We have audited the attached Balance Sheet of LINAKS MICROELECTRONICS
LTD.'' as at 31sl March'' 2012 and the Profit and Loss Account of the
company for the year ended on that date'' annexed thereto. These
financial statements are the responsibility of the management of the
company. Our responsibility is to express an opinion on the financial
statement based on our audit. We conducted our audit in accordance
with generally accepted auditing standard in India. These 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 the management'' as well as. evaluating
the overall financial statements. We believe that our audit provides a
reasonable basis for our opinion.
1. As required by the Companies (Auditors'' Report) Order'' 2004'' we
give in the Annexure'' a statement on the matters specified in the
paragraphs 4 & 5 of the said Order'' to the extent applicable to the
2. Further'' to our comments referred to in paragraph (1) above and
subject to fallowings (refer note no. 3(i) to (vi) of Notes to Accounts
attached to and forming part of Balance Sheet):.
That in computing Profit /Loss far the year'' Interest written off as
per OTS Agreement'' on Secured Loans from Financial Institutions and
State Bank of India'' for Rsl 171.55 Lac plus Rs. 32.07 lac lease rent
written off have been shown as Extra Ordinary Income for the current
That amounts written off as per OTS Agreement of Secured Loans from
Financial Institutions and State Bank of India for Rs. 310.49 lac has
been shown as Capital Receipt under the GroupReserves and Surplus.
That no Interest on Unsecured Loan from M/S. Kala Holding is provided
during the year due to dispute. In case of applying rate @ 18% simple
rate of Interest'' Loss would be increased by Rs.l 1.47 Lac (app.).
That no interest is provided on Funded CST & UPTT and Statutory Dues of
PF& ESI as the Company has sought extension of relief in view of the
pending approval of the Revised DRS.
That no provision is made for loss on account of discarded/ obsolete
Plant & Machinery.
That no provision is made for loss due to diminution in value of
inventory holdings. We report that:
We have obtained all the information and explanations'' which to the
best of our knowledge and belief were necessary for the purpose of our
In our opinion'' the company has kept proper books of account as
required by law as far as it appears from our examination of the books.
The Balance Sheet and Profit and Loss account annexed with this report
are in agreement with the books of account.
In our opinion'' the Profit and Loss account and the Balance Sheet
comply with the accounting standards referred to in sub section (3
C) of section 211 of the Companies Act'' 1956. On the basis of the
written representations from the Directors'' taken on record by the
Board of Directors '' none of the directors is disqualified as on 31SI
March'' 2012'' from being appointed as a director under section 274
(1)(g) of the Companies Act 1956.
In our opinion and to the best of our information and according to the
explanations given to us'' the said accounts read together with the
notes thereon give the information required by the Companies Act'' 1956
in the manner so required :.
I. In so far as it relates to the Balance Sheet'' of the state of the
affairs of the Company as at 31s'' March'' 2012.
II. In so far as it relates to the Profit and Loss accounts of the
Loss of the Company for the year ending on 31s1 March'' 2012.
ANNEXURE TO THE AUDITORS'' REPORT
(Referred to in Paragraph 1 of our report of even date)
(i) (a) The company is maintaining proper records showing full
particulars'' including quantitative details and situation of fixed
(b) The fixed assets have been physically verified by the management at
reasonable intervals; No material discrepancies were noticed on such
(c) No substantial part of fixed assets have been disposed off during
(ii) (a) 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 is reasonable and adequate in relation to the size of
the Company and nature of its business;
(c) The company is maintaining proper records of inventory 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 301 of the Act. However company has taken interest free
unsecured loan from its managing director. The terms and conditions are
not prejudicial to the interest of the company.
(iv) There is an adequate internal control procedure 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) There is no transaction that needs to be entered into a register in
pursuance of Section 301 of the Act.
(vi) The company has not accepted any deposits from the public''
(vii) The company has an internal audit system commensurate with its
size and nature of its business'' which needs to be strengthened.
(viii) As stated in note no. 3(vii) of Notes to Accounts'' the company
has not carried out any manufacturing activity. and accordingly the
cost audit records have not been maintained by the Company during the
year under review.
(ix) (a) As stated in note no. 3(viii) of Notes to Accounts'' the
company is not regular in depositing Provident Fund payable Rs. 11.00
lacs (previous year Rs. 10.02 lacs)'' ESI Payable Rs. 0.42 Lac (previous
year Rs. 0.47 lac) and Gratuity payable Rs.2.5 lacs (approx.)
outstanding as on 31.03.2012.
(b) Sales Tax under disputes is Rs 63.35 Lac (Previous year Rs. 63.35
Lac) a list is enclosed in Notes on Account under the head contingent
liabilities'' without considering interest thereon.
(x) The company has incurred cash losses in the year for Rs 28.76 lac
and in the Preceding financial year for Rs. 20.00 Lac.
(xi) In our opinion and as per the explanation given to us and subject
to note no. 3(ix) of Notes to Accounts'' the company is a sick company
under provisions of S1CA and Modified Draft Rehabilitation Scheme is
under consideration with the Bench of BIFR. During the year the Company
settled dues of all its Secured Lenders and fully paid to 1DBI'' PICUP.
UPFC and partly paid to State Bank of India by financial assistance
from Co.promoters/Strategic investors.
(xii) The company has not granted any loans and advances on the basis
(xii) The company is not a chit fund company.
(xiii) The company is not trading or dealing in shares'' securities''
debenture and other investments.
(xiv) The company has not given any guarantee for loans taken by
(xv) The company has not applied for any term loan during the year.
(xvi) The fund raised on short.term basis has not been used for
long.term investments and vice versa.
(xvii) The company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Act.
(xviii) The company has not issued any debentures.
(xix) The company has not raised any money by public issues during the
(xx) No fraud on or by the company has been noticed or reported during
For S.R. Gupta & Co.
Place: Lucknow (V.K. Gupta)
Date: 29.06.2012 Partner