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Auditor Report of Captain Polyplast Ltd.

Mar 31, 2016

Report on Audited Standalone Financial Statements

We have audited the accompanying standalone financial statements of CAPTAIN POLYPLAST LTD. (‘the Company”), which comprise the Balance Sheet as at March 31, 2016 and the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, 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 of these standalone financial statements that give a true and fair view of the financial position and financial performance of the Company 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 the 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered 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 standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone 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 standalone 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 an adequate internal financial controls system over financial reporting in place and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Board of Directors, as well as evaluating the overall presentation of the standalone 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 standalone financial statements read together with the 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, to the extent applicable;

a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2016;

b) In the case of the Statement of Profit and 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 of the Company for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1 As required by the Companies (Auditor’s Report) Order, 2016 (“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, a statement on the matters specified in paragraphs 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 and Statement of Profit and Loss dealt with by this report are in agreement with the books of account, as submitted to us;

d) in our opinion, the aforesaid standalone financial statements comply with the accounting standards specified under Section 133 of the Companies Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, to the extent applicable;

e) On the basis of written representations received from the directors, as on March 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164(2) of the Act;

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure - B and

g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditor’s) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i) There were no pending litigations which would impact the standalone financial position of the Company, except for litigation as referred to in Note 28(i)(d)

ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, and as required on long-term contracts including derivative contracts.

ii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

(Referred to in paragraph 1 of our Report of even date on the Statement of Accounts of CAPTAIN POLYPLAST LIMITED, for the year ended on 31st March, 2016)

i. FIXED ASSETS:

a. In our opinion, the company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to size of the company and nature of its assets. No material discrepancies with respect to book records were noticed on such verification.

c. As explained to us and on the basis of our examination of the books of accounts, the deeds of immovable properties are held in the name of the company.

ii. INVENTORIES:

a. According to the information and explanation given to us, the inventories have been physically verified during the year by the management and in our opinion, the frequency of verification is reasonable.

b. As explained to us, no material discrepancies were noticed on physical verification of inventories as compared to the book records.

iii. LOANS:

According to the information and explanations given to us and on the basis of our examination of the books of account, the company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013, during the year under review. Consequently, the provisions of clause (iii) of the order are not applicable to the company.

iv. LOANS, INVESTMENTS & GUARANTEES:

According to the information and explanations given to us and on the basis of our examination of the books of account, the company has not granted any loans directly or indirectly to any directors or person or entities in which directors are interested and/or has not given any guarantee or provided any security in connection with loan taken by them;

According to the information and explanations given to us and on the basis of our examination of the books of account, the company has complied with the provisions of section 186 in respect of investments made in securities of other body corporate.

v. DEPOSITS:

As explained to us, the company has not accepted any loans or deposits within meaning of Section 73 to 76 of the Companies Act, 2013 read with Rule 2(b) of the Companies (Acceptance of Deposit’s) Rules 2014, during the year under review.

vi. COST RECORDS:

According to the information and explanations provided by the management to us and to the best of our knowledge, the Company is not engaged in production of any such goods or production of any such services for which the Central Government has prescribed particulars relating to utilization of material or labour or other items of cost. Hence the provisions of section 148(1) of the Act do not apply to the Company.

vii. STATUTORY DUES:

a. As per information and explanation available to us, undisputed statutory dues including provident fund, investor education and protection fund, employee’s state insurance, income-tax, sales-tax, wealth tax, service tax, custom duty, excise duty, value added tax, cess and other statutory dues have been generally regularly deposited with the appropriate authorities, applicable to it though there had been some delays in certain cases. Further according to information explanation given to us, No undisputed statutory dues applicable to the company were outstanding as at 31st March, 2016 for a period of more than 6 months from the date they become payable, except for professional tax of Rs. 3.23 lacs

b. According to the information and explanation available to us, there are no dues outstanding on account sales tax, income tax, wealth tax, service tax, custom duty, excise duty, cess on account of dispute, except as follows :

Sr.

No.

Name of the statue

Nature of dues

Amount under dispute Rs. In lacs

Period to which amount relates

Forum where dispute is pending

1

The Income Tax Act, 1961

Penalty proceeding u/s. 271(1)(c)for concealment of Income

6.04

AY 05-06

ITAT

2

The Income Tax Act, 1961

Income Tax (Incl. Int.) Disallowance of Sales Commission Exp

4.76

AY 07-08

CIT(A)-IV Rajkot

3

The Income Tax Act, 1961

Income Tax (Incl. Int)

(i) Disallowance of Sales Commission

(ii) Disallowance Deduction u/s.80IB

17.5

AY 08-09

CIT(A)-IV Rajkot

4

The Income Tax Act, 1961

Income Tax (Incl. Int)

(i) Disallowance of Sales Commission Exp.

(ii) Addition u/s.68 of the Act.

43.93

AY 09-10

ITAT

5

The Income Tax Act, 1961

Income Tax (Incl. Int) (i) Addition u/s.68 of the Act.

38.59

AY 10-11

ITAT

6

The Income Tax Act, 1961

Income Tax (Incl. Int) Disallowance of employee Contribution toPF

0.3

AY 12-13

CIT(A)-IV Rajkot

7

Excise Act, 1944

Central Excise (Duty Amount)

18.4

FY 09-10

First / Second Appellate Tribunal

viii. DUES TO FINANCIAL INSTITUTION, BANKS OR DEBENTURE HOLDER:

Based on our audit procedures and as per information and explanation given to us by the management of the company, we are of the opinion that company has not defaulted in repayment of dues to financial institutions and banks during the year under review.

The company has not issued any debentures.

ix. TERM LOANS & PUBLIC ISSUE:

Based on the audit procedures performed and according to the information, explanations given to us, on an overall basis, the existing as well as new term loans have been applied for the purpose for which they were obtained. The company has not raised any money through a public issue during the year under review.

x. FRAUD:

Based upon the audit procedures performed and as per the information and explanation given by the management, we report that no fraud by the company or any fraud on the company by its officers / employees has been noticed or reported during the course of our audit.

xi. MANAGERIAL REMUNERATION:

As per the information and explanations given to us, the company has complied with the provisions of section 197 of the Companies Act, 2013 regarding managerial remuneration to the extent applicable.

xii. NIDHI COMPANY:

In our opinion, the company is not a nidhi company. Consequently, the provisions of clause (xii) of the order are not applicable to the company.

xiii. RELATED PARTY TRANSACTIONS:

Based upon the audit procedures performed and as per the information and explanation given by the management, all the transactions with the related parties are in compliance with Section 177 and 188 of the Companies Act, 2013 and have been duly disclosed in the financial statements, as required by the applicable accounting standards.

xiv. PREFERENTIAL ALLOMENT / PRIVATE PLACEMENT:

Based on the audit procedures performed and according to the information and explanations given to us, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Consequently, the provisions of clause (xiv) of the order are not applicable to the company.

xv. NON-CASH TRANSACTIONS:

Based on the audit procedures performed and according to the information and explanations given to us, the company has not entered into any non-cash transactions with directors or persons connected with him. Consequently, the provisions of clause (xv) of the order are not applicable to the company.

xvi. REGISTRATION UNDER SECTION 45-IA OF RBI ACT, 1934:

Since the company is not an NBFC, the provisions of clause (xvi) of the order are not applicable to the company.

For, SVK & ASSOCIATES

Chartered Accountants

Firm Reg. No. 118564W

Shilpang V. Karia

Partner

M. No.-102114

Place: Rajkot

Date: 27th May, 2016


Mar 31, 2015

1. We have audited the accompanying standalone financial statements of CAPTAIN POLYPLAST LIMITED., which comprise the Balance Sheet as at 31st March, 2015, I he Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting polices and other explanatory information.

Management's Responsibility for the Financial Statements

2 The Company's Board of Director is responsible for the matters stated in Section 134(5) of the Companies Act. 2013 ("the Act") with respect to the preparations of these standalone financial statements that give a true and fair view of the financial position and financial performance and cash flow of the Company in accordance with the accounting principles generally accepted in India including Accounting Standards referred to in 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, marketing judgments and estimate that are reasonable and prurient and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for insuring the accuracy and completeness of the accounting records, rglevani 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.

Auditors1 Responsibility

3. Our responsibility is to express an opinion on these standalone financial statements based on our audit,

4 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.

5. We have 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 matenal misstatements.

6. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements, The procedures selected depend on the auditors judgment, including the assessment of the risk 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 Companys preparation of the financial statement that give 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 accounting policies used and the reasonableness of the accounting estimates made by the Company's directors, as well as evalulling the Overall presentation Of the financial statements.

7. We befieve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on I he financial statement.

Opinion

8. in our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 31st March, 2015.

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

(c) in the case of the Cash Flow Statement, of the cash flow for the year ended on that date.

Report on Other Legal and Regulatory Requirement

9. As required by the Companies (Auditor's 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 mailers specified in paragraph 3 and 4 of the Order, to the extent applicable.

10. 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 purpose 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 Sheel, the Profit and Loss Statement, and the Cash Flow statement deal with by this Report are in agreement with the books of account.

d) in our opinion, the aforesaid standalone 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 representation received from the directors as on March. 2015. taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the other matters to be included in the Auditor's Report in accordance with the Rule 11 of the Companies (Audit and Auditors) Rule 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 impect or pending litigation on its financial position in its financial statements - Refer Note 27 to the financial statement

(ii) The Company has no material foreseeable losses on long term contract that required provision.

(iii) The Company has no amount that required to be transferred to the Investor Education and Protection Fund.

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

(b) As explained to us, the fixed assets have bean physically verified by the management at toe year end and no material discrepancies were noticed on such verification.

(ii) (a] The inventories have been, physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventory followed by the management ;s reasonable and adequate in relation to tha size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and as explained to us, no material discrepancies were noticed on physical verification of inventory as compared to the books 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 189 of the Companies Acl.

(b) in view of our comment given in Clause (iii)(a) above, the provisions of Clause 3(iii)(b) of the CARO 2015 are not applicable to the Company.

(c) in view of our comment given m Clause (iii)(a) above, the provisions of Clause 3(iii)(c) of the CARO 2015 are not applicable to toe Company.

(iv) tn our opinion and according to the information andi explanations given to us, there exists an adequate internal control system com mens urate with the size of the Company end the nature of Its business, tor purchase of inventory and fixed assets and for the safe of goods and services. During the course of our audit, we have nor observed anv continuing failure to correct major weakness in internal control system

(v) The Company has not accepted any deposits from public during the year. Therefore, the Clause 3 (v) of the CARO 2015 are not applicable to the Company.

(vi) We have been informed by the management that the maintenance of cost records has not been specified by the Centra! Government under section 148(1) of the Companies Ad.

(vii) (a) According to the records, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Income-lax, Sales Tax, Wealth Tax, Service Tax, Duty of Custom, Duly of Excise. Value Added Tax, Cess and any other statutory dues with the appropriate authorities..

(b) There is no undisputed amounts payable in respect of Income-tax, Service Tax, Excise Duty, Custom Duty Provident Fund and any other material statutory dues in arrears as at 31-03-15 for a period of more than six months from the date they became payable,

(c) Details of income-tax and Excise Duty which have nol been deposited as on 31-03-2015 on account of dispute are given below . -

Nature of the Nature of the Forum where the Statute dues dispute is pending

Income-tax Penalty proceed- Income-tax Appellate Act, 1961 lng u/s.27l(1)(c) Tribunal for concealment of Income

Induns-tax Disallowance of CIT(A)-IV Act, 1961 Sales Rajkot Commission Exp.

income-tax (i) Disallowance CIT(A)-IV Act, 1961 of SaLes Rajkot Commission Exp. (ii) Disallowance Deduction u/s. 80UB

Income-tax (1) disallowance income-tax Appellate Act 1961 of Sales Tribunal Commission Exp. (ii) Addition u/s. 68 of the Act

income-tax (i) Disallowance Income-tax Appellate Act, 1961 of Sales Tribunal Commission Exp. (ii) Addition u/s 66 of the Act.

Income-tax (i) Disallowance CIT(A)-IV Act, 1961 of employee Rajkot

Excise Act. Central Excise First/Sacond 1944 Appellate Tribunal

Nature of the Period to Amount Statute which the involved amount Rupees relates

Income-tax A. Y. 2605-06 603793 Act, 1961

Induns-tax A. Y. 2007-113 475670 Act, 1961

income-tax A. Y. 2008-09 1003800 Act, 1961

Income-tax A. Y. 2009-10 4392530 Act 1961

income-tax A, Y 2010-11 3859320 Act, 1961

Income-tax A. Y. 2012-13 30474 Act, 1961

Excise Act. F Y. 2009-10 1640000 1944

(viii) The Company does not have accumulated losses at the end of the financial year The Company has nol incurred cash losses during the year covered by the audit and in the immediately preceding financial year,

(ix) Based on our audit procedures and according to the information and explanations given to us we are of the opinion that the Company has nol defaulted in repayment of dues to financial institutions or banks.

(xj According to the information and explanations given to us, the Company has not given any guarantee or loans taken by others from banks or financial institutions. Therefore, the provisions of Clause 3((x) of the CARO, 2015 are not applicable to the Company.

(xi) Based on our audit procedures and according to the information and explanations given to os. wo are of the opinion that term loans raised have been applied for the purpose for which the loans were obtained

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us. no fraud on or by the Company noticed or reported during the year.

FOR P. GHAN5HYAM & CO, Chartered Accountants Firm Reg. No. 103153W

Sd/-

(G. L Kathrotia) Place : Rajkot Proprietor Date : 30th May, 2015 Memb. No. 32424

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