Auditor Report of Prima Agro Ltd.

Mar 31, 2024

We have audited the accompanying Standalone financial statements of PRIMA AGRO LTD (“the
Company”), which comprise the Balance Sheet as at March 31, 2024, the Statement of Profit and Loss
(including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of
Cash Flows for the year ended on that date, and a summary of the significant accounting policies and
other explanatory information (here in after referred to as “the Standalone Financial Statements”).

In our opinion and to the best of our information and according to the explanations given to us, the
aforesaid Standalone financial statements give the information required by the Companies Act, 2013
(“the Act”) in the manner so required and give a true and fair view in conformity with the Indian
Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian
Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally
accepted in India, of the state of affairs of the Company as at March 31, 2024, the profit and 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 specified under section 143 (10) of the Act (SAs). Our responsibilities under those Standards
are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial
Statements section of our report. We are independent of the Company in accordance with the Code
of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the
independence requirements that are relevant to our audit of the Standalone financial statements
under the provisions of the Act and the Rules made 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 paragraph

We draw your attention to Note-13 & Note-14 of the financial statements, which states that total
outstanding dues of micro, small and medium enterprises and total outstanding dues of trade payables
other than micro, small and medium enterprises are not separately disclosed since no intimations has
been received from the vendors in this regard

We draw your attention to Note-12 and Note-20 of financial statements and “Key accounting
judgments, Estimates and assumptions” in Significant accounting policies & Notes forming part of
accounts, which states that computation as per Ind AS 19 “Employee Benefits” has not been applied for
accounting for gratuity and Ex-gratia. However, the provision for gratuity has been made and
accounted for the year on the basis of the service tenure of the employees and the provision for ex-
gratia has been accounted for the year as per the company''s own computation.

We draw your attention to Note-11(b) of financial statements and Note-24(2.3) (e) in Significant
accounting policies & Notes forming part of accounts, which states that the preference shares are not
measured at amortized cost as required by Ind AS 109 and outstanding financial liability with respect
to cumulative preference dividend is not recognized in the financial statements. The financial impact
of the same has not been quantified. Further, the company paid preference share dividend during the
year for 4 previous years totaling Rs. 2,40,00,000/- and the same was disclosed under exceptional
items in the financial statements.

Our opinion is not modified 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 of the current period. These matters were
addressed in the context of our audit of the Standalone financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters. We
have determined that there are no key audit matters to communicate in our report.

Other Information

The Companies Management and Board of Directors are responsible for the other information.
The other Information comprises the information included in the company''s annual report, but
does not include the Standalone financial statements and our auditor''s report thereon.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act
with respect to the preparation of these Standalone financial statements that give a true and fair
view of the financial position, financial performance, total comprehensive income, changes in equity
and cash flows of the Company in accordance with the Ind AS and other accounting principles
generally accepted in India. This responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for safe guarding the assets of the Company
and for preventing and detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that are reasonable and prudent;
and design, implementation and maintenance of adequate internal financial controls, that were
operating effectively for ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the Standalone financial statements that give a true
and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone financial statements, management is responsible for assessing the
Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone financial
statements as a whole are free from material misstatement, whether due to fraud or error, and
to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with SAs will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these Standalone financial
statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain
professional skepticism throughout the audit.

We also:

• Identify and assess the risks of material misstatement of the Standalone financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit in order to design
audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the
Act, we are also responsible for expressing our opinion on whether the Company has
adequate internal financial controls system in place and the operating effectiveness of such
controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company''s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor''s report to the related disclosures in the Standalone financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor''s report. However, future events or conditions
may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the Standalone financial statements,
including the disclosures, and whether the Standalone financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.

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

We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and
where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the Standalone financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor''s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 (“the Order”) issued by the
Central Government in terms of Section 143(11) of the Act, we give in the “Annexure A” a
statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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 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 flows 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 Ind AS
specified under Section 133 ofthe Act; except to the extent stated in the Emphasis of matter
paragraph

e) On the basis of the written representations received from the directors as on

31 March 2024 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; and

f) With respect to the adequacy of the internal financial controls with reference to Standalone
financial statements of the Company and the operating effectiveness of such controls, refer
to our separate Report in “Annexure B”.

3. 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 March 2024 on its
financial position in its Standalone financial statements - Refer Note 35 of Significant
accounting policies & Notes forming part of accounts to the Standalone financial statements;

ii. The Company did not have any long-term contracts for which there were any material
foreseeable losses. The Company has made provision, as required under the applicable law
or accounting standards, for material foreseeable losses on derivative contracts.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund by the Company; and

iv.

a. The management has represented that, to the best of its knowledge and belief, other than as
disclosed in the notes to the accounts, no funds have been advanced or loaned or invested
(either from borrowed funds or share premium or any other sources or kind of funds) by the
company to or in any other person(s) or entity(ies), including foreign entities
(“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that
the Intermediary shall, whether, directly or indirectly lend or invest in other persons or
entities identified in any manner whatsoever by or on behalf of the company (“Ultimate
Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries;

b. The management has represented, that, to the best of its knowledge and belief, other than as
disclosed in the notes to the accounts, no funds have been received by the company from any
person(s) or entity(ies), 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 considered reasonable and appropriate in the circumstances,
nothing has come to the notice that has caused to believe that the representations under sub¬
clause (a) and (b) contain any material misstatement.

v. The company has declared and paid dividend on non-convertible cumulative redeemable
preference shares during the year out of profits and reserves. The dividend declared is in
accordance with section 123 of the Act to the extent it applies to declaration of dividend.

vi. Based on the test check examination carried out during the course of audit, it was observed

that the company has implemented the feature of recording audit trail (edit log) facility with
effect from July 2023, and the same has operated for the year for all relevant transactions
recorded in the software''s. Further, during the course of our audit we did not come across
any instance of the audit trail feature being tampered with since its implementation.

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

4. With respect to the matter to be included in the Auditor''s Report under Section 197(16) of
the Act:

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

UDIN: 24228064BJZYHR6331
For G R A N D M A R K & ASSOCIATES
CHARTERED ACCOUNTANTS
FRN:011317N

CA. BIBIN SAJAN FCA

Place : Cochin PARTNER

Date : 30-05-2024 Membership No: 228064

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Mar 31, 2015

We have audited the accompanying financial statements of M/s. PRIMA AGRO LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March 2015, the statement of Profit and Loss, 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 Financial Statements

The Company's Board of Directors is responsible for the matters 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, 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 provision of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provision of the Act and the Rules made there under. 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 disclosures i n 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 true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by 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 qualified audit opinion on the financial statements

Basis for Qualified Opinion

During the year, the company granted loans and advances to group concerns amounting to Rs 2,05,34,200.00 which is not in the ordinary business transaction. Interest has not been accounted in the books of accounts relating to such loans/advances.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the matter described in the Basis for Qualified Opinion paragraph,the aforesaid financial statements give the information required by the Act in the manner so required and give true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 3 1, 2015;

b) In the case of the statement of Profit and Loss, of the profit 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable

2. As required by Section 143 (3) of the Act, we report, to the extent applicable, that:

a) We have sought and except for the matters described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) Except for the matters described in the Basis for Qualified Opinion paragraph above, in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books

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

d) Except for the matters described in the Basis for Qualified Opinion paragraph, 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) The matter described in the Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the company.

f) On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of Section 164 (2) of the Act.

ANNEXURE TO AUDITOR'S REPORT

(Referred to our report of even date)

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

b) All the assets have not been physical ly verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

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

b) The procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company is maintaining proper records of inventory and the stock as disclosed in the financial statements are valued and certified by the management. The discrepancies noticed on verification between the physical stocks and book records were not material.

iii. The Company has granted the following loans to companies, firms and other parties covered in the register maintained u/s.189 under the Companies Act

Sl. Name of the Company/Firm or Loan Granted Relationship No Other Parties during the year

1. Prima Industries Ltd Associate 1,28,79,106.00

2. Prima Beverages (P) Ltd. Associate 24,93,106.00

3. Ayyappa Roller Flour Mills Ltd Associate 48,49,875.00

4. PAPL Exim India Ltd Associate 3,12,113.00

Sl. Name of the Company/Firm or Year end Balance No Other Parties

1. Prima Industries Ltd 66,39,770.00

2. Prima Beverages (P) Ltd. 2,17,936.40

3. Ayyappa Roller Flour Mills Ltd 77,87,111.08

4. PAPL Exim India Ltd 1,06,979.80



a) We are unable to comment on the rate of interest and other terms and conditions on which loans have been taken from/granted to companies, firm or other parties listed in the register maintained u/s 189 of the Companies Act which are prima facie, prejudicial to the interest of the company since the terms are not defined.

b) The Company is not paying any interest on such loans and there is no stipulation as to repayment of principal in respect of loans granted to parties listed in the register maintained under Section 189 of the Companies Act, hence we are unable to comment on the regularity of repayment of principal in respect of the said loans.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system of the company.

v. The company has not accepted any deposit from the public hence the directions issued by the Reserve Bank of India and provisions of Section 73 to 76 or any other relevant provisions of the Companies Act and the Rules framed thereunder are not applicable to this company.

vi. The Central Government has not prescribed maintenance of cost records under sub-section (1) of section 148 of the Companies Act.

vii. a) According to the information and explanations furnished to us, during the year, 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 material statutory dues applicable to it have been deposited with appropriate authorities and there has been no serious delays.

b) According to the information and explanation given to us, there are no dues of sale tax, income tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute.

c) According to the records of the company, there are no amounts that are due to be transferred to the Investor Education and Protection Fund in accordance with the provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder.

viii. In our opinion, the company has accumulated losses to the extent of Rs. 19, 44, 23,896.29 /- and Rs.19, 79, 15,767.29 in previous year. The accumulated losses of the company are more than fifty per cent of its paid up capital and free reserves. However the company has not reported cash loss during the current year and in previous year.

ix. In our opinion and according to the information and explanation given to us, the company during the year has not defaulted in repayment of dues to the Financial Institutions.

x. In our opinion, the company has not given guarantees for loans taken by others from banks or financial institutions.

xi. In our opinion, the term loans have been applied for the purpose for which they were raised.

xii. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit .

For VIJAYAKUMAR & EASWARAN CHARTERED ACCOUNTANTS FRN 004703S

Place: COCHIN Date: 23/05/2015 CA. K. EASWARAN PILLAI, FCA SENIOR PARTNER Membership No: 022062

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Mar 31, 2014

We have audited the attached Balance Sheet of M/s. PRIMA AGRO LIMITED, as at 31st March, 2014 the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto 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. 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 subsection (3C) of section 211 of the Companies Act, 1956 ("the act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosure in the financial statement. The procedure selected depends on the auditor'' s judgment, including the assessment of risks of material misstatement of the f inancial 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. 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 suf f icient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the f inancial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2014;

b) In the case of the Profit and Loss Account, of the profit 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.

Other Matter

The company has paid Directors remuneration of Rs. 9,00,000/- during the year, which is in excess of the limit specified under the provisions of the Act. Our opinion is not qualified in respect of this matter.

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 of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books

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

e) On the basis of written representations received from the directors as on March 31,2014, and taken on record by the Board of Directors, none of the directors is disqualif ied as on March 31,2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO AUDITOR''S REPORT

(Referred to in paragraph 3 of our report of even date)

i.

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

b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verif ication.

c) During the year, the company has not disposed off a major part of the plant and machinery. Accordingly the provisions of clause 4(i) (c) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

ii.

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

b) The procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company is maintaining proper records of inventory and the stock as disclosed in the f inancial statements are valued and certified by the management. The discrepancies noticed on verification between the physical stocks and book records were not material.

iii.

a) The Company has granted the following loans to companies, firms and other parties covered in the register maintained u/s.301 under the Companies Act, 1956.

SI. Name of the Relationship Loan Granted Year end No Company/Firm or during the Balance Other Parties year

1. Prima Industries Ltd Associate 1,27,68,075.68 5,67,686.08

2. Prima Beverages Associate 38,65,992.00 10,03,595.40 (P) Ltd.

5. Ayyappa Roller Flour Associate 7,34,71,736.00 30,77,236.08 Mills Ltd

6. Ayyappa Real Estate Associate 2,20,000.00 20,000.00 (P) Ltd

7. PAPL Exim India Ltd Associate 6,23,800.00 63,800.00

8. Prima Credits Ltd Associate 20,000.00 20,000.00

9. Prima Alloys (P) Ltd Associate 20,000.00 2,20,000.00

b)The following are the particulars of loans taken by the company from companies, and other parties covered in the register maintained u/s301of the Companies Act, 1956

SI. Name of the Party Relationship with Loan taken Year end No the Company during the year Balance

1. Sanjay Gupta Managing Director 38,83,250.00 Nil

2. Swati Gupta Relative of Managing 2,84,715.00 1,91,000.00 Director

3. Universal Trading Associate 1,37,338.20 1,50,000.00 Company

c) We are unable to comment on the rate of interest and other terms and conditions on which loans have been taken from/granted to companies, firm or other parties listed in the register maintained u/s 301 of the Companies Act, 1956 which are prima facie, prejudicial to the interest of the company since the terms are not defined.

d) The Company is not receiving/paying any interest on such loans and there is no stipulation as to repayment of principal in respect of loans granted to/taken from parties listed in the register maintained under Section 301 of the Companies Act, 1956, hence we are unable to comment on the regularity of repayment of principal in respect of the said loans.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system of the company.

v. a) In our opinion and according to the information and explanations given to us, the particulars

of all contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements entered in the register maintained u/s 301 of the Companies Act, 1956 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.

vi. The company has not accepted any deposit from the public hence the directions issued by the Reserve Bank of India and provisions of Section 58A and 58AA and other relevant provisions of the Companies Act, 1956 and the Rules formed thereunder are not applicable to this company.

vii. The company does not have adequate internal audit system commensurate with the size and nature of its business.

viii. The Central Government has not prescribed maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 for the products of the Company.

ix.

a) According to the information and explanations furnished to us, during the year, 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 material statutory dues applicable to it have been deposited with appropriate authorities and there has been no serious delays.

Further, since the Central Government has till date not prescribed the amount of cess payable u/s 441A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

b) According to the information and explanation given to us, there are no dues of sale tax, income tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute.

x. In our opinion, the company has accumulated losses to the extent of Rs. 19,79,15,767.29/- and Rs 20,05, 20,908.07 in previous year. The accumulated losses of the company are more than fifty per cent of its paid up capital and free reserves. However the company has not reported cash loss during the current year and in previous year.

xi. In our opinion and according to the information and explanation given to us, the company during the year has not defaulted in repayment of dues to the Financial Institutions.

xii. According to the information and explanations furnished to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly the provisions of clause 4(xii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

xiii. In our opinion, the company is not a chit fund or a Nidhi/ mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

xix.In our opinion the company is not dealing in shares, securities, debentures and other investments. Accordingly the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

xv. In our opinion, the company has not given guarantees for loans taken by others from banks or financial institutions.

xvi. In our opinion, the term loans have been applied for the purpose for which they were raised.

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

xviii. According to the information and explanation given to us, the company has made following preferential allotment of preference shares to the parties & companies covered in the Register maintained u/s. 301 of the Act. No. of Preference shares Name of the Party Relationship with the issued Company

Ayyappa Roller Flour Associate 60,00,000.00 Mills Ltd

In our opinion, the prices at which such preference shares have been issued are not prejudicial to the interest of the company. xix. The company has not issued any debentures and hence the provisions of clause 4(xix) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

xx. The company has not raised any money from public issues during the year. Accordingly the provisions of clause 4(xx) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

xxi. According to the inf ormation and explanations given to us, no f raud on or by the company has been noticed or reported during the course of our audit.

For VIJAYAKUMAR & EASWARAN CHARTERED ACCOUNTANTS FRN 004703S Sd/- CA. K. EASWARAN PILLAI, FCA SENIOR PARTNER Place: COCHIN Membership No: 022062 Date: 25/06/2014

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Mar 31, 2013

Report on the Financial Statements

We have audited the attached Balance Sheet of M/s. PRIMA AGRO LIMITED, as at 31st March, 2013 the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto 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. 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 subsection (3C) of section 211 of the Companies Act, 1956 ("the act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosure in the financial statement. The procedure selected depends on the auditor''s judgment, including the assessment of 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. 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.

Basis for Qualified Opinion

Non – current Investments as per Note 10 consist of investment in shares of Prima Industries Ltd valued at cost amounting to Rs. 1,01,95,280/-, as on 31st March, 2013, it has been identified that there is a decline in the value of investment which is not temporary in nature. The standards laid down by AS–13 on ''Accounting for Investments'' provides that where the decline in the value of investment is not temporary in nature, then the carrying amount of investments should be reduced by the amount of such decline and the resultant reduction should be charged to the Profit & Loss A/c. the company has not charged such decline to the Profit and Loss A/c.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

b) In the case of the Profit and Loss Account, of the profit 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.

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 of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books

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

d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO AUDITOR''S REPORT

(Referred to in paragraph 3 of our report of even date) i.

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

b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

c) During the year, the company has not disposed off a major part of the plant and machinery. Accordingly the provisions of clause 4(i)(c) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

ii.

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

b) The procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company is maintaining proper records of inventory and the stock as disclosed in the financial statements are valued and certified by the management. The discrepancies noticed on verification between the physical stocks and book records were not material.

iii. a) The Company has granted the following loans to companies, firms and other parties covered in the register maintained u/s.301 under the Companies Act, 1956.

Sl. No Name of the Company Relationship Year end /Firm orOther Parties Balance

1. Prima Industries Ltd Associate 7,79,086

2. Prima Beverage (P) Ltd. Associate 7,02,603

3. Sahuwala wax & Chemicals Associate 99,468

4. Oil/Filling Division Associate 2,78,554

b) The following are the particulars of loans taken by the company from companies, and other parties covered in theregister maintained u/s.301 under the Companies Act, 1956.

Sl. No Name of the Party Relationship Yearend with the Company Balance

1. Sanjay Gupta Managing Director NIL

2. Swati Gupta Relative of Managing Director 67,000.00

c) We are unable to comment on the rate of interest and other terms and conditions on which loans have been taken from/granted to companies, firm or other parties listed in the register maintained u/s 301 of the Companies Act, 1956 which are prima facie, prejudicial to the interest of the company since the terms are not defined.

d) The Company is not receiving/paying any interest on such loans and there is no stipulation as to repayment of principal in respect of loans granted to/taken from parties listed in the register maintained under Section 301 of the Companies Act, 1956, hence we are unable to comment on the regularity of repayment of principal in respect of the said loans.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system of the company.

v. a) In our opinion and according to the information and explanations given to us, the particulars of all contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements entered in the register maintained u/s 301 of the Companies Act, 1956 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.

vi. The company has not accepted any deposit from the public hence the directions issued by the Reserve Bank of India and provisions of Section 58A and 58AA and other relevant provisions of the Companies Act, 1956 and the Rules formed thereunder are not applicable to this company.

vii.The company does not have adequate internal audit system commensurate with the size and nature of its business.

viii.The Central Government has not prescribed maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 for the products of the Company.

ix.

a) According to the information and explanations furnished to us, during the year, 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 material statutory dues applicable to it have been deposited with appropriate authorities and there has been no serious delays.

Further, since the Central Government has till date not prescribed the amount of cess payable u/s 441A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

b) According to the information and explanation given to us, there are no dues of sale tax, income tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute.

x. In our opinion, the company has accumulated losses to the extent of Rs. 20, 05, 20,908.07/- and Rs.19, 75, 95,483 in previous year. The accumulated losses of the company are more than fifty per cent of its paid up capital and free reserves. However the company has not reported cash loss during the current year and in previous year.

xi. In our opinion and according to the information and explanation given to us, the company during the year has not defaulted in repayment of dues to the ICICI indica car loan A/c.

xii. According to the information and explanations furnished to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly the provisions of clause 4(xii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

xiii. In our opinion, the company is not a chit fund or a Nidhi/ mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

xiv. In our opinion the company is not dealing in shares, securities, debentures and other investments. Accordingly the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

xv. In our opinion, the company has not given guarantees for loans taken by others from banks or financial institutions.

xvi. In our opinion, the term loans have been applied for the purpose for which they were raised.

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

xviii.The company has not made any preferential allotment of shares to parties & companies covered in the Register maintained u/s. 301 of the Act. Accordingly the provisions of clause 4 (xviii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

xix. The company has not issued any debentures and hence the provisions of clause 4(xix) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

xx. The company has not raised any money from public issues during the year. Accordingly the provisions of clause 4(xx) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

xxi. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.



For VIJAYAKUMAR & EASWARAN, CHARTERED ACCOUNTANTS, FRN 004703S

CA K. EASWARAN PILLAI, F.C.A. SENIOR PARTNER Place : COCHIN Membership No: 022062

Date : 25/05/2013

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Mar 31, 2012

We have audited the attached Balance Sheet of M/s. PRIMA AGRO LIMITED, as at 31st March, 2012 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.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to above, we report that:

(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 those books;

(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 subsection

(3C) of section 211 of the Companies Act, 1956;

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 31 st 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;

Non-Current Investments as per Note 10 consist of investment in shares of Prima Industries Ltd valued at cost amounting to f 1,01,95,280/-. As on 31st March, 2012, it has been identified that there is a decline in the value of investment which is not temporary in nature. The standards laid down by AS -13 on 'Accounting for Investments' provides that where the decline in the value of investment is not temporary in nature, then the carrying amount of investments should be reduced by the amount of such decline and the resultant reduction should be charged to the Profit & Loss A/c. The company has not charged such decline to the Profit and Loss A/c.

Secured loans shown in Note 3 of the Balance sheet includes a Cash Credit of f 11,88,93,444/- lying with State Bank of India. It is also disclosed that this cash credit is secured by first charge on the fixed assets of AFD & by hypothecation of inventories and book debts and a second charge on the fixed assets of FMD. The value of stock as certified by the management is f 5,27,277/- and the value of Sundry Debtors given in Note 14 which is considered good is nil. The secured value of current assets on which the loan is shown as secured comes to only f 5,27,277/-, which does not cover the loan outstanding. The realizable value of security under which this loan has been disclosed is subject to the point discussed above.

Subject to the above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956,in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012; and

(b) in the case of the Profit and Loss Account, of the profit for the year ended that date.

(c) in the case of the Cash Flow Statement, of the cash flows for the period ended on that date.

ANNEXURE TO AUDITOR'S REPORT

(Referred to in paragraph 3 of our report of even date)

i.

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

b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets, No material discrepancies were noticed on such verification.

c) During the year, the company has not disposed off a major part of the plant and machinery. Accordingly the provisions of clause 4(i)(c) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

ii.

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

b) The procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company is maintaining proper records of inventory and the stock as disclosed in the financial statements are valued and certified by the management. The discrepancies noticed on verification between the physical stocks and book records were not material.

iii.

a) The Company has granted the following loans to companies, firms and other parties covered in the register maintained u/s.301 under the Companies Act 1956.

SI. No Name of the Company Relationship Year end /Firm orOther Parties Balance

1. Prima Industries Ltd Associate 3,82,95,900

2. Prima Beverages (P) Ltd. Associate 30,87,778

b) The following are the particulars of loans taken by the company from companies, and other parties covered in the register maintained u/s.301 under the Companies Act, 1956

SI. No Name of the Party Relationship Yearend with the Company Balance

1. Sanjay Gupta Managing Director 45,12,717

2. Swati Gupta Relative of Managing Director 253,709

c) In our opinion, the rate of interest and the terms and conditions on which loans have been taken from/ granted to companies, other parties listed in register maintained u/s. 301 of the Companies Act, 1956 are not able to report, prima facie, prejudicial to the interest of the Company, since the terms are not defined.

d) The Company is not receiving/paying any interest on such loans and there is no stipulation as to repayment of principal in respect of loans granted to/taken from parties listed in the register maintained under Section 301 of the Companies Act 1956, hence we ore unable to comment on the regularity of repayment of principal in respect of the said loans.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our- audit, we have not observed any continuing failure to correct major weaknesses in the internal control system of the company.

v.

a) In our opinion and according to the information and explanations given to us, the particulars of all contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements entered in the register maintained u/s 301 of the Companies Act, 1956 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.

vi. The company has not accepted any deposit from the public hence the directions issued by the Reserve Bank of India and provisions of Section 58A and 58AA and other relevant provisions of the Companies Act, 1956 and the Rules formed thereunder are not applicable to this company.

vii. The company does not have adequate internal audit system commensurate with the size and nature of its business.

viii. The Central Government has not prescribed maintenance of cost records under Section 209(1) (d) of the Companies Act 1956 for the products of the Company.

ix.

a) According to the information and explanations furnished to us, during the year, 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 material statutory dues applicable to it have been deposited with appropriate authorities and there has been no serious delays.

Further, since the Central Government has till date not prescribed the amount of cess payable u/s 441A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

b) According to the information and explanation given to us, there are no dues of sale tax, income tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute.

x. In our opinion, the company has accumulated losses to the extent of Rs. 19,75,95,483/-. The accumulated losses of the company are more than fifty per cent of its paid up capital and free reserves.

xi. In our opinion and according to the information and explanations given to us, the company during the year has defaulted in repayment of dues to the following banks and financial institutions:

Bank/ Financial Institution Balance Outstanding as at 31 March 2011

1. State Bank of India 11,88,93,444

xii, According to the information and explanations furnished to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities/Accordingly the provisions of clause 4(xii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

xiii. In our opinion, the company is not a chit fund or a Nidhi/ mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order. 2003 are not applicable to the company.

xiv. In our opinion the company is not dealing in shares, securities, debentures and other investments. Accordingly the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

xv. In our opinion, the company has not given guarantees for loans taken by others from banks or financial institutions.

xvi. In our opinion, the term loans have been applied for the purpose for which they were raised.

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

xviii. The company has not made any preferential allotment of shares to parties & companies covered in the Register maintained u/s. 301 of the Act. Accordingly the provisions of clause 4 (xviii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

xix. The company has not issued any debentures and hence the provisions of clause 4(xix) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

xx. The company has not raised any money from public issues during the year. Accordingly the provisions of clause 4(xx) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

xxi. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For VIJAYAKUMAR & EASWARAN

CHARTERED ACCOUNTANTS

FRN004703S

CA K. EASWARAN PILLAI, F.C.A. PARTNER Membership No: 022062

Place: COCHIN Date: 28/06/2012

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Mar 31, 2010

We have audited the attached Balance Sheet of M/s. PRIMA AGRO LIMITED, Cochin-33, as at 31st March,2010 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.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (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. 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 those books;

(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 subsection (3C) of section 211 of the Companies Act, 1956; 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;

The Company incurred a loss of Rs.1,12,95,733.91/- after providing financial charges on account of State Bank of India cash credit and Bank of India cash credit for the period from 01/04/2009 to 31/03/2010 and is subject to financial charges on account of KFC term loan. The same has been classified as NPA by concerned banks/ financial institutions.

Secured loans shown in Schedule - C of the Balance sheet includes Rs. 17,30,09,559/- as cash credit availed from SBI and 80/. It is also disclosed that this cash credit is secured by first charge on the fixed assets of AFD & by hypothecation of inventories and book debts and a second charge on the fixed assets of FMD. The value of stock as certified by the management is Rs. 6,09,151.75/- and the value of Sundry Debtors given in Schedule- H which is considered good is nil. The secured value of current assets on which the loan is shown as secured comes to only Rs. 6,09,151.75/-, which does not cover the loan outstanding. The realizable value of security under which this loan has been disclosed is subject to the point discussed above.

Subject to the above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; and

(b) in the case of the Profit and Loss Account, of the profit for the year ended that date.

(c) in the case of the Cash Flow Statement, of the cash flows for the period ended on that date.

ANNEXURE TO AUDITORS REPORT (Referred to in paragraph 3 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 fixed assets.

b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

c) During the year, the company has not disposed off a major part of the plant and machinery. Accordingly the provisions of clause 4(i)(c) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

ii. In respect on its inventory:

a) Physical verification of Inventory has been conducted at reasonable intervals by the management.

b) The procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company is maintaining proper records of inventory and the stock as disclosed in the financial statements are valued and certified by the management.

iii.

a) The Company has granted following loans to companies, firms and other parties covered in the register maintained u/s.301 under the Companies Act, 1956.

Sl. Name of the Company/ Firm or Other Loan given Relationship Year end during the No Parties Year with the Balance Company

1. Ayyappa Roller Flour Mills Ltd 2,97,01,630 Associate 96,17,759.75

2. Prima Industries Ltd 87,62,677 1,71,85,128.90

3. Prima Beverages (P) Ltd. 6,18,433.40 29,64,668.40

b) The following are the particulars of loans taken by the company from companies, and other parties covered in the register maintained u/s.301 under the Companies Act, 1956

Sl. Name of the Party Loan taken Relationship with Yearend No During the Year the Company Balance

1. Charley Rodrigues Nil Director 2,00,000.00

2. Sanjay Gupta 20,68,300 Managing Director 75,30,454.97

c) n our opinion, the rate of interest and the terms and conditions on which loans have been taken from/ granted to companies, other parties listed in register maintained u/s. 301 of the Companies Act, 1956 are not able to report, prima facie, prejudicial to the interest of the Company, since the terms are not defined.

d) The Company is not receiving/paying any interest on such loans and there is no stipulation as to repayment of principal in respect of loans granted to/taken from parties listed in the register maintained under Section 301 of the Companies Act, 1956, hence we are unable to comment on the regularity of repayment of principal in respect of the said loans.

iv. In our opinion and according to the information and explanations given to us, the transactions 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.

v. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weaknesses have been noticed in the internal controls.

vi. The company does not have adequate internal audit system commensurate with the size and nature of its business.

vii. The company has not accepted any deposit from the public hence the directions issued by the Reserve Bank of India and provisions of Sec 58A of the Companies Act, 1956 and the Rules formed there under are not applicable to this company.

viii. The Central Government has not prescribed maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 for the products of the Company.

ix.

a) According to the information and explanations furnished to us, during the year, 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 material statutory dues applicable to it have been deposited with appropriate authorities and there have been serious delays. Following are the details of undisputed statutory dues payable by the company which are outstanding for more than 6 months as at the year end from the date they became payable.

SI No Nature of dues Amount Period to which Date of Payment Amount relates

1 CST 82,913.20 2003-04 ------

2 CST 1,13,852.00 1994-95 ------

3 Professional Tax 892.00 2003-04 ------

4 Sales Tax 55,073.00 2001-02 ------

5 Fringe Benefit Tax 5,344.00 2005-06 ------

6 Fringe Benefit Tax 2,38,786.00 2006-07 ------

7 Fringe Benefit Tax 1,53,689.00 2007-08 ------

8 Fringe Benefit Tax 1,32,693.00 2008-09 ------

b) According to the information and explanation given to us, dues of sale tax, income tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute are as follows:

SI No Nature of dues Amount Period to which Amount relates

1 Sales Tax 4,74,22,157/- 89-90 to 99-00

x. In our opinion, the company has accumulated losses to the extent of Rs.20,64,72,918.31/-. The accumulated losses of the company are more than fifty per cent of its paid up capital and free reserves.

xi. In our opinion and according to the information and explanations given to us, the company during the year has defaulted in repayment of dues to the following banks and financial institutions:

Bank/ Financial Institution Balance Outstanding as at 31st March 2010

1. State Bank of India 11,88,93,444

2. Bank of India 5,41,16,115

3. Kerala Financial Corporation 91,07,472

xii. In our opinion, the term loans have been applied for the purpose for which they were raised.

xiii. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that during the year no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short-term assets.

xiv. In our opinion, the company is not a chit fund or a Nidhi/ mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

xv. According to the information and explanations furnished to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly the provisions of clause 4(xii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

xvi. In our opinion the company is not dealing in shares, securities, debentures and other investments. Accordingly the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

xvii. In our opinion, the company has not given guarantees for loans taken by others from banks or financial institutions.

xviii. The company has not made any preferential allotment of shares to parties & companies covered in the Register maintained u/s. 301 of the Act. Accordingly the provisions of clause 4 (xviii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

xix. The company has not issued any debentures and hence the provisions of clause 4(xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

xx. The company has not raised any money from public issues during the year. Accordingly the provisions of clause 4(xx) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

xxi. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For VIJAYAKUMAR & EASWARAN

CHARTERED ACCOUNTANTS



CA K. EASWARAN PILLAI, F.C.A

Place: COCHIN (PARTNER)

Date : 30/06/2010 Membership No: 22062