G S Auto International Ltd Directors Report.

To the Members of G.S. Auto International Limited Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying Ind AS financial statements of G.S. Auto International Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2020, the Statement of Profit & Loss (including other comprehensive income), Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and notes to the financial statements, including 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 Ind AS financial statements give the information required by the Companies 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 (financial position) of the Company as at March 31, 2020, and loss (financial performance including other comprehensive income), its cash flows and changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the 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 financial statements under the provisions of the Companies Act, 2013 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.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. We have determined that there are no key audit matters to communicate in our report.

Impact of COVID-19 pandemic on Going Concern assessment of the Company

Refer Note 2( c) related to "Going Concern" and Note 2(d)(v) related to "Estimation of uncertainties relating to the global health pandemic from COVID-19" of the standalone financial statements

The World Health Organization in February 2020 declared COVID 19 as a pandemic. Governments around the world including India have been taking significant measures to curb the spread of the virus including imposing mandatory lockdowns and restrictions in activities. Consequently, the Companys manufacturing plants and offices also had to be closed down for a considerable period of time, including after the year end.

These lockdowns have a significant impact on the overall economic activity in India and in particular on the automotive industry. Accordingly, the future cash flow projections used to assess going concern are subject to significant estimation uncertainties.

In view of the above, we have identified our assessment of the going concern basis of accounting as a key audit matter.

How the matter was addressed in our audit

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:

• Obtained an understanding of the Companys internal controls over its forecasting process;

• Compared the key assumptions adopted by the Company in preparing the forecasted cash flows with our expectations based on actual cash flows of 2019-20 and our understanding of the changes to the Companys business;

• Assessed the sensitivities and performed stress testing on the forecasted cash flows;

• Examined the Companys funding arrangements and evaluated the financing terms and covenants to assess its ability to renew existing loans and/or obtain additional financing if the need arises;

• Assessed the adequacy of the disclosures related to application of the going concern assumption.

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 Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss ( financial performance including other comprehensive income), cash flows and changes in the equity 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, read with the Companies (Indian

Accounting Standards) Rules 2015 as amended. 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 control, 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.

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

The Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors 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 financial statements.

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

• Identify and assess the risks of material misstatement of the 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.

• 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 Companies Act, 2013, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the 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 auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

• Obtain sufficient appropriate audit evidence regarding the financial information of the Company to express an opinion on the financial statements, of which we are the independent auditors. We are responsible for the direction, supervision and performance of the audit of financial information of the Company.

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 are required to determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors 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.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors Report) Order, 2016 ("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", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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 (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 Ind AS financial statements comply with the Indian Accounting Standards specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules 2015 as amended;

(e) On the basis of written representations received from the directors as on March 31,2020 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2020, 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 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 Ind AS financial Statements - Refer Note 37 to the financial statements.

ii. According to the information and explanations provided to us, the Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

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

For SUKHMINDER SINGH & CO.
Chartered Accountants
ICAI Firm Registration Number: 016737N
Sd/-
(Sukhminder Singh)
Place:Ludhiana Partner
st
Date: 31 July, 2020 Membership Number: 093100
UDIN:20093100AAAAFY9401

Annexure A referred to the Independent Auditors Report of even date to the members of "G.S. Auto International Limited", on the Ind AS financial statements for the year ended March 31, 2020.

Re: G.S. Auto International Limited ("the Company")

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit and to the best of our knowledge and belief, we report that:

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

b) The Company has a regular program of physical verification of its fixed assets under which fixed assets are verified in a phased manner, 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 such verification.

c) The title deeds of all the immoveable properties (which are included under the head "Property, Plant and Equipment") are held in the name of the Company

(ii) In our opinion, the management has conducted physically verification of inventory at reasonable intervals during the year. No material discrepancies were noticed on such verification.

(iii) As informed to us, the Company has not granted any loans, secured or unsecured, to any of the companies, firms, limited liability partnerships or other parties covered in the register maintained by the Company under section 189 of the Companies Act, 2013.

(iv) In our opinion the Company has complied with the provisions of Section 185 and 186 of the Act in respect of loans and investments. The Company has not given any guarantees or provided security during the year.

(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).

(vi) We have broadly reviewed the accounts and records maintained by the Company pursuant to the rules made by the Central Government, for the maintenance of the cost records under section 148(1) of the Companies Act, 2013, related to the maintenance of manufacture of auto components and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Wealth tax, Service tax, sales tax, duty of customs, duty of excise, Value Added Tax, Cess and other statutory dues including GST, as applicable to it. Further, no undisputed amounts payable in respect thereof were outstanding at the year end, for a period of more than six months from the date they became payable except in case of Provident Fund and employees State Insurance deposited after due dates in some months.

b) According to the records of the Company, the dues outstanding of the Income Tax on account of any dispute are as follows:-

Name of the Statute Nature of the dues Period to which it relates(AY) Amount (Rs Lakhs)* Forum where dispute is pending
Income tax Act, 1961 Income Tax including interest as applicable 2008-09 97.54 Commossioner (Appeals)
Income tax Act, 1961 Income Tax including interest as applicable 2009-10 23.51 Commossioner (Appeals)
Income tax Act, 1961 Income Tax including interest as applicable 2009-10 36.30 Commossioner (Appeals)
Income tax Act, 1961 Income Tax including interest as applicable 2010-11 62.23 ITAT/Commossioner (Appeals)
Income tax Act, 1961 Income Tax including interest as applicable 2011-12 94.44 ITAT/Commossioner (Appeals)
Income tax Act, 1961 Income Tax including interest as applicable 2012-13 273.11 Commossioner (Appeals)

*Net of amount deposited under protest.

(viii) The Company has not defaulted in repayment of loans or borrowings to any bank or financial institution or government.

(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) or term loans during the year.

(x) No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(xi) Managerial remuneration has been paid and provided by the Company in accordance with requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.

(xii) The Company is not a nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.

(xiii) In our opinion,all transactions with the related parties are in compliance with section 177 and 188 of the Companies Act 2013, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable Ind AS.

(xiv) During the year,the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.

(xv) In our opinion,the Company has not entered into any non-cash transactions with directors or persons connected with them covered under Section 192 of the Companies Act, 2013.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For SUKHMINDER SINGH & CO.
Chartered Accountants
ICAI Firm Registration Number: 016737N
Sd/-
(Sukhminder Singh)
Partner
Place: Ludhiana Membership Number: 093100
st
Date: 31 July, 2020 UDIN:20093100AAAAFY9401

Annexure B to the Independent Auditors Report of even date on the Ind AS financial statements of G.S. Auto International Limited

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

In conjunction with our audit of the Ind AS financial statements of "G.S. Auto International Limited" (‘the Company), as of and for the year ended March 31, 2020, we have audited the internal financial controls over financial reporting of the Company as of 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 the 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 over financial reporting. 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, 2020, 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 SUKHMINDER SINGH & CO.
Chartered Accountants
ICAI Firm Registration Number: 016737N
Sd/-
(Sukhminder Singh)
Partner
Place: Ludhiana Membership Number: 093100
st
Date: 31 July, 2020 UDIN:20093100AAAAFY9401