Auditor Report of Alicon Castalloy Ltd.

Mar 31, 2019

REPORT ON THE AUDIT OF STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying standalone financial statements of Alicon Castalloy Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2019, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the standalone financial statements”).

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 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019, the profit and total comprehensive income, changes in equity and its cash flows 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) 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 Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our 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 of the current period.These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sr. No.	Key Audit matter	Auditor’s Response
1	Accuracy of cost of Goods Sold We identified Cost of Goods Sold area as a key audit matter because it is the most significant cost to the Company, which comprises of the cost of materials and other direct costs of production and the same has significant impact on the profitability of the Company.	We assess the Company’s process to verify the Cost of Goods Sold incurred during the year. Our audit approach consisted of testing of the design and operating effectiveness of the internal controls and substantive testing as follows: - Overall evaluation and testing of controls related to corresponding business processes, viz. ‘Procurement to Payment (P2P), Production Process, Material Requirement Planning (MRP), Inventory policy and stores procedures - Review of overall operations and production process of materials into finished products. - Review the standard operating procedures for COGS to ensure the correctness and completeness of COGS. - Physical verification of inventory items on random sampling basis with reference to book inventory for accuracy and controls including review of internal period-end inventory procedures and reconciliations

	Reviewing completeness and overall accuracy of system generated material consumption and reconciling with General Ledger, including manual accounting entries relating to material consumption
	- Review of inventory valuation, material consumption in accordance with applicable Indian Accounting Standards
	- Review of Reconciliations of Inventory General ledger and Materials Management Module of SAP System.
	- Evaluate the procedures for identifying slow moving items and their accounting estimates made by management.
2 Accuracy and Completeness of Capital Expenditure Capital Expenditure (CAPEX) has been considered as a key audit matter in view of the complexity, peculiarities of business and being one of the important elements of costs.	We assessed the Company’s process to verify the Capital Expenditure incurred during the year including significant acquisitions of manufacturing facility Our audit approach consisted of testing of the design and operating effectiveness of the internal controls and substantive testing as follows :
	- Review of CAPEX business process, flow of documents/ information and their controls effectiveness
	Substantive Tests on random sampling basis for all the major additions, deletions to the assets by applying all the characteristics of capital expenditure, proper classification of the same, with reference to the company’s policy and accounting standards
	- Scrutiny of relevant general ledger accounts to assess if the expenditure has been correctly accounted for
	Physical verification of test basis, review of physical verification carried out by the Management with respect to book records, review of Internal audit reports findings relating to Capex, if any and implementation of the suggestions of the same.
	We have assessed the competency, objectivity and capabilities of management experts and for a sample of valuations, we evaluated the adequacy and appropriateness of their work.
	Review of compliance done with respect to Companies Act, Income Tax Act, Customs duty, and GST Act, particularly for accounting of additions, deletions, depreciation and of carrying amounts thereof.

INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITOR’S REPORT THEREON

The Company’s Board of Directors is responsible for the preparation of the other information. The other information comprises the Management Discussion and Analysis, Board’s Report including Annexures to Board’s Report but does not include the financial statements and our auditor’s report thereon.

Management Discussion and Analysis, Board’s Report including Annexures to Board’s Report and Shareholder’s Information is expected to be made available to us after the date of this auditor’s report, hence our opinion base on Standalone Financials Statement only.

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 the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

When we read Management Discussion and Analysis, Board’s Report including Annexures to Board’s Report, If we conclude that there is material misstatement therein, we are required to communicate the matter to those charged with governance.

MANAGEMENT’S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

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

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

- 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 standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

- 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.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by Section 143(3) of the Act, based on our audit 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, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the relevant books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS 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, 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 and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 44 to the standalone financial statements

ii. The Company did not have any long-term 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.

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

(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report to the Members of Alicon Castalloy Limited of even date)

REPORT ON THE INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING 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 ALICON CASTALLOY 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 Board of Directors of the Company 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 respective 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 internal financial controls over financial reporting of the Company 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”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the standalone 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 system over financial reporting of the Company.

MEANING OF INTERNAL FINANCIAL CONTROLS OvER FINANCIAL REpORTING

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with 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.

LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

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

OPINION

In our opinion, the Company has, in all material respects, maintained adequate internal financial controls over financial reporting as of 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 and the Company’s internal financial controls over financial reporting were operating effectively as of March 31, 2019.

(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of our report to the Members of ALICON CASTALLOY LIMITED of even date)

i. In respect of the Company’s property, plant and equipment:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.

(b) As explain to us, considering the nature of the Fixed Asset, the same have been physically verified by the management at reasonable intervals during the year as per verification plan adopted by the Company, which, in our opinion, is reasonable having regards to size of the Company and the nature of the its assets. According to information and explanation give to us and the records produced to us for our verification, there were no discrepancies noticed during such physical verification;

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company.

I n respect of immovable properties been taken on lease and disclosed as property, plant and equipment in the standalone financial statements, the lease agreements are in the name of the Company.

ii. As informed to us, the physical verification of inventory has been conducted by the management at reasonable intervals and the discrepancies noticed during such physical verification were not material. The discrepancies noticed on physical verification of Inventory as compared to the book records have been properly dealt with the Books of Account.

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 Companies Act. Accordingly, paragraph 3(iii) of the Order is not applicable.

iv. In our opinion and according to the information and explanations given to us, the Company does not have any transactions to which the provisions of section 185 of the Act apply. There are investments by the Company in its wholly owned subsidiaries outside India, appropriately disclosed under note 4 of the attached standalone financial statements which along with guarantees provided by the Company in connection with loans taken by the subsidiaries, are within the limits prescribed under section 186 of the Companies Act, 2013 and accordingly the provisions of section 186 of the Companies Act, 2013 have been complied with by the Company.

v. In our opinion and according to the information and explanations given to us, the company has complied with the directives of the Reserve Bank of India and the provision of Sections 73 to 76 of the Companies Act 2013, and the rules framed there under, wherever applicable. As informed to us, no order has been passed against the Company, by the Company Law Board, the National Company Law Tribunal, RBI, or any court or any tribunal.

vi. According to the information and explanations given to us and in our opinion, maintenance of cost records has not been specified by the Central Government under sub section (1) of section 148 (1) of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014. Accordingly, paragraph 3(vi) of the Order is not applicable.

vii. According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income Tax, Goods and Service Tax, Customs Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income Tax, Goods and Service Tax, Customs Duty, Cess and other material statutory dues in arrears as at March 31, 2019 for a period of more than six months from the date they became payable.

(b) Details of dues of Income Tax, Sales Tax, Service Tax, Excise Duty and Value Added Tax which have not been deposited as at March 31, 2019 on account of dispute are given below:

Sl. No.	Name of the statute	Nature of the dues	Amount involved (Rs. In lakhs)	Period(s) to which the amount relate	Forum where such dispute is pending
1	Sales Tax	MVAT	22.51	2009-10	Joint. Commissioner of Sales Tax, Pune
2	Central Excise Duty	Central Excise Duty	55.40	2008-09	C.Ex. Commissioner, Pune (Call Book)
3	Income Tax	Income Tax	18.74	2009-10	Commissioner of Income Tax (Appeals) Mumbai
4	Central Excise Duty	Cenvat Credit	142.01	2012-13 & 2013-14	C.Ex. Commissioner, Pune
5	Sales Tax	C-Form Liability	193.68	2012-13	Dy. Commissioner of Sales Tax, Pune
6	Sales Tax	C-Form Liability	677.70	2013-14	Dy. Commissioner of Sales Tax, Pune
7.	Sales Tax	C-Form Liability	248.79	2014-15	Dy. Commissioner of Sales Tax, Pune

according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to banks. The Company did not have any outstanding loans or borrowings from financial institutions or government and there are no dues to debenture holders during the year.

ix. I n our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were raised. The Company had not raised money by way of further public offer (including debt instruments) during the year.

x. According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

xi. I n our opinion and according to the information and explanations given to us, the Company has paid/ provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

xii. The Company is not a Nidhi Company and hence reporting under paragraph 3 (xii) of the Order is not applicable to the Company.

xiii. In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

xiv. During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under paragraph 3(xiv) of the Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

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

For Kirtane & Pandit LLP

Chartered Accountants

Firm Registration No.105215W/W100057

Parag Pansare

Partner

Membership No.: 117309

Pune, April 19, 2019

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Mar 31, 2015

1. We have audited the accompanying standalone financial statements of Alicon Castalloy Limited ('the Company') which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and the 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 Financial Statements.

2. The Company's Board of Directors & the Company's management are 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 that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Accounting Standards specified un deer section 133 of the Act, read with Rule 7 of the 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 prevention and detection of fraud and other regularities, selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent and design, implementation and maintenance of internal financial controls, that are 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.

Auditors' Responsibility

3. Our responsibility is to express an opinion on these standalone 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 there under.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the 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 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 controls relevant to the Company's preparation of the financial statements that give 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 control system over financial reporting and operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's Board of Directors & the Company's 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 on these standalone financial statements.

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India 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.

7. Emphasis of Matter

We draw attention to the following matters of corporate information, summary of significant accounting policies and other notes forming part of the standalone financial statements for the year ended March 31, 2015

(a) The attached financial statements include the financials of Casting Business Undertaking of Atlas Castalloy Limited (the Transferor Company), as the Hon'ble High Court of Bombay has approved the scheme of arrangement (the Scheme) between Atlas Castalloy Limited (the Transferor Company) and Alicon Castalloy Limited (the Transferee Company) and their respective shareholders & creditors under section 391 to 394 of the Companies Act, 1956.

As a result and upon this Scheme coming into effect, i.e. from 29/11/2015, the Casting Business Undertaking of the Transferor Company stood transferred to and vested in the Transferee Company, as a going concern with effect from the Appointed Date, which is 01.04.2014.

(b) We draw attention to para (ii) & (iii) of sub-note 9 of the attached statement of accounting policies in respect of 'Depreciation and Amortization' : The useful lives followed by the Company for some of its fixed assets / class of assets as listed in the table given alongside para (ii), i.e. Plant & Machinery, Dies & Patterns, Electrical Equipments & Computes, are different than the ones specified under part C of schedule II to the Companies Act, 2013. The justifications provided by the Company's in-housed technical personnel for deviations has been given alongside the table.

Further, we are informed that the Company's management has physically verified significant portion of its fixed assets during the year and the assets have been tested for impairment & their further useful lives. We are further informed that there are no material discrepancies noticed on physical verification of assets and therefore the Company's management is of the view that all above would not result in any additional amount of provision (over and above the amount of depreciation already provided in the books of account) either on account of impairment or otherwise. Considering the above, and the matter of technical nature, we have relied upon management representations.

(c) We draw attention to footnote** under Note 16 to the financial statements: "The Company's management has confirmed that all trade receivables are good and realizable in the ordinary course of the Company's business and no provision is required over and above the amount already provided for in the books of account."

We have relied upon management confirmation for recoverability or otherwise of the debts wherever few customer's balance confirmations and reconciliations were not made available to us.

(d) We draw attention to footnote under Note 9 to the financial statements: "The Company has no dues to suppliers covered under 'MSMED Act', 2006."

We have relied upon management confirmation for the list of suppliers covered under the Act, dues payable to them etc.

(e) The provisions of the Company's Act 2013 require the Company to comply with the various requirements under the Act and the rules made and notifications issued there under. We are informed by the Company's management that the provisions applicable to the Company have been complied with,. We are also informed that the Company has appointed secretarial auditor to do the secretarial audit and issue his report as required under the Act. We, thus have not extensively reviewed the secretarial & other compliances which the secretarial auditor should be covering in his report.

Our opinion is not modified respect of these matters.

Report on Other Legal and Regulatory Requirements

8. As required by the Companies (Auditor's Report) Order, 2015, ('the Order') issued by the Central Government in terms of section 143 (11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the said Order.

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

(a) Except for the matter described under 'Emphasis of Matter' in paragraphs above, 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, 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 financial statements comply, in all material aspects, with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014 unless otherwise referred to in statement of accounting policies.

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

(f) With respect to 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 financial statements, (refer Note 27 (8) of the standalone financial statements).

ii. The Company did not have any any material foreseeable losses on long-term contracts long -term contracts including derivative contracts

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company for the year under audit.

(Referred to in Paragraph 8 under the heading 'Report on Other Legal and Regulatory Requirements of our report of even date on the financial statements of Alicon Castalloy Limited ('the Company') for the year ended March 31, 2015)

On the basis of such checks of books and records of the Company, as we considered appropriate and according to the information and explanations given to us, we state that:

(i) (a) The Company is maintaining records in respect of its fixed assets, with comprehensive fixed asset register showing full particulars, including quantitative and situation of fixed assets, asset numbers /codes, certifications for commissioning of the plants etc , However it needs to be strengthened in respect of assets transferred from casting business of Atlas Castalloy Limited, the Transferee Company under the scheme of arrangement approved by the Hon'ble High Court of Bombay.

(b) As informed to us, significant part of the fixed assets has been physically verified by the management during the year. We are also informed that, the discrepancies noticed on physical verification of the fixed assets, which were not material, have been properly dealt with in the books of account.

(ii) (a) The inventories comprising semi-finished goods, raw materials, stores and spares etc. have been physically verified by the Company's management during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Company's management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and on the basis of our examination of records, the Company has maintained records of its inventories which need to be improved particularly in respect of semi- finished and finished goods. The closing inventory is established on the basis of year-end physical verification. As informed to us, the discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

(iii) In our opinion and according to the information and explanations given to us, during the year, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register under section 189 of the Companies Act, 2013. Hence, the provisions of clause (iii) (a) & (b) paragraph 3 of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us and having regard to special nature of some capital goods and some inventory for which comparable alternative quotations are not available, there exists internal control system which needs to be suitably strengthened to be commensurate with the growing size of Company and the nature of its business.

(v) In our opinion and according to the information and explanations given to us, the Company, has not accepted any deposit within the meaning of provisions of section 73 to 76 of the Act and rules framed there under and do not have any unclaimed deposits. Hence, the provisions of clause (v) of paragraph 3 of the Order are not applicable to the Company.

(vi) In our opinion and according to the information and explanations given to us, the requirement for maintenance of cost records pursuant to the Companies (Cost Records and Audit) Rules, 2014 specified by the Central Government of India under section 148 of the Companies Act, 2013 are not applicable to the Company for the year under audit.

(vii) (a) According to the information and explanations given to us and as per records of the Company made available to us, the Company is generally regular in depositing undisputed statutory dues including provident fund, income-tax, wealth- tax, service tax, duty of customs, duty of excise, sales-tax, value added tax, cess and other material statutory dues as applicable to it with the appropriate authorities during the year.

(b) According to the records of the Company made available to us, and according to the information and explanations given to us, no undisputed amounts payable in respect of statutory dues referred above were in arrears as at 31st March 2015 for a period of more than six months from the date on which those became payable.

(c) According to the information and explanations given to us, there are no dues of income-tax, wealth-tax, service tax, duty of customs, duty of excise, sales-tax, value added tax, cess which have not been deposited on account of any dispute other than reported below.

Particulars Period to which Amount involved Forum where dispute the amount (Rs, in lakhs) is pending relates

Sales Tax/MVAT 2007-08 80.95 The Joint Commis- sioner of Sales Tax (Appeals- F-002), Pune

Sales Tax/MVAT 2007-08 818.84 The Joint Commis sioner of Sales Tax (Appeals- F-002), Pune

Sales Tax/MVAT 2008-09 8.22 Commissioner of Sales Tax (Appeals), Pune

Sales Tax/MVAT 2009-10 57.65 Dy. Commissioner of Sales Tax, Pune

Sales Tax/CST 2009-10 156.93 Dy. Commissioner of Sales Tax, Pune

Central Excise Duty 2008-09 55.40 C.Ex. Commis- sioner, Pune (Call Book)

Central Excise Duty 2002-03 6.88 C.Ex. Commis sioner, Pune (Call Book)

Income Tax 2009-10 18.74 Commissioner of Income Tax (Appeals) Mumbai.

1203.61

(d) The provisions as to transferring the amount to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under are not applicable to the Company for the year under audit.

(viii) The Company has no accumulated losses as at the end of the financial year. The Company has also not incurred cash losses in the financial year covered by our audit and in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to the banks during the year and did not have any amount outstanding to the financial institutions or debenture holders.

(x) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions during the year.

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

(xii) During the course of our examination of books and records of the Company carried out in accordance with auditing standards generally accepted in India, and to the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year.

For Asit Mehta & Associates

Chartered Accountants

Registration No. 100733W



Sanjay S. Rane

(Partner)

Membership No.100374

Mumbai, November 30, 2015

---

Mar 31, 2014

We have audited the accompanying financial statements of Alicon Castalloy Limited (''the Company'') which comprise the Balance Sheet as at 31st March, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS.

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including the accounting standards notified under the Companies Act, 1956 (''the Act'') read with the General Circular 15/2013 dated 13.09.2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITORS'' RESPONSIBILITY

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company''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.

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

OPINION

1) In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

(ii) In the case of the Statement of Profit and Loss, 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.

EMPHASIS OF MATTER

2) (a) We draw attention to footnote under Note 9 to the financial

statements: The Company has no dues to suppliers covered under ''MSMED Act'', 2006.'''' We have relied upon management confirmation for the suppliers covered under the Act, dues payable to them etc.

(b) We draw attention to footnote under Note 16 to the financial statements: "The management of the Company has confirmed that all trade receivables are good and realisable in the ordinary course of the Company''s business." We have relied upon management confirmations. Wherever, individual confirmations were not made available to us.

(c) We draw attention to sub-note 8 of Note 1 to the financial statements: "At times, impairment loss is charged to revenue in the year in which the loss is crystalized and quantified with ease." We have relied upon management confirmation to the effect, on a global basis, the recoverable value of assets is the same at which those are being carried in the balance sheet though these have remained to be tested for impairment, if any.

Our opinion is not qualified in respect of these matters.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

3) As required by the Companies (Auditor''s Report) Order, 2003, (as amended) 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.

4) As required by section 227(3) of the Act, we report that:

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

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

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

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement read with and subject to summary of accounting policies dealt with by this report comply in all material respects, with the Accounting Standards notified under the Companies Act, 1956 (''the Act'') read with the General Circular 15/2013 dated 13.09.2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013;

(e) On the basis of written representations received from the directors, as on 31st March, 2014 and taken on record by the Board of Directors, none of the directors of the Company is disqualified as on 31st March, 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 3 under the heading ''Report on Other Legal and Regulatory Requirements of our report of even date on the financial statements of Alicon Castalloy Limited (''the Company'') for the year ended 31st March, 2014).

(i) (a) The Company is maintaining records showing particulars

including quantitative details and situation of fixed assets.

(b) As informed to us, some part of the fixed assets has been physically verified by the management during the year. As per information given to us, no material discrepancies were noticed on physical verification of some part of the fixed assets. We have relied upon management confirmation in the absence of specific details. However, in our opinion, the Company needs to undertake a comprehensive programme of physical verification covering all fixed assets.

(c) The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern status.

(ii) (a) The inventories comprising semi-finished goods, raw materials, stores and spares etc. have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained inventory records which need to be improved particularly in respect of semi-finished and finished goods. The closing inventory is established on the basis of year-end physical verification. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the accounts.

(iii) (a) In our opinion and according to the information and

explanations given to us, during the year, the Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (a) (b) (c) (d) the Order are not applicable to the Company.

(b) In our opinion and according to the information and explanations given to us, during the year, the Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (e), (f) & (g) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there exists internal control system commensurate with the size of Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. However, in our opinion, the existing internal control system needs to be further strengthened particularly in respect of fixed assets. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the Company.

(v) (a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been entered.

(b) In our opinion and according to the information and explanations given to us and having regard to special nature of capital goods for which comparable quotations are not available, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Act and exceeding the value of rupees five lakhs in respect of each party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

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

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

(viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209(1) (d) of the Act and are of the opinion that prima facie, the prescribed cost records have been made and maintained. We, however, have not made detailed examination of the records with a view to determine whether they are accurate and complete.

(ix) (a) According to the records of the Company produced before us, the Company is generally regular in depositing with the appropriate authorities undisputed amount of statutory dues including Provident Fund, Investor Education and Protection Fund, Profession Tax, Income-tax, Wealth-tax, Sales-tax, Value Added Tax, Service Tax, Excise Duty, cess and any other material statutory dues as applicable to it.

(b) According to the records of the Company produced before us and according to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid statutory dues were in arrears and outstanding as at 31st March, 2014 for a period of more than six months from the date those became payable.

(c) According to the information and explanations given to us, there are no dues, to the extent applicable, of Income-tax, Sales-tax, Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and cess which have not been deposited on account of any dispute except those given in the table below.

Name of Nature of the Amount Forum where the Statue dues (Rs. ) dispute is pending

MVAT Act, Assessment 8,094,557/- The Joint 2005 dues for the Commissioner of year 2007-08 Sales Tax (Appeals- F-002), Pune

Under CST Assessment 81,884,443/- The Joint Act dues for the Commissioner of year 2007-08 Sales Tax (Appeals- F-002), Pune

Total 89,979,000/-

(x) The Company does not have any accumulated losses as at the end of the financial year under audit.

The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(xi) Based on our audit procedures and according to the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to the banks and financial institutions. The Company has not borrowed money in the form of debentures.

(xii) Based on our examination of records and according to the information and explanations given to us, the Company has not granted 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 nidhi/mutual benefit fund/society and therefore provisions of clause 4 (xiii) of the Order are not applicable to the Company.

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

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions. Accordingly, the provisions of clause 4 (xv) of the Order are not applicable to the Company.

(xvi) In our opinion and according to the information and explanations given to us the term loans have been applied, on an overall basis, for the purposes for which those were obtained

(xvii) In our opinion and according to the information and explanation given to us and on overall examination of the balance sheet read with notes thereon of the Company, no funds raised on short-term basis have prima facie been used for long-term investment.

(xviii) During the year under audit, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company has not issued any debentures during the year and does not have any debentures outstanding as at the beginning and as at end the year. 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 way of 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 fraud of material amount on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For Asit Mehta & Associates

Chartered Accountants Registration No.100733W

Sanjay Rane

Partner Membership No.100374 Place : Pune Date : April 30, 2014

---

Mar 31, 2013

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of Alicon Castalloy Limited (''the Company'') which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 (''the Act''). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITORS'' RESPONSIBILITY

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

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

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

OPINION

1) In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(ii) In the case of the Statement of Profit and Loss, 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.

EMPHASIS OF MATTER

2) (a) We draw attention to footnote under Note 8 of the financial statements: The Company has no dues to suppliers covered under ''MSMED Act'', 2006. We have relied upon management confirmations in respect of the same.

(b) We draw attention to footnote under Note 15 of the financial statements: The management of the Company has confirmed that all trade receivables are good and realisable in the ordinary course of its business and thus no provision is called for doubtful debts. We have relied upon management confirmationin the absence customer confirmations at large.

Our opinion is not qualified in respect of these matters.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

3) As required by the Companies (Auditor''s Report) Order, 2003, (as amended) (''the Order'') issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4) As required by section 227(3) of the Act, we report that:

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

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

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

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211 (3C) of the Act;

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

(f) Since the Central Government has not issued any notification as to the rate at which cess is to be paid under section 441A of the Companies Act, 1956 nor it has issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

(Referred to in Paragraph 3 under the heading ''Report on Other Legal and Regulatory Requirements of our report of even date on the financial statements of Alicon Castalloy Limited (''the Company'') for the year ended March 31, 2013).

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 state that:

(i) (a) The Company is maintaining records showing quantitative details and situation of fixed assets. However, asset numbering exercise has remained to be completed.

(b) As informed to us, substantial part of the fixed assets has been physically verified by the management during the year. We are informed that the discrepancies noticed on physical verification of the fixed assets have been properly dealt with in the books of account.

(c) The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern status.

(ii) (a) The inventories comprising semi-finished goods, raw materials, stores and spares etc. have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained inventory records. However, the closing inventory is established on the basis of year-end physical verification.

(iii) (a) In our opinion and according to the information and explanations given to us, during the year, the Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Hence, the provisions of clause (iii) (a) (b) (c) (d) of paragraph 4 of the Order are not applicable to the Company.

(b) In our opinion and according to the information and explanations given to us, during the year, the Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Hence, the provisions of clause (iii) (e), (f) & (g) of paragraph 4 of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there exists internal control system commensurate with the size of Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the Company.

(v) (a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been entered.

(b) According to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time, to the extent information available with the Company.

(vi) The Company has not accepted any deposits from the public. Therefore, the provisions of clause (vi) of Paragraph 4 of the Order is not applicable to the Company.

(vii) The Company has internal audit system commensurate with its size and nature of its business.

(viii) In our opinion and according to the information and explanations given to us, the cost records required to be maintained under section 209(1)(d) of the Companies Act, 1956 have been made and maintained. We, however, have not made detailed examination of the records.

(ix) (a) According to the records of the Company and information and explanations given to us, the Company is generally regular in depositing with the appropriate authorities undisputed amount of statutory dues including Provident Fund, Investor Education and Protection Fund, Profession Tax, Income Tax, Wealth Tax, Sales Tax, Value Added Tax, Service Tax, Custom Duty, Excise Duty, cess and any other material statutory dues as applicable to it.

(b) According to the records of the Company and according to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid statutory dues were in arrears and outstanding as at March 31, 2013 for a period of more than six months from the date those became payable.

(c) According to the information and explanations given to us, there are no dues, to the extent applicable, of Income Tax, Sales Tax, Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and cess which have not been deposited on account of any dispute except those given in the table below.

Name of Nature of the Amount Forum where the Statue Dues (Rs.) dispute is pending

MVAT Act, Assessment 80,94,557/- The Joint 2005 dues for the Commissioner of year 2007-08 Sales Tax (Appeals- F-002), Pune

(x) The Company does not have any accumulated losses as at the end of the financial year under audit. The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceeding financial year.

(xi) Based on our audit procedures and according to the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to the banks and financial institutions. The Company has not borrowed money in the form of debentures.

(xii) Based on our examination of records and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chitfund or nidhi/mutual benefit fund/ society and therefore provisions of clause (xiii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003, as amended are not applicable to the Company.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause (xiv) of paragraph 4 of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions. Therefore, the provisions of clause (xv) of paragraph 4 of the Order are not applicable to the Company.

(xvi) In our opinion and according to the information and explanations given to us and on overall examination of the Balance Sheet read with notes thereon of the Company, the term loans have prima-facie been applied for the purposes for which they were obtained.

(xvii) In our opinion and according to the information and explanation given to us and on overall examination of the Balance Sheet read with notes thereon of the Company, no funds raised on short-term basis have prima facie been used for long-term investment.

(xviii) During the year under audit, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix) The Company has not issued debentures during the year. The Company also did not have any debentures outstanding as at the end the year.

(xx) The Company has not raised any money by way of public issue during the year.

(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 fraud of material amount on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For Asit Mehta & Associates

Chartered Accountants

Registration No.100733W

Sanjay S. Rane

Partner

Membership No.100374

Place: Pune

Date : April 30th, 2013

---

Mar 31, 2012

1.We have audited the attached Balance Sheet of Alicon Castalloy Limited (the Company) as at March 31, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company 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 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 disclosure 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 statements presentation. 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 DCA Notification G.S.R. 766(E), dated November 25, 2004) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 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 unless stated otherwise;

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 unless stated otherwise;

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 in all material respects with the Accounting Standards (AS) referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, unless stated otherwise in statement of significant accounting policies and notes to accounts;

e. On the basis of written representations received from the directors as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanation given to us, the said accounts read together with and subject to the significant accounting policies and notes thereon, give the information required by the Companies Act,1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012;

ii. In the case of the Statement Profit and Loss, of the profit of the Company 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.

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 state that: (reference of the phrase 'during the year' hereinafter should be read and understood as 'during the year ended March 31 2012')

I. a. The Company has maintained records showing details and situation of fixed assets. However, asset numbering exercise is stated to be under completion.

b. As informed to us, the Company has a phased programme of verification of its fixed assets by which all assets get physically verified by the management over a period of three years, which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. We are informed that no material discrepancies were noticed on such physical verification.

c. The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern status.

II. a. The inventories comprising semi-finished goods, raw materials, stores and spares etc. have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c.The Company needs to improve its inventory records so as to contain all details of each transaction and for each item of the stock. The closing inventory is established on the basis of year-end physical verification.

III. a. In our opinion and according to the information and explanations given to us, during the year, the Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

b. In our opinion and according to the information and explanations given to us, during the year, the Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

iv. In our opinion and according to the information and explanations given to us, there exists adequate internal control system commensurate with the size of Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the Company.

v. a. In our opinion and according to information and explanations given to us, the particulars of contracts or arrangements that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been entered.

According to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time, to the extent that such comparative prices are available and where items purchased/ sold are of special nature for which suitable alternative sources do not exist.

vI. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public during the year. We are informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

vII. The Company has an internal audit system commensurate with its size and nature of its business.

vII. In our opinion and according to the information and explanations given to us, the cost records required to be maintained under section 209(1)(d) of the Companies Act, 1956 have been made and maintained. We, however, have not made detailed examination of the records.

IX. a. According to the records of the Company and information and explanations given to us, the Company is generally regular in depositing with appropriate authorities undisputed amount of statutory dues including Provident Fund, Investor Education and Protection Fund, Workmen Compensation, Income-tax, Wealth-tax Sales-tax, Value Added Tax, Custom Duty, Excise Duty and any other statutory dues applicable to it.

b. According to the information and explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2012 for a period more than six months from the date those became payable.

According to the information and explanations given to us, there are no dues, to the extent applicable, of Sales-tax,/ Income-tax// Customs Duty/ Wealth Tax / Excise Duty /Cess, which have not been deposited on account of any dispute, except assessment dues of Rs.80,94,557/- for the year 2007-08 under MVAT Act against which, we are informed, the Company has preferred the appeal with the Joint Commissioner of Sales Tax (Appeals- F-002), Pune

x. The Company does not have any accumulated losses as at the end of the financial year under audit. The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xI. Based on our audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to the banks and the financial institutions. The Company has not borrowed money in the form of debentures.

xII. Based on our examination of records and according to the information and explanations given to us, the Company has not granted 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/nidhi/mutual benefit fund/society and therefore provisions of clause 4 (xiii) of the Order are not applicable to the Company.

xiv. The Company is not dealing or trading in shares, securities, debentures and other investments.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. In our opinion and according to the information and explanations given to us and on overall examination of the Balance Sheet of the Company, we report that, the term loans have prima-facie been applied for the purpose for which they were obtained.

xvii. According to the information and explanations given to us and on overall examination of the balance sheet of the Company read with notes theupon, we are of the opinion that no funds raised on short-term basis have prima facie been used for long-term investment.

xviii. During the year under audit, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix. The Company has not issued debentures during the year. The Company did not have any outstanding debentures as at the end the year.

xx. The Company has not raised any money by way of public issues during the year.

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 such case by the management.

For Asit Mehta & Associates Chartered Accountants Firm Regn No. 100733W

Sanjay Rane Partner

Membership No 100374

Place: Shikrapur Date: May 30, 2012