DIRECTORS’ REPORT
The Members of
WALCHAND PEOPLEFIRST
LIMITED
Your Directors present
herewith the 87th Annual Report together with the Audited Statement
of Accounts for the year ended March 31, 2007.
1. FINANCIAL
RESULTS
(Rs.
In Lacs)
|
|
2006-07 |
2005-06 |
||
|
Profit before interest,
depreciation and taxation |
|
76.88 |
|
69.44 |
|
Less: Interest |
1.54 |
|
1.64 |
|
|
Depreciation/Amortisation |
41.02 |
|
39.16 |
|
|
Provision
for Taxation-current/earlier years |
9.37 |
|
8.30 |
|
|
|
|
51.93 |
|
49.10 |
|
Add : provisions written back |
|
0.0 |
|
14.66 |
|
Deferred Tax recognised |
|
227.67 |
|
- |
|
Net Profit |
|
252.62 |
|
35.00 |
|
Add: Balance brought
forward |
|
455.78 |
|
453.26 |
|
Less: Transferred to
Reserve Fund |
|
- |
|
|
Amount available for appropriation |
|
708.40 |
|
488.26 |
|
Appropriations |
|
|
|
|
|
Interim Dividend |
|
|
|
14.24 |
|
Final Dividend |
|
28.48 |
|
14.24 |
|
Dividend Tax |
|
4.84 |
|
4.00 |
|
Balance carried forward |
|
675.08 |
|
455.78 |
|
Total |
|
708.40 |
|
488.26 |
2.
DIVIDEND
The Board of Directors recommends 10 % final
dividend for the Financial Year ended March 31, 2007.
a)
Industry Structure & Development
Vigorous growth with strong macroeconomic
fundamentals has characterized development in
Indian economy in 2006-07 so far despite the concerns on the inflation
front, which is expected to continue
for a good part of this year. Growth of 9.0 per cent and 9.2 per cent in
2005-06 and 2006-07, respectively, by most accounts, surpassed expectations.
While the up-and-down pattern in agriculture continued with growth estimated at
6.0 per cent and 2.7 per cent in the two recent years, and services maintained
its high growth performance, there were distinct signs of sustained improvements
on the industrial front. Entrenchment of the higher growth trends, particularly
in manufacturing, has boosted sentiments, both within the country and abroad.
The overall macroeconomic fundamentals are robust, particularly with tangible
progress towards fiscal consolidation and a strong balance of payments
position. With an upsurge in investment, the outlook is distinctly upbeat.
Services contributed as much as 68.6 per cent
of the overall average growth in GDP in the last five years between 2002-03 and
2006-07. Practically, the entire residual contribution came from industry. As a
result, in 2006-07, while the share of agriculture in GDP declined to 18.5 per
cent, the share of industry and services improved to 26.4 per cent and 55.1 per
cent, respectively.
.This
stellar industry growth is expected to continue over the next couple of
decades. As per the latest Goldman Sader Report, India’s GDP will match that of
the US by 2050. India is witnessing a rapid growth across all sectors in a very
compressed time frame. While India’s institutional and hard
infrastructure is already under pressure to keep pace with higher growth
needs, the soft infrastructure like education is also under tremendous pressure
to deliver skills and competencies required by industry both in quality and
quantity.
With
its bulging working age population, India leads other nations on the
demographic dividend. India’s workforce is set to double to 761 million by
2020. But it too is facing a talent crunch. The issue is not so much that of a
supply deficit as much as of a
capability deficit which companies need to address.
b)
Opportunities & Challenges
The
prevalent corporate scene characterized by globalisation, technology
outsourcing, the demographic trend and changing social ethos has made it
imperative for Indian businesses to become more globally competitive. In this
context, Human Resources (HR) has attained significant importance with
increasing awareness that the individual and collective competencies of any
organization are the prime factors which contribute to its continuous growth
and success. Now, as never before, the importance of the intangible core, the
human element, has become undisputable. Today, HR is viewed as a strategic
partner in business, interwoven with other functional areas like marketing,
finance, operations and systems. Companies today realize that strong
organizational HR is needed not just to be a big company but to become a great
company. This fact endorses that efforts directed towards human resource
development is the most important step towards organisational excellence.
Various studies
estimate that nearly 40% of Indian companies are likely to be under threat by
2015 for their inability to change management style. Companies realize that the
quality of manager is emerging as the single most important factor of success and are beginning to make a lot of
orgainsational changes to emerge as global leaders. Human Resource management
is now key to giving companies the competitive edge in times of talent scarcity
and rapid competency development is the only answer .
For India Inc,
managing costs and attracting and retaining people is a big worry. Building a
talent pipeline and creating a cadre of global leaders is top priority. The thrust on performance is
rising across the corporate world. With globalisation, managing a global
workforce is also becoming a key concern area.
companies and
governments are now investing heavily in capability building.
India, which has
so far supplied the world with a highly skilled work force from its elite
institutions, will soon contribute to the global skills shortage. This offers great opportunities, both to quality
education and training institutions like ours for both providing skills,
training to students and managers.
Our company has established itself as a market
leader in the area of soft skills training and development at the national
level. With the recent partnership with PerformanSe SAS of France, we will now
be offering companies and individuals services in competency assessments to
help manage their thrust on performance better. We are focused on offering
integrated end-to-end HR solutions for Talent Development to industry,
government and students, which is the single biggest felt need in the market.
Your company is
rapidly investing and increasing its own capacities and capabilities to meet
the burgeoning market demands.
At
a macro-level, only a volatile socio-political situation or shortfall in
achievement of growth targets could result in a possible slowdown in the
currently booming economy and thereby industry growth levels. This could affect investment in human
resources by companies and may result in a cut-down in recruitment levels or
training and development initiatives.
d)
Segment-wise Performance
In
the third full year of operation of the Dale Carnegie Training India
operations, the Company has begun to
consolidate its operations into a high growth profitable business. During the
year it worked with nearly 300 companies and has trained more than 6,100
individuals. The revenue and results for this segment and the Investment
division are reported in the notes to Accounts.
e)
Internal Control Systems and their Adequacy
The
Company has adequate and effective control systems, commensurate 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 authorised, 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.
f)
Financial Performance with respect to Operational Performance
Total
income achieved during the year under review is Rs.764.24 lakhs as against Rs.
586.83 lakhs in the previous year. Total income of the previous year includes
one time interest income of Rs. 70.23 lakhs, income of Rs. 19.09 on account of
provisions for expenses written back and write back of income tax provisions
for earlier years Rs. 14.66 lakhs. The
income from Dale Carnegie Training has increased to Rs. 593.44 lakhs as against
Rs. 317.86 lakhs in previous year, showing an increase of more than 83%. After
providing for taxation of Rs. 9.37 lakhs, and recognistion of Deferred Tax
Asset of Rs. 227.67 the profit after
tax earned by the Company is Rs. 251.76
lakhs as against profit after tax of Rs. 20.00 lakhs as earned in the previous
year.
Over
nearly four years since its commencement, The Dale Carnegie Training Division
has been achieving a healthy growth consistently having doubled its revenues,
year on year and, achieving a healthy profitability . The Company is expected
to continue this growth trend in the near future. To expand our operations, we
have opened offices in Hyderabad, Chennai and Kolkata during the year. The
Company has also expanded its services from pure training services to
integrated Talent Development and Management Services with new offerings in the
areas of Consulting and Competency assessments
towards Talent Development and Management.
g)
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, which reinforces our work ethics.
Your Company believes in investing in the training,
development and growth of its own people to ensure maximization of individual
potential and productivity per employee. We regularly provide training and
certification for trainers through the global Carnegie endorsement process to
ensure development of high quality trainers and consultants.
The Company’s total manpower strength stands
presently at 55 comprising mainly of
senior managers, qualified trainers, business consultants and support staff.
Recently we have added 17 employees in Dale Carnegie Training Division and
expect to aggressively recruit during the year in keeping with the expansion of
the Dale Carnegie operations across the country.
4. INVESTMENTS
During the year under report the
outstanding position in the investment of shares and debentures of various
companies were to the tune of Rs. 788.99 lacs as compared to the last year’s
investment of Rs. 634.13 lacs.
The
Book value of the quoted investments for the year under review was
Rs.
93.56 lacs (previous year Rs. 69.45 lacs) and its market valuation
was
Rs.
85.03 lacs (previous year Rs.75.79 lacs).
5. FIXED
DEPOSITS
Your
Company had stopped accepting / renewing fixed deposits since February 1998.
The Company after obtaining necessary approval from the Reserve Bank of India
had offered to repay the entire fixed deposits to all the deposit holders, who
were holding the deposits as on August 31, 1999, including the interest
thereon.
As
at March 31, 2007, there is no outstanding liability to fixed depositors. The
entire outstanding liability is on account of matured fixed deposits which
remained unclaimed, has been transferred to Investor Education and Protection
Fund.
Pursuant to clause 49 of the
Listing Agreement with the Stock Exchanges, a compliance report on Corporate
Governance together with a Certificate from the Statutory Auditors is annexed
as part of the Annual Report.
7. COST AUDIT
The company is not required to
undertake the cost audit as required under Section 233 B of the Companies Act,
1956.
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:
a) that
in the preparation of the Annual Accounts for the year ended March 31, 2007,
the applicable accounting standards have been followed alongwith proper
explanation relating to material departures, if any.
b) that
the Directors have 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, 2007 and of the profit of the
Company for that year.
c) 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
d) that
the Directors have prepared the Annual Accounts for the year ended March 31, 2007, on a going concern
basis.
9. DIRECTORS
In
accordance with the Articles of Association of the Company and provisions of
the Companies Act, 1956 Mr. Sanjay Jha and Dr. Satish
C. Jha retires by rotation at the ensuing Annual General
Meeting and being eligible, offer themselves for re-appointment. Your Directors
recommend their re–appointment.
Ms.
Poonam Barua has been appointed as Director of the Company with effect from
January 16, 2007. Ms. Poonam Barua holds office upto the date of forthcoming
Annual General Meeting pursuant to section 260 of the Companies Act, 1956. Your
directors recommend her appointment.
Ms. Kamalini Bahubali has submitted her resignation from the
Directorship of the Company due to various personal reasons. The Board has rel
accepted her resignation with effect from April 26, 2007. The Board
has placed on record its warm appreciation of most valuable services rendered
by Mrs Kamalini Bahubali during her long and meritorious service with the
company. Mrs Kamalini Bahubali’s
contribution to the Board of Directors and the Company has been immense.
The tenure of
appointment of Ms. Pallavi Jha as Managing Director of the Company expires on
25.7.2007. Your directors recommend her re-appointment as Managing Director of
the Company for a further term of 3 years for the period from 26.7.2007
to 25.7.2010 (3 years).
The
Board of Directors at its meeting held on April 26, 2007 recommended to the
shareholders the appointment of Mr. Sanjay Jha as a Whole time Director of the
Company with effect from July 27, 2007.
10. STATUTORY AUDITORS
You are requested to appoint
Auditors for the current year and fix their remuneration. The Auditors of the
Company, M/s. Haribhakti & Co., and 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 under section 224(1B) of
the Companies Act, 1956.
11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO.
The provisions of
Companies (Disclosure of Particulars in the Report of Board of Directors)
Rules, 1988 are not applicable.
During
the year under review, the Company utilized foreign exchange amounting to Rs.
74.08 lacs (previous year Rs. 60.71 lacs) and earned foreign exchange amounting
to Rs. 3.22 lacs.(previous year Rs. 5.32 lacs)
12. 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
For and on behalf of
the Board of Directors
Date : April 26, 2007 PALLAVI JHA
Place : Mumbai. CHAIRPERSON & MANAGING DIRECTOR
1, Construction House,
Walchand Hirachand Marg,
Ballard Estate,
Mumbai 400 001