WELSPUN Projects Ltd.

www.welspunprojects.com

Welspun House, 4th Floor, Kamala City, Senapati Bapat Marg, Lower Parel (W), Mumbai – 400 013, INDIA.
Contents

Corporate Information 2

Chairman Statement 4

Directors' Report 8

Corporate Governance Report

Management Discussion and Analysis 24

Financial Section 38

Forward looking statement

In this Annual Report we have disclosed forward-looking information to enable investors comprehend our prospects and
take informed investment decisions. We have tried, wherever possible, to identify such statements by using words as
'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, whether as a result of new information, future events or otherwise.
 KEY MANAGEMENT TEAM

CORPORATE INFORMATION

Board of Directors
Mr. B. K. Goenka Mr. A. K. Dasgupta
Mr. R. R. Mandawewala Mr. Atul Desai
Mr. Sandeep Garg Mr. M. K. Tandon
Mr. Nirmal Gangwal

Company Secretary Audit Committee

B. K. Goenka
Ms. Susheela Maheshwari Mr. A. K. Dasgupta *Chairman
Mr. Atul Desai
Mr. M. K. Tandon
Statutory Auditor
Chandrakant & Sevantilal & J.K. Shah & Co.

Shareholder/Investor Grievance Committee Remuneration Committee

Mr. B. K. Goenka Mr. Nirmal Gangwal
Mr. Sandeep Garg Mr. Shailesh Vaidya
Mr. Atul Desai Mr. A. K. Dasgupta

Registered Office Corporate Office

Welspun City, Village Versamedi Welspun House,
B. R. Jaju Parvez Umrigar
Taluka Anjar, Dist Kutch 3rd Floor, Kamala City,
CFO, Welspun Corp Ltd. Managing Director & CEO,
Gujarat-370110 Senapati Bapat Marg,
Welspun Infratech Ltd.
Tel : 0283 627 9071/74/41/44 Lower Parel (W), Mumbai 400013
Fax. : 0283 627 9060 Tel.: 022-66136000 Fax: 022-24908020

Stock Exchanges where the Company's securities are listed

Bombay Stock Exchange Ltd. Vadodara Stock Exchange Ltd.
Phiroze Jeejeebhoy Towers, Dalal Street, 3rd Floor, Fortune Tower,
Mumbai - 400 051 Sayajigunj, Vadodara - 390005.

National Stock Exchange of India Ltd.

Exchange Plaza, Bandra Kurla Complex,
Bandra (E), Mumbai - 400 051

Deepak Chauhan Sandeep Garg

Registrar and Transfer Agent Bankers President, Legal, Managing Director,
Purva Sharegistry (India) Pvt. Ltd. Bank of Baroda State Bank of India Welspun Infratech Ltd. Welspun Projects Ltd.
Unit No. 9, Shivshakti Industrial Estate, Bank of India IDFC
J.R Boricha Marg, Opp Kasturba Hospital Lane, Corporation Bank Dena Bank
Lower Parel (E) Mumbai 400 011 HDFC Bank Limited Axis Bank
IDBI BANK Punjab National Bank
Kotak Mahindra Bank

* Non-Executive Member of the Board of Directors

 The 11th Five-Year Plan (2007- 2012) had already identified that inadequate
infrastructure was a major constraint on the country’s rapid growth. The 12th Plan had,
therefore, emphasised the need for massive inflow of funds into the infrastructure sector,
based on a combination of public and private investments, the latter through various forms
of public-private partnerships (PPP).

During FY12, we have executed 10 projects worth Rs 768 crore in sectors like roads & highways,
industrial structures, buildings, water supply etc. Some of these are Non-Plant Building project
During FY12, we have at Panipat, Residential Building project at Bhilai, Building Work for RIB-I at the Opal Dual Feed
executed 10 projects Cracker and Associated Units in the Dahej Petro Chemical Complex, Augmentation of Water
Supply Scheme at Umargam, Dist. Valsad etc.
worth Rs 768 crore in
sectors like roads &
These achievements were possible only because of our project management expertise, cutting-
highways, industrial edge technology and design innovation. The company is set to play a larger role in the infrastructure
structures, buildings, space.
water supply etc. In the case of BOT (Build Operate Transfer) road projects, we have received one under our own name
i.e. Chirai-Anjar Road project valued at Rs. 260 crore. However, we have successfully completed six
BOT (Toll) road projects with a total length of over 500 km and a capital expenditure of over Rs. 1000
Crores The signature project among these is the 142.6 km long Dewas-Bhopal Corridor linking Bhopal
and Dewas on SH 18 in Madhya Pradesh. We have also been awarded the Mohali water supply
project valued at Rs. 156 crores.

My dear fellow stakeholders, Other significant achievements are the construction of an 80MW captive power plant and the
Memorial Building at Anjar. Both these projects are important because of certain unique features. In
In most Countries, Infrastructure is considered to be a sector of immense strategic importance. Hence, it the captive power plant at Anjar, we have built a 110m high chimney which also involved erection of
usually enjoys high priority treatment from administrative bodies. In India, however, the Infrastructure coal handling structure at height of 62.5m. Similarly, in the Memorial building at Anjar, we have
story is somewhat different. Development of this crucial sector has been plagued with issues of fabricated and erected a steel dome with a diameter of 40.3m and height of 18.5m.
implementation. As a result, the pace of growth has simply been much slower than the needs of the
economy, especially one that aims at maintaining a sustained growth rate of close to nine per cent. Looking at the future, we are well poised to play a bigger role in the infrastructure space.
Currently WPL is executing projects like the Baramunda Bus terminal, Vapi Buildings and
FY 12 has not been so good for the sector and it has seen a considerable slowdown. The annual in house Industrial/Building projects in Anjar. All these projects are expected to be
performance of the crucial infrastructure sectors, including highways, oil & gas, water, urban completed by 2014.
infrastructure and others, during the fiscal has been poor. Most of these segments witnessed negative
growth. The year also saw contraction in the number of start-ups as well as in the planned investment Our commitment to building India’s infrastructure goes beyond business. In
announced by both the private and public sector. In case of roads, the National Highways Authority such a difficult environment, your Company has worked very hard to
of India (NHAI) widened/upgraded 2,200 km of highways during 2011-12. This was 10.1 per cent deliver results. Careful underwriting, anticipating risks and proactive
lower than the target of 2,500 km for the period. It was also 29 per cent less than that achieved in problem solving have allowed us to protect our asset quality. With
the previous year. In India, last year water and real estate sectors have recorded a growth rate of your support and encouragement, I can assure you of WPL’s
over eight per cent. strong continued commitment to building sustainable and
inclusive infrastructure in India.
Despite the overall picture being grim, it turned out to be a good year for Welspun Projects Ltd (WPL),
especially when compared to FY11. We are growing at a decent pace and improving our performance.
Our standalone and consolidated revenues increased by 26 per cent and 41 per cent respectively
compared to the previous year, which itself is a testimony to our accomplishments as a Civil
Contractor.
- B K Goenka
Chairman
80MW Captive Power Plant – Anjar
Welspun Project Ltd is the EPC contractor for the 80
MW Captive Power Project in Anjar. The project
involves supply and construction of TG unit, Air
Cooled Condensers (ACC), Chimney, Panel Rooms,
Demineralisation Plant, Warehouse, Crusher &
Screening House, Coal Handling Unit and other
miscellaneous structures.
 18th Annual Report
2011-12

Your directors appreciate the resigning directors for rendering their services during the tenure of their directorship
in the Company.

Directors’ Report In accordance with the requirements of the Companies Act, 1956 and Article 150 of the Articles of Association of
the Company, Mr. A K Dasgupta and Mr. Nirmal Gangwal, Directors of the Company retire by rotation at the
forthcoming Annual General Meeting and being eligible, have been recommended for re-appointment.
Dear Members,
Details about these directors are provided in the Notice of the ensuing Annual General Meeting being sent to the
Your directors have pleasure in presenting the 18th Annual Report together with the Audited Financial Statement along with shareholders along with Annual Report.
the Report of the Auditors for the financial year ended on March 31, 2012.

I. Financial Performance V. Fixed Deposits

(Rs. in Lacs)
Particulars FY 2011-12 FY 2010-11 During the financial year 2011-12, the Company did not accept any deposits within the meaning of Section 58A of
the Companies Act, 1956 read with rules made there under.
Revenue from Operation 26,759.41 17,812.37
Toll Collection 6,938.11 6,057.63
VI. Auditors
Other Income 2,162.39 2,134.59
Change in Work in Progress (2,219.55) 2,141.24 Your Company’s Statutory Auditors, M/s Chandrakant & Sevantilal & J. K. Shah & Company, Chartered Accountants,
retire at the ensuing Annual General Meeting and being eligible, have given their consent to act as the Statutory
Total Income 33,640.36 28,145.83 Auditors of the Company for the forthcoming tenure. Members are requested to consider their re-appointment as
Total Expenditure 33,270.87 31,248.17 the Statutory Auditors of the Company and to fix their remuneration by passing an ordinary resolution under
Section 224 of the Companies Act, 1956.
Profit Before Tax 369.49 (3,122.34)
Less : Provision for Tax 37.27 34.37
VII. Auditors’ Report
Profit After Tax 332.22 (3,156.71)
Balance Carried to Balance Sheet 332.22 (3,156.71) With regards to the qualification on Disclosure of Cash Subsidy amounting to Rs. 126.54 Crores received from
Earnings Per Share (Rs.) 0.83 (8.15) Madhya Pradesh Rajya Setu Nirman Nigam Limited and Gujarat State Road Development Corporation against BOT
Projects under the head ‘Reserves & Surplus’ instead of deducting the same from the Project Cost, your directors
The above financial performance is based on the consolidated financial statements of the Company for the year state that as per the para 10.1 of the Accounting Standard 12 – Accounting for Government Grants (reproduced
ended on March 31, 2012. hereinafter), where the subsidy received is in the nature of promoter’s contributions that is, to say without which
the concessionaire cannot cover the total cost of the projects, the subsidy received can be shown as Capital
Reserve under the head of Reserves and Surplus rather than deducting from the total cost of the Project. Your
II. Dividend Directors further state that they perceive that the subsidy received is in the nature of ‘Promoter’s Contribution’ and
hence has been disclosed the same as Capital Reserve and not deducted from the total cost of the Project.
To augment cash resources for future developmental activities and growth of the Company, your directors do not
recommend any dividend on equity shares of the Company for the year ended on March 31, 2012. Para 10.1 of the Accounting Standard 12 –Accounting for Government Grants, state as under:

‘Where the Government Grants are of the nature of Promoters Contribution i.e., they are given with reference to
III. Key Contracts and Orders the total Investment in an undertaking or by way of contribution towards its total Capital outlay and no repayment
is ordinarily expected in respect thereof, the grants are treated as Capital Reserve which can be neither distributed
The order book position as on date of this Report exceeds Rs. 800 Lacs. During the year under report, your company as dividend nor considered as deferred income.’
excelled in clinching various important contracts, including Road Project at Chirai Anjar (Gujarat) for Gujarat State
Road Development Corporation (GSRDC), Vapi Land Development, Anjar Township Phase II, Dewas Water Scheme
and Pipe Laying Water Project at Mohali for Greater Mohali Area Development Authority (GMADA). VIII. Internal Control Systems

The Company has an adequate system of Internal Control to ensure compliance with policies and procedures.
IV. Directors Internal Audits are regularly carried out to review the internal control systems. The Internal Audit Reports along
with recommendations contained therein are reviewed by the Audit Committee of the Board.
Since the last report, the following changes took place in the Board of Directors:

1. Mr. Sunil Shinde has been appointed as the Managing Director and Chief Executive Officer of the Company w.e.f. May IX. Subsidiaries
16, 2011. Mr. Shinde has resigned from the position of MD & CEO of the Company w.e.f. May 19, 2012.
2. Mr. M K Tandon has been appointed as independent director of the Company w.e.f. January 31, 2012. As on March 31, 2012, the following companies, were subsidiaries of the Company viz. (1) MSK Projects
3. Mr. Yogesh Verma, Director and Mr. Asim Chakraborty, Manager of the Company had resigned on May 26, 2011. (Himmatnagar Bypass) Private Ltd. (2) MSK Projects (Kim Mandvi Corridor) Private Ltd. (3) Welspun BOT Projects
4. Mr. Ashok Khurana had resigned on January 31, 2012. Private Ltd. (4) Anjar Road Private Ltd.

8 9
 18th Annual Report
2011-12

The Ministry of Corporate Affairs vide its General Circular No. 2 / 2011 dated February 8, 2011 granted general XIII. Corporate Governance
exemption to the companies from attaching a copy of the Balance Sheet, the Profit and Loss Account and other
documents of its subsidiary companies as required to be attached under Section 212 of the Companies Act, 1956 to A separate report on Corporate Governance is annexed hereto as a part of this report. A certificate from the
the Balance Sheet of the Company subject to fulfillment of conditions stipulated in the circular. Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as prescribed
under clause 49 of the Listing Agreement is attached to this Report. A separate report on Management Discussion
Therefore, the said documents of the aforesaid subsidiary companies will not be attached to the Annual Report. & Analysis is enclosed as a part of the Annual Report.
However, the aforesaid documents relating to the subsidiary companies and the related detailed information will
be made available upon request by any member or investor of the Company. Further, the Annual Accounts of the
subsidiary companies are kept open for inspection by a member or an investor at the Registered Office of the XIV. Listing with Stock Exchange
Company.
The Company’s equity shares are listed on the Bombay Stock Exchange Limited (BSE), National Stock Exchange of
As required under the exemption, a statement containing the requisite information for each subsidiary is attached India Limited (NSE) and Vadodara Stock Exchange Limited (VSE). Annual listing fee for the year 2012-13 have been
with this Report. paid to BSE, NSE and VSE.

X. Particulars of Employees XV. Energy, Technology and Foreign Exchange

As required under the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars The operations of the Company are not energy intensive and therefore there is nothing to report in respect of
of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the information on Conservation of Energy and Technology Absorptions as required under Section 217(1)(e) of the
Annexure to Directors’ Report. However, as per Provisions of Section 219(1)(b) of the Companies Act, 1956, the Companies Act, 1956, read with Companies (Disclosure of Particulars in report of the Board of Directors) Rules,
Report and Accounts are being sent to all the members of the Company excluding the aforesaid information. Any 1988. Within the limited scope available for saving energy in construction contracts, every effort is being made for
member interested in obtaining such particulars may write to Company Secretary at the registered office of the conserving and reducing its consumptions.
Company.
Foreign Exchange Earnings and Outgo

XI. Directors’ Responsibility Statement Foreign Exchange Earnings – NIL

Foreign Exchange Outgo – NIL
Pursuant to Section 217(2AA) of the Companies Act, 1956, your directors confirm that:

(i) in preparation of the annual accounts for the financial year ended on March 31, 2012, the applicable accounting XVI. Consolidated Financial Statement
standards have been followed along with proper explanation relating to material departures;
As stipulated by clause 32 of the Listing Agreement with the Stock Exchanges and Circular No. 2/2011 dated
(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that February 8, 2011 issued by Ministry of Corporate Affairs under Section 212(8) of the Companies Act, 1956, the
are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Consolidated Financial Statements have been prepared by the Company in accordance with the applicable
financial year and of the profit of the Company for the year under review; Accounting Standards issued by the ICAI. The Audited Consolidated Financial Statements together with Auditors’
Report thereon forms a part of the Report.
(iii) they have taken proper and sufficient care to maintain 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; XVII. Acknowledgement

(iv) they have prepared the accounts for the financial year ended on March 31, 2012 on a going concern basis. 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.
XII. Employee Stock Option Plan

The Company had introduced stock option plan for directors and employees of the Company and its holding and For and on behalf of the Board of Directors
subsidiary Companies. During the year, the Company has granted Stock Options to following employees:

Place: Mumbai B. K. Goenka

Sr. No. Name No. of Option Granted Date: May 28, 2012 Chairman
1 Mr. Sunil Shinde, Managing Director & Chief 1,50,000
Executive Officer
2 Mr. Prasad Patwardhan, Chief Financial Officer 50,000
However, ESOP granted have been lapsed due to resignation of the above employees.

10 11
Housing Project, Anjar
Construction of staff housing colony (1.5, 2, 3 BHK
flats – G + 2 structure) at Anjar, Gujarat. Total flats to
be constructed in Phase One -- 240
 18th Annual Report
2011-12

The present composition of the Committee is as under:

Name of the Member Designation Number of Meetings attended during
financial year 2011-12
Corporate Governance Report Mr. M. K. Tandon* Chairman
Mr. Shailesh Vaidya Member 3
1. Philosophy on Code of Governance Mr. A K Dasgupta Member 5
Mr. Nirmal Gangwal* Member 5
The Board of Directors of the Company acts as a trustee and assumes fiduciary responsibility of protecting the
interest of the shareholders and other stakeholders of the Company. The Board supports the broad principles of *Mr. M K Tandon has been appointed as a member of the Audit Committee in the Board Meeting held on January 31,
Corporate Governance. In order to attain highest level Corporate Governance practice, the Board lays strong 2012 in place of Mr. Nirmal Gangwal.
emphasis on transparency, accountability and integrity.
5 meetings of the Audit Committee were held during the financial year 2011 – 12 on following dates: April 15, 2011,
2. Board of Directors May 26, 2011, July 25, 2011 November 02, 2011 and January 31, 2012. The attendance of the members at the
Committee Meetings is given in the table above.
As on March 31, 2012 the Board comprises of Six Directors (five of them are non executive directors), of which four
directors are the Independent Directors. Mr. B. K. Goenka, a Non-Executive Director is the Chairman of the The Company’s Internal Auditors and Chief Finance Officer generally remain present at the Audit Committee
Company. meetings, The Company Secretary acts as the secretary of the Audit Committee.

Composition and category of directors; attendance of each director at board meetings and the last AGM, number of 4. Remuneration Committee
other companies on the Board or Committees of which, a director is a member or chairperson is as under:
Attendance in Number of other a) Terms of Reference
No. of The Company has duly constituted Remuneration Committee consisting of Independent Directors. The
Board Meetings Board Committees Attendance
other Remuneration Committee recommends the appointment, re-appointment and remuneration payable to executive
Name of the Director Category during in last
Directorships Chairman Member
directors.
the financial * * AGM
@
year 2011-12
b) Composition of Remuneration Committee
Mr. B. K. Goenka The present composition of the Committee is as under:
Promoter 5 14 1 6 No
Chairman
Name of the Member Designation Number of Meetings attended during
Mr. Sunil Shinde financial year 2011-12
Managing Director Professional 4 NIL NIL 1 Yes
& CEO Mr. A. K. Dasgupta Chairman 2
Mr. Nirmal Gangwal Independent 5 5 NIL 1 No Mr. Shailesh Vaidya Member 2
Mr. Shailesh Vaidya Independent 3 11 1 1 No Mr. Nirmal Gangwal Member 2
Mr. A. K. Dasgupta Independent 5 3 1 3 No Two meetings of Remuneration Committee were held on May 26, 2011 & July 25, 2011. The attendance at the
Mr. M. K. Tandon Independent 1 4 4 2 NA Remuneration Committee meetings held during the financial year 2011-12 is given in the table above.
@ Only Directorships held in Indian Public Limited Companies are considered.
* Only Chairmanship/membership of Audit Committee and Shareholders’ and Investors’ Grievance Committee are considered (includes
d) Remuneration Policy
Chairmanship/membership in Welspun Projects Ltd.) The independent directors are not paid any other remuneration except sitting fees for attending meetings of the
Board of Directors and the Committee meetings. The sitting fee for attending the Board meeting is Rs. 15,000/- for
The Board periodically reviews compliance report of all laws applicable to the company. each meeting and for attending committee meeting is Rs. 5,000/- for each meeting. The sitting fee has been
5 meetings of the Board of Directors were held during the financial year 2011-12 on the following dates: April 15, 2011, May 26, 2011, July 25, 2011, November approved by the Board of Directors in its meeting dated September 17, 2004 and by the members in the Extra-
02, 2011 and January 31, 2012. ordinary General Meeting dated October 11, 2004.

e) The Sitting Fees paid to Non Executive Directors during the financial year 2011-12 is as under:
3. Audit Committee
Name of Non Sitting Fees for Sitting Fees for
Total (in Rs.)
a) Terms of Reference Executive Director Board Meetings (in Rs.) Committee Meetings (in Rs.)
The Audit Committee assists the Board in its responsibility for overseeing the quality and integrity of the Mr. Nirmal Gangwal 75,000 35,000 110,000
accounting, auditing and reporting practices of the Company and its compliance with the legal and regulatory
Mr. Shailesh Vaidya 45,000 35,000 80,000
requirements. The terms of reference stipulated by the Board of Directors to the Audit Committee are as contained
under clause 49 of the Listing Agreement with the Stock Exchanges. Mr. A. K. Dasgupta 75,000 35,000 110,000
Mr. M K Tandon 15,000 15,000
b) Composition
The Audit Committee was constituted by the Board of Directors at its meeting held on January 24, 2005 and was
reconstituted from time to time. The Committee comprises of 3 non-executive independent directors.

14 15
 18th Annual Report
2011-12

f) Executive Directors’ Compensation Postal Ballot

The Executive Directors are paid salary and perquisites as per the rules of the Company.
The details of remuneration paid to Managing Director & CEO during the financial year 2011 -12 is as under: During the year ended March 31, 2012, the Company sought the approval of its members, through a postal ballot, to shift the
registered office of the Company from “707, Sterling Centre, R C Dutt Road Alkapuri, Baroda, Gujarat” to “Welspun City,
Name Salary + Perquisites
Village Versamedi, Taluka Anjar, Dist Kutch, Gujarat-370110”. A Company Secretary in Practice was appointed by the Board of
Mr. Sunil Shinde* Rs. 13,359,121** Directors as the Scrutinizer of the voting process. The Company announced the results of the Postal Ballot on 21.09.2011. A
summary of the same is given below:
* ceased to be the Managing Director & CEO w.e.f. May 19, 2012.
**Rs. 1,532,840 paid towards Notice Pay also included in remuneration paid during financial year 2011-12 Sr. No Particulars Number
1. No. of valid postal ballot forms received 25 ,537 ,745
5. SHAREHOLDERS’ AND INVESTORS’ GRIEVANCE COMMITTEE 2. Votes in favor of the resolution 25 ,537 ,713

a) Terms of Reference 3. Votes against the resolution 32

The Shareholders’ and Investors’ Grievances Committee looks into the redressal of members’ complaints. The complaints are 4. No. of Invalid postal ballot forms received 1,538
reported to the Board on quarterly basis and the status of the complaints pending at the beginning of the quarter, received
during the quarter and resolved or pending at the end of the quarter, are published along with the Quarterly / Annual
Unaudited / Audited Financial Results as the case may be of the Company as a note thereto. None of the complaints were
pending at the end of the financial year under Report. 7. MANAGEMENT

b) Composition a) Management Discussion and Analysis:

The present composition of the Committee is as under: Management Discussion and Analysis of business of the Company is separately given in the Annual Report.

Name of the Member Designation Number of Meetings attended during the b) Disclosures by Management to the Board:
financial year 2011-12 All details relating to financial and commercial transactions where directors may have pecuniary interest are provided to the
Mr. Shailesh Vaidya Chairman 2 Board, and the interested directors neither participate in the discussion, nor do they vote on such matters.
Mr. B K Goenka Member 2
Mr. Sunil Shinde* Member 2 8. DISCLOSURES
* Appointed as a Member of the Committee w.e.f. May 26, 2011 in place of Mr. Yogesh Verma
a) Related Party Transactions:
Two meetings of Shareholders’ and Investors’ Grievances Committee were held on July 25, 2011 & November 02, 2011. The For related party transactions, refer Note no.10 of Notes to Accounts (Schedule 8) annexed to Balance Sheet and Profit & Loss
attendance at the Shareholders’ and Investors’ Grievances Committee meetings held during the financial year 2011-12 is Account.
given in the table above.
b) Non Compliance:
There were no non compliance by the Company during the last three financial years and hence no penalties, strictures were
6. GENERAL BODY MEETINGS imposed on the Company by Stock Exchanges or SEBI or any statutory authority, on any matter related to capital markets,
The details of Annual General Meeting held during the last three years are given hereunder: during the last three financial years.

Annual c) Whistle Blower Policy:

General 17th Annual General Meeting 16th Annual General Meeting 15th Annual General Meeting
Meeting
The Company has a Whistle Blower Policy and no personnel have been denied access to the Audit Committee.

Day & Tuesday, Tuesday, Wednesday, d) Code of Conduct:

Date August 29, 2011 November 30, 2010 September 30, 2009 The Board complies with Code of Conduct for Board members and senior management of the Company. A copy of the Code is
also posted on the Company’s website for information of all the Board members and senior management of the Company.
Time 9.30 a.m. 11.00 a.m. 9.00 a.m.
The Compliance of the Code is being affirmed by the Directors and senior management personnel on annual basis every year.
Vanijya Bhavan, Race Vanijya Bhavan, Race Vanijya Bhavan, Race
Venue
Course, Vadodara Course, Vadodara Course, Vadodara
A declaration signed by the Chairman of the Company is given below:
1) Sec. 31 - Alteration of Articles of
Special
Association of the Company
Resolution Nil Nil “I hereby confirm that all Board members and senior management personnel have affirmed compliance with the Code of
2) Sec. 21 - Change of name of the Company
Passed
3) Sec. 269 - Appointment of Manager Conduct of the Company.”
The details of Extraordinary General Meetings held during the year are given hereunder:
B K Goenka
Day & Date Wednesday June 29, 2011 Friday December 09, 2011 Chairman
Time 11.30 a.m. 10.30 a.m.
e) Certification by CEO/CFO :
Venue Vanijya Bhavan, Race Course, Vadodara Welspun City, Village, Versamedi, Taluka Anjar, Gujarat-370110 A certificate obtained from Chief Executive Officer and Chief Financial Officer on the Financial Statements of the Company in
terms of Clause 49 of the Listing Agreement was placed before the Board, who took note of it and took same on record.
Special 1) Appointment of Mr. Sunil 1) Increase in Authorised Capital from Rs. 41 crores to Rs. 42 crores
Resolution Shinde as Managing Director & CEO 2) Change in the Articles of Association
Passed 2) Approval of ESOP

16 17
 18th Annual Report
2011-12

f) Secretarial Audit: Security Codes:

A qualified Practicing Company Secretary carried out the Secretarial Audit on quarterly basis to reconcile the share capital The Stock Codes of the equity shares of the Company are:
with National Securities Depository Services Ltd (NSDL) and Central Depository Services Ltd (CDSL) and the total issued and NSE : WELPROJ
listed capital. The audit confirms that the total issued / paid up capital is in agreement with total number of shares in physical BSE : 532553
forms and total number of demat shares held with NSDL and CDSL. ISIN of the Equity Shares of the Company: INE625G01013

g) Brief resume of Directors being appointed / re-appointed e) Market Price Data

A brief resume, nature of expertise in specific functional areas, names of companies in which the person is already holds Monthly High and Low data of Shares of Welspun Projects Limited on BSE and NSE during the financial year 2011-12.
directorship and membership of committees of the Board and shareholdings in the Company forms part of the Notice of BSE NSE
MONTH
Annual General Meeting.
High Low High Low

h) Accounting Standard April 11 80.85 65.00 81.00 60.00

The Accounting Standards laid down by the Institute of Chartered Accountants of India and applicable to the Company were May 11 69.95 56.60 70.00 56.75
followed by the Company in preparation of accounts of the Company. June 11 80.70 58.00 80.95 58.10
July 11 72.50 62.00 72.75 57.95
i) Details (in aggregate) of shares in the suspense account including freeze on their voting rights
There are no unclaimed shares and hence no suspense account is required to be opened and credited with such shares and August 11 64.35 41.80 63.80 41.90
there is no freeze on voting rights of any shares. September 11 54.20 37.50 54.95 37.65
October 11 43.00 34.25 46.40 33.90
j) Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of the Clause 49
November 11 40.45 23.65 40.65 23.35
of the Listing Agreement.
The Company is in compliance with the mandatory requirements mentioned under Clause 49(I) to 49(VII) to the extent December 11 32.70 25.10 33.50 24.50
applicable and in addition, the Company has adopted non-mandatory requirements mentioned at (2) – Remuneration January 12 40.00 27.05 39.45 27.25
Committee, (4) Audit Qualifications, and (7) Whistle Blower Policy of Annexure I D to Clause 49 of the Listing Agreement with February 12 41.55 34.55 41.00 35.00
the Stock Exchanges. March 12 39.00 29.10 39.00 29.10
Source: respective websites of BSE and NSE.

9. MEANS OF COMMUNICATION Shares on VSE were not traded during the last financial year.

The quarterly, half yearly and yearly financial results of the Company are sent to Stock Exchanges immediately after they are f) Performance in Comparison to Broad Based Indices
approved by the Board. The Company published its un-audited/audited financial results in Business Standard (English daily) Chart –I Comparison of Welspun Projects Limited’s (WPL) Equity Share and BSE’s Sensex
and in Western Times (Gujarati daily). Performance of WPL Share Price and BSE SENSEX: Monthly High
196 30000
210
195 28500
180 169
27000
10. GENERAL SHAREHOLDER’S INFORMATION 165 142 138
150 129 25500

WPL Share Price

135 113 120 114
120 109 24000
a) Annual General Meeting:

SENSEX
105 22500
90 77 73 74
The 18th Annual General Meeting of the Company will be held on Friday, September 28, 2012 at 11.00 a.m at the registered 75 21000
60
office of the Company at Welspun City, Village Versamedi, Taluka Anjar, Dist Kutch, Gujarat-370110 45
19500
19,811
30 19,254 18,873 19,132 18000
15 18,440 18,524 18,041
17,908 17,702 16500
b) Financial Year: 0 17,212 17,004 17,259
-15 15000
The financial year of the Company is from April 1 to March 31.

Nov-11
Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Dec-11

Jan-12

Feb-12

Mar-12
Board Meetings for Quarterly Unaudited Financial results: (Tentative and subject to change) WPL Share Price SENSEX
II Qtr Results (Jul- Sep) Upto November 14, 2012
III Qtr Results (Oct-Dec) Upto February 14, 2013 Chart –II Comparison of WPL’s Equity Share and NSE’s CNX Nifty
IV Qtr/Annual Audited Results Upto May 30, 2013
Performance of WPL Share Price and CNX Nifty: Monthly High
I Qtr Results (12-13)(Apr-June) Upto August 14, 2013
6500
200 6000

6288
6159
c) Date of Book Closure: 5500

5938
5906

5484
5000
The Company’s Register of Members and Share Transfer Books will remain closed from Monday, Monday, September 24,

5001

4953
150 4500

4621

4464
WPL Share Price
2012 to Friday, September 28, 2012 (both days inclusive). 4000

4293

4297
4178

CNX NIFTY
3500
100 3000
d) Listing on Stock Exchanges: 2500
2000

81

80.95
The Company’s Equity Shares are listed on NSE, BSE & VSE. Listing fees for the Financial Year 2012-13 has already been paid to

72.75
70
50 1500

63.8

54.95
1000
all the Stock Exchanges.

46.4

Nov-11 40.65

33.5

Jan-12 39.45

41

39
500
0 0

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Dec-11

Feb-12

Mar-12
WPL Share Price CNX NIFTY

18 19
 18th Annual Report
2011-12

g) Registrar & Share Transfer Agent AUDITORS’ CERTIFICATE ON REPORT OF CORPORATE GOVERNANCE
The Company has appointed Registrar and Share Transfer Agent to handle the share transfer work and to resolve the
complaints of shareholders. Name, address, telephone number of Registrar & Share Transfer Agent is given hereunder:
Purva Sharegistry (India) Pvt. Ltd.
9, Shiv Shakti Industrial Estate, To The Members of
J. R. Boricha Marg, Opp. Kasturba Hospital, Welspun Projects Limited
Lower Parel (East), Mumbai
Phone: 022-2301 6761/8281 Fax: 022-2301 2517 E-mail: [email protected] We have examined the compliance conditions of Corporate Governance by Welspun Projects Limited for the year ended 31st
March, 2012, as stipulated in clause 49 of the Listing Agreement of the said Company with Bombay Stock Exchange Limited,
h) Share Transfer System and Dematerialization National Stock Exchange of India Limited and Vadodara Stock Exchange Limited.
Our Registrar and Transfer Agent register shares sent for transfer in physical form within 15 days from the receipt of the
documents. The Company’s shares are transferable in electronic mode. As on March 31, 2012, 680 equity shares were in The compliance of conditions of Corporate Governance is the responsibility of management. Our examination was limited to
physical form being 0.001% of the total Equity Shares. the procedures and implementation thereof, adopted by the Company for ensuring the compliance of conditions of the
Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
i) Distribution of Shareholding as on March 31, 2012
Number of % of Total In our opinion and to the best of our information and according to explanations given to us, we certify that the Company has
Nominal Value Value in Rs. % of Total Value
Shareholders Shareholders complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.
Upto 5,000 8,074 85.86 11,216,940 2.80
5,001-10,000 667 7.08 5,537,800 1.38 We further state that such compliance is neither an assurance as to the future viability of the Company nor efficiency or
10,001-20,000 259 2.75 4,069,470 1.02 effectiveness with which the management has conducted the affairs of the Company.
20,001-30,000 125 1.33 3,245,470 0.81
30,001-40,000 53 0.56 1,916,830 0.48
40,001-50,000 45 0.48 2,141,020 0.54
50,001-100,000 86 0.91 6,296,570 1.57
1,00,001 and above 98 1.04 365,575,900 91.39 For Chandrakant & Sevantilal & J. K. Shah & Co.
Total 9,714 100.00 400,000,000 100.00 Chartered Accountants
Firm Registration No. 101676W
j) Shareholding Pattern as on March 31, 2012
Sr. No. Category No. of Shares Percentage of holding
1 Promoter Group 24,448,445 61.12
Resident Bodies Corporates
Place: Vadodara (H. B. Shah)
2 8,901,808 22.25
3 FII/Mutual Funds 450,667 1.13 Date: 28.05.2012 Partner
4 Foreign Body Corporates – – Membership No. 16642
5 Public 6,121,637 15.31
6 Others(including NRIs) 77,443 0.19
Total 40,000,000 100.00

None of the director directly hold any equity shares or convertible securities in the Company.

k) Site Locations
The Company has presence across the Country and at present, on going projects are at various places in the states like
Gujarat, Maharashtra, Madhya Pradesh, Punjab, Rajasthan etc.

l) Address for Correspondence

Compliance Officer:
Ms. Susheela Maheshwari, Company Secretary
707-708, Sterling Center,
R. C. Dutt Road, Alkapuri,
Vadodara- 390 005
email: [email protected]

Shareholders correspondence may be directed to the Company’s Registrar and Share Transfer Agent, whose address is given
below:
M/s. Purva Sharegistry (India) Pvt. Ltd.
9, Shiv Shakti Industrial Estate,
J. R. Boricha Marg,
Opp. Kasturba Hospital, Lower Parel (East), Mumbai
Phone: 022-2301 6761/8281 Fax: 022-2301 2517 E-mail: [email protected]

20 21
 Bharuch Dahej Road
Project, Gujarat
Road widening of State Highway No 6 from Bharuch
to Dahej into six lanes. Other works include one
major ROB structure within city limits, drains along
the roads and cross drainage works.
 18th Annual Report
2011-12

Fiscal deficit for FY12 has been placed at 5.7%, and is expected to be in the range between 5% - 5.5% in FY13 mainly due to
pressure on the expenditure side. The outlook further expects the rupee to remain volatile as euro conditions will remain in
flux while the domestic current account deficit will be under pressure at 3% of GDP which will still be an improvement over
Management Discussion and Analysis the 3.5% deficit expected in FY12.

Inflation as given by the WPI will move towards the 7% mark earlier than expected and could touch 6% - 6.5% guided by
The Management Discussion and Analysis (MD&A) should be read in conjunction with the Audited Financial Statement of negative food inflation. The negative food inflation is expected to wane by the end of FY12. However, pressure will continue
Welspun Projects Ltd (formerly known as MSK Projects Ltd) (“WPL” or the “The Company”), and the notes thereto for the year to be exerted by core and fuel inflation as the international crude prices are expected to remain at the existing level which
ended 31st March 2012. This MD&A covers WPL’s financial position and operations for the year ended 31st March 2012. together with a weak rupee will exert pressure on overall prices. (Source: Indian Economy: Prospects, www.carerating.com)
Amounts are stated in Indian Rupees unless otherwise indicated. The number used in the analysis are on a consolidated basis;
the corresponding number for the previous year has been regrouped and reclassified, wherever necessary.
ECONOMY AND INDUSTRY SCENARIO
Forward-Looking Statements
This report contains forward looking statements, which may be identified by their use of words like plans’, expects’, will’, Infrastructure is one of the key drivers of any economy. As India continues down its path of development, infrastructure is
anticipates’, believes’, intends’, projects’, estimates’, or other words of similar meaning. All statements that address going to play a very important role. But the fast growth of the Indian economy in recent years has placed increasing stress on
expectations or projections about the future, including but not limited to statements about the Company’s strategy for physical infrastructure such as electricity, railways, roads, ports, airports, irrigation, urban and rural water supply and
growth, product development, market position, expenditures, and financial results, are forward-looking statements. sanitation, all of which already suffer from a substantial deficit. Although the Indian Government has been proactive in
Forward-looking statements are based on certain assumptions and expectations of future events. The Company assumes no building necessary infrastructure in the energy, transportation, and urban sectors, additional investment is needed. Like
responsibility to publicly amend, modify or revise any forward-looking statement, on the basis of any subsequent many countries, private-sector involvement will be critical in escalating India's infrastructure beyond meeting basic needs
developments, information or events. and reaching a level that advances the efficiency with which India's economy operates.

Industrial production (including construction), which was to grow in the region of 8-9% for FY12, was revised mid-year to be
BUSINESS OVERVIEW fairly subdued at 7.1% by the Economic Advisory Council to the Prime Minister (PMEAC). Major risks are seen in the mining
and capital goods sector. For the former, policy action is required while for the latter, a revival in investment is called for.
WPL’s successful execution of projects for the past 35 years has made the company a niche player in the construction industry. Absence of affirmative action in areas such as reforms in mining, land, insurance, pensions, banking, taxation etc. along with
With the group’s rich experience of executing EPC contracts and WPL’s legacy of being in the business of EPC projects across high interest rates have come in the way of investment growth. While it is expected that India has reached the end of the
various sectors like roads, water, industrial structures and PPP projects, the Company is set to play a larger role in the interest rate cycle, the progress on reforms is expected to be tardy till the first quarter of FY13. The service sector, with a
infrastructure space. weight of around 60% in GDP is expected to be the chief driver with growth of around 9% during FY13. (Source: Indian
Economy: Prospects, www.carerating.com)
The Company has executed infrastructure projects in different domains such as highways, bridges, industrial, residential and
commercial buildings. In the highway sector alone The Company have successfully completed six BOT (Toll) Road projects FY12 hasn’t been good for infrastructure sectors, including highways, oil & gas, water, urban infrastructure and all other
with a total length of over 500 km and a capital expenditure of over US $ 200 million. One of the signature projects is the 142.6 sectors have registered negative growth. In case of Roads, National Highway Authority of India (NHAI) widened/upgraded
km long Dewas-Bhopal Corridor linking Bhopal and Dewas on SH 18 in the state of Madhya Pradesh on BOT toll basis. 2,200 km of highways during FY12. It was 10.1% lower than target of 2,500 km for the period. It was also 29% less than that
Simultaneously, The Company has contributed significantly towards achieving success in the above mentioned projects. achieved in the previous year during FY11. (Source: www.urassociates.com)

Although the expected performance of the industry and services sector in FY12 is not very different from what was seen in
MACRO ECONOMIC ENVIRONMENT FY11 when industry grew by 8.4%, it is the much improved performance of the agriculture sector in FY12 that is expected to
provide an uptick to overall GDP growth.
For the economy to maintain the growth momentum it needs to invest substantially in developing pre-requisite physical
Infrastructure. Hence, one expects several opportunities in the overall infrastructure space in India in the near future.
INDIA - INFRASTRUCTURE
India’s GDP growth in FY12 was approximately around 6.7%, as compared to a robust 8.4% in FY11. While 6.7% would be the
envy of most developed nations, it is the lowest growth rate for India in almost three years. A slew of banks and economists Government of India has stressed on the need and requirement of infrastructural development in India through a number of
cut their growth forecasts of the Indian economy for the financial year 2012-13. policies and initiatives for the growing economy of India. The initial projections for infrastructure in the Twelfth Five Year Plan
(FY12-17) is at US$ 1 trillion. This indicates that there is huge investment potential in infrastructure and this certainly
They are worried that a combination of poor macro indicators and an environment of policy drift has cast a darker shadow on translates into a huge scope for careers and employment in this sector.
the economy than previously thought. The Government may have budgeted for the economy expanding by at least 7.3%
during FY13, but a raft of independent forecasters have predicted numbers lower than 7 per cent, citing reasons ranging from Over a period of time, the Government of India has also taken several initiatives to accommodate and accelerate private
stubborn inflation, high deficits and depreciating currency to industrial slowdown and government inaction. investments in the infrastructure sector. These include sector specific policies, providing incentives and tax holidays to attract
private investments, permission of 100% FDI in the infrastructure sector, special provision of Viability Gap Funding (VGF) and
Economists at Wall Street banks Goldman Sachs and Merrill Lynch were the latest to join the downgrade party for Asia's third- PPP approach. While infrastructure development is one of the top priorities of the nation, the pace of growth in
largest economy, both cutting their GDP growth forecasts to 6.6 per cent and 6.5 per cent, from 7.2 per cent and 6.8 per cent, infrastructure has not been commensurate to the demands and it continues to pose a major bottleneck and a challenge for
respectively, which will make it lower than the 6.7 per cent achieved in 2008-09, the year of the global economic meltdown. the country.
(Source: http://articles.economictimes.indiatimes.com/2012-05-31/news/31922084_1_gdp-growth-services-sector-india-s-
gross-domestic-product) Recently the issue related to GAAR has dampened the investment sentiments and this has adversely impacted the
investment climate and is straining the economy. As the Government is tackling high inflation and is unable to reduce interest
rates, the resultant impact on growth and interest cost is hurting the companies.

24 25
 18th Annual Report
2011-12

GROWING BOT PORTFOLIO distribution, water supply, sewerage and railways where there is significant resource shortfall and also a need for efficient
delivery of services. Similar efforts would also need to be initiated in social sectors, especially health and education. The
The initial adoption of BOT model by the Central Government for infrastructure development in the highways, ports, airports Government has also been emphasizing the need to explore the scope for PPPs in the development of the social sectors like
and the urban Infrastructure segments has encouraged various state governments to accept the same. Various states such as health and education.
Madhya Pradesh, Karnataka and Maharashtra have already adopted similar models for the development of their state
highways. Some of the major PPP projects undertaken thus far are: Delhi, Mumbai, Hyderabad and Bengaluru airports; four ultra-mega
power projects at Sasan (Madhya Pradesh), Mundra (Gujarat), Krishnapatnam (Andhra Pradesh) and Tilaiya ( Jharkhand);
It is expected that BOT portfolio of construction companies continue to grow during the Twelfth Five Year Plan (2012-17). The container terminals at Mumbai, Chennai and Tuticorin ports; 15 concessions for operation of container trains; Jhajjar power
average size of such projects is also on the rise, leading to increasing requirements of investments for funding the equity transmission project in Haryana and 298 National and State Highway projects. (Source: An Approach to the Twelfth Five Year
component of such projects. Furthermore, the sponsors of the projects are also required to fund cost overruns and Plan, Planning Commission, Government of India)
sometimes even bridge cash flow mismatches in the project companies. Outlook for toll roads being stable to negative, the
requirement of cash flow support from sponsors is expected to increase. Aggressive bidding has been observed for BOT
projects over the past two years by certain companies. Such companies may face issues in raising equity and fall in margins. VIABILITY GAP FUNDING (VGF)
(Source: Fitch Rating, 2012 outlook:Indian construction sector)
In an attempt to attract private investment, the Government has expanded its Viability Gap Funding (VGF) scheme to sectors
including warehousing storage, terminal market, irrigation, oil and gas storage facilities. In new norms, the government has
PUBLIC PRIVATE PARTNERSHIPS (PPP) IN INFRASTRUCTURE allowed private player to invest, develop and operate a Government infrastructure project. The scheme is applicable to
infrastructure projects undertaken on public-private partnership (PPP) basis. In fact, this scheme serves a dual purpose —
Public Private Partnerships (PPPs) are increasingly becoming the preferred mode for construction and operation of helps to create infrastructure by providing a subsidy to private companies. Under the scheme, Government invites bids from
infrastructure projects, both in developed and developing countries. PPPs are expected to augment resource availability as companies by keeping the subsidy sought as the bid parameter. The bidders who seek minimum subsidy — also called
well as improve efficiency of infrastructure service delivery. Time and cost overrun in construction of PPP projects are also viability gap fund — are given the rights to build and operate the infrastructure. Prior to this, the rights to operate the
expected to be lower compared to traditional public procurement. In the approach paper to the Twelfth Five Year Plan (2012- infrastructure are usually given out for a pre-determined concession period. For highways and ports sector — where PPP is
17), the Planning Commission projected the share of private sector and PPP (public private partnerships) in infrastructure already underway — the concession period runs into the long term. Recent development has made irrigation (including
investments to grow to 50% from about 30% in the Eleventh Five Year Plan (2007-12). dams, channels and embankments), terminal markets, common infrastructure in agriculture markets, soil testing
laboratories and capital investment in the fertiliser sector eligible for viability gap funding.
(Source:http://nbmcw.com/reports/market-research/construction-infra-industry/28676-budget-2012-13-focuses-on-
infra-development-and-funding.html)
Public vs Private Contribution in Infrastructure Sector

84% INITIATIVES BY GOVERNMENT OF INDIA

90
80 • Government has approved guidelines for establishing joint venture companies by defense PSUs in PPP mode.
70%
70 • First Infrastructure Debt Fund with an initial size of Rs. 80,000 million launched earlier this month.
60
• Tax free bonds of Rs. 600,000 million to be allowed for financing infrastructure projects in 2012-13.
50% 50% • A harmonized master list of infrastructure sector approved by the Government.
50 • India Infrastructure Finance Company Limited (IIFCL) has put in place a structure for credit enhancement and take-
public
40 out finance for easing access of credit to infrastructure projects.
30% private (Source: An Approach to the Twelfth Five Year Plan, Planning Commission, Government of India)
30
16%
20
The investment in infrastructure rose from US$ 184 billion during the Tenth Five Year Plan (2002-07) to about US$ 411 billion
10 during the Eleventh Five Year Plan (2007-12). The initial projections for infrastructure in the 12th Five Year Plan (2012-17) is at
0 US$ 1 trillion. This constitutes a significant shift in favour of investment in infrastructure. Except in some sectors, the overall
10th Plan 11th Plan 12th Plan
performance of infrastructure during the Eleventh Plan compares well with the initial targets after accounting for the impact
(2002 - 07) (2007 - 12) (2012 - 17) of the global financial crisis. (Source: www.infrastructure.gov.in)

The adoption of standardized documents such as model concession agreements and bidding documents for award of PPP
projects have streamlined and accelerated decision-making by agencies in a manner that is fair, transparent and competitive.
This approach has contributed significantly to the recent strides in rolling out a large number of PPP projects in different
sectors. India has 1,017 PPP projects accounting for an investment of Rs. 486,603 crore. According to the Private Participation
in Infrastructure database of the World Bank, India is second only to China in terms of number of PPP projects and in terms of
investments, it is second to Brazil.

Transport is the dominant PPP sector in India both by number of projects and investments, mainly due to the large number of
road sector projects. Further efforts are needed to mainstream PPPs in several areas such as power transmission and

26 27
 18th Annual Report
2011-12

Projected Investment in Infrastructure during the Twelfth Five Year Plan (2012-17) corporate debt market.

Base Year Total 12th In addition to this, pushing the pace of road building in countryside a sum of Rs. 240,000 million has been allocated
Year 2012-13 2013-14 2014-15 2015-16 2016-17
(2011-12) Plan under the Pradhan Mantri Gram Sadak Yojana (PMGSY), which again gets an increase of 20% as compared to FY11.
Attracting private investment, the budget extended VGF scheme covering multiple sectors including oil, gas,
GDP at market prices terminal markets and irrigation where private players have been allowed to invest, develop and operate
63,14,265 68,82,549 75,01,978 81,77,156 89,13,100 97,15,280 4,11,90,064
(Rs. Crore) government infrastructure projects on the PPP module.
(Source:http://nbmcw.com/reports/market-research/construction-infra-industry/28676-budget-2012-13-
Rate of growth of GDP
9.00 9.00 9.00 9.00 9.00 9.00 9.00 focuses-on-infra-development-and-funding.html)
(%)
b) MAJOR & MEDIUM IRRIGATION
Infrastructure
8.37 9.00 9.50 9.90 10.30 10.70 9.95 Total number of ongoing projects in the Eleventh Five Year Plan is likely to be 583 including 236 Major, 265 Medium,
investment as % of GDP
65 ERM projects and 17 special category projects involving diverse activities like dam safety and special repairs.
Infrastructure From the present physical and financial status it is expected that in all 327 ongoing projects including 154 major, 139
5,28,316 6,19,429 7,12,688 8,09,538 9,18,049 10,39,535 40,99,240
investment (Rs. crore) medium and 34 ERM projects will require financial inputs in Twelfth Five Year Plan for their implementation.
(Source: ministry of water resources)
Infrastructure
investment (US $ 132.08 154.86 178.17 202.38 229.51 259.88 1,024.81
Billion) @ Rs 40/$ c) HOUSING & CONSTRUCTION
Extending a major booster to the construction sector property builders developing affordable houses have enabled
(Source: Secretariat of Infrastructure) lower interest costs by using External Commercial Borrowing (ECB) window, and in another move 1% interest
subvention scheme for affordable housing has been extended for another year, benefitting home buyers up to a
A preliminary assessment suggests that investment in infrastructure during the Twelfth Five Year Plan (2012-17) would need price tag of Rs. 1.5 million. In another proposal a sum of Rs. 11,800 million has been set aside for building 4,000
to be of the order of about Rs. 40,992,400 million (US$ 1,025 billion) to achieve a share of 9.95% as a proportion of GDP. This housing units to personnel of Para-military Forces.
would have to be a key priority area in the Twelfth Five Year Plan in order to sustain and support the targeted growth in
manufacturing, agriculture and services. Provision of world-class infrastructure would not only be necessary for improving In addition, the finance minister also proposed the setting up of a Credit Guarantee Trust Fund ensuring better flow
the competitiveness of the Indian economy, but also for promoting inclusive growth and improving the quality of life of the of institutional credit for housing loans and has created an enhanced provision under Rural Housing Fund from Rs.
common man. 30,000 million to Rs. 40,000 million. Indira Awas Yojana, which is primarily meant to provide housing for BPL
families, has been allocated Rs. 110,750 million under the rural housing scheme in the budget. Each BPL family gets
The Indian economy will enter the Twelfth Five Year Plan in a much stronger position as far as infrastructure is concerned than Rs. 450,000 as assistance in plains and Rs. 485,000 in hilly areas. In addition, the Finance Minister has also raised the
is entered the Eleventh Five Year Plan. Investment in infrastructure is expected to be around 8.37% of GDP in the base year of allocation for the National Social Assistance Programme by 37% to Rs. 84,470 million. The budgetary measures like
the Twelfth Five Year Plan. If GDP in the Twelfth Five Year Plan grows at a rate above 9%, it should be possible to increase the relief on personal income tax and tax free interest on savings bank account up to Rs. 10,000 per annum and relief to
rate of investment in infrastructure to around 10.70% in the terminal year of the Twelfth Five Year Plan period. At least 50% of those in the tax bracket of 20% to 30% will increase the disposable income of the salary class further increasing the
the above projected investment of Rs. 40,992,400 million in the infrastructure sector should come from the private sector. demand for housing.
This would imply that public sector investment in infrastructure would increase from Rs. 13,112,930 million in the Eleventh (Source:http://nbmcw.com/reports/market-research/construction-infra-industry/28676-budget-2012-13-
Five Year Plan to around Rs. 20,496,200 million in the Twelfth Five Year Plan at 2006-07 prices. This requires an annual focuses-on-infra-development-and-funding.html)
increase of about 9.34% in real terms. (Source: www.infrastructure.gov.in)
d) OIL AND GAS PIPELINES
Though the above numbers look aggressive in the current economic environment we are optimistic over the Twelfth Five Year Petroleum & Natural Gas Regulatory Board has initiated the push for more pipelines
Plan period. This particular year (FY13) may witness lower growth and overall growth could be lower than projected 9% rate PNGRB has initiated projects that will enhance pipeline infrastructure and facilitate PNG distribution in various
but the Company believes overall potential and opportunity remains intact for infrastructure sector. cities across India.

PNGRB was awarded Rs. 8,550 million interstate gas pipeline project in Jammu & Kashmir to Gujarat State Petronet
The Sector Wise Investments Under Infrastructure (GSP) led consortium. The Bhatinda-Jammu-Srinagar pipeline project will ensure unabated gas supply throughout
the year, especially during the winters when energy needs rise.
a) ROADS & HIGHWAY (Source: www.constructionupdate.com)
Injecting a major boost to the road and highways sector, the government in its budgetary proposals has targeted
close to Rs. 7,000,000 million investments for the next half decade. This is exactly more than double of the amount PNGRB also approved a 1,104 km Kochi-Koottanad-Bangalore-Mangalore gas pipeline project in June 2012.
earmarked for the sector in the past half decade during which project under National Highways Development (Source: www.contify.com)
Project (NHDP) - Phase I and II have largely been completed while awarding projects under Phases III, IV and V are
progressing at a brisk pace.
City gas distribution to create value in long term
Since about 40% of the total length under the NHDP is yet to be awarded the concessions, fund raising measures will City gas distribution (CGD) is among the fastest growing segments in the gas sector with all major players recording
have a positive impact further supporting National Highways Authority of India (NHAI) in its project rapid growth in the past couple of years. The segment would continue to grow in the coming years as well with 20
implementation drive. It has been proposed to set a target of covering a length of 8,800 km under the NHDP during per cent growth in demand in metropolitan cities and 15% in other areas. Among the customers, demand growth
FY13 and to achieve the target funding allocation has been hiked by 14% to Rs. 253,600 million for FY13. NHAI has from the industrial segment is expected to be the fastest followed by the transportation segment.
been authorised to raise Rs. 100,000 million through tax-free bonds. The highway developers welcomed the move
to reduce withholding tax from 20% to 5% and the move to allow Qualified Foreign Institutions to invest in

28 29
 18th Annual Report
2011-12

The CGD segment has grown on the back of a competitive regulatory environment provided by the Petroleum and Natural • LNG new proposed terminal at Ganagavaram, Andhra Pradesh of 5 million MTPA with estimated cost of project at
Gas Regulatory Board (PNGRB), which plans to roll out CGD networks in over 200 new cities by 2015. The new regulatory Rs. 45,000 million (US$ 900 million).
framework has facilitated the entry of several new players in the segment including some of the existing energy and • Dhamra Port Co. Ltd (DPCL), a joint venture between Larsen and Toubro Ltd and Tata Steel Ltd is proposing an LNG
infrastructure players, and an international major, which is exploring a joint venture with an Indian firm for gas sourcing and terminal in the east coast of India.
distribution. • IOC has also proposed a 5 MTPA LNG terminal at Ennore, Tamil Nadu.
• The planned Mundra LNG terminal having a capacity of 5 MTPA (with an option to scale up the capacity) is being
Though the long-term prospects are bright, the CGD segment has been stagnating since early 2011. While the Supreme Court developed at the port city of Mundra by Adani Group and is expected to commence operations by 2014.
had reiterated the PNGRB’s authority in awarding licenses for the second and subsequent rounds of bidding, the board has
been unable to function due to lack of quorum. In addition to the regulatory challenges, the segment has been facing With the new proposed LNG import terminals the total new capacity to be added is approximately 25 million MTPA
transmission and supply constraints. Currently, the approximately 13,000 km of cross-country pipeline network does not
cover a large part of the country, especially the southern and eastern regions. Given the impetus on infrastructure development in various sectors as outlined above, the opportunity for Welspun Projects
in EPC and BOT projects is immense.
Expeditious completion of pipelines that have been approved by the government and award of new licenses for pipelines are
crucial for the development of the CGD segment. The CGD industry also faces challenges in sourcing gas for networks,
particularly because the government has curtailed supply to non-core sectors including CGD due to a fall in production from
the Krishna-Godavari basin. However, given the economic and environmental advantages of CGD, especially with the INFRASTRUCTURE SECTOR – SWOT ANALYSIS
increasing price of competitive fuels, several operators are sourcing liquefied natural gas (LNG) for their networks.
Source: 7th Annual Conference, Indian Infrastructure, March 2012.

Natural Gas to propel the pipe demand

Natural gas is approximately only about 11% of the primary energy production and consumption in the country. This is Strengths Weakness
expected to increase significantly reaching around 20% by 2025. Rapid economic growth & environmental concerns lead to • Economic growth to ride on infrastructure development • Lags on time and within budget execution
the rise in diversification of energy use, as many believe natural gas to be the cleanest form of energy. In spite of the growth • Stronger role of private players • Lack of fiscal ability to increase infrastructure spending
and diversification energy consumption in India, per capita energy consumption remains low at 524 kilograms of oil • Availability of international technical knowhow and more • Only 6% of GDP is spent on this sector as compared to
equivalent (kgoe) and is only about 30% of the world average. A significant part of the Indian population does not have access opportunities for Joint Venture with International Players other countries like China who spends 9%.
to any form of modern commercial energy and 80% of the rural population use non-commercial energy like biomass. • PPP model has been tested (Source: Department of Economic Affairs, monthly Economic Report)
However, one important factor to note is that India’s energy efficiency (energy use compared to GDP) has improved faster
• Increasing project cost and challenges in land acquisition
than the world average. Current GDP growth of 7% to 8% will translate into overall energy demand growth at Compounded
• Only 23.6% of FDI inflow (source: Press Information
Annual Growth Rate (CAGR) of 7.50%. (Source: Petronet Annual Report)
Bureau, Ministry of Finance Report 15-March-2012)
Imports of liquefied natural gas (LNG) by India will soar in the next decade to fuel an expanding economy, pitting India against
China and Japan for supplies as it domestic gas output struggles and overland delivery remains a dream. While buyers often
complain of the link with expensive oil in long-term Asian contracts for liquefied natural gas, India will have no choice but to INFRASTRUCTURE
sign up quickly if it wants to avoid being beaten to the supply by Japan and China. SECTOR

Signing long-term deals now would ensure more profitable operations for importers of LNG. Lacklustre domestic exploration
Opportunities Threats
results give little reason to expect a turnaround at home. Geopolitical hurdles to pipeline supplies through fractious
• Government has approved guidelines for establishing • Aggressive bidding
neighbours like Iran, Pakistan and Afghanistan have only made LNG a more serious supply source. To cope with rising imports,
joint venture companies by defense PSUs in PPP mode • Execution capability of players and timely delivery
India plans to spend billions to increase the capacity of import terminals for LNG with additional 25 million Metric Tonne Per
• Opportunities in sectors like oil and gas pipelines, • Political environment
Annum (MTPA) from the 18.6 million MTPA. Existing terminals are operated by Petronet, Royal Dutch Shell and GAIL.
• High interest rates and inflation, together with slowdown
airports, ports becoming relevant
of economic growth
• Expected US$ 1 trillion investment during 12th Five Year
• Global financial conditions and volatile exchange rates
Liquefied Natural Gas (LNG) Terminals in India Plan • Entry of foreign players
India has an LNG import capacity of 18.6 million MTPA through three existing terminals listed below:
• Overall economic environment
• Dahej LNG Terminal of 10.0 million MTPA managed by Petronet LNG Limited located at the West Coast , State of
Gujarat in Gulf of Cambay. Further expansion plans to 15 million MTPA underway. This terminal is well connected to
major trunk pipelines HBJ & DUPL of GAIL and Gujarat’s GSPL Network
(Source: Petronet LNG Corporate PPT, May 2012).
• Hazira LNG Terminal of 3.6 million MTPA operated by Shell & Total; expected throughput capacity of 10.0 million
MTPA with an investment of Rs. 30,000 million. (Source: www.haziralng.com).
• GAIL presence at Dabhol with LNG terminal of 5.0 million MTPA (Source: GAIL India Investor Presentation, May 2012).

Besides the above mentioned existing LNG terminals, below are the proposed LNG terminals.
• Petronet’s Kochi terminal of 5.0 million MTPA is under construction. It has tied up with 1.44 million MTPA LNG from
Exxon Mobil’s Gorgon Venture in Australia, and progress is on schedule with overall completion at 96.05% (Source:
Petronet LNG Corporate PPT, May 2012).

30 31
 18th Annual Report
2011-12

WELSPUN PROJECTS LIMITED – SWOT ANALYSIS Leverage Welspun’s Investments in Leighton Welspun Contractors Private Limited (Formerly Leighton Contractors (India)
Private Limited) for participation in more projects
Strengths Weakness Leverage on the association with Leighton for pre-qualifications and diversification into new segments and growth in the
order book going forward and enhance its capabilities.
• Experience of executing various types of projects like • Scale up of operations
BOT assets in Water, Roads and Bus Terminals • Difficulty to get substantial margin orders
HUMAN RESOURCE POLICY
• Project Execution Skills • Competitive bidding
• Experienced management team and skilled employee • Impairing margin Our HR policies cover our objectives, eligibility and coverage, policy and procedures. We review, revise and update our
base
Human Resource policies from time to time to make them relevant, effective and useful to its employees. The Company has
• Strong parent balance sheet for financial qualification
825 employees across various locations.
• Professional management under large Welspun group

BUSINESS OUTLOOK
WELSPUN
PROJECTS LTD. The Company has shown positive growth and continues to win substantial orders during the year. But we need to consider
that rupee has been depreciating, which may have adverse impact on inflation. The challenging economic and business
environment coupled with high interest rate, high inflation, weak currency and lower foreign investment has adversely
Opportunities Threats effected the Indian economy as well as the infrastructure sector. The company is cautiously moving ahead as we are hopeful
that government will take necessary steps and implement favourable policies to put the economy back on fast track growth
• Contribution of private sector is expected to be 50% of • Aggressive biddings and highly competitive environment and thereby paving the way for infrastructure growth, which is key for Indian growth.
total infrastructure investment • Political environment
• Higher inflation and interest rates
• Inclusion of Private players in Defense projects
INTERNAL CONTROL SYSTEMS
• Growth opportunities within the Welspun group
The Company has in place internal control systems and processes commensurate with its size and nature of business. Group
synergies and best practices have been implemented to achieve economies and ensure that there are no leakages.
Delegation of authority is exercised at various levels of management as per company policy. The Internal audit function is
carried out through an external agency with relevant expertise and skills. The function also conducts audits to test the
WELSPUN PROJECTS LIMITED – STRATEGY adequacy of internal systems and suggest continual improvements.

Focus on EPC; Target profitable growth at a faster pace

The company will focus more on EPC projects. Apart from road and water projects the Company will also explore
opportunities in the industrial segment and construction of buildings, bridges flyovers, elevated corridors, multimodal
logistic systems, bus terminal etc.

Strengthen systems and processes and scale up operations

The Company plans to scale up existing systems and process to keep in line with the growth in the volume of business.

Leverage existing approvals with clients

To leverage its existing relationships with customers to consolidate its presence in current market segments is an important
business strategy the Company is focused on. A part of this strategy also includes simultaneously building new partnerships
to increase market share and volume of business.

Build relationships with partners

Associate with sector specific specialist organizations and strengthen relationships and pre-qualifications with JV partners
and associates.

Assets and equipments utilization to the maximum

The Company plans to expand its equipment base to cater to the existing and new projects that it plans to undertake.

Focus on Pipe Laying and Leverage Welspun’s Association for more business
The Group has ambitious growth plans. The Company will participate and contribute its execution capability and expertise in
these initiatives.

32 33
 18th Annual Report
2011-12

DISCUSSION OF FINANCIAL PERFORMANCE by various BOT assets, as a result of increase in the number of vehicles using the BOT assets developed by the Company.

The discussion of the Financial Performance and Analysis below relates to the Consolidated audited financial statements of
Welspun Projects Ltd. The discussion should be read in conjunction with the consolidated financial statements and the related BALANCE SHEET
(Figures are in Rs. Million)
‘Notes to the Accounts’ for the year ended March 31, 2012.
As At 31st March 2012 As At 31st March 2011
EQUITY & LIABILITIES
KEY FINANCIAL DATA (Profit and Loss A/C)
(Figures are in Rs. Million) Share Holders' Funds
Year ended March Year ended March Change in % Share Capital 400 400
Particulars
2012 2011 Reserves & Surplus 4,748 4,715
5,148 5,115
Contract Receipt (A) 2,676 1,781 50%
Non Current Liabilities
Toll Collection (B) 694 606 15% Long Term Borrowings 2,950 3,105
Deferred Tax Liabilities (Net) 68 67
Operating Income (A+B) 3,370 2,387 41%
Long Term Provisions 8 6
EBITDA 782 535 46 % 3,025 3,179
EBITDA Margin 23% 22% 4% Current Liabilities
Short Term Borrowings 656 838
Financial Cost 515 590 -12 % Trade Payable 403 538
Depreciation and Amortization Expense 230 257 -10 % Other Current Liabilities 553 856
Short Term Provisions 5 2
Profit before Taxes (PBT) 37 (312)
1,617 2,235
Profit after Taxes (PAT) 33 (316) TOTAL (Rs.) 9,789 10,528
ASSETS
a. Operating Income Non Current Assets
The Company’s revenue is primarily generated from the various projects under Construction. Income from Civil Fixed Assets
contracts (net of Service Tax) was Rs. 2,676 million in FY 12 due to EPC contracts awarded to the company and net Tangible Assets 441 513
revenue generated out of it showing an increase of 50% compared to previous year. Toll Collection was Rs. 694
Intangible Assets 267 267
million in FY 12 includes income generated in the form of Toll charges from various BOT Assets being operational
during the year. BOT Project Expenditure 5,837 5,864
Non Current Investment 4 3
b. EBITDA Other Non Current Assets 0 1
The Company’s EBITDA in FY12 stands at Rs. 782 million which is higher than corresponding year’s EBITDA of Rs. 535 Long term Loans & Advances 309 210
million showing marginal improvement in EBITDA margins at 23% in FY12 as compared to 22% in FY11 This is due to
6,859 6,858
increase in business operations in FY12.
Current Assets
c. Financial Cost Current Investment 51 1444
The Company’s Financial Costs has decreased by 12.71% at Rs. 515 million in FY12 as compared to Rs. 590 million in Inventories 401 557
FY11 due to repayment of some high cost debt during the year, reduction in interest expense and borrowing cost as Trade Receivable 1,220 954
compared to previous year. Cash and Bank Balances 634 491
Short Term Loans & Advances 625 225
d. Depreciation/Amortization expenses
2,931 3 671
Depreciation/Amortization has decreased by 10.50% at Rs. 230 million in FY12 as compared to Rs. 257 million in
FY11. Having, regard to the accounting policies followed by the Company, the entire expenditure incurred thereon TOTAL (Rs.) 9,789 10,528
is shown as Build, Operate and Transfer project expenditure and would be amortized / written off based on the
projected toll revenue.
NET WORTH
e. Profit (Loss) before Tax (PBT)
The PBT stands at Rs.37 million in FY12 as compared to Rs. -312 million in FY11. The Net worth of the Company stands at Rs. 5,148 million as at March 31, 2012 as compared to Rs. 5,115 million as at March
31, 2011. The Net worth increased due to the profit earned and retained by the company for the financial year ended 31st
f. Profit (Loss) after Tax (PAT) March 2012.
The PAT stands at Rs. 33 million in FY12 as compared to Rs. -316 million in FY11. This increase in Profit in FY12 is due
to income generated in the form of contract receipts on the EPC projects received by the Company and Toll charges

34 35
 18th Annual Report
2011-12

SHARE CAPITAL • Short Term Provisions: Short Term Provisions stands at Rs. 5 million at the end of FY12 as compared to Rs. 2 million at
the end of FY11. This was mainly on account of increase in Provision for Leave Benefits for the employees of the Company.
The total number of equity shares stands at 40,000,000 shares as at 31st March 2012 which is same as in the previous
financial year.
NON CURRENT ASSETS

RESERVE AND SURPLUS The total non current assets stands at Rs. 6,859 million assets as of 31st March, 2012. The components of non current assets
include:
The reserve and surplus of the Company stand at Rs. 4,748 million at the end of FY12 as compared to Rs. 4,715 million at the
end of FY11. • The gross block of tangible and intangible fixed assets stands at Rs. 1,275 million in FY12 as compared to Rs. 1,274
million in FY11. This change was mainly due to depreciation charged on tangible assets during the year.
• Capital Reserves: Capital Reserves as of 31st March, 2012 amounted to Rs. 1,266 million which is the same as in the
previous financial year. • The non current investment stands at Rs. 4 million in FY12 as compared to Rs. 3 million in FY11. This was due to
increase in investment in government securities during the year.
• Security premium reserves: Securities Premium account reserves stands at Rs. 2,887 million at the end of FY12
which is the same as in the previous financial year. • The long term loans and advances have increased to Rs. 309 million in FY12 as compared to Rs. 210 million in FY11.
This was due to increase in loan & advances paid to the joint ventures and subsidiaries and advances paid for capital
• Amalgamation Reserves: Amalgamation Reserves as of 31st March, 2012 amounted to Rs. 52 million at the end of purchase of assets during the year.
FY12 which is same as in the previous financial year

• General Reserves: General Reserves in unchanged at Rs. 32 million at the end of FY12. CURRENT ASSETS

• Surplus / (deficit) in the statement of Profit & Loss: The balance retained in Profit and Loss as on 31st March, 2012 The current assets of the Company stand at Rs. 2,931 million at the end of FY12 as compared to Rs. 3,671 million at the end of
has increased by Rs. 33 million. Balance at the end of FY12 is Rs. 512 million. FY11. The components of current assets include:
• Current Investment: Current Investment stands at Rs. 50 million in FY12 as compared to Rs. 1,444 million in FY11.
This was due to company’s investment of Rs. 50 million in Power Grid Bonds during the FY12 as compared to
NON CURRENT LIABILITIES investment of Rs. 1,149 million in different bonds in FY11.

The non current liabilities of the Company stand at Rs. 3,025 million at the end of FY12 as compared to Rs. 3,179 million at the • Inventories: The inventories has reduced to Rs. 401 million at the end of FY12 from Rs. 557 million at the end of FY11
end of FY11 showing a decrease of 4.84%. The components of non current liabilities are as follows: showing a decrease of 28% increase in business operations.

• Long Term Borrowing: The non current portion of Long Term Borrowing has decreased by Rs. 156 million at Rs. 2,949 • Trade Receivables: Trade Receivables has increased to Rs. 1,220 million at the end of FY12 from Rs. 954 million at the
million in FY12 as compared to Rs. 3,105 in FY11. This reduction is due to repayment of debt during the year end of FY11 showing an increase of 27.88 %. The company has debtor collection period of 111 days.

• Long Term Provisions: Long Term Provisions have increased by Rs. 2 million to Rs. 8 million in FY12 as compared to • Cash and Bank Balances: The Company has cash and bank balance of Rs. 634 million at the end of FY12 as compared
Rs. 6 million in FY11. This increase of 33% is due to Provision for Gratuity for employee benefit. to Rs. 491 million at the end of FY11. It has increased by 29.12%.

• Deferred Tax: Deferred Tax stands at Rs. 68 million in FY12 as compared to Rs. 67 million in FY11. • Short Term Loans and Advances: Short Term Loans and Advances has increased to Rs. 624 million at the end of FY12
from Rs. 225 million at the end of FY11 showing an increase of 177.33% . This was due to interest accrued on
advances, which has increased by 105.40% to Rs. 76 million in FY12 as compared to Rs. 37 million in FY11. There
CURRENT LIABILITIES were no advances paid to the suppliers in FY12 as compared to Rs. 4 million paid in FY11.

The current liabilities of the Company stand at Rs. 1,617 million at the end of FY12 as compared to Rs. 2,235million at the end
of FY11. The components of current liabilities include: LOAN FUNDS

• Short term borrowings: Short Term Borrowings has decreased by Rs. 181 million to Rs. 657 million in FY12 as compared The Gross Debt as on March 31, 2012 stands at Rs. 3,935 million as against Rs. 4,326 million in FY11. This was due to
to Rs. 838 million in FY11. This change of 21.59% was due to repayment of short term bank loans during the year. repayment of high cost debt paid during the year. The gross debt comprises of following items:

• Trade Payables: Trade Payables has decreased by Rs. 136 million to Rs. 403 million in FY12 from Rs. 539 million in
FY11 showing a decrease of 25.23%. The trade payable days in FY12 is 41 days as compared to 76 days in FY11. • Long Term Borrowing: The non current portion of Long Term Borrowing has decreased by Rs. 156 million at Rs. 2,949
million in FY12 from Rs. 3,105 in FY11. This reduction is due to repayment of short term bank loans during the year
• Other Current Liabilities: Other Current Liabilities has decreased by Rs. 303 million to Rs. 553 million in FY12 as
compared to Rs. 856 million in FY11 showing a decrease of 35.39%. The other current liabilities includes: • Short term borrowings: Short Term Borrowings has decreased by Rs. 181 million to Rs. 657 million in FY12 as
compared to Rs. 838 million in FY11. This change of 21.59% was due to repayment of short term bank loans during the year.
- Advance from Customers: advance from customers has decreased to Rs. 124 million in FY12 as compared
to Rs. 382 million in FY11 showing a decrease of 67.53% • Current portion of Long Term Debts stands at Rs. 329 million in FY12 as compared to Rs. 383 million in FY11.
- Current portion of Long Term Debts stands at Rs. 329 million in FY12 as compared to Rs. 383 million in FY11.

36 37
CASH FLOWS
Acting Responsibly
The table below summarizes our cash flow for the periods indicated:

March 31,2012 March 31, 2011

through CSR
Opening balance cash and cash equivalent 491.14 535.53 As a leading global business organisation, our
Net cash flow from operating activities -228.33 235.59
responsibilities extend beyond mere bottom line
concerns, and encompass our myriad social
Net cash flow from investing activities 1,268.14 -2,120.87
commitments. This long-term approach is core to
Net cash flow from financing activities -896.62 1,840.89 our business philosophy and is the way our business
Closing balance cash and cash equivalent 634.33 491.14 is conducted globally.

a) Operating Activities
Net cash flow consumed from operating activities was Rs. 228 million in FY12. This primarily includes operating
profit before working capital changes of Rs. 777 million, taxes paid of Rs. 63 million, adjustments in trade and other
receivables of Rs. 715 million, adjustment in inventories of Rs. 156 million and adjustments in trade payable &
Provisions of Rs. 384 million.

Net cash flow generated from operating activities is Rs. 236 million in FY11. It consist of operating profit before
working capital changes and tax is Rs. 390 million, taxes paid of Rs. 66 million, adjustments in trade and other
receivables of Rs. 142 million, adjustment in inventories of Rs. 229 million and adjustments in trade payable &
Provisions of Rs. 279 million.

b) Investing Activities
Net cash flow generated from investing activities was Rs. 1,268 million in FY12. This primarily includes Rs. 13 million
for the purchase of fixed assets, Rs. 5 million from the sale of fixed assets, Rs. 1399 million for investments.

Net cash flow consumed from investing activities was Rs. 2,121 million in FY11. This includes Rs. 37 million for the
purchase of fixed assets, Rs. 13 million from the sale of fixed assets, Rs. 1,445 million for investments and cash
subsidy of Rs. 89 million.

c) Financing Activities
Net cash flow consumed from financing activities was Rs. 897 million in FY12 which primarily includes Rs. 515
million of interest paid and other borrowings of Rs. 381 million.

Net cash flow generated from financing activities was Rs. 1,841 million in FY11 which includes Rs. 386 million of
interest paid, Rs. 47 million of dividend paid, other borrowings of Rs. 161 million and Rs. 2,113 million due to issue of
shares on preferential basis in FY11.

Cautionary Statement
Some of the statements in this Management Discussions and Analysis, describing the projections, estimates and expectations
may be forward looking statements within the meaning of the applicable laws and regulations. Actual results may differ
substantially from those expressed or implied. Important developments that could affect Welspun's operations include a shift
in the industry structure, significant changes in political and economic environment in India and globally, tax laws, import
duties, litigations and labour relations.

38
 18th Annual Report
2011-12

Livelihood Generation
Welspun has given importance to equipping youth with the skills that will help them to earn a
livelihood. The focus is on helping the youth from neighbouring communities get trained for better

Catalysing Change a.
livelihood options that will accelerate economic and social development.

Jeevan Asha Computer Training Centre

Salav, Alibaug, Maharashtra
Welspun has recently launched a computer training centre in Alibaug as part of its livelihood
generation programme. The centre runs in collaboration with the Light of Life Trust.
There are two important social cornerstones to Welspun’s corporate philosophy – a strong commitment to
wider, all-round social progress, and to a sustainable development that balances the needs of the present
In the current academic year, approximately 200 students from rural /tribal underprivileged
with those of the future.
families will be trained in basic computer courses to ensure employability. The course is designed
Our vision has been enshrined in the three E’s which have become the Guiding Principles of our CSR
to equip the candidates with computer skills. It also emphasises learning of other soft skills and
initiatives - Education, Empowerment & Health, and Environment, which in actual terms, has manifested
English language skills to boost a candidate’s employment potential in today’s competitive job market.
itself in the Welspun Foundation for Health and Knowledge (WFHK).

The Foundation is an essential part of our organisation, and is active wherever we have a business Empowerment and Health
presence. Through it we engage with local stakeholders, and in a process that is both consultative and Anjar, Kutch – Gujarat and Salav – Maharashtra
collaborative, we have taken up a range of innovative programmes in the spheres of health, education,
environment, as well as cultural and civic projects over the last few years. a. Anti-Tobacco and Health Project
Welspun initiated an Anti-Tobacco and health campaign in Alibaug government schools. This project
In most of our project centers we have successfully managed to integrate with the local communities and was in collaboration with Salaam Bombay Foundation and disseminates information and creates
develop mutually beneficial relationships with them. awareness about the ill effects of tobacco through active teacher participation. The project reaches
out to 33 Schools, 53 Teachers, 7 Cluster coordinators and 5 block authorities. Various activities have
During FY 2011-12, we took up a number of programmes in key economic, environmental and social been held such as teacher’s training workshops, student’s leadership development camps and
spheres. Anganwadi workers training sessions.

b. Health Care
Education Dahej
Welspun is dedicated to improving and enhancing the quality of education thus equipping the Welspun organised a free Health Camp at Jolwa Primary School, Jolwa. The Camp was inaugurated by
children of today to become the leaders of tomorrow. We work closely with the government and Mr. Sulemanbhai (Sarpanch, Jolwa village) and Mr. Ghanshyambhai (Sarpanch of Vadadala village)
non-profit organisations to provide quality education to 3,000 tribal, rural and urban children. with Welspun volunteers and participants in attendance.
Some of our key initiatives are:
The camp was the first of its kind in the locality. Doctors from the leading hospital Bharuch Global
a. Naandi Foundation: (Quality Education Programme at Primary School level) Mumbai Welspun Hospital volunteered to offer their medical expertise and service. The event was welcomed by local
Foundation for Health and Knowledge has joined hands with Naandi Foundation in a project that villagers. Around 170 adults, including mothers with children, were screened and diagnosed for
covers six Municipal Corporation of Greater Mumbai (MCGM) schools in Mumbai. With our financial various health ailments.
support, Naandi Foundation reaches out to 700 school children and provides them with quality education.
c. Mobile Health Van
b. Light of Life Trust: Project Anando: (Quality Education at Secondary School Level) Salav, Alibaug, Mumbai
Maharashtra. This initiative aims to provide quality education to underprivileged children at Salav Welspun, in collaboration with the Wockhardt Foundation, launched a mobile health unit to reach
and Alibaug. The Light of Life Trust, in association with Welspun, supports close to 100 rural/ tribal out to five underprivileged neighbouring communities in Mumbai. About 1,100 people have
children at Salav and Alibaug. benefited from the facilities provided by this van. The emphasis is on the health of the mother and
child. Regular awareness workshops are also carried out in these communities as part of preventive
health care education.

40 41
 18th Annual Report
2011-12

d. Blood Donation Camp Other Activities

Welspun HO, Mumbai
Welspun took a small step towards saving lives when it organised a blood donation camp at HO in a. CSR Expression
collaboration with Tata Memorial Hospital. Welspun HO, Mumbai
To portray the various Welspun CSR projects at different locations a special event “Welspun CSR
Altogether 123 people donated blood and 93 units were collected. As a token of appreciation, Expression”, was organised at the Head Office. It was held on the eve of Teachers’ Day, and the focus
participating employees were given donor cards from Tata Memorial Hospital which can be used by was to capture the essence of the core objectives of the company’s CSR initiatives.
the donor or their immediate family to get blood from Tata Memorial Hospital or any other blood
bank in times of emergency. NGOs such as Salaam Bombay Foundation, Light of Life Trust and Naandi Foundation, which had
worked in collaboration with Welspun CSR teams at Salav and Anjar, participated in the programme
e. Women Empowerment Initiative by organising exhibitions. They also made a presentation of their activities to Mrs. Dipali Goenka,
Varsamedi, Anjar Managing Director, WGBL, the Senior Management and other Welspun employees.
Welspun pioneered Mission Mangalam Scheme with the Gujarat Government. Currently there are
three Sakhi Swarnim Centers being run in Varsamedi, Dudhai and Bhadreshwar. This initiative widens b. Welspun’s Christmas Get Together Party
their livelihood options by building capacities and providing training to rural women. Approximately Welspun organised a Christmas Get Together Party for 120 children from Welspun-supported NGO’s.
250 women have been trained under this scheme. All of them are engaged in livelihood activity Welspun employee volunteers organised games for the children.
which has enhanced their esteem, confidence and most importantly the family’s economic standards.

Approximately 700 rural women are being empowered. The same project will be replicated in other
potential villages in collaboration with the Gujarat Government.

Charitable Donations
– Donation of bed sheets and curtains to REAP organisation and the Light of Life Trust.
– School stationery donated by Welspun employees and distributed to students from the
Vatsalya Foundation.

Employee Voluntary Programme

Special emphasis is being given on employee participation in the various schemes. An employee
voluntary workshop was organised at Salav where 20 employees discussed the plan of action for the
voluntary initiatives.

Community Development

a. Sanitation Project
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
receive an Award and Certificate from the Chief Minister of Gujarat for cleanliness and overall hygiene.

42 43
 18th Annual Report
2011-12

AUDITOR'S REPORT

Financial Section We have audited the attached Balance Sheet of M/s. Welspun Projects Limited as at 31st March, 2012 and also the annexed
statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date. These financial
Standalone Accounts statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these
Auditors Report 45 financial statements based on our audit.
Annexure to the Auditors’ Report 47
Balance Sheet 50 We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we

Profit & Loss Account 51 plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material

Notes 52 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial

Cash Flow Statement 74 statements. An audit also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for
Consolidated Accounts our opinion.
Auditors Report 75
Balance Sheet 76 1) As required by the Companies (Auditor's Report) order, 2003 issued by the Central Government of India in terms of

Profit & Loss Account 77 Section 227 (4-A) of the Companies Act, 1956, and on the basis of information and explanation given to us and the books

Notes 78 and records examined by us in the normal course of audit and to the best of our knowledge and belief, we enclose in the

Cash Flow Statement 101 Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

2) FURTHER AND SUBJECT TO OUR COMMENTS IN THE ANNEXURE REFERRED TO IN PARAGRAPH 1 ABOVE.

a) We have obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purpose of our Audit.

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from
our examination of the books.

c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in
agreement with the books of account of the Company.

d) On the basis of written representations received from the Directors and taken on record by the Board of Directors,
we report that none of the Directors is disqualified as on 31st March, 2012 from being appointed as a Director in
terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956 and

e) In our opinion, subject to non compliance with the specified accounting standards relating to :-

Disclosure of Cash Subsidy amounting to Rs.82.87 Crores received from Madhya Pradesh Rajya Setu Nirman
Nigam Limited against BOT Projects under the head 'Reserve & Surplus' instead of deducting the same from the
Project Cost as required by the Accounting Standard – 12 “Accounting for Government Grants”(See Note No. 37).

The Balance Sheet, the statement of Profit & Loss and the Cash Flow Statement dealt with by this report comply with the
other Accounting Standards as referred to in the Section 211 (3C) of the Companies Act, 1956 and

44 45
 18th Annual Report
2011-12

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts ANNEXURE TO THE AUDITORS' REPORT TO THE MEMBERS OF M/S. WELSPUN PROJECTS LIMITED,
subject to : VADODARA ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2012

Disclosure of Cash Subsidy amounting to Rs.82.87 Crores received from Madhya Pradesh Rajya Setu Nirman (REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE)
Nigam Limited, against BOT Projects under the head 'Reserve & Surplus' instead of deducting the same from the
1. a) The Company has maintained proper records showing full particulars including quantitative details and situation of
Project Cost (See Note No. 37).
its fixed assets on the basis of available information.

and read with the Significant Accounting Policies and notes appearing thereon, give the information required by b) Major portion of fixed assets has been physically verified during the year by the management in accordance with a
the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting programme of verification, which, in our opinion provides for physical verification of all the fixed assets as reasonable
interval having regards to size of the Company and nature of its business. According to the information and
principles generally accepted in India.
explanations given to us the discrepancies noticed on such verification were not material and have been properly
dealt with in the books of accounts.
i) In the case of the Balance Sheet of the state of affairs, of the Company as at 31st March, 2012 and;
ii) In the case of the statement of Profit and Loss of the Profit for the year ended on that date. c) No disposal of a substantial part of fixed assets of the Company has taken place during the year.
iii) In the case of the Cash Flow Statement, of the Cash Flow for the year ended on that date.
2. a) As explained to us, the inventories were physically verified by the management at reasonable intervals during the
year.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification
For Chandrakant & Sevantilal & J. K. Shah & Co. of inventories followed by the management are reasonable and adequate in relation to the size of the Company and
the nature of its business.
Firm Registration No. 101676W
Chartered Accountants c) As the Company has not maintained quantitative records of stock, It is not possible to find out discrepancies between
the physical stock and book records.
Place: Vadodara
3. a) The Company has granted unsecured loan to four Companies covered in the register maintained u/s 301 of the
Date : 28/05/2012
Companies Act' 1956. The maximum amount involved during the year was Rs. 10,95,09,827 and the year end
balance of loans granted to these Companies was Rs. 7,25,97,421. Including interest free loan of Rs. 2,40,44,940/-
(H. B. Shah)
Partner The Company has taken interest free unsecured loan from one Company covered in the registered maintained u/s
301 of the Companies act' 1956. The maximum amount involved during the year was Rs.20,41,71,420 and year end
Membership No.16642
balance of loan taken from such Company was Rs. 4,86,91,513.

b) In our opinion, the rate of interest, where applicable and other terms and conditions on which loan have been taken
from / granted to the Companies listed in the register maintained us 301 of the Companies act, 1956 are not prima-
facie, prejudicial to the interest of the Company.

c) The Companies to whom advance in the nature of loan is granted there is no stipulation for repayment there of. As
per the information and explanations given to us the said loan is repayable on demand. The Company is regular in
repaying the principle amount wherever stipulated.

4. In our opinion and according to the information and explanations given to us, there are , adequate internal control system
commensurate with the size of the Company and the nature of its business with regard to purchases of inventories and
fixed assets and with regard to the receipts of Civil Contracts. During the course of our audit, we have not observed any
major weakness in the internal controls.

5. a) To the best of our knowledge and belief, and according to information and explanations given to us, the transactions
that needed to be entered in to the register in pursuance of Section 301 of the Companies Act, 1956, have been so
entered.

b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of
contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and
exceeding the value of Rupees five lacs in respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

46 47
 18th Annual Report
2011-12

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits 13. The provisions of any Special Statue applicable to Chit Funds, Nidhis or Mutual Benefit Funds/Societies are not applicable
from the public. Accordingly the provisions of clause (vi) of the Companies (Auditor's Report) order 2003 are not to the Company.
applicable to the Company.
14. The Company is not dealing in or trading in shares, securities, debentures, or other investments and hence, requirement
7. The Company has appointed a partnership firm of Chartered Accountants, to carry out its internal audit function. In our of paragraph 4(xiv) are not applicable to the Company.
opinion, the internal audit system is commensurate with the size and nature of its business.
15. In our opinion and according to information and explanations given to us the term and condition on which the Company
8. The Central Government has not prescribed maintenance of cost records Under Section 209(1)(d) of the Companies Act, has given guarantee for loan taken by others from Bank / Financial Institution are not prejudicial to the interest of the
1956 for any of the products of the Company. Company.

9. a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues 16. In our opinion, the term loans have been applied for the purpose for which they were raised.
including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales
17. According to the Cash Flow Statement and other records examined by us and on the basis of information and
Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities.
explanations given to us, on an overall basis, funds raised on Short Term basis have, prima facie, not being used during the
b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of year for Long Term investment and vice versa.
such statutory dues which have remained outstanding as at 31st March, 2012 for a period of more than six months
18. During the year, the Company has not made any preferential allotment of shares to parties and Companies covered in the
from the day they become payable except Sales Tax liability of Rs. 12,95,874/- and Service Tax of Rs. 1,24,16,979/-
Register maintained U/s 301 of the Act.
c) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Custom Duty,
19. Since the Company does not have any debentures, the question of creation of securities for debentures does not arise.
Wealth Tax, Excise Duty and Cess which have not been deposited on account of any dispute except the following
disputed Demand. 20. The Company has not raised money by public issue during the year.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by
Sr. Nature of the Nature of the Amount Period to which Forum where the Company was noticed or reported during the year.
No. Status due the amount relate dispute is Pending
1. Punjab House Tax 96,89,382 2008-09 Supreme
Municipal - to Court of For Chandrakant & Sevantilal & J. K. Shah & Co.
Corporation Ludhiana 2011-12 India
Act Firm Registration No. 101676W
Chartered Accountants
2. Punjab House Tax 1,39,51,602 2008-09 Supreme
Municipal - to Court of Place: Vadodara
Corporation Jalandhar 2011-12 India Date : 28/05/2012
Act
(H. B. Shah)
3. Building and Other Labour 1,06,52,334 Various Years M.P. High
Construction Cess Court Partner
Workers Welfare Bench Membership No.16642
Cess Act, 1996. Jabalpur

4. M.P. Minor Royalty 30,25,880 Various Years District

Minerals Magistrate
Rules 1996 M.P.

10. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash
losses during the financial year covered by the audit. The Company has incurred Cash losses in the immediately
proceeding financial year.

11. The Company has not defaulted in repayment of dues to any financial institution or Banks.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures or other
securities.

48 49
 18th Annual Report
2011-12

BALANCE SHEET AS AT 31st MARCH’ 2012 STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31st MARCH’ 2012
As at As at For the year ended For the year ended
Notes March 31, 2012 March 31, 2011 Notes March 31, 2012 March 31, 2011
(Amount in Rs.) (Amount in Rs.) (Amount in Rs.) (Amount in Rs.)

EQUITY & LIABILITIES Revenue from Operation 19 2954362223 2341441404

Other Income 20 214725980 212633487
Share Holders' Funds Total Revenue (I) 3169088203 2554074891
Expenditure
Share Capital 1 400000000 400000000 Cost of Raw Material consumed 21 1064270718 1291487761
Reserves & Surplus 2 4396866749 4375397813
Purchase of Traded Goods 22 256452145 -
4796866749 4775397813
Changes in the Work in Progress 23 221954948 (214124274)
Non Current Liabilities
Employee Benefits Expense 24 269511814 211283046
Long Term Borrowings 3 924639882 1152481816
Finance Cost 25 230033439 372340077
Deferred Tax Liabilities (Net) 4 84038000 86115000
Depreciation and Amortisation expense 26 163926376 181654264
Long Term Provisions 5 8100013 6347723
1016777895 1244944539 Other Expenses 27 945557428 1015579011

Current Liabilities Total Expenses (II) 3151706868 2858219884

Short Term Borrowings 6 656360729 837850971 Profit / (Loss) before Tax & Prior Period Item 17381334 (304144994)
Trade Payable 7 393659840 445167055
Other Current Liabilities 8 445723546 716056689 Prior Period expense 437348 2907660
Short Term Provisions 9 4988758 2241298
1500732873 2001316012 Profit / (Loss) before Tax 16943986 (307052654)

TOTAL (Rs.) 7314377516 8021658364 Tax Expense

ASSETS
Current Tax - -
Non Current Assets
Earlier year Tax 2447950 -
Fixed Assets
Deferred Tax Assets / (Liabilities) 2077000 (21432000)
Tangible Assets 10 432973892 507052733
4524950 (21432000)
Intangible Assets 10 1701592 1701592
Profit / Loss for the year from continuing operation 21468936 (328484654)
Build Operate & Transfer Project Expenditure 11 2658515972 2661474418
Non Current Investment 12 632708621 631763621 Earnings per equity share of face value of Rs. 10/- each.

Long term Loans & Advances 13 409409711 231538932 Basic & Diluted 28 0.54 (8.21)

4135309788 4033531297
Current Assets Significant Accounting policies
Current Investments 14 50637629 1443707774 Notes on financial statements 1 to 42
Inventories 15 401066196 556938132
Trade Receivable 16 1521531982 1363961493
As per our report of even date For and on behalf of the Board of Directors
FOR CHANDRAKANT & SEVANTILAL & J.K. SHAH & COMPANY WELSPUN PROJECTS LIMITED
Cash and Bank Balances 17 582433022 400409218 Firm registration number: 101676W
Short Term Loans & Advances 18 623398900 223110450 Chartered Accountants

3179067728 3988127067 H. B. Shah B. K. Goenka Sunil Shinde Susheela Maheshwari

Partner Chairman Director Company Secretary
Membership No. 016642
TOTAL (Rs.) 7314377516 8021658364 Place : Vadodara Place : Mumbai
Significant Accounting policies Date : 28-05-2012 Date : 28-05-2012

Notes on financial statements 1 to 42

As per our report of even date For and on behalf of the Board of Directors
FOR CHANDRAKANT & SEVANTILAL & J.K. SHAH & COMPANY WELSPUN PROJECTS LIMITED
Firm registration number: 101676W
Chartered Accountants

H. B. Shah B. K. Goenka Sunil Shinde Susheela Maheshwari

Partner Chairman Director Company Secretary
Membership No. 016642

Place : Vadodara Place : Mumbai

Date : 28-05-2012 Date : 28-05-2012

50 51
 18th Annual Report
2011-12

NOTES ON FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012 NOTES ON FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012
As at As at As at As at
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011
(Amount in Rs.) (Amount in Rs.) Non Current Current Non Current Current

NOTE No. 1 SHARE CAPITAL NOTE No. 3 LONG TERM BORROWINGS

AUTHORISED SECURED
Term Loans from :
42000000 (Previous Year 41000000) equity Shares of Rs/ 10/- each. 420000000 410000000
1. Corporation Bank - Baroda - 10437109 5290141 19924000
Issued, Subscribed, & Paid up
Secured by Plant & Machineries, Vehicles.
40000000 (Previous year 40000000) equity Share of Rs. 10/- each 2. Kotak Mahindra bank Limited - - 85953 6748003
fully paid up. 400000000 400000000 Secured by Plant & Machineries, Vehicles and Personal Guarantee of some of the Directors
400000000 400000000 3. Hdfc Bank Limited 2008750 3232230 5186237
a OUT OF THE ABOVE SHARES: Secured by Plant & Machineries, Vehicles and Personal Guarantee of some of Directors
1 2353768 Shares are issued on conversion of foreign currency convertible bonds during the year 2007-08 4 Axis Bank Limited 768546 835130 1135371
Secured by Plant & Machineries, Vehicles and Personal Guarantee of some of Directors
2 4450000 Shares are issued on preferential basis during the year 2007-08
5. Dena Bank 162485657 55500000 215225597 44400000
3 17178888 Shares are issued on preferential basis during the year 2010-11 Secured by first mortgage and charged on all the Company's capital assets, specific &
23982656 pertaining to the Hoshangabad - Harda - Khandwa Projects only both present and future.
b The company has only one class of equity shares of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. - A first Charge on all the revenues / receivable of Hoshangabad-Harda
- Khandwa project account of the Co.
c Shares held by holding Company: - A First charge on all the intangible assets of the Company including but no limited to
Out of equity shares issued by the Company, shares held by its holding Company are as under: Goodwill of the Co.
- A first charge on Company's bank accounts including without limitation the trust and
As at As at retention account (RTA) / Escrow Account and Debt Service Reserve Account to be
Name March 31, 2012 March 31, 2011 established by the Company.
Nos. of Shares Nos. of Shares - A First charge/assignment/security on the Company right under the concession agreement,
Project documents Contract and all licence permits approvals consents and insurance
Welspun Infratech Limited 24448445 24448445 policies in respect of the projects.
(Repayable within 47 Monthly Installment of Rs. 46.25 Lacs bearing rate of Interest: 14.50%)
d Details of the share holders holding more than 5% shares
in the Company 6. Corporation Bank 199111774 33600000 236278003 33600000
Secured by first Mortgage & charge on all the movable & immovable properties of the
Welspun Infratech Limited 24448445 24448445
Raisen - Rahathgarh BOT Projects including all receivable both and present and future.
(61.12%) (61.12%) Assignment of all rights, title and Interest of the Company in respect of all the assets of the
Subhkam Ventures India Private Limited 2756034 2475060 projects, all projects agreement and Contracts including Concession Agreement.
Assignment of contractors guarnatees, performance bond and liquidated damages
(6.89%) (6.19%)
(Repayable within 84 Monthly Installment of Rs. 28 Lacs bearing rate of Interest: 13.60%)
e Reconciliation of number of shares out standing is set out below: 7. Punjab National Bank 16378830 36180000 56466507 36180000
Equity shares at the beginning of the years. 40000000 22821112 Secured by Ludhiana & Jalandhar Bus Terminal Projects, and Personal guarantee of some
Add: shares issued on Preferential basis - 17178888 of the directors
(Repayable within 18 Monthly Installment of Rs. 30.15 Lacs bearing rate of Interest: 14%)
Equity shares at the end of the year 40000000 40000000
8. Bank of India 55030283 50400000 104712367 50400000
As at As at Secured by specific Plant & Machineries and second charge on current assets of the Company.
March 31, 2012 March 31, 2011 (Repayable within 25 Monthly Installment of Rs. 42 Lacs bearing rate of Interest: 12.50%)
(Amount in Rs.) (Amount in Rs.) 9 Tata Capital Limited - 254828 5310490
Secured by Plant & Machineries, Vehicles and Personal Guarantee of some of Directors
NOTE No. 2 RESERVES & SURPLUS 10. Srei Infrastructure Finance Limited - 1901087 1796460
a. Capital Reserves Secured by Plant & Machineries, Vehicles and Personal Guarantee of some of Directors
11. Tata motor Finance Ltd - - - 987348
Subsidy from Madhya Pradesh Rajya Setu Nirman Nigam Limited
Secured by Plant & Machineries, Vehicles and Personal Guarantee of some of Directors
against Build, Operate and Transfer Projects as per the last Balance Sheet 828729840 828729840
12. Industrial Development Finance Company Limited 491633339 40589459 528199973 29016962
b. Security Premium Reserve
Terms of Repayment. 84 Months ( Mar-2019)
As per last Balance sheet 2886599786 945385442 - Secured by by way of mortgage in favour of IDFC of all movable properties pertaining to the
On issue of shares on preferential basis during the year - 1941214344 Dewas Water Supply Projects Presents, futures.
2886599786 2886599786 - a first charge by ways of the hypothecation of the all movables including movables
plant machinery, machinery spares, tools, & accessories, furniture & fixture,
c. General Reserves
vehicles and all other movable assets pertaining to the project present & future.
As per last Balance sheet 32177549 32177549 - First charge of all the book debts, operating, Cash Flows, revenue, receivables of the
d. Amalgamation Reserves Company pertaining to the Dewas Water Supply project, present & Future.
- Assignment of all rights, title and Interest of the Company in respect of all the assets of the
As per last Balance sheet 52112583 52112583
Dewas Water Supply Projects agreement and Contracts including Concession Agreement.
e. Surplus / (deficit) in the statement of Profit & Loss - First Charge over the Escrow Account. Debt Service Reserve Account and other Reserve
As per last Balance sheet 575778054 904262708 and any Other reserves and any other banks account the Company wherever maintained.
Less: Net Profit / (Loss) for the year 21468936 (328484654) - Personal Guarantee of the Directors of the Company/
(Repayable within 108 Monthly Installment of Rs. 49 Lacs bearing rate of Interest: 10.30%)
597246991 575778055
924639882 229483863 1152481816 234684871
TOTAL 4396866749 4375397813

52 53
 18th Annual Report
2011-12

NOTES ON FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012 NOTES ON FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012
As at As at As at As at
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011
(Amount in Rs.) (Amount in Rs.) (Amount in Rs.) (Amount in Rs.)

NOTE No. 4 DEFERRED TAX LIABILITY (NET) NOTE No. 7 TRADE PAYABLE

Deferred Tax Assets Trade Payable 393659840 445167055

Retirement Benefits 1624707 728000
Provision for Bad Debts 13912555 14252704 (Including dues to subsidiaries and joint Ventures)
Impairment of Assets 2186336 2186336 (refer note no. 36)

17723597 17167040 393659840 445167055

Deferred Tax Liabilities

Depreciation 101761597 103282040
DEFERRED TAX LIABILITIES (NET) 84038000 86115000

NOTE No. 8 OTHER CURRENT LIABILITIES

1. Current Maturity of Long Term Debts 229483863 234684871

(refer note no. 3)

NOTE No. 5 LONG TERM PROVISIONS 2. Statutory Liabilities 53192842 49140538

3. Security Deposits Payable 44553736 40458287
Provision for the Employees Benefits
4. Advance from Customers 118473108 381907866
Provision for Gratuity 8100013 6347723
5. Other Liabilities 19997 9865127
(refer note no. 35)
445723546 716056689
8100013 6347723

NOTE No. 9 SHORT TERM PROVISIONS

NOTE No. 6 SHORT TERM BORROWING
Provision for the Employees Benefits
SECURED
1. Provision for Leave Benefits 4988758 2241298
Working Capital Loan
(refer note no. 35)
1. Corporation Bank 12958424 13068785
4988758 2241298
Secured by fixed deposits of the Company and third Parties
2. Corporation Bank * 555621326 458378706
Secured by hypothecation of the entire stocks & book debts of the
Company.
3. Idbi Bank Limited 22545328 365262779
Secured by hypothecation of the entire stocks & book debts of the
Company.
4. Canara Bank 16544138 -
Secured by hypothecation of the entire stocks & book debts of the
Company.

UN-SECURED
From Holding Company:
Welspun Infratech Limited 48691513 1140700
Secured borrowing carries interest from 10% to 12%
656360729 837850971

* The Company had taken loan against security of fixed deposits of third parties in earlier year. The said fixed deposits encashed by the bank and
adjusted against loan by crediting the said account hence loan from Corporation Bank, includes liabilities of Rs. 4.13 Crores in respect of fixed
deposits of third parties.

54 55
 NOTES ON FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012
NOTE No. 10 FIXED ASSETS

Sr. Fixed Assets GROSS BLOCK DEPRECIATION NET BLOCK

As on Addition Deduction As on As on Addition Deduction As on As on As on
1/4/2011 During the Year During the Year 31/3/2012 1/4/2011 During the Year During the Year 31/3/2012 31/3/2012 31/3/2011

Tangible Assets

1 Free hold Land 13901378 - - 13901378 - - - - 13901378 13901378

2 Buildings 2184031 - - 2184031 1166513 51015 - 1217528 966503 1017518

3 Plant & Machineries 511080512 3540620 8659407 505961725 234829274 39047166 5829768 268046672 237915053 276251238

4 Construction Equipments 233873870 928287 - 234802157 93593098 19607370 - 113200468 121601689 140280772

5 Air-Conditioners 1619590 40390 105,800 1554180 807732 117355 24,566 900521 653659 811858

6 Vehicles 211038162 2905530 2215426 211728266 147862680 19024725 2012254 164875151 46853115 63175482

7 Computers 11498170 1650999 - 13149169 7285663 1838608 - 9124271 4024898 4212507

56
8 Office Equipments 6518264 498913 - 7017177 2782898 563809 - 3346707 3670470 3735366

9 Furniture & Fixtures 7193214 277887 - 7471101 4326600 557372 - 4883972 2587129 2866614

10 Realisation Value of Impaired

Assets 800000 800000 - - - - 800000 800000

TOTAL - (A) 999707191 9842626 10980633 998569184 492654460 80807420 7866588 565595292 432973892 507052733

Intangible Assets

11 Good Will 1701592 - - 1701592 - - - - 1701592 1701592

TOTAL - (B) 1701592 - - 1701592 - - - - 1701592 1701592

TOTAL - (A+B) 1001408783 9842626 10980633 1000270776 492654460 80807420 7866588 565595292 434675484 508754325

PREVIOUS YEAR 1001305352 34068658 34765227 1000608783 412040355 95995652 15381547 492654460 507954323

NOTES ON FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012
NOTE No. 11 BUILD, OPERATE & TRANSFER (BOT) PROJECTS EXPENDITURE

HOSHANGABAD-HARDA-KHANDWA RAISEN - RAHATGARH JALANDHAR BUS TERMINAL PROJECT LUDHIANA BUS TERMINAL PROJECT * DEWAS WATER SUPPLY PROJECTS TOTAL
Particulars As at Incurred As at As at Incurred As at As at Incurred As at As at Incurred As at As at Incurred As at As at Incurred As at
01/04/2011 During 31/03/2012 01/04/2011 During 31/03/2012 01/04/2011 During 31/03/2012 01/04/2011 During 31/03/2012 01/04/2011 During 31/03/2012 01/04/2011 During 31/03/2012
the Year the Year the Year the Year the Year the Year

Balance as per Last year 760239703 760239703 566231954 - 566231954 88705164 88705164 118309899 - 118309899 1127987698 - 1127987698 2661474418 - 2661474418

Capital Work in Progress

(refer note no. 32 (i) * 80471615 80471615 - 80471615 80471615

760239703 - 760239703 566231954 - 566231954 88705164 - 88705164 118309899 - 118309899 1127987698 80471615 1208459313 2661474418 80471615 2741946033

Less: Amortisation during the year - - 24015529 - - 17353912 - - 24138171 - - 17922449 - - - - - 83430061

CLOSING BALANCE 760239703 - 736224174 566231954 - 548878042 88705164 - 64566993 118309899 - 100387450 1127987698 80471615 1208459313 2661474418 80471615 2658515972

11.1 - Capital Work in Progress

Expense incurred Expense incurred
57

Particulars during the year during the year

2011-12 2010-11

Cost of Raw Material consumed 5603499 -

Employee Benefits Expense 9598748 -
Finance Cost 58308830 -
Depreciation 311106 -
Other Expense 43101133 -
Less: Water Supply Charge -36451701 -
80471615 -
2011-12
18th Annual Report
 18th Annual Report
2011-12

NOTES ON FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012 NOTES ON FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012
As at As at As at As at
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011
(Amount in Rs.) (Amount in Rs.) (Amount in Rs.) (Amount in Rs.)

NOTE No. 12 NON CURRENT INVESTMENTS NOTE No. 13 LONG TERM LOAN & ADVANCES
(unsecured, considered good, stated otherwise)
LONG TERM INVESTMENT
TRADE, (UNQUOTED) Security Deposits
Considered Good 100406571 110900111
Investment in subsidiaries
Considered Doubtful 6597112 -
242000 (P.Y. 242000) Equity Shares of MSK Projects
107003683 110900111
(Himmatnagar bypass) Pvt Ltd of Rs. 10/- each fully paid up 23300000 23300000
Provision for Doubtful Debts 6597112 6597112
6730000 (P.Y. 6730000) Equity shares of MSK Projects
100406571 104302999
(Kim Mandvi Corridor) Private Limited of Rs. 10/- each fully paid up 67300000 67300000
Loans & Advances to Related Parties (refer note no. 36) 151051151 31131296
Nil ( P.Y. 25500) equity Shares in Welspun Energy Maharshtra Ltd of
Tax Deducted At Source / Advance Tax (Net Of Provision for Taxation) 157951989 96104637
Rs.10/- - each fully paid up - 255000
TOTAL 409409711 231538932
10000 (P.Y. -Nil-) equity shares in Welspun Bot Projects Private Limited of
Rs.10/- each fully paid up 100000 - Debts due by Private Companies in which Directors of the Company is a Directors.
10000 (P.Y. -Nil-) equity shares in Anjar Road Private Limited of Rs.10/- Bul MSK Infrastructure P Ltd 1150899 4899116
each fully paid up 100000 - MSK Projects (Himmatnagar Bypass) P Ltd 2013476 1313415
Investment in Joint Ventures Dewas Bhopal Corridor Pvt Ltd (Loan) 127002312 4566235
50000 (P.Y. 50000) Equity shares in Bul MSK Infrastructure (India) MSK Projects (Kim Madvi Corridor Private Limited 20880566 20352530
Private Limited of Rs.10/- each Fully Paid up 27800150 27800150 Welspun Corp. Limited 3898 -
50000 (P.Y. 50000) Equity shares in Dewas Bhopal Corridor Limited of 151051151 31131296
Rs. 10/- each fully paid up. 510210900 510210900
NON-TRADE (UNQUOTED) NOTE No. 14 CURRENT INVESTMENTS
1500 (P.Y. 1500) Equity Shares in Sarv Shakti Synthetics Limited of NON-TRADE (UN-QUOTED)
Rs. 10/- each fully Paid up 15000 15000 Investment in Bonds
30000 (P.Y. 30000) Equity Shares in Myraj Consultancy Limited of Nil (P.Y. 178) Bonds of IFCI-2030 @9.70% of Rs. 1000000 each fully paid up. - 183340000
Rs. 10/- each fully paid up 300000 300000 Nil (P.Y. 500) Bonds of IDBI-2030 @9.65% of Rs. 1000000 each fully paid up. - 514900000
500 (P.Y. 500) Equity shares in MSK Finance Limited of Rs. 100/- Nil (P.Y. 257) Bonds of West Bengal Electricity Distco Ltd - 2025 @9.34%
each fully paid up 50000 50000 of Rs. 1000000 each fully paid up. - 263792500
48 (P.Y. 48) Equity shares in Nutan Nagrik Sahakari Bank Limited of 40 (P.Y. Nil) Bonds of Power Grid Corporation of India Ltd - 2017 @9.25%
Rs. 100/- each fully paid up. 4800 4800 of Rs. 1250000 each fully paid up. 50637629 -
37652 (P.Y. 37652) Equity shares in Baroda Peoples Co-Op. Bank Limited Nil (P.Y. 1260) Bonds of DHFCL 2015 10% of Rs. 100000 each fully paid up. - 127802304
of Rs.10/- each fully paid up 376521 376521 Nil (P.Y. 590) Bonds of DHFCL 2020 10.40% of Rs. 100000 each fully paid up. - 59857220
63 (P.Y. 63) Equity shares in Baroda City Co-Op. Bank Limited of Investment in Certificate of Deposits
Rs. 50/- each fully paid up 3150 3150 Nil (P.Y. 1500) NCD of CBI Rs. 100000/- each fully paid up - 146586600
1000 (P.Y. 1000) Equity shares in Classic Organisors Private Ltd of Nil (P.Y 1500) NCD of PNB Rs. 100000/- each fully paid up - 147429150
Rs. 10/- each fully paid up 10000 10000 TOTAL 50637629 1443707774
960 (P.Y. 960) Equity shares in Sindh Mechantile Co-Op. Bank Ltd of Rs.10/-
NOTE No. 15 INVENTORIES
each fully paid up 9600 9600
7400 (P.Y. 7400) Equity shares in Minar Trading Services Limited of Rs. 10/- Raw Material 206833681 140750668
each fully paid up. 74000 74000 Work In Progress 194232515 416187464
629654121 629709121 TOTAL 401066196 556938132
Less: Provision for diminution in value of investments 74000 74000
NOTE No. 16 TRADE RECEIVABLES
629580121 629635121
Outstanding for a period exceeding six months from the date they are due for payment
Investment in Government Securities
Considered good 682281670 66314750
Indira Vikash Patra 500 500
considered doubtful 25633372 25633372
Three ( P.Y. Two) Bonds of Rs. 10,00,000/- Sardar Sarovar Narmada 707915042 91948122
Nigam Limited 3000000 2000000
Less: Provision for doubtful debts 25633372 25633372
NON-TRADE (QUOTED) 682281670 66314750
1600 (P.Y. 1600) Equity Shares in Corporation Bank Of Rs. 10/- each Other Receivable:
fully Paid Up 128000 128000 Considered good 839250312 1297646743
TOTAL 632708621 631763621 considered doubtful 8012746 8012746
1. Agreegate amount of quoted Investment 128000 128000 847263058 1305659489
2. Agreegate amount of un-quoted Investment 632580621 631635621 Less: Provision for doubtful receivable 8012746 8012746
(Debts due by related parties refer note no. 36) 839250312 1297646743
3.. Agreegate amount of Market Value of Quoted Investments 679680 1020800
TOTAL 1521531982 1363961493
4. Agreegate Provision for the diminution in value of investments 74000 74000

58 59
 18th Annual Report
2011-12

NOTES ON FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012 NOTES ON FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012
As at As at As at As at
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011
(Amount in Rs.) (Amount in Rs.) (Amount in Rs.) (Amount in Rs.)

NOTE No. 17 CASH & BANK BALANCES NOTE No. 20 OTHER INCOME

Cash on hand 4976718 4086158 Interest

Balance With Bank: From Current Investment 162363470 156551620
- In current accounts 490899243 263000543 From Long Term Investment 5812972 15462121
- In fixed deposits accounts * 86557061 133322517 From Others 19915099 14568887

TOTAL 582433022 400409218 Dividend

From Current Investment 12899548 18171867
From Long Term Investment 32000 26400

NOTE No. 18 SHORT TERM LOANS & ADVANCES Insurance claim 960070 590995
(unsecured, considered good, stated otherwise) Unclaimed liabilities written back 2961238 4155946
Profit on sales of Current Investment 6388783
Inter Corporate Deposits 350000000 -
Profit on sales of assets 1628862 1581645
Advance to Supplier
Foreign Exchange Gain 19439 -
Considered good 121308836 107275973 Miscellaneous income 1744499 1524007
Considered doubtful 2640818 2637198 TOTAL 214725980 212633487
123949654 109913171
Less: Provision for Doubtful Debt 2640818 2637198
121308836 107275973 NOTE No. 21 COST OF RAW MATERIAL CONSUMED
Advance to Sub Contractors - 3819450
Inventories at the beginning of the year 140750668 125966849
Interest accrued on fixed deposits 75713325 36339827
Add: Purchases 1130353731 1306271580
Pre-Paid Expenses 4407886 11775243
1271104399 1432238429
Advance to Staff & Others 4586705 5242673 Less: Inventories at the end of the year. 206833681 140750668
Balances with Statutory Authorities 67382147 58657284 TOTAL 1064270718 1291487761
623398900 223110450
21.1 Cost of materials consumed
Particulars 2011-12 % of Consumption 2010-11 % of Consumption
NOTE No. 19 REVENUE FROM OPERATIONS -Imported - - - -
-Indigenous 1064270718 100% 1291487761 100%
Revenue from Operations:
Civil Contracts 2204993876 2080555984
Sales of Traded Goods 521705841 -
As at As at
Toll Collection 263203437 278667497
March 31, 2012 March 31, 2011
Sales of Services - 44000000 (Amount in Rs.) (Amount in Rs.)
Other Operating Revenue
NOTE No. 22 PURCHASE OF TRADED GOODS
Sales of Scrap 6764640 -
Revenue From Operations (Gross) 2996667794 2403223481 Purchases 256452145 -
Less: Service Tax 42305571 61782077 TOTAL 256452145 -
Revenue From Operations (Net) 2954362223 2341441404
22.1 Particulars of Purchase of traded goods.
19.1 Particulars of Sales of traded goods Bare Pipes 8115305 -
Electric Material 125933939 -
Electric Material 270989188 - Mechanical Material 115638845 -

Mechanical Material 233308710 - Others 6764056

256452145
Bare Pipes 8115304 -
Other Materials 9292639 -
521705841 -

60 61
 18th Annual Report
2011-12

NOTES ON FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012 NOTES ON FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012
As at As at As at As at
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011
(Amount in Rs.) (Amount in Rs.) (Amount in Rs.) (Amount in Rs.)

NOTE No. 23 CHANGE IN WORK-IN-PROGRESS NOTE No. 27 OTHER EXPENSE

Opening Stock Power & Fuel 36681311 65729635

Work in Progress 416187464 202063190 Insurance 4555445 3881958
Consultancy Charge 54322957 52614895
Less: Closing Stock
Design and Survey Expense 4246543 259100
Work in Progress 194232515 416187464 Rent 7074611 15075602
TOTAL 221954948 -214124274 Rates & Taxes 89144998 91047515
Project Monitoring Fees 4129484 5572891
Tender Fees 4219344 10625330
Traveling Expense 12500138 9911606
Vehicle Hire Charge 5123752 7312227
Security Service charge 8502506 5414874
NOTE No. 24 EMPLOYEES REMUNERATION & BENEFITS
Payment to Auditors
Salaries, Wages 239350499 181193286 - Audit Fees 1200000 1041362
- Other Services 12113 -
Contribution to Providend Funds & Other Funds 20236476 4101926
Repairs & Maintenance for
Staff Welfare Expense 9924839 25987834 Machineries 16850607 15716097
269511814 211283046 Roads - 1636117
Vehicles and Others 27032105 41907916
Provision for Bad Debts - 42880428
Bad Debts - 2206100
Impairment of the Assets - 6738590
Loss on sales of Investment - 4805661
As at As at Air Conditioning Work 3184679 4520400
March 31, 2012 March 31, 2011
Bituminous Work 6010786 16163162
(Amount in Rs.) (Amount in Rs.)
Blasting Work 679159 2814921
Bridge Work 2392380 10064825
NOTE No. 25 FINANCE COST
Boulder and Laying Work 118165 6017319
Interest Expense 205079763 328385325 Civil Work 20526654 12576342
Concrete Work 25317439 15431137
Other Borrowing Cost 24953676 43954752
Doors & Windows Work 3287476 5029639
230033439 372340077 Donation - 684429
Earth Work 24352007 148386025
Fabrication Expense 34626165 29740638
Flooring Work 10651640 21333404
Hutment 841244 2051067
Machinery Hire Charges 16630823 20366807
As at As at Masonry Work 13397291 26824303
March 31, 2012 March 31, 2011
Miscellaneous Site Work 281935335 15616729
(Amount in Rs.) (Amount in Rs.)
Land Scaping 2582774 3820283
NOTE No. 26 DEPRECIATION AND AMORTISATION Painting Work 37173005 7465448
Payment to Site Workers 76585699 69448618
- Depreciation 80807420 95995652 Pipe Laying Work 12238198 6565067
- Amortisation of the BOT Assets 83430061 85658612 Piling Work - 5311015
Reinforcement Work 17874974 22274323
164237482 181654264
Road Work 20656298 63302175
Less: Capitalised in respect of Dewas Water supply project (311106) - Safety Expense 105,240.00 -
TOTAL 163926376 181654264 Sanitary Work 1078090 1572311
Shuttering Work 33982356 44483933
Toll plaza Work 1333793 3200829
Water Proofing Work 4913858 9946840
Penalty Charge 761303 17817
Under Deck Insulation 1203238 6107362
Wbm Work - 551824
Site Running Expense - 25601325
Interest on income Tax - 119379
Miscellaneous Expenditure 15521444 23791411
TOTAL 945557428 1015579011

62 63
 18th Annual Report
2011-12

A. SIGNIFICANT ACCOUNTING POLICIES D. DEPRECIATION

A)-1. REVENUE RECOGNITION ON CONTRACTS a) Depreciation is provided on written down value basis as per the rates and method prescribed under Schedule –
XIV to the Companies Act, 1956.
a) All revenues and expenses are accounted on accrual basis except to the extent stated otherwise.
b) Intangible asset (Goodwill) is not depreciated.
b) Contract Prices are either fixed or subject to price escalation clause. The Revenue is recognized on the basis of
percentage of completion method and the stage of completion is determined on the basis of physical E. BORROWING COST
completion of proportion of contract work.
Borrowing costs directly attributable to the acquisition or construction of fixed assets are capitalized as part of the cost
c) Amount due in respect of the price escalation claim and/or variation in contract work approved by the of the assets, up to the date the assets are put to use. Other borrowing costs are charged to the profit and loss account
customers are recognized as revenue only when there are conditions stipulated in the contracts for such claims in the year in which they are incurred.
or variations and/or the same are evidenced inter alia by way of confirmation or the same are accepted by the
F. VALUATION OF INVENTORIES
customers.
a) Raw Materials are valued at lower of cost and net realizable value. Cost is determined on FIFO basis.
d) Disputed amount under the contract works are recognized as revenue when the same are settled and amounts
are received. b) Contract Work in progress is valued at tender rate having regards to unbilled work, outstanding running bills
and expected recovery thereof.
e) Liquidated damages payable, if any, as per the terms of the contract, for the delays, if any, are accounted only
when such delay is attributable to the Company. c) Stores and spares are written off in the year of purchase.
A)-2. EXPENDITURE IN RESPECT OF BUILD, OPERATE AND TRANSFER (B.O.T) PROJECT G. INVESTMENTS
a) “Expenditure incurred on construction or reconstruction (net of corresponding interest income earned on Current Investment are carried at lower of cost and quoted / fair value, computed category wide, long term
deployment or other wise of fund attributable to the project) of Build, Operate and Transfer (BOT) Project investment are stated at cost. Provision for diminution in the long term investment is made only if such a decline is
which does not represent Company's own assets is classified as “BOT PROJECT EXPENDITURE” and is amortized other than temporary.
/ written off based on the projected toll revenue estimated having regards to the toll rate & expected increase.”
H. PROVISION FOR DOUBT FUL DEBTS / ADVANCES:
b) The materials and stores etc. acquired / purchased for the construction activities of owned Build, Operate and
Provision is made in accounts for doubtful debts / advances which in the opinion of the management are considered
Transfer Projects (BOT) are classified / reflected as B.O.T. Projects Expenditure and / or work in progress, as the
doubtful of recovery.
case may be. Accordingly such purchases are disclosed as item of B.O.T. Project Expenditure.
I. CLAIMS, DEMANDS AND CONTINGENCIES
B. ADVANCES AND PROGRESS PAYMENTS AND RETENTION
Disputed and / or contingent liabilities are either provided for / or disclosed depending on management's judgment of
a) Advances received from customers in respect of contracts are treated as liability.
the outcome.
b) Progress payments received are adjusted against receivables from customers in respect of the contract work
J. RETIREMENT BENEFITS
performed.
a) Short Term Employee benefits:
c) Amount(s) retained by the customers until the satisfactory completion of the contract are recognized in the
final statement as receivables. Where such retention has been released by the customers against submission Short Term Employee Benefits are recognized in the period during which the services have been rendered.
of bank guarantee the amount so released is adjusted against receivables from the customers and value of
b) Long Term Employee benefits:
Bank guarantees is disclosed as contingent liability under bank guarantees outstanding.
i) Provident Fund, Family Pension fund
C. FIXED ASSETS
As Per Provident Fund Act 1952 all employees of the Company are entitled to receive benefits under the
1) Tangible Assets:
provident fund and family pension fund which is defined contribution plan. These contributions are made
Fixed assets are stated at cost net of recoverable taxes and includes amount added on revaluation, less to the plan administered and managed by Government of India.
accumulated deprecation and impairment loss, if any. All cost, including financing cost, till commencement of
The Company's contribution to these scheme are recognized as expense in the profit and loss account
commercial production, net changes on foreign exchange contracts and adjustments arising from exchange
during the year in which the employee renders the related service, The Company has no further obligation
rate variations attributable to the fixed assets are capitalized.
under these plans beyond its monthly contribution
2) Intangible Assets:
c) Leave encashment:
Intangible assets are stated at cost of acquisition net of recoverable taxed less accumulated amortization /
The Company has provided for the liability at year end on account of un-availed earned leave as per the
depreciation. All cost, including financing costs till commencement of commercial production, net changes on
actuarial valuation.
foreign exchange contracts and adjustments arising from exchange rate variation attributable to the intangible
assets are capitalized. d) Gratuity :
The Company provides for gratuity obligations through a Defined benefits retirement plan (“The Gratuity
Plan”) covering all employees. The present value of the obligation under such defined benefit plan is

64 65
 18th Annual Report
2011-12

determined based on the actuarial valuation using the project unit credit method, which recognizes each 28. EARNING PER SHARES:
Rs. In Lacs
period of service as giving rise to additional unit of employees benefits entitlement and measure each unit
separately to build up final obligation. The obligation is measured at the present value of the estimated Particulars 2011-12 2010-11
cash flows. The discount rate used for determining present value of the defined obligation under the
Net profit after Tax available for equity shareholders 214.69 (3284.84)
defined benefit plan is based on the market yield on Government Securities as at the balance sheet date.
Actuarial gains and losses are recognized in Profit and Loss Account as and when determined. Weighted average number of Equity Shares of Rs. 10/- each
outstanding during the year (Nos. of Shares) 4,00,00,000 3,87,29,233
The Company makes annual contribution to LIC for the gratuity plan in respect of all the employees.
Basic Earning Per Share (Rs.) 0.54 (8.48)
K. PROVISION FOR CURRENT AND DEFERRED TAX
Diluted Earning Per Share (Rs.) 0.54 (8.48)
a) Provision for current tax is made based on taxable income for the current accounting year and in accordance
with the provisions of the Income tax Act, 1961. 29. CONTINGENT LIABILITIES & COMMITMENTS:
I. Contingent Liabilities Rs. In Lacs
b) Deferred tax resulting from “timing difference” between book and taxable profit for the year is accounted for
using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date. The As At As At
deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the 31-03-2012 31-03-2011
assets will be adjusted in future.
L. FOREIGN CURRENCY TRANSACTION a. Claims against the Company / Disputed Liabilities not
acknowledged as debts 380.88 38.58
Transaction in foreign currency is recorded at the exchange rate prevailing on the date of the transaction, exchange
b. Guarantee issued by the bankers on behalf of the Company 13580.34 17543.18
rate differences resulting from foreign exchange transaction settle during the period including year end transaction of
current assets and liabilities are recognized in the profit & loss accounts. Exchange rates differences arising in relation c. Guarantee given by the Company to the bankers for the
to liabilities incurred for acquisition of fixed assets are adjusted to the carrying value of the fixed assets. facilities granted :-
1. Wholly owned subsidiaries 1131.78 1267.44
In respect of forward exchange contract, except in case of fixed assets, the difference between forward rate and the 2. Joint Ventures 37231.88 38597.66
exchange rate at the inception of the forward exchange contract is recognized as income / expenses over the life of the
d. Letter of credit issued by the Company's Bank on behalf of the
contract.
Company. 322.82 502.05
M. LEASE e. Income Tax demand disputed by the Company - 1045.79
a) OPERATING LEASE
Lease of assets under which all the risk and rewards of ownership are effectively retained by the lessor are 30. In completed contract work under contract work in progress at the various sites is estimated by the management
classified as operating leases. Lease payments under operating leases are recognized as expenses on accrual having regards unbilled work, out standing running bill and expected recovery there of.
basis in accordance with respective lease agreements. 31. Security Deposits deducted from contract receipt and mobilization advances received against contracts are subject to
confirmation and adjustment, if any, on finalization of account.
b) FINANCE LEASE
32. BUILD, OPERATE & TRANSFER (BOT) PROJECTS:
Assets acquired under leases where Company has substantially all the risk and rewards of ownership are
classified as finance lease. Assets acquired under finance are capitalized and corresponding lease liability is i) The Company obtained a contract on Build, Operate and Transfer (BOT) basis from the Madhya Pradesh State
recorded at an amount equal to the fair value of the leased assets at the inception of the lease. Initial costs Industrial Development Corporation (MPSIDC) for execution of Dewas Water Supply project.
incurred in connection with the specific leasing activities directly attributable to activities performed by the In terms of contract the ownership of the said property vests in the government immediately. Under the
Company are included as part of the amount recognized as an asset under the lease. contract the Company is entitled to collect the water supply charge during the concession period of 32 years
N. IMPAIRMENT OF ASSET including the period of construction or reconstruction.

If internal / external indications suggest that an asset of the Company may be impaired, the recoverable amount of In earlier year the Company finished the construction and obtained the provisional certificate for
asset / cash generating asset is determined on the Balance – Sheet date and if it is less than its carrying amount of the commissioning and started operations. However the Company could not achieve the optimal capacity and was
asset / cash generating unit the carrying amount of asset is reduced to the said recoverable amount. The recoverable advised to complete the project to achieve the desired and specified results by MPSIDC as also to expand the
amount is measured as the higher of net selling price and value in use of such asset / cash generating unit, which is capacity and to under take reconstruction and completion.
determined by the present value of carrying amount of the estimated future cash flow. Accordingly the Company has undertaken reconstruction and completion of the project so as to achieve the
desired capacity as also increase the capacity for supply of water from BOT Project.
O. USE OF ESTIMATES
Having, regard to the accounting policies followed by the Company, the entire expenditure incurred thereon on
The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires
(net of revenue for supply of water) is shown as Build, Operate and Transfer project expenditure and would be
estimates and assumption to be made that affect the reported amount of the assets and liabilities and disclosure of
amortized / written off based on the projected toll revenue.
contingent liabilities on the date of financial statements and the reported amount of revenue and expenses during the
reporting period. Actual results could differ from these estimates and differences between actual results and In the prior financial year(s) the Company had written off, operation and maintenance expenses including
estimates are recognized in the period in which the results are known / materialized. interest. However due to reconstruction and completion under taken, the Company has discontinued that
practice.

66 67
 18th Annual Report
2011-12

ii) The Company has obtained the contract on Build, Operate and Transfer (BOT) basis from the Punjab 33) The Company is operating in a single segment only during the year i.e. Civil Construction Contract.
Infrastructure Development Board for execution of Jalandhar Bus Terminal project.
34) Disclosure in accordance with Accounting Standard - 7 (Revised).
In terms of the contract the ownership of the said property vests in the government immediately. Under the Rs. In Lacs
contract the Company is entitled to collect Toll Charge and Rent on Shops during the concession period of 8 2011-12 2010-11
Particulars
years 5 months and 2 days for Jalandhar Bus Terminal Project (including the period of construction).
Contract Revenue 64683.64 122447.91
The Company has completed construction of the said project in the earlier year. Having regard to the
accounting policies followed by the Company the entire expenditure incurred is treated as BOT Project Contract Cost Incurred 60080.10 97506.72
Expenditure and proportionate amount of Rs.241.38 Lacs (P.Y. Rs. 235.15 Lacs) has been written off during the Recognized Profits / Losses 9775.78 9055.09
year. Advances Received 1131.06 4364.48
iii) The Company has obtained the contract on Build, Operate and Transfer (BOT) basis from the Punjab Retention Money 5230.83 4359.17
Infrastructure Development Board for execution of Ludhiana Bus Terminal Project. Gross Amount due from Customers For Contract Work 6317.69 9011.49
In terms of the contract the ownership of the said property vests in the government immediately. Under the
contract the Company is entitled to collect Toll Charge and Rent on Shops during the concession period of 10 In respect of the construction contracts, the Company follows the percentage of completion method for recognizing
years 3 months for Ludhiana Bus Terminal Project (including the period of construction). profit / loss but no provision is made for contingencies in respect of contract in progress, consistent with the practice
of the Company. Accounting Standard (AS) 7 on "Accounting for Construction Contracts" issued by the institute of
The Company has completed construction of the said project in the earlier year. Having regard to the
Chartered Accountant of India requires that an appropriate allowance be made for future unforeseen factors. In the
accounting policies followed by the Company the entire expenditure incurred is treated as BOT Project
opinion of the Company, such a provision is not required and has no financial effect.
Expenditure and proportionate amount of Rs.179.22 Lacs (P.Y. Rs. 172.11 Lacs) has been written off during the
year. 35) Disclosures relating to Employee Benefits - As per Revised AS-15:
iv) The MSK Infrastructure & Toll Bridge Private Limited ('Transferor Company') had obtained the contract on Build, During the year Company has recognized the following amount in the financial statements
Operate and Transfer (BOT) basis from Madhya Pradesh Road Development Authority for construction of
Hoshangabad–Harda–Khandwa Road Project. In Terms of the Contract the Transferor Company was entitled to a) DEFINED CONTRIBUTION PLAN:
collect the toll during the concession period of 5440 days (Including the period of the construction). The Contribution to Defined Contribution Plan recognized as Expense for the year as under:
Transferor Company was amalgamated with MSK Projects (India) Limited pursuant to scheme of amalgamation Rs. In Lacs
as approved by the Honorable High Court of Gujarat on 2nd November, 2006 with effect from 01.01.2005.
Particulars
The Transferor Company had completed the construction of the above project and was put open to traffic
Employer Contribution to Provident Fund 201.43
during the earlier year.
(41.01)
The Cost of the said project and right to collect the toll charges is transferred to and vested in the Company as
per the scheme of amalgamation. b) DEFINED BENEFIT PLAN
Having, regard to the accounting policies followed by the Company the expenditure incurred thereon, is Reconciliation of opening and closing balances of Defined Benefit obligation
treated as BOT Project Expenditure and proportionate amount of Rs. 240.15 Lacs (P.Y. 241.09 Lacs) has been Rs. In Lacs
written off during the year after considering the Cash Subsidy received/receivable from Madhya Pradesh State
Gratuity Leave Encashment
Road Development Authority.
(Funded) (Non Funded)
v) The MSK Highways Limited (“Transferor Company) had obtained the contract on Build, Operate and Transfer
(BOT Basis) from Madhya Pradesh Road Development Authority for construction of Raisen–Rahatgarh. In Defined Benefit obligation at the beginning of the year 63.47 22.41
Terms of the Contract the Transferor Company entitled to collect the toll during the concession period of 5440 (27.12) (6.58)
days (Including the period of the construction). The Transferor Company was amalgamated with MSK Projects Current Service Cost 7.36 24.05
(India) Limited pursuant to scheme of amalgamation as approved by the Honorable High Court of Gujarat on (5.07) (58.43)
2nd November, 2006 with effect from 01.01.2005.
Interest Cost 5.52 1.94
The Transferor Company had completed the construction of the above project and was put open to traffic
(2.27) (0.55)
during the earlier year.
Actuarial (gain)/loss 22.66 (1.66)
The Cost of the said project and right to collect the toll charges is transferred to and vested in the Company as
(29.00) (43.14)
per the scheme of amalgamation.
Having, regard to the accounting policies followed by the Company the expenditure incurred thereon, is Benefits Paid 18.02 NIL
treated as BOT Project Expenditure and proportionate amount of Rs.173.53 Lacs (P.Y. 158.81 Lacs) has been (NIL) (NIL)
written off during the year after considering the Cash Subsidy received/receivable from Madhya Pradesh State Defined Benefit obligation at the year end 81.00 50.07
Road Development Authority. (63.47) (22.41)

68 69
 18th Annual Report
2011-12

Reconciliation of opening and closing balances of fair value of plan Assets Actuarial Assumptions
Rs. In Lacs
Rs. In Lacs
Particulars Gratuity Leave Encashment
Particulars Gratuity (Funded) (Non Funded)
(Funded)
Discount Rate ( Per Annum) 8.70% 8.70%
Fair value of plan assets in the beginning of the year 105.08 (8.28%) (8.40%)
(32.77)
Salary Escalation ( Per Annum) 6.00% 6.00%
Expected return on plan assets 8.40 (6.00%) (6.00%)
(2.62)
Actuarial gain/(loss) (4.75) 36) Transaction with related parties (as certified by the management)
(2.62)
A. Holding Companies:
Employer contribution 0.00
(0.00) - Welspun Corp Limited
Benefits Paid 18.02 - Welspun Infratech Limited
(NIL)
Fair Value of plan assets at the end of the year 90.70 B. Subsidiary Companies:
(32.77)
- MSK Projects (Himmatnagar Bypass) Private Limited
- MSK Projects (Kim Mandvi Corridor) Private Limited
Reconciliation of Fair Value of Plan Assets and Benefit Obligation. - Welspun BOT Projects Private Limited
Rs. In Lacs - Anjar Road Private Limited

Particulars Gratuity Leave Encashment C. Integrated Joint Ventures:

(Funded) (Non Funded)
- BUL MSK Infrastructure Private Limited
Fair Value of Assets as at 31st March, 2012 90.70 50.07
- Dewas Bhopal Corridor Limited
(32.77) (22.41)
Present Value of obligation as at 31st March, 2011 81.00 50.07 a) Associate Concern:
(63.48) (22.41)
- Welspun Max Steel Limited
Amount recognized in Profit & Loss Account 31.90 27.66
(36.35) (15.84) - Welspun Steel Limited
- Welspun India Limited
- Remi Metal Limited
Expenses recognized during the year (Under the head “Salaries & Bonus” – Refer Schedule 6)
- Welspun Retails Limited
Rs. In Lacs - Welspun Captive Power Generation Limited
Particulars Gratuity Leave Encashment - Welspun Infra Projects Private Limited
(Funded) (Non Funded)
b) Key Management Personnel:
Current Service Cost 7.36 24.05
(5.07) (58.43) - B.K. Goenka - Chairman
Interest Cost 5.52 1.95 - Sunil Shinde (Director)
(2.28) (0.55)
Expected return on Plan Assets (8.40) NIL
(2.62) (NIL)
Actuarial gain/(loss) 27.42 1.66
(31.62) (43.14)
Expense Recognized in Profit and Loss Account 31.90 50.07
(36.35) (15.84)

70 71
 18th Annual Report
2011-12

Rs. In Lacs available and / or not given or confirmed by such enterprises, it is not possible to give required information in the
Sr. Transaction with Holding Subsidiary Integrated Associate Key accounts. However, in view of the management, the impact of interest, if any, which may subsequently become
Related Parties Company Companies Joint Company Management payable to such enterprise in accordance with the provisions of the Act, would not be material and the same, if any,
Venture would be disclosed in the year of payment of interest.
1. Civil Construction 1969.52 152.18 - 11225.81- - In the absence of the necessary information with the Company relating to the registration status of the suppliers under
Receipt (995.97) (1106.50) (1708.87) (3546.28) (-) the Micro, Small and Medium Enterprises Development Act' 2006, the information required under the said Act could
2. Miscellaneous Income - - 212.44 - - not be compiled and disclosed.
(440.00) (12.26) (104.81) (-) (-)
40) In the opinion of the Directors, Current Assets, Loans and Advances have value at which they are stated in the Balance
3. Material Purchase 558.32 - 1155.10 Sheet, if realized in the ordinary course of business. The provision for depreciation and for all known liabilities is
(1582.71) (-) (757.74) adequate and not in excess of the amount reasonably necessary.
4. Loan Received 4380.25 - - - -
41) Remuneration to Directors
(5726.40) (-) (-) (-) (-)
5. Repayment of Loan 3901.59 - - - -
Received (5715.00) (-) (2245.79) (-) (-) Managing Director / Director
Particulars
6. Loan Given - 657.48 250.24 9.03 - Joint Managing
(3.02) (241.95) (321.95) (-) (-) Director / Chairman
7. Repayment of Loan - 645.20 286.32 286.32 - Salaries 1,30,86,281 NIL
Given (-) (51.58) (-) (-) (-) (37,78,737) (69,13,333)

8. Guarantee Given - - 38500 - - Contribution to P.F. 6,09,935 NIL

(-) (1267.44) (38500) (-) (-) (NIL) (2710)

9. Mobilization advance - - - 126.48 - Total 1,36,96,216 NIL

Received (1355.54) (-) (-) (830.27) (-) (37,78,737) (69,16,043)

10. Mobilization advance 88.67 - - 657.27 -

repaid (1005.54) (-) (-) (259.28) (-) (Figures in brackets indicate corresponding figures of previous year)
11. Investment in - 2.00 - - -
Shares/Application (-) (2.55) (-) (-) (-) 42) CIF Value of Import Rs. –Nil-
Rs. –Nil-
12. Remuneration to the - - - - 130.86
Directors (-) (-) (-) (-) (106.90) Expenditure in Foreign currency Rs. –Nil-
13. Receivable at the end 156.86 3259.67 1401.49 1438.59 - Rs. –Nil-
of the year (3.02) (3385.50) (1899.53) (447.84) (-) Earning in Foreign Exchange Rs. –Nil-
14. Payable at the end of 1116.80 - - 40.20 - Rs. –Nil-
the year (2137.05) (-) (-) (731.20) (-)
Remittance in Foreign Currency Rs. –Nil-
Rs. –Nil-
37) Cash Subsidy of Rs.82.87 Crores (P.Y. 82.87 Crores) received from Madhya Pradesh Rajya Setu Nirman Nigam Limited,
against the Build, Operate & Transfer Project Expenditure Cost, is not reduced from the relevant project cost but the
same is shown as “Capital Reserve” in the Balance Sheet. As per our report of even date For and on behalf of the Board of Directors
FOR CHANDRAKANT & SEVANTILAL & J.K. SHAH & COMPANY WELSPUN PROJECTS LIMITED
38) Confirmations of certain parties for amounts due from them as per accounts of the company are not obtained. Firm registration number: 101676W
Amount due from customers include amounts due/with held on account of various claims. The claims will be verified Chartered Accountants

and necessary adjustments, if any, shall be made in the year of settlement. Subject to this, company is confident of H. B. Shah B. K. Goenka Sunil Shinde Susheela Maheshwari
recovering the dues and accordingly they have been classified as “debt considered good” and therefore no provision is Partner Chairman Director Company Secretary
Membership No. 016642
considered necessary, there against.
Place : Vadodara Place : Mumbai
39) Under the Micro, Small and Medium Enterprise Development Act, 2006 (“MSMED Act”) which came into force Date : 28-05-2012 Date : 28-05-2012

effective from 2nd October, 2006, certain disclosures relating to amounts due to micro, small and medium enterprises
and remained unpaid after the appointed date etc. of principal and interest amounts are required to be made. The
Company is in the process of compiling the relevant information. As the relevant information is not yet readily

72 73
 18th Annual Report
2011-12

CASH FLOW STATEMENT AUDITORS' REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS TO THE BOARD OF DIRECTORS
2011-12 2010-11 OF WELSPUN PROJECTS LIMITED
(Formerly Known as MSK Projects (India) Ltd)
A CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before Tax & prior period items 17381334 (304144994) 1. We have audited the attached Consolidated Balance Sheet of Welspun Projects Limited, its Subsidiaries and Joint Ventures, as at 31st March 2012 and
Depreciation 80807420 95995652 also the consolidated Statement of Profit and Loss and the consolidated Cash Flow Statement for the year ended on that date annexed thereto. These
Amortisation 83430061 85658612 financial statements are the responsibilities of the Company's management. Our responsibility is to express an opinion on these financial statements
based on our audit.
Interest paid (net) 205079763 167585582
Profit on Sale of Fixed Assets (1628862) (1581645)
2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit
Bad Debts - 42880428
to obtain reasonable assurance about whether the financial statements are free of material misstatement, and audit includes examining on a test basis,
Unclaimed liability written back (2961238) (4458964) evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
Impairment of fixed assets - 6738590 significant estimates made by management, as well as evaluating the over all financial statement presentation. We believe that our audit provides a
Surplus & Deficit - 209414 reasonable basis for our opinion.
Sundry Debts balances w/off - 2206100
Loss on Sale of Investments - 4805661 3. We did not audit the financial statements of two Subsidiaries whose financial statements reflect total assets of Rs.59,14,81,587 as at 31st March 2012
and total revenue of Rs. 6,74,89,577 and net Cash Flow amounting to (-) Rs. 78,68,540/- for the year then ended. These financial statements and other
Prov for Leave Encashment & Gratuity 4499750 5219019
financial information have been audited by other auditors whose reports have been furnished to us and our opinion is based solely on the report of the
Dividend received (32000) (26400) other auditors.
Operating Profits before Working Capital changes 386576229 101087055
Adjustment for: 4. We have relied on the unaudited financial statements of two subsidiaries and two joint ventures, whose financial statements reflect total assets of
Inventory 155871936 (228908093) Rs.2,99,53,33,594 as at 31st March 2012 and total revenue of Rs. 36,46,31,819 and net cash flow amounting to (-) Rs.3,48,33,426/- for the year then
Trade & Other Receivables (673882366) (197427727) ended. These unaudited financial statements as approved by the respective Board of Directors of these companies have been furnished to us by the
Management and our report in so far as it relates to the amounts included in respect of the subsidiaries and joint ventures is based solely on such
Trade Payables& Provisions (311250160) 262319718
approved unaudited financial statements.
(829260590) (164016102)
Cash generated from Operations before Tax & Prior period items (442684361) (62929047)
5. Subject to non compliance with the specified accounting standards relating to :-
Less: Direct Taxes (incl FBT) paid 61847352 64,560,463
Cash generated from Operations before Prior period items (504531713) (127489510) a) Disclosure of Cash Subsidy amounting to Rs.1,26,53,79,840/- received from Madhya Pradesh Rajya Setu Nirman Nigam Limited and Gujarat State
Less: Prior Period items 437348 2907660 Road Development Corporation against BOT Projects under the head 'Reserve & Surplus' instead of deducting the same from the Project Cost as
NET CASH GENERATED /(USED) FROM OPERATING ACTIVITIES (504969061) (130397170) required by the Accounting Standard – 12 “Accounting for Government Grants” (See Note No. 35)

B CASH FLOW FROM INVESTING ACTIVITIES We report that the consolidated financial statements have been prepared by the Welspun Projects Limited,' s management in accordance with the
requirements of Accounting standard (AS) 21 Consolidated Financial Statements and Accounting Standard (AS) 27, Financial Reporting of Interest in
Purchase of Fixed Assets (9842626) (34068658)
Joint Ventures, issued as notified by the Companies (Accounting Standard) rules 2006.
Sale of Fixed Assets 4742907 13425434
Investments 1392357145 (1449401035) 6. Based on our audit and on the consideration of the reports of other auditors on separate financial statements of the Subsidiary Companies , and Joint
BOT expenditure during the Year (80471615) (78125055) Ventures, and to the best of our information and according to the explanations given to us, subject to our comments in :-
NET CASH USED IN INVESTING ACTIVITIES 1306785811 (1548169314)
Paragraph 5 relating to Disclosure of Cash Subsidy amounting to Rs.1,26,53,79,840/ received from Madhya Pradesh Rajya Setu Nirman Nigam Limited
C CASH FLOW FROM FINANCING ACTIVITIES and Gujarat State Road Development Corporation against BOT Projects under the head 'Reserves& Surplus' instead of deducting the same from the
Project Cost (See Note No. 35)
Borrowings (Net) 47550813 1140700
Repayments during the Year (462263998) (338265623)
We are of the opinion that attached consolidated financial statements give true and fare view in conformity with the accounting principal generally
issue of shares on Preferential basis - 2113003224
accepted in India.
Dividend paid (incl Tax thereon) - (46643600)
Interest paid (Net) (205079763) (165379014) i) In the case of the consolidated Balance Sheet, of the state of affairs of the Welspun Projects Limited, as at 31st March 2012.
NET CASH FROM FINANCING ACTIVITIES (619792948) 1563855687
Net changes on Cash & Cash Equivalents (A+B+C) 182023802 (114710797) ii) In case of the consolidated Statement of profit & loss, of the Profit of Welspun Projects Limited for the year ended on that date and
Cash & Cash Equivalents - Opening Balance 400409218 515120015
582433022 400409218 iii) In the case of the consolidated Cash Flow Statement, of the cash flows for the year ended on that date.
Cash & Cash Equivalents - Closing Balance 582433022 400409218

FOR Chandrakant & Sevantilal & J. K. Shah & Co.

As per our report of even date For and on behalf of the Board of Directors Firm Registration No.101676W
FOR CHANDRAKANT & SEVANTILAL & J.K. SHAH & COMPANY WELSPUN PROJECTS LIMITED Chartered Accountants
Firm registration number: 101676W
Chartered Accountants
Place: Vadodara
H. B. Shah B. K. Goenka Sunil Shinde Susheela Maheshwari Date: 28/05/2012
Partner Chairman Director Company Secretary
(H. B. Shah)
Membership No. 016642
Partner
Place : Vadodara Place : Mumbai Membership No.16642
Date : 28-05-2012 Date : 28-05-2012

74 75
 18th Annual Report
2011-12

CONSOLIDATED BALANCE SHEET AS AT 31st MARCH’ 2012 CONSOLIDATED STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31st MARCH’ 2012
As at As at For the year ended For the year ended
Notes March 31, 2012 March 31, 2011 Notes March 31, 2012 March 31, 2011
(Amount in Rs.) (Amount in Rs.) (Amount in Rs.) (Amount in Rs.)

EQUITY & LIABILITIES INCOME

Share Holders' Funds Revenue from Operation 20 3369752627 2386999591

Share Capital 1 400000000 400000000 Other Income 21 216238973 213459233
Reserves & Surplus 2 4747893458 4714671690 Total Revenue (I) 3585991600 2600458824
5147893458 5114671690
Minority Interest - 245000
EXPENDITURE
Cost of Raw Material consumed 22 1074886924 1291601070
Non Current Liabilities
Purchase of Traded goods 23 256452145 -
Long Term Borrowings 3 2949110696 3105260731
Changes in Work in Progress 24 221954948 (214124274)
Deferred Tax Liabilities (Net) 4 67638723 67090198
Long Term Provisions 5 8100013 6347723 Employee Benefits Expense 25 285381483 222702178

3024849432 3178698652 Finance Cost 26 515453779 590851111

Current Liabilities Depreciation and Amortisation expense 27 230565330 257235536

Short Term Borrowings 6 656360729 837850971 Other Expenses 28 979128502 1043066226
Trade Payable 7 402720013 538231398 3563823111 3191331847
Other Current Liabilities 8 552573146 856375857 Less: Material cost & Other expense pertaining to bill raised to
Short Term Provisions 9 4988758 2241298 subsidiries and joint ventures 15217648 281537083
1616642646 2234699523 Total Expenses (II) 3548605463 2909794764
TOTAL (Rs.) 9789385536 10528314865
ASSETS Profit / (Loss) before Tax & Prior Period Item 37386137 (309335939)
Non Current Assets
Fixed Assets Prior Period Expenses 437348 2898351
Tangible Assets 10 441153649 513336214
Intangible Assets 10 266658460 266658460
Profit / (Loss) before Tax 36948789 (312234290)
Build Operate & Transfer Project Expenditure 11 5837229546 5863734659
Non Current Investment 12 3897571 2897571
Tax Expense
Other Non Current Assets 13 553911 934066
Current Tax (5627194) (980950)
Long term Loans & Advances 14 309311260 210104869
Earlier year Tax 2448700 (49087)
6858804398 6857665840
Current Assets Deferred Tax (548527) (2407196)

Current Investment 15 50637629 1443767774 (3727021) (3437233)

Inventories 16 401066196 556938132 Profit / (Loss) for the year from continuing operation 33221768 (315671523)
Trade Receivable 17 1220015868 954049544 Earnings per equity share of face value of Rs. 10/- each.
Cash and Bank Balances 18 634335231 491143056 Basic & Diluted 36 0.83 (8.15)
Short Term Loans & Advances 19 624526215 224750519
2930581138 3670649025 Significant Accounting policies
TOTAL (Rs.) 9789385536 10528314865 Notes on financial statements 1 to 43
Significant Accounting policies
Notes on financial statements 1 to 43

As per our report of even date For and on behalf of the Board of Directors As per our report of even date For and on behalf of the Board of Directors
FOR CHANDRAKANT & SEVANTILAL & J.K. SHAH & COMPANY WELSPUN PROJECTS LIMITED FOR CHANDRAKANT & SEVANTILAL & J.K. SHAH & COMPANY WELSPUN PROJECTS LIMITED
Firm registration number: 101676W Firm registration number: 101676W
Chartered Accountants Chartered Accountants

H. B. Shah B. K. Goenka Sunil Shinde Susheela Maheshwari H. B. Shah B. K. Goenka Sunil Shinde Susheela Maheshwari
Partner Chairman Director Company Secretary Partner Chairman Director Company Secretary
Membership No. 016642 Membership No. 016642

Place : Vadodara Place : Mumbai Place : Vadodara Place : Mumbai

Date : 28-05-2012 Date : 28-05-2012 Date : 28-05-2012 Date : 28-05-2012

76 77
 18th Annual Report
2011-12

NOTES ON CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012 NOTES ON CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012
As at As at As at As at
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011
(Amount in Rs.) (Amount in Rs.) Non Current Current Non Current Current

NOTE No. 1 SHARE CAPITAL NOTE No. 3 LONG TERM BORROWINGS

AUTHORISED Term Loans from :

42000000 (Previous Year 41000000) equity Shares of Rs/ 10/- each. 420000000 410000000 1. Corporation Bank - Baroda - 10437109 5290233 19924000
Issued, Subscribed, & Paid up Secured by Plant & Machineries, & Vehicles.

40000000 (Previous year 40000000) equity Shares of Rs. 10/- each 2. Kotak Mahindra bank Limited - - 85953 6748003
fully paid up. 400000000 400000000 Secured by Plant & Machineries, Vehicles and Personal Guarantee of some of Directors
400000000 400000000 3. Hdfc Bank Limited 2008750 3232230 5186237
Secured by Plant & Machineries, Vehicles and Personal Guarantee of some of Directors
a OUT OF THE ABOVE SHARES:
4 Axis Bank Limited 768546 835130 1135371
1 2353768 Shares are issued on conversion of foregin currency convertible bonds during the year 2007-08
Secured by Plant & Machineries, Vehicles and Personal Guarantee of some of Directors
2 4450000 Shares are issued on preferential basis during the year 2007-08
3 17178888 Shares are issued on preferential basis during the year 2010-11 5. Dena Bank 162485657 55500000 215225597 44400000
Secured by first mortgage and charged on all the Company's capital assets, specific &
23982656
pertaining to the Hoshangabad - Harda - Khandwa Projects only both present and futures.
b. Terms / rights to equity shares
- A first Charge on all the revenues / receivable of Hoshangabad-Harda - Khandwa project
The Company has only one class of equity shares of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. account of the Co.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company. The - A First charge on all the intagible assets of the Company including but no limited to
distribution will be in proportion to the number of equity shares held by the share holders. Goodwill of the Co.
c Shares held by holding Company: - A first charge on Company's bank accounts including without limitation the trust and
As at As at retention account (RTA) / Escrow Account and Debt Service Reserve Account to be
March 31, 2012 March 31, 2011 established by the Company.
Name
Nos. of Shares Nos. of Shares - A First charge/assignment/security on the Company right under the concession agreement,
Project documents Contract and all licence permits approvals consent and insurance
Welspun Infratech Limited 24448445 24448445 policies in respect of the projects.
d Details of the share holderss holding more than 5% shares (Repayable within 47 Monthly Installment of Rs. 46.25 Lacs bearing rate of Interest: 14.50%)
in the Company 6. Corporation Bank 199111774 33600000 236278003 33600000
Welspun Infratech Limited 24448445 24448445 Secured by first Mortgage & charge on all the movable & immovable properties of the
(61.12%) (61.12%) Raisen - Rahathgarh BOT Projects including all receivable both and present and future.

Subhkam Ventures India Private Limited 2756034 2475060 Assignment of all rights, title and Interest of the Company in respect of all the assets of the
projects, all projects agreement and Contracts including Concession Agreement.
(6.89%) (6.19%)
Assignment of contractors guarantees, performance bond and liquidated damages
e Reconciliation of number of shares out standing is set out below:
Equity shares at the beginning of the years. 40000000 22821112 (Repayable within 84 Monthly Installment of Rs. 28 Lacs bearing rate of Interest: 13.60%)
Add: shares issued on Preferential basis - 17178888 7. Punjab National Bank 16378830 36180000 56466507 36180000
Equity shares at the end of the year 40000000 40000000 Secured by Ludhiana & Jalandhar Bus Terminal Projects, and Personal guarantee of some
of the directors
As at As at
(Repayable within 18 Monthly Installment of Rs. 30.15 Lacs bearing rate of Interest: 14%)
March 31, 2012 March 31, 2011
(Amount in Rs.) (Amount in Rs.) 8. Bank of India 55030283 50400000 105712367 49400000
Secured by specific Plant & Machineries and second charge on current assets of the Company.
NOTE No. 2 RESERVES & SURPLUS (Repayable within 25 Monthly Installment of Rs. 42 Lacs bearing rate of Interest: 12.50%)
a. Capital Reserves 9. State Bank of India 8663135 9336000 18549378 5604000
Subsidy from Madhya Pradesh Rajya Setu Nirman Nigam Limited First Charge on the assignment of project rights/movable / im-movable property/intangible
against Build, Operate and Transfer Projects as per the last Balance Sheet 1233729840 1233729840 assets / uncalled capital of the borrower for the Himmatnagar bypass project and on
assignment of all receivable / revenue of the projects.
Subsidy from Gujrat State Road Development Corporation against Build,
Operate and Transfer Projects as per the last Balance Sheet 31650000 31650000 First charge on Company bank accounts from the Himmatnagar bypass projects including
b. Security Premium Reserve the Trust and Retention account / Escrow Account and Debt Service Reserve Account
(Debt Survive Reserve account to be maintained in the form either Bank Guarantee of ta
As per last Balance sheet 2886599786 945385442
First Charge / Assignment Security Interest on the Company’s right under the concession
On issue of shares on Preferential basis during the year - 1941214344 Agreement, Project documents, Contracts and All licences permits, approvals, Consents,
2886599786 2886599786 and insurance policies in respect of the Himmatnagar Bypass Projects)
c. General Reserves Assignment of contractors guarantee, liquidated damages letter of credit, guarantee or
As per last Balance sheet 32177549 32177549 performance bond and insurance policies pertaining to the Himmatnagar Bypass road
d. Amalgamation Reserves Projects noting the interest of the lenders.
As per last Balance sheet 52112583 52112583 First charge on all the intangible assets of the Company including but not limited to the
e. Surplus / (deficit) in the statement of Profit & Loss Goodwill of the Company pertaining and specific to the Himmatnagatr Bypass Projects.
As per last Balance sheet 478401932 794073455 First charge on all the revenue / receivable and projects accounts of the Company.
Less: Net Profit / (Loss) for the year 33221768 (315671523) 10. State Bank of India 88668293 6510682 96590785 6000000
511623700 478401932 First Charge over on the assignment of project rights/movable / im-movable property/
TOTAL 4747893458 4714671690 intangible assets / uncalled capital of the borrower for the respective projects and on

78 79
 18th Annual Report
2011-12

NOTES ON CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012 NOTES ON CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012
As at As at As at As at
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011
Non Current Current Non Current Current Non Current Current Non Current Current

assignment of all the receivable / revenue of the projects. State Bank of India & State Bank of Indore
First charge on Company's bank accounts from the Kim Mandvi projects including the Term Loan of Rs. 100 Crores repayable in 126 monthly installments on ballooning basis
Trust and Retention account / Escrow Account and Debt Service Reserve Account / with first installment to commence from 01/07/2010.
Maintenance Reserve Account or such other account to be opened as directed by the bank. Rate of Interest : Rate of Interest 0.75% below SBAR, payable at monthly with first interest
First Charge / Assignment Security Interest on the Company's right under the concession reset 3 years after first disbursement and thereafter every 2 years. Interest will be payable
Agreement, Project documents, Contracts and All licences permits, approvals, Consents, at monthly rests, as and when due.
and insurance policies in respect of the Kim Mandvi Projects) Prepayment : If prepayment is done on other than reset dates, due to account/amount of
Assignment of contractors guarantee, liquidated damages letter of credit, guarantee or term loan being taken over by another bank, the bank shall charge flat prepayment charges
performance bond and insurance policies pertaining to the Kim Mandvi Projects noting the @1% of the outstanding amount of loan. The company shall be given the chance to either
interest of the lenders. accept the reset interest rates after every 3 years from the date of first disbursement or the
company may shift to any other bank without prepayment charges if reset interest rates is
First charge on all the intangible assets of the Company including but not limited to the not acceptable to the company after giving a notice of 30 days.
Goodwill of the Company pertaining and specific to the Kim Mandvi Projects.
Default : In case of default of more than 30 days in payment of installment of principal,
11. State Bank of India 58820386 31355195 2800000 interest and all other monies on their respective due dates, to the Bank or any lender,
First Charge over on the assignment of project rights/movable / im-movable property/ the company shall pay on total outstanding amounts with the Bank, liquidated damages
intangible assets / uncalled capital of the borrower for the respective projects and on at the rate of 2% p.a. for the period of default.
assignment of all the receivable / revenue of the projects.
State Bank of Bikaner & Jaipur
First charge on Company's bank accounts from the Kon Sawle Dand Phata projects including Term Loan of Rs. 30 Crores repayable in 126 monthly installments on ballooning basis
the Trust & Retention account / Escrow Account and Debt Service Reserve Account / with first installment to commence from 01/07/2010.
Maintenance Reserve Account or such other account to be opened as directed by the bank.
Rate of Interest : Rate of Interest 1.75% below SBAR, payable at monthly with first interest
First Charge / Assignment Security Interest on the Company's right under the concession reset one year post COD and subsequent interest rate every 2 years thereafter from term
Agreement, Project documents, Contracts and All licences permits, approvals, Consents, loan limit.
and insurance policies in respect of the Kim Mandvi Projects)
Prepayment : i. Pre-payment premium @ 1% on the pre-paid amount of the term loan,
Assignment of contractors guarantee, liquidated damages letter of credit, guarantee or with a prior written notice of minimum 30 days.
performance bond and insurance policies pertaining to the Kim Mandvi Projects noting the
interest of the lenders. ii. Further, no pre-payment penalty will be payable for pre-payments, in part or full under the
following circumstances:
First charge on all the intangible assets of the Company including but not limited to the
Goodwill of the Company pertaining and specific to the Kim Mandvi Projects. • The Pre-payment is made pro-rata to all the lenders from the internal accruals of the
Company with a prior written notice of minimum 30 days or;
12. Punjab National Bank* 458450000 22960000 471793980 29000000
State Bank of Bikaner & Jaipur* 137617500 6900000 141648770 8700000 • The Pre-payment is made on each interest re-set date, after giving a prior written notice
State Bank of India* 464619000 23000000 471753069 29000000 of 30 days.
State Bank of India (Erstwhile State Bank of Indore)* 63499000 3450000 46111311 29000000 Dena Bank
State Bank of Travancor* 228700000 11500000 236075512 14400000 Term Loan of Rs. 50 Crores repayable in 126 monthly installments on ballooning basis
Dena Bank* 229458500 11500000 235911409 14500000 with first installment to commence from 01/07/2010.
IDBI Bank* 197900000 2000000 201989414 - Rate of Interest : Rate of Interest @ BLPR+0.50TP-2.25% on term Loan and Optional reset
* Secured by 1st pari passu charge with other term lenders on of interest after every three years or as decided by the consortium
All rights (including step in charge) of the project covered by Tri-partiate agreement that has Prepayment:-Recovery of pre payment charges @1% instead of applicable 2% in case
been signed by company with MPRDC (Madhya Pradesh Road Development Corporation). account is taken over by other bank before reset period.
First charge on Assignment of Toll Collection rights along with Escrow on Future Toll Collection. To exercise reset of interest option after every 3 years from date of 1st disbursement
Charge on Debt Service Reserve Account proposed to be created Hypothecation of all (called reset date(s)) and non recovery of prepayment charges in the event of takeover of
Movable, tangible & intangible, receivable, cash & investment & monies lying in trust & account by other bank due to non acceptance of reset interest by the company on such
retention account Further secured by personal guarantee of Directors & Corporate Guarantees reset dates, However the interest rates after Reset shall not be less than that charged by
of Welspun Projects Limited & Chetak Enterprises Limited. other term lenders of the project.

Further secured by pledge of Equity Shares of the company equivalent to 51% of the State Bank of Travancore
subscribed and paid up capital of the company for a period up to 36 Months from Term Loan of Rs. 50 Crores repayable in 126 monthly installments on ballooning basis
Commercial Operation Date. Thereafter, and subject to satisfactory performance of the with first installment to commence from 01/07/2010.
project and also satisfaction of lenders, the pledged shares shall aggregate 30% of the Rate of Interest : Concession pricing at 0.75% below SBTPLR till COD thereafter at
paid up capital of the company until the currency of the loan. 1.00% below SBTPLR on term Loan and with first interest reset one year post COD and
Punjab National Bank subsequent interest rate every 2 years thereafter from term loan limit.
Term Loan of Rs. 100 Crores repayable in 126 monthly installments on ballooning basis Prepayment:- 1.00% p.a. on the prepaid amount of TL for the residual period of Loan,
with first installment to commence from 01/07/2010. however no prepayment charges is payable if the prepayment is effected at the instance
Rate of Interest : Rate of Interest @ BLR+TP-1.50% on term Loan and approval for reset of the bank or prepayment is made surplus available with the company with a prior notice
of interest option after every three years. of minimum or on interest reset date.

Prepayment:-Recovery of pre payment charges @1% instead of applicable 2% in case Default : In case of default of more than 30 days in payment of installment of principal,
account is taken over by other bank before reset period. interest and all other monies on their respective due dates, to the Bank or any lender,
the company shall pay on total outstanding amounts with the Bank, liquidated damages
To exercise reset of interest option after every 3 years from date of 1st disbursement at the rate of 2% p.a. for the period of default.
(called reset date(s)) and non recovery of prepayment charges in the event of takeover of
account by other bank due to non acceptance of reset interest by the company on such reset IDBI
dates, However the interest rates after Reset shall not be less than that charged by other Term Loan of Rs.40 Crores repayable in 138 monthly installments on ballooning basis with
term lenders of the project. first installment to commence from 01/04/2011.

80 81
 18th Annual Report
2011-12

NOTES ON CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012 NOTES ON CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012
As at As at As at As at
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011
Non Current Current Non Current Current (Amount in Rs.) (Amount in Rs.)

13. Tata Capital Limited - 254828 5310490 NOTE No. 6 SHORT TERM BORROWINGS
Secured by Plant & Machineries, Vehicles and Personal Guarantee of some of Directors
14. Tata Motor Finance Limited - 987248 SECURED
Secured by Plant & Machineries, Vehicles and Personal Guarantee of some of Directors Working Capital Loan
15. Srei Infrastructure Finance Limited - 1901087 1796460 1. Corporation Bank 12958424 13068785
Secured by Plant & Machineries, Vehicles and Personal Guarantee of some of Directors Secured by fixed deposits of the Company and third Parties
16. Industrial Develeopment Finance Company Limited 491633339 43108955 528199973 29016962 2. Corporation Bank * 555621326 458378706
Terms of Repayment. 84 Months ( Mar-2019) Secured by hypothecation of the entire stocks & book debts
- Secured by by way of mortgage in favour of IDFC of all movable properties pertaining of the Company.
to the Dewas Water Supply Projects Presents, futures. 3. Idbi Bank Limited 22545328 365262779
- a first charge by ways of the hypothecation of the all movables including movables Secured by hypothecation of the entire stocks & book debts
including movable plant machinery, machinery spares, tools, & accessories, furniture & of the Company.
fixture, vehicles and all other movable assets pertaining to the project present & future. 4. Canara Bank 16544138 -
- First charge of all the book debts, operating, Cash Flows, revenue, receivables of the Secured by hypothecation of the entire stocks & book debts
Company pertaining to the Dewas Water Supply project, present & Future. of the Company.

- Assignment of all rights, title and Interest of the Company in respect of all the assets of the TOTAL 607669216 836710271
Dewas Water Supply Projects agreement and Contracts including Concession Agreement. UN-SECURED
- First Charge over the Escrow Account. Debt Service Reserve Account and other Reserve From Holding Company:
and any Other reserves and any other banks account the Company wherever maintained.
Welspun Infratech Limited 48691513 1140700
- Personal Guarantee of the Directors of the Company/
656360729 837850971
(Repayable within 108 Monthly Installment of Rs. 49 Lacs bearing rate of Interest: 10.30%)
UN-SECURED
* The Company had taken loan against security of fixed deposits of third parties in earlier year. The said fixed deposits encased by the bank and
From Related Parties
adjusted against loan by crediting the said account hence loan from Corporation Bank, includes liabilities of Rs. 4,13,08,382 in respect of fixed
Chetak Enterprise Ltd 88075000 - - -
deposits of third parties.
2949110696 329160041 3105260731 372688771

NOTE No. 7 TRADE PAYABLE

As at As at Trade Payable 402720013 538231398

March 31, 2012 March 31, 2011
(Amount in Rs.) (Amount in Rs.) (Including dues to subsidiaries and joint Ventures)
refer note no. 34
NOTE No. 4 DEFERRED TAX LIABILITY (NET) 402720013 538231398

Deferred Tax Assets

Retirement Benefits 1624707 727000
Provision for Bad Debts 13912555 16439000 NOTE No. 8 OTHER CURRENT LIABILITIES

Share of Joint Ventures 16569612 16839466 1. Current Maturity of Long Term Debts 329160042 372688771
Impairment of Assets 2186336 2186336 (refer note no. 3)
34293209 36191802 2. Statutory Liabilities 55038831 51464490
Deferred Tax Liabilities 3. Security Deposits Payable 44642663 40458287
Depreciation 101897549 103282000 4. Advance from Customers 123731611 381899182
Un-paid Liabilities 34383 - 5. Other Liabilities - 9865127
101931932 103282000 552573146 856375857
DEFERRED TAX LIABILITIES (NET) 67638723 67090198

NOTE No. 5 LONG TERM PROVISIONS NOTE No. 9 SHORT TERM PROVISIONS

Provision for the Employee Benefits Provision for the Employee Benefits
Provision for Gratuity 8100013 6347723 1. Provision for Leave Benefits 4988758 2241298
(refer note no. 33) (refer note no. 33)
8100013 6347723 4988758 2241298

82 83
 NOTES ON CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012
NOTE No. 10 FIXED ASSETS

Sr. Fixed Assets GROSS BLOCK DEPRECIATION NET BLOCK

As on Addition Deduction As on As on Addition Deduction As on As on As on
1/4/2011 During the Year During the Year 31/3/2012 1/4/2011 During the Year During the Year 31/3/2012 31/3/2012 31/3/2011

Tangible Assets

1 Free hold Land 15514133 - - 15514133 - - - - 15514133 15514133

2 Buildings 2184031 568500 - 2752531 1166513 82015 - 1248528 1504003 1017518

3 Plant & Machineries 511652960 3664792 8659407 506658345 234841053 39194207 5829768 268205492 238452853 276811907

4 Construction Equipments 236333648 928287 - 237261935 93614111 19607370 - 113221481 124040454 142719537

5 Air-Conditioners 1619590 40390 105800 1554180 807732 117355 24,566 900521 653659 811858

6 Vehicles 211860279 3002102 2215426 212646955 148444746 19149608 2012254 165582100 47064855 63415533

7 Computers 12725884 1780499 - 14506383 7639130 2287519 - 9926649 4579734 5086755

84
8 Office Equipments 7041835 2239843 - 9281678 2803353 843830 - 3647183 5634495 4238483

9 Furniture & Fixtures 7252220 586187 - 7838407 4331730 597213 - 4928943 2909464 2920491

10 Realisation Value of
Impaired Assets 800000 800000 0 800000 800000

TOTAL - (A) 1006984580 12810600 10980633 1008814547 493648369 81879117 7866588 567660898 441153649 513336214

Intangible Assets

11 Good Will 1701592 - - 1701592 - - - - 1701592 1701592

12 Good Will for Consolidation 264956868 264956868 264956868 264956868

TOTAL - (B) 266658460 - 0 266658460 - - - - 266658460 266658460

TOTAL - (A+B) 1273643040 12810600 10980633 1275473007 493648369 81879117 7866588 567660898 707812109 779994674

PREVIOUS YEAR 1271119586 36528681 34805227 1272843040 412521644 96517753 15391912 493648366 779194674

NOTES ON CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012
NOTE No. 11 BUILD, OPERATE & TRANSFER PROJECTS EXPENDITURE

HOSHANGABAD-HARDA-KHANDWA RAISEN - RAHATGARH JALANDHAR BUS TERMINAL LUDHIANA BUS TERMINAL * DEWAS WATER SUPPLY
Particulars As at Incurred As at As at Incurred As at As at Incurred As at As at Incurred As at As at Incurred As at
01/04/2011 During 31/03/2012 01/04/2011 During 31/03/2012 01/04/2011 During 31/03/2012 01/04/2011 During 31/03/2012 01/04/2011 During 31/03/2012
the Year the Year the Year the Year the Year

Balance as per Last year 757525227 757525227 566231954 - 566231954 88705164 - 88705164 118309899 - 118309899 1127987698 - 1127987698

Cost Incurred during the earlier years - - - - - - - - - - - - - - -

Payment to EPC Contractors - - - - - - - - - - - - - - -

Capital Work in Progress

(refer note no.32 (I)) * - - - - - - - - - - - - - 80471615 80471615

757525227 - 757525227 566231954 - 566231954 88705164 - 88705164 118309899 - 118309899 1127987698 80471615 1208459313

Less: Amortisation during the year - - 24015529 - - 17353912 - - 24138171 - - 17922449 - - -

CLOSING BALANCE 757525227 - 733509698 566231954 - 548878042 88705164 - 64566993 118309899 - 100387450 1127987698 80471615 1208459313

HIMMATNAGAR BYPASS KIM MANDVI (PROJECTS) BULL MSK INFRASTRUCTURE DEWAS BHOPAL CORRIDOR LTD TOTAL
Particulars As at Incurred As at As at Incurred As at As at Incurred As at As at Incurred As at As at Incurred As at
01/04/2011 During 31/03/2012 01/04/2011 During 31/03/2012 01/04/2011 During 31/03/2012 01/04/2011 During 31/03/2012 01/04/2011 During 31/03/2012
the Year the Year the Year the Year the Year
85

Balance as per Last year 55622394 - 55622394 485426080 - 485426080 61061970 - 61061970 2602864273 - 2602864273 5863734659 - 5863734659

Cost Incurred during the earlier years - - - - - - - 14314962 14314962 - - - 14314962 14314962

Payment to EPC Contractors - - - - 15217648 15217648 - 12329075 12329075 - - - 27546723 27546723

Capital Work in Progress

(refer note no.32 (I)) * - - - - - - - - - - - 80471615 80471615

55622394 - 55622394 485426080 15217648 500643728 61061970 26644037 87706007 2602864273 - 2602864273 5863734659 122333300 5986067959

Less: Amortisation during the year - - 6719025 - - 9834323 - - 7148779 - - 41706225 - - 148838413

CLOSING BALANCE 55622394 - 48903369 485426080 15217648 490809405 61061970 26644037 80557228 2602864273 - 2561158048 5863734659 122333300 5837229546

11.1 - Capital Work in Progress

Expense incurred Expense incurred
Particulars during the year during the year
2011-12 2010-11

Cost of Raw Material consumed 5603499 -

Employee Benefits Expense 9598748 -
Finance Cost 58308830 -
Depreciation 311106 -
Other Expense 43101133 -
2011-12
18th Annual Report

Less: Water Supply Charge -36451701 -

80471615 -
 18th Annual Report
2011-12

NOTES ON CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012 NOTES ON CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012
As at As at As at As at
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011
(Amount in Rs.) (Amount in Rs.) (Amount in Rs.) (Amount in Rs.)

NOTE No. 12 NON CURRENT INVESTMENTS NOTE No. 14 LONG TERM ADVANCES

LONG TERM INVESTMENTS Security Deposits

NON-TRADE (UNQUOTED)
Considered good 101101526 106260436
1500 (P.Y. 1500) Equity Shares in Sarv Shakti Synthetics Limited of
Considered doubtful 6597112 6597112
Rs. 10/- each fully Paid up 15000 15000
30000 (P.Y. 30000) Equity Shares in Myraj Consultancy Limited of 107698638 112857548
Rs. 10/- each fully paid up 300000 300000 Less: Provision for Doubtful Debts 6597112 6597112
500 (P.Y. 500) Equity shares in MSK Finance Limited of Rs. 100/- each 101101526 106260436
fully paid up 50000 50000
Advance for Capital Purchase 785546 -
48 (P.Y. 48) Equity shares in Nutan Nagrik Sahakari Bank Limited of
Rs. 100/- each fully paid up. 4800 4800 Loans & Advances to Related Parties (refer note no. 34) 53215622 6391685
37652 (P.Y. 37652) Equity shares in Baroda Peoples Co-Op. Bank Limited of Tax Deducted At Source / Advance Tax (Net Of Provision for Taxation) 154208566 97452748
Rs.10/- each fully paid up 376521 376521
TOTAL 309311260 210104869
63 (P.Y. 63) Equity shares in Baroda City Co-Op. Bank Limited of
Rs. 50/- each fully paid up 3150 3150
1000 (P.Y. 1000) Equity shares in Classic Organisors Private Ltd of Loans or advances in the nature of loan given to subsidiaries. Joint ventures, and associates
Rs. 10/- each fully paid up 10000 10000
960 (P.Y. 960) Equity shares in Sindh Mechantile Co-Op. Bank Ltd of Bul MSK Infrastructure P Ltd 12016913 1825450.00
Rs.10/- each fully paid up 9600 9600
Dewas Bhopal Corridor Pvt Ltd 41194811 4566235.00
7400 (P.Y. 7400) Equity shares in Minar Trading Services Limited of
Rs. 10/- each fully paid up. 74000 74000 Welspun Corp. Limited 3898 -
843071 843071 53215622 6391685
Less: Provision for diminution in value of investments 74000 74000
769071 769071
Investment in Government Securities
NOTE No. 15 CURRENT INVESTMENTS
Indira Vikash Patra 500 500
Three ( P.Y. Two) Bonds of Rs. 10,00,000/- NON-TRADE (UN-QUOTED)
Sardar Sarovar Narmada Nigam Limited 3000000 2000000
Investment in Bonds
NON-TRADE (QUOTED)
Nil (P.Y. 178) Bonds of IFCI - 2030 @9.70% of Rs. 1000000 each
1600 (P.Y. 1600) Equity Shares in Corporation Bank of Rs. 10/- each
fully paid up. - 183340000
fully Paid Up 128000 128000
Nil (P.Y. 500) Bonds of IDBI - 2030 @9.65% of Rs. 1000000 each
TOTAL 3897571 2897571
fully paid up. - 514900000
1. Agreegate amount of quoted Investment 128000 128000
Nil (P.Y. 257) Bonds of West Bengal Electricity Distco Ltd - 2025
2. Agreegate amount of un-quoted Investment 3843571 2843571 @9.34% of Rs. 1000000 each fully paid up. - 263792500
3. Agreegate amount of Market Valueof Quoted Investments 679680 1020800 40 (P.Y. Nil) Bonds of Power Grid Corporation of India Ltd - 2017
4. Agreegate Provision for the diminution in value of investments 74000 74000 @9.25% of Rs. 1250000 each fully paid up. 50637629 -
Nil (P.Y. 1260) Bonds of DHFCL 2015 10% of Rs. 100000 each fully paid up. - 127802304
Nil (P.Y. 590) Bonds of DHFCL 2020 10.40 % of Rs. 100000 each
NOTE No. 13 OTHER NON CURRENT ASSETS fully paid up. - 59857220
Investment in Certificate of Deposits
Unamortised Expenditure
Nil (P.Y. 1500) NCD of CBI Rs. 100000/- each fully paid up - 146586600
Balance as per last year financial statements 714816 993157
Nil (P.Y 1500) NCD of PNB Rs. 100000/- each fully paid up - 147429150
Addition during ther year - 22742
Investment in Shares
714816 1015899
Nil (P.Y. 6000) Worli Realities P Ltd 8% redeemable preferential Shares - 60000
Less: deduction during the year - 183440
TOTAL 50637629 1443767774
Less: Written Off During the year 160905 97544
553911 280984 734915
Pre-Operative Expense - 199151
TOTAL 553911 934066

86 87
 18th Annual Report
2011-12

NOTES ON CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012 NOTES ON CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012
As at As at As at As at
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011
(Amount in Rs.) (Amount in Rs.) (Amount in Rs.) (Amount in Rs.)

NOTE No. 16 INVENTORIES NOTE No. 19 SHORT TERM ADVANCES

(unsecured, considered good, stated otherwise)
Raw Material 206833681 140750668
Inter Corporate Deposits 350000000
Work In Progress 194232515 416187464
Advance to Supplier
TOTAL 401066196 556938132
Considered good 121717546 108896490
Considered doubtful 2640818 2637198
124358364 111533688
Less: Provision for Doubtful Debts 2640818 2637198
NOTE No. 17 TRADE RECEIVABLES 121717546 108896490
(unsecured, considered good, stated otherwise) Advance to Sub Contractors - 3819450
Interest accrued on fixed deposits 75713325 36359379
Outstanding for a period exceeding six months from the date
they are due for payment Pre-Paid Expenses 5093387 11775243

Considered good 380765556 62744099 Advance to Staff & Others 4619809 5242673
Balances with Statutory Authorities 67382147 58657284
Considered doubtful 25633372 25633372
TOTAL 624526215 224750519
406398928 88377471
Less: Provision for doubtful debts 25633372 25633372 NOTE No. 20 REVENUE FROM OPERATIONS
380765556 62744099
Other receivable Revenue from Operations:
Civil Contracts 2189776228 1799018901
Considered good 839250312 891305445
Sales of Traded Goods 521705841 -
considered doubtful 8012746 8012746
Toll Collection 693811489 605762767
847263058 899318191
Sales of Services - 44000000
Less: Provision for doubtful receivable 8012746 8012746
Other Operating Revenue:
(debts due by related parties refer note no. 34) 839250312 891305445
Sales of Scrap 6764640 -
TOTAL 1220015868 954049544 Revenue From Operations (Gross) 3412058198 2448781668
Less: Service Tax 42305571 61782077
Revenue From Operations (Net) 3369752627 2386999591

20.1 Particulars of Sales of traded goods.

NOTE No. 18 CASH & BANK BALANCES Electric Material 270989188 -
Mechanical Material 233308710 -
Cash & Cash Equivalent:
Bare Pipes 8115304 -
Cash on hand 12911659 10056639
Other Materials 9292639 -
Balance With Bank: 521705841
- In current accounts 509097324 346539301
- In fixed deposits accounts * 106205061 134547116 NOTE No. 21 OTHER INCOME
- Cheques on hand 200000 -
Interest
Other Bank Balance
From Current Investment 162363470 156551620
earmark balances with bank -
From Long Term Investment 5812972 15462121
In Current Accounts 5770743 -
From Others 21320978 15394633
in Fix deposits accounts 150444 -
Dividend
TOTAL 634335231 491143056 From Current Investment 12899548 18171867
From Long Term Investment 32000 26400
Insurance claim 960070 590995
Unclaimed liabilities written back 3024985 4155946
Profit on sales of Current Investment 6388783 -
Profit on sales of assets 1628862 1581645
Foreign Exchange Gain 19439 -
Miscellaneous income 1787867 1524007
TOTAL 216238973 213459233

88 89
 18th Annual Report
2011-12

NOTES ON CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012 NOTES ON CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH 2012
As at As at As at As at
March 31, 2012 March 31, 2011 March 31, 2012 March 31, 2011
(Amount in Rs.) (Amount in Rs.) (Amount in Rs.) (Amount in Rs.)

NOTE No. 22 COST OF RAW MATERIAL CONSUMED NOTE No. 28 OTHER EXPENSE

Inventories at the beginning of the year 140750668 125966849 Power & Fuel 39965431 66470741
Insurance 5172172 4167873
Add: Purchases 1140969937 1306384889
Consultancy Charge 55034365 54566351
1281720605 1432351738
Rent 7167811 15231152
Less: Inventories at the end of the year. 206833681 140750668 Rates & Taxes 89202802 91047515
TOTAL 1074886924 1291601070 Project Monitoring Fees 7329284 5572891
Project Maintenance Fees 3275130 -
22.1 Cost of materials consumed 2011-12 % of Consumption 2010-11 % of Consumption Tender Fees 4219344 10625330
Travelling Expense 13333252 10724006
-Imported - - - -
Vehicle Hire Charge 5595311 7518459
-Indigenous 1074886924 100% 1291601070 100% Security Service charge 9235906 12450070
Payment to Auditors
NOTE No. 23 PURCHASE OF STOCK IN TRADE - Audit Fees 1504851 1291551
- Other Services 12113 41362
Purchases 256452145 - Repairs & maintenance for -
Total 256452145 - Machineries 16924511 15795827
23.1 Particulars of stock in trade Roads 13185795 6813363
Vehicles and Others 27314670 42300580
Bare Pipes 8115305 -
Provision for Bad Debts - 42880428
Electric Material 125933939 - Bad Debts - 2206100
Mechanical Material 115638845 - Impairment of the Assets - 6738590
Others 6764056 Loss on sales of Investment - 5015130
256452145 0 Air Conditioning Work 3184679 4520400
Bituminous Work 6010786 16163162
Blasting Work 679159 2814921
NOTE No. 24 CHANGE IN WORK IN PROGRESS Bridge Work 2392380 10064825
Boulder and Laying Work 118165 6017319
Opening Stock
Civil Work 20526654 12576342
Work in Progress 416187464 202063190 Concrete Work 25317439 15431137
Less: Closing Stock Cd Work - 259100
Work in Progress 194232515 416187464 Doors & Windows Work 3287476 5029639
TOTAL 221954948 (214124274) Design and Survey Expense 4360843 274516
Donation 93483 684530
Earth Work 24352007 148386025
NOTE No. 25 EMPLOYEES REMUNERATION & BENEFITS Fabrication Expense 34626165 29740638
Flooring Work 10651640 21333404
Salaries, Wages 252451144 190116916 Hutment 841244 2051067
Contribution to Providend Funds & Other Funds 20236476 4101926 Machineries Hire Charges 18086856 22660003
Staff Welfare Expense 12693863 28483336 Masonry Work 13397291 26824303
285381483 222702178 Miscellaneous Site Work 282661444 20475353
Land Scaping 2582774 3820283
Painting Work 37173005 7465448
NOTE No. 26 FINANCE COST Payment to Site Workers 77305489 69792398
Pipe Laying Work 12238198 6565067
Interest Expense 488943398 546178240 Piling Work - 5311015
Other Borrowing Cost 26510381 44672871 Reinforcement Work 17874974 22274323
515453779 590851111 Road Work 20656298 63302175
Safety Expense 105240 -
Sanitary Work 1078090 1572311
NOTE No. 27 DEPRECIATION AND AMORTISATION Shuttering Work 33982356 44483933
Toll Expense 2128834 3361625
- Depreciation 81879117 96517753
Water Proofing Work 4913858 9946840
- Amortisation of the BOT Assets 148838413 160620239 Penalty Charge 761303 17817
- Preliminary Expense 158905 97544 Under Deck Insulation 1203238 6107362
Less: Capitalised in respect of Dewas Water supply project (311106) - Wbm Work - 551824
TOTAL 230565330 257235536 Site Running Expense - 25566661
Interest on income Tax - 119379
Miscellaneous Expenditure 18064385 26043762
TOTAL 979128502 1043066226

90 91
 18th Annual Report
2011-12

SIGNIFICANT ACCOUNTING POLICIES ON CONSOLIDATED ACCOUNTS c. The significant joint Venture Companies considered in the consolidated financial statements.
1. BASIS OF CONSOLIDATION:
Name of the Company Country of % of Ownership
A. Basis of Accounting: Incorporation interest as on
31st Mar' 12
The Consolidated financial statements relate to M/s. Welspun Projects Limited, its subsidiary Companies, and joint
ventures Companies are drawn up to the same reporting date as of the Company, i.e. year ended 31st March 2012. BUL-MSK Infrastructure Private Limited * India 50%
B. Principle of Consolidation: Dewas Bhopal Corridor Limited * India 50%

a. The Consolidated Financial statements have been prepared by the Company in accordance with the
* Un-audited accounts (as certified by the management of the Company) as at 31st March 2012 is taken into
requirements of Accounting Standard – 21 (Consolidated Financial Statements & Accounting Standard AS-27
consideration for consolidated financial statements.
(Financial Reporting of interest in joint ventures) issued by the Institute of Chartered Accountants of India. The
Consolidated Financial Statements have been prepared on the following basis. C. Other Significant Accounting policies:
i. The financial statements of the Company and its subsidiary Companies are combined on a line by line basis by These are set out under "Significant Accounting Policies" as given in the Company's separate statements.
adding together the book value of the like item of assets, liabilities, income and expenses after fully eliminating
29) CONTINGENT LIABILITIES AND COMMITMENTS:
intra group balances and intra group transactions resulting in unrealized profit. Minority Interest in subsidiaries
represents the minority share holder proportionate shares of the net assets and net income. Contingent Liabilities:
Rs. In Lacs
ii. The Company's share in each of the assets, liabilities income and expenses of jointly controlled entities are
reported as separate item. As At As At
31-03-2012 31-03-2011
iii. The difference between the Company's cost of investments in the subsidiaries over its position of equity at the
time of acquisition of the shares is recognized in the consolidated financial statements as goodwill or Capital a. Claims against the Company / Disputed Liabilities not
Reserves as the case may be. acknowledged as debts 380.88 38.58
iv. The difference between costs of the Company's interest in jointly controlled entities over its shares of net b. Guarantee issued by the bankers on behalf of the Company 13590.34 17570.18
assets in the jointly controlled entities at the date on which interest is acquired is recognized in the c. Letter of credit issued by the Company's Bank on behalf
consolidated financial statement as Goodwill or Capital Reserves as the case may be. of the Company. 322.82 502.05
v. Good-will recognized in the Consolidated Financial Statement is not amortized. d. Income tax Demand disputed by the Company - 1045.79
vi. The Consolidated Financial Statements are prepared by adopting uniform accounting policies for like e. Liabilities of stamp duty in respect of joint Venture Company 853.28 853.28
transactions and other events in similar circumstances and presented to the extent possible, in the financial f. Liability of Labour cess in respect of Joint Venture Company 477.84 477.84
statements.
b. The subsidiary Companies considered in the consolidated financial statements are : 30) Incomplete Contract work under Contract Work In Progress at the various sites is estimated by the management
having regards to unbilled work, outstanding running bill and expected recovery thereof.
Name of the Company Country of % of Ownership 31) Security Deposits deducted from contract receipt and mobilization advances received against contracts are subject to
Incorporation interest as on confirmation and adjustment, if any, on finalization of account.
31st Mar' 12
32) Build, Operate & Transfer Projects (BOT Projects)
MSK Projects (Kim Mandvi Corridor) Private Limited India 100%
i) The Company obtained a contract on Build, Operate and Transfer (BOT) basis from the Madhya Pradesh State
MSK Projects (Himmatnagar Bypass) Private Limited India 100% Industrial Development Corporation (MPSIDC) for execution of Dewas Water Supply project.
Welspun BOT Projects Private Limited * India 100%
In terms of contract the ownership of the said property vests in the government immediately. Under the
Anjar Road Private Limited * India 100% contract the Company is entitled to collect the water supply charge during the concession period of 32 years
including the period of construction or reconstruction.
* Un-audited accounts (as certified by the management of the Company) as at 31st March 2012 is taken into In earlier year the Company finished the construction and obtained the provisional certificate for
consideration for consolidated financial statements. commissioning and started operations. However the Company could not achieve the optimal capacity and was
advised to complete the project to achieve the desired and specified results by MPSIDC as also to expand the
capacity and to under take reconstruction and completion.
Accordingly the Company has undertaken reconstruction and completion of the project so as to achieve the
desired capacity as also increase the capacity for supply of water from BOT Project.

92 93
 18th Annual Report
2011-12

Having, regard to the accounting policies followed by the Company, the entire expenditure incurred thereon The Transferor Company had completed the construction of the above project and was put open to traffic
(net of revenue for supply of water) is shown as Build, Operate and Transfer project expenditure and would be during the earlier year.
amortized / written off based on the projected toll revenue.
The Cost of the said project and right to collect the toll charges is transferred to and vested in the Company as
In the prior financial year(s) the Company had written off, operational and maintenance expenses including per the scheme of amalgamation.
interest. However due to reconstruction and completion under taken, the Company has discontinued that
Having, regard to the accounting policies followed by the Company the expenditure incurred thereon, is
practice.
treated as BOT Project Expenditure and proportionate amount of Rs.1,73,.53,912 (P.Y. 1,58,80,663) has been
ii) The Company had obtained the contract on Build, Operate and Transfer (BOT) basis from the Punjab written off during the year after considering the Cash Subsidy received/receivable from Madhya Pradesh State
Infrastructure Development Board for execution of Jalandhar Bus Terminal project. Road Development Authority.
In terms of the contract the ownership of the said property vests in the government immediately. Under the vi) MSK Projects (Kim Mandvi Corridor) Private Limited, the subsidiary had obtained Build, Operate, & Transfer
contract the Company is entitled to collect Toll Charge and Rent on Shops during the concession period of 8 (BOT Contract) from Gujarat State Road Development Corporation Ltd. for construction of Strengthening and
years 5 months and 2 days for Jalandhar Bus Terminal Project (including the period of construction). Widening, and maintenance of Kim Mandvi Corridor Projects. In terms of the contract, the company has been
entitled to collect toll during the concession period of 20 years (Including the period of Construction). The
The Company has completed construction of the said project in the earlier year. Having regard to the
Company has Completed the Construction of the said project and put to open for the traffic during the year.
accounting policies followed by the Company the entire expenditure incurred is treated as BOT Project
Expenditure and proportionate amount of Rs.2,40,15,529 (P.Y. Rs. 2,35,15,491) has been written off during the Having, regard to the accounting policies followed by the Company the expenditure incurred thereon, is
year. treated as BOT Project Expenditure and proportionate amount of Rs.98,34,323 (P.Y. 1,07,02,559) has been
written off during the year after considering the Cash Subsidy received/receivable from Gujarat State Road
iii) The Company had obtained the contract on Build, Operate and Transfer (BOT) basis from the Punjab
Development Corporation.
Infrastructure Development Board for execution of Ludhiana Bus Terminal Project.
vii) MSK Projects (Himmatnagar bypass) Private Limited, the subsidiary, had obtained Build, Operate, & Transfer
In terms of the contract the ownership of the said property vests in the government immediately. Under the
(BOT Contract) from Gujarat State Road Development Corporation for construction of Strengthen and
contract the Company is entitled to collect Toll Charge and Rent on Shops during the concession period of 10
Widening, and maintenance of Himmatnagar bypass. In terms of the contract, the company has been entitled
years 3 months for Ludhiana Bus Terminal Project (including the period of construction).
to collect toll during the concession period of 15 years.( 5112 Days )(Including the period of Construction).
The Company has completed construction of the said project in the earlier year. Having regard to the
Having regards to the Accounting Policies followed by the company, the entire expenditure incurred on
accounting policies followed by the Company the entire expenditure incurred is treated as BOT Project
Construction of Road aggregating to Rs.8,44,47460 treated as BOT Project and shall be written off over a
Expenditure and proportionate amount of Rs.1,79,22,449 (P.Y. Rs. 1,72,11,050) has been written off during
period of concession Agreement up to 31.03.2021 (5112 Days) Accordingly Rs. 67,19,025 (Previous year Rs.
the year.
46,98,401) is amortized in the current year. The amortization starts from the date of start of Toll Collection i.e.
iv) The MSK Infrastructure & Toll Bridge Private Limited ('Transferor Company') had obtained the contract on Build, 02.04.2006.
Operate and Transfer (BOT) basis from Madhya Pradesh Road Development Authority for construction of
viii) Dewas Bhopal Corridor Limited, the integrated Joint Venture Company had obtained Build, Operate & Transfer
Hoshangabad–Harda–Khandwa Road Project. In Terms of the Contract the Transferor Company was entitled to
(BOT Contract) from Madhya Pradesh Road Development Authority for Construction of four lane Road Project.
collect the toll during the concession period of 5440 days (Including the period of the construction). The
Transferor Company was amalgamated with MSK Projects (India) Limited pursuant to scheme of amalgamation The Company has commenced the full operation of the projects based on the completion certificate received
as approved by the Honorable High Court of Gujarat on 2nd November, 2006 with effect from 01.01.2005. from Madhya Pradesh Road Development Corporation on that date.
The Transferor Company had completed the construction of the above project and was put open to traffic Having regards to the Accounting Policies followed by the Company, the entire expenditure incurred on
during the earlier year. Construction of Road is treated as Build, Operate & Transfer Project Expenditure and is over a period of
concession Agreement up to 19.03.2033 and proportionate amount of Rs.4,17,06,225 (Previous year
The Cost of the said project and right to collect the toll charges is transferred to and vested in the Company as
Rs.5,37,81,328) (adjusted amount of amortization) is amortized in the current year.
per the scheme of amalgamation.
33) Disclosure relating to Employees Benefits – As per revised AS-15:
Having, regard to the accounting policies followed by the Company the expenditure incurred thereon, is
treated as BOT Project Expenditure and proportionate amount of Rs. 2,40,15,529 (P.Y. 241,08,729) has been During the year Company has recognized the following amount in the financial statements.
written off during the year after considering the Cash Subsidy received/receivable from Madhya Pradesh State
a) Contribution to Defined Contribution Plan recognized as Expense for the year as under
Road Development Authority.
v) The MSK Highways Limited (“Transferor Company) had obtained the contract on Build, Operate and Transfer Particulars
(BOT Basis) from Madhya Pradesh Road Development Authority for construction of Raisen–Rahatgarh. In Employer Contribution to Provident Fund 2,02,36,472
Terms of the Contract the Transferor Company entitled to collect the toll during the concession period of 5440
days (Including the period of the construction). The Transferor Company was amalgamated with MSK Projects (41,01,926)
(India) Limited pursuant to scheme of amalgamation as approved by the Honorable High Court of Gujarat on
2nd November, 2006 with effect from 01.01.2005.

94 95
 18th Annual Report
2011-12

b) DEFINED BENEFIT PLAN Expenses recognized during the year (Under the head “Salaries & Bonus” – Refer Schedule 6)
Reconciliation of opening and closing balances of Defined Benefit obligation Gratuity Leave Encashment
(Funded) (Non Funded)
Gratuity Leave Encashment
(Funded) (Non Funded) Current Service Cost 7,35,842 24,05,206
(5,06.968) (5842,643)
Defined Benefit obligation at the beginning of the year 63,47,723 22,41,2981
(27,12,481) (6,57,521) Interest Cost 5,52,252 1,94,993
(2,27,848) (55,232)
Current Service Cost 7,35,842 24,05,206
(5,06,968) (58,42,643) Expected return on Plan Assets (8,40,643) NIL
(2,62,157) (NIL)
Interest Cost 5,52,252 1,94,993
(2,27,848) (55,232) Actuarial gain/(loss) 27,42,652 1,66,075
(31,62,472) (43,14,098)
Actuarial (gain)/loss 22,66,750 (1,66,075)
(29,00,426) -(43,14,098) Expense Recognized in Profit and Loss Account 31,90,103 50,07,572
(36,35,131) (15,83,777)
Benefits Paid 18,02,554 (NIL)
(NIL) (NIL)
Defined Benefit obligation at the year end 81,00,013 50,07,572 Actuarial Assumptions
(63,47,723) (22,41,298) Gratuity Leave Encashment
(Funded) (Non Funded)
Reconciliation of opening and closing balances of fair value of plan Assets
Discount Rate ( Per Annum) 8.70% 8.70%
Gratuity (8.28%) (8.40%)
(Funded)
Salary Escalation ( Per Annum) 6.00% 6.00%
Fair value of plan assets in the beginning of the year 1,05,08,034 (6.00%) (6.00%)
(32,76,960)
Expected return on plan assets 8,40,643
(2,62,157) 34) Transaction with related parties (as certified by the management)
Actuarial gain/(loss) (4,75,902) a. Associate Concern:
(2,62,046)
- Welspun Max Steel Limited
Employer contribution 0.00
(0.00) - Welspun Steel Limited
- Welspun India Limited
Benefits Paid 18,02,554
(NIL) - Welspun Retails Limited
- Welspun Captive Power Generation Limited
Fair Value of plan assets at the end of the year 90,70,221
(32,77,071) b. Holding / Indirect Holding Company

- Welspun Corp. Limited (Indirect holding)

Reconciliation of Fair Value of Plan Assets and Benefit Obligation
- Welspun Infratech Limited (Holding)
Gratuity Leave Encashment
(Funded) (Non Funded)

Fair Value of Assets as at 31st March, 2012 90,70,221 50,07,572

(32,77,071) (22,41,298)
Present Value of obligation as at 31st March, 2012 81,00,013 50,07,572
(63,47,723) (22,41,298)
Amount recognized in Profit & Loss Account 31,90,103 27,66,274
(36,35,131) (15,83,777)

96 97
 18th Annual Report
2011-12

c. Key Management 35) Cash Subsidy of Rs.1,26,53,79,840 (P.Y. 1,26,53,79,840) received from Madhya Pradesh Rajya Setu Nirman Nigam
Limited, and Gujrat State Road Development Corporation against the BOT. Project cost, is not reduced from the
Name Position Name of the Company relevant project cost but the same is shown as “Capital Reserve” in the Balance Sheet.
Balkrishna Goenka Director Welspun Projects Limited 36) Earning per share:
Sunil Shinde Director
As At As At
H.M. Karna Director BUL MSK Infrastructure Private Limited 31-03-2012 31-03-2011
Ramkrishna Telang
Shreechand Kukreja A. Net profit after Tax available for equity shareholders. 3,32,21,768 (31,56,71,523)
Suraj Kekreja
B. Weighted average number of Equity Shares of Rs.10/- each
H.M. Karna Director MSK Projects (Himmatnagar Bypass) Private Limited outstanding during the year (Nos. of Shares) 40000000 38729233
Ramkrishna Telang MSK Projects (KIM Mandvi Corridor) Private Limited
C. Basic & Diluted Earning Per Share (Rs.) 0.83 (8.15)
Udailal Anjana Director Dewas Bhopal Corridor Private Limited
Hukmichand jain
H.M. Karna 37) Confirmations of certain parties for amounts due from them as per accounts of the company are not obtained.
Ramkrishna Telang Amount due from customers include amounts due/with held on account of various claims. The claims will be verified
and necessary adjustments, if any, shall be made in the year of settlement. Subject to this, company is confident of
recovering the dues and accordingly they have been classified as “debt considered good” and therefore no provision is
considered necessary, there against.
Sr. Transaction with Holding Associate Key Relative of
Related Parties Company / Company Management Key 38) Under the Micro, Small and Medium Enterprise Development Act, 2006 (“MSMED Act”) which came into force
Indirect Management effective from 2nd October, 2006, certain disclosures relating to amounts due to micro, small and medium enterprises
Holding and remained unpaid after the appointed date etc. of principal and interest amounts are required to be made. The
Company Company is in the process of compiling the relevant information. As the relevant information is not yet readily
available and / or not given or confirmed by such enterprises, it is not possible to give required information in the
1 Sales / Income from operations 196951500 1122583854 - - accounts. However, in view of the management, the impact of interest, if any, which may subsequently become
(143597000) (354628000) (-) (-) payable to such enterprise in accordance with the provisions of the Act, would not be material and the same, if any,
2 Material Purchase 55831759 115510341 - - would be disclosed in the year of payment of interest.
(158224000) (75246000 ) (-) (-)
In the absence of the necessary information with the Company relating to the registration status of the suppliers under
3 Mobilization Advance Received - 12647843 - - the Micro, Small and Medium Enterprises Development Act' 2006, the information required under the said Act could
(135554000) (83027000) (-) (-) not be compiled and disclosed.
4 Mobilization Advance Repayment 8866542 65727243 - - 39) In the opinion of the Directors, Current Assets, Loans and Advances have value at which they are stated in the Balance
(100554000) (25928000) (-) (-) Sheet, if realized in the ordinary course of business. The provision for depreciation and for all known liabilities is
5 Loan given - - - - adequate and not in excess of the amount reasonably necessary.
(-) (-) (-) (-) 40) Disclosure in accordance with Accounting Standard - 7 (Revised).
6 Loan Received 438025301 -
Particulars 2011-2012 2010-2011
(573243000) (-) (-) (-)
Contract Revenue 6468363661 12244791000
7 Repayment of Loan Received 390159458
(5715000) (-) (-) (-) Contract Cost Incurred 6008009909 9750672000
8 Repayment of loan given - 902600 Recognized Profits / Losses 977577640 905509000
(-) (-) (-) (-)
Advances Received 113106291 436448000
9. Advance for purchase of commercial - - - -
Property. (-) (-) (-) (-) Retention Money 523083133 435917000
10 Remuneration to the Directors - - 13086281 - Gross Amount due from Customers For Contract Work 631768993 901149000
(-) (-) (3778000) (6911000)
11. Receivable at the end of the year 15685900 143859071 - -
(6804000) 44784000 (-) (-)
12. Payable at the end of the year 111680332 4020009 - -
(220821000) 73120000

98 99
 18th Annual Report
2011-12

In respect of the construction contracts, the Company follows the percentage of completion method for recognizing CONSOLIDATED CASH FLOW STATEMENT
profit / loss but no provision is made for contingencies in respect of contract in progress, consistent with the practice 2011-12 2010-11
of the Company. Accounting Standard (AS) 7 on "Accounting for Construction Contracts" issued by the institute of
Chartered Accountant of India requires that an appropriate allowance be made for future unforeseen factors. In the A. CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before tax & Prior Period items 37386137 (309335940)
opinion of the Company, such a provision is not required and has no financial effect.
Depreciation 81879117 96517753
41) The Company is operating in a single segment only during the year i.e. Infrastructure Development Contract. Preliminary Expenses 158905 97544
Amortisation of BOT Projects 148838414 160620239
42) Remuneration to Directors: Interest Paid 515453779 386010871
Provision for Bad Debts - 42880428
Managing Director / Director Unclaimed Liabilities written back (3024985) (4155946)
Particulars Impairment of Fixed Assets - 6738590
Joint Managing
Director / Chairman Bad Debts - 2206100
Profit on sales of assets (1628862) (1581645)
Salaries 1,30,86,281 (NIL) Dividend Received (32000) (26400)
(37,78,737) (69,13,333) Profit on sales of Investment (6388783) -
Loss on sales of Investment - 5015130
Contribution to P.F. 6.09.935 (NIL)
Provision for Leave Encashment & Gratuity 4499750 5219019
(NIL) (2710) Provision for Diminution in Value of Investments - -
Surplus & Deficit - 208833
Total 1,36,96,216 (NIL)
Operating Profit before Working Capital Changes 777141472 390414576
(37,78,737) (69,16,043)
Adjustment for :
Inventories 155871936 (228908093)
Trade & Other Receivables (714547672) (141827869)
Trade Payable & Provisions (384014899) 278743680
As per our report of even date For and on behalf of the Board of Directors (942690635) (91992282)
FOR CHANDRAKANT & SEVANTILAL & J.K. SHAH & COMPANY WELSPUN PROJECTS LIMITED
Firm registration number: 101676W
Chartered Accountants Cash Generated From Operations Before Tax, & Prior Period Item (165549163) 298422294
Less: Direct Taxes Paid (62348462) (65725697)
H. B. Shah B. K. Goenka Sunil Shinde Susheela Maheshwari
Partner Chairman Director Company Secretary
Cash Generated From Operations Before Prior Period Item - -
Membership No. 016642 Add: Prior Period (Net) (437348) 2898351
- 235594948
Place : Vadodara Place : Mumbai
Date : 28-05-2012 Date : 28-05-2012 NET CASH USED IN OPERATING ACTIVITIES (228334973) 235594948

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchases of Fixed Assets (12810600) (36528681)
Sales of Fixed Assets 4742908 13425434
Investment 1398518929 (1444535034)
Less: BOT Expenditures (122333300) (742367212)
Cash Subsidy (Net) - 89100000
Dividend Received 32000 26400
NET CASH USED IN INVESTING ACTIVITIES 1268149937 (2120879093)

C. CASH FLOW FROM FINANCING ACTIVITIES

Issue of shares on Preferential basis - 2113003224
Borrowing (381369010) 160543577
Dividend Paid (Including Tax thereon) - (46643600)
Interest Paid (515453779) (386010871)
NET CASH FROM FINANCING ACTIVITIES (896822789) 1840892330

Net Changes In Cash & Cash Equivalents (A+B+C) 142992175 (44391815)

Cash & Cash Equivalents - Opening Balance 491143056 535534871
634135231 491143056
Cash & Cash Equivalents - Closing Balance 634335231 491143056

As per our report of even date For and on behalf of the Board of Directors
FOR CHANDRAKANT & SEVANTILAL & J.K. SHAH & COMPANY WELSPUN PROJECTS LIMITED
Firm registration number: 101676W
Chartered Accountants

H. B. Shah B. K. Goenka Sunil Shinde Susheela Maheshwari

Partner Chairman Director Company Secretary
Membership No. 016642

Place : Vadodara Place : Mumbai

Date : 28-05-2012 Date : 28-05-2012

100 101
 WELSPUN Projects Ltd.
www.welspunprojects.com

Welspun House, 4th Floor, Kamala City, Senapati Bapat Marg, Lower Parel (W), Mumbai – 400 013, INDIA.