DIRECTORS’
REPORT
The
Members of
WALCHAND
PEOPLEFIRST LIMITED
Your
Directors present herewith the 86th Annual Report together with the
Audited Statement of Accounts for the year ended March 31,
2006.
1.
FINANCIAL RESULTS
(Rs.
In Lacs)
|
|
2005-06 |
2004-05 | ||
|
Profit/(Loss)
before interest, depreciation and taxation |
|
69.44 |
|
303.26 |
|
Less:
Interest |
1.64 |
|
0.21 |
|
|
Depreciation/Amortisation/ Impairment |
39.16 |
|
33.15 |
|
|
Provision
for Taxation-current/earlier years |
8.30 |
|
7.11 |
|
|
|
|
49.10 |
|
40.47 |
|
Add
: provisions written back |
|
14.66 |
|
-
|
|
Net
Profit /(Loss) |
|
35.00 |
|
262.80 |
|
Add:
Balance brought forward |
|
453.26 |
|
190.47 |
|
Less:
Transferred to Reserve Fund |
|
- |
|
|
Balance
Carried Forward |
|
488.26 |
|
453.26 |
|
Appropriations |
|
|
|
|
|
Interim
Dividend |
|
14.24 |
|
- |
|
Final
Dividend |
|
14.24 |
|
- |
|
Dividend
Tax |
|
4.00 |
|
- |
|
Balance
carried forward |
|
455.78 |
|
453.26 |
|
Total |
|
455.78 |
|
453.26 |
2.
DIVIDEND
2The
Board of Directors recommend 5 % final dividend for the Financial Year ended
March 31, 2006.
a) The
New Corporate Perspective.
Your
Company has completed the merger of its subsidiaries as per the Scheme of
Amalgamation in the year 2004-2005.Your Company now has fully consolidated its
operations and aligned its structure to its new business of Training and
Development. The name of the Company has been changed to “Walchand PeopleFirst
Limited” with effect from February 2, 2006. The new name reflects the true
identity of the Company’s business.
As such
the Company has already applied for delisting as an NBFC from Reserve Bank of
India.
b)
Industry Structure & Development
India is
one of the biggest economies in Asia after China & Japan. With a GDP growth
of over 8.1% in 2005-06, most observers agreed that India is transiting to a
growth rate regime of 8% and perhaps even more on a sustainable basis. If this is demonstrated it will put us
well on the way to becoming a middle-income industrial economy in the next 15
years. Even though our per capita
income may be only at middle income levels, the absolute size of the economy
will make it a much more significant player in the world. India’s high quality technical
resources, familiarity with the English language, the existence of long
established commercial and legal institutions all augur well for India’s
competitiveness in today’s globalised world.
India’s
capital markets strongly reflect the growth. In 2003 the Sensex was at 3000 –
recently it crossed the 12,000 mark, more than 100 companies now have $1 billion
market cap and India’s market cap is over $500 billion. Corporate earnings have
grown in excess of 20 percent in each of the last three years and this growth is
witnessed across most sectors.
Currently,
India’s growth is powered by the industrial output, which generates a quarter of
GDP, and jobs being created in booming technology and back office
services.
India
has enormous potential, but that potential is locked in people. Private enterprise has a big role to
play in educating and developing this potential for creating a pool of
employable and globally competitive skills to sustain a thriving industrial
sector.
c)
Opportunities & Challenges
Today,
India, with a population growth rate of 1.6% is expected to overtake China as
the world’s most populous nation around 2035. Our country, with an average age
of 26 years is young and has started to look on its growing population as a
potential asset. In other Asian countries, the bulge in the working-age
population that India is now experiencing, brought rapid economic growth.
However, to achieve the same, we need to educate our children better. Yet, India has built an elite
tertiary-educated population – we add about 2.3 million bachelor-degree
graduates and some 300,000 engineers each year. India is, therefore, seen as an
emerging management giant and we are already seeing the boom in business process
outsourcing – beyond low expertise call-centers to areas such as financial
management, medical diagnostic services and technology. Companies such as GE and
Microsoft have established R&D centers here. Today, India is also exporting
management expertise, just like we did with our engineers dispersed all over the
world.
At the
same time, within India, companies are witnessing fast growth and global
expansion. Industry is facing a
huge shortage of skilled manpower and management. With higher recruitment needs the war
for talent seems here to stay.
For
India to achieve and sustain its plans for double-digit economic growth over the
next two decades we will need to provide for the increasing demand for skilled
talent.
This is
the potential opportunity for your Company. Organizations traditionally
emphasized technical skills that directly translated to job knowledge. The focus
has now shifted towards Effectiveness, resulting in greater emphasis on
development of soft skills that will improve a person’s managerial performance
and abilities. Training needs are burgeoning with a growing complexity of
requisite soft skills like leadership, innovation, interpersonal skills,
communication, cross - cultural training, selling skills, self – motivation,
teamwork and negotiation skills that companies need amongst their talent
pool. Industry recognizes that to
achieve their visions the only sustainable competitive advantage that cannot be
duplicated in today’s competitive world is the quality, drive, enthusiasm and
leadership ability of the people.
Given
the market opportunity and with increasing brand awareness and an excellent
service track record the business outlook for the Company is exponential in the
short and medium term. Your company
has been investing in nationwide
brand building campaigns using various marketing media to increase our awareness
amongst the key client segments: namely, the corporate sector, and the youth
sector.
We
believe that given the business potential this marketing drive will help us
achieve our growth targets. 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
second full year of operation of the Dale Carnegie Training India operations,
the Company had worked with nearly
200 companies and trained more than 2600 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.
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.
g)
Financial Performance with respect to Operational
Performance
Total
income achieved during the year under review is Rs.586.83 lakhs as against Rs.
896.52 lakhs in the previous year. Total income of the previous year includes
one time income of Rs. 119.5 lakhs towards consideration for Exchange of Shares
in the Scheme of Arrangement and Rs. 529.59 lakhs towards write back of
provisions. The income from Dale
Carnegie Training income has shown increased to
Rs.
317.86 lakhs as against Rs. 152.11 lakhs in previous year, showing an increase
of more than 100% After providing
for taxation of Rs. 8.30 lakhs, the net profit earned by the Company arrived is
Rs. 35.0 lakhs as against a net profit of
Rs.
262.80 lakhs as earned in the previous year.
The Dale
Carnegie Training Division, which commenced the operations two years back shows,
a 100% increase in revenues, achieved breakeven and it has outperformed the
Investment Division in terms of revenue. The Company is expected to continue its
growth 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 37 comprising mainly of senior managers,
qualified trainers, marketing and accounts and administrative staff. Recently we
have added 9 employees in Dale Carnegie Training Division and expect to continue
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. 634.13 lacs as compared
to the last year’s investment of Rs. 495.99 lacs.
The Book value of the quoted investments for the year under review was Rs.69.45 lacs (previous year Rs. 158.79 lacs) and its market valuation was Rs.75.79 lacs (previous year Rs.143.25 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, 2006, the outstanding liability from 3 fixed depositors was Rs.0.28 Lacs. 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.
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, 2006, 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, 2006 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, 2006,
on a going concern basis.
9. DIRECTORS
In
accordance with the Articles of Association of the Company and provisions of the
Companies Act, 1956 Ms. Pallavi Jha and Mr. M.N. Bhagwat retires by rotation at
the ensuing Annual General Meeting and being eligible, offer themselves for
re-appointment. Your Directors recommend their
re–appointment.
Mr. V.K.
Verma has been appointed as Director
of the Company with effect
from 27th January 2006,to fill up the vacancy caused by the
resignation of
Mr.
Shailesh Haribhakti. Mr. V.K. Verma holds office upto the date of forthcoming
Annual General Meeting pursuant to section 260 of the Companies Act, 1956. Your
directors recommend for his appointment.
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., 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.
29.36 lacs and earned foreign exchange amounting to Rs. 5.32 lacs.
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
: April 28, 2006
PALLAVI
JHA
Place
: Mumbai.
CHAIRPERSON
& MANAGING DIRECTOR
1,
Construction House,
Walchand
Hirachand Marg,
Ballard
Estate, Mumbai 400
001