Directors' Report To: The Members of Walchandnagar Industries Limited 1. Your directors take pleasure in presenting the 106th Annual Report on the business and operations of your Company together with Audited Accounts for the year ended September 30, 2014. 2. Current Year: The orders on hand as on September 30, 2014 were at Rs. 1,376 crores as compared to Rs. 1671 crores as on September 30, 2013. 3. Exports and Overseas Projects: During the year under review, the Company achieved an export turnover of Rs. 87 Crores as against Rs. 256 Crores, in the previous year. The export orders on hand as on September 30, 2014 are at Rs. 481 Crores. During the year, the Company executed orders for Sugar & Boiler projects in Ethiopia & Cement machinery in Tanzania and Niger. 4. Dividend: During the year under review your Company has suffered a loss after tax of Rs. (1237) Lakhs. However, your Directors are recommending Dividend for the financial year 20132014 out of accumulated Profits of the earlier years on Equity Shares of Rs. 2/- each at Rs. 0.40 per share equivalent to 20% (20% in the previous year) aggregating to Rs. 152.28 Lakhs. The Dividend Distribution Tax thereon works out to Rs. 30.45 Lakhs. 5. Management Discussion & Analysis: Detailed Management Discussion and Analysis is enclosed by way of Annexure 'A' to this report. 6. Finance & Accounts: (i) Fixed Deposits: Your Company did not invite or accept deposits from the public during the year under review. (ii) Income Tax Assessments: Consequent to the proceedings u/s 132 of the Income Tax Act, 1961 initialed by the Department in the month of December, 2012, the Company has filed an application before the Income Tax Settlement Commission, which has been admitted for further hearings and the proceedings are in progress. The Income Tax liability arising thereof, relating to the earlier years has been provided for in the books of accounts and included under tax for earlier years in the previous year. 7. Human Resources Development: Your Company has been successful in implementing contemporary Human Resource practices and policies with a view to make Walchandnagar Industries Limited a preferred employer in the heavy engineering industry. Augmentation of critical skills and senior management talent has been a thrust area to address immediate business needs and succession planning. In order to have a proper leadership pipeline, certain employees of M & S Cadre have been identified as high potential employees after a series of interviews and psychometric tests. Many of the identified high potential employees have been given larger responsibilities to meet their aspirations as well as to have more operational advantages. Accordingly, though we are able to achieve a reduction in the manpower cost, it was possible to position aspirational leaders at critical leadership roles. Internal communication has been strengthened with the help of newsletter and new internal website (Walchand Connect). Formation of multi-disciplinary groups has been started to achieve specific business objectives. 8. Directors' Responsibility Statement: Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that: i. In preparation of the Annual Accounts for the Financial Year 2013-2014, the applicable Accounting Standards have been followed along with proper explanation relating to material departures. ii. Appropriate accounting policies have been selected and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at September 30, 2014 and the loss of the Company for the Year ended on that date. iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. iv. The annual accounts have been prepared on a going concern basis. 9. Corporate Governance: Your Company believes that Corporate Governance is the basis of stakeholder satisfaction. The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance Requirements as set out by SEBI. Your Company has obtained a certification from M/s. K. S. Aiyar & Company, Chartered Accountants, Statutory Auditors, on compliance with clause 49 of the listing agreement. The Report of Corporate Governance along with Certificate from the auditors of the Company regarding compliance of conditions of corporate governance is enclosed by way of Annexure 'B' to this Report. 10. Corporate Social Responsibility: The new Companies Act, 2013 mandates that every Company, who meet certain eligibility criteria needs to spend at least 2% of its average net profit for the immediately preceding three financial years on Corporate Social Responsibility activities. In view of losses, statutorily no amount is required to be spent by the Company. However, Corporate Social Responsibility is an integral part of the Company. Over the years, the Company has taken and continues to take several initiatives to support Environment, Education, Health and sports related activities in order to fulfill its corporate social commitments. Health: To create health awareness in the township and nearby villages, the Company continued to organize various health schemes during the year. This year the Company organized a general health check up camp for hazardous workers, ECG check up camp for employees above 50 years of age, undertook health related sessions for women and senior citizens and organized a Blood Donation Camp. The Company is running Hospital at Walchandnagar which is open for nearby villagers as well as employees. Education: The schools established by the Company continued to impart education up to Higher Secondary grade to children staying in Walchandnagar and in nearby villages. The Company currently provides education to 4482 children of which, 20% are children of employees of the company and 80 % are other children who reside in Walchandnagar & nearby villages. Environment: To maintain a pollution free atmosphere and to spread awareness about environment protection, we have undertaken tree plantation and organized seminars on pollution control & on disposal of hazardous waste. Encouraging young talents in the field of sports: As a part of our commitment to the Society, your Company has been sponsoring All-India Ranking National Tennis Tournaments in Pune for boys and girls below 16 years of age for the past seven years. This year the tournament was held in Pune from 17th to 22nd November, 2014 wherein prominent ranking tennis players participated from all over India. 11. Energy, Technology & Foreign Exchange: Pursuant to Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, information on conservation of energy, technology absorption, foreign exchange earnings and out-go is given in the Annexure 'C' to this Report. 12. Personnel: Employee relations remained harmonious and satisfactory during the year and your Board would like to place on record their sincere appreciation for sustained efforts and valued contribution towards growth initiative made by all the employees of the Company. Information as per Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, forms part of this Report. As per the provisions of Section 219(1)(b)(iv) of the Act, the Directors' Report and accounts are being sent to the shareholders excluding the statement giving particulars of employees under Section 217(2A) of the Act. The copy of the said statement is available at the Registered Office for inspection. Any shareholder interested in obtaining a copy of the statement, may write to the Company Secretary at the Registered Office of the Company. 13. Subsidiaries: The Company does not have any subsidiary. 14. Directors: Pursuant to Article 149 of the Articles of Association of the Company and Section 152 of the Companies Act, 2013, Mr. Chakor L. Doshi is due to retire by rotation at the 106th Annual General Meeting and being eligible, have offered himself for re-appointment. Pursuant to the provisions of Sections 149, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) and pursuant to the provisions of Clause 49 of the Listing Agreement, Mr. Dilip J. Thakkar is proposed to be appointed as Independent Director from the conclusion of 106th Annual General Meeting till the conclusion of the Annual General Meeting to be held in the year 2017, and Dr. Anil Kakodkar, Mr. G. N. Bajpai, Mr. A. R. Gandhi and Mrs. Bhavna Doshi are proposed to be appointed as Independent Directors of the Company from the conclusion of 106th Annual General Meeting till the conclusion of the Annual General Meeting to be held in the year 2019, not liable to retire by rotation. Your Board has reviewed the declarations made by the said Independent Directors and is of the view that they meet the criteria of Independence as provided in Section 149 of the Companies Act, 2013 and Rules made there under, as also those prescribed under the Listing Agreement. Mr. J. L. Deshmukh resigned as a Director of the Company with effect from November 21, 2014 due to various other responsibilities and commitments towards family, Mr. A. U. Rijhsinghani resigned as a Director of the Company with effect from November 30, 2014 due to the proposed age policy for Directors of the Company which mentions the age limit of 80 Years for appointment / continuing as a Director and Dr. P. K. Basu, Independent Director resigned with effect from December 01, 2014 due to personal and health reasons. The Board wishes to place on record its sincere appreciation and gratitude for the invaluable contribution made by Mr. J. L. Deshmukh, Mr. A. U. Rijhsinghani and Dr. P. K. Basu during their tenure with the Company. Brief profiles of the proposed appointees together with other disclosures in terms of Clause 49 of the Listing Agreement are mentioned in the Notice which is part of this Annual Report. 15. Auditors: M/s. K. S. Aiyar & Co., Chartered Accountants, Auditors of the Company will hold office till the conclusion of the 106th Annual General Meeting and are eligible for re-appointment. The Company has received letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment. The members are requested to appoint the Auditors and authorise the Board to fix their remuneration. 16. Cost Auditors and Cost Audit Report M/s. S. R. Bhargave & Co., Cost Accountants have been duly appointed as Cost Auditors for conducting Cost Audit in respect of products manufactured by the Company which are covered under the Cost Audit Rules for current financial year ending March 2016. They were also the cost auditors for the previous year ended September 2014. As required by Section 148 of the Companies Act, 2013, necessary resolution has been included in the Notice convening the Annual General Meeting, seeking ratification by the Members to the remuneration proposed to be paid to the Cost Auditors for the financial year ending March 2016. The Cost Audit Reports for the financial year ended September 2014, will be filed within the stipulated time i.e. on or before March 31, 2015. 17. Acknowledgement: Your Directors wish to place on record their deep sense of appreciation for the committed services by the Company's executives, staff and workers. Your Directors also place on record their sincere appreciation for the assistance and co-operation received from the banks, financial institutions, customers, suppliers and the shareholders from time to time. For & on behalf of the Board of Directors Chakor L. Doshi Chairman Registered Office: 3, Walchand Terraces, Tardeo Road, Mumbai - 400 034. Date : November 29,2014 |