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Directors Report of Welspun Corp Ltd.

Mar 31, 2015

The Members,

Welspun Corp Limited

The directors have pleasure in presenting the 20th Annual Report of your Company along with the Audited Financial Statement for the financial year ended March 31,2015.

1. Financial Results (Rs in million) Standalone For the year ended

Particulars 31.03.2015 31.03.2014

Revenue from operations (Net) 49,489.39 48,676.12

Profit before finance cost, depreciation 4,300.87 4,219.72 & tax

Less : Finance costs 2,128.05 2,239.81

Profit before depreciation & tax 2,172.82 1,979.91

Less: Depreciation/Amortization 2,427.78 2,255.69

Profit before tax for the year (254.96) (275.78)

I Less:Provisionfortaxforearlier year 77.48 -

Current Taxation - -

MAT Credit Entitlement (77.48) -

Deferred Taxation (97.90) (100.36)

Profit/(loss) after tax for the year (after (157.06) (175.42) Minority Interest)

Add : balance brought forward from previous 9,835.49 14,156.03 year

Profit available for appropriation 9,513.45 9,988.28

Transfer to Statutory Reserve - -

Proposed Dividend on equity shares & tax 157.90 153.81

Equity dividend & tax of earlier years - (102)

Balance carried forward to the next year 9,355.55 9,835.49

Consolidated For the year ended 31.03.2015 31.03.2014

Revenue from operations (Net) 84,504.87 77,047.23

Profit before finance cost, depreciation 9.508.03 8,439.16 & tax

Less : Finance costs 2,830.28 2,964.04

Profit before depreciation & tax 6,677.75 5,475.11

Less: Depreciation/Amortization 4.365.04 4,063.01

Profit before tax for the year 2,312.71 1,412.10

Less:Provision for tax for earlier year 77.48 -

Current Taxation 91.52 414.57

MAT Credit Entitlement (77.48) -

Deferred Taxation 85.93 17.01

Profit/(loss) after tax for the year 690.41 733.90 (after Minority Interest)

Add : balance brought forward from 17,290.82 17,705.39 previous year

Profit available for appropriation 17,816.25 17,536.63

Transfer to Statutory Reserve (311.57) (93.01)

Proposed Dividend on equity shares & tax 157.90 153.81

Equity dividend & tax of earlier years - (102)

Balance carried forward to the next year 17,346.78 17,290.82

2. Performance Highlights

Production highlights for the year under report are as under:

Product Standalone F.Y. 2014-2015 F.Y. 2013-2014

Pipes (MT 618,858 618,180

HR. Plates & Coils (MT) 109,147 22,516

Product Consolidated F.Y. 2014-2015 F.Y. 2013-2014

Pipes (MT 1,130,323 1,021,576

HR. Plates & Coils (MT) 109,147 22,516

3. Reserves and Dividend

In view of the losses, the Board does not propose any amount for transfer to general reserves.

The Board is pleased to recommend a dividend for the 10th consecutive year @ 10% for the year ended March 31, 2015 i.e. Re. 0.50/- per equity share of Rs.5/- each

fully paid-up out of accumulated profits. In respect of the dividend declared for the previous financial years, Rs. 4.49 million remained unclaimed as on March 31,2015.

4. Internal Controls

Your Company has adequate internal control system, which is commensurate with the size, scale and complexity of its operations. Your Company has designed and implemented a process driven framework for Internal Financial Control ("IFC") within the meaning of the explanation of Section 134(5)(e) of the Compa- nies Act, 2013. For the year ended March 31, 2015, the Board is of the opinion that your Company has sound IFC commensurate with the nature of its business operations; wherein controls are in place and operating effectively and no material weakness exists. Your Company has a process in place to continuously monitor existing controls and identify gaps and implement new and / or improved controls wherever the effect of such gaps would have a material effect on your Company's operation.

5. Subsidiary/Joint Ventures/Associate Companies and their performance

The Company has 9 subsidiaries. A report on the performance and financial position of each of the subsid- iaries, associates and joint venture companies included in the consolidated financial statement is presented in Form AOC-1 annexed to this Report as Annexure 1.

6. Deposits

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

7. Auditors

A) Statutory Auditors

Your Company's Auditors, M/s. Price Waterhouse Chartered Accountants LLP, who have been appointed up to the conclusion of the 24th Annual General Meeting, subject to ratification by the members of the Company at every Annual General Meeting, have given their consent to continue to act as the Auditors of the Company for the remaining tenure. Members are requested to consider their re-appointment as the Auditors of the Company and to fix their remuneration by passing an ordinary resolution under Section 139 of the Companies Act, 2013.

B) Cost Auditors

M/s. Kiran J. Mehta & Co, Cost Accountants, are proposed to be appointed as the Cost Auditors under Section 148 of the Companies Act, 2013. The members are requested to approve their remuneration by passing an ordinary resolution pursuant to Rule 14 of the Compa- nies (Audit and Auditors) Rules, 2015.

C) Secretarial Auditors

The Board of Directors has re-appointed M/s. M Siroya and Company, Company Secretaries, as the Secretarial Auditor of the Company for the year 2015-16.

8. Auditors' Report

A) Statutory Auditors' Report

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

B) 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 2014-15. The Cost Audit Report for the year 2013-14 was e-filed on August 20, 2014. The Cost Audit for the financial year 2014-15 is in progress and the report will be e-filed to Ministry of Corporate Affairs, Government of India, in due course.

C) Secretarial Audit Report Secretarial Audit Report given by M/s. M Siroya and Company, Company Secretaries is annexed with the report as Annexure 2.

9. Share Capital & Listing

A) Issue of equity shares with differential rights

The Company does not have any equity shares with differential rights and hence disclosures as required in Rule 4(4) of the Companies (Share Capital and Deben- tures) Rules, 2014 are not required.

B) Issue of sweat equity shares

During the year under report, the Company allotted 227,781 equity shares of Rs. 5/- each fully paid-up as sweat equity shares to the Managing Director pursuant to the special resolution passed by the shareholders at the Extra Ordinary General Meeting held on August 6, 2012. The disclosures as required in Rule 8 (13) of Compa- nies (Share Capital and Debentures) Rules, 2014 are as under:

(a) The class of director or employee to whom sweat equity shares were issued - Managing Director

(b) The class of shares issued as Sweat Equity Shares - Equity Shares

(c) The number of sweat equity shares issued to the directors, key managerial personnel or other employees showing separately the number of such shares issued to them, if any, for consideration other than cash and the individual names of allottees holding one percent or more of the issued share capital - 227,781 Sweat Equity Shares in consideration of know-how brought in by him in the Company.

(d) The reasons or justification for the issue - The shares were issued in consideration of the know-how brought in by the Managing Director in the Company.

(e) The principal terms and conditions for issue of sweat equity shares, including pricing formula - Ranking pari-passu in all respect with the existing equity shares and locked-in for a period of three years from the date of allotment i.e. upto March 30, 2018. Issue price is Rs. 127.13 per share as determined under applicable SEBI regulations.

(f) The total number of shares arising as a result of issue of sweat equity shares - 227,781 equity shares

(g) The percentage of the sweat equity shares of the total post issued and paid up share capital - 0.09% post issue and paid-up capital

(h) The consideration (including consideration other than cash) received or benefit accrued to the Company from the issue of sweat equity shares -Know-how brought in by him in the Company

(i) The diluted Earnings Per Share (EPS) pursuant to issuance of sweat equity shares - Rs. (0.60)

C) Issue of employee stock options

During the year under review, the Company has granted stock options to the Managing Director of the Company in terms of the Employment Agreement and the resolu- tion passed by the members of the Company at the Extra Ordinary General Meeting held on August 6, 2012.

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:

a Options granted 2,050,029

b Options vested Nil (excluding vested portion of lapsed Options)

c Options exercised Nil

d Total number of equity shares arising as a result of exercise of Options 2,050,029

e Options lapsed Nil

f Exercise Price Re. 1 per equity share

g Variation of terms and conditions N.A.

h Money realized by exercise of Options Nil (as no Options were exercisable during the year

i Total number of Options in force 2,050,029

j EmplOyee a. Key Managerial Personnel 2,050,029 to the Managing wise details of b. Other employee who receive Director options granted a grant of options to in any Nil one year of option amounting to five percent or more of options granted during that year.

c. Employees who were granted option, during any one year Nil 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 EPS Rs. (0.60) as compared to Rs. (0.67) of last year

l Weighted- Re. 1 per equity share average exercise prices (Rs.)

m Weighted- Rs. 64.97 (as per Black average fair Scholes Model) values of options (Rs.)

Difference in employee compensation cost based on intrinsic value and fair value:

The Company has adopted intrinsic value method for valuation and accounting of the aforesaid stock options as per SEBI (Share Based Employee Benefits) Regulations, 2014.

Had the Company valued and accounted the aforesaid

stock options as per the Black Scholes Model, the net loss for the year would have been lower by Rs. 1.26 million and the diluted earnings per share would have been Rs. (0.59) per share instead of Rs. (0.60) per share.

D) Disclosure of shares held in suspense account under Clause 5A of the Listing Agreement.

E) Listing with the 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 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.

10.Conservation of energy, technology absorption and foreign exchange earnings and outgo.

Conservation of energy

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

- Installation of Variable Frequency Drive at hydro inlet, outlet and OD-3 outlet conveyors at Dahej unit.

- Energy saving - 19,800 Kwh/year - Savings in cost - Rs. 108,900

- Modification In Fo Day Tank Heating Control System at Dahej unit

- Energy saving - 26,062 Kwh/Year o Savings in cost - Rs. 143,342

- Modified Brushing Unit Power Pack PLC Control Logic at Dahej unit.

- Energy saving - 2820 Kwh/year and o Savings in cost - Rs. 15,510

Technology absorption

1. Efforts, in brief, made towards technology absorption, adaptation and innovation - Not Applicable

2. The benefits derived like product improvement, cost reduction, product development or import substitution - Not Applicable

3 In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- Not Applicable

Research and development

1. Specific areas in which R&D is carried out by the Company Pipe Mill at Anjar:

- Development of high strain based pipes in API 5L X70M PSL2 grade

- Development of high wall thick plates of API 5L X70M PSL2 grade pipes

- FBE/DFBE Coating of bends

- 3LPE-3LPP Coating of bends

- Liquid PU Coating of bends

- 5 LPP-7LPP Coating of Pipes for Insulation

Low Application temperature FBE and 3LPECoating for- strain Based design Pipes

High Operating Temperature pipeline - FBE and 3LPP Coating Special designed Conveyor Rollers for High Temperature Coating Stripping System

2. Benefits derived as a result of the above R&D.

Pipe Mill at Anjar: LSAW Pipe Mill qualified for supply of high strain based pipes in API 5L X70M PSL2 grade

3. Future plan of action

Anjar Pipe Mill: Development of API 5L X70M PSL2 plates at Plate Mill for high strain based design pipes.

4. Expenditure on R&D

(a) Capital - Nil

(b) Recurring - Rs. 16.17 million

(c) Total - Rs. 16.17 million

(d) Total R&D expenditure as a% of total turnover - 0.03%

Foreign exchange earnings and outgo:

5. Total foreign exchange used and earned.

Used : Rs. 38,679.43 million

Earned : Rs. 35,943.71 million

Including foreign exchange earned and used by the wholly owned subsidiary of the Company in India viz Welspun Tradings Limited.

11. Corporate Social Responsibility

Disclosures as required under Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed to this report as Annexure 3.

12. Directors and Key Managerial Personnel

A) Changes in Directors and Key Managerial Personnel Since the last report, no change took place in the Board of Directors and Key Managerial Personnel except the appointment of Mr. Atul Desai as an additional independent director whose term is expiring at the forth- coming annual general meeting. Pursuant to Section 160 of the Companies Act, 2013, the Company has received a notice from a member proposing Mr. Desai for appoint- ment as a director of the Company. Accordingly, a resolu- tion proposing his appointment has been included in the notice convening the annual general meeting. Mr.Desai meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Balkrishan Goenka and Mr. Utsav Baijal are retiring by rotation at the forthcoming Annual General Meeting and being eligible, they have been recommended for re- appointment by the Board.

Details about the directors being appointed / re-appoint- ed are given in the Notice of the forthcoming Annual Gen- eral Meeting being sent to the members along with the Annual Report.

B) Declaration by an Independent Director(s)

The independent directors have individually declared to the Board that they meet the criteria of independence as provided in 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.

C) Formal Annual Evaluation

The evaluation process was led by the Chairman of the Nomination and Remuneration Committee with specific focus on the performance vis-a-vis the plans, meeting challenging situations, performing leadership role within, and effective functioning of the Board. The evaluation process invited, through IT enabled platform, graded responses to a structured questionnaire for each aspect of 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 2014-15, the annual performance evaluation was carried out 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. The independent directors evaluated all non-independent directors, the Board, the Committees, the Chairman and the information to the Board. The Nomination and Remuneration Committee and Board evaluated performance of the independent directors, the Board itself, the Chairman, the Executive Directors, the Committees of the Board, the information provided to the Board. All results were satisfactory.

D) Committees of the Board of Directors Information on the Audit Committee, the Nomina- tion and Remuneration Committee, the Stakeholders' Relationship, Share Transfer and Investors' Grievance Committee and meetings of those committees held during the year is given in the Corporate Governance Report.

13. Particulars of loans, guarantees and investments

Investment in Rs' (in million)

Welspun Captive Power Generation Ltd 230.31

Welspun Mauritius Holdings Ltd. 2,197.80

Standard Chartered Bank PLC IDR 34.77

Rated Bonds issued by Banks/ FIs 5,085.20

"AAA" Rated Corporate Bonds 1,568.40

Total 9,116.48

Corporate Guarantees Rs (in million)

Welspun Energy Ltd. 1,270.00

Welspun Captive Power Generation Ltd. 600.00

Welspun Middle East Pipes Coating LLc 333.44

Welspun Middle East Pipes LLC 2,384.82

Total 4,588.26

The corporate guarantees were given to secure credit capital facilities availed by subsidiaries of the Company and other companies in the group.

14. Particulars of contracts or arrangements with relat- ed parties

All related party transactions that were entered into during the year under report were on an arm's length basis and were in the ordinary course of business. There were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

The Company's policy on Related Party Transactions as approved by the Board is uploaded on the Company's website.

None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.

Disclosures as required under the Companies Act, 2013 are given in Form AOC-2 annexed as Annexure 4 to this Report.

15. Familiarization program for Independent Director

The details of familiarization program (for independent directors) are disclosed on the Company's website and a web link thereto is: http://www.welspuncorp.com/ content.aspRs.Submenu = Y&MenuID=1&Sub- menuID=64

16. Code of Conduct

The Company has Code of Conduct for Board members and senior management personnel. A copy of the Code has been put on the Company's website for information of all the members of the Board and management personnel.

All Board members and senior management personnel have affirmed compliance of the same.

A declaration signed by the Managing Director of the Company is given below:

"I hereby confirm that the Company has obtained from all the members of the Board and Management Person- nel, affirmation that they have complied with the Code of Conduct for the financial year 2014-15."

17. Managerial Remuneration

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

(i) the ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year;

The ratio of remuneration of the MD to the median remuneration of the employees of the Company was: 496.3 times (Including value of ESOP granted & Sweat Equity allotted to him).

(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;

Managing Director : 201.91% (Including value of ESOP granted & Sweat Equity allotted to him )

CFO - 12%

CS - 19%

(iii) the percentage increase in the median remuneration of employees in the financial year; 17%

(iv) the number of permanent employees on the rolls of the Company; 2,972

(v) the explanation on the relationship between average in- crease in remuneration and the Company performance;

The revenue growth during the financial year was 2.8% and the net loss reduced by 10.47% over the previous financial year.

The aggregate remuneration of employees other than Key Manageri- al Personnel grew by 13.4% over the previous financial year.

This was in line with the market benchmarks and the Company's policy for attracting and retaining talent.

The aggregate increase in the remuneration* of Key Managerial Personnel was 134% over the previous financial year.

-including value of sweat equity & ESOP granted to the Managing Director.

This was in accordance with the agreement entered in to with the Managing Director as approved by the shareholders at the general meeting held on August 6, 2012.

(vi) comparison of the remuneration of the Key Managerial Personnel against the performance of the Company;

Remuneration to the KMP is 3.42% (including value of ESOP grant- ed & Sweat Equity allotted to the MD) of the EBITDA for 2014-15.

(vii) variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percent- age increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer in case of listed companies, and in case of unlisted com- panies, the variations in the net worth of the Company as at the close of the current financial year and previous financial year;

The market cap of the Company decreased from Rs. 18,077.70 mil- lion to Rs. 14,159.77 million.

The P/ E ratio changed from 100.90 times to 89.75 times.

The share price increased by 276.95% in comparison to the rate at which the Company came out with the public issue in February, 1997 (taking in to consideration the reorganization of capital done in March, 2005)

(viii) 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 circum- stances for increase in the managerial remuneration;

13.4% - aggregate remuneration of employees excluding KMP 134% - aggregate remuneration of KMP (including value of ESOP granted & Sweat Equity allotted to the MD).

Justification: ESOP & Sweat Equity were in accordance with the Agreement entered in to with the Managing Director as approved by the shareholders at the general meeting held on August 6, 2012. Also, Rs. 50 lakhs was paid during the year as arrear pertaining to previous financial year.

(ix) comparison of the remuneration of each of the Key Managerial Personnel against the performance of the Company; Remuneration to the MD - 2.83% (including value of ESOP granted & Sweat Equity allotted to him).;

CFO - 0.52%; and

CS - 0.07% of the EBITDA for 2014-15.

(x) the key parameters for any variable component of remu- neration availed by the directors;

Not applicable

(xi) the ratio of the remuneration of the highest paid director to that of the employees who are not directors but re- ceive remuneration in excess of the highest paid director during the year; and

Not applicable

(xii) affirmation that the remuneration is as per the remuner- ation policy of the Company

Yes, Employees increment in remuneration is based on the individual performance and Company performance for the Financial year.

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

D) Particulars of remuneration to the executive directors including the details of remuneration paid/payable to the executive directors for the financial year 2014-15 are as under:

Name of the Director Mr. Braja Mishra- Managing Director

Salary & Allowance Rs.45.08 million

Perquisites Rs.11.14 million

Commission Nil

Service Contract/Tenure Yes. 5 years from April 26,2012

Performance linked Nil incentives

Notice Period 1 month

Severance Fees Nil

Stock Option :

2,050,029 options issued at a price of Re. 1 carrying right to subscribe for equal number of equity shares of Rs. 5 each fully paid-up. The options shall be vested immediately after expiry of a period of one year from date of grant of options i.e. 24.12.2014. The options can be exercised within 3 (Three) years from the date of vesting.

Pension Nil

Value of Sweat Equity and ESOP Rs. 65.42 million.

No remuneration or perquisite was paid to, and no service contract was entered into with or stock options granted to, but the sitting fees were paid to, the following directors/ nominating institutions for attending meetings of Board / Committees of the Board.

Name of the Director (Rs)

Mr. K. H. Viswanathan 683,000

Mr. Rajkumar Jain 628,000

Mr. Ram Gopal Sharma 678,000

Mr. Nirmal Gangwal 96,000

Mr. Mukul Sarkar (Nominee of Exim Bank) 60,000

Mr. Mintoo Bhandari 310,000

Mr. Utsav Baijal 30,000

Mrs. Revathy Ashok 120,000

Mr. Atul Desai 120,000

The above mentioned sitting fees paid to the non- executive directors was within the limits prescribed under the Companies Act, 2013 for payment of sitting fees. Hence, prior approval of the members as stipulated under Clause 49(M)(C) was not required.

None of the directors had any transaction with the Company.

18. Shareholding of the Directors of the Company as on March 31, 2015

Name of the Director No of shares %

Mr. Balkrishan Goenka 140 -

Mr. Rajesh Mandawewala 200 -

Mr. Braja Mishra 227,781 0.09

Mr. Ram Gopal Sharma 2,100 -

Mr. Nirmal Gangwal 277,074 0.11

Mr. Atul Desai 200 -

Except the above and 2,050,029 Stock Options, carrying right to subscribe for equal number of equity shares, granted to Mr. Braja Mishra-Managing Director, none of the other Directors hold any shares or convertible securities in the Company.

19. Corporate Governance Certificate

The Compliance certificate obtained from M/s. JMJA & Associates LLP, Company Secretaries regarding compliance of conditions of corporate governance as stipulated in Clause 49 of the Listing Agreement is annexed with the report.

20. Risk Management Policy

With its fast and continuous expansion in different areas of businesses across the globe, the Company is exposed to plethora of risks which may adversely impact growth and profitability. The Company recognizes that risk management is of concern to all levels of the businesses and requires a structured risk management policy and process involving all personnel. With this objective the Company had formulated structured Risk

Management Policy thereby to effectively address such risks namely, strategic, business, regulatory and opera- tional risks. The Policy envisages identification of risks by each product segment and location, together with the impact that these may have on the business objectives. It also provides a mechanism for categorization of risks into Low, Medium and High according to the severity of risks. For the key business risks identified by the Company please refer to the Management Dis- cussion and Analysis annexed to this Report.

21. Extract of the annual return

An extract of the annual return in Form MGT-9 of the Companies (Management and Adminis- tration) Rules, 2014 is attached to this report as Annexure 5.

22. Miscellaneous Disclosures:

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 of the Company to which the financial statements relate and the date of the report.

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.

The Company has not made any provision of money for the purchase of, or subscription for, shares in 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 re- quired.

Further, the Board of the Company approved the Poli- cy on Prevention, Prohibition and Redressal of Sexual Harassment of women at workplace at its meeting held on January 27, 2014 and formed the Internal Com- plaints Committee for each location of the Company. No case of sexual harassment was reported to the Internal Complaints Committee during the year under review.

23. Directors' Responsibility Statement

Pursuant to Section 134(3)(c) & 134(5) of the Companies Act, 2013, your directors hereby confirm that:

a. in the preparation of the annual accounts, the applica- ble accounting standards had been followed along with proper explanation relating to material departures;

b. the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as

to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

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

d. the directors had prepared the annual accounts on a going concern basis;

e. being a listed company, the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

Acknowledgements

Your directors thank the Government Authorities, Financial Institutions, Banks, Customers, Suppliers, Shareholders, Employees and other business associ- ates of the Company, who through their continued sup- port 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 of Directors Place: Mumbai Balkrishan Goenka Date: April 28, 2015 Chairman (DIN : 00270175)


Mar 31, 2013

To The Members, Welspun Corp Limited

The directors have pleasure in presenting the 18th Annual Report of your Company along with the Audited Financial Statement for the financial year ended March 31,2013.

FINANCIAL RESULTS (Rs. in millions)

Standalone Consolidated

For the year ended For the year ended

Particulars

31.03.2013 31.03.2012 31.03.2013 31.03.2012

Revenue from operations (Net) 66,321.65 57,697.11 108,700.50 89,765.76

Profit before finance cost, depreciation tax 6,696.73 5,077.55 10,289.04 11,246.40

Less: Finance cost 2,988.98 2,470.96 4,930.77 3,999.24

Gross Profit/ (Loss) 3,707.75 2,606.59 5,358.27 7,247.16

Less: Depreciation/ Amortization 2,289.91 1,843.52 4,761.21 3,515.23

Profit before tax for the year (before exceptional item) 1,417.84 763.07 597.06 3,731.92

Exceptional items 538.20 - 1,090.87 -

Profit before tax for the year (after exceptional item) 879.64 763.07 (493.81) 3,731.92

Less : Provision for taxation

Current Taxation 126.09 71.64 47.19 1,256.06

MAT Credit Entitlement (126.09) (71.64) (133.99) (44.91)

Deferred Taxation 348.78 113.69 477.11 291.62 Profit after tax for the year (after Minority Interest) 530.86 649.38 (703.23) 2,385.43

Add: balance brought forward from previous year 13,510.35 13,415.48 18,296.99 16,466.07

Profit available for appropriation 14,041.21 14,064.86 17,593.76 18,851.50

Transfer to General Reserve 53.09 65.00 56.27 65.00

Transfer to/(from) Debenture Redemption Reserve (321.92) 357.14 (321.92) 357.14

Proposed Dividend on equity shares tax 153.81 132.37 153.81 132.37

Equity dividend & tax of earlier years 0.20 - 0.20 - Balance carried forward to the next year 14,156.03 13,510.35 17,705.40 18,296.99

PERFORMANCE

Production and processing highlights for the year under report on stand alone basis are as under:

- Pipes:631,133MT(473,617MT).

- Plates:260,247MT(399,135MT).This show lesser in digamous procurement to plates for manufacturing.

- H.R.Coils: 209,546MT(107,880 MT). This shows more in digamous procurement of coils for manufacturing.

- Coating:4,142K sqm (2,096 Ksqm).This shows more demand for coated pipes.

- Power: 122,585MWH(173,117MWH).

(For the above as pect son consolidated basis, refer the Management Discussion and Analysis included in the Annual Report)

Depreciation charge for the year under Report increased as compared to the previous year mainly due to capitalization of Offline Pipeline Project at Mandya in Karnataka; full year depreciation effect in respect of LSAW Plant and on increased capital expenditure for enhancing productivity /debottlenecking at Plate and Coil Millat Anjar.

Finance Costs increased mainly on account of interest on increased borrowings in the form of the External Commercial Borrowings and the Non-Convertible Debentures borrowed/ issued during the year under report and charging of interest on foreign currency convertible bonds which were capitalize deadlier as per Accounting Standard 16 on borrowing cost.

Exceptional Items of Rs. 538.20 million is the write off of loan given to Welspun Natural Resources Private Limited (a wholly owned subsidiary of the Company) for contributing the Company''s share in the expenditure for Thailand Block of the joint venture Company viz. Adani Welspun Exploration Limited, which has been relinquished during the year after seismic studies and carrying out detailed diligence.

DIVIDEND

The Board recommends dived end@ 10% for the year ended March 31, 2013 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.5.30 million remained un claimed as on March 31, 2013.

SCHEME OF ARRANGEMENT IN THE NATURE OF DEMERGER

The Board of Directors of the Company has approved, subject to approval under Sections 391 to 394 and Section 100 of the Companies Act, 1956 and other applicable provisions thereof, a scheme of arrangement for restructuring of business by transfer of all the assets and the liabilities of the infrastructure business (including energy, water, road), the direct reduced iron (DRI) business, oil and gas, and EPC contracting business (the "Other Businesses") to Welspun Infra Enterprises Limited (the "Resulting Company", a wholly owned subsidiary of the 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 Infra Enterprises Limited for every 20 (Twenty) equity shares of Rs. 5 each fully paid-up of the Company (the" Scheme").

The Schemes subject to approval of the shareholders and the credit or of both the Companies and also the regulators and the Court.

Your Board expects that the proposed demerger would enable the Companies to focus on and enhance their respective businesses by streamlining the operations; to carry on and conduct their respective businesses more efficiently and synergetic ally; and to pursue different business strategies and raisers ounces for meeting the irrespective grow the requirements.

FUNDSUTILIZATION

During the year under report, the Company has raised funds by issuing Secured Non- Convertible Debentures of Rs. 3,428 million, which have been utilized for the purposes as mentioned in the respective Information Memorandum issued for the issue. Un-utilized proceeds have been invested in liquid securities as at March 31, 2013.

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$68.5 million during the year under review by raising external commercial borrowings and out of internal sources. The FCCBs outstanding as at the end of the year under review were US$81.50 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.

CHANGE IN THE CAPITAL OF THE COMPANY

During the year under review, the equity share capital of the Company increased by : I) 128,375 equity shares due to allotment of shares upon exercise of options under the Employee Stock Option Scheme of the Company; and ii) 35,038,889 equity shares upon compulsory conversion of One Compulsorily Convertible Debenture.

DIRECTORS

Since the last report, the following changes took place in the Board of Directors

(i) Mr. Utsav Baijal (DIN – 02592194) was appointed as a nominee of Insight Solutions Ltd. (the "Investor") w.e.f. November 10, 2012 in terms of the Investment Agreement dated June 29, 2011.

(ii) Mr.B.K.Goenka relinquished from the position of the Executive Chairman w.e.f. August 14,2012.However,he continue das the Non- Executive Chairman.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr.Ram Gopal Sharmaand Mr. Nirmal Gangwal retire by rotation at the forthcoming Annual General Meeting and being eligible, have been recommended for re- appointment.

The term of appointment of Mr. Utsav Baijal expires at the forthcoming Annual General Meeting; the Company has however received notice under Section 257 of the Companies Act,1956 from a member proposing his candidature for the office of director.

Details about these Directors are given in the Notice of the ensuing Annual General Meeting being sent to the shareholders along with the Annual Report.

DIRECTORS ARE SPONSIBILITY 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, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) they 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 at the end of the financial year and of the profit of the Company for the year under review; (iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) they have prepared the accounts for the financial year ended March 31,2013 on a going concern basis.

AUDITORS

Your Company''s Auditors M/s. MGB &Co., Chartered Accountants retire at the ensuing Annual General Meeting and being eligible, have given their consent to act as the Auditors of the Company for the forthcoming tenure. Members are requested to consider their re- appointment as the Auditors of the Company and to fix their remuneration by passing an ordinary resolution under Section 224 of the Companies Act,1956.

AUDITORS''REPORT

The Auditors A observation read with Notes to Accounts are self-explanatory and there for edonotcall for any comment.

COSTAUDITREPORT

The Company had appointed M/s. Kiran J.Mehta&Co., Cost Accountants as the Cost Auditor so the Company. M/s. Kiran J.Mehta & Co., a partnership firm of Cost Accountants, is functioning for last three decades. It started in the year 1977 as a proprietorship concern by Mr. KiranJ.Mehta. Mr. Mehta was awarded Certificate of Meriting, the intermediate as well as the final, examinations of ICWAI at the national level. The firm has it she ad office at Ahmadabad and a Branch at Vadodara.

The Company h as appointed M/s Kiran J. Mehta and Co., (FRN- 000025) Cost Accountants for conducting Cost Audit for the Company for the financial year 2012-13. The Cost Audit for the year is in progress and the report will be e-filed to Ministry of Corporate Affairs, Government of India, in due course. The Cost Audit Report for the year 2011-12 was e-filed on December 26, 2012. The extended due date for e-filing of the Cost Audit report for the year 2011-12 was February 28, 2013.

EMPLOYEE STOCK OPTION SCHEME

The Company has granted stock options to eligible directors and employees of the Company and its subsidiary companies. The particulars required to bed is closed pursuant to Clause 12 of SEBI (Employees Stock Option Scheme) Guidelines, 1999 are given below:

Difference in employee compensation cost based on intrinsic value and fair value:

The Company has adopted intrinsic value method for valuation and accounting of the aforesaid stock options as per SEBI guidelines, and accordingly has accounted credit of Rs. 6.60 million on account of lapse of Options during the year as employee compensation for the year ended March 31, 2013.

Had the Company valued and accounted the at ore said stock options as per the Black Sholes Model, the net profit for the year would have been higher by Rs.5.05 million and the diluted earning supercharge would have been Rs.2.31 per share instead of Rs. 2.29 per share.

Details of stock options as required to be disclosed pursuant to Clause 12 of SEBI (ESOS and ESPS) Guidelines, 1999 are given below:

a Options granted During the year, no Option was granted. The Company has however agreed to grant, subject to approval of the Central Government, 2,050,029 Options over a period of 3 years to the Managing Director.

b Options vested (excluding vested portion of lapsed Options) Nil

c Options exercised 128,375

d Total number of equity shares arising as a result of exercise of Options 128,375

e Options lapsed 246,875

f Total number of Options in force 32,875

g Money realized by exercise of Options Rs. 10.27 million

h The pricing formula Exercise price is to be at 25% discount to the latest available closing market price of the equity shares of the Company, prior to the date of grant.

i Variation of terms and conditions N.A.

j Employee wise details of options granted to

Whole Time Directors o Nil

Employee who re- ceived a grant in any one year of ] option amounting to 5% or more of option granted during that year

o Nil

Employees, who were granted option, during one year, equal to or exceeding 1% of the issued capital (excluding o/s warr- ants & conver- sions) :

o Nil

k Diluted EPS Rs.2.31 as compared to Rs. 2.96 of last year

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 there in the Annexure, which form sap art 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 shareholders of the Company excluding the adores aid information. Any shareholder interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

ENERGY, TECHNOLOGY AND FOR EIGNEXCHANGE

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.

SUBSIDIARY COMPANIES

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 Natural Resources Private Limited, (4) Welspun Plastics Private Limited, (5) Welspun Pipes Inc, (6) Welspun Tubular LLC, (7) Welspun Global Trade LLC, (8) Welspun Mauritius Holdings Limited, (9) Welspun Middle East Pipe Coatings Company LLC, (10) Welspun Middle East Pipe Company LLC, (11) Welspun Middle East DMCC, (12) Welspun Maxsteel Limited, (13) Welspun Infratech Limited, (14) Welspun Road Projects Private Limited, (15) Welspun Projects Limited, (16) Welspun Infra Projects Private Limited, (17) MSK Projects (Himmatnagar By pass) Private Limited, (18) MSK Projects (Kim Mandavi Corridor) Private Limited, (19) Welspun Water In restructure

Private Limited, (20) Welspun Energy Transportation Private Limited, (21) Welspun BoT Projects Private Limited (22) Anjar Road Private Limited, (23) Welspun Infra Enterprises Limited and (24) ARSS Bus Terminal Private Limited will not be attached to the Annual Report. However, the aforesaid documents relating to the subsidiary companies and the related detailed information will bemade 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 in formation for each subsidiary is attached with this Report.

FIXEDDEPOSITS

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 out standing on the date of the Balance Sheet.

LISTINGWITHSTOCKEXCHANGES

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 2013-14 have been paid to BSE, NSE and SGX-ST

CORPORATEGOVERNANCE

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 Clause32 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, 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.

ACKNOWLEDGEMENT

Your directors express and place on record deep appreciation to Financial Institutions, Banks, Government Authorities, Customers, Suppliers and Shareholders of 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 and their families at all levels without which the Company''s Achievement would not have been possible.

For and on behalf of the Board

B.K.Goenka

Place: Mumbai

Chairman

Date: May 30, 2013


Mar 31, 2012

To, The Members of Welspun Corp Limited

The directors have pleasure in presenting the 17th Annual Report of your Company along with the Audited Financial Statement for the financial year ended March 31, 2012.

Financial Results (Rs. in million) Standalone Consolidated For the year ended For the year ended Partlculars 31.03.2012 31.03.2011 31.03.2012 31.03.2011

Income from operations 57,697.11 62,704.03 89,765.76 80,220.75

Profit before interest, depreciation & tax 5,077.55 8,597.00 11,246.40 13,784.02

Less : Finance cost 2,470.96 1,696.72 3,999.24 2,240.27

Gross Profit / (Loss) 2,606.59 6,900.28 7,247.16 11,543.75

Less: Depreciation / Amortization 1,843.52 1,656.65 3,515.23 2,439.47

Profit before tax for the year 763.08 5,263.63 3,731.92 9,104.29

Less : Provision for current taxation / MAT etc. - 1,142.36 1,211.15 1,941.49

Provision for deferred taxation 113.69 476.74 291.62 929.83

Profit after tax for the year (after Minority Interest) 649.38 3,644.52 2,385.43 6,330.25

Add : balance brought forward from previous year 13,415.48 11,074.89 16,466.07 11,439.75

Profit available for appropriation 14,064.86 14,719.41 18.851.50 17,770.00

Transfer to General Reserve 65.00 364.50 65.00 364.50

Transfer to Debenture Redemption Reserve 357.14 463.39 357.14 463.39

Proposed Dividend on equity shares & tax 132.37 475.74 132.37 475.74

Equity dividend & tax of earlier years - 0.30 - 0.30

Balance carried forward to the next year 13,510.35 13,415.48 18,296.99 16,466.07

PERFORMANCE

Production and processing highlights for the year under report on standalone basis were as under:

- Pipes: 473,617 MT (683,132 MT). The decline is mainly on account of executing orders from subsidiary companies.

- Plates: 399,134 MT (396,507 MT)

- H. R. Coils: 107,880 MT (103,456 MT)

- Coating: 2,096 K sqm (852K sqm). This shows more demand for coated pipes.

- Power: 173,117 MWH (219, 803 MWH).

Depreciation charge increased mainly due to capitalization of LSAW Plant and Plate and Coil Mill expansion projects for enhancing productivity / debottlenecking at Anjar.

Finance Costs increased mainly on account of interest on Compulsorily Convertible Debentures issued during the year under report and consideration of foreign exchange difference related to Finance Costs.

DIVIDEND

The Board recommends a dividend @ 10% for the year ended March 31, 2012 i.e. Rs. 0.50/- per equity share of Rs.5/- each fully paid-up. In respect of the dividend declared for the previous financial years, Rs. 5.20 million remained unclaimed as on March 31, 2012.

EXPANSION AND ACQUISITIONS

- Pipe Project in the United States of America

With the belief that the new investments will pave way for the Company to continue on its path of becoming one of the most respected line-pipe companies in the world, the Company through its subsidiary in the US is expanding its facilities at an estimated investment of US$79.65 million to manufacture ERW pipes with a capacity of 175,000 MTPA. With this expansion, the Company's total overall investment would touch US$280 million since inception of the facility in the US. The pipes to be produced by this US facility will primarily be used in the gas and oil industry.

- Acquisition of Welspun Maxsteel Limited

During the year under report, the Company acquired 113,622,058 (87.35%) equity shares of Welspun Maxsteel Limited, (hereinafter referred to as "WMSL"), a company engaged in manufacturing of gas based Direct Reduced Iron ('DRI"), at an aggregate consideration of Rs. 8,042 million under and pursuant to Share Purchase and Investment Agreement dated June 29, 2011 entered into amongst the Company, Insight Solutions Ltd., Welspun Maxsteel Ltd. and Welspun Steel Ltd. Thus, WMSL became a subsidiary of the Company w.e.f. the date of acquisition i.e. August 13, 2011.

FUNDS UTILIZATION

During the year under report, the Company has raised funds by issuing Compulsorily Convertible Debentures of Rs. 7,883.75 million and Global Depository Receipts of Rs. 5,180.85 million. Un-utilized proceeds have been invested in liquid securities as at March 31, 2012.

The long term fund of Rs. 10,000 million raised during the previous financial year 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.

The entire Foreign Currency Convertible Bonds issued by the Company during the financial year 2009-10 is outstanding and has not been converted into equity shares. 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.

DIRECTORS

Since the last report, the following changes took place in the Board of Directors -

(i) Mr. Mintoo Bhandari was appointed as a nominee of Insight Solutions Ltd. (the "Investor") w.e.f. August 18,2011 in terms of the Investment Agreement dated June 29, 2011.

(ii) Resignation of Mr. M. L. Mittal, Executive Director (Finance) w.e.f. September 30, 2011

(iii) Resignation of Mr. Asim Chakraborty, Director (wholetime) w.e.f. October 4, 2011.

(iv) Mr. Rajesh Mandawewala relinquished from the position of the Managing Director w.e.f. April 26, 2012 to hold a senior position at group level.

(v) Mr. Braja Mishra was appointed as the Managing Director w.e.f. April 26, 2012.

Your directors appreciate Mr. M.L.Mittal and Mr.Asim Chakraborty for their services as a member of the Board.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. K.H. Viswanathan and Mr. Rajkumar Jain retire by rotation at the forthcoming Annual General Meeting and being eligible, have been recommended for re-appointment.

Details about these Directors are given in the Notice of the ensuing Annual General Meeting being sent to the shareholders along with 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, 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) they 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 at the end of the financial year and of the profit of the Company for the year under review;

(iii) they 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) they have prepared the accounts for the financial year ended March 31, 2012 on a going concern basis.

AUDITORS

Your Company's Auditors M/s. MGB & Co., Chartered Accountants retire at the ensuing Annual General Meeting and being eligible, have given their consent to act as the Auditors of the Company for the forthcoming tenure. Members are requested to consider their re-appointment as the Auditors of the Company and to fix their remuneration by passing an ordinary resolution under Section 224 of the Companies Act, 1956.

AUDITORS' REPORT

With reference to the Comment No. (xxi) in the Annexure to the Auditor's Report (CARO), we report that the Company has terminated the service of the employee who indulged in malpractices and have taken appropriate legal actions. The Management is of the view that the outcome of the legal action will not have any material adverse implication on the state of the affairs of the Company.

EMPLOYEE STOCK OPTION SCHEME

The Company has granted stock options to eligible directors and employees of the Company and its subsidiary companies.

The particulars required to be disclosed pursuant to Clause 12 of SEBI (Employees Stock Option Scheme) Guidelines 1999 are given below:

Difference in employee compensation cost based on intrinsic value and fair value:

The Company has adopted intrinsic value method for valuation and accounting of the aforesaid stock options as per SEBI guidelines, and accordingly has accounted credit of Rs. 1.51 million as employee compensation for the year ended March 31, 2012.

Had the Company valued and accounted the aforesaid stock options as per the Black Scholes Model, the net profit for the year would have been higher by Rs. 1.18 million and the diluted earnings per share would have been Rs.2.97 per share instead of Rs.2.96 per share.

Details of stock options as required to be disclosed pursuant to Clause 12 of SEBI (ESOS and ESPS) Guidelines, 1999 are given below:

a Options granted During the year, no Option was granted.

b Options vested (excluding vested portion of lapsed Options) 2,090,375 (vested during the year 16,625)

c Options exercised 86,125

d Total number of equity shares arising as a result of exercise of Options 86,125

e Options lapsed 69,750

f Total number of Options in force 408,125

g Money realized by exercise of Options Rs. 6,785,656.25

h The pricing formula Exercise price is to be at 25% discount to the latest available closing market price of the equity shares of the Company, prior to the date of grant.

i Variation of terms and conditions N.A.

j Employee wise Whole Time Directors Nil details of options granted to Employee who received a grant in any Nil one year of option amounting to 5% or more of option granted during that year

Employees, who were granted option, Nil during one year, equal to or exceeding 1% of the issued capital (excluding o/s warrants & conversions) :

k Diluted EPS Rs. 2.96 as compared to Rs. 16.94 of last year

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 Accounts are being sent to all the shareholders of the Company excluding the aforesaid information. Any shareholder 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.

SUBSIDIARY COMPANIES

The Ministry of Corporate Affairs vide its General Circular No. 2 / 2011 dated February 8, 2011 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 Natural Resources Private Limited, (4) Welspun Plastics Private Limited, (5) Welspun Pipes Inc, (6) Welspun Tubular LLC, (7) Welspun Global Trade LLC, (8) Welspun Mauritius Holdings Limited, (9) Welspun Middle East Pipe Coatings Company LLC, (10) Welspun Middle East Pipe Company LLC, (11)

Welspun Middle East DMCC, (12) Welspun Maxsteel Limited, (13) Welspun Infratech Limited, (14) Welspun Road Projects Private Limited, (15) Welspun Projects Limited, (16) Welspun Infra Projects Private Limited, (17) MSK Projects (Himmatnagar Byepass) Private Limited, (18) MSK Projects (Kim Mandavi Corridor) Private Limited, (19) Welspun Water Infrastructure Private Limited, (20) Welspun Energy Transportation Private Limited, (21) Welspun BoT Projects Private Limited, (22) ARSS Bus Terminal Private Limited and (23) Anjar Road Private Limited will not be 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 exemption, a statement containing the requisite information for each subsidiary is attached with this Report.

FIXED DEPOSITS

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 Global Depository Receipts (GDR's) are listed at Singapore Securities Trading Limited (SGX-ST).

Annual listing fees for the year 2012-13 have been paid to BSE, NSE and SGX-ST

CORPORATE GOVERNANCE

A separate report on Corporate Governance is annexed hereto as a part of this Report. A certificate from the Company Secretary in Practice regarding compliance of conditions of 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 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, 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.

ACKNOWLEDGEMENT

Your directors express and place on record deep appreciation to Financial Institutions, Banks, Government Authorities, Customers, Suppliers and Shareholders of 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 and their families at all levels without which the Company's achievement would not have been possible.

For and on behalf of the Board

Place: Mumbai

Date: May 29, 2012 B.K. Goenka

Chairman

 
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