Walchandnagar Industries Ltd.
|BSE: 507410||Sector: Engineering|
|NSE: WALCHANNAG||ISIN Code: INE711A01022|
|BSE 00:00 | 23 Apr||97.20||
|NSE 00:00 | 23 Apr||97.35||
|Mkt Cap.(Rs cr)||370|
|Mkt Cap.(Rs cr)||369.85|
Walchandnagar Industries Ltd. (WALCHANNAG) - Director Report
Company director report
The Members of
Walchandnagar Industries Limited
Your directors take pleasure in presenting the 109th Annual Report on thebusiness and operations of your Company together with Audited Accounts for the year endedMarch 312018.
1. Financial Results
The Company's financial performance for the Year ended March 312018 is summarizedbelow:
Indian Accounting Standards:
The Financial Statements for the year 2017-18 have been prepared in compliance with thenew set of Indian Accounting Standards (IND AS) and the comparatives for the correspondingprevious year 2016-17 have been restated under IND AS for making items comparable.
The Ministry of Corporate Affairs ('MCAO vide its notification in the official gazettedated 16th February 2015 has made applicable the Indian Accounting Standards('Ind ASO to certain classes of companies. For the Company Ind AS was applicable from 1stApril 2017 with a transition date of 1st April 2016. The financial resultshave been prepared in accordance with the recognition and measurement principles laid downunder Ind AS as presented under Section 133 of the Companies Act 2013 ('the Act1)read with the relevant rules issued thereunder and the other accounting principlesgenerally accepted in India as applicable.
2. Financial Performance & Highlights:
During the year under review the revenue for the financial year 2017-18 was Rs. 40730lakhs as against the previous financial year 2016-17 of Rs. 40144 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 2018 were at Rs. 803 crores as compared to Rs. 844crores as on March 312017.
4. Exports and Overseas Projects:
During the year under review the Company achieved an export turnover of Rs. 30 Croresas against Rs. 38 Crores in the previous year. The export orders on hand as on March312018areat Rs. 324 crores.
5. Dividend and Reserves:
During the Year under review your Company has suffered a (loss) after tax of Rs.(2582) lakhs. Flence no dividend is recommended for the Year ending March 31 2018 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 2018 your Company do not have any Subsidiary Joint Venture orAssociate Company. During the year under review none of the Companies have become orceased to be Company's Subsidiaries Joint Ventures and Associate Company.
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 to thisreport.
9. Finance & Accounts:
(i) Fixed Deposits:
Your Company did not invite or accept deposits from the public during the Financialyear under review.
(ii) Income Tax Assessments:
Income tax assessment up to the Assessment Year 2015-16 has been completed. FloweverCompany has preferred appeal before Commissioner of Income Tax (Appeals) for theAssessment Year 2015-16.
10. Human Resources Development:
The role of human resources has gradually evolved from a Support Function to aStrategic Business Partner for reaching the Organization Goal of Prosperity. During theFinancial Year 2017-18 the FIR Department initiated the process of JD's and OnlineAppraisal System followed with systematic approach reward mechanism. Through the RobustRecruitment System to attract the best talent from the preferred Industries we are tryingto make Walchandnagar Industries Limited as one of the best organization to work with.
The true focus of Fluman Resources Management is motivating bringing in Best FIRPractices & retaining the best talent in the 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 2018 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 312018.
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. YourCompany has obtained a certification from M/s. Jayesh Sanghrajka & Co. LLP CharteredAccountants Statutory Auditors on compliance with Regulation 34 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 read with Schedule V of thelisting Regulation. The Report of Corporate Governance along with Certificate from theauditors of the Company regarding compliance of conditions of corporate governance isenclosed by way of Annexure - C to this Report.
13. Corporate Social Responsibility:
The Companies Act 2013 mandates that every Company who meet certain eligibilitycriteria needsto spend in every financial year at least 2% of its average net profit ofthe Company made during the three immediately preceding financial Years. In view oflosses statutorily no amount is required to be spent by the Company. Flowever 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 amedical check up which includes General Health check up for 719 workmen and Flazardoustest for 211 workmen working on hazardous process and non- hazardous process with the helpof certified surgeon.
Our Company Hospital (LFIMC) have been registered as a primary health center underESIS. These medical services will be beneficial to insured persons and their familymembers at Walchandnagar and surrounding villages. Linder this scheme employees can availall medical benefits provided by ESIC Corporation in our township.
The schools established by the Company continued to impart education up to HigherSecondary grade to children
staying in Walchandnagar and in nearby villages. The Company currently provideseducation to 3877 children of which 29% are children of employees of the company and 71 %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:
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.
The Shareholders of the Company at its Annual General Meeting held on 9thAugust 2017 have approved Re-appointment of Mr. Dilip J. Thakkar (DIN: 00007339) asIndependent Directorfor second term of Five Years till the Conclusion of Annual GeneralMeeting to be held in the year 2022 as recommended by the Nomination & RemunerationCommittee / Board in their meeting held on May 26 2017.
b) Retirement by rotation:
Pursuant to Article 86 of the Articles of Association of the Company and Section 152 ofthe Companies Act 2013 Mr. Chirag C. Doshi is due to retire by rotation at the 109thAnnual 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
During the year no changes took place in the Key Managerial Personnel of the company.The shareholders of the company at its Annual General Meeting held on 9thAugust 2017 Re- appointed Mr. G.K. Pillai Managing Director & CEO (DIN : 01537184)and Mr. Chirag C. Doshi Managing Director (DIN : 00181291) for a further periodofthreeyears w.e.f. 1stApril2017
17. Number of Meetings of the Board:
The Board met four (4) times during the year from April 01 2017 to March 312018 viz.on May 262017; September 13 2017; November 282017 and February 13 2018.
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 Independent Directorsi.e. Dr. Anil Kakodkar (Chairman of Committee) and Mr. Dilip J. Thakkar (Member) andChairman 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) andChief Internal Auditor Mr. Anil Vasant Gabhe (Member).
Nomination & Remuneration Committee which comprises of three IndependentDirectors Mr. G. N. Bajpai (Chairman of Committee) Mr. Dilip J. Thakkar (Member) and Dr.Anil Kakodkar (Member) and Chairman Mr. Chakor L. Doshi (Member);
Finance 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);
Corporate Social Responsibility Committee which comprises of an IndependentDirector Mrs. Bhavna Doshi (Chairperson of Committee) Managing Director & C.E.O.Mr. G. K. Pillai (Member) and Managing Director Mr. Chirag C. Doshi (Member);
Committee of Independent Directors which comprises of Mr. Dilip J. Thakkar Dr.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. DilipJ. Thakkar (Chairman of Committee) and Mr. G. N. Bajpai (Member) and Chairman Mr. ChakorL. 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.Independent Directors Meeting and Nomination and Remuneration Committee considered theperformance of Independent/Non-Independent Directors and the Committees and Board aswhole reviewed the performance of the Chairman of the Company taking into account theviews of Executive Directors and Non-Executive Directors and assessed the qualityquantity and timeliness of flow of information between the Company Management and theBoard.
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 46 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 frameworkin 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 Non- Executive 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 Directoratany 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 thatthe remuneration is reasonable and sufficientto 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 142015 whereinall material Risks faced by the Company were identified and assessed. For each of therisks identified corresponding controls were assessed and policies and procedures wereput 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 Registrarand ShareTransfer Agents have connectivity with NationalSecurities Depository Ltd. & Central Depository Services (India) Ltd. The ISIN isINE711A01022. As on March 31 2018 total dematerialized equity shares are 37299841representing 97.98%.
28. Company's Website:
The Company has its website namely www.walchand .com. The website provides detailed information about the business activity locations ofits offices. The Quarterly Results Annual Reports and Shareholding patterns all othercommunication with the Stock Exchanges and various policies are placed on the website ofthe Company and the same are updated periodically.
29. Means of Communication:
30. Auditors And Auditor's Report:
M/s. Jayesh Sanghrajka & Co. LLP Chartered Accountants Mumbai was appointed in108th Annual General Meeting (AGM) as the Statutory Auditors of the Company tohold office from the conclusion of 108th AGM until the conclusion of the 113thAGM. Flowever pursuant to Companies Amendment Act 2017 Annual Ratification ofAppointment of Auditors is not required.
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 Cost Auditorsfor conducting Cost Audit in respect of products manufactured by the Company which arecovered under the Cost Audit Rules for current financial year ending March 2019. They werealso the cost auditors for the previous Year ended March 2018. As required by Section 148of the Companies Act 2013 necessary resolution has been included in the Notice conveningthe Annual General Meeting seeking ratification by the Members to the remunerationproposed to be paid to the Cost Auditors for the financial year ending March 2019.
The Cost Audit Reports for the financial year ended March 2018 will be filed withinthe stipulated time i.e. on or before September 302018.
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 2017 to March 31 2018. The Secretarial AuditReport for the year ended March 31 2018 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 2018-19 also.
REPORTING OF FRAUDS BY AUDITORS
During the year under review neither the Statutory Auditors Secretarial Auditor northe Cost Auditor has reported to the audit Committee under Section 143 (12) of theCompanies Act 2013 any instances of fraud committed against the Company by its officersor employees the details of which needs to be mentioned in the Board's Report.
31. Particulars of Loans Guarantees or Investments by Company:
33. Familiarization Programme For Independent Directors
To provide insights into the Company and to enable the Independent Directors tounderstand the Company's business in depth which would facilitate their activeparticipation in managing the Company the Company arranges Familiarization Programme forIndependent Directors. The details of such familiarization programmes for IndependentDirectors are posted on the website of the Company viz.
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 Flarassment of Women at Workplace (Prevention Prohibitionand Redressal) 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.
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 Notes to the Financial Statement).
32. Secretarial Standards:
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto 'Meetings of the Board of Directors' and 'General Meetings' respectively have beenduly followed by the Company.
3Walchand Terraces Tardeo Road
For & on behalf of the Board of Directors
Chakor L. Doshi