The Board of Directors hereby submits the twenty ninth (29th) Board's Report on the business and operational performance of VA TECH WABAG LIMITED ("the Company" or "WABAG") along with the audited standalone and consolidated financial statements for the financial year ended March 31, 2024.
RESULTS OF OPERATIONS AND KEY FINANCIAL HIGHLIGHTS
The key highlights of the Company's financial performances for the financial year 2023-24:
(INR Mn.)
GROWTH PERFORMANCE OVER THE YEARS
Your Company has achieved another year of profitable growth i.e., profits growing at a rate faster than the revenue growth. The Consolidated EBITDA before exceptional items grew by 6.2% YoY and the Consolidated PAT before exceptional items grew by 7.1% YoY. Your Company closed this financial year at a historic high order book position of about INR 1,15,000 Million, thereby providing a robust future revenue visibility.
Key Orders received:
(EPC – Engineering, Procurement & Construction; EP – Engineering & Procurement; DBO - Design, Build & Operate; O&M – Operations & Maintenance, WTP - Waste Water Treatment Plant, IWWTP - Industrial Waste Water Treatment Plant)
Key developments during FY 2023-24:
Biogas to Bio-CNG - Strategic tie up with ‘Peak Sustainability Ventures' to establish 100 Bio-CNG plants across India, GCC, Africa, and European countries, Business potential of ~200 Mn USD.
- Global leader in clean water production, the key raw material to produce the fuel of the future, in discussion with Hydrogen Developers for collaboration as their water partner. Aims to support Group's ESG initiatives through reduction of GHG emissions; making it a great replacement for carbon emitting fuels.
Digitalization (AI for Operational Excellence) - Tie up with ‘Pani Energy' to implement applied AI for water treatment plants, committed to adopt advanced technology and innovations for operational excellence.
Water Solutions for Semi-Conductors - Proven track record in supplying ultra-pure water to Semi-Conductor industry, committed to bring in state-of-the-art globally proven technologies for best efficiencies and to remain a dominant player. Strategic partnership on the anvil to develop the business model
Return on Investments:
Your Company has been steadfast in implementing the long-term strategy "Wriddhi" which has enabled the Return on Equity (ROE) to grow robustly from 7.9% in FY 2021 to ~15% in FY 2024. Your Company is committed to follow the path of "Wriddhi" and expects the ROE to sustain and continue growing in the years to come. Your Company has a presence in over 25 countries across the world in the form of Subsidiaries, Joint Ventures and Associates. This international presence enables your Company to secure marquee international contracts from new terrains at competitive prices against global competition. Your Company's Global-Local (GLOCAL) approach helps in optimum utilisation of resources to deliver projects at cost, on time and at quality. Your Company owns over 125 IP Rights and continues to invest time and resources in the development of new technologies which provide both the right to win and early mover advantage, especially in emerging economies. Your Company will continue to focus and invest resources in emerging economies while reducing its exposure to the European region as envisaged in the long-term strategy, with the objective of improving returns on its investments. All investments of your Company are non-current in nature and invested in Group companies as equity instruments, hence return on investment ratio is not computed.
Liquidity:
WABAG's Group Treasury contribution stands as the bedrock of financial stability in our Centenary year, navigating complexities with precision. Our strategic foresight and prudent treasury management have fortified the organization against turbulence, ensuring growth and resilience driven by efficient corporate banking, trade finance, forex, debt & cash management. With unwavering dedication, we have strengthened the pillars of fiscal responsibility, enabling our continued profitable success.
BUSINESS ENVIRONMENT
Global economic growth slowed from 3.5% in 2022 to 3.1% in 2023. Asia is expected to drive a disproportionate share of global growth despite challenges such as a slower recovery in China, economic slow down in the USA, and higher energy costs in Europe. Weak global consumer sentiment due to geopolitical tensions like the Ukraine-Russia war, Israel - Palestine war and the Red Sea crisis has also impacted growth. Tightening monetary policies have led to increased interest rates, affecting new loans.
(Source: International Monetary Fund, Mint, Unctad, Business Today)
In the water sector, there's a rising demand for innovative solutions tackling water scarcity, pollution and infrastructure challenges, creating substantial growth opportunities. Governments and multilateral agencies worldwide are investing in water security projects, including recycling initiatives and smart water management technologies. Additionally, there's a growing trend of integrating water and energy systems, recognizing their interconnectedness.
Your Company is actively engaged with financial institutions globally, focusing on the water sector. We have gained recognition through initiatives aligned with Sustainable Development Goals (SDGs) and Environment, Social and Governance (ESG) principles, attracting investments from Sustainability and Green Funds. Offering customizable water solutions powered by renewable energy or energy-efficient processes, we are well-positioned to leverage these advancements.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report, other than those disclosed elsewhere in this report.
DIVIDEND AND ITS POLICY
The Board of Directors of your Company after considering various factors, business strategies and investment requirements for Growth Capital and Hybrid Annuity Model (HAM) projects like Namami Gange Programme, etc. decided to conserve funds to maximize the Shareholders wealth on a long run and hence did not recommend any dividend during the FY 2023-24.
Your Company has adopted a Dividend Distribution Policy which can be accessed at https://www.wabag.com/wp-content/ uploads/2018/06/Dividend_Distribution_Policy.pdf in line with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR").
TRANSFER TO RESERVES
The Board of Directors of your Company has decided to retain the profits in the profit and loss account. Accordingly, the Company has not transferred any amount to Reserves for the financial year ended March 31, 2024.
UNPAID / UNCLAIMED DIVIDEND AND SHARES
The Members may note that the dividends unclaimed for seven (7) years and shares on which the dividend has not been claimed by the Members for a period of seven (7) consecutive years has to be transferred to the Investor Education and Protection Fund ("IEPF") within the prescribed time pursuant to the provisions of Section 124, 125 and other applicable provisions of the Act read with the
Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules").
The Company has been sending suitable communication through the stock exchanges and reminder letters, through its Registrar and Transfer Agent (RTA) to the specific Members, from time to time whose dividends are unpaid / unclaimed and due for transfer to the IEPF. Your Company provides a dedicated facilitation / support system to the Members as and when required, to enable them to claim their dividend entitlements and corresponding shares before those are transferred to the IEPF Authority in accordance with the IEPF Rules.
During the FY 2023-24, unclaimed dividends pertaining to the FY 2015-16 amounting to INR 1,23,660/- belonging to 595 Members and 1,404 shares belonging to 45 Members who had not claimed their dividends for seven (7) consecutive years have been transferred to the IEPF Authority during September 2023 and October 2023 respectively.
Further, the unclaimed dividends pertaining to the FY 2016-17 and related shares in respect of which dividends have remained unclaimed for the seven (7) consecutive years as on due date shall be due for transfer to the IEPF Authority during September 2024. The details of the Members and their related unclaimed dividend entitlements and equity shares which are transferred and/or liable to be transferred to the IEPF Authority are uploaded on the website of the Company at www.wabag.com. The Members are requested to approach the Company and / or the RTA for any support to claim their entitlements, if any.
SHARE CAPITAL AND FINANCE
Equity Share Capital:
During the FY 2023-24, there has been no change to the paid-up share capital of the Company and continues to remain at INR 12,43,80,856/- (Indian Rupees Twelve Crores Forty-Three Lakhs Eighty Thousand Eight Hundred and Fifty-Six only) consisting of 6,21,90,428 equity shares of face value of INR 2/- each.
Non-Convertible Debentures (NCDs):
During the year under review, the Company allotted secured, unlisted, redeemable, transferable, rated and interest bearing NCDs worth INR 100 Crores consisting of 1,00,000 NCDs of face value of INR 10,000 each (Series 1) to Asian Development Bank (ADB) out of the total NCDs worth INR 200 Crores issued under private placement. The funds raised through issuance of NCDs were utilized as per the objects and terms of the issuance agreed with the NCD holders.
Banking arrangements:
Your Company has been successfully supported by a consortium of over twelve (12) Banks and Financial Institutions for various banking and lending arrangements. Your Company has honoured all payment commitments to its lenders.
EMPLOYEE STOCK OPTIONS
During the FY 2023-24, the Company implemented a broad-based employee stock ownership program namely ‘Wabag Centenary Stock Option Scheme 2023' ("Scheme" or "ESOS 2023") as a strategic initiative aimed at rewarding the employees for their dedicated service, in celebration of its Centenary year of brand "WABAG". The Scheme aims to reinforce employees' commitment, acknowledge their dedication, and align their interests with the long-term success of the Company as it continues on the journey beyond its Centenary year. Also, the Company actively engages in diverse projects across its Group, further bolstering its overall growth trajectory. Consequently, the Board of Directors of the Company, based on the recommendations of the Nomination and Remuneration Committee ("the Committee" or "NRC") deems it beneficial to extend the Scheme's benefits to the employees not only within the Company but also within its Subsidiary(ies), Associates, and its Group companies (existing and future). This inclusive approach aims to attract and retain key talents within the Group.
Wabag Centenary Stock Option Scheme 2023 comprises mega Grant for accomplishing Centenary year by the Company as well as periodic Grants which may be determined by the Committee from time to time. The criteria to select the employees for Grant would be determined by the Committee based on factors such as length of service, grade, individual performance ratings over past few years, present contribution, potential contribution, conduct, etc. as it may deem relevant. At the same time, the Company is aware that any discount should be compensated with appropriate vesting conditions based on achievement of mandatory corporate performance conditions such as revenue, earnings before interest, tax, depreciation and amortization, cash inflow, order book, etc. Accordingly, the Members of the Company at the 15th Extraordinary General Meeting (EGM) held on January 30, 2024 approved the ESOS 2023 to create and grant from time to time, in one or more tranches, not exceeding 25,00,000 (twenty five lakhs) employee stock options exercisable into not more than 25,00,000 (twenty five lakhs) equity shares of face value of INR 2/- (Indian Rupees Two only) each fully paid-up.
Further, the Nomination and Remuneration Committee (NRC) of the Company at their meeting held on March 21, 2024 considered and approved the first grant of 15,00,000 (fifteen lakhs) Stock Options under the said Scheme to the eligible employees in terms of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.
The following are the details pursuant to the Companies (Share Capital and Debentures) Rules, 2014 with regard to Wabag Centenary Stock Option Scheme 2023 for the FY 2023-24: (a) options granted – 15,00,000 Stock Options (b) options vested - Nil (c) options exercised - Nil
(d) the total number of shares arising as a result of exercise of option – NA
(e) options lapsed – NA
(f) the exercise price – INR 513/- per option per share upon exercise of stock option.
(g) variation of terms of options - Nil
(h) money realized by exercise of options - Nil
(i) total number of options in force - 25,00,000 Stock Options (j) employee wise details of options granted to: i) key managerial personnel - All the key managerial personnel (KMP) were granted a total of 52,150 Stock Options (except the Executive Directors cum Promoters who shall not be eligible) ii) any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that year - Nil iii) identified employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant - Nil The Board of Directors hereby confirm that there has been no material change in the Scheme as on the date of this report and the Scheme is in compliance with the applicable provisions of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.
The disclosures and details as required under Regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is uploaded on the Company's website at Web-link: -https://www.wabag.com/compliances/
CREDIT RATING
The Company's borrowing arrangements have received a revision in credit rating by the India Ratings & Research (wholly-owned subsidiary of Fitch group), the credit rating agency of the Company, which revised the Outlook on Debt instruments to Positive from Stable, affirmed with ‘IND A+'; Rates Additional NCDs during the FY 2023-24 as below:
Fund based limits: IND A+/Positive/IND A1+ - Affirmed; Outlook revised to Positive from Stable
Non-fund-based limits: IND A+/Positive/IND A1+ - Affirmed; Outlook revised to Positive from Stable The details of the ratings are available on the website of the Company and Stock Exchanges including the credit rating agency website with rationale.
DEPOSITORY SYSTEM
Your Company's shares are tradable through electronic mode only. As on the financial year ended March 31, 2024, the total paid-up capital consists of 6,21,90,428 equity shares of face value of INR 2/- each with 99.99% held in dematerialized mode connected with both the depositories viz. the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) through the Registrar and Transfer Agent (RTA) for the equity shares. As on the date of this report, only 252 equity shares are held in physical mode by five (5) Members.
REGISTRAR AND TRANSFER AGENT (RTA)
The Board of Directors of the Company, at their meeting held on February 09, 2024, had approved the appointment of Cameo Corporate Services Limited, Chennai having SEBI Registration no: INR000003753, an ISO / IEC 27001:2013 certified, leading Category I Registrar and Share Transfer Agent as the new RTA for the equity shares in place of KFin Technologies Limited, Hyderabad, pursuant to Regulation 7 of the SEBI LODR. The said change shall be effective from shifting of the electronic connectivity of both depositories to Cameo Corporate Services Limited i.e. from July 01, 2024.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis of your Company's performance is enclosed as a separate report forming part of this Annual Report.
CORPORATE GOVERNANCE
Your Company is committed to the highest standards of Corporate Governance and ethics. At WABAG, Corporate Governance is fundamental to the business and core to its existence. Your Company has implemented several best Corporate Governance practices to enhance the Shareholders value on a long-term basis and respects Shareholders rights in all its strategic and business related decision. Your Company ensures best practices throughout the business cycle and follows a transparent procedure in sharing timely information to all its Stakeholders. Your Company places great emphasis on business ethics and ensures best practices throughout the business cycle.
Pursuant to Regulation 34 of the SEBI LODR, the Report on Corporate Governance for the financial year ended March 31, 2024, is presented in a separate section, forming part of this Annual Report. A certificate from the Practicing Company Secretary, confirming the compliance conditions of Corporate Governance, as stipulated under the SEBI LODR, also forms part of this Annual Report. A Compliance Report on applicable compliances of the SEBI Circular, Notifications, and Regulations etc., issued by the Practicing Company Secretary was filed with the Stock Exchanges.
Your Company in joint venture with METITO Overseas Limited, has bagged a design, build, operate (DBO) order from Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB) for building 400 million litres per day (MLD) sea water reverse osmosis (SWRO) desalination plant at a total cost of about INR 4,400 Crores. The new Plant will come up at Perur, near the present 100 MLD Desalination plant built by WABAG on the East Coast Road, Chennai. This is the largest order for the Company and once completed, this plant will be the largest desalination plant in the South East Asian region. The new desalination plant will cater to the drinking water needs of the entire Chennai City, including added areas like Tambaram and Pallavaram. Around half of Chennai's estimated total need of 1560 MLD will be met from Desalination Plants. The project is funded by Japan International Cooperation Agency (JICA) and seeks to improve Chennai's water security through a stable source of drinking water in the form of desalination. The contract includes design, engineering, procurement, construction, installation, testing, and commissioning of the 400 MLD SWRO desalination plant and the associated sea water intake system over 42 months followed by 20 years of operation & maintenance (O&M). This project involves the construction of intake and outfall structure along with the required pipelines, construction of pre-treatment processes, SWRO desalination plant, remineralisation plant, GIS-based electrical substations and other allied processes and units to build a complete operating plant within the proposed site premises for the production of 400 MLD product water of the required drinking water quality. After successful completion of testing and commissioning of works, the Plant will be operated and maintained for 20 years under Design Build Operate (DBO) basis. Once commissioned, this project makes Chennai "Desalination Capital of India" with a production of about 750 MLD of desalinated water along the coast of Chennai. With the 400 MLD SWRO desalination plant, WABAG will be responsible for about 70 per cent of the water production through desalination units in Chennai.
Detailed Engineering activities are progressing well and is at its peak. Major supply items are ordered and under various stages of manufacturing. Items associated with marine works are crucial for the project, which are under close monitoring. Construction site enabling activities have been completed. Construction activities are gaining momentum and multiple work fronts have been taken up concurrently.
AGCC – SIBUR
Your Company has consolidated its market position in the Oil and Gas sector further, by securing a breakthrough Engineering and Procurement (‘EP') order from Amur Gas Chemical Complex LLC., (‘AGCC') in Russia. AGCC is a joint venture of SIBUR Holding Russia and China Petroleum & Chemical Corporation (‘Sinopec'), China. AGCC is set to become one of the world's largest basic polymer production facilities. WABAG shall be the technology and system integrator for the Integrated Treatment Facilities (Waste Water Treatment unit). WABAG shall deploy advanced technologies to treat waste water streams. The facility will have a concentrate evaporator unit to maintain Zero Liquid Discharge (ZLD) and the sludge will be de-watered and dried. The facility will be designed to Recycle & Reuse the waste water released from the petrochemical unit, substituting about 25% of the raw water intake requirement. The deployment of ZLD and Recycle & Re-use makes the facility environmentally friendly and meets stringent environmental regulations. WABAG shall fulfill the scope of Design, Engineering, Procurement, Supply and Supervision of the facilities during erection and commissioning including process and technology equipment, piping system, electrical, instrumentation / control systems and building and architectural materials. This technology dominant breakthrough order in the CIS region, especially in the Russian Federation also marks WABAG's largest order in the Oil and Gas sector. This order from a marquee customer in the Oil and Gas sector, re-affirms our technological superiority and execution excellence, built over the years. Your Company is proud to have secured this contract amidst stiff international competition and confident that this project will be another landmark reference for your Company.
The project is in final stages and the major equipment have been delivered to site in Russia. Balance supply items are in final stages of manufacturing or under transit. Equipment erection plan has been drawn out and site is mobilized. WABAG team remains committed to ensure smooth and coordinated erection with safety.
Your Company has secured a breakthrough project in a new geography i.e. in Bangladesh. This prestigious project is being executed for Dhaka Water Supply and Sewerage Authority (DWASA). The 200 million litres per day (MLD) Pagla Wastewater project was secured amidst tough global competition. This is a first of its kind project in Bangladesh where bio-gas engines will be used to generate power from the digested sludge. The project has an execution period of 40 months followed by 60 months (5 years) of comprehensive Operation and Maintenance. This project is funded by the World Bank, Asian Infrastructure and Investment Bank (AIIB) and the Government of Bangladesh. The total project value is about INR 800 Crores. The state of the art wastewater facility will be based on the activated sludge process using lamella clarifiers to ensure that the land utilization is optimised. Further, the plant will have odour control facilities to ensure an odour free environment. The sludge produced from the process will then be digested and the methane gas produced by this process of digestion will then be fed to Bio Gas engines to produce captive power. This generated power will cover upto 40% of the power required for operating this plant. The plant will be executed under the strict guidelines on ESG published by the World Bank which is in line with your Company's internal ESG goals also. Your Company has a stated objective of focusing on wastewater treatment, securing more international orders in new territories and focus on jobs funded by multilateral funding organizations. This project falls into this sweet spot and is a testament to our commitment to walk the talk. The Honorable Prime Minister of Bangladesh, Sheikh Hasina, officially launched the project by laying the foundation stone for the plant in July 2023. The progress on the detailed Engineering front is substantial and site construction drawings remains under focus. Orders are placed for long lead items (LLIs), and some of the equipment are under dispatch. Construction at site has also commenced and is on track. WABAG team remains focused on the end objective of the project and is creating value to DWASA.
CITY & INDUSTRIAL DEVELOPMENT CORPORATION - WTP
WABAG worked its way back to the DBO space in Maharashtra by securing the 270 MLD WTP worth about INR 420 Crores from City and Industrial Development Corporation (CIDCO), for the design, build and operation of Water Treatment Plant at Jite, Raigad. This project addresses Navi Mumbai's growing water demands. The plant will draw water from the Hetwane dam. Once treated, the water will be pumped to the existing master balancing reservoir (MBR) at Vihal for distribution across the city. WABAG is responsible for the project's entire lifecycle, encompassing design, engineering, procurement of materials, construction, installation, commissioning, and the operation and maintenance (O&M) for the next 15 years. The construction phase is expected to be completed within 42 months of commencement. On execution front, engineering is progressing as per plan. All major equipment and Long Lead Items (LLIs) have been ordered. Levelling and grading at site is in advanced stage and nearing completion. Construction of hydraulic structures would be commencing and men and machineries have been mobilized.
RELIANCE INDUSTRIES LIMITED – 2 X 1100 m3 / hr SWRO
Your Company is executing 2 x 1100 m3 / hr. SWRO (Sea Water Reverse Osmosis) based Desalination Plant at Jamnagar for Reliance Industries Limited (RIL). The treated water (Process water) will cater to the requirement of RIL's new energy business, including renewable energy, Hydrogen economy business. This is a repeat order (extension) from Reliance Industries, as we have executed a 24 MLD SWRO plant in the same premises. This repeat order echoes RIL's confidence and trust in WABAG. The Order value of EPC contract is INR 427 Crores. The new EPC order includes design, engineering, procurement, supply, construction, erection, pre-commissioning, commissioning and performance guarantee test run of the seawater reverse osmosis (SWRO) plant, slated to be built on the premises of RIL's mammoth refinery at Jamnagar. This plant, which is scheduled to be completed over a 21-month period, will employ state-of-the-art pre-treatment in the form of lamella clarification, Dissolved Air Filtration and Ultrafiltration (UF) followed by Reverse Osmosis (RO) technologies to convert seawater into process water. More than 90% progress on the project is achieved, and team is on track to complete the project. Almost all equipments have been delivered to site and erection work is going on. Furthermore, project is nearing the commissioning phases of UF and RO and pre-treatment plant (PTP) areas.
PROJECTS UNDER NATIONAL MISSION FOR CLEAN GANGA (NMCG)
A. BIHAR URBAN INFRASTRUCTURE DEVELOPMENT CORPORATION (HAM) – STP & NETWORK
Your Company, a leading Pure Play Water Technology Indian Multinational Company is executing the largest order under Namami Gange Programme worth INR 1,187 Crores secured from Bihar Urban Infrastructure Development Corporation (BUIDCO) under the prestigious NMCG Scheme to build Sewage Treatment Plants (STP) of 150 MLD capacity along with sewerage network of over 453 km in Digha and Kankarbagh zones of Patna, one of the most populous cities on the banks of River Ganga.
This project comprises Design, Build and Operate (DBO) scope worth about INR 940 Crores and Hybrid Annuity Model (HAM) scope worth about INR 247 Crores. 40% of CAPEX of the EPC part of the HAM portion will be paid in the form of grant during construction and 60% will be paid as Annuity over 15 years, along with the OPEX. This will be the first water project on HAM, in the State. At Digha, the scope comprises designing and building a 100 MLD STP, Interception and Diversion Work, two (2) Sewage Pumping stations and survey, redesigning and building a new sewerage network of about 300 kilometres. In Kankarbagh, the scope comprises building a 50 MLD STP, Flow Diversion Works and all appurtenant structures and survey, redesigning and building new sewerage network of about 150 kilometres. Powered with resource recovery model, the STPs are designed to ensure minimum foot print and will produce green energy from bio-gas leading to lower OPEX to run the plants.
WABAG is making significant progress on both projects in Bihar, maintaining a positive momentum. The Company is particularly focused on completing the HAM project by November 2024. This successful completion will contribute significantly towards improved sanitation and a cleaner Ganga River in Patna.
WABAG, through its wholly owned subsidiary Ghaziabad Water Solutions Private Limited (SPV entity), has signed a concession agreement with Ghaziabad Nagar Nigam (GNN) in the State of Uttar Pradesh, for a new 40 MLD Tertiary Treatment Plant (TTP) under Hybrid Annuity Model (HAM) under a Design-Build-Operate (DBO) contract with SPV worth INR 594 Crores, WABAG will construct the new plant over two (2) years and operate the facilities, including the existing upstream 56 MLD Sewage Treatment Plant up to a period of fifteen (15) years following the start of commercial operations. The construction phase of the project is co-funded by the client through one of the first municipal Green Bonds in India for a water treatment plant. Ghaziabad TTRO will be the largest plant of its type under HAM project in India and will contribute to a sustainable water management. It is the second TTRO plant from WABAG following the 45 MLD TTRO plant at Koyambedu, Chennai in the State of Tamil Nadu which was commissioned in 2019 and is being operated by WABAG till 2035.
The Tertiary treatment plant is similar to the Koyambedu TTRO Plant and will process treated wastewater from an existing 56 MLD STP to produce industrial-grade water. This reclaimed water will be used by the industries located in Sahibabad Industrial Estate in the Ghaziabad Municipal area. Upon commissioning of the new plant, the industries will be mandated to use the TTRO treated water, instead of presently used ground water, which is already depleting fast. Another major success that further strengthens WABAG's position as a leading water recycling expert, the project will receive funds from green bonds, which is first of its kind in the country. Ghaziabad Nagar Nigam is debt-free and has maintained a revenue surplus position in the last few years, according to India Ratings.
Currently, the project work is on track as per agreed schedule, we have achieved overall 80% physical progress. On execution front for Engineering & Procurement, we have completed our major scope as per agreed schedule. On construction front, civil works are on full swing for all major structures, and the project is expected to go on stream by July 2024.
C. KOLKATA METROPOLITAN DEVELOPMENT AUTHORITY (HAM) – STP
This KMDA's Bally, Arupara, Baranagar project which is under execution, consists of construction of three (3) STPs at Arupara (65 MLD), Bally (40 MLD) and Baranagar (60 MLD), associated pumping system and sewage transmission lines. Your Company will execute the Engineering, Procurement and Construction (EPC) portion of this project over twenty-four (24) months followed by O&M of fifteen (15) years. This project is implemented by National Mission for Clean Ganga (‘NMCG') and Kolkata Metropolitan Development Authority (‘KMDA') with financial assistance from World Bank. Your Company completed the financial closure for this Hybrid Annuity Model (‘HAM') project received from KMDA. The project debt requirement will be funded by a consortium of International Finance Corporation (‘IFC') and Tata Cleantech Capital Limited (‘TCCL'). IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries.
In line with "asset-light" principle, your Company signed an agreement with Kathari Water Management Private Limited (‘Kathari Water'), a wholly owned subsidiary of EverSource Capital, Fund Manager for Green Growth Equity Fund (‘GGEF') who are the investment partner in the project. GGEF is established with anchor investment from National Investment and Infrastructure Fund (‘NIIF') anchored by Government of India and Foreign, Commonwealth & Development Office (‘FCDO'), the Government of UK. The project with a cumulative Wastewater treatment capacity of 187 MLD (165 MLD of new plant, together with 22 MLD of existing facility) when completed, will contribute to eliminating the discharge of untreated sewage into the Holy River Ganga. This shall be the first Water Project on HAM, in the State. While WABAG has been associated with KMDA for projects on EPC/DBO type of contracts, it also extends association with reputed clients on PPP HAM type of contracts. The team is diligently working towards a successful completion by the end of July 2024, marking a final milestone for the project. This swift progress promises a cleaner and healthier future for the city's waterways.
D. JAJMAU TANNERY EFFLUENT TREATMENT ASSOCIATION – CETP
Your Company is currently executing INR 520 Crores worth order secured from Jajmau Tannery Effluent Treatment Association (JTETA) towards Engineering, Procurement, Construction, Operation & Maintenance of a 20 MLD Common Effluent Treatment Plant (CETP) along with treated sewage dilution facility for Jajmau leather cluster, in the State of Uttar Pradesh. The scope of this Design and Build contract includes Design, Engineering, Supply, Erection, Construction and Commissioning of 20 MLD CETP. The CETP scheme includes pre-treatment, sulphide removal, denitrification, two stage extended aeration and tertiary treatment consisting of clarification, quartz filtration and ultra-filtration. The scope also includes setting up a collection and conveyance system, to collect and pump the effluent from various tanneries up to the treatment plant; setting up common chrome recovery unit, to treat chrome tanning effluents by recovering the chrome so that they can be reused in the tanneries and setting up a pilot plant with a zero liquid discharge facility. The salient features of the project are effluent from 380 Tanneries will be treated as per the revised norms of the Ministry of Environment and will be released for irrigation purpose. The proposed 20 MLD CETP project will have treatment process up to tertiary treatment including Ultra Filtration in Phase-I and an add-on Modular RO system in Phase-II. Spent Chrome liquor collection from each Tannery unit would be transported through tankers to CCRU and the recovered chrome shall be sent through drums or sold. This will ensure that the chrome liquor is uniformly treated from all tanneries. Zero Liquid Discharge (ZLD) based field scale pilot plant with a capacity of 200 KLD is developed for Research and Development activities to demonstrate high recovery of water (>95%) and high purity sodium chloride and sodium sulphate salts. Post successful commissioning, your Company will also Operate & Maintain the above plants for a period of five (5) years. The construction of this plant is being funded under the prestigious Namami Gange Programme and the Operation & Maintenance will be self-financed by JTETA. Work is in full swing and the Common Effluent Treatment Plant (CETP) is expected to be commissioned by early next year.
While the network is still under construction, the commissioning of the CCRU, CETP, and ZLD portions of the project has already been successfully completed, marking a significant milestone towards cleaner rivers and a more sustainable future.
MEA CLUSTER
SONEDE BEJAOUA, TUNISIA – 345 MLD WTP
WABAG secured a significant water treatment project in Tunisia. Funded by the French Development Agency (FDA) and the European Investment Bank (EIB), the consortium order is valued at 215 million Tunisian Dinars (approximately INR 110 Crores). WABAG is responsible for the design, construction, and commissioning of a 345 MLD Water Treatment Plant for SONEDE, the national water utility Company of Tunisia.
WABAG's significant contribution to the project encompasses both the engineering and procurement (EP) aspects, as well as operation and maintenance (O&M) for one year. This responsibility represents roughly half of the total consortium order value. Within the EP scope, WABAG will handle the design, engineering, and supply of crucial electromechanical equipment, including state-of-the-art compact lamella clarifiers. Additionally, it will oversee the plant's installation and commissioning. WABAG is collaborating with Entreprise Gloulou Mohamed et Salem (EGMS) – the partner responsible for executing all civil works.
SONEDE ZARAT, TUNISIA – 50 MLD SWRO
This project from SONEDE is to Design and Build a 50 MLD Sea Water Desalination plant in Tunisia, expandable up to 100 MLD. The project is a DBO contract, funded by KfW Germany and will be built using State of the Art Sea Water Reverse Osmosis with energy recovery system.
The project has made substantial progress over the past year. We've successfully completed the plant commissioning and we are currently in the 12-month Defect Liability Period (DLP).
RAS TANURA RTR - IWWTP
The Company has secured a work order from SEPCO III Electric Power Construction Corporation (SEPCO III) for engineering and procurement for a 20 MLD Industrial Wastewater Treatment Plant (IWWTP) at Ras Tanura Refinery Complex, Saudi Arabia. The project developed by Miahona, a PPP developer and operator of water and wastewater projects in Saudi Arabia, is valued at $33.5 million.
The scope includes design, engineering, procurement, supply & supervision of installation and commissioning of the IWWTP to treat a complex cocktail of effluents from the desalter effluent, tank farms and other oily wastewater sumps in the refinery; the order is scheduled to be completed over a 20-month period and will employ biological treatment followed by filtration and reverse osmosis technologies to treat the effluent partly towards reuse in the refinery. The treatment scheme also includes wet air oxidation for the treatment of spent caustic effluent. This contract shall be executed jointly by WABAG India and WABAG Austria (i.e. VA Tech Wabag GmbH, Austria) which signifies the "One WABAG" motto.
This breakthrough order in Middle East is one of a kind project with stringent influent & effluent conditions. We feel proud to get associated with Miahona, one of the prominent developers in the Kingdom for the Wastewater Business and also we are happy to serve our end user ARAMCO. This has enhanced the brand value of WABAG in the Middle East and the Company is now well placed in the Middle East market for wastewater opportunities in both Municipal & Industrial sectors.
Middle East Business Achievements over the years leading to Centenary Year
The first project in Middle East was awarded in the year 2005 which was 54 MLD STP at Al Ansab region in Oman, this marks our beginning in the middle east market. We have partnered with Galfar, Oman for this project and we proved our technology expertise in wastewater & project was successfully completed. With our continuous business development efforts, WABAG brand was well popular in the market as one of the leading water technology providers, this helped us to win a few more projects in the years 2008, 2012 & 2014 in Oman namely, 6 MLD SWRO for RAECO in Duqm, 20 MLD SWRO for Majis and 192 MLD SWRO Al Ghubrah.
We then began our expansion plan in the middle east foreseeing the growth of business which helped us in bagging the 40 MLD STP plant at Amas, Bahrain with our JV partner Belhasa. Middle East branch office was set up in Dubai, UAE catering to the business opportunities in this region with few marketing engineers in place.
Setting up of office helped us in close contact with all our stakeholders which boosted the confidence on WABAG for our clients. This focused approach won the following orders:
2017 – 40 MLD DM and 60 MLD STP at Jazzan, Kingdom of Saudi Arabia.
2018 – 120 MLD STP for Marafiq, Kingdom of Saudi Arabia.
2018 – Refurbishment works of existing STP in Doha, Qatar.
2020 – 300 MLD STP at Jeddah, Kingdom of Saudi Arabia.
Though we had difficulties during the execution of these projects, we ensured that these projects completed and handed over to our clients on time. WABAG demonstrated that it is an organization which works for customer satisfaction and we believe that this helps us in building the trust with our client thereby growing our business exponentially.
WABAG also started working on the registrations and pre-qualifications to get itself listed in the contractors list of the clients with a good rating.
We have completed registrations with the following entities as on date:
As part of localization initiative in the middle east countries, we have received the "In-Country Value" certificate in Doha. In 2023, WABAG emerged as the winner for the "Energy Globe Award" in the Kingdom of Saudi Arabia for Jubail industrial city WWTP
& Reuse plant and also received "7 Star Safety Award" from Qatar Energy. During the GWI Awards 2019, we received the "Wastewater Project of Year" award for Madinat Salman Plant in Bahrain. Also, we have signed an MOU with Al Jomaih, one of the reputed developers in the Kingdom of Saudi Arabia for the upcoming water projects coming up in this region.
The achievements so far are just a teaser for WABAG since its entry to the middle east region and this market shall act as a "growth engine" for WABAG in the decades to come. Our prime focus will be as a preferred "Water Technology Partner" for our esteemed clients.
Africa Business achievements leading to Centenary Year
WABAG started exploring the African markets starting 1980's and soon became a preferred partner for the industrial and municipal clients in Algeria, Libya, Morocco, Tunisia and Egypt by end of next decade, it was positioned as leader in markets like Algeria, Egypt, Tunisia and Libya. During the same time in parallel, we have ventured into sub Saharan markets like South Africa, DRC, Niger, Namibia, Nigeria and by Mid 90's we have become leader in South Africa and made our technological presence felt.
In the beginning of this century, WABAG consolidated its markets and became a dominant player in North Africa and in addition, built some of the technologically advanced plants in sub-Saharan regions like Namibia, Nigeria and Tanzania.
Being the leader in water industry, WABAG continues to pursue technology related developments and pushed for sustainable water supply with desalination in the new era and building the West Africa's largest desal plant in Senegal and also in Tunisia.
WABAG not only innovated in RO based technology but also Thermal based desalination in Libya.
WABAG has also to its credit, remarkable achievements in Reuse particularly in Africa, either it is for agriculture / landscaping reuse plants in Egypt/Tunisia or the most advanced and one of its kind direct potable reuse in Namibia back in 2001 when most of the world was not ready for such innovation / acceptance.
WABAG understood the need for sustainability just not ends with municipal needs but also took part in industrial needs, leading to building sustainable solutions for Dangote Refinery and fertilizers in Nigeria and this is the latest and most modern facility in Sub Saharan Africa. WABAG continues to expand and provide sustainable solutions all across Africa and continues to grow in its present markets and expanding further into new ones.
EUROPE CLUSTER
OLD KOHAFA WWTP: CONTRACT FOR UPGRADATION AND EXPANSION
The WABAG - ACC consortium has been awarded a new contract in Egypt for rehabilitation, upgrade and expansion of the existing Old Kohafa WWTP valued at more than 19 million Euros. Funding for this project is provided by the European Bank for Reconstruction and Development (EBRD) and the European Union. The contract was duly signed on December 20, 2023, in Cairo. The scope of this project encompasses both the rehabilitation and upgrade of the existing Old Kohafa WWTP, which currently has a capacity of 60 MLD and shall be expanded to handle 90 MLD, as well as the in-situ expansion for a new treatment plant of 20 MLD (New Kohafa WWTP). The treated effluent will be discharged into the Kamal drain. The overall contract value stands at over 19 million Euros, with WABAG's share amounting to around 7 million Euros.
AL KHARJ ROAD III WWTP, SAUDI ARABIA - 200 MLD WASTEWATER TREATMENT & WATER REUSE PLANT, ANAEROBIC SLUDGE TREATMENT FOR ENERGY-EFFICIENT OPERATIONS
WABAG has successfully executed the contract for the design, engineering, installation, and commissioning of a new 200 MLD wastewater treatment plant as an extension - Phase III - of a treatment complex for the city of Al Kharj in Saudi Arabia. The plant utilizes mechanical/biological treatment, tertiary treatment with disc filters, and disinfection, enabling the treated wastewater to be reused for agricultural irrigation. Additionally, an anaerobic sludge digestion system has been implemented, along with bio-gas utilization for the production of green energy. This innovative approach significantly reduces the plant's reliance on external power sources, making it predominantly energy-neutral and contributing to climate protection.
TOBRUK MED-TVC - THERMAL DESALINATION PLANT TO
PRODUCE 13,333 M3/D DRINKING WATER
WABAG was awarded the contract for the expansion of the Tobruk MED plant by a 4th line with a capacity of 13,333 m3/d by GDCOL. The thermal sea water desalination plant using MED-TVC technology is urgently needed to ensure the continuous supply with clean drinking water to the population as well as a small volume of industrial water for the nearby power plant to ensure power production and energy supply.
MADINATY O&M - WATER RECLAMATION PLANTS (WRP) FOR A NEW SATELLITE CITY NEAR CAIRO, EGYPT
WABAG has realized new Wastewater Treatment & Water Reuse plants for the new satellite city near Cairo, Egypt with a capacity of 2 x 40,000 m3/d. A three-stage treatment system enables the purified municipal wastewater to be led directly in a special distribution system for irrigation of green areas, keeping the new city clean and green. The Madinaty WRP is thus one among the most modern wastewater treatment plants in Egypt to ensure the sustainable reuse of the reclaimed water, thus saving precious fresh water resources. WABAG has been operating the plant since commissioning in 2018 (Stage I) resp. 2022 (Stage II).
ISMAILIA WTP, EGYPT - HIGHLY COMPACT DESIGN FOR 180,000 M3/D DRINKING WATER TREATMENT PLANT
WABAG was awarded by the Suez Canal Authority (SCA) the contract to design and build a new WTP for the city of Ismailia with a capacity of 180,000 m3/d. The new plant shall treat contaminated water from the River Nile, which is extracted from the nearby irrigation channel. A multi-stage treatment system will be implemented incorporating a special plant design, that enables compliance with the product requirements on the limited space available. Since the new plant represents the extension of an existing plant complex, some components will be commonly used. The plant is at an advanced stage and is scheduled to go into operation by the end of the calendar year 2024.
MAINTENANCE CONTRACT FOR WWTP DS SMITH, ZARNESTI, ROMANIA
DS Smith is an international full-service packaging provider with a production facility in Zarnesti, Brasov County. In May 2022, this Company contracted WABAG as an expert for the maintenance of its on-site wastewater treatment plant. The maintenance contract included comprehensive maintenance services for all WWTP equipment, respecting the highest standards. WABAG team executed the maintenance contract to the full satisfaction of the client, leading to an extension and expansion of the maintenance contract in 2024 for another 2 years.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING
Your Company being one of the top 1000 listed entities (by market capitalization) has adopted the Business Responsibility and Sustainability mechanism as part of its business under Environmental, Social and Governance (ESG) parameters since the FY 2022-23 pursuant to the SEBI circular dated May 10, 2021. The Business Responsibility and Sustainability Report (BRSR), is intended towards a quantitative and standardized disclosures on ESG parameters to enable comparability across companies, sectors and time which will be helpful for investors to make better investment decision for the listed companies. A separate report on Business Responsibility and Sustainability is enclosed forming part of this report.
CORPORATE POLICIES
The Board of Directors of your Company have framed various statutory policies, codes as prescribed under the Act and the SEBI Regulations, from time to time. The Board / Committee continuously reviews and updates the policies and codes in line with the amendments to the Act and the SEBI Regulations. Some of the key policies adopted are as follows:
1) Code of Conduct for Board Members and Senior Management Personnel
2) Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information and Policy for identifying legitimate purpose
3) Corporate Social Responsibility Policy
4) Dividend Distribution Policy
5) Nomination, Evaluation & Remuneration Policy
6) Policy for Determination of Materiality for Disclosure of Events or Information
7) Policy on Determining Material Subsidiaries
8) Policy on Preservation and Archival of Documents
9) Policy on Materiality of Related Party Transactions & on dealing with Related Party Transactions 10) Whistle Blower Policy 11) Risk Management Policy 12) Sustainability Policy 13) Policy on Cyber Security Data Privacy 14) Equal Opportunity Policy 15) Policy on Business Responsibility and Sustainability Reporting 16) Policy on Grievance Redressal 17) Policy on Preferential Procurement 18) Policy on Human Rights 19) Prevention of Sexual Harassment (POSH) Policy 20) Code of conduct for Prevention of Insider Trading 21) Policy on Anti-Bribery & Anti-Corruption 22) Policy on Conflict of Interest The aforesaid policies can be viewed in the Company's website under "Polices / Codes" section in the link namely https://www. wabag.com/compliances/. Other policies adopted by the Company are available on the Company's intranet portal.
BOARD OF DIRECTORS
Your Company, being professionally managed, is functioning under the overall supervision and guidance of the Board consisting of six (6) Directors with three (3) Independent Directors including an Independent Woman Director, one (1) Non – Executive Non - Independent Director and two (2) Executive Directors. There was no change in the composition of the Board during the FY 2023-24 and till the date of this report.
EXECUTIVE DIRECTORS
Mr. Rajiv Mittal, Chairman and Managing Director and Mr. S. Varadarajan, Whole Time Director and Chief Growth Officer (CGO) are the Executive Directors and also the Promoters of the Company.
The Members of the Company had approved the re-appointment of Mr. S. Varadarajan (DIN: 02353065), as the Whole Time Director & Chief Growth Officer (Key Managerial Personnel) of the Company for a further period of five (5) years w.e.f. June 01, 2023 to May 31, 2028 and Mr. Rajiv Mittal (DIN: 01299110), as the Managing Director & Group CEO (Key Managerial Personnel) of the Company to hold office for a further period of five (5) years w.e.f. October 1, 2020 till March 31, 2025.
Further, the Nomination and Remuneration Committee (NRC) and the Board of Directors at their meetings held on March 26, 2022 had re-designated Mr. Rajiv Mittal as the Chairman cum Managing Director & Group CEO with immediate effect.
Subsequent to the appointment of Deputy Managing Director and Group CEO, the NRC and Board of Directors at their meetings held on December 07, 2022 had approved the re-designation of Mr. Rajiv Mittal as the Chairman and Managing Director (KMP) of the Company with immediate effect.
The Board of Directors of your Company at their meeting held on May 21, 2024, based on the recommendation of the Nomination and Remuneration Committee and subject to the approval of the Members at the ensuing Annual General Meeting, had considered and approved the re-appointment of Mr. Rajiv Mittal (DIN: 01299110), as the Chairman and Managing Director of the Company for a further period of five (5) years w.e.f. April 01, 2025 to March 31, 2030 along with the terms and conditions of such appointment and the revision in remuneration payable.
NON-EXECUTIVE DIRECTORS
INDEPENDENT DIRECTORS
During the FY 2023-24, there has been no change in the composition of the Board of Directors.
DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS
All Independent Directors of your Company have confirmed that they meet the "Independence criteria" laid down under the Section 149(6) of the Act and Regulation 16(1)(b) of SEBI LODR. In addition, they continue to maintain their directorship within the prescribed maximum limits as prescribed under the SEBI LODR. The Independent Directors provided necessary declarations/ disclosures to the Company in this regard.
NON-EXECUTIVE NON-INDEPENDENT DIRECTOR
Mr. Amit Goela is the Non-Executive Non-Independent Director of the Company. The Members of the Company had regularized and approved the appointment of Mr. Amit Goela (DIN:01754804) as the Non – Executive Non - Independent Director of the Company for a period of three (3) years w.e.f. July 19, 2021 upto July 19, 2024, liable to retire by rotation and entitled to receive Non-Executive Director remuneration as approved by the Members at the 19th AGM held on July 21, 2014 (i.e. remuneration, in addition to the sitting fee for attending the meetings of the Board of Directors or Committees thereof, as the Board of Directors may from time to time determine, not exceeding in aggregate one (1) percent of the net profits of the Company for each financial year).
Further, the Board of Directors of your Company at their meeting held on May 21, 2024, based on the recommendation of the Nomination and Remuneration Committee and subject to the approval of the Members at the ensuing Annual General Meeting, had considered and approved the re-appointment of Mr. Amit Goela (DIN:01754804) as the Non – Executive Non - Independent Director of the Company for a further period of 5 (five) years from July 20, 2024 to July 19, 2029.
RETIREMENT BY ROTATION
Pursuant to the provisions of Section 152 of the Act read with rules issued thereunder, Mr. S. Varadarajan (DIN:02353065) Whole Time Director & Chief Growth Officer, who was appointed by the Members of the Company at the 28th AGM held on August 11, 2023 for a period of five (5) years, has been considered to retire by rotation at the ensuing 29th Annual General Meeting (AGM) and he, being eligible, offers himself for re-appointment and the Board of Directors of your Company recommends his re-appointment, retiring by rotation. A brief profile of Mr. S. Varadarajan forms part of the notice convening the 29th AGM of the Company.
BOARD'S OPINION ON INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR
During the FY 2023-24, there were no new Independent Directors appointed to the Board. With regard to proficiency of the Independent Directors, ascertained from the online proficiency self-assessment test conducted by the IICA (Indian Institute of Corporate Affairs), as notified under Section 150(1) of the Act, the Board of Directors have taken on record the declarations submitted by the Independent Directors that they have complied with the requirements.
KEY MANAGERIAL PERSONNEL (KMP)
The Key Managerial Personnel (KMP) of your Company as per Section 203 of the Act, during the financial year ended March 31, 2024 are as follows: a) Mr. Rajiv Mittal, Chairman and Managing Director; b) Mr. S. Varadarajan, Whole time Director and CGO; c) Mr. Skandaprasad Seetharaman, Chief Financial Officer; d) Mr. Shailesh Kumar, CEO - India Cluster; e) Mr. V. Arulmozhi, CFO - India Cluster; f) Mr. Anup Kumar Samal - Company Secretary and Compliance Officer. g) Mr. Pankaj Malhan was the Deputy Managing Director and Group Chief Executive Officer (Key Managerial Personnel) of the Company, upto October 30, 2023.
BOARD DIVERSITY
Your Company recognizes the importance of a diverse Board for its success and believes that a diverse Board will ensure effective corporate governance, responsible decision-making ability, sustainable business development and Company's reputation. The Company recognizes and sets out the approach to have diversity on the Board in terms of thought, knowledge, skills, regional and industry experience, cultural and geographical background, perspective, gender, age, ethnicity and race in the Board, based on the laws / regulations applicable to the Company and as appropriate to the requirements of the businesses of the Company. The Nomination and Remuneration Committee of the Board sets out the approach to diversity of the Board.
ANNUAL EVALUATION OF BOARD AND PERFORMANCE OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS
The Nomination and Remuneration Committee and the Board of Directors of your Company has, in accordance with the provisions of the Act and SEBI LODR, laid down the manner in which formal annual evaluation of the performance of the Board, Committees, Individual Directors and the Chairman to be made.
During the year under review, the Board carried out an annual evaluation of its own performance, its Committees and performance of all the Directors individually and also the Chairman. The digital evaluation was carried out based on the responses sought from the Directors by way of an organized questionnaire covering various aspects of the functions of the Board's adequacy, culture, execution and delivery of performance of specific duties, obligations and Governance.
The Nomination and Remuneration Committee of the Board carried out a separate exercise to evaluate the performance of the Individual Directors. The Independent Directors and other Directors of the Company carried out the performance evaluation of the Board and its Committees, Individual Director and the Chairman at their meeting held on May 21, 2024. The report on Corporate Governance forming part of this Annual Report covers details of the evaluation process and other requisite information.
FAMILIARISATION PROGRAMME
As part of the Familiarisation Programme, your Company conducts various programs, sessions and seminars for the Directors, from time to time, to update them with various aspects covering the industry including the business process, procedures, laws, rules and regulations as applicable for the business of the Company, making presentations on the business areas of the Company including business strategy, risk opportunities, quarterly performance of the Company, etc.
A formal letter of appointment was issued to the Directors at the time of their appointment, capturing their roles, functions, duties and responsibilities and expectations of the Board. The Directors of your Company are given the full opportunity to interact with the Key Managerial Personnel including the Senior Management Personnel and provided with the access to all the documents/ information sought by them to have a good understanding of the
Company, its business and various operations and the industry of which it is a part.
The details of the Familiarization Programme are disclosed in the report on the Corporate Governance and is available on the Company's website at https://www.wabag.com/compliances/.
APPOINTMENT OF THE DIRECTORS
Pursuant to Section 134(3)(e) and 178(3) of the Act, the Nomination, Evaluation & Remuneration Policy lays down the criteria for determining qualifications, positive attributes and independence of a Director. The Nomination and Remuneration Committee has formulated the criteria for appointment of the Director on the Board of the Company. In accordance with the provisions of the Act and SEBI LODR, the Nomination and Remuneration Committee based on the criteria formulated makes necessary recommendation to the Board for the appointment of the Directors.
In addition, the Nomination and Remuneration Committee on the basis of the performance evaluation of the Directors, recommends to the Board on reappointment / continuation of the term of office of the Independent Directors and other Directors from time to time.
BOARD & COMMITTEES
The Board of Directors of your Company comprises the following Directors as on the financial year ended March 31, 2024:
1) Mr. Rajiv Mittal, Chairman and Managing Director;
2) Mr. S. Varadarajan, Whole Time Director & Chief Growth Officer (CGO);
3) Mrs. Vijaya Sampath, Independent Director;
4) Mr. Milin Mehta, Independent Director;
5) Mr. Ranjit Singh, Independent Director;
6) Mr. Amit Goela, Non - Executive Non - Independent Director.
Your Company maintains the highest standards of the Corporate Governance practices and is in compliance with the requirements of the relevant provisions of applicable laws and statutes.
As on March 31, 2024, your Company consists of following key Committees of the Board viz.:
a) Audit Committee, which acts as an interface between the statutory and the internal auditors, the Management and the Board of Directors. It assists the Board in fulfilling its responsibilities of monitoring financial reporting processes, reviewing the Company's established systems and processes for internal financial controls, governance and reviews the Company's statutory and internal audit processes. The Board reviews / accepts the recommendations made by the Audit Committee. The composition of the Audit Committee is mentioned in the Report on Corporate Governance forming part of this Annual Report.
b) Stakeholders Relationship Committee inter - alia to look into various matters relating to the security holders of the Company.
c) Nomination and Remuneration Committee inter -alia with wider terms of reference as per the statutory requirements.
d) Risk Management and Monitoring Committee inter - alia to review and monitor the various projects of the Company from time to time and evaluate the risks existing in the business and ensure appropriate mitigation measures in a time bound manner.
e) Corporate Social Responsibility Committee, inter - alia, to undertake CSR activities, monitoring and reporting system for utilization of funds for the CSR activities.
f) Capital Allocation Committee (formerly Overseas Investment Committee) inter - alia, to scrutinize, evaluate and approve any new / enhancement in the investment by the Company in setting up a branch / subsidiary / joint venture entity, in India or overseas and periodically monitor that the investments made in such group entities are used for such approved purpose so as to ensure that return on investment to the Company is protected in the long run. Please refer to the Financial Statements of the Annual Report for investment made by Company in Overseas Direct Investment (ODI) entities. The respective Chairperson of each Committee convenes the meetings of the Committees. The Board is apprised with the discussion held at the meeting of the Committees, from time to time, for review / necessary action, wherever required. In compliance with the Secretarial Standards -1 issued by the Institute of Company Secretaries of India (ICSI), the minutes of the meetings of the Committees are sent to all the Members of the Committees for their comments, if any. The approved minutes are signed and certified signed minutes are shared with the Board and respective Committees and tabled at the subsequent meeting of the Board of Directors / Committees. The annual calendar of the Board and Committee Meetings are finalized by the Board before the beginning of the financial year to enable the Directors to plan their schedule well in advance to ensure their participation in the meetings.
During the FY 2023-24, the Board of Directors of your Company met seven (7) times through physical and video conferencing / other audio visual means (OAVM) on May 19, 2023, August 11, 2023, November 06, 2023, December 29, 2023, February 09, 2024, March 15, 2024 and March 29, 2024. The details regarding composition of the Board, attendance of the Directors and other relevant information are set out in a separate Report on Corporate Governance forming part of this Annual Report.
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with Section 134(5) of the Act, the Board of Directors to the best of its knowledge and belief and according to the information and explanations obtained, your Directors make the following statements: a) that in the preparation of the annual accounts of the Company, the applicable accounting standards have been followed along with proper explanation relating to material departures; b) the Directors had 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 profits of the Company for that period; c) the Directors had taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provisions of this Act 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 had laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively; and f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
REMUNERATION OF DIRECTORS
The Board of Directors of your Company had implemented the Nomination, Evaluation & Remuneration policy based on various evaluation criteria determined by the Nomination and Remuneration Committee in line with the requirements of the applicable law. The objective of the said policy is to assess the effectiveness of the Board as a whole, Committees of the Board and Individual Directors on regular basis and to attract, motivate and retain the Directors, Key Managerial Personnel, Senior Management Personnel and other expert Individuals that the Company requires in order to achieve its strategic and operational objectives. In accordance with the relevant provisions of the Act and SEBI LODR, the following policies / framework have been adopted by the Board upon recommendation of the Nomination and Remuneration Committee as part of the Nomination, Evaluation & Remuneration Policy:
Board Nomination Policy;
Policy for appointment and removal of Director, Key Managerial Personnel and Senior Management Personnel;
Board Evaluation Policy;
Board Diversity Policy;
Policy related to Remuneration for the Executive Directors, Key Managerial Personnel and Senior Management Personnel;
Policy related to Remuneration for the Non – Executive Directors / Independent Directors.
The Nomination, Evaluation & Remuneration policy of the Company is available on the website of the Company www.wabag. com. The information on Director's Commission and other matters as provided in Section 178(3) of the Act are disclosed in the Report on Corporate Governance forming part of this Annual Report. The overall limit of remuneration payable to the Board of Directors and Managerial Personnel are governed by the provisions of Section 197 of the Act and rules made thereunder.
REMUNERATION OF THE EXECUTIVE DIRECTORS
The remuneration of the Executive Directors consists of fixed component and variable performance based on specific KPIs (Key Performance Index) and KRA (Key Results Area) agreed with the Executive Directors. The Nomination and Remuneration Committee makes annual appraisal of the performance of the Executive Directors based on a detailed performance evaluation and recommends the compensation payable to them, within the parameters approved by the Members, to the Board for their approval.
REMUNERATION OF THE NON-EXECUTIVE
DIRECTORS
The Non-Executive Directors are paid remuneration in the form of commission subject to overall limits prescribed under the Act and the Members approval. The Board can determine different remuneration for different Directors on the basis of their role, responsibilities, duties, time involvement etc. The Company has no pecuniary relationship with Non-Executive Directors except for the commission paid to them.
REMUNERATION OF THE KMP / SENIOR MANAGEMENT / OTHER EMPLOYEES
The remuneration of the Key Managerial Personnel (other than the Executive Directors) and any revision thereof, shall be approved by the Board in accordance with the Nomination, Evaluation & Remuneration Policy of the Company and internal policy of the Company.
The Chairman & Managing Director and Whole Time Director & CGO carry out the overall performance evaluation of the senior management / other employees and apprises the Board / Nomination and Remuneration Committee about the same and on the basis of the overall achievements of KPI (Key Performance Index) and KRA (Key Results Area) they will be paid remuneration / any revision thereof.
POLICY ON PRESERVATION & ARCHIVAL OF DOCUMENTS
In accordance with the Regulation 9 read with the Regulation 30(8) of the SEBI LODR, your Company has framed a Policy on
"Preservation & Archival of the Documents". This policy is available on the Company's website www.wabag.com. The policy provides guidelines for the retention of records, duration of preservation of relevant documents, archival / safe disposal / destruction of the documents. The policy inter-alia aids the employees in handling the documents efficiently either in physical form or electronic form. The policy not only covers the various aspects on preservation, but also archival of documents.
PARTICULARS OF THE EMPLOYEES
Pursuant to Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, disclosures with respect to the remuneration of Directors, KMP and employees, are enclosed as Annexure-I to the Board's Report. The information required under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including amendments thereof), is provided in the Annexure forming part of this Report. In terms of the first proviso to Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the Members excluding the aforesaid Annexure. Any Member interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company.
INDUSTRIAL RELATIONS
Your Company maintains a healthy, cordial and harmonious industrial relations at all levels with the Stakeholders. The enthusiasm and unstinted efforts of our employees have enabled your Company to remain at the leadership position in the industry. It has taken various steps to improve productivity across the organization.
POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
Your Company has implemented a Policy on Prevention of Sexual Harassment in place in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder ("POSH"). The Company maintains a collaborative, inclusive, non-discriminative and safe work culture, and provides equal opportunities to all the employees and has a ‘Zero Tolerance' policy towards sexual harassment at the workplace.
Your Company has constituted Internal Complaints Committee under POSH, which comprises five (5) Members, majority being women members including one (1) external woman representative. All the employees viz. permanent, consultant, contractual, temporary and trainees are covered under the Company's Policy on Prevention of Sexual Harassment.
During the year under review, your Company has not received any complaint for Sexual Harassment at workplace. An Annual Report comprising details of the complaints received, disposed of and pending at the end of the calendar year i.e. December 31, 2023 was duly submitted by the Internal Compliant Committee, in accordance with the Section 21 of POSH.
AUDITORS
A. Statutory Auditors
The Members of the Company at the 28th AGM held on August 11, 2023 had re-appointed M/s Sharp & Tannan, Chartered Accountants, Chennai (Firm Regn No. 003792S) as the Statutory Auditors of the Company to hold office for a term of five (5) years from the conclusion of the 28th AGM until the conclusion of the 33rd AGM of the Company to be held in the calendar year 2028.
The Statutory Auditors of the Company have submitted Independent Auditors' reports for FY 2023-24 and is forming part of this Annual Report. The Auditor's Report on Standalone and Consolidated Financial Statements of the Company for the financial year ended March 31, 2024, does not contain any qualification, reservation or adverse remark.
B. Cost Auditor
Pursuant to the provisions of the Section 148(1) of the Act, Mr. K. Suryanarayanan, Practicing Cost Accountant (Membership No.24946) was appointed as the Cost Auditor of the Company, for conducting the audit of cost records for the FY 2023-24. The audit of cost records is in progress and report by the Cost Auditor will be filed with the Authority within the prescribed time. A proposal for ratification of remuneration of the Cost Auditors for the FY 2023-24 will be placed before the Members of the Company at the ensuing AGM. The cost records, as applicable to the Company are maintained in accordance with the Section 148(1) of the Act.
C. Secretarial Auditors
The Board of Directors had appointed M/s M. Damodaran & Associates, LLP, Practicing Company Secretaries, Chennai as the Secretarial Auditors of the Company for the FY 2023-24. The Secretarial Audit Report was placed before the Board and it does not contain any qualification, reservation or adverse remark. The Report of the Secretarial Auditors is enclosed as Annexure-II to the Board's Report. Your Board has appointed M/s M. Damodaran & Associates LLP, Practicing Company Secretaries, Chennai as the Secretarial Auditors of the Company for FY 2024-25.
D. Internal Auditors
Your Company has a robust Internal Audit function comprising Corporate Assurance Department of the Company (internal staff) and M/s PKF Sridhar & Santhanam LLP, Chartered Accountants (external firm). The Internal Audit function aims to provide independent and objective assurance services with a view to add value and improve efficiency of business operations. M/s PKF Sridhar & Santhanam LLP, Chartered
Accountants, Chennai, (Firm Regn. No - 003990S/ S200018) along with the Corporate Assurance Department of the Company was appointed as the Internal Auditors of the Company to conduct the Internal Audit for the FY 2023-24. The Internal Audit function reports directly to the Audit Committee and makes comprehensive presentations at the Audit Committee meeting(s) on the Internal Audit Report covering the business areas required by the Audit Committee, from time to time. M/s PKF Sridhar & Santhanam LLP, Chartered Accountants along with the Corporate Assurance Department of the Company conducts the Internal Audit as the Internal Auditors of the Company.
None of the Auditors of the Company have reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Act, including rules made thereunder.
SUBSIDIARIES, JOINT VENTURES & ASSOCIATES
As on the financial year ended March 31, 2024, the Board of Directors of your Company had considered and approved following decisions with respect to Subsidiaries, Joint Ventures and Associate entities:
DK Sewage Project Private Limited, Subsidiary Company
Approved further investments of upto INR 14.61 Crores by way of Equity Shares, Preference Shares, Unsecured Loan and / or Non-Convertible Debentures (NCD) in tranches.
Approved the proposal of availing financial assistance by DK Sewage Project Private Limited from the State Bank of India.
Approved the proposal and executed the Shareholders Agreement amongst VA Tech Wabag Limited (Existing Shareholder), DK Sewage Project Private Limited (Subsidiary Company) and Madhya Pradesh Waste Management Private Limited (Investor) on March 29, 2024.
During the FY 2023-24, your Company had invested in the following securities of DK Sewage Project Private Limited (DKSPPL), Subsidiary Company: INR 13,00,00,000/- consisting of 1,30,00,000 Non – Convertible Debentures (Series B NCD) of face value of INR 10/- each. Further, during the year under review, DKSPPL has, with the approval of the Company, converted the NCDs amounting INR 4.65 Crores to Compulsorily Convertible Debentures to meet the conditions of its lenders. As on date of this report, the investment of the Company in DKSPPL stands at INR 27.32 Crores.
Ghaziabad Water Solutions Private Limited, Subsidiary Company
Approved further investments of upto INR 17.59 Crores by way of Equity Shares, Preference Shares, Unsecured Loan and / or Non-Convertible Debentures (NCD) in tranches.
During the FY 2023-24, your Company had invested in the following securities of Ghaziabad Water Solutions Private Limited (GWSPL), Subsidiary Company: INR 28,55,00,000/- consisting of 2,85,50,000 Non – Convertible Debentures of face value of INR 10/- each. As on date of this report, the investment of the Company in GWSPL stands at INR 52.26 Crores.
Kopri Bio Engineering Private Limited, Subsidiary Company
Approved the proposal and executed the Shareholders Agreement amongst VA Tech Wabag Limited (Existing Shareholder); Kopri Bio Engineering Private Limited (Subsidiary Company) and A K Electrical and Works Private Limited (New Investor), who has replaced the earlier JV partner Gradiant India Private Limited by acquiring 49% stake, to record the terms and conditions between the equity shareholders over the rights and responsibilities for execution of the project towards Design, Build, Finance, Operate and Transfer (DBFOT) in relation to developing, operating and maintaining (a) a 120 MLD sewage treatment plant at Kopri, Thane (East) and, (b) a power generation facility and tertiary treatment plant, for the sale of tertiary treated water of sewage treatment plant at Kopri, Thane (East), awarded by Thane Municipal Corporation on competitive bidding basis.
Please refer Key Project Updates of the Board's Report for more details.
Your Company has 17 subsidiaries, associates and Joint Venture entities worldwide as on date of this report. Pursuant to Section 129(3) of the Act, a statement containing the salient features of the Financial Statement of our subsidiaries in the prescribed format Form AOC-1 is enclosed as Annexure-III to the Board's Report.
MATERIAL SUBSIDIARIES
The Board of Directors of your Company has framed a policy for "Determining Material Subsidiaries" in accordance with the SEBI LODR. The policy is also made available on your Company's website www.wabag.com In accordance with the provisions of the SEBI LODR and Policy for Determining Material Subsidiaries, your Company has one (1) Material Subsidiary i.e. VA Tech Wabag GmbH, Austria, as on the date of this report.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company for the financial year ended March 31, 2024 are prepared in compliance with the applicable provisions of the Act including Indian Accounting Standards specified under Section 133 of the Act. The audited consolidated financial statements together with the Auditors' Report thereon forms part of this Annual Report. Pursuant to the provisions of Section 136 of the Act, the financial statements of the Subsidiaries, Associates and Joint Venture entities of the Company are available for inspection by the Members at the Registered Office of the Company. Your Company shall provide a copy of the financial statements of its Subsidiary companies to the Members upon their request. The statements are also available on the website of your Company at www.wabag.com under Investors Section.
RELATED PARTY TRANSACTIONS
All transactions entered into with Related Parties by the Company, during the year under review, were in the ordinary course of business and at arm's length basis and in accordance with the provisions of the Act and the SEBI LODR. There were no materially significant Related Party Transactions entered into by the Company with the Promoters, the Directors, the Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. The details of the same are given in the notes to the Financial Statements. The Related Party Transactions were placed before the Audit Committee for their review, consideration and approval / recommendation and then placed before the Board for suitable noting / approval. Amended Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions is available on the Company's website www.wabag.com.
The details as required to be provided under Section 134(3) (h) of the Act, in the prescribed Form AOC-2 are enclosed as Annexure - V to the Board's report.
OVERSEAS DIRECT INVESTMENT
Your Company, over the years has expanded its global reach through Overseas Direct Investments (ODI), either through Subsidiaries, Associates and Joint Venture entities. In addition, your Company also executes projects in overseas geographies through establishment of a branch or other permanent establishment (PE) models. Further, the Company has not made any fresh investments in the ODI entities and divested a subsidiary entity M/s. Wabag Limited, Thailand during the FY 2023-24. As on March 31, 2024, the aggregate equity investments in such ODI entities amounted to INR 605.40 Million.
There were no new guarantees and loans given during the FY 2023-24 in ODI entities. As on March 31, 2024, the aggregate guarantees in such ODI entities amounted to INR 108 Million as against INR 364.90 Million as on March 31, 2023, with reduction primarily driven by completion of warranty obligations in the ODI entities. Your Company has not provided any loan to its ODI entities during the year. Your Company's international presence has benefited in both monetary and non-monetary aspects. The Group's international presence has enabled advanced Research
& Development activities in India and Europe leading to over 125 IP Rights which are proprietary in nature and used for the Group's business operations to provide best in class customised and innovative technological solutions to our customers at competitive cost.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The CSR Committee is responsible for formulating and monitoring the CSR policy of the Company.
Pursuant to Section 135(4) of the Act, the major contents of CSR policy include your Company's CSR approach and guiding principles, core Ideology, total outlay for each financial year, allocation of resources and thrust areas, formulation of annual action plan, Executing Agency/ Partners and Impact Assessment. The CSR policy is available on the Company's website in the following link: https://www.wabag.com/compliances/ . In terms of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time ("CSR Rules") and in accordance with CSR Policy and in accordance with the Annual Action Plan, your Company allocated an amount equivalent to 2% of the average net profits (calculated as per Section 198 of the Act) of its three (3) immediately preceding financial years for implementation of CSR activities. Pursuant to the provisions of Section 135(6) of the Companies Act, 2013, there was no unspent amount for the FY 2023–24 pertaining to ongoing projects which has to be transferred to a separate bank on or by April 30, 2024.
Further, during the year, your Company implemented the following CSR projects: a) Livelihood Support Programme at Kolkata - On going Project; b) Chennai City Sanitation Plan - On going Project; c) Apprenticeship Training Programme, a project under Industry Partnership Model under Apprenticeship Act) - other than On-going Project.
The details of the aforesaid projects are covered in the annual report on our CSR activities forming part of this Board's Report. The CSR Committee of the Board has been constantly reviewing the projects and gives directions to expedite implementation of the projects undertaken. It also focusses on proposals covering skill development CSR initiatives in the form of training and development programmes to enrich the knowledge, skill sets, communication, on the job training, improve efficiency and performance level of technical and non-technical persons viz., diploma holders, graduates and other eligible persons.
Core Ideology: For WABAG, responsible business practices include being responsible for our business processes, engaging in responsible relationship with the employees, customers and the community. Hence for the Company, Corporate Social Responsibility goes beyond just adhering to statutory and legal compliances, and creates social and environmental value while supporting the Company's business objectives and reducing operating costs and at the same time enhancing relationship with the key Stakeholders and Customers.
Your Company's commitment to CSR will be manifested by investing resources in one or more of the following areas: a) by taking up CSR projects largely within the framework of the Company's expertise, i.e. water, wastewater management and sanitation; b) by focusing on CSR projects in the Company's project / office neighbourhoods; c) imparting training by supporting apprenticeship under Industry Partnership model. d) Any other projects and / or contribution for any specific purpose notified CSR and / or recommended / approved by CSR Committee/Board of the Company from time to time. The annual report on CSR activities undertaken by the Company is enclosed as Annexure - IV to the Board's Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Pursuant to the provisions of Section 186 of the Act and Schedule V of the SEBI LODR the details of loans, guarantees and investments, as on March 31, 2024, are given in the notes to the financial statements of the Company.
INTERNAL CONTROL / AUDIT & ITS ADEQUACY
Your Company has built robust control system upon which the internal controls are built to mitigate the risks. Under the controlled environment; Company's policies, procedures and standards are developed to uphold control across the organisation. Adequate internal controls are in place to commensurate with business and operating dynamics, Internal controls are designed to provide reasonable assurance over:
1. Achieving strategic objectives;
2. Efficiency and effectiveness of business operations;
3. Prevention and detection of frauds and errors;
4. Safeguarding its assets;
5. Complying with applicable laws and regulations;
6. Providing reliable financial information.
Your Company has a robust internal audit function, spearheaded by industry veterans and process experts. The Audit Committee of the Board periodically reviews the audit functions and key issues are acted upon immediately. The Key controls are periodically reviewed and improvements are made to enhance the reliability of information. The Company through its global ERP continues to align its processes and controls with industry best practices.
INTERNAL CONTROL OVER FINANCIAL REPORTING
The Act, re-emphasizes the need for an effective Internal Financial Control system in the Company, which should be adequate and shall operate effectively. The details are as under:
1. The internal financial controls within the Company commensurate with the size, scale and complexity of its operations;
2. The Audit Committee of the Board periodically reviews the internal audit plans and provides observations/ recommendations to the Internal and Statutory Auditors;
3. The controls were tested during the year and no reportable material weaknesses;
4. Your Company continuously tries to automate these controls to increase its reliability;
5. Your Company follows accounting policies which are in line with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Act read with Companies (Indian Accounting Standard) Rules, 2015. These are in accordance with Generally Accepted Accounting Principles (GAAP) in India;
6. Your Company's Books of Accounts are maintained in IFS (Industrial and Financial Systems), a global Enterprise Solution and transactions are executed through IFS setups to ensure correctness / effectiveness of all transactions, integrity and reliability of reporting;
7. Your Company has a mechanism of building budgets at an integrated cross - functional level. The budgets are reviewed on a monthly basis so as to analyze the performance and take corrective action, wherever required;
8. Overseas subsidiaries provide required information for consolidation of accounts in the format prescribed by your Company along with certification from auditors of respective entities.
RISK MANAGEMENT
Your Board has constituted a dedicated Board Committee viz. "Risk Management and Monitoring Committee" to review risks trends, exposure, its potential impact analysis and mitigation plans. The Committee consists of four (4) Directors out of which two (2) are Independent Directors and two (2) are Executive Directors. The details on your Company's risk Management framework / strategy, risk assessment, risk acceptance, risk avoidance, risk mitigation, risk review etc. forms part of Management Discussion and Analysis section of this Annual Report.
AWARDS & RECOGNITIONS
During the year under review, your Company received numerous awards and accolades conferred by reputable organizations, distinguished bodies and clients for achievements in sustainable solutions, project completion etc. Please refer to this Annual Report for the details of the rewards and recognition achieved by the Company during the FY 2023-24.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.
INSOLVENCY AND BANKRUPTCY CODE, 2016
There is no Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016 (IBC).
OTHER DISCLOSURES
Deposits:
Your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Act, read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), during the year under review.
Contracts or Arrangements with the Related Parties:
Particulars of contracts or arrangements with the related parties referred to in Section 188(1) of the Act, in the prescribed Form AOC-2 is enclosed as Annexure - V to the Board's Report.
Annual Return:
In accordance with Section 134(3)(a) read with Section 92(3) of the Act, a copy of the annual return of the Company for the FY 2023-24 in the prescribed format is available on the Company's website in the following link: https://www.wabag.com/compliances.
Secretarial Standards:
The Company has complied with applicable Secretarial Standards issued by the ICSI.
Conservation of Energy:
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Act, read with the Companies (Accounts) Rules, 2014, is enclosed as Annexure - VI to the Board's Report.
Differential rights:
The Company has not issued sweat equity shares or equity shares with differential rights as to dividend, voting or otherwise , during the year under review.
Nature of Business:
During the year under review, there was no change in the nature of business of the Company or any of its subsidiaries.
QUALITY, HEALTH, SAFETY AND ENVIRONMENTAL PROTECTION (QHSE)
Your Company is committed to providing a safe, healthy and conducive environment to all of its employees and associates and complied with labour related laws. The details of quality, health, safety, environment initiatives, objectives and achievements made by the Company are detailed in the Management Discussion and Analysis section of this Annual Report.
SUSTAINABILITY INITIATIVES
Sustainability is a key mantra for your Company. Globally, your Company is actively involved in providing sustainable solutions for the future that are eco-friendly and renewable in nature. Your Company's contribution towards sustainability is pro-nature as is reflected throughout this report and forms an integral part of our business.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
Pursuant to the Act and SEBI LODR, your Company has formulated a Whistle Blower Policy which serves as a mechanism for its Directors, Employees, Business Associates and other Stakeholders to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct without fear of reprisal. The vigil mechanism provides a dedicated email id.
Any Director or employee who becomes aware of an unethical behavior or fraud or violation of code shall report to the Ethics Committee for redressal as provided in the policy. The Audit Committee of the Board oversees the functioning of this policy. The policy is available on the website of the Company www.wabag.com.
GREEN INITIATIVES
WABAG stands for sustainability and has demonstrated its commitment to creating a green earth for over ten (10) decades. WABAG's vision is aligned to the United Nations Sustainable development goals (SDGs) 2030 and this has been reflected in the Group's numerous initiatives as highlighted below:
1. Green Initiatives begin at home: Over 82% of the total power requirement of our headquarters in Chennai is derived from renewable energy, thereby bringing down energy cost by 10% as well as becoming a part of green energy compliant corporate. It is in recognition of this initiative that our headquarters, WABAG HOUSE, has been Certified as Near Net Zero in energy by Indian Green Building Council (IGBC), in addition to being Certified as Platinum rated Green building. Other initiatives taken by your Company are as follows:
Paper Waste is being sent to ITC Limited for recycling and the proceeds obtained in the form of stationeries are distributed to local panchayat schools;
Batteries, oil waste and e-Waste being disposed for recycling through Pollution Control Board (PCB) authorized re-cycler;
Employee friendly initiatives like ergonomics, indoor air quality and LUX level are maintained as per standards;
Conservation of energy and water management resulted in low Energy and Water Performance Index;
Introduction of e-Tender process for sourcing materials in our procurement function as a step towards digitization;
Achieved IGBC Near Net Zero in Energy;
Achieved IGBC Net Zero in Water.
2. Digitisation: Moving forward on its commitment towards a Green Planet for future generations and in furtherance of digitization commitment to Go-Green initiative of the Government, your Company has been using digital mechanism to conduct Board / Committee Meeting(s) as per the provisions of law and the agendas, notes and other supporting documents of the Board / Committee meetings are circulated through a secured electronic platform for ease of access to the Directors / Members for their review and consideration, thereby reducing usage of papers to a limited purpose.
WABAG took various initiatives to reduce the usage of physical Annual Reports by continuously persuading the Members to get registered their e-mail ids with their respective DPs to avail the e-version of Annual Reports and providing e-voting facility to all its Members to enable them to cast their votes electronically on all resolutions set forth in the Notice including attending AGM electronically.
3. Breathing life into lifelines: Clean water and rejuvenated rivers are key to enhancing the Green cover on Planet Earth. Your Company has been playing an integral role to ensuring this by collaborating with Governments worldwide. In India particularly, your Company has emerged as one of the foremost partners of the Government in rejuvenating India's lifeline, Holy River Ganga under the world's largest river cleaning programme Namami Gange.
4. Advancing Circular Economy Principles at Your Company: Your Company regards circles as the epitome of nature's perfection, from celestial bodies like the sun and moon to the elemental cycles on Earth, including the water cycle. This circularity epitomizes sustainability, inspiring your company to adopt the principles of a circular economy to address modern wastewater challenges.
In contrast to the linear "take-make-dispose" model, your company embraces the holistic approach of Circularity for Sustainability. This principle transforms wastewater from a disposal problem into a resource opportunity. By leveraging innovative technologies, your Company elevates sewage treatment plants (STPs) from mere treatment facilities to resource recovery centers.
Your Company's core philosophy, Total Resource Recovery, underpins this approach. This concept not only treats wastewater but also extracts valuable resources. Treated water can be repurposed for non-potable uses, sludge can be converted into fertilizer, and biogas generated from sludge digestion can be harnessed for renewable energy.
Your Company optimizes these processes to reduce energy consumption and waste generation while enhancing efficiency in treatment, nutrient recovery, and biogas production. This is not a distant goal but a functional reality, exemplified by your company's global projects.
Pioneering Projects and Achievements
Your Company set the standard for the circular economy over two decades ago with the Kodungaiyur Power-Neutral WWTP in Chennai. This plant, the first in India to complete 110,000 hours on a single gas engine, uses biogas from sludge digestion to generate green energy, making it power-neutral and independent of grid power.
Your company's Dinapur WWTP in Varanasi, the largest under the Namami Gange Programme and inaugurated by Hon'ble PM Shri Narendra Modi, operates on a similar model. It treats wastewater to help restore the Ganga river's health. Other significant projects include the K&C Valley WWTP in Bangalore, Pappankalan STP in New Delhi, Madinat Salman STP in Bahrain, and the MARAFIQ WWTP in Jubail, Saudi Arabia.
Commitment to Water Reuse and Sustainability
Your Company is driven by the belief that ‘Water is too precious to be used just once.' Your company's infrastructure for water recycling and reuse ensures treated water is reintroduced into the water grid, maintaining a constant supply while protecting freshwater sources. Your company's advanced systems handle both municipal and industrial wastewater, treating 2.7 million cubic meters of recycled water and 27 million m3 Wastewater treated per day, generating over 41 MW of green energy, and reducing greenhouse gas emissions by over 630 tonnes daily.
Global Innovations and References
Your Company has numerous global references showcasing cutting-edge technologies in water recycling and reuse. The world's first Direct Potable Reuse (DPR) plant in Namibia, the industrial effluent recycle and reuse plant at IOCL - Panipat, and the Tertiary Treatment Reverse Osmosis (TTRO) plant in Chennai are prime examples. The Koyambedu TTRO plant in Chennai, one of India's largest and most advanced, treats municipal water to potable standards, supplying it to industrial hubs and saving 1600 Crores liters of freshwater annually.
In Windhoek, Namibia, your Company built the world's first Direct Potable Water Reuse Plant in 2002, employing a nine-step multi-barrier treatment system to produce high-quality drinking water from secondary effluent.
Your Company successfully completed one of the largest "Central Zero Liquid Discharge Plant" (CZLD) for NMDC Steel Ltd. in Jagdalpur, Chhattisgarh. Employing advanced technologies like Ultrafiltration and Reverse Osmosis, the project treats effluent from steel production to produce high-quality water suitable for reuse as makeup cooling water. This project has significantly contributed to the sustainability goals of NMDC Steel Ltd.
Recognitions and Future Directions
Your Company's commitment to sustainability and innovation is further evidenced by earning prestigious awards such as "The Best ETP" by Water Digest Water Awards 2023-24 and "Best Industrial Plant" by Global Water Awards 2024 for the Central Zero Liquid Discharge Plant (CZLD) for NMDC Steel Ltd.
Your Company was also honored with the Highly Commended Award under "Industrial Project of the Year" for the Dahej Effluent Treatment Plant, India, recognized for its ‘Unique Technology mix scotches effluent cocktail' by Global Water Intelligence. Similarly, the Petronas IETP in Malaysia received the Highly Commended Award under "Industrial Project of the Year," setting ‘A new model for refinery effluent' as recognized by the same esteemed organization.
ACKNOWLEDGEMENTS
Your Board thanks the Banks, Financial Institutions, Lenders, JV Partners, Business Associates, Customers, Government of India
& Overseas Countries, State Governments in India, Regulatory
& Statutory Authorities, Investors & Shareholders and other Stakeholders, society at large, Corporations, Municipalities for their valuable support & co-operation. For the continued contribution, commitment & dedication, your Directors thank the employees of the Company and the WABAG Group.