Auditor Report of Soma Papers & Industries Ltd.

Mar 31, 2014

1. We have audited the accompanying financial statements SOMA PAPERS & INDUSTRIES LIMITED which comprise the Balance Sheet as at 31st March, 2014, the profit and loss account and cash flow statement for the year ended and summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

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

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

i) paragraph 4(d)(i) regarding preparation of accounts on the basis of a ''going concern'' having consequential impact on the loss for the year, reserves and surplus and assets of the Company,

ii) non provision of interest on Sales Tax Loan (SICOM.), Security Deposit.(The amount remains unascertained. read together with Note no.16 regarding balances of Sundry debtors, Sundry Creditors, Balance with Bank and other advances being subject to confirmations/ reconciliation,

iii) and other notes appearing in the said Notes and those appearing elsewhere in the accounts, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India,

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

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

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

Report on Other Legal and Regulatory Requirements

5. As required by Companies (Auditor''s report) (Amendment) Order ''2003 issued by the Central Government of India in terms of sub section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks, as were considered appropriate, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

6. 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; except para 14 & 16 of Notes on Financial Statement;

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 and proper returns adequate for the purposes of our audit have been received from branches if any, not visited by us;

c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are sin 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 subsection (3C) of section 211 of the Companies Act, 1956;subject to,

Policy regarding appropriateness of going concern assumption used for preparing these accounts because the net worth of the Company is fully eroded and the Company is a sick industrial company within the meaning of clause (O) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), the accounts do not include the adjustments that would arise if these assumption had not been used in preparing these accounts. (Para 13 of Notes to Accounts)

e. on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

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

ANNEXURE TO THE AUDITORS'' REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

1. In respect of its fixed assets:

a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, the management has physically verified during the year certain fixed assets in accordance with a phased programmed of verification, which in our opinion, is reasonable having regard to the size of the Company and nature of its fixed assets. The discrepancies noticed by the management on such verification were not material and have been properly dealt with in the books of account.

c) As we observed, during the year, the Company has not disposed off substantial part of its fixed assets.

2. In respect of its inventories:

a) As informed to us, there is no inventory lying in the hands of the Company.

b) Since there no inventory no inventory verified.

c) No stock record is maintained since there is no inventory.

3. According to information and explanations given to us, in respect of loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

a) The Company has given unsecured loans in previous year is Rs.NIL and repaid worth Rs.75,463. The Balance of loan taken as on 31.03.2014 is worth Rs.10,00,000.

b) The loan taken / given is interest free and other terms conditions of such loans are prima facie not prejudicial to the interest of the Company.

c) The interest free loan taken / given is repayable on demand.

d) As informed to us, there are no overdue amounts of more than Rs. one lakh in respect of such loan and as such clause 4(iii)(d) of the Companies (Auditor''s report) (Amendment) Order ''2004 is not applicable.

4. In our opinion and according to the information and explanations given to us, 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, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. a) In our opinion and according to the information and explanations given to us, the Company has not entered into any transactions that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956.

b) As the company not entered in transactions that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956, no comments are called in respect of clause 4(v)(b) of the Companies (Auditor''s report) (Amendment) Order '' 2004 .

6. According to information and explanations given to us, the Company has not accepted any deposit from the public during the year.

7. There was no internal audit system in the Company during the year.

8. As explained to us, the Central Government has not prescribed maintenance of cost records under Section 209 (1)(d) of the Act in the case of the Company.

9. a) According to the records of the Company, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and any other statutory dues, with the appropriate authorities, except the sales tax liability of different states worth Rs.16.46 and deferred sales tax liability along with interest due there on (Unascertained) as on 31/03/2014 outstanding for a period of more than six months from date it became payable.

b) According to the records of the Company, there are no dues of sales tax/ income tax / custom duty / wealth tax / service tax / cess, which have not been deposited on account of any dispute. The disputed amounts that have not been deposited in respect of excise duty / income tax are as under:

Description Amount Period to which it Forum where dispute is pending Rs. relates

Excise duty 234,761 1988-1989 Excise and Gold (Control) Appellate Tribunal

Income Tax 19,38,082 2003-2004 Penalty Proceeding Before ITAT

10. The accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth, and it has incurred cash losses during the current financial year. In immediately preceding financial year cash losses has been incurred.

11. According to the information and explanations given to us, the Company has defaulted in repayment of dues to banks, financial institutions and debenture holder.

The details of defaults as at 31/03/2014 in repayment of dues to the financial institutions, banks and debenture holder are as under:

(Amount in Rs.)

Period of default Overdue Financial Banks *Debenture towards Institution holder

Amount of default

Upto 1 year Interest Unascertained Nil Nil Principle Nil

More than 1 year and upto Interest Unascertained Nil Nil 2 years

Principle Nil Nil Nil

More than 2 years and upto Interest Unascertained Nil Nil 5 years Nil

More than 5 years Interest Unascertained Nil Nil Principle 2,55,65,564

** Refer along with the Auditors report.

*** Interest provided if any, is on estimate basis or considered as unascertained.

12. Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/ or advances on the basis of security by way of pledge of shares, debentures, and other securities

13. According to the information and explanations given to us, the Company has given guarantee for loans taken by others from banks and financial institutions. According to the information and explanation given to us, we are of the opinion that the terms and conditions thereof are not prima facie, prejudicial to the interest of the company

14. The Company has not taken any term loan during the year.

15. According to information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have, prima-facie, have not been used for long-term investments.

16. 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.

17. No debentures have been issued by the Company during the year and hence, the question of creating securities in respect thereof does not arise.

18. The Company has not raised any money by way of public issue during the year.

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

20. In our opinion, and according to information and explanations given to us, no comments are called for in the case of clauses (xiii) and (xiv) of paragraph 4 of the Companies (Auditor''s report) (Amendment) Order ''2004 as the same are not applicable to the Company during the year.

FOR JAIN MAHESHWARY & COMPANY Chartered Accountants

Dharmesh Shah

PARTNER

Membership No.: 106620

Mumbai, Dated: 31st May,2014

---

Mar 31, 2013

1. We have audited the accompanying financial statements SOMA PAPERS & INDUSTRIES LIMITED which comprise the Balance Sheet as at 31st March, 2013, the profit and loss account and cash flow statement for the year ended and summary of significant accounting policies and other explanatory information.

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

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

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

i) paragraph 4(d)(1) regarding preparation of accounts on the basis of a ''going concern'' having consequential impact on the loss for the year, reserves and surplus and assets of the Company .

ii) non provision of interest on Sales Tax Loan (SICOM.), Security Deposit. (The amount remains unascertained), read together with Note no.27 regarding balances of Sundry debtors, Sundry Creditors, Balance with Bank and other advances being subject to confirmations/ reconciliation,

iii) and other notes appearing in the said Notes and those appearing elsewhere in the accounts, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India

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

(b) in the case of the Profit and Loss Account, of the profit/ loss for the year ended on that date; and

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

5 As required by Companies (Auditor''s report) (Amendment) Order ''2003 issued by the Central Government of India in terms of sub section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks, as were considered appropriate, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

6 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; except Para 14 of Notes on Financial Statement;

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 and proper returns adequate for the purposes of our audit have been received from branches if any, not visited by us;

c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are sin 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 subsection (3C) of section 211 of the Companies Act, 1956;subjectto,

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit except Para 13 of Notes on Financial Statement;

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, profit and loss account and cash flow statement dealt with in 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 subsection (3C) of section 211 of the Companies Act, 1956;subject to,

(i) Para A of Significant Accounting Policy regarding appropriateness of going concern assumption used for preparing these accounts because the net worth of the Company is fully eroded and the Company is a sick industrial company within the meaning of clause (O) of sub- section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), the accounts do not include the adjustments that would arise if these assumption had not been used in preparing these accounts.

e) On the basis of representations received from the directors of the Company as at 31 <* March, 2013 and taken on record by the board of directors, we report that none of the directors is disqualified as at 31st March, 2013 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

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

ANNEXURE TO THE AUDITORS'' REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

1. In respect of its fixed assets:

a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, the management has physically verified during the year certain fixed assets in accordance with a phased programmed of verification, which in our opinion, is reasonable having regard to the size of the Company and nature of its fixed assets. The discrepancies noticed by the management on such verification were not material and have been properly dealt with in the books of account.

c) As we observed, during the year, the Company has not disposed off substantial part of its fixed assets.

2. In respect of its inventories:

a) As informed to us, there is no inventory lying in the hands of the Company.

b) Since there no inventory no inventory verified.

c) No stock record is maintained since there is no inventory.

3. According to information and explanations given to us, in respect of loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

a) The Company has taken unsecured loans, the loan taken in previous year is Rs. 30,000 and repaid worth Rs. Nil. The Balance of loan taken as on 31.03.2013 is worth Rs.10,75,463.

b) The loan taken / given is interest free and other terms conditions of such loans are prima facie not prejudicial to the interest of the Company.

c) The interest free loan taken / given is repayable on demand.

d) As informed to us, there are no overdue amounts of more than Rs. one lakh in respect of such loan and as such clause 4(iii)(d) of the Companies (Auditor''s report) (Amendment) Order ''2004 is not applicable.

4. In our opinion and according to the information and explanations given to us, 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, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. a) In our opinion and according to the information and explanations given to us, the Company has not entered into any transactions that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956.

b) As the company not entered in transactions that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956, no comments are called in respect of clause 4(v)(b) of the Companies (Auditor''s report) (Amendment) Order '' 2004 .

6. According to information and explanations given to us, the Company has not accepted any deposit from the public during the year.

7. There was no internal audit system in the Company during the year.

8. As explained to us, the Central Government has not prescribed maintenance of cost records under Section 209 (l)(d) of the Act in the case of the Company.

9. a) According to the records of the Company, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and any other statutory dues, with the appropriate authorities, except the sales tax liability of different states worth Rs.16.46 and deferred sales tax liability along with interest due there on (Unascertained) as on 31/03/2013 outstanding for a period of more than six months from date it became payable. b) According to the records of the Company, there are no dues of sales tax/ income tax / custom duty / wealth tax / service tax / cess, which have not been deposited on account of any dispute. The disputed amounts that have not been deposited in respect of excise duty / income tax are as under: Description Amount Period to which it Forum where dispute is pending

Rs. relates

Excise duty 234,761 1988-1989 Excise and Gold (Control)

Appellate Tribunal Income Tax 19,38,082 2003-2004 Penalty Proceeding Before ITAT

10. The accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth, and it has incurred cash losses during the current financial year. In immediately preceding financial year cash losses has been incurred.

11. According to the information and explanations given to us, the Company has defaulted in repayment of dues to banks, financial institutions and debenture holder.

The details of defaults as at 31/03/2013 in repayment of dues to the financial institutions, banks and debenture holder are as under:

(Amount in Rs.)

Period of default Overdue Financial Banks *Debenture towards Institution holder Amount of default

Upto l year Interest Unascertained Nil Nil Principle Nil

More than 1 year and upto Interest Unascertained Nil Nil 2 years

Principle Nil Nil Nil

More than 2 years and upto Interest Unascertained Nil Nil 5 years Nil

More than 5years Interest Unascertained Nil Nil

Principle 2,55,65,564

** Refer along with the Auditors report.

*** Interest provided if any, is on estimate basis or considered as unascertained.

12. Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/ or advances on the basis of security by way of pledge of shares, debentures, and other securities

13. According to the information and explanations given to us, the Company has given guarantee for loans taken by others from banks and financial institutions. According to the information and explanation given to us, we are of the opinion that the terms and conditions thereof are not prima facie, prejudicial to the interest of the company

14. The Company has not taken any term loan during the year.

15. According to information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have, prima-facie, have not been used for long-term investments.

16. 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.

17. No debentures have been issued by the Company during the year and hence, the question of creating securities in respect thereof does not arise.

18. The Company has not raised any money by way of public issue during the year.

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

20. In our opinion, and according to information and explanations given to us, no comments are called for in the case of clauses (xiii) and (xiv) of paragraph 4 of the Companies (Auditor''s report) (Amendment) Order ''2004 as the same are not applicable to the Company during the year.

FOR JAIN MAHESHWARY & COMPANY

Chartered Accountants

DharmeshShah

PARTNER

Membership No.: 106620

Mumbai, Dated: 31st May,2013

---

Mar 31, 2012

1. We have audited the attached balance sheet of SOMA PAPERS & INDUSTRIES LIMITED as at 31st March, 2012, 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 Company's management. Our responsibility is to express an opinion on the 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 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 Companies (Auditor's report) (Amendment) Order '2004 issued by the Central Government of India in terms of sub section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks, as were considered appropriate, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the annexure referred to in paragraph 3 above, we report that:

fl) 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 except para 13 of Notes on Financial Statement;

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, profit and loss account and cash flow statement dealt with in this report are in agreement with the books of account;

d) Subject to what is stated in paragraph (i) below, in our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the Accounting Standards referred to in sub-Section (3C) of Section 211 of the Companies Act, 1956, to the extent applicable;

(i) Para A of Significant Accounting Policy regarding appropriateness of going concern assumption used for preparing these accounts because the net worth of the Company is fully eroded and the Company is a sick industrial company within the meaning of clause (O) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), the accounts do not include the adjustments that would arise if these assumption had not been used in preparing these accounts.

e) On the basis of representations received from the directors of the Company as at 31st March, 2012 and taken on record by the board of directors, we report that none of the directors is disqualified as at 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 subject to our observations in

i) paragraph 4(d)(i) regarding preparation of accounts on the basis of a 'going concern' having consequential impact on the loss for the year, reserves and surplus and assets of the Company .

ii) non provision of interest on Sales Tax Loan (S1COM.), Security Deposit.(The amount remains unascertained).

iii) read together with Note no.27 regarding balances of Sundry debtors, Sundry Creditors, Balance with Bank and other advances being subject to confirmations/ reconciliation, and other notes appearing in the said Schedule and those appearing elsewhere in the accounts, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the balance sheet, of the state of affairs of the Company as at 31st March, 2012;

b) in the case of the profit and loss account, of the loss of the Company 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 the date.

ANNEXURE TO THE AUDITORS' REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

1. In respect of its fixed assets:

a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, the management has physically verified during the year certain fixed assets in accordance with a phased programmed of verification, which in our opinion, is reasonable having regard to the size of the Company and nature of its fixed assets. The discrepancies noticed by the management on such verification were not material and have been properly dealt with in the books of account.

c) As we observed, during the year, the Company has not disposed off substantial part of its fixed assets.

2. In respect of its inventories:

a) As informed to us, there is no inventory lying in the hands of the Company.

b) Since there no inventory no inventory verified.

c) No stock record is maintained since there is no inventory.

3. According to information and explanations given to us, in respect of loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

a) The Company has taken unsecured loans, the loan taken in previous year is Rs.9,90,000 and repaid worth Rs.4,65,000. The Balance of loan taken as on 31.03.2012 is worth Rs.10,45,463.

b) The loan taken / given is interest free and other terms conditions of such loans are, prima facie not prejudicial to the interest of the Company.

c) The interest free loan taken / given is repayable on demand.

d) As informed to us, there are no overdue amounts of more than Rs. one lakh in respect of such loan and as such clause 4(iii)(d) of the Companies (Auditor's report) (Amendment) Order '2004 is not applicable.

4. In our opinion and according to the information and explanations given to us, 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, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

a) In our opinion and according to the information and explanations given to us, the Company has not entered into any transactions that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956.As the company not entered in transactions that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956, no comments are called in respect of clause 4(v)(b) of the Companies (Auditor's report) (Amendment) Order ' 2004 .

5. According to information and explanations given to us, the Company has not accepted any deposit from the public during the year.

6. There was no internal audit system in the Company during the year.

7. As explained to us, the Central Government has not prescribed maintenance of cost records under Section 209 (l)(d) of the Act in the case of the Company.

8. a) According to the records of the Company, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and any other statutory dues, with the appropriate authorities, except the sales tax liability of different states worth Rs.16.46 and deferred sales tax liability along with interest due there on (Unascertained) as on 31/03/2012 outstanding for a period of more than six months from date it became payable.

b) According to the records of the Company, there are no dues of sales tax/ income tax / custom duty / wealth tax / service tax / cess, which have not been deposited on account of any dispute. The disputed amounts that have not been deposited in respect of excise duty / income tax are as under: Description Amount Period to which it Forum where dispute is pending Rs. relates

Descript amount period to which it forum where dispute is pending Rs Relates Excise duty 234,761 1988-1989 Excise and Gold (Control)

Appellate Tribunal

Income Tax 19,38,082 2003-2004 Penalty Proceeding Before ITAT

9. The accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth, and it has incurred cash losses during the current financial year. In immediately preceding financial year cash losses has been incurred.

10. According to the information and explanations given to us, the Company has defaulted in repayment of dues to banks, financial institutions and debenture holder..

The details of defaults as at 31/03/2012 in repayment of dues to the financial institutions, banks and debenture holder are as under:

(Amount in Rs.)

Period of default Overdue Financial Banks * Debenture towards Institution holder

Amount of default

Upto 1 year Interest Unascertained Nil Nil

Principle Nil

More than 1 year and upto Interest Unascertained Nil Nil

2 years

Priciple Nil Nil Nill

More than 2 years and upto Interest Unascertained Nil Nil

5 years Nil

More than 5 years Interest Unacertaine Nil Nil

Principle 2,55,65,564

** Refer along with the Auditors report.

*** Interest provided if any, are on estimate basis or considered as unascertained. Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/ or advances on the basis of security by way of pledge of shares, debentures, and other securities.According to the information and explanations given to us, the Company has given guarantee for loans taken by others from banks and financial institutions. According to the information and explanation given to us, we are of the opinion that the terms and conditions thereof are not prima facie, prejudicial to the interest of the company.

11. The Company has not taken any term loan during the year.

12. According to information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have, prima-facie, have not been used for long-term investments.

13. 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.

14. No debentures have been issued by the Company during the year and hence, the question of creating securities in respect thereof does not arise.

15. The Company has not raised any money by way of public issue during the year.

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

17. In our opinion, and according to information and explanations given to us, no comments are called for in the case of clauses (xiii) and (xiv) of paragraph 4 of the Companies (Auditor's report) (Amendment) Order '2004 as the same are not applicable to the Company during the year.

FOR JAIN MAHESHWARY & COMPANY

Chartered Accountants

Dharmesh Shah

PARTNER

Membership No.: 106620 Mumbai, Dated: 4th September,2012

---

Mar 31, 2011

1. We have audited the attached balance sheet of SOMA PAPERS & INDUSTRIES LIMITED as at 31st March, 2011, 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 Company's management. Our responsibility is to express an opinion on the 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 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 Companies (Auditor's report) (Amendment) Order '2004 issued by the Central Government of India in terms of sub section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks, as were considered appropriate, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the annexure referred to in paragraph 3 above, we report that:

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

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

c) The balance sheet, profit and loss account and cash flow statement dealt with in this report are in agreement with the books of account;

d) Subject to what is stated in paragraph (e) below, in our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the Accounting Standards referred to in sub-Section (3C) of Section 211 of the Companies Act, 1956, to the extent applicable; (i) Note 1 in Schedule '20' regarding appropriateness of going concern assumption used for preparing these accounts because the net worth of the Company is fully eroded and the Company is a sick industrial company within the meaning of clause (O) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), the accounts do not include the adjustments that would arise if these assumption had not been used in preparing these accounts.

e) On the basis of representations received from the directors of the Company as at 31st March, 2011 and taken on record by the board of directors, we report that none of the directors is disqualified as at 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 subject to our observations in i) paragraph 4(d)

(i) regarding preparation of accounts on the basis of a 'going concern having consequential impact (presently not determinable) on the loss for the year, reserves and surplus and assets of the Company .

ii) non provision of interest on Sales Tax loan(SICOM), Security Deposit (The amount remains ascertained)

iii) read together with note 16 to schedule 13 regarding balances of Sundry debtors, sundry creditors Balance with Banks and other advances being subject to confirmations/ reconciliation, if any and other notes appearing in the said Schedule and those appearing elsewhere in the accounts, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the balance sheet, of the state of affairs of the Company as at 31st March, 2011;

b) in the case of the profit and loss account, of the loss of the Company 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 the date. ANNEXURE TO THE AUDITORS' REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

1. In respect of its fixed assets:

a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, the management has physically verified during the year certain fixed assets in accordance with a phased programme of verification, which in our opinion, is reasonable having regard to the size of the Company and nature of its fixed assets. The discrepancies noticed by the management on such verification were not material and have been properly dealt with in the books of account.

c) As we observed, during the year, the Company has not disposed off substantial part of its fixed assets.

2. In respect of its inventories:

a) As informed to us, physical verification of inventory has been conducted by the management at reasonable intervals.

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

c) As informed to us, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and the same have been properly dealt with in the books of account.

3. According to information and explanations given to us, in respect of loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

a) The Company has not taken unsecured loans, the loan taken in previous year is repaid worth Rs.11,13,492. The Company has given loan worth Rs 5,08,008 (Outstanding as at 31st March, 2010 Rs NIL )

b) The loan taken / given is interest free and other terms conditions of such loans are, prima facie not prejudicial to the interest of the Company.

c) The interest free loan taken / given is repayable on demand.

d) As informed to us, there are no overdue amounts of more than Rs. one lakh in respect of such loan and as such clause 4(iii)(d) of the Companies (Auditor's report) (Amendment) order 2004 is not applicable

4. In our opinion and according to the information and explanations given to us, 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, fixed assets and for the

sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system. 5 a) In our opinion and according to the information and explanations given to us, the Company has not entered into any transactions that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956. b) As the company not entered in transactions that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956, no comments are called in respect of clause 4(v)(b) of the Companies (Auditor's report) (Amendment) Order ' 2004 .

6. According to information and explanations given to us, the Company has not accepted any deposit from the public during the year.

7. There was no internal audit system in the Company during the year.

8. As explained to us, the Central Government has not prescribed maintenance of cost records under Section 209 (1)(d) of the Act in the case of the Company.

9. a) According to the records of the Company, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and any other statutory dues, with the appropriate authorities, except the sales tax liability of different states worth Rs. 16.46 and deferred sales tax liability along with interest due there on as on 31/03/2007 outstanding for a period of more than six months from date it became payable.

b)According to the records of the Company, there are no dues of sales tax/ income tax / custom duty / wealth tax / service tax / cess, which have not been deposited on account of any dispute. The disputed amounts that have not been deposited in respect of excise duty / income tax are as under:

Description AmountRs. Period to which it relates Forum where dispute is pending

Excise duty 234,761 1988-1989 Excise and Gold (Control) Appellate Tribunal Income Tax 19,38,082 2003-2004 Penalty Proceeding Before CIT (A)

10 The accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth and it has incurred cash losses during the current financial year and in immediately preceding financial year.

11 According to the information and explanations given to us, the Company has defaulted in repayment of dues to banks, financial institutions and debenture holder.

The details of defaults as at 31st March, 2011 in repayment of dues to the financial institutions, banks and debenture holder are as under:

( Amount in Rs.)

Period of default Overdue Financial Banks Debenture towards Institution holder Amount of default_

Upto 1 year Interest Unascertained Nil Nil Principle Nil



More than 1 year Interest Unascertained Nil Nil and upto 2 years Principle Nil

More than 2 years Interest Unascertained Nil Nil and upto 5 years Principle Nil

More than 5 years Interest Unascertained Nil Nil Principle 2,55,65,564

** Refer along with the Auditors report.

*** Interest provided if any, are on estimate basis or considered as unascertained.

12 Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/ or advances on the basis of security by way of pledge of shares, debentures, debentures, and other securities

13 According to the information and explanations given to us, the Company has given guarantee for loans taken by others from banks and financial institutions. According to the information and explanation given to us, we are of the opinion that the terms and conditions thereof are not prima facie, prejudicial to the interest of the company.

14 The Company has not taken any term loan during the year.

15 According to information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have, prima-facie, have not been used for long-term investments.

16 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.

17 No debentures have been issued by the Company during the year and hence, the question of creating securities in respect thereof does not arise.

18 The Company has not raised any money by way of public issue during the year.

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

20 In our opinion, and according to information and explanations given to us, no comments are called for in the case of clauses (xiii) and (xiv) of paragraph 4 of the Companies (Auditor's report) (Amendment) Order '2004 as the same are not applicable to the Company during the year. FOR JAIN MAHESHWARY & COMPANY Chartered Accountants

Dharmesh Shah

PARTNER

Membership No.: 106620

Mumbai, Dated: 27th August,2011

---

Mar 31, 2010

1. We have audited the attached balance sheet of SOMA PAPERS & INDUSTRIES 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 Company's management. Our responsibility is to express an opinion on the 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 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 Companies (Auditor's report) (Amendment) Order '2004 issued by the Central Government of India in terms of sub section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks, as were considered appropriate, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the annexure referred to in paragraph 3 above, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit except para 4 of Notes to Accounts as mentioned in Schedule No.13 B ;

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, profit and loss account and cash flow statement dealt with in this report are in agreement with the books of account;

d) Subject to what is stated in paragraph (i) below, in our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the Accounting Standards referred to in sub-Section (3C) of Section 211 of the Companies Act, 1956, to the extent applicable;

(i) Note 1 in Schedule '13' regarding appropriateness of going concern assumption used for preparing these accounts because the net worth of the Company is fully eroded and the Company is a sick industrial company within the meaning of clause (O) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), the accounts do not include the adjustments that would arise if these assumption had not been used in preparing these accounts.

e) On the basis of representations received from the directors of the Company as at 31st March, 2010 and taken on record by the board of directors, we report that none of the directors is disqualified as at 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 subject to our observations in

i) paragraph 4(d)(i) regarding preparation of accounts on the basis of a 'going concern' having consequential impact on the profit for the year, reserves and surplus and assets of the Company .

ii) non provision of interest on Sales Tax Loan (SICOM.), Security Deposit.(The amount remains unascertained).

iii) read together with Note no.16 to Schedule 13 regarding balances of Sundry debtors, Sundry Creditors, Balance with Bank and other advances being subject to confirmations/ reconciliation,

and other notes appearing in the said Schedule and those appearing elsewhere in the accounts, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the balance sheet, of the state of affairs of the Company as at 31st March, 2010;

b) in the case of the profit and loss account, of the loss of the Company 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 the date.

ANNEXURE TO THE AUDITORS' REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

1. In respect of its fixed assets:

a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, the management has physically verified during the year certain fixed assets in accordance with a phased programmed of verification, which in our opinion, is reasonable having regard to the size of the Company and nature of its fixed assets. The discrepancies noticed by the management on such verification were not material and have been properly dealt with in the books of account.

c) As we observed, during the year, the Company has not disposed off substantial part of its fixed assets.

2. In respect of its inventories:

a) As informed to us, there is no inventory lying in the hands of the Company.

b) Since there no inventory no inventory verified.

c) No stock record is maintained since not inventory.

3. According to information and explanations given to us, in respect of loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

a) The Company has not taken unsecured loans, the loan taken in previous year is repaid worth Rs.11,13,492. The Company has given loan worth Rs.5,08,008 (Outstanding as at 31/03/2010 Rs. Nil).

b) The loan taken / given is interest free and other terms conditions of such loans are, prima facie not prejudicial to the interest of the Company.

c) The interest free loan taken / given is repayable on demand.

d) As informed to us, there are no overdue amounts of more than Rs. one lakh in respect of such loan and as such clause 4(iii)(d) of the Companies (Auditor's report) (Amendment) Order '2004 is not applicable.

4. In our opinion and according to the information and explanations given to us, 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, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. a) In our opinion and according to the information and explanations given to us,the Company has not entered into any transactions that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956.

b) As the company not entered in transactions that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956, no comments are called in respect of clause 4(v)(b) of the Companies (Auditor's report) (Amendment) Order ' 2004 .

6. According to information and explanations given to us, the Company has not accepted any deposit from the public during the year.

7. There was no internal audit system in the Company during the year.

8. As explained to us, the Central Government has not prescribed maintenance of cost records under Section 209 (1)(d) of the Act in the case of the Company.

9. a) According to the records of the Company, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and any other statutory dues, with the appropriate authorities, except the sales tax liability of different states worth Rs.16.46 and deferred sales tax liability along with interest due there on (Unascertained) as on 31/03/2010 outstanding for a period of more than six months from date it became payable.

b) According to the records of the Company, there are no dues of sales tax/ income tax / custom duty / wealth tax / service tax / cess, which have not been deposited on account of any dispute. The disputed amounts that have not been deposited in respect of excise duty / income tax are as under:

Description Amount Period to which Forum where dispute Rs. it relates is pending

Excise duty 234,761 1988-1989 Excise and Gold (Control) Appellate Tribunal

Income Tax 19,38,082 2003-2004 Penalty Proceeding Before ITAT

10. The accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth, and it has not incurred cash losses due to auction of the assets during the current financial year and however, in immediately preceding financial year cash losses has been incurred.

11. According to the information and explanations given to us, the Company has defaulted in repayment of dues to banks, financial institutions and debenture holder..

The details of defaults as at 31/03/2010 in repayment of dues to the financial institutions, banks and debenture holder are as under:

( Amount in Rs.)

Period of default Overdue Financial Banks *Debenture towards Institution holder

Amount of default

Upto 1 year Interest Unascertained Nil Nil Principle Nil

More than 1 year Interest Unascertained Nil Nil upto 2 years Priciple Nil Nil Nil

More than 2 years Interest Unascertained Nil Nil and upto 5 years Nil

More than 5 years Interest Unacertaine - Nil Principle 2,55,65,564

** Refer along with the Auditors report.

*** Interest provided if any, are on estimate basis or considered as unascertained.

12. Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/ or advances on the basis of security by way of pledge of shares, debentures, and other securities.

13. According to the information and explanations given to us, the Company has given guarantee for loans taken by others from banks and financial institutions. According to the information and explanation given to us, we are of the opinion that the terms and conditions thereof are not prima facie, prejudicial to the interest of the company.

14. The Company has not taken any term loan during the year.

15. According to information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have, prima-facie, have not been used for long- term investments.

16. 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.

17. No debentures have been issued by the Company during the year and hence, the question of creating securities in respect thereof does not arise.

18. The Company has not raised any money by way of public issue during the year.

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

20. In our opinion, and according to information and explanations given to us, no comments are called for in the case of clauses (xiii) and (xiv) of paragraph 4 of the Companies (Auditor's report) (Amendment) Order '2004 as the same are not applicable to the Company during the year.

FOR JAIN MAHESHWARY & COMPANY Chartered Accountants

Dharmesh Shah PARTNER Membership No.: 106620

Mumbai, Dated: 28th August,2010