1.  We have audited the attached Balance Sheet of BINANI CEMENT LIMITED
 (the Company) as at March 31, 2011 and 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 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 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, as
 amended by the Companies (Auditors Report) (Amendment) Order, 2004,
 issued by the Central Government of India in terms of sub-section (4A)
 of Section 227 of ‘The Companies Act, 1956 of India (the ‘Act) and on
 the basis of such checks of the books and records of the Company as we
 considered appropriate and according to the information and
 explanations given to us, we give 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 paragraph 3 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 purpose 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 the written representations received from the
 directors, as on March 31, 2011 and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 March 31, 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 March 31, 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 Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 ANNEXURE TO AUDITORS REPORT [Referred to in paragraph 3 of the
 Auditors Report of even date to the members of BINANI CEMENT LIMITED
 on the financial statements for the year ended 31st March, 2011]
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) All the fixed 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. As informed, no
 material discrepancies were noticed on such verification.
 
 (c) In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 off by the Company during the year.
 
 (ii) (a) As explained to us, the inventory has been physically verified
 by the management during the year. In our opinion, the frequency of
 verification is reasonable.
 
 (b) The procedures of physical verification of inventory 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 and no
 material discrepancies were noticed on physical verification carried
 out at the end of the year.
 
 (iii) As per information and explanations given to us, the Company has
 neither granted nor taken loan, secured or unsecured, to or from
 companies, firms or other parties covered in the register maintained
 under Section 301 of the Companies Act, 1956. Accordingly, the
 sub-clauses (b), (c), (d), (f) and (g) of clause (iii) are not
 applicable to the Company.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there exists an adequate internal control system
 commensurate with the size of the Company and the nature of its
 business with regard to purchase 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 control system of the Company.
 
 (v) (a) In respect of transactions entered in the register maintained
 in pursuance of Section 301 of the Companies Act, 1956, to the best of
 our knowledge and belief and according to the information and
 explanations given to us, particulars of contracts or arrangements that
 needs to be entered into the register have been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of the contracts or
 arrangements entered in the register maintained under Section 301 of
 the Companies Act, 1956 and exceeding the value of Rs. 5 lakhs in
 respect of such party during the year have been made at a price which
 are reasonable having regard to prevailing market price at the relevant
 time.
 
 (vi) The Company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA of the Act and the rules framed
 there under.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) We have broadly reviewed the books of account maintained by the
 Company in respect of products where, pursuant to the Rules made by the
 Central Government of India, the maintenance of cost records has been
 prescribed under clause (d) of sub-section (1) of Section 209 of the
 Act and we are of the opinion that prima facie, the prescribed accounts
 and records have been made and maintained.
 
 (ix) (a) The Company is generally 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, customs
 duty, excise duty, cess and other material statutory dues applicable to
 it.
 
 Further, since the Central Government has till date not prescribed the
 amount of cess payable under Section 441A of the Companies Act,1956, we
 are not in a position to comment upon the regularity or otherwise of
 the company in depositing the same.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of provident fund, investor
 education and protection fund, employees state insurance, income-tax,
 wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
 other undisputed statutory dues were outstanding, at the year end, for
 a period of more than six months from the date they became payable.
 
 (c) According to the records of the Company, the dues outstanding of
 income-tax, sales-tax, service tax, customs duty, excise duty and cess
 on account of any dispute, are as follows:
 
 Name of the statute          Nature of dues         Amount
                                                   (Rs. in Lakhs)
 
 Customs Act, 1962      Duty on DEPB licenses and     6.77
                        interest there on
 
 Central Excise 
 Act, 1944              ED demand against dispatch    1.78
                        of cement to earthquake area
 
 Central Excise Act, 
 1944                   Cenvat credit on welding     21.89
                        electrodes
 
 Central Excise Act, 
 1944                   Cenvat credit on welding      4.92
                        electrodes
 
 Central Excise Act, 
 1944                   Cenvat credit on welding      2.91
                        electrodes
 
 Customs Act, 1962      Differential custom duty     30.61
 
 Central Excise 
 Act, 1944              Cenvat credit on service tax  0.94
 
 Central Excise Act, 
 1944                   Excise duty on sale           1.00
 
 Central Excise Act, 
 1944                   Cenvat credit on capital
                        goods                        34.70
 
 Central Excise 
 Act, 1944              Cenvat credit on service tax 43.58
 
 Central Excise 
 Act, 1944              Cenvat credit on service tax  2.60
 
 Central Excise 
 Act, 1944              Penalty imposed on service    7.20
                        tax
 
 Rajasthan Sales Tax 
 Act,                   Sales tax on freight and 
                        credit                       70.21
 1994                   notes
 
 Rajasthan Sales 
 Tax Act,               Sales tax matters            10.20
 1994
 
 Rajasthan Sales 
 Tax Act,               Sales tax matters             0.50
 1994
 
 UP Trade tax / 
 Entry tax              UP tax on entry of goods     64.77
 
 UP Trade tax / Entry 
 tax                    UP tax on entry of goods    109.38
 
 UP Trade tax / Entry 
 tax                    Late deposit of UP VAT        8.64
 
 Rajasthan Tax on Entry Entry tax                   811.00
 of Goods into Local Area
 Act, 1999
 
 Rajasthan Finance Act,  M R Cess                   925.30
 2006
 
 Rajasthan Sales 
 Tax Act,                Sales tax exemption     13,327.19
 1994
 
 Rajasthan Value Added   Sales tax exemption     18,734.27
 Tax Act, 2006
 
 Income Tax Act, 1961    Interest under section
                         234B                       301.11
                         and 234C
 
 
 
 
 Name of the            Period to which the   Forum where dispute is
 Statue                  amount relates             pending
 
 Customs Act, 1962      2000-01               Commissioner of Custom,
                                              Kandla
 
 Central Excise Act, 
 1944                   2001-02               Honble Rajasthan High
                                              Court, Jaipur
 
 Central Excise Act, 
 1944                   2000 to 2006          CESTAT, Delhi
 
 Central Excise Act, 
 1944                   2006 to 2008          Commissioner (Appeals),
                                              Jaipur II
 
 Central Excise Act, 
 1944                   2008 to 2010          Commissioner (Appeals),
                                              Jaipur II
 
 Customs Act, 1962      2002-03 & 2003-04     Honble High Court, Gujarat
 
 Central Excise Act, 
 1944                   2006-07 & 2007-08     CESTAT, Delhi
 
 Central Excise Act, 
 1944                   2006-07 & 2007-08     CESTAT, Delhi
 
 Central Excise Act, 
 1944                   2006-07               CESTAT, Delhi
 
 Central Excise Act, 
 1944                   2008 to 2010          Commissioner (Appeals),
                                              Jaipur II
 
 Central Excise Act, 
 1944                   2005-06 & 2006-07     Commissioner (Appeals),
                                              Jaipur II
 
 Central Excise Act, 
 1944                   2007-08               CESTAT, Delhi
 
 Rajasthan Sales Tax Act,
 1994                   1997-98               Honble High Court,
                                              Jodhpur
 
 Rajasthan Sales Tax Act,
 1994                   1996-97               Honble High Court,
                                              Jodhpur
 
 Rajasthan Sales Tax Act,
 1994                   2005-06               Honble High Court,
                                              Jodhpur
 
 UP Trade tax / Entry 
 tax                    2004-05 & 2006-08     Honble Allahabad High
                                              Court
 
 UP Trade tax / Entry 
 tax                    2009-10               Honble Allahabad High
                                              Court
 
 UP Trade tax / Entry 
 tax                    2009-10               Additional Commissioner
                                              (Appeals), Ghaziabad
 
 Rajasthan Tax on Entry
 of Goods into Local Area
 Act, 1999              2006  to 2011         Honble Rajasthan High
                                              Court
 
 Rajasthan Finance Act,
 2006                   2008 to 2011          Honble High Court,
                                              Jodhpur
 
 Rajasthan Sales Tax Act,
 1994                   1998-99               Honble Supreme Court
 
 Rajasthan Value Added
 Tax Act, 2006          2007  to 2011         Honble High Court,
                                              Jodhpur
 
 Income Tax Act, 1961   2004-08               Commissioner of Income
                                              Tax (Appeals) / High Court
 
 (x) The Company does not have accumulated losses at the end of the year
 and it has not incurred cash losses in the current year as well as 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
 financial institutions, banks or debenture holders.
 
 (xii) According to information and explanation given to us, we are of
 the opinion that the Company has not granted any 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, the provisions of clause
 4(xiii) of the Companies (Auditors Report) Order, 2003 (as amended)
 are not applicable to the Company.
 
 (xiv) In our opinion, the Company is not dealing or trading in shares,
 securities, debentures and other investments. However, the Company has
 invested surplus funds in mutual funds. According to the information
 and explanations given to us, proper records have been maintained of
 the transactions and contracts and timely entries have been made
 therein. The mutual fund investments have been held by the Company in
 its own name.
 
 (xv) In our opinion and according to the information and explanations
 given to us, the terms and conditions of the guarantees given by the
 Company, for loans taken by others from banks or financial institutions
 during the year, are not prejudicial to the interest of the Company.
 
 (xvi) To the best of our knowledge and belief and according to the
 information and explanations given to us, in our opinion, the term
 loans availed by the Company were, prima facie, applied by it during
 the year for the purpose for which the loans were raised, other than
 temporary deployment in deposits with banks, pending application of
 those loans.
 
 (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 no funds raised on short-term basis have been used for long-term
 purpose.
 
 (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 Act.
 
 (xix) The Company has created securities or charge in respect of
 debentures issued and outstanding at the year end.
 
 (xx) The Company has not raised any money by way of public issues
 during the year.
 
 (xxi) During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of any such case by the management.
 
 For Haribhakti & Co.                      For Kanu Doshi Associates
 
 Chartered Accountants                         Chartered Accountants
 
 FRN 103523W                                             FRN 104746W
 
 RAKESH RATHI                                          JAYESH PARMAR
 
 Partner                                                     Partner
 
 Membership No.45228                             Membership No.45375
 
 Place : Mumbai                                       Place : Mumbai
 
 Date  : 22nd April, 2011                  Date   : 22nd April, 2011