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Directors Report of Welspun India Ltd.

Mar 31, 2015

The Members,

WELSPUN INDIA LIMITED

The directors have pleasure in presenting the 30th Annual Report of your Company along with the Audited Financial Statements for the financial year ended March 31,2015.

1. Financial Results: (Rs. in Million)

Particulars Standalone Consolidated

FY 2014-15 FY 2013-14 FY 2014-15 FY 2013-14

Revenue from Operations (Net) 44,076 35,312 53,025 43,730

Other Income 944 1,036 949 1,042

Total Revenue 45,020 36,348 53,975 44,772

Profit before Interest, Depreciation and Tax 11,327 8,113 13,691 10,253

Finance Cost 1,806 1,439 2,829 2,352

Depreciation and amortization expense 2,663 6,227 3,329 6,863

Profit before tax (PBT) 6,857 446 7,533 1,037

Tax Expense 1,756 148 2,090 198

Profit after Taxation (PAT)5,101 298 5,443 838

Earnings per share (EPS) (Basic) (Rs. per share) 50.80 2.98 53.76 9.19

2. Performance and Outlook:

Your Company's 'Revenue from Operations' saw a remarkable growth during the year as shown above recording the growth of 24.82% from the previous year as against the growth of 16.05% in the year 2013-14. Profit figures of your Company are not comparable as your Company's profit for the previous year was after charge of incremental depreciation of Rs. 4,630.96 million caused upon change of method of depreciation. Your Company's regular customers continued replenishment of their inventory. You may refer to 'Management Discussion & Analysis' Section of the Annual Report for further details of your Company's affairs and performance.

3. Reserves, Dividend and Distribution Policy:

The Board proposes that an amount of Rs. 510.14 million be carried to General Reserves. Considering your Company's performance during FY 2014-15, the Board of Directors recommends for approval of the members a dividend of Rs. 7.50 per share for the financial year 2014-15. The dividend, if approved by the shareholders and considering equity shares allotted till the date of this report, would result in total cash outflow of Rs. 753.45 million. During FY 2014-15, your Company declared and paid an interim dividend of Rs. 3 per share resulting in total dividend of Rs. 10.50 per share. The final dividend, if approved by the shareholders, would result, together with the interim dividend already paid, in total dividend payment of Rs. 1,054.73 million. Dividend will be paid to those shareholders, who hold shares on the last day of book-closure i.e. June 24, 2015. During the year, the Board has announced Dividend Policy, under which dividend payout ratio will be 25% of Profit After Tax (PAT).

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 Companies 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 of your Company's operation.

5. Subsidiaries:

During the year, your Company acquired remaining 50% of the paid-up equity share capital of Welspun Zucchi Textiles Limited ("WZTL") and as a result WZTL has become wholly owned subsidiary of your Company. Further, Kojo Canada, Inc. (Canada), a subsidiary of your Company was dissolved during the year. Refer to Annexure 1 for the list of subsidiaries.

A report on the performance and financial position of each of the subsidiary Companies included in the consolidated financial statement is presented in Form AOC-1 annexed to this Report as Annexure - 2.

6. Auditors:

i. Auditors:

Your Company's Auditors, Price Waterhouse Chartered Accountants LLP, who have been appointed up to the conclusion of the 32nd Annual General Meeting subject to ratification by the Members of your Company at every Annual General Meeting, have given their consent to continue to act as the Auditors of your Company for the remaining tenure. Price Waterhouse Chartered Accountants LLP is holding a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. Members are requested to ratify their appointment as the Auditors of your Company and to fix their remuneration by passing an ordinary resolution under Section 139 of the Companies Act, 2013.

ii. Secretarial Auditor:

The Board of Directors has re-appointed Mr. Uday Sohoni, Practicing Company Secretary, as the Secretarial Auditor of your Company for the year 2015-16.

7. Auditors' Report:

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

8. Share Capital & Listing:

i. Issue of equity shares with differential rights, sweat equity shares and ESOPs.

During the year under report, no shares with differential rights were issued by your Company, nor did your Company allot any equity share as sweat equity share. Your Company has adopted intrinsic value method for the valuation and accounting of the aforesaid stock options as per SEBI guidelines. Since the grants were made at an exercise price equal to the closing market price at the time of grant, no amount was required to be accounted as employee compensation cost. The fair value of the options as per the "Black Scholes" model comes to Rs. 17.49 per option. Had your company valued and accounted the aforesaid options as per the "Black Scholes" model, the employee compensation cost would have been higher by Rs. 0.15 million, the Profit after tax for the year would have been lower by Rs. 0.15 million, the basic earnings per share would have been lower by Re. 0.001. Refer to Note 39 of the audited financial statements for other details including significant assumptions used during the year to estimate the fair values of options. Your Company did not grant any stock option during the year.

iii. Listing with the stock exchanges:

Your Company's equity shares are listed on Bombay Stock Exchange Limited (BSE) and The National Stock Exchange of India Limited (NSE). The Secured Non-Convertible Debentures of your Company are listed on NSE. Annual listing fees for the year 2015-16 have been paid to BSE and NSE.

9. Finance:

i. Credit Rating:

During the year, your Company has been assigned a Long-Term Issuer Rating of "IND AA -" (Outlook Stable) by India Ratings & Research, a Fitch group Company.

ii. Non-convertible Debentures:

During the year, your Company has allotted 1,000 debentures on March 31,2015 aggregating to Rs. 1 billion, redeemable at the end of 3 years of the date of allotment and carry interest rate of 10.40% p. a. payable half yearly. Your Company has the option to redeem the debentures any time after the expiry of 15 days from deemed date of allotment at par.

iii. Utilisation of proceeds from issue of non- convertible Debentures:

Proceeds of Rs. 1 billion raised by issue of non- convertible debentures on March 31, 2015 have been parked in liquid investments pending utilisation.

iv. Deposits:

Your 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.

10. Extract of the annual return:

An extract of the annual return in Form MGT-9 of the Companies (Management and Administration) Rules, 2014 is attached to this report as Annexure - 1.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the annexure attached herewith as Annexure - 3.

12. Corporate Social Responsibility (CSR):

Disclosures as required under Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014 are annexed to this report as Annexure 4.

13. Board of Directors:

Your Company's Board comprises of mix of Executive and Non-Executive Directors with considerable experience and expertise across a range of fields such as finance, accounts, legal and general management and business strategy. Except the nominee appointed by IDBI Bank and the independent directors, all other directors are liable to retire by rotation as per the provisions of the Companies Act, 2013. It is confirmed that, except for Mr. Balkrishan Goenka and Ms. Dipali Goenka who are husband and wife, there is no relationship between the directors inter-se. The details of the Directors and their meetings held during the year have been given in the Corporate Governance Report, attached herewith, which forms part of this Directors' Report.

i. Changes in Directors and Key Managerial Personnel:

Mr. Dadi Engineer, independent director, has resigned with effect from April 29, 2015. Mr. Engineer has been associated with your Company for almost 24 years. The Board of Directors places on record its appreciation for valuable contributions provided by Mr. Engineer as a director.

Mr. Altaf Jiwani was appointed as the Chief Financial Officer upon which Mr. Rajesh Mandawewala, who was handling dual role of Managing Director and Chief Financial Officer was relieved from his role as Chief Financial Officer.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of your Company, Ms. Dipali Goenka is retiring by rotation at the forthcoming Annual General Meeting and being eligible, has been recommended for her re- appointment.

Details about the directors being appointed / re- appointed are given in the Notice of the forthcoming Annual General Meeting.

ii. Declaration by an Independent Director(s) and re- appointment, if any:

The independent directors on the Board of your Company met 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 respective status as an independent director.

iii. Directors' 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.

iv. Committees of the Board of Directors:

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

14. Vigil mechanism:

Your Company has a Whistle Blower Policy and Vigil Mechanism for its directors and employees and any director or employee may make protected disclosures to the Audit Committee. No personnel have been denied access to the Audit Committee.

15. Loans, guarantees and investments

Information of aggregate amounts of loans, guarantees given, or investments made, by your Company is as given under:

Loans referred to above have been given to Welspun Anjar SEZ Limited ("WASEZ"), 100% subsidiary of your Company which was utilized for land related expenses. Corporate Guarantee of Rs. 90 Crore was given to secure term loan availed for setting up of captive power plant by Welspun Captive Power Generation Limited ("WCPGL"), a subsidiary of your Company. Other corporate guarantees were given to secure working capital facilities availed by other subsidiaries of your Company.

16. Particulars of contracts or arrangements with related parties:

All related party transactions that were entered into during the year under report were on an arm's length basis and were in the ordinary course of business. There were no materially significant related party transactions made by your Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of your Company at large. All related party transactions were entered into because of mutual need and to serve mutual interest. The Audit Committee has given its omnibus approval which is valid for 12 months from the date of its approval. Your Company's policy on Related Party Transactions as approved by the Board is uploaded on your Company's website. Your Company has entered into consultancy agreement for availing professional services with Technopak Advisors Private Limited, a company in which Mr. Arvind Kumar Singhal, non-executive director of your Company is the Managing Director. This contract was at arm's length and in the ordinary course of business. Except for this, directors' sitting fees, related party transactions listed in the financial statements, none of the Directors has any pecuniary relationships or transactions vis- a-vis your Company. Disclosures as required under the Companies Act, 2013 are given in Form AOC-2 annexed as Annexure 5 to this Report.

(c) Your company had 15,631 permanent employees on its payrolls.

(d) The turnover of your Company was increased by 24.82% and EBITDA of your Company increased by 39.61% during financial year 2014-15. Median remuneration increased by 19.90%. Increase in median remuneration was in line with the performance of your Company.

(e) Comparison of the remuneration of the Key Managerial Personnel against the performance of your Company : The remuneration of the Key Managerial Personnel is 0.18% of EBITDA of your Company for the financial year 2014-15;

(f) Market Capitalisation of your Company as on March 31,2015 was Rs. 35,738.61 million and as on March 31,2014 it was Rs. 10,104.89 million.

(g) Price earnings ratio as at the closing of March 31, 2015 was 7.00 and at the closing of March 31,2014, was 33.79.

(h) The share price increased by 611.50% (Rs. 355.75 as on March 31, 2015) in comparison to the rate at which your Company came out with the public issue in April, 1993 i.e. Rs. 50 per share.

(i) Average percentage increase in the salaries of employees other than the managerial personnel in the financial year 2014-15 was 17.70%. The percentage increase in the managerial remuneration was 419.92%, however it is not comparable as Chairman, Managing Director and Executive Director were not paid any commission during the financial year 2013-14 and further, Mr. Altaf Jiwani, Chief Financial Officer was employed for only part of the year 2014-15.

(j) The key parameters for any variable component of remuneration availed by the directors are as per the Nomination and Remuneration Policy. Chairman, Managing Director and Executive Director are being paid commission of 1% of profits as approved by the shareholders of your Company.

(k) We affirm that the remuneration is as per the Nomination and Remuneration Policy of your Company.

ii. Details of the every employee of your Company as required pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are as given below:

Name, Designation, Age, DOJ, Current CTC (Rs), Qualification, Previous Company, Nature of Employment, % Of Equity Shares held in your Company, Relative of any Director/ Manager of your Company.

Dipali Goenka, Executive Director, 45, 01.04.2013, 86,132,829, B.A. (Psychology), -, Contractual, 0.07, Yes; Dinesh Jain, President - Finance, 57, 12.06.2004, 6.938.000, CA,LLB, Bhilwara Spinners, Permanent, 0.05, No; Suneel Mohnot, President - Commercial, 56, 26.08.2013, 8,125,000, M.COM, MBA, Reliance Industries Ltd., Permanent, 0, No; D.S Kalra, President - Projects, 46, 23.05.2014, 7,200,000, PGDM, B.TECH, SEL Manufecturing Company Ltd., Permanent, 0, No; Altaf Jiwani, Chief Financial Officer, 48, 02.02.2015, 22.400.000, B.TECH, MMS, RPG Group, Permanent, 0, No; Anil Channa, Executive Director - Operations, 66, 03.10.2014, 10,660,000, BE, B.Tech, MBA, PGDM, S.Kumars, Permanent, 0, No; Ashok Kumar Joshi, Director - Operations, 55, 02.07.2013, 14,300,000, B.TECH, Donear, Permanent, 0, No; Rajesh Mandawewala, Managing Director , 53, 01.12.1985, 88,613,458, CA, -, Permanent, 0.00 No; Mukund Prasad, Director - IT, 57, 20.07.2009, 20,000,000, BSC(ENGG) Mechanical & PGDBM (XLRI), Ranbaxy Laboratories Limited, Permanent, 0, No; Anil Nimbargi, Senior Vice President - IT, 49, 09.09.2009, 7,234,029, BSc., MBA (PROD/MKTG/ MGMT), Ispat Industries Limited, Permanent, 0, No; Milind Hardikar, Executive Director - Textile Park, 54, 24.04.2012, 17,072,076, BE(MECH), MMS, Arvind Limited, Permanent, 0, No; Sasanka Aich, Director - Textile Park, 61, 17.07.2013,

11.080.000, B Tech, Alok Industries Limited, Permanent, 0, No; Sandip Grover, President - HCGA, 53, 08.02.2012, 7,500,000, MBA, Mantteva (HR & Strategy Consultancy), Permanent, 0, No; Asim Chakraborty, Director - (Civil), 54, 23.01.2003, 9,753,324, BE (Civil), Welspun Corp Limited, Permanent, 0, No.

iii. Ms. Dipali Goenka, who is in receipt of remuneration and commission from your Company and who is the Executive Director of your Company receives Rs. 4.8 million as remuneration and commission of 2% of profits also from Welspun Global Brands Limited, a subsidiary of your Company.

iv. Details of managerial remuneration and payments to other directors is given in the Corporate Governance Report attached to this Directors' Report.

18.Secretarial Audit Report:

Secretarial Audit Report given by Mr. Uday Sohoni, Practicing Company Secretary is annexed with the report as Annexure 6.

19. Corporate Governance Certificate:

The Compliance certificate obtained from Mr. Uday Sohoni, Practicing Company Secretary regarding compliance of conditions of corporate governance as stipulated in Clause 49 of the Listing agreement is annexed to the Corporate Governance Report.

20. Risk Management:

Your Company is exposed to risks across all levels and functions of the organization. The Board has approved Enterprise Risk Management Policy (ERMP) to effectively address financial, operational, business, compliance and strategic risk. A structured enterprise risk management program has been formulated. Refer to the Management Discussion and Analysis Section of this report for risks and threats applicable to your Company.

21. Familiarization programme for Independent Director:

The details of familiarization program (for independent directors) are disclosed on your Company's website and a web link thereto is: http://welspunindia.com/ policy/Familiarisation%20program.pdf

22. Directors' Responsibility Statement:

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

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

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

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

e. being a listed company, the directors had laid down internal financial controls to be followed by your 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.

23. Miscellaneous:

During the year under report, there was no change in the general nature of business of your Company. No material change or commitment has occurred which would have affected the financial position of your Company between the end of the financial year of your Company to which the financial statements relate and the date of the report. No significant and material order was passed by the regulators or courts or tribunals which would have impacted the going concern status and your Company's operations in future. Further, the Board of your Company approved the Policy on Prevention, Prohibition and Redressal of Sexual Harassment of women at workplace at its meeting held on January 27, 2014 and formed the Internal Complaints Committee for each locations of your Company. No case of sexual harassments was reported to the Internal Complaints Committee during the year under review. Your Company has not made any provision of money for the purchase of, or subscription for, shares in your Company or its holding company, to be held by or for the benefit of the employees of your Company and hence the disclosure as required under Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014 is not required.

24. Acknowledgements:

Your directors thank the Government authorities, financial institutions, banks, customers, suppliers, shareholders, employees and other business associates of your Company, who through their continued support and co- operation, have helped as the partner in your company's progress and achievement of its objectives.

For and on behalf of the Board of Directors

Mumbai Balkrishan Goenka

April 29, 2015 Chairman


Mar 31, 2014

Dear members,

The directors have pleasure in presenting their 29th Annual Report on the standalone Audited Financial Statements of the Company for the financial year ended March 31,2014.

I. FINANCIAL HIGHLIGHTS (Standalone) % age to Particulars FY 2013-14 Total Revenue FY 2012-13 Revenue from Operations (Net) 35,312.03 97.15 30,429.46

Other lncome 1,036.24 2.85 491.72

TotaI Revenue (A) 36,348.27 100.00 30,921.18

Cost of Materials Consumed 19,717.89 54.25 16,944.25

Purchases of Stock-in-Trade 69.74 0.19 81.14

Changes in Inventory of Finished Goods,Work- in-Progress and Stock in- Trade (1034.00) (2.84) 44.73

Employee Benefits Expenses 2,342.69 6.45 1,817.71

Finance Costs 1,439.14 3.96 1,384.31



Depreciation and Amortization Expenses *6,227.92 * 17.13 1,328.09



Other Expenses 7,138.56 19.64 7,049.31

TotaI Expenses (B) 35,901.94 98.77 28649.54

Profit Before Extraordinary ltems and Tax (PBT) (A - B) 446.33 1.23 2271.64

Extraordinary ltems Provision for Doubtful Loans and Advances _ _ 83 85

Profit Before Tax 446.33 1.23 2187.79



Tax Expense 147.97 - 473.74

Profit/(Loss) After Taxation 298.36 0.82 1,714.05

(Rs. in Millions) Particulars % age toTotalRevenue Revenue from Operations (Net) 98.41

Other lncome 1.59

TotaI Revenue (A) 100.00

Cost of Materials Consumed 54.80

Purchases of Stock-in-Trade 0.26

Changes in Inventory of Finished Goods,Work- in-Progress and Stock in- Trade 0.14

Employee Benefits Expenses 5.88

Finance Costs 4.48



Depreciation and Amortization Expenses 4.30



Other Expenses 22.80

TotaI Expenses (B) 92.65



Profit Before Extraordinary ltems and Tax (PBT) (A - B) 7.35

Extraordinary ltems Provision for Doubtful Loans and Advances 0.27

Profit Before Tax 7.08



Tax Expense -

Profit/(Loss) After Taxation 5.54





* Refer to para below titled change in method of Depreciation

The financial year 2013-14 saw consistent growth in turnover. Revenue from operations increased by 16.05%. Cost of materials consumed rose proportionately with increase in turnover. It was increased by 16.37%. Employee benefit expenses showed a sharp increase of 28.88% during the financial year 2013-14. Depreciation and amortization expenses for the year have increased as a result of change in method of depreciation which has been elaborated below. To sum it up, the it was a good year for the Company and its stakeholders.

Change in method of Depreciation:

During the quarter ended September 30, 2013, Welspun India Limited changed the method of providing depreciation on its plant and machinery from straight-line method to reducing balance method as it was considered that it would result in more appropriate preparation and presentation of the Financial Statements of the company. Accordingly, depreciation on plant and machinery was recalculated from original date on which the assets came into use and incremental depreciation of Rs. 4,630.96 million from such revision was charged to Profit & Loss Account. As a result, depreciation and amortization expenses for the year ended March 31,2014 is higher by Rs. 4,738.09 million and profit before tax for the year ended March 31, 2014 is lower by Rs. 4,738.09 million with a consequential impact on profit after tax for the year.

II. DIVIDEND

Considering your Company''s performance during FY 2013-14, the Board of Directors recommends for approval of the members a dividend of Rs. 3 per share for the financial year 2013-14. The dividend, if approved by the shareholders and considering equity shares allotted till the date of this report, would result in total cash outflow of Rs. 352.32 million including dividend distribution tax. Dividend will be paid to those shareholders, who hold shares on the last day of book-closure i.e. June 25,2014.

III. QUALITY AND RESEARCH & DEVELOPMENT

Your Company continues to emphasize on qualitative growth, and believes that quality of its products is its strength in the complex market environment. Your Company is committed to bring about positive change in each and every process and has a team of fully focused personnel on Research & Development. Particulars of activities relating thereto have been given in Annexure hereto.

IV. DIRECTORS

Since the date of the last Directors'' Report, Mr. Arvind Kumar Singhal has been appointed as an additional director of the Company with effect from January 27,2014 to hold office upto date of the next Annual General Meeting.

Pursuant to the provisions of Section 150(2) read with Section 149(10) of the Companies Act, 2013, shareholders'' approval is sought for the appointment of Mr. Dadi Engineer, Mr. Apurba Kumar Dasgupta, Mr. Ram Gopal Sharma and Mr. Arun Todarwal as Independent Directors of the Company for a term of five consecutive years, at the forthcoming annual general meeting.

In the ensuing Annual General Meeting, Mr. Balkrishan Goenka, Chairman, will be retiring by rotation, and being eligible, has offered himself to be re-appointed. Further, details about him are given in the Notice of the ensuing Annual General Meeting, being sent to the members along with this report. The Board recommends his re-appointment.

V. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, regarding conservation of energy, technology ab sorption and foreign exchange earnings and outgo is given in Annexure forming part of this report.

VI. SUBSIDIARY COMPANIES

The Ministry of Corporate Affairs vide its General Circular No. 2 /2011 dated February 8, 2011 granted general exemption to companies from attaching a copy of the Balance Sheet, the Profit and Loss Account and other documents of their subsidiary companies as required to be attached under Section 212 of the Companies Act, 1956 to the Balance Sheet of companies subject to fulfillment of conditions stipulated in the circular. Therefore, the said Reports of the sub sidiary companies have not been attached herewith. However, a statement giving certain information as required by the Ministry is placed along with the Consolidated Accounts.

The Company shall provide a copy of Annual Report and other documents of its subsidiary companies as required under Section 212 of the Companies Act to the shareholders upon their request, free of cost.

VII. FIXED DEPOSIT

During the year under review, your Company has not accepted any fixed deposit within the meaning of Section 58A of the Companies Act, 1956 and the Rules made thereunder. No amount on account of principal or interest on public deposit was outstanding on the date of the Balance Sheet.

VII. EMPLOYEE STOCK OPTION SCHEME

On June 30, 2009, the Company issued Employee Stock Options (ESOP) under the Employee Stock Options Scheme (the "Scheme") to employees of the Company with a right to subscribe to equity shares at a price of Rs. 35.60 per equity share (closing market price as on June 30, 2009). The stock options can be exercised during a period of 3 years from the date of vesting. All outstanding stock options stand vested with effect from June 30,2013.

The details of options granted to the employees are as under :

Total number of employees : 82 Maximum number of options granted : 22,65,000 Average number of options granted : 27,622



The particulars required to be disclosed pursuant to Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as on March 31,2014, areas under:

a. Options granted : 22,65,000

b. The pricing formula : The exercise price is Rs.35.60 per equity share i.e the latest available closing market price of share atthe time of grant i.e June 30,2009.

c. Options vested but not exercised and not lapsed : 118,500

d. Options exercised : 1,193,000

e. The total number of shares arising as a result of exercise of Options : 1,193,000

f. Options lapsed/surrendered : 953,500

g. Variation of terms of Option : Not applicable

h. Money realized by exercise of Options : Rs.42,470,800



i. Total number of Options in force : 118,500

j. Employee wise details of options granted to: i. Senior Managerial Personnel (other than the ex-employees whose options have lapsed on resignation) : Nil

ii. Any other employee who received a grant in any one year of option amounting to 5% or more of options granted during that year : Nil

iii. Employees who were granted options, during any one year, equal to or exceeding 1% of the issued capital of the company at the time of grant : Nil

k. Earnings Per Share (EPS) of Option calculated in accordance with Accounting Standard AS-20

Diluted before Extraordinary items : Rs. 2.98



Basic after Extraordinary items : Rs. 2.98

Diluted after Extraordinary items : Rs. 2.98

I. The Company has adopted intrinsic value method for the valuation and accounting of the aforesaid stock options as per SEBI guidelines. Since the grants were made at an exercise price equal to the closing market price at the time of grant, no amount was required to be accounted as employee compensation cost. The fair value of the options as per the "Black Scholes" model comes to Rs. 17.49 per option. Had the company valued and accounted the aforesaid options as per the "Black Scholes" model, the employee compensation cost would have been higher by Rs. 1.57 million, the Profit After Tax for the year would have been lower by Rs. 1.57 million, the basic earnings per share would have been lower by Re. 0.02. m. Weighted average fair value of options: Rs. 17.49

n. The "Black Scholes" model captures all the variables with their respective appropriateness which influences the fair value of stock options. The significant assumptions to estimate the fair value of options as per "Black Scholes" model are:

Vest 1 Vest 2 Vest 3 Vest 4 June 30, June 30, June30, June 30, 2010 2011 2011 2013

Variables 20.00% 20.00% 30.00% 30.00%

Stock Price 34.85 34.85 34.85 34.85

Volatility 63.52% 59.33% 54.45% 53.18%



Risk-free Rate 6.15% 6.31% 6.46% 6.61%

Exercise Price 35.60 35.60 35.60 35.60

Time to Maturity 2.50 3.50 4.50 5.50



Dividend Yield 0.00% 0.00% 0.00% 0.00%

IX. PARTICULARS OF EMPLOYEES

As required by the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 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(l)(b)(iv) of the Companies Act, 1956, the Report and Accounts is 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.

X. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the accounts for the financial year ended March 31, 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were 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 or loss of the Company for the year under review;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the Directors have prepared the accounts for the financial year ended March 31,2014 on a ''going concern'' basis.

XI. AUDITORS

Your Company''s Auditors M/s. Price Waterhouse, 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 139 of the Companies Act, 2013.

XII. AUDITORS'' REPORT

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

XIII. COST AUDIT REPORT

The Company has appointed M/s Kiran J Mehta and Co., (FRN-000025) Cost Accountants for conducting Cost Audit for the Company for the financial year 2013-14. The Cost Audit for the year is in progress and the report will be e-filed with the Ministry of Corporate Affairs, Government of India, in due course. The Cost Audit Report for the financial year 2012-13 was e-filed on August 26,2013.

XIV. CORPORATE GOVERNANCE

Your Company believes that Corporate Governance is a voluntary code of self-discipline. Your Company continuously endeavors to follow healthy Corporate Governance practices to nurture interest of all stakeholders in the Company.

A separate report on Corporate Governance is annexed hereto as a part of this report. A certificate from a practicing company secretary regarding compliance of conditions of Corporate Governance as prescribed under Clause 49 of the Listing Agreement is attached to this report. Management Discussion and Analysis Report is separately given in the Annual Report.

XV. CONSOLIDATED FINANCIAL STATEMENTS

As stipulated under 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.

XVI. ACKNOWLEDGEMENT

Your directors express deep sense of appreciation for the assistance and co-operation received from the financial institutions, banks, government authorities, creditors and shareholders and for the devoted services rendered by the executives, staff and workers of the Company.

For and on behalf of the Board

Mumbai B. K. Goenka May20,2014 Chairman


Mar 31, 2013

To, The Members of WELSPUN INDIA LIMITED

The directors have pleasure in presenting their 28th Annual Report on the standalone Audited Financial Statements of the Company for the financial year ended March 31, 2013.

I. FINANCIAL HIGHLIGHTS (Standalone)

(Rs. in Million)

Current % age to Previous % age Particulars year Total year to Total 31.03.2013 Income 31.03.2012 Income

Revenue from Operations (Net) 30,429.46 98.41 25909.95 98.57

Other Income 491.72 1.59 375.88 1.43

Total Revenue (A) 30,921.18 100.00 26285.83 100.00

3C6o0st4 o1 2f 7m4a1t.e0r0ials consumed 16,944.25 54.80 13541.49 51.52

Purchases of stock-in-trade 81.14 0.26 153.46 0.58

Changes in inventory of finished goods, work-in- progress and 44.73 0.14 240.18 0.91 stock-in-trade

Employee benefits expenses 1,817.71 5.88 1541.65 5.86

Finance costs 1,384.31 4.48 1438.51 5.47

Depreciation and amortization expenses 1,328.09 4.30 1187.43 4.52

Other expenses 7,049.31 22.80 5931.79 22.57

Total expenses (B) 28649.54 92.65 24034.51 91.43

Profit Before Exceptional and extraordinary items 2271.64 7.35 2251.32 8.56 and tax (A – B)

- Provision for diminution in value of Investments 0 0.00 81.79 0.31

Profit before extraordinary items and tax (PBT) 2271.64 7.35 2169.53 8.25

Extraordinary Items

- Provision for doubtful loans and advances 83.85 0.27 284.35 1.08

Profit before tax 2187.79 7.08 1885.18 7.17

Tax Expense

- Current Tax 282.92 446.97

Less : Minimum Alternative Tax Credit Availed 0 16.42

Total 282.92 430.55

- Short Provision for Tax in Earlier Years 0 0.27

- Deferred Tax 190.82 283.26

Profit/ (Loss) After Taxation 1,714.05 5.54 1,171.10 4.46

During the year under report, your Company registered a growth of 17.44% in Revenue from Operations, 16.05% in PBT and 46.36% in PAT.

Your Company continued its growth in topline. Although western economies, particularly European economies, are not completely out of financial crisis, your Company could sustain growth over its performance in FY 12-13.

II. DIVIDEND

Considering your Company''s performance during FY 2012-13, the Board of Directors recommends for approval of the members a final dividend of Rs. 2 per share for the financial year 2012-13. During FY 2012-13, your Company declared and paid an interim dividend of Rs. 2 per share resulting in total dividend of Rs. 4 per share. The final dividend, if approved by the shareholders, would result, together with the interim dividend already paid, in total cash outflow of Rs. 441.71 million including dividend distribution tax.

III. SCHEME OF ARRANGEMENT

Pursuant to the Composite Scheme of Arrangement between your Company, erstwhile Welspun Global Brands Limited and Welspun Retail Limited (now renamed as Welspun Global Brands Limited) which became effective from December 7, 2012 ("Scheme"), erstwhile Welspun Global Brands Limited was merged into your Company and as per the Scheme your Company allotted 10,475,496 equity shares of Rs. 10 each of the Company to the shareholders of erstwhile Welspun Global Brands Limited in the ratio of 1 equity share of your Company for every equity share held in erstwhile Welspun Global Brands Limited as on the record date of December 27, 2012.

IV. QUALITY AND RESEARCH & DEVELOPMENT

Your Company continues to emphasize on qualitative growth, and believes that quality of its products is its strength in the complex market environment. Your Company is committed to bring about positive change in each and every process and has a team of fully focused personnel on Research & Development. Particulars of activities relating thereto have been given in Annexure hereto.

V. DIRECTORS

Since the date of the last Directors'' Report, Mrs. Dipali Goenka has been appointed as an executive director of the Company with effect from April 1, 2013.

In the ensuing Annual General Meeting, Mr. Rajesh Mandawewala, Managing Director and Mr. Dadi Engineer, an independent director, will be retiring by rotation, and being eligible, have offered themselves to be re-appointed. Further, details about them are given in the Notice of the ensuing Annual General Meeting, being sent to the members along with this report. The Board recommends their re-appointment.

VI. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in Annexure forming part of this report.

Your Company has been awarded Corporate Sustainability Stewardship Award for Resource Conservation Leadership in Manufacturing for implementing a comprehensive resource conservation plan over the last 2 years. Initiatives for energy conservation have led to saving of 15740 units of power and 11 MT coal per day. In addition, water savings to the tune of 403 KL/day have been achieved by your Company. Your Company''s Anjar plant has installed a Bio-Gas Plant to generate biogas from all bio- degradable wastes like Biological Sludge, garden, kitchen and canteen waste. In addition, your Company has succeeded in harvesting approximately 2 billion litres of rain water.

VII. SUBSIDIARY COMPANIES

Pursuant to the Scheme, your Company became the holding company of 1) Welspun Global Brands Limited (earlier known as Welspun Retail Limited), 2) Welspun Mauritius Enterprises Limited (Mauritius), 3) Novelty Home Textiles S.A. de C.V. (Mexico), 4) Welspun Holdings Private Limited (Cyprus), 5) Welspun Home Textiles UK Limited (UK), 6) CHT Holdings Limited (UK), 7) Christy Home Textiles Limited (UK), 8) Welspun UK Limited (UK), 9) Christy 2004 Limited (UK), 10) Christy Welspun GmbH (Germany), 11) E. R. Kingsley (Textiles) Limited (UK), 12) Christy UK Limited (UK), 13) Welspun USA, Inc. (USA), 14) Welspun Decorative Hospitality LLC (USA), 15) Kojo Canada Inc. (Canada).

Your Company''s 100% subsidiary, Besa Developers and Infrastructure Private Limited, continues to be 100% subsidiary. Subsequent to cessation of operations by Welspun Mexico S.A. de C.V., your Company sold its entire shareholding in Welspun Mexico S.A. de C.V. (Mexico) to an unrelated party on March 28, 2013. Welspun AG (Switzerland), an erstwhile subsidiary of your Company was liquidated on March 29, 2013.

The Ministry of Corporate Affairs vide its General Circular No. 2 / 2011 dated 8th February, 2011 granted general exemption to companies from attaching a copy of the Balance Sheet, the Profit and Loss Account and other documents of their subsidiary companies as required to be attached under Section 212 of the Companies Act, 1956 to the Balance Sheet of companies subject to fulfillment of conditions stipulated in the circular. Therefore, the said Reports of the subsidiary companies have not been attached herewith. However, a statement giving certain information as required by the Ministry is placed along with the Consolidated Accounts.

The Company shall provide a copy of Annual Report and other documents of its subsidiary companies as required under Section 212 of the Companies Act to the shareholders upon their request, free of cost.

VIII. FIXED DEPOSIT

During the year under review, your Company has not accepted any fixed deposit within the meaning of Section 58A of the Companies Act, 1956 and the Rules made thereunder.

IX. EMPLOYEE STOCK OPTION SCHEME

On June 30, 2009, the Company issued 22,65,000 Employee Stock Options under the Employee Stock Options Scheme (the "Scheme") to employees of the Company and its subsidiaries with a right to subscribe to equity shares at a price of Rs. 35.60 per equity share (closing market price as on June 30, 2009). The stock option can be exercised during a period of 3 years from the date of vesting. The dates of vesting of options are June 30, 2010 (20%), June 30, 2011 (20%), June 30, 2012 (30%) and June 30, 2013 (30%).

The details of options granted to the employees are as under:

Total number of employees : 82

Maximum number of options granted : 22,65,000

Average number of options granted : 27,622

The particulars required to be disclosed pursuant to Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as on March 31, 2013, are as under:

a. Options granted: 22,65,000

b. The pricing formula: The exercise price is Rs. 35.60 per equity share i.e. the latest available closing market price of share at the time of grant i.e. June 30, 2009.

c. Options vested but not exercised and not lapsed: 163,500

d. Options exercised: 859,000

e. The total number of shares arising as a result of exercise of Options: 859,000

f. Options lapsed /surrendered: 766,000

g. Variation of terms of Option: Not applicable h. Money realized by exercise of Options: Rs. 30,580,400 i. Total number of Options in force: 552,000 j. employee wise details of options granted to:

i. Senior Managerial Personnel (other than the ex- employees whose options have lapsed Nil on resignation)

ii. Any other employee who received a grant in any one year of option amounting to 5% or Nil more of options granted during that year iii. Employees who were granted options, during any one year, equal to or exceeding 1% of the Nil

issued capital of the company at the time of grant

k. Earnings Per Share (EPS) of Option calculated in accordance with Accounting Standard AS-20:

Diluted before Extraordinary items Rs. 17.96

Basic after Extraordinary items Rs. 17.19

Diluted after Extraordinary items Rs. 17.12

l. The Company has adopted intrinsic value method for the valuation and accounting of the aforesaid stock options as per SEBI guidelines. Since the grants were made at an exercise price equal to the closing market price at the time of grant, no amount was required to be accounted as employee compensation cost. The fair value of the options as per the "Black Scholes" model comes to Rs. 17.49 per option. Had the company valued and accounted the aforesaid options as per the "Black Scholes" model, the employee compensation cost would have been higher by Rs. 0.96 million, the Profit After Tax for the year would have been lower by Rs. 0.65 million, the basic earnings per share would have been lower by Re. 0.01.

m. Weighted average fair value of options: Rs. 17.49

n. The "Black Scholes" model captures all the variables with their respective appropriateness which influences the fair value of stock options. The significant assumptions to estimate the fair value of options as per "Black Scholes" model are:

Vest 1 Vest 2 Vest 3 Vest 4 June 30, 2010 June 30, 2011 June 30, 2012 June 30, 2013

Variables 20.00% 20.00% 30.00% 30.00%

Stock Price 34.85 34.85 34.85 34.85

Volatility 63.52% 59.33% 54.45% 53.18%

Risk-free Rate 6.15% 6.31% 6.46% 6.61%

Exercise Price 35.60 35.60 35.60 35.60

Time to Maturity 2.50 3.50 4.50 5.50

Dividend Yield 0.00% 0.00% 0.00% 0.00%

X. PARTICULARS OF EMPLOYEES

As required by the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 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 is 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.

XI. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i) that 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) that the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were 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 or loss of the Company for the year under review; (iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) that the Directors have prepared the accounts for the financial year ended March 31, 2013 on a ''going concern'' basis.

XII. AUDITORS

Your Company''s Auditors M/s. Price Waterhouse, 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.

XIII. AUDITORS'' REPORT

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

XIV. COST AUDIT REPORT

The Company has 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 with Ministry of Corporate Affairs, Government of India, in due course. The Cost Audit Report for the financial year 2011-12 was e-filed on December 21, 2012. The extended due date for e-filing of the Cost Audit report for the financial year 2011-12 was February 28, 2013.

XV. CORPORATE GOVERNANCE

Your Company believes that Corporate Governance is a voluntary code of self-discipline. Your Company continuously endeavors to follow healthy Corporate Governance practices to nurture interest of all stakeholders in the Company.

A separate report on Corporate Governance is annexed hereto as a part of this report. A certificate from a practicing company secretary regarding compliance of conditions of Corporate Governance as prescribed under Clause 49 of the Listing Agreement is attached to this report. Management Discussion and Analysis Report is separately given in the Annual Report.

XVI. CONSOLIDATED FINANCIAL STATEMENTS

As stipulated under 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.

XVII. ACKNOWLEDGEMENT

Your directors express deep sense of appreciation for the assistance and co-operation received from the Financial Institutions, Employees, Banks, Government Authorities, Creditors and Shareholders and for the devoted services rendered, by the Executives, Staff and Workers of the Company.

For and on behalf of the Board

Mumbai B. K. Goenka

May 15, 2013 Chairman

 
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