Chadha Papers Ltd Directors Report.

To the Members of Chadha Papers Limited

Report on the Audit of the Standalone Financial Statements

Opinion

1. We have audited the standalone IND AS financial statements of Chadha Papers Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2019, the Statement of Profit and Loss (including other comprehensive income) , Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements").

2. In our opinion arid to the best of our information and according to the explanations given to us, the aforesaid standalone IND AS 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 accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019, and profit/loss, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the IND AS 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 together with die ethical requirements that are relevant to our audit of the IND AS financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit matters

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

5. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matter:

Key Audit matters

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

5. We have determined the matters described below to be the key audit matters to be communicated in our report.

1. Trade receivables:

The company has trade receivables of Rs 32,02,90,931 as at 31st March, 2019. Refer Note No 11 in the Financial Statements. The company has sent letters seeking balance confirmation certificates from most material trade receivables during the financial year. Since most of the companys principal customers are individual entities, firms & private limited companies, written balance confirmations are not received. We had informed the management that the identification of doubtfulness, if any, in Trade Receivables is subjective and therefore the period ofGood receivables in some cases extends. The management needs to put more objective criteria & tighter norms for the determination of the recoverability. We draw the attention to Note 2(k)(iii) second para, regarding the companys Accounting Policy on impairment of trade receivables.

The company has trade receivables of Rs 32,02,90,931 as at 31st March, 2019. Refer Note No 11 in the Financial Statements. The company has sent letters seeking balance confirmation certificates from most material trade receivables during the financial year. Since most of the companys principal customers are individual entities, firms & private limited companies, written balance confirmations are not received. We had informed the management that the identification of doubtfulness, if any, in Trade Receivables is subjective and therefore the period ofGood receivables in some cases extends. The management needs to put more objective criteria & tighter norms for the determination of the recoverability. We draw the attention to Note 2(k)(iii) second para, regarding the companys Accounting Policy on impairment of trade receivables.

Response to Key Audit Matter: Audit procedures carried out by auditors: We checked all significant trade receivable accounts for their past history of payments & obtain reasons for the pending cases. We also verified on test basis, the evidence of receipt of material or services by the customers.

Although the companys management & officers are making reasonable efforts to obtain information, given the nature of the customers, their practices & the manner in which they release payments, the delay in settlement of trade receivables in few cases is inevitable. Further, retention of receivables in certain cases on some pretext is fairly common. We consider that insisting on the company to make a provision for bad / doubtful debts just because of this. Hence, we consider that the time period of up to three years from bill date to finally determine recoverability is fair & reasonable.

The above mentioned factors have been appropriately considered by us and based on the work performed and the evidence obtained we consider the accounting treatment is appropriate.

The above mentioned factors have been appropriately considered by us and based on the work performed and the evidence obtained we consider the accounting treatment is appropriate.

2. Property Plant and equipment a net intangible assets

There are areas where management judgements impacts the carrying value of property, plant and equipment, intangible assets and their respective depreciation and amortization amounts. These include the decision to capitalize or expense costs; the annual asset life review: the timelines of the capitalization of assets and the use of management assumptions and estimates for the determination of the measurement and recognition criteria for assets retired from active use. Due to the materiality in the context of the balance sheet of the company and the level of judgements and estimates required, we consider this to be a key audit matter.

Response to Key Audit Matter: We assessed the controls In place, evaluated the appropriateness of capitalisation process, performed tests of details on costs capitalized, the timeliness of the capitalization of assets and the de recognition criteria for assets retired from active use.

In performing these procedures, we reviewed the judgements made by management including the nature of underlying costs capitalized; determination of realisable value of the assets retired from active use; the appropriateness of asset live applied in the calculation of depreciation; useful lives of assets as per the technical assessment of the management and external technical experts. We have observed that there are no material changes.

3. Capital work in progress:

The plant is in the process of executing various projects like installation and expansion of mills, facilities etc. Since these projects take a substantial period of time to get ready for intended use. Due to the materiality in the context of the balance sheet of Plant and the level of judgements and estimates required, we consider this to be a key audit matter.

Response to Key Audit Matter: We performed an understanding and evaluation of system of-internal control over the capital work in progress, with reference to identification and testing of key controls.

We assessed the progress of the projects and the intention of the management to carry forward and bring the asset to its state of intended use.

Information other than the Financial Statements and Auditors Report thereon

6. The Companys Board of Directors is responsible for the other information, The other information comprises the information included in the Annual Report, but does not include the financial statements and our auditors report thereon. Our opinion on the 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 financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the 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.

Responsibilities of Management and Those Charged with Governance for the Standalone IND AS financial statements

7. The Companys Management and 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 standalone IND AS financial statements that give a true and fair view of the financial position, financial performance, (changes in equity) 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. 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 IND AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

8. In preparing the financial statements, management is responsible for assessing the Companys 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.

9. Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the IND AS financial statements

10. Our objectives are to obtain reasonable assurance about whether the IND AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors 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.

Paragraph 40(b) of this SA explains that the shaded material below can be located in an Appendix to the auditors report. Paragraph 40(c) explains that when law, regulation or national auditing standards expressly permit, reference can be made to a website of an appropriate authority that contains the description of the auditors responsibilities, rather than including this material in the auditors report, provided that the description on the website addresses, and is not inconsistent with, the description of the auditors responsibilities below.

11. 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 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 Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system 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 managements 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 Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in che IND AS 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 auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

12. 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.

13. 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.

14. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the IND AS financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

The company has sold their investment to Adie broswon corporation Private Limited against which company received an advance. However, the shares cant be transferred in view of the agreement with The president of India, acting through the Secretary and Commissioner, Department of Transport, Government of National Capital Territory of Delhi.

The Company is required to identify its suppliers which are registered under MSMEs Act so as to comply with the provisions of the said Act applicable to it.

Report on Other Legal and Regulatory Requirements

15. As required by Section 197(16) of the Act, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under Section 197 read with Schedule V to the Act.

16. As required by the Companies (Auditors Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure "A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

17. 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 standalone financial statements dealt with by this report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone IND AS 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 3.1st March, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2019 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as on 31 March 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report as per Annexure B expressed an unmodified opinion.

(g) With respect to the other matters to be included in the Auditors 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 IND AS standalone financial statements.

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

iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2019.

iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from 8 November 2016 to 30 December 2016, which are not relevant to these standalone financial statements. Hence, reporting under this clause is not applicable.

For M/s Khandeiia & Sharma

Chartered Accountants

FRN : 510525C

Arun Khandeiia

Partner

Membership No. 089125

Place: New Delhi

Date: 22.07.2019

"Annexlire A" to Independent Auditors Report

The Annexure referred to in Independent Auditors Report to the members of Chadha Papers Limited on the financial statements for the year ended March 31, 2019, we report that:

i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) All fixed assets of the Company have not been physically verified by the Management during the year. We have informed that the company is in the process of implementing the programme of periodical verification of the fixed assets immediately after completion of the records.
(c) According to the information & explanations given to us and on the basis of our examination of the records of the company, the title deeds of immovable properties are held in the name of the company.
ii. (a) As per the information furnished, the inventories have been physically verified during the year by the management at reasonable intervals.
(b) According to the information and explanations given to us, 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. In our opinion, discrepancies noticed on physical verification of inventories were not material in relation to the operations of the Company and the same have been properly dealt with in books of account.
iii. (a) The Company has not granted interest free loans/advances to parties covered in the register maintained under Section 189 of the Act during the year. The existing loan of Rs. 10.10 lac granted to its subsidiary is outstanding.
(b) In our opinion and according to information and explanation given to us, the terms and conditions of interest free loans given to the parties covered in the register maintained under Section 189 of the Act are not prima facie prejudicial to the interest of the Company.
(c) As per our information and explanation given to us, Loans given to said party is repayable on demand.
(d) There is no overdue amount of loan granted to Companies, firm or other parties listed in the register maintained under section 189 of the Companies Act, 2013.
iv. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 185 of the Companies Act, 2013 in respect of loans, investments, guarantees, and security.
v. The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.
vi. The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of such records with a view to determine whether they are accurate or complete.
vii. (a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been generally regular in depositing undisputed statutory dues including provident fund, employees state insurance, income-tax, sales tax, service tax, duty of customs, duty of excise, value added tax, GST, cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2019 for a period of more than six months from the date when they became payable.
(b) According to the information and explanations given to us and records of the company examined by us, the particulars of dues of central excise, service tax, sales tax, entry tax etc which have not been deposited on account of any dispute are as follows:

Detail of Disputed Statutory Dues as on 31.03.2019

S.No. Name of Tax Original Amount. Interest/ Penalty (If any) Paid under Protest
1 UP Trade Tax (3B Form) 3,40,000 - 1,36,000
2 Appeal Pending Up, Tax Disputed Case A/y 2009-10 19,011.33 - -
3 Appeal Pending Up, Tax Disputed Case A/y 2010-11 19,096 - -
4 Appeal Pending Up, Tax Disputed Case A/y 2011-12 2,76,750 - -

(c) The Sales Tax Department has raised the following demands during the financial year 2017-18 against the company for which the company has filed appeals:

A.Y. 2009-10 and 2010-11 Demand Amount Stay Granted In Appeal Tax Deposited
UP VAT/CST/Entry Tax (2009-10) 2,631,468 1,973,601 1,000,000
UP VAT/CST/Entry Tax (2010-11) 1,775,956 1,327,483 500,000
Assessment Year 2014-15 (Assessment Order Date: 08.09.2017) Demand Amount Bond Submitted Tax Deposited Under Protest
UP VAT 770,093 693,084 77,009
CST 506,719 456,047 50,672

viii 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.

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

x. Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the company by its officers or employees has been noticed or reported during the year.

xi. Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act;

xii. In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 4 (xii) of the Order are not applicable to the Company.

xiii. in our opinion, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the financial statements as required by the applicable Indian accounting standards.

xiv. According to the information & explanation 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. Based upon the audit procedures performed and the information and explanations given by the management, the company has not entered into any non-cash transactions with any director or persons connected with him. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company.

xvi. In our opinion, the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company.

For M/s Khandelia & Sharma
Chartered Accountants
FRM : 510525C
Arun Khandelia
Place: New Delhi Partner
Date: 22.07.2019 Membership No. 089125

"Annexure B" to Independent Auditors Report

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

Referred to in Paragraph 2(f) under the heading "Report on Other Legal & Regulatory Requirement" of our report of even date to the financial statements of the Company for the year ended March 31,2019:

We have audited the internal financial controls over financial reporting of M/S Chad ha Papers Limited ("the Company") as of March 31, 2019 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys 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 CICAI*). 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 companys 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 finandal information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit or Interna! 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 auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls Over Financial Reporting

A companys 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 companys 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised 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, materia! 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.

Emphasis on Matter

Long-term outstanding Balances in some of the personal and impersonal accounts are subject to confirmation and recondliation.

The company should implement the programme of periodical verification of the fixed assets.

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, 2019, based on the internal control over finantial 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 M/s. Khandelia & Sharma
FRN: 510525C
Chartered Accountants
(Arun Khandelia)
Place: New Delhi Partner
Date: 22.07.2019 M. No.: AAAFK6345G