Delta Manufacturing Ltd

To the Shareholders

Your Directors have pleasure in presenting the forty-second (42nd) Director's Report of Delta Manufacturing Limited ("the Company") along with the financial statements for the financial year ended 31st March, 2024.

1. FINANCIAL SUMMARY AND HIGHLIGHTS

Certain key aspects of your Company's performance during the financial year ended 31st March, 2024 as compared to the previous financial year are summarised below:

The Standalone Gross Revenue from operations for financial year 2023-24 was Rs 8,771.75 Lakhs (Previous Year: Rs 8,132.58 Lakhs). The Operating Loss before tax stood at Rs 730.38 Lakhs as against Rs 1,275.35 Lakhs in the Previous Year. The Net Loss after tax for the year stood at Rs 727.46 Lakhs against Rs 786.15 Lakhs reported in the Previous Year.

The Consolidated Gross Revenue from operations for financial year 2023-24 was Rs 8,462.12 Lakhs (Previous Year: Rs 8,132.58 Lakhs), The Consolidated Operating Loss before tax stood (for continued operations) at Rs 1,040.01 Lakhs (Previous Year: Rs 1,275.35 Lakhs). The Consolidated Loss after tax stood at Rs 1,038.75 Lakhs (Previous Year: Rs 1,673.81 Lakhs).

2. DIVIDEND

The Directors do not recommend any dividend for the financial year ended 31st March, 2024.

3. SHARE CAPITAL

During the year under review, there was no change in the Company's share capital. The paid up Capital of the Company is '10,85,11,200/- comprising of 1,08,51,120 Equity Shares of Rs 10/- each.

4. ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013 (the Act), the Annual Return as on 31st March, 2024 is available on the Company's website at the link https://www.deltamagnetsgroup.com/dml/ downloads/Annual%20Return%20-%202023-2024.pdf

5. NUMBER OF MEETINGS OF THE BOARD

The Board met six (6) times during the financial year 2023-24. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report.

6. DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors hereby confirm that:

i. in the preparation of the annual accounts for financial year ended 31st March, 2024, the applicable accounting standards have been followed and there are no material departures;

ii. they 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 loss of the Company for that period.

iii. they had 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. they had prepared the annual accounts on a ‘going concern' basis.

v. they had 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. they had 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 Company's 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 DIRECTORS' APPOINTMENT AND REMUNERATION

The policy of the Company on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178 of the Act and Regulation 19 of Listing Regulations is appended as Annexure I 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 statement forming part of this Annual Report.

10. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the financial year 2023-24, your Company has entered into transactions with related parties as defined under Section 2(76) of the Act, Rules made thereunder and Regulation 23 of the Listing Regulations. During the financial year 2023-24, the Company has not entered into transactions with related parties which qualify as material transactions as per the Listing Regulations. All transactions with related parties were reviewed and approved by the Audit Committee were in compliance with the applicable provisions of the Act and the Listing Regulations.

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 Company's website at the link: https:// deltamagnetsgroup.com/dml/downloads/policies/Related%20Party%20Transaction%20Policy.pdf

There are no transactions to be reported in Form AOC-2.

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.

12. OTHER EVENTS TILL THE DATE OF THIS REPORT

a) Incorporation of Wholly Owned Subsidiary Company

The Company incorporated MMG Ferrites Private Limited as a Wholly Owned Subsidiary on 2nd May, 2024.

b) The Board of Directors of the Company has given In Principle approval for a Potential Joint Venture ("JV") with PREMO, S.L. to undertake the business of soft ferrite manufacturing.

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 II 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 Company's competitive advantage.

The business risk framework defines the risk identification and its management approach across the enterprise at various levels including documentation and reporting. The framework helps in identifying risks trend, exposure and potential impact analysis on a Company's business.

15. VIGIL MECHANISM

The Company has adopted 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 available on the website of the Company at https://deltamagnetsgroup.com/dml/downloads/policies/Whistle%20Blower%20 Policy.pdf

16. ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD

Pursuant to the provisions of the Act and Regulation 19 of the SEBI Listing Regulations, the Board has carried out an annual evaluation of performance of the Board, its Committees and Individual Directors.

The Nomination and Remuneration Committee has defined the evaluation criteria for the Board, its Committees and Individual Directors.

The Board's 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 and Remuneration 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 the Board of Directors reviewed the affairs of subsidiary. In accordance with Section 129(3) of the Act, and the Listing Regulations the Company has prepared consolidated financial statements of the Company and its

subsidiary, which form part of the Annual Report. A report on the performance and financial position of the subsidiary company as per the Act and Rules made thereunder, is provided as Form AOC - 1 in the financial statements 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 its subsidiary, are available on Company's website www.deltamagnets.com.

The policy for determining material subsidiaries as approved is available on the Company's website at https:// deltamaanetsaroup.com/dml/downloads/policies/Policv%20for%20Determining%20%20Material%20Subsidiaries.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 2023-24 in terms of Chapter V of the Act.

19. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS AFFECTING THE GOING CONCERN STATUS OF THE COMPANY

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's internal control systems are commensurate with the nature of its business and the size and complexity of its operations, and such internal financial controls with reference to the financial statements are adequate.

21. DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Section 152(6)(e) of the Act, Dr. Ram H. Shroff, (DIN: 00004865) will retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offers himself for re-appointment.

In terms of the Listing Regulations, continuation of a Director on the board of directors of a listed entity as on 31st March, 2024, without the approval of the shareholders for the last five years or more shall be subject to the approval of shareholders in the first general meeting to be held after 31st March, 2024 and thereafter at least once in every five years. In the aforesaid context, approval of the Members is being sought for continuation of Mr. Jaydev Mody as Non-Executive Non-Independent Director and Chairman, liable to retire by rotation at the ensuing AGM.

Mr. Javed Tapia, Mr. Rajesh Jaggi and Dr. Vrajesh Udani ceased to be directors of the Company w.e.f. 03rd August, 2024 on account of expiration of second term as Independent Directors. On recommendation of Nomination and Remuneration Committee, the board of directors of the Company appointed Mr. Jehangir Aibara (DIN: 07410962), Mr. Kaarshan Awatramani (DIN: 07452902) and Mr. Aurobind Patel (DIN: 00016628) as an additional Independent Directors of the Company for a first term of five consecutive years with effect from 01st August, 2024 to 31st July, 2029 (both days inclusive) subject to approval of members in accordance with the provisions of the Act and Rules made thereunder and the Listing Regulations. They shall hold the office as an Additional Director upto the date of the ensuing AGM. Necessary resolutions to this effect have been inserted in the AGM notice.

Pursuant to recommendation of the Nomination and Remuneration Committee and subject to approval of members at ensuing AGM, the board re-appointed Mr. Darius Khambatta (DIN: 00520338) as an Independent Director on the Board of Directors of the Company in accordance with Section 149(4) of the Act, to hold office for a second term of five consecutive years from 27th September, 2024 to 26th September, 2029.

22. AUDITORS

1. Statutory Auditor

M/s. MHS & Associates, Chartered Accountants (Firm Registration No: 141079W), were re-appointed as Statutory Auditors of the Company for second term at the 41st AGM held on 14th September, 2023 till the conclusion of the 46th AGM to be held in the year 2028.

There are no qualifications, reservations or adverse remarks or disclaimers made by Statutory Auditor of the Company, in the 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, 2024. The Secretarial Audit Report is appended as Annexure III to this Report.

There are no qualifications, reservations or adverse remarks or disclaimers made by Secretarial Auditor of the Company.

23. COST RECORDS AND COST AUDIT

Maintenance of Cost Records is applicable to the Company. However, Cost Audit as specified by the Central Government under Section 148(1) of the Act is not applicable to the Company.

24. 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.

25. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As per Regulation 34(2) read with Schedule V of the Listing Regulations, Management and Discussion and Analysis Report are provided in a separate Section and form 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 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 Annual Report.

28. PARTICULARS OF EMPLOYEES

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 Directors' Report, will

be made available to any shareholder on request, as per provisions of Section 136 of the Act. Members who are interested in obtaining these particulars may write email to the Company Secretary on secretarial@dmltd.in.

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 IV to this Report.

29. 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.

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 2023- 24.

31. 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.

32. 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.

33. 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.

Pursuant to the Scheme of Amalgamation between the Company, Arrow Textiles Limited (First Transferor Company or ATL) and MMG India Private Limited (Second Transferor Company or MMG) and respective shareholders as approved by Hon'ble National Company Law Tribunal, Mumbai bench (NCLT) by its order dated 27th December, 2019 (the Scheme), ATL amalgamated with the Company. As per the provisions of Section 124(5) and Section 124(6) of the Act, dividends declared by ATL not encashed/claimed by the members, within a period of seven years from the date of declaration of dividend, shall be transferred by the Company to the IEPF along with all the shares in respect of which dividend has not been paid or claimed as mentioned above.

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.deltamagnets.com.

The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company on the Company's website www.deltamagnets.com.

34. CORPORATE SOCIAL RESPONSIBILITY

In terms of Section 135 of the Act, every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during the immediately preceding financial year shall constitute Corporate Social Responsibility (CSR) Committee and formulate a CSR Policy.

Since, the Company does not fall under the said criteria during the immediately preceding financial year, the provisions of Section 135 of the Act, Schedule VII and the rules made thereunder are not applicable to the Company. Accordingly, a report on CSR activities as per rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014 is not applicable.

35. 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, for better performance of the