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Auditor Report of PPAP Automotive Ltd.

Mar 31, 2018

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of PPAP AUTOMOTIVE LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March, 2018, and the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of changes in equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Ind AS 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 Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended. 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 standalone Ind AS financial statements, that give a true and fair view and are free from material misstatement, whether due to fraud or error

Auditors’ Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit of the standalone 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 standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 of the state of affairs (financial position) of the Company as at 31st March, 2018, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Other Matters

The comparative financial information of the Company for the year ended 31st March, 2017 and the transition date opening balance sheet as at 1st April, 2016 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by us, whose audit report for the year ended 31st March, 2017 & 31st March, 2016 dated 23rd May, 2017 & 19th May, 2016 respectively expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.

Our opinion is not modified in respect of above matter

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 in terms of Section 143(11) of 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 Annexure I a statement on the matters specified in paragraphs 3 and 4 of the said 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 purposes of our audit.

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

(c) The Balance Sheet, the Statement of Profit and Loss (including the other comprehensive income), the Cash Flow Statement and the Statement of changes in equity dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended.

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

(f) We are enclosing herewith a report in Annexure II for our opinion on adequacy of internal financial controls system in place in the Company and the operating effectiveness of such controls.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements. Refer Note 39 to the financial statements.

ii. According to the information and explanations provided to us, the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

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

iv. The disclosures regarding details of specified bank notes held and transacted during 8th November, 2016 to 30th December, 2016 have not been made since the requirement does not pertain to financial year ended 31st March, 2018.

ANNEXURE- I TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 1 under ‘Report on other Legal and Regulatory Requirements’ section of our Report of even date)

i) In respect of its fixed assets:

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

b) As explained to us, fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. As informed to us no material discrepancies were noticed on such physical verification.

c) Title deeds in respect of all immovable properties are held in the name of the Company.

ii) As explained to us physical verification has been conducted by the management at reasonable intervals in respect of inventories of finished goods, stores, spare parts and raw materials. We were explained that no material discrepancies have been noticed on physical verification.

iii) As informed to us the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

iv) According to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186, wherever applicable, in respect of loans, investments and guarantees given by the Company. We are informed that the Company has not provided any security during the year

v) According to the information and explanations given to us the Company has not accepted any deposits, in terms of the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed thereunder

vi) The Central Government has prescribed the maintenance of cost records under sub-section (1) of Section 148 of the Companies Act, 2013 in respect of certain manufacturing activities of the Company. We have broadly reviewed such records and are of the opinion that prescribed accounts and records have been maintained.

vii) a) As per information and explanations given to us, the Company is regular in depositing undisputed statutory dues including provident fund, employees’ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities. As informed to us there are no outstanding statutory dues in arrears as at the last day of the financial year concerned for a period of more than six months from the date they became payable.

b) We have been informed that following disputed demands in respect of VAT, Excise Duty and Income Tax have not been deposited on account of pending appeals:

Particulars

Financial years of which the matters pertains

Forum where dispute is pending

Amount (Rs.)

Sales Tax / VAT

2004-2005

Joint Commissioner of Sales Tax (Appeals)

45,441

Sales Tax / VAT

2011-2012

Commercial Tax Tribunal (Noida, UP)

524,112

Sales Tax / VAT

2012-2013

Commercial Tax Tribunal (Noida, UP)

3,559,469

Sales Tax / VAT

2013-2014

Additional Commissioner (A)

269,428

Excise Duty

May 2004 to July 2004

Appellate Tribunal (CESTAT), Delhi

211,792

Excise Duty

October 2003 to August 2004

Appellate Tribunal (CESTAT), Allahabad

4,210,670

Income Tax

AY 2010-2011

Appellate Tribunal (ITAT), (Delhi)

1,876,894

Income Tax

AY 2012-2013

Appellate Tribunal (ITAT), (Delhi)

300,190

viii) Based on our audit procedures and on the basis of information and explanations given to us by the management, we are of the opinion that there is no default in repayment of loans or borrowings to the financial institutions and banks as at the year end. There are no loans from Government and the Company has not issued any debentures.

ix) As explained to us term loans obtained during the year were applied for the purpose for which the loans were obtained by the Company. The Company has not raised any money during the year by way initial or further public offer

x) Based upon the audit procedures performed and information and explanations given by the management, we report that, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit for the year ended 31st March, 2018.

xi) According to information and explanations given to us, the managerial remuneration paid and provided by the Company during the year is in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V of the Companies Act, 2013.

xii) The provisions of clause (xii) of the Order are not applicable as the Company is not a Nidhi Company as specified in the clause.

xiii) According to information and explanations given to us we are of the opinion that all related party transactions are in compliance with the Section 177 and 188 of Companies Act, 2013. Necessary disclosures has been made in the financial statements as required by the applicable accounting standards.

xiv) According to information and explanations given to us the Company has not made any preferential allotment or private placement of shares or debentures during the year

xv) According to information and explanations given to us the Company has not entered into any non-cash transaction with the Director or any person connected with him during the year

xvi) I n our opinion, in view of its business activities, the Company is not required to be registered under Section 45IA of Reserve Bank of India Act, 1934.

ANNEXURE- II TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 2(f) under ‘Report on other Legal and Regulatory Requirements’ section of our report of even date)

We have audited the internal financial controls over financial reporting of PPAP AUTOMOTIVE LIMITED (“the Company”) as of 31st March, 2018 in conjunction with our audit of the standalone Ind AS 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 ICAI. 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 auditors’ 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 I/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 authorisations of management and Directors of the Company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorised 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 31st 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 ICAI.

For O P BAGLA & CO. LLP

Chartered Accountants

Firm Registration No. 000018N / N500091

Place : Noida Atul Bagla

Dated : 21st May, 2018 Partner

Membership no. 091885


Mar 31, 2015

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

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements 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.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors' judgement, 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. An audit also includes evaluating the appropriateness of the 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 on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:-

(i) in the case of the balance sheet, of the state of affairs of the Company as at 31st March 2015;

(ii) in the case of the statement of profit and loss, of the profit for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by 'the Companies (Auditor's Report) Order, 2015, issued by the Central Government of India in terms of sub-section (11) of Section 143 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 explanations given to us, we give in the Annexure 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 purposes of our audit.

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

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

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

(e) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 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 33 to the financial statements.

ii. In our opinion and as per the information and explanations provided to us, the Company has not entered into any long-term contracts including derivative contracts, requiring provision under applicable laws or accounting standards, for material foreseeable losses.

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

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE AUDITORS' REPORT ON ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2015

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

(b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

2. (a) Physical verification has been conducted by the management at reasonable intervals in respect of finished goods, stores, spare parts and raw materials.

(b) In our opinion, 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) In our opinion, the Company is maintaining proper records of inventories. The discrepancies noticed on such verification between the physical stocks and book records were not significant and the same have been properly dealt with in the books of account.

3. As informed to us, the Company has not granted loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act.

4. In our opinion, 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 and services. During the course of audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. According to the information and explanations given to us, the Company has not accepted any deposits, in terms of the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under.

6. The Central Government has prescribed the maintenance of cost records under sub-section (l) of Section 148 of the Companies Act, in respect of certain manufacturing activities of the Company. We have broadly reviewed such records and are of the opinion that prescribed accounts and records have been maintained

7. (a) As per information and explanations given to us, the Company is regular in depositing undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities. There are no outstanding statutory dues as at the last day of the financial year under audit for a period of more than six months from the date they became payable.

(b) We have been informed that following disputed demands in respect of VAT, Service Tax, Excise Duty, Entry Tax and Income Tax have not been deposited on account of pending appeals:

Particulars Financial years of which the Forum where dispute is pending matters pertains

Sales Tax 2004-2005 Joint Commissioner of Sales Tax (Appeals)

Excise Duty August 2003 to August 2004 Appellate Tribunal (CESTAT), Delhi

Excise Duty May 2004 to July 2004 Appellate Tribunal (CESTAT), Delhi

Income Tax A.Y 2003-2004 Commissioner of Income Tax Appeal (Delhi)

Income Tax A.Y 2009-2010 Commissioner of Income Tax Appeal (Delhi)

Income Tax A.Y 2010-2011 Commissioner of Income Tax Appeal (Delhi)

Income Tax A.Y 2011-2012 Commissioner of Income Tax Appeal (Delhi)

Income Tax A.Y 2012-2013 Commissioner of Income Tax Appeal (Delhi)

Particulars Amount (Rs.)

Sales Tax 44,541

Excise Duty 7,072,066

Excise Duty 211,792

Income Tax 55,655

Income Tax 2,690,995

Income Tax 2,939,730

Income Tax 243,430

Income Tax 300,190

c) In our opinion, and according to the information and explanations given to us, amounts required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder have been transferred to such fund within time.

8. The Company has no accumulated losses as at the end of the year. The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

9. Based on our audit procedures and on the basis of information and explanations given to us, by the management, we are of the opinion that there is no default in repayment of dues to the Financial Institutions, banks or debenture holders as at the year end.

10. According to information and explanations given to us the Company has not given any guarantee for loan taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

11. In our opinion, term loans were applied for the purpose for which the loans were obtained by the Company.

12. Based upon the audit procedures performed and information and explanations given by the management, we report that, no fraud on or by the Company has been noticed or reported during the course of our audit for the year ended 31st March, 2015.

For O. P Bagla & Co.

Chartered Accountants Firm Registration No. 000018N

Place : Noida Atul Bagla

Date : 26th May, 2015 Partner

Membership No. 91885


Mar 31, 2014

1. We have audited the accompanying financial statements of PPAP AUTOMOTIVE LIMITED (the "Company"), which comprise the Balance Sheet as at March 31, 2014 , 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, which we have signed under reference to this report.

Management''s Responsibility for the Financial Statements

2. The Company''s 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 notified under the Companies Act, 1956 of India (the "Act"), read with the General Circular 15/ 2013 dated September 13, 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.

Auditors'' Responsibility

3. 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 and other applicable authoritative pronouncements 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.

4. An audit involves performing procedures to obtain audit evidence, about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments; the auditors consider 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 entity''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.

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

Opinion

6. In our opinion, and to the best of our information and according to the explanations given to us, the accompanying 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 PROFIT for the year ended on that date and;

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

Report on Other Legal and Regulatory Requirements

7. 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 explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

8. 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 dealt with by this report comply with the Accounting Standards notified under the Act read with the General Circular 15/ 2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

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

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

Referred to in paragraph 7 of the Independent Auditors'' Report of even date to the members of PPAP AUTOMOTIVE LIMITED on the financial statements as of and for the year ended March 31, 2014.

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

b) As explained to us, major fixed assets have been physically verified by the management during the year. We have been informed that the discrepancies noticed on such verification as compared to book record were not material and have been properly dealt with in the books of account. In our opinion the frequency of verification is reasonable.

c) The Company has disposed off some of its fixed assets during the year. However in our opinion the same does not affected the going concern status of the company.

2. a) Physical verification has been conducted by the management at reasonable intervals in respect of finished goods, stores, spare parts and raw materials.

b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of these stocks followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion the Company is maintaining proper records of inventories. The discrepancies noticed on such verification between the physical stocks and book records were not significant and the same have been properly dealt with in the books of account.

3. 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 with regard to purchase of inventories, fixed assets and with regard to the sale of goods. During the course of audit, no major weakness has been noticed in the underlying internal control system.

4. a) In our opinion and according to information and explanations given to us, the transactions that needed to be entered in the register maintained under section 301 of the Companies Act, 1956 have been entered in the register. b) In our opinion, the transactions made in pursuance of contracts/ arrangements entered in the register maintained under Section 301 of the Companies Act,1956 and exceeding the value of Rs.500,000 in respect of each party during the year have been made at prices which appear reasonable as per information available with the Company.

5. In our opinion and according to the information and explanations given to us, the Company has an adequate internal audit system commensurate with its size and nature of its business.

6. The Central Government has prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed such records and are of the opinion that prescribed accounts and records have been made and maintained.

7. a) As per information and explanations given to us, the Company has been 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, Custom Duty, Excise Duty, Cess, Octroi, Entry Tax and other statutory dues with the appropriate authorities. There are no undisputed statutory dues at the year end outstanding for a period of more than six months from the date they become payable.

b) We have been informed that following disputed demands in respect of Income Tax, Excise Duty, Sales Tax and Entry Tax have not been deposited on account of pending appeals.

Particulars Financial years the Forum where dispute Amount (Rs.) of which the is pending matters pertains

Service Tax 17.08.2002 to 31.03.2004 Deputy Commissioner 63,630

Sales Tax 2004-2005 Joint Commissioner of Sales Tax (Appeals) 3,51,890

Excise Duty August 2003 to Appellate Tribunal 2004 (CESTAT), Delhi 70,72,066

Excise Duty May 2004 to Appellate Tribunal July 2004 (CESTAT), Delhi 2,11,672

Income Tax A.Y. 2003-2004 Commissioner of Income Tax Appeal (Delhi) 55,655

Income Tax A.Y. 2007-2008 Commissioner of Income Tax Appeal (Delhi) 9,27,572

Income Tax A.Y. 2009-2010 Commissioner of Income Tax Appeal (Delhi) 19,75,945

Income Tax A.Y. 2010-2011 Commissioner of Income Tax Appeal (Delhi) 26,80,825

Income Tax A.Y. 2011-2012 Commissioner of Income Tax Appeal (Delhi) 34,63,470

8. The Company does not have any accumulated losses at the end of the financial year. Further, there are no cash losses during the financial year under audit and in the immediately preceding financial year.

9. Based on our audit procedures and on the basis of information and explanations given to us by the management, we are of the opinion that there is no default in repayment of dues to the Financial Institution, Banks or Debenture holders as at the year end.

10. According to the information and explanations given to us, the term loans taken by the Company have been applied for the purposes for which the loans were obtained.

11. According to the information and explanations given to us, the funds raised on short term basis have not been utilized for long term investments.

12. Based upon the audit procedures performed and information and explanations given by the management, we report that, no fraud on or by the Company has been noticed or reported during the course of our audit for the year ended 31st March, 2014.

13. Matters specified in clauses (iii), (vi), (xii) to (xv), (xviii) to (xx) of paragraph 4 of the CARO, 2003 do not apply to the Company.

For O. P. BAGLA & CO. CHARTERED ACCOUNTANTS Firm Regn. No. 000018N (ATUL BAGLA)

Place : Noida PARTNER Dated : 27.05.2014 M No. 91885


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of PRECISION PIPES AND PROFILES COMPANY LTD. as at March 31, 2013, which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("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.

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

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

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (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;

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.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

Referred to in paragraph of our report of even date on accounts of M/s Precision Pipes and Profiles Company Ltd. for the year ended 31st March, 2013.

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

(b) The Fixed Assets are physically verified by the management at reasonable intervals during the year, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies between the book records and the physical inventory have been noticed.

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

2. (a) The Inventory of finished goods, stores, spares parts and raw material have been physically verified by the management at reasonable intervals and also at the end of the financial year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of the inventory followed by the management were found reasonable and adequate in relation to the size of the Company and nature of its business.

(c) On the basis of our examination of the 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.

3. (a) The Company has not granted any loans or advances, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, except in the ordinary course of business.

(b) The Company has not taken unsecured loans, from the parties listed in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year and the year - end balance of such loans aggregates of Rs. NIL and NIL respectively.

(c) In our opinion, the terms and conditions of loans taken are not, prima facie, prejudicial to the interest of the company.

4. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any instance of major weaknesses in the aforesaid internal control procedures.

5. (a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the Register maintained under Section 302 of Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contract or arrangements entered into the register in pursuance of Section 301 of the Act, 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 market prices prevailing at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Companies Act, 1956 and rules framed there under.

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

8. We have reviewed the books of account maintained by the Company in respect of product where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under section 209(1) (d) of the Companies Act,1956. We are of the opinion that prima facie the prescribed accounts and records have been maintained and are being made up. 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 records produced and examined by us, in our opinion, the undisputed statutory dues in respect of Provident Fund, E.S.I. income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and others as applicable have been regularly deposited by the Company during the year with the appropriate authorities.

(b) According to the information and explanations given to us and records of the Company examined by us there is no undisputed dues of Provident Fund, E.S.I., income tax, wealth tax, sales tax, customs duty, excise duty ,cess as at 31st March, 2013.

(c) According to the information and explanations given to us and record of the company examined by us, details of dues of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute are given below:

Particulars Financial years of which the Forum where dispute is pending Amount (Rs.) matters pertain

Service Tax 17.08.2002 to 31.03.2004 Deputy Commissioner 63,630.00

Sales Tax 2004-2005 Joint Commissioner of Sales Tax (Appeals) 4,76,492.00

Excise Duty October 2003 to August 2004 Commissioner (Appeals) Central Excise, Noida 84,21,340.00

Excise Duty May 2004 to July 2004 Commissioner (Appeals) Central Excise, Delhi 2,11,672.00

Income Tax A.Y. 2003-2004 Commissioner of Income Tax Appeal (Delhi) 55,655.00

Income Tax A.Y. 2007-2008 Commissioner of Income Tax Appeal (Delhi) 9,27,572.00

Income Tax A.Y. 2009-2010 Commissioner of Income Tax Appeal (Delhi) 19,75,945.00

10. The Company has neither accumulated losses as at 31st March,2013 nor has it incurred any cash losses during 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 repayment of dues to financial institutions, banks.

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 Provision of any special statute applicable to Chit Fund / Nidhi / Mutual Benefit Fund/ Societies are not applicable to the Company.

14. In our opinion and according to the information and explanation given to us, the Company is not a dealer or trader in securities.

15. In our opinion and according to the information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. 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, there are no funds raised on a short-term basis, which have been used for long term investment, vice versa.

17. The Company has not made any preferential allotments of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

18. The Company has not issued any debenture during the year.

19. The Company has not received money by Pubic Issue during the year.

20. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practice in India, and according to the information and explanation given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management. FOR DHARAM TANEJA ASSOCIATES

CHARTERED ACCOUNTANTS

FIRM REG. NO. : 003563N

D.V.TANEJA

Place : Noida Partner

Date : 24th May, 2013 Membership No. 007718


Mar 31, 2012

1. We have audited the attached Balance Sheet of PRECISION PIPES & PROFILE COMPANY LTD. as at 31st march 2012 and also the profit & Loss Account and Cash Flow Statement of the Company forthe year ended on date annexed thereto. These financial statements are the responsibility ofthe Company's management. Our responsibility is to express an opinion on these financial statements based on ouraudit.

2. We have 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 statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's report) Order, 2003 issued by the Central Government of India in terms of Section 227 (4A) ofthe companies Act, 1956 of India (the act) and on the basis of such checks as considered appropriate and according to the information and explanations given to us during the course of audit, we enclosed in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 ofthe said order to the extent applicable.

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 forthe purpose of our audit;

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

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

d) In our opinion, these accounts have been prepared in compliance with the applicable accounting standards referred to in sub-section (3C) of section 211 ofthe CompaniesAct, 1956;

e) On the basis of written representation received from the Directors as on March 31,2012 and taken record by the Board of Directors, we report that none ofthe directors is disqualified as on March 31,2012

f) From being appointed as a Director in term of clause (g) of sub-section (1) of section 274 ofthe CompaniesAct, 1956;

g) In our opinion and to the best of our information and according to explanations given to us, the said accounts together with notes thereto and statement of Significant Accounting Policies given in the prescribed manner the information required by the Companies act, 1956, and also give, a true and fair view in conformity with the accounting principles generally accepted in India:-

(I) In the case of Balance Sheet of the State of affairs ofthe Company as on 31st March, 2012 and;

(ii) In the case of Profit & LossAccount, ofthe profit forthe yearended on that date.

(iii) In the case ofthe Cash Flow Statement, ofthe cash flow forthe year ended on that date.

Referred to in paragraph (3) of our report of even date on accounts of M/s. Precision Pipes & Profiles Company Ltd, for the year ended on 3151 March 2012

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

assets

(b) The Fixed Assets are physically verified by the management at reasonable intervals during the year, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies between the book records and he physical inventory have been noticed.

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

(ii) (a) The Inventory of finished goods, stores, spare parts and raw material have been physically verified by the management at

reasonable intervals and also at the end ofthe financial year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of the inventory followed by the management were found reasonable and adequate in relation to the size of the Company and nature of its business.

(c) On the basis of our examination of the 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.

(iii) (a) The Company has not granted any loans or advances, secured or unsecured, to companies, firms or other parties listed in the

register maintained under Section 301 ofthe Companies Act, 1956, except in the ordinary course of business.

(b) The Company has not taken unsecured loans, from the parties listed in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year and the year - end balance of such loans aggregates to Rs. NILand NIL respectively.

(c) In our opinion, the terms and conditions of loan taken are not, prima facie, prejudicial to the interests ofthe company.

(d) In respect of the aforesaid loans, the loan including interest is payable on demand.

(iv) In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any instance of major weaknesses in the aforesaid internal control procedures

(v) (a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the

Register maintained under Section 301 ofthe Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contract or arrangements entered into the register in pursuance of Section 301 of the Act, 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 market prices prevailing at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Companies Act, 1956 and rules framed there under.

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

(viii) We have reviewed the books of account maintained by the Company in respect of product where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under section 209(1)(d) of the Companies Act, 1956. We are of the opinion that prima facie the prescribed accounts and records have been maintained and are being made up. We have not, however, made a details examination of the records with a view to determining whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and according to the books and records are produced and examined by

us, in our opinion, the undisputed statutory dues in respect of Provident Fund, E.S.I. income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and others as applicable have been regularly deposited by the Company during the year with the appropriate authorities.

(b) According to the information and explanations given to us and records of the Company examined by us there is no undisputed dues of Provident Fund, E.S.I., income tax, wealth tax, sales tax, service tax, customs duty, excise duty, cess as at 31st March 2012.

(c) According to the informations and explanation given to us and record of the company examined by us, details of dues of income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess which have not been deposited on account of any dispute are given below:

Particulars Financial years to which the matters pertains Forum where dispute is pending Amount (Rs.)

Service tax 17.08.2002 to 31.03.2004 Deputy Commissioner 63,630.00

Sales tax 2004-2005 Joint Commissioner of Sales tax (Appeals) 45,441.00

Excise Duty October 2003 to August 2004 Commissioner (Appeals) Central Excise, Noida_84,21,340.00

ExciseDuty May 2004 to July 2004 Commissioner (Appeals) Central Excise, Delhi 2,11,672.00

Excise Duty August2003 to August2004 Commissioner (Appeals) Central Excise,Delhi 70,72,186.00

Income Tax A.Y. 2003-2004 Commissioner of Income tax Appeal (Delhi) 55.655.00

Income Tax A.Y. 2007-2008 Commissioner of Income tax Appeal (Delhi) 9,27,572.00

Income Tax A.Y. 2009-2010 Commissioner of Income tax Appeal (Delhi) 19,75,945.00

(x) The Company has neither accumulated losses as at 31st march 2012 nor it has incurred any cash losses during the financial year ended on that date or in the immediately preceding financial year.

(xi) 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 financial institutions, banks.

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

(xiii) The Provision of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

(xiv) In ouropinion and according to the information and explanation given to us, the Company is not a dealer or trader in securities.

(xv) In our opinion and according to the information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xvi) The Company has obtained term loans from ICICI bank Ltd.

(xvii) 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, there are no funds raised on a short-term basis, which have been used for long term investment, vice versa.

(xviii) The Company has not made any preferential allotments of shares to parties and companies covered in the register maintained undersection301 of the Companies Act, 1956 during the year.

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

(xx) The Company has not received money by Public issue during the year.

(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practice in India, and according to the information and explanation given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, norhave we been informed of such case by the management.

For DHARAM TANEJA ASSOCIATES CHARTERED ACCOUNTANTS (D. V. Taneja)

Partner Membership No.7718

Place: New Delhi

Dated: 28th May 2012


Mar 31, 2011

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

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

3. As required by the Companies (Auditors' report) Order, 2003 issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 of India (the Act') and on the basis of such checks as considered appropriate and according to the information and explanations given to us during the course of audit, we enclosed in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent applicable.

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 purpose of our audit;

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

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

d) In our opinion, these accounts have been prepared in compliance with the applicable accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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

f) In our opinion and to the best of our information and according to explanations given to us, the said accounts together with notes thereto and Statement on Significant Accounting Policies given in the prescribed manner the information required by the Companies Act, 1956, and also give, a true and fair view in conformity with the accounting principles generally accepted in India:-

(i) In the case of Balance Sheet, of the state of affairs of the Company as on 31st March, 2011 ; and

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

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

ANNEXURE TO THE AUDITORS' REPORT

Referred to in paragraph (3) of our report of even date on accounts of M/s. Precision Pipes & Profiles Company Ltd, for the year ended on 31st March 2011

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

(b) The Fixed Assets are physically verified by the management at reasonable intervals during the year, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies between the book records and the physical inventory have been noticed.

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

(ii) (a) The inventory of finished goods, stores, spare parts and raw materials have been physically verified by the management at reasonable intervals and also at the end of the financial year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of the inventory followed by the management were found reasonable and adequate in relation to the size of the Company and nature of its business.

(c) On the basis of our examination of the 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.

(iii) (a) The Company has not granted any loans or advances, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, except in the ordinary course of business.

(b) The Company has taken unsecured loans from the parties listed in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year and the year - end balance of such loans aggregates to Rs.385.04 Lacs and NIL respectively.

(c) In our opinion, the terms and conditions of loan taken are not, prima facie, prejudicial to the interests of the company.

(iv) In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any instance of major weaknesses in the aforesaid internal control procedures.

(v) (a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the Register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered into the register in pursuance of Section 301 of the Act, 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 market prices prevailing at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Companies Act, 1956 and rules framed there under.

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

(viii) We have 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, the maintenance of cost records has been prescribed under Section 209(1)(d) of the Companies Act, 1956. We are of the opinion that prima facie the prescribed accounts and records have been maintained and are being made up. We have not, however, made a details examination of the records with a view to determining whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and according to the books and records as produced and examined by us, in our opinion, the undisputed statutory dues in respect of Provident Fund, E.S.I. income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and others as applicable have been regularly deposited by the Company during the year with the appropriate authorities.

(b) According to the information and explanations given to us and records of the company examined by us there is no undisputed dues of Provident Fund, E.S.I., income tax, wealth tax, sales tax, service tax, customs duty, excise duty, cess as at 31st March 2011.

(c) According to the information and explanations given to us and record of the company examined by us, details of dues of income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess which have not been deposited on account of any dispute are given below:

Particulars Financial years to Forum where dispute Amount (Rs.) which the matter pertains is pending

Service Tax 17.08.2002 to 31. 03.2004 Deputy Commissioner 63,630.00

Sales Tax 2004-2005 Joint Commissioner of Sales Tax (Appeals) 45,441.00

Excise Duty October 2003 to August 2004 Commissioner (Appeals) Central Excise, Noida 84,21,340.00

Excise Duty May 2004 to July 2004 Commissioner (Appeals) Central Excise, Delhi 2,11,672.00

Excise Duty August 2003 to August 2004 Commissioner (Appeals) Central Excise, Delhi 70,72,186.00

Income Tax A.Y. 2003-2004 Commissioner of Income Tax Appeal (Delhi) 55,655.00

Income Tax A.Y. 2006-2007 Commissioner of Income Tax Appeal (Delhi) 8,48,415.00

Income Tax A.Y. 2007-2008 Commissioner of Income Tax Appeal (Delhi) 9,27,572.00

Income Tax A.Y. 2008-2009 Commissioner of Income Tax Appeal (Delhi) 11,93,596.00

(x) The Company has neither accumulated losses as at 31st March 2011 nor it has incurred any cash losses during the financial year ended on that date or in the immediately preceding financial year.

(xi) 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 financial institutions, banks etc.

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

(xiii) The provision of any special statute applicable to chit fund / nidhi / mutual benafit fund / societies are not applicable to the Company.

(xiv) In our opinion and according to the information and explanation given to us, the Company is not a dealer or trader in securities.

(xv) In our opinion and according to the information and explanation given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) The Company has obtained term loans from ICICI Bank Ltd.

(xvii) 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, vice versa.

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

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

(xx) The Company has not received money by public issue during the year

(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

for DHARAM TANEJA ASSOCIATES

CHARTERED ACCOUNTANTS

Place : New Delhi (D.V. TANEJA)

Dated : 30th May' 2011 PARTNER


Mar 31, 2010

1. We have audited the attached Balance Sheet of PRECISION PIPES & PROFILES COMPANY LTD as at 31st march 2010 and also the Profit & Loss Account and Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors report) Order, 2003 issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 of India (the Act) and on the basis of such checks as considered appropriate and according to the information and explanations given to us during the course of audit, we enclosed in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent applicable.

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 purpose of our audit;

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

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

d) In our opinion, these accounts have been prepared in compliance with the applicable accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the Directors as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as a director in term of clause ( g ) of sub-section (1) of section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to explanations given to us, the said accounts together with notes thereto and Statement on Significant Accounting Policies given in the prescribed manner the information required by the Companies Act, 1956, and also give, a true and fair view in conformity with the accounting principles generally accepted in India:-

(i) In the case of Balance Sheet, of the state of affairs of the Company as on 31st March, 2010; and

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

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

ANNEXURE TO THE AUDITORS REPORT

Referred to in paragraph (3) of our report of even date on accounts of M/s. Precision Pipes & Profiles Company Ltd, for the year ended on 31st March 2010

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

(b) The Fixed Assets are physically verified by the management at reasonable intervals during the year, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies between the book records and the physical inventory have been noticed.

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

(ii) (a) The inventory of finished goods, stores, spare parts and raw materials have been physically verified by the management at reasonable intervals and also at the end of the financial year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of the inventory followed by the management were found reasonable and adequate in relation to the size of the Company and nature of its business.

(c) On the basis of our examination of the 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.

(iii) (a) The Company has not granted any loans or advances, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, except in the ordinary course of business.

(b) The Company has taken unsecured loans, from the parties listed in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year and the year - end balance of such loans aggregates to Rs. 571.30 Lacs and Rs. 379.66 Lacs, respectively.

(c) In our opinion, the terms and conditions of loan taken are not, prima facie, prejudicial to the interests of the company.

(d) In respect of the aforesaid loans, the loan including interest is repayable on demand.

(iv) In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any Instance of major weaknesses in the aforesaid internal control procedures.

(v) (a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the Register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered into the register in pursuance of Section 301 of the Act, 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 market prices prevailing at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Companies Act, 1956 and rules framed there under.

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

(viii) We have 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, the maintenance of cost records has been prescribed under Section 209(1 )(d) of the Companies Act, 1956. We are of the opinion that prima facie the prescribed accounts and records have been maintained and are being made up. We have not, however, made a details examination of the records with a view to determining whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and according to the books and records as produced and examined by us, in our opinion, the undisputed statutory dues in respect of Provident Fund, E.S.I, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and others as applicable have been regularly deposited by the Company during the year with the appropriate authorities.

(b) According to the information and explanations given to us and records of the company examined by us there is no undisputed dues of Provident Fund, E.S.I., income tax, wealth tax, sales tax, service tax, customs duty, excise duty, cess as at 31st March 2010.

(c) According to the information and explanations given to us and record of the company examined by us, details of dues of income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess which have not been deposited on account of any dispute are given below:

Particulars Financial years to Forum where dispute Amount (Rs.)

which the matter pertains is pending

Service Tax 17.08.2002 to 31.03.2004 Deputy Commissioner 63,630.00

Sales Tax 2004-2005 Joint Commissioner of Sales Tax (Appeals) 45,441.00

Sales Tax (UP) 2005-2006 Appeal to be filed with

Joint Commissioner of Sales Tax (Appeals) 69,607.00

Sales Tax (UP) 2006-2007 Appeal to be filed with

Joint Commissioner of Sales Tax (Appeals) 38,837.00

Sales Tax (UP) 01.04.2007 to 31.12.2008 Joint Commissioner of Sales Tax(Appeals) 1,22,037.00 Sales Tax (UP) 2008-2009 Appeal to be filed

Joint Commissioner of SalesTax (Appeals) 2,40,815.00

Excise Duty October 2003 to August 2004 Commissioner (Appeals) Central Excise, Noida 84,21,340.00

Excise Duty May 2004 to July 2004 Commissioner (Appeals) Central Excise, Delhi 2,11,672.00

Excise Duty August 2003 to August 2004 Commissioner (Appeals) Central Excise, Delhi 70,72,186.00

Income Tax A.Y. 2003-2004 Commissioner of Income Tax Appeal (Delhi) 55,655.00

Income Tax A.Y, 2004-2005 Commissioner of Income Tax Appeal (Delhi) 3,90,788.00

Income Tax A.Y. 2006-2007 Commissioner of Income Tax Appeal (Delhi) 8,48,415.00

Income Tax A.Y. 2007-2008 Commissioner of Income Tax Appeal (Delhi) 927572.00

(x) The Company has neither accumulated losses as at 31s1 March 2010 nor it has incurred any cash losses during the financial year ended on that date or in the immediately preceding financial year.

(xi) 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 financial institutions, banks.

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

(xiii) The provision of any special statute applicable to chit fund / nidhi / mutual benafit fund / societies are not applicable to the Company.

(xiv)ln our opinion and according to the information and explanation given to us, the Company is not a dealer or trader in securities.

(xv) In our opinion and according to the information and explanation given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi)The Company has obtained term loans from ICICI Bank Ltd.

(xvii) 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, vice versa.

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

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

(xx) The Company has not received money by public issue during the year

(xxi)During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

for DHARAM TANEJA ASSOCIATES CHARTERED ACCOUNTANTS

(D.V. TANEJA) PARTNER

Place : New Delhi.

Dated : 26,h May2010

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