The Procedure for Tender / Offer is set out on page no. ---------- of this Letter of Offer. A Tender / Offer Form is enclosed with this Letter of Offer. The Form with relevant enclosures should be despatched / delivered so as to reach before the close of business hours at the respective Collection Centres on or before April 13, 2002.

Encl.: Tender / Offer Form (For shareholders holding shares in Physical Form Page ---------)

RESPONSES SHOULD NOT BE SENT to the Manager to the Buy-back Offer

The Company has adhered / will adhere to the SEBI stipulated time limits.

The following definitions apply through out this Letter of Offer, unless the context requires otherwise:

1. DETAILS OF THE OFFER

1. Parry Agro Industries Limited (hereinafter referred to as "PAI" / "the Company") hereby announces its intention to buy back upto 8,67,472 fully paid equity shares of face value Rs. 10 each, representing 23.09% of the paid-up equity share capital, through Tender Offer from the shareholders of the Company at a price of Rs.70 per share, payable in cash. The Buy-back Offer is being made in accordance with the Act, the Regulations and other applicable laws. Shareholders have the option of tendering their shares in response to the Buy-back Offer.
2. The Company will adopt the Tender Offer route for the Buy-back and will restrict the Buy-back to a maximum of 8,67,472 fully paid equity shares representing 23.09% of the paid-up equity share capital of the Company. This represents the entire public shareholding of the Company.
1. The total amount to be expended towards Buy-back by the Company, assuming 100% response to the Offer, aggregates to Rs.607.23 lakhs, which is 8.68% of the paid-up share capital (including preference share capital) and free reserves of the Company as on March 31, 2001.
2. The Promoters currently hold 28,89,344 equity shares, representing 76.91% of the paid-up equity share capital of the Company. The Promoters do not intend to tender their shares in the proposed Buy-back Offer. Assuming 100% response to the Offer and if all the shares tendered in response to the Offer are accepted in full, the Promoters will hold 100% of the issued, subscribed and paid-up equity share capital of the Company (represented by 28,89,344 equity shares) after the Buy-back Offer.
3. On completion of the Buy-back Offer, the company intends to delist the equity shares from all the Sock Exchanges, where they are presently listed, after requisite statutory compliance.

1. The Buy-back is being made pursuant to Article 26A of the Articles of Association of the Company.
2. The Board of Directors of the Company at a meeting held on December 8, 2001 considered and approved the proposal for buy back of fully paid equity shares by the Company.
3. In accordance with Section 77A and as per the provisions of Section 192 A of the Act, the Buy-back Offer has been approved by a Special Resolution passed by the equity shareholders of the company through a postal ballot. The results of the postal ballot were announced at the Extraordinary General Meeting (EGM) of the Company held on January 25, 2002.
4. The Board of Directors of the Company at a meeting held on January 25, 2002 (Post EGM) approved the Offer Price of Rs. 70 per equity share for the Buy-back.
5. The Offer is subject to approvals, if any required, under the provisions of the Act, the Regulations and / or such other Acts in force for the time being.
6. The Company has complied with Section 77(A)(2)(c), (d), 77B(1) and 77B(2) of the Companies Act 1956.

4. NECESSITY FOR BUY-BACK

1. The equity shares of the company are listed on the Stock Exchanges at Chennai, Mumbai and Kochi and are permitted for trading on the National Stock Exchange (NSE). Presently the trading volumes of the shares of the Company are relatively low. The rationale behind listing is to provide liquidity to the shareholders by enabling them to buy/sell the shares on the Stock Exchanges. Such liquidity is presently not available to the shareholders of the Company due to lack of active trading in the shares. The Company intends to provide liquidity to the existing shareholders, through this Buy-back Offer, to provide them an exit route.
2. Further, the company also intends to de-list the equity shares from all the Stock Exchanges, where they are presently listed, after completion of Buy-back Offer and other formalities as required.

1. The Company proposes to buy back a maximum of 8,67,472 fully paid equity shares at a price of Rs. 70 per share. The total amount of funds required for the Buy-back is a maximum of Rs. 607.23 lakhs, assuming 100% response to the Buy-back Offer.

2. The Company proposes to meet the funds required for the Buy-back Offer from existing resources.

1. After the completion of the Buy-back Offer, assuming 100% response to the Offer, the issued, subscribed and paid-up equity share capital of the Company would consist of 28,89,344 equity shares of Rs. 10 each aggregating Rs. 2,88,93,440.
2. Assuming that the response to the Buy-back Offer is restricted to 8,67,472 shares comprising from Public, all of which are accepted in full, the Promoters will hold 28,89,344 shares representing 100% of the paid up capital.

1. The aggregate shareholding of the Promoters on the date of the Public Announcement is 28,89,344 shares of Rs.10 each constituting 76.91% of the issued, subscribed and paid-up equity share capital of the Company.
2. The Promoters have not traded in the equity shares of the company during a period of 12 months preceding the date of the board resolution for approving the Buy-back and during a period of 6 months prior to the Public Announcement for Buy-back.
3. The Promoters will not be tendering their shares in the proposed Buy-back Offer. Assuming that the response to the Buy-back Offer is restricted to 8,67,472 shares from Public, all of which are accepted in full, the Promoters will hold 28,89,344 shares representing 100% of the post Buy-back equity share capital of the Company.

XII MANAGEMENT DISCUSSION AND ANALYSIS ON LIKELY IMPACT OF BUY-BACK ON THE COMPANY

1. Assuming 100% response to the Offer and if all the shares tendered in response to the Offer are accepted in full, the Promoters will hold 100% of the issues, subscribed and paid-up equity share capital of the Company (represented by 28,89,344 equity shares) after the Buy-back Offer. In such a situation, the Public shareholding would stand reduced to Nil, since the entire current Public shareholding of 8,67,472 equity shares would have been bought back in the Offer.
2. The Buy-back is not likely to cause any material impact on the income / profits of the Company except to the extent of interest / dividend loss on the amount of funds used for Buy-back.
3. There will be no change in the management structure of the Company consequent to the Buy-back.
4. On completion of the Buy-back Offer, the Company intends to delist the equity shares from all the Stock Exchanges, where they are presently listed, after requisite statutory compliance.
5. Based on audited results for the year ended March 31, 2001, consequent to the Buy-back Offer, salient financial parameters of the Company would be:

1. The Offer is open to all shareholders of the Company. The Letter of Offer and Tender / Offer Form will be mailed to all the shareholders of the Company whose names appear on the Register of Members of the Company and who are beneficial owner/s of shares as per the records made available to the Company by NSDL/CDSL as on March 2,2002.
2. The Company will not accept any shares for Buy-back, in case of court restraints on transfer / sale of shares.
3. The Company will consider all the shares tendered for Buy-back by shareholders, for acceptance under the Buy-back Offer, irrespective of whether the shareholder is registered with the Company as on the Specified Date or has obtained delivery after the Specified Date or he holds the shares in street name. In case the tenderer is an unregistered shareholder, he should submit the transfer deed complete in all respects, along with the share certificate.
4. The Company does not have any shares subject to lock-in provisions or which are non- transferable. Hence the question of the Company not buying back such shares as per Regulation 19(5) does not arise.
5. No single offeror can tender shares more than the shares proposed to be bought back and any Tender / Offer Form wherein the number of shares offered by a shareholder exceeds the total number of shares to be bought back will be rejected.

1. For shareholders holding shares in physical form

1. Shareholders to whom this Offer is made are free to tender / offer their shareholding to the Company in whole or in part.
2. Shareholders of the Company who wish to tender / offer their shares in response to this Buy-back Offer should deliver the following documents:

1. The relevant Tender / Offer Form duly signed (by all shareholders in case the shares are in joint names) in the same order in which they hold the shares.
2. Original share certificates.

3. Unregistered shareholders who wish to tender / offer their shares in response to the Buy-back Offer should send the application in plain paper signed by all shareholders, stating folio number, name, address, number of shares held, share certificate number, distinctive numbers, number of shares tendered for Buy-back, bank account details together with the original share certificates & duly executed transfer deed and other relevant documents (as mentioned in iv below).

4. Shareholders should also provide all relevant documents in addition to the above documents. Such may include (but not limited to):

1. Duly attested Power of Attorney if any person other than the shareholder has signed the relevant Tender / Offer Form.
2. Duly attested death certificate / succession certificate in case any shareholder has expired.
3. Necessary corporate authorisations, such as Board Resolutions, etc., in case of companies.

4. Collection Centres

The documents should be submitted to the Collection Centres (mentioned in Page --------) so as to reach before the close of business hours of the respective Collection Centres on or before April 13, 2002. Unregistered shareholders and shareholders residing at locations where there are no Collection Centers are requested to tender their response to the Registrar to the Offer – Karvy Consultants Limited at Hyderabad.

5. Consideration will be paid by crossed account payee cheque / demand draft / pay order / warrant to those shareholders whose offer has been accepted by the Company. The cheque / demand draft / pay order / warrant will be drawn in the name of the first named person in case of joint shareholders. The intimation regarding acceptance or non-acceptance of the shares and the corresponding payment for the accepted shares and / or share certificates for the rejected shares will be despatched to shareholders by Registered Post by May 3, 2002. The cheques would be made payable at par at all the centres where the Company is accepting applications and in the designated Collection Centres as in the case of public issues.
6. It is mandatory for shareholders to indicate the bank account details to which the consideration would be payable at the appropriate place in the Tender / Offer Form.
7. Non receipt of this Letter of Offer by, or accidental omission to despatch the Letter of Offer to any person who is eligible to receive this Offer, shall not invalidate the Offer in any way. In case of non-receipt of this Letter of Offer, shareholders may send their application in plain paper signed by all shareholders, stating folio number, name, address, number of shares held, share certificate number, distinctive numbers, number of shares tendered for Buy-back, bank account details together with the original share certificates and other relevant documents (as mentioned in ii & iv above) to the Registrar to the Buy-back Offer – Karvy Consultants Limited at Hyderabad.
8. All documents / remittances sent by or to shareholders will be at their own risk. Shareholders of the Company are advised to adequately safeguard their interests in this regard.

1. For shareholders holding shares in dematerialised form – beneficial owners

1. Shareholders should also provide all relevant documents in addition to the above documents. Such may include (but not limited to):

1. Duly attested Power of Attorney, if any person other than the shareholder has signed the relevant Tender / Offer Form.
2. Duly attested death certificate / succession certificate in case any shareholder has expired.
3. Necessary corporate authorisations, such as Board Resolutions, etc., in case of companies.

1. Consideration

1. It is mandatory for shareholders to indicate the bank account details to which the consideration would be payable at the appropriate place in the Tender / Offer Form.
2. Consideration will be paid by crossed account payee cheque / demand draft / pay order / warrant to those shareholders whose offer has been accepted by the Company. The cheque / demand draft / pay order / warrant will be drawn in the name of the first named person in case of joint shareholders and despatched by April 27, 2002. The cheques would be made payable at par at all the centres where the Company is accepting applications and in the designated Collection Centres as in the case of public issues.
3. In case all the shares tendered for Buy-back are accepted by the Company then the delivery instruction given by shareholders to their DPs will be acted upon and the consideration will be paid directly to the concerned shareholder as specified above.
4. In case shares tendered for Buy-back are not accepted by the Company, the Company will instruct its DP, Karvy Consultants Limited, to transfer back the balance shares not accepted by way of off-market transfer to the concerned DP of shareholder by April 27, 2002, under intimation to the first named beneficial owner by Registered Post. Consideration in respect of shares accepted would be paid directly to the concerned shareholder as specified above.

1. Non receipt of this Letter of Offer by, or accidental omission to despatch the Letter of Offer to any person who is eligible to receive this Offer, shall not invalidate the Offer in any way. In case of non-receipt of this Letter of Offer, shareholders may send their application in plain paper in writing signed by all shareholders, stating name, address, number of shares held, Client Id number, DP name, DP Id number, bank account details, number of shares tendered for Buy-back together with a copy of the delivery instruction issued to the DP (duly endorsed by the DP) and other relevant documents (as mentioned in iii & v above) to the Registrar to the Buy-back Offer at Hyderabad.
2. All documents / remittances sent by or to shareholders will be at their own risk. Shareholders of the Company are advised to safeguard adequately their interests in this regard.

1. The Board of Directors confirm that there are no defaults subsisting in repayment of deposits, redemption of debentures or preference shares or repayment of term loans to any financial institutions or banks.
2. The Board of Directors confirm that based on a full enquiry conducted into the affairs and prospects of the Company and taking into account all the liabilities including prospective and contingent liabilities payable as if the Company were being wound up under the Companies Act, 1956, the Board of Directors have formed an opinion that

1. Immediately following the date of the Letter of Offer, there are no grounds on which the Company could be found unable to pay its debts.
2. as regards its prospects for the year immediately following the date of the Letter of Offer that, having regard to their intentions with respect to the management of the Company's business during the said year and to the amount and character of the financial resources which will be available to the Company during the said year, the Company will be able to meet its liabilities as and when they fall due and will not be rendered insolvent within a period of one year from that date.

17. AUDITORS' CERTIFICATE

The Board of Directors

Parry Agro Industries Limited

26/1847, Bristow Road

Willingdon Island

Kochi - 682003

Dear Sirs

We have been informed that the Board of Directors in their meeting held on 8^th December 2001 had decided to Buy-back Company’s shares as allowed under Section 77A of the Companies Act, 1956 and that the shareholders of the company have through the postal ballot, the results of which were declared at the Extra-Ordinary General Meeting held on January 25,2002 approved the buy-back upto 8,67,472 fully paid of Rs.10 each at a price not exceeding Rs.70 (Rupees Seventy) per share. We are now informed that the Board of Directors of the company at their meeting held on January 25,2001 have decided to buy back the shares at Rs.70 (Rs.Seventy only)per share. In this connection, we confirm as under:

1. We have inquired into the state of affairs of the Company in relation to its audited accounts for the year ended March 31, 2001, unaudited published results for the half-year ended September 30, 2001, projections for the year 2001-02 and the projections for the year 2002-03 as approved by the Board of Directors.
2. The amount of permissible capital payment towards Buy-back of equity shares (including premium) in question as ascertained below, has been properly determined in accordance with Section 77A(2)(c) of the Companies Act 1956 :

• Maximum amount permitted for Buy-back i.e.25%

1. Based on the representations made by the Company and other information and explanations given to us, which to the best of our knowledge and belief were necessary for this purpose, in terms of paragraph 24 of Schedule III to the SEBI(Buy-back of Securities)Regulations 1998 we report that we are not aware of anything to indicate that the opinion expressed by the Board of Directors in their declaration, approved at their meeting held on January 25,2002 a copy of which has been furnished to us for our records is unreasonable in the present circumstances.

Yours faithfully

For FRASER & ROSS

M K ANANTHANARAYANAN

Partner

Chartered Accountants

Kochi

Date: January 25,2002

1. The Board of Directors of the Company at their meeting held on 8^th December 2001 considered and approved the proposal for Buy-back of its Equity Shares by the Company.
2. The Equity Shares of the Company are listed on the Stock Exchanges at Chennai, Mumbai and Kochi Stock Exchanges, and is permitted for trading in the National Stock Exchange (NSE). Presently, the trading volumes of the Company are relatively low. The rationale behind listing is to provide liquidity to the shareholders by enabling them to buy/sell the shares on the Stock Exchanges. Such liquidity is presently not available to the shareholders of the Company due to lack of active trading in the shares. The Company intends to provide liquidity to the existing shareholders, through this Buy-back Offer, to provide them an exit route. Further, the Company also intends to de-list the equity shares from all the Stock Exchanges, where they are presently listed, after completion of Buy-back offer and other formalities are required.
3. The Company will adopt the "Tender Offer Method" to buy-back the shares of the Company from the existing shareholders.
4. A maximum amount of Rs.607.23 lakhs is required to finance the Buy-back of the Equity Shares of the Company and the same is proposed to be financed using existing resources of the Company. This amount does not exceed 25% of the paid up share capital and free reserves of the Company as per the audited results as on 31^st March 2001.
5. The Buy-back is expected to be completed in 12 months time, as permitted under the Companies Act, 1956. The Company shall however endeavour to complete the process at an early date.
6. The maximum Buy-back price of Rs.70 per Share has been determined taking the trends in market prices of the equity shares of the Company prevailing on the Stock Exchange, Mumbai, from time to time. The closing market price of the Equity Share at The Stock Exchange, Mumbai on November 26, 2001 (being the date of last trading immediately preceding the date of intimation to the Stock Exchanges about the Board Meeting for consideration of Buy-back proposal) was Rs.42.40 / - per share. The closing market price of the equity share in NSE where the shares are not listed but permitted for trading, on November 28, 2001 was Rs.50 per share. The maximum Buy-back price of Rs.70 is at a premium of 65% over the aforesaid price at The Stock Exchange, Mumbai and a premium of 40% over the aforesaid price in NSE.
7. The Company intends to acquire a maximum of 8,67,472 Equity Shares of Rs.10 each, constituting approximately 23.09% of the fully paid up equity share capital of the Company, at a price not exceeding Rs.70 per equity share involving a maximum outlay of Rs.607.23 lakhs. The share capital of the company will be reduced to the extent of 8,67,472 shares.
8. The Promoters and / or persons in control of the Company (hereinafter referred to as the Promoters) do not intend to tender their shares in response to the Buy-back.

2. The aggregate shareholding of the Promoters as on the date of the notice is 28,89,344 Equity Shares of Rs.10 each constituting 76.91% (approx.) of the Paid-up equity share capital of the Company.

2. The Promoters have not traded in the equity shares of the Company during the period of six months preceding the date of the Board Meeting at which the Buy-back was approved and from the date of Board Meeting till the date of notice convening the Extra-Ordinary General Meeting.

1. The Board of Directors confirm that there are no defaults subsisting in repayments of deposits, redemption of debentures or preference shares or repayment of term loans to any financial institutions or banks.
2. The Board of Directors confirm that based on a full enquiry conducted into the affairs and prospects of the Company and taking into account all the liabilities including prospective and contingent liabilities payable as if the Company were being wound up under the Companies Act, 1956, the Board of Directors have formed an opinion that –

1. Immediately following the date on which the Extra-Ordinary General Meeting of the Company is held, there are no grounds on which the Company could be found unable to pay its debts.
2. As regards its prospects for the year immediately following the date of the EGM, having regard to their intentions with respect to the management of the company’s business during the said year and to the amount and character of the financial resources which will be available to the Company during the said year, the Company will be able to meet its liabilities as and when they fall due and will not be rendered insolvent within a period of one year from that date.

1. A Text of the Report dated December 8,2001 received from Messrs. Fraser & Ross the Statutory Auditors of the Company addressed to the Board of Directors is given below:

December 8, 2001

The Board of Directors

Parry Agro Industries Ltd

TIAM House Annexe

2, Jehangir Street

CHENNAI 600 001

Dear Sirs

We have been informed that the Board of Directors in their meeting held on 8^th December 2001 have decided to Buy-back Company’s shares as allowed under Section 77A of the Companies Act, 1956. In this connection, we confirm as under:

1. We have inquired into the state of affairs of the Company in relation to its audited accounts for the year ended March 31, 2001, unaudited published results for the half-year ended September 30, 2001, projections for the year 2001-02 and the projections for the year 2002-03 as approved by the Board of Directors.
2. The amount of permissible capital payment towards Buy-back of equity shares (including premium) in question as ascertained below, has been properly determined in accordance with Section 77A(2)(c) of the Companies Act 1956 :

Share Capital as on March 31, 2001 Rs.

(37,56,816 Equity Shares of Rs.10 each fully paid up) 3,75,68,160

2,00,00,000 10.25% Cumulative Redeemable

Preference Shares of Rs.10 each, fully paid 20,00,00,000

Free Reserves as on March 31, 2001 46,13,02,880

_________

Total 69,88,71,040

__________

Maximum amount permitted for Buy-back i.e.25%

Of total paid up Capital and free reserves 17,47,17,760

Say 17.47 Crores

3. Based on the representations made by the Company and other information and explanations given to us, which to the best of our knowledge and belief were necessary for this purpose, we report that.

Yours faithfully

For FRASER & ROSS

M K ANANTHANARAYANAN

Partner

Chartered Accountants

1. If the Company makes any default in complying with the provisions of Section 77 A of the Act or any rules made thereunder, or any regulation made under clause (f) of sub-section (2) of Section 77A, the Company or any officer of the Company who is in default shall be punishable with imprisonment for a term which may extend to two years or with a fine which may extend to Rs. 50,000 or both.
2. The address of the concerned office of the Registrar of Companies is M.G.Road, Ernakulam, Kochi 682011.

Dear Sirs

• Corporate Authorisations
• Death Certificate
• Succession Certificate
• Power of Attorney
• Any Other, please specify

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PARRY AGRO INDUSTRIES LIMITED – BUY-BACK OFFER-ACKNOWLEDGEMENT

(to be filled by the shareholder)

1. This Offer will open on March 15 2002 and close on April 13 2002.
2. This Tender / Offer Form has to be read along with the Letter of Offer and is subject to the terms and conditions mentioned in the Letter of Offer and this Tender / Offer Form.
3. Shareholders who wish to tender / offer their shares in response to this Buy-back Offer should deliver the following documents so as to reach before the close of business hours of the respective Collection Centres (as mentioned in Page ---------- of the Letter of Offer) on or before April 13, 2002. Shareholders residing at locations where there are no collection centres should send their response to the Registrar to the Buy-back Offer, Karvy Consultants Limited at Hyderabad.

• The relevant Tender / Offer Form duly signed (by all shareholders in case shares are in joint names) in the same order in which they hold the shares.

• Original share certificates

4. Shareholders should also provide all relevant documents in addition to the above documents. Such may include (but not limited to):

• Duly attested Power of Attorney if any person other than the shareholder has signed the relevant Tender / Offer Form.
• Duly attested death certificate / succession certificate in case any shareholder has expired.
• Necessary corporate authorisations, such as Board Resolutions, etc., in case of companies.

4. Shareholders to whom this Offer is made are free to tender /offer their shareholding to the Company in whole or in part.
5. In case of non-receipt of this Letter of Offer, shareholders may send their application in plain paper in writing signed by all shareholders, stating folio number, name, address, number of shares held, share certificate number, distinctive numbers, number of shares tendered for Buy-back, bank account details together with the original share certificates and other relevant documents to the Registrar to the Buy-back Offer.
6. It is mandatory for shareholders to indicate the bank account details to which the consideration would be payable at the appropriate place in the Tender / Offer Form.
7. All documents / remittances sent by or to shareholders will be at their own risk. Shareholders of the Company are advised to safeguard adequately their interests in this regard.

ALL FUTURE CORRESPONDENCE IN CONNECTION WITH THIS BUY-BACK OFFER SHOULD BE ADDRESSED TO THE REGISTRAR TO THE BUY-BACK OFFER, KARVY CONSULTANTS LIMITED, HYDERABAD, QUOTING YOUR FOLIO NUMBER.

Dear Sirs Date -----------