Key Developments during the year

- Merger of WIL and WGBL completed via court order dated 26 Nov 2012; becomes effective from December 7, 2012

- Home Textiles Today (HTT) has ranked Welspun No. 1 in US Home textiles in the recent annual survey released in Jan 2013, climbing up from No. 2 position last year.

- Acquired 13.03% equity stake in Welspun Retail Ltd (WRL) a subsidiary company, raising the effective shareholding in WRL to 98.03%.

- Mrs. Dipali Goenka appointed as an Executive Director of the Company with effect from April 01, 2013.

Awards

WIL has won nine awards during the year for innovation and sustainability initiatives
i. Responsibility Award for Excellence - Walmart
ii. Global CSR Excellence & Leadership - Bluedart
iii. Most Preferred Furnishing Brand - MAGPPIE
iv. Gold Supplier Award – TESCO
v. Innovation Award for Eco-Dry towels - Golden Peacock
vi. Best Product Award- Wilkinson
vii. Five Star Award – Macy’s
viii. Vendor of the Year Award - Sears / K-Mart
ix. Partners in Business Transformation award - Sears / K-Mart

Status of Projects

The vertical integration project to increase spinning and weaving capacity is on schedule and expected to be completed by end of FY14. The project entails the installation of 170,000 spindles and 140 looms which will take the backward integration to ~75%.

The estimated project cost of Rs. 7-8 bn will be 72% debt funded. The debt will receive 5-7% interest rebate from the Gujarat state government and 4-5% from the central government (under TUFS), resulting in an effective interest rate of 2-3%. Apart from ensuring quality and availability of key intermediate products such as yarn and fabric, the backward integration will also contribute to improve the profitability of WIL significantly.

Welspun has recently commissioned an 80 MW power plant, which will further reduce power costs.

Management comments

Speaking about the performance, Mr. B. K. Goenka, Chairman, Welspun India Ltd., said, “Welspun has successfully completed one full year post the business reorganisation. The benefits of closing down our unprofitable businesses and consolidating the entire textile business under one roof are clearly reflected in the profitability metrics of the company. Our focus for the coming year will be on improving profitability and the effort underway towards further vertical integration is a step in that direction.

“The awards we have received this year bear testimony to the fact that Welspun has created an enviable track record not only in quality and innovation but also in corporate social responsibility and sustainable development”.