temptation foods ltd share price Auditors report

TEMPTATION FOODS LIMITED ANNUAL REPORT 2009-2010 AUDITORS REPORT To The Members of Temptation Foods Limited 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, 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 those books; (iii) the Balance Sheet, the 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, the Profit and Loss Account 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 according to the explanations given to us, the said financial statements, read together with the Significant Accounting Policies and the Notes to the Accounts appearing in Schedule A and Schedule B 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, 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 flows for the year ended on that date. 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 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 physically 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 Companys 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 during the year. In our opinion, the frequency of such verification 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 properly dealt with in the books of account. (iii) (a) The Company has not granted any loans, secured or unsecured, 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 Order are not applicable to the Company. (b) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Companies 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 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, 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 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 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 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 depositing 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 information 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 financial 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/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 explanations given to us, the Company is not dealing or trading in shares, securities and other investments. However, the investments 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 explanations given to us, there was no stipulation regarding the utilisation of loan given by the lending bank in the earlier year. According to the explanation given to us, the said loan was utilized 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 allotment 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, noticed 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