The Members, Welspun Corp Limited
Your directors have pleasure in presenting the 19th Annual Report of your Company along with the Audited Financial Statement for the financial year ended March 31,2014.
Production and processing activities highlights for the year under report on standalone basis are as under:
- Plates:9,773MT(260,247MT).This shows lesser captive consumption of plates for manufacturing.
- H.R. Coils: 12,743MT(209,546MT).This shows lesser captive consumption of coils for manufacturing.
- Coating:3,762Ksqm(4,142Ksqm).This shows less demand for coated pipes.
(For the above aspects on consolidated basis, refer the Management Discussion and Analysis included in the Annual Report)
Finance Costs reduced mainly due to conversion of Compulsorily Convertible Debentures (CCD) into equity shares during previous year, repayment of ECB and part buy back of FCCB.
The Board recommends a dividend @ 10% for the year ended March 31, 2014 i.e. Re. 0.50/- per equity share of Rs.5/- each fully paid-up. In respect of the dividend declared for the previous financial years, Rs. 5.35 million remained unclaimed as on March 31,2014.
SCHEME OF ARRANGEMENT IN THE NATURE OF DEMERGER
The Scheme of Arrangement for restructuring of business by transfer of all the assets and the liabilities of the Other Businesses Division comprising of infrastructure business (including energy, water, road), the direct reduced iron (DRI) business, oil and gas, and EPC contracting business (the "Other Businesses") to Welspun Enterprises Limited (the "Resulting Company"), by the Company with the Appointed Date being April 1, 2012 and the share exchange ratio of 1 (one) equity share of Rs. 10 each fully paid-up of Welspun Enterprises Limited for every 20 (Twenty) equity shares of Rs. 5 each fully paid-up of the Company (the "Scheme") as sanctioned by the Hon'ble High Court of Gujarat at Ahmedabad vide its order dated January 10,2014, has been made effective on January 24,2014.
The long term funds of Rs. 13,428 million raised during the earlier financial years by issuing Secured Non-Convertible Debentures have been utilized partly for capital expansion and long term working capital requirement, and pending utilization, the balance has been invested in liquid securities.
Out of US$150 million Foreign Currency Convertible Bonds ("FCCB") issued by the Company during the financial year 2009-10, the Company has bought back and cancelled FCCB of US$ 75 million till the end of the year under review (out of which US$ 6.50 million was bought back during FY 2013-14). The FCCBs outstanding as at the end of the year under review were US$75 million. The proceeds have been utilized for the purpose for which the same was raised, and pending utilization, the balance is lying in bank accounts outside India.
Since the last report, no change took place in the Board of Directors.
In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Rajesh Mandawewala, is retiring by rotation at the forthcoming Annual General Meeting and being eligible, has been recommended for re-appointment. Pursuant to the provisions of Section 150(2) read with Section 149(10) of the Companies Act, 2013, shareholders' approval is sought for the appointment of Mr. Rajkumar Jain, Mr. K.H.Viswanathan, Mr. Ramgopal Sharma, Mr. Nirmal Gangwal and Ms. Revathy Ashok as Independent Directors of the Company for a term of five consecutive years, at the forthcoming annual general meeting. Details about them are given in the Notice of the forthcoming Annual General Meeting being sent to the members along with the Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, your directors hereby confirm that:
(i) in the preparation of the accounts for the financial year ended March 31, 2014, the applicable accounting standards have been followed and there are no material departure from the same;
(ii) the Directors have 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 as at the end of the financial year and of the loss of the Company for the year under review;
(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the Directors have prepared the accounts for the financial year ended March 31,2014 on a going concern basis.
M/s. MGB & Co., Chartered Accountants, the Auditors retire at the conclusion of the forthcoming Annual General Meeting and have expressed their unwillingness to be reappointed for a further term.
Hence, the Board of Directors, based on the recommendations of the Audit Committee, propose the appointment of M/s. Price Waterhouse, Chartered Accountants (Firm Reg. No. (012754M), as the Statutory Auditors of the Company to hold office as such upto the conclusion of the 25th Annual General Meeting in place of the retiring Auditors, M/s. MGB & Co., Chartered Accountants, to audit the accounts of the Company for the financial year 2014-15 to 2019-20 subject to ratification by the Members of the Company at every Annual General Meeting.
M/s. Price Waterhouse has confirmed that if appointed, then their said appointment would be in pursuance to the provisions of Section 139 of the Companies Act, 2013.
The Auditors' observation read with Notes to Accounts are self-explanatory and therefore do not call for any comment.
COST AUDIT REPORT
The Company had appointed M/s. Kiran J. Mehta & Co., Cost Accountants (Firm Registration No. 000025) as the Cost Auditors of the Company for the financial year 2013-14. The Cost Audit Report for the year 2012-13 was -e-filed on August 19, 2013. The Cost Audit for the financial year 2013-14 is in progress and the report will be e-filed to Ministry of Corporate Affairs, Government of India, in due course.
THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988
In terms of the above Rules, your directors are pleased to give the particulars as prescribed therein in the Annexure, which forms a part of the Directors' Report.
PARTICULARS OF EMPLOYEES
As per the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rule, 1975 as amended, the names and other particulars of the employees are set out in the Annexure to the Directors' Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and the Accounts are being sent to all the members of the Company excluding the aforesaid information. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure forming part of Directors' Report.
The Ministry of Corporate Affairs vide its General Circular No. 2/2011 dated February 8,2011 (the "Circular") granted general exemption to the companies from attaching a copy of the Balance Sheet, the Profit and Loss Account and other documents of its subsidiary companies as required to be attached under Section 212 of the Companies Act, 1956 to the Balance Sheet of the holding company subject to fulfillment of conditions stipulated in the Circular.
Therefore, the said documents of the following subsidiary companies viz. (1) Welspun Pipes Limited, (2) Welspun Tradings Limited, (3) Welspun Pipes Inc, (4) Welspun Tubular LLC, (5) Welspun Global Trade LLC, (6) Welspun Mauritius Holdings Limited, (7) Welspun Middle East Pipe Coatings Company LLC, (8) Welspun Middle East Pipe Company LLC, (9) Welspun Middle East DMCC is not attached to the Annual Report. However, the aforesaid documents relating to the subsidiary companies and the related detailed information will be made available upon request by any member or investor of the Company. Further, the Annual Accounts of the subsidiary companies will be kept open for inspection by a member or an investor at the Registered Office of the Company or the respective subsidiary company. As required under the Circular, a statement containing the requisite information for each subsidiary is attached with this Report.
The Company has not accepted any public deposit within the meaning of the Companies (Acceptance of Deposit) Rules, 1975 and, as such, no amount on account of principal or interest on public deposit was outstanding on the date of the Balance Sheet.
LISTING WITH STOCK EXCHANGES
The Company's equity shares are listed on the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE). The Secured Non-Convertible Debentures are listed on the Bombay Stock Exchange Limited. The Foreign Currency Convertible Bonds and the Global Depository Receipts are listed at Singapore Securities Trading Limited (SGX-ST). Annual listing fees for the year 2014-15 have been paid to BSE, NSE and SGX-ST
A separate report on the Corporate Governance is annexed hereto as a part of this Report. A certificate obtained from the Company Secretary in Practice regarding compliance of the conditions of the Corporate Governance as prescribed under Clause 49 of the Listing Agreement is attached to this Report. A separate report on Management Discussion and Analysis is enclosed as a part of the Annual Report.
CONSOLIDATED FINANCIAL STATEMENTS
As stipulated by the Clause 32 of the Listing Agreement with the Stock Exchanges and Circular No. 2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs under Section 212(8) of the Companies Act, 1956 (as applicable for the Financial Year 2013-14 vide the General Circular No. 8/2014 dated April 4, 2014), the Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards issued by the ICAI. The Audited Consolidated Financial Statements together with Auditors' Report thereon forms a part of the Report.
Your directors thank the Government Authorities, Financial Institutions, Banks, Customers, Suppliers, Shareholders, Employees and other business associates of the Company, who through their continued support and co-operation, have helped as the partner in your company's progress and achievement of its objectives.
For and on behalf of the Board
B. K. Goenka
Date : August 7, 2014