Coral Newsprints Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2024

We have audited the accompanying standalone financial statements of Coral Newsprints Limited (“the Company”), which
comprise the Balance Sheet as at March 31, 2024, the Statement of Profit and Loss (including Other Comprehensive
Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and a summary of
the significant accounting policies and other explanatory information (hereinafter referred to as “the 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 March 31,2024, the Loss ,changes in equity and its
cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified
under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor''s
Responsibilities for the Audit of the Standalone 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 statements under the
provisions of the Act and the Rules made there under, 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 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. We have determined the matters described below to be the key audit matters to be communicated in our
report.

Sr. No.	Key Audit Matter	Auditor''s Response
1.	Evaluation of uncertain tax positions The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Refer Note 23 to Notes of Accounts of the Standalone Financial Statements.	Principal Audit Procedures Obtained details of completed tax assessments and demands for the year ended March 31, 2024 from management. Additionally, we considered the effect of new information in respect of uncertain tax positions as at April 1, 2023 to evaluate whether any change was required to management''s position on these uncertainties.

2.	Internal Audit : As per Section 138, a listed company has to appoint a internal auditor but company unable to comply with this section.	As per discussion with management, the compliance will be made in FY 2024-25 and No Internal Auditor appointed till date.
3.	Unsecured Loan from Mr N.P. JALLAN (Court Case)	In October 2003, the company through its directors entered into share purchase agreement with Mr. N.P Jalan and to handover the management of the company in memorandum of terms dated 16th /17th Jan 2004. After the Investment made by Mr. N.P Jalan and he tookover the position of factory on 1st November 2003, the dispute arose between the parties and Jalan Group. The Hon''ble High Court of Delhi vide order dt 18/08/2005 referred the dispute to sole Arbitrator. After the settlement award of Rs. 2.40 crore, company has paid Rs.1.47 crore till 31/03/2024 and also deposited 93 lakhs with Registrar of Hon''ble Delhi High Court as per order dated 28.04.2023 and now the matter is pending with Hon''ble Delhi High Court Mediation and Conciliation Centre).Since the company has paid 1.47 crore till 31/03/2024 & deposited Rs. 93 Lakhs with Registrar, Company has asked for shares held in Escrow Account and Jalan Group has not complied with consent award , Hence the matter is now fixed for 17.09.2024 before Honble Delhi High Court Mediation and Conciliation Centre.

Information Other than the Standalone Financial Statements and Auditor''s Report Thereon

The Company''s Board of Directors is responsible for the preparation of the other information. The other information
comprises the information included in the Management Discussion and Analysis, Board''s Report including Annexure to
Board''s Report, Business Responsibility Report, Corporate Governance and Shareholder''s Information, but does not
include the standalone financial statements and our auditor''s 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.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is 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 financial position, financial
performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS
and other accounting principles generally accepted in India. 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 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 is 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 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 standalone 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 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 financial controls 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 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 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. 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.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate,
makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be
influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in
evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
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 auditor''s 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 the Companies (Auditor''s 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, to the extent applicable.

2. With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section
197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by
the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

3. As required by Section 143(3) of the Act, based on our audit 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 of accompanying standalone financial Statement.

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 Balance Sheet, 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 statements comply with the Ind AS specified under Section 133 of
the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 except compliances of Ind As 19 “Employee
Benefit”.

e) On the basis of the written representations received from the directors as on March 31,2024 taken on record by the
Board of Directors, none of the directors is disqualified as on March 31,2024 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”.

g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, as amended 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 23.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any
material foreseeable losses as at 31 March, 2024;

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

iv. a) The management has represented that, to the best of its knowledge and belief, as disclosed in the notes to the

accounts, 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 (i.e), including
foreign entities(“Intermediaries”), with the understanding, 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.

b) The management has represented that, to the best of its knowledge and belief no funds have been received by
the Company from any person(s) or entity (i.e), 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.

c) 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) and (ii) of Rule 11(e), contain any material misstatement.

v. There is no dividend declared or paid during the year by the company.

vi. Based on our examination, the company has used an accounting software for maintaining of its books of account
which does not have the feature of recording audit trail (edit log) facility in terms of the Proviso to Rule 3(1) of the
Companies (Accounts) Rules, 2014.

vii. As proviso to Rule 3(1) of the Companies ( Accounts) Rules 2014 is applicable from 1st April 2023 , reporting
under Rule 11(g) of the Companies ( Audit and Auditors) Rules , 2014 on preservation of audit trial as per the
statutory requirement for record retention is not applicable for the financial year ended 31st March , 2024.

For L N MALIK & CO .

Chartered Accountants

FRN: 015992N

SAMEER PAVI

Partner

Place : New Delhi Membership No: 091816

Date : 27.05.2024 UDIN: 24091816BKEFZX8679

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Mar 31, 2014

We have audited the accompanying financial statements of Coral Newsprints Limited, which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance & cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (the Act) read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. 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. 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 our 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, we consider 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, but not for the purpose of expressing an opinion on the effectiveness of the Company''s 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;

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

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

Report on Other legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, 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 notified under the Companies Act, 1956 (the Act) read with the General Circular 15/2013 dated 13th 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 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.

Annexure to the auditors'' Report - March 31, 2014

(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 Company physically verifies the fixed assets on a rotational basis and accordingly, certain fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification.

c) There was no disposal of fixed assets during the year.

(ii) a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) The Company has taken interest free loans or advances in the nature of loans from 5 parties covered in the register maintained under section 301 of the Act during the year. The closing balance outstanding as on 31/3/2014 in case of Unsecured loan taken from directors was Rs. 57,56,308/-. The maximum balance outstanding during the year in respect of above loans was Rs. 57,56,308/-.

The company has not given any loan or advance to the companies, firms or other parties listed in the register maintained under section 301 of the companies Act, 1956 during the year.

The terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interest of the company.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and also for the sale of goods and services.

(v) According to the information and explanations provided by the management, we are of the opinion that there were no contracts or arrangements during the year that need to be entered into the register maintained under section 301 of the Act.

(vi) The Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of section 58A of the Act and the rules framed there under apply.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) In respect of maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Act for the products of the Company, we have broadly reviewed the books of account maintained by the company pursuant to the order of the central government for maintenance of cost records under section 209 (1) (d) of the companies Act,1956 in manufacturing of Newsprints & Absorbent Kraft Paper and are of opinion that prima facie the prescribed accounts and records have been made and maintained.

(ix) a) According to the records of the company, undisputed statutory dues including Investor Education and Protection Fund, Income-tax, Service Tax, Sale-Tax, Custom Duty, Excise Duty, Cess and other statutory dues have been regularly deposited with the appropriate authorities except the company is irregular in depositing the previous year dues related to provident fund and TDS with the appropriate authorities. However, there is an arrear of Rs. 5,71,190/- w.r.t Provident fund and Rs. 12,374/- w.r.t TDS as on 31.03.2014 and no other undisputed amounts payable in respect of aforesaid dues were outstanding as at 31st March, 2014 for a period of more than six months from the date of becoming payable.

b) According to the records of the Company, there are no dues of Custom Tax, Wealth Tax, Excise Duty, Cess which have not been deposited on account of any dispute except:

1. Income tax (Penalty) demand of Rs. 2,16,322/- for the Asstt Year 1996-97, the matter for which is pending before Hon''ble Delhi High Court.

2. Income tax (Penalty) demand of Rs 2, 69,105 /- for the Asstt Year 1995-96, the matter for which is pending before Hon''ble Delhi High Court.

3. Water Cess (UPPCB) Rs. 13,89,212/- pending before BIFR.

4. Sales Tax - Rs. 6,46,883/- pending under appeal.

(x) The accumulated losses of the company have exceeded Fifty percent of its net worth as at 31st March, 2014. The company has not incurred any cash losses during the financial year covered by our Audit and also not incurred any cash loss in the immediately preceding F.Y. In arriving at the accumulated losses and the net worth we have considered the qualifications which are quantifiable in the Audit report of the year to which these losses pertain.

(xi) a) The Company has defaulted in repayment of dues to financial institutions. The company had already paid the OTS amount of UPFC loan during the previous years. However in respect of the DADP Interest demanded by UPFC (i.e., Rs. 51.83 Lacs) vide its letter dated 24.03.2011, the company has requested for a waiver of 75% vide its letter dated 04.08.2011. And in this respect BIFR board has directed UPFC for waiver of 50% of DADP demand as per its order dated 23.05.2012. Hence, as per the BIFR board''s order DADP demand would comes out to Rs. 25.92 Lacs, against which the company has already paid Rs. 14.82 lacs till 31.03.2012. Further on the basis of BIFR direction, the company has requested for waiver of 50% DADP amount vide letter dated 09.02.2013 but UPFC rejected the request vide its letter dated 04.03.2013 stating that the waiver cannot granted as per approved guidelines of the corporation. However UPFC vide its letter dt 10.02.2014 has asked the company to submit fresh OTS with 10% amount of outstanding principal as earnest money with in 15 days of issue of this letter. The company has filed its objection against this letter and requested to follow the BIFR order for waiver of 50 % DADP interest. The matter is still under consideration.

No confirmation of closing balance was available in respect of interest due to UPFC, and due to above facts no provision of DADP interest on UPFC loan was made in the books of accounts during the year.

b) Term Loan from PICUP has been settled for OTS (One Time Settlement) vide Letter Dated-13.10.2011 for an amount of Rs.200 lacs. Against this the company has paid Rs 30 lacs in FY 2011-12 and Rs 170.86 lacs till 31.03.2013 including finance charges. However, the balance amount of Rs 2,42,109/- has been paid during this financial year. As per letter dated 07.02.2013 received from PICUP, the company has to pay RC Collection Charges @ 10% of OTS amount, within one month''s time as per the rules of the PICUP. The company has informed the PICUP that as per their information, there are no recovery certificates pending against any of the guarantors and requested them to issue NO objection certificate. But PICUP has requested no dues certificate from various Tehsils/DM in respect of dues against guarantors, which are still awaited. Due to above facts, finalization of recovery of RC Collection charges is still pending and hence no provision has been made in books of account.

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

(xiii) The nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

(xiv) The Company does not deal or trade in shares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the Company has not given a guarantee for a loan taken by a third party from a bank or financial institutions.

(xvi) According to the records of the company, the company has not obtained any term loans during the year.

(xvii) According to the information and explanations given to us and on overall examination of the balance sheet of the Company, we report that funds raised on short term basis have not been used for long-term investment by the company.

(xviii) According to the records of the company and information and explanations provided by the management, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

(xix) According to the records of the company, the company has not issued any debentures during the year.

(xx) The Company has not raised any money by public issue during the period covered by our Audit Report.

(xxi) Based upon Audit procedures performed and information and explanation given by the management we report that no fraud on or by the company has been noticed or reported during the course of Audit.

For L.N. MALIK & CO Chartered Accountants Firm Reg. No : 015992N

L.N. MALIK Place : New Delhi Partner Date : 30-05-2014 Membership No 10423

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Mar 31, 2011

1. We have audited the attached Balance Sheet of CORAL NEWSPRINTS LIMITED as at 31st March 2011 and also the Profit & Loss Account for the year ended on that date annexed thereto. 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 have 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 misstatement. 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 the 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, issued by the Central Government of India in terms of Sub-section (4A) of Section 227 of the Companies Act, 1956, ('the Act'), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to 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 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 appears from our examination of those books.

c) The Balance Sheet, Profit & Loss Account dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, profit and loss account & cash flow statement dealt with by this report comply with the Accounting Standards referred to in Sub-Section (3C) of the Section 211 of the Companies Act, 1956;

e) On the basis of the written representation received from the Directors, as on 31 March 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2011 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

f) As indicated in note 6, the accounts of the Company have been prepared on the basis that the Company is a going concern, however having regard to the accumulated losses of the Company which have eroded the paid-up Capital, the ability of the Company to continue as a going concern depends on the adequate finance and future profitability.

g. Reference is invited to :

Note 2. Regarding non confirmation of balance of Unsecured loans, few Debtors & Creditors.

Note 4. Regarding non confirmation of Term Loans from UPFC & PICUP.

Note 16. Regarding the Arbitration award passed by Hon'ble Justice S.C. Jain (Retd.) appointed by Hon'ble High Court regarding settlement of dispute with the Narayan Prasad Jalan.

h) Subject to matters referred in Para g, in our opinion and to the best of our information and according to the explanation given to us, the said accounts read with notes there on give the information required by the Act, in the manner so required to give a true and fair view in conformity with the accounting principles generally accepted in India;

i) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 20011;

ii) In the case of the Profit and Loss Account, of the Profit for the year ended on that date; and

iii) In the case of Cash Flow Statement, of the cash flow for the year ended on that date.

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

(b) The Company physically verifies the fixed assets on a rotational basis and accordingly, certain fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification.

(c) There was no disposal of fixed assets during the year.

(ii) (a) As explained to us, inventories were physically verified during the year the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) The Company has not taken any interest free loans or advances in the nature of loans from any party covered in the register maintained under section 301 of the Act during the year. The closing balance outstanding as on 31.03.2011 in case of Unsecured loan taken from directors was Rs. 10.39 Lacs. The maximum balance outstanding during the year in respect of above loans was Rs. 23.09 Lacs.

The Company has not given any loan or advance to the companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 during the year.

The terms and conditions of such loans are, in our opinion, prima facie not prejudical to the interest of the Company.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and also for the sale of goods and services.

(v) According to the information and explanations provided by the management, we are of the opinion that there were no contracts or arrangements during the year that need to be entered into the register maintained under section 301 of the Act.

(vi) The Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of section 58A of the Act and the rules framed there under apply.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) In respect of maintenance of cost records under clause (d) of sub-section (1) of section 209 of the act for the products of the Company. We based on our examination of the company's records are of the opinion that the Company is not required to maintain the cost records prescribed under section 209(1 )(d).

(ix) (a) According to the records of the company, undisputed statutory dues including Investor Education and Protection Fund, Income-tax, Service Tax, Sales-Tax, Custom Duty, Excise-Duty, Cess and other statutory dues have been regularly deposited with the appropriate authorities except the company is irregular in depositing the previous year dues related to provident fund, water cess and TDS with the appropriate authorities. However, there is an arrear of Rs. 5,97,929/- w.r.t. Provident fund, Rs. 6,24,189/- w.r.t. Water Cess and Rs. 16,243/- w.r.t. TDS as on 31.03.2011 and no other undisputed amounts payable in respect of aforesaid dues were outstanding as at 31st March, 2011 for a period of more than six months from the date of becoming payable.

(b) According to the records of the company, there are no dues of Custom duty, Wealth Tax, Excise Duty, Cess which has not been deposited on account of any dispute except :

1. Income tax (Penalty) demand of Rs. 2,16,322/- for the Asst Year 1996-97, the matter for which is pending before Hon'ble Delhi High Court.

2. Income tax (Penalty) demand of Rs. 2,69,105/- for the Asst Year 1995-96, the matter for which is pending before Hon'ble Delhi High Court.

3. Water Cess - Rs. 2,29,891/- pending under appeal.

4. Sales Tax - Rs. 6,46,883/- pending under appeal.

(x) The accumulated losses of the company have exceeded Fifty percent of its net worth as at 31st March, 2011. The Company has not incurred any cash losses during the financial year covered by our Audit and also not incurred any cash loss in the immediately preceeding F.Y. in arriving at the accumulated losses and the net worth we have considered the qualifications which are quantifiable in the Audit Report of the year which these locess pertain.

(xi) The Company has defaulted in repayment of dues to financial institutions. The Company had already paid the OTS amount of UPFC loan during the previous year. However in respect of the DADP Interest demanded by UPFC (i.e. Rs. 51.83 lacs) vide its letter dated 24.03.2011, the Company has requested for a waiver of 75% vide its letter dated 04.08.2011 which is still pending before BIFR Board. However, as per the previous DADP demand of Rs. 51.83 Lacs, the Company has already paid Rs. 14.82 lacs till 31.03.2011.

During the previous year, the Company had requested for OTS with PICUP at Rs. 235 lacs which was not approved by them. Though as per the directions given by BIFR, the Company laid down the new OTS proposal on 25.06.2011 for final settlement and reduce the previous OTS to Rs. 201 lacs on the basis of new OTS Policy of PICUP. The Company has already paid Rs. 37 lacs in the F.Y. 2003-04. Further, during the year the Company has paid Rs. 1 lac to PICUP towards earnest money against the proposal.

No confirmation of closing balance was available in respect of above loans. Hence, no provision of interest was made in the books in respect of UPFC & PICUP Loan.

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

(xiii)The nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

(xiv)The Company does not deal or trade in shares, securities, debentures and other investment.

(xv)According to the information and explanations given to us, the Company has not given a guarantee for a loan taken by a third party from a bank or financial institutions.

(xvi)According to the record of the company, the company has not obtained any term loans during the year.

(xvi) According to the information and explanations given to us and on overall examination of the balance sheet of the Company, we report that no funds raised on short terms basis have been used for long-term investment.

xvi) According to the records of the Company and information and explanations provided by the management, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

(xix)According to the record of the company, the company has not issued any debentures during the year.

(xx) The Company has not raised any money by public issue during the period covered by our Audit Report.

(xxi)Based upon Audit procedures performed and information and explanation given by the management we report that no fraud on or by the Company has been noticed or reported during the course of Audit.

For L.N. Malik & Co.

Chartered Accountants

L.N. Malik

Partner

M. No 10423

FRN : 015992N

Place : New Delhi

Date : 6th September, 2011

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Mar 31, 2010

1. We have audited the attached Balance Sheet of CORAL NEWSPRINTS LIMITED as at 31st March 2010 and also the Profit & Loss Account for the year ended on that date annexed thereto. These financial 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 have 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 misstatement. 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 the 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, issued by the Central Government of India in terms of Sub-section (4A) of Section 227 of the Companies Act, 1956, (the Act), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to 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 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 appears from our examination of those books.

c) The Balance Sheet, Profit & Loss Account dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, profit and loss account & cash flow statement dealt with by this report comply with the Accounting Standards referred to in Sub-Section (3C) of the Section 211 of the Companies Act, 1956;

e) On the basis of the written representation received from the Directors, as on 31 March 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

f) As indicated in note 6, the accounts of the Company have been prepared on the basis that the Company is a going concern, however having regard to the accumulated losses of the Company which have eroded the paid-up Capital, the ability of the Company to continue as a going concern depends on the adequate finance and future profitability.

g. Reference is invited to :

Note 2. Regarding non confirmation of balance of Unsecured loans, few Debtors & Creditors.

Note 4. Regarding non confirmation of Term Loans from UPFC & PlCUR

Note 16. Regarding the dispute with Arrow Syntex (P) Ltd. which is still pending with Honble Arbitrator.

h) Subject to matters referred in Para g, in our opinion and to the best of our information and according to the explanation given to us, the said accounts read with notes there on give the information required by the Act, in the manner so required to give a true •and fair view in conformity with the accounting principles generally accepted in India;

i) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 20010;

ii) In the case of the Profit and Loss Account, of the Profit for the year ended on that date; and

iii) In the case of Cash Flow Statement, of the cash flow for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT - MARCH 31, 2010 (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 Company physically verifies the fixed assets on a rotational basis and accordingly, certain fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification.

(c) There was no disposal of fixed assets during the year.

(ii) (a) As explained to us, inventories were physically verified during the year the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) The Company has not taken any interest free loans or advances in the nature of loans from any party covered in the register maintained under section 301 of the Act during the year. The closing balance outstanding as on 31.03.2010 in case of Unsecured loan taken from directors was Rs. 18.09 Lacs & from the Company was Rs. 131.95 lacs which are subject to confirmation and the total closing outstanding balance of Unsecured loans as on 31.03.2010 was Rs. 150.04 Lacs.

The maximum balance outstanding during the year in respect of above loans was Rs. 178.89 Lacs.

The Company has not given any loan or advance to the companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 during the year.

The terms and conditions of such loans are, in our opinion, prima facie not prejudical to the interest of the Company. (iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and also for the sale of goods and services.

(v) According to the information and explanations provided by the management, we are of the opinion that there were no contracts or arrange -ments during the year that need to be entered into the register maintained under section 301 of the Act.

(vi) The Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of section 58A of the Act and the rules framed there under apply.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) In respect of maintenance of cost records under clause (d) of sub-section (1) of section 209 of the act for the products of the Company. We based on our examination of the companys records are of the opinion that the Company is not required to maintain the cost records prescribed under section 209(1 )(d).

(ix) (a) According to the records of the company, undisputed statutory dues including Investor Education and Protection Fund, Income-tax, Service Tax, Sales-Tax, Custom Duty, Excise-Duty, Cess and other statutory dues have been regularly deposited with the appropriate authorities except the company is irregular in depositing the dues related to provident fund, water cess and TDS with the appropriate authorities. However, there is an arrear of Rs. 7,26,009/- w.r.t. Provident fund, Rs. 7,63,989.73 w.r.t. Water Cess and Rs. 38,092/- w.r.t. TDS as on 31.03.2010 and no other undisputed amounts payable in respect of aforesaid dues were outstanding as at 31st March, 2010 for a period of more than six months from the date of becoming payable.

(b) According to the records of the company, there are no dues of Custom duty, Wealth Tax, Excise Duty, Cess which has not been deposited on account of any dispute except :

1. Income tax (Penalty) demand of Rs. 2,16,322/- for the Asst Year 1996-97, the matter for which is pending before Honble Delhi High Court.

2. Income tax (Penalty) demand of Rs. 2,69,105/- for the Asst Year 1995-96, the matter for which is pending before Honble Delhi High Court.

3. Water Cess - Rs. 2,29,891/- pending under appeal.

4. Sales Tax - Rs. 6,46,883/- pending under appeal.

(x) The accumulated losses of the company have exceeded Fifty percent of its net worth as at 31s1 March, 2010. The Company has not incurred any cash losses during the financial year covered by our Audit and also not incurred any cash loss in the immediately preceeding F.Y. in arriving at the accumulated losses and the net worth we have considered the qualifications which are quantifiable in the Audit Report of the year which these locess pertain.

(xi) The Company has defaulted in repayment of dues to financial institutions. The Company had already paid the OTS amount of UPFC loan during the previous year. But in respect of the DADP Interest demanded by UPFC (i.e. Rs. 66.28 lacs) vide its letter dated 15.02.2010, the Company has requested for a waiver of 75% vide its letter dated 17.05.2010 which is still pending before BIFR Board. However, as per the previous DADP demand of Rs. 59.27 Lacs, the Company has already paid Rs. 14.82 lacs till 31.03.2010.

During the previous year, the Company had requested for OTS with PICUP at Rs. 235 lacs which was not approved by them. Though as per the directions given by BIFR, the Company laid down the new OTS proposal on 19.07.2010 for final settlement and reduce the previous OTS to Rs. 175 lacs on the basis of new .OTS Policy of PICUP. The Company has already paid Rs. 37 lacs in the F.Y. 2003-04. Further, after the detail explanation sort by PICUP regarding deduction in amount of OTS, the Company again laid down the detailed proposal with reasons on 05.08.2010 for reconsi -dering the OTS at Rs. 175 lacs.

No confirmation of closing balance was available in respect of above loans. Hence, no provision of interest was made in the books in respect of UPFC & PICUP Loan. (xii) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii)The nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

(xiv)The Company do,es not deal or trade in shares, securities, debentures and other investment.

(xv)According to the information and explanations given to us, the Company has not given a guarantee for a loan taken by a third party from a bank or financial institutions.

(xvi)According to the record of the company, the company has not obtained any term loans during the year.

(xvii) According to the information and explanations given to us and on overall examination of the balance sheet of the Company, we report that no funds raised on short terms basis have been used for long-term investment.

xviii) According to the records of the Company and information and explanations provided by the management, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

(xix)According to the record of the company, the company has not issued any debentures during the year.

(xx) The Company has not raised any money by public issue during the period covered by our Audit Report.

(xxi) Based upon Audit procedures performed and information and explanation given by the management we report that no fraud on or by the Company has been noticed or reported during the course of Audit.

For L.N. Malik & Co.

Chartered Accountants

L.N. Malik

Partner

M. No. 10423

FRN : 015992N

Place : New Delhi

Date : 4thptember, 2010