We have audited the attached Balance Sheet of AGIO PAPER AND INDUSTRIES
 LIMITED as at 31st March, 2012, the Statement of Profit & Loss for the
 year ended on that date and also the Cash Flow Statement 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.
 
 We 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 management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 As required by the Companies (Auditor,s Report) Order, 2003 as amended
 by the Companies (Auditor,s Report) (Amendment) Order, 2004 issued by
 the Central Government of India in terms of sub-section (4A) of section
 227 of the Companies Act, 1956, we enclose in the Annexure, a statement
 on the matters specified in paragraphs 4 and 5 of the said Order.
 
 Further to our comments in the Annexure referred to above, we report
 that:
 
 1.  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;
 
 2.  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;
 
 3.  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;
 
 4.  In our opinion, the Balance Sheet, Statement of Profit and Loss and
 Cash Flow Statement dealt with by this report comply with the
 accounting standards referred to in sub-section (3C) of section 211 of
 the Companies Act, 1956.
 
 5.  On the basis of written representations received from the Directors
 as on 31st March, 2012 and taken on record by the Board of Directors,
 we report that none of the Directors is disqualified as on 31st March,
 2012 from being appointed as a Director in terms of clause (g) of
 sub-section (1) of section 274 of the Companies Act, 1956;
 
 6.  We report that, in our opinion and to the best of our information
 and according to the explanations given to us, the said accounts read
 with the significant Accounting Policies and Notes on Account give the
 information required by the Companies Act, 1956 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 31st March, 2012;
 
 (b) In the case of the Statement of Profit and Loss, of the loss for
 the year ended on that date; and
 
 (c) In the case of Cash Flow Statement, of the Cash Flows for the year
 ended on that date.
 
                                                For Singhi & Co
                                                Chartered Accountants
 
                                                Firm Registration 
                                                No. 302049E
 
 S. K. Kothari 1-B, Old Post 
 
 Office Street,                                 Kolkata Partner
 
 Date : 30th May, 2012                          Membership No - 54157
 
 Annexure to the Auditors, Report
 
 (Referred to in Paragraph 3 of our report of even date)
 
 i. (a) In our opinion, the company has maintained records showing full
 particulars, including quantitative details and their situation of its
 fixed assets.
 
 (b) As per the information and explanations given to us, due to
 suspension of operations during the whole year, physical verification
 of fixed assets could not be carried out.
 
 (c) There was no substantial disposal of fixed assets during the year.
 
 ii. (a) According to the explanation given to us, the inventories have
 been physically verified at reasonable intervals during the year by the
 management except materials lying with third parties, where
 confirmations are obtained.
 
 (b) In our opinion, the procedure of physical verification of
 inventories followed by the management is reasonable and adequate in
 relation to the size of the Company and the nature of its business.
 
 (c) The Company has maintained proper records of inventories. The
 discrepancies between the physical stock and book stock, if any, have
 been properly dealt with in the books of account.
 
 iii. (a) As per the information furnished, the Company has not granted
 any loans secured or unsecured to Companies, firms or other parties
 covered in the Register maintained u/s 301 of the Companies Act, 1956.
 Hence, clauses 4 (iii) (b), (c) and (d) of the order are also not
 applicable to the company.
 
 (b) As per the information and explanations given to us, during the
 year the company has taken interest free unsecured loans aggregating
 Rs. 1302.00 lacs from two parties covered in the register maintained
 u/s 301 of the Companies Act, 1956. The maximum amount outstanding
 during the year from these parties and the year-end balance of loan
 taken from one party was Rs. 1302.00 lacs and Rs. 699.50 lacs
 respectively.
 
 (c) In our opinion the terms and conditions of above loans are
 prima-facie, not prejudicial to the interest of the company.
 
 (d) The aforesaid loans are repayable on demand and there is no
 repayment schedule. During the year the company has not paid any amount
 as interest to the parties covered in register maintained under section
 301 of the Act.
 
 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 nature of its business
 for the purchase of inventory and fixed assets and for the sale of
 goods and services. Further, on the basis of our examination of the
 books of accounts and according to the information and explanation
 given to us, we have not come across any instances of major weaknesses
 in the aforesaid internal control system.
 
 v. (a) In our opinion and according to the information and explanations
 given to us, we are of the opinion that the contracts or arrangements
 that need to be entered in the register maintained u/s. 301 of the
 Companies Act, 1956 have been entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contract or
 arrangements entered in the register maintained under section 301 of
 the Companies Act, 1956 have been made at prices which reasonable
 having regard to the prevailing market price at the relevant time.
 
 vi. The Company has not accepted any fixed deposit from the public
 within the meaning of the provisions of Section 58A and 58AA of the
 Companies Act, 1956 and rules made there under.
 
 vii. In our opinion, the Company does not have internal audit system
 commensurate with the size and nature of its business. Internal audit
 was not conducted during the current year.
 
 viii. We have broadly reviewed the books of accounts maintained by the
 company pursuant to the rules made by the Central Government for the
 maintenance of cost records under clause (d) of sub section (1) of
 Section 209 of the Companies Act, 1956 and are of the opinion that
 prima facie, the prescribed accounts and records have been made and
 maintained. We have, however, not made a detailed examination of the
 records with a view to determine whether they are accurate or complete.
 
 ix. (a) According to the information and explanations given to us and
 on the basis of our examination of the books of account, the Company
 has been generally regular in depositing undisputed statutory dues
 including Provident Fund, Employees, State Insurance, Income-tax,
 Sales-tax, Service Tax, Excise Duty, Cess, Wealth Tax and any other
 statutory dues during the year with the appropriate authorities.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of above statutory dues were in
 arrears, as at 31st March, 2012 for a period of more than six months
 from the date they became payable except liability towards Water Cess
 amounting to Rs. 26.29 lacs are outstanding for more than six months.
 
 (c) According to the information and explanation given to us, the
 following statutory dues have not been deposited on account of matters
 pending before appropriate authorities:
 
 Sl Name 
    of the 
    Statute      Nature of 
                 Dues         Amount    Period to 
                                        which          Forum
                                                       where dispute 
                                                       is pending
                             (Rs. in 
                              Lacs)     the amount 
                                        relates
 
 1 Income 
 Tax Act, 1961   Income 
                 Tax            7.96    1996 - 1997    Kolkata High
                                                       Court
 
 2 Income 
 Tax Act, 1961   Income    
                 Tax            6.23    2007 - 2008    Deputy 
                                                       Commissioner
 
 3 Central 
 Excise Act, 
 1944            Cenvat 
                 Claim          3.81    1993 - 2005    Central Excise
                                                       Authorities
 
 4 Employees 
 Provident 
 Fund            Provident 
                 Fund           2.64    1990 - 1991    to Provident
 Fund & Misc. 
 Provisions 
 Act, 1952                              2000 - 2001    & Appellate 
                                                       Tribunal
 
                                        2003 - 2004
 5 Central
 Sales Tax 
 Act, 1956       Sales Tax      0.37    2002-03 &      Sales Tax
                                                       Appellate
                                        2003-04
 
 x.  As per books of accounts, the Company,s accumulated losses at the
 end of the financial year have exceeded fifty present of its net worth.
 The Company has incurred cash losses in the current year and in
 immediately preceding financial year.
 
 xi.  Based on our audit procedures and on the basis of information and
 explanations given to us by the management, the Company has not delayed
 in repayment of dues to the banks.
 
 xii.  According to the information and explanations given to us, the
 Company has not granted loans and advances on the basis of security by
 way of pledge of shares, debentures and other securities.
 
 xiii.  In our opinion, the Company is not a chit fund/ mutual benefit/
 society and therefore, the provisions of clause 4 (xiii) of the order
 are not applicable.
 
 xiv.  According to the information and explanations given to us, the
 company is not dealing or trading in shares, securities, debentures and
 other investments and therefore, the provisions of clause 4 (xvi) of
 the order are not applicable.
 
 xv.  As per the information and explanation given to us, the company
 has not given any guarantee for loans taken by others from Bank or
 financial institutions.
 
 xvi.  Based on the information and explanations given to us by the
 management, term loans were applied for the purpose for which these
 were obtained.
 
 xvii.  According to the information and explanations given to us and on
 an overall examination of the balance sheet of the company, we report
 that no funds raised on short term basis have been used for long term
 investment during the year on overall basis.
 
 xviii.  According to the information and explanations given to us, the
 company has not made any preferential allotment during the year, to
 parties and companies covered in the Register maintained under section
 301 of the Companies Act, 1956.
 
 xix.  The company did not issue debentures during the year.
 
 xx.  The Company has not raised any monies by public issue during the
 year.
 
 xxi.  According to the information and explanations given to us, no
 fraud on or by the company has been noticed or reported during the year
 
                                           For Singhi & Co               
                                           Chartered Accountants
 
                                           Firm Registration 
                                           No. 302049E
 
 S. K. Kothari 1-B, Old Post 
 
 Office Street,                            Kolkata Partner
 
 Date : 30th May, 2012                     Membership No - 54157