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Auditor Report of Mangalam Timber Products Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of MANGALAM TIMBER PRODUCTS LIMITED, (the Company), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit & Loss, the Cash Flow Statement for the year ended on that date 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 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements 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 and Rules made thereunder including the accounting and auditing standards and matters which are required to be included in the audit report.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2015, and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) order 2015 issued by Central Government of India in terms of Sub Section(11) of Section 143 of the Act (hereinafter referred to as the "Order"), and on the matters specified in paragraph 3 and 4 of the said Order, we further report that-

i) a) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

b) As explained to us Fixed Assets of the Company are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which considering the size and nature of operations of the Company appears to be reasonable. Pursuant to such program, a portion of fixed assets have been physically verified by the management during the year and no material discrepancies between book records and physical inventory have been noticed.

ii) a) The management has conducted physical verification of inventory, at reasonable intervals. In our opinion, the frequency of physical verification is reasonable.

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

c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventory and discrepancies between the physical stock and book records which were material in respect of certain items of inventories , have been properly dealt in the books of account.

iii) a) The Company has not granted any loan, secured or unsecured to companies, firm or other parties covered in the register maintained under section 189 of the Companies Act.

b) Clause 3(iii) (a), (b) of the aforesaid order are not applicable.

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

v) The Company has not accepted deposits from the public within the provisions of section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and rules framed there under.

vi) The Central Government of India has not specified the maintenance of cost records under subsection 1 of section 148 of the Act in respect of any product of the Company.

vii) a) According to the records of the Company examined by us and according to the information and explanations given to us, in our opinion the Company has not been regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Custom, Duty of Excise, Value Added Tax, Cess and any other material statutory dues as may be applicable. However, extent of arrears of outstanding statutory dues as at the last day of financial year for a period of more than six months from the date they become payable is nil.

b) According to the records of the Company examined by us and according to the information and explanations given to us, there are no dues in respect of income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax or cess which have not been deposited on account of any dispute except as detailed hereunder.

Name of the Statute Nature of the Dues Period to

which it relates

Central Excise Act, 1944 Excise 1993-94

Excise 2000-01

Excise 2006-07

Excise 2009-10

Orissa & Bihar Excise Act, 1941 Excise 2002-03

Excise 2003-04

Excise 2004-05

Excise 2005-06

Excise 2006-07

Excise 2007-08

Excise 2008-09

Excise 2009-10

Excise 2010-11

West Bengal Sales Tax Act, 1941 Sales Tax 1986-87

Sales Tax 1987-88

Sales Tax 1993-94

Central Sales Tax Act, 1956 Sales Tax 1987-88

Sales Tax 1994-95

Sales Tax 2000-01

Sales Tax 2001-02

Sales Tax 2002-03

Sales Tax 2003-04

Sales Tax 2004-05

Orissa Entry Tax Act, 1999 Entry Tax 2000-01

Entry Tax 2002-03

Entry Tax 2007-09

Orissa Sales Tax Act, 1947 Sales Tax 2002-03

Orissa VAT Act, 2004 VAT 2005-06

VAT 2007-09

Income Tax Act, 1961 Income Tax 2008-09

Name of the Statute Rs. in Lacs Forum where dispute is pending

Central Excise Act, 1944 3.49 Assistant Commissioner, Central Excise

126.57 Central Excise Service Tax Appellate Tribunal

5.76 Central Excise Service Tax Appellate Tribunal

52.21 Central Excise Service Tax Appellate Tribunal

Orissa & Bihar Excise Act, 1941 21.39 High Court of Orissa

135.75 High Court of Orissa

170.90 High Court of Orissa

251.58 High Court of Orissa

267.53 High Court of Orissa

120.37 District Magistrate & Collector, Nabarangpur

103.20 District Magistrate & Collector, Nabarangpur

96.60 District Magistrate & Collector, Nabarangpur

57.60 District Magistrate & Collector, Nabarangpur

West Bengal Sales Tax Act, 1941 0.16 Assistant Commissioner, Commercial Taxes

0.06 Assistant Commissioner, Commercial Taxes

0.33 Assistant Commissioner, Commercial Taxes

Central Sales Tax Act, 1956 0.05 Assistant Commissioner, Commercial Taxes

0.72 Assistant Commissioner, Commercial Taxes

93.56 Central Sales Tax Tribunal

110.00 Sales Tax Tribunal

70.12 Sales Tax Tribunal

135.66 Sales Tax Tribunal

30.22 Sales Tax Tribunal

Orissa Entry Tax Act, 1999 8.11 Sales Tax Tribunal

28.35 Sales Tax Tribunal

11.07 Additional Commissioner, Commercial Taxes

Orissa Sales Tax Act, 1947 1.85 Sales Tax Tribunal

Orissa VAT Act, 2004 17.20 Sales Tax Tribunal

20.38 Additional Commissioner, Commercial Taxes

Income Tax Act, 1961 70.28 Commissioner of Income Tax (Appeal)

c) There are no amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the companies Act, 1956 (1 of 1956) and rules made there under.

viii) The accumulated losses of the Company have not exceeded its net worth as at 31st March, 2015. It has incurred cash losses in the current financial year and in the preceding financial year.

ix) As per books and records maintained by the Company and according to the information and explanations made available to us, the Company has not defaulted in repayment of any dues to financial institutions, banks and debenture holders as at the Balance Sheet date.

x) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from any bank or financial institutions during the year. Accordingly the provisions of 3(x) of the Order are not applicable to the Company.

xi) The Company has not raised any term loans. Accordingly provisions of clause 3(xi) of the Order are not applicable to the Company.

xii) During the course of our examination of the books of accounts carried out in accordance with the generally accepted auditing practices in India for the purpose of reporting the true and fair view of the financial statements, we have neither come across any incidence of fraud on or by the Company, nor have we been informed of any such case by the Management.

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

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

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

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

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the companies (Accounts) Rules, 2014.

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

(f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact, if any, of pending litigations as at 31st March, 2015 on its financial position in its financial statements-Refer Note 2.26 to the financial statements.

ii. The Company did not have any long-term contracts including derivative contracts as at 31st March, 2015.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31st March, 2015.

For S M DAGA & CO. Chartered Accountants

Firm Registration Number: 303119E S M DAGA Partner Membership No.4951

Dated: 9th May, 2015 Place: Kolkata


Mar 31, 2014

We have audited the accompanying financial statements of MANGALAM TIMBER PRODUCTS LIMITED, which comprise the Balance Sheet as at 31st March, 2014, and the Profit & Loss Statement and Cash Flow Statement for the year ended on that date, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (The Act) read with General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances 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 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 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 Balance Sheet, of the state of affairs of the Company as at 31st March, 2014.

b) In the case of the Profit & Loss Statement, of the Loss for the year ended on that date.

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2003 as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004 issued by the Central Government in exercise of the power conferred by section 227(4A) of the Companies Act, 1956 (the Act) on the matters specified in paragraph 4 and 5 of the said Order, we report that -

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

b) As explained to us Fixed Assets of the company are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which considering the size and nature of operations of the company appears to be reasonable. Pursuant to such program, a portion of fixed assets have been physically verified by the management during the year and no material discrepancies between book records and physical inventory have been noticed.

c) In our opinion, there was no substantial disposal of fixed assets during the year.

ii) a) The management has conducted physical verification of inventory, except stock lying with third parties and stock in transit at reasonable intervals. In our opinion, the frequency of physical verification is reasonable.

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

c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of inventory and discrepancies between the physical stock and book records which were material in respect of certain items of inventories, have been properly dealt in books of account.

iii) a) The company has not granted any loan, secured or unsecured to companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

b) Clause 4(iii) (b), (c) and (d) of the aforesaid order are not applicable.

c) The company has not taken any loans secured or unsecured loan from companies, firms or other parties covered in the register maintained under section 301 of the companies Act, 1956.

d) Clauses 4(iii)(f) and (iii)(g) of the aforesaid order are not applicable.

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

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

b) In our opinion and according to information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding Rupees five lacs in value in respect of each party during the year have been made at prices which are reasonable having regard to prevalent market prices at the relevant time other than the transactions of special nature for which competitive quotations are not available.

vi) The company has not accepted any deposit from public within the meaning of section 58A of the Companies Act, 1956.

vii) The company has an internal audit system, which in our opinion, is commensurate with the size of the Company and nature of its business.

viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209(1)(d) of the 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 records of the company examined by us and according to information and explanations given to us, in our opinion the company has generally been regular in depositing undisputed statutory dues including Investor Education and Protection Fund, Employees State Insurance Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues except Provident Fund applicable to it with appropriate authorities.

b) According to the records of the Company examined by us and according to information and explanations given to us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and cess which have not been deposited on account of any dispute except as detailed hereunder:

Name of the Statute Nature of the Dues Year Rs. in Lacs

Central Excise Act, 1944 Excise 1993-94 3.49

Excise 2000-01 126.57

Excise 2006-07 5.76

Excise 2009-10 52.21

Orissa & Bihar Excise Act, 1915 Excise 2002-03 21.39

Excise 2003-04 135.75

Excise 2004-05 170.90

Excise 2005-06 251.58

Excise 2006-07 267.53

Excise 2007-08 120.37

Excise 2008-09 103.20

Excise 2009-10 96.60

Excise 2010-11 57.60

West Bengal Sales Tax Act, 1941 Sales Tax 1986-87 0.16

Sales Tax 1987-88 0.06

Sales Tax 1993-94 0.33

Central Sales Tax Act, 1956 Sales Tax 1987-88 0.05

Sales Tax 1994-95 0.72

Sales Tax 1999-00 2.02

Sales Tax 2000-01 93.56

Sales Tax 2001-02 110.00

Sales Tax 2002-03 70.12

Sales Tax 2003-04 135.66

Sales Tax 2004-05 30.22

Sales Tax 2008-09 0.74

Sales Tax 2009-10 0.47

Orissa Entry Tax Act, 1999 Entry Tax 2000-01 8.11

Entry Tax 2002-03 28.35

Entry Tax 2007-09 11.07

Orissa Sales Tax Act, 1947 Sales Tax 2002-03 1.85

Orissa VAT Act, 2004 VAT 2005-07 17.20

VAT 2007-09 20.38

Income Tax Act, 1961 Income Tax 2007-08 70.28

Name of the Statue Forum where dispute is Pending

Central Excise Act, 1944 Assistant Commissioner Central Excise

Central Excise Service Tax Appellate Tribunal

Central Excise Service Tax Appellate Tribunal

Central Excise Service Tax Appellate Tribunal

Orissa & Bihar Excise Act, 1915 High Court of Orissa

High Court of Orissa

High Court of Orissa

High Court of Orissa

High Court of Orissa

Dist.Magistrate & Collector, Nabarangpur

Dist.Magistrate & Collector, Nabarangpur

District Magistrate & Collector, Nabarangpur

District Magistrate & Collector, Nabarangpur

West Bengal Sales Tax Act, 1941 Assistant Commissioner Commercial Taxes

Assistant Commissioner, Commercial Taxes

Assistant Commissioner Commercial Taxes

Assistant Commissioner, Commercial Taxes

Central Sales Tax Act, 1956 Assistant Commissioner, Commercial Taxes

Additional Commissioner, Commercial Taxes

Central Sales Tax Tribunal

Sales Tax Tribunal

Sales Tax Tribunal

Sales Tax Tribunal

Sales Tax Tribunal

Appellate Deputy Commissioner

CTO

Orissa Entry Tax Act, 1999 Sales Tax Tribunal

Sales Tax Tribunal

Additional Commissioner, Commercial Taxes

Orissa Sales Tax Act, 1947 Sales Tax Tribunal

Orissa VAT Act, 2004 Sales Tax Tribunal

Additional Commissioner Commercial Taxes

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

x) The accumulated losses of the Company have exceeded fifty percent of its net worth as at 31st March, 2014. It has incurred cash losses in the current financial year and in the immediately preceding financial year.

xi) As per books and records maintained by the company and according to the information and explanations made available to us, the company has not defaulted in repayment of any dues to financial institutions, banks and debenture holders.

xii) According to information and explanations given to us and based on the documents and records produced, the company has not granted any loans and advances on the basis of the security by way of pledge of shares, debentures and other securities.

xiii) In our opinion, the company is not a chit fund or a nidhi/mutual fund/society. Accordingly, the provisions of clause 4(xiii) of the order are not applicable to the Company.

xiv) In our opinion the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the order are not applicable to the Company.

xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by its associates or subsidiaries or others from bank or financial institutions during the year.

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

xvii) On the basis of information received from the management and based on our overall analysis of the Balance Sheet of the Company, the company has not used any funds raised on short-term basis for long term purposes.

xviii) During the year, the Company has not made any preferential allotment of shares to parties or companies covered in the Register maintained under section 301 of the Act. Accordingly clause 4(xviii) of the aforesaid order is not applicable.

xix) The company does not have any outstanding debentures during the year.

xx) The company has not raised any money through public issue during the year.

xxi) During the course of our examination of the books of accounts carried out in accordance with the generally accepted auditing practices in India for the purpose of reporting the true and fair view of the financial statements, we have neither come across any incidence of fraud on or by the company nor have we been informed of any such case by the Management.

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

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

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

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

d) In our opinion, the Balance Sheet, Profit & Loss Statement and Cash Flow Statement comply with the accounting standards notified under the Companies Act, 1956 read with General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate affairs in respect of Section 133 of the Companies Act, 2013.

e) In our opinion and according to the explanations given to us none of the Directors are disqualified from being appointed as directors under clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For S M DAGA & CO.

Chartered Accountants

Firm Registration No. - 303119E

S M Daga

Partner

Membership No. 4951

11, Clive Row, Kolkata - 700 001

Dated, The 14th Day of May, 2014


Mar 31, 2013

We have audited the accompanying financial statements of MANGALAM TIMBER PRODUCTS LIMITED, which comprise the Balance Sheet as at March 31, 2013, and the Profit & Loss Statement and Cash Flow Statement for the year ended on that date, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid said financial statements 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 Balance Sheet, of the state of affairs of the Company as at 31st March, 2013.

b) In the case of the Profit & Loss Statement, of the Loss for the year ended on that date.

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2003 as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004 issued by the Central Government in exercise of the power conferred by section 227(4A) of the Companies Act, 1956 (the Act) on the matters specified in paragraph 4 and 5 of the said Order, we report that -

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

b) As explained to us Fixed Assets of the company are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which considering the size and nature of operations of the company appears to be reasonable. Pursuant to such program, a portion of fixed assets have been physically verified by the management during the year and no material discrepancies between book records and physical inventory have been noticed.

c) In our opinion, there was no substantial disposal of fixed assets during the year.

ii) a) The management has conducted physical verification of inventory, except stock lying with third parties and stock in transit at reasonable intervals. In our opinion, the frequency of physical verification is reasonable.

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

c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of inventory and discrepancies between the physical stock and book records which were material in respect of certain items of inventories, have been properly dealt in books of account.

iii) a) The company has not granted any loan, secured or unsecured to companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

b) Clause 4(iii) (b), (c) and (d) of the aforesaid order are not applicable.

c) The company has not taken any loans secured or unsecured loan from companies, firms or other parties covered in the register maintained under section 301 of the companies Act, 1956.

d) Clauses 4(iii)(f) and (iii)(g) of the aforesaid order are not applicable.

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

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

b) In our opinion and according to information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding Rupees five lacs in value in respect of each party during the year have been made at prices which are reasonable having regard to prevalent market prices at the relevant time other than the transactions of special nature for which competitive quotations are not available.

vi) The company has not accepted any deposit from public within the meaning of section 58A of the Companies Act, 1956.

vii) The company has an internal audit system, which in our opinion, is commensurate with the size of the Company and nature of its business.

viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209(1)(d) of the 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 records of the company examined by us and according to information and explanations given to us, in our opinion the company has generally been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues applicable to it with appropriate authorities. However, as on 31st March, 2013, Service Tax for Rs.58,864/- is outstanding for a period of more than six months from the date they became payable which has since been paid.

b) According to the records of the Company examined by us and according to information and explanations given to us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and cess which have not been deposited on account of any dispute except as detailed hereunder:

Name of the Statute Nature of the Dues Year

Central Excise Act, 1944 Excise 1993-94

Excise 2000-01

Excise 2006-07

Excise 2009-10

Orissa & Bihar Excise Act, 1915 Excise 2002-03

Excise 2003-04

Excise 2004-05

Excise 2005-06

Excise 2006-07

Excise 2007-08

Excise 2008-09

West Bengal Sales Tax Act, 1941 Sales Tax 1986-87

Sales Tax 1987-88

Sales Tax 1993-94

Central Sales Tax Act, 1956 Sales Tax 1987-88

Sales Tax 1994-95

Sales Tax 1999-00 Sales Tax 2000-01

Sales Tax 2001-02

Sales Tax 2002-03

Sales Tax 2003-04

Sales Tax 2004-05 Sales Tax 2007-09

Sales Tax 2008-09

Orissa Entry Tax Act, 1999 Entry Tax 2000-01

Entry Tax 2002-03

Entry Tax 2007-09

Orissa Sales Tax Act, 1947 Sales Tax 2002-03

Orissa VAT Act, 2004 VAT 2005-06

VAT 2007-09

Income Tax Act, 1961 Income Tax 2007-08

Name Rs.in Lacs Forum where dispute is Pending

Central Excise Act, 1944 3.49 Assistant Commissioner Central Excise

126.57 Central Excise Service Tax Appellate Tribunal

5.76 Central Excise Service Tax Appellate Tribunal

52.21 Central Excise Service Tax Appellate Tribunal

21.39 High Court of Orissa

135.75 High Court of Orissa

170.90 High Court of Orissa

251.58 High Court of Orissa

267.53 High Court of Orissa

120.37 Dist.Magistrate & Collector Nabarangpur

103.20 Dist.Magistrate & Collector, Nabarangpur

West Bengal Sales Tax Act, 1941 0.16 Assistant Commissioner Commercial Taxes

0.06 Assistant Commissioner, Commercial Taxes

0.33 Assistant Commissioner Commercial Taxes

0.05 Assistant Commissioner Commercial Taxes

0.72 Assistant Commissioner, Commercial Taxes

2.02 Additional Commissioner, Commercial Taxes

93.56 Central Sales Tax Tribunal

110.00 Sales Tax Tribunal

70.12 Sales Tax Tribunal

135.66 Sales Tax Tribunal

30.22 Sales Tax Tribunal

806.93 Deputy Commissioner Sales Tax

6.20 Appellate Deputy Commissioner

Orissa Entry Tax Act, 1999 8.11 Sales Tax Tribunal

28.35 Sales Tax Tribunal

Orissa Entry Tax Act, 1999 11.07 Additional Commissioner, Commercial Taxes

Income Tax Act, 1961 1.85 Sales Tax Tribunal

17.20 Sales Tax Tribunal

20.38 Additional Commissioner Commercial Taxes

70.28 Commissioner of Income Tax (Appeal)

x) Accumulated losses of the Company are less than fifty percent of its net worth. It has incurred cash losses in the current financial year and in the immediately preceding financial year.

xi) As per books and records maintained by the company and according to the information and explanations made available to us, the company

has not defaulted in repayment of any dues to financial institutions, banks and debenture holders.

xii) According to information and explanations given to us and based on the documents and records produced, the company has not granted any loans and advances on the basis of the security by way of pledge of shares, debentures and other securities.

xiii) In our opinion, the company is not a chit fund or a nidhi/mutual fund/society. Accordingly, the provisions of clause 4(xiii) of the order are not applicable to the Company.

xiv) In our opinion the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the order are not applicable to the Company.

xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by its associates or subsidiaries or others from bank or financial institutions during the year.

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

xvii) On the basis of information received from the management and based on our overall analysis of the Balance Sheet of the Company, the company has not used any funds raised on short-term basis for long term purposes.

xviii) During the year, the Company has not made any preferential allotment of shares to parties or companies covered in the Register maintained under section 301 of the Act. Accordingly clause 4(xviii) of the aforesaid order is not applicable.

xix) The company does not have any outstanding debentures during the year.

xx) The company has not raised any money through public issue during the year.

xxi) During the course of our examination of the books of accounts carried out in accordance with the generally accepted auditing practices in India for the purpose of reporting the true and fair view of the financial statements, we have neither come across any incidence of fraud on or by the company nor have we been informed of any such case by the Management.

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

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

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

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

d) In our opinion, the Balance Sheet, Profit & Loss Statement and Cash Flow Statement comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e) In our opinion and according to the explanations given to us none of the Directors are disqualified from being appointed as directors under clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For S M DAGA & CO.

Chartered Accountants

Firm Registration No. - 303119E

S M Daga

Partner

Membership No. 4951

11, Clive Row,

Kolkata - 700 001

Dated, The 8th

Day of May, 2013


Mar 31, 2012

We have audited the attached Balance Sheet of MANGALAM TIMBER PRODUCTS LIMITED as at 31st March, 2012, Profit & Loss Statement and Cash Flow Statement for the year ended on that date both 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.

1. As required by the Companies (Auditors' Report) Order, 2003 as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government in exercise of the power conferred by section 227(4A) of the Companies Act, 1956 (the Act) on the matters specified in paragraph 4 and 5 of the said Order.

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

b) The Fixed Assets of the company are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which considering the size and nature of operations of the company appears to be reasonable. Pursuant to such program, a portion of fixed assets have been physically verified by the management during the year and no material discrepancies between book records and physical inventory have been noticed.

c) There was no substantial disposal of fixed assets during the year.

ii) a) The management has conducted physical verification of inventory, except stock lying with third parties and stock in transit at reasonable intervals.

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

c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of inventory and discrepancies between the physical stock and book records which were material in respect of certain items of inventories, have been properly dealt in books of account.

iii) a) The company has not granted any loan, secured or unsecured to companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

b) Clause 4(iii) (b), (c) and (d) of the aforesaid order are not applicable.

c) The company has not taken any loans secured or unsecured loan from companies,firms or other parties covered in the register maintained under section 301 of the companies Act, 1956.

d) Clauses 4(f) and (g) of the aforesaid order are not applicable.

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

v) a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b) In our opinion and according to information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding Rupees five lacs in value in respect of each party during the year have been made at prices which are reasonable having regard to prevalent market prices at the relevant time other than the transactions of special nature for which competitive quotations are not available.

vi) The company has not accepted any deposit from public within the meaning of section 58A of the Companies Act, 1956.

vii) The company has an internal audit system, which in our opinion, is commensurate with the size of the Company and nature of its business.

viii) We have been informed that the Central Government has prescribed for the maintenance of the cost records under section 209(1) (d) of the Companies Act, 1956 in respect of Formaldehyde. In our opinion, the prescribed accounts and records have been made and maintained by the Company. However, we have not carried out any detailed examination of aforesaid records whether they are accurate and correct.

ix) a) According to the records of the company examined by us and according to information and explanations given to us, in our opinion the company has generally been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues applicable to it with appropriate authorities.

b) According to the records of the Company, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and cess which have not been deposited on account of any dispute except as detailed hereunder:

Name of the Statute Nature of the Dues Year Rs in Lacs Forum where dispute is pending

Central Excise Act, 1944 Excise 1993-94 3.49 Assistant Commissioner Central Excise

Excise 2000-01 126.57 Central Excise Service Tax Appellate Tribunal

Excise 2006-07 5.76 Central Excise Service Tax Appellate Tribunal

Excise 2009-10 52.21 Additional Commissioner Central Excise

Odisha & Bihar Excise Act, 1915 Excise 2002-03 21.39 High Court of Odisha

Excise 2003-04 135.75 High Court of Odisha

Excise 2004-05 170.90 High Court of Odisha

Excise 2005-06 251.58 High Court of Odisha

Excise 2006-07 267.53 High Court of Odisha

West Bengal Sales Tax Act, 1941 Sales Tax 1986-87 0.16 Assistant Commissioner Commercial Taxes

Sales Tax 1987-88 0.06 Assistant Commissioner, Commercial Taxes

Sales Tax 1993-94 0.33 Assistant Commissioner Commercial Taxes

Central Sales Tax Act, 1956 Sales Tax 1993-94 0.30 Additional Deputy Commissioner

Sales Tax 1995-96 3.07 Additional Deputy Commissioner

Sales Tax 2001-02 110.00 Sales Tax Tribunal

Sales Tax 1987-88 0.05 Assistant Commissioner, Commercial Taxes

Sales Tax 2002-03 70.12 Sales Tax Tribunal

Sales Tax 2003-04 135.66 Sales Tax Tribunal

Sales Tax 1994-95 0.72 Sales Tax Tribunal

Sales Tax 2004-05 30.22 Sales Tax Tribunal

Sales Tax 1999-00 2.02 Additional Commissioner, Commercial Taxes

Sales Tax 2007-09 806.93 Sales Tax Tribunal

Sales Tax 2008-09 6.20 Appellate Deputy Commissioner

Sales Tax 2000-01 93.56 Central Sales Tax Tribunal

Andhra Pradesh General Sales Tax Act, 1957 Sales Tax 1993-94 8.91 Additional Deputy Commissioner

Sales Tax 1994-95 6.34 Additional Deputy Commissioner

Sales Tax 1995-96 17.61 Sales Tax Appellate Tribunal

Sales Tax 1996-97 19.99 Sales Tax Appellate Tribunal

Sales Tax 1990-91 2.31 High Court, Andhra Pradesh

Sales Tax 1991-92 1.27 High Court, Andhra Pradesh

Sales Tax 1992-93 1.11 High Court, Andhra Pradesh

Odisha Entry Tax Act, 1999 Entry Tax 2000-01 8.11 Sales Tax Tribunal

Entry Tax 2002-03 28.35 Sales Tax Tribunal

Entry Tax 2007-09 11.07 Additional Commissioner, Commercial Taxes

Odisha Sales Tax Act, 1947 Sales Tax 2002-03 1.85 Additional Commissioner, Commercial Taxes

Odisha VAT Act, 2004 VAT 2005-06 17.20 Sales Tax Tribunal

VAT 2007-09 20.38 Additional Commissioner Commercial Taxes

x) Accumulated losses of the Company are less than fifty percent of its net worth. It has incurred cash losses in the current financial year and in the immediately preceding financial year.

xi) As per books and records maintained by the company and according to the information and explanations made available to us, the company has not defaulted in repayment of any dues to financial institutions, banks and debenture holders.

xii) According to information and explanations given to us and based on the documents and records produced, the company has not granted any loans and advances on the basis of the security by way of pledge of shares, debentures and other securities.

xiii) In our opinion, the company is not a chit fund or a nidhi/mutual fund/society. Accordingly, the provisions of clause 4(xiii) of the order are not applicable to the Company.

xiv) In our opinion the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the order are not applicable to the Company.

xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by its associates or subsidiaries or others from bank or financial institutions during the year.

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

xvii) On the basis of information received from the management and based on our overall analysis of the Balance Sheet of the Company, the company has not used any funds raised on short-term basis for long term purposes.

xviii) The company has not made any preferential allotment of shares during the year to any parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix) The company does not have any outstanding debentures during the year.

xx) The company has not raised any money through public issue during the year.

xxi) During the course of our examination of the books of accounts carried out in accordance with the generally accepted auditing practices in India for the purpose of reporting the true and fair view of the financial statements, we have neither come across any incidence of fraud on or by the company nor have we been informed of any such case by the Management.

2. Further to our other comments:

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) The Balance Sheet, Profit & Loss Statement, Cash Flow Statement dealt with by this report are in agreement with the books of account.

c) In our opinion, the Balance Sheet, Profit & Loss Statement and Cash Flow Statement comply with the accounting standards referred to in Sub-section (3C) of section 211 of the Companies Act, 1956.

d) 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 the books of account.

e) On the basis of written representations, received from the Directors and taken on record by the Board of Directors, none of the Director 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.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with other notes and in particular Note no: 2.3(d) 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 case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012

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

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

For S M DAGA & CO.

Chartered Accountants

Firm Registration No. - 303119E

S M Daga

Partner

Membership No. 4951

11, Clive Row, Kolkata - 700 001

Dated, The 10th Day of May, 2012


Mar 31, 2011

We have audited the attached Balance Sheet of MANGALAM TIMBER PRODUCTS LIMITED as at 31st March, 2011 and the Profit & Loss Account and Cash Flow Statement for the year ended on that date both 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.

1. As required by the Companies (Auditors' Report) Order, 2003 ("the order") (As amended) issued by the Central Government in exercise of the power conferred by section 227(4A) of the Companies Act, 1956 (the Act) on the matters specified in paragraph 4 and 5 of the said Order.

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

b) The Fixed Assets of the company are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which considering the size and nature of operations of the company appears to be reasonable. Pursuant to such program, a portion of fixed assets have been physically verified by the management during the year and no material discrepancies between book records and physical inventory have been noticed.

c) There was no substantial disposal of fixed assets during the year.

ii) a) The management has conducted physical verification of inventory, except stock lying with third parties and stock in transit at reasonable intervals.

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

c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of inventory and discrepancies between the physical stock and book records which were material in respect of certain items of inventories, have been properly dealt in books of account.

iii) a) The company has not granted any loan, secured or unsecured to companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

b) Clause 4(iii) (b), (c) and (d) of the aforesaid order are not applicable.

c) The company has taken unsecured loan from one party covered in the register maintained under section 301 of the companies Act, 1956. The maximum amount outstanding during the year was Rs.575.00 Lacs.

d) The rate of interest and other terms and conditions of such loan taken by the company are prima-facie not prejudicial to the interest of the company.

e) According to information and explanations given to us, the payment of principal amount of loan taken and interest thereon is regular as per stipulated terms.

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

v) a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b) In our opinion and according to information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding Rupees five lacs in value in respect of any party during the year have been made at prices which are reasonable having regard to prevalent market prices at the relevant time other than the transactions of special nature for which competitive quotations are not available.

vi) The company has not accepted any deposit from public within the meaning of section 58A of the Companies Act, 1956.

vii) The company has an internal audit system, which in our opinion, is commensurate with the size of the Company and nature of its business.

viii) We have been informed that the Central Government has prescribed for the maintenance of the cost record under section 209(1) (d) of the Companies Act, 1956 in respect of Formaldehyde. In our opinion, the prescribed accounts and records have been made and maintained by the Company. However, we have not carried out any detailed examination of aforesaid records whether they are accurate and correct.

ix) a) According to the records of the company examined by us and according to information and explanations given to us, in our opinion the company has generally been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues applicable to it with appropriate authorities.

b) According to the records of the Company, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and cess which have not been deposited on account of any dispute except as detailed hereunder:

Name of the Statute Nature of the Dues Year Rs.in Lacs

Central Excise Act, 1944 Excise 1993-94 3.49

Excise 2000-01 126.57

Excise 2006-07 5.76

Excise 2009-10 52.21

Orissa & Bihar Excise 2002-03 21.39

Excise Act, 1915 Excise 2003-04 135.75

Excise 2004-05 170.90

Excise 2005-06 251.58

Excise 2006-07 267.53

West Bengal Sales Tax Act, 1941 Sales Tax 1986-87 0.16

Sales Tax 1987-88 0.06

Sales Tax 1993-94 0.33

Central Sales Tax Act, 1956 Sales Tax 1993-94 0.30

Sales Tax 1995-96 3.07

Sales Tax 2001-02 110.00

Sales Tax 1987-88 0.05

Sales Tax 2002-03 70.12

Sales Tax 2003-04 135.66

Sales Tax 1994-95 0.72

Sales Tax 2004-05 30.22

Sales Tax 1999-00 2.02

Sales Tax 2007-09 806.93

Andhra Pradesh General Sales Tax Act, 1957 Sales Tax 1993-94 8.91

Sales Tax 1994-95 6.34

Sales Tax 1995-96 17.61

Sales Tax 1996-97 19.99

Sales Tax 1990-91 2.31

Sales Tax 1991-92 1.27

Sales Tax 1992-93 1.11

Orissa Entry Tax Act, 1999 Entry Tax 2000-01 8.11

Entry Tax 2002-03 28.35

Entry Tax 2007-09 11.07

Orrisa Sales Tax Act, 1947 Sales Tax 2002-03 1.85

Orissa VAT Act, 2004 VAT 2005-06 17.20

VAT 2007-09 20.38

Name of the Statute Forum where dispute is Pending

Central Excise Act, Assistant Commissioner 1944 Central Excise Central Excise Service Tax Appellate Tribunal

Central Excise Service Tax Appellate Tribunal

Additional Commissioner Central Excise

Orissa & Bihar High Court of Orissa

Excise Act, 1915 High Court of Orissa High Court of Orissa

High Court of Orissa

High Court of Orissa

West Bengal Sales Assistant Commissioner Tax Act, 1941 Commercial Taxes

Assistant Commissioner Commercial Taxes

Assistant Commissioner Commercial Taxes

Additional Deputy Commissioner

Additional Deputy Commissioner

Sales Tax Tribunal

Assistant Commissioner Commercial Taxes

Sales Tax Tribunal

Sales Tax Tribunal

Sales Tax Tribunal

Sales Tax Tribunal

Additional Commissioner Commercial Tax

Sales Tax Tribunal

Andhra Pradesh Additional Deputy General Sales Tax Commissioner Act, 1957 Additional Deputy Commissioner

Sales Tax AppellateTribunal

Sales Tax AppellateTribunal

High Court, Andhra Pradesh

High Court, Andhra Pradesh

High Court, Andhra Pradesh

Orissa Entry Tax Act, 1999 Sales Tax Tribunal

Sales Tax Tribunal Additional Commissioner Commercial Taxes

Additional Commissioner Commercial Taxes

Orissa VAT Act, 2004 Sales Tax Tribunal

Additional Commissioner Commercial Taxes

x) Accumulated losses of the Company are less than fifty percent of its net worth. It has incurred cash losses in the current financial year and in the immediately preceding financial year.

xi) As per books and records maintained by the company and according to the information and explanations made available to us, the company has not defaulted in repayment of any dues to financial institutions, banks and debenture holders.

xii) According to information and explanations given to us and based on the documents and records produced, the company has not granted any loans and advances on the basis of the security by way of pledge of shares, debentures and other securities.

xiii) In our opinion, the company is not a chit fund or a nidhi/mutual fund/society. Accordingly, the provisions of clause 4(xiii) of the order are not applicable to the Company.

xiv) In our opinion the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the order are not applicable to the Company.

xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by its associates or subsidiaries or others from bank or financial institutions during the year.

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

xvii) On the basis of information received from the management and based on our overall analysis of the Balance Sheet of the Company, the company has not used any funds raised on short-term basis for long term purposes.

xviii) The company has not made any preferential allotment of shares during the year to any parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix) The company does not have any outstanding debentures during the year.

xx) The company has not raised any money through public issue during the year.

xxi) During the course of our examination of the books of accounts carried out in accordance with the generally accepted auditing practices in India for the purpose of reporting the true and fair view of the financial statements, we have neither come across any incidence of fraud on or by the company nor have we been informed of any such case by the Management.

2. Further to our other comments:

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) The Balance Sheet, Profit & Loss Account, Cash Flow Statement dealt with by this report are in agreement with the books of account.

c) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement comply with the accounting standards referred to in Sub-section (3C) of section 211 of the Companies Act, 1956.

d) 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 the books of account.

e) On the basis of written representations, received from the Directors and taken on record by the Board of Directors, none of the Director is disqualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with notes thereon and attached thereto give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

For S M DAGA & CO. Chartered Accountants Firm Registration No. - 303119E

S M Daga Partner Membership No. 4951 11, Clive Row, Kolkata - 700 001 Dated, The 25th April, 2011


Mar 31, 2010

We have audited the attached Balance Sheet of MANGALAM TIMBER PRODUCTS LIMITED as at 31st March, 2010 and the Profit & Loss Account and Cash Flow Statement for the year ended on that date both 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 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.

1. As required by the Companies (Auditors Report) Order, 2003 ("the order") (As amended) issued by the Central Government in exercise of the power conferred by section 227(4A) of the Companies Act, 1956 (the Act) on the matters specified in paragraph 4 and 5 of the said Order.

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

b) The Fixed Assets of the company are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which considering the size and nature of operations of the company appears to be reasonable. Pursuant to such program, a portion of fixed assets have been physically verified by the management during the year and no material discrepancies between book records and physical inventory have been noticed.

c) There was no substantial disposal of fixed assets during the year.

ii) a) The management has conducted physical verification of inventory, except stock lying with third parties and stock in transit at reasonable intervals.

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

c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of inventory and discrepancies between the physical stock and book records which were material in respect of certain items of inventories, have been properly dealt in books of account.

iii) a) The company has not granted any loan, secured or unsecured to companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

b) Clause 4(iii) (b), (c) and (d) of the aforesaid order are not applicable.

c) The company has taken unsecured loan from one party covered in the register maintained under section 301 of the companies Act, 1956. The maximum amount outstanding during the year was Rs.621.80 Lacs.

d) The rate of interest and other terms and conditions of such loan taken by the company are prima-facie not prejudicial to the interest of the company.

e) According to information and explanations given to us, the payment of principal amount of loan taken and interest thereon is regular as per stipulated terms.

iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commen rate with the size of the company and nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit we have not come across any continuing failure to correct major weakness in internal control system. v) a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section. b) In our opinion and according to information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding Rupees five lacs in value in respect of any party during the year have been made at prices which are reasonable having regard to prevalent market prices at the relevant time other than the transactions of special nature for which competitive quotations are not available. vi) The company has not accepted any deposit from public within the meaning of section 58A of the Companies Act, 1956. vii) The company has an internal audit system, which in our opinion, is commensurate with the size of the Company and nature of its business. viii) We have been informed that the Central Government has prescribed for the maintenance of the cost record under section 209(1) (d) of the Companies Act, 1956 in respect of Formaldehyde. In our opinion, the prescribed accounts and records have been made and maintained by the Company. However, we have not carried out any detailed examination of aforesaid records whether they are accurate and correct. ix) a) According to the records of the company examined by us and according to information and explanations given to us, in our opinion the company has generally been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues applicable to it with appropriate authorities. b) According to the records of the Company, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and cess which have not been deposited on account of any dispute except as detailed hereunder:

Name of the Statute Nature of the Dues Year Rs. in Lacs

Central Excise Act, 1944 Excise 1993-94 3.49

Excise 1997-98 3.37

Excise 2000-01 126.57

Excise 2006-07 2.88

Orissa & Bihar Excise 2002-03 21.39

Excise Act, 1915 Excise 2003-04 135.75

Excise 2004-05 170.90

Excise 2005-06 251.58

Excise 2006-07 267.53

West Bengal Sales Tax Act, 1941 Sales Tax 1986-87 0.16

Sales Tax 1987-88 0.06

Sales Tax 1993-94 0.33

Central Sales Tax Act, 1956 Sales Tax 1993-94 0.30

Sales Tax 1995-96 3.07

Sales Tax 2001-02 110.00

Sales Tax 2001-02 0.03

Sales Tax 1987-88 0.05

Sales Tax 2002-03 70.12

Sales Tax 2003-04 135.66

Sales Tax 2000-01 93.56

Sales Tax 1994-95 0.72

Sales Tax 2004-05 30.22

Sales Tax 1997-98 0.47

Sales Tax 1999-00 2.02

Andhra Pradesh General Sales Tax Act, 1957 Sales Tax 1993-94 8.91

Sales Tax 1994-95 6.34

Sales Tax 1995-96 17.61

Sales Tax 1996-97 19.99

Sales Tax 1990-91 2.31

Sales Tax 1991-92 1.27

Sales Tax 1992-93 1.11

Name of the Statute Forum where dispute is Pending

Central Excise Act, 1944 Assistant Commissioner Central Excise Assistant Commissioner Central Excise Central Excise Service Tax Appellate Tribunal Custom, Excise and Service Tax Appellate Tribunal Orissa & Bihar Excise Act, 1915 High Court of Orissa High Court of Orissa High Court of Orissa High Court of Orissa High Court of Orissa

West Bengal Sales Tax Act, 1941 Assistant Commissioner

Commercial Taxes

Assistant Commissioner

Commercial Taxes

Assistant Commissioner Commercial Taxes Central Sales Tax Act, 1956 Additional Deputy Commissioner Additional Deputy Commissioner Sales Tax Tribunal Joint Commissioner (Appeal) Trade Tax Assistant Commissioner

Commercial Taxes

Sales Tax Tribunal Sales Tax Tribunal Sales Tax Tribunal Sales Tax Tribunal Sales Tax Tribunal Additional Commissioner

Commercial Tax

Additional Commissioner Commercial Tax Andhra Pradesh General Sales Tax Act, 1957 Additional Deputy Commissioner Additional Deputy Commissioner Sales Tax AppellateTribunal Sales Tax AppellateTribunal High Court, Andhra Pradesh High Court, Andhra Pradesh High Court, Andhra Pradesh

Name of the Statute Nature of the Dues Year Rs. in Lacs

Orissa Entry Tax Act, 1999 Entry Tax 2000-01 8.11

Entry Tax 2002-03 28.35

Entry Tax 2003-04 4.24

Entry Tax 2004-05 0.59

Orissa Sales Tax Act, 1947 Sales Tax 2002-03 1.85

Orissa VAT Act, 2004 VAT 2005-06 17.20

Name of the Statute Forum where dispute is Pending

Orissa Entry Tax Act, 1999 Sales Tax Tribunal Sales Tax Tribunal Sales Tax Tribunal Assistant Commissioner Orissa Sales Tax Act, 1947 Sales Tax Tribunal

Orissa VAT Act, 2004 Sales Tax Tribunal

x) The company does not have any accumulated losses at the end of the financial year. It has incurred cash losses in the current financial year. However it has not incurred any cash losses in the immediately preceding financial year.

xi) As per books and records maintained by the company and according to the information and explanations made available to us, the company has not defaulted in repayment of any dues to financial institutions, banks and debenture holders.

xii) According to information and explanations given to us and based on the documents and records produced, the company has not granted any loans and advances on the basis of the security by way of pledge of shares, debentures and other securities.

xiii) In our opinion, the company is not a chit fund or a nidhi/mutual fund/society. Accordingly, the provisions of clause 4(xiii) of the order are not applicable to the Company.

xiv) In our opinion the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the order are not applicable to the Company.

xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by its associates or subsidiaries or others from bank or financial institutions during the year.

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

xvii) On the basis of information received from the management and based on our overall analysis of the Balance Sheet of the Company, the company has not used any funds raised on short-term basis for long term purposes.

xviii) The company has not made any preferential allotment of shares during the year to any parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix) The company does not have any outstanding debentures during the year.

xx) The company has not raised any money through public issue during the year.

xxi) During the course of our examination of the books of accounts carried out in accordance with the generally accepted auditing practices in India for the purpose of reporting the true and fair view of the financial statements, we have neither come across any incidence of fraud on or by the company nor have we been informed of any such case by the Management.

2. Further to our other comments:

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) The Balance Sheet, Profit & Loss Account, Cash Flow Statement dealt with by this report are in agreement with the books of account.

c) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement comply with the accounting standards referred to in Sub- section (3C) of section 211 of the Companies Act, 1956.

d) 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 the books of account.

e) On the basis of written representations, received from the Directors and taken on record by the Board of Directors, none of the Director 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.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with notes thereon and attached thereto give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

For S. M.DAGA&CO

Firm Registration No.-303119E

Chartered Accountants

S M Daga Partner

Membership No. 4951 11,CliveRow, Kolkata - 700 001 Dated, The 1st May, 2010

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