Management's Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows 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") read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

An audit involves performing procedure to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risk of material misstatement of the financial statements, whether due to fraud and 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, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. An audit also includes evaluating and 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 audit opinion.

Opinion

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

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

(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 flows for the year ended on that date. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the annexure a statement on the matters specified in the paragraphs 4 and 5 of the Order.

2. 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 accounts 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, Statement of Profit & 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 sub-section (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act 2013; and

(e) On the basis of written representations received from the directors as on 31st March, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2014, 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 Auditors Report

Annexure referred to in Paragraph 1 of Report on Other Legal and Regulatory Requirements of the Auditors Report to the members of Automobile Products of India Limited for the year ended 31st March 2014.

As required by the Companies (Auditors Report) Order, 2003 and amendments thereto and according to the information and explanations given to us during the course of the audit and on the basis of such checks of the books and records as were considered appropriate we report that:

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

b) As explained to us, all the fixed assets have been physically verified by the management at the year end, which in our opinion is reasonable, considering the size and the nature of business. The frequency of verification is reasonable and no material discrepancies have been noticed on such physical verification.

c) During the year, the Company has not disposed off any fixed assets.

(ii) Since the Company does not have any inventory at the year end, clause 4 (ii) of the said Order is not applicable to the Company.

(iii) a) During the year the Company has not granted any secured or unse, uou loan to any party covered in the registered maintained under section 301 of the Companies Act, 1956.

b) In view of our comments in para (a) above, clauses 4 (iii) (b), (c) and (d) of the said Order are not applicable to the Company.

c) The Company has taken unsecured loans from 2 parties covered in the register maintained under section 301 of the Act. The maximum amount outstanding during the year was Rs. 5,80,30,783 and the year end balance was Rs. 5,71,19,138.

d) The rate of interest and other terms and conditions on which the loans have been taken are prima facie, not prejudicial to the interest of the Company.

e) In view of our comments in para (c) & (d) above, clause 4 (iii) (g) of the said Order is not applicable to the Company.

(iv) In our opinion and according to the information and explanation given to us there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

(v) (a) Based on the audit procedures performed by us, we are of the opinion that particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained in that section.

(b) The transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) The Company does not have a formal internal audit system. However, the existing Internal Control measures are commensurate with its size and nature of business..

(viii) As per explanation & information given to us, the Central Government has not prescribed for maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 for the Company.

(ix) a) According to the records of the Company, the undisputed statutory dues including Provident Fund, Income tax, Sales tax, Wealth tax, Service tax, Customs Duty, Excise Duty, and Cess, to the extent applicable to the Company, have been regularly deposited with the appropriate authorities. According to the information and explanations given to us, there are no undisputed amount payable in respect of such statutory dues which have remained outstanding as at 31st March, 2014 for a period more than six months from the date they became payable.

b) According to the information and explanations given to us, disputed dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been deposited on account of disputes with the related authorities are as under.

Nature of Liability     Amount         Period to which   Forum at which 
                         (Rs.)         matter pertains   dispute is
                                                         pending

Income Tax             16,58,948       A.Y. 2003-04      ITAT
                    12,14,46,007       A.Y. 2008-09      ITAT 

(x) The Company has accumulated losses at the end of the financial year exceeding 50% of its net worth. The Company has not incurred cash losses in the current financial year. However it had incurred cash losses in the immediately preceding financial year.

(xi) The Company has not obtained any facilities from banks and financial institutions.

(xii) The company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

(xiii) The provisions of any Special Statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund/ Societies are not applicable to the Company.

(xiv) According to the information and explanation given to us the Company is not dealing or trading in shares, securities, debentures or other investments.

(xv) The Company has not given any guarantee for loans taken by others from banks and financial institutions.

(xvi) The Company has not obtained any term loan during the year.

(xvii) On an overall examination of the balance sheet of the Company, we report that the Company has used funds to the extent of Rs. 8,45,80,835 raised on short term basis for long term purposes and financing of operating losses.

(xviii) The Company has not made any preferential allotment of shares during the year.

(xix) The Company has not issued any debentures during the year.

(xx) The Company has not raised any money by way of public issue during the year.

(xxi) Based upon the audit procedures performed and according to the information and explanations given and representations made by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

                                                For SGCO&Co.
                                                Chartered Accountants 
                                                Firm Reg. No. 112081W

                                                Suresh Murarka
                                                Partner
                                                Mem. No. : 44739