We have audited the attached Balance Sheet of BANSWARA SYNTEX LIMITED,
 as at 31st March, 2011 and also the Profit and Loss Account and Cash
 Flow Statement of 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.
 
 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 financial statements. An audit also includes assessing
 the accounting principles used and significant estimates made by the
 management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 As required by the Companies (Auditor''s Report) Order, 2003 issued by
 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 paragraph 4 and 5 of the said order.
 
 1) 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, the Company has kept proper books of accounts as 
 required by the law, so far as appears from our examination of those books.
 
 iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of accounts.
 
 iv) In our opinion, Balance Sheet, Profit & 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 ofthe
 Companies Act, 1956.
 
 v) On the basis of written representations received from the Directors,
 as on 31 st March, 2011 and taken on record by the Board of Directors,
 we report that none of the Director 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 ofthe 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 ofthe
 Company as at 31 st March, 2011;
 
 b) In the case of Profit & Loss Account, of the profit for the year
 ended on that date; and
 
 c) In the case of Cash Flow statement, of the cash flow for the year
 ended on that date.
 
 ANNEXURE TO THE AUDITORS'' REPORT
 
 Statement referred to in paragraph (3) of our report of even date to
 the shareholders of the BANSWARA SYNTEX LIMITED on the accounts for the
 year ended 31 March, 2011.  
 
 (I) (a) The company has maintained proper records showing full 
 particulars including quantitative details and situation of fixed 
 assets.
 
 (b) Fixed Assets of the company have been physically verified by the
 management during the year and there is also 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. No material
 discrepancies were noticed on such verification.
 
 (c) No substantial part of fixed assets have been disposed off during
 the year.
 
 (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. Inventories with others are
 verified by respective party.
 
 (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) The company has not granted any unsecured loan to companies,
 firms or other parties covered in the register maintained under section
 301 of the Companies Act, 1956. Accordingly clause 4(iii) (a) to (d) of
 the Companies (Auditor''s Report) Order, 2003 are not applicable.
 
 (e) Unsecured loans taken from 12 (Twelve) persons covered in the
 register maintained under section 301 of the Companies Act, 1956
 amounting to Rs.497.90 Lacs outstanding at the year end and the maximum
 amount involved is Rs.513.27 Lacs.
 
 (f) Interest and other terms & conditions of loan taken are not prima
 facie prejudicial to the interest to the company.
 
 (g) Company is regular in payment of principal amount and interest.
 
 (iv) In our opinion and according to the information 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 with
 regard to the sale of goods and services. During the course of our
 audit, we have not observed any continuing failure to correct major
 weakness in internal controls system.
 
 (v) (a) According to the information and explanations given to us, we
 are of the opinion that 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 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 and 58AA of the Companies Act, 1956 and the Companies (Acceptance
 of Deposits) Rules, 1975 with regard to the deposits accepted from the
 public. To the best of our knowledge and according to the information
 and explanations given to us, no order on the company under aforesaid
 section has been passed by the Company Law Board.
 
 (vii)ln our opinion, the company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii)According to the information and explanations given to us, the
 Central Government has prescribed under Section 209 (1) (d) of the
 Companies Act, 1956, the maintenance of cost records in respect of its
 products manufactured by the Company. We have broadly reviewed the
 books of account maintained and in our opinion; the prescribed accounts
 and records have prima facie been made and maintained by the company.
 We have not, however, made a detailed examination of the records with a
 view to determine whetherthey are accurate or complete.
 
 (ix) (a) The company is generally 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, service tax, custom duty, excise
 duty, cess and other material statutory dues applicable to it.
 
 According to the 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 arrears, as at 31.03.2011 for a
 period of more than six months from the date they became payable.
 
 (b) According to the information and explanations given to us, there
 are no dues of sales tax, income tax, service tax, customs duty, wealth
 tax and excise duty which have not been deposited on account of any
 dispute except the following:
 
 Nature of   Nature        Amount    Period to     Forum where
 Statute     of             (Rs.)    which the     dispute is
             Dues                    Amount        pending
                                     relates
 Central 
 Excise      Excise      9,78,107    2005-06       Hon''bleHigh
 Act, 1944   Duty                                  Court, Rajasthan
 
 Central 
 Excise      Excise      1,96,422    2003-04       Joint Secretary 
 Act, 1944   Duty                                  Government of
                                                   India
 
 Finance 
 Act, 1994   Service    23,43,538    2006-07 to    CESTAT,
             Tax                     2007-08       New Delhi
 
 Finance 
 Act, 1994   Service     2,75,829    2008-09 to    Commissioner
             Tax                     2009-10       (Appeals), 
                                                   Jaipur-ll
 
 The 
 Rajasthan 
 Tax on      Entry    6,31,55,618*   20O6-2007to   Hon''bleHigh
 Entry of    Tax                     2009-2010     Court, Rajasthan
 Goods
 into
 Local Area
 Act,
 1999
 
 Rajasthan 
 value       Value      31,58,991    2007-08 to    Assrt.Commissionei
 added       AddedTax                2009-10       Commercial Taxes
 Tax
 Act
 2003
 
 Central 
 Sales Tax   Central    48,27,690    2007-08 to    Asstt. Commissioner
 Act,1956    Sales Tax               2009-10       Commercial Taxes
 
 *Since Paid Rs. 2,01,80,698/-
 
 (x) There are no accumulated losses at the end of financial year. The
 company has also not incurred cash losses during the financial year
 covered by our audit and preceding financial year.
 
 (xi) In our opinion and according to the information and explanations
 given to us, the company has generally not defaulted in repayment of
 dues to a financial institution and bank.
 
 (xii) According to information and explanations given to us, the
 company has not given any loan and advances on the basis of security by
 way of pledge of shares, debentures and other securities.
 
 (xiii) The Company is not a chit fund. Therefore, the provisions of
 clause 4 (xiii) of Companies (Auditor''s Report) Order, 2003 are not
 applicable to the company.
 
 (xiv) In our opinion, the company is not dealing in or trading in
 shares, securities, debentures and other investments.  Accordingly, the
 provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order,
 2003 are not applicable to the company.
 
 (xv) According to information and explanations given to us, the company
 has given guarantee for Rs.1950 Lacs for loans taken by Carreman
 Fabrics India Limited, a Joint Venture.  The terms and conditions of
 such guarantee 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 and on
 an overall examination of the balance sheet and cash flow statement of
 the company, we report that no funds raised on short term basis have
 been used for long term investment.
 
 (xviii)According to the information and explanations given to us, the
 company has not made preferential allotment of shares to parties and
 companies covered in the register maintained under section 301 of the
 Act.
 
 (xix) The Company has not issued debentures during the year.
 
 (xx) The Company has not raised any money through 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 KALANI & COMPANY
                                              Chartered Accountants 
                                                      FRN - 000722C
 
                                                       K.L. JHANWAR
                                                            Partner 
                                                         M.No.14080
 
 Place : Mumbai 
 Dated : 16th May, 2011