You are here » Home » Companies » Company Overview » Welspun Corp Ltd

Welspun Corp Ltd.

BSE: 532144 Sector: Metals & Mining
NSE: WELCORP ISIN Code: INE191B01025
BSE 12:51 | 11 Aug 109.25 5.20
(5.00%)
OPEN

104.10

HIGH

109.25

LOW

102.35

NSE 12:49 | 11 Aug 108.80 5.15
(4.97%)
OPEN

103.70

HIGH

108.80

LOW

103.70

OPEN 104.10
PREVIOUS CLOSE 104.05
VOLUME 146210
52-Week high 233.70
52-Week low 55.00
P/E 4.27
Mkt Cap.(Rs cr) 2,850
Buy Price 109.25
Buy Qty 60166.00
Sell Price 108.75
Sell Qty 250.00
OPEN 104.10
CLOSE 104.05
VOLUME 146210
52-Week high 233.70
52-Week low 55.00
P/E 4.27
Mkt Cap.(Rs cr) 2,850
Buy Price 109.25
Buy Qty 60166.00
Sell Price 108.75
Sell Qty 250.00

Welspun Corp Ltd. (WELCORP) - Director Report

Company director report

To

The Members

Welspun Corp Limited

Your directors have pleasure in presenting the 24th Annual Report of yourCompany along with the Audited Financial Statements for the financial year ended March 312019.

1. Financial Results

(र in million)

Standalone Consolidated
Particulars For the year ended For the year ended
31.03.2019 31.03.2018 31.03.2019 31.03.2018
Total income 42620.61 41636.96 90881.24 64921.15
Profit before finance cost depreciation & tax 572.58 4745.06 7077.33 7101.13
Less : Finance costs 1179.73 1305.81 1773.71 1701.53
Profit/(loss) before depreciation & tax (606.15) 3439.25 5303.62 5399.60
Less: Depreciation/Amortization 1129.53 1163.81 2597.33 2581.56
Add: Share of net loss of joint ventures accounted for using the equity method - - (885.32) (859.14)
Profit/(loss) before tax from continuing operations (1736.68) 2275.44 1820.97 1958.90
Less : Provision for tax
Current Tax 134.45 1037.76 1216.01 1024.90
Deferred Tax 86.11 (247.17) 6.54 (822.76)
Profit/(Loss) after taxes before Non-controlling interests from continuing operations (1957.14) 1484.85 598.42 1756.76
Profit/ (loss) before tax from discontinued operations (2196.24) (316.92) (2196.24) (316.92)
Tax expense from discontinued operations (1381.31) (90.25) (1381.31) (90.25)
Profit/ (loss) from discontinued operations (814.93) (226.67) (814.93) (226.67)
Less :Non-controlling interests - - (83.93) (52.94)
Profit/(loss) after tax for the year (after Non-controlling interests) (2772.07) 1258.18 (132.58) 1583.03
Add : balance brought forward from previous year 9226.12 7127.14 18348.17 16820.00
Re-measurements of post-employment benefit (net of tax) 5.25 (10.95) (9.54) (10.96)
Dividend on equity shares (132.61) (132.61) (132.61) (132.61)
Tax on dividend (27.26) (27.00) (27.26) (27.00)
Premium on redemption of NCI's share - - (790.43) (895.65)
Transfer to Debenture Redemption Reserve - 1137.26 - 1137.26
Transfer to General reserve - (125.90) - (125.90)
Balance carried forward to the next year 6299.43 9226.12 17255.75 18348.17

2. Highlights of the year

(a) Production highlights for the year under the Report are as under:

Product Standalone (in MT) Consolidated(in MT)
FY 2018-19 FY 2017-18 FY 2018-19 FY 2017-18
Pipes 553208 737711 989047 951516
H. R. Plates & Coils 379994 468682 379994 468682

(b) New Facilities in Madhya Pradesh:

The Company is setting up new facilities near Bhopal in Madhya Pradesh formanufacturing of up to 175 KMTA Spiral pipes with outer diameter of 24" to 140"for water segment pipes and 2 Mn Sqr mtrs/ annum of Coating facilities. The commercialproduction for pipe manufacturing facility is expected to commence in first quarter of FY2019-20.

(c) Sale of the Plate & Coil Mill Division ("PCMD") and the 43 MW PowerPlant:

The Company periodically reviews its business strategy and as a part of that hasdecided to focus on its core assets and look at strategic options for non-core assets soas to keep its operations asset-light. PCMD and 43 MW Power Division have been identifiedas non-core assets and the Company has entered into agreements to divest these. By sellingthese divisions the Company is expected to move towards an asset-light model thusachieving improvement in its profitability ratios and return ratios. Further thetransaction will strengthen the balance sheet by providing significant liquidity to theCompany and deleveraging the balance sheet. The sale consideration for the PCMD is र848.5 crores and closing adjustments pertaining to Net Current Assets as of the ClosingDate (expected to be approx. र 25 crores) taking the total expected consideration toर 873.5 crores. The 43 MW Power Division is being sold at र 66.9 crores.

(d) Scheme of Amalgamation:

The Hon'ble National Company Law Tribunal Ahmedabad Bench vide its order dated May 102019 sanctioned the Scheme of Amalgamation of Welspun Pipes Limited (‘WPL' or‘the Transferor Company') with Welspun Corp Limited (‘WCL' or ‘theTransferee Company') and their respective shareholders and creditors (‘the Scheme').The Scheme has become effective on May 10 2019 being the date of sanction of the Schemeby the NCLT. Pursuant to the Scheme all the assets tion and liabilities of the TransferorCompany as on the Appointed Date of January 25 2019 stood transferred to the Company andin consideration thereof 110449818 fully paid up equity share of र 5 each of theTransferee Company shall be issued and allotted as fully paid up to the equityshareholders of the Transferor Company in proportion of their holding in the TransferorCompany. Further pursuant to the Scheme the authorized share capital of the Companystand increased to र 250.05 crores due to combination of authorized share capital ofthe Transferor Company.

(e) Buyback of Equity Shares :

The Board of Directors subject to approval of the shareholders and other regulatoryapprovals have approved buyback of the Company's fully paid equity shares of र 5each (Equity Share) at a price to be finalized by the Buyback Committee subject to amaximum price of र 140 per equity share payable in cash for a maximum aggregateamount up to र 3900 million (excluding transaction costs) being less than 25% ofthe total paid-up equity share capital and free reserves (including securities premiumaccount) of the Company as on March 31 2019 (hereinafter referred to as the Buyback) fromthe shareholders of the Company on a proportionate basis through the tender offer route.The total number of equity shares to be bought back would hence be 27857142 EquityShares (representing 10.50% of the total paid up equity share capital of the Company) orsuch other number depending upon the final Buyback Price fixed by the Buyback Committee.The Promoters and Promoter Group of the Company have expressed their intention to tenderup to a maximum of 13260000 Equity Shares (aggregating to 5% of the equity share capitalof the Company.

(f) Reclassification of Co-Promoter as Public Shareholder:

The Company's foreign co-promoter viz. Intech Metals SA has applied forre-classification public shareholder. The application is pending approval of thestock exchanges.

3. Reserves Dividend & Dividend Policy.

The Board is pleased to recommend a dividend @ 10% for the year ended March 31 2019i.e. र 0.50 per equity share of र 5/- each fully paid-up out of the accumulatedprofits. The Dividend Distribution Tax on the proposed dividend is र 27.26 million.In respect of the dividend declared for the previous financial years र 2.674 millionremained unclaimed as on March 31 2019. During the year under Report the Company hastransferred dividend of र 917942 remaining unclaimed for the financial year 2010-11to the Investor Education and Protection Fund. Detail of unclaimed dividend is availableon the website of the Company at "www.welspuncorp.com".

The Company has appointed Mr. Pradeep Joshi Company Secretary as the Officer for theNodal purpose of co-ordination with Investor Education and Protection Fund Authority.Details of the Nodal Company at www.welspuncop.com.

In view of the losses during the reporting period the Board does not propose totransfer any amount to General Reserves and Debenture Redemption Reserve.

In terms of the Regulation 43A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Board of Directors approved and adopted DividendDistribution Policy of the Company setting out the parameters and circumstances that willbe taken into account tion by the members of the by the Board in determining thedistribution of dividend to the shareholders and/ or retaining tion of the profits annexedto this Report as Annexure 1 and is also available on your Company's website at:http://www.welspuncorp.com/system/downloads/ attachments/000/000/338/original/Dividend_Distribution_Policy_08.05.2017.pdf?1494308856

4. Internal Controls

Your Company has adequate internal control system which is commensurate with the sizescale and complexity of its operations. Your Company has a process in place tocontinuously monitor existing controls and identify gaps and implement new and / orimproved controls wherever the effect of such gaps would have a material impact on yourCompany's operation. The controls were tested during the year under Report and noreportable material weaknesses either in their design or operations were observed.

5. Subsidiary / Joint Ventures / Associate Companies and their performance

A report on the performance and financial position of each of the subsidiaries andjoint venture companies included in the consolidated financial statement is presented inForm AOC-1 annexed to this Report as Annexure - 2.

During the year under Report the Board of the Company's wholly-owned subsidiary viz.Welspun Tradings Limited approved closure of business operation of its step-downsubsidiary i.e. Welspun Middle East DMCC ("WME DMCC") operating in the UnitedArab Emirates. Necessary steps to voluntarily wind up business operations of WME DMCC hasbeen initiated.

6. Deposits

The Company has not accepted any deposit within the meaning of the Chapter V to theCompanies Act 2013. Further no amount on account of principal or interest on deposit wasoutstanding as at the end of the year under report.

7. Details of utilization of funds raised through preferential allotment orqualified institutions placement as specified under are available on the website of theRegulation 32 (7A)

During the year under Report no funds were raised through preferential allotment orqualified institutional placement.

8. Auditors

i) Statutory Auditors:

Your Company's Auditors M/s. Price Waterhouse Chartered Accountants LLP who have beenappointed up to the conclusion of the 24th Annual General Meeting subject toat every Annual General Meeting have given theirconsentand earned by the Company. ThePolicy is for re-appointment as the Statutory Auditors for the second term of appointmentwith effect from the close of the 24th Annual General Meeting. Members arerequested to consider their re-appointment as the Auditors of the Company and to fix bypassing an ordinary resolution under Section 139 of the Companies Act 2013.

Total fees for all services paid by the Company and its subsidiaries on a consolidatedbasis to the statutory auditor and all entities in the network firm/network entity ofwhich the statutory auditor is a part during the financial year under Report is र25.49 million.

ii) Cost Auditors:

M/s. Kiran J. Mehta & Co Cost Accountants (Firm Registration No. 000025) areproposed to be appointed as the Cost Auditors under Section 148 of the Companies Act2013. The members are requested to approve their remuneration by passing an ordinaryresolution pursuant to Rule 14 of the Companies (Audit and Auditors) Rules 2015.

iii) Secretarial Auditors:

The Board of Directors has re-appointed M/s. M Siroya and Company Practicing CompanySecretary as the Secretarial Auditor of your Company for the financial year 2019-20.

9. Auditor's Report

(a) Statutory Auditors' Report:

The Auditor's observations read with Notes to Accounts are self-explanatory andtherefore do not call for any comment.

No frauds or instances of mismanagement were reported by the Statutory Auditor underSection 143(12) of the Companies Act 2013.

(b) Cost Audit Report :

As required under the Companies (Accounts) Rules 2014 the cost accounting records asspecified by the Central Government under Section 148(1) of the Companies Act 2013 weremade and maintained by the Company.

The Company had appointed M/s. Kiran J. Mehta & Co. Cost Accountants as the CostAuditors of the Company for auditing cost accounting records for the financialyear2018-19. The Cost Audit Report for the year 2017-18 was e-filed on July 31 2018. The CostAudit for the financialyear 2018-19 is in progress and the report will be e-filed to theMinistry of Corporate Affairs Government of India in due course.

(c) Secretarial Audit Report :

Secretarial Audit Report given by M/s. M Siroya and Company Company Secretaries isannexed with the Report as Annexure 3.

10. Share Capital & Listing

A) The Company does not have any equity shares with differential rights and hencedisclosures as required under Rule 4(4) of the Companies (Share Capital and Debentures)Rules 2014 are not required. Further the Company has not issued any sweat equity andhence no disclosure is required under Rule 8 (13) of Companies (Share Capital andDebentures) Rules 2014.

The Company granted stock options during the year under Report disclosure as requiredunder Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations 2014 and Rule12(9) of the Companies (Share Capital and Debentures) Rules 2014 are as under:

(I) A description of each ESOS that existed at any time during the year including thegeneral terms and conditions of each ESOS including -

(a) Name of the ESOP Plan Welspun Employee Stock Option Plan
(b) Date of shareholders' approval September 30 2005
(c) Total number of options approved under ESOS 5614752
(d) Vesting requirements Vesting: 30% on end of one year from the date of grant; 35% on end of second year from the date of grant and 35% on end of third year from the date of grant.
(e) Exercise price or pricing formula At the discount up to 25% to the latest available closing market price of the equity shares of the Company rounded off to the nearest higher rupee prior to the date of grant.
(f) Maximum term of options granted 3 years
(g) Source of shares (primary secondary or combination) Primary
(h) Variation in terms of options No modifications were made to the schemes during the year.
(II) Method used to account for ESOS - Intrinsic or fair value. The Company has recognized compensation cost using fair value method of accounting. The Company has recognized stock option compensation cost of र 41.94 million in the statement of profit and loss for the financial year 2018- 19
(III) Where the company opts for expensing of the options using the intrinsic value of the options the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options shall be disclosed. The impact of this difference on profits and on EPS of the company shall also be disclosed. The Company accounted for employee compensation cost on the basis of fair value of the options.
(IV) Option movement during the year
Number of options outstanding at the beginning of the period Nil
Options granted 2350000
Options vested Nil
Options exercised Nil
The total number of shares arising as a result of exercise of option Not Applicable
Options forfeited / lapsed None
The exercise price र 100/-
Money realized by exercise of options Not Applicable
Loan repaid by the Trust during the year from exercise price received Not applicable
Number of options outstanding at the end of the year 2350000
Number of options exercisable at the end of the year Nil
Employee wise details of options granted to:-
• Key managerial personnel Mr. Vipul Mathur MD & CEO 1500000
• 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 • Mr. Lal Hotwani - Head- Corporate Accounts & Taxation : 150000
• Mr. Godfrey John- BuH - E MENA India & APAC : 150000
• Mr. T.S.Kathayat- President - Quality & Technical Services: 150000
• Mr. Piyush Thakor- Vice President India Mfg Head: 150000
• Mr. Chintan Thaker- Head - Corporate Affairs and Strategic Planning Cell: 150000
• 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
Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20 "Earnings Per Share". No options were exercisable during the year 2018-19.
Where the company has calculated the employee compensation cost using the intrinsic value of the stock options the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options shall be disclosed. The impact of this difference on profits and on EPS of the company shall also be disclosed. The Company accounted for employee compensation cost on the basis of fair value of the options.
Weighted-average exercise prices and weighted- average fair values of options shall be disclosed separately for options whose exercise price either equals or exceeds or is less than the market price of the stock Weighted-average exercise prices र 100
weighted-average fair value र 52.01
A description of the method and significantassumptions used during the year to estimate the fair values of options including the following weighted-average information:
(i) risk-free interest rate 7.49% to 7.85%
(ii) expected life 1.43 years
(iii) expected volatility 50.00%
(iv) expected dividends 0.55%
(v) the price of the underlying share in market at the time of option grant. र 126.10

(V) Disclosure of Shares held in suspense account under Clause F of Schedule V to theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015

Outstanding Balance in the suspense account lying at the beginning of the year Number of shareholders who approached issuer for transfer of shares from suspense account during the year Transferred/Credited during the year Balance outstanding
No of shareholders No of Shares No of shareholders No of Shares No of shareholders No of Shares No of shareholders No of Shares
45 15190 2 280 2 280 43 14910

The voting rights on these shares shall remain frozen till the rightful owner of suchshares claims the shares.

(VI) Listing with the stock exchanges

The Company's equity shares are listed on the BSE Limited (BSE) and The National StockExchange of India Limited (NSE). The Secured Redeemable Non-Convertible Debentures arelisted on the BSE

Limited.

Applicable annual listing fees for the year 2018-19 have been paid to both the BSE andthe NSE.

11. Extract of the Annual Return

An extract of the annual return in Form MGT-9 of the Companies (Management andAdministration) Rules 2014 is attached to this Report as Annexure 4 and is also placed onthe website of the Company and can be accessed at www.welspuncorp.com.

12. Conservation of energy technology absorption and foreign exchange earnings andoutgo

01. Conservation of energy:

Initiatives taken for conservation of energy its impact are as under:

Sr. No. Description of Energy Efficiency Improvement Measure Energy Savings [kWh/Annum] Savings [In million/ Annum]
At Plate & Coil Mill Anjar
1 Fuel Saving with Recuperator replacement in RHF-2. (Unit SCM/Annum) (SCM 214664) 828571 5.80
2 Impeller Trimming in ICW pumps 10A & 10C interconnection of water circuit of P9 & P10 and stopped running of one pump. 822030 5.75
3 Optimization in Down Coiler Hydraulic "E" System by modification 167585 in sequence of the wrapper rolls operation coming inside. 1.17
4 Optimization in RH Furnace walking beam Hydraulic "A" system with installation of proportional relief valve. 22729 0.16
5 Conventional lighting fixture replacement with LED. [200 no street light & 15 no workshop] 41685 0.29
6 Pre-leveller motor replacement 2102 0.01
7 Installation of thermal Glass wool insulation on false ceiling has been done to reduce heat loss. 3190 0.02
Canvas connection installed in duct branch to diffuser to reduce chilled air losses.
At Pipe Mill Anjar
8 Replacement of LED lights in SPIRAL-3 Coatig-1 L-Saw & L-Saw Coating Plant 131505 0.85
9 Modification done in Tube millsmoke blower (Plasma) 120" and by switching Off the HPMV shade Lights at SPIRAL-2 Plant. 59904 0.39
10 By replacing direct starter to VFDs in Un-coiler machine and submersible pump in ERW Plant. 20154 0.13
11 By doing conveyor interlocking with pipe cutting at ERW Plant. 13692 0.09
12 Installation of low rating motor in Cut-off power pack at ERW Plant 46769 0.3
13 Brushing M/c motor replacement from 7.5 Kw to 0.4 kw 4629 0.03
14 By Installing VFD in L-SAW Expander Pre/Post washing pumps 179170 1.16
15 Provision of Timer for Epoxy dust collector system at L-SAW Coating Plant 7500 0.05
16 Installation of Energy efficient Air compressors at ERW Plants 287270 1.86
17 Air boosting device installation at Plasma cutting machine of SP-2 and SP-3 18381 0.11
At Dahej Plant
18 Installation of 30 Nos 165 W LED fixtures (High 25732bay lights) at "LSAW Shed Lights" in place of 400 W HPSV Fixtures. 0.16
Total 1854027 18.33

02. Technology absorption :

a. Adoption of Intermediate Seam UT at LSAW pipe mill for instant feedback towelding engineers.

b. Adoption of SAP based BIBO system for paper-less business review.

c. Adoption of de-magnetizer system to reduce residual magnetism for filed weldjoints.

03. Research & Development

A. Specific areas in which R&D is carried out by the Company.

Anjar Pipe Mill:

• Development of heavy wall deep offshore severe sour low hardness L415M PSL2grade SAWL pipes.

• Establishment of welding consumables to obtain higher all-weld elongation tomeet the strain capacity in weld metal

• Development of API 5L X65MS large diameter HSAW pipes for onshore sour serviceapplications.

• Development of API 5L X80M/CSA 550 grade large diameter heavy wall LSAW pipesfor onshore sweet service applications.

• Development of hot induction bends without offline heat treatments with uniformproperties along the length using Thermo-Mechanically Controlled hot rolled steels.

• Development of very low diameter/ thickness ratio L450 SAWL pipes for offshoresweet service applications.

• Development of domestic steel mill for supply of API 5L X70M hot rolled coils.

• Development of low carbon-manganese and high niobium hot rolled plates for theproduction of LSAW pipes used for strong onshore and offshore sour service applications.

Dahej Pipe Mill and Coating:-

CTOD facility upgraded to conduct the tests up to +90 C temp.

• Establishment of KISSC test facility as per NACE 0175

• Establishment of welding consumables to obtain higher all-weld elongation tomeet the strain capacity in weld metal.

• Development of API 5L X80M/CSA 550 grade large diameter heavy wall LSAW pipesfor onshore sweet service applications.

• Development of very low diameter/ thickness ratio L450 SAWL pipes for offshoresweet service applications.

• Internal coating Capacity enhanced for 18" pipe sizes.

B. Benefits derived as a result of the above R&D.

Anjar Pipe Mill:

• Ability to cater stringent requirements of pipelines for transportation of gasfrom severe corrosive fields.

• Improvement in the weld integrity of pipelines subjected to the adverseconditions during laying and operation.

• Ability to cater large diameters HSAW pipelines for the economic reasons andnon-availability of wider plates.

• Higher strength-to-weight ratio to facilitate field laying at mountains andlower project cost.

• Low cost and eco-friendly hot induction bends from Thermo-MechanicallyControlled hot rolled steel plates without heat treatments.

• Ability to cater collapse resistant pipelines for transportation of gas fromdeep sea fields.

• Availability of higher grade hot rolled coils for the country's economic growthand implementation of Make-in-India.

• Ability to cater LSAW pipelines as a substitute for expansive alloyed steelpipes.

Dahej Pipe Mill:

• Improvement in CTOD test facility to meet the prestigious client requirements

• Establishment of KISSC test facility to meet the prestigious client requirements

• Improvement in the weld integrity of pipelines subjected to the adverseconditions during laying and operation.

• Higher strength-to-weight ratio to facilitate field laying at mountains andlower project cost.

• Ability to cater collapse resistant pipelines for transportation of gas fromdeep sea fields.

C. Future plan of action

Anjar Pipe Mill:

• Development of higher strength-to-weight ratio hot induction bends using TMCPsteel for API X80M onshore sweet service gas pipelines.

• Development of heavy wall low diameter-to-thickness ratio L450 SFDUP SAWL pipesdeep offshore severe sour service applications.

• Development of API 5L X70M PSL2 strain-based design pipes for pipelines to belaid in high seismic zones.

• Use of new wire and flux for pipelines requiring low temperature toughness andvery low hardness.

• Development of clad/CRA lined pipes for special sour service applications.

• Development of API 5L X70M plates for SAWL pipes used for onshore sweet serviceapplications.

• Development of clad plates for clad/CRA lined pipes for special sour serviceapplications.

Plate and Coil Mill:

Development of API 5L X70M plates for SAWL pipes used for onshore sweetservice applications.

• Development of clad plates for clad/CRA lined pipes for special sour serviceapplications.

Dahej Pipe Mill:

• Development & installation of APDMS (Automatic Pipe Dimensions MeasurementSystem) to cater the customer requirement during pipe laying.

• New Plate UT machine (USIPxx Electronics) installation to meet the new standardrequirement.

• Use of new wire and flux for pipelines requiring low temperature toughness andvery low hardness.

04. Expenditure on R&D

(a) Capital : Nil

(b) Recurring : र 44.63 million

(c) Total : र 44.63 million

(d) Total R&D expenditure as a percentage of revenue from operations : 0.11%

Total Foreign exchange:

Used - र 24611.61 million

Earned- र 8181.13 million

13. Corporate Social Responsibility (CSR)

Disclosures as required under Rule 9 of the Companies (Corporate Social ResponsibilityPolicy) Rules 2014 are annexed to this Report as Annexure 5.

14. Directors and Key Managerial Personnel

A) Changes in Directors and Key Managerial Personnel

Since the last report following changes took place in the Board of Directors and KeyManagerial Personnel:-

• Mr. S. Krishnan Executive Director and Chief Financial Officer & ChiefExecutive Officer (Plate and Coil Mill Division) stepped down from the position of theChief Financial Officer with effect from June 11 2018.

• Mr. Percy Birdy was appointed as the Chief Financial Officer of the Company witheffect from June 11 2018.

• Mr. Mintoo Bhandari Nominee of Insight Solutions Limited ceased to be a directorwith effect from August 01 2018 due to withdrawal of nomination.

• Mr. Kaushik Subramaniam was appointed as a director being the nominee of InsightSolutions Limited with effect from August 21 2018.

• Mr. Ramgopal Sharma resigned from the directorship with effect from September05 2018 due to indifferent health.

• Mr. Dhruv Kaji was appointed as an additional independent director with effectfrom September 05 2018.

• Re-appointment of Mr. Rajkumar Jain Mr. K.H.Viswanathan and Ms. Revathy Ashokas independent directors for second term of five consecutive years with effect from April01 2019.

In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Rajesh Mandawewala and Mr. Utsav Baijal are retiring byrotation at the forthcoming Annual General Meeting and being eligible they have beenrecommended for re-appointment by the Board.

Details about the directors being (re)-appointed are given in the Notice of theforthcoming Annual General Meeting which is being sent to the members along with theAnnual Report.

B) Independent Directors

The independent directors have individually declared to the Board that they meet thecriteria of independence as provided under Section 149(6) of the Companies Act 2013 atthe time of their respective appointment and there is no change in the circumstances as onthe date of this Report which may affect their status as an independent director.

Your Board confirms that in their opinion the independent directors fulfill theconditions prescribed under the SEBI (LODR) 2015 and they are independent of themanagement.

C) Formal Annual Evaluation

The performance evaluation of the Directors was conducted by the entire Board(excluding the Director being evaluated) on the basis of a structured questionnaire whichwas prepared after taking into consideration inputs received from the Directors coveringvarious aspects of the Board's functioning viz. adequacy of the composition of the Boardand its Committees time spent by each of the directors; accomplishment of specificresponsibilities and expertise; conflict of interest; integrity of the Director; activeparticipation and contribution during discussions and governance.

For the financial year 2018-19 the annual performance evaluation was carried out bythe Independent Directors Nomination and Remuneration Committee and the Board whichincluded evaluation of the Board Independent Directors Non-independent DirectorsExecutive Directors Chairman Committees of the Board Quantity Quality and Timelinessof Information to the Board. All the results were satisfactory.

D) Committees of the Board of Directors

Information on the Audit Committee the Nomination and Remuneration Committee theStakeholders' Relationship Share Transfer and Investor Grievance Committee RiskManagement Committee and meetings of those committees held during the year under Report isgiven in the Corporate Governance Report annexed to the Annual Report as Annexure 7.

15. Particulars of outstanding loans guarantees and investments under Section 186 areas under:

(र in million)
Name of the Entity / beneficiary Investment Corporate Guarantee Loans
Welspun Pipes Inc. 0.44 6915.50 -
Welspun Tradings Limited 50.22 5618.22 -
Welspun Captive Power Generation Limited* 656.71 - -
Welspun Mauritius Holdings Limited* 1814.02 - -
Welspun Wasco Coatings Private Limited 254.65 54.25 247.01
Standard Chartered Bank ADR* 16.16 - -
Bonds* 2317.58 - -
Welspun Middle East Pipes Company LLC - 8080.27 -
Welspun Middle East Pipe Coating Company LLC - 368.90 -

* Investment carried at fair value through profit and loss.

The corporate guarantees were given to secure credit facilities availed by thesubsidiaries / joint ventures of your Company guarantee export obligations of thesubsidiaries / joint ventures to the custom authorities and to guarantee performance ofthe subsidiaries of the Company.

16. Particulars of contracts or arrangements with related parties

All related party transactions that were entered into during the year under Report wereon an arm's length basis and were in the ordinary course of business. There were nomaterially significant related party transactions undertaken by the Company withPromoters Directors Key Managerial Personnel or other designated persons which mighthave a potential conflictwith the interest of the Company at large.

The Company's policy on Related Party Transactions as approved by the Board is uploadedon the Company's website at www.welspuncorp. com.

Save and except as disclosed in the financial statements none of the Directors had anypecuniary relationships or transactions vis--vis the Company.

Disclosures as required under the Companies Act 2013 are given in Form AOC-2 annexedas Annexure 6 to this Report.

17. Managerial Remuneration a. Details of the ratio of the remuneration of eachdirector to the median employee's remuneration and other details as required pursuant toRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.

(i) The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year:

Director's name for the period Ratio with reference to median remuneration of the employees
Mr. Vipul Mathur 01.04.2018 to 31.03.2019 145
Mr. S. Krishnan 01.04.2018 to 31.03.2019 96

(ii) The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year endedMarch 31 2019 : Managing Director & CEO: 12.5% ED & CEO (PCMD) : 0% CFO : NAand CS : 10.5%.

(iii) The percentage increase in the median remuneration of employees in the financialyear: 8.96%.

(iv) The number of permanent employees on the rolls of the Company: 2740.

(v) Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over decrease in the market quotations of the shares of the company in comparisonto the rate at which the Company came out with the last public offer in case of listedcompanies and in case of unlisted companies the variations in the net worth of theCompany as at the close of the current financial year and previous financial year : Themarket cap of the Company increased from र 35779.00 million to र 36123.80million. The P/ E ratio changed from 28.46 times to negative. The share price increased by853.40% in comparison to the rate at which the Company came out with the public issue inFebruary 1997 (after taking in to consideration the reorganization of share capital donein March 2005 but without considering other corporate actions not resulting in to anychange in the share capital).

(vi) Average percentile increase /(decrease) already made in the salaries of employeesother than the managerial personnel in the last financial year and its comparison with thepercentile increase/ (decrease) in the managerial remuneration and justification thereofand point out if there are any exceptional circumstances for increase in the managerialremuneration : Aggregate remuneration of employees excluding KMP increased by 14.02%.Change in the remuneration of the KMP reduced by 5.62%.

(vii) The key parameters for any variable component of remuneration availed by thedirectors:

1) Total Production (as per Business Plan approved by the Board)

2) Revenue (as per Business Plan approved by the Board)

3) Profit Before Tax (as per Business Plan approved by the Board)

4) Operating Cash Flow (as per Business Plan approved by the Board)

(viii) Affirmation that the remuneration is as per the remuneration policy of theCompany: YES Employees increment in remuneration is based on the individual performanceand the Company performance for the Financial Year.

b. Details of the top ten employees in terms of remuneration drawn and the name ofevery other employee as required pursuant to Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is as under:

Name Designation DOB Age DOJ Remuneration Previous Company Qualification Nature of Employment % Of Equity Shares held in the Company Relative of any Director/ Manager of the Company
Vipul Mathur Managing Director & CEO 21/03/1970 49 02/02/2001 51557660 Man Industries (India) Ltd MBA Permanent Negligible No
S. Krishnan Executive Director & CEO (PCMD) 17/07/1962 56 03/06/2013 34054703 UPL Limited M. Com/ LLB-Part I/ A.C.A/ A.C.S/ A.I.C.W.A Permanent Negligible No
Lal Hotwani Director# 05/05/1953 66 01/01/2000 22013496 Gammon B.Com Permanent Negligible No
Godfrey John Director # 30/08/1965 54 11/06/2012 21415740 Ferro Tech India Pvt. Ltd. MBA Permanent Negligible No
Percy Birdy CFO 22/01/1968 51 11/06/2018 10644484 Allanasons Group CA Permanent Nil No
Tribhuwan Singh Kathayat President 10/01/1971 48 20/06/1996 11499996 Jindal Organisation BSC/DME/MBA Permanent Negligible No
Suresh Chander Darak President 02/01/1968 51 02/01/2008 10090152 Reliance Industries Ltd. B Com/ DITM Permanent Nil No
Piush Kothari Senior Vice President 15/03/1979 40 03/12/2018 4265698 Aditya Birla Idea Payments Bank PGDM Permanent Nil No
Navin Agarwal Senior Vice President 01/01/1972 47 02/06/2008 9863052 Mahindra & Mahindra Ltd. PGDBM Finance/B. Com (Hons) Permanent Nil No
Atul Trivedi Senior Vice President 03/01/1974 45 14/05/2007 8954268 Tata Consultancy Services CA Permanent Nil No
Paras Jain President 25/07/1958 61 16/01/2006 8783616 Moral Overseas Ltd. CA Permanent Nil No
Gaurav Merchant Vice President 11/09/1973 46 15/01/2014 8298720 Essar Steel Limited B Com/MBA Permanent Nil No
Rupak Ghosh Senior Vice President 17/10/1969 49 29/10/2007 7903008 Blue Star Limited ICWA/ CA Permanent Nil No
Nitin Agarwal Vice President 06/02/1983 36 20/04/2007 7656996 Welspun Tubular LLC MBA/PGDM Permanent Nil No
Ketan Patel Senior Vice President 31/07/1970 49 03/11/2015 7520748 JSW Steel Ltd. CA/ICWA/ B Com Permanent Negligible No
Piyush Thakor Senior Vice President 03/04/1976 43 01/02/2018 7500000 Zenith Birla India Ltd Diploma-Mechanical Engineering Permanent Nil No

# Not on the board of the Company.

c. Managing Director of the Company was not in receipt of any commission from theCompany and at the same time remuneration or commission from the Company's SubsidiaryCompany.

d. Particulars of remuneration to the executive directors including the details ofremuneration paid/payable to the executive directors for the financial year 2018-19 are asunder:

Name of the Director Salary & Allowance Perquisites Commission Service Contract/ Tenure performance linked incentives Notice Period Severance Fees Stock Option Pension
1 Mr. Vipul Mathur* र 42.47 million^ 6.19 million Nil 5 years 2.90 miilion 1 month Nil Refer note below Nil
2 Mr. S. Krishnan र 32.6 million^ Nil Nil 5 Years 1.45 million 1 month Nil Nil Nil

* 1500000 Employee Stock Options granted during FY 2018-19 at an exercise price ofर 100 per option and can be exercised as per the vesting schedule given under theWelspun Employee Stock Option Plan which is 30% 35% and 35% each year from the end of1st year from the grant date.

^ In addition to salary & allowance entitled for other benefits as per theCompany's policy.

Mr. Balkrishan Goenka Non-Executive Chairman was paid Commission of र 18.95million i.e. @1% of the Net Profits in terms of the approval granted by the members of theCompany at the Annual General September 20 2017.

No remuneration or perquisite was paid to and no service contract was entered intowith or stock options granted to any non-executive director but the sitting fees werepaid / payable to the following directors for attending meetings of Board / Committees ofthe Board and General Meetings.

Name of the Director (र) Name of the Director (र)
1 Mr. Atul Desai 548000 6 Mr. Rajkumar Jain 1311000
2 Mr. Desh Raj Dogra 697000 7 Mr. Ram Gopal Sharma 330000
3 Mr. K. H. Viswanathan 1440000 8 Mrs. Revathy Ashok 467000
4 Mr. Mintoo Bhandari 50000 9 Mr. Utsav Baijal 368000
5. Mr. Dhruv Kaji 271000 10 Mr. Kaushik Subramaniam 250000

The above mentioned sitting fee paid / payable to the non-executive directors waswithin the limits prescribed under the Companies Act 2013 for payment of sitting fees.Hence prior approval of the members as stipulated under Regulation 17(6) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 was not required.

18. Shareholding of the Directors of the Company as on March 31 2019

Refer Corporate Governance Report for detail of shareholding of the directors.

Except as mentioned in the Corporate Governance Report none of the other directorshold any shares or convertible securities in the Company.

19. Corporate Governance Certificate

The Compliance certificate obtained from M/s. M Siroya and Company Practicing CompanySecretary regarding compliance of conditions of corporate governance as stipulated underChapter IV read with relevant Schedule to the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is annexed with this Report.

20. Risk management policy

With its fast and continuous expansion in different areas of businesses across theglobe the Company is exposed to plethora of risks which may adversely impact growth andprofitability. The Company recognizes that risk management is of concern to all levels ofthe businesses and requires a structured risk management policy and process involving allpersonnel. With this objective the Company had formulated structured Risk ManagementPolicy thereby to effectively address such risks namely strategic business regulatoryand operational risks. The Policy envisages identification of risks by each businesssegment and location together with the impact that these may have on the businessobjectives. It also provides a mechanism for categorization of risks into Low Medium andHigh according to the severity of risks. The risks identifiedare reviewed by a committeeof the Managing Director & CEO of the Company and the relevant senior executives andthe appropriate actions for mitigation of risks are advised; the risk profile is updatedon the basis of change in the business environment.

For the key business risks identified by the Company please refer to the ManagementDiscussion and Analysis annexed to this Report.

21. Familiarization program for Independent Directors

The details of familiarization program (for independent directors) are disclosed on theCompany's website and a web link thereto is: http://www.welspuncorp.com/system/downloads/attachments/000/000/556/original/ Familiarisation_program_-Final.pdf?1555669692.

22. Code of Conduct

The Company has Code of Conduct for the Board members and Senior Management Personnel.A copy of the Code has been put on the Company's website for information of all themembers of the Board and management personnel.

All Board members and Senior Management Personnel have affirmed compliance of the same.

A declaration signed by the Managing Director & CEO of the Company is given below:

"I hereby confirm that the Company has obtained from all the members of the Boardand the Senior Management Personnel affirmation that they have complied with the Code ofConduct for the financial year 2018-19."

Sd/-

Vipul Mathur

Managing Director& CEO

DIN: 07990476

23. Miscellaneous Disclosures

During the year under Report there was no change in the general nature of business ofyour Company.

Except as mentioned in this Report no material change or commitment has occurred whichwould have affected the financial position of your Company between the end of thefinancial year of your Company to which the financial statements relate and the date ofthe Report.

No significant and material order was passed by the regulators or courts or tribunalswhich would have impacted the going concern status and your Company's operations infuture.

Your Company has not made any provision of money for the purchase of or subscriptionfor shares in your Company to be held by or for the benefit of the employees of yourCompany and hence the disclosure as required under Rule 16(4) of the Companies (ShareCapital and Debentures) Rules 2014 is not required.

The Board of Directors affirms that the Directors have devised proper systems to ensurecompliance with the provisions of all applicable Secretarial Standards issued by theInstitute of Companies Secretaries of India and that such systems are adequate andoperating effectively. The Company has complied with the applicable Secretarial Standards.

The company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. The ICC comprises of internal as well externalmembers.

Disclosure of number of complaints filed disposed of and pending in relation to theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013as on the end of the financial year under Report are as under:

• number of complaints filed during the financial year - Nil

• number of complaints disposed of during the financial year Not applicable

• number of complaints pending as on end of the financial year - Nil

24. Directors' Responsibility Statement

Pursuant to Section 134(3)(c) & 134(5) of the Companies Act 2013 your directorshereby confirm that:

a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b. the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;

c. the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d. the directors had prepared the annual accounts on a going concern basis;

e. being a listed company the directors had laid down internal financial controls tobe followed by the Company and that such internal financial controls are adequate and wereoperating effectively; and

f. the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

Acknowledgements

Your directors acknowledge and place on record its sincere gratitude to the GovernmentAuthorities Financial Institutions Banks Customers Suppliers Shareholders Employeesand other business associates of the Company who through their continued support andco-operation have helped as a partner in your company's progress and achievement of itsobjectives.

For and on behalf of the Board of Directors

Vipul Mathur

Managing Director & CEO

DIN : 07990476

S. Krishnan

Executive Director and CEO (PCMD)

DIN: 06829167

Date : May 15 2019

Place : Mumbai