MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis (MD&A) should be read in conjunction with the Audited Consolidated Financial Statement of Welspun Investments and Commercials Limited ("Welspun" or the "Company"), and the notes thereto for the year ended March 31, 2014. This MD&A covers Welspun's financial position and operations for the year ended March 31, 2014. Amounts are stated in Indian Rupees unless otherwise indicated._

Forward-Looking Statements

This report contains forward-looking statements, which may be identified by their use of words like 'plans', 'expects', 'will', 'anticipates', 'believes', 'intends', 'projects', 'estimates' or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the Company's strategy for growth, market position, expenditures and financial results are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events

a. Industry Structure and Developments

The global economic environment continued to be challenging during the last year. During the course of 2013-14, the global financial markets had to face an extraordinary spell of financial turbulence arising from the US Fed contemplating tapering its large scale asset purchase programme. The tapering heralded the turning of the global interest rate cycle with volatile movements for cross-border capital flows and asset prices. Global growth in CY2013 was reported at 3% levels, almost at the same level as that in CY2012.

For the Indian economy, the slowdown in growth that began in FY12, worsened in FY13 and continued into FY14. India's real GDP growth rate hit decade low levels. While the slowdown was broad-based affecting all major sectors of economic activity, construction and mining were the worst-hit. The economic growth rate continued to stay around the 5% mark during 2013-14. The turbulence in the global economy only added to the woes of the Indian economy. Like most other emerging markets, India faced capital outflows and intense exchange rate brssures on fears of the US Fed tapering. This prompted the RBI and the government to take several measures to control inflation and current account deficit.

The outlook, however, appears cautiously optimistic. Global growth, after decelerating for the last three years is poised to improve in CY2014 and CY2015, but risks related to uncertainties in timing of unwinding of unconventional monetary policies and possibility of a renewed deflation in the euro area remain. Global GDP growth in CY2014 is likely to be in vicinity of 3.7 percent, an improvement of more than 0.5 percent from CY2013 levels. The expansion in global output is expected to be led by advanced economies, especially the US. However, downside risks to growth trajectory arise from ongoing tapering of quantitative easing in the US, continuing deflation concerns and weak balance sheets in the euro area and inflationary brssures in the emerging market and developing economies. Weakening growth and financial fragilities in China that have arisen from rapid credit in recent years pose a large risk to global trade and growth.

b. Business Overview

The Company is a trading cum investment company. The major operating activity is trading of commodities. The company also holds investments in equity shares - brdominantly in Welspun Group companies which are engaged in the business of SAW Pipes & Plates, Infra, Steel, Home Textiles and Energy.

While trading activity is dependent on the economic environment, profitability from investment activity is linked to the performance of the investee Company as well as fluctuations in the quotations on the Stock Markets.

c. Outlook

There is expectation that the Indian economic growth will improve over the next few years. The pace of reforms is expected to pick up under the newly elected National Democratic Alliance (NDA) government which mainly had "Development" as its plank. Thanks to policy measures, India's current account deficit has come down drastically in recent months reducing the risk of any external shocks to the economy. With inflation showing a downward trend in recent weeks, expectations are that the RBI will pause on the rate hike cycle and probably, initiate a cycle of rate cuts in FY14-15.

The Company's focus will be on its regular trading activities and making long term strategic investments in various existing/new ventures, besides consolidating the existing investments.

d. Opportunity & Threats

An improved economic scenario will increase the trading activity in the country which will be an opportunity for the company to increase operations. However, tough competition and high inflation are the risks to this business.

The Company holds investments in equity of various companies and the performance in this segment is dependent on the dividends and stock price of the investee companies. With the new government in place at the centre, there is hope of improved growth which is also reflected in the optimism in the stock prices. This should bode well for the Company's investments. Failure of the investee companies to be profitable in that particular year, or inability of any of the investee companies to pay dividend could impact the revenue stream of the Company.

e. Internal control systems and their adequacy

The adequacy of the internal control system is reviewed by the Audit Committee of the Board of Directors. The emphasis on internal controls brvails across functions and processes, covering entire gamut of various activities. Your Company has taken proper and sufficient care for the maintenance of adequate accounting records as required by various Statutes.

Internal Auditors, the Audit Committee and Statutory Auditors have full and free access to all the information and records as considered necessary to carry out their responsibilities.

f. Cautionary Statement

The Information and opinion exbrssed in this report may contain certain forward looking statements, which the management believes are true to the best of its knowledge at the time of its brparation. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements, risks and opportunities could differ materially from those exbrssed or implied in this report. This should be read in conjunction with the Company's financial statements.

5. DISCUSSION OF FINANCIAL PERFORMANCE

a. Revenue: During FY14, the revenue from operations was Rs. 11.23 million as compared to Rs. 28.99 million in FY13. Revenue was lower y-o-y due to lower trading revenues.Interest income was also down y-o-y due to lower level of investments in interest-bearing deposits by the company.

b. Purchases of Stock in Trade: The purchase of stock in trade was Rs. 7.80 million in FY14 as compared to Rs. 16.36 million in FY13. This was in line with the decline in trading revenues.

c. Employee Benefit Expenses: The Employee Benefit Expense was at Rs. 0.61 million in FY14 as compared to Rs. 1.84 million in FY14.

d. Interest Cost: The Interest expense was insignificant in FY14 as compared to Rs. 3.36 million in FY13 due to lower interest-bearing liabilities.

e. Other Expenses: Other expenses were at Rs. 121.38 million in FY14 as compared to 1.96 million in FY 13, showing a significant rise compared to last year mainly on account of the Provision for impairment in value of investments taken during the year.

f. Profit (Loss) before Tax: The Loss before tax stands at Rs. 118.57 million in FY14

g. Networth: The Networth of the Company stands at Rs. 155 million in FY14 as compared to 273.58 million in FY13. The decline was mainly on account of the losses in FY14.