Your Directors hereby present the Fifty Third Annual Report on the business andoperations of the Company and the Audited Financial Statements for the Financial Yearended 31st March 2016. The salient highlights are provided in the table below:
(Rs in Million)
| ||For the period ended 31st March 2016 ||For the period ended 31st March 2015 |
| ||(12 months) ||(6 months)* |
|Sales and other operational income ||44.09 ||99.58 |
|Other Income ||7.00 ||20.78 |
|Total Income ||51.09 ||120.36 |
|Gross Profit / (Loss) from Operations ||(290.28) ||(185.55) |
|Less : Depreciation ||115.78 ||62.86 |
|Interest / Finance Charges ||12.93 ||236.06 |
|Net Profit / (Loss) for the year ||(418.99) ||(484.47) |
|Provision / (withdrawal) for Income Tax / Deferred Tax ||- ||(15.00) |
|Net Profit / (Loss) for the year after Tax ||(418.99) ||(469.47) |
|Profit / (Loss) brought forward from the previous year ||(1974.01) ||(1426.99) |
|Depreciation on transition to Schedule II of the Companies Act 2013 ||- ||(77.54) |
|Surplus / (Deficit) / carried to Balance Sheet ||(2393.00) ||(1974.01) |
* The figures given in the previous period and the current period are not comparable.
1. Results of our operations
Due to mounting losses inadequacy of working capital and other support operationshave slowed down and the Company had suspended the manufacturing operations at the Chennaiplant. The Company will take the directions of the Hon'ble BIFR in finalizing a revivalscheme along with the appointed Operating Agency.
Consolidated Financial Statements
Your Company is also presenting the Audited Consolidated Financial Statementsprepared'in accordance with the Accounting Standard 21 issued by the Institute ofChartered Accountants of India.
Status of filing under BIFR
Upon erosion of entire net worth of your Company your Company had become a SickIndustrial Company as per the provisions of Sick Industrial Companies (Special Provision)Act 1985 (SICA). Accordingly your Company filed a Reference with the Board for Industrialand Financial Reconstruction (BIFR) which has since been registered as Case No.75/2015 bythe Hon'ble BIFR for adopting such measures for the rehabilitation and revival of theCompany.
In view of the losses mounted the Directors regret that it will not be possible topropose any dividend on the Equity Shares.
The Directors also regret their inability to recommend any payment of contracteddividend on Preference Share Capital for the same reasons.
Since the Company has suffered losses no transfer to reserve was provided.
4. Particulars of loans guarantees or investments
Loans guarantees and investments covered under Section 186 of the Companies Act 2013form part of the notes to the Financial Statements provided in this Annual Report.
5. Related Party Transactions
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions during the year which in the opinion ofthe Board may have potential conflicts with the larger interests of the Company. Thedetails of transactions with related parties have been provided in Notes to accounts pointno.38 of Financial Statements.
The policy on related party transactions is available in the Company's website.
6. Fixed Deposits
Your Company has not accepted any Fixed Deposits and as such no amount of principal orinterest was outstanding as of the Balance Sheet date.
7. Management Discussion and Analysis Report
A report on the Management Discussion and Analysis is annexed herewith as Annexure - 1and forms part of this report.
8. Corporate Governance
A separate report on Corporate Governance along is appended as Annexure - 2 and formspart of this report.
9. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under the Act are provided inAnnexure - 3 to this Report.
10. Extract of Annual Return
As provided under Section 92 (3) of the Companies Act 2013 the extract of AnnualReturn of the Company is annexed herewith as Annexure - 4 in the prescribed Form MGT 9which forms part of this ' Report.
11. Material changes and commitment affecting financial position between the FinancialYear ended 31st March 2016 and the date of this Report
There are no material changes and commitments affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report; and there are no significantand material orders passed by the regulators or courts or tribunals impacting the goingconcern status and company's operations in*future.
The attention is drawn to Note No.46 of Financial Statements about the external claimon part of the land belonging to the premises of Chennai plant and potential loss ofmaterial arising there of which can be quantified only after proper assessment which wouldnot be done so far because of labour unrest which has prevented company officials fromentering in the premises.
12. Updation on Risk Management Policy
The Company implemented the Risk Management Policy last financial year as per therequirements of the Companies Act 2013. The Board regularly reviews the said policy andthe risks identified therein.
During the period under review your Board of Directors have reviewed the FinancialStatements of the 100% subsidiary as well as the step subsidiary. Your Company has inaccordance with Section 129 (3) of the Companies Act 2013 prepared the ConsolidatedFinancial Statements for the Financial Year ended 31st March 2016 which forms part of theAnnual Report. Further the statement containing the salient features of the Financials ofthe subsidiaries is given in the Financial Statements forming part of this Report.
In accordance with Section 136 of the Companies Act 2013 the audited consolidated andstandalone financial statements are available on our website www.wsindustries.in/KYC .
14. Corporate Social Responsibility
Section 135 of the Companies Act 2013 pertaining to Corporate Social Responsibility isnot applicable in our case.
15. Internal Financial Controls
Your Company has adequate internal financial controls with respect of financialreporting.
16. Directors and Key Managerial Personnel (KMP)
During the year under review Mr.K.Raman and Mr.G.Balasubramanyan resigned asDirectors stating personal reasons effective 4th November 2015. The Board took note ofthe said resignations on 13th November 2015 and placed on record its appreciation andgratitude for the long service guidance and immense contribution made by the saidDirectors.
Mrs.Hema Pasupatheeswaran resigned as Director effective 25th December 2015.
Mr.Ramachandran Karthik was appointed as Additional Director of the Company by theBoard of Directors whose term of office expires at this AGM. The Company has received aNotice in writing from a Member along with the deposit of the requisite amount forappointment as Independent Director and the same is being placed before the Annual GeneralMeeting for the approval of the Members. A brief profile of the Mr.Ramachandran Karthik isprovided under the Corporate Governance Report and in the Notice of the Annual GeneralMeeting.
Your Company is making all efforts to identify and induct suitable persons on Board tofill in the vacancies caused due to resignations of directors.
No employee draws remuneration in excess of the limits prescribed under Rule 5(2) ofChapter XIII the Companies (Appointment and Remuneration of Managerial Personnel Rules2014. Remuneration drawn by KMP remains unchanged from the previous year. Thereforedetails pertaining to Rule 5 of the Companies . (Appointment and Remuneration ofManagerial Personnel) Rules 2014 have not been provided.
17. Meetings of the Board
Six Board Meetings were held on 30th May 2015 14th August 2015 13th November 201530th December 2015 13th February 2016 and 30th March 2016 during the Financial yearcovered by this Report. For further details please refer the Corporate Governance Reportof this Annual Report.
18. Audit Committee its composition and functions
The Audit Committee comprised of 3 directors viz. Mr.K.Raman Mr.V.Srinivasan andMr.G.Balaslibramanyan. However with the resignation of two directors Mr.G.Balasubramanyanand Mr.K.Raman the strength of the Audit Committee is reduced. As already mentioned aboveYour Company is making all efforts to identify and induct new members on Board andaccordingly the Audit Committee. All recommendations made by the Audit Committee duringthe period under review were accepted by the Board.
19. Auditors Statutory Auditors
M/s.S.Viswanathan LLP Chartered Accountants (Reg No. 004770S/S20025; MembershipNo.023305) were appointed as Statutory Auditors of the Company for a period of three yearsat the Annual General Meeting held on 27th March 2015. Their appointment is to be ratifiedevery year at the Annual General meeting as per the provisions of Section 139(1) and thesaid appointment is placed for the ratification of the shareholders at the ensuing AnnualGeneral Meeting.
With reference to the Auditor's Report the explanation / comments against eachDisclaimer of opinion and Emphasis of matter is annexed herewith as "Annexure -5"
Pursuant to the requirements of Section 204 (1) of the Companies Act 2013 and Rule 9of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014Ms.Lakshmmi Subramanian (Membership No. 3534 CP No. 1087) Partner M/s.LakshmmiSubramanian & Associates was appointed as the Secretarial Auditor to conduct theSecretarial Audit of the Company for the Financial Year 20152016. The Secretarial AuditReport for the Financial year 2015-2016 is enclosed as Annexure - 6 to this Report.
Comment on Secretarial Auditor Report
With reference to the observations made by the secretarial auditor Ms. LakshmmiSubramanian Practicing Company Secretary in her Secretarial Audit Report your Companyhas taken the corrective measures during the current financial year.
On the Industrial front the Chennai plant witnessed labour unrest and the Company isworking towards solution for its Chennai workmen under the Revival Scheme of BIFR.
For the Vizag plant due to severe cash flow stress the Company was not in a positionto continue to meet the employee cost and hence a retrenchment order was sanctioned by theDevelopment Commissioner Visakhapatnam Special Economic Zone Visakhapatnam as providedfor under the appropriate acts which has since been completely implemented.
The Company has in accordance with the generally accepted accounting practicedisclosed the impact of pending litigations on its financial position in its financialstatements
21. Sexual Harassment of Women at Workplace (Prevention Prohibition & Redressal)Act 2013
During the year under review there were no complaints under this Act.
22. Director's Responsibility Statement
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:
a. In the preparation of the annual accounts the applicable accounting standards havebeen followed.
b. The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company for the financial year ended 31st March2016 and of the profit or loss of the Company for the period under review.
c. The directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.
d. The directors have prepared the annual accounts on a going concern basis. *
e. The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively taking into consideration the current circumstances and
f. The directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively takinginto consideration the current circumstances.
Your Directors would like to express their sincere appreciation for the assistance andco-operation received from the financial institutions banks Government authoritiescustomers vendors and members during the year under review. Your Directors also wish toplace on record their appreciation for the committed services by the Company's executivesstaff and workers.
| ||FOR AND ON BEHALF OF THE BOARD |
|Place : Chennai ||V.SRINIVASAN |
|Date : 14th November 2016 ||CHAIRMAN |