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Auditor Report of Golkonda Aluminium Extrusion Ltd.

Jun 30, 2015

We have audited the accompanying financial statements of Golkonda Aluminium Extrusions Limited (Formerly known as Alumeco India Extrusion Limited) ("the Company") which comprise the Balance Sheet as at 30thJune, 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, which we have signed under reference to this report.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to 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 specified under 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 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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 thereunder. 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 the 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 control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, 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 on the financial statements.

Basis for Qualified Opinion

The company has accumulated losses of Rs. 161,161,535 as at 30th June 2015 which has exceeded the paid up capital and reserves of Rs. 160,522,805 of the company as at that date. The company has been declared sick on 9th February 2009 and had made a reference to the Board of Industrial & Financial Reconstruction (BIFR) in terms of section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985.During the year, company ceases to be a sick industrial company vide order dated 08 June 2015 within the meaning of Section 3(1)(o) of Sick Industrial Companies Act (SICA) as its net worth has turned positive as on 31st December 2014.However as on 30 June 2015, the net worth has turned negative amounting to Rs.639,730.

Considering the financial position of the Company as at 30th June 2015 and the subsequent financial stress caused by the Alumeco Group withdrawing extended credit terms for supply of raw material, there exists significant uncertainty as to whether the Company will be able to continue as a going concern. The Management is in the process of evaluating available options to rehabilitate the Company. The financial results for the year ended 30th June 2015 have been prepared on a going concern basis and do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or, to amounts or classification of liabilities that may be necessary if the Company is unable to continue as a going concern.

Matter of Emphasis

We draw attention to the following matters as stated in notes to the financial statements

1. Note 2.25(h) which describes the uncertainty related to the outcome of the lawsuit filed against the Company by the workers regarding settlement of compensation amounting to Rs.10,816,903.

2. Note 2.27 (C) with regards to extraordinary item on account of write back of Rs. 96,456,372 (excluding exchange effect) payable to creditors with mutual consent for which direct confirmation is not received till date.

3. Note 2.29 regarding provision of gratuity amounting Rs. 4,945,334 and compensated absences amounting to Rs. 988,708 is provided on actual basis and no actuarial valuation has been made as per the requirement of Accounting Standard -15 - Employee Benefits.

4. As per Sec. 138 of Companies Act, 2013 internal audit has not been carried out by the company as there were no operations in the company during the year.

Our opinion is not qualified in respect of matters as stated above.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph (amount of which is not ascertainable), the 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:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 30 June 2015;

(b) in the case of the Statement of Profit and Loss, of the loss of the Company for the year ended on that date; and

(c) in the case of the 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 (Auditor's Report) 2015 issued by Central Government in terms of sub-section (11) of section 143 of the Companies Act 2013, we give in the annexure a statement on the matters specified in paragraphs 3 and 4 of the order.

2. 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 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 with the Accounting Standards specified underSection 133 ofthe 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 30 June, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 30 June, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

Golkonda Aluminum Extrusions Limited

(Formerly known as Alumeco India Extrusion Limited)

(i) a. The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

b. All the assets have not been physically verified by the Management during the year but there is a phased programme of verification, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. However since the production is closed since July 2013 and it is unlikely to do the physical verification on a regular interval.

(ii) a. There is no inventory except for stores and spares items which are under controlled environment. Hence no physical verification has been done on regular intervals. Therefore clause (ii)(b) of Paragraph 4 of the Order is not applicable.

(iii) According to the information and explanations given to us, the Company has not granted loans, secured or unsecured, to Companies, Firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

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

(v) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of Section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under. Accordingly, Paragraph 3(v) of the Order is not applicable to the Company.

(vi) According to the information and explanation given by the company, the Central government has not specified maintenance of cost records under sub- section (1) of section 148 of Companies act 2013.Further production is closed since July 2013.Therefore clause (vi) of Paragraph 4 of the order is not applicable.

(vii) a. According to the information and explanations given to us and the records of the company examined by us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Value added tax, Cess and any other statutory dues applicable to it as on 30.06.2015 b. According to the information and explanations given to us, there are no dues of Income tax, Sales tax, Wealth Tax, Service tax, Customs duty, Excise duty, Value added tax and Cess which have not been deposited with the appropriate authorities on account of any dispute except as under:

Relevant Income under dispute Forum where dispute is Assessment Year (Rs.) pending

1994- 95 2,03,59,259 Honourable High Court of Andhra Pradesh

1995- 96 51,72,082

2003- 04 2,89,37,712

2004- 05 1,82,56,357

2005- 06 1,85,46,533 ITAT has redirected the case to TPO.

2006- 07 3,51,83,477 The case is pending before TPO

2007- 08 14,61,08,591

2008- 09 12,83,00,000

2010- 11 7,22,81,070 Income Tax Appellate Tribunal

2011- 12 1,09,90,023 Commissioner of Income-Tax (Appeal)

c. According to information and explanation given to us and the records of the company examined by us, company has not declared any dividend since its incorporation. Therefore clause (vii)(c) of Paragraph 4 of the Order is not applicable.

(viii). The accumulated losses at the end of the financial year are more than 50% of its net worth. The company has incurred cash losses of Rs. 1, 03, 84, 478 in the financial year ended on that date.

(ix). According to the information and explanation given to us, the company has no borrowings Therefore clause (ix) of Paragraph 4 of the Order is not applicable.

(x). 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, the terms and conditions whereof are prejudicial to the interest of the company.

(xi). According to the information and explanations given to us, no term loans are availed by the company during the year. Therefore clause (xi) of Paragraph 4 of the Order is not applicable.

(xii) To the best of our knowledge and according to the information and explanation given to us, no fraud by the company and no material fraud on the company has been noticed or reported during the year nor have been informed of such case by the management.

for Laxminiwas & Jain Chartered Accountants Firm's registration number: 001859S

Place: Hyderabad Laxminiwas Sharma Date: 29 August 2015 Partner Membership No: 014244


Jun 30, 2014

We have audited the accompanying financial statements of Alumeco India Extrusion Limited ("the Company"), which comprises of the Balance Sheet as at 30 June 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 (collectively referred to as the "financial statements").

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") to the extent applicable. 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.

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.

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

Basis for Qualified Opinion

As more fully explained in note 2.24 to the financial statements that the Company has accumulated losses of Rs. 271,440,790 as at 30 June 2014 which have exceeded the paid up capital and reserves (Rs. 160,522,805) of the Company at that date. The Company had been declared sick on 9 February 2010 and had made a reference to the Board for Industrial & Financial Reconstruction (BIFR) in terms of Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. It is currently in the process of working out a rehabilitation scheme with the BIFR. Considering the financial position of the Company as at 30 June 2014 and the subsequent financial stress caused by the Alumeco Group withdrawing extended credit terms for supply of raw material, there exists significant uncertainty as to whether the Company will be able to continue as a going concern. The Management is in the process of evaluating available options to rehabilitate the Company under the aegis of BIFR / Operating Agency. The financial results for the year ended 30 June 2014 have been prepared on a going concern basis and do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or, to amounts or classification of liabilities that may be necessary if the Company is unable to continue as a going concern.

Matter of Emphasis

We draw attention to the following matters as stated in notes to the financial statements

1. Note 2.25(h) which describes the uncertainty related to the outcome of the lawsuit filed against the Company by the workers regarding settlement of compensation amounting to Rs.12.20 millions.

2. Note 2.27 (C) regarding waiver of interest payable on overdue bills to group company amounting to Rs. 4.74 millions.

3. Note 2.29 regarding provision of gratuity (Rs. 5.79 millions) and compensated absences (Rs. 1.32 millions) is provided on actual basis and no actuarial valuation has been made as per the requirement of Accounting Standard -15 – Employee Benefits.

4. Note 2.43 which describe reversal of excise provision amounting to Rs.29.53 millions made after obtaining views from excise consultants for the cases pending before Central Excise and Service Tax Appellate Tribunal (CESTAT). However the amount is exhibited in contingent liability.

Our opinion is not qualified in respect of matters as stated above.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph (amount of which is not ascertainable), the 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:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 30 June 2014;

(b) in the case of the Statement of Profit and Loss, of the loss of the Company for the year ended on that date; and

(c) in the case of the 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 (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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, 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, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act, to the extent applicable;

e) On the basis of written representations received from the directors, and taken on record by the Board of Directors, we report that none of the directors is disqualified as at 30 June 2014 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act. ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

The Annexure referred to in the Independent Auditors'' Report to the Members of Alumeco India Extrusion Limited ("the Company") on the financial statements for the year ended 30 June 2014. We report that:

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

(b) The Company has a regular programme of physical verification of it fixed assets. However since the production is closed since July 2013 and it is unlikely to do the physical verification on a regular interval.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) (a) There is no inventory except stores and spares items which are under controlled environment. Hence no physical verification has been done on regular intervals. Therefore Clause (ii)(b) of Paragraph 4 is not applicable.

(c) The Company has maintained proper records of inventory.

(iii) (a) The Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 (''the Act''). Accordingly, clauses 4(iii)(a) to 4 (iii)(g) 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 the explanation, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for purchase of inventories, services and fixed assets and for the sale of goods. The activities of the Company do not involve sale of services. We have not observed any major weakness in the internal control system during the course of the audit.

(v) (a) In our opinion, and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that Section. However no contracts or arrangements are made during the period, so clause (v)(b) of paragraph not applicable

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has no internal audit system as the operations are closed since July 2013.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government of India for maintenance of cost records under Section 209(1)(d) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained till the date of closure of operations. However, we have not made a detailed examination of the records.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Service tax, Customs duty, Excise duty and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities though there has been a slight delay in a few cases. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund and Wealth Tax.

According to the information and explanations given to us, there are no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Service tax, Customs duty, Excise duty and other material statutory dues that were in arrears as at 30 June 2014 for a period of more than six months from the date they became payable except for income tax amounting to Rs. 3,015,288 which is outstanding for more than six months as at 30 June 2014. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund and Wealth Tax.

(b) According to the information and explanations given to us, there are no dues of Service tax and Customs duty which have not been deposited with the appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of Income tax, Sales tax and Excise duty have not been deposited by the Company on account of disputes:

Name of the Nature of Amount Period to which the Statute the Dues (rs) amount relates

Central Excise Interest and 49,064,648 2002- 05 Act, 1944 Penalty (19,532,324)*

Central Sales Central 1,250,000 2001-02 Tax Act, 1956 Sales Tax (1,000,000)*

Central Excise Interest and 7,347,402 2005-06 Act, 1944 Penalty (3,268,218)*

Central Excise Interest and 773,800 2006-11 Act, 1944 Penalty (355,356)*



Name of the Statute Forum where dispute is pending

Central Excise Act, 1944 CESTAT, Bangalore

Central Sales Tax Act, 1956 High court, Andhra Pradesh

Central Excise Act, 1944 CESTAT, Bangalore

Central Excise Act, 1944 CESTAT, Bangalore

* The amounts in parenthesis represent the payment made under protest.

(x) The accumulated losses at the end of the financial year are more than 50% of its net worth. The Company has incurred cash losses in the financial year and its immediately preceding financial year.

(xi) The Company did not have any dues to any financial institution, banks or debenture holders during the year.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund /nidhi/ mutual benefit fund/ society.

(xiv) According to the information and explanations given to us, 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, the term loan taken by the Company in earlier years has been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, no short term funds have been used for long-term purposes.

(xviii) The Company has not made any preferential allotment of shares to companies/firms/parties covered in the register maintained under Section 301 of the Act.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issues.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

for Laxminiwas & Jain Chartered Accountants Firm''s registration number: 001859S

Place: Hyderabad Laxminiwas Sharma Date: 2nd February 2015 Partner Membership No: 014244


Jun 30, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Alumeco India Extrusion Limited ("the Company"), which comprises of the Balance sheet as at 30 June 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 (collectively referred to as the "financial statements"). 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") to the extent applicable. 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. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion. Basis for Qualified Opinion As more fully explained in note 2.25 to the financial statements that the Company has accumulated losses of Rs. 252,526,547 as at 30 June 2013 which have exceeded the paid up capital and reserves (Rs. 160,522,805) of the Company at that date. The Company had been declared sick on 9 February 201 Oand had made a reference to the Board for Industrial & Financial Reconstruction (BIFR) in terms of Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. It is currently in the process of working out a rehabilitation scheme with the BIFR. Considering the financial position of the Company as at 30 June 2013 and the subsequent financial stress caused by the Alumeco Group withdrawing extended credit terms for supply of raw material, there exists significant uncertainty as to whether the Company will be able to continue as a going concern. The Management is in the process of evaluating available options to rehabilitate the Company under the aegis of BIFR / Operating Agency. The financial results for the year ended 30 June 2013 have been prepared on a going concern basis and do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or, to amounts or classification of liabilities that may be necessary if the Company is unable to continue as a going concern. Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the 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:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 30 June 2013;

(b) in the case of the Statement of Profit and Loss, of the loss of the Company for the year ended on that date; and

(c) in the case of the 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 (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. 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 ouraudit;

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, 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, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act, to the extent applicable;

e) on the basis of written representations received from the directors, and taken on record by the Board of Directors, we report that none of the directors is disqualified as at 30 June 2013 from being appointed as a director in terms of clause (g) of sub-section (l)ofSection274oftheAct.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

The Annexure referred to in the Independent Auditors'' Report to the Members of Alumeco India Extrusion Limited ("the Company") on the financial statements for the year ended 30 June 2013. We report that::

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

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified annually.

In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with the programme, all fixed assets were physically verified during the year. No material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) (a) The inventory, except goods-in-transit, has been physically verified by the Management during the year. In our opinion, the frequency of such verification is reasonable.

(b) The procedures for the 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 proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 ("the Act''). Accordingly, clauses 4(iii)(a) to 4 (iii)(g) 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 the explanation that purchases of certain items of inventories are for the Company''s specialised requirements and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control ystem , commensurate with the size of the Company and the nature of its business for purchase of inventories, services and fixed assets and for the sale of goods. The activities of the Company do not involve sale of services. We have not observed any major weakness in the internal control system during the course of the audit.

(v) (a) In our opinion, and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that Section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (v)(a) above and exceeding the value of X 5 lakh with any party during the year are for the Company''s specialised requirements for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided, the same appear reasonable.

(vi) The Company has not accepted any deposits from the public.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government of India for maintenance of cost records under Section 209(l)(d) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(ix) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amouhts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Service tax, Customs duty, Excise duty and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities though there has been a slight delay in a few cases. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund and Wealth Tax. According to the information and explanations given to us, there are no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Service tax, Customs duty, Excise duty and other material statutory dues that were in arrears as at 30 June 2013 for a period of more than six months from the date they became payable except for income tax amounting to X 3,015,288 which is outstanding for more than six months as at 30 June 2013. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund and Wealth Tax.

(x) The accumulated losses at the end of the financial year are more than 50% of its net worth. The Company has incurred cash losses in the financial year and its immediately preceding financial year.

(xi) The Company did not have any dues to any financial institution, banks or debenture holders during the year. (xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund /nidhi/ mutual benefit fund/ society.

(xiv) According to the information and explanations given to us, 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, the term loan taken by the Company in earlier years has been applied for the purpose for which they were raised.

(xvii)According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the short term funds amounting to Rs.166,115,878 have been used for long-term purposes.

(xviii) The Company has not made any preferential allotment of shares to companies/firms/parties covered in the register maintained under Section 301 of the Act.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issues.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

for B S R & Company

Chartered Accountants

Firm''s registration number: 128032W

Place: Hyderabad ZubinShekary

Date: 28''"August 2013 Partner

Membership No: 048814


Jun 30, 2012

1. We have audited the attached Balance Sheet of Alumeco India Extrusion Limited ("the Company") as at 30 June 2012, the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with 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 Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As more fully explained in Note 2.24 of the financial statements, the Company has accumulated losses of Rs.197,852,028 as at 30 June 2012 which have exceeded the paid up capital and reserves (Rs.160,522,805) of the Company at that date. Also, the Company had made a reference to the Board for Industrial & Financial Reconstruction (BIFR) in terms of Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 and had been declared sick on 9 February 2010. It is currently in the process of working out a rehabilitation scheme with the BIFR.

Considering the financial position of the Company as at 30 June 2012, there exists uncertainty as to whether the Company will be able to continue as a going concern. However, based on its ongoing efforts to improve the performance, management believes that the Company will be able to generate cash flows sufficient to meet its liabilities in the near future. Accordingly, the financial statements for the year ended 30 June 2012 have been prepared on a going concern basis and do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or, to amounts or classification of liabilities that may be necessary if the Company is unable to continue as a going concern.

4. As more fully explained in Note 2.40 of the financial statements, during the year ended 30 June 2012 and 30 June 2011, the Company has accrued for managerial remuneration, which exceeds the limits specified in Schedule XIII to the Companies Act, 1956 ('the Act')to the extent of Rs. 9,083 and Rs.143,856 respectively. The Company has applied for Central Government of India's approval for the same, which is pending as at the date of our report. Pending the receipt of such an approval, such excess remuneration has not been paid.

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

6. Further to our comments in the Annexure referred to in paragraph 5 above, we report that:

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

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

(c) the Balance Sheet, the 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 dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act;

(e) on the basis of written representations received from the directors as at 30 June 2012, and taken on record by the Board of Directors, we report that none of the Director is disqualified as at 30 June 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act, on the said date; and

(f) except for the effects of the matters described in paragraph 3 and 4 above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts, 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:

a. in the case of the Balance Sheet, of the state of affairs of the Company as at 30 June 2012;

b. in the case of the Statement of Profit and Loss, of the loss of the Company for the year ended on that date; and

c. in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

The Annexure referred to in the Auditors' report to the members of Alumeco India Extrusion Limited ("the Company") on the financial statements for the year ended 30 June 2012. We report that:

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

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified annually. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with the programme, all fixed assets were physically verified during the year. No material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) (a) The inventory, except goods-in-transit, has been physically verified by the Management during the year. In our opinion, the frequency of such verification is reasonable.

(b) The procedures for the 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 proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 ('the Act'). Accordingly, clauses 4(iii) (a) to 4 (iii) (g) 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 the explanation that purchases of certain items of inventories are for the Company's specialised requirements and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for purchase of inventories, services and fixed assets and for the sale of goods. The activities of the Company do not involve sale of services. We have not observed any major weakness in the internal control system during the course of the audit.

(v) (a) In our opinion, and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that Section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (v)(a) above and exceeding the value of Rs. 5 lakh with any party during the year are for the Company's specialised requirements for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided, the same appear reasonable.

(vi) The Company has not accepted any deposits from the public.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government of India for maintenance of cost records under Section 209(l)(d) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees' State Insurance, Income-tax, Sales-tax, Service tax, Customs duty, Excise duty and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities though there has been a slight delay in a few cases. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund and Wealth Tax. According to the information and explanations given to us, there are no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income- tax, Sales- tax, Service tax, Customs duty, Excise duty and other material statutory dues that were in arrears as at 30 June 2012 for a period of more than six months from the date they became payable except for income tax amounting to Rs.3,015,288 which is outstanding for more than six months as at 30 June 2012. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund and Wealth Tax.

(b) According to the information and explanations given to us, there are no dues of Service tax and Customs duty which have not been deposited with the appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of Income tax, Sales tax and Excise duty have not been deposited by the Company on account of disputes:

Name of the Nature of Amount Period to which the Forum where Statute the Dues (Rs.) amount relates dispute is pending

Central Excise Interest and 49,064,648 2002-05 CESTAT, Act, 1944 Penalty (19,532,324)* Bangalore

Central Sales Central 1,250,000 2001-02 High court, Tax Act,1956 Sales Tax (1,000,000)* Andhra Pradesh

Central Sales Central 3,943,021 2002-03 Appellate Deputy Tax Act, 1956 Sales Tax Commissioner, Hyderabad

Central Excise Interest and 6,037,966 2005-06 Appellate Commissioner, Act, 1944 Penalty (3,268,218)* Hyderabad

Central Sales Central 8,685,252 Previous year Additional Deputy Tax Act,1956 Sales Tax 2003-04 to 2005-06 Commissioner, Hyderabad

* The amounts in parenthesis represent the payment made under protest.

(x) The accumulated losses at the end of the financial year amounting to Rs.197,852,028 have exceeded its networth aggregating to Rs. 160,522,805. The Company has incurred cash losses in the current financial year. However, no cash losses have been incurred in the immediately preceding financial year.

(xi) The Company did not have any dues to any financial institution, banks or debenture holders during the year.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund /nidhi/ mutual benefit fund/ society.

(xiv) According to the information and explanations given to us, 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, the term loan taken by the Company in earlier years has been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the short term funds amounting to Rs.101,546,466 have been used for long-term purposes.

(xviii) The Company has not made any preferential allotment of shares to companies / firms / parties covered in the register maintained under Section 301 of the Act.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issues.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

for B S R & Company

Chartered Accountants

Firm's registration number: 128032W

Place: Hyderabad Zubin Shekary

Date: 29th August 2012 Partner

Membership No: 048814


Jun 30, 2011

1 We have audited the attached balance sheet of Alumeco India Extrusion Limited ("the Company") as at 30 June 2011, the profit and loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with 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 Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As more fully explained in Note 1 of Schedule 18, the Company has accumulated losses of Rs 170,408,290 as at 30 June 2011 which have exceeded the paid up capital and reserves (Rs. 160,522,805) of the Company at that date. Also, the Company had made a reference to the Board for Industrial & Financial Reconstruction (BIFR) in terms of Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 and had been declared sick on 9 February 2010. It is currently in the process of working out a rehabilitation scheme with the BIFR.

Though the Company has made profits for the year ended 30 June 2010 and 30 June 2011, considering the financial position of the Company at 30 June 2011, there exists uncertainty as to whether the Company will be able to continue as a going concern. However, the financial statements for the year ended 30 June 2011 have been prepared on a going concern basis and do not include any adjustment relating to the recoverability and classification of recorded asset amounts, or, to amounts or classification of liabilities that may be necessary if the Company is unable to continue as a going concern.

4. As more fully explained in Note 23 of Schedule 18, during the year ended 30 June 2011, the Company has accrued for managerial remuneration, which exceeds the limits specified in Schedule XIII to the Companies Act, 1956 to the extent of Rs 143,856. The Company has applied for Central Government approval for the same, which is pending as at the date of our report. Pending the receipt of approval, such excess remuneration has not been paid.

5. As required by the Companies (Auditor's Report) Order, 2003, issued by the Ministry of Corporate Affairs 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.

6. Further to our comments in the Annexure referred to in paragraph 5 above, we report that:

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

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

(c) the balance sheet, profit and loss account and the cash flow statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the balance sheet, profit and loss account and the cash flow statement dealt with by this report comply with the accounting standards referred to in sub- section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable;

(e) on the basis of written representations received from the directors as at 30 June 2011, and taken on record by the Board of Directors, we report that none of the Director is disqualified as at 30 June 2011 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 on the said date; and

(f) subject to our comments in paragraph 3 and 4 above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts, 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:

a. in the case of the balance sheet, of the state of affairs of the Company as at 30 June 2011;

b. in the case of the profit and loss account, of the profit for the year ended on that date; and

c. in the case of cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

The Annexure referred to in our auditors' report to the members of Alumeco India Extrusion Limited ("the Company") for the year ended 30 June 2011. We report that:

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

(b) The Company has a regular programmed of physical verification of its fixed assets by which all fixed assets are verified annually. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) (a) The inventory, except goods-in-transit, has been physically verified by the Management during the year. In our opinion, the frequency of such verification is reasonable.

(b) The procedures for the 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 proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, clauses 4(iii) (a) to 4 (iii) (d) of the Order are not applicable to the Company.

(b) The Company has taken a loan from a party covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs 819,367 and the year-end balance of such loan was Rs Nil. The Company has not taken loans from companies or firms covered in the register maintained under Section 301 of the Companies Act, 1956.

(c) In our opinion, the rate of interest and other terms and conditions on which loan have been taken from companies listed in the register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(d) In the case of loan from party listed in the register maintained under Section 301, the Company has been regular in repaying the principal amount as stipulated and in the payment of interest.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that sale of certain goods for the specialised requirements of the buyers and that suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for purchase of inventories and fixed assets and for the sale of goods. The activities of the Company do not involve sale of services. We have not observed any major weakness in the internal control system during the course of audit.

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

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (v)(a) above and exceeding the value of Rs 5 lakh with any party during the year are for the Company's specialised requirements for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided, the same appear reasonable.

(vi) The Company has not accepted any deposits from the public.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government of India for maintenance of cost records under Section 209(l)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees' State Insurance, Income-tax, Sales-tax, Service tax, Customs duty, Excise duty and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities though there has been a slight delay in a few cases. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund and Wealth Tax.

Further, there were no dues on account of Cess under Section 441A of the Companies Act, 1956 since the date from which the aforesaid Section comes into force has not yet been notified by the Central Government of India.

According to the information and explanations given to us, there are no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income- tax, Sales- tax, Service tax, Customs duty, Excise duty and other material statutory dues that were in arrears as at 30 June 2011 fora period of more than six months from the date they became payable except for income tax amounting to Rs. 3,015,288 which is outstanding for more than six months as at 30 June 2011. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund and Wealth Tax.

(b) According to the information and explanations given to us, there are no dues of Wealth tax, Service tax and Customs duty which have not been deposited with the appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of Income tax, Sales tax and Excise duty have not been deposited by the Company on account of disputes.

Name of the Nature of Amount Period to which the Forum where Statute the Dues (Rs.) amount relates dispute is pending

Central Excise Interest and 49,064,648 2002-05 Hyderabad - I

Act, 1944 Penalty (19,532,324) Commissioner

Central Sales Central 1,250,000 2001-02 High court,

Tax Act, 1956 Sales Tax (1,000,000) Andhra Pradesh

Central Sales Central 3,943,021 2002-03 Appellate Deputy

Tax Act, 1956 Sales Tax Commissioner, Hyderabad

Central Excise Interest and 5,513,620 2005-06 Appellate Commissioner,

Act, 1944 Penalty (3,268,218) Hyderabad

Central Sales Defective 32,572,120 2005-06 Additional Commissioner,

Tax Act, 1956 C forms Hyderabad

Central Sales Non- collection 3,747,034 Previous year Additional Commissioner,

Tax Act, 1956 of C forms 2010-11 to 2011-12 Hyderabad

* The amounts in parenthesis represent the payment made under protest.

The Company for the year 2005-06 has received revision notice from Addl. Commissioner of Sales Tax Department claiming escaped turnover of Rs 118,793,462 and proposing tax on them.

(x) The Company has accumulated losses amounting to Rs 170,408,290 at the end of the financial year which exceeds its net worth of Rs 160,522,805. The Company has not incurred cash losses in the current year and immediately preceding financial year.

(xi) The Company did not have any dues to any financial institution, banks or debenture holders during the year.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund /nidhi/ mutual benefit fund/society.

(xiv) According to the information and explanations given to us, 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) The Company did not have any term loans outstanding during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the short term funds amounting to Rs 78,765,791 have been used for long-term purposes.

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

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issues.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

for B S R & Company

Chartered Accountants

Firm's registration number: 128032W

Place: Hyderabad Zubin Shekary

Date: 17 August 2011 Partner

Membership No: 48814


Jun 30, 2010

1. We have audited the attached Balance Sheet of Alumeco India Extrusion Limited ("the Company") (formerly known as Pennar Profiles Limited) as at 30 June 2010, the Profit and Loss account 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 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. The Company has accumulated losses of Rs. 180,817,667as at 30 June 2010 which have exceeded the paid up capital and reserves (Rs. 160,522,805) of the Company at that date. Also, the Company has made a reference to the Board for Industrial & Financial Reconstruction (BIFR) in terms of Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 and has been declared sick on 9 February 2010. It is currently in the process of working out a rehabilitation scheme with the BIFR.

Though the management is making efforts to improve the performance, and though the Company has made profits for the year ended 30 June 2010, considering the financial position of the Company at that date, there exists uncertainty as to whether the Company will be able to continue as a going concern. However, the financial statements for the year ended 30 June 2010

have been prepared on a going concern basis and do not include any adjustment relating to the recoverability and classification of recorded asset amounts, or, to amounts or classification of liabilities that may be necessary if the Company is unable to continue as a going concern.

4. As required by the Companies (Auditors Report) Order, 2003, 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.

5. Further to our comments in the Annexure referred to in paragraph 4 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 ouraudit;

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

(d) in our opinion, the Balance Sheet, Profit and Loss account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub- section (3C) of section 211 of the Companies Act, 1956 to the extent applicable;

(e) on the basis of written representations received from the directors as on 30 June 2010, and taken on record by the Board of Directors, we report that none of the Directors are disqualified as at 30 June 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; and

(f) in our opinion and to the best of our information and according to the explanations given to us, the said accounts, subject to our comments in paragraph 3 above, 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:

a. in the case of the Balance Sheet, of the state of affairs of the Company as at 30 June 2010;

b. in the case of the Profit and Loss account, of the profit for the year ended on that date; and

c. in the case of Cash Flow statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

The Annexure referred to in the auditors report to the members of Alumeco India Extrusion Limited ("the Company") (formerly known as Pennar Profiles Limited) for the year ended 30 June 2010. We report that:

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

2. The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, verification was carried out and no material discrepancies were identified during such verification.

3. Fixed assets disposed off during the year were not substantial.

4. The inventory, except goods-in-transit and stocks lying with third parties, has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. For stocks lying with third parties at the year end, written confirmations have been obtained.

5. In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

6. The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

7. According to the information and explanation given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, paragraphs 4(iii) (a) to (d) of the order are not applicable.

8. During the earlier years, the Company has taken a loan from a party covered in the registermaintainedundersection301ofthe Companies Act, 1956. The maximum amount outstanding during the year was Rs. 2,922,177 and the year end balance of such loan was Rs. 819,367.

9. In our opinion, the rate of interest and other terms and conditions on which loan has been taken from companies listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie prejudicial to the interest of the Company.

10. In the case of loans taken from companies listed in the register maintained under section 301, the Company has been regular in repaying the principal amount as stipulated and in the payment of interest.

11. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchase inventory, fixed assets and sale of goods and services are for the specialised requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations. We have not observed any major weakness in the internal control system during the course of audit.

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

13. In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (12) above and exceeding the value of Rs. 5 lakh with any party during the year are for the Companys specialised requirements for which suitable alternative sources are not

available to obtain comparable quotations. However, on the basis of information and explanations provided, the same appear reasonable.

14. The Company has not accepted any deposits from the public.

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

16. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956, in respect of and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

17.(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Sales-tax, Service tax, Customs duty, Excise duty and other material statutory dues have been generally regularly deposited during the

year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of, Investor Education and Protection Fund and Wealth Tax.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Sales tax, Service tax, Customs duty, Excise duty and other material statutory dues were in arrears as at 30 June 2010 for a period of more than six months from the date they became payable except for income tax amounting to Rs.3,015,288 which is outstanding for more than six months as of 30 June 2010. As explained to us, the Company did not have any dues on account of, Investor Education and Protection Fund and Wealth Tax.

(c) Further, there were no dues on account of cess under Section 441A of the Act, since the date from which the aforesaid section comes into force has not yet been notified by the Central Government.

18. According to the information and explanations given to us, the following dues in respect of Sales tax and Excise duty have not been deposited by the Company with the appropriate authorities on account of dispute:

Name of Nature of Amount (Rs.) Period to Forum where

the statute dues which the dispute is

amount pending related

Central Interest and 34,415,405 2002-05 Hyderabad -1,

Excise Act, Penalty (Tax paid under protest Commissioner

1944 19,532,324)

Central Central 1,250,000 2001-02 High Court,

Sales Tax Sales Tax (Tax paid under protest Andhra Pradesh

Act - 1956 1,000,000)

Central Interest and 4,990,704 2005-06 Appellate Excise Act, Penalty (Tax paid under protest Commissioner 1944 3,268,218)

The Company received orders from the Department of Income Tax under Section 92CA (3) of the Income Tax Act, 1961 disputing the method adopted by the Company in estimating the arms length price for international transactions with its associated parties. Consequently, the department has estimated an additional income of Rs.28,937,712, Rs.18,256,357, Rs.33,216,328 and Rs.35,183,477 for the assessment years 2003-04, 2004-05, 2005- 06 and 2006-07 respectively, against which the Company has preferred an appeal. The cases are currently pending with the Income

Tax Appellete Tribunal for the assessment years 2004-05 and 2005-06. Further, the matters with respect to the assessment years 2005-06 and 2006-07 are currently pending with Commissioner of Income Tax (Appeals) and Dispute Resolution Panel respectively.

Further, Rs. 5,172,082 and Rs. 20,359,269 are under dispute on account of disallowance of interest on term loan, for the assessment years 1994-95 and 1995-96 respectively. The cases are for hearing at High Court.

No income tax demand order has been received by the Company with respect to the above matters.

19. The Company has accumulated losses amounting to Rs. 180,817,667 at the end of the financial year which exceeds its net worth of Rs. 160,522,805. The Company has not incurred cash losses in the current year and has incurred cash losses in the immediately preceding financial year.

20. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers or to any financial institutions. There are no outstanding debentures during the year.

21. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

22. In our opinion, and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/ mutual benefit fund/society.

23. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

24. 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.

25. In our opinion and according to the information and explanations given to us, the term loans obtained by the company were applied for the purposes for which such loans were obtained.

26. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the short term funds amounting to Rs.97,419,341 have been used for long-term purposes.

27. The Company has not made any preferential allotment of shares to companies/ firms/ parties covered in the register maintained under section 301 of the Companies Act, 1956.

28. The Company did not have any outstanding debentures during the year.

29. The Company did not raise any money by publicissuesduringtheyear.

30. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

for B S R & Company

Chartered Accountants

Firm Registration No: 128032W

Hyderabad Sriram Mahalingam

25 August 2010 Partner

Membership No: 049642



 
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