Auditor Report of Emami Paper Mills Ltd.

Mar 31, 2018

Independent Auditors’ Report

To the Members of

EMAMI PAPER MILLS LIMITED Report on the IndAS Financial Statements

We have audited the accompanying Ind AS financial statements of EMAMI PAPER MILLS LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the IndAS Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of the Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.

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 Ind AS 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 Ind AS financial statements based on our audit.

In conducting 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 of the Ind AS financial statements 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 Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Ind AS 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 Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the Standalone Ind AS 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 Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS 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 financial position of the Company as at 31st March, 2018, and its profit,total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Other Matters

The comparative financial information of the Company for the year ended 31st March, 2017 and the transition date opening Balance Sheet as at 1st April, 2016 included in these Ind AS financial statements, are based on the statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the previous auditors whose report for the year ended 31st March, 2017 and 31st March, 2016 dated 16th May,

2017 and 24th May, 2016 respectively expressed an unmodified opinion on those financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us. Our opinion on the Ind AS financial statements and our report on Other Legal and Regulatory Requirements below is not modified in respect of these matters.

Report on other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our audit, we report to the extent applicable that:

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

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

c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of accounts.

d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act, read with relevant rules issued there under.

e) On the basis of the written representations received from the Directors as on 31st March, 2018 taken on record by the Board of Directors, none of the Directors is disqualified as on 31^st March, 2018 from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses on long term contracts including derivative contracts.

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

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

We have audited the internal financial controls over financial reporting of Emami Paper Mills Limited ("the Company”) as of 31st March, 2018 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.

(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements'' Section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act”).

Management’s Responsibility for Internal Financial controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing, prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

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

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

Meaning of Internal Financial Controls over Financial Reporting

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

(1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

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

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

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements'' section of our report of even date)

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

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) According to the information and explanations given to us and the records examined by us including registered title deeds, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the Balance Sheet date. In respect of immovable properties of land that have been taken on lease and disclosed as property, plant and equipment in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement, except for one plot of leasehold land, which is in the process of being registered, the gross block and net block of which amounts to H15.23 lacs and H13.08 lacs respectively, as on 31st March, 2018.

ii. According to the information and explanations given to us, the inventory has been physically verified during the year by the management. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been dealt with in books of accounts.

iii. The Company has not granted any loans, secured or unsecured, to companies, firms, LLP or other parties covered in the register maintained under Section 189 of the Act. Accordingly, paragraph 3(iii) of the Order is not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public in accordance with the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, paragraph 3(v) of the Order is not applicable to the Company.

vi. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained.

Particulars	Financial year to which the matter pertains	Forum where matter is pending	Amount (J in Lacs)	Amount Unpaid (J In Lacs)
The Central Excise	1994-95	ACCE	0.87
Act, 1994 & Service	2002-03 to 2006-07	CCE CAL-III	0.70
Tax (Finance Act,	2011-12 & 2012-13	Comm. Appeals	0.21
1994)	2015-16	Comm. Appeals	2.89	3.45
	2006-07	Tribunal Case to be filed before	74.81	38.98
	2011-12 & 2012-13	CESTAT,Kolkata	8.41	7.72
	2011-12 & 2012-13	CESTAT,Kolkata	2.62	2.49
	2011-12	CESTAT,Kolkata	3.67	2.88
Central Sales Tax	1993-94	Tribunal	20.26	16.26
	2004-05	DCCT	1.99	0.53
	2006-07	Tribunal	3.82	3.82
	2009-10	Comm. Appeals	19.62	17.12
	2010-11	Comm. Appeals	2.68	1.98
	2012-13 & 2013-14	Comm. Appeals	92.44	67.43
	2014-15 & 2015-16	Comm. Appeals	197.33	177.6

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

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Goods and Service Tax, Cess and other statutory dues to the appropriate authorities during the year. There were no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Goods and Service Tax, Cess and other statutory dues in arrears as at 31st March, 2018 for a period of more than six months from the date they became payable.

(b) Details of dues of Central Sales Tax, Service Tax, Excise Duty, Entry Tax and Value Added Tax which have not been deposited as on 31st March, 2018 on account of disputes are given below:

viii. In our opinion and according to the information and explanations given to us, the Company has not defaulted during the year in repayment of loans or borrowings to financial institutions, bankers and the government. The Company did not have any outstanding debentures during the year.

Particulars	Financial year to which the matter pertains	Forum where matter is pending	Amount (J in Lacs)	Amount Unpaid (J In Lacs)
Value Added Tax	2006-07	Tribunal	0.64	0.59
Act, (Orissa)	2009-10	Comm. Appeals	10.79	10.79
	2010-11	Comm. Appeals	25.48	25.48
Orissa Sales Tax	1989-90	High Court	2.01	0.79
ESIC	1996-97	ESIC Court	0.25	0.22
Entry Tax Act	2013-14	High Court	52.38	52.38
(West Bengal)	2014-15	High Court	54.89	54.89
	2015-16	High Court	53.71	53.71
	2016-17	High Court	56.99	56.99
	2017-18	High Court	14.28	14.28

ix. The Company did not raise any money by way of initial public offer and further public offer (including debt instrument). To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were applied for the purpose for which the loans were obtained.

x. To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year.

xi. According to the information and explanations given to us, the Company has paid/ provided for managerial remunerations in accordance with the requisite approvals mandated by the provisions of Sec 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3 (xii) of the Order is not applicable.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the Ind AS Financial Statements as required by the applicable Indian Accounting Standards.

xiv. According to the information and explanations given to us and based on our examination of the records, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3 (xv) of the Order is not applicable.

xvi. According to information and explanations given to us, the Company is not required to be registered under Section 45 IA of the Reserve Bank of India Act, 1934.

For, Agrawal Subodh &Co.

Chartered Accountants

Firm''s Registration No - 319260E

Subodh Kumar Agrawal

Place: Kolkata Partner

Date: 02nd May, 2018. Membership No. – 054670

---

Mar 31, 2017

Report on the Financial Statements

We have audited the accompanying financial statements of EMAMI PAPER MILLS LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information, in which are incorporated the returns for the year ended on that date audited by the branch auditors of the Company’s branch at Gulmohar.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation 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 relevant rules issued thereunder. 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 the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

Other Matter

We did not audit the financial statements of Gulmohar branch included in these financial statements of the Company whose financial statements reflect total assets of Rs. 2494.03 lacs as at 31st March, 2017 and total revenues of Rs. 6199.72 lacs for the year ended on that date, as considered in these financial statements. The financial statements of this branch have been audited by the branch auditor whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of the branch, is based solely on the report of such branch auditor.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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

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

b. In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from Gulmohar Branch not visited by us.

c. The reports on the accounts of the branch of the Company audited under Section 143 (8) of the Act by branch auditor have been sent to us and have been properly dealt with by us in preparing this report.

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

e. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rules issued thereunder.

f. On the basis of the written representations received from the Directors as on 31st March, 2017 taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.

g. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”;

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

i. The Company has disclosed the impact of pending litigations on its Financial Position in its financial statements (Refer Note No. 2.28 to the financial statements).

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

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

iv. The Company has provided requisite disclosure in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 08th November, 2016 to 30th December, 2016. Based on audit procedures and on the basis of management representation we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management. (Refer Note No. 2.45 to the financial statements).

Annexure - A to the Independent Auditors’ Report

The Annexure referred to in our Independent Auditor’s Report to the members of EMAMI PAPER MILLS LIMITED (the Company’) on the financial statements for the year ended on 31st March 2017. We report that:

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

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) According to information and explanations given to us and on the basis of our examination of the records produced before us, title deeds of five plots of leasehold land are in the process of being registered in the name of the Company. The gross block and net block of said plots amounts to Rs 99.20 lacs and Rs. 94.10 lacs respectively.

ii. According to the information and explanations given to us the inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable and no material discrepancies were noticed on physical verification.

iii. The Company has granted loans to two companies listed in the register maintained under section 189 of the Companies Act, 2013.

(a) In our opinion, the terms and conditions on which the loans had been granted to bodies corporate listed in the register maintained under section 189 of the Act were not, prima facia, prejudicial to the interest of the company.

(b) In the case of loans granted to the bodies corporate listed in the register maintained under section 189 of the Act, the borrowers have been regular in the payment of principal and interest as stipulated.

(c) There are no overdue amounts for more than 90 days from the due date in respect of the loan granted to a body corporate listed in the register maintained under section 189 of the Act.

iv In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of sections 185 and 186 of the Companies Act, 2013 in respect of loans and investments made.

v. The Company has not accepted any deposits from the public during the year.

vi. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 148 (1) of the Act, and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

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

(a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Service Tax, Sales Tax, Value Added Tax, duty of Custom, duty of Excise, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no material dues of duty of customs and service tax which have not been deposited with the appropriate authorities on account of any dispute. However, according to information and explanations given to us, the following dues of income tax, sales tax, duty of excise and value added tax have not been deposited by the Company on account of disputes:

Particular	Financial Year to which the matter pertains	Forum where matter is pending	Amount (Rs. In Lacs)
The Central Excise Act, 1994 & Service Tax	1994-95	ACCE	0.87
(Finance Act, 1994)	2002-03 to 2006-07	ACCE	1.10
	2006-07	Tribunal	74.81
	2006-07	Comm. Appeals	0.90
	2011-12	Comm. Appeals	3.95
	2016-17	Comm. Appeals	11.02

Central Sales Tax	1993-94	Tribunal	16.26
	2004-05	DCCT	0.53
	2006-07	Tribunal	3.82
	2009-10	Comm. Appeals	17.12
	2010-11	Comm. Appeals	7.34
	2012-13 to 2013-14	Comm. Appeals	74.01
Value Added Tax Act, (Orissa)	2006-07	Tribunal	0.59
	2009-10	Comm. Appeals	10.89
	2010-11	Comm. Appeals	25.48
Entry Tax Act (Orissa)	2006-07	Addl. Comm.	1.30
	2007-08	Addl. Comm.	0.11
	2008-09	Addl. Comm.	32.00
	2009-10	Addl. Comm.	32.05
	2010-11	Addl. Comm.	42.36
	2012-13 to 2013-14	Addl. Comm.	205.71
Orissa Sales Tax	1989-90	High Court	0.79
ESIC	1996-97	ESIC Court	0.22
Entry Tax Act	2013-14	High Court	3.27
(West Bengal)	2014-15	High Court	5.75
	2015-16	High Court	5.74
	2016-17	High Court	5.26

viii. On the basis of records examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to Banks and financial institutions.

ix. The Company did not raise any money by way of initial public offer and further public offer (including debt instrument). To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the company were applied for the purpose for which the loans were obtained.

x. According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

xi. According to the information and explanations given to us, the Company has paid/provided for managerial remunerations in accordance with the requisite approvals mandated by the provisions of Sec 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and based on our examination of the records, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable.

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

For S. K. AGRAWAL & CO.

Chartered Accountants

Firm’s Registration Number- 306033E

S. K. Agrawal

Place: Kolkata Partner

Dated: 16th May, 2017 Membership No: 9067

---

Mar 31, 2014

We have audited the accompanying financial statements of Emami Paper Mills Limited ("the company") which comprises the balance sheet as at 31st March 2014, and the Statement of Profit & Loss and the Cash Flow Statement for the year ended on that date annexed thereto in which are incorporated the accounts of Gulmohar unit audited by Branch Auditors, and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

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

AUDITOR''S RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of 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 entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

OPINION

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

i) In the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2014;

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

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

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") 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 further report that :

a) the report on the accounts of Gulmohar Unit audited by Branch Auditors have been received and properly dealt with in preparing our Report;

b) 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;

c) 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;

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

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

f) 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 to the Independent Auditors'' Report

In our opinion and according to the information and explanations given to us, the nature of the Company''s business/activities during the year are such that clauses (xiii) and (xix) of Companies (Auditor''s Report) Order, 2003, are not applicable to the Company. In respect of the other clauses, we report as under :

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

b. The fixed assets were physically verified during the year by the management in accordance with a program of verification, covering all fixed assets over a period of three years, which in our opinion provides for physical verification of all major items of fixed assets at reasonable intervals.

c. Fixed assets disposed of during the year were not substantial, and therefore, do not affect the going concern assumption.

2. a. The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

c. In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventory and no material discrepancies were noticed on physical verification.

3. a. The Company has given unsecured loan to two companies listed in the register maintained under Section 301 of the Companies Act, 1956 against whom the maximum amount outstanding during the year was Rs 4,333.56 Lacs (P.Y. - Rs 334.42 Lacs) and the year end balance of such loan amounted to Rs 334.42 lacs (P.Y. - Rs 334.42 Lacs). The rate of interest and other terms and conditions of the loan are not prima facie prejudicial to the interest of the Company. The principal amounts and interest are repayable on demand, therefore the question of overdue amounts does not arise.

b. The Company has taken unsecured loan from a company listed in the register maintained under Section 301 of the Companies Act, 1956 against whom the maximum amount payable during the year was Rs 1.42 Lacs (P.Y. - Rs 4,699.53 Lacs) and the year end balance of such loan amounted to Rs Nil. The rate of interest and other terms and conditions of the loan are not prima facie prejudicial to the interest of the Company. The principal amounts and interest are repayable on demand, therefore the question of overdue amounts does not arise.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods.

5. In respect of contracts or arrangements referred in Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered in the Register maintained under Section 301 of the Companies Act, 1956, have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions referred to above and exceeding the value of Rs 5 Lacs with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices.

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

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

8. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for the maintenance of cost records and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

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

a. The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Service Tax, Sales Tax, VAT, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2014 for a period of more than six months from the date of becoming payable.

b. According to the information and explanations given to us, details of dues of Excise Duty, Sales Taxes and Employees State Insurance which have not been deposited as on 31st March, 2014 on account of dispute are given below :

Particular Financial Year Forum where Amount to which the matter is (Rs in Lacs) matter pertains pending

The Central Excise Act, 1994 & Service Tax 2006-07 TRIBUNAL 74.81 (Finance Act, 1994) 2005-06 TO 2007-08 TRIBUNAL 35.24 2007-08 TRIBUNAL 0.10 Central Sales Tax Act 1993-94 TRIBUNAL 16.26 2004-05 TRIBUNAL 0.53 2006-07 TRIBUNAL 3.83 2007-08 ADDL. COMM. 3.37 2008-09 ADDL. COMM. 26.25 2009-10 ADDL. COMM. 17.11 2010-11 ADDL. COMM. 8.04 Values Added Tax Act (Orissa) 2006-07 ADDL. COMM. 0.59 2009-10 ADDL. COMM 10.88 2010-11 ADDL. COMM 25.48 Entry Tax Act (Orissa)* 2006-07 ADDL. COMM. & SELF ASSESSMENT 1.30 2007-08 ADDL. COMM. & SELF ASSESSMENT 0.11 2008-09 ADDL. COMM. & SELF ASSESSMENT 51.96

Entry Tax Act (Orissa)* 2009-10 ADDL. COMM. & SELF ASSESSMENT 39.71 2010-11 ADDL. COMM. & SELF ASSESSMENT 52.98 2011-12 ADDL. COMM. & SELF ASSESSMENT 65.31 2012-13 ADDL. COMM. & SELF ASSESSMENT 22.08 2013-14 ADDL. COMM. & SELF ASSESSMENT 36.75 Entry Tax Act (West Bengal) 2013-14 HIGH COURT 49.12 Odisha Sales Tax Act 1989-90 HIGH COURT 0.79 ESIC 1996-97 ESI COURT 0.22

* Question of Law regarding chargeability of entry tax on inter state purchase of goods & import of goods from outside of India is pending before Hon''ble Supreme Court of India.

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

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

12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. According to the information & explanations given to us, the Company is not dealing in shares, securities, debentures and other investment.

14. According to information given to us, the Company has not given any guarantee for loans taken by others from banks or financial institution.

15. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the company were applied for the purpose for which the loans were obtained.

16. According to the Cash Flow Statement and other records examined by us and the information and explanations given to us on an overall basis, we report that funds raised on short term basis have, prima facie, not been used for long term investments.

17. The Company has made preferential allotment of Preference Shares to parties and companies covered in the Register maintained under section 301 of the Companies Act 1956, during the year and the price at which shares have been issued is not prejudicial to the interest of the Company.

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

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

For S. K. AGRAWAL & COMPANY Chartered Accountants Registration No. 306033E

S. K. Agrawal Place : Kolkata Partner Dated : 25th April, 2014 Membership No. 9067

---

Mar 31, 2013

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of Emami Paper Mills Limited ("the company") which comprises the Balance Sheet as at 31st March 2013, and the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date annexed thereto in which are incorporated the accounts of Gulmohar unit audited by Branch Auditors, and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

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

AUDITOR''S RESPONSIBILITY

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

i) In the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2013

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

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

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") 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 further report that:

a) the report on the accounts of Gulmohar Unit audited by Branch Auditors have been received and properly dealt with in preparing our Report.

b) 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;

c) 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.

d) 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;

e) 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;

f) 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.

In our opinion and according to the information and explanations given to us, the nature of the Company''s business/ activities during the year are such that clauses (xiii) and (xix) of Companies (Auditor''s Report) Order, 2003, are not applicable to the Company. In respect of the other clauses, we report as under:

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

b. The fixed assets were physically verified during the year by the management in accordance with a program of verification, covering all fixed assets over a period of three years, which in our opinion provides for physical verification of all major items of fixed assets at reasonable intervals.

c. Fixed assets disposed of during the year were not substantial, and therefore, do not affect the going concern assumption.

2. a. The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

c. In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventory and no material discrepancies were noticed on physical verification.

3. a. The Company has given unsecured loan to a company listed in the register maintained under Section 301 of the Companies Act, 1956 against whom the maximum amount outstanding during the year was Rs 334.42 lacs and the year end balance of such loan amounted to Rs. 334.42 lacs. The rate of interest and other terms and conditions of the loan are not prima facie prejudicial to the interest of the Company. The principal amounts and interest are repayable on demand, therefore the question of overdue amounts does not arise.

b. The Company has taken unsecured loan from a company listed in the register maintained under Section 301 of the Companies Act, 1956 against whom the maximum amount payable during the year was Rs 4699.53 lacs and the year end balance of such loan amounted to Rs. Nil. The rate of interest and other terms and conditions of the loan are not prima facie prejudicial to the interest of the Company. The principal amounts and interest are repayable on demand, therefore the question of overdue amounts does not arise.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods.

5. In respect of contracts or arrangements referred in Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered in the Register maintained under section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions referred to above and exceeding the value of Rs. 5 lakh with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices.

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

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

8. We have broadly reviewed the books of account maintained by the company pursuant to the rules prescribed by the Central Government under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for the maintenance of cost records and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

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

a. The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Service Tax, Sales Tax, VAT, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2013 for a period of more than six months from the date of becoming payable.

b. According to the information and explanations given to us, details of dues of Excise Duty, Sales Taxes and Employees State Insurance which have not been deposited as on 31st March, 2013 on account of dispute are given below:

Particular Financial Year to which Forum where matter is Amount (Rs. in Lacs) the matter pertains pending

The Central Excise Act, 1944 & 1994-95 ACCE 0.87 Service Tax (Finance Act, 1994) 2002-03 to 2006-07 ACCE 1.10

2006-07 ACCE 72.65

2005-06 to 2007-08 ACCE 35.28

Central Sales Tax Act 1993-94 Tribunal 16.26

2004-05 Tribunal 0.53

2006-07 Addl. Comm. 0.79

2007-08 Addl. Comm. 3.37

2008-09 Addl. Comm. 26.25

Values Added Tax Act (Orissa) 2005-06 Addl. Comm. 1.68

2006-07 Addl. Comm. 0.59

2007-08 Addl. Comm 0.79

2009-10 Addl. Comm 0.10

Entry Tax Act (Orissa) 2006-07 Addl. Comm. 1.30

2007-08 Addl. Comm. 0.11

2008-09 Addl. Comm. 32.00

2006-07 to 2007-08 Addl. Comm. 69.60

Odisha Sales Tax Act 1989-90 High Court 0.79

ESIC 1996-97 ESI Court 0.22

Income Tax Act 1961 2011-12 Comm. Appeals 29.53

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

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

12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. According to the information & explanations given to us, the Company is not dealing in shares, securities debentures and other investment.

14. According to information given to us, the Company has not given any guarantee for loans taken by others from banks or financial institution.

15. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the company were applied for the purpose for which the loans were obtained.

16. According to the Cash Flow Statement and other records examined by us and the information and explanations given to us on an overall basis, we report that funds raised on short term basis have, prima facie, not been used for long term investments.

17. The Company has made preferential allotment of Preference Shares to parties and companies covered in the Register maintained under section 301 of the Companies Act 1956, during the year and the price at which shares have been issued is not prejudicial to the interest of the Company.

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

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

For, S. K. AGRAWAL & COMPANY

Chartered Accountants

Registration No- 306033E

(S. K. AGRAWAL)

Place: Kolkata Partner

Dated: 30th April, 2013 Membership No: 9067

---

Mar 31, 2012

We have audited the attached Balance Sheet of Emami Paper Mills Limited as at 31st March 2012, the Statement of Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto in which are incorporated the accounts of Gulmohar unit audited by Branch Auditors. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

We further report that:

a) The Report on the accounts of Gulmohar Unit audited by Branch Auditors have been received and properly dealt with in preparing our Report.

b) 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.

c) In our opinion proper books of accounts as required by law have been kept by the Company so far as appears from our examination of such books.

d) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement referred to in this report are in agreement with the books of accounts and comply with the accounting standards referred to in Section 211(3C) of the Companies Act, 1956 to the extent applicable.

e) On the basis of written representations received and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on 31st March, 2012 from being appointed as a Director in terms 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 ac- counts read with the notes on 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:

i) In the case of the Balance Sheet, of the State of Affairs of the Company as on 31st March, 2012

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

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

As required by the Companies (Auditors Report) order, 2003 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 we considered appropriate and according to the information and explanations given to us, we further report that:

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

b. The fixed assets were physically verified during the year by the management in accordance with a pro- gram of verification, covering all fixed assets over a period of three years, which in our opinion provides for physical verification of all major items of fixed assets at reasonable intervals.

c. Fixed assets disposed of during the year were not substantial, and therefore, do not affect the going concern assumption.

2. a. The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b. I n our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

c. I n our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventory and no material discrepancies were noticed on physical verification.

3. a. The Company has given unsecured loan to a company listed in the register maintained under Section 301 of the Companies Act, 1956 against whom the maximum amount outstanding during the year was Rs 303.21 lacs and the year end balance of such loan amounted to Rs.303.21 lacs. The rate of interest and other terms and conditions of the loan are not prima facie prejudicial to the interest of the Company. The principal amounts and interest are repayable on demand, therefore the question of overdue amounts does not arise.

b. The Company has taken unsecured loan from a company listed in the register maintained under Section 301 of the Companies Act, 1956 against whom the maximum amount payable during the year was Rs 4151.70 lacs and the year end balance of such loan amounted to Rs.4151.70. The rate of interest and other terms and conditions of the loan are not prima facie prejudicial to the interest of the Company. The company is regular in payment of interest and principal.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods.

5. In respect of contracts or arrangements referred in Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered in the Register maintained under section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions referred to above and exceeding the value of Rs.5 lacs with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices.

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

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

8. We have broadly reviewed the books of account maintained by the company pursuant to the rules prescribed by the Central Government under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for the maintenance of cost records and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

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

a. The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Service Tax, Sales Tax, VAT, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2012 for a period of more than six months from the date of becoming payable.

b. According to the information and explanations given to us, details of dues of Excise Duty, Sales Taxes and Employees State Insurance which have not been deposited as on 31st March, 2012 on account of dispute are given below:

Particular Financial Year to which Forum where matter is Amount (Rs. in Lacs) the matter pertains pending

Excise Duty 1994-95 ACCE 0.87

2002-03 to 2006-07 ACCE 1.10

2006-07 ACCE 72.65

2005-06 to 2007-08 ACCE 35.28

CST 1993-94 Tribunal 16.26

2004-05 Tribunal 0.53

2004-05 Addl. Comm. 0.68

2006-07 Addl. Comm. 0.79

2007-08 Addl. Comm. 3.37

2008-09 Addl. Comm. 26.25

VAT (Orissa) 2005-06 Addl. Comm. 1.68

2006-07 Addl. Comm. 0.59

2007-08 Addl. Comm. 0.79

Entry Tax (Orissa) 2006-07 Addl. Comm. 1.30

2007-08 Addl. Comm. 0.11

2008-09 Addl. Comm. 32.00

OST 1989-90 High Court 0.79

ESIC 1996-97 ESI Court 0.22

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

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

12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. According to the information & explanations given to us, the Company is not dealing in shares, securities debentures and other investment.

14. According to information given to us, the Company has not given any guarantee for loans taken by others from banks or financial institution.

15. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the company were applied for the purpose for which the loans were obtained.

16. According to the Cash Flow Statement and other records examined by us and the information and explanations given to us on an overall basis, we report that funds raised on short term basis have, prima facie, not been used for long term investments.

17. 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 and hence the question of whether the price at which shares have been issued is prejudicial to the interest of the Company does not arise.

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

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



For S. K. Agrawal & Co.

Chartered Accountants

Registration No- 306033E

S. K. Agrawal

Place: Kolkata Partner

Dated: 17th May, 2012 Membership No: 9067

---

Mar 31, 2011

We have audited the attached Balance Sheet of Emami Paper Mills Limited as at 31st March 2011, the Profit & Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto in which are incorporated the accounts of Gulmohar unit audited by Branch Auditors. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

We further report that:

a) The Report on the accounts of Gulmohar Unit audited by Branch Auditors have been received and properly dealt with in preparing our Report.

b) 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.

c) In our opinion proper books of accounts as required by law have been kept by the Company so far as appears from our examination of such books

d) The Balance Sheet, the Profit & Loss Account & the Cash Flow Statement referred to in this report are in agreement with the books of accounts and comply with the accounting standards referred to in Section 211(3C) of the Companies Act, 1956 to the extent applicable.

e) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2011 from being appointed as a director in terms 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 with the notes on accounts as per Schedule 17 give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the State of Affairs of the Company as on 31st March, 2011

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

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

As required by the Companies (Auditors Report) order, 2003 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 we considered appropriate and according to the information and explanations given to us, we further report that:

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

b. The fixed assets were physically verified during the year by the management in accordance with a program of verification, covering all fixed assets over a period of three years, which in our opinion provides for physical verification of all major items of fixed assets at reasonable intervals

c. Fixed assets disposed of during the year were not substantial, and therefore, do not affect the going concern assumption

2. a. The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable

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

c. In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventory and no materia discrepancies were noticed on physical verification

3. a. The Company has given unsecured loan to a company

isted in the register maintained under Section 301 of the Companies Act, 1956 against whom the maximum amount outstanding during the year was Rs. 308.72 acs and the year end balance of such loan amounted to Rs. 308.72 lacs. The rate of interest and other terms and conditions of the loan are not prima facie prejudicial to the interest of the Company. The principal amounts and interest are repayable on demand, therefore the question of overdue amounts does not arise

b. The Company has not taken any loans, secured or unsecured, from companies listed in the register maintained under Section 301 of the Companies Act, 1956

4. In our opinion and according to the information and explanations given to us, there are adequate interna control systems commensurate with the size of the Company and the nature of its business for the purchase of nventory and fixed assets and for the sale of goods

5. In respect of contracts or arrangements referred in Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered in the Register maintained under section 301 of the Companies Act, 1956 have been so entered

b. In our opinion and according to the information and explanations given to us, the transactions referred to above and exceeding the value of Rs. 5 lacs with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices

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

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

8. We have broadly reviewed the books of account maintained by the company pursuant to the rules prescribed by the Central Government under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for the maintenance of cost records and are of the opinion that prima facie the prescribed accounts and records have been made and maintained

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

a. The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Service Tax, Sales Tax, VAT, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. According to the nformation and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2011 for a period of more than six months from the date of becoming payable

b. According to the information and explanations given to us, details of dues of Excise Duty, Sales Taxes and Employees State Insurance which have not been deposited as on 31st March, 2011 on account of dispute are given below:

Particular Financial Year Forum where Amount

to which the matter is (Rs. in lacs)

matter pertains pending

Excise 1994-95 ACCE 0.87

Duty 2002-03 to 2006-07 ACCE 1.10

CST 1993-94 Tribunal 16.26

2004-05 Tribunal 0.53

2006-07 Addl. Comm. 3.83

2007-08 Addl. Comm. 3.37

VAT 2005-06 Addl. Comm. 1.68

(Orissa) 2006-07 Addl. Comm. 0.59

2007-08 Addl. Comm. 0.79

Entry Tax 2006-07 Addl. Comm. 1.30

(Orissa) 2007-08 Addl. Comm. 0.11

OST 1989-90 High Court 0.79

ESIC 1996-97 ESI Court 0.22

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

11. Based on our audit procedures and on the basis of nformation and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions and banks

12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities

13. According to the information & explanations given to us, the Company is not dealing in shares, securities, debentures and other investments.

14. According to information given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions

15. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the company were applied for the purpose for which the loans were obtained

16. According to the Cash Flow Statement and other records examined by us and the information and explanations given to us on an overall basis, we report that funds raised on short term basis have, prima facie, not been used for long term investments

17. 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 and hence the question of whether the price at which shares have been issued is prejudicial to the nterest of the Company does not arise

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

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

For S. K. Agrawal & Company

Chartered Accountants

Registration No. 306033E

S. K. Agrawal

Place : Kolkata Partner

Dated : 30th May 2011 Membership No. 9067

---

Mar 31, 2010

We have audited the attached Balance Sheet of Emami Paper Mills Limited as at 31st March 2010, the Profit & Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto in which are incorporated the accounts of Gulmohar unit audited by Branch Auditors. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

We further report that:

a) The Report on the accounts of Gulmohar Unit audited by Branch Auditors have been received and properly dealt with in preparing our Report.

b) 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.

c) In our opinion proper books of accounts as required by law have been kept by the Company so far as appears from our examination of such books.

d) The Balance Sheet, the Profit & Loss Account & the Cash Flow Statement referred to in this report are in agreement with the books of accounts and comply with the accounting standards referred to in Section 21 1 (3C) of the Companies Act, 1956 to the extent applicable.

e) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2010 from being appointed as a director in terms 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 with the notes on accounts as per Schedule 17 give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the State of Affairs of the Company as on 31 st March, 2010; ii) In the case of the Profit & Loss Account, of the Profit for the year ended on that date; and iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

As required by the Companies (Auditors Report) order, 2003 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 we considered appropriate and according to the information and explanations given to us, we further report that:

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

b. The fixed assets were physically verified during the year by the management in accordance with a program of verification, covering all fixed assets over a period of three years, which in our opinion provides for physical verification of all major items of fixed assets at reasonable intervals.

c. Fixed assets disposed of during the year were not substantial, and therefore, do not affect the going concern assumption.

2. a. The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

c. In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventory and no material discrepancies were noticed on physical verification.

3. a. The Company has given unsecured loan to a company listed in the register maintained under Section 301 of the Companies Act, 1956 against whom the maximum amount outstanding during the year was Rs 272 lacs and the year end balance of such loan amounted to Rs. 272 lacs. The rate of interest and other terms and conditions of the loan are not prima facie prejudicial to the interest of the Company. The principal amounts and interest are repayable on demand, therefore the question of overdue amounts does not arise.

b. The Company has not taken any loans, secured or unsecured, from companies listed* in the register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods.

5. In respect of contracts or arrangements referred in Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered in the Register maintained under section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions referred to above and exceeding the value of Rs. 5 lacs with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices.

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

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

8. We have broadly reviewed the books of account maintained by the company pursuant to the rules prescribed by the Central Government under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for the maintenance of cost records and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

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

a. The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Service Tax, Sales Tax, VAT, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31 st March, 2010 for a period of more than six months from the date of becoming payable.

b. According to the information and explanations given to us, details of dues of Excise Duty, Sales Taxes and Employees State Insurance which have not been deposited as on 31st March, 2010 on account of dispute are given below:

Particular Financial Year to which Forum where matter Amount (Rs. in Lacs) the matter pertains is pending

Excise Duty 1994-95 ACCE 0.87

2004-05 0.09

CST 1993-94 Tribunal 16.26

2004-05 Tribunal 0.53

2005-06 Addl. Comm. 238.52

2006-07 Addl. Comm. 3.83

2007-08 Addl. Comm. 4.06

VAT(Orissa) 2005-06 Addl. Comm. 1.68

2006-07 Addl. Comm. 0.59

2007-08 Addl. Comm 0.79

Entry Tax (Orissa) 2006-07 Addl. Comm. 1.30

2007-08 Addl. Comm. 0.11

OST 1989-90 High Court 0.79

ESIC 1996-97 ESICourt 0.22

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

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

12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. According to the information & explanations given to us, the Company is not dealing in shares, securities debentures and other investment.

14. According to information given to us, the Company has not given any guarantee for loans taken by others from banks or financial institution.

15. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the company were applied for the purpose for which the loans were obtained.

16. According to the Cash Flow Statement and other records examined by us and the information and explanations given to us on an overall basis, we report that funds raised on short term basis have, prima facie, not been used for long term investments.

17. 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 and hence the question of whether the price at which shares have been issued is prejudicial to the interest of the Company does not arise.

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

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

For S. K. AGRAWAL & COMPANY

Chartered Accountants Registration No- 306033E S. K. AGRAWAL

Partner

Membership No: 9067

Place: Kolkata

Dated: May 05, 2010

---

Mar 31, 2009

We have audited the attached Balance Sheet of Emami Paper Mills Limited as at 31st March 2009, the Profit & Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto in which are incorporated the accounts of Gulmohar unit audited by Branch Auditors. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

We draw attention to Note No 16 to Notes to Accounts in Schedule 18. The Company has exercised the option irrevocably and retrospectively to account for the exchange differences arising on reporting of long- term monetary items, in accordance with the transitional provisions contained in Paragraph 46 to Accounting Standard (AS) 11, relating to The Effects of Changes in Foreign Exchange Rates, inserted in the said Accounting Standard AS 11, vide Notification No.G.S.R.225 (E) dated the 31st March 2009, issued by the Ministry of Corporate Affairs, u/s 211(3C) of the Companies Act, 1956. Accordingly, the Company has accounted for exchange differences arising on reporting of long-term foreign currency monetary items, insofar as they related to the acquisition of depreciable capital assets, by adding to or deducting such differences from the cost of the asset, and depreciation computed on the basis of revised cost. The effect of the aforesaid notification for the financial year 07-08 have been given in the revised financial statements for financial year 2007-08, which are subject to approval and adoption by the shareholder at an Annual General Meeting.

We further report that:

a) The Report on the accounts of Gulmohar Unit audited by Branch Auditors have been received and properly dealt with in preparing our Report.

b) 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.

c) In our opinion proper books of accounts as required by law have been kept by the Company so far as appears from our examination of such books.

d) The Balance Sheet, the Profit & Loss Account & the Cash Flow Statement referred to in this report are in agreement with the books of accounts and comply with the accounting standards referred to in Section 211(3C) of the Companies Act, 1956 to the extent applicable.

e) Due to non receipt of written representation from Mr. N. Mishra who is outside India, we are unable to report whether he is disqualified as on 31st March 2009 to be appointed as a Director in terms of Sec 274(1) (g) of the Companies Act, 1956. On the basis of written representations received from the other Directors and taken on record by the Board of Directors, we report that none of the remaining Directors is disqualified as on 31st March 2009 from being appointed as a director in terms 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 with the notes on accounts as per Schedule 18 give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the State of Affairs of the Company as on 31st March, 2009

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

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

As required by the Companies (Auditors Report) order, 2003 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 we considered appropriate and according to the information and explanations given to us, we further report that:

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

b. The fixed assets were physically verified during the year by the management in accordance with a program of verification, covering all fixed assets over a period of three years, which in our opinion provides for physical verification of all major items of fixed assets at reasonable intervals.

c. Fixed assets disposed of during the year were not substantial, and therefore, do not affect the going concern assumption.

2. a. The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

c. In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventory and no material discrepancies were noticed on physical verification.

3. a. The Company has given unsecured loan to a company listed in the register maintained under Section 301 of the Companies Act, 1956 against whom the maximum amount outstanding during the year was Rs 672 lacs and the year end balance of such loan amounted to Rs. 272 lacs. The rate of interest and other terms and conditions of the loan are not prima facie prejudicial to the interest of the Company. The principal amounts and interest are repayable on demand and there is no repayment schedule and therefore the question of overdue amounts does not arise.

b. The Company has not taken any loans, secured or unsecured, from companies listed in the register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods.

5. In respect of contracts or arrangements referred in Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered in the Register maintained under section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions referred to above and exceeding the value of Rs. 5 lakh with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices.

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

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

8. We have broadly reviewed the books of account maintained by the company pursuant to the rules prescribed by the Central Government under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for the maintenance of cost records and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

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

a. The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Service Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2009 for a period of more than six months from the date of becoming payable. Delay in deposit of TDS has however been observed

b. fAecco rdiensg to the information and explanations given to us, details of dues of Excise Duty, Sales Taxes and Employees State Insurance which have not been deposited as on 31st March, 2009 on account of dispute are given below:

Financial Year to which Forum where matter is Particular Amount (Rs. in Lacs) the matter pertains pending

1994-95 0.87

Excise Duty ACCE 2004-05 0.09

1993-94 Tribunal 16.26 2004-05 ACCT 0.53 CST 2005-06 Addl.Comm. 238.52 2006-07 Addl. Comm. 5.36

2005-06 Addl.Comm. 1.72 VAT (Orissa) 2006-07 Addl. Comm. 0.59

Entry Tax (Orissa) 2006-07 Addl. Comm. 1.82

OST 1989-90 High Court 0.79

ESIC 1996-97 ESI Court 0.22

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

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

12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. According to the information & explanations given to us, the Company is not dealing in shares, securities debentures and other investment.

14. According to information given to us, the Company has not given any guarantee for loans taken by others from banks or financial institution.

15. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the company were applied for the purpose for which the loans were obtained.

16. According to the Cash Flow Statement and other records examined by us and the information and explanations given to us on an overall basis, we report that funds raised on short term basis have, prima facie, not been used for long term investments.

17. 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 and hence the question of whether the price at which shares have been issued is prejudicial to the interest of the Company does not arise.

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

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

For S. K. Agarwal & Company Chartered Accountants (S. K. AGARWAL)

Place: Kolkata Partner

Dated: June 03, 2009 Membership No. 9067