Annual Report FY 2009-10 - Welspun

C rp LtdAnnexure referred to in paragraph 3 of Auditors' Report to the members of Welspun Corp Limited (Formerly Welspun Gujarat StahlRohren Limited) on the accounts for the year ended 31 March 2010(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixedassets.(b)(c)According to the information and explanations given to us, the fixed assets have been physically verified by the managementin a phased program periodical manner at reasonable intervals, which in our opinion is reasonable having regard to the size ofthe Company and the nature of its assets. No material discrepancies were noticed on such verification.In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concernstatus of the Company is not affected.(ii) (a) The inventories have been physically verified by the management during the year except stock lying with third parties inrespect of which confirmations have been obtained. In our opinion, the frequency of verification is reasonable.(b)(c)In our opinion, the procedures of physical verification of inventories followed by the management are reasonable andadequate in relation to the size of the Company and the nature of its business.As explained to us, the Company has maintained proper records of inventories and no material discrepancies were noticed onphysical verification of inventories as compared to the book records.(iii) (a)(b)According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured tocompanies, firms or other parties covered in the register maintained under Section 301 of the Act.According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured fromcompanies, firms or other parties covered in the register maintained under Section 301 of the Act.(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control systemcommensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets andfor sale of goods and services. During the course of our audit, we have not observed any major weaknesses in the internal controlsystem.(v)According to the information and explanations given to us, there are no contracts or arrangements the particulars of which arerequired 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 fromthe public during the year with in the meaning of section 58A and 58AA of the Act and the rules framed there under.(vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.(viii) On the basis of records produced, we are of the opinion that prima facie cost accounting records prescribed by the CentralGovernment under section 209 (1) (d) of the Act, in respect of products of the Company, have been maintained. However, we areneither required to carry out nor have carried out any detailed examination of such accounting records.(ix) (a)(b)According to the records of the Company, the undisputed statutory dues, including Provident Fund, Investor Education andProtection 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 appropriateauthorities except for delays in few cases. There is no undisputed amounts payable in respect of the aforesaid duesoutstanding as at 31 March 2010 for a period of more than six months from the date of becoming payable.There are no disputed dues on account of Wealth Tax, Income Tax, Custom Duty, and Cess. Dues on account of the disputedSales Tax/VAT, Service Tax and Excise Duty which have not been deposited are as under:Name of the Statute(Nature of dues)Sales Tax(VAT)Amount(Rs. in million)Period to which theamount relates2.12 2000-2001 to 2002- 2003 Sales Tax Tribunal3.61 2001-2002 and2005-2006Forum where dispute is pendingJoint Commissioner of Sales Tax(Appeals)53