Auditor Report of Magnum Ventures Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of M/s MAGNUM VENTURES LIMITED("The Company")which comprise the Balance Sheet as at March 31, 2015 and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

MANAGEMENT RESPONSIBILTY:

The Company's Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITOR'S RESPONSIBILITY:

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made 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 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 the 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 on the financial statements.

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(subject to the matters of emphasis mentioned below) 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 March 31, 2015;

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

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

EMPHASIS OF MATTERS

We draw attention to the following observations:

a) Debtors includeRs. 2348.49 lakhs which are due for more than six months out of which Debtors of Rs. 110.13 lacs are under litigations.No provisionfor doubtful debtshas been created by the company.Had the provision been made, the loss for the year would have been higher with that amount and debtors would have been lower with the same amount.

b) No provisions has been made by the Company for outstanding claims receivable from it suppliers for Rs. 1394.88 lacs (previous year 232.08). As per the management, same have not been accepted by the suppliers. In our opinion, the raw material consumption for the year is lowered by Rs. 1195.00 lacs (previous year Nil).Had the provision been made on such outstanding claims receivable, the Loss for the year would have been more by Rs. 1394.88 lacsand the Accumulated Losses would have also been higher by the same amount. (Refer Note No.11 under other notes in Notes to Accounts annexed with the financial statements for the year ended March 31, 2015 )

c) No provisions has been made against zero coupon Debentures issued by the Company to its lender in terms of the CDR package approved by the CDR EG

on 24th December 2014 of Rs. 3412.00 lacs to be redeemed on 31.03.2026. Had a proportionate provision of Rs. 262.46 lacsfor the year been made in the books, the Loss for the year would have been higher by that amount and the Accumulated Losses would have also been higher by the identical amount. (Refer Note No. 16 under other notes in Notes to Accounts annexed with the financial statements for the year ended March 31, 2015)

d) Balances of Debtors & Creditors are subject to confirmation and reconciliation consequential effect (if any) on the account remained unascertained

e) The company has shown Term Loans and Interest accrued on them as per there CDR package. However, CDR package as informed to us is yet to be implemented. In absence of the details of interest accrued etc. the consequential effect of the same remains unascertained

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS:

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") as required by Companies Act,2013 and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we annex hereto a statement on the matters specified in said Order.

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 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 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 31 March, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the other matters included in the Auditor's Report and to our 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 27 Part B (1) to the financial statements.

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

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

ANNEXURE REFERRED TO IN OUR AUDIT REPORT OF EVEN DATE OF M/S MAGNUM VENTURES LIMITED, PURSUANT TO THE COMPANIES (AUDITORS' REPORT) ORDER 2015 ON THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015

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

(b)As explained to us, most of the fixed assets have been physically verified by the management during the year and as per the explanations and information given to us, there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. As explained to us discrepancies noticed on physical verification were not significant and have been properly dealt with in the books of accounts.

(c) During the year, the Company has not disposed off any part of the fixed assets, which will have the effect on the going concern of the company.

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

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) As explained and based on the information given to us, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. (a) The Company has neither granted nor taken any loan, secured or unsecured, to/from companies, firms or other parties covered in the Register maintained under section 189 of the Companies Act. 2013.

iv. In our opinion and according to the information and explanations given to us, the company does not have an adequate internal control system commensurate with the size of company and the nature of its business with regard to purchase of inventory, fixed assets, and with regard to the sale of goods as they are unable to collect their sale proceeds and also not able to recover their claims against their rejection in purchase of inventory.

v. In our opinion and according to the information and explanation given to us, the company has not accepted any deposits, hence provisions of section 73 to 76 or any other relevant provisions of the Company Act does not applicable.

vi. The Company hasprepared and maintained cost records as prescribed by the Central Government under sub-section (1) of section 148 of the companies Act 2013.

vii (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employee's state insurance, income tax, sales tax, wealth tax, custom duty, excise-duty, cess and other statutory dues applicable to it.

(b) According to the records of the Company, there are following dues of Central Excise Department as on March 31, 2015 which have not been deposited on account of disputes : -

* Rs. 26,135 (Plus Interest and Penalty) for the period September 2010 to April 2011.

* Rs. 1,73,115 (Plus Interest and Penalty) for the period February 2009 to August 2010.

* Rs. 1,58,816 (Plus Interest and Penalty) for the period F/Y2004-05 to F/Y 2007-08.

However, the Company has filed an appeal against the above order before Hon'ble CESTAT which is still pending for adjudication.

(c) According to the information and explanation given to us by the management, no amount is pending to be transferred to Investor Education And Protection Fund in accordance with the relevant provision of the Companies Act, 1956 (1 of 1956) and rules made thereunder.

viii. The Accumulated losses at the end of the financial year March 31, 2015 are more than the Net Worth of the company. The company has incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

ix. As explained and informed to us by the management, An 2nd Rework Package was approved by Corporate Debt Restructuring Executive Group Committee (CDR EG) on 24th December 2013 vide its Letter of Approval No. 863 Dated 30th December 2013. As per CDR Circular, the package should have been implemented within 120 days i.e. by April 23, 2014 by all the banks without waiting for their individual sanctions for the re-structuring package. However banks waited for sanction from the authorities and the MRA & other documents were signed on 31st July 2014 and implementation of package in the system by Banks is still pending.

x. Based on the records and information obtained by us, we report that the Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the company.

xi. Based on the records, we report that the Company has not availed any term loan during the year.

xii. To the best of our knowledge and according to information and explanations given to us, no fraud on or by the Company has been noticed and reported during the year.

For Aggarwal & Rampal Chartered Accountants F.R.No.003072N

S/d Vinay Aggarwal Partner M.No.082045

Place: New Delhi Date:May 4, 2015

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Mar 31, 2014

(FORMERLY KNOWN AS ''MAGNUM PAPERS LIMITED'')

We have audited the accompanying financial statements of M/S MAGNUM VENTURES LIMITED (FORMERLY KNOWN AS ''MAGNUM PAPERS LIMITED'') ("The Company") which comprise the Balance Sheet as at March 31, 2014 and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

MANAGEMENT RESPONSIBILTY:

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. 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 of material misstatement.

An audit involves performing procedures to obtain 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 the 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 subject to Note no 27(B) with regard to No provisions has been made on the contingent liabilities.

i) In the case of Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

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

iii) 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") as amended by the Companies (Auditors'' Report) (Amendment) Order,2004, issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Companies Act,1956 and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. As required by section 227(3) of the Companies Act, 1956, 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, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

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

e) On the basis of the 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, 2013from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441a of the Companies Act, 1956, nor has it issued any rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the company.

g) The company had whole-time Company Secretary as required by section 383A of The Companies Act 1956, who resigned on 16th April 2014. As per Section 203(4) of The Companies Act 2013, the vacancy shall be filled up by the Board within a period of Six Months from the Date of Resignation. As informed to us the company is in the process of appointing a whole time Company Secretary.

i. (a) The Company has not updated its records of fixed assets showing full particulars including quantitative details and situation of Fixed Assets.

(b) As explained to us, most of the fixed assets have been physically verified by the management during the year and as per the explanations and information given to us, there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. As explained to us discrepancies noticed on physical verification were not significant and have been properly dealt with in the books of accounts. However, the verification report of Fixed Assets has not been provided to us for verification.

(c) During the year, the Company has not disposed off any part of the fixed assets, which will have the effect on the going concern of the company.

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

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) As explained and based on the information given to us, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. (a) The Company has neither granted nor taken any loan, secured or unsecured, to/from companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act. 1956.

iv. In our opinion and according to the information and explanations given to us, the company has a system of internal control and its evaluation on regular basis to strengthen it, in order to make it commensurate with the size of company and the nature of its business with regard to purchase of inventory, fixed assets, and with regard to the sale of goods

v. (a) Based on the audit procedure applied by us and according to the information and explanations provided by the management, we are of the opinion that the company has entered all transactions that need to be entered in the register maintained under section 301 of the Companies Act, 1956.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the registers maintained under section 301 and exceeding the value of five lakhs rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant times.

vi. In our opinion and according to the information and explanations given to us, the company has not accepted any Deposits as defined within the meaning of Sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules 1975 .

vii. The Company has an in house internal audit system which does not commensurate with the size and nature of its business and it further needs to be strengthened.

viii. The Company has prepared and maintained cost records as prescribed by the Central Government under section 209 (1) (d) of the Companies Act, 1956.

ix (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employee''s state insurance, income tax, sales tax, wealth tax, custom duty, excise-duty, cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty and excise duty were outstanding, as at March 31, 2014 for a period of more than six months from the date they became payable.

According to the records of the Company, there are following dues of Central Excise Department as on March 31, 2014 which have not been deposited on account of disputes : -

- Rs. 26,135 (Plus Interest and Penalty) for the period September 2010 to April 2011.

- Rs. 1,73,115 (Plus Interest and Penalty) for the period February 2009 to August 2010.

- Rs. 1,58,816 (Plus Interest and Penalty) for the period F/Y 2004-05 to F/Y 2007-08.

However, the Company has filed an appeal against the above order before Hon''ble CESTAT which is still pending for adjudication.

x. The Company does not have any accumulated losses. Further it has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

xi. As explained and informed to us by the management, Due to External Factors, the Company was irregular in payment of its obligations to Financial Institutions, or Banks. Subsequently, the Financial Institutions, or Banks agreed to re-structure the debts along with concession in rate of interest and Re- Structuring Package approved by Corporate Debt Restructuring Executive Group Committee (CDR EG) in its meeting on 24h December 2013 vide its Letter of Approval No. 863 Dated 30th December 2013.

xii. Based on the records, we report that the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. The Company is not a chit fund company or mutual fund / Society, thus the provisions of this Para are not applicable.

xiv. The Company does not deal in Shares or Debentures.

xv. The Company has not given any guarantee for loans taken by others from bank or financial institutions.

xvi. The Company has not availed any term loan during the year.

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

xviii. As explained and informed to us by the management and upon our examination of records we report that 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.

xix. During the period covered by our audit report, The Board of Directors of the Company had allotted 341200 Non-Convertible, Non-Cumulative Redeemable Debentures of face value of Rs. 1000/- each at par payable on 31-03-2026 as per the CDR Terms and Conditions. .

xx. During the financial year, the Company did not raise any money by public issue.

xxi. To the best of our knowledge and according to information and explanations given to us, no fraud on or by the Company has been noticed and reported during the year.

For Aggarwal & Rampal Chartered Accountants F.R.No.003072N

Sd/- Vinay Aggarwal Partner M.No.082045

Place: New Delhi Date : 30/05/2014

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Mar 31, 2013

1. We have audited the accompanying financial statements of MAGNUM VENTURES LIMITED, which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

2. Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. 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.

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

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

6. 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 Profit and Loss Account, 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.

7. 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 Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

8. As required by section 227(3) of the Act, we report that:

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

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

(c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account

(d) in our opinion, subject to Sub Note (A)12 of Note 27 regarding non compliance with Accounting Standard – 15 in respect of Employee benefits issued by Institute of Chartered Accountants of India, 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;

(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.

(f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

AUDITOR''S REPORT UNDER CARO 2003 FOR THE YEAR ENDED 31.3.2013

i) In respect of its fixed assets:

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

b) The management at reasonable intervals has physically verified all the fixed assets. As reported to us, by the management, no material discrepancy was noticed on such verification.

c) According to the information and explanations given to us, no substantial part of fixed assets has been disposed off by the company during the year & the going concern status of the company is not affected

ii ) In respect of its inventories:

a) The Inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b) The procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and nature of its business.

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

iii) (a) The Company taken interest free unsecured Loan from Eighteen parties covered in register maintained U/S 301 of the Companies Act 1956.The maximum Amount involved during the year was Rs. 361134771.24 /- & Year-end balances was Rs. 109723771.24

(b) The Company has not granted unsecured loans to any party listed in the register maintained under section 301 of the Companies Act, 1956.

(c) The terms and conditions are not prima facie prejudicial to the interest of the company.

(d) Being the term of repayments have not been stipulated, we are unable to comment whether the repayment of principal amount is regular or not.

(e) Being the term of repayments have not been stipulated, we are unable to comment whether there is any due amount of more than one lac rupees or not.

iv) In our opinion and according to information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and nature of the business for the purchase of Inventory, fixed assets and for sale of goods and services. Further, on the basis of our examination of the books and records of the company, and according to the information and explanations given to us, we have neither come across nor have been information of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

v) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act 1956 have been so entered.

The company has not entered into any transaction exceeding Rs.5 lacs in respect of any party hence further reporting is not applicable for the company.

vi) The company has not accepted any deposit in terms of section 58A, 58 AA or any other relevant provisions of the Companies Act, 1956.

vii) In our opinion the company is having an adequate internal audit system, commensurate with its size and nature of the business.

viii) The Central Govt. has prescribed for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, in respect of the Paper products of the company & company has maintained accounting records as prescribed. We have relied upon the certificate issued by the cost accountant in this regard.

ix) In respect of statutory dues:

According to the records of the company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employee''s state insurance, income tax, sales tax, wealth tax, service tax, custom duty, cess and other material statutory dues applicable to it.

x) In our opinion there is no accumulated loss of the company. The Company has not incurred any cash losses (EBIDTA) during the period covered by our audit and the immediately preceding financial year.

xi) According to the records of the company examined by us and the information and explanations given by the management, the company has not defaulted in repayment of dues to any financial institution or Bank. xii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, so the question of maintenance of records does not arise.

xiii) In our opinion, the company is not a chit fund or nidhi/mutual benefit fund society. Hence this clause is not applicable to the Company

xiv) In our opinion and according to the information and explanations given to us, the company is not a dealer or trader in shares, securities debentures and other investments. Accordingly, the provision of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not Applicable to the Company

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

xvi) Based on the information and explanation given to us and on an overall examination of balance sheet of the company, in our opinion, term loans were applied for the purpose for which the loans were obtained.

xvii) According to the information and explanation given to us and on an overall examination of the Balance – sheet of the Company, we report that no funds raised on the short-term basis have been used for the Long term Investment

xviii) During the year the company had allotted 2500000 Redeemable and Non-Cumulative Preference Shares of Face Value of Rs. 100/- each at par to parties covered in the registered maintained U/S 301 of the Act;

xix) As the company has not issued any debenture this clause is not applicable

xx) During the year the company has not raised any money from the public issues hence this clause is not applicable

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

For SUNIL K. MITTAL & CO.,

CHARTERED ACCOUNTANTS,

Firm Reg No. 008524N

Sd/-

Place: New Delhi. (Sunil Kumar Jain)

Dated: 25/05/2013 Proprietor

Membership No. 84125

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Mar 31, 2012

We have audited the attached Balance Sheet of MAGNUM VENTURES LIMITED (Previously Known as Magnum Papers Limited) as at 31.03.2012 and also the Profit and Loss account and the cash flow statement for the period ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

As required by the Companies (Auditor’s Report) Order, 2003 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 paragraph 4 and 5 of the said Order.

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

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

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

(iii) The Balance Sheet, profit and loss account and cash flow statement dealt by this report are in agreement with the books of account;

(iv) In our opinion, Subject to Note 12 of Schedule XIX regarding non compliance with Accounting Standard - 15 in respect of Employee benefits issued by Institute of Chartered Accountants of India, the Balance Sheet and the Profit and Loss Account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub section (3C) of section 211 of the Company Act, 1956;

(v) On the basis of written representations received from the directors, as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to explanation given to us, the said accounts, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March , 2012;

b) in the case of Profit & Loss Account, of the Loss for the period ended on 31st March 2012; and

c) in the case of the cash flow statement, of the cash flows for the period ended on 31st March 2012.

ANNEXURE TO AUDITOR'S REPORT

MAGNUM VENTURES LIMITED

(Previously Known as Magnum Papers Limited)

AUDITOR'S REPORT UNDER CARO 2003 FOR THE YEAR ENDED 31.3.2012

i) In respect of its fixed assets:

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

b) The management at reasonable intervals has physically verified all the fixed assets. As reported to us, by the management, no material discrepancy was noticed on such verification.

c) According to the information and explanations given to us, no substantial part of fixed assets has been disposed off by the company during the year & the going concern status of the company is not affected

ii ) In respect of its inventories:

a) The Inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b) The procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and nature of its business.

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

iii) a) The company has taken interest free unsecured loan from the parties listed in the register maintained under section 301 of the Companies Act 1956

S. Name Amount of Maximum amount Closing No. Loan Taken Outstanding Balanc (Cr)

1. Abhey Jain 57,40,817.00 68,59,182.74 50,00,000.00 2. Asha Jain 40,510.00 25,80,243.69 25,80,243.69

3. Monika Jain 2,50,00,000.00 2,50,77,654.95 2,49,21,654.95

4. Pardeep Kumar 1,00,00,000.00 2,11,80,905.53 1,73,80,905.53 Jain

5. Rishab Jain 33,619.83 21,71,203.04 21,71,203.04

6. Rita Jain 27444.34 14,01,998.11 14,01,998.11

7. Veena Jain 40272.96 31,08,532.54 19,08,532.54

b) The Company has not granted unsecured loan to parties covered under section 301 of the

Companies Act 1956.

c) Being the term of repayments have not been stipulated, we are unable to comment whether the repayment of principal amount is regular or not.

d) Being the term of repayments have not been stipulated, we are unable to comment whether there is any due amount of more than one lacs rupees or not.

iv) In our opinion and according to information and explanations given to us, there is adequate

internal control system commensurate with the size of the Company and nature of the business for the purchase of Inventory, fixed assets and for sale of goods and services. Further, on the basis of our examination of the books and records of the company, and according to the information and explanations given to us, we have neither come across nor have been information of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

v) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act 1956 have been so entered. The company has not entered into any transaction exceeding Rs.5 lacs in respect of any party hence further reporting is not applicable for the company.

vi) The company has not accepted any deposit in terms of section 58A, 58 AA or any other relevant provisions of the Companies Act, 1956.

vii) In our opinion the company is having an adequate internal audit system, commensurate with its size and nature of the business.

viii) The Central Govt. has prescribed for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, in respect of the Paper products of the company & company has maintained accounting records as prescribed. We have relied upon the certificate issued by the cost accountant in this regard.

ix) In respect of statutory dues:

According to the records of the company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employee's state insurance, income tax, sales tax, wealth tax, service tax, custom duty, cess and other material statutory dues applicable to it.

According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Service tax, Sales Tax, Custom Duty, and Excise Duty were in arrears, as at 31.03.2012 for a period more than six months from the date, they became payable.

According to information and explanations given to us, there are no dues of sales tax, income tax, customs duty, wealth tax, service tax, excise duty and cess which have not been deposited on account of any dispute subject to the following: -

Period to Name of the Name of Amount which the statue the dues (in Rs) amount relate



Custom & Cenvat Rs. 828510/- Central Excise

Custom & Excise Duty 2097503/- 2005-06 Central On Excise Loss

Excise Law Duty on 158816/-(Plus 01-04-08 to Kachra Interest) 15-01-09 (Waste)

Income Tax Income Tax 0.78 crores 2007-08 Act, 1961

Name of the Sttus / Forum where statue dispute is pending



Custom & Custom & Central Excise Central Credit Deptt has filed appeal in Excise Allahabad High Court.

Custom & Addl. Commissioner of Central Excise Show Cause Excise Production Notice pending not yet decided

Excise Law Matter pending before Tribunal not yet decided

Income Tax ITAT Act, 1961

x) In our opinion there is no accumulated loss of the company. The Company has not incurred any cash losses (EBIDTA) during the period covered by our audit and the immediately preceding financial year.

xi) According to the records of the company examined by us and the information and explanations given by the management, the company has not defaulted in repayment of dues to any financial institution or Bank.

xii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, so the question of maintenance of records does not arise.

xiii) In our opinion, the company is not a chit fund or nidhi/mutual benefit fund society. Hence this clause is not applicable to the Company

xiv) In our opinion and according to the information and explanations given to us, the company is not a dealer or trader in shares, securities debentures and other investments. Accordingly, the provision of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not Applicable to the Company

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

xvi) Based on the information and explanation given to us and on an overall examination of balance sheet of the company, in our opinion, term loans were applied for the purpose for which the loans were obtained.

xvii) According to the information and explanation given to us and on an overall examination of the Balance -sheet of the Company, we report that no funds raised on the short-term basis have been used for the Long term Investment

xviii) There were no preferential allotment of shares to parties and companies covered in the registered maintained U/S 301 of the Act; hence this clause is not applicable xix) As the company has not issued any debenture this clause is not applicable xx) During the year the company has not raised any money from the public issues hence this clause is not applicable

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



For SUNIL K. MITTAL & CO., CHARTERED ACCOUNTANTS, Firm Reg No 008524N

Sd/- (Sunil Kumar Jain) Proprietor Membership No. 84125

Place: New Delhi. Dated: 29/05/2012

---

Mar 31, 2010

We have audited the attached Balance Sheet of MAGNUM VENTURES LIMITED (Previously Known as Magnum Papers Limited) as at 31.03.2010 and also the Profit and Loss account and the cash flow statement for the period ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

As required by the Companies (Auditors Report) Order, 2003 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 paragraph 4 and 5 of the said Order.

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

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

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

(iii) The Balance Sheet, profit and loss account and cash flow statement dealt by this report are in agreement with the books of account;

(iv) In our opinion, Subject to Note 12 of Schedule XIX regarding non compliance with Accounting Standard – 15 in respect of Employee benefits issued by Institute of Chartered Accountants of India, the Balance Sheet and the Profit and Loss Account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub section (3C) of section 211 of the Company Act, 1956;

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

(vi) In our opinion and to the best of our information and according to explanation given to us, the said accounts, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March , 2010;

b) in the case of Profit & Loss Account, of the Loss for the period ended on 31st March 2010; and

c) in the case of the cash flow statement, of the cash flows for the period ended on 31st March 2010.

Annexure to Auditors Report i) In respect of its fixed assets:

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

b) The management at reasonable intervals has physically verified all the fixed assets. As reported to us, by the management, no material discrepancy was noticed on such verification.

c) According to the information and explanations given to us, no substantial part of fixed assets has been disposed off by the company during the year & the going concern status of the company is not affected.

ii ) In respect of its inventories:

a) The Inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b) The procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and nature of its business.

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

iii) a) The company has taken unsecured loan from the parties listed in the register maintained under section 301 of the Companies Act 1956 & has provided interest @ 6 % p.a. except to Sh Praveen Jain & Smt. Priyanka Jain on which no interest has been paid.

S.No. Name Amount of Maximum Closing

Loan taken amount o/s balance (cr.)

1 Abhay jain 218848.00 1964471.74 1889182.74

2 Abhay jain HUF 142097.00 2449027.51 2449027.51

3 Asha jain 147495.00 2539733.69 2539733.69

4 Monika jain 104902.00 156574.95 77654.95

5 Pardeep jain 249217.00 1066020.53 980905.53

6 Parmod jain 302898.00 336183.28 64927.28

7 Parveen jain 51293627.00 204486824 204136824

8 Ritesh jain 218308.00 1950612.62 1888362.62

9 Salek chand jain HUF 147305.00 2538793.41 2538793.41

10 Salek chand jain 213943.00 3744161.76 3538529.76

11 Veena jain 178699.00 3068259.58 3068259.58

12 Vinod jain 221999.00 593749.17 520951.17

13 Shilpi Jain 99471.00 1714380.00 1714380.00

14 Vinod jain HUF 129940.00 2239507.79 2239507.79

15 Rita jain 79899.00 1374553.77 1374553.77

16 Pardeep jain (HUF) 110456.00 1903692.32 1903692.32

17 Parmod jain (HUF) 129804.00 2237165.90 2237165.90

19 Rishab jain 265854.00 2137583.21 2137583.21

20 Parv jain 97698.00 1683814.00 1683814.00



b) The Company has not granted unsecured loan to parties covered under section 301 of the Companies Act 1956.

c) Being the term of repayments have not been stipulated, we are unable to comment whether the repayment of principal amount is regular or not.

d) Being the term of repayments have not been stipulated, we are unable to comment whether there is any due amount of more than one lacs rupees or not.

iv) In our opinion and according to information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and nature of the business for the purchase of Inventory, fixed assets and for sale of goods and services. Further, on the basis of our examination of the books and records of the company, and according to the information and explanations given to us, we have neither come across nor have been information of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

v) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act 1956 have been so entered.

The company has not entered into any transaction exceeding Rs. 5 lacs in respect of any party hence further reporting is not applicable for the company.

vi) The company has not accepted any deposit in terms of section 58A, 58 AA or any other relevant provisions of the Companies Act, 1956.

vii) In our opinion the company is having an adequate internal audit system, commensurate with its size and nature of the business.

viii) The Central Govt. has prescribed for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, in respect of the Paper products of the company & company has maintained accounting records as prescribed. We have relied upon the certificate issued by the cost accountant in this regard.

ix) In respect of statutory dues:

According to the records of the company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, cess and other material statutory dues applicable to it.

According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Service tax, Sales Tax, Custom Duty, and Excise Duty were in arrears, as at 31.03.2010 for a period more than six months from the date, they became payable.

According to information and explanations given to us, there are no dues of sales tax, income tax, customs duty, wealth tax, service tax, excise duty and cess which have not been deposited on account of any dispute subject to the following:

Name of Name of Amount

the statue the dues (in Rs)

CST Trade Tax Rs.617083/-

Custom & Cenvat Credit Rs. 828510/-

Central Excise

Excise Duty On 2097503/- Production Loss

Income Tax Act, Income Tax 9.98 crores

1961



Name of the statue Period to which Status/ Forum where the amount relate dispute is pending

CST 1996-1997 Allahabad High Court has

granted stay on 08.01.2004

Custom & Custom& central Excise Central Excise Deptt has filed appeal in Allahabad High Court.

2005-06 Addl.Commissioner of

Excise

Income Tax Act 2007-08 CIT(Appeals)

1961

x) In our opinion there is no accumulated loss of the company. The company has not incurred any cash losses during the period covered by our audit and the immediately preceding financial year.

xi) According to the records of the company examined by us and the information and explanations given by the manage- ment, the company has not defaulted in repayment of dues to any financial institution or Bank.

xii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, so the question of maintenance of records does not arise.

xiii) In our opinion, the company is not a chit fund or nidhi/mutual benefit fund society. Hence this clause is not applicable to the Company.

xiv) In our opinion and according to the information and explanations given to us, the company is not a dealer or trader in shares, securities debentures and other investments. Accordingly, the provision of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not Applicable to the Company.

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

xvi) Based on the information and explanation given to us and on an overall examination of balance sheet of the company, in our opinion, term loans were applied for the purpose for which the loans were obtained.

xvii) According to the information and explanation given to us and on an overall examination of the Balance –sheet of the Company, we report that no funds raised on the short-term basis have been used for the Long term Investment.

xviii) There were no preferential allotment of shares to parties and companies covered in the registered maintained U/S 301 of the Act; hence this clause is not applicable.

xix) As the company has not issued any debenture this clause is not applicable.

xx) During the year the company has not raised any money from the public issues hence this clause is not applicable.

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

For SUNIL K. MITTAL & CO.,

CHARTERED ACCOUNTANTS

Firm Reg No 008524N

Sd/-

(S.K. JAIN)

Place:New Delhi Partner

Dated:29/05/2010 Mem No 84125