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Welspun Corp Ltd

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BSE Code : 532144 | NSE Symbol : WELCORP | ISIN : INE191B01025 | Industry : Steel |


Directors Reports

DIRECTORS' REPORT

To,

The Members,

Welspun Corp Limited

Your Directors present their 29th Report together with the audited financial statements of your Company for the financial year ended March 31,2024.

1. FINANCIAL RESULTS

(INR in Crores, except EPS)
Particulars

Standalone

Consolidated

For the year ended

For the year ended

31.03.2024 31.03.2023* 31.03.2024 31.03.2023
Revenue from operations 9,081.78 7,731.35 17,339.60 9,758.10
Other income 476.51 262.27 242.46 319.98
Total income 9558.29 7993.62 17,582.06 10,078.08
Profit before finance cost, depreciation & tax 965.64 702.61 1,803.89 804.55
Less : Finance costs 205.39 193.84 304.38 243.16
Profit before depreciation & tax 760.25 508.77 1,499.51 561.39
Less: Depreciation and amortization expense 164.75 137.74 347.87 302.97
Add: Share of profit/ (loss) of joint venture and associates - - 156.67 75.21
Add: Profit on sale of shares of associate - - 105.17 -
Profit before tax 595.50 371.03 1,413.48 333.63
Less : Tax expense
Current Tax 69.68 34.04 139.20 170.58
Deferred Tax 49.47 59.80 138.28 (36.12)
Profit for the year 476.35 277.19 1,136.00 199.17
Net profit/ (loss) attributable to:
Owners - - 1,110.40 206.69
Non-controlling interest - - 25.60 (7.52)
Earnings per share
(a) Basic (in INR) 18.21 10.61 42.45 7.91
(b) Diluted (in INR) 18.15 10.58 42.32 7.89
Appropriations to Reserves:
Opening balance in Retained Earnings 2,088.96 1,955.99 2,901.12 2,825.52
Addition pursuant to business combination - (13.88) - -
Profit for the year 476.35 277.19 1,110.40 206.69
Re-measurements of post-employment benefit obligations, net of tax (1.34) 0.13 (0.98) (0.06)
Share of OCI of Joint ventures and associates - - (0.32) (0.44)
Dividend on equity shares (130.76) (130.47) (130.76) (130.47)
Share issue expenses during the year - - - (0.12)
Buyback of NCI - - (129.08) -
Transfer to capital redemption reserve (351.51) - (351.51) -
Closing balance in Retained Earnings 2,081.70 2,088.96 3,398.87 2,901.12

* Restated

Refer note no. 55 of Standalone Financial Statement.

2. HIGHLIGHTS FOR THE YEAR & OUTLOOK.

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

Product

Standalone (in MT)

Consolidated (in MT)

FY 2023-24 FY 2022-23 FY 2023-24 FY 2022-23
MS Pipes 6,23,783 5,72,514 9,79,865 6,58,988
SS Pipes - - 4,785 4,059
DI Pipes - - 2,05,833 34,383
SS Bars - - 15,903 6,869
Billet 1,82,372 1,36,222 1,82,372 1,36,222
TMT Bars - - 1,21,757 17,717
Sponge Iron 8,555 33,157 8,555 33,157
Pig Iron 2,31,807 1,58,052 2,31,807 1,58,052
Hot Metal 2,34,805 53,899 2,34,805 53,899
Storage Tanks - - 14,172 250

(b) The year under Report was a successful year for your Company as it executed upon its Business Growth & Diversification Strategy. The traditional business of Line Pipes demonstrated a strong performance while significant ramp up continued in the Ductile Iron Pipes, TMT Bars and Stainless Steel businesses. Sintex in it very first year of operation under Welspun Corp has seen satisfactory improvement in its operational and financial performances.

(c) Ductile Iron Pipe in Anjar

As mentioned in the previous report, the Company's wholly owned subsidiaries after commissioning in FY2022- 23, the state-of-the-art Blast Furnace, Sinter plant, Coke Oven, TMT Bars and DI Pipes facilities contineud to ramp up during the year under report.

The initial capacity of Ductile Iron Pipe plant was envisaged at 400 KMT per annum. However, considering the higher through put of Hot Metal, the Company decided to take the capacity to 600 KMT per annum with a capex of Rs 300 Crores. The facilty has seen faster ramp up.

Faster stabilization and ramp up of the DI Pipe facility is a testimony of best in class equipment and technology, world class processes and quality standards. The faciltiy has already got of the approvals from the key customers and order book remains strong.

(d) Sintex

The water storage tanks (WST) business of Sintex has been ramping up gradually. The company has taken many initiatives to re-energies its entire distribution channels by means of various initiatives and engagement programmes. WST sales volume rose by 11% in FY2023- 24 over the previous year. Sintex signed an exclusive contract with Rollepaal for supply of machinery and technology for manufacturing of OPVC Pipes.

(e) Line Pipes in India and USA

The line pipe business has witnessed significant volume growth both in India and the USA backed by robust demand and world class execution capabilities of the Company. The total sales volume in India and USA rose 49% in FY 2023-24 over the previous year. the companys associate company EPIC in Saudi Arabia also has seen significant improvement in the performance backed by robust demand both from Oil & Gas and water segments. EPIC has strong order book visibility of more than 2 years.

(f) TMT Rebar facilities in Anjar

The TMT rebar segment has seen a steady ramp up in FY 2023-24. the company has significantly expanded its market presence, now covering 94% of districts in Gujarat and partnering with 289 dealers.

(g) Stainless Steel Bars and Pipes & Tubes

Welspun Specialty Solutions Limited, our subsidiary Company has completed its turnaround in the year under report as the Subsidiary company achieved a milestone by marking the first year of profitability. Geography and territory expansion continues along with customer acquisitions- resulting in addition 45 new customers. The subsidiary Company has developed and delivered many high quality grades for niche and critical applications during the year.

(h) Scheme of Arrangement between Welspun Metallics Limited ("the Transferor Company") and Welspun Corp Limited ("the Tranferee Company") and their respective shareholders ("the Scheme").

As mentioned in the previous annual report, about Scheme of Arrangement between Welspun Metallics Limited (a wholly - owned Subsidiary) and Welspun Corp Limited the Company is pleased to inform that, the Ahmedabad Bench of National Company Law Tribunal ("NCLT") has vide order pronounced on October 27, 2023 ("the Order") sanctioned the Scheme of Amalgamation of Welspun Metallics Limited ('the Transferor Company') with Welspun Corp Limited ('the Transferee Company') and their respective shareholders ("the Scheme"). In terms of the Scheme, the captioned Scheme has become effective from the date of passing of the Order by the NCLT i.e., October 27, 2023 with the Appointed Date of April 1,2022.

(i) Scheme of Arrangement between Mahatva Plastic Products and Building Materials Private Limited ("the Transferor Company") and Sintex-BAPL Limited ("the Transferee Company") and their respective shareholders ("the Scheme").

As mentioned in the previous annual report, about Scheme of Amalgamation of Mahatva Plastic Products and Building Materials Private Limited, (a wholly - owned Subsidiary) with Sintex-BAPL Limited (another wholly owned subsidiary) and their respective shareholders, the board is pleased to inform that, the Ahmedabad Bench of National Company Law Tribunal ("NCLT") vide the order pronounced on May 16 , 2024 ("the Order") sanctioned the Scheme of Amalgamation of Mahatva Plastic Products and Building Materials Private Limited with Sintex-BAPL Limited and their respective shareholders. In terms of the Scheme, the captioned Scheme has become effective from the date of passing of the Order by the NCLT i.e., May 16, 2024 with the Appointed Date of 29th March 2023.

(j) ESG Initiatives

In continuation to the ESG initiatives undertaken by your Company during the year, your Company has published its second Sustainability Report for FY 2022-23, comprehensively reporting its sustainability performance across the environment, social, and governance domains, highlighting the progress made by the Company over its sustainability goals and its alignment with global frameworks like the GRI, UN SDGs, and SASB standards.

In addition, your Company also published its Tax Transparency Report, ensuring compliance with tax laws and demonstrating to uphold the highest standards of tax transparency.

Your Company was ranked in the Top 4 Percentile in Global Steel Industry in S&P Global's DJSI Corporate Sustainability Assessment with a score of 68.

(k) Outlook

The business outlook for your company remains strong for all its buisness. The key focus areas of the Company remain DI Pipes and Sintex. The strategic focus of the Company remains on water infrastructure.

Continuous strong focus of the government on improving water infrastructure in the Country is expected to continue helping demand for DI Pipes. Schemes of the GOI viz. "Jal Jeevan Mission", "Nal Se Jal" and "Amrut" for providing safe and sufficient drinking water to rural and urban households and "Swachh Bharat Mission, Gramin" for solid and waste management across the villages in India will be supportive for DI Pipes demand in India. The Company has strong order book for DI Pipes covering around 9-10 months.

Water scarcity is putting more emphasis on the water storage which shall be helpful for WST business of Sintex. For the existing water storage business, the focus has been on reviving the channel by engaging with retailers and influencers and also reinvigorating the brand with improved brand visibility strategy. Sintex has also announced its foray into plastic pipes business on a pan India basis. This will provide huge growth opportunity to Sintex going forward, as the plastic pipes market is likely to reach a size of Rs 1,30,000 Crores in 2030. The focus will be on the building and infrastructure segments which are likely to grow at a faster rate.

For the line pipes business in India, outlook remains strong for both Oil & Gas and water segments. In case of Oil 7 Gas, demand has recovered with further expansion of gas pipeline grid across the country. Additional 10,000 km of pipelines are likely to be installed in the next 2- 3 years. Pipelines for City Gas Distribution has been progressing and in at least 50% of geographical areas yet to be installed. Moreover, the Central Government has recently sanctioned the scheme for development of pipeline infrastructure for the injection of compressed biogas (CBG) into city gas distribution (CGD). Export opportunities particularly for LSAW Pipes remain strong, while hydrogen pipelines are also picking up indicating promising future.

On the water side, demand for irrigation pipelines has been growing steadily and interlinking of rivers provides huge opportunities going forward. States like Gujarat, MR Rajasthan, Tamil Nadu and Karnataka are exponentially increasing the water pipeline network for irrigation, industrialization and urbanization purposes. The "Jal Jeevan Mission" has been supporting the strong demand.

US is likely to defend its position of being the largest LNG exporter in the world. Very active drilling activity in the Permian Basin continues, leading to strong demand for new gas pipelines for bringing the Rermian gas to the Gulf Coast. At least 2-3 new pipelines in the Permian region and at least one of them is likely to get concluded in CY2024. With our impeccable track record of executing large projects, we are confident of booking new orders to ensure business continuity in CY2024 itself.

In the Kingdom of Saudi Arabia, both Oil & Gas and Water demand is exponentially increasing and our Associate Company, ERIC now commands dominating presence in this market. Saudi Aramco is expanding its oil production capacity from 12 mbpd to 13 mbpd by 2027 and have budgetary allocation of spending almost US$10 billion per year. Consequently, multiple projects for Oil & Gas are being announced and awarded in the recent past. Further SWCC and SWRC are exponentially increasing their capacity for transporting desalinated water through pipelines. With massive urbanization and industrialization currently happening in KSA under the Vision 2030 umbrella, the demand for the pipelines will continue to grow for next 5- 7 years.

Steady ramp up has been there in our TMT plant. The Government of India is investing heavily in infrastructure projects, such as roads, railways, and power plants. This is leading to increased demand for TMT Rebars. Additionally the construction sector (individual housing) and urbanization are also key drivers for demand in the TMT Rebars sector. Your Company has secured multiple approvals and accreditations is selling the products under "Welspun Shield" brand both in projects and B2C segments.

The Stainless Steel Bars and Pipes segment, after the complete turnaround, will continue to focus on new product development and introduction. More value added grades and further geography and territory expansion envisaged during FY 2024-25. Welspun Specialty is gradually firming up position based on its strategy and the strong foundation created during FY 2023-24. The Company will continue to focus on strategic cooperation and securing approvals and accreditations.

3. RESERVES, DIVIDEND & DIVIDEND POLICY.

The Board is pleased to recommend a dividend @ 100% for the year ended March 31,2024 i.e. INR 5 per equity share of INR 5/- each fully paid-up out of the net profits for the year.

Further the Board recommends a preference dividend at the stipulated rate of 6% per share (i.e. INR 0.60) on the 35,15,1 1,571, Coupon 6% Cumulative Redeemable Preference Shares of the face value of INR 10/- each fully paid up aggregating to INR 3,51,51,15,710/- from April 1, 2023 to September 18, 2023 i.e date of redemption.

In respect of the dividend declared for the previous financial years on Equity Shares, INR 12,52,239.13/- remained unclaimed as on March 31,2024.

The equity dividend outgo for the FY 2023-24 would absorb a sum of INR 130.83 Crores as against INR 130.76 Crores comprising the dividend of INR 5 per Ordinary (Equity) Share of the face value of INR 5/- each for the previous year. Dividend will be payable subject to approval of members at the ensuing Annual General Meeting and deduction of tax at source to those Shareholders whose names appear in the Register of Members as on the Record Date.

During the year under Report, the Company has transferred dividend of INR 1,121,936 remaining unclaimed for the financial year 2015-16 to the Investor Education and Protection Fund. Detail of unclaimed dividend is available on the website of the Company at the web-link: "http://www.welspuncorp.com" under the tab "Investors -> Unclaimed Dividend" https://www.welspuncorp.com/unclaimed-dividend. php

The Board does not propose to transfer any amount to General Reserves.

In terms of the Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors approved and adopted Dividend Distribution Policy of the Company setting out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to the shareholders and/ or retaining the profits earned by the Company. The Policy is annexed to this Report as Annexure - 1 and is also available on the website of the Company at the web- link: "http://www.welspuncorp.com" under the tab "Investors -> Company Policies"

https://www.welspuncorp.com/uploads/investor_ data/investorreport 116.pdf

4. INTERNAL CONTROLS & INTERNAL AUDIT

Your Company has adequate internal control system, which is commensurate with the size, scale and complexity of its operations. Your Company has a process in place to continuously monitor existing controls and identify gaps and implement new and/or improved controls wherever the effect of such gaps would have a material impact on your Company's operation. The controls were tested during the year under Report and no reportable material weaknesses either in their design or operations were observed. In other observations, appropriate corrective actions were taken as advised by the Audit Committee.

At the beginning of each financial year, a risk-based annual audit plan is rolled out after it is approved by the Audit Committee and the Board. The audit plan aims to evaluate the efficacy and adequacy of the internal control system(s) and compliance(s) thereof, robustness of internal processes, policies and accounting procedures, compliance with laws and regulations.

The Internal Audit is carried by independent external audit firm consisting of qualified accountants, domain & industry experts, fraud risk and information technology cyber security specialists.

Based on the reports of internal auditor, corrective actions are taken, wherever required. Significant audit observations and corrective actions thereon are presented by the Audit Committee to the Board.

The Internal Auditor presents their reports to the Audit Committee.

5. SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES AND THEIR PERFORMANCE

Highlights & Significant Subsidiaries, Joint Ventures/ Associates are as under:

Welspun Pipes Inc., Welspun Tubular LLC and Welspun Global Trade LLC, are wholly owned subsidiaries in the USA. Welspun Pipes Inc. which is holding investment in Welspun Tubular LLC and Welspun Global Trade LLC has reported a consolidated Revenue of INR 6,223 Crores in the current year as compared to INR 1532 Crores in the previous year, registering an increase of 306 %. Its consolidated profit after tax is INR 499 Crores as compared to Loss of INR 52 Crores in the previous year.

Welspun DI Pipes Limited, a wholly owned subsidiary engaged in production of DI Pipes has reported a Revenue of INR 1514 Crores in the current year as compared to INR 266 Crores in the previous year, an increase of 470 %. Its profit after tax is INR 102 Crores as compared to loss of INR 23 Crores in the previous year.

• Anjar TMT Steel Private Limited, a wholly owned subsidiary engaged in production of Billets and TMT Bars has reported a Revenue of INR 648 Crores in the current year as compared to INR 139 Crores in the previous year. an increase of 366% the previous year. Its loss after tax is INR 25 Crores as compared to loss after tax of INR 13 Crores.

East Pipes Integrated Company for Industry, an associate (31.50% shareholding) of the Company engaged in business of manufacturing and coating of HSAW pipes has reported a Revenue of INR 3,407 Crores in the current year as compared to INR 3,083 Crores in the previous year, an increase of 10%. Its profit after tax is INR 591 Crores as compared to profit of INR 214 Crores in the previous year. EPIC is certified to produce pipes of grades up to API 5L X-80, which are suitable for midstream water and oil and gas transmission with the most suitable high-quality pipe solutions. EPIC carefully manages its costs and overheads in order to remain highly competitive in bidding for new orders, particularly from government and government-owned entities such as Water Conversion Corporation (SWCC) and Saudi Arabian Oil Company ("Saudi Aramco").

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

Financial statements of the subsidiaries and joint venture are hosted on the website at the web-link: "http://www.welspuncorp.com" under the tab "Investors -> Subsidiary Accounts". https://www.welspuncorp.com/subsidiary- accounts.php

6. DEPOSITS

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

7. DETAILS OF UTILIZATION OF FUNDS RAISED THROUGH PREFERENTIAL ALLOTMENT OR QUALIFIED INSTITUTIONS PLACEMENT AS SPECIFIED UNDER REGULATION 32 (7A)

During the financial year under review, no funds have been raised by the Company through preferential allotment or qualified institutions placement, and no such funds raised during the preceding years were lying unutilized as at the beginning of the financial year under review.

8. AUDITORS

i) Statutory Auditors:

The second term of your Company's Auditors M/s Price Waterhouse Chartered Accountant LLP, Chartered Accountants (ICAI Firm Registration No. 012754N/ N500016), who were appointed as Statutory Auditors of the Company to hold the office from the conclusion of 24th Annual General Meeting held for FY 2018-19 until the conclusion of 29th Annual General Meeting to be held for FY 2023-24, is expiring at the forthcoming 29th Annual General Meeting for FY 2023-24.

Total fees for all services paid by the Company and its subsidiaries, on a consolidated basis, to the statutory auditor and all entities in the network firm/network entity of which the statutory auditor is a part during the financial year under Report is INR 3.68 Crores. Pursuant to Section 139 of the Companies Act, 2013 and at the recommendation of the Audit Committee ,the Board has also recommended to appoint M/s B S R & Co. LLP (Firm Registration No.101248W/W-100022), Chartered Accountants as the statutory auditor for the first term of appointment with effect from the conclusion of the ensuing 29th Annual General Meeting for FY 2023-24 till the conclusion of the 34th Annual General Meeting for FY 2028-29 subject to approval of the members at the forthcoming Annual General Meeting.

The Company received peer review certificate and eligibility cum consent letter from M/s B S R & Co. LLP (Firm Registration No.01248W/W-100022, Chartered Accountants confirming their eligibility when appointed as the statutory auditors.

ii) Cost Auditors:

The Board had appointed M/s. Kiran J. Mehta & Co, Cost Accountants (Firm Registration No. 000025), as Cost Auditor for conducting the audit of cost records of the Company for the FY 2023-24.

The Board of Directors at the recommendation of the Audit Committee, appointed M/s. Kiran J. Mehta & Co, Cost Accountants (Firm Registration No. 000025), as the Cost Auditors of the Company for the Financial Year 2024-25 under section 148 of the Companies Act, 2013. M/s. Kiran J. Mehta & Co, Cost Accountants have confirmed that their appointment is within the limits of section 141(3)(g) of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under section 141(3) and proviso to section 148(3) read with section 141(4) of the Companies Act, 2013.

As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly the members are requested to approve their remuneration by passing an ordinary resolution pursuant to Rule 14 of the Companies (Audit and Auditors) Rules, 2015 as included in the Notice convening 29th Annual General Meeting.

iii) Secretarial Auditors:

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. M. Siroya and Company, Practicing Company Secretary (Certificate of Practice Number: 4157) to undertake the Secretarial Audit of the Company for the FY 2023-24.

The Board of Directors have appointed M/s. M. Siroya and Company, Practicing Company Secretary, as the Secretarial Auditor of your Company for the Financial Year 2024-25.

iv) Internal Auditors:

Pursuant to the provisions of section 138 of the Companies Act, 2013 and the Companies (Account) Rules, 2014, the Company has appointed M/s. Deloitte Touche Tohmatsu India LLP as the Internal Auditors for the pipes and steel division of the Company. Earlier M/s. KPMG Assurance and Consulting Services LLP, Chartered Accountants were the Internal Auditors for the steel division of the Company, who tenure is expired on the March 31,2024.

9. AUDITORS' REPORT

(a) Statutory Auditors' Report:

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

(b) Cost Audit Report :

As required under the Companies (Accounts) Rules, 2014, the cost accounting records, as specified by the Central Government under Section 148(1) of the Companies Act, 2013, were made and maintained by the Company.

The Company had appointed M/s. Kiran J. Mehta & Co., Cost Accountants as the Cost Auditors of the Company for auditing cost accounting records for the financial year 2024-25. The Cost Audit for the FY 2022-23 was e-filed on August 25, 2023.

The Cost Audit for the FY 2023-24 is under progress and the cost audit report will be e-filed to the 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 is annexed with the Report as Annexure 3. The Report, read with the annexure thereto, contain following statement of facts, which are explained/commented by the Board as under:-

• Structured Digital Database ("SDD") software was in place, however, there were delays in making certain entries of UPSIs shared during the period. The Company is advised to strengthen the mechanism for regularly and timely updating all the requisite entries in the SDD on real time basis. The Board noted the above observation and advised the executive management to strengthen the process by organizing more awareness sessions.

• Calcutta Stock Exchange (CSE) had frozen demat accounts of Mr B.K. Goenka (NonExecutive Chairman and Promoter), Mr Rajesh Mandawewala (Non-Executive Director & Promoter), Mr Vipul Mathur (MD & CEO), Mr Anjani Agrawal (Independent Director) and Ms Dipali Sheth (Independent Director), due to suspension of listing. Subsequently, the aforesaid Demat accounts have been unfrozen vide CSE letter dated February 16, 2024 and the Company has applied for revocation of suspension vide its application dated March 26, 2024 post which application shall be re-submitted for delisting from the CSE.

The Company was listed on Calcutta Stock Exchanges ("CSE") in the year 1999. The Company had obtained shareholders approval and applied for delisting of equity shares from CSE in the year 1999-2000. Despite several follow up with CSE for delisting no action was taken by CSE till 2003 and thereafter the Company came to know that CSE did not have committee for delisting and hence application remained pending. The Company did not do further follow up thereafter and assuming that the company application for delisting would be processed after formation of delisting committee by CSE. Now suddenly in December 2023, CSE has frozen demat accounts of some of the directors and informed the company about suspension of the company listing. The company officials visited CSE in the month of January 2024 to explain and resolve the matter, however this was unsuccessful. The Demat Accounts were unfrozen in February 2024 after paying under protest the outstanding listing fees of INR ~22 Lacs to the CSE for the financial years 1999 to 2023. Thereafter the company applied for revocation of suspension of equity shares. The said application was subsequently approved by CSE on May 22, 2024 and the suspension was revoked w.e.f. May 29, 2024. The Company now proposes to apply for delisting from CSE as the company is already listed at NSE & BSE and hence no impact on shareholders.

The Company has undertaken an audit for the Financial Year 2023-24 for all applicable compliances as per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Circulars/Guidelines issued thereunder.

The Annual Secretarial Compliance Certificate duly signed by M/s. M. Siroya and Company, Company Secretaries has been submitted to the Stock Exchanges and is annexed at Annexure 4 to this Board's Report. For explanation and comments of the Board on the statement of facts with respect to delay in making entry in SDD software as reported in the Annual Secretarial Compliance Certificate, please refer to the para above.

Welspun Pipes INC is a Material Unlisted foreign Subsidiary of the Company as on March 31,2024. However being a foreign subsidiary the requirement under Regulation 24A of the Listing Regulations regarding the Secretarial Audit of Material Unlisted Indian Subsidiary is not applicable to the Company for the Financial Year 2023-24. There were no other material unlisted subsidiaries.

(d) Reporting of Frauds by the Auditors

During the year under review, the Statutory Auditors, the Cost Auditors, the Internal Auditors and the Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under section 143(12) of the Companies Act, 2013.

10. SHARE CAPITAL & LISTING

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

B) The Company had granted stock options during the financial year 2023-24. Disclosure as required under Regulation 14 of the SEBI (Share Based Employee Benefits & Sweat Equity) Regulations, 2021, Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 and Part-F of Schedule I to the SEBI (Share Based Employee Benefits & Sweat Equity) Regulations, 2021 are as under:

(I) A description of each ESOS that existed at any time during the year, including the general terms and condition! of each ESOS, including -

(a) Name of the ESOP Plan Welspun Employee Stock Option Plan Welspun Employee Stock Option Plan Welspun Employee Stock Option Plan Welspun Corp Employee Benefit Scheme - 2022
(b) Date of shareholders' approval

September 30, 2005

July 29, 2022
(c) Total number of options approved under ESOS 5,614,752 1,30,00,000

 

(d) Vesting requirements 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. 25% each year on and from the end of one year from the date of grant.
(e) Exercise price or pricing formula INR 100/- The exercise price shall be decided by the Nomination & Remuneration Committee) subject to minimum of face value i.e. INR 5 per Share
(f) Maximum term of options granted 3 years from vesting date 3 years from vesting date
(g) Method of Settlement Equity Equity
(h) Source of shares (primary, secondary or combination) Primary Either by way of Secondary acquisition from the market and/or direct allotment from the Company
(i) Variation in terms of options No modifications were made to the schemes during the year. The scheme is in compliance with the regulations. No modifications were made to the schemes during the year. The scheme is in compliance with the regulations.

(II) Method used to account for ESOS - Intrinsic or fair value.

Welspun Employee Stock Option Plan Welspun Corp Employee Benefit
The Company has recognized compensation cost using fair value method of accounting. Scheme - 2022
The Company has recognized compensation cost using fair value method of accounting.
(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. 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 1,345,000 11,00,000 Nil 1,30,00,000
Options granted Nil Nil 5,25,000 Nil
Options forfeited/lapsed 5,25,000 Nil Nil Not applicable
Options vested Nil Nil Nil Not applicable
Options exercised 1,37,500 Nil Nil Not applicable
The total number of shares arising as a result of exercise of option 1.37.500 Equity shares were allotted during FY 2023-24 for 1.37.500 ESOPs exercised during FY 2023-24. Not Applicable Not Applicable Not applicable
The exercise price INR 100/- INR 100/- INR 100/- Not applicable
Money realized by exercise of options INR 1,37,50,000 Not Applicable Not Applicable Not applicable
Loan repaid by the Trust during the year from exercise price received Not applicable Not applicable Not applicable Not applicable
Number of options outstanding at the end of the year 682,500 11,00,000 5,25,000 Not applicable
Number of options exercisable at the end of the year/total number of options in force 682,500 3,30,000 Nil Not applicable

Employee wise details of options granted during the year:-

• Key managerial personnel Granted during the FY 2023-24: Mr. Vipul Mathur, MD & CEO - Not applicable
5,25,000
• Senior Managerial personnel Nil Not applicable
• Any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that year Nil Not applicable
• 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 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". INR 18.15 Not applicable
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 - INR 100 Weighted-average fair value - INR 52.01 Weighted-average exercise prices - INR 100 Weighted-average fair value - INR 132.31 Weighted- average exercise prices - INR 100 Weighted- average fair value - INR 337.45 Weighted-average exercise prices - Not Applicable Weighted-average fair value - Not Applicable
The number and weighted average exercise prices of stock options
Opening balance INR 100 INR 100 Not Applicable Not Applicable
Granted during the year Not Applicable Not Applicable INR 100 Not Applicable
Exercised during the year Forfeited during the year INR 100 INR 100 Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable
Expired during the year Not Applicable Not Applicable Not Applicable Not Applicable
Closing balance INR 100 INR 100 INR 100 Not Applicable
Exercisable at the end of the year INR 100 INR 100 INR 100 Not Applicable

A description of the method and significant assumptions used during the year to estimate the fair values of options, including the following weighted-average information:

i. the weighted average values of share price, INR 100 INR 100 INR 100 Not Applicable
ii. the weighted average values of exercise price INR 100 INR 100 INR 100 Not Applicable
iii. expected volatility 50% 52% 46% Not Applicable
iv. expected Option life 0.38 years 3.39 years 4.80 years Not Applicable
v. expected dividends 0.55% 2.16% 2.61% Not Applicable
vi. risk-free interest rate 7.49% to 7.85% 6.34% to 6.90% 7.41% to 7.69% Not Applicable
vii. Method used and the assumptions made to incorporate the effects of expected early exercise; Black Scholes method is used for fair valuation of ESOP Black Scholes method is used for fair valuation of ESOP. Black Scholes method is used for fair valuation of ESOP Black Scholes method is used for fair valuation of ESOP
viii. how expected volatility was determined, including an explanation of the extent to which expected volatility was based on historical volatility; The measure of volatility used in ESOP pricing model is the annualized standard deviation of the continuously compounded rates of return. Expected volatility for fair valuation is considered based on average of previous 6 years annualized volatility. The measure of volatility used in ESOP pricing model is the annualized standard deviation of the continuously compounded rates of return. Expected volatility for fair valuation is considered based on average of previous 6 years annualized volatility. The measure of volatility used in ESOP pricing model is the annualized standard deviation of the continuously compounded rates of return. Expected volatility for fair valuation is considered based on average of previous 6 years annualized volatility. The measure of volatility used in ESOP pricing model is the annualized standard deviation of the continuously compounded rates of return. Expected volatility for fair valuation is considered based on average of previous 6 years annualized volatility.
ix. whether and how any other features of the options granted were incorporated into The following factors have been considered (a) Share Price The following factors have been considered The following factors have been The following factors have been considered (a) Share Price
measurement of fair value, such (b) Exercise price (a) Share Price considered (b) Exercise price
as a market condition. (c) Historical volatility (d) Excepted option life (b) Exercise price (c) Historical (a) Share Price (b) Exercise (c) Historical volatility
(e) Dividend Yield volatility (d) Excepted price (c) Historical (d) Excepted option life
option life (e) Dividend Yield volatility (d) Excepted option life (e) Dividend Yield
(e) Dividend Yield
x. the price of the underlying share in market at the time of option grant. INR 126.10 INR 224.05 INR 445.80 Not Applicable
Details related to Trust
(i) Name of the Trust Not Applicable Not Applicable Not Applicable Welspun Corp Employees Welfare Trust
(ii) Details of the Trustee(s) Not Applicable Not Applicable Not Applicable Mr Parasmal Jain;
Mr Yogesh Mehta
(iii) Amount of loan disbursed by company/any company in the group, during the year

Not Applicable

INR 30.05 Crore

Not Applicable

INR 1.97 Crore
(iv) Amount of loan outstanding (repayable to company/any company in the group) as at the end of the year
(v) Amount of loan, if any, taken from any other source for which company/any company in the group has provided any security or guarantee Not Applicable Not Applicable Not Applicable Nil
(vi) Any other contribution made to the Trust during the year Not Applicable Not Applicable Not Applicable INR 1,000
Brief details of transactions on shares by the Trust
(i) Number of shares held at the beginning of the year Not Applicable Not Applicable Not Applicable Nil
(ii) Number of shares acquired during the year through (i) primary issuance (ii) secondary acquisition, also as a percentage of paid up equity capital as at the end of the previous financial year, along with information on weighted average cost of acquisition per share Not Applicable Not Applicable Not Applicable Secondary Acquisition of 86,717 equity shares at weighted average cost of acquisition per share of INR 260.61 representing Negligible percentage of paid up equity capital as at the end of the previous financial year.
(iii) Number of shares transferred to the employees/sold along with the purpose thereof Not Applicable Not Applicable Not Applicable Nil
(iv) Number of shares held at the end of the year Not Applicable Not Applicable Not Applicable Nil
Secondary acquisition by the Trust
Not Applicable Not Applicable Not Applicable Nil

A Certificate obtained from M/s. M. Siroya and Company, Company Secretaries, Secretarial Auditors of the Company with \ respect to the implementation of Welspun Employee Stock Option Plan and Welspun Corp Employee Benefit Scheme - 2022 would be placed before the members at the ensuing Annual General Meeting of the Company and a copy of the same shall be available for inspection at the registered office of the Company.

Information as required under Regulation 14 read with Part F of Schedule I of the SBEB Regulations 2021 has been uploaded on the Company's website and can be accessed at the Web-link:

"http://www.welspuncorp.com" under the tab "Investors -> Company Disclosures" https://www.welspuncorp.com/uploads/investor_data/investorreport__1301.pdf

C) Disclosure of Shares held in suspense account in terms of Regulation 39 read with Clause F of Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

No of shareholders No of Shares
a) Outstanding Balance in the suspense account lying at the beginning of the year 9 1,470
Number of shareholders who approached issuer for transfer of shares from suspense account during the year 2 840
b) Transferred/Credited during the year (140 Shares transferred to IEPF from Unclaimed Suspense account) 2 280
Balance outstanding (a-b) 7 1190

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

D) Listing with the stock exchanges

The Company's equity shares are listed on the BSE Limited (BSE), The National Stock Exchange of India Limited (NSE) and The Calcutta Stock Exchange Limited (CSE). The Secured/ Unsecured, Redeemable, Non-Convertible Debentures are listed on the BSE Limited.

Applicable annual listing fees for the year 2023-24 and 2024-25 have been paid to all the stock exchanges i.e. the BSE, NSE and the CSE as per the invoices received by the Company.

11. ANNUAL RETURN OF THE COMPANY

Pursuant to section 134(3)(a) and section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, a copy of the Annual Return in Form MGT-7 of the Companies (Management and Administration) Rules, 2014 is placed on the website of the Company and can be accessed at the web-link: "http:// www.welspuncorp.com" under the tab "Investors -> Annual Return" https://www.welspuncorp.com/annual-return.php

12. PROCEEDINGS UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016)

There were no proceeding initiated/pending against your Company under the Insolvency and Bankruptcy Code, 2016.

13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

A) Conservation of energy:

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

Sr. No. Description of Energy Efficiency Improvement Measure Energy Savings [kWh/Annum] Savings [INR In Crores/Annum]
Anjar Pipe & Coating Plants
1 ERW-16" Matching X'mer unit DM water pump stop interlock with mill stop using temp feedback & time delay. 7,092 0.006
2 VFD Install on Cooling tower Fan Motor control - 8 no Cooling tower. (ECP-1, ECP-2, ECP-3, Spiral-2, ERW) 32,207 0.027
3 ERW-16" Water pump control through PLC & pump stop interlock with mill run and with time delay. 6,912 0.006
ERW-16" Tunnel light on/off interlock to give with drive ready feedback. Individual bed wise on/off switch provided for inspection lights 9,198 0.001
5 ERW-16" Drive to be provided for hydro tester fill pump with two diff speed ref with filling time during testing. 38,253 0.032
LSAW Ideal time power source drawing 60KW power so stop ID/OD 6 welding AC & DC power source in auto if there will be no any welding ON command in 15 min. 3,42,432 0.288
Coating-2 Dust Collector Motor Rpm during Auto Cycle Stop & Pipe 7 Transfer Time reduced. Necessary Software Modification done and Trial Taken. 17,750 0.015
8 Coating-2 Transparent sheet fixing on roof for natural light inside plant at LSAW Coating (55 nos). 42,552 0.036
Spiral-2 Hydraulic Power pack to be stop if no hydraulic operation up 9 to 15 min & ON in auto with next travel/lifter command. 33,416 0.028
10 Installation of Motion sensor for offices lightning 315 0.000
Sub-Total 5,30,127 0.439
Sr. Description of Energy Efficiency Improvement Measure No. Energy Savings [kWh/Annum] Energy Savings [kWh/Annum]
Bhopal Pipe & Coating Plants
1 Optimizing Compressors utilization with installation of new Air flow meters-3nos 1,10,200 0.080
2 Minimization of Usages of Lights in final & pre visual inspection area in spiral 1&2 plant by synchronizing with rotator up/down movement. 14,391 0.010
3 Coating quenching zone water pump auto control.( When process idle, Pump stop ) 4,800 0.003
4 Automation of Cooling Tower Fan Motors By VFD drive and temperature sensor. 20,501 0.015
5 Cold striping initiative in External coating Plant. (Targeting approx. 80% orders without using 125KW induction heater.) 3,125 0.002
6 Install IGBT Base Power factor controller to maintain PF above 0.99 as well as getting incentive 7% from MPEB. 3,04,432 0.590
Reduction in paint consumption & waste generation in internal coating 7 by proper tuning of Sensor & Energy Saving of 3KW/Day by providing motion sensor in offices 1,165 0.018
8 Rain water harvesting 4,514 0.003
9 Air consumption reduction in Spiral 1 plant by providing brushing system in chips conveying unit instead of use of compressed air 18,000 0.052
Air consumption reduction in internal coating plant by providing orifices 10 in compressed air pipe line brushing system in chips conveying unit instead of use of compressed air 6,468 0.003
Sub-Total 4,87,596 0.776
Mandya Pipe Plant
1. Replaced conventional starter with VFD for IDOD vacuum blowers. 31,534 0.024
2. Replacement of conventional lights with LED lights 3,062 0.002
Sub-Total 34,596 0.026

b) The steps taken by the company for utilizing alternate sources of energy

Alternate Power - 2 MW Roof Top Solar plant implemented at Bhopal Plant. This will begin reflecting from FY24-25 with an average monthly savings of approx. 8-10 lakhs.

c) The capital investment on energy conservation equipment-

I) Anjar: With a total capital investment of INR 0.34 Crore in FY 23-24, we are having energy savings of INR 0.44 Crore per year at INR 8.28/kWh.(yearly average rate)

II) Bhopal: With a total capital investment of INR 0.24 Crore in FY 23-24, we are having energy savings of INR 0.78 Crore per year at INR 15.91/kWh.

III) Mandya: With a total capital investment of INR 0.05 Crore in FY 23-24, we are having energy savings of roughly INR 0.03 Crore per year at INR 7.51/kWh.

B) Technology absorption and Research & Development

(a) Innovation.

Details of plant-wise innovations are as under:

Anjar Plant:

• PBM - ID cooling trial and process establishment.

• Digitalization of Customer Inquiry process.

• HFW16" - Low Temperature fracture properties for CO2 pipelines from HFW.

• ERW Pipes for the hydraulic cylinder body - Tube Products of India.

• ERW - Hollow section production for doors, windows & preferably coated types.

Bhopal Plant:

• Fume Extraction System developed in coating plant for PU Coating.

• Fabrication and commissioning of Bundle press for Scrap PU.

• Introduced, 6 Mtr. Pipe End Brushing Arrangement at stripping.

• Painting system flushing pump electrical supply provided from UPS.

• Spiral 1 &2, Enhance operator visibility while high pressure pipe testing and overcome on safety concern.

• Spiral 1, after edge milling 2 brushing unit inhouse fabricated and installed on position for reduce air consumption.

• Spiral 2, Hydro tester pressure capacity enhanced.

• Spiral 1, Edge milling -2 belt type chips conveyor in-house fabricated.

(b) Research & Development carried out by the Company.

Anjar Plant:

A total expenditure of INR 4.63 Crore was made during FY 23-24 for the following R&D projects:

• Development of Pipelines for transportation of Pure Hydrogen/ blended with Natural Gas. Carrying out tests required for qualification of pipelines as per ASME B31.12 standard.

• Samples from HEW is under testing at RINA to qualify the pipes reference ASME 31.12 for Hydrogen application.

• Participation in JIP program on revising the guidelines for Design and Operation of Hydrogen Pipelines.

• Participated in the subcommittee for development of Line Pipe Specification by Bureau of Indian Standards.

• Actively involved in the ASME subcommittee for development of pipelines for Hydrogen transportation.

• We have qualified our samples in extreme sour conditions by testing it at DNV Singapore. This activity has put us in leading the projects of Qatar Energy, PTTEP etc.

• EMRB module launched and put in use Welspun became the first pipe company in India to take such an initiative, a small step towards paperless economy.

Bhopal Plant:

• Change in set up of Application conveyor after paint booth and reduce spray nozzle distance. Increased Productivity by reducing cleaning time. The emission of paint fume has reduced by 50%.

• Spiral 1, APFC Substation, APFC Panel Power factor Improvement. it was 0.96 to .97 but now we have improved it upto UNITY .99

• Hot air Header provided to Greco PU Pump to prevent the PU coating pump from seizing.

• By Installing 2 Nos Spray Nozzles instead of One and increase PU coating productivity by 25% from the existing level.

• Spiral 2, Upgrade PLC to S7-1200 in End Facer Machine for Online program monitoring easily and for fault tracing HMI installed to check fault finding activity easily.

(c) Technology Up gradation

Anjar Plants:

• Manufacturing Data Record Automation.

• Pipe end dimension measuring system at LSAW plant.

• Automated Pipe dimension measurement system for ERW pipes.

• HFW16" - Upgradation of Coil UT software.

Bhopal Plant:

• Installation of Proximity Sensor in PE Hopper to reduce manual intervention.

• In External PU setup, Single control panel installed instead of multiple panels.

• Reduction the causes of jamming of spray gun in PU set up during the power failures.

• Replaced paint transfer flexible hoses with metallic heater lines in internal painting unit.

• Hot air Header provided to Greco PU Pump.

• Grit reclaim conveyor system developed from internal blow out to blasting 1.

• Air receiver tank provided for proper supply of air on pulsating valve.

• Development of local spares for internal blaster instead of china make.

• Orifices provided compressed air pipe line in internal coating plant.

• Internal coating trolley cable drag chain position changed.

• Air header provided for air receiver and ejector bellow.

• At External coating Final Station, Hyd. Up and Down Rotator Unit Installed for increase the productivity.

• Spiral 2, Edge milling-2 Drive replacement Vector 9300 to 9400.

Mandya Plant:

• New FUT order has been placed.

• Enhanced the capacity of Diabolic conveyors of IDOD and optimizing performance to meet production demands.

• Digital Flat panel Detector along with imaging software has been installed for Real Time Radiography.

• Universal Testing Machine upgraded with Servo controlled Motorized system.

• Under ESG Initiative Installation of VFD for IDOD vacuum blowers.

• Dashboard has been developed for Mill, Hydrotester and IDOD station Parameter monitoring.

• Under HSE Initiatives Phase-1 LIDAR laser sensor Safety devices has been installed for prioritized 8 conveyor locations.

• Digital Energy Management system for real time monitoring of power consumption.

(d) Process & System Improvement

Anjar Plants:

• WelSAFE - Development of an HSE Management System for structured data entry with auto report generation. 10 modules completed.

• HSE - Safety Park development at Spiral-2 for awareness & check effectiveness of safety training.

• HFW16" - Weld box up gradation to ensure sound welding in HFW process, essential for proper fusion in higher grade and thickness.

• HFW6" - Installation of a new Squeeze roll force measurement system to cater to the requirement of clients such as PDO, SAUDI ARAMCO, etc.

• Spiral-2 Up-gradation of the Fluoroscopy system.

• PBM - Expansion of the inspection bed from existing size of 8.68 m x 7.3 m to 12 m x 10 m to comply with observation made during API audit.

• PBM - Replacement of Floor plate of forward clamp roll to eliminate Off plane problem.

• ECP-1&3 - New 500 kW induction heater for pipe pre-heating before shot blaster.

• LSAW - Forming Press structural strengthening by replacement of Top & Bottom lock plate joints.

Bhopal Plant:

• New EOT Crane commissioning at Coating Plant outlet.

• 2 Nos of AC Drives (Siemens) commissioned at Spiral Mill Edge Miller machine.

• Optimisation of Existing Compressor to save power cost.

• New FUT Machine Installed at SP#2 Plant.

• New RTR Machine to be installed at SP#2 Plant.

• New Adhesive Die 300 MM procurement for overlap wastage.

Mandya Plant:

• New FUT procurement has been placed.

• Enhanced the capacity of Diabolic conveyors of IDOD and optimizing performance to meet production demands.

• Digital Flat panel Detector along with imaging software has been installed for Real Time Radiography.

• Universal Testing Machine upgraded with Servo controlled Motorized system.

• Under ESG Initiative Installation of VFD for IDOD vacuum blowers.

• Dashboard has been developed for Mill, Hydrotester and IDOD station Parameter monitoring.

• Under HSE Initiatives Phase-1 LIDAR laser sensor Safety devices has been installed for prioritized 8 conveyor locations.

• Digital Energy Management system for real time monitoring of power consumption.

(e) Key Initiatives for Future

Anjar Plants:

• LSAW - New Final UT System with Phased array technology.

• LSAW - Compression Test and Elevated tensile Test machine.

• LSAW - Upgradation of Tensile Machine - Test software, PC, Drive and associated attachments.

• PBM - Development of an automatic bend dimension measurement facility as per Qatar Gas compliance.

• Transition less bend manufacturing.

• WelSMART LOTO software implementation.

• Historian for Forming press and expander for quick retrieval of last run data and copies of similar size and grade in LSAW.

• Condition based monitoring and E-maintenance of critical machines (Piloting from LSAW, Anjar).

• Predictive analysis of Induction Heated Bends mechanical properties w.r.t. to process parameters by AI & ML of properties of bend in PBM.

• Spiral-2 - Forming Mill Tack Welding System

• LSAW - Vacuum Plate Lifting System.

• HSE - Visitor Safety Induction Centre at Campus-1 gate.

• HFW16" - ID Scarfing boom.

Bhopal Plant:

• Coating Conveyor Inlet to Quenching zone up to 15 Mtr.) Tyre roller PU wheel to be replaced.

• 1 Nos Hot Air Header with controlling panel required for Internal Painting Pump.

• Extension of dust collector's chimneys up to 3 Mtr. above of Coating plant shade at Internal Blaster.

• In Coating Plant MHE Hydraulic Power Pack, Radiators to be Installation. (NTC, Brushing and Internal Plant.).

• Spiral 2, End facer Spindle both drive Micro master 440 to be replaced with Siemens.

• Spiral 2, ID/OD-2 Laser unit Change MEL TO KML.

• Spiral 2, OD-1 OD Head Up-gradation from AC/DC 1000 to AC/DC 1000 SD

• Spiral 1, ID/OD-2 Offline-2 Machine Upgradation from ISAM to U&S.

• Spiral 2, Data Login New dashboard & Screen installed in Welding Offline.

• Spiral 1, Forming De-coiler and Main pinch roller, Base roller to be modified and frame strengthen to be done.

Mandya Plant:

• Initiative taken for 2 MW Solar Power Group captive Open Access System.

• Initiative taken for Installation of 20 nos. Solar street lights.

• Installation of Virtual fencing to avoid un authorized entry at Bay Crossing skids.

• Installation of LIDAR laser sensor devices for Conveyor System safety in Phase-2.

• Installation of Fire Alarm system in HT panel room.

• Digital Water and Air consumption monitoring system to be installed.

• Initiative taken for Installation of Automatic Pipe Length measurement system for Pipe Mill.

• Initiative taken for Butt joint System up- gradation for improving machine reliability and weld quality.

• EOT Crane 20T Online bay; Conventional starter of LT & CT control to be replaced by the VFD Panels.

• Installation of operator less weighing system, vehicle positioning & photo capturing.

• New Non Lub Compressor with Receiver to be installed.

• SAP integration of Hydro & FUT machine.

• Data Logging of Process parameters of Mill, Hydro, End-facer & IDOD.

(f) Expenditure on R&D:

(i) Capital : INR NIL Crores

(ii) Recurring : INR 4.63 Crores

(iii) Total : INR 4.63 Crores

(iv) Total R&D expenditure as a percentage of revenue from operations : 0.03%

(g) Total Foreign exchange earnings and Outgo:

Used - INR 2,289 Crores Earned- INR 2,525 Crores

14. CORPORATE SOCIAL RESPONSIBILITY (CSR)

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

15. 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 Key Managerial Personnel:-

• Ms. Dipali Sheth has been appointed as an nonexecutive, independent director for the first term of four consecutive years with effect from August 04, 2023.

• Mr. Aneesh Misra has been appointed as nonexecutive, non-independent director of the Company with effect from August 04, 2023.

• Mr. Arun Todarwal, an independent director, ceased to be Director due to retirement on completion of his term as an independent director with effect from close of business hours on March 31,2024.

• Ms. Revathy Ashok, an independent woman director, ceased to be a director due to retirement on completion of her term as an independent director with effect from close of business hours on March 31,2024.

• Ms. Dipali Goenka, a non-executive, nonIndependent woman Director, resigned from the position of the Directorship of the Company with effect from close of business hours on March 31,2024.

• Mr. Pradeep Joshi has resigned from the position of Company Secretary, Compliance officer and Nodal officer of the Company with effect from April 21,2024.

• Mr. Paras Shah has been appointed as the Assistant Company Secretary, Compliance officer and Nodal officer of the Company with effect from April 26, 2024.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Vipul Mathur is retiring by rotation at the forthcoming Annual General Meeting and being eligible, he has been recommended for re-appointment by the Board.

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

The following have been designated as the Key Managerial Personnel of the Company pursuant to Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

• Mr. Vipul Mathur, Managing Director & CEO;

• Mr. Percy Birdy, Chief Financial Officer;

• Mr. Paras Shah, Assistant Company Secretary, Compliance officer & Nodal Officer.

B) Independent Directors

The independent directors have individually declared to the Board that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 and the SEBI (LODR), 2015 at the beginning of the year and there is no change in the circumstances as on the date of this Report which may affect their status as an independent director.

Your Board confirms that in their opinion the independent directors fulfill the conditions of the independence as prescribed under the Companies Act, 2013 and the SEBI (LODR), 2015 and they are independent of the management.

Further, in the opinion of the Board the independent directors, possess requisite skills, expertise, experience and integrity. For details on the required skills, expertise, experience, please refer to the disclosure made under Point No.II-"Board of Directors" of the Corporate Governance Report annexed as Annexure 6 to this report.

The key additional criteria for independence are mapped as under:

Key Independence Criteria AA AM DS MC
The director must not have been employed by the Company in an executive capacity within the last five years. Y Y Y Y
The director must not accept or have a "Family Member who accepts any payments from the company or any parent or subsidiary of the company in excess of $60,000 during the current fiscal year", other than those permitted by SEC Rule 4200 Definitions, including i) payments arising solely from investments in the Company's securities; or ii) payments under nondiscretionary charitable contribution matching programs. Payments that do not meet these two criteria are disallowed Y Y Y Y
The director must not be a "Family Member of an individual who is, or during the past three years was employed by the Company or by any parent or subsidiary of the Company as an executive officer. Y Y Y Y
The director must not be (and must not be affiliated with a company that is) an adviser or consultant to the Company or a member of the Company's senior management Y Y Y Y
The director must not be affiliated with a significant customer or supplier of the Company Y Y Y Y
The director must have no personal services contract(s) with the Company or a member of the Company's senior management Y Y Y Y
The director must not be affiliated with a not-for-profit entity that receives significant contributions from the Company Y Y Y Y
The director must not have been a partner or employee of the Company's outside auditor during the past three years Y Y Y Y
The director must not have any other conflict of interest that the board itself determines to mean they cannot be considered independent Y Y Y Y

AA - Mr. Anjani K. Agrawal, AM - Ms. Amita Misra, DS - Ms. Dipali Sheth, MC - Mr. Manish Chokhani All the independent directors on the Board of the Company are registered with the Indian Institute of Corporate Affairs, Manesar, Gurgaon as notified by the Central Government under Section 150(1) of the Companies Act, 2013 and shall undergo online proficiency self-assessment test, as may be applicable, within the time prescribed by the IICA.

C) Formal Annual Evaluation Background:

The performance evaluation of the Board, its committees and individual directors was conducted by the entire Board (excluding the Director being evaluated) on the basis of a structured questionnaire which was prepared after taking into consideration inputs received from the Directors covering various aspects of the Board's functioning viz. adequacy of the composition of the Board and its Committees, time spent by each of the directors; accomplishment of specific responsibilities and expertise; conflict of interest; integrity of the Director; active participation and contribution during discussions, governance and ESG parameter. The questionnaire is reviewed periodically and updated in line with the change in the business and regulatory framework.

Mode of evaluation:

Assessment is conducted through a structured questionnaire. Each question contains a scale of "0" to "3". The Company has developed an in-house digital platform to facilitate confidential responses to a structured questionnaire. All the directors participated in the evaluation process.

For the FY 2023-24 the annual performance evaluation was carried out by the Independent Directors, Nomination and Remuneration Committee and the Board, which included evaluation of the Board, Independent Directors, Non-independent Directors, Executive Directors, Chairman, Committees of the Board, Quantity, Quality and Timeliness of Information to the Board.

Results:

The evaluation results were discussed at the meeting of Board of Directors, Nomination & Remuneration Committee and the Independent Directors' meeting. The Directors were satisfied with the overall corporate governance standards, Board performance and effectiveness. The results are summarized below:

Key parameters No. of evaluation parameters Score %
Board of • Board structure and composition
Directors • Board meeting practices (agenda, frequency, duration) 23 93%
• Board culture and effectiveness
• Core Governance & Compliance
• Functions of the Board (Strategic direction, ESG etc.)
• Execution, Mergers & Acquisitions
• Risk Management
• Interest of all stakeholders
• Functioning of Board Committees
Board Committees • Composition, roles & responsibilities and effectiveness of the committee
• Meeting structure and information flow 10-17 86-95%
• Contributions to Board decisions
• Core Governance & Compliance
Independent • Independence from company (no conflict of interest)
directors • Independent views and judgement
• Skills & Experience in emerging issues such as cyber security and ESG. 12 87-99%
• Objective contribution to the Board deliberations
Chairperson • Promote effective decision-making
• Encourage high quality of constructive debate
• Open-minded and listening to the members O QQO/
• Effectively dealing with dissent and work constructively towards consensus
• Shareholders' interest supreme while taking decisions.
Executive • Relevant industry experience
Directors • Performance vis-a-vis business plan
• Capabilities to deal with challenging situations 13 95%
• Established leadership position
• Development of expertize and general competence of people under him
Non-executive non- • Contribution to the Board discussions with his/her expertize and experience 11 86-100%
independent director • Depth of understanding about the business model and the industry
• Skills & Experience in emerging issues such as cyber security and ESG.

 

Board of Directors
Parameters with high performance scores: Key suggestions/focus areas:
• Effective in establishing a corporate environment that promotes timely and effective disclosure, fiscal accountability, high ethical standards and compliance with applicable laws and regulations and has set a corporate culture and the values by which executives throughout a group shall behave. • Robust succession plan for the senior leadership team (Action Plan-Develop long term succession plan considering diversity, domain expertize).
• More time should be spent on strategic issues related to new businesses (Action Plan- More frequent and separate presentations and discussion with the CEO of each business to understand challenges and specific strategies of each businesses).
• Well aware of the Company's key drivers of performance and associated risks, threats and opportunities and recommends adequate mitigation plans.
• Collectively and constructively work as a team. • Board Agenda should be transparent, realistic to the current needs and the meeting materials shall be shared well in time. (Action Plan-The Board Agenda and materials will be shared in time with more specific detail related to each proposals for consideration by the Board).
• Regularly follows up on its decisions to ensure that action is taken on all its decisions.
Board Committees
Parameters with high performance scores: Key focus areas for next year:
• Financial reports presented to the Board have been drawn as per accounting standards and have been reviewed by the statutory auditors and does not have any misstatement • The Company internal financial controls and risk management systems are in place in the Company. (Action Plan- These controls will be further strengthened keeping in view the different businesses that are now scaling up).
• Performance monitoring of subsidiaries
• Scope of Internal Audit assignment and meets frequently regularly to enough to considerreview and consider and review internalinternal audit reports. • Robust succession plan for the key management team (Action Plan-Develop long term succession plan considering diversity, domain expertize).
• Reviews and monitors the Whistleblower policy and vigilance mechanism. • Effective Communication between the Committees and the executives to discuss the issues within the Committee's scope (Action Plan- More frequent meeting with the senior executives and presentation by them on their respective functional areas).
• Monitors the Company's insider trading policy.
• Regularly follows up on its decisions to ensure that action are implemented.
• Audit Committee meeting is held in an open and objective manner providing members ample opportunity to share their views. The Committee recommendation effectively contributes to the Board's decision. • Review the sufficient opportunity to meet senior staff and operating management of (Action Plan- More frequent meeting with the senior executives and presentation by them on their respective functional areas).
• Audit Committee meets frequently enough and for sufficient duration to enhance its effectiveness with appropriate time is appropriately allocated between management presentation and the Committee discussion.
• Review the process evaluating the Company's risk appetite and specific risk tolerance levels in conjunction with strategic objectives (Action Plan- Focussed discussion on the Company's risk appetite and specific risk tolerance levels in conjunction with strategic objectives).
• The NRC is dedicated to adopting best practices in governance while also fully complying with the laws of land.
• The SRC periodically monitor the efficacy of security transfer system.
• The amount of expenditure under the policy is determined with full transparency.

Key actions taken as a result of previous year's evaluation:

• Frequent and separate presentations by the CEO of each business were made to understand challenges of each business and specific strategies.

• Various stakeholders were invited and their feedback were discussed by the Board Committee.

• Consolidated views, concerns and challenges, action plan are periodically pertaining to various functions are presented by the respective Business CEO's.

• Focused Risk Management Committee meetings in the presence of the CEO's of the businesses to understand challenges/ risks of each business and specific strategies.

D) Nomination and Remuneration policy: For Company's policy on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of directors and other matters provided under sub-section (3) of section 178, please refer to the Para IV - Nomination and Remuneration Committee of the "Corporate Governance Report" annexed to the Directors' Report as Annexure 6.

E) Committees of the Board of Directors

The Board Committees play a crucial role in the governance structure of the Company and have been constituted to deal with specific areas/activities as mandated by applicable regulations; which concern the Company and need a closer review. Majority of the Members constituting the Committees are Independent Directors and each Committee is guided

by its Charter or Terms of Reference, which provide for the composition, scope, powers & duties and responsibilities. The Chairperson of the respective Committee informs the Board about the summary of the discussions held in the Committee Meetings. The minutes of the Meeting of all Committees are placed before the Board for review.

During the year, all recommendations of the Committees of the Board which were mandatorily required have been accepted by the Board.

Information on the Audit Committee, the Nomination and Remuneration Committee, the Stakeholders' Relationship, Share Transfer and Investor Grievance Committee, the Risk Management Committee, the ESG Committee and the CSR Committee and meetings of those committees held during the year under Report and recommendations, if any, of the Committees not accepted by the Board is given under Para No. (III) to (VII) of the "Corporate Governance Report" annexed to the Directors' Report as Annexure 6.

F) Board and Committee Meetings: For disclosure on the number of Board Meetings and Committee Meetings, the date on which the meetings were held and the attendance of each of the directors, please refer to the Para (II) to Para (VII) of the "Corporate Governance Report" annexed to the Directors' Report as Annexure 6.

16. PARTICULARS OF OUTSTANDING LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 ARE AS UNDER:

(INR in Crore)
Name of the Entity/beneficiary Investment Joint Bonds/ Security Corporate Guarantee Loans Purpose for which the loans, guarantees and investments are proposed to be utilized
Welspun Pipes Inc. 0.04 - 500.43 -
Welspun Tradings Limited 5.02 - - - The corporate guarantees were given to secure credit facilities availed by the subsidiaries/joint ventures of your Company, to guarantee export obligations of the subsidiaries/joint ventures to subsidiaries of the Company.
Welspun Captive Power Generation Limited 72.28 - - -
Welspun Mauritius Holdings Limited 29.85 - - -
Welspun Wasco Coatings Private Limited (provision made) 25.47 - 8.67 21.17
Welspun DI Pipes Limited 214.58 467.64 560.00 33.97
Welassure Private Limited* 0.11 - - -
Welspun Global Services Limited* 0.23 - - -
Mahatva Plastic Products and Building Materials Private Limited** 0.00 - - -
Anjar TMT Steel Private Limited 65.00 - 400.00 - The Long-term investments are made only in subsidiaries, joint-ventures and associate companies for business expansion, business transformation as per the object clause in the Memorandum of the
Welspun Specialty Solutions Limited 283.65 - 337.39 182.63
Sintex-BAPL Limited 330.50 - -
Sintex Prefab and Infra Limited 30.27 - - -
Nauyaan Shipyard Private Limited 78.51 - - -
Sintex Advance Plastic Limited - - 200.00 -
Mounting Renewable Power Limited ** 0.00 - - -
Clean Max Dhyuthi Private Limited* 7.59
Welspun Transformation Services Limited* 1.41 - - -

* Investment carried at fair value through profit and loss. **Amount below rounding off norms

17. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All related party transactions that were entered into during the year under Report were on an arm's length basis and were in the ordinary course of business. During the year under review, your Company had not entered into any Material Related Party Transactions, i.e. transactions exceeding INR 1000 crore or ten percent of the annual Consolidated turnover as per the last audited financial statements, whichever is lower. There were no materially significant related party transactions undertaken by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which might have a potential conflict with the interest of the Company at large. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for FY 2023-24 and hence does not form part of this report. Details of related party transactions entered into by the Company, in terms of Ind AS-24 have been disclosed in the Note No. 42 of the standalone financial statements.

The Company's policy on Related Party Transactions as approved by the Board is uploaded on the Company's website at the web-link: "http://www.welspuncorp. com" under the tab "Investors --> Company Policies". https:/ /www.welspuncorp.com/uploads/investor_ data/investorreport_1262.pdf

18. MANAGERIAL REMUNERATION

a. Details of the ratio of the remuneration of each director to the median employee's remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Non-executive, independent directors are paid sitting fees at a fixed rate per meeting of the Board or the Committee or other meetings attended by them and as such the same are not comparable with the remuneration to the employees.

The remuneration of each Director, Chief Financial Officer and Company Secretary, percentage increase in their remuneration during the Financial Year 202324 and ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the Financial Year 2023-24 are as under:

(Amount in INR Crores)
Sr. No. Name of Director/KMP Designation Remuneration of Director/ KMP for the Financial Year 2022-23 Remuneration paid to Director/ KMP for the Financial Year 2023-24 % increase in Remuneration in the Financial Year 2023-24 Ratio of Remuneration of each Director to median remuneration (Including perquisite value of ESOPs exercised) of employees for the Financial Year 2023-24
1 Mr. Balkrishan Goenka$ Non-Executive Chairman 1.16 12.50 (payable) 977.59 329.58
2 Mr. Vipul Mathur Managing Director & CEO 6.34~ 7.18 13.34 189.44
3 Ms. Amita MisraA Independent Director 0.16 0.16 (0.64) 4.11
4 Mr. Arun TodarwalA& Independent Director 0.31 0.32 4.26 8.38
5 Ms. Dipali ShethA Independent Director N/A 0.20 N/A 5.27
6 Mr. Dipali Goenka*! Non-Executive Director Nil Nil N/A N/A
7 Mr. Anjani AgrawalA Independent Director N/A 0.40 N/A 10.55
8 Mr. Manish ChokhaniA Independent Director 0.02 0.06 Not Comparable as appointed for the part of the financial year 2022-23. 1.53
9 Mr. Rajesh Mandawewala* Non-Executive Director Nil Nil N/A N/A
10 Ms. Revathy AshokA& Independent Director 0.14 0.11 (15.97) 2.97
11 Mr. Aneesh Misra Non-Executive Director N/A Nil N/A N/A
12 Mr. Percy Birdy Chief Financial Officer 2.19 2.28 4.39 N/A
13 Mr. Pradeep Joshi Company Secretary 0.64 0.68 4.91 N/A

$ 1% Commission on the consolidated net profits of the Company for the FY 2022-23 is paid and for FY 2023-24 is payable.

A Only Sitting fees is paid.

* Opted not to draw any remuneration or receive sitting fees.

& Retired due to completion of tenure from close of business hours on March 31,2024 ! Resigned with effect from close of business hours on March 31,2024

~ Mr. Vipul Mathur has exercised 450,000 stock options of the Company, vested during the year 2022-23. The perquisite amount on exercise of these options was INR 4.86 crores is excluded from remuneration for the year 2022-23. Remuneration excludes amortization of fair value of employee share based payments under IND-AS 102. The above figures do not include provisions for encashable leave, gratuity and premium paid for group health insurance, as separate actuarial valuation/premium paid are not available.

(The expression "median" means the numerical value separating the higher half of a population from the lower half and the median of a finite list of numbers may be found by arranging all the observations from lowest value to highest value and picking the middle one).

(i) The percentage increase in the median remuneration of employees in the financial year: 1.1%.

(ii) The number of permanent employees on the rolls of the Company: 2663.

(iii) (iii) Average percentage increase /(decrease) already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentage increase/ (decrease) in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: Aggregate remuneration of employees excluding KMP increase by 11.95%. Change in the remuneration of the KMP- increase by 10.60% excluding perquisites from employee stock option scheme.

(iv) The key parameters for any variable component of remuneration availed by the directors:

1) EBITDA

2) ESG Goals

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

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

Sr. No. Name Designation DOB Age Completed years Joining Date Remuneration FY 23-24A Previous Company Qualification Nature of Employment % Of Equity shares held in the Company Relative of any Director/ Manager of the Company
1 Mr. Vipul Mathur Managing Director & CEO 21-Mar-1970 54 2-Feb-2001 7,18,50,251 Man Industries (India) Ltd MBA Permanent 11,000 No
2 Mr. Godfrey John Director& 30-Aug-l 965 59 11 -Jun-2012 4,53,19,475 Ferro Tech India Pvt. Ltd. MBA Permanent Negligible No
3 Mr. Percy Birdy President 22-Jan-1968 57 11 -Jun-2018 2,28,74,911 Allanasons Group CWA, CA Permanent Nil No
4 Mr. Tribhuwan Singh Kathayat President 10-Jan-1971 54 20-Jun-l 995 2,28,33,012 Jindal Organisation BSC, DME, MBA Permanent Negligible No
5 Mr. Atul Trivedi President 3-Jan-1974 51 14-May-2007 1,52,21,940 Tata Consultancy CA Permanent Nil No
6 Mr. Nitin Agarwal President 6-Feb-l 983 42 20-Apr-2007 1,53,44,855 Welspun Tubular LLC MBA, PGDM Permanent Nil No
7 Mr. Priyaranjan Kumaar* President 2-Aug-1969 55 4-Jan-2023 1,40,00,000 Navin Fluorine International Ltd B.Sc, BGL, MBA - HR Permanent Nil No
8 Mr. Navin Agarwal Senior Vice President 01-Jan-1972 53 02-Jun-2008 1,35,45,007 Mahindra & Mahindra Ltd. B.Com, PGDM Permanent Nil No
9 Mr. Anil Nimbargi Senior Vice President 13-Oct-l 965 59 9-Sep-2009 1,34,51,378 Ispat Industries B.Sc, MBA Permanent Nil No
10 Mr. Sureshchander Darak President 02-Jan-1968 57 02-Jan-2008 1,33,49,840 Reliance Industries Ltd. B.Com, DITM Permanent Nil No
n Mr. Manish Pathak President 20-Jan-1968 57 25-Jun-2008 1,23,37,474 Man Industries (India) Ltd BE Mech Permanent Nil No
12 Mr. Vijay Gangadhar Khanzode Vice President 20-Mar-1972 52 02-Jan-2023 1,19,00,500 Vedanta Limited BE, B.Tech, MCA/PGDCA Permanent Negligible No
13 Mr. Rupak Ghosh President 17-Oct-l 969 55 29-Oct-2007 1,14,85,525 Blue Star Ltd. CA, CWA Permanent Negligible No
14 Mr. Nitin Goyal Vice President 24-Dec-1981 43 24-Jan-2022 1,12,50,059 Ernst & Young B.Com (Flons), ICWA, CA, LLB, DISA Permanent Nil No
15 Mr. Harishchandra Gupta President 05-Feb-1955 59 07-Apri 1-2007 1,11,34,559 Idea cellular Ltd. M.Com, LLB., BA LLB, MBA Permanent Nil No
15 Mr. Debasish Mazumdar# President 28-Jan-1964 51 06-May-2023 1,08,93,983 Shyam Sel & Power Limited BE, B.Tech Permanent Nil No
17 Mr.Gaurav Merchant Vice President 11-Sep-1973 51 15-Jan 2014 1,08,71,109 Essar Steel Limited MBA, PGDM (finance) Permanent Nil No
18 Mr. Ketan Patel Senior Vice President 31 -Jul-1970 54 03-Nov-2015 1,02,44,717 JSW Steel Limited B.Com, CA Permanent Nil No
19 Mr. Hukumchand Chandratan Lakhotiya# President 22-Nov-l 959 55 31 -Oct-2023 1,00,00,000 JK Files Engineering Ltd (Raymond Group) ME, M.Tech Permanent Nil No

A The remuneration is inclusive of perquisite amount on exercise of the options. The Remuneration excludes amortization of fair value of employee share based payments under IND-AS 102. The above figures do not include provisions for encashable leave, gratuity and premium paid for group health insurance, as separate actuarial valuation/premium paid are not available.

# Employed for a part of the year.

* Mr. Priyaranjan Kumar shall ceased with effect from the close of business hours on July 30, 2024, consequent to his resignation as the Chief Human Resource Officer of the Company.

& Not on the board of the Company.

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

d. Particulars of remuneration to the executive directors including the details of remuneration paid/payable to the executive directors for the FY 2023-24 are as under:

Name of the Director Salary & Allowance including perquisites and variable pay Perquisites related to ESOP* Commission Service Contract/ Tenure performance linked incentives Notice Period Severance Fees Stock Option Pension
Mr. Vipul Mathur INR 7. 18 CroreA Nil Nil 5 years Nil 6 month Nil Details of options granted under the Employee stock options Scheme are available on the website of the Company, https:// www.welspuncorp. com/uploads/ investor_data/ investorreport 1301. pdf Nil

A In addition to salary & allowance, entitled for other benefits as per the Company's policy.

Remuneration excludes amortization of fair value of employee share based payments under IND-AS 102. The above figures do not include provisions for encashable leave, gratuity and premium paid for group health insurance, as separate actuarial valuation/premium paid are not available.

* Represents perquisite value related to ESOPS exercised during the year in respect of stock options granted over the past several years by the Company.

Mr Balkrishan Goenka, Non-Executive Chairman was paid Commission of INR 1.16 Crores (Gross) i.e. @1% of the Net Profits (consolidated) for the Financial Year 2022-23. The Commission payable @1% of the Net Profits (Consolidated) for the FY 202324 is INR 12.50 Crores.

No remuneration or perquisite was paid to, and no service contract was entered into with, or stock options granted to any nonexecutive director, but the sitting fees were paid/payable to the following directors for attending meetings of Board/Committees of the Board and General Meetings during the FY 2023-24. Only Letter of Appointment were issued to the independent directors.

Name of the Director (INR )
1 Ms Amita Misra 15,60,000
2 *Mr Arun Todarwal 31,80,000
3 Mr Anjani Agrawal 40,00,000
4. Mrs. Dipali Sheth 20,00,000
5. Mr Manish Chokhani 5,80,000
6. *Mrs. Revathy Ashok 11,26,000
Total to Non-Executive Directors 1,24,46,000

*Retirement of Director due to completion of tenure w.e.f. March 31,2024

The above mentioned sitting fee paid/payable to the non-executive directors was within 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.

Save and except as disclosed in the financial statements, none of the Directors or Key Managerial Personnel had any pecuniary relationships or transactions vis-a-vis the Company.

19. SHAREHOLDING OF THE DIRECTORS OF THE COMPANY AS ON MARCH 31, 2024.

For detail of shareholding of the directors, refer to the Para No. II - Board of Directors in the Corporate Governance Report annexed to this Report as Annexure 6.

Except as mentioned in the "Corporate Governance Report", none of the other directors hold any shares or convertible securities in the Company.

20. CORPORATE GOVERNANCE CERTIFICATE

The Compliance certificate obtained from M/s. M. Siroya and Company, Practicing Company Secretary regarding compliance of conditions of corporate governance as stipulated under Chapter IV read with relevant Schedule to 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 different areas of businesses across the globe, the Company is exposed to plethora of risks which may adversely impact growth and profitability. The Company recognizes that risk management is of concern to all levels of the businesses and requires a structured risk management policy and process involving all personnel. With this objective, the Company had formulated structured Risk Management Policy thereby to effectively address those risks such as, strategic, business, regulatory and operational risks, including cyber security & data Privacy risks. The Policy envisages identification of risks by each business segment and location, together with the impact that these may have on the business objectives. It also provides a mechanism for categorization of risks into Low, Medium and High according to the severity of risks. The risks identified are regularly reviewed by the internal risk management committee and also by a committee of the Managing Director & CEO of the Company and the relevant senior executives and the appropriate actions for mitigation of risks are advised; the risk profile is updated on the basis of change in the business environment. The Risk Management Committee, periodically reviews the risk management process, risks and mitigation plans and provide appropriate advise in the improvement areas, if any, identified during the review.

For the key business risks identified by the Company, please refer paragraph on Enterprise Risk Management in Management Discussion and Analysis annexed to this Report.

22. Vigil Mechanism for directors and employees: For

Company's policy on establishment of Vigil Mechanism for directors and employees, please refer to the Para VIII - Details of Establishment of Vigil Mechanism for Directors and Employees of the "Corporate Governance Report" annexed to the Directors' Report as Annexure 6.

23. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS

The Directors of the Company are provided opportunities to familiarize themselves with the Company, its Management and its operations. The Directors are provided with all the documents to enable them to have a better understanding of the Company, its various operations and the industry in which it operates.

The roles and responsibilities of the Independent Directors of the Company are informed to them at the time of their appointment through a formal letter of appointment, which also stipulates various terms and conditions of their engagement.

Presentations are made to the Board, where Directors get an opportunity to interact with Senior Management. Directors are also informed of the various developments in the Company through Press Releases, emails, etc. Pursuant to Regulation 25(7) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company organized various familiarization programs for its Directors including Industry Outlook, Presentations on Internal Control over Financial Reporting, Regulatory updates, Prevention of Insider Trading Regulations, Framework for Related Party Transactions, Plant Visit, Meeting with Senior Executive(s) of your Company, Corporate Social Responsibility Strategy etc.

The details of familiarization program (for independent directors) are disclosed on the website of the Company at the web-link: "https://www.welspuncorp.com/" under the tab "Investors -> Company Policies". https://www.welspuncorp.com/uploads/investor_ data/investorreport__1209.pdf During the reporting year, on a cumulative basis, the independent directors spent ~ 195 hours on several familiarization program. During the year, the Company also conducted a separate sessions on ESG familiarization, new business familiarization for directors as part of the committee meetings.

24. CODE OF CONDUCT

Your Company has a Code of Conduct for the Board members and Senior Management Personnel. The Company's Code of Conduct outlines the commitment to principles of integrity, transparency, conflict of interest and fairness that employees, suppliers, distributors and other third parties who work with the Company must comply.

Aside this, your Company also has clearly defined policies and procedures, covering areas such as Anti-Bribery and Anti-Corruption, Retention and Monitoring of Third-Party Representatives, Gifts, Travel and Accommodation (Boarding and Lodging), Meals, Entertainment and Other Hospitality, Charitable Contributions and Sponsorship Involving Government Officials or Government Entities, Political Contributions, Suppliers, Vendors & Other Third Parties, specifically recommended by Government Officials, Employment Requests from Government Officials, Facilitating Payments.

A copy of the Code has been put for information of all the members of the Board and management personnel on the website of the Company at the web-link: "http:// www.welspuncorp.com" under the tab "Investors -> Company Policies".

https://www.welspuncorp.com/uploads/investor_ data/investorreport_117.pdf

All the members of the Board and the Senior Management Personnel have affirmed compliance with 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 and the Senior Management Personnel, affirmation that they have complied with the Code of Conduct for the FY 2023-24."

Sd/-

Vipul Mathur

Managing Director& CEO DIN:07990476

25. MISCELLANEOUS DISCLOSURES

a) During the year under Report, there was no change in the general nature of business of your Company.

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

c) Except as mentioned in the Para XVII(c) - NonCompliance of the Corporate Governance Report which state that the Company had paid a penalty of INR 2,360 for delay of submission under Regulation 50 (1) of the SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015 for the Q4 FY 2020-21 and Q1 FY 2021-22 as mentioned in the Annual Report for the financial year 2023-24, no penalty or strictures were imposed on the Company by the Stock Exchanges or SEBI or any statutory authority on any matter related to capital markets, during the last three years.

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

e) Pursuant to the special resolution passed by the shareholders at the 27th Annual General Meeting held on July 29, 2022, the company provided money for purchase of its own shares by the trust/trustees for the benefit of employees under Welspun Corp Employee Benefit Scheme - 2022. During the year under review, no ESOPs were granted under Welspun Corp Employee Benefit Scheme - 2022 and as such no shares were purchased by the employees under the said Scheme and therefore disclosure of instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014 are not applicable.

f) The Board of Directors affirms that the Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Companies Secretaries of India and that such systems are adequate and operating effectively. The Company has complied with the applicable Secretarial Standards.

g) The Company has not made any one-time settlement for loans taken from the Banks or Financial Institutions, and hence the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable.

h) There was no revision of financial statements and Board's Report of the Company during the year under review.

i) The Company has a detailed Policy on Prevention of Sexual Harassment (POSH Policy) in place in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention,

Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. The POSH Policy is gender inclusive, and the framework ensures complete anonymity and confidentiality.

j) The Company has organised induction training for new joiners, online training and refresher modules, virtual and classroom trainings, emailers and posters to sensitise the employees to conduct themselves in manner compliant with the POSH Policy.

k) The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The ICC comprises of internal as well external members.

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

• number of complaints pending at the beginning of the financial year: Nil

• number of complaints received during the financial year: Nil

• number of complaints disposed-off during the financial year: N/A

• number of complaints pending as at end of the financial year: Nil

m) For detail of the Nodal Officer appointed by the Company under the provisions of IEPF and the web-address on which the details are available, please refer to the Point 11 of Para XIX - General Shareholders Information of the "Corporate Governance Report" annexed to the Directors' Report as Annexure 6.

n) All the policies are reviewed by the Board on an annual basis and changes are made wherever required as per the applicable provisions of the laws, business requirements, uphold the governance standards.

26. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) & 134(5) of the Companies

Act, 2013, your directors hereby confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards had been

followed along with proper explanation relating to material departures;

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

c. the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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 to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

Acknowledgements

Your directors express their deep sense of gratitude to all stakeholder, bankers, business associates, contractors, customers, employees, government authorities, joint venture partners, suppliers for the support received from them during the year and look forward to their continued assistance in future.

For and on behalf of the Board of Directors

Vipul Mathur Balkrishan Goenka
Managing Director & CEO Chairman
DIN :07990476 DIN: 00270175
Place : Mumbai, May 30, 2024 Place : Shanghai, China

The Directors' Report, the Corporate Governance Report, the Financial Statements and the Annexures, Schedules thereto should be read in conjunction. For ease of reading related matters together and avoiding repetition, certain disclosures have been clubbed together and disclosed at one place instead of disclosing the same at different place/s.