Auditor Report of VCCL Ltd.

Mar 31, 2015

1. Report on the Financial Statements

We have audited the accompanying financial statements of VCCL Limited ("the Company"), which comprise the Balance Sheet as at March 31,2015, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

2. Management's Responsibility for the Financial Statements

Management is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Accounting Standards referred to in section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility includes the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and preventing and detecting fraud and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

4. Basis of Qualified Opinion

As mentioned in clause 8 (ii) of Note - 12 of financial statements, BIFR passed order in Misc. Application filed by Uttar Pradesh State Industrial Development Corporation Limited (UPSIDC) in the case related to LML Limited regarding resuming of land at Salon, District Amethi by UPSIDC. The possession of land alongwith building and other assets continues to remain with the Company. As such, we are unable to express any opinion as to the effect thereof if any, on the financial statements for the year.

The consequential effect of above para on assets and liabilities as at 31st March, 2015 and loss for the year ended 31st March, 2015 are not ascertainable.

5. Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matters described in the Basis of Qualified Opinion paragraph as mentioned above and read together with the other notes, give the information required by the Act 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 31,2015;

(b) in the case of the Statement of Profit and Loss, 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.

6. Report on Other Legal and Regulatory Requirements

A. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

B. As required by section 143(3) of the Act, we report that:

a. we have sought and obtained all the information and explanations which to the best of our knowledge 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 the Company so far as appears from our examination of those books;

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

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards specified under section 143 of the Act, read with Rule 7 of the Companies (Accounts) Rule, 2014;

e. on the basis of written representations received from the Directors as on March 31, 2015, and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2015, from being appointed as a Director in terms of sub-section (2) of section 164 of the Act; and

f. With respect to other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements wherever applicable-Refer clause no. 2(a) and 2(b) of the Note no. 12 to the Financial Statements

ii) The Company is not required to make provisions as at 31st March, 2015 as required under the applicable law or accounting standards for material foreseeable losses, on longterm contracts including derivative contracts.

iii) There has been no amounts required to be transferred to the Investors Education and Protection Fund by the Company during the year ended 31st March, 2015.

ANNEXURE TO THE AUDITORS' REPORT

Annexure referred to in paragraph 6(A) of the Auditors'

Report of even date to the Members of VCCL Limited on the accounts for the year ended 31st March, 2015;

1. a) The Company has maintained a reconstructed record showing relevant particulars including quantitative details and location of the Fixed Assets.

b) There is no regular program of physical verification in the circumstances of Company's manufacturing operations having remained suspended for some years. No material discrepancies have been noticed in respect of the major items of Plant & Machinery physically verified at the year end.

2. The Company has not granted any loans during the year to the parties covered in the register maintained under section 189 of the Companies Act, 2013.

3. There has been no purchase / sale activity in the year and matters relating to internal control procedures are not applicable with regard to purchase/sale.

4. The Company has not accepted any deposits from the public within the meaning of Section 73 and 74 of the Act and the Rules framed there-under.

5. In view of the suspension of own manufacturing operations continuing during the year at the plant, no records under Section 148 (1) of the Act were required by the Central Government to be maintained by the Company.

6. a) The Company has been regular in depositing undisputed statutory dues pertaining to it, including Provident Fund, Sales Tax, Income Tax Deducted at Source and Custom Duty for part of the year. Arrears exceeding six months at the year-end were existent in respect of Provident Fund Rs. 87047/- stands provided for and remain to be deposited.

b) Following dues are not deposited on account of disputes pending at various forums:

c) There are no dues of Income Tax, Wealth Tax and Service Tax which have not been deposited on account of any dispute.

d) There has been no amounts required to be transferred to the Investors Education and Protection Fund by the Company during the year ended 31st March, 2015.

7. The accumulated losses at the end of the financial year are more than 50% of its Net Worth. Company has incurred cash losses in the current financial year and also in the immediately preceding financial year.

8. There are no dues outstanding to Financial Institutions / Banks.

9. The Company has not granted any guarantee for loans taken by others from bank or financial institutions.

10. The Company has not taken any term loans during the year.

11. As per the information and explanation given to us, no fraud on or by the Company has been noticed during the year.

For ONKAR TANDON & CO. Chartered Accountants FRN-000953C

CA ONKAR TANDON (Partner) M. No. 017232 Place : Kanpur Date: 22nd May, 2015

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Mar 31, 2014

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

2. Management''s Responsibility for the Financial Statements

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

3.Auditor''s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4. Basis of Qualified Opinion As mentioned in clause 7 (ii) of Note - 12 of financial statements, BIFR passed order in Misc. Application filed by Uttar Pradesh State Industrial Development Corporation Limited (UPSIDC) in the case related to LML Limited regarding resuming of land at Salon, District Amethi by UPSIDC. The possession of land alongwith building and other assets continues to remain with the Company. As such, we are unable to express any opinion as to the effect thereof if any, on the financial statements for the year. The consequential effect of above para on assets and liabilities as at 31st March, 2014 and loss for the year ended 31st March, 2014 are not ascertainable. 5.Qualified Opinion In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matters described in the Basis of Qualified Opinion paragraph as mentioned above and read together with the other notes, give the information required by the Act 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, 2014;

(b) in the case of the Statement of Profit and Loss, 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.

6. Report on Other Legal and Regulatory Requirements

A. 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 section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

B. As required by section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge 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 the Company so far as appears from our examination of those books;

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e. on the basis of written representations received from the Directors as on March 31, 2014, and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2014, from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS'' REPORT

Annexure referred to in paragraph 6(a) of the Auditors'' Report of even date to the Members of VCCL Limited on the accounts for the year ended 31st March, 2014;

1. a) The Company has maintained a reconstructed record showing relevant particulars including quantitative details and location of the Fixed Assets.

b) There is no regular program of physical verification in the circumstances of Company''s manufacturing operations having remained suspended for some years. No material discrepancies have been noticed in respect of the major items of Plant & Machinery physically verified at the year end.

c) The Company has not disposed off substantial part of fixed assets during the year.

2. a) The Company has not accepted any loans during

the year from the parties covered in the register maintained under section 301 of the Companies Act,1956. b) The Company has not granted any loans during the year to the parties covered in the register maintained under section 301 of the Companies Act, 1956

3. There has been no purchase / sale activity in the year and matters relating to internal control procedures are not applicable with regard to purchase/sale.

4. Based on the audit procedure applied by us and according to the information and explanations provided by the management, during the year, there has been no contract or arrangement that needed to be entered into the register maintained under section 301 of the Companies Act, 1956. Accordingly, clause 4 (v)(b) of the said order is not applicable.

5. The Company has not accepted any deposits from the public.

6. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

7. In view of the suspension of own manufacturing operations continuing during the year at the plant, no records under Sec. 209(1)(d) of the Companies Act, 1956 were required by the Central Government to be maintained by the Company.

8. The Company has been regular in depositing undisputed statutory dues pertaining to it, including Provident Fund, Sales Tax, Income Tax Deducted at Source and Custom Duty for part of the year. Arrears exceeding six months at the year-end were existent in respect of Provident Fund Rs. 87047/- stands provided for and remain to be deposited.

9. Following dues are not deposited on account of disputes pending at various forums:

Forum Period where Statute Nature Amount to which dispute of Dues (Rs.) Amount is relates pending

Sales Tax/ Tax 863320/- 1991-92 Tribunal

Trade Tax 2545375/- 1992-93 Tribunal

725260/- 1993-94 Tribunal

122065/- 1994-95 Tribunal

27597/- 1999-00 Tribunal

10. The accumulated losses at the end of the financial year are more than 50% of its Net Worth. Company has incurred cash losses in the current financial year and also in the immediately preceding financial year.

11. There are no dues outstanding to Financial Institutions / Banks.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. As the Company is not a chit fund, nidhi, mutual benefit fund or society the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the Company.

14. As the Company is not dealing or trading in shares, securities, debentures and other investments, the provision of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the Company.

15. The Company has not given any guarantees on behalf of others.

16. The Company has not taken any term loans during the year.

17. The Company has not made any short term borrowings during the year.

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

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

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

21. As per the information and explanation given to us, no material fraud on or by the Company has been noticed during the year.

For Onkar Tandon & Co. Chartered Accountants Firm Regn. No. 000953C

CA Shishir Shukla (Partner) M. No. 079205 Place: Kanpur Date: 29th May, 2014

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Mar 31, 2013

1. Report on the Financial Statements

We have audited the accompanying financial statements of VCCL Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

2. Management''s Responsibility for the Financial Statements

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

3. Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment ofthe risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Financial Statements give the information required by the Act 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, 2013;

(b) in the case of the Statement of Profit and Loss, 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.

5. Report on Other Legal and Regulatory Requirements

A. 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 section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

B. As required by section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge 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 the Company so far as appears from our examination of those books;

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e. on the basis of written representations received from the Directors as on March 31, 2013, and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2013, from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURETOTHE AUDITORS'' REPORT

Annexure referred to in paragraph 5(A) of the Auditors'' Report of even date to the Members of VCCL Limited on the accounts for the year ended 31 st March, 2013;

1. a) The Company has maintained a reconstructed record showing relevant particulars including quantitative details and location of the Fixed Assets.

b) There is no regular program of physical verification in the circumstances of Company''s manufacturing operations having remained suspended for some years. No material discrepancies have been noticed in respect of the major items of Plant & Machinery physically verified at the year end.

c) The Company has not disposed off substantial part of fixed assets during the year.

2. a) The Company has not accepted any loans during the year from the parties covered in the register maintained under section 301 of the Companies Act, 1956. b) The Company has not granted any loans during the year to the parties covered in the register maintained under section 301 of the Companies Act, 1956

3. There has been no purchase / sale activity in the year and matters relating to internal control procedures are not applicable with regard to purchase/sale.

4. Based on the audit procedure applied by us and according to the information and explanations provided by the management, during the year, there has been no contract or arrangement that needed to be entered into the register maintained under section 301 of the Companies Act, 1956. Accordingly, clause 4 (v)(b) of the said order is not applicable.

5. The Company has not accepted any deposits from the public.

6. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

7. In view of the suspension of own manufacturing operations continuing during the year at the plant, no records under Sec. 209(1 )(d) of the Companies Act, 1956 were required by the Central Government to be maintained by the Company.

8. The Company has been regular in depositing undisputed statutory dues pertaining to it, including Provident Fund, Sales Tax, Income Tax Deducted at Source and Custom Duty for part of the year. Arrears exceeding six months at the year-end were existent in respect of Provident Fund Rs. 87047/- stands provided for and remain to be deposited.

9. Following dues are not deposited on account of disputes pending at various Forums:

10. The accumulated losses at the end of the financial year are more than 50% of its Net Worth. Company has incurred cash losses in the current financial year and also in the immediately preceding financial year.

11. There are no dues outstanding to Financial Institutions / Banks.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. As the Company is not a chit fund, nidhi, mutual benefit fund or society the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the Company.

14. As the Company is not dealing or trading in shares, securities, debentures and other investments, the provision of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the Company.

15. The Company has not given any guarantees on behalf of others.

16. The Company has not taken any term loans during the year.

17. The Company has not made any short term borrowings during the year.

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

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

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

21. As per the information and explanation given to us, no material fraud on or by the Company has been noticed during the year.

FOR ONKARTANDON & CO.

Chartered Accountants FRN-000953C

OnkarTandon

Place: Kanpur Partner

Date: 28th May, 2013 M.No. 17232

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Mar 31, 2012

We have audited the attached Balance Sheet of VCCL LIMITED as at 31st March, 2012 and also the Profit and Loss Account and the Cash Flow Statement of the Company 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.

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 from any material misstatement. An audit includes examining, on a test basis, evidence supporting the amount 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors' Report) Order, 2003, 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.

Further to our comments in the Annexure referred to in para above, we state that :

a) 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.

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

c) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement referred to in this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211(3C) of Companies Act, 1956.

e) On the basis of the written representations received from the directors, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub-section(1) of Section 274 of the Companies Act, 1956.

In our opinion and as per the information and according to the explanations given to us, the said Balance Sheet and the Profit and Loss Account, read together with the notes thereon and specifically Para no.10 of Note 12 pertaining to "Impairment of Assets", 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:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012.

ii) in the case of the Profit and Loss account, of the Loss of the Company for the year ended on that date; and

iii) in case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure Referred to in the Auditors' Report to the Members of VCCL Limited for the year ended 31st March, 2012

1. a) The Company has maintained a reconstructed record showing relevant particulars including quantitative details and location of the Fixed Assets.

b) There is no regular program of physical verification in the circumstances of Company's manufacturing operations having remained suspended for some years. No material discrepancies have been noticed in respect of the major items of Plant & Machinery physically verified at the year end.

c) The Company has not disposed off substantial part of fixed assets during the year.

2. a) The Company has not accepted any loans during the year from the parties covered in the register maintained under section 301 of the Companies Act, 1956.

b) The Company has not granted any loans during the year to the parties covered in the register maintained under section 301 of the Companies Act, 1956 3. There has been no purchase/sale activity in the year and matters relating to internal control procedures are not applicable with regard to purchase/sale.

4. Based on the audit procedure applied by us and according to the information and explanations provided by the management, during the year, there has been no contract or arrangement that needed to be entered into the register maintained under section 301 of the Companies Act, 1956. Accordingly, clause 4 (v)(b) of the said order is not applicable.

5. The Company has not accepted any deposits from the public.

6. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

7. In view of the suspension of own manufacturing operations continuing during the year at the plant, no records under Sec. 209(1)(d) of the Companies Act, 1956 were required by the Central Government to be maintained by the Company.

8. The Company has been regular in depositing undisputed statutory dues pertaining to it, including Provident Fund, Sales Tax, Income Tax Deducted at Source and Custom Duty for part of the year. Arrears exceeding six months at the year-end were existent in respect of Provident Fund Rs. 87047/- stands provided for and remain to be deposited.

9. Following dues are not deposited on account of disputes pending at various forums:

Statute Nature Amount Period Forum of (Rs.) to which where Dues Amount dispute is Relates pending

Sales Tax/ Tax 863320/- 1991-92 Tribunal Trade Tax

2545375/- 1992-93 Tribunal

725260/- 1993-94 Tribunal

122065/- 1994-95 Tribunal

27597/- 1999-00 Tribunal

10. The accumulated losses at the end of the financial year are more than 50% of its Net Worth. Company has incurred cash losses in the current financial year and also in the immediately preceding financial year.

11. There are no dues outstanding to Financial Institutions/Banks.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. As the Company is not a chit fund, nidhi, mutual benefit fund or society the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 is not applicable to the Company.

14. As the Company is not dealing or trading in shares, securities, debentures and other investments, the provision of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 is not applicable to the Company.

15. The Company has not given any guarantees on behalf of others.

16. The Company has not taken any term loans during the year.

17. The Company has not made any short term borrowings during the year.

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

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

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

21. As per the information and explanation given to us, no material fraud on or by the Company has been noticed during the year.

For ONKAR TANDON & CO. Chartered Accountants FRN: 000953C

ONKAR TANDON Partner M.No. 017232

Place: Kanpur Dated: 26th May, 2012

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Mar 31, 2011

We have audited the attached Balance Sheet of VCCL LIMITED as at 31st March, 2011 and also the Profit and Loss Account and the Cash Flow Statement of the Company 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.

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 from any material misstatement. An audit includes examining, on a test basis, evidence supporting the amount 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors' Report) Order, 2003, 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.

Further to our comments in the Annexure referred to in para above, we state that :

a) 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.

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

c) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement referred to in this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211(3C) of Companies Act, 1956.

e) On the basis of the written representations received from the directors, and taken on record by the Board of Directors, we report that none of the Directors is disqualified 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.

f) Further to the above, we report that :

[i] Custom Duty and Excise Duty on raw material, components and finished goods have not been provided and equivalent amounts have not been considered for inventory valuation, though having no impact on the loss for the year [Refer Note No.10 (iii) of Schedule 11].

Subject to our remarks in para f) above, in our opinion and as per the information and according to the explanations given to us, the said Balance Sheet and the Profit and Loss Account, read together with the notes thereon and specifically Note No. 11 of Schedule 11 pertaining to "Impairment of Assets", 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 :

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011.

ii) in the case of the Profit and Loss account, of the Profit of the Company for the year ended on that date; and

iii) in case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure Referred to in the Auditors' Report to the Members of VCCL Limited for the year ended 31st March, 2011

1. a) The Company has maintained a reconstructed record showing relevant particulars including quantitative details and location of the Fixed Assets.

b) There is no regular program of physical verification in the circumstances of Company's manufacturing operations having remained suspended for some years. No material discrepancies have been noticed in respect of the major items of Plant & Machinery physically verified at the year end.

c) The Company has not disposed off substantial part of fixed assets during the year.

2. a) Inventories have been physically verified at the year end by the management. In our opinion, the frequency of verification is reasonable in the circumstances wherein Company's manufacturing operations have remained suspended for some years.

b) The procedures of physical verification of stocks followed by the Management are adequate in relation to the size of the Company and the nature of its business.

c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material and have been properly dealt with in the books of account. Material in transit is subject to confirmation.

3. a) The Company has not accepted any loans during the year from the parties covered in the register maintained under section 301 of the Companies Act, 1956.

b) The Company has not granted any loans during the year to the parties covered in the register maintained under section 301 of the Companies Act, 1956

4. There has been no purchase / sale activity in the year and matters relating to internal control procedures are not applicable with regard to purchase/sale.

5. Based on the audit procedure applied by us and according to the information and explanations provided by the management, during the year, there has been no contract or arrangement that needed to be entered into the register maintained under section 301 of the Companies Act, 1956. Accordingly, clause 4 (v)(b) of the said order is not applicable.

6. The Company has not accepted any deposits from the public.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8. In view of the suspension of own manufacturing operations continuing during the year at the plant, no records under Sec. 209(1)(d) of the Companies Act, 1956 were required by the Central Government to be maintained by the Company.

9. The Company has been regular in depositing undisputed statutory dues pertaining to it, including Provident Fund, Sales Tax, Income Tax Deducted at Source and Custom Duty for part of the year. Arrears exceeding six months at the year-end were existent in respect of Provident Fund Rs. 76405. Fringe Benefit Tax of Rs. 8420 for 2006-07 stands provided for and remains to be deposited.

10. Following dues are not deposited on account of disputes pending at various forums :

Statute Nature Amount Period to Forum where of Dues (Rs.) which dispute Amount is pending Relates

Sales Tax / Tax 863320/- 1991-92 Deputy Trade Tax Commissioner (Ist Appeal)

2545375 1992-93 Deputy Commissioner (Ist Appeal)

725260/- 1993-94 Tribunal

122065/- 1994-95 Tribunal

27597/- 1999-00 Tribunal

11. The accumulated losses at the end of the financial year are more than 50% of its Net Worth. Company has incurred cash losses in the current financial year and also in the immediately preceding financial year.

12. There are no dues outstanding to Financial Institutions/ Banks.

13. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

14. As the Company is not a chit fund, nidhi, mutual benefit fund or society the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 is not applicable to the Company.

15. As the Company is not dealing or trading in shares, securities, debentures and other investments, the provision of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 is not applicable to the Company.

16. The Company has not given any guarantees on behalf of others.

17. The Company has not taken any term loans during the year.

18. The Company has not made any short term borrowings during the year.

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

20. The Company has not issued any debentures during the year.

21. The Company has not raised any money by way of public issue during the year.

22. As per the information and explanation given to us, no material fraud on or by the Company has been noticed during the year.

For ONKAR TANDON & CO. Chartered Accountants FRN-000953C

ONKAR TANDON Partner M.No. 17232

Place : Kanpur Dated : 18th May, 2011

---

Mar 31, 2010

We have audited the attached Balance Sheet of VCCL LIMITED as at 31st March 2010 and also the Profit and Loss Account and the Cash Flow Statement of the Company 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.

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 from any material misstatement. An audit includes examining, on a test basis, evidence supporting the amount 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003, 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.

Further to our comments in the Annexure referred to in para above, we state that:

a) 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.

b) In our opinion, proper books of accounts as required-by law have been kept by the Company so far as appears from our examination of those books.

c) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement referred to in this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211(3C) of Companies Act, 1956.

e) On the basis of the written representations received from the directors, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2010 from being appointed as a director in terms of clause (g) of sub-section(l) of Section 274 of the Companies Act, 1956.

f) Further to the above, we report that :

[i] Custom Duty and Excise Duty amounting to Rs.5944450 and Rs.235 respectively on raw material, components, stores & spares etc. and finished goods uncleared / in bond or transit as on 31.03.2010 have not been provided and equivalent amounts have not been considered for inventory valuation, though having no impact on the loss for the year [Refer Note No.13 of Schedule 11].

Subject to our remarks in para f) above, in our opinion and as per the information and according to the explanations given to us, the said Balance Sheet and the Profit and Loss Account, read together with the notes thereon and specifically Note no. 12 of Schedule 11 pertaining to "Impairment of Assets", 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:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010.

ii) in the case of the Profit and Loss account, of the Profit of the Company for the year ended on that date; and

iii) in case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure Referred to in the Auditors Report to the Members of VCCL Limited for the year ended 31st March, 2010

1. a) The Company has maintained a reconstructed record showing relevant particulars including quantitative details and location of the Fixed Assets.

b) There is no regular program of physical verification in the circumstances of Companys manufacturing operations having remained suspended for some years. No material discrepancies have been noticed in respect of the major items of Plant & Machinery physically verified at the year end.

c) The Company has not disposed off substantial part of fixed assets during the year.

2. a) Inventories have been physically verified at the year end by the management. In our opinion, the frequency of verification is reasonable in the circumstances wherein Companys manufacturing operations have remained suspended for some years.

b) The procedures of physical verification of stocks followed by the Management are adequate in relation to the size of the Company and the nature of its business.

c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material and have been properly dealt with in the books of account. Material in transit is subject to confirmation.

3. a) The Company has not accepted any loans during the year from the parties covered in the register maintained under section 301 of the Companies Act, 1956.

b) The Company has not granted any loans during the year to the parties covered in the register maintained under section 301 of the Companies Act, 1956

4. There has been no purchase / sale activity in the year and matters relating to internal control procedures are not applicable with regard to purchase/sale.

5. In our opinion, and according to the information and explanations given to us, no transactions of purchase of goods, material or services arid sale of goods, materials or services, have been made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, and aggregating during the year to Rs. 500000/- or more, in respect of each party.

6. The Company has not accepted any deposits from the public.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8. In view of the suspension of own manufacturing operations continuing during the year at the plant, no records under Sec. 209(1 )(d) of the Companies Act, 1956 were required by the Central Government to be maintained by the Company.

9. a) The Company has been regular in depositing undisputed statutory dues pertaining to it, including Provident Fund, Sales Tax, Income Tax Deducted at Source and Custom Duty for part of the year. Arrears exceeding six months at the year-end were existent in respect of Provident Fund Rs. 77326.50.

Fringe Benefit Tax of Rs. 1163 for 2007-08 and Rs. 8420 for 2006-07 stands provided for and remains to be deposited.

b) Following dues are not deposited on account of disputes pending at various forums :

Statute Nature Amount Period to Forum where of Dues (Rs.) which dispute Amount is pending Relates

Sales Tax / Tax 863320/- 1991-92 Deputy Trade Tax Commissioner (1st Appeal)

2545375 1992-93 Deputy Commissioner (1st Appeal)

7252607- 1993-94 Tribunal

122065/- 1994-95 Tribunal

27597/- 1999-00 Tribunal

10. Tne accumulated losses at Yne end ot Yne financial year are more than 50% of its Net Worth. Company has incurred cash losses in the current financial year and also in the immediately preceding financial year.

11. There are no dues outstanding to Financial Institutions / Banks.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. As the Company is not a chit fund, nidhi, mutual benefit fund or society the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

14. As the Company is not dealing or trading in shares, securities, debentures and other investments, the provision of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

15. The Company has not given any guarantees on behalf of others.

16. The Company has not taken any term loans during the year.

17. The Company has not made any short term borrowings during the year.

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

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

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

21. As per the information and explanation given to us, no material fraud on or by the Company has been noticed during the year.



For ONKARTANDON & CO.

Chartered Accountants

ONKARTANDON

Place : Kanpur Partner

Dated : 28th May, 2010 M.No. 17232

FRN-000953C