1. We have audited the attached Balance sheet of Opto Circuits (india)
 Limited as at 31st march 2011 and the profit and Loss account 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 the 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 in
 terms of sub-section (4a) of section 227 of the Companies act, 1956,
 and according to the information and explanation given to us during the
 course of the audit and on the basis of such checks as we consider
 appropriate, 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 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 fow
 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 in 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 representation 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) Subject to the foregoing, in our opinion, and to the best of our
 information and according to the explanations given to us, the said
 accounts 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 31st march 2011;
 
 (b) In the case of profit and Loss account, of the profit for the year
 ended on that date; and
 
 (c) In the case of Cash Flow statement, of the cash fows for the year
 ended on that date.
 
 ANNEXURE TO THE AUDITOR''S REPORT
 
 (Referred to in paragraph 3 of our report of even date on the accounts
 of Opto Circuits (india) Limited for the year ended 31st march 2011)
 
 i. (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) Physical verifcation of Fixed assets is performed by the management
 in a regular programme for verifcation once in a year. in our opinion,
 the frequency of verifcation is reasonable, having regard to the size
 and the nature of its business.
 
 (c) There was no substantial disposal of fixed assets during the year.
 
 ii. (a) We are informed that the physical verifcations of inventories
 except inventories lying with the third parties were conducted by the
 management at reasonable intervals. in our opinion, the frequency of
 verifcation is reasonable.
 
 (b) In our opinion, the procedures of physical verifcation of
 inventories 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 has maintained proper records of inventories.
 according to the records produced to us, no discrepancies were noticed
 on verifcation between physical stocks and stock records.
 
 iii. (a) As per the explanation given to us the Company has given loans
 to the parties listed in the register maintained under section 301 of
 the Companies act 1956., the rate of interest and other terms and
 conditions of such loans given are not prejudicial to the interest of
 the Company.  (b) as per the explanation given to us the Company has
 taken loans from the parties listed in the register maintained under
 section 301 of the Companies act 1956, and there was no payment of any
 interest by the company during the year.
 
 iv. In our opinion, and according to the information and explanations
 given to us, there is adequate internal control procedure commensurate
 with size of the Company and the nature of its business for the
 purchase of inventory and assets and for the sale of goods. during the
 course of our audit we have not observed any continuing failure to
 correct major weakness in internal controls.
 
 v. (a) According to the information and explanation given to us, we are
 of the opinion that the transactions that need to be entered into the
 register maintained under 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, the transactions made in pursuance of contracts or
 arrangements entered in the register maintained under section 301 of
 the Companies act, 1956 and exceeding rs. 500,000 in respect of each
 party during the year have been made at prices which are reasonable
 having regard to the prevailing market price at the relevant time.  the
 Company has not accepted any deposits from the public within the
 meaning of section 58a of the companies act, 1956.
 
 vi. In our opinion, the internal audit system in the Company during the
 year is adequate and commensurate to the size and the nature of the
 business of the Company.
 
 vii. To the best of our knowledge and as explained, the Central
 Government has not prescribed maintenance of cost records under section
 209 (1) (d) of the Companies act, 1956 for any product of the company.
 
 viii. On the basis of records produced before us, the Company has
 generally been regular in depositing undisputed statutory dues
 including provident Fund, employees state insurance, income tax, sales
 tax, Customs duty, excise duty and service tax. according to the
 information and explanations given to us, there were no undisputed
 amounts payable in respect of provident Fund, income tax, sales tax,
 Customs duty, excise duty and service tax which are outstanding as on
 31st march 2011 for a period of more than six months from the date on
 which they became payable.
 
 ix. The Company has no accumulated losses and has not incurred cash
 losses during the current financial year and in the immediately
 preceding financial year.
 
 x. During the year, the Company has not taken additional term Loan from
 Banks/Financial institutions as notifed in note no.2; it has not
 defaulted in repayment of its dues to financial institutions and banks.
 
 xi. In our opinion and according to the information and explanations
 given to us, and based on the documents and records produced to us, the
 Company has not granted any loans and advances on the basis of security
 by way of pledge of shares, debentures and other securities.
 
 xii. In our opinion and according to the information and explanations
 given to us, the nature of activities of the Company does not attract
 any special status applicable to Chit- Fund and nidhi / mutual benefit
 Fund/ societies, accordingly clause 4 (xii) of the order is not
 applicable.
 
 xiii. In our opinion, the Company is not dealing or trading in shares,
 securities, debentures or other investments and hence, the requirement
 of Clause 4 (xiv) of the order is not applicable to the company.
 
 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 loans taken by its subsidiary from a bank, are not
 prima-facie prejudicial to the interest of the Company.
 
 xv. In our opinion and based on information and explanations given to
 us by the management, term loans have been applied for the purpose for
 which they were obtained.
 
 xvi. According to the information and explanations given to us and on
 an overall examination of the balance sheet of the company, we report
 that an amount of rs. 210.58 crores raised on short-term basis have
 been used for long-term purpose. no long-term funds have been used to
 finance short-term assets except permanent working capital.
 
 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 Companies act 1956, during the year
 
 xviii. The Company has not issued debentures during the financial year.
 
 xix. During the year the Company has raised additional amount of rs.
 5,512.50 lacs by conversion of share warrants into equity shares which
 were issued in July 2009. Out of the total rs. 46.79 lacs share
 warrants issued earlier, rs. 11.79 lacs share warrants were lapsed and
 consequently forfeited and the amount paid by the warrant holders on
 the above lapsed share warrants amounting to rs. 618.97 lacs were
 transferred to Capital reserve account.
 
 xx. On the basis of our examination and according to 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 ANAND AMARNATH & ASSOCIATES
 
 Chartered accountants
 
 B K AMARNATH
 
 Partner
 
 Membership number: 26536
 
 Firm registration number: 000121s
 
 Place: Bengaluru
 
 Date: 17th may 2011