Auditor Report of Magna Industries Exports Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of MAGNA INDUSTRIES & EXPORTS LTD. (the Company), which comprise the balance sheet as at 31st March 2014, and the statement of profit and loss and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s responsibility 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 flow of the company in accordance with the accounting principles generally accepted in India, including accounting standards referred to in sub-section 3(C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of (Referred to in paragraph 1 under "Report on Other Legal and Regulatory Requirements" in the Independent Auditors'' Report of even date to the members of MAGNA INDUSTRIES & EXPORTS LTD. On the financial statements for the year ended 31st March 2013)

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 the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. As required by section 227(3) of the Act, we report that:

I. (a) The company is maintaining proper records to show full particulars, including quantitative details and situation of Fixed Assets.

(b) According to the information and explanations given to us, the company has formulated regular program of verification by which all the assets of the company shall be verified in a phased manner, which is in our opinion, is reasonable having regard to the size of the company and nature of its Assets. To the best of our knowledge, no material discrepancy was noticed on verification conducted during the year as compared with the book records.

(c) There was no disposal of substantial part of fixed assets.

II. (a) The management has conducted physical verification in respect of finished goods, stores, spare parts & raw materials intervals. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedure of physical verification of Inventory followed by the Management is reasonable and adequate in relation to the size of the company and nature of the business.

(c) On the basis of examination of inventory records, in our opinion, the company is maintaining proper records of Inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material having regards to the size of the operations of the company. The discrepancies noticed have been properly dealt with the books of accounts of the company.

III. (a) The company has not granted unsecured loans to other parties covered in the register maintained under section 301 of the Companies Act 1956. The maximum amount involved during the year was NIL and the year end balance of loan granted to such parties was Rs. NIL.

(b) The rate of interest and other condition of unsecured loans given by the companies are prima facie not prejudicial to the interest of the company.

(c) The parties have repaid regularly the principal amount and interest thereon wherever applicable.

(d) There is no overdue balance for principal amount and interest.

(e) The Company has taken unsecured loans from other parties covered under section 301 of the Companies Act, 1956.

(f) The rate of interest and other conditions for unsecured loans taken by the Companies are prima facie not prejudicial to the interest of the company.

(g) The company is regular in paying the principal amount of interest thereon as stipulated.

IV. In our opinion and according to the information and explanation given to us, there is adequate internal control system commensurate with size of the Company and nature of its business, for purchase of inventory, fixed assets and sale of goods & services. We are neither come across not have been informed of any continuing failure to correct major weakness in the aforesaid internal control procedures.

V. (a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the Register in pursuance of Section 301 of the Act have been so entered.

(b) In our opinion and according to the information and explanation given to us, for purchase of services made in pursuance of contracts or arrangements entered into the register in pursuance of Section 301 of the Act and exceeding the value of Rupees Five Lacs in respect of each party during the year, have been made at price which are reasonable having regard to prevailing market prices at the relevant time.

VI. According to the information and explanations given to us, the Company has not accepted deposits from the public during the year covered by our audit report. Accordingly clause (vi) of order is not applicable to the company.

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

VIII. The Central Govt. has not prescribed for the maintenance of Cost records under Section 209 (1) (d) of the Act for any of the product of the company.

IX. (a) According to the information and explanation given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income tax, service tax, sales tax, wealth tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities in India.

(b) According to the information and explanation given to us and the records of the Company examined by us, there are not any disputed matter pending in respect of dues of sales tax, income tax, service tax, customs duty, wealth tax, excise duty and cess as at March 31, 2014.

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

XI. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank during the year under audit.

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

XIII. In our opinion and according to the information and explanations given to us, the company is not a chit fund or a nidhi / mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

XIV. In our opinion, the Company has not dealt in trading of shares, securities, debentures and other investments. Accordingly clause 4(xiv) of the Order is not applicable to the company.

XV. In our opinion, and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

XVI. In our opinion and according to the information and explanations given to us, the term loans have been prima facie applied for the purposes for which the loans were obtained.

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

XVIII. The Company has not made any preferential allotment of shares to parties and companies in the Register maintained under Section 301 of the Act during the year.

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

XX. The Company has not raised any money by public issue during the year.

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

FOR P.BOHRA & COMPANY CHARTERED ACCOUNTANTS Firm Registration No: 003264C

(PRAKASH BOHRA) PROPRIETOR. Membership No: 72366

Place: Mumbai. Date:

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Mar 31, 2013

We have audited the accompanying financial statements of MAGNA INDUSTRIES & EXPORTS LTD. (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 then ended, and a summary of significant accounting policies and other explanatory information.

Management''s responsibility for the financial statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flow of the company in accordance with the accounting principles generally accepted in India, including accounting standards referred to in sub-section 3(C) 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 the management, as well as evaluating the overall presentation of the financial statements.

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

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 on 31st March, 2013;

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

iii. In the case of 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 sub-section (4A) of section227 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:

- 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,

- 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,

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

- In our opinion, The Balance Sheet, 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.

* On the basis of the 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 Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act 1956.

(Referred to in paragraph 1 under "Report on Other Legal and Regulatory Requirements" in the Independent Auditors'' Report of even date to the members of MAGNA INDUSTRIES & EXPORTS LTD. On the financial statements for the year ended 31st March 2013)

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 the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. As required by section 227(3) of the Act, we report that:

I. (a) The company is maintaining proper records to show full particulars, including quantitative details and situation of Fixed Assets.

(b) According to the information and explanations given to us, the company has formulated regular program of verification by which all the assets of the company shall be verified in a phased manner, which is in our opinion, is reasonable having regard to the size of the company and nature of its Assets. To the best of our knowledge, no material discrepancy was noticed on verification conducted during the year as compared with the book records.

(c) There was no disposal of substantial part of fixed assets.

II. (a) The management has conducted physical verification in respect of finished goods, stores, spare parts & raw materials intervals. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedure of physical verification of Inventory followed by the Management is reasonable and adequate in relation to the size of the company and nature of the business.

(c) On the basis of examination of inventory records, in our opinion, the company is maintaining proper records of Inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material having regards to the size of the operations of the company. The discrepancies noticed have been properly dealt with the books of accounts of the company.

III. (a) The company has not granted unsecured loans to other parties

covered in the register maintained under section 301 of the Companies Act 1956. The maximum amount involved during the year was NIL and the yearend balance of loan granted to such parties was Rs. NIL.

(b) The rate of interest and other condition of unsecured loans given by the companies are prima facie not prejudicial to the interest of the company.

(c) The parties have repaid regularly the principal amount and interest thereon wherever applicable.

(d) There is no overdue balance for principal amount and interest.

(e) The Company has taken unsecured loans from other parties covered under section 301 of the Companies Act, 1956.

(f) The rate of interest and other conditions for unsecured loans taken by the Companies are prima facie not prejudicial to the interest of the company.

(g) The company is regular in paying the principal amount of interest thereon as stipulated.

IV. In our opinion and according to the information and explanation given to us, there is adequate internal control system commensurate with size of the Company and nature of its business, for purchase of inventory, fixed assets and sale of goods & services. We are neither come across not have been informed of any continuing failure to correct major weakness in the aforesaid internal control procedures.

V. (a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the Register in pursuance of Section 301 of the Act, have been so entered.

(b) In our opinion and according to the information and explanation given to us, for purchase of services made in pursuance of contracts or arrangements entered into the register in pursuance of Section 301 of the Act and exceeding the value of Rupees Five Lacs in respect of each party during the year, have been made at price which are reasonable having regard to prevailing market prices at the relevant time.

VI. According to the information and explanations given to us, the Company has not accepted deposits from the public during the year covered by our audit report. Accordingly clause (vi) of order is not applicable to the company.

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

VIII. The Central Govt, has not prescribed for the maintenance of Cost records under Section 209 (1) (d) of the Act for any of the product of the company.

IX. (a) According to the information and explanation given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income tax, service tax, sales tax, wealth tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities in India.

(b) According to the information and explanation given to us and the records of the Company examined by us, there are not any disputed matter pending in respect of dues of sales tax, income tax, service tax, customs duty, wealth tax, excise duty and cess as at March 31, 2013.

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

XI. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank during the year under audit.

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

XIII. In our opinion and according to the information and explanations given to us, the company is not a chit fund or a nidhi / mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

XIV. In our opinion, the Company has not dealt in trading of shares, securities, debentures and other investments. Accordingly clause 4(xiv) of the Order is not applicable to the company.

XV. In our opinion, and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

XVI. In our opinion and according to the information and explanations given to us, the term loans have been prima facie applied for the purposes for which the loans were obtained.

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

XVIII. The Company has not made any preferential allotment of shares to parties and companies in the Register maintained under Section 301 of the Act during the year.

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

XX. The Company has not raised any money by public issue during the year.

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

FOR P.BOHRA & COMPANY

CHARTERED ACCOUNTANTS

Firm Registration No: 003264C

(PRAKASH BOHRA)

PROPRIETOR.

Membership No: 72366

Place: Mumbai.

Date: 18th July, 2013

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Mar 31, 2012

1. We have audited the attached Balance Sheet of MAGNA INDUSTRIES & EXPORTS LIMITED ("the Company") as at 31st March, 2012 and the attached Statement of Profit and Loss of the Company for the year ended on that date, the Cash Flow Statement of the Company for the year ended on that date annexed thereto, which have been signed under reference to this report. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these statements based on our audit.

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

B. 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 Companies Act, 1956 of India (hereinafter referred to as the " Act") and on the basis of such checks as considered appropriate and as per the information and explanations given to us, we set out in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said order

2. Confirmations have not been called for in respect of few balances of Sundry Debtors, Sundry Creditors, Loans and Advances and Deposits given and the same are subject to reconciliation's/adjustments, if any (Refer Note No. 8 in Schedule 19).

3. Further to our comments in the Annexure referred to in paragraph 1 above, we report that

a.) Subject to the matters referred to in paragraphs 2 and 3 above, we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit

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

c.) The Balance Sheet and 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 Balance Sheet and Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3Q of section 211 of the Companies Act, 1956;

e.) As per information and explanations given to us, none of the directors of the Company is disqualified from being appointed as a director under clause (d) of section 274 of tile

Companies Act, 1956;

f.) Subject to the matters referred to in paragraphs 2 & 3 above, and consequential impact whereof on the Profit for the year, Reserves and Surplus and Assets and Liabilities as on the closing date, amount presently not determinable, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Significant Accounting Policies and other Notes appearing in Schedule 19 and elsewhere in the accounts given a true and fair view:

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

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

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

Referred to in paragraph 1 (B) of our Report to the members of Magna Industries & Exports Limited on the Financial Statements for the year ended 31st March 2012.

1. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets. According to the information and explanations given to us, the management has physically verified all the Fixed Assets as at the year end, which is reasonable having regard to the size of the Company and nature of such assets and no material discrepancies have been noticed on such verification.

2. The Fixed Assets of the Company have not been revalued during the year.

3. As informed to us, the stocks of finished goods, packing materials and raw materials have been physically verified during the year by the management at reasonable intervals. Confirmations for stocks in possession and custody of third parties have not been received.

4. In our opinion and according to the information and explanations given to us, the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

5. The discrepancies noticed on verification between physical stocks and books records were not material and have been properly dealt with in the books of account.

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6. In our opinion, valuation of stocks is fair and proper in accordance with normally accepted accounting principles and is on the same basis as in the preceding year.

7. In our opinion, the rate of interest and other terms and conditions on which unsecured loans have been taken from a company, listed in the register maintained under Section 301 of the Act, are not, prima-facie, prejudicial to the interest of the Company. As explained, there are no tompanies under the same management as defined under Section 370 (IB) of the Act

8. The Company has not granted any Loans to a company listed in the register maintained under Section 301 of the Act as explained, there are no companies under the same management as defined under Section 370 (IB) of the Act.

9. Loans and Advances in the nature of loans have been given as to without any stipulation/recoverable on demand The principal and interest (wherever applicable) amounts are generally recovered.

10. In our opinion, internal control procedures are commensurate with the size of the Company and nature of its business with regard to purchase of stores, raw materials, plant and machinery, equipment and other assets and for the sale of goods.

11. During the year, the Company has not entered into any transactions for purchase of goods and materials and for sale of goods, materials and services made in pursuance of contracts entered in the register maintained under Section 301 of the Act, and aggregating to Rs. 50,000 or more during the year in respect of each party.

12. As explained to us, the Company has a regular procedure for determination of unserviceable or damaged packing materials, raw materials and finished goods. There were, however, no such stocks requiring any provision.

13. The Company had not taken any loan from companies, firms and other parties covered in the register maintained under the section 301 of the Companies Act 1956. Consequently the requirements of clauses (iii) (f) and (iii) (g) of Paragraph 4 of the order are not applicable.

14. The Company has not accepted any deposits from the public and consequently, the directives issues by the Reserve Bank of India the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable.

15. In our opinion, reasonable records have been maintained by the Company for the sale and disposal of realizable scraps. As explained to us, the Company's operations do not generate any realizable by-products.

16. No formal internal audit was carried out during the year. However the management is of the opinion that present internal control system is commensurate with the size of the Company.

17. The Central Government has not prescribed for the maintenance of cost records under Section 209(1) (d) of the Act for any of the products of the Company.

18. As per legal opinion taken by the Company, the provisions of Employees State Insurance Scheme and Employees provident Funds and Miscellaneous Provisions Act 1952 are not applicable to the Company.

19. There were no undisputed amounts payable in respect of Income-Tax, Wealth-Tax, Sale^-Tax, Customs Duty and Excise outstanding as at 31st March, 2012, for a period of more than six months from the date they become payable.

20. According to the information and explanations given to us and on the basis of records of the Company examined by us, no personal expenses have been charged to revenue account other than those payable under contractual obligations or in accordance with generally accepted business practices.

21. The Company has no accumulated losses as at the end of the financial year nor incurred cash losses, which is in excess of 50% of the Net worth of the Company.

22. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the Balance Sheet date.

23. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clause 4(xii) of the Order is not

applicable.

24. The provisions of any special statute applicable to chit fund /nidhi / mutual benefit fund / societies are not applicable to the Company. Accordingly, clause 4(xiii) of the Order is not applicable.

25. In our opinion, the Company is not a regular dealer or trader in shares, securities, debentures and other investments. However it has made Investments in unquoted equity shares of Companies. All the investments are held in the name of the Company and its nominees.

26. In our opinion, and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

27. The Company has not taken any term loans during the current year.

28. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we report that the no funds raised on short- term basis have been used for long-term purposes. And there are no Long term funds raised during the year.

29. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act during the year.

30: The Company has not issued any debentures during the year.

31. The Company has raised any money by public issue, during the year.

32. The Company is not a Sick Industrial Company within the meaning of clause (O) of the sub-section (i) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.



33. The respect of the service activities of the Company, according to the information and explanations given to us and considering the nature of services rendered by it, no stores, other materials or man-hours are consumed in the process of rendering the services. Hence, necessity of maintaining records for the same does not arise.

34. In respect of trading activities, there were no damaged goods during the year.

35. In our opinion and according to the information and explanations given to us, no fraud by the Company and no significant fraud on the Company has been noticed or reported by the Management during the year, that ultimately causes the financial statements to be materially misstated.

For P. BOHRA & COMPANY, CHARTERED ACCOUNTANTS Finn Registration No: 003264C

(PRAKASH BOHRA) PROPRIETOR Membership No: 72366

Place: Mumbai

Date:30/11.2012