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Auditor Report of Swaraj Engines Ltd.

Mar 31, 2016

We have audited the accompanying financial statements of Swaraj Engines Limited ("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 the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Management and Board of Directors of the Company is responsible for the matters stated in Section 134(5) of the Companies Act 2013 ("The Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities, selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

Auditor''s Responsibility

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

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

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

We believe that the audit evidences we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

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:

i. in the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2016;

ii. in case of Statement of Profit and Loss of the profit for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

In accordance with the Companies (Auditor''s Report) Order, 2016 (''The Order''), as amended, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, and on the basis such checks of books and records of the Company, we considered appropriate and according to information and explanations given to us, we give in Annexure a statement on the matters specified in paragraph 3 and 4 of the Order.

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

i. 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;

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

iii. The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this report are in agreement with the books of account;

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

v. On the basis of written representations received from the Directors, as on 31st March, 2016 and 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.

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

vii. 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:

a) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer note 2.23 to the financial statements;

b) The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;

c) There was no delay in transferring amounts required to be transferred, to the Investor Education and Protection Fund by the Company during the year.

The annexure referred to in our report to the members of Swaraj Engines Limited (''the company'') for the year ended 31st March, 2016. We report that

(i) Regarding Fixed Assets:

a. The Company has maintained proper records to show full particulars, including quantitative details and situation of Fixed Assets;

b. During the year verification of the Fixed Assets was carried out. To the best of our knowledge no material discrepancies have been noticed on verification.

c. The title deeds of immovable properties are held in the name of the company. (ii) Regarding Inventory:

a. The stocks of finished goods, stores, spare parts and raw materials of the Company in its possession have been physically verified by the management at reasonable period. Stock-in-transit as on 31st March, 2016 has been verified by the management on subsequent receipt of the goods.

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

c. The Company is maintaining proper records for inventory and discrepancies between the physical stocks and the book stocks, which have been properly dealt with in the books of account, were not material.

(iii) Company has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties listed in the register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of sections 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees and security.

(v) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.

(vi) On the basis of information given to us, we are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government of India, under sub-section (1) of section 148 of the Companies Act, 2013, have been maintained. However, we are not required to and have not carried out any detailed examination of such accounts and records.

(vii) Regarding Statutory Dues:

a) The Company has been regular during the year in depositing undisputed dues with Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Excise & Custom duty and other statutory dues with the appropriate authorities. According to the information given to us, there were no undisputed unpaid statutory dues outstanding as at 31st March, 2016 for a period of more than six months from the date they became payable.

b) Details of dues of Income-tax & Excise Duty which have not been deposited as on 31st March, 2016 on account of disputes are given below :

(Rs. in lacs)

Statute Nature Forum where dispute is pending Amount involved

Central Excise Excise Duty Appellate Authority - Tribunal Level 39.72 Act, 1944

Income Tax Act, 1961 Income Tax High Court 6.92

Appellate Authority 108.55 – Tribunal Level

Assessing Officer 35.11

(viii) In our opinion and on the basis of records produced before us, the Company has not defaulted in the repayment of dues to banks, financial institutions, Government or debenture holders.

(ix) The Company has not raised moneys by way of initial public offer or further public offer including debt instruments and term Loans. Hence, the provisions of clause 3 (ix) of the Order are not applicable to the Company and not commented upon.

(x) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(xi) Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act;

(xii) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 3 (xii) of the Order are not applicable to the Company.

(xiii) In our opinion, all transactions with the related parties are in compliance with Sections 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Hence, the provisions of clause 3 (xiv) of the Order are not applicable to the Company and not commented upon.

(xv) Based upon the audit procedures performed and the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.

(xvi) In our opinion, the Company is not required to be registered under Section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon.

For DAVINDER S. JAAJ & CO.

Chartered Accountants

(FRN – 000969N)



SUMEET SINGH DHIR

Place : Mumbai Partner

Date : 26th April, 2016 Membership No. 094370


Mar 31, 2015

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

Management''s Responsibility for the Financial Statements

The Management and Board of Directors of the Company are responsible for the matters stated in Section 134(5) of the Companies Act 2013 ("The Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014. This responsibility 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 misstatements, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Management and Board of Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidences we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

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:

i. in the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2015;

ii. in case of Statement of Profit and Loss of the profit for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

In accordance with 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 Companies Act, 2013, and on the basis such checks of books and records of the Company, we considered appropriate and according to information and explanations given to us, we give in Annexure a statement on the matters specified in paragraph 3 and 4 of the Order.

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

i. 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;

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

iii. The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this report are in agreement with the books of account;

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

v. On the basis of written representations received from the Directors, as on 31st March, 2015 and 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.

vi. 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:

a) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer note 2.24 to the financial statements;

b) The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;

c) There was no delay in transferring amounts required to be transferred, to the Investor Education and Protection Fund by the Company during the year.

The annexure referred to in our report to the members of Swaraj Engines Limited (''the Company'') for the year ended 31st March 2015. We report that :

(i) Regarding Fixed Assets:

a. The Company has maintained proper records to show full particulars, including quantitative details and situation of Fixed Assets;

b. The Fixed Assets have not been verified by management during the year but the company has a system of periodic verification of Fixed Assets. In our opinion, the frequency of verification is at reasonable intervals considering the size of the company.

(ii) Regarding Inventory:

a. The stocks of finished goods, stores, spare parts and raw materials of the Company in its possession have been physically verified by the management at reasonable period. Stock-in-transit as on 31st March 2015 has been verified by the management on subsequent receipt of the goods.

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

c. The Company is maintaining proper records for inventory and discrepancies between the physical stocks and the book stocks, which have been properly dealt with in the books of account, were not material.

(iii) Company has not granted any loan, secured or unsecured to companies, firms or other parties listed in the register maintained under Section 189 of the Act.

(iv) In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and nature of business, for purchase of raw materials including components, store consumables, plant and machinery, equipment and similar assets and for the sale of goods and services. During the course of audit, we have not observed any major weaknesses in internal controls.

(v) The Company has not accepted any deposits from the public, therefore the clause (v) of para 3 of the order is not applicable.

(vi) On the basis of information given to us, we are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government of India, under sub section (1) of section 148 of the Companies Act, have been maintained. However, we are not required to and have not carried out any detailed examination of such accounts and records.

(vii) Regarding Statutory Dues:

a) The Company has been regular during the year in depositing undisputed dues with Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Excise & Custom duty and other statutory dues with the appropriate authorities. According to the information given to us, there were no undisputed unpaid statutory dues outstanding as at 31st March 2015 for a period of more than six months from the date they became payable.

b) Details of dues of Income-tax & Excise Duty which have not been deposited as on 31st March, 2015 on account of disputes are given below :

(Rs. in lacs) Statute Nature Forum where dispute is pending Amount involved

Central Excise Excise Duty Appellate Authority - Tribunal Level 39.72 Act, 1944

Income Tax Act Income Tax Supreme Court 13.35 1961

High Court 29.95

Appellate Authority 111.70

- Tribunal Level

Assessing Officer 35.11

c) There was no delay in transferring amounts required to be transferred, to the Investor Education and Protection Fund by the Company during the year.

(viii) The Company neither has accumulated losses at the end of the financial year nor any cash losses for this financial year as well as for financial year immediately preceding financial year.

(ix) In our opinion and on the basis of records produced before us, the Company has not defaulted in the repayment of dues to banks, financial institutions or debenture holders.

(x) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xi) The Company has not taken any term loan. Hence the comments under the clause are not required.

(xii) To the best of our knowledge, no fraud was noticed or reported on or by the Company.

For DAVINDER S. JAAJ & CO. Chartered Accountants (FRN - 000969N)

SUMEET SINGH DHIR Place : Mumbai Partner Date : 27th April, 2015 Membership No. 094370


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Swaraj Engines Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2013, the Statement of Profit and Loss of the Company for the year ended, the Cash Flow Statement of the Company for the year ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub- section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. 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:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2013;

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 year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of Section 227 (4A) of the Act, we give in Annexure a statement on the matters specified in paragraph 4 & 5 of the Order.

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

i. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 these books;

iii. the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement are in agreement with the books of account;

iv. in our opinion the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement have been prepared in compliance with the applicable accounting standards referred to in Section 211 (3C) of the Act.

v. On the basis of written representations received from the Directors, as on 31st March, 2013 and taken on record by the Board of Directors, we report that 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.

ANNEXURE TO THE AUDITORS'' REPORT

The annexure referred to in our report to the members of Swaraj Engines Limited (''the company'') for the year ended 31st March, 2013. We report that:

(i) Regarding Fixed Assets:

a. The Company has maintained proper records to show full particulars, including quantitative details and situation of Fixed Assets.

b. The Fixed Assets have not been verified by management during the year but the Company has a system of periodic verification of Fixed Assets. In our opinion, the frequency of verification is at reasonable intervals considering the size of the Company.

c. No substantial part of the Fixed Assets was disposed off during the year, and therefore, do not affect the going concern assumption.

(ii) Regarding Inventory:

a. The stocks of finished goods, stores, spare parts and raw materials of the Company in its possession have been physically verified by the management at reasonable period. Stock-in-transit as on 31st March, 2013 has been verified by the management on subsequent receipt of the goods.

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

c. The Company is maintaining proper records for inventory and discrepancies between the physical stocks and the book stocks, which have been properly dealt with in the books of account, were not material.

(iii) Company neither taken nor granted any loan, secured or unsecured to / from companies, firms or other parties listed in the register maintained under Section 301 of the Act.

(iv) In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and nature of business, for purchase and sale of stores, raw materials including components, plant and machinery, equipment and similar assets.

(v) On the basis of documents produced before us, the company has not entered into any transaction which is required to be recorded in register mentioned under section 301 of the Act.

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

(vii) In our opinion, the Company''s present internal audit system is commensurate with its size and nature of business.

(viii) On the basis of the records produced, we are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government of India, under Section 209 (1) (d) of the Act, have been maintained. However, we are not required to and have not carried out any detailed examination of such accounts and records.

(ix) Regarding Statutory Dues:

a) The Company has been regular during the year in depositing undisputed dues with Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Excise & Custom duty and other statutory dues with the appropriate authorities.

b) According to the information given to us, there were no undisputed unpaid dues with Sales Tax, Income Tax, Wealth Tax, Excise & Custom Duty were outstanding as at 31st March 2013 for a period of more than six months from the date they became payable.

(x) The Company neither has accumulated losses at the end of the financial year nor any cash losses for this financial year as well as for financial year immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks, financial institutions or debenture holders.

(xii) To the best of our knowledge and information provided to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debenture and other securities.

(xiii) The Company is not a Chit fund, Nidhi or Mutual benefit society. Hence the requirements of item (xiii) of paragraph 4 of the order are not applicable to the company.

(xiv) Company has no transactions regarding contracts in shares, securities, debentures or other investments.

(xv) On the basis of records produced before us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) The Company has not obtained any term loans. Hence the comments under the clause are not required.

(xvii) According to the Cash Flow Statement and other records examined by us and explanations given to us, funds raised on short term basis have, prima facie, have not been used for long term investment and vice versa.

(xviii)On the basis of information provided to us, the Company has not made any preferential allotment during the year.

(xix) The Company has not issued any secured debentures. Hence the requirement of the clause (xix) of paragraph 4 of the Order is not applicable to the Company.

(xx) No money was raised by the Company through Public Issue during the year.

(xxi) To the best of our knowledge, no fraud was noticed or reported on or by the Company.

For DAVINDER S. JAAJ & CO.

Chartered Accountants (FRN – 000969N)

SUMEET SINGH DHIR Place : Mumbai Partner

Date : 22nd April, 2013 Membership No. 094370


Mar 31, 2012

We have audited the attached Balance Sheet of Swaraj Engines Limited as at March 31, 2012, the annexed Statement of Profit and Loss and the Cash Flow Statement for the Year Ended on that date, which are in agreement with the books of account. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

a. in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012;

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.

2. 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.

3. In our opinion, proper books of account have been kept by the Company as required by law so far as appears from our examination of these books and the aforementioned Balance Sheet, Statement of Profit and Loss and Cash Flow Statement are in agreement therewith.

4. In our opinion these accounts have been prepared in compliance with the applicable accounting standards referred to in Section 211 (3C) of the Act.

5. On the basis of 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.

As required by the Companies Auditors' Report Order, 2003 issued by the Central Government of India in terms of Section 227 (4A) of the Act and on basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that:

(i) Regarding Fixed Assets:

a. The Company has maintained proper records to show full particulars, including quantitative details and situation of Fixed Assets.

b. During the year verification of the Fixed Assets was carried out. To the best of our knowledge no material discrepancies have been noticed on verification.

c. Moreover, no substantial part of the Fixed Assets was disposed off during the year.

(ii) Regarding Inventory Controls:

a. The stocks of finished goods, stores, spare parts and raw materials of the Company in its possession have been physically verified by the management at reasonable period. Stock-in-transit as on 31st March, 2012 has been verified by the management on subsequent receipt of the goods.

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

c. The company is maintaining proper records for inventory and discrepancies between the physical stocks and the book stocks, which have been properly dealt with in the books of account, were not material.

(iii) Company neither took nor granted any loan, secured or unsecured to / from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(iv) In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and nature of business, for purchase and sale of stores, raw materials including components, plant and machinery, equipment and similar assets.

(v) On the basis of documents produced before us, the company has not entered in any transactions required to be recorded in register mentioned under Section 301 of the Act.

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

(vii) In our opinion, the Company's present internal audit system is commensurate with its size and nature of business.

(viii) On the basis of the records produced, we are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government of India, under Section 209 (1) (d) of the Act, have been maintained. However, we are not required to and have not carried out any detailed examination of such accounts and records.

(ix) Regarding Statutory Dues:

a) The Company has been regular during the year in depositing undisputed dues with Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Excise & Custom Duty and other statutory dues with the appropriate authorities.

b) According to the information given to us, there were no undisputed unpaid dues with Sales Tax, Income Tax, Wealth Tax, Excise and Custom Duty were outstanding as at 31st March, 2012 for a period of more than six months from the date they became payable.

c) Details of dues of Income Tax and Excise Duty which have not been deposited as on 31st March, 2012 on account of disputes are given below:

(Rs. in lacs) Statute Nature Forum where dispute Amount Amount Pre Amount in is pending Involved Deposited Arrear

Excise Duty Law Excise Duty Tribunal Level 122.57 81.87 40.70

Excise Duty Appeals 3.85 - 3.85

Income Tax Law Income Tax Supreme Court 13.35 - 13.35

Income Tax High Court 59.58 - 59.58

Income Tax Tribunal Level 106.90 - 106.90

Income Tax Assessing Officer 35.11 - 35.11

(x) The company neither has accumulated losses at the end of the financial year nor any cash losses for this financial year as well as for financial year immediately preceding financial year.

(xi) In our opinion and according to the information and explanation given to us, the Company has not defaulted in repayment of dues to banks, financial institutions.

(xii) To the best of our knowledge and information provided to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debenture and other securities.

(xiii) The Company is not a Chit fund, Nidhi or Mutual benefit society. Hence the requirements of item (xiii) of paragraph 4 of the order are not applicable to the company.

(xiv) Company has no transactions regarding contracts in shares, securities, debentures or other investments.

(xv) On the basis of records produced before us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) The Company has not taken any long-term loans.

(xvii) According to the Cash Flow Statement and other records examined by us and explanations given to us, funds raised on short term basis have, prima facie, not been used for long term investment and vice versa.

(xviii) On the basis of information provided to us, the company has not made any preferential allotment during the year.

(xix) The Company has not issued any secured debentures. Hence the requirement of the clause (xix) of paragraph 4 of the Order is not applicable to the company.

(xx) No money was raised by the company through Public Issue during the year.

(xxi) To the best of our knowledge, no fraud was noticed or reported on or by the company.

For DAVINDER S. JAAJ & CO.

Chartered Accountants

(Registration No. 000969N)

SUMEET SINGH DHIR

Place : Mumbai Partner

Date : 25th April, 2012 Membership No. 094370


Mar 31, 2011

We have examined the attached Balance Sheet of Swaraj Engines Limited as at March 31,2011, the annexed Profit and Loss Account and the Cash Flow Statement for the Year Ended on that date, which are in agreement with the books of account. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

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

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

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

2. 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.

3. In our opinion, proper books of account have been kept by the Company as required by law so far as appears from our examination of these books and the aforementioned Balance Sheet, Profit and Loss Account and Cash Flow Statement are in agreement therewith.

4. In our opinion these accounts have been prepared in compliance with the applicable accounting standards referred to in Section 211 (3C) of the Act.

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

As required by the Companies Auditors Report Order, 2003 issued by the Central Government of India in terms of Section 227 (4A) of the Act and on basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that:

(i) Regarding Fixed Assets:

a. The Company has maintained proper records to show full particulars, including quantitative details and situation of Fixed Assets.

b. During the year verification of the Fixed Assets was carried out. To the best of our knowledge no material discrepancies have been noticed on verification.

c. Moreover, no substantial part of the Fixed Assets was disposed off during the year. (ii) Regarding Inventory Controls:

a. The stocks of finished goods, stores, spare parts and raw materials of the Company in its possession have been physically verified by the management at reasonable period. Stock-in-transit as on 31st March, 2011 has been verified by the management on subsequent receipt of the goods.

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

c. The company is maintaining proper records for inventory and discrepancies between the physical stocks and the book stocks, which have been properly dealt with in the books of account, were not material.

(iii) Company neither took nor granted any loan, secured or unsecured to / from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(iv) In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and nature of business, for purchase and sale of stores, raw materials including components, plant and machinery, equipment and similar assets.

(v) On the basis of documents produced before us, the company has not entered in any transactions required to be recorded in register mentioned under Section 301 of the Act.

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

(vii) In our opinion, the Companys present internal audit system is commensurate with its size and nature of business.

(viii) On the basis of the records produced, we are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government of India, under Section 209 (1) (d) of the Act, have been maintained. However, we are not required to and have not carried out any detailed examination of such accounts and records.

(ix) Regarding Statutory Dues:

a) The Company has been regular during the year in depositing undisputed dues with Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Excise duty and other statutory dues with the appropriate authorities.

b) According to the information given to us, there were no disputed unpaid dues with sales tax, income tax, custom tax, wealth tax. However in case of excise duty / cess there is a disputed unpaid amount of Rs. 140.83 Lacs pending before Appellate Authorities and in case of Income Tax there is disputed unpaid amount of Rs. 214.94 lacs against which Income Tax Department has filed an appeal before Income Tax Appellate Tribunal.

(x) The company neither has accumulated losses at the end of the financial year nor any cash losses for this financial year as well as for financial year immediately preceding financial year.

(xi) No, the company has not defaulted in repayment of dues to any financial institution or banks.

(xii) To the best of our knowledge and information provided to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debenture and other securities.

(xiii) The Company is not a Chit fund, Nidhi or Mutual benefit society. Hence the requirements of item (xiii) of paragraph 4 of the order are not applicable to the company.

(xiv) Company has no transactions regarding contracts in shares, securities, debentures or other investments.

(xv) On the basis of records produced before us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) The Company has not taken any long-term loans.

(xvii) According to the Cash Flow Statement and other records examined by us and explanations given to us, funds raised on short term basis have, prima facie, not been used for long term investment and vice versa.

(xviii)On the basis of information provided to us, the company has not made any preferential allotment during the year.

(xix) The Company has not issued any secured debentures. Hence the requirement of the clause (xix) of paragraph 4 of the Order is not applicable to the company.

(xx) No money was raised by the company through Public Issue during the year.

(xxi) To the best of our knowledge, no fraud was noticed or reported on or by the company.

For DAVINDER S. JAAJ & CO.

Chartered Accountants

(Registration No.000969N)

DAVINDER SINGH JAAJ

Partner

Membership No. 012521

Place: Chandigarh

Date : 27th April, 2011


Mar 31, 2010

We have examined the attached Balance Sheet of Swaraj Engines Limited as at March 31,2010, the annexed Profit and Loss Account and the Cash Flow Statement for the Year Ended on that date, which are in agreement with the books of account. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

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

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

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

2. 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.

3. In our opinion, proper books of account have been kept by the Company as required by law so far as appears from our examination of these books and the aforementioned Balance Sheet, Profit and Loss Account and Cash Flow Statement are in agreement therewith.

4. In our opinion these accounts have been prepared in compliance with the applicable accounting standards referred to in Section 211 (3C) of the Act.

5. On the basis of written representations received from the Directors, as on 31 st March, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 st 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.

As required by the Companies Auditors Report Order, 2003 issued by the Central Government of India in terms of Section 227 (4A) of the Act and on basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that:

(i) Regarding Fixed Assets:

a. The Company has maintained proper records to show full particulars, including quantitative details and situation of Fixed Assets.

b. During the year verification of the Fixed Assets was carried out. To the best of our knowledge no material discrepancies have been noticed on verification.

c. Moreover, no substantial part of the Fixed Assets was disposed off during the year. (ii) Regarding Inventory Controls:

a. The stocks of finished goods, stores, spare parts and raw materials of the Company in its possession have been physically verified by the management at reasonable period. Stock-in-transit as on 31 st March, 2010 has been verified by the management on subsequent receipt of the goods.

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

c. The company is maintaining proper records for inventory and discrepancies between the physical stocks and the book stocks, which have been properly dealt with in the books of account, were not material.

(iii) Company neither took nor granted any loan, secured or unsecured to / from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(iv) In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and nature of business, for purchase and sale of stores, raw materials including components, plant and machinery, equipment and similar assets.

(v) On the basis of documents produced before us, the company has not entered in any transactions required to be recorded in register mentioned under Section 301 of the Act.

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

(vii) In our opinion, the Companys present internal audit system is commensurate with its size and nature of business.

(viii) On the basis of the records produced, we are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government of India, under Section 209 (1) (d) of the Act, have been maintained. However, we are not required to and have not carried out any detailed examination of such accounts and records.

(ix) Regarding Statutory Dues:

a) The Company has been regular during the year in depositing undisputed dues with Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Excise duty and other statutory dues with the appropriate authorities.

b) According to the information given to us, there were no disputed unpaid dues with sales tax, income tax, custom tax, wealth tax. However in case of excise duty / cess there is a disputed unpaid amount of Rs. 116.60 Lacs pending before Commissioner (Appeals) and in case of Income Tax there is disputed unpaid amount of Rs. 214.94 lacs against which Income Tax Department has filed an appeal before Income Tax Appellate Tribunal.

(x) The company neither has accumulated losses at the end of the financial year nor any cash losses for this financial year as well as for financial year immediately preceding financial year.

(xi) No, the company has not defaulted in repayment of dues to any financial institution or banks.

(xii) To the best of our knowledge and information provided to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debenture and other securities.

(xiii) The Company is not a Chit fund, Nidhi or Mutual benefit society. Hence the requirements of item (xiii) of paragraph 4 of the order are not applicable to the company.

(xiv) Company has no transactions regarding contracts in shares, securities, debentures or other investments.

(xv) On the basis of records produced before us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) The Company has not taken any long-term loans.

(xvii) According to the Cash Flow Statement and other records examined by us and explanations given to us, funds raised on short term basis have, prima facie, not been used for long term investment and vice versa.

(xviii)On the basis of information provided to us, the company has not made any preferential allotment during the year.

(xix) The Company has not issued any secured debentures. Hence the requirement of the clause (xix) of paragraph 4 of the Order is not applicable to the company.

(xx) No money was raised by the company through Public Issue during the year.

(xxi) To the best of our knowledge, no fraud was noticed or reported on or by the company.

For DAVINDER S. JAAJ & CO. Chartered Accountants

Place: Chandigarh DAVINDER SINGH JAAJ

Date : 6th May, 2010 Partner

 
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