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Auditor Report of Seshasayee Paper & Boards Ltd.

Mar 31, 2017

Report on the Standalone Financial Statements

We have audited the accompanying Standalone Financial Statements of SESHASAYEE PAPER AND BOARDS LIMITED (‘the Company’), which comprise the Balance Sheet as at 31 March 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of Significant Accounting Policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

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

Auditors’ Responsibility

Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit. We have taken into account the provisions of the Act, the Accounting and Auditing Standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2017 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

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

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

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

(d) in our opinion, the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) on the basis of the written representations received from the Directors as on 31 March 2017 and taken on record by the Board of Directors, none of the Directors is disqualified as on 31 March 2017 from being appointed as a Director in terms of Section 164(2) of the Act; and

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

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

(i) the Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note No. 10(i) (a) to the financial statements;

(ii) the Company did not have any long term contracts, including derivative contracts; and

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

(iv) details of Specified Bank Notes (SBN) held and transacted during the period from 8th November, 2016 to 30th December :

SBNs

Other denomination Notes

Total

Closing Cash in hand as on 08 11 2016

687500

256195

943695

( ) Permitted Receipts

12827500

9079111

21906611

(-) Permitted Payments

36500

4230761

4267261

(-) Amount deposited in Banks

13478500

4801399

18279899

Closing Cash in hand as on 30 12 2016

0

303146

303146

Notes :

(i) Permitted receipts under SBNs represent collection of SBNs tendered by public at Petroleum Retail outlet owned by the Company

(ii) Permitted payments under SBNs represent SBNs tendered by the Company at other Petroleum Retail outlets for purchase of petroleum products for Companies vehicles.

2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of Sub-section (11) pf Section 143 of the Act, we give in the Annexure “B” a statement on the matters specified in the Paragraphs 3 and 4 of the Order, to the extent applicable.

ANNEXURE “B” TO THE INDEPENDENT AUDITORS’ REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF SESHASAYEE PAPER AND BOARDS LIMITED.

The Annexure referred to in Paragraph 1 under the heading “Report on Other Legal and Regulatory Requirements” of our Report of even date:

(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) These fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) The title deeds of immovable properties are held in the name of the Company.

(ii) The Management has conducted physical verification of inventory at reasonable intervals and no material discrepancies were noticed.

(iii) The Company has granted unsecured loan to a Company covered in the register maintained under section 189 of the Companies Act, 2013.

(a) The terms and conditions of the grant of such loan are not prejudicial to the Company’s interest.

(b) The schedule of repayment of principal and payment of interest has been stipulated and the repayments or receipts are regular.

(c) There are no overdue amounts.

(iv) The Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013, in respect of loans, investments, provided by the Company. The Company has not provided any guarantee or security to any Company covered under Section 185.

(v) The Company has not accepted any deposits from the public.

(vi) The Central Government has prescribed maintenance of Cost Records under Subsection (1) of Section 148 of the Companies Act, 2013 and such accounts and records have been made and maintained.

(vii) According to the information and explanations given to us in respect of Statutory dues :

(a) The Company is regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other Statutory dues to the appropriate authorities and there were no undisputed amounts payable which were in arrears as at 31st March 2017 for a period of more than six months from the date they became payable.

(b) Details of dues of Income Tax or Sales Tax or Service Tax or Duty of Customs or Duty of Excise or Value Added Tax have not been deposited as on 31st March 2017 on account of disputes are given below :

Name of the Statute

Nature of dues

Amount Rs.lakhs

Forum where the dispute is pending

Period to which the dues belong

Central Excise Act, 1944

Excise Duty

134.88

CESTAT

February 2004-March 2005

- do -

- do -

13.16

- do -

January 2007 -June 2007

- do -

- do -

21.26

- do -

February 2008 -December 2012

- do -

- do -

7.67

- do -

December 2005 -June 2007

- do -

- do -

40.83

- do -

April 2007 -March 2011

- do -

- do -

2.43

Hon’ble High Court of Madras

07 122008

- do -

- do -

4.56

- do -

October -November 1996

Income Tax Act, 1961

TDS

1.86

Commissioner of Income Tax (Appeals)

2015-16

- do -

- do -

6.46

- do -

2016-17

- do -

- do -

3.11

- do -

2013-14

Customs Act, 1962

Customs Duty

624.17

CESTAT

March 2012 -January 2013

- do -

- do -

18.75

- do -

13 122002

(viii) The Company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government or dues to debenture holders.

(ix) The Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments) during the year.

(x) The Company has not noticed any fraud by the Company or any fraud on the Company by its Officers or employees or reported during the year.

(xi) The managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197, read with Schedule V to the Companies Act.

(xii) The Company is not a Nidhi Company and hence complying with the provisions of the Nidhi Rules, 2014 does not arise.

(xiii) All transactions with the related parties are in compliance with Sections 177 and 188 of Companies Act, 2013, where applicable and the details have been disclosed in the Financial Statements, etc., as required by the applicable Accounting Standards.

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.

(xv) The Company has not entered into any non-cash transactions with Directors or persons connected with him.

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

Suri & Co., S Viswanathan LLP Maharaj N R Suresh and Co.,

Firm Regn. No. 004283S Regn. No. 004770S/S200025 Firm Regn. No. 001931S

S Swaminathan Chella K Srinivasan N R Suresh

Membership No. 020583 Membership No. 023305 Membership No. 021661

Partner Partner Partner

Chartered Accountants Chartered Accountants Chartered Accountants

Chennai May 30, 2017


Mar 31, 2016

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF M/s SESHASAYEE PAPER AND BOARDS LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying Standalone Financial Statements of SESHASAYEE PAPER AND BOARDS LIMITED (''the Company''), which comprise the Balance Sheet as at 31 March 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of Significant Accounting Policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

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

Auditors’ Responsibility

Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit. We have taken into account the provisions of the Act, the Accounting and Auditing Standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

(d) in our opinion, the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) on the basis of the written representations received from the Directors as on 31 March 2016 and taken on record by the Board of

Directors, none of the Directors is disqualified as on 31 March 2016 from being appointed as a Director in terms of Section 164(2) of the Act; and

(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”.

(g) with respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules,

2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) the Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note No. 10(i)(a) to the financial statements;

(ii) the Company did not have any long-term contracts, including derivative contracts; and

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

2. As required by the Companies (Auditor''s Report) Order, 2016 (“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 “B” a statement on the matters specified in the Paragraphs 3 and 4 of the Order, to the extent applicable.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Seshasayee Paper and Boards Limited (“the Company”) as of March 31, 2016 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

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

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an

audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the Auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that :

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and Directors of the company; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

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

The Annexure referred to in Paragraph 2 under the heading ’’Report on Other Legal and Regulatory Requirements” of our Report of even date:

(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) These fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) The title deeds of immovable properties are held in the name of the Company.

(ii) The Management has conducted physical verification of inventory at reasonable intervals and no material discrepancies were noticed.

(iii) The Company has granted unsecured loan to a company covered in the register maintained under section 189 of the Companies Act, 2013.

(a) The terms and conditions of the grant of such loan are not prejudicial to the Company''s interest.

(b) The schedule of repayment of principal and payment of interest has been stipulated and the repayments or receipts are regular.

(c) There are no overdue amounts.

(iv) The Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013, in respect of loans, investments, provided by the Company. The company has not provided any guarantee or security to any company covered under Section 185.

(v) The Company has not accepted any deposits from the public.

(vi) The Central Government has prescribed maintenance of Cost Records under Subsection (1) of Section 148 of the Companies Act, 2013 and such accounts and records have been made and maintained.

(vii) According to the information and explanations given to us in respect of Statutory dues :

(a) The Company is regular in depositing undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other Statutory Dues to the appropriate authorities and there were no undisputed amounts payable which were in arrears as at 31st March 2016 for a period of more than six months from the date they became payable.

(b) Details of dues of Income Tax or Sales Tax or Service Tax or Duty of Customs or Duty of Excise or Value Added Tax have not been deposited as on 31st March 2016 on account of disputes are given below :

(viii) The Company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government or dues to debenture holders.

Name of the Statute

Nature of dues

Amount Rs, lakhs

Forum where the dispute is pending

Period to which the dues belong

Central Excise Act, 1944

Excise Duty

269.76

CESTAT

February 2004 -March 2005

- do -

- do -

102.93

- do -

May 2005 - June 2007

- do -

- do -

42.51

- do -

February 2008 -December 2012

- do -

- do -

12.36

- do -

March 2005 - June 2007

- do -

- do -

40.83

- do -

April 2007 - March 2011

- do -

- do -

2.43

Hon''ble High Court of Madras

07.12.2008

- do -

- do -

4.56

- do -

October - November 1996

Income Tax Act, 1961

TDS

1.86

Commissioner of Income Tax (Appeals)

2015-16

- do -

- do -

3.11

- do -

2013-14

Customs Act, 1962

Customs Duty

624.17

CESTAT

March 2012 - January 2013

- do -

- do -

18.75

- do -

13.12.2002


(ix) The Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments) during the year. Term Loans borrowed by the Company were applied for the purpose for which the loans were obtained.

(x) As explained to us no fraud by the Company or any fraud on the Company by its Officers or employees has been noticed or reported during the year.

(xi) The managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197, read with Schedule V to the Companies Act.

(xii) The Company is not a Nidhi Company and hence complying with the provisions of the Nidhi Rules, 2014 does not arise.

(xiii) All transactions with the related parties are in compliance with Sections 177 and 188 of Companies Act, 2013, where applicable and the details have been disclosed in the Financial Statements, etc., as required by the applicable Accounting Standards.

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.

(xv) The Company has not entered into any non-cash transactions with Directors or persons connected with him.

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

Suri & Co., S Viswanathan LLP Maharaj N R Suresh and Co.,

Firm Regn. No. 004283S Regn. No. 004770S/S200025 Firm Regn. No. 001931S

R Mahesh Chella K Srinivasan N R Suresh

Membership No. 024775 Membership No. 023305 Membership No. 021661

Partner Partner Partner

Chartered Accountants Chartered Accountants Chartered Accountants

Chennai May 28, 2016


Mar 31, 2015

Report on the Standalone Financial Statements

We have audited the accompanying Standalone Financial Statements of SESHASAYEE PAPER AND BOARDS LIMITED ('the Company'), which comprise the Balance Sheet as at 31st March 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of Significant Accounting Policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

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

Auditors' Responsibility

Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit. We have taken into account the provisions of the Act, the Accounting and Auditing Standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the Auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the Auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("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 Paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

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

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

(d) in our opinion, the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

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

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

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note No. 10(i)(a) to the financial statements;

ii. the Company did not have any long- term contracts including derivative contracts; and

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

ANNEXURE TO INDEPENDENT AUDITORS' REPORT :

The Annexure referred to in Paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements", of our Report of even date:

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

(b) The fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

(ii) (a) The Management has carried out physical verification of inventory at reasonable intervals.

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

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) The Company has not granted any loans, secured / unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

(iv) There is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services and no major weakness has been noticed in the internal control system.

(v) The Company has not accepted any deposits from the public.

(vi) The Central Government has prescribed maintenance of Cost Records under Section 148(1) of the Companies Act, 2013 and such accounts and records have been made and maintained.

(vii) According to the information and explanations given to us in respect of statutory dues:

(a) The Company is regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Value Added Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities and there were no undisputed amounts payable which were in arrears as at 31st March 2015 for a period of more than six months from the date they became payable.

(b) Details of dues of Value Added Tax, Customs Duty, Excise Duty and Cess which have not been deposited as on 31st March 2015 on account of disputes are given below:

Name of the Nature of Amount Forum where the Statute dues Rs. lakhs dispute is pending

Central Excise Excise Duty 269.76 CESTAT Act, 1944

- do - - do - 102.93 - do -

- do - - do - 42.51 - do -

- do - - do - 12.36 - do -

- do - - do - 2.43 Hon'ble High Court of Madras

- do - - do - 4.56 - do -

Kerala Value Value 0.69 Deputy Added Tax Added Tax Commissioner Act 2003 (Appeals)

Customs Act, Customs Duty 624.17 CESTAT 1962

- do - - do - 18.75 - do -

Name of the Period to which Statute the dues belong

Central Excise February 2004 - Act, 1944 March 2005

- do - May 2005 - June 2007

- do - February 2008 - December 2012

- do - March 2005 - June 2007

- do - 07.12.2008

- do - October - November 1996

Kerala Value 2009-10 Added Tax Act 2003

Customs Act,1962 March 2012 - January 2013

- do - 13.12.2002

(c) The amounts which were required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules thereunder, has been transferred to such fund within time.

(viii) The Company has no accumulated losses as at March 31, 2015 and has not incurred cash losses during the financial year ended on that date or in the immediately preceding financial year.

(ix) The Company has not defaulted in repayment of dues to financial institution or banks. There are no dues payable to the debenture holders during the year.

(x) The Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xi) Term loans borrowed by the Company were applied for the purpose for which the loans were obtained.

(xii) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

Suri & Co., M/s S Viswanathan Firm Regn. No. 004283S Firm Regn. No. 004770S

Maharaj N R Suresh and Co., S Swaminathan Firm Regn. No. 001931S Membership No. 020583 Partner Chartered Accountants

Chella K Srinivasan N R Suresh Membership No. 023305 Membership No. 021661 Partner Partner Chartered Accountants Chartered Accountants

Chennai May 30, 2015


Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of SESHASAYEE PAPER AND BOARDS LIMITED which comprise of the Balance Sheet as at 31st March 2014, Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of Significant Accounting Policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal 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 judgement, 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 entity''s internal control. An audit also includes evaluating the appropriateness of Accounting Policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government in terms of sub- section (4A) of Section 227 of the Act, we give in the annexure a statement on the matters specified in the paragraphs 4 and 5 of the said Order.

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

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

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

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

(d) in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956;

(e) on the basis of written representations received from the Directors as on 31st March 2014 and 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 Companies Act, 1956.

Referred to in Paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our Report of even date :

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

(b) The fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) Fixed assets of a substantial part, affecting the going concern, have not been disposed off during the year.

(ii) (a) The Management has carried out physical verification of inventory at reasonable intervals.

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

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) The Company has not granted any loans, secured / unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(iv) There is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services and no major weakness has been noticed in the internal control system.

(v) (a) The particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, have been entered in the Register required to be maintained under that Section.

(b) The transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable, having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) The Company has an internal audit system commensurate with its size and nature of its business.

(viii) Central Government has prescribed maintenance of Cost Records under Section 209(1)(d) of the Companies Act, 1956 and such accounts and records have been made and maintained.

(ix) According to the information and explanations given to us in respect of statutory dues:

(a) The Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Value Added Tax, Wealth Tax, Service tax, Custom Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities and there were no undisputed amounts payable which were in arrears as at 31st March 2014 for a period of more than six months from the date they became payable.

(b) Details of dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Value Added Tax, Customs Duty,

Excise Duty and Cess which have not been deposited as on 31st March 2014 on account of disputes are given below:

Name of the Nature of Amount Forum where the Period to which Statute dues Rs. lakhs dispute is pending the dues belong

Central Excise Excise Duty 269.76 CESTAT February 2004 - Act, 1944 March 2005

- do - - do - 102.93 - do - May 2005 - June 2007

- do - - do - 42.51 - do - February 2008 - December 2012

- do - - do - 2.43 - do - 07.12.2008

- do - - do - 12.36 - do - April 2001 - June 2007

- do - - do - 4.56 Hon''ble High Court October - November 1996 of Madras

Customs - do - 2164.17 CESTAT March 2012 - January 2013 Act, 1962

Govt. of Generation 1840.21 Hon''ble Supreme June 2003 - March 2013 Tamilnadu Electrical Tax with Court of India Inspectorate interest

Kerela Value Sales Tax 0.69 Deputy 2009-10

Added Tax Commissi- oner

Act 2003 (Appeals)

(x) The Company has no accumulated losses as at March 31, 2014 and has not incurred cash losses during the financial year ended on that date or in the immediately preceding financial year.

(xi) The Company has not defaulted in repayment of dues to financial institution or banks. There are no dues payable to the debenture holders during the year.

(xii) The Company has granted a loan on the basis of security by way of pledge of shares and adequate documents and records for such loan has been maintained.

(xiii) The Company is not a chit fund / nidhi / mutual benefit fund / society and hence, Clause (xiii) of Paragraph 4 of the Order is not applicable to the Company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments.

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

(xvi) Term loans borrowed by the Company were applied for the purpose for which the loans were obtained.

(xvii) Funds raised on short term basis have not been used for long term investments.

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

(xix) The Company has not issued any debentures and hence, creation of charge does not arise.

(xx) The Company has not raised any money through public issues and hence, disclosure and verification of end use of money raised through public issues do not arise.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

Suri & Co., M/S Viswanathan Maharaj N R Suresh & Co.,

Firm Regn. No. 004283S Firm Regn. No. 004770S Firm Regn. No. 001931S

S Swaminathan Chella K Srinivasan N R Suresh

Membership No. 020583 Membership No. 023305 Membership No. 021661

Partner Partner Partner

Chartered Accountants Chartered Accountants Chartered Accountants

Chennai

May 30, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of SESHASAYEE PAPER AND BOARDS LIMITED which comprise of the Balance Sheet as at 31st March 2013, Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of Significant Accounting Policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

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

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

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (''the Order'') issued by the Central Government in terms of Sub-section (4A) of Section 227 of the Act,

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

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

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

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

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

(d) in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash

Flow Statement comply with the Accounting Standards referred to in Sub-section (3C) of Section 211 of the Act;

(e) on the basis of written representations received from the Directors as on 31st March 2013 and 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.

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

Referred to in Paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our Report of even date :

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

(b) The fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) Fixed assets of a substantial part, affecting the going concern, have not been disposed off during the year.

2 (a) The Management has carried out Physical verification of inventory at reasonable intervals.

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

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3 (a) The Company has not granted any loans, secured / unsecured to companies, firms or other parties covered in the Register maintained under Section 301 of the Act.

(b) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the Register maintained under Section 301 of the Act.

4 There is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services and no major weakness has been noticed in the internal control system.

5 (a) 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) The transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable, having regard to the prevailing market prices at the relevant time.

6 The Company has not accepted any deposits from the public.

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

8 Central Government has prescribed maintenance of Cost Records under Section 209(1)(d) of the Act and such accounts and records have been made and maintained.

9 According to the information and explanations given to us in respect of statutory dues :

(a) The Company is regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Value Added Tax, Wealth Tax, Service tax, Custom Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities and there were no undisputed amounts payable which were in arrears as at 31st March 2013 for a period of more than six months from the date they became payable..

10 The Company has no accumulated losses as at March 31, 2013 and has not incurred cash losses during the financial year ended on that date or in the immediately preceding financial year.

11 The Company has not defaulted in repayment of dues to financial institution or banks. There are no dues payable to the debenture holders during the year.

12 The Company has granted a loan on the basis of security by way of pledge of shares and adequate documents and records for such loan has been maintained.

13 The Company is not a chit fund / nidhi / mutual benefit fund / society and hence, Clause (xiii) of Paragraph 4 of the Order is not applicable to the Company.

14 The Company is not dealing in or trading in shares, securities, debentures and other investments.

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

16 Term loans borrowed by the Company were applied for the purpose for which the loans were obtained.

17 Funds raised on short term basis have not been used for long term investments.

18 The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act, during the year.

19 The Company has not issued any debentures and hence, creation of charge does not arise.

20 The Company has not raised any money through public issues and hence, disclosure and verification of end use of money raised through public issues do not arise.

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

For M/s S VISWANATHAN For SURI & CO.,

Firm Regn. No. 004770S Firm Regn. No. 004283S

Chella K Srinivasan S Swaminathan

Membership No. 023305 Membership No. 020583

Chennai Partner Partner

May 30, 2013

Chartered Accountants Chartered Accountants


Mar 31, 2012

1 We have audited the attached Balance Sheet of M/s SESHASAYEE PAPER AND BOARDS LIMITED, as at 31st March 2012, the Statement of Profit and Loss and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2 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.

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

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

(i) We have obtained all the information and explanations which, to the best of our

knowledge and belief, were necessary for the purposes of our audit.

(ii) 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.

(iii) 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.

(iv)In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement, dealt with by this Report, comply with the Accounting Standards, referred to in Section 211(3C) of the Companies Act, 1956, so far as applicable.

(v) On the basis of declarations from the Directors of the Company, as at March 31, 2012, and taken on record by the Board of Directors of the Company, no Director is disqualified as on March 31, 2012, from being appointed as a Director of the Company, in terms of Section 274(1)(g) of the Companies Act, 1956.

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

(a) in the case of the Balance Sheet, of the state of the Company's affairs, as at March 31, 2012;

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

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

ANNEXURE TO AUDITORS' REPORT :

Referred to in Paragraph 3 of our Report of even date :

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

(b) The fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) Fixed assets of a substantial part, affecting the going concern, have not been disposed off during the year.

2 (a) The Management has carried out physical verification of inventory at reasonable intervals.

(b) The procedure of physical verification of inventory, followed by the Management, is reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3 (a) The Company has granted an unsecured loan of Rs 16.35 crores to a Company covered in the Register maintained under Section 301 of the Companies Act, 1956 and the balance outstanding as on 31st March 2012 was Rs 5 crores.

(b) The rate of interest and other terms and conditions of the loan given are, prima facie, not prejudicial to the interest of the Company.

(c) The payment of interest and repayment of principal are regular.

(d) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956 and hence, Sub-clauses (f) and (g) of Clause (iii) of Paragraph 4 of the Order are not applicable.

4 There is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services and no major weakness has been noticed in the internal control system.

5 (a) The particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, have been entered in the Register required to be maintained under that Section.

(b) The transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable, having regard to the prevailing market prices at the relevant time.

6 The Company has not accepted any deposits from the public.

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

8 Central Government has prescribed maintenance of Cost Records under Section 209(1)(d) of the Companies Act, 1956 and such accounts and records have been made and maintained.

9 (a) The Company is regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities and there were no undisputed amounts payable which were in arrears as at 31st March 2012 for a period of more than six months from the date they became payable.

(b) Details of dues of Income Tax, Wealth Tax, Service Tax, Value Added Tax, Customs Duty, Excise Duty and Cess which have not been deposited as on 31st March 2012 on account of disputes are given below:

Name of the Nature of Amount Forum where the Period to which Statute dues Rs lakhs dispute is pending the dues belong

Central Excise Excise Duty 4.69 CESTAT March - November 2005 Act, 1944 -do - - do - 76.61 CESTAT May - December 2005

-do - - do - 269.76 CESTAT February 2004 - March 2005

-do - - do - 7.67 Commissioner December 2005 - June 2007 (Appeals)

-do - - do - 26.32 - do - January - June 2007

-do - - do - 2.43 - do - For the day 07 12 2008

-do - - do - 4.56 Hon'ble High Court October - November 1996 of Madras Income Tax Income Tax 313.03 Commissioner of Assessment Year 2007-08 Act, 1961 Income Tax (Appeals)

-do - - do - 738.27 - do - Assessment Year 2008-09

10 The Company has no accumulated losses as at March 31, 2012 and has not incurred cash losses during the financial year ended on that date or in the immediately preceding financial year.

11 The Company has not defaulted in repayment of dues to financial institution or banks. There are no dues payable to the debenture holders during the year.

12 The Company has granted a loan on the basis of security by way of pledge of shares and adequate documents and records for such loan has been maintained.

13 The Company is not a chit fund / nidhi / mutual benefit fund / society and hence, Clause (xiii) of Paragraph 4 of the Order is not applicable to the Company.

14 The Company is not dealing in or trading in shares, securities, debentures and other investments.

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

16 Term loans borrowed by the Company were applied for the purpose for which the loans were obtained.

17 Funds raised on short term basis have not been used for long term investments.

18 The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956, during the year.

19 The Company has not issued any debentures and hence, creation of charge does not arise.

20 The Company has not raised any money through public issues and hence, disclosure and verification of end use of money raised through public issues do not arise.

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

For SURI & CO., For M/s S VISWANATHAN

Firm Regn. No. 004283S Firm Regn. No. 004770S

S Swaminathan Chella K Srinivasan

Membership No. 020583 Membership No. 023305 Chennai Partner Partner

May 29, 2012 Chartered Accountants Chartered Accountants


Mar 31, 2010

We have audited the attached Balance Sheet of M/s SESHASAYEE PAPER AND BOARDS LIMITED, as at 31st March 2010, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing 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.

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.

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.

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

In our opinion, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement, dealt with by this Report, comply with the Accounting Standards, referred to in

Section 211(3C) of the Companies Act, 1956, so far as applicable.

On the basis of declarations from the Directors of the Company, as at March 31, 2010, and taken on record by the Board of Directors of the Company, no Director is disqualified as on March 31, 2010, from being appointed as a Director of the Company, in terms of Section 274(1)(g) of the Companies Act, 1956.

The Cess, specified under Sub-section (2) of Section 441A of the Companies Act, 1956, has not been provided for nor paid, in view of the rate and manner of payment having not yet been notified by the Central Government.

In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read with the notes thereon, 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 the Companys affairs, as at March 31, 2010;

(ii) in the case of the Profit and Loss Account, of the PROFIT for the financial year ended on that date; and

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

As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government under Section 227(4A) of the Companies Act, 1956, we state that :

1 (a) The Company has maintained proper records showing full particulars including

quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) Fixed assets of a substantial part, affecting the going concern, have not been disposed off during the year.

2 (a) The Management has carried out

physical verification of inventory at reasonable intervals.

(b) The procedure of physical verification of inventory, followed by the Management, is reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3 (a) The Company has granted an unsecured

loan of Rs fifty lakhs to a Company covered in the Register maintained under Section 301 of the Companies Act, 1956.

(b) The rate of interest and other terms and conditions of the loan given are, prima facie, not prejudicial to the interest of the Company.

(c) The payment of interest is regular and the repayment of the principal has not fallen due and hence, Sub-clause (d) of Clause (iii) of Paragraph 4 of the Order is not applicable and

(d) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956 and hence, Sub-clauses (f) and (g) of Clause (iii) of Paragraph 4 of the Order are not applicable.

4 There is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services and no major weakness has been noticed in the internal control system.

5 (a) The particulars of contracts or

arrangements referred to in Section 301 of the Companies Act, 1956, have been entered in the Register required to be maintained under that Section.

(b) The transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable, having regard to the prevailing market prices at the relevant time.

6 The Company has not accepted any deposits from the public.

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

8 Central Government has prescribed maintenance of Cost Records under Section 209(1)(d) of the Companies Act, 1956 and such accounts and records have been made and maintained.

9 (a) The Company is 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, Custom Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities.

(b) The Company has not deposited the disputed Excise Duty of Rs 389.61 lakhs, consisting of Rs 4.56 lakhs, for the period October 1996 to November 1996, Rs 4.69 lakhs for the period March 2005 to November 2005, Rs 76.61 lakhs, for the period May 2005 to December 2006

and Rs 269.76 lakhs, for the period February 2004 to March 2005, on which appeals are pending before the Customs, Excise and Service Tax Appellate Tribunal and Rs 7.67 lakhs, for the period December 2005 to June 2007 and Rs 26.32 lakhs for the period January 2007 to June 2007 on which appeals are pending before the Commissioner (Appeals) and disputed Income Tax of Rs 1.43 crores for the Assessment Year 2007-08, on which appeals are pending before the Commissioner of Income Tax (Appeals).

10 The Company has no accumulated losses as at March 31, 2010 and has not incurred cash losses during the financial year ended on that date or in the immediately preceding financial year.

11 The Company has not defaulted in repayment of dues to financial institution or banks. There are no dues payable to the debenture holders during the year.

12 The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and hence, maintenance of adequate documents and records for such cases does not arise.

13 The Company is not a chit fund / nidhi / mutual benefit fund / society and hence,

Clause (xiii) of Paragraph 4 of the Order is not applicable to the Company.

14 The Company is not dealing in or trading in shares, securities, debentures and other investments.

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

16 Term loans borrowed by the Company were applied for the purpose for which the loans were obtained.

17 Funds raised on short term basis have not been used for long term investments.

18 The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956, during the year.

19 The Company has not issued any debentures and hence, creation of charge does not arise.

20 The Company has not raised any money through public issues and hence, disclosure and verification of end use of money raised through public issues do not arise.

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

For SURI & CO., For Messrs S VISWANATHAN Firm Regn. No. 004283S Firm Regn. No. 004770S S Swaminathan Chella K Srinivasan Membership No. 20583 Membership No. 23305 Chennai Partner Partner May 29, 2010 Chartered Accountants Chartered Accountants

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