The Directors take immense pleasure in presenting the Sixty Ninth (69th) Annual Report of the Company and the Audited Statements of Accounts for the financial year ended 31st March, 2022.
1. CORPORATE OVERVIEW
Your Company, Ador Welding Limited (AWL) was incorporated in the year 1951 and has come a long way to become one of India's leading players in the welding industry. Your Company's Vision is “Creating the Best Welding Experience”.
AWL has a huge spectrum of products offering and aims to provide "Complete Welding Solutions" to the "World of Manufacturing" for
enhancing their operational efficiency".
Our presence is there across seventy (70) odd countries and our corporate headquarter is based in Mumbai.
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2.
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FINANCIAL PERFORMANCE
(Rs. in Lakhs)
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Sr.
No.
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Key Financial Indicators
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For the year ended 31st March, 2022
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For the year ended 31st March, 2021
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For the year ended 31st March, 2022
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For the year ended 31st March, 2021
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Standalone
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Consolidated
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2.1
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Sales & Other Income (Net of GST, Discount & Incentives)
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66,689
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45,459
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66,696
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45,507
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2.2
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Profit before exceptional items Interest, Depreciation, Tax & Other Comprehensive Income
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6,380
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2,720
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6,385
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2,749
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2.3
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Exceptional items
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898
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(2,537)
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898
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(2,397)
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2.4
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Profit before Tax (PBT)
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5,823
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(1,568)
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5,821
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(1,406)
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2.5
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Provision for Tax (Including Deferred Tax)
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1,304
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(369)
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1,305
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(368)
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2.6
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Profit / (Loss) after Tax (PAT)
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4,519
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(1,199)
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4,516
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(1,038)
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2.7
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Total Comprehensive Income (Loss)
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4,458
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(1,147)
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4,455
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(986)
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3. DIVIDEND & RESERVE
The Board of Directors is pleased to recommend a Dividend of 125 % (i.e. @ Rs.12.50 per Equity Share) for the Financial Year (FY) 2021-22, subject to the approval of the Members.
The total amount of Dividend, to be disbursed for FY 2021-22, is Rs. 1,700 Lakhs, subject to applicable TDS. Further, the Dividend amount will be paid out of the profits of the Company.
The Dividend for FY 2021-22 shall be paid to those Shareholders and Beneficial Owners, whose
names appear in the Register of Members (RoM) as on the cut-off date for dividend payment.
The Board recommends transfer of 10 % of the Net Profit to General Reserve.
The dividend recommendation is in accordance with the Dividend Distribution Policy ("Policy") of the Company. The said policy is available on the website of your Company at https://www.adorwelding.com/wp-content/ uploads/2021/07/Dividend-Distribution-Policv.pdf
4. SHARE CAPITAL
The paid-up Equity Share Capital as at 31st March, 2022 stood at Rs. 1,359.85 Lakhs. During the financial year under review, the Company has neither issued shares nor convertible securities nor shares with differential voting rights nor granted any stock options or sweat equity or warrants. As at 31st March, 2022, none of the Directors of the Company hold instruments convertible into Equity Shares of the Company.
5. FINANCE & ACCOUNTS
During the year under review, there was no revision in the Credit Rating of the Company. The Rating Agency CARE maintained "A " (Single A Plus; Outlook: Stable) rating for the Company's long term borrowings and "A1 " (A One Plus) rating for the Company's short term borrowings.
As mandated by the Ministry of Corporate Affairs (MCA), the financial statements for the financial year ended 31st March, 2022 have been prepared in accordance with the Indian Accounting Standards (Ind AS), notified under Section 133 of the Companies Act, 2013 (hereinafter referred to as "the Act"), read with the Companies (Accounts) Rules, 2014, as amended from time to time. The estimates and judgements relating to the Financial Statements are made on a prudent basis, so as to reflect a true & fair form and substance of transactions and reasonably present the Company's state of affairs, profits & cash flows for the financial year ended 31st March, 2022.
The Notes to the Financial Statements adequately cover the Standalone and Consolidated Audited Statements and form an integral part of this Report.
6. OPERATIONS
In FY 2021-22, the total Sales & Other Income increased by 47 % as compared to last FY 2020-21. The year ended with Sales & Other Income of Rs. 66,689 Lakhs. (Rs. 45,459 Lakhs)*.
The Company's Net Sales and Other Income during FY 2021-22 comprised the following:
6.1 Welding Consumables at Rs. 53,540 Lakhs (Rs. 35,220 Lakhs)*
6.2 Equipment and Welding Automation at Rs. 9,854 Lakhs (Rs. 7,049 Lakhs)*
6.3 Project Engineering Business at Rs. 2,754 Lakhs (Rs. 2,459 Lakhs)*
6.4 Other Income of Rs. 541 Lakhs mainly comprised of forex gain, interest, rent & export incentives etc. (Rs. 731 Lakhs)*
(*Figures in brackets indicate previous year)
7. CAPEX
The Company incurred CAPEX of Rs. 1,315 Lakhs during FY 2021-22. The Capital work-in-progress as at 31st March, 2022 was Rs. 710 Lakhs. CAPEX planned for FY 2022-23 is Rs. 3,800 Lakhs, mainly for the following:-
a. Automation / modernization at Consumables and Equipment Plants.
b. Plant & Machinery for capacity expansion of certain products, and also for improvement of "productivity & in-process quality".
c. Replacement of Old Machineries.
d. Upgradation of R&D Infrastructure.
e. Information Technology (IT) upgradation, digitalization and Compliances.
f. Replacement of Vehicles.
8. PERFORMANCE OF THE SuBSIDIARY COMPANY
The Company does not have any material subsidiary. The Board of Directors of the Company has approved a Policy for determining material subsidiaries, which is in line with SEBI (LODR) Regulations 2015, as amended from time to time. The said Policy has been uploaded on the Company's website at the following weblink:
https://www.adorwelding.com/wp-content/ uploads/2021 /07/Policy-for-determining-Material-Subsidiarv.pdf
Ador Welding Academy Private Limited (AWAPL)
The Board of Directors of AWAPL, at its meeting held on 28th May, 2021, considered and approved the scheme of amalgamation (merger by absorption) pursuant to Sections 230 to 232 read with Section 234 and other relevant provisions of the Companies Act, 2013, providing
for the merger of its wholly owned subsidiary, AWAPL (Transferor Company) with Ador Welding Limited (Transferee Company).
During the financial year under review, your Company has filed an application on 01st September, 2021 involving Composite Scheme of Arrangement of AWAPL with AWL before the Hon'ble National Company Law Tribunal, Mumbai Bench ('NCLT'). The scheme of amalgamation is subject to necessary statutory and regulatory approvals under applicable laws, including approval of the Hon'ble NCLT. Your Company has taken all the necessary statutory and regulatory approvals under applicable laws and is awaiting approval (final order) from Hon'ble NCLT. The scheme is at its final stage as on the date of this report.
During FY 2021-22, AWAPL registered a total revenue & other income of Rs. 6.87 Lakhs (Rs. 61.95 Lakhs), majorly because there was no operation undertaken directly by AWAPL, but all the activities were diverted / routed through the 'Welding Training Division' of AWL, considering the ongoing process of amalgamation (merger by absorption). The loss (before exceptional items & tax) of Rs. 2.00 Lakhs (Profit before Tax of Rs. 20.37 Lakhs)*.
(*Figures in brackets indicate previous year)
9. CONSOLIDATED FINANCIAL STATEMENT
The Consolidated financial statements relate to M/s. Ador Welding Ltd. (AWL) and its wholly owned subsidiary, M/s. Ador Welding Academy Pvt. Ltd. (AWAPL). The consolidated financial statement of the Company and its subsidiary for FY 2021-22 are prepared in compliance with the applicable provisions of the Act and as stipulated under Regulation 33 of SEBI (LODR) Regulations, 2015 and in accordance with Section 1 36 of the Companies Act, 201 3 read with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time. The standalone financial statements of AWAPL are posted onto the website of the Company, which can be viewed at the following web link: https://www.adorwelding.com/wp-content/uploads/2022/05/AWAPL-Financial-Statements-31.03.2022.pdf - and hence, the same are not annexed to this 69th Annual Report.
The Annual Accounts and other related information of the said Subsidiary Company will also be made available to the shareholders of the Holding Company (AWL). The Annual Accounts of the Subsidiary Company are also available for e-inspection to the shareholders of AWL and your Company shall furnish a physical copy of annual accounts of Subsidiary to any shareholder of the Company, on request.
Pursuant to Section 1 29(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the Subsidiaries / Associate Companies / Joint Ventures is given in Form AOC-1, which forms an integral part of this Report.
10. RISK MANAGEMENT
Given the diversified scale of operations, your Company has formulated an Enterprise Risk Management (ERM) framework to manage various financial & non-financial risks, operational & non-operational risks, amongst other risks. The Board takes responsibility of the overall process of risk management throughout the organization.
The ERM Policy of the Company helps to continuously assess & monitor the risks assumed by the Company. The processes are in place for identifying, evaluating and managing the risks. Based on the ERM Policy, the Board hereby states that there are no elements of risks, which threaten the existence of the Company.
Further, since your Company falls under "Top 1000 Companies", based on market capitalization, as on 31st March, 2021, a Risk Management Committee is constituted in FY 2021-22 to oversee implementation of the Risk Management Policy, to monitor & evaluate risks, basis appropriate methodology, processes & systems and to keep the Board of Directors informed and recommend the actions to be taken.
11. RELATED PARTY TRANSACTIONS (RPTs)
The Policy on Related Party Transactions (RPTs) is reviewed by the Audit Committee & approved by the Board of Directors in a timely manner and as & when necessary. The said policy is uploaded
on the Company's website at the following web link: https://www.adorwelding.com/wp-content/ uploads/2022/05/RPT-Materialitv-Policv-2022-23. pdf
During FY 2021-22, the Company entered into certain Related Party Transactions, in the ordinary course of business and on arm's length basis, with prior approval of the Audit Committee. Omnibus approvals are obtained on a quarterly basis for all the transactions, which are foreseeable & repetitive in nature and the details of all related party transactions are placed before the Audit Committee and the Board for review & approval on a quarterly basis.
There were no material related party transactions (RPTs) undertaken by the Company during the financial year under review, that required shareholders' approval under Regulation 23(4) of SEBI (LODR) Regulations, 2015 or Section 188 of the Companies Act, 2013.
All transactions entered with the Related Parties for the financial year under review were on arm's length basis and were not material. Hence, disclosure pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 is not required. Further, there are no materially significant Related Party Transactions executed between the Company & its Promoters, Directors, Key Managerial Personnels or other designated persons, that may have a potential conflict with the interest of the Company, at large.
None of the Directors have any pecuniary relationships or transactions vis-a-vis the Company, except remuneration, sitting fees and reimbursement of expenses, to the extent applicable. All Related Party Transactions are mentioned in the notes to accounts. The Company has developed a framework through Standard Operating Procedures (SOPs), for the purpose of identification and monitoring of such Related Party Transactions.
12. ANNUAL RETURN
Pursuant to Sections 92 & 134(3) of the Act, the draft of Annual Return for FY 2021-22 in e - form MGT-7 is available on the Company's website: https://www.adorwelding.com/wp-content/ uploads/2022/07/Draft-MGT-7.pdf
13. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Under the "Corporate Social Responsibility" (CSR) drive, the Company has spent an amount of Rs. 47.45 Lakhs during FY 2021-22, out of its budgeted annual CSR expenditure of Rs. 47.36 Lakhs & has spent Rs. 6.17 Lakhs, out of Rs. 10.50 Lakhs parked in the Unspent Corporate Social Responsibility Account (UCSR) for an "Ongoing Project". The various projects / initiatives undertaken by the Company were in the following areas:
a. Promoting education among children, women, elderly and differently abled, including special education & employment enhancing vocational skills, especially skill development and encouraging safety practices in welding & allied fields for economically challenged / financially weaker sections of the Society
b. Empowering women towards individual and professional development opportunities
c. Promoting healthcare, sanitation, hygiene & making available safe drinking water to the non-privileged / underprivileged.
Your Company also performed its social duties by contributing towards the COVID-19 prevention initiatives. Your Company contributed significantly towards the initiative of "Mission Oxygen helping Hospitals save lives", which helped in procuring and donating oxygen concentrators, supplementing hospital infrastructure with oxygenation plants and other lifesaving equipments in the second wave of the pandemic.
Your Company understands its duties towards the society and considers social responsibility as an integral part of its operations. Your Company tries to ensure that its CSR initiatives have a meaningful impact on the society at large & that the contribution made by it reaches the beneficiary at the earliest, with the aim to create a long-term positive impact.
The Company is committed to continuously explore new opportunities, in alignment with its CSR philosophy & policy and strives to create a positive impact on the society, through its CSR initiatives.
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out, in a format prescribed in the Companies (CSR Policy) Rules, 2014, as amended from time to time, in Annexure - I to this Report. The CSR Policy is also available on Company's website at URL: https://www.adorweldina.com/wp-content/ uploads/2021/08/CSR-Policv-FY-2021-22.pdf
The composition of the CSR Committee is covered under the Corporate Governance Report, which is annexed to this Report as Annexure - I.
14. LOANS, GUARANTEES & INVESTMENTS
The details of Loans, Guarantees & Investments, covered under the provisions of Section 186 of the Companies Act, 2013, are given in the notes to the Financial Statements, forming part of this Annual Report.
15. FIXED DEPOSIT
Your Company had no opening balances of fixed deposits. Further, the Company has not accepted or renewed any deposits, within the meaning of Section 73 of the Companies Act 2013, read with the Companies (Acceptance of Deposits) Rules, 2014.
16. SECRETARIAL STANDARDS (SS)
Your Company has complied with all the applicable Secretarial Standards (SS), issued by the Institute of Company Secretaries of India (ICSI), from time to time.
17. INSuRANCE
All the properties / assets of the Company are adequately insured.
18. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
The information required under Section 1 34(3) (m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 with respect to the conservation of energy, technology absorption & foreign exchange earnings / outgo is appended hereto as Annexure - II.
19. CORPORATE GOVERNANCE
As per the Listing Agreements executed with the Stock Exchanges, the Company has been following the Corporate Governance Code since FY 2001-02. Your Company has complied with all the requirements of Good Corporate Governance for the period 01st April, 2021 to 31st March, 2022 (i.e. FY 2021-22) pursuant to Regulation 27(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. As per Regulation 34(3) read with Schedule V to SEBI (LODR) Regulations, 2015, a separate section on corporate governance practices followed by the Company, together with Corporate Governance Compliance Certificate received from M/s. Walker Chandiok & Co. LLP Chartered Accountants, Statutory Auditors of the Company, confirming compliance forming an integral part of this Report is attached hereto as Annexure - III.
The Management Discussion and Analysis (MDA) Report, as mandated under Schedule V to SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, is also attached to this Report as Annexure - IV.
20. SIGNIFICANT & MATERIAL REGuLATORY ORDERS
During FY 2021-22, there were no significant orders passed against the Company by any regulators or courts or tribunals, impacting the going concern status and the Company's operations, in future. However, Members attention is drawn to the Statement on Contingent Liabilities and Commitments in the Notes, forming part of the Financial Statement.
21. NOMINATION, REMuNERATION & BOARD DIVERSITY POLICY
The Board of Directors has framed a policy, on the recommendation of the Nomination & Remuneration Committee, which lays down a framework in relation to appointment and remuneration of its Directors. The Policy includes criteria for determining qualifications, positive attributes, independence of Director etc., as required under the provisions of Section 178(3) of the Companies Act, 2013 and SEBI (LODR) Regulations 2015. The Policy also broadly lays down the guiding principles, philosophy and
the basis for payment of remuneration to the Executive & Non-Executive Directors. The said policy has been posted on the website of the Company at https://www.adorwelding.com/wp-content/uploads/2021/07/criteria_for_payment_ to_NEDs.pdf
In case of re-appointment of Non-Executive & Independent Directors, NRC and the Board takes into consideration the performance of the Director, based on the Board evaluation and his / her engagement level during his / her previous tenure.
The details of the Remuneration Policy for Directors, are explained in the Corporate Governance Report, attached hereto as Annexure - III.
22. INDEPENDENT DIRECTORS
All the Independent Directors of the Company have given declarations under Section 149(7) of the Act, stating that they meet the criteria of independence, as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of SEBI (LODR) Regulations, 2015. In terms of Regulation 25(8) of SEBI (LODR) Regulations, 2015, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence. They have also given declaration under Rule 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, that their names are registered in the databank, as maintained by the Indian Institute of Corporate Affairs (IICA).
Pursuant to Rule 8(5)(iii)(a) of the Companies (Accounts) Rules, 2014, in the opinion of the Board, the Independent Directors are competent, experienced and are the persons of expertise (including the proficiency), having positive attribute, standards of integrity, ethical behaviour, qualifications & independent judgement.
Your Company has in all 5 (five) Independent Directors, including 01 (one) Woman Independent Director, as on 31st March, 2022. The Independent Directors met on 10th February, 2022, without the presence of Non-Independent Directors and Members of the Management,
as required under SEBI (LODR) Regulations, 2015 and the Companies Act 2013, to discuss on various important matters & evaluate the working / operations of the Management (Whole-Time Directors & KMPs).
23. DIRECTORS & KEY MANAGERIAL PERSONNEL
During FY 2021-22 the following changes occurred in the composition of the Board of Directors of the Company:
a) Mrs. Ninotchka Malkani Nagpal (DIN: 00031985) was re-appointed as the Whole-Time Director designated as Executive Chairman for a further period of 03 (three) years with effect from 07th May, 2021 upto 06th May, 2024 and her re-appointment was approved by the Members by way of Special Resolution at 68th Annual General Meeting.
b) Dr. Deep A. Lalvani (DIN: 01771000) resigned from the office of the Whole-Time Director on 31st March, 2022 and was re-designated as the Non-Executive Director w.e.f. 01st April, 2022.
c) In accordance with the provisions of Section 152 of the Act and the Company's Articles of Association (AoA), Dr. Deep A. Lalvani (DIN: 01771000), Non-Executive Director, retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself for re-appointment. The Board recommends his re-appointment for consideration of the Members of the Company at the forthcoming Annual General Meeting. Brief profile of Dr. Deep A. Lalvani has been given in the Notice convening the 69th Annual General Meeting.
d) Subsequent to the end of the financial year, the Board of Directors, on the recommendation of the Nomination & Remuneration Committee appointed Mr. Navroze S. Marshall (DIN: 00085754) as an Additional Director (Non- Executive & Independent) with effect from 21 st May, 2022. In terms of Section 161 of the Act, Mr. Navroze S. Marshall holds office up to the date of ensuing Annual General Meeting. The Company has received requisite notice in writing from a Member proposing his name for the office of Director. The
with the provisions of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A structured questionnaire was prepared after taking into consideration various aspects of the Board's functioning, composition of the Board & of its Committees, execution & performance of specific duties, obligations & governance. The performance evaluation of the Board of its own performance & that of its Committees and individual Directors, including the Executive Chairman and the Independent Directors was completed during the year under review. The Board of Directors expressed their satisfaction with the evaluation process.
The manner of evaluation has been explained in the Corporate Governance Report in Annexure - III.
25. DIRECTORS RESONSIBILITY STATEMENT
Pursuant to Sections 134(3)(c) & (5) of the Companies Act, 201 3, the Board of Directors of the Company, to the best of their knowledge and ability, hereby confirm that:
a) in preparation of the Annual Accounts for FY 2021-22, all the applicable Accounting Standards (AS) have been followed, along with proper explanation relating to material departures, if any;
b) the Directors have selected such accounting policies & practices and applied them consistently & made judgments and estimates that are reasonable and prudent, so as to give a true & fair view of the state of affairs of the Company and of the profits of the Company for the year ended 31st March, 2022;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the provisions of this Act, for safeguarding the assets of the Company and for preventing & detecting fraud and other irregularities;
d) the Directors have 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 & were operating effectively; and
Board recommends the appointment of Mr. Navroze S. Marshall as a Non-Executive & Independent Director, for the approval by the Members of the Company. Brief profile of Mr. Navroze S. Marshall is given in the Notice convening 69th Annual General Meeting.
In the opinion of the Board, Mr. Navroze S. Marshall satisfies the conditions specified in SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013 along with the rules made thereunder, for his appointment as an Independent Director of the Company and he is independent of the Management. The Board believes that his association would be of immense benefit to the Company and it is desirable to avail his services as an Independent Director for the first term of 05 (five) consecutive years. He shall not be liable to retire by rotation. In the interest of the Company's continued prosperity and well-being, the Board recommends his appointment as an Independent Director at the ensuing Annual General Meeting.
e) The abovenamed Directors have submitted Form DIR-8, pursuant to Section 164 of the Companies Act, 2013 & Rule 14(1) of the Companies (Appointment & Qualification of Directors) Rules, 2014, along with their consent in Form DIR-2 pursuant to Section 152 of the Companies Act, 2013 & Rule 8 of the Companies (Appointment & Qualification of Directors) Rules, 2014.
f) Necessary Resolutions for the appointment / re-appointment / re-designation of the abovenamed Directors have been included in the Notice convening the ensuing 69th Annual General Meeting and details of the proposed appointees, as required pursuant to Regulation 36 of SEBI (LODR) Regulations, 2015 and Clause 1.2.5 of the Secretarial Standard-2 (SS-2), are given in the Appendix to the Explanatory Statement annexed to the said Notice.
24. DIRECTORS PERFORMANCE EVALUATION
The annual evaluation process of the Board of
Directors, individual Directors and Committees
of the Directors was conducted in accordance
f) the Directors have devised proper systems to ensure compliance with the provisions of all the applicable laws and that such systems were adequate & operating effectively.
26. BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34(2)(f) of SEBI (LODR) Regulations, 2015, the Business Responsibility Report (BRR), on the initiatives taken from environmental, social and governance perspective, in the prescribed format, is annexed as Annexure VII and forms an integral part of this Report.
27. AuDIT COMMITTEE & ITS RECOMMENDATIONS
The composition of the Audit Committee is covered under the Corporate Governance Report, which is annexed to this Report as Annexure - III.
The Audit Committee plays a key role in providing assurance about financial statements to the Board of Directors. Significant audit observations, if any, and corresponding corrective actions taken by the Management are presented to the Audit Committee.
The Board has accepted all the
recommendations of the Audit Committee and hence, there is no further explanation to be provided for, in this Report.
28. NuMBER OF BOARD MEETINGS
The Company has conducted 04 (four)
Board meetings during FY 2021-22 and the details thereof are covered in the Corporate Governance Report, which is annexed to this Report as Annexure - III.
29. COMMITTEES OF THE BOARD
The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority / charter.
The following Committees, constituted by the Board, function according to their respective roles and defined scope / charter:
a) Audit Committee (AC)
b) Stakeholders' Relationship Committee (SRC)
c) Nomination and Remuneration Committee (NRC)
d) Corporate Social Responsibility Committee (CSR)
e) Risk Management Committee (RMC)
30. KEY MANAGERIAL PERSONNEL
The following are the Key Managerial Personnel (KMPs) of the Company as on 31st March, 2022:
a) Mr. Aditya T. Malkani, Managing Director
b) Mr. Vinayak M. Bhide, Company Secretary & Compliance Officer
c) Mr. Surya Kant Sethia, Chief Financial Officer
31. statutory auditors
M/s. Walker Chandiok & Co. LLP, Chartered Accountants, (FRN: 001076N / N500013), Mumbai, were re-appointed as the Statutory Auditors of the Company for a second term of 5 (five) consecutive years at the 67th Annual General Meeting (AGM) of the Members held on 22nd September, 2020, i.e. until the conclusion of the 72nd Annual General Meeting, on such remuneration, as mutually agreed upon by the Board of Directors and the Statutory Auditors.
32. STATuTORY AuDITOR’S REPORT
The Report of the Statutory Auditor, forming part of the Annual Report, does not contain any qualification, reservation, adverse remark or disclaimer. The observations made in the Auditor's Report are self-explanatory and therefore do not call for any further comments / explanations.
33. SECRETARIAL AuDITOR & ITS REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 201 3 and the rules made thereunder, the Board of Directors had appointed M/s. N. L. Bhatia & Associates, (Unique Identification Number: P1996MH055800), a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company for FY 2021-22.
The Secretarial Audit Report is annexed herewith as Annexure - V. There are no qualifications in the said Report and therefore no explanations are provided in this Report.
34. COST AUDITOR
Pursuant to the provisions of Section 148 of the Companies Act, 2013, the Board of Directors, on the recommendation of the Audit Committee, had appointed M/s. Kishore Bhatia & Associates, Cost Accountants, Mumbai, as the Cost Auditor of the Company for FY 2021-22.
The brief information of the Cost Auditor and the Cost Audit Report is as under:
a) Name of the Cost Auditor: M/s. Kishore Bhatia & Associates
b) Address: 701/702, D-Wing, Neelkanth Business Park, Nathani Road, Vidhyavihar (West), Mumbai - 400 086, Maharashtra, India.
c) Membership No.: 31166
d) Firm Registration No.: 00294
e) Due date of submitting Cost Audit Report for FY 2020-21 by the Cost Auditor with the Company: Within 180 days from the end of the financial year (by 30th September, 2021)
f) Actual Date of filing of Cost Audit Report for FY 2020-21 with the Central Government: 10th August, 2021
The Company has appointed M/s. Kishore Bhatia & Associates, Cost Accountants, Mumbai (Firm Registration No. 00294) as the Cost Auditors for the financial year 2022-23 as well. M/s. Kishore Bhatia & Associates have, under Rule 6(1 A) of the Companies (Cost Records and Audit) Rules,
2014, furnished a certificate of their eligibility and consent for the said appointment. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor for FY 2022-23 is being placed before the Members at the ensuing Annual General Meeting, for ratification.
The cost records of the Company, as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act 2013, are duly prepared & maintained by the Company.
35. VIGIL MECHANISM & WHISTLE BLOWER POLICY
Pursuant to Section 177(9) of the Act and Regulation 4(2)(d)(iv) of SEBI (LODR) Regulations,
2015, the Company has framed a policy on Vigil Mechanism - cum - Whistle Blower, which
enables any Director, Employee & Stakeholder of the Company to report their genuine concerns / instances of any unethical / improper activity, directly to the Chairman of the Audit Committee, as a Protected Disclosure. The policy also provides adequate safeguards against victimization of persons, who may use such mechanism.
The detailed policy is also posted on the Company's Intranet Portal "SANVAD" and also onto its website at the following weblink: https://www.adorwelding.com/wp-content/ uploads/2021/07/Mechanism-For-Whistle-Blower-For-Stakeholders11.pdf
36. POLICY ON PREVENTION OF SEXuAL HARASSMENT
The Company has "zero tolerance" for sexual harassment at workplace and has complied with the provisions relating to the constitution of Internal Complaints Committee (ICC) under "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013", as amended from time to time, which looks into the complaints received, if any. All women associates (permanent, temporary, contractual and trainees) as well as any women visiting the Company's office / factory premises and women service providers are covered under this Policy. AWL is committed to creating a safe and healthy work environment, where every employee is treated with respect and is able to work without any fear of discrimination, prejudice, gender bias, or any form of harassment at workplace.
Further, there were no complaints received by the Committee during the financial year 202122. The Company has also adopted a policy under the said Act, which is placed on its internal portal as well as on the website of the Company, which can be viewed at the following weblink: https://www.adorwelding.com/wp-content/ uploads/2022/02/PQSH-Policv_2022-1.pdf
37. TRANSFER OF uNCLAIMED DIVIDEND TO INVESTOR EDuCATION & PROTECTION FuND
Pursuant to Sections 124 and 125 of the Companies Act, 201 3 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), as amended from time to time, dividends, if not claimed within / for a period
of 07 (seven) years from the date of transfer to the Unpaid Dividend Account of the Company, are liable to be transferred to the Investor Education and Protection Fund ("IEPF"). Furthermore, IEPF Rules mandate the Companies, to transfer shares of the Members, whose dividends remain unpaid / unclaimed for a period of 07 (seven) consecutive years to the demat account of IEPF Authority. The said requirement does not apply to shares, in respect of which there is specific order of the Court, Tribunal or Statutory Authority, restraining any transfer of shares.
In the light of the aforesaid provisions, the Company has, during the financial year 2021-22 under review, transferred to IEPF, the unclaimed dividend of Rs. 17,01,855/- pertaining to FY 201314. Further, 20,567 equity shares of the Company, in respect of which dividends were not claimed for 07 (seven) consecutive years or more, have also been transferred to the demat account of IEPF Authority. The details of the transfer of unclaimed dividend to the Investor Education and Protection Fund ("IEPF") are provided in detail in the Corporate Governance Report, annexed as Annexure III to this report.
The Members, may claim dividends and / or shares from IEPF Authority, by submitting an online application in the prescribed electronic Form IEPF-5, available on the website www.iepf.gov.in and subsequently send a physical copy of the e-form along with its acknowledgement, duly signed, to the Company along with the requisite documents enumerated in the said eform IEPF-5. No claims shall lie against the Company, in respect of the dividend / shares, so transferred. Members may also kindly refer to the Refund Procedure for claiming the aforementioned amounts & shares transferred to the IEPF Authority, as detailed / given on www.iepf.gov.in
Whilst the Company has already written to the Members, informing them about the due date for transfer of shares to IEPF, the attention of the shareholders is once again drawn to this matter through the Annual Report. The data on unpaid / unclaimed dividend and shares is also available on the Company's website at www.adorwelding.com. Investors, who have not yet encashed their unclaimed / unpaid dividend amounts are requested to correspond with the
Company's Registrar and Share Transfer Agent, at the earliest. Those Members / Shareholders, who do not remember / recollect having encashed their dividend, can also check the "List of Unpaid Dividends" on the website of the Company.
38. HUMAN RESOURCE (EMPLOYEES)
At AWL, employee well-being is of utmost importance. The Company has a structured induction process at all its locations and undertakes training programs to upgrade skills / knowledge of its employees. Objective appraisal systems, based on key result areas (KRAs), are in place for its employees. AWL believes in harnessing the potential of the employees, by providing them adequate training, opportunities and inclusive work culture, in order to achieve Company's goal, in line with the overall employee development. The industrial relations at all the Plants and Offices of the Company continue to remain harmonious, cordial and peaceful.
During the financial year under review, special pay-outs were made / given / disbursed to all off-roll / Casuals, AWL contract and "on-roll" employees, on the 70th anniversary of your Company. Such initiatives are great motivation / boaster for the employees as well as small token of appreciation for the efforts of the employees in the overall growth & development of your Company.
Disclosure pertaining to remuneration and other details, as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this Report, as Annexure VI.
Statement containing particulars of top 1 0 employees and the employees drawing remuneration in excess of limits prescribed under Section 197 (12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, if any, is provided in the Annexure forming part of this report. In terms of proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the shareholders, excluding the aforesaid Annexure. The said Statement is also open for e-inspection / physical inspection, 21 (twenty one) days before and up to the date of the ensuing 69th Annual General Meeting, during
the business hours on working days. Any Member interested in obtaining a copy of the same may write to the Company Secretary. None of the employees, listed in the said Annexure, are related to any of the Directors of the Company or to each other. None of the employees hold (by himself / herself or along with his / her spouse and dependent children) more than 02% (two percent) of the Equity Shares of the Company.
The on-roll manpower strength of the Company, as at the date of this Report, is 535.
39. MATERIAL CHANGES & COMMITMENTS
There were no material changes affecting the financial position of the Company subsequent to the close of the financial year 2021-22, till 20th May, 2022 i.e. the date of this report, except appointment of an Independent Director, subject to the approval of the Shareholders.
40. INTERNAL FINANCIAL CONTROL SYSTEM & THEIR ADEQUACY
The Board has adopted policies & procedures of governance for orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding its assets, prevention & detection of frauds and errors, accuracy & completeness of the accounting records and timely preparation of reliable financial disclosures. AWL has an effective internal control system, which is constantly assessed and strengthened. The Company's financial internal control systems are commensurate with the nature of its business, the size and complexity of its operations.
The Internal Auditor reports to the Audit Committee. The Audit committee defines the scope and authority of the Internal Auditor. The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and the corresponding corrective actions are thereafter presented to the Audit Committee on quarterly basis and as & when required.
41. REPORTING OF FRAuDS
There were no instances of fraud, during the financial year 2021-22, which required the Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12) of the Act and Rules framed thereunder.
42. PREVENTION OF INSIDER TRADING CODE
Your Company has adopted the Code of Conduct for Prevention of Insider Trading (PIT) for dealing / trading in the Securities of the Company, in accordance with the Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations, 2018. The Code of Conduct for Prevention of Insider Trading & Code of Corporate Disclosure Practices is also uploaded on the website of the Company at the following weblink: https://www.adorwelding. com/wp-content/uploads/2021/10/Code-of-Practices-and-Procedures-for-Fair-Disclosure-of-Unpublished-Pric....pdf
All the Directors, employees and third parties such as auditors, consultants etc. who could have access to the Unpublished Price Sensitive Information (UPSI) of the Company are governed by this code. The objective of the PIT Code is to protect the interest of the shareholders at large, to prevent misuse of any unpublished price sensitive information and to prevent any insider trading activity by / while dealing in shares of the Company by its Designated Persons and their immediate relatives. The trading window is closed during the time of declaration of results and occurrence of any material events, as per the Code. The Company Secretary & Compliance Officer, is responsible for setting forth procedures and implementation of the Code for trading in the Company's securities.
43. ENVIRONMENT & HEALTH
Your Company is conscious of the importance of environmentally clean and safe operations. AWL has undertaken various initiatives, which contribute towards sustainable development. Your Company strives to operate, after taking into consideration various environmental, social and governance initiatives / guidelines / laws, in order to achieve maximum output by optimum utilization of available resources, in environment friendly manner / ways.
44. ANNUAL LISTING FEES
The Company affirms that the annual listing fees for the financial year 2022-23 have been paid to both M/s. National Stock Exchange of India Limited (NSE) and M/s. BSE Limited (Bombay Stock Exchange).
Your Company has also paid its annual custodial fees to M/s. National Securities Depository Limited (NSDL) and M/s. Central Depository Services (India) Limited (CDSL).
45. ACKNOWLEDGEMENT
Your Directors take this opportunity to place on record their sincere gratitude and warm appreciation for the invaluable contribution and spirit of dedication shown by the employees, including the support staff, at all levels during
FY 2021-22. Your Directors also express their deep gratitude for the business assistance, co-operation and support extended to your Company by its Customers, Distributors, Dealers, Suppliers, Service Providers, Bankers, various Government Organizations / Agencies & the Shareholders and look forward to their continued support and co-operation in the future, as well.
For and on behalf of the Board
Ninotchka Malkani Nagpal Executive Chairman (DIN: 00031985)
Place: Mumbai Date: 20th May, 2022
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