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Welspun Enterprises Ltd.

BSE: 532553 Sector: Infrastructure
NSE: WELENT ISIN Code: INE625G01013
BSE 00:00 | 24 Apr 2020 Welspun Enterprises Ltd
NSE 05:30 | 01 Jan 1970 Welspun Enterprises Ltd

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OPEN 50.85
PREVIOUS CLOSE 52.20
VOLUME 4457
52-Week high 142.35
52-Week low 33.35
P/E 4.83
Mkt Cap.(Rs cr) 758
Buy Price 50.20
Buy Qty 480.00
Sell Price 50.95
Sell Qty 25.00
OPEN 50.85
CLOSE 52.20
VOLUME 4457
52-Week high 142.35
52-Week low 33.35
P/E 4.83
Mkt Cap.(Rs cr) 758
Buy Price 50.20
Buy Qty 480.00
Sell Price 50.95
Sell Qty 25.00

Welspun Enterprises Ltd. (WELENT) - Director Report


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Company director report

To

The Members

Welspun Enterprises Limited

The directors have pleasure in presenting the 25th Annual Report of theCompany along with the Audited

Financial Statements for the financial year ended March 31 2019.

1. FINANCIAL RESULTS:

(Rs. in lakhs)

Particulars Standalone Consolidated
F.Y. 2018-19 F.Y. 2017-18 F.Y. 2018-19 F.Y. 2017-18
Revenue from operations 173942 99720 178660 106713
Other Income 5462 9556 7387 11481
Total Income 179404 109276 186047 118195
Total Expenditure 158187 95427 165884 104375
Share of profit/ (loss) from associate and joint venture - - (1450) (285)
Profit Before Tax 21217 13849 18713 13534
Exceptional Items 1985 1417 1985 (1961)
Tax expenses/ (credit) 7833 4292 8022 4630
Profit for the year 15369 10974 12676 6943
Other Comprehensive Income (32) (88) (33) (92)
Total Comprehensive Income 15337 10886 12643 6851
Earnings Per Share
Basic (Rs.) 10.40 7.44 8.58 4.71
Diluted (Rs.) 10.34 7.37 8.53 4.66

The financial statements have been prepared in accordance with the applicableaccounting standards.

2. PERFORMANCE HIGHLIGHTS:

Performance highlights for the financial year ended March 31 2019 are as under:

(Rs. in lakhs)

Particulars Standalone Consolidated
FY 2018-19 FY 2017-18 FY 2018-19 FY 2017-18
Revenue from Engineering Procurement and Construction (‘EPC') and other operating income 173478 96741 177597 102695
Toll Collection 464 2979 1063 4018

Since the last report the following developments took place:

Delhi-Meerut Expressway Package-1 ("the Project") India's first and onlycompleted HAM project was completed 332 days ahead of the scheduled completion date andreceived the certificate for commercial operation w.e.f. June 28 2018. Welspun DelhiMeerut Expressway Private Limited (a wholly-owned subsidiary of the Company) received Rs.27.09 crore (excluding GST) as bonus from National Highways Authority of India for earlycompletion of the Project. Accolades for the Project (1) The Project was a Finalist in theAnnual Awards for Excellence in National Highways instituted by the Ministry of RoadTransport and Highways (MORTH). (2) The Project was chosen as a CHAMPION in the categoryof Excellence in Construction Management (PPP). (3) Awarded ‘Best TransportationInfrastructure Project' by Indian Concrete Institute.

For project relating to upgradation of Roads/Two Laning of Roads/ Two Laning of Roadwith paved shoulder under MRIP Package on Hybrid Annuity Mode (HAM) Package No. AM 2 underPublic Works Circle Amravati in Maharashtra State the Public Works Department declaredthe Appointed Date as May 28 2019.

The Dewas Industrial Water Supply Project was completed ahead of the scheduledcompletion date and subsequently received the provisional completion certificate forcommencing commercial operation w.e.f. April 30 2019.

For project relating to four laning of Chikhali Tarsod (Package-IIA) section of NH-6from km. 360.000 to km.422.700 in the State of Maharashtra National Highways Authority ofIndia declared the Appointed Date as January 16 2019.

For project relating to six laning of Aunta-Simaria (Ganga Bridge with approach roads)National Highways Authority of India declared the Appointed Date as August 30 2018.

The Company received award from the Construction World magazine for the "FastestGrowing Construction Company" in the ‘Small' segment.

Selected by the Construction World magazine as one of the "Top Challengers"which showcases promising companies who have demonstrated their ability to grow over theprevious year despite challenging circumstances.

3. SCHEME OF AMALGAMATION:

The Scheme of Amalgamation of Anjar Road Private Limited (‘ARPL' or the‘Transferor Company') with Welspun Enterprises Limited (‘WEL' or the‘Transferee Company') and their respective shareholders and creditors (‘theScheme') was approved by the shareholders on March 19 2019. The Hon'ble National CompanyLaw Tribunal Ahmedabad Bench heard the matter on June 12 2019 and the order approvingthe Scheme is awaited.

The Scheme provides for transfer of all the assets and liabilities of the TransferorCompany as on the Appointed Date to the Transferee Company and in consideration thereof58415951 fully paid up equity shares of Rs. 10/- each of the Transferee Company shallbe issued and allotted as fully paid up to the equity shareholders of the TransferorCompany in proportion of their holding in the Transferor Company.

4. RECLASSIFICATION OF CO-PROMOTER AS PUBLIC SHAREHOLDER:

The Company's foreign co-promoter viz. Intech Metals S.A. has applied forre-classification as public shareholder. The reclassification application is pending forapproval of the stock exchanges.

5. DIVIDEND & TRANSFER TO RESERVES:

The Board is pleased to recommend a dividend @ 20% for the year ended March 31 2019i.e. Rs. 2/- per equity share of Rs. 10/- each fully paid up out of the net profits. Inrespect of profit declared during the previous year Rs. 12.64 lakhs remained unclaimed ason March 31 2019.

The Company has appointed Ms. Priya Pakhare Company Secretary as the Nodal Officer forthe purpose of co-ordination with Investor Education and Protection Fund Authority.Details of the er are available on the website of the Offic Nodal Company atwww.welspunenterprises.com.

As per the Dividend Distribution Policy of the Company the Board endeavors to achievedistribution of an amount of profit subject to maximum of 25% of Profit year onconsolidated basis or standalone basis whichever is higher. The amount of dividendtogether with the Dividend Distribution Tax for the year ended March 31 2019 works out to23.23% of Profit After Tax on standalone basis. The Policy is available on the Company'swebsite at: http://www.welspunenterprises.com/userfiles/file/WEL%20Dividend%20Distribution%20 Policy%20%20(1).pdf

6. INTERNAL CONTROLS:

The Company has adequate internal control system which is commensurate with the sizescale and complexity of its operations. The Company has a process in place to continuouslymonitor existing controls and identify gaps and implement new and / or improved controlswherever the effect of such gaps would have a material impact on the Company's operation.

7. SUBSIDIARIES/JOINT VENTURES/ASSOCIATE COMPANIES:

During the year the following subsidiaries/ joint venture companies were incorporated:(1) Welsteel Enterprises Private Limited (2) DME Infra Private Limited (3) GrenobleInfrastructure Private Limited (4) Welspun Sattanathapuram Nagapattinam Road PrivateLimited (5) Welspun Road Infra Private Limited and (6) Welspun Amravati Highways PrivateLimited.

The Company completed the transaction for sale of balance 13% stake in Dewas BhopalCorridor Private Limited with India Infrastructure Fund-II during the year.

A report on the performance and financial position of each of the subsidiaries/ jointventure/ associate companies included in the consolidated financial statements ispresented in Form AOC-1 annexed to this Report as Annexure - 1.

The Company's policy on Material Subsidiary as approved by the Board is uploaded on theCompany's website www.welspunenterprises. com and a web link thereto is:http://www.welspunenterprises.com/userfiles/ file/Policy%20for%20governance%20of%20Material%20and%20other%20Subsidiaries.pdf

8. AUDITORS AND AUDITORS' REPORT:

a) Statutory Auditors

The Company's Auditors M/s. MGB & Co. LLP Chartered Accountants who have beenappointed as the Auditors of the Company for the period up to the conclusion of the 26thAnnual General Meeting subject to tion by the members of the Company ratifica at everyAnnual General Meeting have given their consent to continue to act as the Auditors of theCompany. They are holding certificate issued by the Peer valid Review Board of theInstitute of Chartered Accountants of India. Members are requested to ratify theirappointment as the Auditors of their remuneration the Company and to fix asrecommended by the Board by passing an ordinary resolution under Section 139 of theCompanies Act 2013.

Total fees for all services paid by the Company and its subsidiary/ joint venture/associate companies on a consolidated basis to the Auditors and all entities in thenetwork firm/network entity of which the auditor is a part during the financial year underReport is Rs. 50.44 lakh.

The Auditors' observation if any read with Notes to Accounts are self-explanatory andtherefore do not call for any comment.

b) Cost Auditors

Pursuant to the provisions of Section 148 of the Companies Act 2013 read with Rule 14of the Companies (Audit and Auditors) Rules 2014 the Board of Directors of the Companyon the recommendation of the Audit Committee has appointed M/s. Kiran J. Mehta and Co.Cost Accountants (Firm Registration Number 000025) as the Cost Auditors of the Company forthe financial year 2019-20. Members are requested to ratify their remuneration by passingan ordinary resolution.

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 the financial year 2018-19. The Cost Audit Report for the year2017-18 was e-filed on August 8 2018. The Cost Audit for the financial year 2018-19 is inprogress and the report will be e-filed to Ministry of Corporate Affairs Government ofIndia in due course.

c) Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with Rule 9of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theBoard of Directors of the Company had appointed M/s. Mihen Halani & AssociatesCompany Secretaries as the Secretarial Auditors of the Company for the financial year2018-19.

The Secretarial Audit Report for the financial year ended March 31 2019 is annexedwith the report as Annexure 2. There is no qualification reservation or adverse remark ordisclaimer made by the Company Secretary in Practice in the Secretarial Audit Report.

The Board of Directors has appointed M/s. Mihen Halani & Associates CompanySecretaries as the Secretarial Auditors of the Company for the financial year 2019-20.

d) Details in respect of frauds reported by Auditors other than those which arereportable to the Central Government

The Statutory Auditors of the Company have not reported any fraud to the AuditCommittee or to the Board of Directors under Section 143(12) of the Companies Act 2013read with Rule 13 of the Companies (Audit and Auditors) Rules 2014.

9. SHARE CAPITAL & LISTING

a) Issue of equity shares with differential rights

The Company does not have any equity shares with differential rights.

b) Issue of sweat equity shares

During the year under report the Company has not issued any sweat equity share.

c) Issue of employee stock options

During the financial year 2018-19 550000 equity shares were allotted to the ESOPgrantees who had exercised the option attached to the Welspun Enterprises LimitedEmployees Stock Option Plan-2017" ("WEL ESOP Scheme 2017").

The shareholders of the Company at the 24th Annual General Meeting held onAugust 14 2018 approved modification of the WEL ESOP Scheme 2017. The applicabledisclosures as stipulated under Regulation 14 of the SEBI (Share Based Employee Benefits)Regulations 2014 read with SEBI circular no. CIR/CFD/POLICY CELL/2/2015 dated June 162015 with regard to WEL ESOP Scheme 2017 are available on the website of the Company atwww.welspunenterprises.com and weblink thereto is: http://www.welspunenterprises.com/userfiles/file/ESOP%20disclosure%20-%20 Reg%2014%20-%202018-19.pdf

The particulars required to be disclosed pursuant to the SEBI (Share Based EmployeeBenefits) Regulations 2014 and Rule 12(9) of the Companies (Share Capital and Debentures)Rules 2014 are given below:

Sr. No. Particulars WEL ESOP Scheme -2017
a Options granted during FY 2018-19 Nil
b Options vested during FY 2018-19 600000
c Options exercised during FY 2018-19 550000
d Total number of shares arising as a result of exercise of 550000
Options
e Options lapsed Nil
f Exercise Price Nil
g Variation of terms of options Date of vesting of the last tranche was changed from 10.10.2022 to 14.07.2022
h Money realized by exercise of options Nil
i Total number of options in force 2450000
j Employee Key Managerial Personnel wise details Other employee who receives a grant of of options options in any one year of option amounting granted to to five percent or more of options granted during that year. No fresh option was granted during the year.
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.
k Diluted Earnings Per Share (Rs.) 10.34
l Weighted-average exercise price (Rs.) 0
m Weighted-average fair values of options (Rs.) - As per Black Scholes Valuation model) 139.30

d) Provision of money by Company for purchase of its own shares by employees or bytrustees for the benefit of employees

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

e) 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).

Annual listing fees for the year 2019-20 have been paid to BSE and NSE.

f) Disclosure with respect to shares held in unclaimed suspense account

The details of unclaimed shares account as required to be disclosed pursuant to Point Fto Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 are as under:

Aggregate number of shareholders and the outstanding shares in the unclaimed shares account lying at the beginning of the year Number of shareholders who approached issuer for transfer of shares from unclaimed shares account during the year Number of shareholders to whom shares were transferred from unclaimed shares account during the year Aggregate number of shareholders and the outstanding shares in the unclaimed shares account lying at the end of the year
No. of Holders No. of Shares No. of Holders No. of Shares No. of Holders No. of Shares No. of Holders No. of Shares
31224 209 0 0 0 0 31224 209

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

10. FINANCE:

a) Credit Rating

The details of credit rating assigned to the Company are as follows:

Facilities Rating Rating Agency
Long term bank facilities CARE AA-; Stable (Double A Minus; Outlook : Stable) Credit Analysis & Research Limited
Long term / Short term bank facilities CARE AA-; Stable/ Care A1+ (Double A Minus; Outlook : Stable/A One Plus) Credit Analysis & Research Limited
Non - convertible Debentures BWR AA (SO) Brickwork Ratings India Private Limited.

b) Deposits

The Company has not accepted any deposit within the meaning of 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.

11. EXTRACT OF THE ANNUAL RETURN:

An extract of the annual return in Form

MGT-9 of the Companies (Management and Administration) Rules 2014 is attached to this

Report as Annexure – 3 and is also placed on the website of the Company and can beaccessed at www.welspunenterprises.com.

12. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:

Energy conservation -

In the area of alternate energy the Company has taken initiatives beyond its normalscope of works. At our Delhi Meerut Expressway Package-I project an entire solar powerplant of capacity 1050 kw at an investment of Rs 7.5 crore has been installed. This powerplant installed on the Yamuna bridge has generated 5.03 lakh units of green energy tomeet the requirements of the complete 8.716 km stretch thereby reducing the intake fromthe power grid.

Another initiative to reduce our carbon footprint is the installation of LED lightbulbs at our Delhi Meerut Expressway Package-I project reducing our power consumption.

Technology absorption -

a) At our Delhi Meerut Expressway Package-I project India's first and only completedHAM project vertical green walls have been installed along both sides of the Yamunabridge with drip irrigation technology. This helps in reducing pollution along with betteraesthetics.

b) The Company has utilized new building techniques in its projects it is one of thefew companies in India to have used pile foundations in constructing a river bridge whichis a faster method of construction and helps in quality control.

c) SAP PS-Module is used to monitor the physical and financial progress on all ourprojects.

d) SAP GRC which is a modern access controls module is implemented for monitoring theuser access risk's and to reduce the process complexity and cut costs – whileprotecting organizations reputation and financial well-being.

e) Microsoft SharePoint Document Management System (DMS) is implemented and is beingused efficiently for managing the sensitive and vulnerable information within theorganization.

f) Geofence which is a GPS technology is being implemented for recording the attendanceand movement of employees all across the project sites. This technology provides betterconnect and engagement with employees.

Details of Foreign exchange earnings and outgo - Nil

13. CORPORATE SOCIAL RESPONSIBILITY(CSR):

In view of the absence of average net profits as computed pursuant to Section 198 ofthe Companies Act 2013 during the three immediately preceding financial years theCompany was not required to contribute any amount for CSR activities as required underSection 135 of the Companies Act 2013 read with the Companies (Corporate SocialResponsibility) Rules 2014.

However the Company has voluntarily contributed Rs. 2 crore to Welspun Foundation forHealth and Knowledge during the financial year 2018-19. Welspun Foundation for Health andKnowledge is a public charitable trust of Welspun Group which is committed mainly to areasof Education Empowerment Environment and Health under its CSR initiative.

The CSR Policy is hosted on the Company's website www.welspunenterprises.com and a weblink thereto is: http://www.welspunenterprises.com/userfiles/ file/CSR%20Policy%20-.pdf

Disclosures as required under Rule 9 of the Companies (Corporate Social ResponsibilityPolicy) Rules 2014 are annexed to this Report as Annexure 4.

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

The Company's Board comprises of a mix of executive and non-executive directors withconsiderable experience and expertise across a range of fields such as finance accountsgeneral management and business strategy. The details of the directors and their meetingsheld during the year have been given in the Corporate Governance Report which forms partof the Annual Report.

a) Changes in Directors and Key Managerial Personnel

Since the last report the following changes took place in the composition of the Boardof Directors:

Mr. Yogesh Agarwal Resigned w.e.f. June 20 2018 due to personal reasons
Mr. Balkrishan Goenka Appointed as Director not liable to retire by rotation w.e.f. August 14 2018.
Mr. Ram Gopal Sharma Resigned w.e.f. October 30 2018 on account of ill-health
Dr. Aruna Sharma Appointed as an additional independent director w.e.f. January 29 2019
Mr. Mohan Tandon Re-appointed as independent director for second term of 5 consecutive years w.e.f. April 1 2019

In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Sandeep Garg (DIN : 00036419) is retiring by rotation atthe forthcoming Annual General Meeting and being eligible has been recommended forre-appointment as a director liable to retire by rotation by the Board. Approval for hisappointment as the Managing Director is for the period upto July 15 2022.

Details about the directors being appointed / re-appointed are given in the Notice ofthe forthcoming Annual General Meeting being sent to the members along with the AnnualReport.

b) Declaration by Independent Director(s)

The independent directors on the Board of the Company have given declaration that theymeet the criteria of independence as provided under Section 149(6) of the Companies Act2013 at the time of their respective appointment and there is no change in thecircumstances as on the date of this report which may affect their status as anindependent director.

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

c) Formal Annual Evaluation

The Company followed the evaluation process with specific focus on the performancevis--vis the plans meeting of challenging situations performing of leadership rolewithin and effective functioning of the Board etc. which was in line with the SEBIGuidance Note on Board Evaluation dated January 5 2017. The evaluation process invitedthrough IT enabled platform 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 2018-19the 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) Familiarization program for Independent Directors

The familiarization program aims to provide the Independent Directors with the scenarioof the infrastructure industry the socio-economic environment in which the Companyoperates the business model the operational and financial performance of the Companysignificant development so as to enable them to take well-informed decisions in timelymanner. The familiarization program also seeks to update the directors on their rolesresponsibilities rights and duties under the Act and other statutes.

The policy on Company's familiarization program for independent directors is hosted onthe Company's website www. welspunenterprises.com and a web link thereto is:http://welspunenterprises.com/userfiles/ file/Familiarisation%20program%20WEL(LODR)-03_05_2019.pdf

e) Policy on directors' appointment remuneration and other details

The salient features of the Company's

"Nomination and Remuneration Policy" on directors' appointment remunerationand other matters provided in Section 178(3) of the Companies Act 2013 has been disclosedin Point No. "V. NOMINATION AND REMUNERATION COMMITTEE" of the CorporateGovernance Report which forms part of the Annual Report.

f) Number of meetings of the Board

The Board met 6 times during the financial year 2018-19 the details of which are givenin the Corporate Governance Report forming part of the Annual Report. The maximum intervalbetween any two meetings did not exceed 120 days as prescribed in the Companies Act 2013and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

g) Committee of the Board of Directors

Information on the Audit Committee the Nomination and Remuneration Committee theStakeholders' Relationship Share Transfer and Investor Grievance Committee CorporateSocial Responsibility Committee and meetings of those Committees held during the year isgiven in the Corporate Governance Report.

15. VIGIL MECHANISM:

The Company has adopted Whistle Blower Policy and Vigil Mechanism for its directors andemployees in terms of provisions of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and the Companies Act 2013 and no personnel have beendenied access to the Audit Committee.

Protected Disclosures and other communication can be made in writing by an emailaddressed to the Chairman of the Audit Committee.

The policy on Whistle Blower Policy and Vigil

Mechanism is disclosed on the Company's website and a web link thereto is as under:http://www.welspunenterprises.com/userfiles/ file/Whistle%20Blower%20Policy%20and%20Vigil%20Mechanism.pdf

16. LOANS GUARANTEES AND INVESTMENTS:

Pursuant to Section 186(11)(a) of the Companies

Act 2013 the Company being engaged in the business of providing infrastructuralfacilities is exempt from the requirement of providing the particulars of loans madeguarantees given or securities provided or any investment made.

17. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All related party transactions that were entered into by the Company during the yearunder report were on an arm's length basis and were in the ordinary course of business toserve the mutual needs and the mutual interest.

The approval of the shareholders was obtained on 18th March 2019 by way ofan ordinary resolution proposed vide postal ballot for entering into EngineeringProcurement and Construction ("EPC) Contract between SPVs and the Company upto Rs.5000 crore for each project and upto Rs. 15000 crore for all projects during anyfinancial year for next 5 years. The EPC Contract would be in the ordinary course ofbusiness and on arm's length basis with related party/ies within the meaning of theCompanies Act 2013 and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.

In view of the changes in the business scenario the Company could have opportunity toget EPC Contract exceeding the aforesaid threshold and hence it was now proposed toenhance the value of EPC Contract between SPVs and the

Company for each project from Rs. 5000 crore to Rs. 10000 crore and upto Rs. 30000crore for all projects upto 5th Anniversary of the date of passing of theshareholders resolution approving this proposal or Annual General Meeting to be held incalendar year 2024 whichever is later. The Board of Directors at its meeting held onApril 16 2019 recommended this proposal for approval of the shareholders at theforthcoming Annual

General Meeting.

For the details of the related party transactions please refer Note No. 46 of Notes toAccounts to the standalone financial statements.

The Audit Committee has given its omnibus approval for the transactions which could beenvisaged and the same is valid for one financial year.

The Company's policy on dealing with Related Party Transactions as required underRegulation 23 of LODR is disclosed on the Company's website www.welspunenterprises.com anda web link thereto is as under: http://www.welspunenterprises.com/userfiles/file/Related%20Party%20Transaction%20Policy.pdf

Disclosures as required under the Companies Act 2013 are given in Form AOC-2 annexedas Annexure - 5 to this Report.

18. MANAGERIAL REMUNERATION:

a) Details of the ratio of the remuneration of each director to the median employee'sremuneration and other details as required pursuant to Section 197(12) of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are as under:

i. The ratio of remuneration of Mr. Balkrishan Goenka Chairman (Executive) andMr. Sandeep Garg Managing Director to the median remuneration of the employees of theCompany was 1:146 and 1:163 (including the value of ESOPs and remuneration from associatecompany) respectively.

ii. The percentage increase in remuneration of each director Chief Financial OfficerCompany Secretary or Manager if any in the financial year : Managing Director - 6%(excluding ESOP) Chief Financial Officer - 7% and Company Secretary - 21%.

iii. The percentage increase in the median remuneration of employees in the financialyear 2018-19 was 200%. iv. 437 permanent employees were on the rolls of the Company as onMarch 31 2019.

v. Market Capitalization of the Company as on March 31 2019 was Rs. 157634 lakhs andas on March 31 2018 it was Rs. 208538 lakhs.

vi. The share price increased to Rs. 106.45/- (NSE closing Price) as on March 31 2019in comparison to Rs. 30 (the rate at which the Company came out with the public issue inthe year 2004).

vii. Average percentile increase in the salaries of employees (other than themanagerial personnel) and of the managerial personnel in the FY 2018-19 was ~9.5% and30% respectively. Higher percentile rise in managerial remuneration viz-a-viz percentilerise in remuneration to the other employees was to appropriately compensate themanagerial personnel for handling key managerial responsibilities in increasinglycompetitive and challenging business environment.

viii. The Profit before Tax (before exceptional items) of the Company for FY 2018-19was Rs. 21217/- lakhs whereas Managing Director's the Chief Financial Officer's and theCompany Secretary's remuneration were Rs. 360 lakhs (includes Rs. 120 lakhs paid fromassociate company but excluding ESOP); Rs. 82.03 lakhs and Rs. 14.92 lakhs respectively.

ix. We affirm that the remuneration is as per the remuneration policy of the Company.

b) Details of the top ten employees in terms of remuneration drawn and name of everyemployee of the Company as required pursuant to Rule 5(2) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 are as under:

Name Designation Age (yrs) DOJ Current CTC (Rs. in lakhs) Qualification and experience Previous Company Nature of Employment (whether contractual or permanent) % Of Equity Shares held in the Company Relative of any Director/ Manager of the company DOL/ Transfer
Balkrishan Goenka Executive Chairman 52 29.05.2015 750# B.Com 34 years Not applicable Contractual Negligible No -
Sandeep Garg MD 58 16.07.2012 833.16% BE 37 years IL&FS Contractual 1.08 No -
Akhil Jindal Director* 49 01.07.2015 306.03 BE & MBA 25 years S Kumar Group Permanent 0.10 No -
Deepak Chauhan Director* 47 01.09.2017 216.53 B Com/ LLB/ LLM 23 years GVK Power & Infrastructure Ltd Permanent - No -
Jitendra Jain President 48 01.10.2018 185.00 PGD - Finance 23 years GMR Permanent - No -
Banwari Lal Biyani Director* 59 01.08.2014 176.10 AICWA 40 years Ispat Industrial Ltd. Permanent Negligible No -
Asim Chakraborty Director* 58 01.07.2016 160.87 BE 37 years Gherzi Eastern Ltd Permanent 0.01 No -
Yogen Lal Director* 51 12.06.2018 135.00 BE 26 years D.Thakkar Const. Pvt. Ltd. Permanent - No -
Asim Tewari President 50 07.01.2019 120.00 BE/MPM 26 Years Bharat Roads Network Limited Permanent - No -
Girirajan Rajesh Kumar Senior Vice President 53 26.12.2018 118.00 BE 28 years Tarkett Flooring India Pvt. Ltd. Permanent - No -

* Not on the Board of the Company

# In addition the Company has provided for commission

@ 2% of consolidated profits in the financial statement of the Company

% Includes Rs. 120 lakhs paid from associate company

Particulars of the remuneration payable to the executive directors of the Company forthe year under report is as under:

(Rs. in lakhs)

Particulars

Mr. Balkrishan Goenka-

Mr. Sandeep Garg – Managing Director

Chairman (Executive)

Salary & Allowance

750.00

360.00#

Perquisites

Nil

473.16

Commission

2%*

Nil

Details of fixed component

Nil

Nil

Service Contract/Term of appointment

5 years from May 29 2015 to May 28 2020

5 years from July 16 2017 to July 15 2022

Notice Period (as per Company policy)

3 months

3 months

Severance Fees

Nil

Nil

Stock Options

Nil

WEL ESOP – 2017:

No. of ESOPs Date of Grant Date of Vesting Date of Exercise
3000000 10.10.2017 At the rate of 20% of the total ESOPs granted at each anniversary from 1st to 4th anniversary of the date of grant in quantum of 20% of the total ESOPs granted and the vesting of remaining 20% of the total ESOPs granted shall happen on July 14 2022. Upto 3rd anniversary from the date of Vesting of ESOPs

* The Company has provided for commission in the financial statement of the Company. #Includes Rs. 120 lakhs paid from associate company

c) No remuneration or perquisite was paid to and no service contract was entered intowith the non-executive directors (including independent directors) of the Company exceptfor the payment of the following sitting fees for attending meetings of Board / Committeesof the Board/general meetings for the F.Y. 2018-19.

Sr. No. Name of the Director Sitting Fees (Rs.)
1. Mr. Mohan Tandon 550000
2. Mr. Ram Gopal Sharma* 111000
3. Ms. Mala Todarwal 265000
4. Mr. Yogesh Agarwal# 45000
5. Mr. Dhruv Kaji 445000
6. Dr. Aruna Sharma@ 85000

* Resigned w.e.f. October 30 2018

# Resigned w.e.f. June 20 2018

@ Appointed w.e.f. January 29 2019

The above mentioned sitting fees paid to the non-executive directors was in line withthe Nomination and Remuneration Policy of the Company. The sitting fees paid to thedirectors was within the limits prescribed under the Companies Act 2013 for payment ofsitting fees and therefore prior approval of the members as stipulated under Regulation17(6) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 wasnot required.

d) Mr. Sandeep Garg Managing Director of the Company was neither in receipt of anycommission from the Company nor remuneration or commission from the subsidiary companies.

e) Mr. Balkrishan Goenka Chairman (Executive) of the Company who was in receipt ofremuneration of Rs. 750 lakhs from the Company and was eligible for commission of 2% ofthe annual profit (excluding profit/loss from capital receipts and assets disposition) ofthe Company on consolidated basis was not in receipt of any remuneration or commissionfrom the subsidiary companies.

f) Apart from Sitting Fees for meetings there is no pecuniary transaction entered intoby the non-executive directors with the Company.

19. SHAREHOLDING OF THE DIRECTORS OF THE COMPANY AS ON MARCH 31 2019:

Refer Corporate Governance Report for detail of shareholding of directors.

Except as mentioned in the Corporate Governance Report none of the other Directorshold any shares in the Company.

20.CORPORATE GOVERNANCE CERTIFICATE:

The Compliance certificate obtained from M/s. Mihen Halani & Associates CompanySecretaries regarding compliance of conditions of corporate governance as stipulatedunder Part E of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is annexed with this Report.

21. RISK MANAGEMENT POLICY:

With its fast and continuous expansion in the volume of businesses in the highlycompetitive & challenging scenario the Company is exposed to plethora of risks whichmay adversely impact growth and profitability. The Company recognizes that risk managementis of concern to all levels of the businesses and requires a structured risk managementpolicy and process involving all personnel. With this objective the Company hadformulated structured Risk Management Policy thereby to effectively address such risksnamely strategic business regulatory and operational risks especially BOT projects.

The Policy envisages identification of risks together with the impact that these mayhave on the business objectives. It also provides a mechanism for categorization of risksinto Low Medium and High according to the severity of risks. The risks identifiedarereviewed by a committee of senior executives and the Managing Director of the Company andappropriate actions for mitigation of risks are advised; the risk profile is updated onthe 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.

22. MISCELLANEOUS:

• During the year under Report there was no change in the general nature ofbusiness of the Company.

No material change or commitment has occurred which would have affected the financialposition of the Company between the end of the financial year to which the financialstatements relate and the date of the report.

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

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

Further during the year under review no case of sexual harassment was reported to theInternal Complaints Committee formed under the provisions of the Sexual Harassment ofWomen at workplace (Prevention Prohibition and Redressal) Act 2013.

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 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

The Board of Directors affirms that the Company has complied with the applicableSecretarial Standards issued by the Institute of Companies Secretaries of India.

23. DIRECTORS' RESPONSIBILITY STATEMENT:

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

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

b. the directors selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit 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 have laid down internal financial controls tobe followed by the Company and such internal financial controls are adequate and areoperating effectively; and

f. the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

24. ACKNOWLEDGEMENTS:

The 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 partner inthe Company's progress and achievement of its objectives.

For and on behalf of the Board of Directors
Balkrishan Goenka
Place: Mumbai Chairman
Date: July 11 2019 DIN: 00270175


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