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Auditor Report of Shree Krishna Paper Mills & Industries Ltd.

Mar 31, 2018

CORPORATE GOVERNANCE REPORT

1. COMPANY''S PHILOSOPHY ON CORPORATE GOVERNANCE

Your Company considers good Corporate Governance a pre-requisite for meeting the needs and aspirations of its Members and other stakeholders in the Company. The Board of Directors of your Company firmly believes that the same could be achieved by maintaining transparency in its dealings, creating robust policies and practices for key processes and systems with clear accountability, integrity, transparent governance practices and the highest standard of compliance.

The Company believes that Corporate Governance is about best practices of business to be imbibed into the culture of the organization and complying with value systems, ethical business practices, laws and regulations to achieve the main objectives of the Company.

The Company has strengthened its Corporate Governance practices and has set highest standards of Corporate Governance by implementing the code of Corporate Governance in accordance with regulations 34 (3) read with Schedule V of the Securities Exchange board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

2. BOARD OF DIRECTORS

i) Composition

The Company has an appropriate mix of Executive, Non-Executive and Independent Directors to maintain the Board''s independence as well as separate its functions of governance and management. The Board of Directors comprises six Directors, out of which 1 is Executive Director, 2 are Non-Executive Directors including one Woman Director and 3 are Independent Directors. Ms. Tripta Goswami resigned from directorship w.e.f. November 18, 2017 and Ms. Rakhi Verma was appointed as Additional Director w.e.f. November 18, 2017.

None of the Directors on the Board is a member of more than 10 committees and Chairperson of more than 5 committees across all the Public Companies in which he/she is a Director.

The details of composition of the Board as on March 31, 201 8, the attendance record of the Directors at the Board Meetings held during financial year 201 7-1 8 and at the last AGM, as also the number of Directorship(s)/ Committee Chairmanship(s)/Membership(s) held by them in other Public Companies along with shareholding of non-executive directors are given below:

Name/Designation of Directors	Category	No. of Position held in other companies			No. of Board Meetings Attended	Attendance at last ACM	No. of shares held by Non-Executive Directors (as on 31.03.2018)
		Directorship#	Committee$
		Directorship#	Member	Chairman
Mr. N. K. Pasari (Managing Director)	ED(P)	1			12	No	N.A.
Mr. B.N. Pasari	NED (P)	5	3	2	3	No	200
Mr. L. C. Sharma	NED (I)	-		-	4	No	-
Mr. P.N.Singh	NED (I)	1			12	No
Mr. Rajesh Muju	NED (I)				12	No
Ms. Tripta Goswami*	NED				8	Yes
Ms. Rakhi Verma*	NED	-		-	4	N.A.	-

# resigned from directorship w.e.f. November 18, 2017.

* appointed as Additional Director w.e.f. November 18, 2017.

$ Chairmanship/Membership of Board Committees includes only Audit

Committee, Nomination and Remuneration Committee and Stakeholders

Relationship Committee.

ED (P) - Executive Director (Promoter)

NED (P) - Non-Executive Director (Promoter)

NED (I) - Non-Executive Director (Independent)

ii) Meetings of Board of Directors

The Board of Directors met twelve times during the financial year 2017-18. The dates on which the Board meetings were held are as follows:

(i) April 12, 2017 (ii) May 30, 2017 (iii) June 22, 2017 (iv) July 31, 2017 (v) August 21, 2017 (vi) September 13, 2017 (vii) October 23, 201 7 (viii) November 18, 2017 (ix) December 12, 2017 (x) January 15, 2018 (xi) February 13, 2018 and (xii) March 12, 2018. The maximum time gap between any two Board Meetings was 47 days.

All relevant information as required under Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 was placed before the Board from time to time.

iii) Performance evaluation

The Board of Directors of the Company ensures the formation and monitoring of robust Evaluation framework of the Individual Directors, Board as a whole and various Committee thereof and carries out the evaluation of the Board, the Committees of the Board and Individual Directors on annual basis.

The Board Evaluation have been completed by the Company internally which included the Evaluation of the Board as a whole, Board Committees and Directors. The Evaluation process focused on various aspects of the Board and Committee functioning such as composition of the Board and Committees, experience and competencies, performance of specific duties and obligations, governance issues etc. The Directors expressed their satisfaction with the evaluation process.

iv) Appointment and Separate Meeting of Independent Directors

Terms and conditions of Independent Directors'' appointment and tenure are available on Company''s website www.skpmil.com.

Pursuant to Schedule IV of the Companies Act, 2013, the Independent Directors met on February 12, 2018 without the presence of Non-independent Directors and Members of the Management. The Independent Directors inter alia evaluated the performance of the Non-independent Directors and the Board of Directors as a whole, evaluated the performance of the Chairman of the Board taking into account the views of Executive and Non-Executive Directors and discussed aspects relating to the quality, quantity and timeliness of the flow of information between the Management and the Board. All Independent Directors were present in the meeting.

v) Familiarisation Programme for Independent Directors

The provision of an appropriate induction programme for new Directors and ongoing training for existing Directors is a major contributor to the maintenance of high Corporate Governance standards of the Company. The management provides such information and training either at the meeting of Board of Directors or otherwise.

The details of familiarization programmes are disclosed on the Company''s website at www.skpmil.com at http://www.skpmil.com/pagepdf/1459763693.pdf link.

3. AUDIT COMMITTEE

The Company has a qualified and independent Audit Committee and consists of 3 independent directors who provide assistance to the Board of Directors in fulfilling its responsibilities. The composition, procedure, Role/ Function of the committee is in accordance with the requirements of the Companies Act, 2013 read with rules thereunder as well as those of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Audit Committee invites Chief Financial Officer, other senior executives and representatives of auditors to be present at its meetings. The Company Secretary acts as the Secretary of the Audit Committee.

The brief terms of reference of the Audit Committee includes the following:

â¢ Oversight of the Company''s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;

â¢ Recommendation for appointment, remuneration and terms of appointment of auditors of the Company;

â¢ Reviewing, with the management, the annual financial statements and auditors'' report thereon before submission to the board for approval, with particular reference to:

> Matters required to be included in the Director''s Responsibility Statement to be included in the Board''s

report in terms of clause (c) of sub-section 3 of section 134 of the Act.

> Changes, if any, in accounting policies and practices and reasons for the same.

> Compliance with listing and other legal requirements relating to financial statements.

> Disclosure of any related party transactions.

> Qualifications in the draft audit report, if any.

â¢ Reviewing, with the management, the quarterly financial statements before submission to the Board for approval;

â¢ Approval or any subsequent modification of transactions of the Company with related parties;

â¢ Examination of the financial statement and the auditors'' report thereon;

â¢ Evaluation of internal financial controls and risk management systems;

â¢ Establish a vigil mechanism for Directors and employees to report genuine concerns in such manner as may be prescribed;

â¢ Interaction with Auditors including review of internal audit function and reports;

â¢ The audit committee shall review the information required as per SEBI Listing Regulations.

In addition, the Committee has discharged such other role/ function as envisaged under Regulation 18 of the Listing Regulations, 201 5 and the provisions of Section 1 77 of the Companies Act, 2013.

The Audit Committee met five times during the year 2017-18 on (i) April 12,2017 (ii) May 30, 201 7 (iii) September 13, 2017 (iv) December 12, 2017 and (v) February 13, 201 8. The necessary quorum was present at the meetings.

The composition and the details of meetings attended by the members of the Audit Committee for the financial year 2017-18 are given below:

Sr. No.	Name	Status	Category	No. of Meetings attended
1	Mr. P.M. Singh	Chairman	NED (I)	5
2	Mr. L. C. Sharma	Member	NED (I)	4
3	Mr. Rajesh Muju	Member	NED (I)	5

NED (I) - Non-Executive Director (Independent)

4. STAKEHOLDERS'' RELATIONSHIP COMMITTEE

The Stakeholders'' Relationship Committee has been formed in compliance with the Regulations under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and pursuant to Section 178 of the Companies Act 2013. Ms. Sonam Katyal, Company Secretary is designated as the "Compliance Officer" who oversees the redressal of the investors'' grievances.

The terms of reference of the Stakeholders Relationship Committee, inter alia, include the following:

(a) Handling the grievances/requests received from the shareholders of the Company;

(b) Periodically interact with the Registrar and Share Transfer Agent to ascertain and look into the quality of the Company''s investors grievance redressal system and to review the report on the functioning of the Investor grievances redressal system;

(d) Follow-up on the implementation of suggestions for improvement, if any;

(e) Report to the Board about serious concerns, if any.

During the year under review, the Stakeholders'' Relationship Committee was reconstituted pursuant to the resignation of Ms. Tripta Goswami and appointment of Ms. Rakhi Verma w.e.f. November 18, 2017. Ms. Rakhi Verma was appointed as Member of the Committee in place of Ms. Tripta Goswami.

During the year 2017-18, four meetings of the Stakeholders'' Relationship Committee were held on (i) June 22, 2017 (ii) August 21, 2017 (iii) November 18, 2017 and (iv) February 10, 2018.

The composition of the Stakeholders'' Relationship Committee and the details of meetings attended by the members during the financial year 2017-18 are given below:

Sr. No.	Name	Status	Category	No. of Meetings attended
1	Mr. P.M. Singh	Chairman	NED (I)	4
2	Mr. Rajesh Muju	Member	NED (I)	4
3	Ms. Tripta Goswami*	Member	NED	2
4	Ms. Rakhi Verma*	Member	NED	1

* resigned w.e.f November 18, 2017

# appointed w.e.f. November 18, 2017

NED (I) - Non-Executive Director (Independent)

â¢ No. of investors'' complaints received during the year: 2

â¢ No. of complaints not solved to the satisfaction of shareholders during the year: Nil

â¢ No. of complaints pending as at March 31, 2018: Nil (other than those which are under litigation, disputes or court orders)

5. NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee has been formed in compliance with the Regulations under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and pursuant to Section 178 of the Companies Act 2013.

The terms of reference of the Nomination and Remuneration Committee cover all applicable matters specified under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 178 of the Companies Act, 2013 which includes:

a) Identifying persons who are qualified to become Directors and who may be appointed in senior management positions in accordance with the laid down criteria;

b) Formulation of criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees;

c) Formulation of criteria for performance evaluation of Independent Directors and the Board;

d) Devising a policy on Board diversity;

e) Whether to extend or continue the term of appointment of the Independent Director, on the basis of the report of performance evaluation of Independent Directors.

During the year under review, the Nomination and Remuneration Committee was reconstituted pursuant to the resignation of Ms. Tripta Goswami and appointment of Ms. Rakhi Verma w.e.f. November 18, 2017. Ms. Rakhi Verma was appointed as member of the Committee in place of Ms. Tripta Goswami.

During the year 2017-18, three meetings of the Nomination and Remuneration Committee were held on (i) May 30, 201 7 (ii) September 13, 2017 and (iii) November 18, 2017.

The composition of the Nomination and Remuneration Committee and the details of meeting attended by the members during the financial year 2017-18 are given below:

Sr. No.	Name	Status	Category	No. of Meetings attended
1	Mr. Rajesh Muju	Chairman	NED (I)	3
2	Mr. P. N. Singh	Member	NED (I)	3
3	Ms. Tripta Goswami*	Member	NED	2
4	Ms. Rakhi Verma#	Member	NED

* resigned w.e.f November 18, 2017

# appointed w.e.f November 18, 2017

NED (I) - Non-Executive Director (Independent)

The Board has approved Nomination and Remuneration Policy as recommended by Nomination and Remuneration Committee which forms part of Directors'' Report.

6. REMUNERATION TO DIRECTORS

(i) Non-executive Directors don''t have any pecuniary

relationship or transactions with the Company. (ii) Criteria of making payments to Non-Executive Directors

The Company does not pay any remuneration or sitting fee to the Non-Executive Directors. They are entitled to claim the actual out-of-pocket expenses incurred for attending Board Meetings. (iii)Remuneration to Managing Director

The details of remuneration paid to Mr. N. K. Pasari, Managing Director during the year ended March 31, 2018 is as under:

					(Amount in Rs.)
Basic Salary	HRA	Perquisites	Bonus	Others-Contribution to PF	Total	Stock options granted
9,00,000	4,50,000	39,600	44,982	1,08,000	15,42,582	-

7. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

In accordance with the provisions of Section 135 of the Companies Act, 2013, the Company has constituted a CSR Committee comprising Mr. Rajesh Muju, Independent Director as its Chairman, Mr. P. N. Singh, Independent Director and Ms. Tripta Goswami, Non-Executive Director, as its Members. The committee was further reconstituted pursuant to the resignation of Ms. Tripta Goswami and appointment of Ms. Rakhi Verma w.e.f. November 18, 2017. Ms. Rakhi Verma was appointed as member of the Committee in place of Ms. Tripta Goswami.

The broad terms of reference of the CSR Committee are as under: Formulating and recommending to the Board, the CSR Policy which shall indicate the activities to be undertaken by the Company, Recommending the amount of expenditure to be incurred on the aforesaid activities and Reviewing and Monitoring the CSR Policy of the Company from time to time.

During the year 2017-18, four meetings of the Corporate Social Responsibility Committee were held on (i) May 30, 2017 (ii) September 13, 2017 (iii) November 18, 2017 and (iv) February 13, 2018.

The composition of the Corporate Social Responsibility Committee and the details of meeting attended by the members during the financial year 2017-18 are given below:

Sr. No.	Name	Status	Category	No. of Meetings attended
1	Mr. Rajesh Muju	Chairman	NED (I)	4
2	Mr. P. N. Singh	Member	NED (I)	4
3	Ms. Tripta Goswami*	Member	NED	2
4	Ms. Rakhi Verma#	Member	NED	1

* resigned w.e.f November 18, 2017

# appointed w.e.f November 18, 2017

NED (I) - Non-Executive Director (Independent)

8. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report on all the matters as required by Schedule V to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been included and is a part of the Annual Report.

9. RECONCILIATION OF SHARE CAPITAL

As stipulated by SEBI, the Company Secretary in practice carried out a Reconciliation of Share Capital Audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL), Central Depository Services (India) Limited (CDSL) and in physical form and the total issued/paid up capital. This audit is carried out every quarter and the report thereon is submitted to the Stock

Exchanges where the Company''s shares are listed. The audit confirms that the total Listed and Paid-up Capital is in agreement with the aggregate of the total number of shares in dematerialised form (held with NSDL and CDSL) and in physical form.

10.CEO/CFO CERTIFICATION

As required under Regulation 17(8) read with Part B of Schedule II to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Managing Director and Chief Financial Officer (CFO) have given annual certification to the Board with respect to the financial statements, internal controls and other matters which forms part of this report.

11.CODE OF CONDUCT

The Company has adopted the Code of Conduct for members of the Board and Senior Management personnel of the Company. The Code lays down, the standards of business conduct, ethics and governance. The compliance of the same has been affirmed and a declaration signed by the Managing Director to this effect forms part of this report. Code of Conduct has also been posted on the Company''s website www.skpmil.com

12.GENERAL MEETINGS

The details of Annual General Meetings held during last three years and the special resolution(s) passed there at, are as follows:

AGM Date & Time	Venue of Meeting	Special Resolution Passed
29-09-2015 11:00 a.m.	Shikshak Sadan, Surajmal Vihar, Delhi- 110092	Adoption of new set of Articles of Association of the Company.
29-09-2016 10:30 a.m.	Shikshak Sadan, Surajmal Vihar, Delhi- 110092	Reappointment of Mr. N. K. Pasari as Managing Director and fixing his remuneration
26-09-2017 10:30 a.m.	Shikshak Sadan, Surajmal Vihar, Delhi- 110092

There have been no resolutions put through postal ballot during the last year and there is no immediate proposal for passing any resolution through postal ballot.

13.MEANS OF COMMUNICATION

Effective communication of information is an essential component of Corporate Governance. The Company regularly interacts with shareholders through multiple channels of communication such as results announcement, annual report, Company''s website and subject specific communications.

â¢ The quarterly, half yearly and annual results are submitted to Bombay Stock Exchange in accordance with the listing requirements and published in the leading newspapers such as Business Standard (both English & Hindi). The Company''s website www.skpmil.com contains a separate dedicated section ''INVESTORS'' where shareholders'' information is available. The financial results and the Annual Report of the Company are available on the website.

â¢ All the data relating to financial results, quarterly compliances, various submissions/disclosure documents etc., are filed electronically on BSE''s Electronic platform ''Listing Centre'' and shareholding pattern & Corporate Governance Report have been filed in XBRL mode with the Exchange on the ''Listing Centre'' as mandated by BSE. The shareholders can also access the Company''s website for all the submissions and announcements.

â¢ The official press releases and presentations, if any, are also available on the Company''s website.

â¢ Disclosure pursuant to various provisions of Listing Regulations, as applicable, are promptly communicated to the Bombay Stock Exchanges, and are displayed by them on their websites.

14.GENERAL SHAREHOLDER INFORMATION

i) Annual General Meeting

Date : September 28, 2018

Day : Friday

Time : 10.30 a.m.

Venue : Shikshak Sadan

Surajmal Vihar

Delhi-110092

ii) Financial Year

The Company follows the period of April 1 to March 31 as the Financial Year.

iii) Financial Calendar (Tentative)

Board Meeting to take on record	Schedule
Results for the
* Quarter ending June 30, 2018	On or before August 14, 2018
* Quarter ending September 30, 2018	On or before November 14, 2018
* Quarter ending December 31, 2018	On or before February 14, 2019
* Quarter ending March 31, 2019	On or before May 30, 2019

iv) Book Closure Date

September 24, 2018 to September 28, 2018 (both days inclusive).

v) Listing on Stock Exchanges

The Equity Shares of the Company are listed on the following two Stock Exchanges:

Name & Address of the Stock Exchanges	Stock Code
Bombay Stock Exchange Ltd. Floor 25, PJ Towers, Dalai Street, Mumbai - 400 001	500388
The Calcutta Stock Exchange Association Ltd. 7, Lyons Range, Kolkata - 700 001	29133

vi) Market Price Data

The Equity Shares of the Company are traded at the Bombay Stock Exchange Limited (BSE) only. The performance of the Equity Shares of the Company in comparison to BSE Sensex is given hereunder:

Month	Share Prices		BSE Sensex
	High	Low	High	Low
April, 2017	23.90	23.90	30,184.22	29,241.48
May, 201 7	23.90	23.90	31,255.28	29,804.12
June, 2017	28.15	23.90	31,522.87	30,680.66
July, 2017	28.15	28.15	32,672.66	31,017.11
August, 2017	28.15	28.15	32,686.48	31,128.02
September, 201 7	28.15	24.40	32,524.11	31,081.83
October, 2017	35.60	26.90	33,340.17	31,440.48
November, 201 7	28.90	23.70	33,865.95	32,683.59
December, 201 7	35.75	28.25	34,137.97	32,565.16
January, 2018	45.40	31.70	36,443.98	33,703.37
February, 2018	40.80	29.10	36,256.83	33,482.81
March, 2018	39.05	29.60	34,278.63	32,483.84

The Company''s delisting application with Calcutta Stock Exchange is in process since long.

Note: The Company has paid the Listing Fee to Bombay Stock Exchange Ltd. upto 2018-2019.

Source: www.bseindia.com

vii) Code of conduct for prohibition of insider trading

In compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has adopted a code of conduct for its Directors and Designated Employees who could have access to the Unpublished Price Sensitive Information of the Company. The code lays down guidelines which included procedures to be followed and disclosures to be made while dealing with the shares of the Company.

viii) SEBI Complaints Redress System (SCORES)

SEBI has initiated SCORES for processing the investor complaints in a centralized web based redress system and online redressal of all the shareholders complaints. The Company is in compliance with the SCORES. During the year 2017-18, one shareholder''s complaint was received on SCORES by the Company which was duly resolved and Action Taken Report was uploaded on the SCORES online portal.

ix) Registrar and Share Transfer Agents

Shareholders can direct all correspondence to the Company''s Registrar and Share Transfer Agent (for both physical and demat segments) with regard to dematerialization of shares, share transfers, transmission, change of address or any other query relating to the shares of the Company at the following address:

M/s. Link Intime India Pvt. Ltd. 44, Community Centre, 2nd Floor, Naraina Indl. Area, Phase-l, New Delhi-110028 Ph. # 011-41410592 to 94 Fax #011-41410591 Email Id.: [email protected] Website: www.linkintime.co.in Contact Persons: Mr. Swapan Kumar Naskar Mr. Shamwant Kushwaha

x) Share Transfer System

The share transfers which are received in physical form are processed and transferred by Registrar and Share Transfer Agents and the share certificates are returned within a period of 15 days from the date of receipt, subject to the documents being valid and complete in all respects. The Share Transfer Committee also considers the demat/remat requests including share transfer/transmission matters as and when the same are forwarded by the Registrar and Share Transfer Agents.

xi) Pending Share Transfers

No Share transfers were pending as on March 31, 2018.

xii) Distribution of Shareholding

The distribution of shareholding as on March 31, 2018 was as under:

Shareholding of Shares	Shareholders Number	%	Number of shares	%
1 to 500	1129	82.53	2,03,042	1.50
501 to 1000	141	10.31	1,20,062	0.89
1001 to 2000	45	3.29	71,738	0.53
2001 to 3000	18	1.32	45,572	0.34
3001 to 4000	4	0.29	13,655	0.10
4001 to 5000	7	0.51	31,198	0.23
5001 to 10000	3	0.22	18,662	0.14
10001 & above	21	1.53	1,30,17,751	96.27
Total	1,368	100.00	1,35,21,680	100.00

Shareholding pattern as on March 31, 2018

Category Code	Category of shareholder	Number of share holders	Total number of shares	As a percentage of total shares
(A)	Shareholding of Promoter and Promoter Group
1	Indian	7	57,10,680	42.23
2	Foreign	-	-	-
Total Shareholding of Promoter and Promoter Group		7	57,10,680	42.23
(B)	Public Shareholding
1	Institutions	-	-	-
2	Bodies Corporate	20	38,37,501	28.38
3	Non-Resident Indians/ Foreign Bodies Corporate	4	32,00,303	23.67
4	Resident Individuals and Others	1337	7,73,196	5.72
Total Public Shareholding		1361	78,11,000	57.77
(C)	Shares held by Custodians and against which Depository Receipts have been issued
	Total (A B C)	1368	1,35,21,680	100.00

xiii) Dematerialization of Shares

The Company has executed agreements with National Securities Depositories Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for dematerialisation of shares. As on March 31, 2018, a total of 30,29,517 Equity Shares representing 22.40% of the total paid-up capital of the Company were in dematerialized form. Members are advised to get their shares converted into demat mode.

The Company''s ISIN No.: INE 970C01012

xiv) Outstanding GDRs/ADRs /Warrants etc

The Company has no outstanding GDRs/ADRs/Warrants or any convertible instruments as on March 31, 2018.

(xv) Commodity Price Risk/ Foreign Exchange Risk and Hedging

The Company has foreign exchange risk and the mitigation of the same is managed by entering into forward contracts to hedge the risk as per Company''s policy. The details of foreign currency exposure as on March 31, 2018 are disclosed in Note No. 58 of the Financial Statement. The Company does not indulge in commodity hedging activities.

xvi) Plant Location

Plot No. "SPL-A" RIICO Industrial Area, Village - Keshwana, Tehsil - Kotputli, Distt. Jaipur (Rajasthan) PIN -303 108

xvii) Address for Correspondence

Shree Krishna Paper Mills & Industries Ltd.

4830/24, Prahlad Street,

Ansari Road, Darya Ganj,

New Delhi-110002.

Phone Nos.: 91-11 -23261 728, 46263200

Fax No.: 91-11-23266708

E-mail ID: [email protected], [email protected]

Website: www.skpmil.com

xviii) Corporate Identity Number

L2101 2DL1 972PLC279773

15.DISCLOSURES

a) All transactions entered into with related parties during the year under review were on an arm''s length price basis and in the ordinary course of business. These have been approved by the Audit Committee. The Company has not entered into any materially significant related party transaction that may have potential conflict with the interests of the Company at large. The Board of Directors have approved and adopted a Policy on Related Party Transactions and the same has been uploaded on the website of the Company and can be accessed at www.skpmil.com at http://www.skpmil.eom/pagepdf/1459763367.pdf link. The details of related party transactions during the year have been set out under Note No. 59 of Notes to Financial Statements.

b) No strictures or penalties have been imposed on the Company by the Stock Exchanges, Securities and Exchange Board of India (SEBI) or by any statutory authority on any matters related to capital markets during the last three years.

c) The Board of Directors of the Company has approved a whistle blower policy/vigil mechanism to monitor the actions taken on complaints received under the said

policy. This policy also outlines the reporting procedure and investigation mechanism to be followed in case an employee blows the whistle for any wrong-doing in the Company. It is ensured that employees can raise concerns regarding any violation or potential violation easily and free of any fear of retaliation, provided they have raised the concern in good faith. The Policy is expected to help to draw the Company''s attention to unethical, inappropriate or incompetent conduct which has or may have detrimental effects either for the organisation or for those affected by its functions. The details of establishment of vigil mechanism are available on the website of the Company. No personnel have been denied access to the Audit Committee. all the mandatory provisions of SEBI Requirements)

d) The Company has complied with requirements laid down under the (Listing Obligations and Disclosure Regulations, 2015.

e) As the Company doesn''t have any subsidiary under the provisions of the Companies Act, 2013 read with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the requirement for adopting the Policy for determining ''material'' subsidiaries is not applicable. Hence, no web link of the policy has been given in this report.

f) During the financial year ended March 31, 2018, the Company did not engage in commodity hedging activities.

g) In the preparation of financial statements, the Company has followed the applicable Accounting Standards. The significant accounting policies which are consistently applied have been set out in the Notes to the Financial Statements.

h) There is an inter-se relationship between two Directors of the Company. Mr. N. K. Pasari, Managing Director of the Company is the son of another Director, Mr. B. N. Pasari.

i) The Company has laid down procedures to inform Board members about the risk assessment and its minimisation, which is periodically reviewed to ensure that risk control is exercised by the management effectively.

j) The Company has fully complied with the applicable requirement specified in regulations 17 to 27 and clause (b) to (i) of sub-regulation (2) of regulation 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Auditors'' Certificate of Compliance with Corporate Governance pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

To the members of,

Shree Krishna Paper Mills & Industries Limited

We have examined the compliance of conditions of Corporate Governance by Shree Krishna Paper Mills & Industries Limited for the year ended on March 31, 2018, as stipulated in Regulation 17 to 27, clause (b) to (i) of Regulation 46(2) and paragraph C, D and E of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring the compliance of conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, and the representations made by the Directors and Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Regulations.

We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.

	For Radheshyam Sharma & Co.
	Chartered Accountants
	Firm Registration No. 016172N
New Delhi	(CA Radheshyam Sharma)
May 30, 2018	Proprietor
	Membership No. 097127

Declaration for compliance with Code of Conduct

I, N. K. Pasari, Managing Director of the Company declare that all the members of the Board of Directors and senior management personnel have, for the year ended March 31, 2018, affirmed compliance with the Code of Conduct as laid down by the Company in terms of Regulation 26(3) read with Schedule V to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

	For Shree Krishna Paper Mills & Industries Ltd.
New Delhi	N. K. Pasari
May 30, 2018	Managing Director DIN: 00101426

Certificate by Managing Director and Chief Financial Officer

The Board of Directors,

Shree Krishna Paper Mills & Industries Limited

1. We have reviewed financial statements and the cash flow statement for the year ended March 31, 2018 and to the best of our knowledge and belief, we state that:

(i) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

(ii) These statements together present a true and fair view of the Company''s affairs and are in compliance with existing accounting standards, applicable laws and regulations.

2. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violative of the Company''s code of conduct.

3. We accept responsibility for establishing and maintaining internal controls for financial reporting. We have also evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and we have disclosed to the auditors and the audit committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and intimated the steps taken or proposed to be taken to rectify these deficiencies.

4. We have indicated to the Auditors and the Audit Committee:

(i) significant changes in internal control over financial reporting during the year;

(ii) significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and

(iii) instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company''s internal control system over financial reporting.

	(S. K. AGARWAL)	(N. K. PASARI)
	Chief Financial Officer	Managing Director
		DIN: 00101426
New Delhi
May 30, 2018

Mar 31, 2016

To the Members of

Shree Krishna Paper Mills & Industries Limited Report on the Financial Statements

We have audited the accompanying financial statements of Shree Krishna Paper Mills & Industries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2016, 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.

Management''s Responsibility for the 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 Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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 March 31, 2016, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by 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.

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

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

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

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

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

(e) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 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 B'' .

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - refer note no. 35 of 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 were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

Referred to in Paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements", we report that:

(i) (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 regular programme of verification at reasonable intervals which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us, the title deeds of immovable properties are held in the name of the Company.

(ii) The management has conducted physical verification of Inventory except of goods-in-transit at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.

(iii) The Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Accordingly, the provisions of para 3(iii) (a), (b) and (c) of the said Order are not applicable to the Company.

(iv) The Company has not granted any loans or provided any guarantees or security to the parties covered under Section 185 of the Act. The Company has not given any loan, made any investment, provided any guarantee/ security and hence, the provisions of Section 186 of the Act are not applicable.

(v) The Company has not accepted any deposits from the public within the meaning of Section 73 to 76 of the Act and the Rules framed there under.

(vi) We have broadly reviewed the books of account maintained by the Company prescribed by the Central Government for the 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. We have not however, made a detailed examination of the records.

(vii) (a) According to the information and explanations given

to us and on the basis of our examination of the records of the Company, the Company is generally regular in depositing the undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities.

According to information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were outstanding as on March 31, 2016 for a period more than six months from the date the same became payable.

(b) According to the information and explanations given to us, there are no dues of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax and cess which have not been deposited with the appropriate authorities on account of any dispute other than those as mentioned below:

Nature of the Statute	Nature of dues	Amount ('' in Lacs)	Period to which the amount relates	Forum where dispute is pending
Central Excise Act, 1944	Excise Duty	3.00	November, 2006 to July, 2007	Hon''ble CESTAT, New Delhi
Central Excise Act, 1944	Excise Duty	19.22	02-03-2004 to 13-04-2007	Hon''ble CESTAT, New Delhi
Service Tax (Finance Act, 1994)	Service Tax	0.32	2006-2008	Hon''ble CESTAT, New Delhi
Rajasthan State Pollution Control Board	Water Cess	6.70	01-06-2007 to 31-03-2013	Cess Appellate Committee
Central Excise Act, 1944	Excise Duty	631.88	19-01-2004 to 30-09-2014	Commissioner (Excise)
Haryana Local Area Development Act, 2000	LADT	234.86	2001-02 to 2012-13	Hon''ble Supreme Court

(viii) According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in the repayment of loans/borrowings to the banks as on March 31, 2016 except that in respect of the following dues which were due on March 31, 2016. The restructuring proposal has been submitted by the Company to the banks, approval whereof is awaited: during the year under audit.

(xi) According to the information and explanations given to us and based on our examination of the records, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 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. Therefore, the provisions of para 3(xii) of the Order are not applicable to the Company.

(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 (AS-18)

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, 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 transaction with directors or persons connected with him. Accordingly, the provisions of para 3(xv) of the Order are not applicable.

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

Name of Bank	Amount (Rs, in Lacs)
Bank of India	121.00
Dena Bank	65.00
Andhra Bank	67.98
Catholic Syrian Bank Limited	89.25

However, the same has been paid since the close of the financial year.

The Company does not have any loan or borrowings from the financial institution or Government, nor has issued any debentures.

(ix) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) and term loans. Hence, provisions under para 3(ix) of the Order is not applicable to the Company.

(x) Based upon the audit procedures performed and according to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported

We have audited the internal financial controls over financial reporting of Shree Krishna Paper Mills & Industries Limited ("the Company") as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Report on the Internal Financial Controls 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 the 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.

Auditor''s Responsibility

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

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

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

Meaning of Internal Financial Controls over Financial Reporting

A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial reporting includes those policies and procedures that (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 March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Radheshyam Sharma & Co.

Firm Registration No. 016172N

Chartered Accountants

(CA Radheshyam Sharma)

Proprietor Membership No. 097127

New Delhi

Date : May 30, 2016

Mar 31, 2015

We have audited the accompanying financial statements of Shree Krishna Paper Mills & Industries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the 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 Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

Emphasis of Matters

We draw attention to Note No. 38 of the financial statements which describes the preparation of financial statements on going concern assumption despite of erosion of net worth. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

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

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

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

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

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

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

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

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE TO INDEPENDENT AUDITORS' REPORT

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

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

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(ii) (a) The inventories (except goods in transit) have been physically verified by the Management during the year. In our opinion, the frequency of such verification is reasonable.

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

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

(iii) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act. Accordingly, the sub-clauses (a) and (b) are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and with regard to the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

(v) The Company has not accepted any deposits in term of directives issued by Reserve Bank of India and the provisions of Section 73 to 76 or any other relevant provisions of the Act and the rules framed there under.

(vi) We have broadly reviewed the books of account maintained by the Company prescribed by the Central Government for the 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. However, we have not made a detailed examination of the records.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, undisputed statutory dues including provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues have generally been regularly deposited by the Company with the appropriate authorities. According to information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were outstanding as on March 31,2015 for a period more than six months from the date the same became payable.

(b) According to the information and explanations given to us, there are no dues of income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax and cess which have not been deposited with the appropriate authorities on account of any dispute other than those as mentioned below:

Nature Nature Amount Period to Forum where of the of dues (Rs. in Lacs) which the dispute is Statute amount pending relates

Custom Custom 228.14 2002-2003 Hon'ble High Act, 1962 Duty Court, Jaipur

Central Excise 3.00 November, Hon'ble Excise Duty 2006 to CESTAT, New Act, 1944 July, 2007 Delhi

Central Excise 19.22 02-03-2004 Hon'ble Excise Duty to CESTAT, New Act, 1944 13-04-2007 Delhi

Central Service 0.32 2006-2008 Hon'ble Excise Tax CESTAT, New Act, 1944 Delhi

Pollution Water 6.70 01-06-2007 Cess Appellate Control Cess to Committee Board 31-03-2013

Central Excise 4042.96 19-01-2004 Commissioner Excise Duty to (Excise) Act, 1944 30-09-2014

LADT Sales 259.98 Various Hon'ble -Haryana Tax years Supreme Court

(c) According to the information and explanation given to us and on the basis of our examination of the records , the Company does not have any amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under.

(viii) The Company has accumulated losses as per books of account at the end of the financial year which is more than 50% of its net worth. The Company has not incurred cash losses during the current financial year and in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its banks. The Company did not have any outstanding dues to any financial institutions or debentures holders during the year.

(x) As per the information and explanations given to us, the company has not given any guarantee for loans taken by others from any bank or financial institutions.

(xi) In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purposes for which they were raised.

(xii) Based upon the audit procedures performed and

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

For Singal Bros. & Associates Chartered Accountants Firm Registration No. 002031N

(CA Viresh Kumar) Partner Membership No : 509768

New Delhi Date : May 30, 2015

Mar 31, 2014

We have audited the accompanying financial statements of Shree Krishna Paper Mills & Industries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

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

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

Opinion

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:

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

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

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

Emphasis of matter

We draw attention to Note No. 38 of the financial statements which describes the preparation of financial statements on going concern assumption despite of erosion of net worth. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards notified under the Companies Act,1956 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;

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

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT (Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our Report of even date)

(i) In respect of its fixed assets:

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 regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c) The Company has not disposed off a substantial part of its fixed assets during the year and hence, the going concern status of the Company is not affected.

(ii) In respect of its inventories:

a) As explained to us, the inventories (except goods in transit) have been physically verified by the Management during the year. In our opinion, the frequency of such verification is reasonable.

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

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

(iii) In respect of the loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act,1956:

a) As informed to us, the Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (b) to (d) of the Order are not applicable.

b) The Company has taken unsecured loans from two companies covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs.117.55 lacs and year end balance of loans taken from such parties is Rs.117.55 lacs.

c) In our opinion and according to the information and explanation given to us ,the rate of interest and other terms and conditions on which such loans have been taken are not prima facie prejudicial to the interest of the Company.

d) The Company is regular in payment of interest and principal, as stipulated.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weakness in such internal control system.

(v) In respect of the contracts or arrangements referred to in Section 301 of the Companies Act,1956:

a) In our opinion and according to the information and explanations given to us, during the year, there were no transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956.

b) In our opinion, and according to the information and explanations given to us, there are no transactions made in pursuance of such contracts or arrangements exceeding the value of Rs.5.00 lacs in respect of any party during the year.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public of the nature which attracts the provisions of section 58A, 58AA or any other relevant provisions of the Companies Act,1956 and the rules made thereunder. Therefore, the provisions of clause 4 (vi) of the said Order are not applicable to the Company.

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

(viii) 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 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) In respect of statutory dues:

a) According to the records of the Company, the Company has generally been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities to the extent applicable. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2014 for a period of more than six months from the date they becoming payable.

b) According to the information and explanations given to us, the dues outstanding in respect of Income Tax, Sales Tax, Service Tax, Custom Duty, Wealth Tax, Excise Duty and Cess on account of any dispute aggregating Rs.4485.88 lacs, are as follows:

Nature Nature Amount Period to Forum where of the of dues (Rs. in which the dispute is Statute Lacs) amount pending relates

Custom Custom 228.14 2002-2003 Hon''ble High Act, 1962 Duty Court, Jaipur

Central Excise 3.00 November, Hon''ble Excise Duty 2006 to CESTAT, New Act, 1944 July. 2007 Delhi

Central Excise 19.22 02-03- Hon''ble Excise Duty 2004 to CESTAT, New Act, 1944 13-04-2007 Delhi

Central Service 0.32 2006-2008 Hon''ble Excise Tax CESTAT, New Act, 1944 Delhi

Pollution Water 6.70 01-06- Cess Control Cess 2007 to Appellate Board 31-03-2013 Committee

Central Excise 3980.37 19-01- Commissioner Excise Duty 2004 to (Excise) Act, 1944 30-11-2013

LADT - Sales 248.13 Various Hon''ble Haryana Tax years Supreme Court

(x) The Company has accumulated losses as per books of account at the end of the financial year which is more than 50% of its net worth. The Company has not incurred cash losses during the current financial year and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. The Company does not have any dues to financial institutions and debenture holders.

(xii) In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/ society. Therefore, the provisions of clause 4 (xiii) of the said Order are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4 (xiv) of the said Order are not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from banks or financial institutions.

(xvi) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purpose for which they were obtained.

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

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

(xix) The Company has not issued any debentures during the year.

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

(xxi) To the best of our knowledge and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For Singal Bros. & Associates Chartered Accountants

Firm Registration No. 002031N

(CA Subhash Gupta)

Partner

Membership No. 095387

New Delhi

Date : May 29, 2014

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Shree Krishna Paper Mills & Industries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

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

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

Opinion

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

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

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

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

Emphasis of matter

We draw attention to Note no. 2.38 of the financial statements which describes the preparation of financial statements on going concern assumption despite of erosion of net worth. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

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

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

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

(b) The fixed Assets have been physically verified by the management during the year based on a phased programme of verification which in our opinion is reasonable having regard to the size of the Company and nature of its business. No material discrepancies were noticed on such physical verification.

(c) The Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

(ii) (a) As per the information and explanations given to us, the inventories (except goods in transit) has been physically verified by the management during the current year. In our opinion, the frequency of such verification is reasonable.

(b) As per the information and explanations given to us, the procedures for the physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) As per the information and explanations given to us, the Company is maintaining proper records of inventories. Discrepancies identified on physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account.

(iii) (a) As informed to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (b) to (d) of the Order are not applicable.

(b) The Company has taken unsecured loans from two Companies covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs.117.55 lacs and year end balance of loans taken from such parties is Rs.117.55 lacs.

(c) In our opinion, the rate of interest and other terms and conditions on which such loans have been taken are not prima facie prejudicial to the interest of the Company.

(d) The Company is regular in payment of interest and principal, as stipulated.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system.

(v) (a) In our opinion and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into 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 made in pursuance of such contracts or arrangements have been entered into the register maintained under section 301 of the Companies Act, 1956 in respect of each party during the year have been made at prices which are reasonable having regard to the prevailing market price at the relevant time except in cases where comparison could not be made in the absence of similar transactions with other parties.

(vi) As per the information and explanations given to us, the Company has not accepted any deposits from the public of the nature which attracts the provisions of section 58A, 58AA or any other relevant provisions of the Companies Act,1956 and the rules made thereunder. Therefore the provisions of clause 4 (vi) of the said Order are not applicable to the Company.

(vii) In our opinion, the internal audit system of the Company is commensurate with the size and the nature of its business.

(viii) 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 209(1)(d) of the Companies Act, 1956 in respect of paper industries and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities to the extent applicable and there are no undisputed statutory dues payable for a period of more than six months from the date they becoming payable as at March 31,2013.

(b) According to the records of the Company, the dues outstanding in respect of Income Tax, Sales Tax, Service Tax, Custom Duty, Wealth Tax, Excise Duty and Cess on account of any dispute aggregating Rs.4352.14 lacs, are as follows:

(Rs. in Lacs)

Nature of the Nature Amount Period to Forum where Statute of dues which the dispute is amount relates pending

Custom Act, Custom 228.14 2002-2003 Hon''ble High 1962 Duty Court, Jaipur.

Central Excise Excise 3.00 November, 2006 Hon''ble CESTAT, Act, 1944 Duty to July. 2007 New Delhi

Central Excise Excise 19.22 02-03-2004 to Hon''ble CESTAT, Act, 1944 Duty 13-04-2007 New Delhi

Central Excise Excise 0.27 September, 2007 Hon''ble CESTAT, Act, 1944 Duty to March, 2008 New Delhi

Central Excise Service 0.32 2006-2008 Hon''ble CESTAT, Act, 1944 Tax New Delhi

Pollution Water 5.08 01-06-2007 to Cess Appellate Control Board Cess 31-03-2012 Committee

Central Excise Service 7.16 10-09-2004 to Jt. Commissioner Act, 1944 Tax 31-03-2007 (Excise)

Central Excise Excise 3819.94 19-01-2004 to Commissioner Act, 1944 Duty 31-03-2012 (Excise)

LADT Sales 234.86 Various years Hon''ble Supreme -Haryana Tax Court

Custom Custom 21.83 08-07-2011 to Commissioner Act ,1962 Duty 27-07-2011 (Appeal), Jaipur

Central Excise Service 12.32 2009-10 & Commissioner Act, 1944 Tax 2010-2011 Appeal (Excise) (Upto Nov,2010)

(x) The Company has accumulated losses as per books of account at the end of the financial year which is more than 50% of its net worth. The Company has not incurred cash losses during the current financial year and in the immediately preceding financial year.

(xi) As per books and records maintained by the Company and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks, financial institutions and debenture holders.

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

(xiii) In our opinion, the Company is not a chit fund or a Nidhi / mutual benefit fund/ society. Therefore, the provisions of clause 4 (xiii) of the said Order are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4 (xiv) of the said Order are not applicable to the Company.

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

(xvi) According to the information and explanations given to us, the Company has raised new term loans during the year and has utilized the term loans during the year for the purpose for which they were raised.

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

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

(xix) The Company has not issued any debentures during the year.

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

(xxi) In our opinion and according to the information and explanations given to us by the management which have been relied upon by us, no fraud on or by the Company has been noticed or reported during the year.

For Singal Bros. & Associates

Chartered Accountants

Firm''s Registration Number 02031N

(CA Subhash Gupta)

New Delhi Partner

Date : May 30, 2013 Membership No. 095387

Mar 31, 2012

1. We have audited the attached Balance Sheet of Shree Krishna Paper Mills & Industries Limited as at March 31, 2012, the statement of Profit and Loss and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

4. Attention is drawn to the following:- Deferred tax assets amounting to Rs. 626.48 lacs upto 31.03.2011 have been recognized in the accounts on the basis of future income projections made by the management, as in the opinion of the management, there is a virtual certainty that sufficient taxable income would be available in future to adjust such deferred tax assets. We are unable to offer our comments on such projections and creation of deferred tax assets and consequent impact thereof, if any. During the current year, deferred tax assets have been recognized only to the extent of deferred tax liability.

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

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

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

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

(d) In our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 except otherwise stated in para 4 above;

(e) On the basis of written representations received from the Directors of the Company and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2012 from being appointed as a Director under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and notes thereon and subject to our observations as mentioned in para 4 above regarding deferred tax assets, give the information required by the Companies Act, 1956 in the manner so required and present a true and fair view in conformity with the accounting principles generally accepted in India:- i) In the case of Balance Sheet, of the state of affairs of the Company as at March 31, 2012

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

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

ANNEXURE TO THE AUDITORS' REPORT (Referred to in Paragraph 3 of our Report of even date)

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

(b) The fixed Assets have been physically verified by the management during the year based on a phased programme of verification which in our opinion is reasonable having regard to the size of the Company and nature of its business. No material discrepancies were noticed on such physical verification.

(c) The Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

(ii) (a) As per the information and explanations given to us, the inventory (except goods in transit) has been physically verified by the management during the current year. In our opinion, the frequency of such verification is reasonable.

(b) As per the information and explanations given to us, the procedures for the physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) As per the information and explanations given to us, the Company is maintaining proper records of inventory. Discrepancies identified on physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account.

(iii) (a) As informed to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (b) to (d) of the Order are not applicable.

(b) The Company has taken unsecured loans from two Companies covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs. 111.67 lacs and year end balance of loans taken from such parties is Rs. 111.67 lacs.

(c) In our opinion, the rate of interest and other terms and conditions on which such loans have been taken are not prima facie prejudicial to the interest of the Company.

(d) The Company is regular in payment of interest, as stipulated and no amount of principal loans were repayable during the year.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system.

(v) (a) In our opinion and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangement that need to be entered into 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 made in pursuance of such contracts or arrangements have been entered into the register maintained under section 301 of the Companies Act, 1956 in respect of each party during the year have been made at prices which are reasonable having regard to the prevailing market price at the relevant time except in cases where comparison could not be made in the absence of similar transactions with other parties.

(vi) As per the information and explanations given to us, the Company has not accepted any deposits from the public of the nature which attracts the provisions of section 58A, 58AA or any other relevant provisions of the Companies Act 1956, and the rules made there under. Therefore the provisions of clause 4 (vi) of the said Order are not applicable to the Company.

(vii) In our opinion, the internal audit system of the Company is commensurate with the size and the nature of its business.

(viii) 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 209(1)(d) of the Companies Act, 1956 in respect of paper industries and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-Tax, Sales-tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities to the extent applicable and there are no undisputed statutory dues payable for a period of more than six months from the date they becoming payable as at 31st March, 2012. (b) According to the records of the Company, the dues outstanding in respect of Income Tax, Sales Tax, Service Tax, Custom Duty, Wealth Tax, Excise Duty and Cess on account of any dispute, are as follows:-

(Rs. in Lacs)

Nature Nature of Amount Period to which Forum where of the dues the amount dispute is Statute relates pending

Custom Custom 228.14 2002-2003 Hon'ble High Act, 1962 Duty Court, Jaipur.

Central Excise Duty 6.00 November, 2006 to Hon'ble CESTAT, Excise Act, July. 2007 New Delhi 1944

Central Excise Duty 38.44 02-03-2004 to Hon'ble CESTAT, Excise Act, 13-04-2007 New Delhi 1944

Central Excise Duty 6.64 September, 2007 to Hon'ble CESTAT, Excise Act, March, 2008 New Delhi 1944

Central Service Tax 0.65 2006-2008 Hon'ble CESTAT, Excise Act, New Delhi 1944

Pollution Water Cess 4.92 01-06-2007 to 31- Cess Appellate Control 12-2011 Committee Board

Central Service Tax 7.16 10-09-2004 to 31- Jt.Commissioner Excise Act, 03-2007 (Excise) 1944

Central Excise Duty 3634.74 19-01-2004 to 31- Commissioner Excise Act, 03-2011 (Excise) 1944

LADT Sales Tax 213.83 Various years Hon'ble Supreme -Haryana Court

Custom Custom 21.83 08-07-2011 to 27- Additional Act ,1962 Duty 07-2011 Commissioner (Custom), Jaipur

Central Service Tax 12.32 2009-10 & 2010- Commissioner Excise Act, 2011 Appeal (Excise) 1944

(x) The Company has accumulated losses as per books of account at the end of the financial year which is more than 50% of its net worth. Reference is further drawn to Note No. 2.37 of Notes to financial statments regarding recognition of deferred tax assets impact whereof is not ascertainable at this stage. The Company has not incurred cash losses during the current financial year but incurred cash losses in the immediately preceding financial year.

(xi) As per books and records maintained by the Company and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks, financial institutions and debenture holders.

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

(xiii) In our opinion, the Company is not a chit fund or a Nidhi / mutual benefit fund/ society. Therefore the provisions of clause 4 (xiii) of the said Order are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Therefore the provisions of clause 4 (xiv) of the said Order are not applicable to the Company.

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

(xvi) According to the information and explanations given to us, the Company has utilized the term loans during the year for the purpose for which they were raised.

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

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

(xix) The Company has not issued any debentures during the year.

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

(xxi) In our opinion and according to the information and explanations given to us by the management which have been relied upon by us, no fraud on or by the Company has been noticed or reported during the year.

For Singal Brothers & Associates

(Firm Regn. No. 002031N) Chartered Accountants

August 13, 2012 (Subhash Gupta)

New Delhi Partner

Membership No. 095387

Mar 31, 2010

1. We have audired the attached Balance Sheet of Shree Krishna Paper Mills & Industries Limited as at 31st Match 2010, the Profit and Loss Account and the Cosh Flow Statement tor the year ended on that date annexed thereto. These financial statements are the responsibility of the- Companys management. Our responsibility is to express an opinion on these financial statements based on oor audit,

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

3. As required by the Companies (Auditors Report) Order, 2003 (as amended) (The Order) issued by the Central Government of India in terms. of Section 227I(4A) of the Companies Act 1956 (The Act, we enclose in the Annexure, a staienment on the mailers specified in paragraphs 4 and 5 of the said Order.

4. Attention is drawn to the following:

Deferred Tax Assets amounting to Rs 17959 thousands for the year and Rs 44,057 thousands upto 31.03 2010 have been recognized in the accounts on the basis ot future income projertons made by the management as inn the opinion of the management, there is a virtual certainly that sufficient taxble income would be .avalilable in future to adjust such deferred tax assert We are unable to offer our comments on such projections and creation or deferred fax assets and consequent impact thereof, if any. (refer note No.2 of Schedule-19 5. Further to our comments in the Annexure referred to in paragraph i above, we report that:

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

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

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

(d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards. referred to in Section 21100 of the Companies Act, 1956 except otherwise stated in para 4-above;

(e) On the basis of written representations received from the Directors of the Company 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 under clause (g) of sub-section (1) of Section 274 of the Companies An, 1050;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies ami notes thereon and subjed to our observations as mentioned in par a 4 above regarding deferred tax assets, give the information required by the Companies Act. 1956 in the manner required and present a lnue and tair view in comformity with the accounting principles generally accepted in India;-

i) In the case of Balance Sheet, of the stale of affairs of the Company as at 31st March. 2010;

ii) in the case of Profit and Loss Account. of the Loss of the Company for the year ended on that date and

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

ANNEXURE TO THE AUDITORS REPORT

(Referred to in Paragraph 3 of our Report on even date)

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

(b) The fixed Assets have been physically verified by the management during the year based on a phased programme of verfication which in our opinion is reasonable: having repaid to the size of the Company and nature of its business No material discrepancies were noticed on such physical verification

(c) The Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

(ii) (a) As per the information and explanations given to us, the inventory (except goods in transit) has been physically verified by the management during the current year. In our opinion, the frequency of such verification is reasonable.

(b) As. per the information and explanations given to us,the procedures for the physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) As per the information and explanations given to us, the Company is maintaining proper records of inventory. Discrepancies identfied on physical verification of inventories as Compared to book records were net material and have been propedy deak with in the books of account.

(iii) (a) As informed to us, the Company has not

granted any loans, secured or unsecured to companies, firms or other parties covered in the- register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (b) to (d) of the Order are not applicable. (b) The Company has taken unsecured loans from two Companies covered in the register maintained underSection 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs. 10,194 thousands and year end balance of bans taken from such parties is Rs. 10. 194 thousands.

(c) In our opinion, the rate of inrerest and other terms and Conditors on which such loam have been taken are not prima facir prejudicial to the interest of the Company,

(d).- The Company is regular in payment of interest, as slipulated and the principal amount is repayable on.demand. (iv) In out opinion and accounting to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature ot its business for the port have of inventory and fixed assets and for the sale or goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system

(v) (a) In our opinion and and ording to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangement thai need to he entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered. (b) In our opinion amd according to the information and explanations given to us. the transactions made m pursuance of such contracts or arrangements have been entered into the register maintained under section 301 of the Companies Act, 1956 respect of each pany during the year have been made at prices which aee reasonable having regard to the prevaling market price at the relevant time except in castas where companson could not be made in the absence of similar transactions with other parties.

(vi) As per the informatopm and explanations given to us, the Company has not arcepred any deposits ftom the public of the nature which attracts the provisions of section 58A, 58AA or any other relevant pfovitwwmsof the Companies Act 1956 and the rules made there under. Therefore the provisions of clause 4 (vi) of the said Order are not applicable to the Company.

(vii) In our opinion, the internal audit system of the Company is commensurate with the size and the nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Govenment . for maintenance of cost records under section 209l(l)(d) of the Companies Act, 1956 in respect of paper industnies and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have made delated examination of the records with a view to determine whether they are acrurate or complete.

(ix) (a) Attending to the records or the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Prorection fund. Employees State Insurance, income-Tix, Sales-tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities to the extent applicable and there are no undisputed statutory dues payable tor a period of more than six months from the date they lbecoming payable as at 31st March, 2010.

(b) According to the records of the Company, the dues outstanding in respect of Income Tax, Sales Tax, Service Tax, Custom Duty, Wealth lax, Excise Duly and Cess on account any dispute, are as follows:

x) The Company has accumulated tosses as per books of account end of the financial year which is more than 50% of its net worth Reference is further drawn to Note No. 2 of Schedule 19 regarding recognition of Deferred fax Assets impact whereof is not asceratinable at this stage. The Company has incurred cash losses during the current financial year has not incurred cash losses in the immediately preceding financial year.

(xi) As per books and records maintained by the Company and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to hanks, financial institution* and delienlure holders as the rescheduling of the terms and conditions of loans has been approved by the Bankers in terms or LOA No, CDRLABPINO. 605/2009-10 dated 17.08.2009 lssued by the CDR,.(xii) According to the information and explanations given to us, the Company has not granted loan and advances on the basis of security by way of pledge of shares, deventures and other sec unties.

(xiii) In our ipinion, the Company is not a chit fund or a Nidhi / mutual benefit fund/sicuety. Therefore the procisions of clause 4 (xiii) of the said Order are not applicable to the Company..

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, detienturcs and other investments. Therefore the provisions of clause 4 (xiv) of the said Order are not applicable to the Company.

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

(xvi) According to the information and explanations given to us the Company has. utilzed the term loans during the year for the purpose tor which they were raised.

(xvii) According to the information and explanations, given to us and an an overall examination of the Balance Sheet of the Comapny, we are of the opinion that the funds ralsed on short-term basis have, prima facie, not been used for long term investment.

(xviii) The Company has not made any preferntial allotmen of shares during the year to any parties or companies covered in the register maintained under Section 301 of the Companies Act 1956.

(xix) The Company has not issued any defeenitirss during the year.

(xx) The Company has not raised any money by way of public, issue during the year

(xxi) in out opinion and according to the information and explanations given to us by the management which have been relied upon by us, no fraud on or by the Company has been noticed or reported during the year.

For sinal Bros. & Associates. For A. C. Bhutcria & Co.

Chartered Accountants Chartered Accounts

(Firm Regn No. 002031N) (Firrn Regn. No, 3031050

(Jayant Raheja) (Mohit Shtrteria)

Parmer Partner

Membership Ho, 509487 Membership No, 56832

New Delhi Kolkata

14th August, 2010 16th August, 2010

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