1.  We have audited the attached Balance Sheet of Binani Industries
 Limited as at March 31, 2011 and also the Profit and Loss Account and
 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 the auditing standards
 generally accepted in India. Those Standards required 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 signifcant 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) 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 specifed 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 accounts as required by law have
 been kept by the Company so far as appears from our examination of
 these 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. Based on the written representations received from the Directors,
 and taken on record by the Board of Directors, we report that none of
 the directors is disqualifed as on March 31, 2011 from being appointed
 as Directors in terms of Section 274 (1) (g) of the Companies Act,
 1956.
 
 5. In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read with the
 signifcant Accounting Policies and other notes thereon 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 of the
 Company 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 referred to in paragraph 3 of our report of even date to the
 Members of Binani Industries Limited.
 
 i.  a) The Company is maintaining proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 b) All fixed assets have not been physically verifed by the management
 during the year, but there is a regular programme of verifcation which
 in our opinion is reasonable having regards to the size of the Company
 and the nature of its assets. We are informed that no material
 discrepancies were noticed on such verifcation.
 
 c) There has been no disposal of substantial part of fixed assets during
 the year, which may affect the going concern status of the Company.
 
 ii. The Company does not hold any inventories. Accordingly, clause (ii)
 of paragraph 4 of the Order is not applicable.
 
 iii. According to information and explanations given to us, the Company
 has neither granted nor taken any loans, secured or unsecured, to or
 from companies, frms or other parties covered in the register
 maintained under 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 are adequate internal control procedures
 commensurate with the size of the Company and the nature of its
 business, for the purchase of fixed assets and sale of services. On the
 basis of our examination of the books and records of the Company, we
 have not observed any continuing failure to correct major weaknesses in
 the internal control system.  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 needed 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 contracts or
 arrangements entered in the register maintained under Section 301 of
 the Companies Act, 1956 and exceeding the value of rupees fve lacs in
 respect of any party during the year have been made at 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 to which
 the directives issued by Reserve Bank of India and the provisions of
 Section 58A, 58AA or any other relevant provisions of the Companies Act
 and the rules framed there under apply.
 
 vii. In our opinion, the internal audit functions carried out during
 the year by a frm of Chartered Accountants appointed by the management
 have been commensurate with the size of the Company and nature of its
 business.
 
 viii. As informed to us, the Company is not required to maintain cost
 records under Section 209 (1) (d) of the Companies Act, 1956.
 
 ix.  a) According to the records of the Company, the Company is
 generally regular in depositing 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 any other statutory dues with the
 appropriate authorities during the year.
 
 Further, since the Central Government has till date not prescribed the
 amount of cess payable under Section 441 A 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 record of the Company, there are no dues
 outstanding of Income Tax, Sales Tax, Service tax, Custom Duty, Wealth
 Tax, Excise Duty, Cess on account of any dispute, other than the
 following:
 
 Name of         Nature of     Period to        Amount 
 the Statute      Dues         which the        Rs. in
                                                 Lacs
                               amount
                               relates
 
 Income Tax    Income tax      1996-97          344.45
 Act, 1961
 
 Income Tax    Income tax      2007-08        3,791.76
 Act, 1961
 
 
 Name of the Statue         Forum
                            where
                            dispute is
                            pending
 
 Income Tax
 Act, 1961                  Assessing
                            officer
 
 Income Tax
 Act, 1961                  High Court
 
 x.  The Companys accumulated losses at the end of the financial year
 are less than ffity per cent of its net worth and it has not incurred
 cash loss both in the current year and in the immediately preceding
 financial year.
 
 xi. Based on our audit procedures and as per the information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to financial institutions
 or banks. The Company has not issued any debentures.
 
 xii. According to the information and explanations given to us and
 based on the documents and records produced to us, the Company has not
 granted loans and advances on the basis of security by way of pledge of
 shares, debentures and other securities.
 
 xiii. In our opinion and according to the information and explanations
 given to us, the nature of activities of the Company does not attract
 any special statute applicable to chit fund and nidhi/mutual
 benefit/societies.
 
 xiv. In our opininon and according to information and explanation given
 to us, the Company has invested temporary surplus funds in mutual funds
 and term deposits. According to the information and explanation given
 to us proper records have been maintained of the transactions and
 contracts and timely entries have been made therein. The mutual funds,
 term deposits and the shares of its subsidiaries have been held by the
 Company in its own name.
 
 xv. According to the information and explanations given to us, the
 Company has given guarantee for loans taken by its subsidiaries from
 Banks and Financial Institutions, the terms and conditions thereof in
 our opinion are not prima facie prejudicial to the interest of the
 Company.
 
 xvi. Based on information and explanations given to us by the
 management, term loans were applied for the purpose for which the loans
 were obtained.
 
 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 Company has not used funds raised on short-term basis for long
 term purposes.
 
 xviii. The Company has not made preferential allotment of shares to
 parties and companies covered in the register maintained under Section
 301 of the Companies Act, 1956.
 
 xix. According to the information and explanations given to us and the
 records examined by us, no debentures were issued by the Company during
 the year.
 
 xx. The Company has not raised any money through public issue during
 the year.
 
 xxi. Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations given by the management, we report
 that no fraud on or by the Company has been noticed or reported during
 the course of our audit.
 
 For Kanu Doshi Associates
 
 Chartered Accountants
 
 Firm Registration No. 104746W
 
 Jayesh Parmar
 
 Partner
 Membership No.45375
 
 Place : Mumbai
 Date  : April 22, 2011