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Auditor Report of Malu Paper Mills Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of MALU PAPER MILLS LIMITED, which comprise the Balance Sheet as at 31st March 2015, the Statement of Profit and Loss & the cash flow statement for the year then ended on 31st March 2015, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

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

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give true and fair view 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 Company's Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our Opinion and to the best of our information and according to the explanations given to us and subject to matter described in the Emphasis of Matters, the aforesaid financial statements, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) In case of the balance Sheet, of the state of affairs of the Company as at 31st March 2015;

b) In the case of the statement of Profit and Loss, of the profit for the year ended on 31st March 2015; and

c) In the case of the Cash Flow Statement, of the cash flow for the year ended on 31st March 2015.

Emphasis of Matters

We draw attention to the following matters:

(1) Balances shown under Loans and Advances, Sundry Debtors, Sundry Creditors and Current Liabilities being subject to confirmations/ reconciliations/settlement and consequential adjustments, if any the impact thereof cannot be ascertained at this stage.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

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

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 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 31 March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

ANNEXURE OF THE INDEPENDENT AUDITIOR'S REPORT

The Annexure referred to in our report to the members of the Malu Paper Mills Limited for the year Ended on 31st March 2015.

We report that:-

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

b) The management has physically verified all its fixed assets at reasonable intervals and no material discrepancies were noticed on such physical verification.

(ii) a) As per the information furnished, the inventories have been physically verified by the management at reasonable intervals during the year.

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

c) In our opinion, the company is maintaining proper records of inventory. No discrepancies observed during the verification.

(iii) The company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act. Hence, Clause (a) and (b) are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are generally adequate internal control systems commensurate with the size of the company and the nature of its business for purchase of inventory and fixed assets and for the sale of goods & services. During the course of our audit no major weakness has been noticed in these internal controls system.

(v) The company has not accepted deposits from the public. Hence the issue of compliance with the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under does not arise.

(vi) The Central Government has not prescribed maintenance of Cost Records under sub section (1) of section 148 of the Companies Act, 2013 in respect of the Company's product.

(vii) a) According to the information and explanations given to us and the records examined by us, the company is regular in depositing undisputed statutory dues including Provident fund, Employees state insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of excise, Value Added Tax, Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st March, 2015 for a period of more than six months from the date they became payable.

b) According to the records of the company there are statutory dues, which are outstanding on account of certain disputes at the end of the year. Amount Name of Nature of the (Rs. in Assessment Forum where Statute Dues Lacs) Years dispute is pending

Asstt. Central Excise Duty 2.63 2003-04 Commissioner of Excise Act. CEST (Appeal)

Asstt. Central Excise Duty 4.33 2004-05 Commissioner of Excise Act. CEST (Appeal)

Asstt Central Excise Duty 3.79 2004-05 Commissioner of Excise Act. CEST (Appeal)

c) The Company is not required to transfer any amount to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under.

(viii) The Company is having accumulated losses at the end of the financial year; however the company has not incurred any cash losses in the current financial year and in the immediately preceding financial year.

(ix) According to the records of the company examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank. The company does not have any borrowings by way of debentures.

(x) According to the information and explanations given to us by the management, the company has not given any guarantee for loans taken by others from banks or financial institutions.

(xi) According to the information and explanations provided to us by the management, the company has used the funds for the purpose for which they were taken.

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

For DEMBLE RAMANI & CO.

Chartered Accountants

CA ASHOK RAMANI

Partner

Place : NAGPUR Mem No. : 30537

Date : 25.05.2015 FRN : 102259W


Mar 31, 2014

We have audited the accompanying financial statements of MALU PAPER MILLS LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s 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 notified under the Companies Act, 1956 ("the Act") (which continue to be applicable in respect of Section 133 of the Companies Act 2013 in terms of General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs.) and in accordance with the accounting principles generally accepted in India. 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 the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. 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 aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(b) In the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on 31st March 2014, and

(c) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on 31st March 2014.

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 purposes of our audit.

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

c. The Balance Sheet, 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 Balance Sheet, Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Act (which continue to be applicable in respect of Section 133 of Companies Act, 2013 in terms of general circular 15/2013, dated 13th September 2013 of the Ministry of Corporate Affairs).

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

ANNEXURE OF THE INDEPENDENT AUDITIOR''S REPORT (Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date)

(i) a) The Company has generally maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

b) As explained to us, the management has physically verified all its fixed assets at reasonable intervals and no material discrepancies were noticed on such physical verification.

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

(ii) a) As per the information furnished, the inventories have been physically verified by the management at reasonable intervals during the year.

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

c) In our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

(iii) a) In our opinion and according to the information and explanations given to us, the company has not granted any secured or unsecured loans to companies, firms or other parties covered in the register maintained u/s 301 of Companies Act, 1956. Hence the clause iii (a), (b), (c) and (d) of the order are not applicable.

e) The company has taken demand loans from companies, firms or other parties covered in the register maintained u/s 301 of Companies Act, 1956. The maximum amount involved during the year was Rs. 2774.73 lacs and yearend balance of loans taken from such parties was Rs. 2688.00 lacs.

f) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from companies, firms and other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the company.

g) In our opinion and as per the information and explanations given to us, the company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

(iv) In our opinion and according to the information and explanation given to us, there is generally an adequate internal control system commensurate with the size of the company and the nature of its business for purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit no major weakness has been noticed in the internal control system.

(v) In respect of contracts or arrangements to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us, there were no particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section

(vi) According to the information and explanations given to us, the Company has not accepted deposits in terms of provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956.

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

(viii) We have broadly reviewed books of accounts maintained by the company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) a) According to the information and explanations given to us and the records examined by us, the company is regular in depositing undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Service tax, Customs duty, Excise duty, Cess and any other statutory dues wherever applicable with the appropriate authorities. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st March, 2014 for a period of more than six months from the date they became payable.

b) According to the records of the company there are statutory dues, which are outstanding on account of certain disputes at the end of the year.

Amount Nature of (Rs.in Assessment Name oi Statute the Dues Lacs) Years

Central Excise Excise Duty 2.63 2003-04 Act.

Cen*T fxcise Excise Duty 4.33 2004-05 Act.

Central Excise Excise Duty 3.79 2004-05 Act.

Name of Statue Forum where dispute is pending

Central Excise Asstt.Commissioner of CEST (Appeal) Act

Central Excise Asstt. Commissioner of CEST (Appeal) Act

Central Excise Asstt. Commissioner of CEST (Appeal) Act

(x) The company has been registered for a period of not less than five years and it has accumulated losses at the end of the financial year not more than fifty percent of its net worth. The company has not incurred cash losses in the financial year. But the company had incurred cash losses of Rs. 1178.01 lacs in the immediately preceding financial year.

(xi) During the Financial Year 2011-12, all the credit facilities utilised from banks are restructured under the Corporate Debts Restructure (CDR) mechanism and according to the records of the company examined by us and the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of dues to any financial institutions or banks. The company does not have any borrowings by way of debentures.

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

(xiii) The provisions of any special statute applicable to chit funds/ nidhi / mutual benefits funds/ society do not apply to the company.

(xiv) In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by its subsidiaries and associates from banks/ financial institutions.

(xvi) In our opinion, term loans have been applied for the purpose for which they have been raised.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet to the company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The company has not made any preferential allotment of shares to parties or companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xix) The company has not issued any debentures.

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

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

For DEMBLE RAMANI & CO. Chartered Accountants

ASHOK RAMANI Partner Place : NAGPUR Mem No. : 30537 Date : 28.05.2014 FRN : 102259W


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of MALU PAPER MILLS LIMITED (“the Company"), which comprise the Balance Sheet as at 31st March 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s 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 principles generally accepted in India including 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 the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the 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 aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(b) In the case of the Statement of Profit and Loss, of the loss of the Company for the year ended on 31st March 2013, and

(c) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on 31st March 2013.

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 purposes of our audit.

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

c. The Balance Sheet, 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 Balance Sheet, Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act.

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

ANNEXURE OF THE INDEPENDENT AUDITIOR''S REPORT (Referred to in Paragraph 1 under the heading of “Report on Other Legal and Regulatory

Requirements" of our report of even date)

(i) a) The Company has generally maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

b) As explained to us, the management has physically verified all its fixed assets at reasonable intervals and no material discrepancies were noticed on such physical verification.

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

(ii) a) As per the information furnished, the inventories have been physically verified by the management at reasonable intervals during the year.

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

c) In our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

(iii) a) In our opinion and according to the information and explanations given to us, the company has not granted any secured or unsecured loans to companies, firms or other parties covered in the register maintained u/s 301 of Companies Act, 1956. Hence the clause iii (a), (b), (c) and (d) of the order are not applicable.

e) The company has taken demand loans from companies, firms or other parties covered in the register maintained u/s 301 of Companies Act, 1956. The maximum amount involved during the year was Rs. 2106.50 lacs and year end balance of loans taken from such parties was Rs. 2106.50 lacs.

f) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from companies, firms and other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the company.

g) In our opinion and as per the information and explanations given to us, the company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

(iv) In our opinion and according to the information and explanation given to us, there is generally an adequate internal control system commensurate with the size of the company and the nature of its business for purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit no major weakness has been noticed in the internal control system.

(v) In respect of contracts or arrangements to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us, there were no particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section

(vi) According to the information and explanations given to us, the Company has not accepted deposits in terms of provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956.

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

(viii) We have broadly reviewed books of accounts maintained by the company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) a) According to the information and explanations given to us and the records examined by us, the company is regular in depositing undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Service tax, Customs duty, Excise duty, Cess and any other statutory dues wherever applicable with the appropriate authorities. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st March, 2013 for a period of more than six months from the date they became payable.

b) According to the records of the company there are statutory dues, which are outstanding on account of certain disputes at the end of the year.

Amount

Nature of the (Rs.in Assessment Forum where dispute Name of Statute Dues Lacs) Years is pending

Asstt Commissioner Central Excise Act. Excise Duty 2.63 2003-04 of CEST (Appeal)

Asstt. Commissioner Central Excise Act. Excise Duty 4.33 2004-05 of CEST (Appeal)

Asstt. Commissioner Central Excise Act. Excise Duty 3.79 2004-05 of CEST (Appeal)

(x) The company has been registered for a period of not less than five years and it has accumulated losses at the end of the financial year not more than fifty percent of its net worth. The company has incurred cash losses of Rs. 1178.01 lacs in the financial year. The Company has also incurred cash losses of Rs. 2315.00 Lacs in the immediate preceding financial year.

(xi) According to the records of the company examined by us and the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of dues to any financial institutions or banks. The company does not have any borrowings by way of debentures.

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

(xiii) The provisions of any special statute applicable to chit funds/ nidhi / mutual benefits funds/ society do not apply to the company.

(xiv) In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by its subsidiaries and associates from banks/ financial institutions.

(xvi) In our opinion, term loans have been applied for the purpose for which they have been raised.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet to the company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The company has not made any preferential allotment of shares to parties or companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xix) The company has not issued any debentures.

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

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

For DEMBLE RAMANI & CO.

Chartered Accountants

Sd/-

ASHOK RAMANI

Place : NAGPUR Partner

Date : 30.05.2013 Mem. No.: 30537

FRN : 102259W


Mar 31, 2012

We have audited the attached Balance Sheet of MALU PAPER MILLS LIMITED as at 31st March 2012 and also the Statement of Profit & Loss for the year ended on that date annexed thereto. These financial Statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

As required by the Companies (Auditors) Report Order, 2003 read with the Amendment Order, 2004 issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Companies Act, 1956 we enclose in the Annexure a statement on the matters specified in Paragraphs 4 & 5 of the said order.

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

1) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our Audit;

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

3) The Balance Sheet and the Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the Books of Accounts;

4) In our opinion, the Balance sheet and the Statement of Profit 8s Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956.

5) On the basis of written representations received from the Directors, as on 31st March, 2012 taken on record by the Board of Directors we report that none of the Directors are disqualified as on 31st March, 2012 from being appointed as a Director in terms of Clause (g) of subsection (1) of section 274 of the Companies Act, 1956.

6) In our opinion and to the best of our information and according to the explanations 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;

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

ii) In the case of the Statement of Profit 8s Loss of the Loss of the Company for the year ended on that date.

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

ANNEXURE OF THE AUDITIOR'S REPORT (As referred to in Paragraph 3 of our report of Even-date)

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

b) The management has physically verified all its fixed assets at reasonable intervals and no material discrepancies were noticed on such physical verification.

c) The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern status.

(ii) a) As per the information furnished, the inventories have been physically verified by the management at reasonable intervals during the year.

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

c) In our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

(iii) a) In our opinion and according to the information and explanations given to us, the company has not granted any secured or unsecured loans to companies, firms or other parties covered in the register maintained u/s 301 of Companies Act, 1956. Hence the clause iii (a), (b), (c) and (d) of the order are not applicable.

e) The company has taken demand loans from companies, firms or other parties covered in the register maintained u/s 301 of Companies Act, 1956. The maximum amount involved during the year was Rs.2735.05 lacs and yearend balance of loans taken from such parties was Rs. 2735.05 lacs.

f) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from companies, firms and other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the company.

g) In our opinion and as per the information and explanations given to us, the company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

(iv) In our opinion and according to the information and explanation given to us, there is generally an adequate internal control system commensurate with the size of the company and the nature of its business for purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit no major weakness has been noticed in the internal control system.

(v) In respect of contracts or arrangements to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us, there were no particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section

(vi) According to the information and explanations given to us, the Company has not accepted deposits in terms of provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956.

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

(viii) We have broadly reviewed books of accounts maintained by the company pursuant to the order made by the Central Government for maintenance of cost records under section 209(l)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been maintained.

(ix) a) According to the information and explanations given to us and the

records examined by us, the company is regular in depositing undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Service tax, Customs duty, Excise duty, Cess and any other statutory dues wherever applicable with the appropriate authorities. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st March, 2012 for a period of more than six months from the date they became payable.

b) According to the records of the company there are statutory dues, which are outstanding on account of certain disputes at the end of the year. Amount Nature of (Rs.in Assessment Forum Where Name of Statute dispute is the Dues Lacs) Years pending

Central Excise Excise Duty 14.49 2002-03 Tribunal Act.

Asstt.

Central Excise Commissi oner of Excise Duty 2.63 2003-04 Act. CEST (Appeal)

Asstt. Central Excise Commiss ioner of Excise Duty 4.33 2004-05 Act. CEST (Appeal)

Asstt. Central Excise Commiss ioner of Excise Duty 3.79 2004-05 Act. CEST (Appeal)



(x) The company has registered for a period of not less than five years and it has accumulated losses at the end of the financial year not more than fifty percent of its net worth. The company has also incurred cash loss of Rs.2315.00 Lacs in the financial year however the company has not incurred any cash loss in the immediate preceding financial year.

(xi) During the financial year all the credit facilities utilized from banks are restructured under the Corporate Debts Restructure (CDR) mechanism and according to the records of the company examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institutions or banks. The company does not have any borrowings by way of debentures.

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

(xiii) The provisions of any special statute applicable to chit funds/ nidhi / mutual benefits funds/ society do not apply to the company.

(xiv) In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by its subsidiaries and associates from banks/ financial institutions.

(xvi) In our opinion, term loans have been applied for the purpose for which they have been raised.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet to the company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The company has not made any preferential allotment of shares to parties or companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xix) The company has not issued any debentures.

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

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

For DEMBLE RAMANI & CO.

Chartered Accountants

(ASHOK RAMANI)

Place : NAGPUR Partner

Date : 03.09.2012 Membership No. 30537

Firm Registration No. 102259W

 
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