Aluminium Industries Ltd

To

The Members

Your directors present their Sixty Third Annual Report together with the audited statement of accounts of the Company for the financial year ended 31st March 2009.

1. Financial Results

(Rs Lakhs)

2. Operations

Gross Turnover & Other Income of the Company during the year increased to Rs.1667 Lakhs from Rs.1302 Lakhs of the previous year

3. Finance

The Company's facing financial problems because of its sick status and finding it difficult to pay statutory liabilities and labour dues. The Board has already initiated action to restart all the divisions in a phased manner. The rehabilitation scheme submitted to BIFR envisages payment of statutory liabilities, employee dues and other liabilities in a phased manner.

4. Share Capital

There were no changes in the Share Capital (Equity / Preference) of the Company. The Preference Share Capital of the Company were redeemable in the financial year 2000 but could not redeemed due to non-availability of financial resources.These Preference shares are proposed to be redeemed in accordance with the comprehensive rehabilitation scheme submitted to the BIFR.

5. Debentures

2,00,000 nos. secured debentures of Rs.100 each, due for redemption in the year 1998-1999. These debentures are proposed to be redeemed in accordance with the comprehensive rehabilitation scheme submitted to the BIFR.

6. Fixed Deposits

The Company has not accepted any fixed deposits during the year and, as such, no amount of principal or interest was outstanding as on the date of the balance sheet.

7. Research & Development

The Company has taken necessary steps for improving quality of products and increasing the product "range. The Company has planned to invest substantially and to explore possibility of bringing new technologies to strengthen the R&D activities of the Company upon sanction of the DRS.

8. Rehabilitation

The Promoters of the Company submitted a draft revival scheme (DRS) to BIFR. The Company shall be updating the same incorporating the figures on the-basis of audited accounts of 2009. Majority of the secured creditors (including debenture holders) have conveyed their in-principal support to the DRS and have intimated the same to Operating agency at their meeting held on 21.04.2009. Remaining secured creditors are being pursued and we expect to get their consent on the same. Majority of the workers unions of the Company have also agreed to accept the DRS with certain changes and have communicated the same for incorporating., the same in the DRS. Government of Kerala has also agreed to consider need based concessions to the Company.

9. Directors responsibility statement

i) The Directors confirm that in the preparation of the annual accounts the applicable accounting standards has been followed along with proper explanation relating to material departures.

ii) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and on the Profit and Loss account of the Company for that year subject to the observation that adjustments in respects of non-operating units have been made on the basis of records and information available with the Company.

iii) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of this act for safeguarding the assets of the Company in the working units namely, Relays Division at Trivandrum, Switchgear Division at Mannar and Machinery Division at Hyderabad and efforts are being made to maintain proper records and information in respect of remaining units and for preventing and detecting fraud and other irregularities.

iv) The annual accounts have been prepared on a going concern basis in respects of the working units and necessary provisions; have also been made for non-working units.

10. Directors

In accordance with the provisions of section 256 of the Companies Act, 1956, Mr. Rajendra Somani and Mr. Susheel Somani Directors, retire by rotation, being eligible have offered themselves for re-appointment as Director. Your Directors recommend their appointment as Director of the Company.

11. Corporate Governance

A separate report on the practices followed by the Company on Corporate Governance is annexed and forms part of this report.

12. Listing of Shares / Corporate Governance

The Company's Equity Shares are listed on the Mumbai Stock Exchange (BSE), Cochin Stock Exchange and Chennai Stock Exchange. However, these shares have been delisted / suspended for trading by the.Stock Exchanges due to non compliances with the terms of the listing agreements since .1997. The management proposing to re-listing of shares under the DRS. Report on Corporate Governance together with the Management discussion and Analysis is annexed hereto and forming part of this Report.

13. Audit

The qualifications in paragraph 4 and paragraph 5 of the attached Auditor's Report read with the notes on accounts are self explanatory except those points which are being explained in the addendum to the director report

M/s. Joseph and Nampiathiri, Chartered Accountants, statutory auditors of the Company shall be retiring at the ensuing Annual General Meeting and being- eligible, offer themselves for re-appointment. The Audit Committee of directors at its meeting held on 31^st August, 2009 has recommended to continue the appointment of M/s. Joseph and Nampiathiri as Statutory Auditors of the Company for the financial year 2009-10.

14. Personnel

Industrial Relations were generally cordial during the year under report. Operations at switchgear divisions re-started after mutual discussions with the workers unions and changes in the senior management staff.

The Company did not employ during the year under review any employee whose particulars are required to be furnished under section 217(2A) of the Companies Act, 1956.

15. Conservation of Energy

As many of the units were not in operation, there is nothing significant to report in respects of conservation and efficient utilisation of energy.

16. Acknowledgement

Your Directors wish to place on record their appreciation for the good work of all the employees.

Your Directors also acknowledge the continued support received from the Lenders, State Governments of Kerala, Andhra Pradesh and Orissa, Customers, Suppliers and Shareholders during the year under review. Their continued support is vital and critical for the success of the early rehabilitation of the Company.

For and on behalf of the Board of Directors