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Auditor Report of Atul Auto Ltd.

Mar 31, 2016

We have audited the accompanying financial statements of ATUL AUTO LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

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 preparation and presentation of these financial statement that give a true and fair view of the financial position, financial performance and cash fows of the Company in accordance with the Accounting principles generally accepted in India, including the Accounting Standards specified u/s 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 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 control, 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.

AUDITORS'' 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 there under.

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 disclosures in the financial statements. The procedures selected depend on the auditors'' 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 and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has in place an adequate internal financial controls system over financial reporting and operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by 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.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, 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 March 31, 2016;

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 the Cash Flow Statement, of the cash fows for the year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditors'' Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the "Annexure-A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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 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, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. On the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, 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 financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in "Annexure B ", and

g. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanation given to us;

i. The company has disclosed the impact of pending litigations on its financial position in its financial statements refer note 30 to the financial statements.

ii. The company does not have any long-term contracts including derivative contracts, hence the question of any material foreseeable losses does not arise;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the company.

[Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' in the Independent Auditors'' Report of even date to the members of ATUL AUTO LIMITED on the financial statements for the year ended 31st March, 2016]

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

(b) All the fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the company, the title deeds of immovable properties are in the name of the company.

(ii) The inventory (excluding stocks with third parties and work in progress) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable. Discrepancies noticed during physical verification were not material and the same has been dealt with in the books of account.

(iii) As informed, the company has not granted any loans, secured or unsecured to companies, forms or other parties covered in the register maintained under section 189 of the Act, accordingly, the provisions stated in paragraph 3(iii)(a) and 3(iii)(b) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, the company has not granted any loans or guarantees and hence provisions of Section 185 shall not apply to the company and company has complied with the provisions of section 186 of the act, with respect to the investments made.

(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 provisions of section 73 to 76 of the Act and rules framed there under.

(vi) The Central Government of India has not prescribed the maintenance of cost records for any of the products of the company under sub-section (1) of section 148 of the Act and rules framed there under.

(vii) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the statute Nature of dues Amount Rs, Period to which the amount relates Forum where dispute is pending

20,03,740 2007-08

41,82,480 2008-09 Income Tax Appellate Tribunal

The Income Tax Act, 1961 Income Tax 21,57,820 2009-10

63,76,550 2012-13 Commissioner Appeals

57,15,640 2013-14

4,74,336 2008-09

The Finance Act, 1994 Service Tax 8,65,123 2014-15 Commissioner Appeals

32,97,342 2015-16

16,81,585 2006-07 & 2007-08 CESTAT

The Central Excise Act, Excise Duty 1,03,025 2008-09 & 2009-10 1944 Commissioner Appeals

18,03,871 2011-12 to 2015-16

The Gujarat VAT Act, 2006 VAT 13,54,543 2006-07 VAT Tribunal

(viii) The Company has not obtained any loan from financial institutions or banks during the year. (ix) The Company has not raised money by way of public issue during the year.

(x) During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices 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 case by the management.

(xi) According to the information and explanations given to us and based on our examination of the records of the company, the company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197.

(xii) In our opinion, the Company is not a nidhi company. Accordingly, the provisions of clause (xii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2016 are not applicable to the Company.

(xiii) According to information and explanation given to us and on the basis of books of accounts and other relevant records of the company, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Note 42 of the Financial Statements as required by the applicable accounting standards.

(xiv) Company has not made any private placement or preferential allotment during the year.

(xv) According to information and explanation given to us and on the basis of books of accounts of the company no non cash transaction is entered into by the company during the year.

(xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For and on behalf of the Board of ATUL AUTO LIMITED

(J J Chandra)

Chairman and Managing Director

[DIN: 00057722]

Place : Shapar (Dist. Rajkot)

Date : 30th May, 2016


Mar 31, 2015

We have audited the accompanying standalone financial statements of ATUL AUTO LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

MANAGEMENT'S RESpONSIBILITY FOR The STANDALONE 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 standalone 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 and ensuring their operating effectiveness and the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone 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 standalone 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 standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the standalone 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 standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of 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 standalone 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 standalone financial statements.

OpINION

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, of the state of affairs of the Company as at March 31, 2015, its profit and its cash flows for the year ended on that date.

Report on other legal and regulatory

REQUIREMENTS

(1) As required by the Companies (Auditors' Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

(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 standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. On the basis of written representations received from the directors as on March 31,2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) of the Act;

f. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending

litigations on its financial position in its standalone financial statements - Refer Note 29 on

Contingent Liabilities to the standalone financial statements;

(ii) The Company did not have any long-term contracts including derivative contracts hence, the question of any material foreseeable losses does not arise;

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

[Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' in the Independent Auditor's Report of even date to the members of ATUL AUTO LTD on the standalone financial statements for the year ended March 31, 2015]

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

(b) During the year, fixed assets have not been physically verified by the management. However, there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets.

(ii) (a) The inventory (excluding stocks lying with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(iii) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions stated in paragraph 3 (iii)(a) and 3 (iii)(b) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there exists an 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. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the Company.

(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 provisions of Sections 73 to 76 of the Act and the rules framed there under.

(vi) The Central Government of India has not prescribed the maintenance of cost records for any of the products of the Company under sub-section (1) of Section 148 of the Act and the rules framed there under.

(vii) (a) 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, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, however, there have been slight delay in few cases/ delays in deposit have not been serious.

AND

(a) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, were outstanding, at the year end, for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us, the dues outstanding with respect to income tax, sales tax, wealth tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, on account of any dispute, are as follows:

Name of the statute Nature of dues Amount (Rs.)

The Central Excise Act, 1944 Excise Duty 1,681,585

The Central Excise Act, 1944 Excise Duty 61,825

The Central Excise Act, 1944 Excise Duty 41,200

The Finance Act, 1994 Service Tax 474,336

The Finance Act, 1994 Service Tax 3,016,437

The Finance Act, 1994 Service Tax 404,258

The Finance Act, 1994 Service Tax 2,540,215

The Gujarat Sales Tax Act Sales Tax 1,183,791

The Central Sales Tax Act, 1956 Central Sales Tax 202,531

The Gujarat Value Added Tax Gujarat VAT 1,354,543

The Income Tax Act, 1961 Income Tax 2,023,708

The Income Tax Act, 1961 Income Tax 2,866,340

The Income Tax Act, 1961 Income Tax 2,157,820

Name of the Statute Period to which the Forum where dispute amount relates is pending

The Central Excise Act, 1944 2006-07 & 2007-08 CESTAT

The Central Excise Act, 1944 2008-09 & 2009-10 Commissioner Appeals

The Central Excise Act, 1944 2008-09 Commissioner Appeals

The Finance Act, 1994 2008-09 & 2009-10 Commissioner Appeals

The Finance Act, 1994 2011-12 & 2012-13 Commissioner Appeals

The Finance Act, 1994 2011-12 & 2012-13 Commissioner Appeals

The Finance Act, 1994 2013-14 & 2014-15 Commissioner Appeals

The Gujarat Sales Tax Act 2000- 01 Gujarat High Court

The Central Sales Tax Act, 2001- 02 Gujarat High Court

The Gujarat Value Added Tax 2006- 07 VAT Appellate Tribunal

The Income Tax Act, 1961 2007- 08 Income Tax Appellate Tribunal

The Income Tax Act, 1961 2008- 09 Income Tax Appellate Tribunal

The Income Tax Act, 1961 2009- 10 Income Tax Appellate Tribunal

(c) According to the information and explanations given to us, there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

(viii) The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses in the current and immediately preceding financial year.

(ix) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institution(s), bank(s) or debenture holder(s).

(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.

(xi) The Company has not obtained any term loans.

(xii) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices 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 we have been informed of any such instance by the management.

For Maharishi & Co. Chartered Accountants ICAI Firm Registration No.124872W

Prashant Maharishi Partner M. No: 41452


Mar 31, 2013

We have audited the accompanying financial statements of Atul Auto Limited (''the Company''), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

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. 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.

Auditors'' 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 auditors'' 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 audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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 March 31, 2013;

(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 the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give 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, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e. on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO AUDITORS'' REPORT

[Referred to in paragraph 1 under the heading of "reporting on Other Legal and Regulatory requirements" of our report of even date to the members of ATUL AUTO LIMITED on the financial statements for the year ended March 31, 2013]

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

(b) As explained to us, all the fixed assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, the company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the company is not affected.

(ii) (a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the explanation and information given to us, the procedures of physical verification of inventory 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 is maintaining proper records of inventory and as explained to us, there was no material discrepancies were noticed on physical verification carried out at the end of the year as compared to the book records.

(iii) As informed, the Company has neither granted nor taken 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, the provisions stated in paragraph 4 (iii) (b), (c) and (d) of the order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase 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 weakness in internal control system of the company.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of '' five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) 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 Sections 58A and 58AA of the Act and the rules framed there under. Therefore, the provisions of clause (vi) of paragraph 4 of the order are not applicable to the company.

(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 cost records maintained by the Company pursuant to the companies (Cost Accounting Records) Rules, 2011 prescribed under Section 209(1) (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 with a view to determining whether they are accurate or complete.

(ix) (a) The Company is 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, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth- tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable,

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the Amount Nature of dues statute (Rs.)

The Gujarat Sales Sales Tax 11,83,791 Tax Act

The Central Sales CST 2,02,531 Tax Act, 1956

The Central Excise Excise Duty 16,81,585 Act, 1944

The Central Excise Excise Duty 61,825 Act, 1944

The Central Excise Excise Duty 41,200 Act, 1944

The Finance Act, Service Tax 4,74,336 1994

The Income Tax Act, Income Tax 66,850 1961

The Income tax Act Income tax 67,34,163 1961

The Income Tax Act, Income tax 20,03,740 1961

The Income Tax Act, Income Tax 6,23,260 1961

The Income Tax Act, Income Tax 18,41,315 1961

The Income Tax Act, Income Tax 3,16,505 1961

Name of the Statute Period to which Forum where dispute is the amount relates pending

The Gujarat Sales Tax Act 2000-01 Gujarat High Court

The Central Sales Tax Act 1956 2001-02 Gujarat High Court

The Central Excise Act 1944 2006-07 & 2007-08 CESTAT

The Central Excise Act 1944 2008-09 & 2009-10 Commissioner Appeals

The Central Excise Act 1944 2008-09 Commissioner Appeals

The Finance Act 1994 2008-09 & 2009-10 Commissioner Appeals

The Income Tax Act 1961 2004-05 Income Tax Appellate Tribunal

The Income Tax Act 1961 2002-03, Income tax Appellate 2003-04,2004-05 Tribunal

The Income Tax Act 1961 2007-08 Income Tax Appellate Tribunal

The Income Tax Act 1961 2007-08 Commissioner Appeals

The Income Tax Act 1961 2009-10 Income Tax Appellate Tribunal

The Income Tax Act 1961 2009-10 Income Tax Appellate Tribunal

(x) The company does not have accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted loans & advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In respect of dealing/trading in shares, securities, debentures and other investments, in our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. All the shares, securities, debentures and other investments have been held by the Company, in its own name.

(xv) In our opinion and 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 during the year.

(xvi) The Company has not obtained any term loans 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 no funds raised on short-term basis have been used for long-term investment.

(xviii) According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of The Companies Act.

(xix) According to the information and explanations given to us, no debentures have been issued by the company during the year.

(xx) According to the information and explanations given to us, company has not made any public issue 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 practices 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 case by the management.

For Maharishi & Co.

Chartered Accountants

Firm Registration No.124872W

Prashant Maharishi

Partner

Membership No.041452

On 18th May, 2013 at Shapar (Dist. Rajkot)


Mar 31, 2012

1. We have audited the attached Balance Sheet of ATUL AUTO LTD ('the Company') as at March 31, 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.

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 required by the Companies (Auditor's Report) Order, 2003, (as amended), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of 'The Companies Act, 1956' of India (the 'Act') and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the paragraph 3 above, we report that:

i. 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;

ii. 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;

iii. 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;

iv. 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.

v. On the basis of the written representations received from the directors, as on March 31, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

vi. 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 March 31, 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.

Annexure to Auditors' Report

[Referred to in paragraph 3 of the Auditors' Report of even date to the members of ATUL AUTO LIMITED on the financial statements for the year ended March 31, 2012]

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

(b) All the fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the company during the year.

(ii) (a) The inventory (excluding stocks lying with few third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventory 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 is maintaining proper records of inventory and no material discrepancies were noticed on physical verification carried out at the end of the year.

(iii) (a) As informed, 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, the provisions stated in paragraph 4 (iii)(b),(c) and (d) of the order are not applicable.

(e) The Company had taken loan from its associate company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs 82.96 lacs and the year-end balance of loans taken from such parties was Rs Nil.

(f) In our opinion, the rate of interest and other terms and conditions for such loans are not, prima facie, prejudicial to the interest of the Company.

(g) In respect of the aforesaid loans, the company is regular in repaying the principal amounts as stipulated and has been regular in payment of interest.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase 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 weakness in internal control system of the company.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rs five lacs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) 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 Sections 58A and 58AA of the Act and the rules framed there under.

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

(viii) The Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act for any of the products of the company.

(ix) (a) The Company is 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, cess and other material statutory dues applicable to it. However the company has not deposited Rs 1,14,880 to investor education and protection fund which was due in September 2011.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable, except dues towards investor education and protection fund as stated above.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the Nature of Amount Period to Forum where statute dues (Rs) which the dispute is amount pending relates

The Gujarat Sales Sales Tax 11,83,791 2000-01 Gujarat High Tax Act Court

The Central Sales CST 2,02,531 2001-02 Gujarat High Tax Act, 1956 Court

The Central Excise Duty 16,81,585 2006-07 & CESTAT Excise Act, 1944 2007-08

The Central Excise Duty 61,825 2008-09 & Commissioner Excise Act, 1944 2009-10 Appeals

The Central Excise Duty 41,200 2008-09 Commissioner Excise Act, 1944 Appeals

The Finance Act, Service Tax 4,74,336 2008-09 & Commissioner 1994 2009-10 Appeals

The Income Tax Income Tax 2,11,660 2004-05 Income Tax Act, 1961 Appellate Tribunal

The Income Tax TDS 32,59,470 2002-03 Commissioner Act, 1961 Appeals

The Income Tax TDS 25,22,288 2003-04 Commissioner Act, 1961 Appeals

The Income Tax TDS 9,52,405 2004-05 Commissioner Act, 1961 Appeals

(x) The company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted loans & advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In respect of dealing/trading in shares, securities, debentures and other investments, in our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares, securities, debentures and other investments have been held by the Company, in its own name.

(xv) In our opinion and 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 during the year.

(xvi) The Company has not obtained any term loans 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 no funds raised on short-term basis have been used for long-term investment.

(xviii) According to the information and explanations given to us, the company has made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act. In our opinion, the prices at which shares have been issued is not prejudicial to the interest of the company.

(xix) According to the information and explanations given to us, no debentures have been issued by the company during the year.

(xx) We have verified that the end use of money raised by public issues from the draft prospectus filed with SEBI, the offer document and as disclosed in the notes to the financial statements.

(xxi) During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices 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 case by the management.

For Maharishi & Co.

Chartered Accountants

Firm Registration No. 124872W

Prashant Maharishi

Partner

Membership No.041452

Signed at Rajkot on May 12, 2012


Mar 31, 2011

We have audited the attached Balance Sheet of Atul Auto Limited as at 31st March, 2011, the Profit and Loss Account for the year ended on that date annexed thereto and also the Cash Flow statement for the year ended on that date. 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.

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.

We report as follows:

1. As required by Companies (Auditors Report) Order, 2003 issued by the Central Government in terms of section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matter specified in paragraphs 4 of the said order to the extent applicable to the company.

2. Further to our comments in the Annexure referred to 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 the books;

c. The said Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. In our opinion, the said Balance Sheet, Profit And Loss Account 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;

e. On the basis of written representation received from the Directors as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2011 from being appointed as director in terms of clause (g) of sub section (1) of Section 274 of the Companies Act, 1956;

f. 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 the companys accounting policies and the notes thereto, 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:

i. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;

ii. In the case of Profit and Loss account, of the Profit of the Company for the year ended on that date; and

iii. In the case of Cash flow statement, of the cash flows for the year ended on that date.

Annexure to the Auditors Report - 31st March 2011 (Referred to in Paragraph (1) of our report of even date)

(1) In respect of its fixed assets:

(a) The Company has maintained proper records to show full particulars including the quantitative details and situation of its fixed assets on the basis of available information.

(b) As explained to us, all the assets have been physically verified by the management at phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its business. According to information and explanations given to us, no material discrepancies have been noticed on such verification as compared to the book records.

(c) In our opinion, the Company has not disposed off any substantial part of its fixed assets and going concern status of the Company is not affected.

(2) In respect of its inventories:

(a) The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanation given to us, 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.

(c) The Company has maintained proper records of its inventories. As explained to us, there were no material discrepancies notices on physical verification of inventory as compared to book records.

(3) In respect of the loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

(a) The Company has granted loan to the Company covered under register maintained U/s 301 of the Companies Act, 1956. In respect of said loans, the maximum amount outstanding at any time during the year is Rs. 10.02 Crores and at the year end the balance is nil.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loan granted are not prima facie prejudicial to the interest of the Company.

(c) The principal amounts are repayable on demand and there is no repayment schedule. The associate company to which loan is granted is regular in payment of interest.

(d) In respect of the said loans, the same are repayable on demand and therefore the question of overdue amount does not arise. In respect of interest, there are no overdue amounts.

(e) The Company has not taken any loans Secured or Unsecured, from Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Consequently, the requirement of Clause (iii)(f) and (iii)(g) of paragraph 4 of the Order are not applicable.

(4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and also for the sale of goods. During the course of our audit, we have not observed any major weaknesses in internal controls.

(5) In respect of transactions covered under section 301 of the Companies Act, 1956:

(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 or arrangements entered in the Register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000/- in respect of each party during the year have been made at prices which appear reasonable as per information available with the company.

(6) According to the information and explanations given to us, the Company has not accepted any deposit within the meaning of Section 58-A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed there under from the public. Therefore Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

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

(8) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules made by the Central Government, for maintenance of cost records have been prescribed under Section 209(1) (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 with a view to determining whether they are accurate or complete.

(9) In respect of statutory dues:

(a) According to the records of the company and according to the explanations and information given to us, undisputed statutory dues including Provident Fund, Income tax, Sales Tax, Excise duty, Wealth Tax, Custom duty, Service Tax, Cess, ESI and other statutory dues payable by the company have been generally regularly deposited with appropriate authority. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2011 for a period of more than six months from the date of becoming payable.

(b) The disputed statutory dues aggregating Rs. 1.06/- crores, that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Sr. Name of the Statute Nature of Period to No. the Dues which the amount relates

1 The Gujarat Sales Tax Sales Tax 2002-03

2 The Central Sales Tax Central 2002-03 Act, 1956 Sales Tax

3 The Finance Act, 1994 Service Tax 2007-08

4 2008-09

5 The Central Excise Excise Duty 2006-07 & Act, 1944 2007-08

6 2005-06 & 2006-07

7 The Income Tax Income Tax 2004-05 Act, 1961

8 TDS 2002-03

9 2003-04

10 2004-05

Sr. Forum where dispute is Amount Rs. No. pending

1 High Court 2,02,531

2 High Court 11,83,791

3 CESTAT 51,255

4 Commissioner 4,74,335 (Appeals)

5 Commissioner 16,81,586 (Appeals)

6 1,03,025

7 Income Tax 2,11,660 Appellate Tribunal

8 Commissioner 32,59,470

9 (Appeals) 25,22,288

10 9,52,405

(10) The Company has neither accumulated losses at the end of the financial year nor has it incurred cash losses, both, in the financial year under report and the immediately preceding financial year.

(11) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions and banks. The company has not issued any debentures.

(12) In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

(13) In our opinion, the company is not a chit fund or a nidhi/mutual/benefit fund/society. Therefore, clause 4 (xiii) of Companies (Auditors Report) Order, 2003 is not applicable to the company.

(14) According to information and explanations given to us, the company has not dealt or traded in shares or debentures however in respect of securities being mutual fund the company has maintained proper records of the transactions and contracts in respect of dealing and trading. All the mutual fund investments have been held by the company in its own name.

(15) The Company has given guarantees for loans taken by the associate company from the bank. According to information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prejudicial to the interest of the company. However during the year the guarantees given by the company was satisfied.

(16) In our opinion, the term loans have been applied for the purpose for which they were raised.

(17) According to the information and explanations given to us and on an overall examination of the Financial Statements of the Company and after placing reliance on the reasonable assumptions made by the Company for classification of long term and short term usages of funds, we are of the opinion that, prima facie, short term funds have not been utilized for long term purposes.

(18) The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

(19) The company has not issued any debentures.

(20) The company has not raised any money by public issue during the year.

(21) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.



For Maharishi & Co. Chartered Accountants Firm Reg. No. 124872W

Prashant Maharishi Partner Membership No. 41452

Place: Rajkot Date : 30.05.2011


Mar 31, 2010

We have audited the attached Balance Sheet of Atul Auto Limited as at 31st March, 2010, the Profit and Loss Account for the year ended on that date annexed thereto and also the Cash Flow statement for the year ended on that date. 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.

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.

We report as follows:

1. As required by Companies (Auditors Report) Order, 2003 issued by the Central Government in terms of section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matter specified in paragraphs 4 of the said order to the extent applicable to the company.

2. Further to our comments in the Annexure referred to 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 the books;

c. The said Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. In our opinion, the said Balance Sheet, Profit And Loss Account 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;

e. On the basis of written representation received from the Directors as on 31st March, 2010 and taken on record by the board of Directors, we report that none of the Directors is disqualified as on 31 March, 2010 from being appointed as director in terms of clause (g) of subsection (1) of Section 274 of the Companies Act, 1956;

f. [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 the companys Recounting policies and the notes thereto, 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:

i. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

ii. In the case of Profit and Loss account, of the Profit of the Company for the year ended on that date; and

iii. In the case of Cash flow statement, of the cash flows for the year ended on that date.

Annexure to the Auditors Report 31st March 2010 (Referred to in Paragraph (1) of our report of even date)

(1) (a) The company has maintained proper records to show full particulars including the quantitative details and situation of its fixed assets.

(b) As explained to us, all the assets have been physically verified by the management at reasonable intervals during the year, which in our opinion is reasonable, having regard to the size of the company and nature of its business. According to information and explanations given to us, no material discrepancies have been noticed on such verification as compared to the book records.

(c) The company has not disposed off any substantial part of its fixed assets so as to affect its going concern.

(2) (a) As explained to us, inventories have been physically verified by the management at regular intervals during the year.

(b) In our opinion and according to the information and explanation given to us, 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.

(c) On the basis of examination of the inventory records of the company, we are of the opinion that, the company has maintained proper records of its inventories. There were no material discrepancies notices on physical verification of inventory as compared to book records.

(3) (a) The Company has granted loan to the Company covered under register maintained U/s 301 of the Companies Act, 1956. The loan is granted to one party being associates of the company Khushbu Auto Finance Limited and amount involved in the transactions is Rs. 2.18 Crores. At the end of the year, outstanding loan amount is Rs. 2.85 Crores.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loan granted are not prima facie prejudicial to the interest of the Company.

(c) The associate company to which loan is granted is regular in payment of interest. The loan granted to associate is for long term and being a associate, no period is fixed for repayment, therefore question of overdue amount does not arise.

(d) The Company has not taken any loans Secured or Unsecured, from Companies, firms or other parties covered in the register maintained under Section 301 of the companies Act, 1956.

(4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and also for the sale of goods. During the course of our audit, we have not observed any major weaknesses in internal controls.

(5) In respect of transactions covered under section 301 of the Companies Act, 1956:

(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 or arrangements have been made at prices which are reasonable having regard to prevailing market prices at that time.

(6) The company has not accepted any deposit within the meaning of Section 58-A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed there under from the public.

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

(8) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules made by the Central Government, for maintenance of cost records have been prescribed under Section 209(1) (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 with a view to determining whether they are accurate or complete.

(9) In respect of statutory dues:

(a) According to the records of the company and according to the explanations and information given to us, undisputed statutory dues including Provident Fund, Income tax, Sales Tax, Excise duty, Wealth Tax, Custom duty, Service Tax, Cess, ESI and other statutory dues payable by the company have been generally regularly deposited with appropriate authority. However, according to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2010 for a period of more than six months from the date of becoming payable.

(b) On the basis of our examination of the documents and records, details of dues of Sales Tax, Income Tax which have not been deposited on account of any dispute are given below;

Particulars Financial Year to Forum where Amount Rs.

which it relates dispute is pending

Sales Tax 2002-03 High Court 2,02,531

Central Sales Tax 2002-03 High Court 14,83,791

Excise Duty 2005-06 & 2006-07 Commissioner 1,02,500

(Appeals)

(10) The Company has neither accumulated losses at the end of the financial year nor has it incurred cash losses, both, in the financial year under report and the immediately preceding financial year.

(11) On the basis of the records examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions and banks. The company has not issued any debentures.

(12) As explained to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or any other securities.

(13) In our opinion, the company is not a chit fund or a nidhi/mutual/benefit fund/society. Therefore, clause 4 (xiii) of Companies (Auditors Report) Order, 2003 is not applicable to the company.

(14) According to information and explanations given to us, the company has not dealt or traded in shares, securities, debentures and other investments and therefore question of maintaining proper record does not arise.

(15) The Company has given guarantees for loans taken by the associate company from the bank. According to information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prejudicial to the interest of the company.

(16) In our opinion, the term loans have been applied for the purpose for which they were raised.

(17) According to the information and explanations given to us and on an overall examination of the Financial Statements of the Company and after placing reliance on the reasonable assumptions made by the Company for classification of long term and short term usages of funds, we are of the opinion that, prima facie, short term funds have not been utilized for long term purposes.

(18) The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

(19) The company has not issued any debentures.

(20) The company has not raised any money by public issue during the year.

(21) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For Maharishi & Co.,

Chartered Accountants

Firm Reg. No. 124872W



Prashant Maharishi

Partner

Membership No.: 41452



Place: - Shapar (Veraval)

Date:- 28th May, 2010

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