Parag Milk Foods Ltd Auditor Reports

To the Members of Parag Milk Foods Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Parag Milk Foods Limited (the Company), which comprise the Standalone Balance Sheet as at 31 st March, 2025, the Standalone Statement of Profit and Loss, the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of material and other accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (the Act) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 st March, 2025, and its profit, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

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 Auditors Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (the 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 a basis for our opinion.

Key Audit Matters

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

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

Key Audit Matters	How our audit addressed the key audit matters
1. Valuation of trade receivables
(Refer Note 11 to the standalone financial statements)
As at 31 st March, 2025, the trade receivables	Our audit procedures included but were not limited to the following:
balance excluding provisions included in Note 11 were H 265.29 crore.	(a) Understanding the trade receivables process with regards to valuation and evaluation of controls designed and implemented by the management;
We have identified valuation of trade receivables as a key audit matter on account of the significant management judgment	(b) Assessment of the appropriateness of the Company\u2019s credit risk policy and obtaining an understanding on management of credit risk;
involved with respect to the recoverability	(c) Control testing:
of trade receivables and the provisions for impairment of receivables, and the importance of cash collection with reference to the working capital management of the business.	Obtaining an understanding on credit approvals, establishing credit limits and continuous monitoring of creditworthiness of customers to which the Company grants the credit in normal course of business.
	Obtaining understanding on how the Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade receivables.
	(d) Tests of details:
	We have checked the ageing analysis, on a sample basis and subsequent receipt of the trade receivables, to the source documents including bank statements;
	We have verified the underlying supporting documents like acceptance of invoices along with various correspondence carried out by the management of the Company with trade receivable for realization of money; We have verified open invoices duly accepted by customers in order to ensure existence of trade receivables; We have verified the appropriateness of judgments regarding provisions for trade receivables and assessment as to whether these provisions were calculated in accordance with the Company\u2019s provisioning policies; and We have conducted discussion with management as to the recoverability of the old outstanding and corroborating management\u2019s explanations with underlying documentation and correspondence with the customers.
2. Revenue recognition (Refer Note 26 to the standalone financial statements)
The revenue of the Company consists primarily of sale of food products that are sold	Our key audit procedures around revenue recognition included, but were not limited to, the following:
through distributors, modern trade and direct sale channels amongst others. Revenue is recognized when the control of products is transferred to the customer and	Assessed the appropriateness of the revenue recognition accounting policies of the Company including those relating to rebates and trade discounts, by evaluating compliance with the applicable accounting standards;
there is no unfulfilled obligation. Owing to the volume of sales transactions, size of the distribution network and varied	Evaluated the design and tested the operating effectiveness of the relevant key controls with respect to revenue recognition including general and specific information technology controls;
terms of contracts with customers, revenue is determined to be an area involving significant risk in line with the requirements of the Standards on Auditing and hence, requiring significant auditor attention.	Performed substantive testing on selected samples of revenue transactions recorded during the year by testing the underlying documents including contracts, invoices, goods dispatch notes, shipping documents and customer receipts, wherever applicable;
The management is required to make certain key judgements around determination of transaction price in accordance with the	Understood and evaluated the Company\u2019s process for recording of the accruals for discounts and rebates and ongoing incentive schemes and on a test basis, verified the year-end provisions made in respect of such schemes;
requirements of Ind AS 115, Revenue from Contracts with Customers, on account of consideration payable to customers in the	Performed analytical review procedures on revenue recognised during the year to identify any unusual and/or material variances;
form of various discount schemes, returns and rebates.	Performed confirmation and alternative procedures on selected invoices outstanding as at the year-end;
The Company and its external stakeholders focus on revenue as a key performance indicator and this could create an incentive for revenue to be overstated or recognised before	Tested a select sample of revenue transactions recorded before the financial year end date to determine whether the revenue has been recognised in the appropriate financial period;
control has been transferred. Considering the aforesaid significance to our	Tested a sample of manual journal entries posted to revenue ledgers to identify any unusual items; and
audit and the external stakeholders, revenue recognition has been considered as a key audit matter for the current year\u2019s audit.	Evaluated the appropriateness and adequacy of disclosures in the Standalone financial statements in respect of revenue recognition in accordance with the applicable requirements.

Information Other than the Standalone Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Boards Report including Annexures to Boards Report, Management Discussion and Analysis, Business Responsibility and Sustainability Report, Corporate Governance Report and Shareholders Information, but does not include the standalone financial statements and our auditors report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during 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 and Those Charged with Governance for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

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

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

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

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

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

Conclude on the appropriateness of managements 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 Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern; and Evaluate the overall presentation, structure and content of the

standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors 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 (Auditors 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 a Statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books except for the matter stated in paragraph (h)(vi) below;

(c) The standalone balance sheet, the standalone statement of profit and loss, the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account;

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 Section 164(2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure B;

(g) With respect to the other matters to be included in the Auditors Report in accordance with the Section 197(16) of the Act, in our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act;

(h) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us;

(i) The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - (Refer Note 41 to the standalone financial statements);

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

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

(iv) (a) The management of the Company has

represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the standalone financial statements, during the year, 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 or entity, including foreign entities (the 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 (the Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;the year, no funds have been received by the Company from any person or entity, including foreign entities (the 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 (the Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(c) Based on such audit procedures, we have considered reasonable and appropriate in the circumstances that nothing has come to our notice that has caused us to believe that the representations under paragraph (a) and (b) above, contain any material misstatement.

(v) (a) The final dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with Section 123 of the Act, to the extent it applies to payment of dividend.

(b) As stated in Note 16 to the standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act, to the extent it applies to declaration of dividend.

(vi) Based on our examination which included test checks, except for the instances mentioned below, the Company has used accounting softwares for maintaining its books of account, which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective software:

(a) The feature of recording audit trail (edit log) facility was not enabled at the database level to log any direct data changes for the accounting softwares used for maintaining the books of account relating to payroll, and certain noneditable fields / tables of the accounting software used for maintaining general ledger.

(b) The feature of recording audit trail (edit log) facility was not enabled at the application layer of the accounting softwares relating to revenue, trade receivables and general ledger.

Further, the audit trail (edit log) facility was enabled and operated throughout the year for the respective accounting software, we did not come across any instance of the audit trail feature being tampered with and the audit trail has been preserved by the Company as per the statutory requirements for record retention.

	SHARP & TANNAN
	Chartered Accountants
	Firm\u2019s Registration No. 109982W
	by the hand of
	Edwin Paul Augustine
	Partner
	Membership No. 043385
Mumbai, 2 nd May, 2025	UDIN: 25043385BMOOJH7464

In terms of the information and explanations sought by us and given by the Company and the books of account and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that:

(i) In respect of the Companys property plant and equipment and intangible assets

(a) (A) The Company is maintaining proper records showing full particulars, including quantitative details and situation of property,

plant and equipment and relevant details of right-of-use assets, except for certain property, plant and equipment where quantitative details are not available since inception. However, the Company is in the process of preparing / updating the same ; and

(B) The Company is maintaining proper records showing full particulars of intangible assets;

(b) During the year, the Property, Plant and Equipment of the Company have been physically verified by the management, except as stated in Paragraph (i) (a) (A) above and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets;

(c) The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of lessee), disclosed in the standalone financial statements are held in the name of the Company;

(d) The Company has not revalued its property plant and equipment (including right-of-use assets) or intangible assets during the year. Accordingly, the Paragraph 3(i)(d) of the Order is not applicable to the Company; and

(e) The Company is not holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder Accordingly Paragraph 3(i)(e) of the Order is not applicable to the Company.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year, except for the

stocks lying with third parties. For stocks lying with third parties at the year end, written confirmations have been obtained by the management. In our opinion, the coverage and procedure of such verification by the management is appropriate. No discrepancies were noticed on physical verification carried out during the year; and

(b) The Company has been sanctioned working capital limits in excess of H five crore in aggregate from banks during the year on the basis of security of current assets. The Company has filed monthly statements with such banks which are in agreement with the books of account. (Refer Note 47(a) of the standalone financial statements)

Additionally the Company has issued secured foreign currency convertible bonds (FCCB) and unsecured non-convertible debentures (NCDs) to the International Finance Corporation (IFC) which is to be utilised towards working capital requirements. The Company is not required to file statements with IFC.

(iii) (a) During the year, the Company has not made investments in, provided any guarantee or security or advances in the nature of

loans, secured or unsecured, to companies, firms, limited liability partnerships. However, the Company has provided loan as detailed below :

(H crore) Particulars	Guarantee	Security	Loans	Advances in nature of loans
(A) Aggregate amount granted / provided during the year
- Subsidiary Company	-	-	20.00	-
(B) Balance outstanding as at 31 st March, 2025 in respect of above cases
- Subsidiary Company	-	-	20.00	-

(b) The aforesaid loan granted is not prejudicial to the interest of the Company;

(c) In respect of loan granted by the Company the schedule of repayment of principal and payment of interest in respect of the loan has been stipulated and the repayments or receipts are regular;

(d) In respect of the aforesaid loan, there is no overdue amount for more than ninety days;

(e) There was no loan or advance in the nature of loans granted which has fallen due during the year, has been renewed or extended or fresh loans granted to settle the overdue of existing loans given to the same parties; and

(f) The Company has not granted any loans either repayable on demand or without specifying any terms or period of repayment during the year Accordingly, reporting on the Paragraph 3(iii)(f) of the Order is not applicable to the Company

(iv) The Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

(v) The Company has not accepted any deposits or amounts which are deemed to be deposits from the public during the year to which the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 and other relevant provisions of the Act and the rules framed thereunder apply Accordingly, Paragraph 3(v) of the Order is not applicable to the Company.

(vi) The maintenance of cost records has been specified by the Central Government under Section 148 (1) of the Act and rules thereunder We have broadly reviewed such records and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) (a) The Company is generally regular in depositing the undisputed statutory dues including goods and services tax , provident

fund, employees state insurance, income-tax, duty of customs, value added tax, cess and other statutory dues to the appropriate authorities.

(b) The statutory dues referred to (a) above, which have not been deposited on account of any dispute, the amounts involved and the forum where the dispute is pending are as under:

Name of the Statute	Nature of the dues	Gross Amount	Amount deposited / paid	Period to which the amount	Forum where dispute is pending
		( K crore)	( K crore)	relates
The Maharashtra Value Added Tax Act, 2002	Tax and Penalty	3.24	-	FY 2009-10	Joint Commissioner of Sales Tax (App)-1
The Central Goods and Services Tax Act, 2017	Tax, Interest and Penalty	0.51	0.51	FY 2017-18	Commissioner of GST and Central Excise
	Tax, Interest and Penalty	0.22	0.03	FY 2018-19	Commissioner of GST and Central Excise
	Tax, Interest and Penalty	2.18	0.04	FY 2019-20	Commissioner of GST and Central Excise
	Tax, Interest andPenalty	2.69	-	FY 2020-21	Commissioner of GST and Central Excise
The Wealth Tax Act, 1957	Tax and Interest	0.01	-	AY 2014-15	Online response
The Income Tax Act, 1961	Tax and Interest	4.74	-	AY 2013-14	Commissioner (Appeals)
	Tax, Interest and Penalty	22.38	0.36	AY 2016-17	Commissioner (Appeals)
	Tax and Interest	1.20	-	AY 2016-17	With ITAT
	Tax and Interest	4.44	-	AY 2018-19	Commissioner (Appeals)
	Tax, Interest and Penalty	128.41	4.32	AY 2019-20	Commissioner (Appeals)
	Tax, Interest and Penalty	77.87	2.41	AY 2020-21	Commissioner (Appeals)
	Tax and Interest	42.59	-	AY 2021-22	Commissioner (Appeals)
	Tax, Interest and Penalty	59.48	1.91	AY 2022-23	Commissioner (Appeals)

(viii) There are no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961. Accordingly, Paragraph 3(viii) of the Order is not applicable to the Company.

(a) The Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender;(b) The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority;

(c) The Company has, prima facie, utilized the money obtained by way of term loans during the year for the purposes for which they were obtained;

(d) We report that no funds raised on short-term basis have, prima facie, been used for long-term purposes by the Company;

(e) On an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiary as defined under the Act; and

(f) The Company has not raised any loans during the year on the pledge of securities held in its subsidiary as defined under the Act.

(x) (a) The Company has not raised monies by way of initial public offer or further public offer (including debt instruments) during the

year. Accordingly, Paragraph 3(x)(a) of the Order is not applicable to the Company; and

(b) The Company has not made any preferential allotment or private placement of shares or convertible debentures (fully partially or optionally convertible) during the year. Accordingly, reporting on the Paragraph 3(x)(b) of the Order is not applicable to the Company.

(xi) (a) We have neither come across any instance of fraud by the Company nor any fraud on the Company has been noticed or

reported during the year, nor have we been informed of any such instance by the management;

(b) No report under Section 143(12) of the Act has been filed in Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year; and

(c) There is no whistle-blower complaints received by the Company during the year.

(xii) The Company is not a Nidhi Company. Accordingly Paragraph 3(xii) of the Order is not applicable.

(xiii) All transactions entered into by the Company with the related parties are in compliance with Sections 177 and 188 of the Act, where applicable and the details have been disclosed in the standalone financial statements as required by the applicable accounting standards.

(xiv) (a) The Company has adequate internal audit system commensurate with the size and the nature of its business; and

(b) We have considered the internal audit reports for the year under audit, issued to the Company during the year and till date and made available to us, in determining the nature, timing and extent of our audit procedures.

(xv) The Company during the year, has not entered into any non-cash transactions with directors or persons connected with its directors and hence, the provisions of Section 192 of the Act is not applicable. Accordingly Paragraph 3(xv) of the Order is not applicable to the Company

(xvi) (a) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly the

Paragraph 3(xvi)(a) of the Order is not applicable to the Company;

(b) The Company has not conducted Non-Banking Financial or Housing Finance activity. Accordingly the Paragraph 3(xvi)(b) of the Order is not applicable to the Company;

(c) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India; and

(d) The Group to which the Company belongs has no CIC as part of the Group.

(xvii) The Company has not incurred cash losses for the current financial year as well as the immediately preceding financial year.

(xviii) There has been no resignation of statutory auditors during the year. Accordingly, Paragraph 3(xviii) of the Order is not applicable to the Company

(xix) On the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that Company is not capable of meeting its liabilities existing as at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We, further state that our reporting is based on the facts upto the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

(xx) The Company is not required to contribute towards Corporate Social Responsibility during the year. Accordingly, Paragraphs 3(xx) (a) and (b) of the Order are not applicable to the Company.

	SHARP & TANNAN
	Chartered Accountants
	Firm\u2019s Registration No. 109982W
	by the hand of
	Edwin Paul Augustine
	Partner
	Membership No. 043385
Mumbai, 2 nd May, 2025	UDIN: 25043385BMOOJH7464

Report on the Internal Financial Controls under Section 143(3)(i) of the Companies Act, 2013 (the Act)

We have audited the internal financial controls over financial reporting of Parag Milk Foods Limited (the Company), as of 31 st March, 2025 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting, (the Guidance Note) issued by the Institute of Chartered Accountants of India (the ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by the ICAI and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditure of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not to be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 st March, 2025, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the ICAI.

	SHARP & TANNAN
	Chartered Accountants
	Firm\u2019s Registration No. 109982W
	by the hand of
	Edwin Paul Augustine
	Partner
	Membership No. 043385
Mumbai, 2 nd May 2025	UDIN: 25043385BMOOJH7464