1.  We have audited the attached balance sheet of PBM POLYTEX LIMITED
 as at 31st March 2011 and also the profit and loss account 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 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 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 Note No. 10 in Part II of Schedule XX 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, Profit & 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 & Loss account 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, 2011 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, 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 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 programme 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, 2011 for a period of more than six months from the
 date they became payable except Income Tax Demand of Rs.4, 78,152/- for
 Accounting Year 2004-05 and 2005-06 against which the company has
 preferred appeals.
 
 (x.) The Company does not have accumulated losses as at 31.03.2011. 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, hence question of
 creating security does not arise.
 
 (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 : 25th July 2011                                        Partner
                                                  Membership No. 3969