1.  We have audited the attached Balance Sheet of V-GUARD INDUSTRIES
 LIMITED (the Company) as at 31st March, 2011, the Profit and Loss
 Account and the Cash Flow Statement of the Company for the year ended
 on that date, both 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 misstatements. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and the disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and the significant estimates
 made by the 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 (CARO)
 issued by the Central Government in terms of Section 227(4A) 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.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report as follows:
 
 (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 account as required by law have
 been kept by the Company so far as it appears from our examination of
 those books;
 
 (c) the Balance Sheet, the Profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 (d) in our opinion, the Balance Sheet, the Profit and Loss Account and
 the Cash Flow Statement dealt with by this report are in compliance
 with the Accounting Standards referred to in Section 211(3C) of the
 Companies Act, 1956;
 
 (e) 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:
 
 (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 the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 5. On the basis of the written representations received from the
 Directors as on 31st March, 2011 and taken on record by the Board of
 Directors, none of the Directors is disqualified as on 31st March, 2011
 from being appointed as a director in terms of Section 274(1)(g) of the
 Companies Act, 1956.
 
 
 
 ANNEXURE TO THE AUDITORS'' REPORT
 
 (Referred to in paragraph 3 of our report of even date)
 
 (i) Having regard to the nature of the Company''s
 business/activities/result, clauses (iii) (b) to (d), (f) and (g),
 (vi), (xii), (xiii) and (xix) of Companies (Auditor''s Report) Order,
 2003 (CARO), are not applicable.
 
 (ii) In respect of its fixed assets:
 
 (a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of the fixed assets.
 
 (b) The fixed assets were physically verified during the year by the
 Management in accordance with a regular programme of verification
 which, in our opinion, provides for physical verification of all the
 fixed assets at reasonable intervals. According to the information and
 explanation given to us, the reconciliation of physical verification
 reports with fixed asset register is in progress and in the opinion of
 the Management, the impact of the discrepancies may not be material.
 
 (c) The fixed assets disposed off during the year, in our opinion, do
 not constitute a substantial part of the fixed assets of the Company
 and such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 (iii) In respect of its inventory:
 
 (a) As explained to us, the inventories were physically verified during
 the year by the Management at reasonable intervals.
 
 (b) In our opinion, and according to the information and explanation
 given to us, the procedures of physical verification of inventories
 followed by the Management were reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) In our opinion, and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories and no material discrepancies were noticed on physical
 verification.
 
 (iv) The Company has neither granted nor taken any loans, secured or
 unsecured, to/from companies, firms or other parties listed in the
 Register maintained under Section 301 of the Companies Act, 1956.
 
 (v) In our opinion, and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business with regard
 to purchases of inventory and fixed assets and the sale of goods and
 services. During the course of our audit, we have not observed any
 major weakness in such internal control system.
 
 (vi) In respect of contracts or arrangements entered in the Register
 maintained in pursuance of Section 301 of the Companies Act, 1956, to
 the best of our knowledge and belief and according to the information
 and explanations given to us:
 
 (a) The particulars of contracts or arrangements referred to Section
 301 that needed to be entered in the Register maintained under the said
 Section have been so entered.
 
 (b) Where each of such transaction is in excess of Rs.5 lakhs in
 respect of any party, the transactions have been made at prices which
 are prima facie reasonable having regard to the prevailing market
 prices at the relevant time.
 
 (vii) In our opinion, the internal audit functions carried out during
 the year by a firm of Chartered Accountants appointed by the Management
 have been commensurate with the size of the Company and the nature of
 its business.
 
 (viii) We have broadly reviewed the books of account maintained by the
 Company pursuant to the rules made by the Central Government for the
 maintenance of cost records under Section 209(1)(d) of the Companies
 Act, 1956 in respect of PVC Insulated Electrical Cables, LT Power &
 Control Cables, Pumps and Electric Fans and are of the opinion that
 prima facie the prescribed accounts and records have been made and
 maintained. We have, however, not made a detailed examination of the
 records with a view to determining whether they are accurate or
 complete.  To the best of our knowledge, and according to the
 information and explanations given to us, the Central Government has
 not prescribed the maintenance of cost records for any other product of
 the Company.
 
 (ix) According to the information and explanations given to us, in
 respect of statutory dues:
 
 (a) The Company has generally been regular in depositing undisputed
 dues, including Provident Fund, Investor Education and Protection Fund,
 Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service
 Tax, Custom Duty, Excise Duty, Cess and other material statutory dues
 applicable to it with the appropriate authorities.
 
 (b) There were no undisputed amounts payable in respect of Provident
 Fund, Investor Education and Protection Fund, Employees'' State
 Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
 Excise Duty, Cess and other material statutory dues in arrears as at
 31st March, 2011 for a period of more than six months from the date
 they became payable.
 
 (c) Details of dues of Income Tax, Sales Tax, Wealth Tax, Service Tax,
 Custom Duty, Excise Duty and Cess which have not been deposited as on
 31st March, 2011 on account of disputes are given below:
 
 Statute         Nature of Dues   Forum where   Period to which    Amount
                                  dispute is    the amount       involved
                                   pending         relates        (Rs. in
                                                                   lakhs)
 
 Central Sales    Central Sales
                       Tax      Dy. Commissioner  1998-99          62.28
 Tax Act                        (Appeals), Cochin
 
 Tamil Nadu 
 Value            Value Added 
                      Tax       High Court of 
                                Madras            2008-09          59.70
 Added Tax Act
 
 Jharkhand Value Value Added 
                    Tax &       Commercial Taxes  2009-10           2.30
 Added Tax Act   Penalty        Tribunal
 
 Andhra Pradesh 
 Value          Value Added 
                  Tax          Addl.Dy.Commiss
                               ioner              2005-06           0.75
 Added Tax Act                 (CT), Hyderabad
 
 Income Tax Act Income Tax     Assessing Officer  2007-08           4.53
 
 (x) In our opinion, the Company does not have accumulated losses at the
 end of the financial year. Further, the Company has not incurred cash 
 losses during the financial year covered by our audit and the 
 immediately preceding financial year.
 
 (xi) In our opinion, and according to the information and explanations
 given to us, the Company has not defaulted in the repayment of dues 
 to banks and financial institutions.
 
 (xii) Based on our examination of the records and evaluations of the
 related internal controls, the Company has maintained proper records of
 the transactions and contracts in respect of its dealing in shares,
 securities, debentures and other investments, and timely entries have
 been made therein. The aforesaid securities have been held by the
 Company in its own name.
 
 (xiii) According to information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from
 banks or financial institutions.
 
 (xiv) In our opinion, and according to the information and explanations
 given to us, the term loans have been applied for the purposes for
 which they were obtained, other than temporary deployment pending
 application.
 
 (xv) In our opinion, and according to the information and explanations
 given to us, and on an overall examination of the Balance Sheet, we
 report that funds raised on short-term basis have not been used during
 the year for long- term investment.
 
 (xvi) According to information and explanations given to us, the
 Company has not made any preferential allotment of shares to parties
 and companies covered in the Register maintained under section 301 of
 the Act.
 
 (xvii) The Management has disclosed the end use of money raised by
 public issues and we have verified the same.
 
 (xviii) To the best of our knowledge, and according to the information
 and explanations given to us, no fraud by the Company and no fraud on
 the Company has been noticed or reported during the year.
 
                                         For DELOITTE HASKINS & SELLS
 
                                                Chartered Accountants
                                           (Registration No. 008072S)
 
                                                                 Sd/- 
                                                      M. Ramachandran 
                                                              Partner 
 Kochi, 17th May, 2011                          (Membership No.16399)