Report on the Ind AS Standalone Financial Statements

1. We have audited the accompanying Ind AS Standalone Financial Statements of Amtek Auto 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 and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone 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 state of affairs (financial position), profit or loss (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 Ind AS prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended, and other accounting principles generally accepted in India.

3. 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 Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

4. Our responsibility is to express an opinion on these Standalone 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 thereunder and the order issued under section 143(11) of the Act. 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 these Standalone Financial Statements are free from material misstatement.

5. 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 controls 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. 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.

6. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on these Standalone Financial Statements.

Basis for Qualified Opinion

7. Attention is invited to :

a. Note No. 3.54 (b) of the accompanying Standalone Financial Statements, stating therein that the provision for impairment has currently been worked out on the basis of value of assets referred to in the Valuation reports [of approved valuers, who valued Company’s entire assets pursuant to the requirements of Corporate Insolvency Resolution Process (“CIRP”)]; without any reference to determination of ‘value-in-use’. This is contrary to the requirements of Ind AS 36 ‘Impairment of Assets’. The monetary impact of the same has not been ascertained.

b. Note No. 3.55 (i) of the accompanying Standalone Financial Statements, stating therein that the Company has reassessed the fair value of investment made by the Company in ‘Amtek Global Technologies Pte. Ltd.’ at Rs. 64707.59 Lakhs (as against its book value of Rs. 0.07 Lakhs as at March 31, 2018) on the basis of (i) valuation reports of two approved valuers and (ii) the resolution plan, as pass-through to the existing financial creditors of the Company, with no guarantee. In the absence of latest financial statements and other financial information of the subject entity being available with the Company, we are unable to comment upon the correctness or otherwise of the value ascribed to such investment and also to its realizability.

c. Note No.3.59 of the accompanying Standalone Financial Statements, wherein it is stated that certain compliances are pending in respect of GDR Listing matter with ‘London Stock Exchange’, and initialization of delisting process. The charges if any and the consequential effects thereof for pending compliances is presently not ascertainable and as such cannot be commented upon by us.

d. Note No 3.57 (b) relating to excess managerial remuneration under Companies Act, 2013 aggregating to Rs. 3.31 Lakhs of the Vice Chairman and Managing Director for the period 01^st April, 2017 to 23^rd June, 2017. The Vice Chairman and Managing Director of the Company has resigned during the year and the Company will seek approval for non recovery of excess remuneration paid / charged to statement of profit and loss from the Ministry of Corporate Affairs with consequential penalty, if any and compounding fees as per provisions of Companies Act, 2013. Pending the same, no adjustments have been made for the amount of Rs. 3.31 Lakhs and the consequential penalty, if any, and the compounding fees. In the absence of the decision of the Ministry of Corporate Affairs pursuant to the application to be made by the Company we are unable to ascertain the impact on loss and on retained earnings on this account for the year ended 31^st March, 2018 (Refer Note 3.57(b)).

Qualified Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, except for the effects (to the extent ascertained and not) 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 including Ind AS specified under Section 133 of the Act, of the state of affairs (financial position) of the Company as at March 31, 2018, and its loss (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Material uncertainty related to going concern

9. We draw attention to Note No. 3.57 of the accompanying Standalone Financial Statements, stating therein that the resolution plan was voted upon (between April 4, 2018 and April 5, 2018) & duly approved by the Committee of Creditors and has been further approved by NCLT vide their order dated July 25, 2018 and therefore the Standalone Financial Statements have been prepared on a ‘going concern’ basis. However, the same is dependent on the successful implementation of the resolution plan. Our opinion is not modified in respect of this matter.

Other Matter

10. The comparative financial information for the year ended March 31, 2017 included in the accompanying Standalone Financial Statements was audited by M/s Manoj Mohan & Associates; whose audit report dated June 10, 2017 expressed qualified opinion. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

11. As required by the Companies (Auditor’s Report) Order, 2016 (‘the Order’) issued by the Central Government of India in terms of Section 143 (11) of the Act, we give in the “Annexure-A”, a statement on the matters specified in paragraphs 3 and 4 of the Order.

12. Further to our comments in “Annexure-A”, as required by Section143(3) of the Act, we report that:

a. We have sought and except for the matter described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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, 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. Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the aforesaid Ind AS Standalone Financial Statements comply with Ind AS Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended;

e. The matter described in the ‘Basis for Qualified Opinion’ paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;

f. The information with regard to written representations received from the directors, as on March 31, 2018 and taken on record by the Board of Directors has not been made available to us. Therefore, we are unable to comment on whether or not any 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;

g. The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above;

h. We have also audited the internal financial controls over financial reporting of the Company as on March 31, 2018 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date and our separate Report in “Annexure-B”, to this report expressed qualified opinion;

i. 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, as detailed in Note No. 3.38 of the accompanying Standalone Financial Statements, has disclosed the impact of pending litigations on its financial position;

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;

Annexure-A to Independent Auditors’ Report

Referred to in Paragraph 11 of the Independent Auditors’ Report of even date to the members of Amtek Auto Limited on the Standalone Financial Statements for the year ended March 31, 2018

1. (a) According to the information and explanations given to us and on the basis of the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that the Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets (in respect of fixed assets physically verified from external agency(ies) as required under CIRP). However, the reconciliation of Fixed Asset Register maintained prior to April 1, 2017 with books of account could not be verified as the same did not contain full particulars upto date with regard to asset-wise original cost, depreciation and written-down-value.

(b) During the year under audit, Company got all its fixed assets verified from external agency(ies) as required under CIRP. All discrepancies noticed upon such physical verification have been properly dealt with in the books of account. In the absence of formal fixed asset verification policy of the Company, we are unable to comment about the frequency of verification of the fixed assets whether reasonable having regard to the size of the Company and the nature of its assets.

(c) According to information and explanations given to us and on the basis of our examination of the records of the Company the title deeds of immovable properties are duly registered/held in the name of the Company. It may be noted that the original deeds being pledged with Financial Creditors were not made available and we have verified information from the Form C issued by financial creditors of the Company filed pursuant to the requirements of Insolvency and Bankruptcy Code, 2016 [IBC], and/or copies available with the Company.

2. According to information and explanations given to us and on the basis of our examination of the records of the Company, the physical verification in respect of inventory has been carried out by the Management at reasonable intervals including as on March 31, 2018. The discrepancies observed on physical verification of inventory were not material and the same has been properly dealt with in the books of account. In this regard, further reference is drawn to Note No. 3.41 and 3.54 (a) of the accompanying Standalone Financial Statements, wherein disclosure is made for write down of inventories owning to techno-economical reasons.

3. According to the information and explanations given to us and based on such tests which we considered necessary, we report that the Company (during the year) 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 Companies Act, 2013. Therefore the provisions of paragraph (iii) (a) of the above order are not applicable to the Company. Further, out of the loans granted in the earlier years to the parties covered in the register maintained under section 189 of the Companies Act 2013, there is no stipulation with regard to the repayment of principal/interest on loan, therefore we are unable to express our opinion with regard to paragraph (iii) (b) and (iii) (c) of the said order.

4. 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 Companies Act, 2013, with respect to the loans, investments, guarantees and security, as applicable.

5. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public during the year under audit. Therefore, directives issued by 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 are not applicable to the Company.

6. The Central Government has prescribed the maintenance of cost records under section (1) of section 148 of the Companies Act, 2013, for certain products manufactured by the Company and on the basis of records produced before us for our verification; we are of the opinion that, prima facie, the prescribed accounts and cost records are not complete. However, we have not carried out any detailed examination of such accounts and records.

7. (a) On the basis of records of the Company examined by us, in our opinion, undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, cess have not been regularly deposited with the appropriate authorities and there have been delays in a large number of cases. Undisputed amounts payable in respect thereof, which were outstanding at the year-end for a period of more than six months from the date they became payable are as follows:

Statement of Arrears of Statutory Dues Outstanding for More than Six Months.

(b) The dues outstanding in respect of income-tax, sales-tax, service-tax, duty of customs, duty of excise and value added tax on account of any dispute, are as follows:

Statement of disputed dues

8. The Company has defaulted in repayment of loans and borrowings to the banks and financial institutions and towards debenture holders during the year. Pursuant to the continuing defaults of the Company, a corporate insolvency resolution process (‘CIRP’) under The Insolvency and Bankruptcy Code, 2016 (‘IBC’) was initiated against the Company vide an order of the Principal Bench of the National Company Law Tribunal (‘NCLT’) dated July 24, 2017. Accordingly, no payments could be made thereafter to the banks, financial institutions and debenture holders, until the resolution process is concluded. The details of outstanding amounts as on July 24, 2017 is as follows:

The Company has not taken any loan from Government.

9. In our opinion and according to the information and explanations given to us, the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year. However the moneys raised by way of term loans during the year have been applied for the purpose for which those were raised.

10. According to the information and explanations given to us, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year.

11. According to the information and explanations given to us, and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 of the Companies Act, 2013 read with Schedule V to the Companies Act, 2013 except for the remuneration paid/provided to Company’s Executive Vice Chairman and Managing Director who has resigned during the year and the excess remuneration paid to him over the requisite approvals during the period of the service cannot be recovered from him and the Company will accordingly seek approval of writing off the same from the Ministry of Corporate Affairs (Refer Note 3.57(b)).

12. According to the information and explanation given to us, the Company is not a Nidhi Company. Therefore the provisions of paragraph 3(xii) of the Order are not applicable to the Company.

13. According to the information and explanations given to us, and based on our examination of the records of the Company, transactions with the related parties are in compliance with section 177 and 188 of the Companies Act, 2013.The details of such transactions have been disclosed in the Standalone Financial Statements as required by the applicable Ind AS.

14. According to the information and explanations given to us, the Company has not made preferential allotment or private placement of shares or fully or partly convertible debentures during the year under audit. Therefore, the provisions of paragraph 3(xiv) of the Order are not applicable to the Company.

15. According to information and explanations given to us, and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or person connected with him. Accordingly, provisions of paragraph 3 (xv) of the Order are not applicable to the Company.

16. 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-B to Independent Auditors’ Report

Referred to in Paragraph 12(g) of the Independent Auditors’ Report of even date to the members of Amtek Auto Limited on the Standalone Ind AS Financial Statements for the year ended March 31, 2018

Independent Auditor’s Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act’)

1. In conjunction with our audit of the Standalone Ind AS Financial Statements of Amtek Auto Limited (‘the Company’) as at and for the year ended March 31, 2018, we have audited the internal financial controls over financial reporting of the Company as at that date.

Management’s Responsibility for Internal Financial Controls

2. The Company’s Board of Directors 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 the Company’s business, including adherence to the 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.

Auditor’s Responsibility

3. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India (‘ICAI’) and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls over financial reporting, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (‘the Guidance Note’) 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 control 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 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 over financial reporting. Meaning of Internal Financial Controls over Financial Reporting.

6. A Company’s internal financial controls 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 Company’s I internal control over financial reporting include 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 authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised 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

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 controls over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

8. According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified as at March 31, 2018:

The Company did not have an appropriate and proper internal control system to determine the recoverable amount of ‘value-in-use’ to assess the impairment provision of assets on timely basis, valuation of inventories with regard to deficient inventory records, non-maintenance of detailed fixed assets register prior to April 1, 2017 which may potentially result in Company recognizing inventory at incorrect amounts and impairment of assets not being recognized at correct amount or on timely basis.

A ‘material weakness’ is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In our opinion, except for the possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has, in all material respects, maintained adequate internal financial controls over financial reporting as of March 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, and the Company’s internal financial controls over financial reporting were operating effectively as of March 31, 2018.

We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the Standalone Financial Statements of the Company as at and for the year ended March 31, 2018, and the material weakness has affected our opinion on the standalone financial statements of the Company and we have expressed a qualified opinion on the Standalone Financial Statements.

For SCV & Co. LLP

(formerly known as S.C. Vasudeva & Co.)

Chartered Accountants

Firm Regn No.000235N/N500089

(Abhinav Khosla)

Place : New Delhi Partner

Date : November 12, 2018 Membership No. 087010