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Aluminium Industries Ltd.

BSE: 503928 Sector: Metals & Mining
NSE: N.A. ISIN Code: N.A.
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Aluminium Industries Ltd. (ALUMINIUMINDS) - Auditors Report

Company auditors report



The Members of


We have audited the accompanying financial statements of THE ALUMINIUMINDUSTRIES LTD("theCompany") which comprise the Balance Sheet as at 31st March 2014the statement of Profit and Loss and the Cash Flow Statement for the year then ended anda summary of significant accounting policies andother explanatory information.

Management's Responsibilities for the Financial Statements

Management is responsible for the preparation of these financial statements that give atrue and fair view of the financial position financial performance and cash flows of theCompany in accordance with the Accounting Standards referred to in sub-section (3C) ofsection 211 of the Companies Act 1956 ("the Act") read with the GeneralCircular 15/2013 dated 13th September 2013 issued by the Ministry of Corporate Affairs inrespect of Sec. 133 of the Companies Act 2013 and in accordance with the accountingprinciples generally accepted in India. This responsibility includes designimplementation and maintenance of internal control relevant to the preparation of thefinancial statements that give a true and fair view and are free of material misstatementwhether due to fraudor error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with standards on auditing issued by theInstitute of Chartered Accountants of India. Those standards require that we comply withthe ethical requirements and plan and perform the audit to obtain reasonable assurancewhether the financial statements are free of material misstatement.

An audit involves performing procedure to obtain audit evidences about the amounts anddisclosures in the financial statements.The procedure selected depends on the auditor'sjudgment including the assessment of risks of material misstatement ofthefinancialstatements whether due tofraud or error. In making those risk assessments; theauditor consider the internal control relevant to the Company's preparation and fairpresentation of the financial statements in order to design audit procedures that areappropriate in the circumstances but not for the purposes of expressing an opinion on theeffectiveness of the entity's internal control. An audit also includes evaluating theappropriateness of accounting policies used and reasonableness of the accounting estimatesmade by the management as well as evaluating the overall presentation ofthe financialstatements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion.

BasisforQualified Opinion:

(i) Attention is invited to Note No. 1 C (b) regarding non-provisioning of arrears ofFixed Cumulative Dividend on Cumulative Redeemable Preference Shares amounting toRs.294.26 Lacs which has resulted in understatement of liability to that extent;

(ii) Attention is invited to Note No. 1 C (c) regarding non-redemption of redeemablepreference shares which is in contravention to Sec. 80 of Act;

(iii) Sales are recognized net of VAT / CST Excise Duty Service Tax which is not inaccordance with the Accounting Standard -9 "Revenue Recognition"[Refer Note No.FofAnnexure I];

(iv) In accordance with the consistent practice being followed by the Companyprovision has been made in respect of estimated total liability for future payment ofGratuity on accrual basis as against on actuarial basis which is not in compliance withtheAccounting Standard 15- "Employee Benefits" (Refer Note No. G (b) ofAnnexureI).

Qualified Opinion:

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effect of the matter described in the Basis for QualifiedOpinion paragraph the financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:

(a) In the case of the Balance sheet of the state of affairs of THE ALUMINIUMINDUSTRIES LTD as at 31st March 2014;and

(b) in the case of the Profit & Loss Account of the loss for the year endedonthatdate.

(c) In the case of Cash Flow Statement of the cash flows for the year endedonthatdate.

Emphasis of Matter

(i) The accumulated losses of the Company have far exceeded its entire net worth andbecame a Sick Industrial Company within the meaning of the Sick Industrial Companies[Special Provisions] Act 1985.

The accounts have however been prepared by the management on a 'Going Concern' basisas the Hon'ble BIFR has approved thescheme (SS- 14)on 12.02.2014.

ii) Attention is invited to Notes No. 29 regarding pending reconciliation and/orconfirmations of accounts of sundry debtors sundry creditors secured loans unsecuredloans banks and loans and advances given;

(iii) Attention is invited to Note No.26 regarding the written off the investment inthe form of shares of Subsidiary companies since the same have been struck off from therecords of Ministry of Corporate affairs.

(iv) Attention is invited to Note No.2 (c) to Notes to Financial Statement regardingnon adjustment in respect of Preference Share Redemption / Conversion Securities PremiumAccount Investment Allowance Reserves Secured Loans and other liabilities etc. in theaccounts of the Company.

Our opinion is not qualified in respect of this matter.

Report on Other Legal & Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2003 issued by the CentralGovernment of India in terms of sub-section (4A) of Section 227 of the Act we report inthe Annexure a statement on the matters specified in the paragraph 4 and 5 of the order.

2. As required by section 227 (3) ofthe Act we report that:

a) We have obtained all the information and explanations to the extent available whichto the best of our knowledge and belief were necessary forthe purpose of our audit;

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books [andproper returnsadequate forthe purpose of our audit have been received from branches not visitedby us.];

c) The Balance Sheet Statement of Profit & Loss and Cash Flow Statement dealt withby this report are in agreement with books of account [andwith the returns receivedfrombranches not visited by us.];

d) Except for the effects of the matter described in Para (i) & (ii) of Basis ofQualified Opinion and the Balance Sheet and Statement of Profit and Loss and Cash FlowStatement dealt with by this report comply with the Accounting Standards referred to inSection 211 (3C) of the Act to the extent applicable;

e) On the basis of written representations received from the Directors as on 31st March2014 and taken on record by the Board of Directors none of the directors of the Companyare disqualified as on 31st March 2014 from being appointed as a director as in terms ofSection 274(1) (g) of the Companies Act 1956.

Date:28th August 2014 For Joseph & Nampiathiri
(Partner) M.No.219427


1. a) The Company is in the process of updating its fixed assets records to showfull particulars including quantitative details and situation of fixed assets.

b) As informed to us no physical verification of assets was carried out by themanagement except at Switchgear Division Mannar; Relays Division Trivandrum andMachinery Division Hyderabad and the differences noticed on physical verification carriedout has been properly dealt with in the books of accounts. We are unable to express anopinion with regard to discrepancies if any which may arise on physical verification ofthe assets at remaining units in respect of quantity usability / readability book valuelocation and other details of the fixed assets of the Company as comparedto book recordsand resultant impact onthe financial statements.

c) The Company has not disposed off substantial part of fixedassets duringthe year.

2. a) In our opinion and according to the information & explanations provided theinventory has been physically verifiedby the management at reasonable intervals during theyear.

b) In our opinion the procedures of physical verification of inventory followed by themanagement are reasonable and adequate in relation to the size of the Company and thenature of its business.

c) In our opinion and accordingly to the information and explanations given to us theCompany is maintaining proper records of inventory. The discrepancies noticed onsuchverification (wherever carried out) as compared to book records were not material inrelation to the operations of the Company and the same have been properly dealt with inthe books of account.

3. In respect of loans granted / taken to / from Companies firms or other partiescovered in the register maintained u/s.301 of the Companies Act 1956:

(a) The Company has not granted any loan secured / unsecured to Companies firms orother parties covered in the register maintained u/s.301 of the Companies Act 1956. Inview of this sub clause (b) (c) & (d) of clause 3are notapplicable

(b) The Company has not taken any loan secured / unsecured from Companies firms orother parties covered in the register maintained u/s.301 of the Companies Act 1956. Inview of this sub clause (e) (f) & (gof clause 3 are not applicable.

4. In our opinion and according to the information and explanations given to usinternal control system needs to be strengthened further to make it commensurate with thesize of the Company and nature of its business forthe purchase of inventory and fixedassets and for the sale of goods andservices.

5. In respect of transactions with Companies firms or other parties covered in theregister maintained u/s. 301 of the Companies Act 1956:

(a) According to the explanation & information provided to us during the yearunder audit there have been no contracts and arrangements entered by the Company whichneeds to be entered in the register maintained u/s.301 of the Companies Act.

(b) In view of clause above sub clause (b) is not applicable

6. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposit from the public during the year to which thedirectives issued by the Reserve Bank of India and the provisions of Section 58A and 58AAor any other relevant provision of the Act and Rules framed there under are applicable.

7. The Company does not have an internal audit system.

8. The Central Government vide their Notification No. 52/10/CAB -2010 dated 03rd June2011 issued Cost Accounting Record Rules 2011 whereby all listed companies engaged inmanufacturing has to maintain in respect of each financial year commencing on or after01 st day of April 2011 cost records for the products of the company as specified in therules. In our opinion the Company is in the process of maintainingthe cost records forthe products of the Company as prescribed in the said rules.

9. a) The Company is not regular in depositing with the appropriate authorities theundisputed statutory dues viz Provident Fund Employees' State Insurance ProfessionalTax during the year and there have been delays ranging between 1 to 3 years the amountswhereof is presently not quantifiable in view ofongoing reconciliation.

b) According to the information and records of the Company made available to us thedues outstanding in respect of Sales Tax /Custom Duty/ Excise Duty / Cess which have notbeen deposited on account of various disputes of the Company are as under:

Particulars Forum where dispute is pending Rs. in lacs
Sales Tax (Consisting of Various State Government Sales Tax Dues Works Contract Tax Dues and Central Govt Sales Tax) Appellate Authority - Up to High Court/ Supreme Court 1502.26 (Includes Interest up to the date of demand notice.)
Customs Duty & Excise Demands Appellate Authority - Up to High Court / Supreme Court 1187.78 (Excludes Interest & penalty due if any.)

10. The Company's accumulated losses as at 31stMarch 2014 is morethan50% of itsnetworth.The Company has incurred cash losses during the financial year and in theimmediately preceding financial year.

11. In our opinion and according to the information and explanations given to us therepayment of dues to financial institutions banks or debenture holders are governed bythe Scheme Sanctioned by BIFR as on 12.02.2014.

12. In our opinion and according to the information and explanations given to us noloans and advances have been granted by the Company on the basis of security by way ofpledge ofshares debentures and other securities.

13. The Company is not a chit fund or a nidhi / mutual benefit fund /society.Therefore clause 4(xiii) of the Companies (Auditor's Report) Order 2003 is notapplicable to the Company.

14. The Company is not dealing or trading in shares securities debentures and otherinvestments.

15. According to the information and explanations given to us and the records examinedby us the Company has not given any guarantee for loans taken by others from banksorfinancial institutions.

16. As informed to us the Company has not availed any term loan duringthepreviousyear.

17. According to the information and explanations given to us and on an overallexamination of the balance sheet of the Company I report that the funds raised onshort-term basis during the year have not been used for long-term investment or viceversa.

18. During the year the Company has not made any preferential allotment of shares toparties and Companies covered in the Register maintained under Section 301 of theCompanies Act 1956.

19. The Company has not issued any debenture during the year.

20. The Company has not raised any money by way of public issue duringtheyear.

21. In our opinion and according to the information and explanations given to us nofraud on or by the Company has been noticed or reported during the year that causes thefinancialstatementstobematerially misstated.

Date:28thAugust 2014 For Joseph &Nampiathiri
Chartered Accountants
(Partner) M.No.219427

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