Autoline Industries Ltd Auditors Report.

Independent Auditors’ Report To The Members of Autoline Industries Limited Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of AUTOLINE INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2018; the Statement of Profit and Loss (including Other comprehensive income), the Cash Flow Statement, the Statement of changes in Equity for the year then ended, a summary of significant accounting policies and other explanatory information

Management’s responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the

Act") with respect to the preparation and presentation of these standalone Ind AS financial statements that 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

(Indian Accounting Standards) Rules, 2015 as amended under Section 133 Accounting Standards specified of the Act. 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 Ind AS financial statements that give a true and fair view and are free from material misstatements, whether due to fraud error .

Auditor’s Responsibility

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

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.

We conducted our audit of the 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 Ind AS financial statements are free of material misstatement An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the 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 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 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 Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and the standalone Ind AS financial statements

Opinion

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 March 31, 2018, and its loss (including other comprehensive income), its cash flows and changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor’s Report) Order, 2016 issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, (hereinafter referred to as the "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 Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the

2) As required by Section 143 (3) of the Act, we report that:-

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

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

c) the Balance Sheet, the Statement of Profit and Loss (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 March 31, 2018 taken on record by the Board of Directors, none of the Directors is disqualified as on March 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in‘ Annexure . B’

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

i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements. (Refer Note No.32 to the Ind AS financial statements)

ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses for the year ended March 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 March 31, 2018.

FOR A. R. SULAKHE & CO

CHARTERED ACCOUNTANTS

FRN: - 110540W

ANAND SULAKHE

PARTNER

M. NO.33451

Place : Pune

Date : May 30, 2018

Annexure A to the Independent Auditors’ Report:

The Annexure referred to in our Independent Auditors’ Report to the members of the Company on the standalone Ind AS financial statements for the year ended 31 st March, 2018, we report that: i) a) The company has maintained proper records showing full particulars, including quantitative details and situations of its Fixed Assets. b) According to the information and explanation given to us, the company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year. In our opinion, this periodicity of physical verification is reasonable having regards to the size of the Company and the nature of its business and no material discrepancies have been noticed on such physical verification c) According to the information and explanation given to us and on the basis of our examination of the records of the company, except for the following four cases, the title deeds were held in the name of the company.

Rs. In lakhs

Sr. No. Particulars Whether Leasehold Or Freehold Gross Block As On Balance Sheet Date Remarks
1. Khasra no. 423, SIDCUL, Plot no.5 Uttarakhand Leasehold 22.86 Lease Deed is held in the name of
2. Khasra no. 423, SIDCUL, Plot no. 8 Uttarakhand Leasehold 134.48 M/s Nirmiti Auto components Pvt. Ltd. which was amalgamated with the company
3. E 12, 17(8), Bhosari, Pune Maharashtra Leasehold 83.04
4. E 12 (7), Bhosari, Pune Maharashtra Leasehold 232.05

ii) a) The inventories have been physically verified at reasonable intervals management bythe 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 reasonable and adequate in relation to the size of the company and the nature of business and discrepancies observed were properly dealt with in the books of accounts. iii) The company had granted loan to one party covered in the register maintained under section 189 of the companies Act, 2013 amounting to Rs. 107,983,633 and the loan was repaid during the financial year concerned. a) In our opinion, the rate of interest and other terms and conditions on which the loan had been granted to the party listed in the register maintained under section 189 of the Act were not, prima facie, prejudicial to the interest of the company. b) Since loan was repayable on demand clause (b) and (c) are not commented by us. iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investment made. v) The company has not accepted any deposit from public. vi) As per information and explanations given to us, the Central Government has not prescribed maintenance of cost records as required under sub section (1) of Section 148 of the Companies Act, 2013. vii) a) According to the records, the Company is regular in depositing undisputed statutory dues in respect of duty of customs, income-tax, However undisputed statutory dues including employees’ state insurance, provident fund, duty of excise, sales-tax, service tax, value added tax, Goods & service tax, cess, local body tax and other statutory dues have not been regularly deposited with the appropriate authorities and there have been delays in depositing the same.

According to the information and explanations given to us and according to the books and records as produced and examined by us, following undisputed statutory dues were in arrears as at 31 March 2018 for a period of more than six months from the date they became payable.

Name of statutory dues Nature of dues Amount (in Rs. ) Period to which it relates Whether paid before balance sheet singing
1 Maharashtra Municipal Corporation Act-1949 LBT 4,65,76,482/- October 2013 to June 2017 No
2 Employees Provident Funds & Miscellaneous Provisions Act, 1952 Provident Fund 59,920/- April 2017 to August 2017 No
3 Central Excise Act, 1944 Excise Duty 19,02,837/- April 2017 and May 2017 No

b) According to the information and explanations given to us and on the basis of our examination of books of accounts, there are no cases of dues of income tax, goods & service tax, sales tax, duty of customs, duty of excise, value added tax and cess as at 31st March 2018 which have not been deposited on account of disputes except for the following: -

Name of the Statute Nature of Dues Forum where Dispute is pending Period to which the amount relates Tax Amount involved ( Rs. )
Income Tax Act, 1961 Income Tax Income Tax Appellate Tribunal F.Y. 2009-10 8,26,620/-**
Income Tax Act, 1961 Income Tax Income Tax Appellate Tribunal F.Y.2011-12 2,18,780/-
The Maharashtra Value Added VAT / CST The Joint F.Y. 2000-01 24,44,440/-
Tax Act, 2002 / Central Sales Tax Commissioner F.Y. 2001-02 4,42,721/-
Act, 1956 of Sales Tax F.Y. 2006-07 5,02,02,066/-
(Appeals) F.Y. 2008-09 3,78,58,311/-
F.Y.2009-10 49,82,954/-*
F.Y.2010-11 1,12,46,257/-
The Uttarakhand Value Added Tax VAT / CST The Jt. F.Y. 2012 -13 26,17,759/- *
Act 2005 Commissioner of
Commercial Taxes
The Uttarakhand Value Added Tax VAT / CST The Jt. F.Y. 2013 – 14 46,59,711/- *
Act 2005 Commissioner of
Commercial Taxes
The Maharashtra Value Added VAT/CST Dy. Commissioner F.Y. 2007-08 12,54,78,819/-
Tax Act, 2002 / Central Sales Tax of Sales Tax F.Y.2012-13 3,20,29,880/-
Act, 1956 F.Y.2012-13 13,30,78,630/-
Central Sales Tax Act, 1956 CST The Jt. Commissioner of Commercial Taxes F.Y. 2007-08 41,91,200/- *
Central Sales Tax Act, 1956 CST The Jt. Commissioner of Commercial Taxes F.Y. 2013-14 2,28,87,691/-
The Maharashtra Value Added Tax Act, 2002 VAT The Jt. Commissioner of Commercial Taxes F.Y. 2013-14 3,34,44,323/- *
The Maharashtra Value Added Tax Act, 2002 WCT The Jt. Commissioner of Commercial Taxes F.Y. 2013-14 87,33,143/- *

* Amounts paid under protest have been reduced from the amount of demand in arriving at the aforesaid disclosure. ** Amount is deposited under protest viii) According to the information and explanations given to us, and based on documents and records verified by us in our opinion, company has defaulted in repayments of loans to Banks and Financial Institutions. The details of default as on March31, 2018 are as follows: -

Rs. In Lakhs

Amount of Default as on 31.03.2018 Period of default
Particulars
A Banks

Principle

Interest

1 Bank of Baroda

155.27

104.80

Less than 3 months
2 Axis Bank Ltd

-

11.54

Less than 3 months
3 The Catholic Syrian Bank Ltd

10.00

6.77

Less than 3 months
B Financial Institutions
1 J M Financial A R C Pvt. Ltd.

158.45

129.91

Less than 3 months

475.34

384.28

More than 3 months
2 Tata Motors Finance Solution Ltd

-

9.04

Less than 3 months

ix) The company did not raise money by way of initial public offer or further public offer (including debt instrument)

Accordingly, paragraph 3 (ix) of the order is not applicable, further term loans taken during the year were applied for the purpose for which they were raised. x) According to information and explanation given to us , no fraud by the company or fraud on the company by its officers or employees has been noticed or reported to us during the year by the management. xi) According to information and explanation given to us and based on our examination of the records, 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 for the year under consideration.

Also, for the previous three years, the company has filed application for approval of Central Government for amount paid/ provided towards managerial remuneration as required by the provisions of section 197 read with schedule V of the Act, amount involved was Rs. 180,00,000/- Company has obtained personal guarantee letter as a security of the said amount. xii) In our opinion and according to the information and explanations given to us, the company is not a nidhi company. Accordingly, paragraph 3(xii) of the order is not applicable.

xiii) According to the information and explanations given to us and based on our examinations of the records of the company, transactions with the 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.

xiv) The company had made preferential allotment of shares during the year under review and the requirements of section 42 of the Companies Act, 2013 have been complied with and the amount raised has been used for the purposes for which the funds were raised. xv) According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transaction with directors or persons connected with it. Accordingly, paragraph 3(xv) of the order is not applicable xvi) 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.

FOR A. R. SULAKhE & CO

ChARTERED ACCOUNTANTS

FRN: - 110540W

ANAND SULAKhE

PARTNER

M. NO.33451

May 30, 2018

Pune

‘ANNEXURE B’ TO THE INDEPENDENT AUDITORS’ REPORT

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

We have audited the internal financial controls over financial reporting of AUTOLINE INDUSTRIES LTD ("the Company") as of March 31, 2018 in conjunction with our audit of the Ind AS financial statements of the company for the year ended on

Management’s Responsibility for Internal Financial Controls

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 Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting of the company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those 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 were established and maintained and whether 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 auditor’s judgment, including the assessment of the risks of material misstatement of the IND AS 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 Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

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 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 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 March 31, 2018, however company is required to strengthen its financial controls for obtaining balance confirmations from trade receivables and payables 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).

FOR A R SULAKHE & CO.

CHARTERED ACCOUNTANTS

Firm Registration No 110540W

ANAND SULAKHE

PARTNER

Membership No: 33451

Date:- May 30, 2018

Place: - Pune