To,
The Members,
Welspun Specialty Solutions Limited
(Formerly known as RMG Alloy Steel Limited)
Your Directors are pleased to present the Forty-First Annual Report together with
Audited Financial Statement of the Company for the year ended March 31, 2023.
1. FINANCIAL RESULTS
(Rs. in Lakhs)
Particulars |
2022-23 |
2021-22* |
Sales and other income |
43,259 |
18,241 |
Profit/(Loss) before interest, depreciation and exceptional items |
3,149 |
74 |
Interest and Financial charges |
3,031 |
1,869 |
Depreciation and Amortization |
1,491 |
1,449 |
Profit/ (Loss) before exceptional items and tax |
(1,374) |
(3,244) |
Profit/(Loss) before tax |
(1,374) |
(3,244) |
*Restated
2. OPERATIONS
Operations of the Company were as under:
Particulars |
2022-23 |
2021-22 |
|
Production |
Sales |
Gross Sales |
Production |
Sales |
Gross Sales |
|
(Qty M.T.) |
(Qty M.T.) |
(Rs.in Lakhs) |
(Qty M.T.) |
(Qty M.T.) |
(Rs.in Lakhs) |
Pipe |
4,541 |
4,059 |
21,390 |
2,837 |
2,915 |
11,878 |
Steel |
16,985* |
6,869 |
20,094 |
5,418* |
1,531 |
4,018 |
Others |
- |
- |
299 |
- |
- |
433 |
Total |
21,526 |
10,928 |
41,783 |
8,255 |
4,446 |
16,329 |
*Includes produced for Captive Consumption
The Company continued on its growth trajectory in FY23.
The Company's one of the major market EU saw a GDP contraction of 0.1% Q1/CY23
(Q4/FY23). However, the
Company continues to calibrate its strategy and accelerate its sales in these markets.
Additionally, the Company has made a strategic plan to enter the USA Market by leveraging
on its product portfolio, market experience and resources in the USA. like Inspite of
numerous challenges including significant sudden imposition of export duty (15%) on
company's products which remained in force for substantial part of the FY23, volatility
faced w.r.t prices of certain key raw materials like nickel, molybdenum, refractories
etc., the Company continued to grow on volumes and kept moving up the value chain. During
the year under review, the Company successfully developed number of new grade materials
and products. These products in form of bars and pipes & tubes were supplied to
leading international & domestic customers, and to projects of national significance.
Some of the major achievements are: l Total order book at the close of the year for
stainless steel bars and pipes & tubes stood at Rs.155 crores and growing. l
The Stainless Steel bar offering size range expanded from erstwhile from 50 - 200mm to now
25 - 350mm in diameter, a unique wide range for the customers. l Received BIS
IS-17875 Certification for seamless pipes
& tubes in addition to IS-6529 (for Blooms / Ingots ) and IS-6603 (for Rolled Bars)
l Successfully developed, produced and delivered new grades including Monel 400
tubes to a large Oil & Gas PSU, HP heater (High Pressure Heater) U-bent tubes in Grade
304N, Ni-Alloy Grade UNS N08825 Pipes amongst others.
The Company now produces a wide spectrum of products in stainless steel segment and
continue to expand this range.
Seamless Pipes & Tubes |
Cast Blooms & Ingots and Rolled Bars |
SS & Ni-Alloy Material Grade |
|
|
Categories |
Schedule Pipe Sizes (B36.19) |
As-Cast Ingots |
Austenitic |
Heat Exchanger Tubes |
Ingot Rolled Bars |
Martensitic |
ISO Pipe Sizes |
As-Cast Blooms |
Ferritic |
Hydraulic & Instrumentation Tubing |
Hot rolled Rounds & RCS |
Super Austenitic |
Hollow Bars |
Forged Rounds |
High Nickel Alloys |
U-bent Tubes |
Bright Bars |
High Alloy Steel |
Square Tubes |
Heat Treated Bars |
Customized Chemistry |
The Company plans to continue its growth journey through technical innovations,
development of new and niche materials, indigenisation efforts for import alternatives,
market geography expansion etc. The Company continues to focus on indigenisation
especially w.r.t projects of National importance and contribute towards the mission of
Atmanirbhar Bharat / Make in India initiative of Government of India.
To achieve all these objectives, the Company will continue to invest into digital &
automation initiatives, training & skill upgradation of its team, focus on reducing
carbon footprint etc.
3. SHARE CAPITAL
The Authorised Share Capital of the Company as on March 31, 2023 was Rs.565,00,00,000/-
(Rupees Five Hundred Sixty Five Crore Only) divided into 55,00,00,000 (Fifty Five Crore)
Equity shares of Rs.6/- (Rupees Six Only) each and 23,50,00,000 (Twenty Three Crore Fifty
Lakh) Preference Share of Rs.10/- (Rupees Ten Only) each. The issued, subscribed and paid
up share capital of the Company stood at Rs.368,95,77,646/- (Rupees Three Hundred Sixty
Eight Crore Ninety Five Lakh Seventy Seven Thousand Six Hundred Forty Six only) as at
March 31, 2023 comprising of 53,00,89,156 (Fifty Three Crore Eighty Nine Thousand One
Hundred Fifty Six) equity shares of Rs.6/- (Rupees Six Only) each fully paid up and
5,09,04,271 (Five Crore Nine Lakh Four Thousand Two Hundred Seventy One) preference shares
of Rs.10/- (Rupees Ten Only) each fully paid up. There was no change in the issued,
subscribed and paid up share capital during the year under review.
4. DIVIDEND
In view of losses during the year, your Directors do not recommend any dividend for the
financial year ended on
March 31, 2023.
5. DIVIDEND DISTRIBUTION POLICY
In terms of the Regulation 43A of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations,
2015 ("the SEBI Listing Regulations"), 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 I '
and is also available on the Company's website at https://welspunspecialty.com/policy.php.
6. TRANSFER TO RESERVE
During the period ended September 2022, the Company reassessed the nature of 12%
Non-Cumulative Redeemable Preference Shares. For reassessment the company had taken
opinions of various consultants and professionals. Based on the analysis they have been
classified as compound financial instrument resulting change in liability portion of the
instruments. Basis the change, the revised liability portion of the instrument as
disclosed under non-current borrowing on April 01, 2021, is Rs. 1,315 lakhs as compared to
the originally reported liability of Rs. 5,090 lakhs, thus an amount of Rs.3775 lakhs was
transferred to Equity component of Non-cumulative redeemable Preference share Reserve
during the year under review. The revised amount of other equity as on April 01, 2021, is
Rs. (24,113) lakhs as compared to the originally reported amount of Rs. (27,888) lakhs.
This change has resulted into an increase in the loss for the year ended March 31,
2022, by Rs. 166 lakhs and Rs 185 lakhs for the year ended March 31, 2023.
7. SUBSIDIARIES, ASSOCIATE AND JOINT VENTURES COMPANIES
The Company does not have subsidiary, associate and joint ventures companies.
8. NET WORTH STATEMENT
The Company's financial statement has been prepared as per Indian Accounting Standards
(Ind AS) prescribed under Section 133 of the Companies
Act, 2013 (the "Act") read with the Companies (Indian
Accounting Standards) Rules, 2015. As per the Ind AS, Non-Cumulative Redeemable
Preference Share Capital is shown as borrowing in the financial statement. However, as per
Sections 2(57), 2(64) and 43 of the Act, the definition of Net Worth includes
'paid-up share capital'' i.e. equity share capital and preference share capital.
Therefore, for the purpose of calculation of Net Worth, Non-Cumulative Redeemable
Preference Share Capital is also considered as a part of the Net Worth.
(Rs. in Lakhs)
Particulars |
31.03.2023 |
31.03.2022 |
Equity Share Capital |
31,805 |
31,805 |
Securities premium collected on Equity |
28,849 |
28,849 |
Share Capital |
|
|
Non-Cumulative |
1,666 |
1,481 |
Redeemable |
|
|
Preference Share |
|
|
Capital |
|
|
Non-Cumulative |
3,775 |
3,775 |
Redeemable |
|
|
Preference share capital adjustment account |
|
|
Retained Earnings |
(61,952) |
(60,561) |
General Reserve |
553 |
553 |
Net Worth |
4,696 |
5,902 |
9. DIRECTORS/ KEY MANAGERIAL PERSONNEL (KMP) a. Board of Directors:
In accordance with the provisions of the Act, and the Articles of Association of the
Company, Mr. Prakashmal Tatia (DIN: 06559106), Non-Executive Non-Independent Director,
will retire by rotation at the 41st Annual General
Meeting and being eligible, has offered himself for re-appointment. The Board has
recommended his re-appointment. self-assessment
During the year under review, Ms. Amita Misra (DIN: 07942122) and Mr. K. H. Viswanathan
(DIN: 00391263) were appointed as the Independent Directors of the Company for a term of
four years from April 27, 2022 till April 26, 2026. Mr. Vipul Mathur (DIN:
007990476) was appointed as a Non-Executive,
Non-Independent Director of the Company with effect from April 27, 2022.
b. Key Managerial Personnel:
During the year under review, Mr. Brijveer Singh was appointed as the Chief Financial
Officer and Mr. Suhas
Pawar (ACS-36560) was appointed as the Company
Secretary and Compliance Officer of the Company, both with effect from October 31,
2022.
Ms. Rashmi Mamtura resigned as the Company
Secretary and Compliance Officer of the Company on September 28, 2022, and Mr. Narendra
Kumar
Bhandari resigned as the Chief Financial Officer of the Company on October 31, 2022.
The Board placed on record its appreciation for the services rendered by Mr. Bhandari and
Ms. Mamtura during their tenure with the Company. c. Declaration by Independent
Directors:
The Company has received declarations from each Independent Director as per the
provisions of Section 149 (7) of the Act and the Regulation 25(8) of the SEBI Listing
Regulations, as amended from time to time, confirminghe / she meets the criteria of
independence as prescribed under Section 149(6) of the Act and Regulation 16 of the SEBI
Listing Regulations. There has been no change in the circumstances as on the date of this
Report which may affect his / her respective status as an Independent Director. The Board
is of the opinion that the Independent Directors of the Company possess requisite
qualifications, highest standard of integrity.
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 Act. As per the proviso to Rule 6(4) of the Companies (Appointment and
Qualification of Directors) Rules, 2014, the Independent Directors of the Company shall
undergo online proficiency as may be applicable, within the time prescribed by the IICA. d.
Annual Evaluation of Board, its Committees and Directors :
The performance evaluation of the Board of Directors, its Committees and of Individual
Directors were conducted by the entire Board (excluding the Director being evaluated) on
the basis of a structured questionnaire which was prepared after taking into consideration
SEBI's guidance note on board evaluation and 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 and governance.
For the financial year 2022-23, the annual performance evaluation was carried out by
the Independent Directors, the 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. All the results were satisfactory to the Board.
e. Meetings of the Board of Directors:
Six (6) meetings of Board of Directors were held during the financial year 2022-23, the
details of which are given in point 2(b) of the "Corporate Governance
Report" annexed to this Report as "Annexure IV". f. Committees
of the Board of Directors
Information on the Audit Committee, the Nomination and Remuneration Committee, the
Stakeholders' Relationship Committee, the Risk Management Committee, as applicable, and
meetings of those committees held during the year under review is given in the
"Corporate Governance Report" annexed to this Report as "Annexure
IV".
There have been no instances where the Board did not accept the recommendations of its
committees, including the Audit Committee.
10. DISCLOSURE AS PER SECTION 197(12) AND RULE 5 (1) OF COMPANIES (APPOINTMENT AND
REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:
The Independent Directors are paid sitting fees at a fixed rate per meeting of the
Board or the Committee attended by them and as such the same can't compare with the
remuneration to the employees.
(i) the ratio of the remuneration of each director to the median
remuneration of the employees of the company for the financial year |
Ratio in case of Mr. Anuj Burakia, CEO& WTD is 1:52 |
(ii) the percentage increase in remuneration of each
Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager,
if any, in the financial year: |
Anuj Burakia |
CEO& WTD |
Nil |
Brijveer Singh |
CFO |
NA* |
Suhas Pawar |
CS |
NA* |
(iii) the percentage increase in the median remuneration of employees
in the financial year: |
Median remuneration decreased by 5.88%. 554 as
on March 31, 2023. |
(iv) the number of permanent employees on the rolls of company |
(v) average percentile increase already made in the
salaries of employees other than the managerial personnel in the last financial year and
its comparison with the percentile increase in the managerial remuneration and
justification thereof and point out if there are any exceptional circumstances for
increase in the managerial remuneration: remuneration (vi) Affirmation policy of the
Company. |
The average increase in remuneration of employees
excluding KMP in last financial year was 6.89%. |
Remuneration paid during the year ended March 31, 2023 was
as per the Remuneration Policy of the Company. |
Notes: (*) Appointed during the year under review.
11. PARTICULARS OF EMPLOYEES
The details of employees of the Company drawing remuneration as prescribed under Rule
5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
is as follows:
Sr. Name No. |
Designation |
Remuneration Drawn During The Year (Rs.) |
Nature of Employment |
Qualification |
Experience (Years) |
Date of Commencement of Employment |
Age |
Last Employment |
% of Equity Shares |
Relative |
1 Anuj Burakia |
CEO & Whole Time Director |
78,40,170 |
Contract |
Chartered Accountant |
21 |
29-July-21 |
43 |
Welspun Group |
0.20% |
No |
2 Sanjay Batra* |
Senior Vice President |
74,42,880 |
Permanent |
Diploma - Mechanical, Post Diploma in Business Administration |
11 |
26-Dec-00 |
55 |
Maharashtra Seamless Ltd |
Nil |
No |
3 Vipul Sutaria |
President |
67,59,234 |
Permanent |
BE - Mechan- ical, PGDBM Marketing |
23 |
11-Oct-21 |
48 |
Saarloha (Erstwhile Kalyani Carpenter) |
Nil |
No |
4 Narendra Kumar Bhandari |
President |
66,64,858 |
Permanent |
Chartered Accountant |
21 |
25-Sep-09 |
62 |
Fata Tanning |
0.00% |
No |
5 Nityanand Shukla |
Vice President |
42,72,214 |
Permanent |
B.Sc, BE - Me- chanical, MBA |
34 |
11-Oct-21 |
56 |
Bhawani Industries Pvt Ltd |
Nil |
No |
6 Anil Kumar Singh Rana |
Assistant Vice President |
32,68,744 |
Permanent |
BE - Electrical |
19 |
05-May-10 |
52 |
Star Wire (In- dia) Limited |
Nil |
No |
7 MV Rajasekhar |
Assistant Vice President |
28,65,529 |
Permanent |
M. Sc (Tech), M.M.S. |
29 |
09-Jun-22 |
54 |
Tubacex Prakash India Ltd |
Nil |
No |
8 Manas Ranjan Dash |
Assistant Vice President |
27,77,043 |
Permanent |
BA, LLB, PGD in HRD |
26 |
29-Nov-19 |
52 |
Enzen Group |
Nil |
No |
9 Avadhesh Kumar Porwal |
General Manager |
24,05,003 |
Permanent |
Diploma - Me- chanical |
25 |
09-Oct-17 |
54 |
Welspun Corp Limited |
Nil |
No |
10 Saubhag Sharma |
General Manager |
27,68,272 |
Permanent |
C.A. |
11 |
02-Jan-12 |
33 |
- |
Nil |
No |
11 Tapash Chakraborty* |
Deputy Gen- eral Manager |
25,66,667 |
Permanent |
B E Metallurgy |
33 |
26-Apr-22 |
55 |
Baramati Specialty Steels Ltd |
Nil |
No |
12 Samir Malhotra |
Retainer Vice President |
25,50,000 |
Permanent |
B E Metallurgy, MBA Sales |
26 |
01-Aug-21 |
53 |
Arora Iron & Steels Ltd as Head Marketing |
Nil |
No |
* resigned / discontinued / employed for part of or during the year.
Remuneration policy and criteria for making payment to Non-Executive Directors:
Pursuant to Section 178 (3) of the Act and provisions of SEBI Listing Regulations, the
Nomination and Remuneration Committee (NRC) and the Board of Directors at their respective
meetings held on 5th February, 2019 had approved and recommended a revamped policy
relating to criteria for determining qualifications, positive attributes and
Independence of Directors, the remuneration for the Directors, Key Managerial Personnel
and other employees.
For the Company's policy on Directors' appointment and remuneration, including criteria
for determining qualifications, positive attributes, independence of a Director and other
matters provided under Sub-section 3 of Section 178 of the Act, please refer to the Para
of the "Corporate Governance
Report" annexed to this Report as "Annexure IV".
12. EMPLOYEE STOCK OPTIONS
The Company have not granted stock options during the year under review, the
disclosures as required under Regulation
14 of the SEBI (Share Based Employee Benefits And Sweat Equity) Regulations, 2021 and
Rule 12(9) of the Companies
(Share Capital and Debentures) Rules, 2014 are as under:
(I) |
A description of each ESOS that existed at any time
during the year, including the general terms and conditions of each |
|
ESOS, including - |
|
|
(a) Name of the ESOP Plan |
RMG Alloy Steel Ltd Employee Stock Options (Senior Management
Personnel) Scheme 2018 |
|
(b) Date of shareholders' approval |
15.05.2018 |
|
(c) Total number of options approved under ESOS |
20,00,000 |
|
(d) Vesting requirements |
The Vesting of ESOPs shall happen at every anniversary of the date of
grant in quantum of 35% and 35% of the total ESOPs granted for the first 2 years and 30%
of the total ESOPs granted shall vest on completion of 2 years 3 months from the date of
grant* |
|
(e) Exercise price or pricing formula |
Nil |
|
(f) Maximum term of options granted |
Upto the third anniversary from the date of Vesting |
|
(g) Source of shares (primary, secondary or combination) |
Primary |
|
(h) Variation in terms of options |
- |
(II) |
Method used to account for ESOS - Intrinsic or fair value. |
Fair Value |
(III) |
Where the company opts for expensing of the options using the
intrinsic value of the options, the differencebetween 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. |
Not Applicable |
(IV) |
Option movement during the year |
|
|
Number of options outstanding at the beginning of the period |
Nil |
|
Options granted |
Nil |
|
Options vested |
Nil |
|
Options exercised |
Nil |
|
The total number of shares arising as a result of exercise of option |
Nil |
|
Options forfeited / lapsed |
Nil |
|
The exercise price |
Nil |
|
Money realized by exercise of options |
Nil |
|
Loan repaid by the Trust during the year from exercise price received |
Not Applicable |
|
Number of options outstanding at the end of the year |
Nil |
|
Number of options exercisable at the end of the year |
Nil |
|
Employee wise details of options granted to:- |
|
|
Senior managerial personnel (including Key Managerial Personnel) |
Nil |
|
Any other employee who receives a grant of options in any one
year of option amounting to 5% or more of options granted during that year |
Nil |
|
Identified employees who were granted option, during any one year,
equal to or exceeding 1% of the issued capital (excluding outstanding warrants and
conversions) of the company at the time of grant. |
Nil |
|
Lock-in period, if any |
Nil |
|
the conditions under which option vested in employees may lapse |
Options which are vested but not exercised; Upon resignation prior to
retirement. |
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. |
Nil |
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 used during Adescription
of the method and significant the year to estimate the fair values of options, including
the following weighted-average information: |
Nil |
Not applicable. |
a) the weighted average values of share price, exercise price,
expected volatility, expected option life, expected dividends, the risk free interest rate
and any other inputs to the model; |
- |
b) the method used and the assumptions made to incorporate the effects
of expected early exercise; |
- |
c) how expected volatility was determined, including an explanation of
the extent to which expected volatility was based on historical volatility; |
- |
d) whether and how any other features of the options granted were
incorporated into the measurement of fair value, such as a market condition. |
- |
Disclosure in respect of grants made in three years prior to IPO under
each ESOS |
Not Applicable |
The Company has complied with the applicable accounting standards. |
|
Company Certificate
Secretaries, Secretarial Auditors of the Company with respect to the implementation of
Welspun Employee Stock Option Scheme 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.
13. DEPOSITS
The Company has not accepted any deposit within the meaning of Chapter V to the Act.
Further, no amount on account of principal or interest on deposit was outstanding or
unclaimed or unpaid as at the end of the financial year under the Report.
14. ANNUAL RETURN
Pursuant to Sections 92 and 134 of the Act read with Rule 12 of the Companies
(Management and Administration) Rules, 2014, the Annual Return in form MGT-7 is placed on
the website of the Company and can be accessed at
https://www.welspunspecialty.com/notice.php.
15. DETAILS OF RELATED PARTY TRANSACTIONS
Details of arrangement entered into with related parties under Section 188 (related
party) pursuant to Rule 8 (2) of the Companies (Accounts) Rules, 2014 are mentioned in
form AOC-2 enclosed as "Annexure II".
The Company's policy on Related Party Transactions as approved by the Board is uploaded
on the Company's website https://www.welspunspecialty.com/policy.php
Save and except as disclosed in the financial statements, none of the Directors had any
pecuniary relationships or transactions vis-?-vis the Company.
Pursuant to Regulation 34 read with Schedule V of the SEBI Listing Regulations, please
refer to note no.40 for details of transactions with Welspun Corp Ltd, being the Holding
Company and hence a related party.
16. AUDITORS AND THEIR REPORTS Statutory Auditors:
M/s. Price Waterhouse Chartered Accountants LLP, Chartered Accountants (Firm
Registration No. 012754N/ N500016) has been appointed as the Statutory Auditors of the
Company, to hold office for a period of 5 (five) years from the conclusion of 40th Annual
General Meeting till the conclusion of 45th Annual General Meeting of the Company, in
terms of the provisions of Section 139 of the Act read with the Companies (Audit and
Auditors) Rules, 2014.
The Statutory Auditors have issued unqualified
Report for the year ended March 31, 2023. The Statutory Auditors' observations read
with Notes to Accounts are self-explanatory and therefore do not call for any
comment.
The Audit Report did not contain any qualifications, reservations, adverse remarks or
disclaimers and no fraud was reported by the Statutory Auditors of the Company to the
Audit Committee pursuant to Section 143(12) of the Act.
Internal Auditors:
M/s. KPMG Assurance and Consulting Services LLP were appointed as the Internal Auditors
of the Company. The internal audit was completed as per the scope defined by the Audit
Committee.
Cost Auditors:
The Company maintains cost records as specified by the
Central Government under sub-section (1) of Section 148 of the Act. As per Section 148
of the Act, the Board of Directors have appointed M/s. Kiran J. Mehta & Co, Cost
Accountants, (Firm Registration No.000025) as the Cost
Auditors for the financial year 2023-24 at a remuneration of Rs.50,000/- p.a. on the
recommendations of the Audit Committee.
The Board recommends ratification of the remuneration payable to the Cost Auditors for
the year ending on March 31, 2024 by the Members at the ensuing Annual General Meeting.
The Cost Auditors' Report did not contain any qualifications, reservations, adverse
remarks or disclaimers and no frauds were reported by the Cost Auditors to the Company
pursuant to Section 143(12) of the Act. The Cost Audit Report for the financial year
2021-22 was filed on September 28, 2022. The Cost Audit Report for the financial year
2022-23 is in progress and the report will be filed with the Ministry of Corporate
Affairs, Government of India, within the statutory timeline.
Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Act read with the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. JMJA &
Associates LLP, Practicing Company Secretaries, has been appointed as the Secretarial
Auditors of the Company for the financial year 2023-24. The Secretarial Audit Report
issued by the erstwhile Secretarial Auditors M/s. Mihen Halani &
Associates for the financial year 2022-23 is annexed herewith as Annexure III'
to this Report.
The Secretarial Audit Report does not contain any qualification, reservation or adverse
remarks and no frauds were reported by the Secretarial Auditors to the
Company under Section 143(12) of the Act., except the reporting on filing of
compounding application by the Company with respect to non-filing of cost audit report for
the financial year 2018-19, as reproduced herein below and which in the opinion of the
Board self-explanatory and does not require further explanation: In respect of a
notice received from the Ministry of
Corporate Affairs-Cost Audit Branch through their e-mail dated December 13, 2022, the
Company has made an application to the Registrar of Companies, Gujarat, for compounding of
offence under section 148 of the Companies Act, 2013 read with Rule 4 of Companies (Cost
Records and Audit) Rules, 2014, for non-filing of Cost Audit Report for the financial year
ended March 31,
2019. The said application was disposed of by the Joint
Director, the Regional Director North-Western Region, Ministry of Corporate Affairs,
Ahmedabad on May 4, 2023, on payment of compounding fees of Rs.1,00,000/- by the Company
and Rs. 25,000/- by the Whole Time Director.'
17. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186.
The Company has not made any investment nor given any loan or provided any guarantee /
security for repayment of loan under Section 186 of the Act.
18. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES
The Board has adopted vigil mechanism in the form of Whistle Blower Policy, to deal
with instances of fraud or unethical behavior or misconduct etc. For the Company's policy
on establishment of Vigil Mechanism for Directors and Employees, please refer to the point
no.13 (iii) of the "Corporate Governance Report" annexed to the this
Report as "Annexure IV".
The details of Whistle Blower Policy and Vigil Mechanism is also available on
the Company's website at https://www.welspunspecialty.com/policy.php.
19. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
OUTGO
The details of conservation of energy, technology absorption, foreign exchange earnings
and outgo required pursuant to the Rule 8(3) of the Companies (Accounts) Rules, 2014 are
given below.
During year under review, the Company has taken various initiatives to conserve energy
and improve technology being used for production as discussed in detail hereunder.
This has helped the Company in its journey on moving up the value chain.
A. Conservation of Energy
(i) the steps taken or impact on conservation of energy; The following are measures
taken during the year under review: The Company has installed Energy Management system
which helps in controlling the excess power drawing from the Grid and optimising of
Induction furnace operations. At any point plant overall power does not cross the set
demand.
Upgradation of Induction Heating PLC Programming to reduce cycle time of furnace.
This has resulted in reduction of power consumption in Press system.
The Company has completed Boiler steam lines insulation work which results into 100%
condensate recovery and reduction in condensate formation.
Replacement of Cooling Tower fills resulting in lower energy consumption.
Installation of new biomass based boiler which has significantly reduced energy
consumption required for FO fired boiler.
(ii) the steps taken by the company for utilizing alternate sources of energy; The
Company has signed agreement for procurement of hybrid (solar +wind) power supply. This
power shall be available from the beginning of the next financial year.
Installed new biomass based boiler in place of FO fired boiler using biomass briquettes
as a fuel source.
(iii) the capital investment on energy conservation equipment; Various energy
conservation equipment were added to the production facility during the year under review
with approximate cost 1.35 crore.
B. Technology Absorption:
(i) the efforts made towards technology absorption;
Polymer quenching technique is adapted for SS Bars quenching in place of oil quenching
technique. This provides a better production quality.
(ii) the benefits derived like product improvement, cost reduction, product development
or import substitution; As a result of shifting from manual to mechanical ID the Company
is able to get uniform glass powder coating inside the billet hence, the quality of
product is improved.
Modified glass lubrication system has reduced overall glass consumption.
Introduction of polymer quenching technique has resulted in higher safety then earlier
technique. (iii) in case of imported technology (imported during the last three years
reckoned from the beginning of the
- financial year)
No technology has been imported during the last three years.
(iv) the expenditure incurred on Research and Development.
The products and process development are undertaken by the Company internally.
C. Capacity Enhancement & Technological Upgradation:
Installed Chamfering machine to chamfer dia upto 80mm.
Developed new tooling for extrusion process to get better throughput.
Installation of new Pickling Crane for handling material.
Installation of new pipe cutting station for increase in pipe cutting capacity.
D. Foreign Exchange Earnings and Outgo
(i) Foreign exchange earned in terms of actual inflows during the year; FOB Value of
exports Rs.15,266 Lakhs (Previous Year Rs.2,272 Lakhs).
(ii) Foreign exchange outgo during the year in terms of actual outflows;
Imports on CIF Basis/ expenditure in foreign currency Rs.4,802 Lakhs (Previous Year
Rs.1,501 Lakhs).
20. CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS
In compliance with Regulation 34 of the SEBI Listing Regulations, a separate report on
Corporate Governance is annexed hereto as a part of this Report as
"Annexure IV". A certificate from the Secretarial Auditors of the
Company regarding compliance of conditions of Corporate Governance as prescribed under the
SEBI Listing Regulations is attached to this report as "Annexure V".
Management Discussion and Analysis is separately given in this Report as "Annexure
VII".
21. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of addressthe Act,financial,your Directors, operational,
based on the representations received from the Operating
Management, and after due enquiry, hereby confirm a) in the preparation of the annual
accounts for the financial year ended March 31, 2023, 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 March 31, 2023 and
of the profit and loss of the Company for that period; c) the directors had taken proper
and for the maintenance of adequate accounting records in accordance with the provisions
of the Act for safeguarding the assets of the company and for preventing and detecting
fraud and other irregularities; d) the directors had prepared the annual accounts on a
going concern basis; e) the directors have laid down internal financial controls to be
followed by the Company and such internal financial controls are adequate and were
operating effectively; and f) the directors had devised proper systems to ensure
compliance with the provisions of all applicable laws and that such systems were adequate
and operating effectively.
22. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to Regulation 34(2) of the SEBI Listing Regulations as amended from time to
time and based on the market capitalization as on the financial year ended
March 31, 2023, the Company is not required to submit the Business Responsibility and
Sustainability Report for the financial year 2022-23.
23. RISK MANAGEMENT
The Company has constituted a Risk Management Committee in compliance with the SEBI
Listing Regulations. The details of this Committee and its terms of reference are set out
in the Corporate Governance Report.
The Board has approved Risk Management Policy
(RMP) to effectively compliance and strategic risk. A structured enterprise that: risk
management program has been formulated and implemented. The Risk Management Committee was
formed and adopted its charter to periodically review the risk management process, risks
and mitigation plans and provide appropriate advise in the improvement areas, if any,
identified during the review.
Please refer to point C of the Management Discussion and Analysis section attached to
this Report for risks and threats relevant to the Company.
24. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTOR
The details of familiarization programme conducted for Independent Directorscare are
disclosed on the website of the Company at link : https://www.welspunspecialty.com/policy.php.
More than 6 hours were spent by the Independent Directors cumulatively in several
familiarization programs during the year under review.
25. CODE OF CONDUCT
The Company has a Code of Conduct for Board Members and Senior Management Personnel.
A copy of the Code has been put on the website of the Company for information of all
the members of the Board and Senior Management Personnel at
https://www.welspunspecialty.com/policy.php. Each Director and Senior Management Personnel
including all functional heads, to which this code has been made applicable, have affirmed
their compliance with the Code.
A declaration by Mr. Anuj Burakia, CEO & Whole Time
Director, to this effect given in the Corporate Governance
Report forms part of this report.
26. PROHIBITION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
In compliance with the requirements of the Sexual Harassment of Women at the Workplace
(Prevention, Prohibition and Redressal) Act, 2013, the Company has put in place a Policy
on Prohibition and Prevention of Sexual harassment of women at the workplace.
The Company has complied with the provisions relating to constitution of Internal
Complaint Committee ("ICC") under Sexual Harassment of Woman at Workplace
(Prevention, Prohibition and Redressal) Act 2013. The ICC comprises of internal as well as
external members.
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 of during the financial year |
Nil |
Number of complaints pending as on end of the financial year |
Nil |
27. INTERNAL FINANCIAL CONTROLS
The Company has adequate internal control system, which is commensurate with the size,
scale and complexity of its operations. The Company has designed and implemented a process
driven framework for
Internal Financial Controls ("IFC") within the meaning of the explanation of
Section 134(5)(e) of the Act, the SEBI Listing Regulations and other relevant statutes
applicable to the Company. The executive management and Internal Auditors continuously
monitors the efficiency of the internal controls / compliance, with the objective of
providing to the Audit Committee and the Board of Directors, an independent, objective and
reasonable and material order was passed assurance of the adequacy and effectiveness of
the organization's risk management, control and governance processes. For the year ended
March 31, 2023, the Board is of the opinion that the Company has sound IFC commensurate
with the nature of its business operations; wherein adequate controls are in place and
operating refer effectively paragraph under caption "internal control system" in
Management Discussion and Analysis forming part of this report.
The Internal Audit is carried by independent external audit firm consisting of
qualified accountants, domain & industry experts, fraud risk and information
technology specialists.
28. MISCELLANEOUS
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.
The Company has not made any provision of money for the purchase of, or subscription
for, shares of the Company or its holding company, to be held by or for the benefit of the
employees of the Company and hence the disclosure as required under Rule 16(4) of
Companies (Share Capital and Debentures) Rules, 2014 is not required.
During the year under review,
There was no change in the general nature of business of the Company;
No material change or commitment has occurred which would have adversely
affected the financial position of the Company between the end of the financial year to
which the financial statements relate and the date of this report;
No share with differential rights was issued by the
Company nor did the Company issue any equity share as sweat equity share;
No fraud took place in the Company during the year under review and hence, no
such reporting was made to the Audit Committee and the Board under Rule 13(3) of the
Companies (Audit and Auditors) Rules, 2014; by No significant the regulators or courts or
tribunals which would have impacted the going concern status and the Company's operations
in future;
No application was made or proceeding initiated against the Company under the
Insolvency and Bankruptcy Code, 2016, nor any such proceeding was pending at the end of
the financial year under review.
29. SAFETY
The Company conducts regularly Safety audit through competent authorities for its
manufacturing facility located at Jhagadia, Bharuch, Gujarat. The Company also organizes
various safety awareness programs to impart safety training to its employees.
30. ACKNOWLEDGEMENT
Your Directors take this opportunity to express gratitude for valuable assistance and
cooperation extended to the
Company by financial institutions, banks, statutory and regulatory authorities,
customers, suppliers and other agencies engaged with the Company. Your Directors also wish
to place on record their sincere appreciation of the dedicated services, hard work,
solidarity and profuse support by all the employees of the Company.
For and on behalf of the Board of Directors
B.K. Goenka |
Anuj Burakia |
Chairman |
CEO & Whole Time Director |
DIN: 00270175 |
DIN: 02840211 |
Place: Mumbai
Date: May 24, 2023
|