Independent Auditor's Report

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 31st
March, 2023, 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 Significant 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 Indian Accounting Standards
prescribed under Section 133 of the Act read with the
Companies (Indian Accounting Standards) Rules,
2015 as amended and other accounting principles
generally accepted in India, of the state of affairs of
the Company as at 31st March, 2023, 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 Auditor's 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.

Compiled by: Dion Global Solutions Limited

Statutory Reports

Sr. Key Audit Matters How our audit addressed the key audit matters

No._

2. Valuation and existence of inventories (Refer Note 9 to the standalone financial statements)

In order to ascertain the existence of inventories, we assessed and
reviewed the controls implemented and executed by the Company to
ensure the existence of inventories. We observed the periodic physical
inventory counts. We also performed analytical procedures as well as
tests of details of individual transactions.

As for the valuation of inventories, we assessed and reviewed the controls
relating to valuation. For materials and supplies, we compared the price
recognized in the balance sheet to the latest purchase invoice, to ensure
that the inventory of materials and supplies is valued in accordance with
the accounting policies applied.

To address the risk for material error on inventories, our audit procedures
included amongst other:

Assessing the compliance of Company's accounting policies over
inventory with applicable accounting standards.

Assessing the inventory valuation processes and practices. On major
locations we tested the effectiveness of the key controls.

Assessing the analyses and assessment made by management with
respect to slow moving and obsolete stock.

We assessed the adequacy of the company's disclosures related to
inventories.

Valuation of trade receivables (Refer Note 10 to the standalone financial statements)

Our audit procedures included but were not limited to the following:

(a) Understanding the trade receivables process with regards to
valuation and evaluation of controls designed and implemented by
the management;

(b) Assessment of the appropriateness of the Company's credit risk policy
and obtaining an understanding on management of credit risk;

(c) Control testing:

• 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's provisioning policies.

We have conducted discussion with management as to the recoverability
of the old outstanding and corroborating management's explanations
with underlying documentation and correspondence with the customers.

Information Other than the Financial Statements
and Auditor's Report Thereon

The Company's Board of Directors is responsible for the
other information. The other information comprises the
information included in the Board's Report including
Annexures to Board's Report, Management Discussion
and Analysis, Business Responsibility Report, Corporate
Governance Report and Shareholder's Information, but
does not include the standalone financial statements
and our auditor's 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 Company's 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,
management is responsible for assessing the
Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going
concern and using the going concern basis of
accounting unless management 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 Company's financial reporting process.

Auditor's 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 auditor's 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 management's
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
Company's ability to continue as a going concern.
If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor's
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 auditor's 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 auditor's 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 RegulatoryRequirements

1. As required by the Companies (Auditor's 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;

(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;

(d) in our opinion, the aforesaid standalone
financial statements comply with the Indian
Accounting Standards specified under Section
133 of the Act;

(e) on the basis of the written representations
received from the directors as on 31st March,
2023 taken on record by the Board of Directors,
none of the directors is disqualified as on
31st March, 2023 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 Auditor's 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. The remuneration paid
to any director is not in excess of the limit laid
down under Section 197 of the Act. Further, the
Ministry of Corporate Affairs has not prescribed
other details under aforesaid section which are
required to be commented upon by us; and

(h) with respect to the other matters to be included
in the Auditor's 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 were no amounts which were
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;

(b) 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
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) the Company neither declared nor paid
dividend during the year. Accordingly, the
Company is not required to comply with
Section 123 of the Act.

(vi) Proviso to Rule 3(1) of the Companies
(Accounts) Rules, 2014, as amended,
for maintaining books of account using
accounting software which has a feature
of recording audit trail (edit log) facility
is applicable to the Company from the
financial year commencing on or after
1st April, 2023, and accordingly, reporting
under Rule 11(g) of the Companies
(Audit and Auditors) Rules, 2014, as
amended, is not applicable for the
financial year ended 31st March, 2023.

SHARP & TANNAN

Chartered Accountants
Firm's Registration No. 109982W
by the hand of

Edwin Paul Augustine

Partner

Place: Mumbai Membership No. 043385

Date: April 29, 2023 UDIN: 23043385BGPJRA2300