Paper Mill Plant & Mach. Mfr. Ltd Auditors Report.

AUDITOR

To,

The Members of

PAPER MILL PLANT & MACHINERY MANUFACTURERS LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of Paper Mill Plant & Machinery Manufacturers Limited., which comprise the Balance Sheet as at March 31, 2014 and the Statement of Profit and Loss for the year then ended, and a summary of significant accounting policies and other explanatory information.

Managements 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 of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular No. 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgement, 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 Companys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2003 as amended by Companies (Auditors Report) (Amendment) Order, 2004 (together the Order), issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

c. the Balance Sheet and Statement of Profit and Loss dealt with by this Report are in agreement with the books of account;

d. in our opinion, the Balance Sheet and Statement of Profit and Loss comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act read with the General Circular No. 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013;

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

For SUDIT K. PAREKH & CO.

Chartered Accountants

Firm Registration No. 110512W

(D. S. KHATRI)

Partner

Membership No. 16316

Mumbai.

Dated : 02-09-2014

ANNEXURE TO THE AUDITORS REPORT

Re: PAPER MILL PLANT & MACHINERY MANUFACTURES LIMITED

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

1) Fixed Assets:

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

b) The fixed assets have been physically verified during the year by the management. In our opinion, the frequency of the verification is reasonable having regards to the size of the company and the nature of its assets. According to information and explanations given to us, no material discrepancies were noticed on such verification.

c) The company has not disposed off any of its fixed assets during the year.

2) Inventories:

According to the information and explanation given to us, the Company does not hold any Inventories. Accordingly, sub -clause (ii) (a), (b) and (c) of the Order is not applicable to the company.

3) With respect to the transactions entered into with the parties covered in the register maintained under section 301 of the Act;

a) According the information and explanations given to us, the Company has not granted any loans secured or unsecured to Companies, firms or other parties covered in the Register maintained under section 301 of the Act. Accordingly sub clauses (b), (c) and (d) of clause (iii) are not applicable to the Company.

b) The Company has taken unsecured loan from Parties covered in the register maintained under section 301 of the Companies Act, 1956:

Number of Parties Maximum Amount outstanding at any time during the year Balance as at 31st March 2014
3 2,43,11,324 2,43,11,324

(c) According to information and explanation given to us, the rate of interest and other terms and conditions of loan taken by the Company are prima facie not prejudicial to the interest of the Company.

(d) During the year principal amount for loans are not due for payment. The said loans are interest free.

4) According to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business, for purchase of fixed assets. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

5) In respect of transactions that need to be entered into the register maintained under section 301 of the Act.

i) To the best of our knowledge and belief and according to the information and explanations provided to us, particulars of the contract or arrangement that need to be entered into the register maintained under section 301 of the Act. have been so entered.

ii) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered into the registers maintained under Section 301 and exceeding the value of rupees five lakhs, in respect of any party during the year have been made at prices which are prima facie reasonable having regard to prevailing market prices at the relevant time.

6) According to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of provisions of sections 58A and 58AA of the Act. and other relevant provisions of the Act. and the Companies (Acceptance of Deposit) Rules, 1975 there under.

7) The Company has an effective Internal audit report pending system commensurate with its size and the nature of its business.

8) We are informed that the Central Government has not prescribed the maintenance of the cost records under section 209(1) (d) of the Act. for any of the Companys products and hence clause (viii) of the Order is not applicable to the Company.

9) Statutory Dues:

a) The company is generally regular in depositing with appropriate authorities undisputed statutory dues in respect of , Income Tax, cess and other statutory dues as applicable to it. According to the information and explanations given to us, there are no undisputed statutory dues as at the 31st March 2014 which are outstanding for a period of more than six months from the date they became payable.

b) According to information and explanations given to us, there are no disputed dues of Income Tax, cess and other statutory dues as applicable to the company which have not been deposited on account of any dispute.

10) The Companys accumulated losses at the end of the financial year covered under this audit report exceeds fifty per cent of its net worth. It has incurred cash losses during the current financial year and in immediately preceding financial year.

11) In our opinion and according to information and explanations given to us, the company does not have any dues to banks and financial institutions or debenture holders.

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

13) According to the information and explanations given to us, the provisions of nidhi or mutual benefit fund or society are not applicable to the Company.

14) According to the records of the Company and according to the information and explanations given to us, the Company does not deal or trade in shares, securities, debentures and other investments.

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

16) According to the information and explanations given to us, the company has not taken any term loan.

17) According to the fund flow statement and other records examined by us, and the information and explanations given to us, on an overall basis, the Company has not utilised any funds raised on short-term basis for long-term investments.

18) According to the information and explanation given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

19) The Company has not issued any debentures during the year. It does not have any debentures outstanding during the year. Hence sub-clause (xix) is not applicable to the Company.

20) Since the Company has not raised any money by public issue, the sub-clause (xx) of the Order is not applicable to the Company.

21) Based on the audit procedures performed and information and explanations provided to us, no fraud on or by the company has been noticed or reported during the year.

For SUDIT K. PAREKH & CO.

Chartered Accountants

Firm Registration No:-110512W

(D. S. KHATRI)

Partner

M. No: 16316

Mumbai

Dated : 02.09.2014