Tarai Foods Ltd Auditors Report.

To the Members of TARAI FOODS LIMITED

Report on the standalone financial Statements

We have audited the accompanying standalone financial statements of TARAI FOODS LIMITED ("the Company ) which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounng policies and other explanatory informaon which we have signed under reference to this report.

Managements Responsibility for the standalone financial Statements

The Companys Board of Directors are responsible for the ma ers stated in secon 134 (5) of the Companies Act, 2013 ("the Act") with respect to the preparaon and presentaon of these standalone financial statements that give a true and fair view of the financial posion, financial performance and cash ows of the Company in accordance with the Accounng principles generally accepted in India, including the Accounng Standards specified under secon 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounng records in accordance with the provisions of the Act for safeguarding the assets of the Company and for prevenng and detecng frauds and other irregularies, selecon and applicaon of appropriate accounng policies, making judgments and esma tes that are reasonable and prudent, and designs, implementaon and maintenance of adequate internal financial controls, that were operang the ecv ely for ensuring the accuracy and completeness of the accounng records relevant to the preparaon and presentaon of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the Accounng and Auding standards and ma ers which are required to be included in the Audit Report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auding specified under secon 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. 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. In making those risk assessments, the auditor considers internal control relevant to the Companys preparaon and fair presentaon of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion whether the company has in place an adequate internal financial control system over financial reporng and the operang the ecv eness of such controls. An audit also includes evaluang the appropriateness of accounng policies used and the reasonableness of the accounng esma tes made by the Companys directors, as well as evaluang the overall presentaon of the financial statements.

We believe that the audit evidence we have obtained is su cient and appropriate to provide a basis for our audit opinion on these standalone

financial statements.

Basis for Quali ed Opinion:

1. Clause 12 on Note 21 regarding damage to the cold store building.

2. Clause 9 on Note 21 regarding interest on Term Loan default not provided for.

Opinion

In our opinion and to the best of our informaon and according to the explanaons given to us, except for the the ects of the matter described in the Basis for Quali ed Opinion paragraph, the aforesaid standalone financial statements give the informaon required by the Act in the manner so required and give a true and fair view in conformity with the accounng principles generally accepted in India:

(i) in the case of the balance sheet, of the state of a airs of the Company as at 31 March 2018; (ii) in the case of the statement of profit and loss, of the loss for the year ended on that date; and (iii) in the case of the cash flow statement, of the cash ows for the year ended on that date.

Emphasis of Matter

We draw a enon to

1. Clause 10 on Note 21 of the financial Statement with regard to connued losses and negav the net worth. Considering connued losses, and negav the net worth of the company, the concept of going concern may be in doubt, Its ability to connue as going concern depends upon the selemen t of outstanding dues of secured/ unsecured creditors and restructuring of operaons by considering appropriate business strategies and financial viabilies. In spit the of these uncertaines, acc ounts have been prepared on going concern basis and we are unable to ascertain its impact on the financial statements of the company.

Our opinion is not qualified in respect of the above ma er.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors Report) Order, 2015 ("the Order") issued by the Central Government in terms of Secon 143 (11) of the Act,

we give in the Annexure-A, a statement on the ma ers specified in paragraphs 3 and 4 of the Order.

1. As required by secon 143 (3) of the Act, we report that: a. We have obtained all the informaon and explanaons 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 examinaon 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 Cash Flow statement comply with the Accounng Standards specified under

Secon 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014,

e. On the basis of wri en representaons received from the directors as on 31 March 2018, and taken on record by the Board of Directors, none of the directors is disquali ed as on 31 March 2018, from being appointed as a director in terms of secon 164(2) of the Act.

f. With respect to the adequacy of the internal financial controls over financial reporng of the Company and the operang the ecv eness of such controls, refer to our separate report in "Annexure B"; and

g. With respect to the other ma ers 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 informaon and according the explanaons given to us:

1. The Company has disclosed the impact of pending lig aons on its financial posion in its financial statements in accordance with the Indian Accounng Standards (IndAS).

2. The Company did not have any long term contracts including derivav the contracts for which there are any material foreseeable losses.

3. There has been no delay in transferring amounts, required to be transferred to the Investor Educaon and Protecon Fund by the Company.

For RATTAN ANIL & CO.
Chartered Accountants
Firm Regn. No.:009414N
Place: Rudrapur Sd/-
Date: 30 May 2018 Ra an Bansal
Partner
Membership No.:083929

ANNEXURE- A TO THE INDEPENDENT AUDITORS REPORT

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

(i). In respect of its xed assets:

a) The Company has maintained proper records showing full parcular s including quant av the details and situaon of xed assets.

b) The xed assets have been physically veri ed by the Management during the year in accordance with a regular programme of veri caon which, in our opinion, provides for physical veri caon of all the xed assets at reasonable intervals. And which in our opinion is reasonable, having regard to the size of the company and nature of its assets. No material discrepancies were noced on such physical veri caon and the same have been properly dealt with in the books of account;

c) According to the informaon and explanaons given to us and on the basis of our examinaon of the records of the Company, the tle deeds of immovable properes are held in the name of the company.

(ii). In respect of its inventory:

a) As explained to us, inventories have been physically veri ed by the Management at regular intervals during the year.

b) There were no material discrepancies noced on such physical veri caon of inventory as compared to the book records and the same have been properly dealt with in the books of account;

(iii) The company has not granted any loans, secured or unsecured to companies, rms, Limited Liability Partnerships or other pares covered in the

register maintained under secon 189 of the Companies Act, 2013. Hence (iii) (a), (b) and (c) are not applicable in the case of the Company.

(iv) In our opinion and according to the informaon and explanaons given to us, in respect of loans, investments, guarantees, and security, the

provisions of secon 185 and 186 of the Companies Act, 2013 have been complied with.

(v) According to the informaon and explanaons given to us, the Company has not accepted any deposits during the year and accordingly the queson of complying with the direcv es issued by the Reserve Bank of India and the provisions of secon 73 and 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder does not arise. According to the informaon and explanaons given to us, no Order has been passed by the Company Law Board or the Naonal Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal on the Company.

(vi). The maintenance of cost records has not been specified by the Central Government under sub-secon (1) of secon 148 of the Companies Act, 2013.

(vii).According to the informaon and explanaons given to us and according to the books and records as produced and examined by us, in our opinion: a) in the year under review, the Company is regular in deposing undisputed statutory dues including employees state insurance, income-tax, sales-tax (VAT), service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authories.

Undisputed statutory dues of provident fund of current year under review and of earlier years and sales tax of earlier years have not been deposited and there have been serious delays in many cases. Provident Fund amounng to Rs. 4.22 lacs including of earlier years) and sales tax of earlier years amounng to Rs. 8.37 lacs has not been deposited with the Authories a er they have become due. However, provision for provident Fund has been made in Books of Accounts in the earlier years.

According to the informaon and explanaons given to us, no undisputed amounts payable in respect of income tax, duty of customs, service tax, cess and other material statutory dues were in arrears as at 31 March 2018 for a period of more than six months from the date they became payable.

b) As at 31st March, 2018 according to the records of the Company, the following are the parcular s of disputed dues on account of Income Tax,

Value Added Tax and excise duty ma ers that have not been deposited:

Name of the Statute Nature of Dues Amount (Rs. In Lacs) Period to which dues relate Forum where the dispute is pending
Central Excise Act,1944 Excise Duty Rs. 0.59 1999- 2000 Appellate Authority Upto Commissioners Level
The Income Tax Act, 1961 Income Tax Rs. 129.84 Ass. Yr. 1996-97 Appellate Authority- ITAT and High Court

(viii) In our opinion and based on our audit procedures and according to the informaon and explanaon given to us and as per the books maintained by the Company, the Company has defaulted in repayment of dues to financial instuons and the bank. The Company has been defaulng to them for more than sixteen years to the tune of Rs. 340 lacs towards principal amount : Rs. 215 lacs to IDBI Bank Ltd. And Rs.125 Lacs to IFCI Ltd. As per the books of accounts maintained by the Company, the default of unpaid interest to the secured lenders is approx. Rs. 29 crores as on 31.03.2018.

(ix) In our opinion and based on our audit procedures and according to the informaon and explanaon given to us, the Company has not raised any moneys by way of inial public o er or further public o er (including debt instruments) and term loans in the year under review and accordingly, paragraph 3 (ix) of the Order is not applicable.

(x) To the best of our knowledge and according to the informaon and explanaons given to us, no fraud by the company or on the Company by

its o cers or employees has been noced or reported during the course of our audit.

(xi) To the best of our knowledge and according to the informaon and explanaons given to us, the provisions of payment and provision of managerial remuneraon in accordance with the requisite approvals mandated by the provisions of secon 197 read with Schedule V to the Companies Act are complied with. Currently there is no employee to which these provisions are applicable.

(xii) The company is not a Nidhi Company and hence paragraph 3(xii) of the Order is not applicable.

(xiii) According to the informaon and explanaons given to us and based on our examinaon of the records of the Company, transacons with the related pares are in compliance with secons 177 and 188 of the Act where applicable and details of such transacons have been disclosed in the financial statements as required by the applicable accounng standards.

(xiv) To the best of our knowledge and according to the informaon and the xplanaons giv en to us, the company has not made any preferenal

allotment or private placement of shares or fully or partly converble debentures during the year under review.

(xv) According to the informaon and explanaons given to us and based on our examinaon of the records of the Company, the Company has not entered into non-cash transacons with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) In our opinion, the company is not required to be registered under secon 45-IA of the Reserve Bank of India Act, 1934 and accordingly, the

provisions of clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon.

For RATTAN ANIL & CO.

Chartered Accountants

Firm Regn. No.: 009414N
Place : Rudrapur
Date : 30 May 2018 Sd/-
Ra an Bansal
Partner

Membership No.: 083929

"Annexure B" to the Independent Auditors Report of even date on the Standalone financial Statements of

TARAI FOODS LIMITED

Report on the Internal financial Controls under Clause (i) of Sub-secon 3 of Secon 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporng of TARAI FOODS LIMITED ("the Company") as of 31 March 2018 in conjuncon

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 reporng criteria established by the Company considering the essenal components of internal control stated in the Guidance Note on Audit of Internal financial Controls over financial Reporng issued by the Instut the of Chartered Accountants of India (ICAI). These responsibilies include the design, implementaon and maintenance of adequate internal financial controls that were operang the ecv ely for ensuring the orderly and the cient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevenon and detecon of frauds and errors, the accuracy and completeness of the accounng records, and the mely preparaon of reliable financial informaon, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporng based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal financial Controls over financial Reporng (the "Guidance Note") and the Standards on Auding , issued by ICAI and deemed to be prescribed under secon 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal financial Controls and, both issued by the Instut the of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporng was established and maintained and if such controls operated the ecv ely in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporng and their operang the ecv eness. Our audit of internal financial controls over financial reporng included obtaining an understanding of internal financial controls over financial reporng , assessing the risk that a material weakness exists, and tesng and evaluang the design and operang the ecv eness 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 su cient and appropriate to provide a basis for our audit opinion on the Companys internal

financial controls system over financial reporng.

Meaning of Internal financial Controls over financial Reporng

A companys internal financial control over financial reporng is a process designed to provide reasonable assurance regarding the reliability of financial reporng and the preparaon of financial statements for external purposes in accordance with generally accepted accounng principles. A companys internal financial control over financial reporng includes those policies and pr ocedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transacons and disposions of the assets of the company; (2) provide reasonable assurance that transacons are recorded as necessary to permit preparaon of financial statements in accordance with generally accepted accounng principles, and that receipts and expenditures of the company are being made only in accordance with authorisaons of management and directors of the company; and (3) provide reasonable assurance regarding prevenon or mely detecon of unauthorised acquision, use, or disposion of the companys assets that could have a material the ect on the financial statements.

Inherent Limitaons of Internal financial Controls Over financial Reporng Because of the inherent limitaons of internal financial controls over financial reporng , including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projecons of any evaluaon of the internal financial controls over financial reporng to future periods are subject to the risk that the internal financial control over financial reporng may become inadequate because of changes in condions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporng and such in ternal financial controls over financial reporng were operang the ecv ely as at 31 March 2018, based on the internal control over financial reporng criteria established by the Company considering the essenal components of internal control stated in the Guidance Note on Audit of Internal financial Controls Over financial Reporng issued by the Instut the of Chartered Accountants of India.

For RATTAN ANIL & CO.
Chartered Accountants
Firm Regn. No.: 009414N
Place : Rudrapur Sd/-
Date : 30 May 2018 Ra an Bansal
Partner
Membership No.: 083929