Rama Pulp & Papers Ltd

Report of the Auditors to the Shareholders of M/s. Rama Pulp & Papers Ltd.

We have audited the Balance Sheet of M/s. Rama Pulp & Papers Ltd., as at 31 March2011, the Profit and Loss Account and also the Cash Flow statement for the year ended onthat date annexed there to. These financial statements are the responsibility of theCompany's management. Our responsibility is to express an opinion on these financialstatements based on our audit.

1. We conducted our audit in accordance with auditing standards generally accepted inIndia. Those Standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatements. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by the management as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.

2. As required by the Companies (Auditor's Report) Order, 2003 issued by the CompanyLaw Board in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in theAnnexure a statement on the matters specified in paragraph 4 and 5 of the said Order, tothe extent applicable to the Company.

3. Further to our comments in the Annexure referred to in para 2 above, we report that:

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

b) In our opinion, the Company has kept proper books of accounts as required by law asfar as it appears from our examination of those books; c) The Balance Sheet, Profit &Loss Account and Cash Flow statement are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow statementdealt by this report comply with the Accounting Standards referred to in section 211 (3C)of the Companies Act, 1956;

e) On the basis of written representations received from the directors of the companyand taken on record by the Board of Directors, we report that none of the directors aredisqualified as on 31st March, 2011 from being appointed as a Director U/s 274(1)(g) ofthe Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanationsgiven to us, the said accounts read together with the Notes appearing thereon, andattached thereto, give the information required by the Companies Act, 1956, in the mannerso required and give a true and fair view;

(i) In the case of Balance Sheet, of the state of affairs of the Company as at 31 March2011;

(ii) In the case of Profit and Loss Account, of the Profit of the company for the yearended on that date; and

(iii) In the case of the Cash Flow statement, of the Cash Flows for the year ended onthat date.

ANNEXURE TO THE AUDITORS' REPORT

ANNEXURE I IN TERMS OF PARA 2 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF M/s RAMAPULP & PAPERS LTD ON THE ACCOUNTS FOR THE YEAR ENDED ON 31 MARCH 2011.

1) (a) The Company has maintained proper records in respect of its fixed assets showingfull particulars including quantitative details and situation of fixed assets.

(b) As informed to us, the fixed assets have been physically verified by the managementduring the year at reasonable intervals and we are informed that no material discrepancieshave been noticed on such verification.

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

(d) None of the fixed assets were revalued during the year.

2) (a) The physical verification of goods, stores and spare parts have been conductedby the management during the year & in our opinion the frequency of verification wasreasonable. (b) Procedure of physical verification of stocks followed by the management isreasonable and adequate in relation to the size of the company and the nature of itsbusiness.

(c) The Company is maintaining proper records of inventory and no materialdiscrepancies have been noticed on physical verification of stock as compared to bookrecords.

3) The Company has neither granted nor taken any loans, secured or unsecured to andfrom companies, firms or other parties covered in the register maintained under Section301 of companies Act, 1956. Accordingly, the provision of other clauses of the order isnot applicable to the Company.

4) In our opinion and according to the information and explanation given to us, thereare adequate internal control procedures commensurate with the size of the company andnature of its business with regards to purchase of stores, raw material and componentsplant and machinery and other assets, and also for the sale of goods.

5) The company has not entered into any transaction that need to be entered into theregister maintained under section 301 of the Companies Act, 1956, accordingly, theprovision of clauses of the order are not applicable to the Company.

6) The Company has not accepted any public deposits during the year within the meaningof section 58A and section 58AA of the Companies Act, 1956 and the rules framed thereunder.

7) The company has an internal audit system commensurate with the size and nature ofits business.

8) The company has maintained the cost records as required under section 209(1) (d) ofthe Companies Act, 1956 that we have broadly reviewed. We have, however not made detailedexamination of this record.

9) According to the records of the company, the company is regular in depositingundisputed statutory dues including Provident Fund, Income Tax, Excise Duty, Sales Tax,ESIC dues with the appropriate authorities

10) The company has not incurred cash losses during the current financial year and inthe immediately preceding financial year.

11) The Company did not have any outstanding dues to any financial institutes, banks ordebenture holders during the year.

12) The company has granted loans and advances on the basis of security by way ofpledge of shares, debentures and other securities and in our opinion the security, termsand conditions on which they are given are not prejudicial to the interest of the company.

13) The Company is not a chit/nidhi/mutual benefit funds / society.

14) According to the information given to us, the company is not dealing in or tradingin Shares, Securities, Debentures or other investment.

15) According to the information and explanations given to us, the Company has notgiven any guarantee for loans taken by its wholly owned subsidiary Company from a bank.

16) The Company has raised term loan during the year and the term loan raised duringthe year have been applied for the purpose for which they were raised.

17) According to the information and explanations given to us and an overallexamination of the Balance Sheet of the Company and the Fund Flow based on the AuditedAccounts, we report that no funds raised on short-term basis have been used for long-terminvestment. No long-term funds have been used to finance short-term assets exceptpermanent working capital.

18) The Company has not made any preferential allotment of shares to parties andcompanies covered in the register maintained under section 301 of the Companies Act, 1956.

19) The company has not issued any debentures during the year.

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

21) According to the information and explanations given to us, no fraud on or by theCompany has been noticed or reported during the course of our audit.