Your Directors have pleasure in presenting the Forty-Seventh Annual Report togetherwith Audited Financial Statements of the Company for the financial year ended 31st March2019
FINANCIAL HIGHLIGHT :
| || ||र In Lakhs |
|PARTICULARS ||Year ended 31st March 2019 ||Year ended 31st March 2018 |
|Revenue from Operations ||26961.65 ||23996.95 |
|Other Income ||50.42 ||52.20 |
|Total Revenue ||27012.07 ||24049.15 |
|Profit before Finance Cost Depreciation & Amortization ||397.92 ||352.10 |
|and Tax Expenses. || || |
|Finance Cost ||35.66 ||36.04 |
|Depreciation & Amortization ||84.12 ||89.74 |
|Profit Before tax ||278.14 ||226.32 |
|(i) Provision for Taxation (Current) ||63.00 ||74.70 |
|(ii) Taxes for earlier years ||(4.98) ||(14.10) |
|(iii) Provision for Taxation ( Deferred) ||36.22 ||6.36 |
|Total Tax ( i+ii+iii) ||94.24 ||66.96 |
|Profit/(Loss) after Tax ||183.90 ||159.36 |
|Other Comprehensive Income ||3.61 ||(3.54) |
|Total Comprehensive Income/(Expenses) ||187.51 ||155.82 |
During the year under review the Company produced 40097 tons of Grinding Media ascompared to 37972 tons in the previous year
2. SALES & PROSPECTS:
The Company sold 40143 tons of Grinding Media during the year under review as against37930 tons in the previous year. The prospects for sales in the current year also look tobe fairly good.
3. DIVIDEND & RESERVES:
Your Directors are pleased to recommend a dividend of 25% (र 2.50 per share) for theFinancial Year 2018-19.
The liquidity position of the Company remained satisfactory. Canara Bank Citi Bank andState Bank of India extended their full co-operation to the Company.
5. EMPLOYEES RELATIONS:
The relationship with the employees in general remained cordial. However as reportedin the previous year a number of cases related to disciplinary actions taken against someworkmen who had indulged in misconduct during and after the illegal labour strike inNovember/December 2014 alongwith the issue of Charter of demands are pending in theHonourable Labour Court / High Court.
Mr. Bhadresh K. Shah Director of the Company retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offers himself for re-appointment. A brief resume ofMr. Bhadresh K. Shah is given as annexure to the notice.
In terms of the requirements of the Companies Act 2013 the Independent Directors ofthe Company were appointed for a period of five years on 10th September 2014. The saidterm of appointment of the Independent Directors shall come to an end on 9th September2019. In view of the same the Board of Directors has on the basis of the recommendationof the Nomination and Remuneration Committee proposed to re-appoint Mr. Rajendra S. ShahMr. Sanjay S. Majmudar Mr. Debi Prasad Dhanuka Mr. Pradip R. Shah Mr. Ashok A. Nichanias the Independent Directors of the Company for a second term of Five years.
A resolution proposing re-appointment of Independent Directors of the Company for thesecond term pursuant to Section 149(6) of the Companies Act 2013 forms part of the Noticeof Annual General Meeting. The said resolution shall also be treated as a SpecialResolution under Regulations 17(1A) of SEBI LODR Regulations as Mr. Debi Prasad Dhanukahas already attained the age of 75 years and Mr. Rajnendra S. Shah shall attain the age of75 years during their proposed second term.
7. NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE:
During the year under review Four Board Meetings and Audit 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.
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 StatutoryAuditors isnot required to be ratified at everyAnnual General Meeting.
9. AUDITORS'REPORT AND NOTES ON ACCOUNTS:
The Board has duly reviewed the Statutory Auditors' Report for the Financial Year ended31st March 2019.
There were no qualifications/observations in the Report.
10. COST AUDITORS:
The Cost Auditors have filed the cost audit report for the financial year ended 31stMarch 2018 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 Cost Auditors of the Companyto audit the cost accounting records of the Company for the financial year 2019-20. 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 member's ratification ofthe remuneration payable to M/s. Kiran J. Mehta & Co. Cost Accountants Ahmedabad isincluded in the Notice convening the 47thAnnual General Meeting.
11. INTERNAL CONTROLAND AUDIT:
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 year 2019- 20.
Internal Auditors monitor and evaluate the efficacy and adequacy of internal ControlSystem in the Company. Significant Audit Observation 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 Companies Act 2013.
The Company has taken adequate insurance coverage of all its Assets and Inventoriesagainst various calamities viz. fire floods earthquake cyclone accidents etc.
14. 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 LODR Regulations.
A separate report on Corporate Governance and Practicing Company Secretary'sCertificate thereon is included as a part of the Annual Report.
15. MANAGEMENT DISCUSSION AND ANALYSIS (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 of thisAnnual Report.
16. PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS 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 to the Companies (Accounts) Rules 2014 is provided as anAnnexure -Ato this report.
17. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134 (3) (c) of the Companies Act 2013 your Directors herebyconfirm that:
(i) In the preparation of the Annual Accounts the applicable accounting standards hadbeen followed along with proper explanation 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 profit 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 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 were adequate and operating effectively.
18. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:
The Company has neither given any loans guarantees nor made any investments undersection 186 of the Companies Act 2013 during the financial year 2018 19.
19. TRANSACTIONS WITH RELATED PARTIES:
All transactions entered with the related parties for the year under review were onarm's length basis and in the ordinary course of business and that the provisions ofSection 188 of the Companies Act 2013 are not attracted. Your directors draw attention ofthe members to para 6 of note No.27-significant accounting policies and notes to thefinancial statement which sets out material contracts / arrangements/ transactions withrelated parties on arms' length basis. There are no materially significant Related PartyTransactions made by the Company with the Promoters Directors and Key ManagerialPersonnel which may have a potential conflict with the interest of the Company at large.
The Company has developed a Related Party Transactions framework through StandardOperating Procedures for the purpose of identification and monitoring of suchtransactions. All related party transactions including those which are repetitive innature are reviewed by the Audit Committee on quarterly basis. The Board approved all therelated party transactions that are recommended by the Audit Committee. The policy onRelated Party Transactions as approved by the Board of Directors is available on the website of the Company i.e. www.welcaststeels.com. During the financial year 2019-20 thetransactions of sale of material with the Holding Company i.e. AIA Engineering Limited mayexceed threshold limit of ten percent (10%) of the annual consolidated turnover of thecompany as per the audited financial statements for the year ended 31st March 2019.Pursuant to Regulation 23 of SEBI Listing Regulations Company proposes to take theapproval of members of the Company by way of an Ordinary Resolution to be passed at theensuing Annual General Meeting.
The details of the material Related Party transactions entered by the Company duringthe year under review are disclosed in FormAOC 2 as Annexure B to thisReport.
20. 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.
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 Listing Regulations;
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.
21. SECRETARIALAUDIT REPORT:
Pursuant to the provisions of Section 204 of the Companies Act 2013 and Rules madethereunder the Company has appointed M/s Tushar Vora & Associates CompanySecretaries in Practice (CP No 1745) to conduct the Secretarial Audit of the Company'ssecretarial and related records for the year ended 31st March 2019. The Secretarial AuditReport of the Company is annexed herewith as Annexure C and forms an integral partof this report.
22. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The vigil mechanism of the Company which also incorporates a whistle blower policy interms of the Regulations 22 of SEBI Listing Regulations may be accessed on the Company'swebsite. The company has nominated the Chief Financial Officer as the Chief Vigilanceofficer. Protected disclosures can be made by a whistle blower through e-mail or byanonymous letter addressed to the Chief Financial Officer.
23. NOMINATION AND 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.
24. BOARD EVALUATION:
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 NonIndependent Directors wascarried out by the Independent Directors. The Board of Directors expressed theirsatisfaction with the evaluation process.
25. 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 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. 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.
26. 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.
27. EXTRACT OF ANNUAL RETURN:
The details forming part of the Annual Return in Form MGT9 are annexed herewithas Annexure D to this Report.
28. PARTUCULARS OF EMPLOYEES:
The information required pursuant to Section 197 of the Companies Act 2013 read withRule 5 of the Companies (Appointment of Remuneration of Managerial Personnel) Rules 2014in respect of employees of the Company forms part of this report. In terms of Section 136of the Companies Act 2013 the Report and Accounts are being sent to the Members andothers entitled thereto excluding the information on employees' particulars which isavailable for inspection by the Members at the Registered Office of the Company duringbusiness hours on working days of the Company up to the date of ensuing Annual GeneralMeeting. If any member is interested in obtaining a copy thereof such Member may write tothe Company Secretary in this regard.
Disclosures in respect of the Remuneration of the Managerial Personnel are giveninAnnexure "E".
29. 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) 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.
30. 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 sincerely appreciate the high degree of professionalism commitment anddedication displayed by employees. The Directors also wish to place on record theirgratitude to the members for their continued support and confidence. Your Directors alsohave pleasure in placing on record their sincere appreciation for the continuedco-operation and support extended to the Company by the Bankers Canara Bank State Bankof India and Citibank N.A.Ahmedabad and various other Government authorities.
| ||For and on behalf of the Board of Directors |
|Place : Bengaluru ||VINOD NARAIN |
|Date : 22.05.2019 ||Chairman |
| ||(DIN.00058280) |