1.  We have audited the attached Balance Sheet of ARVIND LIMITED (the
 Company''), as at March 31,2011, the Profit and Loss Account and also
 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 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 evaluatingthe overall financial
 statement presentation. We believe that our audit provides a reasonable
 basis for our opinion.
 
 3.  As required by the Companies (Auditors'' Report) Order, 2003
 (Order) 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.
 
 4.  As mentioned in Note No. 12 of Schedule 16 in respect of early
 adoption of Accounting Standard (AS) - 30 on ''Financial instruments:
 Recognition and Measurement'' and Limited revision arising out of it in
 other Accounting Standards, issued by the Institute of Chartered
 Accountants of India, the Company has measured all its Financial Assets
 and Liabilities at their respective Fair Values or at Amortised Cost.
 Accordingly, AccountingStandard (AS) -13 on ''Accounting for 
 Investments''and Accounting Standard (AS) -11 on ''The
 Effects of Changes in Foreign Exchange Rates'' have been followed only
 for those transactions which are not within the scope of Accounting
 Standard (AS)-30. Had the Company followed (AS) - 11 and
 (AS) - 13 in their entirety, the carrying amount of nvestments, Secured
 Loans and Unsecured Loans would have been higher by Rs. 2.19 Crores, Rs.
 2.41 Crores and Rs. 3.03 Crores respectively and carrying value of
 Hedge Reserve would have been lower by Rs.31.89 Crores respectively.
 
 5.  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 purposes of
 ouraudit;
 
 ii) In our opinion, proper books of account as required bylaw have been
 kept by the Company so far as appears from our examination of those
 books;
 
 iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 iv) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
 Flow Statement dealt with by this report comply with the applicable
 accounting standards referred to in sub-section (3C) of Section 211 of
 the Companies Act, 1956 and Accounting Standard (AS) - 30 on ''Financial
 Instruments: Recognition and Measurement'' and Limited revision arising
 out of it in other Accounting Standard, issued by the Institute of
 Chartered Accountant sof India(ICAI)as mentioned in paragraph 4above;
 
 v) On the basis of written representations received from the directors,
 as on 31st March, 2011 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;
 
 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 the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2011;
 
 (b) I n the case of the Profit and 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 the Auditors'' Report
 Re: ARVIND LIMITED
 Referred to in Paragraph 3 of our Report of even date,
 
 (i) (a) The Company has generally maintained proper records 
 showing full particulars, including quantitative details and
 situation of its fixed assets.
 
 (b) As explained to us,the fixed assets have been physically verified
 by the management during the yearin accordance with aphased 
 programme of verification, which in our opinion provides for 
 physical verification of all the fixed assets at reasonable 
 intervals.  We are informed that no material discrepancies were 
 noticed on such verification.
 
 (c) In our opinion and as per the information and explanations given to
 us, the Company has not made any substantial disposal of fixed assets
 during the year and going concern status of the Companyis not affected.
 (ii) (a) As explained to us, the inventory has been physically verified
 during the year by the management. In our opinion, the frequency
 of verification is reasonable.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventory
 followed by the management are reasonable and adequate in relation
 tothe size of the Company and the nature of its business.
 
 (c) The Company is maintaining proper records of inventory.  As
 explained to us, the discrepancies noticed on verification between the
 physical stocks and the book records were not material having regard to
 the size of the Company, and the same have been properly dealt with.
 
 (iii) The Company has not granted/taken any loans secured or unsecured
 to/from Companies, firms or other parties covered in the register
 maintained under Section 301 of the Companies Act, 1956.  Consequently,
 requirement of clauses (iii, b), (iii, c), (iii, d), (iii, e), (iii,f)
 and (iii,g) of paragraph 4of theorderare not applicable.
 
 (jv) In our opinion and according to the information and explanations
 given to us, there exists an adequate internal control system
 commensurate with the size of the Company and the nature of its
 business with regardto purchase of inventory, fixed assets and with
 regard to the sale of goods and services. During the course of our
 audit, we have not observed any continuing failure to correct major
 weaknesses in internal controls.
 
 (v) To the best of our knowledge and belief and according to the
 information and explanations given to us, we are of the opinion that
 there were no contracts or arrangements that need to be entered in the
 Register maintained underSection 301 of the Companies Act, 1956.
 
 Consequently, requirement of clauses (v,a) and (v, b) of paragraph 4 of
 the orderare not applicable.
 
 (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 Act and rules
 framed there under. No order has been passed by the Company Law Board
 or National Company Law Tribunal or Reserve Bank of India or any 
 Court or any other-Tribunal.
 
 (vii) The Company has an internal audit system, which in our opinion,
 is commensurate with the size of the Company andthenature of its
 business.
 
 (viii) We have broadly reviewedthe books of accounts relatingto
 materials, labour and other items of cost 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 and we are of the opinion that prim a facie the prescribed
 accounts and records have been madeand maintained. We have not however
 made a detailed examination of these records with a view to determine
 whether they are accurate and complete.
 
 (ix) (a) The Company is generally regular in depositing with
 appropriate authorities undisputed statutory dues including Provident
 Fund, Investor Education and Protection Fund, Employees'' State I
 insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
 Excise Duty, Cess and other material statutory duesapplicable to it.
 
 Further since the Central Government has till date not prescribed the
 amount of cess payable under Section 44iAof the Companies Act,i956, we
 are not in a position to comment up on the regular it you other wise of
 the Company in depositing the same.
 
 (b) There are no undisputed amounts outstanding as at March 31, 2011
 for a period of more than six months from the date they became payable.
 
 (c) Following amounts have not been deposited as on March 31, 2011 on
 account of any dispute:
 
 Nature of    Nature of  Rs. in  Period to which the  Forum where
 Statute       the dues  Crores       amount relates  matter is pending
 
 Sales Tax 
 Act          Sales Tax    9.15  1998-1999,2002-2003, High Court
                                 2003-2004,2004-2005,
                                 2005-2006
 
                           0.05  2002-2003,2003-2004  Appellate Tribunal
 
                           2.58  2006-2007            JCCT Appeal (VAT)
 
                           1.00  2006-2007            JCCT Appeal (CSV)
 
 Central 
 Excise Act   Excise
              Duty         9.91  2000-2001,2001-2002  High Court
 
                           5.60  2000-2001,2001-2002, CESTAT
                                 2002-2003,2003-2004,
                                 2004-2005,2005-2006,
                                 2008-2009
 
 CustomsAct   Custom
              Duty         0.05  2005-2006,2006-2007, Joint Commissioner
                                 2007-2008
 
 Finance Act  Service
              Tax          0.44  2004-2005,2005-2006  Joint Commissioner
 
                           0.61  2004-2005,2005-2006, Additional
 
                                 2006-2007,2007-2008  Commissioner
 
                           0.05  2005-2006            Assistant
                                                      Commissioner
 
                           0.22  2004-2005,2005-2006, CESTAT
                                 2006-2007,2007-2008,
                                 2009-2010
 
 Income
 Tax Act      Fringe       0.42  2005-2006            ITAT
 
              Benefit Tax
                           0.13  2006-2007            CITAppeal
 
 (x) The Company has neither any accumulated losses nor has incurred any
 cash losses during the financial year covered by our audit and in 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 duesto
 financial institutions, banks or debenture holders.
 
 (xii) The Company has not granted any loans and advances on the basis
 of security by way of pledge of shares, debentures and other
 securities.
 
 (xiii) The Company is not a chit fund or a nidhi/mutual benefit
 fund/society There fore,the provisions of clause (xiii) of paragraph 4
 of the orderare not applicable.
 
 (xiv) In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments. Therefore, the
 provisions of clause (xiv) of paragraph 4 of the order are not
 applicable.
 
 (xv) To the best of our knowledge and belief and according to the
 information and explanations given to us,in our opinion, the terms and
 conditions on which the Company has given guarantees for loans taken by
 others from banks or financial Institutions are not prejudicial to the
 interest of the Company.
 
 (xvi) To the best of our knowledge and belief and according to the
 information and explanations given to us, in our opinion, the term
 loans obtained during the year were, prima facie, applied by the
 Company for the purpose for which they were obtained, other than
 temporary deployment pending application.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we report
 that funds raised on short-term basis have not prima facie, been used
 during the year for long-term investments.
 
 (xviii) During the year, the Company has not made any preferential
 allotment of shares to persons covered in the register maintained under
 Section 301 of the Act except 2,00,50,000 equity shares have been
 issued to Promoters/Promoter Group on conversion of warrants. According
 to the information and explanations given to us, the price at which the
 shares have been issued is not prejudicial to the interest of the
 Company.
 
 (xix) According to the information and explanations given to us and the
 records examined by us, the Company has not issued any Secured
 Debentures during the year.
 
 (xx) The Company has not raisedany money by public issue during the
 year.
 
 (xi) Based upon the audit procedure performed by us and as per the
 information and explanation sgiven to us, we reportthat no fraud on or
 by the Company has been noticed or reported during the course of our
 audit.
 
                                           For SORABS. ENGINEER & CO.
 
                                       Firm Registration No. 110417W
 
                                               Chartered Accountants
 
                                                CA. N. D. ANKLESARIA
 
                                                             Partner
 
 Ahmedabad, May 20,2011                         Membership No. 10250