, viz. an unlisted subsidiary incorporated in India, whose income or net worth (i.e. paid-up capital and free reserves) exceeds 20% of the consolidated income or net worth respectively, of the listed holding company and its subsidiaries in the immediately preceding accounting year. The Policy for determining material subsidiaries as approved may be accessed on the Company'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 COMPANIES ACT, 2013 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 would impact the going concern status of the Company and its future operations. 20. INTERNAL CONTROL SYSTEM The Company has an internal financial control system commensurate with the size and scale of its operations and the same has been operating effectively. The Internal Auditor evaluates the efficacy and adequacy of internal control system, accounting procedures and policies adopted by the Company for efficient conduct of its business, adherence to Company's policies, safeguarding of Company's assets, prevention and detection of frauds and errors and timely preparation of reliable financial information etc. Based on the report of internal audit function, 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. 21. DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the Articles of Association of the Company and the provisions of the Section 152(6)(e) of the Companies Act, 2013, Mr. Darius Khambatta (DIN: 00520338), Director of the Company will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Dr. Ram H. Shroff (DIN: 00004865), Managing Director and Ms. Snehal Oak, Company Secretary of the Company are the Key Managerial Personnel as per the provisions of Section 203 of the Companies Act, 2013 and Rules made there under and were already in office before the commencement of the Companies Act, 2013. Further during the year pursuant to provisions of Section 203 of the Companies Act, 2013 and Rules made thereunder, Mr. Abhilash Sunny was appointed as Key Managerial Personnel of the Company to be designated as Chief Financial Officer of the Company w.e.f 31st January, 2015. Mr. Mahesh Gupta (DIN: 00046810) resigned as Directors of the Company w.e.f. 10th September, 2014. Further, Ms. Urvi Piramal (DIN: 00044954) ceased to be a Director of the Company w.e.f. 25th September, 2014. The Board places on record its appreciation for the valuable services and guidance given by Mr. Mahesh Gupta and Ms. Urvi Piramal to the Company during their tenure as Director of the Company. 22. AUDITORS 1. Statutory Auditor The Board of Directors recommends to re-appoint M/s. Amit Desai & Co., Chartered Accountants who were appointed as Statutory Auditors of the Company who was appointed as Statutory Auditors of the Company at last Annual General Meeting to hold office from the conclusion of 32nd Annual General Meeting till the conclusion of 36th Annual General meeting, subject to ratification of their appointment at every Annual General Meeting. The Board of Directors of the Company at its meeting held on 12th May, 2015 recommended 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 year 2015-2016. Your Company has received a letter from M/s. Amit Desai & Co. to the effect that their re-appointment, if made, would be under the second and third proviso to Section 139 (1) of the Companies Act, 2013 and that they are not disqualified within the meaning of Section 141 of the Companies Act, 2013 read with Rule 4(1) of the Companies (Audit and Auditors) Rules, 2014. Auditors Emphasis on Matter and Managements Reply We draw your attention on the following matter in the note no. 28 (J) of the consolidated financial statements: MAT credit entitlement of Rs. 2,868.00 ('000) is based on business projections of Company provided by Management, and the same have been relied upon by the Auditors. Managements Reply: Based on business projections management is of the opinion that MAT credit entitlement will be absorbed. 2. Secretarial Auditor Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. A. K. Jain & Co., Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the year ended 31st March, 2015. The Secretarial Audit Report is annexed as Annexure V to this Annual Report. There are no qualifications, reservations or adverse remarks or disclaimers made by Secretarial Auditor of the Company, in his secretarial audit report. 23. CORPORATE GOVERNANCE Pursuant to Clause 49 of the Listing Agreement, the Management Discussion & Analysis Report and Corporate Governance Report together with Certificate from Practicing Company Secretary, on 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; The composition of the Audit Committee is in compliance with the requirements of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. 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, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules and disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure VI to this Annual Report. 26. ACKNOWLEDGMENTS Your Directors express their sincere appreciation of the co-operation received from shareholders, bankers and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff, resulting in the successful performance of the Company during the year. For and on behalf of the Board of Directors JAYDEV MODY Chairman Registered Office: B-87, MIDC, Ambad, Nashik-422 010, Maharashtra. CIN : L32109MH1982PLC028280 Email ID : secretarial@deltamangets.com Website : www.deltamangets.com Tel No : 91-253-2382238 Fax No : 91-253-2382926 Place : Mumbai, date : 27th July, 2015 |