Welspun Enterprises Ltd Directors Report.

To,

The Members,

Welspun Enterprises Limited

The directors have pleasure in presenting the 27th Annual Report of the Company along with the Audited Financial Statements for the financial year ended March 31, 2021.

1. FINANCIAL RESULTS:

( Rs. in lakhs)

Particulars

Standalone

Consolidated

F.Y. 2020-21 F.Y. 2019-20 F.Y. 2020-21 F.Y. 2019-20
Revenue from operations 141,019 176,005 152,951 180,759
Other Income 2,897 5,258 14,201 11,184
Total Income 143,916 181,263 167,152 191,943
Total Expenditure 129,811 159,856 148,455 169,791
Share of profit/ (loss) from associate and joint venture - - (725) (1,878)
Profit Before Tax 14,105 21,407 17,972 20,274
Exceptional Items - - - -
Tax expenses/ (credit) 3,360 5,473 4,954 5,161
Profit for the year 10,745 15,934 13,018 15,113
Other Comprehensive Income 31 15 46 23
Total Comprehensive Income 10,776 15,949 13,064 15,136
Earnings Per Share
Basic (Rs.) 7.22 10.75 8.67 10.04
Diluted (Rs.) 7.17 10.61 8.60 9.91

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

2. PERFORMANCE HIGHLIGHTS:

Performance highlights for the financial year ended March 31, 2021 are as under:

( Rs. in lakhs)

Particulars

Standalone

Consolidated

F.Y. 2020-21 F.Y. 2019-20 F.Y. 2020-21 F.Y. 2019-20
Revenue from Engineering, Procurement and Construction (‘EPC’) and other operating income 141,019 176,005 151,777 179,414
Toll Collection - - 1,174 1,345

SINCETHELASTREPORT THEFOLLOWING DEvELOPMENTS TOOk PLACE:

ROAD PROJECTS:

Acquisition of Mukarba Chowk Panipat

BOT (Toll) project of National Highways Authority of India ("NHAI") under Harmonious Substitution which added over

Rs. 2,100 crore to the asset portfolio and

Rs. 1,160 crore to the Order Book. This was a pioneering acquisition as it was the first project to be handled under NHAI’s policy of Harmonious Substitution for stalled projects, and was completed right in the middle of the Covid pandemic.

Despite the COVID-affected environment, the Hybrid Annuity Mode (HAM) projects of Chutmalpur Gagalheri

Roorkee Ganeshpur (CGRG) and Gagalheri Saharanpur Yamunanagar (GSY) successfully achieved Provisional Completion in August 2020 and October 2020 respectively.

National Highways Authority of India declared the Appointed Date for the Sattanathapuram - Nagapattinam project in the State of Tamil Nadu (Hybrid Annuity

Mode) as October 5, 2020 with 4 lane road

& 4 lane structures as against 4 lane road & 6 lane structures specified

Agreement and with current land availability of 29.39 Km (52.71%) as against requirement of 80% without any claim by either party.

Finalised construction contract for the Varanasi Aurangabad road project which at Rs. 2,175 crore will be the largest project executed by WEL so far. However, the contract will come in force and execution will commence only after the descoping proposal submitted by our client is approved by NHAI.

WATER PROJECTS:

The company secured its first major order in this focus sector, being selected to implement rural water supply projects in three divisions in Uttar Pradesh, for a value of around Rs. 1,400 crore which is likely to grow to more than Rs. 2,000 crore.

FINANCING:

Successfully raised Rs. 375 crore through NCDs at 8.85% p.a. during the year.

The proceeds have been utilised to repay existing loans of the Company and for general corporate purposes.

Refinancing of project debt of Chhutmalpur Gagalheri Roorkee Ganeshpur (CGRG) and Gagalheri Saharanpur Yamunanagar (GSY) undertaken which will help SPV reduce the cost of debt from 10.00%-10.25% to about 7.55%-7.75%.

SYSTEMS AND PROCESSES:

SOPs were established for all key functions to ensure a uniform and scalable way of working. The SOPs have also been audited quarterly for compliance.

Apex Committee established to deliberate and decide / recommend on key issues impacting the company’s growth including internal processes, growth strategy, Culture and Risk Management.

Technology: a) Adoption of nPulse, a dedicated MIS platform for recording and updating all project-related information from sites. b) Implementation of PS, FICO, SD, MM and

QM SAP modules across the Company.

Management Assurance function was established to provide an additional layer of scrutiny and audit of key execution-related functions and processes.

COvID RESPONSE:

Rapid response activated at company-level intheConcession to minimize business disruptions due to

Covid. Extensive precautions taken at site-level for employee safety, and protocols established for working at home and e locations. offic

3. DIvIDEND & TRANSFER TO RESERvES:

The Board is pleased to recommend a dividend

@ 15% for the year ended March 31, 2021, i.e.,

Rs. 1.50/- per equity share of Rs. 10/- each fully paid up out of the net profits. In respect of dividend declared during the previous years, Rs. 44.50 lakhs remained unclaimed as on March 31, 2021.

The Company has appointed Ms. Priya Pakhare, Company Secretary as the Nodal Officer for the purpose of co-ordination with Investor Education and Protection Fund Authority. Details of the Nodal Officer are available on the Company at www.welspunenterprises.com.

As per the Dividend Distribution Policy of the Company, the Board endeavors to achieve distribution of an amount of profit subject to maximum of 25% of Profit year, on consolidated basis or standalone basis, whichever is higher. The amount of dividend together with the Dividend Distribution Tax for the year ended March 31, 2021 works out to 20.78% of Profit After Tax on standalone basis.

The Policy is available on the website of the

Company at "https://www.welspunenterprises. com" under the tab "Investor Relations Policy".

4. INTERNAL CONTROLS:

The Company has adequate internal control system, which is commensurate with the size, scale and complexity of its operations.

The 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 the

Company’s operation.

5. SUBSIDIARIES/ JOINT VENTURES/

ASSOCIATE COMPANIES:

The Company subscribed to 70% of the equity share capital of Welspun-Kaveri Infraprojects JV Private Limited which was incorporated on May 10, 2021.

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

The Company’s policy on Material Subsidiary as approved by the Board is uploaded on the website of the Company at "https:// www.welspunenterprises.com" under the tab "Investor Relations Policy".

6. AUDITORS AND AUDITORS’ REPORT:

a) Statutory Auditors

The appointment of M/s. MGB & Co.

LLP, Chartered Accountants (having Firm Registration Number with the Institute of Chartered Accountants of India -

101169W/W-100035) as the Statutory

Auditors of the Company for a second term of 5 (five) consecutive years to holdoffice from conclusion of the 26th Annual General Meeting until the conclusion of 31st Annual General Meeting at remuneration of Rs. 3.2 million plus applicable taxes and out-of-pocket expenses was approved at the Annual General Meeting held on June 30, 2020. They are holding a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

It was proposed to continue with the appointment of M/s. MGB & Co. LLP, Chartered

Accountants as Statutory Auditors of the Company for the period commencing from the conclusion of the 27th Annual General Meeting until the conclusion of 28th Annual General Meeting at revised remuneration of Rs. 3.68 million p.a. plus applicable taxes and out-of-pocket expenses.

Members are requested to approve revision in remuneration of the Statutory Auditors as recommended by the Board, by passing an ordinary resolution under Section 139 of the Companies Act, 2013.

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 Rs. 75.72 lakh.

The Auditors’ observation, if any, read with Notes to Accounts are self-explanatory and therefore do not call for any comment.

b) Cost Auditors

Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors)

Rules, 2014, the Board of Directors of the Company, on the recommendation of the Audit Committee, has appointed

M/s. Kiran J. Mehta and Co., Cost Accountants (Firm Registration Number 000025) as the Cost Auditors of the Company for the financialyear 2021-22. Members are requested to ratify their remuneration by passing an ordinary resolution.

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 the financial year 2020-21. The Cost Audit Report for the year 2019-20 was e-filed on September 7, 2020. The Cost Audit for the financial year 2020-21 is in progress and the report will be e-filed to Ministry of Corporate Affairs, Government of India, in due course.

c) Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and

Remuneration of Managerial Personnel)

Rules, 2014, the Board of Directors of the Company had appointed M/s. Mihen Halani

& Associates, Company Secretaries, as the Secretarial Auditors of the Company for the financial year 2020-21.

The Secretarial Audit Report for the financialyear ended March 31, 2021 is annexed with the report as Annexure 2. There is no qualification, reservation or adverse remark or disclaimer made by the Company Secretary in Practice in the

Secretarial Audit Report.

The Board of Directors has appointed

M/s. Mihen Halani & Associates, Company

Secretaries as the Secretarial Auditors of the Company for the financialyear 2021-22.

For the financialyear, Welspun Road Infra

Private Limited is the material subsidiary of the Company. The Secretarial Audit

Report of the material subsidiary does note contain any qualification or adverse remark and is annexed herewith and marked as

Annexure 3 of this Report.

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

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

7. SHARE CAPITAL & DEBT STRUCTURE &

ITS LISTING: a) Increase in authorized share capital

The increase in authorized share capital of the Company from Rs. 18,005 lakh to 27,500 lakh was approved at the Annual General Meeting held on June 30, 2020.

b) Issue of equity shares with differential rights

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

c) Issue of sweat equity shares

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

d) Issue of employee stock options

During the financial year 2020-21, 4,06,000 equity shares were allotted to the ESOP grantees who had exercised the option attached to the Welspun Enterprises Limited

Employees Stock Option Plan-2017" ("WEL ESOP Scheme 2017").

The applicable disclosures as stipulated under Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014 read with SEBI circular no. CIR/CFD/ POLICY CELL/2/2015 dated June 16, 2015 with regard to WEL ESOP Scheme 2017 are available on the website of the Company at "https://www.welspunenterprises.com" under the tab "Investor Relations Policy".

The particulars required to be disclosed pursuant to the SEBI (Share Based Employee

Benefits) Regulations, 2014 and Rule 12(9) of the Companies (Share Capital and

Debentures) Rules, 2014 are given below:

Particulars WEL ESOP Scheme -2017
a Options granted during FY 2020-21 Nil
b Options vested during FY 2020-21 600,000
c Options exercised during FY 2020-21 406,000
d Total number of shares arising as a result of exercise of Options 406,000
e Options lapsed Nil
f Exercise Price Nil
g Variation of terms of options Date of vesting of the last tranche was changed from 10.10.2022 to 14.07.2022 pursuant to approval of shareholders obtained at Annual General Meeting held on August 14, 2018
h Money realized by exercise of options Nil
i Total number of options in force 16,69,000

 

j Employee wise details of options granted to Key Managerial Personnel
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. No fresh option was granted during the year.
Employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant.

 

k Diluted Earnings Per Share (Rs.) 7.17
l Weighted-average exercise price (Rs.) Nil
m Weighted-average fair values of options (Rs.) - (As per Black Scholes Valuation model) 139.30

e) Provision of money by Company for purchase of its own shares by employees or by trustees for the benefit of employees

The Company has not made any provision of money for the purchase of, or subscription for, shares in the 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 the Companies (Share Capital and Debentures) Rules, 2014 is not required.

f) Issue of debentures

During the year, the Company allotted Secured Redeemable Non-Convertible Debentures (NCDs) of face value of Rs. 10,00,000/- each by way of private placement basis as detailed below:

ISIN Coupon Amount issued (Rs. in Crore) Date of allotment Redemption date/ Schedule Credit rating
1. INE625G07010 8.85% 175 May 27, 2020 May 27, 2023 BWR AA-
2. INE625G07028 8.85% 100 June 1, 2020 June 1, 2023 BWR AA-
100 June 1, 2020 December 1, 2022 Acuite AA-

g) Listing with the stock exchanges i. The Company’s equity shares are listed on the BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE).

ii. The Company has listed rated secured redeemable non-convertible debentures of Rs. 375 crore on the wholesale debt market segment of BSE Limited.

iii. As at March 31, 2021, outstanding unsecured Commercial Papers ("CPs") stood at Rs. 50 crore which are listed on the National Stock Exchange of India.

Annual listing fees for the year 2021-22 have been paid to BSE and NSE.

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

The details of unclaimed shares account as required to be disclosed pursuant to Point F to Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are as under:

Aggregate number of shareholders and the outstanding shares in the unclaimed shares account lying at the beginning of the year Number of shareholders who approached issuer for transfer of shares from unclaimed shares account during the year Number of shareholders to whom shares were transferred from unclaimed shares account during the year Aggregate number of shareholders and the outstanding shares in the unclaimed shares account lying at the end of the year
No. No. of Shares of Holders No. No. of Shares of Holders No. No. of Shares of Holders No. No. of Shares of Holders
31,224 209 0 0 0 0 31,224 209

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

8. FINANCE:

a) Credit Rating

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

Facilities Rating Agency Credit Rating at the beginning of the year Credit Rating at the end of the year
(i.e. on 01.04.2020) (i.e. on 31.03.2021)
Non - Convertible Debentures Brickwork Ratings / Acuite Ratings & Research Ltd NIL BWR AA-/Acuite AA-
Commercial Papers CARE Ratings Limited / Brickwork Ratings / Acuite Ratings & Research Ltd CARE A1+ / BWR A1+ BWR A1+/Acuite A1+

b) Deposits

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

9. ANNUAL RETURN:

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 on the website of the Company at "https:// www.welspunenterprises.com" under the tab "Investor Relations Policy".

10. CONSERvATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Energy conservation:

In the area of alternate energy, the Company has taken initiatives beyond its normal scope of works. At our Delhi Meerut Expressway

Package-I project, an entire solar power plant of capacity 1050 kW, at an investment of Rs. 7.5 crore has been installed. This power plant, installed on the Yamuna bridge, has generated 11.01 lakh unit of green energy in FY 20-21 to meet the requirements of the complete 8.716 km stretch, thereby reducing the intake from the power grid.

Another initiative to reduce our carbon footprint is the installation of 5,764 LED light bulbs for street lighting at our completed projects i.e. Delhi Meerut, CGRG and GSY, reducing our power consumption.

Technology absorption –

a) nPulse a digital platform adopted for project progress monitoring & quality monitoring which has seamless integration with SAP. This Edge cutting technologies helping to certify subcontractors bills on real time basis.

b) EMSP- Online Project schedule monitoring tool is used to Monitor the project schedules.

c) SAP is a core application for managing & monitoring the sourcing & managing the

Finance & Accounts on real time basis.

d) Home grown MDM Tool is used to manage the error free master data.

e) SAP GRC, which is a modern access controls module is implemented for monitoring the user access risk’s and to reduce the process complexity and cut costs

while protecting organizations reputation and financial well-being.

f) Microsoft SharePoint Document Management System (DMS) is implemented and is being used efficiently for managing the sensitive and vulnerable information within the organization.

g) Application "Stithi" has been developed which is a GPS based technology, is being implemented for recording the Site engineers attendance and their movement all across the project sites. This technology provides better connect and engagement with employees.

During the F.Y. 2020-21, there were no foreign exchange earnings and outgo.

11. CORPORATE SOCIAL RESPONSIBILITY

(CSR):

The key philosophy of all CSR initiatives of the Company is enshrined in the three E’s which have become guiding principles of the CSR initiatives

Education, Empowerment (of Women) and Environment & Health.

The CSR Policy is hosted on the website of the

Company at "https://www.welspunenterprises. com" under the tab "Investor Relations Policy".

Disclosures as required under Rule 9 of the

Companies (Corporate Social Responsibility

Policy) Rules, 2014 are annexed to this Report as Annexure 4.

12. DETAILS OF ESTABLISHMENT OF CODE OF CONDUCT FOR REGULATING, MONITORING AND REPORTING OF TRADING BY INSIDERS:

The Company has a Code of Conduct for Regulating, Monitoring and Reporting of Trading by Insiders ("PIT Policy") for connected persons, designated persons and the insiders as defined under the SEBI (Prohibition of Insider Trading) Regulations, 2015 ("PIT Regulations"). The Policy provide adequate safeguard against victimization. The Audit Committee reviews the Institutional Mechanism for prevention of insider trading. Periodic training sessions are organized for creating awareness amongst the insiders about the PIT Policy and PIT Regulations.

The PIT Policy is hosted on the website of the

Company at "https://www.welspunenterprises. com" under the tab "Investor Relations Policy".

13. DIRECTORS AND kEY MANAGERIAL PERSONNEL:

The Company’s Board comprises of a mix of executive and non-executive directors with considerable experience and expertise across a range of fields such as general management and business strategy.

The details of the directors and their meetings held during the year have been given in the

Corporate Governance Report, which forms part of the Annual Report.

a) Changes in Directors and Key Managerial

Personnel

Since the last report, the following changes took place in the composition of the Board of Directors/ Key Managerial Personnel:

Mr. Ved Mani Tiwari resigned from the position of Deputy Chief Executive

Officer of the Company w.e.f. December 3, 2020.

Mr. Sridhar Narasimhan resigned from the position of Chief Financial of the Company w.e.f. February 19, 2021.

Mr. Anoop Kumar Mittal (DIN - 05177010) was appointed as an Additional (Independent) Director w.e.f. June 16, 2021 for a period of 4 years.

Ms. Dipali Goenka (DIN - 00007199) was appointed as an additional director in the category of Non-Executive Non-Independent Director, liable to retire by rotation, w.e.f. June 16, 2021.

In accordance with the provisions of the Companies Act, 2013 and the

Articles of Association of the Company,

Mr. Sandeep Garg (DIN : 00036419) is retiring by rotation at the forthcoming

Annual General Meeting and being eligible, has been recommended for re-appointment as a director liable to retire by rotation by the Board.

Details about the directors being appointed

/ re-appointed are given in the Notice of the forthcoming Annual General Meeting being sent to the members along with the Annual Report.

b) Declaration by Independent Director(s)

The independent directors on the Board of the Company have given declaration that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 at the time of their respective appointment and there is no change in the circumstances as on the date of this report which may affect their status as an independent director. accounts, Your Board confirms that in its opinion the independent directors fulfill the conditions prescribed under the SEBI (LODR), 2015 and they are independent of the management.

All the independent directors on the Board of the Company are registered with the Indian Institute of Corporate Affairs ("IICA"),

Manesar, Gurgaon as notified by the Central Government under Section 150(1) of the Companies Act, 2013 and as applicable shall undergo online proficiency self-assessment test within the time prescribed by the IICA.

c) Formal Annual Evaluation

The Company followed the evaluation process with specific focus on the performance vis--vis the plans, meeting of challenging situations, performing of leadership role within, and effective functioning of the Board, etc. which was in line with the SEBI Guidance Note on Board Evaluation dated January 5, 2017.

The evaluation process invited through IT enabled platform sought graded responses to a structured questionnaire for each aspect of the evaluation viz. 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.

For the financial year 2020-21, the annual performance evaluation was carried out by the Independent Directors, Nomination and Remuneration Committee and the Board, which included evaluation of the Board, Committees of the Board, Independent Directors, Non-independent Directors, Executive Directors, Chairman, Quantity, Quality and Timeliness of Information to the Board.

Results:

The evaluation results were discussed at the meeting of Board of Directors, Committees and the Independent Directors meeting. The Directors were satisfied with the overall corporate governance standards, Board performance and effectiveness.

The key results are summarized hereinbelow:

Key parameters # of parameters Score %
Board of Directors Board structure and composition Board meeting practices (agenda, frequency, duration) Functions of the Board (Strategic direction etc.) Quantity, quality & timeliness of information Board culture and effectiveness Functioning of Board Committees Director induction and development programs 20 96%
Board Committee Composition, roles & responsibilities and effectiveness of the committee Meeting structure and information flow Contributions to Board decisions 7-10 94 - 97%
Independent Directors Independence from company (no conflict of interest) Independent views and judgement Objective contribution to the Board deliberations 8 95-97%
Chairperson Promoting effective decision-making Encouraging high quality of constructive debate Open-minded and listening to the members Effectively dealing with dissent and work constructively towards consensus Shareholders’ interest supreme while taking decisions. 6 100%
Executive Directors Relevant expertise and commitment Performance vis-a-vis business budget, peers Dealing with challenges Developing leaders 9 94-100%
Non-Executive Non-Independent Director Contribution to the Board discussions with his/her expertise and experience Depth of understanding about the business model and the industry 8 94%

The suggestions and action plan are summarised below:

Board of Directors
Parameters with high score Key focus areas:
Effective corporate governance structure and flow of information from management to Board Quarterly interaction between independent directors and Chairman. [Action plan: Implementation planned from July, 2021 onwards]
Well-informed decision-making process and considers interests of all stakeholders Vacancy in the senior management should be filled at the earliest and update should be provided to the Nomination and Remuneration Committee.
In-depth understanding about key performance drivers, risks and opportunities Board effectiveness in establishing a corporate environment that promotes accountability, high ethical standards, compliance with laws and a corporate culture and value The Company will endeavor to reduce the time of vacancy period.

Board Committees

Parameters with high score Key focus areas:
Oversight on quality of financial reporting process & internal financial controls In addition to compliance with regulatory requirement, quarterly detailed review of subsidiary’s financial performance to be undertaken to enhance governance over subsidiary financials. [Action plan: The management has developed a reporting format to ensure compliance/ adherence with this action plan.]
Establishing transparent board and top management nomination process Transparent mechanism to monitor CSR projects Enhance interaction with management on CSR and stakeholder grievance matters

d) Familiarization program for Independent Directors

The familiarization program aims to provide the Independent Directors with the scenario of the infrastructure industry, the socio-economic environment in which the Company operates, the business model, the operational and financial performance of the Company, significant development so as to enable them to take well-informed decisions in timely manner. The familiarization program also seeks to update the directors on their roles, responsibilities, rights and duties under the Act and other statutes.

The policy on Company’s familiarization program for independent directors is hosted on the website of the Company "https://www.welspunenterprises.com" under the tab "Investor Relations Policy". During the year, a separate session on ESG familiarization was also conducted for Directors as part of the committee meetings.

e) Policy on directors’ appointment, remuneration and other details

The salient features of the Company’s "Nomination and Remuneration Policy" on directors’ appointment, remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 has been disclosed in Point No. "V. NOMINATION AND REMUNERATION COMMITTEE" of the Corporate Governance Report, which forms part of the Annual Report.

f) Number of meetings of the Board

The Board met 8 times during the financial year 2020-21, the details of which are given in the Corporate Governance Report forming part of the Annual Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

g) Committee of the Board of Directors

Information on the Audit Committee, the Nomination and Remuneration Committee, the Stakeholders’ Relationship, Share Transfer and Investor Grievance Committee, Evironmental, Social and Governance and Corporate Social Responsibility Committee and meetings of those Committees held during the year is given in the Corporate Governance Report.

14. vIGIL MECHANISM:

The Company has adopted Whistle Blower

Policy and Vigil Mechanism for its directors and employees and stakeholders in terms of provisions of the SEBI (Listing Obligations and

Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013 and no personnel have been denied access to the Audit Committee.

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

The policy on Whistle Blower Policy and Vigil

Mechanism is disclosed on the website of the

Company "https://www.welspunenterprises.com" under the tab "Investor Relations Policy".

15. LOANS,GUARANTEESANDINvESTMENTS:

Pursuant to Section 186(11)(a) of the Companies Act, 2013, the Company being engaged in the business of providing infrastructural facilities is exempt from the requirement of providing the particulars of loans made, guarantees given or securities provided or any investment made.

16. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All related party transactions that were entered into by the Company during the year under report were on an arm’s length basis and were in the ordinary course of business, to serve the mutual needs and the mutual interest.

For the details of the related party transactions, please refer Note No. 47 of Notes to Accounts to the standalone financial statements.

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

The Company’s policy on dealing with Related

Party Transactions as required under Regulation 23 of LODR is disclosed on the website of the Company at "https://www.welspunenterprises. com" under the tab "Investor Relations Policy".

17. 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 Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)

Rules, 2014 are as under:

i. The ratio of remuneration of

Mr. Balkrishan Goenka, Chairman (Executive) and Mr. Sandeep Garg,

Managing Director, to the median remuneration of the employees of the

Company was 1 : 143 and 1 : 64 (including the value of ESOPs and remuneration from associate company) respectively.

ii. There was no percentage increase in remuneration of each director, Chief

Financial Officer, Company Secretary or Manager during the financial year .

iii. The percentage increase in the median remuneration of employees in the financial year 2020-21 was 4%.

iv. As on March 31, 2021, the Company had 398 permanent employees on its rolls, whereas permanent employees for the Company and its subsidiaries stood at 434 employees

v. Market Capitalization of the Company as on March 31, 2021 was Rs. 161,964 lakhs and as on March 31, 2020 was Rs. 59,012 lakhs.

vi. The share price increased to Rs. 108.80/- (NSE closing Price) as on March 31, 2021 in comparison to Rs. 30 (the rate at which the Company came out with the public issue in the year 2004).

vii. Average percentile increase in the salaries of employees (other than the managerial personnel), and of the managerial personnel, in the FY

2020-21 was ~ 0 % and 0 % respectively.

Higher percentile rise in managerial remuneration viz-a-viz percentile rise in remuneration to the other employees, was to appropriately compensate the managerial personnel for handling key managerial responsibilities in increasingly competitive and challenging business environment.

viii. The Profit before Tax (before exceptional items) of the Company for FY 2020-21 was Rs. 14,105/- lakh whereas Managing Director’s, the Chief Financial Officer’s, and the Company

Secretary’s, remuneration were Rs. 360/- lakhs (includes Rs. 120 Lakh paid from associate company but excluding ESOP); Rs. 175.50/- lakhs (CFO resigned w.e.f. February 19, 2021) and Rs. 18.27/- lakhs respectively.

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

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

Name Designation Age (yrs.) DOJ Annual Current CTC (Rs. in lakhs) Qualification and experience Previous Company Nature of Employment (whether contractual or permanent) % of Equity Shares held in the Company Relative of any Director/ Manager of the company DOL/ Transfer
Balkrishan Goenka Executive Chairman 53 29.05.2015 750# B.Com, 36 Years Not applicable Contractual 0.00 Yes -
Sandeep Garg MD 61 16.07.2012 458.05% BE, 39 years IL&FS Contractual 1.36 No -
Ved Mani Tiwari Director & Business Head 52 01.04.2020 450.00 BE/MBA, 31 Years Sterlite Power Permanent 0.00 No 03.12.2020
Akhil Jindal Director* 51 01.07.2015 326.88 BE & MBA, 27 years S Kumar Group Permanent 0.19 No -
Sridhar Narasimhan President 49 18.05.2020 250.00 CA/ICWA, 25 Years Reliance Infrastructure Ltd. Permanent 0.00 No 19.02.2021
Deepak Chauhan Director* 49 01.09.2017 231.39 B Com/ LLB/ LLM, 25 years GVK Power & Infrastructure Ltd Permanent 0.03 No -
Jitendra Jain President 50 01.10.2018 193.89 PGD - Finance, 25 Years GMR Permanent 0.00 No 31.08.2020
Banwari Lal Biyani Director* 62 01.08.2014 194.45 AICWA, 42 Years Ispat Industrial Ltd. Permanent 0.00 No -
Asim Chakraborty Director* 60 01.07.2016 178.56 BE, 39 Years Gherzi Eastern Ltd Permanent 0.01 No -
Yogen Lal Director* 54 12.06.2018 150.65 BE, 28 Years D.Thakkar Const. Pvt. Ltd. Permanent 0.00 No -
Rajesh Jain Vice President 52 19.12.2019 103.00 BE, MBA, 30 years SREI Group Permanent 0.00 No
Girish Kharkar Vice President 47 01.10.2020 103.00 BE, PGDCM, 23 years Sterling & Wilson Private Limited Permanent 0.00 No

* Not on the Board of the Company

% Includes Rs. 120 lakhs paid from associate company & Perquisites.

# In addition the Company has provided for commission @2% of consolidated profits in the financial statement of the Company.

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

(Rs. in lakhs)

Particulars Mr. Balkrishan Goenka- Chairman (Executive) Mr. Sandeep Garg – Managing Director
Salary & Allowance 750.00 360.00$
Perquisites Nil 98.05
Commission 2%# Nil
Details of fixed component Nil Nil
Service Contract/Term of appointment 5 years from June 1, 2020 to May 31, 2025 5 years from July 16, 2017 to July 15, 2022
Notice Period (as per Company policy) 3 months 3 months
Severance Fees Nil Nil

 

Stock Options Nil

WEL ESOP – 2017:

No. of ESOPs Date of Grant Date of Vesting Date of Exercise
20,00,000 10.10.2017 At the rate of 20% of the total ESOPs granted at each anniversary from 1st to 4 th anniversary of the date of grant in quantum of 20% of the total ESOPs granted, and the vesting of remaining 20% of the total ESOPs granted shall happen on July 14, 2022. Upto 3rd anniversary from the date of Vesting of ESOPs

# The Company has provided for commission, @ 2% of consolidatedprofits, financialstatement of the Company. the $ Includes Rs. 120 lakhs paid from associate company. c) No remuneration or perquisite was paid to, and no service contract was entered into with, the non-executive directors (including independent directors) of the Company except for the payment of the following sitting fees for attending meetings of Board / Committees of the Board/general meetings for the F.Y. 2020-21.

Sr. Name of the Director Sitting Fees (Rs.)
1. Mr. Mohan Tandon 1,204,000
2. Dr. Aruna Sharma 1,161,500
3. Mr. Raghav Chandra 1,159,000

The above mentioned sitting fees paid to the non-executive directors was in line with the Nomination and Remuneration Policy of the Company. The sitting fees paid to the directors was within the limits prescribed under the Companies Act, 2013 for payment of sitting fees and therefore, prior approval of the members as stipulated under Regulation 17(6) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 was not required.

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

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

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

18. SHAREHOLDING OF THE DIRECTORS OF THE COMPANY AS ON MARCH 31, 2021

Refer Corporate Governance Report for detail of shareholding of directors.

Except as mentioned in the Corporate

Governance Report, none of the other Directors hold any shares in the Company.

19. CORPORATE GOvERNANCE

CERTIFICATE:

The Compliance certificate obtained from M/s. Mihen Halani & Associates, Company

Secretaries, regarding compliance of conditions of corporate governance as stipulated under Part

E of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed with this Report.

20. RISk MANAGEMENT POLICY:

Businesses are facing an environment of unprecedented complexity and uncertainty in view of the impact of pandemic on global macroeconomic and microeconomic fundamentals. Prudent business management practices are the only way companies can pursue the strategic objectives of value creation of all stakeholders. With the above in view, the

Company has constituted an Enterprise Risk Management Committee (ERMC) of senior executives headed by Managing Director of the

Company. The ERMC is continuously scanning strategic, business, financial, regulatory and operational risks which may adversely impact pursuance of the strategic direction the Company has embarked upon.

As part of the Risk Management framework, there are defined Standard Operating Procedures

(SOP) to evaluate risks at various levels and stages of the company at the Enterprise level and at the Project level, both during prebid stage and during the project execution stage. The SOPs envisages identification of specific Enterprise/Project level risks with the probability of occurrence and the impact that these may have on the business objectives and mitigation measures thereof.

For the key business risks identified by the

Company please refer to the Management

Discussion and Analysis annexed to this Report.

21. MISCELLANEOUS:

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

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

During the year under Report, no funds were raised through preferential allotment or qualified institutional placement.

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

Further, during the year under review, an instance of sexual harassment was reported to the Internal Complaints Committee formed under the provisions of the Sexual Harassment of Women at workplace (Prevention, Prohibition and

Redressal) Act, 2013.

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 filed financial year 1

number of complaints disposed of during the financial year 1

number of complaints pending as on end of the financial year Nil

The Board of Directors affirms that the

Company has complied with the applicable Secretarial Standards issued by the Institute of Companies Secretaries of India.

22. DIRECTORS’ RESPONSIBILITY

STATEMENT:

Pursuant to Section 134(3)(c) & 134(5) of the Companies Act, 2013, the Directors hereby confirm that: a. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. the directors 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 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 have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and are operating effectively; and

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

23. ACkNOWLEDGEMENTS:

The directors thank the government authorities, and loss of the Company 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 partner in the Company’s progress and achievement of its objectives.

For and on behalf of the Board of Directors
Balkrishan Goenka
Place: Mumbai Chairman
Date: June 16, 2021 DIN: 00270175