Starvox Electronics Ltd

To,

The Members of

STARVOX ELECTRONICS LIMITED

1. We have audited the attached Balance Sheet of STARVOX ELECTRONICS LIMITED asat 31^st March 2011 the Profit & Loss Account and also the Cash FlowStatement for the Year ended on that date annexed thereto. These financialstatements are the responsibility of the Companies Management. Our responsibility is toexpress an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally acceptedin India. These standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by the management, as well as evaluation the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the CentralGovt. Of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in theannexure a statement on the matters specified in paragraph 4 & 5 of the said order.

4. Further to our comments in the Annexure referred to above we report that :

a) We have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our Audit.

b) In our opinion proper books of accounts as required by law have been kept by thecompany, so far as appears from our examination of these books.

c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with thisreport is in agreement with the books of account.

d) In our opinion, the Balance Sheet, Profit Loss Account and Cash Flow Statement dealtwith by this report comply with the Accounting Standards referred to Section 211 (3C) ofthe Companies Act, 1956. Except AS-2 Valuation of Inventories wherein Stock-in-Trade isvalued at cost. As informed to us, there is no material difference in between the marketprice & cost and hence, Company has decided to continue to follow the consistentAccounting Policy and AS-22 Taxes on Income (Refer Note No. 12).

e) On the basis of written representation received from the Directors, as on 31^stMarch 2011 and taken on record by the Board of Directors, we report that none of theDirector is disqualified as on 31^st March 2011 from being appointed as aDirector in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act,1956.

f) In our opinion and to the best of our information and according to the explanationsgiven to us, the said accounts subject to :

give the information required by the Companies Act, 1956, in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India.

I. In the case of the Balance Sheet, of the state of affairs of the Company as at 31stMarch 2011.

II. In the case of the Profit and Loss Account, of the profit for the Year ended onthat date.

III. In the case of the Cash Flow Statement of the Cash Flow for the Year ended on thatdate.

Annexure to the Auditor's Report

(Referred to in Paragraph (3) of our report of even date)

1. (a) The Company has maintained proper records showing full particulars includingQuantitative details and situation of fixed assets.

(b) All the assets have been physically verified by the management during the year. Nomaterial discrepancies were noticed on such verification. The frequency of suchverification was in our opinion, reasonable.

(c) In our opinion, and according to the information and explanations given to us, asubstantial part of Fixed Assets has been disposed off by the company during the year. Thecompany has sold Land and Building situated at B-5 GIDC Electronics Estate Gandhinagar.

2. a) The inventory has been physically verified during the year by the management. Inour opinion,the frequency of verification is reasonable.

b) The procedure of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the company and nature of its business.

c) The company noticed discrepancies on verification between the physical stock and thebook records and they were not material.

3. The Company has neither granted nor taken any loans, secured or unsecured from thecompanies, firms or other parties maintained in register under section 301.

4. In our opinion and according to the information and explanations given to us duringthe course of the audit, there are adequate internal control procedures commensurate withsize of the company and the nature of its business with regard to purchase of inventory,fixed assets and with regard to the sale of goods and services. During the course of ouraudit we have not observed any continuing failure to correct major weaknesses in internalcontrols.

5. a) According to the information and explanations given to us the particulars ofcontracts or

arrangements referred to in Sec. 301 of The Act. have been entered in the registerrequired to be maintained under that section.

b) These transactions pursuant to such contracts are made at price which are reasonablehaving regard to prevailing market prices at relevant time.

6. The Company has not accepted any deposits from the public during the period andhence question of compliance of RBI directives and provisions of Section 58A and 58AA orother provisions does not arise.

7. In our opinion, the company has an internal audit system commensurate with the sizeand the nature of its business. Internal Audit is carried out by an independent firm ofChartered Accountants

8. The Government has not prescribed maintenance of cost records under Section 209 (1)(d) of the Companies Act, 1956, for any of the product of the Company.

9 a) The Company is regular in depositing undisputed statutory dues such as PF, ESI,IT, ST, Central Excise Duty, Custom Duty, Wealth Tax, Service Tax, Investor Education& Protection Fund etc., with appropriate authorities and no undisputed amounts payableas on 31^st March 2011 were pending for payments.

b) Following dues payable to various Government Authorities are disputed and hence notpaid or provided for by the Company :

10. In our opinion the accumulated losses of the Company are not more than 50% of itsnet worth.

11. In our opinion and according to the information and explanations given to us, theCompany has not defaulted in repayment of dues to financial institutions or bank ordebenture holders subject to Note No. 7 of Notes on Accounts.

12. The Company has not granted loans and advances on the basis of security by way ofpledge of shares, debentures & other securities and hence maintenance of records doesnot arises.

13. In our opinion the Company is not chit fund or a nidhi / mutual benefit funds /society, therefore the provisions of clause 4 (xiii) are not applicable to the company.

14. The Company is not dealing or trading in shares, securities. Debentures and otherinvestments. Therefore the provision of clause 4 (xiv) are not applicable to the company.

15. The Company has not given any guarantee for the loans taken by others.

16. The Company has taken term loan for car.

17. The Company has not used funds raised on short term basis for long terminvestments.

18. The Company has not made any preferential allotment of shares during the year.

19. The Company has not issued debentures during the year.

20. The Company has not raised money from public issue during the year.

21. According to the information and explanations given to us no fraud against theCompany or by the Company has been noticed or reported during the course of our audit.