Auditor Report of Cella Space Ltd.

Mar 31, 2023

Cella Space Limited, Kochi

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying financial statements of M/s. Cella Space Limited Kochi,

(CIN: L93000KL1991PLC006207) ("the company”) which comprises of:-

a. The Balance Sheet as at 31^st March, 2023

b. The Statement of Profit and Loss (Including other comprehensive income) for the year ended 31^st March 2023

c. Statement of Changes in Equity for the year ended 31^st March 2023

d. Cash Flow Statement for the year ended 31^st March 2023, and

e. A Summary of significant accounting policies and other explanatory information.

f. 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 Companies Act, 2013(‘the Act’) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended, (‘the Ind AS’) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023; and its profit, total comprehensive income, the changes in equity and its cash flows for the year ended 31^st March 2023

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the Standalone Financial Results for the quarter and year ended March 31, 2023 under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key Audit Matters are those matters that, in our professional judgement, were of most /significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The Key Audit Matters	How our audit addressed the key audit matter
Recoverability of receivable and advances
As at March 31, 2023, the position of assets included • Trade receivables (Note 8A ): Rs.727.51 lakhs • Security Deposits (Note 6B):Rs.63.11 lakhs • Other Non-Current Assets (Note 7) Rs.108.60 lakhs • Security Deposits (EMD) (Note 8C) : Rs.27.60 lakhs Out of the above, considerable amount of the balances were long outstanding and hence sufficient provisions were provided in the books of account on ascertaining the recoverability and realisability of such receivables and advances.	Our audit procedures included - • Detailed analysis of the long outstanding receivables and advances; • Obtaining management analysis on the realisability of such assets; • Obtaining confirmation of balances for major balances outstanding; Evaluating the adequacy of provision made by the management for doubtful assets included therein.

Other information

The Company’s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company’s annual report, but does not include the standalone financial statements and our auditors’ report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management’s Responsibility for the Financial Statements

The Company''s management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit / loss (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India and the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with respect to the standalone financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor’s Report) Order, 2020 ("The Order”) issued by the Central Government of India in terms of sub-section 11 of section 143 of the Act, we give a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable attached as Annexure A.

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

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

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

c) The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other comprehensive income), the Standalone Statement of changes in equity and the standalone statement of Cash Flow dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under section 133 of the Act.

e) On the basis of written representations received from the directors and taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2023 from being appointed as a director in terms of sub-section (2) of section 164 of the Companies Act, 2013.

f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B”. ”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the company’s internal financial controls over financial reporting.

g) With respect to the matter to be included in the Auditors’ Report under section 197(16) of the Act, in our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of section 197 of the Act. The remuneration paid to any director is not in excess of the limits laid down under section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under section 197(16) of the Act which are required to be commented upon by us.

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

(a) The Company has disclosed the impact of pending litigations, if any as at 31^st March 2023 on its financial position in its financial statements.

(b) The Company does not have any long term contracts including derivative contracts and hence no provision on account of material foreseeable losses is required.

(c) There has been a delay in transferring the shares, required to be transferred, to the Investor Education and Protection Fund by the Company.

(d) Omitted w. e. f 1^st April 2021.

(e) (i) The Management has represented that, to the best of it’s knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (‘Ultimate Beneficiaries’) or provide any guarantee, security or the like on behalf of the ultimate Beneficiaries;

(ii) The Management has represented, that, to the best of it’s knowledge and belief, no funds have been received by the company from any person(s) or entity(ies), including foreign entities (‘Funding Parties’), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (‘Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(iii) Based on such audit procedures that the auditor has considered reasonable and appropriate in the circumstances, nothing has come to their notice that has caused them to believe that the representations under sub-clause (i) arid (ii) contain any material mis-statement.

(f) No dividend was declared or paid during the year which required compliance with section 123 of the Companies Act, 2013.

Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of Account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023

For KPR & Co Chartered Accountants FRN:- 05326S Sd /-

Deepa Praveen , FCA

Place:- Kochi Partner (M.No.232410)

Date:- 19.05.2023 UDIN : 23232410BGYWQR5953

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Mar 31, 2015

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

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

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

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

Management's Responsibility for the Financial Statements

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

Auditor's Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company's Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

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

Report on other legal and regulatory requirements

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

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

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

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

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

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

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

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

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

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

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

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

Referred to in paragraph 3 of our report of even date:

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

(b) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Period to

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

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

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

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

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

For Balan and Co

Chartered Accountants

FRN:000340S

Sd/-

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

30.05.'15 Partner (Memb No. 20627)

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Mar 31, 2014

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

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

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

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

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

Management''s responsibility for the financial statements

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

Auditor''s Responsibility

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

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

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

Opinion

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

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

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

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

Report on other legal and regulatory requirements

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

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

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

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

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

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

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

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

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

Referred to in paragraph 3 of our report of even date:

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

(b) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

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

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

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

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

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

(b) The company has taken an unsecured loan of Rs 1.5 Crore from Sree Sakthi Constructions & Infrastructure Ltd, Chennai. and Rs 1.35 Crore from Sree Kailas Logistics Ltd the terms and conditions of which are not prejudicial to the interest of the Company. Other than the above, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act,1956.

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

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

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

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

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

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

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

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

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

1 Income tax Act Income Tax 26.93

2 Income tax Act Income Tax 66.74

3 Income tax Act Income Tax 46.77

4 Income tax Act Income Tax 11.63

5 Central Sales Tax Act Central Sales tax 15.48

6 Central Sales Tax Act Central Sales tax 0.03

7 Central Sales Tax Act Central Sales tax 0.15

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(xix) The Company has not issued any debentures.

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

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

For Balan and Co Chartered Accountants FRN:000340S

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

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Mar 31, 2013

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

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

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

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

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

Management''s responsibility for the financial statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the Accounting standards referred to in sub-section (3c) of the section 211 of the companies act, 1956 This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s responsibility

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

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

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

Opinion

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

(a) In the case of the Balance sheet of the state of affairs of the company as at March 31.2013

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

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

Report on other legal and regularity requirements

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

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

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

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

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

(d) In our opinion, the balance sheet, statement of profit and loss, cash flow statement comply with the accounting standards referred to in subsection (3C) of the section 211 of the companies Act, 1956

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

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

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

Referred to in paragraph 3 of our report of even date:

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

(b) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

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

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

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

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

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

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

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

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

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

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

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

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

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

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



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

1 Income tax Act Income Tax 26.93

2 Income tax Act Income Tax 66.74

3 Income tax Act Income Tax 46.77

4 Income tax Act Income Tax 11.63

5 Central Sales Tax Act Central Sales tax 15.48



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

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

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

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

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

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



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

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

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

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

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

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

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

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

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

(xix) The Company has not issued any debentures

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

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



For Balan & Co.

Chartered Accountants

Sd/-

A. Mohanan B.Sc., FCA, DISA

Partner (M. No. 20627)

FRN: 000340S

Kochi - 11 30.05.2013

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s. Sree Sakthi Paper Mills Limited, Kochi-16, as at 31st March, 2012 and also Statement of Profit and Loss and Cash Flow Statement of the Company for the year ended on that date annexed there to. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) Amendment Order, 2004 issued by the Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure, a statement on the matters specified in paragraph 4 and 5 of the said order.

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

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

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

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

d. The Balance Sheet, Statement of Profit and Loss and Cash Flow statement dealt with by this report comply with the accounting standards referred to in sub section (3C) of section 211 of the Companies Act, 1956.

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

f. In our opinion and to the best of our information and according to the explanations given to us, they said accounts read together with the Significant Accounting Policies and the notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

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

Referred to in paragraph 3 of our report of even date

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

(b) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(xix) The Company has not issued any debentures.

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

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

For BALAN & CO.

CHARTERED ACCOUNTANTS

Sd/-

A. MOHANAN FCA, DISA

PARTNER (M. No. 20627)

FRN: 000340S

Kochi - 11

26.05.2012

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of M/s. Sree Sakthi Paper Mills Limited, Kochi-16, as at 31st March, 201 I and also Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date annexed there to. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) Amendment Order, 2004 issued by the Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure, a statement on the matters specified in paragraph # 4 and 5 of the said order.

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

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

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

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

d. The Balance Sheet, Profit and Loss account and Cash Flow statement dealt with by this report comply with the accounting standards referred to in sub section (3C) of section 211 of the Companies Act, 1956.

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

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and the notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Referred to in paragraph 3 of our report of even date

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

(b) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(xix) The Company has not issued any debentures.

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

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

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

Kochi - 11 30.05.2011

---

Mar 31, 2010

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

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

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) Amendment Order, 2004 issued by the Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure, a statement on the matters specified in paragraph # 4 and 5 of the said order.

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

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

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

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

d. The Balance Sheet, Profit and Loss account and Cash Flow statement dealt with by this report comply with the accounting standards referred to in sub section (3C) of section 21 I of the Com- panies Act, 1956.

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

f. In our opinion and to the best of our informa- tion and according to the explanations given to us, the said accounts read together with the Sig- nificant Accounting Policies and the notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Ref. M/s. Sree Sakthi Paper Mills Limited, Kochi -16 (2009-10) Referred to in paragraph 3 of our report of even date

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

(b) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such veri- fication.

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

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

(b) The procedures of physical verification of inven- tories followed by the management are reason- able and adequate in relation to the size of the company and the nature of its business.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(xix) The Company has not issued any debentures.

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

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

For BALAN & CO.

Chartered Accountants

Sd/-

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

29.05.2010 PARTNER (M.No.20627)