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Auditor Report of G S Auto International Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of G.S. Auto International Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, and the Statement of Profit & 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 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 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 the design, implementation and maintenance of adequate internal 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.

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, as 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 auditor's 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 of the 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 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 on financial statement.

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 of the state of affairs of the Company as at March 31, 2015, its loss and its 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 Governments of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.

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 aforesaid 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 financial Statements - Refer Note 34 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.

Annexure 1 referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements" of our report of even date:

Re: G.S. Auto International Limited ("the Company")

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

b) The fixed assets of the Company have been physically verified by the Management in accordance with a planned program of physical verification which, in our opinion is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies noticed on such verification were not material and have been properly dealt with in the books of accounts. In our opinion, the frequency of physical verification is reasonable.

(ii) a) The inventory of the Company has been physically verified by the management during the year. In our opinion the frequency of the verification is reasonable. Inventories lying with outside parties have been confirmed by them as at year end.

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. Discrepancies noticed on physical verification of Inventories were not material and have been properly dealt with in the books of accounts.

(iii) The Company has not granted any loans, secured or unsecured, to any of the companies, firms or other parties covered in the register maintained under section 189 of the Act. Therefore the provisions of the clause 3(iii) (a) and (b) of the said order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations 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 for the sale of goods & services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

(v) The Company has not accepted any deposits with in the meanings of Section 73 of the Act and rules framed there under.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government, for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacture of auto components and 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 maintained as aforesaid.

(vii) a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Value Added Tax, 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, employees' state insurance, income tax, sales tax, wealth tax, service tax, Sales Tax, customs duty, excise duty, Value Added Tax, cess and other material 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 the Income Tax on account of any dispute , are as follows:-

Name of the Nature of period to which Amount Forum where Statute the dues it relates (Rs.in Lacs) dispute is pending

Income Tax Income Tax 2009-10 342.89 Commissioner Act, 1961 Including interest (Appeals) as appli- cable

Income Tax Income Tax 2009-10 12.20 Commissioner Act, 1961 Including interest (Appeals) as appli- cable

d) There are no amounts that are due to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made there under.

viii. The Company has no accumulated losses at the end of the financial year and the Company has incurred cash losses during the current financial year but has not incurred any cash loss during the immediately preceding financial year.

ix. Based on our audit procedures and as per the information and explanation given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to any financial institution or bank.

x. According to the information and explanations given to us the Company has given counter guarantees/corporate guarantees on behalf of its group companies, to the banks or financial institutions during the year. The terms and conditions whereof, in our opinion are not prima facie prejudicial to the interest of the Company.

xi. Based on the information and explanations given to us by the management, term loans were applied for the purposes for which the loans were obtained.

xii. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations give by the management , we report that no fraud on or by the Company, has been noticed or reported during the year.

For NANDA & BHATIA

Chartered Accountants

ICAI Firm Registration Number: 004342N



Sd/-

P.C.S. VIRDI

Ludhiana: 14th August, 2015 Partner

Membership Number: 17056


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of G.S. Auto International Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit & 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 accounting principles generally accepted in India, including the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act,195G (" the Act"). 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.

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 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 auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error, fn 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 tiat are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting polices used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the We bs.l&ve L::at tiie 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 t of tho slate of affairs of the Company as at March 31,2013:

(b) in the case of the Statement of Profit a.id 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 Legai and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003, as amended by the Companies (Auditor''s Report) (Amendment) order, 2004, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act (hereinafter referred to as "the Order") 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 explanation given to us, 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;

lb) 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 the section 211 of the Companies Act ,1956; and

(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 referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements" of our report of even date:

Re: G.S- Auto Internationa Limited ("the Company")

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

b) The fixed assets of the Company have been physically verified by the management at reasonable intervals during the year and 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 off by the Company during the year.

(ii) a) The inventory of the Company has been physically verified by the management during the year. In our opinion the frequency of the verification is reasonable. our opinion and according to the information and explanations 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) On the basis of our examination of inventory records, in our opinion, the Company has maintained proper records of inventory and the discrepancies noticed on physical verification between the physical stocks and hook records were not material.

(iii) The Company has not taken or granted any toans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956. Accordingly, provisions of the clause 4{iii) [a] to fgj of the said order are not applicable and hence not commented upon.

{iv) m our opinion and according to the information and explanations given to us, there are adequate internal control systems 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 & services. Further, during the course of our audit, we have neither come across nor we have been informed of any instance of continuing failure to correct major weakness in the aforesaid internal control procedures.

a) On the basis of our examination of the books of account we are of the opinion that the articular* of contracts or arrangement, referred to in Section 301 of the Act have been entered in the register required to he maintained under that section.

opnion and lording to the information and transactions made in pursuance of such contracts or arrangements and exceeding the been entered into during the financial year at price reasonable having regard to the prevailing market prices at the relevant time.

Nl) The Company has not accepted any deposit, within the meaning of section S8A and S8AA of the Act and the rules framed there under. in our opinion, the Company'', present interna! audit system is commensurate with the size and nature of its business.

We have broadly reviewed the books of account maintained by the Company Is made''by the Central Government for the maintenance of cost^-ords un e section 209(lKd) of the Companies Act. 1956 and are of the opinion that prima face, the ITTllTJcL and records have been made and maintained^We have not however, made a detailed examination of the records maintained as aforesaid.

a) According to the information and explanations given to us and according to the books ( '' "records as produced and examined by us, in our opinion, the undisputed statutory in respect of Provident Fund, investor Education and Protection Fund, Employees State insurance, income Tax, Sales tax, Weaith tax, 5erv.ee tax, Customs Duty. Excse Du y Cess and other material statutory dues as applicable, have generally been regularly deposed by the Company during the year with the appropriate authorities,

b) According to the information and explanations given to us, no undisputed amounts p yabie in respect of provident fund, investor education and protection fund, employees ''tare Insurance, income tax. sales tax. weaith tax, service tax, customs duty, excse duty cess and other undisputed statutory dues were outstanding at the year end, for a period or more than six months from the date they became payable.

c) As at 31il March 2013, according to the records of the Company and the information and explanations given to us, the following is the particular of disputed dues on account of Income tax, matters that have not been deposited on account of a dispute;

x. The Company has no accumulated losses as at 3lsl March, 2013. It has incurred cash loss in the current financial year ended on that date and further has not incurred cash losses In the immediately preceding financial year.

xi. Based on our audit procedures and according to the information and explanation given by the management, in our opinion, the Company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date,

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 and 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 4 {xiii) of the Companies (Auditors Report} Order 2003 (as amended) are not applicable to the Company,

xiv. In our opinion and according to the information and explanations give to us, the Company is not a dealer or trader in securities, debentures and other investments. However, in respect of transactions relating to investment in certain securities, the Company has maintained proper records of transactions and contracts during the year and timely entries have been made therein. Further, such securities have been held by the Company in its own name.

xv. Based on the information and explanations given to us, in our opinion, the terms and condition on which the Company has given counter guarantees/corporate guarantees on behalf of its group companies, to the banks or financial institutions during the year, are not prima facie prejudicial to the interest of the Company.

xvi. Based on the information and explanations given to us by the management, term bans were applied for the purposes for which the loans were obtained.

xvii. Based on the information and explanations given to us and on an overall examination of the balance sheet of the Company, in our opinion, funds raised on short term basis have not been used for long term investment.

xviii. The Company has not made any preferential allotment of shares to the parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix. The Company has not issued any debentures during the year.

xx. The Company has not raised any money through public issue during the year.

xxL During the course of our examination or the books of account carried out in accordance with the generally accepted auditing practice in India, we have neither come across any significant instance of fraud on or by the Company, either noticed or reported during the year, nor have we been informed of such case by the Management.

for NANDA & BHATIA Film Registration Number: 004342N

Chartered Accountants

P.CS. VIRDI

Ludhiana: 30 May, 2013 Partner

Membership Number: 17056


Mar 31, 2012

1. We have audited the attached Balance Sheet of G.S. Auto International Limited (the "Company") as at 31st March, 2012, and the related Statement of Profit and Loss and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These finan- cial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial state- ments based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial state- ments are free of material misstatement. An audit includes examining, on a test basis, evi- dence supporting the amounts and disclo- sures in the financial statements. An audit also includes assessing the accounting prin- ciples 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 by the Companies (Auditor's Report) (Amendment) Order, 2004 (together the "Order"), 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 state- ment on the matters specified in paragraphs 4 and 5 of the Order.

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

a. We have obtained all the informa- tion and explanations which, to the best of our knowledge and belief, were nec- essary for the purposes of our audit;

b. In our opinion, proper books of accounts 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 accounts.

d. 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 Act;

e. On the basis of written representations received from the Directors, as on 31st March, 2012 and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2012 from being appointed as a director in terms of clause of sub-section (1) of Section 274 of the Act;

f. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act 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 the affairs of the Company as at 31st March, 2012;

ii) inthe case ofthe Statement of Profit and Loss, ofthe profit fortheyear ended on thatdate; and

iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date

Referred to in paragraph 3 of the Auditors' Report of even date to the members of "G.S. Auto International Limited" on the financial statements for the year ended 31st March, 2012:

1. a) The Company is maintaining proper records showing full particu- lars, includingquantitative details and situation, ofits fixed assets.

b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a por- tion of the fixed assets has been physi- cally verified by the Management dur- ing the year and no material discrepan- cies between the books records and such physical verification have been noticed.

c) In our opinion and according to the infor- mation and explanations given to us, a sub- stantial part of fixed assets has not been disposed off by the Company during the year.

2. a) The inventory of the Company has been physically verified by the Management during the year. In our opinion the fre- quency of the verification is reasonable.

b) In our opinion and according to the infor- mation and explanations given to us, the pro- cedures 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) On the basis of our examination of inven- tory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verifica- tion of inventory as compared to the book records were not material.

3. a) 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 Act.

b) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the regis- ter maintained under section 301 of the Act.

As the Company has not granted/ taken any loans, secured or unsecured, to/from Companies, firms etc., listed in the register maintained under section 301 of the Act, paragraph 4(iii)(a) to (g) of the said order, are not applicable to the Company.

4. In our opinion and according to the infor- mation and explanations given to us, there is an adequate internal control sys- tem 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 & services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explana- tions given to us, no major weakness in the aforesaid internal control system has been noticed or reported.

5. a) In our opinion and according to the infor- mation 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 infor- mation and explanations given to us, the transactions made in pursuance of such contracts or arrangement and exceeding the value of Rupees Five Lakhs, in respect of any party during the year have been made at prices which are reasonable hav- ing regard to the prevailing market prices at the relevant time as evaluated on the basis of quotations obtained from parties/ prices charged by the Company in case of similar transactions during the year and considering that having regard to certain items purchased/sold are of a special nature in respect of which suitable alter- native sources do not exist for obtaining comparative quotation in general.

6. The Company has not accepted any depos- its from the Public under the provisions of section 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, the Company has an inter- nal audit system commensurate with its size and nature of its business.

8. We have broadly reviewed the books of account maintained by the Company in respect of manufacture of Company's automotive products where, pursu- ant to the rules made by the Central Government of India, for the maintenance

of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and 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 explana- tions given to us and according to the books and records as produced and examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues including provident fund, investor educa- tion and protection fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable, with the appropriate authorities.

b) According to the information and expla- nations given to us, no undisputed amounts payable in respect of provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues were outstanding at the year end, for the period exceeding six months from the date they became payable.

c) As at 31st March 2012, according to the records of the Company and the information and explanations given to us, the following is the particular of disputed statutory dues, that have not been depos- ited on account of a dispute:

Service Tax Service Tax 2006-2007 3.35 'The Customs (Finance Act, including 2007-2008 J Excise & 1994) Interest & Service Tax penalty as Appellate Applicable. Tribunal, New Delhi.

- The Customs Excise and Service Tax Appellate Tribunal (CESTAT) New Delhi had dismissed the department appeal and accordingly the Assistant Commissioner of Central Excise & Customs, Ludhiana, passed the required necessary final order in favour of the Company vide its order dated 26th July, 2012.

10. The Company has no accumulated losses as at 31st March, 2012 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preced- ing 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 as at the bal- ance 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 provisions of any special statute appli- cable to chit fund/ nidhi/ mutual bene- fit fund/societies are not applicable to the Company.

14. In our opinion and according to the infor- mation and explanations give to us, the Company is not a dealer or trader in secu- rities. However, in respect of transactions relating to investment in certain securities, the Company has maintained proper records of transactions and contracts during the year and timely entries have been made therein. Further, such securities have been held by the Company in its own name.

15. In our opinion and according to the infor- mation and explanations given to us, the terms and conditions of the guar- antees given by the Company, for loans taken by other group companies, from

banks or financial institutions during the year, are not prejudicial to the interest of the Company.

16. In our opinion and according to the infor- mation and explanations given to 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.

18. According to the information and expla- nations given to us, during the year, the Company had made preferential allotment of 12,00,000 (Twelve lac) equity shares of the face value of Rs. 51- per equity share at a premium of Rs. 22.41 per equity share (pursuant to the conversion of warrants into equivalent number of equity shares, such warrants were earlier issued on dated 09th February, 2010), to the company covered in the register maintained under Section 301 of the Act.

19. No debentures have been issued by the Company during the year.

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, car- ried out in accordance with the Generally

Accepted Auditing Practices in India, and according to the information and expla- nations given to us, we have neither come across any instance of fraud on or by the Company, either noticed or reported dur- ing the year, nor have we been informed of such case by the management.

For NANDA & BHATIA

Firm Registration Number: 004342N

Chartered Accountants

P.C.S. VIRDI

Partner

Membership Number: 17056 Ludhiana: 11th August, 2012


Mar 31, 2010

1. We have audited the attached Balance Sheet of G.S. AUTO INTERNATIONAL LIMITED as at 31st March, 2010, and the related Profit and Loss Account and the 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.

2. We conducted our audit in accordance with the 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 misstatements. 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 Statement presentation. We believe that our audit provides a reasonable basis for ouropinion.

3. As required by the Companies (Auditors Report) Order, 2003,as amended by the Companies (Auditors Report) (Amendment) Order 2004 (together the "Order"), 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 Annexure referred to in paragraph 3 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 ouraudit;

(b) In our opinion, proper books of accounts as required by law, have been kept by the Company so far as appears from our examination of those books;

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

(d) In our opinion, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of the written representations received from the Directors, as on 31 st March, 2010 and taken on record by the Board of Directors, 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 Act;

(f) In ouropinion and to the best of our information and according to the explanations given to us, the said Financial Statements read with Accounting Policies and together with the notes thereon and attached thereto, give, in the prescribed manner, the information required by the Act, in the manner so required and also 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 the affairs of the Company as at 31 st March, 2010;

(ii) in the case of the Profit and Loss Account, of the Profit of the Company, for the year ended on that date; and

(iii) In the case of the Cash Flow Statement, of the cash flows of the Company, for the year ended on that date.

ANNEXURE TO THE AUDITORS1 REPORT: Referred to in paragraph 3 of the Auditors Report of even date to the members of "G.S.AUTO INTERNATIONAL LIMITED" on the financial statement for the year ended 31st March, 2010:

1. a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of its fixed assets;

b) According to the information and explanation given to us, the fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the books records and such physical verification have been noticed;

c) In our opinion and according to the information and explanation given to us, a substantial part of fixed assets has not been disposed of by the Company during the year;

2. a) According to the information and explanations given to us, the inventories has been physically verified by the Management during the year. In our opinion the frequency of the 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) On the basis of our examination of inventory records, in our opinion, the Company is maintaining proper records of inventory. the discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of accounts;

3. a) 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 Act.

b) 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 Act.

As the Company has not granted/taken any loans, secured or unsecured, to/from Companies, firms etc., listed in the register maintained under section 301 of the Act, paragraph 4(iii)(a) to (g) of the said order, are not applicable to the Company;

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, fixed assets and for the sale of goods & services. Further on the basis of our examination of the books and records of the Company, and according to the information and explanation given to us, no major weakness in the aforesaid internal control system has been noticed or reported;

5. 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 underthat section;

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangement and exceeding the value of Rs.five lakhs, 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 as evaluated on the basis of quotations obtained from parties/prices charged by the Company in case of similar transactions during the year and considering that having regard to certain items purchased/sold are of a special nature in respect of which suitable alternative sources do not exists for obtaining comparative quotation in general;

6. The Company has not accepted any deposits from the Public under the provisions of section 58Aand 58AAof The Company Act, 1956 and the rules framed there under, during the year;

7. In our opinion, the Company has an internal audit system commensurate with its 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 of India for the maintenance of Cost Records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 and 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 according to the books and records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs duty, Excise Duty, Cess and Other material statutory dues as applicable, with the appropriate authority. According to the information and explanation 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 become payable;

b) As at 31st March 2010, according to the records of the Company and the information and explanations given to us the following disputed statutory dues that have not been deposited on account of matters pending before the appropriate authorities are as under:-



Name of the Nature of Year to which Amount Forum where Statute the dues it relates (in Lacs) dispute is pending

A) Excise Act Excise duty 1944 -do- -do- April, 2004 to 21.87* Jt.Comm. Central Excise Dec.,2008

-do- -do- Jan.2009 to 00.69* Dy.Comm.Central Excise May,2009 Ludhiana.

B)Service Tax Service Tax 2006-2007 3.35 Asst.Comm.Central Excise including 2007-2008 Division-I, Ludhiana Interest & penalty

* The Add. Comm. of Central Excise, Ludhiana has dropped the demand of Rs.22.56 Lacs, vide their order no.V (87)15/Adj/JC/LDH/43/2009/17218 dated 29th June, 2010.

10. The Company has no accumulated losses as at 31st March, 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately 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 the repayment of dues to any financial institutions or banks, during the year;

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 or a nidhi mutual benefit fund/society. Accordingly, the provisions of clause 4 (xiii) of above said order are not applicable to the Company;

14. As per the records produced for our verifications and the information and explanation given to us, in our opinion, the Company has maintained proper records of transactions and contracts entered into for investing temporally idle funds in investments in the units of mutual funds, into which timely entries have been made. The said investments were held in the name of the Company;

15. In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantee/corporate guarantees, for Loans taken during the year by others group companies, from Banks or Financial Institutions, are not prejudicial to the interest of the Company;

16. In our opinion and according to the information and explanations given to us, on an overall basis, the Company has not taken any term loans during the year. Accordingly the provisions of clause 4 (xvi) of above said order are not applicable to the Company;

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanation given to us, we report that funds raised on short term basis have not been used for long term investments;

18. According to the information and explanations given to us, during the year the Company has made preferential allotment of 12,00,000 (Twelve Lacs) warrant, convertible into equal number of Equity Shares, within a period of 18 (Eighteen) months, from the date of allotment, to parties and companies covered in the register maintained under section 301 of the Act.;

Further the Company, on 01st July,2009 has allotted, on preferential basis, 970000 (Nine Lacs Seventy Thousand) Equity Shares of the face value of Rs.5/- per share, to parties and Companies covered in the register maintained under section 301 of the Act, upon the conversion of warrant (such warrant were earlier allotted on 07th January, 2008) into Equity shares.

19. According to the information and explanation given to us, the Company has not issued any debentures during the year; accordingly the provisions of clause 4(xix) of the above said order are not applicable to the Company

20. According to the information and explanations given to us, during the year under review, the Company has not raised any money by way of public issue; accordingly the provisions of clause 4(xx) of the above said order are not applicable to the Company;

21. During the Course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, either noticed or reported during the year, nor have been informed of such case by the management.

For NANDA & BHATIA

Firm Registration No.004342N

Chartered Accountants

(P.C.S. VIRDI)

Partner

Ludhiana : 14th August, 2010 Membership No.17056



 
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