Guarantees given by bank Rs. NIL (Previous Year Rs. 4.00 lacs)

Disputed demand under Sales tax Rs. 1388942/- (Previous Year Rs. NIL)

Claims against the Company not acknowledged as debt Rs. 9065872/- (Previous Year Rs. NIL)

NOTE 2: Estimated amount of capital contracts remaining to be executed and not provided for Rs.2359638/- (Previous Year Rs. 2359638/-)

NOTE 3: The Income Tax assessments of the Company have been completed upto Assessment Year 2012-13. The Income Tax authorities had disallowed certain concessions/allowances available to the Company. The Provision for Income Tax already made in the past has been considered to be adequate enough to meet the liabilities, if any.

NOTE 4 : Sundry creditors include principal amount Rs. 6131802/- (Previous Year Rs. 9295772/-) due to the suppliers covered by Micro and Small Enterprises Development Act, 2006.

There is no interest paid/payable during the year by the Company to such suppliers.

NOTE 5: In the opinion of the Board, any of the asset other than Fixed Assets and non-current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

NOTE 6 : The Company has operating lease for one of its premises, which is renewable on expiry. Rental expenses for operating lease charged to Profit & Loss Account for the year is Rs. 500000/- (Previous Year Rs. 1050000/- ).

NOTE 7 : During the year, the Company has not recognised additional net Deferred Tax Asset. Net Deferred Tax Asset of Rs.14.00 Crore was recognised for the year ended 31.03.2012 based on the future profitability projections by the management. The financial statements for the year have been drawn up as per going concern assumptions.

NOTE 8 : Related Party Disclosure as per Accounting Standard 18 :

List of related parties and relationships :

A. Key Management Personnel

1. Shri Girish Tandon - Managing Director 2. Shri Alankar Tandon - Executive Director 3. Shri Roop Mani Pandey - Chief Financial Officer 4. Smt Babita Jain - Company Secretary

B. Relative of Key Management Personnel

1. Shri Badri Vishal Tandon, 2. Smt. Savita Seth 3. Smt. Meenu Tandon 4. Smt. Neera Tandon 5. Smt. Surabhi Mehra 6. Smt. Paridhi Tandon 7. Shri Gaurav Tandon 8. Shri Akshat Tandon 9. Smt. Chavi Tandon 10. Km. Damini Tandon 11. Master Aadi Tandon 12. Master Anadi Tandon

C. Enterprises over which Key Managerial Personnel are able to exercise significant influence.

1. Alankar Udyog Pvt. Ltd. 2. Sahitya Bhawan Pvt. Ltd. 3. Electra Logistics Ltd.

NOTE 9 : Employee Benefits :

As per Accounting Standard 15 "Employee Benefits", the disclosures of Employee benefits as defined in the Accounting Standard as given below:

Defined Benefit Plan

The employees' Leave Encashment Scheme is unfunded. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

NOTE 10 : The Company accounts for gratuity liability equivalent to the premium amount payable to Life Insurance Corporation of India every year. The company has changed current accounting year from 1st April, 2014 to 31st March, 2015 where as the previous accounting year was for fifteen months ended from 1st January, 2013 to 31st March, 2014. The Company has not received any advice of premium amount payable to Life Insurance Corporation of India for the year ended 31st March, 2015. Gratuity liability amounting to Rs. 1422439/- (Previous Year Rs. 2050666/-) has been provided for the period on estimated basis.

NOTE 11 : Segment Information :

The Company operates only in one business segment, that is, "Printing, Writing and Newsprint Paper".

NOTE 12 : The Company's current accounting year is from 1st April, 2014 to 31st March, 2015, whereas the previous accounting year was for fifteen months ended 31st March, 2014. Accordingly, the current year's figures being for twelve months ended 31st March, 2015 are not comparable with those of the previous year.

NOTE 13: Previous year's figures including those in brackets have been re-arranged/regrouped wherever considered necessary.

NOTE 14 : As at the balance sheet date, the accumulated losses of the company stands at Rs.2001489054/- ( Rs. 1446358417/-) and the shareholders' Fund amount to Rs. 381437871/-( Rs 381437871/-).

The business plan and profitability estimates have been made by the Board of directors. Theses projections reflects that the company would be in a position to generate positive cash flows and operational surplus in the near future.

Considering the strategic plans and the future profitability projections , theses financial statements have drawn up as per the going concern assumptions, which is appropriate in the opinion of the management.

NOTE 15 : Balances of some of the Trade Receivables, Trade Payables, Lenders, Loans and Advances are subject to confirmation from respective parties and consequential adjustments arising from reconciliation, if any. The management is of the view that there will be no material adjustment in this regard.

NOTE 16 : COMPANY OVERVIEW

SHREE BHAWANI PAPER MILLS LIMITED, a Public Limited Company is primarily engaged in manufacture & sale of writing and printing paper. The Company presently has manufacturing facilities at Raebareli (U.P.).

NOTE 17 : The Company became a sick industrial company within the meaning of Section 3 (1) (o) of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) due to erosion of its entire net worth and the Company was declared a sick Industrial Company by BIFR on 26th September, 2013. The company is in the process of restructuring/revival of its business. Considering this the accounts have been prepared on a going concern basis. The Company's ability to continue as a going concern is dependent upon successful restructuring and revival of its business. The company has submitted the Draft Rehabilitation Scheme (DRS) to operating agency, Bank of Baroda. The company has provided interest on Term Loan and other Bank Loans of Indian Bank and Bank of Baroda @10.5% with effect from 1st January, 2013 instead of rate as sanctioned by the Banks.

NOTE 18 : LITIGATION

The Company is subject to legal proceedings and claims which have arisen in the ordinary course of business. The company's management does not reasonably expect that these legal actions when ultimately concluded and determined, will have a material and adverse affect on the Company's results of operations or financial position.