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Auditor Report of JK Paper Ltd.

Mar 31, 2016

We have audited the accompanying standalone financial statements of JK Paper Limited ("the
Company"), which comprise the Balance Sheet as at March 3 1,2016, the Statement of Profit and Loss,
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

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 and presentation of these
Standalone 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 Standalone 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 sub-section 10
of section 143 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. 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 audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us,
the aforesaid Standalone financial statements give the information required by the Act in the
manner so required and give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and it''s
profit and it''s cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to Note No.33 (b) of the Financial Statements regarding assets held for sale
grouped under ''Other Current Assets'' amounting to Rs. 157.57 Crores pending for disposal since
September, 2013.

Our opinion is not qualified in respect of the above matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central
Government of India in terms of sub-section (I I) of section 143 of the Act, we give in the
"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent
applicable.

2. As required by section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purpose of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far
as it appears from our examination of those books.

(c) The Balance 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) In our opinion, the aforesaid Standalone financial statements comply with the Accounting
Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014.

(e) On the basis of written representations received from the directors as on March 3 1, 2016 taken
on record by the Board of Directors, none of the directors is disqualified as on March 3 1,2016
from being appointed as a director in terms of sub-section 2 of section 164 of the Act.

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


(g) With respect to the other matters to be included in the Auditor''s Report in accordance with
Rule I I 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 - Refer Note 30 to the 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 including derivative contracts

- Refer Note 5 and 8 to the financial statements.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund by the Company.

The Annexure as referred in paragraph (1) ''Report on Other Legal and Regulatory Requirements of our

Independent Auditors'' Report to the members of JK Papers Limited on the standalone financial
statements for the year ended March 31, 2016, we report that:

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

(b) The fixed assets have been physically verified by the management according to the programme of
periodical verification in phased manner which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its Fixed Assets. The discrepancies, if any, noticed on such
physical verification have been properly dealt with in the books of accounts.

(c) The title deeds of immovable properties are held in the name of the Company, except in the
following case:-

Total No. Gross Net Book
Particular of Cases Book Value Value

Free hold
land 1 Rs. 2.89 Crore Rs. 2.89 Crore

*Also refer Note No. 10(a)

ii. We have been explained by the management that the inventory have been physically verified at
reasonable intervals during the year. As far as we can ascertain and according to information and
explanations given to us, the discrepancies, whenever material noticed on such physical
verification of inventory as compared to book records were properly dealt within the books of
accounts.

iii. The Company has not granted any loans, secured or unsecured to companies, firms, Limited
Liability partnerships or other parties covered in the Register maintained under section 189 of the
Act. Accordingly, the provisions of clause 3 (iii) (a) to (c) of the Order are not applicable to
the Company.


iv. According to the information and explanations given to us, the Company have complied with the
provisions of section 185 and 186 of the Act with respect to the loans, investments made.

v. In our opinion and according to the information and explanations given to us, the Company has
complied with the directives issued by the Reserve Bank of India and the provisions of Section 73
to 76 or any other relevant provisions of the Act and the rules framed there under with regard to
deposits accepted from the public. We have been informed that no order has been passed by Company
Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other
Tribunal in this regard.

vi. We have broadly reviewed the books of account maintained by the Company pursuant to the rules
made by Central Government for the maintenance of cost records under section 148(1) of the Act in
respect to the Company''s products to which said rules are made applicable and are of the opinion
that prima facie, the prescribed records have been made and maintained. We have however not made a
detailed examination of the said records with a view to determine whether they are accurate or
complete.

vii. (a) According to the information and explanations given to us and on the basis of examination
of the records of the Company, the Company is generally regular in depositing undisputed statutory
dues including provident fund, employees'' state insurance, sales- tax, income tax, service tax,
custom duty, excise duty, value added tax, cess and any other material statutory dues with the
appropriate authorities to the extent applicable and further, there are no undisputed statutory
dues payable for a period of more than six months from the date they become payable as at March 31,
2016.

(b) According to the records and information and explanations given to us, there are no dues in
respect of income tax, sales tax, service tax, duty of excise, duty of custom, or value added tax
which have not been deposited on account of any dispute except as given below:


NAME of Nature of Period to Amount Forum where dipute
the statute dues which involved is pending
amount (Rs, in
relate Crores)*

1983-1984

0.05 Sales Tax
Department, Delhi

1987-1988

1997-1998 0.10 Sales Tax
Tribunal, Cuttack

2002-2003 0.01 Deputy Commissioner,
Delhi

2004-2005 0.46 High Court, Allahabad

Sales 2005-2009 1.46 Additional
Commissioner, Cuttack
Tax Sales Tax 2005-2009 0.16 Sales Tax Tribunal,
Cuttack
Act 2006-2007 1.05 High Court, Allahabad

2006-2007 0.12 Gujarat Vat
(Tribunal), Ahmedabad

2007-2008 &

2008-2009 0.24 High Court, Allahabad

2009-2010 0.08 High Court, Allahabad

2012-2013 5.85 Additional Commi
ssioner, Cuttack

1981-1982 Deputy Commissioner
Central

1982-1983 0.70 Excise, Rayagada

1982-1983 0.41 Supreme Court

1986-1995 1.31 High Court, Cuttack

2004-2007 0.07 CESTAT, Ahmedabad

2005-2007 0.03 CESTAT, Ahmedabad

2005-2010 0.05 CESTAT, Ahmedabad

2007-2010 3.37 CESTAT, Ahmedabad

2012-2014 0.16 CESTAT, Ahmedabad

Central
Excise Excise 2011 2012 0.09 Commissioner (Appeals),
Act, Duty Bhubaneswar
1944 2009-2010 0.08 CESTAT, Ahmedabad

2010-2011 0.53 CESTAT, Ahmedabad

2011-2012 0.18 CESTAT, Ahmedabad

2008-2010 6.22 Commissioner Excise,
Bhubaneswar

2012-2013 0.21 Commissioner
(Appeals), Surat

2013-2014 0.19 Commissioner
(Appeals), Surat

2014-2015 0.09 Commissioner
(Appeals), Surat

2011-2012 0.08 Commissioner
(Appeals), Surat

2008-2012 0.73 Commissioner
(Appeals), Surat

Custom Custom 2011-2012 & 0.72 CESTAT, Ahmedabad
Act Duty 2012-2013

Finance Service 2009-2010 0.31 Commissioner
(Appeals), Surat
Act Tax 2007-2009 0.15 CESTAT, Ahmedabad

Income Income
Tax Act, 2010-2011 0.46 CIT (Appeals)
1961

*Net of payment

viii. In our opinion, on the basis of audit procedures and according to the information and
explanations given to us, the Company has not defaulted in repayment of loan or borrowing to any
banks and financial institutions and dues to debenture/bond holders. The Company does not have any
loans or borrowings from the government.

ix. According to the information and explanations given to us, the Company has not raised moneys by
way of initial public offer or further public offer (including debt instruments) during the year.
The term loans have been applied for the purpose for which they were raised.

x. According to the information and explanations given to us, no instance of fraud by the Company
or on the Company by its officers or employees has been noticed or reported during the year.

xi. According to the information and explanations given to us and based on our examination of the
records of the Company, the Company has paid/ provided for managerial remuneration in accordance
with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the
Act.

xii. In our opinion and according to the information and explanations given to us, the Company is
not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii. According to the information and explanations given to us and based on our examination of the
record of the Company, transactions with the related parties are in compliance with section 177 and
188 of the Act where applicable and details of such transactions have been disclosed in the
financial statements as required by the applicable accounting standards.

xiv. Based upon the audit procedures performed and the information and explanations given to us,
the Company has made the preferential allotment of shares during the year under review. The
requirement of section 42 of the Act have been complied with and the amount raised has been used
for the purposes for which the funds were raised.

xv. According to the information and explanations given to us and based on our examination of the
records of the Company, the Company has not entered into non-cash transactions with directors or
persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India
Act, 1934.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the
Companies Act, 2013 ("the Act") as referred to in paragraph 2(f) of ''Report on Other Legal and
Regulatory Requirements'' section

We have audited the internal financial controls over financial reporting of JK Paper Limited ("the
Company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements
of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial
controls based on the internal control over financial reporting criteria established by the Company
considering the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls over Financial Reporting issued by the Institute of Chartered
Accountants of India (ICAI). These responsibilities include the design, implementation and
maintenance of adequate internal financial controls that were operating effectively for ensuring
the orderly and efficient conduct of its business, including adherence to Company''s policies, the
safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of reliable financial
information, as required under the Companies Act, 2013.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over
financial reporting based on our audit.


We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls
Over Financial Reporting and the Standards on Auditing, issued by ICAI and deemed to be prescribed
under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal
financial controls, both applicable to an audit of Internal Financial Controls and, both issued by
the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that
we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether adequate internal financial controls over financial reporting was established and
maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the
internal financial controls system over financial reporting and their operating effectiveness. Our
audit of internal financial controls over financial reporting included obtaining an understanding
of internal financial controls over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion on the Company''s internal financial controls system over financial
reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company''s internal financial control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting
principles A Company''s internal financial control over financial reporting includes those policies
and procedures that (I) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2)
provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts
and expenditures of the Company are being made only in accordance with authorizations of management
and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have
a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting,
including the possibility of collusion or improper management override of controls, material
misstatements due to error or fraud may occur and not be detected. Also, projections of any
evaluation of the internal financial controls over financial reporting to future periods are
subject to the risk that the internal financial control over financial reporting may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls
system over financial reporting and such internal financial controls over financial reporting were
operating effectively as at March 31, 2016, based on the internal control over financial reporting
criteria established by the Company considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the
Institute of Chartered Accountants of India.

For S.S. KOTHARI MEHTA & CO.

Chartered Accountants

Firm Registration Number: 000756N

K.S. MEHTA

Partner

Membership Number: 008883

Place: New Delhi

Date: May 6,2016


Mar 31, 2015

We have audited the accompanying standalone financial statements of JK Paper Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and summary of 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 and presentation of these standalone 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 materia] misstatement, whether due to fraud or error.

Auditor's Responsibility

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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 audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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 it's loss and it's cash flows for the year ended on that date.

Emphasis of Matter

a) We draw attention to Note No.34 (e) of the accompanying financial statements. As per the scheme of Arrangement approved by the Hon'ble High Court of Gujarat and accounting treatment sanctioned therein, the company has withdrawn Rs. 5.04 crores from the Security Premium Account to the Statement of Profit & Loss towards diminution in the value of investments in JK Enviro-Tech Limited. There is no specific accounting treatment prescribed in the Accounting standards specified in the Companies Act, 2013 and consequent to this treatment, the loss for the year ended March 31, 2015 is lower by the said amount with a corresponding reduction in security premium reserve.

b) We draw attention to Note No.33 (b) of the Financial Statements regarding assets held for sale grouped under 'Other Current Assets* amounting to Rs. 157.84 Crore. pending for disposal since September, 2013.

Our opinion is not qualified in respect of the above matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order,20l5 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order , to the extent applicable.

2. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, 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) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on 31st March 2015 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.

(f) 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 - Refer Note 30 to the 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 including derivative contracts - Refer Note 5 and 8 to the financial statements.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

The Annexure referred to in our Independent Auditors' Report to the members of the Company on the standalone financial statements for the year ended 31st March 2015, we report that:

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

(b) The fixed assets have been physically verified by the management according to the programme of periodical verification in phased manner which, in our opinion, is reasonable having regard to the size of the Company and the nature of its Fixed Assets. The discrepancies, if any, noticed on such physical verification have been properly dealt with in the books of accounts.

ii. (a) We have been explained by the management that the inventory has been physically verified at reasonable intervals during the year.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventory. As far as we can ascertain and according to information and explanations given to us by the management, the discrepancies, whenever material noticed on such physical verification of inventory as compared to book records were properly dealt within the books of accounts.

iii. According to the information and explanations given to us, the Company has not granted loan to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Therefore, provision of clause 3(iii)(a) and 3(iii)(b) of Companies (Auditor's Report) Order, 2015 are not applicable.

iv. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature where suitable alternative sources do not exist for obtaining comparable quotations, there is reasonable internal control system 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 and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v. In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under with regard to deposits accepted from the public. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

vi. We have broadly reviewed the books of account maintained by the company pursuant to the rules made by Central Government for die maintenance of cost records under section 148( 1) of the Act in respect to the Company's products to which said rules are made applicable and are of the opinion that prima facie, the prescribed records have been made and maintained. We have however not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and on the basis of examination of the records of the Company, the company is generally regular in depositing undisputed statutory dues including provident fund, employees* state insurance, sales-tax, wealth tax, income tax, service tax, custom duty, excise duty, value added tax, cess and any other material statutory dues with the appropriate authorities to the extent applicable and further, there are no undisputed statutory dues payable for a period of more than six months from the date they become payable as at 31st March 2015.

(b) According to the records and information and explanations given to us, there are no material dues in respect of wealth tax and income tax which have not been deposited with the appropriate authorities on account of any dispute and the dues in respect of sales tax, excise duty, custom duty, service tax and cess that have not been deposited with the appropriate authority on account of dispute and the forum where the dispute is pending are given below:

Name Nature Period to Amount Forum where dispute of the of dun which Involved Is pending statute amount (Fts. In relates Crores)

Saju Sales Tax 1983-64/ 1987-88 0.05 Sales Tax Department- Delhi Tax 1997-98 0.1 Sales Tax Tribunal. Cutacfe

Act 2002-2003 0.01 Deputy Commissioner. Delhi

2004-2005 0.46 High Court Allahabad

200S-2009 1.46 Additional Commissioner, Cuttack

2005-2009 0.14 Sales Tax Tribunal Cuttack

2006-2007 1.05 High Court Allahabad

2006-2007 0.12 jolntCommlsskxier Appeals Vadodara

2007-2008

2008-2009 0.24 High Court Allahabad

2009-2010 0.08 High Court Allahabad

2012-12 5.85 Additional Commissioner, Cuttack

Central Excise 1981-1982/

1982-1983 0.7 Deputy Commissioner Central Excise.

Excite Duty Rayagada Act 1944 1982-1983 0.41 Supreme Court

1984-1987*

1994-1995 1.31 High Court. Cuaack

2004-2007 0.05 CESTAT Ahmadabad

2005-2007 0.03 CESTAT Ahmadabad

2005-2009 0.05 CESTAT Ahmadabad

2007-2009 0.9 CESTAT Ahmadabad

2007-2009/ 2008-2009 0.15 CSSTAT Ahmadabad

2007-2009 2.47 CESTAT Ahmadabad

2008-20094 2009-2010 4.22 CESTAT Kol lata

2009-2010 0.08 CESTAT Ahmadabad

2010-2011 0.53 CESTAT Ahmadabad

2011-2012 0.2* CESTAT Ahmadabad

2012-2013 0.02 CESTAT Ahmadabad

2012-2014 0.17 CESTAT Ahmadabad

2008-2012 0.7* Commissioner (Apoeals).Surat

Custom Custom 2012-2013 0.72 Commlsilonar (Appeals) Custom. Act Duty Ahmadabad

Finance Service 2009-2010 0.27 Com mlsstoner (Appeals) Sura Act Tax

Water Cess 2001-2002 to 2014-15 0.81 Cess Appdhte Committee, OSPC8. (PCP) Bhut-aneswar Ceaa Act, 1977

(c) According to the information and explanations given to us the amounts which were required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Art, 1956 ( I of 1956) and rules made there under has been transferred to such fund within time.

viii. The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year.

ix. In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of any dues to banks, financial institutions and debenture/bond holders.

x. 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.

xi. In our opinion and on the basis of information and explanations given to us, the term loans were applied for the purposes for which they were obtained.

xii. According to the information and explanation given to us, no instance of fraud on or by the company, noticed or reported during the year.

For S. S. KOTHAR1 MEHTA & CO.

Chartered Accountants

Firm Reg. No.: 000756N

K.S. MEHTA

Partner

Membership No.: 008883

Place: New Delhi

Date: 16th May, 2015


Mar 31, 2014

We have audited the accompanying financial statements of JK Paper 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 Notes to Financial Statements comprising 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 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of 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 audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") 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. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211

of the Companies Act, 1956 read with General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and

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

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in paragraph (1) of our Report of even date of JK PAPER LIMITED for the year ended 31st March, 2014)

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

(b) The fixed assets have been physically verified by the Management according to the programme of periodical verification in phased manner which in our opinion is reasonable having regard to the size of the Company and the nature of its Fixed Assets. The discrepancies, if any, noticed on such physical verification have been properly dealt with in the books of accounts.

(c) As per the records and information and explanations given to us, fixed assets disposed off during the year were not substantial.

2) (a) We have been explained by the management that the inventory has been physically verified at reasonable intervals during the year and confirmations are obtained where inventory are lying with third parties.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventory. As far as we can ascertain and according to information and explanations given to us by the management, the discrepancies whenever material noticed on such physical verification of inventory as compared to book records were properly dealt within the books of accounts.

3) (a) As informed to us, the Company has given unsecured loan to a Company covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year in respect of said Company is Rs. 20.06 Crores and the year- end balance of such loan is Rs. 12.15 Crores.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms & conditions on which aforesaid loan has been given are not, prima facie, prejudicial to the interest of the Company.

(c) In respect of aforesaid loan, the repayment of principal as well as interest is regular.

(d) In respect of the loan given by the Company, no amount, principal as well as interest, is overdue and therefore provisions of clause 4(iii) (d) of the Order is not applicable.

(e) As informed to us, the Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (f) and (g) of the Order are not applicable to the Company.

4) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature where suitable alternative sources do not exist for obtaining comparable quotations, there is reasonable internal control system 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 and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5) (i) According to the information and explanations provided by the management and based upon audit procedures performed, we are of the opinion that 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; and

(ii) In our opinion and according to information and explanations given to us, the transactions, made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and exceeding the value of five lacs rupees in respect of each party during the financial year, have been made at prices which are reasonable (read with Para 4 above and Note no. 49 (b) of the accompanying financial statements) having regard to prevailing market price at the relevant time.

6) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58 A and 58 AA or any other relevant provisions of the Act and the rules framed there under with regard to deposits accepted from the public. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

7) The Company has an internal audit system which is commensurate with the size of the Company and nature of its business.

8) We have broadly reviewed the books of account and records maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Act in respect of the Company''s products to which the said rules are made applicable 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 said records with a view to determine whether they are accurate and complete.

9) (a) According to the records of the Company, the company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Sales Tax, Wealth Tax, Income Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues with the appropriate authorities to the extent applicable and further, there are no undisputed statutory dues payable for a period of more than six months from the date they become payable as at 31st March 2014.

(b) According to the records and information and explanations given to us, there are no dues in respect of Wealth Tax, Service Tax and Custom Duty that have not been deposited with the appropriate authorities on account of any dispute and the dues in respect of Sales Tax, Excise Duty, Income Tax and Cess that have not been deposited with the appropriate authority on account of dispute and the forum where the dispute is pending are given below:

Nature of Nature of Period for which Amount Forum where dispute statute dues amount relates involved is pending (Rs. in Crores)

Sales Tax Sales 1983-84/1987-88 0.05 Sales Tax Department- Delhi Act Tax 1997-98 0.10 Sales Tax Tribunal, Cuttack

2002-2003 0.01 Deputy Commissioner, Delhi

2004-2005 0.46 High Court Allahabad

2005- 2009 1.46 Additional Commissioner, Cuttack

2005- 2009 0.16 Sales Tax Tribunal Cuttack

2006-2007 1.05 High Court Allahabad

2006-2007 2.21 Joint Commi -ssioner Appeals, Vadodara

2007- 2008 & 2008-2009 0.24 High Court Allahabad

2009-2010 0.08 High Court Allahabad

2012-13 5.85 Additional Commissioner, Cuttack

Central Excise 1981-1982/1982-1983 0.70 Deputy Commi -ssioner Central Excise, Excise Duty Rayagada Act 1982-1983 0.41 Supreme Court

1986-1987 & 1994-1995 1.31 High Court, Cuttack

2004- 2007 0.05 CESTAT Ahmedabad

2005- 2007 0.03 CESTAT Ahmedabad

2005-2009 0.05 CESTAT Ahmedabad

2007-2009 0.90 CESTAT Ahmedabad

2007-2008/2008-2009 0.15 CESTAT Ahmedabad

2007-2009 2.47 CESTAT Ahmedabad

2008-2009 & 2009-2010 6.22 CESTAT Kolkata

2009- 2010 0.08 CESTAT Ahmedabad

2010- 2011 0.53 CESTAT Ahmedabad

2011-2012 0.32 CESTAT Ahmedabad

2012-2013 0.02 CESTAT Ahmedabad

Water Cess 2001- 2002 to 2013-14 1.11 Cess Appel -late Commi -ttee, OSPCB, (PCP) Bhubaneswar Cess Act, 1977

10) The Company does not have accumulated losses and has not incurred cash losses during the current year and in the immediately preceding financial year.

11) In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of any dues to banks, financial institutions and debenture/bond holders.

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

13) The Company is not a chit fund or a nidhi /mutual benefit fund /society, therefore, the provisions of clause 4 (xiii) of the Order are not applicable to the Company.

14) According to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments.

15) According to the information and explanations given to us, the Company has given an undertaking to IDFC Limited against loan given to JK Enviro- Tech Limited, the current outstanding is Rs. 11.76 Crore, as stated in Note 31(a) of the accompanying financial statements. Further, during the year the Company has agreed with HDFC Limited that on happening of certain events, it will take all steps as may be required to ensure the timely repayment of loan obligations of its Subsidiaries for the loan availed by them from HDFC Limited, the current outstanding is Rs. 36.09 Crore, as stated in Note 31(b) of the accompanying financial statements. In our opinion, the terms and conditions of above are not, prima facie, prejudicial to the interest of the Company.

16) In our opinion and on the basis of information and explanations given to us, the term loans were applied for the purposes for which they were obtained.

17) According to information and explanations given to us and on an overall examination of the Financial Statements of the Company, no funds raised on short-term basis have been used for long-term investment.

18) 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 year.

19) According to the information and explanations given to us and the records examined by us, the Company has no outstanding secured debentures; however adequate amount is kept in reserve as security in respect of unsecured bonds outstanding at year end.

20) The Company has not raised any money by public issues during the year.

21) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For S.S. KOTHARI MEHTA & CO.

Chartered Accountants

Firm Reg. No. 000756N

K.S. MEHTA

Partner

Membership No. 008883

Place : New Delhi

Date : 21st May, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of JK Paper 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 Notes to Financial Statements comprising 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 controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. 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 audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") 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. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement complies with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

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

(Referred to in paragraph (1) of our Report of even date of JK PAPER LIMITED for the year ended 31st March, 2013)

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

(b) The fixed assets have been physically verified by the Management according to the programme of periodical verification in phased manner which in our opinion is reasonable having regard to the size of the Company and the nature of its Fixed Assets. The discrepancies, if any, noticed on such physical verification have been properly dealt with in the books of accounts.

(c) As per the records and information and explanations given to us, fixed assets disposed off during the year were not substantial.

2) (a) We have been explained by the management that the inventory has been physically verified at reasonable intervals during the year and confirmations are obtained where inventory are lying with third parties.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventory. As far as we can ascertain and according to information and explanations given to us by the management, the discrepancies whenever material noticed on such physical verification of inventory as compared to book records were properly dealt within the books of accounts.

3) (a) As informed to us, the Company has given unsecured loan to a Company covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year in respect of said Company is Rs. 23.03 Crores and the year- end balance of such loan is Rs. 20.06 Crores.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms & conditions on which aforesaid loan has been given are not, prima facie, prejudicial to the interest of the Company.

(c) In respect of aforesaid loan, the repayment of principal as well as interest is regular.

(d) In respect of the loan given by the Company, no amount, principal as well as interest, is overdue and therefore provisions of clause 4(iii) (d) of the Order is not applicable.

(e) As informed to us, the Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (f) and (g) of the Order are not applicable to the Company.

4) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature where suitable alternative sources do not exist for obtaining comparable quotations, there is reasonable internal control system 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 and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5) (i) According to the information and explanations provided by the management and based upon audit procedures performed, we are of the opinion that 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; and

(ii) In our opinion and according to information and explanations given to us, the transactions, made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and exceeding the value of five lacs rupees in respect of each party during the financial year, have been made at prices which are reasonable (read with Para 4 above and Note no. 35 (b) of the accompanying financial statements) having regard to prevailing market price at the relevant time.

6) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58 A and 58 AA or any other relevant provisions of the Act and the rules framed there under with regard to deposits accepted from the public. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

7) The Company has an internal audit system which is commensurate with the size of the Company and nature of its business.

8) We have broadly reviewed the books of account and records maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Act in respect of the Company''s products to which the said rules are made applicable 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 said records with a view to determine whether they are accurate and complete.

9) (a) According to the records of the Company, the company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Sales Tax, Wealth Tax, Income Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues with the appropriate authorities to the extent applicable and there are no undisputed statutory dues payable for a period of more than six months from the date they become payable as at 31st March 2013.

(b) According to the records and information and explanations given to us, there are no dues in respect of wealth tax, service tax and Custom Duty that have not been deposited with the appropriate authorities on account of any dispute and the dues in respect of Sales Tax, Excise Duty, Income Tax and cess that have not been deposited with the appropriate authority on account of dispute and the forum where the dispute is pending are given below:

Nature of Nature of Period for which status dues amount relates

Sales Tax Sales 1983-84/1987-88 Act Tax 1997-98

2001-2002

2002-2003

2003-2004

2004-2005

2004-2005

2005-2009

2005-2009

2006-2007

2006-2007

2007-2008 & 2008-2009

2009-2010

Central Excise 1981-1982/1982-1983 Excise Duty Act 1982-1983

1986-1987 & 1994-1995

2004-2007

2005-2007

2005-2009

2007-2009

2007-2008/2008-2009

2007-2009

2008-2009 & 2009-2010

2009-2011

2009-2012

2009-2012

2010-2011

2010-2012

Water Cess 2001 - 2002 (PCP) Cess Act, 1977

Income Income A.Y 2002-2003 to Tax Act, Tax 2005-2006 1961 A.Y 2010-2011

Name of Status Amount Forum where dispute involved is pending (Rs. in Crores)

Sales Tax Act 0.05 Sales Tax Department- Delhi

0.16 Sales Tax Tribunal, Cuttack

0.11 Sales Tax Tribunal, Cuttack

0.01 Deputy Commissioner, Delhi

0.01 Sales Tax Tribunal, Cuttack

0.46 High Court Allahabad

0.03 Sales Tax Tribunal, Cuttack

1.46 Additional Commissioner, Cuttack

0.16 Sales Tax Tribunal Cuttack

1.05 High Court Allahabad

2.21 Joint Commissioner Appeals, Vadodara

0.48 High Court Allahabad

0.10 High Court Allahabad

Central Excise Act 0.70 Deputy Commissioner Central Excise, Rayagada

0.41 Supreme Court

1.31 High Court, Cuttack

0.06 CESTAT Ahmedabad

0.03 CESTAT Ahmedabad

0.05 Commissioner (Appeals), Surat

0.90 CESTAT Ahmedabad

0.15 CESTAT Ahmedabad

2.47 Commissioner (Appeals), Surat

6.22 CESTAT Kolkata

0.20 Commissioner (Appeals), Surat

0.23 Commissioner (Appeals), Surat

0.20 Commissioner (Appeals), Surat

0.26 Commissioner (Appeals), Surat

0.02 Commissioner (Appeals), Surat

Water Cess Act 1977 1.08 Cess Appellate Committee, OSPCB, Bhubaneswar

Income Tax Act 1961 0.13 High Court Ahmedabad

1.16 CIT (Appeal)

Read with Note no. 30 of the accompanying financial statements.

10) The Company does not have accumulated losses and has not incurred cash losses during the current year and in the immediately preceding financial year.

11) In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of any dues to banks, financial institutions and debenture/bond holders.

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

13) The Company is not a chit fund or a nidhi/mutual benefit fund/society, therefore, the provisions of clause 4 (xiii) of the Order are not applicable to the Company.

14) According to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments.

15) According to the information and explanations given to us, the Company has given an undertaking to Infrastructure Development Finance Company Limited against loan given to JK Enviro -Tech Limited, the current outstanding is Rs. 17.17 Crore, as stated in Note 31(a) of the accompanying financial statements. Further, during the year the Company has agreed with HDFC Limited that on happening of certain events, it will take all steps as may be required to ensure the timely repayment of loan obligations of its Subsidiaries for the loan availed by them from HDFC Ltd., the current outstanding is Rs. 38.40 Crore, as stated in Note 31(b) of the accompanying financial statements. In our opinion, the terms and conditions of above are not, prima facie, prejudicial to the interest of the Company.

16) In our opinion and on the basis of information and explanations given to us, the term loans were applied for the purposes for which they were obtained.

17) According to information and explanations given to us and on an overall examination of the Financial Statements of the Company, no funds raised on short-term basis have been used for long-term investment.

18) 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 year.

19) According to the information and explanations given to us and the records examined by us, the Company has no outstanding secured debentures; however adequate amount is kept in reserve as security in respect of unsecured bonds outstanding at year end.

20) According to the information and explanations given to us and the records examined by us, the Company had raised money through Rights issue of Rs. 245.58 Crore in previous year out of which balance Rs. 97.31 Crore has been fully utilized during the year. (Refer Note No. 53 of the accompanying financial statements).

21) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For S.S. KOTHARI MEHTA & CO.

Chartered Accountants

Firm Reg. No. 000756N

K.S. MEHTA

Partner

Membership No. 008883

Place : New Delhi

Date : 21st May, 2013


Mar 31, 2012

We have audited the attached Balance Sheet of JK PAPER LIMITED, as at 31st March, 2012, the Statement of Profit and Loss 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 the Auditing Standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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.

1. As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 (together the 'Order') issued by the Central Government of India in terms of Section 227 (4 A) of the Companies Act, 1956 (The Act), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in Paragraph 1 above, 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 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 appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit & 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 & Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3 C) of the Companies Act, 1956;

(e) On the basis of written representations received from the Directors of the Company 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;

In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Accounting Policy and 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;

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

ii) In the case of the Statement of Profit & Loss, of the Profit for the year ended on that date; and

iii) 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 (1) of our Report of even date of JK PAPER LIMITED for the year ended 31st March, 2012)

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

(b) The fixed assets have been physically verified by the Management according to the programme of periodical verification in phased manner which in our opinion is reasonable having regard to the size of the Company and the nature of its Fixed Assets. The discrepancies, if any, noticed on such physical verification have been properly dealt with in the books of accounts.

(c) As per the records and information and explanations given to us, no substantial part of fixed assets has been disposed off during the year.

2) (a) We have been explained by the management that the inventory has been physically verified at reasonable intervals during the year and confirmations are obtained where inventory are lying with third parties.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventory. As far as we can ascertain and according to information and explanations given to us by the management, the discrepancies whenever material noticed on such physical verification of inventory as compared to book records were properly dealt within the books of accounts.

3) (a) As informed to us, the Company has given unsecured loan to a Company covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year in respect of said Company is Rs. 26.63 Crores and the year end balance of such loan is Rs. 23.03 Crores.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms & conditions on which aforesaid loan has been given are not, prima facie, prejudicial to the interest of the Company.

(c) In respect of aforesaid loan, the repayment of principal as well as interest is regular.

(d) In respect of the loan given by the Company, no amount, principal as well as interest, is overdue and therefore provision of clause 4(iii) (d) of the order is not applicable.

(e) As informed to us, the Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (f) and (g) of the Order are not applicable to the Company.

4) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature where suitable alternative sources do not exist for obtaining comparable quotations, there is reasonable internal control system 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 and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5) (a) According to the information and explanations provided by the management and based upon audit procedures performed, we are of the opinion that the particulars of contracts or arrangements that needs to be entered into register maintained pursuant to Section 301 of the Act have been so entered; and

(b) In our opinion and according to information and explanations given to us, the transactions, made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and exceeding the value of five lacs rupees in respect of each party during the year have been made at prices which are reasonable (read with Para 4 above) having regard to prevailing market price at the relevant time.

6) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58 A and 58 AA or any other relevant provisions of the Act and the rules framed there under with regard to deposits accepted from the public. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

7) The Company has an internal audit system which is commensurate with the size and nature of its business.

8) We have broadly reviewed the books of account and records maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1) (d) of the Act in respect of the Company's products to which the said rules are made applicable 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 said records with a view to determine whether they are accurate and complete.

9) (a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Sales Tax, Wealth Tax, Income Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues with the appropriate authorities and there are no undisputed statutory dues payable for a period of more than six months from the date they become payable as at 31st March 2012.

(b) According to the records and information and explanation given to us, there are no dues in respect of Wealth Tax, Service Tax and Custom Duty that have not been deposited with the appropriate authorities on account of any dispute and the dues in respect of Sales Tax, Income Tax, Excise Duty, Provident Fund and Cess that have not been deposited with the appropriate authority on account of dispute and the forum where the dispute is pending are given below:-

Nature of Nature of Period For Which Amount Forum Where Dispute Statue Dues Amount Relates Involved Is Pending (Rs. in Crore)

Sales Tax Sales 1983-84/1987-88 0.05 Sales Tax Act Tax Department Delhi

1997-98/2002-07 0.12 Sales Tax Tribunal Cuttack

2002-03 0.01 Deputy Commissioner Delhi

2004-05 0.46 High Court Allahabad

2005-2009 1.46 Additional Commissioner, Cuttack

2005-2009 0.16 Sales Tax Tribunal Cuttack

2006-07 1.05 High Court Allahabad

2006-07 2.21 Joint Commissioner Appeals-Vadodara

2007-08 & 2008-09 0.48 High Court Allahabad

2009-10 0.10 High Court Allahabad

Central Excise 1979-80/1981-82 0.70 Deputy Commissioner Excise Duty Central Excise, Act Rayagada

1982-83 0.41 Supreme Court

1986-87 & 1994-95 1.31 High Court, Cuttack

2004-07 0.06 CESTAT, Ahmadabad

2005-07 0.03 CESTAT, Ahmadabad

2005-09 0.04 Commissioner (Appeals), Surat

2007-09 0.49 CESTAT, Ahmadabad

2007-09 0.41 CESTAT, Ahmadabad

May 2008- March 2011 0.17 Asst. Commissioner, Bhubaneshwar

2008-09 & 2009-10 6.29 CESTAT, Kolkata

2008-09 0.15 CESTAT, Ahmadabad

2005-06 & 2010-11 0.05 Asst. Commissioner Central Excise, Surat

2005-06 & 2010-11 0.35 Commissioner (Appeals), Surat

Provident Provident 1971-72/ Fund Act Fund 1977-78 0.12 PF Commissioner, Surat High Court 2006-07 0.28 Orissa Cuttack

Water Cess 2001-02 0.82 Cess Appellate (PCP) Committee, OSPCB, Cess Act, Bhubaneswar 1977

10) The Company does not have accumulated losses and has not incurred cash losses during the current year and in the immediately preceding financial year.

11) In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of any dues to banks, financial institutions and debenture/bond holders.

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

13) The Company is not a chit fund or a nidhi /mutual benefit fund /society, therefore, the provisions of clause 4 (xiii) of the Order are not applicable to the Company.

14) According to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments.

15) (a) According to the information and explanations given to us, the Company has given an undertaking to Infrastructure Development Finance Company Limited against loan given to JK Enviro-tech Limited amounting to Rs. 40.00 Crore as stated in Note No. 31. In our opinion, the terms and conditions on which the Company has given the undertaking is not, prima facie, prejudicial to the interest of the Company.

(b) As explained to us, the Company has not given any guarantee for loans taken by others from banks and financial institution.

16) In our opinion and on the basis of information and explanations given to us, the term loans were applied for the purposes for which they were obtained. However as represented by the management, unutilized amount of loans obtained for project purposes are temporarily deployed in short term investment pending utilization.

17) According to information and explanations given to us and on an overall examination of the Balance Sheet of the Company, funds raised on short-term basis have not been used for long-term investment.

18) 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 year.

19) According to the information and explanations given to us and the records examined by us, adequate amount is kept in reserve as security in respect of bond holders outstanding at year end.

20) According to the information and explanations given to us and the records examined by us, the Company has raised money through Rights Issue of Rs. 245.58 Crore out of which Rs. 148.27 Crore has been utilized upto the end of the year. (Refer Note No. 51 (a)).

21) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For LODHA & CO. Chartered Accountants

N.K. LODHA

Partner

Firm Registration No.:- 301051E

Membership No.: - 85155

Place : New Delhi Date : 14th May, 2012


Mar 31, 2011

We have audited the attached Balance Sheet of JK PAPER LIMITED, as at 31st March, 2011, the Profi t and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These fi nancial 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 the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free of material misstatements. 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 signifi cant 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.

1. As required by the Companies (Auditor’s Report) Order, 2003 as amended by the Companies (Auditor’s Report) (Amendment) Order, 2004 (together the ‘Order’) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 (The Act), we enclose in the Annexure a statement on the matters specifi ed in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in Paragraph 1 above, 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 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 appears from our examination of those books;

(c) The Balance Sheet, Profi t & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profi t & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956;

(e) On the basis of written representations received from the directors of the Company and taken on record by the Board of Directors, we report that none of the directors is disqualifi ed 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;

In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Accounting Policy and 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;

i) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March 2011;

ii) In the case of the Profi t & Loss Account, of the Profi t for the year ended on that date; and

iii) 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 (I) of our Report of even date of JK PAPER LIMITED for the year ended 31st March 2011)

1) (a) The Company has maintained proper records

in respect of its fixed assets showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the Management according to the programme of periodical verification in phased manner which in our opinion is reasonable having regard to the size of the Company and the nature of its Fixed Assets. The discrepancies, if any, noticed on such physical verification have been properly dealt with in the books of accounts.

(c) As per the records and information and explanations given to us, no substantial part of fixed assets has been disposed off during the year read with note no. B5 of Schedule 20.

2) (a) We have been explained by the management that the inventory has been physically verified at reasonable intervals during the year and confirmations are obtained where inventory are lying with third parties.

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

(c) In our opinion and accordingto the information and explanations given to us, the Company has maintained proper records of inventory. As far as we can ascertain and according to information and explanations given to us by the management, the discrepancies whenever material noticed on such physical verification of inventory as compared to book records were properly dealt within the books of accounts.

3) (a) As informed to us, the Company has given unsecured loan to a Company covered in the

register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year in respect of said Company is Rs 2,776.86 Lac and the year end balance of such loan is Rs 2,655.3 Lac.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms & conditions on which aforesaid loan has been given are not, prima facie, prejudicial to the interest of the Company.

(c) In respect of aforesaid loan, the repayment of principal as well as interest is regular.

(d) In respect of the loan given by the Company, no amount, principal as well as interest, is overdue and therefore provision of clause 4(iii) (d) of the order is not applicable.

(e) As informed to us, the Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (f) and (g) of the Order are not applicable to the Company.

4) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature where suitable alternative sources do not exist for obtaining comparable quotations, there is reasonable internal control system commensurate with the size of the Company (read with note no. B16 of schedule 20) and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5) (a) According to the information and explanations provided by the management and based upon audit procedures performed, we are of the opinion that the particulars of contracts or arrangements that needs to be entered into register maintained pursuant to Section 301 of the Act have been so entered; and

(b) In our opinion and according to information and explanations given to us, the transactions, made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Act and exceeding the value of fi ve lac rupees in respect of each party during the year have been made at prices which are reasonable (read with Para 4 above) having regard to prevailing market prices at the relevant time.

6) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of section 58A and 58AA or any other relevant provisions of the Act and the rules framed there under with regard to deposits accepted from the public. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

7) The Company has an internal audit system which is commensurate with the size and nature of its business.

8) We have broadly reviewed the books of account and records maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Act in respect of the Company’s products to which the said rules are made applicable 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 said records with a view to determine whether they are accurate and complete.

9) (a) According to the records of the Company,

the Company is generally regular in depositing undisputed statutory dues including Providend Fund, Investor Education and Protection Fund, Employees’ State Insurance, Sales Tax, Wealth Tax, Income Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues with the appropriate authorities and there are no undisputed statutory dues payable for a period of more than six months from the date they become payable as at 31st March 2011.

(b) According to the records and information and explanation given to us, there are no dues in respect of Wealth Tax, Service Tax and Custom Duty that have not been deposited with the appropriate authorities on account of any dispute and the dues in respect of Sales Tax, Income Tax, Excise Duty and Cess that have not been deposited with the appropriate authority on account of dispute and the forum where the dispute is pending are given below:-

Nature of Nature of Period to which Amount Forum where dispute is statute dues the amount relates Involved pending (Rs. in Lac)

Sales Tax Sales Tax 2002-03 0.73 Dy. Commissioner, Delhi Act 1 997-98/2002-07 12.11 Sales Tax Tribunal, Cuttack 2004/2005-06/ 2008 176.32 High Court, Allahabad 1983-84/1987-88 4.93 Sales Tax Deptt. Delhi 2005-2009 161.21 Addl. Commissioner- Cuttak 2009-10 10.40 Dy. Commissioner Delhi 2006-07 336.51 Joint Commisioner Appeals-Vadodra

Central Excise 1979-80/1981-82 89.20 Dy. Commissioner Excise Act Duty Central Excise Rayagada 1982-83 40.75 Supreme Court 1987-94 130.63 High Court Orrisa Cuttak 2005-07 3.01 Commissioner (Appeals)- Surat 2004-07 6.20 Addl. Commissioner- Surat 2008-09 555.00 CESTAT, Kolkata

2005-09 129.85 Commissioner (Appeals)- Surat 2009-10 6.95 Commissioner of Customs, Chennai

Income Income 2005-06 78.44 Commissioner (Appeals), Tax Act Tax Surat

2007-08 23.48 Commissioner (Appeals), Surat

Provident Provident 2006-07 28.24 High Court Orrisa Cuttak Fund Act Fund

1971-72/ 1977-78 11.60 PF Commissioner, Surat

Water Cess 2000-05/ 2010-11 49.21 Cess Appellate (PCP) Committee, Cess Act OSPCB, Bhubaneshwar

10) The Company does not have accumulated losses and has not incurred cash losses during the current year and in the immediately preceding fi nancial year.

11) In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of any dues to banks, financial institutions and debenture/bond holders.

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

13) The Company is not a chit fund or a nidhi /mutual benefit fund /society, therefore, the provisions of clause 4 (xiii) of the Order are not applicable to the Company.

14) According to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments.

15) (a) According to the information and explanations

given to us, the Company has given an undertaking to Infrastructure Development Finance Company Limited against loan given to JK Enviro-tech Limited amounting to Rs. 4,000 Lac as stated in note no. B3 (b) of schedule 20. In our opinion, the terms and conditions on which the Company has given the undertaking is not, prima facie, prejudicial to the interest of the Company.

(b) As explained to us, the Company has not given any guarantee for loans taken by others from banks and financial institution.

16) In our opinion and on the basis of information and explanations given to us, the term loans were applied for the purposes for which they were obtained.

17) According to information and explanations given to us and on an overall examination of the Balance Sheet of the Company, funds raised on short-term basis have not been used for long-term investment.

18) 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 year.

19) According to the information and explanations given to us and the records examined by us, no security or charge is required to be created in respect of the debentures/bonds issued/ outstanding as at year end.

20) The Company has not raised any money through a public issue during the year.

21) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For LODHA & CO.

Chartered Accountants

(N.K. LODHA) Partner

Firm Registration No.:- 301051E Membership No.: - 85155

Place: New Delhi Date: 29th April, 2011


Mar 31, 2010

We have audited the attached Balance Sheet of JK PAPER LIMITED, as at 31st March, 2010, the Profi t and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These fi nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these fi nancial statements based on our audit.

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 fi nancial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fi nancial statements. An audit also includes assessing the accounting principles used and signifi cant estimates made by management, as well as evaluating the overall fi nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditor’s Report) Order, 2003 as amended by the Companies (Auditor’s Report) (Amendment) Order, 2004 (together the ‘Order’) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 (The Act), we enclose in the Annexure a statement on the matters specifi ed in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in Paragraph 1 above, 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 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 appears from our examination of those books;

(c) The Balance Sheet, Profi t & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profi t & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956;

(e) On the basis of written representations received from the directors of the company and taken on record by the Board of Directors, we report that none of the directors is disqualifi ed 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;

In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with 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;

i) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March 2010;

ii) In the case of the Profi t & Loss Account, of the Profi t for the year ended on that date; and

iii) 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 (1) of our Report of even date of J.K. PAPER LIMITED for the year ended 31st March 2010)

1) (a) The Company has maintained proper records in respect of its fi xed assets showing full particulars including quantitative details and situation of fi xed assets.

(b) The fi xed assets have been physically verifi ed by the Management according to the programme of periodical verifi cation in phased manner which in our opinion is reasonable having regard to the size of the Company and the nature of its Fixed Assets. The discrepancies, if any, noticed on such physical verifi cation have been properly dealt with in the books of accounts.

(c) As per the records and information and explanations given to us, no substantial part of fi xed assets has been disposed off during the year.

2) (a) We have been explained by the management that the inventory has been physically verifi ed at reasonable intervals during the year and confi rmations are obtained where inventory are lying with third parties.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verifi cation of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventory. As far as we can ascertain and according to information and explanations given to us by the management, the discrepancies whenever material noticed on such physical verifi cation of inventory as compared to book records were properly dealt with in the books of accounts.

3) (a) As informed to us, the Company has given unsecured loan to a Company covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year in respect of said Company is Rs 2,739.27 Lac and the year end balance of such loan is Rs 2,739.27 Lac.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms & conditions on which aforesaid loan has been given are not, prima facie, prejudicial to the interest of the company.

(c) In respect of aforesaid loan, the amount of principal as well as interest is regular.

(d) In respect of the loan given by the Company, no amount, principal as well as interest, is overdue and therefore provision of clause 4(iii) (d) is not applicable.

(e) As informed to us, the Company has not taken any loan, secured or unsecured from companies, fi rms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (f) and (g) of the Order are not applicable to the Company.

4) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature where suitable alternative sources do not exist for obtaining comparable quotations, there is reasonable internal control system commensurate with the size of the Company (read with note no. B 16 of schedule 20) and the nature of its business for the purchase of inventory and fi xed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5) (i) According to the information and explanations provided by the management and based upon audit procedures performed, we are of the opinion that the particulars of contracts or arrangements that needs to be entered into register maintained pursuant to section 301 of the Act have been so entered; and

(ii) In our opinion and according to information and explanations given to us, the transactions, made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Act and exceeding the value of fi ve lac rupees in respect of each party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time (read with para 4 above).

6) In our opinion and according to the information and explanations given to us, the company has complied with the directives issued by the Reserve Bank of India and the provisions of section 58A and 58AA or any other relevant provisions of the Act and the rules framed there under with regard to deposits accepted from the public. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

7) The Company has an internal audit system which is commensurate with the size and nature of its business.

8) We have broadly reviewed the books of account and records maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Act in respect of the Company’s products to which the said rules are made applicable 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 said records with a view to determine whether they are accurate and complete.

9) (a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Providend Fund, Investor Education and Protection Fund, Employees’ State Insurance, Sales Tax, Wealth Tax, Income Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues with the appropriate authorities and there are no undisputed statutory dues payable for a period of more than six months from the date they become payable as at 31st March 2010.

(b) According to the records and information and explanation given to us, there are no dues in respect of Wealth Tax, Service Tax and Custom Duty that have not been deposited with the appropriate authorities on account of any dispute and the dues in respect of Sales Tax, Income Tax, Excise Duty and Cess that have not been deposited with the appropriate authority on account of dispute and the forum where the dispute is pending are given below:-

Nature Nature of Period to which Amount of statute dues the amount Involved relates (Rs. in Lac)

Sales Tax Sales Tax 2002-03 0.73 Act 1997-98/2002-07 12.11

2004 22.99

2005-06 14.99

2006-07 105.08

2001-02 60.10

1983-84/1987-88 4.93

Central Excise 1979-80/1981-82 89.20 Excise duty Act 1982-83 40.75

1987-94 130.63

2005-07 3.01

2004-07 8.32

Income Income 2004-05 6.98 Tax Act Tax

Provident Provident 2006-07 28.24 Fund Act Fund 1971-72/1977-78 11.60

Water Cess 2000-05/2009-10 26.99 (PCP) Cess Act

Nature of statue Forum where dispute is pending

Sales Tax Act Dy. Commissioner, Delhi Sales Ta x Tribunal, Cuttack High Court, Allahabad Dy. Commissioner, Delhi High Court, Allahabad Sales Ta x Tribunal, Chennai Commissioner Sales Tax, Delhi

Central Excise Act Commissioner Central Excise, Bhubneshwar Supreme Court High Court, Orissa Commissioner (Appeals)-Surat Addl. Commissioner-Surat

Income Tax Act Appellate Tribunal

Provident Fund Act High Court, Orissa PF Commissioner, Surat.

Water (PCP) Cess Act Cess Appellate Committee, OSPCB, Bhubneshwar

10) The Company does not have accumulated losses and has not incurred cash losses during the current year and in the immediately preceding fi nancial year.

11) In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of any dues to banks, fi nancial institutions and debenture/bond holders.

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

13) The Company is not a chit fund or a nidhi /mutual benefi t fund /society, therefore, the provisions of clause 4 (xiii) of the Order are not applicable to the Company.

14) According to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments.

15) (a) According to the information and explanations given to us, the Company has given an undertaking to Infrastructure Development Finance Company Limited against loan given to JK Enviro-tech Limited amounting to Rs. 4,000 Lac as stated in note no. B.3 (b) of schedule 20. In our opinion, the terms and conditions on which the company has given the undertaking is not, prima facie, prejudicial to the interest of the company.

(b) The Company has not given any guarantee for loans taken by others from banks & Financial Institutions, as explained to us.

16) In our opinion and on the basis of information and explanations given to us, the term loans were applied for the purposes for which they were obtained.

17) According to information and explanations given to us and on an overall examination of the Balance Sheet of the Company, funds raised on short-term basis have not been used for long- term investment.

18) 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 year.

19) According to the information and explanations given to us and the records examined by us, no security or charge is required to be created in respect of the debentures/bonds issued/ outstanding as at year end.

20) The Company has not raised any money through a public issue during the year.

21) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For LODHA & CO. Chartered Accountants

(N.K. LODHA)

Partner

Firm Registration No.:- 301051E

Membership No.: - 85155

Place: New Delhi Date: 17th May, 2010