Annual Report FY 2009-10 - Welspun

th15 Annual Report 2009-1027. The Board of the Company had approved the Scheme of Arrangement in the nature of demerger and transfer of Plate and Coil MillDivision of the Company to its then wholly owned subsidiary viz. Welspun Steel Plates and Coil Mills Private Limited (the“Scheme”). Due to change in the circumstances since then, in the opinion of the management, going ahead with the Schemewould not be in the overall interest of the Company. Hence, it was decided not to pursue the Scheme and accordingly the schemewas withdrawn. The High Court of Gujarat vide its order dated 10 March 2010 has given its approval to the withdrawal ofDemerger Scheme filed u/s 391 to 394 of the Companies Act.28. The Company has been getting majority of the export orders and executing those orders through one of the related party whichbecame its Subsidiary (w.e.f. 31 March 2010). The realization, income/ benefits, claims or expenses relating to such transactionsare transferred/ paid immediately to the Company allowing it a small profit margin of about 0.5% of Sales.29. Welspun Infratech Limited (the “Acquirer”) a wholly owned subsidiary of the Company has entered in to Share PurchaseAgreement with the existing promoters and other shareholders of MSK Projects (India) Limited. (a company engaged ininfrastructure development and listed on Bombay Stock Exchange., National Stock of Exchange of India. and Vadodara StockExchange) (the “Target Company”) to transfer 5,279,438 equity shares (23.13%) of the Target Company at a price of Rs. 130.50 pershare and also entered into a Share Subscription Agreement to subscribe to 17,178,888 equity shares of the Target Company at anissue price of Rs. 123 per share and consequently has made a public announcement to the existing shareholders of the TargetCompany to acquire 20% of post preferential issue equity share capital of the Target Company at a price of Rs. 130.50 per share.Upon completion of the offer, assuming full acceptances in the offer, the Acquirer will hold 30,458,326 equity shares (76.15%) andassuming “Nil” acceptances in the offer, the Acquirer will hold 22,458,326 equity shares (56.15%) of the post preferential issueequity share capital of the Target Company.30. Sundry Creditors include an amount of Rs. 214.59 million being VAT collected on Sales. The Company has withheld the amount onits claim for set off against VAT incentive limit. If claim of the Company is not accepted, the amount will be paid and contested inappeal.31. Sales is net off bad debts of Rs. 134 million.32. The members of the Company have approved change of name to "Welspun Corp Limited" and the Company has received thecertificate dated 27 April 2010 towards change of name from Registrar of Companies, Gujarat.SIGNATURES TO SCHEDULES 1 TO 18As per our attached report of even date For and on behalf of the BoardFor MGB & Co. B.K.GoenkaChartered Accountants Chairman and Managing DirectorM.L.MittalExecutive Director FinanceMohan BhandariPartnerB.R.JajuChief Financial OfficerPradeep JoshiCompany SecretaryMumbai, 27 April 2010104