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Auditor Report of Setco Automotive Ltd.

Mar 31, 2015

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

- Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the company and for preventing and detecting the 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 internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error

- Auditors' Responsibility

Our responsibility is to express an opinion on these 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 the 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 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 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 on adequate internal financial controls system over financial reporting and the operative effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by Company's Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

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

- Emphasis of Matter

We draw attention to the following matter in the Notes to the financial statements:

Trade Payables, Trade Receivables and other debit and credit balances are subject to reconciliation and/or confirmation (Refer Note No. 34(i) of Financial Statements)

Our opinion is not modified in respect of this matter.

- Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of Section 143 (11) of the Act, we give in the Annexure, a statement on the matters specified in paragraphs 3 and 4 of the said Order.

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) In our opinion, the matter described under the Emphasis of Matters paragraph above, prima facie, does not appear to have any adverse impact on the functioning of the Company.

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

g) With respect to the other matters to be included in the Auditors' Report in accordance with Rule 11 of the Companies Act (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 financial statements. (Refer Note No. 33 (B) of the Financial Statements).

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

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

ANNEXURE TO INDEPENDENT AUDITORS' REPORT (Referred to in paragraph under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date)

1. In respect of its fixed assets:

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

b) As per the information and explanations given to us, there is a phased program of physical verification of fixed assets as adopted by the Company, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

2. In respect of its inventories:

a) According to the information and explanations given to us, inventories (excluding stocks with third parties) were physically verified during the year by the management at reasonable intervals.

b) According to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. No material discrepancies were noticed on physical verification of inventories.

3. According to the information and explanations given to us, the Company has not granted any Secured or Unsecured Loans to Companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and sale of goods. The internal control system with regard to inventory management including purchase of inventory needs to be further strengthened. However, in our opinion, there is no continuing failure to correct major weaknesses in such internal controls.

5. According to the information and explanations given to us, the Company has not accepted any deposits, either under the directives issues by the Reserve Bank of India or within the meaning of section 73 to 76 of the Companies Act 2013 and the rules framed there under.

6. We have been informed that company is not required to maintain cost records u/s. 148 (1) of the Companies Act 2013.

7. According to the information and explanations given to us and on the basis of our examination of books of account:

(a) The Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Value Added Tax, Central Sales Tax, Income Tax, Tax Deducted at Source, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess with appropriate authorities though there have been few instances of delay in deposition in respect of Employees State Insurance, Income Tax, Wealth Tax, Custom Duty, Service Tax and Tax Deducted at Source. According to the information and explanations given to us, there are no disputed items outstanding for more than six months as of 31st March 2015.

(b) According to the information and explanations given to us and records of the Company examined by us, no amount has remained unpaid on account of any dispute as of 31st March 2015.

(c) According to the information and explanations given to us there has been no delay in transferring the amounts, required to be transferred to Investor Education and Protection Fund in accordance with the provisions of the Companies Act 1956 (1 of 1956) and rules made there under.

8. The company does not have accumulated losses as at 31st March 2015. The company has not incurred cash losses during the current year and in the immediately preceding financial year.

9. In our opinion and according to the information & explanations given to us, the company has not defaulted in repayment of dues with regard to loans obtained from banks. The company has neither taken any loan from any financial institution nor issued any debentures.

10. The Company has given guarantees for loans taken by its wholly owned ultimate foreign subsidiaries and Indian subsidiary from banks. In our opinion and according to the information and explanations given to us, the terms and conditions of the said guarantees are not, prima facie, prejudicial to the interest of the company.

11. In our opinion and according to the information and explanations given to us, and examination of records of the company, the term loans availed by the Company during the year were applied for the purposes for which the loans were obtained.

12. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year

13. In our opinion and as per the information and explanations given to us, the nature of the Company's business/activities during the year is such that clauses tiii) (a) & tb) of the Companies (Auditor's Report) Order, 2015 are not applicable.

For MANESH MEHTA & ASSOCIATES

Chartered Accountants (Firm Registration No. 115832W)

(Manesh P. Mehta)

Place: Mumbai Partner

Date: May 26, 2015 Membership No. 036032




Mar 31, 2014

* Report on the Financial Statements

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

* Management''s Responsibility for the Financial Statements

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 ("the Act") read: with 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 controls 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 the 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 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 the accounting policies used and the reasonableness of the accounting estimates made by the 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 aforesaid 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 31 March, 2014;

(b) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

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

* Emphasis of Matter

Trade Payables, Trade Receivables and other debit and credit balances are subject to reconciliation and/or confirmation (Refer Note No. 36[i]).

Our opinion is not qualified in respect of this matter

* Report on Other Legal and Regulatory Requirements

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 Section 227[4A] of the Act, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order As required by Section 227(3) of the Act, we report that:

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.

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.

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.

In our opinion, the Balance Sheet, the Statement of Profit and Lose, and the Cash Flaw Statement comply with the Accounting Standards notified under the Companies Act, 1956 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.

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

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph under the heading "Report on Other Legal and Regulatory Requirements" of our repart of even date]

1. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets an the basis of available information

b) As per the information and explanations given to us, there is a phased program of physical verification of fixed assets as adopted by the Company, which in our opinion, is reasonable having regard to the size of the company and the nature of the assets. As informed, no material discrepancies were noticed on such verification.

c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

2. In respect of its inventories:

a) According to the information and explanations given to us, inventories [excluding stocks with third parties)were physically verified during the year by the management at reasonable intervals.

b) According ta the information and explanations given to us, the procedures of physical verification of inventories fallowed by the management are reasonable and adequate in relation to size of the Company and the nature of its business

c) In our opinion and according tD the information and explanations given to us, the Company has maintained proper records of its inventories. No material discrepancies were noticed on physical verification of inventory.

3. According to the information and explanations given to us, the Company has neither granted nor taken any loans to/from Companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us. there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and sale of goods. The internal control system with regard to inventory management including purchase of inventory needs to be further strengthened. However, in our opinion, there is no continuing failure to correct major weaknesses in such internal controls.

5. According to the information and explanations given to us, we are of the opinion that particulars of contracts or arrangements that need to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1I956, have been so entered. In our opinion and according to the information explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lacs have been made at prices which prima facie appear reasonable as per information available with the company.

6. According to the information and explanations given ta us, the Company has not accepted any deposits from the public within the meaning of section 58A and 58AA of the Companies Act, 1956 and the rules framed there under

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

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

9. According do the information and explanations given to us and on the basis of our examination of books of account:

a) The Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Value Added Tax, Central Sales Tax, income Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess with appropriate authorities though there have been few instances of delay in deposition in respect of Provident Fund, Central Sales Tax, Value Added Tax, Employee State Insurance, Wealth Tax, Service Tax and Tax Deducted at Source. According do the information and explanations given to us, there are no undisputed items outstanding for more than six months as of 31st March, 2014.

b) According to information and explanations given do us and records of the company examined by us, the particulars of dues related to Sales Tax/Value Added Tax which have not been deposited as on 31st March, 2014 on account of dispute are as fallows:

Nature of Nature of Forum where Period to Statute Dues Dispute is which pending amount relates

Central Sales Tax Penalty Joint A.Y 2013-14 Act, 1956 / Value Commissioner Added Tax, 2005 (Appeals), Commercial Tax Department. Uttarakhand

Nature of Amount Statute Involved (Rs.) Central Sales Tax 22,77,634/- Act, 1956 / Value Added Tax, 2005

10. The company does not have accumulated losses as at 31.03.2014. The company has not incurred cash losses during the current year and in the immediately preceding financial year.

11. In our opinion and according to the information & explanations given to us the company has not defaulted in repayment of dues with regard to loans obtained from banks. The company has not taken loan from any financial institution nor issued any debentures

12. The Company has given guarantees for loans taken by its ultimate foreign subsidiaries from banks. In our opinion and according to the information and explanations given to us, the terms and conditions of the said guarantees ere not, prima facie, prejudicial to the interest of the company.

13. In our opinion and according to the information and explanations given to us, the term loans availed by the Company during the year were, prirra facie, applied for the purposes for which the loans were obtained.

14. According to the information and explanations given to us and based on our examination of the balance sheet on an overall basis, we are of the opinion that, prima facie, short-term funds amounting to Rs. 16,24,06,504/- have been used for long-term investment in non-current assets.

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

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

17. The company has not raised any money from public issue during the year.

18. To the best of our knowledge and belief and according to the information and Explanations given to us, no fraud on or by the Company was noticed or reported during the year.

19. In our opinion and as per the information and explanations given to us, the nature of the Company''s business/activities during the year is such that clauses (xii), (xiii), and (xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable.

For MANESH MEHTA & ASSOCIATES Chartered Accountants (Firm Registration No. 115839W)

(M.P. Mehta) Place: Mumbai: Partner Date: May 30, 2014 Membership No. 036032


Mar 31, 2012

1. We have audited the attached Balance Sheet of Setco Automotive Limited as at 31st March, 2012 and also the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of Section 227 (4A) 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.

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

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of 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 & 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 & Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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

f) Sundry debit & credit balances are subject to reconciliation and/or confirmation (Refer Note 41(i) - "Notes forming part of Financial Statements")

g) Attention is invited to the Note No. 35 - "Notes forming part of Financial Statements, on impact of survey proceedings conducted by Income tax Department during the year on MAT credit entitlement of Rs. 9,04,26,348/- forgone.

h) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read with Notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012

(ii) In the case of Statement of Profit and Loss, of the Profit for the year ended on that date, and

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

ANNEXURE

TO THE AUDITORS' REPORT

(Referred to in paragraph 3 of our report of even date)

1. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars and situation of fixed assets on the basis of available information.

b) As per the information and explanations given to us, there is a phased program of physical verification of fixed assets as adopted by the Company, which in our opinion, is reasonable having regard to the size of the company and the nature of the assets. As informed, no material discrepancies were noticed on such verification.

c) In our opinion and according to the information & explanations given to us, no substantial part of the fixed assets has been disposed off during the year and hence, going concern status of the company is not affected.

2. In respect of its inventories:

a) According to the information and explanations given to us, inventories (excluding stocks with third parties) were physically verified during the year by the management at reasonable intervals.

b) According to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. No material discrepancies were noticed on physical verification of inventory.

3. According to the information and explanations given to us, the Company has neither granted nor taken any loans to/from Companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and sale of goods. We have not observed any continuing failure to correct major weaknesses in such internal controls.

5. According to the information and explanations given to us, we are of the opinion that particulars of contracts or arrangements that need to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956, have been so entered.

In our opinion and according to the information & explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lacs have been made at prices which appear reasonable as per information available with the company.

6. According to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 58A and 58AA of the Companies Act, 1956 and the rules framed there under.

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

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

9. According to the information and explanations given to us and on the basis of our examination of books of account:

a) The Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, VAT, Central Sales Tax, Income Tax, Wealth Tax, Custom Duty, Excise Duty and Cess with appropriate authorities though there have been few instances of delay in deposition in respect of Service Tax, Tax Deducted at Source, Tax Collected at Source, Professional Tax and Central Sales Tax. According to the information and explanations given to us, there are no undisputed items outstanding for more than six months as of 31st March, 2012.

b) According to the information and explanations given to us, there were no disputed amounts remaining unpaid in respect of VAT, Central Sales Tax, Excise duty, Service Tax, Income Tax, Wealth Tax, Cess and Custom Duty.

10. The Company does not have accumulated losses as at 31.03.2012. The company has not incurred cash losses during the current year and in the immediately preceding financial year.

11. In our opinion and according to the information & explanations given to us, Company has not defaulted in repayment of dues with regard to loans obtained from banks. The company has not taken loan from any financial institution nor issued any debentures.

12. The Company has given guarantees for loans taken by its foreign subsidiaries from banks. In our opinion and according to the information and explanations given to us, the terms and conditions of the said guarantees are not, prima facie, prejudicial to the interest of the company.

13. In our opinion and according to the information and explanations given to us, the term loans availed by the Company during the year were, prima facie, applied for the purposes for which the loans were obtained.

14. According to the information and explanations given to us and based on our examination of the balance sheet on an overall basis, we report that no funds raised on short-term basis have been used for long- term investment.

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

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

17. The Company has not raised any money from public issue during the year.

18. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

19. In our opinion and as per the information and explanations given to us, the nature of the Company's business/activities during the year is such that clauses (xii), (xiii) and (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable.

For Manesh Mehta & Associates

Chartered Accountants

(Firm Registration No. : 115832W)

Place : Mumbai (M.P.MEHTA)

Date : 05.07.2012 Partner

(M. No. 036032)


Mar 31, 2010

1. We have audited the attached Balance Sheet of Setco Automotive Limited as at 31st March, 2010 and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan & 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 as amended by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of Section 227 (4A) 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.

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

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of 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, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e) Central Government has yet not notified the rules relating to the levy & collection of cess from Companies in terms of section 441A of the Companies Act, 1956. We are, therefore, not reporting on this matter as required by section 227 (3) (g) of the Companies Act, 1956.

f) On the basis of the 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.

g) Sundry debit & credit balances are subject to reconciliation and/or confirmation (Refer Note 13 of Schedule 18 - "Notes forming part of Accounts")

h) Attention is invited to Accounting Policy No. 7(i) in Schedule 17 - "Significant Accounting Policies" and Note No. 10 in Schedule 18 - "Notes forming part of Accounts" for the change in accounting policy made during the year in revenue recognition and its ultimate impact on the Profits and Reserves & Surplus of the company. The current years profits and Reserves & Surplus are lower by Rs. 40,61,284/- on account of the said change.

i) in our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read with the Significant Accounting Policies and Notes forming part of 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:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010 (ii) In the case of Profit and Loss Account, of the Profit for the year ended on that date, and (iii) In the case of Cash Flow Statement, of the cash flows for the year ended on that date. Annexure to the Auditors Report 1. In respect of its fixed assets:

a) The Company has maintained proper records showing particulars and situation of fixed assets. However, same is required to be refined with the newly implemented SAP computerized system.

b) As per the information and explanations given to us, there is a phased program of physical verification of fixed assets as adopted by the Company, which in our opinion, is reasonable having regard to the size of the company and the nature of the assets. As informed, no material discrepancies were noticed on such verification.

c) In our opinion and according to the information & explanations given to us, no substantial part of the fixed assets has been disposed off during the year and hence, going concern status of the company is not affected.

2. In respect of its inventories:

a) According to the information and explanations given to us, inventories were physically verified during the year by the management at reasonable intervals.

b) According to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. No material discrepancies were noticed on physical verification of inventory.

3. According to the information and explanations given to us, the Company has neither granted nor taken any loans to/ from Companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, with regard to purchase of inventory, fixed assets, sale of goods and services. We have not observed any continuing failure to correct major weaknesses in such internal controls.

5. According to the information and explanations given to us, we are of the opinion that particulars of contracts or arrangements that need to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, have been so entered. In our opinion and according to the information & explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lacs have been made at prices which are reasonable having regard to the prevailing market prices at the relevant times.

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

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

8. According to the information and explanations given to us, the maintenance of cost records has not been prescribed by the Central Government under section 209 (1) (d) of the companies Act, 1956.

9. According to the information and explanations given to us and on the basis of our examination of books of account: a) The Company has been generally regular in depositing undisputed statutory dues including Provident Fund and Employees State Insurance with appropriate authorities though there have been few instances of delay in deposition in respect of Professional Tax, Service Tax, Sales Tax, TCS, etc. However, there have been frequent delays during the year in depositing Tax deducted at Source. According to the information and explanations given to us, there are no undisputed items outstanding for more than six months as of 31st March, 2010.

b) According to the information and explanations given to us, there were no disputed amounts remaining unpaid inrespect of Sales Tax, Excise duty, Service Tax and Custom Duty except following amounts in respect of income tax: Sr. No. Name of the Statue Assessment Year Amount (Rs.) Forum where dispute is pending

Commissioner of Income Tax (Appeals),

1 Income Tax Act, 1961 2006-07 3,02,265/-

Baroda

2 Income Tax Act, 1961 2007-08 10,83,490/ Commissioner of Income (Appears) Baroda

10. The company does not have accumulated losses as at 31.03.2010. The company has not incurred cash losses during the current year and the immediately preceding financial year.

11. In our opinion and according to the information & explanations given to us, Company has not defaulted in repayment of dues with regard to loans obtained from banks. The company has not taken any other loan from any financial institution nor issued any debentures.

12. The Company has given guarantees for loans taken by its subsidiaries from banks. In our opinion and according to the information and explanations given to us, the terms and conditions of the said guarantees are not, prima facie, prejudicial to the interest of the company.

13. In our opinion and according to the information and explanations given to us, the term loans availed by the Company during the year were, prima facie, applied for the purposes for which the loans were obtained.

14. According to the information and explanations given to us and based on our examination of the balance sheet on an overall basis, we report that no funds raised on short-term basis have been used for long-term investment.

15. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year and accordingly, the question of whether the price at which the shares have been issued is prejudicial to the interest of the company does not arise.

16. The Company has not issued any debentures during the year and accordingly, the question of creating security in respect thereof does not arise.

17. The company has not raised any money from public issue during the year and in the recent past and accordingly, the question of disclosing the end use of money raised by public issue does not arise.

18. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

19. In our opinion and as per the information and explanations given to us, the nature of the Companys business/activities during the year is such that clauses (xii), (xiii) and (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable.

For MANESH MEHTA & ASSOCIATES

Chartered Accountants

(Firm Registration No.: 115832W)

(M.P.MEHTA)

Partner (M. No. 36032)

Place: Mumbai Date: 28/06/2010

 
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