We have audited the attached Balance Sheet of VEENA TEXTILES LIMITED,
 as at 31st March 2010, the annexed Profit and Loss Account for the year
 ended on that date. These financial state- ments are the responsibility
 of the Companys management.  Our responsibility is to express opinion
 on these financial state- ments based on our audit.
 
 1.  We conducted our audit In accordance with the auditing standards
 generally accepted in India.These Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free from any material misstatement. An audit
 includes, examining on a test basis, evidence supporting the amounts
 ant3 disctosurea in the financial statements. An audlt also Includes,
 assessing the accounting principles usedand significant estimates made
 by management, as well as evaluating the overall presentation of the
 financial statements. We believe that our audit provides a reasonable
 basis for our opinion.
 
 2.  As required by the Companies (Auditors Report) Order, 2003 issued
 by the Central Government in terms of Section 227 (4A) of (he Companies
 Act, 1956, we annex hereto a Statement on the matters specific in
 paragraphs 4 and 5 of the said order.
 
 3.  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 account as required by law have
 been kept by the Company so far as appears from out examination of the
 books of the Company;
 
 (iii) 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 of the Company;
 
 (iv) In our opinion, the Balance Sheet, the Profit and Loss Account and
 the Cash Flow Statement dealt with by this report comply with the
 accounting standards refered to in sub-section (3d of Section211 of the
 Companies Act, 1956;
 
 (v) Based on 1he representations made by the  Directors as on 31 st
 March, 2010 and taken on records by the Board of Directors of the
 Company .  and the information and explanalions given to us, none of
 the Directors Is, as at 31st March, 2010, prima-facie diquaified from
 being appointed as a director in terms of clause (g) of sub-section (1)
 of Section 274 of tha Companies Act, 1956.
 
 (vi) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements, read
 together with notes thereon, give the Information required by the
 Companies Act, 1956, In the manner so required and present 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 3Tst March.  2010; and
 
 (b) in the case of the Profit and Loss Account of the Profit for the
 year ended on that date; and
 
 (c) in the case of the Cash Flow Statement of the cash flows tor the
 year ended on (hat dale.
 
 ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR AUDITORS RE- PORT OF EVEN
 DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 SI MARCH. 20T0
 OF VEENA TEXTILES LIMITED On the basis of such checks as we considered
 appropriate and in terms of the information and explanotions given to
 us, we state that.
 
 i.  (a) The Companv has generally maintained proper records showing
 particulars, including quantitative detaiis and situations of fixed
 assets: fb) As explained to us, fixed assets, according to the practice
 of the Company, are physically verified by the management at reasonable
 intervals, In a phased verification programme, which, in our opinion,
 is reasonable, looking to the size ot the Company and the nature of its
 business.  According to the information and explanations give to us,
 discrepancies noticed on physical verification have been adjusted in
 the books of account (C) In our opinion though the Company has sold
 certain fixed assets, the going concern status of the Company is not
 affected ii.  (a) As explained to us, inventories have been physically
 verified during the year by the management.  (b) The procedures
 explained to us, which are followed by the management for physical
 verifications of inventories, are, in our opinion, reasonable and
 adequate in relation to the size of the Company and the nature of its
 business.
 
 (a) on the basis of our examination of the inventory records o* the
 Company, we are of the opiniothat, the Company is maintaining proper
 records of its inventory, Discrepancies which were noticedon physical
 verification o( inventory as compared to book records, have-been
 properly dealt with inthe books of account;
 
 iii.  In respect of the loans, secured or unsecured, granted ortaken by
 the Company to/from companies, firms or other parties covered in the
 Register maintained under section 301 of the Companies Act. 19s6:
 
 (o) The Company has given Inter Corporative Deposit to a Company. In
 respect of the said deposit, the maximum amount outstanding at any time
 during the year was Rs, 20 lacs and !he year-end balance is Rs. 15 lacs
 .
 
 (b) In our opinion and according to the information and explanations
 given to us, ihe rate of interest, where applicable and other terms and
 conditions, are not prima facie prejudicial to the interest of the
 Company.
 
 (c) The principal amounts, are .repayable on demand and there is no
 repayment schedule. The interest, where appli- cable, is payable on
 demand.
 
 (d) In respect of the said loons, the same are repayable on demand and
 therefore the question of overdue amounts does not arise. In respect of
 interest, where applicable, there are no overdue amounts.
 
 (e) The Company has not taken any loan during the year from companies,
 firms or other parties covered in the Register maintained under Section
 301 of the Companies Act, 1956. Consequently, the requirements of
 Clauses (iii) (f) and (iii) (g) of paragraph 4 of the Order are not
 applicable:
 
 iv.  in our opinion and according to the information and explanations
 given to us, there are generally adequate internal control procedures
 commensurate with the size of the Company and the nature of Its
 business with regard to purchase of inventory, fixed assets and for
 sale of goods.  During the course of our previous assessment, no major
 weakness in internal control, had come to our notice; v.  (a) On the
 basis of the audit procedures performed by us, and according to the
 information,.  explanations and representations given to us, we are of
 the opinion that, the transactions in which directors were interested
 as contemplated under Section 297 and sub-section ;6) of Section 299 of
 the Companies Act, 1956 and which were required to be entered in the
 register maintained under Section 30!  of he said Act, have been so
 entered; [b) In our ooinion 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 exceeding the value of rupees
 five lacs in respect of any party during the year have been made at
 prices during the year.have been made or prices which are reasonable
 have regard to prevailing market prices at that time; vi.  The Company
 has not accepted any deposits from public during the year within the
 meaning of section 58A of the Companies Act, 1956 and the rules framed
 thereunder.  vii.  In our opinion, the Company though not having
 internal audit system has adequate internal control commensurate with
 its size and nature of its business.  viii.  We have broadly reviewed
 the books of accounts 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, without carrying
 out a detailed examination, and are of the opinion lhat prima facie the
 prescribed accounts and records have been maintained.
 
 
 
 Ix. (a)According to the records of the Company it has been regularly
 depositing undisputed statutory dues like Investor Education and
 Protection Fund, income Tax, Sales Tax, Wealth Tax, Custom duty,
 Service Tdx, Central Excise duty and Cess and other statutory duties
 with appropriate authorities. In respect of Provident Fund and
 Employees State insurance there is delay in depositing the amount.
 According to the information and explanations given to us, no
 undisputed amounts payable in respect of income Tax, Wealth Tax, Sales
 Tax, Customs Duty, Service Tax, Excise Duty and Cess were in arrears as
 at 31 st March 2010 for a period more than six months from the date
 they become payable.
 
 (b) On the basis of our examination of the documents and records, there
 are no disputed statutory dues which have not been deposited with the
 appropriate authorities as at 31 st March, 2010.
 
 x.  (i) The accumulated losses at the end of the financial year has
 exceeded its 50% of Net worth.  (ii) There is no cash loss during the
 financial year ended 31.03.2010 and 31.03.2009.
 
 xi. The Company has not repaid the dues to the financial institutions/
 Banks/ Debenture Holders
 
 Particulars Amount in Lacs Period from Which
 
 Outstanding
 
 1131 157.77 1996
 
 xii.  As explained to us. the Company has not granted any loans or
 advances on the basis of security by way of pledge of shares,
 debentures or any other securities.
 
 xiii. The provisions of any special statute applicable to chit fund /
 nidhi /.mutual benefit fund / societies are not appii cable to the
 Company.
 
 xiv. in respect of shares, securities, debentures and other investments
 dealt or traded by the Company, • proper records dre maintained in
 respect of transactions and contracts and timely entries have been made
 therein, all the investments are held by the Company in its own name;
 
 xv.  According to the information and explanations given to us, and the
 representations made by the management, fhe Company has not given any
 guarantee for loans taken by others from any bank or financial
 institution.
 
 xvi. On the basis of the records examined by us, and the information
 and explanations given to us the Company has not obtained any term loan
 during the year.
 
 xvii.  According to the information and explanations given to us and on
 an overall examination of the Balance Sheet of the Company, we are of
 the opinion- that there are no funds raised on short-term basis that
 have been used for long-term investment.
 
 xviii. Tha Company has not made any preferential allotment of shares
 to parlies and companies covered in the register maintained under
 Section 301 of the Companies Act, 1956;
 
 xix.  On the basis of the records and documents examined by us, the
 company has not issued any debentures during the year;
 
 xx. The Company has hot raised any money by public issue, during the
 year;
 
 xxi.  In our opinion and according to the information and expianations
 given to us, no material fraud on or by the company has been noticed or
 reported during the course of our audit.
 
                                            For V.N.G. NATH ASSOCIATES 
                                                Chartered Accountants.  
                                                      Valdynathan M.S.
                                                Komarapalayam Partner
 
 31st May, 2010                                  Membership No. 14393
 
 Firm Bean, No. 7159 S