Auditor Report of Porwal Auto Components Ltd.

Mar 31, 2018

INDEPENDENT AUDITORS'' REPORT

To the Members of

PORWAL AUTO COMPONENTS LIMlTED

Report on Financial Statements

We have audited the accompanying Ind AS standalone financial statements of PORWAL AUTO COMPONENTS LIMITED, which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, the Statement of Changes in Equity and the Cash Row Statement for the year then ended, and a summary of significant accounting policies and other explanatory information (herein after referred to as "Ind AS financial statements"). 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 Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards ("Ind AS'')specified under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. 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 Rules made there under.

We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under section 143 (10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Ind financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Ind AS 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 Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the company''s Directors, as well as evaluating the overall presentation of the Ind AS financial statements.

We are also responsible to conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor''s report. However, future events or conditions may cause an entity to cease to continue as a going concern.

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

The comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April 1, 2016 prepared in accordance with Ind AS, included in these Ind AS financial statements, have

been audited by the predecessor auditor who had audited the financial statements for the relevant periods. The report of the predecessor auditor on the comparative financial information and the opening balance sheet dated May 27, 2017 expressed an unmodified opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the Ind AS 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 including the Ind AS, of the state of affairs of the Company as at March 31st 2018, and its Profit (including other comprehensive income), changes in equity 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, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by section 143(3) of the Act, we report that:

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

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

c) The Balance Sheet, Statement of Profit and Loss, the Statement of Changes in Equity and Cash Row Statement dealt with by this Report are in agreement with the books of account;

d) In our opinion, the Ind AS financial statements comply with the Indian Accounting Standards notified under the Act (which are deemed to be applicable as per Section 133 of the Act).

e) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B"; and

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

(a) The Company has disclosed the impact of pending litigation as at March 31st 2018, on its financial position in its financial statements refer note no. 26 to the financial statements:

(b) The Company has made provisions, as required under the applicable law or accounting standards for material foreseeable losses, if any on long term contracts.

(c) There has been no delay in transferring amounts required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31st 2018.

For S N Gadiya & Co.
Chartered Accountants
Firm Reg. No.002052C
(CA Satyanarayan Gadiya)
Proprietor	Race! Indore
M. No. 071229	Date 18/05/2018

ANNEXURE "A" TO THE INDEPENDENT AUDITOR''S REPORT

(Referred to in paragraph 1 under "Report on Other Legal and Regulatory Requirements section of our report of even date)

In terms of the information and explanations given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that -

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

(b) Major items of fixed assets have been physically verified by the management during the year in accordance with a programmed of verification, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

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

(ii) The management, during the year under review, has conducted physical verification of inventory and no

material discrepancies were noticed on such verification. (iii) The company has granted loans to one body corporate covered in the register maintained under section 189

of the Companies Act, 2013.

(a) The rate of interest and other terms and conditions on which the loans had been granted to the body corporate listed in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the company.

(b) In the case of loans granted to the body corporate listed in the register maintained under section 189 of the Act, the borrower has been regular in payment of the principal and interest as stipulated.

(c) There are no overdue amount in respect of the loans granted to a body corporate listed in the register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made. (v) The Company has not accepted any deposits from public within the meaning of Section 73 and 74 of the Act and the rules framed there under to the extent notified. (vi) The Central Government has not prescribed maintenance of cost records under of sub- section (1) of Section 148 of the Act, for the nature of industry in which the Company is doing business.

(vii) (a) 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 (as applicable) have generally been regularly deposited with the appropriate authorities. (b) No disputed amounts payable in respect of Wealth Tax, Income Tax, Service Tax, Custom Duty, Excise Duty and Cess were in arrears as at 31st March 2018 except the following.

Name of the Statue	Nature of Dues	Amount Disputed	Period to which the amount relates	Forum where dispute is pending
Employee Provident Fund & Mis. Provisions Act 1952	Provident	Rs. 8.05 lacs	F.Y. 2005-06	Employee Provident Fund Appellate Tribunal
MP VAT Tax	Vat Tax	Rs.1.38 lacs	F.Y. 2010-11	M.P Commercial Tax Appellate Board, Bhopal
MP VAT Tax	Vat Tax	Rs. 2.56 lacs	F.Y. 2011-12	M.P. Commercial Tax Appellate Board, Bhopal
MP VAT Tax	Vat Tax	Rs. 2.48 lacs	F.Y. 2013-14.	Appellate Authority Additional Commissioner of Commercial Tax, Indore
MP VAT Tax Act, 1944	Vat Tax Duty	Rs. 0.74 lacs	F.Y. 2015-16.	Appellate Authority Additional Commissioner of Commercial Tax, Indore
Excise Duty Act, 1944	Excise Duty	Rs. 64.43 lacs	March 2005-Oct. 2011	CESTAT Delhi

(viii) The company has not defaulted in repayment of dues to financial institutions or banks as at the balance sheet date.

(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments), Company has availed term loan facility during the year and the term loan has been utilized for the purpose for which it was availed.

(x) No instance of material fraud on or by the Company, notice or reported during the year, nor have we been informed of any such case by the Management.

(xi) The Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) The transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv) The Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934, Accordingly, paragraph 3 (xvi) of the Order is not applicable to the Company.

For S N Gadiya & Co.
Chartered Accountants
Firm Fteg. No.00205
(CA Satyanarayan Gadiya)
Proprietor	Race: Indore
M. No. 071229	Date 18/05/2018

Annexure - B to the Auditors'' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of PORWAL AUTO COMPONENTS LIMITED ("the Company") as of 31 March 2018 in conjunction with our audit of the Ind AS standalone financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India.

Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For S N Gadiya & Co.
Chartered Accountants
Firm Reg. No.002052C
(CA Satyanarayan Gadiya)
Proprietor	Race: Indore
M. No. 071229	Date 18/05/2018

Annexure VII

Independent Auditor''s Report on Year to Date Financial Result of PORWAL AUTO COMPONENTS LTD Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

To Board of Directors of

PORWAL AUTO COMPONENTS LIMITED

We have audited the financial results of PORWAL AUTO COMPONENTS LIMITED for the year ended 31st March 2018, attached herewith, being submitted by the company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as modified by Circular No. ClR/CFD/FAC''62/2016 dated July 5, 2016.

This statement which is the responsibility of Company''s Management and approved by the Board of Directors, has been complied from the related Standalone Ind- AS Financial Statements, which have been prepared in accordance with the Indian Accounting Standards prescribed under Section 133 of the Companies Act, 2013 read with relevant Rules issued there under (''Ind AS) and other Accounting Principles generally accepted in India. Our responsibility is to express an opinion on the Statement based on our audit of such Standalone Financial Statement.

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 requirement and plan and perform the audit to obtain reasonable assurance about whether the financial results are free of material misstatement(s).

An audit involved performing procedures to obtain audit evidence about the amount and the disclosure in the Statement. The procedure selected depends on the Auditor''s judgement, including the assessment of the risk of material mis-statement of the statement whether due to fraud or error. In making those risk assessment, the Auditor considers internal control relevant to the Company''s preparation and fair presentation of the statement in order to design audit procedure that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the Accounting Policy used and the reasonableness of the Company''s estimate made by the Management, as well as evaluating the overall presentation of the statement.

We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion. In our opinion and to the best of our information and according to the explanations given to us the statement:

(i) are presented in accordance with the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as modified by Circular No. CIR/CRD/FAC/62/2016 dated July 5, 2016. and (ii) give a true and fair view in conformity with the aforesaid Indian Accounting Standards and other

Accounting principles generally accepted in India of the net profit and other financial information for the year ended 31st March 2018.

For S N Gadiya & Co.
Chartered Accountants
Firm Reg. No.002052C
(CA Satyanarayan Gadiya)	Place: Indore
Proprietor	Date 18/05/2018
M. No. 071229

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Mar 31, 2016

INDEPENDENT AUDITORS'' REPORT

To the Members of

PORWAL AUTO COMPONENTS LIMITED Report on Financial Statements

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

Management''s responsibility for the financial statements

The Company''s Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 ( " the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting principles generally accepted in India, Including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies ( Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under section 143 (10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the 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 the company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31st 2016, and its Profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (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 Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by section 143(3) of the Act, we report that:

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

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

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

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards notified under the Act (which are deemed to be applicable as per Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014).

e) On the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B"; and

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

(i) The Company has disclosed the impact of pending litigation as at March 31st 2016, on its financial position in its financial statements refer note no. 26 to the financial statements:

(ii) The Company has made provisions, as required under the applicable law or accounting standards for material foreseeable losses, if any on long term contracts.

(iii) There has been no delay in transferring amounts required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31st 2016.

In terms of the information and explanations given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that -

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

(b) Major items of fixed assets have been physically verified by the management during the year in accordance with a programmed of verification, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

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

(ii) (a) The management, during the year under review, has conducted physical verification of inventory and no material discrepancies were noticed on such verification.

(iii) The company has granted loans to one body corporate covered in the register maintained under section 189 of the Companies Act, 2013.

(a) The rate of interest and other terms and conditions on which the loans had been granted to the body corporate listed in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the company.

(b) In the case of loans granted to the body corporate listed in the register maintained under section 189 of the Act, the borrower has been regular in payment of the principal and interest as stipulated.

(c) There are no overdue amount in respect of the loans granted to a body corporate listed in the register maintained under section 189 of the Act

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.

(v) The Company has not accepted any deposits from public within the meaning of Section 73 and 74 of the Act and the rules framed there under to the extent notified.

(vi) The Central Government has not prescribed maintenance of cost records under of sub- section (1) of Section 148 of the Act, for the nature of industry in which the Company is doing business.

(vii) (a) 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 (as applicable) have generally been regularly deposited with the appropriate authorities.

(b) No disputed amounts payable in respect of Wealth Tax, Income Tax, Service Tax, Custom Duty, Excise Duty and Cess were in arrears as at 31^st March 2016 except the following.

Name of the Statue	Nature of Dues	Amount Disputed	Period to which the amount relates	Forum where dispute is pending
MP VAT Tax	Vat Tax	Rs.15.53 lacs	F.Y. 2013-14	Appellate Authority Additional Commissioner of Commercial Tax, Indore
MP VAT Tax	Vat Tax	Rs. 1.38 lacs	F.Y. 2010-11	M. P. Commercial Tax Appellate Board, Bhopal
MP VAT Tax	Vat Tax	Rs. 2.56 lacs	F.Y. 2011-12	M. P. Commercial Tax Appellate Board, Bhopal
Employee Provident Fund & Mis. Provisions Act 1952	Provident Fund	Rs. 8.05 lacs	F.Y. 2005-06	Employee Provident Fund Appellate Tribunal

(c) There is no amount which were required 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 there under.

(viii) The company has not defaulted in repayment of dues to financial institutions or banks as at the balance sheet date.

(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments), Company has availed term loan facility during the year and the term loan has been utilized for the purpose for which it was availed.

(x) No instance of material fraud on or by the Company, notice or reported during the year, nor have we been informed of any such case by the Management.

(xi) The Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) The Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) The transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv) The Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

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

Annexure - B to the Auditors'' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of PORWAL AUTO COMPONENTS LIMITED ("the Company") as of 31 March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For ASSG & Associates

Firm Reg No. 012120C

Chartered Accountants

Place: Indore (CA Sanjay Gupta)

Date: 28/05/2016 Partner

M.No.072073

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Mar 31, 2015

Report on Financial Statements

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

Management's responsibility

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 the Accounting principles generally accepted in India, Including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies ( Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under section 143 (10 ) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the 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 the company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31st 2015, and its Profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (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 Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by section 143(3) of the Act, we report that:

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

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

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

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards notified under the Act (which are deemed to be applicable as per Section 133 of the Companies Act, 2013, 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 information and according to the explanation given to us: (i) The Company has disclosed the impact of pending litigation as at March 31st 2015, on its financial position in its financial statements.

(ii) The Company has made provisions, as required under the applicable law or accounting standards for material foreseeable losses, if any on long term contracts. (iii) There has been no delay in transferring amounts required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31st 2015.

In terms of the information and explanations given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that –

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

(b) Major items of fixed assets have been physically verified by the management during the year in accordance with a programmed of verification, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(ii) (a) The management, during the year under review, has conducted physical verification of inventory. The frequency of such verification is reasonable in relation to the size of the company, nature of its business and nature of inventory.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of company and nature of its business.

(c) The Company is maintaining proper records of inventory as required in the normal course of business. No material discrepancies were noticed on verification of stocks as compared to book records.

(iii) (a) In our opinion and according to the information and explanation given to us, the company has not granted any loans, secured or unsecured to the Companies, Firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

(b) This clause of the Caro order is not applicable.

(c) This clause of the Caro order is not applicable.

(iv) There are 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. We did not observed any major weaknesses in internal control system.

(v) The Company has not accepted any deposits from public within the meaning of Section 73 and 74 of the Act and the rules framed there under to the extent notified.

(vi) The Central Government has not prescribed maintenance of cost records under of sub- section (1) of Section 148 of the Act, for the nature of industry in which the Company is doing business.

(vii) (a) 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 (as applicable) have generally been regularly deposited with the appropriate authorities.

(b) No disputed amounts payable in respect of Wealth Tax, Income Tax, Service Tax, Custom Duty, Excise Duty and Cess were in arrears as at 31st March 2015 except the following.

Name of the Nature of Dues Amount Statue Disputed

Income Tax Income Tax Rs. 5.36 lacs Act, 1961

MP VAT Tax Vat Tax Rs. 1.38 lacs

MP VAT Tax Vat Tax Rs. 2.56 lacs

Employee Provident Provident Fund Rs. 8.05 lacs Fund & Mis. Provisions Act 1952

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

Income Tax Act, 1961 A.Y. 2010-11 Commissioner of Income Tax Appeal

MP VAT Tax F.Y. 2010-11 M. P. Connercial Tax Appellate Board, Bhopal

M VAT Tax F.Y. 2011-12 M. P. Connercial Tax Appellate Board, Bhopal

Employee Provident Fund & Mis Provisions Act 1952 F.Y. 2005-06 Employee Provident Fund Appellate Tribunal

(c) According to the information and explanation given to us there is no amount which were required 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 there under.

(vii) The company does not have accumulated losses as at 31st March 2015 and it did not incur any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(ix) During the period under review, the company has not defaulted in repayment of dues to financial institutions or banks as at the balance sheet date.

(x) The Company has not given any guarantees for loans taken by others from Banks or Financial Institutions.

(xi) The Company did not availed any fresh term loan facility during the year.

(xii) There was no fraud on or by the Company noticed or reported during the course of our audit.

For ASSG & ASSOCIATES

(F.R.N. 012120C)

CHARTERED ACCOUNTANTS

PLACE : INDORE

DATE : 21/05/2015 CA SANJAY GUPTA

PARTNER

M.No. 072073

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Mar 31, 2014

We have audited the accompanying financial statements of PORWAL AUTO COMPONENTS LIMITED (the company) which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s responsibility

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). read with the General 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 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. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters specified in qualification, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

b) In the case of the Statement of Profit and Loss, of the Loss of the Company 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.

Qualifications

We draw your attention towards the following:

Depreciation for the year on Plant and Machinery is provided on the basis of balance useful life of the assets as determined by approved valuer instead of providing depreciation at the minimum rates specified in Schedule XIV of the Companies Act, 1956 and as required by the Accounting Standard 6 on "Depreciation Accounting". Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

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

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

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

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13the September, 2013, of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act 2013 except for Depreciation on Plant and Machinery is provided on the basis of balance useful life of the assets instead of providing depreciation at the minimum rates specified in Schedule XIV of the Companies Act, 1956 and as required by the Accounting Standard 6 on "Depreciation Accounting" above:

e) On the basis of written representations received from the directors 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 of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITOR''S REPORT

(Referred to in our Report of even date)

In terms of the information and explanations given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that -

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

(b) Major items of fixed assets have been physically verified by the management during the year in accordance with a programme of verification, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) The company did not dispose off substantial part of fixed assets, during the year under review, to affect its going concern.

(ii) (a) The management, during the year under review, has conducted physical verification of inventory. The frequency of such verification is reasonable in relation to the size of the company, nature of its business and nature of inventory.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of company and nature of its business.

(c) The Company is maintaining proper records of inventory as required in the normal course of business. No material discrepancies were noticed on verification of stocks as compared to book records.

(iii) (a) The company during the year did not grant any unsecured loans/advances to parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) This clause of the Companies (Auditors Report) Order, 2003 order is not applicable.

(c) This clause of the Companies (Auditors Report) Order, 2003 order is not applicable.

(d) This clause of the Companies (Auditors Report) Order, 2003 order is not applicable.

(e) The company did not take any loans from companies, firms and other parties covered in the register maintained under section 301 of the Act.

(f) This clause of the Companies (Auditors Report) Order, 2003 order is not applicable.

(g) This clause of the Companies (Auditors Report) Order, 2003 order is not applicable.

(iv) There are 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. We did not observe any major weaknesses in internal control system.

(v) (a) The particulars of contract/arrangements referred to section 301 of the Act have been entered into the register required to be maintained under that section.

(b) The transactions made in pursuance of contracts mentioned in Para (v) (a) above, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has complied with the provisions of Sec. 58-A, 58AA and other relevant provisions of the Companies Act, 1956 and rules framed there under. No order under these provisions was passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any other court or tribunal.

(vii) The company has an internal audit system commensurate with its size and nature of business.

(viii) We have broadly reviewed the cost records maintained by the Company, including pursuant to Companies (Cost Accounting Records) 2011 prescribed by the Central Government under section 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that the prima facie the prescribed cost records have been maintained and are being made up. We have however not made the detailed examination of the Cost records with the view to determine whether they are accurate or complete.

(ix) (a) 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 (as applicable) were generally regularly deposited with the appropriate authorities.

(b) There is no unpaid amount outstanding as at 31st March 2014 for a period exceeding six months from the date they became payable.

(c) No disputed amounts payable in respect of Wealth Tax, Income Tax, Service Tax, Custom Duty, Excise Duty and Cess were in arrears as at 31st March 2014 except the following.

Name of the Nature of Amount Period to which the Forum Where Disp Statue Dues Disputed amount relates ute is pending

Income Tax Income Tax Rs. 5.36 A.Y. 2010-11 Commissioner of Act, 1961 lacs Income Tax Appeal

MP VAT Tax Vat Tax Rs. 1.65 F. Y. 2010-11 Dy.Commissioner lacs of Commercial Tax Tax Appeal

Employee Provident Rs. 8.05 F.Y. 2005-06 Employee Provid Provident Fund lacs ent Fund Appell Fund & ate Tribunal Mis. Provisions Act 1952

(x) The company did not have accumulated losses as at 31st March 2014 and it did not incur any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) During the period under review, the company has not defaulted in repayment of dues to financial institutions or banks.

(xii) The Company did not grant any loans or advances against security of pledge of shares, debentures and other securities.

(xiii) This clause and sub clauses (a) to (d) of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable as the Company did not enter into business of Chit Fund, or related activities.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xv) The Company has not given any guarantees for loans taken by others from Banks or Financial Institutions. Accordingly, the provisions of clause 4 (xv) of the of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xvi) The Company has raised term loan from State Bank of India which has been utilized for the purpose it was raised.

(xvii) On an overall examination of the Balance Sheet of the Company, we report that no funds raised on short- term basis were used for long-term investment.

(xviii) During the period under review, the Company did not make preferential allotment of shares to parties and Companies covered in the register maintained in pursuance of section 301 of the Companies Act, 1956.

(xix) The Company did not issue any debentures during the period under review.

(xx) The Company has utilized public issue proceedings for the purpose they were raised.

(xxi) There was no fraud on or by the Company noticed or reported during the course of our audit.

For ASSG & ASSOCIATES (F.R.N. 012120C) CHARTERED ACCOUNTANTS

PLACE : INDORE DATE : 29.05.2014 CA SANJAY GUPTA PARTNER M.No. 072073

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Mar 31, 2011

We have audited the attached Balance Sheet of PORWAL AUTO COMPONENTS LTD., Indore as at 31st March 2011, and also the Profit & Loss Account and the Cash Flow statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor's Report) Order 2003 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 and 5 of the said order.

Further to our comments in the Annexure referred to above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

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

(iii) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the balance sheet, profit and loss Account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section 3 (c)of section 211 of the Companies Act, 1956 except for :

Depreciation for the year on Plant and Machinery is provided on the basis of balance useful life of the assets as determined by approved value instead of providing depreciation at the minimum rates specified in Schedule XIV of the Companies Act, 1956 and as required by the Accounting Standard 6 on "Depreciation Accounting". As a result depreciation has been provided on same basis as specified in Schedule XIV of the Companies Act, 1956 as in earlier years, the charge to the Profit and Loss account for the year would have been higher by Rs. 72.41 lacs and net fixed assets would have been lower by Rs.72.41 lacs (Refer Note No. 4 of Schedule N).

We further report that had observations made by us in above Para been considered the profit for the year would have been lower by Rs. 72.41 lacs (as against the reported figure of Rs.61.98 lacs).

(v) On the basis of written representations received from the directors, as on 31st March 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31s' March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, except for the effect on the financial statements of the matters referred to in paragraph (iv) above, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2011;

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

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

ANNEXURE TO THE AUDITOR'S REPORT

(Referred to in our Report of even date)

In terms of the information and explanations given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that -

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

(b) Major items of fixed assets have been physically verified by the management during the year in accordance with a programmed of verification, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) The company has not disposed off substantial part of fixed assets, during the year under review, to affect its going concern.

(ii) (a) The management, during the year under review, has conducted physical verification of inventory. The frequency of such verification is reasonable in relation to the size of the company, nature of its business and nature of inventory.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of company and nature of its business.

(c) The Company is maintaining proper records of inventory as required in the normal course of business. No material discrepancies were noticed on verification of stocks as compared to book records.

(iii) (a) The company has granted unsecured loan of Rs. 330.69 lacs to two parties covered in the register maintained under section 301 of the Companies Act, 1956. The year end balances of such loans aggregates to Rs.362.47 lacs.

(b) The rate of interest and other terms and conditions of above loan granted by the Company, are not prima facie prejudicial to the interest of the Company. These are not backed by any agreement and are repayable on demand.

(c) The company to whom the loans and advances in the nature of loans has been given are regular in payment of interest.

(d) There is no overdue amount of loan granted to the Company listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The company did not take any loans from companies, firms and other parties covered in the register maintained under section 301 of the Act.

(f) This clause of the Caro order is not applicable.

(g) This clause of the Caro order is not applicable.

(iv) There are 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. We did not observed any major weaknesses in internal control system.

(v) (a) The particulars of contract/arrangements referred to section 301 of the Act have been entered into the register required to be maintained under that section.

(b) The transactions made in pursuance of contracts mentioned in Para (v) (a) above, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has complied with the provisions of Sec. 58-A, 58AA and other relevant provisions of the Companies Act, 1956 and rules framed there under. No order under these provisions has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any other court or tribunal.

(vii) The company has an internal audit system commensurate with its size and nature of business.

(viii) The Central Government has not prescribed maintenance of cost records under clause (d) of sub-section

(1) of section 209 of the Companies Act, 1956 for the nature of industry in which the Company is doing business.

(ix) (a) 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 (as applicable) have generally been regularly deposited with the appropriate authorities and there is no unpaid amount outstanding as at 31st March 2011 for a period exceeding six months from the date they became payable.

(b) No disputed amounts payable in respect of Income Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess were in arrears as at 31st March 2011 except the following:

Name of the Statue Forum where Period to which the Amount Disputed dispute is pending amount relates (Rs. In lacs)

Income Tax CIT (Appeals) 1995-96 21.80 Sales Tax Astt. Comm. 2005-06 0.89

Sales Tax Astt. Comm. 2007-08 2.08

(x) The company has no accumulated losses as at 31st March 2011 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) During the period under review the company has not defaulted in repayment of dues to financial institutions or banks.

(xii) The Company has not granted any loans or advances against security of pledge of shares, debentures and other securities.

(xiii) This clause and sub clauses (a) to (d) of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable as the Company has not entered into business of Chit Fund, or related activities.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xv) The Company has not given any guarantees for loans taken by others from Banks or Financial Institutions. Accordingly, the provisions of clause 4 (xv) of the of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xvi) During the year company did not raise any term loan.

(xvii) 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) During the period under review the Company has not made preferential allotment of shares to parties and Companies covered in the register maintained in pursuance of section 301 of the Companies Act, 1956.

(xix) The Company has not issued any debentures during the period under review.

(xx) The management has disclosed the end use of the money raised by the company by public issue (Refer note no. 3 of schedule O) of the equity shares.

(xxi) There was no fraud on or by the Company noticed or reported during the course of our audit.

For ASSG & ASSOCIATES

(F.R.N. 012120C)

CHARTERED ACCOUNTANTS

PUCE: INDORE

DATE : 30.05.2011 SANJAY GUPTA

PARTNER

M.No. 72073

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Mar 31, 2010

We have audited the attached Balance Sheet of PORWAL AUTO COMPONENTS LTD., Indore as at 31st March 2010, and also the Profit & Loss Account and the Cash Flow statement 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (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 and 5 of the said order.

Further to our comments in the Annexure referred to above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

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

(iii) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the balance sheet, profit and loss Account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section 3 (c)of section 211 of the Companies Act, 1956 except for :

Depreciation for the year on Plant and Machinery is provided on the basis of balance useful life of the assets as determined by approved valuer instead of providing depreciation at the minimum rates specified in Schedule XIV of the Companies Act, 1956 and as required by the Accounting Standard 6 on "Depreciation Accounting". As a result depreciation has been provided on same basis as specified in Schedule XIV of the Companies Act, 1956 as in earlier years, the charge to the Profit and Loss account for the year would have been higher by Rs. 72.41 lacs and net fixed assets would have been lower by Rs. 72.41 lacs (Refer Note No. 4 of Schedule N).

We further report that had observations made by us in above para been considered the loss for the year would have been higher by Rs. 72.41 lacs (as against the reported figure of Rs. 148.69 lacs).

(v) 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;

(vi) In our opinion and to the best of our information and according to the explanations given to us, except for the effect on the financial statements of the matters referred to in paragraph

(iv) above, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010;

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

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

ANNEXURE TO THE AUDITORS REPORT

(Referred to in our Report of even date)

In terms of the information and explanations given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that -

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

(b) Major items of fixed assets have been physically verified by the management during the year in accordance with a programmed of verification, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) The company has not disposed off substantial part of fixed assets, during the year under review, to affect its going concern.

(ii) (a) The management, during the year under review, has conducted physical verification of inventory. The frequency of such verification is reasonable in relation to the size of the company, nature of its business and nature of inventory.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of company and nature of its business.

(c) The Company is maintaining proper records of inventory as required in the normal course of business. No material discrepancies were noticed on verification of stocks as compared to book records.

(iii) (a) The company has granted unsecured loan of Rs. 370.58 lacs to two parties covered in the register maintained under section 301 of the Companies Act, 1956. The year end balances of such loans aggregates to Rs. 419.35 lacs.

(b) The rate of interest and other terms and conditions of above loan granted by the Company, are not prima facie prejudicial to the interest of the Company. These are not backed by any agreement and are repayable on demand.

(c) The company to whom the loans and advances in the nature of loans has been given are regular in payment of interest.

(d) There is no overdue amount of loan granted to the Company listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The company did not take any loans from companies, firms and other parties covered in the register maintained under section 301 of the Act.

(f) This clause of the Caro order is not applicable.

(g) This clause of the Caro order is not applicable.

(iv) There are 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. We did not observed any major weaknesses in internal control system.

(v) (a) The particulars of contract/arrangements referred to section 301 of the Act have been entered into the register required to be maintained under that section.

(b) The transactions made in pursuance of contracts mentioned in Para (v) (a) above, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has complied with the provisions of Sec. 58-A, 58AA and other relevant provisions of the

Companies Act, 1956 and rules framed there under. No order under these provisions has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any other court or tribunal.

(vii) The company has an internal audit system commensurate with its size and nature of business.

(viii) The Central Government has not prescribed maintenance of cost records under clause (d) of sub-section

(1) of section 209 of the Companies Act, 1956 for the nature of industry in which the Company is doing business.

(ix) (a) 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 (as applicable) have generally been regularly deposited with the appropriate authorities and there is no unpaid amount outstanding as at 31st March 2010 for a period exceeding six months from the date they became payable.

(b) No disputed amounts payable in respect of Income Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess were in arrears as at 31st March 2010 except the following:

Name of the Statue Froum where Period to which the Amount Disputed dispute is pending amount relates (Rs. In lacs)

Income Tax CIT (Appeals) 1995-96 21.80

Sales Tax Astt. Comm. 2005-06 0.89

(x) 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.

(xi) During the period under review the company has not defaulted in repayment of dues to financial institutions or banks.

(xii) The Company has not granted any loans or advances against security of pledge of shares, debentures and other securities.

(xiii) This clause and sub clauses (a) to (d) of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable as the Company has not entered into business of Chit Fund, or related activities.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xv) The Company has not given any guarantees for loans taken by others from Banks or financial Institutions. Accordingly, the provisions of clause 4 (xv) of the of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xvi) During the year company did not raise any term loan.

(xvii) 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) During the period under review the Company has not made preferential allotment of shares to parties and Companies covered in the register maintained in pursuance of section 301 of the Companies Act, 1956.

(xix) The Company has not issued any debentures during the period under review.

(xx) The management has disclosed the end use of the money raised by the company by public issue (Refer note no. 3 of schedule O) of the equity shares.

(xxi) There was no fraud on or by the Company noticed or reported during the course of our audit.

For ASSG & ASSOCIATES

(F.R.N. 012120C) CHARTERED ACCOUNTANTS

PLACE: INDORE

DATE : 29.05.2010 SAN JAY GUPTA

PARTNER M.NO. 72073