The Members of
Walchandnagar Industries Limited
Your directors take pleasure in presenting the 108th Annual Report on thebusiness and operations of your Company together with Audited Accounts for the year endedMarch 312017.
1. Financial Results:
The Company's financial performance for the Year ended March 31 2017 is summarizedbelow:
| ||Year ended 31.03.2017 ||Period ended 31.03.2016 |
| ||Rs. in Lakhs ||Rs. in Lakhs |
| ||(12 months) ||(18 months) |
|Income ||40128 ||80737 |
|Profit/(Loss) before Depreciation Interest Exceptional Item and Exchange currency fluctuations ||6198 ||6730 |
|Less: Interest ||6950 ||8978 |
|Depreciation ||1816 ||3384 |
|Exceptional Item ||1183 ||1011 |
|Profit before Exchange Currency fluctuations ||(3751) ||(6643) |
|Less: Exchange Currency Fluctuation Loss/(Gain) ||142 ||214 |
|Profit/(Loss) before Tax ||(3893) ||(6857) |
|Less: Tax (Net) ||2533 ||311 |
|Profit/(Loss) after Tax ||(6426) ||(7168) |
2. Financial Performance & Highlights:
During the year under review the revenue for the financial year 2016-17 (TwelveMonths) was Rs. 40128 lakhs as against the previous period Oct 2014 - Mar 2016 (EighteenMonths) of Rs. 80737 lakhs.
No material changes and commitments have occurred after the close of the year till thedate of this Report which affect the financial position of the Company.
3. Current Period:
The orders on hand as on March 31 2017 were at Rs. 844 crores as compared to Rs. 999crores as on March 31 2016.
4. Exports and Overseas Projects:
During the year / period under review the Company achieved an export turnover of Rs.38 Crores as against Rs. 144 Crores in the previous year (18 months). The export orderson hand as on March 31 2017 are at Rs. 322 Crores.
5. Dividend and Reserves:
During the Year under review your Company has suffered a (loss) after tax of Rs.(6425.63) lakhs. Hence no dividend is recommended for the Year ending March 31 2017 bythe Board.
During the Year under review the Company has suffered a loss hence not recommended anyamount to be transferred to the General Reserve of the Company.
6. Subsidiary Joint Ventures And Associate Companies:
As on March 31 2017 your Company do not have any Subsidiary Joint Venture orAssociate Company.
During the year under review none of the Companies have become or ceased to beCompany's Subsidiaries and Joint Ventures. M/s Walchand Foundries Pvt. Ltd. has ceased tobe Company's Associate Company w.e.f. March 30 2017.
7. Extract of Annual Return:
The extract of the Annual Return in Form MGT-9 in accordance with Section 92(3) of theCompanies Act 2013 read with the Companies (Management and Administration) Rules 2014are set out herewith as Annexure 'A' to this report.
8. Management Discussion & Analysis:
Detailed Management Discussion and Analysis is enclosed by way of Annexure 'B' tothis report.
9. Finance & Accounts:
(i) Fixed Deposits:
Your Company did not invite or accept deposits from the public during the period underreview.
(ii) Income Tax Assessments:
Income tax assessment up to the Assessment Year 2014-15 has been completed. HoweverCompany has preferred appeal before Commissioner of Income Tax (Appeals) for theAssessment Year 2014-15.
10. Human Resources Development:
Human Resource is the most vital factor of any organization. We have taken it a stepfurther this year and have hired Management Trainees via Campus to be future ready.
Contemporary Human Resource practices and policies like biometric attendance system and5 days working for Pune office are adopted with a view to make Walchandnagar
Industries Limited a preferred employer in the heavy engineering industry.
11. Directors' Responsibility Statement:
Pursuant to the requirement under Section 134 (3) (c) of the Companies Act 2013 theDirectors' hereby confirm that:
i) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures; if any;
ii) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of March 31 2017 and of theloss for the Year ended on that date;
iii) the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv) the Directors have prepared the annual accounts on a going concern basis;
v) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
vi) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
Based on the framework of Internal Financial Controls and compliance systemsestablished and maintained by the Company with its inherent weaknesses work performed bythe Internal Statutory and Secretarial Auditors and External Consultants speciallyappointed for this purpose including audit of Internal Financial Controls over financialreporting by the Statutory Auditors and the reviews performed by Management and therelevant Board Committees including the Audit Committee the Board is of the opinion thatthe Company's Internal Financial Controls were adequate and effective during the Yearended on March 31 2017.
12. Corporate Governance:
Your Company believes that Corporate Governance is the basis of stakeholdersatisfaction. The Company is committed to maintain the highest standards of CorporateGovernance and adhere to the Corporate
Governance Requirements as set out by SEBI. Your Company has obtained a certificationfrom K. S. Aiyar & Company Chartered Accountants Statutory Auditors on compliancewith Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 read with Schedule V of the listing Regulation. The Report of Corporate Governancealong with Certificate from the auditors of the Company regarding compliance of conditionsof corporate governance is enclosed by way of Annexure 'C' to this Report.
13. Corporate Social Responsibility:
The Companies Act 2013 mandates that every Company who meet certain eligibilitycriteria needs to spend at least 2% of its average net profit for the immediatelypreceding three financial years on Corporate Social Responsibility activities. In view oflosses statutorily no amount is required to be spent by the Company. However CorporateSocial Responsibility is an integral part of the Company.
Over the years the Company has taken and continues to take several initiatives tosupport Environment Education Health and Sports related activities in order to fulfillits corporate social commitments.
To create health awareness in the township and nearby villages the Company continuedto organize various health schemes during the year. This year the Company organized ageneral health check up camp for hazardous workers ECG check up camp for employees above50 years of age undertook health related sessions for women and senior citizens. TheCompany is running Hospital at Walchandnagar which is open for nearby villagers as well asemployees and consultation is free of cost.
The schools established by the Company continued to impart education up to HigherSecondary grade to children staying in Walchandnagar and in nearby villages. The Companycurrently provides education to 4111 children of which 20% are children of employees ofthe company and 80% are other children who reside in Walchandnagar & nearby villages.
To maintain a pollution free atmosphere and to spread awareness about environmentprotection we have undertaken tree plantation and organized seminars on pollution control& on disposal of hazardous waste.
14. Energy Technology & Foreign Exchange:
Pursuant to Section 134(3)(m) of the Companies Act 2013 read with the Companies(Accounts) Rules 2014 information on conservation of energy technology absorptionforeign exchange earnings and out-go is given in the Annexure 'D' to this Report.
Employee relations remained harmonious and satisfactory during the year and your Boardwould like to place on record their sincere appreciation for sustained efforts and valuedcontribution made by all the employees of the Company.
16. Directors and Key Managerial Personnel:
a) Independent Director:
Pursuant to the provisions of Sections 149 152 read with Schedule IV and all otherapplicable provisions of the Companies Act 2013 and the Companies (Appointment andQualification of Directors) Rules 2014 (including any statutory modification(s) orre-enactment thereof for the time being in force) and pursuant to the provisions ofRegulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 Mr. Dilip J. Thakkar is proposed to be appointed as Independent Director from theconclusion of 108th Annual General Meeting till the conclusion of the AnnualGeneral Meeting to be held in the year 2022 not liable to retire by rotation.
Your Board has reviewed the declarations made by the Independent Directors and is ofthe view that they meet the criteria of Independence as provided in Section 149 of theCompanies Act 2013 and Rules made there under.
b) Retirement by rotation:
Pursuant to Article 86 of the Articles of Association of the Company and Section 152 ofthe Companies Act 2013 Mr. Chakor L. Doshi is due to retire by rotation at the 108thAnnual General Meeting and being eligible have offered himself for re-appointment.
Brief profile of the proposed appointee together with other disclosures in terms ofRegulation 36 (3) of the SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 are mentioned in the Notice which is part of this Annual Report.
2) Key Managerial Personnel Appointment:
Pursuant to the provisions of Sections 2(51) & 203 of the Companies Act 2013 readwith the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 Mr.Vivek Jain was appointed as Chief Financial Officer of the Company w.e.f. July 18 2016.
17. Number of Meetings of the Board:
The Board met five (5) times during the year from April 01 2016 to March 31 2017 viz.on May 24 2016; August 12 2016; November 12 2016; November 22 2016 and January312017.
18. Committees of the Board:
The Company has several Committees which have been constituted in compliance with therequirements of the relevant provisions of applicable laws and statutes.
The Company has following Committees of the Board comprising of Directors and / orExecutives of the Company:
> Audit Committee which comprises of two Independent Directors i.e. Mr. Dilip J.Thakkar (Chairman of Committee) and Dr. Anil Kakodkar (Member) and Chairman Mr. ChakorL. Doshi (Member).
> Stakeholders Relationship Committee which comprises of two IndependentDirectors i.e. Dr. Anil Kakodkar (Chairman of Committee) and Mr. Dilip J. Thakkar (Member)and Chairman Mr. Chakor L. Doshi (Member).
> Risk Management Committee which comprises of Managing Director & C.E. O.Mr. G. K. Pillai (Chairman of Committee) Managing Director Mr. Chirag C. Doshi (Member)and Asst. General Manager - Contracts Mr. Shree B. Pathak (Member).
> Nomination & Remuneration Committee
which comprises of three Independent Directors Mr. G. N. Bajpai (Chairman ofCommittee) Mr. Dilip J. Thakkar (Member) and Dr. Anil Kakodkar (Member) and ChairmanMr. Chakor L. Doshi (Member);
> Finance Committee which comprises of two Independent Directors i.e. Mr. DilipJ. Thakkar (Chairman of Committee) and Mr. G. N. Bajpai (Member) and Chairman Mr. ChakorL. Doshi (Member);
> Corporate Social Responsibility Committee
which comprises of an Independent Director Mrs. Bhavna Doshi (Chairperson ofCommittee) Managing Director & C.E. O. Mr. G. K. Pillai (Member) and ManagingDirector Mr. Chirag C. Doshi (Member);
> Committee of Independent Directors which comprises of Mr. Dilip J. ThakkarDr. Anil Kakodkar Mr. G. N. Bajpai Mr. A. R. Gandhi and Mrs. Bhavna Doshi;
> Allotment Committee which comprises of two Independent Directors i.e. Mr.Dilip J. Thakkar (Chairman of Committee) and Mr. G. N. Bajpai
(Member) and Chairman Mr. Chakor L. Doshi (Member);
> Committee of Directors for Capital Issue which comprises of two IndependentDirectors i.e. Mr. G. N. Bajpai (Chairman of Committee) and Mr. Dilip J. Thakkar (Member)and Chairman Mr. Chakor L. Doshi (Member);
19. Board Evaluation:
Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 a structured questionnaire was prepared.The Performance Evaluation of the Independent Directors was completed. IndependentDirectors Meeting considered the performance of Non-Independent Directors and theCommittees and Board as a whole reviewed the performance of the Chairman of the Companytaking into account the views of Executive Directors and Non-Executive Directors andassessed the quality quantity and timeliness of flow of information between the CompanyManagement and the Board.
20. Vigil Mechanism:
Your Company is committed to highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors has formulated a Whistle Blower Policy toreport genuine concerns or grievances. Protected disclosures can be made by a whistleblower through an e-mail or telephone line or a letter to the Chairman of the AuditCommittee or the Company Secretary of the Company or any member of the Audit Committee.The Policy on vigil mechanism /whistle blower policy may be accessed on the Company'swebsite at the link http:// www.walchand.com/wp-content/uploads/2015/01/Whistleblower-Policy.pdf.
21. Particulars of Employees Remuneration:
(A) The statement containing particulars of employees as required under Section 197(12) of the Companies Act 2013 read with Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is not being sent as the Company has nosuch employee who falls under the criteria specified in the said Rules.
(B) The ratio of the remuneration of each Director to the median employee'sremuneration and other details in terms of Section 197 (12) of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are forming part of this Report as Annexure 'E'.
22. Contracts and Arrangements with Related Parties:
All contracts / arrangements / transactions entered by the Company during the FinancialYear with Related parties were in the Ordinary Course of Business and on arm's lengthbasis.
Your Directors draw attention of the members to Note 30 to the Financial Statementwhich sets out related party disclosures.
23. Nomination & Remuneration Policy:
The Board has framed a policy on the recommendation of the Nomination &Remuneration Committee which lays down a framework in relation to remuneration ofDirectors Key Managerial Personnel and Senior Management of the Company. This policy alsolays down criteria for selection appointment and remuneration of Board Members / KeyManagerial Personnel and other senior employees.
The Nomination and Remuneration Committee and the Policy are in compliance with Section178 of the Companies Act 2013 read along with the applicable rules thereto.
The Key Objectives of the Committee are:
a) to formulate guidelines in relation to appointment and removal of Directors KeyManagerial Personnel and Senior Management.
b) to evaluate the performance of the members of the Board and provide necessary reportto the Board for further evaluation of the Board.
c) to recommend to the Board the Remuneration payable to the Directors Key ManagerialPersonnel and Senior Management.
Role of Committee:
The role of the Committee is explained in the Corporate Governance Report.
The duties of the Committee in relation to nomination matters include:
a) Ensuring that there is an appropriate induction & training programme in placefor new Directors and members of Senior Management and reviewing its effectiveness.
b) Ensuring that on appointment to the Board NonExecutive Directors receive a formalletter of appointment in accordance with the Guidelines provided under the Companies Act2013.
c) Identifying and recommending Directors who are to be put forward for retirement byrotation.
d) Determining the appropriate size diversity and composition of the Board.
e) Setting a formal and transparent procedure for selecting new Directors forappointment to the Board.
f) Developing a succession plan for the Board and Senior Management and regularlyreviewing the plan.
g) Evaluating the performance of the Board and Independent Directors.
h) Making recommendations to the Board concerning any matters relating to thecontinuation in office of any Director at any time including the suspension or terminationof service of an Executive Director as an employee of the Company subject to the provisionof the law and their service contract.
i) Delegating any of its powers to one or more of its members or the Secretary of theCommittee.
j) Recommend any necessary changes to the Board.
k) Considering any other matters as may be requested by the Board.
The duties of the Committee in relation to remuneration matters include:
a) to consider and determine the Remuneration Policy based on the performance and alsobearing in mind that the remuneration is reasonable and sufficient to attract retain andmotivate members of the Board and such other factors as the Committee shall deemappropriate.
b) to approve the remuneration of the Senior Management including Key ManagerialPersonnel of the Company maintaining a balance between fixed and incentive pay reflectingshort and long term performance objectives appropriate to the working of the Company.
c) to delegate any of its powers to one or more of its members or the Secretary of theCommittee.
d) to consider any other matters as may be requested by the Board.
e) to consider and recommend to the Board for Professional indemnity and liabilityinsurance for Directors and senior management.
24. Risk Management:
Risk Management policy was approved in the Board Meeting held on August 14 2015wherein all material Risks faced by the Company were identified and assessed. For each ofthe risks identified corresponding controls were assessed and policies and procedureswere put in place for monitoring mitigating and reporting risk on a periodic basis.
25. Internal Financial Control Systems:
Details of the Internal Financial Control Systems is explained in the "ManagementDiscussion and Analysis" as Annexure 'B' to this report.
The properties stocks stores assets etc. belonging to the Company continue to beadequately insured against fire riot civil commotion etc.
27. Dematerialization of Shares:
The Company's shares are listed on BSE Limited and National Stock Exchange of IndiaLtd. and the Company's Registrar and Share Transfer Agents have connectivity with NationalSecurities Depository Ltd. & Central Depository Services (India) Ltd. The ISIN isINE711A01022. As on March 31 2017 total dematerialized equity shares are 37051044representing 97.32%.
28. Company's Website:
The Company has its website namely www.walchand. com. The website provides detailedinformation about the business activity locations of its offices. The Quarterly ResultsAnnual Reports and Shareholding patterns all other communication with the Stock Exchangesand various policies are placed on the website of the Company and the same are updatedperiodically.
29. Means of Communication:
The Company has designated firstname.lastname@example.org as an email id for the purpose ofregistering complaints by investors and displayed the same on the website of the Company.
30. Auditors And Auditor's Report:
As per the provisions of Section 139 of the Companies Act 2013 M/s. K. S. Aiyar &Co. Chartered Accountants Mumbai the Statutory Auditors of the Company will retire atthe ensuing Annual General Meeting.
The Board of Directors places on record its appreciation for the services rendered byM/s. K. S. Aiyar & Co. as the Statutory Auditors of the Company.
The Board of Directors of the Company on the recommendation of the Audit Committee hasrecommended the appointment of M/s. Jayesh Sanghrajka & Co. LLP CharteredAccountants Mumbai as the Statutory Auditors of the Company w.e.f. the date of the 108thAGM upto the Annual General Meeting to be held in the Year 2022. The Company has receivedletter from them to the effect that their appointment if made would be within theprescribed limits under Section 141(3)(g) of the Companies Act 2013 and that they are notdisqualified for appointment. The members are requested to appoint the Auditors andauthorise the Board to fix their remuneration.
The notes forming part of the accounts referred in the Auditors' Report are selfexplanatory and give complete information. There are no qualifications reservation oradverse remarks made by statutory auditors in the Audit Report except matter referred in"Matter of Emphasis" para in Audit Report.
Cost Auditors and Cost Audit Report:
M/s. S. R. Bhargave & Co. Cost Accountants have been duly appointed as CostAuditors for conducting Cost Audit in respect of products manufactured by the Companywhich are covered under the Cost Audit Rules for current financial year ending March 2018.They were also the cost auditors for the previous Year ended March 2017. As required bySection 148 of the Companies Act 2013 necessary resolution has been included in theNotice convening the Annual General Meeting seeking ratification by the Members to theremuneration proposed to be paid to the Cost Auditors for the financial year ending March2018.
The Cost Audit Reports for the financial year ended March 2017 will be filed withinthe stipulated time i.e. on or before September 30 2017.
Secretarial Auditor and Secretarial Audit Report:
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 Board hasappointed M/s. V. N. Deodhar & Company Practicing Company Secretary to conductSecretarial Audit for the year April 01 2016 to March 31 2017. The Secretarial AuditReport for the year ended March 31 2017 is annexed herewith marked as Annexure 'F' tothis Report. No observations were made by M/s. V. N. Deodhar & Company SecretarialAuditor of the Company in their report. The Board has re-appointed M/s. V. N. Deodhar& Co. as Secretarial Auditor for the Financial Year 2017-18 also.
31. Particulars of Loans Guarantees or Investments by Company:
Particulars of Loans given guarantees and investments covered under the provisions ofSection 186 of the Companies Act 2013 are provided in the notes to Financial Statement(Please refer to Note 12 and 15 to the Financial Statement).
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
4. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
Your Directors wish to place on record their deep sense of appreciation for thecommitted services by the Company's executives staff and workers.
Your Directors also place on record their sincere appreciation for the assistance andco-operation received from the banks financial institutions customers suppliers and theshareholders from time to time.
For & on behalf of the Board of Directors
Chakor L. Doshi
3 Walchand Terraces
Mumbai - 400 034.
Date : May 262017