Auditor Report of Prudential Sugar Corporation Ltd.

Mar 31, 2025

We have audited the accompanying standalone financial statements of Prudential Sugar Corporation Limited, which
comprise the Standalone Balance Sheet as at 31st March, 2025, the Standalone Statement of Profit and Loss (including
Other Comprehensive Income), the Standalone Cash Flow Statement and the Standalone Statement of Changes in
Equity for the year ended, and a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us except for the
information referred to in Basis for Qualified opinion of our report, the aforesaid Consolidated financial statements
give the information required by the Companies Act, 2013 (''Act'') in the manner so required and give a true and fair view
subject to:

i. The Financial Statements of the company as on 31^st March, 2025 have been prepared as per IND AS. However, we
would like to convey that conversion provisions as per IND AS 101 as on transition date and detailed procedure
were not made available to us with respect to FMV of all assets and all liabilities, The impact of the same on these
financial statements are unascertainable;

ii. The Company has various legal cases pending before Hon''ble Courts & other Government authorities, at various
levels, the outcome of these cases cannot be ascertained;

The impact of all of the above on the financial statements are unascertainable, gives a true and fair view in
conformity with the generally accepted accounting principles in India, of the state of affairs of the company as at
31^st March, 2025 of its profits and the cash flows for the year ended 31^st March, 2025.

Basis for Qualified Opinion

• The Balances of Current Assets, Other Non-Current Assets, Non-Current Liabilities, Other Non-Current Liabilities,
Current Liabilities & Other Current Liability are subject to Confirmation/reconciliations. The Impact of the same is,
unascertainable.

• We conducted our audit 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 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 financial statements under the provisions of the Act and the
rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements
and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide abasis for our opinion.

Key Audit Matter

• 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 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 the matter described below to be the key audit matters to be communicated in our report.

Key Audit Matter	How our Audit addressed the key audit matter
Carrying value of Investment in Subsidiary entity. The Company has an investment of Rs. 259.99 lakhs in its subsidiary M/s. Prudential Ammana Sugars Ltd.	Review of the disclosures made by the company in the financial statements in this regard.

Information other than the Financial Statements and Auditor''s Report thereon

• The Company''s Board of Directors is responsible for the other information. The other information comprises the
information included in the Annual Report but does not include the financial statements and our auditor''s report
thereon. Our opinion on the 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 financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information; we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management 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 state of affairs (financial
position), profit or loss (financial performance including other comprehensive income), cash flows and changes in
equity of the Company in accordance with the accounting principles generally accepted in India, including the Ind
AS specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding of 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.

• In preparing the 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 is also responsible for overseeing the Company''s financial reporting process.

Auditors Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor''s report on Standalone Financials that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with Standards on Auditing 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 financial statements.

As part of an audit in accordance with Standards on Auditing, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the 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 override internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances. Under section143(3)(i) of the Act, we are also responsible for explaining 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
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 financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.

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 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
of India in terms of section 143(11) 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 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 it
appears from our examination of those books;

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 Ind AS specified under section 133
of the Act;

e) on the basis of the written representations received from the directors and taken on record by the Board of
Directors, none of the directors is disqualified as on 31^st March 2025 from being appointed as a director in
terms of section164(2) of the Act;

f) According to information and explanations given to us together with our audit examination, reporting with respect
to the adequacy of the internal financial controls over financial reporting of the Company and the operating
effectiveness of such controls we give in Annexure B to the extent applicable.

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 (as amended), 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 as at 31^st March 2025;

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 were no 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 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, 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

vi. No Dividend has been declared or paid during the year by the company, hence provisions of section 123 of
the Companies Act, 2013, are not applicable.

vii. Based on our examination, which included test checks, the Company has used accounting software for
maintaining its books of account for the financial year ended March 31, 2025 which has a feature of recording
audit trail (edit log) facility and the same has operated throughout 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.

For PPKG& Co

Chartered Accountants

Firm''s Registration No.: 009655S

Girdhari Lal Toshniwal

Partner

Membership No: 205140

Place: Hyderabad

Date: 30^th May 2025

UDIN No-25205140BMOPD C2197

---

Mar 31, 2024

We have audited the accompanying standalone financial statements of Prudential Sugar Corporation Limited (''the Company''), which comprise the Standalone Balance Sheet as at 31st March, 2024, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Cash Flow Statement and the Standalone Statement of Changes in Equity for the year ended, and a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us except for the information referred to in Basis for Qualified opinion of our report, the aforesaid Standalone financial statements give the information required by the Companies Act, 2013 (''Act'') in the manner so required and give a true and fair view subject to:

i. The Financial Statements of the company as on 31st March, 2024 have been prepared as per IND AS. However, we would like to convey that the company has not followed conversion provisions as per IND AS 101 as on transition date and detailed procedure were not made available to us with respect to FMV of all assets and all liabilities, The impact of the same on these financial statements are unascertainable;

ii. The Company has various legal cases pending before Hon''ble Courts & other Government authorities, at various levels, the outcome of these cases cannot be ascertained;

The impact of all of the above on the financial statements are unascertainable, gives a true and fair view in conformity with the generally accepted accounting principles in India, of the state of affairs of the company as at 31st March, 2024 of its profits and the cash flows for the year ended 31st March, 2024.

Basis for Qualified Opinion

• The Balances of Current Assets, Other Non-Current Assets, Non-Current Liabilities, Other Non-Current Liabilities, Current Liabilities & Other Current Liability are subject to Confirmation/reconciliations. The Impact of the same is, unascertainable.

• We conducted our audit 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 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 financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our opinion.

Key Audit Matter

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 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 the matter described below to be the key audit matters to be communicated in our report.

Key Audit Matter	How our Audit addressed the key audit matter
Carrying value of Investment in Subsidiary entity. The Company has an investment of Rs. 259.99 lakhs in its subsidiary M/s. Prudential Ammana Sugars Ltd.	Review of the disclosures made by the company in the financial statements in this regard.

Information other than the Financial Statements and Auditor''s Report thereon

• The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report but does not include the financial statements and our auditor''s report thereon. Our opinion on the 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 financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management 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 state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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.

• In preparing the 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 is also responsible for overseeing the Company''s financial reporting process.

Auditors Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report on Standalone Financials that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing 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 financial statements.

As part of an audit in accordance with Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the 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 override internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act, we are also responsible for explaining 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 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 financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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 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

• As required by the Companies (Auditor''s Report) Order, 2020 (''the Order'') issued by the Central Government of India in terms of section 143(11) of the Act, we give in the Annexure A statement on the matters specified in paragraphs 3 and 4 of the Order.

• Further to our comments in Annexure A, 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 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 it appears from our examination of those books;

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 Ind AS specified under section 133 of the Act;

e) on the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2024 from being appointed as a director in terms of section164(2) of the Act;

f) we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as on 31st March, 2024 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report as per Annexure B expressed unmodified opinion; and

g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements

of section 197(16) of the Act, as amended, we report that section 197 is not applicable on private company.

Hence reporting as per section 197(16) is not required

h) 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 (as amended), 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 as at 31st March 2024;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31st March 2024;

iii. There were no 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, 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

vi. No Dividend has been declared or paid during the year by the company, hence provisions of section 123 of the Companies Act, 2013, are not applicable.

vii Based on our examination, which included test checks, the Company has used accounting software for maintaining its books of account for the financial year ended March 31, 2024 which has a feature of recording audit trail (edit log) facility and the same has operated throughout 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.

For PPKG& Co

Chartered Accountants

Firm''s Registration No.: 009655S

Girdhari Lal Toshniwal

Partner

Membership No: 205140

Place : Hyderabad

Date : 30^th May 2024

UDIN No -24205140BKALJA8365

---

Mar 31, 2023

1. We have audited the accompanying standalone financial statements of Prudential Sugar Corporation Limited (''the Company''), which comprise the Standalone Balance Sheet as at 31st March, 2023, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Cash Flow Statement and the Standalone Statement of Changes in Equity for the year ended, and a summary of significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us except for the information referred to in Basis for Qualified opinion of our report, the aforesaid Consolidated financial statements give the information required by the Companies Act, 2013 (''Act'') in the manner so required and give a true and fair view subject to:

i) The Financial Statements of the company as on 31st March, 2023 have been prepared as per IND AS. However, this been the first year of adoption of IND AS, we would like to convey that the company has not followed conversion provisions as per IND AS 101 as on Transition date and detailed procedure were not made available to us with respect to FMV of all assets and all liabilities, The impact of the same on these financial statements are unascertainable;

ii) The Company has various legal cases pending before Hon''ble Courts & other Government authorities, at various levels, the outcome of these cases cannot be ascertained;

Deferred tax asset of Rs. 15.25 crores carried forward, detailed calculations of which were not provided to us, in our opinion it has to be charged to Profit & Loss account because of which the profit has been over stated to the extent of Rs. 15.25 crores.

The impact of all of the above on the financial statements are unascertainable, gives a true and fair view in conformity with the generally accepted accounting principles in India, of the state of affairs of the company as at 31st March, 2023 of its profits and the cash flows for the year ended 31st March, 2023.

Basis for Qualified Opinion

3. The Balances of Current Assets, Other Non-Current Assets, Non-Current Liabilities, Other Non-Current Liabilities, Current Liabilities & Other Current Liability are subject to Confirmation/reconciliations. The Impact of the same is, unascertainable.

4. We conducted our audit 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 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 financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our opinion.

Key Audit Matter

5. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements ofthe current period. These matters were addressed in the context of our audit of the financial statements asa whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

6. We have determined the matter described below to be the key audit matters to be communicated in our report.

Key Audit Matter	How our Audit addressed the key audit matter
Carrying value of Investment in Subsidiary entity. The Company has an investment of Rs. 259.99 lakhs in its subsidiary Prudential Ammana Sugars ltd	Review of the disclosures made by the company in the financial statements in this regard.

Information other than the Financial Statements and Auditor''s Report thereon

7. The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the financial statements and our auditor''s report thereon. Our opinion on the 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 financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management for theStandalone financial Statements

8. The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Actwith respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets ofthe 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.

9. In preparing the 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.

10. The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditors Responsibilities for the Audit of the financial Statements

11. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report on Standalone Financials that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing 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 financial statements.

12. As part of an audit in accordance with Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the 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 override internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act, we are also responsible for explaining 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 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 financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

13. 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.

14. 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.

15. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the 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

16. As required by the Companies (Auditor''s Report) Order, 2020 (''the Order'') issued by the Central Government of India in terms of section 143(11) ofthe Act, we give in the Annexure A statement on the matters specified in paragraphs 3 and 4 of the Order.

17. Further to our comments in Annexure A, as requiredby 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 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 it appears from our examination of those books;

c) the standalone financial statements dealtwith by this report are in agreement with thebooks of account;

d) In our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;

e) on the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2023 from being appointed as a director in terms of section164(2) of the Act;

f) we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as on 31st March, 2023 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report as per Annexure B expressed unmodified opinion; and

g) with respect to the other matters to be included in the Auditor''s Report in accordance with rule11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), 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 ofpending litigations on its financial position as at 31st March 2023;

ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31st March 2023;

iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31st March 2023; and

As required by section 197(16) of the Act, 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.

For PPKG& Co

Chartered Accountants Firm''s Registration No.: 009655S

Girdhari Lal Toshniwal

Partner

Membership No: 205140 UDIN No: 23205140BGUNHY3510

Place: Hyderabad Date: 30^th May, 2023

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Mar 31, 2014

We have audited the accompanying financial statements of Prudential Sugar Corporation Limited, Hyderabad,("the Company") which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date annexed there to in which are incorporated the return of Kolkatta Branch Audited by Branch Auditor, M/s Sibsankar & Associates, Chartered Accountants, membership No. 052745 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") read with the General Circular 15/2013 dated 15 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of Companies Act, 2013. 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.

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 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. 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 qualified audit opinion.

Basis for Qualified Opinion

* The company has not provided interest on accrual basis/certain liabilities, Refer Note No.22 (a), the impact is that the profit for the year is overstated by Rs. 1.06 lacs and cumulative impact is that the liabilities are understated by Rs. 432.40 Lacs.

* The company has provided less depreciation @ 5.28% on sugar work roller whereas eligible depreciation as per schedule XIV of the Companies Act is 100% . Refer Note No. 21(b)(2), the impact of which is that the cumulative profit is overstated by Rs. 3.59 Lacs.

* The Company did not redeem the 16% Redeemable Cumulative preference shares as per the terms of issue, and did not provide for arrears of dividend thereon, Refer Note No. 22 (a) (4), the impact of which is that the Current Liabilities are understated by Rs. 408 Lacs and the Capital is overstated by Rs. 408 Lacs.

* The company has not accounted the provisions for retirement benefits as per AS-15, the impact of which is unascertained.

* The Balance of Trade Receivables, Trade payables, Secured Loans, Unsecured Loans, Loans and advances, Other Current assets and Current Liabilities are subject to confirmation/reconciliation as indicated in Note No. 22 (e), the impact of which is unascertained.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified opinion paragraph, the financial statements, gives 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. 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. In our opinion, the Balance sheet, statement of Profit and Loss and the cash flow statement comply with the accounting standard refer to in sub section (3C) of section 211 of the Act read with the General Circular 15/2013 dated 15 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of Companies Act, 2013.

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 are disqualified 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.

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

Referred to in paragraph 1 under the heading of "Report on other Legal and Regulatory Requirements" of our Report of even date.

1. a. The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets which is required to be updated.

b. All the assets have not been physically verified by the management during the year, but there is a regular program me 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. In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

2. a. As explained to us, inventories have been physically verified during the year by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.

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 are reasonable and adequate in relation to the size of the company and the nature of its business.

c. In our opinion and on the basis of our examination of the records, the Company is maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3. a. According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted loans to any company, covered in the register maintained under Section 301 of the Companies Act, 1956. Consequently the provisions of clauses 3(b), 3(c) and 3(d) of the order are not applicable.

e. According to the information and explanations given to us, during the year the company has not taken any unsecured loan from parties covered in the register maintained under section 301 of the Companies Act, 1956.However the Year end balance of Loan Outstanding from such parties taken in earlier year is Rs. 112 lacs.

f. In our opinion, the rate of interest and other terms and conditions on which loans were taken from Companies, Firms, or other parties covered under the register maintained under Sec.301 of the Companies Act. 1956, are not prima facie, prejudicial to the interest of the Company.

g. According to the information and explanations given to us, the company is regular in repayment of the principal and interest wherever applicable.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and for the sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. a. Based on the audit procedures applied by us and according to the information and explanations provided by the management, the transactions made in pursuance of contracts or arrangements that need to be entered in the register to be maintained under Section 301 of the Act 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 or arrangements entered in the Register maintained under Section 301 of the Companies Act and exceeding value of Rs. Five Lakhs in respect of each party during the financial year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. During the year, the company has not accepted any deposits from the public within the meaning of Sec. 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

7. In our opinion, the Company has an internal audit system by their own staff, which needs to be further strengthened.

8. We have broadly reviewed the books of accounts relating to material, labour and other items of cost maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under Sec. 209(i)(d) and are of the opinion that prima-facie prescribed accounts and records have been made and maintained. We have not however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

Sl. Nature of Dues Name of Statute Amount Pending before No.

1. Sales Tax APGST 1957 11.15 lacs High Court of Andhra Pradesh

10. In our opinion the accumulated losses of the company are not more than fifty percent of its net worth. The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has defaulted in repayment of dues to IIBI for a sum of Rs. 11.27 lacs.

12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

14. In our opinion, the company is not dealing in or trading in Shares, Securities debentures and other investments. Accordingly, the provision of this clause of the Companies (Auditor''s Report) Order is not applicable to the company.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution during the year.

16. Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the year.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19. According to the information and explanations given to us, the company has not issued any debentures.

20. According to the information and explanations given to us, the Company has not raised any money by way of public issue during the year.

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For Laxminiwas & Jain Chartered Accountants Firm Registration No. 001859S

Place : Hyderabad Smt. Sharada G. Patil Date : 30/05/2014 Partner Membership No. 015332

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Mar 31, 2013

Report on Financial Statements

We have audited the accompanying financial statements of Prudential Sugar Corporation Limited, Hyderabad,("the Company") which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year 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"). 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.

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 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. 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 qualified audit opinion.

Basis for Qualified Opinion

- The company has not provided interest on accrual basis/certain liabilities, Refer Note No. 22 (a), the impact of which the profit for the year is over stated by Rs. 1.06 Lacs and cumulative impact is that the liabilities are understated by Rs. 431.34 Lacs.

- The company has provided less depreciation @ 5.28% on sugar work roller whereas eligible depreciation as per schedule XIV of the Companies Act is 100%. Refer Note No. 21(b)(2), the impact of which is that the cumulative profit is overstated by Rs. 9.19 Lacs.

- The Company did not redeem the 16% Redeemable Cumulative preference shares as per the terms of issue, and did not provide for arrears of dividend thereon, Refer Note No. 22 (a) (5), the impact of which is that the Current Liabilities are understated by Rs. 408 Lacs and the Capital is overstated by Rs. 408 Lacs.

- The company has not accounted the provisions for retirement benefits as per AS-15, the impact of which is unascertained.

- The Balance of Trade Receivables, Trade payables, Secured Loans, Unsecured Loans, Loans and advances, Other Current assets and Current Liabilities are subject to confirmation/ reconciliation as indicated in Note No. 22 (e), the impact of which is unascertained.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified opinion paragraph, the financial statements, gives 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 possible 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, except Mr C. H Krishnamoorthy from whom the written representations not received, none of the directors are 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.

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURETO INDEPENDENT AUDITORS'' REPORT

Referred to in paragraph 1 under the heading of "Report on other Legal and Regulatory Requirements" of our Report of even date

1. a. The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets which is required to be updated.

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. In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

2. a. As explained to us, inventories have been physically verified during the year by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.

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 are reasonable and adequate in relation to the size of the company and the nature of its business.

c. In our opinion and on the basis of our examination of the records, the Company is maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3. a. According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has granted loans to two companies, covered in the register maintained under Section 301 of the Companies Act, 1956. The Maximum amount involved during the year was Rs.1333.96 lacs and the yearend balance of loans granted to such parties was Rs.1145.46 lacs.

b. In the absence of the rate of interest and other terms and conditions on which the Loans have been granted, we are unable to comment, whether the same are primafacie prejudicial to the interest of the company.

c. In the absence of Terms and conditions on which the Loan has been granted, we are unable to comment whether the parties have repaid the principal amounts and interest on regular basis.

d. In the absence of Terms and conditions on which the Loans have been granted, we are unable to comment, whether there is any overdue amount.

e. According to the information and explanations given to us, during the year the company has taken unsecured loan of Rs. 110 Lacs from one party and repaid Rs 434 Lacs to four parties and total amount outstanding as on 31st March 2013 was Rs.112 Lacs payable to two parties covered in the register maintained under section 301 of the Companies Act, 1956.

f. In our opinion, the rate of interest and other terms and conditions on which loans were taken from Companies, Firms, or other parties covered under the register maintained under Sec. 301 of the Companies Act. 1956, are not prima facie, prejudicial to the interest of the Company.

g. According to the information and explanations given to us, the company is regular in repayment of the principal and interest wherever applicable.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and for the sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. a. Based on the audit procedures applied by us and according to the information and explanations provided by the management, the transactions made in pursuance of contracts or arrangements that need to be entered in the register to be maintained under Section 301 of the Act 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 or arrangements entered in the Register maintained under Section 301 of the Companies Act and exceeding value of Rs. Five Lakhs in respect of each party during the financial year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. During the year, the company has not accepted any deposits from the public within the meaning of Sec. 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

7. In our opinion, the Company has an internal audit system by their own staff, which needs to be further strengthened.

8. We have broadly reviewed the books of accounts relating to material, labor and other items of cost maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under Sec. 209(i)(d) and are of the opinion that primafacie prescribed accounts and records have been made and maintained. We have not however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. a. According to the information and explanations given to us and the records of the company examined by us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident Fund, Investor education and protection fund, wealth tax, sales tax, customs duty, Excise duty, cess and other Material statutory dues applicable to it, except Service Tax. According to the information and explanations given to us, a sum of Rs. 334.22 Lacs is payable in respect of purchase tax and Income Tax ( Dividend Distribution Tax) were outstanding as at 31 st March, 2013 for a period of more than six months from the date of becoming payable .

b. According to the information and explanations given to us, there are no amounts payable in respect of income tax, wealth tax, service tax, customs duty, excise duty and cess except following amount of Sales Tax which have not been deposited due to disputes.

SI. No. Nature of Dues Name of Statute Amount Pending before

1. Sales Tax APGST 1957 11.15 lacs High Court of Andhra Pradesh

10. In our opinion the accumulated losses of the company are not more than fifty percent of its net worth. The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has defaulted in repayment of dues to IIBI for a sum of Rs. 11.27 lacs.

12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company

14. In our opinion, the company is not dealing in or trading in Shares, Securities debentures and other investments. Accordingly, the provision of this clause of the Companies (Auditor''s Report) Order is not applicable to the company

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution during the year.

16. Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the year.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31 st March, 2013, we report that no funds raised on short- term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19. According to the information and explanations given to us, the company has not issued any debentures.

20. According to the information and explanations given to us, the Company has not raised any money by way of public issue during the year.

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For Laxminiwas & Jain

Chartered Accountants

Firm Registration No. 001859S

Place : Hyderabad Smt. Sharada G. Patil

Date : 30/05/2013 Partner

Membership No. 015332

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Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s PRUDENTIAL SUGAR CORPORATION LIMITED as at 31.03.2012 and the Statement of Profit and Loss of the Company for the year ended on that date and also the Cash Flow statement for the year ended 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 conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards required that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes, assessing the accounting principles used and significant estimates made by the 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 Section 227 (4A) 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 in paragraph 3 above, we report that:

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

b. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of such books;

c. The Balance Sheet, Statement of Profit and Loss and Cash flow Statement referred to in this report are in agreement with the books of accounts;

d. In our opinion, statement of Profit and Loss, Balance Sheet and the Cash Flow Statement comply with the requirements of the Accounting standards (AS) referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956 non accounting of interest on accrual basis, non provision of retirement benefits as per AS-15 and non provision of liabilities as per AS*29 refer Point No. a,b and f in Note 22.

e. Based on the representations made by the Directors of the Company and the information and explanations as made available, Directors of the Company do not prima facie have any disqualification as referred to in clause (g) of Sub section (1) to section 274 of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the said Accounts, Subject to para(d) above, the impact of non accounting of interest/liabilities is that the Profit for the year is overstated by Rs. 76.80 lacs and cumulative impact is that the liabilities are understated by Rs. 873.53 lacs refer point no. a,b and f of Note 22 . Also providing of less Depreciation @ 5.28% on Sugar work Rollers whereas eligible depreciation as per schedule XIV of the Companies Act is 100% refer b.2 in Note 21 the impact is that the cumulative Profit is overstated by Rs. 14.78 Lacs point no. a (5) in Note 22 regarding non redemption of 16% Cumulative Redeemable Preference Shares, the impact of which is that the current liabilities are understated by Rs. 408 Lacs and Capital is overstated by Rs. 408 Lacs. Refer pote no.g in Note 22 for non accounting of Provision for Retirement benefit as per AS-15, also refer point no. e in Note 22 regarding non confirmation/ reconciliation of Trade Receivables, Trade payables, Secured Loans, Unsecured Loans, Loans and advances, Other Current assets and Current Liabilities the impact of which on assets/ liabilities and Profit is unascertained, gives the information required by the Companies Act, 1956, in the manner so required and give a true and fair view:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012

ii. in the case of statement of Profit & Loss, the Profit of the company for the year ended on that date and

iii. in the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURETOTHE AUDITORS' 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 situations of Fixed assets, Which is required to be updated.

b. As explained to us, 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. As informed to us, No material discrepancies were noticed on such verification.

c. According to the information and explanation furnished to us, the company has not disposed of a substantial part of its fixed assets during the year.

i i. a. According to the information and explanation furnished to us, the Management has physically verified inventories during the year. In our opinion, the frequency of such verification is reasonable.

b. In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. According to the information furnished to us, the Company is maintaining proper records of its inventory and the discrepancies, if any, noticed on verification between the physical stocks and the book records were not material, and have been properly dealt within the books of accounts.

iii. a. The Company has not granted any loans to companies and other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b. According to the information & explanation furnished to us, the Company had taken unsecured loans from five parties, covered under register maintained under Section 301 of the Companies Act, 1956.During the year it has accepted Rs.50 Lacs & repaid Rs.166.00 Lacs. The year- end balances of loans taken from such parties were Rs 436 Lacs.

c. In our opinion, the rate of interest and other terms and conditions on which loans were taken from Companies, firms, or other parties covered under the register maintained under Section 301 of the Companies Act, 1956, are not prima facie, prejudicial to the interest of the Company.

d. According to the information and explanation given to us, the company is regular in repayment of the principle and interest amounts wherever applicable as stipulated on the loans taken by it from the parties listed in the registers maintained under section 301 of the companies Act 1956.

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 the'purchases of inventory, fixed assets and with regard to the sale of goods and sen/ices. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal controls.

v. a. Based on the information and explanations given to us, we are of the opinion that the transactions that are required to be eFntered 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 or arrangements entered in the register maintained under Section 301 of Companies Act, 1956 and exceeding the value of Rupees Five Lakhs in respect of each party have been entered during the Financial year at price which are reasonable having regard to prevailing market prices at relevant time.

vi. In our opinion and according to the information and explanations given to us, The Company has not accepted any fresh deposits during the year within the purview of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

vii. In our opinion and according to the information and explanations given to us, the company has an internal audit system which in our opinion, considering the size and nature of company's business, needs to be further strengthened.

viii. We have broadly reviewed the Cost Records maintained by the Company pursuant to the order of The Central Government for maintenance of cost records under section 209(1 )(d) of the Companies Act 1956 and are of the opinion that prima facie the prescribed accounts and records have been maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix. a. In our opinion and according to the information and explanations given to us, the company is generally regular in depositing undisputed statutory dues including Income Tax, Sales Tax, Excise duty and other statutory dues with appropriate authorities except Provident fund, Professional Tax which has been deposited with delays.

b. In our opinion and according to the information and explanations given to us, the undisputed statutory dues outstanding as at 31.03.2012 for a period of more than six months are Purchase Tax, CDCF, and Dividend Distribution Tax Totaling to Rs. 349.23 Lacs.

c. In our opinion and according to the information and explanations given to us, the following amounts of Sales tax has been disputed by the company and hence , were not deposited with the concerned authorities as at 31st March, 2012.

SI. No. Nature of Dues Name of Statute Amount Pending before

1. Sales Tax APGST1957 11.15 lacs High Court of Andhra Pradesh

x. In our opinion and according to the information and explanations given to us, company's accumulated losses at the end of the financial year are less than 50% of its net worth and it has not incurred cash loss in current financial year as per books and also not incurred cash losses in immediately preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the company has defaulted in repayment of dues, to the financial institutions, the details for which as per books are given below. The Company has not issued any Debentures.

SI. No. Name of the Bank Default

1. I I B I 324.27 Lacs

2. I F C I 245.40 Lacs (Assigned to Sri Venkateswara Sugar & Industries Pvt. Ltd.,)

xii. According to the information furnished to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. In our opinion and according to the information and explanations given to us,, the company is not a chit fund or a nidhi / mutual benefit fund/ society and hence, the requirements of clause 4(xiii) of the Companies (Auditors' Report) Order, 2003 are not applicable to the company during year under report.

xiv. According to the information furnished to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the requirement of clause 4(xiv) of the Companies (Auditors' Report) Order, 2003 are not applicable to the Company..

xv. 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.

xvi. Based on information & explanation given to us by the Management, during the year term loans were applied for the purpose for which the loans were obtained.

xvii. According to the information and explanations given to us and on the overall examination of the balance sheet of the company, we report that the funds raised on short-term basis have, prima-facie, not been used for long term investments.

xviii. According to the information and explanation furnished to us, the company has not made preferential allotment of shares during the year to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix. According to the information and explanation given to us, the Company has not issued any debentures during the year under report.

xx. The company has not raised any monies through public issues of its securities 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 Laxminiwas & Jain Chartered Accountants Firm Registration No. 001859S

Place : Hyderabad Smt. Sharada G. Patil Date : 31/08/2012 Partner Membership No. 015332

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of M/s PRUDENTIAL SUGAR CORPORATION LIMITED as at 31.03.2011 and the Profit and Loss Account of the Company for the year ended on that date and also the Cash Flow statement for the year ended 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 conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards required that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes, assessing the accounting principles used and significant estimates made by the 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 Section 227 (4A) 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 in paragraph 3 above, we report that:

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

b. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of such books;

c. The Balance Sheet, Profit and Loss Account and Cash flow Statement referred to in this report are in agreement with the books of accounts;

d. In our opinion, the Profit and Loss Account, Balance Sheet and the Cash Flow Statement comply with the requirements of the Accounting standards (AS) referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956 non accounting of interest on accrual basis, non provision of retirement benefits as per AS-15 and non provision of liabilities as per AS-29 refer Note No. 1,2, and 6 in Schedule N.

e. Based on the representations made by the Directors of the Company and the information and explanations as made available, Directors of the Company do not prima facie have any disqualification as referred to in clause (g) of Sub section (1) to section 274 of the Companies Act,1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the said Accounts, Subject to para(d) above, the impact of non accounting of interest/liabilities is that the Profit for the year is overstated by Rs.76.80 lacs and cumulative impact is that the liabilities are understated by Rs. 796.73 lacs refer Note No. 1,2 and 6 of Schedule "N" . Also providing of less Depreciation @ 5.28% on Sugar work Rollers whereas eligible depreciation as per schedule XIV of the Companies Act is 100% refer 2.b in schedule O, the impact is that the cumulative Profit is overstated by Rs.20.28 Lacs Note No. 1 (e) in Schedule N regarding non redemption of 16% Cumulative Redeemable Preference Shares, the impact of which is that the current liabilities are understated by Rs. 408 Lacs and Capital is overstated by Rs. 408 Lacs. Refer Note No.7 in schedule N for non accounting of Provision for Retirement benefit as per AS-15, also refer Note No.5 in Schedule N regarding non confirmation/ reconciliation of Sundry Debtors, Creditors, Secured Loans, Unsecured Loans, Loans and advances, Other Current assets and Current Liabilities the impact of which on assets/ liabilities and Profit is unascertained, gives the information required by the Companies Act, 1956, in the manner so required and give a true and fair view:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011

ii. in the case of the Profit and Loss Account, of the Profit of the company for the year ended on that date and

iii. in the case of the Cash Flow Statement , of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

Referred to in paragraph 3 of our report of even date:

i. a. The company has maintained proper records showing full particulars, including quantitative details and situations of Fixed assets, Which is required to be updated.

b. As explained to us, 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. As informed to us, No material discrepancies were noticed on such verification.

c. According to the information and explanation furnished to us, the company has not disposed of a substantial part of its fixed assets during the year.

ii. a. According to the information and explanation furnished to us, the Management has physically verified inventories during the year. In our opinion, the frequency of such verification is reasonable.

b. In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. According to the information furnished to us, the Company is maintaining proper records of its inventory and the discrepancies, if any, noticed on verification between the physical stocks and the book records were not material, and have been properly dealt within the books of accounts..

iii. a. The Company has not granted any loans to companies and other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b. According to the information & explanation furnished to us, the Company had taken unsecured loans from five parties, covered under register maintained under Section 301 of the Companies Act, 1956.During the year it has accepted Rs.20 Lacs & repaid Rs.42.50 Lacs. The year-end balances of loans taken from such parties were Rs 552 Lacs.

c. In our opinion, the rate of interest and other terms and conditions on which loans were taken from Companies, firms, or other parties covered under the register maintained under Section 301 of the Companies Act, 1956, are not prima facie, prejudicial to the interest of the Company.

d. According to the information and explanation given to us, the company is regular in repayment of the principal and interest amounts wherever applicable as stipulated on the loans taken by it from the parties listed in the registers maintained under section 301 of the companies Act 1956.

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 the purchases of inventory, fixed assets and with regard to 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 controls.

v. a. Based on the information and explanations given to us, we are of the opinion that the transactions that are required 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 or arrangements entered in the register maintained under

Section 301 of Companies Act, 1956 and exceeding the value of Rupees Five Lakhs in respect of each party have been entered during the Financial year at prices which are reasonable having regard to prevailing market prices at relevant time.

vi. In our opinion and according to the information and explanations given to us, The Company has not accepted any fresh deposits during the year within the purview of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

vii. In our opinion and according to the information and explanations given to us, the company has an internal audit system which in our opinion, considering the size and nature of company's business , need to be further strengthened.

viii. We have broadly reviewed the Cost Records maintained by the Company pursuant to the order of The Central Government for maintenance of cost records under section 209(1)(d) of the Companies Act 1956 and are of the opinion that prima facie the prescribed accounts and records have been maintained. We have not, however , made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix. a. In our opinion and according to the information and explanations given to us, the company is generally regular in depositing undisputed statutory dues including Income Tax, Sales Tax, Excise duty and other statutory dues with appropriate authorities except Provident fund, Professional Tax which has been deposited with delays/ not deposited.

b. In our opinion and according to the information and explanations given to us, the undisputed statutory dues outstanding as at 31.03.2011 for a period of more than six months are Purchase Tax, CDCF, and Dividend Distribution Tax Totaling to Rs. 346.83 Lacs.

c. In our opinion and according to the information and explanations given to us, the following amount of Sales tax has been disputed by the company and hence, was not deposited with the concerned authorities as at 31st March, 2011.

SL. No. Nature of Dues Name of Statute Amount Pending before

1. Sales Tax APGST 1957 11.15 lacs High Court of Andhra Pradesh

x. In our opinion and according to the information and explanations given to us, company's accumulated losses at the end of the financial year are less than 50% of its net worth and it has not incurred cash loss in current financial year as per books and also not incurred cash losses in immediately preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the company has defaulted in repayment of dues, to the financial institutions, the details of which as per books are given below. The Company has not issued any Debentures.

Sl. No. Name of the Bank Default

1. I I B I 324.27 Lacs

2. I F C I 245.40 Lacs (Assigned to Sri Venkateswara Sugar & Industries Pvt. Ltd.,)

xii. According to the information furnished to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. In our opinion and according to the information and explanations given to us, the company is not a chit fund or a nidhi / mutual benefit fund/ society and hence, the requirements of clause 4(xiii) of the Companies (Auditors' Report) Order, 2003 are not applicable to the company during year under report.

xiv. According to the information furnished to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the requirement of clause 4(xiv) of the Companies (Auditors' Report) Order, 2003 is not applicable to the Company.

xv. 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.

xvi. Based on information & explanation given to us by the Management, during the year term loans were applied for the purpose for which the loans were obtained.

xvii. According to the information and explanations given to us and on the overall examination of the balance sheet of the company, we report that the funds raised on short-term basis have, prima- facie, not been used for long term investments.

xviii. According to the information and explanation furnished to us, the company has not made preferential allotment of shares during the year to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix. According to the information and explanation given to us, the Company has not issued any debentures during the year under report.

xx. The company has not raised any monies through public issues of its securities 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 Laxminiwas & Jain

Chartered Accountants

Firm Registration No. 001859S

Place : Hyderabad Smt. Sharada G. Patil

Date : 30/08/2011 Partner

Membership No. 015332

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of M/s PRUDENTIAL SUGAR CORPORATION LIMITED as at 31.03.2010 and the Profit and Loss Account of the Company for the year ended on that date and also the Cash Flow statement for the year ended 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 conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards required that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes, assessing the accounting principles used and significant estimates made by the 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 Section 227 (4A) 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 in paragraph 3 above, we report that:

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

b. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of such books;

c. The Balance Sheet, Profit and Loss Account and Cash flow Statement referred to in this report are in agreement with the books of accounts;

d. In our opinion, the Profit and Loss Account, Balance Sheet and the Cash Flow Statement comply with the requirements of the Accounting standards (AS) referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956 non accounting of interest on accrual basis and non provision of liabilities as per AS-29 refer Note Nos. 1,2 and 7 in Schedule N.

e. based on the representations made by the Directors of the Company and the information and explanations as made available, Directors of the Company do not prima facie have any disqualification as referred to in clause (g) of Sub section (1) to section 274 of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the said Accounts, Subject to para(d) above, the impact of non accounting of interest/liabilities is that the loss for the year is understated by Rs. 76.80 lacs and cumulative impact is that the liabilities are understated by Rs.718.93 lacs refer Note No. 1,2 and 7 of Schedule "N". Also providing of less Depreciation @ 5.28% on Sugar work Rollers whereas eligible depreciation as per schedule XIV of the Companies Act is 100% refer 2.b in schedule P, the impact is that

the cumulative loss is understated and the assets are overstated by Rs.25.98 Lacs Note No. 1 (e) in Schedule N regarding non redemption of Preference Shares of Rs.408 Lacs and non-providing of Dividend. Refer Note No. 5 in Schedule N regarding non confirmation/ reconciliation of Sundry Debtors, Creditors, Secured Loans, Unsecured Loans, Loans and advances, Other Current assets and Current Liabilities the impact of which on assets/ liabilities and loss is unascertained, gives the information required by the Companies Act, 1956, in the manner so required and give a true and fair view:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31 st March, 2010

ii. in the case of the Profit and Loss Account, of the Loss of the company for the year ended on that date and

iii. in the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT Referred to in paragraph 3 of our report of even date:

i. a. The company has maintained proper records showing full particulars, including quantitative details and situations of Fixed assets, Which is required to be updated.

b. As explained to us, 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. As informed to us, No material discrepancies were noticed on such verification.

c. According to the info: .nation and explanation furnished to us, the company has not disposed of a substantial part of its fixed assets during the year.

ii. a. According to the information and explanation furnished to us, the Management has physically verified inventories during the year. In our opinion, the frequency of such verification is reasonable.

b In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. According to the information furnished to us, the Company is maintaining proper records of its inventory and the discrepancies, if any, noticed on verification between the physical stocks and the book records were not material, and have been properly dealt within the books of accounts..

iii. a The Company has not granted any loans to companies and other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

h According to the information & explanation furnished to us, the Company had taken unsecured loans from Six parties, covered under register maintained under Section 301 of the Companies Act, 1956.During the year it has accepted Rs. 420 Lacs & repaid Rs.455 Lacs.The year-end balances of loans taken from such parties were Rs 574.50 Lacs.

c. In our opinion, the rate of interest and other terms and conditions on which loans were taken from Companies, firms, or other parties covered under the register maintained under Section 301 of the Companies Act, 1956, are not prima facie, prejudicial to the interest of the Company.

d. According to the information and explanation given to us, the company is regular in repayment of the principle and interest amounts wherever applicable as stipulated on the loans taken by it from the parties listed in the registers maintained under section 301 of the companies Act 1956.

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 the purchases of inventory, fixed assets and with regard to 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 controls.

v. a. Based on the information and explanations given to us, we are of the opinion that the transactions that are required 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 or arrangements entered in the register maintained under Section 301 of Companies Act, 1956 and exceeding the value of Rupees Five Lakhs in respect of each party have been entered during the Financial year at price which are reasonable having regard to prevailing market prices at relevant time.

vi. In our opinion and according to the information and explanations given to us, The Company has not accepted any fresh deposits during the year within the purview of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

vii. In our opinion and according to the information and explanations given to us, the company has an internal audit system which in our opinion, considering the size and nature of companys business, need to be further strengthened.

viii. We have broadly reviewed the Cost Records maintained by the Company pursuant to the order of The Central Government for maintenance of cost records under section 209(1 )(d) of the Companies Act 1956 and are of the opinion that prima facie the prescribed accounts and records have been maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix. a. In our opinion and according to the information and explanations given to us, the company is generally regular in depositing undisputed statutory dues including Income Tax, Sales Tax, Excise duty and other statutory dues with appropriate authorities except Provident fund, Professional Tax which has been deposited with delays/ not deposited.

b. In our opinion and according to the information and explanations given to us, the undisputed statutory dues outstanding as at 31.03.2010 for a period of more than six months are Purchase Tax, CDCF, and Dividend Distribution Tax Totaling to Rs. 349.78 Lacs.

c. In our opinion and according to the information and explanations given to us, the following amounts of Sales tax has been disputed by the company and hence , were not deposited with the concerned authorities as at 31st March, 2010.

SI.No. Nature of Dues Name of Statute Amount Pending before

1. Sales Tax APGST1957 11.15 lacs High Court of Andhra Pradesh

x. In our opinion and according to the information and explanations given to us, companys accumulated losses at the end of the financial year are less than 50% of its net worth and it has not incurred cash loss in current financial year as per books and also has not incurred cash losses in immediately preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the company has defaulted in repayment of dues, to the financial institutions, the details for which as per books are given below. The Company has not issued any Debentures.

SI. No. Name of the Bank Default

1. I I B I 324.27 Lacs

2. I F C I 245.40 Lacs (Assigned to Sri Venkateswara

Sugar & Industries Pvt. Ltd.,)

xii. According to the information furnished to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. In our opinion and according to the information and explanations given to us,, the company is not a chit fund or a nidhi / mutual benefit fund/ society and hence, the requirements of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company during year under report.

xiv. According to the information furnished to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the requirement of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company..

xv. 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.

xvi. Based on information & explanation given to us by the Management, during the year term loans were applied for the purpose for which the loans were obtained.

xvii. According to the information and explanations given to us and on the overall examination of the balance sheet of the company, we report that the funds raised on short-term basis have, prima- facie, not been used for long term investments.

xvii. According to the information and explanation furnished to us, the company has not made preferential allotment of shares during the year to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix. According to the information and explanation given to us, the Company has not issued any debentures during the year under report.

xx. The company has not raised any monies through public issues of its securities 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 Laxminiwas & Jain

Chartered Accountants

Firm Registration No.001859S

Place : Nindra Smt. Sharada G. Patil

Date : 01/09/2010 Partner

Membership No. 015332

---

Mar 31, 2009

1. We have audited the attached Balance sheet of M/s. PRUDENTIAL SUGAR CORPORATION LIMITED, as at 31 st March, 2009 and the profit and Loss Account of the Company for the year ended on that date and also the cash flow statement for the year ended 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 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 misstatements. An audit includes, examining on a test basis, evidence supporting the amounts and disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the 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 Section 227 (4A) 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 in paragraph 3 above, we report that:

a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 appears from our examination of such books.

c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement referred to in this Report are in agreement with the Books of Account.

d. In our opinion, the Profit & Loss Account, Balance Sheet and the Cash Flow statement comply with the requirements of the accounting standards (AS) referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except non accounting of interest on accrual basis and non provision of Liabilities as perAS-29 refer Note No. 1,3 and 4 in Schedule N and non-accounting of employee benefits as perAS-15 (Revised).

e. Based on the representations made by the Directors of the Company and the information and explanations as made available, Directors of the Company do not prima facie have any disqualification as referred to in clause (g) of Sub-section (1) to Section 274 of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanation given to us, the said Accounts, subject to para (d), above the impact of non accounting of interest/ liabilities is that the profit for the year is overstated by Rs 77.56 Lacs and cumulative impact is that the liabilities are understated by Rs.3199.26 Lacs Refer Note No. 1,3(a,b) and 4 of schedule A/. Also providing of Depreciation @5.28% on Sugar work Rollers where as eligible depreciation as per schedule XIV of Companies Act is 100% refer 2.b in schedule P, the impact is that the Profit for the year is understated by Rs 5.60 Lacs & cumulative impact is that the assets are shown more by Rs.30.95 Lacs. Also Refer Note No. 6 in Schedule N regarding non-confirmation / reconciliation of Sundry Debtors, Creditors, Secured Loans, Unsecured Loans, Loans and Advances, other Current Assets and Current Liabilities and non-accounting of employee benefits as per revised AS-15 the impact of which on Assets/Liabilities and Loss is unascertained and Note No. 11 in Schedule N regarding compliance of MSMED Act 2006gives the information required by the Companies Act, 1956, in the manner so required and give a true and fair view.

i. in the case of the Balance Sheet, of the State of Affairs of the Company as at 31 st March, 2009;and

ii. in the case of the profit and Loss Account, of the profit of the Company for the year ended on that date.

iii. in the case of the Cash Flow Statement, of the Cash Flow for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

Referred to in paragraph 1 of our report of even date:

i. a. The Company has maintained proper records showing full particulars, including quantitative details and situations of Fixed Assets, which is required to be updated.

b. As explained to us, all the assets have not been physically verified by the Management during the year but there is a regular program of verification which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. As informed to us, no material discrepancies were noticed on such verifications.

c. According to the information and explanations furnished to us, the Company has not disposed off a substantial part of its fixed assets during the year.

ii. a. According to the information and explanations furnished to us, the Management has physically verified inventories during the year. In our opinion, the frequency of such verification is reasonable.

b. In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. According to the information furnished to us, the Company is maintaining proper records of its inventory and the discrepancies, if any, noticed on verification between the physical stocks and the book records were not material, and have been properly dealt within the books of account.

iii. The company has not taken/granted any loans from/to companies and other parties covered in the register maintained under section 301 of the Companies Act, 1956.

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 and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal controls.

v. a. Based on the information and explanations given to us, we are of the opinion that the transactions that are required 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, during the year the Company has not entered into any transactions pursuant to contract entered in the register maintained under section 301 of Companies Act, 1956 and having an aggregate value exceeding Rs. 5 lacs in respect of each party.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any fresh deposits during the year within the purview of Section 58A and 58AA or any other related provisions of the Companies Act 1956.

vii. In our opinion and according to the information and explanations given to us, the Company has internal audit system which in our opinion, considering the size and nature of Companys business, need to be further strengthened.

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

ix. a. In our opinion and according to the information and explanation given to us the company is generally regular in depositing undisputed statutory dues including Income Tax, Sales Tax, Excise duty and other Statutory dues with appropriate authorities except Provident Fund, Professional Tax which has been deposited with delays / not deposited.

b. In our opinion and according to the information and explanations givento us, the undisputed statutory dues outstanding as at 31 -03-2009 for a period of more than six months are Purchase Tax, CDCF, P.F. and Dividend Distribution Tax of Rs.363.12 lacs..

c. In our opinion and according to the information and explanations given to us the following amount of sales tax has been disputed by the Company and hence, were not deposited with the concerned authorities as at 31 st March, 2009.

SI.No. Nature of Dues Name of Statute Amount Pending before

1. Sales Tax APGST 1957 22.80 lacs Sales Tax Appellate Tribunal Hyd.

x. In our opinion and according to the information and explanations given to us, Companys accumulated losses at the end of the Financial year after considering the quantified qualifications, are more than 50% of its net worth and it has incurred cash loss in current financial year as per books and also incurred cash losses in immediately preceding financial year. The qualification which is not being quantified, the effect of such unquantified qualification has not been taken into consideration for the purpose of this clause.

xii. According to the information 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.

xiii: In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society and hence, the requirements of clause (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company during the year under report.

xiv. According to the information furnished to us, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the requirements of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

xv. 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 and Financial Institutions.

xvi. Based on information and explanations given to us by the management, during the year term loans were applied for the purpose for which the loans were obtained.

xvii. According to the information and explanations given to us and on an over all examination of the Balance Sheet of the Company, we report that the funds raised on short-term basis have, prima facie, not been used for long term investment.

xviii.According to information and explanations furnished to us, the company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Act.

xix. According to the information and explanations given to us, the Company has not issued any debentures during the year under report.

xx. The Company has not raised any monies through public issue of its securities 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 Laxminiwas & Jain Chartered Accountants Place : Nindra B. Ramesh Kumar Date : 03/09/2009 Partner Membership No. 200304

---

Mar 31, 2008

1. We have audited the attached Balance sheet of M/s. PRUDENTIAL SUGAR CORPORATION LIMITED, as at 31st March, 2008 and the profit and Loss Account of the Company for the year ended on that date and also the cash flow statement for the year ended 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 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 misstatements. An audit includes, examining on a test basis, evidence supporting the amounts and disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the 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 Section 227 (4A) 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 in paragraph 3 above, we report that:

a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 appears from our examination of such books.

c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement referred to in this Report are in agreement with the Books of Account.

d. In our opinion, the Profit & Loss Account, Balance Sheet and the Cash Flow statement comply with the requirements of the accounting standards (AS) referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except non accounting of interest on accrual basis and non provision of Liabilities as per AS-29 refer Note No. 1,3 and 4 in Schedule N and non- accounting of employee benefits as per AS-15 (Revised).

e. Based on the representations made by the Directors of the Company and the information and explanations as made available, Directors of the Company do not prima facie have any disqualification as referred to in clause (g) of Sub-section (1) to Section 274 of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanation given to us, the said Accounts, subject to para (d), above the impact of non accounting of interest / liabilities is that the loss for the year is understated by Rs 86.56 Lacs and cumulative impact is that the liabilities are understated by Rs.3994.98 Lacs Refer Note No. 1, 3(a,b) and 4 of schedule N.

Also providing of Depreciation @5.28% on Sugar work Rollers where as eligible depreciation as per schedule XIV of Companies Act is 100% refer 2.b in schedule P, the impact is that the loss for the year is overstated by Rs.4.91 Lacs & cumulative impact is that the assets are shown more by Rs.24.28 Lacs. Also Refer Note No. 6 in Schedule N regarding non-confirmation / reconciliation of Sundry Debtors, Creditors, Secured Loans, Unsecured Loans, Loans and Advances, other Current Assets and Current Liabilities and non-accounting of employee benefits as per revised AS-15 the impact of which on Assets/Liabilities and Loss is unascertained gives the information required by the Companies Act, 1956, in the manner so required and give a true and fair view.

i. in the case of the Balance Sheet, of the State of Affairs of the Company as at 31 st March, 2008; and

ii. in the case of the profit and Loss Account, of the loss of the Company for the year ended on that date.

iii. in the case of the Cash Flow Statement, of the Cash Flow for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

Referred to in paragraph 1 of our report of even date:

i. a. The Company has maintained proper records showing full particulars, including quantitative details and situations of Fixed Assets, which is required to be updated.

b. As explained to us, 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. As informed to us, no material discrepancies were noticed on such verifications.

c. According to the information and explanations furnished to us, the Company has not disposed off a substantial part of its fixed assets during the year.

ii. a. According to the information and explanations furnished to us, the Management has physically verified inventories during the year. In our opinion, the frequency of such verification is reasonable.

b. In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. According to the information furnished to us, the Company is maintaining proper records of its inventory and the discrepancies, if any, noticed on verification between the physical stocks and the book records were not material, and have been properly dealt within the books of account.

iii. The company has not taken/granted any loans from/to companies and other parties covered in the register maintained under section 301 of the Companies Act, 1956.

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 and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal controls.

v. a. Based on the information and explanations given to us, we are of the opinion that the transactions that are required 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, during the year the Company has not entered into any transactions pursuant to contract entered in the register maintained under section 301 of Companies Act, 1956 and having an aggregate value exceeding Rs. 5 lacs in respect of each party.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any fresh deposits during the year within the purview of Section 58A and 58AA or any other related provisions of the Companies Act 1956.

vii. In our opinion and according to the information and explanations given to us, the Company has internal audit system by its own staff. In our opinion, considering the size and nature of Companys business, the Internal Audit systems need to be further strengthened.

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

ix. a. In our opinion and according to the information and explanation given to us the company is generally regular in depositing undisputed statutory dues including Income Tax, Sales Tax, Excise duty and other Statutory dues with appropriate authorities except Provident Fund, Professional Tax which has been deposited with delays / not deposited.

b. In our opinion and according to the information and explanations given to us, the undisputed statutory dues outstanding as at 31 -03-2008 for a period of more than six months are Purchase Tax and CDCF of Rs.344.39 lacs.

c. In our opinion and according to the information and explanations given to us the following amount of sales tax has been disputed by the Company and hence, were not deposited with the concerned authorities as at 31st March, 2008.

SI.Mo. Nature of Dues Name of Statute

1. Sales Tax APGST 1957

Amount Pending before

22.80 lacs Sales Tax Appellate Tribunal Hyd.

x. In our opinion and according to the information and explanations given to us, Companys accumulated losses at the end of the Financial year after considering the quantified qualifications, are more than 50% of its net worth and it has incurred cash loss in current financial year as per books and also incurred cash losses in immediately preceding financial year. The qualification which is not being quantified, the effect of such unquantified qualification has not been taken into consideration for the purpose of this clause.

xi. In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues, to the financial institutions, the details for which as per books are given below. The Company has not issued any debentures.

SI. No. Name of the Bank Default

1. I I B I 324.27 Lacs 2. I F C I 230.98 Lacs

xii. According to the information 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.

xiii. In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society and hence, the requirements of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company during the year under report.

xiv. According to the information furnished to us, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the requirements of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

xv. 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 and Financial Institutions.

xvi. Based on information and explanations given to us by the management, during the year term loans were applied for the purpose for which the loans were obtained.

xvii.According to the information and explanations given to us and on an over all examination of the Balance Sheet of the Company, we report that the funds raised on short-term basis have, prima facie, not been used for long term investment.

xviii.According to information and explanations furnished to us, the company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Act.

xix. According to the information and explanations given to us, the Company has not issued any debentures during the year under report.

xx. The Company has not raised any monies through public issue of its securities 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 Lakshminiwas & Jain Chartered Accountants

Place : Nindra B. Ramesh Kumar Date : 04/11/2008 Partner Membership No. 200304

---

Mar 31, 2007

1. We have audited the attached Balance sheet of M/s. PRUDENTIAL SUGAR CORPORATION LIMITED, as at 31st March, 2007 and the profit and Loss Account of the Company for the year ended on that date and also the cash flow statement for the year ended 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 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 misstatements. An audit includes, examining on a test basis, evidence supporting the amounts and disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the 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 Section 227 (4A) 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 in paragraph 3 above, we report that:

a. We have obtained all the information and explanations, which to the best of our knowledge ;arid 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 appears from our examination of such books.

c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement referred to in this Report are in agreement with the Books of Account.

d. In our opinion, the Profit & Loss Account, Balance Sheet and the Cash Flow statement comply with the requirements of the accounting standards (AS) referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except non accounting of interest on accrual basis and non provision of Liabilities as per AS-29 refer Note No. 1 to 5 in Schedule N.

e. Based on the representations made by the Directors of the Company and the information and explanations as made available, Directors of the Company do not prima facie have any disqualification as referred to in clause (g) of Sub-section (1) to Section 274 of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanation given to us, the said Accounts, subject to para (d), above the impact of non accounting of interest / liabilities is that the profit for the year is overstated by Rs 133.98 Lacs and cumulative impact is that the liabilities are understated by Rs.4223.57 Lacs Refer Note No. 2(a,b) and 3(a,b) of schedule N. Also providing of Depreciation @ 5.28% on Sugar work Rollers where as eligible depreciation as per schedule XIV of Companies Act is 100% refer 2.b in schedule O, the impact is that the profit for the year is understated by Rs.4.91 Lacs & cumulative impact is

that the assets are shown more by Rs.29.19 Lacs. Also Refer Note No. 6 in Schedule N regarding non-confirmation / reconciliation of Sundry Debtors, Creditors, Secured Loans, Unsecured Loans, Loans and Advances, other Current Assets and Current Liabilities the impact of which on Assets/Liabilities and Loss is unascertained gives the information required by the Companies Act, 1956, in the manner so required and give a true and fair view.

i. in the case of the Balance Sheet, of the State of Affairs of the Company as at 31 st March, 2007; and

ii. in the case of the profit and Loss Account, of the profit of the Company for the year ended on that date.

iii. in the case of the Cash Flow Statement, of the Cash Flow for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

Referred to in paragraph 1 of our report of even date:

i. a. The Company has maintained proper records showing full particulars, including quantitative details and situations of Fixed Assets, which is required to be updated.

b. As explained to us, 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. As informed to us, no material discrepancies were noticed on such verifications.

c. According to the information and explanations furnished to us, the Company has not disposed off a substantial part of its fixed assets during the year.

ii. a. According to the information and explanations furnished to us, the Management has physically verified inventories during the year. In our opinion, the frequency of such verification is reasonable.

b. In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. According to the information furnished to us, the Company is maintaining proper records of its inventory and the discrepancies, if any, noticed on verification between the physical stocks and the book records were not material, and have been properly dealt within the books of account.

iii. a. There is one company covered in the register maintained under section 301 of the Companies Act, 1956 to which the company has granted loans. The maximum amount involved during the year was Rs.0.88 lacs and the year end balance of loans granted to such parties was Rs.NIL

b. As the terms and conditions on which loans have been granted are not stipulated we are unable to comment, whether the same are prima facie prejudicial to the interest of the company.

c. In the absence of the terms and conditions for repayment of the above loans, we are unable to comment whether the parties are regular in repayment of principal amount and interest.

d. In the absence of the terms and conditions, we are unable to comment whether there is any overdue amounts of loans granted to companies, need under section 301 of Companies Act 1956.

e. The company has not taken any loans from companies covered in the register maintained under section 301 of the Companies Act, 1956.

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 and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal controls.

v. a. Based on the information and explanations given to us, we are of the opinion that the transactions that are required 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, during the year the Company has not entered into any transactions pursuant to contract entered in the register maintained under section 301 of Companies Act, 1956 and having an aggregate value exceeding Rs. 5 lacs in respect of each party.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any fresh deposits during the year within the purview of Section 58A and 58AA or any other related provisions of the Companies Act 1956.

vii. In our opinion and according to the information and explanations given to us, the Company has internal audit system by its own staff. In our opinion, considering the size and nature of Companys business, the Internal Audit systems need to be further strengthened.

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

ix. a. In our opinion and according to the information and explanation given to us the company is generally regular in depositing undisputed statutory dues including Income Tax, Sales Tax, Excise duty and other Statutory dues with appropriate authorities except Provident Fund, Professional Tax which has been deposited with delays / not deposited.

b. In our opinion and according to the information and explanations given to us, the undisputed statutory dues outstanding as at 31 -03-2007 for a period of more than six months are Purchase Tax and CDCF of Rs.356.56 lacs.

c. In our opinion and according to the information and explanations given to us the following amount of sales tax has been disputed by the Company and hence, were not deposited with the concerned authorities as at 31 st March, 2007.

SI.No. Nature of Dues Name of Statute Amount Pending before

1. Sales Tax APGST1957 22.80 lacs Sales Tax Appellate Tribunal Hyd.

x. In our opinion and according to the information and explanations given to us, Companys accumulated losses at the end of the Financial year after considering the quantified qualifications, are more than 50% of its net worth, it has not incurred cash loss in current financial year as per books and also not incurred cash losses in immediately preceding financial year. The qualification which is not being quantified, the effect of such unquantified qualification has not been taken into consideration for the purpose of this clause.

xi. In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues, to the financial institutions, the details for which as per books are given below. The Company has not issued any debentures.

SI. No. Name of the Bank Default

1. I I B I 324.27 Lacs

2. IF CI 825.29 Lacs

xii. According to the information 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.

xiii. In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society and hence, the requirements of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company during the year under report.

xiv. According to the information furnished to us, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the requirements of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

xv. 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 and Financial Institutions.

xvi. Based on information and explanations given to us by the management, during the year term loans were applied for the purpose for which the loans were obtained.

xvii. According to the information and explanations given to us and on an over all examination of the Balance Sheet of the Company, we report that the funds raised on short-term basis have, prima facie, not been used for long term investment.

xviii.According to information and explanations furnished to us, the company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Act.

xix. According to the information and explanations given to us, the Company has not issued any debentures during the year under report.

xx. The Company has not raised any monies through public issue of its securities 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 Lakshminiwas & Jain Chartered Accountants

Place : Hyderabad B. Ramesh Kumar Date : 4th September, 2007 Partner Membership No. 200304

---

Mar 31, 2006

ANNUAL REPORT 2005-2006

AUDITORS' REPORT

To The Members, PRUDENTIAL SUGAR CORPORATION LIMITED

1. We have audited the attached Balance sheet of M/s. PRUDENTIAL SUGAR CORPORATION LIMITED, as at 31st March, 2006 and the profit and Loss Account of the Company for the year ended on that date and also the cash flow statement for the year ended 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 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 misstatements. An audit includes, examining on a test basis, evidence supporting the amounts and disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the 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 Section 227 (4A) 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 in paragraph 3 above, we report that:

a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 appears from our examination of such books.

c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement referred to in this Report are in agreement with the Books of Account.

d. In our opinion, the Profit & Loss Account, Balance Sheet and the Cash Flow statement comply with the requirements of the accounting standards (AS) referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except non accounting of interest on accrual basis and non provision of Liabilities as per AS-29 refer Note No 2 (a to e) and 3 of schedule 'O'.

e. Based on the representations made by the Directors of the Company and the information and explanations as made available, Directors of the Company do not prima facie have any disqualification as referred to in clause (g) of Sub-section (1) to Section 274 of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanation given to us, the said Accounts, subject to para (d), above the impact of non accounting of interest / liabilities is that the profit for the year is overstated by Rs 1574.68 Lacs and cumulative impact is that the liabilities are understated by Rs.5048.38 Lacs Refer Note No. 2(a to e) and 3 of schedule 'O'. Also providing of Depreciation @5.28% on Sugar work Rollers where as eligible depreciation as per schedule XIV of Companies Act is 100% refer 2.b in schedule P, the impact is that the profit for the year is understated by Rs.4.91 Lacs & cumulative impact is that the assets are shown more by Rs.34.11 Lacs. Also Refer Note No. 5 regarding non- confirmation / reconciliation of Sundry Debtors, Creditors, Secured Loans, Unsecured Loans, Loans and Advances, other Current Assets and Current Liabilities the impact of which on Assets/Liabilities and Profit is unascertained and Note No.7 of Schedule O' regarding non redemption of Promoters Preference Shares, the impact of which is that the Current Liabilities are understated by Rs.408 lacs and Capital is overstated by Rs.408 Lacs, gives the information required by the Companies Act, 1956, in the manner so required and give a true and fair view.

i. in the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2006; and

ii. in the case of the profit and Loss Account, of the profit of the Company for the year ended on that date.

iii. in the case of the Cash Flow Statement, of the Cash Flow for the year ended on that date.

For Lakshminiwas & Jain Chartered Accountants

B. Ramesh Kumar Partner Membership No. 200304

Place : Hyderabad Date : 10.08.2006

ANNEXURE TO THE AUDITORS' REPORT

Referred to in paragraph 1 of our report of even date:

i. a. The Company has maintained proper records showing full particulars, including quantitative details and situations of Fixed Assets, which is required to be updated.

b. As explained to us, 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. As informed to us, no material discrepancies were noticed on such verifications.

c. According to the information and explanations furnished to us, the Company has not disposed off a substantial part of its fixed assets during the year.

ii. a. According to the information and explanations furnished to us, the Management has physically verified inventories during the year. In our opinion, the frequency of such verification is reasonable.

b. In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. According to the information furnished to us, the Company is maintaining proper records of its inventory and the discrepancies, if any, noticed on verification between the physical stocks and the book records were not material, and have been properly dealt within the books of account.

iii. a. There is one company covered in the register maintained under section 301 of the Companies Act, 1956 to which the company has granted loans. The maximum amount involved during the year was Rs.2.92 lacs and the year end balance of loans granted to such parties was Rs.0.61 lacs.

b. As the terms and conditions on which loans have been granted are not stipulated we are unable to comment, whether the same are prima facie prejudicial to the interest of the company.

c. In the absence of the terms and conditions for repayment of the above loans, we are unable to comment whether the parties are regular in repayment of principal amount and interest.

d. In the absence of the terms and conditions, we are unable to comment whether there is any overdue amounts of loans granted to companies, need under section 301 of Companies Act 1956.

e. The company has not taken any loans from companies covered in the register maintained under section 301 of the Companies Act, 1956.

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 and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal controls.

v. a. Based on the information and explanations given to us, we are of the opinion that the transactions that are required to be entered in n 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, during the year the Company has not entered into any transactions pursuant to contract entered in the register maintained under section 301 of Companies Act, 1956 and having an aggregate value exceeding Rs. 5 lacs in respect of each party.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any fresh deposits during the year within the purview of Section 58A and 58AA or any other related provisions of the Companies Act 1956.

vii. In our opinion and according to the information and explanations given to us, the Company has internal audit system commensurate with its size and nature of its business, which needs to be further strengthened.

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

ix. a. In our opinion and according to the information and explanation given to us the company is generally regular in depositing undisputed statutory dues including Income Tax, Sales Tax, Excise duty and other Statutory dues with appropriate authorities except Provident Fund, Professional Tax which has been deposited with delays / not deposited.

b. In our opinion and according to the information and explanations given to us, the undisputed statutory dues outstanding as at 31-03-2006 for a period of more than six months are Purchase Tax and CDCF of Rs.341.96 lacs.

c. In our opinion and according to the information and explanations given to us the following amount of sales tax has been disputed by the Company and hence, were not deposited with the concerned authorities as at 31-03- 2006.

S. No. Nature of Dues Name of Statute Amount Pending before

1. Sales Tax APGST 1957 22.80 lacs Sales Tax Appellate Tribunal Hyd.

x. In our opinion and according to the information and explanations given to us, Company's accumulated losses at the end of the Financial year after considering the quantified qualifications, the losses are more than 50% of its net worth, it has not incurred cash loss in current financial year as per books but incurred cash loss in the year immediately preceding financial year.

xii. In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues, to the financial institutions, the details for which as per books are given below. The Company has not issued any debentures.

Sl. No. Name of the Bank Default

1. IIBI 324.27 Lacs 2. IFCI 976.70 Lacs

xii. According to the information 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.

xiii. In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society and hence, the requirements of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company during the year under report.

xiv. According to the information furnished to us, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the requirements of clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

xv. 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 and Financial Institutions.

xvi. In our opinion and according to the information and explanations given to us, the Company has not taken any Term Loans during the year.

xvii. According to the information and explanations given to us and on an over all examination of the Balance Sheet of the Company, we report that the funds raised on short-term basis have, prima facie, not been used for long term investment.

xviii. According to information and explanations furnished to us, the company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Act, or to any others.

xix. According to the information and explanations given to us, the Company has not issued any debentures during the year under report.

xx. The Company has not raised any monies through public issue of its securities 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 Lakshminiwas & Jain Chartered Accountants

B. Ramesh Kumar Partner Membership No. 200304

Place : Hyderabad Date : 10.08.2006

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Mar 31, 2005

1. We have audited the attached Balance Sheet of M/s. PRUDENTIAL SUGAR CORPORATION LIMITED, as at 31st March, 2005 and the Profit and Loss Account of the Company for the year ended on that date and also the Cash flow statement for the year ended 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 conducted ouraudit 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 misstatements. 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 the 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 Section 227 (4A) 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 in paragraph 3 above, we report that:

a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 appears from our examination of such books.

c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement referred to in this Report are in agreement with the Books of Account.

d. In our opinion, the Profit & Loss Account, Balance Sheet and the Cash Flow statement comply with the requirements of the accounting standards (AS) referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except non accounting of interest on accrual basis and non provision of Liabilities as per AS-29 refer Note No 2(a to e) and 3 of Schedule 0.

e. Based on the representations made by the Directors of the Company and the information and explanations as made available, Directors of the Company do not prima facie have any disqualification as referred to in clause (g) of sub-section (I) to Section 274 of the Companies Act, 1956.

f. We draw the attention to Note No. 6 of Schedule 0 regarding change in method of valuation of stock of Sugar, due to which the loss is shown more by Rs. 257.68 lacs.

g. In our opinion and to the best of our information and according to the explanation given to us, the said Accounts, subject to para (d), above the Impact of non accounting of interest/liabilities is that the loss for the year Is understated by Rs. 1767.33 Lacs and cumulative impact is that the loss/liabilities are understated by Rs.3116.43 Lacs - Refer Note No. 2(a to e) and 3 of Schedule 0. Also Refer Note No. 4 of Schedule 0 regarding non-provision of loss on Investments/Loans to subsidiaries and Note No. 5 regarding non-confirmation/reconciliation of Sundry Debtors, Creditors, Secured Loans, Unsecured Loans, Loans and Advances, other Current Assets and Current Liabilities the Impact of which on Assets/Liabilities and Loss is unascertained and Note No. 7 of Schedule 0, regarding non redemption of Promoters Preference Shares, the impact of which Is that the Current Liabilities are under- stated by Rs.26B Lacs and Capital Is overstated by Rs.268 Lacs, gives the information required by the Companies Act, 1956, in the manner so required and give a true and fair view:

i. in the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2005;and

ii. in the case of the Profit and Loss Account, of the Loss of the Company for the year ended on that date.

iii. in the case of the Cashi Flow Statement, of the Cash Flow for the year ended on that date.

For Lakshminiwas & Jain Chartered Accountants Place : Hyderabad B. Ramesh Kumar Date : 06.06.2005 Partner Membership No. 200304

ANNEXURE TO THE AUDITORS 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 situations of Fixed Assets, which is required to be updated.

b. As explained to us, 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. As informed to us, no material discrepancies were noticed on such verifications.

c. According to the information and explanations furnished to us, the company has not disposed off a substantial part of its fixed assets during the year.

8. a. According to the information and explanations furnished to us, the Management has physically verified inventories during the year. In our opinion, the frequency of such verification is reasonable.

b. In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. According to the information furnished to us, the company is maintaining proper records of its inventory and the discrepancies, if any, noticed on verification between the physical stocks and the book records were not material, and have been properly dealt with in the books of account.

iii. a. There are three companies covered in the register maintained under section 301 of the Companies Act, 1956 to which the Company has granted loans. The maximum amount involved during the year was Rs.236.16 Lacs and the year end balance of loans granted to such parties was Rs.233.03 Lacs .

b. As the terms and conditions on which loans have been granted are not stipulated we are unable to comment, whether the same are prima facie prejudicial to the interest of the company.

c. In the absence of the terms and conditions for repayment of the above loans, we are unable to comment whether the parties are regular in repayment of principal amount and interest.

d. In the absence of the terms and conditions, we are unable to comment whether there is any overdue amounts of loans granted to companies, firms or other parties listed in the register maintained under section 301 of Companies Act 1956.

e. The Company has not taken any loans from Companies covered in the register maintained under section 301 of the Companies Act, 1956.

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 and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal controls.

V. a. Based on the information and explanations given to us, we are of the opinion that the transactions that are required 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, during the year the company has not entered into any transactions pursuant to contract entered in the register maintained under section 301 of Companies Act, 1956 and having an aggregate value exceeding Rs. 5 lacs in respect of each party.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any fresh deposits during the year within the purview of Section 56A and 58AA or any other related provisions of the Companies Act 1956.

vii. In our opinion and according to the information and explanations given to us, the Company has internal audit system commensurate with to size and nature of its business, which needs to be further strengthened.

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

ix. a. In our opinion and according to the information and explanations given to us the company is regular in depositing undisputed statutory dues including Income Tax, Sales Tax, Excise Duty and other statutory dues with appropriate authorities except Provident Fund, Professional Tax and Service Tax which has been deposited with delays/not deposited.

b. In our opinion and according to the information and explanations given to us, the undisputed statutory dues outstanding as at 31-3-2005 for a period of more than six months are Investor Education and Protection Fund of Rs.0.19 lacs and Purchase Tax/CDCF of Rs.352.45 lacs and Provident Fund Rs.8.49 lacs.

c. In our opinion and according to the information and explanations given to us the following amount of Sales Tax has been disputed by the Company and hence, were not deposited with the concerned authorities as at 31-03-2005.

SI.No. Nature of Dues Name of Statute Amount Pending before

1. Sales Tax APGST1957 22.80 lacs Sales Tax Appellate Tribunal Hyd.

x. In our opinion and according to the information and explanations given to us, Companys accumulated losses at the end of the Financial year are Rs.3295.98 lacs after considering the quantified qualification. The losses are more than 50% of its net worth and it has incurred cash loss in current financial year and financial year immediately preceding current year after considering the effect of the qualification on the figures of losses. The qualification which is not being quantified, the effect of such unquantified qualification has not been taken into consideration for the purpose of this clause.

xi. In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues, to the financial institutions, the details for which as per books are given below. The Company has not issued any Debentures.

Sl. No. Name of the FIs Amount of Default (Rs. in Lakhs)

1. IIBI 324.27

2. IFCI 976.70

xii. According to the information 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.

xiii. In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/mutual benefit fund/society and hence, the requirements of clause 4(xlii) of the Companies (Auditors Report) Order , 2003 are not applicable to the Company during the year under report.

xiv. According to the information furnished to us, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the requirements of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

xv. 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 Bank and Financial Institutions.

xvi. In our opinion and according to the information and explanations given to us, the Company has not taken any Term Loans during the year.

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 the funds raised on short-term basis have, prima facie, not been used for long term investment.

xviii. According to information and explanations furnished to us, the Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Act, or to any others.

xix. According to the information and explanations given to us, the Company has not issued any Debentures during the year under report.

xx. The company has not raised any monies through public issue of its securities 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 Lakshminiwas & Jain Chartered Accountants Place: Hyderabad B. Ramesh Kumar Date : 06.06.2005 Partner Membership No. 200304

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Mar 31, 2003

1. We have audited the attached Balance Sheet of M/s. PRUDENTIAL SUGAR CORPORATION LIMITED, as at March 31,2003 and the Profit and Loss Account of the Company for the year on that date and also the Cash flow statement for the year ended 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 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 misstatements. 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 the 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 Manufacturing and Other Companies (Auditor's Report) Order, 1988, issued by the Central Government of India in terms of Section 227 (4A) 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 in paragraph 3 above, we state 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 appears from our examination of such books.

c) The Balance Sheet and Profit and Loss account referred to in this Report are in agreement with the books of account.

d) In our opinion, the Profit and Loss account, Balance Sheet and the Cash Flow statement comply with the requirements of the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except for the valuation of Inventory at cost price, which includes depreciation, interest and other administrative cost which is not in accordance with the Accounting Standards "Valuation of Inventories" as stated in significant accounting policies shown in Schedule `P'and non accounting of Interest on accrual basis refer note 4 in schedule `O'.

e) Based on the representations made by the directors of the Company and the information and explanations as made available, directors of the Company do not prima facie have any disqualification as referred to in clause (g) of sub-section (1) to Section 274 of the Companies Act, 1956.

In our opinion and to the best of our information and according to the explanations given to us, the said Accounts, subject to para (d) above, the impact of change In Accounting policies of inventory valuation from market to estimated cost, the impact of which Is that the loss Is understated by Rs. 973.86 lacs, and inventory overstated by Rs. 973.86 lacs had the cost is taken in accordance with the AS-2. The Impact of non accounting of interest on accrual basis is that the loss for the year Is shown less by Rs. 96.97 Lacs and liability shown less by Rs. 193.94 Lacs (refer Note 4 of Schedule `O') and Note No. 2 of Schedule `O' regarding confirmation/reconciliation of sundry debtors, creditors, unsecured loans, loans and advances, other current assets and current liabilities. The impact of which on Assets/Liabilities and Loss Is unascertained, gives the information required by the Companies Act, 1956, in the manner so required and give a true and fair view:

i) in the case of the Balance Sheet, of the State of Affairs of the Company as at March 31, 2003; and

ii) in the case of the Profit and Loss Account, of the Loss of the Company for the year ended on that date.

For Lakshminiwas & Jain Chartered Accountants

Place : Nindra Laxminiwas Sharma Date : 04.09.2003 Partner

ANNEXURE TO THE AUDITORS' REPORT

Referred to in Paragraph 1 of our report of even date:

1. The Company has maintained proper records showing full particulars, including quantitative details and situations of Fixed Assets, which is required to be updated. As explained to us, 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. As informed to us, no material discrepancies were noticed on such verification.

2. None of the Fixed Assets have been revalued during the year.

3. The stocks of finished goods, raw materials, stores and spare parts have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

4. In our opinion, the procedures of physical verification of stocks, followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

5. The discrepancies noticed on verification between the physical stock as compared to book records were not material.

6. In our opinion and on the basis of our examinations, valuation of stock is fair and proper in accordance with the normally accepted accounting principles except inclusion of certain expenses, interest etc. which is not in accordance with AS-2.

7. In our opinion, the rate of interest and terms and conditions on which loans have been taken from Companies, Firms or other parties listed in the registers maintained under section 301 of the Companies Act, 1956 and Companies under the same management as defined under sub-section (1B) of section 370 of the said Act are not prima facie prejudicial to the interest of the Company.

8. In the absence of the terms and conditions on which loans and advances have been given to Companies, Firms or other parties listed in the registers maintained under Section 301 of the Companies Act, 1956 and other companies under the same management as defined under sub-section (1B) of Section 370 of the said Act, we are unable to opine whether the same are prima facie prejudicial to the interest of the Company or otherwise.

9. In the absence of terms and conditions, we are unable to comment whether the parties, including employees, to whom loans or advances in the nature of loans has been given by the Company are repaying the principal amounts as stipulated and are regular in the payment of interest, wherever applicable.

10. 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 for the purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for the sale of goods.

11. In our opinion and according to the information and explanations given to us the transactions of purchases of goods and materials and sale of goods, materials and services made pursuance of contracts or arrangements entered in the registers maintained under section 301 and aggregating during the year to Rs. 50,000/- or more in respect of each party have been made at prices which are reasonable having regard to prevailing market prices for such goods, materials or services have been made with other parties.

12. In our opinion and according to the information and explanations given to us, the Company has a regular procedure for the determination of unserviceable or damaged stores, raw materials and finished goods. Adequate provision has been made in the accounts for the loss on the items so determined.

13. In our opinion and according to information and explanations given to us, the Company has not accepted any fresh deposits during the year within the purview of Section 58A of the Companies Act, 1956.

14. In our opinion, reasonable records have been maintained by the Company for the sale and disposal of realisable scrap and by-products.

15. The Company does not have an internal Audit system commensurate with its size and nature of its business.

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

17. In our opinion and according to the information and explanations given to us, the Company is depositing Provident Fund dues with appropriate authorities with delays. As informed to us, Employee State Insurance Act is not applicable to the Company.

18. According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth-Tax, Sales-Tax, Customs Duty and Excise Duty were outstanding as at March 31, 2003 for a period of more than 6 months from the date they became payable.

19. According to the information and explanations given to us and the records examined by us, no personal expenses of employees or Directors have been charged to revenue account, other than those payable under contractual obligations or in accordance with generally accepted business practice.

20. The Company is not a Sick Industrial Company within the meaning of clause (O) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.

For Lakshminiwas & Jain Chartered Accountants

Place : Nindra Laxminiwas Sharma Date : 04.09.2003 Partner