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Auditor Report of SPEL Semiconductor Ltd.

Mar 31, 2015

1. We have audited the accompanying standalone financial statements of SPEL SEMICONDUCTOR LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

2. 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 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 provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making 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

3. 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 there under.

4. 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.

5. 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 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 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 the Company's Directors, as well as evaluating the overall presentation of the financial statements.

6. 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

7. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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, and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

9. 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 is 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 the written representations received from the directors as on March31, 2015 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.

10. 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:

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT ON THE STANDANDALONE FINANCIAL STATEMENTS

Referred to in paragraph 8 under 'Report on Other Legal and Regulatory Requirements' section of our report of even date on the financial statements of SPEL SEMICONDUCTOR LIMITED ("the Company") for the year ended March 31, 2015)

(i) In respect of its fixed assets:

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

(b) the fixed assets were physically verified by the Management during the year under a phased programme of verification, which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the Company, nature and value of its assets. According to the information and explanations given to us, no material discrepancies have been noticed during the year on such verification.

(ii) In respect of its inventories:

(a) we are informed that the 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 raw materials, spares and consumables and finished goods followed by the

i. The Company has, in accordance with the generally accepted accounting practice, disclosed the impact of pending litigations on its financial position in its financial statements - Also Refer Note 28e(i) 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 under the applicable law or accounting standards.

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

Management are reasonable and adequate in relation to the size of the Company and the nature of its business. The procedures of physical verification of work-in-progress (including box stock) adopted by the management and the periodicity of verification of the said stock need to be improved considering the quantity and value of the said stocks.

(c) in our opinion and according to the information and explanations given to us, the Company is generally maintaining proper records of its inventories and material discrepancies, if any, noticed on physical verification were properly dealt with in the books of account.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered 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 generally an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventories and fixed assetsand for sale of goods and services and for payment of expenses. Further, on the basis of our examination of the books and records of the Company, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

(v) According to information and explanations given to us, the Company has not accepted any deposit from public during the year, and accordingly, the provision of clause (v) of paragraph 3 of the Companies (Auditors Report) order, 2015 are not applicable to the Company.

(vi) In our opinion and according to the information and explanations given to us, the requirement for maintenance of cost records pursuant to the Companies (Cost Records and Audit) Rules, 2014 specified by the Central Government of India under Section 148 of the Companies Act, 2013 are not applicable to the Company for the year under audit.

(vii) According to the information and explanations given to us and the books of account examined by us, in respect of statutory dues:

a) the Company is generally regular in depositing undisputed statutory dues including , sales tax, wealth tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities during the year. The Company is not regular in depositing undisputed provident fund, employee state insurance and income tax(TDS),andproperty dues during the year.

b) There were no undisputed amounts payable in respect of such statutory dues outstanding as at March 31, 2015 for a period of more than six months from the date they became payable.

c) There are no dues of sales tax, wealth- tax, service tax , customs duty, excise duty, value added tax and cess which have not been deposited on account of any dispute. Details of dues towards income tax that have not been deposited as at March 31, 2015 on account of disputes are as stated below:

Name of Disputed Period to Forum where the the statue dues which the dispute is (Rs. in lakhs) amount relates pending

IncomeTax 37.62 Assessment Commissioner of year 2005-06 Income Tax (Appeals)

IncomeTax 2.57 Assessment Assessing Officer year 2005-07 under Section 154

d) There are no amounts required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 and rules made there under.

(viii) The Company does not have any accumulated losses as at March 31, 2015 and has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(ix) In our opinion, the Company has defaulted in repayment of Rupee term loan dues to a bank as at the end of theyear. The amount and period of default is as under:

Sl. Particulars Amount of Due Date Period of No. Default Default (Rs. In lakhs)

1. Principal 140.70 January 25, 2015 2 months

2. Interest 287.90 January 31, 2015, 3 months February 28, 2015, and March 31,2015

(x) According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from banks or financial institutions.

(xi) According to information and explanation given to us the Company has not availed any term loan during the year and accordingly the provisions of clause (xi) of Paragraph 3 of the Companies ( Auditors Report) order, 2015 are not applicable to the Company.

(xii) To the best of our knowledge and belief, and according to the information and explanations given to us, and considering the size and nature of the Company's operations, no fraud by the Company has been noticed or reported during the year. We have been informed that a theft of imported materials by third parties, while in transit to the factory aggregating ' 37.10 lakhs had occurred during the year under audit. Investigations are in progress and insurance claims have been made for the entire cost incurred by the company disclosed in Note 14 to the financial statements.

For M.S.Krishnaswami & Rajan Chartered Accountants Firm Regn. No. 01554S





Date : April 28, 2015 M.S.Murali - Partner Place :Chennai Membership No. 26453


Mar 31, 2014

We have audited the accompanying financial statements of SPEL Semicoductor 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 notified under 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.

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity''s preparation and fair presentation of the financial statements in order to design audit procedures that

are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of 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 Account, 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 ("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, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under 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 Independent Auditors'' Report

Referred to in paragraph 1 under ''[Report on other Legal and Regulatory Requirements'' Section of 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 :

1. (a) The Company has maintained proper

records showing full particulars including quantitative details and situation of its fixed assets.

(b) As explained to us, the fixed assets are physically verified by the management under a phased programme of verification, which in our opinion is reasonable having regard to the nature and value of its assets. In accordance with the said phased programme of verification of fixed assets, plant and machinery was verified during the year by the management and no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, substantial portion of fixed assets has not been disposed off during the year and therefore our comment on whether the going concern has been affected by such disposal does not arise.

2. (a) According to the information and explanation given to us, physical verification of inventory had been carried out by management once during the year.

(b) In our opinion and based on our observation of physical verification/ examination of records of verification, the procedures adopted for verification of Raw materials, spares and consumables are reasonable and adequate in relation to the size of the Company and the nature of its business. As regards work in progress(including box stock), according to the records, documents, information and explanations provided by the management the physical verification was carried out in accordance with the procedure explained by the management, which appears to be 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, material discrepancy, noticed on physical verification of inventory by the management as compared to book records has been properly dealt with in the books of account.

3. (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.

(b) The Company has taken unsecured loans in the form of fixed deposits from two parties listed in the register maintained under Section 301 of the Companies Act, 1956.The total maximum amount raised during the year was Rs.825 lakhs and the year-end balance is Rs.1,025 lakhs. The rate of interest and other terms and condition of loans taken by Company are not prima facie prejudicial to interest of the Company. Interest due on December 31, 2013 and March 31, 2014 amounting to '' 41 lakhs is outstanding at the year end.

4. 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 inventories and fixed assets, for sale of goods and services and for payment of expenses. During the course of our audit, no major instance of continuing failure to correct any major weaknesses in the internal control system has been noticed.

5. 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) As per information and explanations given to us and in our opinion, the transactions entered into by the Company with parties covered under Section 301 of the Act exceeding five lacs rupees during the year have been made at prices which are reasonable having regard to the prevailing market prices for such services at the relevant time.

6. In our opinion and according to information and explanations given to us the company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58-A and 58 AA of the Act or any other relevant provisions of the Act and the rules framed thereunder, where applicable, with regard to deposits accepted and no order under the aforesaid Sections has been passed by the Company Law Board or any other authority on the Company.

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

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. (a) According to the records of the Company, 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 to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no statutory dues as on 31st of March, 2014 outstanding 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 is no amounts payable in respect of wealth tax, sales tax excise duty and cess which have not been deposited on account of any disputes.

Details of dues towards income tax that have not been deposited on account of dispute are as stated below :

Name of Nature of Period to Amount Forum the statue dues which the (Rsin where amount lakhs) thedispute relates is pending

The Income Income Financial 37.62 CIT(A) tax Act, Tax year 1961 2004-05

The Income Income Financial 2.57 Assessing tax Act, Tax year Officer 1961 2005-06 u/s 154

10. The Company does not have any accumulated loss as at March 31,2014 and has not incurred cash loss during the financial year covered by our audit or in the immediately preceding financial year.

11. Based on our audit procedures and on 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 or debenture holders. In respect of the principal amount of '' 85.18 lakhs due on January 25, 2014 to a Bank, the same was paid on April 25, 2014.

12. 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.

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of clause (xiii) of the Order is not applicable to the Company.

14. According to information and explanations given to us, the Company is not trading in shares, Securities, debentures and other Investments.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from banks or financial institutions.

16. Based on our audit procedures and on the information given by the management, we report that the Company has not availed any term loan during the year and hence our comments on application of funds so raised do not arise.

17. Based on the information and explanations given to us and on an overall examination of the financial statements of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

18. 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.

19. The Company has no outstanding debentures during the period under audit.

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

21. 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 any such occurrence by the management.

We have audited the accompanying financial statements of SPEL Semicoductor 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 notified under 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.

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity''s preparation and fair presentation of the financial statements in order to design audit procedures that

are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of 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 Account, 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 ("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, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under 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.

For M.S.Krishnaswami & Rajan Chartered Accountants Firm Regn. No. 01554S

Place : Chennai M.S.Murali - Partner Date : April 29, 2014 Membership No. 26453

Annexure to Independent Auditors'' Report

Referred to in paragraph 1 under ''[Report on other Legal and Regulatory Requirements'' Section of 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 :

1. (a) The Company has maintained proper

records showing full particulars including quantitative details and situation of its fixed assets.

(b) As explained to us, the fixed assets are physically verified by the management under a phased programme of verification, which in our opinion is reasonable having regard to the nature and value of its assets. In accordance with the said phased programme of verification of fixed assets, plant and machinery was verified during the year by the management and no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, substantial portion of fixed assets has not been disposed off during the year and therefore our comment on whether the going concern has been affected by such disposal does not arise.

2. (a) According to the information and

explanation given to us, physical verification

of inventory had been carried out by management once during the year.

(b) In our opinion and based on our observation of physical verification/ examination of records of verification, the procedures adopted for verification of Raw materials, spares and consumables are reasonable and adequate in relation to the size of the Company and the nature of its business. As regards work in progress(including box stock), according to the records, documents, information and explanations provided by the management the physical verification was carried out in accordance with the procedure explained by the management, which appears to be 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, material discrepancy, noticed on physical verification of inventory by the management as compared to book records has been properly dealt with in the books of account.

3. (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.

(b) The Company has taken unsecured loans in the form of fixed deposits from two parties listed in the register maintained under Section 301 of the Companies Act, 1956.The total maximum amount raised during the year was Rs.825 lakhs and the year-end balance is Rs.1,025 lakhs. The rate of interest and other terms and condition of loans taken by Company are not prima facie prejudicial to interest of the Company. Interest due on December 31, 2013 and March 31, 2014 amounting to '' 41 lakhs is outstanding at the year end.

4. 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 inventories and fixed assets, for sale of goods and services and for payment of expenses. During the course of our audit, no major instance of continuing failure to correct any major weaknesses in the internal control system has been noticed.

5. 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) As per information and explanations given to us and in our opinion, the transactions entered into by the Company with parties covered under Section 301 of the Act exceeding five lacs rupees during the year have been made at prices which are reasonable having regard to the prevailing market prices for such services at the relevant time.

6. In our opinion and according to information and explanations given to us the company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58-A and 58 AA of the Act or any other relevant provisions of the Act and the rules framed thereunder, where applicable, with regard to deposits accepted and no order under the aforesaid Sections has been passed by the Company Law Board or any other authority on the Company.

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

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. (a) According to the records of the Company,

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 to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no statutory dues as on 31st of March, 2014 outstanding 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 is no amounts payable in respect of wealth tax, sales tax excise duty and cess which have not been deposited on account of any disputes.

Details of dues towards income tax that have not been deposited on account of dispute are as stated below :

Name of Nature of Period to Amount Forum the statue dues which the (Rsin where amount lakhs) thedispute relates is pending

The Income Income Financial 37.62 CIT(A) tax Act, Tax year 1961 2004-05

The Income Income Financial 2.57 Assessing tax Act, Tax year Officer 1961 2005-06 u/s 154

10. The Company does not have any accumulated loss as at March 31,2014 and has not incurred cash loss during the financial year covered by our audit or in the immediately preceding financial year.

11. Based on our audit procedures and on 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 or debenture holders. In respect of the principal amount of '' 85.18 lakhs due on January 25, 2014 to a Bank, the same was paid on April 25, 2014.

12. 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.

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of clause (xiii) of the Order is not applicable to the Company.

14. According to information and explanations given to us, the Company is not trading in shares, Securities, debentures and other Investments.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from banks or financial institutions.

16. Based on our audit procedures and on the information given by the management, we report that the Company has not availed any term loan during the year and hence our comments on application of funds so raised do not arise.

17. Based on the information and explanations given to us and on an overall examination of the financial statements of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

18. 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.

19. The Company has no outstanding debentures during the period under audit.

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

21. 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 any such occurrence by the management.



For M.S.Krishnaswami & Rajan Chartered Accountants Firm Regn. No. 01554S

Place : Chennai M.S.Murali - Partner Date : April 29, 2014 Membership No. 26453


Mar 31, 2013

1. Report on the Financial Statements

1.1 We have audited the accompanying financial statements of SPEL SEMICONDUCTOR LIMITED ("the Company”), which comprise the Balance Sheet as at Mar 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.

2. Management''s Responsibility for the Financial Statements

2.1 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 accounting principles generally accepted in India, including 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.

3. Auditor''s Responsibility

3.1 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.

3.2 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.

4. Opinion

4.1 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 Mar 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.

5. Report on Other Legal and Regulatory Requirements

5.1 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.

5.2 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 Mar 31, 2013, and taken on record by the Board of Directors, none of the Directors is disqualified as on Mar 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 referred to in paragraph 5.1 of our report of even date of the Auditors to the Members of SPEL Semiconductor Limited on the Accounts for the year ended Mar 31, 2013

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

(b) Fixed assets have been physically verified by the Management during the year and no material discrepancies were identified on such verification.

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

(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) 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.

The Company had taken unsecured loan in the form of fixed deposit from parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) In our opinion, the rate of Interest and other terms and conditions on which loans have been taken from parties covered 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 regular in repaying the principal amount as stipulated and has been regular in payment of Interest.

(d) There is no overdue amount of loans taken 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 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.

(v) (a) According to the information and explanations given to us, the transactions that need to be entered into a register in pursuance of 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, these transactions in pursuance of contracts or arrangements entered in the register in pursuance of Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 Lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time;

(vi) In our opinion and according to the information and explanations given to us the Company has accepted inter-corporate deposits and has compiled with directives issued by Reserve Bank of India and the provisions of Sections 58A and 58AA of the Act and rules framed under whereever applicable

(vii) In our opinion, the Company has an internal audit system commensurate with the size 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, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) Undisputed statutory dues including

Income-Tax, Sales-Tax, Employees State Insurance, Employees'' Provident Fund, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it have been generally regularly deposited with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income-Tax, Sales-Tax, Employees State Insurance, Employees'' Provident Fund, Wealth-Tax, Service 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.

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

(xi) According to the information and explanations given to us the Company has not defaulted in repayment of dues to financial institutions.

(xii) According to the information and explanations given to us and based on the documents and records produced 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) In our opinion, 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 (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 not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) Terms 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 and cash flow statement of the Company, we report that no funds raised on short-term basis have been used for long- term investment.

(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 has not issued any debentures during the year.

(xx) The Company has not raised any money through public issue during the year and therefore, this clause is not applicable to the Company.

(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 fraud on or by the Company has been noticed or reported during the course of our audit.

For Natarajan & Co

Chartered Accountants

Firm Registration No. 192097

A. Baskar

Place : Chennai Partner

Date : Apr 23 , 2013 Membership No.: 211721


Mar 31, 2012

1. We have audited the attached Balance sheet of SPEL SEMICONDUCTOR LIMITED as at 31st March, 2012, Statement of Profit and Loss 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 the 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 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, 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.

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

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

(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss 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 to the extent applicable;

(v) On the basis of the written representations received from the Directors as on 31st March 2012, and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on 31st 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;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes on accounts attached thereto 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 the affairs of the Company as at 31st March, 2012; and

(b) In the case of the 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.

Annexure referred to in paragraph 3 of the report of even date of the Auditors to the Members of SPEL Semiconductor Limited on the Accounts for the year ended Mar 31, 2012

(i) (a) The company is maintaining proper records

showing full particulars, including quantitative details and situation of fixed assets;

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

(c) No substantial part of fixed assets has been disposed off during the year.

(ii) (a) The physical verification of inventory has been

conducted at reasonable intervals by the Management;

(b) The procedures of physical verification of inventory followed by the Management 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) 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 Act.

The Company had taken unsecured loan in the form of fixed deposit from parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(b) In our opinion, the rate of Interest and other terms and conditions on which loans have been taken from 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 regular in repaying the principal amount as stipulated and has been regular in the payment of Interest.

(d) There is no overdue amount of loans taken from parties listed in the register maintained under Section 301 of the Companies Act, 1956

(iv) In our opinion and according to 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, for the purchase of inventory and fixed assets and for the sale of goods.

(v) (a) According to information and explanation given

to us, the transactions that need to be entered into a register in pursuance of Section 301 of the Act have been so entered;

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

(vi) In our opinion and according to information and explanation given to us, the company has accepted inter-corporate deposits and has complied with the directives issued by the Reserve Bank of India and the provisions of Sections 58A and 58AA of the Act and the rules framed there under, wherever applicable.

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

(viii) We are of the opinion that, prima facie, the Company is maintaining Cost Records as applicable under Section 209 (1) (d) of the Companies Act, 1956.

(ix) (a) The Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income- tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty, and other statutory dues with the appropriate authorities.

(b) In our opinion and according to information and explanation 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) The dues of Customs under dispute have not been deposited amounting to Rs 19.50 lakhs.

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

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions.

(xii) This clause is not applicable as 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 nidhi/ mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor Report) Order, 2003 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 (Auditors Report) Order, 2003 are not applicable to the company.

(xv) Term loans were applied for the purpose for which the loans were obtained;

(xvi) According to information and explanations given to us, the funds raised on short-term basis have not been used for long term investment and vice versa.

(xvii) According to information and explanations given to us, the company has not made any preferential allotment of shares to companies covered in the register maintained under Section 301 of the Act.

(xviii) No debentures have been issued during the year.

(xix) There was no public issue during the year.

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

For Natarajan & Co

Chartered Accountants,

A Baskar

Place : Chennai Partner

Date : Apr 25, 2012 M.No: 211721


Mar 31, 2011

1. We have audited the attached Balance Sheet of SPEL SEMICONDUCTOR LIMITED as at 31st March, 2011 and the Proft and Loss Account and the cash fow statement for the year ended on that date, annexed thereto. These fnancial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these fnancial statements based on our audit.

2. We conducted the 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 fnancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fnancial statements. An audit also includes assessing the accounting principles used and signifcant estimates made by Management, as well as evaluating the overall fnancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors 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 on the matters specifed in paragraphs 4 and 5 of the said Order.

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

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose 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, and the Proft and Loss Account and cash fow statement dealt with by this Report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, Proft and Loss account and cash fow 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 to the extent applicable;

(v) On the basis of the written representations received from the directors as on 31st March 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualifed as on 31st March, 2011 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 accounts read with the schedules and notes on accounts attached thereto 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 the affairs of the Company as at 31st March, 2011; and

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

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

Annexure referred to in paragraph 3 of the report of even date of the Auditors to the Members of SPEL Semiconductor Limited o the Accounts for the year ended March 31, 2011

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

(b) These fxed assets have been physically verifed by the management at reasonable intervals. No material discrepancies were noticed on such verifcation.

(c) No substantial part of fxed assets has been disposed off during the year.

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

(b) The procedures of physical verifcation 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 verifcation.

(iii) (a) The Company has not granted any loans secured or unsecured to Companies, frms or other parties covered in the register maintained under section 301 of the Act. The Company had taken unsecured loan in the form of fxed deposit from Companies, frms or other parties covered in the register maintained under section 301 of the companies Act, 1956. The maximum amount involved during the year was Rs. 0.45 crores.

(b) In our opinion, the rate of Interest and other terms and conditions on which loans have been taken from companies , frms 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 regular in repaying the principal amount as stipulated and has been regular in the payment of Interest.

(d) There is no overdue amount of loans taken from companies, frms or other parties listed in the register maintained under section 301 of the companies Act, 1956

(iv) In our opinion and according to 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, for the purchase of inventory and fxed assets and for the sale of goods.

(v) (a) According to information and explanation given to us, the transactions that need to be entered into a register in pursuance of section 301 of the Act have been so entered;

(b) In our opinion and according to information and explanation given to us, these transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act 1956 and exceeding the value of Rupees fve lacs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time;

(vi) In our opinion and according to information and explanation given to us, the company has accepted inter-corporate deposits and has complied with the directives issued by the Reserve Bank of India and the provisions of Sections 58A and 58AA of the Act and the rules framed there under, wherever applicable. No order has been passed by the Company Law Board.

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

(viii) We are of the opinion that, prima facie, the Company is maintaining Cost Records as applicable under Section 209 (1) (d) of the Companies Act, 1956.

(ix) (a) The Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income- tax, Sales-tax, Wealth Tax, Custom

Duty, Excise Duty, and other statutory dues with the appropriate authorities.

(b) In our opinion and according to information and explanation 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 2011 for a period of more than six months from the date they became payable.

(c) The dues of Customs have not been deposited on account of dispute amounting to Rs.19.50 lakhs.

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

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to fnancial institutions.

(xii) This clause is not applicable as 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 nidhi/ mutual beneft fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor Report) Order, 2003 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 (Auditors Report) Order, 2003 are not applicable to the Company.

(xv) According to information and explanations given to us, the Company has given guarantee to the extent of Rs. 5.20 crores to Southern Petrochemicals Industries Corporation Limited.

(xvi) Term loans were applied for the purpose for which the loans were obtained;

(xvii) According to information and explanations given to us, the funds raised on short-term basis have not been used for long term investment and vice versa.

(xviii) According to information and explanations given to us, the company has not made any preferential allotment of shares to companies covered in the register maintained under Section 301 of the Act.

(xix) No debentures have been issued.

(xx) There was no public issue during the year.

(xxi) No fraud on or by the Company has been noticed or reported during the year.

For Natarajan & Co

Chartered Accountants,

A Baskar

Partner M.No: 211721

Place : Chennai

Date : Apr 29, 2011


Mar 31, 2010

1. We have audited the attached Balance sheet of SPEL SEMICONDUCTOR LIMITED as at31aMarch, 2010 and the Profit and Loss Account and the cash flow statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted the 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 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, 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.

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

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose 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, and the Profit and Loss Account and cash flow statement dealt with by this Report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, Profit and Loss account and cash flow statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable;

(v) On the basis of the written representations received from the directors as on 31 * March 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31M March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the schedules and notes on accounts attached thereto 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 the affairs of the Company as at 31st March, 2010; and

(b) In the case of the Profit and Loss Account, 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.

Annexure referred to in paragraph 3 of the report of even date of the Auditors to the Members of SPEL Semiconductor Limited on the Accounts for the year ended March 31,2010.

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

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

(c) No substantial part of fixed assets has been disposed off during the year.

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

(b) The procedures of physical verification of inventory followed by the management 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) The company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act. The company had taken unsecured loan in the form of fixed deposit from companies, firms or other parties covered in the register maintained under section 301 of the companies Act, 1956. The maximum amount involved during the year was Rs.5.00 crores.

(b) In our opinion, the rate of Interest and other terms and conditions on which loans have been taken from 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 regular in repaying the principal amount as stipulated and has been regular in the payment of Interest.

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

(iv) In our opinion and according to 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, for the purchase of inventory and fixed assets and for the sale of goods.

(v) (a) According to information and explanation given to us, the transactions that need to be entered into a register in pursuance of Section 301 of the Act have been so entered;

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

(vi) In our opinion and according to information and explanation given to us, the company has accepted inter-corporate deposits and has complied with the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Act and the rules framed there under, wherever applicable. No order has been passed by the Company Law Board.

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

(viii) We are of the opinion that, prima facie, the Company is maintaining Cost Records as applicable under Section 209 (1) (d) of the Companies Act, 1956.

(ix) (a) The company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education, and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty, and other statutory dues with the appropriate authorities.

(b) In our opinion and according to information and explanation 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 31 * March 2010 for a period of more than six months from the date they became payable.

(c) The dues of Customs have not been deposited on account of dispute amounting to Rs.19.50 lakhs.

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

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions.

(xii) This clause is not applicable as 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 nidhi/ mutual benefit fund/society. Therefore, the provisions of Clause 4(xiii) of the Companies (Auditors Report) Order, 2003 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 (Auditors Report) Order, 2003 are not applicable to the company.

(xv) According to information and explanations given to us, the company has given guarantee to the extent of Rs. 5.20 crores to Southern Petrochemicals Industries Corporation Limited.

(xvi) Term loans were applied for the purpose for which the loans were obtained;

(xvii) According to information and explanations given to us, the funds raised on short-term basis have not been used for long term investment and vice versa.

(xviii)According to information and explanations given to us, the company has not made any preferential allotment of shares to companies covered in the register maintained under Section 301 of the Act.

(xix) No debentures have been issued.

(xx) There was no public issue during the year.

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

For Natarajan & Co., Chartered Accountants,

A. Baskar

Chennai Partner

May 3,2010 M.No:211721

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