FORTUNE FOODS LIMITED
ANNUAL REPORT 2007-2008
The members of
Fortune Foods Limited
1. We have audited the attached balance sheet of Fortune Foods Limited as
at March 31, 2008 and also the Profit and Loss Account for the year ended
on that date annexed thereto both of which we have signed under reference
to this report. These financial statements are the responsibility is to
express an opinion on there financial statements based on our audit.
2. We have 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 the
management, as well as evaluating the overall financial statements
presentation. We believe that our audit provides a reasonable basis for our
3. In our opinion and to the best of our information and according to the
explanations given to us, the said accounts together with the notes thereon
and attached thereto and the statement on significant accounting policies,
give in the prescribed manner the information required by the companies
act, 1956 of India (the 'Act') and on the profit for the year and the year
end net assets to the extent indicated therein also 'give, a true and fair
view in conformity with the accounting principles generally accepted in
India:ln case is the Balance Sheet, of the state of affairs of the Company
as at March 31, 2008; and
4. We have obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purposes of audit. In
our opinion, proper books of account have been kept by the Company as
required by law so far as appears from our examination of these books and
the aforementioned Balance Sheet and Profit and Loss Accounts in agreement
5. Read with Note 12 on Schedule 21, regarding related party disclosures
being identified and certified by the management, in our opinion these
accounts have been prepared in compliance with the applicable accounting
standards referred to in Section 211 (3C) of the Act.
6. On the basis of written representations received from the directors as
on 31st March 2008, and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on 31st March 2008
from being appointed as a director in terms of clause (g) of sub-section
(1) of section 274 of the Companies Act, 1956.
7. As required by the Companies ( Auditor's Report) Order, 2003 [ as
amended by Companies Auditor's Report) (Amendment) Order, 2004] and issued
by the Central Government of India in terms of Section 227 (4A) of the Act
and on the basis of such checks as we considered appropriate and according
to the information and explanations given to us, we further report that:
i. As follows:
a. The Company has maintained proper records to show full particulars,
including qualitative details and situation of its fixed assets.
b. The fixed assets of the Company are physically verified by the
management according to a phased programme designed to cover all the items
over a period of three years. Pursuant to the programme, a physical
verification was carried out during the year and this revealed no material
ii. The fixed assets of the Company have not been revalued during the year.
iii. The stocks of finished goods, work -in progress, stores, and spares
and raw material of the Company at all its locations, have been physically
verified by the management during the year.
iv. In our opinion, the procedures of physical verification of stocks
followed by the management are reasonable and adequate in relation to the
size of the Company and nature of its business,
v. Consequent to the large volumes leading to the non recording of
individual issues of raw materials and components, book balances are not
available at factory for comparison with physical balances of these items.
However, since the inventory is valued on the basis of adjusted physically
verified stocks, the discrepancies have been adjusted in the accounts.
vi. In our opinion, the valuation of stocks of finished goods, work -in
progress, stores and spares and raw material has been fair and proper in
accordance with normally accepted accounting principles in India and is on
the same basis as in the preceding year.
vii. 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 Act.
viii. In our opinion, there is an adequate internal control procedure
commensurate with the size of the Company and the nature of its business
for purchase of stores, raw material, including components, plant and
machinery equipment and similar assets and for the sale of goods
ix. The company has not paid deferral Sales Tax in the year 2007-08 as per
Sales Tax NPV discounted payable scheme. Hence R,s. 0.23 cr. Expenses has
been reversal in the Balance Sheet 2007-08 the company has to pay Rs. 2.51
Cr. And Rs. 3.24 Cr as income has been shown more as the reversal of Safes
Tax Benefits in the Balance Sheet as on 31st March 2008.
x. In our opinion, purchase of goods, materials and sale of goods,
materials as services, made in pursuance of contracts or arrangements
entered in the register maintained under Section 301 of the Act and
aggregating during the year to Rs. 50,000 or more in value in respect of
each party have been made at prices which are reasonable having regard to
prevailing market prices for such goods, materials, or services, or the
prices at which transactions for similar goods or services have been made
with other parties.
xi. The Company has a system of determining unserviceable or damaged
stores, raw materials, packing material or finished goods on the basis of
technical evaluation and on such basis, in our opinion, adequate amounts
have been written off from such stocks in the accounts.
xii. The company has not accepted any public deposits during the year.
xiii. The company has not generated any scrap having realizable value. The
company does not have any by- products.
xiv. Central Govt. has not prescribed maintenance of Cost Records under
Section 209 (1) (D) of the Companies Act for the Company.
xv. In our opinion, the Company is present internal audit system in
commensurate with its size and nature of business.
xvi. At the last day of the financial year there was no amount outstanding
in respect of undisputed Income Tax, Wealth Tax, Sales Tax, Customs Duty
and excise duty which were due for more than six months from the day become
payable except tax deducted at source payable of Rs.18,78,048/-.
xvii. During the course of our examination of the books of accounts carried
out in accordance with the generally accepted auditing practices in India,
we have not come across any personal expenses which have been charged to a
Profit and Loss Account nor have we been informed for such case by the
management other than those payable under contractual .obligation and I or
excepted business practices.
xviii. The company is not a Sick Industrial Company within the meaning of
clause (o) of Section 3 (1) of the Sick Industrial Companies (Special
Provision) Act, 1985 of India.
for SHRIKANT L. JAJOO & CO.
Place: Nashik Sd/-
Date: 30.06.2008 (SHRIKANT L. JAJOO)