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Auditor Report of APL Apollo Tubes Ltd.

Mar 31, 2015

1. We have audited the accompanying financial statements of M/s APL Apollo Tubes Limited which comprise the Balance Sheet as at March 31, 2015, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

2. Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters in Section 134(5) of the Companies Act, 2013 ("the act") with respect to 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 specified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rule, 2014. This responsibility also includes the 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 the 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 internal financial control that were operating effectively for ensuring the accuracy and completeness of accounting records , relevant to the preparation and fair presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor''s Responsibility

Our responsibility is to express an opinion on these 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.

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 evidences we have obtained are sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

OPINION

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:

i) In the case of the Balance Sheet, of the State of Affairs of the Company as at March 31, 2015.

ii) In the case of the Profit & Loss Statement, of the Profit of the Company for the year ended on that date.

iii) In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.

4. Report on Other Legal and Regulatory Requirements

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

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

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

c) The Balance Sheet, the 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 aforesaid financial statements comply with the Accounting Standards specified under Section 1 33 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of written representations received from the directors as on March 31, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of Section 1 64(2) of the Act.

f) With respect to the other matters included in the Auditor''s Report and to our 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.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts.

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

Annexure to the Independent Auditors'' Report

Referred to in paragraph 3 and 4 of our report of even date

1. a) The company has maintained proper records

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

b) A substantial portion of the fixed assets has been physically verified by the management during the period and in our opinion the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification.

2. a) The inventories have been physically verified during the period by the management. In our opinion, the frequency of verification is reasonable.

b) 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) In our opinion and according to the information and explanations given to us, the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

3. a) The company has granted unsecured loan to its one wholly owned subsidiary Company covered in the register maintained to under section 189 of the companies Act, 2013. The Maximum amount involved during the year was Rs.330 Million(Rupees Three Hundred & Thirty Million Only) and the year end balance of loan given to this Company was Rs.330 Million (Previous year end balance of loan given to this company was Rs.330 Million)

b) The company is regular in receipt of the principal amounts as stipulated and has been regular in the receipt of interest, if any.

c) There is no overdue amount of loans granted to companies, firms or other parties covered in the register maintained under section 189 of the companies Act, 2013.

4. In our opinion and according to the information and explanations given to us there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls system.

5. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits within the meaning of provisions of sections of 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder .

In our opinion and according to the information and explanations given to us, no order h has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any other Tribunal against the company.

6. We have broadly reviewed the books of account relating to materials, labor and other items of cost maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 148 (1) of the Companies Act, 2013 we are of the opinion that prima facie the prescribed accounts and record have been made and maintained. We have not made however a detailed examination of the record with a view to determine whether they are accurate or complete.

7. (a) According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees State insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Value Added Tax, Cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax,Customs Duty and Excise Duty,Service Tax,Value Added Tax, Cess etc. were outstanding as at March 31, 2015 for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us and records of the company examined by us, the particulars dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty, Service Tax, Value Added Tax, Cess which have not been deposited on account of any dispute, are as per annexure below:

Name of the Nature of Dues Amount Statue (Rs.million)

Central Excise Central Excise levied u/s 11A of Central 3.67 Act, 1944 Excise Act,1944.

Penalty u/s 11 AC of Central Excise 3 67 Rules,1944 read with Rule 9(2) & 173Q of Central Excise Act, 1 944.

Recovery u/s 57 I (4) of Central Excise 0.35 Act,1944 of modvat credit availed and utilized in contravention of the provisions of Rule 57F(3) of Central Excise Rules, 1944.

Penalty u/s 11AC of Central Excise 0.35 Rules,1944 read with Rule 9(2) & 173Q of Central Excise Rule,1944.

Central Excise duty levied u/s 11 A of 0.45 " Central Excise Act,1944.

Penalty u/s 11 AC of Central Excise 0.45 Act, 1 944.

Penalty under Rule 9(2) and 173Q of Central Excise Rule,1944. 0.10

" Demand in Terms of section 1 1A on Zinc Ash/Dross clearance. 1.08

Penalty under Rule 25 of Central Excise Rules 2002 read with section 1 1AC of 0.03

Central Excise Act 1 944.

" Demand under Rule 6(3)(b) and Rule 0.31 6(3)[Explanation -II] of CCR rules ,2004 read with section1 1AB of C.E.Act 1944

" Recovery of Cenvat credit under Rule 14 3.03 of CCR,2004 read with section 11 A( 1 0)(4) of C.E.Act,1 944

Penalty under rule 15(2) of CCR,2004 read with Section 1 1 AC of C.E.Act, 3.03 1944

U P. Tax on The constitutional validity of U.P- Tax on 44.76 Entry of Goods Entry of Goods in to Local areas Act in to local 2007 had been Challenged. areas Act, 2007

Value Added Tax Reversal of Input tax credit on 6.14 Act- 2008 Consignment /Stock Transfer

Value Added Tax Difference in Rate of Tax on Steel 36.17 Act- 2008 Tubes & Pipes

Value Added Tax Reversal of Input tax credit on 11.71 Act-2008 Consignment /Stock Transfer/Sale to SEZ Units

Value Added Tax Reversal of Input tax credit on 20.81 Act- 2008 Consignment /Stock Transfer/Sale to SEZ Units

Central Excise Demand on exempted Trading service 1.9 Act 1944 value under rule 14 of CCR,2004 read with Sec 11A of Central Excise Act, 1944 Penalty under Rule 15 of CCR,2004 read 1.9 with section 11AC of Central Excise Act,1944

Value Added Reversal of Input Tax Credit on 29.45 Tax Act- 2008 Consignment/ Stock Transfer/ Sale to SEZ units.

Against Statutory Declaration Forms 0.47

Value Added Tax Act- Reversal of Input 22.34 2008 Ag. Statutory Declaration Forms 1.58

Value Added Reversal of Input tax credit on 0.81 Tax Act- 2008 Consignment /Stock Transfer



Name of the Period to Authority where the Statue which dues related dispute is pending for decision

Central Excise 07.08.1996 Before the High Court Act, 1944 Judicature of Allahabad 07.08 1996

07.08.1996

07.08.1996

16.08.1999 CESTAT New Delhi ,,

16.08.1999

16.08.1999

,, July''08 to CESTAT, New Delhi Mar''09

" May''08 to CESTAT, New Delhi July''08

2008 to 2012 CESTAT, New Delhi

2008 to 2012

U P. Tax on Nov''08 to Before the Supreme Court of Entry of Goods Mar''11 India in to local areas Act,2007

Value Added Tax Jan''08 to Before the High Court 2008 Mar''08 Judicature of Allahabad

Value Added Tax 30/09/2008 Commercial Tax Tribunal, 2008 to 15/01/2009 Ghaziabad

Value Added Tax Apr''08 Commercial Tax Tribunal, 2008 to Mar''09 Ghaziabad

Value Added Tax Apr''09 to Commercial Tax Tribuna|, 2008 Mar''10 Ghaziabad

Central Excise Apr''11 to CEST at, New Delhi Act 1944 Mar''12

Value Added Apr''10 to Commercial Tax Tribunal, 2008 Mar''1 1 Ghaziabad

Value Added Apr''1 1 to Commercial Tax Tribuna|, 2008 Mar''12 Ghaziabad

Value Added 2010-11 and Before the High Court 2008 201 1-12 Judicature of Madras

(d) According to the information and explanation given to us and records of the company examined by us, the company has transferred amount to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 2013 and rules made there under to such fund within time.

8. The company has no accumulated losses as at March 31, 2015 and has not incurred any cash losses during the financial period covered by our audit and in the immediately preceding financial period.

9. In our opinion 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 a financial institution, bank or debenture holders.

10. The company has given Corporate guarantee for loans taken from bank or financial institutions. At the end of the year, the outstanding liability by such companies to bank or financial institutions was Rs. 920.78 Million

11. In our opinion, the term loans have been applied for the purpose for which they were raised.

12. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For VAPS & Co. Chartered Accountants, Firm Regn. No. 003612N

(P. K. Jain) Partner M.N. 082515

Place: Delhi Date: May 09, 2015


Mar 31, 2014

(I) We have audited the accompanying financial statements of M/s APL APOLLO TUBES LIMITED, which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

(II) 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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

(III) Auditor''s 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.

Opinion

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:

i.) In so far as it relates to the Balance Sheet of the State of Affairs of the Company as at March 31, 2014,

ii.) In the case of the Statement of Profit & Loss, of the profit of the Company for the year ended on that date, and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2003 (as amended by the Amendment Order, 2004) issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, we give our comments on the matters specified in paragraphs 4 and 5 of the said order to the extent as applicable to the Company in the Annexure to this report.

2. 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 Profit and Loss Statement 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 Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September, 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 March 31, 2014 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2014 from being appointed as a Director in terms of clause (g) of sub section (1) of Section 274 of The Companies Act, 1956.

Annexure to The Independent Auditors'' Report Re: APL Apollo Tubes Limited Referred to in paragraph 3 of our report of even date

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

b) A substantial portion of the fixed assets has been physically verified by the management during the year and in our opinion the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification.

c) Fixed assets disposed off during the year were not significant. According to the information and explanations given to us, we are of the opinion that the disposal of fixed assets has not affected the going concern status of the Company.

2. a) The inventories (excluding stocks with the third

parties) have been physically verified during the year by the management. In respect of inventory lying with the third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

b) 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) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verifications.

3. a) The Company has granted unsecured loan to its

one wholly owned subsidiary Company covered in the register maintained under Section 301 of the Companies Act, 1956. The Maximum amount involved during the year was Rs. 330 Million (Rupees Three Hundred & Thirty Million Only) and the year end balance of loan given to this Company was Rs. 330 Million (Previous year end balance of loan given to this company was Rs. 330 Million). In our opinion terms and conditions on which loans have been given to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

b) The Company has not taken any unsecured loan from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

c) The rate of interest and other terms and conditions of the above-mentioned loans are not prima facie prejudicial to the interest of the Company.

d) The repayment of principal and interest are as per the agreed terms.

4. In our opinion and according to the information and explanations given to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls system.

5. a) In our opinion and according to information and explanatios given to us the transactions that needed to be entered in the register maintained under section 301 of the Act have been entered in the register

b) As per information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 500,000 in respect of each party during the year have been made at price which appear reasonable as per information available with the Company.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the meaning of provisions of sections of 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rule 1975.

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

8. We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 we are of the opinion that prima facie the prescribed accounts and record have been made and maintained. We have not made however a detailed examination of the record with a view to determine whether they are accurate or complete.

9. (a) According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty, Service Tax, Cess etc. were outstanding as at March 31, 2014 for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us and records of the Company examined by us, the particulars dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty, Service Tax, Cess which have not been deposited on account of any dispute, are as follows:

Name of the Nature of Dues Amount Statue Rs Million Central Excise Central Excise levied u/s 11A of Central 3.67 Act, 1944 Excise Act,1944.

Penalty u/s 11 AC of Central Excise 3.67 Rules,1944 read with Rule 9(2) & 173Q of Central Excise Act,1944.

Recovery u/s 57 I (4) of Central Excise 0.35 Act,1944 of modvat credit availed and utilized in contravention of the provisions of Rule B7F(3) of Central Excise Rules, 1944.

Penalty u/s 11AC of Central Excise 0.35 Rules,1944 read with Rule 9(2) & 173Q of Central Excise Rule,1944.

Central Excise duty levied u/s 11 A of 0.45 Central Excise Act,1944.

Penalty u/s 11 AC of Central Excise : 0.45 Act,1944.

Penalty under Rule 9(2) and 173Q of 0.10 Central Excise Rule,1944.

Demand in Terms of section 11A on 1.08 Zinc Ash/Dross clearance.

Penalty under Rule 25 of Central Excise 0.03 Rules 2002 read with section 11AC of Central Excise Act 1944.

U.P. Tax on The constitutional validity of U.P. Tax on 44.76 Entry of Entry of Goods in to Local areas Act Goods in to 2007 had been Challenged. Local areas Act, 2007

Value Added Reversal of Input tax credit on 6.14 Tax Act 2008 Consignment /Stock Transfer

Value Added Difference in Rate of Tax on Steel Tubes 36.17 Tax Act 2008 & Pipes

Value Added Reversal of Input tax credit on 11.71 Tax Act 2008 Consignment /Stock Transfer/Sale to SEZ Units

Value Added Reversal of Input tax credit on 20.81 Tax Act 2008 Consignment /Stock Transfer/Sale to SEZ : Units

Central Excise Demand on exempted Trading service : 1.9 Act 1944 value under rule 14 of CCR,2004 read with Sec 11A of Central Excise Act, 1944

Penalty under Rule IB of CCR.2004 read 1.9 with section 11AC of Central Excise Act,1944

Value Added Reversal of Input Tax Credit on 29.45 Tax Act 2008 Consignment/ Stock Transfer/ Sale to ; SEZ units.

Against Statutory Declaration Forms 0.47

Value Added Reversal of Input - 22.34 Tax Act 2008 Ag. Statutory Declaration Forms 1.58

Name of the Period to Authority where the Dispute is Statue Which dues Pending for Decision Related

Central Excise 07.08.1996 Before the High Court Act 1944 Judicature of Allahabad

07.08.1996 Before the High Court Judicature of Allahabad

67.08.1996 Before the High Court Judicature of Allahabad

07.08.1996 Before the Hjgh Court Judicature of Allahabad

16.08.1999 CESTAT, New Delhi

16.08.1999 CESTAT, New Delhi

16.08.1999 CESTAT, New Delhi

July-08 to CESTAT, New Delhi Mar-09

UP Tax on Entry Nov.-08 to Before the Supreme Court of of Goods in to Mar.-ll Local area Act 2007

Value Added Act Jan.-08 to Commercial Tax Tribunal, 2008 Mar.-08 Ghaziabad

Value Added Act 30/09/2008 Commercial Tax Tribunal, 2008 to 15/01/2009 Ghaziabad

Value Added Act April, 08 Commercial Tax Tribunal, 2008 to March, 09 Ghaziabad

Value Added Act April, 09 to Commercial Tax Tribunal, 2008 March, 10 Ghaziabad

Central Excise Apr 11 to Commissioner Appeals Centra Act 1944 Mar 12 Excise & Service Tax, Noida

Value Added Act Apr 10 to Additional-Comm (Appelas)- 2008 Mar 11 Bulandshahr

Value Added Act Apr 11 to Additional-Comm (Appelas)- Mar''12 Bulandshahr

10. The Company has no accumulated losses as at March 31, 2014 and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. In our opinion 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 any financial institution, bank or debenture holders.

12. We have been informed that the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence paragraph 4(XII) of the order is not applicable.

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor''s Report) Order, 2003 as amended 2004 are not applicable to the Company.

14. The Company has maintained proper records of transactions and contracts in respect of trading in securities, debentures and other investment and timely entries have been made therein. All shares (except the shares held in the name of nominees of the Company in wholly owned subsidiaries), debentures and other investments have been held by Company in its own name.

15. The Company has given corporate guarantee for securing working capital facilities sanctioned by Banks to its Subsidiary Companies. In our opinion, the terms and conditions on which the Company has given said guarantees are not prejudicial to the interest of the Company.

16. In our opinion and according to information and explanations given to us by the Company the term loans have been applied for the purpose for which they were raised.

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

18. According to the information and explanations given to us, the Company has made allotment of 1,115,000 Equity Shares on preferential basis (on conversion of equal number of share warrant already issued entitling the warrant holder to get one equity share of Rs. 10 each for each warrant) to parties and Companies covered in the register to be maintained under section 301 of the Act and in our opinion, the premium at which share have been issued is not prejudicial to the interest of the Company.

19. During the period covered by our audit report, the Company has not issued any debentures.

20. The Company has not raised any money from public issue and as such question of end use of money raised by public issue does not arise.

21. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit for the year ended March 31, 2014.

for VAPS & Co. Chartered Accountants, Firm Regn. No. 003612N

Sd/- (P. K. JAIN) Partner M.N. 082515

Place: Delhi Date : May 30, 2014


Mar 31, 2013

(I) We have audited the accompanying financial statements of M/s APL APOLLO TUBES LIMITED, which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

(II) 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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

(III) Auditor''s 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.

i.) In so far as it relates to 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 & Loss, of the profit of the Company for the year ended on that date, and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2003 (as amended by the Amendment Order, 2004) issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, we give our comments on the matters specified in paragraphs 4 and 5 of the said order to the extent as applicable to the Company in the Annexure to this report.

2. 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 Profit and Loss Statement and the Cash Flow Statement dealt with by this report are in agreement with the Books of Account.

d. In our opinion, the Balance Sheet, the Profit and Loss Statement and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

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, we report that none of the directors 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 Companies Act, 1956.

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it 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.

Re: APL Apollo Tubes Limited

Referred to in paragraph 3 of our report of even date

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

b) A substantial portion of the fixed assets has been physically verified by the management during the year and in our opinion the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification.

c) Fixed assets disposed off during the year were not significant. According to the information and explanations given to us, we are of the opinion that the disposal of fixed assets has not affected the going concern status of the Company.

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

b) 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) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verifications.

3. a) The Company has granted unsecured loan to its wholly owned subsidiary Company covered in the register maintained under Section 301 of the Companies Act, 1956. The Maximum amount involved during the year wasRs.330 Million (RupeesThree Hundred &Thirty Million Only) and the year end balance of loan given to this Company was Rs. 330 Million (Rupees Three Hundred & Thirty Million Only). In our opinion terms and conditions on which loans have been given to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

b) The Company has not taken any unsecured loan from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

c) The rate of interest and other terms and conditions of the above-mentioned loans are not prima facie prejudicial to the interest of the Company.

d) The repayment of principal and interest are as per the agreed terms.

4. In our opinion and according to the information and explanations given to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls system.

5. a) In our opinion and according to information and explanations given to us the transactions that needed to be entered in the register maintained under section 301 of the Act have been entered in the register

b) As per information and explanations given to us aforesaid transactions have been made at price which are reasonable having regard to the prevailing market price at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the meaning of provisions of sections of 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rule 1975.

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

8. We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 we are of the opinion that prima facie the prescribed accounts and record have been made and maintained. We have not made however a detailed examination of the record with a view to determine whether they are accurate or complete.

9. (a) Accord ing to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty, Service Tax, Cess etc. were outstanding as at March 31, 2013 for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us and records of the Company examined by us, the particulars dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty, Service Tax, Cess which have not been deposited on account of any dispute, are as follows:

Name of the Amount Nature of Dues Statue (Rs. million)

Central Excise Central Excise levied u/s 11A of Central 3.67 Act, 1944 Excise Act, 1944.

Central Excise Penalty u/s 11 AC of Central Excise Act,1944 Rules,1944 read with Rule 9(2) & 173Q of 3.67 Central Excise Act,1944.

Central Excise Recovery u/s 57 I (4) of Central Excise Act, 1944 Act, 1944 of modvat credit availed and utilized in contravention of the provisions 0.35 of Rule 57F(3) of Central Excise Rules, 1944.

Name of the Statute Authority where the Period to which Dispute is Pending for dues Related Decision

Central Excise Act 1944 Before the High Court 07.08.1996 Judicature of Allahabad

Central Excise Act 1944 Before the High Court 07.08.1996 Judicature of Allahabad

Central Excise Act 1944 Before the High Court 07.08.1996 Judicature of Allahabad

10. The Company has no accumulated losses as at March 31, 2013 and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. In our opinion 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 any financial institution, bank or debenture holders.

12. We have been informed that the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence paragraph 4(XII) of the order is not applicable.

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor''s Report) Order, 2003 as amended 2004 are not applicable to the Company.

14. The Company has maintained proper records of transactions and contracts in respect of trading insecurities, debentures and other investment and timely entries have been made therein. All shares (except the shares held in the name of nominees of the Company in wholly owned subsidiaries), debentures and other investments have been held by Company in its own name.

15. The Company has given corporate guarantee for securing working capital facilities sanctioned by Banks to its Subsidiary Companies. In our opinion, the terms and conditions on which the Company has given said guarantees are not prejudicial to the interest of the Company.

16. In our opinion and according to information and explanations given to us by the Company the term loans have been applied for the purpose for which they were raised.

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

18. According to the information and explanations given to us, the Company has made allotment of 1,026,953 Equity Shares on preferential basis ( on conversion of equal number share warrant already issued entitling the warrant holder to get one equity share of Rs. 10 each for each warrant) to parties and Companies covered in the register to be maintained under section 301 of the Act and in our opinion , the premium at which share have been issued is not prejudicial to the interest of the Company.

19. During the period covered by our audit report, the Company has not issued any debentures.

20. The Company has not raised any money from public issue and as such question of end use of money raised by public issue does not arise.

21. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit for the year ended March 31, 2013.

for VAPS & Co.

Chartered Accountants,

Firm Regn. No. 003612 N

(P.K.JAIN)

Place: Delhi Partner

Date: May 30, 2013 M.N. 082515


Mar 31, 2012

1. We have audited the attached Balance Sheet of APL Apollo Tubes Limited as at March 31, 2012, the Statement of Profit & Loss and Cash Flow Statement for the year ended on that date annexed hereto. 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 auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003, as amended by the Companies (Auditor's Report)(Amendment) Order, 2004, issued by the Central Government of India in terms of sub- section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the explanations furnished to us during the course of our audit, we give in the Annexure a statement specified in paragraph 4 and 5 of the said order.

4. Further to our comments in the annexure referred to 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 purpose of our audit.

(b) In our opinion proper books of accounts as required by law has been kept by the Company so far as it appears from our examination of such books.

(c) The Balance Sheet, the Statement of Profit & Loss and Cash Flow Statement referred to in this report are in agreement with the books of account.

(d) In our opinion the Balance Sheet, the Statement of Profit & Loss and Cash Flow Statement are in compliance with the Accounting Standards referred to in sub section (3c) of section 211 of the Companies Act, 1956.

(e) In our opinion and to the best of our information and according to the explanations given to us, the said 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 so far as it relates to the Balance Sheet of the State of Affairs of the Company as at March 31, 2012

ii) In the case of the Statement of Profit & Loss, of the profit of the Company for the year ended on that date, and

iii) In the case of Cash Flow Statement, of the cash flows of the Company for the year ended on that date

(f) Based on representation made by all the Directors of the Company to the Board and the information and explanations as made available to us by the Company, none of the directors of the Company prima- facie have any disqualification as referred to in clause (g) of sub- section (1) of Section 274 of the Companies Act, 1956.

-Annexure to the Auditors' Report

Re: APL Apollo Tubes Limited

Referred to in paragraph 3 of our report of even date

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

b) A substantial portion of the fixed assets has been physically verified by the management during the year and in our opinion the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification.

c) Fixed assets disposed off during the year were not significant. According to the information and explanations given to us, we are of the opinion that the disposal of fixed assets has not affected the going concern status of the Company.

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

b) Tire 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 ts business.

c) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verifications.

3. a) The Company has granted unsecured loan to its wholly owned subsidiary Company covered in the register maintained under Section 301 of the Companies Act, 1956. The Maximum amount involved during the year was Rs.250 Million (Rupees Two Hundred & Fifty Million Only) and the year end balance of loan given to this Company was Rs.250 Million (Rupees Two Hundred & Fifty Million Only). In our opinion terms and conditions on which loans have been given to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

b) The Company has not taken any unsecured loan from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

c) The rate of interest and other terms and conditions of the above-mentioned loans are not prima facie prejudicial to the interest of the Company.

d) The repayment of principal and interest are as per the agreed terms.

4. In our opinion and according to the information and explanations given to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls system.

5. a) In our opinion and according to information and explanations given to us the transactions that needed to be entered in the register maintained under section 301 of the Act have been entered in the register

b) As per information and explanations given to us aforesaid transactions have been made at price which are reasonable having regard to the prevailing market price at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the meaning of provisions of sections of 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rule 1975.

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

8. We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 we are of the opinion that prima facie the prescribed accounts and record have been made and maintained. We have not made however a detailed examination of the record with a view to determine whether they are accurate or complete.

9. (a) According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty, Service Tax, Cess etc. were outstanding as at March 31, 2012 for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us and records of the Company examined by us, the particulars dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty, Service Tax, Cess which have not been deposited on account of any dispute, are as follows:

Name of the Nature of Dues Amount Period to which Authority where the Dispute Statue (Rs. million) dues Related is Pending for Decision

Central Excise Central Excise levied u/s 11A of Central 3.67 07.08.1996 Before the High Court Act, 1944 Excise Act,1944 Judicature of Allahabad

Penalty u/s 11 AC of Central Excise Rules, 1944 read 3.67 07.08.1996 Before the High Court with Rule 9(2) & 173Q of Central Excise Act, 1944. Judicature of Allahabad

Recovery u/s 57 I (4) of Central Excise Act,1944 of modvat 0.35 07.08.1996 Before the High Court credit availed and utilized in contravention of the Judicature of Allahabad provisions of Rule 57F (3) of Central Excise Rules, 1944.

Penalty u/s 11AC of Central Excise Rules, 1944 read 0.35 07.08.1996 Before the High Court

with Rule 9(2) & 173Q of Central Excise Rule, 1944. Judicature of Allahabad

Central Excise duty levied u/s 11 A of Central Excise Act, 1944. 0.45 15.08.1999 CESTAT, New Delhi

Penalty u/s 11 AC of Central Excise Act, 1944. 0.45 15.08.1999 CESTAT, New Delhi

Penalty under Rule 9 (2) and 173Q of Central Excise Rule, 1944. 0.10 15.08.1999 CESTAT, New Delhi

Demand in Terms of section 11A on Zinc Ash/Dross clearance. 1.08 July-08 to CESTAT, New Delhi

Penalty under Rule 25 of Central Excise Rules 2002 read with 0.03 Mar-09 section 11AC of Central Excise Act, 1944.

U.P. Tax on Entry of Goods The constitutional validity of U.P. Tax on Entry of Goods in to 44.76 Nov.-08 to Before the Supreme in to Local areas Act, 2007 Local areas Act, 2007 had been Challenged Mar-11 Court of India

Value Added Tax Reversal of Input tax credit on Consignment /Stock 6.14 Jan.-08 to Commercial Tax Tribunal, Act-2008 Transfer Mar.-08 Ghaziabad

Value Added Tax Reversal of Input tax credit on Consignment /Stock Transfer 17.03 April-10 to Commercial Tax Tribunal, Act-2008 (Provisional Assessment) Sept-10 Ghaziabad

10. The Company has no accumulated losses as at March 31, 2012 and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. In our opinion 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 any financial institution, bank or debenture holders.

12. We have been informed that the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence paragraph 4(XII) of the order s not applicable.

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/society therefore the provisions of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 as amended 2004 are not applicable to the Company.

14. The Company has maintained proper records of transactions and contracts in respect of trading in securities, debentures and other investment and timely entries have been made therein. All shares (except the shares held in the name of nominees of the Company in wholly owned subsidiaries), debentures and other investments have been held by Company in its own name.

15. The Company has given corporate guarantee for securing working capital facilities sanctioned by Banks to its Subsidiary Companies. In our opinion, the terms and conditions on which the Company has given said guarantees are not prejudicial to the interest of the Company.

16. In our opinion and according to information and explanations given to us by the Company the term loans have been applied for the purpose for which they were raised.

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

18. According to the information and explanations given to us, the Company has made allotment of 10,00,000 Equity Shares on preferential basis ( on conversion of equal number share warrant already issued entitling the warrant holder to one equity share of Rs.10 each for each warrant) to parties and Companies covered in the register to be maintained under section 301 of the Act and in our opinion , the premium at which share have been issued is not prejudicial to the inherent of the Company

19. During the period covered by our audit report, the Company has not issued any debentures.

20. The Company has not raised any money from public issue and as such question of end use of money raised by public issue does not arise.

21. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit for the year ended March 31, 2012.

For VAPS & Co

Chartered Accountants,

Firm Regn. No. 003612 N

(P.K.JAIN)

Date : September 3, 2012 Partner

Place Delhi M.N. 082515


Mar 31, 2011

1. We have audited the attached Balance Sheet of APL Apollo Tubes Limited as at March 31, 2011 and also the Profit & Loss Account and Cash Flow Statement for the year ended on that date annexed hereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financia statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of materia misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financia statement presentation. We believe that our audit provides a reasonable basis for our opinion

3. As required by the Companies (Auditors' Report) Order, 2003, as amended by the Companies (Auditor's Report)(Amendment) Order,2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the explanations furnished to us during the course of our audit, we give in the Annexure a statement specified in paragraph 4 and 5 of the said order.

4. Further to our comments in the annexure referred to 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 purpose of our audit.

(b) In our opinion proper books of accounts as required by law has kept by the company so far as it appears from our examination of such books.

(c) The Balance Sheet and Profit & Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of account.

(d) In our opinion the Balance Sheet, the Profit & Loss Account and Cash Flow Statement are in compliance with the Accounting Standards referred to in sub section (3c) of section 211 of the Companies Act, 1956

(e) In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Profit & Loss Account and Cash Flow Statement read together with the notes thereon give the information as required by the Companies Act,1956 in the manner so required and give a true and fair view:

i) In so far as it relates to the Balance Sheet of the State of Affairs of the company as at March 31, 2011,

i) In the case of Profit & Loss Account of the profit of the company for the year ended on that date, and

iii) In the case of Cash Flow Statement of the cash flows of the company for the year ended on that date

(f) Based on representation made by all the Directors of the company to the Board and the information and explanations as made available to us by the company, none of the directors of the company prima-facie have any disqualification as referred to in clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

Referred to in paragraph 3 of our report of even date

1. a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) A substantial portion of the fixed assets has been physically verified by the management during the year and in our opinion the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification

c) Fixed assets disposed off during the year were not significant. According to the information and explanations given to us, we are of the opinion that the disposal of fixed assets has not affected the going concern status of the company.

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

b) 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) In our opinion and according to the information and explanations given to us, the company is maintaining proper records of inventory and no material discrepancies were noticed on physical verifications.

3. a) The company has granted unsecured loan to its wholly owned subsidiary company, covered in the register maintained under Section 301 of the Companies Act, 1956. The Maximum amount involved during the year was Rs. 2,359 Lacs (Rupees Two Thousand Three Hundred and Fifty Nine Lacs Only) and the year end balance of loan given to this company was Rs. 1,491 Lacs (Rupees One Thousand Four Hundred and Ninety One Lacs Only). In our opinion the rate of interest and other terms and conditions on which loans have been given to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

b) The company has not taken any unsecured loan from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956

c) The rate of interest and other terms and conditions of the above-mentioned loan are not prima facie prejudicial to the interest of the company.

d) The repayment of principal and interest are as per the agreed terms.

4. In our opinion and according to the information and explanations given to us there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of nventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls system

5. a) In our opinion and according to information and explanations given to us the transactions that needed to be entered in the register maintained under section 301 of the Act have been entered in the register.

b) As per information and explanations given to us aforesaid transactions have been made at price which are reasonable having regard to the prevailing market price at the relevant time.

6. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits within the meaning of provisions of sections of 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975

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

8. We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the company pursuant to the Rules made by the Centra Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 we are of the opinion that prima facie the prescribed accounts and record have been made and maintained. We have not made however a detailed examination of the record with a view to determine whether they are accurate or complete.

9. (a) According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and other materia statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty, Service Tax, Cess etc. were outstanding as at March 31, 2011 for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us and records of the company examined by us, the particulars dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty, Service Tax, Cess which have not been deposited on account of any dispute, are as follows:

Name of the Nature of Dues Amount (Rs.) Period to which Statue dues Related

Central Excise Central Excise levied u/s 11A of Central Excise 36,70,183 07.08.1996 Act,1944 Act,1944.

,, Penalty u/s 11 AC of Central Excise Rules, 1944 read 36,70,183 07.08.1996 with Rule 9(2) & 173Q of Central Excise Act,1944.

,, Recovery u/s 57 I (4) of Central Excise Act,1944 of 3,52,445 07.08.1996 modvat credit availed and utilised in contravention of the provisions of Rule 57F(3) of Central Excise Rules, 1944.

,, Penalty u/s 11AC of Central Excise Rules, 1944 read 3,52,445 07.08.1996 with Rule 9(2) & 173Q of Central Excise Rules,1944.

Central Excise duty levied u/s 11 A of Central Excise 4,53,676 15.08.1999 Act,1944.

,, Penalty u/s 11 AC of Central Excise Act,1944. 4,53,676 15.08.1999

Penalty under Rule 9(2) and 173Q of Central Excise 1,00,000 15.08.1999 Rules,1944.

,, Penalty u/s 11 AC read with Rule 25 of Central 40,00,000 1.12.2001 to Excise Rule 2001/2002 and 173Q of Central Excise Rules, 1944. 31.03.2004

,, Central Excise duty demanded on Zinc ash/Dross in 6,46,425 May-08 to terms of section 11A of Central Excise Act,1944. July-08

,, Demand in Terms of section 11A on Zinc Ash/Dross 10,83,460 July-08 to clearance. Mar-09 Penalty under Rule 25 of Central Excise Rules 2002 30,000 read with section 11AC of Central Excise Act 1944.

U.P. Tax on The constitutional validity of U.P. Tax on Entry of 4,47,60,767 Nov-08 to Entry of Goods Goods in to Local areas Act, 2007 had been Mar-11 in to Local Challenged. areas Act, 2007

Value Added Reversal of Input tax credit on Consignment / 61,49,143 Jan-08 to Tax Act-2008 Stock Transfer Mar-08

Name of the Statute Authority where the Dispute is Pending for Decision

Central Excise Act,1944 Before the High Court Judicature of Allahabad

,, Before the High Court Judicature of Allahabad

,, Before the High Court Judicature of Allahabad

,, Before the High Court Judicature of Allahabad

,, Commissioner (Appeals) Central Excise, Noida

,, Commissioner (Appeals) Central Excise, Noida

,, Commissioner (Appeals) Central Excise, Noida

,, CESTAT, New Delhi

,, CESTAT, New Delhi

,, CESTAT, New Delhi

U.P. Tax on Entry of Goods in to Local areas Act, 2007 Before the High Court Judicature of Allahabad

Value Added Tax Act-2008 Commercial Tax Tribunal, Ghaziabad

10. The company has no accumulated losses as at March 31, 2011 and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. In our opinion 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 any financial institution, bank or debenture holders.

12. We have been informed that the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence paragraph 4(XII) of the order is not applicable.

13. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditors' Report) Order, 2003 as amended 2004 are not applicable to the company.

14. The Company has maintained proper records of transactions and contracts in respect of trading in securities, debentures and other investment and timely entries have been made therein. All shares (except the shares held in the name of nominees of the company in wholly owned subsidiaries), debentures and other investments have been held by company in its own name.

15. The company has given corporate guarantee for securing working capital facilities sanctioned by Banks to its Subsidiary Companies. In our opinion, the terms and conditions on which the company has given said guarantees are not prejudicial to the interest of the company.

16. In our opinion and according to information and explanations given to us by the company the term loans have been applied for the purpose for which they were raised.

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

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to Parties and Companies covered in the register to be maintained under section 301 of the Act. However, during the year 1,641,953 warrants were allotted on preferential basis to promoters group entity covering in the register to be maintained under Section 301 of the Act, entitling the warrant holder to get one equity share of Rs. 10 each for each warrant, converting withing 18 months from the date of allotment of warrants.

19. During the period covered by our audit report, the company has not issued any debentures.

20. The company has not raised any money from public issue and as such question of end use of money raised by public issue does not arise.

21. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit for the year ended March 31, 2011

for VAPS & Co.

Chartered Accountants,

Firm Regn. No. 003612 N

P K Jain

Place: New Delhi Partner

Date: August 30, 2011 Membership No. 82515


Mar 31, 2010

1. We have audited the attached Balance Sheet of APL Apollo Tubes Limited as at March 31, 2010 and also the Profit & Loss Account and Cash Flow Statement for the year ended on that date annexed hereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the explanations furnished to us during the course of our audit, we give in the Annexure a statement specified in paragraph 4 and 5 of the said order.

4. Further to our comments in the annexure referred to 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 purpose of our audit.

b) In our opinion proper books of accounts as required by law has kept by the Company so far as it appears from our examination of such books.

c) The Balance Sheet and Profit & Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of account.

d) In our opinion the Balance Sheet, the Profit & Loss Account and Cash Flow Statement are in compliance with the Accounting Standards referred to in sub section (3c) of section 211 of the Companies Act, 1956.

e) In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Profit & Loss Account and Cash Flow Statement read together with the notes thereon give the information as required by the Companies Act,1956 in the manner so required and give a true and fair view:

i) In so far as it relates to the Balance Sheet of the State of Affairs of the Company as at March 31, 2010,

ii) In he case of Profit & Loss Account of the profit of the Company for the year ended on that date, and

iii) In the case of Cash Flow Statement of the cash flows of the Company for the year ended on that date.

f) Based on representation made by all the Directors of the Company to the Board and the information and explanations as made available to us by the Company, none of the directors of the Company prima-facie have any disqualification as referred to in clause (g) of sub- section (1) of Section 274 of the Companies Act, 1956.

Annexure to the Auditors Report Re: APL Apollo Tubes Limited (formerly Bihar Tubes Limited) Referred to in paragraph 3 of our report of even date

1. a) The Company has maintained proper records showing full parti -cular including quantitative details and situation of fixed assets.

b) A substantial portion of the fixed assets has been physically verified by the management during the year and in our opinion the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification.

c) Fixed assets disposed off during the year were not significant. According to the information and explanations given to us, we are of the opinion that the disposal of fixed assets has not affected the going concern status of the Company.

2. a) The inventories (excluding stocks with the third parties)

have been physically verified during the year by the management. In respect of inventory lying with the third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

b) 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) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verifications.

3. a) The Company has granted unsecured loan to two

companies (Wholly owned subsidiary companies), firm or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. The Maximum amount involved during the year was ? 2,044 Lacs (Rupees Two Thousand and Forty Four Lacs Only) and the year end balance of loan given to such parties was ? 778 Lacs (Rupees Seven Hundred and Seventy Eight Lacs Only). In our opinion the rate of interest and other terms and conditions on which loans have been given to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

b) The Company has not taken any unsecured loan from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

c) The rate of interest and other terms and conditions of the above-mentioned loan are not prima facie prejudicial to the interest of the Company.

d) The repayment of principal and interest are as per the agreed terms.

4. In our opinion and according to the information and explanations given to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls system.

5. a) In our opinion and according to information and

explanations given to us the transactions that needed to be entered in the register maintained under section 301 of the Act have been entered in the register

b) As per information and explanations given to us aforesaid transactions have been made at price which are reasonable having regard to the prevailing market price at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the meaning of provisions of sections of 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rule 1975.

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

8. We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 we are of the opinion that prima facie the prescribed accounts and record have been made and maintained. We have not made however a detailed examination of the record with a view to determine whether they are accurate or complete.

9. a) According to the records of the Company, the

Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and other material statutory dues applicable to it.

b) According to the information and explanations given to us, no undisputed amount payable in respect of

Income Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty, Service Tax, Cess etc. were outstanding as at March 31, 2010 for a period of more than six months from the date they became payable.

c) According to the information and explanation given to us and records of the Company examined by us, the particulars dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty, Service Tax, Cess which have not been deposited on account of any dispute, are as follows:

Name of the Nature of Dues Statute

Central Excise Central Excise levied u/s 11A of Central Excise

Act, 1944 Act, 1944.

Penalty u/s 11 AC of Central Excise Rules, 1944 read with Rule 9(2) & 173Q of Central Excise Act, 1944.

Recovery u/s 57 I (4) of Central Excise Act,1944 of

modvat credit availed and utilized in contravention

of the provisions of Rule 57F(3) of Central Excise

Rules, 1944.

Penalty u/s 11AC of Central Excise Rules, 1944 read

with Rule 9(2) & 173Q of Central Excise Rule, 1944.

Central Excise duty levied u/s 11 A of Central

Excise Act, 1944.

Penalty u/s 11 AC of Centeral Excise Act, 1944.

Penalty under Rule 9(2) and 173Q of Centeral Excise Rule, 1944.

Penalty u/s 11 AC read with Rule 25 of Central Excise Rule 2001/2002 and 173Q of Central Excise Rule,1944. Central Excise duty on Zinc Ash/Dross demanded under Rule 12 of Cenvat credit Rules 2002/Rule 14 of Cenvat credit/ Rule 2004, read with Rule 6(3)(b) [explanation II ] of cenvat credit Rules 2002/2004 and proviso to section 11 A of Central Excise Act, 1944. Penalty under Rule 13(2) of Cenvat Credit Rules 2001/ Rule 15 of Cenvat credit Rules 2004 read with section 11 AC of Central Excise Act, 1944. Central Excise duty demanded on Zink ash/Dross in terms of section 11A of Central Excise Act, 1944. Central Excise duty demanded on Zink ash/Dross in terms of section 11A of Central Excise Act, 1944. Penalty under Rule 25 of Central Excise Rules 2002 read with section 11AC of Central Excise Act, 1944. Demand in Terms of section 11A on Zinc Ash/ Dross clearance.

Penalty under Rule 25 of Central Excise Rules 2002 read with section 11AC of Central Excise Act, 1944.

U.P. Tax on The constitutional validity of U.P. Tax on Entry of

Entry of Goods Goods in to Local areas Act, 2007 had been

in to Local Challenged.

areas Act, 2007

Name of the amount period to which Authority where the

Statute dues relates dispute is pending for decision Central Excise 36,70,183 07.08.1996 Before the High Court

Act,1944 Judicature of Allahabad

36,70,183 07.08.1996 Before the High Court

Judicature of Allahabad 3,52,445 07.08.1996 Before the High Court

Judicature of Allahabad 3,52,445 07.08.1996 Before the High Court

Judicature of Allahabad 4,53,676 15.08.1999 Commissioner (Appeals)

Central Excise, Noida 4,53,676 15.08.1999 Commissioner (Appeals)

Central Excise, Noida 1,00,000 15.08.1999 Commissioner (Appeals)

Central Excise, Noida 40,00,000 1.12.2001 to CESTAT, New Delhi

31.03.2004 47,17,737 March-04 to CESTAT, New Delhi

September-07

47,17,737 March-04 to CESTAT, New Delhi

September-07

6,46,425 May -08 to CESTAT, New Delhi

July- 08 3,12,663 May -08 to Commissioner (Appeals)

June- 08 Central Excise, Noida

65,000

10,83,460 July-08 to Commissioner (Appeals)

March-09 Central Excise, Noida

30,000 U.P.Taxon 3,96,07,117 November-08 to Deputy Commissioner

Entry of Goods March-10 (Assessment) Commercial

in to Local Tax, Sikandrabad

areas Act,2007

10. The Company has no accumulated losses as at March 31, 2010 and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. In our opinion 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 any financial institution, bank or debenture holders.

12. We have been informed that the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence paragraph 4(XII) of the order is not applicable.

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Companies (auditors report) Order, 2003 as amended 2004 are not applicable to the Company.

14. The Company has maintained proper records of transactions and contracts in respect of trading in securities, debentures and other investment and timely entries have been made therein. All shares, debentures and other investments have been held by Company in its own name.

15. The Company has given corporate guarantee for securing working capital facilities sanctioned by Union Bank of India to its Subsidiary Companies. In our opinion, the terms and conditions on which the Company has given said guarantees are not prejudicial to the interest of the Company.

16. In our opinion and according to information and

explanations given to us by the Company the term loans have been applied for the purpose for which they were raised.

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

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to Parties and Companies covered in the register to be maintained under section 301 of the Act.

19. During the period covered by our audit report, the Company has not issued any debentures.

20. The Company has not raised any money from public issue and as such question of end use of money raised by public issue does not arise.

21. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit for the year ended March 31, 2010.

For VAPS & Co.

Chartered Accountants

Firm Regn. No.: 003612 N

P. K. Jain

Place: New Delhi Partner

Dated: September 1, 2010 Membership No.: 82515



 
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