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. () - Auditors Report

Company auditors report

To the Members of

VHCL Industries Limited.

We have audited the accompanying financial statements of VHCL Industries Limited("the Company") which comprise the Balance Sheet as at March 31 2014 and theStatement of Profit and Loss and Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.

Management is responsible for the preparation of these financial statements that give atrue and fair view of the financial position financial performance and cash flows of theCompany in accordance with the Accounting Standards referred to in sub-Section(3C) ofSection 211 of the Companies Act 1956 ("the Act"). This responsibility includesthe design implementation and maintenance of internal control relevant to the preparationand presentation of the financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal control relevant to the Company's preparation and fair presentation ofthe financial statements in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by management aswell as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.

In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:

1. As required by the Companies (Auditor's Report) Order 2003 ("the Order")issued by the Central Government of India in terms of sub-Section(4A) of Section227 of theAct we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 ofthe Order.

2. As required by Section227(3) of the Act 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 account as required by law have been kept by theCompany so far as appears from our examination of those books subject to Note No: 10 ofthe Notes to Accounts.

c) the Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account.

d) in our opinion the Balance Sheet Statement of Profit and Loss and Cash FlowStatement comply with the Accounting Standards referred to in sub-section(3C) of Section211 of the Companies Act 1956;

e) on the basis of written representations received from the directors as on March 312014 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2014 from being appointed as a director in terms of clause (g) ofsub-Section(1) of Section274 of the Companies Act 1956.

f) Since the Central Government has not issued any notification as to the rate at whichthe cess is to be paid under Section 441A of the Companies Act 1956 nor has it issued anyRules under the said section prescribing the manner in which such cess is to be paid nocess is due and payable by the Company.

For RAKESH R.AGARWAL & ASSOCIATES
Chartered Accountants
FRN 119168W
Sd/-
(RAKESH R.AGARWAL)
Partner
M.NO: 100223
Place : Mumbai
Date : May 30 2014

The Annexure referred to in paragraph 1 of the Our Report of even date to the membersof VHCL Industries Limited on the accounts of the Company for the year ended 31st March2014.

On the basis of such checks as we considered appropriate and according to theinformation and explanation given to us during the course of our audit we report that:

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

(b) As explained to us fixed assets have been physically verified by the management atreasonable intervals; no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us nofixed asset has been disposed during the year and therefore does not affect the goingconcern assumption.

2. (a) As explained to us inventories have been physically verified during the year bythe management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

(c) In our opinion and on the basis of our examination of the records the Company isgenerally maintaining proper records of its inventories. No material discrepancy wasnoticed on physical verification of stocks by the management as compared to book records.

3. (a) According to the information and explanations given to us and on the basis ofour examination of the books of account the Company has not granted any loans secured orunsecured to companies firms or other parties listed in the register maintained underSection 301 of the Companies Act 1956. Consequently the provisions of clauses iii (b)iii(c) and iii (d) of the order are not applicable to the Company.

(b) According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has taken loans secured or unsecured fromcompanies firms or other parties listed in the register maintained under Section 301 ofthe Companies Act 1956.

4. In our opinion and according to the information and explanations given to us thereis generally an adequate internal control procedure commensurate with the size of theCompany and the nature of its business for the purchase of inventories & fixed assetsand payment for expenses & for sale of goods. During the course of our audit no majorinstance of continuing failure to correct any weaknesses in the internal controls has beennoticed.

5. (a) Based on the audit procedures applied by us and according to the information andexplanations provided by the management the particulars of contracts or arrangementsreferred to in Section 301 of the Act have been entered in the Register required to bemaintained under that section.

(b) As per information & explanations given to us and in our opinion thetransaction entered into by the Company with parties covered u/s 301 of the Act andaggregating during the year to Rs. 500000/- (Rs. Five Lacs) or more in respect of eachparty has been made at prices which are reasonable having regard to the prevailing marketprices at the relevant time.

6. The Company has not accepted any deposits from the public covered under Section 58Aand 58AA of the Companies Act 1956.

7. As per information & explanations given by the management the Company has aninternal audit system commensurate with its size and the nature of its business.

8. As per information & explanation given by the management maintenance of costrecords has been prescribed by the Central Government under clause (d) of sub-Section(1)of Section 209 of the Act and we are of the opinion that prima facie the prescribedaccounts and records have been made and maintained.

9. (a) According to the records of the Company undisputed statutory dues includingProvident Fund Investor Education and Protection Fund Employees' State InsuranceIncome-tax Sales-tax Wealth Tax Service Tax Custom Duty Excise Duty cess to theextent applicable and any other statutory dues have not been regularly deposited with theappropriate authorities. According to the information and explanations given to us therewere outstanding statutory dues as on 31st of March 2014 for a period of more than sixmonths from the date they became payable as per detail given below :

Name of the Statute Nature of dues Amount (Rs. In Lacs)
Income Tax Act 1961 Income Tax (A.Y. 2013-14) 253.98
Service Tax Act Service Tax 12.11
Central Sales Tax CST 2% 53.29
Income Tax Act 1961 Dividend Tax 11.99
Income tax Act 1961 Tax Deducted at Source 8.73

(b) According to the information and explanations given to us there are no amountspayable in respect of income tax wealth tax service tax sales tax customs duty andexcise duty which have not been deposited on account of any disputes.

10. The Company does not have any accumulated loss and has not incurred cash lossduring the financial year covered by our audit and in the immediately preceding financialyear.

11. Based on our audit procedures and on the information and explanations given by themanagement the Company has defaulted in repayment of dues to a financial institutionbank or debenture holders. The Company has defaulted in its obligation for repayment of LCon maturity to Banks and Financial Institutions.

12. According to the information and explanations given to us the Company has notgranted loans and advances on the basis of security by way of pledge of shares debenturesand other securities.

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Thereforethe provision of this clause of the Companies (Auditor's Report) Order 2003 (as amended)is not applicable to the Company.

14. According to information and explanations given to us the Company has invested inshares and proper records & timely entries have been made therein. The Investmentsspecified are held in their own name.

15. According to the information and explanations given to us the Company has notgiven any guarantees for loan taken by others from a bank or financial institution.

16. Based on our audit procedures and on the information given by the management wereport that the Company has raised any term loans during the year.

17. Based on the information and explanations given to us and on an overall examinationof the Balance Sheet of the Company as at 31st March 2014 we report that no funds raisedon short-term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations givento us by the management we report that the company has not made any preferentialallotment of shares during the year.

19. The Company has no outstanding debentures during the period under audit.

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

21. Based on the audit procedures performed and the information and explanations givento us we report that no fraud on or by the Company has been noticed or reported duringthe year nor have we been informed of such case by the management.

For RAKESH R.AGARWAL & ASSOCIATES
Chartered Accountants
FRN 119168W
Sd/-
(RAKESH R.AGARWAL)
Partner
M.NO:100223
Place : Mumbai
Date : May 30 2014