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Auditor Report of Sundaram Clayton Ltd.

Mar 31, 2016

We have audited the accompanying standalone financial statements of Sundaram-Clayton Limited, Chennai ("the Company"), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, 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 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 judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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 auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances.

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;

a) of the state of affairs of the Company as at 31st March, 2016;

b) its Profit for the year ended on that date; and

c) its cash flows for the year ended on that date.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure - 1, a statement on the matters specified in the 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 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 written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164(2) of the Act.

f. With respect to the adequacy of internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure - 2".

g. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of 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 no. XXII (7) to the financial statements.

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

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

Annexure 1 referred to in our report under "Report on Other Legal and Regulatory requirements Para 1" of even date on the accounts for the year ended 31st March, 2016.

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

(b) Fixed assets are verified physically by the management in accordance with a regular programme at reasonable intervals. No material discrepancies were noticed on such verification.

(c) The title deeds of immovable properties of the Company are held in the name of the Company.

2. The inventory has been physically verified at reasonable intervals during the year by the management. It was represented that no material discrepancies were noticed.

Also it was represented to us that inventory with third parties is also verified from time to time.

3. During the year, the company has not granted any loan to a company, firm or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

4. During the year, the company has not granted any loan or has furnished any guarantees or provided any security. Hence reporting on whether there is compliance with provisions of Section 185 of the Companies Act, 2013 does not arise.

The Company has invested a sum of Rs. 5.26 crore during the year and the total investments made by the company is in compliance with the provisions of section 186 of the Companies Act, 2013.

5. The Company has not accepted any deposit within the meaning of Sections 73 to 76 of the Companies Act, 2013, during the year.

6. We have broadly reviewed the books of accounts maintained by the company under sub-section of (1) of Section 148 of the Companies Act, 2013, read with the rules made by the Central Government for maintenance of cost records and are of the opinion that prima-facie, the prescribed accounts and records have been made and maintained.

7. (a) According to the records provided to us, the company is generally 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 other statutory dues with the appropriate authorities. However, we have observed a few instances of delay in remittance of service tax, Value Added Tax, Employees'' State Insurance and income tax deduction into the Government.

(b) According to the information and explanations furnished to us, no undisputed amounts payable in respect of Income tax, Sales tax, Service tax, Duty of Customs, Duty of Excise, Value Added Tax and Cess were in arrear as at 31st March, 2016 for a period of more than six months from the date they became payable.

(c) According to information and explanations furnished to us, the following are the details of the disputed dues that were not deposited with the concerned authorities:

Name of the Nature of Amount Forum where the statute dues (Rs. in crores) dispute is pending

Central Excise Act, Excise Duty 0.06 The Honourable High 1944 Court of Judicature at Madras

1.59 Commissioner (Appeals), Chennai

Finance Act, 1994 Service Tax 3.21 Customs Excise & Service Tax Appellate Tribunal, Chennai

3.20 Commissioner of Central Excise, Chennai

0.13 Commissioner (Appeals), Chennai

1.01 Additional Commissioner of Central Excise, Chennai

0.09 Joint Commissioner of Central Excise, Chennai

0.04 Deputy Commissioner of Central Excise, Chennai

0.04 Assistant Commissioner of Central Excise, Chennai

Income Tax Act, 1961 Income Tax 7.62 Commissioner of Income Tax (Appeals), Chennai

Tamil Nadu Town and Fee payable to 0.83 The Honourable Country Planning CMDA / High Court of Act, 1971 Municipal Judicature at Madras Authorities

Tamil Nadu Value Value added tax 0.12 Appellate Deputy Added Tax Act, 2006 Commissioner, Chennai

8. Based on our verification and according to the information and explanations given by the management, the company has not defaulted in repayment of dues to its banks. The Company has not borrowed from any financial institution and Government nor has issued any debentures.

9. (a) The Company has not raised any money by way of initial public offer or further public offers (including debt instruments) during the year. Hence reporting on utilization of such money does not arise.

(b) The term loan availed by the company has been applied for the purpose for which it was availed.

10. Based on the audit procedures adopted and information and explanations given to us by the management, no fraud by the Company or on the Company has been noticed or reported during the course of our audit.

11. In our opinion and according to the information and explanations given to us, managerial remuneration has been paid and provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.

12. The Company is not a Nidhi company and as such this clause of the Order is not applicable.

13. (a) In our opinion and according to the information and explanations given to us, all transactions with the related parties are in compliance with Sections 177 and 188 of Companies Act, 2013.

(b) The details of transactions during the year have been disclosed in the Financial Statements as required by the applicable accounting standards. Refer note no. - XXII (11) and XXII(12) to Financial statements .

14. During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures under Section 42 of the Companies Act, 2013.

15. In our opinion and according to the information and explanations given to us, the company has not entered into any non-cash transactions with directors or persons connected with them.

16. The company is not required to register under Section 45-IA of the Reserve Bank of India Act, 1934.

For SUNDARAM & SRINIVASAN

Chartered Accountants

Firm Regn. No. 004207S



M. BALASUBRAMANIYAM

Chennai Partner

12th May 2016 Membership No. F7945


Mar 31, 2015

We have audited the accompanying standalone financial statements of Sundaram- Clayton Limited, Chennai - 600006 ("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 the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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' judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating 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 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 March 31, 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.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements: Note XXII - (1) (f) Accounting for depreciation:-

The Companies Act, 2013, stipulates systematic allocation of the depreciable amount of an asset over its useful life. The Act also prescribes that a maximum of 5% of the cost can be retained as residual value and the balance 95% to be amortised over the useful life of the asset.

However, the Company has chosen to reduce the residual value from the depreciation to be provided for in the terminal year, thereby claiming higher depreciation in the earlier years.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order"') issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure, a statement on the matters specified in paragraph 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 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 financial statements - Refer note no. XXII(8) to the financial statements;

ii. The Company did not have any long-term contracts including derivative contract for which there were any 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.

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

(b) Fixed assets are verified physically by the management in accordance with a regular programme at reasonable intervals. In our opinion the interval is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(ii) (a) The inventory has been physically verified at reasonable intervals during the year by the management. In our opinion, the frequency of such verification is adequate. The physical verification plan with regard to overseas inventory are planned to cover all the warehouses once in a cycle of three years. In the circumstances obtaining, the frequency is considered adequate.

In respect of inventory with third parties, which have not been physically verified, there is a process of obtaining confirmation from such parties.

(b) In our opinion and according to the information and explanations given to us, the procedures for 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 has maintained proper records of inventory. The discrepancies between the physical stocks and the book stocks were not material and have been properly dealt with in the books of account.

(iii) During the year, the company has not granted any loan to a company, firm or other parlies covered in the register maintained under Section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations 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. During the course of our audit, no continuing failure to correct major weakness in the internal control system has been noticed.

(v) The company has not accepted any deposits within the meaning of sections 73 to 76 of the Companies Act, 2013, during the year.

(vi) In our opinion and according to the information and explanations given to us, the requirement for maintenance of cost records pursuant to the Companies (Cost Records and Audit) Rules, 2014 specified by the Central Government of India under Section 148 of the Companies Act, 2013 are not applicable to the Company for the year under audit.

(vii) (a) According to the records provided 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 other statutory dues with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax and Cess were in arrears, as at 31st March 2015 for a period of more than six months from the date they became payable.

(c) According to information and explanations given to us, the following are the details of the disputed dues, that were not deposited with the concerned authorities:

Name of the Nature of Amount Forum where the statute dues (Rs. in crore) dispute is pending

Central Excise Act, Excise Duty 0.06 The Hon'ble High 1944 Court of Judicature at Madras

0.72 Additional Commissioner of Central Excise, Chennai

Finance Act, 1994 Service Tax 3.33 Central Excise and Service Tax Appellate Tribunal, Chennai

4.27 Commissioner (Appeals), Chennai

0.07 Additional Commissioner of Central Excise, Chennai

0.52 Joint Commissioner of Central Excise, Chennai

0.03 Deputy Commissioner of Central Excise, Chennai

0.24 Assistant Commissioner of Central Excise, Chennai

Income Tax Act, Income Tax 7.62 Commissioner of 1961 Income Tax (Appeals), Chennai

0.50 The Hon'ble High Court of Judicature at Madras

Tamilnadu Town Fee payable 0.84 The Hon'ble High and Country to CMDA / Court of Planning Act, 1971 Municipal Judicature at Authorities Madras

(d) During the year, the company has transferred the amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1of 1956) and Rules made thereunder within time.

(viii) The Company neither has accumulated losses as at the end of the financial year nor has incurred cash losses during the financial year and in the immediately preceding financial year.

(ix) Based on our verification and according to the information and explanations given by the management, the company has not defaulted in repayment of dues to its banks. The company has not issued debentures during the year.

(x) In our opinion, the terms and conditions of guarantees given by the Company for loans availed by others are not prejudicial to interest of the Company.

(xi) The company has not availed any fresh term loan during the year. The loans availed in earlier years were applied for the purpose for which they were availed.

(xii) Based on the audit procedures adopted and information and explanations given to us by the management, no fraud on or by the company has been noticed or reported during the course of our audit.

For SUNDARAM & SRINIVASAN Chartered Accountants Firm Regn. No. 004207S

M. BALASUBRAMANIYAM Chennai Partner 8th May 2015 Membership No. F7945


Mar 31, 2014

We have audited the accompanying financial statements of Sundaram-Clayton Limited, Chennai ("the Company"), which comprise the Balance Sheet as at 31st March 2014, the Statement of Profit and Loss and Cash Flow statement for the year ended on that date along with Notes on accounts.

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 and 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 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 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 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 31st March 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 the Cash Flow Statement, of the cash flows of the Company 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 Section 227(4A) of the Act, and on basis of such checks of books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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 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 Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act; and

e) on the basis of the written representations received from the directors as on 31st March 2014, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2014, from being appointed as a director in terms of Clause (g) of sub-section (1) of Section 274 of the Act. (i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets were physically verified by the management in accordance with a regular programme at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year are not substantial and therefore do not affect the going concern status of the Company.

(ii) (a) The inventory has been physically verified at reasonable intervals during the year by the management. In our opinion, the frequency of such verification is adequate. The physical verification plan with regard to overseas inventory are planned to cover all the warehouses once in a cycle of three years. In respect of inventory with third parties, which have not been physically verified, there is a process of obtaining confirmation from such parties.

For Sundaram & Srinivasan

Chartered Accountants

Firm Regn. No.: 004207S

M. BALASUBRAMANIYAM Place :Chennai Partner

Date :14th May 2014 Membership No.: F7945

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

(c) In our opinion, the Company has maintained proper records of inventory. The discrepancies between the physical stocks and the book stocks were not material and have been properly dealt with in the books of account.

(iii) (a) During the year the Company has not granted any loans or advances, to Companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) During the year the Company has not availed any loan from any party covered in the register maintained under Section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations 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. During the course of our audit, no minor or major continuing failure has been noticed in the internal control system.

(v) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the

management, we are of the opinion, that the contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956, have been properly entered in the said register.

(b) In our opinion and according to the information and explanations given to us, transactions entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value by rupees five lakhs during the year in respect of each party have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposit from the public during the year.

(vii) The Company has an internal audit system, which in our opinion is adequate commensurate with its size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government under Section 209(1)(d) of the Companies Act, 1956 for maintenance of cost records and are of the opinion that prima- facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) (a) According to the records provided to us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees'' State Insurance, Investor Education and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities. However, there have been a few delays in respect of service tax remittances. The die casting division at Belagondapalli, Hosur is not covered under Employees'' State Insurance Act, 1948.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess were in arrears as at 31st March 2014 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, the following are the details of the disputed dues that were not deposited with the authorities concerned.

Name of the Nature of Amount Forum where statute dues (Rs. in crores) dispute is pending

Income Tax Act, Income Tax (a) 4.38 Commissioner of 1961 Income Tax (Appeals), Chennai

(b) 0.50 The Hon''ble High Court of Judicature at Madras

Total 4.88

Central Excise Act, Excise duty 0.62 The Hon''ble High 1944 Court of Judicature at Madras

Finance Act, Service tax (a) 3.19 Central Excise and 1994 Service Tax Appellate Tribunal, Chennai

(b) 0.35 Commissioner (Appeals), Chennai

Total 3.54

Tamilnadu Town Fee payable 0.69 The Hon''ble High and Country to CMDA / Court of Judicature Planning Act, 1971 Municipal at Madras Authorities

(x) The Company neither has accumulated losses as at the end of the financial year nor has incurred cash losses during the financial year and in the immediately preceding financial year.

(xi) Based on our verification and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to its banks.

(xii) Based on our examination and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit/nidhi/mutual benefit fund/society and as such this clause of the Order is not applicable.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments other than in mutual fund investments. Proper records have been maintained in respect of these transactions and contracts and timely entries have been made therein. The investments are held by the Company in its own name and are held as long-term investments.

(xv) In our opinion, the terms and conditions of guarantees availed by the Company for loans availed by others are not prejudicial to the interest of the Company.

(xvi) The term loans availed by the Company were utilised for the purpose for which the loans were obtained.

(xvii) On the basis of our examination, the Company has not used funds raised on short-term basis for long term investments.

(xviii) During the year the Company has allotted 12,64,501 numbers of equity shares on preferential basis to Qualified Institutional Buyers as defined in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 for complying with the requirement of minimum public share holding of 25% of the paid-up capital. However, these parties are not covered under Section 301 of the Companies Act, 1956.

(xix) During the year the Company has not issued any secured debenture.

(xx) During the year the Company has not raised any money by public issue. However, the Company has issued 12,64,501 numbers of equity shares through Institutional Placement Programme as detailed in point no. (xviii) above.

(xxi) Based on the audit procedures adopted and information and explanations given to us by the management, no fraud on or by the company has been noticed or reported during the course of our audit.

For SUNDARAM & SRINIVASAN

Chartered Accountants

Firm Regn. No. 004207S

M. BALASUBRAMANIYAM Chennai Partner

14th May 2014 Membership No. F7945


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Sundaram Clayton Limited, Chennai - 600006 ("the Company"), which comprise the Balance Sheet as at 31st March 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date along with Notes on accounts.

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 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 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 31st March 2013;

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 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 sub-section (3C) of Section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors as on 31st March 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; and

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.

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

(b) Fixed assets are physically verified by the management at reasonable intervals. In our opinion, the interval is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) The assets disposed off during the year are not substantial and therefore do not affect the going concern status of the Company.

(ii) (a) The inventory has been physically verified at reasonable intervals during the year by the management. In our opinion, the frequency of such verification is adequate. The physical verification plan with regard to overseas inventory are planned to cover all the warehouses once in a cycle of three years. In respect of inventory with third parties, which have not been physically verified, there is a process of obtaining confirmation from such parties.

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

(c) In our opinion, the Company has maintained proper records of inventory. The discrepancies between the physical stocks and the book stocks were not material and have been properly dealt with in the books of account.

(iii) (a) During the year the Company has not granted loans and advances to Companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) During the year the Company has not taken loan from any party covered in the register maintained under Section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations 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. During the course of our audit, no minor or major continuing failure has been noticed in the internal control system.

(v) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion, that the contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956, have been properly entered in the said register.

(b) In our opinion and according to the information and explanations given to us, the transactions entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value by rupees five lakhs during the year in respect of each party have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposit from the public.

(vii) The Company has an Internal Audit System, which in our opinion, is commensurate with its size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government under Section 209 (1 )(d) of the Companies Act, 1956, for maintenance of cost records and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) According to the records provided to us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees'' State Insurance, Investors Education and Protection Fund, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty and Cess and other statutory dues with the appropriate authorities. However, there have been few delays in respect of Value Added tax, Customs duty and Income tax deducted at source. The die casting divisions at Belagondapalli, Hosur and Mahindra World City, Kancheepuram are not covered under the Employees'' State Insurance Act, 1948.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, and Cess were in arrears, as at 31st March 2013 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, the following are the details of the disputed dues that were not deposited with the authorities concerned.

Name of the Nature of Amount Forum where statute dues (Rs. in crore) dispute is pending

Income Tax Act, Income Tax (a) 1.88 Commissioner of 1961 Income Tax (Appeals), Chennai

0.50 The Hon''ble High Court of Judicature at Madras

Total 2.38

Central Excise Act, Excise duty (a) 0.06 The Hon''ble High 1944 Court of Judicature at Madras

9.74 Commissioner of Central Excise, Chennai

Total 9.80

Finance Act, 1994 Service tax (a) 0.59 Central Excise and Service Tax Appellate Tribunal, Chennai

0.46 Commissioner (Appeals),Chennai

0.88 Commissioner of Central Excise, Chennai

0.15 Additional Commissioner of Central Excise, Chennai

0.20 Joint Commissioner of Service tax, Chennai

1.84 Commissioner of Service tax, Chennai

0.05 Additional Commissioner of Service tax, Chennai

0.03 Assistant Commissioner of Service tax, Chennai

Total 4.20

Tamilnadu Town Fee payable 0.97 The Hon''ble High and Country to CMDA / Court of Judicature Planning Act, 1971 Municipal at Madras Authorities

(x) The Company neither has accumulated losses as at the end of the financial year nor has incurred cash losses during the financial year and in the immediately preceding financial year.

(xi) Based on our verification and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to its banks.

(xii) Based on our examination and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit / nidhi / mutual benefit fund / society and as such this clause of the Order is not applicable.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments other than in mutual fund investments. Proper records have been maintained in respect of these transactions and contracts and timely entries have been made therein. The investments are held by the Company in its own name and are held as long-term investments.

(xv) In our opinion, the terms and conditions of guarantees given by the Company for loans taken by others are not prejudicial to the interests of the Company.

(xvi) The term loans availed by the Company were utilised for the purpose for which the loans were obtained.

(xvii) On the basis of our examination, the Company has not used funds raised on short-term basis for long-term investments.

(xviii) During the year the Company has not allotted any shares on preferential basis to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) During the year, the Company has not issued any secured debenture.

(xx) During the year the Company has not raised any money by public issue.

(xxi) During the year the Company had come across a fraud perpetrated by one of its employees causing a loss of about Rs.0.51 crores. However, the Company has recovered the entire amount from the employee before the end of the accounting year.

For SUNDARAM & SRINIVASAN

Chartered Accountants

Firm Regn. No. 004207S

M. BALASUBRAMANIYAM

Chennai Partner

8th May 2013 Membership No. F7945


Mar 31, 2012

We have audited the attached balance sheet of Sundaram-Clayton Limited, Chennai - 600 006 as at 31st March 2012 and the statement of profit and loss for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date. 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.

1. We have conducted our audit in accordance with auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from any 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditor's Report) Order, 2003 and amended by the Companies (Auditor's report) (Amendment) Order, 2004 issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3. Further to our comments in the Annexure referred to above, we state that-

(i) 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.

(ii) in our opinion, proper books of account, as required by law, have been kept by the Company so far as appears from our examination of such books.

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

(iv) in our opinion, the balance sheet, statement of profit and loss and the cash flow statement dealt with by this report comply with the Accounting Standards, referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

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

(vi) in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the 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.

a. in so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March 2012;

b. in so far as it relates to the Statement of Profit and Loss of the profit of the Company for the year ended on that date; and

c. in so far as it relates to the Cash Flow Statement, of the cash flows for the year ended on that date.

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

(b) Fixed assets are physically verified by the management at reasonable intervals as per the Company's policy. In terms of this policy, the Company has carried out the verification last during the year 2010-2011. The next verification of assets is planned to be undertaken shortly. In our opinion, the interval is reasonable having regard to the size of the Company and the nature of its assets.

(c) The assets disposed off during the year are not substantial and therefore do not affect the going concern status of the Company. Further the investments transferred on demerger also do not affect the going concern status of the Company.

(ii) (a) The inventory other than overseas inventory has been physically verified at reasonable intervals during the year by the management. In our opinion, the frequency of such verification is adequate. In respect of inventory with third parties, which have not been physically verified, there is a process of obtaining confirmation from such parties.

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

(c) In our opinion, the Company has maintained proper records of inventory. The discrepancies between the physical stocks and the books were not material and have been properly dealt with in the books of account.

(iii) (a) During the year the Company has granted loan of Rs.1485 lakhs to one of its subsidiaries covered in the register maintained under section 301 of the Companies Act, 1956 (through its erstwhile wholly owned subsidiary company viz. Anusha Investments Limited, Chennai). Balance due as at the year end is Rs.1485 lakhs along with interest accrued thereon amounting to Rs.1.92 lakhs.

(b) In our opinion, the rate of interest and other terms and conditions on which such loans and advances are made are not prima facie prejudicial to the interest of the Company.

(c) The loan amount of Rs.1485 lakhs along with the interest thereon was recovered by the Company on 3rd April, 2012.

(d) As on the date of Balance Sheet, there was no overdue amount recoverable on the said loans and advances.

(e) During the year, the Company has not availed any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations 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. During the course of our audit, no minor or major continuing failure has been noticed in the internal control system.

(v) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been properly entered in the said register.

(b) In our opinion and according to the information and explanations given to us, the transactions entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value by rupees five lakhs in respect of each party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposit from the public.

(vii) The Company has an Internal Audit System which, in our opinion, is commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government under Section 209 (1)(d) of the Companies Act, 1956 for maintenance of cost records and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) According to the records provided to us, the Company is regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Investors Education and Protection Fund, Income tax, Sales tax, Wealth tax, Customs duty, Excise duty, Service tax and Cess and other statutory dues with the appropriate authorities. However, delays have been noticed in respect of payments of service tax (three instances) and tax deducted at source (one instance). The die casting divisions at Belagondapalli near Hosur and Mahindra World City, Kancheepuram are not covered under the Employees' State Insurance Act, 1948.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty, Service tax and Cess were in arrears, as at 31st March 2012 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, the following are the details of the disputed dues, that were not deposited with the authorities concerned.

Name of the Nature of Amount Forum where statute dues (Rs. in lakhs) dispute is pending

Income Tax Act, Income Tax (a) 50.30 The Hon'ble High 1961 Court of Judicature at Madras

(b) 7.18 Commissioner of Income Tax (Appeals), Chennai Total 57.48

Wealth Tax Act, Wealth tax 14.61 Commissioner of 1957 Income tax (Appeals), Chennai

Central Excise Act, Interest on 1944 Excise duty (a) 5.97 The Hon'ble High Court of Judicature at Madras

Excise duty (b) 831.96 Commissioner of Central Excise, Chennai

Total 837.93

Finance Act, 1994 Service tax (a) 52.54 Central Excise and Service Tax Appellate Tribunal, Chennai

(b) 45.50 Commissioner (Appeals),Chennai

(c) 144.20 Commissioner of Service tax, Chennai

(d) 66.57 Additional Commissioner of Service tax, Chennai

(e) 19.61 Joint Commissioner of Service tax, Chennai

(f) 3.13 Asst. Commissioner of Service tax, Chennai

(g) 155.83 Commissioner of Central Excise, Chennai

Total 487.38

Tamilnadu Town Fee payable 69.42 The Hon'ble High and Country to CMDA / Court of Judicature Planning Act, 1971 Municipal at Madras Authorities

(x) The Company neither has accumulated losses as at the end of the financial year nor has incurred cash losses during the financial year and in the immediately preceding year.

(xi) Based on our verification and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to its banks.

(xii) Based on our examination and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit / nidhi / mutual benefit fund / society and as such this clause of the Order is not applicable.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments other than in mutual fund investments. Proper records have been maintained in respect of these transactions and contracts and timely entries have been made therein. The investments are held by the Company in its own name, other than those acquired on amalgamation, which are pending transfer in Company's name.

(xv) In our opinion, the terms and conditions of guarantees granted by the Company for loans taken by others are not prejudicial to the interests of the Company.

(xvi) The term loans availed by the Company were applied for the purpose for which the loans were obtained.

(xvii) On the basis of our examination, the Company has not used funds raised on short term basis for long term investments.

(xviii) During the year the Company has not allotted any shares on preferential basis to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) During the year, the Company has not issued any secured debentures.

(xx) During the year the Company has not raised any money through public issue.

(xxi) The Company has received an intimation from a Chennai based Bank that a person has drawn fraudulently Rs.190 lakhs from the Bank under bill discounting facilities towards forged invoices for canteen supplies to the Company. The fact that the Company has no relation with the said person and it has no connection with the invoices raised has been intimated to the Bank by the Company. Hence the Company is not liable to pay the said amount of Rs.190 lakhs. Accordingly, this has been included under 'Liabilities contested and not provided for.'

For SUNDARAM & SRINIVASAN

Chartered Accountants

Firm Regn. No. 004207S

M. BALASUBRAMANIYAM

Chennai Partner

28th August 2012 Membership No. F7945


Mar 31, 2010

We have audited the attached balance sheet of M/s.Sundaram-Clayton Limited, Chennai 600 006 as at 31st March 2010 and the profit and loss account for the year ended on that date annexed thereto and the cash flow statement for the year ended on that date. 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.

1. We have conducted our audit in accordance with auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from any 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors Report) Order, 2003 and amended by the Companies (Auditors report) (Amendment) Order, 2004 issued by the Central Government in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3. Further to our comments in the annexure referred to above, we state that-

(i) 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;

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

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

(iv) in our opinion, the balance sheet, profit and loss account and the cash flow statement dealt with by this report comply with the accounting standards, referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(v) on the basis of written representations received from the directors, as on 31st March 2010 and taken on record by the board of directors, we report that none of the directors is disqualified from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956 on the said date;

(vi) in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the 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;

a. in so far as it relates to the balance sheet, of the state of affairs of the Company as at 31st March 2010;

b. in so far as it relates to the profit and loss account, of the profit of the Company for the year ended on that date; and

c. in so far as it relates to the cash flow statement, of the cash flows for the year ended on that date.



Annexure referred to in our report of even date of the accounts for the year ended 31st March 2010



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

(b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification at reasonable intervals, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year there was no transfer of assets affecting the going concern status.

(ii) (a) The inventory, other than in-transit has been physically verified at reasonable intervals during the year by the management. In our opinion, the frequency of such verification is adequate. In respect of inventory with third parties, which have not been physically verified, there is a process of obtaining confirmation from such parties.

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

(c) In our opinion, the Company has maintained proper records of inventory. The discrepancies between the physical stocks and the books were not material and have been properly dealt with in the books of account.

(iii) (a) During the year, the Company has granted unsecured loans to one of its subsidiaries amounting to Rs. 250 lakhs. (Balance due as at the year end is NIL.)

(b) During the year, the Company has availed a sum of Rs.5000 lakhs as unsecured loan from one of its subsidiaries. Apart from this the Company has not taken any loans, secured or unsecured, from companies, firms or parties covered in the register maintained under section 301 of the Companies Act, 1956.

(c) In our opinion, the rate of interest and other terms and conditions on which loans and advances are made are not prima facie prejudicial to the interest of the Company as regards items (a) and (b) above;

(d) The Company is regular in repaying and recovering the principal amount as stipulated and is also regular in payment and receipt of interest.

(e) There are no overdue sums recoverable from subsidiaries or companies listed under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations 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. During the course of our audit, no major weakness has been noticed in the internal control system.

(v) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the contracts or arrangement that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been properly entered in the said register.

(b) In our opinion and according to the information and explanations given to us, the transactions entered in the register maintained under Section 301 and exceeding the value of rupees five lakhs in respect of each party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposit from the public.

(vii) The Company has an internal audit system which, in our opinion, is commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government under Section 209 (1 )(d) of the Companies Act, 1956 for maintenance of cost records and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) According to the records provided to us, the Company is regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Investors Education and Protection Fund, Income tax, Sales tax, Wealth tax, Customs duty, Excise duty, Service tax and Cess and other statutory dues with the appropriate authorities. However, certain marginally delayed remittances were noticed in respect of some payments dealt with herein. The die casting division at Belagondapalli near Hosur and Mahindra World City, Kancheepuram are not covered under the Employees State Insurance Act, 1948.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty, Service tax and Cess were in arrears, as at 31st March 2010 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, the following are the details of the disputed dues, that were not deposited with the concerned authorities:

Nameofthe Nature of Amount Forum where

statute dues (Rs. in lakhs) dispute is pending

Tamilnadu Town Fee payable to 57.75 The Honble High and Country CMDA Court of Judicature Planning Act, 1971 at Madras

Central Excise Act, Interest on 5.97 Central Excise and

1944 excise duty Service Tax Appellate Tribunal, Chennai

Wealth Tax Act, Wealth tax 14.61 Commissioner of

1957 Income tax (Appeals), Chennai

Finance Act, Service tax 172.30 Central Excise and

1994 Service Tax Appellate Tribunal, Chennai

(x) The Company neither has accumulated losses as at the end of the financial year nor has incurred cash losses during the financial year and in the immediately preceding year.

(xi) Based on our verification and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to its banks.

(xii) Based on our examination and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit / nidhi / mutual benefit fund / society and as such this clause of the Order is not applicable.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments other than in mutual fund investments. Proper records have been maintained in respect of these transactions and contracts and timely entries have been

made therein. The investments have been held by the Company in its own name except to the extent of exemption granted under section 49 of the Companies Act, 1956 in respect of shares held in subsidiary companies through the nominees.

(xv) In our opinion, the terms and conditions of guarantees given by the Company for loans taken by others are not prejudicial to the interests of the Company.

(xvi) The term loans availed by the Company were utilized for the purpose for which the loan was obtained.

(xvii) On the basis of our examination, the Company has not used funds raised on short term basis for long term investment.

(xviii) During the year the Company has not allotted any shares on preferential basis to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. However the Company has issued 1,89,67,584 number of equity shares as Bonus shares.

(xix) During the year, the Company has not issued any secured debentures.

(xx) During the year the Company has not raised any money by public issue.

(xxi) Based on the audit procedures adopted and information and explanations given to us by the management, no fraud on or by the Company has been noticed or reported during the course of our audit.

For SUNDARAM & SRINIVASAN

Chartered Accountants

Firm Regn. No. 004207S



M. BALASUBRAMANIYAM

Chennai Partner

13th August 2010 Membership No. F7945

 
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