Your Directors hereby present the Fifty Fourth Annual Report and the Audited FinancialStatements of the Company for the Financial Year ended 31st March 2017. Thesalient highlights are provided in the table below:
(Rs. in Million)
| ||For the period ended |
| ||31st March 2017 ||31st March 2016 |
|Sales and other operational income ||23.80 ||44.09 |
|Other Income ||488.35 ||7.00 |
|Total Income ||512.15 ||51.09 |
|Gross Profit / (Loss) from Operations ||99.97 ||(290.28) |
|Less : Depreciation ||93.55 ||115.78 |
|Interest /Finance Charges ||36.60 ||12.93 |
|Net Profit / (Loss) for the year ||(30.18) ||(418.99) |
|Tax Expenses : Current Tax and Deferred Tax || || |
|Net Profit /(Loss) for the year after Tax ||(30.18) ||(418.99) |
|Profit / (Loss) brought forward from the previous year ||(2393.01) ||(1974.01) |
|Surplus/(Deficit)/ carried to Balance Sheet ||(2423.19) ||(2393.01) |
1. Results of our operations
During the year under review production was suspended in the Chennai and Vizag plants.The Turnkey Projects business unit generated sales of Rs. 13.74 million and the salesrelating to the Insulator Business was Rs. 10.06 million.
Under the "Other income" heading above amount of Rs. 421.72 million relatesto the change in the status of W.S. Electric Ltd. being no longer a subsidiary during theyear due to fresh infusion of equity in addition to acquisition of 49.954% shareholdingnot held by W.S. T&D Ltd.
No dividend has been proposed on the Equity shares due to loss.
The Directors also regret their inability to recommend any payment of contracteddividend on Preference Share Capital.
Since the Company has suffered losses no transfer to reserve is provided for.
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. Transfer of unpaid Dividend to Investor Education and Protection Fund
During the year your Company has transferred Rs. 339133/- to the Investor Educationand Protection Fund. These amounts were lying unclaimed/ unpaid with the Company for aperiod seven years after declaration of Dividend for the Financial Year ended 2009.
6. Fixed Deposits
Your Company has not accepted any deposits from public in terms of provisions ofCompanies Act 2013.
7. 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 (100% subsidiary) and W.S.Electric Limited (StepSubsidiary). During the year as indicated above there was a change in the status ofW.S.Electric Ltd being no longer a subsidiary as on 29th December 2016.
Your Company has in accordance with Section 129 (3) of the Companies Act 2013 preparedthe Consolidated Financial Statements for the Financial Year ended 31st March2017 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 website www.wsindustries.in/KYC.
9. 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 disclosed in form AOC-2 as Annexure3 and form part of this Annual Report.
The policy on related party transactions is available in the Company's website.
10. 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
11. 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 9 whichforms part of this Report.
12. Material changes and commitment affecting financial position between the FinancialYear ended 31st March 2017 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.
13. Risk Management Policy
The Board had established a Risk Management Policy which formalizes the Company'sapproach to overview and manage material business risks.
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 internal financial controls with respect to financial reporting.
16. Directors and Key Managerial Personnel (KMP)
Mr.Jayaraman Sridharan was appointed as an Additional Director Non ExecutiveIndependent Director of the Company by the Board of Directors on 21st August2017 whose term of office expires at this AGM. The Company has received a Notice from aMember along with the deposit of the requisite amount for appointment as IndependentDirector and the same is being placed before the Annual General Meeting for approval ofthe shareholders. A brief profile of Mr.Jayaraman Sridharan is provided under theCorporate Governance Report and in the Notice of the Annual General Meeting.
Mr.V.Srinivasan erstwhile Chairman and Director of the Company passed away on 25thJuly 2017. The Board places on record the invaluable contribution of Mr.V.Srinivasan asone of the founders of the Company and his able direction and stewardship.
Mr.R.Karthik has been appointed as an Additional Director and at the Annual GeneralMeeting held on 28th December 2016 shareholders appointed him as an IndependentDirector of the Company for a term of 5 years.
Mrs. Hema Pasupatheeswaran resigned as Company Secretary on 31st August2016.
Mr. B. Swaminathan designated as Compliance Officer of the Company.
Mr. B. Swaminathan is Chief Financial Officer of the Company.
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 of ManagerialPersonnel) Rules 2014 have not been provided.
17. Declaration by Independent Directors:
The Company has received necessary declarations from each Independent Director underSection 149(7) of the Companies Act 2013 that he meets the criteria of Independence laiddown in and Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
18. Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Boards' performance and performance of theNon-independent Director were considered/evaluated by the independent directors at theirmeeting without the participation of the non-independent director and key managerialpersonnel. The Board has carried out an annual appropriate evaluation of its ownperformance the directors individually as well as the evaluation of the working of itsvarious committees.
19. Meetings of the Board
The details of the number of meetings of the Board held during the Financial Year2016-17 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.
M/s.S.Viswanathan LLP Chartered Accountants retire at this Annual General Meeting andsince their term comes to an end under the Companies Act 2013 the Board of Directors atits meeting held on 30th May 2017 have recommended appointment of M/s.S B S Band Associates Chartered Accountants as the Statutory Auditors of the Company in theplace of M/s.S.Viswanathan LLP Chartered Accountants existing Statutory Auditors of theCompany subject to the approval of the shareholders. In terms of provisions of section 139of the Companies Act 2013 M/s. S B S B and Associates 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 M/s.S.Viswanathan LLP CharteredAccountants the explanation/comments against each Disclaimer of opinion and Emphasis ofmatter is annexed herewith as "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 2016-17. The Report ofthe Secretarial Auditor is enclosed as Annexure 6 to this Report.
The Company is in the process of implementing settlements with the surplus workers /executives both at Chennai and Vizag plants.
The Company has in accordance with the generally accepted accounting practicedisclosed the impact of pending litigations on its financial position in its financialstatements.
23. Sexual Harassment of Women at Workplace (Prevention Prohibition & Redressal)Act 2013
During the year under review there were no complaints under this Act.
24. Management Discussion and Analysis Report.
The difficulties faced by the Company in recent past have been primarily caused bysteep rise in the price of raw material coupled with reduction in sales volume highercompetition in the industry dumping by foreign competitors and economic slowdown whichall resulted in a liquidity crunch.
Due to financial distress your Company has not been able to keep obligations inrespect of Banks/Financial institutions/ NCD holders.
Due to mounting losses lack of working capital and other support activities have beensharply reduced and company had suspended manufacturing operations at both plants.
As reported last year trespass had taken place in part of the premises of the factoryat Chennai.
Attention is drawn to Note No.40 of Financial Statements about this matter andpotential loss of material arising there of which can be quantified only after properassessment which could not be done so far because of labour unrest and such trespass whichhas prevented company officials from entering parts of the premises. The Company ispursuing all actions to vigorously protect its property (within the constraints faced)including taking legal action in the appropriate courts.
The Company is continuing the discussion with the current lenders to negotiate and findsuitable solutions to protect all interests and take all actions required for the same.
Your Company has an adequate Risk Management Policy which would help in identifying andmitigating enterprise risks. The increasing litigation and the non-availability of workingcapital continue to remain the imminent concerns for your Company.
Your Company has adequate internal control systems as necessary with the requirementsof the Companies Act 2013.
25. 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 accountingstandards have been followed. b. The directors have selected such accounting policies andapplied them consistently and made judgments and estimates that were reasonable andprudent so as to give a true and fair view of the state of affairs of the Company for thefinancial year ended 31st March 2017 and of the profit or loss of the Companyfor the period under review. c. The directors have taken proper and sufficient care forthe maintenance of adequate accounting records in accordance with the provisions of thisAct for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities. d. The directors have prepared the annual accounts on a goingconcern 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 haddevised proper system to ensure compliance with the provisions of all applicable laws andthat such system were adequate and operating effectively taking into consideration thecurrent circumstances.
26. 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 2017- 18 hasalready been paid to the credit of both the Stock Exchanges.
Your Directors would like to express their sincere appreciation for the assistance andcooperation 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 |
|Chennai ||R. Karthik ||K.Rajasekar |
|3rd October 2017 ||Director ||Director |