Enter the first few characters of Company and click 'Go'

Auditor Report of Welspun Enterprises Ltd.

Mar 31, 2023

Welspun Enterprises Limited

Report on the Audit of the Standalone FinancialStatements1. Opinion

We have audited the accompanying standalone financial statements of Welspun Enterprises Limited (âthe Companyâ), which comprise the balance sheet as at March 31, 2023, the statement of profit and loss (including other comprehensive income), the statement of changes in equity and the statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âstandalone financial statementsâ).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, of the state of affairs of the Company as at March 31, 2023, and its profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.

2. Basis for opinion

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

3. Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the year ended March 31, 2023. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter	Auditorâs response
Accuracy in respect of Construction contract revenue	Principal audit procedures
involves critical estimates. â¢ Estimated cost is a critical estimate to determine	Our audit approach was a combination of test of internal controls and substantive procedures which included the
revenues. This estimate has a high inherent	following:
uncertainty as it requires consideration of progress of the contract, costs incurred till date, costs required to complete the remaining contract performance obligations.	â¢ Evaluated the design of internal controls relating to recording of costs incurred and estimation of efforts required to complete the performance obligations. â¢ Tested the access and application controls pertaining to allocation and budgeting systems which prevents unauthorized changes to recording of costs incurred.

Key audit matter	Auditorâs response
	â¢ Selected a sample of contracts and tested the operating effectiveness of the internal controls relating to costs incurred and estimated through inspection of evidence of performance of these controls.
	â¢ Selected a sample of contracts and performed a retrospective review of costs incurred with estimated efforts to identify significant variations and verify whether those variations have been considered in estimating the remaining costs to complete the contract.
	â¢ Reviewed a sample of contracts with unbilled revenues to identify possible delays in achieving milestones, which require change in estimated costs to complete the remaining performance obligations.
	â¢ Performed analytical procedures and test of details for reasonableness of incurred and estimated costs.

4. Other information

The Company''s Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s Annual report, but does not include the financial statements and our auditors'' report thereon. The Company''s Annual report is expected to be made available to us after the date of this auditor''s report.

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

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Company''s Annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take necessary actions, as applicable under the relevant laws and regulations.

5. Managementâs responsibility for the standalone financial statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

6. Auditorâs responsibilities for the audit of the standalone financial Statements

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

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

â¢ O btain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

â¢ Ovaluate the appropriateness of accounting

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

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

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

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

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

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

(b) The management has represented, that, to the best of its knowledge and belief, other than as disclosed in the note 71 (b) to the standalone financial statements, no funds have been received by the Company from any person or entity, including foreign entity (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under subclause (iv) (a) and (iv) (b) contain any material misstatement.

v. As stated in note 62 to the standalone financial statements

a) A he final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with Section 123 of the Act, as applicable.

b) The Interim dividend declared and paid by the Company during the year and until the date of this report is in accordance with section 123 of the Act, as applicable.

7. Report on Other Legal and Regulatory requirements

A. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of Section 143(11) of the Act, 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 âAnnexure Aâ, a statement on the matters specified in the paragraph 3 and 4 of the Order.

B. 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) T he balance sheet, the statement of profit and loss (including other comprehensive income), the statement of changes in equity and the statement of cash flows dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

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

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

g) With respect to the other matters to

be included in the Auditor''s Report in

accordance with the requirements of section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the

explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of Section 197 of the Act.

h) With respect to the other matters to

be included in the Auditor''s Report in

accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as

amended, in our opinion and to the best of our information and according to the explanations given to us:

i. T he Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements (Refer note 49 of the standalone financial statements);

ii. The Company has made provision as required under the applicable law or accounting standards, for material foreseeable losses, if any, in respect of long-term contracts including derivative contract.

iii. T here has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

iv. (a) The management has represented

that, to the best of its knowledge and belief, other than as disclosed in the note 71(a) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

c) The Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with section123 of the Act, as applicable.

vi. A roviso to Rule 3(1) of the Companies (Accounts) Rule, 2014 for maintaining the books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of the Company (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.

For MGB & Co LLP

Chartered Accountants

Firm Registration Number 101169W/W-100035

Hitendra Bhandari

Partner

Membership Number 107832

Mumbai, May 19, 2023

UDIN: 23107832BGWAXD9375

Mar 31, 2018

1. Report on the standalone Ind AS financial statements

We have audited the accompanying standalone Ind AS financial statements of Welspun Enterprises Limited (the âCompanyâ), which comprise the balance sheet as at 31 March 2018, the statement of profit and loss (including other comprehensive income), the statement of cash flows and the statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as âstandalone Ind AS financial statementsâ).

2. Managementâs responsibility for the standalone Ind AS financial statements

The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditorâs responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. While conducting the 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 of the standalone Ind AS financial statements 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 standalone Ind AS financial statements are free from material misstatement.

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

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

4. Opinion

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

5. Report on other Legal and Regulatory requirements

I. As required by the Companies (Auditorâs Report) Order, 2016 issued by the Central Government of India in terms of section 143(11) of the Act, (âthe Orderâ), 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, a statement on the matters specified in the paragraph 3 and 4 of the Order.

II. As required by Section143 (3) of the Act, we report that:

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

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

c) The balance sheet, the statement of profit and loss (including other comprehensive income), the statement of cash flows and the statement of changes in equity dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;

e) On the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 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 Auditorâs 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 standalone Ind AS financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, in respect of long term contracts including derivative contracts; and

iii. There are no amounts required to be transferred to the Investor Education and Protection Fund by the Company during the year.

i. (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 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. As informed to us, no discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company except in case of a Freehold Land of Rs. 36 lakhs whose title is not yet transferred in the name of the Company.

ii. The physical verification of inventory has been conducted by the Management at reasonable intervals during the year. As informed to us, no discrepancies were noticed on such verification.

iii. The Company has granted loan to a Company covered in the register maintained under Section 189 of the Act.

(a) In our opinion, the rate of interest and other terms and conditions on which the loans had been granted to the Company listed in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the Company.

(b) In the case of the loans granted to a Company listed on the register maintained under section 189 of the Act, the borrowers have been regular in the payment of the principal and interest as stipulated.

(c) There are no overdue amounts in respect of the loan granted to a Company listed in the register maintained under section 189 of the Act.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Act.

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.

vi. We have broadly reviewed the cost 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 accounts and records have been made and maintained. We have however not made a detailed examination of such 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, employeesâ state insurance, income tax, sales tax, service tax, goods and 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 and also the company has not paid professional tax of Rs. 9,785 on account of pending registration process and Works Contract Tax amounting to Rs. 69,462. There are no undisputed amounts payable in respect of aforesaid dues outstanding as at 31 March 2018 for a period of more than six months from the date they became payable except Works Contract Tax amounting to Rs. 219,334.

b) There are no dues of duty of customs, sales tax and duty of excise which have not been deposited on account of any dispute. The disputed dues of income tax, service tax and value added tax which have not been deposited are as under:

Name of the statute	Nature of the dues	Amount (Rs. in Lakhs) **	Period to which the amount relates	Forum where the dispute is pending
The Income Tax Act, 1961	Penalty	1	FY 2007-2008	Assistant Commissioner of Income Tax
The Central Excise Act, 1944	Service tax	70	FY 2008-2009 to FY 2010-2011	Additional Commissioner-Central Excise and Service Tax
The Central Excise Act, 1944	Service tax	96	FY 2007-2008 to FY 2009-2010	Central Excise Service Tax Appellate Tribunal
Haryana Value Added Tax Act, 2003	Value Added Tax	171	FY 2009-2010	Deputy Excise and Taxation Commissioner
Gujarat value Added Tax Act, 2003	Value Added Tax	4	FY 2011-12	Deputy Commissioner of Commercial Tax

viii. 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 loans or borrowings to financial institution and banks. The Company has not taken any loans from Government and has not issued any debentures.

ix. In our opinion and according to the information and explanations given to us, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year.

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

xi. According to the records of the Company examined by us, and information and explanations given to us, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company and the Nidhi Rules, 2014 are not applicable to it.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

xiv. According to the records of the Company examined by us, and information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

xv. According to the records of the Company examined by us, and information and explanations given to us, the Company has not entered into non-cash transactions with directors or persons connected with him.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ) as referred to in paragraph 5(II)(f) under âReport on other Legal and Regulatory requirementsâ of our report of even date to the members of the Company on the standalone Ind AS financial statements for the year ended 31 March 2018

We have audited the internal financial controls over financial reporting of Welspun Enterprises Limited (âthe Companyâ) as of 31 March 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Managementâs Responsibility for Internal Financial Controls

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

Auditorâs Responsibility

Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on â Audit of Internal Financial Controls over Financial Reportingâ (the â Guidance Noteâ) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

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

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

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

For MGB & Co LLP

Chartered Accountants

Firm Registration Number 101169W/W-100035

Sanjay Kothari

Partner

Membership Number 048215

Mumbai, 10 May 2018

Mar 31, 2017

Independent Auditorâs Report

The Members of Welspun Enterprises Limited

(Formerly known as Welspun Projects Limited)

1. Report on the standalone Ind AS financial statements

We have audited the accompanying standalone Ind AS financial statements of Welspun Enterprises Limited (Formerly known as Welspun Projects Limited) (the âCompanyâ), which comprise the balance sheet as at March 31, 2017, the statement of profit and loss (including other comprehensive income), the statement of cash flows and the statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as âstandalone Ind AS financial statementsâ).

2. Managementâs responsibility for the standalone Ind AS financial statements

The Companyâs Board of Directors is responsible for the matters stated in section 134 (5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditorâs responsibility

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

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

5. Other matters

The comparative financial information of the Company for the year ended March 31, 2016 and the transition date opening balance sheet as at April 1, 2015 included in these standalone Ind AS financial statements, are based on the statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by us and issued audit report dated May 23, 2016 for the year ended March 31, 2016 and audit report dated May 29, 2015 for the year ended March 31, 2015 audited by erstwhile auditor expressed an unmodified opinion on those standalone financial statements as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.

Our opinion on the standalone Ind AS financial statements and our report on Other Legal and Regulatory Requirements below is not modified in respect of these matters.

6. Report on other legal and regulatory requirements

II. As required by Section143 (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;

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

e) On the basis of the written representations received from the directors as on March 31, 2017 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 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 Auditorâs 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 standalone Ind AS financial statements;

iii. There are no amounts required to be transferred to the Investor Education and Protection Fund by the Company during the year.

iv. The Company has provided requisite disclosures in its standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016, on the basis of the information available with the Company. Based on the audit procedures, and relying on managementâs representation, we report that disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the Management- Refer Note 59 to the standalone Ind AS financial statements.

Annexure referred to in paragraph 6(I) under âReport on other Legal and Regulatory requirementsâ of our report of even date to the members of the Company on the standalone Ind AS financial statements for the year ended March 31, 2017

i. 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 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. As informed to us, no discrepancies were noticed on such verification.

c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company except in case of a Freehold Land of Rs. 35.67 lakhs whose title is not yet transferred in the name of the Company.

ii. The physical verification of inventory has been conducted by the Management at reasonable intervals during the year. As informed to us, no discrepancies were noticed on such verification.

iii. The Company has not granted any loan, secured or unsecured, to any party 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, the Company has complied with the provisions of Section 185 and 186 of the Act.

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 there under.

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, employeesâ state insurance, income tax, sales 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 March 31, 2017 for a period of more than six months from the date they became payable.

Name of the Statute	Nature of the Dues	Amount in (Rs, in Lakhs)	Period to which the amount relate	Forum where dispute is pending
The Income Tax Act, 1961	Income tax-Penalty Income Tax	48.91 0.58 112.22	FY 2007-2008 FY 2007-2008 FY 2012-2013	Commissioner of Income Tax (Appeals) Assistant Commissioner of Income Tax Commissioner of Income Tax (Appeals)
The Central Excise Act, 1944	Service tax	70.25 96.40	FY 2008-2009 to 2010-2011 FY 2007-2008 to FY 2009-2010	Additional Commissioner-Central Excise and Service Tax Central Excise Service Tax Appellate Tribunal
Harya na Value Added Tax Act, 2003	Va lue Added Tax	170.74	FY 2009-2010	Deputy Excise and Taxation Commissioner
Gujarat Value Added Tax Act, 2003	Value Added Tax	3.76	FY 2011-2012	Deputy Commissioner of Commercial Tax

xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company and the Nidhi Rules, 2014 are not applicable to it.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with related parties are in compliance with Sections 177 and 188 of the Act and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

xiv.According to the records of the Company examined by us, and information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

xvi.The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ) as referred to in paragraph 6(II)(f) under âReport on other Legal and Regulatory requirementsâ of our report of even date to the members of the Company on the standalone Ind AS financial statements for the year ended March 31, 2017

We have audited the internal financial controls over financial reporting of Welspun Enterprises Limited (Formerly known as Welspun Projects Limited) (âthe Companyâ) as of March 31, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Managementâs responsibility for internal financial controls

Auditorâs responsibility

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

Meaning of internal financial controls over financial reporting

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

Inherent limitations of internal financial controls over financial reporting

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For MGB & Co. LLP

Chartered Accountants

Firm Registration Number 101169W/W-100035

Sanjay Kothari

Partner

Membership Number 048215

Place: Mumbai

Date : May 30, 2017

Mar 31, 2014

We have audited the accompanying financial statements of Welspun Projects Limited (" the Company "), which comprise the Balance Sheet as at March 31, 2014 , 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 principles generally accepted in India including 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.

Auditors 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 misstatements. 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. 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 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 :

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at M arch 31, 2014;

(b) In the case of the Statement of Profit and Loss, of the Loss 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 (Auditors Report) Order, 2003 ("the Order") 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.

1. 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 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:

a. 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;

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 comply with the Accounting Standards referred to in section 211(3C) of the Act;

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT TO THE MEMBERS OF M/S. WELSPUN PROJECTS LIMITED, ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2014.

(Referred to in paragraph 1 under the heading of Report on other legal and regulatory requirements of our report of even date)

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

b) Major portion of fixed assets has been physically verified during the year by the management in accordance with a programme of verification, which, in our opinion provides for physical verification of all the fixed assets at reasonable interval having regards to size of the Company and nature of its business. According to the information and explanations given to us the discrepancies noticed on such verification were not material and have been properly dealt with in the books of accounts.

c) No disposal of a substantial part of fixed assets of the Company has taken place during the year.

2 a) As explained to us, the inventories were physically verified by the management at reasonable intervals during the year.

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) As the Company has not maintained quantitative records of stock, It is not possible to find out discrepancies between the physical stock and book records.

3 a) The Company has granted unsecured loan to eight Companies covered in the register maintained u/s 301 of the Companies Act'' 1956. The maximum amount involved during the year was Rs. 42,68,23,012/- and the year end balance of loans granted to these Companies was Rs. 42,67,18,484/- including interest free loan of Rs.12,94,87,432/-

The Company ha s taken interest free unsecured loan from one Company covered in the register maintained u/s 301 of the Companies act 1956. The maximum amount involved during the year was Rs.8,05,80,570/- and year end balance of loan taken from such Company was Rs. Nil.

b) In our opinion, the rate of interest, where applicable and other terms and conditions on which loan have been taken from / granted to the Companies listed in the register maintained u/s 301 of the Companies act, 1956 are not prima- facie, prejudicial to the interest of the Company, except interest free Loan as stated in para 3 (a).

c) The Companies to whom advance in the nature of loan is granted there is no stipulation for repayment there of. As per the information and explanations given to us the said loan is repayable on demand. The Company is regular in repaying the principle amount wherever stipulated, 4 In our opinion and according to the information and explanations given to us, there are , adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventories and fixed assets and with regard to the receipts of Civil Contracts. During the course of our audit, we have not observed any major weakness in the internal controls.

5 a) To the best of our knowledge and belief, and according to information and explanations given to us, the transactions that needed to be entered in to the register in pursuance of Section 301 of the Companies Act, 1956, have been so entered.

b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupees five lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

6 In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public, Accordingly the provisions of clause (vi) of the Companies (Auditor s Report) order 2003 are not applicable to the Company.

7 The Company has appointed a partnership firm of Chartered Accountants, to carry out its internal audit function. In our opinion, the internal audit system commensurate with the size and nature of its business.

8 We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rule 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 detailed examination of the cost records with a view to determine whether they are accurate or complete.

9 a) Ac cording to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities.

b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31st March, 2014 for a period of more than six months from the day they become payable except Sales Tax liability of Rs. 12,95,874/- and Service Tax of Rs.1,05,34,752/-

c) The disputed statutory dues that have not been deposited on account of disputed matters pending before appropriate authorities are as under.

Sr. Nature of the Status Nature of Amount Period to No. the due which the amount relate

1. Building & Other Labour Cess Rs.1,06,52,334/- Various Construction Years Workers Welfare Cess

2. M.P minor Minerals Royalty. Rs. 3,00,000/- Various Rules 1996 years

3. Punjab Municipal House Tax Rs. 1,21,11,727/- Various corporation Ludhiana Years

4. Punjab Municipal House Tax Rs. 1,39,51,602/- Various corporation Jalandhar Years

5. Income Tax Act '' 1961 Income Tax Rs.45,48,16,121/- A.Y.2008 -09

6. Service Tax Act Service Tax Rs. 3,47,76,000/- Various Years

Sr. Nature of the Status Forum where No. dispute is Pending 1. Building & Other M.P High court Construction Jalabalpur Bench Workers Welfare Cess

2. M.P minor Minerals District Magitrate M.P Rules 1996

3. Punjab Municipal Supreme Court of corporation India

4. Punjab Municipal Supreme Court of corporation India

5. Income Tax Act '' 1961 Commissioner (Appeal)- Baroda)

6. Service Tax Act Commissioner (Appeal)- Baroda

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

11) The Company has not defaulted in repayment of dues to any financial institution or Banks.

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

13) The provisions of any Special Statue applicable to Chit Funds, Nidhis or Mutual Benefit Funds /Societies are not applicable to the Company.

14) The Company is not dealing in or trading in shares, securities, debentures, or other investments and hence, requirements of paragraph 4(xiv) are not applicable to the Company.

15) In our opinion and according to information and explanations given to us the term and condition on which the Company has given guarantee for loan taken by others from Bank / Financial Institution are not prejudicial to the interest of the Company.

16) In our opinion, the term loans have been applied for the purpose for which they were raised.

17) Ac cording to the Cash Flow Statement and other records examined by us and on the basis of information and explanations given to us, on an overall basis, funds raised on Short Term basis have, prima facie, not being used during the year for Long Term investment and vice versa.

18) During the year, the Company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained U/s 301 of the Act.

19) Since the Company does not have any debentures, the question of creation of securities for debentures does not arise.

20) The Company has not raised money by public issue during the year.

21) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

FOR CHANDRAKANT & SEVANTILAL & J.K. SHAH & CO. Firm Registration No. 101676W PLACE : VADODARA. Chartered Accountants DATE : 21-05-2014

(H.B. SHAH) PARTNER MEMBERSHIP NO. 016642

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Welspun Projects Limited ("the Company"), which comprise the Balance Sheet as at March 31, 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 principles generally accepted in India including 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.

Auditors'' 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 misstatements. 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 audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 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") 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:

a. 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;

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 comply with the Accounting Standards referred to in section 211(3C) of the Act;

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

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT TO THE MEMBERS OF M/S. WELSPUN PROJECTS LIMITED, ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2013.

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

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

b) Major portion of fixed assets has been physically verified during the year by the management in accordance with a programme of verification, which, in our opinion provides for physical verification of all the fixed assets at reasonable interval having regards to size of the Company and nature of its business. According to the information and explanations given to us the discrepancies noticed on such verification were not material and have been properly dealt with in the books of accounts.

c) No disposal of a substantial part of fixed assets of the Company has taken place during the year.

2) a) As explained to us, the inventories were physically verified by the management at reasonable intervals during the year.

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) As the Company has not maintained quantitative records of stock, It is not possible to find out discrepancies between the physical stock and book records.

3) a) The Company has granted unsecured loan to six Companies covered in the register maintained u/s 301 of the Companies Act'' 1956. The maximum amount involved during the year was Rs. 21,37,11,521/- and the year end balance of loans granted to these Companies was Rs.19,92,68,348/-including interest free loan of Rs.3,01,25,818/- The Company has taken interest free unsecured loan from one Company covered in the registered maintained u/s 301 of the Companies act'' 1956. The maximum amount involved during the year was Rs.7,75,66,967/- and year end balance of loan taken from such Company was Rs. 7,74,96,243/- b) In our opinion, the rate of interest, where applicable and other terms and conditions on which loan have been taken from / granted to the Companies listed in the register maintained us 301 of the Companies act, 1956 are not prima- facie, prejudicial to the interest of the Company. c) The Companies to whom advance in the nature of loan is granted there is no stipulation for repayment there of. As per the information and explanations given to us the said loan is repayable on demand. The Company is regular in repaying the principle amount wherever stipulated,

4) In our opinion and according to the information and explanations given to us, there are , adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventories and fixed assets and with regard to the receipts of Civil Contracts. During the course of our audit, we have not observed any major weakness in the internal controls.

5) a) To the best of our knowledge and belief, and according to information and explanations given to us, the transactions that needed to be entered in to the register in pursuance of Section 301 of the Companies Act, 1956, have been so entered. b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupees five lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

6) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public, Accordingly the provisions of clause (vi) of the Companies (Auditor''s Report) order 2003 are not applicable to the Company.

7) The Company has appointed a partnership firm of Chartered Accountants, to carry out its internal audit function. In our opinion, the internal audit system commensurate with the size and nature of its business,

8) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rule 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 detailed examination of the cost records with a view to determine whether they are accurate or complete.

9) a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities. b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31st March, 2012 for a period of more than six months from the day they become payable except Sales Tax liability of Rs.12,95,874/- and Service Tax of Rs.1,05,34,752/-

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

11) The Company has not defaulted in repayment of dues to any financial institution or Banks.

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

13) The provisions of any Special Statue applicable to Chit Funds, Nidhis or Mutual Benefit Funds/Societies are not applicable to the Company.

14) The Company is not dealing in or trading in shares, securities, debentures, or other investments and hence, requirement of paragraph 4(xiv) are not applicable to the Company.

15) In our opinion and according to information and explanations given to us the term and condition on which the Company has given guarantee for loan taken by others from Bank / Financial Institution are not prejudicial to the interest of the Company.

16) In our opinion, the term loans have been applied for the purpose for which they were raised.

17) According to the Cash Flow Statement and other records examined by us and on the basis of information and explanations given to us, on an overall basis, funds raised on Short Term basis have, prima facie, not being used during the year for Long Term investment and vise versa.

18) During the year, the Company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained U/s 301 of the Act.

19) Since the Company does not have any debentures, the question of creation of securities for debentures does not arise.

20) The Company has not raised money by public issue during the year.

21) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

FOR CHANDRAKANT & SEVANTILAL & J.K. SHAH & CO.

Chartered Accountants

Firm Registration No. 101676W

PALCE: VADODARA

DATE: 18-05-2013 H.B. SHAH - PARTNER

Membership No. 016642

Mar 31, 2012

We have audited the attached Balance Sheet of M/s. Welspun Projects Limited as at 31st March, 2012 and also the annexed statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date. 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.

We conducted our audit in accordance with 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 of 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.

1) As required by the Companies (Auditor's Report) order, 2003 issued by the Central Government of India in terms of Section 227 (4-A) of the Companies Act, 1956, and on the basis of information and explanation given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

2) FURTHER ANDSUBJECTTO OUR COMMENTS INTHE ANNEXURE REFERREDTO IN PARAGRAPH 1 ABOVE.

a) 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.

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 the books.

c) 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 of the Company.

d) 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 31st March, 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956 and

e) In our opinion, subject to non compliance with the specified accounting standards relating to :-

Disclosure of Cash Subsidy amounting to Rs.82.87 Crores received from Madhya Pradesh Rajya Setu Nirman Nigam Limited against BOT Projects under the head 'Reserve & Surplus' instead of deducting the same from the Project Cost as required by the Accounting Standard-12 "Accounting for Government Grants" (See Note No. 37).

The Balance Sheet, the statement of Profit & Loss and the Cash Flow Statement dealt with by this report comply with the other Accounting Standards as referred to in the Section 211 (3C) of the Companies Act, 1956 and

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to:

Disclosure of Cash Subsidy amounting to Rs.82.87 Crores received from Madhya Pradesh Rajya Setu Nirman Nigam Limited, against BOT Projects under the head 'Reserve & Surplus' instead of deducting the same from the Project Cost (See Note No. 37). and read with the Significant Accounting Policies and notes appearing thereon, give the information required by the Companies Act, 1956 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 31st March, 2012 and;

ii) In the case of the statement of Profit and Loss of the Profit for the year ended on that date.

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

ANNEXURE TO THE AUDITORS' REPORT TO THE MEMBERS OF M/S. WELSPUN PROJECTS LIMITED, VADODARA ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2012 (REFERREDTO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE)

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

b) Major portion of fixed assets has been physically verified during the year by the management in accordance with a program me of verification, which, in our opinion provides for physical verification of all the fixed assets as reasonable interval having regards to size of the Company and nature of its business. According to the information and explanations given to us the discrepancies noticed on such verification were not material and have been properly dealt with in the books of accounts.

c) No disposal of a substantial part of fixed assets of the Company has taken place during the year.

2. a) As explained to us, the inventories were physically verified by the management at reasonable intervals during the year.

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) As the Company has not maintained quantitative records of stock, It is not possible to find out discrepancies between the physical stock and book records.

3. a) The Company has granted unsecured loan to four Companies covered in the register maintained u/s 301 of the Companies Act1 1956. The maximum amount involved during the year was Rs. 10,95,09,827 and the year end balance of loans granted to these Companies was Rs. 7,25,97,421. Including interest free loan of Rs. 2,40,44,940/-

The Company has taken interest free unsecured loan from one Company covered in the registered maintained u/s 301 of the Companies act11956. The maximum amount involved during the year was Rs. 20,41,71,420 and year end balance of loan taken from such Company was Rs. 4,86,91,513.

b) In our opinion, the rate of interest, where applicable and other terms and conditions on which loan have been taken from / granted to the Companies listed in the register maintained us 301 of the Companies act, 1956 are not prima- facie, prejudicial to the interest of the Company.

c) The Companies to whom advance in the nature of loan is granted there is no stipulation for repayment there of. As per the information and explanations given to us the said loan is repayable on demand. The Company is regular in repaying the principle amount wherever stipulated.

4. In our opinion and according to the information and explanations given to us, there are, adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventories and fixed assets and with regard to the receipts of Civil Contracts. During the course of our audit, we have not observed any major weakness in the internal controls.

5. a) To the best of our knowledge and belief, and according to information and explanations given to us, the transactions that needed to be entered in to the register in pursuance of Section 301 of the Companies Act, 1956, have been so entered.

b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupees five lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public. Accordingly the provisions of clause (vi) of the Companies (Auditor's Report) order 2003 are not applicable to the Company.

7. The Company has appointed a partnership firm of Chartered Accountants, to carry out its internal audit function. In our opinion, the internal audit system is commensurate with the size and nature of its business.

8. The Central Government has not prescribed maintenance of cost records Under Section 209(l)(d) of the Companies Act, 1956 for any of the products of the Company.

9. a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities.

b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31st March, 2012 for a period of more than six months from the day they become payable except Sales Tax liability of Rs. 12,95,874/-and Service Tax of Rs. 1,24,16,979/-

c) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Excise Duty and Cess which have not been deposited on account of any dispute except the following disputed Demand.

Sr. Nature of the Nature of the Amount Period to which Forum where No. Status due the amount relate dispute is Pending

1. Punjab House Tax 96,89,382 2008-09 Supreme Municipal - to Court of Corporation Ludhiana 2011-12 India Act

2. Punjab House Tax 1,39,51,602 2008-09 Supreme Municipal - to Court of Corporation Jalandhar 2011-12 India Act

3. Building and Other Labour 1,06,52,334 Various Years M.P. High Construc tion Cess Court Workers Welfare Bench Cess Act, 1996. Jabalpur

4. M.P. Minor Royalty 30,25,880 Various Years District Minerals Magistrate Rules 1996 M.P.

10. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit. The Company has incurred Cash losses in the immediately proceeding financial year.

11. The Company has not defaulted in repayment of dues to any financial institution or Banks.

12. The Company has not granted loans and advances on the basis of security byway of pledge of shares, debentures or other securities.

13. The provisions of any Special Statue applicable to Chit Funds, Nidhisor Mutual Benefit Funds/Societies are not applicable to the Company.

14. The Company is not dealing in or trading in shares, securities, debentures, or other investments and hence, requirement of paragraph 4(xiv) are not applicable to the Company.

15. In our opinion and according to information and explanations given to us the term and condition on which the Company has given guarantee for loan taken by others from Bank / Financial Institution are not prejudicial to the interest of the Company.

16. In our opinion, the term loans have been applied for the purpose for which they were raised.

17. According to the Cash Flow Statement and other records examined by us and on the basis of information and explanations given to us, on an overall basis, funds raised on Short Term basis have, prima facie, not being used during the year for Long Term investment and vice versa.

18. During the year, the Company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained U/s 301 of the Act.

19. Since the Company does not have any debentures, the question of creation of securities for debentures does not arise.

20. The Company has not raised money by public issue during the year.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For Chandrakant & Sevantilal & J. K. Shah & Co.

Firm Registration No. 101676W

Chartered Accountants

Place: Vadodara

Date : 28/05/2012 (H. B. Shah)

Partner

Membership No.16642

Mar 31, 2011

We have audited the attached Balance Sheet of M/s. Welspun Projects Limited (formerly known as MSK Projects (India) Limited), as at 31st March, 2011 and also the annexed Profit and Loss Account and the Cash Flow statement of the Company for the year ended on that date. 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.

We conducted our audit in accordance with 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 of material misstatement. Anaudit 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 ouropinion.

1) As required by the Companies (Auditor's Report) order, 2003 as amended by Companies (Auditor's Report) (Amendment)Order, 2004(together 'theOrder') issuedbytheCentral GovernmentofIndiaintermsofSection 227 (4-A) of the Companies Act, 1956, and on the basis of information and explanation given to us and the books and records examined by us in the normal course ofaudit andto the bestofour knowledge and belief,we encloseinthe Annexure a statementonthe mattersspecifiedinparagraphs4and5ofthesaid order.

2) FURTHER AND SUBJECT TO OUR COMMENTS IN THE ANNEXURE REFERRED TO IN PARAGRAPH 1 ABOVE.

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessaryfor the purposeofourAudit.

b) In our opinion proper books ofaccount as required by law have been kept by the Company so faras appears from ourexaminationofthebooks.

c) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of accountoftheCompany.

d) Onthe basisofwritten representations received from the Directors and takenon recordbythe BoardofDirectors, we report that none of the Directors is disqualified as on 31st March, 2011 from being appointed as a Director in terms of clause (g)of sub-section(1)of section 274 of the Companies Act,1956.

e) In our opinion, subject to noncompliance with the specified accounting standards relatingto:- Disclosure of Cash Subsidy amounting to Rs.82.87 Crores received from Madhya Pradesh Rajya Setu Nirman Nigam Limited against BOT Projects under the head 'Reserve & Surplus' instead of deducting the same from the Project Costas required by the Accounting StandardÃ12 "Accounting for Government Grants" (See Note No. 11).

The Balance Sheet, the Profit & Loss Account and the Cash flow statement dealt with by this report comply with the other Accounting Standard as referred to in the Section 211(3C)of the Companies Act, 1956 and

f) In our opinion and to the best ofour information and according to the explanations given to us, the said accounts subject to:

Disclosure of Cash Subsidy amounting to Rs.82.87 Crores received from Madhya Pradesh Rajya Setu Nirman Nigam Limited, against BOT Projects under the head 'Reserve & Surplus' instead of deducting the same from the Project Cost (See Note No. 11). and read with the other notes appearing thereon, give the information required by the Companies Act, 1956 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 31st March, 2011 and;

ii) In the case of the Profit and Loss Account of the Loss for the year ended on that date.

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

ANNEXURE TO THE AUDITORS' REPORT TO THE MEMBERS OF M/S.WELSPUN PROJECTS LIMITED (FORMERLY KNOWN AS MSK PROJECTS (INDIA) LIMITED), BARODA ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2011

(REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE)

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

b) Major portion of fixed assets has been physically verified during the year by the management in accordance with a programme of verification, which,in ouropinion provides for physical verification of all the fixed assets as reasonable interval having regards to size of the Company and nature of its business. According to the information and explanation given to us the discrepancies noticed on such verification were not material and have been properly dealt with in the books of accounts.

c) No disposal of a substantial part of fixed assets of the Company has taken place during the year.

2. a) As explained to us, the inventories were physically verified by the management at reasonable intervals during the year.

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) Asthe Company has not maintained quantitative records of stock, It is not possible to find out discrepancies between the physical stockand book records.

3. a) The Company has granted unsecured loan to five companies covered in the register maintained u/s 301 of the Companies Act' 1956. The maximum amount involved during the year was Rs. 1268.12 Lacs and the year end balance of loans granted to these Companies was Rs.301.84 Lacs.

The Company has taken interest free unsecured loan from one Company covered in the registered maintained u/s 301 of the Companies act' 1956. The maximum amount involved during the year was Rs.1756.40 Lacs and year ended balanceofloan taken from such Company was Rs. 11.40 Lacs.

b) In our opinion, the rate of interest, where applicable and other terms and conditions on which loan have been taken from / granted to the Companies listed in the register maintained us 301 of the Companies act, 1956 are not prima- facie, prejudicial to the interest of the Company.

c) The Companies to whom advance in the nature of loan is granted there is no stipulation for repayment there of. As per the information and explanations given to us the said loan is repayable on demand. The Company is regular in repayingtheprinciple amount whereverstipulated,

4. In our opinion and according to the information and explanations giventous, there are, adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventories and fixed assets and with regard to the receipts of Civil Contracts. During the course of our audit, we have not observed any major weakness in the internal controls.

5. a) To the best of our knowledge and belief, and according to information and explanation given to us, the transactions that needed to be entered in to the register in pursuance of Section 301 of the Companies Act, 1956, have been so entered.

b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupees five lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public, Accordingly the provisions of clause (vi) of the Companies (Auditor's Report) order 2003 are not applicable to the Company.

7. The Company has appointed a partnership firm of Chartered Accountants, to carry out its internal audit function. In our opinion, the internal audit system is required to be strengthen in respect of its scope to cover all the area to commensurate with the size of the Company and nature of its business.

8. The Central Government has not prescribed maintenance ofcost records Under Section 209(1)(d) of the Companies Act, 1956 for any of the products of the Company.

9. a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax,Wealth Tax,Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities.

b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31st March, 2011 for a period of more than six months from the day theybecome payable except Sales Tax liability of Rs. 12.96Lacs.

c) According to the information and explanation given to us, there are no dues of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Excise Duty and Cess which have not been deposited on account of any dispute except the following disputedIncomeTaxDemand.

Sr. Nature of the Nature of the Amount Period to Forum where No. Status due (Rs. In Lacs) which the the amount relate dispute is Pending

1. Income Tax Act, Income Tax 27.43 A.Y. 2007-08 CIT (A) Baroda 1961

2. Income Tax Act, Income Tax 780.81 A.Y. 2008-09 CIT (A) Baroda 1961

10. The Company has no accumulated losses and has not incurred cash losses in the immediately proceeding financial year. The Company has incurred cash lossesinthe current financial year.

11. The Company has not defaulted in repayment of dues to any financial institution or Banks.

12. The Companyhasnot granted loansand advances on the basis of security by way of pledge of shares, debentures or other securities.

13. The provisionsofany Special Statue applicabletoChit Funds, Nidhisor Mutual Benefit Funds/Societies are notapplicable totheCompany.

14. The Company is not dealing in or trading in shares, securities, debentures, or other investments and hence, requirement of paragraph 4(xiv) are not applicable to the Company.

15. In our opinion and according to information and explanation given to us the term and condition on which the Company has given guarantee for loan taken by others from Bank / Financial Institution are not prejudicial to the interest of the Company.

16. In our opinion, the term loans have been applied for the purpose for which they were raised.

17. According to the Cash Flow Statement and other records examined by us and on the basis of information and explanations giventous,on anoverallbasis, funds raisedonShortTerm basishave, prima facie, not beingused duringthe year for Long Term investment and viseversa.

18. During the year,the Company has not made any preferential allotment of sharest oparties and Companies covered in the Register maintainedU/s301ofthe Act.

19. Since the Company does not have any debentures,the question of creation of securities for debentures does not arise.

20. The Company has not raised money by public issue during the year.

21. To the best ofour knowledge and belief and according to the information and explanations givento us, no fraud on or by the Company was noticed or reported during the year.

For Chandrakant & Sevantilal & J. K. Shah & Co.

Firm Registration No. 101676W

Chartered Accountants

Place: Vadodara Date : 26/05/2011 (H. B. Shah)

Partner Membership No.16642

Mar 31, 2010

We have audited the attached Balance Sheet of MSK PROJECTS (INDIA) LIMITED, as at 31 March, 2010 and also the annexed Profit and Loss Account and the Cash Flow statement of the Company for the year ended on that date. 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.

We conducted our audit in accordance with 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 of 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.

1. As required by the Companies (Auditors Report) order, 2003 as amended by Companies (Auditors Report) (Amendment) Order, 2004(togetherthe Order) issued bythe Central Government of India in terms of Section 227 (4-A) of the Companies Act, 1956, and on the basis of information and explanation given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

2. Further and subject to our comments in the annexure referred to in paragraph 1 above.

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary forthe purpose 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 the books.

c) The Balance Sheet and Profit and Loss Account dealt with by this Report are in agreement with the books of account of the Company.

d) 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 31st March, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 ofthe Companies Act, 1956.

e) Inour opinion, subject to non compliance with the specified accounting standards relatingto-.-

Disclosure of Cash Subsidy amounting to Rs.82.87 Crores received from Madhya Pradesh Rajyasetu Nirman Nigam Limited against BOT Projects under the head Reserve & Surplusinstead of deducting the same from the Project Costas required bythe Accounting Standard-12 "Accounting forGovernmentGrants"(SeeNote No. 15).

The Balance Sheet, the Profit & Loss Account and the Cash flow statement dealt with by this report comply with the other Accounting Standard as referred to in the Section 211 (3C) of the Companies Act, 1956 and

In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to:

Disclosure of Cash Subsidy amounting to Rs.82.87 Crores received from Madhya Pradesh Rajyasetu Nirman Nigam Limited against BOTProjects under the head Reserve & Surplusinstead of deducting the samefrom the Project Cost (See Note No. 15).

and read with the other notes appearing thereon, give the information required by the Companies Act, 1956 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 31st March, 2010 and;

ii) in the case of the Profit and Loss Account of the Profit for the year ended on that date.

iii) in the case of the Cash flow statement, of the cash flow for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT TO THE OF M/S. MSK PROJECTS (iNDIA) LIMITED, BARODA ON THE ACCOUNTS FOR THE YEAR ENDED 315T MARCH, 2010 (REFERRED TO IN PARAGRAPH 1 0F THE OUR REPORT OF EVEN DATE)

1 a) The Company has maintained proper records showing full particulars including quantitative details and situation of itrfixed assets.

h) Major portion of fixed assets has been physically verified during the year by the management in accordance with a programme of verification, which, in our opinion provides for physical verification of all the fixed assets as reasonable interval having regards to size of the Company and nature of its business. According to the information and explanation given to us the discrepancies noticed on such verification were not material and have been properly dealt with inthe books of accounts.

a.> No disposal of a substantial part of fixed assets of the Company has taken place during the year.

2 a > As explained to us, the inventories were physically verified bvthe management at reasonable intervals during the year.

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) As the Company has not maintained quantitative records of stock, It is not possible to find out discrepancies between the physical stock and book records.

3. a) The Company has granted unsecured loan to five companies covered inthe register maintained u/s 301 ofthe Companies Act 1956. The maximum amount involved during the year was Rs. 1544.27 Lacs and the year end balance of loans granted to these Companies was Rs. 1091.48 Lacs.

b) In our opinion, the rate of interest, where applicable and other terms and conditions on which loan have been granted to the companies listed in the register maintained us 301 of the Companies act, 1956 are not prima- facie, prejudicial to the interest of the Company except interest free loan given to two Companies (outstanding balance as on 31/03/2010 is Rs. 45.25 Lacs).

c) The Companies to whom advance in the nature of loan is granted there is no stipulation for repayment there of. As perthe information and explanations given to us the said loan is repayable on demand.

d) According to the information and explanations given to us, the Company has not taken any loans secured or unsecured from Companies, firm or other parties covered in the register maintained under section 301 of the Companies Act 1956. Accordingly provision of clause 4(iii) (a) (b) (c) and (d) of the Companies (Auditors Report) order 2003 are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, there are, adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventories and fixed assets and with regard to the receipts of Civil Contracts. During the course of our audit, we have not observed any majorweakness inthe internal controls.

5. a) To the best of our knowledge and belief, and according to information and explanation given to us, the transactions that needed to be entered in to the register in pursuance of Section 301 of the Companies Act, 1956, have been so entered.

b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupees five lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

6, In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public, Accordingly the provisions of clause (vi) of the Companies (Auditors Report) order 2003 are not applicable to the Company.

7, The Company has appointed a person to carry out its internal audit function. In our opinion, the internal audit system is required to be strengthen in respect of its scope to cover all the area to commensurate with the size of the Companyand nature of its business.

8, The Central Government has not prescribed maintenance of cost records Under Section 209(l)(d) of the Companies Act, 1956 for any of the products of the Company.

3. a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities.

b> According to the information and explanation given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31st March, 2010 for a period of more than six months from the day they become payable except Sales Tax liability of Rs. 12.96 Lacs, and Income Tax of Rs. 88.60 Lacs.

c) According to the information and explanation given to us, there are no dues of Sales Tax, IncomeTax, Custom Duty, Wealth Tax, Excise Duty and Cess which have not been deposited on account of any dispute except the following disputed Income Tax Demand.

Sr. No. Nature of the Nature of Amount Period to which Status the due (Rs. In Lacs) the amount relate

1. Income Tax Act, Income Tax 27.43 A.Y.2007-08 1961

2. Income Tax Act, Block 12.93 A.Y. 1997 to 1961 Assessment 2003-04

Nature of the Forum where Status dispute is Pending

Income Tax Act, 1961 CIT (A) Baroda

Income Tax Act, 1961 Appellate Tribunal Ahmedabad

10. The Company has no accumulated losses and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to any financial institution or Banks.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures or othersecurities.

13. The provisions of any Special Statue applicable to Chit Funds, Nidhis or Mutual Benefit Funds/Societies are not applicable to the Company.

14. The Company is not dealing in or trading in shares, securities, debentures, or other investments and hence, requirement of paragraph 4(xiv) are not applicable to the Company.

15} In our opinion and according to information and explanation given to us the term and condition on which the Company has given guarantee for loan taken by others from Bank / Financial Institution are not prejudicial to the interest of the company.

16) In our opinion,the term loans have been applied for the purpose for which they were raised.

17> According to the Cash Flow Statement and other records examined by us and on the basis of information and explanations given to us, on an overall basis, funds raised on Short Term basis have, prima facie, not being used during theyearfor LongTerm investment and vise versa.

18) During the year, the Company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained U/s301 of the Act.

19) Since the Company does not have any debentures, the question of creation of securities for debentures does not arise.

20) The Company has not raised money by public issue during the year.

21) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on orbythe Company was noticed or reported during the year.

For Chandrakant & Sevantilal & J. K. Shah & Co.

Firm Registration No. 101676W Chartered Accountants

(H. B. Shah)

Partner Membership No.16642 Place: Vadodara Date: 31/05/2010

Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article