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Auditor Report of PBM Polytex Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of PBM Polytex Limited ('the Company'), which comprise the balance sheet as at 31st March, 2015 the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ('the Act") with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also Includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015 and its profit and its cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub- section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143 (3) of the Act, we report that:

(a) we have sought and 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 it appears from our examination of those books;

(c) the balance sheet, the statement of profit and loss and the cash flow statement dealt with by this Report are in agreement with the books of account;

(d) in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) on the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act; and

(f) with respect to the other matters to be included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014. in our opinion and to the best of our information and according to the explanations given to us:

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements - (Refer Note No. 28 II Sub Note 2 (C) of to the financial statements;

ii. the Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses; and

Hi. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

The Annexure referred to in our Independent Auditors' Report to the members of the Company on the financial statements for the year ended 31st March, 2015 we report that:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(ii) (a) 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 has maintained proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) The Company has not granted loans to bodies corporate covered in the register maintained under section 189 of the Companies Act, 2013 ('the Act').

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

(v) The Company has not accepted any deposits from the public.

(vi) The Company is not required to maintained cost records as per Section 148 (1) of the Act.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, ESIC, income tax, sales tax, wealth tax, Excise service tax, duty of customs, value added tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues were in arrears as at 31st March, 2015 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 material dues of wealth tax, duty of customs and cess which have not been deposited with the appropriate authorit ,s on account of any dispute. However, according to information and explanations given to us, the following dues of income tax, sales tax, service tax and value added tax have not been deposited by the Company on account o, disputes:

Name of the Nature of dues Amount Period to which the Forum where Statute (in iacs) amount relates the dispute is pending

Income Tax Tax demands on 7.02 F.Y. 2010-11 and CIT(Appeals) disallowances 2011-12 under Asstt. orders

TDS Alleged demand of 12.71 F.Y. 2008-09 CIT (TDS) TDS difference

According to the information and explanations given to us the amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 2013 and rules there under has been transferred to such fund within time.

(viii) The Company does not have any accumulated losses at the end of the financial year and it has not incurred cash losses in the current financial year and in the immediately preceding financial year.

(ix) The Company is regular in repayment of dues to bank and there is no default in repayment of dues.

(x) In our opinion and according to the information and the explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xi) In our opinion and according to the information and explanation given to us the Company has applied the term loans prima facie for the purpose for which the loans were obtained.

(xii) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

For Mahendra N. Shah & Co. Chartered Accountants Firm's registration number: 105775W

Date : 25th May 2015 Chirag M. Shah Place : Ahmedabad Partner Membership number: F 045706




Mar 31, 2014

We have audited the accompanying financial statements of PBM Polytex Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management Responsibility for the Financial Statements:

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the ompanies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility:

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of hartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the ompany''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion:

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act 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, 2014;

b) in the case of the Statement of Profit and Loss of the Profit for the year ended on that date; and

c) in the case of the ash Flow Statement, of the cash flows for the year ended on that date.

Report on other Legal & Regulatory Requirements:

1. As required by the ompanies (Auditor''s Report) Order, 2003 ("the Order") issued by the entral Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, 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) Subject to sub Note No.9 in part II of Note 27 regarding non availability of Qualified ompany secretary resulting into non compliance of section 215,383(A) and other provisions of the Act in our opinion proper books of account as required by law have been kept by the ompany so far as appears from our examination of those books

c) the Balance Sheet, Statement of Profit and Loss, and ash Flow Statement dealt with by this Report are in agreement with the books of account.

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3) of section 211 of the ompanies Act, 1956;

e) on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the ompanies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the ompany.

ANNEXURE TO AUDITORS'' REPORT Re: PBM POLYTEX LIMITED Refered to in paragraph 3 of our report of even date

(i.) (a) The Company has maintained proper records showing ful particulars including Quantitative details and situation of fixed assets.

(b) The Companies program of physical verification of al its fixed assets over a period of three years is in our opinion, reasonable having regards to the size of the Company and the nature of its fixed assets. As informed, no material discrepancies were noticed on such verification.

(c) In our opinion, the Company has not disposed off substantial part of the Fixed Assets during the year.

(ii.) (a) The inventory has been physicaly verified by the management. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories folowed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

(c) The company is maintaining proper records of inventory and no material discrepancies were noticed on verification of stocks as compared to book records.

(iii.) (a) The Company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act. (b) The company has not taken any loan / deposit from the firms, companies or other parties listed in the register maintained under section 301 of the Act.

(iv,) In our opinion and according to the information and explanations given to us, there is adequate internal control procedure 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 sale of goods. Further on the basis of our examination of the books and records of the Company, caried out in accordance with the generaly accepted auditing practices in India, We have neither come across nor have been informed of any continuing failure to corect major weaknesses in the aforesaid internal control procedures.

(v.) (a) According to the information and the 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 Act, 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, arangements entered in the register maintained under Section 301 of the Act, and exceeding the value of Rs. 5.00 (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.) The Company has not accepted deposits from public and therefore, the directives issued by the Reserve Bank of India and provision of Section 58 - A and 58 - AA of the Companies (Acceptance of Deposits) Rules 1975, do not apply to the Company.

(vii.) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

(viii.) We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under section 209(1) (d) of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records.

(ix.) (a) The company is generaly regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investors Education Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues as 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 / Value Added Tax, Custom Duty, Excise Duty and Cess were in arears, as at 31st March, 2014 for a period of more than six months from the date they became payable.

(x.) The Company does not have accumulated losses as at 31.03.2014. The company has not incured cash losses during the financial year covered by our audit and 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 a financial institution or bank.

(xii.) The Company has not granted any loans and advances on the basis of security by way of pledge of shares and other securities.

(xiii.) In our opinion, the company is not a chit fund or a nidhi, mutual fund / society.

Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(xiv.) The Company has maintained proper records of transactions and contracts in respect of trading in securities and other investments and timely entries have been made therein. Al securities and other investments have been held by the company in its own name.

(xv.) According to the information and explanation given to us and shown by the records examined by us, the company has not given any guarantees for loans taken by others from banks or other financial institutions during the year.

(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 overal 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 any preferential alotment of shares to parties and companies covered in the register maintained under Section 301 of the Act.

(xix.) The company has not issued any debentures.

(xx.) The company has not raised any money by public issue during the year.

(xxi.) During the course of our examination of the books and records of the company caried out in accordance with the generaly accepted auditing practices in India, we have neither come across any instances of fraud on or by the company noticed or reported during the year, nor have we been informed of such case by the management.

For Mahendra N. Shah & Co.

Chartered Accountants

(FRN 105775W)

Place : Ahmedabad Mahendra N. Shah

Date : 24th May 2014 Partner

Membership No. 3969


Mar 31, 2013

1. We have audted the attached balance sheet of PBM POLYTEX LIMITED as at 31st March 2013 and also the statement of proft and loss and the cash flow statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsblity of the Company''s management. Our responsblity s to express an opnon on these fnancial statements based on our audt.

2. We conducted our audt n accordance wth the Audtng Standards generaly accepted n Inda. Those standards requre that we plan and perform the audt to obtan reasonable assurance about whether the fnancial statements are free of materal msstatement. An audt ncludes examnng, on a test bass, evidence supportng the amounts and dsclosures the fnancial statements. An audt also ncludes assessng the accountng prnciples used and sgnfcant estmate made by management, as wel as evaluatng the overal fnancial statement presentaton. We believe that our audt provides a reasonable bass for our opnon.

3. As requred by the Company''s (Audtors'' Report) Order, 2003 ("the Order") as amended by the Companes (Audtor''s Report) (Amendment) Order, 2004 ssued by the Central Government of Inda n terms of Sub-Section (4A) of section 227 of the Act, 1956, (referred to as " the Act") and on the basis of such checks as we consdered necessary and accordng to the nformaton and explanatons given to us, we enclose n the Annexure, a statement on the matters specifed n paragraphs 4 and 5 of the sad order.

4. Further to our comments n the Annexure referred to above, we report that :-

() We have obtaned al the nformaton and explanatons, whch to the best of our knowledge and belief were necessary for the purpose of our audt.

() Subject to Sub note No. 8 n Part II of Note 27 regardng non-avalablity of qualified Company Secretary resulting nto non-compliance of Sections 215, 383(A) and other provisons of the Companes Act, n our opnon, proper books of account as requred by law have been kept by the company so far as appears from our examnaton of those books.

() The Balance Sheet and statement of Proft & Loss and Cash Flow statement dealt wth by ths report are n agreement wth the books of account.

(v) In our opnon, the Balance Sheet statement of Proft & Loss and Cash Flow statement dealt wth by ths report complies wth the Accountng Standards referred to n sub- section (3C) of section 211 of the Act.

(v) Based on the representations made by al the drectors of the Company and accordng to the nformaton and explanatons as made avalable and taken on record by Board of Drectors, We report that none of the Drectors s dsqualified as on 31st March, 2013 from beng apponted as a Drector n terms of clause (g) of secton 274 (1) of the Act.

(vi) In our opnon and to the best of our nformaton and accordng to the explanatons given to us, the sad accounts read together wth Sgnfcant Accountng Policies and other notes thereon give the nformaton requred by the Act, n the manner so requred and give a true and far view, n conformty wth the accountng prnciples generaly accepted n Inda:

(a.) n the case of the Balance Sheet, of the state of affars of the Company as at 31st March, 2013,

(b.) n the case of the statement of Proft & Loss of the Profit of the Company for the year ended on that date and,

(c.) In the case of the Cash Flow statement of the cash flows for the year on that date.

ANNEXURE TO AUDITORS'' REPORT

Re: PBM POLYTEX LIMITED

Referred to n paragraph 3 of our report of even date

(a) The Company has mantaned proper records showng ful partculars ncludng Quanttatve detals and stuaton of fxed assets.

(b) The Companes program of physical verfcaton of al its fxed assets over a perod of three years s n our opnon, reasonable having regards to the sze of the Company and the nature of ts fxed assets. As nformed, no materal dscrepancies were notced on such verfcaton.

(c) In our opnon, the Company has not dsposed off substantal part of the Fxed Assets durng the year.

(a) The nventory has been physcaly verfed by the management. In our opnon, the frequency of verfcaton s reasonable.

(b) The procedures of physcal verfcaton of nventores folowed by the management are reasonable and adequate n relaton to the sze of the Company and nature of ts busness.

(c) The company s mantanng proper records of nventory and no materal dscrepancies were notced on verfcaton of stocks as compared to book records.

(a) The Company has not granted any loans secured or unsecured to companes, frms or other partes covered n the register mantaned under Section 301 of the Act. (b) The company has not taken any loan / depost from the frms, companes or other partes listed n the register mantaned under secton 301 of the Act.

(v,) In our opnon and accordng to the nformaton and explanatons given to us, there s adequate nternal control procedure commensurate wth the sze of the Company and the nature of ts busness wth regard to purchase of Inventory, fxed assets and wth regard to sale of goods. Further on the bass of our examnaton of the books and records of the Company, carred out n accordance wth the generaly accepted audtng practices n Inda, We have nether come across nor have been nformed of any contnung falure to correct major weaknesses n the aforesad nternal control procedures.

(v.) (a) Accordng to the nformaton and the explanatons given to us, we are of the opnon that the transactions that need to be entered nto the register mantaned under section 301 of the Act, have been so entered. (b) In our opnon and accordng to the nformaton and explanatons given to us, the transactions made n pursuance of contracts, arrangements entered n the register mantaned under Section 301 of the Act, and exceedng the value of Rs. 5.00 (Fve) Lacs n respect of any party durng the year have been made at prces whch are reasonable having regard to prevaling market prces at the relevant tme.

(vi.) The Company has not accepted deposts from public and therefore, the drectves ssued by the Reserve Bank of Inda and provison of Section 58 - A and 58 - AA of the Companes (Acceptance of Deposts) Rules 1975, do not apply to the Company.

(vii.) In our opnon, the Company has an nternal audt system commensurate wth ts sze and nature of ts busness.

(vii.) We have broadly reviewed the books of account relatng to materals, labour and other tems of cost mantaned by the Company pursuant to the Rules made by the Central Government for mantenance of cost records under section 209(1) (d) of the Act and we are of the opnon that prma facie the prescrbed accounts and records have been made and mantaned. We have not, however, made a detaled examnaton of the records. (x.) (a) The company s generaly regular n depostng wth approprate authortes undsputed statutory dues ncludng Provident Fund, Investors Educaton Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other materal statutory dues as applicable to t.

(b) Accordng to the nformaton and explanatons given to us, no undsputed amounts payable n respect of Income Tax, Wealth Tax, Sales / Value Added Tax, Custom Duty, Excise Duty and Cess were n arrears, as at 31st March, 2013 for a perod of more than sx months from the date they became payable except Income Tax / penalty demand Rs. 15,00,305/-, Rs. 66,576/- and Rs. 89,936/- for the years 2003-04, 2005-06 and 2006 - 07 respectively, appeal for whch has been preferred before the approprate authortes.

(x.) The Company does not have accumulated losses as at 31.03.2012. The company has not ncurred cash losses durng the fnancial year covered by our audt and the mmedately precedng fnancial year.

(xi.) In our opnon and accordng to the nformaton and explanatons given to us, the Company has not defaulted n repayment of dues to a fnancial instituton or bank.

(xii.) The Company has not granted any loans and advances on the basis of securty by way of pledge of shares and other securtes.

(xii.) In our opnon, the company s not a cht fund or a ndh, mutual fund / society. Therefore, the provisons of clause 4(xii) of the Companes (Audtor''s Report) Order, 2003 are not applicable to the Company.

(xiv.) The Company has mantaned proper records of transactions and contracts n respect of tradng n securtes and other nvestments and tmely entres have been made theren. Al securtes and other nvestments have been held by the company n ts own name.

(xv.) Accordng to the nformaton and explanaton given to us and shown by the records examned by us, the company has not given any guarantees for loans taken by others from banks or other fnancial insttutons durng the year.

(xvi.) In our opnon, the term loans have been applied for the purpose for whch they were rased.

(xvii.) Accordng to the nformaton and explanatons given to us and on overal examnaton of the balance sheet and Cash Flow Statement of the company, we report that no funds rased on short - term bass have been used for long term nvestment.

(xvii.) Accordng to the nformation and explanatons given to us the company has not made any preferental alotment of shares to partes and companes covered n the register mantaned under Secton 301 of the Act.

(xix.) The company has not ssued any debentures.

(xx.) The company has not rased any money by public issue durng the year.

(xxi.) Durng the course of our examnaton of the books and records of the company carred out n accordance wth the generaly accepted audtng practices n Inda, we have nether come across any nstances of fraud on or by the company notced or reported durng the year, nor have we been nformed of such case by the management.

For Mahendra N. Shah & Co.

Chartered Accountants

(FRN 105775W)

Place : Ahmedabad Mahendra N. Shah

Date : 17th May 2013 Partner

Membershp No. 3969


Mar 31, 2012

1. We have audited the attached balance sheet of PBM POLYTEX LIMITED as at 31st March 2012 and also the statement of profit and loss and the 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 estimate 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 Company's (Auditors' Report) Order, 2003 ("the Order") as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of Sub-Section (4A) of section 227 of the Act, 1956, (referred to as " the Act") and on the basis of such checks as we considered necessary and according to the information and explanations given to us, 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 :-

(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) Subject to Sub note No. 9 in Part II of Note 28 regarding non-availability of qualified Company Secretary resulting into non-compliance of Sections 215, 383(A) and other provisions of the Companies Act,

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, and statement of Profit & Loss and Cash Flow statement dealt with by this report are in agreement with the books of account.

(iv) In our opinion, the Balance Sheet statement of Profit & Loss and Cash Flow statement dealt with by this report complies with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act.

(v) Based on the representations made by all the directors of the Company and according to the information and explanations as made available and taken on record by Board of Directors , We report that none of the Directors is disqualified as on 31st March, 2012 from being appointed as a Director in terms of clause (g) of section 274 (1) of the Act.

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Significant Accounting Policies and other notes thereon give the information required by the Act, 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 31st March, 2012, (b.) in the case of the statement of Profit & Loss of the Profit of the Company for the year ended on that date and,

(c.) In the case of the Cash Flow statement of the cash flows for the year on that date.

ANNEXURE TO AUDITORS' REPORT

Re: PBM POLYTEX LIMITED

Referred to in paragraph 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) The Companies program of physical verification of all its fixed assets over a period of three years is in our opinion, reasonable having regards to the size of the Company and the nature of its fixed assets. As informed, no material discrepancies were noticed on such verification.

(c) In our opinion, the Company has not disposed off substantial part of the Fixed Assets during the year.

(ii.) (a) The inventory has been physically verified 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 nature of its business.

(c) The company is maintaining proper records of inventory and no material discrepancies were noticed on verification of stocks as compared to book records.

(iii.) (a) The Company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) The company has not taken any loan / deposit from the firms, companies or other parties listed in the register maintained under section 301 of the Act.

(iv,) In our opinion and according to the information and explanations given to us, there is adequate internal control procedure 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 sale of goods. Further on the basis of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, We have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

(v.) (a) According to the information and the 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 Act, 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, arrangements entered in the register maintained under Section 301 of the Act, and exceeding the value of Rs. 5.00 (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.) The Company has not accepted deposits from public and therefore, the directives issued by the Reserve Bank of India and provision of Section 58 - A and 58 - AA of the Companies (Acceptance of Deposits) Rules 1975, do not apply to the Company.

(vii.) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

(viii.) We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under section 209(1) (d) of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records.

(ix.) (a) The company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investors Education Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues as 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 / Value Added Tax, Custom Duty, Excise Duty and Cess were in arrears , as at 31st March, 2012 for a period of more than six months from the date they became payable except Income Tax demand Rs . 4,61,471/- and Rs . 66,576/- for the years 2003-04 and 2005-06 respectively, appeal for which has been preferred before the appropriate authorities.

(x.) The Company does not have accumulated losses as at 31.03.2012. The company has not incurred cash losses during the financial year covered by our audit and 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 a financial institution or bank.

(xii.) The Company has not granted any loans and advances on the basis of security by way of pledge of shares and other securities.

(xiii.) In our opinion, the company is not a chit fund or a nidhi, mutual fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xiv.) The Company has maintained proper records of transactions and contracts in respect of trading in securities and other investments and timely entries have been made therein. All securities and other investments have been held by the company in its own name.

(xv.) According to the information and explanation given to us and shown by the records examined by us, the company has not given any guarantees for loans taken by others from banks or other financial institutions during the year.

(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 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 any 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 any debentures.

(xx.) The company has not raised any money by public issue 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, we have neither come across any instances of fraud on or by the company noticed or reported during the year, nor have we been informed of such case by the management.

For Mahendra N. Shah & Co.

Chartered Accountants

(FRN 105775W)

Place : Ahmedabad Mahendra N. Shah

Date : 9th August 2012 Partner

Membership No. 3969

 
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