We have audited the attached Balance Sheet of ASHUTOSH PAPER MILLS
 LIMITED as at 31 st March 2012, the Profit and Loss Account and Cash
 Flow Statement of the Company 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 from 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.
 
 1) As required by the Companies (Auditors'' Report) order 2003, issued
 by the Company Law Board in terms of section 227 (4A) of the Companies
 Act, 1956, we enclose in the annexure, a statement on the matters
 specified in paragraph 4 and 5 of the said Order.
 
 2) Further to our comments in the Annexure referred to in paragraph 3
 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 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
 such books;
 
 c) The Company''s Balance Sheet, Profit and Loss Account and Cash Flow
 Statement dealt with by the report are in agreement with the books of
 accounts;
 
 d) In our opinion, the Balance Sheet, Profit & loss account and balance
 sheet comply with the mandatory accounting standards referred to in
 sub-section (3C) of section 211 of companies Act, 1956;
 
 e) On the basis of our examination of books and according to the
 information and explanations given to us, no material observations have
 been noticed during our audit which have any adverse effect on the
 functioning of the company as referred to in section 227(3)(e) of the
 companies act.
 
 f) On the basis of written representation received from the directors
 of the company as on 31.03.2012, we report that none of the directors
 of the company is disqualified from being appointed as director under
 clause (g) of sub section 1 of section 274 of the companies act as
 referred to in section 227(3)(f) of the companies act, 1956.
 
 3.  In our opinion, and to the best of our information and according to
 the explanations given to us, the said balance sheet and profit and
 loss account read together with the significant accounting policies and
 other notes thereon give the information required by the companies act,
 1956 in the manner so required and give true and fair view: -
 
 i) In the case of Balance Sheet, of the state of affairs of the Company
 as at 31st March, 2012;
 
 ii) In the case of Profit & Loss Account, of the profit of the company
 for the year ended on that date; and
 
 iii) In the case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 ANNEXURE TO THE AUDITORS'' REPORT Referred to in paragraph 3 of our
 report of even date, (i) (a)The company has no fixed Assets.
 Accordingly the provisions of clause 4(i) (b) and (c) of the companies
 (Auditor''s Report) 2003 are not applicable to the company.
 
 (ii) (a) The inventory has been physically verified during the period
 by the management. In our opinion, the frequency of verification is
 reasonable.
 
 (b) In our opinion, the procedures of physical verification of
 inventories followed by the management are reasonable and adequate in
 relation to the size of the company and the nature of its business.
 
 (c) On the basis of our examination of the inventory records, in our
 opinion, the company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material.
 
 (iii) (a)According to the information and explanations given to us, the
 company has neither granted nor taken any loans, secured or unsecured
 to/from companies, firms or other parties, covered in the register
 maintained under section 301 of the Companies Act, 1956. Accordingly
 the provisions of clause 4(iii) (b), (c) and (d) of the companies
 (Auditor''s Report) 2003 are not applicable to 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 with regard to purchases of inventory, fixed assets and with
 regard to the sale of goods. During the course of our audit, no major
 weakness has been noticed in internal controls.
 
 (v) (a) On the basis of the audit procedures performed by us and
 according to the information, explanations and representations given to
 us, we are of the opinion that, the transactions in which directors
 were interested as contemplated under section 297 and sub-section (6)
 of section 299 of the Companies Act, 1956, and which were required to
 be entered in the register maintained under section 301 of the
 Companies Act, 1956, have so entered.
 
 (b) According to the information and explanations given to us,
 transactions exceeding the value of Rs.  5,00,000/- have been made at
 prices which are reasonable having regard to the prevailing market
 prices at the relevant time.
 
 (vi) The company has not accepted any deposits as defined under
 sections 58A of the Companies Act, 1956 and the Companies (Acceptance
 of Deposits) Rules, 1975.
 
 (vii) In our opinion, the company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) According to the information and explanations given to us,
 maintenance of cost records have not been prescribed by the Central
 Govt, under section 209 (1) (d) of the Companies Act, 1956.
 
 (ix) (a) According to the records of the company, in our opinion the
 company is generally regular in depositing with appropriate authorities
 undisputed statutory dues including provident fund, investor education
 and protection fund, employee''s state insurance, income tax, sales tax,
 wealth tax, custom duty, excise duty, cess and any other statutory dues
 applicable to it.
 
 (b) According to the information and explanations given to us, there
 are no undisputed amount payable in respect of income tax, sales tax,
 customs duty, wealth tax and excise duty were outstanding as on 31st
 March 2012 for a period of more than six months from the date becoming
 payable.
 
 (x) The company has accumulated losses amounting to Rs. 19,317,340/- as
 at 31st March 2012.The company has not incurred any cash losses during
 the financial year ended on that date or in the immediately preceding
 financial year.
 
 (xi) According to the records of the company examined by us and the
 information and explanations given to us, the company has not defaulted
 in repayment of dues to any financial institution or bank or debenture
 holders as at the balance sheet date.
 
 (xii) The company has not granted any 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 or a nidhi/mutual
 benefit fund/society.
 
 (xiv) In respect of shares, securities, debentures and other
 investments, dealt in or traded by the company, proper records have
 been maintained in respect of transactions and contracts, and timely
 entries have been made therein.
 
 (xv) According to the information and explanations given to us, the
 company has not given any guarantee for loans taken by others, from
 banks or financial institutions during the year.
 
 (xvi) The Company has not obtained any term loans during the current
 year except for unsecured loans taken from Banks/financial
 institutions/other parties.
 
 (xvii) Based on the information and explanations given to us and on an
 overall examination of the balance sheet of the company, in our
 opinion, there are no funds raised on a short term basis which have
 been used for long term investment and vice-versa.
 
 (xviii) According to the information and explanations given to us, the
 company has not made preferential allotment of shares to parties and
 companies covered in the register maintained under section 301 of the
 Act during the year.
 
 (xix) According to the information and explanations given to us, during
 the period covered by our audit report, the company has not issued any
 debentures.
 
 (xx) The company has not raised money by way of public issues during
 the period.
 
 (xxi) Based on the audit procedures performed and information and
 explanations given to us, we report [hat no fraud on or by the company
 has been noticed or reported during the course of our audit.
 
                                                      For M/s SNMG & CO.
 
                                                  Chartered Accountants
                                                        F.R.No. 004921N
 
                                                             Sd/-
 
                                                       CA. NEERAJ GUPTA
 
 Place : New Delhi                                        (PARTNER)
 
 Dated: 1st September, 2012                       Membership No. 087004