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Auditor Report of Advanced Micronic Devices Ltd.

Mar 31, 2015

We have audited the accompanying (standalone) financial statements of Advanced Micronics Devices Limited ("the Company") which comprises the Balance Sheet as at March 31, 2015, and the Statement of Profit and Loss for the year then ended, and the cash flow statement for the year ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the (Standalone) Financial Statements

The company's Board of Directors are responsible for the matters stated in section 134(5) of the companies act 2013 ("the Act") with respect to preparation and presentation of these financial statements that give a true and fair view of the financial position and financial performance and cash flow of the Company in accordance with the Accounting Standards referred to under section 133 Of The Companies Act 2013 read with Rule 7 of the companies (Accounts) Rule 2014. This responsibility includes the maintenance of adequate accounting records in accordance with 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 judgment 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 accounting records, relevant to the preparation and presentation of the financial statements that gives 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 standalone financial statements based on our audit.

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

We conducted our audit in accordance with the Standards on Auditing specified under subsection 10 of section 143 of the Act. 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 procedures to obtain audit evidence about the amounts and 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 control relevant to the Company's preparation 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 whether the company has place an adequate internal financial controls system over financial reporting and 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 the Company's Directors, 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 course of audit we have observed that company has stock Of Terminal and Multi Para Patient Monitors was nonmoving resulted in not being sold aggregating to Rs.18.44 crores.

2. Similarly we have also noticed bills receivable amounting to Rs.17.79 crores are not realized for more than 360 days as on March 2015 continue to be unrealized as on September 2015.

Which includes non-moving stock and unrealized Debtors covered under stock audit report of Subhas Patil & Co , for financial year 2013-14 a firm of independendent chartered accountants appointed by State Bank of India . We had qualified our audit report regarding nonmoving stock terminals and multi Para patient monitors not being sold amounting to Rs.17.47 crores and Rs.19.67 crores long outstanding receivables for more than 180 days for the financial year 2013-14.

In response to our qualification , the management had given reply that they will modify the terminals and multi Para patient monitors and sell them in developing countries. On perusal of balance sheet of the company, position remains the same as on the date of report.

Also Company has not obtained confirmation of balances of debtors outstanding as on 31.03.2015.

Accordingly company has not made provision for bad and doubtful debts .

Had the same been accounted for the net loss for the year ended 31.03.2015 would have been higher by Rs.36.23 crores and Net worth of the company would have been negative.

3. We also observed that Company has a branch at U S A. This branch has not been audited by any other independent auditors for any financial year and also the company has not produced any records for our verification to check the correctness of the entries. These entries are certified by management, where in the branch share of assets are Rs.5.42 crores Our report in so far it relates to the amount included in respect of the branch is based solely on financial statements certified by the branch management. In the absence of independent audit we are unable to comment on correctness of unaudited results of the above mentioned branch..

4. During financial year 2013-14 , the Indian subsidiary , Advanced Micronics Devices Limited had opted for VCES scheme under service tax act for its service tax liability outstanding for the period October 2007 to December 2012 . This pertains to its Delhi branch and Bangalore branch. However during the survey conducted by service tax intelligence at its Delhi branch on 29/6/2013 , it was found that the company had utilized canvas credit of Rs.0.80 crores for payment of service tax liability of Delhi branch under VCES scheme. This credit was disallowed by service tax intelligence and the company was issued a Show cause notice. The company has filed a reply before Commissioner of Service tax Delhi. If the reply is not favorable to the company, company will be liable to pay interest and penalty on such amount. Under such circumstances they are not eligible for claiming benefit under VCES Scheme.

Whereas in Bangalore branch they have accepted not claiming canvas credit for payment of service tax liability under VCES scheme. There is variance in two VCES applications. We are Opinion that VCES application may be disallowed at Delhi branch and company may land up in huge penalty. To that extent there is a contingent liability on the company.

5. company has stopped its business operation since July 2015.

All the above conditions raise substantial doubt about the company, ability to continue as a going concern

Qualified Opinion

Subject to above, in our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements gives 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, 2015;

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

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

Report on other Legal Regulatory Requirement

1. As required by Companies (Auditors Report)Order 2015 ("the order")issued by the central government of India in terms of section 143(11) of the Act we give in annexure a statement on the matters specified in paragraph 3 and 4 of the Order to the extent applicable.

2. 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 appears from our examination of those books.

c) The Balance Sheet, Statement of Profit and Loss and cash flow statement , dealt with by this Report are in agreement with the books of account.

d) Subject to qualification in respect of debtor and stock in our opinion the afore said financial statements comply with the Accounting Standards specified of section 133 Of The Companies Act 2013 read with Rule 7 of the companies (Accounts) Rules 2014.

e) On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2015, from being appointed as a director in terms of section 164(2) of the Act

f) 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 does not have any pending litigations which would impact its financial position;

ii. The company did not have any long term contracts for which there were any material foreseeable losses; and

iii. there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the company.

For An and Amaranth and Associates Chartered Accountants

B K Amarnath

Partner Membership No. :026536 FRN: 000121S Place: Bangalore Date : 1st December 2015

(Referred to in our Report of even date on the accounts of Advanced Micronics Devices Limited, Bangalore for the year ended 31st March 2015)

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

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

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification .

2. (a) We are informed that the physical verifications of inventories were conducted by the management at reasonable intervals.

In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories 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 has maintained proper records of inventories. Subject to qualification about nonmoving stock amounting to Rs. 18.44 crores , according to the records produced to us, no discrepancies were noticed on verification between physical stocks and stock records.

3. (a) As per the explanation given to us the Company has not granted any secured or unsecured loans to the Parties listed in the register maintained under section 189 of the Companies Act

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. The Company has not accepted any deposits from the public .

6. Since the company is involved in trading activity only, the Central Government has not prescribed maintenance of cost records under section 148 (1) of the Companies Act, 2013 for any product of the company.

7 (a) On the basis of records produced before us, the Company has generally not been regular in depositing undisputed statutory dues like, Employees State Insurance , Provident Fund, Income Tax, Service Tax, etc. According to the information and explanations given to us, there are no undisputed amounts payable in respect of, Customs Duty, Excise Duty, Income tax except below mentioned statutory dues.

(Rs. in crores)

Service Tax 0.11

Dividend distribution tax 0.31

Provident Fund 0.01

ESI 0.07

Tax deducted at source -other than on salary 0.05

Tax deducted at source on salary 0.35

VAT 0.21

Total 1.11

which were outstanding as on 31st March 2015 for a period of more than six months from the date on which they became payable

(b) According to the information and explanations given to us, there is no amounts payable in respect of income tax, wealth tax, service tax, sales tax customs duty and excise duty which have not been deposited on account of any disputes.

8. The Company does not have any accumulated loss , but has incurred cash loss of Rs.1.96 crores during the financial year covered by our audit .

9. During the year, the company did not have any outstanding dues to financial institutions and banks.

10. In our opinion and according to the information and explanations given to us, the Company has given any guarantee for any loans.

11. According to the information and explanations given to us company has not obtained any term loans for the period covered under the audit.

12. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For Anand Amarnath and Associates

Chartered Accountants



B K Amarnath

Partner

Membership No. :026536

FRN: 000121S

Place: Bangalore

Date : 1st December 2015


Mar 31, 2014

We have audited the accompanying financial statements of Advanced Micronic Devices Limited, which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

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 procedures to obtain audit evidence about the amounts and 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 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. 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 audit opinion.

Opinion

1. During the year State Bank of India appointed Subhas Patil & Co a firm of independent Chartered Accountants to conduct stock audit. And they have submitted their report on 20.05.2014 stating that stock of Terminal and Multi Para Patient Monitors were non moving resulted in not being sold aggregating to Rs.1747 lacs. Also the company has not assessed realisable value of the non-moving stock out of Rs.1747 lacs. Accordingly the company has not provided for loss on nori-moving stock

2. Similarly stock auditors have also notified that bills receivable amounting to Rs.1967 lacs are not realised for more than 180 days. The company has not made proper assessment of the amount realisable from the above mentioned debtor. Accordingly company has not made provision for bad and doubtful debts.

Accordingly the net loss for the year has been understated to that extent, and reserves and surplus, stock and debtors have been overstated by such amount.

3. We also observed that Company has a branch at U S A. This branch has not been audited by any other independent auditors for any financial year and also the company has not produced any records for our verification to check the correctness of the entries. These entries are certified by the management, where in the branch share of assets Rs.593.81 lacs.. Our report in

so far it relates to the amount included in respect of the branch is based solely on financial statements certified by the branch management. In the absence of independent audit we are unable to comment on the correctness of unaudited results of the above mentioned branch.. .

4. Company has not obtained confirmation of balances of debtors outstanding as on 31.03.2014.

Subject to above 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 March 31,2014;

b) in the case of the Statement of Profit and Loss Account, 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.

Report on other Legal Regulatory Requirements

1. 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 Act, we give in the Annexure a statement on the matters specified in 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 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, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) Subject to qualification in respect of debtor and stock in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (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;

e) on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(The Annexure referred to in our Report of even date on the accounts of Advanced Micronic Devices Ltd for the year ended 31 st March 2014)

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of odr audit, we report that:

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

(b) Physical verification of Fixed Assets is performed by the management in a regular programme for verification once in a year. In our opinion, the frequency of verification is reasonable, having regard to the size and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, no substantial part of fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

2. (a) We are informed that the physical verifications of inventories except inventories lying with the third parties were conducted by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories 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 has maintained proper records of inventories. Subject to qualification in the audit report about non moving stock amounting to Rs.1747 lacs as noticed by stock auditor appointed by State Bank of India, no discrepancies were noticed on verification between physical stocks and stock records for which company has not made any provisions.

3 (a) As per the explanation given to us the Company has not given any loans to the parties listed in the register maintained under section 301 of the Companies Act 1956.

(b) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has taken loan amounting to Rs.1641.04 lacs from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.Expect for loan taken from its Holding Company(Opto Circuits(india) Ltd and from Opto infranstructure india ltd, for other parties company is paying interest at the rate of 12% P A. The rate of interest and other terms and conditions of such loans given are not prejudicial to the interest of the Company

4 In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5 (a) According to the information and explanation given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(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 Companies Act, 1956 and exceeding Rs. 5,00,000 in respect of each party during the year have been made at prices which are reasonable having regard to the prevailing market price at the relevant time

6 The Company has not accepted any deposits from the public covered under section 58A of the Companies Act, 1956.

7 As per information & explanations given by the management, the Company has an internal audit system commensurate with its size and the nature of its business.

8 Since the company is involved in trading activity only, the Central Government has not prescribed maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 for any product of the company.

9 On the basis of records produced before us, the Company has generally not been regular in depositing undisputed statutory dues like, Employees State Insurance , Provident Fund, Income Tax, Service Tax, etc. According to the information and explanations given to us, there are no undisputed amounts payable in respect of, Customs Duty, Excise Duty,Income tax except below mentioned statutory dues

(Rs. in. Lakes) Service Tax 124.60

Dividend distribution tax 31.12

Provident Fund 39.73

ESI 2.36

Income tax demand for AY 2011-12 9.58

Tax deducted at source -other than on salary 8.65

Tax deducted at source on salary 17.57

Total 233.61

which were outstanding as on 31st March 2014 for a period of more than six months from the date on which they became payable

10 The Company does not have any accumulated loss, but has incurred cash loss amounting to Rs. 480.23 lacs during the financial year covered by our audit. Based on the stock audit conducted by the Independent auditors the company has not assessed realisable value of the non-moving stock out of Rs. 1747 lacs. Accordingly the company has not provided for loss on non-moving stock.

Similarly stock auditors have also notified bills receivable amounting to Rs.1967 lacs as not realised for more than 180 days which has been identified by them as non realisable. The company has not made proper assessment of the amount realisable from the above mentioned debtor. Accordingly company has not made provision for bad and doubtful debts.

11 During the year, the company has not taken additional Term Loan from Banks/Financial Institutions, However it has not defaulted in repayment of its dues to financial institution.

12 In our opinion and according to the information and explanations given to us, and based on the documents and records produced to us, 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 In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special status applicable to Chit-Fund and Nidhi / Mutual Benefit Fund/ Societies, accordingly clause 4 (xii) of the order is not applicable.

14 In our opinion, the Company is not dealing or trading in shares, securities, debentures or other investments and hence, the requirement of Clause 4 (xiv) of the order is not applicable to the company.

15 Since the company does not have any subsidiary the question of giving guarantee for loans taken by its subsidiary does not arise, accordingly clause 4(XV) of the order is not applicable.

16. In our opinion and based on information and explanations given to us by the management, term loans have been applied for the purpose for which they were obtained.

17 According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long term purpose. No long-term funds have been used to finance short-term assets.

18 The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the companies Act 1956,

19 During the year the company has not issued debentures during the financial year.

20 The Company has not raised any money by public issue during the year.

21 Subject to qualification in audit report, based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For Anand Amarnath & Associates Chartered Accountants FRN : 000121S B K Amarnath Place: Bengaluru Partner Date: 30.05.2014 Membership No: 026536


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Advanced Micronic Devices Limited, which comprise the Balance Sheet as at March 31,2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

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. 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 procedures to obtain audit evidence about the amounts and disclosures in the financial statements. Tlie 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 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. 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 audit opinion.

Opinion

1. During March 2013 State Bank of India appointed B & N Pai & Co a firm of independent Chartered Accountants to conduct stock audit. During the course of stock audit .auditors have observed that stock of Terminal and Multi Para Patient Monitors were non moving resulted in not being sold aggregating to Rs. 1685.18 lacs. Also the company has not assessed realizable value of the non-moving stock out of Rs. 1685.18 lacs. Accordingly the company has not provided for loss on non-moving stock

2. Similarly stock auditors have also notified bills receivable amounting to Rs. 1522.54 lacs as not realized for more than 180 days. Tlie company has not made proper assessment of the amount realizable from the above mentioned debtor. Accordingly company has not made provision for bad and doubtful debts.

3. We also observed that Company has a branch at U S A. This branch has not been audited by any other independent auditors and also the company has not produced any records for our verification to check the correctness of the entries. Tliese entries are approved by management, where in the branch share of profit aggregate to Rs. 92.80 lacs and assets Rs. 856.27 lacs.. Our report in so far it relates to the amount included in respect of the branch is based solely on such approved financial statements.

4. "Tlie Company has defaulted in payment of dividend to the shareholder to the tune of Rs. 31.53 lacs.

Subject to above 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 March 31, 2013;

b) in the case of the Profit and Loss Account, 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.

Report on other Legal Regulatory Requirements

1. 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 Act, we give in the Annexure a statement on the matters specified in 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 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, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) Subject to qualification in respect of debtor and stock in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors as on March 31,2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(Referred to in paragraph 3 of our Report of even date on the accounts of Advanced Micronic Devices Ltd for the year ended 31st March 2013) On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

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

(b) Physical verification of Fixed Assets is performed by the management in a regular programme for verification once in a year. In our opinion, the frequency of verification is reasonable, having regard to the size and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, no substantial part of fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

2. (a) We are informed that the physical verifications of inventories except inventories lying with the third parties were conducted by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) Tlie company has maintained proper records of inventories. Subject to qualification in the audit report about non moving stock amounting to Rs.1685.18 lacs as noticed by stock auditor appointed by State Bank of India, no discrepancies were noticed on verification between physical stocks and stock records.

(d) During Novermber 2012 there was loss of inventory to the tune of Rs,118.19 lacs due to fire at Delhi Branch office for which company has lodged claim with insurance company.

3. (a) As per the explanation given to us the Company has not given any loans to the parties listed in the register maintained under section 301 of the Companies Act 1956.

(b) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has taken loan amounting to Rs.1583.07 lacs from companies, films or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Expect for loan taken from its Holding Company (Opto Circuits(India) Ltd and from Opt infrastructure India ltd ,its associated company, for other parties company is paying interest at the rate of 12%P.A Tlie rate of interest and other terms and conditions of such loans given are not prejudicial to the interest of the Company.

4 In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. a) According to the information and explanation given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

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 Companies Act, 1956 and exceeding Rs. 5,00,000 in respect of each party during the year have been made at prices which are reasonable having regard to the prevailing market price at the relevant time

6 Tlie Company has not accepted any deposits from the public covered under section 58A of the Companies Act, 1956.

7 As per information & explanations given by the management, the Company has an internal audit system commensurate with its size and the nature of its business.

8 Since the company is involved in trading activity only, the Central Government has not prescribed maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 for any product of the company.

9 On the basis of records produced before us, the Company has generally not been regular in depositing undisputed statutory dues like, Employees State Insurance, Provident Fund, Income Tax, Service Tax, etc. According to the information and explanations given to us, there are no undisputed amounts payable in respect of, Customs Duty, Excise Duty, Income tax except below mentioned statutory dues.

(Rs.in lacs)

Service Tax 154.90

Dividend distribution tax 31.12

Provident Fund 37.39

Tax deducted at source on salary 25.33

Total 248.74

Which were outstanding as on 31st March 2013 for a period of more than six months from the date on which they became payable 10 Tlie Company does not have any accumulated loss, but has incurred cash loss amounting to Rs.168.52 lacs during the financial year covered by our audit. Based on the stock audit conducted by the Independent auditors the company has not assessed realizable value of the non-moving stock out of Rs.1685.18 lacs. Accordingly the company has not provided for loss on non-moving stock.

Similarly stock auditors have also notified bills receivable amounting to Rs.1522.54 lacs as not realized for more than 180 days which has been identified by them as non realizable. Tlie company has not made proper assessment of the amount realizable from the above mentioned debtor. Accordingly company has not made provision for bad and doubtful debts.

11 During the year, the company has not taken additional Term Loan from Banks/Financial Institutions, However it has defaulted in repayment of its dues to bank to the tune of Rs.59.37 lacs..

12 In our opinion and according to the information and explanations given to us, and based on the documents and records produced to us, 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 In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special status applicable to Chit-Fund and Nidhi / Mutual Benefit Fund/ Societies, accordingly clause 4 (xii) of the order is not applicable..

14 In our opinion, the Company is not dealing or trading in shares, securities, debentures or other investments and hence, the requirement of Clause 4 (xiv) of the order is not applicable to the company.

15 Since the company does not have any subsidiary the question of giving guarantee for loans taken by its subsidiary does not arise, accordingly clause 4(XV) of the order is not applicable.

16. In our opinion and based on information and explanations given to us by the management, term loans have been applied for the purpose for which they were obtained.

17 According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long term purpose. No long-term funds have been used to finance short-term assets except permanent working capital.

18 Tlie Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the companies Act 1956,

19 During the year the company has not issued debentures during the financial year.

20 Tlie Company has not raised any money by public issue during the year.

21 Subject to qualification in audit report, based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For Anand Amarnath and Associates

Chartered Accountants

B K Amarnath

Partner

Place: Bangalore Membership No. :026536

Date: 30.05.2013 FRN: 000121S


Mar 31, 2010

1. We have audited the attached Balance Sheet of ADVANCED MICRONIC DEVICES LIMITED as at 31st March 2010 and the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956, and according to the information and explanation given to us during the course of the audit and on the basis of such checks as we consider appropriate, we enclose in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

(ii) 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:

(iii) The Balance Sheet, Profit and Loss Account and Cash flow Statement dealt with by this report are in agreement with the books of account.

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow statement dealt with in this report comply with the accounting standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956.

(v) On the basis of written representation received from the directors, as on 31st March 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2010 from being appointed as a director in terms of Clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956.

(vi) Subject to the foregoing, in our opinion, and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, 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 2010;

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

(c) in the case of 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 our Report of even date on the accounts of ADVANCED MICRONIC DEVICES LTD. for the year ended 31st March 2010)

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

(b) Physical verification of Fixed Assets is performed by the management in a regular programme for verification once in a year. In our opinion, the frequency of verification is reasonable, having regard to the size and the nature of its business.

(c) There was no substantial disposal of fixed assets during the year.

ii. (a) We are informed that the physical verifications of inventories except inventories lying with the third parties were conducted by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventories 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 has maintained proper records of inventories. According to the records produced to us, no discrepancies were noticed on verification between physical stocks and stock records.

iii. (a) As per the explanation given to us the Company has given loans to the parties listed in the register maintained under Section 301 of the Companies Act, 1956, the rate of interest and other terms and conditions of such loans given are not prejudicial to the interest of the Company.

(b) As per the explanation given to us the Company has taken loans from the parties listed in the register maintained under Section 301 of the Companies Act, 1956, and there was no payment of any interest by the Company during the year.

iv. In our opinion, and according to the information and explanations given to us, there is adequate internal control procedure commensurate with size of the Company and the nature of its business for the purchase of inventory and assets and for the sale of goods. During the course of our audit we have not observed any continuing failure to correct major weakness in internal controls.

v. (a) According to the information and explanation given to us, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956, have been so entered.

(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 Companies Act, 1956 and exceeding Rs.5,00,000 in respect of each party during the year have been made at prices which are reasonable having regard to the prevailing market price at the relevant time.

vi. The Company has not accepted any deposits from the public within the meaning of Section 58A of the Companies Act, 1956.

vii. In our opinion, the internal audit system in the Company during the year is adequate and commensurate to the size and the nature of the business of the Company.

viii. To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956, for any product of the Company.

ix. On the basis of records produced before us, the Company is generally been regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Customs Duty, Excise Duty and Service Tax. According to the information and explanations given to us, there are no undisputed amounts payable in respect of Provident Fund, Sales Tax, Customs Duty, Excise Duty and Service Tax, except Income Tax amounting to Rs.217.81 Lacs, as per Note No.14 which are outstanding as on 31st March 2010 for a period of more than six months from the date on which they became payable.

x. The Company has no accumulated losses and has not incurred cash losses during the current financial year and in the immediately preceding financial year.

xi. During the year, the Company has taken additional Term Loan from Banks / Financial Institutions it has not defaulted in repayment of its dues to financial institutions and banks.

xii. In our opinion and according to the information and explanations given to us, and based on the documents and records produced to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special status applicable to Chit-Fund and Nidhi / Mutual Benefit Fund / Societies, accordingly Clause 4 (xii) of the order is not applicable.

xiv. In our opinion, the Company is not dealing or trading in shares, securities, debentures or other investments and hence, the requirement of Clause 4 (xiv) of the order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has not given guarantee for loans taken by its subsidiary from a bank or Financial Institutions, accordingly Clause 4(XV) of the order is not applicable.

xvi. In our opinion and based on information and explanations given to us by the management, term loans have been applied for the purpose for which they were obtained.

xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term purpose. No long-term funds have been used to finance short-term assets except permanent working capital.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956, during the year.

xix. The Company has not issued debentures during the financial year.

xx. The Company has not raised any money through a public issue during the year.

xxi. On the basis of our examination and according to the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.



For ANAND AMARNATH & ASSOCIATES

Chartered Accountants,

B.K. Amarnath

Partner

Place: Bengaluru M.No.: 026536

Date: 24th May 2010 Firm No.: 000121S

 
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