The performance highlights for Production Sales Profit and Earnings per Share (EPS)as compared to previous years are given hereunder.
Your Directors take pleasure in submitting the 48th Annual Report and theAudited Annual Accounts of Company for the year ended 31st March 2020. ' InLakhs
1. FINANCIAL HIGHLIGHT:
|PARTICULARS ||Year ended 31st March 2020 ||Year ended 31st March 2019 |
|Revenue from Operations ||15001.54 ||26961.65 |
|Other Income ||81.31 ||50.43 |
|Total Revenue ||15082.85 ||27012.08 |
|Profit before Finance Cost Depreciation & Amortization and Tax Expenses. ||162.91 ||397.92 |
|Finance Cost ||34.43 ||35.66 |
|Depreciation & Amortization ||133.54 ||84.12 |
|Profit Before tax ||(5.06) ||278.14 |
|i) Provision for Taxation (Current) ||- ||63.00 |
|ii) Taxes for earlier years ||(5.27) ||(4.98) |
|iii) Provision for Taxation ( Deferred) ||26.50 ||36.22 |
|Total Tax (i+ii+iii) ||21.23 ||94.24 |
|Profit/(Loss) after Tax ||(26.29) ||183.90 |
|Other Comprehensive Income ||(13.93) ||3.61 |
|Total Comprehensive Income / (Expenses) ||(40.22) ||187.51 |
During the year under review the Company produced 23317 tons of Grinding Media ascompared to 40097 tons in the previous year. The production during the year had to becurtailed for want of sufficient orders due to recession in the international market. Theproduction in the current Financial Year 2020-21 is going to suffer badly due to COVID-19effect.
3. SALES & PROSPECTS:
The Company sold 22573 tons of Grinding Media during the year under review as against40143 tons in the previous year.
The demand for grinding media had declined during the year due to recession in themining industry abroad resulting in drop in sales.
The prospects in the current year are also not encouraging due to COVID-19 effect.
4. DIVIDEND& RESERVES:
In view of the loss incurred by the Company during the year under report yourdirectors have not recommended any dividend forthe Financial Year2019-2020.
The liquidity position of the Company remained satisfactory. Canara Bank and Citi Bankextended their full cooperation to the Company.
6. EMPLOYEES RELATIONS:
The relationship with the employees in general remained cordial. However as reportedin the previous year the cases related to disciplinary actions taken against some workmenwho had indulged in misconduct during and after the illegal labour strike inNovember/December2014 alongwith the issue of Charter of demands put up by one of the twoLabour Unions in the Company are still pending in the Honourable Labour Court/High Court.Our normal production activities are going on smoothly.
Mrs.Khushali Samip Solanki Director of the Company retires by rotation at the ensuingAnnual General Meeting and being eligible offers herself for re-appointment.Abrief resumeof Mrs. Khusahali Samip Solanki is given asannexureto
Considering the integrity expertise and experience (including the proficiency) thefollowing Directors were reappointed during the year:
(i) Mr. Rajendra S. Shah (DIN: 00061922): Reappointed as an Independent Director for asecond term of 5 (five) consecutive years with effect from 10th September 2019.
(ii) Mr. Sanjay S. Majmudar (DIN: 00091305): Reappointed as an Independent Director fora second term of 5 (five) consecutive years with effect from 10th September 2019.
(iii) Mr. Debi Prasad Dhanuka (DIN: 00168198): Reappointed as an Independent Directorfor a second term of 5 (five) consecutive years with effect from 10th September 2019.
(vi) Mr. Pradip R. Shah (DIN: 00293396): Reappointed as an Independent Director for asecond term of 5 (five) consecutive years with effect from 10th September 2019.
(v) Mr. Ashok A. Nichani (DIN : 02249844): Reappointed as an Independent Director for asecond term of 5 (five) consecutive years with effect from 10th September 2019.
8. NUMBEROF MEETINGS OF THE BOARDANDAUDIT COMMITTEE:
During the year under review Four Board Meetings and FourAudit Committee meetings wereconvened and held. The composition ofAudit Committee is as under: -
Mr. D.P. Dhanuka Chairman Mr. Bhadresh K. Shah Member Mr. Pradip R. Shah Member Mr.Ashok A. Nichani Member 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.
9. STATUTORY AUDITORS:
The Statutory Auditors M/s. Ganapath Raj & Co. Chartered Accountants (FRN:000846S)Statutory Auditors of the Company will hold office till the conclusion of the 50th AnnualGeneral Meeting. In accordance with the Companies Amendment Act 2017 enforced on 7thMay 2018 by the Ministry of Corporate Affairs the appointment of Statutory Auditors isnot required to be ratified ateveryAnnual General Meeting.
10. AUDITORS' REPORT AND NOTES ON ACCOUNTS:
The Board has duly reviewed the Statutory Auditors' Report for the Financial Year ended31st March 2020. There are no qualifications/observations in the Report.
The Cost Auditors have filed the cost audit report for the Financial Year ended 31stMarch 2019 within stipulated time frame.
The Board of Directors on the recommendation of the Audit Committee has appointed M/s.Kiran J. Mehta & Co. Cost Accountants Ahmedabad as the CostAuditors of the Companyto audit the cost accounting records of the Company for the Financial Year 2020-2021. 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 M/s. Kiran J. Mehta & Co. CostAccountants Ahmedabad isincluded in the Notice convening the 48thAnnual General Meeting.
Company has a proper and adequate system of Internal Control commensurate with its sizeand the nature of its operations to ensure that all assets are safeguarded and protectedagainst loss from un-authorized use or disposition and all transactions are authorizedrecorded and reported correctly. The Board of Directors at the recommendation of the AuditCommittee appointed M/s. Talati & Talati Chartered Accountants Ahmedabad as InternalAuditors of the Company for Financial Year2020-2021.
Internal Auditors monitor and evaluate the efficacy and adequacy of internal ControlSystem in the Company. SignificantAudit Observations and corrective actions thereon arepresented to theAudit Committee of the Board.
The Company has not accepted any deposit from the public during the year under reviewwithin the meaning of Section
73(a) of the CompaniesAct 2013.
The Company has taken adequate insurance coverage of all its Assets includingInventories against various calamities viz. fire floods earthquake cyclone accidentsetc.
Inline 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 LODR Regulations.
A separate Report on Corporate Governance and Practicing Company Secretary'sCertificate thereon is included as a partoftheAnnual Report.
16. MANAGEMENT DISCUSSIONANDANALYSIS (MDA):
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 ofthisAnnual Report.
17. PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGSAND 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 asanAnnexure -Ato this report.
18. 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 CompaniesAct 2013 which states that:
(i) In the preparation of the Annual Accounts the applicable accounting standards hadbeen followed along with properexplanation relating to material departures.
(ii) 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.
(iii) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(iv) The Directors have prepared theAnnualAccounts 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 were adequate and operating effectively.
19. PARTICULARS OF LOANS GUARANTEESAND INVESTMENTS:
The Company has neither given any loans guarantees nor made any investments underSection 186 of the CompaniesAct 2013 during the FinancialYear2019-2020.
20. TRANSACTIONSWITH RELATED PARTIES:
All the Related Party Transactions entered into during the Financial Year were on anArms Length basis and in the Ordinary Course of Business. There are no materialsignificant Related PartyTransactions 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 theAudit 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 FormAOC-2-asAnnexureB'.
The Policy on Related Party Transactions as approved by the Board of Directors isuploaded on the website of the Company vizhttp://www.welcaststeels.com/newsite/Investor%20services/PolicyRelatedPartyTransaction.pdf.
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.
The objectives and scope of Risk Management Committee broadly comprises of:
Oversight of risk management performed by the executive management:
Reviewing the Corporate Risk Management Policy and framework within the locallegal requirements and "SEBI LODR"
Reviewing risks and evaluate treatment including initiating mitigation actionsand ownerships as per a predefined cycle;
Defining framework for identification assessment monitoring mitigation andreporting of risks.
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 31st March 2020.
The Report on the Secretarial Audit for the year ended 31st Match 2020 is annexedherewith as Annexure C' to this Board's Report. There are noqualification/observations in the Report.
23. VIGILMECHANISM / WHISTLE BLOWER POLICY:
The Vigil Mechanism Policy of the Company which also incorporates a whistle blowerpolicy in terms of the Regulations 22 of SEBI Listing Regulations may be accessed on theCompany's website. The company has nominated the Chief Financial Officer as the ChiefVigilance officer. Protected disclosures can be made by a whistle blower through e-mail orby anonymous letter addressed to the Chief Financial Officer.
24. NOMINATIONAND REMUNERATION COMMITTEE:
The Board has on recommendation of Nomination & Remuneration Committee framed apolicy 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.
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of SEBI LODRRegulations a structured questionnaire was prepared after taking into consideration ofthe various aspects of the Board's functioning composition of the Board and itsCommittees culture execution and performance of specific duties obligations andgovernance.
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.
26. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS:
The Independent Directors have been updated with their roles rights andresponsibilities in the Company by specifying them in their appointment letter alongwithnecessary 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. Site visitsto plant location is organized for the Directors to enable them to understand theoperations of the Company. The details of such familiarization programmes for IndependentDirectors are posted on the website of the Company and can be accessed athttp://www.welcaststeels.com/ newsite/CorporateGovernance.html.
27. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND 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 review theCompany has not received any complaint in this regard.
The details forming partoftheAnnual Return in Form MGT-9 are annexed herewithasAnnexure-Dto this Report.
The information required pursuant to Section 197 of Companies Act2013 read with Rule 5fo the Companies (Appointment & Remuneration of Managerial Personnel) Rules2014 inrespect of employees of the Company is annexed as Annexure E'. The statementcontaining particulars of employees as required under Section 197(12) of the Companies Actread with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is provided in a separate Annexure forming part of this Report.Further the Report and the Accounts are being sent to members excluding aforesaid annexurein terms of Section 136 of the Act. The said Annexure is open for inspection at theRegistered office of the Company. Any shareholder interested in obtaining the copy of thesame may write to the Company Secretary.
Disclosures in respect of the Remuneration of the Managerial Personnel are giveninAnnexure"E".
30. ENVIRONMENT HEALTHANDSAFETY:
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) the Air(Prevention and Control of Pollution) Act the Environment Protection Act and theFactoriesActand Rules made thereunder. Our mandate is to go beyond compliance and we havemade a considerable improvement.
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. Your Company'sconsistent growth was made possible by their hard work solidarity co-operation andsupport.
| ||For and on behalf of the Board of Directors |
|Place:Bengaluru ||VINOD NARAIN |
|Date :15th June 2020 ||Chairman |
| ||(DIN.00058280) |