We have audited the attached Balance Sheet of M/s. PRIMA AGRO LIMITED,
 as at 31st March, 2012 the Profit and Loss Account and the Cash Flow
 Statement for the year ended on that date annexed thereto. These
 financial statements are the responsibility of the Company''s
 management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 We conducted our audit in accordance with auditing standards generally
 accepted in India.  Those standards require that we plan and perform
 the audit to obtain reasonable assurance whether the financial
 statements are free of material misstatement. An audit includes
 examining, on a test basis, evidence supporting the amounts and
 disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 As required by the Companies (Auditor''s Report) Order, 2003 issued by
 the Central Government of India in terms of sub-section (4A) of section
 227 of the Companies Act, 1956, we enclose in the Annexure a statement
 on the matters specified in paragraphs 4 and 5 of the said Order.
 Further to our comments in the Annexure referred to above, we report
 that:
 
 (i) We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit; 
 
 (ii) In our opinion, proper books of account as required by law have
 been kept by the company so far as appears from our examination of
 those books;
 
 (iii) The Balance Sheet, Profit and Loss Account and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account; (iv) In our opinion, the Balance Sheet, Profit and Loss
 Account and Cash Flow Statement dealt with by this report comply with
 the accounting standards referred to in subsection
 
 (3C) of section 211 of the Companies Act, 1956;
 
 On the basis of written representations received from the directors, as
 on 31st March, 2011, and taken on record by the Board of Directors, we
 report that none of the directors is disqualified as on 31 st March,
 2011 from being appointed as a director in terms of clause (g) of
 sub-section (1) of section 274 of the Companies Act, 1956;
 
 Non-Current Investments as per Note 10 consist of investment in shares
 of Prima Industries Ltd valued at cost amounting to f 1,01,95,280/-. As
 on 31st March, 2012, it has been identified that there is a decline in
 the value of investment which is not temporary in nature. The standards
 laid down by AS -13 on ''Accounting for Investments'' provides that where
 the decline in the value of investment is not temporary in nature, then
 the carrying amount of investments should be reduced by the amount of
 such decline and the resultant reduction should be charged to the
 Profit & Loss A/c. The company has not charged such decline to the
 Profit and Loss A/c.
 
 Secured loans shown in Note 3 of the Balance sheet includes a Cash
 Credit of f 11,88,93,444/- lying with State Bank of India. It is also
 disclosed that this cash credit is secured by first charge on the fixed
 assets of AFD & by hypothecation of inventories and book debts and a
 second charge on the fixed assets of FMD. The value of stock as
 certified by the management is f 5,27,277/- and the value of Sundry
 Debtors given in Note 14 which is considered good is nil. The secured
 value of current assets on which the loan is shown as secured comes to
 only f 5,27,277/-, which does not cover the loan outstanding. The
 realizable value of security under which this loan has been disclosed
 is subject to the point discussed above.
 
 Subject to the above, in our opinion and to the best of our information
 and according to the explanations given to us, the said accounts give
 the information required by the Companies Act, 1956,in the manner so
 required and give a true and fair view in conformity with the
 accounting principles generally accepted in India.
 
 (a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2012; and
 
 (b) in the case of the Profit and Loss Account, of the profit for the
 year ended that date.
 
 (c) in the case of the Cash Flow Statement, of the cash flows for the
 period ended on that date.
 
                                           
 ANNEXURE TO AUDITOR''S REPORT
 
 (Referred to in paragraph 3 of our report of even date)
 
 i.
 
 a) The Company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets.
 
 b) All the assets have not been physically verified by the management
 during the year but there is a regular programme of verification which,
 in our opinion, is reasonable having regard to the size of the company
 and the nature of its assets, No material discrepancies were noticed on
 such verification.
 
 c) During the year, the company has not disposed off a major part of
 the plant and machinery. Accordingly the provisions of clause 4(i)(c)
 of the Companies (Auditor''s Report) Order, 2003 are not applicable to
 the company.
 
 ii.
 
 a) The inventory has been physically verified during the year by the
 management.  In our opinion, the frequency of verification is
 reasonable.
 
 b) The procedure of physical verification of inventories followed by
 the management is reasonable and adequate in relation to the size of
 the company and the nature of its business.
 
 c) The company is maintaining proper records of inventory and the stock
 as disclosed in the financial statements are valued and certified by
 the management. The discrepancies noticed on verification between the
 physical stocks and book records were not material.
 
 iii.
 
 a) The Company has granted the following loans to companies, firms and
 other parties covered in the register maintained u/s.301 under the
 Companies Act 1956.  
 
 SI. No      Name of the Company         Relationship          Year end
            /Firm orOther Parties                              Balance 
 
 1.          Prima Industries Ltd        Associate          3,82,95,900
 
 2.          Prima Beverages (P) Ltd.    Associate            30,87,778
 
 b) The following are the particulars of loans taken by the company from
 companies, and other parties covered in the register maintained u/s.301
 under the Companies Act, 1956
 
 SI. 
 No  Name of the Party               Relationship           Yearend
                                     with the Company       Balance
 
 1.  Sanjay Gupta                    Managing Director     45,12,717
 
 2.  Swati Gupta                     Relative of
                                     Managing Director       253,709
 
 c) In our opinion, the rate of interest and the terms and conditions on
 which loans have been taken from/ granted to companies, other parties
 listed in register maintained u/s. 301 of the Companies Act, 1956 are
 not able to report, prima facie, prejudicial to the interest of the
 Company, since the terms are not defined.
 
 d) The Company is not receiving/paying any interest on such loans and
 there is no stipulation as to repayment of principal in respect of
 loans granted to/taken from parties listed in the register maintained
 under Section 301 of the Companies Act 1956, hence we ore unable to
 comment on the regularity of repayment of principal in respect of the
 said loans.
 
 iv. In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the company and the nature of its
 business with regard to purchases of inventory, fixed assets and with
 regard to the sale of goods. During the course of our- audit, we have
 not observed any continuing failure to correct major weaknesses in the
 internal control system of the company.  
 
 v.
 
 a) In our opinion and according to the information and explanations
 given to us, the particulars of all contracts or arrangements that need
 to be entered in the register maintained under Section 301 of the
 Companies Act, 1956 have been so entered.
 
 b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts and
 arrangements entered in the register maintained u/s 301 of the
 Companies Act, 1956 and exceeding the value of five lakh rupees in
 respect of any party during the year have been made at prices which are
 reasonable having regard to prevailing market prices at the relevant
 time.
 
 vi. The company has not accepted any deposit from the public hence the
 directions issued by the Reserve Bank of India and provisions of
 Section 58A and 58AA and other relevant provisions of the Companies
 Act, 1956 and the Rules formed thereunder are not applicable to this
 company.
 
 vii. The company does not have adequate internal audit system
 commensurate with the size and nature of its business.
 
 viii. The Central Government has not prescribed maintenance of cost
 records under Section 209(1) (d) of the Companies Act 1956 for the
 products of the Company.
 
 ix.
 
 a) According to the information and explanations furnished to us,
 during the year, undisputed statutory dues including provident fund,
 investor education protection fund, employees state insurance, income
 tax, sales tax, wealth tax, customs duty, excise duty, cess and other
 material statutory dues applicable to it have been deposited with
 appropriate authorities and there has been no serious delays.
 
 Further, since the Central Government has till date not prescribed the
 amount of cess payable u/s 441A of the Companies Act, 1956, we are not
 in a position to comment upon the regularity or otherwise of the
 company in depositing the same.
 
 b) According to the information and explanation given to us, there are
 no dues of sale tax, income tax, customs duty, wealth tax, excise duty
 and cess which have not been deposited on account of any dispute.
 
 x. In our opinion, the company has accumulated losses to the extent of
 Rs. 19,75,95,483/-.  The accumulated losses of the company are more than
 fifty per cent of its paid up capital and free reserves.
 
 xi. In our opinion and according to the information and explanations
 given to us, the company during the year has defaulted in repayment of
 dues to the following banks and financial institutions:
 
 Bank/ Financial Institution          Balance Outstanding as at 31    
                                      March 2011
 
 1.   State Bank of India             11,88,93,444
 
 xii, According to the information and explanations furnished to us, the
 company has not granted any loans or advances on the basis of security
 by way of pledge of shares, debentures and other securities/Accordingly
 the provisions of clause 4(xii) of the Companies (Auditor''s Report)
 Order, 2003 are not applicable to the company.
 
 xiii.  In our opinion, the company is not a chit fund or a Nidhi/
 mutual benefit fund/society.  Therefore, the provisions of clause
 4(xiii) of the Companies (Auditor''s Report) Order.  2003 are not
 applicable to the company.
 
 xiv. In our opinion the company is not dealing in shares, securities,
 debentures and other investments. Accordingly the provisions of clause
 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not
 applicable to the company.
 
 xv. In our opinion, the company has not given guarantees for loans
 taken by others from banks or financial institutions.
 
 xvi. In our opinion, the term loans have been applied for the purpose
 for which they were raised.
 
 xvii. According to the information and explanations given to us and on
 an overall examination of the balance sheet of the company, we report
 that no funds raised on short-term basis have been used for long-term
 investment.
 
 xviii. The company has not made any preferential allotment of shares to
 parties & companies covered in the Register maintained u/s. 301 of the
 Act. Accordingly the provisions of clause 4 (xviii) of the Companies
 (Auditor''s Report) Order, 2003 are not applicable to the Company.
 
 xix. The company has not issued any debentures and hence the provisions
 of clause 4(xix) of the Companies (Auditor''s Report) Order, 2003 are
 not applicable to the company.
 
 xx. The company has not raised any money from public issues during the
 year.  Accordingly the provisions of clause 4(xx) of the Companies
 (Auditor''s Report) Order, 2003 are not applicable to the company.
 
 xxi. According to the information and explanations given to us, no
 fraud on or by the company has been noticed or reported during the
 course of our audit.
 
                                           For VIJAYAKUMAR & EASWARAN
 
                                                CHARTERED ACCOUNTANTS
 
                                                           FRN004703S
 
                                         CA K. EASWARAN PILLAI, F.C.A.
                                        PARTNER Membership No: 022062
 
 Place: COCHIN
 Date: 28/06/2012