Mar 31, 2023
Your Board of Directors have pleasure in presenting the 55th Annual Report and Audited Financial Statements of the Company for the Financial Year ended 31st March, 2023.
FINANCIAL RESULTS
The summarized financial results for the year are as under:
Particulars |
(Rs. in Crores) Standalone Consolidated |
|||
2022-23 |
2021-22 |
2022-23 |
2021-22 |
|
INCOME |
||||
Revenue From Operations (Net) |
4481.1 |
3768.1 |
4481.1 |
3768.1 |
Other Income |
198.1 |
151.8 |
117.7 |
71.5 |
Total |
4679.2 |
3919.9 |
4598.8 |
3839.6 |
EXPENDITURE |
||||
Material Costs |
3544.5 |
2966.3 |
3544.5 |
2966.3 |
Employee Benefit Expenses |
162.7 |
146.1 |
162.7 |
146.1 |
Finance Costs |
1.2 |
1.5 |
1.2 |
1.5 |
Depreciation, Amortization and impairment |
46.4 |
38.8 |
46.4 |
38.8 |
Other Expenses |
278.4 |
240.6 |
264.6 |
227.3 |
Total |
4033.2 |
3393.3 |
4019.4 |
3380.0 |
Profit Before Tax |
646.0 |
526.6 |
579.4 |
459.6 |
Share of Net Profits of an Associate and Joint Ventures accounted for using equity Method |
69.9 |
327.0 |
||
Profit Before Tax |
646.0 |
526.6 |
649.3 |
786.6 |
Tax Expenses: |
||||
Current Tax |
145.0 |
127.9 |
145.0 |
127.9 |
Deferred Tax |
(0.7) |
(5.9) |
0.1 |
59.6 |
Total Tax |
144.3 |
122.0 |
145.1 |
187.5 |
Profit After Tax |
501.7 |
404.6 |
504.2 |
599.1 |
Total Other Comprehensive Income/(Expenses) For the year |
35.9 |
(7.4) |
35.8 |
(7.4) |
Total Comprehensive Income for the year |
537.6 |
397.2 |
540 |
591.7 |
ECONOMIC REVIEW Global Economy
The global economy is witnessing signs of resilience in 2023
after the sharp economic slowdown in 2022. The slowdown is expected to be less pronounced in 2023 than previously
anticipated. However, higher inflation, tighter monetary conditions, and the Russia- Ukraine war continue to impact the global economy. Further, the banking crisis in March 2023 and a debt-ceiling crisis in the United States have raised concerns over fragile global economic conditions and an impending recession. However, key factors such as the rebounding of China''s economy, the gradual unwinding of supply chains, and the recent decline in energy and food prices indicate the
improvement in economic activity and sentiment in 2023. Moreover, inflation is projected to decline from 8.7% in 2022 to 7.0% in 2023 and 4.9% in 2024.
As per International Monetary Fund (IMF), global GDP growth is projected to decline from 3.4% in 2022 to 2.8% in 2023 and rise to 3.0% in 2024. Growth across Advanced Economies (AEs) is expected to decline from 2.7% in 2022 to 1.3% in 2023 before rising to 1.4% in 2024. Emerging and Developing Economies (EMDEs) fared better and grew at 4.0% in 2022 and are expected to grow at 3.9% in 2023 and 4.2% in 2024. Asia- Pacific will be the most dynamic of the world''s major regions in 2023, with China and India leading the growth.
Source: IMF World Economic Outlook, April 2023 Indian Economy
India continues to be among the fastest growing economies
in the world. India''s recovery from the pandemic has been remarkable. The Indian economy continues to show strong resilience to external shocks and persistent inflation. The accelerated pace of economic reforms has led to strong and sustainable growth and strengthened the position of the Indian economy in the world. India''s GDP growth is estimated at 7% in FY 2022-23 as against 9.1% in FY 2021-22. Despite the weak external demand, the merchandise exports registered healthy growth. Further, increasing disposable income will stimulate consumption and boost the demand for goods and services across industries.
As per the International Monetary Fund (IMF), the Indian
economy is expected to advance steadily at 5.9% in FY 2023-24 before rising to 6.3% in FY 2024-25. The economic growth is primarily driven by robust domestic consumption, improvement in capacity utilization, and private investments on the back of the government''s growth-enhancing policies such as production-linked incentives (PLI) scheme, ''Make in India'' and ''Atmanirbhar Bharat'', increased allocation for infrastructure and logistics development and affordable housing among others. Further, the government is focused on the core and emerging sectors to enhance the ease of doing business to make India a global manufacturing hub. With multiple growth levers in place, the Indian economy is poised to reach US$ 5 trillion mark by FY 2026-27.
Source: IMF World Economic Outlook, April 2023; National
Statistical Office
Performance of the Company
Your Company registered total revenue of Rs. 4,481.1 crore in FY 2022-23 as against Rs. 3,768.1 crore in the previous year,
registering a 19 % YoY growth in value terms. While part of the growth resulted from commodity price increases, volume growth came in due to higher activity levels in Real Estate, Automobile and Communication sectors.
The segment-wise revenue growth was:
Electrical Cables by 15.4%
Communication Cables by 52.5%
Other products segment registered a growth of 10.8%
For more details, please refer to the Management Discussion and Analysis (MDA), forming part of this Report in "Annexure A", inter-alia, which deals adequately with the operations as well as the current and future outlook of the Company.
Exports stood at Rs. 39.9 crores as against Rs. 27.6 in the previous year, with geographies in focus being the Middle
East and Eastern Africa. With increasing focus and better market coverage, it is expected that exports will play a bigger role in the revenue pool over the years to come.
The short-term debt programs of your Company continue
to be rated by CRISIL. Since the last several years, these have been accorded the highest ratings that CRISIL issues (A1 ). CRISIL has also rated your Company''s long term debt offerings at AA /stable. During the year, no debt papers were issued. As on the date of this report, your Company continues to remain debt free.
Financial costs have been contained to the minimum required levels. The Company continues to meet all its financial commitments in a timely manner.
Based on the Company''s performance, the Directors are pleased to recommend a Dividend of Rs. 7.00 Per equity
share i.e., 350 % of the face value of Rs. 2 each, for approval of the members at the ensuing Annual General Meeting. The total dividend outgo would involve a cash outflow of Rs. 107.1 Crores.
In compliance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regualtions,2015
("SEBI Listing Regulations,2015") the Company has formulated Dividend Distribution Policy and the same is available on the Company''s website at https://finolex.com/wD-content/ uploads/2017/04/Dividend-Distribution-Policv.pdf
The Company has not transferred any amount to the reserves during the current financial year.
During the year, your Company has not invited, accepted or
renewed any fixed deposits from the public and accordingly, there is no principal or interest outstanding in respect thereof.
There has been no change in the nature of business of the
Company during the year under review.
As reported in the previous year, your Company had
committed a capex of Rs.500 crore over 18 months for enhancing manufacturing capabilities at Urse and Goa.
During the year, Electrical Wire capacity was enhanced at both Urse and Goa. Factory buildings for the E-Beam facility and additional OFC lines are nearing completion and will be populated with equipment soon thereafter - it is expected
that both these facilities would be operational by March 2024.
Joint Ventures, Subsidiaries and Associates:
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules 2014,
the statement containing salient features of the financial statements of the Company''s Joint Ventures / Associates (in form AOC-1) is attached to this Report as "Annexure G".
The Company does not have any subsidiaries.
Corning Finolex Optical Fiber Private Limited
Winding up formalities in respect of this JV are in progress and are awaiting final regulatory clearances. These are expected by end of Q2 for the Financial Year 2023-24.
Finolex J-Power Systems Limited
During the year, the JV made significant strides towards
achieving profitability - the JV bagged several orders during the year and has an order backlog of approximately Rs. 260 Cr going into the financial year 2023-24. Based on current trends, it is expected that the JV will be able to breakeven as well as become profitable going forward; during the year your Company infused Rs. 10.8 Crores as equity in the JV and the Company''s total participation in the JV remains at Rs. 231.3 Crores at the end of FY 2022-23.
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 the "Annexure F" to this Report.
In terms of provisions of Section 197(12) of Companies
Act, 2013 read with Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said rules are provided in the "Annexure F1" to this Report.
The following persons continued as Key Managerial Personnel during the Financial Year 2022-23.
Name |
Title |
Mr. Deepak Chhabria |
Executive Chairman |
Mr. Mahesh Viswanathan |
Chief Financial Officer |
*Mr. R. G. D''Silva |
Company Secretary & President (Legal) |
**Mr. Siddhesh Mandke |
Company Secretary & General Manger (Legal) |
*Mr. R.G. D''Silva, Company Secretary of the Company retired from service on 03rd April, 2023.
**Mr. Siddhesh Mandke is appointed as Company Secretary with effect from 4th April, 2023.
The Company engaged approximately 1546 and 1589 permanent employees as at 31st March, 2023 and 2022, respectively. The number of flexible (contractual, trainee
and temporary) employees as at 31st March, 2023 was 1608, compared to 1588 as of 31st March 2022.
The Company has always and responsibly followed the corporate governance guidelines and best practices sincerely. As a responsibility and service to all its shareholders, the Company promptly discloses timely and accurate information regarding its operations and performance, as well as the leadership and governance of the Company. Your Company is in full compliance with the Corporate Governance guidelines as set out in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR Regulations") and is committed to good corporate governance. Accordingly, all Directors and Senior Management employees confirm in writing their adherence to the Company''s Code of Conduct.
A separate report on Corporate Governance ("Annexure B") is provided together with a Certificate from the Secretarial Auditors of the Company regarding compliance with
conditions of Corporate Governance as "Annexure C", as mandated under SEBI LODR Regulations, 2015. There are no qualifications, reservations or adverse remarks or disclaimers made by the auditor in their report.
Corporate Social Responsibility (CSR)
Your Company strives to provide best products and services not only to its customers, employees and shareholders, but
also to the society as a whole. Your Company commits itself to utmost care and help for sections of the society in need of such a hand and this is visible through the CSR initiatives undertaken by the Company. Your Company undertakes such CSR related activities which promote women empowerment, better health management, sanitation, education and poverty alleviation.
Annual Report on CSR, forming part of this Report, inter-aiia, provides the details of all CSR activities during the year under review and other related information is given as an "Annexure I" to this Report.
The Company''s Policy on CSR as approved by the Board is also available on the website of the Company at https://finoiex. com/wD-content/uDioads/2023/03/CSR-Poiicv.Ddf.
Management Discussion and Analysis Report (MDAR)
Management Discussion and Analysis Report for the financial year under review, as stipulated under regulation 34 (2) (e) of SEBI Listing Regulations, 2015 is presented in a separate section forming part of this Annual Report.
Business Responsibility and Sustainability Report:
Business Responsibility and Sustainability Report for the financial year under review, as stipulated under regulation 34 (2) (f) of SEBI Listing Regulations, 2015 is presented in a separate section forming part of this Annual Report as Annexure J.
Environmental, Social and Governance (ESG):
Recognizing its role as a responsible corporate citizen, the Company is keenly aware of its environmental and societal obligations. For more information on our ESG initiatives, please refer to the Business Responsibility and Sustainability Report (BRSR) Annexure J and the Corporate Governance Report Annexure B.
Directors:
The Board of Directors of the Company comprises of 6 (Six) Directors out of which 3 (Three) Directors are appointed as Independent Directors, 2 (Two) Directors are appointed as
Whole Time Directors out of which 1 is Executive Chairman and 1 (One) Director is appointed as a Non Independent Non-Executive Director.
⢠The Shareholders have, at the 54th Annual General Meeting held on 28th September, 2022, approved the appointment of Mr. Sriraman Raghuraman (DIN 00228061), Mr Zubin Billimoria (DIN 07144644) and Mrs Vanessa Singh (DIN 09342022) as Independent Directors of the Company for a period of 5 (Five) years with effect from 30th September, 2021.
⢠At the same meeting, the Shareholders have also confirmed the appointment of Mr Nikhil Naik (DIN 00202779) as Non Independent Non-Executive Director, liable to retire by rotation with effect from
30th September, 2021.
⢠Mr. Ratnakar Barve (DIN 09341821) was appointed as an Additional Director of the Company in the category of Executive Director with effect from 30th September, 2021. The Shareholders at the 54th Annual General Meeting held on 28th September, 2022 have approved his appointment as an Executive Director of the Company with effect from 30th September, 2021.
⢠Mr. Shishir Desai (DIN 01453410) and Mr. Aakash Gupta (DIN 00533766) were appointed as Additional Director in the category of Non-Executive Directors with effect from 01st October, 2022. However, they resigned due to other commitments and ceased to be the Directors with effect from 30th December, 2022.
The Board places on record its sincere appreciation towards the contribution made by them during their tenure as directors of the Company.
Mr. Nikhil Manohar Naik (DIN 00202779) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. A resolution proposing his reappointment, for the consideration and due approval of the Members at the ensuing AGM is included in the notice convening the AGM.
Mr. Deepak Chhabria (DIN 01403799) Executive Chairman completed his current term of office on 30th June 2023. Pursuant to the recommendation of the Nomination and Remuneration Committee, the Board at its meeting of 29th June 2023, approved his re-appointment for a further period of five years effective 1 st July 2023. The terms and conditions of his re-appointment are being put up to the Members for their approval at the ensuing AGM. Accordingly, suitable resolution which appears in the Notice of the ensuing AGM has been proposed for the consideration and due approval of Members.
Compliance under the Companies Act, 2013
Pursuant to Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules of 2014, your Company
has complied with the requirements. The details of such compliances are enumerated below:
⢠Web link to the Annual Return: Pursuant to Section
92 (3) of the Act and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, the annual return is available on the website of the Company at httDs://finolex.com/wD-content/uDloads/2023/02/
⢠Number of meetings of the Board: The Board met on 9 (Nine) occasions during the year. The details of the meetings are furnished in the Report on Corporate Governance which is attached as "Annexure B" to this Report.
⢠Directors'' Responsibility Statement: Pursuant to
Sections 134(3)(c) and134(5) of the Companies Act, 2013, (the "Act"), the Directors, to the best of their
knowledge and belief and according to the information and explanations provided to them, confirm that:
- In the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same.
- 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 the end of the financial year and of the profit and loss of the Company for that period.
- the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
- the Directors have prepared the annual accounts
on a going concern basis.
- the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and;
- the Directors have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively.
⢠Declaration By Independent Directors:
The Company has received necessary declarations from each Independent Director under Section 149(7) of the Act, that he/she meets the criteria of Independence laid down under Section 149(6) of the Act and Regulation 25 of the SEBI Listing Regulations, 2015.
⢠Nomination and Remuneration Policy:
The Board of Directors have framed the policy which lays down a framework in relation to Appointment and Remuneration of Directors, Key Managerial Personnel of the Company including the criteria for determining qualifications, selection and appointment. Further details are provided in the Corporate Governance Report which is attached as "Annexure B" to this Report.
The Nomination and Remuneration Policy is available on the website of the Company at https://finolex. com/wD-content/uDloads/2023/08/Nomination-and-Remuneration-Policv.pdf.
Pursuant to the relevant provisions of Companies Act, 2013, the Independent Directors at their
meeting dated 15th March 2023 without the participation of the non-independent directors and Management, considered and evaluated the Board''s performance, performance of the Chairman and other non-independent directors. The evaluation was performed taking into consideration the various aspects of the Board''s functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance. The Board of Directors expressed its satisfaction with the evaluation process.
⢠Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013:
During the year, the Company has given corporate guarantee to the extent of Rs. 106.8 Cr to Axis Bank,
in respect of loans availed by Finolex J-Power Systems Limited - please refer Note no. 32 A III (b) of Standalone Financial Statements which form part of the Notes to the financial statements provided in the Annual Report.
As mentioned elsewhere, an amount of Rs. 10.8 Crores
was infused as equity investment in the Finolex J-Power Systems Limited.
⢠Particulars of Contracts or arrangements with related parties:
All transactions entered into by the Company with related parties were in the ordinary course of business and on an arm''s length basis. Each of these transactions was reviewed by the Audit Committee prior to being entered into and where necessary, was approved by the Board of Directors and the Members. In respect of transactions of a repetitive nature, an omnibus approval was obtained from the Audit Committee. The Company
has not entered into material transactions during the Financial Year 2022-23. At every quarterly meeting, the Audit Committee reviews the transactions that were entered into during the immediately preceding quarter. Details of related party transactions have been disclosed under Note 35A to the financial statements. Details of the same are also reproduced in Form AOC-2 which is attached as an âAnnexure H" to this Report.
The Company''s Policy on transactions with related parties as approved by the Board is also available on the website of the Company at httosV/finolex. com/wD-content/uploads/2023/03/Related-Darty-
⢠Material changes and commitments affecting the financial position of the Company which have occurred between 31st March, 2023 and date of this report:
There are 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.
⢠Significant and material orders passed by the regulators or Court or Tribunals impacting the going concern status of the Company:
There are no significant and material orders passed by the Regulators or Courts or Tribunals that would impact the going concern status of the Company or the Company''s operations in the future.
⢠Adequacy of Internal Financial Controls with reference to the Financial Statements:
Having regard to Rule 8 (5) (viii) of the Companies (Accounts) Rules, 2014, the details in respect of
adequacy of internal financial controls with reference to the financial statements of the Company are as follows:
Your Company maintains appropriate systems of internal control including monitoring procedures. These internal
control systems ensure reliable and accurate financial reporting, safeguarding of assets, keeping constant check on cost structure and adhering to management policies. The internal controls are commensurate with the size, scale and complexity of the Company''s operations and facilitate timely detection of any irregularities and early remedial steps against factors such as loss from unauthorized use and disposition. The Company policies, guidelines and procedures provide for adequate checks and balances which are meant to ensure that all transactions are authorized, recorded and reported correctly. The internal controls
are continuously assessed and improved / modified to meet the changes in business conditions, statutory and
accounting requirements
Constant monitoring of the effectiveness of controls is ensured by periodical audits performed by an in-house internal audit team as well as assignments entrusted to M/s. Ernst & Young. Both these teams in their respective assignments, test and review controls, challenge business processes for their robustness and benchmark practices in line with industry norms.
The Audit Committee regularly meets and reviews
the results of the various internal control audits both with the Auditors as well as with the respective Auditees. The Audit Committee is apprised of the findings as well as the corrective actions that are taken. Periodical meetings between the Audit Committee and the Company Management also ensure the necessary checks and balances that may need to be built into the control system.
Your Company has set up a Risk Management Committee of the Board of Directors which comprises Mr. Zubin Bilimoria-Chairman, Mr. Deepak Chhabria, Mrs. Vanessa Singh, Mr. Ratnakar Brave and Mr. Mahesh Viswanathan being other members of the Committee. More details of the risks faced by the Company are available in the Management Discussion and Analysis (MDA), attached as "Annexure A" to this Report. The Risk Management policy is available at the Company''s website at httDs://fino[ex.com/wD-content/uD[oads/2023/03/ Risk-Manaoement-Po^icv.Ddf
⢠Vigil Mechanism / Whistle Blower Policy:
As required under Section 177 (9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings
of Boards and its Powers) 2014 and Regulation 22 of the SEBI Listing Regulations 2015, the Company has
adopted a policy on vigil mechanism / whistle blower. The policy provides direct access to the Chairman of the Audit Committee, in case any employee should choose to report or bring up a complaint. Your Company
affirms that no one has been denied access to the Chairman of the Audit Committee. There were no complaints received during the year. Brief details about the policy are provided in the Corporate Governance Report which is attached as an "Annexure B" to this Report. The Whistle Blower policy is available at the Company''s website at https://finolex.com/wp-content/ uploads/2023/08/Whistle-Blower-Policv.Ddf
⢠Prevention of Sexual Harassment Policy:
The Company has in place a policy on prevention of sexual harassment in line with the requirements of the
Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal
Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
Sr. No |
Particulars |
Status |
1 |
No of Complaints received in the year |
0 |
2 |
No of Complaints disposed-off in the year |
NA |
3 |
Cases pending for more than 90 days |
NA |
4 |
No. of workshops / awareness programs conducted |
2 |
5 |
Nature of action by employer or district officer, if any |
NA |
M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Firm
Registration No.1 17366W /W100018) were appointed as Statutory Auditor of the Company at the 54th Annual General Meeting (AGM) of the Members held on 28th September, 2022 pursuant to Sections 139 to 144 of the Companies Act, 2013 and Rules 3 to 6 of the Companies (Audit And Auditors) Rules, 2014, for a term of 5 (Five) years to hold office from the conclusion of the 54th (Fifty- Fourth) AGM, till the conclusion of the 59th (Fifty- Ninth) Annual General Meeting to be held in the financial year 2027-28.
Further as required under the provisions of Section 139
and Section 141 of the Companies Act, 2013 read with the Companies (Accounts) Rules 2014, the said Auditors have confirmed their consent as well as eligibility to continue to
act as Auditor of the Company.
There are no qualifications, reservations or adverse remarks made by M/s. Deloitte Haskins & Sells LLP (Firm Registration No.1 17366W/W100018), Statutory Auditors, in their report for the Financial Year ended on 31st March, 2023. The Notes on Financial Statement referred to in the Auditors'' Report are self-explanatory. Pursuant to the provisions of Section 143 (12) of the Act, the Statutory Auditors have not reported any incident of fraud to the Audit Committee during the year under review.
As per the requirement of the Central Government and pursuant to Section 148 of the Companies Act, 2013 read
with Companies (Cost Records and Audit) Rules of 2014 as amended from time to time, your Company has been carrying out an audit of cost records every year. At the previous
Annual General Meeting, the members had approved the appointment of M/s. Joshi Apte & Associates as Cost Auditors, for the Financial Year 2022-23, at a remuneration of Rs. 6 lakh plus GST, as applicable and reimbursement of out of pocket expenses.
In accordance with the provisions of Section 204 of the
Companies Act, 2013 and the Rules made there under, M/s Jog Limaye & Associates, a firm of Company Secretaries in practice, was appointed by the Board to conduct the Secretarial Audit of the Company for the Financial Year 2022-23.
Their Report dated 24th May 2023 is attached as an âAnnexure D" to this report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.
The Institute of Company Secretaries of India had revised the Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2) with effect from 1st October, 2017. Your Company is in compliance with the said secretarial standards.
Your Company''s equity shares are listed on the two premier stock exchanges of the country namely BSE Limited and
National Stock Exchange of India Limited. Your Company had issued Global Depository Receipts which are listed on the Luxembourg Stock Exchange. Your Company has not issued any Non-Convertible Debentures ("NCDs") in
Financial Year 2022-23 and no NCDs were outstanding as on 31st March 2023.
1. During the year, there were no transaction requiring
disclosure or reporting in respect of matters relating to:
a) Details relating to deposits covered under Chapter V of the Act;
b) Issue of equity shares with differential rights as to
Dividend, voting or otherwise;
c) Issue of shares (Including Sweat equity shares) to
employees of the Company under any scheme, save and except Employee Stock Options Schemes
referred to in this Report;
d) Raising of funds through preferential allotment or qualified institutions placement;
e) Pendency of any proceeding against the Company under the Insolvency and Bankruptcy Code, 2016
2. A statement regarding opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the Independent Directors appointed during the year - The Board of Directors is of the opinion that the Independent Non-Executive Directors are of integrity and possess the requisite expertise and experience (including the proficiency).
3. No Company has become ceased or ceased to be a subsidiary or associate or joint venture company of the Company during the year.
4. Cash flow statement for the Financial Year March 2023 is attached to the Balance sheet.
5. The Company has duly constituted the following mandatory committees in terms of the provisions of the Act & SEBI Listing Regulations, 2015 read with rules
framed thereunder viz.
i. Audit Committee
ii. Nomination and Remuneration Committee
iii. Stakeholder''s Relationship Committee
iv. Corporate Social Responsibility
v. Risk Management Committee
The Composition of all above Committees, number of meeting held during the year review, brief terms of reference and other details have been provided in the Corporate Governance Report which forms part of this Annual Report.
All recommendations made by the Committees were
accepted by the Board.
Conservation of Energy, Technology Absorption,
Foreign Exchange Earnings and Outgo and Research and Development
Information on conservation of energy, technology absorption, foreign exchange earnings & outgo and the Research and Development activities carried out by the Company as required to be given pursuant to Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is attached to this Report as an "Annexure E".
Investor Education and Protection Fund (IEPF)
Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, T ransfer and Refund) Rules, 2016 ("the IEPF Rules"), all unpaid
or unclaimed dividends are required to be transferred by the Company to the IEPF, established by the Government of
India, after the completion of seven years. Further, according to the IEPF Rules, the shares on which dividend which are not subject to any legal requirements has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority. The Company has transferred 17,606 shares on which dividends were unclaimed for seven consecutive years as per the requirements of the IEPF Rules. Mr. Mahesh Viswanathan is appointed as a nodal officer of the company and his details are provided on https://finolex.com/.
The members who have a claim on above dividends and shares may claim the same from IEPF Authority by submitting
an online application in Form No. I EPF-5 available on the website www.iepf.aov.in and sending a physical copy of the same, duly signed to the Company, along with requisite documents enumerated in the Form No. IEPF-5. No claims
shall lie against the Company in respect of the dividend / shares so transferred.
However, pursuant to Section 124 (5) of the Act, the unpaid dividend that will be due for transfer to the IEPF are as follows: |
||||
Type and year of dividend declared/paid |
Date of declaration of dividend |
% of dividend to face value |
Unclaimed dividend amount as on 31st March, 2023 |
Due for transfer to IEPF |
Dividend 2015-16 |
8th September, 2016 |
125% |
38,06,578.00 |
15th October, 2023 |
Dividend 2016-17 |
28th September, 2017 |
150% |
36,13,755.00 |
3rd November, 2024 |
Dividend 2017-18 |
25th September, 2018 |
200% |
47,54,500.00 |
31st October, 2025 |
Dividend 2018-19 |
18th September, 2019 |
225% |
51,39,329.00 |
24th October, 2026 |
Dividend 2019-20 |
29th September, 2020 |
275% |
41,20,362.50 |
4th November, 2027 |
Dividend 2020-21 |
29th September, 2021 |
275% |
45,30,417.50 |
4th November, 2028 |
Dividend 2021-22 |
28th September, 2022 |
300% |
38,47,056.00 |
3rd November, 2029 |
Disclosure of Agreements in terms of Regulation 30 A (2) of SEBI Listing Regulations, 2015
The details of agreements entered in to by the promoters of the listed entity whose purpose and effect is to impact the management or control of the listed entity that subsist as on the date as date of notification i.e. 13th July 2023 of clause 5A to para A of part A of schedule III of SEBI Listing Regulations, 2015 including their salient features are given in an "Annexure K"
The link to the webpage where the complete details of such agreements are available: https://finolex.com/wp-content/ uDloads/2023/08/Listino-Qblioations-and-Disclosure-
Cautionary Statement
Statements in this Boards'' Report and Annexure may contain forward looking statements within the meaning of applicable Securities laws and regulations. Actual results could differ materially from those expressed or implied. Various factors including commodity prices, cyclical demand, changes in Government regulations, tax laws, general economic development could all have a bearing on the Company''s operations and would impact eventual results.
Details of Application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016)
Your Company neither made any application nor any proceeding is pending under the Insolvency and Bankruptcy
Code, 2016 during the year.
The details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof
Your Company has not obtained any one-time settlement of loan from the Banks or Financial Institutions.
The Company''s Directors are grateful to the Central and State Governments, Statutory Authorities, Local Bodies, Banks and Financial institutions for their continued support and cooperation. Your Directors warmly acknowledge the trust and confidence reposed in your Company by its channel partners, dealers, customers and construction organizations in supporting its business activities and growth. Your Directors express their gratitude to the other business associates for their unstinting support. Your Directors value the commitment and contribution of the employees towards the Company. Last but not the least; your Directors are thankful to the Members for extending their constant trust and for the confidence shown in the Company.
For and on behalf of the Board of Directors Finolex Cables Limited
Date: 12th August, 2023 Executive Chairman
Mar 31, 2022
Your Board of Directors have pleasure in presenting the 54th Annual Report and Audited Accounts of the Company for the Financial Year ended March 31, 2022.
The summarized financial results for the year are as under:
PARTICULARS |
(Rs. in Crores) standalone consolidated |
|||
2021-22 |
2020-21 |
2021-22 |
2020-21 |
|
INCOME |
||||
Revenue From Operations (Net) |
3768.1 |
2768.1 |
3768.1 |
2768.1 |
Other Income |
151.8 |
77.0 |
71.5 |
77.0 |
Total |
3919.9 |
2845.1 |
3839.6 |
2845.1 |
expenditure |
||||
Material Costs |
2,966.3 |
2,051.4 |
2,966.3 |
2,051.4 |
Employee Benefit Expenses |
146.1 |
137.9 |
146.1 |
137.9 |
Finance Costs |
1.5 |
0.8 |
1.5 |
0.8 |
Depreciation, Amortization and impairment |
38.8 |
39.0 |
38.8 |
39.0 |
Other Expenses |
240.6 |
224.0 |
227.3 |
208.6 |
Total |
3,393.3 |
2,453.0 |
3380.0 |
2,437.7 |
Profit Before Tax |
526.6 |
392.1 |
459.6 |
407.5 |
Share of Net Profits of an Associate and Joint Ventures accounted for using equity Method |
- |
- |
327.0 |
223.4 |
Profit Before Tax |
526.6 |
392.1 |
786.6 |
630.9 |
Tax Expenses: |
||||
Current Tax |
127.9 |
112.6 |
127.9 |
112.6 |
Deferred Tax |
(5.9) |
(3.4) |
59.6 |
56.8 |
Total Tax |
122.0 |
109.2 |
187.5 |
169.4 |
Profit After Tax |
404.6 |
282.9 |
599.1 |
461.5 |
Total Other Comprehensive Income/(Expenses) For the year |
(7.4) |
33.3 |
(7.4) |
33.5 |
Total Comprehensive Income for the year |
397.2 |
316.2 |
591.7 |
494.9 |
Global Economy
After the pandemic-related disruptions and deep recession in 2020, the global economy was seen recovering in the year 2021. However, the emergence of newer Covid variants and the Russia-Ukraine crisis led to extensive loss of lives and derailed the economic recovery. Global growth is projected to decline from 6.1% in 2021 to 3.6% in 2022 and 2023. Moreover, at the end of 2021, inflation in several regions surged to multi-decadal highs. A key driver of inflation across
the world has been the steep surge in energy, food, and commodity prices.
Growth across Advanced Economies (AEs) is expected to moderate to 3.3% in 2022 from 5.2% in 2021. Rising inflation and gradual withdrawal of fiscal and monetary policy support have been dragging growth in the United States (US). The rebound that was underway in Europe has suffered a setback due to the Russia-Ukraine conflict with inflation at unpredictable levels. Emerging Markets and Developing
Economies (EMDEs) are expected to record a growth of 3.8% as against 6.8% growth registered in 2021. Developments in
China continue to dominate the outlook for Asia, especially for emerging Asia. The risk of new COVID-19 variants and consequent lockdowns in China has led to mobility restrictions, supply chain disruptions, and subdued consumption. Central banks worldwide have started tightening their stances in the second half of 2021 in response to adverse macroeconomic conditions, including rising inflationary pressures.
Source: IMF World Economic Outlook April 2022 Indian Economy
India''s underlying economic fundamentals remain strong and despite the short-term turbulences caused by the emergence of newer variants, supply-chain disruptions arising out of the Russia-Ukraine crisis, and rising inflation, the impact on the long-term outlook will be marginal. The results of growthenhancing policies and schemes such as production-linked incentives and increased infrastructure spending will start kicking in from 2023, leading to a stronger multiplier effect on jobs and income, higher productivity and efficiency âall leading to accelerated economic growth. As per International Monetary Fund (IMF), India''s Gross Domestic Product (GDP) grew by 8.7% in FY 2021-22, and growth is expected at 8.2% in FY 2022-23. The ongoing vaccination drives, restart of investment cycle with significant spending on infrastructure, emphasis on manufacturing and stronger digitisation and continued recovery in consumption, accentuated by work-from-home along with rising rural incomes and affordability will drive significant growth in the Indian economy.
Huge government funding in public infrastructure, thrust on
railway infrastructure, higher allocation towards affordable housing - are all expected to encourage growth and attract private investments through a strong multiplier effect in the industry. However, supply-side bottlenecks persist with elevated commodity costs and oil prices. The availability of budgetary space to ramp up capital spending, advantages from supply-side reforms, and continued export growth will stimulate growth in FY 2022-23.
Source: IMF World Economic Outlook April 2022 Performance of the Company
Finolex registered total revenue of Rs 3768.1 crore in FY
2021-22 as against Rs 2,768.1 crore in the previous year, registering a 36.1 % YoY growth in value terms. While part of the growth resulted from commodity price increases, volume growth came in due to support from various reforms undertaken by the government, such as significant increase in capital expenditure on infrastructure, thrust on domestic manufacturing and technology-enabled development, and recovery in consumer demand among others.
The segment-wise revenue growth was:
Electrical Cables by 38.2%
Communication Cables by 18.1%
Other products segment registered a growth of 55.2%
For more details, please refer to the Management Discussion and Analysis (MDA), forming part of this Report in Annexure A,
inter-alia, which deals adequately with the operations as well as the current and future outlook of the Company.
Exports stood at Rs 27.6 crores as against Rs 30.9 in the previous year, reflecting lower economic growth in the export markets for your Company''s products as well as supply chain issues still being faced on shipping availability etc.
The short-term debt programs of your Company continue to
be rated by CRISIL. Since the last few years, these have been accorded the highest ratings that CRISIL issues (A1 ). CRISIL has also rated your Company''s long term debt offerings at AA /stable . During the year, no debt papers were issued. As on the date of this report, your Company continues to remain debt free.
Financial costs have been contained to the minimum required levels. The Company continues to meet all its financial commitments in a timely manner.
Based on the Company''s performance, the Directors are pleased to recommend a Dividend of Rs. 6.00 per equity share i.e., 300 % of the face value of Rs. 2 each, for approval of the members at the ensuing Annual General Meeting.
The total dividend outgo would involve a cash outflow of Rs. 91.77 Crores.
As required by the SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2016, the
Company has formulated and adopted a dividend distribution policy which is available on the Company''s website www. finolex.com
The Company has not transferred any amount to the reserves during the current financial year.
During the year under review, the Company has not accepted any deposit covered under Chapter V of the Companies Act, 2013
There is no change in the nature of business of the Company
during the year under review.
As reported in the previous year, your Company had committed a capex of Rs.200 crore over 18 months for
enhancing manufacturing capabilities at Urse and Goa. This capex is directed towards enhancing production capabilities to meet the requirements of the Construction , Solar Power and the Automotive industries, bringing in-house certain value additions which were outsourced earlier and further expansion of the Optic Fiber line. Expansion work is in progress and certain lines will go on stream in Q2 of 2022-23.
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules 2014,
the statement containing salient features of the financial statements of the Company''s Joint Ventures / Associates (in form AOC-1) is attached to this Report as Annexure G.
The Company does not have any investments in subsidiaries.
As reported during the year, your Company and the JV partner M/S Corning France SAS, have reached an agreement to wind up the JV in view of the fact that the purpose for which the JV had been originally formed had been achieved and that the relationship between the partners had reached a level of maturity that a JV structure was not felt necessary any longer. Consequently, the JV has applied for voluntary liquidation and the process of winding up has commenced. It is expected that subject to regulatory approvals, this process would be completed by December 2022 at which point in time the available surplus with the JV would be distributed.
The Government has been vocal and visual with its progressive outlook towards the infrastructure development initiatives such as smart cities, economic corridors, logistics park, housing projects, metros etc., and power infrastructure plays
an imminent role in such development. With the increasing number of tenders for High Voltage (HV) and Extra High Voltage (EHV) power transmission lines, the JV foresees great potential for growth.
Based on its performance and outreach, it is expected that the JV will be able to break even as well as become profitable going forward; however, it would need financial support through Equity infusion in the short term. There was no
capital infusion during the year and the Company''s total participation in the JV remains at Rs. 220.5 Crores at the end of FY 2021-22.
The JV''s long-term potential and outlook indeed seem strong, but in the short term, it has been facing net-worth erosion and therefore your Company has recognized a diminution in the value of its investment of Rs. 9.8 Crores during the year
under review. The Company however is confident that the JV will be turning cash positive in the coming years.
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 the Annexure F to this Report.
In terms of provisions of Section 197(12) of Companies
Act, 2013 read with Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annexure F to this Report.
The following persons continued as Key Managerial Personnel during the year 2021-22.
Name |
Title |
Mr. D K Chhabria |
Executive Chairman |
Mr. Ratnakar Barve |
Executive Director |
Mr. Mahesh Viswanathan |
Chief Financial Officer |
Mr. R G D''Silva |
Company Secretary & President (Legal) |
The Company engaged approximately 1589 and 1649 permanent employees as at 31st March, 2022 and 2021, respectively. The number of flexible (contractual, trainee and temporary) employees as at 31st March, 2022 was 1413.
The Company has always and responsibly followed the
corporate governance guidelines and best practices sincerely. As a responsibility and service to all its shareholders, the Company promptly discloses timely and accurate information regarding its operations and performance, as well as the leadership and governance of the Company. Your Company is in full compliance with the Corporate Governance guidelines as set out in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR Regulations") and is committed to good corporate governance. Accordingly, all Directors and Senior Management employees confirm in writing their adherence to the Company''s Code of Conduct.
A separate report on Corporate Governance (Annexure B) is provided together with a Certificate from the Statutory/
Secretarial Auditors of the Company regarding compliance with conditions of Corporate Governance as Annexure C, as mandated under SEBI LODR Regulations, 2015. There are no qualifications, reservations or adverse remarks or disclaimers made by the Secretarial Auditor in their report.
Your Company strives to provide best products and services not only to its customers, employees, shareholders and society as a whole. Your Company commits itself to utmost
care and help for sections of the society in need of such a hand and this is visible through the CSR initiatives undertaken by the Company.
During 2021-22, The Company undertook the following CSR
activities:
⢠Donation to Agricultural Development Trust, Pune
⢠Donation to Maharaja Jagat Singh Medical Relief Society
⢠Donation to ABMM Maheshwari Relief Foundation -Mumbai
⢠Donation to IIME - International Institute of Management & Entrepreneurship - Jaipur
⢠Free OPD Medical centre in Khandala, Pune through Sadhu Vaswani Mission
⢠Project for helping Diabetic and needy children
⢠Medical Ambulance for below poverty line people
⢠Helping children of farmer who had committed suicide
due to droughts through Snehawan
⢠Others
Annexure ''I'' - Annual Report on CSR, forming part of this
Report, inter-alia, provides the details of all CSR activities during the year under review and other related information.
1. The current Board of Directors of the Company comprises 6 (Six) Directors, of which 3 (Three) Directors
are Additional Directors appointed as Independent Directors, 2 (Two) Directors are Additional Directors appointed as Non-Independent Directors and 1 (One) Director is the Executive Chairman of the Company. In terms of Section 152 of Companies Act, 2013 (the "Act") read with applicable provisions of the Articles of Association ("AoA") of the Company, Independent Directors and Directors who are appointed as Chairman, Executive Chairman or Managing Director of the Company are not liable to retire by rotation. Further, the offices of Additional Directors appointed by the Board of Directors are valid upto ensuing AGM and their
appointment as Directors is subject to the approval of Members of the Company in the said AGM. Therefore, there is no Director who is liable to retire by rotation in
this AGM.
2. Mr. Padmanabh Barpande, Mr. Avinash Khare, Mrs. Firoza Kapadia, Mr. Prasad Deshpande and Mr. Sunil Upmanyu, Directors had offered themselves for appointment at the AGM held on 29th September, 2021 but even though the majority of numbers of shareholders voted in favour of the said resolutions, two major Corporate Shareholders voted contrary to the mandate in their constitutional documents/concluded contractual commitments and voted against the resolutions at the said AGM. The clarification in this regard is given under point no. 2.1 in Corporate Governance Report at Annexure B.
3. The following Directors on the Board of Directors of the
Company (the "Board") namely: Mr Ratnakar P Barve, Executive Director - Operations, Mr Zubin F Billimoria, Independent Director, Mr Sriraman Raghuraman, Independent Director, Mrs Vanessa Singh, Independent Women Director and Mr Nikhil M Naik, Non Independent Non-Executive Director hold office with effect from 30th September, 2021 upto the date of the ensuing AGM of the Company. The respective resolutions proposing the appointment of each of these five Directors has, pursuant to the recommendation of the Nomination and Remuneration Committee been duly approved and recommended by the Board for consideration and due approval of the Members at ensuing AGM and is included in the Notice issued for ensuing AGM.
The requisite details regarding their appointment are set out in the Notice for the ensuing AGM.
Pursuant to Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules of 2014, your Company
complied with the requirements. The details of such compliances are enumerated below:
⢠Web link to the Annual Return: The Annual Return of the Company is available at the Company''s website at www.finolex.com
⢠Number of meetings of the Board: The Board met on Six (6) occasions during the year. The details of the meetings are furnished in the Report on Corporate Governance which is attached as Annexure B to this
Report.
⢠Directors'' Responsibility Statement: Pursuant to
Sections 134(3)(c) and 134 (5) of the Companies Act, 2013, (the "Act"), the Directors, to the best of their
knowledge and belief and according to the information and explanations provided to them, confirm that:
- In the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same.
- the Directors have selected such accounting
policies and applied them consistently and made judgements 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 the end of the financial year and of the profit and loss of the Company for that period
- the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities
- the Directors have prepared the annual accounts on a going concern basis;
- the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
- the Directors have devised proper systems to ensure compliance with the provisions of ail
applicable laws and that such systems were adequate and operating effectively.
⢠Remuneration and Nomination Policy: The Board of Directors has framed the policy which lays down a framework in relation to Appointment and Remuneration of Directors, Key Managerial Personnel and Senior Executives of the Company including the criteria for determining qualifications, selection and appointment. Further details are provided in the Corporate Governance Report which is attached as Annexure B to this Report.
⢠Board Evaluation: Pursuant to the relevant provisions of Companies Act, 2013, the Independent Directors
at their meeting dated 29th March, 2022 without the participation of the non-independent directors and Management, considered and evaluated the Board''s performance, performance of the Chairman and other non-independent directors. The evaluation was performed taking into consideration the various aspects of the Board''s functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance. The Board of Directors expressed its satisfaction with the evaluation process.
year, no further equity investment in the Company''s
JV - M/s Finolex J-Power Systems Limited.
transactions entered into by the Company with related parties were in the ordinary course of business and on an arm''s length basis. Each of these transactions was reviewed by the Audit Committee prior to being entered into and where necessary, was approved by the Board of Directors and the Members. In respect of transactions of a repetitive nature, an omnibus approval was obtained from the Audit Committee and Members where necessary. At every quarterly meeting, the Audit Committee reviews the transactions that were entered into during the immediately preceding period. Details of related party transactions have been disclosed under Note 35 and Note 35A to the financial statements. Details of the same are also reproduced in Form AOC 2 which is attached as Annexure H to this Report. The Company''s Policy on transactions with related parties as approved by the Board is also available on the website of the Company at www.finolex.com.
⢠Material changes and commitments affecting the financial position of the Company which have occurred between 31st March, 2022 and (date of this report):
There were no material changes and commitments affecting the financial position of the Company between the end of the financial year (31st March, 2022) and date of this Report (28th May, 2022)
⢠Significant and material orders passed by the regulators or Court or Tribunals impacting the going concern status of the Company: There are no significant and material orders passed by the Regulators or Courts or Tribunals that would impact the going concern status of the Company or the Company''s operations in the future.
8 (5) (viii) of the Companies (Accounts) Rules, 2014, the details in respect of adequacy of internal financial controls with reference to the financial statements of
the Company are as follows:
⢠Your Company maintains appropriate systems of internal control including monitoring procedures. These internal control systems ensure reliable and accurate financial
reporting, safeguarding of assets, keeping constant check on cost structure and adhering to management policies. The internal controls are commensurate
with the size, scale and complexity of the Company''s operations and facilitate timely detection of any irregularities and early remedial steps against factors such as loss from unauthorized use and disposition. Company policies, guidelines and procedures provide for adequate checks and balances which are meant to ensure that all transactions are authorized, recorded and reported correctly. The internal controls are continuously assessed and improved / modified to meet changes in business conditions, statutory and accounting requirements
⢠Constant monitoring of the effectiveness of controls is ensured by periodical audits performed by an in-house internal audit team as well as assignments entrusted to M/S Ernst & Young. Both these teams in their respective assignments, test and review controls, challenge business processes for their robustness and benchmark practices in line with industry norms.
⢠The Audit Committee regularly meets and reviews the results of the various internal control audits both with
the Auditors as well as with the respective Auditees. The Audit Committee is apprised of the findings as
well as the corrective actions that are taken. Periodical meetings between the Audit Committee and the Company Management also ensure the necessary checks and balances that may need to be built into the control system.
⢠Risk Management Policy: Your Company has set up a
Risk Management Committee of the Board of Directors which comprises Mr. Zubin Bilimoria, Mr. D. K. Chhabria,
Mr. Mahesh Viswanathan, Mrs. Vanessa Singh and Mr. Ratnakar Barve. More details of the risks faced by the Company are available in the Management Discussion and Analysis (MDA), attached as Annexure ''A'' to this Report.
under Section 177 (9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Boards and its Powers) Rules, 2014 and Regulation 22 of the SEBI
LODR Regulations, the Company has adopted a policy on vigil mechanism / whistle blower. The policy provides direct access to the Chairman of the Audit Committee in case any employee should choose to report or bring up
a complaint. Your Company affirms that no one has been denied access to the Chairman of the Audit Committee and also that no complaints were received during the year. Brief details about the policy are provided in the Corporate Governance Report which is attached as
Annexure B to this Report. Also, the policy is available at the Company''s website at www.finolex.com.
⢠Prevention of Sexual Harassment Policy: The Company has in place a policy on prevention of sexual harassment in line with the requirements of the Sexual Harassment
of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee
has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
During the year under review, Two complaints were received.
M/s Deloitte Haskins & Sells LLP, Chartered Accountants will complete their present term on conclusion of the Fifty Fourth Annual General Meeting of the Company. The Auditors'' Report does not contain any qualification, reservation, adverse
remark or disclaimer. The Notes on financial statement referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.
The Audit Committee and the Board has recommended the appointment of Deloitte Haskins & Sells LLP, Chartered Accountants as Auditors of the Company, for a period of five consecutive years from the conclusion of Fifty Fourth Annual General Meeting till the conclusion of Fifty Ninth Annual General Meeting of the Company.
Further as required under the provisions of Section 139
and Section 141 of the Companies Act, 2013 read with the Companies (Accounts) Rules 2014, the said Auditors have confirmed their consent as well as eligibility to continue to
act as Auditor of the Company.
Necessary resolution is being placed before the Members for
approval.
As per the requirement of the Central Government and pursuant to Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) rules of 2014 as
amended from time to time, your Company has been carrying out an audit of cost records every year. At the previous
Annual General Meeting, the members had approved the appointment of M/S Joshi Apte & Associates as Cost Auditors, for the financial year 2021-22, at a remuneration of Rs. 5.5 lakh plus GST, as applicable, and reimbursement of out of pocket expenses. Their work will commence shortly and their report would be filed with MCA on or before the due date.
The Cost Audit Report for the financial year 2020-21 was filed prior to its due date.
Secretarial Audit
In accordance with the provisions of Section 204 of the Companies Act, 2013, and the Rules made there under, M/s Jog Limaye & Associates, a firm of Company Secretaries in practice, was appointed by the Board to conduct the Secretarial Audit of the Company.
Their Report dated 21.05.2022 is attached as Annexure D to this report
Secretarial Standards
The Institute of Company Secretaries of India had revised the Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2) with effect from 1st October, 2017. Your Company is in compliance with the said secretarial standards.
Listing of Securities
Your Company''s equity shares are listed on the two premier stock exchanges of the country namely BSE Limited and National Stock Exchange of India Limited. Your Company had issued Global Depository Receipts which are listed on the Luxembourg Stock Exchange. Your Company has not issued any Non-Convertible Debentures ("NCDs") in financial year 2021-22 and no NCDs were outstanding as on 31st March 2022.
Energy, Technology & Foreign Exchange
Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given pursuant to Section 134(3)(m) of the Companies Act,
2013 read with Rule 8 of the Companies (Accounts) Rules,
2014 is attached to this Report as Annexure E.
Investor Education And Protection Fund (IEPF)
Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit,
Transfer and Refund) Rules, 2016 ("the IEPF Rules"), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF, established by the Government of
India, after the completion of seven years. Further, according to the IEPF Rules, the shares on which dividend which are not subject to any legal requirements has not been paid or
claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority. During the year, the Company has transferred 44,995 shares on which dividends were unclaimed for seven consecutive years as per the requirements of the IEPF Rules. The members who have a claim on above dividends and shares may claim the same from IEPF Authority by submitting an online application in web Form No. I EPF-5 available on the website www.iepf.gov.in and sending a physical copy of the same, duly signed to the Company, along with requisite documents enumerated in the Form No. IEPF-5. No claims shall lie against the Company in respect of the dividend / shares so transferred.
Statements in this Boards'' Report and Annexure may contain forward looking statements within the meaning of applicable Securities laws and regulations. Actual results could differ materially from those expressed or implied. Various factors including commodity prices, cyclical demand, changes in Government regulations, tax laws, general economic development could all have a bearing on the Company''s operations and would impact eventual results.
The Company''s Directors are grateful to the Central and State Governments, Statutory Authorities, Local Bodies, Banks and Financial institutions for their continued support and cooperation. Your Directors warmly acknowledge the trust and confidence reposed in your Company by its channel partners, dealers, customers and construction organizations in supporting its business activities and growth. Your Directors express their gratitude to the other business associates for their unstinting support. Your Directors value the commitment and contribution of the employees towards the Company. Last but not the least, your Directors are thankful to the Members for extending their constant trust and for the confidence shown in the Company.
For and on behalf of the Board of Directors
Place: Pune D. K. Chhabria
Date: 28th May, 2022 Executive Chairman
Mar 31, 2022
Your Directors have pleasure in presenting the Thirty- First (31st) Directorsâ Report of your Company along with the financial statements for the Financial Year ended 31st March, 2022.
1. FINANCIAL SUMMARY AND HIGHLIGHTS
Certain key aspects of your Companyâs performance during the Financial Year ended 31st March, 2022 as compared to the previous Financial Year are summarised below:
('' in Crores) |
||||
Particulars |
Standalone |
Consolidated |
||
Year Ended 31st March 2022 |
Year Ended 31st March 2021 |
Year Ended 31st March 2022 |
Year Ended 31st March 2021 |
|
Income for the year |
376.50 |
228.51 |
654.21 |
454.33 |
Profit before Interest, Depreciation and Tax |
140.66 |
57.43 |
167.73 |
48.48 |
Finance Charges |
(1.86) |
(0.86) |
(5.89) |
(5.44) |
Profit before Depreciation and Taxes |
138.81 |
56.57 |
161.84 |
43.04 |
Depreciation & Amortisation |
(17.08) |
(15.94) |
(56.08) |
(52.66) |
Provisions for Taxation/ Deferred Tax |
(30.88) |
(9.83) |
(29.76) |
(7.51) |
Exceptional Items |
(13.54) |
55.95 |
(7.78) |
(8.96) |
Minority Interest & Profit from Associate Company |
- |
- |
(1.23) |
1.99 |
Net Profit for the Current Year |
77.31 |
86.75 |
66.99 |
(24.10) |
Earlier Years Balance Brought forward |
518.31 |
431.97 |
498.44 |
525.51 |
Net Profit available for Appropriation |
595.62 |
518.72 |
565.43 |
501.41 |
Appropriation: |
||||
Dividend on Equity Shares |
(26.68) |
- |
(26.68) |
- |
Transfer to Capital Redemption Reserves |
- |
(0.41) |
- |
(0.41) |
Amount Transferred to Non-Controlling Interest & Other Adjustment |
- |
- |
(7.60) |
(2.56) |
Transfer from Share Option Outstanding Account |
4.26 |
- |
4.26 |
- |
Transfer from other comprehensive Income |
11.31 |
- |
11.31 |
- |
Balance carried to Balance Sheet |
584.51 |
518.31 |
546.72 |
498.44 |
The Standalone Gross Revenue (including GST) from operations for Financial Year 2021-22 was '' 441.81 Crores (Previous Year: '' 247.75 Crore). The Operating Profit before tax stood at '' 121.73 Crores as against '' 40.63 Crores in the Previous Year. The Net Profit after tax for the year stood at '' 77.31 Crores against '' 86.75 Crores reported in the Previous Year.
The Consolidated Gross Revenue (including GST and Intragroup transactions) from operations for Financial Year 2021-22 was '' 749.40 Crores (Previous Year: '' 508.72 Crores). The Consolidated Operating Profit before tax stood (for continued operations) at '' 105.76 Crores (Previous Year: '' (9.62) Crores). The Consolidated Profit after tax stood at '' 66.99 Crores (Previous Year: '' (24.10) Crores).
Your Directors recommend final dividend of '' 1.25/- per equity share (i.e. 125%) of face value of '' 1/- each, for the Financial Year ended 31st March, 2022, for approval of the Members at the ensuing Annual General Meeting. For this purpose Friday, 5th August, 2022 has been fixed as the Record Date for ascertaining entitlement for the payment of Final Dividend.
Members are requested to note that pursuant to the provisions of Finance Act, 2020, the Company would be required to deduct tax at source (âTDSâ) at the prescribed rates.
In this regard, the Company will be sending an email communication to all the Shareholders whose email addresses are registered with the Company/ Depositories and physical letters to other shareholders explaining the process on withholding tax from dividends paid to the shareholders at prescribed rates.
The Board of Directors of your Company has approved and adopted the dividend distribution policy and dividends declared/recommended during the year are in accordance with the said Policy.
The dividend distribution policy is placed at Annexure I to the Report and is also available on the weblink http://www.deltacorp.in/pdf/dividend-Distribution-Policy.pdf
During the year, the issued, subscribed and paid-up capital of the Company has changed from '' 26,68,20,937/- divided into 26,68,20,937 Equity Shares of '' 1/- each to '' 26,72,57,532 /- divided into 26,72,57,532 Equity Shares of '' 1/- each on account of allotment of equity shares under DELTACORP Employees Stock Option Scheme 2009 and Delta Employees Stock Appreciation Rights Plan 2019 of the Company.
The Allotment Committee of the Company has allotted 1,87,269 Equity Shares of face value of '' 1/- each on 4th April, 2022 under DELTACORP Employees Stock Option Scheme 2009 and Delta Employees Stock Appreciation Rights Plan 2019 of the Company. The paid-up capital of the Company stood at 26,74,44,801 Equity Shares of '' 1/- each.
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on 31st March, 2022 is available on the Companyâs website at the link https:// deltacorp.in/pdf/annual-return/Annual-Return-2022. pdf
5. NUMBER OF MEETINGS OF THE BOARD
The Board met Four (4) times during the Financial Year 2021-22. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report.
6. DIRECTORSâ RESPONSIBILITY STATEMENT
Your Directors hereby confirm that:
i. In the preparation of the annual accounts for Financial Year ended 31st March, 2022, 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, 2022 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, 2022 on a âgoing concernâ 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.
7. DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors of the Company have submitted the declaration of Independence as required
under Section 149(7) of the Act and Regulation 25(8) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), confirming that they meet the criteria of independence under Section 149(6) of the Act and Regulation 16 (1)(b) of the Listing Regulations as amended from time to time. The Independent Directors have also confirmed that they have complied with the Companyâs Code of Business Conduct & Ethics.
In compliance with the rule 6(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors have registered themselves with the Indian Institute of Corporate Affairs.
8. POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION
The Policy of the Company on Directorsâ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under subsection (3) of Section 178 of the Act and Regulation 19 of Listing Regulations is appended as Annexure II to this Report.
9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT
The details of Loans, guarantees and investments covered under the provisions of Section 186 of the Act, read with Companies (Meetings of Board and Its Powers) Rules, 2014 are 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 2021-22, your Company has entered into transactions with related parties as defined under section 2(76) of the Act and Rules made thereunder and Regulation 23 of the Listing Regulations. During the Financial Year 2021-22, transactions with related parties which qualify as material transactions as per the Listing Regulations are given in Form AOC - 2 as per the Companies (Accounts) Rules, 2014 in Annexure III to this Report.
The details of related party transactions as required under IND AS-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 Companyâs website at the link: http:// www.deltacorp.in/pdf/related-partv-transaction-policv. 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 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 except mentioned below.
Scheme of Amalgamation
The Board of Directors of the Company at its meeting held on 11th April, 2022 have approved Scheme of Amalgamation of Daman Entertainment Private Limited ("Transferor Company 1â) and Daman Hospitality Private Limited ("Transferor Company 2â) with Delta Corp Limited ("Companyâ or "Transferee Companyâ) and their respective shareholders under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 ("Actâ) ("Schemeâ).
The aforesaid Scheme and other relevant documents was filed with BSE Limited, National Stock Exchange of India Limited and National Company Law Tribunal (Ahmedabad and Mumbai, Bench respectively).
Approval of Offer for Sale
Deltatech Gaming Limited (DGL), a wholly owned subsidiary of Delta Corp Limited (the "Companyâ), has filed a draft red herring prospectus dated 16th June, 2022 ("DRHPâ) with the Securities and Exchange Board of India, for a proposed initial public offering, comprising a fresh issue of its equity shares of face value of '' 1 each ("Equity Sharesâ), for an amount aggregating up to '' 3,000 million and an offer for sale of the Equity Shares held by the Company, for an amount aggregating up to '' 2,500 million ("OFSâ) (the "Offerâ). The board of directors of the Company, at its meeting held on 16th June, 2022, accorded its approval for participating in the OFS in the Offer.
12. 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 Act read with the Companies (Accounts) Rules, 2014 is appended as Annexure IV to this Report.
The Board of Directors of the Company has constituted a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. 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 Companyâs competitive advantage. The Composition of the Committee is in compliance with Regulation 21 of the Listing Regulations.
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 Companyâs business.
14. CORPORATE SOCIAL RESPONSIBILITY
A Corporate Social Responsibility (CSR) Committee has been constituted in accordance with Section 135 of the Companies Act. The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure V of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR policy is available on http://www.deltacorp.in/pdf/Corporate-Social-Responsibility-Policy-and-Composition.pdf.
The Company has adopted Vigil Mechanism and Whistle Blower Policy for Directors and Employees in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the Listing Regulations, to report genuine concerns and to provide for adequate safeguards against victimization of persons who may use such mechanism. During the year no personnel of the Company was denied access to the Audit Committee. The said policy is also available on the Companyâs website www.deltacorp.in.
16. ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD
Pursuant to the provisions of the Act and Regulation 19 of the Listing Regulations, 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 Boardâs functioning was evaluated after taking inputs from the Directors on various aspects, including 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.
The Committees of the Board were evaluated after taking inputs from the Committee members on the basis of criteria such as degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The Board and the Nomination, Remuneration and Compensation Committee reviewed the performance of the individual directors 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.
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.
In a separate meeting of independent directors, performance of Non-Independent Directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors.
17 SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES
During the year under review the Company incorporated Deltin Amusement Park Private Limited as a wholly owned subsidiary w.e.f. 12th February, 2022 and Zeicast Pte Limited ceased to be associate company on account of liquidation.
During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Act and Listing Regulations, the Company has prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Annual Report. A statement containing the performance and financial position of the subsidiaries and associate companies of the Company as required under Rule 5 of the Companies (Accounts) Rules, 2014 is provided as Annexure-A (AOC-1) in the financial statement and hence not repeated here for the sake of brevity.
In accordance with Section 136 of the Act, 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 Companyâs website www.deltacorp.in.
The Policy for determining material subsidiaries as approved may be accessed on the Companyâs website at the link: http://www.deltacorp.in/pdf/policv-for-determining-material-subsidiaries.pdf.
18. DETAILS RELATING TO DEPOSITS, COVERED UNDER CHAPTER V OF THE ACT
The Company has neither accepted nor renewed any deposits during the Financial Year 2021-22 in terms of Chapter V of the Act.
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 WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has in place adequate internal financial control with reference to financial statements.
The Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 and other applicable provisions, if any, of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015.
The Company in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/ validate them as and when appropriate. The basis of such judgments and estimates are also approved by the Statutory Auditors and Audit Committee.
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 Companyâs policies, safeguarding of Companyâs 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 provisions of the Section 152(6) (e) of the Act, Mr. Ashish Kapadia, (DIN:02011632) will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.
22. AUDITORS1. Statutory Auditor
M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No: 001076N/ N500013), were re-appointed as Statutory Auditors of the Company for second term at the
30th Annual General Meeting till the conclusion of the 35th Annual General Meeting.
The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their re-appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors.
There are no qualifications, reservations or adverse remarks or disclaimers made by Statutory Auditor of the Company, in audit report.
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 have 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, 2022. The Secretarial Audit Report is appended as Annexure VI to this Report.
There are no qualifications, reservations or adverse remarks or disclaimers made by Secretarial Auditor of the Company, in secretarial audit report.
As per the requirements of the Listing Regulations, Practicing Company Secretaries of the material unlisted subsidiaries of the Company have undertaken secretarial audits of such subsidiaries for Financial Year ended 31.03.2022. The Secretarial Audit Reports of the unlisted material subsidiaries viz. Deltatech Gaming Limited (Formerly Known as Gaussian Networks Private Limited) and Highstreet Cruises and Entertainment Private Limited is available on companyâs website i.e. https://deltacorp.in/ material-subsidiaries-financial-year.html
There was no instance of fraud during the year under review, which required the Statutory 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 and Discussion and Analysis Report is provided in a separate section and forms an integral part of this Annual Report.
25. BUSINESS RESPONSIBILITY REPORT
A Business Responsibility Report as per Regulation 34 (2) of the Listing Regulations, detailing the various initiatives taken by the Company on the environmental, social and governance front forms an integral part of this Annual Report.
As per Regulation 34(3) read with Schedule V of the Listing Regulations, a separate section on corporate governance practices followed by the Company, together with a certificate from the practicing Company Secretary confirming compliance with the conditions of Corporate Governance forms an integral part of this Annual Report.
27. AUDIT COMMITTEE OF THE COMPANY
The composition of the Audit Committee is in compliance with the requirements of Section 177 of the Act, Regulation 18 of the Listing Regulations as amended from time to time and guidance note issued by Stock Exchanges. The details of the composition of the Audit Committee are detailed in the Corporate Governance Report, which forms part of this Report.
Details of top ten employees in terms of the remuneration and employees in receipt of remuneration as required under the provisions of section 197(12) of the Act, read with rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, which form part of the Directorsâ Report, will be made available to any shareholder on request, as per provisions of section 136 of the said Act. Members who are interested in obtaining these particulars may write email to the Company Secretary on [email protected].
The disclosures in terms of the provisions of 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 VII to this Report.
29. EMPLOYEES STOCK OPTION SCHEME AND EMPLOYEES STOCK APPRECIATION RIGHTS PLAN
As required in terms of regulation 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 disclosures relating to DELTA CORP ESOS 2009 and Delta Employees Stock Appreciation Rights Plan 2019 are given in Annexure VIII to this Report.
30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.
The Company has complied with the provisions relating to constitution of Internal Complaints Committee and has Anti-Sexual Harassment policy pursuant to the provisions of The Sexual Harassment of Woman at Workplace (Prevention, Prohibition & Redressal) Act 2013. The Company has received two complaints and no complaints are pending as on 31st March, 2022.
31. COMPLIANCE OF THE SECRETARIAL STANDARDS
During the Financial Year, the Company has complied with the applicable Secretarial Standards i.e SS-1 and SS-2 as issued by the Institute of the Company Secretaries of India.
32. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
There are no applications made or any proceeding pending against the Company under Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.
33. COST RECORDS AND COST AUDIT
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company
34. DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE
At the time of one time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof.
There are no instances of one time settlement during the financial year.
35. TRANSFER OF UNCLAIMED/ UNPAID AMOUNTS AND SHARES TO THE INVESTOR EDUCATION AND PROTECTION FUND
In accordance with the provisions of the Section 124 and 125 of the Act, read with Investor Education Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended (IEPF Rules), the dividends, unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account of the Company are liable to be transferred to the IEPF.
The IEPF Rules mandate Companies to transfer shares of Members whose dividends remain unpaid/ unclaimed for a continuous period of seven years to the demat account of IEPF Authority. The Members whose dividend/shares are transferred to the IEPF Authority can claim their shares/ dividend from the Authority. In accordance with the said IEPF Rules and its amendments, the Company had sent notices to all the Shareholders whose shares were due to be transferred to the IEPF Authority and simultaneously published newspaper advertisement.
The Company has appointed a Nodal Officer under the provisions of IEPF, the details of which are available on the website of the Company at www.deltacorp.in.
The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company on the Companyâs website at www.deltacorp.in. and on the website of the Ministry of Corporate Affairs at www. iepf.gov.in/.
Your Directors express their sincere appreciation for 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, for better performance of the Company during the year.
During the current financial year consequent to the lock down due to the second/third wave of pandemic announced by the state governments, the Company operated partially with restrictions and observed all
the government advisories and guidelines issued from time to time thoroughly and in good faith.
For and on behalf of the Board of DirectorsJaydev Mody Chairman
Place: Mumbai DIN: 00234797
Date: 12th July, 2022
Mar 31, 2022
Your Directors have pleasure in presenting the Thirty- First (31st) Directorsâ Report of your Company along with the financial statements for the Financial Year ended 31st March, 2022.
1. FINANCIAL SUMMARY AND HIGHLIGHTS
Certain key aspects of your Companyâs performance during the Financial Year ended 31st March, 2022 as compared to the previous Financial Year are summarised below:
('' in Crores) |
||||
Particulars |
Standalone |
Consolidated |
||
Year Ended 31st March 2022 |
Year Ended 31st March 2021 |
Year Ended 31st March 2022 |
Year Ended 31st March 2021 |
|
Income for the year |
376.50 |
228.51 |
654.21 |
454.33 |
Profit before Interest, Depreciation and Tax |
140.66 |
57.43 |
167.73 |
48.48 |
Finance Charges |
(1.86) |
(0.86) |
(5.89) |
(5.44) |
Profit before Depreciation and Taxes |
138.81 |
56.57 |
161.84 |
43.04 |
Depreciation & Amortisation |
(17.08) |
(15.94) |
(56.08) |
(52.66) |
Provisions for Taxation/ Deferred Tax |
(30.88) |
(9.83) |
(29.76) |
(7.51) |
Exceptional Items |
(13.54) |
55.95 |
(7.78) |
(8.96) |
Minority Interest & Profit from Associate Company |
- |
- |
(1.23) |
1.99 |
Net Profit for the Current Year |
77.31 |
86.75 |
66.99 |
(24.10) |
Earlier Years Balance Brought forward |
518.31 |
431.97 |
498.44 |
525.51 |
Net Profit available for Appropriation |
595.62 |
518.72 |
565.43 |
501.41 |
Appropriation: |
||||
Dividend on Equity Shares |
(26.68) |
- |
(26.68) |
- |
Transfer to Capital Redemption Reserves |
- |
(0.41) |
- |
(0.41) |
Amount Transferred to Non-Controlling Interest & Other Adjustment |
- |
- |
(7.60) |
(2.56) |
Transfer from Share Option Outstanding Account |
4.26 |
- |
4.26 |
- |
Transfer from other comprehensive Income |
11.31 |
- |
11.31 |
- |
Balance carried to Balance Sheet |
584.51 |
518.31 |
546.72 |
498.44 |
The Standalone Gross Revenue (including GST) from operations for Financial Year 2021-22 was '' 441.81 Crores (Previous Year: '' 247.75 Crore). The Operating Profit before tax stood at '' 121.73 Crores as against '' 40.63 Crores in the Previous Year. The Net Profit after tax for the year stood at '' 77.31 Crores against '' 86.75 Crores reported in the Previous Year.
The Consolidated Gross Revenue (including GST and Intragroup transactions) from operations for Financial Year 2021-22 was '' 749.40 Crores (Previous Year: '' 508.72 Crores). The Consolidated Operating Profit before tax stood (for continued operations) at '' 105.76 Crores (Previous Year: '' (9.62) Crores). The Consolidated Profit after tax stood at '' 66.99 Crores (Previous Year: '' (24.10) Crores).
Your Directors recommend final dividend of '' 1.25/- per equity share (i.e. 125%) of face value of '' 1/- each, for the Financial Year ended 31st March, 2022, for approval of the Members at the ensuing Annual General Meeting. For this purpose Friday, 5th August, 2022 has been fixed as the Record Date for ascertaining entitlement for the payment of Final Dividend.
Members are requested to note that pursuant to the provisions of Finance Act, 2020, the Company would be required to deduct tax at source (âTDSâ) at the prescribed rates.
In this regard, the Company will be sending an email communication to all the Shareholders whose email addresses are registered with the Company/ Depositories and physical letters to other shareholders explaining the process on withholding tax from dividends paid to the shareholders at prescribed rates.
The Board of Directors of your Company has approved and adopted the dividend distribution policy and dividends declared/recommended during the year are in accordance with the said Policy.
The dividend distribution policy is placed at Annexure I to the Report and is also available on the weblink http://www.deltacorp.in/pdf/dividend-Distribution-Policy.pdf
During the year, the issued, subscribed and paid-up capital of the Company has changed from '' 26,68,20,937/- divided into 26,68,20,937 Equity Shares of '' 1/- each to '' 26,72,57,532 /- divided into 26,72,57,532 Equity Shares of '' 1/- each on account of allotment of equity shares under DELTACORP Employees Stock Option Scheme 2009 and Delta Employees Stock Appreciation Rights Plan 2019 of the Company.
The Allotment Committee of the Company has allotted 1,87,269 Equity Shares of face value of '' 1/- each on 4th April, 2022 under DELTACORP Employees Stock Option Scheme 2009 and Delta Employees Stock Appreciation Rights Plan 2019 of the Company. The paid-up capital of the Company stood at 26,74,44,801 Equity Shares of '' 1/- each.
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on 31st March, 2022 is available on the Companyâs website at the link https:// deltacorp.in/pdf/annual-return/Annual-Return-2022. pdf
5. NUMBER OF MEETINGS OF THE BOARD
The Board met Four (4) times during the Financial Year 2021-22. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report.
6. DIRECTORSâ RESPONSIBILITY STATEMENT
Your Directors hereby confirm that:
i. In the preparation of the annual accounts for Financial Year ended 31st March, 2022, 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, 2022 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, 2022 on a âgoing concernâ 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.
7. DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors of the Company have submitted the declaration of Independence as required
under Section 149(7) of the Act and Regulation 25(8) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), confirming that they meet the criteria of independence under Section 149(6) of the Act and Regulation 16 (1)(b) of the Listing Regulations as amended from time to time. The Independent Directors have also confirmed that they have complied with the Companyâs Code of Business Conduct & Ethics.
In compliance with the rule 6(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors have registered themselves with the Indian Institute of Corporate Affairs.
8. POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION
The Policy of the Company on Directorsâ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under subsection (3) of Section 178 of the Act and Regulation 19 of Listing Regulations is appended as Annexure II to this Report.
9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT
The details of Loans, guarantees and investments covered under the provisions of Section 186 of the Act, read with Companies (Meetings of Board and Its Powers) Rules, 2014 are 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 2021-22, your Company has entered into transactions with related parties as defined under section 2(76) of the Act and Rules made thereunder and Regulation 23 of the Listing Regulations. During the Financial Year 2021-22, transactions with related parties which qualify as material transactions as per the Listing Regulations are given in Form AOC - 2 as per the Companies (Accounts) Rules, 2014 in Annexure III to this Report.
The details of related party transactions as required under IND AS-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 Companyâs website at the link: http:// www.deltacorp.in/pdf/related-partv-transaction-policv. 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 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 except mentioned below.
Scheme of Amalgamation
The Board of Directors of the Company at its meeting held on 11th April, 2022 have approved Scheme of Amalgamation of Daman Entertainment Private Limited ("Transferor Company 1â) and Daman Hospitality Private Limited ("Transferor Company 2â) with Delta Corp Limited ("Companyâ or "Transferee Companyâ) and their respective shareholders under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 ("Actâ) ("Schemeâ).
The aforesaid Scheme and other relevant documents was filed with BSE Limited, National Stock Exchange of India Limited and National Company Law Tribunal (Ahmedabad and Mumbai, Bench respectively).
Approval of Offer for Sale
Deltatech Gaming Limited (DGL), a wholly owned subsidiary of Delta Corp Limited (the "Companyâ), has filed a draft red herring prospectus dated 16th June, 2022 ("DRHPâ) with the Securities and Exchange Board of India, for a proposed initial public offering, comprising a fresh issue of its equity shares of face value of '' 1 each ("Equity Sharesâ), for an amount aggregating up to '' 3,000 million and an offer for sale of the Equity Shares held by the Company, for an amount aggregating up to '' 2,500 million ("OFSâ) (the "Offerâ). The board of directors of the Company, at its meeting held on 16th June, 2022, accorded its approval for participating in the OFS in the Offer.
12. 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 Act read with the Companies (Accounts) Rules, 2014 is appended as Annexure IV to this Report.
The Board of Directors of the Company has constituted a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. 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 Companyâs competitive advantage. The Composition of the Committee is in compliance with Regulation 21 of the Listing Regulations.
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 Companyâs business.
14. CORPORATE SOCIAL RESPONSIBILITY
A Corporate Social Responsibility (CSR) Committee has been constituted in accordance with Section 135 of the Companies Act. The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure V of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR policy is available on http://www.deltacorp.in/pdf/Corporate-Social-Responsibility-Policy-and-Composition.pdf.
The Company has adopted Vigil Mechanism and Whistle Blower Policy for Directors and Employees in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the Listing Regulations, to report genuine concerns and to provide for adequate safeguards against victimization of persons who may use such mechanism. During the year no personnel of the Company was denied access to the Audit Committee. The said policy is also available on the Companyâs website www.deltacorp.in.
16. ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD
Pursuant to the provisions of the Act and Regulation 19 of the Listing Regulations, 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 Boardâs functioning was evaluated after taking inputs from the Directors on various aspects, including 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.
The Committees of the Board were evaluated after taking inputs from the Committee members on the basis of criteria such as degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The Board and the Nomination, Remuneration and Compensation Committee reviewed the performance of the individual directors 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.
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.
In a separate meeting of independent directors, performance of Non-Independent Directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors.
17 SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES
During the year under review the Company incorporated Deltin Amusement Park Private Limited as a wholly owned subsidiary w.e.f. 12th February, 2022 and Zeicast Pte Limited ceased to be associate company on account of liquidation.
During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Act and Listing Regulations, the Company has prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Annual Report. A statement containing the performance and financial position of the subsidiaries and associate companies of the Company as required under Rule 5 of the Companies (Accounts) Rules, 2014 is provided as Annexure-A (AOC-1) in the financial statement and hence not repeated here for the sake of brevity.
In accordance with Section 136 of the Act, 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 Companyâs website www.deltacorp.in.
The Policy for determining material subsidiaries as approved may be accessed on the Companyâs website at the link: http://www.deltacorp.in/pdf/policv-for-determining-material-subsidiaries.pdf.
18. DETAILS RELATING TO DEPOSITS, COVERED UNDER CHAPTER V OF THE ACT
The Company has neither accepted nor renewed any deposits during the Financial Year 2021-22 in terms of Chapter V of the Act.
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 WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has in place adequate internal financial control with reference to financial statements.
The Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 and other applicable provisions, if any, of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015.
The Company in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/ validate them as and when appropriate. The basis of such judgments and estimates are also approved by the Statutory Auditors and Audit Committee.
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 Companyâs policies, safeguarding of Companyâs 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 provisions of the Section 152(6) (e) of the Act, Mr. Ashish Kapadia, (DIN:02011632) will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.
22. AUDITORS1. Statutory Auditor
M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No: 001076N/ N500013), were re-appointed as Statutory Auditors of the Company for second term at the
30th Annual General Meeting till the conclusion of the 35th Annual General Meeting.
The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their re-appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors.
There are no qualifications, reservations or adverse remarks or disclaimers made by Statutory Auditor of the Company, in audit report.
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 have 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, 2022. The Secretarial Audit Report is appended as Annexure VI to this Report.
There are no qualifications, reservations or adverse remarks or disclaimers made by Secretarial Auditor of the Company, in secretarial audit report.
As per the requirements of the Listing Regulations, Practicing Company Secretaries of the material unlisted subsidiaries of the Company have undertaken secretarial audits of such subsidiaries for Financial Year ended 31.03.2022. The Secretarial Audit Reports of the unlisted material subsidiaries viz. Deltatech Gaming Limited (Formerly Known as Gaussian Networks Private Limited) and Highstreet Cruises and Entertainment Private Limited is available on companyâs website i.e. https://deltacorp.in/ material-subsidiaries-financial-year.html
There was no instance of fraud during the year under review, which required the Statutory 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 and Discussion and Analysis Report is provided in a separate section and forms an integral part of this Annual Report.
25. BUSINESS RESPONSIBILITY REPORT
A Business Responsibility Report as per Regulation 34 (2) of the Listing Regulations, detailing the various initiatives taken by the Company on the environmental, social and governance front forms an integral part of this Annual Report.
As per Regulation 34(3) read with Schedule V of the Listing Regulations, a separate section on corporate governance practices followed by the Company, together with a certificate from the practicing Company Secretary confirming compliance with the conditions of Corporate Governance forms an integral part of this Annual Report.
27. AUDIT COMMITTEE OF THE COMPANY
The composition of the Audit Committee is in compliance with the requirements of Section 177 of the Act, Regulation 18 of the Listing Regulations as amended from time to time and guidance note issued by Stock Exchanges. The details of the composition of the Audit Committee are detailed in the Corporate Governance Report, which forms part of this Report.
Details of top ten employees in terms of the remuneration and employees in receipt of remuneration as required under the provisions of section 197(12) of the Act, read with rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, which form part of the Directorsâ Report, will be made available to any shareholder on request, as per provisions of section 136 of the said Act. Members who are interested in obtaining these particulars may write email to the Company Secretary on [email protected].
The disclosures in terms of the provisions of 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 VII to this Report.
29. EMPLOYEES STOCK OPTION SCHEME AND EMPLOYEES STOCK APPRECIATION RIGHTS PLAN
As required in terms of regulation 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 disclosures relating to DELTA CORP ESOS 2009 and Delta Employees Stock Appreciation Rights Plan 2019 are given in Annexure VIII to this Report.
30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.
The Company has complied with the provisions relating to constitution of Internal Complaints Committee and has Anti-Sexual Harassment policy pursuant to the provisions of The Sexual Harassment of Woman at Workplace (Prevention, Prohibition & Redressal) Act 2013. The Company has received two complaints and no complaints are pending as on 31st March, 2022.
31. COMPLIANCE OF THE SECRETARIAL STANDARDS
During the Financial Year, the Company has complied with the applicable Secretarial Standards i.e SS-1 and SS-2 as issued by the Institute of the Company Secretaries of India.
32. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
There are no applications made or any proceeding pending against the Company under Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.
33. COST RECORDS AND COST AUDIT
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company
34. DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE
At the time of one time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof.
There are no instances of one time settlement during the financial year.
35. TRANSFER OF UNCLAIMED/ UNPAID AMOUNTS AND SHARES TO THE INVESTOR EDUCATION AND PROTECTION FUND
In accordance with the provisions of the Section 124 and 125 of the Act, read with Investor Education Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended (IEPF Rules), the dividends, unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account of the Company are liable to be transferred to the IEPF.
The IEPF Rules mandate Companies to transfer shares of Members whose dividends remain unpaid/ unclaimed for a continuous period of seven years to the demat account of IEPF Authority. The Members whose dividend/shares are transferred to the IEPF Authority can claim their shares/ dividend from the Authority. In accordance with the said IEPF Rules and its amendments, the Company had sent notices to all the Shareholders whose shares were due to be transferred to the IEPF Authority and simultaneously published newspaper advertisement.
The Company has appointed a Nodal Officer under the provisions of IEPF, the details of which are available on the website of the Company at www.deltacorp.in.
The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company on the Companyâs website at www.deltacorp.in. and on the website of the Ministry of Corporate Affairs at www. iepf.gov.in/.
Your Directors express their sincere appreciation for 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, for better performance of the Company during the year.
During the current financial year consequent to the lock down due to the second/third wave of pandemic announced by the state governments, the Company operated partially with restrictions and observed all
the government advisories and guidelines issued from time to time thoroughly and in good faith.
For and on behalf of the Board of DirectorsJaydev Mody Chairman
Place: Mumbai DIN: 00234797
Date: 12th July, 2022
Mar 31, 2022
Your Directors have pleasure in presenting the Thirty- First (31st) Directorsâ Report of your Company along with the financial statements for the Financial Year ended 31st March, 2022.
1. FINANCIAL SUMMARY AND HIGHLIGHTS
Certain key aspects of your Companyâs performance during the Financial Year ended 31st March, 2022 as compared to the previous Financial Year are summarised below:
('' in Crores) |
||||
Particulars |
Standalone |
Consolidated |
||
Year Ended 31st March 2022 |
Year Ended 31st March 2021 |
Year Ended 31st March 2022 |
Year Ended 31st March 2021 |
|
Income for the year |
376.50 |
228.51 |
654.21 |
454.33 |
Profit before Interest, Depreciation and Tax |
140.66 |
57.43 |
167.73 |
48.48 |
Finance Charges |
(1.86) |
(0.86) |
(5.89) |
(5.44) |
Profit before Depreciation and Taxes |
138.81 |
56.57 |
161.84 |
43.04 |
Depreciation & Amortisation |
(17.08) |
(15.94) |
(56.08) |
(52.66) |
Provisions for Taxation/ Deferred Tax |
(30.88) |
(9.83) |
(29.76) |
(7.51) |
Exceptional Items |
(13.54) |
55.95 |
(7.78) |
(8.96) |
Minority Interest & Profit from Associate Company |
- |
- |
(1.23) |
1.99 |
Net Profit for the Current Year |
77.31 |
86.75 |
66.99 |
(24.10) |
Earlier Years Balance Brought forward |
518.31 |
431.97 |
498.44 |
525.51 |
Net Profit available for Appropriation |
595.62 |
518.72 |
565.43 |
501.41 |
Appropriation: |
||||
Dividend on Equity Shares |
(26.68) |
- |
(26.68) |
- |
Transfer to Capital Redemption Reserves |
- |
(0.41) |
- |
(0.41) |
Amount Transferred to Non-Controlling Interest & Other Adjustment |
- |
- |
(7.60) |
(2.56) |
Transfer from Share Option Outstanding Account |
4.26 |
- |
4.26 |
- |
Transfer from other comprehensive Income |
11.31 |
- |
11.31 |
- |
Balance carried to Balance Sheet |
584.51 |
518.31 |
546.72 |
498.44 |
The Standalone Gross Revenue (including GST) from operations for Financial Year 2021-22 was '' 441.81 Crores (Previous Year: '' 247.75 Crore). The Operating Profit before tax stood at '' 121.73 Crores as against '' 40.63 Crores in the Previous Year. The Net Profit after tax for the year stood at '' 77.31 Crores against '' 86.75 Crores reported in the Previous Year.
The Consolidated Gross Revenue (including GST and Intragroup transactions) from operations for Financial Year 2021-22 was '' 749.40 Crores (Previous Year: '' 508.72 Crores). The Consolidated Operating Profit before tax stood (for continued operations) at '' 105.76 Crores (Previous Year: '' (9.62) Crores). The Consolidated Profit after tax stood at '' 66.99 Crores (Previous Year: '' (24.10) Crores).
Your Directors recommend final dividend of '' 1.25/- per equity share (i.e. 125%) of face value of '' 1/- each, for the Financial Year ended 31st March, 2022, for approval of the Members at the ensuing Annual General Meeting. For this purpose Friday, 5th August, 2022 has been fixed as the Record Date for ascertaining entitlement for the payment of Final Dividend.
Members are requested to note that pursuant to the provisions of Finance Act, 2020, the Company would be required to deduct tax at source (âTDSâ) at the prescribed rates.
In this regard, the Company will be sending an email communication to all the Shareholders whose email addresses are registered with the Company/ Depositories and physical letters to other shareholders explaining the process on withholding tax from dividends paid to the shareholders at prescribed rates.
The Board of Directors of your Company has approved and adopted the dividend distribution policy and dividends declared/recommended during the year are in accordance with the said Policy.
The dividend distribution policy is placed at Annexure I to the Report and is also available on the weblink http://www.deltacorp.in/pdf/dividend-Distribution-Policy.pdf
During the year, the issued, subscribed and paid-up capital of the Company has changed from '' 26,68,20,937/- divided into 26,68,20,937 Equity Shares of '' 1/- each to '' 26,72,57,532 /- divided into 26,72,57,532 Equity Shares of '' 1/- each on account of allotment of equity shares under DELTACORP Employees Stock Option Scheme 2009 and Delta Employees Stock Appreciation Rights Plan 2019 of the Company.
The Allotment Committee of the Company has allotted 1,87,269 Equity Shares of face value of '' 1/- each on 4th April, 2022 under DELTACORP Employees Stock Option Scheme 2009 and Delta Employees Stock Appreciation Rights Plan 2019 of the Company. The paid-up capital of the Company stood at 26,74,44,801 Equity Shares of '' 1/- each.
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on 31st March, 2022 is available on the Companyâs website at the link https:// deltacorp.in/pdf/annual-return/Annual-Return-2022. pdf
5. NUMBER OF MEETINGS OF THE BOARD
The Board met Four (4) times during the Financial Year 2021-22. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report.
6. DIRECTORSâ RESPONSIBILITY STATEMENT
Your Directors hereby confirm that:
i. In the preparation of the annual accounts for Financial Year ended 31st March, 2022, 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, 2022 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, 2022 on a âgoing concernâ 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.
7. DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors of the Company have submitted the declaration of Independence as required
under Section 149(7) of the Act and Regulation 25(8) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), confirming that they meet the criteria of independence under Section 149(6) of the Act and Regulation 16 (1)(b) of the Listing Regulations as amended from time to time. The Independent Directors have also confirmed that they have complied with the Companyâs Code of Business Conduct & Ethics.
In compliance with the rule 6(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors have registered themselves with the Indian Institute of Corporate Affairs.
8. POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION
The Policy of the Company on Directorsâ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under subsection (3) of Section 178 of the Act and Regulation 19 of Listing Regulations is appended as Annexure II to this Report.
9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT
The details of Loans, guarantees and investments covered under the provisions of Section 186 of the Act, read with Companies (Meetings of Board and Its Powers) Rules, 2014 are 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 2021-22, your Company has entered into transactions with related parties as defined under section 2(76) of the Act and Rules made thereunder and Regulation 23 of the Listing Regulations. During the Financial Year 2021-22, transactions with related parties which qualify as material transactions as per the Listing Regulations are given in Form AOC - 2 as per the Companies (Accounts) Rules, 2014 in Annexure III to this Report.
The details of related party transactions as required under IND AS-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 Companyâs website at the link: http:// www.deltacorp.in/pdf/related-partv-transaction-policv. 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 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 except mentioned below.
Scheme of Amalgamation
The Board of Directors of the Company at its meeting held on 11th April, 2022 have approved Scheme of Amalgamation of Daman Entertainment Private Limited ("Transferor Company 1â) and Daman Hospitality Private Limited ("Transferor Company 2â) with Delta Corp Limited ("Companyâ or "Transferee Companyâ) and their respective shareholders under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 ("Actâ) ("Schemeâ).
The aforesaid Scheme and other relevant documents was filed with BSE Limited, National Stock Exchange of India Limited and National Company Law Tribunal (Ahmedabad and Mumbai, Bench respectively).
Approval of Offer for Sale
Deltatech Gaming Limited (DGL), a wholly owned subsidiary of Delta Corp Limited (the "Companyâ), has filed a draft red herring prospectus dated 16th June, 2022 ("DRHPâ) with the Securities and Exchange Board of India, for a proposed initial public offering, comprising a fresh issue of its equity shares of face value of '' 1 each ("Equity Sharesâ), for an amount aggregating up to '' 3,000 million and an offer for sale of the Equity Shares held by the Company, for an amount aggregating up to '' 2,500 million ("OFSâ) (the "Offerâ). The board of directors of the Company, at its meeting held on 16th June, 2022, accorded its approval for participating in the OFS in the Offer.
12. 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 Act read with the Companies (Accounts) Rules, 2014 is appended as Annexure IV to this Report.
The Board of Directors of the Company has constituted a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. 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 Companyâs competitive advantage. The Composition of the Committee is in compliance with Regulation 21 of the Listing Regulations.
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 Companyâs business.
14. CORPORATE SOCIAL RESPONSIBILITY
A Corporate Social Responsibility (CSR) Committee has been constituted in accordance with Section 135 of the Companies Act. The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure V of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR policy is available on http://www.deltacorp.in/pdf/Corporate-Social-Responsibility-Policy-and-Composition.pdf.
The Company has adopted Vigil Mechanism and Whistle Blower Policy for Directors and Employees in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the Listing Regulations, to report genuine concerns and to provide for adequate safeguards against victimization of persons who may use such mechanism. During the year no personnel of the Company was denied access to the Audit Committee. The said policy is also available on the Companyâs website www.deltacorp.in.
16. ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD
Pursuant to the provisions of the Act and Regulation 19 of the Listing Regulations, 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 Boardâs functioning was evaluated after taking inputs from the Directors on various aspects, including 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.
The Committees of the Board were evaluated after taking inputs from the Committee members on the basis of criteria such as degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The Board and the Nomination, Remuneration and Compensation Committee reviewed the performance of the individual directors 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.
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.
In a separate meeting of independent directors, performance of Non-Independent Directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors.
17 SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES
During the year under review the Company incorporated Deltin Amusement Park Private Limited as a wholly owned subsidiary w.e.f. 12th February, 2022 and Zeicast Pte Limited ceased to be associate company on account of liquidation.
During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Act and Listing Regulations, the Company has prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Annual Report. A statement containing the performance and financial position of the subsidiaries and associate companies of the Company as required under Rule 5 of the Companies (Accounts) Rules, 2014 is provided as Annexure-A (AOC-1) in the financial statement and hence not repeated here for the sake of brevity.
In accordance with Section 136 of the Act, 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 Companyâs website www.deltacorp.in.
The Policy for determining material subsidiaries as approved may be accessed on the Companyâs website at the link: http://www.deltacorp.in/pdf/policv-for-determining-material-subsidiaries.pdf.
18. DETAILS RELATING TO DEPOSITS, COVERED UNDER CHAPTER V OF THE ACT
The Company has neither accepted nor renewed any deposits during the Financial Year 2021-22 in terms of Chapter V of the Act.
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 WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has in place adequate internal financial control with reference to financial statements.
The Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 and other applicable provisions, if any, of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015.
The Company in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/ validate them as and when appropriate. The basis of such judgments and estimates are also approved by the Statutory Auditors and Audit Committee.
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 Companyâs policies, safeguarding of Companyâs 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 provisions of the Section 152(6) (e) of the Act, Mr. Ashish Kapadia, (DIN:02011632) will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.
22. AUDITORS1. Statutory Auditor
M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No: 001076N/ N500013), were re-appointed as Statutory Auditors of the Company for second term at the
30th Annual General Meeting till the conclusion of the 35th Annual General Meeting.
The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their re-appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors.
There are no qualifications, reservations or adverse remarks or disclaimers made by Statutory Auditor of the Company, in audit report.
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 have 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, 2022. The Secretarial Audit Report is appended as Annexure VI to this Report.
There are no qualifications, reservations or adverse remarks or disclaimers made by Secretarial Auditor of the Company, in secretarial audit report.
As per the requirements of the Listing Regulations, Practicing Company Secretaries of the material unlisted subsidiaries of the Company have undertaken secretarial audits of such subsidiaries for Financial Year ended 31.03.2022. The Secretarial Audit Reports of the unlisted material subsidiaries viz. Deltatech Gaming Limited (Formerly Known as Gaussian Networks Private Limited) and Highstreet Cruises and Entertainment Private Limited is available on companyâs website i.e. https://deltacorp.in/ material-subsidiaries-financial-year.html
There was no instance of fraud during the year under review, which required the Statutory 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 and Discussion and Analysis Report is provided in a separate section and forms an integral part of this Annual Report.
25. BUSINESS RESPONSIBILITY REPORT
A Business Responsibility Report as per Regulation 34 (2) of the Listing Regulations, detailing the various initiatives taken by the Company on the environmental, social and governance front forms an integral part of this Annual Report.
As per Regulation 34(3) read with Schedule V of the Listing Regulations, a separate section on corporate governance practices followed by the Company, together with a certificate from the practicing Company Secretary confirming compliance with the conditions of Corporate Governance forms an integral part of this Annual Report.
27. AUDIT COMMITTEE OF THE COMPANY
The composition of the Audit Committee is in compliance with the requirements of Section 177 of the Act, Regulation 18 of the Listing Regulations as amended from time to time and guidance note issued by Stock Exchanges. The details of the composition of the Audit Committee are detailed in the Corporate Governance Report, which forms part of this Report.
Details of top ten employees in terms of the remuneration and employees in receipt of remuneration as required under the provisions of section 197(12) of the Act, read with rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, which form part of the Directorsâ Report, will be made available to any shareholder on request, as per provisions of section 136 of the said Act. Members who are interested in obtaining these particulars may write email to the Company Secretary on [email protected].
The disclosures in terms of the provisions of 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 VII to this Report.
29. EMPLOYEES STOCK OPTION SCHEME AND EMPLOYEES STOCK APPRECIATION RIGHTS PLAN
As required in terms of regulation 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 disclosures relating to DELTA CORP ESOS 2009 and Delta Employees Stock Appreciation Rights Plan 2019 are given in Annexure VIII to this Report.
30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.
The Company has complied with the provisions relating to constitution of Internal Complaints Committee and has Anti-Sexual Harassment policy pursuant to the provisions of The Sexual Harassment of Woman at Workplace (Prevention, Prohibition & Redressal) Act 2013. The Company has received two complaints and no complaints are pending as on 31st March, 2022.
31. COMPLIANCE OF THE SECRETARIAL STANDARDS
During the Financial Year, the Company has complied with the applicable Secretarial Standards i.e SS-1 and SS-2 as issued by the Institute of the Company Secretaries of India.
32. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
There are no applications made or any proceeding pending against the Company under Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.
33. COST RECORDS AND COST AUDIT
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company
34. DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE
At the time of one time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof.
There are no instances of one time settlement during the financial year.
35. TRANSFER OF UNCLAIMED/ UNPAID AMOUNTS AND SHARES TO THE INVESTOR EDUCATION AND PROTECTION FUND
In accordance with the provisions of the Section 124 and 125 of the Act, read with Investor Education Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended (IEPF Rules), the dividends, unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account of the Company are liable to be transferred to the IEPF.
The IEPF Rules mandate Companies to transfer shares of Members whose dividends remain unpaid/ unclaimed for a continuous period of seven years to the demat account of IEPF Authority. The Members whose dividend/shares are transferred to the IEPF Authority can claim their shares/ dividend from the Authority. In accordance with the said IEPF Rules and its amendments, the Company had sent notices to all the Shareholders whose shares were due to be transferred to the IEPF Authority and simultaneously published newspaper advertisement.
The Company has appointed a Nodal Officer under the provisions of IEPF, the details of which are available on the website of the Company at www.deltacorp.in.
The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company on the Companyâs website at www.deltacorp.in. and on the website of the Ministry of Corporate Affairs at www. iepf.gov.in/.
Your Directors express their sincere appreciation for 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, for better performance of the Company during the year.
During the current financial year consequent to the lock down due to the second/third wave of pandemic announced by the state governments, the Company operated partially with restrictions and observed all
the government advisories and guidelines issued from time to time thoroughly and in good faith.
For and on behalf of the Board of DirectorsJaydev Mody Chairman
Place: Mumbai DIN: 00234797
Date: 12th July, 2022
Mar 31, 2022
Your Directors have pleasure in presenting the Thirty- First (31st) Directorsâ Report of your Company along with the financial statements for the Financial Year ended 31st March, 2022.
1. FINANCIAL SUMMARY AND HIGHLIGHTS
Certain key aspects of your Companyâs performance during the Financial Year ended 31st March, 2022 as compared to the previous Financial Year are summarised below:
('' in Crores) |
||||
Particulars |
Standalone |
Consolidated |
||
Year Ended 31st March 2022 |
Year Ended 31st March 2021 |
Year Ended 31st March 2022 |
Year Ended 31st March 2021 |
|
Income for the year |
376.50 |
228.51 |
654.21 |
454.33 |
Profit before Interest, Depreciation and Tax |
140.66 |
57.43 |
167.73 |
48.48 |
Finance Charges |
(1.86) |
(0.86) |
(5.89) |
(5.44) |
Profit before Depreciation and Taxes |
138.81 |
56.57 |
161.84 |
43.04 |
Depreciation & Amortisation |
(17.08) |
(15.94) |
(56.08) |
(52.66) |
Provisions for Taxation/ Deferred Tax |
(30.88) |
(9.83) |
(29.76) |
(7.51) |
Exceptional Items |
(13.54) |
55.95 |
(7.78) |
(8.96) |
Minority Interest & Profit from Associate Company |
- |
- |
(1.23) |
1.99 |
Net Profit for the Current Year |
77.31 |
86.75 |
66.99 |
(24.10) |
Earlier Years Balance Brought forward |
518.31 |
431.97 |
498.44 |
525.51 |
Net Profit available for Appropriation |
595.62 |
518.72 |
565.43 |
501.41 |
Appropriation: |
||||
Dividend on Equity Shares |
(26.68) |
- |
(26.68) |
- |
Transfer to Capital Redemption Reserves |
- |
(0.41) |
- |
(0.41) |
Amount Transferred to Non-Controlling Interest & Other Adjustment |
- |
- |
(7.60) |
(2.56) |
Transfer from Share Option Outstanding Account |
4.26 |
- |
4.26 |
- |
Transfer from other comprehensive Income |
11.31 |
- |
11.31 |
- |
Balance carried to Balance Sheet |
584.51 |
518.31 |
546.72 |
498.44 |
The Standalone Gross Revenue (including GST) from operations for Financial Year 2021-22 was '' 441.81 Crores (Previous Year: '' 247.75 Crore). The Operating Profit before tax stood at '' 121.73 Crores as against '' 40.63 Crores in the Previous Year. The Net Profit after tax for the year stood at '' 77.31 Crores against '' 86.75 Crores reported in the Previous Year.
The Consolidated Gross Revenue (including GST and Intragroup transactions) from operations for Financial Year 2021-22 was '' 749.40 Crores (Previous Year: '' 508.72 Crores). The Consolidated Operating Profit before tax stood (for continued operations) at '' 105.76 Crores (Previous Year: '' (9.62) Crores). The Consolidated Profit after tax stood at '' 66.99 Crores (Previous Year: '' (24.10) Crores).
Your Directors recommend final dividend of '' 1.25/- per equity share (i.e. 125%) of face value of '' 1/- each, for the Financial Year ended 31st March, 2022, for approval of the Members at the ensuing Annual General Meeting. For this purpose Friday, 5th August, 2022 has been fixed as the Record Date for ascertaining entitlement for the payment of Final Dividend.
Members are requested to note that pursuant to the provisions of Finance Act, 2020, the Company would be required to deduct tax at source (âTDSâ) at the prescribed rates.
In this regard, the Company will be sending an email communication to all the Shareholders whose email addresses are registered with the Company/ Depositories and physical letters to other shareholders explaining the process on withholding tax from dividends paid to the shareholders at prescribed rates.
The Board of Directors of your Company has approved and adopted the dividend distribution policy and dividends declared/recommended during the year are in accordance with the said Policy.
The dividend distribution policy is placed at Annexure I to the Report and is also available on the weblink http://www.deltacorp.in/pdf/dividend-Distribution-Policy.pdf
During the year, the issued, subscribed and paid-up capital of the Company has changed from '' 26,68,20,937/- divided into 26,68,20,937 Equity Shares of '' 1/- each to '' 26,72,57,532 /- divided into 26,72,57,532 Equity Shares of '' 1/- each on account of allotment of equity shares under DELTACORP Employees Stock Option Scheme 2009 and Delta Employees Stock Appreciation Rights Plan 2019 of the Company.
The Allotment Committee of the Company has allotted 1,87,269 Equity Shares of face value of '' 1/- each on 4th April, 2022 under DELTACORP Employees Stock Option Scheme 2009 and Delta Employees Stock Appreciation Rights Plan 2019 of the Company. The paid-up capital of the Company stood at 26,74,44,801 Equity Shares of '' 1/- each.
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on 31st March, 2022 is available on the Companyâs website at the link https:// deltacorp.in/pdf/annual-return/Annual-Return-2022. pdf
5. NUMBER OF MEETINGS OF THE BOARD
The Board met Four (4) times during the Financial Year 2021-22. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report.
6. DIRECTORSâ RESPONSIBILITY STATEMENT
Your Directors hereby confirm that:
i. In the preparation of the annual accounts for Financial Year ended 31st March, 2022, 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, 2022 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, 2022 on a âgoing concernâ 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.
7. DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors of the Company have submitted the declaration of Independence as required
under Section 149(7) of the Act and Regulation 25(8) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), confirming that they meet the criteria of independence under Section 149(6) of the Act and Regulation 16 (1)(b) of the Listing Regulations as amended from time to time. The Independent Directors have also confirmed that they have complied with the Companyâs Code of Business Conduct & Ethics.
In compliance with the rule 6(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors have registered themselves with the Indian Institute of Corporate Affairs.
8. POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION
The Policy of the Company on Directorsâ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under subsection (3) of Section 178 of the Act and Regulation 19 of Listing Regulations is appended as Annexure II to this Report.
9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT
The details of Loans, guarantees and investments covered under the provisions of Section 186 of the Act, read with Companies (Meetings of Board and Its Powers) Rules, 2014 are 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 2021-22, your Company has entered into transactions with related parties as defined under section 2(76) of the Act and Rules made thereunder and Regulation 23 of the Listing Regulations. During the Financial Year 2021-22, transactions with related parties which qualify as material transactions as per the Listing Regulations are given in Form AOC - 2 as per the Companies (Accounts) Rules, 2014 in Annexure III to this Report.
The details of related party transactions as required under IND AS-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 Companyâs website at the link: http:// www.deltacorp.in/pdf/related-partv-transaction-policv. 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 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 except mentioned below.
Scheme of Amalgamation
The Board of Directors of the Company at its meeting held on 11th April, 2022 have approved Scheme of Amalgamation of Daman Entertainment Private Limited ("Transferor Company 1â) and Daman Hospitality Private Limited ("Transferor Company 2â) with Delta Corp Limited ("Companyâ or "Transferee Companyâ) and their respective shareholders under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 ("Actâ) ("Schemeâ).
The aforesaid Scheme and other relevant documents was filed with BSE Limited, National Stock Exchange of India Limited and National Company Law Tribunal (Ahmedabad and Mumbai, Bench respectively).
Approval of Offer for Sale
Deltatech Gaming Limited (DGL), a wholly owned subsidiary of Delta Corp Limited (the "Companyâ), has filed a draft red herring prospectus dated 16th June, 2022 ("DRHPâ) with the Securities and Exchange Board of India, for a proposed initial public offering, comprising a fresh issue of its equity shares of face value of '' 1 each ("Equity Sharesâ), for an amount aggregating up to '' 3,000 million and an offer for sale of the Equity Shares held by the Company, for an amount aggregating up to '' 2,500 million ("OFSâ) (the "Offerâ). The board of directors of the Company, at its meeting held on 16th June, 2022, accorded its approval for participating in the OFS in the Offer.
12. 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 Act read with the Companies (Accounts) Rules, 2014 is appended as Annexure IV to this Report.
The Board of Directors of the Company has constituted a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. 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 Companyâs competitive advantage. The Composition of the Committee is in compliance with Regulation 21 of the Listing Regulations.
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 Companyâs business.
14. CORPORATE SOCIAL RESPONSIBILITY
A Corporate Social Responsibility (CSR) Committee has been constituted in accordance with Section 135 of the Companies Act. The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure V of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR policy is available on http://www.deltacorp.in/pdf/Corporate-Social-Responsibility-Policy-and-Composition.pdf.
The Company has adopted Vigil Mechanism and Whistle Blower Policy for Directors and Employees in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the Listing Regulations, to report genuine concerns and to provide for adequate safeguards against victimization of persons who may use such mechanism. During the year no personnel of the Company was denied access to the Audit Committee. The said policy is also available on the Companyâs website www.deltacorp.in.
16. ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD
Pursuant to the provisions of the Act and Regulation 19 of the Listing Regulations, 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 Boardâs functioning was evaluated after taking inputs from the Directors on various aspects, including 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.
The Committees of the Board were evaluated after taking inputs from the Committee members on the basis of criteria such as degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The Board and the Nomination, Remuneration and Compensation Committee reviewed the performance of the individual directors 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.
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.
In a separate meeting of independent directors, performance of Non-Independent Directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors.
17 SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES
During the year under review the Company incorporated Deltin Amusement Park Private Limited as a wholly owned subsidiary w.e.f. 12th February, 2022 and Zeicast Pte Limited ceased to be associate company on account of liquidation.
During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Act and Listing Regulations, the Company has prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Annual Report. A statement containing the performance and financial position of the subsidiaries and associate companies of the Company as required under Rule 5 of the Companies (Accounts) Rules, 2014 is provided as Annexure-A (AOC-1) in the financial statement and hence not repeated here for the sake of brevity.
In accordance with Section 136 of the Act, 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 Companyâs website www.deltacorp.in.
The Policy for determining material subsidiaries as approved may be accessed on the Companyâs website at the link: http://www.deltacorp.in/pdf/policv-for-determining-material-subsidiaries.pdf.
18. DETAILS RELATING TO DEPOSITS, COVERED UNDER CHAPTER V OF THE ACT
The Company has neither accepted nor renewed any deposits during the Financial Year 2021-22 in terms of Chapter V of the Act.
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 WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has in place adequate internal financial control with reference to financial statements.
The Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 and other applicable provisions, if any, of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015.
The Company in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/ validate them as and when appropriate. The basis of such judgments and estimates are also approved by the Statutory Auditors and Audit Committee.
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 Companyâs policies, safeguarding of Companyâs 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 provisions of the Section 152(6) (e) of the Act, Mr. Ashish Kapadia, (DIN:02011632) will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.
22. AUDITORS1. Statutory Auditor
M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No: 001076N/ N500013), were re-appointed as Statutory Auditors of the Company for second term at the
30th Annual General Meeting till the conclusion of the 35th Annual General Meeting.
The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their re-appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors.
There are no qualifications, reservations or adverse remarks or disclaimers made by Statutory Auditor of the Company, in audit report.
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 have 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, 2022. The Secretarial Audit Report is appended as Annexure VI to this Report.
There are no qualifications, reservations or adverse remarks or disclaimers made by Secretarial Auditor of the Company, in secretarial audit report.
As per the requirements of the Listing Regulations, Practicing Company Secretaries of the material unlisted subsidiaries of the Company have undertaken secretarial audits of such subsidiaries for Financial Year ended 31.03.2022. The Secretarial Audit Reports of the unlisted material subsidiaries viz. Deltatech Gaming Limited (Formerly Known as Gaussian Networks Private Limited) and Highstreet Cruises and Entertainment Private Limited is available on companyâs website i.e. https://deltacorp.in/ material-subsidiaries-financial-year.html
There was no instance of fraud during the year under review, which required the Statutory 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 and Discussion and Analysis Report is provided in a separate section and forms an integral part of this Annual Report.
25. BUSINESS RESPONSIBILITY REPORT
A Business Responsibility Report as per Regulation 34 (2) of the Listing Regulations, detailing the various initiatives taken by the Company on the environmental, social and governance front forms an integral part of this Annual Report.
As per Regulation 34(3) read with Schedule V of the Listing Regulations, a separate section on corporate governance practices followed by the Company, together with a certificate from the practicing Company Secretary confirming compliance with the conditions of Corporate Governance forms an integral part of this Annual Report.
27. AUDIT COMMITTEE OF THE COMPANY
The composition of the Audit Committee is in compliance with the requirements of Section 177 of the Act, Regulation 18 of the Listing Regulations as amended from time to time and guidance note issued by Stock Exchanges. The details of the composition of the Audit Committee are detailed in the Corporate Governance Report, which forms part of this Report.
Details of top ten employees in terms of the remuneration and employees in receipt of remuneration as required under the provisions of section 197(12) of the Act, read with rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, which form part of the Directorsâ Report, will be made available to any shareholder on request, as per provisions of section 136 of the said Act. Members who are interested in obtaining these particulars may write email to the Company Secretary on [email protected].
The disclosures in terms of the provisions of 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 VII to this Report.
29. EMPLOYEES STOCK OPTION SCHEME AND EMPLOYEES STOCK APPRECIATION RIGHTS PLAN
As required in terms of regulation 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 disclosures relating to DELTA CORP ESOS 2009 and Delta Employees Stock Appreciation Rights Plan 2019 are given in Annexure VIII to this Report.
30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.
The Company has complied with the provisions relating to constitution of Internal Complaints Committee and has Anti-Sexual Harassment policy pursuant to the provisions of The Sexual Harassment of Woman at Workplace (Prevention, Prohibition & Redressal) Act 2013. The Company has received two complaints and no complaints are pending as on 31st March, 2022.
31. COMPLIANCE OF THE SECRETARIAL STANDARDS
During the Financial Year, the Company has complied with the applicable Secretarial Standards i.e SS-1 and SS-2 as issued by the Institute of the Company Secretaries of India.
32. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
There are no applications made or any proceeding pending against the Company under Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.
33. COST RECORDS AND COST AUDIT
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company
34. DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE
At the time of one time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof.
There are no instances of one time settlement during the financial year.
35. TRANSFER OF UNCLAIMED/ UNPAID AMOUNTS AND SHARES TO THE INVESTOR EDUCATION AND PROTECTION FUND
In accordance with the provisions of the Section 124 and 125 of the Act, read with Investor Education Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended (IEPF Rules), the dividends, unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account of the Company are liable to be transferred to the IEPF.
The IEPF Rules mandate Companies to transfer shares of Members whose dividends remain unpaid/ unclaimed for a continuous period of seven years to the demat account of IEPF Authority. The Members whose dividend/shares are transferred to the IEPF Authority can claim their shares/ dividend from the Authority. In accordance with the said IEPF Rules and its amendments, the Company had sent notices to all the Shareholders whose shares were due to be transferred to the IEPF Authority and simultaneously published newspaper advertisement.
The Company has appointed a Nodal Officer under the provisions of IEPF, the details of which are available on the website of the Company at www.deltacorp.in.
The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company on the Companyâs website at www.deltacorp.in. and on the website of the Ministry of Corporate Affairs at www. iepf.gov.in/.
Your Directors express their sincere appreciation for 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, for better performance of the Company during the year.
During the current financial year consequent to the lock down due to the second/third wave of pandemic announced by the state governments, the Company operated partially with restrictions and observed all
the government advisories and guidelines issued from time to time thoroughly and in good faith.
For and on behalf of the Board of DirectorsJaydev Mody Chairman
Place: Mumbai DIN: 00234797
Date: 12th July, 2022
Mar 31, 2022
Your Directors have pleasure in presenting the Thirty- First (31st) Directorsâ Report of your Company along with the financial statements for the Financial Year ended 31st March, 2022.
1. FINANCIAL SUMMARY AND HIGHLIGHTS
Certain key aspects of your Companyâs performance during the Financial Year ended 31st March, 2022 as compared to the previous Financial Year are summarised below:
('' in Crores) |
||||
Particulars |
Standalone |
Consolidated |
||
Year Ended 31st March 2022 |
Year Ended 31st March 2021 |
Year Ended 31st March 2022 |
Year Ended 31st March 2021 |
|
Income for the year |
376.50 |
228.51 |
654.21 |
454.33 |
Profit before Interest, Depreciation and Tax |
140.66 |
57.43 |
167.73 |
48.48 |
Finance Charges |
(1.86) |
(0.86) |
(5.89) |
(5.44) |
Profit before Depreciation and Taxes |
138.81 |
56.57 |
161.84 |
43.04 |
Depreciation & Amortisation |
(17.08) |
(15.94) |
(56.08) |
(52.66) |
Provisions for Taxation/ Deferred Tax |
(30.88) |
(9.83) |
(29.76) |
(7.51) |
Exceptional Items |
(13.54) |
55.95 |
(7.78) |
(8.96) |
Minority Interest & Profit from Associate Company |
- |
- |
(1.23) |
1.99 |
Net Profit for the Current Year |
77.31 |
86.75 |
66.99 |
(24.10) |
Earlier Years Balance Brought forward |
518.31 |
431.97 |
498.44 |
525.51 |
Net Profit available for Appropriation |
595.62 |
518.72 |
565.43 |
501.41 |
Appropriation: |
||||
Dividend on Equity Shares |
(26.68) |
- |
(26.68) |
- |
Transfer to Capital Redemption Reserves |
- |
(0.41) |
- |
(0.41) |
Amount Transferred to Non-Controlling Interest & Other Adjustment |
- |
- |
(7.60) |
(2.56) |
Transfer from Share Option Outstanding Account |
4.26 |
- |
4.26 |
- |
Transfer from other comprehensive Income |
11.31 |
- |
11.31 |
- |
Balance carried to Balance Sheet |
584.51 |
518.31 |
546.72 |
498.44 |
The Standalone Gross Revenue (including GST) from operations for Financial Year 2021-22 was '' 441.81 Crores (Previous Year: '' 247.75 Crore). The Operating Profit before tax stood at '' 121.73 Crores as against '' 40.63 Crores in the Previous Year. The Net Profit after tax for the year stood at '' 77.31 Crores against '' 86.75 Crores reported in the Previous Year.
The Consolidated Gross Revenue (including GST and Intragroup transactions) from operations for Financial Year 2021-22 was '' 749.40 Crores (Previous Year: '' 508.72 Crores). The Consolidated Operating Profit before tax stood (for continued operations) at '' 105.76 Crores (Previous Year: '' (9.62) Crores). The Consolidated Profit after tax stood at '' 66.99 Crores (Previous Year: '' (24.10) Crores).
Your Directors recommend final dividend of '' 1.25/- per equity share (i.e. 125%) of face value of '' 1/- each, for the Financial Year ended 31st March, 2022, for approval of the Members at the ensuing Annual General Meeting. For this purpose Friday, 5th August, 2022 has been fixed as the Record Date for ascertaining entitlement for the payment of Final Dividend.
Members are requested to note that pursuant to the provisions of Finance Act, 2020, the Company would be required to deduct tax at source (âTDSâ) at the prescribed rates.
In this regard, the Company will be sending an email communication to all the Shareholders whose email addresses are registered with the Company/ Depositories and physical letters to other shareholders explaining the process on withholding tax from dividends paid to the shareholders at prescribed rates.
The Board of Directors of your Company has approved and adopted the dividend distribution policy and dividends declared/recommended during the year are in accordance with the said Policy.
The dividend distribution policy is placed at Annexure I to the Report and is also available on the weblink http://www.deltacorp.in/pdf/dividend-Distribution-Policy.pdf
During the year, the issued, subscribed and paid-up capital of the Company has changed from '' 26,68,20,937/- divided into 26,68,20,937 Equity Shares of '' 1/- each to '' 26,72,57,532 /- divided into 26,72,57,532 Equity Shares of '' 1/- each on account of allotment of equity shares under DELTACORP Employees Stock Option Scheme 2009 and Delta Employees Stock Appreciation Rights Plan 2019 of the Company.
The Allotment Committee of the Company has allotted 1,87,269 Equity Shares of face value of '' 1/- each on 4th April, 2022 under DELTACORP Employees Stock Option Scheme 2009 and Delta Employees Stock Appreciation Rights Plan 2019 of the Company. The paid-up capital of the Company stood at 26,74,44,801 Equity Shares of '' 1/- each.
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on 31st March, 2022 is available on the Companyâs website at the link https:// deltacorp.in/pdf/annual-return/Annual-Return-2022. pdf
5. NUMBER OF MEETINGS OF THE BOARD
The Board met Four (4) times during the Financial Year 2021-22. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report.
6. DIRECTORSâ RESPONSIBILITY STATEMENT
Your Directors hereby confirm that:
i. In the preparation of the annual accounts for Financial Year ended 31st March, 2022, 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, 2022 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, 2022 on a âgoing concernâ 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.
7. DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors of the Company have submitted the declaration of Independence as required
under Section 149(7) of the Act and Regulation 25(8) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), confirming that they meet the criteria of independence under Section 149(6) of the Act and Regulation 16 (1)(b) of the Listing Regulations as amended from time to time. The Independent Directors have also confirmed that they have complied with the Companyâs Code of Business Conduct & Ethics.
In compliance with the rule 6(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors have registered themselves with the Indian Institute of Corporate Affairs.
8. POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION
The Policy of the Company on Directorsâ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under subsection (3) of Section 178 of the Act and Regulation 19 of Listing Regulations is appended as Annexure II to this Report.
9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT
The details of Loans, guarantees and investments covered under the provisions of Section 186 of the Act, read with Companies (Meetings of Board and Its Powers) Rules, 2014 are 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 2021-22, your Company has entered into transactions with related parties as defined under section 2(76) of the Act and Rules made thereunder and Regulation 23 of the Listing Regulations. During the Financial Year 2021-22, transactions with related parties which qualify as material transactions as per the Listing Regulations are given in Form AOC - 2 as per the Companies (Accounts) Rules, 2014 in Annexure III to this Report.
The details of related party transactions as required under IND AS-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 Companyâs website at the link: http:// www.deltacorp.in/pdf/related-partv-transaction-policv. 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 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 except mentioned below.
Scheme of Amalgamation
The Board of Directors of the Company at its meeting held on 11th April, 2022 have approved Scheme of Amalgamation of Daman Entertainment Private Limited ("Transferor Company 1â) and Daman Hospitality Private Limited ("Transferor Company 2â) with Delta Corp Limited ("Companyâ or "Transferee Companyâ) and their respective shareholders under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 ("Actâ) ("Schemeâ).
The aforesaid Scheme and other relevant documents was filed with BSE Limited, National Stock Exchange of India Limited and National Company Law Tribunal (Ahmedabad and Mumbai, Bench respectively).
Approval of Offer for Sale
Deltatech Gaming Limited (DGL), a wholly owned subsidiary of Delta Corp Limited (the "Companyâ), has filed a draft red herring prospectus dated 16th June, 2022 ("DRHPâ) with the Securities and Exchange Board of India, for a proposed initial public offering, comprising a fresh issue of its equity shares of face value of '' 1 each ("Equity Sharesâ), for an amount aggregating up to '' 3,000 million and an offer for sale of the Equity Shares held by the Company, for an amount aggregating up to '' 2,500 million ("OFSâ) (the "Offerâ). The board of directors of the Company, at its meeting held on 16th June, 2022, accorded its approval for participating in the OFS in the Offer.
12. 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 Act read with the Companies (Accounts) Rules, 2014 is appended as Annexure IV to this Report.
The Board of Directors of the Company has constituted a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. 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 Companyâs competitive advantage. The Composition of the Committee is in compliance with Regulation 21 of the Listing Regulations.
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 Companyâs business.
14. CORPORATE SOCIAL RESPONSIBILITY
A Corporate Social Responsibility (CSR) Committee has been constituted in accordance with Section 135 of the Companies Act. The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure V of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR policy is available on http://www.deltacorp.in/pdf/Corporate-Social-Responsibility-Policy-and-Composition.pdf.
The Company has adopted Vigil Mechanism and Whistle Blower Policy for Directors and Employees in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the Listing Regulations, to report genuine concerns and to provide for adequate safeguards against victimization of persons who may use such mechanism. During the year no personnel of the Company was denied access to the Audit Committee. The said policy is also available on the Companyâs website www.deltacorp.in.
16. ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD
Pursuant to the provisions of the Act and Regulation 19 of the Listing Regulations, 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 Boardâs functioning was evaluated after taking inputs from the Directors on various aspects, including 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.
The Committees of the Board were evaluated after taking inputs from the Committee members on the basis of criteria such as degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The Board and the Nomination, Remuneration and Compensation Committee reviewed the performance of the individual directors 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.
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.
In a separate meeting of independent directors, performance of Non-Independent Directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors.
17 SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES
During the year under review the Company incorporated Deltin Amusement Park Private Limited as a wholly owned subsidiary w.e.f. 12th February, 2022 and Zeicast Pte Limited ceased to be associate company on account of liquidation.
During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Act and Listing Regulations, the Company has prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Annual Report. A statement containing the performance and financial position of the subsidiaries and associate companies of the Company as required under Rule 5 of the Companies (Accounts) Rules, 2014 is provided as Annexure-A (AOC-1) in the financial statement and hence not repeated here for the sake of brevity.
In accordance with Section 136 of the Act, 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 Companyâs website www.deltacorp.in.
The Policy for determining material subsidiaries as approved may be accessed on the Companyâs website at the link: http://www.deltacorp.in/pdf/policv-for-determining-material-subsidiaries.pdf.
18. DETAILS RELATING TO DEPOSITS, COVERED UNDER CHAPTER V OF THE ACT
The Company has neither accepted nor renewed any deposits during the Financial Year 2021-22 in terms of Chapter V of the Act.
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 WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has in place adequate internal financial control with reference to financial statements.
The Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 and other applicable provisions, if any, of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015.
The Company in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/ validate them as and when appropriate. The basis of such judgments and estimates are also approved by the Statutory Auditors and Audit Committee.
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 Companyâs policies, safeguarding of Companyâs 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 provisions of the Section 152(6) (e) of the Act, Mr. Ashish Kapadia, (DIN:02011632) will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.
22. AUDITORS1. Statutory Auditor
M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No: 001076N/ N500013), were re-appointed as Statutory Auditors of the Company for second term at the
30th Annual General Meeting till the conclusion of the 35th Annual General Meeting.
The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their re-appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors.
There are no qualifications, reservations or adverse remarks or disclaimers made by Statutory Auditor of the Company, in audit report.
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 have 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, 2022. The Secretarial Audit Report is appended as Annexure VI to this Report.
There are no qualifications, reservations or adverse remarks or disclaimers made by Secretarial Auditor of the Company, in secretarial audit report.
As per the requirements of the Listing Regulations, Practicing Company Secretaries of the material unlisted subsidiaries of the Company have undertaken secretarial audits of such subsidiaries for Financial Year ended 31.03.2022. The Secretarial Audit Reports of the unlisted material subsidiaries viz. Deltatech Gaming Limited (Formerly Known as Gaussian Networks Private Limited) and Highstreet Cruises and Entertainment Private Limited is available on companyâs website i.e. https://deltacorp.in/ material-subsidiaries-financial-year.html
There was no instance of fraud during the year under review, which required the Statutory 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 and Discussion and Analysis Report is provided in a separate section and forms an integral part of this Annual Report.
25. BUSINESS RESPONSIBILITY REPORT
A Business Responsibility Report as per Regulation 34 (2) of the Listing Regulations, detailing the various initiatives taken by the Company on the environmental, social and governance front forms an integral part of this Annual Report.
As per Regulation 34(3) read with Schedule V of the Listing Regulations, a separate section on corporate governance practices followed by the Company, together with a certificate from the practicing Company Secretary confirming compliance with the conditions of Corporate Governance forms an integral part of this Annual Report.
27. AUDIT COMMITTEE OF THE COMPANY
The composition of the Audit Committee is in compliance with the requirements of Section 177 of the Act, Regulation 18 of the Listing Regulations as amended from time to time and guidance note issued by Stock Exchanges. The details of the composition of the Audit Committee are detailed in the Corporate Governance Report, which forms part of this Report.
Details of top ten employees in terms of the remuneration and employees in receipt of remuneration as required under the provisions of section 197(12) of the Act, read with rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, which form part of the Directorsâ Report, will be made available to any shareholder on request, as per provisions of section 136 of the said Act. Members who are interested in obtaining these particulars may write email to the Company Secretary on [email protected].
The disclosures in terms of the provisions of 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 VII to this Report.
29. EMPLOYEES STOCK OPTION SCHEME AND EMPLOYEES STOCK APPRECIATION RIGHTS PLAN
As required in terms of regulation 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 disclosures relating to DELTA CORP ESOS 2009 and Delta Employees Stock Appreciation Rights Plan 2019 are given in Annexure VIII to this Report.
30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.
The Company has complied with the provisions relating to constitution of Internal Complaints Committee and has Anti-Sexual Harassment policy pursuant to the provisions of The Sexual Harassment of Woman at Workplace (Prevention, Prohibition & Redressal) Act 2013. The Company has received two complaints and no complaints are pending as on 31st March, 2022.
31. COMPLIANCE OF THE SECRETARIAL STANDARDS
During the Financial Year, the Company has complied with the applicable Secretarial Standards i.e SS-1 and SS-2 as issued by the Institute of the Company Secretaries of India.
32. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
There are no applications made or any proceeding pending against the Company under Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.
33. COST RECORDS AND COST AUDIT
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company
34. DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE
At the time of one time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof.
There are no instances of one time settlement during the financial year.
35. TRANSFER OF UNCLAIMED/ UNPAID AMOUNTS AND SHARES TO THE INVESTOR EDUCATION AND PROTECTION FUND
In accordance with the provisions of the Section 124 and 125 of the Act, read with Investor Education Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended (IEPF Rules), the dividends, unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account of the Company are liable to be transferred to the IEPF.
The IEPF Rules mandate Companies to transfer shares of Members whose dividends remain unpaid/ unclaimed for a continuous period of seven years to the demat account of IEPF Authority. The Members whose dividend/shares are transferred to the IEPF Authority can claim their shares/ dividend from the Authority. In accordance with the said IEPF Rules and its amendments, the Company had sent notices to all the Shareholders whose shares were due to be transferred to the IEPF Authority and simultaneously published newspaper advertisement.
The Company has appointed a Nodal Officer under the provisions of IEPF, the details of which are available on the website of the Company at www.deltacorp.in.
The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company on the Companyâs website at www.deltacorp.in. and on the website of the Ministry of Corporate Affairs at www. iepf.gov.in/.
Your Directors express their sincere appreciation for 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, for better performance of the Company during the year.
During the current financial year consequent to the lock down due to the second/third wave of pandemic announced by the state governments, the Company operated partially with restrictions and observed all
the government advisories and guidelines issued from time to time thoroughly and in good faith.
For and on behalf of the Board of DirectorsJaydev Mody Chairman
Place: Mumbai DIN: 00234797
Date: 12th July, 2022
Mar 31, 2022
Your Directors have pleasure in presenting the Thirty- First (31st) Directorsâ Report of your Company along with the financial statements for the Financial Year ended 31st March, 2022.
1. FINANCIAL SUMMARY AND HIGHLIGHTS
Certain key aspects of your Companyâs performance during the Financial Year ended 31st March, 2022 as compared to the previous Financial Year are summarised below:
('' in Crores) |
||||
Particulars |
Standalone |
Consolidated |
||
Year Ended 31st March 2022 |
Year Ended 31st March 2021 |
Year Ended 31st March 2022 |
Year Ended 31st March 2021 |
|
Income for the year |
376.50 |
228.51 |
654.21 |
454.33 |
Profit before Interest, Depreciation and Tax |
140.66 |
57.43 |
167.73 |
48.48 |
Finance Charges |
(1.86) |
(0.86) |
(5.89) |
(5.44) |
Profit before Depreciation and Taxes |
138.81 |
56.57 |
161.84 |
43.04 |
Depreciation & Amortisation |
(17.08) |
(15.94) |
(56.08) |
(52.66) |
Provisions for Taxation/ Deferred Tax |
(30.88) |
(9.83) |
(29.76) |
(7.51) |
Exceptional Items |
(13.54) |
55.95 |
(7.78) |
(8.96) |
Minority Interest & Profit from Associate Company |
- |
- |
(1.23) |
1.99 |
Net Profit for the Current Year |
77.31 |
86.75 |
66.99 |
(24.10) |
Earlier Years Balance Brought forward |
518.31 |
431.97 |
498.44 |
525.51 |
Net Profit available for Appropriation |
595.62 |
518.72 |
565.43 |
501.41 |
Appropriation: |
||||
Dividend on Equity Shares |
(26.68) |
- |
(26.68) |
- |
Transfer to Capital Redemption Reserves |
- |
(0.41) |
- |
(0.41) |
Amount Transferred to Non-Controlling Interest & Other Adjustment |
- |
- |
(7.60) |
(2.56) |
Transfer from Share Option Outstanding Account |
4.26 |
- |
4.26 |
- |
Transfer from other comprehensive Income |
11.31 |
- |
11.31 |
- |
Balance carried to Balance Sheet |
584.51 |
518.31 |
546.72 |
498.44 |
The Standalone Gross Revenue (including GST) from operations for Financial Year 2021-22 was '' 441.81 Crores (Previous Year: '' 247.75 Crore). The Operating Profit before tax stood at '' 121.73 Crores as against '' 40.63 Crores in the Previous Year. The Net Profit after tax for the year stood at '' 77.31 Crores against '' 86.75 Crores reported in the Previous Year.
The Consolidated Gross Revenue (including GST and Intragroup transactions) from operations for Financial Year 2021-22 was '' 749.40 Crores (Previous Year: '' 508.72 Crores). The Consolidated Operating Profit before tax stood (for continued operations) at '' 105.76 Crores (Previous Year: '' (9.62) Crores). The Consolidated Profit after tax stood at '' 66.99 Crores (Previous Year: '' (24.10) Crores).
Your Directors recommend final dividend of '' 1.25/- per equity share (i.e. 125%) of face value of '' 1/- each, for the Financial Year ended 31st March, 2022, for approval of the Members at the ensuing Annual General Meeting. For this purpose Friday, 5th August, 2022 has been fixed as the Record Date for ascertaining entitlement for the payment of Final Dividend.
Members are requested to note that pursuant to the provisions of Finance Act, 2020, the Company would be required to deduct tax at source (âTDSâ) at the prescribed rates.
In this regard, the Company will be sending an email communication to all the Shareholders whose email addresses are registered with the Company/ Depositories and physical letters to other shareholders explaining the process on withholding tax from dividends paid to the shareholders at prescribed rates.
The Board of Directors of your Company has approved and adopted the dividend distribution policy and dividends declared/recommended during the year are in accordance with the said Policy.
The dividend distribution policy is placed at Annexure I to the Report and is also available on the weblink http://www.deltacorp.in/pdf/dividend-Distribution-Policy.pdf
During the year, the issued, subscribed and paid-up capital of the Company has changed from '' 26,68,20,937/- divided into 26,68,20,937 Equity Shares of '' 1/- each to '' 26,72,57,532 /- divided into 26,72,57,532 Equity Shares of '' 1/- each on account of allotment of equity shares under DELTACORP Employees Stock Option Scheme 2009 and Delta Employees Stock Appreciation Rights Plan 2019 of the Company.
The Allotment Committee of the Company has allotted 1,87,269 Equity Shares of face value of '' 1/- each on 4th April, 2022 under DELTACORP Employees Stock Option Scheme 2009 and Delta Employees Stock Appreciation Rights Plan 2019 of the Company. The paid-up capital of the Company stood at 26,74,44,801 Equity Shares of '' 1/- each.
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on 31st March, 2022 is available on the Companyâs website at the link https:// deltacorp.in/pdf/annual-return/Annual-Return-2022. pdf
5. NUMBER OF MEETINGS OF THE BOARD
The Board met Four (4) times during the Financial Year 2021-22. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report.
6. DIRECTORSâ RESPONSIBILITY STATEMENT
Your Directors hereby confirm that:
i. In the preparation of the annual accounts for Financial Year ended 31st March, 2022, 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, 2022 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, 2022 on a âgoing concernâ 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.
7. DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors of the Company have submitted the declaration of Independence as required
under Section 149(7) of the Act and Regulation 25(8) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), confirming that they meet the criteria of independence under Section 149(6) of the Act and Regulation 16 (1)(b) of the Listing Regulations as amended from time to time. The Independent Directors have also confirmed that they have complied with the Companyâs Code of Business Conduct & Ethics.
In compliance with the rule 6(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors have registered themselves with the Indian Institute of Corporate Affairs.
8. POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION
The Policy of the Company on Directorsâ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under subsection (3) of Section 178 of the Act and Regulation 19 of Listing Regulations is appended as Annexure II to this Report.
9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT
The details of Loans, guarantees and investments covered under the provisions of Section 186 of the Act, read with Companies (Meetings of Board and Its Powers) Rules, 2014 are 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 2021-22, your Company has entered into transactions with related parties as defined under section 2(76) of the Act and Rules made thereunder and Regulation 23 of the Listing Regulations. During the Financial Year 2021-22, transactions with related parties which qualify as material transactions as per the Listing Regulations are given in Form AOC - 2 as per the Companies (Accounts) Rules, 2014 in Annexure III to this Report.
The details of related party transactions as required under IND AS-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 Companyâs website at the link: http:// www.deltacorp.in/pdf/related-partv-transaction-policv. 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 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 except mentioned below.
Scheme of Amalgamation
The Board of Directors of the Company at its meeting held on 11th April, 2022 have approved Scheme of Amalgamation of Daman Entertainment Private Limited ("Transferor Company 1â) and Daman Hospitality Private Limited ("Transferor Company 2â) with Delta Corp Limited ("Companyâ or "Transferee Companyâ) and their respective shareholders under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 ("Actâ) ("Schemeâ).
The aforesaid Scheme and other relevant documents was filed with BSE Limited, National Stock Exchange of India Limited and National Company Law Tribunal (Ahmedabad and Mumbai, Bench respectively).
Approval of Offer for Sale
Deltatech Gaming Limited (DGL), a wholly owned subsidiary of Delta Corp Limited (the "Companyâ), has filed a draft red herring prospectus dated 16th June, 2022 ("DRHPâ) with the Securities and Exchange Board of India, for a proposed initial public offering, comprising a fresh issue of its equity shares of face value of '' 1 each ("Equity Sharesâ), for an amount aggregating up to '' 3,000 million and an offer for sale of the Equity Shares held by the Company, for an amount aggregating up to '' 2,500 million ("OFSâ) (the "Offerâ). The board of directors of the Company, at its meeting held on 16th June, 2022, accorded its approval for participating in the OFS in the Offer.
12. 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 Act read with the Companies (Accounts) Rules, 2014 is appended as Annexure IV to this Report.
The Board of Directors of the Company has constituted a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. 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 Companyâs competitive advantage. The Composition of the Committee is in compliance with Regulation 21 of the Listing Regulations.
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 Companyâs business.
14. CORPORATE SOCIAL RESPONSIBILITY
A Corporate Social Responsibility (CSR) Committee has been constituted in accordance with Section 135 of the Companies Act. The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure V of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR policy is available on http://www.deltacorp.in/pdf/Corporate-Social-Responsibility-Policy-and-Composition.pdf.
The Company has adopted Vigil Mechanism and Whistle Blower Policy for Directors and Employees in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the Listing Regulations, to report genuine concerns and to provide for adequate safeguards against victimization of persons who may use such mechanism. During the year no personnel of the Company was denied access to the Audit Committee. The said policy is also available on the Companyâs website www.deltacorp.in.
16. ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD
Pursuant to the provisions of the Act and Regulation 19 of the Listing Regulations, 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 Boardâs functioning was evaluated after taking inputs from the Directors on various aspects, including 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.
The Committees of the Board were evaluated after taking inputs from the Committee members on the basis of criteria such as degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The Board and the Nomination, Remuneration and Compensation Committee reviewed the performance of the individual directors 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.
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.
In a separate meeting of independent directors, performance of Non-Independent Directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors.
17 SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES
During the year under review the Company incorporated Deltin Amusement Park Private Limited as a wholly owned subsidiary w.e.f. 12th February, 2022 and Zeicast Pte Limited ceased to be associate company on account of liquidation.
During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Act and Listing Regulations, the Company has prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Annual Report. A statement containing the performance and financial position of the subsidiaries and associate companies of the Company as required under Rule 5 of the Companies (Accounts) Rules, 2014 is provided as Annexure-A (AOC-1) in the financial statement and hence not repeated here for the sake of brevity.
In accordance with Section 136 of the Act, 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 Companyâs website www.deltacorp.in.
The Policy for determining material subsidiaries as approved may be accessed on the Companyâs website at the link: http://www.deltacorp.in/pdf/policv-for-determining-material-subsidiaries.pdf.
18. DETAILS RELATING TO DEPOSITS, COVERED UNDER CHAPTER V OF THE ACT
The Company has neither accepted nor renewed any deposits during the Financial Year 2021-22 in terms of Chapter V of the Act.
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 WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has in place adequate internal financial control with reference to financial statements.
The Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 and other applicable provisions, if any, of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015.
The Company in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/ validate them as and when appropriate. The basis of such judgments and estimates are also approved by the Statutory Auditors and Audit Committee.
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 Companyâs policies, safeguarding of Companyâs 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 provisions of the Section 152(6) (e) of the Act, Mr. Ashish Kapadia, (DIN:02011632) will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.
22. AUDITORS1. Statutory Auditor
M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No: 001076N/ N500013), were re-appointed as Statutory Auditors of the Company for second term at the
30th Annual General Meeting till the conclusion of the 35th Annual General Meeting.
The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their re-appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors.
There are no qualifications, reservations or adverse remarks or disclaimers made by Statutory Auditor of the Company, in audit report.
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 have 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, 2022. The Secretarial Audit Report is appended as Annexure VI to this Report.
There are no qualifications, reservations or adverse remarks or disclaimers made by Secretarial Auditor of the Company, in secretarial audit report.
As per the requirements of the Listing Regulations, Practicing Company Secretaries of the material unlisted subsidiaries of the Company have undertaken secretarial audits of such subsidiaries for Financial Year ended 31.03.2022. The Secretarial Audit Reports of the unlisted material subsidiaries viz. Deltatech Gaming Limited (Formerly Known as Gaussian Networks Private Limited) and Highstreet Cruises and Entertainment Private Limited is available on companyâs website i.e. https://deltacorp.in/ material-subsidiaries-financial-year.html
There was no instance of fraud during the year under review, which required the Statutory 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 and Discussion and Analysis Report is provided in a separate section and forms an integral part of this Annual Report.
25. BUSINESS RESPONSIBILITY REPORT
A Business Responsibility Report as per Regulation 34 (2) of the Listing Regulations, detailing the various initiatives taken by the Company on the environmental, social and governance front forms an integral part of this Annual Report.
As per Regulation 34(3) read with Schedule V of the Listing Regulations, a separate section on corporate governance practices followed by the Company, together with a certificate from the practicing Company Secretary confirming compliance with the conditions of Corporate Governance forms an integral part of this Annual Report.
27. AUDIT COMMITTEE OF THE COMPANY
The composition of the Audit Committee is in compliance with the requirements of Section 177 of the Act, Regulation 18 of the Listing Regulations as amended from time to time and guidance note issued by Stock Exchanges. The details of the composition of the Audit Committee are detailed in the Corporate Governance Report, which forms part of this Report.
Details of top ten employees in terms of the remuneration and employees in receipt of remuneration as required under the provisions of section 197(12) of the Act, read with rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, which form part of the Directorsâ Report, will be made available to any shareholder on request, as per provisions of section 136 of the said Act. Members who are interested in obtaining these particulars may write email to the Company Secretary on [email protected].
The disclosures in terms of the provisions of 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 VII to this Report.
29. EMPLOYEES STOCK OPTION SCHEME AND EMPLOYEES STOCK APPRECIATION RIGHTS PLAN
As required in terms of regulation 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 disclosures relating to DELTA CORP ESOS 2009 and Delta Employees Stock Appreciation Rights Plan 2019 are given in Annexure VIII to this Report.
30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.
The Company has complied with the provisions relating to constitution of Internal Complaints Committee and has Anti-Sexual Harassment policy pursuant to the provisions of The Sexual Harassment of Woman at Workplace (Prevention, Prohibition & Redressal) Act 2013. The Company has received two complaints and no complaints are pending as on 31st March, 2022.
31. COMPLIANCE OF THE SECRETARIAL STANDARDS
During the Financial Year, the Company has complied with the applicable Secretarial Standards i.e SS-1 and SS-2 as issued by the Institute of the Company Secretaries of India.
32. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
There are no applications made or any proceeding pending against the Company under Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.
33. COST RECORDS AND COST AUDIT
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company
34. DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE
At the time of one time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof.
There are no instances of one time settlement during the financial year.
35. TRANSFER OF UNCLAIMED/ UNPAID AMOUNTS AND SHARES TO THE INVESTOR EDUCATION AND PROTECTION FUND
In accordance with the provisions of the Section 124 and 125 of the Act, read with Investor Education Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended (IEPF Rules), the dividends, unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account of the Company are liable to be transferred to the IEPF.
The IEPF Rules mandate Companies to transfer shares of Members whose dividends remain unpaid/ unclaimed for a continuous period of seven years to the demat account of IEPF Authority. The Members whose dividend/shares are transferred to the IEPF Authority can claim their shares/ dividend from the Authority. In accordance with the said IEPF Rules and its amendments, the Company had sent notices to all the Shareholders whose shares were due to be transferred to the IEPF Authority and simultaneously published newspaper advertisement.
The Company has appointed a Nodal Officer under the provisions of IEPF, the details of which are available on the website of the Company at www.deltacorp.in.
The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company on the Companyâs website at www.deltacorp.in. and on the website of the Ministry of Corporate Affairs at www. iepf.gov.in/.
Your Directors express their sincere appreciation for 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, for better performance of the Company during the year.
During the current financial year consequent to the lock down due to the second/third wave of pandemic announced by the state governments, the Company operated partially with restrictions and observed all
the government advisories and guidelines issued from time to time thoroughly and in good faith.
For and on behalf of the Board of DirectorsJaydev Mody Chairman
Place: Mumbai DIN: 00234797
Date: 12th July, 2022
Mar 31, 2022
Your Directors have pleasure in presenting the Thirty- First (31st) Directorsâ Report of your Company along with the financial statements for the Financial Year ended 31st March, 2022.
1. FINANCIAL SUMMARY AND HIGHLIGHTS
Certain key aspects of your Companyâs performance during the Financial Year ended 31st March, 2022 as compared to the previous Financial Year are summarised below:
('' in Crores) |
||||
Particulars |
Standalone |
Consolidated |
||
Year Ended 31st March 2022 |
Year Ended 31st March 2021 |
Year Ended 31st March 2022 |
Year Ended 31st March 2021 |
|
Income for the year |
376.50 |
228.51 |
654.21 |
454.33 |
Profit before Interest, Depreciation and Tax |
140.66 |
57.43 |
167.73 |
48.48 |
Finance Charges |
(1.86) |
(0.86) |
(5.89) |
(5.44) |
Profit before Depreciation and Taxes |
138.81 |
56.57 |
161.84 |
43.04 |
Depreciation & Amortisation |
(17.08) |
(15.94) |
(56.08) |
(52.66) |
Provisions for Taxation/ Deferred Tax |
(30.88) |
(9.83) |
(29.76) |
(7.51) |
Exceptional Items |
(13.54) |
55.95 |
(7.78) |
(8.96) |
Minority Interest & Profit from Associate Company |
- |
- |
(1.23) |
1.99 |
Net Profit for the Current Year |
77.31 |
86.75 |
66.99 |
(24.10) |
Earlier Years Balance Brought forward |
518.31 |
431.97 |
498.44 |
525.51 |
Net Profit available for Appropriation |
595.62 |
518.72 |
565.43 |
501.41 |
Appropriation: |
||||
Dividend on Equity Shares |
(26.68) |
- |
(26.68) |
- |
Transfer to Capital Redemption Reserves |
- |
(0.41) |
- |
(0.41) |
Amount Transferred to Non-Controlling Interest & Other Adjustment |
- |
- |
(7.60) |
(2.56) |
Transfer from Share Option Outstanding Account |
4.26 |
- |
4.26 |
- |
Transfer from other comprehensive Income |
11.31 |
- |
11.31 |
- |
Balance carried to Balance Sheet |
584.51 |
518.31 |
546.72 |
498.44 |
The Standalone Gross Revenue (including GST) from operations for Financial Year 2021-22 was '' 441.81 Crores (Previous Year: '' 247.75 Crore). The Operating Profit before tax stood at '' 121.73 Crores as against '' 40.63 Crores in the Previous Year. The Net Profit after tax for the year stood at '' 77.31 Crores against '' 86.75 Crores reported in the Previous Year.
The Consolidated Gross Revenue (including GST and Intragroup transactions) from operations for Financial Year 2021-22 was '' 749.40 Crores (Previous Year: '' 508.72 Crores). The Consolidated Operating Profit before tax stood (for continued operations) at '' 105.76 Crores (Previous Year: '' (9.62) Crores). The Consolidated Profit after tax stood at '' 66.99 Crores (Previous Year: '' (24.10) Crores).
Your Directors recommend final dividend of '' 1.25/- per equity share (i.e. 125%) of face value of '' 1/- each, for the Financial Year ended 31st March, 2022, for approval of the Members at the ensuing Annual General Meeting. For this purpose Friday, 5th August, 2022 has been fixed as the Record Date for ascertaining entitlement for the payment of Final Dividend.
Members are requested to note that pursuant to the provisions of Finance Act, 2020, the Company would be required to deduct tax at source (âTDSâ) at the prescribed rates.
In this regard, the Company will be sending an email communication to all the Shareholders whose email addresses are registered with the Company/ Depositories and physical letters to other shareholders explaining the process on withholding tax from dividends paid to the shareholders at prescribed rates.
The Board of Directors of your Company has approved and adopted the dividend distribution policy and dividends declared/recommended during the year are in accordance with the said Policy.
The dividend distribution policy is placed at Annexure I to the Report and is also available on the weblink http://www.deltacorp.in/pdf/dividend-Distribution-Policy.pdf
During the year, the issued, subscribed and paid-up capital of the Company has changed from '' 26,68,20,937/- divided into 26,68,20,937 Equity Shares of '' 1/- each to '' 26,72,57,532 /- divided into 26,72,57,532 Equity Shares of '' 1/- each on account of allotment of equity shares under DELTACORP Employees Stock Option Scheme 2009 and Delta Employees Stock Appreciation Rights Plan 2019 of the Company.
The Allotment Committee of the Company has allotted 1,87,269 Equity Shares of face value of '' 1/- each on 4th April, 2022 under DELTACORP Employees Stock Option Scheme 2009 and Delta Employees Stock Appreciation Rights Plan 2019 of the Company. The paid-up capital of the Company stood at 26,74,44,801 Equity Shares of '' 1/- each.
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on 31st March, 2022 is available on the Companyâs website at the link https:// deltacorp.in/pdf/annual-return/Annual-Return-2022. pdf
5. NUMBER OF MEETINGS OF THE BOARD
The Board met Four (4) times during the Financial Year 2021-22. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report.
6. DIRECTORSâ RESPONSIBILITY STATEMENT
Your Directors hereby confirm that:
i. In the preparation of the annual accounts for Financial Year ended 31st March, 2022, 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, 2022 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, 2022 on a âgoing concernâ 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.
7. DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors of the Company have submitted the declaration of Independence as required
under Section 149(7) of the Act and Regulation 25(8) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), confirming that they meet the criteria of independence under Section 149(6) of the Act and Regulation 16 (1)(b) of the Listing Regulations as amended from time to time. The Independent Directors have also confirmed that they have complied with the Companyâs Code of Business Conduct & Ethics.
In compliance with the rule 6(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors have registered themselves with the Indian Institute of Corporate Affairs.
8. POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION
The Policy of the Company on Directorsâ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under subsection (3) of Section 178 of the Act and Regulation 19 of Listing Regulations is appended as Annexure II to this Report.
9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT
The details of Loans, guarantees and investments covered under the provisions of Section 186 of the Act, read with Companies (Meetings of Board and Its Powers) Rules, 2014 are 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 2021-22, your Company has entered into transactions with related parties as defined under section 2(76) of the Act and Rules made thereunder and Regulation 23 of the Listing Regulations. During the Financial Year 2021-22, transactions with related parties which qualify as material transactions as per the Listing Regulations are given in Form AOC - 2 as per the Companies (Accounts) Rules, 2014 in Annexure III to this Report.
The details of related party transactions as required under IND AS-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 Companyâs website at the link: http:// www.deltacorp.in/pdf/related-partv-transaction-policv. 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 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 except mentioned below.
Scheme of Amalgamation
The Board of Directors of the Company at its meeting held on 11th April, 2022 have approved Scheme of Amalgamation of Daman Entertainment Private Limited ("Transferor Company 1â) and Daman Hospitality Private Limited ("Transferor Company 2â) with Delta Corp Limited ("Companyâ or "Transferee Companyâ) and their respective shareholders under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 ("Actâ) ("Schemeâ).
The aforesaid Scheme and other relevant documents was filed with BSE Limited, National Stock Exchange of India Limited and National Company Law Tribunal (Ahmedabad and Mumbai, Bench respectively).
Approval of Offer for Sale
Deltatech Gaming Limited (DGL), a wholly owned subsidiary of Delta Corp Limited (the "Companyâ), has filed a draft red herring prospectus dated 16th June, 2022 ("DRHPâ) with the Securities and Exchange Board of India, for a proposed initial public offering, comprising a fresh issue of its equity shares of face value of '' 1 each ("Equity Sharesâ), for an amount aggregating up to '' 3,000 million and an offer for sale of the Equity Shares held by the Company, for an amount aggregating up to '' 2,500 million ("OFSâ) (the "Offerâ). The board of directors of the Company, at its meeting held on 16th June, 2022, accorded its approval for participating in the OFS in the Offer.
12. 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 Act read with the Companies (Accounts) Rules, 2014 is appended as Annexure IV to this Report.
The Board of Directors of the Company has constituted a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. 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 Companyâs competitive advantage. The Composition of the Committee is in compliance with Regulation 21 of the Listing Regulations.
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 Companyâs business.
14. CORPORATE SOCIAL RESPONSIBILITY
A Corporate Social Responsibility (CSR) Committee has been constituted in accordance with Section 135 of the Companies Act. The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure V of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR policy is available on http://www.deltacorp.in/pdf/Corporate-Social-Responsibility-Policy-and-Composition.pdf.
The Company has adopted Vigil Mechanism and Whistle Blower Policy for Directors and Employees in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the Listing Regulations, to report genuine concerns and to provide for adequate safeguards against victimization of persons who may use such mechanism. During the year no personnel of the Company was denied access to the Audit Committee. The said policy is also available on the Companyâs website www.deltacorp.in.
16. ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD
Pursuant to the provisions of the Act and Regulation 19 of the Listing Regulations, 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 Boardâs functioning was evaluated after taking inputs from the Directors on various aspects, including 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.
The Committees of the Board were evaluated after taking inputs from the Committee members on the basis of criteria such as degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The Board and the Nomination, Remuneration and Compensation Committee reviewed the performance of the individual directors 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.
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.
In a separate meeting of independent directors, performance of Non-Independent Directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors.
17 SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES
During the year under review the Company incorporated Deltin Amusement Park Private Limited as a wholly owned subsidiary w.e.f. 12th February, 2022 and Zeicast Pte Limited ceased to be associate company on account of liquidation.
During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Act and Listing Regulations, the Company has prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Annual Report. A statement containing the performance and financial position of the subsidiaries and associate companies of the Company as required under Rule 5 of the Companies (Accounts) Rules, 2014 is provided as Annexure-A (AOC-1) in the financial statement and hence not repeated here for the sake of brevity.
In accordance with Section 136 of the Act, 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 Companyâs website www.deltacorp.in.
The Policy for determining material subsidiaries as approved may be accessed on the Companyâs website at the link: http://www.deltacorp.in/pdf/policv-for-determining-material-subsidiaries.pdf.
18. DETAILS RELATING TO DEPOSITS, COVERED UNDER CHAPTER V OF THE ACT
The Company has neither accepted nor renewed any deposits during the Financial Year 2021-22 in terms of Chapter V of the Act.
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 WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has in place adequate internal financial control with reference to financial statements.
The Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 and other applicable provisions, if any, of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015.
The Company in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/ validate them as and when appropriate. The basis of such judgments and estimates are also approved by the Statutory Auditors and Audit Committee.
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 Companyâs policies, safeguarding of Companyâs 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 provisions of the Section 152(6) (e) of the Act, Mr. Ashish Kapadia, (DIN:02011632) will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.
22. AUDITORS1. Statutory Auditor
M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No: 001076N/ N500013), were re-appointed as Statutory Auditors of the Company for second term at the
30th Annual General Meeting till the conclusion of the 35th Annual General Meeting.
The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their re-appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors.
There are no qualifications, reservations or adverse remarks or disclaimers made by Statutory Auditor of the Company, in audit report.
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 have 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, 2022. The Secretarial Audit Report is appended as Annexure VI to this Report.
There are no qualifications, reservations or adverse remarks or disclaimers made by Secretarial Auditor of the Company, in secretarial audit report.
As per the requirements of the Listing Regulations, Practicing Company Secretaries of the material unlisted subsidiaries of the Company have undertaken secretarial audits of such subsidiaries for Financial Year ended 31.03.2022. The Secretarial Audit Reports of the unlisted material subsidiaries viz. Deltatech Gaming Limited (Formerly Known as Gaussian Networks Private Limited) and Highstreet Cruises and Entertainment Private Limited is available on companyâs website i.e. https://deltacorp.in/ material-subsidiaries-financial-year.html
There was no instance of fraud during the year under review, which required the Statutory 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 and Discussion and Analysis Report is provided in a separate section and forms an integral part of this Annual Report.
25. BUSINESS RESPONSIBILITY REPORT
A Business Responsibility Report as per Regulation 34 (2) of the Listing Regulations, detailing the various initiatives taken by the Company on the environmental, social and governance front forms an integral part of this Annual Report.
As per Regulation 34(3) read with Schedule V of the Listing Regulations, a separate section on corporate governance practices followed by the Company, together with a certificate from the practicing Company Secretary confirming compliance with the conditions of Corporate Governance forms an integral part of this Annual Report.
27. AUDIT COMMITTEE OF THE COMPANY
The composition of the Audit Committee is in compliance with the requirements of Section 177 of the Act, Regulation 18 of the Listing Regulations as amended from time to time and guidance note issued by Stock Exchanges. The details of the composition of the Audit Committee are detailed in the Corporate Governance Report, which forms part of this Report.
Details of top ten employees in terms of the remuneration and employees in receipt of remuneration as required under the provisions of section 197(12) of the Act, read with rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, which form part of the Directorsâ Report, will be made available to any shareholder on request, as per provisions of section 136 of the said Act. Members who are interested in obtaining these particulars may write email to the Company Secretary on [email protected].
The disclosures in terms of the provisions of 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 VII to this Report.
29. EMPLOYEES STOCK OPTION SCHEME AND EMPLOYEES STOCK APPRECIATION RIGHTS PLAN
As required in terms of regulation 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 disclosures relating to DELTA CORP ESOS 2009 and Delta Employees Stock Appreciation Rights Plan 2019 are given in Annexure VIII to this Report.
30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.
The Company has complied with the provisions relating to constitution of Internal Complaints Committee and has Anti-Sexual Harassment policy pursuant to the provisions of The Sexual Harassment of Woman at Workplace (Prevention, Prohibition & Redressal) Act 2013. The Company has received two complaints and no complaints are pending as on 31st March, 2022.
31. COMPLIANCE OF THE SECRETARIAL STANDARDS
During the Financial Year, the Company has complied with the applicable Secretarial Standards i.e SS-1 and SS-2 as issued by the Institute of the Company Secretaries of India.
32. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
There are no applications made or any proceeding pending against the Company under Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.
33. COST RECORDS AND COST AUDIT
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company
34. DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE
At the time of one time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof.
There are no instances of one time settlement during the financial year.
35. TRANSFER OF UNCLAIMED/ UNPAID AMOUNTS AND SHARES TO THE INVESTOR EDUCATION AND PROTECTION FUND
In accordance with the provisions of the Section 124 and 125 of the Act, read with Investor Education Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended (IEPF Rules), the dividends, unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account of the Company are liable to be transferred to the IEPF.
The IEPF Rules mandate Companies to transfer shares of Members whose dividends remain unpaid/ unclaimed for a continuous period of seven years to the demat account of IEPF Authority. The Members whose dividend/shares are transferred to the IEPF Authority can claim their shares/ dividend from the Authority. In accordance with the said IEPF Rules and its amendments, the Company had sent notices to all the Shareholders whose shares were due to be transferred to the IEPF Authority and simultaneously published newspaper advertisement.
The Company has appointed a Nodal Officer under the provisions of IEPF, the details of which are available on the website of the Company at www.deltacorp.in.
The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company on the Companyâs website at www.deltacorp.in. and on the website of the Ministry of Corporate Affairs at www. iepf.gov.in/.
Your Directors express their sincere appreciation for 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, for better performance of the Company during the year.
During the current financial year consequent to the lock down due to the second/third wave of pandemic announced by the state governments, the Company operated partially with restrictions and observed all
the government advisories and guidelines issued from time to time thoroughly and in good faith.
For and on behalf of the Board of DirectorsJaydev Mody Chairman
Place: Mumbai DIN: 00234797
Date: 12th July, 2022
Mar 31, 2019
To the Shareholders
The Directors have pleasure in presenting the Twenty-Eighth (28th) Directorsâ Report of your Company along with the financial statements for the Financial Year ended 31st March, 2019.
1. FINANCIAL SUMMARY AND HIGHLIGHTS
Certain key aspects of your Companyâs performance during the Financial Year ended 31st March, 2019 as compared to the previous Financial Year are summarised below:
(Rs. in Crores)
PARTICULARS |
Standalone |
Consolidated |
||
Year Ended |
Year Ended |
Year Ended |
Year Ended |
|
31.03.2019 |
31.03.2018 |
31.03.2019 |
31.03.2018 |
|
Income for the year |
541.60 |
399.90 |
829.10 |
636.28 |
Profit before Interest, Depreciation and Tax |
276.83 |
180.51 |
350.00 |
275.64 |
Finance Charges |
(0.80) |
(4.63) |
(1.78) |
(10.38) |
Profit before Depreciation and Taxes |
276.03 |
175.88 |
348.22 |
265.26 |
Depreciation & Amortisation |
(16.18) |
(14.64) |
(37.68) |
(37.14) |
Provisions for Taxation/ Deferred Tax |
(76.53) |
(55.67) |
(114.13) |
(73.69) |
Prior Period Items / Exceptional Items |
- |
(1.02) |
4.27 |
1.05 |
Minority Interest & Profit from Associate Company |
- |
- |
0.32 |
0.07 |
Loss from Discountined operations |
- |
- |
(4.24) |
- |
Net Profit for the Current Year |
183.32 |
104.56 |
196.76 |
155.55 |
Earlier Years Balance Brought forward |
342.71 |
249.40 |
354.63 |
213.51 |
Net Profit available for Appropriation |
526.03 |
353.96 |
551.39 |
369.06 |
Appropriation: |
- |
|||
Payment of Dividend on Equity Shares |
(43.35) |
(9.35) |
(43.35) |
(9.34) |
Dividend Distribution Tax |
- |
(1.90) |
(8.91) |
(1.90) |
Transferred to Capital Redemption Reserves |
(81.79) |
- |
(81.79) |
- |
Transfered from Non Controlling Interest |
- |
- |
(9.24) |
(3.19) |
Transferred from Other Comprehensive Income |
1.16 |
- |
1.16 |
- |
Balance carried to Balance Sheet |
402.05 |
342.71 |
409.26 |
354.63 |
The Standalone Gross Revenue (Including GST) from operations for financial year 2018-19 was Rs. 582.26 Crores (Previous Year: Rs. 443.71) registering a growth of 31.23%. The Profit before tax stood at Rs. 259.85 Crores as against Rs. 161.25 Crores in the Previous Year. The Net Profit after tax for the year stood at Rs. 183.32 Crores against Rs. 104.56 Crores reported in the Previous Year.
The Consolidated Gross Revenue (Including GST and Intragroup transactions) from operations for financial year 2018-19 was Rs. 1,010.05 Crores (Previous Year: Rs. 747.82 Crores), registering a growth of 35.06%. The Consolidated Profit before exceptional items and tax stood (for continued operations) at Rs. 310.54 Crores (Previous Year: Rs. 228.12 Crores). The Consolidated Profit after tax stood at Rs. 196.76 Crores (Previous Year: Rs. 155.55 Crores).
2. DIVIDEND
Your Directors recommend for approval of the Members at the ensuing Annual General Meeting, final dividend of Rs. 0.65/- per equity share (i.e. 65%) of face value of Rs. 1/- each, for the Financial Year ended 31st March, 2019 aggregating to approximately Rs. 17.61 Crores. The Dividend Distribution Tax (DDT) payable by the company aggregates to approximately Rs. 3.62 Crores.
During the year the company has also paid an Interim Dividend of Rs. 0.60/- per equity share (i.e. 60%) of face value of Rs. 1/- each aggregating to Rs. 16.26 Crores on which the company was supposed to pay DDT of Rs. 3.34 Crores which has been set off against dividend received from subsidiary company pursuant to Section 115O (1A) of the Income Tax Act, 1961.
The total outflow for current year is based on relevant share capital as on 31st March, 2019. The actual dividend amount will be dependent on the relevant share capital outstanding as on the record date /book closure.
The Board of Directors of your company has approved and adopted the dividend distribution policy of the company and dividends declared / recommended during the year are in accordance with the said Policy.
The dividend distribution policy is placed at Annexure I to the Report and is also available on the weblink http:// www.deltacorp.in/pdf/dividend-Distribution-Policy.pdf
3. SHARE CAPITAL
During the year, the issued, subscribed and paid-up capital of the Company has changed from Rs. 2,03,33,20,976/- (divided into 26,75,90,478 Equity Shares of Rs. 1/- each and 43,747- 0.001% Non-Cumulative Optionally Convertible Preference Shares of Rs. 21,667/each and 37,747- 1% Redeemable Preference Shares of Rs. 21,667/- each) to Rs. 27,09,38,186/- divided into 27,09,38,186 Equity Shares of Rs. 1/- each on account of redemption/conversion of Preference Shares and allotment of Equity Shares on account of ESOS.
4. EXTRACT OF ANNUAL RETURN
The Extract of Annual Return as provided under Section 92(3) of the Companies Act, 2013 (âthe Actâ) and as prescribed in Form No. MGT-9 of the Companies (Management and Administration) Rules, 2014, is appended as Annexure II to this Report and is also available on the Companyâs website www.deltacorp.in.
5. NUMBER OF MEETINGS OF THE BOARD
The Board met Five (5) times in Financial Year 2018-19 viz., on 23rd April, 2018, 23rd July, 2018, 14th September, 2018, 15th October, 2018 and 09th January, 2019. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report.
6. DIRECTORSâ RESPONSIBILITY STATEMENT
Your Directors hereby confirm that:
i. In the preparation of the annual accounts for Financial Year ended 31st March, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii. 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, 2019 and of the profit of the Company for that period.
iii. 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. Have prepared the annual accounts for Financial Year ended 31st March, 2019 on a âgoing concernâ basis.
v. 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. Have devised proper systems to ensure compliance with provisions of all 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 Independence as required under Section 149(7) of the Act and Regulation 25(8) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), confirming that they meet the criteria of independence under Section 149(6) of the Act and Regulation 16 (1)(b) of Listing Regulations as amended from time to time. The Independent Directors have also confirmed that they have complied with the Companyâs Code of Business Conduct & Ethics.
8. POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION
The Policy of the Company on Directorsâ appointment and remuneration including the criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178 of the Act and Regulation 19 of Listing Regulations is appended as Annexure III 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 of Section 186 of the Act, read with the Companies (Meetings of Board and Its Powers) Rules, 2014 are given in the notes to the Financial Statements forming part of this Annual Report.
10. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the Financial Year 2018-19, your Company has entered into transactions with related parties as defined under Section 2(76) of the Act and Rules made thereunder, Regulation 23 of the Listing Regulations. During the Financial Year 2018-19, transactions with related parties which qualifies as material transactions as per Listing Regulations are given in Form AOC -2 as per the Companies (Accounts) Rules, 2014 in Annexure IV to this Report.
The details of related party transactions as required under IND AS-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 Companyâs website at the link: http:// www.deltacorp.in/pdf/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 of the Company which have occurred between the end of the financial year of the Company to which the financial statements relates and the date of the Report.
12. 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 Act read with The Companies (Accounts) Rules, 2014 is appended as Annexure V to this Report.
13. BUSINESS RISK MANAGEMENT
The Board of Directors of the Company has constituted a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. 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 Companyâs 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 Companyâs business.
14. CORPORATE SOCIAL RESPONSIBILITY
The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure VI of this report in the format prescribed in The Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR policy is available on http://www.deltacorp. in/pdf/csr-policy.pdf
15. VIGIL MECHANISM
The Company has adopted Vigil Mechanism and Whistle Blower Policy for Directors and Employees in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the Listing Regulations, to report genuine concerns and to provide for adequate safeguards against victimization of persons who may use such mechanism. During the year no personnel of the Company was denied access to the Audit Committee. The said policy is also available on the Companyâs website www.deltacorp.in
16. ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD
Pursuant to the provisions of the Act and Regulation 19 of the Listing Regulations, the Board has carried out an annual evaluation of the performance of the Board, its Committees and Individual Directors.
The Nomination, Remuneration and Compensation Committee has defined the evaluation criteria for the Board, its Committees and Individual Directors.
The Boardâs functioning was evaluated after taking inputs from the Directors 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.
The Committees of the Board were evaluated after taking inputs from the Committee members on the basis of criteria such as degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The Board and the Nomination, Remuneration and Compensation Committee reviewed the performance of the individual directors 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.
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.
In a separate meeting of independent directors, performance of Non-Independent Directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors.
17. SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES
During the year under review Deltin Nepal Private Limited became subsidiary of the Company. Further, Halaplay Technologies Private Limited and Jalesh Cruises Mauritius Limited became Associate Companies of the Company.
During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Act, 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 Act and Rules made thereunder, is provided in the financial statement and hence not repeated here for the sake of brevity.
In accordance with Section 136 of the Act, 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 Companyâs website www.deltacorp.in. These documents will also be available for inspection during working hours at our Registered Office of the Company.
The Policy for determining material subsidiaries as approved may be accessed on the Companyâs website at the link: http://www.deltacorp.in/pdf/policy-for-determining-material-subsidiaries.pdf
18. DETAILS RELATING TO DEPOSITS, COVERED UNDER CHAPTER V OF THE ACT
The Company has neither accepted nor renewed any deposits during the Financial Year 2018-19 in terms of Chapter V of the Act.
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 WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has in place adequate internal financial control with reference to financial statements.
The Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 and other applicable provisions, if any, of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015.
The Company in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/ validate them as and when appropriate. The basis of such judgments and estimates are also approved by the Statutory Auditors and Audit Committee.
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 Companyâs policies, safeguarding of Companyâs 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 provisions of the Section 152(6)(e) of the Act, Mr. Chetan Desai, Non Executive - Non Independent Director of the Company will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
Pursuant to recommendation of the Nomination, Remuneration and Compensation Committee and subject to approval of members at ensuing Annual General Meeting Mr. Rajesh Jaggi, Mr. Ravinder Kumar Jain and Ms. Alpana Piramal Chinai will be appointed as an Independent Directors on the Board of Directors of the Company in accordance with Section 149(4) of the Act, with effect from 28th July, 2019 to hold office for a 2nd term of 5 (five) consecutive years upto 27th July, 2024.
Further, pursuant to recommendation of the Nomination, Remuneration and Compensation Committee and subject to approval of members at forthcoming Annual General Meeting, Dr. Vrajesh Udani will be appointed as an Independent Director on the Board of Directors of the Company in accordance with Section 149(4) of the Act, with effect from 10th March, 2020 to hold office for a 2nd term of 5 (five) consecutive years upto 9th March, 2025.
22. AUDITORS
1. Statutory Auditor
M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No: 001076N/ N500013), were appointed as Statutory Auditors of the Company at the 25th Annual General Meeting till the conclusion of the 30th Annual General Meeting.
Your Company has received a confirmation from M/s. Walker Chandiok & Co. LLP Chartered Accountants (Firm Registration No: 001076N/ N500013) to the effect that that they are not disqualified within the meaning of Section 141 and other applicable provisions of the Act and rules made thereunder.
There are no qualifications, reservations or adverse remarks or disclaimers made by Statutory Auditor of the Company, in there audit report.
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 have 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, 2019. The Secretarial Audit Report is appended as Annexure VII to this Report.
There are no qualifications, reservations or adverse remarks or disclaimers made by Secretarial Auditor of the Company, in secretarial audit report except as stated below:
Adverse remark by Secretarial Auditor:
During the period under review the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, and Standards etc. except to the observation that the composition of the Audit Committee was not proper as mandated in Regulation 18(1) (b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 which states that the composition of Audit Committee shall constitute two third of the members as Independent Directors till 15th November, 2018. However, the Company has complied by way of reconstitution of the Audit Committee vide circular resolution passed by the Board of Directors dated 15th November, 2018.
Managements Reply:
The Board of Directors on 15th November, 2018 has re-constituted the Audit Committee to comply with the guidance note issued by the stock exchanges. NSE and BSE have later waived the penalties levied by them.
Maintenance of cost records and Cost Audit as specified by the Central Government under 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 the Statutory 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 and Discussion and Analysis Report is provided in a separate section and forms an integral part of this Annual Report.
25. BUSINESS RESPONSIBILITY REPORT
A Business Responsibility Report as per Regulation 34 (2) of the Listing Regulations, detailing the various initiatives taken by the Company on the environmental, social and governance front forms an integral part of this Annual Report.
26. CORPORATE GOVERNANCE
As per Regulation 34(3) read with Schedule V of the Listing Regulations, a separate section on corporate governance practices followed by the Company, together with a certificate from the practicing Company Secretary confirming compliance with the conditions of Corporate Governance forms an integral part of this Annual Report.
27. AUDIT COMMITTEE OF THE COMPANY
The Companyâs Audit Committee was reconstituted during the year. The Audit Committee comprises of the following Directors:
1. Mr. Ravinder Kumar Jain - (Chairman) -Independent Director
2. Mr. Chetan Desai - Non-Executive -Non Independent Director
3. Mr. Rajesh Jaggi - Independent Director
4. Dr. Vrajesh Udani - Independent Director
The composition of the Audit Committee is in compliance with the requirements of Section 177 of the Act, Regulation 18 of the Listing Regulations as amended from time to time and guidance note issued by Stock Exchanges.
28. PARTICULARS OF EMPLOYEES
A statement comprising the names of top 10 employees in terms of remuneration drawn and every persons employed throughout the year, who were in receipt of remuneration in terms of 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 Company in line with the provisions of Section 136 of the Act. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company.
The disclosures in terms of the provisions of 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 VIII to this Report.
29. EMPLOYEES STOCK OPTION SCHEME
As required in terms of regulation 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 IX to this Report.
The Board of Directors of the Company on recommendation of Nomination, Remuneration and Compensation Committee has approved the Stock Appreciation Scheme, subject to approval of the shareholders at ensuing Annual General Meeting. The details of which are Specified in the Explanatory Statement in the Notice forming part of this Annual report.
30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.
The Company has complied with the provisions relating to constitution of Internal Complaints Committee and has Anti-Sexual Harassment policy pursuant to the provisions of The Sexual Harassment of Woman at Workplace (Prevention, Prohibition & Redressal) Act 2013. The Company did not receive any such complaints during the financial year 2018-19.
31. COMPLIANCE OF THE SECRETARIAL STANDARDS
During the financial year, the Company has complied with the applicable Secretarial Standards i.e SS-1 and SS-2 as issued by the Institute of the Company Secretaries of India.
32. ACKNOWLEDGEMENTS
Your Directors express their sincere appreciation for 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
DIN:00234797
Place: Mumbai
Date: 15th June 2019
Mar 31, 2018
To the Members,
The Directors have pleasure in presenting the Twenty Seventh (27th) Directorsâ Report of your Company along with the financial statements for the Financial Year ended 31st March, 2018.
1. OPERATING RESULTS
Certain key aspects of your Companyâs performance during the Financial Year ended 31st March, 2018 as compared to the previous Financial Year are summarised below:
(Rs. in Lakhs)
Standalone |
Consolidated |
|||
Particulars |
Year Ended 31.03.2018 |
Year Ended 31.03.2017 |
Year Ended 31.03.2018 |
Year Ended 31.03.2017 |
Income for the year |
39,989.92 |
28,278.61 |
63,627.98 |
45,960.14 |
Profit before Interest, Depreciation and Tax |
18,050.79 |
10,199.19 |
27,563.64 |
16,890.89 |
Finance Charges |
(462.60) |
(1,355.11) |
(1,037.63) |
(3,497.42) |
Profit before Depreciation and Taxes |
17,588.19 |
8,844.07 |
26,526.01 |
13,393.47 |
Depreciation & Amortisation |
(1,463.50) |
(1,205.31) |
(3,713.55) |
(3,611.76) |
Provisions for Taxation |
(5,567.09) |
(2,378.63) |
(7,368.90) |
(2,803.46) |
Exceptional Items |
(101.73 ) |
2.10 |
104.76 |
419.93 |
Minority Interest and Share of Profit from Associate and Joint Venture Company |
- |
- |
6.58 |
(23.29) |
Net Profit for the current year |
10,455.87 |
5,262.23 |
15,554.90 |
7,374.89 |
Earlier years balance brought forward |
24,939.64 |
20,233.81 |
21,351.42 |
14,531.30 |
Net Profit available for Appropriation |
35,395.51 |
25,496.04 |
36,906.32 |
21,906.19 |
Appropriation: |
||||
Dividend on Equity Shares |
(934.88) |
(462.29) |
(934.88) |
(462.29) |
Dividend Distribution Tax (Net) |
(190.32) |
(94.11) |
(190.32) |
(94.11) |
Amount Transferred to Non-Controlling Interest & Other Adjustment |
- |
- |
(318.95) |
1.63 |
Balance at the year end |
34,270.30 |
24,939.64 |
35,462.17 |
21,351.42 |
2. DIVIDEND
Your Directors recommend for approval of the Members at the ensuing Annual General Meeting, dividend of Rs.1/- per Equity Share (i.e. 100%) of face value of Rs.1/- each, for the Financial Year ended 31st March, 2018 aggregating to approx Rs.2,675.90 Lakhs, including Rs.550.04 Lakhs dividend distribution tax as compared to previous yearâs dividend of Rs.0.35/- per Equity Share (i.e. 35%) of face value of Rs.1/each.
The total outflow for current year is based on relevant share capital as on 31st March, 2018. The actual dividend amount will be dependent on the relevant share capital outstanding as on the record date /book closure.
The dividend will be paid in compliance with the applicable Rules and Regulations.
3. SHARE CAPITAL
During the year, the issued, subscribed and paid-up capital of the Company has increased from Rs.23,16,24,104 to Rs.2,03,33,20,976/- divided into 26,75,90,478 Equity Shares of Rs.1/- each, 43,747 0.001% Non-Cumulative Optionally Convertible Preference Shares of Rs.21,667/- each and 37,747 1% Redeemable Preference Shares of Rs.21,667/each.
4. OVERVIEW OF OPERATIONS
During the year under review, on a consolidated basis, your Company recorded a total income of Rs.63,627.98 Lakhs as compared to last yearâs income of Rs.45,960.14 Lakhs and net profit of Rs.15,554.90 Lakhs as compared to last yearâs Net profit of Rs.7,374.89 Lakhs. 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 (âthe Actâ) and as prescribed in Form No. MGT-9 of the Companies (Management and Administration) Rules, 2014, is appended as Annexure I to this Report.
6. NUMBER OF MEETINGS OF THE BOARD
The Board met Four (4) times in Financial Year 2017-18 viz., on 30th May, 2017, 24th July, 2017, 16th October, 2017 and 15th January, 2018. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report.
7. DIRECTORSâ RESPONSIBILITY STATEMENT
Your Directors hereby confirm that:
i. In the preparation of the annual accounts for Financial Year ended 31st March, 2018, 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, 2018 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, 2018 on a âgoing concernâ 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 Act, confirming that they meet the criteria of independence under Section 149(6) of the Act and Regulation 16(1 )(b) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations).
9. POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION
The Policy of the Company on Directorsâ 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 Act and Regulation 19 of Listing Regulations is appended as Annexure II to this Report.
10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT
The details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act, read with Companies (Meetings of Board and Its Powers) Rules, 2014 are given in the notes to the Financial Statements forming part of this Annual Report.
11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the Financial Year 2017-18, your Company has entered into transactions with related parties as defined under section 2(76) of the Act and Rules made thereunder, Regulation 23 of the Listing Regulations. During the Financial Year 2017-18, transactions with related parties which qualify as material transactions as per Listing Regulations are given in Form AOC - 2 as per the Companies (Accounts) Rules, 2014 in Annexure III to this Report.
The details of related party transactions as required under Ind AS-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 Companyâs 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 Act read with the Companies (Accounts) Rules, 2014 is appended as Annexure IV to this Report.
14. BUSINESS RISK MANAGEMENT
The Board of Directors of the Company has constituted a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. 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 Companyâs 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 Companyâs business.
15. CORPORATE SOCIAL RESPONSIBILITY
The Board has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Act. Your Companyâs CSR initiatives or activities undertaken during the Financial Year ended 31st March, 2018 forms part of Annual Report on the CSR activities, in accordance with Section 135 of the Act and Companies (Corporate Social Responsibility Policy) Rules, 2014 which is appended as Annexure V to this Report.
16. VIGIL MECHANISM
The Company has adopted Vigil Mechanism and Whistle Blower Policy for Directors and Employees in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the Listing Regulations, to report genuine concerns and to provide for adequate safeguards against victimization of persons who may use such mechanism. During the year no personnel of the Company was denied access to the Audit Committee. The said policy is also available on the Companyâs website www.deltacorp.in
17. ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD
Pursuant to the provisions of the Act and Regulation 19 of the Listing Regulations, 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 Boardâs functioning was evaluated after taking inputs from the Directors 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.
The Committees of the Board were evaluated after taking inputs from the Committee members on the basis of criteria such as degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The Board and the Nomination, Remuneration and Compensation Committee reviewed the performance of the individual directors 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.
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.
In a separate meeting of independent directors, performance of Non-Independent Directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors.
18. SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES
During the year under review Caravella Entertainment Private Limited (formerly known as Caravela Casino Goa Private Limited), Gaussian Networks Private Limited, Gaussian Online Skill Gaming Private Limited, Gaussian Software Private Limited and Mind Sports League Private Limited became subsidiaries of the Company. Further, during the year Freedom Charter Services Private Limited cease to be a joint venture and Delta PAN Africa Limited and Delta Corp East Africa Limited ceased to be subsidiaries of the Company on account of liquidation.
During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Act, 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 Act and Rules made thereunder, is provided in the financial statement and hence not repeated here for the sake of brevity.
In accordance with Section 136 of the Act, 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 Companyâs 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 does not have material Indian subsidiary as defined under Regulation 16(1 )(c) of the Listing Regulations.
The Policy for determining material subsidiaries as approved may be accessed on the Companyâs 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 ACT
The Company has neither accepted nor renewed any deposits during the Financial Year 2017-18 in terms of Chapter V of the Act.
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 WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has in place adequate internal financial control with reference to financial statements.
The Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 and other applicable provisions, if any, of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015.
The Company in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/ validate them as and when appropriate. The basis of such judgments and estimates are also approved by the Statutory Auditors and Audit Committee.
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 Companyâs policies, safeguarding of Companyâs 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 Act, Mr. Rakesh Jhunjhunwala (DIN: 00777064), 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 on recommendation of the Nomination, Remuneration and Compensation Committee has re-appointed Mr. Ashish Kapadia (DIN: 02011632) as Managing Director of the Company for a period of 5 (five) years with effect from 27th April, 2019, subject to approval of Members at ensuing Annual General Meeting, as his current term of office is upto 26th April, 2019.
23. AUDITORS
1. Statutory Auditor
M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No: 001076N/N500013), were appointed as Statutory Auditors of the Company at the 25th Annual General Meeting till the conclusion of the 30th Annual General Meeting.
Your Company has received a confirmation from M/s. Walker Chandiok & Co. LLP Chartered Accountants (Firm Registration No: 001076N/N500013) to the effect that that they are not disqualified within the meaning of Section 141 and other applicable provisions of the Act and rules made thereunder.
There are no qualifications, reservations or adverse remarks or disclaimers made by Statutory Auditor of the Company, in his audit report.
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 have 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, 2018. The Secretarial Audit Report is appended as Annexure VI to this Report.
There are no qualifications, reservations or adverse remarks or disclaimers made by Secretarial Auditor of the Company, in his secretarial audit report except as stated below:
Adverse remark by Secretarial Auditor:
During the period under review the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, standards etc., except non compliance of the Regulation 18 of the SEBI (LODR) Regulations, 2015 in respect of the gap between the two audit committee meetings is exceeding 120 days.
Managements Reply:
During the period under review the Company was contemplating a Qualified Institutional Buyerâs placement which resulted in delay in finalization of Audited Results and accordingly the gap of more than one hundred and twenty (120) days was unintentional.
No fraud has been reported by the Statutory Auditors and Secretarial Auditors to the Audit Committee or the Board.
24. CORPORATE GOVERNANCE
Pursuant to Listing Regulations, 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. BUSINESS RESPONSIBILITY REPORT
A Business Responsibility Report as per Regulation 34 of the Listing Regulations, detailing the various initiatives taken by the Company on the environmental, social and governance front forms an integral part of this Annual Report.
26. AUDIT COMMITTEE OF THE COMPANY
The Companyâs Audit Committee was reconstituted during the year. The Audit Committee comprises of the following Directors:
1. Mr. Ravinder Kumar Jain (Chairman);
2. Mr. Ashish Kapadia;
3. Mr. Chetan Desai
4. Mr. Rajesh Jaggi; and
5. Dr. Vrajesh Udani
The composition of the Audit Committee is in compliance with the requirements of Section 177 of the Act and Regulation 18 of the Listing Regulations.
27. 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 VII to this Report.
28. EMPLOYEES STOCK OPTION SCHEME
As required in terms of regulation 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 Report.
29. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.
The Company has Anti-Sexual Harassment policy pursuant to the provisions of The Sexual Harassment of Woman at Workplace (Prevention, Prohibition & Redressal) Act 2013. The Company did not receive any such complaints during the calendar year 2017.
30. COMPLIANCE OF THE SECRETARIAL STANDARDS
During the financial year, the Company has complied with the applicable Secretarial Standards i.e SS-1 and SS-2 as issued by the Institute of the Company Secretaries of India.
31. ACKNOWLEDGEMENTS
Your Directors express their sincere appreciation for 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
DIN: 00234797
Place: Mumbai
Date: 23rd July, 2018
Mar 31, 2018
To the Members,
The Directors have pleasure in presenting the Twenty Seventh (27th) Directorsâ Report of your Company along with the financial statements for the Financial Year ended 31st March, 2018.
1. OPERATING RESULTS
Certain key aspects of your Companyâs performance during the Financial Year ended 31st March, 2018 as compared to the previous Financial Year are summarised below:
(Rs. in Lakhs)
Standalone |
Consolidated |
|||
Particulars |
Year Ended 31.03.2018 |
Year Ended 31.03.2017 |
Year Ended 31.03.2018 |
Year Ended 31.03.2017 |
Income for the year |
39,989.92 |
28,278.61 |
63,627.98 |
45,960.14 |
Profit before Interest, Depreciation and Tax |
18,050.79 |
10,199.19 |
27,563.64 |
16,890.89 |
Finance Charges |
(462.60) |
(1,355.11) |
(1,037.63) |
(3,497.42) |
Profit before Depreciation and Taxes |
17,588.19 |
8,844.07 |
26,526.01 |
13,393.47 |
Depreciation & Amortisation |
(1,463.50) |
(1,205.31) |
(3,713.55) |
(3,611.76) |
Provisions for Taxation |
(5,567.09) |
(2,378.63) |
(7,368.90) |
(2,803.46) |
Exceptional Items |
(101.73 ) |
2.10 |
104.76 |
419.93 |
Minority Interest and Share of Profit from Associate and Joint Venture Company |
- |
- |
6.58 |
(23.29) |
Net Profit for the current year |
10,455.87 |
5,262.23 |
15,554.90 |
7,374.89 |
Earlier years balance brought forward |
24,939.64 |
20,233.81 |
21,351.42 |
14,531.30 |
Net Profit available for Appropriation |
35,395.51 |
25,496.04 |
36,906.32 |
21,906.19 |
Appropriation: |
||||
Dividend on Equity Shares |
(934.88) |
(462.29) |
(934.88) |
(462.29) |
Dividend Distribution Tax (Net) |
(190.32) |
(94.11) |
(190.32) |
(94.11) |
Amount Transferred to Non-Controlling Interest & Other Adjustment |
- |
- |
(318.95) |
1.63 |
Balance at the year end |
34,270.30 |
24,939.64 |
35,462.17 |
21,351.42 |
2. DIVIDEND
Your Directors recommend for approval of the Members at the ensuing Annual General Meeting, dividend of Rs.1/- per Equity Share (i.e. 100%) of face value of Rs.1/- each, for the Financial Year ended 31st March, 2018 aggregating to approx Rs.2,675.90 Lakhs, including Rs.550.04 Lakhs dividend distribution tax as compared to previous yearâs dividend of Rs.0.35/- per Equity Share (i.e. 35%) of face value of Rs.1/each.
The total outflow for current year is based on relevant share capital as on 31st March, 2018. The actual dividend amount will be dependent on the relevant share capital outstanding as on the record date /book closure.
The dividend will be paid in compliance with the applicable Rules and Regulations.
3. SHARE CAPITAL
During the year, the issued, subscribed and paid-up capital of the Company has increased from Rs.23,16,24,104 to Rs.2,03,33,20,976/- divided into 26,75,90,478 Equity Shares of Rs.1/- each, 43,747 0.001% Non-Cumulative Optionally Convertible Preference Shares of Rs.21,667/- each and 37,747 1% Redeemable Preference Shares of Rs.21,667/each.
4. OVERVIEW OF OPERATIONS
During the year under review, on a consolidated basis, your Company recorded a total income of Rs.63,627.98 Lakhs as compared to last yearâs income of Rs.45,960.14 Lakhs and net profit of Rs.15,554.90 Lakhs as compared to last yearâs Net profit of Rs.7,374.89 Lakhs. 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 (âthe Actâ) and as prescribed in Form No. MGT-9 of the Companies (Management and Administration) Rules, 2014, is appended as Annexure I to this Report.
6. NUMBER OF MEETINGS OF THE BOARD
The Board met Four (4) times in Financial Year 2017-18 viz., on 30th May, 2017, 24th July, 2017, 16th October, 2017 and 15th January, 2018. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report.
7. DIRECTORSâ RESPONSIBILITY STATEMENT
Your Directors hereby confirm that:
i. In the preparation of the annual accounts for Financial Year ended 31st March, 2018, 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, 2018 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, 2018 on a âgoing concernâ 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 Act, confirming that they meet the criteria of independence under Section 149(6) of the Act and Regulation 16(1 )(b) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations).
9. POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION
The Policy of the Company on Directorsâ 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 Act and Regulation 19 of Listing Regulations is appended as Annexure II to this Report.
10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT
The details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act, read with Companies (Meetings of Board and Its Powers) Rules, 2014 are given in the notes to the Financial Statements forming part of this Annual Report.
11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the Financial Year 2017-18, your Company has entered into transactions with related parties as defined under section 2(76) of the Act and Rules made thereunder, Regulation 23 of the Listing Regulations. During the Financial Year 2017-18, transactions with related parties which qualify as material transactions as per Listing Regulations are given in Form AOC - 2 as per the Companies (Accounts) Rules, 2014 in Annexure III to this Report.
The details of related party transactions as required under Ind AS-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 Companyâs 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 Act read with the Companies (Accounts) Rules, 2014 is appended as Annexure IV to this Report.
14. BUSINESS RISK MANAGEMENT
The Board of Directors of the Company has constituted a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. 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 Companyâs 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 Companyâs business.
15. CORPORATE SOCIAL RESPONSIBILITY
The Board has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Act. Your Companyâs CSR initiatives or activities undertaken during the Financial Year ended 31st March, 2018 forms part of Annual Report on the CSR activities, in accordance with Section 135 of the Act and Companies (Corporate Social Responsibility Policy) Rules, 2014 which is appended as Annexure V to this Report.
16. VIGIL MECHANISM
The Company has adopted Vigil Mechanism and Whistle Blower Policy for Directors and Employees in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the Listing Regulations, to report genuine concerns and to provide for adequate safeguards against victimization of persons who may use such mechanism. During the year no personnel of the Company was denied access to the Audit Committee. The said policy is also available on the Companyâs website www.deltacorp.in
17. ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD
Pursuant to the provisions of the Act and Regulation 19 of the Listing Regulations, 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 Boardâs functioning was evaluated after taking inputs from the Directors 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.
The Committees of the Board were evaluated after taking inputs from the Committee members on the basis of criteria such as degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The Board and the Nomination, Remuneration and Compensation Committee reviewed the performance of the individual directors 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.
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.
In a separate meeting of independent directors, performance of Non-Independent Directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors.
18. SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES
During the year under review Caravella Entertainment Private Limited (formerly known as Caravela Casino Goa Private Limited), Gaussian Networks Private Limited, Gaussian Online Skill Gaming Private Limited, Gaussian Software Private Limited and Mind Sports League Private Limited became subsidiaries of the Company. Further, during the year Freedom Charter Services Private Limited cease to be a joint venture and Delta PAN Africa Limited and Delta Corp East Africa Limited ceased to be subsidiaries of the Company on account of liquidation.
During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Act, 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 Act and Rules made thereunder, is provided in the financial statement and hence not repeated here for the sake of brevity.
In accordance with Section 136 of the Act, 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 Companyâs 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 does not have material Indian subsidiary as defined under Regulation 16(1 )(c) of the Listing Regulations.
The Policy for determining material subsidiaries as approved may be accessed on the Companyâs 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 ACT
The Company has neither accepted nor renewed any deposits during the Financial Year 2017-18 in terms of Chapter V of the Act.
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 WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has in place adequate internal financial control with reference to financial statements.
The Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 and other applicable provisions, if any, of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015.
The Company in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/ validate them as and when appropriate. The basis of such judgments and estimates are also approved by the Statutory Auditors and Audit Committee.
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 Companyâs policies, safeguarding of Companyâs 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 Act, Mr. Rakesh Jhunjhunwala (DIN: 00777064), 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 on recommendation of the Nomination, Remuneration and Compensation Committee has re-appointed Mr. Ashish Kapadia (DIN: 02011632) as Managing Director of the Company for a period of 5 (five) years with effect from 27th April, 2019, subject to approval of Members at ensuing Annual General Meeting, as his current term of office is upto 26th April, 2019.
23. AUDITORS
1. Statutory Auditor
M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No: 001076N/N500013), were appointed as Statutory Auditors of the Company at the 25th Annual General Meeting till the conclusion of the 30th Annual General Meeting.
Your Company has received a confirmation from M/s. Walker Chandiok & Co. LLP Chartered Accountants (Firm Registration No: 001076N/N500013) to the effect that that they are not disqualified within the meaning of Section 141 and other applicable provisions of the Act and rules made thereunder.
There are no qualifications, reservations or adverse remarks or disclaimers made by Statutory Auditor of the Company, in his audit report.
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 have 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, 2018. The Secretarial Audit Report is appended as Annexure VI to this Report.
There are no qualifications, reservations or adverse remarks or disclaimers made by Secretarial Auditor of the Company, in his secretarial audit report except as stated below:
Adverse remark by Secretarial Auditor:
During the period under review the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, standards etc., except non compliance of the Regulation 18 of the SEBI (LODR) Regulations, 2015 in respect of the gap between the two audit committee meetings is exceeding 120 days.
Managements Reply:
During the period under review the Company was contemplating a Qualified Institutional Buyerâs placement which resulted in delay in finalization of Audited Results and accordingly the gap of more than one hundred and twenty (120) days was unintentional.
No fraud has been reported by the Statutory Auditors and Secretarial Auditors to the Audit Committee or the Board.
24. CORPORATE GOVERNANCE
Pursuant to Listing Regulations, 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. BUSINESS RESPONSIBILITY REPORT
A Business Responsibility Report as per Regulation 34 of the Listing Regulations, detailing the various initiatives taken by the Company on the environmental, social and governance front forms an integral part of this Annual Report.
26. AUDIT COMMITTEE OF THE COMPANY
The Companyâs Audit Committee was reconstituted during the year. The Audit Committee comprises of the following Directors:
1. Mr. Ravinder Kumar Jain (Chairman);
2. Mr. Ashish Kapadia;
3. Mr. Chetan Desai
4. Mr. Rajesh Jaggi; and
5. Dr. Vrajesh Udani
The composition of the Audit Committee is in compliance with the requirements of Section 177 of the Act and Regulation 18 of the Listing Regulations.
27. 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 VII to this Report.
28. EMPLOYEES STOCK OPTION SCHEME
As required in terms of regulation 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 Report.
29. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.
The Company has Anti-Sexual Harassment policy pursuant to the provisions of The Sexual Harassment of Woman at Workplace (Prevention, Prohibition & Redressal) Act 2013. The Company did not receive any such complaints during the calendar year 2017.
30. COMPLIANCE OF THE SECRETARIAL STANDARDS
During the financial year, the Company has complied with the applicable Secretarial Standards i.e SS-1 and SS-2 as issued by the Institute of the Company Secretaries of India.
31. ACKNOWLEDGEMENTS
Your Directors express their sincere appreciation for 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
DIN: 00234797
Place: Mumbai
Date: 23rd July, 2018
Mar 31, 2018
To,
The Members,
The Directors are pleased to present their 50th Annual Report and Audited Accounts for the year ended 31st March, 2018,
FINANCIAL RESULTS
Rs. In Million
STANDALONE |
CONSOLIDATED |
|||
2017-2018 |
2016-2017 |
2017-2018 |
2016-2017 |
|
INCOME |
||||
Revenue From Operations (Net) |
28,842.3 |
26,707.5 |
28,842.3 |
26,707.5 |
Other Income |
1,274.0 |
1,002.1 |
811.8 |
593.5 |
Total |
30,116.3 |
27,709.6 |
29,654.1 |
27,301.0 |
EXPENDITURE |
||||
Material Costs |
21,032.9 |
19,527.7 |
21,032.9 |
19,527.7 |
Employee Benefit Expenses |
1,354.6 |
1,191.9 |
1,354.6 |
1,191.9 |
Finance Costs |
14.4 |
42.9 |
14.4 |
42.9 |
Depreciation, Amortization and impairment |
438.0 |
480.3 |
438.0 |
480.3 |
Other Expenses |
2,231.6 |
2,273.6 |
2,046.8 |
2,028.6 |
Total |
25,071.5 |
23,516.4 |
24,886.7 |
23,271.4 |
Profit before share of Net profit of Investments accounted for using equity method and tax |
4,767.4 |
4,029.6 |
||
Share of Net Profits of an Associate and Joint Ventures accounted for using equity Method |
5,044.8 |
4,193.2 |
724.0 |
1,007.3 |
Profit Before Tax |
5,044.8 |
4,193.2 |
5,491.4 |
5,036.9 |
Tax Expenses: |
||||
Current Tax |
1,316.6 |
1,080.7 |
1,316.6 |
1,080.7 |
Deferred Tax |
146.2 |
(46.3) |
873.7 |
(46.3) |
Total Tax |
1,462.8 |
1,034.4 |
2,190.3 |
1,034.4 |
Profit After Tax |
3,582.0 |
3,158.8 |
3,301.1 |
4,002.5 |
Total Other Comprehensive Income for the year |
134.7 |
37.7 |
131.8 |
24.7 |
Total Comprehensive Income for the year |
3,716.7 |
3,196.5 |
3,432.9 |
4,027.2 |
GLOBAL ECONOMIC SCENARIO
The global economy witnessed an upswing in economic activities and trade led by investment recovery in advanced nations, improvement in emerging Europe, sustained momentum in emerging Asia and signs of recovery among commodity exporting countries. The year saw a broad-based recovery across majority of the countries globally resulting in global economy recording its fastest growth since 2011 at 3.8% in 2017. Growth amongst both the Advanced Economies and Emerging Market and Developing Economies was strong at 2.3% and 4.8% respectively compared to 1.7% and 4.4% respectively achieved in 2016. Going forward, it is expected that the current favorable market sentiment along with accommodative financial conditions and partial recovery in commodity prices will continue to buoy the global economic activity, with growth expected at 3.9% in both 2018 and 2019.
INDIAN ECONOMIC SCENARIO
In the Indian context the economic activity during the FY 201718 witnessed a slowdown mired by short-term challenges in the form of fading impact of demonetisation and trade activity slowdown ahead of Goods and Services Tax (GST) implementation. Resultantly, the GDP grew 6.6% in FY 2017-18 compared to 7.1% in FY 2016-17. However, recent developments in the country in the form of FDI liberalization to attract investments, Insolvency and Bankruptcy Code to assist banks address NPA issues, Real Estate (Regulation and Development) Act to bring in more transparency in the real estate sector strengthen the outlook both in the near and mid term.
GST is one major revolutionary move that will enable the country to overcome the issues of multiple taxation, tax evasion and parallel economy, while bringing in more efficiency in movement of goods and services across the country. Though the initial implementation of GST saw some challenges in the form of delays in refund of input credit tax and challenges to small and medium enterprises to keep up with the regulatory issues, over the long run it is expected to be beneficial. Another important initiative was the Rs. 2.11 lakh crore recapitalisation plan for stressed public sector banks to enable them improve balance sheet health and resume lending, necessary to boost economic activities. The impact of all these is already beginning to reflect with the countryâs ease of doing business ranking improving by 30 spots to 100th position, indirect taxpayer base increasing by 50% to 34 lakh businesses and a credit rating upgrade from Moodyâs Investors Services to Baa2.
The country is also making significant investment in infrastructure to sustain its growing economy. In its Union Budget FY 2018-19, the government has made a total allocation of Rs. 5.97 lakh crore for infrastructure development, which is nearly three fold rise from the levels in 2014. The government has also envisaged plans to build integrated logistics supply chain through developing 50 economic corridors, 35 multimodal logistics parks at 15 locations and ten intermodal stations. Apart from these the government plans to build 100 smart cities, target to reduce carbon emission by adding 175 GW of renewable power generating capacity by 2022, focus on Make in India, and building digital infrastructure to ensure fixed line broadband access to 50% of household by 2022 are all heading the country towards an unmatched development.
With these positive developments in the Indian economy, IMF forecasts the countryâs GDP to grow by 7.4% in FY 2018-19 and then pick up momentum to 7.8% in FY 2019-20.
OPERATIONS
OVERALL: Sales net of duties were Rs 28,151.2 million as against Rs 24,448.4 million in the previous year with a 15% revenue growth. Growth was across all product lines. In volume terms Electrical Cables saw a growth of 5% and Communication Cables grew by 35%.
Total Income for the year under review was higher at Rs. 30,116.3 million (previous year Rs. 27,709.6 million) representing a growth of 9% over the previous year. Your Company has recorded a Net Profit Before Tax of Rs. 5,044.8 million as against Rs. 41 93.2 million in the previous year - a growth of 20.3%.
Highlights of the performance are discussed in detail in the Management Discussion and Analysis Report (MDAR) attached as Annexure A to this Report.
EXPORTS: The market conditions overseas continue to be difficult and hence FOB value of exports for the year was lower than the previous year at Rs 274.9 million (Previous yearâs export value of Rs. 316.1 million).
FINANCE
The short-term debt programs of your Company continue to be rated by CRISIL. Since the last few years, these have been accorded the highest ratings that CRISIL issues (A1 ). CRISIL has also retained the AA /stable rating for the Companyâs long term non-convertible debentures - during the year, however, no debentures were issued. As on date of this report, your Company continues to remain debt free.
Financial costs have been contained to the minimum required levels. The Company continues to meet all its financial commitments in a timely manner.
FIXED DEPOSITS
Your Company has stopped accepting deposits from the year 2003 and accordingly, no fixed deposits have been accepted during the year under review.
DIVIDEND
Your Directors have pleasure in recommending a dividend on equity shares of 200%. The amount thereof per equity share will be Rs.4/-. The total dividend outgo (including dividend tax) will be Rs. 736.3 million.
Payment of Dividend is subject to the approval of the members at the ensuing Annual General Meeting.
NEW PRODUCTS & EXPANSION
As you are aware, your Company ventured into newer product segments such as LED based lamps, low duty switchgear, fans and water heaters over the previous two years. During the year under review, your Company expanded both its market reach as well as the product offerings in each of these new segments. Several new models were launched during the year, covering multiple price and feature points. The volume growth has been encouraging across all new products and at the same time customer feedback to the products in terms of appearance, quality perception and price/performance expectations has been very positive. Simultaneously, your Company has realigned the field sales force into separate verticals (cables, lighting, switch/ mcb, and fans/water heaters) to better address market needs.
Your Company announced its decision to enter the âConduit Pipeâ line of business last year - work on the manufacturing plant has commenced and is expected to be complete by December 2018.
As part of its expansion strategy, your Company is in the process of acquiring approx. 40 acres of land near Vadodara. This site would be used for future expansion needs of the Company.
JOINT VENTURES, SUBSIDIARIES AND ASSOCIATES
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules 2014, the statement containing salient features of the financial statements of the Companyâs Joint Ventures / Associates (in form AOC-1) is attached to this Report as Annexure I.
FINOLEX J-POWER SYSTEMS PRIVATE LIMITED
As part of infrastructural development, the power sector is an extremely important component. Various measures have been announced by the Power Ministry to reform and grow this sector The demand push for EHV cables is witnessed in many states which are eying for faster development and many tenders have been floated by State Utilities in the current financial year
The JV has registered itself with most of the private power companies and participates in tenders floated by them.
While the level of tender participation has improved, the tender conclusion process is still very slow and the JV is awaiting the results in many tenders that it has participated in. At the end of 2017-18, the JV had an order backlog of approximately Rs 400.00 million.
The JVâs 400kV Extra High Voltage Cable has now been certified. Currently, this is the only Indian Company to be certified at this voltage grade. This would be extremely helpful in future tender participation, giving the JV a prime mover advantage.
It is currently estimated that the JV will gradually be profitable to achieve break even and will need financial support in the form of equity infusion until then. While the long term outlook of the JV is positive, in the short term, there has been an erosion of net worth in the JV. Taking a prudent view of the same, an amount of Rs 184.8 million has been recognized as a diminution in the value of investment. During the year, your Company injected equity of Rs 159.2 million, taking the Companyâs participation up to Rs 1337.7 million at the end of FY 2017-18.
CORNING FINOLEX OPTICAL FIBER PRIVATE LIMITED
During the financial year ended on 31st March, 2018, the JV clocked sales of Rs. 2,372.6 million (previous year Rs. 2,015.9 million) and was profitable, with a profit after tax of Rs. 113.1 million.
With consumer demand increasing for mobile data services and e commerce, it is hoped that the fiber penetration in India will improve. Further, Government initiatives such as Bharat Net and Digital India have been adding to the buoyancy to demand. Demand for better quality and feature rich products is on the increase and the JV expects to capitalize on the same. Your Companyâs participation in the JVâs equity at the end of FY 201718 remains at Rs. 17.5 million.
EMPLOYEES
Your Company recognizes the importance of a motivated and skilled human resource. Your Company endeavors to create a challenging and favorable work environment that encourages entrepreneurial behavior, innovation and the drive towards business excellence. Several skilled based training programs were conducted during the year with the help of external consultants, especially for the staff in Sales and Marketing functions. Your Company is also in the process of revamping its hiring and appraisal processes in line with benchmarked practices in industry.
Industrial relations continued to be cordial during the year
The Company had 1828 permanent employees on its rolls as on 31st March, 2018 (previous year 1748 permanent employees as on 31st March, 2017).
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
In terms of provisions of Section 197(12) of Companies Act, 2013 read with Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annexure E to this Report.
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 the Annexure F to this Report.
KEY MANAGERIAL PERSONNEL
The following persons continued as Key Managerial Personnel during the year 2017-18:
Name |
Title |
Mr. D K Chhabria |
Executive Chairman |
Mr. Mahesh Viswanathan |
Deputy Managing Director and Chief Financial Officer |
Mr. R G DâSilva |
Company Secretary & President (Legal) |
CORPORATE GOVERNANCE
Your Company is in full compliance with the Corporate Governance guidelines as set out in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âSEBI LODR Regulationsâ) and is committed to good corporate governance laying a strong emphasis on transparency, accountability and integrity. All Directors and Senior Management employees have confirmed in writing their adherence to the Companyâs Code of Conduct.
A separate report on Corporate Governance (Annexure B) is provided together with a Certificate from the Statutory/ Secretarial Auditors of the Company regarding compliance with conditions of Corporate Governance as Annexure C, as mandated under SEBI LODR Regulations, 2015. There is no qualification, reservation or adverse remark or disclaimer made by the auditor in his report. A Certificate of the Chief Executive Officer and Chief Financial Officer of the Company in terms of Regulation 17(8), Part B Schedule II of SEBI LODR Regulations, inter alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee is also annexed.
CORPORATE SOCIAL RESPONSIBILITY (CSRâ)
During the year, your Company had approved a total expenditure of Rs.56.0 million towards CSR activities for free medical care through multispecialty hospitals, mobile hospital facilities in rural area, support to NGO activities like desilting in rural Maharashtra, promoting education and related activities, help needy children suffering from H1B diabetes, medical facilities to backward class women for their delivery and gynecological problems, knee replacement, cataract and dialysis for needy people, improvement of health care at rural areas, improvement in school infrastructure and provision of sewage treatment facility at places where the Companyâs Plants are located and contribution to National Mission for Clean Ganga âNamami Gangeâ. While the above amount was approved in 2017-18, the actual spend in the year 2017-18 was Rs 46.0 million and the balance amount is to be spent in the year 2018-19.
The annual report on CSR activities of the Company for the year under review is set out in Annexure J forming part of this report.
DIRECTORS
Mr Sumit N Shah (DIN: 00036387), Additional Director ceased at the last Annual General meeting held on 28th September, 2017. Mr S B (Ravi) Pandit (DIN: 00075861) aged about 68 years being an Independent Director, ceased upon resignation due to his other commitments. The Board places on record its deep appreciation of the valuable contribution made by these Directors during their tenure on the Board of Directors of the Company,
Mr D K Chhabria, Executive Chairman will be completing his term of appointment on 30th June 2018. The Board of Directors at its meeting held on 28th May, 2018 has approved his reappointment for a period of five years. The terms and conditions of his reappointment are being put up to the members for approval. Accordingly, suitable resolution which appears in the Notice of ensuing Annual General Meeting has been proposed for consideration.
Similarly, Mr Mahesh Viswanathan, Deputy Managing Director and Chief Financial Officer will be completing his term of appointment on 30th June 2018. The Board of Directors at its meeting held on 28th May, 2018 has approved his reappointment for a period of five years. The terms and conditions of his reappointment are also being put up to the members for approval. Accordingly, suitable resolution which appears in the Notice of ensuing Annual General Meeting has been proposed for consideration.
In accordance with the provisions of the Companies Act, 2013 and the relevant Rules framed thereunder and of the Articles of Association of the Company:
(a) Mrs Namita V Thapar (DIN: 05318899) retires by rotation at the ensuing Annual General Meeting and, though eligible does not wish to offer herself for re-appointment.
(b) Similarly, Mr Mahesh Viswanathan (DIN: 02780987), who retires by rotation at the ensuing Annual General meeting and, being eligible offers himself for reappointment.
The Board recommends the reappointments of Mr D K Chhabria as a whole time Director designated as âExecutive Chairmanâ and of Mr Mahesh Viswanathan as a whole time Director designated as âDeputy Managing Director & Chief Financial Officerâ.
The requisite details regarding the proposals for reappointments of Mr D K Chhabria as Executive Chairman and of Mr Mahesh Viswanathan as Deputy Managing Director & Chief Financial Officer are set out in the Explanatory Statement attached to and forming a part of the Notice of ensuing Annual General Meeting of the Company.
COMPLIANCE UNDER THE COMPANIES ACT, 2013
Pursuant to Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules of 2014, your Company complied with the requirements. The details of such compliances are enumerated below:
1. Extract of annual return: An extract of the Annual Return in Form MGT9 as on March 31, 2018 is enclosed as Annexure D to this Report.
2. Number of meetings of the board: The Board met on 5 occasions during the year. Details of the meetings are furnished in the Report on Corporate Governance which is attached as Annexure B to this Report.
3. Directorsâ responsibility statement: Pursuant to Sections 134(3)(c) and134(5) of the Companies Act, 2013, (the âActâ), the Directors, to the best of their knowledge and belief and according to the information and explanations provided to them, confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed and no material departures have been made from the same;
(b) t he Directors had 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 the end of the financial year and of the profit and loss of the Company for that period;
(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern basis;
(e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
4. Remuneration and nomination policy: The Board of Directors has framed the policy which lays down a framework in relation to Appointment and Remuneration of Directors, Key Managerial Personnel and Senior Executives of the Company including the criteria for determining qualifications, selection and appointment. Further details are provided in the Corporate Governance Report which is attached as Annexure B to this Report.
5. Board evaluation: Pursuant to the relevant provisions of Companies Act, 2013, the independent directors at their meeting dated 28th May 2018, without the participation of the non-independent directors and Management, considered and evaluated the Boardâs performance, performance of the Chairman and other non-independent directors. The evaluation was performed taking into consideration the various aspects of the Boardâs functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance. The Board of Directors expressed its satisfaction with the evaluation process.
6. Particulars of loans, guarantees or investments under section 186 of the companies act, 2013: During the year, an investment of Rs. 159.2 million was made in the equity of the Companyâs Joint Venture - M/s Finolex J-Power Systems Private Limited.
7. Contracts or arrangements with related parties: All transactions entered into by the Company with related parties were in the ordinary course of business and on an armâs length basis. Each of these transactions was reviewed by the Audit Committee prior to being entered into and where necessary, was approved by the Board of Directors and the Members. In respect of transactions of a repetitive nature, an omnibus approval was obtained from the Audit Committee and Members where necessary. At every quarterly meeting, the Audit Committee reviews the transactions that were entered into during the immediately preceding period. Details of related party transactions have been disclosed under Note 32 to the financial statements. Details of the same are also reproduced in Form AOC 2 which is attached as Annexure F to this Report. The Companyâs Policy on transactions with related parties as approved by the Board is also available on the website of the Company at www.finolex.com.
8. Material changes and commitments affecting the financial position of the company which have occurred between 31st march, 2018 and 28th may, 2018 (date of this report): There were no material changes and commitments affecting the financial position of the Company between the end of the financial year (31st March, 2018) and date of this Report (28th May, 2018)
9. Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status of the company: There are no significant and material orders passed by the Regulators or Courts or Tribunals that would impact the going concern status of the Company and the Companyâs operations in the future.
10. Adequacy of internal financial controls with reference to the financial statements: Having regard to Rule 8 (5) (viii) of the Companies (Accounts) Rules, 2014, the details in respect of adequacy of internal financial controls with reference to the financial statements of the Company are as follows:
Your Company maintains appropriate systems of internal control including monitoring procedures. These internal control systems ensure reliable and accurate financial reporting, safeguarding of assets, keeping constant check on cost structure and adhering to management policies. The internal controls are commensurate with the size, scale and complexity of the Companyâs operations and facilitate timely detection of any irregularities and early remedial steps against factors such as loss from unauthorized use and disposition. Company policies, guidelines and procedures provide for adequate checks and balances which are meant to ensure that all transactions are authorized, recorded and reported correctly. The internal controls are continuously assessed and improved / modified to meet changes in business conditions, statutory and accounting requirements
Constant monitoring of the effectiveness of controls is ensured by periodical audits performed by an in-house internal audit team as well as assignments entrusted to M/S Ernst & Young. Both these teams in their respective assignments test and review controls, challenge business processes for their robustness and benchmark practices in line with industry norms.
The Audit Committee regularly meets and reviews the results of the various internal control audits both with the Auditors as well as with the respective Auditees. The Audit Committee is apprised of the findings as well as the corrective actions that are taken. Periodical meetings between the Audit Committee and the Company Management also ensure the necessary checks and balances that may need to be built into the control system.
11. Risk management policy: Your Company has set up a Risk Management Committee of the Board of Directors which comprises Dr H S Vachha, Mr Sanjay K Asher, Mr D K Chhabria and Mr Mahesh Viswanathan. More details of the risks faced by the Company are available in the Management Discussion & Analysis Report which is attached as Annexure A to this Report.
12. Vigil mechanism / whistle blower policy: As required under Section 177 (9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Boards and its Powers) 2014 and Regulation 22 of the SEBI LODR Regulations, the Company has adopted a policy on vigil mechanism / whistle blower. The policy provides direct access to the Chairman of the Audit Committee in case any employee should choose to report or bring up a complaint. Your Company affirms that no one has been denied access to the Chairman of the Audit Committee and also that no complaints were received during the year. Brief details about the policy are provided in the Corporate Governance Report which is attached as Annexure B to this Report. Also, the policy is available at the Companyâs website at www.finolex.com.
13. Prevention of sexual harassment policy: The Company has in place a policy on prevention of sexual harassment in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
During the year under review, one complaint was received about a contract employee, wherein the Internal Complaints Committee of the Company had conducted the inquiry and on acceptance of misconduct by the respondent his services were terminated by the concerned contractor.
14. Business Responsibility Report (BRR): As mandated by Securities and Exchange Board of India (SEBI), Indiaâs top 500 listed entities based on market capitalisation on the BSE and NSE are required to submit a âBusiness Responsibility Reportâ (BRR) along with their Annual Report for 2017-18. This Report is required to be in line with âNational Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Businessâ (NVGs), as released by the Ministry of Corporate Affairs in July 2011. Finolex Cables Ltd. presents its BRR, in line with the NVGs and the BRR requirement of SEBI. The business responsibility report on BRR of the company for the year under review is set out in Annexure K forming part of this report .
AUDITORS
M/s Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No.1 1 7366W / W100018), Auditors of the Company, hold office until conclusion of the Fifty-Fourth Annual General Meeting of the Company to be held in the financial year 2022-23, provided that their appointment shall be subject to ratification at every Annual General meeting if so required under the Act, and being eligible, offer themselves for such ratification of their appointment.
The Audit Committee and the Board of Directors have recommended ratification of the appointment of the Auditors for the financial year 2018-19. Necessary resolution is being placed before the Members for approval.
COST AUDIT
As per the requirement of the Central Government and pursuant to Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) rules of 2014 as amended from time to time, your Company has been carrying out an audit of cost records every year. In respect of the financial year 2017-18, at the previous Annual General Meeting, members had approved of the appointment of M/S Joshi Apte & Associates as Cost Auditor at a remuneration of Rs.5.0 lacs plus GST, as applicable, and reimbursement of out of pocket expenses. Their work will commence shortly and their report would be filed with MCA on or before the due date.
The Cost Audit Report for the financial year 2016-17 was filed prior to its due date in September 2017.
SECRETARIAL AUDIT
In accordance with the provisions of Section 204 of the Companies Act, 2013, and the rules made thereunder, M/S SVD & Associates, a firm of Company Secretaries in practice, was appointed to conduct the Secretarial Audit of the Company. There is no qualification, reservation or adverse remark or disclaimer made by them in their Report, except that the Company has not filed Form IEPF III. FORM IEPF III can be filed only by attaching specific order(s) of the Court or Tribunal or Statutory Authority restraining transfer of subject shares referred to therein. The relevant cases pertain to the years 1996 and prior thereto and the Company is in the process of tracing out the relevant files and Court orders for doing the needful.
Their Report is attached as Annexure H to this Report.
SECRETARIAL STANDARDS
The Institute of Company Secretaries of India had revised the Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2) with effect from 1st October 2017. The Company is in compliance with the revised secretarial standards
LISTING OF SECURITIES
Your Companyâs equity shares are listed on the two premier stock exchanges of the country namely BSE Limited and National Stock Exchange of India Limited. Your Company had issued Global Depository Receipts which are listed on the Luxembourg Stock Exchange. Your Company has not issued any Non-Convertible Debentures (âNCDsâ) in financial year 2017-18 and no NCDs are outstanding as on 31st March, 2018.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is attached to this Report as Annexure I.
PARTICULARS OF EMPLOYEES
Information as required under the provisions of the Companies Act, 2013 (the âActâ) read with Rule 5 sub rules (2 and 3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (the âRulesâ) forms part of this Report. However, as per the provisions of Section 136(1) of the Act, the Report and Accounts are being sent to the members, excluding the statement of particulars of employees under the Rules of the Act. Any shareholder desirous of obtaining a copy of the said statement may write to the Company Secretary & President (Legal) at the Registered office of the Company,
CAUTIONARY STATEMENT
Statements in this Directorsâ Report and Annexures may contain forward looking statements within the meaning of applicable Securities laws and regulations. Actual results could differ materially from those expressed or implied. Various factors including commodity prices, cyclical demand, changes in Government regulations, tax laws, general economic development could all have a bearing on the Companyâs operations and would impact eventual results.
ACKNOWLEDGEMENTS
Your Directors are grateful to the Central and State Governments, Statutory Authorities, Local Bodies, Banks and Financial institutions for their continued support and cooperation. Your Directors warmly acknowledge the trust and confidence reposed in your Company by its channel partners, dealers, customers and construction organizations in supporting its business activities and growth. Your Directors express their gratitude to the other business associates for their unstinting support. Your Directors value the commitment and contribution of the employees towards the Company. Last but not the least, your Directors are thankful to the Members for extending their constant trust and for the confidence shown in the Company.
For and on behalf of the Board of Directors
Place: Pune D.K. Chhabria
Dated: 28th May 2018 Executive Chairman
Mar 31, 2017
Directorsâ Report
To
The Members
The Directors are pleased to present their 49thAnnual Report and Audited Accounts for the year ended 31st March, 2017.
FINANCIAL RESULTS:
(Rs. In Millions)
Standalone |
Consolidated |
|||
2016-17 |
2015-16 |
2016-17 |
2015-16 |
|
INCOME |
||||
Revenue From Operations (Net) |
26,707.5 |
25,747.3 |
26,707.5 |
25,747.3 |
Other Income |
1,002.1 |
644.4 |
593.5 |
561.3 |
Total |
27,709.6 |
26,391.7 |
27,301.0 |
26,308.6 |
EXPENDITURE |
||||
Material Costs |
19,527.7 |
19,353.9 |
19,527.7 |
19,353.9 |
Employee Benefit Expense |
1,191.9 |
1,072.2 |
1,191.9 |
1,072.2 |
Finance Costs |
42.9 |
89.5 |
42.9 |
89.5 |
Depreciation, Amortization and Impairment |
480.3 |
579.9 |
480.3 |
579.9 |
Other Expenses |
2,273.6 |
1,932.3 |
2,028.6 |
1,737.8 |
Total |
23,516.4 |
23,027.8 |
23,271.4 |
22,833.3 |
Profit Before Exceptional and Extraordinary Items & Tax |
4,193.2 |
3,363.9 |
4,029.6 |
3,475.3 |
Tax Expense: |
||||
Current Tax |
1,159.1 |
1,033.6 |
1,159.1 |
1,033.6 |
Deferred Tax |
(40.6) |
(70.6) |
(40.6) |
(70.6) |
Taxes of earlier year |
(84.1) |
(87.7) |
(84.1) |
(87.7) |
Profit Before Exceptional and Extraordinary Items |
3,158.8 |
2,488.6 |
2,995.2 |
2,600.0 |
Share of Profit / (Loss) of Associate |
1,007.3 |
686.9 |
||
Profit After Tax |
3,158.8 |
2,488.6 |
4,002.5 |
3,286.9 |
Other comprehensive Income net of tax (Loss) / Gain |
37.7 |
(75.8) |
24.7 |
(84.0) |
Total comprehensive Income for the period |
3,196.5 |
2,412.8 |
4,027.2 |
3,202.9 |
The above results are based on the Company''s adoption of Accounting Standards as reflected in IND AS. Previous year''s data has been restated to be in compliance with the new Accounting Standards.
BACKGROUND
Global growth, according to various estimates, has been a moderate 3.5% during the last year. Our local economy registered a growth of 7.1% during the last financial year - while agriculture, public utilities and administration showed real growth, the 2nd half performance by manufacturing, services and construction sectors recorded a much slower growth, reflecting the impact of demonetization on much of the informal sectors. In your Company''s case, while revenue growth from a value perspective has been muted on account of the soft commodity prices during the year, volume expansion has been very visible. The continued reiteration that the Government would focus on infrastructure building via support to the previously announced programs such as the various Industrial Corridors, Railways Investments, Smart City Initiatives, Digital Connectivity and Make in India, Power generation thru non-conventional energy sources, etc., augur well for your Company''s chosen areas.
OPERATIONS
OVERALL: As mentioned above, revenue growth was muted (at 4%) in view of the âsoftâ commodity prices that prevailed for the first 3 quarters, with copper prices recovering only during the 4th quarter. Volume growth was, however, robust during the year. Volumes were higher in all product lines - as compared to the previous year, Electrical Wires grew by 8%, Flexible Wires by 22%, and all Communication Cables by over 22%.
Income for the year under review was higher at Rs. 27,709.6 million (previous year Rs. 26,391.7 million) representing a growth of 5% over the previous year. Your Company has recorded a Net Profit Before Tax of Rs. 4,193.2 million as against Rs. 3,363.9 million in the previous year a growth of 24.7%.
Highlights of the performance are discussed in detail in the Management Discussion and Analysis Report (MDAR) attached as Annexure A to this Report.
EXPORTS: The market conditions overseas continue to be difficult and hence FOB value of exports for the year was lower than the previous year at Rs 316.1 million (Previous year''s export value of Rs. 416.5 million).
FINANCE
The short term debt programs of your Company continue to be rated by CRISIL. Since the last few years, these have been accorded the highest ratings that CRISIL issues (A1 ). Your Company retained the AA /stable rating for its long term non-convertible debentures program.
During the year, your Company repaid its outstanding loans ahead of due date. Post this repayment your Company is debt free.
Financial costs have been contained to the minimum required levels. The Company continues to meet all its financial commitments in a timely manner.
FIXED DEPOSITS
Your Company has stopped accepting deposits from the year 2003 and accordingly, no fixed deposits have been accepted during the year under review.
DIVIDEND
Your Directors have pleasure in recommending a dividend on equity shares of 150%. The amount thereof per equity share will be Rs.3/-. The total dividend outgo (including dividend tax) will be Rs 552.2 million.
Payment of Dividend is subject to the approval of the members at the ensuing Annual General Meeting.
EXPANSION & NEW PRODUCTS
Your Company launched its low duty switchgears in the market in December 2016. The product has been perceived well in the market. Several variants of the same have since been released to the market.
Fan segment - members will be pleased to know that a completely new range of fans, specially designed for your Company, had been introduced in the market in May 2016. While the current introduction targets all price segments, it is the intention of your Company to constantly innovate and bring new and meaningful designs to the market from time to time.
The third product launch during the year was Water Heaters. A soft launch was made in January 2017 with the ââinstantâ variety - it is the intention of your Company to introduce more products across the family in the near future.
These new products are expected to open up a new growth area for your Company as well as take it on the path of being an Electrical Products and Solutions Company eventually.
JOINT VENTURES, SUBSIDIARIES AND ASSOCIATES
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules 2014, the statement containing salient features of the financial statements of the Company''s Joint Ventures / Associates (in form AOC-1) is attached to this Report as Annexure I.
Finolex J-Power Systems Private Limited
The Central government and many state governments are giving thrust to Infrastructure sector. The Power Ministry has announced restructuring of state utilities and also make India power surplus by the year 2020. Metro projects have been commenced in many cities and Smart city projects for 100 cities had been announced which would result in substantial increase in demand for evacuation, transmission of electricity and hence demand for Extra High Voltage Cables in cities and emerging cities.
The demand push for EHV cables is witnessed in many states which are eying for faster development and many tenders have been floated by State Utilities in the current financial year.
The previous year had been very positive for the JV in terms of market penetration, reach and visibility in relationship building with customer base and the same is reflected in terms of company''s ability to participate in tender in almost 17 states and number of firm enquiries received showed multifold growth. The challenge remains for participation in large tenders which require the bidders to have substantial quantum of supply, laying and commissioning experience as well as high turnover and profits. The JV had identified various eligible EPC Contractors and erectors and is working out various models to enter into partnerships with such eligible EPC Contractors and Erectors for necessary participation in tender and win some business.
The JV has also registered itself with most of the private power companies and participates in tenders floated by them.
The JV is continuously working with the Central and State Government for creating level playing field and for promoting technically superior products for such an important sector which historically suffer from line losses and frequent breakdowns because of poor products and poor installations. The governments see the merits and accordingly are facilitating company participations in tenders.
While the level of tender participation has improved, the tender conclusion process is still very slow and the JV is awaiting the results in most tenders that it has participated in.
The JV''s 400kV Extra High Voltage Cable PQ tests in international laboratory is at an advanced stage. When completed and certified (expected by Dec 2017) this would give a big thrust to the Company''s participation in 220kV and higher voltage grade tenders which have better margins, value and volumes.
It is currently estimated that the JV will still take between 18 and 24 months to achieve break even and will need financial support in the form of equity infusion until then. While the long term outlook of the JV is positive, in the short term, there has been an erosion of net worth in the JV. Taking a prudent view of the same, an amount of Rs 245.0 million has been recognized as a diminution in the value of investment. During the year, your Company injected equity of Rs 196.0 million, taking the Company''s participation up to Rs 1,178.5 million at the end of FY 2016-17.
Corning Finolex Optical Fiber Private Limited
During the financial year ended on March 31, 2017, the JV clocked sales of Rs 2,015.96 million (previous year Rs 1,772.36 million) and is now at break-even levels.
With consumer demand increasing for mobile data services and e commerce, it is hoped that the fiber penetration in India will improve. Further, Government initiatives such as Bharat Net and Digital India are expected to add buoyancy to demand. Demand for better quality and feature rich products is on the increase and the JV expects to capitalize on the same. Your Company''s participation in the JV''s equity at the end of FY 2016-17 remains at Rs17.5 million.
EMPLOYEES
Your Company recognizes the importance of a motivated and skilled human resource. Your Company endeavors to create a challenging and favorable work environment that encourages entrepreneurial behavior, innovation and the drive towards business excellence. Several skilled based training programs were conducted during the year with the help of external consultants, especially for the staff in Sales and Marketing functions. Your Company is also in the process of revamping its hiring and appraisal processes in line with benchmarked practices in industry.
Industrial relations continued to be cordial during the year.
The Company had 1,748 permanent employees on its rolls as on 31st March, 2017 (previous year 1,694 permanent employees as on 31st March, 2016).
Particulars of employees and related disclosures:
In terms of provisions of Section 197(12) of Companies Act, 2013 read with Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annexure E to this Report.
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 the Annexure F to this Report.
KEY MANAGERIAL PERSONNEL
The following persons continued as Key Managerial Personnel during the year 2016-17:
Name Title
Mr. D K Chhabria Executive Chairman
Mr. Mahesh Viswanathan Executive Director & CFO
Mr. R G D''Silva Company Secretary & President (Legal)
CORPORATE GOVERNANCE
Your Company is in full compliance with the Corporate Governance guidelines as set out in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is committed to good corporate governance laying a strong emphasis on transparency, accountability and integrity. All Directors and Senior Management employees have confirmed in writing their adherence to the Company''s Code of Conduct.
A separate report on Corporate Governance (Annexure B) is provided together with a Certificate from the Statutory Auditors of the Company regarding compliance with conditions of Corporate Governance as Annexure C, as mandated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There is no qualification, reservation or adverse remark or disclaimer made by the auditor in his report. A Certificate of the Chief Executive Officer and Chief Financial Officer of the Company in terms of Regulation 17(8), Part B Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, inter alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee is also annexed.
CORPORATE SOCIAL RESPONSIBILITY (âCSRâ)
During the year, your Company had approved an expenditure of Rs 39.0 million towards construction of a building / hall for a self- help group to promote self-employed women, multipurpose training hall to be used by the police department, improvement of health care at rural areas, improvement in school infrastructure at places where the Company is located and provision of sewage treatment facility. While this amount was approved in 2016-17, the actual spend in the year 2016-17 was Rs.15.8 million and the balance amount is to be spent in the year 2017-18.
The annual report on CSR activities of the Company for the year under review is set out in Annexure J forming part of this report.
DIRECTORS
In accordance with the provisions of the Companies Act, 2013 and the relevant Rules framed there under and of the Articles of Association of the Company, Mr. Mahesh Viswanathan (DIN: 02780987) retires by rotation at the ensuing Annual General Meeting and, being eligible offers himself for re-appointment. The Board recommends his re-appointment. The requisite details regarding his re-appointment are set out in the Notice for the ensuing Annual General Meeting.
At its meetings held on 14th February, 2017 and 30th May, 2017 the Board appointed Mr. Sumit N Shah (DIN: 00036387) and Mr. Shishir Lall (DIN: 00078316), respectively as Additional Directors on the Board. Each of these individuals hold office as such till conclusion of the ensuing Annual General Meeting of the Company. Further, at its meeting held on 30th May, 2017, the Board has, pursuant to the recommendation of the Nomination and Remuneration Committee, recommended to the Members of the Company that Mr. Sumit N Shah and Mr. Shishir Lall, Additional Directors be appointed as Independent Directors on the Board for a period of five years commencing from the date of their appointment as such by the Members at the ensuing Annual General Meeting of the Company.
Mr. Atul C Choksey (DIN: 00002102) aged about 65 years and Mr. Adi J Engineer (DIN: 00016320) aged about 79 years, both being Independent Directors, ceased due to resignation due to their other commitments and age. The Board places on record its deep appreciation of the valuable contribution made by each of these Directors during their respective tenures on the Board of Directors of the Company.
COMPLIANCE UNDER THE COMPANIES ACT, 2013
Pursuant to Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules of 2014, your Company complied with the requirements. The details of such compliances are enumerated below:
1. Extract of Annual Return: An extract of the Annual Return in Form MGT9 as on March 31, 2017 is enclosed as Annexure D to this Report.
2. Number of meetings of the Board: The Board met on 4 occasions during the year. Details of the meetings are furnished in the Report on Corporate Governance which is attached as Annexure B to this Report.
3. Directorsâ Responsibility Statement: Pursuant to Sections 134(3)(c) and 134(5) of the Companies Act, 2013, (the âActâ), the Directors, to the best of their knowledge and belief and according to the information and explanations provided to them, confirm that:
(a) In the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;
(b) The Directors had 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 the end of the financial year and of the profit and loss of the Company for that period;
(c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) The Directors had prepared the annual accounts on a going concern basis;
(e) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
4. Remuneration and Nomination Policy: The Board of Directors has framed the policy which lays down a framework in relation to Appointment and Remuneration of Directors, Key Managerial Personnel and Senior Executives of the Company including the criteria for determining qualifications, selection and appointment. Further details are provided in the Corporate Governance Report which is attached as Annexure B to this Report.
5. Board Evaluation: Pursuant to the provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement, independent directors at their meeting dated 30th May 2017, without the participation of the non-independent directors and Management, considered and evaluated the Board''s performance, performance of the Chairman and other non-independent directors. The evaluation was performed taking into consideration the various aspects of the Board''s functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance. The Board of Directors expressed its satisfaction with the evaluation process.
6. Particulars Of Loans, Guarantees Or Investments Under Section 186 Of The Companies Act, 2013: During the year, an investment of Rs.196.0 million was made in the equity of the Company''s Joint Venture - M/s Finolex J-Power Systems Private Limited.
7. Contracts Or Arrangements With Related Parties: All transactions entered into by the Company with related parties were in the ordinary course of business and on an arm''s length basis. Each of these transactions were reviewed by the Audit Committee prior to being entered into and where necessary, was approved by the Board of Directors and members. In respect of transactions of a repetitive nature, an omnibus approval was obtained from the Audit Committee and Members where necessary. At every quarterly meeting, the Audit Committee reviews the transactions that were entered into during the immediately preceding period. Details of related party transactions have been disclosed under Note 34 to the financial statements. Details of the same are also reproduced in Form AOC 2 which is attached as Annexure F to this Report. The Company''s Policy on transactions with related parties as approved by the Board is also available on the website of the Company at www.finolex.com.
8. Material Changes And Commitments Affecting The Financial Position Of The Company Which Have Occurred Between March 31, 2017 And May 30, 2017 (Date Of This Report): There were no material changes and commitments affecting the financial position of the Company between the end of the financial year (March 31, 2017) and date of this Report (May 30, 2017).
9. Significant And Material Orders Passed By The Regulators Or Courts Or Tribunals Impacting The Going Concern Status Of The Company: There are no significant and material orders passed by the Regulators or Courts or Tribunals that would impact the going concern status of the Company and the Company''s operations in the future.
10. Adequacy Of Internal Financial Controls With Reference To The Financial Statements: Having Regard To Rule 8 (5) (Viii) Of The Companies (Accounts) Rules, 2014, The Details In Respect Of Adequacy Of Internal Financial Controls With Reference To The Financial Statements Of The Company Are As Follows :
Your Company maintains appropriate systems of internal control including monitoring procedures. These internal control systems ensure reliable and accurate financial reporting, safeguarding of assets, keeping constant check on cost structure and adhering to management policies. The internal controls are commensurate with the size, scale and complexity of our operations and facilitate timely detection of any irregularities and early remedial steps against factors such as loss from unauthorized use and disposition. Company policies, guidelines and procedures provide for adequate checks and balances which are meant to ensure that all transactions are authorized, recorded and reported correctly. The internal controls are continuously assessed and improved / modified to meet changes in business conditions, statutory and accounting requirements
Constant monitoring of the effectiveness of controls is ensured by periodical audits performed by an in-house internal audit team as well as assignments entrusted to M/S Ernst & Young. Both these teams in their respective assignments test and review controls, challenge business processes for their robustness and benchmark practices in line with industry norms.
At the entity level, it has been decided that the Company''s internal control mechanism would follow the COSO framework. At individual business levels, the existing controls are being strengthened by the adoption of an electronic tool which will provide for review, monitoring and reporting of the various control mechanism both at a location and functional level prior to being periodically certified by its robustness by the Management.
The Audit Committee regularly meets and reviews the results of the various internal control audits both with the Auditors as well as with the respective Auditees. The Audit Committee is apprised of the findings as well as the corrective actions that are taken. Periodical meetings between the Audit Committee and the Company Management also ensure the necessary checks and balances that may need to be built into the control system.
11. Risk Management Policy: Your Company has set up a Risk Management Committee of the Board of Directors which comprises Dr. H S Vachha, Mr. Sanjay Asher, Mr. D K Chhabria and Mr. Mahesh Viswanathan. More details of the risks faced by the Company are available in the Management Discussion & Analysis Report which, pursuant to Clause 49 (VIII) (D) of the Listing Agreement, is attached as Annexure A to this Report.
12. Vigil Mechanism / Whistle Blower Policy: As required under Section 177 (9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Boards and its Powers) 2014 and Clause 49 of the Listing Agreement, the Company has adopted a policy on vigil mechanism / whistle blower. The policy provides direct access to the Chairman of the Audit Committee in case any employee should choose to report or bring up a complaint. Your Company affirms that no one has been denied access to the Chairman of the Audit Committee and also that no complaints were received during the year. Brief details about the policy are provided in the Corporate Governance Report which is attached as Annexure B to this Report. Also, the policy is available at the Company''s website.
13. Prevention Of Sexual Harassment Policy: The Company has in place a policy on prevention of sexual harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
During the year under review, no complaints were received by the Company relating to sexual harassment.
AUDITORS
M/S B. K. Khare & Company, Chartered Accountants (Firm Registration Number: 105102W), Auditors of your Company, hold office until conclusion of the ensuing Annual General Meeting. Since they have completed 10 years as Statutory Auditors of the Company, the law requires a mandatory change of Auditors. Your Directors recommend the appointment of M/s Deloitte Sells and Haskins to be the next Statutory Auditors - they, as required under the provisions of Section 139 and Section 141 of the Companies Act, 2013 read with the Companies (Accounts) Rules 2014, have confirmed their consent as well as eligibility to act as Auditor of the Company.
The Audit Committee and the Board of Directors have recommended the appointment of the Auditors for the financial year 2017-18. Necessary resolution is being placed before the Members for approval.
COST AUDIT
As per the requirement of the Central Government and pursuant to Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) rules of 2014 as amended from time to time, your Company has been carrying out an audit of cost records every year. In respect of the financial year 2016-17, at the previous AGM, members had approved of the appointment of M/S Joshi Apte & Associates as Cost Auditor at a remuneration of Rs. 5.0 lacs plus GST, as applicable, and reimbursement of out of pocket expenses. Their work will commence shortly and their report would be filed with MCA on or before the due date.
The Cost Audit Report was filed for the financial year 2015-16 was filed prior to its due date in September 2016.
SECRETARIAL AUDIT
In accordance with the provisions of Section 204 of the Companies Act, 2013, and the rules made hereunder, M/S SVD & associates, a firm of Company Secretaries in practice, was appointed to conduct the Secretarial Audit of the Company. There is no qualification, reservation or adverse remark or disclaimer made by them.
Their Report is attached as Annexure H to this Report.
LISTING OF SECURITIES
Your Company''s equity shares are listed on the two premier stock exchanges of the country namely Bombay Stock Exchange Limited and National Stock Exchange of India Limited. Your Company had issued Global Depository Receipts which are listed on the Luxembourg Stock Exchange. Your Company''s non-convertible debentures are listed on wholesale debt market segment of the National Stock Exchange of India Limited.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is attached to this Report as Annexure I.
PARTICULARS OF EMPLOYEES
Information as required under the provisions of the Companies Act, 2013 (the âActâ) read with Rule 5 sub rules (2 and 3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (the âRulesâ) forms part of this Report. However, as per the provisions of Section 136(1) of the Act, the Report and Accounts are being sent to the members, excluding the statement of particulars of employees under the Rules of the Act. Any shareholder desirous of obtaining a copy of the said statement may write to the Company Secretary & President (Legal) at the Registered office of the Company.
CAUTIONARY STATEMENT
Statements in this Directors'' Report and Annexures may contain forward looking statements within the meaning of applicable Securities laws and regulations. Actual results could differ materially from those expressed or implied. Various factors including commodity prices, cyclical demand, changes in Government regulations, tax laws, general economic development could all have a bearing on the Company''s operations and would impact eventual results.
ACKNOWLEDGEMENTS
Your Directors are grateful to the Central and State Governments, Statutory Authorities, Local Bodies, Banks and Financial institutions for their continued support and cooperation. Your Directors warmly acknowledge the trust and confidence reposed in your Company by its channel partners, dealers, customers and construction organizations in supporting its business activities and growth. Your Directors express their gratitude to the other business associates for their unstinting support. Your Directors value the commitment and contribution of the employees towards the Company. Last but not the least, your Directors are thankful to the Members for extending their constant trust and for the confidence shown in the Company.
For and on behalf of the Board of Directors
D.K. Chhabria
Executive Chairman
Pune
Dated: 30th May 2017
Mar 31, 2016
The Directors are pleased to present their 48th Annual Report and
Audited Accounts for the year ended 31st March, 2016.
FINANCIAL RESULTS: (Rs. in million)
Standalone Standalone Consolidated
2016 2015 2016
Income 25,251.8 25,075.6 26,078.2
Profit Before Interest,
Depreciation, Exceptional
Items and Tax 4,025.6 3,175.1 4,164.5
Less : Interest 89.5 129.2 124.7
Less : Depreciation 572.3 639.6 613.9
Profit Before Exceptional
Items and Tax 3,363.9 2,406.2 3,425.9
Exceptional Items(Loss)/Gain - 225.2 -
Profit Before Tax 3,363.9 2,631.5 3,425.9
Less : Provision for Taxation
(a) Current Tax 1,033.7 619.0 1,033.7
(b) Deferred Tax (70.6) 26.2 (70.6)
(c) MAT Credit - - -
(d) Taxes of Earlier Year (87.7) (0.3) (87.8)
Share of profit/ (loss)
of Associate - - 773.9
Profit After Tax 2,488.4 1,986.6 3,324.5
BACKGROUND
In a year that has seen a moderation of global growth from 3.4% to
3.1%, India came off as one of the better performers. The IMF has
repeatedly said in the recent past that India is a "bright spot" amidst
a slowing global economy. That our local economy has been able to
sustain a growth of 7.6% in a year that saw a very poor monsoon
(rainfall deficiency of 13%) is a testimony to the Government''s and
RBI''s focus on containing inflation, reigning in the CAD, managing the
overall budget deficit within the promised 3.9%, of course still
supported by soft commodity prices and a reasonably stable currency.
While the deficiency in monsoon has impacted the growth of rural
economy, and export volumes continued to decline, some green shoots
have been observed and overall economic fundamentals have started to
improve in recent months. In your Company''s case, volume expansion has
been very visible in the second half of the year. The focus that the
Government''s budget of 2016-17 provides on infrastructure spending (a
planned 22.5% hike from earlier levels), as well as progress on the
previously announced programmes such as the various Industrial
Corridors, Railways Investments, Smart City Initiatives, Digital
Connectivity and Make in India, Power generation thru non-conventional
energy sources, etc., augur well for your Company''s chosen areas in the
near and medium terms.
OPERATIONS
OVERALL: Growth remained flat in revenue terms for the year under
review. As members are aware, your Company''s revenue is linked to
commodity prices and the year continued to be "soft" as regards
commodity prices. Copper prices were down by about 20% at the end of
the year as compared to March 2015. Volume growth was, however, robust
during the year. Volumes were higher in all product lines - as compared
to the previous year, Electrical Wires grew by 12%, Flexible Wires by
20%, Power Cables by 19%, and all Communication Cables by over 35%.
In terms of outlook for the upcoming year, the recent budget announced
by the Government has allocated a substantial increased outlay on
infrastructure related spending. Programs such as Railway and
Industrial Corridors, Smart City initiatives, Digital Connectivity via
Bharat Net etc are beginning to take shape; the Government''s initiative
in the Power Sector with the UDAY program is gaining acceptance; the
push towards generating clean energy is starting to yield results. It
is expected that some of these projects would reach the execution stage
in the coming year and that would be positive to your Company''s
position in product lines such as Electrical Cables for various
applications, as well as Optical Fiber Cables.
Income for the year under review was higher at Rs. 25,251.8 million
(previous year Rs. 25,075.6 million) representing a growth of 1% over
the previous year. Your Company has recorded a Net Profit before Tax of
Rs. 3,363.8 million as against Rs. 2,631.5 million in the previous year
- a growth of 28%.
Highlights of the performance are discussed in detail in the Management
Discussion and Analysis Report (MDAR) attached as Annexure A to this
Report.
EXPORTS: Due to the depressed market situation, overseas FOB value of
exports for the year was Rs. 416.5 million (Previous year''s export
value of Rs. 539.5 million).
FINANCE
Your Company''s short term debt programs continue to enjoy the highest
ratings from CRISIL. Since the last few years, these have been accorded
the A1 rating. Your Company retained the AA /stable rating for its
Rs.500 million long term non-convertible debentures program as well as
on the long term loans currently outstanding.
During the 3rd quarter of the year, your Company redeemed its
outstanding non-convertible debentures of Rs 500 million. Post this
redemption, only a small portion of one long term loan remains
outstanding.
Financial costs have been contained to the minimum required levels. The
Company continues to meet all its financial commitments in a timely
manner.
FIXED DEPOSITS
Your Company has stopped accepting deposits from the year 2003 and
accordingly, no fixed deposits have been accepted during the year under
review.
DIVIDEND
Considering the business situation, your Directors have pleasure in
recommending a dividend on equity shares of 125%. The amount thereof
per equity share will be Rs 2.50. The total dividend outgo (including
dividend tax) will be Rs.460.2 million. Included in the above
recommendation is a special dividend of 25% (Rs 0.50 per share) as
homage to late Shri. P. P. Chhabria, Founder Promoter of your Company.
Payment of Dividend is subject to the approval of the members at the
ensuing Annual General Meeting.
EXPANSION & NEW PRODUCTS
As mentioned in our previous report, the switchgear facility in Roorkee
has been awaiting approval from BIS prior to market release. This is
now expected in the coming months and the product launch is now planned
for Q2, 2016-17.
Your Company announced in Q2, 2015-16 that it was entering the Fan
segment - members will be pleased to know that a completely new range
of fans, specially designed for your Company, has been introduced in
the market in May 2016. While the current introduction targets all
price segments, it is the intention of your Company to constantly
innovate and bring new and meaningful designs to the market from time
to time. These new products are expected to open up a new growth area
for your Company as well as take it on the path of being an Electrical
Products and Solutions Company eventually.
Anticipating and catering to market demand has been a hallmark of your
Company - in this connection, capacity additions were made in several
product lines - LAN/Coaxial/specialty cables for security applications
all currently operate at increased capacities and are poised to capture
market growth in these areas.
In the pipeline for 2016-17 are new products from the Lighting/Lamp
business, electrical cables for solar and automobile applications and
an entirely new range of switches etc.
JOINT VENTURES, SUBSIDIARIES AND ASSOCIATES
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5
of the Companies (Accounts) Rules 2014, the statement containing
salient features of the financial statements of the Company''s Joint
Ventures / Associates (in form AOC-1) is attached to this Report as
Annexure I.
Finolex J-Power Systems Private Limited
With the government''s emphasis on improving investments in the
infrastructure sector beginning with Roads, Ports and Railways,
followed by Energy sector, it is expected that more tenders would be
floated and hence the JV expects to participate and see a favorable
order book.
The year has been very positive for company in terms of market
penetration, improved reach and attaining visibility by relationship
building with the customer base and the same is reflected in terms of
the JV''s ability to participate in company tenders. Tender
participation and enquiry register has grown six fold. The challenge
remains in terms of meeting pre-qualification requirements and on the
export front where overseas third party certifications are mandated.
Because of several representations made by the JV, it has been
successful in persuading various State and Central Government utilities
& Public Sector undertakings to accept credentials of the JV partners;
it has been successful in participating in majority of tenders. While
the level of tender participation has improved, the tender conclusion
process is still very slow and the JV is awaiting the results in most
tenders that it has participated in.
Thus, it is estimated that the JV will still take some time before it
becomes profitable and will need financial support in the form of
equity infusion until then. While the long term outlook of the JV is
positive, in the short term, there is an erosion of net worth in the
JV. Taking a prudent view of the same, an amount of Rs. 194.5 million
has been recognized as a diminution in the value of investment. During
the year, your Company injected equity of Rs. 232.8 million, taking the
Company''s participation up to Rs. 982.5 million at the end of FY
2015-16.
Corning Finolex Optical Fibre Private Limited
During the year, the JV realized revenues of Rs. 1,596.6 million
against Rs. 1,581.3 million in the previous year. Profitability,
however, is yet to improve and the JV is currently at break-even
levels. With consumer demand increasing for mobile data services and e
commerce, it is hoped that the fiber penetration in India will improve.
Further, Government initiatives such as Bharat Net and Digital India
are expected to add buoyancy to demand. Demand for better quality and
feature rich products is on the increase and the JV expects to
capitalize on the same. Your Company''s participation in the JV''s equity
at the end of FY 2015-16 remains at Rs 17.5 million.
EMPLOYEES
Your Company recognizes the importance of a motivated and skilled human
resource. Your Company endeavors to create a challenging and favorable
work environment that encourages entrepreneurial behavior, innovation
and the drive towards business excellence. Several skilled based
training programs were conducted during the year with the help of
external consultants, especially for the staff in Sales and Marketing
functions. Your Company is also in the process of revamping its hiring
and appraisal processes in line with benchmarked practices in industry.
Industrial relations continued to be cordial during the year.
The Company had 1,694 permanent employees on its rolls as on 31st
March, 2016 (previous year 1,531 permanent employees as on 31st March,
2015).
Particulars of employees and related disclosures:
In terms of provisions of Section 197(12) of Companies Act, 2013 read
with Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014, a statement showing the names and
other particulars of employees drawing remuneration in excess of the
limits set out in the said rules are provided in the Annexure E to this
Report.
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 the Annexure F to this Report.
KEY MANAGERIAL PERSONNEL
The following persons continued as Key Managerial Personnel during the
year 2015-16:
Name Title
Mr. D K Chhabria Executive Chairman
Mr. Mahesh Viswanathan Executive Director & CFO
Mr. R G D''Silva Company Secretary & President (Legal)
CORPORATE GOVERNANCE
Your Company is in full compliance with the Corporate Governance
guidelines as set out in Clause 49 of the Listing Agreement and is
committed to good corporate governance laying a strong emphasis on
transparency, accountability and integrity. All Directors and Senior
Management employees have confirmed in writing their adherence to the
Company''s Code of Conduct.
A separate report on Corporate Governance (Annexure B) is provided
together with a Certificate from the Statutory Auditors of the Company
regarding compliance with conditions of Corporate Governance as
Annexure C, as mandated under Clause 49 of the Listing Agreement. There
is no qualification, reservation or adverse remark or disclaimer made
by the auditor in his report. A Certificate of the Chief Executive
Officer and Chief Financial Officer of the Company in terms of Clause
49 (IX) of the Listing Agreement, inter alia, confirming the
correctness of the financial statements and cash flow statements,
adequacy of the internal control measures and reporting of matters to
the Audit Committee is also annexed.
CORPORATE SOCIAL RESPONSIBILITY (''CSR'')
As in the past, your Company continues to serve the community around
it. Members will recall that during the previous year, your Company had
approved an expenditure of Rs. 30.0 million towards construction of an
additional building in an engineering college supported by the Company.
While this amount was approved in 2014-15, the actual spend was to
happen in 2015-16 - we are pleased to state that this project has been
successfully completed and the college now boasts of an excellent
building with state of art class rooms. Keeping in mind the projected
growth in student population in the college, your Company in 2015-16
sanctioned a further sum of Rs. 30.0 million from its CSR funds for the
construction of an additional block - the cash flow on this project
will happen in 2016-17.
The annual report on CSR activities of the Company for the year under
review is set out in Annexure J forming part of this report.
DIRECTORS
Mr. P.P. Chhabria, founder promoter of your Company, breathed his last
on 5th May 2016 after a brief illness. He had been the guiding factor,
in the growth of your Company right from its formative years all the
way through the present time. He believed that "Each morning we are
born again to work hard and live another beautiful journey". His
pioneering effort, dedication to promoting and marketing a quality
product, ability to connect with customers and other stakeholders,
encouragement that he provided to employees are qualities that have
helped your Company immensely during the period of his association. His
presence will be missed, but it would be endeavor of the Board to
ensure that his values are continued. Your Directors wish to place on
record his valuable contribution to the Company.
In accordance with the provisions of the Companies Act, 2013 and
relevant Rules framed there under and the Articles of Association of
the Company, Mrs. Namita Vikas Thapar [DIN: 05318899] retires by
rotation at the ensuing Annual General Meeting and, being eligible,
offers herself for re-appointment. The Board recommends her
re-appointment as Woman Director on the Board of Directors of the
Company.
COMPLIANCE UNDER THE COMPANIES ACT, 2013
Pursuant to Section 134 of the Companies Act, 2013 read with the
Companies (Accounts) Rules of 2014, your Company complied with the
requirements. The details of such compliances are enumerated below:
1. Extract of Annual Return: An extract of the Annual Return in Form
MGT9 as on March 31, 2016 is enclosed as Annexure D to this Report.
2. Number of meetings of the Board: The Board met on 4 occasions
during the year. Details of the meetings are furnished in the Report on
Corporate Governance which is attached as Annexure B to this Report.
3. Directors'' Responsibility Statement: Pursuant to Sections 134(3)(c)
and134(5) of the Companies Act, 2013, (the "Act"), the Directors, to
the best of their knowledge and belief and according to the information
and explanations provided to them, confirm that:
(a) In the preparation of the annual accounts, the applicable
accounting standards have been followed and no material departures have
been made from the same;
(b) The Directors had 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 the end of the financial year and of the profit and
loss of the Company for that period;
(c) The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
(d) The Directors had prepared the annual accounts on a going concern
basis;
(e) The Directors had laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively; and
(f) The Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
4. Remuneration and Nomination Policy: The Board of Directors has
framed the policy which lays down a framework in relation to
Appointment and Remuneration of Directors, Key Managerial Personnel and
Senior Executives of the Company including the criteria for determining
qualifications, selection and appointment. Further details are provided
in the Corporate Governance Report which is attached as Annexure B to
this Report.
5. Board Evaluation: Pursuant to the provisions of Companies Act, 2013
and Clause 49 of the Listing Agreement, independent directors at their
meeting dated 10th February 2016, without the participation of the
non-independent directors and Management, considered and evaluated the
Board''s performance, performance of the Chairman and other
non-independent directors. The evaluation was performed taking into
consideration the various aspects of the Board''s functioning,
composition of the Board and its Committees, culture, execution and
performance of specific duties, obligations and governance. The Board
of Directors expressed its satisfaction with the evaluation process.
6. Particulars Of Loans, Guarantees Or Investments Under Section 186
Of The Companies Act, 2013: During the year, an investment of Rs. 232.8
million was made in the equity of the Company''s Joint Venture - M/s
Finolex J-Power Systems Pvt. Limited.
7. Contracts Or Arrangements With Related Parties: All transactions
entered into by the Company with related parties were in the ordinary
course of business and on an arm''s length basis. Each of these
transactions was reviewed by the Audit Committee prior to being entered
into and where necessary, was approved by the Board of Directors and
members. In respect of transactions of a repetitive nature, an omnibus
approval was obtained from the Audit Committee and Members where
necessary. At every meeting, the Audit Committee reviews the
transactions that were entered into during the immediately preceding
period. Details of related party transactions have been disclosed under
Note 36 to the financial statements. Details of the same are also
reproduced in Form AOC 2 which is attached as Annexure F to this
Report. The Company''s Policy on transactions with related parties as
approved by the Board is also available on the website of the Company
at www.finolex.com.
8. Material Changes And Commitments Affecting The Financial Position
Of The Company Which Have Occurred Between March 31, 2016 And May 26,
2016 (Date Of This Report):There were no material changes and
commitments affecting the financial position of the Company between the
end of the financial year (March 31, 2016) and date of this Report (May
26, 2016)
9. Significant And Material Orders Passed By The Regulators Or Courts
Or Tribunals Impacting The Going Concern Status Of The Company: There
are no significant and material orders passed by the Regulators or
Courts or Tribunals that would impact the going concern status of the
Company and the Company''s operations in the future.
10. Adequacy Of Internal Financial Controls With Reference To The
Financial Statements:
Having regard to Rule 8 (5) (viii) of the Companies (Accounts) Rules,
2014, the details in respect of adequacy of internal financial controls
with reference to the financial statements of the Company are as
follows :
Your Company maintains appropriate systems of internal control
including monitoring procedures. These internal control systems ensure
reliable and accurate financial reporting, safeguarding of assets,
keeping constant check on cost structure and adhering to management
policies. The internal controls are commensurate with the size, scale
and complexity of our operations and facilitate timely detection of any
irregularities and early remedial steps against factors such as loss
from unauthorized use and disposition. Company policies, guidelines
and procedures provide for adequate checks and balances which are meant
to ensure that all transactions are authorized, recorded and reported
correctly. The internal controls are continuously assessed and improved
/ modified to meet changes in business conditions, statutory and
accounting requirements.
Constant monitoring of the effectiveness of controls is ensured by
periodical audits performed by an in-house internal audit team as well
as assignments entrusted to M/S Ernst & Young. Both these teams in
their respective assignments test and review controls, challenge
business processes for their robustness and benchmark practices in line
with industry norms.
At the entity level, it has been decided that the Company''s internal
control mechanism would follow the COSO framework. At individual
business levels, the existing controls are being strengthened by the
adoption of an electronic tool which will provide for review,
monitoring and reporting of the various control mechanism both at a
location and functional level prior to being periodically certified by
its robustness by the Management.
The Audit Committee regularly meets and reviews the results of the
various internal control audits both with the Auditors as well as with
the respective Auditees. The Audit Committee is apprised of the
findings as well as the corrective actions that are taken. Periodical
meetings between the Audit Committee and the Company Management also
ensure the necessary checks and balances that may need to be built into
the control system.
11. Risk Management Policy: Your Company has set up a Risk Management
Committee of the Board of Directors which comprises Dr. H S Vachha, Mr.
Sanjay Asher, Mr. D K Chhabria and Mr. Mahesh Viswanathan. More details
of the risks faced by the Company are available in the Management
Discussion & Analysis Report which, pursuant to Clause 49 (VIII) (D) of
the Listing Agreement, is attached as Annexure A to this Report.
12. Vigil Mechanism / Whistle Blower Policy: As required under Section
177 (9) of the Companies Act, 2013 read with Rule 7 of the Companies
(Meetings of Boards and its Powers) 2014 and Clause 49 of the Listing
Agreement, the Company has adopted a policy on vigil mechanism /
whistle blower. The policy provides direct access to the Chairman of
the Audit Committee in case any employee should choose to report or
bring up a complaint. Your Company affirms that no one has been denied
access to the Chairman of the Audit Committee and also that no
complaints were received during the year. Brief details about the
policy are provided in the Corporate Governance Report which is
attached as Annexure B to this Report. Also, the policy is available at
the Company''s website.
13. Prevention Of Sexual Harassment Policy:
The Company has in place a policy on prevention of sexual harassment
policy in line with the requirements of the Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An
Internal Complaints Committee has been set up to redress complaints
received regarding sexual harassment. All employees (permanent,
contractual, temporary, trainees) are covered under this policy.
During the year under review, no complaints were received by the
Company relating to sexual harassment.
AUDITORS
M/S B. K. Khare & Company, Chartered Accountants (Firm Registration
Number: 105102W), Auditors of your Company, hold office until
conclusion of the ensuing Annual General Meeting and being eligible,
offer themselves for re-appointment. Further as required under the
provisions of Section 139 and Section 141 of the Companies Act, 2013
read with the Companies (Accounts) Rules 2014, M/S B. K. Khare &
Company have confirmed their consent as well as eligibility to act as
Auditor of the Company.
The Audit Committee and the Board of Directors have recommended the
appointment of the Auditors for the financial year 2016-17. Necessary
resolution is being placed before the Members for approval.
COST AUDIT
As per the requirement of the Central Government and pursuant to
Section 148 of the Companies Act, 2013 read with Companies (Cost
Records and Audit) rules of 2014 as amended from time to time, your
Company has been carrying out an audit of cost records every year. In
respect of the financial year 2015-16, at the previous AGM, members had
approved of the appointment of M/S. Joshi Apte & Associates as Cost
Auditor at a remuneration of Rs. 4.5 lakhs plus service tax, as
applicable, and reimbursement of out of pocket expenses. Their work
will commence shortly and their report would be filed with MCA on or
before the due date.
The Cost Audit Report was filed for the financial year 2014-15 was
filed prior to its due date in September 2015.
SECRETARIAL AUDIT
In accordance with the provisions of Section 204 of the Companies Act,
2013, and the rules made there under, M/S. S.V. Deulkar & Co., a firm
of Company Secretaries in practice was appointed to conduct the
Secretarial Audit of the Company. There is no qualification,
reservation or adverse remark or disclaimer made by them.
Their Report is attached as Annexure G to this Report.
LISTING OF SECURITIES
Your Company''s equity shares are listed on the two premier stock
exchanges of the country namely Bombay Stock Exchange Limited and
National Stock Exchange of India Limited. Your Company had issued
Global Depository Receipts which are listed on the Luxembourg Stock
Exchange. Your Company''s non-convertible debentures are listed on
wholesale debt market segment of the National Stock Exchange of India
Limited.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Information on conservation of energy, technology absorption, foreign
exchange earnings and outgo required to be given pursuant to Section
134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies
(Accounts) Rules, 2014 is attached to this Report as Annexure I.
PARTICULARS OF EMPLOYEES
Information as required under the provisions of the Companies Act, 2013
(the "Act") read with Rule 5 sub rules (2 and 3) of Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 (the
"Rules") forms part of this Report. However, as per the provisions of
Section 136(1) of the Act, the Report and Accounts are being sent to
the members, excluding the statement of particulars of employees under
the Rules of the Act. Any shareholder desirous of obtaining a copy of
the said statement may write to the Company Secretary & President
(Legal) at the registered office of the Company.
CAUTIONARY STATEMENT
Statements in this Directors'' Report and Annexure may contain forward
looking statements within the meaning of applicable Securities laws and
regulations. Actual results could differ materially from those
expressed or implied. Various factors including commodity prices,
cyclical demand, changes in Government regulations, tax laws, general
economic development could all have a bearing on the Company''s
operations and would impact eventual results.
ACKNOWLEDGEMENTS
Your Directors are grateful to the Central and State Governments,
Statutory Authorities, Local Bodies, Banks and Financial institutions
for their continued support and cooperation. Your Directors warmly
acknowledge the trust and confidence reposed in your Company by its
channel partners, dealers, customers and construction organizations in
supporting its business activities and growth. Your Directors express
their gratitude to the other business associates for their unstinting
support. Your Directors value the commitment and contribution of the
employees towards the Company. Last but not the least, your Directors
is thankful to the Members for extending their constant trust and for
the confidence shown in the Company.
For and on behalf of the Board of Directors
Pune D.K. Chhabria
Dated: 26th May 2016 Executive Chairman
Mar 31, 2015
Dear Members,
The 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.
1. OPERATING RESULTS
Certain key aspects of your Company's performance during the financial
year ended 31st March, 2015, as compared to the previous financial year
are summarised below:
(Rs. in Lacs)
Particulars Standalone
Year Ended Year Ended
31.03.2015 31.03.2014
Income for the year 20,144.23 16,665.00
Profit before Interest, Depreciation 7,799.21 9,259.72
and Tax
Finance Charges (1,635.50) (1,337.32)
Profit before Depreciation and Taxes 6,163.71 7,922.40
Depreciation & Amortisation (1,190.13) (545.48)
Provisions for Taxation/ Deferred Tax (2,110.51) (1,278.47)
Prior Period Items / Exceptional Items 326.66 114.92
Minority Interest & Profit from Associate - -
Company
Net Profit for the Current Year 3,189.73 6,213.37
Earlier Years Balance Brought forward 16,140.41 11,122.01
Net Profit available for Appropriation 19,330.14 17,335.38
Appropriation:
Proposed Dividend on Equity Shares (230.66) (568.94)
Dividend Distribution Tax 0.87 (4.69)
Dividend on Equity Shares (5.49) -
Additional Depreciation (1.43) -
Transfer to General Reserves - (621.34)
Due to Merger Effect - -
Amount Transfer to Minority - -
Balance carried to Balance Sheet 19,093.43 16,140.41
(Rs. in Lacs)
Particulars Consolidated
Year Ended Year Ended
31.03.2015 31.03.2014
Income for the year 30,739.61 58,979.56
Profit before Interest, Depreciation 7,395.46 18,129.01
and Tax
Finance Charges (5,130.27) (3,342.94)
Profit before Depreciation and Taxes 2,265.19 14,786.07
Depreciation & Amortisation (3,468.80) (1,655.83)
Provisions for Taxation/ Deferred Tax (1,082.92) (5,202.08)
Prior Period Items / Exceptional Items (487.59) (1,426.27)
Minority Interest & Profit from Associate 496.97 (2,970.67)
Company
Net Profit for the Current Year (2,277.14) 3,531.22
Earlier Years Balance Brought forward 17,670.05 18,197.94
Net Profit available for Appropriation 15,392.91 21,729.16
Appropriation:
Proposed Dividend on Equity Shares (230.66) (568.94)
Dividend Distribution Tax 0.87 (4.69)
Dividend on Equity Shares (5.49) -
Additional Depreciation 14.09 -
Transfer to General Reserves - (621.34)
Due to Merger Effect - (3,475.73)
Amount Transfer to Minority (741.01) 611.59
Balance carried to Balance Sheet 14,430.71 17,670.05
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-partv-transaction-policv.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 : [email protected]
Website : www.deltacorp.in
Tel. No. : 91-22-40794700
Fax No. : 91-22-40794777
Mar 31, 2014
Dear members,
The Directors are pleased to present their 46th Annual Report and
Audited Accounts for the year ended 31st March, 2014.
FINANCIAL RESULTS:
(Rs. in million)
2014 2013
Income 24,073.9 22,948.5
Profit Before Interest, Depreciation,
Exceptional Items and Tax 2,954.6 2,529.1
Less : Interest 134.0 124.6
Less : Depreciation 484.3 466.3
Profit Before Exceptional Items and Tax 2,336.3 1,938.2
Less : Exceptional Items (Loss) / Gain 103.8 (230.1)
Profit Before Tax 2,440.1 1,708.1
Less : Provision for Taxation
(a) Current Tax 578.3 333.9
(b) Deferred Tax (49.5) 18.6
(c) MAT Credit (166.5) (108.1)
(d) Taxes of Earlier Year 1.0 11.0
Profit After Tax 2,076.8 1,452.7
BACKGROUND
Economic growth over the past couple of years has been muted - much
will depend on the new government in terms of raising optimism with
their approach to various policy issues. Growth estimates have been
pruned from the earlier levels of 9% to between 5-6%. Investments which
drove growth until 2008/9 have slowed down sharply. Domestic savings
have declined while government deficits have ballooned. Inflation has
been ruling high for well over two years now leading to a period of
relatively high interest rates and its negative impact on the economy;
the reigning in of the current account deficit has been one of the few
positives for the year.
The depreciation in currency has resulted in an improvement in our
competitiveness and should help improve exports in the coming months
while at the same time compel industry to look for greater
indigenization and import substitution. It is expected that inflation
would moderate over the remaining part of 2014 and would pave way for
some monetary easing. Recent clearance by the government of several
projects that were held up for various reasons over the past couple of
years also holds out hope for an improvement in business sentiments
that could result in a turnaround to the investment cycles. However,
there is a general expectation that the ongoing general elections will
bring about a stable government and along with that there are renewed
hopes of a strong and improved economic situation.
OPERATIONS
In terms of revenue, the year under review saw only a marginal growth
over the previous year. Overall sales grew by 4% in value terms when
compared to 2012-13. In volume terms the growth was higher. Higher
volumes were achieved in Communication Cable and Copper segments as
well as in the Lighting Business. Star performances came in from
product offerings to the following customer sectors - agriculture in
the Electrical Cables segment and Coaxial and Optic Fibre Cables in the
Communication Cable segment. During the year under review both the Auto
and Infrastructure (Power) sectors were under strain.
In terms of outlook for the upcoming year, sales of Optical Fiber
Cables looks promising with the government firmly committed to
achieving the targets set under the National Optic Fiber Network
program as also the Defence Network. Similarly with the government
clearing several major infrastructure projects recently, and more
states opting for the Financial Restructuring Program, it is expected
that the Power Sector would attract investments in cabling in the not
too distant future.
Income for the year under review was higher at Rs.24,073.9 million
(previous year Rs.22,948.5 million) representing a growth of 5% over
the previous year. Your Company has recorded a Net Profit after Tax of
Rs. 2,076.8 million as against a Net Profit of Rs.1,452.7 million in
the previous year. The improved profitability comes from a better
product mix, growth in sales volumes across the product lines mentioned
above and tight monitoring of working capital requirement.
DIVIDEND
Considering the business situation, your Directors have pleasure in
recommending a dividend on equity shares of 80%.The amount thereof per
equity share will be Rs. 1.60. The total dividend outgo (including
dividend tax) will be Rs.286.3 million.
EXPANSION, CONSOLIDATION & NEW PRODUCTS
Consolidation of the Pune manufacturing operations at Urse has been
largely completed with only skeletal activity remaining at Pimpri.
This has helped further improve the cost competitiveness in the Low
Duty Electrical Cables offered by Your Company.
The planned 5MW solar power plant at Urse is now operational - the
plant went live in March 2014 and the power generated will be entirely
consumed within the Urse site leading to cost efficiencies.
The Roorkee facility expansion is now complete and the enhanced
capacity will be available for market requirements effective 2014-15.
This should greatly enhance product availability as well as ensure
better reach to the markets in Northern and Eastern India.
Expansion of the Optic Fiber Cable manufacturing capacity at the Goa
unit was completed during the year. An additional line is currently
under commissioning at the Urse unit as well. These additions would
serve the Company well in being able to meet its obligations under the
NOFN order as well as any additional demand from the market.
As announced last year, your Company intends to enter the switchgear
market. Product launch is expected during the 3rd quarter of 2014-15 -
these products will be manufactured at the Roorkee site and equipment
necessary has been ordered and is expected towards end May/early June.
Your Company launched a series of LED based lamps during the year under
review. Market acceptance has been very encouraging and more varieties
are being considered for a launch in the upcoming year. Together with
the CFL based lamps, it is envisaged that Lighting products would bring
substantial value to the Company.
JOINT VENTURES
Finolex J-Power Systems Limited, Shirval near Pune
Two major orders worth Rs 500 million were executed by the JV during
the year. As members would be aware, the Power Sector in our country
has been going through uncertain times as evidenced by difficulties in
fuel sourcing as well as the tight financial position of most power
utilities. Given this scenario, capital investment in the sector has
been minimal during the year. Moreover the stringent pre- qualification
conditions imposed by utilities have also been a dampening factor in
order acquisition by the JV. It is estimated that the JV will become
profitable only around 2016 and will need financial support in the form
of equity infusion until then. While the long term outlook of the JV is
positive, in the short term there is an erosion of net worth in the JV.
Taking a prudent view of the same, an amount of Rs 73.7 million has
been recognized as a diminution in the value of investment.
During the year, your Company injected equity of Rs. 147.0 million,
taking the Company''s participation up to Rs. 627.2 million at the end
of 2013-14.
Corning Finolex Optical Fibre Private Limited
Business operations which commenced during the last quarter of 2012-13,
have picked up during the year under review. The JV clocked a turnover
of Rs. 1,000 million during 2013-14 and is expected to do well in the
coming years as well. During the year, the equity in the JV was
enhanced to Rs. 35 million and your Company''s participation at the end
of 2013-14 stands at Rs 17.5 million.
EXPORTS
Despite the depressed market situation overseas FOB value of exports
for the year was Rs 494.4 million (Previous year''s export value of Rs.
486.9 million).
FINANCE
Your Company''s short term debt programs continue to enjoy the highest
ratings from CRISIL. Since the last few years these have been accorded
the A1 rating. The Company regained the AA /Stable rating for its
Rs.500 million long term non convertible debentures program as well as
on the long term loans currently outstanding. This upgradation by
CRISIL reflects the strong financial risk management policies followed
by your Company.
Despite the increase in value of operations, financial costs have been
contained to the minimum required levels. The Company continues to meet
all its financial commitments in a timely manner.
FIXED DEPOSITS
Your Company has stopped accepting deposits from 2003 and accordingly,
no fixed deposits have been accepted during the year under review.
EMPLOYEES
Your Company recognizes the importance of a motivated and skilled human
resource. Your Company endeavors to create a challenging and favorable
work environment that encourages entrepreneurial behavior, innovation
and the drive towards business excellence.
Industrial relations continued to be cordial during the year.
The Company had 1,546 permanent employees on its roll as on 31st March,
2014 (previous year 1,611 permanent employees as on 31st March, 2013).
CORPORATE GOVERNANCE
The statement on Corporate Governance is annexed hereto and forms a
part of this Report.
CORPORATE SOCIAL RESPONSIBILITY
Your Company has and will continue to focus on education. International
Institute of Information Technology or I2IT as it is known is also
patronized by the Company. I2IT offers BE and post graduate MS courses
with various specializations in Advanced Information Technology.
All plants are environment compliant and hold ISO14001 (Environment
Management System) certification.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed;
ii) appropriate accounting policies have been selected and applied
consistently and have 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 as at 31st March, 2014 and of the Statement of Profit
and Loss for the year ended 31st March, 2014;
iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) the annual accounts have been prepared on a going concern basis.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Information on conservation of energy, technology absorption, foreign
exchange earning and outgo required to be given pursuant to Section
217(1) (e) of the Companies Act, 1956 read with the Companies Rules,
1988 (Disclosure of Particulars in the Report of the Board of
Directors) is annexed hereto and forms part of this Report.
PARTICULARS OF EMPLOYEES
Information as required under the provisions of Section 217(2A) of the
Companies Act, 1956 (the Act) and the rules framed there under forms
part of this Report. However, as per the provisions of Section
219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the
shareholders, excluding the statement of particulars of employees under
Section 217(2A) of the Act. Any shareholder desirous of obtaining a
copy of the said statement may write to the Company Secretary & Vice
President (Legal) at the Registered Office of the Company.
LISTING OF SECURITIES
Your Company''s equity shares are listed on the two premier stock
exchanges of the country namely Bombay Stock Exchange Limited and
National Stock Exchange of India Limited, amongst other stock
exchanges. Your Company had issued Global Depository Receipts which are
listed on the Luxembourg Stock Exchange. Your Company''s non-convertible
debentures are listed on wholesale debt market segment of the National
Stock Exchange of India Limited.
DIRECTORS
Dr. V G Pai retires by rotation at the ensuing Annual General Meeting.
Your Directors record their appreciation of the valuable contribution
made by Dr. V G Pai during his tenure as a Director of the Company. Mr.
Adi J Engineer and Dr. H S Vachha retire by rotation at the ensuing
Annual General Meeting and, being eligible, offer themselves for
reappointment. Mr. Atul C. Choksey, Mr. S. B. (Ravi) Pandit, Mr.
Pradeep R Rathi, Mr. Sanjay K. Asher and Mr. Pratap G Pawar are
Directors liable to retire by rotation and are eligible for appointment
as Directors. The Board of Directors proposes and recommends the
appointment of Mr. Adi J Engineer, Dr. H S Vachha, Mr. Atul C. Choksey,
Mr. S. B. (Ravi) Pandit, Mr. Pradeep R Rathi, Mr. Sanjay K. Asher and
Mr. Pratap G Pawar as Independent Directors on the Board of Directors
of the Company, under the provisions of the Companies Act 2013 and
Rules framed there under as also under the provisions of revised clause
49 of the Listing Agreement with the Stock Exchanges, as proposed in
the resolutions set out at Item Numbers 5 to 11 in the Notice for the
ensuing Annual General Meeting of the Company.
AUDITORS
M/S B.K. Khare & Company, Chartered Accountants, Auditors of the
Company, hold office until conclusion of the ensuing Annual General
Meeting and being eligible, offer themselves for reappointment.
ACKNOWLEDGEMENT
Your Directors are grateful to the Central and State Governments,
Statutory Authorities, Local Bodies, Banks and Financial Institutions
for their continued cooperation and support. Your Directors warmly
acknowledge the trust and confidence reposed in the Company by its
channel partners, dealers, customers, and construction organizations in
supporting its business activities and growth. Your Directors express
their gratitude to the other business associates of the Company for
their unstinting support. Your Directors value the commitment of the
employees towards the Company and appreciate their valuable
contributions for the progress and growth of the Company. Last but not
the least your Directors are thankful to the Members for extending
constant trust and for the confidence shown in the Company.
For and on behalf of the Board of Directors
D. K. Chhabria
Executive Chairman
Pune,
Dated : 8th May, 2014
Mar 31, 2013
To The Members
The Directors are pleased to present their 45th Annual Report and
Audited Accounts for the year ended 31st March, 2013. FINANCIAL
RESULTS:
(Rs. in million)
2013 2012
Income 22,948.5 20,961.5
Proft Before Interest,
Depreciation, Exceptional Items and Tax 2,529.1 2,102.0
Less : Interest 124.6 251.0
Less : Depreciation 466.3 394.7
Proft Before Exceptional Items and Tax 1,938.2 1,456.3
Less : Exceptional Items 230.1 363.6
Proft Before Tax 1,708.1 1,092.7
Less : Provision for Taxation
(a) Current Tax 333.9 174.3
(b) Deferred Tax 18.6 15.7
(c) MAT Credit (108.1) (79.2)
(d) Taxes of Earlier Year
11.0 - Proft After Tax 1,452.7 981.9
BACKGROUND
Economic recovery that was expected at the beginning of the year under
review has not materialized. Global economic growth was lower than in
the previous year with all the stars of the past few years
(China/India/Other BRIC nations) clocking very moderate growth. Most of
the large economies which were affected by the crisis of 2008 were
still resorting to quantitative easing in some form or the other,
hoping to stimulate investment and economic activity; however clear
signs of recovery are still to emerge.
On the domestic front, a few issues continue to defy solutions -
infation has been ruling high for well over two years now leading to a
period of relatively high interest rates and its negative impact on the
economy; GDP growth of 5%,which is far lower than the 6.5% reported in
the previous year and way below the 8% average that was achieved in the
years leading upto 2010; the high level of government''s fscal defcit at
5.4% continues to trouble the economy; and a continuously depreciating
Rupee  from a level of Rs. 50.88 in March, 2012 to the US Dollar, the
Rupee in March, 2013 closed at Rs.54.285.
The Government expects the economy to pick up after faltering last year
 GDP is expected to grow at around 6.5% in the coming fnancial year;
fscal defcit is expected to be contained to under 5% of GDP, and
infation is expected to be around 6.5%. However, this will depend on
how some elements of the economy play out  such as oil and commodity
prices, availability of adequate fnances and the ability of the
manufacturing sector to pull itself out of the current situation.
OPERATIONS
Overall sales grew by 10% in value terms in 2012-13 when compared to
the previous year. In volume terms the growth was higher at 14%. Higher
volumes were achieved in both Electrical as well as Communication Cable
segments. Star performances came in from product offerings to the
following customer sectors  automotive, agriculture and construction
in the Electrical Cables segment and Coaxial and Optic Fibre Cables in
the Communication Cable segment. Towards the end of the period under
review, however, it was clear that both the Auto and Infrastructure
(Power) sectors were under strain. On the other hand recent
developments within the Telecom sector viz. announcement of the
intention by the Government to create a nationwide Optic Fibre Network
to provide connectivity to village panchayats, roll out of 4G services
by some Telecom service providers etc will substantially improve growth
possibilities in the coming fnancial year. Outlook on orders from this
segment looks promising.
Income for the year under review was higher at Rs.22,948.5 million
(previous year Rs.20,961.5 million) representing a growth of 10% over
the previous year. Your Company has recorded a Net Proft after Tax of
Rs.1,452.7 million as against a Net Proft of Rs.981.9 million in the
previous year. The improved proftability comes from a better product
mix, higher capacity utilization, growth in sales volumes across the
product lines mentioned above, tight monitoring of working capital
requirement and improved purchasing effciencies.
DIVIDEND
Considering the business situation, your Directors have pleasure in
recommending a dividend on equity shares of 60%.The amount thereof per
equity share will be Rs.1.20. The total dividend outgo (including
dividend tax) will be Rs.213.8 million.
EXPANSION & CONSOLIDATION
Consolidation of the Pune manufacturing operations is underway as
planned. Most operations would be consolidated at the Urse site by end
2013, with limited activity remaining at Pimpri. This will help further
improve the cost competitiveness in the Low Duty Electrical Cables
offered by your Company.
As announced in February 2013, your Company will set up a 5MW solar
power plant at its Urse site, which has ample land, a part of which
will be used to set up this facility. The facility will cost
approximately Rs.400 million to build and it is expected to be
operational by January 2014.The power generated will be entirely
consumed within the Urse site leading to cost effciencies.
The Roorkee facility expansion is also well under way. Construction of
a new factory shed is almost complete and new machinery has started
arriving at the site. Commissioning of equipment is expected to be
complete by end 2013. The expansion is expected to be within the budget
of Rs.1,000 million and will be completed within the timeframe
initially set.
In view of the opportunities now visible in the Telecom sector, your
Company is investing in additional cable making equipment at the
Optical Fibre Cable facility at Goa. Over the next year an investment
of around Rs. 500 million is envisaged.
JOINT VENTURES
Finolex J-Power Systems Private Limited, Shirval near Pune
As mentioned in the previous year''s report the JV is now fully
operational and has been participating in tenders both locally as well
as overseas. Your Directors are happy to report that the JV has secured
its frst large order (valued at Rs. 380 million) to supply 132 Kv power
cables to the Maharashtra State Electricity Transmission Co. Ltd. Thus
far, the JV has supplied cables at the 66Kv and 110Kv range to its
customers.
As members will be aware, in respect of the products offered by the JV,
pre-qualifcation requirements are very stringent and no effort is being
spared in ensuring that the JV obtains all the requisite certifcations.
Members will be happy to note that the JV''s 220Kv range of power cables
have already passed the Type Test requirements and that the JV has
secured certifcation from the Central Power Research Institute (CPRI) Â
this will enable the JV to bid and compete in these range of cables as
well.
Corning Finolex Optical Fibre Private Limited
Business operations commenced during the last quarter of 2012-13. As
mentioned earlier, recent announcements by the government augur well
for the Telecom sector and it is expected that fber sales will be
robust in the current fscal. It is expected that 2013-14 will be a
promising year for Optic Fibre business and the JV expects to beneft
from the same.
NEW PRODUCTS
Your Company is continuously looking at developing new products to
expand its portfolio as well as adapt to changing needs of the market.
In the current fscal, your Company has already launched new lamp models
including LED based lighting systems meant for home use, street
lighting and other commercial spaces. Your Company has also plans of
entering the switchgear product segment and will launch a series of
products within the MCB, ELCB and MCCB range during 2013-14.
EXPORTS
Despite the depressed market situation overseas FOB value of exports
for the year was Rs. 486.9 million (marginally higher than the previous
year''s export value of Rs. 483.9 million).
FINANCE
Your Company''s short term debt programs continue to enjoy the highest
ratings from CRISIL. Since the last few years these have been accorded
the A1 rating. The Company also holds AA/Positive rating for its
Rs.500 million long term non convertible debentures program as well as
on the long term loans currently outstanding.
The Company follows a balanced policy to manage liquidity and
borrowing. To part fnance the ongoing expansion, additional borrowings
of Rs. 450 million were resorted to from banks in the year 2012-13.
Despite the increase in value of operations, fnancial costs have been
contained to the minimum required levels. The Company continues to meet
all its fnancial commitments in a timely manner.
FIXED DEPOSITS
Your Company has stopped accepting deposits from 2003 and accordingly,
no fxed deposits have been accepted during the year under review.
EMPLOYEES
Your Company recognizes the importance of a motivated and skilled human
resource. Your Company endeavors to create a challenging and favorable
work environment that encourages entrepreneurial behavior, innovation
and the drive towards business excellence.
Industrial relations continued to be cordial during the year.
The Company had 1,611 permanent employees on its roll as on 31st March,
2013 (previous year 1,487 permanent employees as on 31st March 2012).
CORPORATE GOVERNANCE
The statement on Corporate Governance is annexed hereto and forms a
part of this Report.
CORPORATE SOCIAL RESPONSIBILITY
Your Company has and will continue to focus on education. International
Institute of Information Technology or I2IT as it is known is also
patronized by the Company. I2IT offers BE and post graduate MS courses
with various specializations in Advanced Information Technology.
All plants are environment compliant and hold ISO14001 (Environment
Management System) certifcation.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
confrm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed;
ii) appropriate accounting policies have been selected and applied
consistently and have 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 as at 31st March, 2013 and of the Statement of Proft and
Loss for the year ended 31st March, 2013;
iii) proper and suffcient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) the annual accounts have been prepared on a going concern basis.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Information on conservation of energy, technology absorption, foreign
exchange earning and outgo required to be given pursuant to Section
217(1) (e) of the Companies Act, 1956 read with the Companies Rules,
1988 (Disclosure of Particulars in the Report of the Board of
Directors) is annexed hereto and forms part of this Report.
PARTICULARS OF EMPLOYEES
Information as required under the provisions of Section 217(2A) of the
Companies Act, 1956 (the Act) and the rules framed there under forms
part of this Report. However, as per the provisions of Section
219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the
shareholders, excluding the statement of particulars of employees under
Section 217(2A) of the Act. Any shareholder desirous of obtaining a
copy of the said statement may write to the Company Secretary & Vice
President (Legal) at the Registered Offce of the Company.
LISTING OF SECURITIES
Your Company''s equity shares are listed on the two premier stock
exchanges of the country namely Bombay Stock Exchange Limited and
National Stock Exchange of India Limited, amongst other stock
exchanges. Your Company had issued Global Depository Receipts which are
listed on the Luxembourg Stock Exchange. Your Company''s non-convertible
debentures are listed on wholesale debt market segment of the National
Stock Exchange of India Limited.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr.P.R.Rathi, Mr. S.K.Asher and
Mr.P.G.Pawar retire by rotation at the ensuing Annual General Meeting
and are eligible for reappointment. The Board of Directors recommends
their reappointment as Directors of the Company.
AUDITORS
M/S B.K. Khare & Company, Chartered Accountants, Auditors of the
Company, hold offce until conclusion of the ensuing Annual General
Meeting and being eligible, offer themselves for reappointment.
ACKNOWLEDGEMENT
Your Directors are grateful to the Central and State Governments,
Statutory Authorities, Local Bodies, Banks and Financial Institutions
for their cooperation and support. Your Directors warmly acknowledge
the faith and confdence reposed in the Company by its channel partners,
dealers, customers, and construction organizations in supporting its
business activities and growth. Your Directors express their gratitude
to the other business associates of the Company for their unstinting
support. Your Directors value the commitment of the employees towards
the Company and appreciate their valuable contributions for the
progress and growth of the Company. Last but not the least your
Directors are thankful to the Members for extending trust and for the
confdence shown.
For and on behalf of the
Board of Directors
P. P. Chhabria
Chairman
Pune,
Dated : 30th April, 2013
Mar 31, 2012
The Directors are pleased to present their 44th Annual Report and
Audited Accounts for the year ended 31st March, 2012.
FINANCIAL RESULTS:
(Rs. in million)
2012 2011
Income 21,003.5 20,618.4
Profit Before Interest,
Depreciation,
Exceptional Items and Tax 2,102.0 1,983.6
Less : Interest 251.0 179.6
Less : Depreciation 394.7 387.8
Profit Before Exceptional
Items and Tax 1,456.3 1,416.2
Less : Exceptional Items 363.6 344.4
Profit Before Tax 1,092.7 1,071.8
Less : Provision for Taxation
(a) Current Tax and Prior
year refund adjustment 174.3 212.8
(b) MAT Credit (79.2) -
(c) Deferred Tax 15.7 (8.7)
Add: Excess Provision for
dividend tax written back - 0.4
Profit After Tax 981.9 868.1
GENERAL ECONOMY
The global economy saw a lower growth rate in the year under review for
the calendar year 2012, global growth was estimated at below 3%
compared to the 3.8% and 5.2% clocked in the years 2011 and 2010. While
Europe continued to reel under debt pressure, the news from USA has
also not been very positive. Most of the Middle East has been
experiencing difficulties the past year, resulting in high oil prices
oil prices have increased almost 15% in the January/March quarter with
consequential effects on inflation. Meanwhile China has moderated its
growth prospects for the upcoming years.
On the domestic front, inflation has been ruling high for well over a
year now - while the core inflation seems to have cooled down in the
last quarter to around 6%, for most of the year inflation averaged at
almost 9%. The high interest rate situation had its negative impact on
the economy, with most sectors reporting negative or at best a modest
growth. Additionally the high level of government's fiscal deficit at
5.9% continues to trouble the economy. Real economic growth has fallen
sharply to 6.5% from the previous year's level of 8.5%. Against this
backdrop the Rupee has depreciated sharply against the US Dollar - from
a level of 44.50 in April 2011 to 50.88 in March 2012 - a depreciation
of 14% in one year.
In its recent budget, the government expects the economy to pick up
after faltering last year - GDP is expected to grow at over 7% in the
coming financial year, fiscal deficit is expected to be contained to
less than 5.1% of GDP and inflation is expected to be reined in at
under 6.5%. However, this will depend on how some elements of the
global economy play out - such as oil and commodity prices, the debt
situation in Europe as well as the political situation in the Middle
East. Business confidence in the rest of Asia too seems low as China
moderates its own growth projections.
OPERATIONS
During 2011-12 your Company saw a very modest growth in the top line
with sales registering about 2% growth in value terms. This increase
was primarily in the Electrical Cables segment. In volume terms growth
was visible again only in the Electrical Cables segment with star
performances from product offering to the following customer sectors -
automotive, agriculture and construction. In the Communication Cables
segment, however, the level of investment in capital expenditure by
Telecom service providers was even lower than the previous year
resulting in lower sales volumes of Communication Cables. As was
indicated in the previous year, the Sheets Division was wound up in the
year under review.
Competition, as in the past years, has been keen. Coupled with a year
of modest growth and volatile price levels the pressure on margins was
continuous. Hence adjustments to the selling prices were kept minimal
and to levels that were appropriate.
Income for the year under review was marginally higher at Rs. 21,003.5
million (previous year Rs. 20,618.4 million) representing a growth of
2% over the previous year. Your Company has recorded a Net Profit after
Tax of Rs. 981.9 million as against a Net Profit of Rs. 868.1 million
in the previous year. Improved capacity utilization, better product mix
allocation between the various manufacturing units, growth in sales
volumes across the product lines mentioned above, tight monitoring of
costs and working capital requirement all have contributed to the
improvement in the financials for the year under review.
DIVIDEND
Considering the business situation, your Directors have pleasure in
recommending a dividend on equity shares of 40%. The amount thereof per
equity share will be Rs.0.80. The total dividend outgo will be Rs.142.2
million (including dividend tax Rs.19.8 million).
EXPANSION & CONSOLIDATION
Looking forward, the Pune manufacturing operations would be
consolidated at the Urse site. This will help further improve the cost
competitiveness in the Low Duty Electrical Cables offered by your
Company. The upgradation of the High Voltage Cable plant has now been
completed, resulting in enhanced capacity availability from 2012-13 -
this will help in adding to the overall revenues of your Company.
The Roorkee facility will be expanded over the next 18 months at a cost
of approximately Rs.1,000 million. This expenditure will double the
current capacity at Roorkee and will further help improve profitability
in view of the fiscal benefits that will accrue.
JOINT VENTURES
Finolex J-Power Systems Private Limited, Shirval near Pune
As at 31st March 2012, your Company's investment in the JV stands at
Rs. 480.2 million. This includes an additional investment of Rs. 98
million made in January 2012 to finance the enhanced capital needs of
the JV.
Your Directors are happy to report that the JV commenced its
manufacturing operations towards the end of September 2011 and has
since been able to supply electrical cables of the 66 KV range. The JV
has been active in participating in tenders both locally and overseas
with a view to secure business. As is common with products being
offered by the JV, pre-qualification requirements are very stringent
and no effort is being spared in ensuring that the JV obtains all the
requisite certifications.
Corning Finolex Optical Fibre Private Limited
During the year under review, the marketing JV with Corning of USA was
established and an investment of Rs. 0.5 million was made. The JV will
market Optical Fibre to cable makers within India and it is expected
that the JV will commence its operations in the upcoming fiscal.
NEW PRODUCTS
Your Company is continuously developing new products to expand its
portfolio as well as adapt to changing needs of the market. For the
year under review, your Company launched a new range of "Speaker
Wires" in the Communication Cable segment. In the Lighting Division,
the latest version of the T5 tube lights and fittings were launched by
your Company.
EXPORTS
During the year under review (in November 2011), your Company was
awarded the Special Trophy for large enterprise in the product group of
Highest Exporter in Thrust Markets for Thrust Products for outstanding
contribution to Engineering Exports in the year 2008-09.
Despite the depressed market situation overseas FOB value of exports
for the year was Rs. 483.9 million (higher by 22% than the previous
year's export value of Rs. 393.7 million).
FINANCE
Your Company's short term debt programs continue to enjoy the highest
ratings from CRISIL. Since the last few years these have been accorded
the P1 rating. The Company also holds AA/Stable rating for its Rs.500
million long term non convertible debentures program as well as on the
long term loans currently outstanding.
In March 2012, the Company repaid an External Commercial Borrowing of
JPY 3.5 billion which was originally drawn in 2007. The loan was repaid
in full and on time out of internal accruals and without resorting to
either a roll over or substitute loans.
The Company follows a balanced policy to manage liquidity and
borrowing. Despite the increase in value of operations, owing to tight
controls on the working capital cycles, your Company has managed to
control financial expenses to the minimum required levels. The Company
has been able to meet all its financial commitments in a timely manner.
SUPERBRAND STATUS
Your Company continues to hold the "Consumer Superbrand" status
since many years now. The Company is the only Indian cable company to
have achieved this enviable distinction.
FIXED DEPOSITS
Your Company neither invites nor accepts deposits from the public or
from its members and accordingly no deposits were held by the Company
as at 31st March 2012.
EMPLOYEES
Your Company recognizes the importance of a motivated and skilled human
resource. Your Company endeavors to create a challenging and favorable
work environment that encourages entrepreneurial behavior, innovation
and the drive towards business excellence.
Industrial relations continued to be cordial during the year.
The Company had 1,487 permanent employees on its roll as on 31st March,
2012 (previous year 1,484 permanent employees as on 31st March 2011).
CORPORATE GOVERNANCE
The statement on Corporate Governance is annexed hereto and forms a
part of this Report.
CORPORATE SOCIAL RESPONSIBILITY
The focus during the year under review continues to be the field of
education. International Institute of Information Technology or I2IT as
it is known is also patronized by the Company. I2IT offers BE and post
graduate MS courses with various specializations in Advanced
Information Technology.
The Company discharges its duties as a responsible corporate citizen
and accords importance to legal compliances. It also handsomely
contributes to the exchequer.
All plants are environment compliant and hold ISO14001 (Environment
Management System) certification.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed;
ii) appropriate accounting policies have been selected and applied
consistently and have made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at 31st March, 2012 and of the Statement of Profit
and Loss for the year ended 31st March, 2012;
iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) the annual accounts have been prepared on a going concern basis.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Information on conservation of energy, technology absorption, foreign
exchange earning and outgo required to be given pursuant to Section
217(1) (e) of the Companies Act, 1956 read with the Companies Rules,
1988 (Disclosure of Particulars in the Report of the Board of
Directors) is annexed hereto and forms part of this Report.
PARTICULARS OF EMPLOYEES
Information as required under the provisions of Section 217(2A) of the
Companies Act, 1956 (the Act) and the rules framed there under forms
part of this Report. However, as per the provisions of Section
219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the
shareholders, excluding the statement of particulars of employees under
Section 217(2A) of the Act. Any shareholder desirous of obtaining a
copy of the said statement may write to the Company Secretary & Vice
President (Legal) at the Registered Office of the Company.
LISTING OF SECURITIES
The Company's equity shares are listed on the two premier stock
exchanges of the country namely Bombay Stock Exchange Limited and
National Stock Exchange of India Limited, amongst other stock
exchanges. The Company has issued Global Depository Receipts which are
listed on the Luxembourg Stock Exchange. The Company's non-convertible
debentures are listed on wholesale debt market segment of the National
Stock Exchange of India Limited.
DIRECTORS
Mr. B. G. Deshmukh, a long time Director on your Company's Board,
expired on 7th August 2011 after period of illness. Your Directors wish
to place on record his valuable contribution to the growth of the
Company over his tenure of Directorship.
At its meeting held on 8th November 2011, the Board appointed Dr. Vikas
G. Pai as an Additional Director on the Board. He holds office of
Additional Director till conclusion of the ensuing Annual General
Meeting of the Company. Further at its meeting held on 3rd May 2012,
the Board has recommended his reappointment to the shareholders as a
Director of the Company which is reflected in the Notice for the said
meeting.
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Dr. H. S. Vachha, Mr. Atul C.
Choksey and Mr. S B (Ravi) Pandit retire by rotation at the ensuing
Annual General Meeting and are eligible for reappointment. The Board of
Directors recommends their reappointment as Directors of the Company.
AUDITORS
M/s B.K. Khare & Company, Chartered Accountants, Auditors of the
Company, hold office until conclusion of the ensuing Annual General
Meeting and being eligible, offer themselves for reappointment.
COST AUDITOR
The Board of Directors at its meeting held on 8th February 2011 has
appointed M/s. Joshi Apte & Associates, Cost Accountants for carrying
out audit of the relevant cost accounting records maintained by the
Company. The Central Government has approved the appointment of the
said Cost Auditors for conducting cost audit for the financial year
2011-12.
ACKNOWLEDGEMENT
Your Directors are grateful to the Central and State Governments,
Statutory Authorities, Local Bodies, Banks and Financial Institutions
for their cooperation and support. Your Directors warmly acknowledge
the faith and confidence reposed in the Company by its channel
partners, dealers, customers and construction organizations in
supporting its business activities and growth. Your Directors express
their gratitude to the other business associates of the Company for
their unstinting support. Your Directors value the commitment of the
employees towards the Company and appreciate their valuable
contributions for the progress and growth of the Company. Last but not
the least your Directors are thankful to the Members for extending
trust and for the confidence shown.
For and on behalf of the Board of Directors
P. P. Chhabria
Chairman
Pune,
Dated : 3rd May, 2012
Mar 31, 2011
Dear Members,
The Directors present their Twentieth Annual Report together with the
Audited Statement of Accounts for the year ended 31st March 2011.
Financial Highlights
(Rs. in Lacs)
Particulars Standalone Consolidated
Year ended Year ended Year ended Year ended
31.03.2011 31.03.2010 31.03.2011 31.03.2009
Income for the year 26,723 5,460 38,263 13,328
Profit before
Interest,
Depreciation and Tax 13,717 4,420 19,148 4,674
Finance Charges 475 2,403 1,281 1,868
Profit before
Depreciation
and Taxes 13,242 2,017 17,867 2,806
Depreciation 39 42 597 561
Provisions for
Taxation/
Deferred Tax (340) (509) 709 (820)
Prior Period
Items / Extra
Ordinary Items - (109) (41) (157)
Minority Interest - - (50) (56)
Net Profit for
the Current Year 12,863 1,357 16,571 1,211
Earlier Years
Balance Brought
forward 803 386 163 117
Net Profit
available for
Appropriation 13,665 1,743 16,734 1,327
Appropriation:
Proposed
dividend on
Equity Shares (605) (418) (605) (418)
Proposed dividend
on Preference
Shares (98) (98) (98) (98)
Dividend on
Equity Shares - (33) - (33)
Dividend
Distribution Tax (114) (91) (114) (91)
Transfer to
General Reserves (2,000) (300) (2,000) (300)
Due to Merger Effect - - - (224)
Balance carried
to Balance Sheet 10,848 803 13,917 163
DIVIDEND
Your Directors are glad to recommend dividend @ 8% on the Preference
Share Capital (i.e. Rs. 0.80 per Preference Share ofRs. 10/- each) and @
30% on the Equity Share Capital (i.e. Rs. 0.30 per Equity Share of Rs. 1/-
each) of the Company.
OPERATIONS
During the year under review, your Company recorded a total income ofRs.
38,263 Lacs (Consolidated) and Net Proft ofRs. 16,571 Lacs
(Consolidated). For further information, kindly refer to Management
Discussion and Analysis Report, forming part of this Annual report.
SUBSIDIARy COMPANIES
The Ministry of Corporate Affairs has vide General Circular No. 2/2011
dated February 8, 2011 granted general exemption from attaching the
accounts and fnancial statements of subsidiary Companies as provided
under Section 212 (8) of the Companies Act, 1956, provided conditions
specifed in the said circular are fulflled. The Company has complied
with all the conditions mentioned in the above circular. Therefore,
Annual Accounts of subsidiaries of the Company have not been annexed to
this report. However, the same are open for the inspection at the
Registered as well as Corporate Offce of the Company. Any member
desirous of obtaining the same may request the Company in writing.
GROUP FOR INTER SE TRANSFER OF SHARES
As required under Clause 3(1)(e)(i) of the Securities & Exchange Board
of India(Substantial Acquisition of Shares and Takeovers)
Regulations,1997 (Takeover Regulations), persons constituting group
(within the meaning of group defned in Monopolies and Restrictive Trade
Practices Act, 1969) for the purpose of claiming exemption from
applicability of the provisions of Regulations 10 and 12 of the
Takeover Regulations, are given in Annexure A to this Report.
CORPORATE GOVERNANCE REPORT
Pursuant to Clause 49 of the Listing Agreement, the Management
Discussion & Analysis Report and Corporate Governance Report together
with Certifcate from Practising Company Secretary, on compliance with
the conditions of Corporate Governance as laid down, forms part of this
Annual Report.
PARTICULARS OF EMPLOyEES
There are no employees in the Company drawing remuneration above the
limit specifed in terms of provisions of Section 217 (2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975 during the year.
PARTICULARS REGARDING CONSERVATION OF ENERGy, TECHNOLOGy ABSORPTION AND
FOREIGN EXCHANGE
The particulars as required under Companies (Disclosure of Particulars
in the Report of the Board of Directors) Rules, 1988 are not applicable
to the Company. Hence detail are not provided.
During the year, the foreign exchange outgo was Rs. 1619.76 Lacs (Last
Year 37.45 Lacs) the foreign exchange earned was Rs. Nil (Last Year Nil)
DIRECTORS
The Board of Directors of the Company have appointed Mr. Rakesh
Jhunjhunwala as an Additional Director of the Company with effect from
29th October, 2010 in accordance with Section 260 of the Companies Act,
1956 and Articles of Association of the Company. Mr. Rakesh
Jhunjhunwala hold offce as an Additional Director of the Company upto
the date of the ensuing Annual General Meeting.
At the ensuing Annual General Meeting Mr. Sudarshan Bajoria, Mr. Mahesh
Gupta and Lt. Gen. (Retd.) Noble Thamburaj, Directors will retire by
rotation and being eligible, offer themselves for re-appointment, in
terms of provisions of Articles of Association of the Company.
The brief resume/details relating to Directors, who are proposed to be
appointed/ re-appointed are furnished as an Annexure to the notice of
the ensuing Annual General Meeting.
Your Directors recommend their appointment/reappointment at the ensuing
Annual General Meeting.
ISSUE OF EQUITy SHARES AND CONVERTIBLE WARRANTS By WAy OF PREFERENTIAL
ALLOTMENT
During the year, on 29th October, 2010 the Company has allotted
3,46,47,059 fully paid-up Equity Shares and 2,13,30,000 Warrants of Rs.
1/- each, at a price ofRs. 51/- per Equity Share/per Warrant (including a
premium of Rs. 50/- per Equity Share/Warrant) by way of Preferential
Allotment to various subscribers approved by the Members of the Company
at an Extra ordinary General Meeting of the Members of the Company held
on 16th October, 2010.
DIRECTORS' RESPONSIBILITy STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors' Responsibility Statement, the
Directors confrm that:
1. in the preparation of the annual accounts for the fnancial year
ended March 31, 2011, the applicable accounting standards have been
followed alongwith proper explanation relating to material departures;
2. 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
as at 31st March, 2011 and of the proft of the Company for the year
under review;
3. the Directors have taken proper and suffcient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
4. the Directors have prepared the accounts for the fnancial year
ended 31st March, 2011 on Ãgoing concern' basis.
EMPLOyEE STOCK OPTION SCHEME
The Company implemented the Employee Stock Option Scheme ("Scheme") in
accordance with the Security and Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guideline, 1999
("the SEBI Guideline"). The Compensation Committee constituted in
accordance with the SEBI Guideline, administers and monitors the
Scheme.
Information in terms of Clause 12 of the SEBI Guidelines is at Annexure
B to this report.
FIXED DEPOSITS
During the year under review, the Company has not accepted any fxed
deposits from the public.
AUDITORS
The Board of Directors recommends to re-appoint M/s. Haribhakti & Co.,
Chartered Accountants and M/s. Amit Desai & Co., Chartered Accountant
as Joint Statutory Auditors of the Company who retire at the conclusion
of forthcoming Annual General Meeting and are eligible for
re-appoinment. M/s. Haribhakti & Co. and M/s. Amit Desai & Co. have
given their consent to act as Joint Statutory Auditors, if
re-appointed. Members are requested to consider their re-appointment .
The Auditors comments on the Company's accounts for the year ended on
31st March, 2011 are self explanatory in nature and do not require any
explanation as per the provisions of Section 217(3) of the Companies
Act, 1956.
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, offcers 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, 27th July, 2011
Regd. Office:
G-4, Clover Classic,
Ground Floor, North Main Road,
Koregaon Park, Pune - 411 001,
Maharashtra.
Mar 31, 2010
The Directors are pleased to present their 42nd Annual Report and
Audited Accounts for the year ended 31sl March, 2010.
FINANCIAL RESULTS: (Rs. in million)
2010 2009
Income 16,428.259 13,924.664
Profit Before Interest, Depreciation,
Exceptional Items and Tax 2,191.086 1,265.820
Less: Interest 168.954 300.049
Less: Depreciation 372.270 387.636
Profit Before Exceptional Items and Tax 1,649.862 578.135
Less: Exceptional Items 758.176 878.953
Profit Before Tax 891.686 (300.818)
Less : Provision for Taxation
(a) Current Tax 217.412 -
(b) Deferred Tax 98.014 46.393
(c) Fringe Benefit Tax à 7.700 Profit After Tax 576.260 (354.911)
Surplus brought forward and other adjustments 32.674 423.371
608.934 68.460
APPROPRIATIONS
Proposed Dividend 91.764 30.588
Tax on Proposed Dividend 15.595 5.198
General Reserve 100.000 -
Surplus carried to Balance Sheet 401.575 32.674
608.934 68.460
OPERATIONS
2009-10 has been a year of substantial changes - many parts of Asia,
led by India and China have experienced a robust economic recovery from
the downturn experienced in the previous year. While at the global
level recovery has been slow, the picture in India has been much
healthier since:
- there is a stable government in place since the middle of 2009
- economic activity has seen improvement in most sectors
- the country has witnessed a robust GDP growth and the economy is
poised for a healthy growth in the coming years
- infrastructure, power, automobile and communication sectors will be
powering the projected growth in the upcoming years
Your Company is favorably positioned to take advantage of the
opportunities that the economic growth will provide; however a rather
poor monsoon and lower agricultural output have had an impact on
prices, especially inflation which has been spiraling in recent months.
Commodity prices which were subdued during the early part of this
financial year, have surged once more, nearing pre financial crisis
levels in many cases.
During 2009-10 your Company saw significant improvement in sales
volumes across all product lines - electrical cables, optic fibre and
coaxial cables saw robust growth in volumes compared to the previous
year. Similarly, the product offering to various customer sectors
- automotive, agriculture, real estate, power and OEM - all saw healthy
volume growth during the year under review.
As mentioned above, commodity prices such as in the case of Copper,
have surged during the second half of the year under review - keeping
in mind the need to reach additional market areas and expand market
share, your Company has resorted to price adjustments in the selling
prices as was considered appropriate.
Currency markets continued their volatile trend; at the year end, the
Indian Rupee had appreciated against most other currencies; however in
view of the volatility experienced, your Company had decided not to
keep any uncovered exposures on account of foreign exchange - all its
current purchases of raw materials from outside India are fully covered
as soon as the import is finalized. Foreign currency and interest rate
protection measures taken in the earlier years, however continued to
produce negative results and an amount of Rs. 758.176 million has been
charged as an Exceptional Item to the Profit & Loss Account in the year
2009-10.
Income for the year under review was significantly higher at Rs.
16,428.26 million (previous year Rs.13,924.66 million) representing a
growth of 18% over the previous year. Following the robust growth
achieved at the sales level, your Company has recorded a Net Profit of
Rs. 576.20 million as against a Net Loss of Rs. 354.91 million in the
previous year. This represents a significant turnaround in your
Companys operations in almost all areas be it production, sales or
finance. Higher capacity utilization, increase in market share, growth
in sales volumes across all product lines, tight monitoring of costs
and working capital requirement all led to significant improvement in
the financials for the year under review. Several cost reduction
projects were undertaken and completed successfully during the year
incorporating the learnings from the Six Sigma program that employees
went through during the earlier years.
Segmentally, while Electrical Cables contributed 60%, Communication
Cables contributed 16% to the total sale of products. The Electrical
Cables growth was led by the rebound in the Real Estate &
Infrastructure sectors and in the Communication Cables segment, Optic
Fibre Cables business continued to grow and the order book in this
business is currently healthy. With the imminent introduction of 3G
services and expansion of internet connectivity to rural areas, it is
envisaged that the Communication Cables segment will witness
considerable growth in the coming years.
DIVIDEND
Considering the business situation, your Directors have pleasure in
recommending an enhanced payment of dividend on equity shares to
30%.The amount thereof per equity share will be Rs 0.60. The total
dividend outgo (including dividend tax) will be Rs. 107.36 million.
PROJECTS
The current status of the various projects undertaken by your Company
is mentioned in the paragraphs below:
Compact Fluorescent Lamps (CFLs) Project, Urse near Pune
The second production line to manufacture mini CFLs was commissioned
during the year under review. The 3rd line to manufacture T5 tubelights
with a range of fittings will be commissioned shortly. Upon
commissioning the 3"" line, your Company will have an annual capacity
of 30 million pieces to offer to the market. Efforts are currently on
to increase market penetration through establishment of additional
channel partners, introduction of a full range of lighting solutions as
per market needs and increased staffing to manage the business. Your
Companys product offerings include standard CFLs, mini CFLs, and T5
tubelights along with a range of fittings to address a complete
solution to the end customer. As awareness of the benefits of using
green products with a smaller carbon imprint has increased within the
country, supported by government initiatives in promoting the use of
such products, Your Company believes that demand for such products will
increase in the coming years and the capacity created will reach and
better its potential.
Urse Plant Projects
Your Company had undertaken to manufacture insulated, underground usage
power cables up to 66 kV rating. Necessary product approvals from
various authorities including Central Power Research Institute (CPRI),
Bureau of Indian Standards (BIS), State Electricity Boards, Government
and private bodies, power and infrastructure utilities have now been
secured.
During the year under review, Your Company shifted the Low Voltage
Power Cables facility from its Pimpri plant to the above facility
thereby integrating the manufacturing of the full range of power cables
from 1.1 kV to 66 kV) at one facility. This will benefit Your Company
in better utilizing its resources.
In view of the massive investments that are taking place within the
country in the power and infrastructure sectors, Your Company believes
that the demand for power cables will grow substantially in the coming
years. To be well positioned to take advantage of the growth in demand,
Your Company has embarked on a project to double the existing capacity.
Further the capacity of compounding plant and of various Low Duty
Cables (copper based) at Urse is also being enhanced during the current
financial year. These measures will bring about a better cost control
on the compounds used as well as improve availability of
a variety of copper cables.
All the above additions are estimated to result in a capital
expenditure of about Rs 1000 million during the current financial year.
Uttarakhand Project, Roorkee
During the year under review, this plant has fully stabilised and is
currently the major source of production of light duty electrical
cables. Further this plant has also established its ability to produce
multiple varieties of cables for various applications in agriculture,
construction industry, electrical panel wiring, auto cables and
consumer electrical goods.
In the month of March 2010, the capacity at Roorkee was enhanced by
over 50%. Your Company is very happy to report that the Roorkee
facility is now operating at near pre March capacity levels. Achieving
these levels, has a significant positive effect on the Companys
financials since the profits from this unit would be tax exempted for
the next few years.
Electrical Switches Project
During the year under review, progress was achieved in expanding the
basic product range as well as accessories. Further, additional
capacity has been created at your Companys manufacturing facility at
Roorkee to take advantage of fiscal benefits.
Your Company is taking steps to expand market reach and create a better
distribution network.
Finolex J-Power Systems Private Limited, Shirval near Pune
Civil work on the project has since commenced and is progressing well.
The main factory building is expected to be ready in a few months from
now. The project is targeted to be completed by the end of the current
financial year.
During the year under review your Company along with the JV partner,
brought in the second tranche of equity to help finance the project. By
the end of the current financial year the third and final tranche of
equity would also be subscribed to and the Companys investment in the
joint venture would have reached Rs 380 million.
NEW PRODUCTS
Your Company released for domestic use its newly developed range of
"Lead Free" house wiring cables under the brand "Finogard" showcasing
your Companys commitment to generate environmentally friendly
products. Further, your Company also developed 50 Ohms RF Coaxial
cables for use in mobile telephony connectivity and these cables have
now been type approved by BSNL for use in their network. It is
envisaged that more such innovations would become an integral part of
your Companys product portfolio in the near future and help generate
additional revenue.
EXPORTS
During the year your Company was awarded the Silver Shield in the
category of Large Enterprises-Highest Exporter in Thrust Markets for
Thrust Products- Award for Special Contribution by the Engineering
Export Promotion Council.
Despite the depressed market situation overseas FOB value of exports
for the year was Rs. 582.80 million (lower than the previous years
export value of Rs. 776.23 million). New markets were explored during
the year under review and your Company gained some inroads into China
and some African countries for the first time.
FINANCE
To finance the capacity enhancement activities undertaken during the
year, your Company availed of a long term External Commercial Borrowing
(ECB) of USD 10 million. The said loan has an average maturity of 4
years and is repayable in 3 equal yearly installments from 2013
onwards.
Your Companys short term debt programs continue to enjoy the highest
ratings from CRISIL. Since the last few years these have been accorded
the P1 + rating. The Company also holds AA/Negative rating for its Rs.
500 million long term non convertible debentures which are due for
redemption in August 2010. A similar rating has also been obtained for
another Rs. 500 million long term non convertible debentures to be
issued at an appropriate time in future.
The Company follows a balanced policy to manage liquidity and
borrowing. Owing to tight controls on matching fund requirements with
availability, your Company has saved significantly on financial
expenses during the year under review. The Company has been able to
meet its financial commitments in a timely manner.
IFRS
In accordance with recent guidelines issued, your Company plans to
ensure that its accounts are drawn up in compliance with the
International Financial Reporting Standards (IFRS) with effect from 1st
April, 2011. In this connection, your Company has engaged the services
of M/s Ernst & Young to train staff and help oversee the transition to
the new standards. The transition will also cover modifications
necessary to the current ERP and is expected to be completed in the
next six months.
ERP SYSTEM
With a view to respond to customers needs with promptness, your
Company had installed SAP based ERP solution in the year 2000.
Initially the solution covered Sales, Finance and Materials modules. In
2008-09 your Company extended the coverage to HR and Costing functions.
During 2009-10, Production Reporting and Planning was also covered
across all product segments thus integrating the manufacturing process
with all other functions. Further, migration to the latest version of
SAP (v ECC 6.0) was also undertaken during the year thus ensuring that
the most current practices are adopted.
SUPERBRAND STATUS
Your Company continues to hold the "Consumer Superbrand" status since
many years now. The Company is the only Indian cable company to have
achieved this enviable distinction.
FIXED DEPOSITS
No new fixed deposits have been accepted during the year under review.
As on 31st March, 2010, there were unclaimed deposits of Rs. 23,000
with interest accrued thereon till the original expiry date. The
Company continues to follow up with the deposit holders at their last
known addresses with a view to returning/liquidating the above
deposits. Deposits which remain unclaimed beyond the time limits
prescribed under law will be transferred to the Investor Education and
Protection Fund as and when due.
EMPLOYEES
Your Company recognizes the importance of a motivated and skilled human
resource. Your Company endeavors to create a challenging and favorable
work environment that encourages entrepreneurial behaviour, innovation
and the drive towards business excellence.
Industrial relations continued to be cordial during the year.
The Company had 1,383 permanent employees on its roll as on 31st March,
2010 (previous year 1,340 permanent employees as on 31s* March, 2009).
CORPORATE GOVERNANCE
The statement on Corporate Governance is annexed hereto and forms a
part of this Report.
CORPORATE SOCIAL RESPONSIBILITY
The focus during the year under review has been in the field of
education. The Company continues to support Finolex Academy of
Management & Technology which offers engineering courses at Ratnagiri
that is affiliated to Mumbai University. International Institute of
Information Technology or PIT as it is known is also patronized by the
Company. I2IT offers post graduate MS and MBA courses with various
specializations in Advanced Information Technology.
The Company discharges its duties as a responsible corporate citizen
and accords importance to legal compliances. It also handsomely
contributes to the exchequer.
While all the older plants are environment compliant and hold ISO14001
(Environment Management System) certification, your Company is
preparing for its newest plant at Uttarkhand to be similarly certified.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed;
ii) appropriate accounting policies have been selected and applied
consistently and have 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 as at 31sl March, 2010 and of the Profit and Loss
Account for the year ended 31st March, 2010;
iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) the annual accounts have been prepared on a going concern basis.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Information on conservation of energy, technology absorption, foreign
exchange earning and outgo required to be given pursuant to Section
217(1) (e) of the Companies Act, 1956 read with the Companies Rules,
1988 (Disclosure of Particulars in the Report of the Board of
Directors) is annexed hereto and forms part of this Report.
PARTICULARS OF EMPLOYEES
Information as required under the provisions of Section 217(2A) of the
Companies Act, 1956 (the Act) and the rules framed there under forms
part of this Report. However, as per the provisions of Section
219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the
shareholders, excluding the statement of particulars of employees under
Section 217(2A) of the Act. Any shareholder desirous of obtaining a
copy of the said statement may write to the Company Secretary & Vice
President (Legal) at the Registered Office of the Company.
LISTING OF SECURITIES
The Companys equity shares are listed on the two premier stock
exchanges of the country namely Bombay Stock Exchange Limited and
National Stock Exchange of India Limited, amongst other stock
exchanges. The Company has issued Global Depository Receipts which are
listed on the Luxembourg Stock Exchange. The Companys non-convertible
debentures are listed on wholesale debt market segment of the National
Stock Exchange of India Limited.
DIRECTORS
Mr Ashok Kumar Puri who hails from New Delhi had been co-opted as an
Additional Director by the Board of Directors during the previous year
2008-09 but was unable to continue and held office up to 26th August
2009, viz. the date of the last Annual General Meeting.
Pursuant to his appointment as the Managing Director of Finolex Plasson
Industries Limited, associate company, Mr. V. K. Chhabria, a promoter
executive Director has ceased as Deputy Managing Director of the
Company with effect from close of business hours on 31sMarch 2010. The
Board of Directors places on record its appreciation of the valuable
services rendered by Mr. V. K. Chhabria during his tenure of about 12
years as a whole time Director of the Company.
Mr. D. K. Chhabria, Managing Director will be completing his term of
appointment on 30th June 2010. The Board of Directors at its meeting
held on 30tfl April 2010 has approved his reappointment for a period of
five years. The terms and conditions of his reappointment are being put
up to the members for approval. Accordingly, suitable resolution which
appears in the notice of ensuing Annual General Meeting has been
proposed for consideration.
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. S. B. (Ravi) Pandit, Mr.
Pradeep R. Rathi and Mr. Sanjay K. Asher retire by rotation at the
ensuing Annual General Meeting and are eligible for reappointment. The
Board of Directors recommends their reappointment as Directors of the
Company.
AUDITORS
M/s B.K. Khare & Company, Chartered Accountants, Auditors of the
Company, hold office until conclusion of the ensuing Annual General
Meeting and being eligible, offer themselves for reappointment.
ACKNOWLEDGEMENT
Your Directors are grateful to the Central and State Governments,
Statutory Authorities, Local Bodies, Banks and Financial Institutions
for their cooperation and support. Your Directors warmly acknowledge
the faith and confidence reposed in the Company by its channel
partners, dealers, customers, and Real Estate Organisations in
suportings its business activities and growth. Your Directors express
their gratitude to the other business associates of the Company for
their unstinting support. Your Directors value the commitment of the
employees towards the Company and appreciate their valuable
contributions for the progress and growth of the Company. Last but not
the least your Directors are thankful to the Members for extending the
trust and confidence shown.
For and on behalf of the Board of Directors
P.P. Chhabria
Chairman
Pune
Dated :30th April 2010.