1.  We have audited the attached Balance Sheet of ANJANi FABRICS
 LIMITED at 31st March 2010 and the Profit & Loss Account and also the
 cash flow statement 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.
 
 2.  We conducted our audit in accordance with 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 misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 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.
 
 3.  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 & 5 of the said
 order.
 
 4.  Further to our comments in the Annexure referred to above, we
 report that ;
 
 i) 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;
 
 ii) In our opinion proper books of accounts as required by the law have
 been kept by the company so far as its appears from our examination of
 the books;
 
 iii) The Balance Sheet and Profit & Loss Account and Cash Flow
 Statement dealt with by this report are in agreement with such books of
 accounts of the Company;
 
 iv) In our opinion, the Balance Sheet and Profit & Loss Account Except
 in case of retirement benefits as refer to in Note No. 2(vii) in
 Schedule R as the Company follows pay as you go basis comply with
 the accounting standards referred to in Sec. 211(3) of the Companies
 Act, 1956.
 
 v) On the basis of representations received from the Directors of the
 company, we report that, no director is disqualified as on 31-3-2010
 from being appointed as a director of the company under the clause (g)
 of sub section (1) of section 274 of the companies Act 1956.
 
 vi) 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.
 
 a) In the case of Balance Sheet, of the state of affairs of the Company
 as at 31 st March 2010.
 
 b) In the case of Profit & Loss Account, of the profit for the year
 ended on that date; and
 
 c) In the case of Cash Flow statement, of the cash flows for the year
 ended on that date.
 
 Annexure to Auditors Report (Referred to in our report of even Date)
 
 i) a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 b) The Fixed Assets have been physically verified by the management
 during the year and we are informed that no material discrepancies were
 noticed on such verification.
 
 c) The company has not disposed off any substantial fixed Assets during
 the year; hence the going concern status does not affect.
 
 ii) a) Physical verification of Inventory has been conducted by the
 management at reasonable intervals during the year. In our opinion, the
 frequency of verification is reasonable.
 
 b) The procedures of physical verification of inventories followed by
 the management are reasonable and adequate in relation to the size of
 the company and nature of its business.
 
 c) The company is maintaining proper records of inventory. The
 discrepancies noticed on verification between the physical stocks and
 the book records were not material.
 
 iii) a) The company has taken unsecured loan of Rs.7,23,08,194/- from
 Two parties in the register maintained under section 301 of the
 Companies Act, 1956. The Amount outstanding as at year ending was
 Rs.7.23 Crores. The company has not granted any loan, secured loan or
 unsecured loan to companies, firm or other parties in the register
 maintained under section 301 of the companies Act, 1956.
 
 b) In our opinion, the rate of interest wherever applicable and other
 terms & conditions on which loans have been accepted from firm and
 other parties covered in the register maintained under section 301 are
 not prejudicial to the interest of the company.
 
 c) The payment of principal and interest is regular wherever
 applicable.
 
 d) There has been no overdue amount during the year.
 
 iv) In our opinion, and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the company and the nature of its
 business with regard to purchases of inventory, fixed assets and with
 regard to the sale of goods. During the course of our audit, we have
 not observed any continuing failure to correct major weaknesses in
 internal controls.
 
 v) a) The transactions that need to be entered into the register
 maintained under section 301 of the Companies Act, 1956 have been so
 entered.
 
 b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangement entered in the register maintained under section 301 of the
 Company Act, 1956 and exceeding the value of rupees five lakhs in
 respect of any party during the year have been made at prices which are
 reasonable having regard to prevailing market prices at the relevant
 time.
 
 vi) The Company has not accepted any deposit from the public during the
 year.
 
 vii) In our opinion, the company has an internal audit system
 commensurate with its size and nature of its business.
 
 viii) We are informed that the maintenance of cost records under
 section 209(1) (d) of the Companies Act, 1956 are not required for the
 company.
 
 ix) a) The company is generally regular in depositing the undisputed
 statutory dues including Provident Fund, Employees State Insurance,
 Income Tax, Sales Tax, Custom Duty, Excise Duty, Cess and any other
 statutory dues with the appropriate authorities.
 
 b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of afore mentioned dues were in
 arrears, as 31 St March 2010 for a period of more than six months from
 the date they became payable.
 
 c) According to the information and explanations given to us, no
 statutory dues have not been deposited on account of dispute.
 
 x) In our opinion, the company does not have any accumulated losses and
 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 repayment of dues to a
 financial institution or banks. As there are no debentures, the
 question of repayment does not arise.
 
 xii) The company has not granted loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 xiii) In our opinion, the company is not a chit fund or a nidhi mutual
 benefit fund/society. Therefore, the provisions of clause 4(xiii) of
 the Companies (Auditors Report) Order, 2003 are not applicable to the
 company.
 
 xiv) In our opinion, the company is not dealing in or trading in
 shares, securities, debentures and other investments. Accordingly, the
 provisions of clause 4(xiv) of the Companies (Auditors Report) Order,
 2003 are not applicable to the company.
 
 xv) In our opinion and according to the information and explanations
 given to us, the terms and conditions on which the company has given
 guarantee for loans taken by others from banks or financial
 institutions are not prima- facie prejudicial to the interest of
 Company.
 
 xvi) In our opinion and according to the information and explanations
 given to us, the term loans availed by the company were, prima facie,
 applied by the company during the year for the purposes for which the
 loans were obtained.
 
 xvii) According to the information and explanation given to us and on
 an overall examination of the Balance Sheet of the company, we report
 that the no funds raised on short term basis have been used for long
 term investment.  No Long term funds have been used to finance short
 term assets except permanent working capital.
 
 xviii) The company has not made preferential allotment of shares to
 parties and companies covered in the register maintained under section
 301 of the companies Act, 1956. The company has not issued shares to
 parties covered in the register maintained under section 301 of the
 companies Act, 1956
 
 xix) The company has not issued any debentures during the year and
 therefore clause 4(xix) of the companies (Auditors Report) order, 2003
 is not applicable.
 
 xx) The Company has not raised money during the year.
 
 xxi) According to the information and explanations give to us, no fraud
 on or by the company has been noticed or reported during the course of
 our audit.
 
                                    As per our Report of Even Date
 
                                              For and on Behalf of
 
                                           Nahta Jain & Associates
 
                                             Chartered Accountants
 
                                             Firm Regn.No. 106801W
 
                                                 (CA.GAURAV NAHTA)
 Place .Ahmedabad                                         Partner
 
 Date: 01.08.2010                                     M.No.116735