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Auditor Report of Sree Sakthi Paper Mills Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of M/s. Sree Sakthi Paper Mills Limited, Kochi which comprises of:- (a) The Balance Sheet as at 31st March, 2015

(b) The Statement of Profit and Loss for the year ended 31st March 2015

(c) Cash Flow Statement for the year ended 31st March 2015, and

(d) A Summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

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

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give 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 accounting policies used and the reasonableness of the accounting estimates made by Company's Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

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

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor's Report) Order, 2015 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 paragraphs 3 and 4 of the Order.

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

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

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

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

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts), Rules 2014;

e) On the basis of written representations received from the Directors as on March 31, 2015, and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2015, from being appointed as a Director in terms of sub-section (2) of Section 164 of the Companies Act, 2013.

f) With respect to other matters to be included in the Auditors Report in accordance with Rule 11 of 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 statement.

ii. The Company has made provisions, as required under any law or accounting standard, for material foreseeable losses.

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

Ref: M/s. Sree Sakthi Paper Mills Limited, Kochi -16 (2014-'15)

Referred to in paragraph 3 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) 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 inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

(iii) The Company has not granted any secured or unsecured loans to persons covered in the register maintained under Section 189 of the Companies Act, 2013, except advances in the ordinary course of business.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and nature of its business for the purchase of inventory and fixed asset and for sale of goods. There is no continuing failure to correct any major weaknesses in internal control system.

(v) The Company has not accepted deposits from the Public. Hence provisions of Clause 4(c) of the order are not applicable to the Company.

(vi) We have broadly reviewed the books and records maintained by the Company pursuant to the order of the Central Government 148 (1) of the Companies Act, 2013 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have however not made a detailed examination of the records with a view to determining whether these records are accurate or complete.

vii) (a) According to the information given to us and on the basis of the checks conducted by us we report that the Company has been generally regular in depositing undisputed statutory dues including Provident fund, Employees state insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value added tax, Cess and any other statutory dues with appropriate authorities except for vat due of Rs.7,839/-, service tax due of Rs. 16,94,736/-, customs duty of Rs. 3,24,457/-, excise duty of Rs. 6,27,925/-, which was in arrears as at 31.3.2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, and based on the records of the Company examined by us, the particulars of dues towards income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax and cess as at 31st March 2015, which have not been deposited on account of any dispute are furnished as :

(viii) The Company has no accumulated losses but has incurred cash loss during the financial year covered by our audit. It has no cash loss in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanation given to us the Company has not defaulted in repayment of dues to financial institutions and banks.

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

(xi) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that, the term loans availed by the Company were prima-facie applied for the purpose for which the loans were obtained.

(xii) To the best of our knowledge and belief and according to the information given to us no fraud on or by the Company was noticed or reported during the year.

Period to

Amount of which the Forum where Sl. tax disputed dispute the dispute No. Name of the Statute Nature of Dues Rs. in lakhs relates is pending

1 Income tax Act Income Tax 26.93 A.Y 2007-08 CIT (Appeals), Kochi

3 Income Tax Act Income Tax 11.68 A.Y 2011-12 CIT (Appeals), Kochi

4 Central Sales Tax Act Central Sales tax 15.48 A.Y 2007-08 Deputy Commissioner (Appeals), Kochi

c) The amount required to be transferred to Investor Education and Protection Fund in accordance with sub-section (5) of Section 124 of Companies Act 2013, has been transferred without any delay.

For Balan and Co

Chartered Accountants

FRN:000340S

Sd/-

Kochi- 11 A Mohanan, B Sc., FCA., DISA

30.05.'15 Partner (Memb No. 20627)


Mar 31, 2014

We have audited the accompanying financial statements of M/s. Sree Sakthi Paper Mills Limited, Kochi which comprises of:-

(a) The Balance Sheet as at 31st March, 2014

(b) The Statement of Profit and Loss for the year ended 31st March 2014

(c) Cash Flow Statement for the year then ended 31st March 2014, and

(d) 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. 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. Auditing is an independent examination of financial statements with an objective to express opinion on such financial statements. We conducted our audit in accordance with the Standards on Auditing and Guidance Notes 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 March 31, 2014;

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

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

Report on other legal and regulatory requirements

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

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 subsection (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on March 31, 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.

Ref: M/s. Sree Sakthi Paper Mills Limited, Kochi -16 (2013-''14)

Referred to in paragraph 3 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) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) No substantial part of the fixed assets was disposed off during the year.

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

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

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

(iii) (a) The Company has not granted loans to persons covered in the register maintained under section 301 of the Companies Act, 1956, except advances in the ordinary course of business.

(b) The company has taken an unsecured loan of Rs 1.5 Crore from Sree Sakthi Constructions & Infrastructure Ltd, Chennai. and Rs 1.35 Crore from Sree Kailas Logistics Ltd the terms and conditions of which are not prejudicial to the interest of the Company. Other than the above, 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.

(iv)In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and nature of its business for the purchase of inventory and fixed asset and for sale of goods. There is no continuing failure to correct any major weaknesses in internal control.

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

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) The company has not accepted deposits from the Public. Hence provisions of Clause 4(vi) of the Order are not applicable to the Company.

vii) On the basis of the test checks conducted by us and as per the explanations given to us the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books and records maintained by the company pursuant to the order of the Central Government u/s 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima-facie the prescribed accounts and records have been made and maintained. We have however not made a detailed examination of the records with a view to determining whether these records are accurate or complete.

(ix) (a) According to the information given to us and on the basis of the checks conducted by us we re port that the company has been generally regu lar in depositing undisputed statutory dues in cluding Provident fund, Employees state insur ance, Wealth Tax, Service Tax, Sales Tax, Cus toms duty, Excise Duty and Cess with appropriate authorities except for service tax due of Rs.11.52 lakhs which was in arrears as at 31.3.2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, and the records of the company examined by us, the particulars of dues towards sales tax, income tax, wealth tax, customs duty and excise duty, service tax and cess as at 31st March 2013,which have not been deposited on account of dispute are furnished as :

Sl. Name of the Statute Nature of Dues Amount of No. tax disputed Rs. in lakhs

1 Income tax Act Income Tax 26.93

2 Income tax Act Income Tax 66.74

3 Income tax Act Income Tax 46.77

4 Income tax Act Income Tax 11.63

5 Central Sales Tax Act Central Sales tax 15.48

6 Central Sales Tax Act Central Sales tax 0.03

7 Central Sales Tax Act Central Sales tax 0.15

Name of the Statute Period to Forum where which the the dispute dispute is pending relates

Income tax Act A.Y 2007-''08 CIT (Appeals), Kochi

Income tax Act A.Y 2008-09 CIT (Appeals), Kochi.

Income tax Act A.Y 2009-''10 CIT (Appeals), Kochi

Income tax Act A.Y 2010-''11 CIT (Appeals), Kochi.

Central Sales tax Act A.Y 2007-''08 Deputy Commissioner (Appeals), Kochi

Central Sales tax Act A.Y 2006-''07 Deputy Commissioner (Appeals), Kochi

Central Sales tax Act A.Y 2007-''08 Deputy Commissioner (Appeals), Kochi

(x) The Company has no accumulated losses and has not incurred any cash loss during the financial year covered by our audit and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanation given to us the Company has not defaulted in repayment of dues to financial institutions and banks.

(xii) The Company has not granted loan and advance on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi or a mutual benefit fund/Society. Therefore, provisions of clause 4(xiii) of the Companies Auditors Report Order 2003 are not applicable to the company.

(xiv) The company is not dealing in or trading in shares, securities, debentures and other investments. In respect of dealing in Forex, the company has maintained proper records of the transactions and contracts and has made timely entries therein and the transactions and balances were held in the name of the Company.

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

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that, the term loans availed by the company were prima-facie applied for the purpose for which the loans were obtained.

(xvii) According to the 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 by the company on short term basis has not been used for long term investments.

(xviii)Company has not made any preferential allotment of shares during the year.

(xix) The Company has not issued any debentures.

(xx)The Company has not raised any money by Public Issue during the year.

(xxi) To the best of our knowledge and belief and according to the information given to us no material fraud on or by the company was noticed or reported during the year.

For Balan and Co Chartered Accountants FRN:000340S

Sd/- Kochi- 11 A Mohanan, B Sc., FCA., DISA 30.05.''14 Partner (Memb No. 20627)


Mar 31, 2013

We have audited the accompanying financial statements of M/s. Sree Sakthi Paper Mills Limited, Kochi which comprises of :-

(a) The Balance Sheet as at 31st March 2013

(b) The Statement of profit and Loss for the year ended 31st March 2013

(c) Cash flow Statement for the year then ended 31st March 2013, and

(d) 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 the section 211 of the companies act, 1956 This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. Auditing is an independent examination of financial statements with an objective to express opinion on such financial statements. We conducted our audit in accordance with the standards on auditing and guidance notes 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 auditors 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 March 31.2013

(b) In the case of the profit and loss account, of the profit for the year ended on 31st March 2013

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

Report on other legal and regularity requirements

1. As required by the companies (Auditors Report) Order 2003 issued by the central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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, cash flow statement comply with the accounting standards referred to in subsection (3C) of the section 211 of the companies Act, 1956

(e) On the basis of written representations received from the directors as on March 31,2013, and taken on record by the board of directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act 1956

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

Ref: M/s. Sree Sakthi Paper Mills Limited, Kochi - 16 (2012-13)

Referred to in paragraph 3 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) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) No substantial part of the fixed assets was disposed off during the year.

(ii) (a) The inventory has been physically verified During the year by the management. In our opinion, the frequency of verification is reasonable.

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

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

(iii) (a) The Company has not granted loans to persons Covered in the register maintained under section 301 of the Companies Act, 1956, except advances in the ordinary course of business.

(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 Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and nature of its business for the purchase of inventory and fixed asset and for sale of goods. There is no continuing failure to correct any major weaknesses in internal control.

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

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) The company has not accepted deposits from the Public. Hence provisions of Clause 4(vi) of the Order are not applicable to the Company.

vii) On the basis of the test checks conducted by us and as per the explanations given to us the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books and records maintained by the company pursuant to the order of the Central Government u/s 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima-facie the prescribed accounts and records have been made and maintained. We have however not made a detailed examination of the records with a view to determining whether these records are accurate or complete.

(ix) (a) According to the information given to us and on the basis of the checks conducted by us we report that the company has been regular in depositing undisputed statutory dues including Provident fund, Employees state insurance, Wealth Tax, Service Tax, Sales Tax, Customs duty, Excise Duty and Cess with appropriate authorities except for service tax due of Rs. 15.33 Lacs which was in arrears as at 31.03.2013 for a period of more than six months from the date they became payable and was paid in April, 2013.

(b) According to the information and explanations given to us, and the records of the company examined by us, the Particulars of dues towards sales tax, income tax, wealth tax, customs duty and excise duty, service tax and cess as at 31st March 2013, which have not been deposited on account of dispute are furnished as :



Amount of Sl. tax disputed No. Name of the Statute Nature of Dues Rs. in lakhs

1 Income tax Act Income Tax 26.93

2 Income tax Act Income Tax 66.74

3 Income tax Act Income Tax 46.77

4 Income tax Act Income Tax 11.63

5 Central Sales Tax Act Central Sales tax 15.48



Name of thhe Statute Period to which the Forum where dispute the dispute relates is pending

Income tax Act A.Y 2007-''08 CIT (Appeals), Kochi

Income tax Act A.Y 2008-09 CIT (Appeals), Kochi

Income tax Act A.Y 2009-''10 CIT (Appeals), Kochi

Income tax Act A.Y 2010-''11 CIT (Appeals), Kochi

Central Sales Tax Act A.Y.2007-''08 Deputy Commissioner (Appeals), Kochi



(x) the company has no accumulated losses and has not incurred any cash loss during the financial year covered by our audit and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanation given to us the company has not defaulted in repayment of dues to financial institutions and banks.

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

(xiii) The company is not a chit fund or a nidhi or a mutual benefit fund/Society. Therefore, provisions of clause 4(xiii) of the companies Auditors Report Order are not applicable to the company.

(xiv)The company is not dealing In or trading in shares, securities, debentures and other investments. Therefore, provisions of clause 4 (xiv) of the companies Auditors Report Order 2003 are not applicable to the company.

(xv) According to the information and explanations given to us the company has not given any Guarantee for loan taken by others from banks or financial institutions.

(xvi)To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that, the term loans availed by the company were prima-facie applied the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination o the Balance Sheet of the Company, we are of the opinion that the funds raised by the company on short term basis has not been used for long term investments.

(xviii)Company has not made any preferential allotment of shares during the year.

(xix) The Company has not issued any debentures

(xx) The Company has not raised any money by Public Issue during the year.

(xxi)To the best of our Knowledge and belief and according to the information given to us no material fraud on or by the company was noticed or reported during the year.



For Balan & Co.

Chartered Accountants

Sd/-

A. Mohanan B.Sc., FCA, DISA

Partner (M. No. 20627)

FRN: 000340S

Kochi - 11 30.05.2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s. Sree Sakthi Paper Mills Limited, Kochi-16, as at 31st March, 2012 and also Statement of Profit and Loss and Cash Flow Statement of the Company for the year ended on that date annexed there to. 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 misstatements. 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 (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) Amendment Order, 2004 issued by the Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure, a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Further to our comments in the Annexure referred 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 purpose of our audit.

b. In our opinion proper books of account as required by law have been kept by the company in 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. The Balance Sheet, Statement of Profit and Loss and Cash Flow statement dealt with by this report comply with the accounting standards referred to in sub section (3C) of section 211 of the Companies Act, 1956.

e. On the basis of written representations received from the directors and placed before the Board, we report that none of the Directors is disqualified as on 31st March 2012 from being appointed as a Director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, they said accounts read together with the Significant Accounting Policies and 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:

1. In the case of the Balance Sheet, of the 'state of affairs' of the company as at 31st March '12

2. In the case of the Statement of Profit and Loss, of the profit of the company for the year on that date, and;

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

Ref: M/s. Sree Sakthi Paper Mills Limited, Kochi-16 (2011-12)

Referred to in paragraph 3 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) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) No substantial part of the fixed assets was disposed off during the year.

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

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

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

(iii) (a) The Company has not granted loans to persons covered in the register maintained under section 301 of the Companies Act, 1956, except advances in the ordinary course of business.

(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 Companies Act,1956.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and nature of its business for the purchase of inventory and fixed asset and for sale of goods. There is no continuing failure to correct any major weaknesses in internal control.

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

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) The company has not accepted deposits from the Public. Hence provisions of Clause 4(vi) of the Order are not applicable to the Company.

vii) On the basis of the test checks conducted by us and as per the explanations given to us the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books and records maintained by the company pursuant to the order of the Central Government u/s 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima-facie the prescribed accounts and records have been made and maintained. We have however not made a detailed examination of the records with a view to determining whether these records are accurate or complete.

(ix) (a) According to the information given to us and on the basis of the checks conducted by us we report that the company has been regular in depositing undisputed statutory dues including Provident fund, Employees state insurance, Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs duty and Excise Duty, Cess with appropriate authorities during the year. Except for Income Tax due of Rs. 84.37 lacs which is in is in arrears as at 31-3-2012 for a period of more than six months from the date they became payable.

(b) Except for a sum of Rs. 43.28 lacs being disputed Income Tax pending in appeal before the Commissioner of Income Tax (Appeals), Rs.15.48 lacs being disputed Sales Tax and Rs. 4.05 lacs being disputed Electricity charges pending with KSEB, no other dues of Sales Tax/ Income Tax/Custom Tax/Services Tax/Excise Duty/Cess remains not deposited on account of any disputes.

(x) The Company has no accumulated losses and has not incurred any cash loss during the financial year covered by our audit and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanation given to us the Company has not defaulted in repayment of dues to financial institutions and banks.

(xii) The Company has not granted loan and advance on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi or a mutual benefit fund/Society. Therefore, provisions of clause 4(xiii) of the Companies Auditors Report Order 2003 are not applicable to the company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Therefore, provisions of clause 4(xiv) of the Companies Auditors Report Order 2003 are not applicable to the company.

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

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that, the term loans availed by the company were prima-facie applied for the purpose for which the loans were obtained.

(xvii) According to the 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 by the company on short term basis has not been used for long term investments.

(xviii)Company has not made any preferential allotment of shares during the year.

(xix) The Company has not issued any debentures.

(xx) The Company has not raised any money by Public Issue during the year.

(xxi) To the best of our knowledge and belief and according to the information given to us no material fraud on or by the company was noticed or reported during the year.

For BALAN & CO.

CHARTERED ACCOUNTANTS

Sd/-

A. MOHANAN FCA, DISA

PARTNER (M. No. 20627)

FRN: 000340S

Kochi - 11

26.05.2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of M/s. Sree Sakthi Paper Mills Limited, Kochi-16, as at 31st March, 201 I and also Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date annexed there to. 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 misstatements.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 (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) Amendment Order, 2004 issued by the Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure, a statement on the matters specified in paragraph # 4 and 5 of the said order.

4. Further to our comments in the Annexure referred 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 purpose of our audit.

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

c. The Balance Sheet, Profit and Loss account and Cash Flow statement dealt with by this report are in agreement with the books of account.

d. 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.

e. On the basis of written representations received from the directors and placed before the Board, we report that none of the Directors is disqualified as on 31st March 201 I from being appointed as a Director in terms of clause (g) of sub section (I) of section 274 of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and 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:

1. In the case of the Balance Sheet, of the 'state of affairs' of the company as at 31st March 11

2. In the case of the Profit and Loss account, of the profit of the company for the year on that date, and;

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

Referred to in paragraph 3 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) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) No substantial part of the fixed assets was disposed off during the year.

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

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

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account..

(iii) (a) The Company has not granted loans to persons covered in the register maintained under section 301 of the Companies Act, 1956, except advances in the ordinary course of business.

(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 Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and nature of its business for the purchase of inventory and fixed asset and for sale of goods. There is no continuing failure to correct any major weaknesses in internal control.

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

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) The company has not accepted deposits from the Public. Hence provisions of Clause 4(vi) of the Order are not applicable to the Company.

vii) On the basis of the test checks conducted by us and as per the explanations given to us the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books and records maintained by the company pursuant to the order of the Central Government u/s 209(l)(d) of the Companies Act, 1956 and are of the opinion that prima-facie the prescribed accounts and records have been made and maintained. We have however not made a detailed examination of the records with a view to determining whether these records are accurate or complete.

(ix) (a) According to the information given to us and on the basis of the checks conducted by us we report that the company has been generally regular in depositing undisputed statutory dues including Provident fund, Employees state insurance, Income Tax, Wealth Tax, Service Tax, SalesTax, Customs duty and Excise Duty, Cess and any other statutory dues with appropriate authorities during the year.

No undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess were in arrears as at 31.3.2011 for a period of more than six months from the date they became payable.

(b) Except for a sum of Rs. 87.25 lakhs being disputed Income Tax /Penalty relating to pending in appeal before the Income Tax Appellate Tribunal and a sum of Rs. 15.48 lakhs being disputed SalesTax and a sum of Rs 4.05 lakhs being disputed Electricity charges pending with KSEB, no other dues of Sales Tax/Income Tax/CustomTax/ServicesTax/Excises Duty/Cess remains not deposited on account of any disputes.

(x) The Company has no accumulated losses and has not incurred any cash loss during the financial year covered by our audit and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanation given to us the Company has not defaulted in repayment of dues to financial institutions and banks.

(xii) The Company has not granted loan and advance on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi or a mutual benefit fund/Society.Therefore, provisions of clause 4(xiii) of the Companies Auditors Report Order 2003 are not applicable to the company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Therefore, provisions of clause 4(xiv) of the Companies Auditors Report Order 2003 are not applicable to the company.

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

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that, the term loans availed by the company were prima-facie applied for the purpose for which the loans were obtained.

(xvii) According to the 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 by the company on short term basis has not been used for long term investments.

(xviii) Company has not made any preferential allotment of shares during the year.

(xix) The Company has not issued any debentures.

(xx) The Company has not raised any money by Public Issue during the year.

(xxi) To the best of our knowledge and belief and according to the information given to us no material fraud on or by the company was noticed or reported during the year.

For BALAN & CO. CHARTERED ACCOUNTANTS Sd/- A.MOHANAN F.C.A..DISA PARTNER (M.No.20627) FRN: 000340S

Kochi - 11 30.05.2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of M/s. Sree Sakthi Paper Mills Limited, Kochi-16, as at 3 I st March, 2010 and also Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date annexed there to. These finan- cial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with audit- ing standards generally accepted in India. Those stan- dards require that we plan and perform the audit to obtain reasonable assurance about whether the fi- nancial statements are free of material misstatements. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the fi- nancial statements. An audit also includes assessing the accounting principles used and significant esti- mates 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 Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure, a statement on the matters specified in paragraph # 4 and 5 of the said order.

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

a. We have obtained all the information and expla- nations, which to the best of our knowledge and belief were necessary for the purpose of our au- dit.

b. In our opinion proper books of account as re- quired by law have been kept by the company in so far as appears from our examination of those books.

c. The Balance Sheet, Profit and Loss account and Cash Flow statement dealt with by this report are in agreement with the books of account.

d. 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 21 I of the Com- panies Act, 1956.

e. On the basis of written representations received from the directors and placed before the Board, we report that none of the Directors is disquali- fied as on 3 I st March 2010 from being appointed as a Director in terms of clause (g) of sub sec- tion (I) of section 274 of the Companies Act, 1956.

f. In our opinion and to the best of our informa- tion and according to the explanations given to us, the said accounts read together with the Sig- nificant Accounting Policies and 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:

1. In the case of the Balance Sheet, of the state of affairs of the company as at 31st March 10

2. In the case of the Profit and Loss account, of the profit of the company for the year on that date, and

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

Ref. M/s. Sree Sakthi Paper Mills Limited, Kochi -16 (2009-10) Referred to in paragraph 3 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) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such veri- fication.

(c) No substantia! part of the fixed assets was dis- posed off during the year.

(ii) (a) The inventory has been physically verified during the year by the management. In our opin- ion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inven- tories followed by the management are reason- able 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. The discrepancies noticed on verifi- cation between the physical stocks and the book records were not material and have been prop- erly dealt with in the books of account..

(iii) (a) The Company has not granted loans to persons covered in the register maintained un- der section 301 of the Companies Act, 1956, except advances in the ordinary course of busi- ness.

(b) The company has not taken any loans .secured or unsp-ured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and nature of its business for the purchase of inventory and fixed asset and for sale of goods. There is no continuing failure to correct any major weaknesses in internal control.

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

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) The company has not accepted deposits from the Public. Hence provisions of Clause 4(vi) of the Or- der are not applicable to the Company.

vii) On the basis of the test checks conducted by us and as per the explanations given to us the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books and records maintained by the company pursuant to the order of the Central Government u/s 209(l)(d) of the Com- panies Act, 1956 and are of the opinion that prima- facie the prescribed accounts and records have been made and maintained. We have however not made a detailed examination of the records with a view to determining whether these records are accurate or complete.

(ix) (a) According to the information given to us and on the basis of the checks conducted by us we report that the company has been generally regu- lar in depositing undisputed statutory dues in- cluding Provident fund, Employees state insur- ance, Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs duty and Excise Duty, Cess and any other statutory dues with appropriate authorities during the year.

No undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess were in ar- rears as at 3 1.3.2010 for a period of more than six months from the date they became payable.

[b] Except for a sum of Rs. 20.56 lakhs being disputed Income Tax/Penalty relating to A.Y.2004-05 pending in appeal before the Income Tax Appellate Tribunal and a sum of Rs.3.89 lakhs, Rs. 8.39 lakhs and Rs 15.48 lakhs being disputed Sales Tax relating to A.Y. 2005-06, A.Y 2006-07 and A.Y.2007-08 respectively pending in appeal before Sales Tax Appelate Commission and a sum of Rs 4.05 lakhs being disputed

Electricity charges pending with KSEB, no other dues of Sales Tax/Income Tax/Custom Tax/ Services Tax/Excises Duty/Cess remains not deposited on account of any disputes.

(x) The Company has no accumulated losses and has not incurred any cash loss during the financial year covered by our audit and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanation given to us the Company has not defaulted in repayment of dues to financial institu- tions and banks.

(xii)The Company has not granted loan and advance on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi or a mutual benefit fund/Society. Therefore, provisions of clause 4(xiii) of the Companies Auditors Report Order 2003 are not applicable to the company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. There- fore, provisions of clause 4(xiv) of the Companies Auditors Report Order 2003 are not applicable to the company.

(xv)According to the information and explanations given to us the company has not given any guarantee for loan taken by others from banks or financial institu- tions.

(xvi) To the best of our knowledge and belief and ac- cording to the information and explanations given to us, we are of the opinion that, the term loans availed by the company were prima-facie applied for the purpose for which the loans were obtained.

(xvii) According to the 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 by the company on short term basis has not been used for long term investments.

(xviii) Company has not made any preferential allotment of shares during the year.

(xix) The Company has not issued any debentures.

(xx) The Company has not raised any money by Public Issue during the year.

(xxi) To the best of our knowledge and belief and according to the information given to us no mate- rial fraud on or by the company was noticed or reported during the year.

For BALAN & CO.

Chartered Accountants

Sd/-

Kochi - II A. MOHANAN F.C.A..DISA

29.05.2010 PARTNER (M.No.20627)

 
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