TO THE SHARE HOLDERS OF ADF FOODS LIMITED

1. We have audited the attached Balance Sheet of ADF Foods Limited, as at 31st
March 2011 and the Profit and Loss Account and 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.

2. We have conducted our audit in accordance with the 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 the management, as well as
evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 issued by the
Central Government 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, to the extent applicable.

4. 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 sub-section
(3C) of section 211 of the Companies Act, 1956; 

v. On the basis of written representations received from the Directors as on 31
March 2011 and taken on record by the Board of Directors, we report that none of the
Directors is disqualified as on 31 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; 

vi. In our opinion and to the best of our information and according to the explanations
given to us, the said accounts read with the notes thereon give the information required
by the Companies Act, 1956, in the manner so required and also 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 2011;

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

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


For D. P. GHEVARIA & CO.

Chartered Accountants

Firm Registration No. 103176W


D. P. Ghevaria

Proprietor

Membership No: 32431

Place: Mumbai

Date: 19th May, 2011


ANNEXURE TO THE AUDITORS REPORT

Referred to in paragraph 3 of our report of even date

On the basis of such checks as considered appropriate and in terms of the information
and explanations given to us, we state as under:

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

(b) The fixed assets have been physically verified by the management during the year
under a programme for phased verification of assets which, in our opinion, is reasonable
having regard to the size of the Company and the nature of its assets. We are informed
that no material discrepancies were noticed on such verification.

(c) During the year, the Company has not disposed off any substantial part of Fixed
Assets.

(ii) (a) The inventory has been physically verified by the management during the year.
Having regard to the size of the Company and the nature of its business, in our opinion,
the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management
are reasonable and adequate in relation to the size of the Company and the nature of its
business.

(c) On the basis of our examination of the inventory records, we are of the opinion
that the Company is maintaining proper records of inventory. The discrepancies noticed on
verification between the physical stocks and the book records were not material and have
been properly adjusted in the books.

(iii) The Company has neither granted nor taken any loans, secured or unsecured, to or
from companies, firms and other parties covered in the register maintained under Section
301 of the Companies Act, 1956.

Accordingly, the provisions of clause (iii)(b) regarding terms and conditions of such
loans, clause (iii)(c) regarding payment of principal amount and interest and clause
(iii)(d) regarding steps for recovery of overdue amount of Para 4 of the Order are not
applicable to the Company for the year.

(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 for the purchase of inventory and fixed assets and
for sale of goods.

(v) (a) Based on the audit procedures applied by us and according to information and
explanation provided by the management, we are of the opinion that the transactions which
need to be entered into the register maintained u/s. 301 of the Companies Act ,1956 have
been so entered.

(b) In our opinion and according to the information and explanation given to us, the
transactions made in pursuance of contracts or arrangements entered in the register
maintained u/s 301 of the Companies Act, 1956 and exceeding Rs. 5,00,000 in value 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) During the year under review, the Company has not accepted any deposits from
public.

(vii) In our opinion, the Company has an internal audit system commensurate with
the size and nature of its business.

(viii) As informed to us, the Central Government has not prescribed maintenance of cost
records u/s 209(1) (d) the Companies Act 1956 in respect of any product.

(ix) (a) According to the records of the Company, the Company is regular in depositing
with appropriate authorities undisputed statutory dues including Provident Fund, Investor
Education and Protection fund, Employees’ State insurance, Income-tax, Sales-tax,
Wealth-tax, Custom duty, Excise-duty, Service tax, Cess and other statutory dues.
According to the information and explanations given to us, no undisputed amounts payable
in respect of Provident Fund, Investor Education and Protection fund, Employees’
State insurance, Income-tax, Sales-tax, Wealth-tax, Custom duty, Excise-duty, Service tax,
Cess and other statutory dues were outstanding, as at 31st March, 2011 for a period of
more than six months from the date they became payable.

(b) Details in respect of amounts not deposited on account of disputes pending
at various forums are given below:


  

    
Name of the Statute
    
Nature of dues
    
Amount (Rs. lakhs)
    
Period to which amount relates
    
Forum where dispute is pending
  
  

    
Income Tax Act, 1961
    
Income Tax/Penalties
    
10.31
    
2003-2004
    
I.T.A.T. Mumbai
  
  

    
Income Tax Act, 1961
    
Income Tax/Penalty
    
73.56
    
2005-2006
    
C.I.T. (Appeals)
  


(x) The Company has no accumulated losses and has not incurred cash losses during the
financial year covered by our audit and in the immediately preceding financial year.

(xi) Based on our audit procedures and on the basis of information and explanations
given by the management, we are of the opinion that the Company has not defaulted in
repayment of dues to financial institutions or banks.

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

(xiii) According to the information and explanations given to us, the Company is not a
Chit Fund, Nidhi or Mutual benefit Fund or Society.

(xiv) According to the information and explanations given to us, the Company is not
dealing or trading in shares, securities, debentures or other investments.

(xv) According to the information and explanations given to us and records made
available to us, the Company has not given any guarantees for loans taken by others from
Banks or financial institutions.

(xvi) The Company has not raised any term loans during the year nor were any unapplied
balances of previously raised term loans available.

(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 by the Company.

(xviii) The Company has not made any preferential allotment of shares to Company, Firms
or Parties covered in the register maintained under section 301 of the Companies Act 1956.

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

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

(xxi) Based upon the audit procedures performed and information and explanations given
by the management, we report that no fraud on or by the Company has been noticed or
reported during the course of our audit.


For D. P. GHEVARIA & CO.

Chartered Accountants

Firm Registration No. 103176W


D. P. Ghevaria

Proprietor

Membership No: 32431

Place: Mumbai

Date: 19th May, 2011