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Auditor Report of Quantum Digital Vision (India) Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of QUANTUM DIGITAL VISION (INDIA) LIMITED ("the Company"), which comprises of the Balance Sheet as at 31st March 2014, the Statement of Profit and Loss, Cash Flow Statement for the year then ended and the summary of significant accounting policies and other explanatory information.

Management 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 principles generally accepted in India including Accounting Standards referred to section 211(3C) 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.

Basis for Qualified Opinion

a) Balances of Sundry Debtors, Sundry Creditors, Loans and Advances and various other debit/credit balances are subject to confirmations and adjustments necessary upon reconciliation (refer Note No 3 of Notes to Accounts). The effect of the adjustments arising from reconciliation and settlement of the old outstanding dues and possible loss that may arise on account of non-recovery or partial recovery of such dues is not ascertained. We are unable to express an opinion about the impact thereof on the accounts and the loss for the year.

b) Non provision of interest on Secured Loan and Suppliers Credit against Imported Machineries, since as the interest is not ascertained, (refer Note No 4 of the Notes to Accounts). We are unable to express an opinion about the impact thereof on the accounts and the loss for the year.

c) Provision for liability towards leave salary and bonus and gratuity to employees is accounted for on cash basis, which is not in conformity with- Accounting Standard 15 on Accounting of Retirement benefits to Employees.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis of Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

b) In the case of the Statement of Profit and Loss, 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;

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.

Referred to in paragraph 1 under the heading "Report on Other Legal and regulatory Requirements" of our Report of even date

I. In respect of fixed assets:

(a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

(b) All the assets have not been physically verified by the management during the year but there is a regular program 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.

(c) During the year, the company has not disposed off a major part of the fixed assets.

II. In respect of its Inventories:

(a) As explained to us, inventories have been physically verified during the year by the management at year end. In our opinion, the frequency of verifications is reasonable.

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

(c) The Company is maintaining proper records of inventory. As explained to us, there was no material discrepancy noticed on physical verification of inventories as compared to the book records.

III. The company has neither taken nor granted any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clauses (iii)(b), (iii) (c) and (iii)(d), (iii)(e), (iii)(f) and (iii)(g) of the Order are not applicable.

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, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in Internal Controls System.

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

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupee five lakh in respect of each party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

VI. According to the information and explanations given to us, The company has not accepted any deposits from the public to which the provisions of Section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 apply.

VII. In our opinion, the company does not have an internal audit system commensurate with the size and nature of its business.

VIII. The maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 has not been prescribed by the Central Government.

IX. (a) (i) The company is Generally regular in depositing with appropriate authorities undisputed statutory dues including investor education protection fund, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues as applicable to it,

(ii) According to the information and explanations given to us, there are no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March, 2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of sales tax, income tax,customs duty, wealth tax, excise duty and Cess which have not been deposited on account of any dispute.

X. The accumulated losses of the company are more than fifty percent of its net worth. The company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

XI. Based on our audit procedures and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank.

XII. Based on our examination of the records and the information and explanation given to us, the company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

XIII. According to the information and explanation given to us, the company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

XIV. (According to the information and explanation given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the order are not applicable to the company.

XV. According to the information and explanation given to us, the company has not given any guarantee in favour of financial institutions or banks for loans taken by others.

XVI. According to the information and explanation given to us, the company has not raised any new term loans during the year.

XVII. According to the information and explanation given to us and on an overall examination of the Balance Sheet of the Company. We are of the opinion that no funds raised on short-term basis have been used for long-term investment by the company.

XVIII. 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.

XIX. The Company did not have any outstanding debentures during the year. Accordingly, no securities have been created.

XX. The Company has not raised any money by way of public issue during the year.

XXI. Based on our examination of the books and records of the company carried out in accordance with the generally accepted auditing practice in India and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For SHAH & TAPARIA Chartered Accountants FRN: 109463W

sd Ramesh Pipalawa Place: Mumbai Partner Date: 30/05/2014 Membership No. : 103480


Mar 31, 2013

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

Basis for Qualified Opinion

a) Balances of Sundry Debtors, Sundry Creditors, Loans and Advances and various i other debit/credit balances are subject to confirmations and adjustments necessary upon reconciliation (refer Note No 3 of Notes to Accounts). The effect of the adjustments arising from reconciliation and settlement of the old outstanding dues and possible loss that may arise on account of non-recovery or partial recovery of such dues is not ascertained. We are unable to express an opinion about the impact thereof on the accounts and the loss for the year.

b) Non provision of interest on Secured Loan and Suppliers Credit against Imported Machineries, since as the interest is not ascertained, (refer Note No 4 of the Notes to Accounts). We are unable to express an opinion about the impact thereof on the accounts and the loss for the year.

c) Provision for liability towards leave salary and bonus and gratuity to employees is accounted for on cash basis, which is not in conformity with- Accounting Standard 15 on Accounting of Retirement benefits to Employees.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis of Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

b) In the case of the 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 ("theOrder") issued by the1 -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 Independent Auditor''s Report

Referred to in paragraph 1 under the heading "Report on Other Legal and regulatory Requirements" of our Report of even date

(i) In respect of fixed assets:

(a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

(b) All the assets have not been physically verified by the management during the year but there is a regular program 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.

(c) During the year, the company has not disposed off a major part of the fixed assets.

(ii) In respect of its Inventories:

(a) As explained to us, inventories have been physically verified during the year by the management at year end. In our opinion, the frequency of verifications is reasonable.

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

(c) The Company is maintaining proper records of inventory. As explained to us, there was no material discrepancy noticed on physical verification of inventories as compared to the book records.

(iii) The company has neither taken nor granted any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clauses (iii)(b), (iii) (c) and (iii)(d), (iii)(e), (ji&£f43afld (iii)(g) of the Order are not applicable.

(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, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in Internal Controls System.

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

(b)In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupee five lakh in respect of each party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us, The company has not accepted any deposits from the public to which the provisions of Section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 apply.

(vii) In our opinion, the company does not have an internal audit system commensurate with the size and nature of its business.

(viii) The maintenance of cost records under section 209(l)(d) of the Companies Act, 1956 has not been prescribed by the Central Government.

(ix) (a)(i) The company is Generally regular in depositing with appropriate authorities undisputed statutory dues including investor education protection fund, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues as applicable to it,

(ii) According to the information and explanations given to us, there are no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March, 2013 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, there are no dues of sales tax, income tax, customs duty, wealth tax, excise duty and Cess which have not beee=35B5sited on account of anv dispute.

(x) The accumulated losses of the company are more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) Based on our audit procedures and according to the information and explanations given to us, the company has defaulted in repayment of dues to a financial institution or bank. The company has not provided for interest accrued on these loans in its books.

1 FROM BANKS Amount (Rs)

FROM FINANCIAL INSTITUTIONS

i) Hire Purchase Loan from Gujarat State Financial 4041631 Corporation

ii) Gujarat State Financial Corp. 14064805

iii) Term Loan from GSFC 15254946

Add: Interest accrued and due 13277062

Total 46638444

(xii) Based on our examination of the records and the information and explanation given to us, the company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) According to the information and explanation given to us, the company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xiv) According to the information and explanation given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the order are not applicable to the company.

(xv) According to the information and explanation given to us, the company has not given any guarantee in favour of financial institutions or banks for loans taken by others.

(xvi) According to the information and explanation given to us, the company has not raised any new term loans during the year.

(xvii) According to the information and explanation given to us and on an overall examination of the Balance Sheet of the Company. We are of the opinion that no funds raised on short-term basis have been used for long-term investment by the comapny.

(xviii) 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.

(xix) The Company did not have any outstanding debentures during the year. Accordingly, no securities have been created.

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

(xxi) Based on our examination of the books and records of the company carried out in accordance with the generally accepted auditing practice in India and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For SHAH & TAPARIA

Chartered Accountants

FRN: 1CG463W

Ramesh Pipalalwa

(Partner)

Membership No. : 103480

Place: Mumbai

Date: 27/05/2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s. QUANTUM DIGITAL VISION (I) LIMITED, as at 31st March, 2012 and also Profit & Loss Statement and 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 the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable.

4. Further to our comments in the Annexure referred to 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 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, Profit and Loss Statement and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet, Profit & Loss Statement and cash flow statement dealt with this report comply with the accounting standards referred to in sub section (3C) of section 211 of the Companies Act, 1956.

e) On the basis of information and explanation given to us and representation received from the directors of the company, We report that none of the directors is disqualified from being appointed as Director of the company under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f) Balances of Sundry Debtors, Sundry Creditors, Loans and Advances and various other debit/credit balances are subject to confirmation and adjustments necessary upon reconciliation (refer Note No 3 of Notes to Accounts). The effect of the adjustments arising from reconciliation and settlement of old outstanding dues and possible loss that may arise on account of non-recovery or partial recovery of such dues is not ascertained. We are unable to express an opinion about the impact thereof on the accounts and the loss for the year.

g) Non provision of interest on Secured Loan and Suppliers Credit against Imported machineries, since as the interest is not ascertained, (refer Note No 4 of Notes, to Accounts). We are unable to express an opinion about the impact thereof on the accounts and the loss for the year.

h) Provision for liability towards leave salary and bonus and gratuity to employees is accounted for on cash basis, which is not in conformity with- Accounting Standard 15 on Accounting of Retirement benefits to Employees.

i) Subject to our comments in para 4, (f), (g) & (h) In our opinion and to the best of our information and according to the explanation given to us, the accounts read 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:

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 Profit & 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 flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 3 of our report of even date)

(i) In respect of fixed assets:

(a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

(b) All the assets have not been physically verified by the management during the year but there is a regular program 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.

(c) During the year, the company has not disposed off a major part of the fixed assets.

(ii) In respect of its Inventories:

(a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals. In our opinion, the frequency of verifications is reasonable.

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

(c) The Company is maintaining proper records of inventory. As explained to us, there was no material discrepancy noticed on physical verification of inventories as compared to the book records.

(iii) In respect of loans, secured or unsecured, granted or taken by the company to/ from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956:

a) The Company has granted interest free loans to a company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 4.45 Lacs and the yearend balance of loan granted to such parties was Rs. 0.24 Lacs.

b) In our opinion, other terms and conditions on which loans have been granted to company listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

c) The parties have repaid the principal amounts as stipulated.

d) There is no overdue amount of loans granted to company listed in the register maintained under section 301 of the Companies Act,1956.

(e) The company had not taken any loan, secured or unsecured from company, firm and other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clauses (iii) f and (iii) g of the Order are not applicable.

(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, fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been noticed in Internal Control System.

(v) According to the information and explanations given to us, the Company has not entered into any contract or arrangement with other parties, which needs to be entered in the register maintained under Section 301 of the Companies Act, 1956.

(vi) According to the information and explanations given to us, the company has not accepted any deposits from the public during the year.

(vii) In our opinion, the company does not have an internal audit system commensurate with the size of the company and nature of its business.

(viii) The maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 has not been prescribed by the Central Government.

(ix) In respect of statutory dues:

(a) According to the records of the Company, the company is regular in depositing with appropriate authorities undisputed statutory dues including, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March 2012 for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us, details of dues of sales tax, income tax, customs duty, wealth tax, excise duty and cess which have not been deposited as on dispute are given below:

Particulars Amount (Rs)

Excise demand under adjudication 8,57,436

Sales Tax of Slivassa under appeal 1,03,481

Sales Tax under appeal 4,73,536

Income tax under appeal 25,37,354

(x) The accumulated losses of the company are more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered by our audit and not incurred cash losses in the immediately preceding financial year.

(xi) Based on our audit procedures and according to the information and explanations given to us, the company has defaulted in repayment of dues to a financial institution or bank. The company has not provided for interest accrued on these loans in its books.

FROM BANKS Amount (Rs)

FROM FINANCIAL INSTITUTIONS

i) Hire Purchase Loan from Gujarat State Financial Corporation 40,41,631

ii) Gujarat State Financial Corp. 1,40,64,805

iii) Term Loan from GSFC 1,52,54,946

Add: Interest accrued and due 1,32,77,062

Total 4,66,38,444

(xii) Based on our examination of the records and the information and explanation given to us, the company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) According to the information and explanation given to us, the company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xiv) According to the information and explanation given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the order are not applicable to the company.

(xv) According to the information and explanation given to us, the Company has not given any guarantee in favour of financial institutions or banks for loans taken by others.

(xvi) According to the information and explanation given to us, the company has not raised any new term loans during the year.

(xvii) According to the information and explanation given to us and on an overall examination of the Balance Sheet of the Company. We are of the opinion that no funds raised on short-term basis have been used for long-term investment by the Company.

(xviii) 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.

(xix) The Company did not have any. outstanding debentures during the year. Accordingly, no securities have been created.

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

(xxi) Based on our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practice in India and according to the information and explanations given to us, no fraud on or by the Company, noticed or reported during the year.

For SHAH & TAPARIA

Place : Mumbai Chartered Accountants

Date : 18/05/2012 RAMESH PIPALAWA

Partner

M. No.103840


Mar 31, 2010

1. We have audited the attached Balance Sheet of M/s. QUANTUM DIGITAL VISION (I) LIMITED as at 31st March, 2010, Profit & Loss account & Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management.

2. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation, We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable.

4. Further to our comments in the Annexure referred to 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 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 and Profit and Loss account dealt with by this report are in agreement with the books of accounts.

d) In our opinion the Balance Sheet, Profit & Loss Account and cash flow statement dealt with this report comply with the accounting standards referred to in sub section (3C) of section 211 of the Companies Act, 1956.

e) On the basis of information and explanation given to us and representation received from the directors of the company, We report that none of the directors is disqualified from being appointed as Director of the company under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f) Balances of Sundry Debtors, Sundry Creditors, Loans and Advances and various other debit/credit balances are subject to confirmation and adjustments necessary upon reconciliation (refer Note No 5 of Schedule The effect of the adjustments arising from reconciliation and settlement of old outstanding dues and possible loss that may arise on account of non-recovery or partial recovery of such dues is not ascertained. We are unable to express an opinion about the impact thereof on the accounts and the loss for the year.

g) Non provision of interest on Secured Loan and Suppliers Credit against Imported machineries, since as the interest is not ascertained, (refer Note No 6 of Schedule L) We are unable to express an opinion about the impact thereof on the accounts and the loss for the year.

h) Provision for liability towards leave salary and bonus and gratuity to employees is accounted for on cash basis, which is not in conformity with- Accounting Standard 15 on Accounting of Retirement benefits to Employees.

i) Subject to our comments in para 4.(f),(g) & (h) in our opinion and to the best of our information and according to the explanation given to us, the accounts read 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:

i) In the case of the Balance Sheet of the State of affairs of the Company as at 31st March 2010.

And

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

iii) In the case of the cash flow statement of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our report of even date)

(i) In respect of fixed assets:

(a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

(b) All the assets have not been physically verified by the management during the year but there is a regular program 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 wen. noticed on such verification.

(C) During the year, the company has not disposed off a major part of the fixed assets.

(ii) - In respect of its Inventories:

(a) As explained to us, inventories have been physically verified during the year by the management at regular intervals. In our opinion, the frequency of verifications is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification if 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 inventory. As explained to us, there was no material discrepancy noticed on physical verification of inventories as compared to the book navivany

(iii) In respect of loans, secured or unsecured, granted or taken by the company to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956:

(a) The company had taken interest free loan from 2 parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs,84.73 Lacs and the year end balance of loans taken from such parties was Rs.84.73 Lacs.

(b) According to the information and explanations given to us, other terms and conditions on which loans have been taken from/granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

(c) The company is not regular in repaying the principal amounts as stipulated and in the payment of interest. The parties have not repaid the principal amounts as stipulated and have not been regular in the payment of interest if any.

(d) There is an overdue amount of toans taken from or granted to companies, firms or other parses listed 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, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in interna! controls,

(v) According to the information are explance given to us, the Company has not entered into any control or manejement it with other parties, which needs to be entered in the register maintained under Section 301 of the Companies Act, 1956.

(vi) According to the information and explanations given to us, the company has not accepted any deposits from the public during the year.

(vii) In our opinion, the company does not have an internal audit system commensurate with the size and nature of its business.

(viii) The maintenance of cost records under section 209(l)(d) of the Companies Act, 1955 has not been prescribed by the Central Government.

(ix) In respect of statutory dues:

(a) According to the records of the Company, the company is regular in depositing with appropriate authorities undisputed statutory dues including, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it. However, in certain cases, the company has not deposited undisputed dues of Tax deducted at source in time

(b) According to the information an explanations given to us, no undisputed amounts payable in respect of income tax , wealth tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March 2010 for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us, details of dues of sales tax, income tax, customs duty, wealth tax, excise duty and cess which have not been deposited as on 31st March 2010 on account of any dispute are given below:

Particulars Amount (Rs)

Excise demand under adjudication 8,57,436

Sales Tax of Silvassa under appeal 1,03,481

Sales Tax under appeal 4,73,536

Income tax under appeal 25,37,354

(x) The accumulated losses of the company are more than fifty percent of its net worth. The company has incurred cash fosses during the financial year covered by our audit and the immediately preceding financial year.

(xi) Based on our audit procedures and according to the information and explanations given to us, the company has defaulted in repayment of dues to a financial institution or bank. The company has not provided for interest accrued on these loans in its books.

FROM BANKS Amount (Rs)

FROM FINANCIAL INSTITUTIONS

i) Hire Purchase Loan from Gujara State Financial 4041631

Corporation

ii) Gujarat state Financial Corp. 14064805

iii) Trerm Loan from GSFC

Add: Interest accrued and due 13277062

Total 46638444

(xii) Based on our examination of the records and the information and explanation given to us, the company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) According to the information and explanation given to us, the company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies Audtors Report) Order, 2003 are not applicable to the company.

(xiv) According to the information and explanation given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the order are not applicable to the company.

(xv) According to the information and explanation given to us, the terms and conditions on which the company has given guarantees for loan taken by others from banks or financial institutions are not prejudicial to the interest of company.

(xvi) According to the information and explanation given to us, the company has not raised any new term loans during the year.

(xvii) According to the information and explanation given to us and on an overall examination of the Balance Sheet of the Company. We are of the opinion that no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short term assets except permanent working capital.

(xviii) 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.

(xix) The Company did not have any outstanding debentures during the year. Accordingly, no securities have been created.

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

(xxi) In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit that causes the financial statements to be materially misstated.

PLACE : MUMBAI. For SHAH & TAPARIA

Chartered Accountants

DATE : 25/05/2010

RAMESH PIPALAWA

Pertner

M.No:103840

 
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