Auditor Report of Bio Green Papers Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of M/s. BIO GREEN PAPERS LIMITED "the Company", which comprise the Balance Sheet as at March 31,2014, the Statement of Profit and Loss and Cash flow statement for the year ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements:

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance of the Company in accordance with the Accounting Stan- dards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility:

Our responsibility is to express an opinion on these financial statements based on our audit. We con- ducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accoun- tants 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 mis- statement.

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 assess- ment 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 prepa- ration and fair presentation of the financial statements in order to design audit procedures that are appro- priate 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; and

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

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

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditors Report) order 2003 and as amended by the Companies (Auditor''s Report)(Amendment) Order 2004, issued by the Central Government of India in terms of the 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, 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, comply with the Accounting Stan- dards referred to in subsection (3C) of section 211 of the Companies Act, 1956; and

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.

ANNEXURE REFERRED TO IN PARAGRAPH 2 OF THE AUDITOR''S REPORT ON THE ACCOUNTS OF BIO GREEN PAPERS LIMITED FOR THE YEAR ENDING 31ST MARCH 2014.

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that:

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

(b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies between the book records and the physical inventory have been noticed on such verification.

(c) The Company has not disposed off substantial part of the Fixed Assets.

II. (a) The Inventory has been physically verified during the year and in our opinion, the frequency of verifications is reasonable

(b) In our opinion, the procedures of the physical verification of inventory followed by the Management are reasonable and adequate in relation of the size of the Company and the nature of its business. However company need to take some more procedures to improve inventory controls.

(c) The Company is maintaining proper records of inventory and as explained to us, there was no material discrepancies noticed on such verification of stocks as compared to book records.

III. (a) The Company has not granted any loans, secured or unsecured to Companies, Firms or other

Parties covered in the register maintained U/s.301 of the Companies Act, 1956.

(b) As the Company has not granted any loans ,the clause of whether the rate of interest & other terms and conditions on which loans have been granted to parties listed in the register maintained under section 301 is prejudicial to the interest of company, is not applicable.

(c) As no loans are granted by company, the clause of receipt of interest & principal amount from parties is not applicable to the company.

(d) No loans have been granted to Companies, Firms & other parties listed in the register U/s.301 of the Companies Act, 1956 , hence overdue amount of more than rupees one lac does not arise and the clause is not applicable.

(e) The Company has not taken any loans, secured or unsecured from Companies, Firms or other Parties covered in the register maintained U/s.301 of the Companies Act, 1956.

(f) As the Company has not taken any loans, the clause of whether the rate of interest & other terms and conditions on which loans have been taken from parties listed in the register maintained under section 301 is prejudicial to the interest of company, is not applicable.

(g) As no loans are taken by the company, the clause of repayment of interest & principal amount to parties is not applicable to the company.

IV. In our opinion and according to the information and explanations given to us, there are sufficient adequate internal control systems commensurate with the size of the company and the nature of its business with regard to purchase of inventory and fixed assets and for sale of goods and services. There is no continuing failure by the company to correct any major weaknesses in internal control.

V. (a) In our opinion and according to the information and explanation given to us, the contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been made by the company in respect of the financial year, are entered in register U/s 301 of the Companies Act, 1956 does not arise.

(b) According to the information and explanations given to us, as no such contracts or arrangements made by the company, the applicability of the clause of charging the reasonable price having regards to the prevailing market prices at the relevant time does not arise.

VI. The Company has not accepted any deposits from the public and hence the applicability of the clause of directives issued by the Reserve Bank of India and provisions of section 58A, 58AA or any other relevant provisions of the Act and the rules framed there under does not arise. As per information and explanations given to us the order from the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal has not been received by the Company.

VII. The Company has a formal system of Internal Audit, but there are adequate checks & controls at All levels established by the Management.

VIII. In respect of the Company, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956.

X According to the information and explanations given to us , the statutory dues in respect of PF, ESI Income Tax and other applicable statutory payments are paying regular, and any other statutory dues as at the end of the period, for a period more than six months from the date they became payable.

X. The Company has been registered for a period of less than 5 years, and the Company has no accumulated losses at the end of the financial year and the company has not incurred cash losses in this financial year and the immediately preceding financial year.

XI. On the basis of the information and explanation given to us, Company has not defaulted in repayment of dues to financial institutions or banks interest and installments.

XII. According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities and hence the applicability of the clause regarding maintenance of adequate documents in respect of loans does not arise.

XIII. This clause is not applicable to this Company as the Company is not covered by the provisions of special statute applicable to Chit Fund in respect of Nidhi/Mutual Benefit Fund/Societies.

XIV. According to the information and explanations given to us, the company is not dealing or trading in shares, securities, Debentures and other investments and hence the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order 2003, are not applicable to the Company.

XV. According to the information and explanations and management letter given to us, the Company has not given any guarantee for loans taken by others from Banks or Financial Institutions, and hence the applicability of this clause regarding terms and conditions which are prejudicial to the interest of the company does not arise.

XVI. As per the management representation received by us, the term loans obtained by the Company were applied for purpose for which such loans were obtained by the Company.

XVII. As per the management representation received by us, no funds are raised by the Company on short- term basis. Hence, the clause of short term funds being used for long-term investment does not arise.

XVIII. According to the information and explanations given to us, the Company has not made any preferential allotment of Shares to parties during the year and Companies covered in the Register maintained under section 301 of the Companies Act, 1956 and hence the applicability of the clause regarding the price at which shares have been issued and whether the same is prejudicial to the interest of the Company does not arise.

XIX. According to the information and explanations given to us, during the year the company does not have any debentures and hence the applicability of the clause regarding the creation of security or charge in respect of debentures issued does not arise.

XX. According to information and explanations given to us, the company has not raised money by way of public issues during the year; hence the clause regarding the disclosure by the management on the end use of money raised by Public Issue is not applicable.

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

For D.M.RAO & CO

Chartered Accountant

(D. Madhusudana Rao)

Date: 30/05/2014 Partner

Place:Visakhapatnam Membership No. 028434

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Mar 31, 2013

We have audited the attached Balance Sheet of BIO GREEN PAPERS LIMITED as at 31 st March 2013, the Profit and Loss Account for the year ended 31st March 2013 annexed thereto. These financial state- ments are the responsibility of the company''s management our responsibility is to express an opinion on these financial statements based on our audit.

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

2. 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 Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said order.

3. Further to our comments in the Annexure referred to in paragraph 2 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 accounts, as required by the law, have been kept by the company, so far as appears from our examination of those books.

c) The/Balance Sheet, the Profit & Loss Account and THE CASH FLOW STATEMENT dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, the Profit & Loss Account and THE CASH FLOW STATEMENT dealt with by this report comply with the mandatory Accounting Standards referred to in sub- section (3C) of section 211 of the companies Act 1956.

e) In our opinion, and based on information and explanation given to us, none of Directors are dis- qualified as on 31 st March 2013 from being appointed as Directors in term of Section 274(1) (g) 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 other notes thereon give the information required by the Companies Act, 1956, in the manner so required, and present a true and fair view in conformity with the accounting principles generally accepted in India subject to:

1. In so far as it is relates to balance Sheet, of the State of affairs of the Company as at 31 st March 2013.

2. In so far as it relates to the Profit & Loss Account, the Profit of the Company for the year ended on that date, and

3. In so far as it relates to the Cash flow statement, of the cash flow of the Company for year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 2 OF THE AUDITORS REPORT ON THE ACCOUNTS OF BIO GREEN PAPERS LIMITED FOR THE YEAR ENDING 31 ST MARCH 2013.

As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of section 227(4-A) of the Companies Act, 1956, we report that:

1. In respect of fixed assets:

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

(B) As explained to us, all the fixed assets have been physically verified by the management during the year at reasonable intervals, which in our opinion, is reasonable having regard to the size of the company and the nature of assets, no material discrepancies were noticed on such physical verification

(C) In our opinion the company has not disposed off any substantial/ major part of fixed assets during the year and the going concern status of the company is not affected.

2. In respect of its inventories:

(A) As explained to us, the inventory has been physically verified by the management at regular intervals during the year.

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

(C) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of inventory, the company has maintained proper records of inventory as compared to the book records.

3. 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 granted Loans to any parties

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedure commensurate with the size of the company and nature of its business with regard to purchase of inventory and fixed assets and wfth regard for the sale of goods and services. During the course of audit, no major weakness has been noticed in the internal control.

5. In respect of contracts or arrangement entered in the register maintained in pursuance of Section 301 of the companies Act, 1956.

(A) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements that needed to be entered in the register maintained under section 301 of the companies Act 1956 have been so entered.

(B) In our opinion and explanation given to us the transactions exceeding the value of 5 lakhs in respect of any party during the year have been made at prices which are prima facie reasonable having regard to prevailing market prices at the relevant time where such prices are available.

6. In our opinion and according to the information and explanation given to us, the company has not accepted deposits from the public and therefore, the provision of section 58A and 58AA of the companies Act, 1956 and rules made there under are not applicable to the company.

7. In our opinion, the company has to introduce an internal audit system commensurate with its size and nature of its business.

8. To the best of our knowledge the Central Government has not prescribed the maintenance of cost records u/s 209(1) (d) of the company act, 1956 for any of the products of the company.

9. In respect of statutory dues:

(A) According to the information and explanations given to us, the company was generally regular in depositing dues in respect of Employees Provident Fund, Employees state Insurance Fund, Income Tax and other statutory dues with the appropriate authority during the year.

(B) According to the records examined by us and the information and explanations given to us, there are no disputed amounts due in respect of income tax, sales tax, excise duty, Employees provident fund, Employee state insurance fund and other statutory dues at the end of the year.

10. The Company does not have accumulated losses as at the end of the year and the Company has not incurred cash losses during current year.

11. Based on our audit procedures and on the basis of information and explanation given by the management, we are of the opinion that the company has not defaulted in repayment of dues to banks.

12. According to the information and explanation given to us, and based on our examination of records, the company has not granted loans and advances on the basis of security by way of pledge of shares and other securities.

13. In our opinion the company is not a chit fund Nidhi or Mutual Benefit Fund/ Society. Therefore, the provisions of clause 4(XIII) of the CARO, 2003 are not applicable to the company.

14. The Company is not dealing in or trading in shares, Securities, debentures and other investment, accordingly, the provisions of clause 4(xiv) of the order are not applicable.

15. In our opinion, the company has not given guarantees for loans taken by other from banks and financial institutions.

16. In our opinion and according to information and explanation given to us, the company has not availed of any term loans during the year.

17. According to the information and explanations given to us and on examination of balance sheet, funds raised on short term basis have, prima facie, not been used during the year for long term investment.

18. The Company has not made any preferential aHotment to parties and companies covered under register maintained under Section 301 of the Companies Act, 1956, during the year. The price at which the shares have been issued is not prejudicial to the interest of the Company.

19. According to the information and explanations given to us, the company has not issued any debentures.

20. The Company has not raised money by any public issues during the year and hence the questions of disclosure and verification of end use of such money does not arise.

21. In our opinion and according to the information and explanations given to us no fraud on or by the company has been noticed or reported during the year that causes the financial statements to be materially misstated.

For D.M.RAO & CO

Chartered Accountant

(D. Madhusudana Rao)

Date: 29/05/2013 Partner

Place: Visakhapatnam Membership No. 028434