1.  Foreign Currency Convertible Bonds (FCCB)
 
 a) During the last financial year, the Company has raised US$ 150
 million (Equivalent INR 6,942 million) by way of issue of 1500 4.5%
 Foreign Currency Convertible Bonds (FCCB) of US$ 100,000 each. The
 Bondholders have an option to convert these bonds into 24,010,000
 equity shares at an initial conversion price of Rs. 300 per share of
 Rs. 5 each fully paid up with a fixed rate of exchange on conversion of
 Rs. 48.02= US$ 1 at any time on or after November 26, 2009 until 10
 days prior to Maturity date (i.e October 17, 2014). Unless previously
 converted, redeemed or repurchased and cancelled, the Bonds will be
 redeemed on October 17, 2014 at 102.8028% of the principal amount so as
 to give a gross yield of 5% per annum (calculated on semi annual basis)
 to the Bond Holders.
 
 The Company has an option to redeem the Bonds at their Early Redemption
 Amount upon occurrence of events specif ed in the Of ering Circular
 issued by the Company for issue of the Bonds (Of ering Circular).
 Further, the Company has the option to mandatorily convert the Bonds
 after three years as specif ed in the Of ering Circular.
 
 b) Premium payable on redemption of FCCB aggregating to Rs. 33.80
 Million (Rs. 15.62 million) has been adjusted against Securities
 Premium Account (SPA) as per Section 78 of the Companies Act, 1956. In
 the event that the holders of FCCB exercise the conversion option, the
 amount of premium utilized from SPA will be suitably adjusted in
 respective years.
 
 c) Part of the net proceeds received from the issue of FCCB has been
 utilized as per object of the issue viz for funding of Plate and Coil
 Mill, Pipe Mill Capex Projects (Anjar and Mandya) and Investment in
 overseas Subsidiary. Pending utilization, the balance issue proceeds of
 USD 77.41 million equivalent INR 3,452.28 million (USD 122.35 million -
 equivalent INR 5,493.66 million) have been invested in short term
 deposits/current account with a Bank abroad and Rs. 2.8 million (Rs.
 Nil) lying in current account with a bank in India.
 
 2.  Employee Stock Options Scheme
 
 In respect of options granted under the Welspun Employee Stock Options
 Scheme, in accordance with the guidelines issued by Securities and
 Exchange Board of India, the value of options (based on intrinsic value
 of the share on the date of the grant of the option) is accounted as
 deferred employee compensation, which is amortized on a straight line
 basis over the vesting period. Salaries, wages and allowances include
 credit of Rs.0.56 million (debit of Rs. 13.06 million) being
 amortization of deferred employee compensation under Employee Stock
 Options Scheme.
 
 During the year, 339,750 equity shares and 6,750 equity shares of Rs. 5
 each fully paid up were issued at a price of Rs.  80.00 and Rs. 66.75
 each respectively. Discount allowed aggregating to Rs. 9.24 million
 (Rs. 30.40 million) in respect of shares allotted pursuant to Stock
 Options Scheme is credited to Securities Premium Account as per
 guidelines of Securities and Exchange Board of India.
 
 3.  Secured Loans
 
 b) Term Loan from Banks
 
 Rs. Nil (Rs. 3,181.13 million) are secured by first charge ranking pari
 passu by way of mortgage / hypothecation of entire immovable and
 movable fixed assets of the Company both present and future and also
 secured by second / f oating charge on current assets subject to prior
 charge in favour of banks for working capital facilities.
 
 c) External Commercial Borrowings (ECB)
 
 Rs 6,789.68 million (Rs. 6,789.99 million) is secured by first charge
 ranking pari passu by way of mortgage / hypothecation of entire
 immovable and movable fixed assets of the Company both present and
 future. Further, the ECB is also secured by exclusive charge by way of
 hypothecation of Debt Service Reserve Account.
 
 d) Working Capital facilities from Banks
 
 I) Rs 827.06 million (Rs Nil) are secured against pledge of Fixed
 Deposit Receipts of Rs 870.59 million (Rs Nil).
 
 II) Rs 551.95 million (Rs Nil) are secured by first charge by way of
 hypothecation of raw materials, f nished goods and goods in process,
 stores & spares and book debts of the Company and second charge on
 entire immovable and movable fixed assets of the Company both present
 and future of the Company.
 
 5.  Foreign Exchange Dif erences
 
 a) Loss on account of dif erence in foreign exchange on
 realignment/realization and on cancellation of derivative instruments
 amounting to Rs. 351.05 million (Rs. 5.30 million) is adjusted under
 respective heads of income or expenses in the profit and loss account
 to which it relates and exchange dif erence loss of Rs. 7.93 million
 (Rs. Nil) other than (b) below, has been adjusted to the carrying cost
 of fixed assets/capital work in progress.
 
 b) The Companies (Accounting Standards) Amendment Rules 2009 has
 amended the provision of AS-11 related to The ef ects of changes in
 Foreign Exchange Rates vide notif cation dated March 31, 2009 (further
 amended on 11 May 2011) issued by the Ministry of Corporate affairs.
 Accordingly, the Company has adjusted exchange dif erence loss
 amounting to Rs. 8.84 million (Gain of Rs. 348.36 million) to the cost
 of fixed assets and capital work in progress and exchange dif erence
 gain of Rs. 130.28 million (Gain of Rs. 93.76 million) is transferred
 to Foreign Currency Monetary Item Translation Dif erence Account to
 be amortized over the balance period of such long term assets /
 liabilities but not beyond March 31, 2012. Out of the above, gain of
 Rs. 65.14 million (Gain of Rs. 18.34 million) has been adjusted in the
 current year and gain of Rs. 65.14 million (Gain of Rs. 75.42 million)
 has been carried over.
 
 c) The Company has early adopted AS-30 as referred to in Note A (i) of
 the Signif cant Accounting Policies and accordingly loss of Rs. 54.29
 million (Rs. 31.86 million) related to foreign exchange dif erence on
 Cash Flow Hedges for certain firm commitments and forecasted
 transactions is recognized in Shareholders'' Funds and shown as Hedging
 Reserve Account.
 
 4.  Contingent Liabilities not provided for
 
                                                 (Rs. In million)
 
 Particulars                       31 March 2011     31 March 2010
 
 Performance Guarantees/Bid Bond 
 given by banks to company''s customers /
 government
 authorities etc.                    20,025.53          15,697.13
 
 Corporate Guarantees given by the 
 company [includes Rs. 4,793.97 
 million (Rs. 5,246.70 million)
 given on behalf of subsidiaries for 
 Loans/Liabilities taken by them. 
 Loans / Liabilities outstanding
 against these guarantees are 
 Rs. 3,658.57 million 
 (Rs. 5,018.83 million)]              9,400.57           6,385.27
 
 Letters of Credit outstanding 
 (net of liability provided) for 
 company''s sourcing                   8,798.71          15,840.28
 
 Claims against the Company not 
 acknowledged as debts                   47.82              13.46
 
 Custom duty on pending export 
 obligation against import of 
 Raw Materials                          313.89             561.36
 
 Disputed indirect tax liabilities      160.61              75.75
 
 5.  In the previous year, one of its customer initiated legal action
 against the company in the United States of America claiming loss /
 damages of $ 66 million on account of defects in the pipes supplied and
 withheld payment of USD 19.98 million. The Company provided said
 withheld amount in the financial year 2008-09 as quality claim and
 adjusted against sales as per the accounting practiced followed. During
 the year, the Company has entered into agreement with the said
 customer, settling the claim at USD 65 million. Out of the balance
 claim, the Company agreed to make payment of USD 25.02 million over a
 period of 36 months and balance USD 20 million shall be adjusted
 proportionately from the potential business from said customer. The
 Company has provided the quality claim of USD 45.02 million equivalent
 to Rs. 2,007.55 million in these accounts. The Company has also
 initiated legal action against the steel supplier which is pending, to
 which company expects to arrive at settlement soon.
 
 6.  Disclosures pursuant to adoption of Accounting Standard 15
 (Revised 2005) Employee benefits
 
 The Employees gratuity fund scheme managed jointly by Kotak Life
 Insurance Limited and India First Life Insurance Company Limited is a
 def ned benefit plan. The present value of obligation is based on
 actuarial valuation using the projected unit credit method. The
 obligation for leave encashment is recognized in the same manner as
 gratuity.
 
 7. Capital Projects
 
 (i) Pre-operative Expenses of Rs. 42.58 million (Rs. 488.98 million) in
 respect of projects capitalized during the year have been allocated
 proportionately to the direct cost of respective building and plant and
 machinery.
 
 (ii) Borrowing costs capitalized / allocated to fixed assets / Capital
 work in progress is Rs. Nil (Rs. 47.87 million).
 
 (iii) Estimated amount of contracts remaining to be executed on Capital
 account and not provided for Rs. 2,559.62 million (Rs. 3,415.52
 million), net of advances.
 
 (iv) Capital Work in Progress, includes Capital Advances Rs. 1,085.88
 million (Rs. 929.06 million) and Pre-operative expenses Rs. 18.55
 million (Rs. 35.35 million).
 
 8. Segment Reporting
 
 i) The Company is engaged in the business of steel products which in
 the opinion of the management is considered the only business segment
 in the context of Accounting Standard – 17 on Segment Reporting.
 
 9.  Welspun Infratech Limited (the Acquirer) a wholly owned
 subsidiary of the Company has entered into a Share Purchase Agreement
 with the erstwhile promoters and other shareholders of Welspun Projects
 Limited (formerly MSK Projects (India) Limited (a Company engaged in
 infrastructure development and listed on Bombay Stock Exchange,
 National Stock Exchange and Vadodara Stock Exchange)) (the Target
 Company) to transfer 5,279,438 equity shares (23.13%) of the Target
 Company at a price of Rs. 130.50 per share and also entered into a
 Share Subscription Agreement to subscribe to 17,178,888 equity shares
 of the Target Company at an issue price of Rs. 123 per share and
 consequently has made a public announcement to the existing
 shareholders of the Target Company to acquire 20% of post preferential
 issue equity share capital of the Target Company at a price of Rs.
 130.50 per share in terms of SEBI Guidelines. Post completion of the of
 er, the Acquirer holds 24,448,445 equity shares (61.12%) in the issued
 equity share capital of the Target Company. The change in the control
 of the Target Company completed on 16 August 2010.
 
 10.  Unsecured Optionally Convertible Debentures (OCD)
 
 During the year, the company has subscribed to 7% 22,500 Unsecured
 Optionally Convertible Debentures (OCDs) of face value Rs. 100,000 each
 aggregating to Rs. 2,250 million issued by Welspun Infratech Limited
 (wholly owned subsidiary of the Company). The tenure of OCDs is f ve
 years bearing interest @ 7% p.a. for first three years and @ 11% p.a.
 for the remaining period if not redeemed earlier. The Company has the
 option to convert the said OCDs into equity shares at any time within
 three years as per the terms of the issue.
 
 11.  The Company has been getting majority of the export orders and
 executing those orders through one of its subsidiaries.  The
 realization, income/ benefits, claims or expenses relating to such
 transactions are transferred / paid immediately to the Company allowing
 it to retain a reasonable profit margin.
 
 12.  Sundry Creditors include an amount of Rs. 368.75 Million (Rs.
 214.59 million) being VAT collected on Sales. The Company has withheld
 the amount on account of its claim for set of against VAT incentive
 limit. If claim of the Company is not accepted, the amount will be paid
 and contested in appeal.
 
 13.  During the year, the company has received Export rebate benefits
 of Rs. 733.80 million on receipt of favourable judgement from Hon''ble
 Supreme Court which is included in Sales and Services.
 
 14.  Bad debts and advances written back (net) in manufacturing and
 other expenses includes bad debts recovered amounting to Rs. 134
 million, which was adjusted in sales in the previous year.
 
 15.  Previous year''s figures have been regrouped / rearranged / re
 casted wherever considered necessary to confirm to this year''s classifi
 -cation. Figures in brackets pertain to previous year.