Your Directors hereby present the Fifty Nineth Annual Report and the Audited FinancialStatements of the Company for the Financial Year ended 31st March 2022. Thesalient highlights (in the Ind AS format) are provided in the table below:
(Rs. in Million)
|Particulars ||For the period ended |
| ||31st March 2022 ||31st March 2021 |
|Sales and other operational income ||- ||- |
|Other Income ||0.93 ||- |
|Total Income ||0.93 ||- |
|Gross Profit / (Loss) from continuing Operations ||(3.37) ||(65.79) |
|Less : Depreciation ||0.01 ||0.01 |
|Interest /Finance Charges ||34.95 ||- |
|Net Profit / (Loss) for the year from continuing operations ||(38.33) ||(65.80) |
|Provision /(withdrawal) for Income Tax / Deferred Tax ||- ||- |
|Net Profit /(Loss) for the year after Tax from continuing operations ||(38.33) ||(65.80) |
|Net Profit/(Loss) for the year after Tax from discontinued operations ||(554.81) ||(17.77) |
|Net Profit/(Loss) for the year after Tax ||(593.14) ||(83.57) |
|Profit / (Loss) brought forward from the previous year ||(5036.69) ||(4953.12) |
|Other Comprehensive Income/(Loss) arising from discontinued operations ||- ||- |
|Surplus/(Deficit)/ carried to Balance Sheet ||(5629.83) ||(5036.69) |
The effects of COVID-19 pandemic did not have any significant impact on the Company'soperations and compliances during the period under review.
2. Results of our operations
During the year under review there was no production in the Chennai and Vizag plants.However there was miscellaneous sale of Rs.10.15 million in insulator business unit.There is no revenue from operations in the turnkey project business unit during the yearunder review.
The major elements of other income and expenditure in discontinued operations are:
Other income: Waiver of Loans (Principal) Rs. 189.28 millions Expenditure:
1. Impairment of Assets (Vizag Unit) of Rs. 36.09 millions
2. Interest expenses of Rs. 603.55 millions
No dividend has been proposed on the Equity shares.
The Directors also regret their inability to recommend any payment of contracteddividend on Preference Share Capital.
4. Share Capital
The Paid up equity share capital of the Company as on 31st March 2022 wasRs.262606070/- divided into 26260607 equity shares of face value of Rs.10/- each.
The Paid up preference share capital of the Company as on 31st March 2022was Rs.127500000/- divided into 1275000 preference shares of face value of Rs.100/- each.
There was no change in both the share capital of the Company during the year underreview. However the Company has allotted 4634224 equity shares on preferential basis on10th June 2022 to Investors other than existing promoter group pursuant toapproval of shareholders through Postal Ballot Notice dated 30th April 2022 andits results dated 2nd June 2022 and on receipt of In-principle approval fromthe respective stock exchanges.
Since the Company has suffered losses no transfer to reserve is provided for.
6. Particulars of loans guarantees or investments
The Company has not provided any loan guarantee under Section 186 of the CompaniesAct 2013 or made any investment (except the investment in subsidiary) during the yearunder review.
7. Transfer of unpaid Dividend to Investor Education and Protection Fund
There is no obligation to transfer the unpaid/ unclaimed shares to the InvestorEducation and Protection Fund In terms of Investor Education and Protection Fund Authority(Accounting Audit Transfer and Refund) Amendment Rules 2021 as amended.
8. Fixed Deposits
Your Company has not accepted any deposits from public in terms of provisions ofCompanies Act 2013.
9. Corporate Governance
A separate report on Corporate Governance along with a Certificate of Compliance formspart of this report vide Annexure - 1.
During the period under review your Board of Directors have reviewed the FinancialStatements of Vidagara Tech Park Private Limited (erstwhile wholly owned subsidiary)(drawn up till 4th March 2022) and WS Insulators Private Limited (wholly ownedsubsidiary).
Your Company has in accordance with Section 129 (3) of the Companies Act 2013 preparedthe Consolidated Financial Statements for the Financial Year ended 31st March2022 which forms part of the Annual Report. Further the statement containing the salientfeatures of the Financials of the subsidiaries in the Form AOC 1 is attached as Annexure 2to this Report.
In accordance with Section 136 of the Companies Act 2013 the audited standalone andconsolidated financial statements are available on our website www.wsindustries.in/KYC.
11. 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 opinionof the Board may have potential conflicts with the larger interests of the Company. Thedetails of transactions with related parties have been disclosed in form AOC-2 as Annexure3 and form part of this Annual Report.
The policy on related party transactions is available on the Company's website in thelink http://www.wsindustries.in/KYC/pdf/Policy_on_related_party_transaction.pdf
12. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo
Since production activity was suspended in both the plants reporting on theparticulars prescribed under Section 134 of the Companies Act 2013 read with rule 8 (3)of the Companies (Accounts) Rules 2014 relating to conservation of energy and technologyabsorption does not arise.
Foreign Exchange Earnings:
Foreign Exchange Inward - NIL Foreign Exchange Outward - NIL
13. Extract of Annual Return
In terms of the requirements of section 134(3)(a) of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 the copy of the Annual Return in prescribed formatis available on the website of the Companyhttp://www.wsindustries.in/KYC/pdf/Annual_Return_MGT_7_2022.pdf
14. Material changes and commitment affecting financial position between the FinancialYear ended 31st March 2022 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 this report; and there are no significantand/or material orders passed by the regulators or courts or tribunals impacting thecompany.
15. Risk Management Policy
The Board had established Risk Management policy which formalizes the Company'sapproach to overview and manage material business risks.
16. Corporate Social Responsibility
Section 135 of the Companies Act 2013 pertaining to Corporate Social Responsibility isnot applicable to the Company.
17. Policy on directors' appointment and remuneration and other details
The Company's policy on appointment of directors remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the Corporate GovernanceReport which is a part of this report and is also available onhttp://www.wsindustries.in/KYC/pdf/Policy_ on_Board_Diversity.pdf
18. Internal Financial Controls
Your Company has internal financial controls commensurate with its position at thecurrent juncture with respect to financial reporting.
19. Directors and Key Managerial Personnel (KMP)
All independent Directors hold their respective office and are not liable to retire byrotation. The Company has not appointed any new Independent Director during the year. Inthe opinion of the Board the existing Independent Directors are with sufficientIntegrity expertise and experience. As per the provisions of Rule 6 of The Companies(Appointment and Qualifications of Directors) Rules 2014 all the Independent Directorshave registered their name in the databank maintained by the Indian Institute of CorporateAffairs and the Independent Directors will evaluate their past experiences and completethe online proficiency test if applicable.
Ms. Revathi Raghunathan had been appointed as Non Executive Independent Director bythe Board in their meeting held on 22nd July 2022 for a period of two yearseffective from 22nd July 2022 non rotational basis and with remunerationdetails as mentioned in the explanatory statement.
Retirement by rotation
No Director are liable to retire by rotation at this Annual General Meeting of theCompany under Section 152(6) of the Companies Act 2013.
Mr.S.Nagarajan had been re-designated as Executive Chairman by the Board in theirmeeting held on 22nd July 2022 for a period of five years effective from 22ndJuly 2022 on non rotational basis and with remuneration details as mentioned in theexplanatory statement.
Mr.C.K.Venkatachalam had been appointed as Managing Director by the Board in theirmeeting held on 22nd July 2022 for a period of two years effective from 22ndJuly 2022 on rotational basis and with remuneration details as mentioned in theexplanatory statement.
Joint Managing Director
Mr.S.Anandavadivel had been appointed as Joint Managing Director by the Board in theirmeeting held on 22nd July 2022 for a period of two years effective from 22ndJuly 2022 on rotational basis and with remuneration details as mentioned in theexplanatory statement.
Whole Time Director
Mr.K.Rajasekar Whole Time Director of the Company resigned on 10.06.2022.
Mr. Kalavar Vittal Rao Prakash had been appointed as Whole Time Director by the Boardin their meeting held on 22nd July 2022 for a period of two years effectivefrom 22nd July 2022 on rotational basis and with remuneration details asmentioned in the explanatory statement.
In terms of Section 149 of the Companies Act2013 the Company is required to have awoman director on its Board. Ms. Suguna Raghavan Director and Ms.Revathi Raghunathan(w.e.f 22.07.2022) are on the Board of the Company.
Key Managerial Personnel (KMPs)
In terms of Section 2(51) and Section 203 of the Companies Act 2013 Mr. K. RajasekarWhole Time Director (upto 10.06.2022) Mr. S. Nagarajan Managing Director (upto 22ndJuly 2022) Mr. C.K. Venkatachalam Managing Director (from 22nd July2022) and Mr.B. Swaminathan Chief Financial Officer and Company Secretary are the KeyManagerial Personnel of the Company as on date of this report.
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 have been disclosed in Form No. MGT-7 uploaded in thewebsite of the Company http://www.wsindustries.in/KYC/pdf/Annual_Return_MGT_7_2022. pdf.Therefore details pertaining to Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 does not arise and not provided for.
20. Declaration by Independent Directors:
The Company has received necessary declarations from each Independent Director underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of Independencelaid down in and Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 as amended.
21. Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 as amended the necessary performanceevaluation of the Board has been carried out.
22. Meetings of the Board
The details of the number of meetings of the Board held during the Financial Year2021-22 along with attendance details of each director forms part of the CorporateGovernance Report of this Annual Report.
The details regarding Committees of Board of Directors of the Company are given in theCorporate Governance Report of this Annual Report.
24. Auditors Statutory Auditors
M/s. S B S B and Associates Chartered Accountants Chennai (Firm RegistrationNo.012192S) retire at this Annual General Meeting and since their term comes to an endunder the Companies Act 2013 the Board of Directors at its meeting held on 22ndJuly 2022 have recommended appointment of M/s. Brahmayya & Co Chartered AccountantsChennai (Firm Registration No.000511S) as the Statutory Auditors of the Company in theplace of M/s. S B S B and Associates Chartered Accountants existing Statutory Auditorsof the Company subject to the approval of the shareholders. In terms of provisions ofsection 139 of the Companies Act 2013 M/s. Brahmayya & Co Chartered Accountants havefurnished a certificate that their appointment if made will be within the limitsprescribed under the said section of the Act.
With reference to the Auditor's Report issued by SBSB & Associates CharteredAccountants the explanation/comments against their qualified opinion is annexed herewithas "Annexure - 4"
Pursuant to the requirements of Section 138 of the Companies Act 2013 read with rule13 the Companies (Accounts) Rules 2014 M/s. Vivekanandan Associates CharteredAccountants (FRN:005268S) was appointed as Internal Auditor to conduct Internal Audit ofthe Company for the financial year 2021-2022.
Pursuant to the requirements of Section 204 (1) of the companies Act 2013 read withrules made thereunder Ms. Lakshmmi Subramanian (Membership No. 3534 CP No. 1087) SeniorPartner M/s. Lakshmmi Subramanian & Associates was appointed as the SecretarialAuditor to conduct the Secretarial Audit of the Company for the Financial Year 2021-22.The Report of the Secretarial Auditor is enclosed as Annexure 5 to this Report. There areno qualification in Secretarial Audit Report for the year ended 31.03.2022.
During the period under review Cost Audit is not applicable to the company.
The Company has in accordance with generally accepted accounting practice disclosedthe impact of pending litigations on its financial position in its financial statements.
26. Sexual Harassment of Women at Workplace (Prevention Prohibition & Redressal)Act 2013
During the year under review there were no complaints under this Act.
27. Vigil Mechanism
The Company has a Whistle Blower Policy and has established the necessary vigilmechanism for directors and employees in confirmation with Section 177(9) of the Act andRegulation 22 of Listing Regulations to report concerns about unethical behavior. Thedetails of the policy have been disclosed in the Corporate Governance Report which is apart of this report and is also available onhttp://www.wsindustries.in/KYC/pdf/Vigil_Mechanism.pdf
28. Disclosure requirements
As per SEBI Listing Regulations the Corporate Governance Report with the Auditors'Certificate thereon and the Management Discussion and Analysis are attached which formspart of this report. The Company has devised systems to ensure compliance with theprovisions of all applicable Secretarial Standards issued by the Institute of CompanySecretaries of India and that such systems are adequate and operating effectively.
29. Management Discussion and Analysis Report.
During the year under review there was no production in the Chennai and Vizagplants.
In the previous period and the current period under review both the ChennaiInsulator division and Visakhapatnam Insulator division are being considered as"Discontinued Operations". Turnkey Project Business Segment is considered as"Continuing Operations" in both the years.
(i) It is clarified that the company's Project Business vertical is continuingto function at a low scale because of inadequacy of funds.
However the Company has initiated various steps in connection with the revitalizationand long term stability and growth of its Turnkey Project Business Unit for which thepotential and opportunity exists after the balance sheet is restructured. In TurnkeyProject Business Unit necessary steps have been taken from the last quarter of the periodunder review for the procurement of further materials and site related activities havebeen reactivated to execute and complete the various projects on hand.
These first steps will lead to the revival of activities of the company. Hence thecompany continues to prepare its Accounts and the Statement of audited financial resultson a going concern' basis of accounting.
Details of this restructuring exercise:
(i) The Company has made the final payment on 4th January 2022 undersettlement agreements entered into with the secured lenders viz Edelweiss AssetReconstruction Company Limited Allium Finance Private Limited and IDBI TrusteeshipServices Limited (acting in its capacity as trustee for and on behalf of the debentureholders of the Company) (jointly "Edelweiss Group"). With the above settlementsall the necessary charges with respect to the Chennai Property were released.
(ii) Completed the transfer for a consideration of Rs. 1417.99 Millions arising fromthe sale of Immovable Property admeasuring 6.58 acres at Porur to M/s. Vidagara Tech ParkPrivate Limited and of its shares for a consideration of Rs.0.70 Millions resulting inloss of control.
(iii) The outstanding loan payable to M/s.Trala Electromech Systems Private Limited wasrestructured into 35500000 fully paid up unlisted secured redeemable Non ConvertibleDebentures having a face value of Rs. 10/-.
(iv) The Company has settled the Remaining Debt outstanding with respect toVisakhapatnam Unit with the Edelweiss Group on 13th April 2022 as full andfinal settlement with release of all claims outstanding against the Company. With theabove Settlements all the necessary charges with respect to the Vizag Unit were released.
(v) Completed the transfer of Vizag Unit/Plant/Undertaking to M/s. Winwin SpecialityInsulators Ltd. on 27th April 2022 for a consideration of Rs. 208.50 Millions.
(vi) After completing the financial restructuring of the Company the Company hasraised funds by way of preferential issue (intimated to the stock exchanges on 30thApril 2022) to strengthen the operating position of the Company to enable participation inemerging opportunities in the infrastructure space and turn key project segments.
(vii) There was a change in management of the Company pursuant to the sale of shares bythe promoter group in April-2022. Pursuant to the Share Purchase Agreement("SPA") dated 30th April 2022 entered into between Mr. C. K.Venkatachalam Mr. C. K. Balasubramanian Mr. S. Anandavadivel Mr. S. Aravindan Mr. S.Nagarajan Mr. K. V. Prakash and Trineva Infra Private Limited ("Acquirers") andthe promoter group and the Share Subscription Agreement (SSA) dated 30th April2022 entered into between the Acquirers Company and the Promoter Group Open Offer wastriggered under Regulations 3 4 & 5 of the Securities and Exchange Board of India(Substantial Acquisition of Shares and Takeovers) Regulations 2011 and the Open Offer wasgiven by the Acquirers to the public shareholders of the Company and carried out otherconsequential actions under the SEBI Regulations. The change in management was effected on10th June 2022 wherein the Mr. C. K. Venkatachalam Mr. Mr. S. Anandavadiveland Mr. S. Nagarajan were inducted into the Board as additional directors and Mr.K. B.Anantharaman Mr. S. Muraleedharan and Mr. K. Rajasekar have resigned from the Board.
The status of various litigations have been disclosed in the notes to thefinancial statements enclosed with this report.
The company does not fall under the "Large Corporate Entity" withreference to SEBI Circular No.SEBI/HO/DDHS/CIR/P/2018/144 dt. 26 11 2018 on "Fundraising by issuance of Debt Securities by Large Entities."
The 925000 Non-convertible Redeemable and Cumulative Preference Shares ofRs.100/- each fully paid up held by Trala Electromech Systems Private Limited. and due forredemption on 30th Sept. 2021 has been extended by the above shareholder for afurther period of 12 months i.e. upto 30th Sept. 2022.
350000 Non-convertible Redeemable and Cumulative Preference Shares of Rs. 100/-each fully paid up held by Vensunar (P) Ltd. and due for redemption on 31stAugust 2021
has been extended by the above shareholder for a further period of 12 months i.e.upto 31st Aug. 2022.
The Board of Directors of the company has decided to drop the proposal fordelisting of equity shares of the company from BSE Limited and hence the existing listingarrangements will continue.
Your Company has an adequate Risk Management Policy which would help inidentifying and mitigating enterprise risks. The ongoing litigation and thenon-availability of capital to revive the operations continue to remain the primaryconcerns for your Company.
Your Company has adequate internal control systems as necessary with therequirements of the Companies Act 2013.
As per the advise letter no. LOD/PREF/JR/FIP/2284/2022-23 dated June 06 2022received from BSE and the postal ballot notice dated 30th April 2022 themembers of the company are informed that in compliance with Regulation 163(1)(i) of SEBI(Issue of Capital and Disclosure Requirements) Regulations 2018 "neither the issueri.e. the company nor any of its promoters or directors is a wilful defaulter or afraudulent borrower".
Plans for the coming years: The Acquirers have assumed the management of theCompany with an intent to develop a state-of-the-art IT / ITES infrastructure in theexisting property of the Company. With the Acquirers having the relevant experience in theexecuting infrastructure projects the Company shall commence execution of projects in theelectrical civil construction and other construction related infrastructure projects.
30. Director's Responsibility Statement
In terms of Section 134 (5) of the Companies Act 2013 the directors wish to statethat:
a. I n the preparation of the annual accounts the applicable accounting standards havebeen followed. In accordance with the notification issued by the Ministry of CorporateAffairs the Company has adopted Indian Accounting Standards (referred to as "IndAS") notified under the Companies (Indian Accounting Standards) Rules 2015 asamended.
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 31stMarch 2022 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.
31. Listing of Shares:
The equity shares of the Company are listed on the National Stock Exchange of IndiaLimited (NSE) and BSE Limited (BSE). The listing fees there against have been paid up todate.
32. Certificate from Practicing Company Secretary:
A Certificate has been received from Mrs. Lakshmmi Subramanian Senior Partner of M/s.Lakshmmi Subramanian& Associates Practising Company Secretary that the Company is incompliance with provisions of Section 164 of the Companies Act 2013. The Certificate ofPracticing Company Secretary is enclosed as Annexure 6 to this report.
33. Green Initiatives:
The Annual Report and other shareholder communications are all available in electronicas well as paper format. We would like to take this opportunity to encourage you toconsider receiving all shareholder communications electronically including future noticesof meeting.
34. Reporting of Fraud
During the year under review neither the statutory auditors nor the secretarialauditors has reported any instances of fraud committed against the Company by its officersor employees as specified under Section 143(12) of Companies Act 2013
Your Directors would like to express their sincere appreciation for the assistance andco-operation received from the financial institution Government authorities otherstakeholders and members during the year under review. Your Directors also wish to placeon record their acknowledgement and gratitude for the commitment shown by the Company'spersonnel who have been functioning under very trying circumstances. Your Directors alsowish to express their appreciation for the erstwhile promoter group that has steered theCompany through difficult times in the last few years and the Company shall strive to takethe rich heritage forward with the same zeal and motivation exhibited by the erstwhilepromoter group.
| || ||For and on behalf of the Board |
|Place : Chennai ||S.Nagarajan ||C.K.Venkatachalam |
|Date : 22nd July 2022 ||Chairman ||Managing Director |