Auditor Report of Procal Electronics India Ltd.

Mar 31, 2014

1. We have audited the accompanying financial statements of M/S. PROCAL ELECTRONICS INDIA LIMITED, MUMBAI, which comprise the Balance Sheet as at 31st March, 2014 and the Statement of Profit and Loss and Cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management''s Responsibility for the Financial Statements

2. The Company''s 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 and in accordance with the accounting principles generally accepted in India. 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

3. 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.

4. 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.

5. 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

6. The company''s manufacturing unit at Silvassa along with other fixed assets are under control of it''s banker on account on non-payment of outstanding dues and due to that and other reasons company had discontinued it''s business operations since many years. As per the Accounting Standard As-28 prescribes by The ICAI the company need to value it''s assets and carried at the value not exceeding the amount to be recovered through use or sale of assets. The company need to account the impairment of it''s assets which it has not complied with the requirement of AS-28 " Impairment of assets " to the extent applicable to the company.

Qualified Opinion

7. 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 for 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 case of the Balance Sheet of the state of affairs of the Company as at 31st March, 2014 and

b) in case of the Statement of Profit and Loss of the LOSS for the year ended on that date

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

Emphasis of Matter

8. We draw attention to the following explanatory notes:

(i) Note No. 18 with regard to preparation of accounts on going concern basis, despite of closure of units and absence of any business activities.

(ii) Note No. 19 with regard to non provision of interest on loans taken from Bank and GSFC app of Rs.199.64 lacs by which the loss for the year is understated.

(iii) Note No. 20 with regard to non provision of Doubtful debts of Rs. 70,182,411/-

Our opinion is not qualified in respect of above matters.

Report on Other Legal and Regulatory Requirements.

9. 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 Act, we give in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the order.

10. 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 Profit and Loss dealt with by this report are in agreement with the books of account.

d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph in our opinion, the Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement comply with Accounting Standards notified under 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.

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

ANNEXURE TO THE AUDITORS REPORT:

Referred to in paragraph 9 of our report of even date.

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

(b) According to the explanations given to us, the Fixed Assets of company have not been physically verified by the management due to premises are in control with Bank and State Government Financial institutions, in absence of physical verification, we are not in a position to comment on the Discrepancies, if any, between physical and book balance and the impact thereof.

(c) The Company has not disposed off any part of fixed assets during the year.

ii. (a) According to the explanations given to us ,the inventories have not been physically verified during the year by the management. In the absence of that we are not in a position to comment on frequency and procedure of physical verification.

(b) The Company has maintained proper records of inventory. However there were no movements of inventory since last several years due to inventories are under control of Bank.

iii) (a) The Company has not granted any loans secured or unsecured to the parties covered in the register maintain under section 301 of the companies Act, 1956.

b) The Company has taken interest free loan from three parties covered in the register maintained under section 301 of the companies Act, 1956, the maximum amount involved during the year was Rs.39.44 Lacs.

c) In our opinion the other terms and conditions on which loan has been taken from the party listed in the register maintained under section 301 of the Companies Act 1956 are not prima facie, prejudicial to the interest of the company.

d) The loan taken is not repaid till date, as there is no specific repayment schedule; hence we are unable to comment upon overdueness of loan.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedure commensurate with the size of the company and the nature of it''s business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. However there were no transaction effected during the year by the company.

v) (a) According to the information and explanations given to us, particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintain under that section, and

(b) We have been informed that the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The company has not accepted deposits from the public within the meaning under section 58 & 58AA of the Companies Act 1956, however during the year it has obtained a unsecured loan from a party listed in the register maintained u/s 301 of the Companies Act 1956.

vii) We were informed that the Central Government has not prescribed maintenance of cost records for the company under section 209(1)(d) of the Companies Act, 1956.

viii) (A) Undisputed statutory dues including provident fund, income tax, sales tax, wealth tax, Service Tax, custom duty, excise duty, cess have not generally been deposited in time, however the same is not serious.

The following statutory dues were outstanding 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, Custom Duty, Wealth Tax, Service Tax, Excise Duty which have not been deposited on account of any dispute except as stated below.

ix) The accumulated losses of the company at the end of the financial year are more than 50% of it''s net worth. The company has incurred cash losses during the year covered by this report and the financial year immediately preceding the year covered by this report.

x) The Company has defaulted in repayment of dues to the following Bank/ Financial institutions the details of which are given below.

xi) The Company has not granted Loans and Advances on the basis of security by way of pledge of shares, debenture and other securities.

xii) In our opinion, the company is not a chit fund or nidhi/mutual benefit/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order 2003 are not applicable to the company.

xiii) In our opinion, the company is not dealing with or trading in shares, securities debentures and other investments. Accordingly the provisions of the clause 4(xiv) of the Companies (Auditors Report) order 2003 are not applicable to the company.

xiv) According to the information and explanations provided to us, the Company has not given any guarantee for loan taken by others from bank or financial institutions.

xv) As Per the records of the Company and according to the information and explanations provided to us, the Company has not taken any term loans during the year except in earlier years which were used for the purpose for which it was obtained.

xvi) According to the information and explanations given to us and on an overall examination of the balance sheet of the company we report that the funds raised in earlier years against working capital is being wiped out against the accumulated losses.

xvii) According to the explanations given to us, the company has not made any preferential allotment of shares during the year to parties and companies covered under section 301 of the Act.

xviii) According to the information and explanations given to us, the company has not issued any debentures secured or unsecured.

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

xx) 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.

for JAIN & KOTHARI

Chartered Accountants F.R.No. 103870W

Place : Mumbai (B.L.JAIN) Date : 14/07/2014 Partner M. No.15568

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Mar 31, 2010

1. We have audited the attached Balance Sheet of PROCAL ELECTRONICS INDIA LIMITED as at 31st March, 2010, the Profit & Loss Account and also 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 statement based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards required that we plan and perform the audit to obtain reasonable assurance about whether the financial statement are free of material mis- statements. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe thatour audit provides 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 enclosed in the Annexure a statements on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to bur 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 are necessary for the purpose of our audit.

b. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of such books.

c. The Balance Sheet and Profit and Loss Account 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 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, except that the company has not complied with the requirement of AS 28 " impairment of the assets ", to the extent applicable to this company.

ANNEXURE TO THE AUDITORS REPORT

Referred to in paragraph 3 of our report of even date.

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

(b) According to the explanations given to us,

(i) The Fixed Assets of the company which are in lien and control of bank have not been physically verified by the management in view of that we are unable to express our opinion with regards to frequency andprocedure of physical verification and any discrepancies.

(ii) The fixed assets which are free from any lien and in control with company have been physically vertified

(c) The Company has not disposed of fanypart of fixed assets during the year.

ii. (a)&(b) According to the explanations given to us,

- (i) The inventories of the company which are in lien and control of bank have not been physically vertified by the management in view of that we are unable to express our opinion with regards to frequency andprocedure of physical verification and any discrepancies.

(ii) Other Inventories have been physically verified during the year by the management and in our opinion the frequency and procedure of physical verification are reasonable and adequate in relation to the size of the company and nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the books records were not material.

iii) (a) The Company has not granted any loans secured or unsecured to the parties covered in the register maintain under section 301 of the companies Act, 1956.

b) The Company has taken interest free loan from three parties covered in the register maintained under section 301 of the companies Act, 1956, the maximum amount involved during the year was Rs. 27.57 Lacs.

c) In our opinion the other terms and conditions on which loan has been taken from the party listed in the register maintained under section 301 of the Companies Act 1956 are not prima facie, prejudicial to the interest of the company

d) The loan taken is not repaid till date, as there is no specific re payment schedule, hence we are unable to comment upon overdueness of loan.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedure commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit we have not observed any continuing failure to correct major weakness in internal controls.

v) (a) According to the information and explanations given to us, particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintain under that section, and

e. On the basis of written representation received from the Directors as on 31st March, 2010, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2010 from being appointed as Director in terms ofClause(g) of Sub-section (1) of Section 274 of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts subj ect to

(i) Note No. 3 with regard to preparation of accounts on going concern basis, despite of closure of units and absence of any business activities.

(ii) Note No. 4 with regard to non provision of interest on loans taken from Bank & GSFC app. of Rs. 256.46 lacs by which the loss for the year is understated.

iii) Non compliance to AS 28 and the effect not being determined in the absence of any steps being taken by the company in assessing value of assets and the consequent impairment of such assets.

and the other notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the Accounting principles generally accepted in India.

i) in case of the Balance Sheet of the state of affairs of the Company as at 31st March, 2010 and

ii) in case of the Profit and Loss Account of the LOSS of the Company for the year ended on that date.

iii) in case of the Cash Flow Statement of the cash flows for the year ended on that date.

for JAIN &KOTHARI

Chartered Accountants

Firm Regn No. 103870 W

Place : Mumbai (B.L.JAIN)

Dated : 02.09.2010 Partner.

M. No. 15568