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Auditor Report of Kay Power And Paper Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Kay Power And Paper Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, and the Statement of Profit and Loss and Cash Flow Statement for the year ended as on that date 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 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 accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 The Act, read with rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance of 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 internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITOR''S RESPONSIBILITY

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. These 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 in 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 and fair presentation 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 control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

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 31,2015,

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

(c) in the case of 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, 2015 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 paragraphs 3 and 4 of the Order.

2. As required by Section 143(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 specified under

Section 133 of the Act, read with Rule 7 of Companies (Accounts) Rules, 2014, except AS15 AS15 regarding ''Accounting for retirement benefits'' on account of non-provision for terminal benefits like gratuity payable to employees as described in the para 9 of Notes to accounts.

(e) On the basis of written representations received from the directors as on March 31, 2015 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of sub-section (2) of Section 164 of the Companies Act, 2013

(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 did not have any pending litigation having material impact on its financial position.

ii. The Company did not have any long- term contracts including derivative contracts for which there were any material foreseeable losses.

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

Annexure Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' Section of our Report of even date to the Members of Kay Power And Paper Limited for the year ended on 31st March, 2015

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

b) As per our information and explanations given to us, fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification.

2. a) According to information and explanations given to us, the inventory has been physically verified by the management during the year. In our opinion, frequency of verification is reasonable.

b) In our opinion, the procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the Company and its business.

c) The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of stocks as compared to books and records were not material.

3. In our opinion and according to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms and other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

4. In our opinion and according to information and explanations given to us there are adequate internal control procedures commensurate with the size of the Company and nature of business with regard to purchase of inventory, fixed assets and with regard to sale of goods and services. During the course of audit, we have not observed any continuing failure to correct major weakness in internal controls.

5. In our opinion and according to information and explanations given to us, the Company does not have any deposits accepted from the public during the year under audit.

6. The Company is maintaining cost records as prescribed under Section 148 (1) of the Companies Act, 2013. However, we have not verified the same for completeness or accuracy.

7. a. According to records of Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund dues and Profession tax. No amount is outstanding as at 31/3/2015 for a period more than 6 months from the date they become payable.

b. According to information and explanations given to us, no undisputed amounts payable in respect of income tax, sales tax, excise duty were in arrears as at 31/3/2015 for a period more that six months from the date they became payable except net liability of MVAT pertaining to period from financial year 2007-08 to 2014-15 amounting to Rs.486.92 Lacs which is withheld by the Company in anticipation of grant of deferral of the same under rehabilitation scheme sanction of which is awaited.

c. According to information and explanations given to us, there are no dues of income tax, sales tax, excise duty which have not been deposited on account of any dispute.

d. The company did not have any amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder during the year.

8. In our opinion, the accumulated loss of the Company is Rs.1443.86 Lakhs as on 31/3/2015 and is more than its total net worth. The Company has not incurred cash losses during the financial year covered by our audit and during the immediately preceding financial year. The accumulated losses have totally eroded the net worth of the Company and reference has been made to the Board for Industrial and Financial Reconstruction (BIFR).

9. In our opinion and according to information and explanations given to us, the Company had defaulted in repayment of dues to IREDA earlier and it has made agreement for One Time settlement scheme for the repayment of the loan taken from IREDA. The Company has paid all instalments due as per scheme of OTS sanctioned by IREDA during the year.

10. As informed to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

11. According to information and explanations given to us no term loans were obtained during the year.

12. According to information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of audit.

For GODBOLE & COMPANY Chartered Accountants

Place : Satara Ashutosh Godbole Date : 28th May, 2015 Proprietor Mem. No. 104822 FRN : 117969W


Mar 31, 2014

We have audited the accompanying financial statements of Kay Power And 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 ended as on that date and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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 in 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, 2014,

(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 comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, except non-compliance AS15 regarding Accounting for retirement benefits on account of non-provision for terminal benefits like gratuity payable to employees. (Refer para. (9) in note 1 to the financial statements.)

(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 Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' Section of our Report of even date to the Members of Kay Power And Paper Limited for the year ended on 31st March, 2014

1. a) The Company has maintained proper

records showing full particulars including quantitative details and situation of the fixed assets.

b) As per our information and explanations given to us, fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification.

c) During the year, the Company has not disposed off major part of the fixed assets.

2. a) According to information and

explanations given to us, the inventory has been physically verified by the management during the year. In our opinion, frequency of verification is reasonable.

b) In our opinion, the procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the Company and its business.

c) The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of stocks as compared to books and records were not material

3. a) In our opinion and according to the

information and explanations given to us, the Company has taken loans from five parties covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.1631.12 Lakhs and year-end balance of loans taken from such parties was Rs.1631.12 Lakhs. The Company has not granted any loans to parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) In our opinion, the terms and conditions subject to which these loans are taken are not prima facie prejudicial to the Company.

c) The Company is not paying any interest on these loans. We are unable to comment on the regularity of principal amount, as the repayment period is not stipulated.

4. In our opinion and according to information and explanations given to us there are adequate internal control procedures commensurate with the size of the Company and nature of business with regard to purchase of inventory, fixed assets and with regard to sale of goods. During the course of audit, we have not observed any continuing failure to correct major weakness in internal controls.

5. a. In our opinion and according to information and even to us transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five Lacs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to information and explanations given to us, the Company does not have any deposits accepted from the public covered u/s 58-A during the year under audit.

7. The Company did not have any formal internal audit system during the year under review. However, its internal control procedure involved reasonable checking of its financial records.

8. We have broadly reviewed the accounts 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 Companies Act, 1956. We are of the opinion that prime facie the prescribed accounts and records have been made and maintained.

9. a. According to records of Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund dues and Profession tax. No amount is outstanding as at 31/3/2014 for a period more than 6 months from the date they become payable.

b. According to information and explanations given to us, no undisputed amounts payable in respect of income tax, sales tax, excise duty were in arrears as at 31/3/2014 for a period more that six months from the date they became payable except net liability of VAT pertaining to period from financial year 2007-08 to 2013-14 amounting to Rs.353.64 Lacs which is withheld by the Company in anticipation of grant of deferral of the same under rehabilitation scheme sanction of which is awaited.

c. According to information and explanations given to us, there are no dues of income tax, sales tax, excise duty which have not been deposited on account of any dispute.

10. In our opinion, the accumulated loss of the Company is Rs.1464.61 Lakhs as on 31/3/ 2014 and is more than its total net worth. The Company has not incurred cash losses during the financial year covered by our audit and during the immediately preceding financial year. The accumulated losses have totally eroded the net worth of the Company and reference has been made to the Board for Industrial and Financial Reconstruction (BIFR).

11. In our opinion and according to information and explanations given to us, the Company had defaulted in repayment of dues to IREDA and the company has reached One Time settlement for the repayment of the loan taken from IREDA.

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

13.In our opinion, the Company is not a chit fund or a nidhi mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

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

15.In our opinion, the terms and conditions on which the Company has given guarantees for loans taken by banks or financial institutions are not prejudicial to the interests of the Company.

16.According to information and explanations given to us no term loans were obtained during the year.

17.According to information and explanations given to us and an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment. No long term funds have been used to finance short term assets except permanent working capital.

18.According to information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act 1956.

19.The Company has not issued any debentures during the year under audit.

20.The Company has not raised money by public issue during the year under audit.

21.According to information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of audit.

For GODBOLE & COMPANY Chartered Accountants

Place : Satara Ashutosh Godbole Date : 28th May, 2014 Proprietor Mem. No. 104822 FRN : 117969W


Mar 31, 2013

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of Kay Power And 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 ended and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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 comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, except AS15 regarding Accounting for retirement benefits which are not complied with. (Refer Para. (9) in Note 1 to the Financial Statements)

(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.

Annexure Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' Section of our Report of even date to the Members of Kay Power And Paper Limited for the year ended on 31st March, 2013

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

b) As per our information and explanations given to us, fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification.

c) During the year, the Company has not disposed off major part of the fixed assets.

2. a) According to information and explanations given to us, the inventory has been physically verified by the management during the year. In our opinion, frequency of verification is reasonable.

b) In our opinion, the procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the Company and its business.

c) The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of stocks as compared to books and records were not material.

3. a) In our opinion and according to the information and explanations given to us, the Company has taken loans from five parties covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.1536.12 Lakhs and year-end balance of loans taken from such parties was Rs.1536.12 Lakhs. The Company has not granted any loans to parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) In our opinion, the terms and conditions subject to which these loans are taken are not prima facie prejudicial to the Company.

c) The Company is not paying any interest on these loans. We are unable to comment on the regularity of principal amount, as the repayment period is not stipulated.

4. In our opinion and according to information and explanation given to us there are adequate internal control procedures commensurate with the size of the Company and nature of business with regard to purchase of inventory, fixed assets and with regard to sale of goods. During the course of audit, we have not observed any continuing failure to correct major weakness in internal controls.

5. a. In our opinion and according to information and explanation given to us transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five Lacs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to information and explanations given to us, the Company does not have any deposits accepted from the public covered u/s 58-A during the year under audit.

7. The Company did not have any formal internal audit system during the year under review. However, its internal control procedure involved reasonable checking of its financial records.

8. We have broadly reviewed the accounts 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 Companies Act, 1956. We are of the opinion that prime facie the prescribed accounts and records have been made and maintained.

9. a. According to records, Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund dues and Professional tax. No amount is outstanding as at 31/3/ 2013 for a period more than 6 months from the date they become payable.

b. According to information and explanations given to us, no undisputed amounts payable in respect of income tax, sales tax, excise duty were in arrears as at 31/3/2013 for a period more than six months from the date they became payable except net liability of VAT pertaining to period from financial year 2007-08 to 2011-12 amounting to Rs.231.38 Lacs which is withheld by the company in anticipation of grant of deferral of the same under rehabilitation scheme sanction of which is awaited.

c. According to information and explanation given to us, there are no dues of income tax, sales tax, excise duty which have not been deposited on account of any dispute.

10. In our opinion, the accumulated loss of the company is Rs.1471.29 Lakhs as on 31/3/ 2013 and is more than its total net worth. The Company has not incurred cash losses during the financial year covered by our audit and during the immediately preceding financial year. The accumulated losses have totally eroded the net worth of the Company and reference has been made to the Board for Industrial and Financial Reconstruction (BIFR).

11. In our opinion and according to information and explanation given to us, the Company had defaulted in repayment of dues to IREDA and has reached One Time settlement for the same.

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

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

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

15. In our opinion, the terms and conditions on which the Company has given guarantees for loans taken by banks or financial institutions are not prejudicial to the interests of the Company.

16. According to information and explanations given to us no term loans were obtained during the year.

17. According to information and explanations given to us and an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment. No long term funds have been used to finance short term assets except permanent working capital.

18. According to information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures during the year under audit.

20.The Company has not raised money by public issue during the year under audit.

21. According to information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of audit.

For GODBOLE & COMPANY

Chartered Accountants

Place : Satara Ashutosh Godbole

Date : 30-5-2013 Proprietor

Mem. No. 104822

FRN : 117969W


Mar 31, 2012

1. We have audited the attached Balance Sheet of Kay Power And Paper Limited as at 31s1 March, 2012 and the Statement of Profit and Loss and Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the annexure referred to in paragraph 3 above.:

a) We have obtained all the information and explanation 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 the law have been kept by the Company so far as it appears from our examination of the books.

c) The Balance Sheet, the 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 and the statement of Profit and Loss are in compliance with Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except AS15 regarding Accounting for retirement benefits which are not complied with. (Refer sub Note No.9 in Note 1 of the notes to financial statements.)

e) Based on representations received from Directors of the Company and the information and explanations given to us, none of the Directors of the Company are prima facie, as at 31st March 2012, disqualified from being appointed as directors of the Company in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to explanation given to us, the said account read together with the Significant Accounting Policies and Notes to Financial Statements and those appearing elsewhere in the accounts, give information required by the Companies Act, 1956 in the manner so required and give true and fair view in conformity with the accounting principles generally accepted in India :

i) in the case of the Balance sheet, of the state of affairs of the company as at 31st March, 2012

ii) in case of the Statement of Profit and Loss of the profit for the year ended on that date.

iii) In case of Cash Flow Statement, of cash flows for the year ended as on that date.

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

b) As per our information and explanations given to us, fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification.

c) During the year, the Company has not disposed off major part of the fixed assets.

2. a) According to information and explanations given to us, the inventory has been physically verified by the management during the year. In our opinion, frequency of verification is reasonable.

b) In our opinion, the procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company is maintaining proper records of inventory. The discrepancies noticed on physical verification of stocks as compared to books and records were not material.

3. a) In our opinion and according to the information and explanations given to us, the company has taken loans from five parties covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.1358.08 Lac and year end balance of loans taken from such parties was Rs. 1358.08 Lac. The company has not granted any loans to parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) In our opinion, the terms and conditions subject to which these loans are taken are not prima facie prejudicial to the company.

c) The company is not paying any interest on these loans. We are unable to comment on the regularity of principal amount, as the repayment period is not stipulated.

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

5. a. In our opinion and according to information and explanations given to us transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to information and explanations given to us, no transactions were made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupees five lac.

6. In our opinion and according to information and explanations given to us, the company does not have any deposits accepted from the public covered u/s 58-A during the year under audit.

7. The company did not have any formal internal audit system during the year under review. However, it's internal control procedure involved reasonable checking of it's financial records.

8. We have broadly reviewed the accounts 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 Companies Act, 1956. We are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9. a. According to records, Company is not regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund dues and Profession Tax. The payment of these dues was made late. However, no amount is outstanding as at 31/3/2012 fora period more than 6 months from the date they became payable.

b. According to information and explanations given to us, no undisputed amounts payable in respect of income tax, sales tax, excise duty were in arrears as at 31/3/2012 for a period more that six months from the date they became payable except net liability of VAT pertaining to period from financial year 2007-08 to 2010-11 amounting to Rs.150.10 Lac which is withheld by the company in anticipation of grant of deferral of the same under rehabilitation scheme sanction of which is awaited.

c. According to information and explanations given to us, there are no dues of income tax, sales tax, excise duty which have not been deposited on account of any dispute.

10. In our opinion, the accumulated losses of the company are Rs.1477.32 Lac as on 31/3/2012 is more than its total net worth. The company has not incurred cash losses during the financial year covered by our audit and during the immediately preceding financial year. The accumulated losses have totally eroded the net worth of the company and reference has been made to the Board for Industrial and Financial Reconstruction (BIFR).

11. In our opinion and according to information and explanations given to us, the company had defaulted in repayment of dues to IREDA and has reached One Time settlement for the same.

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

13. In our opinion, the company is not a chit fund or a nidhi mutual benefit fund/society.

Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

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

15. In our opinion, the terms and conditions on which the Company has given guarantees for loans taken by others, from banks or financial institutions are not prejudicial to the interests of the Company.

16. According to information and explanations given to us no term loans were obtained during the year.

17. According to information and explanations given to us and an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment. No long term funds have been used to finance short term assets except permanent working capital.

18. According to information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act 1956.

19.The Company has not issued any debentures during the year under audit.

20. The Company has not raised money by public issue during the year under audit.

21. According to information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of audit.

For GODBOLE & COMPANY

Chartered Accountants

Place : Satara Ashutosh Godbole

Date : 30th May, 2012 Proprietor

Mem. No. 104822

FRN: 117969W

 
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