1.  We have audited the attached balance sheet of Modella Woollens
 Limited, as at 31st March, 2012 and also the annexed profit and loss
 account and cash flow statement for the year ended on that date. 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 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 issued
 by the Central Government of India in terms of sub-section (4A) of
 section 227 of the Companies Act, 1956 we enclosed in the Annexure a
 statement on the matters specified in paragraph 4 and 5 of the said
 Order.
 
 4.  Further to our comments in the Annexure referred to above, we
 report that
 
 a.  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;
 
 b.  In our opinion, proper books of accounts as required by the law
 have been kept by the company so far as appear from our examination of
 those books
 
 c.  The balance sheet, profit and loss account and cash flow statement
 dealt with by this report are in agreement with the books of account;
 
 d.  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;
 
 e.  On the basis of written representations received from the
 directors, none of the directors are disqualified as on March 31, 2012
 from being appointed as a director in terms of clause (g) of
 sub-section (1) of section 274 of the Companies Act, 1956;
 
 f.  In our opinion and to the best of our information and according to
 the explanation given to us, the said accounts read together with the
 accounting policies and notes on 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 March 31, 2012; and 
 
 ii.  in the case of the Profit and Loss Statement, of the Loss for the
 year ended on that date.  
 
 iii.  in the case of the cash flow statement, of the cash flows for the
 year ended on that date.
 
 
 ANNEXURE TO THE AUDITORS REPORT
 
 As required by the Companies (Auditors'' Report) Order, 2003 issued by
 the Company Law Board in terms of Section 227(4A) of the Companies Act,
 1956, we further report that:
 
 i. (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of its fixed
 assets.
 
 (b) As informed to us, fixed assets have been physically verified by
 the management during the year and no material discrepancies were
 noticed on such verification.
 
 ii. (a) We are informed that there was no stock of goods during the
 year or at the year end and hence physical verification of stock was
 not required to be conducted by the management. In view of above
 therefore, we have no comment to offer on frequency of the physical
 verification of such stocks.
 
 (b) Since company is not having any stock, we have no comment to offer
 on whether the procedures of physical verification of stocks followed
 by the management are reasonable and adequate in relation to the size
 of the Company and nature of its business.
 
 (c) Since company is not having any stock, we have no comment to offer
 on maintaining proper records of inventory and discrepancies on
 physical verification of stocks as compared to book records.
 
 iii. The company has not granted any loans secured or unsecured to
 companies, firms or other parties covered in register maintained under
 section 301 of the Companies Act, 1956
 
 iv. The company has taken unsecured inter-corporate loan from a company
 covered in register maintained under section 301 of the Companies Act,
 1956.
 
 v. In our opinion, there are adequate internal control procedures
 commensurate with the size of the Company and the nature of its
 business, for the purchase of inventory and fixed assets and for sale
 of goods and services.
 
 vi. On the basis of our examination and according to the information
 and explanation given to us, the company has not entered transactions
 that need to be entered in the register maintained under section 301 of
 the Companies Act. 1956.
 
 vii. The Company has not accepted any deposits from the public within
 the meaning of section 58A and 58AA or any order relevant provisions of
 the Companies Act, 1956 and rules framed thereunder.
 
 viii.  The Company does not have an internal audit system.
 
 ix. The Central Government has not prescribed maintenance of cost
 records under section 209(1 )(d) of the Companies Act, 1956, for any
 activities of the Company.
 
 x. (a) The Company has been regular in depositing Provident Fund,
 Investor Education and Protection Fund, Employees'' State Insurance,
 Income tax, Sales tax, Wealth tax, Service 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 income-tax, wealth-tax,
 sales-tax, custom duty, excise duty and cess were out-standing as at
 March 31, 2012 for period of more than six months from the date they
 became payable.
 
 xi. The Company has been registered for a period of not less than five
 years and its accumulated losses at the end of the financial year
 exceeds fifty percent of its net worth.
 
 xii. The Company has not incurred cash losses in the financial year
 immediately preceding current financial year.
 
 xiii. The company has not taken any loans from any financial
 institution or bank or debenture holders and hence the question of
 default in payment does not arise.
 
 xiv. The company has not granted loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 xv. The provisions of any special statute applicable to chit fund,
 Nidhi or mutual Benefit Fund/ societies are not applicable to the
 Company.
 
 xvi. On the basis of our examination and according to the information
 and explanation given to us, the Company during the year has dealt in
 investments and has maintained proper records of the transactions and
 contracts with timely entries made therein. The said investment has
 been held by the company in its own name.
 
 xvii. On the basis of our examination and according to the information
 and explanation given to us, the Company has not given any guarantee
 for loans taken by others from bank or financial institutions.
 
 xviii. The Company has not taken any term loan during the year.
 
 xix. On the basis of our examination of the Cash Flow statement and
 according to the information and explanation given to us, the funds
 raised on short-term basis have not been used for long-term
 investments.
 
 xx. On the basis of our examination and according to the information
 and explanation 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 Companies Act, 1956 during the
 year.
 
 xxi. On the basis of our examination and according to the information
 and explanation given to us, no Debentures have been issued by the
 Company and hence, the question of creating securities in respect
 thereof does not arise.
 
 xxii. On the basis of our examination and according to the information
 and explanation given to us, the Company has not raised any money by
 way of public issue during the year.
 
 xxiii. On the basis of our examination and according to the information
 and explanations given to us, no fraud, on or by the Company, has been
 noticed or reported during the year.
 
 
                                                For DESAI & BHAGTANEY
                                                CHARTERED ACCOUNTANTS
 
                                                    SHAILESH S. DESAI
                                                              PARTNER
                                        M. NO. 36935 Firm No. 115646W
 
 Place of Signature : Mumbai.  
 Date : 25th April, 2012