Auditor Report of Milkfood Ltd.

Mar 31, 2025

We have audited the accompanying standalone financial statements of Milkfood Limited (“the Company”), which comprise the
standalone Balance Sheet as at March 31,2025, the standalone Statement of Profit and Loss (including Other Comprehensive
Income), the standalone Statement of Changes in Equity and the standalone Statement of Cash Flows for the year ended on that
date, notes to the standalone financial statements including the material accounting policy information 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, as amended (“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 31,2025, its profit including total comprehensive income, 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 (SAs) specified under
section 143(10) of the Act. 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 ethical requirements that are
relevant to our audit of the standalone financial statements 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 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.

Emphasis of matter:

Attention is drawn to the Note no 6(ii) regarding Trade Receivables, Note No 8(ii) regarding advance to suppliers, Note No 12(ii)
regarding GST, Note No 24 regarding other income, Note No 28(d) in respect of Interest on GST Refund , Note No 15(iii)
regarding withdrawal of ESOP scheme resulting in Nil Accounting Impact.

Our opinion is not qualified in respect of these matters.

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 for the year ended March 31,2025. 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.
For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have
fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the standalone Ind AS financial statements
section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures
designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements.
The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our
audit opinion on the accompanying standalone Ind AS financial statements.

The Key Audit Matter

How the matter was addressed in our audit

Provisions and Contingent Liabilities relating to Taxations, litigations and claims: (Refer note 34) The company operates in various states within India, exposing it to a variety of different Central and State Laws, regulations and interpretations thereof. In this regulatory environment, there is an inherent risk of litigation and claims. Provisions are required when the company has present obligations (legal or constructive) as a result of past event for which it is probable that a cash outflow will be required and reliable estimate can be made of the amount of that obligation.

Our procedures included, but were not limited to the following: • Assessed the appropriateness of the Company’s accounting policies relating to provisions and contingent liabilities, in accordance with the applicable accounting standards; • Obtained an understanding of the process, and evaluated the design and tested the operating effectiveness of the key internal controls around the recording and assessment of provisions and contingent liabilities.

The Key Audit Matter

How the matter was addressed in our audit

Contingent liability disclosure is made where there is a possible obligation or present obligation that probably may not require outflow of resources. When there is a possible or present obligation where the likelihood of outflow of resources is remote, no provision or disclosure is made. The level of judgment of the management in determining the need for quantum of provision or disclosure of contingent liability is high. This judgment is dependent upon significant assumptions and assessment which involves interpretations of various Laws, jurisprudence for which management involves the experts on the subject matter. In view of the uncertainty of the outcome, significance of amounts involved and the subjectivity involved in management’ s judgments, the matter has been considered as a Key Audit Matter for the Audit of the current year. Consequently, provisions and contingent liability disclosures may arise from direct and indirect tax proceeding, legal proceedings including regulatory and other government/ department proceedings, as well as investigations by authorities and commercial claims. The judgment and estimates of the Company could change substantially overtime as new facts emerge as each legal case progresses. Given the inherent complexity and magnitude of potential exposures and the judgment necessary to estimate the amount of provisions required or to determine required disclosures, this is a key audit matter.

• On a sample basis, performed substantive procedures on the underlying calculations supporting the amount involved recorded as provisions or disclosed as contingent liability; and • Evaluated the appropriateness and adequacy of related disclosures in the standalone financial statements in accordance with applicable accounting standards. Reviewing the outstanding litigations against the Company for consistency with the previous years, enquire and obtain explanations for movement during the year. Discussing the status of significant known actual and potential litigations with the Company’s in-house officials and other senior management personnel who have knowledge of these matters and assessing their responses. Examining the Company’s legal expenses and perusing the minutes of the board meetings, in order to ensure that all cases have been identified. Assessing the decisions and rationale for provisions held or for decisions not to record provisions or make disclosures. For those matters where management concluded that no provisions should be recorded, considered the adequacy and completeness of the Company’s disclosures.

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 Annual Report through Management Discussion and Analysis, Board’s Report including Annexures
thereto, Business Responsibility Report, Corporate Governance and Shareholder’s Information, but does not include the standalone
financial statements and our auditor’s report thereon. The Annual report. is expected to be made available to us after the date of
this auditor’s report.

Our opinion on the standalone financial statements does not cover the other information and we will 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 identified
above when it becomes available 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.

When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate
the matter to those charged with governance and describe actions applicable under the applicable laws and regulations.

Management’s and Board of Directors Responsibility for the Standalone Financial Statements

The Company’s management and Board of Directors are 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 state of affairs, profit and
total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles
generally accepted in India including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the
Companies (Indian Accounting Standards) Rules, 2015, as amended. 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, the Management and Board of Directors are 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 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 also 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 scepticism 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 the Management and Board of Directors.

• Conclude on the appropriateness of Management and 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 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 for the year ended March 31,2025 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 Section 143(3) of the Act, 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 statements.

(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, except for the matters stated in paragraph (i)(vi) below on reporting in relation to audit
trail as required under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended);

(c) The standalone financial statements dealt with by this report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified
under Section 133 of the Act.

(e) On the basis of the written representations received from the directors taken on record by the Board of Directors, none
of the directors is disqualified as on 31 March, 2025 from being appointed as a director in terms of Section 164 (2) of
the Act;

(f) The modification relating to the maintenance of accounts and other matters connected therewith in relation to audit
trail are as stated in paragraph (b) above on reporting under Section 143(3)(b) of the Act and paragraph (i)(vi) below
on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended);

(g) With respect to the adequacy of the internal financial controls with reference to the standalone financial statements of
the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B” wherein
we have expressed an unmodified opinion.

(h) As required by Section 197(16) of the Act based on our audit, 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.

(i) 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, 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 as at 31 st March, 2025 on its financial position in its
standalone financial statements. (Refer note 34 of financial statements).

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material
foreseeable losses as at 31^st March, 2025.

iii. There has been no delay in transferring amounts which were required to be transferred to the Investor Education
and Protection Fund by the Company during the year ended 31st March, 2025;

iv. (a) The Management has represented that, to the best of its knowledge and belief, as disclosed in Note 43 to the

standalone financial statements, no funds (which are material either individually or in the aggregate) 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 or entity or entity(ies), including foreign entity or
entity(ies) (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the
Intermediary shall, whether, directly or indirectly lend or invest in any 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, as disclosed in Note 43 to the
standalone financial statements no funds (which are material either individually or in the aggregate) have
been received by the Company from any person (s) or entities, 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; and

(c) Based on the audit procedures performed that have been considered reasonable and appropriate in the
circumstances, nothing has come to our notice that has caused us to believe that the representations under
sub-clause (i) and (ii) of Rule 11 (e), as provided under (a) and (b) above, contain any material misstatement.

v. The interim dividend declared and paid by the Company during the year and until the date of this audit report is in
compliance with Section 123 of the Act to the extent it applies to payment of dividend. (Refer Note 39 to the
standalone financial statements.)

vi. Based on our examination which included test checks and in accordance with requirements of the Implementation
Guide on Reporting on Audit Trail under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, the
Company in respect of financial year commencing on 1 st April, 2024, has used accounting software’s for maintaining
its books of account, which have a feature of recording audit trail (edit log) facility and the same has operated
throughout the year for all relevant transactions recorded in the respective software. Further, during the course of
our audit we did not come across any instance of audit trail feature being tampered with for the period where audit
trail is enabled and operated and for this we also relied upon the certificate of the management. Furthermore, the
audit trail has been preserved by the Company as per the statutory requirements for record retention where the
audit trail feature was enabled. Further, the daily back-up of audit trail (edit log) in respect of its accounting
software for maintenance of all accounting records, an accounting software for journal entries has been maintained
on the servers as certified by the management

2. As required by the Companies (Auditor’s Report) Order, 2020 (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.

for Madan and Associates

Chartered Accountants
Firm’s registration number: 000185N

M.K. Madan

Place : New Delhi (proprietor)

Date : 29.05-2025 Membership number: 082214

UDIN: 25082214BMLHXU9018

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Mar 31, 2024

MILKFOOD LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Milkfood Limited (“the Company”), which comprise the standalone Balance Sheet as at March 31,2024, the standalone Statement of Profit and Loss (including Other Comprehensive Income), the standalone Statement of Changes in Equity and the standalone Statement of Cash Flows for the year ended on that date, notes to the standalone financial statements and 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, as amended (“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 profit including total comprehensive income, 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 (SAs) specified under section 143(10) of the Act. 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 ethical requirements that are relevant to our audit of the standalone financial statements 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 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.

Emphasis of matter:

Attention is drawn to the Note no 3C(i) regarding Scheme of Arrangement, Note no 6(ii) regarding Trade Receivables, Note No 8(iii) regarding advance to suppliers, Note No 12(ii) regarding GST, Note No 24(ii) regarding write back of security deposits, Note No 24(iii) item of exceptional nature, Note No 35(iii) where the Company has published standalone and consolidated financial results for the year ended 31.03.2024 and we have issued the report dated 30.05.2024 in pursuance of regulation 33 of SEBI (Listing obligation and disclosure Requirements) Regulations 2015. After publishing the results, certain adjusting events have occurred, which has resulted in deletion of contingent liabilities by Rs 2582 Lakhs. In the published results, the demand of ITC of IGST of Rs 1291 Lakhs created with an equivalent amount of penalty aggregating to Rs 2582 Lakhs under sec 74(1) r.w sec 122(i)(vii) of CGST Act, 2017 in respect of Moradabad plant was disclosed as contingent liability pursuant to the order of Additional Commissioner CGST (Meerut) dtd 13.03.2024. The Company had preferred an appeal against the said demand before CGST Appeals Meerut who vide order dtd 07.06.2024, has set aside the entire demand along with penalty. Therefore, the financial statements have been amended to that extent vide resolution of the Board dtd 25.06.2024 and the amount is shown as Nil. Company is of the view that it is neither required to adopt revised Financial Results for the period ended March 31,2024 under Regulation 33 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 nor the Company is required to revise the Financial Statements for the said period under section 131 of the Companies Act, 2013. We have relied upon the Company’s view.

Our opinion is not qualified in respect of these matters.

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 for the year ended March 31,2024. 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. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.

The Key Audit Matter	How the matter was addressed in our audit
The company operates in various states within India, exposing it to a variety of different Central and State Laws, regulations and interpretations thereof. In this regulatory environment, there is an inherent risk of litigation and claims. Consequently, provisions and contingent liability disclosures may arise from direct and indirect tax proceeding, legal proceedings including regulatory and other government/ department proceedings, as well as investigations by authorities and commercial claims.	Our procedures included: Understanding the process followed by the Company for assessment and determination of the amount of provisions and contingent liabilities relating to taxation, litigations and Claims. Evaluating the design and implementation and testing operating effectiveness of key internal controls around the recognition and measurement of provisions and re-assessment of contingent liabilities Reviewing the outstanding litigations against the Company for consistency with the previous years, enquire and obtain explanations for movement during the year. Discussing the status of significant known actual and potential litigations with the Company’s in-house officials and other senior management personnel who have knowledge of these matters and assessing their responses.
Sales Tax case pending with Rajasthan Tax Board At March 31,2024, the Company’s contingent liabilities for legal matters were Rs. 78 Lakhs (refer Note 35 to the standalone financial statement) and provision for legal matters aggregated Nil. This represents tax of Rs.71 Lakhs levied u/s 47 of Rajasthan Sales Tax Act. 1994. The tax has been levied on account of non-deposit of sale tax by the consignment agent of the company. Department is of the view that liability of principal and agent is joint and several. The remaining Rs 7 Lakhs represent the claim against the company that have not been acknowledged as debt.	Perusing the latest correspondence between the Company and the various tax/legal authorities being the order passed by Appellate Authority-1 Jaipur, CTO Dated 22.12.2021 against which the company has filed a petition before the Rajasthan Tax Board Ajmer and review of correspondence with / legal opinions obtained by the management, from external legal advisors, wherever applicable, for significant matters and considering the same in evaluating the appropriateness of the Company’s provisions or disclosures on such matters. Examining the Company’s legal expenses and perusing the minutes of the board meetings, in order to ensure that all cases have been identified. Assessing the decisions and rationale for provisions held or for decisions not to record provisions or make disclosures. For those matters where management concluded that no provisions should be recorded, considered the adequacy and completeness of the Company’s disclosures.
GST Receivable The Goods and Services Department had visited the premises of the company on 24.08.2020 to verify the transactions of the company with certain dealers who had supplied the raw materials to the company. The case was subsequently transferred to CGST Commissionerate at Meerut and CGST Commissionerate at Ludhiana. The CGST Commissionerate at Meerut issued a Show-Cause Notice amounting to Rs. 25.51 crores for transactions in Moradabad Plant. During proceedings at Meerut the Additional Commissioner CGST was pleased to reduce the demand from Rs.25.51 crores to Rs.12.91 crores with an equivalent amount of penalty against which the company had filed an appeal before Commissioner CGST Appeals. The entire demand along with penalty has been set aside by the Commissioner CGST Appeals vide order dated 07.06.2024. CGST Commissionerate at Ludhiana has issued Show Cause Notice for Rs. 74.04 crores for transactions in Patiala Plant and CGST Commissionerate at Delhi issued Show cause notice of Rs.0.41 Cr and Jaipur CGST Commissionerate issued SCN of Rs.0.02 Cr. The Company is confident that the Show Cause Notices at Ludhiana, Delhi and Jaipur will also be vacated as the case is in parity with Meerut.	We have verified the show cause notices received by the company in respect of the Moradabad range and Patiala Range, the order passed by Additional Commissionerate (CGST) Meerut dtd 13.03.2024 in case of Moradabad range creating the demand of 1291 Lakhs with an equivalent amount of penalty under Section 74(1) r.w Section 122(i)(vii) of CGST Act, 2017, the appeal filed by the company against the same and the appellate order passed dtd 07.06.2024 by CGST (Appeals) Meerut set aside the above demand and penalty amount. In respect of the Show Cause Notice of Rs. 7404 Lakhs received by the company from CGST Commissionerate Ludhiana for Patiala range, we have verified the detailed reply filed by the company. We have relied upon the assertions of the management.

The judgment and estimates of the Company could change substantially overtime as new facts emerge as each legal case progresses. Given the inherent complexity and magnitude of potential exposures and the judgment necessary to estimate the amount of provisions required or to determine required disclosures, this is a key audit matter.
Scheme of Amalgamation During the year, scheme of Amalgamation between Triputi Infrastructure Pvt Ltd (Transferor Company) with Milkfood Ltd (Transferee Company) was duly approved by NCLT vide its order dated 16th April 2024 u/s 230 to 232 and other applicable provisions of the Companies Act, 2013 with effect from appointed date i.e. 01.04.2023, in pursuance of which the company is required to allot 9,66,960 equity shares in lieu of acquisition of the assets (including brand) and liabilities of the transferor company at a fair value in accordance with Ind AS 103- Business Combinations (acquisition method).	We have perused the scheme of amalgamation between the transferor company and transferee company approved by NCLT and verified that the accounting treatment of the merger of Assets and Liabilities including the Brand value has been done in accordance with Ind AS 103 - Business Combination (Acquisition Method).
Assets Held for Sale During the year, company has reclassified the assets (previously classified as held for sale) into Property Plant and equipment at a carrying amount of Rs 143 Lakhs (WDV) and has disposed off equipment of Rs 100 Lakhs. Balance equipment which is held for sale is expected to be disposed off in the next financial year.	We have verified the agreement for sale of the assets held for sale for checking the advance received against the sale, items of the assets that have been disposed off, Board resolutions approving the said sale and have verified the accounting treatment in accordance with Ind AS 105 - Non Current Assets held for sale and discontinued operations.

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 Annual Report through Management Discussion and Analysis, Board’s Report including Annexures thereto, Business Responsibility Report, Corporate Governance and Shareholder’s Information, but does not include the standalone financial statements and our auditor’s report thereon. The Annual report. is expected to be made available to us after the date of this auditor’s report.

Our opinion on the standalone financial statements does not cover the other information and we will 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 identified above when it becomes available 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.

When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and describe actions applicable under the applicable laws and regulations.

Management’s and Board of Directors Responsibility for the Standalone Financial Statements

The Company’s management and Board of Directors are 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 state of affairs, profit and total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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, the Management and Board of Directors are 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 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 also 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 scepticism 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 the Management and Board of Directors.

• Conclude on the appropriateness of Management and 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 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 for the year ended March 31,2024 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 Section 143(3) of the Act, 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.

(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 read with our remarks for certain matters in respect of audit trail as stated in paragraph 1(vi) below.

(c) The standalone balance sheet, the standalone statement of profit and loss including other comprehensive income, the standalone statement of changes in equity and the standalone statement of cash flow dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

(e) On the basis of the written representations received from the directors taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2024 from being appointed as a director in terms of Section 164 (2) of the Act;

(f) The modifications relating to the maintenance and other matters connected therewith in respect of audit trail are as stated in the paragraph 1(b) above on reporting under section 143 (3) (b) of the Act and paragraph 1 (vi) below on reporting under Rule 11 (g) of the Companies (Audit and Auditors) Rules,2014.

(g) With respect to the adequacy of the internal financial controls with reference to the standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”; and

(h) With respect to the matters to be included in the Auditor’s Report under section 197(16) of the Act, in our opinion and according to information and 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. The remuneration paid to any director is not in excess of the limit laid down under section 197 read with schedule V of the Act, The Ministry of Corporate Affairs has not prescribed other details under section 197(16) of the Act which are required to be commented upon by us.

(i) 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, 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 as at 31 st March, 2024 on its financial position in its standalone financial statements. (Refer note 35 of financial statements)

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

iii. There has been no delay in transferring amounts which were 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, no funds (which are material

either individually or in the aggregate) 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 or entity, including foreign entity (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in any 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 (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (“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 the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11 (e), as provided under (a) and (b) above, contain any material misstatement.

v. The interim dividend declared and paid by the Company during the year and until the date of this audit report is in compliance with Section 123 of the Act to the extent it applies to payment of dividend. (Refer Note 40 to the standalone financial statements.)

vi. Based on our examination which included test checks and in accordance with requirements of the Implementation Guide on Reporting on Audit Trail under Rule 11 (g) of the Companies (Audit and Auditors) Rules, 2014, the Company has used accounting software’s for maintaining its books of account, which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective software. Further, where audit trail (edit log) facility was enabled and operated throughout the year. We could not verify instance of audit trail feature being tampered with during the financial year 2023-24, during the course of audit and for this we relied upon the certificate of the management.

2. As required by the Companies (Auditor’s Report) Order, 2020 (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.

for Madan and Associates

Chartered Accountants Firm’s registration number: 000185N

M.K. Madan

Place : New Delhi (proprietor)

Date : 25-06-2024 Membership number: 082214

UDIN: 24082214BKEIWO2663

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Mar 31, 2018

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Milkfood Limited (‘the Company''), which comprise the balance sheet as at 31 March 2018, the statement of profit and loss and the 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 a summary of significant accounting policies and other explanatory information.

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 Companies Act, 2013 (“the Act”) with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules 2015. 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 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 standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 the disclosures in the financial statements. The procedures selected depend on the auditor''s 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, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, 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 on the standalone financial statements.

Opinion

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 Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2018 and its profit, total comprehensive income, the changes in equity and its cash flows for the year ended on that date.

Emphasis of Matter

Attention is drawn to the Note No. 3(v) regarding classification/depreciation on Casien plant, Note No (6)(i) & (ii) regarding trade receivables, Note No. 7(i) regarding security deposit, Note 7(ii) & 10(i) regarding amount due from employees, Note No 9(i) regarding non moving stock, Note No 13(i) regarding advance to suppliers, Note No 13(iii) regarding classification of CERs, Note No. 17(i) regarding classification of security deposit from suppliers.

Our opinion is not qualified in respect of these matters.

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 of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure A”, a statement on the matters specified in the paragraph 3 and 4 of the order.

2. As required by Section 143 (3) of the Act, 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.

(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 books of account;

(d) in our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015;

(e) on the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 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”; and

(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, 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 financial statements;

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

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

Annexure - A to the Auditors’ Report

The Annexure referred to in Independent Auditors'' Report to the members of the Company on the standalone financial statementsfor the year ended 31 March 2018, we report that:

(i) In respect of fixed assets:

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

(b) The Company has a programme of verification of fixed assets to cover all the items in a phased manner over a period of three years, which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the said programme, certain fixed assets were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company and certificate provided by the bank, the title deeds of immovable properties are held in the name of the Company. Original copy of title deed has not been produced as the same is deposited as security with bank under loan agreement as confirmed by the management & Bank.

(ii) In respect of its inventories:

(a) As explained to us, inventories have been physically verified during the year by the Management at reasonable intervals, other than stock lying with third parties where certificates confirming physical inventory have been received.

(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 granted loans to parties covered in the register maintained under section 189 of the Companies Act, 2013 (‘the Act''). Thus, paragraph 3(iii) of the Order is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, the Company has not given any loans and made any investment within the meaning of section 185 & 186 of the Act. Thus, paragraph 3(iii) of the Order is not applicable to the Company.

(v) According to the information and explanation given to us, the company has not accepted any deposits during the year. Company is of the view that provision of Section 74(1)(b) of the Act are complied with in pursuance of Rule 19 of the Acceptance of Deposits Rules, 2014. It is also confirmed by the company that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.

(vi) According to the information and explanations given to us and on the basis of our review of the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2014 prescribed by the Central Government under Section 148(1) of the Companies Act, 2013 we are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

(vii) In respect of statutory dues:

(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the company has generally been regular in depositing undisputed statutory dues, including provident Fund, Employees State insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues applicable to it with the appropriate authorities. There were no undisputed amounts payable in respect of the aforesaid statutory dues in arrears as at 31.03.2018 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess which have not been deposited as at 31.03.2018 on account of any dispute except as follows:

Sr. No.	Name of Statute	Nature of Dues	Amount Rs/lacs	Forum where dispute is pending
1	U.P. Vat Act, 2008	Regular demand for Assessment year 2015-16	3.83	Before Addl. Commissioner (Appeals), Moradabad.
2	U.P. Vat Act, 2008	Regular demand for Assessment year 2016-17	13.50	Before Addl. Commissioner (Appeals), Moradabad.

(viii) According to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government during the year.

(ix) In our opinion and according to the information and explanation given to us, the term loans have been applied by the company during the year for the purposes for which they were obtained.

(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 course of our audit.

(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not paid/provided any managerial remuneration within the meaning of section 197 read with Schedule V to the Act.

(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) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with 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.

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 Milkfood Limited (“the Company”) as of 31 March2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company''s management 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 company''s 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 Company''s 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 was established and maintained and ifsuch 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 auditor''s judgment, including the assessment of the risks of material misstatement of the 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 Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s 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 reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the 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.

Opinion

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 31 March 2018, 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.

for V. P. Jain & Associates

Chartered Accountants

Firm''s registration number: 015260N

Swati Madaan

Place : New Delhi Partner

Date : 25th May 2018 Membership number: 521697

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Mar 31, 2016

TO THE MEMBERS OF MILKFOOD LIMITED Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Milkfood Limited (‘the Company''), which comprise the balance sheet as at 31 March 2016, the statement of profit and loss and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

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 Companies Act, 2013 (“the Act”) with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 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 standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 the disclosures in the financial statements. The procedures selected depend on the auditor''s 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, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, 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 on the standalone financial statements.

Opinion

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 Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2016 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

Attention is drawn to the Note No.5.1 regarding classification of security deposits from suppliers, Note No 5.2 regarding security deposits from consignees/Advance from customers, Note No. 11.1 regarding impairment of assets, Note No. 11.4 regarding life of assets, Note No. 13.1 & 18.1 regarding amount due from employees/others, Note No. 14.3 regarding unamortized expenses, Note 15.1 regarding valuation of CER, Note No. 15.2 regarding cost incurred on Tree & Plantation in earlier year and reclassification, Note No. 18.2 regarding Carbon credit receivable, Note No. 21A regarding exceptional items, Note No. 23.1 (c) regarding salary to related party, Note No. 23.1(d) & 26.2(a) regarding reimbursement of medical/other expenses to Ex - MD and Note No. 26.2(b) regarding Carbon credit written off. Our opinion is not qualified in respect of these matters.

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 of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure A”, a statement on the matters specified in the paragraph 3 and 4 of the order.

2. As required by Section 143 (3) of the Act, 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.

(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 and the cash flow statement dealt with by this Report are in agreement with the books of account;

(d) in our opinion, the aforesaid standalone financial statements 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 31 March 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2016 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”; and

(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, 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 financial statements;

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

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

The Annexure referred to in Independent Auditors'' Report to the members of the Company on the standalone financial statements for the year ended 31 March 2016, we report that:

(i) In respect of fixed assets:

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

(b) The Company has a programme of verification of fixed assets to cover all the items in a phased manner over a period of three years, which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the said programme, certain fixed assets were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company and certificate provided by the bank, the title deeds of immovable properties are held in the name of the Company. Original copy of title deed has not been produced as the same is deposited as security with bank under loan agreement as confirmed by the management & Bank.

(ii) In respect of its inventories:

(a) As explained to us, inventories have been physically verified during the year by the Management at reasonable intervals, other than stock lying with third parties where certificates confirming physical inventory have been received.

(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 granted loans to parties covered in the register maintained under section 189 of the Companies Act, 2013 (‘the Act''). Thus, paragraph 3(iii) of the Order is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, the Company has not given any loans and made any investment within the meaning of section 185 & 186 of the Act. Thus, paragraph 3(iii) of the Order is not applicable to the Company.

(v) According to the information and explanation given to us, the company has not accepted any deposits during the year. Company is of the view that provision of Section 74(1)(b) of the Act are complied with in pursuance of Rule 19 of the Acceptance of Deposits Rules, 2014. It is also confirmed by the company that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.

(vi) According to the information and explanations given to us and on the basis of our review of the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2014 prescribed by the Central Government under Section 148(1) of the Companies Act, 2013 we are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

(vii) In respect of statutory dues:

(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the company has generally been regular in depositing undisputed statutory dues, including provident Fund, Employees State insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues applicable to it with the appropriate authorities. There were no undisputed amounts payable in respect of the aforesaid statutory dues in arrears as at 31.03.2016 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess which have not been deposited as at 31.03.2016 on account of any dispute except as follows:

Sr. No.	Name of Statute	Nature of Dues	Amount Rs/lacs	Forum where dispute is pending
1	Delhi Sales Tax Act, 1975	Regular demand 1983-84	12.22	Appeal before sales Tax Appellate Tribunal, Delhi

Sr. No.	Name of Statute	Nature of Dues	Amount Rs/lacs	Forum where dispute is pending
2	Income Tax Act, 1961	Regular demand for Assessment year 2008-09	5.08	Before ITAT-Delhi
3	U.P. Vat Act, 2008	Regular demand for Assessment year 2010-11	4.03	Before Addl. Commissioner (Appeals), Moradabad.
4	U.P. Vat Act, 2008	Regular demand for Assessment year 2011-12	1.05	Before Addl. Commissioner (Appeals), Moradabad.
5	U.P. Vat Act, 2008	Regular demand for Assessment year 2012-13	1.92	Before Addl. Commissioner (Appeals), Moradabad.
6	U.P. Vat Act, 2008	Regular demand for Assessment year 2013-14	1.30	Before Addl. Commissioner (Appeals), Moradabad.

(viii)According to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government during the year.

(ix) In our opinion and according to the information and explanation given to us, the term loans have been applied by the company during the year for the purposes for which they were obtained.

(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 course of our audit.

(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not paid/provided any managerial remuneration within the meaning of section 197 read with Schedule V to the Act.

(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)According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv)According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with 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.

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 Milkfood Limited (“the Company”) as of 31 March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company''s management 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 company''s 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 Company''s 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 was 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 auditor''s judgment, including the assessment of the risks of material misstatement of the 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 Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s 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 reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the 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.

Opinion

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 31 March 2016, 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.

f or Madan & Associates

Chartered Accountants

Firm''s registration number: 0185N

M. K. Madan

Place: New Delhi Proprietor

Date: 30th May 2016 Membership number: 082214

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Mar 31, 2015

We have audited the accompanying financial statements of MILKFOOD LIMITED ("the Company"), which comprise the Balance Sheet as at 31 March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's 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 financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 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 have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 the disclosures in the financial statements. The procedures selected depend on the auditor's 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, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, 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 on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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.

Emphasis of Matter not amounting to qualification

Attention is drawn to the Note No.5 (1) regarding classification of security deposits from suppliers; 5 (2a) & (2b) regarding security deposits from consignees/Advance from customers. Note No. 11(A)(i) regarding impairment of assets. Note no. 19 (1) regarding amount due from employees/others. Note no. 19 (2) regarding amount due from promoters. Note no. 19 (3) regarding Carbon credit receivable. Our opinion is not qualified in respect of these matters.

(a) In case of balance sheet, of the state of affairs of the company as at 31st March 2015.

(b) In the case of statement of profit & loss, of the reported profit 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, 2015 ("the Order"), issued by the Central Government in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, 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.

(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, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid financial statements 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 31 March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2015 from being appointed as a director in terms of Section 164(2) of the Act.

(f) 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, 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 financial statements by way of contingent liability.

ii. The company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the investor education and protection fund by the company.

Annexure to the Auditor's Report

(Referred to in paragraph 1 under 'Report on Other Legal & Regulatory Requirements' section of our report of even date)

(i) In respect of its Fixed Assets :

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets.

(b) The Company has a programme of verification of fixed assets to cover all the items in a phased manner over a period of three years, which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the said programme, certain fixed assets were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(ii) In respect of its inventories:

(a) As explained to us, inventories have been physically verified during the year by the Management at reasonable intervals, other than stock lying with third parties where certificates confirming physical inventory have been received.

(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 granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Act,

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services, During the course of our audit we have not observed any continuing failure to correct major weaknesses in such internal control system except that internal control procedures in the case of advances need to be strengthened. At the yearend an amount of Rs 1.45 Cr is outstanding for a period exceeding twelve months. These interest free advances to staff/others are certified by the management and good for recovery.

(v) According to the information and explanation given to us, the company has not accepted any deposits during the year. Company is of the view that provision of Section 74(1)(b) of the Act are complied with in pursuance of Rule 19 of the Acceptance of Deposits Rules, 2014. It is also confirmed by the company that no order has been passed by the Company Law Board/ RBI or any other authority.

(i) It is informed by the Company that it is not required to maintain the cost records in terms of section 148 of the Companies Act, 2013.

(ii) According to the information and explanation given to us in respect of statutory dues;

(a) The company has generally been regular in depositing undisputed statutory dues, including provident Fund, Employees State insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues applicable to it with the appropriate authorities. There were no undisputed amounts payable in respect of the aforesaid statutory dues in arrears as at 31.03.2015 for a period of more than six months from the date they became payable.

(b) There were no dues of income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess which have not been deposited as at 31.03.2015 on account of any dispute except as follows:

Sl. Name of Statute Nature of Dues Amount No. Rs./Lacs

1 Delhi Sales Act, 1975 Stock Transfer etc. 1.86 1984-85

2 Delhi sales Act, 1975 Regular demand 1983-84 11.36

3 Income Tax Act, 1961 Regular demand for 5.08 Assessment year 2008-09

4 Income Tax Act, 1961 Regular demand for 2.17 Assessment year 2007-08

5 U.P Vat Act, 2008 Regular demand for 4.03 Assessment year 2010-11

Sl. Name of Statute Forum where dispute No. is pending

1 Delhi Sales Act, 1975 Appeal before sales Tax Appellate Tribunal, Delhi

2 Delhi sales Act, 1975 Appeal before sales Tax Appellate Tribunal, Delhi

3 Income Tax Act, 1961 Before ITAT-Delhi

4 Income Tax Act, 1961 Application u/s 154 for rectification before Assessing officer.

5 U.P Vat Act, 2008 Before Addl. Commissioner (Appeals), Moradabad.

Information is provided by the Management. The relevant confirmations from the advocates are awaited.

(c) There are no amounts that are due to be transferred to the investor education and protection fund by the company in accordance with the relevant provisions of the Companies Act, 1956 ( 1 of 1956 ) and Rules made there under.

(iii) The company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(iv) In our opinion and according to the information and explanation given to us, the company has not defaulted in the repayment of dues to financial institutions and banks. The company has not issued any debentures.

(v) Company has given guarantee of Rs. 400 Lakhs in respect of Loans taken by the Body Corporate (Supplier of Milk to the company) for the loan taken by the latter from the bank. In our opinion, the terms and conditions are not prejudicial to the interest of the company.

(vi) In our opinion and according to the information and explanation given to us, the term loans have been applied by the company during the year for the purposes for which they were obtained.

(vii) To the best of our knowledge and according to the information and explanation given to us, no fraud by the company and no material fraud on the company has been noticed or reported during the year.

For MADAN & ASSOCIATES Chartered Accountants (FRN : 000185N)

(M K Madan) Place of Signature : Delhi (Proprietor) Date : 30.05.2015 (MN: 082214)

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Mar 31, 2014

We have audited the accompanying financial statements of Milkfood 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

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). 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.

Auditors'' 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 the auditor''s 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, the auditor considers 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 explanation given to us, the aforesaid 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.

Emphasis of Matter, not amounting to qualification.

Attention is drawn to the Note No.5.2(i) regarding classification of trade payables, Note No. 9(7) regarding advances received from Customers, Note No.11 A 1(i) regarding impairment of assets, Note No.11A 2 regarding reversal of depreciation, Note No.13 1, Note No.19 1 (i&ii) regarding amount due from promoters/suppliers, Note No.19 2 regarding Carbon credit receivable, Note No.21 3 (i&ii) regarding exceptional items and extra ordinary income, Note No.23 (a) regarding provision of gratuity and Leave encashment. Our opinion is not qualified in respect of these matters.

(a) in case of the balance Sheet, of the state of affairs of the company as at 31st March,2014

(b) in the case of the Statement of Profit and Loss, of the reported profit 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") issued by the Central Government in terms of Section 227(4A) 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 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 it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act.

(e) On the basis of the written representations received from the directors as on 31 March, 2014 taken on record by the Board of Directors, none of the directors is disqualified as on 31March, 2014 from being appointed as a director in terms of Section 274(1)(g) of the Act.

Annexure to Auditors'' Report

Referred to in paragraph 1 of our report of even date to the members of Milkfood Limited on the accounts as at and for the year ended March 31,2014.

1. (a) The company has maintained Fixed Assets Register containing quantitative details/location of the Assets.

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of two years, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. It has been certified by the plant heads that physical verification has been done and there are no significant discrepancies between book records and physical verification.

(c) In our opinion and according to the information and explanations given to us, substantial part of fixed assets has not been disposed of by the company during the year.

2. (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) 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 records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. The company has not taken /granted loans to parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. 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 purchase of inventory, fixed assets and sale of goods. Further, on the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither come across, nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures and adjustments thereof except that internal control procedures in the case of advances need to be strengthened. At the year end an amount of Rs. 1.63 crore is outstanding for a period exceeding twelve months. These interest free advances to staff are certified by the management and good for recoverey.

5. In our opinion and according to explanations given to us and as certified the transactions that need to be entered into the register maintained under section 301 have been so entered.

6. In our opinion and according to the information and explanations given to us, the transactions of purchases/ sales made with the parties in pursuance of contracts or arrangements entered in the registers maintained under section 301 and exceeding the value of five lakh rupees in respect of any party during the year, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

7. In our opinion and according to the information and explanations given to us and read with Note (4.4) of Note.4 the company has complied with the directives issued by the RBI and provisions of sections 58 A and 58 AA of the Companies Act, 1956 and the rules framed thereunder with regard to the deposits accepted from the public. According to information and explanations given to us no order has been passed by the National Company Law Tribunal or Company Law Board or RBI or any Court or any other Tribunal relevant to sections 58A, 58AA or the other relevant provisions of the Act.

8. Company has appointed external firm of Chartered Accountants to carry out the internal audit. In our opinion, internal audit is commensurate with the size and nature of its business.

9. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. However we have not made a detailed examination of cost records.

10. (a) According to the records of the company, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education & protection fund, employees'' state insurance, income-tax, sales-tax, wealth tax, customs duty, excise-duty, service tax, cess and other statutory dues applicable to it with the appropriate authorities except service tax of Rs 1.25 lacs which has since been deposited.

(b) According to the information and explanations given to us and the records of the company examined by us, the particulars of major dues of sales-tax, income-tax, customs duty, wealth tax, excise duty and cess as at March 31, 2014 which have not been deposited on account of a dispute, are as follows:-

Sl. Name of Statute Nature of Dues Amount No. Rs./Lacs

1 Delhi Sales Tax Act, 1975 Stock Transfer etc.1984-85 1.86

2 Income Tax act, 1961 Regular Demand under 16.17 section 147/143 (3), 2006-07

3 Income Tax Act 1961 Regular Demand u/s 143 (3) 5.08 A.Y. 2008-09

4. Income Tax act, 1961 Regular Demand for 2.17 Assessment Year 2007-08

5 U.P. Vat Act 2008 Regular Demand for 5.68 Assessment Year 2009-10

6 U.P. Vat Act 2008 Regular Demand for 4.03 Assessment Year 2010-11

Sl. Name of Statute Forum where dispute No. is pending

1 Delhi Sales Tax Act, 1975 Appeal before Sales Tax Appellate Tribunal, Delhi.

2 Income Tax act, 1961 Before CIT (Appeals) Delhi

3 Income Tax Act 1961 Before ITAT-Delhi

4. Income Tax act, 1961 Application U/S 154 for rectification before Assessing officer.

5 U.P. Vat Act 2008 Before Addl. Commissioner (Appeals), Moradabad.

6 U.P. Vat Act 2008 Before Addl. Commissioner (Appeals), Moradabad.

11. The company has NIL accumulated losses as at March 31, 2014 and it has not incurred any cash losses during the financial year ended on that date and in the immediately preceding financial year.

12. The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to chit fund/ nidhi / mutual benefit fund/ societies are not applicable to the company.

14. In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion, and 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.

16. In our opinion, and according to the information and explanations given to us, the company has applied term loans for the purposes for which the loans were obtained.

17. On overall examination of Balance Sheet, we report that funds raised on short Term basis, prima facie not been used during the year for long term investments.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. The company has not issued any debenture during the year, accordingly, no security has been created.

20. The company has not raised any money by public issues during the year.

21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

For Madan & Associates, Chartered Accountants Firm Registration No 000185N

M.K. MADAN (Proprietor) Place: New Delhi Membership Number Date :9th June'' 2014 FCA 82214

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fnancial statements of Milkfood Limited, which comprise the Balance Sheet as at March 31, 2013, and the Statement of Proft and Loss and Cash Flow Statement for the year then ended, and a summary of signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") 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 fnancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these fnancial 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 fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fnancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the fnancial 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 fnancial statements. We believe that the audit evidence we have obtained is suffcient 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 explanation given to us, the aforesaid fnancial 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.

Emphasis of matter we draw attention to the Note No.5.1 regarding trade payables /advances from customers, Note No.11A 2(i) regarding operations of Casein Plant and impairment of assets, Note No.11A(3) regarding assets held at Gurgaon, Note No.11A (5) regarding capital work in progress, Note No.11A 4 (ii) regarding addition to plant and machinery Note No.12(1) regarding investment, Note No.19 (1 to 4) on advances, our opinion is not qualifed of these matters Subject to note no 6(1) regarding provision of gratuity and leave encashment of Rs 242.36 lacs of which Rs 29.56 lacs relate to current year and

Note No 11A 4(i) regarding depreciation of Rs 84.02 lacs.

We further report that had the remarks given by us in above para regarding non provision of gratuity, leave encashment and depreciation been considered, Proft of the year would have been Rs.(46.18) Lacs ( against the reported fgure of Rs 67.40 Lacs) the reserve and surplus would have been Rs.2431.51 Lacs (against the reported fgure of Rs.2758 Lacs).non current liabilities would have been Rs.7707.80Lacs ( as against reported fgure of Rs.7575.65 Lacs current liabilities would have been Rs.9733.31 Lacs (as against reported fgure of Rs. 9623.11 Lacs ) and fxed assets would have been Rs. 9279.69 Lacs ( as against reported fgure of Rs.9363.71 Lacs).

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013;

(b) in the case of the Statement of Proft and Loss, of the reported proft of the Company for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash fows 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") issued by the Central Government in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specifed 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 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 it appears from our examination of those books except that gratuity and leave encashment are accounted for on payment basis.

(c) The Balance Sheet, the Statement of Proft and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet, the Statement of Proft and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act except that gratuity and leave encashment are accounted for on payment basis.

(e) On the basis of the written representations received from the directors as on 31 March, 2013 taken on record by the Board of Directors, none of the directors is disqualifed as on 31March, 2013 from being appointed as a director in terms of Section 274(1)(g) of the Act.

Referred to in paragraph 1 of our report of even date to the members of Milkfood Limited on the accounts as at and for the year ended March 31, 2013.

1. (a) The Company has maintained list of fxed assets acquired by it. However the same is required to be updated substantially with regard to quantitative detail/location, identifcation etc. in respect of Patiala unit.

(b) The fxed assets are physically verifed by the management according to a phased programme designed to cover all the items over a period of two years, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. It has been certifed by the plant heads that physical verifcation has been done but reconciliation of the same with book records is in progress. Adjustment entry if any shall be made on completion of exercise.

(c) In our opinion and according to the information and explanations given to us, substantial part of fxed assets has not been disposed of by the company during the year.

2. (a) The inventory has been physically verifed during the year by the management. In our opinion, the frequency of verifcation is reasonable.

(b) The procedures of physical verifcation 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 records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verifcation between the physical stocks and the book records were not material.

3. The company has not taken /granted loans to parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. 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 purchase of inventory, fxed assets and sale of goods. Further, on the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither come across, nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures and adjustments thereof except that internal control procedures in the case of advances need to be strengthened.

5. In our opinion and according to explanations given to us and as certifed the transactions that need to be entered into the register maintained under section 301 have been so entered.

6. In our opinion and according to the information and explanations given to us, the transactions of purchases/ sales made with the parties in pursuance of contracts or arrangements entered in the registers maintained under section 301 and exceeding the value of fve lakh rupees in respect of any party during the year, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

7. In our opinion and according to the information and explanations given to us and read with Note (5.3) of Note.4 the company has complied with the directives issued by the RBI and provisions of sections 58A and 58AA of the Companies Act, 1956 and the rules framed thereunder with regard to the deposits accepted from the public. According to information and explanations given to us no order has been passed by the National Company Law Tribunal or Company Law Board or RBI or any Court or any other Tribunal relevant to sections 58A, 58AA or the other relevant provisions of the Act. Excess deposit of Rs 18.89 lacs as on 31.03.2013 have since been refunded as certifed by the management.

8. It has been informed to us that Company has inbuilt mechanism of internal checks and all the Plants have been visited by Internal Chartered Accountant to verify the operational systems and for safety of its Assets and other matters required by the Management. In our opinion the Internal Audit needs to be further strengthened in terms of scope, coverage and reporting.

9. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (cost Accounting records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. However we have not made a detailed examination of cost records with a view to determine whether they are accurate or complete.

10. (a) According to the records of the company, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education & protection fund, employees'' state insurance, income-tax, sales-tax, wealth tax, customs duty, excise-duty, service tax, cess and other statutory dues applicable to it with the appropriate authorities except service tax of Rs 1.93 lacs for which company has fled an application with authorities under the Amnesty scheme.

11. The company has NIL accumulated losses as at March 31, 2013 and it has not incurred any cash losses during the fnancial year ended on that date and in the immediately preceding fnancial year.

12. The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to chit fund/ nidhi / mutual beneft fund/ societies are not applicable to the company.

14. In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion, and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or fnancial institutions during the year.

16. In our opinion, and according to the information and explanations given to us, the company has applied term loans for the purposes for which the loans were obtained.

17. On overall examination of Balance Sheet, we report that funds raised on short term basis, prima facie not been used during the year for long term investments.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. The company has not issued any debenture during the year, accordingly, no security has been created.

20. The company has not raised any money by public issues during the year.

21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

For MADAN & ASSOCIATES,

Chartered Accountants

Reg. No. 000185N

M.K. MADAN

Place: New Delhi (Proprietor)

Date: 30th May, 2013 Membership Number FCA 82214

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of Milkfood Limited as at 31st March, 2012 and also the statement of Profit and Loss and 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.

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 mis-statement. 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.

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, 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:

(i) 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.

(ii) 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 these books except that gratuity and leave encashment are accounted for on payment basis.

(iii) The Balance sheet, Profit and loss account and Cash flow statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the Balance sheet , Profit and loss account and Cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3 C) of section 211 of the Companies Act, 1956 except that gratuity and leave encashment are accounted for on payment basis.

(v) 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.

(vi) In our opinion and to the best of our information and according to the explanation given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and read with Note No.5.1 regarding advances from customers, Note No.11 A (1) regarding Title Deed of Moradabad Land, Note No.11 A (2) (1) regarding operations of Casein Plant and capitalization of interest and impairment of assets, Note No.11A(3) regarding assets held at Gurgaon, Note No.11(B)(1) regarding capital work in progress, Note No.12(1) regarding investment, regarding Note No.19 (1 to 4) on advances and subject to note No.6(1) regarding provision of gratuity amounting to Rs.196.59 lacs of which Rs. NIL relate to current year.

(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 Profit and loss account, of the loss for the year ended on that date; and

(c) in the case of the Cash flow statement, of the cash flows for the year ended on that date

give a true and fair view in conformity with the accounting principles generally accepted in India;

(d) We further report that had the remarks given by us in para (vi) above regarding non provision of gratuity been considered, the reserve and surplus would have been Rs.2493.89 lacs (against the reported figure of Rs.2690.48 Lacs). Non Current Liabilities would have been Rs.3585.93 lacs (as against reported figure of Rs.3389.34 Lacs).

Annexure to the Auditors’ Report

Referred to in paragraph 3 of our report of even date to the members of Milkfood Limited on the accounts as at and for the year ended March 31, 2012.

1. (a) The Company has maintained list of fixed assets acquired by it. However the same is required to be updated

substantially with regard to quantitative detail/location, identification etc.

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of two years, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. It has been certified by the plant heads that physical verification has been done but reconciliation of the same with book records is in progress. Adjustment entry if any shall be made on completion of exercise.

(c) In our opinion and according to the information and explanations given to us, substantial part of fixed assets has not been disposed of by the company during the year.

2. (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of

verification is reasonable.

(b) 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 records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. (a) The company has not taken /granted loans to parties covered in the register maintained under section 301 of the

Companies Act, 1956.

4. 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 purchase of inventory, fixed assets and sale of goods. Further, on the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither come across, nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures and adjustments thereof except that internal control procedures in the case of advances to staff need to be strengthened.

5. In our opinion and according to explanations given to us and as certified the transactions that need to be entered into the register maintained under section 301 have been so entered.

6. In our opinion and according to the information and explanations given to us, the transactions of purchases/ sales made with the parties in pursuance of contracts or arrangements entered in the registers maintained under section 301 and exceeding the value of five lakh rupees in respect of any party during the year, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

7. In our opinion and according to the information and explanations given to us and read with note no.4(5.3) of Note.1 the company has complied with the directives issued by the RBI and provisions of sections 58 A and 58 AA of the Companies Act, 1956 and the rules framed thereunder with regard to the deposits accepted from the public. According to information and explanations given to us no order has been passed by the National Company Law Tribunal or Company Law Board or RBI or any Court or any other Tribunal relevant to sections 58A, 58AA or the other relevant provisions of the Act.

8. It has been informed to us that Company has inbuilt mechanism of internal checks and all the Plants have been visited by Internal Chartered Accountant to verify the operational systems and for safety of its Assets and other matters required by the Management. In our opinion the Internal Audit needs to be formalized and further strengthened in terms of scope, coverage and reporting.

9. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been mainatined. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

10. (a) According to the records of the company, the company is generally regular in depositing with appropriate authorities

undisputed statutory dues including provident fund, investor education & protection fund, employees' state insurance, income-tax, sales-tax, wealth tax, customs duty, excise-duty, cess and other statutory dues applicable to it with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the company examined by us, the particulars of major dues of sales-tax, income-tax, customs duty, wealth tax, excise duty and cess as at March 31, 2012 which have not been deposited on account of a dispute, are as follows:-

Sl. Name of Statute Nature of Dues Amount Forum where dispute is pending

No. Rs./Lacs

1. Delhi Sales Tax Act, 1975 Penalty under Sales Tax (1982-83) 19.73 Appeal before Delhi High Court

2. Delhi Sales Tax Act, 1975 Disallowance of ST-1 Forms 1983-84 37.02 Appeal before Delhi High Court.

Stock Transfer etc. 1984-85 1.86 Appeal before Sales Tax Appellate Tribunal, Delhi.

3. Income Tax act, 1961 Regular Demand under section143 (3), 2007-08 8.34 Before CIT (Appeals) Delhi

4. Income Tax Act 1961 Regular Demand u/s 143 (3) A.Y. 2008-09 12.31 Before CIT (Appeals) Delhi

5. U.P. Vat Act Regular Demand for Assessment Year 2008-09 1.29 Before Addl. Commissioner (Appeals), Moradabad.

6.. Wealth tax Act 1957 Regular Demand for Assessment Year 2006-07 0.84 Before CIT (Appeals)

7. Income Tax act, 1961 Regular Demand for Assessment Year 2007-08 2.17 Application U/S 154 for rectification before

Assessing officer.

11. The company has NIL accumulated losses as at March 31, 2012 and it has not incurred any cash losses during the financial year ended on that date and in the immediately preceding financial year.

12. The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to chit fund/ nidhi / mutual benefit fund/ societies are not applicable to the company.

14. In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion, and 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.

16. In our opinion, and according to the information and explanations given to us, the company has applied term loans for the purposes for which the loans were obtained.

17. On Global examination of Balance Sheet, in our opinion, no short term funds raised have been used for long term purposes.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. The company has not issued any debenture during the year, accordingly, no securities has been created.

20. The company has not raised any money by public issues during the year.

21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

For MADAN & ASSOCIATES, Chartered Accountants Reg. No.: 000185 N M.K. MADAN

Place : New Delhi (Proprietor)

Dated : 14th August, 2012 Membership No. FCA 82214

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of Milkfood Limited as at 31st March, 2011 and also the Profit and Loss Account and 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.

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 mis-statement. 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.

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, 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:

(i) 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.

(ii) 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 these books except that gratuity and leave encashment are accounted for on payment basis.

(iii) The Balance sheet, Profit and loss account and Cash flow statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the Balance sheet, Profit and loss account and Cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3 C) of section 211 of the Companies Act, 1956 except that gratuity and leave encashment are accounted for on payment basis.

(v) On the basis of written representations received from the directors as on 31st March 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(vi) In our opinion and to the best of our information and according to the explanation given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and read with Note No.3 (Schedule 18 A) regarding depreciation on Fixed Assets. Note No.7(iii) (Schedule 18 A) regarding accounting of income, Note 12 (Schedule 18 A) regarding Managerial Remuneration. Note No. 11 (a) & (b) (Schedule 18 B) regarding assets at Gurgaon. Note No.12 (Schedule 18 B) regarding investment. Note No.14 (Schedule 18 B) regarding impairment of Assets and subject to Note No.7 of Schedule 18B regarding non provision of gratuity amounting to Rs.220.57 lacs of which Rs.35.85 lacs relate to current year.

(a) in the case of the Balance sheet, of the state of affairs of the company as at 31st March 2011;

(b) in the case of the Profit and loss account, of the loss for the year ended on that date; and

(c) in the case of the Cash flow statement, of the cash flows for the year ended on that date. give a true and fair view in conformity with the accounting principles generally accepted in India;

(d) We further report that had the remarks given by us in para (vi) above regarding non provision of gratuity been considered, the loss for the year would have been Rs.499.72 lacs (against the reported figure of Rs.463.87 Lacs), the reserve and surplus would have been Rs.2411.75 Lacs (against the reported figure of Rs.2632.32 Lacs). Net Current Assets would have been Rs.4093.79 Lacs ( as against reported figure of Rs.4314.36 Lacs).

Annexure to the Auditors' Report

Referred to in paragraph 3 of our report of even date to the members of Milkfood Limited on the accounts as at and for the year ended March 31, 2011.

1. (a) The Company has maintained list of fixed assets acquired by it. However the same is required to be updated substantially with regard to quantitative detail/location, identification etc.

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of two years, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. During the year no physical verification of the fixed assets is done.

(c) In our opinion and according to the information and explanations given to us, substantial part of fixed assets has not been disposed of by the company during the year.

2. (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) 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 records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. (a) The company has not taken /granted loans to parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. 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 purchase of inventory, fixed assets and sale of goods. Further, on the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither come across, nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures and adjustments thereof except that internal control procedures in the case of advances to staff need to be strengthened.

5. In our opinion and according to explanations given to us and as certified the transactions that need to be entered into the register maintained under section 301 have been so entered.

6. In our opinion and according to the information and explanations given to us, the transactions of purchases/ sales made with the parties in pursuance of contracts or arrangements entered in the registers maintained under section 301 and exceeding the value of five lakh rupees in respect of any party during the year, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

7. In our opinion and according to the information and explanations given to us and read with note no.5 of schedule 18B the company has complied with the directives issued by the RBI and provisions of sections 58 A and 58 AA of the Companies Act, 1956 and the rules framed thereunder with regard to the deposits accepted from the public. According to information and explanations given to us no order has been passed by the National Company Law Tribunal or Company Law Board or RBI or any Court or any other Tribunal relevant to sections 58A, 58AA or the other relevant provisions of the Act.

8. It has been informed to us that Company has inbuilt mechanism of internal checks and all the Plants have been visited by Internal Chartered Accountant to verify the operational systems and for safety of its Assets and other matters required by the Management. In our opinion the Internal Audit needs to be formalized and further strengthened in terms of scope, coverage and reporting.

9. In terms of Notification No.GSR 661(E) dated 8th October 2004 regarding Cost Accounting Records (Milk Food) (Amendment) Rules, 2004 - requirement of maintaining records as prescribed under section 209 (1) (d) of the Companies Act, 1956 has been dispensed with.

10. (a) According to the records of the company, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education & protection fund, employees' state insurance, income-tax, sales-tax, wealth tax, customs duty, excise-duty, cess and other statutory dues applicable to it with the appropriate authorities

(b) According to the information and explanations given to us and the records of the company examined by us, the particulars of major dues of sales-tax, income-tax, customs duty, wealth tax, excise duty and cess as at March 31, 2011 which have not been deposited on account of a dispute, are as follows:-

Sl. Name of Statute Nature of Dues Amount Forum where dispute No. Rs/Lacs is pending

1. Delhi Sales Tax Penalty under 19.73 Appeal before Act, 1975 Sales Tax Delhi High Court (1982-83)

2 Delhi Sales Tax Disallowance of 37.02 Appeal before Act, 1975 ST-1 Forms 1983 1.86 Delhi High Court -84/ Stock Tran -sfer etc. 1984 Appeal before -85 Sales Tax Appellate Tribunal, Delhi.

3 Income Tax Act, Regular Demand 12.59 Before CIT(Appeals) 1961 under section143 Delhi (3),2007-08

4 Income Tax Act, Regular Demand 12.31 Before CIT(Appeals) 1961 under section143 Delhi (3), A.Y. 2008-09 5 U.P. Vat Act Regular Demand 4.84 Before Addl. for Assessment Commissioner Year 2008-09 (Appeals), Moradabad.

11. The company has NIL accumulated losses as at March 31, 2011 and it has not incurred any cash losses during the financial year ended on that date and in the immediately preceding financial year.

12. The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to chit fund/ nidhi / mutual benefit fund/ societies are not applicable to the company.

14. In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion, and 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.

16. In our opinion, and according to the information and explanations given to us, the company has applied term loans for the purposes for which the loans were obtained.

17. On Global examination of Balance Sheet, in our opinion, no short term funds raised have been used for long term purposes.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. The company has not issued any debenture during the year, accordingly, no securities has been created.

20. The company has not raised any money by public issues during the year.

21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

For Madan & Associates, Chartered Accountants Reg. No.: 000185 N



M.K. MADAN (Proprietor) Membership No. FCA 82214

New Delhi Dated : 26th August, 2011

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Milkfood Limited as at 31st March, 2010 and also the Profit and Loss Account and the Cash Flow Statement 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 mis-statement. 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.

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, 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:

(i) 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.

(ii) 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 these books except that gratuity and leave encashment are accounted for on payment basis.

(iii) The Balance sheet, Profit and loss account and Cash flow statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the Balance sheet, Profit and loss account 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 except that gratuity and leave encashment are accounted for on payment basis.

(v) On the basis of written representations received from the directors as on 31st March 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(vi) In our opinion and to the best of our information and according to the explanation given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and read with Note 7 regarding accounting of income, 11(a) & (b) regarding assets at Gurgaon, Note No. 12 regarding investment, Note 14 regarding impairment of Assets subject to note No.8 of Schedule 18B regarding non provision of gratuity amounting to Rs.184.72 lacs of which Rs.NIL relate to current year and Note No.12 regarding Managerial Remuneration of Schedule 18A.

(a) in the case of the Balance sheet, of the state of affairs of the company as at 31st March 2010;

(b) in the case of the Profit and loss account, of the loss for the year ended on that date; and

(c) in the case of the Cash flow statement, of the cash flows for the year ended on that date. give a true and fair view in conformity with the accounting principles generally accepted in India;

(d) We further report that had the remarks given by us in para (vi) above regarding non provision of gratuity has been considered, the reserve surplus would have been Rs. 2964.29 lacs (against the reported figure ofRs. 3149.01 lacs) Net Current Assets would have been Rs. 2121.59 lacs (as against reported figure of Rs. 2306.31 lacs).

Annexure to the Auditors Report Referred to in paragraph 3 of our report of even date to the members of Milkfood Limited on the accounts as at and for the year ended March 31, 2010.

1. (a) The Company has maintained list of fixed assets acquired by it. However the same is required to be updated substantially with regard to quantitative detail/location, identification etc.

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of two years, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. During the year no physical verification of the fixed assets is done.

(c) In our opinion and according to the information and explanations given to us, substantial part of fixed assets has not been disposed of by the company during the year.

2. (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) 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 records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. (a) The company has not granted loans to companies covered in the register maintained under section 301 of the Companies Act, 1956. However, company has incurred expenses on behalf of the subsidiary company. Company has granted loans to its wholly owned subsidiary for setting up IT Park and amount outstanding at the year end is Rs.342.12lacs.

The Company has taken in previous year loans from companies/parties, covered in the register maintained under section 301 of the Companies Act, 1956. The amount outstanding at the year end is Rs. 600 lacs.

(b) In our opinion the terms and conditions of such loans are not prima facie prejudicial to the interest of the company. The other terms of repayment in respect of the loans taken/ given are not stipulated.

4. 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 purchase of inventory, fixed assets and sale of goods. Further, on the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither come across, nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures and adjustments thereof except that internal control procedures in the case of advances to staff need to be strengthened.

5. In our opinion and according to explanations given to us and as certified the transactions that need to be entered into the register maintained under section 301 have been so entered.

6. In our opinion and according to the information and explanations given to us and the transactions of purchases/ sales made in pursuance of contracts or arrangements entered in the registers maintained under section 301 and exceeding the value of five lakh rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time. With regard to financial arrangements processing charges/ other contingencies we are informed that these all represent specific and specialized services for which market prices are not available. However considering the cost and benefits available & other factors payments made/ received are reasonable.

7. In our opinion and according to the information and explanations given to us and read with note no.5 of schedule 18B the company has complied with the directives issued by the RBI and provisions of sections 58A and 58AA of the Companies Act, 1956 and the rules framed thereunder with regard to the deposits accepted from the public. According to information and explanations given to us no order has been passed by the National Company Law Tribunal or Company Law Board or RBI or any Court or any other Tribunal relevant to sections 58A, 58AA or the other relevant provisions of the Act.

8. It has been informed to us that Company has inbuilt mechanism of internal checks and all the Plants have been visited by Internal Chartered Accountant to verify the operational systems and for safety of its Assets and other matters required by the Management. In our opinion the Internal Audit needs to be formalized and further strengthened in terms of scope, coverage and reporting.

9. In terms of Notification No.GSR 661 (E) dated 8th October 2004 regarding Cost Accounting Records (Milk Food) (Amendment) Rules, 2004 - requirement of maintaining records as prescribed under section 209 (1) (d) of the Companies Act, 1956 has been dispensed with.

10. (a) According to the records of the company, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education & protection fund, employees state insurance, income-tax, sales-tax, wealth tax, customs duty, excise-duty, cess and other statutory dues applicable to it with the appropriate authorities except that TDS on perquisits value in respect of interest free loans to employees has been made.

(b) According to the information and explanations given to us and the records of the company examined by us the • particulars of major dues of sales-tax, income-tax, customs duty, wealth tax, excise duty and cess as at March 31, 2010 which have not been deposited on account of a dispute, are as follows:-

Sl. Name of Statute Nature of Dues Amount Forum where disputeis pending No. Rs./Lacs

1. Delhi Sales Tax Act, 1975 Penalty under Sales Tax (1982-83) 36.82 Appeal before Sales Tax Appellate Tribunal, Delhi.

2 Delhi Sales Tax Act, 1975 Disallowance of ST-1 Forms 1983-84/ 55.53 Appeal before Sales Tax Appellate Tribunal, Delhi. Stock Transfer etc. 1983-84 1.86 -do-

3 Income Tax Act, 1961 Penalty u/s 271(1) (c) Assessment Year 2.75 Before CIT (Appeal) 1992-93

4 Income Tax Act, 1961 Regular Demand under section143 (3), 8.33 Before CIT (A) 2007-08

5 Delhi Sales Tax Act 1975 Under Sales Tax Act 0.28 Before D.C. Sales Tax

11. The company has NIL accumulated losses as at March 31, 2010 and it has not incurred any cash losses during the financial year ended in that date and in the immediately preceding financial year.

12. The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to chit fund/ nidhi / mutual benefit fund/ societies are not applicable to the company.

14. In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion, and 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.

16. In our opinion, and according to the information and explanations given to us, the company has applied term loans for the purposes for which the loans were obtained.

17. During the year no Short Term funds have been raised.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. The company has not issued any debenture during the year, accordingly, no securities has been created.

20. The company has not raised any money by public issues during the year.

21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

For R.N. BAHL & CO. Chartered Accountants

R.N. Bahl New Delhi (Partner)

Dated : 11 th August, 2010 Membership No. FCA 2277