MIRA INFORM REPORT

Report Date :

05.05.2007

IDENTIFICATION DETAILS

Name :	WELSPUN GUJARAT STAHL ROHREN LIMITED
Registered Office :	Village Jolva & Vadadla, Near Dahej, Taluka – Vagra, District –Bharuch, GUJRAT – 392130
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	26.04.1995
Com. Reg. No.:	11-25609
IEC No. :	0895004801
CIN No.: [Company Identification No.]	L27100GJ1995PLC025609
TAN No.: [Tax Deduction & Collection Account No.]	BRDW00071B / RKTW00064B
PAN No.: [Permanent Account No.]	AAACW0744L
Legal Form :	It is a Public Limited Liability Company. The company's shares are listed on the stock exchanges.
Line of Business :	Manufacturing of Longitudinal Slow Pipes, Spiral Slow Pipes, HFIW Pipes, Pipe Coating and API Grade Pipes.

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 20000000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Directors are reported as experienced, respectable and resourceful industrialists. Their trade relations are fair. Financial position is satisfactory. Payment are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms & conditions.

LOCATIONS

Registered Office :	Village Jolva & Vadadla, Near Dahej, Taluka – Vagra, District –Bharuch, GUJRAT – 392130, India
Tel. No.:	91-2641-256011/281
Fax No.:	91-2641-256285
E-Mail :	sales_wgsrl@welspun.com
Website :	http://www.welspunpipes.com
Area :	3288362 sq .fts. - Owned
Corporate Office :	Trade World, ‘B’ Wing, 9^th Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai-400013, Maharashtra, India
Tel. No.:	91-22-56503000 / 5650 3333 / 2490 8000 / 66136000
Fax No.:	91-22-24908020 / 21
Factory 1 :	Village Jolva and Vadadla, Near Dahej Taluka Vagra, Bharuch District - 392130, Gujarat, India
Tel. No.:	91-2461-266011 / 256281
Fax No.:	91-2641-256285
E-Mail :	wgsrl@bom5.vsnl.net.in sales@wgsrl.com
Website :	http://www.welspunpipes.com
Areas :	3288362 sq .fts. - Owned
Factory 2 :	Village Versamedi, Taluka Anjar, District – Kutch, Gujarat, India
Tel. No.:	91-2836-279000 / 573428 / 29
Fax No.:	91-2836-279010 / 247070
Areas :	4950518 sq .fts. - Owned
Branches :	36, Bawa Potteries Complex, Aruna Asaf Ali Marg, Vasant Kunj, New Delhi - 110 070, India
Tel. No.:	91-11-2602 2051 / 2612 2054
Fax No.:	91-11- 2612 2064

DIRECTORS

Name :	Mr. Gopiram R. Goenka
Designation :	Chairman
Address :	Gayatri Villa, Sultanpur Mandi Road, Near Mehrauli, New Delhi – 110030
Name :	Mr. Balkrishan Goenka
Designation :	Vice Chairman and Managing Director
Address :	6, Chancellore Court, A/88, Carmicheal Road, Mumbai – 400026
Qualification :	B. Com
Name :	Mr. Rajesh R. Mandawewala
Designation :	Director
Address :	171, B Wing, 17^th Floor, Tanna Redisency, Bay view, 392, V. S. Marg, Prabhadevi, Mumbai – 400026
Qualification :	B. Com , A.C.A
Name :	Mr. Murarilal Mittal
Designation :	Director (Finance)
Address :	1601, Marathon Heights, P. B. Marg, Jia BharaT Oil Mills Compound, Lower Parel, Mumbai – 400013
Qualification :	A.C.A
Name :	Braja K. Mishra
Designation :	Chief Executive Officer S Board Member
Address :	C-2-5, Loyds Garden, Appa Saheb Marathe Marg, Prabhadevi, Mumbai – 400020
Qualification :	B. Com and MBA
Name :	Mr. Raj Kumar Jain
Designation :	Director
Address :	A/ 42, Manali, Evershine Nagar, Malad (West), Mumbai – 4000064
Qualification :	A. C. A.
Name :	Mr. K. H. Viswanathan
Designation :	Director
Address :	Plat No. 4, Kalyani Uttam Society, Antony Road, Chembur, Mumbai - 400071
Qualification :	ICWA
Name :	Mr. Sanjeev Ghai
Designation :	Nominee Director of IFCI Limited
Name :	Mr. Ram Gopal Sharma
Designation :	Director
Address :	707, Look Shrtia, Military Road, Off. Marol Maroshi Road, Andheri (East). Mumbai – 400059
Qualification :	B. Com, Master in Ecomomics
Name :	Mr. Nirmal Gangwal
Designation :	Director
Name :	Mr. N.Shankar
Designation :	Nominee of Export Import Bank of India

KEY EXECUTIVES

Name :	Mr. Ramesh H. Ved
Designation :	Company Secretary

BUSINESS DETAILS

Line of Business :

Manufacturing of Longitudinal Slow Pipes, Spiral Slow Pipes, HFIW Pipes, Pipe Coating and API Grade Pipes.

Products :

Item Code No.	73.05
Product Description	Steel Pipes and Tubes

Exports :

Countries :

USA and Indonesia

Imports :

Countries :

Austria and Germany

Terms :

Selling :

L/C

Purchasing :

L/C and Credit (Local 60-Import 180 days)

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Coating of pipes	000 SQMS	14500	1890
Welded pipes	MT	930000	377271
M. S. Plates	MT	12000	78
M. S. Pipe	MT	NA	4

GENERAL INFORMATION

No. of Employees :

1720

Bankers :

Ø Bank of Baroda

Ø Punjab National Bank

Ø Canara Bank

Ø Oriental Bank of Commerce

Ø Syndicate Bank

Ø Bank of India

Ø State Bank of India

Ø Andhra Bank

Ø State Bank of Bikaner & Jaipur

Ø ICICI Bank Limited

Ø State Bank of Tranvancore

Ø Industrial Development Bank of India

Facilities :

SECURED LOANS	Rs. in millions
Term Loan
From Financial Institution
In Foreign Currency	350.460
In Rupee	26.670
From Banks
In Foreign Currency	180.670
In Rupee	1693.850
Interest Accrued And Due	0.050
EXTERNAL COMMERCIAL BORROWINGS	701.710
Working Capital From Banks
In Foreign Currency	651.740
In Rupee	328.120
Total	3933.270
UNSECURED LOANS
Foreign Currency Convertible Bonds	3987.240
Deferred Sales Tax Loan	106.450
Total	4093.690

Banking Relations :	Satisfactory
Auditors :
Name :	MGB & Company Chartered Accountants Mumbai
Associates/Subsidiaries :	Welspun India Limited, Survey No. 1076, Village and P. O. Vapi District Valsad Mumbai Tarry Towel Manufacture Welspun Syntex Limited Survey No. 094 Village Saily Manufacturer of specialty polyester filament yarn Welspun Gujarat Stahl Rohren Limited Welspun Zucchi Textiles Limited Welspun Power & Steel

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
234,000,000	Equity Shares	Rs. 5/-each	Rs. 1170.000 millions
98,000,000	8% cumulative preference shares	Rs. 10/-each	Rs. 980.000 millions
	Total		Rs. 2150.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
128,843,727	Equity Shares	Rs. 5/-each	Rs. 644.220 millions
22,105,000	8% Cumulative Preference Shares	Rs. 10/- each	Rs. 221.050 millions
	Total		Rs. 865.270 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		865.270	756.400	1413.560
2] Share Application Money		68.450	0.000	0.000
3] Reserves & Surplus		4082.570	2172.090	743.760
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		5016.290	2928.490	2157.320
LOAN FUNDS
1] Secured Loans		3933.270	2040.410	1595.630
2] Unsecured Loans		4093.690	1806.330	56.500
TOTAL BORROWING		8026.960	3846.740	1652.130
DEFERRED TAX LIABILITIES		700.920	538.530	376.380
TOTAL		13744.170	7313.760	4185.830
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		6490.310	3974.850	2661.230
Capital work-in-progress		3622.510	1376.480	112.830
INVESTMENT		0.010	52.890	84.100
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Interest Accrued on Investments	0.000	0.180	0.180
	Inventories	5428.850	3756.770	909.880
	Sundry Debtors	3069.760	2623.300	1115.770
	Cash & Bank Balances	3066.550	2460.990	607.500
	Loans & Advances	1458.930	852.850	368.560
Total Current Assets		13024.090	9694.090	3001.890
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	9031.030	7649.780	1615.050
	Provisions	361.720	134.770	59.170
Total Current Liabilities		9392.750	7784.550	1674.220
Net Current Assets		3631.340	1909.540	1327.670
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		13744.170	7313.760	4185.830

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		18297.66	10384.88	8475.04
Other Income		19.11	262.08
Total Income		18316.77	10646.96	8475.04
Profit/(Loss) Before Tax		903.540	501.300	1121.540
Provision for Taxation		289.820	163.000	401.770
Profit/(Loss) After Tax		613.720	338.300	719.770
Earnings in Foreign Currency :
	Export Earnings	9981.330	6181.730
	Income form Subletting of Vessel	476.260	649.530	3563.330
	Interest Income	27.270	0.310
Total Earnings		10484.860	6831.570	3563.330
Imports :
	Raw Materials	9665.260	6692.350
	Stores & Spares	119.180	62.330	4966.030
	Capital Goods	1130.120	1001.350
Total Imports		10914.560	7756.030	4966.030
Expenditures :
	Cost of Goods Sold	13573.640	8073.410
	Manufacturing and other Expenses	3068.840	1627.900	7301.540
	Financial Expenses	418.850	203.390
	Depreciation	351.900	240.960
Total Expenditure		17413.230	10145.660	7301.540

QUARTERLY RESULTS

PARTICULARS	30.06.2006	30.09.2006	31.12.2006
Type	1st Qtr	2nd Qtr	3rd Qtr
Sales Turnover	5360.000	6744.000	7400.000
Other Income	3.000	5.000	5.000
Total Income	5363.000	6749.000	7405.000
Total Expenditure	4686.000	5949.000	6447.000
Operating Profit	677.000	800.000	958.000
Interest	162.000	176.000	192.000
Gross Profit	515.000	624.000	766.000
Depreciation	116.000	116.000	122.000
Tax	136.000	173.000	232.000
Reported PAT	263.000	335.000	412.000

Notes

200606 Quarter 1 –

Expenditure Includes (Increase)/Decrease in Stock in Trade Rs (684.00) million Consumption of Raw Materials Rs 4592.00 million Staff Cost Rs 143.00 million Other Expenditure Rs 635.00 million Tax Indicates Provision for Current, Deferred Tax and Fringe Benefit Tax EPS is Basic Status of Investor Complaints for the quarter ended June 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 18 Complaints disposed off during the quarter 18 Complaints unresolved at the end of the quarter Nil 1. Previous year's figures have been regrouped & reclassified wherever considered necessary. 2. Segmental Reporting as required under Accounting Standard 17 is not applicable. 3. The above results were reviewed by the Audit Committee and taken on record by the Board of Directors in its meeting held on July 31, 2006. 4. The Statutory Auditors have carried out a Limited Review of the above results for the quarter ended June 30, 2006.

200609 Quarter 2 –

Expenditure Includes (Increase)/Decrease in Stock in Trade Rs 370.00 million Consumption of Raw Materials Rs 4569.00 million Staff Cost Rs 149.00 million Other Expenditure Rs 861.00 million Tax Indicates Provision for Current, Deferred Tax and Fringe Benefit Tax EPS is Basic Status of Investor Complaints for the quarter ended September 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 10 Complaints disposed off during the quarter 10 Complaints unresolved at the end of the quarter Nil 1. Previous year's figures have been regrouped & reclassified wherever considered necessary. 2. Segmental Reporting as required under Accounting Standard 17 is not applicable as the Company operates only in one segment. 3. The Company has entered into a Memorandum of Understanding with Volzhsky Pipe Plant (VTZ), (a member of TMK group), Russian for formation of Joint Venture in which the Company would be holding 40% stake. 4. The Company's projects at Anjar the progressing as per schedule. The Board of Directors have approved an increase in the Plate Mill capacity from 1 million MT p.a to 1.5 million MT p.a, revision in the cost of project is being appraised by a Financial Institution. 5. The above results were reviewed by the Audit Committee and taken on record by the Board of Directors in its meeting held on October 18, 2006. 6. The Statutory Auditors have carried out a Limited Review of the above results for the quarter and Half year ended September 30, 2006.

200612 Quarter 3 –

Status of Investor Complaints for the quarter ended December 31, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 31 Complaints disposed off during the quarter 31 Complaints unresolved at the end of the quarter Nil 1. Welspun Pipes inc USA(WPI) 100% subsidiary for company in USA has entered into Joint Venture agreement with Lonestar Technologies Inc USA in which WPI would be holding 60% stake. The JV company will set up a Mill for manufacture of Spiral Weld Tubular Products in North Americal 2. The Company has alloted 651212 Equity Shares of Rs.5 each on 31.12.2006 on conversion of Foreign Currency Convertible Bonds (FCCB) of aggregate amount of Rs.46.51 Millions 3. Previous year's figures have been regrouped & reclassified wherever considered necessary. 4. Segmental Reporting as required under Accounting Standard 17 is not applicable as the Company operates only in one segment. 5. The above results were reviewed & recommended by the Audit Committee and taken on record by the Board of Directors in its meeting held on January 29, 2007, in terms of Clause 41 of the Listing Agreement.

KEY RATIOS

Year	31.03.2006	31.03.2005	31.03.2004
Debt-Equity Ratio	1.51	1.08	1.23
Long Term Debt-Equity Ratio	1.30	0.85	0.90
Current Ratio	1.13	1.10	1.21
TURNOVER RATIOS
Fixed Assets	2.89	2.50	2.68
Inventory	4.07	4.48	13.03
Debtors	6.57	5.59	10.09
Interest Cover Ratio	2.70	2.59	4.74
Operating Profit Margin(%)	9.55	10.12	18.04
Profit Before Interest And Tax Margin(%)	7.67	7.81	15.98
Cash Profit Margin(%)	5.16	5.54	10.15
Adjusted Net Profit Margin(%)	3.28	3.23	8.09
Return On Capital Employed(%)	14.52	15.47	35.79
Return On Net Worth(%)	15.96	13.67	40.20

STOCK PRICES

Face Value	Rs.10.00/-
High	Rs.140.85/-
Low	Rs.136.10/-

LOCAL AGENCY FURTHER INFORMATION

FIXED ASSETS

Ø Land

Ø Building

Ø Plant and Machinery

Ø Office and Other Equipments

Ø Vehicle

Ø Furniture And Fixtures

PERFORMANCE: 

During the year under report, the Company produced 377,275 MT of pipes as compared to 241,832 MT in the previous year and 78 MT of steel plates from its new manufacturing facilities at Anjar and registered growth of 72% in the total income from operations and 81% in profit after tax, over previous financial year. 

During the year under report, the Company registered remarkable growth in the international market. The export turnover increased by 50% to Rs.10573.43 Millions from Rs.7051.11 Millions in the previous year. The key export orders executed by the Company during the year under report includes supplies for Independence Trail Pipe Line Project in USA, South Suateria-West Java Gas Pipeline Project Phase II & South Suateria-West Java Gas Pipeline-Offshore in Indonesia, Gazoduc 42' Sougueur-Hadjret Ennouss Pipeline Project in Algeria, Russia, Ras Laffan-Mesaieed Ethane Transmission project In Qatar. 

PROSPECTS: 

Both the plants at Bharuch and Anjar have sufficient domestic as well as export orders for execution. Some of the major orders, which the Company is currently executing, are from Indonesia, USA and Russia valued at Rs.10,544 Millions. 

The Company is setting-up 1 Millions tonnes Plate-Cum-Coil Mill to meet its captive requirement of high-grade plates for the Spiral and LSAW pipe. It would obviate the need to import plates and would also be instrumental in achieving significant growth in profit margin. 

The Plate mill is expected to be fully operational by December 2007. 

MANAGEMENT DISCUSSION AND ANALYSIS 

A bird's eye view - Industry Scenario: 

Submerged Arc Welded (SAW) pipes have been recognized as one of the most efficient means of transporting Oil & Gas, water and petro-products. The estimated global demand of the pipes is expected to be over 50000 kilometers over the next five years. 

Globally, the transportation of petroleum products by pipelines is usually preferred to other modes of transportation due to operational economies, coupled with benefits of a cleaner distribution chain. Pipelines are generally the most cost-effective way of transporting petroleum products (crude, petrol and diesel) and natural gas. It costs approximately Rs.1.30/km to move every tonne of oil product by pipeline, while rails cost Rs. 2.20/km, and road Rs.3.02/km. Similarly, the cost of intercontinental transportation of oil via tanker is approximately Rs.2 per litre/km, vis-a-vis approximately Rs.0.40 per liter/km via pipelines. 

Therefore pipelines are effectively the most viable business proposition in the transportation of Oil, Gas, Water and petroleum products. 

The Ministry of Petroleum & Natural Gas (MOP&NG) India, estimates that in developed countries around 60% of total petroleum products is transported through pipelines while in India, this percentage is presently around 32%. The Ministry estimates that the share of pipelines in product transportation might touch around 45% in India over the next 2-3 years.  

The demand of pipes may be classified into the following major segments: 

1. ENERGY SECTOR: 

Growing energy demands of developed and developing countries have largely dictated the health of the oil & gas pipe industry. Transnational lines that traverse thousands of kilometers, like the North European Gas Line from a remote corner of Russia to stable markets like Germany/France, Myanmar-India, Iran-India notwithstanding political compulsions have generated demand for premium quality large diameter pipes like never before.  

Hectic drilling activity in offshore fields perhaps due to the fact that the crude is around $7/per barrel and still going up, has resulted in huge casings/tubings and other pipe requirements. The offshore lines linking these fields/marginal fields to main hubs have resulted in huge demand of such pipes. 

2. OIL & GAS: 

DOMESTIC MARKET: 

Increase in Oil & Gas exploratory activities: 

As the world witnesses record high prices for oil, there is mounting pressure on all major oil producing and consuming nations to secure long-term supply contracts. The Indian Oil & Gas industry are preparing themselves to secure sustainable energy sources for long-term and medium term. Keeping this in mind the Government of India has announced the National Exploration Licensing Policy (NELP) for stimulating exploration activities both in offshore shelf's and within the country. More oil discoveries in the country and worldwide will require oil products to be disbursed quickly and efficiently thereby increasing the demand for the steel pipes. 

Recently Oil & Gas pipelines have been awarded the infrastructure status and with this recognition we estimate a huge jump in the Oil and Gas pipeline requirements .It is estimated that the expected demand from the oil and gas sector in India would be about 25,000 km of pipelines over the next 10 yrs and the global demand for SAW pipes is expected to grow to 100,000-120,000 Kms with a annual domestic demand is expected to grow to 2500-3000 Kms for the same period over the next 5-7 years. Even if 50 per cent of the projects fructify in the given timeframe, the domestic pipe companies will witness a quantum jump in business opportunity. Domestic manufacturers are expected to capture almost 100% of these domestic opportunities, as imports of such pipes may not be cost effective due to current import tariff and logistics. 

A look at the statistics below would show that as on date transportation of  oil and natural gas through dedicated pipelines currently constitute only approximately 32% of the total oils and natural gas transportation in India, significantly lower than the penetration in many developed countries. 

India produces about 90 million standard cubic meters of natural gas per day as against its daily demand of 120 million standard cubic meters that is likely to go further in the coming years. The projected demand of natural gas in India by 2020 stands at a staggering 400 million standard cubic meters a day. Though some of this demand will be met domestically, a large gap would remain. 

Based on plans announced by major Oil & Gas majors and in line with the Petroleum Ministry's Hydrocarbon Vision statement 2025, the domestic demand for SAW pipes is expected to grow exponentially in the next 5-10 Years. A look at the figures below would substantiate the same: 

India currently has about 15,000 km of pipelines transporting crude oil, refined products and gas in the country. Domestic investment in the pipeline infrastructure has been quite low, particularly in gas pipelines, due to lack of gas supply. However, due to recent gas finds such as the Reliance and Gujarat State Petroleum Corporation Limited, (GSPCL) gas finds in the Krishna Godavari Basin, India will require increased investments in pipelines as gas will need to be transported to areas of consumption.  

Increased availability of natural gas in northern and western India should spur improved infrastructure for gas transportation. In view of these developments, players such as Gas Authority of India Limited (GAIL), GSPCL, ONGC, Cairn and Reliance have proposed investing in an additional 20,300 km in pipeline infrastructure over the next five years. 

The National Gas Grid:  

India's gas consumption to grow at an annual rate of 5.1% between 2002 to 2025, to 2.6 trillion cubic feet in 2025. This has prompted the formation of what is now known as the National Gas Grid. The National Gas Grid comprising 13 sections would span 6,463 km - which translates into an opportunity of around Rs.40-58 bn for Indian pipe manufacturers.  

It is estimated that the remaining unordered 11 sections of the National Gas Grid represents a potential opportunity of Rs.36-54 bn. The total opportunity represented by the National Gas Grid and other projects amounts to Rs.94.5 bn (US $2.1 bn) over the next five years. 

INTERNATIONAL MARKETS: 

The prime demand for pipes internationally accrues from Middle East, U.S. Europe, and now Africa. In effect most of the continents are getting linked through these huge transnational pipelines like the Trans Saharan in Africa, the Connector lines in America, the North European Gas Pipeline (NEGP) line in Eurasia and so on. 

On the other hand, increasing demand of petroproducts has spurred setting up of additional refining capacities and be it Sudan, Russia, Malaysia. Due to demand in all these areas, there has been a concomitant increase in the demand for pipelines which are by the far the most economically viable means of transporting all of the above. 

Profile: About Us

Since its inception in 1985 with a small Textile unit, Welspun group has grown rapidly to become a market leader in every segment that it operates viz. Terry towels, Yarns and SAW pipes. Today, Welspun has an expected turnover of Rs. 45,000 Million for the current year (of which more than Rs.35,000 Million is expected from exports), 16,000 + employees, presence in 50 countries and over 50,000 shareholders. The market capitalization of the group stands at approx Rs.25,000 million.

Welspun Gujarat Stahl Rohren Limited

WGSRL - A manufacturing hub for state-of-the-art pipe and related niche products . Incepted in 1995, it is the preferred choice for the Energy Transportation Sector - Be it Oil, Gas, Crude or Water. WGSRL is a dynamic setup where quality, integrity and values form the core strength for success.

Incorporated in 1995, Welspun Gujarat Stahl Rohren Limited (“Welspun” or “the Company”) part of $ 1bn Welspun Group

Caters to the global requirement of Welded Tubes and Pipes. The company has the widest range starting from 1/2 inch to 100 inch of outer diameter.

Manufactures high grade line pipes-Submerged Arc Welded (both spiral and longitudinal), branch pipes (Electric Resistant Welded Pipes-ERW) and coating.

Manufacturing facilities are located in Gujarat (Western India), in proximity to the National Highway and Seaports.

Incorporates the very best technology across the globe with Capello Tubi Italy and SMS Meer Germany (Mannesmann Demag) and EUPEC, Germany.

Accredited with ISO 9001, ISO 14001 and OHSAS 18001 certifications.

Strong order book from Middle East , U.S. , Indonesia and other countries

Approved by more than 40 Oil & Gas majors across the globe.

Recipient of top Exporters Award for 2001-02 & 2002-03 from the Engineering Exports Promotion Council, India.

Construction world awardee for 2004 & 2005 as fastest growing steel company.

Supplied pipes for World's Deepest Gas Pipeline in Gulf of Mexico , US.

First from India :

to supply large diameter Line-pipes for off-shore application to USA

to supply 56” X-70 Line-pipes to Iran

to produce the highest recognized Line-pipe grade i.e. X-80

to complete execution of 42” coated pipes to GAIL

Highest production recorded for a day for LSAW plant– 1,750 MT

Salient Features

Successful foray into large diameter pipes and niche products – supplied the largest and heaviest 56”dia meter pipes for gas applications

First company in the country to supply large diameter line pipes for offshore applications in the US.

Produced the highest recognized X-80 grade pipes.

With the aid of advanced research, equipped to supply pipes to Russia with temperature conditions below - 60 degrees.

In-house NACE accredited lab for the critical sour service application.

Major approvals from global oil and gas majors.

Successful completion of the world's deepest gas pipeline in the Gulf of Mexico, USA.

Clientele

One of the very few approved sources of supply in the Global market. Its high quality products have managed to attract quality conscious global buyers such as BG, Exxon Mobil, Shell, Saudi Aramco, Gazprom, and Total among others. On the domestic front, Welspun is a key supplier to India 's largest fuel companies such as GAIL, IOCL, ONGC and BPC.

Achievements

First In India...

To supply large diameter Line-pipes for offshore application to USA.

To supply 56” X-70 Line pipes to Iran.

To produce the highest recognized Line pipe grade i.e. X-80.

To complete execution of 42” coated pipes to GAIL.

Highest production recorded in a day for LSAW plant - 1,750 MT.

Highest number of LSAW pipes produced in a month - 8,033.

List of Approvals

Accreditions

HSE approvals as per ISO standards.

ISO-14001 & OHSAS-18001 (HSE) certification from LRQA Mumbai, India.

API 5L, 5CT

All IS Standards

Approvals from Oil and Gas Majors in 2004-05 are TOTAL, France, Saudi Aramco, Chevron, US Clough Engg, Australia, PGN, Indonesia, MITCO, Malaysia among others.

Rewards & Recognitions

Recognized as one of the fastest growing Steel Company by Construction World-NICMAR (2004).

Proud recipient of top exporter's award from EEPC (Engineering Export Promotion Council) for 2002 & 2003.

Approvals from Oil and Gas Majors in 2004-05 are TOTAL, France, Saudi Aramco, Chevron, US Clough Engg, Australia, PGN, Indonesia, MITCO, Malaysia among others.

Welspun Group :

In just a little more than a decade since its inception in 1985 with a small Textile unit, Welspun group has grown rapidly to become a market leader in every segment that it operates viz. Terry towels, Yarns and SAW pipes. Today, Welspun has an expected turnover of Rs. 45,000 Million for the current year (of which more than Rs.35,000 Million is expected from exports), assets worth approximately Rs. 43,000 Million, 16,000 + employees, presence in 50 countries and over 50,000 shareholders.

The market capitalization of the group stands at approx Rs.25,000 million.

The group is expected to cross an annual turnover of RS.100000 Millions by 2008 with its forays in expansion of Rs 10000 Millions in Textiles, Rs. 12000 Millions in Plate Mill and its ambitious plans to set up a larger Power Plant and Steel Plant..

The group is managed professionally by a team of experts drawn from Multi-National Corporations and National Corporations of repute and is a system – based organization working like a Multi-National, without losing the intuitive age of Indian entrepreneurism.

The group offers tremendous learning opportunities, challenging tasks and ample opportunities to demonstrate performance and creativity.

Welspun is a performance–driven organization, which has grown more than 500% in the last 10 years.

Welspun Group's interests :

Company	Areas of business	FY-'06 revenues (Rs. Million)
Welspun India Limited	Home Textiles - Terry Towels, Bed Sheets	6,537
Welspun Gujarat Stahl Rohren Limited	LSAW, Spiral and HFIW pipe manufacturing & coatings	18,298
Welspun Syntex Limited	Specialty Polyester Filament Yarn, Texturised & Dyed Yarns	2,671
Welspun Zucchi Textiles Limited	Joint venture with Zucchi, Italy to manufacture Bathrobes	236
Welspun Power & Steel	Imports/ TNY Bars	1,347

Profile: Mission

They endeavor to reach the leadership position in each Segment / Sector of their Product / Service.

They are committed to satisfy their customers by providing such Quality Product / Service, which gives highest value for money.

They believe that employees are their most important asset through which they can reach the top in each category of their Product / Service. Therefore, they will emphasize on their continuous improvement through upgradation of relevant knowledge and training.

They commit their selves to continuous growth, so as to fulfill the aspirations of their Customers, Employees and Shareholders.

Core Values

They endeavor to reach the leadership position in each Segment / Sector of their Product / Service.

They are committed to satisfy their customers by providing such Quality Product / Service, which gives highest value for money.

They believe that employees are their most important asset through which they can reach the top in each category of their Product / Service. Therefore, they will emphasize on their continuous improvement through upgradation of relevant knowledge and training.

They commit their selves to continuous growth, so as to fulfill the aspirations of their Customers, Employees and Shareholders.

Products

WGSRL strongly believes that a wide range in the manufacturing of pipe sector is the parameter to prove its capabilities and today, the company is proud of its range. There are only a handful of players who can compete with the range of pipes (starting with diameter as small as 1 inch and as large as 100 inch), maintain the quality and technology that WGSRL produce.

Proposed Joint Venture in Russia

February 26, 2007: In reference to the MOU signed for a Joint Venture in Russia, the parties could not reach mutually agreeable terms and conditions, hence, the proposed Joint Venture has been called off. Welspun has not made any investments in Russia up till now and will therefore not carry any liabilities on the aforesaid venture.

About Welspun

The $1bn. Welspun Group is one of the largest Home Textile Companies in the world. Welspun India Limited which is a part of the Welspun Group started its activities in 1985 and since then has become the largest exporter of Home Textiles in Asia and the 4th largest in the world. Welspun’s plants are located in Vapi and at Anjar - Gujarat and have a capacity of 31000 MTPA. The Retail face of the company under the brand name ‘Spaces’ was initiated in September 2003, offering holistic home textile solutions. The initiative has since been hived off into a separate entity, Welspun Retail Limited (WRL).

Contact

Mohan K.M

Tel.91-22-6613 5895

Fax 91-22-24908020/21

E-mail : HYPERLINK "HYPERLINK

"mailto:mohan_manikkan@welspun.com

"mailto:mohan_manikkan@welspun.com

" mohan_manikkan@welspun.com

Nayana Borthakur

Tel.91-22-6613 5724

Fax 91-22-24908020/21

E-mail : HYPERLINK "HYPERLINK

"mailto:nayana_borthakur@welspun.com

"mailto:nayana_borthakur@welspun.com

" nayana_borthakur@welspun.com

DISCLAIMER CLAUSE:

The information in this press release has been included in good faith and is for general purposes only. It should not be relied upon for any specific purpose and no representation or warranty is given as regards its accuracy or completeness.

No information in this press release shall constitute an invitation to invest in Welspun India Limited or any of its affiliates. Neither Welspun India Limited, nor their affiliates' officers, employees or agents shall be liable for any loss, damage or expense arising out of any action taken on the basis of this press release, including, without limitation, any loss of profit, indirect, incidental or consequential loss.

The company is in trade terms with :

NIGC

PGN

Volstalpone

Sabgitcs

L & T Mr. M. Ram Kumar (Head)

Mount Poonamallee Road, Manapakkam, PB No. 979, Chennai – 600089

Tel No. : 91-44-22492747 / 5656

Gammon India Limited- Mr. P. M. Jakkal (President )

Veer Savakar Marg, Prabhadevi, Mumbai – 400025

Tel No. 91-22-24306761/1084

Punj Llyod Limited – Mr. Atul Kumar (General Manager )

17-18, Nehru Place, New Delhi – 110018

Tel No. : - 91-11-26200123

Gujarat State Petronet Limited

Mr. Sengupta – St. Mgr.

GSPC Bhavan, 5^th Floor, Sector – 11, Gandhinagar – 382011

Tel : 91-79-55701503

Gujarat Gas Company Limited

Mr. Nishith Dave – VP

Near Parimal Garden, Ellisbridge, Ahemadabad – 380006

Tel : 91-79-6462980

Subject exports steel pipes and imports steel.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.41.00
UK Pound	1	Rs.81.80
Euro	1	Rs.55.58

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		45

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions