DIRECTORS’
REPORT
The
Members of
WALCHAND
CAPITAL LIMITED
Your
Directors present herewith the 85th Annual Report together with the
Audited Statement of Accounts for the year ended March 31,
2005.
1.
FINANCIAL RESULTS
(Rs.
In Lacs)
|
|
2004-05 |
2003-04 | ||
|
Profit/(Loss)
before interest, depreciation and taxation |
|
303.26 |
|
(351.72) |
|
Less:
Interest |
0.21 |
|
0.17 |
|
|
Depreciation |
33.15 |
|
29.38 |
|
|
Provision
for Taxation-current/earlier years |
7.11 |
|
3.50 |
|
|
|
|
|
|
33.05
|
|
Net
Profit /(Loss) |
|
262.80 |
|
(384.77) |
|
Add:
Balance brought forward |
|
190.47 |
|
575.24 |
|
Less:
Transferred to Reserve Fund |
|
- |
|
|
|
Balance
Carried Forward |
|
453.26 |
|
190.47 |
|
Appropriations |
|
|
|
|
|
Dividend |
|
- |
|
- |
|
Dividend
Tax |
|
- |
|
- |
|
Balance
carried forward |
|
453.26 |
|
190.47 |
|
Total |
|
453.26 |
|
190.47 |
2.
DIVIDEND
The
Board of Directors do not recommend any dividend for the Financial Year ended
March 31, 2005.
a) The
New Corporate Perspective.
Your
Company has completed the merger of its subsidiaries as per the Scheme of
Amalgamation duly approved by the Hon’ble High Court of Juridicature at Bombay.
Alongwith the merger of Vikhroli Metal Fabricators Limited with Walchand &
Company Private Limited, your Company now has fully consolidated its operations
and aligned its structure to its new business direction of Training and
Development.
The
amalgamation would result in better internal economies such as reduction in
administrative control, reduction in operating and administrative costs,
synergistic operational advantages, better use of infrastructure facilities and
increased optimized productivity of the combined
resources.
Above
all the Company will now be concentrating only on its operations of Dale
Carnegie Training, which has seen an overwhelming market acceptance and business
growth during the last 12 months.
As such
the Company will be seeking to change its current status as an NBFC and
establish its new business identity as Walchand People First Limited, subject to
shareholders and regulatory approval.
The new
identity and focus on the business of Dale Carnegie Training will enable your
Company to exploit the huge growth opportunities offered by the
industry.
b)
Industry Structure and Development
India is
the fastest growing free market democracy in the world, having posted nearly a 7
per cent GDP growth in the year 2004-05 and is estimated to sustain this growth
in 2005 - 06. It offers highest returns on investment – 16.35% as against
China’s 14.25% and Thailand’s 13.3%. It also offers a long-term, sustainable,
competitive advantage, owing to its being a high growth economy and the second
largest Emerging Market in the World. The World Bank estimates that India will
become the fourth largest economy in the World by 2020. India with the total
population of 1 billion people offers a wide market for various products and
services. India has been ranked fourth in terms of purchasing power parity (PPT)
by the World Bank. According to the AT Kearney FDI Confidence Index annual
survey of 2004, India is now the second most attractive FDI location on the
manufacturing front and along with China has been cited as the most attractive
investment destination for medium term attractiveness over 10 years. The
services sector, which has been growing consistently at a rate of 7 per cent per
annum, accounts for half the country’s GDP. Export revenues from the sector are
expected to grow to USD 46 billion by 2007. India is increasingly perceived as
an R&D hub for a wide range of industries.100 of the Fortune 500 besides
other global companies have set up engineering, design and R&D centers in
India. Even on the consumer front, India is ranked as the most optimistic
market. Fifty per cent of our population was born after 1982 and this provides
for an active work force. Over 18.5 million of our work force are graduates from
all faculties offering a huge pool of human resources to the
industry.
c)
Opportunities and Challenges
With all
this potential it has been forecasted that India is set to become a world
economic superpower in a couple of decades. Already there is an ever-increasing
number of globalising Indian corporations. Indian companies acquired 120 firms
abroad across an array of sectors for a consolidated amount of USD 1.6 billion
and are now in the process of expanding their M&A activities. Such industry
trends across sectors bring a great need for building globally competitive
managerial skills and managing people in fast- changing and diverse cultures.
There are few credible 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. Our Dale Carnegie
operations ably fulfill these criteria. The market experience has been very
positive and our services have gained high acceptance with our clients. The key
challenge is continuous and is the rapid expansion of our servicing capacity to
cater to the huge demands of the industry.
With
nearly half of our population under the age of 21 years, there is also an
opportunity for building skills and developing our youth for responsibilities of
adulthood and professional careers. According to a survey conducted by the
Company, students admitted are facing challenges with academic success, career
decisions, peer pressure and parental expectations. With increasing competition
and consumerism, the new generation has many concerns, ranging across building
self-esteem, positive attitude, inter-personal relationships and communication
skills which are not adequately addressed through the formal academic
institution. The attempt is to cater to these needs through strategic
partnerships with schools, colleges, educational institutions and financial
investments from proactive and socially responsible
corporations.
Your
Company now has offices in four cities including Mumbai, Delhi, Bangalore and
Pune. We plan to expand to
Hyderabad, Chennai and Kolkata shortly. With increasing brand awareness and an
excellent service track record the business growth is expected to be exponential
in the short and medium term. This will necessitate a continuous investment in
expanding resources to create an enabling environment for exploiting the growing
business demand.
At a
macro-level, a volatile socio-political situation or shortfall in achievement of
growth targets could result in a possible downturn in the currently booming
economy. This could affect investment in human resources by companies and may
result in cut-down in recruitment levels or training and development
initiatives.
e)
Segment-wise Performance
In the
first full year of operation of the Dale Carnegie Training India operations, the
Company had worked with over 100 companies and trained more than 1700
individuals. The revenue and results for this segment and the Investment
division are reported in the notes to Accounts.
f)
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, and authorization and approval
procedures.
g)
Financial Performance with respect to Operational
Performance
Total
income achieved during the year under review is Rs. 896.52 lakhs as against Rs.
360.19 lakhs in the previous year. The increase in income during this year is
mainly due to Dale Carnegie Training income which increased to Rs. 151.39 lakhs
as against Rs. 16.27 lakhs in previous year and profit on Exchange of Vikhroli
Metal Fabricators shares in the Scheme of arrangement amounting to Rs. 119.50
lakhs
After
providing for taxation of Rs. 7.11 lakhs, the net profit earned by the Company
arrived is Rs. 262.80 lakhs as against a net loss of Rs. 384.77 lakhs as
suffered in the previous year.
The
financial performance of the Company reflects a shift in its focus from
investment activities to training activities. The new Dale Carnegie Training
Division has commenced the operations during the last year and the Company is
expected to make a turnaround in its performance in the near
future.
h) Human
Resources
Your
Company considers its manpower 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. 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. 495.99 lacs as compared
to the last year’s investment of Rs. 517.62 lacs.
The Book
value of the quoted investments for the year under review was Rs.158.79 lacs (previous year Rs.27.56 lacs) and its market valuation was Rs.143.25 lacs (previous year
Rs. 39.82 lacs).
5.
AMALGAMATION
OF SUBSIDIARIES
The
Hon’ble High Court of Juridicature at Bombay has approved the scheme of
amalgamation of Walchand.Com Private Limited and Walchand Securities Private
Limited, the subsidiaries of Walchand Capital Limited with the Company and has
approved the scheme of amalgamation of Vikhroli Metal Fabricators Limited,
subsidiary of Walchand Capital Limited with Walchand & Co. Private Limited.
The scheme is operative from the appointed date i.e. 1st April 2004 as stated in
the scheme of Amalgamation. The Audited Annual Accounts of the Company for the
Financial Year ended March 31, 2005 have been prepared after incorporating the
effect of amalgamation. The Company does not have any subsidiary as a result of
the above amalgamation.
6. 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, 2005, the outstanding liability from 7 fixed depositors was Rs.0.63
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, 2005, 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, 2005 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, 2005, 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 Mr. 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.
Mr.
Shailesh Haribhakti has submitted his resignation from the Directorship of the
Company due to various professional commitments and pre – occupation. The Board
has accepted his resignation with effect from October 27, 2005. The Board
appreciates his invaluable contribution to the Company during the tenure of his
Directorship.
10.
STATUTORY AUDITORS
M/s.
K. S. Aiyar & Co., Chartered Accountants, Mumbai, the retiring Auditors of
the Company have expressed their unwillingness to be reappointed as the Auditors
of the Company vide their letter dated October 27, 2005. The Board of Directors
recommend the appointment of M/s. Haribhakti & Co., Chartered Accountants as
the statutory Auditors of the Company in place of M/s K. S. Aiyar & Co.,
Chartered Accountants, from the conclusion of the ensuing Annual General Meeting
till the conclusion of the next Annual General Meeting. M/s. Haribhakti &
Co., Chartered Accountants have also expressed their willingness to act as
Auditors of the Company.
.
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 utilised and earned foreign exchange
amounting to Rs. 24.02 lacs and Rs.
Nil respectively.
12.
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
: October 27, 2005
PALLAVI
JHA
Place
: Mumbai.
CHAIRPERSON
& MANAGING DIRECTOR
1,
Construction House,
Walchand
Hirachand Marg,
Ballard
Estate, Mumbai 400
001