Shree Rajeshwaranand Paper Mills Ltd Directors Report.

To,

The Members of

Shree Rajeshwaranand Paper Mills Limited.

Report on the audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of SHREE RAJESHWARANAND PAPER MILLS LIMITED (‘the Company), of, which comprise the Balance Sheet as at March 31, 2020 and the Statement of Profit and Loss (Including other comprehensive income), the statement of Cash flows and the Statement of changes in equity for the year then ended, and notes to standalone financial statements, including a summary of the significant accounting policies and other Explanatory information (herein after referred to as "standalone financial statements")

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March, 2020, including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing ("SA"s) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the "Auditors Responsibilities for the Audit of the Financial Results" 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 financial results under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs 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.

Material Uncertainty Related to Going Concern

We draw your attention to Note 41 in the financial statements, regarding preparation of financial statements on Going Concern for the reasons stated therein. The Company has a incurred a net loss after tax of Rs. 14,42,85,871/- during the year ended March 31, 2020 and as of that date, the Companys current liabilities exceeded its total assets by 10,84,36,298/-. These events or conditions, among others as more fully explained in Note 42, indicate that a material uncertainty exists that may cast significant doubt on the Companys ability to continue as a going concern. As stated in Note 42, the appropriateness of assumption of going concern is dependent upon realization of the various initiatives undertaken by the company. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters (‘KAM) are those matters that, in our professional judgment, 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.

Key Audit Matter How the matter was addressed in our audit
Revenue Recognition Our audit procedures included :
Revenue from sale of goods is recognized when control of the products being sold is transferred to the customer and when there are no longer any unqualified obligations. The performance obligations in the contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on customer terms. • We assessed the appropriateness of the revenue recognition accounting policies, including those relating to rebates and discounts by comparing with applicable accounting standards
Revenue if one of the key profit drivers and is therefore susceptible to misstatement. Cut-off is the key assertion in so far as revenue recognition is concerned, since an inappropriate cut-off can result in material misstatement of results for the year. • We performed substantive testing by selecting samples of revenue transactions recorded during the year by verifying the underlying documents, which included goods dispatch notes and shipping documents
Revenue is measured at fair value of the consideration received or receivable, after the deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the government such as goods and services tax, etc. • We performed cut-off testing for samples of revenue transactions recorded before and after the financial year end date by comparing with relevant underlying documentation, which included goods dispatch notes and shipping documents, to assess whether the revenue was recognized in the correct period.
Accumulated experience is used to estimate the provisions for discounts and rebates. Revenue is only recognized to the extent that it is highly probable a significant reversal will not occur • We tested the design, implementation and operating effectiveness of controls over the calculations of discounts and rebates
• We assessed manual journals posted to revenue to identify unusual items.
Provision for taxation and other significant provisions Our audit procedures included :
Accrual for tax and other contingencies requires the management to make judgements and estimates in relation to the issues and exposures arising from a range of matters relating to direct tax, indirect tax, transfer pricing arrangements, claims and other eventualities arising in the regular course of business The key judgements lies in the estimations of the provisions where they may differ from the future obligations. By nature, provision is difficult to estimate and includes many variables. • We tested the effectiveness of controls around the recognition of provisions - We used our subject matter experts to assess the value of material provisions in light of the nature of the exposures, applicable regulations and related correspondence with the authorities.
• We challenged the assumptions and critical judgements made by the management which impact their estimate of the provisions required, considering judgments previously made by the authorities in the relevant jurisdictions or any relevant opinions given by the Companys advisors and assessing whether there was an indication of management bias.
• We discussed the status in respect of significant provisions with the Companys internal tax team and consultant as well.
• We performed retrospective review of management judgements relating to accounting estimate included in the financial statement of prior year and compared with the outcome.

Information other than the standalone financial statements and auditors report thereon

The Companys board of directors is responsible for the preparation of the other information. The other information comprises the information included in the Companys 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 during the course of our 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 regards.

Managements Responsibility for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provision 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 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 financial results, Board of Directors are 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 Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Companys financial reporting process.

Auditors responsibilities for the audit of the standalone financial statements

Our objectives are to obtain reasonable assurance about whether the standalone 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 standalone 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 but not for the purpose of expressing an opinion on the effectiveness of the companys internal control

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Board of Directors.

- Conclude on the appropriateness of Board of Directors 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 the financial results 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 standalone 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.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone 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.

Report on Other Legal and Regulatory Requirements

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

a. We have sought & 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 the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the relevant books of account.

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

e. On the basis of the written representations received from the directors as on March 31, 2020, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2020, from being appointed as a director in terms of Section 164(2) of the Act

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in ‘Annexure B. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting.

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 standalone financial statements. - Refer Note 31 to the standalone financial statements;

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

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

2. As required by the Companies (Auditors Report) Order, 2016 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

3. 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.

Other Matters

Due to complete lockdown, imposed by the government, to restrict the spread of COVID 19, the audit finalisation process, for the year under report, was carried out from remote locations i.e. other than the office of the Company, based on the data/details made available and based on financial information/ records remitted by the management through digital medium. Our report is not modified in respect of this matter.

For RAK CHAMPS & CO LLP.
Chartered Accountants
(Firm Registration No. 131094W)
Place : Mumbai Ramanatha Shetty
Date : 31/07/2020 Partner
Membership No. 218600
UDIN: 20218600AAAABV9591

ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT

The Annexure referred to in Independent Auditors Report to the members of M/s. SHREE RAJESHWARANAND PAPER MILLS LIMITED. (‘The Company) on the Standalone Financial Statements for the year ended 31st March 2020, we report that:

(i) (a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

(b) The company has a regular program of physical verification of its fixed assets by which all fixed assets are verified in a phased manner, designed to cover all the fixed assets over a period of three years. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies were noticed on such physical verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the company and nature of its assets.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of the immovable properties are held in the name of the company.

(ii) As informed to us, the inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification as compared to the book records.

(iii) According to the information and explanation 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 189 of the Act. Consequently, requirement of clauses (iii a) to (iii c) of paragraph 3 of the order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, compliances with the provisions of section 185 and 186 of the Companies Act 2013 is not applicable to the company since it has not given any loans, made any investments and given any guarantees.

(v) During the year under consideration, the company has not accepted any deposits from the public in accordance with the provisions of section 73 to 76 of the Act and the rules framed there under.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the notification of the Central Government for maintenance of cost record under section 148(1) of the Companies Act, 2013 and on the basis of such review, we are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, carried out a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) In our opinion and according to the information and explanation given to us in respect of statutory and other dues:

(a) The Company has been regular in depositing undisputed statutory dues, including Provident fund, GST, Custom Duty, Cess and any other material statutory dues as applicable to it except Income Tax, TDS. According to the information and explanation given to us, no undisputed amounts payable in respect of outstanding statutory dues were in arrears as at 31st March, 2020 for a period of more than six months from the date they became payable except Income Tax, TDS.

(b) According to the information and explanations given to us and the records of the company examined by us, the disputed dues in respect of Sales Tax are as under:

Nature of Dues Amount Period to which amount relates Forum where dispute is pending
Sales Tax 51,22,242/- F.Y. 2005-2006 GVAT Tribunal, Ahmedabad

(viii) In our opinion and according to the information and explanations given to us, Company has no loans or borrowings payable to government.

The Company has defaulted in repayment of loans/borrowings to the following banks and financial institutions:

Name of the Bank / Financial Institution Component Amount Period of Default Other Comments
BOI TERM (TL - I) Installment 1,22,40,000 Nov 19 to Mar 20 Loan was restructured by BOI with letter dated 29.08.2019.
BOI TERM (TL - I) Interest 28,43,008 Oct 19 to Mar 20 However the company has defaulted in repayment of restructured installments and interest thereon.
BOI TERM (TL - II) Installment 83,35,000 Nov 19 to Mar 20 Moratorium not applied *
BOI TERM (TL - II) Interest 20,38,786 Oct 19 to Mar 20 Moratorium not applied *
BOI TERM (TL - III) Installment 8,09,940 July 19 and March 20 Moratorium not applied *
BOI TERM (TL - III) Interest 26,33,181 July 19 to Mar 20 Moratorium not applied *
BOI TERM (TL - IV) Installment 27,84,775 Sept 19 to Mar 20 Moratorium not applied *
BOI TERM (TL - IV) Interest 18,23,393 Aug 19 to Mar 20 Moratorium not applied *
BOI Working Capital Overdrawn Amount 39,29,279 As on 31/03/2020 Moratorium not applied*
BOI Working Capital Interest 9,39,521 Feb 20 to Mar 20
IDFC FIRST BANK LTD Installment 66,856 Mar 20
IDFC FIRST BANK LTD Interest 32,658 Mar 20
Zen Lefin Pvt. Ltd Installment 32,444 Mar 20
Zen Lefin Pvt. Ltd Interest 3,463 Mar 20
IFMR Capital Finance Pvt. Ltd Installment 1,29,779 Mar 20
IFMR Capital Finance Pvt. Ltd Interest 13,850 Mar 20
Magma Fincorp Ltd Installment 1,57,345 Mar 20
Magma Fincorp Ltd Interest 15,783 Mar 20
Capital First Ltd Installment 1,32,903 Mar 20
Capital First Ltd Interest 14,599 Mar 20
Tata Capital Financial Services Ltd Installment 1,76,268 Mar 20
Tata Capital Financial Services Ltd Interest 37,648 Mar 20
Capfloat Financial Services Pvt. Ltd Installment 1,14,993 Mar 20
Name of the Bank / Financial Institution Component Amount Period of Default Other Comments
Capfloat Financial Services Pvt. Ltd Interest 50,815 Mar 20
Bajaj Finance Ltd Installment 59,430 Mar 20 Moratorium granted suo moto
Bajaj Finance Ltd Interest 29,032 Mar 20
ECL Finance Ltd Installment 1,22,989 Mar 20 Moratorium applied and granted *
ECL Finance Ltd Interest 58,139 Mar 20
MAGMA FINCORP LTD Installment 1,27,072 Mar 20 Moratorium applied
MAGMA FINCORP LTD Interest 29,449 Mar 20

* The above details have been compiled by us based on the documents made available. However the confirmation related to the above figures have not been made available to us during the course of the audit.

* Entity was declared NPA by Bank of India through letter vide reference no "VDR:ADV:SARF:2019-20:05" dt. 05/02/2020. For other Secured and Unsecured loans from Bank and Financial Institutions, Entity claims to take benefit of the debt repayment moratorium announced by the RBI vide N/N "DOR.No.BP.BC.47/21.04.048/2019-20" dt. 27th March, 2020. As a consequence, term loan installments of some banks and financial institutions for the month of March 2020 are not paid. Application for Debt repayment moratorium was done only to HDFC Bank, Bajaj Finance and ECL Finance. The entity has still not produced any documentary evidence w.r.t application for moratorium to other banks and financial institutions.

(ix) In our opinion and according to the information and explanations given to us, on an overall basis the term loans have been applied for the purpose for which they were raised. The company has not raised any money by initial public offer or further public offer.

(x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(xi) According to the information and explanations given to us, the Company has paid managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V of the Companies Act, 2013.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) In our opinion and according to the information given to us all transactions with related parties are in compliance with sections 177 and 188 of the Companies Act where applicable and the details of such transactions have been disclosed in the Standalone Financial Statements as required by the applicable accounting standards.

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.

(xv) To the best of our knowledge and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with the directors or the persons connected to him. Accordingly paragraph 3(xv) of the Order is not applicable.

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

For RAK CHAMPS & CO LLP.
Chartered Accountants
(Firm Registration No. 131094W)
Place : Mumbai Ramanatha Shetty
Date : 31/07/2020 Partner
Membership No. 218600
UDIN: 20218600AAAABV9591

ANNEXURE B TO THE 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)

We have audited the internal financial controls over financial reporting of SHREE RAJESHWARANAND PAPER MILLS LIMITED ("the Company") as of 31 March 2020 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

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 31st March 2020, 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.

Managements Responsibility for Internal Financial Controls

The Board of Directors of the Company 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 (‘ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the 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 financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the ‘Guidance Note) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting were 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 judgment, including the assessment of the risks of material misstatement of the standalone 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 of the Company.

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 standalone 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 reflectthe transactions and dispositions of the assets of the Company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Companys assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

For RAK CHAMPS & CO LLP.
Chartered Accountants
(Firm Registration No. 131094W)
Place : Mumbai Ramanatha Shetty
Date : 31/07/2020 Partner
Membership No. 218600
UDIN: 20218600AAAABV9591