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Auditor Report of SPEL Semiconductor Ltd.

Mar 31, 2021

TO THE MEMBERS OF SPEL SEMICONDUCTOR LIMITED Report on the audit of the Financial Statements Opinion

I have audited the accompanyingFinancial Statements of SPEL SEMICONDUCTOR LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2021, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash flows for the year then ended, and a summary of the significant accounting policies and other explanatory information.

In my opinion and to the best of my information and according to the explanations given to us,the aforesaidfinancial 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, 2021, and the loss and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis forOpinion

I conducted my audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. My responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Financial Statements section in my report. I am independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and I am fulfilled my other ethical responsibilities in accordance with these requirements. I believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for my opinion.

Material Uncertainty Related to Going Concern

I draw your attention to Note 3.15 of the Financial Statements of the Company. The Company has incurred losses and generated negative cash flows during the year and also in the earlier years which indicate existence of material uncertainty in the Company''s ability to continue as a going concern for a reasonable period of time. In order to continue the Companyis apparently dependent on the infused of sufficient funds and restructuring of operations. Based on the funds infused and business plans of the management, the Company is reasonably expected to carry on the operations as a going concern. On this basis the Company has prepared the financial statements on going concern basis. My opinion is not modified in respect of this matter.

Emphasis of Matter

I draw your attention to Note 3.14 of the Financial Statements relating to amounts written off and written back for the year ended March 31, 2021 which were approved by a resolution passed by the Board of Directors.

I also draw your attention to Note 3.16of the financial statements which explains the uncertainties and the management''s assessment of the potential impact due to lock-downs and other restrictions and conditions related to the COVID-19 pandemic situation and consequently the Company''s results are highly dependent upon future developments, which are highly uncertain.

My opinion is not modified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that, in my professional judgement, are of most significant in my audit of the financial statements of the current period. These matters were addressed in the context of my audit

of the financial statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters.

Key Audit Matter Description

Response to Key Audit Matter

A. Revenue Recognition

Reference may be made toNote 1B.2 of significant accounting policies and Note 2.1 and 3.5 to thefinancial statements of the Company.

Revenue recognition is inherently an area of audit risk, which I have substantially focused on mainly covering the aspects of cut off.

Considering the above impact of Ind AS 115 and cut off are considered askey audit matters.

Principal Audit Procedures

Audit procedures relating to revenue comprised of test of controls and substantive procedures including the following:

a Performed procedures to assess the design of internal controls established by the management and tested the operating effectiveness of relevant controls related to the recognition of revenue.

c. Selected a sample of sale orders, and tested the operating effectiveness of the internal control, relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation,

re-performance and inspection of evidence in respect of operation of these controls.

d. Tested, on a sample basis, whether specific revenue transactions around the reporting date has been recognised in the appropriate period by comparing the transactions selected with relevant underlying documentation, including goods delivery notes, customer acknowledgement/proof of acceptance and the terms of sale.

e. Also validated subsequent credit notes and sales returnsup to the date of this Report to ensure the appropriateness and accuracy of the revenue recognition.

f. Tested journal entries on a sample basis to identify any unusual or irregular items.

g. Also considered the adequacy of the disclosures in Company''s financial statements in relation to Ind AS 115 and were satisfied they meet the disclosure requirements.

Conclusion

Based on the procedures performed above, nomaterial exceptions were found with regards to timing of revenue recognition and disclose requirement as per Ind AS 115 in the financial statements

B. Inventory valuation

Reference may be made to Note 1B.11 of significant accounting policies and Note 1.4to the financial statements of the Company.

Principal Audit Procedures

Audit procedures comprised of the following:

a. Verified the maintenance of Stock Records with respect to Raw materials, consumables and Finished Goods.The inventory was verified physically by managementduring the year and no

ie valuation of raw material, stores and consumable items held for production have been an area of our focus in viewof low operating margins.

aluation of Inventory in accordance with Ind AS 2 has thus been considered as a key audit matter.

material discrepancies were found that needed to be dealt with in the books of accounts. b. Selected a sample of items of Raw materials, stores and consumable items held for production to check whether the rate per unit adopted for valuation is reflective of the last purchase .

Conclusion

Based on the procedures performed above, it wasconcluded that management has complied with the requirements of Ind AS 2 "Inventories".

c. Actuarial valuation

Reference may be made to Note 1B.5 of significant accounting policies and Note 3.2 to the financial statements of the Company.

There is a risk of material misstatement relating to the judgments made in valuing the defined benefit obligation including the use of key assumptions specifically the discount rate, life expectancy and inflation level. These variables can have a material impact in calculating the quantum of the retirement benefit liability.

Principal Audit Procedures

Audit procedures comprised of the following:

a. Determined whetherthe key assumptions adopted in the actuarial reports are reasonable.

b. Assessed the competence, capabilities and objectivity of the expert, gained an understanding of their work and the suitability of the results as audit evidence for the relevant assertions.

c. Examined the data made available to the experts for completeness and accuracy and gained an understanding of the process to determine the calculation and inputs used.

Conclusion

Based on the procedures performed above, no material exceptions was found with regards to the use of assumptions and actuarial valuation

?.impairment in Trade Receivables

Reference may be made to Note 1B.5 and 1B.13 of significant accounting policies and Note 1.5 and Note 3.4 to the financial statements of the Company

The Company is exposed to potential risk of financial loss when there is the risk of default on receivables from the customers for which the Management would make specific provision against individual balances with reference to the recoverable amount.

For the purpose of impairment assessment, significant judgements and assumptions, including the credit risks of customers, the timing and amount of realization of these receivables, are required for the identification of impairment events and the determination of the impairment charge.

Principal Audit Procedures

Performed the following procedures in relation to the recoverability of trade receivable

a. Tested the accuracy of aging of trade receivablesat year end on a sample basis

b. Obtained a list of outstanding receivables and identified any debtors with financial difficulty through discussions with management.

c. Assessed the recoverability of the unsettledreceivables on a sample basis through our evaluation of management''s assessment withreference to the credit profile of the customers,historical payment pattern of customers, publiclyavailable information and latest correspondence

with customers and to consider if any additionalprovision should be made;

d. Tested subsequent settlement of trade receivables after the balance sheet date on a sample basis

Conclusion

Based on the above procedures, the key judgments and assumptions used by management in the recoverability assessment of trade receivableswere found to be supportable based on the available evidence.

E.Non-Payment/Belated Payment of Statutory Dues

Company has not paid/paid belatedly various undisputed statutory dues. ayment of statutory dues regularly and within time reflects on the health of the company apart from the need for us to report on issues of non-compliance to members. e have, therefore, considered payment of statutory dues as a key audit matter.

Principal Audit Procedures

Performed the following list of audit procedures.

a. Obtained details of payment of various statutory dues to be paid by company.

b. Evaluated the design and operating effectiveness of internal controls relating to compliance with statutory dues.

c. Verified that whether company has been regular in payment of statutory dues.

Conclusion

Based on the above procedures performed, it wasnoted that the payment of statutory dues depended upon availability of funds and is being paid with applicable interest for delays. The details of unpaid statutory dues are disclosed elsewhere in this report.

Information other than the Financial Statements and Auditor''s Report thereon

The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board''s Report including Annexures and Shareholder''s Information but does not include the financial statements and our auditor''s report thereon.

My opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of the financial statements that give a true and fair view of the financial position, financial performance, changes in equity 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. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and 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.

In preparing the financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company''s financial reporting process. Auditor''s Responsibilities for the Audit of the Financial Statements

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes my opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, I exercise professional judgement and maintain professional skepticism throughout the audit. I also:

â¢ Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

â¢ Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

â¢ Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If I conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. I consider quantitative materiality and qualitative factors in (I) planning the scope of my audit work and in evaluating the results of my work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

I also provide those charged with governance with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, I determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, I determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Section143 (3) of the Companies Act, 2013, we report that:

(a) I 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 my 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 (including Other Comprehensive Income),Statement of Changes in Equity and the Statement of Cash Flows dealt with by this report are in agreement with the books of account.

(d) In my opinion, the aforesaid Financial Statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act read with the relevant rules issued thereunder to the extent applicable.

(e) On the basis of the written representations received from the directors as on March 31, 2020 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2021 from being appointed as a director in terms of Section164(2) of the Companies Act, 2013.

(f) With respect to the adequacy of the Internal Financial Controls Over Financial Reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure "A". My report expressesanunmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with requirements of section 197(16) of the Act, as amended:

In my opinion and to the best of our information and according to the explanations given to us, remuneration other than applicable sitting fees has been paid by the Company to itswhole time director during the year which is in accordance with and not in excess of the limits laid down under the said section.

(h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditor''s) Rules, 2014, in my opinion and to the best of our information and according to the explanation given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its FinancialStatements. (Refer Note 3.8 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 as at March 31,2021.

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

2. As required by the Companies (Auditor''s Report) Order,2016 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act I give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.

Mar 31, 2018

INDEPENDENT AUDITORS'' REPORT

To The Members of SPEL SEMICONDUCTOR LIMITED Report on the Abridged Ind AS Financial Statements

The accompanying Abridged Ind AS financial statements of SPEL SEMICONDUCTOR LIMITED (''the Company''), which comprise the abridged Balance Sheet as at March 31, 2018, the abridged Statement of Profit and Loss (including Other Comprehensive Income), the abridged Statement of Cash Flows and the abridged Statement of Changes in Equity for the year then ended and related notes, are derived from the audited Ind AS financial statements of the Company for the year ended March 31, 2018. Our opinion dated May 29, 2018 on those Ind AS financial statements contain matter of emphasis. The abridged Ind AS financial statements do not contain all the disclosures required by the Indian Accounting Standards(lnd AS) referred to in Section 133 of the Companies Act, 2013 ("the Act") read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015(as amended) issued by Ministry of Corporate Affairs and accounting principles generally accepted in India, applied in the preparation of the audited Ind AS financial statements of the Company. Reading the abridged Ind AS financial statements, therefore, is not a substitute for reading the audited Ind AS financial statements of the Company.

Management''s Responsibility for the Abridged Ind AS Financial Statements

The Company''s Board of Directors is responsible for the preparation of summary of the audited Ind AS financial statements in accordance with first proviso to Section 136(1) read with Rule 10 of Companies (Accounts) Rules, 2014 (as amended) and are based on the audited Ind AS financial statements for the year ended 31 March 2018, prepared in accordance with Indian Accounting Standards referred to in Section 133 of the Act, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 (as amended) issued by Ministry of Corporate Affairs and accounting principles generally accepted in India.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Abridged Ind AS financial statements based on our procedures, which were conducted in accordance with Standard on Auditing (SA) 810, "Engagements to Report on Summary Financial Statements" issued by the Institute of Chartered Accountants of India. Opinion

In our opinion, the Abridged Ind AS financial statements, prepared in accordance with first proviso to section 136(1) of the act read with Rule 10 of the Companies (Accounts) Rules, 2014(as amended) are derived from the audited Ind AS financial statements of the Company for the year ended March 31, 2018 are a fair summary of those Ind AS financial statements read with Emphasis of Matter paragraph. Emphasis of Matter

The Company has incurred losses during the year and in the preceding years generating negative operating cash flows and working capital deficiencies resulting in defaults in meeting obligations. Management has represented that the future plans drawn up and the infusion of the funds by the promoters indicate sufficient support to the Company to recover past losses within a reasonable period of time and settle its obligations as and when they fall due. The financial statements of the Company have been prepared on a going concern basis for the reasons stated in Note 3.16 to the Ind AS financial statements. We have considered the adequacy of disclosure made in Note 3.16 to the Ind AS financial statements in addressing the issue of "Going Concern"and note that the Company''s ability to continue as a going concern would depend upon the fruition of efforts/various plans laid down by the management as outlined therein. Our opinion is not modified in respect of this matter.

For M.S. Krishnaswami & Rajan

Chartered Accountants

Registration No. 01554S

M.S. Murali Partner

Membership No. 26453

Chennai

May 29, 2018

INDEPENDENT AUDITORS'' REPORT

To the Members of SPEL SEMICONDUCTOR LIMITED

Report on the Ind AS Financial Statements

1. We have audited the accompanying Ind AS

financial statements of SPEL SEMICONDUCTOR LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income) , the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility forthe 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 Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act as applicable.

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.

Auditors'' Responsibility

3. Our responsibility is to express an opinion

on these Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

4. We conducted our audit of the Ind AS financial statements 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 Ind AS 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 Ind AS 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. 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 financial statements

Opinion

7. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS 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, 2018, and its loss, total comprehensive income, cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

8. The Company has incurred losses during the year and in the preceding years generating negative operating cash flows and working capital deficiencies resulting in defaults in meeting obligations. Management has represented that the future plans drawn up and the infusion of the funds by the promoters indicate sufficient support to the Company to recover past losses within a reasonable period of time and settle its obligations as and when they fall due. The financial statements of the Company have been prepared on a going concern basis for the reasons stated in Note 3.16 to the Ind AS financial statements We have considered the adequacy of disclosure made in Note 3.16 to the Ind AS financial statements in addressing the issue of "Going Concern"and note that the Company''s ability to continue as a going concern would depend upon the fruition of efforts/ various plans laid down by the management as outlined therein. Our opinion is not modified in respect of this matter

Report on Other Legal and Regulatory Requirements

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 including Other Comprehensive Income, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid Ind AS financial statements comply with the Accounting Standards prescribed under section 133 of the Act.

e) In our opinion, the going concern matter described under the Emphasis of Matter paragraph above may have an adverse effect on the functioning of the Company.

f) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164(2) of the Act.

g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses a modified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

h) 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 (as amended), in our opinion and to the best of our information and according to the explanations given to us.

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 - Refer Note 3.9 (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.

10. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government in terms of Section143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.

For M.S. Krishnaswami & Rajan

Chartered Accountants

Registration No. 01554S

M.S. Murali Partner

Membership No. 26453

May 29, 2018

Chennai

ANNEXURE"A"TO THE INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph 9 (g) under ''Report on Other Legal and Regulatory Requirements'' of our report of even date on the accounts of SPEL SEMICONDUCTOR LIMITED ("the Company") for the year ended March 31, 2018)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

1. We have audited the internal financial controls over financial reporting of SPEL SEMICONDUCTOR LIMITED("the Company") as of March 31, 2018 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

2. The Company''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial

Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design,implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility

3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

6. A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the standalone Ind AS financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

8. According to information and explanation given to us and based on our audit the following material weaknesses have been identified as at March 31, 2018:

(i) The Company did not have appropriate internal control system for customer acceptance and establishing customer credit limit for sale which could potentially result in the Company recognising revenue in the financial statements without establishing reasonable certainty of ultimate collection.

(ii) The Company did not have appropriate internal control system for inventory with regard to material issued for production, consumed and remaining in stock out of the said issue ie line work-in-progress. This could potentially result in material statement in Company''s closing line work-in-progress.

9. A material weaknesses is a deficiency or a combinations of deficiencies in internal financial control over financial reporting such that these is reasonable possibility that material misstatement of the company annual statements will not be prevented or deducted on a timely basis.

10. In our opinion and to the best of our information and according to the explanations given to us except for the effects / possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has maintained in all material respects, adequate internal financial controls over financial reporting and such internal financial controls were operating effectively as of March 31,2018 based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in Guidance Note on Audit of Internal Financial Controls Over Financial reporting issued by the Institute of Chartered Accountants of India.

Nature of Dues Amount Rs lakhs)

Service tax 29.92

Goods and Service tax 12.17

Income tax 33.66

Tax deducted at source 8.81

Professional tax 5.13

Employee state insurance 0.61

11. We have considered the material weaknesses identified and reported above in determining the nature,timing and extent of audit tests applied in our audit of the March 31,2018 Ind AS financial statements of the Company and these material weaknesses do not affect our opinion on the financial statements of the Company.

For M.S. Krishnaswami & Rajan

Chartered Accountants

Registration No. 01554S

M.S. Murali Partner

Membership No. 26453

May 29, 2018

Chennai

ANNEXURE"B"TO THE INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph 10 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date on the accounts of SPEL SEMICONDUCTOR LIMITED ("the Company") for the year ended March 31, 2018)

(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.

c) The title deeds of immovable properties reflected in the books of the Company are held in the name of the Company.

(ii) In respect of its inventories as explained to us, the inventories have been physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.

(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) The Company has not granted any loans, made investments, provided guarantees, and security covered under provisions of section 185 and 186 of the Companies Act, 2013.

(v) According to information and explanations given to us, the Company has not accepted any deposit from public during the year and there are no unclaimed deposits to which the provisios of Section 73 to 76 and other relevant provisions of the Companies Act,2013 are applicable. For this puporse, the monies brought in by the promoters / their relatives by way of unsecured loans in pursuance of the stipulation of a bank, are not considered as deposits.

(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 not regular in depositing undisputed Provident fund, Employee state insurance, Income tax (TDS), Service tax, Goods and Service tax, Professional tax and Property tax during the year.

b) In respect of the above, delays were noticed in depositing undisputed service tax, Goods and service tax, Income tax, Professional tax, Employee state insurance with the appropriate authorities during the year and the arrears of such dues outstanding as at March 31, 2018 for a period of more than six months from the date they became payable are-

Name of the statute	Disputed dues (Rs In lakhs)	Period to which the amount relates	Forum where dispute is pending
Income Tax	37.62	Assessment year 2005-06	Assessing Officer under Section 154
Income Tax	2.57	Assessment year 2006-07	Commissioner of Income Tax (Appeals)
Income Tax	406.27	Assessment year 2012-13	Commissioner of Income Tax (Appeals)

c) There are no dues of Sales Tax, Service Tax, Excise Duty, Customs duty and Value Added Tax 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, 2018 on account of disputes are as stated below:

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans 01 borrowings to banks and government and dues to debenture holders. There are no loans on borrowings from the financial institutions.

(ix) According to the information and explanations given to us and the records of the Compan\ examined by us, no moneys were raised by way of initial public offer or further public offei (including debt instruments) and no term loans have been availed by the Company during the year. Hence, the relative reporting requirements under the Order are not commented upon.

(x) 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 and no fraud of material significance on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to information and explanation given to us, the Company has paid/provided managerial remuneration in accordance with the requisite approvals mandated by provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of Paragraph 3 of the Order is not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to us the Company has complied with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and, hence, reporting under clause (xiv) of the order is not applicable to the company.

(xv) In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transactions during the year with its directors or persons connected with him/her and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For M.S. Krishnaswami & Rajan

Chartered Accountants

Registration No. 01554S

M.S. Murali Partner

Membership No. 26453

Chennai

May 29, 2018

Mar 31, 2016

INDEPENDENT AUDITORSâ REPORT ON THE

ABRIDGED STANDALONE FINANCIAL STATEMENTS

TO THE MEMBERS OF SPEL SEMICONDUCTOR

LIMITED

1. The accompanying abridged standalone financial statements of SPEL SEMICONDUCTOR LIMITED (âthe Companyâ), which comprise the abridged Balance Sheet as at March 31, 2016, the abridged Statement of Profit and Loss and the abridged Cash Flow Statement for the year ended and related notes, are derived from the audited standalone financial statements for the year ended March 31, 2016. We expressed a qualified audit opinion on those financial statements in our report dated May 30, 2016.

2. The abridged standalone financial statements do not contain all the disclosures required by the Accounting Standards prescribed under section 133 of the Companies Act, 2013 applied in the preparation of the audited standalone financial statements of the Company. Reading the abridged standalone financial statements, therefore, is not a substitute for reading the audited standalone financial statements of the Company.

Managementâs Responsibility for the Abridged

Financial Statements

3. The Companyâs Board of Directors is responsible for the preparation of summary of the audited standalone financial statements in accordance with Rule 10 of Companies (Account) Rules, 2014 and are based on the audited financial statements for the year ended March 31, 2016, prepared in accordance with the accounting principles generally accepted in India including the Accounting Standards specified under Section 133 of the Companies Act, 2013 as applicable.

Auditorsâ Responsibility

4. Our responsibility is to express an opinion on these abridged standalone financial statements based on our procedures, which were conducted in accordance with the Standards on Auditing(SA) 810,âEngagements to Report on Summary Financial Statementsâ issued by the Institute of Chartered Accountants of India.

Opinion

5. In our opinion the abridged standalone financial statements, prepared in accordance with Rule

10 of Companies (Account) Rules, 2014 are derived from the audited standalone financial statements of the Company for the year ended March 31, 2016 and are a fair summary of those financial statements.

6. Our qualified opinion on the audited standalone financial statements for the year then ended March 31, 2016 in our report dated May 30, 2016 is on the basis that box stock (Inventory - Work-in - Progress) of Rs 2125.56 lakhs as at March

31, 2016 of the Company revealed non-moving / possibility of obsolescence in value to be reckoned in the Statement of Profit and Loss. We are informed that the production of such products was on the basis of specific orders, utilizing raw materials supplied by the customers. Hence it was represented that pending negotiations / acceptance by customers the said stock is carried at cost.

TO THE MEMBERS OF SPEL SEMICONDUCTOR

LIMITED

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of SPEL SEMICONDUCTOR LIMITED (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year and a summary of the significant accounting policies and other explanatory information for the year then ended.

Managementâs Responsibility for the Standalone

Financial Statements

2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) 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 prescribed under section 133 of the Act, as applicable.

Auditorsâ 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 and the Order under Section 143(11) of the Act.

4. We conducted our audit of the standalone financial statements 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 auditorâs 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 Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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 qualified audit opinion on the standalone financial statements.

Basis for Qualified Opinion

7. Box stock (Inventory-work-in-progress) of Rs.2125.56 lakhs as at March 31, 2016 revealed nonmoving/possibility of obsolescence in value to be reckoned in the Statement of Profit and Loss. We are informed that the production of such products was on the basis of specific orders, utilizing raw materials supplied by the customer. Hence, it was represented that pending negotiations/acceptance by customers, the said stock is carried at cost.

Qualified Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matters described in the Basis for Qualified Opinion paragraph, 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, 2016, and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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 are in agreement with the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards prescribed under section 133 of the Act as applicable.

e) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ. Our report expresses an modified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditorâs 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 âAâ TO THE INDEPENDENT AUDITORSâ REPORT

(Referred to in paragraph 10(g) under âReport on Other Legal and Regulatory Requirementsâ of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section

3 of Section 143 of the Companies Act, 2013 (âthe Actâ)

1. We have audited the internal financial controls over financial reporting of SPEL SEMICONDUCTOR LIMITED(âthe Companyâ) as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managementâs Responsibility for Internal Financial Controls

2. The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities

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 29(e) (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 were no amounts which are required to be transferred to the Investor Education and Protection Fund by the Company.

10. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.

include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditorsâ Responsibility

3. Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial

Reporting

6. A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls

Over Financial Reporting

Qualified Opinion

8. According to the information and explanations given to us and based on our audit, the following material weakness has been identified as at March 31, 2016:

The Company did not have an appropriate internal control system for identification and valuation of nonmoving/obsolete box stock (Inventory-Work-in-progress) and this could potentially result in the Company recognizing inventory at erroneous values.

9. A âmaterial weaknessâ is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the companyâs annual or interim financial statements will not be prevented or detected on a timely basis.

10. In our opinion and to the best of our information and according to the explanations given to us, except for the effects/possible effects of the material weakness described in paragraph 8 above on the achievement of the objectives of the control criteria, the Company has maintained, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as of March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

11. We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the financial statements of the Company for the year ended March 31, 2016, and the said material weakness has affected our opinion on the Standalone financial statements of the Company and we have accordingly, issued a qualified opinion on the standalone financial statements of the Company for the year ended March 31, 2016.

(Referred to in paragraph 11 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date on the accounts of SPEL SEMICONDUCTOR LIMITED (âthe Companyâ) for the year ended March 31, 2016)

(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.

c) The title deeds of immovable properties are held in the name of the company.

(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) The Company has not granted any loans, made investments, provided guarantees, and security covered under provisions of section 185 and 186 of the Companies Act, 2013.

(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. There are no unclaimed deposits to which the provision of section 73 to 76 or any other relevant provision of the Companies act are applicable

(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 has generally been regular in depositing undisputed statutory dues including Sales tax, Customs Duty, Excise Duty, Value Added tax, Cess andanyother material statutory dues applicable to it with the appropriate authorities during the year.However, theCompany is not regular in depositing undisputed provident fund, employee state insurance, income tax (TDS), Service tax, Professional tax, Swatch Bharat Cess and property tax during the year.

b) In respect of the above, delays were noticed in depositing undisputed Provident fund, income tax(TDS), service tax, Professional tax, Property Tax with the appropriate authorities during the year and the arrears of such dues outstanding as at March

Nature of Dues	Amount (Rs.lakhs)
Provident fund	42.37
TDS	8.69
Service Tax	2.69
Professional Tax	4.86
Property tax	17.28

Nature of dues	Disputed dues by Holding Company ('' in lakhs)	Period to which the amount relates	Forum where the dispute is pending
Income Tax	37.62	Assessment year 2005-06	Assessing Officer under Section 154
Income Tax	2.57	Assessment year 2006-07	Commissioner of Income Tax (Appeals)

(viii) There are no dues to a financial institution, government or debenture holders. In respect of dues of Rupee term loan to Allahabad Bank, the amount and period of default is as under:

Sl.No.	Particulars	Amount of Default (Rs. In lakhs)	Due Date	Period of Default
1.	Principal	140.55	January 25, 2016	2 Months
2.	Interest	16.59	January 25, 2016	2 Months
3.	Processing Charges	5.89	January 25, 2016	2 Months

(ix) In our opinion and according to the information and explanation given to us, term loans have been applied by the Company during the year for the purpose for which they were raised. There are no monies raised during the year by way of public offer (including debt instruments).

(x) 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 Companyâs operations, no fraud by the Company and no fraud of material significance on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, the Company has paid/ provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of Paragraph 3 of the Order is not applicable to the Company.

(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of paragraph 3 of the Order is not applicable to the Company.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For M.S.Krishnaswami & Rajan

Chartered Accountants

Firm Regn. No. 01554S

May 30, 2016 M.S.Murali - Partner

Chennai Membership No. 26453

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 CompanyÂ), 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 ActÂ). 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 OrderÂ) 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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