Your Directors hereby present the Fifty Seventh Annual Report and the Audited FinancialStatements of the Company for the Financial Year ended 31st March 2020. Thesalient highlights (in the Ind AS format) are provided in the table below:
(Rs. in Million)
| || |
For the period ended
| ||31st March 2020 ||31st March 2019 |
|Sales and other operational income ||2.08 ||3.26 |
|Other Income ||- ||93.42 |
|Total Income ||2.08 ||96.68 |
|Gross Profit / (Loss) from continuing Operations ||(7.42) ||83.79 |
|Less : Depreciation ||42.11 ||92.25 |
|Interest /Finance Charges ||(0.02) ||48.66 |
|Net Profit / (Loss) for the year from continuing operations ||(49.51) ||(57.12) |
|Provision /(withdrawal) for Income Tax / Deferred Tax ||- ||- |
|Net Profit /(Loss) for the year after Tax from continuing operations ||(49.51) ||(57.12) |
|Net Profit/(Loss) for the year after Tax from discontinued operations ||(556.45) ||(2184.34) |
|Net Profit/(Loss) for the year after Tax ||(605.96) ||(2241.46) |
|Profit / (Loss) brought forward from the previous year ||(4347.16) ||(2105.70) |
|Other Comprehensive Income/(Loss) arising from discontinued operations ||- ||- |
|Surplus/(Deficit)/ carried to Balance Sheet ||(4953.12) ||(4347.16) |
The lockdown and restriction of activities due to Covid-19 did not have any significantimpact on the Company's overall performance (and that of it's subsidiaries) during theperiod under review but has impacted our functioning with shutdown of our office. Due tothe efforts on the resolution plan is getting delayed. We will be able to get a betterclarity only after the lockdown is lifted and reasonable normalcy is restored.
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. 14.36 million in insulator business unit. Theturnkey project business unit generated sale of Rs. 2.08 million.
The major elements of loss arising from discontinued operations are:
1. Input Tax Credit reversal on the inventory write off -Raw Materials & Stores andSpares of Rs.2.99 millions.
2. Loss on asset discarded of Rs.2.95 millions.
3. Inventories Written Off comprising of Raw Materials Stores and SparesWork-in-progress Finished Goods (Chennai and Vizag Unit) of Rs.11.44 millions.
4. Capital Work in Progress Written Off (Vizag Unit) of Rs.7.04 millions
5. Impairment of Assets (Vizag Unit) of Rs.457.00 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 2020 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 2020was 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.
Since the Company has suffered losses no transfer to reserve is provided for.
6. 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.
7. Transfer of unpaid Dividend to Investor Education and Protection Fund
In terms of Investor Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Amendment Rules 2017 there is no obligation to transfer the unpaid/unclaimed shares to the Investor Education and Protection Fund.
8. Fixed Deposits
Your Company has not accepted any deposits from public in terms of provisions of
Companies 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 W.S. T&D Limited (subsidiary upto 9th June 2019) Vidagara Tech ParkPrivate Limited (wholly owned subsidiary) and WS Insulators Private Limited (wholly ownedsubsidiary with effect from 14th November 2019).
Your Company has in accordance with Section 129 (3) of the Companies Act 2013 preparedthe Consolidated Financial Statements for the Financial Year ended 31st March2020 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 consolidated andstandalone financial statements are available on our websitewww.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.
12. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo
Since production activity was suspended in both the plants we are unable to report onthe particulars 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 andtechnology absorption.
Foreign Exchange Earnings:
Foreign Exchange Inward NIL Foreign Exchange Outward NIL
13. Extract of Annual Return
As provided under section 92 (3) of the Companies Act 2013 read with Rule 12 of theCompanies (Management and Administration) Rules 2014 the extract of Annual Return of theCompany is annexed herewith as Annexure 4 in the prescribed Form MGT 9 which forms part ofthis Report.
14. Material changes and commitment affecting financial position between the Financial
Year ended 31st March 2020 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 in our case.
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.
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)
Mr.K.Rajasekar had been appointed as an Manager with the designation of (PresidentCorporate Affairs) by the Board in their meeting dated 14th September 2019 for a period ofthree years effective from 14th September 2019. Subsequently the same has beenapproved by the shareholders through postal ballot notice dated 29th January2020 and the results have been declared on 9th March 2020.
Mr.K.B.Anantharaman and Mr.S.Muraleedharan has been appointed as Additional Directorson Board of Directors of the company on 5th August 2020 through circularresolution on the recommendation of Nomination and Remuneration Committee and are eligiblefor being appointed as Director of the Company subject to the approval of the members ofthe Company in the ensuing Annual General Meeting to be held on 30th September 2020. Noemployee draws remuneration in excess of the limits prescribed under Rule 5(2) of Chapter
XIII the Companies (Appointment and Remuneration of Managerial Personnel Rules
2014. Remuneration drawn by KMP have been disclosed in Annexure-4 to Board's report.
Therefore details pertaining to Rule 5 of the Companies (Appointment and Remunerationof
Managerial Personnel) Rules 2014 have not been provided.
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.
21. Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations and
Disclosure Requirements) Regulations 2015 the necessary performance evaluation hasbeen carried out.
22. Meetings of the Board
The details of the number of meetings of the Board held during the Financial Year 2019-20 along with attendance details of each director forms part of the Corporate GovernanceReport 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.
M/s. S B S B and Associates Chartered Accountants Chennai (Firm Registration
No.012192S) were appointed as Statutory Auditors of the Company for a period of fiveyears from the Conclusion of 54thAnnual General Meeting till the conclusion of59th Annual General Meeting.
With reference to the Auditor's Report issued by S B S B and Associates CharteredAccountants the explanation/comments against their qualified opinion is annexed herewithas "Annexure 5"
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) PartnerM/s.Lakshmmi Subramanian & Associates was appointed as the Secretarial Auditor toconduct the Secretarial Audit of the Company for the Financial Year 2019-20. The Report ofthe Secretarial Auditor is enclosed as Annexure 6 to this Report.
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.
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.
Due to mounting losses lack of working capital and other support company continues tokeep suspended manufacturing operations at Vizag plant and close manufacturing operationat Chennai plant.
Chennai Insulator division (12 months) and Visakhapatnam Insulator division (w.e.f.01.10.2019 -6 months) are both being considered as "Discontinued Operations".Turnkey Project Business Segment is being considered as "Continuing Operations".Hence previous period figures in the financial statements are not comparable.
i) The Company is evaluating various steps in connection with the re-vitalization andlong-term stability and growth of its Turnkey Project Business Unit.
ii) This includes the expansion of competency and scope in provision of integratedprojection solutions.
The Company has salvaged whatever documents and records that could be retrieved fromthe damage caused during the last bout of rains and floods within the limited financialand man power resources available.
Pursuant to approval of Shareholders through Postal Ballot Notice dated 26thApril 2019 and the result dated 8th June 2019 sale of 50100 equity shares ofRs.10/- held by the company in - W.S. T&D Limited was completed.
The company has additionally subscribed to 30000 Equity Shares of Rs.10/- each in theSubsidiary viz. Vidagara Tech Park Private Limited. No Business Activity was carried onduring the year.
During the period under review the company has subscribed to 50000 Equity Shares ofRs.10/- each fully paid up in its wholly owned subsidiary viz. WS Insulators PrivateLimited. Since it is the first year of operations after incorporation on 14th November2019 there were no activities and consequently no income during the year.
With reference to the trespass in part of the Chennai factory premises the Hon'bleSupreme Court has upheld the ownership rights of the Company by setting aside the order ofthe DRO dated 28.12.2015 and consequent litigations. Consequential steps have been takenwith the appropriate authorities accordingly.
The status of various litigations have been disclosed in the notes to the financialstatements enclosed with this report.
The Company is in discussions with the lenders namely Allium Finance Private LimitedIDBI Trusteeship Services Limited and Edelweiss Asset Reconstruction Company Limited tofind a resolution to the outstanding loan liabilities and them and arising from thenon-completion of the settlement agreements signed with them on 12th April2018.
During the period under review LoA was renewed for 3rd Block Period of 5 years from 09thJuly 2019 to 08th July 2024 for the Visakhapatnam SEZ Plant in accordance withRule 80 of the SEZ Rules 2006 as amended.
The company does not fall under the "Large Corporate Entity" with referenceto SEBI Circular No.SEBI/HO/DDHS/CIR/P/2018/144 dt. 26 11 2018 on "Fund raising byissuance of Debt Securities by Large Entities."
The 925000 Non-convertible Redeemable and cumulative Preference Shares subscribed byVensunar Holdings (P) Ltd. and due for redemption on 30th Sept. 2019 has beenextended for a further period of 12 months i.e. upto 30th Sept. 2020.
350000 Non-convertible Redeemable and cumulative Preference Shares Rs. 100/- eachfully paid up with a coupon rate of 10% subscribed by Vensunar (P) Ltd. which are due forredemption on 28th Feb. 2019 has been extended by the above shareholder for afurther period of 18 months i.e. upto 31st Aug. 2020.
Your Company has an adequate Risk Management Policy which would help in identifying andmitigating enterprise risks. The ongoing litigation and the non-availability of capital torevive the operations continue to remain the primary concerns for your Company.
Your Company has adequate internal control systems as necessary with the requirementsof the Companies Act 2013.
30. 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. 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 witheffect from April 1 2017.
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 2020 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 fee for the Financial Year 2020- 21 hasalready been paid to the credit of both the Stock Exchanges.
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 based on the relianceon an opinion from an expert in this regard. The Certificate of Practicing Company
Secretary is enclosed as Annexure 7 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.
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.