To:

The Members of

Walchandnagar Industries Limited

The directors take pleasure in presenting the 109^th Annual Report on the business and operations of your Company together with Audited Accounts for the year ended March 31, 2018.

1. Financial Results

The Company’s financial performance, for the Year ended March 31, 2018 is summarized below:

Indian Accounting Standards :

The Financial Statements for the year 2017-18 have been prepared in compliance with the new set of Indian Accounting Standards (IND AS) and the comparatives for the corresponding previous year 2016-17 have been restated under IND AS for making items comparable.

The Ministry of Corporate Affairs (‘MCA’), vide its notification in the official gazette dated 16^th February, 2015, has made applicable the Indian Accounting Standards (‘Ind AS’) to certain classes of companies. For the Company, Ind AS was applicable from 1^st April, 2017 with a transition date of 1^st April, 2016. The financial results have been prepared in accordance with the recognition and measurement principles laid down under Ind AS as presented under Section 133 of the Companies Act, 2013 (‘the Act’) read with the relevant rules issued thereunder and the other accounting principles generally accepted in India as applicable.

2. Financial Performance & Highlights:

During the year under review, the revenue for the financial year 2017-18 was Rs. 40,730 lakhs as against the previous financial year 2016-17 of Rs. 40,144 lakhs.

No material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company.

3. Current Period:

The orders on hand as on March 31, 2018 were at Rs. 803 crores as compared to Rs. 844 crores as on March 31, 2017.

4. Exports and Overseas Projects:

During the year under review, the Company achieved an export turnover of Rs. 30 Crores as against Rs. 38 Crores, in the previous year. The export orders on hand as on March 31, 2018 are at Rs. 324 crores.

5. Dividend and Reserves:

During the Year under review your Company has suffered a (loss) after tax of ‘ (2,582) lakhs. Hence, no dividend is recommended for the Year ending March 31, 2018 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.

6. Subsidiary, Joint Ventures And Associate Companies:

As on March 31, 2018, 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 Company’s Subsidiaries, Joint Ventures and Associate Company.

7. Extract of Annual Return:

The extract of the Annual Return in Form MGT-9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, are set out herewith as Annexure - A to this report.

8. Management Discussion & Analysis:

Detailed Management Discussion and Analysis is enclosed by way of Annexure - B to this report.

9. 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 2015-16 has been completed. However, Company has preferred appeal before Commissioner of Income Tax (Appeals) for the Assessment Year 2015-16.

10. Human Resources Development:

The role of human resources has gradually evolved from a Support Function to a Strategic Business Partner for reaching the Organization Goal of Prosperity. During the Financial Year 2017-18, the HR Department initiated the process of JD’s and Online Appraisal System, followed with systematic approach reward mechanism. Through the Robust Recruitment System to attract the best talent from the preferred Industries, we are trying to make Walchandnagar Industries Limited as one of the best organization to work with.

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

11. 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, 2018 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 and External Consultants specially appointed for this purpose, including audit of Internal Financial Controls over financial reporting by 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 Company’s Internal Financial Controls were adequate and effective during the Year ended on March 31, 2018.

12. Corporate Governance:

Your Company 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 SEBI. Your Company has obtained a certification from M/s. 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 by way of Annexure - C to this Report.

13. Corporate Social Responsibility:

The Companies Act, 2013 mandates that every Company, who meet certain eligibility criteria needs to spend in every financial year, at least 2% of its average net profit of the Company made during the three immediately preceding financial Years. 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, Health and sports related activities in order to fulfill its corporate social commitments.

Health:

To create health awareness in the township and nearby villages, the Company continued to organize various health schemes during the year. This year the Company organized a medical check up which includes General Health check up for 719 workmen and Hazardous test for 211 workmen working on hazardous process and non-hazardous process with the help of certified surgeon.

Our Company Hospital ( LHMC ) have been registered as a primary health center under ESIS. These medical services will be beneficial to insured persons and their family members at Walchandnagar and surrounding villages. Under this scheme employees can avail all medical benefits provided by ESIC Corporation in our township.

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 3877 children of which, 29% are children of employees of the company and 71 % are other children who reside in Walchandnagar & nearby villages.

Environment:

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

14. 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 given in the Annexure - D to this Report.

15. 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.

16. Directors and Key Managerial Personnel:

1) Director

a) Independent Director:

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.

The Shareholders of the Company at its Annual General Meeting held on 9^th August, 2017 have approved Re-appointment of Mr. Dilip J. Thakkar (DIN: 00007339) as Independent Director for second term of Five Years till the Conclusion of Annual General Meeting to be held in the year 2022 as recommended by the Nomination & Remuneration Committee / Board in their meeting held on May 26, 2017.

b) Retirement by rotation:

Pursuant to Article 86 of the Articles of Association of the Company and Section 152 of the Companies Act, 2013, Mr. Chirag C. Doshi is due to retire by rotation at the 109^th Annual General Meeting and being eligible, have offered himself for re-appointment.

Brief profile of the proposed appointee 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.

2) Key Managerial Personnel

During the year no changes took place in the Key Managerial Personnel of the company. The shareholders of the company at its Annual General Meeting held on 9^th August, 2017 Re- appointed Mr. G.K. Pillai , Managing Director & CEO (DIN : 01537184) and Mr. Chirag C. Doshi, Managing Director (DIN : 00181291) for a further period of three years w.e.f. 1^st April, 2017

17. Number of Meetings of the Board:

The Board met four (4) times during the year from April 01, 2017 to March 31, 2018 viz. on May 26, 2017; September 13, 2017; November 28, 2017 and February 13, 2018.

18. 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.

The Company has following Committees of the Board comprising of Directors and / or Executives of the Company:

- 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).

- Risk Management Committee which comprises of Managing Director & C.E.O., Mr. G. K. Pillai (Chairman of Committee), Managing Director, Mr. Chirag C. Doshi (Member) and Chief Internal Auditor, Mr. Anil Vasant Gabhe (Member).

- Nomination & Remuneration Committee

which comprises of three Independent Directors, Mr. G. N. Bajpai (Chairman of Committee), Mr. Dilip J. Thakkar (Member) and Dr. Anil Kakodkar (Member), and Chairman, Mr. Chakor L. Doshi (Member);

- Finance Committee which comprises of two Independent Directors i.e. Mr. Dilip J. Thakkar (Chairman of Committee) and Mr. G. N. Bajpai (Member) and Chairman, Mr. Chakor L. Doshi (Member);

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

- Committee of Independent Directors which comprises of Mr. Dilip J. Thakkar, Dr. Anil Kakodkar, Mr. G. N. Bajpai, Mr. A. R. Gandhi and Mrs. Bhavna Doshi;

- Allotment Committee which comprises of two Independent Directors i.e. Mr. Dilip J. Thakkar (Chairman of Committee) and Mr. G. N. Bajpai (Member) and Chairman, Mr. Chakor L. Doshi (Member);

- Committee of Directors for Capital Issue

which comprises of two Independent Directors i.e. Mr. G. N. Bajpai (Chairman of Committee) and Mr. Dilip J. Thakkar (Member) and Chairman, Mr. Chakor L. Doshi (Member);

19. 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. Independent Directors Meeting and Nomination and Remuneration Committee considered the performance of Independent/Non-Independent Directors and the Committees and Board as 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.

20. Vigil Mechanism:

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, 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 Company’s website at the link http:// www.walchand.com/wp-content/uploads/2015/01/ Whistleblower-Policy.pdf.

21. Particulars of Employees Remuneration:

(A) The statement containing particulars of employees as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not being sent as the Company has no such employee who falls under the criteria specified in the said Rules.

(B) The ratio of the remuneration of each Director to the median employee’s 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 - E.

22. Contracts and Arrangements with Related Parties:

All contracts / arrangements / transactions entered by the Company during the Financial Year with Related parties were in the Ordinary Course of Business and on arm’s length basis.

Your Directors draw attention of the members to Note 46 to the Financial Statement which sets out related party disclosures.

23. 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 the Policy are in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto.

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 Remuneration 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.

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.

24. 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.

25. Internal Financial Control Systems:

Details of the Internal Financial Control Systems is explained in the “Management Discussion and Analysis” as Annexure - B to this report.

26. Insurance:

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

27. Dematerialization of Shares:

The Company’s shares are listed on BSE Limited and National Stock Exchange of India Ltd. and the Company’s 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, 2018, total dematerialized equity shares are 37299841 representing 97.98%.

28. Company’s 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 and Shareholding patterns, all other communication with the Stock Exchanges and various policies are placed on the website of the Company and the same are updated periodically.

29. 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.

30. Auditors And Auditor’s Report:

Statutory Auditor:

M/s. Jayesh Sanghrajka & Co. LLP, Chartered Accountants, Mumbai was appointed in 108^th Annual General Meeting (AGM) as the Statutory Auditors of the Company to hold office from the conclusion of 108^th AGM until the conclusion of the 113^th AGM. However pursuant to Companies Amendment Act, 2017, Annual Ratification of Appointment of Auditors is not required.

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 2019. They were also the cost auditors for the previous Year ended March 2018. 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 2019.

The Cost Audit Reports for the financial year ended March 2018, will be filed within the stipulated time i.e. on or before September 30, 2018.

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 conduct Secretarial Audit for the year April 01, 2017 to March 31, 2018. The Secretarial Audit Report for the year ended March 31, 2018 is annexed herewith marked as Annexure - F to this Report. No observations were made by M/s. V. N. Deodhar & Company, Secretarial Auditor of the Company in their report. The Board has re-appointed M/s. V. N. Deodhar & Co. as Secretarial Auditor for the Financial Year 2018-19 also.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, neither the Statutory Auditors, Secretarial Auditor nor the Cost Auditor has 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 Board’s Report.

31. 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).

32. 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.

33. Familiarization Programme For Independent Directors

To provide insights into the Company and to enable the Independent Directors to understand the Company’s business in depth which would facilitate their active participation in managing the Company, the 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://walchand.com/wp-content/ uploads/2018/04/Familiarisation-programme-for-ID.pdf.

34. 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 or Courts or Tribunals which impact the going concern status and Company’s operations in future.

Your Directors further state that 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. Acknowledgement:

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

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

Chakor L. Doshi

Chairman

Registered Office:

3, Walchand Terraces,

Tardeo Road,

Mumbai - 400 034.

Date : May 28,2018