Clutch Auto Ltd Auditor Reports

To the Members of, Clutch Auto Limited

Report on the Financial Statements

We have audited the accompanying financial statements of M/s Clutch Auto Limited which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow and a summary of significant accounting policies and other explanatory information for the year then ended.

Managements Responsibility for the Financial Statements

The Companys 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 financial statements that give a true and fair view of the financial position financial performance and cash flow of the company in accordance with the accounting principles generally accepted in India, including Accounting Standards specified under section 133 of the Act, read with Rule 7 of Companies (Accounts) Rules, 2014. This Responsibility includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these Financial Statements based on our audit.

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

We conducted our audit in accordance with the Standards on Auditing 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 misstatements.

An audit involves performing procedures to obtain audit evidences about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatements of the financial statements, whether due to fraud or error. In making those risk assessments the auditors consider internal financial controls relevant to the companys preparation of the financial statements that give a true and fair view in order to design audit procedure 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 accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Basis for Qualified Opinion :-

1. During the year The Company has not provided interest on the secured and unsecured loan availed by it from the Bank and Financial Institutions. Has the company would have provided Interest on the loans amounting to Rs. 24.33 crore , its net loss would have increased by Rs. 24.33 crore to Rs. 228.01 crore and loans & liability would have increased by Rs. 24.33 crore to Rs 246.66 crore.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:-

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2016;

b) in the case of Statement of Profit and Loss, of the loss for the year ended on that date; and

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

Emphasis of Matter :-

1. Without Qualifying our opinion, we draw attention to Note 3 in the Financial Statement , which indicate that the company has suffered accumulated loss of Rs. 2,398,673311 till the year ended March 31, 2016 and as of date , the Companys Total liabilities exceeds its total assets by Rs. 2,211,069011

2. During the year under review , RIICO Ltd , Jaipur has taken symbolic possession of whole Plant including Plant and Machinery Situated at Bhiwadi Plant

These conditions along with the other matter as set forth in the Note 3, indicate , the Existence of material uncertainty that may cast significant doubt about the companys ability to continue as going concern.

Report on Other Legal and Regulatory Requirements

1. As required by the companies (Auditors Report) Order, 2015 ("the Order") issued by the central government of India in terms of sub-section (11) of section 143 of the Companies Act 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by section 143(3) of the Act and Companies (Audit and Auditors) Rule 2014, 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 the Cash Flow Statements 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 7of the Companies (Accounts) Rule, 2014.

(e) In our opinion, Except the following there are no adverse observations and comments on the financial transactions of the matters which have adverse effect on the functioning of the company :-

(f) On the basis of the written representations received from the Directors as on March 31, 2016 taken on record by the board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of sub section (2) of section 164 of the Companies Act 2013.

(g) 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".

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

i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements Refer Note IV to the financial statements

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

iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

	For S C GARG &ASSOCIATES
	Chartered Accountants
Place: New Delhi	(Subhash garg)
Dated: 18.10.2016	(Partner)
	Membership No.085615
	49, Ekjot Apartment,
	Road No.44, Pitampura ,
	New Delhi-110034

"Annexure B" to the Independent Auditors Report of even date on the of M/s Clutch Auto Limited

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 M/s Clutch Auto Limited ("the Company") as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys 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 companys 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 Companys 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 "Guidance Note") 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 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.

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 auditors 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 Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companys 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 companys 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 companys 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, 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 S C GARG &ASSOCIATES
	Chartered Accountants
Place: New Delhi	(Subhash garg)
Dated: 18.10.2016	(Partner)
	Membership No.085615
	49, Ekjot Apartment,
	Road No.44, Pitampura,
	New Delhi-110034

ANNEXURE TO THE AUDITORS REPORT

(Referred to in our Audit Report of even date to the Members of CLUTCH AUTO LIMITED on the Accounts for the period ended on 31st March, 2016)

1) (a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) As explained to us all the Assets have been physically verified by the management at regular interval. As informed to us no material discrepancies were noticed on such verification.

2) (a) The inventory has been physically verified during the year by management. In our opinion, the frequency of verification is reasonable

(b) 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.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3) The company has not granted unsecured loans to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act 2013 during the year and in our opinion, hence para (a) and (b) are not applicable.

4) The Company has complied with the provisions of section 185 and 186 of the Companies Act , 2013 in respect of loans & advances , investments, made by the company during the year under review.

5) In our opinion and according to the information and explanation given to us, the company has not accepted any deposits in contravention of the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed there under, where applicable, have been complied with. No order has been passed by the Company Law Board or National Company Law Tribunal or RBI or any court or any other tribunal.

6) According to the information and explanation given to us, government has not prescribed maintenance of cost records under sub section (1) of section 148 of the Companies Act, 2013 for the products of the company.

7) (a) In our opinion the company is regular in depositing undisputed statutory dues including provident fund, employees state insurance, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues except income-tax with the appropriate authorities.

Further, since the Central Government has till date not prescribed the amount of cess payable under section 441A of the companies Act 1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

(b) According to information and explanation given to us, there are dues on account of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess, which have not been deposited on account of any dispute, details of which are as under :-

Name of the statue	Name of the dues	Amount (in Rs)	Period to which the amount relate	Status/ Forum where dispute is pending
Central Excise & Service tax	Appeal	Rs. 4,21,36,300/-	A.Y. 2007-2008	CESTAT (Appeals)
Income Tax	Appeal	Rs. 1,07,00,000/-	A.Y. 2006-2007	Hon ITAT
Central Excise & Service tax	Appeal	Rs. 3,91,00,000/-	A.Y. 2011-2012	Commissioner Excise
Haryana VAT	Appeal	Rs. 18,72,92,242/-	A.Y. 2008-09	DET
			to 2011-2012

(c) According to information and explanation given to us, there is no amount which is required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 and rules made there-under.

8) According to information and explanations given to us, the company has defaulted in repayment of dues to a financial institution, and bank during the year of audit and the overdue amount of loan as on date of balance sheet is Rs. 223,71,36,240.00

9) According to the information and explanations given to us the Company is not raised money by way of initial public offer or further public offer (including debt instruments) and term loans were applied for the purposes for which those are raised

10) Based upon the audit procedures performed and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year of our audit

11) The Company has provided / paid managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act

12) Company is not Nidhi Company, hence further reporting under this clause is not applicable

13) Company has disclosed all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards;

14) According to the information and explanations given to us the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year

15) According to the information and explanations given to us the company has not entered into any non cash transactions with directors or persons connected with him

16) According to the information and explanations given to us The company is not required to be registered under section 45IA of the Reserve Bank of India Act, 1934

	For S C GARG &ASSOCIATES
	Chartered Accountants
Place: New Delhi	(Subhash garg)
Dated: 18.10.2016	(Partner)
	Membership No.085615
	49, Ekjot Apartment,
	Road No.44, Pitampura,
	New Delhi-110034