DIRECTORS’ REPORT TO THE SHAREHOLDERS 1.Your Directors have pleasure in presenting the Twenty- Fourth Directors' Report of your Company along with the financial statements for the financial year ended 31st March, 2015. 2. DIVIDEND: Your Directors recommend for approval of the Members at the ensuing Annual General Meeting, a dividend of Rs. 0.10/- per Equity Share (10%) of Rs. 1/- each, for the financial year ended 31st March, 2015 (previous year Rs. 0.25/- per Equity Share of nominal value of Rs. 1/- each). The dividend will be paid in compliance with the applicable rules and regulations. 3. SHARE CAPITAL During the year, the Company has issued and allotted 30,87,600 Equity Shares of the Company to eligible employees on exercise of options granted under Employee Stock Option Scheme. Consequently, the issued, subscribed and paid-up capital of the Company has increased from 22,75,76,504 Equity Shares of Rs. 1/- each to 23,06,64,104 Equity Shares of Rs. 1 /- each. 4. OVERVIEW OF OPERATIONS: During the year under review, your Company recorded a total income of Rs. 30,739.61 Lacs (Consolidated) and Net Loss of Rs. 2,277.14 Lacs (Consolidated). For further information, kindly refer to Management Discussion and Analysis Report, forming a 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, 28th July, 2014, 16th October, 2014 and 26th 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 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 and Rules made thereunder and Clause 49 of the Listing Agreement. During the financial year 2014-15, transactions with related parties which qualify as material transactions under the Listing Agreement are given in Form AOC - 2 of the Companies (Accounts) Rules, 2014 in 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 the Company's website at the link: <http://www.deltacorp.in/pdf/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. Ashish Kapadia, Mr. Rajesh Jaggi and Dr. Vrajesh Udani. 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. 7. To optimize a balance between the cost of managing risk and the anticipated benefits. 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. CORPORATE SOCIAL RESPONSIBILITY The Board has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. The details required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in CSR Report appended as Annexure V to this Annual Report. 16. 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.deltacorp.in 17. ANNUAL EVALUATION OF PEFORMANCE OF THE BOARD Pursuant to the provisions of the Companies 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, Remuneration and Compensation 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 fulfilment 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, Remuneration and Compensation Committee also reviewed the performance of the Board, its Committees and of the Directors. 18. SUBSIDIARY COMPANIES The Company as on 31st March, 2015, has 12 direct subsidiaries, 8 step down subsidiaries, 1 joint venture and 1 associate company. During the year under review Delta Holdings (USA) Inc. ceased to be a subsidiary of the Company. No company has become/ceased to be a joint venture or associate during the financial year 2014-15. 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 subsidiaries, associate and joint venture company as per the Companies Act, 2013 is provided in the 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.deltacorp.in . These documents will also be available for inspection during working hours at our Registered Office of the Company. Further, the Company has 1 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.deltacorp.in/pdf/policy-for-determining-material-subsidiaries.pdf>. 19. 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. 20. 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. 21. 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. 22. DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of the Section 152(6)(e) of the Companies Act, 2013, Mr. Ashish Kapadia (DIN: 02011632), Managing Director of the Company will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board of Directors of the Company vide circular resolution dated 10th March, 2015 have appointed Dr. Vrajesh Udani (DIN: 00021311) as an Additional Director designated as Independent Director of the Company in accordance with the provisions of Section 161 of the Companies Act, 2013 and Rules made thereunder. He holds the office as an Additional Director upto the date of the ensuing Annual General Meeting of the Company. The Company has received a notice from a member, proposing his appointment at the ensuing Annual General Meeting, as an Independent Director of the Company, in accordance with provisions of Section 149 and any other applicable provisions of the Companies Act, 2013 and the Rules made thereunder, read with Schedule IV of the Companies Act, 2013. Mr. Ashish Kapadia, Managing Director (DIN: 02011632), and Mr. Hitesh Kanani, Company Secretary of the Company are the Key Managerial Personnel as per the provisions Section 203 of the Companies Act, 2013 and Rules made thereunder and were already in office before the commencement of the Companies Act, 2013. Further, during the year pursuant to provisions Section 203 of the Companies Act, 2013 and Rules made thereunder, Mr. Hardik Dhebar was appointed as Key Managerial Personnel of the Company, designated as Chief Financial Officer of the Company w.e.f 28th July, 2014. Mr. Mahesh Gupta (DIN: 00046810), Mr. Rajeev Piramal (DIN: 00044983) and Mr. Prakash Chabria (DIN: 00016017) resigned as Directors of the Company w.e.f. 10th September, 2014, 26th September, 2014 and 15th December, 2014 respectively. The Board places on record its appreciation for the valuable services and guidance given by Mr. Mahesh Gupta, Mr. Rajeev Piramal and Mr. Prakash Chhabria to the Company during their tenure as Directors of the Company. 23. AUDITORS 1. Statutory Auditor The Board of Directors recommends to re-appoint M/s. Haribhakti & Co. LLP, Chartered Accountants, and M/s. Amit Desai & Co., Chartered Accountants who were appointed as Joint Statutory Auditors of the Company at last Annual General Meeting. M/s. Haribhakti & Co. LLP, Chartered Accountants, hold office from the conclusion of 23rd Annual General Meeting till the conclusion of 28th Annual General Meeting and M/s. Amit Desai & Co; Chartered Accountants, hold office from the conclusion of 23rd Annual General Meeting till the conclusion of 26th Annual General Meeting of the Company subject to ratification of their appointment at every Annual General Meeting. The Board of Directors of the Company at its meeting held on 17th April, 2015 recommended to members of the Company ratification of appointment of M/s. Haribhakti & Co. LLP Chartered Accountants, and M/s. Amit Desai & Co., Chartered Accountants as the Joint Statutory Auditors of the Company for financial year 2015-2016. Your Company has received a letter from M/s. Haribhakti & Co. LLP and 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. 2. Secretarial Auditor Pursuant to the provisions of Section 204 of the Companies Act, 2013 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 VI to this Annual Report. Information on Statutory & Secretarial Auditors Qualification and Emphasis of Matter. Qualification i) With regard to Statutory Auditor's qualification in respect to search and seizure, members are requested to note that the said search and seizure was carried out u/s 132 of the Income Tax Act, 1961 (the Act) by the Income Tax Authorities on 29th April 2014 on the Company and its Subsidiaries. Consequently, the Company & its Subsidiaries have disclosed a sum of Rs. 1694.02 Lacs (Standalone - Rs. 351.36 Lacs) for earlier years. As such disclosed amount for earlier years does not affect the accumulated profits of the Company as on 1st April 2014, only such tax and interest of Rs. 394.29 Lacs (Standalone - Tax Rs. 117.69 Lacs and interest Rs. Nil) have been accounted for, which eventually gets adjusted towards the carry forward losses, of certain respective entities. Hence, the net payment of income tax and interest thereon after adjustment of such losses aggregates to Rs. 276.60 Lacs (Standalone - Rs. Nil). Such disclosed amount is subject to final acceptance by the tax authorities u/s 143(3)/153A of the Act. However, the Company & its Subsidiaries does not expect any further liability on this account under the Act, as well as under any other Act, if any. ii) With regard to Statutory and Secretarial Auditor's Qualification in respect of an overseas subsidiary & its components, members of the Company are requested to note that due to the differences with its local management, the Company is unable to obtain the financial statements / relevant information of such subsidiary & its components. The Company is in the process of resolving the differences. On account of non-receipt of the financial statements / relevant information, the Company consolidated these entities based on the financial position as on 30th September, 2013. The resulting impact of this if any, is not quantifiable. Emphasis of Matter (i) With regard to Statutory Auditor's observation with respect to utilization of MAT Credit Entitlement, members are requested to note that based on business projections management is of the opinion that MAT credit entitlement will be absorbed. 24. 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 a part of this Annual Report. 25. AUDIT COMMITTEE OF THE COMPANY The Company's Audit Committee comprises the following Directors: 1. Mr. Ravinder Kumar Jain (Chairman); 2. Mr. Ashish Kapadia; 3. Mr. Rajesh Jaggi; 4. Mrs. Alpana Piramal Chinai 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. 26. PARTICULARS OF EMPLOYEES In terms of the provisions of Section 197(12) of the Companies Act, 2013 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 Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure VII to this Annual Report. 27. EMPLOYEES STOCK OPTION SCHEME As required in terms of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Clause 14 of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and in terms of Rule 12 of Companies (Share Capital and Debentures) Rules, 2014, the disclosure relating to DELTA CORP ESOS 2009 is given in Annexure VIII to this Annual Report. 28. ACKNOWLEDGEMENTS 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 Mumbai, 16th July, 2015 Registered Office: 10, Kumar Place, 2408, General Thimayya Road, Pune - 411 001, Maharashtra. CIN :L65493PN1990PLC058817 Email ID : secretarial@deltin.com Website : www.deltacorp.in Tel. No. : 91-22-40794700 Fax No. : 91-22-40794777 |