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Auditor Report of MIRC Electronics Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of MIRC Electronics Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, 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

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act")with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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 standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether 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 that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the 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 audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2015, its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.

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 it 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 aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, 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 is 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 Auditor's 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 has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 27 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE AUDITOR'S REPORT

Annexure referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date

Re: MIRC Electronics Limited ('the Company')

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

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(ii)(a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of physical verification of inventory 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 is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) In respect of loans granted to Company covered in the register maintained under Section 189 of the Companies Act, 2013, repayment of the principal amount is as stipulated and payment of interest has been regular.

(b) There is no overdue amount of loans granted to companies, firms or other parties listed in the register maintained under Section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit,we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the company in respect of these areas.

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

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the products manufactured and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) (a) Undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues have not been regularly deposited with the appropriate authorities and there have been serious delays in large number of cases.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees' state insurance, income- tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax and cess on account of any dispute, are as follows:

Nature of Financial Year Forum where dispute Amount in Dues is pending Lakhs

Excise Duty 1997-98,1999-00, Commissioner (Appeals) 52.02 2001-05

1998 - 99 High Court 10.00

1999 - 00 CESTAT 23.80

Service Tax 2004 - 2011 Service Tax Appellate 696.55 Tribunal

2007 - 12 Commissioner (Appeals) 80.33

Customs 2012-13 CESTAT 174.18

2012-13 Supreme Court 1,406.94

2014-15 Assistant Commissioner 25.07

2014-15 JC COMMISSIONER 22.81

2012-2013, Commissioner 50.88 2013-2014

Sales Tax 2009-10,2011-12 AA -ADDITIONAL COMMISSIONER 0.99

(Central & 2008-09,2011-12 Appellate Authority 54.40 State) 2009-10 Assessing Authority 314.87

2002-03,2003-04, Commercial Tax Tribunal 205.69 2005-06,2006-07, 2007-08

1992-94,1995-99, Commissioner 47.04 2000-2004, 2008-2009

1997-98,1999-01, Deputy Commissioner 49.24 2003-06, 2007-10, 2010-12

2009-10 Deputy excise and taxation 0.14 Commissioner

2000-01,2008-09, Deputy Commissioner (A) 1,788.33 2011-12, 2012-13

2008-09,2010-11, Excise & Taxation officer 4.60 2012-13

2002-05 High Court 178.30

2001-02, 2003-04, Joint Commissioner 2.98 2005-07,2010-2011

2005-06, 2012-13 Joint Commissioner(Appeals) 727.95

2003-04, 2005-08, Revisional Board. 1,302.28 2010-11

2010-12, 2013-15 Assistant Commissioner 211.13

2008-2009 MP COM TAX DEP 1.86

2010-2011 VAT officer 4.00

1997-1998 Board of Commercial Taxes, 9.72 Bhopal

2006-08, 2009-11 Supreme Court 914.98

Income Tax 1996-97,1999-00, High court 1,440.65 2000-01,2002-03, 2003-04,2004-05, 2005-06, 2006-07

2007-08,2009-10 Appellate Tribunal 283.31

2008-09,2010-11, CIT (Appeals) 318.82 2011-12

(d) According to the information and explanations given to us, the amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time.

(viii) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current financial year. In the immediately preceding financial year, the Company had incurred cash loss.

(ix) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(x) According to the information and explanations given to us, the Company has given guarantee for loans taken by its subsidiary from banks, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company as it is given for its subsidiary.

(xi) The Company did not have any term loans outstanding during the year.

(xii) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per 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 year.

For S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E

per Jayesh Gandhi Partner Membership No.: 037924

Place : Mumbai Date : May 07, 2015


Mar 31, 2014

We have audited the accompanying financial statements of MIRC Electronics Limited ("the Company"), 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 signif cant 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, f -inancial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards notif ed under the Companies Act, 1956, read with General Circular 8/2014 dated 4 April 2014 issued by the Ministry of Corporate Af airs. 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 mis-statement, 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 but not for the purpose of expressing an opinion on the ef ectiveness 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 audit evidence we have obtained is suf cient 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 Companies Act, 1956 ("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, 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 and Regulatory Requirements

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 specif ed 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) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards notif ed under the Companies Act, 1956, read with General Circular 8/2014 dated April 4, 2014 issued by the Ministry of Corporate Af airs;

(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 disqualif ed 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. Annexure referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date

Re: MIRC Electronics Limited (''the Company'')

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

(b) All fixed assets were physically verif ed by the management in the previous year in accordance with a planned programme of verifying them once in three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verif cation.

(c) There was no disposal of a substantial part of fixed assets during the period.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of physical verification of inventory 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 is maintaining proper records of inventory and no material discrepancies were noticed on physical verif cation.

(iii) (a) The Company has granted loan to three parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 356 lakhs and the year-end balance of loans granted to such parties was Rs. 125 lakhs.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the interest of the Company.

(c) The loans granted are re-payable on demand. We are informed that the loans have been repaid on demand and thus, there has been no default on the part of the parties to whom the money has been lent. The payment of interest has been regular.

(d) There is no overdue amount of loans granted to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(e) According to information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (e) to (g) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the company in respect of these areas.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

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

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

(viii) We have broadly reviewed the books of account 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, related to the products manufactured and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax customs duty, excise duty cess and other material statutory dues have not been regularly deposited with the appropriate authorities and there have been serious delays in large number of cases. The said delayed statutory dues are subsequently paid.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Nature of Financial Year Forum where Dispute is Pending Amount in dues Lakhs

Excise Duty 1999 - 2000 & 2005 - 2006, 2004 to 2010 CESTAT 230.44 1998 – 1999 High Court 10.00

1997 - 1998, 1999 - 2000, 2001 - 2005, 2010 to 2012 Commissioner of Excise & Custom 56.43

Service Tax 2004 – 2011 Service Tax Appellate Tribunal 612.00

2003 - 2004, 2005 - 2006, 2006 - 2007, 2007 – 2008 Revisional Board 181.38

2005 – 2006 Additional Commissioner 13.20 2009 – 2010 Assessing Authority 318.84

2008 – 2009 Commissioner 47.04

1997 - 1998, 1999 - 2000, 2000 - 2001, 2003 - 2004, Deputy Commissioner of Commercial Taxes 32.08

2004 - 2005, 2005 - 2006, 2006 - 2007, 2007 - 2008,

2009 - 2010 Sales Tax

2000 - 2001, 2008 - 2009, 2011 - 2012, 2012 – 2013 Deputy Commissioner (Appeals) 1,773.35 (Central &

1991 - 1992, 2002 - 2003, 2003 - 2004, 2004 - 2005, 2005 - High Court 322.08 State)

2006, 2006 - 2007, 2007 – 2008

2003 - 2004, 2005 - 2006, 2006 - 2007, 2007 - 2008, Joint Commissioner 341.80

2010 - 2011

2006 - 2007, 2009 - 2010, 2010 – 2011 Joint Commissioner of Commercial Taxes (Appeal) 18.88 2002 - 2003, 2003 - 2004, 2005 - 2006, 2006 – 2007 Tribunal 65.30 2008 – 2009 Board of Madhya Pradesh Commercial Taxes 11.58

2005 – 2006 Joint Commissioner Appeals 651.66

Income Tax 2009 – 2010 CIT (Appeals) 110.77

(x) The Company has no accumulated losses at the end of the financial year but it has incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benef t fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by its wholly owned subsidiary from banks, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company as it is given for wholly owned subsidiary.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans 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 funds raised on short term basis have not been used for long term investment, however funds infused by the promoters and funds released by way of reduction in working capital have been utilized for meeting loss incurred during the year.

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

(xix) The Company did not have any outstanding debentures during the year.

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

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no material fraud on or by the Company has been noticed or reported during the year.

For S. R. Batliboi & Co. LLP

ICAI Firm registration number: 301003E

Chartered Accountants

per Ravi Bansal

Partner

Membership No: 49365

Place : Mumbai Date : May 15, 2014


Mar 31, 2013

1. Report on the Financial Statements

We have audited the accompanying fnancial statements of MIRC ELECTRONICS LIMITED (''the Company''), which comprise the Balance Sheet as at March 31, 2013, and the Proft and Loss Statement and Cash Flow Statement for the year then ended, and a summary of signifcant accounting policies and other explanatory information.

2. Management''s Responsibility for the Financial Statements

Management of the Company is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows 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 fnancial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

3. Auditor''s Responsibility

Our responsibility is to express an opinion on these fnancial 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 requirement and plan and perform the audit to obtain reasonable assurance about whether the fnancial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amount and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fnancial 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 fnancial 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 reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the fnancial statements. We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit opinion.

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us, the fnancial 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:

(i) In the case of the Balance Sheet, of the state of afairs of the Company as at March 31, 2013;

(ii) In the case of the Proft and Loss Statement, of the loss for the year ended on that date; and

(iii) In the case of the Cash Flow Statement, of the cash fows for the year ended on that date.

5. Emphasis of Matters

(i) We draw attention to Note no. 29 of the Financial Statements with regards to the claim receivable from the Insurance Company and outstanding of Rs. 4995.50 lacs as on the balance sheet date. The Management of the Company is confdent of recovery of the full amount and therefore no further provision has been made. Our opinion is not qualifed in respect of this matter.

(ii) We also draw attention to Note no. 34 of the fnancial statements relating to excess managerial remuneration of Rs. 65.07 lacs charged to the proft and loss statement of the current year, which is subject to the approval of the Central Government. Our opinion is not qualifed in respect of this matter.

6. Report on Other Legal and Regulatory Requirements

(i) As required by the Companies (Auditor''s Report) order, 2003 issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement of the matters specifed in paragraph 4 and 5 of the said order.

(ii) Further to our comments in the Annexure referred to in Paragraph 6 (i) above, as required by section 227(3) of the Act, we report that;

(a) 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;

(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, Proft and Loss Statement and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, Proft and Loss Statement and Cash Flow Statement dealt herewith comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956;

(e) on the basis of the written representations received from the Directors and taken on records by the Board of Directors, none of the Director is disqualifed, as at the balance sheet date, from being appointed as a Director in terms of section 274 (1) (g) of the Companies Act, 1956;

(f) since the Central Government has not issued any notifcation 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.

Referred to in paragraph 6 (i) of the Auditors Report of even date of MIRC ELECTRONICS LIMITED for the year ended March 31, 2013.

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

(b) According to the information and explanations given to us, the Company has a regular programme of physical verifcation by which a substantial portion of the fxed assets has been physically verifed by the management during the year. In our opinion, the frequency of verifcation of the fxed assets by the management is reasonable having regard to the size of the Company and the nature of its assets. To the best of our knowledge, no material discrepancies were noticed on verifcation conducted during the year as compared with the book records and the same have been appropriately dealt with in the books of account.

(c) Fixed assets disposed of during the year were not substantial to afect Going Concern Assumption.

(ii) (a) Inventories have been physically verifed during the year by the Management. In our opinion, the frequency of verifcation is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verifcation of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verifcation as compared to the book records were not material and have been properly dealt with in the books of account.

(iii) (a) The Company has granted unsecured loan to three parties covered in the register maintained under Section 301 of the Companies Act, 1956. The outstanding amount as at the balance sheet date and maximum amount outstanding during the year is Rs. 356 lacs and Rs. 604 lacs respectively.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions on which said loans have been granted are not, prima facie, prejudicial to the interest of the Company.

(c) As per the repayment terms of the loan no amount is due, however an amount of Rs. 208.70 lacs is prepaid and the interest is received as per the terms on due date.

(d) The Company has not taken any unsecured loan from parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fxed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any major weakness in the internal control system.

(v) To the best of our knowledge and belief and according to the information and explanations given to us:

a) The particulars of contracts or arrangements referred to in Section 301 that need to be entered in the Register maintained under the said section have been so entered.

b) During the year, there are transactions of purchase of services, exceeding rupees fve lacs per annum, from one party covered under section 301 of the Companies Act, 1956. As per the information and explanation provided to us, the said purchases of services are of a special nature and therefore, comparative prices are not available.

(vi) The Company has not accepted any deposits from the public and hence section 58A and 58AA of the Companies Act, 1956 and rules framed there under are not applicable to the Company.

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

(viii) According to the information and explanations given to us, the Central Government has prescribed maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 for the products manufactured by the Company. We have broadly reviewed the books of account maintained and in our opinion; prima facie, the prescribed accounts and records have been made and maintained by the Company. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) According to the information and explanations provided to us, the Company is generally regular in depositing undisputed statutory dues including Provident fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise duty, cess and other applicable statutory dues with the appropriate authorities. No undisputed statutory dues payable were in arrears as at March 31, 2013, for a period of more than six months from the date they became payable.

(x) The Company does not have accumulated losses as at March 31, 2013 and has incurred cash loss during the current fnancial year covered by our audit and in the immediately preceding fnancial year.

(xi) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to any fnancial institutions or banks.

(xii) According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi / mutual beneft fund / society. The provisions of clause 4 (xiii) of the Order, therefore, are not applicable to the Company.

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

(xv) According to the information and explanations given to us, the Company has given a guarantee of Rs. 2132 lacs for loans taken by one of its wholly owned subsidiaries from bank. In our opinion, the terms and conditions of the guarantee are, prima facie, not considered prejudicial to the interest of the Company as it is given for the wholly owned subsidiary.

(xvi) In our opinion and according to the information and explanations given to us, there were no term loans raised during the year.

(xvii) I n our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have not been utilised for long term investment.

(xviii) A c c o r ding to the information and explanations given to us, during the year, 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.

(xix) According to the information and explanations given to us, the Company has not issued any secured debentures, which are outstanding during the year.

(xx) During the year, the Company has not raised any money by way of a public issue.

(xxi) To the best of our knowledge and belief and according to 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.

For N. M. RAIJI & CO.

Chartered Accountants

Firm Registration No.108296W

J. M. GANDHI

Place : Mumbai Partner

Date : May 14, 2013 Membership No: 37924


Mar 31, 2012

1. We have audited the attached Balance Sheet of MIRC Electronics Limited ('the Company') as at March 31, 2012 and also the related Profit and Loss Statement and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with standards on auditing 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 (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 (hereinafter to be referred to as "the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order, to the extent applicable.

4. Without qualifying our opinion, we draw attention to Note no. 28(1) to the financial statements in respect of fire at one of the Company's manufacturing plant and assessment of loss by the management. In absence of any confirmation from the insurance company, we have relied on the management assessment.

5. Further to our comments in the Annexure referred to in paragraph 3 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 Statement 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 Statement and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from the directors as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) of sub- section (1) of Section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon 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 March 31, 2012;

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

Referred to in paragraph 3 of the Auditors report of even date of MIRC Electronics Limited for the year ended March 31, 2012.

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

b) According to the information and explanations given to us, the Company has a regular programme of physical verification by which a substantial portion of the fixed assets has been physically verified by the management during the year. In our opinion, the frequency of verification of the fixed assets by the management is reasonable having regard to the size of the Company and the nature of its assets. To the best of our knowledge, no material discrepancies were noticed on verification conducted during the year as compared with the book records and the same have been appropriately dealt with in the books of accounts.

c) During the year certain manufacturing assets was destroyed by fire. However it does not affect the going concern assumption as the Company has other manufacturing location.

(ii) a) Inventories have been physically verified by the Management during the year. 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 for physical verification of the inventories followed by the management were generally reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion the Company is maintaining proper records of inventory. The discrepancies noticed between the physical stocks and the book stocks were not material and have been properly dealt with in the books of account.

(iii) a) The Company has granted unsecured loan to three parties covered in the register maintained under Section 301 of the Companies Act, 1956. The outstanding amount as at the balance sheet date and maximum amount outstanding during the year is Rs 604.00 lacs and Rs 1094.00 lacs respectively.

b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions on which said loans have been granted are not, prima facie, prejudicial to the interest of the Company.

c) As per the repayment terms of the loan no amount is due, however an amount of Rs 490 lacs is prepaid and the interest is received as per the terms on due date.

d) The Company has not taken any unsecured loan from parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, generally there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system.

(v) a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the particulars of contracts and arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been properly entered in the said register.

b) During the year, there are transactions of purchase of services, exceeding rupees five lacs per annum, from one party covered under section 301 of the Companies Act, 1956. As per the information and explanation provided to us, the said purchases of services are of a special nature and therefore, comparative prices are not available.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA of the Companies Act, 1956 and the rules framed there under with regard to the deposits accepted from the public. We are informed by the Management that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal in this regard.

(vi) In our opinion, the Company has adequate system of internal audit, which is commensurate with the size and nature of its business.

(vii) We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Central Government under Section 209(1) (d) of the Companies Act, 1956 for maintenance of cost records in respect of products manufactured and are of the opinion that, prima facie, the prescribed accounts and records have been maintained by the Company. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(viii) a) According to the information and explanations provided to us, the Company is generally regular in depositing undisputed statutory dues including Provident fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise duty, Service Tax, cess and other applicable statutory dues with the appropriate authorities.

b) According to the information and explanations given to us, the details of statutory dues which have not been deposited with the concerned authorities on account of dispute are given below:

Nature of Relevant Financial Year Forum where Dispute Is Pending Amount dues involved (Rs. in Lacs)

Central 1998-99 High Court 72.69 Excise 1997-98, 1999-2000, 2001-05, 2005-06 Commissioner Central Excise 54.25

1999-2000, 2005-06 Excise Appellate Tribunal 181.10

1997-98 Board of Madhya Pradesh Commercial Taxes, Bhopal 9.72

1991-92, 2002-08 High Court 320.96

2007-08 Supreme Court 0.55

1992-94, 1995-99, 2000-04, Commissioner 39.20 2006-07, 2008-09

2003-04, 2005-07 Revisional Board 187.49

Sales Tax 2005-06 Deputy Commissioner Sales Tax 5.09

2008-09 Deputy Excise and Taxation Commissioner 3.98

1997-98, 1999-01, 2003-05, 2006-08, Deputy Commissioner of Commercial Taxes 35.12

2005-08 Additional Commissioner Sales Tax 24.96

2008-09 Assistant Commissioner (Appeal) 38.03

2002-04 Tribunal 58.87

2001-02, 2003-04, 2005-06, 2006-07 Joint Commissioner - Sales Tax 3.04

Income Tax 2007-08 CIT (Appeals) 77.69

Customs 1998-99, 2001-02, 2008-11 Commissioner of Customs 311.36

Service Tax 2004-2011 Service Tax Appellate Tribunal 30462.31

(ix) The company does not have accumulated losses and has incurred cash losses during the financial year and has not incurred cash loss in immediately preceding financial year.

(x) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institutions or banks.

(xi) According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xii) The Company is not a chit fund or a nidhi/mutual benefit fund/society. The provisions of clause 4 (xiii) of the Order, therefore, are not applicable to the Company.

(xiii) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, and debentures. However, it has dealings in Mutual Fund units during the year. For the transactions in Mutual fund units the Company has maintained proper records and has made timely entries therein. All the shares, securities and other investments are held by the Company in its own name.

(xiv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantee for loan taken by its subsidiary from bank is not, prima facie, prejudicial to the interest of the Company.

(xv) In our opinion and on the basis ofthe information and explanation given to us, the term loans have been applied for the purpose for which they were raised other than amounts temporarily invested pending utilisation of the funds for the stated use.

(xvi) In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have not been utilised for long term investment.

(xvii) According to the information and explanations given to us, during the year, 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.

(xviii) According to the information and explanations given to us, the Company has not issued any secured debentures, which are outstanding during the year.

(xix) During the year, the Company has not raised any money by way of a public issue.

(xx) To the best of our knowledge and belief and according to 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.

For N. M. RAIJI & CO.

Chartered Accountants

Firm Registration No.108296W

J. M. GANDHI

Place : Mumbai Partner

Date : May 29, 2012 Membership No: 37924

 
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