1.  We have audited the attached Balance Sheet of GTN TEXTILES LIMITED
 as at 31st March, 2011, Profit and 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 statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003 and as
 amended by the Companies (Auditors Report) Amendment Order, 2004
 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.  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 our
 audit;
 
 ii) 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;
 
 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 and Loss Account and Cash
 flow statement dealt with by this report comply with the Accounting
 Standards referred to in sub-section (3C) of section 211 of the
 Companies Act, 1956;
 
 v) On the basis of written representation 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 from being
 appointed as a director in terms of clause (g) of sub-section (1) of
 section 274 of the Companies Act, 1956, on the said date.
 
 vi) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read together
 Significant Accounting Policies and Notes forming part of Accounts in
 Schedule 21 and those appearing elsewhere in the accounts give the
 information required by the Companies Act, 1956, in the manner so
 required and give a true and fair view.
 
 a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2011;
 
 b) in the case of the Profit and Loss Account, of the Profit of the
 Company 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.
 
 Annexure referred to in our Report of even date on the accounts for the
 year ended 31st March, 2011 of GTN TEXTILES LIMITED.
 
 On the basis of such checks as we considered appropriate during the
 course of our audit, we state that:
 
 (i) (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) As explained to us, the fixed assets are physically verified in a
 phased manner which, in our opinion, is reasonable having regard to the
 size of the Company and the nature of its assets. No material
 discrepancies were noted on such verification, during the year.
 
 (c) During the year, there was no sale of substantial part of fixed
 assets and hence the going concern of the Company is not affected.
 
 (ii) (a) 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
 give to us, the procedures of physical verification of inventories
 followed by the management are reasonable and 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
 the book records were not material.
 
 (iii) (a) The Company had not taken / granted loan from / to Companies
 covered in the register maintained under Section 301 of the Companies
 Act, 1956 and hence sub clauses b, c, d, e, f, g and h of clause (iii)
 of the said Order are not applicable.
 
 (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, for the
 purchase of inventory and fixed assets and for 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 control
 system.
 
 (v) (a) According to the information and explanations given to us, we
 are of the opinion that the particulars or arrangements referred to in
 Section 301 of the Act have been entered in the register required to be
 maintained under that section.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements entered in the register maintained under Section 301 of
 the Companies 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) 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 of the Companies Act, 1956 and the Companies (Acceptance
 of Deposits) Rules, 1975 with regard to the deposits accepted from the
 public. No order has been passed by the National Company Law Tribunal
 or Reserve Bank of India or any court or any other Tribunal.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) We have broadly reviewed the Books of Account relating to
 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 prima facie the prescribed
 accounts and records have been made and maintained.
 
 (ix) (a) The Company is regular in depositing with appropriate
 authorities undisputed statutory dues including Provident Fund,
 Investor Education Protection Fund, Employees State Insurance, Income
 Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty Cess
 and other material statutory dues applicable to it.  (b) According to
 the information and explanation given to us there are no dues of which
 have not been deposited on account of dispute.
 
 (x) The Company does not have any accumulated losses as at 31st March,
 2011. The Company has not incurred cash loss during the financial year
 covered by our audit and in the immediately preceding financial year.
 
 (xi) Based on our Audit procedures and according to the information
 given to us, the company has not defaulted in repayment of dues to
 Financial Institutions and Banks.
 
 (xii) In our opinion and according to the information and explanations
 given to us, the Company has not granted any loans and advance on the
 basis of security by way of pledge of shares, debentures and other
 securities.
 
 (xiii) 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.
 
 (xiv) In our opinion and according to the information and explanations
 given to us, during the year Company has not given guarantee for loan
 borrowed by others.
 
 (xv) In our opinion, the term loans have been applied for the purpose
 for which they were raised.
 
 (xvi) According to the information and explanations 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 investments.
 
 (xvii) The Company has not made any preferential allotment of shares
 during the year to parties and companies covered in the Register
 maintained under Section 301 of the Companies Act, 1956.  
 
 (xviii) The Company has not issued any debentures during the year.  
 
 (xix) The Company has not raised any monies by way of Public Issues
 during the year.
 
 (xx) According to the explanation and information given to us, based
 upon the audit procedures performed and representations made by the
 management, we report that no fraud on or by the Company has been
 noticed or reported during the course of our Audit.
 
 
                                    FOR M S JAGANNATHAN & VISVANATHAN
                                                CHARTERED ACCOUNTANTS 
                                                        (FRN 001209S)
 
                                                        (R.MUGUNTHAN)
                                                              PARTNER 
                                                           M NO.21397
 
 Place : Kochi
 Date  : 10th May, 2011