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Auditor Report of Welspun Corp Ltd.

Mar 31, 2015

1. We have audited the accompanying standalone financial statements of Welspun Corp Limited("the Company"), which comprise the Balance Sheet as at March 31, 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 Standalone 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 standalone financial statements to 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, and Accounting Standard 30, Financial Instruments: Recognition and Measurement issued by the Institute of Chartered Accountants of India to the extent it does not contradict any other accounting standard referred to in Section 133 of the Act read with Rule 7 of Companies (Accounts) Rules, 2014. 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 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 standalone financial statements based on our audit.

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

5. We conducted our audit 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 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 financial statements. 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. 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.

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

Opinion

8. 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 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, 2015, and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

9. We draw your attention to Note 46 (b) relating to remuneration paid to the managing director of the Company for the financial year 2012-13 in excess of the limits specified in the Schedule XIII of the Companies Act, 1956 wherein the Company received approval from the Central Government for a lower amount. During

the current financial year, the Company has been advised that the Central Government approval was not required for payment of remuneration to the Managing Director. Consequently, the Company has requested the Central Government to treat the original application as withdrawn and has accounted as paid the amount of Rs. 83.01million shown previously as refundable by the Managing Director.

Our opinion is not qualified in respect of this matter.

Other Matter

10. The standalone financial statements of the Company as at March 31, 2014 and for the year then ended were audited by another firm of chartered accountants under the Companies Act, 1956 who, vide their report dated April 29, 2014, expressed an unmodified opinion on those financial statements.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Require- ments

11. As required by 'the Companies (Auditors' 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.

12. 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, and the Cash Flow Statement 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, read with Rule 7 of the Companies (Accounts) Rules, 2014.

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

(f) 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 31,2015 on its financial position in its standalone financial statements.

ii. The Company has made provision as at March 31, 2015, as required under the applicable law or Accounting Standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31,2015.

Referred to in paragraph 11 of the Independent Auditors' Report of even date to the members of Welspun Corp Limited on the standalone financial statements as of and for the year ended March 31, 2015

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

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

ii. (a) The inventory has been physically verified by the Management during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory 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 the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

iii. 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. Therefore, the provisions of Clause 3(iii), (iii)(a) and (iii) (b) of the said Order are not applicable to the Company.

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 purchase of inventory and fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

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. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been specified under sub-section (1) of Section 148 of the Act, 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 regular in depositing the 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 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 wealth-tax and cess which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, service tax, duty of excise, duty of customs, value added tax as at March 31, 2015 which have not been deposited on account of a dispute, are as follows:

Name of the statute Nature of dues Amount Period to which the amount relates

Central Excise Act, 1944 Duty of Excise 90.37 FY 2013-14

0.08 FY 2007-08

0.10 FY 2013-14

0.09 FY 2003-04

11.16 FY 2008-09 to 2013-14

235.35 FY 2007-08 to 2011-12

Central Sales Tax Act,1956 CST 5.61 FY 2008-09, 2010-11 and 2011-12

Gujarat Sales Tax Act,1969 Sales Tax/ VAT 2.04 FY 2000-01 to and 2002-03

Gujarat Value Added Tax 24.74 FY 2006-07 to Act,2003 2008-09

5.90 FY 2008-09

Finance Act, 1994 Service Tax 2.02 FY 2008-09 and 2009-10

10.27 FY 2004-05 to 2006-07

1.36 FY 2006-07 to 2012-13

0.60 FY 2013-14

9.76 FY 2008-09 to 2011-12

1.17 FY 2008-09

Customs Act, 1962 Duty of 8,609.82 FY 2007-08 Customs to 2009-10

Income Tax Act, 1961 Income tax 2,196.44 FY 2004-05 to 2012-14

Name of the Director Forum where the dispute is pending

Central Excise Act 1944 Custom Excise Service Tax Appellate Tribunal, Delhi

Custom Excise Service Tax Appellate Tribunal, Ahmedabad

Custom Excise Service Tax Appellate Tribunal, Ahmedabad

Gujarat High Court, Ahmedabad

Commissioner of Central Excise, Rajkot

Customs, Excise and Service tax Appellate Tribunal, Ahmedabad

Cenral Sales Tax Act 1956 Joint Commissioner of Commercial Tax appeals, Vadodara

Guajarat Sales tax Act Gujarat Commercial Tax Tribunal 1969 and Gujarat Value Added Tax Act 2003 Joint Commissioner, Vadodara

Joint Commissioner of Commercial Tax, Appeals, Vadodara

Finance Act 1994 Additional Commisssioner Central Excise & Customs, Vadodara

Supreme Court, Delhi

Custom Excise Service Tax Appellate Tribunal, Ahmedabad

Commissioner (Appeal), Surat Commissioner of Central Excise, Rajkot

Commissioner of Central Excise, Rajkot

Customs Act 1962 Bombay High Court

Income Tax Act 1961 Commissioner of Income tax, (Appeals)

c) The amount required to be transferred to Investor Education and Protection Fund has been transferred within the stipulated time in accordance with the provisions of the Companies Act, 1956 and the rules made thereunder.

viii. The Company has no accumulated losses as at the end of the financial year and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

ix. 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 dues to any financial institution or bank or debenture holders as at the balance sheet date.

x. In our opinion, and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the Company.

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

xii. 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 on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

For Price Waterhouse Chartered Accountants LLP Firm Registration Number: (FRN 012754N/N500016)

Mehul Desai Place: Mumbai Partner Date: April 28, 2015 Membership Number:103211


Mar 31, 2014

We have audited the accompanying financial statements of Welspun Corp Limited ("the company") which comprise of balance sheet as at 31 March 2014, the statement of profit and loss, the cash flow statement for the year ended on that date 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 ("ICAI"). 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 judgement, 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 sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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 loss of the company for the year ended on that date; and

c. in the case of the Cash Flow statement, of the cash flows of the company for the year ended on that date.

Emphasis of Matter

We draw attention to Note 45(b) of the financial statements, relating to remuneration paid to the Managing Director of the Company for the financial year 2012-13, which turned out to be in excess by Rs. 83.01 million considering the limits approved by the Central Government. The Managing Director holds the said amount in trust and is refundable to the Company. Our Opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 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 cash flow 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 flow 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 representation 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 of "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.

(b) As explained to us, all the fixed assets have been physically verified 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 verification during the year.

(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 its inventories:

(a) The inventories have been physically verified by the management during the year except stock lying with the third parties in respect of whom confirmations have been obtained. 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, no material discrepancies were noticed on physical verification of inventories as compared to the book records.

(iii) (a) 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) 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) According to the information and explanations given to us, there are no contracts or arrangements the particulars of which are required 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.

(vii) In our opinion, the Company has an internal audit system commensurate with the 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 Act 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, employee state insurance, income tax, sales tax / value added tax, wealth tax, service tax, custom duty, excise duty, cess and any other material statutory dues to the extent applicable have generally been regularly deposited with the appropriate authorities. There are no undisputed amounts payable in respect of the aforesaid dues 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 income tax, sales tax / value added tax, service tax, custom duty and excise duty which have not been deposited are as under:

Name of the Statute Amount Period to which (Nature of dues) (Rs. in million) the amount relates

Gujarat Sales Tax Act, 1969 and 13.86 FY 2000-01 Gujarat Value Added Tax Act, to FY 2002-03 2003 and FY 2005-06 to FY 2006-07

Sales Tax / Value Added Tax 89.75 FY 2006-07 to FY 2009-2010

Central Sales Tax Act, 1956 0.92 FY 2001-02

Central Sales Tax 4.39 FY 2008-09 and FY 2009-2010

Central Excise Act, 1944 0.09 FY 2003-04

* Excise Duty 6.33 FY 2006-07 to FY 2007-08 and FY 2010-11

15.35 FY 2008-09 to FY 2012-13 3.55 FY 2007-08 FY 2009-10 and FY 2011-12

23.90 FY 2008-09 and 2009-10

* Service Tax 10.27 FY 2004-05 to FY 2006-07

16.99 FY 2006-07 to FY 2011-12

95.73 FY 2005-06 to FY 2013-14

40.63 FY 2007-08 to FY 2012-13

23.05 FY 2008-09 to FY 2012 -13

21.34 FY 2006-07, FY 2009-10 to FY 2012-13

Customs Act, 1962 8,609.82# FY 2007-08 * Custom duty to FY 2009-10

Income Tax Act, 1961 2,190.21 FY 2004-05 * Income tax to FY 2010-11 411.88 FY 2009-10 to FY 2012-13

Name of the Statute Forum where dispute (Nature of dues) is pending

Gujarat Sales Tax Act, 1969 and Gujarat Value Added Tax

Gujarat Value Added Tax Act, Tribunal 2003

Sales Tax / Value Added Tax Joint Commissioner of Commercial tax (Appeals)

Central Sales Tax Act, 1956 Gujarat Value Added Tax Tribunal

Central Sales Tax Joint Commissioner of Commercial tax (Appeals)

Central Excise Act, 1944 High Court

* Excise Duty Custom Excise and Service Tax Appellate Tribunal Commissioner of Central Excise and Customs Commissioner of Central Excise and Customs (Appeals)

Deputy Commissioner of Central Excise and Customs

* Service Tax Supreme Court of India

Custom Excise and Service Tax Appellate Tribunal

Commissioner/Additional Commissioner of Central Excise and Customs

Commissioner of Central Excise and Customs (Appeals) Deputy / Assistant Commissioner of Central Excise and Customs

Superintendent of Central Excise and Customs

Customs Act, 1962 Custom Excise and Service * Custom duty Tax Appellate Tribunal

Income Tax Act, 1961 Commissioner of Income * Income tax tax, (Appeals) Commissioner of Income tax, (Appeals)

#Does not include penalty of (i) Rs. 8,609.82 million on Company and Rs. 205 million on directors and officers of the Company levied by Commissioner of Central Excise and Custom, Mumbai and (ii) Rs. 8,609.82 million levied by Additional Director General of Foreign Trade (DGFT), Mumbai {Refer note 33(b)}.

(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 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) The Company is not a chit fund / 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 terms and conditions on which the Company has given guarantees for loans taken by subsidiaries and others from banks and financial institutions are prima facie not prejudicial to the interest of the Company.

(xvi) According to the information and explanations given to us, the Company has not raised any term loans during the year.

(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 created adequate security in respect of debentures issued.

(xx) The Company had raised funds by issue of foreign currency convertible bonds in the earlier years which have been utilized for the purposes for which they are raised except funds pending utilization have been temporarily invested as referred in Note 4 (d)(iv).

(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

Mohan Bhandari Partner Membership Number 12912 Mumbai, 29 April 2014


Mar 31, 2013

Report on the Financial Statements

1. We have audited the accompanying financial statements of Welspun Corp 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

2. 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"). 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 duet of ardor error.

Auditor''s Responsibility

3. 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 misstatements.

4. 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 duet of ardor 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.

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

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, they said financial statements together with the 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:

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 of the Company 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.

Emphasis of Matter

7. We draw attention to Note 46 of the financial statements, relating to remuneration paid/ provided in respect of Managing Director of the Company, which turned out to beinexcess of the limits prescribed under Section 198 read with Schedule XIII to the Act, due to inadequate profit, hence is subject to the approval of the Central Government. Our Opinion is not qualified in respect of this matter.

Report on other legal and regulatory requirements

8. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), issued by the Central Government of India in terms of sub-section (4A)of Section 227ofthe Act, we give in the Annexure a statement on the matters specified in paragraphs 4and5 of the Order.

9. 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, the Statement of Profit and Loss and Cash Flow 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 Cash Flow Statement comply with the Accounting Standard referred to in sub-section(3C)ofSection211oftheAct;

(v) On the basis of written representation received from the directors as at 31 March, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as at 31 March, 2013, from being appointed as a director in terms of clause (g) of sub-section(1)of Section 274oftheAct.

Annexure referred to in Paragraph (8) under the heading of "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.

(b) The fixed assets have been physically verified by the management under a phased programme of verification, which in our opinion provides for physical verification of all the fixed assets over the period. According to the information and explanations given to us, no material discrepancies were noticed on such physical verification.

(c) During the year, in our opinion, a substantial part of its fixed asset has not been disposed off by the Company. (ii) In respect of its inventories:

(a) As explained to us, the inventories (other than materials lying with the third parties which have substantially been confirmed) have been physically verified during the year by the management.

(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 were 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, in our opinion, the Company has maintained proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) According to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured to/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 are adequate internal control systems 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. Further, during the course of our audit, we have neither come across nor we have been informed of any instance of continuing failure to correct major weakness in the aforesaid internal control systems.

(v) To the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in section 301 of the Act that need to be entered in the register maintained under the said section have been so entered.

(b) Where such transactions of value in excess of rupees five lakhs in respect of any party during the year, have been made at prices which appear prima facie reasonable and/or comparable with the prevailing market prices at the relevant time.

(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 is not applicable to the Company

(vii) In our opinion, the Company has an internal audit system commensurate with the 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 as 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 books and 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, sales tax/value added tax, wealth tax, service tax, custom duty, excise duty, cess and any other material statutory dues to the extent applicable have generally been regularly deposited with the appropriate authorities. There are no undisputed amounts payable in respect of the aforesaid dues outstanding as at 31 March 2013 for a period of more than six months from the date they became payable.

(b) Following are the particulars of dues of income tax, sales tax/value added tax, service tax, custom duty and excise duty which have not been deposited on account of any dispute:

Name of the Statute Amount Period to which Forum where dispute

(Nature of dues) (Rs. in million) the amount relates is pending

Gujarat Sales Tax Act, 1969 and 24.74 FY 2006-07 High Court

Gujarat Value Added Tax Act, 2003 to FY 2008-09

Sales Tax / Value Added Tax 13.86 FY 2000-01 to GVAT / Gujarat

FY 2002-03 Commercial Tax Tribunal and FY 2005-06 to FY 2006-07

58.01# FY 2006-07 to Joint Commissioner of

FY 2008-09 Commercial tax, Appeals

Central Sales Tax Act, 1956 0.92 FY 2001-02 Sales Tax Tribunal

Central Sales Tax 5.22 FY 2008-09 Joint Commissioner of

Commercial tax, Appeals

Central Excise Act, 1944 24.00 FY 2003-04 and High Court

- Excise Duty FY 2010-11

6.33 FY 2006-07 to Custom Excise and

FY 2007-08 Service Tax Appellate

and FY 2010-11 Tribunal

9.77 FY 2008-09 Commissioner of Central

Excise and Customs 3.45 FY 2007-08 and Commissioner of Central

FY 2009-10 Excise and Customs

(Appeals) 20.52 FY 2009-10 Deputy Commissioner of Central Excise and Customs

- Service Tax 10.27 FY 2004-05 to Supreme Court of India

FY 2006-07

17.04 FY 2007-08 to Custom Excise and Service

FY 2010-11 Tax Appellate Tribunal

82.94 FY 2005-06 to Commissioner/Additional

FY 2012-13 Commissioner of Central

Excise and Customs

31.94 FY 2006-07 to Commissioner of Central

FY 2011-12 Excise and Customs

(Appeals)

23.59 FY 2008-09 to Deputy / Assistant

FY 2012-13 Commissioner of Central

Excise and Customs 21.33 FY 2006-07, Superintendent of Central

FY 2009-10 to Excise and Customs

FY 2012-13

Customs Act, 1962

Customs Duty 8,609.82** FY 2007-08 to Custom Excise and Service

FY 2009-10 Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax 2,770.97 FY 2004-05 to Commissioner of Income

FY 2010-11 tax, (Appeals)

#X 0.7 million paid subsequent to the Balance Sheet date.

Rs.1.05 million paid subsequent to the Balance Sheet date.

**does not include penalty ofRs. 8,814.82 million (refer note 33)

(x) The Company does not have accumulated losses as at 31 March 2013 and has not incurred any cash losses during the year and in the immediately preceding year.

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

(xii) According to the information and explanations given to us, the Company has not granted 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 / nidhi / mutual benefit fund / society. The provisions of clause (xiii) of paragraph 4 of the Order, therefore, are not applicable to the Company.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading insecurities. However, the Company has invested its surplus funds in Mutual Funds/Bonds/Certificates of deposits during the year and maintained proper records of transactions in respect of its investments and timely entries have been made therein. All securities are held by the Company in its own name.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by subsidiaries and others from banks and financial institutions are prima facie not prejudicial to the interests of the Company.

(xvi) According to the information and explanations given to us, the Company has raised term loans during the year. The term loans have been applied for the purposes for which they were raised.

(xvii) According to the information and explanations given to us and on overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year 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) According to the information and explanations given to us, the Company has created adequate security in respect of debentures issued.

(xx) The Company had raised funds by issue of Compulsorily Convertible Debentures, Global Depository Receipts and Foreign Currency Convertible Bonds and in the earlier years which have been utilized for the purposes for which they were raised except unutilized funds have been temporarily invested as referred in Note 2(e), 2(f) and 4(d)(iv).

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

For MGB & Co

Chartered Accountants

Firm Registration Number 101169W



Jeenendra Bhandari

Partner

Membership Number 105077

Mumbai, 30 May 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of Welspun Corp Limited ("the Company") as at 31 March 2012, the Statement of Profit and Loss 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 (Auditor's Report) Order, 2003 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 the Annexure referred to in 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, 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, Statement of Profit and Loss and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Section 211 (3C) of the Act;

(e) On the basis of written representations received from the Directors and taken on record by the Board, we report that none of the directors is disqualified as at 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 read together with the notes, 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 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 Corp 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 its fixed assets.

(b) The fixed assets are physically verified by the management during the year as per the phased program designed to cover all the assets over a period, 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 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 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 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) According to the information and explanations given to us, there are no contracts or arrangements the particulars of which are required to be entered into the register in pursuance of 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.

(VII) In our opinion, the Company has an internal audit system commensurate with the 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 cost accounting 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, employee state insurance, income tax, sales 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.

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

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

2000-01, 2001-02, 2002-03, Gujarat Sales Tax Act 13.86 Sales tax Tribuna 1969

Sales Tax/ 2005-06 and Joint Commissioner of Value Added Tax 53.20 2006-07 Sales Tax (Appeals)

368.75 2009-10 and 2010-11 Assessment stage

Central Sales Tax Act, 1956 0.9 2001-02 Sales Tax Tribunal Central Sales Tax

Commissioner of Central 13.14 2008-09 and 2009-10 Excise and Customs

Commissioner of Central The Central Excise Act, 2003-04, 2006-07 29.93 Excise and Customs 1944 and 2007-08 (Appeals)

- Excise Duty

Deputy / Assistant 20.60 2007-2008 and 2009-10 Commissioner of Central Excise and Customs

Commissioner / Additional 97.55 2005-06 to 2011-12 Commissioner of Central Excise and Customs

Commissioner of Central 31.65 2007-08 and 2008-09 Excise and Customs Service Tax (Appeals)

Deputy Commissioner of 23.99 2006-07 to 2011-12 Central Excise and Customs

2004-05, 2006-07, Superintendent of Central 21.32 2008-09 to 2011-12 Excise and Customs

(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 or in the immediately preceding financial year.

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

(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 terms and conditions on which the Company has given guarantees for loans taken by subsidiaries and others from banks and financial institutions are prima facie not prejudicial to the interests of the Company.

(XVI) The Company has not raised any term loan during the year.

(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 created adequate security in respect of debentures issued.

(XX) The Company has raised funds by issue of Global Depository Receipts during the year and Foreign Currency Convertible Bonds in the earlier years which have been utilized for the purposes for which they are raised except funds pending utilization have been temporarily invested as referred in Note 2(e) and 4(c).

(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 except fraud by an employee, who has indulged in malpractices for wrongful personal gain detected during the year, the amount is yet to be ascertained.

For MGB & Co.

Chartered Accountants

Firm Registration Number 101169W

Jeenendra Bhandari

Partner

Membership Number 105077

Mumbai, 29 May 2012


Mar 31, 2010

1. We have audited the attached Balance Sheet of Welspun Corp Limited (Formerly Welspun Gujarat Stahl Rohren Limited) ("the Company") as at 31 March 2010, 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 Companys 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 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 the Annexure referred to in 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 Section 211 (3C) of the Act;

(e) On the basis of written representations received from the Directors and taken on record by the Board, we report that none of the directors is disqualified as at 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 read with the significant accounting policies and notes to accounts 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 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 Corp Limited (Formerly Welspun Gujarat Stahl Rohren 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 its fixed assets.

(b) According to the information and explanations given to us, the fixed assets have been physically verified by the management in a phased program periodical manner at reasonable intervals, 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 verification.

(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) (a) The inventories have been physically verified by the management during the year except stock lying with third parties in respect of which 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 purchase of inventory, fixed assets and for sale of goods and services. During the course of our audit, we have not observed any major weaknesses in the internal control system.

(v) According to the information and explanations given to us, there are no contracts or arrangements the particulars of which are required to be entered into the register in pursuance of 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 with in 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, 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, 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 is no undisputed amounts payable in respect of the aforesaid dues outstanding as at 31 March 2010 for a period of more than six months from the date of becoming payable. (b) There are no disputed dues on account of Wealth Tax, Income Tax, Custom Duty, and Cess. Dues on account of the disputed Sales Tax/VAT, Service Tax and Excise Duty which have not been deposited are as under:

Name of the Statute Amount Period to which the Forum where dispute is pending

(Nature of dues) (Rs. in million) amount relates

Sales Tax 2.12 2000-2001 to 2002- 2003 Sales Tax Tribunal

(VAT)

3.61 2001-2002 and Joint Commissioner of Sales Tax

2005-2006 (Appeals)

Name of the Statute Amount Period to which the Forum where dispute is pending

(Nature of dues) (Rs. in million) amount relates

Sales Tax (VAT) 214.59 2009-2010 Assessment Stage

The Central Excise Act,

1944

- Excise Duty 0.09 2003-2004 Commissioner of Central Excise and

Customs

0.08 2007-2008 Assistant Commissioner of Central Excise

and Customs

- Service Tax 31.20 2004-2005 and Custom Excise and Service Tax Appellate

2005-2006 Tribunal (CESTAT)

7.82 2005-2006 and Custom Excise and Service Tax Appellate

2006-2007 Tribunal (CESTAT)

45.90 2006-2007 to Commissioner of Central Excise and

2008-2009 Customs

26.13 2005-2006 to Commissioner / Additional

2008-2009 Commissioner of Central Excise and Customs

0.31 2007-2008 to Deputy Commissioner of Central Excise

2009-2010 and Customs

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

(xi) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions, banks and debenture holders.

(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 terms and conditions on which the Company has given guarantee for loans taken by subsidiaries and others from banks and financial institutions are prima facie not prejudicial to the interest of the Company.

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

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company and related information as made available to us, we are of the opinion that there are no funds raised on short term basis which have been used for long term investments.

(xviii) During the year, the Company has made preferential allotment of shares under the ESOP scheme to the parties covered in the register maintained under section 301 of the Companies Act, 1956. The price at which these shares were issued is not prima- facie prejudicial to the interest of the Company.

(xix) The Company has created adequate security in respect of debentures issued.

(xx) The Company has not raised any money by way of public issue during the year. Funds raised on issue of Foreign Currency Convertible Bonds (FCCB) have been utilised for the purpose for which they were raised except pending utilization have been invested in short term deposits with Banks as referred in Note 1(c).

(xxi) Based on our audit procedures performed 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 of our audit.

For MGB & Co.

Chartered Accountants

Firm Registration No.: 101169W

Mohan Bhandari

Partner

Membership No. 12912

Mumbai, 27 April 2010

 
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