wcl annual report 2011 -12

7/29/2019 WCL Annual Report 2011 -12

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Excellence in Engineering.

It is an art; it is a science

It requires skill; it requires vision

It needs flair; it needs innovation

It involves execution .

. With perfection

We are WELSPUN


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FINANCIAL HIGHLIGHTS (Consolidated)

@@:For FY11and FY12,Other Income,a partof ReportedEBITDAincludes InterestIncome forthe respectiveyears.

# FY 09: Figures are excluding the extraordinary item :Forex provision of Rs. 1,256 million, Provision on ECB of Rs. 178 million and Inventory

writedownofRs. 385million during FY2008 09.

@ FY 10:Forex Provisoningmade inthe previousyear wererecoveredduringthe year.

##FY 2010 11:Includesexport rebateof Rs.734 million onreceipt of favourable judgementfromHonorable Supreme Court andprovision of

Rs.2,007 millionon accountof settlementwithone ofthe customerstherebyendinglongpendinglitigation.

###FY 2011 12: Includes OtherIncomeof Rs. 2,676millionwhich includesinterestincome of Rs. 1,339million. Operational Performance was

impacted by foreign exchange provisions of Rs. 1,248 million, and Rs. 269 million in other expenses & finance costs, and provisions madetowardsamicable settlementwitha customerof Rs.649 million.

* Networth includesCCDs of Rs.7,884 million.

-

2,000

4,000

6,000

8,000

3,408

2,135

6,104

2007-08 2008-09 2009-10 2010-11

6,330

PAT (Rs. Mn)

2011-12

2,385

0.0%

5.0%

10.0%

15.0%

20.0%

EBITDA Margin (%)

16.6%

2007-08

11.3%

2008-09

18.1%

2009-10

16.9%

2010-11

12.2%

2011-12

Fixed Assets (Gross Block- Rs. Mn)

29,213

2007-08

40,682

2008-09

44,248

2009-10 2010-11

58,339*

2011-12

86,957*

-

25,000

50,000

75,000

100,000

25,000

45,000

65,000

Exports/Overseas Revenue (Rs. Mn)

5,000

32,750

41,515

52,603 52,860

2007-08 2008-09 2009-10 2010-11

46,139

2011-12

11.0

21.0

31.0

41.0

Basic EPS (Rs. / Share)

20.9

11.5

31.7 30.9

2 00 7- 08 2 00 8- 09 2 00 9- 10 2 01 0- 11

1.0

10.9

2011-12

2007-08

40,05257,582

73,82281,360

2008-09 2009-10 2010-11

Total Income (Rs. Mn)

92,442

2011-12

5,000

105,000

55,000

1,000

10,000

20,000

30,000

Networth (Rs. Mn)

15,672

2007-08

15,597

2008-09

29,011

2009-10

33,735

2010-11

49,139*

2011-12

40,000

50,000

500

2,5004,500

6,5008,500

10,50012,500

14,500

6,662

2 00 7- 08 2 00 8- 09 2 00 9- 10 2 01 0- 11

6,535#

13,372@

13,784##

2011-12

11,247###

Reported EBITDA (Rs. Mn)@@


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Corporate Information .......................... 2

Chairmans Statement .......................... 6

Directors Report .......................... 10

Corporate Governance Report .......................... 18

Management Discussion and Analysis .......................... 31

Catalysing Change (CSR) .......................... 70

Financial Section .......................... 73

C rp Ltd

CONTENTS

Excellence in Engineering has been the driving force

behind every venture that Welspun Corp has undertaken

and it continued to be evident during the last financial

year. It was the unending quest for excellence, the

constant striving to do even themost ordinary thingswell

thathasmadetheCompanyaclassapart.

Thelast financialyear wasa greatone for WelspunCorp

Ltd (WCL). In spite of the downturn the company was

able to commission most of the projects it had

committed to and registered a sustained performance

withstrongorderbook positionof Rs. 7,447crore. Thisis

really creditable as overall industrial production

continuedto slidethroughoutthe year.

Last fiscal, one of the biggest achievements

undoubtedly was the investment by Apollo Global

Management, LLC (together with its subsidiaries,

Apollo) in the company. This partnership will pave the

way forWelspun to strengthen its leadership position as

oneof thetopline pipe companiesin theworld.

Another significant development was the

announcement of expansion plans at the Little Rock

facilityin Arkansas.Another200 jobs will be added atan

investment of additional $80 million. During FY12, the

Company also commissioned a 0.10 million tonne

capacity HSAW Plant at Mandya in Karnataka which will

mainly cater to the water segment. The Company also

commenced operations at the new LSAW plant at Anjar

with a capacity of 0.35 million tonnes. The plant will

cater to thegrowingLSAW demandin India andglobally

towardstransportationof offshore Oiland Gas.

Meanwhile, to strengthen the management, Mr Braja K

Mishra has rejoined the Company as Managing Director,

WCL after a brief stint of three years outside Welspun. He

bringsalongwithhim 25yearsof experiencewithimmense

criticalknow howaboutthepipeandplateindustry.

With the Companys continued focus on excelling in

every sphere of its operations and generating

sustainablevalue forits customers andstakeholders,it is

sureto reach tostronger heights in theyearsahead.

Excellence in Engineering

In this Annual Report we have disclosed forward-looking information to enable

investors comprehend our prospects and take informed investment decisions.

We havetried, whereverpossible,to identify suchstatements by usingwordsas

'anticipate', 'estimate', 'expects', 'projects', 'intends', 'plans', 'believes', and

words of similar substance in connection with any discussion of the future

performance. We cannot guarantee that these forward-looking statements will

be realized, although we believe we have been prudent in our assumptions.

Should known or unknown risks or uncertainties materialize, or should

underlying assumptions prove inaccurate, actual results could vary materially

from those anticipated, estimated or projected. Readers should bear this in

mind. We undertake no obligation to publicly update any forward-looking

statements,whetheras a resultof newinformation,future eventsor otherwise.

FAQs .......................... 172


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The ability to see future prospects and turn them into

profitable business ventures. Thats something that sets us

apart. FromAnjar to Dahej, fromArkansas to Dammam,

wehave always anticipatedour customersneeds.

Excellence .. It flows from our Vision


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KEY MANAGEMENT TEAM

2726

C rp Ltd

CERTIFICATE OF PRACTICING COMPANY SECRETARY ON CORPORATE

GOVERNANCEREPORT

TotheMembersof

WelspunCorpLimited

Wehaveexaminedthecomplianceof conditionsofCorporateGovernancebyWelspunCorpLimited,for theyear

ended on March 31, 2012, as stipulated in Clause 49 of the Listing Agreement of the said Company with stock

exchange.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our

examinationwas limitedto procedures andimplementationthereof, adoptedby theCompanyforensuringthe

complianceofthe conditionsof theCorporateGovernance.Itis neitheran auditnoran expressionofopinionon

thefinancial statementsof theCompany.

Inour opinionandtothe bestofour informationand accordingtotheexplanationgivento us,we certifythatthe

Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned

Listing Agreement.

Westatethatin respectof investorgrievancesreceivedduringthe yearendedMarch 31,2012,theRegistrarsof

the Company have certified that as at March 31, 2012, there were no investor grievances remaining

unattended/pendingfor morethan 30days.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the

efficiencyoreffectivenesswithwhichthemanagementhasconductedtheaffairsoftheCompany.

For S.S.Risbud&Co.

CompanySecretaries

SanjayRisbud

Proprietor

Certificateof PracticeNo. 5117

Mumbai

May29,2012

Mr. R.R. Mandawewala

Director

Group Managing

Mr. B.R. Jaju

Director & Chief

Financial Officer

Mr. Prashant Mukherjee

Director, Welded Pipes

Mr. L. T. Hotwani

Director, (Taxation &

Accounts CMD Office)

Mr. Vipul Mathur

Director,

Sales & Marketing

Mr. David J. Delie

President,

Welspun Pipes Inc.

Mr. B.K. Goenka

Executive Chairman

Mr. Braja Mishra

Managing Director

Mr. Akbar Umatiya

Vice President,

Welspun Middle East

Mr. Akhil Jindal

Director,

Group Finance& Strategy


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Excellence .. Driven by Innovation


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Excellence .. Hand-in-hand with Sustainability

Act responsibly today so that future generations may enjoy a

better tomorrow. It is with this vision that we have launched

initiatives like Welspun Vidya Mandir, Light of Life Trust,

Project Anando, Mission Mangalam Scheme, to name a

few. So along with our own advancement, we help the world

achieveall-roundeconomic,environmentaland socialprogress.


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71

C rp Ltd

to equip the candidates with computer skills. It also emphasises learning of other soft skills and

Englishlanguageskillsto boosta candidatesemploymentpotentialin todayscompetitivejobmarket.

Empowermentand Health

Anjar, Kutch Gujaratand Salav Maharashtra

a. Anti-TobaccoandHealthProject

Welspuninitiatedan Anti Tobaccoandhealth campaignin Alibaug governmentschools. Thisproject

was in collaboration with Salaam Bombay Foundation and disseminates information and creates

awarenessaboutthe ill effectsof tobacco through activeteacherparticipation.The projectreaches

outto 33Schools,53 Teachers,7 Clustercoordinatorsand 5 blockauthorities.Variousactivitieshave

been held such as teachers training workshops, students leadership development camps andAnganwadiworkerst rainingsessions.

b . H ea lt h Ca re

Dahej

Welspunorganiseda freeHealthCampat JolwaPrimarySchool,Jolwa.TheCamp wasinauguratedby

Mr. Sulemanbhai (Sarpanch, Jolwa village) and Mr. Ghanshyambhai (Sarpanch of Vadadala village)

withWelspunvolunteersandparticipantsin attendance.

The camp was the first of its kind in the locality. Doctors from the leading hospital Bharuch Global

Hospital volunteered to offer their medical expertise and service.The event was welcomed by local

villagers. Around 170 adults, including mothers with children, were screened and diagnosed for

varioushealth ailments.

c . M ob il e He al th V an

Mumbai

Welspun, in collaboration with the Wockhardt Foundation, launched a mobile health unit to reach

out to five underprivileged neighbouring communities in Mumbai. About 1,100 people have

benefited from the facilities provided by this van. The emphasis is on the health of the mother and

child.Regularawarenessworkshops arealso carried outin thesecommunitiesas partof preventive

health careeducation.

d. Blo o dDonatio nCamp

WelspunHO,Mumbai

Welspun took a small step towards saving lives when it organised a blood donation camp at HO incollaborationwith TataMemorial Hospital.

Altogether 123 people donated blood and 93 units were collected. As a token of appreciation,

participating employeeswere givendonorcards fromTataMemorialHospitalwhichcan be usedby

the donor or their immediate family to get blood from Tata Memorial Hospital or any other blood

bankintimesof emergency.

e. WomenEmpowermentInitiative

Varsamedi,Anjar

Welspun pioneered Mission Mangalam Scheme with the Gujarat Government. Currently there are

threeSakhiSwarnimCentersbeingrunin Varsamedi,DudhaiandBhadreshwar.Thisinitiativewidens

70

CATALYSING CHANGE

TherearetwoimportantsocialcornerstonestoWelspunscorporatephilosophy astrongcommitment to

wider, all roundsocialprogress,and to a sustainabledevelopmentthat balancesthe needsof thepresent

withthoseofthe future.

Our vision has been enshrined in the three Es which have become the Guiding Principles of our CSR

initiatives Education, Empowerment & Health, and Environment, which in actual terms, has manifested

itselfinthe WelspunFoundationforHealthand Knowledge(WFHK).

The Foundation is an essential part of our organisation, and is active wherever we have a business

presence. Through it we engage with local stakeholders, and in a process that is both consultative and

collaborative, we have taken up a range of innovative programmes in the spheres of health, education,

environment,as wellasculturalandcivicprojectsoverthelastfewyears.

In mostof ourprojectcenterswe havesuccessfullymanagedto integratewith the localcommunitiesand

developmutuallybeneficialrelationshipswiththem.

During FY 2011 12, we took up a number of programmes in key economic, environmental and social

spheres.

Education

Welspun is dedicated to improving and enhancing the quality of education thus equipping the

children of todayto become theleadersof tomorrow.We workcloselywith thegovernment and

non profit organisations to provide quality education to 3,000 tribal, rural and urban children.

Someofour keyinitiativesare:

a. Naandi Fo undatio n: (Quality Education Programme at Primary School level) Mumbai Welspun

Foundationfor Healthand Knowledgehas joined handswith NaandiFoundationin a projectthat

covers six Municipal Corporation of Greater Mumbai (MCGM) schools in Mumbai. With our financial

support,NaandiFoundationreachesoutto700schoolchildrenandprovidesthemwithqualityeducation.

b. Lighto f LifeTrust:ProjectAnando: (Quality Education at Secondary School Level) Salav, Alibaug,

Maharashtra.This initiativeaimsto providequalityeducationto underprivilegedchildrenatSalav

andAlibaug.The LightofLife Trust,in associationwithWelspun,supportscloseto 100rural/tribal

childrenat SalavandAlibaug.

LivelihoodGeneration

Welspun has given importance to equipping youth with the skills that will help them to earn a

livelihood.Thefocusison helpingthe youthfromneighbouringcommunitiesgettrainedforbetter

livelihoodoptionsthatwillaccelerateeconomicandsocialdevelopment.

a. JeevanAshaComputerTrainingCentre

Salav,Alibaug,Maharashtra

Welspun has recently launched a computer training centre in Alibaug as part of its livelihood

generationprogramme.Thecentrerunsincollaborationwiththe LightofLifeTrust.

In the current academic year, approximately 200 students from rural /tribal underprivileged

familieswillbe trainedin basiccomputercoursesto ensureemployability. Thecourseisdesigned


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72

theirlivelihoodoptionsby buildingcapacitiesandprovidingtrainingto ruralwomen. Approximately

250 women have been trained under this scheme. All of them are engaged in livelihood activity

whichhas enhancedtheiresteem,confidenceand mostimportantlythe familyseconomicstandards.

Approximately700 ruralwomenare beingempowered.The sameprojectwill be replicatedin other

potentialvillagesincollaborationwiththeGujaratGovernment.

CharitableDo nations

Donationof bedsheets and curtainsto REAPorganisation and theLight of LifeTrust. School stationery donated by Welspun employees and distributed to students f rom the

VatsalyaFoundation.

EmployeeVoluntary Programme

Special emphasis is being given on employee participation in the various schemes. An employee

voluntaryworkshopwasorganisedat Salavwhere20 employeesdiscussed theplan of actionforthe

voluntaryinit iatives.

CommunityDevelop ment

a. Sanitatio nPro ject

Kharapasvariya,Gujarat

Sanitation work was undertaken at Kharapasvariya village as part of a health drive. Welspun

supported the event by providing gutter covers and road widening repair work to enhance

cleanliness and hygienic conditions. The villagers were overwhelmed when they were selected to

receiveanAward andCertificatefromthe ChiefMinisterof Gujaratforcleanlinessand overallhygiene.

Other Activities

a . C SR E xp re ss io n

WelspunHO,Mumbai

To portray the various Welspun CSR projects at different locations a special event Welspun CSR

Expression,wasorganisedat theHead Office.It washeld onthe eveof TeachersDay,and thefocus

wastocapturetheessenceofthe coreobjectivesofthe companysCSRinitiatives.

NGOs such as Salaam Bombay Foundation, Light of Life Trust and Naandi Foundation, which had

worked in collaboration withWelspunCSR teamsat Salavand Anjar, participatedin theprogramme

by organising exhibitions. They also made a presentation of their activities to Mrs. Dipali Goenka,

ManagingDirector,WGBL,the SeniorManagementandotherWelspunemployees.

b. WelspunsChristmasGetTogetherParty

Welspunorganiseda ChristmasGet Together Partyfor120 childrenfrom Welspun supportedNGOs.

Welspunemployeevolunteersorganisedgamesforthe children.

73

C rp Ltd

................... 74

FINANCIAL SECTION

Consolidated Accounts

Audit Report Consolidated Accounts

Consolidated Balance Sheet

Consolidated Statement of Profit & Loss

Consolidated Notes to Accounts

Consolidated Cash Flow Statement

Section 212 (8) Disclosure

Standalone Accounts

Audit Report Standalone Accounts

Standalone Balance Sheet

Standalone Statement of Profit & Loss

Standalone Notes to Accounts

Standalone Cash Flow Statement

Section 212 Disclosure

................... 76

................... 77

................... 78

................... 120

................... 122

................... 123

................... 128

................... 129

................... 130

................... 163

................... 171


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92

13. Non current investments

(Valued at cost unless stated otherwise)

A. Trade investments unquoted

Associates

Red Lebondal Limited (Extent of holding 25%)

450 (450) Equity Shares of Euro 1 each

Less: Share of accumulated loss

Add : Share of Profit for the year

Welspun Energy Limited (Extent of holding 26%)

17,515,300 (273,000) Equity Shares of Rs 10 each

Less: Share of accumulated loss

Add: Share of Profit/(Loss) for the year

Investment in Joint Ventures

B. Other investments

i) Quoted

Welspun Investments and Commercials Limited *

5 (5) Equity Shares of Rs 10 each

Welspun Global Brands Limited * [Rs 459 (Rs 459

10 (10) Equity Shares of Rs 10 each

Standard Chartered Bank PLC IDR #

334,331 (334,331) IDR of Rs 100 each)

Naonal Minerals Development Corporaon Limit

100,000 (Nil) Equity Share of Rs 10 each

Corporaon Bank

1,600 (1,600) Equity Shares of Rs 10 each

ii) UnquotedWelspun Capve Power Generaon Limited


Welspun Enterprises (Cyprus) Limited

11,800 (11,800) Equity Shares of Euro 1 each

Notes forming part of the Cons olidated Fina

NotesformingpartoftheConso

lidatedFinancialStatements

12.FixedAssets

(Rs.inmillion)

GrossBlock

Depreciaon/Amorsaon/Impairment

NetBlock

As

at

1April

2011

Acquired

onAcqui-

sion

Addions

Foreign

Currency

Fluctua-

ons

Deduc-

ons

Asat

31March

2012

Upto

1Aprl

2011

Acquired

on

Acquisi-

on

Forthe

year

Foreign

Currency

Fluctua-

ons

Deduc-

ons

Impair-

mentUpto

01Aprl

2011

Upto

31March

2012

Asat

31March

2012

Asat

31March

2011

a)TangibleAssets

Land-Freehold

41

4.5

2

13.6

6

9.1

5

30.0

3

2.2

3

465.1

2

-

-

-

-

-

-

-

465.1

2

414.5

2

Land-Leasehold

1,20

3.8

1

398.4

1

514.8

1

78.5

5

-

2,1

95.5

8

118.7

5

10.5

6

64.0

2

9.0

0

-

-

202.3

2

1,9

93.2

6

1,0

85.0

6

Buildings

6,51

9.8

9

238.2

7

1,5

78.4

9

373.1

1

14.1

1

8,6

95.6

5

650.9

6

9.8

2

228.1

7

20.6

2

-

0.4

2

910.0

0

7,7

85.6

6

5,8

68.5

0

PlantandMachinery

34,87

2.2

3

5,5

02.4

3

10,9

40.0

0

1,0

80.3

0

126.5

0

52,2

68.4

5

7,0

99.9

5

846.2

6

2,7

95.3

2

136.8

0

59.1

1

41.1

0

10,8

60.3

2

41,4

07.3

3

27,7

31.1

7

ConstruconAssets

23

6.3

3

-

0.9

3

-

-

237.2

6

93.6

1

-

19.6

1

-

-

-

113.2

2

124.0

4

142.7

2

Officeandother

Equipments

64

1.3

6

83.3

6

131.7

5

43.2

4

36.7

4

862.9

6

198.1

8

37.3

1

112.3

1

11.5

7

12.8

7

0.6

2

347.1

3

515.8

3

442.5

6

Vehicles

31

6.4

0

43.5

4

18.4

4

5.8

2

6.3

8

377.8

1

181.0

1

22.4

7

41.6

9

1.5

5

4.2

1

-

242.5

1

135.3

1

135.3

9

FurnitureandFixtures

16

2.7

3

10.8

3

40.2

0

5.5

1

5.9

6

213.3

1

54.6

1

4.3

6

22.5

5

1.5

9

3.1

5

0.0

1

79.9

7

133.3

4

108.1

1

LeaseholdImprovement

-

21.9

0

19.4

7

-

1.1

4

40.2

3

-

11.3

5

4.5

1

-

1.1

3

-

14.7

3

25.5

0

-

Total(a)

44,36

7.26

6,312.40

13,253.24

1,616.56

193.07

65,356.39

8,397.08

942.13

3,288.18

181.12

80.46

42.16

12,770.20

52,585.39

35,928.02

b)IntangibleAssets

Goodwll

12

0.2

3

16.7

0

-

17.0

7

-

153.9

9

120.2

3

7.3

2

2.2

3

17.0

7

-

-

146.8

4

7.1

6

-

GoodwllonConsolidaon

85

8.7

1

-

9,0

29.1

5

-

-

9,8

87.8

6

-

-

-

-

-

-

-

9,8

87.8

6

858.7

1

Soware

46

1.7

6

8.4

4

16.1

8

-

0.0

9

486.2

9

115.8

2

6.7

6

93.9

2

-

-

-

216.4

9

269.7

9

345.9

4

Build

,Operateand

Transfer(BOT)

4,75

8.9

8

-

122.3

3

-

-

4,8

81.3

1

160.6

2

-

148.8

4

-

-

-

309.4

6

4,5

71.8

5

4,5

98.3

5

Total(b)

6,19

9.67

25.14

9,167.66

17.07

0.09

15,409.45

396.67

14.07

244.98

17.07

-

-

672.79

14,736.66

5,803.01

Total(a+b)

50,56

6.93

6,337.54

22,420.90

1,633.62

193.16

80,765.84

8,793.74

956.20

3,533.16

198.19

80.46

42.16

13,442.99

67,322.05

41,731.02

PreviousYear

38,80

1.3

4

5,9

59.1

8

7,1

20.4

5

(939.2

1)

374.8

2

50,5

66.9

3

5,8

46.7

5

525.0

0

2,4

64.0

2

(8.2

1)

33.8

2

42.1

6

8,8

35.9

0

41,7

31.0

2

CapitalWorkinProgress

6,190.89

7,772.41

Notes:

1)Deprecaon

ortheyearncudesRs1793

m

on(Rs.2455m

on)transferredtoPreoperaveexpenses.

2)GrossbockofPantandMachneryncude

sRs63.49m

on(Rs.63.49m

on)nrespectofexpendtureoncaptaassets,ownershpofwhchdoesnotvestwththecompany.

3)Fordetasofexchangedfferencecaptazed/decaptazedasperamendedAS11[ReerNote31(b)].

4)Captawork-n-progressncudespre-operaveexpensesRs.3,793.28m

on(Rs.830.16m

on).

5)Pre-operaveexpensesofRs.249.45m

o

n(Rs.47.02m

on)nrespectofprojectshavebeencaptazeddurngtheyear.

6)Borrowngcosts(net)transferredtofixeda

ssets/captawork-n-progresssRs.749.58m

on(Rs103.25m

on).

7)Incaseofasubsdary,engagednmanufac

turngofSpongeron,easehodandaggregangtoRs.398.41m

on(grossbock)a

cquredunderSchemeofArrangementsyettobetransferrednthenameofcompa

ny.

8)Incaseofasubsdary,engagednmanufac

turngofSpongeron,BudngsncudeRs.54.43m

on(grossbock)bengcontrbu

onforconstruconofkharandbunds(structure),ownershpofwhchvestswthth

estategovernmentauthores.

9)Durngtheyear,theparentcompanyhasre

vsedusefu

feofcomputersandmobephone(officeequpments)to4yearsand3yearsrespecveyduetowhchdeprecaonshgherbyRs.15.49m

onhasbeen

chargedtostatementofprofitandoss.


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104

(Rs. in million)

2012 2011

25. Purchases of traded goods

Purchases of traded goods 378 37 457 60

Total 378.37 457.6026. Changes in inventories of finished goods, work/goods in process

Inventories at the end of the year

Work / Goods in process 1,833 10 1,197 02

Finished Goods 8,527 48 5,835 24

10,360 58 7,032 26

Inventories at the beginning of the year

Work / Goods in process 1,197 02 1,476 84

Finished Goods 5,835 24 3,071 06

Add: On Acquision 613 67 4,100 08

7,645 93 8,647 98

(2,714 65) 1,615 72

Total (2,714.65) 1,615.72

27.Employee benefits expenses

Salaries, wages and Bonus 4,508 41 3,687 09

Contr buon to Provident and other funds 130 20 119 33

Employee compensaon expenses (1 51) (0 56)

Staff Welfare expenses 238 59 102 92

Total 4,875.68 3,908.78

28.Other expenses

Store and Spares consumed 2,375 99 1,692 52

Coang and Other Job charges 1,440 32 572 71

Power, Fuel and Water charges 1,923 68 1,420 53

Freight, Material Handling and Transportaon 3,504 95 4,464 14

Excise duty on (increase)/decrease on stock (9 25) 54 98

Construcon Cost

Sub contract costs 1,234 42 375 25

Plant hire costs 560 70

Tools and equipment 80 61

Temporary site installaons 160 14

Labour charges 170 97

Rent 397 43 330 79

Rates and Taxes 689 62 216 60

Repairs and Maintenance

Plant and machinery 342 89 228 23

Buildings 48 10 28 17

Others 169 21 81 63

Travelling and Conveyance expenses

Communicaon expenses

Professional and Consultancy fees Insurance

Directors' sing fees

Prinng and Staonery

Security charges

Membership and Subscripon

Vehicle expenses

Exchange difference (net)

Loss on sale / discard of fixed assets

Auditors remuneraon

Product Compensaon and Claims (Refer note 35)

Sales promoon expenses

Liquidated damages

Commission and discounts on sales

Provision for doubul debts and advances (net)

Bad debts and advances wrien off

Miscellaneous expenses

29.Finance costs

Interest on

Term Loans

Debentures / Bonds

Working Capital

Others

Other borrowing costs

Exchange difference (Net)

Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Fina


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140

12.FixedAssets

(Rs.inmillion)

GrossBlock

Depreciaon/Amorsaon

NetBlock

AsAt

01.04.2011

Addions

deducons

AsAt

31.03.2012

up

to

01.04

.2011

Addions

deducons

upto

31.03.2012

AsAt

31.03.2012

AsAt

31.03.2011

a)Tangibleassets

-

-

-

FreeholdLand

185.7

5

9.1

5

2.2

3

192.6

6

-

-

-

-

192.6

6

185.7

5

Buildings

3,8

67.7

1

800.9

9

-

4,6

68.7

1

503.3

8

112.3

8

-

615.7

6

4,05

2.9

5

3,3

64.3

3

PlantandMachinery

2

6,7

55.5

0

6,4

76.3

9

16.2

3

33,2

15.6

6

5,916.1

1

1,5

78.5

6

5.1

7

7,4

89.5

0

25,72

6.1

6

20,8

39.3

9

OfficeandOtherEquipments

308.9

8

62.6

7

32.0

9

339.5

6

104.1

4

53.0

0

9.0

9

148.0

5

191.5

1

204.8

5

Vehicles

56.9

1

2.7

0

3.2

3

56.3

9

21.2

6

5.2

5

1.3

5

25.1

7

31.2

2

35.6

5

FurnituresandFixtures

110.0

5

20.5

8

3.3

6

127.2

8

38.2

8

8.9

9

0.9

1

46.3

5

80.9

2

71.7

7

Total(a)

3

1,284.90

7,372.49

57.13

38,600.26

6,583.17

1,758.18

16.52

8,324.83

30,275.43

24,701.73

b)Intangibleassets

Soware

459.9

5

3.6

0

-

463.5

5

115.3

4

89.6

5

-

204.9

9

258.5

6

344.6

0

Total(b)

459.95

3.60

-

463.55

115.34

89.65

-

204.99

258.56

344.60

Total(a+b)

3

1,744.85

7,376.09

57.13

39,063.81

6,698.51

1,847.83

16.52

8,529.82

30,533.99

25,046.34

PreviousYear

2

9,683.49

2,101.21

39.85

31,744.85

5,057.64

1,658.03

17.15

6,698.52

25,046.34

-

CapitalWorkinprogress

1,979.48

4,951.39

Notes

1.

GrossblockofPlantandMach

ineryincludesRs63.4

9million(Rs.63.4

9million)inrespectofexpenditureincurredoncapitalasset,ownershipofwhichdoesnotvest

intheCompany.

2.

Depreciaon/AmorsaonfortheyearincludesRs.4.3

0million(Rs.1.3

8million)transferre

dtopre-operaveexpenses.

3.

Fordetailsofexchangediffere

ncecapitalisedasperamendedAS-11,

refernote31(b)

4.

Pre-operaveexpensesofRs.

249.4

4million(Rs.42.5

8million)inrespectofprojectshaveb

eencapitaizedduringtheyear.

5.

Borrowingcostalocatedtofixedassets/CapitalworkinprogressisRs.241.4

1million(Rs.Nil)

6.

CapitalWorkinprogressincludesPre-operaveexpensesofRs.52.6

0million(Rs.18.5

5million)

7.

Duringtheyear,thecompany

hasrevisedusefullfeofcomputersandmobilephone(Offi

ceequipments)to4yearsand3yearsrespecvelyduetow

hichdepreciaon

ishigherbyRs.15.4

9milionc

hargedtostatementofprofitandloss.

13. Non Current Investments

(valued at cost unless stated otherwise)

A. Trade Investments Unquoted

i) Wholly owned subsidiaries

Welspun Pipes Inc

10,001 (10,001) Equity Shares of USD 1 each

16,000 (16,000) Redeemable Preferred Stock of U

Welspun Pipes Limited


Welspun Infratech Limited (Refer note 43)

48,639,899 (24,750,000) Equity Shares of Rs 10 ea

28,300 (22,500) 7% Unsecured Oponally Converb

Welspun Tradings Limited

5,013,402 (5,013,402) Equity Shares of Rs 10 each

Welspun Natural Resources Private Limited

1,875,000 (1,425,000) Equity Shares of Rs 10 each

ii) Other Subsidiaries

Welspun Maxsteel Limited (Refer note 42(a))

113,622,058 (Nil) Equity Shares of Rs 10 each

Welspun Maurius Holdings Limited

102,089 (99,969) Equity Shares of USD 1 each

14,999,968 (14,999,968) Preference Shares of USD

Welspun Construcons Private Limited

Nil (10,000) Equity Shares of Rs 10 each

iii) Joint Venture

Dahej Infrastructure Private Limited (Extent of hol

500,000 Equity Shares of Rs 10 each

Less: Provision for diminuon in the value

iv) Associates

Red Lebondal Limited (Extent of holding 25%)

450 (450) Equity Shares of Euro 1 each

Welspun Energy Limited (Extent of holding 26%)

17,515,300 (273,000) Equity Shares of Rs 10 each

Notes forming part of the Financial Statemen

NotesformingpartoftheFinancialStatements


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148

(Rs. in million)

2012 2011

17. Inventories

(As taken, valued and cerfied by management)

Raw materials (including Goods in transit of Rs 2,775 64 million (Rs 3,633 54 million) 8,930 06 6,67015

Goods in Process 1,300 61 508 28

Finished goods 4,861 07 4,809 84

Stores and spares 1,406 75 1,168 08

Total 16,498.49 13,156.35

Details of Inventories Underbroad head.

Raw Materials

H R Coils 902 51 858 39

H R Plates 2,967 19 205 62

M S Slabs 1,915 39 1,775 03

Others 369 33 197 57

Goods in transit 2,775 64 3,633 54

Total 8,930.06 6,670.15

Goods in process

Welded Pipes 229 57 203 67

Coang 14 94 7 61

Plates and Coils 461 43 212 29

Others 594 68 84 71

Total 1,300.61 508.28

Finished goods

Welded Pipes 3,809 74 3,117 40

M S Plate 907 30 1,187 01

H R Coils 120 41 404 64

Coang 23 62 97 40

Others 3 39

Total 4,861.07 4,809.84

18. Trade receivables

(Unsecured and considered good, unless otherwise stated)

Over six months

Considered good 1,289 06 741 57

Considered Doubul 62 60 50 57

Less: Provision for doubul debts (62 60) (50 57)

1,289 06 741 57

Others considered good * 9,638 57 8,099 73

Total 10,927.63 8,841.30

* includes receivable from Subsidiaries Rs 2,760 50 million (Rs 127 15 million)

19. Cash and Bank balances

Cash and cash equivalents

Balances with banks:

Current accounts *

Unclaimed dividend accounts

Deposits having original maturity period of less t

Cheques on hand

Cash on hand

Other Bank balances

Deposits having original maturity period of more

twelve months

Deposits having original maturity period of more t

Margin Money Deposits

* includes Rs 25 56 m llion (Rs 29 51 million) bein

account, not available for use by the company

20. Short term loans and advances

(Unsecured considered good unless otherwise

Deposits

Related pares (Refer note 40)

Others

Loans and Advances to Subsidiaries

Share Applicaon Money to Subsidiaries

Other Loans and Advances

Advances recoverable in cash or in kind

Balances with government authories

Prepaid expense

Loans and advances to employees

Less: Provision for doubul advances

Notes forming part of the Financial Statements Notes forming part of the Financial Stateme


78/92

150

(Rs. in million)

2012 2011

21. Other current assets

Interest accrued on

Subsidiaries 248 33 26 11

Current Investment 616 13 145 04

Fixed deposits 45 79 67 18

Others 17 80 15 52

Receivable towards claim 76 31

Export benefits receivable 226 43 508 71

Assets held for disposal 8 46 8 46

Total 1,239.26 771.02

22. Revenue from Operaons

Sale of Product

Finished Goods 49,357 62 52,428 61

Traded goods 7,252 48 9,414 36

Other Operang Revenues (Refer note 46) 3,931 29 3,488 13

Revenue from Operaons (gross) 60,541.39 65,331.10

Less: Excise Duty 2,844 27 2,627 07

Revenue from Operaons (net) 57,697.11 62,704.03

Details of Sale of Product under broad head.

Finished Goods

Welded Pipes 29,227 10 33,336 45

M S Plates 14,793 23 15,360 89

H R Coils 3,097 70 2,113 02

Coang 460 97 393 21

Power 195 84 418 01

Steam 786 56 589 60

Others 796 22 217 42

49,357.62 52,428.61

Traded Goods

H R Coils 7,252 48 9,414 36

7,252.48 9,414.36

23. Other Income

Interest from

Subsidiaries 269 36 29 01

Current Investments 692 64 269 11

Fixed Deposits 133 64 197 26

Others 124 30 173 59

Profit on Sale of Fixed Assets (net) 0 10

Dividend Income 405 00 98 60

Profit on Sale of Investments

Miscellaneous Income

24. Cost of Materials consumed

Inventory at the beginning period

Add: Purchases

Less: Inventory at the end of the year

Details of Raw Material Consumed

H R Coils

H R Plates

M S Slab

Welding and Coang Materials

Others

25. Purchases of Traded GoodsPurchases of Traded Goods

26. Changes in inventories of Finished Goods, Goo

Inventories at the end of the year

Goods in process

Finished goods

Inventories at the beginning of the year

Goods in process

Finished goods

27. Employee benefits expense

Salaries, Wages and Bonus

Contribuon to Provident and other funds

Employee compensaon expenses (Net)

Staff Welfare expenses

Notes forming part of the Financial Statements Notes forming part of the Financial Stateme


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166

Note 45 Earnings Per Share (EPS)

2012 2011

I) Profit computaon for Basic and Diluted EPS

Profit aer Tax (Rs. in million)

64938 3,644 52

Add: Interest on Foreign Currency Converble Bonds (net of tax)(Rs in mil ion)

14998 233 98

Add: Interest on Compulsar ly Converble Debentures (net of tax)

(Rs in mil ion)

165 61

Profit aer Tax for Diluted EPS (Rs in mil ion) 964 97 3,878 50

II) Weighted average number of equity shares for EPS computaon

a) For Basic EPS (Nos) 219,028,187 204,549,256

b) For D luted EPS (Nos) 278,200,370 229,020,787

III) EPS on Face Value of Rs. 5 each

Basic (Rs ) 2 96 17 82

Diluted (Rs ) 2 96 16 94

Note 46 Other operang revenues

(Rs. in million)

2012 2011

Scrap sales 1,308 44 1,432 54

Value added tax incenve 670 30 508 15

Export benefits 480 50 1,321 77

Excess provisions wrien back 1,135 91 57 25

Others 336 14 168 43

Total 3,931.29 3,488.13

Note 47 Remuneraon paid or provided in accordance with secon 198 of the Companies Act, 1956 to the

Directors is as under:

(Rs. in Million)

2012 2011

Execuve

Chairman

Managing

Director

Whole

Time

Directors

Execuve

Chairman

Managing

Director

Whole

Time

Directors

Salaries and Allowances 10 00 10 00 9 01 5 50 4 74 17 62

Commission 1 78 52 08

Perquisites /

Contribuon to Provident Fund 0 26 0 50

Total 11.78 10.00 9.27 57.58 4.74 18.12

Note 48 Value of Raw Material Consumed

Imported

Indigenous

Total

Note 49 Value of Stores and Spares Consu

Imported

Indigenous

Total

Note 50 Value of Imports on CIF Basis in re

Raw Materials

Capital Goods

Stores and Spares

Traded Goods

Coal

Note 51 Expenditure in Foreign Currency

Freight, Material hand ing and Transp

Membership and other fees

Sales Commission (Net)

Finance Cost (including Bank charges

Professional and Consultancy fees

Coang and other Job work charges

Others

Notes forming part of the Financial Statements Notes forming part of the Financial Statemen


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170

C) Cash Flow from Financing Acvies

Proceeds from issue of equity shares (including securies premium)

(Refer note 2) 5,079 47 27 63Proceeds from issue of Compulsorily Converble Debentures 7,883 75

Proceeds from issue of debentures 10,000 00

Redempon of debentures (1,300 00)

Repayment of long term borrowi ng s (16 6 9) (3,181 13)

Increase/(decrease) in short term borrowings (net) 1,549 17 1,362 32

Interest expenses paid (1,506 0 1) (1,312 8 9)

Div idend paid ( includ ing corporate d iv idend tax ) ( 47507) (475 65)

Net cash from financing acvies ( C ) 12,514.62 5,120.29

Net changes in cash and cash equivalents (A+B+C) 244.72 (3,047.70)

Cash and cash equivalents at the beginning of the year 6,164 71 9,212 41

Cash and cash equivalents at the end of the year 6,409.43 6,164.71

Notes:1 Cash and Cash equivalents at end of year includes unrealised Profit of Rs 29 11 mil ion (Unrealized Loss of Rs49 29 mil ion)

being on account of Current Account/Fixed Deposits in foreign currency

2 Proceeds from equity shares includes Rs 5,072 68 million (net of issue expenses of Rs 108 17 mi lion) received from

"Global Depository Receipts" (GDR) (Refer note 2 (e) of Notes to Ac counts)

3 Cash and Bank balances include Rs 813 33 million (Rs 765 44 million) which is not available for use by the Company

4 Previous year figures have been regrouped/recast wherever necessary

As per our aached report of even date For and on behalf of the Board

For MGB & Co. B.K.Goenka R.R.Mandawewala

Chartered Accountants Execuve Chairman Director

Firm Registraon Number 101169W

Jeenendra Bhandari Braja Mishra B.R.Jaju

Partner Managing Director Chief Financial Officer

Membership Number 105077

Place: Mumbai Pradeep Joshi

Date: 29 May 2012 Company Secretary

STATEMENTPURSUANTTOSECTION212OFTHECOMPANIESACT,1956,RELATEDTOSUBSIDIARYCOMPANIES

NAMEOFTHESUBSIDARYCOPANY

WELSPUN

NATURA

RSOURCES

PVT.LTD.

WELSPUN

PLASTICS

PVT.LTD.

WELSPUN

MAXSTEEL

LTD.(1)

WELSPUN

PPES

NC

WELSPUN

TUBULAR

LLC

WELSPUN

GLOBAL

TRADE

LLC

WELSPUN

PIPES

LTD.

WELSPUN

TRADNGS

LTD.

WELSPUN

INFRATECH

TD.

WELSPUN

ROAD

PROJECTS

PVT.LTD

WELSPU

N

PROJECTS

LTD

MSK

PROJECTS

(HMMATNAGAR

BYPASS)

PRVATELTD.

MSK

PROJECTS

(KMMANDAVI

CORRDOR)

PVT.LTD.

WELSPUN

INFRA

PROECTS

PRVATE

LMITED

WELSPUN

ENERGY

TRANSPORTATON

PVT.LTD.

WELSPUN

WATER

NFRASTRUCTURE

PVT.LTD

ARSSBUS

TERMINAL

PRVATE

LTD(2)

WELSPUN

BOT

PROJECTS

PRIVATE

LTD(3)

ANAR

ROAD

PRIVATE

LTD(4)

WELSPUN

MAURTUS

HOLDNGS

LTD

WELSPUN

MIDDLE

EAST

DMCC

WELSPUN

MIDDLE

EASTPPES

COATNGS

COMPANYLLC

WELSPUN

MIDDLE

EASTPIPES

COMPANY

LLC

FINANCIALYEAROFTHE

SUBSIDIARYENDEDON

31stMarch,

2012

31tMarch

2012

31stMa

rch,

2012

31stMarch,

2012

31stMarch,

2012

31tMach

2012

31stMarch,

2012

31stMarch,

2012

31stMarch,

2012

31tMach

2012

31stMarch

2012

31stMarch,

2012

31stMarch,

2012

31stMarch,

2012

31stMarch,

2012

31stMarch,

2012

31tMach

2012

31stMarch,

2012

1stMarch

2012

31stMach

2012

31stMarch,

2012

31stMarch,

2012

31stMarch,

2012

SHARESOFTHESUBSIDIARYCOMPANY

HELDONTHEABOVEDATE

ANDEXTENTOFHOLDING

(i)Equityshares

18

75

000

equ

ty

sharesof

Rs10

each

-

113622

058

equtysh

ares

ofRs10e

ach

10001

common

stockof

US$1each

-

-

50000

equty

sharesof

Rs10

each

5013402

equ

y

sharesof

Rs10

each

48

639

899

equty

sharesof

Rs10

each

-

-

-

-

-

-

-

-

-

-

102089

equ

y

sharesof

US$

1

each

-

-

-

(ii)PreferenceStock

-

-

-

16000

preference

stockof

US$1000

each

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

1

49

99

968

preference

sharesof

US$1each

-

-

-

(ii)Extentofhoding/Contro

100%

100%

87.35

%

100%

100%

100%

100%

100%

100%

100%

61.12

%

100%

100%

60%

100%

100%

45%

100%

100%

8998%

100%

50.0

1%

50.0

1%

Netaggregateamount

Cash Flow Statement for the year ended 31 March

(Rs Million)

2012 2011


89/92

173172

C rp Ltd

PIPESEGMENT

PLATE CUMCOIL MILLSEGMENT

INFRASTRUCTURESEGMENT

1. Whatis thecurrentcapacityofPipesin India,US &Saudi?Whetherthecompanyis lookingforanyfurther

expansionplans?

The current pipe manufacturing capacity is 2.20 million MTPA as explained on page no.50 (Figure 24),

includes the US capacity of 0.35 million MTPA and Saudi capacity of 0.30 million MTPA. The new LSAW

capacityof0.35millionMTPAin Indiagotcommissionedin Q3FY12.TheCompanyhasinitiatedthe capacity

expansionof0.175millionMTPAofERWin US,whichwouldgetcommissionedby FY13,and the0.05million

MTPA of HSAW capacity extension of the Mandya plant to be commissioned in FY13. With these additions,

thetotalworldwidemanufacturingcapacitywouldstandat2.425millionMTPA.

2. WhatisthecurrentutilizationlevelfortheCompanyinIndia,SaudiandUS pipeplants?

The combined utilization levels in India, Saudi and US plants was ~ 44% for FY12 on an annualized basis.

The capacity utilization depends on the diameter and thickness of the pipes. The new LSAW plant in Anjar

was commissionedin December2011,thereforeutilizationhasbeencalculatedon anannualizedbasis.The

plantwouldtake2 3yearstorampupand reachoptimalutilizationlevel.

3. WhatistheproductionandsalesvolumeinpipesforFY12?

Theproductionofweldedpipeswas819KMTin FY12andthesalesvolumeofpipeswas835KMTin FY12.

4. HowmuchwastheUSProductionduringtheyear?WhatwastheSalesfromtheUSPlantduringtheyear?

During the year, the US plant has produced 210K MT of spiral welded pipes with utilization level of 60%.

RevenuefromtheUSPlantwasRs. 16,987million(US$354million)forFY12.

5. HowmuchwastheSaudiProductionduringtheyear?WhatwastheSalesfromtheSaudiPlantduringtheyear?

TheSaudiPlantstartedproductioninthe lastquarterof FY11,and produced136KMTof spiralweldedpipes

inFY12.RevenuefromtheSaudiPlantis~Rs.6,012millionduringtheyear.

6. WhatistheproductioninthePlateMill? Whatistotalsaleof platesduringtheyear(ExternalandInternal)?

TheCompanyproduced507KMTof platesduringthe year.The total platesaleduringtheyearwas 531KMT,

outofwhich441KMTisexternalsalesand90KMTisinternalconsumption.

7. Whatistheoutlookontheinfrasegment?WhatistotalSalesinInfraaddedtoWCL duringtheyear?

Welspuns infrastructure business (Welspun Projects Limited & Leighton Welspun Contractors Private

Limited) has shown positive EBITDA growth and resultant PAT has remained marginally positive after

accountingfor interestanddepreciationinFY12.As farasthe developmentofthebusinessis concerned,the

opportunitysizecontinuesto bestrong,withWelspunhavingitsfootprintsacrossall thecoreinfrastructure

sectors.ThetotalInfrabusinesssalesforFY12are~ Rs.8,970millionafteraccountingfortheconsolidationof

WelspunProjectsLi mitedand LeightonWelspun ContractorsPrivateLimited (w.e.f.28thApril 2011).During

the year, Welspun Infratech Limited, subsidiary of the Company, acquired 45% stake in ARSS Bus Terminal

PrivateLimitedatacostofRs.77million.

8. Whatis thecurrentOrderBookPositionin PipesandPlatesby Value?Whatis thepercentageexportand

domesticbreakupby volume?

Thecombinedorderbookpositionof thecompanystandsat Rs.91,850million(~ US$1.67billion)asof June

22,2012.Thecurrentorderbook consists ofpipe orders of1,242KMT andexternal plateorders of55K MT,

with additional internal plate orders of 107K MT. 81% of pipe orders are from international markets like

NorthAmerica,MiddleEast,NorthAfrica,andSouthEastAsia.

9. WhoaretheMajorClientsonthe OrderBook?

TCPL,Enbridge(Canada) GAIL,(India) SaudiAramco,RTCCWasia,Al WASIT,(MiddleEast)

Zakhim,(Nigeria) PTTEP,(Thailand) Enterprise EPCO,Access,(US)

10. Whatarethekeyexportmarketsforthecompany?

The key export markets for the Company are the markets in North America, Middle East, South East Asia,

Africa, Bangladesh, and Europe. The Company has a well established sales network across the globe with

marketingofficesin MumbaiandDelhi(India),Dammam(SaudiArabia),Dubai(UAE)andHouston(USA).

11. Whatarethenewmarketsinpipessector,thecompanyislookingfor?

ThenewmarketsfortheCompanyaremainlyCIScountries,Europe,partsofMiddleEast,Africa,Iraqand Far

East. TheCompanyhas asizeableexistingbusinessin FarEastbutfrom ourbusinessdevelopmentinitiative,

wearelookingtoreinforceandthisaddsto oureffortsto gathermoremarketsharein theFarEasternmarket.

Further, with growing popularity of natural gas and major investment taking place in the under exploited

regions likeIraqin Middle EastandNigeria,Ghana,Angolain Africa providea significantopportunityto the

company for focusing upon and securing sizeable market share for line pipes in these regions. On the Latin

Americaside,we areseeingthreemarketswhicharefairlyactive;Brazil,Venezuela,ColumbiaandArgentina.

WearealsoseeingsomedemandemerginginMexicowhichwilladdfurthervaluetotheUSmill.

12. HowisthecompanylookinginPipessectortowardsthegrowingdomesticmarket?

Thedomesticmarket is growingat areasonable pace.Basedon theexistingpipelineprojects,the domesticpipelinerequirementsisexpectedtobegoodin thenextyearstocomewithexpenditureplansfrommajoroil

& gas pipeline players like GAIL (Gas Authority of India Limited), RGTIL (Reliance Gas Transportation India

Limited) and GSPL (Gujarat State Petronet Limited). GAIL plans to invest majorly over the next 2 3 years in

expanding its pipeline network to connect consumption centers, as the company looks to expand its gas

network in North India. Welspun is looking towards this opportunity in the domestic market and started

bidding forthe recentlyannounced projects.

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13. Whoarecustomersthatthecompanyhasgotaccreditationsfrom?

TheCompanyhasgotaccreditationsfromover50OilandGasmajorsworldwide.Tolist,someofthemare:

14. Whatisthecurrentgrossandnetdebtpositionasat31stMarch2012?

Thegrossdebt(secured& unsecured)isRs. 53,407millioncomprisingof longtermborrowingsof Rs.39,714

million,currentportionoflong termborrowingsof Rs.5,920million,andshorttermborrowingsof Rs.7,773

millionasof31stMarch2012.

The Net Debt Position for the company is Rs. 23,721 million after taking into account Cash and Liquid

Investmentsof Rs.29,686million.

15. WhatistheNetDebttoNetworthratioforthecompany?

TheNetDebtof theCompanystandsat Rs.23,721million,whilethe NetWorthofthe Companyis Rs.49,139

million comprising of Share Capital of Rs. 1,139 million, Reserves & Surplus of Rs. 40,117 million and

CompulsoryConvertible Debenturesof Rs.7,884 million.

TheNetDebttoNet worthratioforthe companyforFY12standsat0.48indicatinga strongBalanceSheet.

16. WhatistheInventoryleveloftheCompany?WhatistheInventoryturnoverforthecompanyduringtheyear?

Inventory increased by Rs. 7,348 million to Rs. 25,827million mostly due to increasei n raw materials of Rs.

3,454 million, finished goods of Rs. 2,692 million, and stores and spares of Rs. 566 million. This increase ininventory also includes the inventory consolidated after the acquisition of Welspun Maxsteel Limited and

aftertheacquisitionof35%stakeinLeightonWelspunContractorsPrivateLimitedduringFY12.

Theinventoryturnoverdayshaveincreasedfrom84daysofNetSalesinFY11to 105daysof NetSalesinFY12.

17. Whatwerethefundsraisedduringtheyearby theCompany?

Asof 31stMarch 2012totalshareoutstandingwere 227.78millionshares.InFY12,InsightSolutionsLimited

andGraneleLimitedinvestedapproximatelyUS$293millioninWCL.ApproximatelyUS$178millionhave

DEBT/ INVENTORYPOSITION

OTHERS

been invested by way of the preferential allotment of Compulsorily Convertible Debentures (CCDs) and

approximately US$ 115 million by way of non voting Global Depository Receipts (GDRs). The CCDs carry a

coupon of 5% and will be mandatorily fully converted within 18 months into equity shares at Rs. 225 per

share, which represents 13.3% of the equity capital of WCL. Funds affiliated with Insight Solutions Limited

have also subscribed for non voting GDRs of US$ 115 million at the same price of Rs. 225 per share. The

above outstanding shares of 227.78 million include the GDRs of 23.02 million shares. The total shares

outstandingaftertakingintoconsiderationofCCDsandsomeESOPswouldbe263.47million.

18. WhatistheplannedCAPEXforthecompanyforthefurtherexpansionplans?

There are no further expansion plans for the company besides the ongoing expansion of 175,000 MTPA ERW

plant in Little Rock, US for US$ 80 million. There would be regular maintenance and need based capex during

FY13andFY14.

19. Whatarethestrategicinitiativestakenbythecompany?

During FY12 the Company acquired 87.35% equity stake in Welspun Maxsteel Limited, major producer of

SpongeIronandhas consolidatedit asa subsidiaryfromAugust13,2011.

The Company also bought 35% stake in Leighton Contractors (India) Private Limited subsequently renamed

asLeighton WelspunContractorsPrivateLimited, LWIN.

Welspun Infratech Limited (100% subsidiary of the Company) has acquired 45% equity stake in ARSS Bus

TerminalPrivateLimitedinAugust2011.

COMPANY NAME COMPANY NAME COMPANY NAME

GAIL India

GASCO

GASCO Egypt

GAZPROM Russia (STROYTRANSGAZ)

KINDER MORGAN US

N A O C Nigeria

NPCC

NTPC

ONGC India

PETRO CHINA

PETRONAS Malaysia

PDO Oman

PGN Indonesia

PTTEP Thailand

UAE

UAE

India

AGIP Jordon

AL WAS T UAE

BECHTEL US

BRITISH GAS

BRITISH PETROLEUM

CHINA NATIONAL PETROLEUM CORPORATION

CPMEC China

CHEVRON US (Framework Agreement)

DOW

EL PASO US

EGYPTIAN GENERAL PETROLEUM CORPORATION

ENTERPRISE US

EXXON MOBIL (GOLDEN PASS PIPELINE) US

GROUP F VE Saudi Arabia

US

QATAR PETROLEUM

RELIANCE NDUSTRIES LIMITED

SA PEM taly

SAUDI ARAMCO

SHELL

S TO LT O FF SH OR E U K

SONATRACH Alger a

TOTAL France

TECHN P

TRANSCANADA (Long Term Contract)

UNOCAL

PERU LNG (HUNT OIL)

VIETSOPETRO

SWCC

India

US

ACERGY

France

US

US

Russ a/Vietnam

Ind a


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wcl annual report 2011 -12

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