1.  We have audited the attached Balance Sheet of MIRC Electronics
 Limited (the Company) as at March 31, 2011 and also the related
 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 our audit in accordance with standards on auditing
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements.  An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003, as
 amended by the Companies (Auditors Report) (Amendment) Order, 2004
 (hereinafter to be referred to as the Order) 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, to the
 extent applicable.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 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 purposes 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, 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;
 
 (v) On the basis of written representations received from the directors
 as on March 31, 2011 and taken on record by the Board of Directors, we
 report that none of the directors is disqualified as on March 31, 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 financial statements together
 with the notes thereon give the information required by the Companies
 Act, 1956, in the manner so required and give a true and fair view 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, 2011;
 
 (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 TO THE AUDITORS REPORT
 Referred to in paragraph 3 of the Auditors Report of even date of MIRC
 Electronics Limited for the year ended March 31, 2011.
 
 (i) a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets;
 
 b) According to the information and explanations given to us, the
 Company has a regular programme of physical verification by which a
 substantial portion of the fixed assets has been physically verified by
 the management during the year. In our opinion, the frequency of
 verification of the fixed assets by the management is reasonable having
 regard to the size of the Company and the nature of its assets. To the
 best of our knowledge, no material discrepancies were noticed on
 verification conducted during the year as compared with the book
 records and the same have been appropriately dealt with in the books of
 account.
 
 c) The assets disposed of during the year are not significant and
 therefore do not affect the going concern assumption.
 
 (ii) a) Inventories have been physically verified by the Management
 during the year. In our opinion, the frequency of verification is
 reasonable.
 
 b) In our opinion and according to the information and explanations
 given to us, the procedures for physical verification of the
 inventories followed by the management were generally reasonable and
 adequate in relation to the size of the Company and the nature of its
 business.
 
 c) In our opinion the Company is maintaining proper records of
 inventory. The discrepancies noticed between the physical stocks and
 the book stocks were not material and have been properly dealt with in
 the books of account.
 
 (iii) a) The Company has granted unsecured loan to four parties covered
 in the register maintained under Section 301 of the Companies Act,
 1956. out of which one party has returned the loan before the year end.
 The outstanding amount as at the balance sheet date and maximum amount
 outstanding during the year is Rs. 1094.00 lacs and Rs. 1362.25 lacs
 respectively.
 
 b) In our opinion and according to the information and explanations
 given to us, the rate of interest and other terms and conditions on
 which said loans have been granted are not, prima facie, prejudicial to
 the interest of the Company.
 
 c) As per the terms of the loan, principal amount is not due for
 repayment during the year and interest is received as per the terms.
 
 d) The Company has not taken any unsecured loan 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, generally there are adequate internal control procedures
 commensurate with the size of the Company and the nature of its
 business with regard to purchase of inventory, fixed assets and for
 sale of goods and services. During the course of our audit, no major
 weakness has been noticed in the internal control system.
 
 (v) a) To the best of our knowledge and belief and according to the
 information and explanations given to us, we are of the opinion that
 the particulars of contracts and arrangements that need to be entered
 into the register maintained under Section 301 of the Companies Act,
 1956 have been properly entered in the said register.
 
 b) During the year, there are transactions of purchase of services,
 exceeding rupees five lacs per annum, from one party covered under
 Section 301 of the Companies Act, 1956. As per the information and
 explanation provided to us, the said purchases of services are of a
 special nature and therefore, comparative prices are not available.
 
 (vi) The Company has not accepted any deposits from the public, hence
 the provisions of Section 58A, 58AA or any other relevant provisions of
 the Companies Act, 1956 and the rules framed thereunder are not
 applicable.
 
 (vii) In our opinion, the Company has adequate system of internal
 audit, which is commensurate with the size and nature of its business.
 
 (viii) We have broadly reviewed the books of accounts maintained by the
 Company pursuant to the rules made by the Central Government under
 Section 209(1 )(d) of the Companies Act, 1956 for maintenance of cost
 records in respect of products manufactured and are of the opinion
 that, prima facie, the prescribed accounts and records have been
 maintained by the Company.  We have, however, not made a detailed
 examination of the records with a view to determine whether they are
 accurate or complete.
 
 (ix) a) According to the information and explanation provided to us,
 during the year the Company is generally regular in depositing with
 appropriate authorities undisputed statutory dues including amount of
 provident fund, investor education and protection fund, employees
 state insurance, income tax, sales tax, wealth tax, customs duty,
 excise duty, service tax, cess and other material statutory dues,
 applicable to it.
 
 b) The following are the details of disputed Income Tax, Excise Duty,
 Customs Duty and Sales Tax that have not been paid to the concerned
 authorities.
 
 Name of Statute  Relevant Financial  Forum where Dispute      Unpaid
                      Year            is Pending               Amount
                                                               (Rs. in 
                                                                Lacs)
 
 Income Tax            2007-08        DCIT                      82.16
 
 Central Excise        1998-99        High Court                62.44
 
 Central Excise        1997-98        Commissioner Central 
                                      Excise                     0.97
 
 Central Excise  1998-2000,2001-2006  CESTAT                   244.64
 
 Customs           1998-99,2001-02,
                      2007-2010       Commissioner of 
                                      Customs                  232.71
 
 Sales Tax         1991-92,2000-01,
                      2002-2008       High Court               320.94
 
 Sales Tax              2007-08       Supreme Court              1.10
 
 Sales Tax              1997-98       Board of Madhya Pradesh    9.72
                                      Commercial Taxes, Bhopal
 
 Sales Tax       1992-1994,1995-2005  Commissioner              41.10
 
 Sales Tax        2003-04,2005-2007   Revisional Board        1204.73
 
 Sales Tax       1999-2002,2003-2010, Deputy Commissioner 
                                      Sales Tax                482.48
 
 Sales Tax             2008-2010      Deputy Excise and 
                                      Taxation                   3.98
                                      Commissioner
 
 Sales Tax      1999-2001,2003-2005,  Deputy Commissioner       24.49
                        2006-2008     of Commercial Taxes
 
 Sales Tax              2005-2008     Additional Commissioner 
                                      Sales Tax                 30.04
 
 Sales Tax                2004-05     Asstt. Commissioner 
                                            (Appeal)             4.98
 
 Sales Tax               2002-2004    Tribunal                  58.87
 
 Sales Tax         2001 -02, 2003-04, 
                           2005-06    Joint Commissioner 
                                      - Sales Tax              653.26
 
 
 
 (x) The Company does not have accumulated losses and has not incurred
 cash losses during the financial year 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, banks or debenture holders.
 
 (xii) 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.
 
 (xiii) The Company is not a chit fund or a nidhi/ mutual fund benefit
 fund/society. Therefore, the provisions of Clause 4(xiii) of the
 Companies (Auditors Report) Order, 2003 are not applicable to the
 Company.
 
 (xiv) According to the information and explanations given to us, the
 Company is not dealing or trading in shares, securities and debentures.
 However, it has dealings in Mutual Fund units during the year. For the
 transactions in Mutual Fund units the Company has maintained proper
 records and has made timely entries therein. All the shares, securities
 and other investments are held by the Company in its own name.
 
 (xv) In our opinion and according to the information and explanations
 given to us, the terms and conditions on which the Company has given
 guarantee for loan taken by its subsidiary from bank is not, prima
 facie, prejudicial to the interest of the Company.
 
 (xvi) In our opinion and on the basis of the information and
 explanation given to us, the term loans have been applied for the
 purpose for which they were raised other than amounts temporarily
 invested pending utilisation of the funds for the stated use.
 
 (xvii) On the basis of our examination of the books of accounts and the
 information and explanation given to us, we report that the funds
 raised on short-term basis have not been used for long-term investment.
 
 (xviii) During the year, the Company has not made any preferential
 allotment of shares to parties and companies covered in the Register
 maintained under Section 301 of the Companies Act, 1956.
 
 (xix) According to the information and explanations given to us, the
 Company has not issued any secured debentures, which are outstanding
 during the year.
 
 (xx) During the period covered by our audit report, the Company has not
 raised any money by way of public issue.
 
 (xxi) According to the information and explanations given to us, no
 material fraud on or by the Company has been noticed or reported during
 the year.
 
                                                   For N.M. Raiji & Co.
                                                  Chartered Accountants 
                                           Firm Registration No.108296W
 
 
                                                           J. M. Gandhi
                                                                Partner 
                                                   Membership No. 37924
 
 
 Place: Mumbai 
 Date : May 5, 2011