1.  We have audited the attached Balance Sheet of ALOK INDUSTRIES
 LIMITED (the Company) as at 31 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 31 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 31 March, 2011 and taken on record by the Board of
 Directors, none of the Directors is disqualified as on 31 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
 Re: Alok Industries Limited
 Referred to in paragraph 3 of our report of even date
 
 (i) In respect of fixed assets:
 
 (a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of fixed assets.
 
 (b) According to the information and explanations given to us,
 considering the nature of fixed assets, physical verification of major
 portion of fixed assets as at 31 March 2011 was conducted by the
 management during the year, which is reasonable having regard to the
 size of the company and nature of its business and no material
 discrepancies were noticed on such verification.
 
 (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.
 
 (ii) In respect of inventories:
 
 (a) As explained to us, inventories (except stocks lying with third
 parties and in-transit, confirmation / subsequent receipt have been
 obtained in respect of such inventory) have been physically verified
 during the year by the management, at reasonable intervals.
 
 (b) In our opinion and according to the information and explanations
 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.
 
 (iii) In respect of loans, secured or unsecured, granted by the Company
 to companies, firms or other parties covered in the Register under
 Section 301 of the Companies Act, 1956, according to the information
 and explanations given to us:
 
 (a) The Company has granted loans to a party during the year. At the
 year-end, the outstanding balance of such loan was Nil and the maximum
 amount outstanding during the year was Rs. 59.12 crore.
 
 (b) The rate of interest and other terms and conditions of such loans
 are, in our opinion, prima facie not prejudicial to the interest of the
 Company.
 
 (c) The receipt of principal amounts and interest is on demand and on
 that basis, the same is regular.
 
 (d) There is no overdue amount in excess of Rs. 1 lakh since the same
 is recoverable on demand.
 
 The Company has not taken loans, secured or unsecured from companies,
 firms or other parties covered in the Register maintained under Section
 301 of the Companies Act, 1956 and accordingly, clause (iii) (e) to (g)
 of CARO are not applicable to the Company.
 
 (iv) 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.
 
 (v) In respect of contracts or arrangements entered in the register
 maintained in pursuance of section 301 of the Companies Act, 1956:
 
 (a) To the best of our knowledge and belief and according to the
 information and explanations given to us, the particulars of contracts
 or arrangements referred to in Section 301 that needed to be entered in
 the register, 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.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the Company has complied with the provisions of Sections
 58A and 58AA or any other relevant provisions of the Companies Act,
 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard
 to the deposits accepted from the public. According to the information
 and explanations given to us, no order has been passed by the Company
 Law Board or the National Company Law Tribunal or the Reserve Bank of
 India or any Court or any other Tribunal.
 
 (vii) In our opinion, the internal audit functions carried out during
 the year by firms 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 Textile and Polyester products manufactured by
 the Company 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 explanation given to us in
 respect of statutory dues:
 
 (a) the company has generally been regular in in depositing undisputed
 statutory dues, including Provident Fund, Investor Education and
 Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax,
 Wealth Tax, Custom Duty, Profession Tax, Works contracts tax,
 Maharashtra Labour Welfare fund Cess and other statutory dues with the
 appropriate authorities during the year, except for service tax dues
 aggregating to Rs. 0.50 crore including interest of Rs. 0.02 crore,
 which has been paid subsequent to year end.
 
 (b) there are no undisputed amounts payable in respect of Income-tax,
 Wealth-tax, Customs Duty, Excise Duty, Sales Tax, Service Tax, Cess and
 other statutory dues in arrears as at 31 March 2011 for a period of
 more than six months from the date they became payable, except for
 service tax under Finance Act, 1994 based on reverse charge mechanism
 of Rs.. 1.33 crore and Rs. 2.94 crore (including interest) (aggregating
 to Rs. 4.27 crore) pertaining to the years ended 2008 and 2009
 respectively due on various dates, quantified based on internal
 assessment done by the management and which has been deposited with the
 statutory authorities on 11 July 2011.
 
 (c) there are no dues in respect of Sales Tax, income Tax, Wealth tax,
 Customs Duty and Cess that have not been deposited as on 31 March 2011
 on account of disputes, except as follows :
 
 Name of the 
 statute       Nature of dues     Amount  Period to 
                                          which the  Forum where dispute
                                 (Rs. in 
                                  crores) amount 
                                          relates    is pending
 
 Income Tax 
 Act, 1961 *   Income tax demand   5.91   AY 2006-07 
                                          to 2009-10 Commissioner of
               (TDS dues)                            Income Tax (Appeals)
 
 Works 
 Contract Tax  Works Contract Tax  0.59   FY 2004-05 Deputy Commissioner
 Act, 1986                                           of Sales Tax
 
 * Refer note 1 (F)(a) of part B of Schedule 19 to the financial
 statements.
 
 (x) The company neither has accumulated losses at the end of the year,
 nor incurred cash losses during the current and 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, financial institutions and debenture holders.
 
 (xii) According to the information and explanations given to us, the
 company has not granted any loans and advances on the basis of security
 by way of pledge of shares, debentures and any other securities.
 Accordingly, clause 4 (xii) of the order is not applicable to the
 company.
 
 (xiii) In our opinion and according to the information and explanations
 given to us, the company is not a chit fund or a nidhi/ mutual benefit
 fund/society. Accordingly clause 4 (xiii) of the order is not
 applicable to the company.
 
 (xiv) In our opinion and according to the information and explanations
 given to us, the company is not dealing in or trading in shares,
 securities, debentures or investments. Accordingly clause 4 (xiv) of
 the order is not applicable to the Company.
 
 (xv) In our opinion and according to the explanation given to us, the
 terms and conditions of the guarantees given by the company for loans
 taken by subsidiary company from banks and financial institutions are
 not prima facie prejudicial to the interests of the Company.
 
 (xvi) On the basis on records examined by us, and relying on the
 infromation compiled by the Company for co-relating the funds raised to
 the end use of term loans, we have to state that, the company has,
 prima-facie, applied the term loans for the purpose for which they were
 obtained, other than amounts temporarily invested pending utilisaion of
 the funds for the intended use.
 
 (xvii) 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.
 
 (xviii)The company has not made preferential allotment of shares to
 parties and companies covered in Register maintained under section 301
 of the Companies Act, 1956. Accordingly clause 4 (xviii) of the order
 is not applicable to the Company.
 
 (xix) Security / Charges have been created in respect of debentures
 issued as detailed in Note No 1 of schedule 3 of the Balance Sheet.
 
 (xx) The Management has disclosed the end use of money raised Qualified
 Institutional Placements. We have verified the same from the letter of
 offer filed with Securities Exchange Board of India and as disclosed in
 Notes to accounts (refer note 5 of part B of Schedule 19).
 
 (xxi) To the best of our knowledge and according to the information and
 explanations given to us, no fraud by the Company and no material fraud
 on the Company has been noticed or reported during the year.
 
 
 For Deloitte Haskins & Sells          For Gandhi & Parekh
 
 Chartered Accountants                 Chartered Accountants
 
 [Firm Registration No : 117366W]      [Firm Registration No : 120318W]
 
 R. D. Kamat                           Devang B. Parekh
 
 Partner                               Partner
 
 Membership No 36822                   Membership No 105789
 
 Mumbai, 29 July 2011                  Mumbai, 29 July 2011