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Auditor Report of Welspun Living Ltd.

Mar 31, 2023

Welspun India Limited

Report on the Audit of the StandaloneFinancial Statements

Opinion

We have audited the accompanying standalone financial statements of Welspun India Limited (“the Company”), which comprise the Balance sheet as at March 31 2023, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information in which are included the financial statement / financial information of Welspun India Employee Welfare Trust (''the Trust'') for the year ended on that date audited by the others auditor of the Trust.

In our opinion and to the best of our information and according to the explanations given to us and based on the considerations of report of other auditor on separate financial statement and on the other financial information of the Trust, the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, its profit including other comprehensive loss, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards

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

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 financial year ended March 31, 2023. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.

Key audit matters

How our audit addressed the key audit matter

Measurement of government grant in respect of incentive under Gujarat Textile policy (the ‘Policy’) (as described in

note 2.4 of the standalone financial statements)

The Company is eligible to claim government grant in the form

We performed the following audit procedures, among others:

of reimbursement of State Goods and Service Tax (SGST) collected on products sold to the extent of the eligible capital

•

We obtained an understanding, evaluated the design

investments in plant and machinery for the specified period

and tested operating effectiveness of the controls

under the policy.

related to the government grants, including the controls

Further, there has also been an extension of eligibility period

in respect of measurement of the grants.

by one year with respect to claiming incentive which has been factored by the management for computation of government grant.

The estimates and judgements used by the management in the computation of government grants includes:

•

We analysed the forecast in respect of sales and purchase used by the management in computation of the government grant with respect to reimbursement of SGST.

We compared the forecast in respect to sales and

•

• Future sales growth rate;

purchase to the business plan and previous forecasts to

• Future product/sales mix and eligibility period;

the actual results.

• Input tax credit utilization;

•

We compared the eligible capital investments considered

• SGST rates on the products;

by the management with the amount sanctioned by the

• Eligible Capital Investments Limits

Considering the significance of the estimates and judgements

regulatory authority and with the maximum amount of claim which can be utilized over the eligibility period.

used by the management, we have determined this to be a

•

We analysed the inputs used in the computation of

key audit matter.

•

government grant as per the modalities to claim the reimbursement of SGST under the Policy.

We evaluated the basis of management estimates and judgements in respect of:

- Future sales growth rate;

- Future product/sales mix and eligibility period;

- Input tax credit utilization; and

- SGST rates on the products.

•

We tested the arithmetical accuracy of the computation of government grant.

Impairment of Investments (as described in note 2.23(f) of the standalone financial statements)

The Company has investment in subsidiaries of H 1,470.69 crores

We performed the following audit procedures, among others:

which are carried at cost. For investments where management identifies any impairment indicators, such investments are

•

We evaluated the inputs and assumptions underlying

tested for impairment using discounted cash-flow models by which recoverable value of each investment is compared to

management''s assessment of indicators of impairment for investments in subsidiaries.

the carrying value as at balance sheet date. A deficit between

•

We evaluated the forecast of future cash flows used

the recoverable value and the carrying value would result in impairment.

The Key inputs and assumptions used in the model are following:

•

by the management in the model to compute the recoverable value.

We compared the forecast of future cash flows to

business plan and previous forecasts to the actual results

• Sales growth rate;

and analysed results for material differences, if any.

• Operating margins (%);

•

We evaluated the basis of management assumptions in

• Pre-tax discount rate (%); and

respect of future sales growth rate, operating margins,

• Perpetuity growth rate (%)

perpetuity growth rate and discount rate used to

Considering the significant degree of management judgement

compute the recoverable value.

involved in the assumptions used for computation of the

•

We involved valuation specialists to assist in evaluating

recoverable amount, this is determined as key audit matter.

•

the key assumptions and methodologies used by the Company in computing the recoverable amount.

We tested the arithmetical accuracy of the management''s impairment testing model.

•

We read and assessed the relevant disclosures made in the standalone financial statements

Information Other than the Financial Statements and Auditor’s Report Thereon

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report but does not include the standalone financial statements and our auditor''s report thereon.

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

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management 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, 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) specified 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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 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.

Auditor’s 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:

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

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

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

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether

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

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

• For the Trust included in the standalone financial statements, which have been audited by other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.

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 standalone financial statements for the financial year ended March 31, 2023 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.

Other Matter

We did not audit the financial statements and other financial information of the Trust included in the accompanying standalone financial statements of the Company whose financial statements and other financial information reflect total assets of H 80.58 crores as at March 31, 2023 and the total revenues of H 0.09 crores and net cash inflow of H 0.01 crore for the year ended on that date. The financial statements / information of the Trust have been audited by the other auditor whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of the Trust, is based solely on the report of such other auditors. Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 (“the Order”), issued by the Central Government of India in terms of subsection (11) of section 143 of the Act, we give in the “Annexure 1” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. 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) I n 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 and;

(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

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

(e) On the basis of the written representations received from the directors as on March

31, 2023 taken on record by the Board of Directors, none of the directors 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 with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;

(g) In our opinion, the managerial remuneration for the year ended March 31, 2023 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to 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. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 30 to the standalone financial statements;

ii. The Company did not have any longterm contracts including derivative contracts for which there were any material foreseeable losses;

iii. There 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, as disclosed in note 46(5) 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 persons or entities, including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b) The management has represented that, to the best of its knowledge and belief, as disclosed in note 46(6) to the standalone financial statements, no funds have been received by the Company from any persons or entities, including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner

whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

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

v. The final dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.

As stated in note 27(b) to the standalone financial statements, 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 dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.

vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only w.e.f. April 1, 2023, reporting under this clause is not applicable.

For S R B C & CO LLP

Chartered Accountants ICAI Firm Registration Number: 324982E/E300003

per Anil Jobanputra

Partner

Membership Number: 110759 UDIN: 23110759BGVZRU4922 Place of Signature: Mumbai Date: April 27, 2023


Mar 31, 2021

Report on the Audit of the Standalone Financial StatementsOpinion

We have audited the accompanying standalone financial statements of Welspun India Limited (“the Company”), which comprise the Balance sheet as at March 31 2021, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.

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, as amended (“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, 2021, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s Responsibilities for the Audit of the Standalone Financial Statements'' section of our report. We are independent of the Company in accordance with the ''Code of Ethics'' issued by the Institute of Chartered Accountants of India together with the ethical requirements that are

relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

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 financial year ended March 31, 2021. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.

Key audit matters

How our audit addressed the key audit matter

Measurement of government grant in respect of incentive under Gujarat Textile policy (the ‘Policy’) (as

described in note 2.4 of the standalone financial statements)

The Company is eligible to claim government

We performed the following audit procedures, among others:

grant in the form of reimbursement of State Goods and Service Tax (SGST) collected on products sold to the extent of the eligible capital investments in plant and machinery for the specified period under the policy. During the current year, there has been a change in the product/sales mix, which has been factored by the management for computation of government grant.

The estimates and judgements used by

• We obtained an understanding, evaluated the design and tested operating effectiveness of the controls related to the government grants, including the controls in respect of measurement of the grants.

• We analysed the forecast in respect of sales and purchase used by the management in computation of the government grant with respect to reimbursement of SGST.

• We compared the forecast in respect to sales and purchase to the business plan and previous forecasts to the actual results.

the management in the computation of government grants includes:

• We compared the eligible capital investments considered by the management with the amount sanctioned by the

regulatory authority and with the maximum amount of claim which can be utilized over the eligibility period.

Key audit matters

How our audit addressed the key audit matter

• Future sales growth rate;

• We analysed the inputs used in the computation of

• Future product/sales mix and eligibility

government grant as per the modalities to claim the

period;

reimbursement of SGST under the Policy.

• Input tax credit utilization;

• We evaluated the basis of management estimates and

• SGST rates on the products;

judgements in respect of:

• Future sales growth rate;

Considering the significance of the

estimates and judgements used by the

• Future product/sales mix and eligibility period;

management, we have determined this to

• Input tax credit utilization; and

be a key audit matter.

• SGST rates on the products.

• We read the legal opinion obtained by the Company in respect of incentive under the policy.

• We tested the arithmetical accuracy of the computation of government grant.

Impairment of Investments (as described in note 2.22 (v) of the standalone financial statements)

The Company has investment in subsidiaries

We performed the following audit procedures, among others:

of '' 14,063.90 million which are carried at

• We evaluated the inputs and assumptions underlying

cost. For investments where management

management''s assessment of indicators of impairment for

identifies any impairment indicators, such investments are tested for impairment using

investments in subsidiaries.

discounted cash-flow models by which

• We evaluated the forecast of future cash flows used by

recoverable value of each investment is

the management in the model to compute the recoverable

compared to the carrying value as at balance

value.

sheet date. A deficit between the recoverable

• We compared the forecast of future cash flows to business

value and the carrying value would result in

plan and previous forecasts to the actual results and

impairment.

analyzed results for material differences, if any.

The Key inputs and assumptions used in the

• We evaluated the basis of management assumptions in

model are following:

respect of future sales growth rate, operating margins,

• Sales growth rate;

perpetuity growth rate and discount rate used to compute

the recoverable value.

• Operating margins (%);

• We involved valuation specialists to assist in evaluating the

• Pre-tax discount rate (%); and

key assumptions and methodologies used by the Company

• Perpetuity growth rate (%)

in computing the recoverable amount.

Considering the significant degree of

• We tested the arithmetical accuracy of the management''s

management judgement involved in the

impairment testing model.

assumptions used for computation of the

• We read and assessed the relevant disclosures made in the

recoverable amount, this is determined as key audit matter.

standalone financial statements

Measurement of Income Tax (as described in

note 2.5 of the standalone financial statements)

The measurement of the income tax charge

We performed the following audit procedures, among others:

for the year and corresponding balance as

• We obtained an understanding, evaluated the design and

at balance sheet date involves significant

tested the operating effectiveness of the controls related

estimates and judgements, as in respect to certain items / transactions tax treatment

to procurement and sales process.

cannot be finally determined until resolution

• We evaluated the basis of management assumptions in

has been reached with the relevant tax

respect of prices for sales and purchase of goods and services and measurement of deduction claimed under

authority or as appropriate through a formal legal process.

chapter VI A of the Income Tax Act, 1961.

The Company claims deduction under

• We involved tax experts to assist in evaluating the

Chapter VIA of the Income Tax Act, 1961.

measurement of income tax charge for the year including

The tax deduction computation involves

computation of deduction and evaluation of various tax

significant estimates and judgements in

positions and potential exposures.

respect of selling price of the products and

• We read and assessed disclosures made in the Standalone

purchase of goods and services from the vendors.

Due to the significance and materiality of the Chapter VIA deductions claimed by the Company and its impact on measurement of current income tax, this matter was considered significant to our audit.

financial statements.

Other Information

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone financial statements and our auditor''s report thereon.

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

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance 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, 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) specified 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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 is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Charged with Governance are also responsible for overseeing the Company''s financial reporting process.

Auditor’s 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:

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

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

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

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

conditions may cause the Company to cease to continue as a going concern.

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

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 standalone financial statements for the financial year ended March 31, 2021 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure 1” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. 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) I n 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 the Statement of Other Comprehensive Income, the Cash Flow Statement and 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 financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of the written representations received from the directors as on March 31, 2021 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2021 from being appointed as a director in terms of Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;

(g) In our opinion, the managerial remuneration for the year ended March 31, 2021 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to 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. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 31 to the standalone financial statements;

ii. The Company has long-term contracts as at March 31, 2021 for which there were no material foreseeable losses. The Company did not have any long term derivative contracts as at March 31, 2021;

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

For S R B C & CO LLP

Chartered Accountants ICAI Firm Registration Number: 324982E/E300003

per Vikas Kumar Pansari

Partner

Membership Number: 93649 UDIN: 21093649AAAABO9254

Place of Signature: Mumbai Date: May 14, 2021


Mar 31, 2019

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statements of Welspun India Limited (“the Company”), which comprise the Balance sheet as at March 31, 2019, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

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 Companies Act, 2013, as amended (“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, 2019, its profit including other comprehensive income its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

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

Emphasis of Matter

We draw attention to Note 25 of the Standalone Ind AS financial statements regarding the putative class action suits filed in the United States of America with respect to provenance of fibre and the exceptional costs recorded, in the Statement of Profit and Loss, on estimated basis, relating to the settlement of such putative class action suits, subject to court and other regulatory approvals. Our opinion is not modified in respect to this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements for the financial year ended March 31, 2019. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.

Key audit matters

How our audit addressed the key audit matter

Measurement of government grant in respect of incentive under Gujarat Textile policy (the ‘Policy’)

Under the Policy, the Company is eligible to claim gov

We performed following procedures, among others:

ernment grant in the form of reimbursement of State Goods and Service Tax (SGST) collected on end product sold /intermediate product to the extent of the eligible capital investments in plant and machinery for the specified period.

We obtained an understanding, evaluated the design and tested operating effectiveness of the controls related to the government grants, including the controls in respect of measurement of the grants.

As disclosed in note 2.23(vii) to the standalone financial statements, for measurement of such government grants, significant estimates and judgements are made by the management. The estimates, inputs and judgements used by the management includes:

We evaluated the forecast in respect of sales and purchase used by the management in computation of government grant with respect to reimbursement of SGST (‘computation’).

- Future sales growth rate;

-

We compared the forecast in respect to sales and purchase to the business plan and previous fore-

- Mix of inter and intra state purchases and Corre-

cast to the actual results.

sponding input credit;

-

We compared the inputs used in the computa-

- Input tax credit utilization;

tion of government grant to external data, includ-

- SGST rates on the products;

ing the modalities to claim the reimbursement of

SGST under the Policy.

- Period of eligibility.

-

We focused our analysis on management assump-

During the current year the authorities have issued the

tions in respect of:

modalities to claim reimbursement of SGST under the

- Future sales growth rate;

Policy, which has been factored by the management

for computation of government grant.

- Mix of inter and intra state purchases and Cor-

Considering the above, this is determined as key audit

responding input credit, and

matter.

- Input tax credit utilisation,

-

We evaluated the arithmetical accuracy of the computation of government grant.

Impairment of Investments

The Company has Non-current investment in subsid

For sample selected, we performed following proce-

iaries of Rs. 10,633.88 million which are carried at cost.

dures, among others:

These investments are tested for impairment using discounted cash-flow models by which recoverable value of each investment is compared to the carrying value as at balance sheet date. A deficit between the recov

-

We evaluated the forecast of future cash flows used by the management in the model to compute the recoverable value.

erable value and the carrying value would result in im

-

We compared the forecast of future cash flows to

pairment.

business plan and previous forecasts to the actual

The Key inputs and assumptions used in the model are following:

results and analyzed results for material differences, if any.

- Sales growth rate;

-

We compared the inputs in the model to internal and external data.

- Operating margins (%);

-

We focused our analysis on management assump

- Pre-tax discount rate (%); and

tions in respect of future sales growth rate, operat-

- Perpetuity growth rate (%)

ing margins, perpetuity growth rate and discount rate used to compute the recoverable value.

Considering the above, this is determined as key audit matter.

-

We involved valuation experts to assist in evaluat-

ing the key assumptions and methodologies used by the Company in computing the Recoverable amount.

-

We re-calculated estimates using management models.

Other Information

The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report but does not include the standalone Ind AS financial statements and our auditor’s report thereon.

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

In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the standalone Ind AS financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Standalone Ind AS 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 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) specified 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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.

In preparing the standalone Ind AS financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Charged with Governance are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind AS 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 Ind AS financial statements.

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

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

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

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

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

- Evaluate the overall presentation, structure and content of the standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS 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 standalone Ind AS financial statements for the financial year ended March 31, 2019 and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure 1” a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and 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 Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 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 with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2” to this report;

(g) In our opinion, the managerial remuneration for the year ended March 31, 2019 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to 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. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 31(a) to the standalone Ind AS financial statements;

ii. The Company has long-term contracts as at March 31, 2019 for which there were no material foreseeable losses. The company did not have any long derivative contracts as at March 31, 2019;

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

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company.

(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification. Inventories lying with third parties have substantially been confirmed by them and no material discrepancies were noticed in respect of such confirmations.

(iii) (a) The Company granted loan to a wholly owned subsidiary covered in the register maintained under section 189 of the Companies Act, 2013. In our opinion and according to the information and explanations given to us, the terms and conditions of the grant of such loans are not prejudicial to the Company’s interest.

(b) The Company granted loan to a wholly owned subsidiary covered in the register maintained under section 189 of the Companies Act, 2013. The schedule of repayment of principal and payment of interest for the loan granted has been stipulated. Before the end of stipulated term, the loan was converted into 8% Non-Cumulative Compulsorily Convertible Preference Shares on March 29, 2019 as per the terms of Memorandum of Understanding entered between the Company and the wholly owned subsidiary.

(c) There are no amounts of loans granted to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013 which are overdue for more than ninety days.

(iv) I n our opinion and according to the information and explanations given to us, there no loans, in respect of which provisions of section 185 of the Companies Act, 2013 are applicable and hence not commented upon. In our opinion and according to the information and explanation given to us, provisions of section 186 of the Companies Act 2013 in respect of in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacture of textile products, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) (a) Undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, there are no dues of service-tax, duty of customs and cess which have not been deposited on account of any dispute. The particulars of dues of income-tax, sales-tax, duty of excise and value added tax on account of any dispute, are as follows:

Name of the statute

Nature of the dues

Amount (Rs. in million) **

Period to which the amount relates

Forum where the dispute is pending

Income Tax Act, 1961

Income Tax Demand including penalty

491.36

AY 2005-06 to AY 2012-13

Income Tax Appellate Tribunal

484.12

AY 2013-14

CIT-(Appeals)

Gujarat Sales Tax Act, 1969

Sales Tax including penalty and interest

15.47

FY 2000-01, FY 2003-04, FY 200405

Jt. Comm. of Sales Tax (Appeals - 2), Vadodara

4.00

FY 2004-15

Jt. Comm. (Appeals), Rajkot

Central Excise Act, 1944

Excise Duty

17.07

Sep 2005 to July 2006

Joint Secretary, Ministry of Finance, Department of Revenue

429.11

Apr 2009 to Feb 2015

Comm. of Central Excise, Kutch

CENVAT Credit

0.12

May 2010 to Nov 2010, Feb 2010 to Nov 2010

Superintendent, Central Excise Vapi.

0.07

Mar 2011 to Jun 2011

Comm.-Appeal Daman

CENVAT including penalty

5.28

FY 2002-03 to FY 2005-06

Comm.-Appeals, Val-sad Commissioner-ate

30.96

Aug 2005 to Apr 2010

Comm. of Central Excise, Daman

0.69

FY 2008-09 -FY 2010-11, Dec 2010 to Oct 2011, Aug 2015 to Mar 2017

CESTAT Ahmedabad

0.21

Aug 2015

Dy. Comm., GST and Central Excise Divi-sion-Vapi

Maharashtra Value Added Tax, 2002

VAT including interest and penalty

0.15

FY 2010-11

Deputy Commissioner (Sales Tax)

**Net of amount paid under protest

(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to a financial institution or bank. The Company does not have any loan from Government. Further, the Company has not issued any debenture.

(ix) According to the information and explanations given by the management, the Company has not raised any money by way of initial public offer / further public offer / debt instruments and term loans hence, reporting under clause (ix) is not applicable to the Company and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the company or no fraud on the company by the officers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the company and, not commented upon.

(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Welspun India Limited (“the Company”) as of March 31, 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. 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 the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting with reference to these standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. 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 with reference to these standalone financial statements 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 over financial reporting with reference to these standalone financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls over financial reporting with reference to these standalone financial statements.

Meaning of Internal Financial Controls Over Financial Reporting With Reference to these Financial Statements

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

Inherent Limitations of Internal Financial Controls Over Financial Reporting With Reference to these Standalone Financial Statements

Because of the inherent limitations of internal financial controls over financial reporting with reference to these standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting with reference to these standalone financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these standalone financial statements 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, adequate internal financial controls over financial reporting with reference to these standalone financial statements and such internal financial controls over financial reporting with reference to these standalone financial statements were operating effectively as at March 31, 2019, 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 S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Anil Jobanputra

Place of Signature: Mumbai Partner

Date: May 24, 2019 Membership Number: 110759


Mar 31, 2018

Report on the Standalone Ind AS financial statements

We have audited the accompanying standalone Ind AS financial statements of Welspun India Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, 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 Standalone Ind AS financial statements

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

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as 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 auditor’s 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 Company’s 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 accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the 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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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, 2018, its profit and its cash flows for the year ended on that date.

Emphasis of Matter

a. Note 24(a) to the standalone Ind AS financial statements regarding the exceptional item accounting during the previous year towards provisions / liabilities for refund to the customers, inventory write-down, legal fees etc.

b. Note 24(b) to the standalone Ind AS financial statements regarding putative class action suits filed in USA against the Company and its subsidiary, Welspun USA Inc., by certain consumers who purchased the products manufactured by the Company.

Our opinion is not qualified in respect of above stated matters.

Other Matter

The Ind AS financial statements of the Company for the year ended March 31, 2017, included in these standalone Ind AS financial statements, have been audited by the predecessor auditor who expressed an unmodified opinion on those statements on April 25, 2017.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1, a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. 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 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 it appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and 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 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 written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;

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

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 30 to the standalone Ind AS financial statements;

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

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

ANNEXURE 1 REFERRED TO IN PARAGRAPH 1 OF THE SECTION ON “REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS” OF OUR REPORT OF EVEN DATE

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment/fixed assets are held in the name of the company.

(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification. In respect of inventories lying with third parties, these have substantially been confirmed by them and no material discrepancies were noticed in respect of such confirmations.

(iii) (a) The Company granted loan to a wholly owned subsidiary covered in the register maintained under section 189 of the Companies Act, 2013. In our opinion and according to the information and explanations given to us, the terms and conditions of the grant of such loans are not prejudicial to the company’s interest.

(b) The Company granted loan to a wholly owned subsidiary covered in the register maintained under section 189 of the Companies Act, 2013. The schedule of repayment of principal and payment of interest for the loan granted was stipulated. Before the end of stipulated term, the loan was converted to share application money and is pending allotment as at March 31, 2018.

(c) There are no amounts of loans granted to companies, Arms or other parties listed in the register maintained under section 189 of the Companies Act, 2013 which are overdue for more than ninety days.

(iv) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Companies Act, 2013 in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the company.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacture textile products, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) (a) Undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, there are no dues of service-tax, duty of customs and cess which have not been deposited on account of any dispute. The particulars of dues of income-tax, sales-tax, duty of excise and value added tax on account of any dispute, are as follows:

Name of the statute

Nature of the dues

Amount (Rs. in Million) **

Period to which the amount relates

Forum where the dispute is pending

Income Tax Act, 1961

Income Tax Demand including penalty

40.60

AY 2005-06 to AY 201213

Income Tax Appellate Tribunal

484.12

AY 2013-14

Commissioner of Income Tax ( Appeals)

Central Excise Act, 1944

Excise Duty

17.07

September 2005 to July 2006

Joint Secretary, Ministry of Finance, Department of Revenue

CENVAT including interest and penalty

1.29

Mar-05

Commissioner of Central Excise (Appeals), Rajkot

208.44

2004, 2007-08, 2008-10, 2010-2011, 2012

CESTAT, Ahmedabad

5.12

2002-03 to 2005-16

Commissioner Appeals, Valsad Commissionerate.

0.21

August 2015 to March 2017

Commissioner Appeal Daman

11.03

March 2005-Jan 2010

Additional Commissioner of Central Excise Daman.

29.77

August 2005 to April 2010

Commissioner of Central Excise, Daman

CENVAT

Credit

0.11

May-2010 to Nov 2010, Feb -2010 to Nov 2010

Superintendent, Central Excise Vapi.

0.07

March 2011 to June 2011

Commissioner Appeal Daman

Rebate under excise

0.21

April 2015

Commissioner Appeal Daman

Maharashtra Value Added Tax, 2002

Value added Tax including interest and penalty

0.15

2010-11

Deputy Commissioner (Sales Tax)

Gujarat Sales Tax Act, 1969

Sales Tax Including penalty and interest

15.47

2000-01, 2003-04, 2004-05

Joint Commissioner of Sales Tax ( Appeals - 2), Vadodara

**Net of amount paid under protest

(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to a financial institution or bank. The Company does not have any loan from Government. Further, the Company has not issued any debenture.

(ix) According to the information and explanations given by the management, the Company has not raised any money by way of initial public offer / further public offer / debt instruments and term loans hence, reporting under clause (ix) is not applicable to the Company and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the company or no fraud on the company by the officers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii)According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

(xiv)According to the information and explanations given to us and on an overall examination of the balance sheet, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the company and, not commented upon.

(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.

(xvi)According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Vikas Kumar Pansari

Partner

Membership Number: 93649

Place of Signature: Mumbai

Date: May 16, 2018


Mar 31, 2017

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

1. We have audited the accompanying standalone financial statements of Welspun India Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Ind AS Financial Statements

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

Auditors’ Responsibility

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

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

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

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors’ 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 Company’s 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 Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

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

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

9. We draw attention to the following matters relating to the traceability issue:

a. Note 24 (a) to the standalone financial statements regarding the exceptional item accounted during the quarter ended September 30, 2016 aggregating Rs.4,605.60 million, towards provisions/ liabilities for return of goods by the customers, refund to the customers, cost of rework, inventory write-down, legal fees and other related expenses, which aggregates Rs.1,076.60 million as at March 31, 2017 after certain agreements/ payments till the year end. The Company has reassessed this outstanding provision/ liability as at March 31, 2017 towards the aforesaid issue, and based on the present state of information and knowledge available with the Company, no significant additional provision is considered necessary by the Management. The amounts at which the various aforesaid provisions/ liabilities will eventually be resolved may be different based on future events and final payments/agreements reached with respective parties.

b. Note 24 (b) to the standalone financial statements regarding four putative class action suits filed in USA against the Company and its subsidiary, Welspun USA Inc., by certain consumers who purchased the products manufactured by the Company. In December 2016, these putative class actions suits were consolidated in one of the courts in USA and are proceeding as a single putative class action. A consolidated amended complaint was filed for the action during the quarter ended March 31, 2017 and, pursuant to stipulation of the parties and the court’s scheduling order, the parties have agreed to conduct mediation in a time-bound manner. As per the disclosure made by the Company to the relevant stock exchanges in India vide letter dated September 20, 2016 and subsequent representations to us, we understand that none of the actions has been certified for class action treatment by the courts, which is required under United States law before an action may proceed on a class basis. We also understand that while the amount in each putative class action matter is alleged to exceed $ 5 million, the complaints do not seek a specified amount of damages. Accordingly, as stated in the Note, any liability that may arise in the event of an adverse result or outcome is unascertainable at this stage.

Our opinion is not qualified in respect of matters stated in paragraphs 9 (a) and 9 (b) above.

Other Matter

10. The 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 previously issued statutory financial statements for the years ended March 31, 2016 and March 31, 2015 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by us, on which we expressed an unmodified opinion dated April 25, 2016 and April 29, 2015, respectively. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

(d) In our opinion, the aforesaid 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 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.

(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 Annexure A.

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

i. The Company has disclosed the impact of pending litigations as at March 31, 2017 on its financial position in its standalone Ind AS financial statements. Refer Note 30.

ii. The Company has long-term contracts as at March 31, 2017 for which there were no material foreseeable losses. The Company did not have any long term derivative contracts as at March 31, 2017.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2017.

iv. The Company has provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note 6 (e).

Annexure B to Independent Auditors’ Report

Referred to in paragraph 11 of the Independent Auditors’ Report of even date to the members of Welspun India Limited on the standalone financial statements as of and for the year ended March 31, 2017

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

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

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

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

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

iv. 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 Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it.

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

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

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employees’ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of service-tax, duty of customs and cess which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, duty of excise and value added tax as at March 31, 2017 which have not been deposited on account of a dispute, are as follows:

Name of the statute

Nature of dues

Amount (Rs. In million)*

Period to which the amount relates

Forum where the dispute is pending

Income Tax Act, 1961

Income Tax demand including interest

47.86

AY 2005-06 to AY 2011-12

Commissioner of Income Tax (Appeal)

Income Tax Act, 1961

Income Tax Demand

4.44

AY 2013-14

Assessing Officer

Gujarat Sales Tax Act, 1969

Sales Tax including penalty and interest

5.84

2000-01, 2003-04 and 2004-05

Joint Commissioner of Sales Tax (Appeals - 2), Vadodara

Central Excise Act, 1944

Excise Duty

17.07

September 2005 to July 2006

Joint Secretary, Ministry of Finance, Department of Revenue

Central Sales Tax Act, 1958

Central Sales Tax including penalty and interest

2.37

2006-07 to 2007-08

Joint Commissioner of Commercial Taxes, Rajkot

Gujarat Value Added Tax, 2003

Value added Tax including penalty and interest

21.05

2006-07 to 2007-08

Joint Commissioner of Commercial Taxes, Rajkot

Central Excise Act, 1944

CENVAT including penalty

185.41**

2007-08

Appellant Tribunal, Ahmedabad

Central Excise Act, 1944

CENVAT including penalty

1.29

March 2005

Joint Commissioner of Commercial Taxes, Rajkot

Central Excise Act, 1944

CENVAT

0.58

2008-2010 and 2010-2011

CESTAT, Ahmedabad

Central Excise Act, 1944

CENVAT

10.07

2004

CESTAT, Ahmedabad

Central Excise Act, 1944

CENVAT

0.99

2012

Commissioner Appeal, Daman.

Central Excise Act, 1944

CENVAT including penalty

2.48

2002-03 to 2005-06

Commissioner Appeals, Valsad Commissionerate.

Maharashtra Value Added Tax Act, 2002

Value added Tax including interest and penalty

11.43

2005-06

Deputy Commissioner (Sales Tax)

Central Sales Tax Act, 1958

Central Sales Tax including penalty and interest

7.52

2005-06

Deputy Commissioner (Sales Tax)

* Net of amount paid under protest.

**Stay order has been obtained.

viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank. The Company does not have any loans from Government. Further, the Company has not issued any debenture.

ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

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

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

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

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

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

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

For Price Waterhouse Chartered Accountants LLP

Firm Registration Number: 012754N/500016

Mehul Desai

Partner

Membership Number 103211

Mumbai

April 25, 2017


Mar 31, 2015

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

Management's Responsibility for the Standalone Financial Statements

2. The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and Accounting Standard 30, Financial Instruments: Recognition and Measurement issued by the Institute of Chartered Accountants of India to the extent it does not contradict any other accounting standard referred to in Section 133 of the Act read with Rule 7 of Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

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

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

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

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

Opinion

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

Emphasis of Matter

9. We draw your attention to Note 38, matter relating to utilisation of deferred tax assets recognised in earlier period aggregating Rs. 310.70 million on the incremental unabsorbed Income-tax depreciation arising out of the Company's treatment of certain excise and value added tax incentives as 'capital receipts' for income tax purposes. The income tax authorities have passed orders treating these incentives as revenue in nature which are liable to income-tax. The Company has preferred appeals with the Commissioner of Income Tax (Appeals) against these orders. If the final decision in the matter is eventually decided against the Company, the tax expense for the year ended March 31,2015 would be higher by Rs. 310.70 million. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

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

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

i) The Company has disclosed the impact of pending litigations as at March 31, 2015, on its financial position in its standalone financial statements.

ii) The Company has long-term contracts as at March 31, 2015 for which there were no material foreseeable losses. The Company does not have long-term derivative contracts as at March 31,2015.

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

Annexure to Independent Auditors' Report

Referred to in paragraph 10 of the Independent Auditors' Report of even date to the members of Welspun India Limited on the standalone financial statements as of and for the year ended March 31,2015

i. (a) The Company is maintaining proper records showing

full particulars, including quantitative details and situation, of fixed assets.

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

ii. (a) The inventory excluding stocks with third parties and material in transit has been physically verified by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

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

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

iv. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

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

vi. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been specified under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing undisputed statutory dues, including provident fund, employees' state insurance, sales tax, income tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of wealth-tax, service-tax, duty of custom and cess which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, duty of excise and value added tax as at March 31,2015 which have not been deposited on account of a dispute, are as follows.

Amount Name of the statute Nature of dues (Rs. in million)*

Income Tax demand Income Tax Act, 1961 157.00 including interest

Sales Tax including Gujarat Sales Tax Act, 1969 5.84 penalty and interest

Central Excise Act, 1944 Excise Duty 17.07 Central Sales Tax

Central Sales Tax Act, 1958 including penalty and 2.37 interest

Value added Tax Gujarat Value Added Tax, 20O3 including penalty and 21.05 interest

Central Excise Act, 1944 CENVAT 0.17

CENVAT including Central Excise Act, 1944 185.41** penalty

CENVAT including Central Excise Act, 1944 7.48 penalty

Central Excise Act, 1944 CENVAT 7.04

Central Excise Act, 1944 CENVAT 1.37

Central Excise Act, 1944 CENVAT 10.56

Central Excise Act, 1944 CENVAT 1.08

Value Added Tax Maharashtra VAT Act including interest and 11.43 penalty

Central Sales Tax

Central Sales Tax Act, 1958 including penalty and 7.52 interest



Name of the Statue Period to which the Forum where the amount dispute is pending relates

Income Tax Act, 1961 AY 2005-06 to Commissioner of Income AY 2011-12 Tax (Appeal)

Gujarat Sales Tax Act, 1969 Joint Commissioner of 2000-01,2003- Sales Tax (Appeals - 2), 04 and 2004-05 Vadodara

Joint Secretary, Ministry Central Excise Act, 1944 September 2005 of Finance, Department of to July 2006 Revenue

Central Sales Tax Act, 1958 2006-07 to 2007- Joint Commissioner of 08 Commercial Taxes, Rajkot

Gujarat Value Added Tax, 2003 2006-07 to 2007- Joint Commissioner of 08 Commercial Taxes, Rajkot

Central Excise Act, 1944 March 2010 to CESTAT, Ahmedabad August 2010

Central Excise Act, 1944 Appellant Tribunal, 2007-08 Ahmedabad

Central Excise Act, 1944 Joint Commissioner of March 2005 Commercial Taxes, Rajkot

Central Excise Act, 1944 October 2007 to Appellant Tribunal, March 2008 Ahmedabad

Central Excise Act, 1944 2008-2010 and CESTAT, Ahmedabad 2010-2011

Central Excise Act, 1944 2004 CESTAT, Ahmedabad

Central Excise Act, 1944 Commissioner Appeal, 2012 Daman.

Maharashtra VAT Act Deputy Commissioner 2005-06 (Sales Tax)

Central Sales Tax Act, 1958 Deputy Commissioner 2005-06 (Sales Tax)

* Net of amounts paid under protest ** Stay order has been obtained

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

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

ix. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the Balance Sheet date.

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

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

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

For Price Waterhouse Chartered Accountant LLP

Firm Registration Number 012574N/N500016

Mehul Desai

Partner

Membership No. 103211

Place: Mumbai

Date: April 29,2015


Mar 31, 2014

1. We have audited the accompanying financial statements of Welspun India Limited (the "Company"), which comprise the Balance Sheet as at March 31, 2014, and 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, which we have signed under reference to this report.

Management''s Responsibility for the Financial Statements

2. The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (the "Act") read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013and Accounting Standard 30, Financial Instruments: Recognition and Measurement issued by the Institute of Chartered Accountants of India to the extent it does not contradict any other accounting standard referred to in sub-section (3C) of Section 211 of 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

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

4. An audit involves performing procedures to obtain audit evidence, about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' 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 auditors consider internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.

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

6. In our opinion, and to the best of our information and according to the explanations given to us, the accompanying 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, 2014;

(b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

7. We draw your attention to:

a) Note 38, regarding utilization of deferred tax assets recognised in earlier period aggregating Rs. 310.70 million by the Company on the incremental unabsorbed Income-tax depreciation arising out of its treatment of certain excise and value added tax incentives as ''capital receipts'' for income tax purposes. The income tax authorities have passed orders treating these incentives as revenue in nature which are liable to income-tax. The Company has preferred appeals with the Commissioner of Income Tax (Appeals) against these orders. If the final decision in the matter is eventually decided against the Company, then the current tax expense for the year ended March 31, 2014 would be higher by Rs. 310.70 million with a consequential impact on profit after tax for the year.

b) Note 37,regarding re-assessment of the method of depreciation, based on which the Company has changed the method of depreciation on plant and machinery (other than electrical installations) from straight-line method to reducing balance method. Accordingly, on account of this change, depreciation and amortisation expense for the year is higher by Rs. 4,738.09 million and profit before tax for the year is lower by an equivalent amount, with a consequential impact on profit after tax for the year.

Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

8. As required by ''the Companies (Auditor''s Report) Order, 2003'', as amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004'', issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

9. 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, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and Accounting Standard 30, Financial Instruments: Recognition and Measurement issued by the Institute of Chartered Accountants of India to the extent it does not contradict any other accounting standard referred to in sub-section (3C) of Section 211 of the Act;

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

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

Referred to in paragraph 8 of the Independent Auditors'' Report of even date to the members of Welspun India Limited on the financial statements as of and for the year ended March 31, 2014

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

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

(c) In our opinion, and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

ii. (a) The inventory excluding stocks with third parties and material in transit, has been physically verified by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

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

iii. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Therefore, the provisions of Clause 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the said Order are not applicable to the Company.

(b) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Therefore, the provisions of Clause 4(iii)(f) and 4(iii)(g) of the said Order are not applicable to the Company.

iv. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. The Company''s operations for the year do not involve sale of services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. According to the information and explanations given to us, there have been no contracts or arrangements that need to be entered in the register maintained under Section 301 of the Act.

vi. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

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

viii. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of provident fund, sales tax, income tax and service tax, though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including investor education and protection fund, employees'' state insurance, wealth tax, customs duty, excise duty and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of wealth-tax, service-tax and customs duty which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax and excise duty as at March 31, 2014 which have not been deposited on account of a dispute, are as follows:

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

IncomeTax Act,1961 Income Tax 157.00 AY2005-06 to demand including AY 2011-12 interest

Gujarat Sales Tax Sales Tax including 5.84 2000-01,2003 Act, 1969 penalty and interest 04and 2004-05

Central Excise Act, Excise Duty 17.07 September 2005 1944 to July 2006 Central Sales Tax Central Sales Tax Act 1956 including penalty and 2.37 2006-07 to interest 2007-06 Gujarat Value Added Value added Tax including Tax, 20O3 penalty and interest 21.05 2006-07 to 2007-08 Central ExciseAct, 1944 CENVAT including penalty and interest 0.17 March 2010 to August 2010 Central Excise Act, CENVAT including 1944 penalty interest 185.41** 2007-08 Central ExciseAct CENVAT including 1944 penalty interest 7.48 March 2005 Central Excise Act, 1944 CENVAT 7.04 October 2007 to March 2008

Central Excise Act, CENVAT including 1944 penalty and interest 1.37 2008-2010and 2010-2011 Central Excise Act, CENVAT including 10.56 2004 1944 penalty and interest

Central Excise Act CENVAT including 1944 . penalty and interest 1.08 2012



Name of the statute form where the disputes is pending

IncomeTax Act,1961 Commissioner of income tax(appeal)

Gujarat Sales Tax Joint Commissioner of Sales (appeal-2) Act, 1969 vadodara

Central Excise Act, Joint Secretary, Ministry of Finance 1944 Department of Revenue Central Sales Tax Joint Commissioner of Commercial Taxes Act 1956 Rajkot Gujarat Value Added Joint Commissioner of Commercial Taxes Tax, 20O3 Rajkot Central ExciseAct, CESTAT,Ahmedabad 1944 Central Excise Act, Appellant Tribunal Ahmedabad 1944 Central ExciseAct Joint Commissioner of Commercial Taxes 1944 Rajkot Central Excise Act, Appellant Tribunal Ahmedabad 1944

Central Excise Act, CENVAT, Ahmedabad 1944 Central Excise Act, CENVAT, Ahmedabad 1944

Central Excise Act Commissioner Appeal 1944 . Daman.

* Net of amounts paid under protest ** Stay Order has been obtained

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

xi. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date. The Company has not issued any debenture.

xii. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Therefore, the provisions of Clause 4(xii) of the Order are not applicable to the Company.

xiii. As the provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to the Company, the provisions of Clause 4(xiii) of the Order are not applicable to the Company.

xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause 4(xiv) of the Order are not applicable to the Company.

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

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

xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the no funds raised on short-term basis have been used for long-term investment.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year. Accordingly, the provisions of Clause 4(xviii) of the Order are not applicable to the Company.

xix. The Company has not issued any debentures during the year and does not have any debentures outstanding as at the beginning of the year and at the year end. Accordingly, the provisions of Clause 4(xix) of the Order are not applicable to the Company.

xx. The Company has not raised any money by public issues during the year. Accordingly, the provisions of Clause 4(xx) of the Order are not applicable to the Company.

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



For Price Waterhouse Firm Registration Number: 012754N Chartered Accountants

Mehul Desai

Place : Mumbai Partner

Date : May 20, 2014 Membership Number: 103211


Mar 31, 2013

Report on the Financial Statements

1. We have audited the accompanying fnancial statements of Welspun India Limited (the "Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Proft and Loss and Cash Flow Statement for the year then ended, and a summary of signifcant accountng policies and other explanatory informaton, which we have signed under reference to this report.

Management''s Responsibility for the Financial Statements

2. The Company''s Managment is responsible for the preparaton of these fnancial statements that give a true and fair view of the fnancial positon, fnancial performance and cash fows of the Company in accordance with the Accountng Standards referred to in sub-secton (3C) of secton 211 of ''the Companies Act, 1956'' of India (the "Act"). This responsibility includes the design, implementaton and maintenance of internal control relevant to the preparaton and presentaton of the fnancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

3. Our responsibility is to express an opinion on these fnancial statements based on our audit. We conducted our audit in accordance with the Standards on Auditng issued by the Insttute 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 fnancial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence, about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the fnancial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Company''s preparaton and fair presentaton of the fnancial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluatng the appropriateness of accountng policies used and the reasonableness of the accountng estmates made by Management, as well as evaluatng the overall presentaton of the fnancial statements.

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

Opinion

6. In our opinion, and to the best of our informaton and according to the explanatons given to us, the accompanying fnancial statements give the informaton required by the Act in the manner so required and give a true and fair view in conformity with the accountng principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of afairs of the Company as at March 31, 2013;

(b) in the case of the Statement of Proft and Loss, of the proft for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash fows for the year ended on that date.

Emphasis of Mater

7. Without qualifying our opinion, we draw your atenton to:

(a) Note 36, regarding the recogniton of deferred tax assets aggregatng Rs. 296.58 million on the incremental unabsorbed Income-tax depreciaton by the company arising out of its treatment of certain excise and Value Added Tax incentves as ''capital receipts'' for income tax purposes. The income tax authorites have passed orders treatng these incentves as revenue in nature which are liable to income-tax. The Company has preferred appeals against these orders. If the fnal decision in the mater is eventually decided against the Company, then the carrying value of the Minimum Alternate Tax Credit Enttlement assets at the year-end could be signifcantly impacted.

(b) Note 39, regarding certain investments aggregatng Rs. 1,197.29 million made in the previous year without obtaining the prior approval of shareholders by a special resoluton passed in a general meetng as required by Secton 372A of the Act. The Company had fled an applicaton for compounding of the ofence with the Company Law Board and impact, if any, on the fnancial statements can be ascertained only on fnal adjudicaton of the said mater.

Report on Other Legal and Regulatory Requirements

8. As required by ''the Companies (Auditor''s Report) Order, 2003'', as amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004'', issued by the Central Government of India in terms of sub-secton (4A) of secton 227 of the Act (hereinafer referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the informaton and explanatons given to us, we give in the Annexure a statement on the maters specifed in paragraphs 4 and 5 of the Order.

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

(a) We have obtained all the informaton and explanatons 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 examinaton of those books;

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

(d) In our opinion, the Balance Sheet, Statement of Proft and Loss and Cash Flow Statement dealt with by this report comply with the Accountng Standards referred to in sub-secton (3C) of secton 211 of the Act;

(e) On the basis of writen representatons received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualifed as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-secton (1) of secton 274 of the Act.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

Referred to in paragraph 8 of the Independent Auditors'' Report of even date to the members of Welspun India Limited on the fnancial statements as of and for the year ended March 31, 2013

i. (a) The Company is maintaining proper records showing full partculars, including quanttatve details and situaton, of fxed assets.

(b) The fxed assets of the Company have been physically verifed by the Management during the year and no material discrepancies have been notced on such verifcaton. In our opinion, the frequency of verifcaton is reasonable.

(c) In our opinion, and according to the informaton and explanatons given to us, a substantal part of fxed assets has not been disposed of by the Company during the year.

ii. (a) The inventory, excluding stocks with third partes and material in transit, has been physically verifed by the Management during the year. In respect of inventory lying with third partes, these have substantally been confrmed by them. In our opinion, the frequency of verifcaton is reasonable.

(b) In our opinion, the procedures of physical verifcaton of inventory followed by the Management are reasonable and adequate in relaton to the size of the Company and the nature of its business.

(c) On the basis of our examinaton of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies notced on physical verifcaton of inventory as compared to book records were not material.

iii. (a) The Company has not granted any loans, secured or unsecured, to companies, frms or other partes covered in the register maintained under Secton 301 of the Act. Therefore, the provisions of Clause 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the said Order are not applicable to the Company.

(b) The Company has not taken any loans, secured or unsecured, from companies, frms or other partes covered in the register maintained under Secton 301 of the Act. Therefore, the provisions of Clause 4(iii)(f) and 4(iii)(g) of the said Order are not applicable to the Company.

iv. In our opinion, and according to the informaton and explanatons given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fxed assets and for the sale of goods. The company''s operatons do not involve sale of services. Further, on the basis of our examinaton of the books and records of the Company, and according to the informaton and explanatons given to us, we have neither come across, nor have been informed of, any contnuing failure to correct major weaknesses in the aforesaid internal control system.

v. According to the informaton and explanatons given to us, there have been no contracts or arrangements that need to be entered in the register maintained under Secton 301 of the Act.

vi. The Company has not accepted any deposits from the public within the meaning of Sectons 58A and 58AA of the Act and the rules framed there under.

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

viii. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-secton (1) of Secton 209 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examinaton of the records with a view to determine whether they are accurate or complete.

ix. (a) According to the informaton and explanatons given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositng the undisputed statutory dues in respect of sales-tax though there has been slight delay in a few cases and is regular in depositng undisputed statutory dues, including provident fund, investor educaton and protecton fund, employees'' state insurance, income-tax, service-tax, wealth tax, customs duty, excise duty and other material statutory dues, as applicable, with the appropriate authorites.

(b) According to the informaton and explanatons given to us and the records of the Company examined by us, there are no dues of wealth-tax, service-tax, and customs duty which have not been deposited on account of any dispute. The partculars of dues of income-tax, sales-tax and excise duty as at March 31, 2013 which have not been deposited on account of dispute are as follows :

Amount (Rs. in Name of the statute Nature of dues million)*

Income tax demand Income Tax Act, 1961 305 70 including interest

Gujarat Sales Tax Act, Sales Tax including 11 69 1969 penalty and interest

Central Excise Act, 1944 Excise Duty 69.57

Central Sales Tax Central Sales Tax Act, including penalty and 2 54 1956 interest

Value added Tax Gujarat Value Added Including penalty and 21 05 Tax, 2003 interest CENVAT including Central Excise Act, 1944 0 41 penalty and interest

CENVAT including Central Excise Act, 1944 185 41** penalty and interest

CENVAT including Central Excise Act, 1944 318 58** penalty and interest

Name Period to which the Forum where the amount relates dispute is pending

Income tax demand AY 2005-06 to Commissioner of AY 2011-12 Income Tax (Appeal)

Income tax demand 2000-01, Joint Commissioner of 2003-04 and Sales Tax (Appeals - 2), 2004-05 Vadodara

Income tax demand September 2005 Joint Secretary, Ministry to of Finance, Department July 2006 of Revenue

Joint Commissioner 2006-07 to 2007-08 of Commercial Taxes, Rajkot

Joint Commissioner 2006-07 to 2007-08 of Commercial Taxes, Rajkot Commissioner March 2010 to of Central Excise August 2010 (Appeals), Daman

Income tax demand Appellant Tribunal, 2007-08 Ahmadabad

Commissioner February 2006 to of Central Excise September 2007 (Appeals), Rajkot

* Net of amounts paid under protest ** Stay Order has been obtained

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

xi. According to the records of the Company examined by us and the informaton and explanaton given to us, the Company has not defaulted in repayment of dues to any fnancial insttuton or bank as at the balance sheet date. The Company has not issued any debenture.

xii. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securites. Therefore, the provisions of Clause 4(xii) of the Order are not applicable to the Company.

xiii. As the provisions of any special statute applicable to chit fund/ nidhi/ mutual beneft fund/ societes are not applicable to the Company, the provisions of Clause 4(xiii) of the Order are not applicable to the Company.

xiv. In our opinion, the Company is not dealing in or trading in shares, securites, debentures and other investments. Accordingly, the provisions of Clause 4(xiv) of the Order are not applicable to the Company.

xv. In our opinion, and according to the informaton and explanatons given to us, the terms and conditons of the guarantees given by the Company for loans taken by others from banks or fnancial insttutons during the year, are not prejudicial to the interest of the Company.

xvi. In our opinion, and according to the informaton and explanatons given to us, the term loans have been applied for the purposes for which they were obtained.

xvii. According to the informaton and explanatons given to us and on an overall examinaton of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

xviii. The Company has not made any preferental allotment of shares to partes and companies covered in the register maintained under Secton 301 of the Act during the year. Accordingly, the provisions of Clause 4(xviii) of the Order are not applicable to the Company.

xix. The Company has not issued any debentures during the year and does not have any debentures outstanding as at the beginning of the year and at the year end. Accordingly, the provisions of Clause 4(xix) of the Order are not applicable to the Company.

xx. The Company has not raised any money by public issues during the year. Accordingly, the provisions of Clause 4(xx) of the Order are not applicable to the Company.

xxi. During the course of our examinaton of the books and records of the Company, carried out in accordance with the generally accepted auditng practces in India, and according to the informaton and explanatons given to us, we have neither come across any instance of material fraud on or by the Company, notced or reported during the year, nor have we been informed of any such case by the Management.

For Price Waterhouse Firm Registraton Number: 012754N

Chartered Accountants

Mehul Desai

Place : Mumbai Partner

Date : May 15, 2013 Membership Number: 103211


Mar 31, 2011

1. We have audited the attached Balance Sheet of Welspun India Limited (the "Company") as at March 31, 2011, and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free 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 signifcant estimates made by Management, as well as evaluating the overall financial statement presentaton. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 (together the "Order"), issued by the Central Government of India in terms of sub-secton (4A) of Secton 227 of ‘The Companies Act, 1956' of India (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 Annexure a statement on the maters specified in paragraphs 4 and 5 of the Order.

4. We draw your attention to Note 7(b) to the financial statements, regarding the accounts receivables balance of Rs. 696.02 million (March 31, 2010: Rs. 475.93 million) that is due from Welspun Retail Limited ("WRL"), a group company, as at March 31, 2011, in relaton to which no valuaton allowance has been estimated and adjusted in these financial statements which, in our view, does not meet the requirement to consider prudence in selecton of accounting policies, as set out in Accounting Standard 1 – Disclosure of Accounting Policies, as WRL has been incurring significant losses (Rs.199.73 million for the year ended March 31, 2011 and Rs. 1,205.96 million as at March 31, 2011 basis its audited financial statements as of and for the year ended March 31, 2011) and has also been unable to achieve its projected financial results in the previous and current financial reporting periods.

5. Without qualifying our opinion, we draw your atention to:

(a) Note 8 on Schedule 19, regarding the Company's dependence on Welspun Global Brands Limited (‘WGBL') and WRL for selling its products consequent to the demerger of the marketing arm of the Company efective April 1, 2009. If the arrangement between the Company, WGBL and WRL are discontinued, the business of the Company could be adversely impacted.

(b) Note 9 on Schedule 19, regarding corporate guarantees, aggregating Rs. 3,593 million at the year end, issued consequent to the demerger of the marketing arm of the Company referred to in paragraph 5 (a) above, to the bankers of WGBL in relation to the debt facilities provided by them to WGBL, and other corporate guarantees disclosed in Note 3 on Schedule 19, aggregating Rs. 5,145.52 million at the year end, issued on behalf of WGBL, Welspun USA Inc. (‘WUSA'), Welspun Captive Power Generaton Limited (WCPGL), Welspun Mexico SA de CV (WELMEX) and Welspun Home Textiles UK limited (‘WHTL'). If WGBL, WUSA, WCPGL and WHTL are unable to meet their obligation as they fall due, the financial conditon and cash flows of the Company could be adversely impacted.

(c) Note 4 on Schedule 19, regarding the recognition of deferred tax assets during the year, aggregating Rs. 303.64 million, on the incremental unabsorbed Income-tax depreciation arising out of its treatment of certain excise and Value Added Tax incentives as ‘capital receipts' for income tax purposes based on the judgement in re Commissioner of Income Tax, Mumbai v/s. Reliance Industries Limited of the Honourable High Court of Judicature at Bombay. However, this case has not attained finality as the judgement has been challenged by the tax authorities in the apex court. If the final decision in the mater is eventually decided against the Company, then the carrying value of the deferred tax assets at the period end could be significantly impacted.

6. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(a) Except for the indeterminate effects of the mater referred to paragraph 4 above, we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit;

(b) In our opinion, except for the indeterminate effects of the mater referred to paragraph 4 above, 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, except for the mater referred to paragraph 4 above, the Balance Sheet, Proft and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub- section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on March 31, 2011 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-secton (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, except for the indeterminate effects of the mater referred to in paragraph 4 above, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act, 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 March 31, 2011;

(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 flows for the year ended on that date.

ANNEXURE TO AUDITORS' REPORT

Referred to in paragraph 3 of the Auditors' Report of even date to the members of Welspun India Limited on the financial statements for the year ended March 31, 2011

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

(b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

2. (a) The inventory (excluding stocks with third partes) has been physically verified by the Management during the year. In respect of inventory lying with third partes, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

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

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other partes covered in the register maintained under Section 301 of the Act.

(b) The Company has not taken any loans, secured or unsecured, from companies, firms or other partes covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, no major weakness have been noticed or reported.

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

(b) In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year, which have been made at prices which are not reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

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

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-secton (1) of Secton 209 of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of sales-tax and excise duty as at March 31, 2011 which have not been deposited on account of any dispute, are as follows:

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

Gujarat Sales Sales Tax 10.52 2000-01,2003-04 Tax Act, 1969 including penalty and 2004-05 and interest

Central Excise Excise Duty 1.31 March 2004 to July Act, 1944 including penalty 2006 and interest

Central Excise Excise Duty 69.57 September 2005 Act, 1944 to July 2006



Name of the Forum where the Statute dispute is pending

Gujarat Sales Joint Commissioner Tax Act, 1969 of Sales Tax (Appeals - 2), Vadodara

Central Excise Commissioner of Act, 1944 Central Excise and Custom (Appeals), Daman

Central Excise Joint Secretary, Act, 1944 Ministry of Finance, Department of Revenue

* Net of amounts paid under protest

10. The Company has no accumulated losses as at March 31, 2011 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the Balance Sheet date.

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

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/ societies are not applicable to the Company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

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

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

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short term basis which have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to partes and companies covered in the register maintained under Section 301 of the Act during the year.

19. The Company has not issued any debentures during the year.

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

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

For Price Waterhouse & Co.

Firm Registraton Number: 007567S Chartered Accountants

Neeraj Gupta Partner Membership Number F055158

Place: Mumbai Date: May 30, 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of Welspun India Limited (the "Company") as at March 31, 2010, and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free 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.

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (together the "Order"), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of India (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 Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Without qualifying our opinion, we draw your attention to:

(a) Note 8 (a) on Schedule 19, regarding the year end investments of Rs. 739.12 million in, loans of Rs. 476.57 million to, and other receivables of Rs. 42 million due from Welspun AG, a wholly owned subsidiary whose net-worth has been completely eroded, for which no provisions have been made in these financial statements for the reasons stated therein which, however, are susceptible to inherent uncertainties around the performance of Welspun AG in the environment in which it operates. If Welspun AG does not achieve its projected financial results, the carrying value of investments in, loans to and other receivable from, Welspun AG at the year end could be significantly impacted.

(b) Note 8 (b) on Schedule 19, regarding the year-end receivables of Rs. 475.93 million due from Welspun Retail Limited (WRL), a related company which has incurred significant losses up to the year-end, for which no provisions have been made in these financial statements for the reasons stated therein which, however, are susceptible to inherent uncertainties around the performance of WRL in the environment in which it operates. If WRL does not achieve its projected financial results, the receivable from WRL at the year end could be significantly impacted.

(c) Note 9 (d) on Schedule 19, regarding the Companys dependence on Welspun Global Brands Limited (WGBL) and WRL for selling its products consequent to the demerger of the marketing and investment and treasury arms of the Company effective April 1, 2009 as described in Note 9 (a) and 9(b) on Schedule 19. If the arrangement between the Company, WGBL and WRL are discontinued, the business of the Company could be adversely impacted.

(d) Notes 9 (e) and 3 on Schedule 19, regarding corporate guarantees, aggregating Rs. 3,593 million at the year end,

issued consequent to the demerger of the marketing and investment and treasury arms of the Company referred to in paragraph 4 (c) above, to the bankers of WGBL in relation to the debt facilities provided by them to WGBL, and other corporate guarantees disclosed in Note 3 on Schedule 9, aggregating Rs. 2,084.8 million at the year end, issued on behalf of WGBL, Welspun USA Inc. (WUSA) and Welspun Home Textiles UK limited (WHTL). If WGBL, WUSA and WHTL are unable to meet their obligation as they fall due, the financial condition and cash flows of the Company could be adversely impacted.

5. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

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

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

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

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

(e) On the basis of written representations received from the directors, as on March 31, 2010 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act, 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 March 31, 2010;

(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO AUDITORS REPORT Referred to in paragraph 3 of the Auditors Report of even date to the members of Welspun India Limited on the financial statements for the year ended March 31, 2010

1.(a) The Company is maintaining proper records showing full particul -ars, including quantitative details and situation, of fixed assets.

(b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

(c) In our opinion and according to the information and explanations given to us, a substantial part of Fixed assets has not been disposed of by the Company during the year.

2. (a) The inventory (excluding stocks with third parties) has been physically verified by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

(c) On the basis of our examination of the inventory records, in our opinion, the Company has maintained proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) The Company has not taken any loans, secured or unsecured, from companies, firms or other Parties covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, no major weakness have been noticed or reported.

5. According to the information and explanations given to us, there have been no contracts or arrangements referred to in Section 301 of the Act during the year to be entered in the register required to be maintained under that Section. Accordingly, the question of commenting on transactions made in pursuance of such contracts or arrangements does not arise.

6. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

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

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

Referred to in paragraph 3 of the Auditors Report of even date to the members of Welspun India Limited on the financial statements for the year ended March 31, 2010

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth tax, service tax, customs Duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of sales-tax, excise duty and service tax as at March 31, 2010 which have not been deposited on account of any dispute, are as follows:

Name of the Nature of dues Amounts

Statute (Rs. In million)*

Gujarat Sales Tax Sales Tax 9.44

Act, 1969 including penalty

and interest

Central Excise Act, Excise Duty 1.21

1944 including penalty

and interest

Central Excise Act, Excise Duty 69.28

1944

Central Excise Act, Service Tax 0.16

1944

Name of the Statute Period to which Forum where the

the amount relates dispute is pending

Gujarat Sales Tax 2001-02, 2003-04 Joint Act,1969 and 2004-05 Commissioner of

Sales Tax , Vadodara



Central Excise Act, March 2004 to July Commissioner of

1944 2006 Central Excise and

Custom (Appeals), Daman Central Excise Act, September 2005 Joint Secretary,

1944 to July 2006 Ministry of

Finance, Department of Revenue Central Excise Act, April 2004 to May Commissioner of

1944 2005 Central Excise and Custom (Appeals)



10. The Company has no accumulated losses as at March 31, 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

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

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/ societies are not applicable to the Company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

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

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

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short term basis which have been used for long- term investment.

Referred to in paragraph 3 of the Auditors Report of even date to the members of Welspun India Limited on the financial statements for the year ended March 31, 2010

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. The Company has not issued any debentures during the year.

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

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



For Price Waterhouse & Co.

Firm Registration Number: 007567S

Chartered Accountants

Neeraj Gupta

Partner Membership Number F055158

Place: Mumbai

Date: May 12, 2010

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