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
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
(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
(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
(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
(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
(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
(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
(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
(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
(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.
Place : Ahmedabad Mahendra N. Shah
Date : 25th July 2011 Partner
Membership No. 3969