We have audited the attached Balance sheet of HINDALCO INDUSTRIES
 LIMITED as at 31st March, 2012 and also 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.
 
 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.
 
 As required by the Companies (Auditor''s report) Order, 2003, as amended
 by the Companies (Auditor''s Report MAmendment) Order, 2004 issued by the
 Central Government of India in terms of sub-section (4A) of Section 227
 of the Companies Act, 1956, we enclose in the Annexure, a statement on
 the matters specified in the paragraphs 4 and 5 of the said order.
 
 Further to our comments in the Annexure referred above, we report that:
 
 1) 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;
 
 2) 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;
 
 3) 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;
 
 4) In our opinion, the Balance Sheet, Statement of Profit and Loss and
 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.
 
 5) On the basis of the written representations received from the
 directors as on 31st March, 2012 and taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 31st March, 2012 from being appointed as a Director in terms of clause
 (g) of sub-section (1) of Section 274 of the Companies Act, 1956;
 
 6) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements read
 together with significant accounting policies and notes thereon and
 attached thereto give the information required by the Companies Act,
 1956 (as amended) 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 31st March, 2012;
 
 (b) In the case of the Statement of Profit and Loss, 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.
 
 I.  (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of Fixed
 Assets.
 
 (b) Fixed Assets have been physically verified by the management
 according to a phased program designated to cover all items over a
 period of three years which in our opinion is, reasonable having regard
 to size of the Company and the nature of its assets. Pursuant to the
 program, a portion of fixed assets has been physically verified by the
 management during the year and no material discrepancies between book
 record and physical inventory has been noticed.
 
 (c) No substantial part of fixed assets has been disposed of during the
 year, which has bearing on the going concern assumption.
 
 II.  (a) Physical verification of inventory, (except stocks in transit
 and stocks lying with third parties, confirmation for which has been
 obtained) have been conducted at reasonable intervals during the year
 by the management/ outside agencies.
 
 (b) In our opinion, the procedures of physical verification of
 inventory followed by the management are reasonable and adequate in
 relation to the size of the Company and nature of its business.
 
 (c) The Company has maintained proper records of inventory. No material
 discrepancies were noticed on physical verification of inventory as
 compared to book records.
 
 III. (a) The Company has not granted any loans, secured or unsecured to
 Companies, firms or other parties listed in the register maintained
 under Section 301 of the Companies Act, 1956.
 
 (b) The Company has not taken any loans, secured or unsecured from
 Companies, firms or other parties listed in the register maintained
 under Section 301 of the Companies Act, 1956.
 
 IV.  On the basis of checks carried out during the course of audit and
 as per explanations given to us, we are of the opinion that there is
 adequate internal control system commensurate with the size of the
 Company and the nature of its business; for the purchase of inventory
 and fixed assets and for the sale of goods and services. Further, on
 the basis of our examination of the records of the Company and
 according to the information and explanation given to us, no major
 weakness has been noticed or reported in the internal controls.
 
 V.  (a) In our opinion and according to the information and explanation
 given to us, the transactions that need to be entered into register
 maintained under Section 301 of the Companies Act, 1956 have been so
 entered.
 
 (b) As per the information and explanations give to us and the records
 of the Company examined by us, there are no contract or arrangements
 made for transactions exceeding Rs. 5,00,000 in respect of each party,
 for sale and purchase of goods and services in pursuance of Section 301
 of the Companies Act, 1956.
 
 VI.  The Company has not accepted any deposit from the public within
 the meaning of Section 58A and 58AA of the Companies Act 1956 and the
 rules framed there under.
 
 VII. The Company has an internal audit system, which in our opinion is
 commensurate with the size and nature of the business.
 
 VIII.  We have broadly reviewed the books of accounts maintained by
 Company in respect of product, where pursuant to the rule made by the
 Central Government of India the maintenance of cost records has been
 prescribed under section 209 (1) (d) of the Companies Act 1956 and are
 of the opinion that, prima facie, the prescribed records have been
 maintained. We have not, however, made a detailed examination of the
 records with a view to determine whether they are accurate or complete.
 
 IX.  (a) According to the information and explanations given to us and
 on the basis of our examination of the books of account, the Company is
 generally regular in depositing undisputed statutory dues including
 Provident Fund, Investor Education and Protection Fund, Employee''s
 State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax,
 Customs Duty, Excise Duty, Cess and other statutory dues with the
 appropriate authorities. According to the information and explanations
 given to us and the records of the Company examined by us, no
 undisputed statutory dues as above were outstanding as at 31st March,
 2012 for a period of more than 6 months from the date they became
 payable.
 
 (b) According to the information and explanations given to us, the dues
 of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty,
 Service Tax and Cess which have not been deposited on account of any
 dispute and the forum where the dispute is pending as on 31st March
 2012 are as under:
 
 Name of the                   Nature of               Amount
 Statue                        Dues                   (Rs. in Crore)
 
 Central Sales Tax Act         Sales Tax                  10.19
 and Local Sales Tax Act
 
                                                          10.74
 
                                                           22.61
 
 The Central Excise            Excise Duty                155.31
 Act, 1944
                                                           26.17
 
                                                           26.66 
 
                                                           45.04
 
 The Service Tax under         Service Tax                 18.42
 the Finance Act, 1994
 
                                                            5.77
 
 The Customs Act, 1962         Customs Act                 20.46
 
 Adhosanrachna Vikas           Chhattisgarh                 0.34
 Evam Parayavaran              Development and
 Upkar Adhiniyam, 2005         Environment Cess
 
 Shakti Nagar Special          Cess on Coal                 7.56
 Area Development
 Authority
 
 Name of the 
 Statue             Period to which the 
                    amount relates            Forum where the disputes
                                              are pending
 
 Central Sales
 Tax Act, and 
 Local Sales
 Tax Act            1986-1987, 1989-1990, 
                    1990-1991, 1992-1993,     The High Court 
                    1995-1996, 2003-2004, 
                    2004-2005, 2005-2006,
                    2006-2007
 
                    1998-1999, 1999-2000, 
                    2000-2001, 2002-2003,     Tribunal
                    2003-2004, 2004-2005, 
                    2005-2006, 2006-2007,
                    2007-2008, 2008-2009
 
                    1991-1992, 1994-1995, 
                    1996-1997, 1997-1998,     Asst. Commissioner/
                    1998-1999, 1999-2000, 
                    2000-2001, 2001-2002,     Commissioner/ Revisionary
                    2002-2003, 2003-2004, 
                    2004-2005, 2005-2006,     Authorities Level
                    2006-2007, 2007-2008, 
                    2008-2009, 2009-2010,
                    2010-11
 
 The Central Excise
 Act,1944           2000-2001, 2001-2002, 
                    2002-2003, 2003-2004,     The Supreme Court
                    2004-2005, 2005-2006, 
                    2006-2007, 2007-2008
 
                    1992-1993, 1994-1995, 
                    2000-2001, 2001-2002,     The High Court
                    2002-2003, 2008-2009, 
                    2009-2010, 2010-2011,
                    2011-2012
 
                    1988-1990, 1991-1992,
                    1993-1994, 2000-2001,     Customs, Excise and Service
                    2001-2002, 2002-2003, 
                    2003-2004, 2004-2005,     Tax Appellate Tribunal
                                              (CESTAT)
                    2005-2006, 2006-2007, 
                    2007-2008, 2008-2009,
                    2009-2010- 2010-2011
 
                    1987-1988, 1997-1998, 
                    1998-1999, 1999-2000,     Asst. Commissioner/
                    2000-2001, 2001-2002, 
                    2002-2003, 2003-2004,     Commissioner/ Revisionary
                    2004-2005, 2005-2006,
                    2006-2007, 2007-2008,     Authorities Level
                    2008-2009, 2009-2010
 
 The Service Tax 
 Under the 
 Finance Act,1944   1997-2000, 2004-2011      Customs, Excise and Service
                                              Tax Appellate Tribunal
                                             (CESTAT)
 
                    2001-2002, 2005-2006, 
                    2006-2007, 2008-2009,     Asst. Commissioner/
                    2009-2010, 2010-2011      Commissioner/ Revisionary
                                              Authorities Level
 
 The Customs Act,
 1962               2003-2004, 2004-2005,
                    2005-2006 and 2006-2007   Asst. Commissioner/
                    2011-2012                 Commissioner/ Revisionary
                                              Authorities Level
 
 Adhosanrachna 
 Vikas Evam
 Parayavaran
 Upkar Adhiniyam
 2005               2005-2012                 The Supreme Court 
 
 Shakti Nagar
 Special Area
 Development
 Authority          1997-2012                 The Supreme Court
 
 X.  The Company does not have any accumulated losses and has not
 incurred cash losses in the current financial year and in the
 immediately preceding financial year.
 
 XI.  The Company has not defaulted in repayment of dues to Financial
 Institutions or Banks or Debenture holders.
 
 XII. According to the information and explanations given to us, the
 Company has not granted any loans or advances on the basis of security
 by way of pledge of Shares, Debentures and other Securities.
 
 XIII.  The provisions of any special statute applicable to chit
 fund/nidhi/mutual benefit fund/societies are not applicable to the
 Company.
 
 XIV. The Company is not in the business of dealing or trading in
 shares. The Company has maintained proper records of transactions and
 contracts in respect of Shares, Securities, Debentures and other
 Investments and timely entries have been made therein. The Shares,
 Securities, Debentures and other Investments have been held by the
 Company, in its own name except to the extent of exemption, granted
 under Section 49 of the Companies Act, 1956.
 
 XV.  In our opinion and according to the information and explanations
 given to us, the terms and conditions on which the Company has given
 Corporate guarantees for loans taken by its Subsidiaries and Joint
 Ventures from Banks and Financial Institutions (including foreign
 banks) are not prima facie prejudicial to the interest of the Company.
 
 XVI. Based on information and explanations given to us and records of
 the Company examined by us, in our opinion, the term loans have been
 applied for the purpose for which they were obtained. Though unutilized
 funds which were not required for immediate use for capital expenditure
 have been temporarily invested in mutual funds / bank deposit.
 
 XVII.  According to the information and explanations given to us and on
 the basis of our overall examination of the Balance Sheet and Cash Flow
 Statement, we report that no funds raised on short term basis have been
 used for long term investment of the Company.
 
 XVIII.  During the year under Audit, the Company has not made
 preferential allotment of equity shares. However the Company has made
 preferential allotments of warrants to Companies covered in the
 register maintained under Section 301 of the Companies Act. The Price
 at which the warrants have been issued has been determined as per the
 Securities and Exchange Board Of India (Issue Of Capital and Disclosure
 Requirements) Regulations, 2009 which in our opinion is not prejudicial
 to the interest of the Company.
 
 XIX. During the year under audit, the Company has neither issued any
 debentures nor was any debentures outstanding at the year end.
 
 XX.  The Company has not raised any money by Public Issues during the
 year.
 
 XXI. During the course of our examination of the books and records of
 the Company, carried out in accordance with the Generally Accepted
 Auditing Practice in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such cases by the Management.
 
                                                   For SINGHI & CO.
 
 Camp: Mumbai                                Chartered Accountants
 
 Dated: the 27th day of June, 2012    Firm Registration No.302049E
 
                                                      RAJIV SINGHI
 
 1-B, Old Post Office Street,                             (Partner)
 
 Kolkata-700 001                              Membership No. 53518