1.  We have audited the attached Balance Sheet of MUKESH STRIPS
 LIMITED, Ludhiana, as at 31st March 2010, the Profit & Loss Account and
 Cash Flow Statement of the Company for the year ended on that date
 annexed thereto. These financial statements are the responsibility of
 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 misstatements. 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, issued
 by the Central Government of India in terms of Section 227 (4A) of the
 Companies Act 1956, we annex hereto a Statement on the matters
 specified in paragraph 4 & 5 of the said Order.
 
 4.  Further to our comments in the annexure referred to above, we
 report: -
 
 
 a) 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;
 
 b) In our opinion, proper books of account as required by law have been
 kept by the company, so far as appear from our examination of the
 books;
 
 c) The Balance Sheet and the Profit and Loss Account & Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 d) In our opinion, the Balance Sheet and the Profit & Loss Account &
 Cash Flow Statement dealt with by this report comply with the mandatory
 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
 as on 31-03-2010 and taken on record by the Board of Directors, we
 report that none of the directors is disqualified as on 31-03-2010 from
 being appointed as a director in term of Clause (g) of Sub-Section (1)
 of Section 274 of the Companies Act, 1956;
 
 f) Subject to above, In our opinion, and to the best of our information
 and according to explanation given to us, the said accounts
 read-together with the Notes on Accounts (as per Schedule XXI), give
 the information required by the Companies Act, 1956, in the manner so
 required and give true and fair, view in conformity with the accounting
 principles generally accepted in India :-
 
   i) in the case of the Balance She,et, of the state of affairs of the
      company as at 31 st March, 2010;
 
  ii) in the case of the Profit and Loss Account, of the Profit for the
      year ended on that date and
 
 iii) in the case of Cash Flow Statement of the cash flows of the company
      for the year ended on that date.
 
 
 
 
 ANKEXURE TO AUDITORS REPORT
 
 REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN PATE
 
 1.  (a) The company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets on the basis of available information.
 
 (b) As explained to us, the fixed assets have been physically verified
 by the management during the year at periodic intervals. In our
 Opinion, the frequency of physical verification is reasonable having
 regard to size of the company and nature of its fixed assets. No
 material discrepancies, which need to be dealt within books of account,
 have been noticed on such physical verification as compared to the book
 records.
 
 (c) The company has not disposed off substantial part of its fixed
 assets during the year. In our opinion, going concern status of the
 company is not affected.
 
 
 2.  (a) As explained to us, inventories have been physically verified
 by the management at regular intervals during the year.
 
 (b) In our opinion and according to the information and explanations
 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) The company has maintained proper records of inventories. As
 explained to us, there was no material discrepancies noticed on
 physical verification of inventory as compared to the book records.
 
 
 3.  In respect of loans, secured or unsecured, granted or taken by the
 company to/from companies, firms or other parties covered in the
 register maintained u/s 301 of the Companies Act, 1956 :
 
 a) the company has granted loans to three parties. The maximum amount
 involved during the year in loans granted was Rs. 175.00 Lacs. The
 year-end balance of such loans granted was Rs. 75.00 Lacs.
 
 b) the company has taken loans from Five parties. The maximum amount
 involved during the year in loans taken was Rs. 219.76 lacs. The
 yea-end balance of such loans taken was Rs. 0.76 Lacs.
 
 c) in our opinion and according to the information and explanations
 given to us, the rate of interest, wherever applicable and other terms
 and conditions are not prima facie prejudicial to the interests of the
 company.
 
 d) in respect of loans granted by company, the principal and interest,
 wherever applicable, is being received regularly by the company.
 
 e) in respect of loans taken by the company, the interest payments,
 wherever applicable, are regular and the principal amount is repayable
 on demand.
 
 f) there is no overdue amount in respect of loans granted by the
 company.
 
 
 4.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems commensurate
 with the size of the company and nature 6f its business for the
 purchase of inventory, fixed assets and also for the sale of goods and
 services. During the course of our audit, we have not observed any
 major weaknesses in internal control.
 
 5.  a) Based on the audit procedures applied by us and 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 such contracts or arrangements entered in the register
 maintained under section 301 of the companies Act, 1956 and exceeding
 the value of rupees five lakh in respect of any party during the year,
 have been made at prices which are reasonable, having regard to the
 prevailing market prices at the relevant time.
 
 6.  The company has not accepted deposits during the year from public.
 In our opinion and according to information and explanations given to
 us, the provisions of Section 58A and 58AA of the Companies Act, 1956
 and Rules framed there under have been complied with.
 
 7.  In our opinion, the internal audit system of the company is
 commensurate with its size and nature of its business.
 
 8.  We have broadly reviewed the cost records maintained by the company
 pursuant to the order made by the Central Government under Section
 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima
 
 facie the records have been mads and maintained but no examination of
 such records has been carried out by us.
 
 9.  a) According to the records of the company, undisputed statutory
 dues including Provident Fund, Investor Education and Protection Fund,
 Employees State Insurance, Income Tax, Value Added Tax, Wealth Tax,
 Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues
 have been generally regularly deposited with the appropriate
 authorities. According to the information and explanations given to us,
 no undisputed amounts payable in respect of the aforesaid dues were
 outstanding as at 31st March, 2010 for a period of more than six months
 from the date of becoming payable.
 
 b) According to the information and explanations given to us, there are
 no dues of Value Added Tax, Income Tax, Custom Duty, Wealth Tax,
 Service Tax, Excise Duty or Cess outstanding on account of any dispute
 except for interest on differential excise duty for which an appeal has
 been filed before CEGAT.
 
 10.  The company has no accumulated losses and has not incurred any
 cash losses during the financial year covered by our audit or in the
 immediately preceding financial year.
 
 11.  Based on our audit procedures and according to the information and
 explanations given to us, we are of the opinion that the company has
 not defaulted in repayment of dues to a financial institution or bank
 or debenture holders.
 
 12.  In our opinion and according to the information and explanations
 given to us, no loans and advances have been granted by the company on
 the basis of security by way of pledge of shares, debentures and other
 securities.
 
 13.  In our opinion, the company is not a chit fund or a nidhi/mutual
 benefit fund/society. Therefore, clause 4(xiii) of the Companies
 (Auditors Report) Order, 2003 is not applicable to the company.
 
 14.  In our opinion and according to the information and explanations
 given to us, the company is not dealing or trading in shares,
 securities, debentures and other investments.
 
 15.  According to the information and explanations given to us and the
 records examined by us, the company has not given any guarantee for
 loans taken by others from bank or financial institutions during the
 year.
 
 16.  According to the information and explanations given to us and the
 records examined by us, the company has not obtained any term loan
 during the year.
 
 17.  According to the information and explanations given to us and on
 the basis of overall examination of the Balance Sheet, we report that
 the company has not utilised the funds raised on short-term basis for
 long- term investments.
 
 18.  During the year under review, the company has.not made any
 preferential allotment of shares to the parties and companies covered
 in the register maintained under section 301 of the Companies Act,
 1956.
 
 19.  The company did not issue any debentures during the year.
 
 20.  The company has not raised any money by way of public issue
 duringthe year.
 
 21.  In our opinion and according to the information and explanations
 given to us, we report that no fraud on or by the company has been
 noticed or reported during the year.
 
                                    For GUPTA VINOD KUMAR & ASSOCIATES
 
                                                 Chartered Accountants
 
 
                                                      (VINOD K. GUPTA)
 
 PLACE  : LUDHIANA                                               Prop.
 
 DATED  : THIS 24th Day of August, 2010         Membership No.: 085489