1.  We have audited the attached balance sheet of MAHALAXMI RUBTECH
 LIMITED, as at 31st March, 2011, the 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
 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 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 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 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 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) 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 for the
 year ended on that date.
 
 ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE
 
 (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 have been physically verified
 by the management during the year. In our opinion, the frequency of
 verification is reasonable having regard to the size of the company. No
 material discrepancies were noticed on such verification.
 
 (c) There was no disposal of substantial part of fixed assets during
 the year.
 
 (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) According to the information and explanation given 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) On the basis of our examination of records of inventory, the
 company has maintained proper records of inventory and no material
 discrepancies were noticed on physical verification.
 
 (iii) (a) According to the information and explanation given to us, the
 company has not granted any loans, secured or unsecured to the
 companies, firms or other parties covered in register maintained under
 section 301 of the Companies Act, 1956. Accordingly Para 4(iii) (b),
 (c) and (d) of the Companies (Auditors Report) Order, 2003 are not
 applicable.
 
 (B) According to the information and explanation given to us company
 has taken loans secured or unsecured from four companies, firms or
 other parties covered in register maintained under section 301 of the
 Companies Act, 1956.The maximum amount involved during the year was
 Rs.1329.16 lakhs and the year end balance of the loan taken from such
 parties was Rs. 1158.04 lakhs.
 
 (C) In our opinion, the rate of interest and other terms and conditions
 on which loans have been taken from companies, firms or other parties
 listed in the register maintained under section 301 of the Companies
 Act, 1956 are not, prima facie, prejudicial to the interest of the
 company.
 
 (D) The company is regular in repaying the principal amounts as
 stipulated and has been regular in the payment of interest.
 
 (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
 purchases 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, the
 particulars of contracts or arrangements referred to in section 301 of
 the Companies Act, 1956 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 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) According to the information and explanations given to us, the
 company has not accepted any deposits during the year from the public
 within the meaning of the provisions of section 58A, 58AA or any other
 relevant provisions of the Companies Act, 1956 and rules made there
 under.
 
 vii) The company has an internal audit system during the year which in
 our opinion is in commensurate with the size and nature of its
 business.
 
 (viii) We have broadly reviewed the cost records 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 are of the opinion that prima facie, the prescribed
 accounts and records have been maintained by the company.
 
 (ix) (a) According to the information and explanations given to us, in
 our opinion, undisputed statutory dues including provident fund,
 investor education protection fund, employees'' state insurance, income
 tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess
 and other material statutory dues, applicable to the company have
 generally been regularly deposited with the appropriate authorities.
 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 in arrears as at 31st
 March, 2011 for a period of more than six months from when they became
 payable.
 
 (b) According to the information and explanation given to us, the
 disputed statutory dues that have not been deposited on account of
 matters pending before apropriate authorities are as under:
 
 Name of the Statute    Amount in   Forum where dispute is 
                          (Lakhs)   pending
 
 Central Excise Duty         9.98   Appellate Tribunal
   
 Textile Cess               11.12   High Court
 
 Labour Suits                0.60   Labour Court
 
 Income Tax                 12.89   High Court
 
 Income Tax                  1.99   Appellate Tribunal
 
 (x) There are no accumulated losses of the company as on 31st March,
 2011. The company has not incurred 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 dues to a
 financial institution or banks during the year.
 
 (xii) In our opinion and according to the information and explanations
 given to us, the company has not granted any loans and advances on the
 basis of security by way of pledge of shares, debentures or other
 securities.
 
 (xiii) The provisions of any special statute as specified under clause
 4 (xiii) of the Order are not applicable to the company.
 
 (xiv) According to the information and explanation given to us, the
 company is not dealing in or trading in shares, securities, debentures
 and other investments.  Accordingly, the provisions of clause 4 (xiv)
 of the Order are not applicable to the company.
 
 (xv) According to the information and explanation given to us, the
 company has not given any guarantee for loans taken by others from
 banks or financial institutions.
 
 (xvi) According to the information and explanation given to us, the
 term loans raised during the year have been applied for the purpose for
 which they were raised.
 
 (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 the no funds raised on short-term basis have been used for
 long-term investment by the company.
 
 (xviii) The company has not issued any debentures during the year.
 
 (xix) The company has not raised any money by way of public issues
 during the year.
 
 (xx) 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 BHANWAR JAIN & CO.,
 Chartered Accountants.
 
 
 S/d
 
 (B. M. JAIN)
 Partner.
 M.No.: 34943
 AHMEDABAD: 19th May, 2011.