We have audited the attached Balance Sheet of M/s. CLUTCH AUTO LIMITED,
 (hereinafter referred to as the ''Company'') as at March 31, 2012 and
 also the Profit and Loss Account and Cash Flow Statement of the company
 for the year ended on that date, annexed there to. These financial
 statements are the responsibility of the company''s management. Our
 responsibility is to express an opinion on these financial statements
 based on our Audit.
 
 We have conducted our audit in accordance with auditing standards
 generally accepted in India. Those standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by the management, as well as evaluating the overall financial
 statements presentation. We believe that our audit provides reasonable
 basis for our opinion.
 
 As required by the Companies (Auditor''s Report) Order, 2003 issued by
 the Central Government of India in terms of sub- section (4A) of
 section 227 of the Companies Act. 1956, we enclose in the Annexure a
 statement on the matters specified in paragraphs 4 & 5 of the said
 Order.
 
 Further to our comments in the Annexure referred to above, and subject
 to the exceptions in the above paragraphs, 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 account as required by law have been
 kept by the company so far as appears from our examination of those
 books.
 
 c) The Balance Sheet and the Profit and Loss Account dealt with by this
 report are in agreement with the Books of Account.
 
 d) In our opinion, the Balance Sheet and Profit & Loss Account and Cash
 Flow Statement dealt with by this report comply with the accounting
 standards referred to in sub-section (3C) of section 211 of the
 Companies Act, 1956.
 
 e) On the basis of written rset presentations received from the
 directors, as on 31 March 2012, and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 31 March 2012 from being appointed as a director in terms of clause
 
 (g) of sub-section (1) of section 274 of the Companies Act, 1956 read
 with the Companies (Disqualification of Directors under Section 274(1)
 (g) of the Companies Act, 1956) Rules, 2003.
 
 f) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read in conjunction
 with Note 1 to 24 and read with other notes appearing in Note 25 to
 26 give the information required by the Companies Act, 1956, in the
 manner so required and give a true and fair view in conformity with
 accounting principles generally accepted in India :
 
 i) In the case of the Balance Sheet of the State of Affairs of the
 Company as at 31st March, 2012 and;
 
 ii) In the case of the Profit & Loss Account of profit for the year
 ended on that date.
 
 iii) In case of the cash flow statement of the cash flows for the year
 ended on that date.
 
 Annexure to the Auditors'' Report
 
 (Referred to in Paragraph (3) of the Auditors'' Report of even date to
 the members of CLUTCH AUTO LIMITED on the financial statements for the
 year ended 31-03-2012)
 
 1) a) The Company has maintained a Fixed Assets Register, showing full
 particulars, including quantitative details, however the register does
 not include details of situation of fixed assets (other than Plant and
 Machinery substantially). Further, in case of tools and implements
 quantitative details have not been indicated in most of the cases.
 
 b) On the basis of available records and according to the information
 and explanations given to us, the fixed assets have been physically
 verified by the respective department heads once during the year,
 except for furniture and fitting, dyes and fixtures, testing & office
 equipment including those held by job work parties.  No material
 discrepancies were noticed on such verification.
 
 c) During the year, the Company has not disposed off any major part of
 the plant and machinery. According to the information and explanations
 given to us, we are of the opinion that the sale of other fixed assets
 has not affected the going concern status of the Company.
 
 2) a) The stocks of the finished goods, stores and spare parts have
 been physically verified by the management at the year end. In our
 opinion, the frequency of such verification is reasonable having regard
 to the size of the Company and the nature of its business. Further we
 are informed that in regards to stock held by job work parties''
 confirmations have been received by the company in many cases.
 
 b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of stocks followed
 by the management are reasonable and adequate in relation to the size
 of the company and nature of its business.
 
 c) The company has maintained proper records of inventory. As explained
 to us, there was no material discrepancies noticed on physical
 verification of stocks, as compared to book records.
 
 3) The company has taken unsecured loans from companies, firms or other
 parties covered by register maintained under section 301 of the Indian
 Companies Act, 1956. The maximum amount outstanding at any time during
 the year and the balance outstanding as at 31.03.2012 was Rs.  16.50
 crores.
 
 The rate of interest and other terms and conditions of the loan taken
 by the Company is not prima facie prejudicial to the interest of the
 company
 
 4) In our opinion and according to the information and explanations
 given to us, certain items purchased are of special nature for which
 suitable alternative sources do not exist for obtaining comparative
 quotations, however there is an adequate internal control system
 commensurate with the size of the company and the nature of its
 business for the purchase of inventory, fixed assets and for the sale
 of goods and services, except for MIS-ERP system used for tracking
 inventory, in which there is scope for improvement.  Further, on the
 basis of our examination of the books and records of the company, and
 according to the information and explanations given to us, we have
 neither come across nor have been informed of any continuing failure to
 correct major weaknesses in the aforesaid internal control system.
 However there is scope for improvement in the internal control
 procedure in the aforesaid areas.
 
 5) a) To the best of our knowledge and according to the information and
 explanations given to us, we are of the opinion that the particulars of
 contracts or arrangements referred to in Section 301 of the Indian
 Companies Act have been entered in the register required to be
 maintained under that section.
 
 b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements entered in the register maintained under section 301 of
 the Indian Companies Act, 1956, and exceeding the value of Rupees Five
 Lakhs in respect of any party during the year, have been made at prices
 which are reasonable having regard to the prevailing market prices at
 the relevant time where such market prices are available.
 
 6) 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 period covered by the audit report, within the meaning of
 Sections 58 A and 58 AA of the Companies Act, 1956 read with Companies
 (Acceptance of Deposits) Rules, 1975.
 
 7) A firm of M/s Puneet Mishra & Co., Chartered Accountants has
 conducted the internal audit for the period up to 31st March 2012. The
 report points out areas of weakness in internal control, inventory
 management system, MIS- (ERP) and delays in payments of statutory dues
 requiring management attention. In our opinion, and to the extent of
 audit done, the Company has an Internal Audit system commensurate with
 the size and the nature of its business.
 
 8) We have broadly reviewed the records maintained by the Cost Audit
 Department of company in respect of products where, pursuant to the
 Rules made by the Central Government of India, the maintenance of cost
 records has been prescribed under clause (d) of sub-section (1) of
 Section 209 of the Act and are of the opinion that prima facie, the
 prescribed accounts and records have been made and maintained. We have
 not, however, made a detailed examination of the records with a view to
 determine whether they are accurate or complete.
 
 9) a) According to the information and explanations given to us and the
 records of the company examined by us, in our opinion, the company is
 not regular in depositing undisputed statutory dues including investor
 education and protection fund, employees'' provident fund,
 employees'' state insurance, income-tax, sale tax, wealth tax, service
 tax, customs duty, excise duty and other statutory dues with the
 appropriate authorities. According to information and explanations
 given to us, no undisputed amount payable in respect of the aforesaid
 dues except sale tax, Income tax & employees'' state insurance
 aggregating to Rs. 437.19 lacs approx. as at 31 March 2012, which were
 outstanding for a period of more than six months from the date they
 became payable. However, liability is not ascertainable in the event of
 penalty/interest on delayed payment.
 
 b) According to the information and explanations given to us and the
 records of the company examined by us, the particulars of dues of
 excise duty and cess as at 31-03-2012 which have not been deposited on
 account of a dispute are central Excise Duty amount Rs.421.36 Lakhs
 appeals were pending in Central excise & Service Tax Appellate
 Tribunal, income tax amount Rs.23.45Lakhs appeals were pending in
 Income Tax Appellate Tribunal, Delhi and Income Tax penalty amount Rs.
 18.50 Lakhs appeals was pending in Commissioner of Income Tax
 Appeals-VI, Delhi.
 
 c) According to the information and explanations given to us and the
 records of the company examined by us, there are no other dues of
 income-tax, sales tax, wealth tax, service tax, customs duty, excise
 duty and cess which have not been deposited on account of any dispute.
 
 10) There are no accumulated losses at the end of the financial year
 and the company has not incurred any cash losses in the current
 financial year and preceding financial year.
 
 11) According to the records of the company examined by us and the
 information and explanation given to us, the company is irregular in
 repayment of certain payments to financial institution or bank or
 debenture holders as at the balance sheet date.
 
 12) The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13) The Company is not a Chit Fund, Nidhi or mutual benefit Society.
 Hence the requirements of clause (xiii) of paragraph 4 of the Order are
 not applicable to the Company.
 
 14) The company is not a dealer or trader in shares, securities,
 debentures and other investments.
 
 15) According to the information and explanations given to us, the
 company has not given any guarantee for loans taken by others from
 banks or financial institutions during the year.
 
 16) According to the information and explanations given to us, on an
 overall basis, the term loans have been applied for the purposes for
 which they were obtained.
 
 17) According to the information and explanations given to us, the cash
 flow statements examined by us and on the basis of an overall
 examination of the balance sheet of the company, in our opinion and
 according to the information and explanations given to us, there are no
 funds raised on a short-term basis which have been used for long-term
 investment and vice versa.
 
 18) According to the information and explanations given to us
 preferential allotment of 8,27,300 equity shares of Rs. 50/- each
 aggregating to Rs. 413.65 lacs including premium of Rs. 40/- per share
 has been made by the company as approved by the shareholders in EGM
 dated 01.02.2010 to companies, firms or other parties listed in the
 register maintained under section 301 of the Companies Act, 1956.
 
 19) The Company has not issued any debentures. Hence the requirements
 of clause (xix) of paragraph 4 of the Order are not applicable to the
 Company.
 
 20) The company has not raised any money by public issues during the
 year.
 
 21) During the course of our examination of the books and records of
 the company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
                                              For and on behalf of 
 
                                                  B. Aggarwal & Co.
 
                                             Chartered Accountants 
 
                                                       FRN-004706N
 
                                                         ALOK JAIN
 
                                                           Partner 
 
                                                     M. No. 510960
 
 Place: New Delhi
 
 Date: 22nd August, 2012