Temptation Foods Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2010

We have audited the attached Balance Sheet of Temptation Foods Limited, as at 31st March, 2010, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date, an- nexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opin- ion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards gen- erally 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In accordance with provisions of Section 227 of the Companies Act, 1956, we report that:

1. As required by the Companies (Auditor’s Report) Order, 2003 as amended by the Companies (Auditor’s Report) (Amendment) Order, 2004 (‘the Order’) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters speci- fed in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to above, we report that:

(i) we have obtained all 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 it appears from our examination of those books;

(iii) the Balance Sheet, the Proft and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) in our opinion, the Balance Sheet, the Proft and Loss Ac- count and the 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 the written representations received from the directors of the Company as on 31st March, 2010 and taken on record by the board of directors, we report that none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(vi) attention is invited to Note No. 15 of Schedule B – Note to the Accounts concerning the accounting for gratuity liability in view of the employees group gratuity policy with the Life Insurance Corporation of India not being renewed;

(vii) attention is invited to Note No. 17 of Schedule B – Notes to the Accounts pertaining to extra-ordinary loss on sale of shares of Kohinoor Foods Limited; and

(viii) in our opinion, and to the best of our information and ac- cording to the explanations given to us, the said financial statements, read together with the Significant Account- ing Policies and the Notes to the Accounts appearing in Schedule ‘A’ and Schedule ‘B’ respectively, give the infor- mation required by the Companies Act, 1956, in the man- ner so required and give a true and fair view in conformity with the accounting principles generally accepted in In- dia:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

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 fows for the year ended on that date.

Annexure to the Auditors Report (Referred to in paragraph 1 of our report of even date)

(i) (a) The Company is maintaining proper records to show full particulars, including quantitative details and situation of all fixed assets.

(b) As explained to us, these fixed assets have been physi- cally verified by the management in accordance with a phased programme of verification over a period of three years, which in our opinion, is reasonable, considering the size of the Company and nature of its assets. According to the said programme, a physical verification of plant and machinaries at the Company’s plants at Jejuri and Sonepat, were carried out during the year. No material discrepancies were noticed on such verification.

(c) None of the fixed assets disposed off during the year affect the going concern status of the Company.

(ii) (a) As explained to us, the inventories have been physically verified by the management at reasonable intervals dur- ing the year. In our opinion, the frequency of such verif- cation is reasonable.

(b) As explained to us, the procedures of physical verification of inventory followed by management are, in our opinion, 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. The discrepancies between the physical stocks and the book records, which were not material, have been prop- erly dealt with in the books of account.

(iii) (a) The Company has not granted any loans, secured or un- secured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, Clauses 4 (iii) (b) to (d) of the Or- der are not applicable to the Company.

(b) The Company has not taken any loans, secured or unse- cured, from companies, firms or other parties covered in the register maintained under Section 301 of the Com- panies Act, 1956. Accordingly, Clauses 4 (iii) (f) and (g) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explana- tions given to us, there are adequate internal control proce- dures commensurate with the size of the Company and nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. According to the informa- tion and explanations given to us, we have neither come across nor had been informed of any continuing failure to correct ma- jor weaknesses in the aforesaid internal control systems.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the regis- ter maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and ex- planations given to us, the transactions made in pursu- ance of contracts or arrangements entered in the regis- ter maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupees fve lakhs in respect of any party during the year, have been made at prices which are reasonable having regards to the prevail- ing market prices at the relevant time.

(vi) During the year, the Company has neither accepted nor re- newed any deposits from the public under the provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and hence the directives issued by the Reserve Bank of India and the rules framed thereunder, do not apply to the Company. According to the information and expla- nations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company.

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

(viii) According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 for any of the products manufactured by the Company.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has been generally regular in de- positing undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, cess and other material statutory dues as applicable with the appropriate authorities. According to the in- formation and explanations given to us, no undisputed material statutory dues were in arrears as at 31st March, 2010 for a period of more than six months from the date they became payable, except for the arrears of income tax and sales tax dues amounting to Rs.121,061,145 and Rs. 907,528 respectively. However, the arrears of income tax dues have since been paid.

(b) According to the information and explanations given to us, no disputed amounts payable in respect of sales tax/ income tax/custom duty/wealth tax/excise duty/cess were outstanding as at 31st March, 2010.

(x) The Company has no accumulated losses as at 31st March, 2010 and has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) According to the information and explanations and the relevant documents produced for our examination, the Company has not defaulted in repayment of principal amounts to any finan- cial institution or bank. The overdue interest as at the balance sheet date, has since been paid. The Company has not issued any debentures.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund, nidhi/mutual benefit fund/so- ciety and hence, the provisions of Clause 4 (xiii) of the Order are not presently applicable to the Company.

(xiv) In our opinion and according to the information and explana- tions given to us, the Company is not dealing or trading in shares, securities and other investments. However, the invest- ments made by the Company are properly recorded and held in the name of the Company.

(xv) The Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xvi) In our opinion and according to the information and explana- tions given to us, there was no stipulation regarding the util- isation of loan given by the lending bank in the earlier year. According to the explanation given to us, the said loan was uti- lized for the business and not for purposes that are prohibited under the law.

(xvii) According to the information and explanations given to us and on 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 investments.

(xviii) During the year, the Company has not made preferential allot- ment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) During the year, the Company has not issued any debentures. Accordingly the provision of Clause 4 (xix) of the Order is not presently applicable to the Company.

(xx) The Company has not raised any money by public issues during the year. Accordingly, the provision of Clause 4 (xx) of the Order is not presently applicable to the Company.

(xxi) During the course of our examination of the books of account and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, no- ticed or reported during the year, nor have we been informed of such case by the management.

For SHARP & TANNAN

Chartered Accountants

Firms Reg. No. 109982W by the hand of



EDWIN P. AUGUSTINE

Place: Mumbai, Partner

Date: 28th May, 2010 Membership No. 43385

---

Mar 31, 2009

We have audited the attached Balance Sheet of Temptation Foods Limited, as at 31 st March, 2009, the Profit and Loss 1 Account and also the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys 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 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In accordance with provisions of section 227 of the Companies Act, 1956, we report that:

1. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004 ("the Order") issued by the Central Government of India in terms of Section 227 (4A) 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.

2. Further to our comments in the Annexure referred to above, we report that:

i) We have obtained all 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 it appears from our examination of these books;

iii) The Balance Sheet, Profit and Loss Account and the 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 the written representations received from the directors of the Company as on 31 st March, 2009 and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

vi) Attention is invited to note no. 2(b) of Schedule Q - Notes to the Accounts concerning the accounting for capital reserve on arising on acquisition of Karen Anand brand and business for Rs. 63,916,215.

vii) Attention is invited to note no. 12 of Schedule Q - Notes to the Accounts pertaining to extra-ordinary loss on sale of shares of Kohinoor Foods Limited Rs. 25,191,443.

viii) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts, read together with the Significant Accounting Policies and the Notes on Accounts appearing in Schedule Q and Schedule R respectively, 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, 2009;

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.

ANEXERE TO THE AUDITORS REPORT (Referred to in paragraph 1 of report of even date 3 of our Report of even date)

i) a) The Company is maintaining proper records to show full particulars, including quantitative details and situation of all fixed assets.

b) As per explanation given to us, these fixed assets have been physically verified by the management, in accordance with a phased programme of verification, which in our opinion, is reasonable, considering the size of the Company and nature of its assets. The frequency of physical verification is reasonable and no material discrepancies were noticed on such verification.

c) None of the fixed assets disposed off during the year affect the going concern status of the Company.

ii) a) As explained to us, the inventories have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable.

b) As per information given to us, the procedures of physical verification of inventory followed by management are, in our opinion, 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. The discrepancies between the physical stocks and the book stocks, which were not material, have been properly dealt with in the books of accounts.

iii) a) The Company has not granted any loans, secured and unsecured, to companies, firms or other parties listed in the register under section 301 of the of the Companies Act, 1956. Accordingly, clauses 4 (iii) (b) to 4(iii) (d) of the order are not applicable to the Company.

b) The Company has not taken any loans, secured and unsecured, from companies, firms or other parties listed in the register under section 301 of the of the Companies Act, 1956. Accordingly, clauses 4 (iii) (f) to 4(iii) (g) of the order are not applicable to the Company.

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 nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. According to the information and explanations given to us, we have neither come across nor had been informed of any continuing failure to correct major weaknesses in the aforesaid internal control systems.

v) a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into 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 or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year, have been made at prices which are reasonable having regards to the prevailing market prices at the relevant time.

vi) During the year, the Company has neither accepted nor renewed any deposits from the public under the provisions of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and hence the directives issued by the Reserve Bank of India and the rules framed there under, do not apply to the Company. According to the information and explanations given to us, no order has been passed by the Company Law board, or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company.

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

viii) According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956, for any of the products manufactured by the Company.

ix) a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has been generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, tax deducted at source, sales tax, wealth tax, service tax, vat, cess and other statutory dues as applicable with the appropriate authorities.

b) According to the information and explanations given to us, no undisputed statutory dues were in arrears outstanding as at 31 st March, 2009 for a period of more than six months from the date they became payable except the following:

Name of the Statute Nature of Dues Amount (Rs) Period to which

amount relates

Income Tax Act, 1961 Tax deducted at source 2,618,169 2008-09

Income Tax Act, 1961 Advance Income Tax 31,628,611 2008-09

Income Tax Act, 1961 Advance Fringe 765,729 2008-09

Benefits Tax

b) According to the information and explanations given to us, no disputed amounts payable in respect of provident fund, investor education and protection fund, income tax, wealth tax, custom duty and other statutory dues were outstanding, at 31 March, 2009, for a period of more than six months from the date they became payable.

x) The Company has no accumulated losses as at 31st March, 2009 and has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

xi) During the year the Company has not taken any loans from any financial institution or bank, and has not issued any debenture.

xii) We are of the opinion that the Company has maintained adequate records where the Company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The Company is not a Chit fund, Nidhi/Mutual Benefit fund/society and, hence, the provisions of clause 4 (xiii) of the Order are not presently applicable to the Company.

xiv) In our opinion and according to the information and explanation given to us, the Company is not dealing or trading in shares, securities and other investments.

xv) The Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi) The provision of clause 4 (xvi) of the Order is not presently applicable to the Company since it has not taken any term loans during the financial year.

xvii) According to the information and explanations given to us, and on overall examination of the balance sheet of the Company, no funds raised on short-term basis have been used for long-term investments.

xvii) During the year, the Company has not made preferential allotment of shares to parties or companies to be covered in the register maintained under Section 301 of the Companies Act, 1956.

xix) During the financial year, the Company has not issued any debentures. Hence in our opinion, the provision of clause 4 (xix) of the Order is not presently applicable to the Company.

xx) The Company has not raised any money by public issues during the year. Accordingly the provision of clause 4 (xx) of the Order is not presently applicable to the Company.

xxi) During the course of our examination of the books of account and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have not come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.



For Sharp & Tannan

Chartered Accountants

By the hand of

Edwin P Augustine

Partner

Place : Mumbai, (Membership No. 43385)

Date : April 27, 2009