Ess Dee Aluminium Ltd.

1. Report on the Financial Statements

We have audited the accompanying standalone financial statements of Ess DeeAluminium Limited ("the Company") which comprise the Balance Sheet as atMarch 312016 the Statement of Profit and Loss the Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information.

2. Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgements and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

3. Auditor's Responsibility

3.1 Our responsibility is to express an opinion on these standalone financialstatements based on our audit.

3.2 We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

3.3 We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by Company's Directors as well as evaluating the overall presentation ofthe financial statements.

3.4 We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the financial statements.

4. Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 312016 and its loss and its cash flows for the year ended on that date.

5. Emphasis of Matter

We invite attention to Note 29.02 of the financial statements regarding the contingentliability with regard to the search proceedings under the Income tax Act 1961 includingthe filing of a special leave petition at the Hon'ble Supreme Court and the non-filing ofreturn of income for the financial year 2014-15. The Company has been advised by its taxconsultants that there is no possibility of a liability higher than what has beenprovided.

Our opinion is not modified in respect of these matters.

6. Report on Other Legal and Regulatory Requirements

(i) As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act a statement on the matters specified in the paragraph 3 and 4 of the order isgiven in Annexure A.

(ii) As required by sub-section (3) of section 143 of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany 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 Statementdealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of written representations received from the Directors and taken onrecord by the Board of Directors none of the directors is disqualified as on March 312016 from being appointed as a director in terms of Section 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

(iii) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations in its financialstatements. Refer note no 29.02 of financial statements.;

(ii) Based on the information & explanations provided to us the Company did nothave any long term contracts including derivative contracts for which there were anymaterial foreseeable losses.

(iii) There were no delays in transferring amounts to the Investor Education andProtection Fund during the year by the Company.

ForM PChitale&Co

Chartered Accountants

ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT (Refer to in paragraph 6 (i) of ourreport of even date)

I) a) The Company has maintained unit wise fixed assets records and / or compiled itemwise lists showing particulars of all its fixed assets. The aggregate value shown by theserecords agrees with the gross values of fixed assets as per the books of account of theCompany. However these are not proper records showing full particulars includingquantitative details and situation of fixed assets.

b) Based on the information and explanations furnished to us the Company has notphysically verified fixed assets during the year as per its cycle of verification.Accordingly we are unable to state whether material discrepancies were noticed.

c) According to the information and explanations given to us title deeds of immovableproperties classified as fixed assets are in the name of the company.

ii) Inventories have been physically verified by the Management at regular intervals.In our opinion the frequency of such verification is reasonable. We are informed thatdiscrepancies noticed on such verification were not material as compared to the bookrecords. The discrepancies noticed on such verification have been properly dealt with inthe books of account.

iii) a) Based on the information and explanations furnished to us we are of theopinion that the terms and conditions of unsecured loans granted to its overseassubsidiary Ess Dee Aluminium Pte Ltd. Singapore a party covered in the registermaintained u/s 189 of the Companies Act 2013 is prima facie not prejudicial to theinterest of the Company.

b) In case of the above interest free loan to the overseas subsidiary there is nostipulation regarding repayment of principal.

c) In view of the above the question of the loan and the advances being overdue doesnot arise.

iv) According to the information and explanations given to us and on the basis ofrepresentations of the management which we have relied upon the loan to the overseassubsidiary is not covered by Section 185 or Section 186 of The Companies Act 2013 andhence this clause is not applicable.

v) According to the information and explanations given to us the Company has notaccepted deposits from the public in terms of provisions of sections 73 to 76 of theCompanies Act 2013.

vi) According to the information and explanations given to us pursuant to the rulesprescribed by the Central Government for the maintenance of cost records under section148(1) of the Companies Act 2013 we have broadly reviewed the cost records and are ofthe opinion that prima facie the prescribed records have been made and maintained by theCompany.

vii) a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion undisputed statutory dues including providentfund employees' state insurance income tax sales tax service tax duty of custom dutyof excise value added tax cess have not been regularly deposited with the appropriateauthorities and there have been serious delays in a large number of cases. The extent ofthe arrears of outstanding statutory dues as on the last day of the financial yearconcerned for a period of more than six months from the date they became payable is asunder: -

Statement of Arrears of Statutory Dues Outstanding for More than Six Months

Further the following are not paid:-

Dues of Deferred Sales Tax aggregating Rs. 2098.85 lacs as set out below which isOutstanding as at the end of the year:-

Note: Interest due on above t1383.49 lacs

b) As at the year-end according to the records of the Company and information andexplanations given to us the disputed statutory dues that have not been deposited onaccount of appeal matters pending before the appropriate authorities are as under:-

viii) According to the records of the Company examined by us and the information andexplanations given to us the Company has during the year defaulted in repayment of loansor borrowing to banks financial institutions and debenture holders. The Company has notborrowed any funds from Government. The lender wise details of defaults as at the year-endis as under:-

ix) To the best of our knowledge and belief and according to the information andexplanations given to us term loans availed by the Company were prima facie applied bythe Company for the purposes for which the loans were obtained. The Company has not raisedany funds by way of initial public offer or further public offer (including debtinstruments).

x) According to the information and explanations given to us and on the basis ofrepresentation of the management which we have relied upon no fraud by the Company or onthe company by its officers or employees has been noticed or reported during the year.

xi) According to the information and explanations given to us managerial remunerationhas been paid in accordance with the provisions of section 197 read with Schedule V to theCompanies Act 2013.

xii) Since the company is not a Nidhi company this clause is not applicable.

xiii) According to the information and explanations given to us all transactions withthe related parties are in compliance with section 177 and 188 of Companies Act 2013 asapplicable and the details have been disclosed in the Financial Statements as required bythe applicable accounting standards.

(xiv) According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year (xv) The Company has not entered into any non-cashtransactions with directors or persons connected with them.

(xvi) The Company is not required to be registered under section 45-IAof the ReserveBank of India Act 1934.

Ashutosh Pednekar

Partner

ICAI M No. 41037

Place:Mumbai

Date : May 302016

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Ess DeeAluminium Limited ("the Company'') as of March 31 2016 in conjunction with our auditof the standalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India (the"ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") issued by ICAI and the Standards on Auditing issued byICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting were established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

for M P Chitale & Co

Chartered Accountants

Firm Regn No. 101851W

Ashutosh Pednekar

Partner

ICAI M No. 041037

Place: Mumbai.

Date : May 30 2016