1.  We have audited the attached Balance Sheet of BANCO PRODUCTS
 (INDIA) LIMITED, as at 31st March 2011 and also the Profit and 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 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 (Auditors'' 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:
 
 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 law have been
 kept by the Company so far as appears from our examination of such
 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
 and comply with the accounting standards referred to in section 211(3C)
 of the Companies Act,1956.
 
 d) On the basis of the 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 are disqualified as on
 31 st 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.
 
 e) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read together with the
 notes in schedule 21, 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 Balance Sheet of the stak of affairs of the company
 as at 31st March,2011.
 
 ii) In the case of Profit and Loss Account of the PROFIT of the
 company for the year ended on that date.
 
 And
 
 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
 
 (Referred to in Para 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) 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 nature of its assets. We are informed that no material
 discrepancies were noticed on such verification.
 
 (c) The company has not disposed off substantial part of its fixed
 assets during the year.
 
 (ii) (a) The Inventory has been physically verified by the Management
 at the end of the year except stock lying with third parties in respect
 of which confirmations have been obtained in majority of the cases by
 the company.
 
 (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 book records were not material.
 
 (iii) (a) According to the information and explanations given to us,
 the company has during the year not granted any loans secured or
 unsecured to companies, firms or other parties listed in the register
 maintained under section 301 of the Companies Act, 1956. Accordingly,
 paragraphs 4 (iii) (b), (c) and (d) of the Companies (Auditor''s Report)
 order, 2003 are not applicable for the current year.
 
 (b) According to the information and explanations given to us, the
 company has during the year not taken any loans secured or unsecured
 from companies, firms or other parties listed in the register
 maintained under section 301 of the Companies Act, 1956. Accordingly,
 paragraphs 4 (iii) (f) and (g) of the Companies (Auditor''s Report)
 order, 2003 are not applicable for the current year.
 
 (iv) In our opinion and according to the infor/nation and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the company and the nature of its
 business with regard to purchases of inventory, fixed assets and for
 the sale of goods and services. Further, on the basis of our
 examination and according to the information and explanations given to
 us, we have neither come across nor have any information of any
 instances of major weaknesses in the aforesaid internal control
 systems.
 
 (v) (a) According to the information and explanations given to us, the
 transactions that need to be entered into the register maintained under
 section 301 of the companies Act, 1956 have been so entered.
 
 (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 the value of rupees five Lacs 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.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the company has complied with the provisions of sections
 58A, 58AA or any other relevant provisions of the Companies Act, 1956
 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to
 the deposits accepted from the public. We are informed by the
 management that no order has been passed by the Company Law Board,
 National Company Law Tribunal or Reserve Bank of India or any Court or
 any other Tribunal.
 
 (vii) In our opinion, the company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) We are informed that cost records are required to be maintained
 by the company under Section 209(1 )(cr) of the Companies Act 1956 from
 financial year 2002-2003 for certain products of the company as per
 notification No. G.S.R 279(E) dated 24th April, 2001. We have not
 reviewed the cost records maintained by the company, but we are
 informed that the prescribed cost records are maintained by the
 Company.
 
 (ix) (a) The company is regular in depositing with appropriate
 authorities undisputed statutory dues including provident fund,
 investor education and 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 it.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of income tax, wealth tax, sales
 tax, service tax, customs duty, excise duty and cess were in arrears,
 as at 31st March 2011 for a period of more than six months from the
 date they became payable.
 
 (c) Following disputed demands aggregating to X 204.92 Lacs have not
 been deposited since the matters are pending with the relevant
 concerned authorities.
 
 Name of the    Nature    Amount     Period to which      Forum where 
 Statute        of Dues               the amount          the dispute
                                        relates           is pending
 
 Central Excise Excise 
                Duty &   Rs. 230.73   Financial years 1997
                                    -98                   Different
                                                          Authorities 
 Act, 1944      Service 
                Tax        Lacs      and 2004-05 to       at Vadodara,
                                    September 2010        Ahemdabad & 
                                                           Mumbai
 Income Tax   Income Tax             Assessment Years
 Act, 1961               Rs. 0.50 Lac    2005 - 06          ITO and CIT
 
                         Rs. 0.69 Lac    2007 - 08          (A) 
                                                          respectively
 
 x) The company has no accumulated losses as at 31st March,2011. The
 company has not incurred cash losses in the financial year ended on
 that date or in the immediately preceding financial year.
 
 (xi) According to the information and explanations given to us, the
 company has not defaulted in repayment of dues to financial institution
 or banks.
 
 (xii) According to the information and explanations given to us, the
 company has not granted any loans or advances on the basis of security
 by way of pledge of shares, debentures and other securities.
 
 (xiii) The company is not a chit fund or a nidtii/mutual benefit
 fund/society. Therefore, the provisions of clause 4(xiii) of the
 Companies (Auditors'' report) Order, 2003 are not applicable to the
 company.
 
 (xiv) The Company has maintained proper records of the transactions and
 contracts in respect of dealing or trading in shares, securities and
 other investments, and timely entries have been made therein. All
 shares securities and other investments have been held by the company
 in its own name.
 
 (xv) According to the information and explanations given to us, the
 company has not given any guarantee for loans taken by others from bank
 or financial institutions.
 
 (xvi) According to the information and explanations given to us, the
 term loans have been applied for the purpose for which they were
 raised.
 
 (xvii) According to the information and explanations given to us, the
 company has not used short term borrowings for long term investment.
 
 (xviii)According to the information and explanations 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.
 
 (xix) The company has not issued any debentures during the year.
 
 (xx) The company has not raised any monies by public issue during the
 year.
 
 (xxi) 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 SHAH & CO.,
                                            Chartered Accountants
 
                                                     (H. N. SHAH)
                                                          Partner 
 Place : Mumbai                              Membership No : 8152
 Date : 30th May, 2011                                FRN 109430W