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Auditor Report of Precision Electronics Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Precision Electronics Limited ("the company"), which comprise the Balance Sheet as at 31st March 2015, the Statement of Profit and Loss, the 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 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 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 provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We 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 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 the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give 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 operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by 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 financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 31st March, 2015, and 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 - 'A' statement on the matters specified in paragraph 3 & 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes 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, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid 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 31st March, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 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, we report that:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 27.1 to the financial statements,

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

iii. There were no amounts which required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE -'A' TO INDEPENDENT AUDITORS REPORT

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 regular intervals. No material discrepancies were noticed during such verification;

ii. (a) The inventories excluding material in transit have been physically verified during the year by the management. In our opinion, the frequency of such verification is reasonable;

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

(c) The Company is maintaining proper records of inventories. The discrepancies noticed on physical verification of Inventories, wherever material, have been properly dealt with in the books of account;

iii. The Company has not granted any loans, secured or unsecured, to the companies, firms and other parties covered in the register maintained under Section 189 of the Companies Act. Accordingly, the provisions of clause (iii)(a) & (b) of the paragraph 3 & 4 of the order are not applicable;

iv. In our opinion and according to the information and explanations given to us, there is 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 continuing failure to correct major weaknesses in internal control system;

v. The Company has not accepted any deposit within the meaning of the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under. Therefore the provisions of clause (v) of the paragraph 3 & 4 of the order are not applicable;

vi. We have broadly reviewed the accounts and records maintained by the Company pursuant to the rules made by the Central Government for maintenance of cost records under Sub-Section (1) of Section 148 of the Companies Act, and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However we have not made a detailed examination of the records with a view to determining whether they are accurate and complete;

vii. (a) Undisputed statutory dues including Provident Fund, Employees' State Insurance, and Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid statutory dues were in arrears as at 31st March 2015 for a period of more than six months from the date they became payable;

(b) According to the records of the Company and explanations given to us, there are disputed dues of Income Tax, Service Tax, Entry Tax & Cess aggregating to Rs. 6,61,591 which have not been deposited. The details of the disputed dues as at 31st March, 2015 are mentioned hereunder:

Name of the Statute Nature of Dues Period / Year

The Central Excise Availment of 04/2009 - 03/2011 Act 1944 Cenvat Credit

Central Sales Tax Central Sales Tax 2010-2011 Act 1956

Central Sales Tax Central Sales Tax 2011-2012 Act 1956

Central Sales Tax Central Sales Tax 2011-2012 Act 1956

The Uttar Pradesh Value Added Tax 2011-2012 Value Added Tax Act, 2008

Name of the Statute Amount Forum Before which (Rs. in Lakhs) dispute is pending

The Central Excise 1,89,918 Custom Excise and Act 1944 Service Tax Appellate Tribunal

Central Sales Tax 34,473 Additional Act 1956 Commissioner Sales Tax Appeals

Central Sales Tax 1,25,000 Additional Act 1956 Commissioner Sales Tax Appeals

Central Sales Tax 77,200 Additional Act 1956 Commissioner Sales Tax Appeals

The Uttar Pradesh 2,35,000 Additional Value Added Tax Commissioner Sales Act, 2008 Tax Appeals

(c) The Company is not required to transfer any amount to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under.

viii. The Company has no accumulated losses and has not incurred cash losses during the financial year covered by our audit; however the company has incurred cash loss in the immediately preceding year.

ix. In our opinion and according to information and explanations given to us, the company has not defaulted in repayment of dues to a Financial Institution or Banks;

x. In our opinion and according to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or Financial Institutions;

xi. In our opinion, the term loans have been applied for the purpose for which they were obtained;

xii. Based upon the audit procedures performed and 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 course of our audit.

For Rajendra K. Goel & Co. Chartered Accountants FRN-001457N

R.K Goel Place: New Delhi (Partner) Date : 28th May, 2015 Membership No: 006154


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate affairs in respect of section 133 of the Companies Act 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity 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 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 March 31, 2014;

b) in the case of 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 specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) 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 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of corporate affairs in respect of section 133 of the Companies Act 2013;

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

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

The Annexure referred to in paragraph 1 under the heading "report on other legal & regulatory requirements" of the our report of even date

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

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

(b) The Fixed Assets are physically verified by the management during the year based on a phased programme of verifying all assets over three years, which in our opinion is reasonable having regard to the size of the Company and the nature of its fixed assets. The discrepancies noticed on such verification were not material and have been properly dealt with in the books of account;

(c) Fixed assets disposed off during the year, are negligible so as to affect the Company as a going concern;

(ii) (a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals;

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

(c) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records;

(iii) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, 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. Consequently, the provisions of clauses iii (a), iii (b), iii(c) and iii (d) of the order are not applicable to the Company;

(b) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has taken unsecured loan from directors of the company, the maximum amount during the year being Rs 5,47,97,915/- (Previous year Rs. 5,30,97,915/-) and at the year end Rs. 2,23,75,570/- (Previous year Rs. 5,30,97,915/-) covered under the register maintained under Section 301 of the Companies Act, 1956;

(c) In our opinion and having regard to the loan taken by the company , the rate of interest and other terms and conditions wherever stipulated are not prima facie prejudicial to the interest of the company;

(d) Payment of principal amount and interest are also regular as stipulated;

(iv) In our opinion, 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 payment for expenses and for sale of goods. During the course of our audit we have not observed any continuing failure to correct major weaknesses in internal control system;

(v) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section;

(b) Based on the audit procedures applied by us and according to the information and explanations given to us we are of the opinion that the transaction made in pursuance of contracts/ arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs.5,00,000 in respect of each party during the year have been made at prices which appear reasonable as per information available to the company.

(vi) The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956;

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

(viii) We have broadly reviewed the books of accounts maintained by the company pursuant to the rule made by the Central Government for the maintenance of the cost records under section 209 (I)(d) of the Companies Act, 1956 and are of the opinion prima facie, the prescribed account and records have been made and maintained;

(ix) (a) As per records produced before us and according to the information and explanations given to us the company is generally regular in depositing undisputed statutory dues applicable to it like provident fund, Investor Education & Protection Fund, Employees State Insurance, Income Tax, Customs duty, Excise Duty, Cess etc. with appropriate authorities, and there were no arrears of such dues at the year end which have remained outstanding for a period of more than six months from the date they became payable;

(b) As per records produced before us and according to the information and explanations given to us there are no dues of Income Tax, Sales tax, Customs duty, Wealth Tax, Service tax, Excise Duty or Cess which have not been deposited on account of any dispute;

(x) The Company does not have any accumulated losses at the end of the financial year and has incurred cash losses in the current year. However there is no cash loss in the immediately preceding financial year;

(xi) Based on our audit procedures and on the information and explanation given by the management, we are of the opinion that company has not defaulted in repayment of dues to any financial institution, bank or debenture holders;

(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 benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company;

(xiv) In our opinion the company is not dealing in or trading of shares, debentures and other investments. Accordingly, clause (xiv) of Para 4 of the order is not applicable;

(xv) According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution;

(xvi) In our opinion & according to the information & explanation given to us, the term loans have been applied for the purpose for which they were raised;

(xvii) According to the information & explanation given to us and an overall examination of the balance sheet of the company, we find that no fund raised on short term basis have been used for long term investment;

(xviii) Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year;

(xix) The Company has no outstanding debentures during the period under audit;

(xx) The Company has not raised any money by public issue during the year;

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

For; Rajendra K Goel & Co. Chartered Accountants F.R.N. 001457N

R. K. Goel (Partner) M.No. 006154

Place: New Delhi Dated: 30th May, 2014


Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("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.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

b) in the case of Statement of Profit and Loss, of the profit 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 ("theOrder") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books

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

d) 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.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of PRECISION ELECTRONICS LIMITED on the accounts of the company for the year ended 31st March, 2013.

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

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

(b) The Fixed Assets are physically verified by the management during the year based on a phased programme of verifying all assets over three years, which in our opinion is reasonable having regard to the size of the Company and the nature of its fixed assets. The discrepancies noticed on such verification were not material and have been properly dealt with in the books of account.

(c) Fixed assets disposed off during the year, are negligible so as to affect the Company as a going concern.

(ii) (a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

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

(c) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

(iii) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, 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. Consequently, the provisions of clauses iii (b), iii(c) and iii (d) of the order are not applicable to the Company.

(e) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has taken unsecured loan from two directors of the company, the maximum amount during the year being Rs. 5,30,97,915/- (Previous year Rs. 4,03,47,915/-) and at the year end Rs. 5,30,97,915/- (Previous year Rs. 4,03,47,915/-) and from a company in which one director of the company was interested maximum amount during the year being Rs. Nil (Previous year Rs. 70,00,000/-) and at the year end Rs. Nil (Previous year Rs. Nil) covered under the register maintained under Section 301 of the Companies Act, 1956.

(f) In our opinion and having regard to the loan taken by the company , the rate of interest and other terms and conditions wherever stipulated are not prima facie prejudicial to the interest of the company.

(g) Payment of principal amount and interest are also regular as stipulated.

(iv) In our opinion, 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 payment for expenses & for sale of goods. During the course of our audit we have not observed any continuing failure to correct major weaknesses in internal control system.

(v) a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b) Based on the audit procedures applied by us and according to the information and explanations given to us we are of the opinion that the particulars of the contracts or arrangements referred to section 301 of the Companies Act, 1956 have been entered into the register required to be maintained under that Section. The transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market price at the relevant time.

(vi) The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

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

(viii) We have broadly reviewed the books of accounts maintained by the company pursuant to the rule made by the Central Government for the maintenance of the cost records under section 209 (I)(d) of the Companies Act, 1956 and are of the opinion prima facie, the prescribed account and records have been made and maintained.

(ix) (a) As per records produced before us and according to the information and explanations given to us the company is generally regular in depositing undisputed statutory dues applicable to it like provident fund, Income Tax, Customs duty, Cess etc. with appropriate authorities, and there were no arrears of such dues at the year end which have remained outstanding for a period of more than six months from the date they became payable.

(b) As per records produced before us and according to the information and explanations given to us there are no dues of Income Tax, Sales tax, Customs duty, Wealth Tax, Service tax, Excise Duty or Cess which have not been deposited on account of any dispute.

(x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the current year as well as in the immediately preceding financial year.

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

(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 benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

(xiv) In our opinion the company is not dealing in or trading of shares, debentures and other investments. Accordingly, clause (xiv) of Para 4 of the order is not applicable.

(xv) According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

(xvi) In our opinion & according to the information & explanation given to us, the term loans have been applied for the purpose for which they were raised.

(xvii) According to the information & explanation given to us and an overall examination of the balance sheet of the company, we find that no fund raised on short term basis have been used for long term investment.

(xviii) Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

(xix) The Company has no outstanding debentures during the period under audit.

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

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

For; Rajendra K Goel & Co.

Chartered Accountants

F.R.N. 01457N

R. K. Goel

Place: New Delhi (Partner)

Dated: 23.05.2013 M.No. 6154


Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s. PRECISION ELECTRONICS LIMITED, New Delhi as at 31st March 2012, Statement of Profit & Loss and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibilities 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 auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence, supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimate made by the 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 issued by the Central Government in terms of sub-section (4A) of section 227 of the Companies Act, 1956, and on the basis of such checks as we consider appropriate and according to the information and explanation given to us, we enclose in the Annexure a statement on the matters specified in paras 4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph-3 above 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, the Company has kept proper books of accounts as required by law so far, as appears from our examination of these books.

(c). The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with the report are in agreement with the books of accounts.

(d). In our opinion, financial statements have been prepared in accordance with accounting standard 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 record by the Board of Directors, we report that none of the director is disqualified as on 31 st March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

(f). In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet, Statement of Profit & Loss and Cash Flow Statement read with Significant Accounting Policies and Notes to financial statements 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:

i) In the case of the Balance Sheet of the state of affairs of the Company as at 31st March, 2012.

ii) In the case of Statement of Profit & Loss of the loss for the year ended on that date.

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

Annexure to the Auditor's Report of Precision Electronics Limited for the year ended on 31st March, 2012 referred to in Paragraph 3 of our report of even date:

1) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of its fixed assets.

(b) The Fixed Assets are physically verified by the management during the year based on a phased programme of verifying all assets over three years, which in our opinion is reasonable having regard to the size of the Company and the nature of its fixed assets. The discrepancies noticed on such verification were not material and have been properly dealt with in the books of account.

(c) In our opinion and according to the information and explanations given to us, The Company has sold old fixed assets having a written down value amounting to Rs. 36,61,072/-.

2) (a) The management has conducted physical verification of inventory at reasonable intervals.

(b) In our opinion, the procedure for 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. The discrepancies noticed on physical verification were not material and have been properly dealt with in the books of account.

3) (a) In our opinion and according to the information and explanations given to us, 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 Companies Act, 1956.

(b) The company has taken unsecured loan from two directors of the company in which one director of the company is interested and related party (ies) covered under the register maintained under Section 301.The maximum amount during the year was Rs.4,73,47,915/- (Previous year Rs. 3,40,47,915/-) and at the year end was Rs. (Previous year Rs.3,40,47,915/-). As per the information made available to us the aforesaid loans taken by the company are repayable 2 to 3 years. In our opinion and having regard to the loan taken by the company, the rate of interest and other terms and conditions wherever stipulated are not prima facie prejudicial to the interest of the company. In respect of aforesaid loans and advances there is no overdue amount as at the year end.

4) In our opinion and according to the information and explanation 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 purchase of inventory and fixed assets and sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

5) In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956:

(a) To the best of our knowledge and belief and according to the information and explanations given to us, the transactions that needed to be entered into the register have been so entered.

(b) In our opinion and according to the information and explanations given to us the transactions made in pursuance of contract/arrangement entered in the register maintained under Section 301 of the Companies Act, 1956, are at prevailing market prices at the relevant time.

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

7) The Company has an internal audit system, which, in our opinion, is commensurate with the size and nature of its business.

8) We have broadly reviewed the books of accounts maintained by the company pursuant to the rule made by the Central Government for the maintenance of the cost records under section 209 (I)(d) of the Companies Act, 1956 and are of the opinion pritnafacie, the prescribed account and records have been made and maintained.

9) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has been generally regular in depositing undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, excise duty, customs duty, service tax and any other statutory dues applicable, during the year with the appropriate authorities. There are no outstanding statutory dues as at 31st March, 2012 for a period of more than six months from the date they become payable.

(b) As at balance sheet date there were no disputed dues of Sales Tax, VAT, Income Tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty and cess.

10) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the current year as well as in the immediately preceding financial year.

11) The company has not defaulted in repayment of dues to any banks as at the balance sheet date.

12) The Company has not granted loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13) As explained to us, the provisions of special statute applicable to Chit Fund, Nidhi or Mutual Benefit society are not applicable to the Company.

14) Based on our examination of records and information and the explanations given to us, the Company has not dealt/traded in shares, securities, debentures and other securities during the year.

15) In our opinion and according to the information and explanation given to us, the company has not given any guarantee for loans taken by others from bank or financial institution.

16) To the best of our knowledge and belief and according to the information and explanations given to us the Term Loan taken during the year has been applied for the purpose for which it was obtained.

17) On the basis of information provided by the management and our examination, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.

18) 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.

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

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

21) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

for Rajendra K. Goel & Co.

Chartered Accountants FRN: 001457N

Place : New Delhi R.K Goel

Date : May 30, 2012 Partner

Membership no.:6154

 
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