Enter the first few characters of Company and click 'Go'

Auditor Report of CIE Automotive India Ltd.

Dec 31, 2022

To the Members of Mahindra CIE Automotive Limited Basis for opinion

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Mahindra CIE Automotive Limited (the âCompany") which comprise the standalone balance sheet as at 31 December 2022, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.

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 Companies Act, 2013 (âAct") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 December 2022, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters

How the matter was addressed in our audit

Impairment of goodwill

See Note 2.14 and Note 6 to standalone financial statements

The aggregate carrying value of the goodwill as at 31 December 2022 amounts to INR 10,167 million. The Company tests the carrying value of goodwill at least annually for impairment.

The processes and methodologies for assessing and determining the recoverable amount of goodwill

is based on complex assumptions (such as growth rates, discount rates and forecasted cash flows relating to the respective cash generating units).

Considering the involvement of significant judgment required and the underlying complex assumptions used, this is considered as a key audit matter.

In view of the significance of the matter we applied the

following audit procedures in this area, among others to

obtain sufficient appropriate audit evidence:

â¢ We obtained an understanding of the Company''s policy on assessment of impairment of goodwill by comparing with applicable accounting standards.

â¢ We evaluated the design, implementation and operating effectiveness of key internal controls over impairment of goodwill.

â¢ We assessed the identification of relevant cash generating unit (CGU) to which goodwill is allocated.

â¢ We assessed the impairment model which is based on discounted cash flows used by the Company to estimate the recoverable value of goodwill and consistency with the applicable accounting standards.

â¢ We involved our internal specialists to evaluate the methodology, assumptions and estimates used in the impairment assessment.

â¢ We assessed the accuracy of prior period forecasts of the CGUs with the actual financial performance of the CGUs.

Key audit matters

How the matter was addressed in our audit

â¢ We assessed potential changes in key drivers for impairment assessment as compared to previous year and evaluated the assumptions around the key drivers of the cash flow forecasts including discount rates, expected growth rates and terminal growth rates. We evaluated the suitability of inputs and assumptions used in the cash flow forecasts.

â¢ We performed sensitivity analysis of key assumptions used to determine which assumptions could change the outcome of impairment assessment.

â¢ We assessed the adequacy of disclosure of impairment assessment of goodwill in the Standalone financial statements.

Revenue from Sale of Products

See Note 2.5 and Note 23 to standalone financial statements

The Company''s revenue is derived primarily from sale of automobile components (âgoods"). Revenue from the sale of goods is recognised upon the transfer of control to the customer. The Company and its external stakeholders focus on revenue as a key performance metric which contains significant related party transactions.

Revenue recognition has been identified as a key audit matter as there could be an incentive or external pressures to meet expectations resulting in revenue being overstated or recognized before the control has been transferred.

In view of the significance of the matter we applied the

following audit procedures in this area, among others to

obtain sufficient appropriate audit evidence:

â¢ We assessed the appropriateness of Company''s accounting policies for revenue recognition by comparing with applicable accounting standards.

â¢ We evaluated the design, implementation and operating effectiveness of key internal controls over recognition of revenue.

â¢ We performed substantive testing by selecting samples (using statistical sampling) of revenue transactions recorded during the year by testing the underlying documents which included sales invoices, shipping documents and proof of deliveries, to assess whether these are recognised in the appropriate period in which control is transferred.

â¢ We tested, on a sample basis, (using statistical sampling), specific revenue transactions recorded before and after the financial year-end date to assess whether revenue is recognised in the financial period in which control if transferred.

â¢ For revenue from sale of goods to the related parties, we verified the Company''s analysis in relation to arm''s length assessment and involved our internal specialists.

â¢ We tested journal entries on revenue recognised during the year, by considering specified risk-based criteria, to identify unusual or irregular items.

â¢ We assessed the adequacy of disclosure made in the standalone financial statements with respect to revenue recognised during the year as required by applicable Ind AS.

Report on the Audit of the Standalone Financial Statements

Opinion

Key audit matters

How the matter was addressed in our audit

Impairment of goodwill

See Note 2.14 and Note 6 to standalone financial statements

The aggregate carrying value of the goodwill as at 31 December 2022 amounts to INR 10,167 million. The Company tests the carrying value of goodwill at least annually for impairment.

The processes and methodologies for assessing and determining the recoverable amount of goodwill

is based on complex assumptions (such as growth rates, discount rates and forecasted cash flows relating to the respective cash generating units).

Considering the involvement of significant judgment required and the underlying complex assumptions used, this is considered as a key audit matter.

In view of the significance of the matter we applied the

following audit procedures in this area, among others to

obtain sufficient appropriate audit evidence:

â¢ We obtained an understanding of the Company''s policy on assessment of impairment of goodwill by comparing with applicable accounting standards.

â¢ We evaluated the design, implementation and operating effectiveness of key internal controls over impairment of goodwill.

â¢ We assessed the identification of relevant cash generating unit (CGU) to which goodwill is allocated.

â¢ We involved our internal specialists to evaluate the methodology, assumptions and estimates used in the impairment assessment.

â¢ We assessed the accuracy of prior period forecasts of the CGUs with the actual financial performance of the CGUs.

The Company''s Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the standalone financial statements and our auditor''s report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management''s and those charged with governance Responsibilities for the Standalone Financial Statements

The Company''s Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

â¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.

â¢ Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

Management''s and those charged with governance Responsibilities for the Standalone Financial Statements

The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.

comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows 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 Ind AS specified under Section 133 of the Act.

e. On the basis of the written representations received from the directors as on 31 December 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31 December 2022 from being appointed as a director in terms of Section 164(2) of the Act.

f. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure B.

B. 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 as at 31 December 2022 on its financial position in its standalone financial statements - Refer Note 30 to the standalone 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 were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

d. (i) The management has represented

that, to the best of their knowledge and belief, as disclosed in the Note 39 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities (âIntermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

â¢ directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiaries") or

â¢ Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter(s)

a. The standalone financial statements of the Company for the year ended 31 December 2021 were audited by the predecessor auditor who had expressed an unmodified opinion on 22 February 2022.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the âAnnexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2 A. 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 standalone balance sheet, the standalone statement of profit and loss (including other

â¢ provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

(ii) The management has represented that, to the best of their knowledge and belief, as disclosed in the Note 40 to the standalone financial statements, no funds have been received by the Company from any persons or entities, including foreign entities (âFunding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall:

â¢ directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties (âUltimate Beneficiaries") or

â¢ provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(iii) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) above contain any material misstatement.

e. The final dividend paid by the Company during

the year in respect of the same declared for the previous year is in accordance with

section 123 of the Act to the extent it applies to payment of dividend. As stated in Note 42 to the standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.

C. With respect to the matter to be included in the Auditor''s Report under Section 197(16) of the Act:

In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.

For B S R & Co. LLP

Chartered Accountants Firm''s Registration No.:101248W/w-100022

Abhishek

Partner

Place: Pune Membership No.: 062343

Date: February 22, 2023 ICAI UDIN:23062343BGYFSI3692

Dec 31, 2018

INDEPENDENT AUDITORâS REPORT

To the Members of Mahindra CIE Automotive Limited

Report on the Standalone Indian Accounting Standards (Ind

AS) Financial Statements

1. We have audited the accompanying standalone Ind AS financial statements of Mahindra CIE Automotive

Limited (âthe Companyâ), which comprise the Balance Sheet as at December 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Managementâs Responsibility for the Standalone Ind AS

Financial Statements

2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorsâ Responsibility

3. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made thereunder including 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.

comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorsâ judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at December 31, 2018, and its total comprehensive income (comprising of profit and other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

9. As required by the Companies (Auditorsâ Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (âthe Orderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.

10. 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 of account.

Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.

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

(f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.

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

i The Company has disclosed the impact, if any, of pending litigations as at December 31, 2018 on its financial position in its standalone Ind AS financial statements - Refer Note 30;

ii. The Company has long-term contracts as at December 31, 2018 for which there were no material foreseeable losses. The Company did not have any derivative contracts as at December 31, 2018.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended December 31, 2018.

iv. The reporting on disclosure relating to Specified Bank Notes is not applicable to the Company for the year ended December 31, 2018.

Referred to in paragraph 10(f) of the Independent Auditorsâ Report of even date to the members of Mahindra CIE Automotive Limited on the standalone Ind AS financial statements for the year ended December 31,2018

Report on the Internal Financial Controls with reference to Ind AS financial statements under Clause (i) of Subsection 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference to Ind AS financial statements of Mahindra CIE Automotive Limited (âthe Companyâ) as of December 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Managementâs Responsibility for Internal Financial Controls

2. The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditorsâ Responsibility

3. Our responsibility is to express an opinion on the Companyâs internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial

controls system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgments, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

6. A companyâs internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial controls with reference to financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to financial statements

7. Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at December 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Referred to in paragraph 9 of the Independent Auditorsâ Report of even date to the members of Mahindra CIE Automotive Limited on the standalone Ind AS financial statements as of and for the year ended December 31,2018

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

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

(c) The title deeds of immovable properties, as disclosed in Note 5 and Note 10 to the financial statements, are held in the name of the Company, except for:'' in Million

Nature of property	Total Number of cases	Gross Block as at December 31, 2018	Net Block as at December 31, 2018
Freehold land	1	25	25
Leasehold land	3	546	473
Building	4	576	495

These properties are in name of Mahindra Hinoday Industries Limited, Mahindra Gears and Transmissions Private Limited and Mahindra Ugine Steel Company Limited. These properties have vested into the Company pursuant to amalgamations of these entities with the Company.

ii. The physical verification of inventory excluding stocks with third parties have been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.

iv. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under Section 185 and 186. Therefore, the provisions of Clause 3(iv) of the said Order are not applicable to the Company.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing undisputed statutory dues, including provident fund, income tax, profession tax, employeesâ state insurance, duty of customs, cess, goods and services tax and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax, service tax, duty of customs and excise duty as at December 31, 2018 which have not been deposited on account of a dispute, are as follows:

Name of the statute	Nature of dues	Amount (?) in Million	Amount paid under protest	Period to which the amount relates	Forum where the dispute is pending
Income Tax Act, 1961	Income Tax	163*	48	2004-05 to 2014-15	CIT (Appeals) to High Court
Central Excise Act, 1944	Excise Duty	192	4	1999-00 to 2016-17	Commissioner of Central Excise (Appeals) to High Court

Name of the statute	Nature of dues	Amount (?) in Million	Amount paid under protest	Period to which the amount relates	Forum where the dispute is pending
Finance Act, 1994	Service Tax	61		2005-06 to Marchâ12	Commissioner of Central Excise to Customs, Excise and Service Tax Appellate Tribunal
Sales Tax Laws	Sales Tax	384	28	1995-96 to 2013-14	Commissioner of VAT (Appeals) to Central Appellate Tribunal
Customs Act, 1962	Custom Duty	2	-	2013-14	Commissioner of Custom

âAmount is net of refund adjusted for AY 2008-09 to AY 2013-14 amounting to '' 135 Million.

viii. 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 loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date.

ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

x. 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 material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act.

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. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.

For Price Waterhouse

Chartered Accountants LLP

Firm Registration Number: 012754N/N500016

Jeetendra Mirchandani

Place: Mumbai Partner

Date: February 20, 2019 Membership Number-48125

Dec 31, 2017

INDEPENDENT AUDITORâS REPORT

To the Members of Mahindra CIE Automotive Limited

Report on the Standalone Indian Accounting Standards (Ind

AS) Financial Statements

1. We have audited the accompanying standalone Ind AS financial statements of Mahindra CIE Automotive Limited (the âCompanyâ), which comprise the Balance Sheet as at December 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Managementâs Responsibility for the Standalone Ind AS

Financial Statements

2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorsâ Responsibility

3. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made there under including 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.

5. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at December 31, 2017, and its total comprehensive income (comprising of profit and other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matters

9. We draw your attention to the following matters:

a. Note 8(1) to the standalone financial statements regarding amalgamation of four wholly owned subsidiaries of the Company namely Mahindra Forgings International Limited, Mahindra Forgings Global Limited, Mahindra Gears and Transmission Private Limited and Crest Geartech Private Limited, with the Company with effect from July 01, 2017, being the appointed date as approved by National Company Law Tribunal in the scheme of amalgamation.

b. Note 8(2) to the standalone financial statements regarding no provision for impairment by the Management to the carrying value of investment in Mahindra Forgings Europe AG, a wholly owned subsidiary of the Company, amounting to '' 6,974 million as at December 31, 2017, in view of the reasons stated therein.

Our opinion is not qualified in respect of the above matters.

Other Matter

10. The comparative financial information of the company for the year ended December 31, 2016 prepared in accordance with Ind AS included in these standalone Ind AS financial statements have been audited by the predecessor auditor who had audited the statutory financial statements for the year ended December 31, 2016. The predecessor auditor has expressed an unmodified opinion on the comparative financial information vide report dated February 23, 2017.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

12. 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 of account.

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

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on December 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on December 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) 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.

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

i The Company has disclosed the impact, if any, of pending litigations as at December 31, 2017 on its financial position in its standalone Ind AS financial statements - Refer Note 30;

ii. The Company has long-term contracts as at December 31, 2017 for which there were no material foreseeable losses. The Company did not have any derivative contracts as at December 31, 2017.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended December 31, 2017.

Report on the Internal Financial Controls under Clause (i) of

Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls over financial reporting of Mahindra CIE Automotive Limited (âthe Companyâ) as of December 31, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Managementâs Responsibility for Internal Financial Controls

2. The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditorsâ Responsibility

3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial

Reporting

6. A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the Ind AS financial statements.

Inherent Limitations of Internal Financial Controls Over

Financial Reporting

7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at December 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

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

(c) The title deeds of immovable properties, as disclosed in Note 5 and Note 10 on fixed assets and other non-current assets respectively to the Ind AS financial statements, are held in the name of the Company, except for:'' in million

Nature of property	Total Number of cases	Gross Block as at December 31, 2017	Net Block as at December 31, 2017
Freehold land	2	89	89
Leasehold land	3	560	495
Building	5	754	568

These properties have vested into the Company pursuant to amalgamations of these entities into the Company. The Company has/is in the process of filing application with the concerned authorities for change in name in the title deeds for respective immovable properties pertaining to the Company.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of employees'' state insurance, though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including sales tax, income tax, service tax, duty of customs, duty of excise, value added tax, goods and services tax, cess and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax, service tax, duty of customs and duty of excise duty, value added tax as at December 31, 2017 which have not been deposited on account of a dispute, are as follows:

Name of the statute	Nature of dues	Amount (?) in million	Amount paid under protest	Period to which the amount relates	Forum where the dispute is pending
Income Tax Act, 1961	Income Tax	163*	48	2004-05 to 2014-15	CIT (Appeals) to High Court
Central Excise Act, 1944	Excise Duty	220	3	1999-00 to 2014-15	Commissioner of Central Excise (Appeals) to Customs, Excise and Service Tax Appellate Tribunal

Name of the statute	Nature of dues	Amount (?) in million	Amount paid under protest	Period to which the amount relates	Forum where the dispute is pending
Finance Act, 1994	Service Tax	58		Apr''07-Jun''11 to Apr''12 to Jan''13	Customs, Excise and Service Tax Appellate Tribunal
Sales Tax Laws	Sales Tax	233	13	1995-96 to 2012-13	Commissioner of VAT (Appeals) to Central Appellate Tribunal
Customs Act, 1962	Custom Duty	-#	-	2009-2010 & 20102011	Assistant Commissioner of Custom

* Amount is net of refund adjusted for AY 2008-09 to AY 2013-14 amounting to '' 135 million.

# Amount is below the rounding off norm adopted by the Company.

xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the Ind AS financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act.

xv. The Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

For Price Waterhouse

Chartered Accountants LLP

Firm Registration Number: 012754N/N500016

Jeetendra Mirchandani

Place: Mumbai Partner

Date: February 20, 2018 Membership Number â 48125

Dec 31, 2016

To the Members of Mahindra CIE Automotive Limited

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of Mahindra CIE Automotive Limited (âthe Companyâ), comprising the standalone balance sheet as at 31^st December, 2016 and the related standalone statements of profit and loss and cash flow for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Managementâs Responsibility for the Financial Statements

2. The Companyâs Board of Directors is responsible for the preparation of these standalone financial statements in terms of the requirements of the Companies Act, 2013 (âthe Actâ) 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 prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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.

Auditorâs Responsibility

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

4. While conducting 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.

5. 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.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditorâs 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 auditor considers internal financial control relevant to the Companyâs preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Board of Directors, as well as evaluating the overall presentation of the standalone financial statements.

7. We believe that the audit evidence we obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company, as at 31^st December, 2016, and its profit and standalone cash flows for the year ended 31^st December, 2016.

Emphasis of matter

9. We draw attention to Note No. 9 to the standalone financial statements and for the reasons detailed therein, we have relied on the representation of the management of the Company that it does not perceive any diminution other than temporary in the value of long term investment of ''

7,637.5 Million in its wholly owned subsidiaries namely Mahindra Forgings Global Limited and Mahindra Forgings International Limited based on management forecasts of future earnings of the businesses of these entities. We have relied on these management forecasts.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditorâs Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (the âOrderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure I, a statement on the matters specified in paragraphs 3 and 4 of the Order.

11. 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 relating to preparation of the standalone financial statements 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 relevant books of account maintained for the purpose of preparation of the standalone financial statements;

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 (as amended);

e. on the basis of written representations received from the directors as on 31^st December, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31^st December, 2016, from being appointed as a director in terms of Section 164(2) of the Act.

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

g. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), 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 the financial position in its financial statements - Refer to Note 31 to the standalone financial statements

ii. The Company did not have any long-term contracts for which there were any material foreseeable losses. Provision has been made in the standalone financial statements as required under the applicable law or accounting standards, for material foreseeable losses, if any, on derivative contracts.

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

ANNEXURE I TO THE AUDITORâS REPORT

Referred to in paragraph 10 of our report of even date on the standalone financial statements of Mahindra CIE Automotive Limited for the year ended 31^st December, 2016

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

(ii) The Company has a rotational programme for verification of its fixed assets over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. A portion of the fixed assets has been physically verified by the management of the Company during the year in accordance with the above-mentioned program. No material discrepancies were identified on such verification and have been properly accounted for in the books of account.

(iii) According to the information and explanations given to us and to the best of our knowledge and belief, the title deeds of the following properties are not in the name of the Company:

			Rs. Million as at 31^st December, 2016
Title deed held in the name of	Nature of property	Location	Gross block	Net block
Amforge Industries Limited	Freehold Land	Chakan	3.8	3.8
Mahindra Ugine Steel Co. Limited	Freehold Land	Zaheerabad	25.0	25.0
Mahindra Ugine Steel Co. Limited	Freehold Land	Kanhe	36.9	36.9
D G P Hinoday Industries Limited	Freehold Land	Urse	299.7	299.7
Amforge Industries Limited	Building	Chakan	577.4	287.2
Mahindra Ugine Steel Co. Limited	Building	Zaheerabad	130.8	119.8
Mahindra Ugine Steel Co. Limited	Building	Kanhe	271.1	76.2
Mahindra Ugine Steel Co. Limited	Building	Nashik	199.1	79.1
Mahindra Ugine Steel Co. Limited	Building	Rudrapur	42.0	10.5
Mahindra Ugine Steel Co. Limited	Building	Pantnagar	84.9	62.3
Morris Electronics Limited	Building	Bhosari	137.8	71.3
Morris Electronics Limited	Building	Urse	680.2	438.1
Mahindra Composites Limited	Building	Pune	22.1	4.7
Siro Plast Limited	Building	Mangaon	31.6	18.9
Mahindra Ugine Steel Co. Limited	Leasehold Land	Nashik	27.9	26.1
Mahindra Ugine Steel Co. Limited	Leasehold Land	Rudrapur	3.3	0.0
Mahindra Ugine Steel Co. Limited	Leasehold Land	Pantnagar	14.2	13.3
D G P Hinoday Industries Limited	Leasehold Land	Bhosari	415.6	363.7
Siro Plast Limited	Leasehold Land	Mangaon	0.3	0.2

These properties have vested into the Company pursuant to amalgamations of these entities into the Company. According to the information and explanations given to us and on the basis of our examination of the records of the Company, other than as indicated herein, the title deeds of immovable properties are held in the name of the Company.

2. According to the information and explanations give to us, the Company conducted physical verification of inventory at during year which in our opinion is reasonable given the size of the Company and the nature of its operations. The discrepancies were not material and have been properly dealt with in the books of account of the Company.

3. The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act. Accordingly, the provisions of para 3(iii), (iii)(a) and (iii)(b) of the Order are not applicable to the aforesaid companies.

4. In our opinion and according to the information and explanations given to us, there are no loans, guarantees or security granted to which the provisions of Section 185 of the Act apply. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 186 of the Act, with respect to investments made by it in the capital of its wholly owned subsidiaries to which the provisions of Section 186 of the Act are applicable.

5. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits to which the directives of the Reserve Bank of India and the provisions of Sections 73-76 of the Act and the rules framed there under to the extent modified apply. Accordingly, the provisions of clause 3(v) of the Order are not applicable to the Company.

6. As informed to us, the maintenance of cost records has been prescribed by the Central Government under section 148(1) of the Companies Act, 2013, in respect of the activities carried on by the Company. We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under section and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

7. (i) According to the records of the Company examined by us and information and explanations given to us, the Company

is generally regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Employeesâ State Insurance, Income Tax, Sales Tax, Wealth Tax, Excise Duty, Service Tax, Customs Duty, value added tax, and other statutory dues applicable to it. There are no undisputed amounts in respect of the aforesaid items which are unpaid at the balance sheet date for a period of more than 6 months from the date they became due.

(ii) According to the information and explanations given to us, dues of income-tax, sales tax, service tax, excise duty, customs duty and work contract tax which have not been deposited on account of any dispute are as follows:

Name of Statute	Nature of dues	Rs. Million	Period to which amount relates	Forum where pending
Central Excise Act, 1944	Excise Duty	8.1	2010-11 to 2012-13	CESTAT Mumbai
Central Excise Act, 1944	Excise Duty	1.1	2012-13	Additional Commissioner of Central Excise
Central Excise Act, 1944	Excise Duty	9.9	Various	CESTAT Mumbai
Income Tax Act, 1961	Income Tax Act, 1961	278.5	2005-06 to 2011-12	CIT(Appeals)- Mumbai
Central Excise Act, 1944	Excise Duty	5.5	1997-98	CESTAT
Central Excise Act, 1944	Excise Duty	0.5	2013-14	CESTAT
Central Excise Act, 1944	Excise Duty	21.4	2014-15	CESTAT
Finance Act, 1994	Service Tax	6.4	2015-16 & 2016-17	Commissioner Appeals
Finance Act, 1994	Service Tax	0.5	Various Years	CESTAT
Finance Act, 1994	Service Tax	0.7	F.Y 2015-16	CESTAT
Finance Act, 1994	Service Tax	3.8	F.Y 2015-16	Commissioner Appeals
Income Tax Act, 1961	Appeals against Income Tax Claims	3.1	2011-12	Commissioner of Income Tax (Appeals) - Pune
Central Excise Act, 1944	Excise Duty	0.5	2008-09	Commissioner of Central Excise and Customs (Appeals) - Mumbai
Customs Act, 1962	Customs Duty	0.4	2009-10 & 2010-11	Assistant Commissioner of Customs
Central Excise Act, 1944	Excise Duty	0.2	1999-2000	Superintendent of Central Excise
Central Excise Act, 1944	Service Tax	0.2	2005-06	Deputy Commissioner of Sales Tax
Sales Tax Laws	Sales Tax	5.8	F.Y. 1994-1995	High Court
Sales Tax Laws	Sales Tax	90.0	Various	Central Sales Tax Appellate Authority
Sales Tax Laws	Sales Tax	119.5	Various	Joint Commissioner of Sales Tax-Appeals
Sales Tax Laws	Sales Tax	0.1	2011-12	Joint Commissioner of Sales Tax-Appeals
Sales Tax Laws	Sales Tax	2.6	2012-13	Joint Commissioner of Sales Tax-Appeals
Central Excise Act, 1944	Excise Duty	48.8	F.Y. 2006-2007 & F.Y. 2007-2008	High Court
Central Excise Act, 1944	Excise Duty	44.1	1999 to 2004, 2003 to 2007, 2008 to 2010 & 2012 to 2013	Customs, Excise and Service Tax Appellate Tribunal
Central Excise Act, 1944	Excise Duty	2.2	Jan 2010 to Mar2014	Dy Commissioner
Central Excise Act, 1944	Excise Duty	0.1	April 2011 to Mar 2012	Commissioner - Appeals

Name of Statute	Nature of dues	Rs. Million	Period to which amount relates	Forum where pending
Central Excise Act, 1944	Excise Duty	0.5	April 2015 to Mar 2016	Dy Commissioner
Finance Act, 1994	Service Tax	55.1	Various	Customs, Excise and Service Tax Appellate Tribunal
Income Tax Act, 1961	Income Tax	57.3	2005-06 to 2011-12	Tribunal
Income Tax Act, 1961	Income Tax	0.3	A.Y. 2013-14 & 14-15	CIT(Appeals)- Mumbai
Income Tax Act, 1961	Income Tax	13.8	2005-06 to 2011-12	CIT(Appeals)- Mumbai

8. Based on the records examined by us and according to the information and explanations given to us the Company has not defaulted in repayment of dues to a financial institution, banks or to the Government during the year. The Company has not raised any loans by way of debentures.

9. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. The money raised by way of term loans have been applied for the purpose for which they were raised.

10. Based on the records examined by us and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the management of the Company.

11. Based on the records examined by us and according to the information and explanations given to us, the Company has paid/ provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.

12. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company and hence paragraph 3(xii) of the Order is not applicable to the Company.

13. Based on the records examined by us and according to the information and explanations given to us, transactions with related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

14. Based on the records examined by us and according to the information and explanations given to us, the Company has made preferential allotment of shares during the year and the requirements of section 42 of the Companies Act, 2013, have been complied with and the amount raised has been used for the purpose for which the funds were raised.

15. Based on the records examined by us and according to the information and explanations given to us, the Company has not entered into non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable.

16. In our opinion and according to the information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

ANNEXURE II TO THE INDEPENDENT AUDITORâS REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF MAHINDRA CIE AUTOMOTIVE LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)

We have audited the internal financial controls over financial reporting of Mahindra CIE Automotive Limited (âthe Companyâ) as of 31^st December, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended 31^st December, 2016.

Managementâs Responsibility for Internal Financial Controls

The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (âICAIâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 (âthe Actâ).

Auditorsâ Responsibility

Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31^st December, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For B. K. Khare & Co.

Chartered Accountants

Firmâs Registration Number 105102W

Padmini Khare Kaicker

Partner

MembershipNumber: 044784

Mumbai

23^rd February, 2017

Mar 31, 2015

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

Management''s Responsibility for the Financial Statements

2. 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 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

4. 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.

5. 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.

6. 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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls 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.

7. 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

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

Emphasis of matter

9. We draw attention to Note X to the financial statements and for the reasons detailed therein, management of the Company does not perceive any permanent diminution in the value of long term investment of Rs. 7,349.3 million in the wholly owned subsidiaries namely Mahindra Forgings Global Limited and Mahindra Forgings International Limited in view of the measures for improving financial performance being taken by the management of the Company.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditor''s Report) Order, 2015, issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act (the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

11. 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 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 Cash Flow dealt with by this Report are in agreement with the books of account;

d. 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 (as amended);

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

f. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014(as amended), 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 XXVI to the financial statements.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any on long-term contracts. The Company did not have any derivative contracts.

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

ANNEXURE TO THE AUDITOR''S REPORT

Referred to in paragraph 10 of our report of even date on the financial statements of Mahindra CIE Automotive Limited for the year ended March 31,2015

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

(ii) The Company has a rotational programme for verification of its fixed assets over a period of 3 years. A portion of the fixed assets have been physically verified by the management during the year in accordance with the program. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies reported on such verification have been properly dealt in the books of account.

2. (i) The management has conducted physical verification of inventory at reasonable intervals during the year.

(ii) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(iii) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3. The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of para 3(iii) of the Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchases of inventory, fixed assets and for the sale of goods and services. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal control system.

5. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 73 to 76 the Act, and the rules framed thereunder.

6. As informed to us, the maintenance of cost records has been prescribed by the Central Government under Section 148(1) of the Companies Act, 2013, in respect of the activities carried on by the Company. We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under section and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

7. (i) According to the records of the Company, the

Company is generally regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Excise Duty, Service Tax, Customs Duty, value added tax, and other statutory dues applicable to it.

(ii) According to the information and explanations given to us, there are no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income tax, Sales Tax, Wealth Tax, Excise Duty, Service Tax, Customs Duty and Value Added Tax that were outstanding, at the year-end for a period of more than six months from the date they became payable.

(iii) According to the information and explanations given to us, dues of income-tax, sales tax, service tax, excise duty, customs duty and work contract tax which have not been deposited on account of any dispute are as follows:

Name of Statute Nature of Rs. in million Period to which dues amount relates

Forgings Division (erstwhile Mahindra CIE Automotive Limited)

Central Excise Act, 1944 Excise Duty 3.0 2002-03 to 2003-04

Excise Duty 6.1 2002-03 to 2003-04

Excise Duty 82 2010-11 to 2012-13

Excise Duty 1.1 2012-13

Stampings Division (erstwhile Mahindra Ugine Steel Company Limited)

Sales Tax Laws Sales Tax 30.5 2008-09, 2010-11, 2011-12

Sales Tax 96.0 2006-07, 2007-08

Central Excise Act, 1944 Excise Duty 7.1 2012-13

Excise Duty 85.3 1999-00

Service Tax 1.8 2010-11 to 2012-13

Service Tax 54.8 2008-09 to 2011-12

Casting and Magnetic Product Division (erstwhile Mahindra Hinoday Limited

Central Excise Act, 1944 Excise Duty 0.01 1999-00

Excise Duty ~097 2012-13

Excise Duty 6.9 2013-14

Excise Duty 17.7 2014-15

Service Tax 0.9 2009-10

Service Tax 3.3 2010-11 to 2012-13

Service Tax 0.9 2013-14

Service Tax 1.0 2014-15

Others Others 15.3 -

Composites Division (erstwhile Mahindra Composites Limited)

Income Tax Act, 1961 Appeals 2.7 2010-11

against Income Tax Claims

Central Excise Act, 1944 Service Tax 0.5 2009-10

Name of Statute Forum where pending

Forgings Division (erstwhile Mahindra CIE Automotive Limited)

Central Excise Act, 1944 CESTAT Mumbai

CESTAT Mumbai

CESTAT Mumbai

Additional Commissioner of Central Excise Stampings Division (erstwhile Mahindra Ugine Steel Company Limited)

Sales Tax Laws Joint Commissioner Appeals

Maharashtra Sales Tax Tribunal

Central Excise Act, 1944 Commissioner Appeals

Customs, Excise and Service Tax Appellate Tribunal

Commissioner Appeals

Customs, Excise and Service Tax Appellate Tribunal

Casting and Magnetic Product Division (erstwhile Mahindra Hinoday Limited

Central Excise Act, 1944 CESTAT

CESTAT

CESTAT

CESTAT

Commissioner Appeals

Commissioner Appeals

Commissioner Appeals

Commissioner Appeals

Others -

Composites Division (erstwhile Mahindra Composites Limited)

Income Tax Act, Commissioner of Income Tax 1961 (Appeals) - Pune

Central Excise Act, 1944 Commissioner of Central Excise and Customs (Appeals) - Mumbai

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

9. The Company does not have any accumulated losses at the end of the Financial Year and it has not incurred any cash losses in the current year and in the immediately preceding Financial Year.

10. According to the information and explanations given to us and based on the documents and records produced before us, the Company has not defaulted in repayment of dues to a financial institution, banks or debenture holders.

11. In our opinion, and according to the information and explanation given to us, there is no outstanding guarantee for loans taken by others from banks and financial institutions at balance sheet date.

12. In our opinion and according to the information and explanations given to us the term loans were applied for the purposes for which they were obtained.

13. Based on the audit procedures performed and as per the information and explanations given to us by management, no fraud on or by the Company has been noticed or reported during the year.

For B. K. Khare & Co. Chartered Accountants Firm''s Registration Number 105102W

Himanshu Chapsey Partner Membership Number: 105731

Place: Mumbai May 11,2015

Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

2. The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash ows 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

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

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s udgment, 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.

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

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

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

(b) in the case of the 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 ows for the year ended on that date.

Emphasis of matter

We draw attention to Note no. VII(7) of the financial statements and for the reasons detailed therein the management of the Company does not perceive any permanent diminution in the value of long term investment of Rs. 67,580.51 Lakhs in the wholly owned subsidiaries namely Mahindra Forgings Global Limited and Mahindra Forgings Investment Limited in view of the measures for improving financial performance being taken by the management of the Company. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Re uirements

7. As required by the Companies (Auditor''s Report) Order, 2003, as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004'', issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act (hereinafter referred to as the Order), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books

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

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956

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

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

ANNERE TO THE A DITORS'' REPORT

Referred to in paragraph (7) of our Report of even date:

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

(b) The Company has a regular programme of verification, which in our opinion, is reasonable having regard to the si e of the Company and the nature of its assets. No material discrepancies were noticed on verification.

(c) During the year, Company has not disposed of any substantial ma or part of fixed assets.

ii. (a) The Management has conducted physical verification of inventory at reasonable intervals. Confirmations have been received in respect of inventories lying with third parties. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records are not material and have been properly dealt with in the books of account.

iii. The Company has not granted or taken any loans, secured or unsecured, to or from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Therefore, the provisions of sub-clause (b), (c), (d), (e), (f) and (g) of sub-paragraph (iii) of paragraph 4 of the Order is not applicable.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the si e of the Company and nature of its business with regard to the purchase of inventory and fixed assets and sale of goods and services. During the course of our audit, no ma or weakness has been noticed in the internal controls.

v. In our opinion and according to the information and explanations given to us, there were no transactions with any party that needed to be entered in the Register maintained in pursuance of section 301 of the Companies Act, 1956. As there are no transactions in case of any party that need to be entered in the Register maintained pursuant to section 301 of the Companies Act, 1956, sub-clause (b) of sub-para (v) of Para 4 of the Order is not applicable.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA and any other relevant provisions of the Companies Act, 1956.

vii. In our opinion, the company has an internal audit system commensurate with its si e and nature of its business.

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

ix. (a) According to the records of the Company and information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-Tax, Wealth-Tax, Service-Tax, Customs Duty, cess and other material statutory dues with the appropriate authorities during the year. According to information and explanations given to us, there are no arrears of outstanding statutory dues as at 31st March 2013 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Sales Tax, Service Tax, Customs Duty, Wealth Tax, or Cess outstanding on account of any dispute as on 31st March 2013, other than disputed demands of Excise Duty and Income Tax as under:

Name of statute Nature of dues Amount in Rs. Lakhs Period to which Forum where pending amount relates

Central Excise Act Excise Duty 29.90 2003-04 CESTAT, Mumbai

Central Excise Act Excise Duty 60.98 2003-04 CESTAT, Mumbai

Income Tax Act Tax, interest thereon 10.89 2008-09 CIT (Appeals)

x. Accumulated losses of the Company at the end of the year are not more than 50 of its net worth as on 31st March 2013. The Company has not incurred cash losses in the current year as well as in the immediately preceding year.

xi. Based on our audit procedures and on the basis of information and explanations given by the management, the Company has not defaulted in the repayment of dues to financial institutions and banks.

xii. According to the information and explanations given to us, 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 nature of activities of the Company does not attract any Special Statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund Societies.

xiv. The company is not dealing or trading in shares, securities or any other investments.

xv. The Company has given guarantee of Euro 5 million (Rs. 3,474.50 Lakhs) for loan taken by its step down subsidiary Mahindra Forgings Europe AG from ICICI Bank Plc, K. Based on the information and explanations given to us and representations made to us, we are of the opinion that the terms and conditions thereof are not prima facie pre udicial to the interest of the Company.

xvi. In our opinion and according to the information and explanation given to us, term loans were applied for the purpose for which the loans were obtained.

xvii. According to information and explanations given to us, on an overall examination of the balance sheet and the Cash Flow Statement of the company, we report that funds raised on short term basis have, prima facie, not been used during the year for long term investment.

xviii. The company has not made any preferential allotment to parties and companies covered under register maintained under Section 301 of the Companies Act, 1956.

xix. The Company did not issue any debentures during the year.

xx. During the year, the Company has not made any public issue of equity shares.

xxi. Based on the audit procedures performed and as per the information and explanations given by the management, no fraud on or by the Company was noticed or reported during the year.

For B K Khare & Co

Chartered Accountants

Padmini Khare Kaicker

Partner

Membership No.: 044784

Firm Registration No. 105102W

Place : Mumbai

Date : 21st May 2013

Mar 31, 2012

1. We have audited the attached Balance Sheet of Mahindra Forgings Limited as at 31st March, 2012 and the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 the books.

c) The Balance Sheet and the Statement of Profit and Loss 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 Companies Act, 1956.

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

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

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

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

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

ANNEXURE TO THE AUDITORS' REPORT

Referred to in paragraph 3 of our Report of even date:

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

assets.

(b) The Company has a regular programme of verification, 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 verification.

(c) During the year, Company has not disposed of any substantial/major part of fixed assets.

ii (a) The Management has conducted physical verification of inventory at reasonable intervals. Confirmations have been received in respect of inventories lying with third parties. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records are not material and have been properly dealt with in the books of account.

iii. The Company has not granted or taken any loans, secured or unsecured, to or from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of sub-clause (b), (c), (d), (e),

(f) and (g) of sub-paragraph (iii) of paragraph 4 of the Order is not applicable.

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 nature of its business with regard to the purchase of inventory and fixed assets and sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

v. In our opinion and according to the information and explanations given to us, there were no transactions with any party that needed to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956. As there are no transactions in case of any party that need to be entered in the Register maintained pursuant to section 301 of the Companies Act, 1956, sub-clause (b) of sub-para (v) of Para 4 of the Order is not applicable.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA and any other relevant provisions of the Companies Act, 1956.

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

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

ix (a) According to the records of the Company and information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-Tax, Wealth-Tax, Service-Tax, Customs Duty, cess and other material statutory dues with the appropriate authorities during the year. According to information and explanations given to us, there are no arrears of outstanding statutory dues as at 31st March 2012 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Sales Tax, Service Tax, Customs Duty, Wealth Tax, or Cess outstanding on account of any dispute as on 31st March 2012, other than disputed demands of Excise Duty and Income Tax as under:

Name of statute Nature of dues Amount in Rs Lakhs Period to which Forum where pending amount relates

Central Excise Act Excise Duty 29.90 2003-04 CESTAT, Mumbai Central Excise Act Excise Duty 60.98 2003-04 CESTAT, Mumbai

Income Tax Act Tax, interest thereon 10.89 2008-09 CIT (Appeals)

x. The Company has accumulated losses, as at the end of the year, which is not more than 50% of its net worth as on 31st March,

2012. The Company has not incurred cash losses in the current year as well as in the immediately preceding year.

xi. Based on our audit procedures and on the basis of information and explanations given by the management, the Company has not defaulted in the repayment of dues to financial institutions and banks.

xii. According to the information and explanations given to us, 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 nature of activities of the Company does not attract any Special Statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund/Societies.

xiv. The Company is not dealing or trading in shares, securities or any other investments.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

xvi. In our opinion and according to the information and explanation given to us, term loans were applied for the purpose for which the loans were obtained.

xvii. According to information and explanations given to us, on an overall examination of the Balance Sheet and the Cash Flow Statement of the company, we report that funds raised on short term basis have, prima facie, not been used during the year for long term investment.

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

xix. The Company did not issue any debentures during the year.

xx. During the year, the Company has not made any public issue of equity shares.

xxi. Based on the audit procedures performed and as per the information and explanations given by the management, no fraud on or by the Company was noticed or reported during the year.

For B.K. Khare & Co.

Chartered Accountants

Padmini Khare Kaicker

Partner

Membership No.: 044784 Firm Registration No. 105102W

Place : Mumbai

Date : 25th May, 2012

Mar 31, 2011

1. We have audited the attached Balance Sheet of Mahindra Forgings Limited as at 31st March, 2011 and the profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specifed in paragraphs 4 and 5 of the said Order.

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

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 the books.

c) The Balance Sheet and the profit and Loss Account dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, the profit and Loss Account and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

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

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011,

ii) in the case of the profit and Loss Account, of the loss 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.

5. On the basis of the written representations received from the Directors as on 31st March, 2011, and taken on record by the Board of Directors, we report that, none of the Directors is disqualifed as on 31st 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.

ANNEXURE TO THE AUDITORS REPORT Referred to in paragraph 1 of our Report of even date:

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

(b) There is a regular programme of verifcation, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As explained to us, no material discrepancies were noticed on verifcation.

(c) During the year, Company has not disposed of any substantial/major part of fixed assets.

ii. (a) The Management has conducted physical verifcation of inventory at reasonable intervals. Confrmations have been received in respect of inventories lying with third parties. In our opinion, the frequency of verifcation is reasonable.

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

(c) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verifcation of inventory as compared to the book records are not material and have been properly dealt with in the books of account.

iii. The Company has not granted or taken any loans, secured or unsecured, to or from companies, frms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of sub-clause (b), (c), (d), (e), (f) and (g) of sub-paragraph (iii) of paragraph 4 of the Order is not applicable.

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 nature of its business with regard to the purchase of inventory and fixed assets and sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

v. In our opinion and according to the information and explanations given to us, there were no transactions with any party that needed to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956. As there are no transactions in case of any party that need to be entered in the Register maintained pursuant to section 301 of the Companies Act, 1956, sub-clause (b) of sub-para (v) of Para 4 of the Order is not applicable.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA and any other relevant provisions of the Companies Act, 1956.

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

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

ix (a) According to the records of the Company and information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-Tax, Wealth-Tax, Service-Tax, Customs Duty, cess and other material statutory dues with the appropriate authorities during the year. According to information and explanations given to us, there are no arrears of outstanding statutory dues as at 31st March 2011 for a period of more than six months from the date they became payable.

(b) As on 31st March 2011, according to the records of the Company and information and explanations given to us, following are particulars of disputed dues on account of income tax that have not been deposited -

Name of statute Nature of dues Amount in Rs. Lakhs Period to which Forum where pending amount relates

Central Excise Act Excise Duty 29.90 2003-04 CESTAT, Mumbai

Central Excise Act Excise Duty 60.98 2003-04 CESTAT, Mumbai

Income Tax Act Tax,interest thereon 10.89 2008-09 CIT (Appeals)

x. The Company has accumulated losses, as at the end of the year, which is not more than 50% of its net worth as on 31st March, 2011. The Company has not incurred cash losses in the current year as well as in the immediately preceding year.

xi. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions and banks.

xii. According to the information and explanations given to us, 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 nature of activities of the Company does not attract any Special Statute applicable to Chit Fund, Nidhi or Mutual benefit Fund/Societies.

xiv. The Company is not dealing or trading in shares, securities or any other investments.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions, except against loans including interest thereon amounting to Rs. 32.11 Lakhs for which the company has made adequate provision in the books of account in view of the likely default by the principal debtor.

xvi. In our opinion and according to the information and explanation given to us, term loans were applied for the purpose for which the loans were obtained.

xvii. According to information and explanations given to us, on an overall examination of the balance sheet and the Cash Flow Statement of the company, we report that funds raised on short term basis have, prima facie, not been used during the year for long term investment.

xviii. The company has not made any preferential allotment to parties and companies covered under register maintained under Section 301 of the Companies Act, 1956.

xix. The Company did not issue any debentures during the year.

xx. During the previous year, Company issued 1,62,41,300 Equity Shares to Qualifed Institutional Buyers through Qualifed Institutional Placement and to promoters in accordance to Chapter VIII of Securities & Exchange Board of India (Issue of Capital & Disclosure Requirements) Regulations, 2009. The management has disclosed in the annual accounts, the end use of money raised by the above-referred public issue and the same has been verifed by us.

xxi. Based on the audit procedures performed and as per the information and explanations given by the management, no fraud on or by the Company was noticed or reported during the year.

For B.K. Khare & Co.

Chartered Accountants

Padmini Khare Kaicker

Partner

Membership No.: 044784

Firm Registration No. 105102W

Place : Mumbai

Date : 20th May, 2011

Mar 31, 2010

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

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

3. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 the books.

c) The Balance Sheet and the Profit and Loss Account dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

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

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010,

ii) in the case of the Profit and Loss Account, of the loss 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.

5. On the basis of the written representations received from the Directors as on 31st March, 2010, and taken on record by the Board of Directors, we report that, none of the Directors is disqualified as on 31st March, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS REPORT

Referred to in paragraph 1 of our Report of even date:

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

(b) All major assets have been physically verified by the management during the year. There is a regular programme of verification, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As explained to us, no material discrepancies were noticed on verification.

(c) During the year, Company has not disposed of any substantial/major part of fixed assets.

ii. (a) The Management has conducted physical verification of inventory at reasonable intervals. Confirmations have been received in respect of inventories lying with third parties. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records are not material and have been properly dealt with in the books of account.

iii. The Company has not granted or taken any loans, secured or unsecured, to or from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of sub-clause (b), (c), (d), (e), (f) and (g) of sub-paragraph (iii) of paragraph 4 of the Order is not applicable.

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 nature of its business with regard to the purchase of inventory and fixed assets and sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

v. In our opinion and according to the information and explanations given to us, there were no transactions with any party that needed to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956. As there are no transactions in case of any party that need to be entered in the Register maintained pursuant to section 301 of the Companies Act, 1956, sub-clause (b) of sub-para (v) of Para 4 of the Order is not applicable.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA and any other relevant provisions of the Companies Act, 1956.

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

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

ix. (a) According to the records of the Company and information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-Tax, Wealth-Tax, Service-Tax, Customs Duty, cess and other material statutory dues with the appropriate authorities during the year. According to information and explanations given to us, there are no arrears of outstanding statutory dues as at 31st March 2010 for a period of more than six months from the date they became payable.

(b) As on 31st March 2010, according to the records of the Company and information and explanations given to us, following are particulars of disputed dues on account of income tax that have not been deposited -

Name of statute Nature of dues Amount Period to which Forum where in pending Rs lakhs amount relates Central Excise Act Excise Duty 29.90 2003-04 CESTAT, Mumbai Central Excise Act Excise Duty 60.98 2003-04 CESTAT, Mumbai Income Tax Act Tax, interest thereon 10.89 2008-09 CIT (Appeals)

x. The Company has accumulated losses, as at the end of the year, which is not more than 50% of its net worth as on 31.3.10. The Company has not incurred cash losses in the current year. However, in the immediately preceding financial year, the Company has incurred cash losses.

xi. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions and banks.

xii. According to the information and explanations given to us, 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 nature of activities of the Company does not attract any Special Statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund/Societies.

xiv. The Company is not dealing or trading in shares, securities or any other investments.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions, except against loans including interest thereon amounting to Rs. 139.79 lakhs for which the Company has made adequate provision in the books of account in view of the likely default by the principal debtor.

xvi. In our opinion and according to the information and explanation given to us, term loans were applied for the purpose for which the loans were obtained.

xvii. According to information and explanations given to us, on an overall examination of the balance sheet and the Cash Flow Statement of the Company, we report that funds raised on short term basis have, prima facie, not been used during the year for long term investment.

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

xix. The Company did not issue any debentures during the year.

xx. During the year, Company issued 1,62,41,300 Equity Shares to Qualified Institutional Buyers through Qualified Institutions Placement and to promoters in accordance to Chapter VIII of Securities & Exchange Board of India (Issue of Capital & Disclosure Requirements) Regulations, 2009. The management has disclosed in the annual accounts, the end use of money raised by the above-referred public issue and the same has been verified by us.

xxi. Based on the audit procedures performed and as per the information and explanations given by the management, no fraud on or by the Company was noticed or reported during the year.

For B.K. Khare & Co. Chartered Accountants Padmini Khare Kaicker (Partner) Membership No.: 044784 Firm Registration No. 105102W Place : Mumbai Dated : 12th May, 2010

Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article