Auditor Report of Vegepro Foods and Feeds Ltd.

Mar 31, 2014

We have audited the attached Balance Sheet of Vegepro Foods and Feeds Limited, as at 31st March, 2014 and also the annexed Profit & Loss Account and the Cash Flow Statement for the year ended as on that date. These financial statements are the responsibility of the Company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

As required by the Companies (Auditor''s Report) Order, 2003 as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that :

1. 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,

2. 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,

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

4. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Sub - Section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable except for comments in Para 6(a) & 6(b) below.

5. Except in case of Mr. Rajendra Sonkar, Nominee of PICUP in whose case no written representation u/s 274(1)(g) of the Companies Act, 1956 has been received by the Company, on the basis of the written representations received from all other directors of the Company as on 31st March 2014 and taken on the record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2014 from being appointed as a director u/s 274(1)(g) of the Companies Act, 1956.

6. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, subject to

(a) Note : 2.16 regarding closure of factory since 11.10.2000 and accounts having been prepared on the basis that the Company is a going concern,

(b) Note : 2.3 regarding non provision of interest on NCD''s.

read together with notes thereon, give the information as required by the Companies Act, 2013 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

(i) In the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2014;

(ii) in the case of the Profit and Loss Account, of the loss of the Company for the Year ended as on that date; and

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

Annexure to the Auditors'' Report

Referred to in paragraph 3 of our Report of even date on the Accounts for the year ended on 31st March, 2014 of Vegepro Foods and Feeds Limited.

(i) (a) The Company has maintained proper Records showing full particulars including Quantitative details and situation of Fixed Assets.

(b) The Fixed Assets have not been physically verified during the year by the management due to lockout in the factory.

(c) The Company has not made any disposal of its Fixed Assets during the year.

(ii) (a) The Company has no Inventories, hence question of physical verification does not arise.

(b) Para 4(ii) (b) & (c) of CARO Order is not applicable as Company has no inventory

(iii) According to information and explanations given to us, the company has neither granted nor taken during the year any Loans, Secured or Unsecured, to and from Companies, Firms or Other Parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (b) to (d) and (f) & (g) of the Order are not applicable to the Company

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and nature of its business for the sales of goods (Forestry/Horticulture product) and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of this area. Further due to closure of the factory there are no transactions of purchase of inventories and Fixed Assets.

(v) (a) In our opinion and according to the information and explanations given to us, there are no transactions that need to be entered into the Register maintained in pursuance of Section 301 of the Companies Act, 1956.

(b) In view of the above, clause (v) (b) of Paragraph 4 of the Companies (Auditor''s Report) Order 2003 is not applicable.

(vi) The Company has not accepted any deposits from the public within the meaning of Section 58A and Section 58AA of the Companies Act, 1956 and the rules framed there under. Therefore, the provisions of section 58A, 58AA and any other relevant provisions of the Companies Act, 1956 and the rules framed there under with regard to deposits accepted from the public are not applicable to the Company.

(vii) Internal Audit has not been carried out due to closure of factory during the year.

(viii) As informed by the management, the Central Government has not prescribed the maintenance of cost records by the Company under Section 209(1)( d) of the Companies Act, 1956 for any of its products.

(ix) (a) As explained to us, the Company in general is regular in depositing with the appropriate Authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues whenever applicable to it except in case of Investor Education and Protection Fund of unpaid Share Application Money of Rs. 2.25 lacs and TDS of Rs. 1.17 lacs which have not been deposited with appropriate Authorities.

(b) At the last day of the financial year, according to the records of the Company and the information and explanations given to us, there was no dues of Wealth Tax, Service Tax, Custom duty, Excise Duty and Cess which have not been deposited on account of any dispute. However, there are dues of Income tax and sales tax at the last day of the financial year which have not been deposited on account of disputes but as mentioned in Note : 2.17 management has not ascertained the amount of disputed Income tax and sales tax liability and also not provided to us the details of Authorities before which disputes are pending, we are unable to quantify the same.

(x) The Company''s accumulated Losses at the end of the financial year are Less than the total of Share Capital and Reserve & Surplus due to write off of Advances and Security and Other Deposits from Customers and Unsecured Loans in earlier Financial Years. However, the Company has incurred cash losses both during the Current Year as well as in the immediately preceding Financial Year.

(xi) The Company had defaulted in repayment of dues to financial institutions / debenture holders, detail of which are given below

Amount of default Period As per books of of account default

a. Debenture 35.65 lacs 15.03.98 issued to UTI (as per Note: 2.3)

(xii) In our opinion and according to the information and explanations given to us, and based on the documents and records produced to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, considering the nature of activities carried on by the company during the year, the provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the company.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) 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) The Company has not raised any new Term Loan during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the Financial Statements of the Company, we report that no funds raised on short term basis have been used for long term investments.

(xviii) The Company has not made any preferential allotment of shares during the year.

(xix) The Company has not issued any debentures during the current financial year.

(xx) The Company has not raised any money through public issue during the year.

(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 S. Mandal & Co. Chartered Accountants FRN — 314188E (Arijit Dutta) M. No. 066223 Partner Place : Kolkata Dated : 29th May, 2014

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Mar 31, 2012

We have audited the attached Balance Sheet of Vegepro Foods and Feeds Limited, as at 31st March, 2012 and also the annexed Profit & Loss Account and the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

1. 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,

2. 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,

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

4. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Sub - Section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable except for comments in para 6(a) to 6(j) below.

5. Except in case of Mr. Rajendra Sonkar, Nominee of PICUP in whose case no written representation u/s 274(1 )(g) of the Companies Act, 1956 has been received by the Company, on the basis of the written representations received from all other directors of the Company as on 31st March 2012 and taken on the record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2012 from being appointed as a director u/s 274(1 )(g) of the Companies Act, 1956.

6. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, subject to:

a. Note: 2.16 regarding closure of factory since

11.10.2000 and accounts having been prepared on the basis that the Company is a going concern,

b. Note: 2.3 regarding unreconciled balance of Unit Trust of India and non provision of interest on NCD's,

c. Note: 2.4 regarding unconfirmed balances of Trade Payables.

d. Note: 2.17 regarding appeals pending before Income Tax and Trade Tax authorities,

e. Note: 2.4 regarding non- disclosure of the amounts payable to Micro, Small and Medium Enterprises,

h. Note: 2.21 regarding non- provision of impairment losses,

i. Note: 2.7 regarding Capitalization of interest of Rs. 974.12 lacs on term loans and charging depreciation on interest amount, not in keeping with generally followed accounting principles and

j. Note: 2.11 regarding non- provision in respect of certain Loan and Advances of Rs.36.33 lacs, read together with notes thereon, give the information as required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

(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 the Profit and Loss Account, of the loss of the Company for the Year ended as on that date; and

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

Annexure to the Auditor's Report

Referred to in paragraph 3 of our Report of even date on the Accounts for the year ended on 31st March, 2012 of Vegepro Foods and Feeds Limited.

(i) (a) The Company has maintained proper Records showing full particulars including Quantitative details and situation of Fixed Assets.

(b) The Fixed Assets have not been physically verified during the year by the management due to lockout in the factory.

(c) The Company has not made any disposal of its Fixed Assets during the year.

(ii) (a) The Company has no Inventories, hence question of physical verification does not arise.

(b) Para 4(ii) (b) & (c) of CARO Order is not applicable as Company has no inventory

(iii) According to information and explanations given to us, the company has neither granted nor taken during the year any Loans, Secured or Unsecured, to and from Companies, Firms or Other Parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (b) to (d) and (f) & (g) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and nature of its business for the sales of goods (Forestry/Horticulture product) and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of this area. Further due to closure of the factory there are no transactions of purchase of inventories and Fixed Assets.

(v) (a) In our opinion and according to the information and explanations given to us, there are no transactions that need to be entered into the Register maintained in pursuance of Section 301 of the Companies Act, 1956.

(b) In view of the above, clause (v) (b) of Paragraph 4 of the Companies (Auditor's Report) Order 2003 is not applicable.

(vi) The Company has not accepted any deposits from the public within the meaning of Section 58A and Section 58 AA of the Companies Act, 1956 and the rules framed there under. Therefore, the provisions of section 58A, 58AA and any other relevant provisions of the Companies Act, 1956 and the rules framed there under with regard to deposits accepted from the public are not applicable to the Company.

(vii) Internal Audit has not been carried out due to closure of factory during the year.

(viii) As informed by the management, the Central Government has not prescribed the maintenance of cost records by the Company under Section 209 (1)

(d) of the Companies Act, 1956 for any of its products.

(ix) (a) As explained to us, the Company in general is regular in depositing with the appropriate Authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues whenever applicable to it except in case of Investor Education and Protection Fund of unpaid Share Application Money of Rs. 2.25 lacs and TDS of Rs.1.07 lacs which have not been deposited with appropriate Authorities.

(b) At the last day of the financial year, according to the records of the Company and the information and explanations given to us, there was no dues of Wealth Tax, Service Tax, Custom duty, Excise Duty and Cess which have not been deposited on account of any dispute. However, there are dues of Income tax and sales tax at the last day of the financial year which have not been deposited on account of disputes but as mentioned in Note:2.17 management has not ascertained the amount of disputed Income tax and sales tax liability and also not provided to us the details of Authorities before which disputes are pending, we are unable to quantify the same.

(x) The Company's accumulated Losses at the end of the financial year are Less than the total of Share Capital and Reserve & Surplus due to write off of Advances and Security and Other Deposits from Customers and Unsecured Loans in earlier Financial Years. However, the Company has incurred cash losses both during the Current Year as well as in the immediately preceding Financial Year.

(xi) The Company had defaulted in repayment of dues to financial institutions/debenture holders, detail of which are given below

Amount of Period default of as per books default of account

a. Debenture 35.65 lacs 15.03.98 issued to UTI (as per note : 2.3)

(xii) In our opinion and according to the information and explanations given to us, and based on the documents and records produced to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, considering the nature of activities carried on by the company during the year, the provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the company.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) 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) The Company has not raised any new Term Loan during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the Financial Statements of the Company, we report that no funds raised on short term basis have been used for long term investments.

(xviii) The Company has not made any preferential allotment of shares during the year.

(xix) The Company has not issued any debentures during the current financial year.

(xx) The Company has not raised any money through public issue during the year.

(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 S. Mandal & Co.

Chartered Accountants

Firm Regn. No. : 314188E

(Arijit Dutta)

M. No. 066223

Partner

Place : Kolkata

Dated : 6th September, 2012

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Mar 31, 2011

We have audited the attached Balance Sheet of Vegepro Foods and Feeds Limited, as at 31st March, 2011 and also the annexed Profit & Loss Account and the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

1. 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.

2. 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,

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

4. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Sub - Section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable except for comments in para 6(a) to 6(j) below.

5. Except in case of Mr. N.G.Vidyarthi, Nominee of PICUP in whose case no written representation u/s 274(1)(g) of the Companies Act, 1956 has been received by the Company, on the basis of the written representations received from all other directors of the Company as on 31st March 2011 and taken on the record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2011 from being appointed as a director u/s 274(1 )(g) of the Companies Act, 1956.

6. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, subject to :

a) note no. 5 of Schedule '13' regarding closure of factory since 11.10.2000 and accounts having been prepared on the basis that the Company is a going concern,

b) note no. 6 of Schedule '13' regarding unreconciled balance of Unit Trust of India and non provision of interest on NCD's,

c) note no. 7 of Schedule '13' regarding unconfirmed balances of Sundry Creditors and Loans and Advances,

d) note no.8 of Schedule '13' regarding Physical verification of Inventories and write off of entire Inventories,

e) note no. 9 & 10 of Schedule '13' regarding appeals pending before Income Tax and Trade Tax Authorities,

f) note no. 11 of Schedule '13' regarding Investments, Fixed Deposits and Other Current Assets written off,

g) note no. 16 of Schedule '13' regarding non-- disclosure of the amounts payable to Micro, Small and Medium Enterprises,

h) note no.17 of Schedule '13' regarding non- provision of impairment losses.

i) note no. 3 of Schedule '13' regarding Capitalization of interest of Rs. 974.12 lacs on term loans and charging depreciation on interest amount, not in keeping with generally followed accounting principles and

j) note no.4 of schedule '13' regarding non- provision in respect of certain Loan and Advances of Rs.54.01 lacs, read together with notes thereon, give the information as required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(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 loss of the Company for the Year ended as on that date; and

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

Annexure to the Auditor's Report

Referred to in paragraph 3 of our Report of even date on the Accounts for the year ended on 31st March, 2011 of Vegepro Foods and Feeds Limited.

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) The Fixed Assets have not been physically verified during the year by the management due to lockout in the factory.

(c) The Company has not made any disposal of its Fixed Assets during the year.

(ii) (a) The Inventories have not been physically verified by the management during the year.

(b) We are unable to give our comments on Para 4(ii) (b) & (c) of CARO Order as no physical verification was carried out by the management due to closure of the factory since 11.10.2000. However, the entire Inventories have been written off during the year.

(iii) According to information and explanations given to us, the company has neither granted nor taken during the year any Loans, Secured or Unsecured, to and from Companies, Firms or other Parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (b) to (d) and (f) & (g) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and nature of its business for the sales of goods (Forestry/Horticulture product) and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of this area. Further due to closure of the factory there are no transactions of purchase of inventories and Fixed Assets.

(v) (a) In our opinion and according to the information and explanations given to us, there are no transactions that need to be entered into the Register maintained in pursuance of Section 301 of the Companies Act, 1956.

b) In view of the above, clause (v) (b) of Paragraph 4 of the Companies (Auditor's Report) Order 2003 is not applicable.

(vi) The Company has not accepted any deposits from the public within the meaning of Section 58A and Section 58 AA of the Companies Act, 1956 and the rules framed there under. Therefore, the provisions of section 58A, 58AA and any other relevant provisions of the Companies Act, 1956 and the rules framed there under with regard to deposits accepted from the public are not applicable to the Company.

(vii) Internal Audit has not been carried out due to closure of factory during the year.

(viii) As informed by the management, the Central Government has not prescribed the maintenance of cost records by the Company under Section 209(1) (d) of the Companies Act, 1956 for any of its products.

(ix) (a) As explained to us, the company in general is regular in depositing with the appropriate Authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues whenever applicable to it except in case of Investor Education and Protection Fund of unpaid share application money of Rs. 2.25 lacs and TDS of Rs. 0.54 lacs which has not been deposited with appropriate Authority.

(b) At the last day of the financial year, according to the records of the Company and the information and explanations given to us, there was no dues of Wealth Tax, Service Tax, Custom duty, Excise Duty and Cess which have not been deposited on account of any dispute. However, there are dues of Income tax and sales tax at the last day of the financial year which have not been deposited on account of disputes but as mentioned in note no. 9 and 10 of Schedule '13' management has not ascertained the amount of disputed Income tax and sales tax liability and also not provided to us the details of Authorities before which disputes are pending, we are unable to quantify the same.

(x) The Company's accumulated Losses at the end of the financial year are less than the total of Share Capital and Reserve & Surplus due to write off of Advances and Security and Other Deposits from customers and Unsecured Loans in earlier Financial Years. However, the Company has incurred cash loss both during the Current as well as in the immediately preceding Financial Year.

(xi) The Company had defaulted in repayment of dues to Financial Institutions/debenture holders, detail of which are given below

Amount of Period default of as per books default of account

a. Debenture 35.65 lacs 15.03.98 issued to UTI (as per note no. 6 of Schedule '13')

(xii) In our opinion and according to the information and explanations given to us, and based on the documents and record produced before us, the company has not granted any Loans and Advances on the basis of security by way of pledge of Shares, Debentures and Other Securities.

(xiii) In our opinion, considering the nature of activities carried on by the Company during the year, the provisions of any special statute applicable to Chit Fund/Nidhi/Mutual Benefit Fund/Societies are not applicable to the Company.

(xiv) The Company is not dealing or trading in Shares, Securities, Debentures and Other Investments.

(xv) 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) The Company has not raised any new Term Loan during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the Financial Statements of the Company, we report that no funds raised on short term basis have been used for long term investments.

(xviii) The Company has not made any preferential allotment of shares during the year.

(xix) The Company has not issued any debentures during the current financial year.

(xx) The Company has not raised any money through public issue during the year.

For S. Mandal & Co. Chartered Accountants Firm Regn. No. : 314188E

(Hiran Chandra Dey) M. No. 050190 Partner

Place : Kolkata Dated : 3rd September, 2011

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Mar 31, 2010

We have audited the attached Balance Sheet of Vegepro Foods and Feeds Limited as at 31st March, 2010, Cash Flow Statement and the Profit and Loss Account for the year ended as on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our report.

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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order 2003 issued by the Central Government in term of Section 227(4A) of the Companies Act, 1956, we enclosed in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

1. 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.

2. 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,

3. The Balance Sheet and Profit and Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of accounts.

4. In our opinion the Profit and Loss Account and Balance Sheet complied with the mandatory Accounting Standards referred to in Sub - Section (3C) of Section 211 of the Companies Act, 1956 except for comments in para 6(d), 6(h), 6(i) and 6(j) below.

5. Except in case of Mr. N.G.Vidyarthi, Nominee of PICUP in whose case no written representation u/s 274(1 )(g) of the Companies Act, 1956 has been received by the Company, on the basis of the written representations received from all other directors of the company and taken on the record by the company. We report that all other directors are not disqualified as on 31st March, 2010 from being appointed as director u/s 274(1 )(g) of the Companies Act, 1956.

6. In our opinion, and to the best of our information and according to the explanations given to us, the said financial statements, Subject to :

a. note no. 5 of Schedule 14 regarding closure of factory since 11.10.2000 and accounts having been prepared on the basis that the Company is a going concern,

b. note no. 6 of Schedule 14 regarding unreconciled balance of Unit Trust of India and non provision of interest on NCDs,

c. note no. 8 of Schedule 14 regarding unconfirmed balances of sundry debtors, creditors and loan and advances,

d. note no. 9 of Schedule 14 regarding physical verification of stock and valuation of the stock of raw material, packing material and stores and spare parts,

e. note no. 11 of Schedule 14 regarding appeals pending before Trade Tax authorities,

f. note no. 12 of Schedule 14 regarding Investments and Fixed Deposits,

g. note no. 17 of Schedule 14 regarding non disclosure of the amounts payable to Small Scale Industries,

h. note no. 20 of Schedule 14 regarding non provision of impairment losses.

i. note no. 21 of Schedule 14 regarding non-determination of liability of gratuity as per actuarial valuation. The effect of which on years result and the year-end net worth could not be determined,

j. note no. 3 of Schedule 14 regarding capitalization of interest of Rs. 974.12 lacs on term loans and charging depreciation on interest amount, not in keeping with generally followed accounting principles,

k. note no. 19 of schedule 14 regarding Advances/Security deposits written back didnt verifiy,

I. note no. 24 of schedule 14 regarding valuation of stock, the value of raw material and packing material taken as nil value however inventory as per schedule 6 carries a value of Rs 24.2 lacs which should have been written off to that extent profit has been over stated and,

m. note no.4 of schedule 14 regarding non-provision in respect of certain loan and advances and deposits of Rs.81.56 lacs, and read together with, significant accounting policies and other notes thereon give the information required by the Companies Act, 1956 in the manner

so required and give a true and fair view in conformity with the accounting principal generally accepted in India:

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

(ii) in the case of the Profit and Loss Accounts, of the Profit of the Company for the Year ended on that date.

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

Annexure to the Auditors Report

Referred to in paragraph 3 of our report of even date on the accounts for the year ended on 31st March, 2010 of Vegepro Foods and Feeds Limited.

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

(b) The fixed assets have not been physically verified during the year by the management due to lockout in the factory.

(c) The Company has not made any disposal of its Fixed assets during the year.

(ii) (a) The Inventories have not been physically verified by the management during the year.

(b) We are unable to give our comments on Para 4(ii) (b) & (c) of CARO Order as no physical verification was carried out by the management due to closure of the factory.

(iii) According to information and explanations given to us, the company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, hence Clause (iii) (a) to (g) of paragraph 4 of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and nature of its business for the sales of goods (Forestry/Horticulture product) and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of this area. Further due to closure of the factory there are no transactions of purchase of inventories and fixed assets.

(v) (a) In our opinion and according to the information and explanations given to us, there are no transactions that need to be entered into the register maintained in pursuance of Section 301 of the Companies Act, 1956.

b) In view of the above, clause (v)(b) of Paragraph 4 of the Companies (Auditors Report) Order 2003 is not applicable.

(vi) The Company has not accepted any deposits from the public within the meaning of Section 58A or Section 58 AA of the Companies Act, 1956.

(vii) Internal audit has not been carried out due to closure of factory during the year.

(viii) As informed by the management, the Central Government has not prescribed the maintenance of cost records by the Company under Section 209(1 )(d) of the Companies Act, 1956 for any of its products.

(ix) (a) As explained to us, the Company is generally regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues whenever applicable to it except in case of Investor Education and Protection Fund of unpaid share application money of Rs. 2.25 lacs which has not been deposited with appropriate authority.

(b) At the last day of the financial year, according to the records of the Company and the information and explanations given to us there was no dues of, Wealth Tax, Service Tax, Custom duty, Excise Duty and Cess which have not been deposited on account of any dispute. However there are dues of Income Tax and Sales Tax at the last day of financial year which have not been deposited on account of disputes but as mentioned in note no. 10 and 11 of Schedule 14 management has not ascertained the amount of disputed Income tax and sales tax liability and also not provided to us the detail of authorities before which dispute is pending, we are unable to quantify the same.

(x) The Companys accumulated losses at the end of the financial year are more than fifty percent of its net worth and the Company has incurred cash loss during the preceding year but due to written oft of some credit balances of other liabilities company has incurred 0.34 lacs cash loss during the current financial year.

(xi) The Company had defaulted in repayment of dues to financial institutions/debenture holders, details of which are given below :

Amount of Period default of as per books default of account

a. Debenture 35.65 lacs 15.03.98 issued to UTI (as per note no. 6 of Schedule14)

ixii) In our opinion and according to the information and explanations given to us, and based on the documents and record produced to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, considering the nature of activities carried on by the Company during the year, the provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) 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) The Company has not raised any new 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 no funds raised on short term basis have been used for long term investments.

(xviii) The Company has not made any preferential allotment during the year.

(xix) The Company has not issued any debentures during the current financial year.

(xx) The Company has not raised any money through public issue during the year.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For S. Mandal & Co. Chartered Accountants Firm Regn. No. : 314188E

(Arijit Dutta) M. No. 066223 Partner

Place : Kolkata

Dated : 3rd September, 2010

---

Mar 31, 2009

We have audited the attached Balance Sheet of Vegepro Foods and Feeds Limited as at 31st March, 2009, Cash flow Statement and the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our report.

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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors, Report) Order 2003 issued by the Central Government in term of Section 227(4A) of the Companies Act, 1956, we enclosed in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

1. 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.

2. 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.

3. The Balance Sheet and Profit and Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of accounts.

4. In our opinion the Profit and Loss Account and Balance Sheet complied with the mandatory accounting standards referred to in Sub - Section (3C) of Section 211 of the Companies Act, 1956 except for comments in para 6(d), 6(h), 6(i) and 6(j) below.

5. Except in case of Mr. R.K. Gupta, Nominee of PICUP in whose case no written representation u/s 274(1 )(g) of the Companies Act, 1956 has been received by the company, on the basis of the written representations received from all other directors of the company and taken on the record . by the company. We report that all other directors are not disqualified as on 31st March, 2009 from being appointed as director u/s 274(1 )(g) of the Companies Act, 1956.

6. In our opinion, and to the best of our information and according to the explanations given to us, the said financial statements, Subject to :

a. note no. 5 of Schedule N regarding closure of factory since 11.10.2000 and accounts having been prepared on the basis that the Company is a going concern,

b. note no. 6 of Schedule N regarding unreconciled balance of Unit Trust of India and non provision of interest on NCDs,

c. note no. 8 of Schedule N regarding unconfirmed balances of sundry debtors, creditors and loan and advances and unreconciled bank accounts,

d. note no. 9 of Schedule N regarding physical verification of stock and valuation of the stock of raw material, packing material and stores and spare parts,

e. note no. 11 of Schedule N regarding appeals pending before Trade Tax authorities,

f. note no. 12 of Schedule N regarding investments and fixed deposits,

g. note no. 17 of Schedule N regarding non- disclosure of the amounts payable to small Scale industries,

h. note no. 22 of Schedule N regarding non- provision of impairment losses.

i. note no. 23 of Schedule N regarding non- determination of liability of gratuity as per actuarial valuation. The effect of which on years result and the year-end net worth could not be determined and subject to

j. note no. 3 of Schedule N regarding capitalisation of interest of Rs. 974.12 lacs on term loans and charging depreciation on interest amount, not in keeping with generally followed accounting principles and

k. note no. 4, of Schedule N regarding non- provision in respect of certain loan and advances and deposits of Rs. 30.27 lacs,

with corresponding effects of Rs. 33.51 lacs (the Profit for the year would have been for Rs. 411.68 lacs as against reported figure of Rs. 378.17 lacs) on years result and of Rs. 267.72 lacs (Debit balance in profit and loss account would have been for Rs. 2906.29 lacs as against reported figure of Rs. 2638.57 lacs) on the year end net worth of the company, and read together with significant accounting policies and other notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principal generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2009; and

(ii) in the case of the Profit and Loss Accounts, of the Profit of the Company for the Year ended , on that date.

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

Annexure to the Auditors Report

Referred to in paragraph 3 of our report of even date on the accounts for the year ended on 31st March, 2009 of Vegepro Foods and Feeds Limited.

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

(b) The fixed assets have not been physically verified during the year by the management due to lockout in the factory.

(c) The Company has not made any disposal of its Fixed assets during the year.

(ii) (a) The Inventories have not been physically verified by the management during the year.

(b) We are unable to give our comments on Para 4(ii) (b) & (c) of CARO Order as no physical verification was carried out by the management due to closure of the factory.

(iii) According to information and explanations given to us, the company has neither granted nor taken any loans, secured or unsecured to /from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, hence Clause (iii) (a) to (g) of paragraph 4 of the Companies (Auditors Report) Order 2003 are not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and nature of its business for the sales of goods (Forestry/Horticulture product) and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of this area. Further due to closure of the factory there are no transactions of purchase of inventories and fixed assets.

(v) (a) In our opinion and according to the information and explanations given to us, there are no transactions that need to be entered into the register maintained in pursuance of Section 301 of the Companies Act, 1956.

(b) In view of the above, clause (v) (b) of Paragraph 4 of the Companies (Auditors Report) Order 2003 is not applicable.

(vi) The Company has not accepted any deposits from the public within the meaning of Section 58A or the Section 58 AA of the Companies Act, 1956.

(vii) Internal audit has not been carried out due to closure of factory during the year.

(viii) As informed by the management, the Central Government has not prescribed the maintenance of cost records by the Company under Section 209( 1)( d) of the Companies Act, 1956 for any of its products.

(ix) (a) As explained to us, the company is generally regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, cess and other material statutory dues whenever applicable to it except in case of Investor Education and Protection Fund of unpaid share application money of Rs. 2.25 lacs which has not been deposited with appropriate authority.

(b) At the last day of the financial year, according to the records of the Company and the information and explanations given to us there was no dues of, Wealth Tax, Service Tax, Custom duty, Excise Duty and cess which have not been deposited on account of any dispute. However there are dues of Income tax and sales tax at the last day of financial year which have not been deposited on account of disputes but as mentioned in note no. 10 and 11 of Schedule N management has not ascertained the amount of disputed Income tax and sales tax liability and also not provided to us the detail of authorities before which dispute is pending, we are unable to quantify the same.

(x) The Companys accumulated Losses at the end of the financial year are more than fifty percent of its net worth and the company has incurred cash loss during the preceding year but due to written off of unsecured loan, and some credit balances of other liabilities company has not incurred any cash loss during the current financial year.

(xi) The Company had defaulted in repayment of dues to financial institutions/debenture holders, detail of which are given below

a. Debenture 35.65 lacs 15.03.98 issued to UTI (as per note no. 6 of Schedule N)

(xii) In our opinion and according to the information and explanations given to us, and based on the documents and record produced to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, considering the nature of activities carried on by the company during the year, the provisions of any special statute applicable to chit fund/nidhi /mutual benefit fund/societies are not applicable to the company.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) 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) The Company has not raised any new 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 no funds raised on short term basis have been used for long term investments.

(xviii) The Company has not made any preferential allotment during the year.

(xix) The Company has not issued any debentures during the current financial year.

(xx) The Company has not raised any money through public issue during the year.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.



FOR RAJENDER RAMNATH & COMPANY

CHARTERED ACCOUNTANTS

(R. K. Agrawal)

M. No. 72501 PARTNER

Place: Kanpur

Dated : 1st September, 2009