Welspun Corp Limited
Your directors have pleasure in presenting the 23rd Annual Report of your Company alongwith the Audited Financial Statement for the financial year ended March 31 2018.
1. Financial Results
|Particulars ||Standalone ||Consolidated |
| ||For the year ended ||For the year ended |
| ||31.03.2018 ||31.03.2017 ||31.03.2018 ||31.03.2017 |
|Total income ||53901.15 ||46956.24 ||77185.34 ||62600.65 |
|Profit before finance cost depreciation & tax ||5791.38 ||7153.37 ||8147.45 ||7370.14 |
|Less : Finance costs ||1457.56 ||2073.04 ||1853.28 ||2357.14 |
|Profit before depreciation & tax ||4333.82 ||5080.33 ||6294.17 ||5013.00 |
|Less: Depreciation/Amortization ||2375.30 ||2442.45 ||3793.05 ||3860.80 |
|Add: Share of net loss of joint ventures accounted for using the ||- ||- ||(859.14) ||(793.01) |
|equity method || || || || |
|Profit/(loss) before tax ||1958.52 ||2637.88 ||1641.98 ||359.19 |
|Less : Provision for tax || || || || |
|Current Tax ||1063.00 ||418.10 ||1050.14 ||472.21 |
|Deferred Tax ||(362.66) ||473.77 ||(938.25) ||(214.17) |
|Profit/(Loss) after taxes before Non-controlling interests ||1258.18 ||1746.01 ||1530.09 ||101.15 |
|Less :Non-controlling interests ||- ||- ||(52.94) ||(163.10) |
|Profit/(loss) after tax for the year (after Non-controlling interests) ||1258.18 ||1746.01 ||1583.03 ||264.25 |
|Add : balance brought forward from previous year ||7127.14 ||6237.88 ||16820.00 ||17413.04 |
|Re-measurements of post-employment benefit (net of tax) ||(10.95) ||(21.81) ||(10.96) ||(22.35) |
|Dividend on equity shares ||(132.61) ||(132.61) ||(132.61) ||(132.61) |
|Tax on dividend ||(27.00) ||(27.00) ||(27.00) ||(27.00) |
|Premium on redemption of NCI's share ||- ||- ||(895.65) ||- |
|Transfer to Debenture Redemption Reserve ||1137.26 ||(500.73) ||1137.26 ||(500.73) |
|Transfer to General reserve ||(125.90) ||(174.60) ||(125.90) ||(174.60) |
|Balance carried forward to the next year ||9226.12 ||7127.14 ||18348.17 ||16820.00 |
2. Performance Highlights
Production highlights for the year under Report are as under:
| || || || ||(in MT) |
|Product ||Standalone ||Consolidated |
| ||FY 2017-18 ||FY 2016-17 ||FY 2017-18 ||FY 2016-17 |
|Pipes ||737711 ||682090 ||951516 ||854157 |
|H. R. Plates & Coils ||468682 ||232608 ||468682 ||232608 |
3. Reserves Dividend & Dividend Policy. The Board is pleased to recommend adividend @ 10% for the year ended March 31 2018 i.e. Rs.. 0.50 per equity share ofRs.5/- each fully paid-up out of the net profits. In respect of the dividend declared forthe previous financial years Rs.0.296 million remained unclaimed as on March 31 2018.
The Board proposes to transfer Rs.125.90 million to General Reserves and Rs.1137.26million from Debenture Redemption Reserve to Retained earnings.
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 by the Board in determining the distribution of dividend to theshareholders and/ or retaining the profits earned by the Company. The Policy is annexed tothis Report as Annexure 1 and is also available on your Company's website at:
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.
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.
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. 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 to ratificationby the members of the Company at every Annual General Meeting have given their consent tocontinue to act as the Auditors of the Company for the remaining tenure. Members arerequested to consider their reappointment as the Auditors of the Company and to fix theirremuneration by passing an ordinary resolution under Section 139 of the Companies Act2013.
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 2018-19.
8. Auditors' Report
(a) Statutory Auditors' Report:
The Auditors' 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 :
The Company had appointed M/s. Kiran J. Mehta
& Co. Cost Accountants as the Cost Auditors of the Company for the financial year2017-18. The Cost Audit Report for the year 2016-17 was e-filed on August 10 2017. TheCost Audit for the financial year 2017-18 is in progress and the report will be e-filed tothe Ministry 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.
9. Share Capital & Listing
A) The Company does not have any equity shares with differential rights and hencedisclosures as required in Rule 4(4) of the Companies (Share Capital and Debentures)Rules 2014 are not required. The Company has not issued any sweat equity and stockoptions hence no disclosure is required under Rule 8 (13) of Companies (Share Capital andDebentures) Rules 2014 and the SEBI (Share Based Employee Benefits) Regulations 2014 andRule 12(9) of the Companies (Share Capital and Debentures) Rules 2014.
B) 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 |
|207 ||52010 ||3 ||980 ||162* ||36820* ||45 ||15190 |
*Out of 162 number of shareholders 159 shareholders comprising of 35840 unclaimedshares have been transferred to IEPF with filing of Form IEPF-4 on November 30 2017.
The voting rights on these shares shall remain frozen till the rightful owner of suchshares claims the shares.
C) Listing with the stock exchanges
The Company's equity shares are listed on the BSE Limited (BSE) and the NationalStock Exchange of India Limited (NSE). The Secured Non-Convertible Debentures are listedon the BSE Limited.
Annual listing fees for the year 2017-18 have been paid to BSE and NSE.
10. 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
11. Conservation of energy technology absorption and foreign exchange earnings andoutgo. 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 [Rs.In million/Annum] |
|At Plate & Coil Mill Anjar || || |
|1 ||Pipe line modification to change route of Mill Roll Cooling pump ||2010790 ||14.88 |
|2 ||Impeller trimming in Roller Table Cooling pump. ||950705 ||7.04 |
|3 ||Impeller trimming in Indirect Cooling Water pump. ||206277 ||1.53 |
|4 ||Reshuffling of pumps and pressure reduction during non-production days for ICW system ||147455 ||1.09 |
|5 ||Making Cooling Tower Fans' operation in auto based on temperature. ||376269 ||2.78 |
|6 ||Optimization in Down Coiler Hydraulic "E" System with changing in Wrapper Roll Sequence. ||37083 ||0.27 |
|At Pipe Mill Anjar || || |
|7 ||Replacement of Conventional Lighting Fixtures [total 111 nos] with LED ||39197 ||0.29 |
| ||Fixtures in Pipes & PCMD. || || |
|8 ||Reducing running hours [1 hour/day] of lights in Admin Canteen. ||4200 ||0.03 |
|9 ||Reducing running hours [1 hour/day] of Air Conditioners in Admin Block. ||24207 ||0.18 |
|10 ||Interlocking unloading valve of entry power pack 37kW with all operations [will get automatically OFF if no operation] in ERW 6". ||14516 ||0.11 |
|11 ||Making Cooling tower fan motor ON-OFF as per set water temperature in LSAW. ||10752 ||0.08 |
|12 ||Making Forming Press Exit power pack Trolley TT-1 OFF in auto in idle condition in LSAW. ||12406 ||0.09 |
|13 ||Forming Press Hydraulic power pack motor made off during idle time (switched OFF after 30 min. if no operation) in LSAW. ||43615 ||0.32 |
|14 ||VFD installations in Hydro Tester pump in SP-2. ||45481 ||0.34 |
|At Dahej Plant || || || |
|15 ||Installation of 26 Nos 70 W LED fixtures at "Street Lights" in place of 150 W HPSV Fixtures. ||8364 ||0.05 |
|16 ||Installation of 55 Nos 165 W LED fixtures at "LSAW Shed Lights" in place of 400 W HPSV Fixtures. ||9151 ||0.06 |
|17 ||Forming Washing Exit Conveyor Group-1 & Group 2 ||7114 ||0.05 |
| ||Tack Welding Entry Conveyor Group1 and Group-2 || || |
| ||Total ||3947583 ||29.16 |
01. Technology absorption : a. Adoption of Intermediate Seam UT at LSAW pipe millfor instant feedback to welding engineers. b. Adoption of SAP based BIBO system forpaper-less business review. c. Adoption of de-magnetizer system to reduce residualmagnetism for filed weld joints.
02. Research & Development
A. Specific areas in which R&D is carried out by the Company. Anjar Pipe Mill:
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 X65MS LSAW pipes for onshore high pressure severe-sourservice applications.
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.
B. Benefits derived as a result of the above R&D. Anjar Pipe Mill:
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.
Ability to cater stringent requirements of pipelines for transportation of gasfrom severe corrosive fields.
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.
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 deep offshore severe sour low hardness L415M PSL2grade SAWL pipes.
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.
Anjar Plate and Coil Mill:
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.
03. Expenditure on R&D
Capital : Nil
Recurring : Rs.12.67 million Total : Rs.12.67 million
Total R&D expenditure as a percentage of revenue from operations : 0.03% TotalForeign exchange: Used - Rs.25890.09 million Earned- Rs.7894.55 million
12. 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.
13. 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. Braja Mishra resigned with effect from June 7 2017.
Mr. Lalitkumar Naik was appointed as the Managing Director & Chief ExecutiveOfficer with effect from January 1 2017. He resigned with effect from December 1 2017.
Mr. Vipul Mathur appointed as the Managing Director & Chief ExecutiveOfficer with effect from December 1 2017.
Mr. S. Krishnan Chief Financial Officer of the Company elevated as theExecutive Director and Chief Financial Officer & Chief Executive Officer (Plate andCoil Mill Division) with effect from December 1 2017.
Pursuant to Section 160 of the Companies Act 2013 the Company has received a noticefrom a member proposing Mr. Vipul Mathur and Mr. S. Krishnan for appointment as directorsof the Company. Accordingly a resolution proposing their appointment has beenincluded in the notice convening the Annual General Meeting.
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Balkrishan Goenka and Mr. Rajesh Mandawewala are retiringby rotation at the forthcoming Annual General Meeting and being eligible they have beenrecommended for reappointment 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 in Section 149(6) of the Companies Act 2013 at thetime of their respective appointment and there is no change in the circumstances as on thedate of this Report which may affect their status as an independent director.
Your Board confirms that in their opinion the independent directors fulfill theconditions specified in SEBI (LODR) and they are independent of the management.
C) Formal Annual Evaluation
Like previous financial year this year also the Company followed the evaluationprocess with specific focus on the performance vis--vis the plans meeting challengingsituations performing leadership role within and effective functioning of the Board etc.The evaluation process sought graded responses to a structured questionnaire for eachaspect of the evaluation viz. time spent by each of the directors; accomplishment ofspecific responsibilities and expertise; conflict of interest; integrity of the Director;active participation and contribution during discussions. For the financial year 2017-18the annual performance evaluation was carried out by the Independent Directors Nominationand Remuneration Committee and the Board which included evaluation of the BoardIndependent Directors Non-independent Directors Executive Directors ChairmanCommittees of the Board Quantity Quality and Timeliness of Information to the Board. Allthe results were satisfactory.
D) Committees of the Board of Directors
InformationontheAuditCommitteetheNomination and Remuneration Committee theStakeholders' Relationship Share Transfer and Investor Grievance Committee and meetingsof those committees held during the year under Report is given in the Corporate GovernanceReport annexed to the Annual Report as Annexure 7.
14. Particulars of outstanding loans guarantees and investments under Section 186 areas under:
| || || ||(Rs.in million) |
|Name of the Entity / beneficiary ||Investment ||Corporate Guarantee ||Loans |
|Welspun Pipes Inc. ||0.44 ||6517.50 ||- |
|Welspun Tradings Limited ||50.22 ||7060.01 ||- |
|Welspun Captive Power Generation Limited* ||345.42 ||- ||- |
|Welspun Mauritius Holdings Limited* ||1827.07 ||- ||- |
|Welspun Wasco Coatings Private Limited ||147.55 ||108.49 ||354.11 |
|Standard Chartered Bank ADR ||18.04 ||- ||- |
|Bonds ||1754.20 ||- ||- |
|Welspun Middle East Pipes Company LLC ||- ||2494.58 ||- |
|Welspun Middle East Pipe Coating Company LLC ||- ||361.18 ||- |
* Investment carried at fair value through profit and loss.
The corporate guarantees were given to secure credit facilities availed by thesubsidiaries of your Company guarantee export obligations of the subsidiaries to thecustom authorities and to guarantee performance of the subsidiaries of the Company.
15. 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 made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which might have apotential conflict with 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.
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.
16. 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. Lalitkumar Naik ||01.04.2017 to 30.11.2017 ||150 |
|Mr. Vipul Mathur ||01.12.2017 to 31.03.2018 ||145 |
|Mr. S. Krishnan ||01.12.2017 to 31.03.2018 ||103 |
(ii) The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year:Managing Director & CEO: 13.2%. CFO : 11.49% CS : 4.65%.
(iii) The percentage increase in the median remuneration of employees in the financialyear: 8.08%.
(iv) The number of permanent employees on the rolls of the Company: 2691.
(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 Rs.21907.68 million to Rs.35779.00 million. TheP/ E ratio changed from 12.55 times to 28.46 times. The share price increased by 844.30%in comparison to the rate at which the Company came out with the public issue in February1997 (after taking in to consideration the reorganization of share capital done in March2005 but without considering other corporate actions not resulting in to any change in theshare 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 reduced by 1.2%. Change inthe remuneration of the KMP is not comparable due to change in the Managing Director andappointment of Executive Director during the financial year. Considering remuneration ofthe newly appointed Managing Director and CEO Executive Director & CFO & CEO(PCMD) the aggregate remuneration of KMP reduced by 6.6%.
(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 ||48 ||02/02/2001 ||40290833 ||Man Industries (India) Ltd ||MBA ||Permanent ||0% ||No |
|Lalitkumar Naik* ||Managing Director ||18/10/1961 ||57 ||01/12/2016 ||31018843 ||Aditya Birla Group ||PGDM/ B TechChemical Engineering ||Permanent ||0% ||No |
|S. Krishnan ||Executive Director &CFO and CEO (PCMD) ||17/07/1962 ||56 ||03/06/2013 ||28304109 ||United Phosphorus Ltd. ||M. Com/ LLB-Part I/ A.C.A/ A.C.S/ A.I.C.W.A ||Permanent ||0% ||No |
|P K Mukherjee* ||Director# ||02/01/1961 ||57 ||02/05/1999 ||23705822 ||Kilburn Engineering Ltd ||BE ||Permanent ||0% ||No |
|Godfrey John ||Director# ||30/08/1965 ||53 ||11/06/2012 ||20034467 ||Ferro Tech India Pvt. Ltd. ||MBA ||Permanent ||0% ||No |
|Lal Hotwani ||Director# ||05/05/1953 ||65 ||01/01/2000 ||19831980 ||Gammon India Ltd. ||B.Com ||Permanent ||0% ||No |
|Akhil Jindal ||Director# ||01/12/1969 ||48 ||01/07/2004 ||13021164 ||S Kumars Nationwide Ltd ||MBA ||Permanent ||0% ||No |
|Deepak Chauhan ||Director# ||30/12/1971 ||46 ||01/09/2012 ||12600810 ||Gammon Infra projects Ltd. ||LLB ||Permanent ||0% ||No |
|Tribhuwan Singh Kathayat ||President ||10/01/1971 ||47 ||20/06/1996 ||10380626 ||Jindal Organisation ||BSC/DME/MBA ||Permanent ||0% ||No |
|Gaurang Desai* ||President ||25/08/1972 ||46 ||01/11/2008 ||9380182 ||Gala Precision ||MBA (Fin)/BE (Mech) ||Permanent ||0% ||No |
|Suresh Chander Darak ||President ||02/01/1968 ||50 ||02/01/2008 ||9208168 ||Reliance Industries Ltd. ||B Com/ DITM ||Permanent ||0% ||No |
|Navin Agarwal ||Senior Vice President ||01/01/1972 ||46 ||02/06/2008 ||8840538 ||Mahindra & Mahindra Ltd. ||PGDBM Finance/B.Com (Hons) ||Permanent ||0% ||No |
|Vipin Gandhi ||Vice President ||18/01/1968 ||50 ||25/10/2006 ||8533845 ||Ashok Leyland Ltd. ||MBA ||Permanent ||0% ||No |
|Paras Jain ||President ||25/07/1958 ||60 ||16/01/2006 ||7766757 ||Moral Overseas Ltd. ||CA ||Permanent ||0% ||No |
|Atul Trivedi ||Senior Vice President ||03/01/1974 ||44 ||14/05/2007 ||7727805 ||TCS Ltd. ||CA ||Permanent ||0% ||No |
|Atul Wahi ||President ||23/10/1956 ||62 ||16/07/2012 ||7567748 ||Indian Army ||MBA ||Permanent ||0% ||No |
|Gaurav Merchant ||Vice President ||11/09/1973 ||45 ||15/01/2014 ||7527362 ||Essar Steel Limited ||B Com/MBA ||Permanent ||0% ||No |
|Rupak Ghosh ||Senior Vice President ||17/10/1969 ||49 ||29/10/2007 ||7160082 ||Blue Star Ltd ||ICWA/ CA ||Permanent ||0% ||No |
|Ketan Patel ||Senior Vice President ||31/07/1970 ||48 ||03/11/2015 ||6897027 ||JSW Steel Ltd. ||CA/ICWA/ B Com ||Permanent ||0% ||No |
|Sanjay Batra ||Senior Vice President ||20/08/1968 ||50 ||26/12/2000 ||6864245 ||MSL ||Dip Mech/DBA ||Permanent ||0% ||No |
|Rajeev Singh* ||President ||21/10/1974 ||44 ||06/12/2014 ||5439330 ||BG Group ||BE Met/ MPM & IR ||Permanent ||0% ||No |
* employed for a part of the year. # - Not on the Board.
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 detailsof remuneration paid/payable to the executive directors for the financial year 2017-18 areas under:
| ||Name of the Director ||Salary & Allowance ||Perquisites ||Commission ||Service Contract/ Tenure ||performance Notice || |
| || || || || || ||linked incentives ||Period ||Fees ||Option || |
|1 ||Mr. Lalitkumar Naik# ||Rs.31.02 million ||Nil ||Nil ||4 years 11 months ||Nil ||1 month ||Nil ||Nil ||Nil |
|2 ||Mr. Vipul Mathur ||Rs.15 million* ||Nil ||Nil ||5 years ||Nil ||1 month ||Nil ||Nil ||Nil |
|3 ||Mr. S Krishnan ||Rs.10 million* ||Nil ||Nil ||5 Years ||Nil ||1 month ||NIl ||Nil ||Nil |
* employed as directors with effect from December 1 2017. The remuneration isproportionate to their tenure of employment during 2017-18. The remuneration includesunpaid variable component as well.
# ceased to be the Managing Director with effect from November 30 2017 and henceconsidered proportionate remuneration for FY 2017-18.
Non-Executive Chairman was paid Commission of Rs.27.99 million i.e. @1% of the NetProfits in terms of the approval granted by the members of the Company at the AnnualGeneral Meeting held on September 20 2017. No remuneration or perquisite was paid to andno service contract was entered into with or stock options granted to but the sittingfees were paid to the following directors for attending meetings of Board / Committees ofthe Board.
|SR ||Name of the Director ||(Rs.) ||SR ||Name of the Director ||(Rs.) |
|1 ||Mr. Atul Desai ||212000 ||5 ||Mr. Rajkumar Jain ||876000 |
|2 ||Mr. Desh Raj Dogra ||226000 ||6 ||Mr. Ram Gopal Sharma ||655000 |
|3 ||Mr. K. H. Viswanathan ||948000 ||7 ||Mrs. Revathy Ashok ||114000 |
|4 ||Mr. Mintoo Bhandari ||339000 ||8 ||Mr. Utsav Baijal ||Nil |
The above mentioned sitting fee paid to the non-executive directors was within thelimits prescribed under the Companies Act 2013 for payment of sitting fees. Hence priorapproval of the members as stipulated under Regulation 17(6) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 was not required.
17. Shareholding of the Directors of the Company as on March 31 2018
Refer Corporate Governance Report for detail of shareholding of the directors. Exceptas mentioned in the Corporate Governance Report none of the other directors hold anyshares or convertible securities in the Company.
18. Corporate Governance Certificate
The Compliance certificate obtained from M/s. JMJA & Associates LLP CompanySecretaries regarding compliance of conditions of corporate governance as stipulated inChapter IV read with relevant Schedule to the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is annexed with this Report.
19. 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 identified are reviewed by a committeeof senior executives and the Managing Director & CEO of the Company and appropriateactions for mitigation of risks are advised; the risk profile is updated on the basis ofchange in the business environment. For the key business risks identified by the Companyplease refer to the Management Discussion and Analysis annexed to this Report.
20. Familiarization program for Independent Director
The details of familiarization program (for independent directors) are disclosed on theCompany's website and a web link thereto is: http://www.welspuncorp.com/systemdownloads/attachments/000/000/147/original/ Familiarisation_program_-Final_-23.02.2015_(23.05.16).pdf?1491551542
21. Code of Conduct
The Company has Code of Conduct for Board members and Senior Management Personnel. Acopy of the Code has been put on the Company's website for information of all the membersof 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 Board andManagement Personnel affirmation that they have complied with the Code of Conduct for thefinancial year 2017-18."
Managing Director& CEO DIN: 0007990476
22. Miscellaneous Disclosures
During the year under Report there was no change in the general nature of business ofyour Company. No material change or commitment has occurred which would have affected thefinancial position of your Company between the end of the financial year of your Companyto which the financial statements relate and the date of the Report. No significant andmaterial order was passed by the regulators or courts or tribunals which would haveimpacted the going concern status and your Company's operations in future.
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.
Further during the year under Report no case of sexual harassments was reported to theInternal Complaints Committee formed under the provisions of Sexual Harassment of Women atworkplace (Prevention Prohibition and Redressal) Act 2013.
23. 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 applicableaccounting standards had been followed along with proper explanation relating to materialdepartures; b. the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period; c. the directorshad taken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; d. thedirectors had prepared the annual accounts on a going concern basis; e. being a listedcompany the directors had laid down internal financial controls to be followed by theCompany and that such internal finan-cial controls are adequate and were operatingeffectively; and f. the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
Your directors thank the Government Authorities Financial Institutions BanksCustomers Suppliers Shareholders Employees and other business associates of theCompany who through their continued support and co-operation have helped as the partnerin your company's progress and achievement of its objectives.
For and on behalf of the Board of Directors
|For and on behalf of the Board of Directors |
|Vipul Mathur |
|Managing Director & CEO |
|DIN : 0007990476 |
|S. Krishnan |
|Executive Director & CFO and CEO (PCMD) |
|DIN: 06829167 |
|Date: May 2 2018 |
|Place: Mumbai |
Annexure - 1
Welspun Corp Limited's Dividend Distribution Policy
1. REGULATORY FRAMEWORK
The Securities Exchange Board of India ("SEBI") on July 8 2016 insertedRegulation 43A in SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 which requires top five hundred listed companies (based on market capitalization ofevery financial year) to formulate a Dividend Distribution Policy.
Welspun Corp Limited ("Company") being one of the top five hundred listedcompanies as per the market capitalization as on the last day of the immediately precedingfinancial year frames this policy to comply with the requirements of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
2. OBJECTIVE & PHILOSOPHY
The objective of this Policy is to provide predictability of dividend to theinvestors and at the same time to enable them to plan for utilization of their income andto ensure the right balance between the quantum of dividend paid and amount of profitsretained in the business for various purposes. Through this Policy the Company wouldendeavor to maintain a consistent approach to dividend pay-out plans subject to theapplicable laws and conditions.
The philosophy of the Company is to maximize the shareholders' wealth in theCompany through various means. The focus will continue to be on sustainable returnsthrough an appropriate capital strategy for both medium term and longer term valuecreation. Accordingly the Board would continue to adopt a progressive and dynamicdividend policy ensuring the immediate as well as long term needs of the business.
3. DIVIDEND DECLARATION - CIRCUMSTANCES AND FINANCIAL PARAMETERS.
The Board will consider present situation of the Company internal and externalfactors influencing performance of the Company its strategy and business plan for thefuture. After considering such factors the Board will endeavor to achieve distributingupto 25% of Profit After Tax for a financial year on standalone basis with equityshareholders (including by way of dividend and Dividend Distribution Tax thereon).
The shareholders may expect dividend in following circumstances:
a. The Board will assess the Company's financial requirement including present andfuture organic and inorganic growth opportunities and other relevant factors.
b. In the circumstances where no material event has occurred affecting the long termbusiness stability of the Company.
c. No event has happened which may have long term material effect on the business ofthe Company. In such circumstances dividend may be recommended or declared at thediscretion of the Board.
Any deviation from the Policy may be disclosed in the Directors' Report to theShareholders.
In the event of inadequacy or absence of profits in any year the Company may declaredividend out of free reserves subject to the fulfillment of the conditions prescribedunder applicable laws and in compliance with the terms of sanction from the Banks /Financial Institutions.
4. FACTORS FOR DETERMINING DIVIDEND
In determining the Company's dividend payout the Board of Directors would consider avariety of factors including:
|A. ||Internal Factors ||B. ||External Factors |
|i) ||Stability / trends of earnings ||i) ||Prevailing legal requirements tax rules Government policies Statutory conditions or restrictions as may be provided under applicable laws |
|ii) ||Liquidity of funds || || |
|iii) ||Need for additional capital || || |
|iv) ||Acquisitions and/or any other potential strategic action ||ii) ||State of the industry or economy of the country |
|v) ||Expansion of business ||iii) ||Capital market scenario |
|vi) ||Past dividend trends ||iv) ||Financial covenants stipulated by the lenders |
|vii) ||Dividend type and time of its payment ||v) ||Covenants in agreement with shareholding group(s) |
5. PARAMETERS WITH REGARDS TO VARIOUS CLASSES OF SHARES
The Company shall first declare dividend on outstanding preference shares if any atthe rate of dividend fixed at the time of issue of preference shares and thereafter thedividend would be declared on equity shares.
6. UTILIZATION OF RETAINED EARNINGS
The earnings retained by the Company after distribution of dividend to the membersmay be used inter alia to:- a. Maintain existing operations;
b. Acquisitions expansion or diversification;
c. Funding organic and inorganic growth;
d. Short-term investment in risk-free instruments with moderate returns;
e. Repayment of borrowings; f. Meet contingent and other liabilities; g. Issue of BonusShares; h. Buyback of securities; i. Investment in Subsidiaries; j. Research andDevelopment; k. Innovation; l. Acquisition of Intellectual Property Rights;
m. Any other purpose as the Board may deem appropriate in the best interest of theCompany;
7. AMENDMENTS / MODIFICATIONS i. This Policy would be subject to revision/amendment in accordance with the guidelines as may be issued by Ministry of CorporateAffairs Securities Exchange Board of India or such other regulatory authority as may beauthorized from time to time on the subject matter. ii. The Company reserves its rightto alter modify add delete or amend any of the provisions of this Policy. iii. In caseof any amendment(s) clarification(s) circular(s) etc. issued by the relevantauthorities not being consistent with the provisions laid down under this Policy thensuch amendment(s) clarification(s) circular(s) etc. shall prevail upon the provisionshereunder and this Policy shall stand amended accordingly from the effective date as laiddown under such amendment(s) clarification(s) circular(s) etc. iv. Any difficulty orambiguity in this Policy will be resolved by the Board of Directors in line with the broadintent of this Policy. The Board may also establish further rules and procedures fromtime to time to give effect to the intent of this Policy and further the objective ofgood corporate governance. v. When the Company proposes to declare dividend on the basisof parameters other than what is mentioned in the Policy or proposes to change itsdividend distribution policy the same along with the rationale shall be disclosed.Approved & adopted by the Board of Directors at its meeting held on May 8 2017.
(Pursuant to first proviso to sub-section (3) of section 129 read with Rule 5 ofCompanies (Accounts) Rules 2014)
Statement containing salient features of the financial statement ofsubsidiaries/associate companies/joint ventures
Part "A": Subsidiaries
(Information in respect of each subsidiary to be presented with amounts in Rs.inmillion)
|1. Sl. No. ||1 ||2 ||3 ||4 |
|2. Name of the subsidiary : ||Welspun Tradings Limited ||Welspun Mauritius Holdings Limited ||Welspun Pipes Inc.(see note 3) ||Welspun Middle East DMCC |
|3. The date since when subsidiary was acquired ||30.03.2010 ||19.04.2010 ||16.08.2006 ||02.03.2011 |
|4. Reporting period for the subsidiary concerned if different from the holding company's reporting period : ||N.A. ||N.A. ||N.A. ||N.A. |
|5. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries. : ||INR ||USD* ||USD* ||USD* |
|6. Share capital : ||50.13 ||1533.84 ||541.51 ||3.36 |
|7. Reserves & surplus: ||759.97 ||344.78 ||8954.54 ||17.15 |
|8. Total assets : ||5488.15 ||2859.20 ||20937.23 ||22.25 |
|9. Total Liabilities : ||4678.05 ||980.58 ||11441.18 ||1.74 |
|10. Investments@ : ||83.03 ||Nil ||Nil ||Nil |
|11. Turnover (including other income) ||23588.52 ||Nil ||33443.80 ||42.47 |
|12. Profit/ (Loss) before taxation : ||182.14 ||34.63 ||(320.21) ||(18.94) |
|13. Provision for taxation: ||63.45 ||3.43 ||(824.98) ||Nil |
|14. Profit/ (Loss) after taxation: ||118.69 ||31.20 ||504.77 ||(18.94) |
|15. Proposed Dividend: ||Nil ||Nil ||Nil ||Nil |
|16. % of shareholding ||100.00% ||89.98% ||94.79% ||100.00% |
Closing Rate USD 1= Rs.65.175 Average Rate USD 1 = Rs.64.447
@ Excluding investments in subsidiaries.
1. Names of subsidiaries which are yet to commence operations Nil
2. Names of subsidiaries which have been liquidated or sold during the year None.
3. Includes performance of step down subsidiaries viz. Welspun Tubular LLC and WelspunGlobal Trade LLC.
Part "B": Associates and Joint Ventures
Statement pursuant to Section 129 (3) of the Companies Act 2013 related to AssociateCompanies and Joint Ventures:
|Sl. No. ||1 ||2 ||3 |
|Name of the joint ventures ||Welspun Middle East Pipes LLC# ||Welspun Middle East Pipes Coating LLC# ||Welspun Wasco Coatings Private Limited |
|1. Latest audited Balance Sheet Date ||31.03.2018 ||31.03.2018 ||31.03.2018 |
|2. Date on which the Associate or Joint Venture was associated or Acquired ||17.10.2010 ||17.10.2010 ||30.09.2015 |
|3. Shares of Associate / Joint Ventures held by the company on the year end || || || |
|- Numbers of Shares ||38031042 ||16886189 ||14755014 |
|- Amount of Investments ||661.06 ||293.52 ||147.55 |
|- Extend of Holding % ||50.01% ||50.01% ||51.00% |
|4. Description of how there is significant influence ||NA ||NA ||NA |
|5. Reason why the associate / joint venture is not consolidated ||NA ||NA ||NA |
|6. Net worth attributable to Shareholding as per latest audited Balance Sheet ||1959.99 ||(668.34) ||105.41 |
|7. Profit / Loss for the year || || || |
|- Considered in Consolidation ||(642.23) ||(165.45) ||(51.46) |
|- Not Considered in Consolidation ||(641.98) ||(165.38) ||(49.42) |
Reporting currency #SAR Closing Rate SAR 1= Rs.17.382 Average Rate SAR 1= Rs.17.188
1. Names of associates or joint ventures which are yet to commence operations. - NA
2. Names of associates or joint ventures which have been liquidated or sold during theyear. - NA
|For and on behalf of the Board || |
|Rajesh Mandawewala ||Vipul Mathur |
|Director ||Managing Director & CEO |
|DIN: 00007179 ||DIN : 0007990476 |
|S.Krishnan ||Pradeep Joshi |
|Executive Director & CFO and CEO (PCMD) ||Company Secretary |
|DIN: 06829167 ||FCS-4959 |
Form No. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)
Form for disclosure of particulars of contracts/arrangements entered into by theCompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arm's length transactions under third provisothereto.
1. Details of contracts or arrangements or transactions not at arm's length basis: Notapplicable
2. Details of material contracts or arrangement or transactions at arm's length basiswhich are more than 10% of the total transactions of the same type:
| ||Name(s) of the related party and nature of relationship ||Duration of the contracts / arrangements/ transactions ||Salient terms of the contracts or arrangements or transactions including the value if any ||Date(s) of approval by the Board ||Amount paid as advances if any ||Amount (Rs.. Million) |
|1) ||Sale of goods Welspun Tradings Limited ||Ongoing ||Based on transfer pricing guidelines ||07.08.2014 ||Nil ||23733.62 |
| ||Welspun Tubular LLC ||Ongoing ||Based on transfer pricing guidelines ||07.08.2014 ||Nil ||20.01 |
|2) ||Interest Income || || || || || |
| ||Welspun Wasco Coatings Private Limited ||3 Equal installments after expiry of 3 years from end of quarter after last utilization ||Based on transfer pricing guidelines ||25.06.2015 ||Nil ||35.51 |
|3) ||Guarantee Commission received || || || || || |
| ||Welspun Middle East Pipes LLC ||5 Years ||Based on transfer pricing guidelines ||30.06.2012 ||Nil ||11.92 |
| ||Welspun Pipes Inc. ||5 Years ||Based on transfer pricing guidelines ||25.10.2016 ||Nil ||91.72 |
| ||Welspun Wasco Coatings Private Limited ||2 Years ||Based on transfer pricing guidelines ||10.02.2017 ||Nil ||1.89 |
|4) ||Purchase of goods and services || || || || || |
| ||Welspun Captive Power Generation Limited ||Ongoing ||Based on transfer pricing guidelines ||28.01.2015 ||Nil ||592.41 |
|5) ||Sale of Fixed Assets || || || || || |
| ||Welspun Anjar SEZ Private Limited ||One Time ||Based on transfer pricing guidelines ||04.08.2017 ||Nil ||35.31 |
|6) ||Purchase of Fixed Assets || || || || || |
| ||Welspun Tubular LLC ||One Time ||Based on transfer pricing guidelines ||08.05.2017 ||Nil ||3.38 |
|7) ||Rent paid || || || || || |
| ||Welspun Realty Private Limited ||3 Years ||Based on transfer pricing guidelines ||23.05.2016 ||Nil ||53.03 |
|8) ||Rent Received || || || || || |
| ||Welspun Wasco Coatings Private Limited ||10 Years ||Based on transfer pricing guidelines ||21.07.2015 ||Nil ||7.79 |
|9) ||Loans Deposits given || || || || || |
| ||Welspun Wasco Coatings Private Limited ||3 Equal installments after expiry of 3 years from end of quarter after last utilization ||Based on transfer pricing guidelines ||25.06.2015 ||Nil ||98.04 |
Note : The above transactions are material as per SEBI Regulations2015. Othertransactions which are not material transactions but entered into in the ordinarycourse of business and on arm's length basis are mentioned in the note no. 42 of theaudited financial statements.
| ||For and on behalf of the Board of Directors |
| ||Vipul Mathur |
| ||Managing Director & CEO |
| ||DIN : 0007990476 |
| ||S. Krishnan |
|Date: May 2 2018 ||Executive Director & CFO and CEO (PCMD) |
|Place: Mumbai ||DIN: 06829167 |