1.  We have audited the attached Balance Sheet of Welspun Corp Limited
 (the Company) as at 31 March 2011 and also the profit and Loss
 account and the Cash Flow Statement for the year ended on that date,
 annexed thereto. These financial statements are the responsibility of
 the Company''s management. Our responsibility is to express an opinion
 on these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with the auditing standards
 generally accepted in India. Those standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the 
 financial statements are free from material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and signif cant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors'' Report) Order, 2003 issued
 by the Central Government of India in terms of Section 227(4A) of the
 Companies Act, 1956 (the Act), and on the basis of such checks as we
 considered appropriate and according to the information and
 explanations given to us, we annex hereto a statement on the matters
 specif ed in paragraph 4 and 5 of the said order.
 
 4.  Further to our comments in the Annexure referred to in Paragraph
 (3) above, we report that:
 
 (a) We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 (b) In our opinion, proper books of account as required by law have
 been kept by the Company, so far as appears from our examination of
 those books;
 
 (c) The Balance Sheet, the profit and Loss account and the Cash Flow
 statement dealt with by this report are in agreement with the books of
 account;
 
 (d) In our opinion, the Balance Sheet, the profit and Loss account and
 the Cash Flow statement dealt with by this report comply with the
 accounting standards referred to in Section 211 (3C) of the Act;
 
 (e) On the basis of written representations received from the Directors
 and taken on record by the Board, we report that none of the directors
 is disqualif ed as at 31 March 2011 from being appointed as a director
 in terms of clause (g) of sub-section (1) of Section 274 of the Act;
 
 (f ) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read with the signif
 -icant accounting policies and notes to accounts as per Schedule 18, give
 the information required by the Act in the manner so required and give
 a true and fair view in conformity with the accounting principles
 generally accepted in India:
 
 i) In the case of the Balance Sheet, of the state of affairs of the
 Company as at 31 March 2011;
 
 ii) In the case of the profit and Loss account, of the profit for the
 year ended on that date; and
 
 iii) In the case of the Cash Flow statement, of the cash flows for the
 year ended on that date.
 
 Annexure referred to in paragraph 3 of Auditors'' Report to the members
 of Welspun Corp Limited on the accounts for the year ended 31 March
 2011
 
 (i) (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of its fixed
 assets.
 
 (b) The company has a regular program of physical verification of its 
 fixed assets by which all fixed assets are verified in a phased manner
 over a period of three years. In our opinion, this periodicity of the
 physical verification is reasonable having regard to the size of the
 Company and the nature of its assets. As informed, no material
 discrepancies were noticed on such verification.
 
 (c) During the year, there was no disposal of substantial part of fixed
 assets.
 
 (ii) (a) The inventories have been physically verified by the
 management during the year except stock lying with third parties in
 respect of whom confirmations have been obtained. In our opinion, the
 frequency of verification is reasonable.
 
 (b) In our opinion, the procedures of physical verification of
 inventories followed by the management are reasonable and adequate in
 relation to the size of the Company and the nature of its business.
 
 (c) As explained to us, the Company has maintained proper records of
 inventories and no material discrepancies were noticed on physical
 verification of inventories as compared to the book records.
 
 (iii) (a) According to the information and explanations given to us,
 the Company has not granted any loans, secured or unsecured to
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act.
 
 (b) According to the information and explanations given to us, the
 Company has not taken any loans, secured or unsecured from companies, 
 firms or other parties covered in the register maintained under section
 301 of the Act.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there is adequate internal control system commensurate
 with the size of the Company and the nature of its business with regard
 to purchases of inventor y, fixed assets and sale of goods and
 services. We have not observed any continuing failure to correct major
 weaknesses in internal controls system of the Company.
 
 (v) According to the information and explanations given to us, there
 are no contracts or arrangements the particulars of which are required
 to be entered into the register in pursuance of section 301 of the Act.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the Company has not accepted any deposits from the public
 during the year.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii)On the basis of records produced, we are of the opinion that
 prima facie cost accounting records prescribed by the Central
 Government under section 209 (1) (d) of the Act, in respect of
 activities carried on by the Company covered under the rules under that
 section, have been maintained. However, we are neither required to
 carry out nor have carried out any detailed examination of such
 accounting records.
 
 (ix) According to the records of the Company examined by us and
 information and explanations given to us:
 
 (a) Undisputed statutory dues, including Provident Fund, Investor
 Education and Protection Fund, Employees State Insurance, Income Tax,
 Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty,
 Cess and any other material statutory dues to the extent applicable
 have been deposited regularly with the appropriate authorities except
 for delays in few cases. There are no undisputed amounts payable in
 respect of the aforesaid dues outstanding as at March 31, 2011 for a
 period of more than six months from the date they became payable.
 
 (b) According to the records of the Company, the dues outstanding of
 Sales Tax, Service Tax and Excise Duty which have not been deposited
 are as under:
 
 Name of the 
 Statute                     Amount                 Period to which
 (Nature of dues)       (Rs. in million)           the amount relates
 
 Sales Tax                   12.05                 2000-01 to 2006-07
 
                             22.23                 2001-02, 2005-06
                                                   & 2006-07
 
                            368.75                 2009-10 & 2010-11
 
 The Central Excise 
 Act, 1944
 
 -  Excise Duty              13.23                 2003-04, 2008-09
                                                   & 2009-10
 
                             28.25                 2006-07, 2007-08
                                                   & 2010-11
 
                             20.60                 2007-2008 & 2009-10
 
 - Service Tax               77.39                 2004-05 to 2006-07
                                                   & 2009-10
    
                             99.43                 2005-06 to 2010-2011
 
                             30.76                 2007-09
 
                             22.71                 2007-08 to 2009-2010
 
                             21.24                 2004-05, 2006-07,
                                                   2008-09 to 2010-11
 
 
 
 Name of the Statue           Forum where dispute is pending
 
 
 Sales Tax                    Sales Tax Tribunal
 
                              Joint Commissioner of Sales Tax
                              (Appeals)
 
                              Assessment stage
 
 
 The Central Excise Act, 1944
 
 -  Excise Duty               Commissioner/Additional
                              commissioner of Central Excise
                              and Customs
 
                              Commissioner of Central Excise
                              and Customs (Appeals)
 
                              Deputy/Assistant Commissioner of
                              Central Excise and Customs
 
 - Service Tax                Custom Excise and Service Tax
                              Appellate Tribunal, Ahmedabad
 
                              Commissioner/Additional
                              Commissioner of Central Excise
                              and Customs
 
                              Commissioner of Central Excise
                              and Customs (Appeals)
 
                              Deputy Commissioner of Central
                              Excise and Customs
 
                              Superintendent of Central Excise
                              and Customs
 
 (x) The Company does not have accumulated losses at the end of the
 financial year and has not incurred any cash losses in the current 
 financial year and in the immediately preceeding financial year.
 
 (xi) Based on our audit procedures and as per the information and
 explanations given, we are of the opinion that the company has not
 defaulted in repayment of dues to banks and debenture holders during
 the year.
 
 (xii) The Company has not granted any loans and advances on the basis
 of security by way of pledge of shares, debentures and other
 securities.
 
 (xiii) The Company is not a chit fund or a nidhi / mutual benefit fund
 / society.
 
 (xiv) The Company is not dealing or trading in securities, debentures
 and other investments.
 
 (xv) In our opinion and according to the information and explanations
 given to us, the terms and conditions on which the Company has given
 guarantees for loans taken by subsidiaries and others from banks and f
 nancial institutions are prima facie not prejudical to the interest of
 the Company.
 
 (xvi) The Company has not raised any term loan during the year.
 
 (xvii) On the basis of review of utilization of funds which is based on
 an overall examination of the Balance Sheet of the Company and related
 information as made available to us, we report that funds raised on
 short term basis have not been used for long term investments.
 
 (xviii) During the year, the Company has not made any preferential
 allotment of shares to the parties covered in the register maintained
 under section 301 of the Act.
 
 (xix) The Company has created adequate security in respect of
 debentures issued.
 
 (xx) The Company has not raised any money by way of pubic issue during
 the year. However, funds raised on issue of Foreign Currency
 Convertible Bonds (FCCB) have been utilised for the purpose for which
 they were raised except pending utilization have been invested in short
 term deposits/current account with Banks as referred in Note 1(c).
 
 (xxi) Based on our audit procedures performed and according to the
 information and explanations given by the management, no fraud on or by
 the Company has been noticed or reported during the course of our
 audit.
 
 For MGB & Co.  
 Chartered Accountants 
 Registration No. 101169W
 
 Jeenendra Bhandari 
 Partner
 
 Membership No. 105077
 
 Mumbai, 26 May 2011