MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis (MDA) should be read in conjunction with the Audited Consolidated Financial Statements of Welspun India Ltd ('Welspun' or 'WIL' or the 'Company'), and the notes thereto for the year ended 31st March, 2016. This MDA covers Welspun's financial position and operational performance for the year ended 31st March, 2016. Currency for this MDA is Indian Rupees unless otherwise indicated. The numbers for the year ending 31st March, 2016 as well as for the brvious year are on a consolidated basis and regrouped and reclassified wherever necessary.

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, product development, 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.

WELSPUN INDIA LTD - BUSINESS OVERVIEW

Welspun India Limited ('Welspun' or 'WIL' or the 'Company') is the global leader in home textiles; and was ranked as No.1 supplier to the US for 2015 by Home & Textiles Today magazine. This is the fourth year in a row that the Company has achieved this distinction. With its global reach, delivering to over 50 countries and 18 of the top 30 global retailers, WIL has emerged as the brferred choice for its clientele in the home textiles space globally. Today, the Company has a 20% market share in the US in towels; and 11% in bed linen.

With world-class manufacturing facilities in Gujarat, India, the Company offers a wide-range of home textile products in Bath, Bedding and Flooring solutions to a wide consumer cross-section globally. Welspun had highest global exports from India in the financial year ended 31st March 2016 in towels, bed linen and overall home textiles categories. It is India's first textile company to receive the Egyptian Cotton Trademark Certification. About 95% of its revenue is derived from exports to various countries across the world; with the Company having strong brsence in key markets, such as USA, Canada, UK, and continental Europe.

The Company owns brands (such as Christy, Spaces and Welhome) which constitute around 13% of its sales. It has a strong and consistent emphasis on innovation. This is evident in the number of patents (26 global patents, including pending patents) and trademarks, which it holds/ awaits approval. Around 34% of WIL's total revenues come from innovative products developed by the company.

GLOBAL ECONOMIC OVEVIEW

In 2015, economic activity across geographies remained largely subdued. Global growth again betrayed expectations in 2015, declining from 3.4% in 2014 to 3.1%. Growth in emerging markets and developing economies—while still accounting for over 70% of global growth— faced significant headwinds. Growth in these markets declined for the fifth consecutive year, while a modest recovery continued in advanced economies. Weak demand and soft commodity prices triggered fears of deflation in some key advanced economies, prompting renewed divergence in monetary policy stances.

With fragile domestic economic fundamentals, emerging economies remained vulnerable to market swings and capital outflows. Three key transitions continued to influence the global outlook during the year: (1) the gradual slowdown and rebalancing of economic activity in China, away from investment and manufacturing towards consumption and services; (2) lower prices for energy and other commodities; and (3) a gradual tightening in monetary policy in the United States in the context of a resilient U.S. recovery; as several other major advanced economy central banks continued to ease monetary policy.

Oil prices have declined considerably in CY2015, reflecting expectations of sustained escalation in production by the Organization of the Petroleum Exporting Countries (OPEC) members, amid continued global oil production in excess of oil consumption. Monetary easing in the Euro area and Japan is proceeding broadly as brviously envisaged, while in December 2015 the U.S. Federal Reserve lifted the federal funds rate from the zero lower bound.

Overall, financial conditions within advanced economies remained very accommodative. Prospects of a gradual increase in policy interest rates in the United States as well as bouts of financial volatility amid concerns about emerging market growth prospects have contributed to tighter external financial conditions. The result is declining capital flows, and further currency debrciations in many emerging market economies.

The collapse of international commodity prices, especially of crude oil, seems to have reallocated demand across the economies. Manufacturing activity and trade remain weak globally, reflecting not only developments in China, but also subdued global demand and stagnant investments across economies. Additionally, the dramatic decline in imports in multiple emerging markets and developing countries in economic distress also weighed heavily on global trade.

Going forward, global growth is projected to edge up, but at a slower pace. It is expected to reach 3.2 percent in 2016 and 3.5 percent in 2017. Growth in advanced economies is projected to remain flat in 2016 at 1.9 percent, and marginally improve in 2017 to 2.0 percent. Overall activity remains resilient in the United States, supported by still-easy financial conditions and strengthening housing and labour markets, but with dollar strength weighing on manufacturing activity and lower oil prices curtailing investment in oil & gas sector. Risks to the global outlook remain tilted to the downside and relate to on-going adjustments in the global economy: a generalized slowdown in emerging market economies, China's rebalancing, lower commodity prices, and the gradual exit from extraordinarily accommodative monetary conditions in the United States.  Source: RBI, IMF, WTO

Indian Economy

Indian economy has continued to consolidate the gains achieved in restoring macroeconomic stability. Inflation, fiscal deficit, and current account deficit have declined, rendering India a relative haven of macro stability in these turbulent times. Economic growth appears to be recovering, albeit at varying speeds across sectors. The Indian economy expanded 7.3% in FY 15-16, marginally higher than 6.9% recorded in the brvious year. This demonstrates a soft recovery; and is expected to grow 7.6-8.0% in 2016-17. In this context, it is pertinent to mention that over the years, India has  become increasingly entwined with the world. The result is that if global growth lurches into more crises, India's growth may be seriously affected for the correlation between global and Indian growth is growing significantly.

India's long-run potential GDP growth is substantial, about 8-10 percent; but its actual growth in FY16-17 will depend upon a range of domestic and global factors. First, slow investment recovery amid balance sheet adjustments of corporates is likely to hinder investment demand. Second, with capacity utilisation in the organised industrial sector estimated at 72.5%, revival of private investment is expected to be hesitant. Thirdly, global output and trade growth remain tepid, dragging down net exports. On the positive side, the government's 'start-up' initiative, strong commitment to fiscal targets, and the thrust on bolstering infrastructure could brighten the investment climate.

Household consumption demand is expected to benefit from the Pay Commission award, continued low commodity prices, past interest rate cuts, and measures announced in the Union Budget 2016-17 to transform the rural sector. Consumer confidence remains upbeat, while the corporate sector's expectations of business conditions remain positive.  Source: World Bank, IMF, RBI

FOREIGN EXCHANGE

India's currency has faced considerable volatility for most part of the year vis-a-vis the US dollar. The rupee opened the financial year at 62.18 vis-a-vis the US Dollar in April 2015. It gradually debrciated to 64.15 levels in May 2015. It apbrciated to around 63.9 in July 2015; again debrciated to 66.6 in Aug 2015. The apbrciation between Oct and Nov was short-lived and the currency debrciated to 68.5 levels by February. However, in March, the rupee gained some ground closing the year at 66.14 levels.

GLOBAL TEXTILE INDUSTRY AND TRADE

According to the WTO, the global Textile and Clothing trade has touched US$ 797 billion in CY2014. This indicates a CAGR of nearly 10% from the 2009 levels at the peak of the economic crisis. Of the total trade, clothing or apparel trade constituted US$ 483 billion in 2014, while the remaining was on account of textile trade (US$ 314 billion).

Leading countries (the U.S, EU and Japan) focus solely on highest-value stages of textile and apparel value chain, which are designing, marketing and distribution. Meanwhile, manufacturing activities are concentrated in China, India and other developing countries (Bangladesh, Vietnam, Pakistan, Indonesia, among others). The connection between manufacturers and the end-users created by traders from Hong Kong, South Korea and Taiwan is a unique trait of global textile and apparel sector.

INDIAN TEXTILE INDUSTRY

India's textile industry (worth around US$ 108 billion) contributes 4% to India's GDP and constitutes 13% of the country's export earnings. It is the second largest employer after agriculture, employing over 45 million people directly and 60 million people indirectly. The industry contributes approximately 14% to the overall Index of Industrial Production (IIP).

The industry has emerged as a significant source for the global market during the last five years. The country has emerged as the third largest global exporter of textiles and apparels in 2014 after China and EU with around 4.5% market share as per WTO data for CY2014.

In apparel, India is the sixth largest exporter with around 4% market share in CY 2014 (behind  China, EU, Turkey, Bangladesh and Vietnam). The country's position is stronger in textiles (non-clothing) trade, where it is the third largest exporter with a 5.8% share in CY2014. It was 4.2% in CY2008; and has been increasing over the last few years. It dipped in 2014 compared to 2013, mainly due to lower exports in cotton and cotton yarn, primarily to China (Figure 5).

Textile and apparel exports performed well in an otherwise dull exports scenario in FY15. A weaker rupee and firm overseas demand helped the sector add US$ 41 billion to overall exports of US$ 310 billion, second only to engineering goods. Besides, the domestic market is also growing considerably, and is estimated to be close to US$ 67 billion.

The country's textile and apparel industry, especially cotton-based textiles and apparel, enjoys a sweet spot. It is driven by multiple structural changes in  the global textile scenario. On the contrary, key competing economies (China and Pakistan) are facing headwinds.

Some of India's key advantages comprise:

Cotton availability:

India, world's largest cotton producer, is also a net exporter of cotton and cotton yarn. On the other hand, China is a net importer of cotton and cotton yarn. Pakistan is a net cotton importer.

Competitive costs: In the last five years, India has enhanced cost competitiveness in key inputs (labour and power). Higher wage inflation and currency apbrciation has made China more expensive in the last few years.

Socio-economic factors: India's strong, vibrant democracy stands out in sharp contrast vis-a-vis key competing countries, grappling with geopolitical risks. The result is that customers are sourcing more of their requirement from India. India's environmental and labour law compliances are also better than relevant competing countries.

Supportive government policies: The textile industry is a significant contributor to the country's economic engine. Hence, the central government as well as  various state governments have put in place policies, which are supportive of the industry.

Strong domestic consumption growth:

The domestic market is becoming increasingly attractive for local players over the last few years. With rising consumerism and disposable income, the retail sector has grown rapidly in the past decade. Several international players have tried to leverage those growth opportunities.

The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. The country's textile market is expected to reach US$ 226 billion by 2023, implying around 10% CAGR.

The Textile Ministry's Vision 2024-25 envisages a CAGR of at least 15% in exports from FY15-25. India is expected to have a market share of 15-20% of the global textile and apparel trade from the brsent 5%. The domestic market is also expected to grow at 12% or higher.

HOME TEXTILES MARKET

The home textiles and furnishing sector (terry towels, bed sheets, top of the beds, curtains, pillows cases, rugs, carpets) forms a significant part of the overall textile industry. At the wholesale level, the global home textile market is estimated to be close to US$45 billion. At the retail level, the market was valued at $136 billion in 2015; and is likely to reach $203 billion by 2020, growing at 8.3% CAGR

Over the past five years, home textiles demand has grown consistently owing to rising consumer spending on home renovation, accelerating investments on infrastructure, and demand from Asian markets like India, China, Korea, and Indonesia. Product innovation and development has allowed retailers and manufacturers to widen their customer reach. Globalisation has also played a key role in market development.

The US and Europe are the largest consumers of the global home furnishings market. On the other hand, India, China, and Pakistan are among the key suppliers. While developed economies have tended towards smaller households and demand for comfort, enhanced value and convenience of use, the growth in emerging countries has been driven by an increase in the number of new homes for the burgeoning middle class, who brfer affordability and shopping convenience.

The 'India advantage' is most prominent in the home textile segment. Indian players have the scale and technology to compete with large manufacturers in China and other countries. India's share in home textile trade is around 11%, more than double its share in textiles. In the US Cotton Home textile categories (valued at US$ 7.5billion), the country has 31% market share, very close to China's 39%. In certain product categories (towels and bed linen), the share is even higher and better than China. India has been constantly growing its market share over the last few years in this space.

The imports share of cotton towels to the US has grown significantly (from 30% to 38% from CY 2009 to CY 2015). Also in the cotton sheets segment, India's market share has grown from 27% in CY2009 to 48% in CY2015 according to the Office of Textiles and Apparels, US. Figure 9 shows the share of key competing countries in US imports in cotton towels and sheets.

KEY DEVELOPMENTS IN FY 2015-16

FY15-16 was a landmark year for WIL with its highest ever sales and profitability. While the Company maintained its dominance in the Home Textile segment, it undertook several initiatives for long-term growth and market leadership. The Company continued to receive several awards and accolades for its quality, innovation and sustainability initiatives.

Sustained leadership

WIL was ranked the No. 1 home textile supplier to the US for the fourth year in a row by the magazine Home & Textile Today. The Company was recognized by Texprocil for highest exports in all three categories (towels, bed linen and overall home textiles). The Company recorded 13% growth in sales during the year; and was running at near-full capacity utilization in towels and bed sheets.

To cater to the growing demand, the Company embarked on an expansion of its finished product capacities. This resulted in a capacity growth of around 20% in both the Company's key products

Consumer-Centric approach

The Company's unique customer-centric approach to home textiles has helped it achieve market leadership. In the last three decades, WIL has evolved from being a commodity manufacturer to a creator of unique product and brand experiences. These experiences are created through a combination of brands, products, technologies and new channels as depicted in Figure 12.

The Company has considerable focus on innovation and new product development. Apart from its own innovation lab, it also partners with various institutions to develop new products and solutions. During FY16, 34% of sales was contributed by innovative products developed/owned by the company.

The Company has also worked on branding and marketing its innovation. We undertook a highly successful nation-wide media campaign in the US for our patent Hygrocotton® which is also now an ingredient brand. This was well received by consumers, resulting in HygroCotton® crossing the US$100 million milestone in sales and accounting for over 10% of the Company's overall revenues.

Apart from ingredient brands, the Company also increased its focus on its own and licensed brands. The key focus during the year was the 'Spaces' brand for the domestic market. This resulted in strong growth in the domestic retail segment - 47% during the year. The share of branded sales has reached 13% in the overall Company's sales, up from 11% during the brvious year.

Besides, the Company also sharpened its focus on new channels (e-commerce and hospitality). It is developing various products to cater to the hospitality segment (hotels, spas, resorts, cruise lines, and so on); the Company's hospitality business doubled during the year.

In the e-commerce segment, the Company launched its online portal - "www.shopwelspun.in " in India and "www.shopwelspun.com " in the US. WIL has also launched Christy products in the US through its e-commerce partners. These initiatives have resulted in attractive sales through new channels, touching 5% of overall sales

Not just delivering innovative products, the Company also helps its customers in their supply chain management. WIL's dedicated data analytics team analyses sales data from its customer stores to forecast future demand. This solution helps customers reduce inventory and increase inventory turns, while minimizing stock-outs at the same time.

Inclusive growth

Sustainability and inclusive growth are key components of Welspun's social commitment. Some of the key initiatives are depicted in Figure 13. A more detailed look at Welspun's Sustainability initiatives are discussed in the Sustainability Section.

Rewards and Recognitions

The Company continued to receive several accolades for quality, innovation and sustainability.

O First Indian company to receive the Egyptian Cotton Gold Seal

O Walmart Supplier of the Year award in Bed & Bath category

O CSR Award by Tesco

O Texprocil Award for Highest Overall Global  Exports, Highest Exports in Bed Category and Highest Exports in Towels Category

O 5 Star Vendor of the Year by Macy's

O Golden Peacock Eco Innovation Award 2015

O Wilkinson Best Innovation Award 2015

O ASDA George Home: Best Product Quality award for Egyptian Nanospun Towel

O Ms. Dipali Goenka, Jt. MD. & CEO, featured at #16 in Asia's 50 Power Businesswomen 2016 by Forbes and #4 among Indian women

O Ms. Dipali Goenka appointed on the Board of Directors of Social Accountability Accreditation Services (SAAS)

OUTLOOK

The outlook for the Indian home textile industry continues to be positive. The factors which contribute to the India advantage are expected to continue over the medium term. This is expected to help India enhance its market share further in the US and other key geographies.

Welspun is well placed to capitalise on this opportunity. The Company is also planning to increase its capacity in all three major product lines -towels, bed linen and rugs and carpets.

The Company's future priorities are: O Expanded product range

O Increased share from innovation

O New channels

O New segments

O New geographies

O Personalised/Customised products

O Achieving and maintaining operational excellence

The Company has announced Vision 2020 which aims to achieve in five years:

O Revenue of US$ 2 billion

O Debt-free (on a net debt basis)

O Innovative products share of revenues at 40%

O Branded products share of revenue at 25%

O Domestic market share of revenue at 20%

HUMAN RESOURCE

The Company believes that human capital is its most important asset. WIL has 19,156 permanent employees on its payroll as on 31.03.2016, There are several measures taken to ensure a positive work environment for all its employees.

WIL's key HR initiatives comprise:

Employee Development: WIL focuses on building a strong leadership pipeline to catapult the organization into the position of the 'Most Innovative Home Textiles' brand in the market. To achieve this objective, WIL has instituted the 'Welspun Leadership Academy' in partnership with the people consulting firm, Hay Group. These interventions will help the participants live the Welspun values, collaborate and lead teams more effectively. As a part of this journey, the leaders have also undergone assessments that have helped them unearth some of the behaviours that determine why they do what they do. The leadership development journey also has elements of gamification such as badges and medals to incentivize positive behaviors.

Apart from Leadership Academy, Welspun Group has also partnered with Indian School of Business (ISB) for designing and delivering a customized general management course for its senior leaders to support their learning and development. The General Management Programme aims at developing these leaders on areas of Customer Focused Marketing Strategy, Operational Excellence and other areas of business relevance.

Talent Acquisition: New concepts like brdictive index test and behavioural interview are used to match the person's capabilities to the profile requirement.

Employee Communication & Engagement: These initiatives include mini town halls, coffee with Director, shining star, shabash workers and skip  levels. The objective is to develop a culture that recognises employees as an integral part of the organisation.

Diwali, Women's day, Holi and monthly birthdays are celebrated in the organisation. Welspun Women's Cricket League and monthly newsletters were some other employee-engagement initiatives taken during the year.

WIL also engaged with educational institutions; some of the Company's top leaders conducted interactive sessions in those institutes. Further, the Company invited a few educational institutes to visit its facility for better understanding.

INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

The internal control system encompasses the policies, processes, tasks, behaviours and other aspects of WIL that taken together, facilitate effective and efficient operation, quality of internal and external reporting, compliance with applicable laws and regulations. WIL's objectives, its internal organisation and the environment in which it operates are continuously evolving and as a result, the risks it faces are continuously changing. To make its internal control effective and sound, WIL thoroughly and regularly evaluates the nature and extent of risks to which the Company is exposed. The operation and monitoring of the system of internal control has been taken by individuals who collectively possess the necessary skills, technical knowledge, objectivity, understanding of the Company, industries and markets in which it operates. The qualified, experienced and independent Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of internal controls systems and suggests improvements for strengthening whenever required. WIL has a strong Management Information System, which is an integral part of the control mechanism

DISCUSSION OF FINANCIAL PERFORMANCE - FY16

FY16 was the 'Best Ever' financial year for WIL with the Company recording the highest annual sales and profitability in its history. WIL crossed the Rs. 7 billion milestone for PAT, during the year. The operating EBITDA margin also reached an all-time high level, at 26%. The Company generated free cash flows after meeting the year's capex requirements.

REVENUE

a. Revenue from operations (Net)

Net sales stood at Rs. 59,795 million in FY16, compared to Rs. 53,025 million in FY15, registering 13% growth over the brvious year. This growth in revenue was driven by higher volumes across products, favourable exchange rate movement and higher mix of innovative and branded products.

b. Other income

Income from other sources was Rs. 915 million in FY16, as against Rs. 949 million in FY15. This comprised interest income of Rs. 228 million, income on status holder incentive scripts of Rs. 442 million and dividend and other miscellaneous income of Rs. 245 million.

Expenditure

a. Cost of materials

Consumption of raw materials stood at Rs. 26,612 million during the year. This accounts for 45% of sales for FY16 vis­a-vis 48% during FY15, lower owing to  higher vertical integration and better product mix.

b. Manufacturing expenses

Manufacturing expense was at Rs. 6614 million in FY16, compared to Rs. 5,874 million in FY15. The manufacturing expense includes power, fuel and water charges of Rs. 1,335 million, dyes and chemicals of Rs. 2,377 million, and labour and job work charges of Rs. 941 million.

As a percentage of sales, manufacturing expense was at 11.06% in FY16, compared to 11.08% in FY15.

c. Employee cost

Employee cost stood at Rs. 5,364 million in FY16 as against Rs. 4,460 million in FY15. As a percentage of sales it has increased to 8.9%, compared to 8.4% in the brvious year. This was due to increase in average wages and higher head count during the year.

d. Selling, administration and other expenses

Selling administration and other expenses was reported at Rs. 5,630 million in FY16, compared to Rs. 4,506 million in FY15. This increase was primarily on account of higher advertising and sales promotion expenses. As a percentage to sales, the expense under this head increased to 9.4% in FY16 as against 8.5% in FY15.

e. Finance costs

Financial expenses in FY16 was Rs. 2,362 million. The corresponding figure in FY15 was Rs. 2,829 million. The decrease was owing to the reduction in base rate by banks, issuance of commercial paper at finer rates and incentives from Central & State Governments.

f. Debrciation and amortisation expense

Debrciation was reported at Rs. 3,750 million during FY16, as compared to Rs. 3,329 million in FY15. This was  primarily due to the capitalisation of the modernisation & expansion projects.

Margins

a. EBITDA

Operating EBITDA in FY16 has grown 22.2% to Rs. 15,575 million, resulting in an EBITDA margin of 26% from Rs. 12,742 million (margin 24%) in the brvious year. It was driven by higher vertical integration, higher share of innovative and branded products and tighter cost control. The reported EBITDA in FY16 was Rs. 16,490 million, a significant improvement compared to the FY15 figure of Rs. 13,691 million. Operating profit and margin during FY16 were the highest ever achieved by the Company.

b. Profit after tax

Profit after tax, post minority interest stood at Rs. 7,029 million in FY16, compared to Rs.5,398 million in FY15, rebrsenting 30.2% Y-o-Y growth.

Earnings per share (Basic)

Earnings per share (EPS) for the year ending 31st March, 2016 (Basic) (before extra-ordinary item) stood at Rs. 7 per share, compared to Rs. 5.38 per share in the year ended 31st March, 2015.

6. Net worth

The Company's net worth stood at Rs. 19,877 million as on 31st March, 2016, compared to Rs. 14,319 million as on 31st March, 2015.

Book value of equity shares touched Rs.19.78 per equity share as on 31st March 2016, vis-a-vis 14.25 per equity share in FY15.

The details of movement in various heads of net worth are as under:

a. Share capital

The issued, subscribed and paid-up share capital as on 31st March, 2016 stood at Rs. 1,004.73 million.

b. Reserves and surplus

Securities brmium account: The securities brmium account stood at Rs. 3,238.12 million in FY16, in line with the figure at the end of FY15 (Rs. 3,237.8 million).

i) Capital redemption reserve: The balance as on 31st March, 2016 amounted to Rs. 488.38 million, same as at the end of the brvious year.

ii) Capital reserve: The balance as on  31st March, 2016 amounted to Rs. 1,475 million, same as at the end of the brvious year.

iii) Foreign exchange translation reserve as on 31st March 2016 was at Rs. 656 million against Rs. 567 million in the brvious year.

iv) Profit and loss account: The balance in the profit and loss account as on 31st March, 2016 was Rs. 12,993 million from Rs. 7,630 million as on 31st March, 2015. This increase was primarily owing to profits earned during the year.

7. Loan funds

Gross debt as on 31st March, 2016 stood at Rs. 26,632 million as against Rs. 30,851 million at the end of FY15, showing a decline of Rs. 4,219 million. The long-term debt amounted to Rs. 18,901 million as against Rs. 20,817 million at the end of the brvious financial year.

The Company's cash and cash equivalents at end-FY16 stood at Rs. 1,384 million as against Rs. 4,297 million in the brvious year.

Net debt as on 31st March, 2016 was Rs. 25,248 million (after reducing the cash and bank balance and liquid investment) vis-a-vis Rs. 26,554 million as on 31st March 2015.

Net debt to equity stood at 1.27 times in FY16 (1.85 times in FY15). Net debt / operational EBITDA stood at 1.62 times during the year (2.08 times in FY15), showing the Company's strong performance.

8. Fixed assets

Gross block of fixed assets touched Rs. 55,148 million at the end of FY16, compared to Rs. 44,933 million at the end of FY15. This increase was mainly on account of capex for modernisation and capacity expansion. Net block of fixed assets (tangible and intangible) including capital work in progress was Rs. 35,211 million in FY16, compared to Rs. 27,834 million in FY15.

9. Inventory

Inventory as on 31st March, 2016 stood at Rs. 11,046 million as against Rs. 11,006 million in as at 31st March 2015. In number of days, inventory was 67 days as on 31st March 2016 vis-a-vis 76 days as at 31st March 2015, showing an improvement in the inventory turns during the year. The inventory turnover ratio stood at 5.41 times in FY16, compared to 4.82 times in FY15.

10. Debtors

Sundry debtors as on 31st March, 2016 was at Rs. 6,114 million, compared to Rs. 4,467 million as on 31st March 2015. The number of days debtors' were 37 at the end of FY16 as against 31 in at the end of FY15.

11. Cash and bank balances and liquid investment

Cash and bank balances and liquid investment was Rs. 1,384 million as on 31st March, 2016. At the end of FY15, the corresponding figure was Rs. 4,297 million.

The Company has generated positive cash flows for the year after meeting its capex requirement.

12. Loans and advances

Loans and advances (short term and long term) as on 31st March, 2016 stood at Rs. 6,419 million, compared to Rs. 7,474 million in FY15 end. Loans and advances include advances given to related parties, capital advances, security deposits, advance taxes and balances with the government authorities like customs and excise, among others.

13. Current liabilities

Trade payables stood at Rs. 10,080 million as of end-FY16, compared to Rs. 6,910 million in FY15 end. Trade payables are at 62 days at the end of FY16 as against 48 days at the end of FY15.

- Other current liabilities (excluding current maturities of long-term borrowings) stood at Rs. 2,629 million in as on 31st March, 2016, compared to Rs. 1,903 million at the end of FY15.

- Short-term provisions stood at Rs. 77 million at the end of FY16 vis-a-vis Rs. 932 million at end-FY15. This decrease was mainly on account of lesser provision for the proposed dividend on equity shares (including the dividend distribution tax) .

14. Cash conversion cycle

Cash conversion cycle for FY16 has decreased to 43 days as against 59 days in the brvious year, primarily owing to a decrease in the inventory, receivables and increase in payable days as on 31st March 2016.

15. Dividend

The Company has a declared dividend distribution policy, where-in the payout will be 25% of the PAT of Standalone financials of the Company including dividend distribution tax, if any. During the year, the Company announced interim dividend twice as well as a final dividend, aggregating Rs. 1.30/share on face value of Rs. 1/share i.e. 130% of the face value.