1.  We have audited the attached Balance Sheet of MIRC Electronics
 Limited (''the Company'') as at March 31, 2012 and also the related
 Profit and Loss Statement 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 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 (Auditor''s Report) Order, 2003, as
 amended by the Companies (Auditor''s 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.  Without qualifying our opinion, we draw attention to Note no. 28(1)
 to the financial statements in respect of fire at one of the Company''s
 manufacturing plant and assessment of loss by the management. In
 absence of any confirmation from the insurance company, we have relied
 on the management assessment.
 
 5.  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 Statement 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 Statement 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, 2012 and taken on record by the Board of Directors, we
 report that none of the directors is disqualified as on March 31, 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 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, 2012;
 
 (b) in the case of the Profit and Loss Statement, 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.
 
 Referred to in paragraph 3 of the Auditors report of even date of MIRC
 Electronics Limited for the year ended March 31, 2012.
 
 (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
 accounts.
 
 c) During the year certain manufacturing assets was destroyed by fire.
 However it does not affect the going concern assumption as the Company
 has other manufacturing location.
 
 (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 three parties
 covered in the register maintained under Section 301 of the Companies
 Act, 1956. The outstanding amount as at the balance sheet date and
 maximum amount outstanding during the year is Rs 604.00 lacs and Rs
 1094.00 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 repayment terms of the loan no amount is due, however an
 amount of Rs 490 lacs is prepaid and the interest is received as per the
 terms on due date.
 
 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.
 
 (iv) In our opinion and according to the information and explanations
 given to us, the Company has complied with the provisions of Sections
 58A and 58AA of the Companies Act, 1956 and the rules framed there
 under with regard to the deposits accepted from the public. We are
 informed by the Management that no order has been passed by the Company
 Law Board or National Company Law Tribunal or Reserve Bank of India or
 any court or any other Tribunal in this regard.
 
 (vi) In our opinion, the Company has adequate system of internal audit,
 which is commensurate with the size and nature of its business.
 
 (vii) 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.
 
 (viii) a) According to the information and explanations provided to us,
 the Company is generally regular in depositing 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, Service Tax, cess and other applicable
 statutory dues with the appropriate authorities.
 
 b) According to the information and explanations given to us, the
 details of statutory dues which have not been deposited with the
 concerned authorities on account of dispute are given below:
 
 Nature of     Relevant Financial
               Year                   Forum where Dispute
                                      Is Pending                Amount
 dues                                                           involved
                                                               (Rs. in 
                                                                Lacs)
 
 Central       1998-99                High Court                  72.69 
 Excise
               1997-98, 1999-2000, 
               2001-05, 2005-06       Commissioner Central 
                                      Excise                      54.25
 
               1999-2000, 2005-06     Excise Appellate 
                                      Tribunal                   181.10
 
               1997-98                Board of Madhya Pradesh
                                      Commercial Taxes, Bhopal     9.72
 
               1991-92, 2002-08       High Court                 320.96
 
               2007-08                Supreme Court                0.55 
 
               1992-94, 1995-99, 
               2000-04,               Commissioner                39.20
               2006-07, 2008-09
 
               2003-04, 2005-07       Revisional Board           187.49
 
 Sales Tax     2005-06                Deputy Commissioner 
                                      Sales Tax                    5.09
 
               2008-09                Deputy Excise and
                                      Taxation Commissioner        3.98 
 
               1997-98, 1999-01,
               2003-05, 2006-08,      Deputy Commissioner of
                                      Commercial Taxes            35.12
 
               2005-08                Additional Commissioner
                                      Sales Tax                   24.96
 
               2008-09                Assistant Commissioner 
                                     (Appeal)                     38.03
 
               2002-04                Tribunal                    58.87
 
               2001-02, 2003-04, 
               2005-06, 2006-07       Joint Commissioner - 
                                      Sales Tax                    3.04
 
 Income Tax    2007-08                CIT (Appeals)               77.69
 
 Customs       1998-99, 2001-02, 
               2008-11                Commissioner of Customs    311.36
 
 Service Tax   2004-2011              Service Tax Appellate
                                      Tribunal                 30462.31
 
 (ix) The company does not have accumulated losses and has incurred cash
 losses during the financial year and has not incurred cash loss in
 immediately preceding financial year.
 
 (x) According to the information and explanations given to us, the
 Company has not defaulted in repayment of dues to any financial
 institutions or banks.
 
 (xi) 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.
 
 (xii) The Company is not a chit fund or a nidhi/mutual benefit
 fund/society. The provisions of clause 4 (xiii) of the Order,
 therefore, are not applicable to the Company.
 
 (xiii) 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.
 
 (xiv) 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.
 
 (xv) In our opinion and on the basis ofthe 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.
 
 (xvi) In our opinion and according to the information and explanations
 given to us, and on an overall examination of the Balance Sheet of the
 Company, we report that funds raised on short-term basis have not been
 utilised for long term investment.
 
 (xvii) According to the information and explanations given to us,
 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.
 
 (xviii) According to the information and explanations given to us, the
 Company has not issued any secured debentures, which are outstanding
 during the year.
 
 (xix) During the year, the Company has not raised any money by way of a
 public issue.
 
 (xx) To the best of our knowledge and belief and according to 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.
 
 
                                                  For N. M. RAIJI & CO.
 
                                                 Chartered Accountants 
 
                                          Firm Registration No.108296W
 
                                                          J. M. GANDHI
 
 Place : Mumbai                                                Partner
 
 Date : May 29, 2012                              Membership No: 37924