DIRECTORS’
REPORT
The
Members of
WALCHAND
CAPITAL LIMITED
Your Directors present herewith the 84th Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2004.
(Rs. In
Lacs)
|
|
2003-04 |
2002-03 | ||
|
Profit/(Loss)
before interest, depreciation and taxation |
|
(351.72) |
|
(395.75) |
|
Less:
Interest |
0.17 |
|
0.03 |
|
|
Depreciation |
29.38 |
|
26.45 |
|
|
Provision
for Taxation-current/earlier years |
3.50 |
33.06 |
6.06 |
32.54
|
|
|
|
|
|
|
|
Net
Profit /(Loss) |
|
(384.77) |
|
(428.29) |
|
Add:
Balance brought forward |
|
575.24 |
|
1003.53 |
|
Balance carried
forward |
|
190.47 |
|
575.24 |
The
Board of Directors do not recommend any dividend for the year in view of the
losses incurred.
3.
MANAGEMENT
DISCUSSION AND ANALYSIS
a) Industry Structure and
Development
India
has the world's 13th-largest GNP and the economy is expanding at 8% annually,
making it one of the fastest growing economies in the world. Industry and
services sectors are growing in importance and account for 26% and 48% of GDP,
respectively, while agriculture contributes about 25.6% of GDP. The proportion
of Indians living in extreme poverty — on $1 a day or less — has fallen from 36%
a decade ago to about 25% today, even though the overall population has grown,
but a large and growing middle class of 150-200 million has disposable income
for consumer goods. India's gains are all the more amazing given its
still-staggering poverty and infrastructural bottlenecks.
Whether
it's for research and development, analysis or design of critical processes,
India is a hub for a growing number of blue-chip names and drug makers who are
cutting costs by moving research or manufacturing here. Increasingly, India has
its own roster of blue chips, such as information-technology services giants
Infosys, Tata Consultancy and Wipro. India is enjoying a huge success in
knowledge-based industries and now even the basic industries are looking up in
performance. To sustain a high level growth there is felt need for capacity
building of the personnel in different industries, sectors and government
machineries in the country.
With
the phenomenal growth of industry, the requirements for a soft skill to hard
skills capacity enhancement, continuum has to be met to boost the momentum in
growth and national quality of life. Training in soft skills improves the human
life indices by making the interventions across sectors focused and measurable
rapid assessment indicates 40% probable growth in the soft skill training market
in the country. There are a
few credible, global brands operating in the country but most of the training is
undertaken by boutique organizations and individuals lacking in accreditation,
Quality Control and operational size.
Opportunities
for capacity development have never been greater. The information revolution and
the advent of new technologies continue to open up possibilities for individual
and collective empowerment, information exchange and knowledge accumulation that
were previously not imagined. Capacity development builds on and harnesses
rather than replaces indigenous capacity. It is about promoting learning,
boosting empowerment, building social capital, creating enabling environments,
integrating cultures, and orientating personal and societal behaviour.
We
are aiming at enhancing the capacity of all the major sectors in the country and
the south Asian region because there is a felt need of a credible training
platform to ensure a turnaround at a macro and large scale. The 40% growth
opportunity includes the needs in the manufacturing sector, government sector,
governance, development sector and the knowledge industry. The challenge is to
meet the big need with competent, relevant and innovative trainers resulting in
a sustained impact. There is a plan to strategize an out of the box business
plan which takes into account the industry as well as the social sector to reach
the millennium development goals. The attempt is also to cater to the demands
through strategic partnerships with educational institutions, research
institutions, consulting organizations and industry associations to add value to
the portfolio.
The
objectives of capacity building is to pitch the training business at all levels
of the economy to support the institutions and sectors in overcoming the widely
acknowledged and identified shortcomings and contribute to the improvement in
the national output.
Out
strategy for business broadly incorporates the following
tenets:
Broad
based participation and a locally driven agenda
Building
on local capacities
Ongoing
learning and adaptation
Long-term
investments
Integration
of activities at various levels to address complex
problems
The
challenges are daunting but surmountable. The sectors’ sensitization to the need
of integrating training programs in the existing or planned human resources
policy should not be delayed to disrupt tangible impact assessment of the
programs. The governing set up often accepts a large scale intervention like
ours after completing a set up protocols which usually hinders the growth of the
project. This could compel us to spend more resources in enabling
environment.
d) Segment wise
Performance
The Company has commenced its activities under its new business division
“Dale Carnegie Training – India” effective December 2003. The revenue and
results for this segment and the
main activity 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 safe guarded 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, authorization and approval
procedures.
f) Financial Performance with respect to operational
performance
Total income during the year under review 379.37 lakhs as against Rs.109.98 lakhs in previous year. The Operating profit for the year is
Rs.13.47 lakhs. However, as a matter of prudence the Company has provided for
Rs. 393.33 lakhs towards difference in market value and book value of
investments in Mutual Funds and old outstanding dues.
After
providing for taxation of Rs. 3.50 lakhs, the net loss suffered by the Company
arrived at Rs. 384.77 lakhs as against net loss of Rs. 428.29 lakhs suffered in
the previous year. In view of the current strong Reserves and Surplus position
at Rs.1131.84 lakhs, your Company has been well placed to absorb the impact of
the losses on account of the provisions made.
The
financial performance of the Company reflects shift in its focus from investment
activities to training activities. The new Dale Carnegie Training Division has
just commenced the operations during the year and the Company is expected to
make turnaround in its performance in the near future.
Your
Company considers its manpower as its most valuable asset. Personnel policies of your Company are
designed to ensure fairness to and growth of all individuals in the Organisation
and continuously strives to provide a challenging work environment. The Company’s total manpower strength
stands presently at 24 comprising mainly of senior managers, qualified trainers,
marketing and accounts and administrative staff. Your Company expects to continue its
recruitment process 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. 517.62 lacs as compared
to the last year’s investment of Rs. 623.39 lacs. This is due to current year
provision for diminution amounting to Rs. 169.39 lacs.
The Book value of
the quoted investments for the year under review was Rs. 718.51 lacs (previous year Rs. 774.05 lacs) and its market valuation was Rs. 395.79 lacs (previous year
Rs. 244.64 lacs).
5.
SUBSIDIARIES
The
annual accounts of Vikhroli Metal Fabricators Limited, Walchand.Com Private
Limited and Walchand Securities Private Limited for the year ended March 31,
2004 are annexed to this report as required under the Companies Act, 1956.
6.
CONSOLIDATED FINANCIAL STATEMENTS
In
accordance with Accounting Standard 21 – “Consolidated Financial Statements”
Issued by the Institute of Chartered Accountants of India, the audited
Consolidated Financial Statements of the Group are annexed. These Group accounts
have been prepared on the basis of audited financial statements received from
the Subsidiaries, as approved by their respective Boards.
7. 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, 2004, the outstanding liability from 9 fixed depositors was Rs.
0.69 Lac. The entire outstanding liability is on account of matured fixed
deposits which remained unclaimed.
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.
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, 2004, 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 judgements 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, 2004 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, 2004, on a going concern basis.
Note no. ix (a)
to the Auditor’s Report is self-explanatory and does not require any comments
from the Board of Directors.
10.
DIRECTORS
In
accordance with the Articles of Association of the Company and provisions of the
Companies Act, 1956 Mr. M.N. Bhagwat and Mrs. Kamalini Bahubali retire by rotation at the ensuing Annual
General Meeting and being eligible, offer themselves for re-appointment. Your
Directors recommend their
re–appointment.
Mr.
Shailesh Haribhakti has been appointed as Additional Director of the Company
with effect from April 12, 2004. Mr. Haribhakti holds office upto the date of
forthcoming Annual General Meeting pursuant to section 260 of the Companies Act,
1956. Notice has been received from a member signifying his attention to propose
Mr. Shailesh Haribhakti as a candidate for the office of Directorship. Your
Directors recommend for his appointment.
The
Board of Directors at its meeting held on April 29, 2004 re-appointed Ms.
Pallavi Jha as Managing Director of the Company effective July 26, 2004 for a
further period of three years. An appropriate resolution seeking your approval
for re-appointment of Ms. Pallavi Jha is included in the notice convening the
84th Annual General Meeting
11.
STATUTORY AUDITORS
You are
requested to appoint Auditors for the current year and fix their remuneration.
The Auditors of the Company, Messrs K. S. Aiyar & 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 under Section 224 (1–B) of the Companies Act, 1956.
12. 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 utilised and earned foreign exchange
amounting to Rs. 32,91,731/- and Rs. Nil respectively.
13.
DELISTING OF EQUITY SHARES FROM PUNE STOCK EXCHANGE
The equity shares of your Company have been delisted from Pune Stock
Exchange with effect from 16.1.2004 as per approval received from the Exchange.
14.
PARTICULARS OF EMPLOYEES
The
Company has no employee in the category specified under Section 217(2A) of the
Companies Act,1956.
For and on behalf of the
Board of Directors
Date
: July 22, 2004
PALLAVI
JHA
Place
:Mumbai.
CHAIRPERSON
& MANAGING DIRECTOR
1,
Construction House,
Walchand
Hirachand Marg,
Ballard
Estate, Mumbai 400
001.