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Auditor Report of Agio Paper & Industries Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Agio Paper & industries Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the 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 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.

Auditor''s 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 there under.

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 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 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 qualified audit opinion on the financial statements.

Basis for Qualified Opinion

The Paper Factory of the Company has been under shut down since 6th October, 2010 to fulfil certain pollution control measures as enumerated in note no. 2.18.F in the financial statements. As further explained in note no 2.18.G, based on the future plans and valuation of fixed assets, the management of the Company is not envisaging any impairment loss in the fixed assets & Capital Work in Progress of the Company as at the balance sheet date as per the requirements of Accounting Standard AS- 28 on "Impairment of Assets". However in absence of any certainty towards future plans of the Company or a binding sale agreement at arm''s length basis indicating the amount obtainable from sale of fixed assets & Capital Work in progress, we are unable to comment on the quantum of impairment loss on the fixed assets & Capital Work in progress, if any, at the balance sheet date.

The impact of the above on the financial statements therefore could not be determined.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the basis of qualified opinion paragraph, 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.

Emphasis of Matter

We draw attention to the following matter in the Notes to the financial statements:

Note no. 2.18.E & Note No. 2.18.F indicates fact that the net worth of the Company is completely eroded and the production facility at the paper factory is at a halt due to reasons mentioned in the note. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company''s ability to continue as a going concern. However, the financial statements of the Company have been prepared on a going concern basis for the reasons stated in the above notes. The appropriateness of the said basis is interalia dependent on the Company''s ability to infuse requisite funds for meeting its obligations, repayment of term loans and resuming normal operations.

Our opinion is not modified in respect of above matter.

Report on Other Legal and Regulatory Requirements

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. Except for the effects of the matter described in the basis for qualified opinion paragraph, 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. The matter described in the "Basis of Qualified Opinion" paragraph and in the "Emphasis of Matter" paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

f. On the basis of the written representations received from the directors as on 31st March, 2015 and 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.

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 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.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts . The company neither entered into any derivative contract during the year nor have any outstanding derivative contract at the year-end.

iii. The provisions relating to transferring any amounts to the Investor Education and Protection Fund is not applicable to the Company during the year.

For and on behalf of Singhi & Co Chartered Accountants Firm Registration No. 302049E

Gopal Jain Partner Date : 11th April, 2015 Membership No - 059147


Mar 31, 2014

We have audited the accompanying financial statements of Agio Paper & Industries 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''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 referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with general circular 15/ 2013 dated 13th September 2013 by Ministry of Company 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.

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 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 entity''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 is sufficient and appropriate to provide a basis for our qualified audit opinion.

Basis for Qualified Opinion

The Paper Factory of the Company is under shut down since 6th October 2010 to fulfil certain pollution control measures as enumerated in note no. 2.20.F in the financial statements. The power plant and the new paper mill are also kept under capital work in progress due to reasons mentioned in the note.

As further explained in note no 2.20.G, based on the future plans and valuation of fixed assets, the management of the Company is not envisaging any impairment loss in fixed assets of the Company as at the balance sheet date as per the requirements of Accounting Standard AS- 28 on "Impairment of Assets". However in absence of any certainty towards crystallization of future plans of the Company or a binding sale agreement at arm''s length basis indicating the amount obtainable from sale of fixed assets, we are unable to comment on the quantum of impairment loss on the fixed assets , if any, at the balance sheet date.

The impact of the above on the financial statements therefore could not be determined. E mail: ho@agiopaper.co / redressal@agiopaper.com

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the basis of qualified opinion paragraph, 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 loss for the year ended on that date; and

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

Emphasis of Matter

Without qualifying our opinion, we draw our attention to note no. 2.20.E regarding preparation of financial statements of the Company on a going concern basis notwithstanding the fact that its net worth is completely eroded. During the year the Company has incurred net loss of Rs. 576.64 lacs and has also defaulted in repayment of instalments of term loans and interest accrued thereon. The appropriateness of the said basis is interalia dependent on the Company''s ability to infuse requisite funds for meeting its obligations, repayment of term loans and resuming normal operations.

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 account 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 account.

d) Except for the effects of the matter described in the basis for qualified opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 read with general circular 15/2013 dated 13th September 2013 by Ministry of Company Affairs in respect of section 133 of the Companies Act 2013;

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

The Annexure referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements" of the our Report of even date to the members of Agio Paper & Industries Limited on the accounts of the Company for the year ended 31st March, 2014.

i. In respect of fixed assets;

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

b) According to the explanation given to us, due to non- operation of factory during the whole year, physical verification of the fixed assets could not be carried out.

c) According to the explanation given to us, the Company has not disposed off substantial fixed Assets during the year.

ii. In respect of inventories

a) According to the information and explanation given to us, the inventory (excluding stocks with third parties) has been physically verified by the internal auditors during the year. In respect of inventory lying with third parties, these have been substantially confirmed by them. In our opinion, the frequency of verification is reasonable.

b) In our opinion, 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) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

iii. a) According to the information and explanations given to us, 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 Companies Act, 1956. Accordingly clause (iii) (b) to (d) of the Order is not applicable.

e) According to the information and explanations given to us, the Company has taken interest free unsecured loans from one party covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum of loan outstanding during the year and the year-end balance of such loan is Rs. 12,12,00,000/-. The loan is repayable on demand. The other terms & conditions of the loan are not prejudicial to interest of the Company.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. The Company is not in the business of sale of services. During the course of our audit, no major weakness has been noticed in the internal control system.

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 such contracts or arrangements in respect of 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 deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

vii. In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business during the year.

viii. We have broadly reviewed the books of account and records maintained by the Company pursuant to the order made by the Central Government for the maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix. According to the information and explanations given to us in respect of statutory and other dues:

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, except few delays, generally 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, Investor Education and Protection Fund, Income tax, Sales tax, Wealth tax, Service tax and other material statutory dues were in arrears as at 31st March, 2014, for a period of more than six months from the date they become payable except liability towards water cess amounting 29,89,881/- which is outstanding for more than six months.

b) According to the information and explanations given to us and the records of the Company examined by us, the dues of income-tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess as at 31st March, 2014 which have not been deposited on account of any dispute and the forum where the disputes are pending are as under:

Statute Nature of dues Forum where dispute is pending The Income Tax Income tax Hon''ble High Court at Calcutta Act 1961

The Income Tax Income tax Deputy Commissioner (Appeal) Act 1961

The Central Cenvat Claim Central Excise & Service Tax Excise Act 1944 Appellate Tribunal, New Delhi



Statute Amount Period to involved (Rs.) which relates The Income Tax 7,96,364 1996-97 Act 1961

The Income Tax 5,50,000 2007-08 Act 1961

The Central 3,20,192 1991-92 to 1992-93 Excise Act 1944

x. As per the financial statements of the Company, the accumulated losses at the end of the financial year have exceeded fifty percent of its net worth. The Company has incurred cash losses during the current financial year and in the immediate preceding financial year.

xi. Based on our audit procedures and on the basis of information and explanations given by the management, the Company did not have any outstanding debentures or dues to the financial institution during the year. Default in repayment of dues to a bank is given below:

a. Rs. 3,10,00,000/- towards instalments of Term Loan I & II and working capital loan in four equal quarterly instalment since June 2013.

b. Rs. 2,00,00,000/- towards instalments of funded interest term loan payable in sixteen equal monthly instalment since December 2012.

c. Rs. 4,66,74,710 /- towards interest on term loans and working capital loan for the months January 2013 to February 2014.

d. Rs. 1,38,89,072/- towards interest on funded interest term loan payable for the period July 2012 to February 2014. The aforesaid amounts are due to the bank as on 31st March 2014.

xii. According to the information and explanations given to us, no loans or advances has been granted by the Company on the basis of securities by way of pledge of shares, debentures or other securities.

xiii. The Company is not a Chit fund or a Nidhi/Mutual benefit fund/society.

xiv. The Company is not in the business of dealing or trading in shares and securities.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. To the best of our knowledge and belief and according to the information and explanations given to us, term loans have been applied for the purpose for which the loans were obtained.

xvii. According to the information and explanations given to us, and on the basis of overall examination of the cash flow statements, no fund raised on short term basis, prima facie, been used during the year for long term investments.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies act, 1956 during the year.

xix. The Company has not issued any debentures during the period as covered by our audit report.

xx. The Company has not raised monies by way of public issues during the year.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us and so far as appears from our examination of books and records of the Company, we are of the opinion that no fraud on or by the Company was noticed and reported during the year.



For and on behalf of Singhi & Co. Chartered Accountants Firm Registration No. 302049E

(Gopal Jain) Partner Membership No. - 059147 Kolkata, the 30th day of May 2014


Mar 31, 2013

We have audited the accompanying financial statements of Agio Paper & Industries Limited ("the Company”), which comprise the Balance Sheet as at March 31, 2013 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''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 referred to in sub-section (3C) of section 211 of the Companies 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 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. 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 qualified audit opinion.

Basis for Qualified Opinion

The Paper Factory of the company is under shut down since 6th October 2010 to fulfil certain pollution control measures as enumerated in note no. 2.20.F in the financial statements. The power plant and the new paper mill are also kept under capital work in progress due to reasons mentioned in the note.

As further explained in note no 2.20.G, based on the future plans and valuation of fixed assets, the management of the company is not envisaging any impairment loss in fixed assets of the company as at the balance sheet date as per the requirements of Accounting Standard AS- 28 on "Impairment of Assets”. However in absence of any certainty towards crystallization of future plans of the company or a binding sale agreement at arm''s length basis indicating the amount obtainable from sale of fixed assets, we are unable to comment on the quantum of impairment loss on the fixed assets , if any, at the balance sheet date.

The impact on the financial statements therefore could not be determined.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the basis of qualified opinion paragraph, 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, 2013;

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

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

Without qualifying our opinion, we draw our attention to note no. 2.20.E regarding preparation of financial statements of the Company on a going concern basis notwithstanding the fact that its net worth is completely eroded. During the year the Company has incurred net loss of Rs. 812.21 lacs and has also defaulted in repayment of instalments of term loans and interest accrued thereon. The appropriateness of the said basis is interalia dependent on the Company''s ability to infuse requisite funds for meeting its obligations, repayment of term loans and resuming normal operations.

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 account 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 account.

d) Except for the effects of the matter described in the basis for qualified opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the directors as on March 31st, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31st, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

The Annexure referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements” of our Report of even date to the members of Agio Paper & Industries Limited on the accounts of the company for the year ended 31st March, 2013.

i. In respect of fixed assets;

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

b) According to the explanation given to us, due to non- operation of factory during the whole year, physical verification of the fixed assets could not be carried out.

c) According to the explanation given to us, the Company has not disposed off substantial fixed Assets during the year. ii. In respect of inventories

a) As explained to us, inventories could not be verified due to non- operation of factory during the whole year.

b) In view of clause (a) above, reporting under clause (b) is not applicable.

c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. In absence of any physical verification of inventories, discrepancies between physical stock and book stock could not be determined and commented upon.

iii. a) According to the information and explanations given to us, 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 Companies Act, 1956. Accordingly clause (iii) (b) to (d) of the Order is not applicable.

e) According to the information and explanations given to us, the Company has taken interest free unsecured loans from one party covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum of loan outstanding during the year and the year-end balance of such loan is Rs. 10,45,00,000/-. The loan is repayable on demand. The other terms & conditions of the loan are not prejudicial to interest of the Company.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. The company is not in the business of sale of services. During the course of our audit, no major weakness has been noticed in the internal control system.

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 such contracts or arrangements in respect of 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 deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

vii. In our opinion, the internal audit functions carried out during the year by a firm of chartered accountants appointed by the management have been commensurate with the size of the Company and the nature of its business during the year.

viii. We have broadly reviewed the books of account and records maintained by the Company pursuant to the order made by the Central Government for the maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

ix. According to the information and explanations given to us in respect of statutory and other dues:

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, except few delays, generally 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, Investor Education and Protection Fund, Income tax, Sales tax, Wealth tax, Service tax and other material statutory dues were in arrears as at 31st March, 2013, for a period of more than six months from the date they become payable except liability towards water cess amounting 28,69,881/- which is outstanding for more than six months.

x. As per the financial statements of the company, the accumulated losses at the end of the financial year have exceeded fifty percent of its net worth. The Company has incurred cash losses during the current financial year and immediate preceding financial year.

xi. Based on our audit procedures and on the basis of information and explanations given by the management, the Company did not have any outstanding debentures or dues to the financial institution during the year. Default in repayment of dues to a bank is given below:

a. Rs. 50,00,000/- towards instalments of funded interest term loan payable in four equal monthly instalment since December 2012.

b. Rs. 62,40,343/- towards interest on term loans and working capital loan for the month January & February 2013.

c. Rs. 53,15,482/- towards interest on funded interest term loan payable for the period July 2012 to February 2013.

The aforesaid amounts are due to the bank as on 31st March 2013.

xii. According to the information and explanations given to us, no loans or advances has been granted by the company on the basis of securities by way of pledge of shares, debentures or other securities.

xiii. The Company is not a Chit fund or a Nidhi/Mutual benefit fund/society.

xiv. The Company is not in the business of dealing or trading in shares and securities.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

xvi. To the best of our knowledge and belief and according to the information and explanations given to us, term loans have been applied for the purpose for which the loans were obtained.

xvii. According to the information and explanations given to us, and on the basis of overall examination of the cash flow statements, no fund raised on short term basis, prima facie, been used during the year for long term investments.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the companies act, 1956 during the year.

xix. The Company has not issued any debentures during the period as covered by our audit report.

xx. The Company has not raised monies by way of public issues during the year.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us and so far as appears from our examination of books and records of the company, we are of the opinion that no fraud on or by the company was noticed and reported during the year.

For and on behalf of Singhi & Co.

Chartered Accountants

Firm Registration No. 302049E

(Gopal Jain)

Partner

Membership No. - 059147

Kolkata, the 30th day of May 2013


Mar 31, 2012

We have audited the attached Balance Sheet of AGIO PAPER AND INDUSTRIES LIMITED as at 31st March, 2012, the Statement of Profit & Loss for the year ended on that date and also the Cash Flow Statement 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.

We conducted our audit in accordance with 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.

As required by the Companies (Auditor,s Report) Order, 2003 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 Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

1. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

2. 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;

3. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

4. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

5. On the basis of written representations received from the Directors as on 31st March, 2012 and taken on record by the 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 sub-section (1) of section 274 of the Companies Act, 1956;

6. We report that, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the significant Accounting Policies and Notes on Account give the information required by the Companies Act, 1956 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 and Loss, of the loss for the year ended on that date; and

(c) In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

For Singhi & Co Chartered Accountants

Firm Registration No. 302049E

S. K. Kothari 1-B, Old Post

Office Street, Kolkata Partner

Date : 30th May, 2012 Membership No - 54157

Annexure to the Auditors, Report

(Referred to in Paragraph 3 of our report of even date)

i. (a) In our opinion, the company has maintained records showing full particulars, including quantitative details and their situation of its fixed assets.

(b) As per the information and explanations given to us, due to suspension of operations during the whole year, physical verification of fixed assets could not be carried out.

(c) There was no substantial disposal of fixed assets during the year.

ii. (a) According to the explanation given to us, the inventories have been physically verified at reasonable intervals during the year by the management except materials lying with third parties, where confirmations are obtained.

(b) In our opinion, the procedure of physical verification of inventories followed by the management is 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 inventories. The discrepancies between the physical stock and book stock, if any, have been properly dealt with in the books of account.

iii. (a) As per the information furnished, the Company has not granted any loans secured or unsecured to Companies, firms or other parties covered in the Register maintained u/s 301 of the Companies Act, 1956. Hence, clauses 4 (iii) (b), (c) and (d) of the order are also not applicable to the company.

(b) As per the information and explanations given to us, during the year the company has taken interest free unsecured loans aggregating Rs. 1302.00 lacs from two parties covered in the register maintained u/s 301 of the Companies Act, 1956. The maximum amount outstanding during the year from these parties and the year-end balance of loan taken from one party was Rs. 1302.00 lacs and Rs. 699.50 lacs respectively.

(c) In our opinion the terms and conditions of above loans are prima-facie, not prejudicial to the interest of the company.

(d) The aforesaid loans are repayable on demand and there is no repayment schedule. During the year the company has not paid any amount as interest to the parties covered in register maintained under section 301 of the Act.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books of accounts and according to the information and explanation given to us, we have not come across any instances of major weaknesses in the aforesaid internal control system.

v. (a) In our opinion and according to the information and explanations given to us, we are of the opinion that the contracts or arrangements that need to be entered in the register maintained u/s. 301 of the Companies Act, 1956 have been entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contract or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 have been made at prices which reasonable having regard to the prevailing market price at the relevant time.

vi. The Company has not accepted any fixed deposit from the public within the meaning of the provisions of Section 58A and 58AA of the Companies Act, 1956 and rules made there under.

vii. In our opinion, the Company does not have internal audit system commensurate with the size and nature of its business. Internal audit was not conducted during the current year.

viii. We have broadly reviewed the books of accounts maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under clause (d) of sub section (1) of Section 209 of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees, State Insurance, Income-tax, Sales-tax, Service Tax, Excise Duty, Cess, Wealth Tax and any other statutory dues during the year with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of above statutory dues were in arrears, as at 31st March, 2012 for a period of more than six months from the date they became payable except liability towards Water Cess amounting to Rs. 26.29 lacs are outstanding for more than six months.

(c) According to the information and explanation given to us, the following statutory dues have not been deposited on account of matters pending before appropriate authorities:

Sl Name of the Statute Nature of Dues Amount Period to which Forum where dispute is pending (Rs. in Lacs) the amount relates

1 Income Tax Act, 1961 Income Tax 7.96 1996 - 1997 Kolkata High Court

2 Income Tax Act, 1961 Income Tax 6.23 2007 - 2008 Deputy Commissioner

3 Central Excise Act, 1944 Cenvat Claim 3.81 1993 - 2005 Central Excise Authorities

4 Employees Provident Fund Provident Fund 2.64 1990 - 1991 to Provident Fund & Misc. Provisions Act, 1952 2000 - 2001 & Appellate Tribunal

2003 - 2004 5 Central Sales Tax Act, 1956 Sales Tax 0.37 2002-03 & Sales Tax Appellate 2003-04

x. As per books of accounts, the Company,s accumulated losses at the end of the financial year have exceeded fifty present of its net worth. The Company has incurred cash losses in the current year and in immediately preceding financial year.

xi. Based on our audit procedures and on the basis of information and explanations given to us by the management, the Company has not delayed in repayment of dues to the banks.

xii. According to the information and explanations 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/ mutual benefit/ society and therefore, the provisions of clause 4 (xiii) of the order are not applicable.

xiv. According to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments and therefore, the provisions of clause 4 (xvi) of the order are not applicable.

xv. As per the information and explanation given to us, the company has not given any guarantee for loans taken by others from Bank or financial institutions.

xvi. Based on the information and explanations given to us by the management, term loans were applied for the purpose for which these were obtained.

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 no funds raised on short term basis have been used for long term investment during the year on overall basis.

xviii. According to the information and explanations given to us, the company has not made any preferential allotment during the year, to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

xix. The company did not issue debentures during the year.

xx. The Company has not raised any monies by public issue during the year.

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

For Singhi & Co Chartered Accountants

Firm Registration No. 302049E

S. K. Kothari 1-B, Old Post

Office Street, Kolkata Partner

Date : 30th May, 2012 Membership No - 54157


Mar 31, 2011

We have audited the attached Balance Sheet of AGIO PAPER AND INDUSTRIES LIMITED as at 31st March, 2011, the Profit & Loss Account for the year ended on that date and also the Cash Flow Statement 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.

We conducted our audit in accordance with 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.

As required by the Companies (Auditor's Report) Order, 2003 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 Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

1. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

2. 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;

3. The Balance Sheet. Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

4 In our opinion, the Balance Sheet. Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

5. On the basis of written representations received from the Directors as on 31st March, 2011 and taken on record by the 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 sub-section (1) of section 274 of the Companies Act, 1956:

6. We report that, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the significant Accounting Policies and Notes on Account in Schedule "19" give the information required by the Companies Act. 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

(a i 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 loss for the year ended on that date; and

(c) In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT (Referred to in Paragraph 3 of our report of even date)

i. a) In our opinion, the Company has maintained records showing full particulars, including quantitative details and their situation of its fixed assets. However the fixed assets register is under updation.

b) As per the information and explanations given to us, physical verification of fixed assets has been carried out in terms of the phased program of verification of its fixed assets adopted by the company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable having regard to the size of the company and nature of its business.

c) There was no substantial disposal of fixed assets during the year.

ii. a) According to the explanation given to us, the inventories have been physically verified at reasonable intervals during the year by the management except materials lying with third parties, where confirmations are obtained.

b) In our opinion, the procedure of physical verification of inventories followed by the management is 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 inventories. The discrepancies between the physical stocks and book stocks, if any, have been properly dealt with in the books of account.

iii. a) As per the information furnished, the Company has not granted any loans secured or unsecured to Companies, firms or other parties covered in the Register maintained u/s 301 of the Companies Act, 1956. Hence, clauses 4 (iii) (b), (c) and (d) of the order are also not applicable to the company.

b) As per the information and explanations given to us, the company has taken interest free unsecured loans aggregating Rs. 711.60 lacs from one party covered in the register maintained u/s 301 of the Companies Act. 1956. The maximum amount outstanding during the year from three such parties and the year-end balance of loans taken from one party was Rs. 2195.70 lacs and Rs. 390.00 lacs respectively.

c) In our opinion the terms and conditions of above loans are prima-facie, not prejudicial to the interest of the company.

d) The aforesaid loans are repayable on demand and there is no repayment schedule. During the year the company has not paid any amount as interest to the parties covered in register maintained under section 301 of the Act.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books of accounts and according to the information and explanation given to us, we have not come across any instances of major weaknesses in the aforesaid internal control system.

v. a) In our opinion and according to the information and explanations given to us. we are of the opinion that the contracts or arrangements that need to be entered in the register maintained u/s 301 of the Companies Act. 1956 have been entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contract or arrangements entered in the register maintained u/s 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market price at the relevant time.

vi. The Company has not accepted any fixed deposit from the public within the meaning of the provisions of Section 58A and 58AA of the Companies Act, 1956 and rules made there under

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

viii. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under clause (d) of sub section (1) of Section 209 of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix. a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income-tax, Sales- tax, Wealth Tax, Service Tax, Custom Duty Excise Duty. Cess and any other statutory dues during the year with the appropriate authorities.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of above statutory dues were in arrears, as at 31st March. 2011 for a period of more than six months from the date they became payable except liability towards Water Cess amounting to Rs. 22.90 lacs are outstanding for more than six months.

(c) According to the information and explanation given to us, the following statutory dues have not been deposited on account of matters pending before appropriate authorities:

SI Name of the Statute Nature of Dues Amount Period to which Forum where dispute is pending (Rs. in Lacs) the amount relates

1 Income Tax Act, 1961 Income Tax 7.96 1996-1997 Kolkata High Court

2 Income Tax Act, 1961 Income Tax 6.23 2007-2008 Deputy Commissioner

3 Central Excise Act, 1944 Cenvat Claim 16.09 1993-2005 Central Excise Authorities

x. As per books of accounts, the Company's accumulated losses at the end of the financial year have not exceeded fifty percent of its networth. The Company has incurred cash losses in the current year and immediately preceding financial year.

xi. Based on our audit procedures and on the basis of information and explanations given to us by the management, the Company has delayed in repayment of dues of Rs. 225 lacs to a Bank. The period of delay being 5 days to 90 days.

xii. According to the information and explanations 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/ mutual benefit/ society and therefore, the provisions of clause 4 (xili) of the order are not applicable.

xiv. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments and therefore, the provisions of clause 4 (xvi) of the order are not applicable.

xv. As per the information and explanation given to us. the Company has not given any guarantee for loans taken by others from Bank or financial institutions.

xvi. Based on the information and explanations given to us by the management, term loans were applied for the purpose for which these were obtained.

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 no funds raised on short term basis have been used for long term investment during the year on overall basis.

xviii. According to the information and explanations given to us, the Company has made preferential allotment of 55,00,000 shares of Rs. 10/- each at a premium of Rs. 2/-per share during the year, to parties and companies covered in the Register maintained u/s 301 of the Companies Act, 1956.

In our opinion the terms and conditions of above allotment are pnma-facie, not prejudicial to the interest of the company.

xix. The Company did not issue debentures during the year.

xx. The Company has not raised any monies by public issue during the year.

xxi. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For Singhi & Co

Chartered Accountants Firm Registration No. 302049E

L.N.Dey 1-B, Old Post Office Street. Kolkata Partner

Date : 30th May. 2011 Membership No - 03569


Mar 31, 2010

We have audited the attached Balance Sheet of AGIO PAPER AND INDUSTRIES LIMITED as at 31st March, 2010, the Profit & Loss Account for the year ended on that date and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with 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.

As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1S56, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

1. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

2. 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;

3. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

4. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956, subject to non compliance of Accounting Standard 16 on (Borrowing Costs).

5. On the basis of the written representations received from the Directors as on 31 st March, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

6. Without qualifying our opinion, we draw attention to Note No. 16 (a) in Schedule "19" regarding carry forward of Minimum Alternate Tax (MAT) Credit Entitlement of Rs.59.06 lacs recognized upto 31st March 2009, based on the future normal taxable income projected by the Company.

7. Further, attention is invited to:

i) Note No. 6 in Schedule "19" regarding non-provision of arrear depreciation of Rs. 357.39 lacs for earlier years.

ii) Capitalization of Interest on term loan of Rs. 174.58 lacs towards power plant which is not in accordance with the requirements of Accounting StandardAS-16 on "Borrowing Cost".

Had the observations made by us in paragraph 7 above been considered the loss for the year would have been Rs. 861.74 lacs against the reported loss figure of Rs. 329.77 lacs: debit balance in Profit and Loss Account would have been Rs.953.28 lacs as against reported loss figure of Rs. 421.31 and Net Fixed Assets would have Rs. 4047.31 lacs as against the reported figure of Rs. 4579.28 lacs.

8. We report that, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the significant Accounting Policies and Notes on Account in Schedule "19" subject to para 7 above give the information required by the Companies Act, 1956 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, 2010;

(b) In the case of the Profit and Loss Account, of the loss for the year ended on that date; and

(c) In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT (Referred to in Paragraph 3 of our report of even date)

i. (a) In our opinion, the company has maintained records showing full particulars, including quantitative details and their situation of its fixed assets, however the fixed assets register is .under updation,

(b) As per the information and explanations given to us, physical verification of fixed assets has been carried out in terms of the phased program of verification of its fixed assets adopted by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable having regard to size of the Company and nature of its business.

(c) There was no substantial disposal of fixed assets during the year.

ii. (a) According to the explanation given to us, the inventories have been physically verified at reasonable intervals during the year by the management except materials lying with third parties, where confirmations are obtained.

(b) In our opinion, the procedure of physical verification of inventories followed by the management is 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 inventories. The discrepancies between the physical stocks and book stocks, which are not significant, have been properly dealt with in the books of account.

iii. (a) As per the information furnished, the Company has not granted any loans secured or unsecured to Companies, firms or other parties covered in the Register maintained u/s 301 of the Companies Act, 1956. Hence, clauses 4 (iii) (b), (c) and (d) of the order are not applicable to the company.

(b) As per the information and explanations given to us, the company has taken interest free unsecured loans aggregating Rs. 950.92 lacs from four partes during the year covered in the register maintained u/s 301 of the Companies Act, 1956. The maximum amount outstanding during the year and the year-end balance of loans taken from such parties was Rs. 2073.08 lacs and Rs. 1856.34 lacs respectively.

(c) In our opinion the terms and conditions of above loans are not prima-facie, prejudicial to the interest of the company.

(d) The aforesaid loans are repayable on demand and there is no repayment schedule. During the year the company has not paid any amount as interest to the parties covered in register maintained under section 301 of the Act.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books of accounts and according to the information and explanation given to us, we have not come across any instances of major weaknesses in the aforesaid internal control system.

v. (a) In our opinion and according to the information and explanations given to us, we are of the opinion that the contracts or arrangements that need to be entered in the register maintained u/s. 301 of the Companies Act, 1956 have been entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contract or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 have been made at prices which reasonable having regard to the prevailing market price at the relevant time.

vi. The Company has not accepted any fixed deposit from the public within the meaning of the provisions of Section 58A and 58AA of the Companies Act, 1956 and rules made there under.

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

viii. We have broadly reviewed the books of accounts maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under clause (d) of sub section (1) of Section 209 of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Sales- tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues during the year with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of above statutory dues were in arrears, as at 31 st March, 2010 for a period of more than six months from the date they became payable except liability towards Water Cess amounting to Rs. 20.30 lacs are outstanding for more than six months.

(c) According to the information and explanation given to us, the following statutory dues have not been deposited on account of matters pending before appropriate authorities:

Sl Name of the Statute Nature of Dues Amount Period to which (Rs/ Lacs) the amount relates

1 Income Tax Act, 1961 Income Tax 7.96 1996-97

Income Tax 7.17 2007-08

2 Sales Tax Act Pending Declaration 5.94 1999-2000 Forms & other matters to 2004 -05

3 Central Excise Act, 1944 Cenvat Claim 16.45 Financial Year 1993 to 2005

Name of the Statute Forum where dispute is pending

Income Tax Act, 1961 Kolkata High Court

Deputy Commissioner

Sales Tax Act Assistant Commissioner - Chattisgarh Commercial Tax & AC-Safes Tax(Appeal), Nagpur

Central Excise Act, 1944 Central Excise Authorities

x. Considering our observations as stated in para 7 of our audit report, the Companys accumulated losses at the end of the financial year have exceeded fifty percent of its networth.

However, as per books of accounts, the Companys accumulated losses at the end of the financial year have not exceeded fifty present of its networth and the Company has incurred cash losses in the current year but has not incurred cash losses in the immediately preceding financial year.

xi. Based on our audit procedures and on the basis of information and explanations given to us by the management during the year, the Company has delayed in repayment of quarterly installments of Rs. 225 lacs to bank. The period of delays were ranging from 27 days to 41 days.

xii. According to the information and explanations given to us, the Company has not granted loans and advances on the basts of security by way of pledge of shares, debentures and other securities.

xiii. In our opinion, the Company is not a chit fund/ mutual benefit/ society and therefore, the provisions of clause 4 (xiii) of the order are not applicable.

xiv. According to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments and therefore, the provisions of clause 4 (xvi) of the order are not applicable.

xv. As per the information and explanation given to us, the company has not given any guarantee for loans taken by others from Bank or financial institutions.

xvi. Based on the information and explanations given to us by the management, term loans were applied for the purpose for which these were obtained.

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 no funds raised on short term basis have been used for long term investment during the year on overall basis.

xviii. According to the information and explanations given to us, the company has not made any preferential allotment of shares during the year to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

xix. The company has not issued debentures during the year.

xx. The Company has not raised any monies by public issue during the year.

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

For Singhi & Co

Chartered Accountants

Firm Registration No. 302049E

L.N. Dey

1-B, Old Post Office Street, Kolkata Partner

Date : 14th August, 2010 Membership No - 03569

 
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