Welcast Steels Limited Ahmedabad
Your Directors take pleasure in submitting the 50th Annual Report and the AuditedAnnual Accounts of Company for the year ended 31 March 2022.
1. FINANCIAL HIGHLIGHT
|Particulars ||Year Ended 31 March 2022 ||Year Ended 31 March 2021 |
|Sale of Products ||8244.23 ||9755.23 |
|Other Operating Revenue ||352.79 ||40.18 |
|Total Revenue from Operations ||8597.02 ||9795.41 |
|Other Income ||72.19 ||45.90 |
|Total Income ||8669.21 ||9841.31 |
|Profit before Finance Costs Depreciation & ||72.07 ||31.10 |
|Amortisation and Tax Expenses || || |
|Finance Costs ||17.58 ||28.32 |
|Depreciation & Amortisation ||108.26 ||142.98 |
|Profit / (Loss) Before Tax ||(53.77) ||(140.20) |
|Less : Tax Expense || || |
|(i) Current Tax ||- ||- |
|(ii) Deferred Tax ||(4.63) ||41.83 |
|Total Tax (i+ii) ||(4.63) ||41.83 |
|Profit after Tax ||(49.14) ||(182.03) |
|Other Comprehensive Income (Net of Tax) ||25.32 ||16.12 |
|Total Comprehensive Income ||(23.80) ||(164.91) |
In view of the loss incurred by the Company during the year under report yourDirectors have not recommended any dividend for the Financial Year 2021-2022.
3. SHARE CAPITAL:
The paid up share capital of the company as on 31 March 2022 is 63.84 lakhs. Duringthe year under review the company has neither issued any shares (including shares withdifferential voting rights) nor granted stock option or sweat equity.
The liquidity position of the Company remained satisfactory. Canara Bank extended theirfull co- operation to the Company. Cash and cash equivalents as at 31 March 2022 were289.60 lakhs. The company continues to focus on judicious management of its workingcapital receivables inventories while other working capital parameters were kept understrict check through continues monitoring.
Capital Expenditure Outlay:
During the year under review the company has incurred Capex of 187.40 lakhs. The Capexis out of internal accruals.
During the year under review the Company has neither accepted nor renewed any depositwithin the meaning of Section 73 of the Companies Act 2013.
Particulars of Loans Guarantees or Investments:
During the year under review Company has not provided any loan or made any investmentcovered under the provisions of Section 186 of the Companies Act 2013.
Internal Financial Control and Audit:
The Company has designed and implemented a process driven framework for proper InternalFinancial Control (IFC) within the meaning of the explanation to Section 134(5) (e) of theAct. For the year ended 31 March 2022 the Board is of the opinion that the Company hassound IFC commensurate with the size scale and complexity of its business operations.The IFC operates effectively and no material weakness exists. The Company has a process inplace to continuously monitor the same and identify gaps if any and implement new and /or improved internal controls whenever the effect of such of gaps would have a materialeffect on the company's operations.
The Board of Directors on the recommendation of the Audit Committee appointed Talati& Talati LLP Chartered Accountants Ahmedabad as internal auditors of the Company forthe Financial Year 2022-23.
Internal Auditors monitor and evaluate the efficacy and adequacy of internal controlsystem of the Company. Significant Audit Observations and Corrective Actions thereon arepresented to the Audit Committee of the Board in its meetings.
Related Party Transactions:
All the Related Party Transactions entered into during the Financial Year were on anArm's Length basis and in the Ordinary Course of Business. There are no materialsignificant Related Party Transactions made by the Company with Promoters Directors KeyManagerial Personnel (KMP) which may have a potential conflict with the interest of theCompany at large.
Prior Omnibus approval of the Audit Committee is obtained on yearly basis for thetransactions which are of a foreseen and repetitive nature. The transactions entered intopursuant to the omnibus approval so granted were placed before the Audit Committee and theBoard of Directors for their approval on quarterly basis. The details of Related PartyTransactions entered by the Company are disclosed in Form AOC-2 as Annexure 'B'.
The Policy on Related Party Transactions as approved by the Board of Directors isuploaded on the website of the Company viz http: // www. welcaststeels.com.
5. HUMAN RESOURCES :
In general the relationship with the employees remained cordial.
6. MATERIAL CHANGES TRANSACTIONS AND COMMITMENTS :
In view of the low sales order position due to impact of Covid -19 the company was notable to utilize its installed capacity at optimum level.
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the close of Financial Year on 31 March 2022 to whichthe financial statements relates and the date of this Report.
7. BUSINESS PROPECTS: a. PRODUCTION:
During the year under review the Company produced 9720 tons of Grinding Media ascompared to 14562 tons in the previous year. The production during the year under reviewsuffered for want of sufficient orders. The COVID-19 impact resulted in all-roundrecession in the market.
b. SALES & PROSPECTS:
The Company sold 9662 tons of Grinding Media during the year under review as against15389 tons in the previous year. The order position in the current year is also notsatisfactory since the demand is yet to pick up due to continuing pandemic effect.
8. FUTURE EXPANSION:
In view of the various uncertainties emerging on account of Covid-19 pandemic thecompany has no immediate plans for any further expansion.
The Company has taken adequate insurance coverage of all its Assets includingInventories against various calamities viz. fire floods earthquake cyclone accidentsetc.
10. INDUSTRIAL RELATIONS:
As reported in the previous year the cases related to disciplinary actions takenagainst some workmen who had indulged in misconduct during and after the illegal labourstrike in November/December 2014 along with the issue of Charter of demands put up by oneof the two Labour Unions in the Company are still pending with the Honorable Labour Court/ High Court. The charter of demand put up by another union is also pending and is undernegotiation. However normal production activities are going smoothly.
11. CORPORATE GOVERNANCE:
In line with the Company's commitment to good Corporate Governance Practices yourCompany has complied with all the mandatory provisions of Corporate Governance asprescribed in Regulations 17 to 27 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ("SEBI LODR Regulations").
A separate Report on Corporate Governance and Practicing Company Secretary'sCertificate thereon is included as a part of the Annual Report.
12. MANAGEMENT DISCUSSION AND ANALYSIS REPORT :
MDA covering details of operations opportunities and threats etc. for the year underreview is given in a separate section included in this Report and forms a part of thisAnnual Report.
13. RISK MANAGEMENT:
The details of Committee and its terms of reference are set out in the CorporateGovernance Report forming part of the Board's Report.
The Company has a robust Risk Management framework to identify evaluate business risksand opportunities. Corporate Risk Evaluation and Management is an ongoing process withinthe Organization. The Company has a well-defined Risk Management framework to identifymonitor and minimizing/mitigating Risks. The Risk Management framework has been developedand approved by the senior management in accordance with the business strategy. The keyelements of the framework include:
Risk Measuring & Monitoring and
The implementation of the framework is supported through criteria for Risk assessmentRisk forms & MIS.
a. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Vigil Mechanism Policy of the Company which also incorporates a whistle blowerpolicy in terms of the Regulations 22 of SEBI LODR Regulations may be accessed on theCompany's website. The company has nominated the Chief Executive Officer as the ChiefVigilance officer. Protected disclosures can be made by a Whistle Blower through e-mail orby anonymous letter addressed to the Chief Executive Officer.
b. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:
The Company has zero tolerance for sexual harassment at work place and has adopted apolicy on prevention prohibition and redressal of sexual harassment at work place in linewith the provisions of sexual harassment of Women at Work place (Prevention Prohibitionand Redressal) Act 2013 and the Rules framed thereunder. During the year under reviewthe Company has not received any complaint in this regard.
c. CODE OF CONDUCT TO REGULATE MONITOR AND REPORT TRADING BY INSIDERS:
In Compliance with the SEBI (Prohibition of Insider Trading) Regulations 2015 theCompany has revised Model Code of Conduct of Insider Trading Regulations from time totime. The Company adopted the Code of Conduct to regulate monitor and report trading byDesignated Person(s) in order to protect the Investor's Interest. The details of the saidCode of Conduct forms part of the Corporate Governance Report.
15. DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP):
a. Board of Directors and KMP:
The Board of Directors of the Company comprises of two Non-Executive and NonIndependent Directors out of which one is a women director and five Independent Directors.All the Independent Directors of the company have furnished declarations that they meetthe criteria of independence as prescribed under the Companies Act 2013 and SEBI LODRregulations.
During the year under review Mr. Vinod Narain (DIN 00058280) passed away on 12February 2022.
Therefore he ceased to be the Chairman cum Director of the Company. The Board in itsmeeting held on 23 May 2022 appointed Mr. D.P. Dhanuka as Chairman of the Company.
Mr.Bhadresh K. Shah Non-Executive and Non-Independent Director of the Company (DIN No0005817) retires by rotation at the ensuing annual general meeting of the Company andbeing eligible offered himself for re appointment.
Mr. Yash Raj Chief Financial Officer retired from the services of the company on 10April 2022 due to superannuation. The Board in its meeting held on 23 May 2022appointed Mr. Viren K. Thakkar as Chief Financial Officer of the company.
Considering the integrity expertise and experience (including the proficiency) theBoard of Directors recommends the reappointment of Mr. Bhadresh K Shah (DIN 00058177) NonExecutive and Non - Independent Director of the Company retires by rotation at the ensuingannual general meeting of the Company and being eligible offered himself forreappointment.
As required under SEBI LODR regulations amended from time to time the information onthe particulars of the Director proposed for re appointment has been given in the noticeof the Annual General Meeting.
During the year under review Four Board Meetings and Four Audit Committee meetingswere convened and held. The composition of Audit Committee is as under: -Mr. D.P DhanukaChairman Mr. Bhadresh K. Shah Member Mr. Pradip R. Shah Member Mr. Ashok A. NichaniMember Mr. Rajendra S. Shah Member Mr. Sanjay S. Majmudar Member
All recommendations made by the Audit Committee during the year were accepted by theBoard. The details of Composition of other Committees and dates of the meetings are givenin the Corporate Governance Report. The intervening gap between the meetings was withinthe period prescribed under the Companies Act 2013 and SEBI LODR Regulations.
c. Committees of the Board Directors:
In compliance with the requirement of applicable laws and as part of the bestgovernance practice the Company has following committees of the Board as on 31 March2022.
i) Audit Committee.
ii) Stakeholders Relationship Committee
iii) Nomination and Remuneration Committee
iv) Risk Management Committee.
The details with respect to the aforesaid committees are given in the CorporateGovernance report.
d. Board Evaluation:
Pursuant to the provisions of the Companies Act 2013 and SEBI LODR Regulations theBoard has carried out an evaluation of its own the Directors individually as well as theevaluation of the workings of its committees. A structured questionnaire was preparedafter taking into consideration of the various aspects of the Board's functioningcomposition of the Board and its Committees culture execution and performance ofspecific duties obligations and governance.
The performance evaluation of the Independent Directors was carried out by the Board.The performance evaluation of the Chairman and the Non Independent Directors was carriedout by the Independent Directors. The Board of Directors expressed their satisfaction withthe evaluation process.
e. Familiarization Programme for Independent Directors:
The Independent Directors have been updated with their roles rights andresponsibilities in the Company by specifying them in their appointment letter along withnecessary documents reports and internal policies to enable them to familiarize with theCompany's procedures and practices. The Company has through presentations at regularintervals familiarized and updated the Independent Directors with the strategyoperations and functions of the Company and Engineering Industry as a whole. The detailsof such familiarization programmes for Independent Directors are posted on the website ofthe Company and can be accessed at: http://www.welcaststeels.com/newsite/CorporateGovernance.html .
f. Nomination and Remuneration Policy:
The Board has on the recommendation of Nomination & Remuneration Committee frameda policy for selection and appointment of Directors Senior Management Personnel and theirremuneration. The Nomination & Remuneration Policy is stated in the CorporateGovernance Report which is part of the Board's Report. The detailed policy is placed onthe Investor Section of the Company's website www.welcaststeels.com.
g. Directors' Responsibility Statement:
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofclause (C) of Sub-Section (3) of Section 134 of the Companies Act 2013 which states that:
a. In the preparation of the Annual Accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures.
b. The Directors have selected such accounting policies and applied them consistentlyand made judgement 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 the Financial Year and ofthe Loss of the Company for that year.
c. Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 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 have laid down Internal Financial Controls to be followed by theCompany and that such Internal Financial Controls are adequate and were operatingeffectively and
f. The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Ganapathraj & Co Chartered Accountants (Firm registration no 0008468) theStatutory Auditors of the Company will hold the office till the conclusion of the 50thAnnual General Meeting of the Company. Due to their pre engagement they expressed theirinability to continue to hold the office for the second term of five years. The Board ofDirectors in their meeting held on 23 May 2022 on the recommendation of Audit Committeehas appointed Dagliya & Co. Chartered Accountants (Firm registration no 00671S) asStatutory Auditors of the Company for a period five years subject to the approval ofmembers in 50th Annual General Meeting. If appointed in AGM they will hold office forfive consecutive years from the conclusion of ensuing Annual General Meeting till theconclusion of 55th Annual General Meeting.
The Company has received a certificate from the auditors to the effect that theappointment if made will be in accordance with the limits specified in Section 139 (1)of the Companies Act 2013 and they are not disqualified for re-appointment within themeaning of the Section 141 of the said Act and rules framed thereunder.
As required under Regulation 17 of SEBI LODR Regulations. the Auditors have alsoconfirmed that they hold a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India.
The Cost Auditors have filed the cost audit report for the Financial Year ended 31stMarch 2021 within stipulated time frame.
The Board of Directors on the recommendation of the Audit Committee has appointed KiranJ. Mehta & Co. Cost Accountants Ahmedabad as the Cost Auditors of the Company toaudit the cost accounting records of the Company for the Financial Year 2022-2023. Asrequired under the Companies Act 2013 the remuneration payable to the Cost Auditors isrequired to be placed before the members of the Company for their ratification at theensuing Annual General Meeting. Accordingly a resolution seeking members' ratification ofthe remuneration payable to Kiran J. Mehta & Co. Cost Accountants Ahmedabad isincluded in the Notice convening the 50th Annual General Meeting.
Pursuant to the provisions of Section 204 of the Companies Act2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. Tushar M. Vora Practicing Company Secretary (ACS-3459 CP No.1745)Ahmedabad to conduct Secretarial Audit of the Company's Secretarial and related recordsfor the year ended 31 March 2022.
The Report on the Secretarial Audit for the year ended 31 March 2022 is annexedherewith as Annexure 'C' to this Board's Report. There are no qualification/observationsin the Report.
17. PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS AND OUTGO:
The additional information regarding conservation of energy technology absorption andforeign exchange earnings and outgo stipulated under Section 134 (3)(m) of the CompaniesAct 2013 read with the Rule 8 of the Companies (Accounts) Rules 2014 is provided as anAnnexure A to this report.
18. FINANCIAL STATEMENTS:
The Financial statements of the Company prepared in accordance with relevant IndianAccounting Standards (Ind AS) issued by the Ministry of Corporate Affairs form part ofthis Annual Report.
19. AUDITORS' REPORT AND NOTES ON ACCOUNTS:
The Board has duly reviewed the Statutory Auditors' Report for the Financial Year ended31 March 2022. There are no qualifications/observations in the Report.
20. ANNUAL RETURN:
In accordance with the provisions of Section 92(3) of the Act Annual Return of theCompany as on 31 March 2022 is hosted on website of the Company athttp://www.welcaststeels.com/newsite/Fiancial%20 Reports/202122R.pdf
21. PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 of Companies Act2013 read with Rule 5of the Companies (Appointment & Remuneration of Managerial Personnel) Rules2014 inrespect of employees of the Company is annexed as Annexure 'D'. The statement containingparticulars of employees as required under Section 197(12) of the Companies Act read withRule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is provided in a separate Annexure forming part of this Report. Further theReport and the Accounts are being sent to members excluding aforesaid annexure in terms ofSection 136 of the Act. The said Annexure is open for inspection at the registered officeof the Company. Any shareholder interested in obtaining the copy of the same may write tothe Company Secretary.
22. ENVIRONMENT HEALTH AND SAFETY:
The Company is committed to health and safety of its employees contractors andvisitors. The Company is compliant with all Environment Health and Safety (EHS)Regulations stipulated under the Water (Prevention and Control of Pollution) Act the Air(Prevention and Control of Pollution) Act the Environment Protection Act and theFactories Act and Rules made thereunder. Our mandate is to go beyond compliance and wehave made a considerable improvement.
23. SECRETARIAL STANDARDS:
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Meetings of the Board of Directors and General Meetings.
Your Directors would like to express their appreciation for the assistance andco-operation received from the Company's Customers Vendors Bankers Auditors Investorsand Government bodies during the year under review. Your Directors place on record theirappreciation of the contribution made by employees at all levels.
| ||For and on behalf of the Board of Directors |
| ||D.P. Dhanuka |
|Place: Bengaluru ||Chairman |
|Date : 23 May 2022 ||(DIN 00168198) |