DIRECTORS’
REPORT
The Members of
WALCHAND PEOPLEFIRST
LIMITED
Your Directors present
herewith the 89th Annual Report together with the Audited Statement
of Accounts and Auditors’ Report thereon for the Financial Year ended March 31,
2009.
1.
FINANCIAL RESULTS
|
|
(Rs. in Lacs) |
|||
|
|
Financial Year ended
31.03.2009 |
Financial Year ended
31.03.2008 |
||
|
Profit before interest,
depreciation and taxation |
|
53.30 |
|
(87.03) |
|
Profit on Sale of
Training Business |
0.00 |
|
|
906.44 |
|
Less: Interest |
4.49 |
|
1.09 |
|
|
Less:
Depreciation/Amortisation |
19.60 |
|
37.31 |
|
|
Provision for Taxation -
Current / earlier years |
1.26 |
|
92.58 |
|
|
|
|
25.35 |
|
130.98 |
|
|
|
27.95 |
|
688.43 |
|
Deferred Tax recognised |
|
(146.58) |
|
(53.04) |
|
Net Profit |
|
(118.63) |
|
635.39 |
|
Add: Balance brought forward |
|
1277.13 |
|
675.07 |
|
Less: Transferred to
Reserve Fund |
|
N.A |
|
N.A |
|
Amount available for appropriation |
|
1158.50 |
|
1310.46 |
|
Appropriations |
|
|
|
|
|
Final Dividend |
|
0.00 |
|
28.49 |
|
Dividend Tax |
|
0.00 |
|
4.84 |
|
Balance carried to
Balance Sheet |
|
1158.50 |
|
1277.13 |
|
Total |
|
1158.50 |
|
1310.46 |
2.
DIVIDEND
Your
Directors have decided not to recommend any dividend for the year ended 31st
March, 2009, in view of inadequate Profit.
3.
CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO(Section 217(1)
(e) of the Companies Act, 1956)
Particulars
required to be furnished by the Companies (Disclosure of particulars in the
report of the Board of Directors) Rules, 1988 are as follows:-
a.
Rule 2(A) pertaining to Conservation
of Energy and Rule 2(B) pertaining to Technology absorption are not applicable
to the Company.
b. Foreign exchange inflow and outflow – Rule
2(C):
|
|
(Rs.
in Lacs) |
|
|
(a)
EXPENDITURE IN FOREIGN CURRENCY |
Financial Year ended 31.03.2009 |
Financial Year ended 31.03.2008 |
|
Ø
Professional Fees/Franchise Fee |
NIL |
NIL |
|
Ø
Royalty Remitted |
NIL |
41.05 |
|
Ø
Traveling Expenses |
NIL |
2.68 |
|
Ø
Others |
NIL |
NIL |
|
|
|
|
|
(b) EARNING IN
FOREIGN CURRENCY |
NIL |
NIL |
4.
MANAGEMENT DISCUSSION AND
ANALYSIS
Industry Structure & Development
The
Indian economy was on a roller-coaster ride in early 2008. At the beginning of
the year, the overall sentiment prevalent in the economy was optimistic and
backed by healthy balance sheets; companies were ploughing back a portion of
their earnings into their business through capacity expansions. Employment
scenario was upbeat, though the industry was facing a talent crunch. While the
global economic environment started to deteriorate during
the year, the Indian economy was expected to remain insulated or affected only
marginally. However, with the increased integration of the Indian economy and
its financial markets with the rest of the world ensured the ripple effect of
the global crisis was transmitted to the domestic economy. Consequently,
towards the end of 2008, corporate profits began to wither, investments started
to shrink and the talent crunch situation turned into a talent galore situation
owing to dearth in employment opportunities.
We
witnessed a sharp decline in planned expenditures on Training in the third
quarter of the year. Industry verticals that saw the sharpest decline were IT /
ITES, Automotive and Manufacturing. While the Banking and Financial sectors
held forth, we saw a healthy growth in Training expenditure in Telecom.
The
weakening demand has driven several smaller, unorganized training outfits out
of the market place while large Training organizations have survived well. Yet,
with the long-term prospects of India remaining strong, we have also witnessed
a larger number of organized players entering the market.
With
a significant slowdown in recruitment by Indian companies, the focus is now on
retention and selective hiring, driven purely by critical skills matching with
business needs.
According
to a study carried out by Deloitte, companies have begun investing more in
building a strong leadership pipeline and identifying, engaging and developing
high performing employees within the organization. Most of the companies
surveyed have stated that building the leadership pipeline (65%), retention of
critical workforce (51%) and succession
planning (51%) is their highest priority. Employee communication has taken on
an even greater priority, especially to counter low employee morale. About 78%
of the companies surveyed stated that the rewards structure remained relatively
unchanged.
As
the market dynamics and customer preferences change, companies are beginning to
focus on innovative practices related to talent management and at the same time
driving measures to cut overall operational costs. Companies appreciate that to
remain viable and competitive both in the short and long term, they must focus
on and improve their ability to attract, develop and retain top talent.
As
such, long-duration Training and Executive Education courses are now being
replaced by shorter duration workshops. Your company has devised a Modular
Training approach with several short programs from half-day workshops to 3-days
seminars to meet this need.
At the same time, with the growing privatization of
higher education, your company has been able to forge strong institutional
partnerships through its Finishing School. Industry, institutions and policy
makers recognize that employable skills development is the need of the hour.
With recruitment becoming selective, this area has become all the more
significant.
There is a growing need to enhance global capacities
and soft-skills are increasingly interwoven into functional skills. There is a
strong focus on revenue growth in companies and the area of sales effectiveness
is expected to be a huge training opportunity. Leadership training is also a
big demand area as this has now percolated down from just the top brass to
middle level managers who head business units. According to a Gallup poll, only
25% employees in an organization are engaged, making this a critical need
within organizations. From team building exercises, we now offer modular
engagement packages in more sophisticated forms. Also, orientation training
provided to newcomers is a big opportunity area. Effective communication
training, ranging from business communication to media training, is a critical
growth area across all levels in an organization.
However, the bar has been raised for Training organizations like never before. Corporate executives recognize that Training investments represent 0.5-1% of revenues and impact as much as 40-45% of the staff costs. As such they are becoming accountable for the money they spend. This means training providers need to ensure a direct business relevance and measurable return on investment. There is also a lot of activity on re-engineering the learning function. Focus is moving from cost generating activities to activities that impact corporate performance. Also fixed resources dedicated to Training will decrease. This will result in greater outsourcing of Training, which spells opportunities for the Dale Carnegie business.
Outlook, Risks
& Concerns
While
some economists predict that industry growth levels in India will pick up
around the third quarter of the coming year, we expect that the Training market
will grow only marginally in 2009-10. We saw a sharp decline in Training
budgets in the third quarter of the year and see it continuing at least for the
first half of the coming year.
The coming financial year will bring significant growth challenges for the wider economy and of course individual businesses as well. Timely and appropriate action will be the key towards managing growth at the macro level, while a keen sense of attention to cost management, process control and revenue focus will determine the success of individual businesses.
During
this slow period, your company has maintained precisely the same focus. Your
company has brought about a significant cost-rationalization and improvement in
process control while focusing on building the revenue pipeline. This is
expected to show positive results during the coming year.
Continuing
on this effort and with the change in the business model and strategy of the
Finishing School initiative, your Company intends to consolidate its operations
to build greater efficiencies by merging the subsidiary company, Walchand
TalentFirst, with the Company during the year. The Management believes this
will provide greater returns to its shareholders.
Cautionary
Statement:
The statements made in this
report describe the Company’s objectives, expectations and projections that may
be forward looking statements. The actual results might differ materially from
those expressed or implied depending on the economic conditions, government policies
and other incidental factors, which are beyond the control of the Company and
Management.
Segmentwise Performance:
As
per the Consolidated Financial Statement, the revenue and results
for the Investment Division and the Training Division for the relevant period
are reported in the notes to Accounts.
Internal Control Systems and their Adequacy:
The
Company has adequate and effective control systems, commensurate with its size
and nature of business, to ensure that assets are efficiently used and the
interest of the Company is safeguarded and the transactions are authorized,
recorded and reported correctly. Checks and balances are in place to determine
the accuracy and reliability of accounting data. The preventive control systems
provide for well-documented policy, guidelines, and authorization and approval
procedures. The Company has a full-fledged Internal Audit System to ensure that
the policies and procedures laid down are adhered to. The Company has also
developed a Risk Assessment policy and is reviewed by the Board of Directors/
Audit committee on a quarterly basis.
Financial Performance with respect to
Operational Performance:
Total
income achieved during the year under review by the Company is Rs 133.08 lakhs. After providing for taxation of Rs
1.26 Lakhs and recognition of Deferred Tax Liability of Rs 146.58 Lakhs, the
Company made a Net Loss of Rs 118.63 Lakhs.
As
per the Consolidated Financial Statement, Total income achieved during the year
under review by the Company (and its subsidiary) is Rs 1328.38 lakhs as against
Rs 1217.53 lakhs in the previous year. Training income for the Company (and its
subsidiary) has increased to Rs 1168.06 lakhs as against Rs 992.21 lakhs in the
previous year showing an increase of more than 17%. After providing for
taxation of Rs 9.15 Lakhs and recognition of Deferred Tax Liability of Rs
146.58 Lakhs, the Consolidated results for the Company show a Net Loss of Rs
353.13 Lakhs as against a Loss after tax of Rs 605.16 Lakhs in the previous
year. The Operating Loss has been reduced from Rs.457.19 Las in previous year
to Rs. 178.25 Lacs during the year aggregating to an improvement of 61.01%
Human Resources:
Your
Company considers its intellectual capital as its most valuable asset.
Personnel policies of your Company are designated to ensure fairness to and
growth of all individuals in the organization and continuously strives to
provide a challenging work environment. We have a strong Performance Management
System and code of conduct which reinforces our work ethics.
5.
SUBSIDIARY
Walchand TalentFirst Limited subsidiary of the Company has
allotted 30,00,000 Equity Shares of Rs. 10/- each at par to the Company
on 18th August, 2008. Further, pursuant to the Amendment to Convertible
Debenture Subscription Agreement, Walchand
TalentFirst Limited has allotted
4,34,375 Equity Shares of Rs.10/- each at the price of Rs. 21.40 per share to Bennett Coleman & Company Limited on conversion of Debenture of Rs.
92,96,656/- on 27th January, 2009.
6.
PARTICULARS OF EMPLOYEES
As required
under the provisions of Section 217 (2A) of the Companies Act, 1956 read with
the Companies (Particulars of Employees) Rules, 1975, the names and other
particulars are set out in the annexure to this report.
7.
INVESTMENTS
During the Financial
Year under report, the outstanding
position in the investment of shares and debentures of various companies were
to the tune of
Rs. 1518.12 lacs as compared to the last Financial Year’s investment of Rs.
1229.64 lacs.
The Book
value of the quoted investments for the year under review was Rs.27.07 lacs
(previous year Rs. 31.59 lacs) and its market valuation was Rs. 10.26 lacs
(previous year Rs.18.45 lacs).
8.
FIXED DEPOSIT
The Company
has not accepted any deposits from public under the Provisions of Section 58A
of the Companies Act 1956 and rules framed thereunder during the Financial Year
ended 31st March 2009. As at March 31, 2009, there is no outstanding
liability to fixed depositors.
9.
DIRECTORS’ RESPONSIBILITY
STATEMENT
To the best
of their knowledge and belief and according to the information and explanation
obtained by them, your Directors make the following statement in terms of
Section 217(2AA) of the Companies Act, 1956:
i)
that
in the preparation of the Annual Accounts for the financial year ended March
31, 2009, the applicable accounting standards had been followed along with
proper explanation relating to material departures;
ii)
that
the Directors had selected such accounting policies and 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 the Company at
the end of the financial year ended March 31, 2009 and of the loss of the
Company for the said year;
iii)
that
the Directors have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Companies
Act,1956, for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
iv)
that
the Directors have prepared the Annual Accounts for the year ended March 31,
2009, on a going concern basis.
10.
STATUTORY AUDITORS
The Statutory
Auditors of the Company, M/s. Haribhakti & Co., Chartered Accountants
retire at ensuing Annual General Meeting of the Company and have given their
consent for re-appointment. The Company has also received a Certificate from
them to the effect that the re-appointment, if made, would be within the
prescribed limits under Section 224 (1B) of the Companies Act, 1956 and also that
they are not otherwise disqualified within the meaning of sub-Section (3) of
Section 226 of the Companies Act, 1956, for such re-appointment. You are
requested to appoint Auditors for the current year and fix their remuneration.
11.
DIRECTORS
In accordance
with the Articles of Association of the Company and provisions of the Companies
Act, 1956 Ms. Pallavi Jha and Ms. Poonam Barua retire by rotation at the
ensuing Annual General Meeting and being eligible, offer themselves for
re-appointment. Your Directors recommend their re–appointment.
12.
COMPLIANCE CERTIFICATE
As per Section
383A of the Companies Act, 1956 read with Notification No. G.S.R. 11 (E), Dated
5-1-2009 issued by the Ministry of Corporate Affairs, a Company having the paid up
Share Capital of Rs. 10 Lacs or more but less than Rs. 5 Crores must obtain a
Compliance Certificate from a Company Secretary in whole time practice and such
Certificate must be annexed to the Report. Further as per the said Notification
if the Company has employed a Company Secretary on whole time basis then the
said Certificate is not required to be obtained. Since the Company has employed
a Company Secretary on whole time basis the provision relating to the
Compliance Certificate is not applicable to the Company.
13. CORPORATE GOVERNANCE
Pursuant to Clause 49 of the
Listing Agreement with the Stock Exchanges, a Compliance Report on Corporate
Governance together with the Certificate from M/s. Pramod S. Shah &
Associates - Practising Company Secretaries is annexed as a part of the Annual
Report.
14. COST
AUDIT
The Company is not required to
undertake the cost audit as required under Section 233 B of the Companies Act,
1956.
15. ACKNOWLEDGMENT
Your Directors take this
opportunity to express their grateful appreciation for the excellent assistance
and co-operation received from Clients, Vendors, Financial Institutions,
Bankers, Business Associates and various Governmental, as well as Regulatory
Agencies for their valuable support. Your Directors also wish to place on
record their appreciation for the contribution made by the employees.
For and on behalf of the Board of
Directors
Date: July 31, 2009 PALLAVI JHA
Place: Mumbai CHAIRPERSON & MANAGING DIRECTOR
1, Construction House,
Walchand Hirachand Marg,
Ballard Estate, Mumbai 400
001
___________________________________________________________________________________
Statement pursuant to Section 217 (2A) of the
Companies Act, 1956 and the Companies
(Particulars of Employees) Rules, 1975 :
There are no employees who draw remuneration
amounting to Rs. 24,00,000 per annum.