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Auditor Report of Linaks Micro Electronics Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of LINAKS MICROELECTRONICS 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 RESPONSIBILITIES FOR THE FINANCIAL STATEMENT 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"). 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.

AUDITORS'' 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, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. 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 evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINION

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

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

b) in the case of the Profit and Loss Account, of the loss for the period from Oct.1,2013 to 31st March, 2014

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENT;

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") 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. Further, to our comments referred to in paragraph (1) above and subject to followings (refer note no. 3(i) to (iv) of Notes to Accounts attached to and forming part of Balance Sheet):

That no interest is provided on funded CST& UPTT and Statutory dues of PF & ESI in view of sanctioned rehabilitation scheme.

That no provision is made for depreciation on Fixed Assets as these were not put to use during the above said period).Further no provision is made for loss on account of discarded/obsolete Plant and Machinery.

That no provision is made for loss due to diminution in value of inventory holdings.

3. 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) 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.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO THE AUDITORS'' REPORT (Referred to in Paragraph 1 of our report of even date)

(i) (a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) The fixed assets have been physically verified by the management at reasonable intervals; No material discrepancies were noticed on such verification;

(c) No substantial part of fixed assets have been disposed off during the year,

(ii) (a) Physical verification of inventory has been conducted at reasonable intervals by the management;

(b) The procedures of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the Company and nature of its business;

(c) The company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification;

(iii) The company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act. However company has taken interest free unsecured loan from its managing director. The terms and conditions are not prejudicial to the interest of the company.

(iv) There is an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods.

(v) There is no transaction that needs to be entered into in the register in pursuance of Section 301 of the Act.

(vi) The company has not accepted any deposits from the public,

(vii) The company has an internal audit system commensurate with its size and nature of its business, which needs to be strengthened.

(viii) Since company is not in production no cost audit records are being maintained.

(ix) Due to financial crunch the company was not regular in depositing old P.F. dues Rs. 3.54 Lac (Previous year Rs.10.50 Lac). However, upto date payment of ESI has been paid by the company . No provisions for gratuity has been made and will be paid as and when becomes due.

(b) Sales Tax assessment under appeal is Rs 63.35 Lac (Previous year Rs. 63.35 Lac) a list is enclosed in Notes on Account under the head contingent liabilities, without considering interest thereon.

(x) The company has incurred cash losses in the year for Rs 6.57lac and in the Preceding financial year for Rs. 10.37 Lac.

(xi) In our opinion and as per the explanation given to us, the company is under rehabilitation under the scheme sanctioned by the Board of Industrial and Financial Reconstruction (BIFR). During the year the Company has been settling its statutory dues as per the schedule drawn-up in the Rehabilitation Scheme.

(xii) The company has not granted any loans and advances on the basis of security.

(xii) The company is not a chit fund company.

(xiii) The company is not trading or dealing in shares, securities, debenture and other investments.

(xiv) The company has not given any guarantee for loans taken by others.

(xv) The company has not applied for any term loan during the year.

(xvi) The fund raised on short-term basis has not been used for long-term investments and vice versa.

(xvii) The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

(xviii) The company has not issued any debentures.

(xix) The company has not raised any money by public issues during the year.

(xx) No fraud on or by the company has been noticed or reported during the year.

For: S. R. Gupta & Co.

Chartered Accountants

Place : Lucknow V.K. Gupta

Date :30.05.14 (Partner)

M. No. 14745


Mar 31, 2012

We have audited the attached Balance Sheet of LINAKS MICROELECTRONICS LTD.' as at 31sl March' 2012 and the Profit and Loss Account of the company for the year ended on that date' annexed thereto. These financial statements are the responsibility of the management of the company. Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standard in India. These 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. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors' Report) Order' 2004' we give in the Annexure' a statement on the matters specified in the paragraphs 4 & 5 of the said Order' to the extent applicable to the company.

2. Further' to our comments referred to in paragraph (1) above and subject to fallowings (refer note no. 3(i) to (vi) of Notes to Accounts attached to and forming part of Balance Sheet):.

"That in computing Profit /Loss far the year' Interest written off as per OTS Agreement' on Secured Loans from Financial Institutions and State Bank of India' for Rsl 171.55 Lac plus Rs. 32.07 lac lease rent written off have been shown as Extra Ordinary Income for the current year.

That amounts written off as per OTS Agreement of Secured Loans from Financial Institutions and State Bank of India for Rs. 310.49 lac has been shown as Capital Receipt under the Group"Reserves and Surplus.

That no Interest on Unsecured Loan from M/S. Kala Holding is provided during the year due to dispute. In case of applying rate @ 18% simple rate of Interest' Loss would be increased by Rs.l 1.47 Lac (app.).

That no interest is provided on Funded CST & UPTT and Statutory Dues of PF& ESI as the Company has sought extension of relief in view of the pending approval of the Revised DRS.

That no provision is made for loss on account of discarded/ obsolete Plant & Machinery.

That no provision is made for loss due to diminution in value of inventory holdings." We report that:

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.

In our opinion' the company has kept proper books of account as required by law as far as it appears from our examination of the books.

The Balance Sheet and Profit and Loss account annexed with this report are in agreement with the books of account.

In our opinion' the Profit and Loss account and the Balance Sheet comply with the accounting standards referred to in sub section (3

C) of section 211 of the Companies Act' 1956. On the basis of the written representations from the Directors' taken on record by the Board of Directors ' none of the directors is disqualified as on 31SI March' 2012' from being appointed as a director under section 274 (1)(g) of the Companies Act 1956.

In our opinion and to the best of our information and according to the explanations given to us' the said accounts read together with the notes thereon give the information required by the Companies Act' 1956 in the manner so required :.

I. In so far as it relates to the Balance Sheet' of the state of the affairs of the Company as at 31s' March' 2012.

II. In so far as it relates to the Profit and Loss accounts of the Loss of the Company for the year ending on 31s1 March' 2012.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in Paragraph 1 of our report of even date)

(i) (a) The company is maintaining proper records showing full particulars' including quantitative details and situation of fixed assets;

(b) The fixed assets have been physically verified by the management at reasonable intervals; No material discrepancies were noticed on such verification;

(c) No substantial part of fixed assets have been disposed off during the year'

(ii) (a) Physical verification of inventory has been conducted at reasonable intervals by the management;

(b) The procedures of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the Company and nature of its business;

(c) The company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification;

(iii) The company has not granted any loans' secured or unsecured to companies' firms or other parties covered in the register maintained under Section 301 of the Act. However company has taken interest free unsecured loan from its managing director. The terms and conditions are not prejudicial to the interest of the company.

(iv) There is an adequate internal control procedure commensurate with the size of the company and the nature of its business' for the purchase of inventory and fixed assets and for the sale of goods.

(v) There is no transaction that needs to be entered into a register in pursuance of Section 301 of the Act.

(vi) The company has not accepted any deposits from the public'

(vii) The company has an internal audit system commensurate with its size and nature of its business' which needs to be strengthened.

(viii) As stated in note no. 3(vii) of Notes to Accounts' the company has not carried out any manufacturing activity. and accordingly the cost audit records have not been maintained by the Company during the year under review.

(ix) (a) As stated in note no. 3(viii) of Notes to Accounts' the company is not regular in depositing Provident Fund payable Rs. 11.00 lacs (previous year Rs. 10.02 lacs)' ESI Payable Rs. 0.42 Lac (previous year Rs. 0.47 lac) and Gratuity payable Rs.2.5 lacs (approx.) outstanding as on 31.03.2012.

(b) Sales Tax under disputes is Rs 63.35 Lac (Previous year Rs. 63.35 Lac) a list is enclosed in Notes on Account under the head contingent liabilities' without considering interest thereon.

(x) The company has incurred cash losses in the year for Rs 28.76 lac and in the Preceding financial year for Rs. 20.00 Lac.

(xi) In our opinion and as per the explanation given to us and subject to note no. 3(ix) of Notes to Accounts' the company is a sick company under provisions of S1CA and Modified Draft Rehabilitation Scheme is under consideration with the Bench of BIFR. During the year the Company settled dues of all its Secured Lenders and fully paid to 1DBI' PICUP. UPFC and partly paid to State Bank of India by financial assistance from Co.promoters/Strategic investors.

(xii) The company has not granted any loans and advances on the basis of security.

(xii) The company is not a chit fund company.

(xiii) The company is not trading or dealing in shares' securities' debenture and other investments.

(xiv) The company has not given any guarantee for loans taken by others.

(xv) The company has not applied for any term loan during the year.

(xvi) The fund raised on short.term basis has not been used for long.term investments and vice versa.

(xvii) The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

(xviii) The company has not issued any debentures.

(xix) The company has not raised any money by public issues during the year.

(xx) No fraud on or by the company has been noticed or reported during the year.

For S.R. Gupta & Co. Chartered Accountant

Place: Lucknow (V.K. Gupta)

Date: 29.06.2012 Partner


Mar 31, 2010

We have audited the attached Balance Sheet of LINAKS MICROELECTRONICS LTD., as at 31st March, 2010 and the Profit and Loss Account of the company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the management of the company. Our responsibility is to express an opinion on the financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standard in India. These 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. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors Report) Order, 2004, we give in the Annexure, a statement on the matters specified in the paragraphs 4 & 5 of the said Order, to the extent applicable to the company.

2. Further, to our comments referred to in paragraph (1) above and subject to followings :-

" That in computing profit /loss no interest has been charged as per letter dt.16.01.2004 of case no. 354/98 from Board for Industrial and Financial Reconstruction , New Delhi, on Terms Loan and Working Capital Loans. In the event of applying simple rate of Interest Loss would be increased by Rs.336.83 Lac( Previous year 336.83 Lac).

That no Interest on Unsecured Loan from M/S. Kala Holding is provided during the year due to dispute. In case of applying rate @ 18% simple rate of Interest, Loss would be increased by Rs.11.47 Lac (app.)".

That no interest is provided on Funded CST & UPTT and Statutory Dues of PF & ESI as the Company has sought extension of relief in view of the pending approval the Revised DRS.

We report that:

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.

In our opinion, the company has kept proper books of account as required by law as far as it appears from our examination of the books.

The Balance Sheet and Profit and Loss account annexed with this report are in agreement with the books of account.

In our opinion, the Profit and Loss account and the Balance Sheet comply with the accounting standards referred to in sub section (3 C) of section 211 of the Companies Act, 1956.

On the basis of the written representations from the Directors, taken on record by the Board of Directors , none of the directors is disqualified as on 31st March, 2010, from being appointed as a director under section 274 (l)(g) of the Companies Act 1956. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the notes thereon give the information required by the Companies Act, 1956 in the manner so required :-

I. In so far as it relates to the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2010.

II. In so far as it relates to the Profit and Loss accounts of the Loss of the Company for the year ending on 31st March, 2010.

ANNEXURE TO THE AUDITORS REPORT (Referred to in Paragraph 1 of our report of even date)

(i) (a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) The fixed assets have been physically verified by the management at reasonable intervals; No material discrepancies were noticed on such verification;

(c) No substantial part of fixed assets have been disposed off during the year,

(ii) (a) Physical verification of inventory has been conducted at reasonable intervals by the management;

(b) The procedures of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the Company and nature of its business;

(c) The company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification;

(iii) The company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act. However company has taken interest free unsecured loan from its managing director. The terms and conditions arenot prejudicial to the interest of the company.

(iv) There is an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods.

(v) There is no transaction that needs to be entered into a register in pursuance of Section 301 of the Act. (vi) The company has not accepted any deposits from the public. (vii) The company has an internal audit system commensurate

with its size and nature of its business. (viii) The company is not maintaining cost audit records.

(ix) (a) The company is not regular in depositing Provident Fund payable Rs. 10.02 lacs and Gratuity payable Rs.2.5 lacs(approx.) outstanding as on 31.03.2010. (b) Sales Tax under disputes is Rs 63.001 Lac (Previous year Rs. 63.35 Lac) a list is enclosed in Notes on Account under the head contingent liabilities.

(x) The company has incurred cash losses in the year for Rs 7.96 lac and in the Preceding financial year for Rs. 7.71 Lac.

(xi) In our opinion and as per the explanation given to us, the company is a sick unit and Modified Draft Rehabilitation Scheme is under consideration with the Bench of BIFR and as per letter dated 16.01.2004 of Case No. 354/98 from Board for Industrial & Financial Reconstruction, New Delhi, no payment is due during the current year to any financial institutions.

(xii) The company has not granted any loans and advances on the basis of security. (xii) The company is not a chit fund company.

(xiii) The company is not trading or dealing in shares, securities, debenture and other investments.

(xiv) The company has not given any guarantee for loans taken by others.

(xv) The company has not applied for any term loan during the year.

(xvi) The fund raised on short-term basis has not been used for long-term investments and vice versa.

(xvii) The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

(xviii) The company has issued no debentures.

(xix) The company has not raised any money by public issues during the year.

(xx) No fraud on or by the company has been noticed or reported during the year.

For S.R. Gupta & Co.

Chartered Accountant

Place: Lucknow (V.K. Gupta)

Date: 29.07.2010 Partner


Mar 31, 2009

We have audited the attached Balance Sheet of LINAKS MICROELECTRONICS LTD., as at 31st March, 2009 and the Profit and Loss Account of the company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the management of the company. Our responsibility is to express ah opinion on the financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standard in India. These 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. We believe tfiat our audit provides a reasonable basis for our opinioa

1. As required by the Companies (Auditors Report) Order, 2004, we give in the Annexure, a statement on the matters specified in the paragraphs 4 & 5 of the said Order, to the extent applicable to the company.

2. Further, to our comments referred to in paragraph (1) above and subject to followings :-

" That in computing profit/loss no interest has been charged as per letter dt. 16.01.2004 of case no. 354/98 from Board for Industrial and Financial Reconstruction, New Delhi, on Term Loans and Working Capital Loans, In the event of applying simple rate of Interest Loss would be increased by Rs.336.83 Lac( Previous year 336.83 Lac).

That no Interest on Unsecured Loan from M/S. Kala Holding is provided during the year due to dispute. In case of applying rate @ 18% simple rate of Interest, Loss would be increased by Rs.11.47 Lac (app.)".

We report that:

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

In our opinion, the company has kept proper books of account as required by law as far as it appears from our examination of the books.

The Balance Sheet and Profit and Loss account annexed with this report are in agreement with the books of account.

In our opinion, the Profit and Loss account and the Balance Sheet comply with the accounting standards referred to in sub section (3C) of section 211 of the Companies Act, 1956.

In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the notes thereon give the information required by the Companies Act, 1956 in the manner so required :-

I. In so far as it relates to the Balance Sheet, of the state of the affairs of the Company as at 31" March, 2009.

II. In so far as it relates to the Profit and Loss accounts of the Loss of the Company for the year ending on 31st March, 2009.

ANNEXURE TO THE AUDITORS REPORT (Referred to in Paragraph 1 of our report of even date)

(i) (a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) The fixed assets have been physically verified by the management at reasonable intervals; No material discrepancies were noticed on such verification,

(c) No substantial part of fixed, assets have been disposed off during the year,

(ii) (a) Physical verification of inventory has been conducted at reasonable intervals by the management;

(b) The procedures of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the Company and nature of its business;

(c) The company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification;

(iii) The company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act. However company has taken interest free unsecured loan from its managing director. The terms and conditions are not prejudicial to the interest of the company.

(iv) There is an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods.

(v) There is no transaction that needs to be entered into a register in pursuance of Section 301 of the Act.

(vi) The company has not accepted any deposits from the public,

(vii) The company has an internal audit system commensurate with its size and nature of its business.

(viii) The company is not maintaining cost audit records.

(ix) (a) The company is not regular in depositing Provident Fund payable Rs. 9,77,953/- and Gratuity payable Rs.2,35,000/- outstanding as on 31.03.2009.

(b) Sales Tax under disputes is Rs 63.35 Lacs (Previous year Rs.70.16Lacs) a list is enclosed in Notes on Account under the head contingent liabilities.

(x) The company has incurred cash losses in the year for Rs 7,71 Lac and in the Preceding financial year for Rs, 2.40Lac.

(xi) In our opinion and as per the explanation given to us, the company is a sick unit and Modified Draft Rehabilitation Scheme is under consideration with the Bench of BIFR and as per letter dated 16.01.2004 of Case No. 354/98 from Board for Industrial & Financial Reconstruction, New Delhi, no payment is due during the current year to any financial institutions.

(xii) The company has not granted any loans and advances on the basis of security.

(xii) The company is not a chit fund company.

(xiii) The company is not trading or dealing in shares, securities, debenture and other investments.

(xiv) The company has not given any guarantee for loans taken by others.

(xv) The company has not applied for any term loan during the year.

(xvi) The fund raised on short-term basis has not been used for long-term investments and vice versa.

(xvii) The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

(xviii) The company has issued no debentures.

(xix) The company has not raised any money by public issues during the year.

(xx) No fraud on or by the company has been noticed or reported during the year,

For S.R. Gupta & Co. Chartered Accountant,

Place: Lucknow V.K. Gupta Date: 30.7.2009 Partner




Mar 31, 2004

We have audited the attached Balance Sheet of LINAKS MICROELECTRONICS LTD. as at 31 st March, 2004 and the Profit and Loss Account of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the management of the company. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted out audit in accordance with generally accepted auditing standards in India. These 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 statements. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors Report) Order, 2003, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order, to the extent applicable to the Company.

2. Further to our comments referred to in paragraph (1) above and subject to following:-

"That in computing Profit/Loss no interest had been charged as per letter dated 16.01.2004 of Case No. 354/98 from Board for Industrial & Financial Reconstruction, New Delhi, on term loans and working capital loan (previous year simple rate of interest had been charged on Term Loans from financial institutions). In the event of applying simple rate of interest loss would have been increased by Rs.336.83 lacs (previous year Rs. 166.43 Lacs). We report that:

We have obtained all the information and explanation, which to the best of our knowledge and belief were necessary for the purpose of our audit.

In our opinion, the Company has kept proper books of accounts as required by law as far as it appears from our examination of the books.

The Balance Sheet and Profit & Loss Account annexed with this report are in agreement with the books of account. In our opinion, the Profit and Loss Account and the Balance Sheet comply with the Accounting Standards referred to in Sub section (3C) of Section 211 of the Companies Act, 1956.

On the basis of the written representations from the directors, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2004, from being appointed as a director under 274(1)(g) of the Companies Act, 1956.

In our opinion and to the best of our information and according to the explanation given to us, the said accounts read together with the notes thereon give the information required by the Companies Act, 1956 in the manner so required: -

(i) In so far as it relates to the Balance Sheet of the state of affairs of the Company as at 31 st March 2004.

(ii) In so far as it relates to the Profit & Loss account of the Loss of the Company for the year ending on 31 st March 2004.

ANNEXURE TO THE AUDITORS REPORT (Referred to in Paragraph 1 of our report of even date)

(i) (a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) The fixed assets have been physically verified by the management at reasonable intervals; No material discrepancies were noticed on such verification;

(c) No substantial part of fixed assets have been disposed off during the year,

(ii) (a) Physical verification of inventory has been conducted at reasonable intervals by the management;

(b) The procedures of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the Company and nature of its business;

(c) The company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification;

(iii) The company has not granted or taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Act,

(iv) There is an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods.

(v) There is no transaction that needs to be entered into a register in pursuance of section 301 of the Act.

(vi) The company has not accepted any deposits from the public,

(vii) The company has an internal audit system commensurate with its size and nature of its business.

(viii) The company is maintaining cost audit records.

(ix)(a) The company is not regular in depositing Provident Fund. Provident Fund payable Rs.380524/- and Gratuity payable Rs. 120000/- outstanding as on 31.03.2004.

(b) Sales Tax under disputes is Rs.102.49 Lac (previous year Rs.46.69 Lac) and Income Tax under dispute is Rs. 15.73 Lac (Previous Year Rs, 15.73 Lac) excluding interest. List is enclosed in Notes on Account under the head contingent liabilities.

(x) The company has incurred cash losses in the year for Rs.64.20 Lacs and in the Preceding financial year for Rs.334.56 Lacs

(xi) In our opinion and as per the explanation given to us, the company is under BIFR and MDRS is under consideration with the Bench of BIFR and as per letter dated 16.01.2004 of Case No. 354/98 from Board for Industrial & Financial Reconstruction. New Delhi, no payment is due during the current year to any financial institutions.

(xii) The company has not granted any loans and advances on the basis of security.

(xii) The company is not a chit fund company.

(xiii) The company is not trading or dealing in shares, securities, debenture and other investments.

(xiv) The company has not given any guarantee for loans taken by others.

(xv) The company has not applied for any term loan during the year.

(xvi) The fund raised on short-term basis has not been used for long-term investments and vice versa.

(xvii) The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act.

(xviii) The company has issued no debentures.

(xix) The company has not raised any money by public issues during the year.

(xx) No fraud on or by the company has been noticed or reported during the year.



For: S.R. Gupta & Co. Chartered Accountants

V.K.Gupta Partner

Place : Lucknow Date : 27.07.2004


Mar 31, 2003

We have audited the attached Balance Sheet of LINAKS MICROELECTRONICS LIMITED as at 31st March, 2003 and the Profit and Loss Account of the Company for the year ended on the date, annexed thereto. These financial statements are the responsibility of the management of the company. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted out audit in accordance with generally accepted auditing standards in India. These 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 statements. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Manufacturing and Other Companies (Auditors Report) Order, 1988, issued by the Company Law Board in terms of section 227(4A) of the Companies Act, 1956, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order, to the extent applicable to the Company.

2. Further to our comments referred to in paragraph (1) above and subject to following:-

"That in computing Profit/Loss simple rate of interest had been charged on Term Loans from financial institutions. In the event of applying compound and penal rate of interest loss would have been increased by Rs. 166.43 lacs (previous year Rs. 144.72 lacs)." We report that:

We have obtained all the information and explanation, which to the best of our knowledge and belief were necessary for the purpose of our audit.

In our opinion, the Company has kept proper books of accounts as required by law as far as it appears from our examination of the books.

The Balance Sheet and Profit & Loss Account annexed with this report are in agreement with the books of account In our opinion, the Profit and Loss Account and the Balance Sheet comply with the Accounting Standards referred to in Sub section (3C) of Section 211 of the Companies Act, 1956. On the basis of the written representations from the directors, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2003, from being appointed as a director under 274(1 )(g) of the Companies Act, 1956.

In our opinion and to the best of our information and according to the explanation given to us, the said accounts read together with the notes thereon give the information required by the Companies Act, 19S6 in the manner so required: -

(i) Insofar as it relates to the Balance Sheet, of the stale of affairs of the Company as at 31st March 2003.

(ii) Insofar as it relates to the Profit A Loss account of the loss of the Company for me year ending on 31st March 2003.

ANNEXURE TO THE AUDITORS REPORT (Referred to ta Paragraph 1 of oar report of even date)

1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The management has physically verified the fixed assets at reasonable intervals and no material discrepancies with respect to book records were noticed on such verification.

2. None of the fixed assets have been revalued during the year.

3. The stock of finished goods, stores, spare parts, raw materials have been physically verified during the year by the Management and in our opinion the frequency of verification was reasonable.

4. The procedure of physical verification of stocks followed by the Company are reasonable and adequate commensurate with the size of the Company and the nature of its business.

5. The discrepancies, noticed on verification between the physical stocks and the book records, were not material and the same have been properly dealt with in the books of account

6. On the basis of our examination of stock records we are of the opinion that the valuation of the stocks is fair and proper in accordance with the normally accepted accounting principals and is on the same basis as in the preceding year.

7. The Company has not taken any loans, secured or unsecured, from Companies, Firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. We have been informed that there are no Companies under the same management as defined under Section 370(1B) of the Companies Act, 1956.

8. The Company has not granted any loans, secured or unsecured to Companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. We have been informed that there are no Companies under the same management as defined under Section 370(1B) of the Companies Act, 1956.

9. The employees to whom loans and advances in the nature of loans have been given by the Company are repaying the principal amount and1 are also regular in payment of interest where stipulated.

10. In our opinion and according to the information and explanation given to us, there are adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw materials including components, plant and machinery, equipment and other assets and with regard to the sale of goods.

11. In our opinion, and according to the information and explanation given to us, no purchases of store, spares, raw materials and sales of goods, made in pursuance of contracts or arrangements entered in the register maintained U/s 301 of the Companies Act, 1956 aggregating Rs.50000 or more in value.

12. As explained to us there were no unserviceable or damaged stores, raw materials and finished goods.

13. The Company has not accepted deposits from public u/s 58A of the Companies Act, 1956.

14. As explained to us there were no scrap of significant realisable value, we have been informed that the Company has no realisable by products.

15. In our opinion, the Company has an internal audit system commensurate with the size and the nature of its business.

16. We have carried out a limited review of the books of accounts and cost records maintained by the company, pursuant to the rules made by the Central Government for the maintenance

of Cost Records under section 209(1 )(d) of the Companies Act, 1956, in respect of its product Printed Circuit Boards, and are of the opinion that, prima facie, the prescribed accounts and records have been maintained.

17. The Company is not liable for Employees State Insurance, as the area where they are situated is not notified under the scheme as explained to us. Company is not regular in depositing Provident Fund.

18. Subject to notes on Account No.3. and according to the information and explanations given to us, there are no undisputed amounts payable in respect of Income-Tax, Wealth Tax, Customs Duty and Excise Duty winch are outstanding as on 31st March 2003 for a period of more than six months from the date they become payable.

19. No personal expenses of employees or directors have been charged to Revenue Accounts other than those payable under contractual obligation or in accordance with generally accepted business practice.

20. The company is a sick industrial Company within the meaning of Clause (o) of Section 3(1) of the Sick Industrial Companies (Special Provisions) Act, 1985.

For S.R. Gupta & Co. Chartered Accountants

V.K. Gupta Partner

Place : Lucknow Date : 18.08.03


Mar 31, 2002

We have audited the attached Balance Sheet of Linaks Microelectronics Ltd. as at 31st March 2002 and also the annexed Profit & Loss Account for the year ending on 31st March 2002.

1. As required by the Manufacturing and Other Companies (Auditors Report) Order 1988, issued by the Company Law Board in terms of the information and explanation given to us and on the basis of such checks as we considered appropriate, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

2. Further to our comments referred to in paragraph (1) above and subject to following :-

"That in computing Profit/Loss simple rate of interest had been charged on Term Loans from financial institutions. In the event of applying compound and penal rate of interest loss would have been increased by Rs. 144.72 lacs (previous year Rs. 98.44 lacs)."

We report that:

We have obtained all the information and explanation, which to the best of our knowledge and belief were necessary for the purpose of our audit. In our opinion, the Company has kept proper books of accounts as required by law as far as it appears

from our examination of the books.

The Balance Sheet and Profit & Loss Account annexed with this report are in agreement with the books of account.

In our opinion the Profit and Loss Account and the Balance Sheet comply with the Accounting Standards referred to in Sub-section (3C) of Section 21 1 of the Companies Act, 1956.

In our opinion and to the best of our information and according to the explanation given to us, the said accounts read together with the notes thereon give the information required by the Companies Act. 1956 in the manner so required: -

(i) Insofar as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March 2002.

(ii) Insofar as it relates to the Profit & Loss account of the loss of the Company for the year ending on 31st March 2002.

ANNEXURE TO THE AUDITORS REPORT (Referred to in Paragraph 1 of our report of even date)

1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The management has physically verified the fixed assets at reasonable intervals and no material discrepancies with respect to book records were noticed on such verification.

2. None of the fixed assets have been revalued during the year.

3. The stock of finished goods, stores, spare parts, raw materials have been physically verified during the year by the Management and in our opinion the frequency of verification was reasonable.

4. The procedure of physical verification of slocks followed by the Company are reasonable and adequate commensurate with the size of the Company and the nature of its business.

5. The discrepancies, noticed on verification between the physical stocks and the book records, were not

material and the same have been properly dealt with in the books of account.

6. On the basis of our examination of stock records we are of the opinion that the valuation of the stocks is fair and proper in accordance with the normally accepted accounting principals and is on the same basis as in the preceding year.

7. The Company has not taken any loans, secured or unsecured, from Companies, Firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. We have been informed that there are no Companies under the same management as defined under Section 370(1B) of the Companies Act, 1956.

8. The Company has not granted any loans, secured or unsecured to Companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. We have been informed that there are no Companies under the same management as defined under Section 370( 1B) of the Companies Act, 1956.

9. The employees to whom loans and advances in the nature of loans have been given by the Company are repaying the principal amount and are also regular in payment of interest where stipulated.

10. In our opinion and according to the information and explanation given to us, there are adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw materials including components, plant and machinery, equipment and other assets and with regard to the sale of goods.

11. In our opinion, and according to the information and explanation given to us, no purchases of store, spares, raw materials and sales of goods, made in pursuance of contracts or arrangements entered in the register maintained U/s 301 of the Companies Act, 1956 aggregating Rs.50000 or more in value.

12. As explained to us there were no unserviceable or damaged stores, raw materials and finished goods.

13. The Company has not accepted deposits from public u/s 58A of the Companies Act, 1956.

14. As explained to us there were no scrap of significant realisable value, we have been informed that the Company has no realisable by products.

15. In our opinion, the Company has an internal audit

system commensurate with the size and the nature of its business.

16. We have carried out a limited review of the books of accounts and cost records maintained by the company, pursuant to the rules made by the Central Government for the maintenance of Cost Records under Section 209(1 )(d) of the Companies Act, 1956, in respect of its product Printed Circuit Boards, and are of the opinion that, prima facie, the prescribed accounts and records have been maintained.

17. The Company is not liable for Employees State Insurance, as the area where they are situated is not notified under the scheme as explained to us. Company is not regular in depositing Provident Fund.

18. Subject to notes on Account No.3. and according to the information and explanations given to us, there are no undisputed amounts payable in respect of Income-Tax, Wealth Tax, Customs Duty and Excise Duty which are outstanding as on 31st March 2002 for a period of more than six months from the date they become payable.

19. No personal expenses of employees or directors have been charged to Revenue Accounts other than those payable under contractual obligation or in accordance with generally accepted business practice.

20. The company is a sick industrial Company within the meaning of Clause (o) of Section 3(1) of the Sick Industrial Companies (Special Provisions) Act, 1985.

For: S.R. Gupta & Co. Chartered Accountants

V.K. Gupta Partner

Place : Lucknow Date : 30.07.2002


Mar 31, 2001

We have audited the attached Balance Sheet of Linaks Microelectronics Ltd. as at 31 st March 2001 and also the annexed Profit & Loss Account for the year ending on 31st March 2001.

1. As required by the Manufacturing and Other Companies (Auditors Report) Order 1988, issued by the Company Law Board in terms of the information and explanation given to us and on the basis of such checks «s we considered appropriate, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

2. Further to our comments referred to in paragraph (1) above and Notes on Accounts 1 (g) & 4, we report that:

We have obtained all the information and explanation, which to the best of our knowledge and belief were necessary for the purpose of our audit. In our opinion, the Company has kept proper books of accounts as required by law as far as it appears from our examination of the books. The Balance Sheet and Profit & Loss Account annexed with this report are in agreement with the books of account.

In our opinion, the Profit and Loss Account and the Balance Sheet comply with the Accounting Standards referred to in Sub section (3C) of Section 211 of the Companies Act, 1956. On the basis of the written representation received and taken on record by the Board of Directors of the Company, we report that prima facie none of the Directors is disqualified as on 31 st March 2001 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

In our opinion and to the best of our information and according to the explanation given to us, the said accounts read iogether with the notes thereon give the information required by the Companies Act, 1956 in the manner so required:-

(i) Insofar as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March 2001.

(ii) Insofar as it relates to the Profit & Loss account of the loss of the Company for the year ending on 31st March 2001.

ANNEXURE TO THE AUDITORS REPORT (Referred to in Paragraph 1 of our report of even date)

1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The management has physically verified the fixed assets at reasonable intervals and no material discrepancies with respect to book records were noticed on such verification.

2. None of the fixed assets have been revalued during the year.

3. The stock of finished goods, stores, spare parts, raw materials have been physically verified during the year by the Management and in our opinion the frequency of verification was reasonable.

4. The procedure of physical verification of stocks followed by the Company are reasonable and adequate commensurate with the size of the Company and the nature of its business.

5. The discrepancies, noticed on verification between the physical stocks and the book records, were not material and the same have been properly dealt with in the books of account.

6. On the basis of our examination of stock records we are of the opinion that the valuation of the stocks is fair and proper in accordance with the normally

i accepted accounting principals and is on the same basis as in the preceding year subject to Note No. 1(e).

7. The Company has not taken any loans, secured or unsecured, from Companies, Firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. We have been informed that there are no Companies under the same management as defined under Section 370(1B) of the Companies Act, 1956.

8. The Company has not granted any loans, secured or unsecured to Companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. We have been informed that there are no Companies under the same management as defined under Section 370(113) of the Companies Act, 1956.

9. The employees to whom loans and advances in the nature of loans have been given by the Company are repaying the principal amount and are also regular in payment of interest where stipulated.

10. In our opinion and according to the information and explanation given to us, there are adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw materials including components, plant and machinery, equipment and other assets and with regard to the sale of goods.

11. In our opinion, and according to the information and explanation given to us, no purchases of store, spares, raw materials and sales of goods, made in pursuance of contracts or arrangements entered in the register maintained U/s 301 of the Companies Act, 1956 aggregating Rs.50000 or more in value.

12. As explained to us there were no unserviceable or damaged stores, raw materials and finished goods.

13. The Company has not accepted deposits from public u/s 58A of the Companies Act, 1956.

14. As explained to us there were no scrap of significant realisable value, we have been informed that the Company has no realisable by products.

15. In our opinion, the Company has an internal audit system commensurate with the size and the nature of its business.

16. We have been informed that the Central Government has not prescribed maintenance of cost records under Section 209(1 )(d) of the Companies Act, 1956.

17. The Company is not liable for Employees State Insurance, as the area where they are situated is not notified under the scheme as explained to us. Company is not regular in depositing Provident Fund.

18. Subj ect to notes on Account No.3. and according to the information and explanations given to us, there are no undisputed amounts payable in respect of Income-Tax. Wealth Tax, Customs Duty and Excise Duty which are outstanding as on 31st March 2001 for a period of more than six months from the date they become payable.

19. No personal expenses of employees or directors have been charged to Revenue Accounts other than those payable under contractual obligation or in accordance with generally accepted business practice.

20. The company is a sick industrial Company within the meaning of Clause (o) of Section 3(1) of the Sick Industrial Companies (Special Provisions) Act, 19,85.

For S. R. GUPTA & CO. Chartered Vcountants

Place : Lucknow V. K. Gupta

Date : 27.07.2001 (Partner)




Mar 31, 2000

We have audited the attached Balance Sheet of Linaks Microelectronics Ltd. as at 31st March 2000 and also the annexed Profit & Loss Account for the year ending on 3 1st March 2000.

1. As required by the manufacturing and other Companies (Auditors Report) Order 1988, issued by the Company Law Board in terms of the information and explanation given to us and on the basis of such checks as we considered appropriate, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

2. Further to our comments referred to in paragraph (I) above: We have obtained all the information and explanation, which to the best of our knowledge and belief were necessary for the purpose of our audit. In our opinion and as far as it appears from the examination of books, the Company has kept proper books of accounts as required by law. The Balance Sheet and Profit & Loss Account annexed with this report are in agreement with the books of account. In our opinion, the Profit and Loss Account and the Balance Sheet comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. In our opinion and to the best of our information and according to the explanation given to us, the said accounts read together with the notes thereon give the information required by the Companies Act, 1956 in the manner so required: -

(i) Insofar as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March 2000.

(ii) Insofar as it relates to the Profit & Loss account of the loss of the Company for the year ending on 31s1 March 2000.

ANNEXURE TO THE AUDITORS REPORT (Referred to in Paragraph 1 of our report of even date)

1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The management has physically verified the fixed assets at reasonable intervals and no material discrepancies with respect to book of records were noticed on such verification.

2. None of the fixed assets have been revalued during the year.

3. The stock of finished goods, stores, spare parts, raw materials have been physically verified during the year by the Management and in our opinion the frequency of verification was reasonable.

4. The procedure of physical verification of stocks followed by the Company are reasonable and adequate commensurate with the size;of the Company and the nature of its business.

5. The discrepancies, noticed on verification between the physical stocks and the book records, were not material and the same have been properly dealt with in the books of account.

6. On the basis of our examination of stock records we are of the opinion mat the valuation of the stocks is fair arid proper in accordance with the normally accepted accounting principals and is on the same basis as in the preceding year subject to Note No, l(e).

7. The Company has not taken any loans, secured or unsecured, from Companies, Firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. We have been informed that there are no Companies under the same management as defined under Section 370(1B) of the Companies Act, 1956.

8. The Company has not granted any loans, secured or unsecured to Companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. We have been informed that there are no Companies under the same management as defined under Section 370(1 B) of the Companies Act, 1956.

9. The employees to whom loans and advances in the nature of loans have been given by the Company are repaying the principal amount and are also regujar in payment of interest where stipulated.

10. In our opinion and according to the information and explanation given to us, there are adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw materials including components, plant and machinery, equipment and other assets and with regard to the sale of goods.

11. In our opinion, and according to the information and explanation given to us, no purchases of store, spares, raw materials and sales of goods, made in pursuance of contracts or arrangements entered in the register maintained U/s 301 of the Companies Act, 1956 aggregating Rs.50000 or more in value.

12. As explained to us there were no unserviceable or damaged stores, raw materials and finished goods.

13. The Company has not accepted deposits from public u/s 58A of the Companies Act, 1956.

14. As explained to us there were ho scrap of significant realisable value, we have been informed that the Company has no realisable by products.

15. In our opinion, the Company has an internal audit system commensurate with the size and the nature of its business.

16. We have been informed that the Central Government has not prescribed maintenance of cost records under Section 209(1 )(d) of the Companies Act, 1956.

17. As explained to us, the Company is not liable for Employees State Insurance, since the area where they are situated is not notified under the scheme. Company is generally regular in depositing Provident Fund dues.

18. Subject to notes on Account No.2. and according to the information and explanations given to us, there are no undisputed amounts payable in respect of Income-Tax, Wealth Tax, Customs Duty and Excise Duty which are outstanding as on 31st March 2000 for a period of more than six months from the date they become payable.

19. No personal expenses of employees or directors have been charged to Revenue Accounts ether than those payable under contractual obligation or in accordance with generally accepted business practice.

20. The company is a sick industrial Company within the meaning of Clause (o) of Section 3(1) of the Sick Industrial Companies (Special Provisions) Act, 1985.

For: S.R. Gupta & Co. Chartered Accountants Place : Lucknow Date : 28.07.2000 V.K.Gupta Partner

 
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