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Auditor Report of AYM Syntex Ltd.

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



 
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