Directors' Report Dear Members, Your Directors are pleased to present the Company's 20th Annual Report on business and operations of the Company, together with the audited accounts for the financial year ended March 31, 2015. Dividend and Reserves During the year under review, your Directors wish to propose Dividend of 5% for the financial year 2014-15 (amounting to Re.0.50 (Fifty Paise) per equity share of Rs. 10/- each fully paid). The Board recommends same for approval of the Shareholders in the ensuing Annual General Meeting. The Dividend will be paid to the members whose names appear in the register of members as on 21st August, 2015. The due date for transfer of unpaid dividend to Investor Education and Protection Fund (IEPF) for last year is given in the Corporate Governance Report. Shareholders who have not encashed their Dividend Warrants are requested to have them revalidated and encashed to avoid transfer to IEPF. During the year under review, no amount was transferred to General Reserve. Material Changes and Commitments No material changes and commitments affecting the financial position of the Company occurred between the end of the financial statements to which this financial statements relate on the date of this report. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings / Outgo The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3) (m) of the Companies Act 2013 read with rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure-1 and is attached to this report. Corporate Governance Pursuant to Clause 49 of the Listing Agreement with Bombay Stock Exchange, your company adheres to all the Corporate Governance Code as prescribed by the Bombay Stock Exchange and Securities and Exchange Board of India (SEBI). A detailed Corporate Governance Report forms part of this Annual Report. A certificate from Practicing Company Secretary regarding Compliance of the conditions of Corporate Governance as stipulated by Clause 49 of the Listing Agreement is attached to this report. Number of Meetings of the Board The Board met five times during the Financial Year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act 2013. Extract of Annual Return The details forming part of the extract of the Annual Return in Form MGT - 9, as required under Section 92(3) of the Companies Act, 2013 is included in this report as Annexure - II and forms an integral part of this report. Credit Rating During the year under review the Company has sustained its Long Term Credit Rating of BWR Triple B Minus (BWR BBB-) (Stable). The moderate credit rating of Triple B Minus (BBB-) awarded by Brickwork Ratings India Private Limited reflects the moderate degree of safety regarding timely servicing of financial obligations. The Company's short term credit rated as BWR A 3 by Brickwork Ratings India Private Limited, has also been reaffirmed. Corporate Social Responsibility Initiatives Provisions relating to Corporate Social Responsibility Initiatives are not applicable to your company. Hence your company has not initiated any action thereon. Management Discussion and Analysis Report Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the Bombay Stock Exchange is presented in a separate section forming part of this Annual Report. Subsidiary Company As on 31st March 2015, company has no subsidiary/subsidiaries within the meaning of the Companies Act 2013. Hence requirement of reporting the statement and other statutory financial statements of a subsidiary does not arise. Further there are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). Public Deposit The Company has not accepted any deposits from the Public within the meaning of Section 73 of the Companies Act 2013 for the year ended 31st March, 2015. Directors' Responsibility Statement Pursuant to the requirements under Section 134(5) of Companies Act 2013 with respect to the Directors' Responsibility Statement, it is hereby confirmed that: a) In the preparation of the annual accounts for the Financial Year 2014-15, the applicable accounting standards had been followed and there are no material departures; b) 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 and of the profit and loss of the company for that period; c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; d) The Directors had prepared the annual accounts on a going concern basis; e) 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 f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Board of Directors Company's Policy relating to appointment/re-appointment of Directors, Payment of Managerial Remuneration, Induction, Performance Evaluation and other related matters are as mentioned below: A. Inductions At the 19th Annual General Meeting held on 23rd September, 2014, Shareholders approved appointment of Mythily Ramesh as an Independent Director on the Board. We thank the Shareholders for their support in confirming Mythily Ramesh's appointment at the Annual General Meeting held on 23rd September, 2014. Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Rule 8 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Articles of Association of the Company, Ram N Agarwal has been appointed as Chairman and Managing Director of the Company with effect from 16th February, 2015 by the Board of Directors at their meeting held on 14th February, 2015 on the recommendation of the Nomination and Compensation Committee. A separate resolution seeking members approval for confirmation of his appointment has been included in the Notice of the 20th Annual General Meeting of the Company along with his brief profile. Prashee Agarwal has been appointed as an Additional Director with effect from 18th May, 2015, based on the recommendation of the Nomination and Compensation Committee. Pursuant to Section 161(1) of the Companies Act 2013, Prashee Agarwal will hold office upto the date of ensuing Annual General Meeting (AGM) of the Company and is eligible for appointment as Director. Board recommends her appointment and accordingly resolution seeking approval of members for her appointment has been included in the Notice of the 20th Annual General Meeting of the Company along with her brief profile. B. Re-appointment Pursuant to Sections 149, 152 and other applicable provisions, if any, of the Companies Act 2013, one third of such of the Directors as are liable to retire by rotation, shall retire every year and, if eligible, offer themselves for re-appointment at every Annual General Meeting. Consequently Dr. A L Rao, Non Executive Director will retire by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-appointment in accordance with the provisions of the Companies Act 2013. Section 149(6) of the Companies Act 2013 provides for appointment of Independent Directors. Section 149(10) of the Companies Act 2013 provides that Independent Directors shall hold office for a term of upto five consecutive years on the Board of a Company and shall be eligible for re-appointment on passing resolution by shareholders of the Company. At the 19th Annual General Meeting held on 23rd September, 2014, company re-appointed H V Gowthama, Sudhir Prakash and appointed Mythily Ramesh as Independent Directors. Shankar Jaganathan completes a term of five consecutive years and it is proposed to re-appoint Shankar Jaganathan as an Independent Director for a further term of five consecutive years, subject to approval of members at the 20th Annual General Meeting of the Company. Further, according to Section 149(11), no Independent Director shall be eligible for appointment for more than two consecutive terms of five years. Section 149(13) states that the provisions of retirement by rotation as defined in section 152 (6) and (7) shall not apply to the Independent Directors. The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of 'Independence' as prescribed both under Section 149(6) of Companies Act 2013 and under Clause 49 of the Listing Agreement signed with the Bombay Stock Exchange Limited (BSE). C. Resignation P K Gopalakrishnan, Managing Director, resigned from the services of the Company effective from 1st January, 2015. The Board places on record its appreciation for the services rendered by P K Gopalakrishnan during his tenure with the Company. D. Performance Evaluation of Director Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the Listing Agreement, performance evaluation of the Board, its Committees and individual Directors was conducted. A separate meeting of the Independent Directors was convened, which reviewed the performance of the Board as a whole, the Non-Independent Directors and the Chairman of the Company against the objectives set at the beginning of the year. E. Committees of the Board During the year under review, the Board of Directors of your Company reconstituted the Committees of the Board. The details of the powers, functions, composition and meetings of the Committees of the Board held during the year are given in the Report on Corporate Governance section forming part of this Annual Report. F. Independent Directors' Declaration Independent Directors have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) and Clause 49 of the Listing Agreement. Further, there has been no change in the circumstances which may affect their status as Independent Director during the year under review. Relationship between the Directors Inter-se None of the Directors are related with each other within the meaning of the term "relative" as per Section 2(77) of the Companies Act, 2013 and Clause 49 (VIII)(E)(2) of the revised Listing Agreement except Prashee Agarwal, whose confirmation of appointment is sought. Prashee Agarwal is the daughter of Ram N Agarwal, Chairman and Managing Director of the company. Particulars of Loans, Guarantees and Investments Your company has not provided Loans, Guarantees and has not made any Investments under Section 186 of the Companies Act 2013 during the Financial Year 2014-15. Statutory Auditors and their Report Pursuant to the provisions of Section 139 of the Companies Act 2013 and rules framed thereunder, M/s. N M Raiji & Co, Chartered Accountants, Mumbai (Firm Registration Number: 108296W) were appointed as the Statutory Auditors of the Company in the 19th Annual General Meeting of the Company until the conclusion of 21st Annual General Meeting, subject to ratification of their appointment at every Annual General Meeting. As required under the provisions of Section 139 of the Companies Act 2013, the company has obtained written confirmation from M/s N M Raiji & Co, Chartered Accountants, Mumbai that their appointment, if made would be in conformity with the limits specified in the said section. The Observations of the Auditor, together with notes to accounts referred to in the Auditor's Report are self explanatory and do not call any further explanation from the Directors. Cost Auditors M/s. Rao, Murthy and Associates, Cost Accountants, Bangalore have been appointed as Cost Auditors for the Financial Year 2015-16 by the Audit Committee to conduct Audit of Cost Accounting Records maintained by the Company, in respect of various products/services as prescribed under Cost Audit Rules, 2011. The Board of Directors, on the recommendation of the Audit Committee, has appointed M/s. Rao, Murthy and Associates, Cost Accountants, Bangalore as the Cost Auditor to audit the Cost Accounts of the Company for the Financial Year 2015-16 at a remuneration of Rs. 1,50,000/- plus service tax as applicable and reimbursement of out of pocket expenses. As required under the Companies Act 2013, a resolution seeking member's approval for the remuneration payable forms part of the Notice convening the 20th Annual General Meeting. The Cost Audit Report for the Financial Year 2014-15, in respect of the various products/services prescribed under Cost Audit Rules, 2011 shall be filed with MCA as per the requirements of applicable laws. Secretarial Auditors Pursuant to the provision of Section 204 of the Companies Act 2013 and rules made there under, the Company has appointed S Kannan, Practicing Company Secretary, Bangalore (C.P. No. 13016) as the Secretarial Auditor of the Company to conduct the Secretarial Audit as prescribed under Section 204 of the Companies Act 2013. The Secretarial Audit Report for the Financial Year ended 31st March, 2015 in Form MR 3 is presented in Annexure - III attached to this report. Policies of Company Your Company has posted the below mentioned policies on its website www.wepsolutions.co.in under the heading 'Investor Corner'. 1. Code of Conduct for Directors and Senior Management Personnel 2. Whistle Blower’s Policy 3. Anti – Sexual Harassment Policy 4. Related Party Transaction Policy 5. Compensation Policy 6. Internal Code for Prevention of Insider Trading 7. Risk Management Policy Research and Development WeP has dedicated Research & Development team focused on Retail, Printer and Application specific printer products solutions. WeP R&D has complete in-house facility for executing projects from concept to product involving various engineering domains like Electro-magnetics, Power Electronics, Thermal and Vibration. WeP with 18 years of rich experience in design and development of mechatronics products has delivered 320 varieties of products. WeP design team has delivered products deals with dynamics of mechanical components and its behavioral study with electronics for all extreme conditions and adherence to the International Standards and Certifications. R&D team has executed several application specific printer projects for Voting Machine, Petrol bunk, Retail automation, Pharmacy and Dairy segments. Internal Control System and Their Adequacy The Company has proper and adequate internal control system, which ensures that all assets are safeguarded and protected and that the transactions are authorized, recorded and reported correctly. M/s Gnanoba & Bhat, Chartered Accountants, Bangalore have been re-appointed as the Internal Auditors for the Financial Year 2015-16 by the Board on the recommendation of the Audit Committee to oversee and carry out Internal Audit activities. The audit is based on an internal audit plan, which is reviewed each year in consultation with the Audit Committee. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the Audit and Compliance is ensured by direct reporting of Internal Auditor to the Audit Committee of the Board. Employee Stock Option Plan During the year the company has granted 254,000 ESOP option to its employees under the ESOP Scheme 2011. As required under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the applicable disclosures as on 31st March, 2015 Related Party Transactions All transactions entered with Related Parties for the year under review were on arm's length basis and in the ordinary course of business and that the provision of Section 188(1) of the Companies Act 2013 are not attracted. Further, there are no material related party transactions during the year under review with the Promoters, Directors and Key Managerial Personnel. Related Party Transactions are placed before the Audit Committee and the Board for review and approval. Form AOC 2 pursuant to clause (h) of Section 134(3) of the Companies Act 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 is furnished in Annexure - IV and is attached to this report. Vigil Mechanism / Whistle Blower Policy The Company promotes ethical behavior in all its business activities and has put in place a mechanism for reporting illegal or unethical behavior. The Company has a Whistle Blower Policy under which the employees are free to report to the management instances of unethical behavior, actual or suspected fraud or violation of the Company's code of conduct or ethical policy. Employees may also report illegal or unethical behavior to the Chairman of Audit Committee. During the year under review, no employee was denied access to the Audit Committee. During the Financial Year 2014-15, Company has received one complaint. Complaint received has been disposed of after taking appropriate action and no complaint remain pending as on 31st March, 2015. Anti-Sexual Harassment Policy The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment of women at workplace and to provide a platform for redressal of complaints and grievances against sexual harassment. During the Financial Year 2014-15, Company has not received any complaint on sexual harassment. Significant and Material Orders Passed by the Regulators or Courts There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. Particulars of Employees The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, shall be provided on request. The Company is not having any employee drawing remuneration exceeding the limits as specified under the Companies Act 2013. The applicable disclosures as on 31st March, 2015 pursuant to the provisions of Companies Act 2013 is furnished in Annexure - V and is attached to this report. Depository System The Company's shares are tradable compulsorily in electronic mode. In India there are two depositories i.e. National Securities Depositories Limited (NSDL) and Central Depository Services (India) Limited (CDSL). To facilitate trading in DEMAT form, Company have established connectivity with both the depositories. Currently about 95.85% of the Paid up Capital is held in electronic mode. Human Resources The Company's HR Policy is to build a high performing organization, by motivating each individual to contribute to the achievement of the departmental as well as Company's goals. There is effective performance management system to monitor the performance levels and reward as appropriate. Your Directors take this opportunity to record their appreciation for the contribution of all employees of your company during the year. Industrial Relations Your company maintained healthy, cordial and harmonious industrial relations at all the levels. The enthusiasm and efforts of employees have enabled the Company to remain at the leadership position in the industry. It has taken various steps to improve productivity across organization. Green Initiative Ministry of Corporate Affairs ("MCA") has announced "Green Initiative in Corporate Governance" by allowing paperless compliances by companies vide circular dated April 21, 2011 stating that a Company is in compliance with Section 20 of the Companies Act 2013, if the service of documents has been made through electronic mode. Electronic Copies of the Annual Report 2014-15 and the Notice of 20th Annual General Meeting are sent to the members whose e-mail addresses are registered with Depository Participant(s). For members who have not registered their e-mail addresses, physical copies of the Annual Report 2014-15 and the Notice of 20th Annual General Meeting are sent in the permitted mode. Members requiring physical copies can send a request to the Company. Acknowledgments Your Directors thank all the Shareholders for the continued confidence and trust placed by them in the Company. The Directors sincerely appreciate the high degree of professionalism, commitment and dedication displayed by employees at all levels. Your Directors record their sincere appreciation to the Central and State Governments, banks, institutions, stakeholders and business associates for their whole-hearted support and co-operation. For and on Behalf of the Board of Directors Ram N Agarwal Chairman and Managing Director Place: Bangalore Date: 25th July, 2015 |