Management's 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 notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. 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.

Auditor's 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 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 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 Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate In the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. 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 are 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 31st March 2015;

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 Cash Flow Statement, of the cash flow for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2003 ('the Order'), as amended, issued by the Central 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. 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 those books;

c. the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of accounts;

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 read with General Circular 15 /2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act 2013.

e. On the basis of written representations received from the directors as on 31st March 2015, and taken on record by the Board of Directors, none of the directors are disqualified as on 31st March 2014 from being appointed as a director in terms of clause (g) of subsection (1) of section 274 of the Companies Act, 1956.

The Annexure referred to in our report to the members of Gagan Polycot India Limited ('the Company') for the year ended 31 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) All the assets have not been physically verified by the management during the year but there is a regular program of verification which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) The Company has not disposed off any substantial part of Fixed Assets during the year, so as to affect its going concern.

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

(b) The procedure of physical verification of inventory followed by the managements are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii) (a) The company has taken loan from four parties covered in the register maintain Under Section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs.9572713/- and the year-end balance of loan taken from such parties was Rs. 126381889/-.

(b) In our opinion, and according to the information and explanations given to us, the terms and conditions of the aforesaid loans are prima facie not prejudicial to the interest of the Company.

(c) There is no stipulation as regards payment of principal amounts and hence nothing is reportable under this clause.

(d) The company has not given loan to any party covered in the register maintain Under Section 301 of the Companies Act, 1956. Accordingly, paragraphs 4(iii)(e) to 4(iii)(f) of the Order are not applicable

iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (v)(a) above and exceeding the value of Rs 5 lakhs with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The company has not accepted any deposit during the year from the public and provisions of section 58-A and 58- AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 are not applicable. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vii) The company does not have formal internal audit system. Internal audit is carried out by in house staff. In our opinion, there is scope for further improvement in the internal audit system.

viii) As explained to us, the Central Government has not prescribed maintenance or cost records under Section 209 (i) (d) of the Companies Act, 1956, for the products of the company.

ix) (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, Investor Education and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities . As explained to us, the Company did not have any dues on account of Employees' State Insurance, Customs Duty and Excise Duty .

x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in 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, bank or debenture holders.

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

xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

xv) According to information and explanation given to us the company has not given any guarantee for loans taken by others from bank or financial institutions hence the provisions of terms and conditions prejudicial to the interest of the company are not applicable to the Company.

xvi) In our opinion, the company has not raised any term loan during the year under consideration.

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 no funds raised on short-term basis have been used for long-term investment. No long term funds have been used to finance short term assets except permanent Working Capital.

xviii) According to information and explanation given to us, the company has made preferential allotment of shares to parties and Companies covered in the registered maintain under section 301 of the Act. In our opinion, the price at which shares have been issued is not prejudicial to the interest of the company.

xix) According to information and explanation given to us the company has not issued debentures hence question of creation of securities does not arise.

xx) According to information and explanation given to us the company has not raised money by way of public issues hence the question of disclosure of end use of money raised by public issues does not arise.

xxi) According to information and explanation given to us no fraud on or by the company has been noticed or reported during the year.

For SSRV And Associates. Chartered Accountants Firm Registration No. 135901W

Sd/- Satyendra Sahu Partner Membership No. 126823

Place : Vasai Date : 30th May, 2015.