Walchandnagar Industries Ltd Directors Report.

To:

The Members of

Walchandnagar Industries Limited

Your directors take pleasure in presenting the 112th Annual Report on the business and operations of your Company together with the Audited Financial Statements for the year ended March 31,2021.

1. Financial Results:

The Companys financial performance, for the Year ended March 31, 2021 is summarized below:

Year ended 31.03.2021 Year ended 31.03.2020
Rs.in Lakhs Rs.in Lakhs
Income: 35,067 31,822
Profit/(Loss) before Depreciation, Interest, Exceptional Item and Exchange currency fluctuations 4,685 4,780
Less: Interest 7,905 8,652
Depreciation 2,297 2,300
Exceptional Item - 979
Profit/(Loss) before Exchange Currency -fluctuations (5,517) (7,150)
Less: Exchange Currency Fluctuation Loss /(Gain) 208 (604)
Profit/(Loss) before Tax (5,724) (6,546)
Less: Tax (Net) - -
Profit/(Loss) after Tax (5,724) (6,546)

2. COVID-19:

In the Financial Year 2020-21, spread of COVID-19 has severely impacted the economy around the globe. In our country, businesses were forced to close the operations for long periods of time due to lockdown declared by Govt. of India/ State Government. Measures taken to contain the spread of the virus, including travel bans, quarantines, social distancing, and closures of non-essential services have triggered significant disruptions to businesses, resulting in an economic slowdown. For the Company, the focus shifted to ensure the health and well-being of all employees. Therefore, work from home directives was issued to all the staff members across all offices and manufacturing locations wherever possible.

Due to second wave of Covid since April, 2021 and lock down declared by the State Government, the business will have some negative impact in the first quarter of the current financial year 2021-22.

3. Financial Performance & Highlights:

During the year under review, the revenue for the Financial Year 2020-21 was Rs.35,067 lakhs as against the previous financial year 2019-20 of Rs.31,822 lakhs.

The consequences of the COVID-19 outspread have adversely affected the supply chain, Production and logistics during lockdown period and therefore, Companys operating results have been negatively impacted. The Company had sales deferral of Rs.5,646 lakhs and operating losses of Rs.1,694 lakhs due to COVID-19 quantified till March 31,2021. The adverse impact of COVID-19 Second Wave is continuing in the first quarter of the current FY 2021-22.

4. Current Period:

The orders on hand as on March 31, 2021 were at Rs.755.48 crores as compared to Rs.888 crores as on March 31,2020.

5. Exports and Overseas Projects:

During the year under review, the Company achieved an export turnover of Rs.7.31 crores as against Rs.13.04 Crores, in the previous year. The export orders on hand as on March 31, 2021 are at Rs.319.57 crores.

6. Dividend and Reserves:

During the Year under review your Company has suffered a (loss) after tax of Rs.5,724 lakhs. Hence, no dividend is recommended for the Year ending March 31, 2021 by the Board.

During the Year under review, the Company has suffered a loss hence not recommended any amount to be transferred to the General Reserve of the Company.

7. Subsidiary, Joint Ventures and Associate Companies:

As on March 31, 2021, your Company do not have any Subsidiary, Joint Venture or Associate Company. During the year under review, none of the Companies have become or ceased to be Companys Subsidiary, Joint Venture and Associate Company.

8. Extract of Annual Return:

Pursuant to Section 92(3) read with Section 134(3) (a) of the Act as amended, the Annual Return as on March 31, 2021 is available on the Companys website and the web link for the same is https://walchand.com/wp-content/ uploads/2021/07/Annual-Return-2021.pdf .

9. Management Discussion & Analysis:

Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (Listing Regulations) is enclosed as Annexure A to this report.

10. Finance & Accounts:

(i) Fixed Deposits:

Your Company did not invite or accept deposits from the public during the financial year under review.

(ii) Income Tax Assessments:

Income tax assessment up to the Assessment Year

2017- 18 has been completed and for Assessment Year

2018- 19 it is under process as on 31/03/2021. Appeal proceedings before Commissioner of Income Tax (Appeals) for Assessment Year 2014-15 to Assessment Year 2016-17 were in progress during the F.Y. 2020-21.

11. Human Resources Development:

During the Financial Year 2020-21, as part of process improvement the HR Department upgraded various forms, formats and policies to match with the current business requirements. Also, as part of Health & Wellness, various awareness programmes were completed for the employees like Stress Management & Naturopathy session.

Further due to pandemic situation Employee Engagement activities were conducted online through Microsoft Teams like Womens Day, Bollywood Quiz, Cricket Quiz, Know your founder, Antakshari, etc. Also, HR has utilized Microsoft 365 services like Share Point, Power Automate, Microsoft Forms, Power BI, etc. for automating process and increasing efficiency.

The true focus of Human Resources Management is motivating, bringing in Best HR Practices & retaining the best talent in the Industry.

12. Directors Responsibility Statement:

Pursuant to the requirement under Section 134 (3) (c) of the Companies Act, 2013, the Directors hereby confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; if any

ii) 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 March 31,2021 and of the loss for the Year ended on that date;

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the annual accounts on a going concern basis;

v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Based on the framework of Internal Financial Controls and compliance systems established and maintained by the Company with its inherent weaknesses, work performed by the Internal, Statutory and Secretarial Auditors including audit of Internal Financial Controls over financial reporting by Internal Auditors and the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companys Internal Financial Controls were adequate and effective during the Year ended on March 31,2021.

13. Corporate Governance:

Your Directors believes that Corporate Governance is the basis of stakeholder satisfaction. The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance Requirements as set out by the Securities and Exchange Board of India (SEBI). Your Company has obtained a certification from Jayesh Sanghrajka & Co. LLP, Chartered Accountants, Statutory Auditors, on compliance with Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with Schedule V of the Listing Regulation. The Report of Corporate Governance along with Certificate from the auditors of the Company regarding compliance of conditions of corporate governance is enclosed as Annexure B to this Report.

14. Corporate Social Responsibility:

The Companies Act, 2013 mandates that every Company, who meet certain eligibility criteria needs to spend at least 2% of its average net profit for the immediately preceding three financial years on Corporate Social Responsibility activities. In view of losses, statutorily no amount is required to be spent by the Company. However, Corporate Social Responsibility is an integral part of the Company.

Over the years, the Company has taken and continues to take several initiatives to support Environment, Education and Health related activities in order to fulfill its corporate social commitments.

Health Activities:

Due to the outbreak of novel Coronavirus (COVID-19), the Company had handed over the Hospital situated at Walchandnagar to the Government to use as a quarantine center as well as an OPD for Covid Patients, which has benefitted more than 2000 patients. Further, Company has set up camps for conducting Antigen and RTPCR test for Employees and their families in Walchandnagar. Further, Company has provided vaccination to around 800 number of employees and family members in Walchandnagar. Further, for spreading awareness related to the pandemic a vehicle is on continuous patrolling in the colony as well as the market area of Walchandnagar. Further, Blood Donation Camp was organized at our Instrumentation Division, Dharwad on 20.02.2021.

Education:

The schools established by the Company continued to impart education up to Higher Secondary grade to children staying in Walchandnagar and in nearby villages. The Company currently provides education to 3779 children. During the academic year 2020-21, in Shree Wardhman Vidyalaya & Jr. College total 2465 students were studying out of which 1187 were Girls and 1278 were Boys. Whereas, in Bharat Childrens Academy & Jr. College, Walchandnagar total 1314 students were studying out of which 763 were boys and 551 were girls.

Environment:

To maintain a pollution free atmosphere and to spread awareness about environment protection, we had undertaken tree plantation and organized seminars on pollution control & disposal of hazardous waste.

During the year, Company inaugurated AYEES (Parwatakka & Radhakka) Medicinal plant Garden on 20-08-2020 in Instrumentation Division, Dharwad.

The CSR Policy is available on the website of the Company and the link for the same is https://walchand.com/wpcontent/ uploads/2020/04/CSR-Policy.pdf

15. Energy, Technology & Foreign Exchange:

Pursuant to Section 134 (3) (m) of the Companies Act, 2013, read with the Companies (Accounts) Rules 2014, information on conservation of energy, technology absorption, foreign exchange earnings and out-go is enclosed as Annexure C to this Report.

16. Personnel:

Employee relations remained harmonious and satisfactory during the year and your Board would like to place on record their sincere appreciation for sustained efforts and valued contribution made by all the employees of the Company.

17. Directors and Key Managerial Personnel:

1) Independent Directors:

a) Declaration by Independent Directors:

Your Board has reviewed the declarations made by the Independent Directors and is of the view that they meet the criteria of Independence as provided in Section 149 of the Companies Act, 2013 and Rules made there under and Regulation 16 (1) of Listing Regulations (including any statutory modification(s) or re - enactment(s) thereof for the time being in force).

2) Retirement by rotation:

Pursuant to Article 86 of the Articles of Association of the Company and Section 152 of the Companies Act, 2013, Mr. G. K. Pillai is due to retire by rotation at the 112th Annual General Meeting and being eligible, have offered himself for re-appointment.

Brief profile of the proposed appointees together with other disclosures in terms of Regulation 36 (3) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 are mentioned in the Notice which is part of this Annual Report.

18. Number of Meetings of the Board:

The Board met six (6) times during the year from April 01, 2020 to March 31,2021 viz. on April 17, 2020; June 26, 2020; August 14, 2020; November 10, 2020; February 10, 2021 and March 23, 2021 through Video Conferencing.

19. Committees of the Board:

The Company has several Committees which have been constituted in compliance with the requirements of the relevant provisions of applicable laws and statutes.

- Audit Committee which comprises of two Independent Directors i.e. Mr. Dilip J. Thakkar (Chairman of Committee) and Dr. Anil Kakodkar (Member), and Chairman, Mr. Chakor L. Doshi (Member).

- Stakeholders Relationship Committee which comprises of two Independent Directors i.e. Dr. Anil Kakodkar (Chairman of Committee) and Mr. Dilip J. Thakkar (Member) and Chairman, Mr. Chakor L. Doshi (Member).

- Nomination & Remuneration Committee which comprises of two Independent Directors i.e. Dr. Anil Kakodkar (Chairman of Committee), Mr. Dilip J. Thakkar (Member) and Chairman, Mr. Chakor L. Doshi (Member).

- Corporate Social Responsibility Committee which comprises of an Independent Director, Mrs. Rupal Vora (Chairperson of Committee), Managing Director & C.E.O., Mr. Chirag C. Doshi (Member); and Director, Mr. G. K. Pillai (Member).

20. Board Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a structured questionnaire was prepared. The Performance Evaluation of the Independent Directors was completed. Independent Directors Meeting considered the performance of Non-Independent Directors and the Committees and Board as a whole, reviewed the performance of the Chairman of the Company, taking into account the views of Executive Directors and Non-Executive Directors and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board.

The Nomination & Remuneration Committee has determined a process for evaluating the performance of every Director, Committees of the Board and the Board on an annual basis.

21. Vigil Mechanism:

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, in accordance with Section 177 of the Companies Act 2013, and the Listing Regulations , the Board of Directors has formulated a Whistle Blower Policy to report genuine concerns or grievances. Protected disclosures can be made by a whistle blower through an e-mail, or telephone line or a letter to the Chairman of the Audit Committee or the Company Secretary of the Company or any member of the Audit Committee. The Policy on vigil mechanism / whistle blower policy may be accessed on the Companys website at the link https:// www.walchand.com/wp-content/uploads/2019/03/Whistle- Blower-Policv-Effective-From-April-1-2019-.pdf.

22. Particulars of Employees Remuneration:

(A) The ratio of the remuneration of each Director to the median employees remuneration and other details in terms of Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this Report as Annexure D.

(B) The information as required under Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be provided upon the request by any member of the Company. In terms of Section 136 (1) of the Companies Act, 2013, the Report and the Accounts are being sent to the members excluding the said Annexure. Any member interested in obtaining copy of the same may write to the Company Secretary at the Registered Office of the Company. Upon such request Information shall be furnished.

23. Particulars of Contracts and Arrangements with Related Parties:

All contracts / arrangements / transactions entered into / by the Company during the Financial Year under review with Related parties were on an arms length basis and in the Ordinary Course of Business. There were no materially significant related party transactions which could have potential conflict with interest of the Company at large.

All Related Party Transactions were placed before the Audit Committee for approval. The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website at the following link: https:// walchand.com/wp-content/uploads/2020/07/Related-Party- Transaction-Policy-wef-01.04.2020.pdf

Your Directors draw attention of the members to Note no. 45 to the Financial Statement which sets out related party disclosures.

24. Nomination & Remuneration Policy:

The Board has framed a policy on the recommendation of the Nomination & Remuneration Committee, which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection, appointment and remuneration of Board Members / Key Managerial Personnel and other senior employees.

Objectives:

The Nomination and Remuneration Committee and this Policy is in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and Regulation 19 of SEBI (Listing Obligations & Disclosure Requirements), Regulation, 2015.

The Key Objectives of the Committee are:

a) to formulate guidelines in relation to appointment and removal of Directors, Key Managerial Personnel and Senior Management.

b) to evaluate the performance of the members of the Board and provide necessary report to the Board for further evaluation of the Board.

c) to recommend to the Board the all Remuneration payable in whatever form payable to the Directors, Key Managerial Personnel and Senior Management.

Role of Committee:

The role of the Committee is explained in the Corporate Governance Report.

Nomination Duties:

The duties of the Committee in relation to nomination matters include:

a) Ensuring that there is an appropriate induction & training programme in place for new Directors and members of Senior Management and reviewing its effectiveness.

b) Ensuring that on appointment to the Board, NonExecutive Directors receive a formal letter of appointment in accordance with the Guidelines provided under the Companies Act, 2013 and SEBI Guidelines.

c) Identifying and recommending Directors who are to be put forward for retirement by rotation.

d) Determining the appropriate size, diversity and composition of the Board.

e) Setting a formal and transparent procedure for selecting new Directors for appointment to the Board.

f) Developing a succession plan for the Board and Senior Management and regularly reviewing the plan.

g) Evaluating the performance of the Board and Independent Directors.

h) Making recommendations to the Board concerning any matters relating to the continuation in office of any Director at any time including the suspension or termination of service of an Executive Director as an employee of the Company subject to the provision of the law and their service contract.

i) Delegating any of its powers to one or more of its members or the Secretary of the Committee.

j) Recommend any necessary changes to the Board.

k) Considering any other matters as may be requested by the Board.

Remuneration Duties:

The duties of the Committee in relation to remuneration matters include:

a) to consider and determine the Remuneration Policy, based on the performance and also bearing in mind that the remuneration is reasonable and sufficient to attract, retain and motivate members of the Board and such other factors as the Committee shall deem appropriate.

b) to approve the remuneration of the Senior Management including Key Managerial Personnel of the Company maintaining a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company.

c) to delegate any of its powers to one or more of its members or the Secretary of the Committee.

d) to consider any other matters as may be requested by the Board.

e) to consider and recommend to the Board for Professional indemnity and liability insurance for Directors and senior management.

The Nomination and Remuneration policy is available on the website of the Company and the weblink for the same is https://www.walchand.com/wp-content/uploads/2019/03/ Nomina tion-Remuneration-Policy-Effective-From- April-1-2019.pdf

25. Risk Management:

Risk Management policy was approved in the Board Meeting held on August 14, 2015 wherein all material Risks faced by the Company were identified and assessed. For each of the risks identified, corresponding controls were assessed and policies and procedures were put in place for monitoring, mitigating and reporting risk on a periodic basis.

26. Internal Financial Control Systems:

Details of the Internal Financial Control Systems is explained in the "Management Discussion and Analysis" which is enclosed as Annexure A to this report.

27. Insurance:

The properties, stocks, stores, assets, etc. belonging to the Company continue to be adequately insured against fire, riot, civil commotion etc.

28. Dematerialization of Shares:

The Companys shares are listed on BSE Limited and National Stock Exchange of India Ltd. and the Companys Registrar and Share Transfer Agents have connectivity with National Securities Depository Ltd. & Central Depository Services (India) Ltd. The ISIN is INE711A01022. As on March 31,2021, total dematerialized equity shares are 37524545 representing 98.57%.

29. Companys Website:

The Company has its website namely www.walchand. com. The website provides detailed information about the business activity, locations of its offices. The Quarterly Results, Annual Reports, Shareholding patterns and Investor Presentations, all other communication with the Stock Exchanges and various policies are placed on the website of the Company and the same are updated periodically.

30. Means of Communication:

The Company has designated investors@walchand.com as an email id for the purpose of registering complaints by investors and displayed the same on the website of the Company.

31. Auditors and Auditors Report:

Statutory Auditor:

M/s. Jayesh Sanghrajka & Co. LLP, Chartered Accountants, Mumbai was appointed in 108th Annual General Meeting (AGM) as the Statutory Auditors of the Company to hold office from the conclusion of 108th AGM until the conclusion of the 113th AGM.

Auditors Report:

The notes forming part of the accounts referred in the Auditors Report are self explanatory and give complete information. There are no qualifications, reservation or adverse remarks made by statutory auditors in the Audit Report except matter referred in "Matter of Emphasis" para in Audit Report.

Cost Auditors and Cost Audit Report:

M/s. S. R. Bhargave & Co., Cost Accountants have been duly appointed as Cost Auditors for conducting Cost Audit in respect of products manufactured by the Company which are covered under the Cost Audit Rules for current financial year ending March 2022. They were also the cost auditors for the previous Year ended March 2021. As required by Section 148 of the Companies Act, 2013, necessary resolution has been included in the Notice convening the Annual General Meeting, seeking ratification by the Members to the remuneration proposed to be paid to the Cost Auditors for the financial year ending March 2022.

The Cost Audit Reports for the financial year ended March 2021, will be filed within the stipulated time i.e. on or before September 30, 2021.

Secretarial Auditor and Secretarial Audit Report:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Board has appointed M/s. V. N. Deodhar & Company, Practicing Company Secretary, to undertake Secretarial Audit of the Company for the year April 01,2020 to March 31, 2021. The Secretarial Audit Report for the year ended March 31,2021 is annexed herewith marked as Annexure E to this Report. No observations / qualifications / reservation / adverse remark were made by M/s. V. N. Deodhar & Company, Secretarial Auditor of the Company in their report. The Board has reappointed M/s. V. N. Deodhar & Co. as Secretarial Auditor for the Financial Year 2021-22 also.

Reporting of Frauds by Auditors:

During the year under review, the Statutory Auditors, the Secretarial Auditor or the Cost Auditors has not reported to the Audit Committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which needs to be mentioned in the Boards Report.

32. Particulars of Loans, Guarantees or Investments by Company:

Particulars of Loans given, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are provided in the notes to Financial Statement (Please refer Notes to the Financial Statement).

33. Employee Stock Option Scheme:

With the perspective of promoting the culture of ownership and to attract, retain, motivate and incentivize senior as well as critical talent, the Company has approved "WIL - Employees Stock Option Plan 2020"

The Nomination and Remuneration Committee inter alia administers and monitors Employees Stock Option Scheme of the Company. The Schemes are in line with the Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("SBEB Regulations"). The Company has received a certificate from the Auditors of the Company that the scheme is implemented in accordance with the SBEB Regulations and the resolution passed by the members. The certificate is available for inspection by members in electronic mode.

34. Prevention of Sexual Harassment of Women at Workplace:

Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

35. Secretarial Standards:

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to Meetings of the Board of Directors and General Meetings, respectively, have been duly followed by the Company.

36. Familiarization Programme for Independent Directors:

To provide insights into the Company to enable the Independent Directors to understand the Companys business in depth which would facilitate their active participation in managing the Company, Company arranges Familiarization Programme for Independent Directors. The details of such familiarization programmes for Independent Directors are posted on the website of the Company viz. https://www.walchand.com/wp-content/uploads/2019/04/ Familiarisation-programme-for-ID.pdf.

37. General:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

4. No significant or material orders were passed by the Regulators/ Courts / Tribunals which would impact the going concern status of the Company and its future operations.

38. Acknowledgement:

Your Directors wish to place on record their deep sense of appreciation for the committed services by the Companys executives, staff and workers.

The Directors regret the loss of life due to COVID-19 pandemic in the Country / Company are deeply grateful and have immense respect for every person who risked their life and safety to fight this pandemic.

Your Directors also place on record their sincere appreciation for the assistance and co-operation received from the banks, financial institutions, customers, suppliers and the shareholders from time to time.

For & on behalf of the Board of Directors

Sd/- Sd/-
Chirag C. Doshi Dilip J. Thakkar
Managing Director & CEO Director
DIN: 00181291 DIN: 00007339
Registered Office:
3, Walchand Terraces,
Date : June 29, 2021 Tardeo Road, Mumbai - 400 034.