Auditor Report of AYM Syntex Ltd.

Mar 31, 2023

AYM Syntex Limited

Report on the Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone financial statements of AYM Syntex Limited ("the Company"), which comprise the Standalone Balance Sheet as at March 31, 2023, and the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and total comprehensive income (comprising of profit and other comprehensive income), changes in equity and its cash flows for the year then ended.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the "Auditor''s Responsibilities for the Audit of the Standalone Financial Statements" section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter	How our audit addressed the key audit matter
Assessment of realisability of Minimum Alternate Tax (''MAT'')	To evaluate the realisability of MAT Credit entitlement, our
credit entitlement	procedures included the following:
(Refer note 9 of the standalone financial statements)	• Understood and evaluated the design and tested the operating effectiveness of the Company''s controls over
The Balance of Minimum Alternate Tax (''MAT'') credit entitlement classified under Deferred Tax Assets (net) in the balance sheet as on March 31, 2023 is Rs. 5,825.92 Lakhs.	preparation of forecasts. • Assessed the historical accuracy of the Company''s Board approved forecasts by comparing the forecast approved in
Entitlement of MAT credit is recognised to the extent there is	the previous year with the actual performance in the
convincing evidence that the Company will be able to utilise the	current year.
said credit against normal tax payable based on the Company''s	• Tested the mathematical accuracy of the underlying
projected taxable profits in the forthcoming years.	calculations and comparing the forecasts with the budgets
We considered the realisability of MAT credit entitlement to be a	approved by the Board of Directors.
key audit matter as the amount is material to the standalone	• Assessed the reasonableness of assumptions used in the
financial statements and there is significant management	preparation of forecasts with external and internal factors
judgement involved while applying various assumptions in	including business and industry growth rates, and
preparation of forecasts which mainly include future business	Company''s past performance.
growth rates and projected taxable profits.	• Applied sensitivity to the forecasts to assess whether the MAT credit carried as an asset would be utilised within the permitted remaining period. Based on the above procedures, we did not note any material exception to the Company''s judgement in preparation of forecasts of future taxable profits for the assessment of realisability of the MAT credit entitlement.

Key audit matter	How our audit addressed the key audit matter
Assessment of indication of impairment and the recoverable	Our audit procedures related to testing impairment
amount (RA) of Net carrying value of assets	assessment of the carrying amount of net assets included the
(Refer note 2(f) of the standalone financial statements)	following: • Understood and evaluated the design and tested the
The carrying amount of the Company''s net assets exceeded the	operating effectiveness of controls for identification and
Company''s market capitalisation requiring the Company''s	assessment of any potential impairment, including
management to assess whether there is any indication of impairment to the net assets having carrying value of Rs.	determining the recoverable amount of the net assets.
60,964.09 Lakhs as at March 31, 2023.	• Assessed the historical accuracy of the Company''s Board approved forecasts by comparing the forecast approved in
Based on such indications, an impairment assessment was	the previous year with the actual performance in the
performed by the Company''s management in accordance with	current year.
the requirements of Ind AS 36, ''Impairment of Assets''.	• Used auditor''s expert for testing appropriateness of the
Management calculated the value in use of the assets by	method and model used for determining the recoverable
applying the discounted cash flow method.	amount and evaluating reasonableness of key assumptions
This has been considered a key audit matter, because of the	like discount rate, and terminal growth rate.
significance of the carrying value of the assets of the Company	• Evaluated reasonableness of other key assumptions used in
and the estimation uncertainty in the assumptions used for	future cash flow projections such as future sales, Cost of
calculating the recoverable amount of the net assets such as	materials and growth rate over the estimation period.
future sales, discount rate, cost of materials and growth rate	• Tested the mathematical accuracy of the models''
over the estimation period.	calculation and comparing the forecasts with the budgets approved by the Board of Directors. • Performed sensitivity analysis over key assumptions to corroborate that recoverable amount is within a reasonable range. • Assessed the appropriateness of the related presentation and disclosures in the standalone financial statements. Based on the above procedures performed, we did not note any material exception in the management assessment of the recoverable amount of the net carrying value of assets.

Other Information

standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

In connection with our audit of the standalone financial statements, our responsibility is to also read the management discussion & analysis and MD & CEO message when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the management discussion & analysis and MD & CEO message, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate action as applicable under the relevant laws and regulations.

5. The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Director''s report, management discussion & analysis and MD & CEO message, but does not include the standalone financial statements and our auditor''s report thereon.

The Director''s report was obtained prior to the date of this auditor''s report. However, the management discussion & analysis and MD & CEO message is expected to be made available to us after the date of this auditor''s report.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the Director''s report and, in doing so, consider whether the other information is materially inconsistent with the

Responsibilities of management and those charged

with governance for the standalone financial statements

6. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

7. In preparing the standalone financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor''s responsibilities for the audit of the standalone

financial statements

8. Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

9. As part of an audit in accordance with SAs, we exercise

professional judgement and maintain professional

scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

10. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

11. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

12. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

13. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

14. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

(c) The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by

this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March 31, 2023, taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2023, from being appointed as a director in terms of Section 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A".

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its standalone financial position in its standalone financial statements - Refer note 41 to the standalone financial statements;

ii. The Company was not required to recognise a provision as at March 31, 2023 under the applicable law or accounting standards, as it does not have any material foreseeable losses on long-term contract. The Company did not have any derivative contracts as at March 31, 2023.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2023.

iv. (a) The management has represented that,

to the best of its knowledge and belief, as disclosed in the notes to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any

other person(s) or enti''ty(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer Note 51(a)(v) to the standalone financial statements);

(b) The management has represented that, to the best of its knowledge and belief, as disclosed in the notes to the accounts, no funds have been received by the Company from any person(s) or enti''ty(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer Note 51(a)(v) to the standalone financial statements); and

(c) Based on such audit procedures that we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe

that the representations under sub-clause (a) and (b) contain any material misstatement.

v. The Company has not declared or paid any dividend during the year.

vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 (as amended), which provides for books of account to have the feature of audit trail, edit log and related matters in the accounting software used by the Company, is applicable to the Company only with effect from financial year beginning April 1, 2023, the reporting under clause (g) of Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), is currently not applicable.

15. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

For Price Waterhouse Chartered Accountants LLP

Firm Registration Number: 012754N/N500016

sd/-

Pankaj Khandelia

Partner

Membership Number: 102022 UDIN: 23102022BGTWMZ1995

Place: Mumbai

Date: May 05, 2023

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Mar 31, 2018

Report on the Indian Accounting Standards (Ind AS) Financial Statements

1. We have audited the accompanying financial statements of AYM Syntex Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Ind AS Financial Statements

2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of The Companies Act, 2013 (“the Act”) with respect to the preparation of these Ind AS financial statements to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made thereunder including the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

5. We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the Ind AS financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its total comprehensive income (comprising of profit and other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Other Matter

9. The comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April 1, 2016 included in these Ind AS financial statements, are based on the previously issued statutory financial statements for the years ended March 31, 2017 and March 31, 2016 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by the predecessor auditor who expressed an unmodified opinion vide reports dated May 6, 2017 and May 6, 2016 respectively. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditor’s Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (“the Order”), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.

11. As required by Section 143 (3) of the Act, we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

c. The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.

e. On the basis of the written representations received from the directors as on March 31, 2018, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164(2) of the Act.

f. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.

g. With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

i The Company has disclosed the impact, if any, of pending litigations as at March 31, 2018 on its financial position in its Ind AS financial statements - Refer Note 39;

ii. The Company has long-term contracts as at March 31, 2018 for which there were no material foreseeable losses. The Company did not have any longterm derivative contracts as at March 31, 2018.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018.

iv. The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended March 31, 2018.

Referred to in paragraph 11(f) of the Independent Auditors’ Report of even date to the members of AYM Syntex Limited on the Ind AS financial statements for the year ended March 31, 2018

Report on the Internal Financial Controls with reference to financial statements under Clause (i) of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference to financial statements of AYM Syntex Limited (“the Company”) as of March 31, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

2. The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on the Company’s internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

6. A company’s internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial controls with reference to financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to financial statements

7. Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial control controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at March 31. 2018, based on internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Referred to in paragraph 10 of the Independent Auditors’ Report of even date to the members of AYM Syntex Limited on the Ind AS financial statements as of and for the year ended March 31, 2018

i. a. The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

b. The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies have been noticed on such verification. In our opinion, the frequency of verification is reasonable.

c. The title deeds of immovable properties, as disclosed in Note 3 on fixed assets to the financial statements, are held in the name of the Company, except in respect of the following immovable properties:

Nature of immovable	Number of cases	Value as at March 31, 2018 (Rs.in Lakhs)		Remarks
		Gross block	Net block
Freehold land	2	45.22	20.04	Title is not transferred in the name of the Company
Residential Flats	6	14.85	10.18	Documents of title deeds not available with the Company

ii. The physical verification of inventory (excluding goods in transit and stocks with third parties) have been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on physical verification of inventory by Management as compared to book records were not material.

iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 (“the Act”). Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.

iv. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under Section 185 and 186. Therefore, the provisions of Clause 3(iv) of the said Order are not applicable to the Company.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. a. According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of employees’ state insurance, income tax, service tax, cess, goods and service tax with effect from July 1, 2017, though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including sales tax, provident fund, value added tax, profession tax, duty of customs, duty of excise and other material statutory dues, as applicable, with the appropriate authorities.

b. According to the information and explanations given to us and the records of the Company examined by us, there are no dues of value added tax and goods and service tax which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, service tax, duty of customs and duty of excise as at March 31, 2018, which have not been deposited on account of a dispute, are as follows:

Name of the statute	Nature of dues	Amount (Rs. in Lakhs)*	Period to which the amount relates	Forum where the dispute is pending
The Income tax Act, 1961	Income tax	10.68	Assessment Years 2012-13 to 2014-15	Commissioner of Income Tax (Appeals), Mumbai
Bombay Sales Tax Act, 1959	Sales tax	166.09	Financial Years 2002-03 and 2003-04	Joint Commissioner of Sales Tax (Appeals), Thane
The Finance Act, 1994	Service Tax	1.95	Financial Years 2005-06 and 2006-07	Deputy Commissioner of Central Excise and Customs, Vapi
		55.96	Financial Year 2006-07	Commissioner of Central Excise, Customs and Service Tax, Vapi
		103.86	Financial Years 2007-08 to 2012-13	Commissioner of Central Excise, Vapi
		86.61	Financial Years 2013-14 to 2014-15	Commissioner of Central Excise and Customs, Vapi
		221.71	Financial Year 2014-15	Central Excise and Service Tax Appellate Tribunal, Ahmedabad
		56.44	Financial Year 2015-16	Commissioner of Central Excise and Customs, Vapi
The Customs Act, 1962	Duty of Customs	72.55	Financial Years 1996-97 and 1997-98	Commissioner of Customs, Mumbai
		168.36	Financial Year 2006-07	Commissioner of Customs (Imports), Navi Mumbai
		3.78	Financial Years 2006-07 to 2008-09	Deputy Commissioner of Central Excise and Customs, Vapi
		25.00	Financial Year 2013-14	Commissioner of Customs (Appeals), Mumbai
The Central Excise Act, 1944	Duty of excise	30.37	Financial Year 2006-07	Commissioner of Central Excise and Customs, Vapi
		41.42	Financial Year 2007-08	Joint Commissioner of Central Excise and Customs, Vapi

* Net of amount paid under protest

viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government. As the Company has not issued any debentures as at Balance Sheet date, the provisions of Clause 3(viii) of the Order, to that extent, are not applicable to the Company.

ix. In our opinion, and according to the information and explanations given to us, the money raised by way of term loans have been applied for the purposes for which they were obtained. As the Company has not raised any moneys by way of initial public offer and further public offer (including debt instruments), the provisions of Clause 3(ix) of the Order, to that extent, are not applicable to the Company.

x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the Ind AS financial statements as required under Ind AS 24, Related Party Disclosures specified under Section 133 of the Act, read with Rule 4 of the Companies (Indian Accounting Standards) Rules, 2015 (as amended).

xiv. The Company has made a preferential allotment of shares during the year under review, in compliance with the requirements of Section 42 of the Act. The amounts raised have been used for the purpose for which funds were raised.

xv. The Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.

For Price Waterhouse Chartered Accountants LLP

Firm Registration Number: 012754N/N500016

Mehul Desai

Partner

Membership Number: 103211

Place : Mumbai

Date : May 21, 2018

---

Mar 31, 2015

1. We have audited the accompanying financial statements of Welspun Syntex Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

2. The Company's Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the financial statements.

Basis for Qualified Opinion

4. Attention is drawn to Note 29 regarding freehold land includes Rs. 7.73 lacs and development expenses of Rs. 14.98 lacs incurred on such land capitalized in the financial year 2002-03 for which the Company holds no title. The Company is in possession of the said land without any interference for more than twelve years and is in the process of executing the documents to transfer the said land in its name. Consequently, we are unable to determine whether any adjustment to these amounts is necessary. Our audit opinion on the financial statements for the year ended 31 March 2014 was also qualified in respect of the above matter.

Opinion

5. In our opinion and to the best of our information and according to the explanations given to us, except for possible effects of the matters described in the Basis of Qualified Opinion paragraph above, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2015, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory requirements

6. As required by the 'Companies (Auditor's Report) Order, 2015 issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the "Order") and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a Statement on the matters specified in paragraphs 3 and 4 of the Order.

7. As required by Section 143 (3) of the Act, we report that:

a) We have sought and except for the matter described in the Basis for Qualified Opinion paragraph above, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) Except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

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

d) Except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e) The matter described in the Basis for Qualified Opinion paragraph above, in our opinion, may have adverse effect on the functioning of the Company.

f) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2015 from being appointed as a director in terms of Section 164 (2) of the Act;

g) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 26 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts having any material foreseeable losses; and

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2015.

Annexure referred to in Paragraph 6 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of Welspun Syntex Limited on the financial statements for the year ended 31 March 2015.

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) The fixed assets have been physically verified by the management during the year as per the phased program designed to cover all the fixed assets over a period, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. Discrepancies noticed on such verification, which are not material, have been properly dealt with in the books of accounts.

(ii) (a) As explained to us, the inventories have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) As explained to us, the Company is maintaining proper records of inventories and discrepancies noticed on physical verification of inventories as compared to the book records, which are not material, have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control systems in respect of the aforesaid areas.

(v) The Company has not accepted any deposits from the public within the meaning of Sections 73 to 76 of the Act and the rules framed thereunder to the extent notified.

(vi) We have broadly reviewed the cost accounting records maintained by the Company prescribed by the Central Government under Section 148(1) of the Act and are of the opinion that prima facie the prescribed records have been maintained. However, we are neither required to carry out nor have carried out detailed examination of such cost accounting records with a view to determine whether they are accurate or complete.

(vii) According to the records of the Company, examined by us and information and explanations given to us:

(a) Undisputed statutory dues including provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and others as applicable have generally been regularly

deposited with the appropriate authorities except delay in few cases. There are no undisputed amounts payable in respect of aforesaid dues outstanding as at 31 March 2015 for a period of more than six months from the date they became payable.

(b) The disputed dues of income tax, sales tax, service tax, duty of customs and duty of excise which have not been deposited are as under:

Name of the Period to which Amount (Rs. Forum where statute (Nature of the amount in lacs) dispute is dues) relates pending

The Customs Act,1962

Duty of customs F.Y.1996-1997 72.55 Commissioner of and F.Y1997- Customs, Mumbai 1998

F.Y. 2006-2007 168.36 Commissioner of Customs (Imports), Navi Mumbai

F.Y. 2006-2007 378 Deputy and F.Y.2007- Commissioner of 2008 Central Excise and Customs, Vapi

F.Y. 2013-14 25.00 Commissioner of Customs (Appeals), Mumbai

The Central Excise Act, 1944

Duty of excise F.Y.1997-1998 546.24 The Supreme Court of India

F.Y. 2005-2006 138.34 Commissioner of and F.Y.2006- Central Excise and 2007 Customs, Vapi

F.Y.2003-2004 0.50 Commissioner of Central Excise (Appeals), Mumbai

F.Y.2007-2008 41.42 Joint Commissioner of Central Excise and Customs, Vapi

Service tax F.Y.2005-2007 1.95 Deputy Commissioner of Central Excise and Customs, Vapi

2006-2007 55.96 Commissioner of Central Excise, Customs and Service Tax, Vapi

F.Y.2007-2013 123.52 Commissioner of central excise, Vapi

Bombay Sales Tax Act, 1959

Sales tax F.Y. 2002-2004 166.09 Joint Commissioner of Sales Tax (Appeal) Thane

Income Tax Act, 1961

Income tax F.Y. 2009-2010 46.86 Commissioner and F.Y. 2011- of Income Tax 2012 (Appeals), Mumbai

(c) There were no amounts required to be transferred to the Investor Education and Protection Fund in accordance with the provisions of the Companies Act, 1956 and the rules made thereunder.

(viii) The Company does not have accumulated losses at the end of the financial year and has not incurred any cash losses in the current or immediately preceding financial year.

(ix) According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to banks and financial institutions during the year.

(x) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from banks and financial institutions.

(xi) In our opinion and according to the information and explanations given to us, the term loans raised during the year have been applied for the purposes for which they were raised.

(xii) Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year.

For MGB & Co. LLP Chartered Accountants Firm Registration Number 101169W/W-100035

Rajesh Chamaria Partner Membership Number 046788 Mumbai, 14 May 2015

---

Mar 31, 2014

We have audited the accompanying financial statements of Welspun Syntex Limited ("the company") which comprise the balance sheet as at 31 March 2014, the statement of Profit and loss and cash fow statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s responsibility for the financial statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub- section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 and other accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our qualified audit opinion.

Basis for qualified Opinion

Attention is drawn to Note 30 regarding freehold land includes Rs. 7.73 lacs and development expenses of Rs.14.98 lacs incurred on such land capitalized in the financial year 2002-03 for which the Company holds no title. The Company is in possession of the said land without any interference for more than twelve years and is in the process of executing the documents to transfer the said land in its name. Consequently, we are unable to determine whether any adjustment to these amounts is necessary. Our audit opinion on the financial statements for the year ended 31 March 2013 was also qualified in respect of the above matter.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for possible effects of the matters described in the basis of the qualified Opinion paragraph above, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the balance sheet, of the state of affairs of the company as at 31 March 2014;

b) In the case of the statement of Profit and loss, of the Profit for the year ended on that date; and

c) In the case of the cash fow statement, of the cash flows for the year ended on that date.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

(i) 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;

(ii) 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 those books;

(iii) The balance sheet, statement of Profit and loss and the cash fow statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the balance sheet, the statement of Profit and loss and the cash fow statement dealt with by this report comply with the applicable Accounting Standards referred to in sub-section (3C) of section 211 of the Act read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013;

(v) On the basis of written representations received from the directors and taken on record by the board of directors, none of the directors is disqualified as on 31 March 2014, from being appointed as a director in terms of section 274(1)(g) of the Act.

Annexure referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements" of our report of even date

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

(b) As explained to us, all the fixed assets have been physically verifed by the management in a phased manner, which in our opinion is reasonable, having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verifcation.

(c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the company is not affected.

(ii) In respect of inventories:

(a) As explained to us, the inventories have been physically verifed during the year by the management except stock lying with the third parties in respect of whom confirmations have been obtained. In our opinion, the frequency of verifcation is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verifcation of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of inventories. As explained to us, no material discrepancies were noticed on physical verifcation of inventories as compared to the book records.

(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act.

(b) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal controls systems in respect of the aforesaid areas.

(v) a) In our opinion and according to the information and explanations given to us, the particulars of all contracts or arrangements that need to be entered in the register maintained under Section 301 of the Act have been so entered.

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

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public during the year.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business.

(viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) According to the records of the Company examined by us and information and explanations given to us:

(a) Undisputed Statutory dues including provident fund, investor education and protection fund, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and others as applicable have generally been regularly deposited with the appropriate authorities. There are no undisputed amounts payable in respect of the aforesaid dues which have remained outstanding as at 31 March, 2014 for a period of more than six months from the date they became payable.

(b) The disputed dues of custom duty, excise duty, service tax, income tax and sales tax which have not been deposited are as under:

Name of the Period to which Amount Forum where statute the amount (Rs. in dispute is pending (Nature of relates lacs) dues)

The Customs Act, 1962

Custom duty 1996-1997 and 72.55 Commissioner of 1997-1998 Customs, Mumbai

2006-2007 168.36 Commissioner of Customs (Imports), Navi Mumbai

2006-2007 and 3.78 Deputy 2007-2008 Commissioner of Central Excise and Customs, Vapi

The Central Excise Act, 1944

Excise duty 1997-1998 and 685.53 The Supreme Court 2005-2006 of India

2005-2006 and 138.34 Commissioner of 2006-2007 Central Excise and Customs, Vapi

2003-2004 0.50 Commissioner of Central Excise (Appeals), Mumbai

2007-2008 41.42 Joint Commissioner of Central Excise and Customs, Vapi

Service tax 2005-2007 1.95 Deputy Commissioner of Central Excise and Customs, Vapi

2006-2007 55.96 Commissioner of Central Excise, Customs and Service Tax, Vapi

2007-2013 123.52 Commissioner of central excise, Vapi

Bombay Sales Tax 2002-2004 166.09 Joint Commissioner Act, 1959 of Sales Tax - Sales tax (Appeal), Thane

Income Tax Act, 1961 2009-2010 0.01 The commissioner - Income tax of Income Tax (Appeal), Mumbai

(x) The Company does not have accumulated losses at the end of the financial year. The Company has not incurred any cash losses during the financial year covered by the audit and also in the immediately preceding financial year.

(xi) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks and debenture holders.

(xii) In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund /nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

(xiv) The Company is not dealing or trading in securities, debentures and other investments.

(xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from banks and financial institutions.

(xvi) The Company has raised new term loans during the year. The term loans outstanding at the beginning of the year and those raised during the year have been applied for the purposes for which they were raised.

(xvii) According to the information and explanations given to us and examination of the Balance Sheet of the Company and related information as made available to us, we report that funds raised on short term basis have not been used for long term investments.

(xviii) During the year, the Company has not made any preferential allotment of shares to companies or parties covered in the register maintained under section 301 of the Act.

(xix) The Company has not issued any secured debentures during the year.

(xx) The Company has not raised any money by way of public issue during the year.

(xxi) Based on our audit procedures performed and according to the information and explanations given by the management, no fraud on or by the Company has been noticed or reported during the course of our audit

For MGB & Co Chartered Accountants Firm Registration Number 101169W Rajesh Chamaria Partner Membership Number 046788

Mumbai, 29 May 2014

---

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Welspun Syntex Limited ("the Company") which comprise the balance sheet as at 31 March 2013, the statement of profit and loss and cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s responsibility for the financial statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting standards referred to in section 211(3C) of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

Basis for Qualified Opinion

Attention is drawn to Note 29 regarding freehold land includes Rs. 22.34 lacs and development expenses of Rs. 92.12 lacs incurred on such land capitalized in year 2002-03 for which company hold no title. Company is in the process of executing the documents to transfer land in the name of company. The Company is in possession of land without any interference for more than twelve years in respect of said land. Consequently, we are unable to determine whether any adjustment to these amount necessary. Our audit opinion on the financial statements for the year ended 31 March 2012 was also qualified in respect of the above matter.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for possible effects of the matters described in the basis of the Qualified Opinion paragraph above, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the balance sheet, of the state of affairs of the Company as at 31 March 2013;

b) In the case of the statement of profit and loss, of the profit for the year ended on that date; and

c) In the case of the cash flow statement, of the cash flows for the year ended on that date.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

(i) 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;

(ii) 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 those books;

(iii) The balance sheet, statement of profit and loss and the cash flow statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the balance sheet, statement of profit and loss, and the cash flow statement comply with the accounting standards referred to in section 211(3C) of the Act;

(v) On the basis of written representations received from the directors as on 31 March 2013, and taken on record by the board of directors, none of the directors is disqualified as on 31 March 2013, from being appointed as a director in terms of section 274(1)(g) of the Act.

Annexure referred to Auditors'' Report to the members of Welspun Syntex Limited on the accounts for the year ended 31 March 2013

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

(b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

(c) In our opinion, the Company has not disposed off a substantial part of its fixed asset during the year and the going concern status of the company is not affected.

(ii) In respect of Inventories:

(a) The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book records.

(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act.

(b) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and sale of goods and services except for fixed assets, where internal control system need to be strengthened. We have not observed any continuing failure to correct major weaknesses in the internal controls systems in respect of the aforesaid areas.

(v) a) In our opinion and according to the information and explanations given to us, the particulars of all contracts or arrangements that need to be entered in the register maintained under section 301 of the Act have been so entered.

b) According to the information and explanations given to us, in our opinion transactions made in pursuance of contracts or arrangements entered in the register maintain under section 301 of the Act, in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing prices at the relevant time where such market prices are available.

(vi) According to the information and explanations given to us, the Company has not accepted any deposit from the public. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

(viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) According to the records of the Company examined by us and information and explanations given to us:

(a) Undisputed statutory dues including provident fund, investor education and protection fund, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and others as applicable have generally been regularly deposited with the appropriate authorities. There are no undisputed amounts payable in respect of the aforesaid dues which have remained outstanding as at 31 March, 2013 for a period of more than six months from the date they became payable.

(b) The disputed dues of Custom Duty, Excise Duty, Service Tax, Income Tax and Sales Tax which have not been deposited are as under:

Name of the Period to Amount Forum where statute which the (Rs. in dispute is (Nature of amount lacs) pending Dues) relates

The Customs Act, 1962

Custom Duty 1996-1997 and 72.55 Commissioner of 1997-1998 Customs, Mumbai

2006-2007 168.36 Commissioner of Customs (Imports), Navi Mumbai

2006-2007 and 3.78 Deputy 2007-2008 Commissioner of

Central Excise and Customs, Vapi

The Central Excise Act, 1944

Excise Duty 1997-1998 and 685.53 The Supreme Court 2005-2006 of India

2005-2006 and 138.34 Commissioner of 2006-2007 Central Excise and Customs, Vapi

2003-2004 0.50 Commissioner of Central Excise (Appeals), Mumbai

2007-2008 41.42 Joint Commissioner of Central Excise and Customs, Vapi

Service Tax 2005-2007 1.95 Deputy Commissioner of Central Excise and Customs, Vapi

2006-2007 55.96 Commissioner of Central Excise, Customs and Service Tax, Vapi

2007-2013 121.86 Commissioner of Central Excise, Vapi

Bombay Sales Tax Act, 1959

Sale Tax 2002-2004 166.09 Joint Commissioner of Sales Tax (Appeal), Thane

Income Tax Act,1961

Income Tax 2004-2005

2005-2006

2006-2007 The commissioner

2007-2008 1081.83 of Income Ta x (Appeal), Mumbai

2008-2009

2009-2010

2010-2011

(x) The Company does not have accumulated losses at the end of the financial year. The Company does not incurred any cash losses during the financial year covered by the audit and in the immediately preceding financial year.

(xi) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks and debenture holders.

(xii) In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund /nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

(xiv) The Company is not dealing or trading in securities, debentures and other investments.

(xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from banks and financial institutions.

(xvi) The Company has raised new term loans during the year. The term loans outstanding at the beginning of the year and those raised during the year have been applied for the purposes for which they were raised.

(xvii) According to the information and explanations given to us and examination of the Balance Sheet of the Company and related information as made available to us, we report that funds raised on short term basis have not been used for long term investments.

(xviii) During the year, the Company has not made any preferential allotment of shares to companies or parties covered in the register maintained under section 301 of the Act.

(xix) The Company has not issued any secured debenture during the year.

(xx) The Company has not raised any money by way of public issue during the year.

(xxi) In our opinion and according to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year.

For MGB & Co

Chartered Accountants

Firm Registration Number 101169W

Rajesh Chamaria

Partner

Membership Number 046788

Mumbai, 22 May 2013

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of Welspun Syntex Limited ("the Company") as at 31 March 2012, the statement of Profit and Loss and the Cash Flow statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial 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 our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 (the 'Order') issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 ("the Act"), and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we annex hereto a statement on the matters specified in paragraph 4 and 5 of the said Order.

4. Further to our comments in theAnnexure referred to Paragraph (3) above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes 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 those books;

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

d) In our opinion, the Balance Sheet, the statement of Profit and Loss and the Cash Flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act;

e) 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 31 March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act;

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to, note 29 of Notes to Accounts regarding Freehold Land of Rs. 150.72 lacs for which the Company holds no title and read with the significant accounting policies and other notes thereon, give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2012;

ii) In the case of the Statement of Profit and Loss, of the Profit of the Company for the year ended on that date; and

iii) In the case of the Cash Flow statement, of the cash flows for the year ended on that date.

Annexure referred to in paragraph (3) of Auditors' Report to the members of Welspun Syntex Limited on the accounts for the year ended 31 March 2012

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the management during the year pursuant to a phased program designed to cover substantial part of fixed assets, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) During the year, there was no disposal of substantial part of fixed assets.

(ii) (a) As explained to us, the inventories have been physically verified by the management during the year except stock lying with third parties in respect of whom confirmations have been obtained. In our opinion, the frequency of verification is reasonable.'

(b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) As explained to us, the Company has maintained proper records of inventories and no material discrepancies were noticed on physical verification of inventories as compared to the book records.

(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act.

(b) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and sale of goods and services. We have not observed any continuing failure to correct major weaknesses in the internal controls systems in respect of the aforesaid areas.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of all contracts or arrangements that need to be entered in the register maintained under section 301 of the Act have been so entered.

(b) According to the information and explanations given to us, in our opinion transactions made in pursuance of contracts or arrangements entered in the register maintain under section 301 of the Act, in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing prices at the relevant time where such market prices are available.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public during the year.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

(viii) On the basis of records produced before us, we are of the opinion that prima facie cost accounting records prescribed by the Central Government under section 209 (1) (d) of the Act, in respect of activities carried on by the Company covered under the rules under that section, have been maintained. However, we are neither required to carry out nor have carried out any detailed examination of such accounting records.

(ix) According to the records of the Company examined by us and information and explanations given to us:

(a) Undisputed statutory dues, including provident fund, investor education and protection fund, employee state insurance, income tax, value added tax, wealth tax, service tax, custom duty, excise duty, cess and any other material statutory dues to the extent applicable have been deposited regularly with the appropriate authorities except for delays in few cases. There are no undisputed amounts payable in respect of the aforesaid dues outstanding as at 31 March 2012 for a period of more than six months from the date they became payable except profession tax payable of Rs.1,032/- since paid and labour welfare fund of Rs.420/-

(b) The disputed dues of Custom Duty, Excise Duty, Service Tax and Sales Tax which have not been deposited are as under:

Name of the Period to Amount Forum where statute (Nature which the (Rs.in dispute is of Dues) amount relates lacs) pending

The Customs Act, 1962

Custom Duty 1996-1997 and 72.55 Commissioner of 1997-1998 Customs, Mumbai

2006-2007 168.36 Commissioner of Customs (Imports), Navi Mumbai

2006-2007 and 3.78 Deputy Commissioner of 2007-2008 Central Excise and Customs, Vapi

The Central Excise Act, 1944

Excise Duty 1997-1998 and 685.53 The Supreme Court 2005-2006 of India

2005-2006 and 138.34 Commissioner of Central

2006-2007 Excise and Customs, Vapi

2003-2004 0.50 CommissionerofCentral

Excise(Appeals),Mumbai

2007-2008 41.42 Joint Commissioner of

Central Excise and Customs, Vapi

Service Tax 2005-2007 1.95 Deputy Commissioner of

Central Excise and Customs, Vapi

2006-2007 55.96 CommissionerofCentral

Excise, Customs and Service Tax, Vapi

Bombay Sales Tax Act, 1959

Sale Tax 2002-2004 166.09 Joint Commissioner of

Sales Tax (Appeal), Thane

(x) The Company does not have accumulated losses at the end of the financial year and has not incurred any cash losses in the current financial year and in the immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given, the company has not defaulted in repayment of dues to banks and debenture holders during the year except unable to comment on (default for) disputed dues of Rs. 37,411 with a Bank

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi / mutual benefit fund/ society.

(xiv) The Company is not dealing or trading in securities, debentures and other investments.

(xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from banks and financial institutions.

(xvi) According to the information and explanations given to us and records of the Company examined by us, the Company has prima facie applied the term loans taken during the year for the purpose for which they were obtained.

(xvii) According to the information and explanations given to us and examination of the Balance Sheet of the Company and related information as made available to us, we report that funds raised on short term basis have not been used for long term investments.

(xviii) During the year, the Company has not made any preferential allotment of shares to companies or parties covered in the register maintained under section 301 of the Act.

(xix)The Company has not issued any secured debenture during the year.

(xx) The Company has not raised any money by way of public issue during the year.

(xxi) Based on our audit procedures performed and according to the information and explanations given by the management, no fraud on or by the Company has been noticed or reported during the course of our audit.

For MGB & Co

Chartered Accountants

Firm Registration Number 101169W

Sanjay Kothari

Partner

Membership Number 048215

Mumbai, 23 May 2012

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of Welspun Syntex Limited as at 31 March 2011 and also the Profit and Loss account and the Cash Flow statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial 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 our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of sub- section 4(A) of section 227 of the Companies Act, 1956 ("the Act"), we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to Paragraph (3) above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes 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 those books;

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

d) In our opinion, the Balance Sheet, the Profit and Loss account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act;

e) 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 31 March 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act;

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to, Note 9 of Notes to Accounts regarding Freehold Land of Rs. 150.72 lacs for which the Company holds no title and read with the significant accounting policies and other notes thereon as per schedule 18, give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2011;

ii) In the case of the Profit and Loss account, of the Profit for the year ended on that date; and

iii) In the case of the Cash Flow statement, of the cash flows for the year ended on that date.

Annexure referred to in paragraph 3 of Auditors' Report to the members of Welspun Syntex Limited on the accounts for the year ended 31 March 2011

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets except asset identification numbers.

(b) The fixed assets are physically verified by the management during the year pursuant to a phased program designed to cover substantial part of fixed assets, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) During the year, there was no disposal of substantial part of fixed assets.

(ii) (a) As explained to us, the inventories have been physically verified by the management during the year except stock lying with third parties in respect of whom confirmations have been obtained. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) As explained to us, the Company has maintained proper records of inventories and no material discrepancies were noticed on physical verification of inventories as compared to the book records.

(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act.

(b) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and sale of goods and services. We have not observed any continuing failure to correct major weaknesses in the internal controls systems in respect of the aforesaid areas.

(v) a. In our opinion and according to the information and explanations given to us, the particulars of all contracts or arrangements that need to be entered in the register maintained under Section 301 of the Act have been so entered.

b. According to the information and explanations given to us, in our opinion transactions made in pursuance of contracts or arrangements entered in the register maintain under section 301 of the Act, in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing prices at the relevant time where such market prices are available.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public during the year.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

(viii) On the basis of records produced before us, we are of the opinion that prima facie cost accounting records prescribed by the Central Government under section 209 (1) (d) of the Act, in respect of activities carried on by the Company covered under the rules under that section, have been maintained. However, we are neither required to carry out nor have carried out any detailed examination of such accounting records.

(ix) According to the records of the Company examined by us and information and explanations given to us:

(a) Undisputed statutory dues, including provident fund, investor education and protection fund, employee state insurance, income tax, value added tax, wealth tax, service tax, custom duty, excise duty, cess and any other material statutory dues to the extent applicable have been deposited regularly with the appropriate authorities except for delays in few cases. There are no undisputed amounts payable in respect of the aforesaid dues outstanding as at 31 March 2011 for a period of more than six months from the date they became payable.

(b) The disputed dues of Custom Duty, Excise Duty and Service Tax which have not been deposited are as under:

Name of the Period to Amount Forum where statute (Nature which the (Rs. in dispute is of Dues) amount relates lacs) pending

The Customs Act, 1962

Custom Duty 1996-97 and 72.55 Commissioner of 1997-1998 Customs, Mumbai

2006-2007 168.36 Commissioner of Customs (Imports), Navi Mumbai

2006-07 and 3.78 Deputy Commissioner 2007-2008 of Central Excise and Customs, Vapi

The Central Excise Act, 1944

Excise Duty 1997-1998 685.53 The Supreme Court and 2005-06 of India

2005-06 and 138.34 Commissioner of 2006-07 Central Excise and Customs, Vapi

2003-04 0.50 Commissioner of Central Excise (Appeals), Mumbai

2007-08 41.42 Joint Commissioner of Central Excise and Customs, Vapi

Service Tax 1997-98, 1.95 Deputy Commissioner 1998-99 and of Central Excise 2005-06 to and Customs, Vapi 2007-08

(x) The Company does not have accumulated losses at the end of the financial year and has not incurred any cash losses in the current financial year and in the immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given, the company has not defaulted in repayment of dues to banks and debenture holders during the year considering reshedulement in few cases.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi / mutual benefit fund / society.

(xiv) The Company is not dealing or trading in securities, debentures and other investments.

(xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from banks and financial institutions.

(xvi) According to the information and explanations given to us and records of the Company examined by us, the Company has prima facie applied the term loans taken during the year for the purpose for which they were obtained.

(xvii) According to the information and explanations given to us and examination of the Balance Sheet of the Company and related information as made available to us, we report that short term funds of Rs. 1,325.14 lacs have been used for long term investments.

(xviii)During the year, the Company has not made any preferential allotment of shares to companies or parties covered in the register maintained under section 301 of the Act.

(xix) The Company has created adequate security in respect of the debentures outstanding at the year-end.

(xx) The Company has not raised any money by way of public issue during the year.

(xxi) Based on our audit procedures performed and according to the information and explanations given by the management, no fraud on or by the Company has been noticed or reported during the course of our audit.

For MGB & Co Chartered Accountants Registration no. 101169W

Sanjay Kothari Partner Membership No: 48215

Mumbai, 25 May 2011

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Welspun Syntex Limited as at 31 March 2010 and also the Proft and Loss account and the Cash Flow statement for the year ended on that date, annexed thereto. These fnancial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these fnancial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the fnancial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fnancial statements. An audit also includes assessing the accounting principles used and signifcant estimates made by management, as well as evaluating the overall fnancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Government of India in terms of sub- section 4(A) of section 227 of the Companies Act, 1956 (“the Act”), we annex hereto a statement on the matters specifed in paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to Paragraph (3) above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes 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 those books.

c) The Balance Sheet, the Proft and Loss account and the Cash Flow statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, the Proft and Loss account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act.

e) 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 disqualifed as on 31 March 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to, Note 10 of Notes to Accounts regarding Freehold Land of Rs. 150.72 lacs for which the Company holds no title and read with the signifcant accounting policies and other notes thereon as per Schedule 18, give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2010;

ii) In the case of the Proft and Loss account, of the Proft for the year ended on that date; and

iii) In the case of the Cash Flow statement, of the cash fows for the year ended on that date.

Annexure referred to in paragraph 3 of Auditors Report to the members of Welspun Syntex Limited on the accounts for the year ended 31 March, 2010.

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fxed assets except asset identifcation numbers.

(b) According to the information and explanations given to us, the fxed assets have been physically verifed by the management at reasonable intervals in a phased program, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies noticed on such verifcation, were not material and have been properly dealt with in the books of account.

(c) During the year, the Company has not disposed off substantial part of the fxed assets.

(ii) (a) The inventories have been physically verifed by the management during the year except stock lying with third parties in respect of whom confrmations have been obtained. In our opinion, the frequency of verifcation is reasonable.

(b) In our opinion, the procedures of physical verifcation of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of records and in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on verifcation between the physical stocks and the book records were not material and have been properly dealt in the books of account.

(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, frms or other parties covered in the register maintained under section 301 of the Act. Accordingly, sub clauses (b), (c) and (d) are not applicable.

(b) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from companies, frms or other parties covered in the register maintained under section 301 of the Companies Act 1956. Accordingly, sub clauses (f) and (g) are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fxed assets and for sale of goods and services. During the course of our audit, no major weaknesses were noticed in the internal control system in respect of these areas.

(v) In our opinion and according to the information and explanations given to us, there are no contracts or arrangements that need to be entered in the register maintained under Section 301 of the Act.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public during the year within the meaning of Section 58A and 58AA of the Act and the rules framed there under.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

(viii) On the basis of records produced, we are of the opinion that prima facie cost accounting records prescribed by the Central Government under section 209 (1) (d) of the Act, in respect of products of the Company covered under that section, have been maintained. However, we are neither required to carry out nor have carried out any detailed examination of such accounting records.

(ix) (a) According to the records of the Company, the undisputed statutory dues including Provident fund, Investor Education and Protection fund, Employees state insurance, Income Tax, Sales Tax / VAT, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues to the extent applicable have been deposited regularly with the appropriate authorities except delay in few cases. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31 March 2010 for a period of more than six months from the date they became payable.

(b) There are no disputed dues on account of Income Tax, Sales Tax / VAT, Wealth Tax and Cess. Dues on account of Custom Duty, Excise Duty and Service Tax which have not been deposited are as under:

Sr. Name of the Period to Amount No. statute (Nature which the (Rs. in of Dues) amount relates lacs)

1. Custom Duty 1996-97 and 72.55 1997-98

2006-07 168.36

2006-07 and 3.78 2007-08

2. Excise Duty 1997-98 546.24

2005-06 277.30

2005-06 and 138.34 2006-07

2003-04 0.50

2007-08 41.42

3. Service Tax 1997-98, 1.95 1998-99 and 2005-06 to 2007-08

Name od the Forum where dispute is pending statute (Nature of Dues)

Custom Duty Commissioner of Customs, Mumbai

Commissioner of Customs (Import), Navi Mumbai

Deputy Commissioner of Central Excise and Customs, Vapi

Excise Duty Supreme Court of India

Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad

Commissioner of Central Excise and Customs, Vapi

Commissioner of Central Excise and Customs, (Appeals), Mumbai

Joint Commissioner of Central Excise and Customs, Vapi

Service Tax Deputy Commissioner of Central Excise and Customs, Vapi



(x) The Company does not have accumulated losses more than ffty percent of its networth as at 31 March 2010 and has not incurred cash losses during the fnancial year ended on that date covered by our audit and in the immediately preceding fnancial year.

(xi) The Company has defaulted in repayment of dues to Banks and Debenture Holders as under:

Particulars Nature of Delay of period Delay of period Payment less than between 1 month 1 month since and 3 months paid since paid (Rs. in Lacs) (Rs. in Lacs)

Banks Principal 111.42 176.06 Interest 115.38 21.98

Debenture Principal 12.30 42.50 Holders Interest 4.12 11.61

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi / mutual beneft fund / society.

(xiv) The Company is not dealing or trading in securities, debentures and other investments.

(xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from banks and fnancial institutions.

(xvi) According to the information and explanations given to us and records of the Company examined by us, the Company has not taken any term loan during the year.

(xvii) On the basis of review of utilization of funds which is based on an overall examination of the Balance Sheet of the Company and related information as made available to us, we report that no short term funds have been used for long term investments.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act 1956.

(xix) The Company has created adequate security in respect of the debentures outstanding at the year-end.

(xx) The Company has not raised any money by way of public issue during the year.

(xxi) Based on our audit procedures performed and according to the information and explanations given by the management, no fraud on or by the Company has been noticed or reported during the course of our audit.

For MGB & Co

Chartered Accountants

Firm Registration No. 101169W

Sanjay Kothari

Partner

Membership No: 48215

Mumbai, 11 May 2010