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Auditor Report of Essel Propack Ltd.

Mar 31, 2013

1. We have audited the accompanying financial statements of Essel Propack Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2013, 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

2. 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 Section 211(3C) 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.

Auditor''s Responsibility

3. 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 misstatements.

4. 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.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements 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:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2013;

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

Report on Other Legal and Regulatory Requirements

7. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

8. 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) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act; and

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

Annexure referred to in Paragraph 7 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date

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

(b) The fixed assets have been physically verified by the management during the year as per the phased program designed to cover all the fixed assets over a period, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. Discrepancies noticed on such verification, which are not material, have been properly dealt with in the books of accounts.

(c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

(ii) (a) As explained to us, the inventories have been physically verified by the management during the year except stocks lying with third parties in respect of whom confirmations have been obtained. In our opinion, the frequency of such verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) As explained to us, the Company is maintaining proper records of inventories and discrepancies noticed on physical verification of inventories as compared to the book records, which are not material, have been properly dealt with in the books of account.

(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 Act.

(b) According to the information and explanations given to us, the Company has taken unsecured loan from a Company covered in the register maintained under Section 301 of the Act. The maximum amount involved during the year is Rs. 50,000,000 and there is no amount outstanding at the year-end.

(c) The rate of interest and other terms and conditions of such loan taken are prima-facie not prejudicial to the interests of the Company.

(d) The Company is regular in repayment of the loan taken and interest thereon, considering the terms of the loan.

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

(v) In respect of the contracts or arrangements referred to in Section 301 of the Act:

(a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Act have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts / arrangements entered in the Register maintained under Section 301 of the Act and exceeding the value of Rs.5,00,000 in respect of each party during the year have been made at prices which appear reasonable as per information available with the Company.

(vi) The Company has not accepted any deposits from the public during the year.

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

(viii) We have broadly reviewed the cost accounting records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209 (1) (d) of the Act and are of the opinion that prima facie the prescribed records have been maintained. However, we are neither required to carry out nor have carried out detailed examination of such cost accounting records with a view to determine whether they are accurate or complete.

(ix) According to the records of the Company, examined by us and information and explanations given to us:

(a) Undisputed Statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax / value added tax, wealth tax, service tax, custom duty, excise duty, cess and others as applicable have generally been deposited regularly with the appropriate authorities except delay in few cases. There are no undisputed amounts payable in respect of aforesaid dues outstanding as at 31 March 2013 for a period of more than six months from the date they became payable.

(b) The disputed dues of sales tax/value added tax, service tax, excise duty, income tax and cess which have not been deposited are as under:

Name of the Nature of Amount in (Rs. Statute the Dues

Central Excise duty 122,597,968 Excise Act, 1944 45,994,625

6,192,818

Service tax 148,537

1,332,054

1,063,126

Maharashtra Value 36,134,596 Value Added added tax Tax Act, 2002

Central Sales Central 731,067 Tax Act, 1956 sales tax

22,808,521

52,286,468

12,390,394

4,107,905

Bombay Cess 3,879,750 Provincial Municipal Corporation Act, 1959

Income Tax Income 10,667,022 Act, 1961 tax-Penalty

Name of the Statue Period to which the amount relate Forum where dispute is pending

Central Excise Act, 1944 FY 1993-1994 to FY 2000-2001 Supreme Court

FY 1997-1998 to FY 2000-2001 and FY Tribunal CESTAT 2002-2003 to FY 2005-2006

FY 2000-2001 to FY 2003-2004 and FY Commissioner of Central Excise 2005-2006 to FY 2007-2008 (Appeals)

FY 2005-2006 Bombay High Court

FY 2005-2006 to FY 2007-2008 Tribunal CESTAT

FY 2006-2007 to FY 2009-10 Deputy / Assistant Commissioner of Service Tax

Maharashtra Valaue Added Tax Act, 2002 FY 2005-2006 Deputy Commissioner of Sales Tax (Appeals)

Central Sales Tax Act, 1956 FY 2002-2003 Maharashtra Sales Tax Tribunal

FY 2002-2003 to FY 2004-2005 Commissioner of VAT-Dadra and Nagar Haveli

FY 2002-2003, FY 2005-2006 and FY 2008- Deputy Commissioner of Sales 2009 Tax (Appeals)

FY 2001-2002, FY 2003-2004 and FY 2004- Joint Commissioner of Sales Tax 2005 (Appeals)

FY 2006-2007 and FY 2007-2008 Assistant Commissioner of Commercial Taxes

Bombay Provincial Municipal Corporation Act, 1959 FY 2002-2003 to FY 2007-2008 Bombay High Court

Income Tax Act, 1961 FY 2006-2007 Commissioner of Income Tax (Appeals)

(x) The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses during the current financial year or in the immediately preceding financial year.

(xi) According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to banks and financial institutionss. The Company has not issued any debentures during the year.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi / mutual benefit fund / society.

(xiv) The Company is not dealing or trading in securities, debentures and other investments.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by subsidiaries from banks are prima facie not prejudicial to the interests of the Company.

(xvi) In our opinion and according to the information and explanations given to us, the term loans raised during the year have been applied for the purposes for which they were raised.

(xvii) According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company and related information as made available to us, we report that short-term funds have not been used for long-term investments.

(xviii) The Company has not made any preferential allotment of shares to companies or parties covered in the register maintained under Section 301 of the Act.

(xix) The Company has not issued any secured debentures during the year.

(xx) The Company has not raised any money by way of public issue during the year.

(xxi) Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year.

For MGB & Co.

Chartered Accountants

Firm Registration Number 101169W

Hitendra Bhandari

Partner

Membership Number 107832

Mumbai, 29 May 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of Essel Propack Limited ("the Company") as at 31 March 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 ("the Act"), and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we annex hereto a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Without qualifying our report, attention is invited to Note 30, regarding Merger of Ras Propack Lamipack Limited and Ras Extrusions Limited with the Company, given effect in these financial statements.

5. Further to our comments in the Annexure referred to Paragraph (3) above, we report that:

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

(ii) 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. Ras Propack Lamipack Limited and Ras Extrusions Limited have merged with the Company as per summary record of proceedings issued on 28 August 2012 w.e.f. 1 April 2011. Pursuant to the Scheme, the merged companies are deemed to be branches and are audited by other firm of Chartered Accountants and their reports have been considered by us in our Audit report;

(iii) 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;

(iv) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow statement dealt with by this report comply with the accounting standards referred to in Section 211 (3C) of the Act;

(v) On the basis of written representations received from the Directors and taken on record by the Board, we report that none of the directors is disqualified as at 31 March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read 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:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2012;

(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.

Annexure referred to in paragraph 3 of Auditors' Report to the Members of Essel Propack Limited on the accounts for the year ended 31 March 2012.

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

(b) The fixed assets have been physically verified by the management during the year as per the phased program designed to cover all the fixed assets over a period, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) During the year, there was no disposal of substantial part of fixed assets.

(ii) (a) As explained to us, the inventories have been physically verified by the management during the year except stocks lying with third parties in respect of whom confirmations have been obtained. In our opinion, the frequency of such verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) As explained to us, the Company is maintaining proper records of inventories and no material discrepancies were noticed on physical verification of inventories as compared to the book records.

(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 Act.

(b) According to the information and explanations given to us, the Company has taken unsecured loan from a company covered in the register maintained under Section 301 of the Act. The maximum amount involved during the year is Rs. 100,000,000 and there is no amount outstanding at the year-end.

(c) The rate of interest and other terms and conditions of such loan taken are prima-facie not prejudicial to the interests of the Company.

(d) The Company is regular in repayment of the loan taken and interest thereon, considering the terms of the loan.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control systems in respect of the aforesaid areas.

(v) According to the information and explanations given to us, there are no contracts or arrangements, the particulars of which are required to be entered into the register in pursuance to Section 301 of the Act.

(vi) The Company has not accepted any deposits from the public during the year.

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

(viii) We have broadly reviewed the cost accounting records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209 (1) (d) of the Act and are of the opinion that prima facie the prescribed records have been maintained. However, we are neither required to carry out nor have carried out detailed examination of such cost accounting records with a view to determine whether they are accurate or complete.

(ix) According to the records of the Company, examined by us and information and explanations given to us:

(a) Undisputed Statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax / value added tax, wealth tax, service tax, custom duty, excise duty, cess and others as applicable have generally been deposited regularly with the appropriate authorities except delay in few cases. There are no undisputed amounts payable in respect of aforesaid dues which have remained outstanding as at 31 March 2012 for a period of more than six months from the date they became payable.

(b) The disputed dues of sales tax/value added tax, service tax, excise duty, income tax and cess which have not been deposited are as under:

Name of the Nature of Amount in Period to which the amount relate Statute the Dues (Rs.)

Central Excise 122,597,968 FY 1993-1994 to FY 2000-2001 Excise Act, duty 45,994,625 FY 1997-1998 to FY 2000-2001 and FY 1944

2002-2003 to FY 2005-2006

6,192,818 FY 2000-2001 to FY 2003-2004 and FY 2005-2006 to FY 2007-2008

93,140,021 FY 1997-1998 and FY 2000-2001 to 2005-2006

5,975,169 FY 1995-1996 to FY 1997-1998, FY 2002-2003, FY 2005-2006 to FY 2006- 2007 and FY 2009-2010 to FY 2010-2011

Service tax 3,213,513 FY 1997-1998 and FY 2005-2006

1,577,696 FY 2004-2005 to FY 2007-2008

2,130,161 FY 2002-2003 and FY 2004-2005 to FY 2009-2010

Maharashtra Value 36,134,596 FY 2005-2006 Value Added added tax Tax Act, 2002

Central Central 1,730,274 FY 2001-2002 and FY 2002-2003 Sales Tax sales tax

22,808,521 FY 2002-2003 to FY 2004-2005 Act, 1956

49,666,275 FY 2002-2003 and FY 2005-2006

13,024,068 FY 2001-2002, FY 2003-2004 and FY 2004-2005

5,543,653 FY 2005-2006 to FY 2007-2008

Bombay Cess 4,298,445 FY 2002-2003 to FY 2007-2008 Provincial Municipal Corporation Act, 1959

Income Tax Income 11,974,477 FY 2007-2008 Act, 1961 tax



Name of the Statue Forum where dispute is pending

Central Excise Act, 1944 Supreme Court

Tribunal CESTAT

Commissioner of Central Excise (Appeals)

Commissioner of Central Excise

Deputy / Joint / Assistant Commissioner of Central Excise

Bombay High Court

Tribunal CESTAT

Deputy / Assistant Commissioner of Service Tax

Maharashtra Value Added Tax Act, 2002 Deputy Commissioner of Sales Tax (Appeals)

Central Sales Tax Act, 1956 Maharashtra Sales Tax Tribunal Commissioner of VAT-Dadra and Nagar Haveli

Deputy Commissioner of Sales Tax (Appeals)

Joint Commissioner of Sales Tax (Appeals)

Assistant Commissioner of Commercial Taxes

Bombay Provincial Municipal Corporation Act, 1959 Bombay High Court

Income Tax Act, 1961 Commissioner of Income Tax (Appeals)

(x) The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses during the current financial year or in the immediately preceding financial year.

(xi) According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to banks and financial institutions during the year. The Company has not issued any debentures during the year.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi / mutual benefit fund / society.

(xiv) The Company is not dealing or trading in securities, debentures and other investments.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the company has given guarantees for loans taken by subsidiaries from banks are prima facie not prejudicial to the interests of the Company.

(xvi) In our opinion and according to the information and explanations given to us, the term loans raised during the year have been applied for the purposes for which they were raised.

(xvii) According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company and related information as made available to us, we report that funds raised on short-term basis of Rs. 181,805,817 have been used for long-term investments and as explained the Company has since augmented long-term funds.

(xviii) The Company has not made any preferential allotment of shares to companies or parties covered in the register maintained under Section 301 of the Act.

(xix) The Company has not issued any secured debentures during the year.

(xx) The Company has not raised any money by way of public issue during the year.

(xxi) Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year.

For MGB & Co.

Chartered Accountants

Firm Registration Number 101169W

Hitendra Bhandari

Partner Membership Number 107832 Mumbai, 31 August 2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of Essel Propack Limited ("the Company") as at March 31, 2011, and also the Profit and Loss account and 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.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Government of India in terms of Section 227(4A) of the Companies Act, 1956 ("the Act"), and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we annex hereto a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Without qualifying our report, we draw reference to Note 2(b) of Schedule 22B regarding Performance Bonus to Managing Director is subject to approval of Central Government.

5. Further to our comments in the Annexure referred to Paragraph (3) above, we report that:

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

(ii) In our opinion, proper books of account as required by law have been kept by the company, so far as appears from our examination of those books;

(iii) The Balance Sheet, the Profit and Loss account and the Cash Flow statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, the Profit and Loss account and the Cash Flow statement dealt with by this report comply with the accounting standards! referred to in Section 211 (3C) of the Act;

(v) On the basis of written representations received! from the Directors as at March 31, 2011 and taken! on record by the Board, we report that none of the! directors is disqualified as at March 31, 2011 from] being appointed as a director in terms of clause (g)l of sub-section (1) of Section 274 of the Act;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the significant accounting policies and notes to accounts as per Schedule 22, 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 2011;

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

(c) In the case of the Cash Flow statement, of the cash flows of the Company for the year ended on that date.

Annexure referred to in paragraph 3 of Auditors' Report to the Members of Essel Propack Limited on the accounts for the year ended March 31, 2011.

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

(b) The fixed assets are physically verified by the management during the year pursuant to a phased programme designed to cover all the assets over a period, which in our opinion, is reasonable having regard to size of the company and nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) The Company has not disposed off substantial part of fixed assets during the year.

(ii) (a) As explained to us, the inventories have been physically verified by the management during the year except stocks lying with third parties in respect of whom confirmations have been obtained. In our opinion, the frequency of such verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) As explained to us, the Company is maintaining proper records of inventories and no material discrepancies were noticed on physical verification of inventories as compared to the book records

(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 Act.

(b) According to the information and explanations given to us, the Company has taken unsecured loan from a company covered in the register maintained under Section 301 of the Act. The maximum amount nvolved during the year is Rs. 80,000,000/- and there is no amount outstanding at the year-end

(c) The rate of interest and other terms and conditions of such loan taken are prima-facie not prejudicial to the interests of the Company.

(d) The Company is regular in repayment of the loan taken and interest thereon considering the terms of the loan.

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

(v) According to the information and explanations given to us, there are no contracts or arrangements, the particulars of which are required to be entered into the register in pursuance to Section 301 of the Act.

(vi) The Company has not accepted any deposits from the public during the year.

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

(viii) We are informed that the Central Government has not prescribed the maintenance of cost records under Section 209 (1) (d) of the Act in respect of the Company's activities.

(ix) According to the records of the Company, examined by us and information and explanations given to us:

(a) Undisputed Statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax / value added tax, wealth tax, service tax, custom duty, excise duty, cess and others as applicable have generally been deposited regularly with the appropriate authorities. There are no undisputed amounts payable in respect of aforesaid dues which have remained outstanding as at March 31, 2011 for a period of more than six months from the date they became payable.

(b) The disputed dues of Sales Tax / Value Added Tax, Service Tax, Excise Duty and Cess which have not been deposited are as under:

Name of the Nature of Amount in (Rs.) Period to which the amount relate Statute the Dues

Central Excise Duty 122,597,968 FY 1993 - 1994 to FY 2000 - 2001 Excise Act, 48,574,121 FY 1997 - 1998 and FY 2000 - 2001 1944 and FY 2001 - 2002 to FY 2005-2006

733,114 FY 2000 - 2001 to FY 2004 - 2005

93,140,021 FY 1997-1998 and FY 2000 - 2006

5,243,737 FY 1997-1998 and FY 2005 - 2007

Service Tax 3,208,306 FY 1997-1998 and FY 2005 - 2006

1,292,139 FY 2002 - 2003 and 2005 - 2006 to FY 2009 - 2010

243,077 FY 2004 - 2005 to FY 2006 - 2007

666,027 FY 2005 - 2006 to FY 2007 - 2008

Maharashtra Value 36,134,596 FY 2005 - 2006 Value Added Added Tax Tax Act, 2002

Central Sales Central 2,480,274 FY 2001 - 2002 to FY 2002 - 2003 Tax Act, 1956 Sales Tax 22,808,521 FY 2002 - 20003 to FY 2004 - 2005

45,971,077 FY 2005 - 2006

3,695,198 FY 2002 - 2003

11,724,643 FY 2003 - 2004 to FY 2004 - 2005

5,543,653 FY 2005 - 2006 to FY 2007 - 2008

Bombay Cess 3,213,082 FY 2003 - 2004 to FY 2007 - 2008 Provincial Municipal Corporation Act, 1959

Name of the Statue Forum where dispute is pending

Central Excise Supreme Court Tribunal CESTAT Act,1944

Commissioner of Central Excise (Appeals)

Commissioner of Central Excise

Deputy / Joint / Assistant Commissioner of

Central Excise

High Court of Mumbai

Deputy / Assistant Commissioner of

Service Tax

Commissioner of Central Excise (Appeals)

Commissioner of Central Excise

Maharashtra Value Deputy Commissioner of Sales Tax (Appeals) Tax Act,2002 Palghar

Central Sales Maharashtra Sales Tax Tribunal Tax Act,1956 Commissioner of VAT-Dadra and Nagar

Haveli - Silvassa

Deputy Commissioner of Sales Tax (Appeals) Palghar

Deputy Commissioner of Sales Tax (Appeals) Thane

Joint Commissioner of Sales Tax (Appeals) Thane

Assistant Commissioner of Commercial Taxes - Panaji

Bombay Provincial Deputy Commissioner of Cess, Navi Mumbai Municipal Corporation Act,1959

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

(xi) Based on our audit procedures and as per the information and explanations given to us, the Company has not defaulted in repayment of dues to Banks, financial institutions and debenture holders during the year.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi / mutual benefit fund / society.

(xiv) The Company is not dealing or trading in securities, debentures and other investments.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by subsidiaries from banks or financial institutions during the year, are not prejudicial to the interests of the Company.

(xvi) In our opinion and according to the information and explanations given to us, the term loans raised during the year have been applied for the purposes for which they were raised.

(xvii) According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company and related information as made available to us we report that short term funds have not been used for long term investments

(xviii) The Company has not made any preferential allotment of shares to companies or parties covered in the register maintained under Section 301 of the Act.

(xix) The Company has not issued any secured debentures during the year.

(xx) The Company has not raised any money by way of public issue during the year.

(xxi) Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year.

For MGB & Co.

Chartered Accountants Firm Registration Number 101169W

Hitendra Bhandari

Partner Mumbai, July 15, 2011 Membership Number 107832


Mar 31, 2010

1. We have audited the attached Balance Sheet of Essel Propack Limited ("the Company") as at March 31, 2010, and also the Profit and Loss account and the Cash Flow Statement for the period 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

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining,on a test basis,evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Government of India in terms of Section 227(4A) of the Companies Act, 1956 ("the Act"), and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we annex hereto a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Without qualifying our report, we draw reference to Note 2(b) of schedule 22B, regarding Managerial Remuneration for the period is subject to approval of Central Government.

5. Further to our comments in the Annexure referred to Paragraph (3) above, we report that:

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

(ii) In our opinion, proper books of account as required by law have been kept by the company, so far as appears from our examination of those books;

(iii) The Balance Sheet, the Profit and Loss account and the Cash Flow statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, the Profit and Loss account and the Cash Flow statement dealt with by this report comply with the accounting standards referred to in Section 211 (3C) of the Act;

(v) On the basis of written representations received from the Directors and taken on record by the Board, we report that none of the directors is disqualified as at March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the significant accounting policies and notes to accounts as per Schedule 22, 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 31,2010;

(b) In the case of the Profit and Loss account, of the Profit for the period ended on that date; and

(c) In the case of the Cash Flow statement, of the cash flows, for the period ended on that date.

Annexure referred to in paragraph 3 of Auditors Report to the Members of Essel Propack Limited on the accounts for the period ended March 31,2010.

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

(b) According to the information and explanations given to us, the fixed assets have been physically verified by the management in a phased program periodical manner at reasonable intervals, 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) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the period and the going concern status of the Company is not affected.

(ii) (a) The inventories have been physically verified by the management during the period except stock lying with third parties in respect of whom confirmations have been obtained. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) As explained to us, the Company is maintaining proper records of inventories and no material discrepancies were noticed on physical verification of inventories as compared to the book records.

(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 Act. Consequently, the requirements of clauses (iii) (b), (iii) (c) and (iii) (d) of paragraph 4 of the Order are not applicable.

(b) According to the information and explanations given to us, the Company has taken unsecured loan from one company covered in the register maintained under section 301 of the Act. Loan outstanding as at March 31, 2010 is Rs Nil and maximum amount involved during the period was Rs. 195,000,000.

(c) The rate of interest and other terms and conditions of unsecured loan taken by the Company are not prima- facie prejudicial to the interest of the Company.

(d) The Company is regular in repayment of Loan taken and interest thereon considering the terms of the Loan,

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

(v) (a) According to the information and explanations given to us,all contracts or arrangements the particulars of which are required to be entered into the register in pursuance of Section 301 of the Act have been so entered,

(b) Sub-clause (b) is not applicable as there are no such transactions of purchases and sales exceeding Rs. 5 lacs in aggregate,

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public during the period with in the meaning of section 58A and 58AA of the Act and the rules framed there under,

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

(viii) We are informed that the Central Government has not prescribed the maintenance of cost records under Section 209

(1) (d) of the Act in respect of the Companys products.

(ix) (a) According to the records of the Company, the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax / Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues to the extent applicable have been deposited regularly with the appropriate authorities except delay in few cases. There are no undisputed amounts payable in respect of aforesaid dues outstanding as at March 31,2010 for a period of more than six months from the date they became payable.

(b) There are no disputed dues on account of Income Tax, Custom Duty and Cess. Dues on account of the disputed Sales Tax / Value Added Tax, Wealth Tax, Service Tax and Excise Duty which have not been deposited are as under:

Name of the Statute Nature of the Amount in (Rs.)

Dues

Wealth Tax Act, 1957 Wealth Tax 129,688

Central Excise Act, 1944 Excise (Including 122,597,968 interest and penalty)

32,153,356

3,848,655

93,140,021



Name of the Statute Period to which Forum where dispute is pending the amount relate

Wealth Tax Act, 1957 A.Y.I 998-1999 Income Tax Appellate Tribunal

Central Excise Act, 1944 1994 to 2001 Supreme Court

1998 to 2000 & CESTAT

2002 to 2006

2001 to 2005 & Commissioner of Central Excise

2008-10 (Appeals)

1997-1998,2000 to Commissioner of Central Excise

2003 and 2004 to

2006



Name of the Statute Nature of the Amount in (Rs.)

Dues

5,243,737

Service Tax 3,208,306

865,940

Maharashtra Value Value Added Tax 36,134,596

Added Tax Act, 2002

Central Sales Tax Act, Central Sales Tax 2,480,274

1956 22,808,521

45,971,077

9,290,529

Name of the Statute Nature of the Amount in (Rs.)

Dues

1995-1996, 1997- Deputy / Joint / Assistant

1998 & 2005-07 Commissioner of Central Excise

1997-98 to 2002 High Court of Mumbai

2002-2003 & 2005 Deputy / Assistant Commissioner of to 2007 Service Tax

Maharashtra Value

Added Tax Act, 2002 2005-06 Deputy Commissioner of Sales Tax (Appeals), Palghar.

Central Sales Tax Act,

1956 2001 to 2003 Maharashtra Sales Tax Tribunal

2002 to 2005 Commissioner of VAT-Dadra and

Nagar Haveli - Silvassa.

2005-06 Deputy Commissioner of Sales Tax

(Appeals), Palghar.

2003 to 2005 Joint Commissioner of Sales Tax (Appeals),Thane.

(x) The Company does not have accumulated losses as at March 31,2010 and has not incurred cash losses during the period ended on that date or in the immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to banks, financial institutions and debenture holders.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi/ mutual benefit fund /society

(xiv) The Company is not dealing or trading in securities, debentures and other investments.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantee for loans taken by subsidiaries from banks and financial institutions are prima facie not prejudicial to the interest of the Company.

(xvi) In our opinion and according to the information and explanations given to us, the term loans raised during the period have been applied for the purposes for which they were raised.

(xvii) On the basis of review of utilization of funds which is based on an overall examination of the Balance Sheet of the Company and related information as made available to us, we report that no short term funds have been used for long term purposes.

(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 Act during the period.

(xix) The Company has not issued any secured debentures during the period.

(xx) The Company has not raised any money by way of public issue during the period.

(xxi) Based on our audit procedures performed and according to the information and explanations given by the management, no fraud on or by the Company has been noticed or reported during the course of our audit.



For MGB & Co

Chartered Accountants

Firm Registration No.101169W

Mohan Bhandari

Partner

Membership No. 12912

Mumbai, July 28,2010