Vogue Textiles Ltd

To The Members Vogue Textiles Limited New Delhi

We have audited the attached balance sheet of M/s Vogue Textiles Limited as on 31^st March, 2009, and the attached profit and loss account of the company for the year ended on that date, annexed thereto. These financial statements are the responsibly of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

1. We conducted our audit in accordance with the 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 amount and disclosure 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.

2. As required by the Manufacturing and other companies (Auditor's Report) Order, 1988 issued by the Company Law Board interims of Section 227 (4) of the Companies Act, 1956, we annex thereto a statement on the matter specified in paragraph 4 & 5 of the said order..

3. Further to our comments in the Annexure referred to in Paragraph 1 above.

(i) We have obtained all the information and explanation, 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 law have been kept by the company, so far as appear from our examination of the books;

(iii) The Balance Sheet and Profit and Loss Account dealt with by the report are in agreement with the books of accounts;

(iv) In our opinion, the Balance Sheet and the Profit and Loss Account complies with the mandatory Accounting Standards referred to in Section 211 (3c) of Companies Act 1956.

On the basis of written representation received from the directors, as on 31^st March 2009 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31^st March 2009 from being appointed as a director in terms of clause (g) of subsection (1) of section 274 of the Companies Act, 1956;

(v) In our opinion and to the best of our information and according to the explanation given to us, in manner so required and give a true and fair view in conformity with the accounting principle accepted in India:

a) In the case of Balance Sheet, of the state of affair of the company as at 31^st March 2009;

b) In the case of the Profit and Loss account, of the Profit / Loss for the year ended on that date; and

c) In the case of the cash flow statement, of the cash flow for the year ended on that date.

Annexure to the audit report

Re: VOGUE TEXTILES LIMITED

Referred to in paragraph 3 of our report of even date,

(i) a) The Company has maintained proper records showing full particulars in including quantitative detail and situation of fixed assets.

b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the returns of its assets. No material discrepancies were noticed on such verification.

c) During the year, the company has not disposed off a major part of the plant and machinery. According-to the information and explanation given to us, we are of the opinion that the sale of the said part of plant and machinery has not affected the going concern status of the company.

(ii) a) The inventory has been physically verified during the year by the management. 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 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 books records were not material.

(iii) a) The company had not taken any loan from companies covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and 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) No transactions have been entered during the year in the register maintained in pursuance of Section 301 of the Companies Act,1956 and based on the audit procedures applied by us and according to the information and explanations given and the representations made to us, we have not come across any transaction that need to be entered into the register maintained in pursuance of Section 301 of the Companies Act,1956. Accordingly, sub-clause (b) is not applicable.

(vi) In our opinion and according to the information and explanation given to us, the company has complied with the provision of section 58 A and 58 AA 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 Company Law Board.

(vii) In our Opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) The Company has not maintained the books of accounts relating to materials, labour and other items of cost 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.

(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, custom duty, excise duty, cess and other material statutory dues applicable to it.

b) According to information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, and cess were in arrear, as at 31^st March 2009 for a period of more than six months from the date they became payable.

c) According to the information and explanation given to us, there are no dues of sales tax, income tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute.

(x) In our opinion, the accumulated losses of the company are not more than fifty percent of its net worth.The company has incurred cash losses during the financial year covered by our audit.

(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, bank or debenture holder.

(xii) We are of the opinion that the company has maintained adequate records where the company has 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 provisions of clause 4 (XIII) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion, the company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provision of clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xv) 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) In our opinion, the term loans have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us an on an overall examination of the balance sheet of the company, we report that the no funds raised on short term basis haven been used for long term investment. No long term funds have been used to finance short term assets except permanent working capital.

(xviii) According to information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register under section 301 of the Act.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the company had not issued any debentures.

(xx) The company has not raised money from public in public issue.

(xxi) According to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

FOR BAHL AND BATRA

Chartered Accountants