Auditor Report of Clutch Auto Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of M/s Clutch Auto Limited which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and Cash Flow and a summary of significant accounting policies and other explanatory information for the year then ended.

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 the preparation of these financial statements that give a true and fair view of the financial position financial performance and cash flow of the company in accordance with the accounting principles generally accepted in India, including Accounting Standards specified under section 133 of the Act, read with Rule 7 of Companies (Accounts) Rules, 2014. This Responsibility 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, 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.

Auditor's 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 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 misstatements.

An audit involves performing procedures to obtain audit evidences about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatements of the financial statements, whether due to fraud or error. In making those risk assessments the auditors consider internal financial controls relevant to the company's preparation of the financial statements that give a true and fair view in order to design audit procedure 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 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 qualified audit opinion on the standalone financial statements

Basis for Qualified Opinion :-

1. During the year The Company has not provided interest on the secured and unsecured loan availed by it from the Bank and Financial Institutions. Has the company would have provided Interest on the loans amounting to Rs 27.95 crore ,its net loss would have increased by 27.95 crore to Rs 203.68 crore ( accumulated amount 213.20 crore ) and loans & liability would have increased by Rs 27.95 crore to Rs 222.33 crore.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, 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:- a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

b) in the case of Statement of Profit and Loss, of the loss 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 (Auditor's Report) Order, 2015 (-the Order") issued by the central government of India in terms of sub-section (11) of section 143 of the Companies Act 2013, 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 and Companies (Audit and Auditors) Rule 2014, 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 it appears from our examination of those books

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statements dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7of the Companies (Accounts) Rule, 2014.

(e) In our opinion, there are no adverse observations and comments on the financial transactions of the matters which have adverse effect on the functioning of the company

(f) On the basis of the written representations received from the Directors as on March 31, 2015 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 sub section (2) of section 164 of the Companies Act 2013.

(g) In our opinion, there are no qualifications, reservation or adverse remark relating to maintenance of accounts and other matter connected therewith.

(h) 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 financial statements Refer Note IV to the financial statements

ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

The Members of CLUTCH AUTO LIMITED on the Accounts for the period ended on 31st March, 2015)

1) (a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) As explained to us all the assets have been physically verified by the management at regular interval. As informed to us no material discrepancies were noticed on such verification.

2) (a) The inventory has been physically verified during the year by management. 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3) The company has not granted unsecured loans to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act 2013 during the year and in our opinion, hence para (a) and (b) are not applicable.

4) In our opinion and according to the information and explanation given to us, there is 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 with regard to the sale of goods. During the course of our audit, no major weaknesses has been noticed or reported.

5) In our opinion and according to the information and explanation given to us, the company has not accepted any deposits in contravention of the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed there under, where applicable, have been complied with. No order has been passed by the Company Law Board or National Company Law Tribunal or RBI or any court or any other tribunal.

6) According to the information and explanation given to us, government has not prescribed maintenance of cost records under sub section (1) of section 148 of the Companies Act, 2013 for the products of the company.

7) (a) In our opinion the company is not regular in depositing undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities. There is arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable.

Further, since the Central Government has till date not prescribed the amount of cess payable under section 441A of the companies Act 1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

(b) According to information and explanation given to us, there are dues on account of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess, which have not been deposited on account of any dispute, details of which are as under :-

Name of thestatue Name of The Amount (in Rs) Period to Which Status/Forum where dues the amount relate dispute is pending

Central Excise & Service tax Appeal Rs.4,21,36,300/- A.Y. 2007-2008 CESTAT ( Appeals)

Income Tax Appeal Rs.1,07,00,000/- A.Y. 2006-2007 Hon ITAT

Central Excise & Service tax Appeal Rs.3,91,00,000/- A.Y. 2011-2012 Commissioner Excise

Haryana VAT Appeal Rs.18,72,92,242/- A.Y. 2008-09 to2011-2012 DET

(c) According to information and explanation given to us, there is no amount which is required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 and rules made there-under.

8) The Company have accumulated losses more than its net worth at the end of the financial year. Further The Company has incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year . Further on September 12,2014 company has filed an application in BIFR seeking registration u/s 15(1) of Sick Industrial Companies Act 1985

9) According to information and explanations given to us, the company has defaulted in repayment of any dues to a financial institution, and bank during the year of audit.

10)In our opinion and according to information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions. 11) In our opinion and according to information and explanations given to us, the company has not taken any term loan during the year. 12)According to information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For S C GARG &ASSOCIATES Chartered Accountants

Place: New Delhi

(Vipin Kumar Ahuja)

Dated: May 30, 2015

(Partner)

Membership No 522081

8, Ground Floor, Anand Vihar,

Pitampura, New Delhi – 110 034

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Mar 31, 2014

We have audited the accompanying final at statements of Clutch Auto Limited ('the Company"), which comprise the Balance Sheet as at March 31,2014, and the Statement of Prof t 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 to preparation of those than at statements that give a true and far view of the financial position. financial performance and cash flows of The Company in accordance with the Accounting Standands referred to in sub- section (3C) of section 211 of the Companies Act. 1956 ('The Act") road with the Genera Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act. 2013. This responsibility induces the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fais view and are free from Material misstatement, whether cue to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Sl3ndandson Auditing issued by the Institute of Chartered Accountants of India. Those Standands require that we comply with ethical requiem results and plan and before The audit to obtain reasonable assurance about whether the financial statements are free from Material misstatement.

An audit involves performing procedures to obtain audit dividend about .he amounts and disclosures is the final at statements. The- procedures selected depend on the auditors judgment, including .he assessment of the risks of Material misstatement of the financial statements, whether due to fraud or error. In managing those risk assessments, the auditor considers internal control relevant to the Company's preparation and fais 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 the effect vanes of the Company's internal controls. An audit also includes evaluating the appropriateness of accounting policies uses and the reasonableness o; the accounting estimates made by management, as well as evaluating the overall presentation of the financial statutory cants.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis of Qualified Opinion

1 The Company has provided deprecation amounting to Rs 3.61,93.543/- instead of Rs. 6,08.83,328 as calculated according :o schedule XIV of the Companies Ac: 1956. Had the company provided Depreciation amounting to Rs 18,08,83,328/-, its net less would have increased by Rs. 14.43.89.765/- (accumulated amount Rs. 28,49,66,827. and Written Down Value of Fixed assets would have reduced by Rs 12,05.77,042/ (accumulated amount Rs.26.49.56.827.

2. The Company as been showing debts outstanding against original Equipment Markets segment. Those outstanding debts are on account of non- settlement of Warranty Claims forwanded by the Customers of earlier years since incorporation of the Company. During the year, the Company has provided 'or Rs. 55,00,01072.'' on account of Doubtful Deposits in the Balance Sheet so far and Balance warranty deems yet to be determined to be determined & be provided for. Had the company provided the warranty claims in respective preceding financial year, its loss would have increased and Sundry Debtors would have reduced correspondingly.

3 No provision has been made for payment-'liabilities of worker settlement dated 08.07.2013 and The Company has under estimated losses by Rs. 6,05.20,299<'- Had :he Company provided liabilities towands workers, the accumulated losses would have increased by Rs. 6,05,20,299.'-.

4 Due to Workers' agitation and disputes during the year under review, the management could not access certain records-financial data, documents and same have been misplaced, destroyed resulting into our verification incomplete with respect to works at plot No 1 A. Seder 12/4. Mathura Road, haridabad-1211103

5. During the year, the Company has provided for 219 Un- secured Redeemable of Rs.10 Lacs issued :o LTO Mutual Fund in earlier years. The Company had no provided for interest in earlier years and had the Company provided interest in earlier years, the accumulated asses would have been increased by Rs. 17.12 Crores.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effect of the matter described in the Basis for Qualified Opinion paragraph the financial statements give the information required by the Act in the manner so required and give a true and fais view subject to Cur Notes No VI (7) 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 31.2014;

b) In the case of the Statement of Profit and Loss Account, of the Loss for the year ended on that date; and

c) If the seas 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. subject to our Basis for qualifications above - fanning part of this report , we report that:

a) we have obtained all the information and explanations which :o 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 kepi by Lie Company slue as appears from or examination of :hose books

c) the Balance Sheet. Statement of "'refit and Loss, and Ca3h 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 Standands referred under the Act read with the General Circular 1b, 2013 dated 13.h September. 2013 of Lie Ministry o; Corporate Affairs in respect o; Section 133 of the Companies Act. 2013.

e) on the basis of wilier representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms o; clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(Referred to in paragraph 'I & 5 of our report :o the Members of CLUTCH AUTO LIMITED on the Accounts for the year ended on 31st March, 2014)

I. a) The Company is maintaining proper records showing full particulars of fixed assets including quantities details and situation of fixed assets at Bhiwadi unit except tor books Dies and implements, where in most of the cases quantitative details have not been maintained, they were due to labor problems, the record at Mathura Road unit are incomplete.

b} As explained to us. Fixed assets except at Mathura Road Unit have been physically verified by the management at regular intervals and no Material discrepancies were found on such verification.

c) During the year, the company has not disposed of any major part of Fixed assets 8 we are of (he opinion that sale of other fixed assets has net attested the going concern' status of the company.

If a) Subject to the basis of our Qualified Opinion , & According to The Information and explanation given to us. the management of the Company has physically verified The stock at Bhiwadi unit at regular interval and frequency of such verification is reasonable having regand to the si7c of company

b) As explained to us by the management of the company, the company has maintained proper records of the inventory at Bhiwadi unit and there were no material discrepancies noticed on physical verification of stock as compared to the books records.

III. a) The Company has taken unsecured loan from Companies, firm or other parties Covered by register maintained under section 301 or the Companies Act 1956.

To the Maximum amount outstanding a: any time during the year and balance outstanding as at 31.3.2014 was Rs. 3.25 Crore.

The Date of interest and others & term condition of the loan is taken by the company is not prima facial prejudicial to the interest of the company

IV. In our opinion and according to the information and explanations given to us. there is are adequate internal control system commensurate with the size of the company and nature of the business with regands to the purchase of inventory. fixed assets. Or sale of Goods and seines

V a) To the best of our Knowledge arid accounting to The information and explanation given to us . we are of the opinion that particulars of the contracts or arrangements referred to in section 301 of the Act 3nd all the transactions that need to be entered have been entered.

b) In our opinion and according to the information and explanation given to us. (he transactions made in pursuance of contracts or arrangement entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding The value of rupees live lakhs is respects of any party during the year have been made at price/s which are reasonable having regand (o prevailing market price/s at the relevant time.

VI. In our opinion and according to :he information and explanations given to us, The Company has not accepted any deposit in terms of Section 58A and S8AA of The Companies Act, 1956.

VII The Company has adequate internal audit system commensurate with its size a no nature of business

VIII. Subject to the our basis of Qualified Opinion , & According to The Infuriation and explanation provided .o us by management of the Company , the company has maintained Cost Records as prescribed by the Central Govt under section 209(1) (d) of the Companies Act 1956.

IX. a) In our opinion and according to the information and explanations given to us, the Company is not regular in depositing undisputed Statutory Dues with appropriate Authority..

b) According to information and explanations given to us and the records of the company examined by is. there are undisputed Statutory Dues Including Employees Provident F.ind, Employees State Insurance , Income Tax , Value Added Tax . Cus.orn Duly . Excise Duly and oilier Statutory Dues with appropriate authorities outstanding as at 31.3.2014 for a period more than six months from the date, they became payable.

c) According to (he information and explanations given to us and the records of the company examined by us. there are no dues of Sales Tax, incomes Tax. Custom, Wealth Tax. Excise Duty. Cess etc. which have not been deposited on account of any dispute except the following

Status Forum Name of the Annual Period to which Where dispute statue Status (in Rs) the amount relate is Pending Central Excise Appeal Rs. 1.21.36.30/- A.Y. 2007-2008 CES-AT (Appeals) & Service Tax

Income Tax Appeal Rs. 10700000/- 2008-2007 Hon'ble ITAT. Delhi

Central Excise Appeal Rs. 3,91,00,000/- A.Y. 2011-2012 Commissioner

& Service Tax (Faridabad) Haryana Appeal Rs. 18.72.92.242/- 2008-2009 & DET (Faridabad) (VAT) 2009-2010

X) The Accumulated losses (Excluding Reserve ) of the Company as on Balance Sheet dale is Rs. 29,18,68.<192/- which is more than its Not worth. This is 100% erosion of Net worth by accumulated Losses. Further, during the year under review and immediately previous year, the Company has suffered cash losses.

XI) In our opinion .according to the information and explanations given to us and on The basis of the records examined by us . the company has defaulted in repayment of dues to financial institutions, banks etc.

XII) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, so the quest on of maintenance offers does nut aisle.

XIII) In our opinion, the company is not Chit Fund or Nidhi /Mutual Benefit Fund Society. Hence this clause is not applicable to the Company.

XIV) In our opinion, the Company is not dealing in or trading in shares, securities. debentures. arid oilier investments. Accordingly provisions of clause 4(xiv-; of the Companies (Auditor Report) Order, 2003 arc not applicable to the company.

XV) According to the information and Explanation Giver to us. the company has not extended any guarantee during the year for Loans taken by others from any Bank or Financial Institutions

XVI) According to the information and explanation given to us. Term Loans were utilized for the purpose for which the loans were obtained.

XVII) According to information and explanation 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) There were no preferential allotment of shares to parties and companies covered in the register maintained U/S 301 of the Act. hence this clause is not applicable.

XIX) As the company has not issued any debenture during the year as this clause is not applicable.

XX) he company has not raised any money from public issue/s hence this clause is not applicable.

XXI) Subject to our basis of qualified opinion & according to the information and explanations given to us. no fraud on or by the company has been noticed or reported during the course of our audit.

For S C GARG 8, ASSOCIATES

Chartered Accountants

(Vipin Kumar Ahuja)

Partner

Place : New Delhi M. No 522081

Dated : August 14. 2014

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Mar 31, 2013

Report on the Financial-Statements

We have audited the accompany info, financial state men is of Ms, CLUTCH AUTO LIMITED {"the Company") which comprise the Balance Sheet as a: March 31, 2C13. dance that Statement of Profit and Loss and Ca3h Flow Statement for the year the mended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial State man is Management is responsible for the preparation of These financial statements that give a true and fair view of the financial position. financial performance aid cassia lows of the Company in accordance with the Accounting Standards referred to h sub- section (3C of section 211 of the Companies Act. 1956 {"the Act"). This response Polity includes the desk a. dentations and maintenance of internal control relevant to the preparation and presentation of the financial statement give a true and fair view field are free, from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. Won conducted our audit in accordance with the Standards on Auditing issued by the restitute 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 statement sure 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 auditor''s judgment. inclining the assessment of the risks of material misstatement of the financial statements, whether due to fraud or err or. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation or the financial statements in order to cosign 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 manage merit, as well as evading the overall presentation or the financial statements.

We believe that the audit evidence we have obtained is sufficient And appropriate to prairie has s for our audit opinion.

Basis of Qualified Opinion

1. We were appointed as statutory auditor of the company for the Financial year 2012-13 after concussion of the 41st Annual General Meeting of the Company. Due to Labor problem & other shifting related issues, we have not been able to verify personally fixed assets, inventory and other statutory registers at Plot No 1A. sector 273. 12/4 Math unit Road , Faridabad-121003 when is companies Works and Adman Office. In order to Form our opinion, on matters including above, we have relied upon the accounting books maintained in electronic form and some other physical records as well as reports of the previous auditors & information''s and explanations given to us by the Management representative. 2. The Company has provided depreciation amounting to Rs 5,93,90,3067- instead of Rs 17,99,67,348.1''- as calculated according to schedule XIV of the Companies Anjal 1956. Has the company would have provided Depreciation amounting! to Rs 17.99,67,340/-its net loss would have increased to 46,36.46,919/- .and Written Down Value of Fixed assets would have reduced by Rs 12.05,77,042/-

opinion

1 no of opinion dance to the best of our information and according to the explanations given to us. excel for the possible effect of the mater described in the Basis for Opinion paragraph the financial statements give the information required by the Act in the manner so required are give a true and fair view subject to Our Notes No. Vl) conformity will 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 Exit and Loss Account, of the Loss for the year undid en 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 spec filed paragraphs 4 and 5 of the Carder.

2. As required by section 22/(3}of the Act. subject to our Basis for qualifications above - forming pan of this reports , we report that:

a) we have obtained all the information and explanations which to the best of our knowledge and omelet were necessary for the purpose of our a audit;

b) in our opinion proper books of account as required by law have been kept by the Company so fares 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 ore in agreement

d) in our opinion, the Balance Sheet. Statement or Profit and Loss. and Cash Flow Statement comply with the Accounting Standard referred Lo in sub notion (3C) or 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 or record by the Board of Directors. i one 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 Ac:, 1956.

f} Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 44J A of Lie Companies Ac, 1956 nor has it issued any Rules under the- said section, prescribing the manner in with such cess is to be paid. no cess is a due and payable by the Company.

(Referred to ii paragraph 4 & 5 of our report to the Members of CLUTCH AUTO LIMITED on the Accounts ;or the period ended on 31st March. 2013)

I a} Subject to the our basis of Qualified Opinion , The Company is maintaining proper records showing full particulars of fixed assets including quantities details and situation of fixed assets except in the case of "cols and implements , in which in most of the cases quantitative details have not been maintained

b) As explained to us, Fixed assets were physically verified by the management at regular intervals and no material discrepancies whereof und on such verification.

c) During the year, the company has not disposed off any major part of Fixed assets & we are of the opinion that sale of other fixed assets ha sin of effected the going concern status of the company

II a} Subject to their basis of Qualified Opinion , & According to the Information an designation provided to us , the management of the Company as physically verified the stock at regular interval and frequency not such verification is reasonable having regards to the size of company

b) As explained to us by the management of the company, the company has maintained proper records of the inventory and there were no material discrepancies noticed of phys cal verification of stock as compared to the books & records. Ill a) The Company has taken unsecured loan from Companies, firm or other parties Covered by register maintained under section 301 of the Companies Act 1956. The Maximum amount outstanding at any time during the year and balance outstanding as at 31.3.7013 was Rs 4.37 Crones.

The rate of interest and other term condition of the loan taken by the company is not prima facie prejudicial to the interest of the company

IV) In our opinion aid according to the information and explanations given to us, there is an adequate internal contra system commensurate with the size of the company and nature of the business with regards to the purchase of inventory, fixed assets. Or sale of Goods and services

V a} To tie best of our* Knowledge and according to the information and explanation given to us , we are of the opinions the particulars of the contracts or arrangements referred to section 301 of the Act and all the transaction that needs to be entered have been entered-

b} In our opinion and according to the information and explanation given to us. the transaction made In pursuance of contracts or arrangement entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding :he value of rupees five lakhs in respects of any party during tie year have nascent price wines arc reasonable having regard to prevail ling market price at the relevant time.

VI) In our opinion and according to the information and explanations giver to us, The Company has not accepted any deposit in emit of Section 53A and 58AA of the of Companies Act, 1956.

VII) The Company has adequate internal audit system commensurate with its size and nature of business.

VIII Subject to the our basis of Qualified Opinion ,& According

to the Information and explanation provided to us . the management of the Company . The company has Maintained cost records as prescribed by the central Governance section 2009(1) {d) of the companies Act 19SG

IX a} In our opinion and according to the information and explanations given to us. the company is not regular in depositing undisputed Statutory Dues including employees provident tons. Employees state insurance ,

Income Tax .Value added Tax . Custom duty . Excise duty and other statutory Dues with appropriate authority

b} According to information and explanations given to and the records of the company examined by us, there are undisputed Statutory Dues including employees provident fund, Employees state in stinks , Income Tax .Value added Tax , Custom duty . Foxier duty and other statutory Dues wish That perspire liability outstanding as a 31.3.2013 for a period more than six months from the date they oleic payable.

c) According to the information and explanations given to us and If le records of the nonparty expire lilted by us, tierce are no duos of sales tan, income tax custom, wealth ton, excise duty, ceas, shah has not beer deposed on account of any dispute except the following :-

Name of Name of Amount Period to States Form the status The dues (in Rs.) Which the where disable is amount pending relate

Central penalty Rs.4,21,36,300 A.Y. 2007 CI (Appeals) Excise & 2008 service tax

Income Appeal Rs.1,07,00,000 A.Y.2008-07 Honble ITAT Delhi



X) The Company does ret have any accumulated losses as on the data of Balance Sheet; hence further reporting under this clause is not applicable

XI) In our opinion. according to the information and explanations given to us and on the basis of the records examined by us, the company fats default bode in repayment of dues to a financial institution, bank etc

XII) The Company has not granted any loans and advances or the basis of security by way to pledge of shares, debentures and other securities, so the question of maintenance of records does not arise

XIII) In our opinion, the company is not chit fund or Nidhi /mutual benefit fund society. Hence this clause Is not applicable to the Company.

XIV) In our opinion. the Company is not dealing in or trading in shares, securities, debentures, and other investments. According the provisions of cause 4(xiv) of the Companies (Auditor Report) Order, 2003 are not applicable to the company.

XV) According to the Information and Explanation Given to us, The company rams not extended any guarantee during the year for Loans taken by goners from Bank or Financial Institutions

XVI) According to the Information and Explanation Given to us, The Term Loans were bullied fur the purpose For whit the obtained.

XVII) According to the information and explanation given to us any on an overall examination of the Balance sheet of the Company, we report that no funds raised on Short terror basis have been used for Long term Investment.

XVIII) There were no preferential a lotmeet of shares to parties and companies covered in the register maintained U.''S 301 of the Act, hence this clause is not applicable.

XIX) As the company has not issued any departure this clause is not applicable.

XX) Them company has not raised any money from the public issues he ice the is cause is no: applicable,

XXI) According ;o the information aid explanations given to u-S, no fraud on or by the company has been noticed or reported during the course of our audit.

For S C GARG & ASSOCIATES

Chartered Accountants

(Yipin Kumar Ahuja)

Partner

Place: New Delhi M. No 522081

Dated: 31.07.2013

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Mar 31, 2010

We have audited the attached Balance Sheet of M/s. CLUTCH AUTO LIMITED, (hereinafter referred to as the Company) as at March 31, 2010 and also the Profit and Loss Account and Cash Flow Statement of the company for the year ended on that date, annexed thereto. 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 the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003 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 paragraphs 4 & 5 of the said Order.

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 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 and the Profit and Loss Account dealt with by this report are in agreement with the Books of Account.

d) In our opinion, the Balance Sheet and Profit & 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 representations 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 31st March 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956 read with the Companies (Disqualification of Directors under Section 274(1) (g) of the Companies Act, 1956) Rules, 2003.

f) 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 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 and;

(ii) In the case of the Profit & Loss Account, of PROFIT for the Period ended on that date.

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



Annexure to the Auditors Report

(Referred to in Paragraph (3) of the Auditors Report of even date to the members of CLUTCH AUTO LIMITED on the financial statements for the year ended 31-03-2010)

1. a. The Company has maintained proper records showing full particulars, including quantitative details, however the register does not include details of situation of fixed assets (other than Plant & Machinery in certain cases). Further, in case of tools and implements quantitative details have not been indicated in most of the cases.

b. On the basis of avaiblable according to the information and explanations given to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner which, in our opinion, is reasonable, having regard to the size of the Company and nature of the assets. No material discrepancies were noticed on such verification.

c. During the year, the Company has not diposed off any major part of the Plant & Machinery. According to the information and explanation given to us, we are of the opinion that the sale of other fixed assets has not affected th Going concern status of the Compnay.

2. a. The stocks of the finished goods, stores and spare parts have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable having regard to the size of the Company and the nature of its business. Further we are informed that in regards to stock held by job work parties confirmations have been received by the company in many cases.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of stocks 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. As explained to us, there was no material discrepancies noticed on physical verification of stocks, as compared to book records.

3. In our opinion, and according to the information that the company has taken unsecured loans to companies covered in the register maintained under section 301 of the Companies Act, 1956. The Maximum amount oustanding at any time during the year and the balance oustanding as at 31.03.2010 was Rs. 10.70 crores.

The rate of interest and other terms and conditions of the loan taken by the the Company is not prima facie prejudicial to the interest of the Company.

4. In our opinion, and according to the information and explanation given to us, certain items purchased are of special nature for which suitable alternate sources do not exist for obtaining comparative quotations, however there is an adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system. However there is scope for improvement in the internal control procedure in the aforesaid areas.

5. a) To the best of our knowledge and 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 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 under section 301 of the Companies Act 1956, and exceeding the value of Rs. 5 lacs or more in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time where such market prices are available.

6. In our opinion and according to the information and explanations given to us, the Company had not accepted any deposits during the period covered by the Audit Report, within the meaning of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975, as applicable.

7. A firm of Chartered Accountants has conducted the internal audit for the year 31st March 2010 The report points out areas of weakness in various internal control areas, requiring management attention and reviewed by the Audit Committee from time to time. In our opinion, and to the extent of audit done, the Company has an Internal Audit System commensurate with the size and the nature of its business.

8. We have broadly reviewed the records maintained by the company in respect of products where, pursuant to the Rules 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 we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. a. According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is not regular (in certain cases) in depositing undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess with the appropriate authorities. According to the information and explanations given to us, there are no arrears of undisputed statutory dues as on 31-03-2010 which were outstanding for a period of more than six months form the date they become payable. However, liability is not ascertainable in the event of penalty/interest on delayed statutory payment.

b. According to the information and explanations given to us and the records of the company examined by us, the particulars of dues of excise duty and cess as at 31 -03-2010 which have not been deposited on account of a dispute are Central Excise Duty amount Rs. 421.36 Lakhs appeals were pending in Central excise & Service Tax Appellate Tribunal and income tax amount Rs. 23.45 Lakhs appeals were pending in Commissioner of Income Tax Appeals-VI.

c. According to the information and explanations given to us and the records of the compnay examined by us, there are no other dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and cess which has not been deposited on account of any dispute.

10. There are no accumulated losses at the end of the financial year and the company has not incurred any cash losses in the current financial year and preceding financial year.

11. According to the records of the company examined by us and the information and explanation given to us, the company has not defaulted in repayment of dues to any financial institution or bank /debenture holders as at the balance sheet date.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a Chit Fund, Nidhi or mutual benefit Society. Hence the requirements of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14. The company is not a dealer or trader in shares, securities, debentures and other investments.

15. 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.

16. According to the information and explanations given us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

17. On the basis of an overall examination of the balance sheet of the company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment and vice versa.

18. According to the information and explanations given to us, the compnay has made preferential allotment of shares to companies/firms/parties listed in the register maintained under section 301 of the companies Act, 1956.

19. The Company has not issued any debentures. Hence the requirements of clause (xix) of paragraph 4 of the Order are not applicable to the Company.

20. The Company has not raised any money by Public issue during the year.

21. 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 and on behalf of

B. Aggarwal & Co.

Chartered Accountants

Kapil Aggarwal

New Delhi, M.No.82908

11th August, 2010 Partner