its all in the - 1icz9g2sdfe31jz0lglwdu48 … & A with the Managing Director & CEO 20 ... Zeus and the wife of King Menalus of Sparta, ... Frozen Tiger Prawns; Shrimps and Other Sea

Temptation Foods LimitedAnnual Report 2008-09

its all in the

www.reportjunction.comwww.reportjunction.com

www.reportjunction.com

http://www.reportjunction.com


COntentsIntroduction to Temptation Foods 2 The Temptation of Sight 7

Our Products 10

Brands 12

The Temptation of Taste 15

The Year 2008-09 18

Q & A with the Managing Director & CEO 20

Our Clientele 21

The Temptation of Touch 23

Profile of the Board of Directors 26

Our Social Initiatives 27

The Temptation of Smell 28 Directors’ Report 32 The Temptation of Hearing 43 Management Discussion & Analysis 46 Report on Corporate Governance 56

Auditors’ Report 66 Financial Statements 70

FOrward lOOking statementIn this Annual Report, we have disclosed forward-looking

information to enable investors to comprehend our prospects

and take informed investment decisions. This report and other

statements - written and oral - that we periodically make, contain

forward-looking statements that set out anticipated results based

on the management’s plans and assumptions. We have tried

wherever possible to identify such statements by using words

such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’,

‘plans’, ‘believes’, and words of similar substance in connection

with any discussion of future performance.

We cannot guarantee that these forward-looking statements

will be realised, although we believe we have been prudent

in assumptions. The achievement of results is subject to risks,

uncertainties and even inaccurate assumptions. Should known or

unknown risks or uncertainties materialise or should underlying

assumptions prove inaccurate, actual results could vary materially

from those anticipated, estimated or projected. Readers should

bear this in mind.

We undertake no obligation to publicly update any forward-

looking statements, whether as a result of new information, future

events or otherwise.





Temptation is the root of all possibilities in life.

There is no morality attached to it.

Without temptation, there would be no progress,

advancement, or growth.

Everything would be as it were.

Temptation provides man with the primary

motivation to change things from “what is” to what

one desires it to be.

It is the inner urge to do something, to make

something, to invent, innovate, to possess.

Temptation has spawned empires, bankrupted

nations, and enriched some beyond all imagination.

It feeds ambition, powers enterprise and provides the

adrenalin to go the extra length and achieve

the impossible.

Temptation is a sensuous experience.

It is perceived via the gateways of sight,

hearing, smell, touch, and taste.

Temptation is one of the most

fundamental of perceptions, and it is

symptom of life as we know it.

I am, therefore I am tempted.





Temptation Foods Ltd. (TFL) is a major player and one of the largest organised

sector enterprises in the Indian food processing industry. The Company has

made a mark for itself in the Individual Quick Freezing (IQF) processed fruits

and vegetables segment. The Company employees over 256 employees in FY

2008-09; up from a mere 64 in FY 2005-06; and a turnover of Rs. 8,719.81

million. Currently, TFL’s businesses include frozen fruits & vegetables,

processed foods, marine foods and ready-to eat foods for the domestic as well as

international markets.

Tempting GrowthTFL has had a remarkable transformation after having been declared as a sick

Company in 1999 due to teething problems and losses over the years. The

growth has been exponential after VBAPL (Venture Business Advisors Private

Limited – the current promoters) stepped in. In the last 2 years, the Company’s

total income increased by a stupendous 2,098.70% from Rs. 396.59 million

to Rs. 8,719.81 million! This quantum leap was achieved from a small base,

primarily on account of sustained international demand for frozen fruits and

vegetables, our entry into the marine business and the acquisition of the Karen

Anand and Ever Fresh brands. TFL has now entered the domestic processed food

industry with an aim of becoming one of the dominant players in the sector.

Acknowledged quality standardsFor a Food processing unit, Quality and Hygiene are the most critical criteria

and TFL has been certified by BVQI for meeting the requirements of “Global

Standard For Food Safety” (i.e. TFL meets BRC - British Retail Consortium norms)

& achieved Grade-A. The Company has also been certified by BVQI for ISO

22000:2005 i.e. Food Safety Management System.

Expertise in Individual Quick Freezing (-) 180CIndividual quick freezing is a process of rapidly reducing the temperature of

the fruit/vegetable/meat to between (-) 180C and (-) 240C. Rapid freezing halts

the activities of all micro organisms that cause decay and deteriorate food stuff.

Individual quick freezing of vegetables and fruits keep them farm fresh for up

to a year without the loss of any flavour, texture, or colour. The big advantage

of Individual Quick Freezing is that you do not have to defrost the entire

package to take out a small portion, and the food remains fresh till the time of

consumption. Further, processing enhances shelf life of agricultural produce and

thus reduces wastages.

Growing market for frozen foodsFrozen foods have a growing market in India and in the

rest of the world.

The major market segments for frozen fruits include:

Retail outlets for direct consumption

Hotels, Restaurants, caterers and eateries.

Industries that use food as raw materials and

desire to process them in the lean season.

Export markets.

In the last 2 years, the Company’s total income increased by a significant 2,098.70% from

Rs. 396.59 million to

Rs. 8,719.81 million

02 Ann

ual R

epor

t 200

8-09





TFL meets BRC - British Retail Consortium norms and has achieved Grade-A. The Company has also been certified by BVQI for ISO 22000:2005 i.e. Food Safety Management System





Mission Statement Build a high performance organisation

via empowering people

Leverage core strengths for accelerated scalability

Acquire quality customers

Grow geometrically via accretive acquisitions

04 Ann

ual R

epor

t 200

8-09





TFL ValuesExcellenceAt TFL we strongly believe that the only way to progress is by

offering the best products and the best services to customers. This

is a continuous process at TFL.

Service along with the productWe offer the right products, at right prices and at the right time.

Our service to customers is in-built and complimentary to our

products.

Customer focusWe respect our customers, listen to them and consistently offer

them the services they need. We always say ‘YES’ to service

demanded by the customer, and have learnt that it is the only

way to develop customer satisfaction. With improved levels

of customer service, we raise the bar, and endeavour to work

towards customer delight.

Social ResponsibilityWe are committed to positively impact the society we live and

operate in, and realise that the long term success of a Company

is ensured only when it creates value for the shareholders as

well as the society. This includes the farmers who supply us,

our employees, our consumers and the communities where we

operate.

At TFL we strongly believe that the only way to progress is by offering the best products and the best services to customers. This is a continuous process at TFL.

05Tem

ptat

ion

Food

s Li

mite

d





06 Ann

ual R

epor

t 200

8-09





The Temptati n

of sight“You shall possess and marry the most beautiful woman in the world!”

promised Aphrodite, the Greek goddess of love and beauty to Paris, the handsome Prince of Troy.

The trouble though, was that she was already married. The most beautiful woman in the world then was Helen, the daughter of the divine Zeus and the wife of King Menalus of Sparta, who was the younger brother of the

powerful King Agamemnon of Greece.

07Tem

ptat

ion

Food

s Li

mite

d





Helen’s beauty was legendary. As a maiden, it is said that her father’s kingdom was almost bankrupted by playing host to the never-ending stream of suitors who came, seeking her hand in marriage.

The young prince Paris went to Sparta, as part of a diplomatic delegation from Troy. He was accompanied by his righteous and brave elder brother Prince Hector.

He sighted Helen, and stood rooted to the ground, as though he was struck by lightning. His eyes gleamed and his muscles froze. It was love at first sight.

Temptation had sunk its sharp teeth into his soul and he could not resist its seductive call.

Unknown to the righteous Hector, Paris abducts Helen and takes her on board their ship back to Troy. Much against the wishes of Hector, Paris married Helen once they were in Troy.

This act enraged King Menalus and Agamemnon, who brought together all the ex suitors of Helen and launched the biggest armada of a thousand ships to win back Helen.

08 Ann

ual R

epor

t 200

8-09





This led to the fierce battle for Troy that lasted ten years. After the deaths of many valiant heroes, including Achilles and Ajax, and the Prince Hector and Paris, the city fell to the ruse of the Trojan horse.

The legend of the fall of Troy is one of the most important Greek tragedies.

Christopher Marlowe, who wrote of the epic war stated:

Was this the face that launched a thousand ships And burnt the topless towers of Ilium?

Sweet Helen, make me immortal with a kiss.

For Prince Paris, though, it was the kiss of death.

He saw Helen, and he succumbed to Temptation!

09Tem

ptat

ion

Food

s Li

mite

d





OuR PROduCTS

TFL has grown remarkably, considering its small

beginnings. Today the Company offers one of the largest

product ranges in the industry. The impressive product

bouquet consists of 50+ types of products, including

frozen fruits & vegetables (F&V), marine food and recipe

foods amongst others.

010 Ann

ual R

epor

t 200

8-09





Frozen F&VFruits – Mango (Alphonso, Totapuri, Rajapuri); Red &

Yellow Papaya; Orange & Green Melons and Strawberry

among others

Vegetables – Green Beans; Okra; Red/Green Capsicum;

Cauliflower Florets; Green Peas; Karela; Guwar; Potato;

Carrot; Onion; Yam (Suran); Drum Sticks; Tinda;

Tindora; Chillies; Garlic Crush; Chillies+Ginger Crush;

Garlic+Ginger Crush

Ethnic Indian Vegetables – Surti Papdi Beans; Surti

Lilva; Valor papdi; Valor Vilva; Tuvar Yellow; Tuvar Lilva;

Tindora (Smooth Gourd); Punjabi Tinda; Parwal (Pinted

Gourd); Turia and Methi among others

Herbs – Basil; Bay Leaf; Chervil; Chives; Fenugreek;

Mint; Oregane; Parsley; Sorrel and Thyme

Marine FoodsFrozen Tiger Prawns; Shrimps and Other Sea Foods

Recipe FoodsJams, Conserves, Salad, Salad Dressings and Sauces

Today the Company offers one of the largest product ranges in the industry. The impressive product bouquet consists

of 50+ varities of products

011Tem

ptat

ion

Food

s Li

mite

d





Brands EverfreshTFL acquired the Everfresh brand from Chambal Fertilisers and Chemicals in 2007. Everfresh

is one of the biggest domestic brands in the frozen fruits and vegetables segment. The

brand offers over 50 different types of IQF (Individually Quick Frozen) vegetables and fruits

such as Green Peas, American Sweet Corn, Baby Corn, Cauliflower, Beans, Carrots, Mixed

Vegetables, Broccoli, Palak, Sarson ka Saag, Shredded Coconut and different varieties of fruits

like Alphonso Mango. Everfresh’s uncompromising adherence to nutrition, taste, hygiene and

quality standards ensures that products reach the customers as fresh as it was in the farm.

delikaEverfresh is internationally known as “Delika” and has an impressive product range under

its umbrella. The brand comprises of products like, Green Peas, American Sweet Corn,

Baby Corn, Cauliflower, Beans, Carrots, Mixed Vegetables, Broccoli, Palak, Sarson ka

Saag, Shredded Coconut and different varieties of fruits like Alphonso Mango. Everfresh’s

uncompromising adherence to nutrition, taste, hygiene and quality standards ensures that the

products reach the customers with the same freshness it has on the farm.

Karen AnandKaren Anand was an acquisition of TFL from Karen’s Gourmet Kitchen Pvt Ltd. All of

Karen Anand’s products are meticulously designed to provide consumers with an authentic

international food experience.

Karen Anand’s product mix in proportion to their contribution to sales turnover

from this segment:

Taken together, these account for a nominal portion of TFL’s total

revenues. Conserves, Sauces and Dressings constitute the main

segments under this brand.

Conserves 59%

Jams 10%

Marmalade 10%

Sauces 5%

Mayonnaise 8%

Salad dressings 2%

Honey 6%

012 Ann

ual R

epor

t 200

8-09





013Tem

ptat

ion

Food

s Li

mite

d





014 Ann

ual R

epor

t 200

8-09





He quaffed a golden goblet of chocotyl, and smiled indulgently, as he ran his eyes amongst the women of his harem.

Who would catch his fancy tonight? Bestirred by the potion, his nerves came to life, with a vigour that was the pride and glory of his empire! This was a daily ritual for him. Chocotyl was his favourite potion, and there were whispers in the palace corridors that it was the secret to his legendary sexual prowess and staying power.

015Tem

ptat

ion

Food

s Li

mite

d





Montezuma, the mighty King Emperor of the Aztecs took no other beverage other than chocotyl, a potation of chocolate, flavoured with vanilla, and other spices, reduced to a froth with the consistency of honey. He is reputed to have consistently drunk over 50 goblets of his favourite brew every day!

The King Emperor did not realise it then, but he was history’s first Chocoholic.

He had tasted the divine flavours and there was no looking back.

The 600 plus beauties of his harem bore testimony to the aphrodisiac prowess of chocolate.

Such is the reputation of chocolate, that over the ages that even the legendary Casanova swore by it. Even the mighty Napoleon is supposed to have chewed on it before entering his Empress’s bed chambers.

The role of chocolate in the mating ritual of man and women is well established today. More recently it has been proven that it not only increases sexual appetite, but also produces a sense of elation, akin to an orgasm.

Chocolate has been found to contain modest amounts of the stimulants caffeine and theo-bromine. Chocolate is also known to generate increased levels of serotonin, a chemical naturally produced by the brain, which is known to reduce anxiety. The rush of endorphins produced by eating chocolates, particularly dark chocolates, is most similar to the bliss associated with a healthy sexual relationship. Chocolate also contains phenyl-ethylamine which is known to stimulate the release of dopamine into the pleasure centres commonly associated with an orgasm.

From Montezuma to every callow lover during the Valentines day, men insinuate their love for women with Chocolate in the hope that it will be love at first bite…..

She bit into it, and so she succumbed to its temptation!

016 Ann

ual R

epor

t 200

8-09





017Tem

ptat

ion

Food

s Li

mite

d





THE YEAR 2008-09Financial Performance

0 2000 4000 6000 8000 10000

2008-09

2007-08

Year

2006-07

Total Income Rs. million

8720

397

0 100 200 300 400 500 600 700 800

2008-09

2007-08

Year

2006-07

EBIdTA Rs. million

800

323

71

0 100 200 300 400 500 600

2008-09

2007-08

Year

2006-07

PAT Rs. million

527

238

58

0 500 1000 1500 2000 2500 3000

2008-09

2007-08

Year

2006-07

net Worth Rs. million

2550

2029

307

0 5 10 15 20 25 30

2008-09

2007-08

Year

2006-07

25.34

23.65

28.20

0 5 10 15 20 25

2008-09

2007-08

Year

2006-07

EPS

21.96

11.42

4.59

growthin 08-09164%

growthin 08-09

growthin 08-09(Before Extra-ordinary Items)

121%

164%

growthin 08-0992%

growthin 08-0926%

3295

Return on Average Capital Employed

018 Ann

ual R

epor

t 200

8-09





dEVELOPMEnTS & InITIATIVES duRInG THE YEARRecent developments

KGK shifted its production base to a dedicated facility at Nira, near existing

plant at Jejuri; in order to maintain operational synergies. It has launched new

‘premium’ branding and packaging initiative.

The Company declared its maiden dividend @ Rs. 0.60 per share.

The Company added new customers in Europe via the Private Label business

route.

Started mango pulp canning operations at a leased plant at Madanapalli. The

product is marketed under the Everfresh brand.

Invested Rs. 300 million to streamline the processing facilities and optimise the

product mix.

The Company was declared free from the “sick” status as per the July 2008 order

of AAIFR. The Company has therefore been relieved from the purview of SICA.

Acquisitions & Investments The Company incorporated Temptation Foods International Ltd. (TFIL) in the

British Virgin Islands. The Company will hold 100% shares of TFIL as and when

TFIL issues shares.

As on 31st March, 2009, the Company has acquired 2,856,632 shares,

representing 10.13% of the share capital of the Kohinoor Foods Limited, a

company engaged in Basmati rice and Ready-To-Eat (RTE) business with a global

foot print.





Q: How do you think the global slowdown will affect Temptation Food?

The past year was an exceptional one for the global economies. There was unprecedented economic turbulence and a financial meltdown, and yet, the full impact of the economic slowdown is still unknown. However in the processed foods business, we are relatively insulated from the impact of the slowdown. The industry is based on a basic requirement, and thus, its demand is comparatively inelastic compared to other industries.

Q: So, in a relatively flat environment, what factors helped you grow?

I think our brand focus and ability to strategically acquire more and more labels enabled us to have an enhanced product base. This in turn, allowed us to expand across all geographies, and add newer areas to our customer profile. This plus a continuous focus on efficiency and productivity, helped us grow significantly.

Q: Do you think this momentum will sustain across FY 2010?

Revenues from direct exports presently form a very small component of total revenues. In FY 2010, it is likely that some of our customers will face liquidity issue. However, we see that as a temporary phenomenon. . We think this is a short-term phenomenon, and underlying demand will remain strong in the long term. We’re not immune to the overall economic conditions, but like I explained earlier, the propensity of our business to get affected is relatively low. Also, we see a distinct improvement in the global economic scenario which has led to significant optimism.

Q: What specific growth plans have you outlined for Temptation Foods?

We are planning to expand our presence pan-India through a mixture of our established acquisitive strategy and organic growth. We will look going north to Uttaranchal, west to Gujarat and extend this to the southern states as well. Temptation Foods is actively evaluating investments in Agri- Infrastructure, to emerge as an integrated player in our domain. In think the next few quarters will see us making quite a few dramatic moves.

Q: What about the growth in the existing product profile? I think all our brands will grow fairly well, given our strategy to

ensure that the domestic market contributes at least 50 per cent to our revenues. This is in line with our vision to occupy almost 10-12 per cent of the Indian kitchen. Our export markets will be driven by the marine foods business. As of today, the KGK range contributes a marginal portion; however plans are on the anvil to add capacities and drive growth.

Q: You recently made an apparently unrelated acquisition in the IT space. Tell us about the benefits you see accruing from it?

We have always tried to leverage business relationships at

an equity level for long term value generation, rather than booking expenses on service contracts, where we see long term potential. Aptsource, in which we acquired a 70 per cent stake in January, is a high-end enterprise solutions consulting firm.

We seek to leverage that expertise and their intellectual capital to create customised technology and supply chain management solutions for Temptation Foods, which will result in tighter operations going ahead. So, rather than let IT be a cost centre, we have turned it into an equity investment, which has an independent value, as well as a significant accrual to our core business.

Managing the supply chain for food products is a logistics intensive exercise. Temptation Foods seeks to manage its growth with critical inputs from information technology and has, therefore, laid out a plan for advanced systemic implementation. The acquisition of Aptsource Software is an important step in that direction.

Q: A major portion of Temptation Foods’ revenues are derived from exports. How do you counter the exchange fluctuation risk?

We cater to a large number of third party exports. We serve Indian ethnic traders settled overseas. As a matter of fact, when we began (4/5 years earlier), most of our customers were ethnic Indian traders, settled abroad, but having entities in India. As a result of this, they were eager to avail of the various export incentives. Since then, as a matter of principle, the billing is done in rupees and the dollar rates are not taken into account. This unique arrangement has insulated us from the problems of exchange rate fluctuations.

Q: But still, as your business grows, you may not be able to exercise this option in all cases. How do you derisk the business then?

In the past couple of years, our major focus has been on creating a risk-neutral business model. Today, we are diversified against product because of our range, geography because of our spread, and customers because of the excellent relationships we preserve and newer ones that we build every year. This is the core of the derisking mantra at Temptation Foods, and I expect it to hold true in the years to come.

Q: So if you were to sum up your future growth path, what would that be?

We are presently on a sharp learning curve, with a focused determination to provide the best in products and services to our customers. We are committed to building and sustaining a high performance organisation via people; leverage core strengths for accelerated scalability; acquire quality customers; and grow exponentially through acquisitions and organic growth, in emerging as an admired and preferred company in the foods business.

QA&WITH THE MAnAGInG dIRECTOR & CEO – MR. VInIT KuMAR

020 Ann

ual R

epor

t 200

8-09





OuR CLIEnTELE TFL has a diverse customer base both in domestic as well as international markets.

We serve giant global corporations in US, Canada, Germany, U.K., Japan and the

Middle East. The domestic patrons include a number of prestigious hotels as well as

large domestic retail chains.

International Ethnic Deep Foods, Inc.(USA & Canada), Al Kabeer

International Mainstream Frenzel, Mondial Foods, DKSH

domestic Institutional TAJSATS, TAJ, Reliance Fresh , McDonald’s, ITC, Radisson, Jaypee Hotels, Sumeru, Oberoi Hotels & Resorts, Pizza Hut, The Park, Haldiram’s , Holiday Inn

domestic Retail (Retail Chains) Big Apple, Metro, ShopRite, Spencer’s, Big Bazaar, foodworld

021Tem

ptat

ion

Food

s Li

mite

d





022 Ann

ual R

epor

t 200

8-09





Globalisation of trade was caused by a series of events that began in the royal garden of the famed Yellow Emperor of China

in 3000 B.C.

023Tem

ptat

ion

Food

s Li

mite

d





Lady Hsi-Ling-Shih, wife of the mythical Yellow Emperor, sat in her garden, under a tree sipping tea. Suddenly there was a splash in the tea cup, and she noticed a white cocoon like object in her glass. Curious as to what it was, she dipped her fingers into the

tea cup and picked it up. She rolled it in her fingers, and she felt the sensuous strands surrounding the cocoon unravelling. They

were shiny and smooth to touch.

024 Ann

ual R

epor

t 200

8-09





Lady Hsi-Ling-Shih did not realise it then, but she was the first to touch silk.

The temptation of touching and possessing this sensuous fabric would create the world’s first global market and open up the trade routes from China to Central Asia, Arabia, and Byzantium all the way to Rome!

This was the Silk Road. The world’s first international trade route that stretched 4,000 miles from end to end. Trade on the Silk Road was a significant factor in the development of the great civilizations of China, India, Egypt, Persia, Arabia, and Rome, and in several respects helped lay the foundations for the modern world. Although the term the Silk Road implies a continuous journey, very few who travelled the route traversed it from end to end. Cargo caravans would traverse a distance and then be sold to another middle man who would take it to the next leg. This ensured the secrecy of the origin of silk- a zealously guarded monopoly of the Chinese. So coveted was this fabric by the wealthy lords and ladies of Rome, that pound of silk sold at a price equivalent to that of six healthy slaves!

Temptation of touch, and the sensation of silk forged global trade in ancient times.

They touched the fabric, and therefore they succumbed to its temptation!





Mr. Vinit Kumar, Chairman & Managing Director

Mr. Kumar represents the promoter group. He has over 20 years

experience working with Reliance Industries Ltd., Lummus

Crest B.V., Netherlands, Maharashtra Apex Corp. Ltd., Deki

Electronics Ltd. and Rohem Instruments Pvt. Ltd. He holds a B.E.

in Electronics and Communication from Manipal Institute of

Technology, and an MBA from University of Notre Dame, USA.

He has also attended a course in Corporate Strategy Analysis

from Notre, London.

Dr. (Ms.) Kala Pant, Non-executive Director

Dr. (Ms.) Pant has vast experience in the banking industry and

has been a Director/Consultant/Advisor to a number of Banks

such as IDBI, Dena Bank etc. She has carried out a number of

research projects in Banking, Shipping, Port and Infrastructure

and has published 15+ papers in domestic journals. She has

also presented papers at many seminars. She holds a B.Sc. and

has done her PG Doctoral Research in the field of Banking and

Transport.

Ms. Elizabeth Harrington, Non-executive Director

Ms. Harrington has over 24 years experience working in Asia as a

Director, Senior Exec, Entrepreneur and Management Consultant

in various global consumer products, retail, healthcare, and

industrial product industries. She is on the board of Chicago

Mercantile Exchange and is a partner in PWC. She is the CEO of

Herrington Global and has published several articles and has had

several talks on China/Asia and Global business strategy. She did

her A.B at Cornell University; Magna Cum Laude and Phi Beta

Kappa.

Mr. E. David Ellington, Non-executive Director

Mr. Ellington has vast experience in the field of fund management

with expertise in equity allocation, governance and Private Equity

& Venture Capital. He runs his own law firm in Beverly Hills

specialising in international, entertainment and new technology

law. He is also a Dotcom Entrepreneur. He holds an M.A. from

Harvard University and a BA, MA JD Law – Ran.

Mr. R.V. Joshi, Non-executive Director

Mr. Joshi has over 40 years experience in the field of Banking,

Finance and Capital Markets, including Security Trading. He has

held the position of a Managing Director at BOI Finance Ltd.,

and Securities Trading Corporation of India Ltd. He has travelled

extensively and has participated in Seminars and Conferences

both in India and overseas. He holds an M. A. in Economics.

Mr. G. Ramchandran, Non-executive Director

Mr. Ramachandran has vast experience in the financial service

sector and capital market activities. He has held various positions

as Managing/Executive Director in leading industrial/finance

companies in India. He was the VP & CFO at Reliance Capital,

Times Guaranty, Mentor Capitalist and the Executive VP at

Citicorp, JM Morgan Stanley and Ranbaxy. He is a B.Sc. graduate

and a Chartered Accountant.

Ms. B. Goswami, Non-executive Director

Ms. Goswami is a well known Media artist, actress, model

and Compeer. She has 4 years of experience in General

Administration and Management. She holds a BA.

PROFILE OFTHE BOARd OF dIRECTORS

026 Ann

ual R

epor

t 200

8-09





OuR SOCIAL InITIATIVES

TFL has always nursed a keen desire to be a contributor to the nation’s rural growth. In order to make its presence felt in India’s endeavour of becoming a developed country at par with the best of nations, Temptation Foods strives to bring about meaningful changes to the lives of rural people in and around its various plants. TFL’s humble beginnings in the field of social responsibilities have kick started with a workable penta-fold strategy:-

ROSHnITFL’s dream project is designed to uplift a small percentage of our fellow citizens from the bowels of poverty. Since the farmer is the mainstay of our country, TFL wants to empower him by providing him a wholesome package.

Agriculture in India is still largely carried out with outmoded tools and farming methods. Our immediate agenda includes:

providing the farmer the means to purchase the best seeds spreading awareness of state-of-the-art machinery disseminating know-how with the latest inputs and giving farmers excellent training

Once the farmers reap in the reward of an excellent harvest, TFL will again assist them by providing at their doorstep, the very best marketing tools so that their ace harvest reaches the right place at the right time, thereby fetching them a bountiful price. This will not only elevate their standard of living, but also give them the necessary confidence to proceed with more such ambitious projects.

dISHAEmpowerment of Women is high on TFL’s radar. A dozen fully sanitized centres have been thrown open for ladies to earn money in their leisure time by managing certain stages in the processing of TFL products.

AALAPWe also dessiminate detailed technical know-how on converting agricultural waste into Vermicompost (Organic Waste), which is useful for Soil Enrichment. TFL not only educates them technically, but has also facilitates bank subsidies for this project. The Jejuri Municipal Corporation has also been roped in to provide the premises for this project. Temptation delivers agricultural waste from their plant to the premise and arranges for the Vermicompost produce to be sold in the nearby markets.

The AALAP project, at present, is benefitting 40 families who were below the poverty line. These are some of the baby steps that TFL is taking. More such humane projects are in the pipeline.

Providing Basic Education

Providing Marketingand R&d Support

to Farmers

EmpoweringWomen

Hygiene Awareness & Training

Enhance the Standard of Living

of Farmers

027Tem

ptat

ion

Food

s Li

mite

d





She floated down the river Nile on a barge with scented sails.Along the shoreline near the royal jetty, he stood waiting. She was the consort of his late mentor Julius Caesar and had left Rome on his death, to return to her Kingdom. She was Cleopatra, the Queen of Egypt and the empress of perfume, in the words of some. Her arrival was announced by a gust of perfume, just before her royal barge

docked alongside.

028 Ann

ual R

epor

t 200

8-09





029Tem

ptat

ion

Food

s Li

mite

d





Anthony, the veteran of innumerable wars, had no chance against this scented attack on his senses.

Temptation wafted its way into his heart, and now Cleopatra rightfully possessed it.

Fragrances captivate our minds, rejuvenate our senses, and bestow a feeling of freshness and energy, by their mere presence. Our sense of smell is also part of our memory as we associate smells with people.

Scents were first used by priests in prayers – as a supplication to the gods. It was rightly believed, that these refined scents – frankincense, myrrh, and sweet oils would tempt, and persuade the gods to shower favours on man.

Modern perfumes are far more complex as compared to the naturally occurring perfumes. They have three notes – the top note being the one you imbibe when the perfume is sprayed, the middle note is what remains when the top note evaporates and what lingers on is the base note that represents the core aroma of the perfume.

What hit and captivated Anthony while he awaited her arrival was the top note, in our way of thinking. His relationship with her flowered into intimacy, delivering the middle note. The lingering base note of their relationship was passionate love.

030 Ann

ual R

epor

t 200

8-09





So passionate was their love, that when the false news of her death reached him, he committed suicide.

The lingering romance of their relationship and its tragic end still reverberates in public memory.

He smelt her aroma, and therefore he succumbed to her temptation!

031Tem

ptat

ion

Food

s Li

mite

d





032 Ann

ual R

epor

t 200

8-09





ToThe Members of Temptation Foods Limited

Your Directors have pleasure in presenting the 18th Annual Report together with the audited statement of accounts for the year ended 31st March, 2009.

1. FInAnCIAL RESuLTS:(Rs. in Million)

Particulars 2008-09 2007-08

Profit Before Tax, Financial Expenses, Depreciation and Extraordinary Items 799.63 324.21

Less: Financial Charges 143.11 4.68

Depreciation 81.34 45.93

Profit for the year before Extraordinary Expenses and Taxes 575.18 273.60

Less: Extraordinary Item 25.19 -

Profit for the year after Extraordinary Expenses and before Taxes 549.99 273.60

Less : Provision for Taxes 23.04 35.54

Profit After Tax 526.95 238.06

Balance Brought Forward from Previous Year 172.18 (-)65.88

Less: Interim Divided and Dividend Distribution Tax thereon 17.63 -

Surplus carried to Balance Sheet 681.50 172.18

2. OPERATIOnS: During the year under review, your Company has shown

sterling performance inasmuch as the sales turnover has

increased from Rs. 328.05 crores in 2007-08 to Rs. 870.07

crores in 2008-09, representing an increase of about

165% and the profit after tax has gone up from Rs. 23.81

crores to Rs. 52.70 crores, representing an increase of

about 121%.

3. dIVIdEnd: During the year, your Directors declared and paid an

interim dividend of Rs. 0.60 paise per equity share of

Rs. 10 each, fully paid up i.e @ 6%. In order to conserve

the resources of your Company in view of the tight liquidity

position, your Directors do not recommend any further

dividend for the year under review and, hence, the interim

dividend paid may be deemed to be the final dividend for

the year under review.

4. BuSInESS PROSPECTS: During the year, your Company continued to show robust

growth in its business in all products categories, as the financial results reflect. All the product categories showed more than 100% growth in sales. The margins, however, were under a pressure.

Though the food sector, especially the product categories in which your Company operates, and the business of your Company is largely unaffected by the current economic turmoil and downturn trend all over the world, the operating environment has become difficult and is expected to continue to remain so till the situation improves.

The trend in the growth in business across all the product categories is expected to remain good in the running year, though the margins would remain tight. The endevour is to achieve a change in the product mix by increasing the proportion of the higher value added products and the branded products.

All the product categories showed more than

100%growth in sales

033Tem

ptat

ion

Food

s Li

mite

d





The operations of your Company have been discussed in

details in the Management Discussion and Analysis Report,

which is separately issued under the Corporate Governance

norms prescribed under the Listing Agreement with the

Bombay Stock Exchange.

5. ISSuE OF OPTIOnALLY COnVERTIBLE BOndS/FCCBS/EQuITY SHARES:

Your Company had taken your approval for issue of Fully/

Partly Convertible/Non-convertible Bonds, Equity Shares,

Preference Shares and/or any other financial instrument in

India or overseas through a QIP/GDR/ADR, etc issue for an

amount up to UD$ 200 Million.

Your Company had initiated the process of issue of

Optionally Convertible Bonds/Equity shares for an amount

up to Rs. 800 crores to Qualified Institutional Buyers. The

terms of issue of the Bonds were finalised and necessary

legal opinions were taken. Bank guarantee up to sixty

percent of the face value was arranged through one of

the leading banks in India to make the issue marketable

and attractive to the potential investors. The Placement

Document for the issue was approved by the Bombay Stock

Exchange.

However, due to the drastic deterioration in the financial

markets the world over, especially in the second half

of 2008, the issue could not be proceeded with as the

potential investors suspended all new investments and

thereby the long term investments to fund acquisitions

failed.

It is hoped that the situation would improve in the coming

months and the investors would return to the market

and your Company would be successful in raising the

aforementioned amount to fructify its acquisitions.

Your Company has invested in the shares of Kohinoor Foods Limited as a long term investment. The peak holding by your Company during the year was of 3,634,148 shares, representing

13.47% of the then share capital of the Kohinoor Foods Limited.

034 Ann

ual R

epor

t 200

8-09





6. ISSuE OF WARRAnTS On PREFEREnTIAL BASIS:

During the year, your Company has allotted 7,000,000

warrants to NRI Tax Services.com Private Limited, 150,000

warrants to the six independent and non-executive

Directors and 150,000 warrants to four of its business

associates, on preferential basis. Each warrant shall entitle

the holder thereof to apply for one fully paid up equity

share of your Company within 18 months of the allotment

of the warrant. The issue price of Rs. 200/- per warrant

and the conversion price of Rs. 200/- per share are in

compliance with the applicable SEBI guidelines.

7. BORROWInGS: During the year, your Company has been sanctioned

funded and non-funded working capital limits/term loans

over Rs. 200 crores by some banks/financial institutions

against the security of the movable and immovable assets

of the Company and the corporate guarantee from the

promoter Company. The limits have been draw-down

depending upon the requirements of your Company.

Your Company has also taken loans from certain Non

Banking Finance Companies and share brokers for part

funding of the investment in the shares of Kohinoor Foods

Limited, against, inter alia, the security of the shares of

Kohinoor Foods Limited and from some corporates for

meeting working capital requirements.

8. InVESTMEnT In THE SHARES OF KOHInOOR FOOdS LIMITEd:

Your Company has invested in the shares of Kohinoor

Foods Limited as a long term investment. The peak holding

by your Company during the year was of 36,34,148 shares,

representing 13.47 % of the then share capital of the

Kohinoor Foods Limited.

Your Company has made the requisite disclosures required

to be made under the regulations under Securities &

Exchange Board of India Act and has complied with all

other statutory / regulatory requirements in respect of

the acquisition of the shares. As mentioned above, your

Company has taken loans from some Non Banking Finance

Companies and some share brokers for part funding the

investment, against, inter alia, the security of the shares of Kohinoor Foods Limited.

On a petition filed by Kohinoor Foods Limited under section 111A of the Companies Act, 1956, before the Company Law Board alleging violation by your Company of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, along with forty five other individuals/corporates, all of who were alleged by Kohinoor Foods Limited to be Persons Acting in Concert in acquiring shares of Kohinoor Foods Limited, the Company Law Board had stayed the voting rights of your Company and the other forty five individual/corporates. However, pursuant to proceedings before the Company Law Board, the Hon’ble Board was subsequently pleased to vacate the stay of the voting rights and also stayed, till further orders, the holding of the annual general meetings and other shareholder meetings by Kohinoor Foods Limited. The Delhi High Court, on appeal by Kohinoor Foods Limited against the order of the Hon’ble Board, confirmed the order of the Hon’ble Board. Your Directors state that your Company has not violated the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, and any other regulation/law in acquiring the shares of Kohinoor Foods Limited and are confident that the proceedings before the Hon’ble Board would end in favour of your Company.

Your Company has filed a petition before the Company Law Board under sections 397 and 398 of the Companies Act, 1956, against Kohinoor Foods Limited on the grounds of oppression of minority shareholders and mismanagement of the affairs of Kohinoor Foods Limited. The petition is pending before the Hon’ble Board.

9 EMPLOYEES’ STOCK OPTIOnS: During the year under review, your Company has issued

256,600 options to the employees of your Company under the Employees’ Stock Option Scheme, 2008. The disclosures prescribed under the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are annexed hereto.

10. FIXEd dEPOSITS: Your Company has not accepted any fixed deposits

from public during the year under review. There are no outstanding deposits, which have remained unpaid.

DuRING THE YEAR uNDER REVIEW, YouR CoMPANY HAS ISSuED 256,600 oPTIoNS To THE EMPLoYEES uNDER THE EMPLoYEES’ SToCK oPTIoN SCHEME, 2008

035Tem

ptat

ion

Food

s Li

mite

d





11. TEMPTATIOn FOOdS InTERnATIOnAL LIMITEd:

Your Company has incorporated a Company by the name

of Temptation Foods International Limited (“TFIL”), limited

by shares, in the British Virgin Islands of which it will hold

100% of the equity share capital as and when TFIL issues

its shares. As on 31st March, 2009, TFIL has not issued any

shares. Mr. Vinit Kumar, Chairman and Managing Director

and Mr. E. David Ellington, Director, are Directors of TFIL.

TFIL is intended to be used as a special purpose vehicle for

acquisitions of business overseas and/or for raising of funds

overseas.

As TFIL has not issued any capital and has not commenced

any business, the documents and the statements referred

to in section 212 of the Companies Act, 1956, are not

attached to the Balance Sheet as on 31st March, 2009.

12. dIRECTORS’ RESPOnSIBILITY STATEMEnT:

Pursuant to the provisions of Section 217(2AA) of the

Companies Act, 1956, the Directors hereby state:

a) That in the preparation of the Annual Accounts for

the year ended 31st March, 2009, the applicable

Accounting Standards have been followed;

b) That the Directors have selected such accounting

policies and applied them consistently and made

judgments and estimates that are reasonable and

prudent so as to give a true and fair view of the state of

affairs of your Company at the end of the financial year

and of the profit of your Company for the year;

c) That the Directors have taken proper and sufficient

care for the maintenance of adequate accounting

records in accordance with the provisions of this Act

for safeguarding the assets of your Company and for

preventing and detecting fraud and other irregularities;

and

d) That the Directors have prepared the Annual Accounts

on a going concern basis.

13. dIRECTORS: Ms. Bhairavi Goswami and Dr. (Ms.) Kala Pant retire by

rotation at the forthcoming Annual General Meeting, and

being eligible, offer themselves for re-appointment.

14. CORPORATE GOVERnAnCE: Pursuant to Clause 49 of the Listing Agreement, the

following are annexed to this report:

a) a Report on the Corporate Governance and a

Certificate from the Auditors of your Company

regarding compliance of the conditions of Corporate

Governance; and

b) Management Discussion and Analysis Report.

Mr. Vinit Kumar, Chairman and Managing Director,

declares that affirmations have been obtained from the

Directors and the senior management of your Company

as regards compliance with the Code of Conduct norms

prescribed by the Securities and Exchange Board of

India.

15. AddITIOnAL InFORMATIOn PuRSuAnT TO SECTIOn 217:

a) Information as per Section 217 (2A) of the Companies

Act, 1956, read with the Companies (Particulars of

Employees) Rules, 1975 is enclosed herewith by way of

an Annexure.

b) Additional information pursuant to Section 217(1)(e)

of the Companies Act, 1956, read with Companies

(Disclosure of Particulars) Rules, 1988 is enclosed

herewith by way of an Annexure.

16. AudITORS: M/s. Sharp and Tannan hold the office as Auditors of your

Company till the conclusion of the forthcoming Annual

General Meeting and have expressed their willingness to

be reappointed. Their reappointment, if made, would be

within the limits specified under section 224(1-B) of the

Companies Act, 1956. Members are requested to reappoint

them and fix their remuneration.

17. ACKnOWLEdGEMEnT: Your Directors take this opportunity to place on record their

appreciation to the contribution made by the employees to

the working of the Company.

Yours Directors also express gratitude to the customers,

suppliers, shareholders, banks, financiers and investors

for the confidence reposed in your Company and for their

continued co-operation during the year under Report.

By Order of the Board of Directors

Place : Mumbai Vinit Kumar

Date : 27th April, 2009 Chairman & Managing Director 036 Ann

ual R

epor

t 200

8-09





CoMPANY HAS INCoRPoRATED A CoMPANY BY THE NAME oF TEMPTATIoN FooDS INTERNATIoNAL LIMITED (“TFIL”), LIMITED BY SHARES, IN THE BRITISH VIRGIN ISLANDS oF WHICH IT WILL HoLD 100% oF THE EquITY SHARE CAPITAL AS AND WHEN TFIL ISSuES ITS SHARES

037Tem

ptat

ion

Food

s Li

mite

d





Disclosures prescribed under the SEBI (Employee Stock option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999:

a Options granted : 256,600

b Exercise price : Rs. 150/-

c Options vested : Nil

d Options exercised : Nil

e Total number of shares arising on exercise of options : Nil

f Options lapsed : Nil

g Variations in terms of options : None

h Money realised on exercise of options : Nil

i Total number of options in force : 256,600j Options granted to senior management personnel : Name and Designation Number

of options(i) Mr. Vipin Chandok, President

– Mergers and Acquisitions & New Initiatives

10,000

(ii) Mr. Nimish Thakore, President – Corporate Affairs and Company Secretary

15,000

(iii) Mr. Shyam Mahale – President – Corporate Planning

10,000

(iv) Mr. Sridhar Sarathy – Business Head – Everfresh

30,000

k Any other employee who during the year has been granted options amounting to 5% or more of the options issued during the year

:Name and Designation

Number of options

Mr Swapnil Shaha - VP - Domestic Sales & Dist.

15,000

l Employees who have been granted options equal to or exceeding 1% or more of the issued capital of the Company at the time of the grant

: Nil

m Diluted earnings per share considering the issue of shares on exercise of options :

Rs. 20.98

n Proforma Adjusted Net Income and Earnings per Share :Net Income after Taxes and before Extraordinary Expenses – as Reported

Rs. Mn. 552.15

Add: Intrinsic Value Compensation Cost

Rs. Mn. 10.39

Less: Fair Value Compensation Cost Rs. Mn. 14.89

Differential Employee Compensation Cost

Rs. Mn. 4.50

Adjusted Pro forma Net Income before Extraordinary Expenses

Rs. Mn. 547.65

Net Income after Taxes and after Extraordinary Expenses – as Reported

Rs. Mn. 526.96

Add: Intrinsic Value Compensation Cost

Rs. Mn. 10.39

Less: Fair Value Compensation Cost Rs. Mn. 14.89

Differential Employee Compensation Cost

Rs. Mn. 4.50

Adjusted Pro forma Net Income after Extraordinary Expenses

Rs. Mn. 522.45038 A

nnua

l Rep

ort 2

008-

09





Basic Earnings Per Share after Taxes and before Extraordinary Expenses:

- As Reported Rs. 21.96

- Adjusted Pro- forma Rs. 21.78

Basic Earnings Per Share after Taxes and Extraordinary Expenses:



Diluted Earnings Per Share after Taxes and before Extraordinary Expenses:



Diluted Earnings Per Share after Taxes and Extraordinary Expenses:


- Adjusted Pro- forma Rs. 20.78o Weighted average exercise price of Options granted during the

year whose::

(a) Exercise price equals market price Not applicable

(b) Exercise Price is greater than market price Not applicable

(c) Exercise Price is less than the market price Rs. 150/-

Weighted average fair value of Options granted during the year whose:

(a) Exercise price equals market price Not applicable

(b) Exercise Price is greater than market price Not applicable

(c) Exercise Price is less than the market price Rs. 200.83P Description of the Method and the significant assumptions used

to estimate the fair value of the options:: The fair value of the options granted has been

estimated using the Black-Scholes option pricing model. Each tranche of the vesting has been considered as a separate grant for the purpose of valuation. The assumptions used in the estimation of the same have been detailed below:

Weighted average values of the options granted during the year:

i. Stock Price i. Rs. 289.65

ii. Volatility ii. 51.81%

iii Risk free rate iii. 9.14%

iv. Exercise Price iv. Rs. 150

v. Time to maturity v. 4.20 years

vi. Dividend yield vi. 0.00

039Tem

ptat

ion

Food

s Li

mite

d





Particulars of employees as per section 217(2a) of the Companies Act, 1956 read with the Companies (particulars of employees) Rules, 1975 and forming part of the Directors’ Report for the financial year ended 31st March, 2009Name & Age (Years) Designation/

Nature of Duties

Nature ofEmployment

Remuneration(Rupees)

qualifications Experience(Years)

Date ofCommencementof Employment

Last Employment& Designation

A. EMPLOYED FOR THROUGHOUT THE FINANCIAL YEAR AND IN RECEIPT OF REMUNERATION AGGREGATING RS. 24,00,000/- OR MORE PER ANNUM

1. Mr. Vinit Kumar (44)

Chairman & ManagingDirector

Contractual Rs. 4,867,786/- BE (Elct. & Comm.), MBA

19 26-10-2007 Reliance Industries Ltd

2. Mr. Vipin Chandok(50)

President – M&A & New Initiatives

Otherwise Rs. 3,226,077/- F.C.A., A.C.S.,LLB(G), B.Com (Hons)

28 01-04-2008 Orix Auto Finance(India) Ltd. (Chief Financial Officer & Company Secretary)

B. EMPLOYED FOR A PART OF THE FINANCIAL YEAR AND IN RECEIPT OF REMUNERATION AGGREGATING RS. 2,00,000/- OR MORE PER MONTH1. Mr. Raj Halve

(45)President - Brands

Otherwise Rs. 2,025,003/- MMS & B.Com. 23 01-08-2008 BG Broadband India(Chief Marketing &Strategy Officer)

Information under section 217(1)(e) of the Companies Act, 1956 read with the Companies (disclosure of the particulars in the report of the Board of Directors) Rules, 1988 and forming part of the Directors’ Report for the year ended 31st March, 2009.1 POWER AND FUEL CONSUMPTION

Sr. No.

ParticularsYear ended

31st March, 2009Year ended

31st March, 2008

1. Electricity:

a) Purchased units 7,999,361 2,067,507

Total Amount (Rs.) 46,911,070 10,177,013

Rate/Unit (Rs.) 5.86 4.92

b) Own Generation Through Diesel Generators:

Units 803,212 343,595

Units per Litre of Diesel Oil Cost/Unit 8.83 8.90

2. Coal Nil Nil

3. Light Diesel oil:

Quantity (Litres) 1,743,771 1,173,969

Total Amount (Rs.) 72,272,137 40,176,560

Average Rate (Rs.) 41.45 34.22

4. other/Internal Generation Nil Nil

2 CONSUMPTION PER UNIT OF PRODUCTION (MT)

Electricity (units) 340.66 243.62

Diesel oil (Litres) 74.26 28.79

3 TECHNOLOGY ABSORPTION, ADAPTION AND INNOVATON

NIL

4 FOREIGN EXCHANGFE EARNINGS AND OUTGO

Particulars relating to foreign exchange earnings and outgo appear in Note No. 20 (g) and (f) respectively of Schedule Q, being

Notes forming part of the Accounts.

040 Ann

ual R

epor

t 200

8-09





041Tem

ptat

ion

Food

s Li

mite

d





042 Ann

ual R

epor

t 200

8-09





At the premiere of his Ninth Symphony, he had to be turned round to see the tumultuous applause of the audience. Slowly, tears trickled down his face,

since he could hear nothing.

043Tem

ptat

ion

Food

s Li

mite

d





044 Ann

ual R

epor

t 200

8-09





Beethoven, the world’s greatest composer of classical western music was deaf. Perhaps it is a testimony to his acute sense of loss (or is it loss of sense?), that the symphonies he wrote when he became deaf still give untold pleasure to the millions who listen to them.

Hearing is the most under-rated of our senses. While in listening to music, it is elevated, in normal life, we take it for granted. Beethoven’s loss was particularly tragic as he played music for people to hear, and when he himself could not hear, discrimination became difficult. All of Beethoven’s musical compositions were “written” and it is widely believed, that Beethoven, could “see” his music, or visualise it. He did use ingenious ways to “listen” to his music. Beethoven used a special rod attached to the soundboard on a piano that he would bite—the vibrations would then transfer from the piano to his jaw and increase his “perception” of the sound.

Hearing is part of speaking. The capability of one without the other is meaningless. It is Temptation betrayed by gratification.

Hearing elevates the senses, enlivens the mood and helps us connect to the world around us. We hear people, animals, birds, and we can decipher their feelings even without understanding their language. Hearing music is one of the most abstract experiences where mere melodies, beats and incantations communicate sensations.

Hearing is the very essence of life. It is when you stop hearing the rhythmic beat of the heart that you know life has ended, the orchestration has stopped. In some ways, may be that was the music that Beethovan continued to hear even after he became deaf.

He heard the divine rhythm that required no ear and therefore he succumbed to the temptation!

045Tem

ptat

ion

Food

s Li

mite

d





046 Ann

ual R

epor

t 200

8-09





InduSTRY STRuCTuRE And dEVELOPMEnTSEvolution of Global Food Demand

India is at an early stage in the evolution of food consumption patterns. Going forward, increase in demand is expected for

prepared meals, snacks and convenience foods. At the next stage, the demand for functional, organic and diet foods will

increase substantially. In future, the food consumption pattern of the burgeoning middle class is expected to change, thereby

significantly diversifying the mix of products being bought by the consumers.

processing industry ranks 5th in size. The food processing

industry accounts for 13% of the country’s exports and 6% of

total industrial investment. Food processing industry in India

has a dominant position as it is twice the size of the 2nd largest

sector (banking) and much larger than all the others. The sector

is estimated to grow at a steady rate into the future and reach

Rs. 13.5 trillion in terms of total business by 2014-15. During

this period, there is expected to be a clear shift in the product

mix from primary processed food to value-added food. It is

estimated that the level of processing and value addition will

improve by 2014-15. For instance in Foods and Vegetables

sector, it is estimated that the processing will improve from

1.4% in 2003-04 to 15% in 2014-15 with a 5% value addition.

Currently the total business in the processed food segment

accounts for Rs. 4,600 billion, making it the single largest

industry in India. Yet, the industry is at a basic level of

processing with miniscule value addition.

The Indian food market is estimated at over US$ 182 billion,

and accounts for about two thirds of the total Indian retail

market. Further, according to consultancy firm McKinsey & Co,

the retail food sector in India is likely to grow from around US$

70 billion in 2008 to US$ 150 billion by 2025, accounting for a

large chunk of the world food industry, which would grow from

US$ 175 billion to US$ 400 billion by 2025.

FOOd PROCESSInG InduSTRY Globally, the processed food industry is estimated to clock

business of around US$ 3.6 trillion. Only 6% of the processed

foods are traded across borders compared to 16% of major bulk

agricultural commodities. U.S.A., EU and Japan accounts for

over 60% of total retail processed food sales.

In processed foods, India’s share accounts for only 1.3% of

global volumes of F&V (2.3% in terms of value) and 15% of

milk produced. Despite the low percentage volumes, the food

Diet/functional/organic foods

North America, Japan, Western Eurpoe,

Australia

Convenience foods Eastern Eurpoe

Snacks/prepared meals

India, China Latin America

Carbohydrate staples

Africa (Sub-Saharan)

Surviving

Source : Rabobank Research

Mass Market Convenience Food Service Snacking

Quality Hygiene High Technology

Dairy, meat, egg, sugar, processed

mass market

047Tem

ptat

ion

Food

s Li

mite

d





Poor infrastructure for storage, marketing and distribution of food products are some of the key reasons for low level of processing. These constraints are serious because, they contribute to the post harvest loss of 25% to 40% of the country’s agricultural produce.

Primary processing of agricultural produce stands at around 40% in China, 30% in Thailand, 70% in Brazil and 80% in Malaysia. As compared to these countries, in India it accounts for a meagre 20% with massive wastage. India is the second largest producer of fruits (53 MMT) and vegetables (126 MMT). The installed capacity for processing of fruits and vegetables has gone up from 1.108 MMT in 1993 to 2.474 MMT in 2007. However, the industry is still in nascent stage with secondary processing level of around 2.20% of total fruits and vegetables produced, which is significantly lower as compared to U.S.A. (80%), Australia (25%), and Germany (33%). India’s share in the world trade of processed fruits and vegetables is still less than 1%. The government expects the processing in this sector to grow to 25% of total produce by 2025.

FMCG InduSTRYIn the midst of an economic slowdown, India is the victim of apprehensions regarding decline in consumption expenditure. In reality, while metros are witnessing 6-7% volume growth, other tier 1 cities are registering growth rates at 10-12%, and rural markets are growing at 20%+. The reducing relevance of FMCG spend to the overall consumption spend (just 7-8% of the wallet share) insulates FMCG spends from any pressure of spending cuts. The shift to premium products and brands in personal care and rapidly growing packaged foods market is driving value growth. On the other hand, with 610 million

population residing in rural India, these markets are driving volume growth as consumers shift their purchase preference from unorganised and homemade to organised sectors.

FMCG spend in India is merely 7%-8% of the total consumer

spend and less than 5% of the overall income. Expenditure on

food is the largest among all the FMCG segments as depicted in

the pie-chart below

Source: Ministry of Food Processing; Annual Report 2006-07; IDBI Capital Market Services

% P

rocessig

level

3540

35

30

25

20

15

10

5

0

20

26

2

6

Fruits & Vegetables

MilkDaiy

Meat Poultry Products

Marine Products

Processing Level in Indian Food-Processing industry

Source: Ministry of Food Processing; Annual Report 2006-07; IDBI Capital Market Services

Processed Foods, 4600, 37%

Banking, 2300, 19%

IT/ITES, 1790, 15%

Pharma, 1125, 9%

Automobile, 1040, 9%

Telecom, 850, 7%

Construction, 460, 4%

Processed Foods Banking IT/ITES PharmaAutomobile Telecom Construction

Market Size of Industries in India (Rs. Billion, %)

Expenditure mix in FMCG sector

Source: Business World Marketing Whitebook

Food Home Improvement Rent, Fuel & Power

Health CareLeisure & Entertainment

Transportation & CommunicationOthers Grocery

Foods 39%

HomeImprovement 4%

Rent, Fuel & Power 13%

Leisure &Entertainment 4%

Health Care 8%

Transportation & Communication 20%

Others 8%

Grocery 4%

048 Ann

ual R

epor

t 200

8-09





BuSInESS OVERVIEWCompany Profile

TFL, with its Individual Quick Freeze Technology, is at the

forefront of the Indian food processing industry. In operation

since 1991, TFL now is one of the largest organised sector,

publicly listed companies in the industry. Its impressive

product offerings include frozen Fruits & Vegetables, FMCG

food products like Conserves, Jams, Marmalade, Sauces,

Mayonnaise, Salad dressings, Honey and Marine Products. TFL

plans to use the acquisition route to enter the markets for edible

oil, rice and ready-to-eat segments.

COMPETITIVE STREnGTHSLocational Advantages

Temptation Foods Ltd. currently uses 9 facilities across India

to produce over 50 different types of products. Out of these

9 facilities, 5 are outsourced, 1 is leased and 2 are owned.

TFL sources its raw materials from across the country with the

majority procured from North and West regions. The plants

are located near the sources of raw materials. Recently, a KGK

plant was shifted to Nira, near existing plant at Jejuri to maintain

operational synergies. Being closer to the source of raw material

is the biggest commercial benefit that TFL passes on to its

consumers. The locations of the plants and the sources of supply

are shown below.

MARInE PROduCTSMarine business is a high volume and low margin business with average margins of around 5-6%. India is the third largest fish producer

in the world and second largest inland fish producer. Fish production has increased from 0.75 MMT in 1950-51 to 6.86 MMT in 2006-

07. Despite this, India exports only around 8% of its production. In 2005-06, its contribution to total GDP was around 1%. India’s

substantial fishery resources are underutilised, despite the huge potential to increase the output from this sector. Processing of fish into

canned and frozen forms is carried out entirely for export purpose.

Production and export of marine products

Source: Ministry of Agriculture of India, IDBI Capital Market Services

Producton Export Export as a Percentage of production

FY51

FY61

FY71

FY81

FY91

FY01

FY02

FY03

FY04

FY05

FY06

FY07

10%

8%

6%

4%

2%

0%

8

6

4

2

0

Vol

ume

(AM

T)

049Tem

ptat

ion

Food

s Li

mite

d





Brand Strategy

TFL offers branded food products across all of its product categories. It aims to extend its reach across all food categories and thus

acquire 15%-20% market share of Indian kitchen. As a part of its initiative to integrate with international markets, TFL follows a two-

pronged strategy –

1. Bringing top-quality International brands to the emerging Indian markets

2. Successfully marketing the Indian ethnic brands abroad

TFL has been investing in, and consolidating its brands. During the year, the Company took steps towards maturating its brands –

Everfresh and Karen Anand by adding to the product base while simultaneously increasing its distribution networks.

TFL’s RAW MATERIAL SUPPLYING REGIONS

Uttranchal

Uttar Pradesh

Maharashtra

Andhara Pradesh

Fruits & Vegetables

Marine Products

Ready-to-eat

Punjab

Delhi

TFL PLANT LOCATIONS

Jallandhar (2 Plants)

Vishakhapatnam

Owned Plants

KarnalRudrapur (3 Plants)

Jejuri

Sonipat

Outsourced Plants

Leased Plants

Price Points

Product

Reach

Rediline category

(play in broader category)

Extend existing brands in new categories

Launch India specific brands

Launch mass market brands

Low Value SKUs

Aggresively penetrate markets

Increase institutional sales

Out of home market050 A

nnua

l Rep

ort 2

008-

09





Acquisition Strategy

TFL has been on an acquisition spree. Inorganic growth has

been the Company’s mainstay in terms of strategy. It aims at

further acquisitions in order to increase its market share, widen

its product base, and create value for its shareholders. At the

same time, it wishes to ensure that it acquires and owns the

brand rather than merely producing or distributing products

belonging to brands owned by others. It proposes acquisitions in

India as well as abroad.

Supply Chain

TFL tries to bridge the gap between the manufacturing of

product to the consumer off take by continuously trying to

improve and channelise effective supply chain management

with faster distribution network. Also, stringent quality norms

are followed for procurement and processing of fresh fruits

and vegetables and then converting them into frozen fruits and

vegetables.

Procurement is done during the season and stored and sold

during non season periods. The products are transported by

refrigerated vans at (-) 180C and minimal handling is ensured

till the depots so that the temperature of the product remains

intact. The Cold Chain (owned/leased) is made of state-of-art

technology to ensure that proper temperatures and quality is

maintained throughout the year. TFL’s supply chain is very

robust which ensures that best quality product reaches to the

consumers through its retail outlets and modern trade formats.

Performance Review

During the year 2008-09, the Company registered 164.44%

increase in the total income from Rs. 329.48 crores in 2007-

08 to Rs. 871.98 crores. The Company’s EBIDTA increased by

147.86% from Rs. 32.26 crores in 2007-08 to Rs. 79.96 crores in

2008-09. The Company’s PAT also increased by 121.34% from

Rs. 23.81 crores in 2007-08 to Rs. 52.70 crores in 2008-09.

Export Performance

During the year 2008-09, the Company made exports worth

Rs. 38.46 crores as against Rs. 30.51 crores in 2007-08, thus

registering an increase of 26.06%. Exports thus constitute 4.42%

of the total revenues of the Company in FY 09.

Present Financial Status

Net Worth Rs. 255.05 crores

Current Ratio 2.92

Debt-Equity Ratio 0.43

Stock Turnover Ratio 18.69 Times

Average Receivables Collection Period 69 days

051Tem

ptat

ion

Food

s Li

mite

d





Strength

Entrepreneur led, professionally managed and experienced

management team

Strong Brand equity with wide variety of products

Locational advantage, with close proximity to raw material

sources, export points and domestic consumption centres

Wide geographic coverage

Large domestic and international customer base

Strategic relationships with suppliers, customers and supply

chain vendors

Adaptation to new and improved systems and processes

opportunities

Offering other value-added products under existing strong

brands such as Everfresh & Karen Anand

Growth in the Indian retail space with a spurt in the

organised retail play by players like Big Bazaar, Reliance

Fresh, Six Ten etc. has increased demand for packaged foods

across income groups

Full integration of acquired companies/businesses will unlock

value in terms of economies of scale and group synergies

Favourable Government policies

SWOT AnALYSIS

Weakness

Exports business exposes the Company to exchange risk

Over dependence on marine business

Highly capital intensive business

Threats

Entry of major players into domestic market eg. Penguin

Inability to manage properly the high growth volumes as well

as the acquisitions

High volatility in prices of commodities which are raw

materials for the Company

Food safety and product liability issues because Company’s

products are sold to various global chains

Domestic private label driving down margins and prices

052 Ann

ual R

epor

t 200

8-09





Internal Control

The Company has adequate internal control procedures

commensurate with the size and nature of its business. These

business control procedures ensure efficient use and protection

of the resources and also compliance with the policies,

procedures and statutory requirements. The internal control

systems provide for well documented guidelines, authorisation

and approval procedures. During the year, the Company has set

up an independent Internal Audit Department, which reports

directly to the Managing Director. The Company also carries out

internal audit through an external agency. The prime objective

of such audit is to test the adequacy and effectiveness of all

internal controls laid down by the management and to suggest

improvements.

Human Resources

The good performance of the Company requires a disciplined,

focused work culture and demands an ongoing effort to sustain

an engaged workforce. During the year, significant resources

and efforts were devoted to people engagement initiatives

to support a performance driven culture and to enhance the

passion for a higher level of productivity. To empower talent

and prepare its people with necessary skills, the Company

continued to provide employees with appropriate access to

training and corresponding development plans including

international exposures, where feasible.

The Company recruited a large number of employees at all

levels during the year. The Company plans to continue to

institute internal climate surveys to fine tune the HR practices.

The Company works with a Key Responsibility Area based

review and recognition strategy that aligns efforts, while

rewarding results. An ESOP plan was instituted in 2008-09 and

256,600 options were issued to the employees of the Company.

The training needs of staff at various levels are periodically

assessed and training programmes are conducted using internal

resources and/or by engaging external trainers/facilities. The

Company employed a total of 256 employees as on 31st March,

2009 spread over all its plants and at offices.

outlook

India, with an arable land of 184 million hectares has an annual

production of 90 Million Metric Tone (MMT) of milk (highest in

the world), 179 MMT of fruits and vegetables (second largest),

204 MMT of food grains (third largest), and 6.3 MMT of fish

(third largest). Despite being one of the largest food producers,

India accounts for less than 1.5% of international food trade.

Domestic demand in the industry is expected to rise with

increasing per capita income, increased urbanisation, improved

standard of living, changing lifestyle of burgeoning middle class,

and increase in the percentage of women in the work force. It

is a well known fact that rising urbanisation increases and rising

per capita GDP within cities, provide companies with large

economies of agglomeration for any business activity.

Food production in India is expected to grow two-fold over the

next 10-years leaving immense scope for food processing sector.

Indian food processing industry is expected to grow at around

20% CAGR, becoming Rs. 15 trillion industry by 2015. Ministry

of Food Processing in its vision document 2015, has estimated

the size of food sector to triple, processing level of perishable

products to increase from 6% to 20% and India’s share in global

food trade to increase from 1.5% to 3%.

The Indian food industry is mainly unorganised with 75% units

belonging to unorganised players. It has been identified that by

2014-15 a total of Rs. 910 billion investment will be required

in the Indian food processing industry to meet the growing

demand for processed food. Research shows that the announced

investments by the Indian government through their various

departments and agencies would only be to the tune of approx.

Rs. 60 billion. This huge gap between Investment Required vs.

Investment proposed creates an opportunity for the companies

in the food processing domain for future growth.

Driving growth in the food processing sector holds the key to

changing the labour intensive practices in the Indian agriculture

sector. Inefficient marketing systems are already being targeted.

Policies are now promoting the participation of private

investors who would promote efficiency in food processing

and agriculture marketing systems. These are just the initial

stages of development and enhanced efficiencies by improving

productivity and investments, will be a source of power for the

food processing sector in the future. In other words, the two

sectors share a symbiotic relationship and changes to either will

impact the other.

In this backdrop, the Government of India has a vision, strategy and

action plan for the food processing sector. This strategy addresses

issues of taxation, organised retail, infrastructure development,

marketing interventions and regulations, strengthening of

institutions and issues of food safety and regulations. The Vision

2015 strategy released in 2003-04 envisages:

A three fold increase in the size of the processed food sector

to close to US$ 300 billion by 2015

Increasing level of processing of perishables from 6% to 20%

Value addition to increase from 20% to 35%

Increase share in global food trade from 1.5% to 3%

Increase the share of value added products in food

consumption from the current 16% to 50% 053Tem

ptat

ion

Food

s Li

mite

d





Estimated investment in the Food Processing sector during 11th Five-Year plan - Rs. crores

Government Initiatives

The Indian government approved several food parks with an

objective to transform the present supply driven farm sector

market into one that is market driven. This would help eliminate

intermediaries. Also, integrated cold chain facilities are planned

to be set up across the country so that there is no missing link

from farm to the retailer/consumer. The National Institute of

Food Technology, Entrepreneurship and Management (NIFTEM)

is proposed to be set up with an investment of Rs. 245 crores.

This institute will function as a knowledge centre for food

processing. The Government has come up with plans and

mechanisms for financing support, strengthening of institutes at

central and state level with improvement of R&D in the sector.

Various organisations such as Agricultural and Processed Food

Products Export Development Authority (APEDA), Ministry of

Food Processing, National Horticulture Board (NHB) and state

governments have launched schemes to incentivise investments

in the food processing sector. These schemes are designed for

setting up new processing facilities, creating backward linkages

with farmers, infrastructure development, etc.

Food processing industry has been given a 5% subsidy in

exports

Comprehensive Food Safety Bill has been formulated to

enforce quality control measures for the benefit the organised

sector

‘Bharat Nirman’ project aimed at improving rural

infrastructure, reducing wastages and removing inefficiencies

in the “farm to consumer” chain

GOI to grow marine exports to US$ 5 billion in 3 years

Source: Annual Report (2007-08) of Ministry of Food Processing Industries

I Scheme for Infrastructure Development 2,613.00Food ParkPackaging CentreModernised AbattoirsIntegrated Cold Chain facilitiesIrradiation facilitiesValue added centres

II Scheme for Technology Up-gradation/Establishment/Modernisation of Food Processing Industries 600.00

III Scheme for Quality Assurance, Codex standards and R&D 250.00Food safety and quality assurance mechanismStrengthening Codex cellContinuous R&DSetting up/upgradation of quality control laboratories

Promotional activities such as participation in exhibition/fairs/supporting seminars/workshops/studies and surveys

Generic advertisementPreparation of short films and publicity material for different events

IV Scheme for Human Resource Development 65.00Setting up of Food Processing Training Centres (FPTC)Imparting training to update skillsEntrepreneurship Development Programme (EDP)Facilitating Universities/Institutions for running degree/diploma courses

V Scheme for strengthening of institutions 325.00Setting up of NIFTEMStrengthening of PPRCStrengthening of State Nodal AgenciesSetting up of Wine Board and Meat and Poultry Processing BoardMeeting expenditure of pay and allowances for Plan postsInformation technology

VI Scheme for Upgradation of Quality of Street Foods 178.00Food StreetStreet Food

Total 4,031.00

054 Ann

ual R

epor

t 200

8-09





RISK REVIEW

1 ECoNoMIC DoWNTuRN The slowing global economy has impacted the Indian

economy as well. A slowdown in the economic growth

in India could cause the business of the Company

to suffer. The performance and the growth of the

Company’s business are necessarily dependent on the

overall health of the Indian economy.

Mitigation

The Company has a wide portfolio of products under

each of its brands. It is planning 4 more acquisitions to

widen its product base and extend its global reach.

4 DEPENDENCE oN SuPPLY CHAIN MANAGEMENT

The success of food processing business is dependent

on supply chain management as inefficiencies could

lead to unavailability of raw materials. It is critical to

identify vendors who shall provide quality products in

proper time. This criticality increases especially in case

of perishable commodities.

Mitigation

TFL has tried to keep optimum inventory at their

factories in order to control its working capital

requirements. Food items require efficient supply

chain management as this involves items which are

perishable or have limited shelf life. For some of

its products TFL also outsources the supply chain

management to third party sources.2 INCoRRECT DEMAND FoRECASTING Some of TFL’s products are seasonal. So TFL has to

buy raw materials in anticipation of demand for the

same. This requires accurate demand forecasting. Any

mismatch between forecast and actual demand could

lead to excess inventories.

Mitigation

In case of any excess inventory, some products are sold

either at a discount or are disposed off.

5 GEo PoLITICAL RISKS TFL’s ability to counter international competition for

all or specific products could be adversely affected if

any country or countries propagate their goods more

effectively than we can.

Mitigation

TFL is striving to diversify its products as well

as focusing on more than one market for its

products and keeps a close watch on any such

changes taking place.3 FoREx RISK TFL is exposed to foreign currency risk as some portion

of the revenue is derived from exports.

Mitigation

As a business policy, TFL strives to bill the exports

in Indian Rupees to avoid or reduce the exposure to

foreign currency risk.

055Tem

ptat

ion

Food

s Li

mite

d





056 Ann

ual R

epor

t 200

8-09





PREFACEYour Company endeavours to strengthen the Corporate Governance prevalent and practiced by the Company with the passage of time,

even going beyond what is required statutorily, treating the statutory requirements as the minimum requirement.

The objective is to be a well managed Corporate Governed Company working in the interest of its shareholders, investors and other

constituents.

A. MAndATORY REQuIREMEnTS: 1. Company’s Philosophy on Code of Governance:

Your Company is fully committed to the principles of transparency, integrity and accountability in all spheres of its operations

and has been practicing the principles of good corporate governance. In keeping with this commitment, your Company has

been upholding fair and ethical business and corporate practices and transparency in its dealings and continuously endeavours

to review, strengthen and upgrade its systems and processes so as to bring in transparency and efficiency in its various business

segments.

2. Board of Directors and Board Meetings:

The Board is headed by Mr. Vinit Kumar, who is the Chairman & Managing Director. The Board is composed of eminent

persons with considerable professional experience in diverse fields. With the exception of Mr. Vinit Kumar, who is non-

independent, all the other Directors are Independent and Non-Executive.

The details of the Board of Directors as on the date and the meetings attended by them are as under:-

Name of the Director

Category of Director-ship

No. of Board Meeting held during the year

during his/her tenure as Director and number of Board Meetings attended

Attendance at the

last AGM

No. of other

Director- ships as held

No. of Committees

of which Member

Remarks

Held AttendedMr. Vinit Kumar Non- Independent

& Executive Director

6 6 Yes 2 - -

Dr. (Ms.) Kala Pant

Independent& Non-Executive

6 6 Yes 3 7 -

Mr. R.V. Joshi Independent& Non-Executive

6 6 Yes 2 6 -

Mr. E. David Ellington

Independe nt& Non-Executive

6 1 No - - -

Mr. G. Ramachandran


6 5 Yes 13 3 -

Ms. Elizabeth Harrington


6 2 No 2 3 -

Ms. Bhairavi Goswami


6 5 Yes 1 3 -

During the year under review, 6 (Six Board Meetings were held, the dates being: 5th April, 2008, 12th May, 2008, 29th July, 2008, 9th September, 2008, 31st October, 2008, and 28th January, 2009.

057Tem

ptat

ion

Food

s Li

mite

d





3. Meetings of Committees of Directors:

(a) Audit Committee:

The Audit Committee of the Company was constituted and made functional w.e.f. 6th January, 2006. The Audit

Committee at present comprises of the following four non-executive directors:

i) Dr. (Ms.) Kala Pant, Chairperson

ii) Mr. G. Ramachandran

iii) Mr. R. V. Joshi

iv) Ms. Bhairavi Goswami

The role and terms of reference of the Audit Committee briefly include review of internal Audit Reports and the Statutory

Auditors’ Report on the financial statements, general interaction with the internal Auditors and statutory Auditors, selection

and establishment of accounting policies, review of financial statements, both quarterly and annual before submission to

the Board, review of Management discussion and analysis of financial condition and results of operations and review of

performance of statutory and internal auditors and adequacy of internal control systems and other matters specified under

Clause 49 of the Listing Agreement and Section 292A of the Companies Act, 1956.

The Audit Committee Meetings held during the year and attendance thereat is as below:

Date of the Meetings No. of Directors in the Committee Directors Present

5th April, 2008 4 4

29th July, 2008 4 4

9th September, 2008 4 3

31st October, 2008 4 3

28th January, 2009 4 4

(b) Remuneration/Compensation Committee:

The Remuneration/Compensation Committee was

constituted on 6th May, 2006.

The terms of reference of the Committee are:

i) To recommend to the Board the remuneration

package of Managing Director and other

working Directors.

ii) To recommend to the Board annual

increments and commission payable to the

working Directors, after reviewing their

performance and overall financial position of

the Company.

iii) To recommend to the Board Sitting Fees

payable to the Directors for attending the

Meetings of the Board of Directors and

Committees formed thereof.

iv) To recommend to the Board at appropriate

time the mode and means like payment of

Commission, of remunerating Non-Executive/

Non working Directors within the overall

ceiling of 1% of the Net Profits of the

Company as computed under the applicable

provisions of the Companies Act, 1956.

v) To recommend to the Board ESOS for the

Employees of the Company.

The Committee is composed of the following

Directors:

G. Ramachandran, Chairman

Dr. (Ms.) Kala Pant

E. David Ellington

The Remuneration/Compensation Committee

Meetings held during the year and attendance

thereat is as below:

Date of the Meeting

No. of Directors

in the Committee

Directors Present

29th July, 2008 3 3

28th January, 2009

3 2

058 Ann

ual R

epor

t 200

8-09





(c) Share Transfer & Investors’ Grievance Committee:

The Share Transfer & Investors’ Grievance Committee was constituted and made functional w.e.f. 6th January, 2006. The Committee comprises of the following 3 non Executive Directors:

i) Dr. (Ms.) Kala Pant, Chairperson ii) Mr. R.V. Joshi iii) Ms. Bhairavi Goswami

This Committee (i) approves and monitors transfers, transmission, splitting and consolidation of securities and issue of duplicate Certificates by the Company, (ii) looks into various issues relating to shareholders, including redressel of complaints from shareholders relating to transfer of shares, non-receipt of Balance Sheets, Dividends, etc. and (iii) carries out the functions envisaged under the Code of Conduct for Prevention of Insider Trading in terms of Regulation 12(1) of the SEBI (Prohibition of Insider Trading) Regulations, 1992.

The Share Transfer & Investors’ Grievances Committee Meetings held during the year and attendance thereat is as below:

Date of the Meeting

No. of Directors

in the Committee

Directors Present

5th April, 2008 3 3

12th May, 2008 3 3

29th July, 2008 3 3

31st October, 2008 3 3


(d) Corporate Governance Committee: The Corporate Governance Committee was

constituted on 6th May, 2006, to monitor the implementation of the Corporate Governance norms under Clause 49 of the Listing Agreement entered into with the Bombay Stock Exchange Ltd.

The following Directors are the members of the Committee:

(i) Mr. G. Ramachandran;

(ii) Mr. E. David Ellington; and

(iii) Mr. R. V. Joshi

Mr. G. Ramachandran is the Chairman of the Committee.

The Committee is to meet twice during the year.

The Meetings of the Committee held during the year and attendance thereat is as below:

Date of the Meeting

No. of Directors

in the Committee

Directors Present

29th July, 2008 3 3


Details of payments made to the Directors during the year, by way of (a) sitting fees for attending the meetings of the Board of Directors and of the Committees and (b) professional fees for services rendered to the Company and warrants allotted and held, are as below:

Director Sitting Fees for attending the Meetings of: (Rs.) Salary (Rs.) Number of

Warrants allotted

during the year and

held as on March 31,

2009

Board of Directors

Audit Committee

Share Transfer & Investors’

Grievances Committee

Remuneration Committee

Corporate Governance Committee

Special Share

Allotment committee

Mr. Vinit Kumar

- - - - - - 48,67,786 -

Dr. (Ms.) Kala Pant

30,000 25,000 5,000 10,000 - 6,000 - 20,000

Mr. R.V. Joshi

30,000 25,000 5,000 - 10,000 1,000 - 20,000

Mr. G. Ramchandran

25,000 20,000 - 10,000 10,000 - - 50,000


10.000 - - - - - - 20,000

E. David Ellington

5,000 - - - 5,000 - - 20,000


25.000 20,000 5,000 - - 6,000 - 20,000

The status of Investors’ complaints for the year is as under:

Complaints at the

beginning of the year

Complaints received

during the year

Complaints resolved

during the year

Complaints at the end of

the year

4 85 86 3

059Tem

ptat

ion

Food

s Li

mite

d





(e) Borrowing Committee: The Borrowing Committee was constituted on 12th

May, 2008, under section 292 of the Companies Act, 1956, and was delegated powers to borrow moneys, otherwise than on debentures, up to a total amount of Rs. 1,000 crores (Rs. One Thousand crores Only) outstanding at any one time.

The following Directors are the members of the Committee:

(i) Mr. Vinit Kumar (ii) Dr. (Ms.) Kala Pant and (iii) Ms. Bhairavi Goswami

5. Chief Executive officer/Chief Financial officer Certification:

Mr. Vinit Kumar, Chairman and Managing Director, as the Chief Executive Officer of the Company has issued necessary certificate pursuant to the provisions of Clause 49 of the Listing Agreement with the Bombay Stock Exchange and the same is annexed to and forms part of the Annual Report.

The Company did not have a Chief Financial Officer during the year. The Chief Executive Officer overseas the finance function.

6. other Disclosures: (a) There were no materially significant

transactions made by the Company with its Promoters, Directors, Relatives or the Management which have potential conflict with the interest of the Company at large;

(b) SEBI passed an exparte ad interim order on 16th February, 2009, directing the Company and Mr. Vinit Kumar to cease and desist with immediate effect from publishing or causing to publish, reporting or causing to report, circulate or cause to circulate in any manner any false or misleading information relating to dealings in the shares of Kohinoor Foods Limited in the manner set out in the order until further orders. The Company has filed objections against the order with SEBI, who also heard the Company

in the matter. The final order of SEBI is awaited. Apart from the above, there were no penalties,

strictures imposed on the Company by the Stock Exchanges or SEBI or any Statutory Authority or any matter relating to capital markets during the last three years;

(c) In preparation of financial statements, no treatment materially different from that prescribed in accounting standard had been followed;

(d) The Company has initiated the process of adopting and implementing risk management system and procedure in respect of its business, which will be endeavored to be completed during the financial year 2009-10;

(e) Presently the Company does not have a Whistle Blower Policy. However, no person of the Company has been denied access to the Audit Committee; and

(f) The Company has complied with all the Mandatory Requirements, other than Risk Management System. As regards non-mandatory requirements, the extent of compliance has been stated in this Report.

7. Means of Communication: (a) Half yearly/Quarterly Results: Half yearly/Quarterly results are not sent

to each household of shareholders, but are

Mr. Vinit Kumar is the Chairman of the Committee. The quorum of the meeting shall be two Directors.

The Meetings of the Committee held during the year and attendance thereat is as below:

Date of the Meeting

No. of Directors

in the Committee

Directors Present

17th July, 2008 3 3

26th March, 2009 3 3

28th March, 2009 3 3

4. General Body Meetings:

(a) Dates and location of the last three Annual General Meetings and passing of Special Resolutions thereat:

Sr. No.

Date Location Time Special Resolution Passed (Yes/No)

i) 12th May, 2008 Hotel Hilton Towers, Nariman Point, Mumbai 400021 11.30 a.m. Yes

ii) 18th June, 2007 Hotel Hilton Towers, Nariman Point, Mumbai 400021 11.00 a.m. Yesiii) 05th August, 2006 Seminar Room, 31st Floor, Center 1 Building, World

Trade Center Complex, Cuffe Parade, Mumbai-400 00511.00 a.m. Yes

(b) Whether any Special Resolution passed last year through postal ballot - details of voting pattern : No

(c) Person who conducted the postal ballot exercise : Not Applicable

(d) Whether any Special Resolution is proposed to be conducted through postal ballot : No

(e) Procedure for postal ballot : Not Applicable

060 Ann

ual R

epor

t 200

8-09





submitted to Stock Exchange and are published in one national English newspaper and in one regional language newspaper (of the place where the registered office of the Company is situated).

(b) Website:

The quarterly results are displayed on the website of the Company.

(c) Presentation to Institutional Investors or Analysists:

One presentation was made to Institutional Investors or to Analysts during the year under review.

(d) Management Discussion & Analysis Report (MD&AR)

The MD&AR is a part of the Annual Report.

8. General Shareholder Information:

(a) AGM: Date, time and venue: 18th Annual General Meeting will be held on Friday, 29th May, 2009* at 11.30 A.M. at the World Trade Centre, Cuffe Parade, Mumbai.

(b) Financial calendar (tentative):

Unaudited Financial Results reporting for the quarter ending 30th June, 2009 : End July 2009

Unaudited Financial Results reporting for the quarter ending 30th September, 2009 : End October 2009

Unaudited Financial Results reporting for the quarter ending 31st December, 2009 : End January 2010

Unaudited Financial Results reporting for the year ending 31st March, 2010 : End April 2010

Annual General Meeting for the year ending 31st March, 2010 : On or before 24th August, 2010

(c) Book closure period : From Friday, 22nd May, 2009 to Friday, 29th May, 2009 (both days inclusive).

(d) Dividend payment date : Not applicable since the Company has not declared any dividend.

(e) Listing on Stock Exchange : Currently, the Company’s Company’s shares are listed at The Bombay Stock Exchange Ltd.

Annual Listing Fees for the year 2009-10 have been paid to the Bombay Stock Exchange Ltd.

(f) BSE Stock Code : 519228

(g) ISIN Number : INE244I01019

(h) Market Price Data & Price Performance in Comparison to BSE Sensex :

Month High (Rs.) Low (Rs.) Comparison with BSE Sensex

Sensex Change - % Company’s Share Price Change - %

April 2008 234.55 160.00 9.61 31.22

May, 2008 227.00 201.00 -6.52 -6.75

June, 2008 350.00 204.50 -18.86 52.27

July, 2008 349.00 280.15 6.50 -0.07

August, 2008 314.00 280.00 3.56 -5.19

September, 2008 300.00 235.00 -10.77 -5.91

October, 2008 280.00 158.35 -24.75 -13.96

November, 2008 264.75 169.65 -10.94 -6.59

December, 2008 210.00 121.05 5.29 -18.10

January, 2009 168.00 112.00 -5.68 -26.30

February, 2009 122.00 34.15 -5.04 -72.00

March, 2009 32.45 18.85 -0.07 -9.55

The Company’s shares are listed only on the Bombay Stock Exchange.

061Tem

ptat

ion

Food

s Li

mite

d





(i) Registrar & Share Transfer Agents:

M/s. Purva Sharegistry (India) Pvt. Ltd., the Company’s Registrar and Share Transfer Agents (R&TA), handle the entire share

registry work. Accordingly, all documents, transfer deeds, demat requests and other communication in relation thereto

should be addressed to the R&TA at the following office:

M/s. Purva Sharegistry (India) Pvt. Ltd.,

33, Printing House, 28-D, Police Court Line, Behind Old Handloom House, Fort,

Mumbai – 400 001.

Tel. : 23010771, 23016761 & 23018261

Fax : 23016761

E-Mail : [email protected]

(j) Share Transfer System:

Share transfers in physical form are registered and returned within the stipulated time period from the date of receipt in

case documents are complete in all respects.

Share transfers in dematerialised form are effected as per the prescribed procedure within the stipulated time.

(k) (i) Distribution of Shareholding as on 31st March, 2009

(l) Dematerialisation of Shares & Liquidity:

24,953,600 shares representing 99.25% of the share capital of the Company have been dematerialised as on March 31,

2009.

The average monthly volume of shares traded on the Bombay Stock Exchange during 2008-09 was 99,207, with the

highest being 37,46,476 shares on 19th March, 2009 and the lowest 270 shares on 24th November,2008.

(m) outstanding GDRs/ADRs/Warrants or any convertible instruments, conversion date and likely impact on equity:

As on 31st March, 2009:

(i) 7,000,000 warrants allotted to NRI Tax Services.com Private Limited, 150,000 warrants allotted to the six independent

and non-executive Directors and 150,000 warrants allotted to four business associates of the Company, on

preferential basis, are outstanding. Each warrant shall entitle the holder thereof to apply for one fully paid up equity

share of your Company within 18 months of the allotment of the warrant. The issue price of Rs. 200/- per warrant and

the conversion price of Rs. 200/- per share are in compliance with the applicable SEBI guidelines; and

Number of Shares No. of share-holders No. of shares held % to Total Shares

Up to 500 1,668 243,757 0.97

501 – 1,000 153 129,522 0.52

1,001 - 2,000 84 130,143 0.52

2,001 - 3,000 28 74,638 0.30

3,001 - 4,000 23 79,398 0.32

4,001 - 5,000 29 137,887 0.55

5,001 - 10,000 36 275,042 1.09

10,00 & above 85 24,071,716 95.73

Total 2,106 25,142,100 100.00

(ii) Shareholding Pattern as on 31st March, 2009

Category No. of Shares %

Promoter Group* 4.572,662 18.19

Foreign Institutional Investors 9.587,490 38.13

Foreign Corporate Bodies 2,625,000 10.44

Indian Mutual Funds 10,833 0.04

Non Resident Indians 12,468 0.05

Indian Public (Including Bodies Corporate) 8,333,647 33.15

Total 25,142,100 100.00

*Promoter Group comprises of Venture Business Advisors Pvt. Ltd.

062 Ann

ual R

epor

t 200

8-09





(ii) 256,600 share options allotted to the employees of the Company during the year under the Employees’ Stock Option

Scheme of the Company are outstanding. The exercise price is Rs. 150 per share. The options shall vest as per the

vesting schedule over a period of four years from the date of the grant, based on passage of time as well as evaluation

of the performance every year of the grantees. The options many be exercised and converted into the equivalent

number of shares of the Company after twelve months from the date of each vesting.

Assuming conversion of the warrants and options in full, the number of outstanding equity shares of the Company will

go up from 25,142,100 to 32,698,700 shares.

(n) Plant Locations:

Owned:

(i) Plot No. C-2, MIDC, Jejuri,

Taluka Purandar, Dist. Pune-412 302.

Tel. 91-2115-253372/253610/254166

Fax. 91-2115-253610

(ii) Village & Post Office Rathdhana,

Sonipat Jatheri Road, Sonipat (Haryana) – 131 001.

Tel. 91-130-3290430

Fax. 91-130-2325312

Leased:

C/o ANS Agro Industries Ltd.

136, K.M.Stone, G.T.Road, Village & Post Office Shamgarh,

Karnal (Haryana) – 132 116.

Tel. 91-1745-244226 / 91-1745-244227

Fax. 91-1745-244226

(o) Address for Correspondence:

All communications to be addressed to the Company’s registered office situated at 4, Unity House, 8, Mama Parmanand

Marg, Opera House, Mumbai-400 004.

B. NoN-MANDAToRY REquIREMENTS

1. (a) At present the Chairman does not maintain his independent office.

Therefore, the question of reimbursement of expenses does not arise.

(b) None of the independent Directors have a tenure exceeding in aggregate for a period of 9 years on the Board of the

Company.

2. For Remuneration Committee, please refer to para 3(b) of this Report.

3. As the Company’s quarterly and half-yearly results are published in English newspaper having circulation all over India and in

Marathi newspaper having circulation in Mumbai, the same are not sent to the shareholders of the Company.

4. Auditors’ qualifications have been dealt with in the Notes on Accounts and Directors’ Report.

5. Presently the Company does not have training programme for its Board Members.

6. Presently the Company does not have mechanism for evaluating non-executive Board Members.

7. Presently the Company does not have a Whistle Blower Policy.

On behalf of the Board of Directors

Place : Mumbai Vinit Kumar

Dated : 27th April, 2009 Chairman & Managing Director

* The Board of Directors subsequently postponed the AGM of the company to 10th August, 2009 and Book closure dates from Monday, 3rd August, 2009 to Monday, 10th August, 2009 (both days inclusive).

063Tem

ptat

ion

Food

s Li

mite

d





To

The Board of Directors of

TEMPTATIoN FooDS LIMITED

4, Unity House, 8 Mama Parmanand Marg

Opera House

Mumbai - 400 004

Dear Sirs/Madam,

Sub: CEo Certification as required under sub-clause V of Clause 49 of the Listing Agreement with Bombay

Stock Exchange

I, Vinit Kumar, in my capacity as Managing Director of the Company, hereby certify as regards the accounts of the

Company for the financial year ended on 31st March, 2009, the Balance Sheet as at that date, the Profit & Loss Account

for the year ended on that date and the Cash Flow Statement for the year ended on that date, as under:

(a) I have reviewed financial statements and the cash flow statement for the year and that to the best of their knowledge

and belief

i) these statements do not contain any materially untrue statement or omit any material fact or contain statements

that might be misleading;

ii) these statements together present a true and fair view of the Company’s affairs and are in compliance with

existing accounting standards, applicable laws and regulations.

(b) There are, to the best of my knowledge and belief, no transactions entered into by the Company during the year

which are fraudulent, illegal or violative of the Company’s code of conduct.

(c) I accept responsibility for establishing and maintaining internal controls for financial reporting and that I have

evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and I have

disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls,

if any, of which I am aware and the steps I have taken or propose to take to rectify these deficiencies.

(d) I have indicated to the auditors and the Audit Committee:

i) significant changes in internal control over financial reporting during the year;

ii) significant changes in accounting policies during the year and that the same have been disclosed in the notes to

the financial statements; and

iii) instances of significant fraud of which I have become aware and the involvement therein, if any, of the

management or an employee having a significant role in the Company’s internal control system over financial

reporting.

Vinit KumarChairman & Managing Director

Place : Mumbai, Date : 27th April, 2009

CEO’s CERTIFICATIOn

064 Ann

ual R

epor

t 200

8-09





To the Members of TEMPTATIoN FooDS LIMITED,

We have examined the compliance of conditions of corporate governance by Temptation Foods Limited for the year

ended 31st March, 2009, as stipulated in clause 49 of the Listing Agreement of the said Company with Stock Exchange of

India.

The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination

was limited to procedure and implementation thereof, adopted by the Company for ensuring the compliance of the

conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of

the Company.

In our opinion and to the best of our information and according to the explanation given to us, we certify that the

Company has complied with the condition of Corporate Governance as stipulated in the above mentioned Listing

Agreement except, with regard to the following:

Clause 49: The certification required to be made by the Chief Financial Officer as the Company does not have a Chief Financial Officer.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency

or effectiveness with which the management has conducted the affairs of the Company.

For Sharp & TannanChartered Accountants

By the hand of

Edwin P AugustinePartner

Place : Mumbai, (Membership No. 43385)Date : 27th April, 2009

This is to confirm that the Company has adopted a Code of Conduct for its Directors and Senior Management Personnel.

The code of Conduct is available on the website of the Company.

In accordance with Clause 49 of the Listing Agreement with the Bombay Stock Exchange, I, Vinit Kumar, Chairman

and Managing Director of the Company, hereby declare that the Directors and Senior Management Personnel of the

Company have affirmed compliance with the said Code of Conduct for the year ended 31st March, 2009.

For TEMPTATIoN FooDS LIMITED

Vinit KumarChairman & Managing Director

Place : Mumbai, Date : 27th April, 2009

AudITORS’ CERTIFICATE On COMPLIAnCE OF CORPORATE GOVERnAnCE undER CLAuSE 49 OF THE LISTInG AGREEMEnT

dECLARATIOn – COMPLIAnCE WITH THE COdE OF COnduCT

065Tem

ptat

ion

Food

s Li

mite

d





Auditors report

To the Members of TeMpTaTion Foods LiMiTed

We have audited the attached Balance Sheet of Temptation Foods Limited, as at 31st March, 2009, 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 Company’s 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 31st 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;

066 Ann

ual R

epor

t 200

8-09





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.


By the hand of



067Tem

ptat

ion

Food

s Li

mite

d





(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.

Annexere TO ThE AuDITORS’ REPORT

068 Ann

ual R

epor

t 200

8-09





According to the information and explanations given to us, no undisputed statutory dues were in arrears outstanding as at 31st 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 Benefits Tax

765,729 2008-09

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.

xviii) 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.


By the hand of



Annexere TO ThE AuDITORS’ REPORT (CONTD.)

069Tem

ptat

ion

Food

s Li

mite

d





bAlAnce sheetAS AT 31ST MARCh, 2009

As per our attached report of even date For and on behalf of the Board of Directors of

For ShARP & TANNAN TEMPTATION FOODS LIMITED

Chartered Accountants

EDWIN P AuGuSTINE VINIT KuMAR Dr. (Ms.) KALA PANT

Partner Chairman & Managing Director Director

Membership No. 43385

Mumbai NIMISh ThAKORE

Dated : 27th April, 2009 President Corporate Affairs & Company Secretary

Rs.

Particulars Schedule As at 31st March 2009 As at 31st March 2008

SOuRCES OF FuNDS

shareholders’ Funds :

Share Capital A 251,421,000 251,421,000

Reserves and Surplus B 2,153,061,465 2,404,482,465 1,575,573,761 1,826,994,761

Share / Convertible Warrants

Application Monies

C 146,000,000 204,562,500

Loan Funds :

Secured D 1,018,332,844 2,383,067

unsecured E 68,814,749 1,087,147,593 368,870 2,751,937

Total 3,637,630,058 2,034,309,198

APPLICATION OF FuNDS

Fixed assets : F

Gross Block 1,185,048,014 857,367,898

Less : Depreciation and Amortisation 232,854,962 144,418,916

Net Block 952,193,052 712,948,982

Capital Work in Progress 32,585,630 984,778,682 12,828,254 725,777,236

investments : G 280,983,859 1,855,000

deferred Tax assets : 42,633,553 1,355,746

(Refer Note No. 18 of Schedule Q)

Current assets, Loans and advances : h

i) Inventories 600,661,093 330,172,635

ii) Sundry Debtors 2,593,567,557 703,189,022

iii) Cash and Bank Balances 13,822,100 12,880,752

iv) Loans and Advances 331,999,050 610,480,031

3,540,049,800 1,656,722,440

Less : Current Liabilities and

provisions

I

i) Current Liabilities 1,136,467,077 311,317,384

ii) Provisions 74,348,759 40,083,840

1,210,815,836 351,401,224

net Current assets 2,329,233,964 1,305,321,216

Total 3,637,630,058 2,034,309,198

Significant Accounting Policies P

Notes to the Accounts Q

The schedules referred to above and the notes attached form an integral part of the accounts.

070 Ann

ual R

epor

t 200

8-09





profit & loss AccountFOR ThE YEAR ENDED 31ST MARCh, 2009

As per our attached report of even date For and on behalf of the Board of Directors of

For ShARP & TANNAN TEMPTATION FOODS LIMITED




Membership No. 43385

Mumbai NIMISh ThAKORE

Dated : 27th April, 2009 President Corporate Affairs & Company Secretary

Rs.

Particulars Schedule 2008-09 2007-08

INCOME Sales 8,700,740,780 3,280,476,682 Other Income J 19,065,767 14,304,290

8,719,806,547 3,294,780,972 EXPENDITuRE Manufacturing Expenses K 7,849,548,398 3,028,461,215 Decrease / (Increase) in Finished

Goods L (261,237,979) (184,018,418)Administrative Expenses M 214,673,068 87,233,270 Selling and Distribution Expenses N 117,194,698 43,112,223 Interest and Finance Expenses O 143,105,977 467,842 Depreciation and Amortisation 88,436,045 53,026,429 Less: Transferred from Revaluation Reserve 7,099,638 81,336,407 7,099,639 45,926,790

8,144,620,569 3,021,182,922 profit Before extraordinary items 575,185,978 273,598,050 Less: Extraordinary Items (Refer to note. no. 12 of Schedule Q)

25,191,443 -

profit after extraordinary items

Before Tax

549,994,535 273,598,050

Less: provision for: Current Tax 62,381,034 35,845,726 Deferred Tax (41,277,807) (1,355,746) Fringe Benefit Tax 1,935,167 1,034,529 Wealth Tax - 23,038,394 17,307 35,541,816 profit after Tax 526,956,141 238,056,234

Balance Brought Forward From previous Year

172,173,596 (65,882,638)

amount available For appropriations 699,129,737 172,173,596 appropriations Interim Dividend 15,069,779 - Dividend Distribution Tax On Above 2,563,740 17,633,519 - - Balance Carried to Balance sheet 681,496,218 172,173,596

earning per share before extra

ordinary items of Rs. 10/- each Basic 21.96 11.42 Diluted 21.94 11.27 earning per share after extra

ordinary items of Rs. 10/- each Basic 20.96 11.42 Diluted 20.94 11.27 (Refer to note. no. 16 of Schedule Q) Significant Accounting Policies P Notes to the Accounts Q The schedules referred to above and the notes attached form an integral part of the accounts.

071Tem

ptat

ion

Food

s Li

mite

d





schedules ANNEXED TO AND FORMING PART OF BALANCE ShEET

Rs.

Particulars As at 31st March 2009 As at 31st March 2008

sCHedULe: a

ShARE CAPITAL

authorised Capital

75,000,000 (P.Y. 30,000,000) Equity Share of Rs. 10/- each

750,000,000 300,000,000

issued, subscribed & paid-up Capital

25,142,100 (P.Y. 25,142,100) Equity Shares of

Rs. 10/- each, fully paid up

251,421,000 251,421,000

Total 251,421,000 251,421,000

Rs.


sCHedULe: B

RESERVES AND SuRPLuS

securities premium

As per last Balance sheet 1,097,628,509 42,960,000

Additions during the year - 1,079,625,000

1,097,628,509 1,122,585,000

Less: Share Issue Expenses Written Off - 1,097,628,509 24,956,491 1,097,628,509

special Capital incentive 2,500,000 2,500,000

subsidy from Government 113,173 113,173

Capital Reserve:

As per last Balance sheet 229,175,898 74,233,120

Additions during the year 64,878,715 294,054,613 154,942,778 229,175,898

( Refer Note No.2 of Schedule Q)

Revaluation Reserves

As per last Balance Sheet 73,982,585 81,082,224

Less: Transferred to Profit and Loss Account 7,099,638 66,882,947 7,099,639 73,982,585

employees’ stock option

Employees Stock Option Outstanding 35,949,660 -

Deferred Employees Compensation (25,563,655) 10,386,005 - -

profit and Loss account 681,496,218 172,173,596

Total 2,153,061,465 1,575,573,761

Rs.


sCHedULe: C

ShARES / CONVERTIBLE WARRANTS

APPLICATION MONEY

Covertible Warrants 146,000,000 -

Share Application Money - 2,700,000

Convertible Warrants Application Money - 201,862,500

Total 146,000,000 204,562,500 072 Ann

ual R

epor

t 200

8-09





schedules ANNEXED TO AND FORMING PART OF BALANCE ShEET (Contd.)

Rs.


sCHedULe: d

SECuRED LOANS

a From Banks:

a. Short Term

i. Pre/Post Shipment Credit Facility 90,000,000 -

ii. Working Capital Demand Loan 400,000,000 -

b. Long Term

Term Loan 13,991,066 503,991,066 - -

[Amount due within one year: Rs.

69,41,165 (Previous Year Rs. Nil)]

B From others:

a. Short Term

i. Inter Corporate Deposit 24,624,000 -

ii. Factoring Facility 352,481,362 -

iii. Margin Funding Facilities 126,789,638 503,895,000 - -

b. Long Term

i. Vehicle Loans 1,990,024 2,383,067

[Amount due within one year:

Rs. 4,39,330 (Previous Year Rs. 3,93,043)]

ii. Interest Accrued and Due 8,456,754 -

Total 1,018,332,844 2,383,067


sCHedULe: e

uNSECuRED LOANS

a short Term:

a. From Bank

Bills Discounting Facility 37,312,810 -

b. From Others

Inter Corporate Deposit & Others 31,250,000 68,562,810 - -

B Long Term:

Interest Free Sales Tax Deferment Loan from

Government 251,939 368,870

[Amount due within one year: Rs. 99,389

( Previous Year Rs. 1,16,931)]

Total 68,814,749 368,870

073Tem

ptat

ion

Food

s Li

mite

d






sCH

edU

Le F

:

FIX

ED A

SSET

S A

S A

T 31

ST M

AR

Ch

, 200

9

Parti

cula

rsG

ross

Blo

ckD

epre

ciat

ion/

Am

ortis

atio

nN

et B

lock

As

at

01.0

4.20

08

Add

ition

s/

Adj

ustm

ents

Del

etio

nA

s at

31.0

3.20

09

As

at

01.0

4.20

08

Add

ition

sD

elet

ion

As

at

31.0

3.20

09

As

at

31.0

3.20

09

As

at

31.3

.200

8

OW

NED

ASS

ETS

:

TAN

GIB

LE A

SSET

S:

Free

hold

Lan

d 9

0,99

6,70

6 -

- 9

0,99

6,70

6 -

- -

- 9

0,99

6,70

6 9

0,99

6,70

6

Fact

ory

Bui

ldin

g 1

00,8

39,5

93

51,

281,

099

- 1

52,1

20,6

92

20,

458,

957

3,4

68,6

66

- 2

3,92

7,62

3 1

28,1

93,0

69

80,

380,

636

Plan

t and

Mac

hine

ry 5

47,8

24,2

89

113

,224

,563

-

661

,048

,852

1

17,2

51,4

54

60,

188,

838

- 1

77,4

40,2

92

483

,608

,560

4

30,5

72,8

36

Offi

ce E

quip

men

t 2

,614

,324

9

05,9

68

- 3

,520

,292

4

44,6

00

226

,645

-

671

,245

2

,849

,047

2

,169

,724

Com

pute

rs 4

,122

,560

2

,459

,658

-

6,5

82,2

18

1,2

99,6

68

1,2

86,0

74

- 2

,585

,742

3

,996

,476

2

,822

,892

Furn

iture

and

Fix

ture

1,7

32,0

23

662

,393

-

2,3

94,4

16

533

,628

3

52,1

97

- 8

85,8

25

1,5

08,5

91

1,1

98,3

95

Sub-

tota

l (A

) 7

48,1

29,4

95

168

,533

,681

-

916

,663

,176

1

39,9

88,3

07

65,

522,

420

- 2

05,5

10,7

27

711

,152

,449

6

08,1

41,1

89

INTA

NG

IBLE

ASS

ETS:

Com

pute

r Sof

twar

e 4

71,8

64

79,

146,

435

- 7

9,61

8,29

9 3

8,36

8 2

,462

,736

-

2,5

01,1

04

77,

117,

195

433

,496

Bra

nd &

Tra

dem

arks

100

,000

,000

8

0,00

0,00

0 -

180

,000

,000

4

,166

,697

2

0,00

0,00

0 -

24,

166,

697

155

,833

,303

9

5,83

3,30

3

Sub-

tota

l (B

) 1

00,4

71,8

64

159

,146

,435

-

259

,618

,299

4

,205

,065

2

2,46

2,73

6 -

26,

667,

801

232

,950

,498

9

6,26

6,79

9

Tot

al (A

+B)

848

,601

,359

3

27,6

80,1

16

- 1,

176,

281,

475

144

,193

,372

8

7,98

5,15

6 -

232

,178

,528

9

44,1

02,9

47

704

,407

,988

LEA

SED

ASS

ETS

:

TAN

GIB

LE A

SSET

S:

Leas

ehol

d La

nd 4

,688

,030

-

- 4

,688

,030

1

37,2

54

49,

224

- 1

86,4

79

4,5

01,5

51

4,5

50,7

76

Veh

icle

s 4

,078

,509

-

- 4

,078

,509

8

8,29

0 4

01,6

65

- 4

89,9

55

3,5

88,5

54

3,9

90,2

19

Tota

l (C

) 8

,766

,539

-

- 8

,766

,539

2

25,5

44

450

,889

-

676

,434

8

,090

,105

8

,540

,995

GR

AN

D

TOTA

L(A

+B+C

) 8

57,3

67,8

98

327

,680

,116

-

1,18

5,04

8,01

4 1

44,4

18,9

16

88,

436,

045

- 2

32,8

54,9

62

952

,193

,052

7

12,9

48,9

82

Pre

viou

s Y

ear

247

,051

,934

6

10,3

44,9

63

29,

000

857

,367

,898

9

1,39

3,15

2 5

3,02

6,42

9 6

66

144

,418

,916

7

12,9

48,9

82

-

Cap

ital W

ork

in

Prog

ress

(inc

ludi

ng

capi

tal a

dvan

ces)

- -

- -

- -

- -

32,

585,

630

074 Ann

ual R

epor

t 200

8-09






Rs.


sCHedULe: G

INVESTMENTS (At Cost, unless specified)

Long Term investments

Government securities:

unquoted:

National Savings Certificates, VIIIth Issue 25,000 25,000

(Refer to note. no. 7(a) of Schedule Q)

shares (Non Trade; Fully Paid up):

Quoted:

2,856,632 Shares of Kohinoor Foods Ltd. (Previous Year : Nil) 275,305,276 -

unquoted:

300 Shares of Kade Pathar Pat Sanstha - Fully Paid up

(Face Value: Rs. 100)

30,000 275,335,276 30,000 30,000

others:

unquoted:

Share Application Money - Aptsource Software Pvt. Ltd. 1,800,000 1,800,000

Current investments

shares (Non Trade; Fully Paid up):

Quoted:

33,645 Shares of Jumbo Bag Ltd. (Previous Year : Nil) 1,541,748 -

35,168 Shares of Rasoya Protin Ltd. (Previous Year : Nil) 2,281,835 3,823,583 - -

Total 280,983,859 1,855,000

Quoted investments:

Book Value 279,128,859 -

Market Value 153,907,000 -

Unquoted investments:

Book Value 1,855,000 1,855,000

investments purchased and sold:

(a) during Current Year

Name of Company Face Value (Rs.) No. of Shares Purchase Cost (Rs.)

Kohinoor Foods Ltd. 10 1,114,447 114,239,165

(B) during previous Year

Name of Mutual Fund Face Value (Rs.) No. of units Purchase Cost (Rs.)

hDFC Liquid Fund Premium Plan 10 8,156,740 100,000,000

hDFC Floating Rate Income Fund 10 9,921,287 100,015,498

hDFC Cash Management Fund 10 9,968,599 100,000,000

Reliance Liquid Plus 1,000 14,984 15,000,000

ICICI Prudential Liquid Plan 10 8,437,751 100,000,000

Kotak Liquid Premium 10 40,889,427 500,000,000

Kotak Flexi Debt Scheme 10 16,362,238 200,079,080

Birla Cash Plus 10 9,980,538 100,000,000

Birla Sun Life Liquid Plus 10 9,980,538 100,000,000

uTI Liquid Cash Plan – Daily Income 1,000 98,093 100,000,000

uTI Liquid Cash Plan – Daily Dividend Option 1,000 99,996 100,017,115

uTI Liquid Cash Plan – Daily Income 1,000 98,109 100,017,115

LIC MF Liquid – Dividend Plan 10 9,107,385 100,000,000

LIC MF Liquid – Growth Plan 10 7,037,496 100,000,000

hDFC Floating Rate Income Fund 10 3,967,900 40,000,000

LIC MF Liquid Fund – Growth Plan 10 2,436,121 35,000,000

Total 1,890,128,808 075Te

mpt

atio

n Fo

ods

Lim

ited





Rs.

Particulars As at 31st March 2009 As at 31st March 2008sCHedULe : H CuRRENT ASSETS, LOANS AND ADVANCES inventories (As valued and certified by

Managing Director) (at lower of cost and net realisable value) Stock in Trade Raw Materials - 33,612 Consumables 4,177,575 2,699,767 Packing Materials 15,862,239 8,055,956 Finished Goods 580,621,279 600,661,093 319,383,300 330,172,635

debtors (unsecured ) Debts outstanding for a period exceeding six

months : Considered Good 150,747,818 33,378,962 Considered Doubtful 1,444,676 3,292,601

152,192,494 36,671,563 (Add)/ Less: Provision for Doubtful Debts (1,444,676) 3,292,601

150,747,818 33,378,962 Other Debts : Considered Good 2,442,819,739 2,593,567,557 669,810,060 703,189,022

Cash and Bank Balances Cash on hand 572,119 816,034 Balances with Scheduled Banks: In Current Accounts 2,780,251 9,054,196 In Fixed Deposit Accounts 10,407,149 3,010,522 In unclaimed Dividend Account - Per Contra 62,581 13,822,100 - 12,880,752

Loans and advances (unsecured, Considered Good) Advance to Subsidiary Company 42,895 - Advances Recoverable in Cash or in Kind or for

Value to be Received

103,227,188 55,069,727

Inter Corporate Deposits 9,500,000 15,000,000 Trade Advances to Suppliers 199,517,570 475,000,000 Advances towards Business Purchase 1,000,000 23,481,241 Advance Tax / Tax Deducted at Source 1,503,455 37,006,088 Deposits 17,207,942 331,999,050 4,922,975 610,480,031

Total 3,540,049,800 1,656,722,440


Particulars As at 31st March 2009 As at 31st March 2008sCHedULe : i CuRRENT LIABILITIES AND PROVISIONS (a) Current Liabilities

Sundry Creditors: Due to Micro and Small enterprises - - (Refer to Note no. 5 of Schedule Q) Due to Others 1,083,061,219 217,449,904 unclaimed Dividend - Per Contra 62,581 - Other Liabilities 53,343,277 1,136,467,077 93,867,480 311,317,384

Note: There are no amounts due and outstanding to be credited to Investor Education and Protection Fund (B) provisions for: Current Tax 64,945,102 35,845,726 Fringe Benefit Tax 1,574,899 1,034,529 Wealth Tax 17,307 17,307 Employee Benefits 5,951,724 2,680,024 Gratuity 1,859,727 74,348,759 506,254 40,083,840

Total 1,210,815,836 351,401,224 076 Ann

ual R

epor

t 200

8-09





schedules ANNEXED TO AND FORMING PART OF PROFIT & LOSS ACCOuNT

Rs.Particulars 2008 - 2009 2007 - 2008sCHedULe : J OThER INCOME Interest - Tax Deducted at Source Rs. 1,051,315

(P. Y. Rs. 12,134) - From Banks - On Fixed Deposits Account 471,522 52,813 - From Others 6,900,171 7,371,693 1,343,480 1,396,293 Dividend 17,118 6,218,997 Export Incentives 5,657,045 3,080,822 Insurance Claims 1,051,611 - Balances Written Back (Net off of Write off) 3,342,968 - Miscellaneous 1,625,332 3,608,178 Total 19,065,767 14,304,290

Particulars 2008 - 2009 2007 - 2008sCHedULe : K MANuFACTuRING EXPENSES Raw Materials Consumed : Opening Stock 33,612 218,140 Add:- Purchases (Net) 7,325,993,517 2,766,424,704

7,326,027,129 2,766,642,844 Less:- Closing Stock - 7,326,027,129 33,612 2,766,609,232

Consumables and packing Material : Opening Stock 10,755,723 4,674,374 Add:- Purchases 174,727,125 66,427,997

185,482,848 71,102,371 Less:- Closing Stock 20,039,815 165,443,033 10,755,723 60,346,648

operating and other expenses : Power, Fuel, Water & Cold Storage Charges 158,927,746 63,339,428 Factory Expenses 18,296,996 7,894,607 Labour & Processing Charges 180,853,494 358,078,236 130,271,300 201,505,335

Total 7,849,548,398 3,028,461,215

Particulars 2008 - 2009 2007 - 2008

sCHedULe : L

(INCREASE) / DECREASE IN FINIShED GOODS

Closing Stock of Finished Goods 580,621,279 319,383,300

Less: Opening Stock of Finished Goods 319,383,300 35,149,536

(261,237,979) (284,233,764)

Less: Procured on Business Acquisitions - (261,237,979) 100,215,346 (184,018,418)

Total (261,237,979) (184,018,418)

077Tem

ptat

ion

Food

s Li

mite

d





schedules ANNEXED TO AND FORMING PART OF PROFIT & LOSS ACCOuNT (Contd.)

Rs.Particulars 2008 - 2009 2007 - 2008sCHedULe : M ADMINISTRATIVE EXPENSES personnel Cost: Salaries, Wages and

Benefits 66,415,262 22,089,226 (including Employees’

Stock Compensation

Charge amounting to

Rs.10,386,005, Previous

Year Rs. NIL) Contribution to Provident

Fund and Other Funds 1,666,654 446,634 Employer’s Contribution to

Gratuity Scheme 1,426,466 348,469 Staff Welfare 1,823,975 71,332,357 1,270,377 24,154,706

other administrative expenses: Repairs and Maintenance

Building 875,544 456,067 Plant & Machinery (including Outsourced facilities as per agreements)

22,464,503 825,494

Others 3,518,960 26,859,007 2,084,405 3,365,966 Auditors’ Remuneration :

Audit Fees 750,000 550,000 Certification Charges 408,500 1,158,500 443,539 993,539

Rent 14,772,210 5,991,119 Rates and Taxes 1,015,847 - Travelling and Conveyance 23,275,622 12,501,594 Communication Expenses 5,038,586 2,069,854 Printing and Stationery 2,412,066 1,219,788 Electricity Charges 2,526,173 1,120,342 Insurance Premium 2,382,403 -Legal and Corporate Charges 6,589,198 2,670,671 Retainership Fees 12,891,533 9,629,341 Professional Fees 8,590,686 5,182,751 Shared Office and Other

Infrastructure Expenses - 2,400,000 Service Tax Paid 5,020,269 1,364,180 Managerial Remuneration 4,867,786 3,322,097 Directors’ Sitting Fees 288,000 318,000 Loss on sale of Fixed Assets - 4,334 Loss on sale of Shares 3,732,303 - Balances Written off /

Written Back (Net) - 171,223 Bad debts written off - 977,038 Provision for Doubtful Debts 1,444,676 3,292,601 Provision for Dimunition in

Value of Current Investment 2,603,563 -Miscellaneous Expenses 17,872,283 143,340,711 6,484,126 63,078,564 Total 214,673,068 87,233,270

078 Ann

ual R

epor

t 200

8-09





schedules ANNEXED TO AND FORMING PART OF PROFIT & LOSS ACCOuNT (Contd.)

Rs.

Particulars 2008 - 2009 2007 - 2008

sCHedULe : n

SELLING AND DISTRIBuTION EXPENSES

Freight and Forwarding Expenses 105,155,764 35,050,629

Sales Promotion Expenses 12,038,934 8,061,594

Total 117,194,698 43,112,223

Particulars 2008 - 2009 2007 - 2008

sCHedULe : o

INTEREST AND FINANCE EXPENSES

Interest and Discounting Charges 102,807,635 90,415

Loan Processing Fees - 1,739,246

Bank Charges 7,057,465 1,233,171

Foreign Exchange Rate Loss (Net of Gains) 33,240,877 (2,594,990)

Total 143,105,977 467,842

079Tem

ptat

ion

Food

s Li

mite

d





Rs.Particulars 2008 - 2009 2007 - 2008

A. CASh FLOW FROM OPERATING ACTIVITES:Net Profit/(Loss) before Tax 549,994,535 273,598,050 Adjustments For :Interest Income (7,371,693) (1,396,293)Dividend Received (17,118) (6,218,997)Balances Written Back / Off (Net) (50,367) 171,223 Foreign Exchange Gain / Loss (Net) 33,240,877 (2,594,990)Employees Stock Compansation Charge 10,386,005 -Interest Expense 102,807,635 90,415 Provision for Doubtful Debts (1,847,925) - Depreciation and Amortisation 81,336,407 45,926,791 Provision for Dimunition in value of Investments 2,603,563 221,087,384 - 35,978,149 operating profit before extraordinary items and Working Capital Changes 771,081,919 309,576,199 Adjustments For Changes in Working Capital:Trade and Other Receivables (1,925,013,720) (576,258,386)Inventories (270,488,458) (290,130,585)Trade and other Payables 798,391,012 324,193,193 Loans & Advances 272,980,981 (1,124,130,185) (556,645,875) (1,098,841,653)Cash Generated from operations (353,048,266) (789,265,454)Direct Taxes Paid - (36,880,255)Add: Extraordinary ItemsProfit / Loss on Sale of Investments (Net) 28,923,745 4,334 net Cash Generated/ (Used in) operating activites (a) (324,124,521) (826,141,375)

B. CASh FLOW FROM INVESTING ACTIVITIES:Inflow from Investment ActivitiesDividend 17,118 6,218,997 Intercorporate Deposits Matured 5,500,000 - Sales of Investments / units of Mutual Funds 85,315,419 1,890,128,808 Sales of Fixed Assets - 90,832,537 24,000 1,896,371,805 outflow from investment activitiesPurchases of Fixed Assets 283,521,277 468,230,440 Inter Corporate Deposits - 15,000,000 Purchases of units of Mutual Funds - 1,890,128,808 Advances towards Business Purchase - 23,481,241 Purchase of Investments 395,971,587 679,492,864 1,855,000 2,398,695,489

net Cash Generated/ (Used in) investing activities (B) (588,660,327) (502,323,684)

C. CASh FLOW FROM FINANCING ACTIVITIES:Inflow from Financing ActivitiesShare Capital including Share Premium - 1,159,687,500 Convertible Warrants Application Money 5,100,000 200,900,000 Interest Income 7,371,693 1,396,293 Long term Loans Taken 13,991,066 - Short term Loans Taken 1,015,040,565 - Intercorporate Deposits Taken 55,874,000 1,097,377,324 2,383,067 1,364,366,860 outflow from Financing activitiesDividend Paid 15,069,779 - Corporate Dividend Tax Paid thereon 2,563,740 -Long Term Loans Repaid 393,043 -Repayment of Convertible Warrants 60,000,000 -Repayment of Share Application Money Received 2,700,000 -Sales Tax Deferred Loan paid 116,931 76,925 Interest Paid 102,807,635 90,415 Share Issue Expenses - 183,651,128 24,956,491 25,123,831

net Cash Generated/ (Used in) Financing activities(C) 913,726,196 1,339,243,029 net Change in Cash & Cash equivalents (a+B+C) 941,348 10,777,970 Opening Balance of Cash & Cash Equivalents 12,880,752 2,102,782 Closing Balance of Cash & Cash Equivalents 13,822,100 12,880,752 Net (Decrease)/ Increase in Cash and Cash Equivalents 941,348 10,777,970

cAsh flow stAtementFOR ThE YEAR ENDED 31ST MARCh, 2009

As per our attached report of even date For and on behalf of the Board of Directors of For ShARP & TANNAN TEMPTATION FOODS LIMITED




Membership No. 43385Mumbai NIMISh ThAKORE Dated : 27th April, 2009 President Corporate Affairs & Company Secretary

notes:

1) Cash and cash equivalents includes “ Cash and Bank Balances” as disclosed under Schedule h of the Annual Accounts.

2) The aforesaid statement has been prepared under the Indirect Method as setout in Accounting Standard 3 :

Cash Flow Statement”

080 Ann

ual R

epor

t 200

8-09





sCHedULe p :

SIGNIFICANT ACCOuNTING POLICIES

1. Basis of presentation

The accounts have been prepared using historical cost convention and in accordance with Indian Generally

Accepted Accounting principles (GAAP) on the accrual basis and in compliance with the Accounting Standards

referred to in Section 211(3C) and other requirements of the Companies Act, 1956.

The preparation of financial statements in conformity with GAAP requires that the management of the Company

makes estimates and assumptions that affect the reported amounts of incomes and expenses of the period, the

reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of

the financial statements. Actual results could differ from the estimates. Any revisions to accounting estimates is

recognised prospectively in the current and future periods. Wherever changes in presentation are made, comparative

figures of the previous year are regrouped accordingly.

2. Revenue Recognition

a. Revenue from the sale of manufactured and traded products is recognised as and when the products are

supplied in accordance with the terms of sale and upon transfer of passage of title to the customer.

b. Sale of manufactured and traded products are net of trade discounts.

3. Fixed assets

a. Fixed assets are capitalised at acquisition cost (net of tax/duty credits availed, if any), including directly

attributable costs, such as, freight, insurance and specific installation charges for bringing the assets to present

condition and location.

b. Where an expenditure increases the performance/life of an existing fixed asset as assessed earlier, such

expenditure is added to the cost of the asset.

c. Assets acquired under finance lease are recognised at the lower of the fair value of the lease assets at inception

and present value of minimum lease payments. Lease payments are apportioned between the finance charge

and the outstanding liability. The finance charge is allocated to periods during the lease term at constant

periodic rate of interest on the remaining balance of the liability.

4. intangible assets and amortisation Thereof

Intangible assets are recognized as per the criteria specified in Accounting Standard (AS 26) “Intangible Assets” and

are amortised as follows:

Trade Marks, Brands any Copyright: Over the period of 10 years from the date of acquisition.

Application Software: Over the period of 3 years.

5. depreciation

a. Depreciation on tangible fixed assets is provided at the rates and in the manner specified in Schedule XIV of the

Companies Act, 1956, on straight-line method.

b. Depreciation on assets costing upto Rs. 5,000 each are charged off fully in the year of purchase.

c. The leasehold land is written off over the primary period of lease.

6. impairment of assets

a. The carrying amount of assets, other than inventories is reviewed at each Balance Sheet date to determine,

whether there is any indication of impairment. If any such indication exists, the recoverable amount of the assets

is estimated.

b. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. The

recoverable amount is the greater of the asset’s net selling price and value in use, which is determined based on

the estimated future cash flow generated from the continuing use of an asset and from its disposal at the end of

its useful life, discounted to their present values.

c. An impairment loss is reversed if there has been a change in the estimates made to determine and recognize the

recoverable amount in the earlier year.

schedules SChEDuLES FORMING PART OF ThE ACCOuNTS

081Tem

ptat

ion

Food

s Li

mite

d





7. inventories

Inventories are valued at the lower of cost or net realisable value after providing for damages and obsolescence as

under:

a. Raw materials, packing materials stores and spares : At cost on FIFO

b. Traded Goods : At cost on FIFO

c. Work-in-progress : At cost plus appropriate production overheads

d. Finished Goods : At cost plus appropriate production overheads

8. Borrowing Cost

a. Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are

capitalised as part of the cost of such assets. A qualifying asset is an asset that necessarily takes a substantial

period of time to get ready for its intended use or sale.

b. All other borrowing costs are recognised as an expense in the period in which they are incurred.

9. investments

Long term investments are carried at cost less provision for any diminution other than

temporary, in the value of such investments. Current investments are carried at lower of cost

or market value. The determination of carrying amount of such investments is done on the

basis of specific identification.

10. Foreign Currency Transactions

a. The reporting currency of the Company is Indian Rupees.

b. Transactions in foreign currencies are recorded at the exchange rates/contracted rates prevailing on the

transaction dates.

c. Monetory items of assets and liabilities in foreign currencies at the year end are translated at

the prevailing exchange rate as at the close of the year.

d. Foreign exchange gains/losses on settlement/translation are recognized in the Profit and Loss account.

11. employee Benefits

a. Short Term Employees Benefits:

All employees benefits payable wholly within twelve months of rendering the services are classified as short

term employees benefits. Benefits such as salaries,wages, bonus, ex-gratia, etc.are recognised in the period in

which the employees render the related services.

b. The rules of the Company does not permit encashment of earned leave.

c. Post Employment benefits:

(i) Defined Contribution Plan: The Company’s state governed provident fund is defined contribution scheme.

The contribution paid/payable under the scheme is recognized during the period in which the employees

renders the related service.

(ii) Defined Benefit Plan: The employees of the Company are covered under the Employees’ Group Gratuity

scheme of Life Insurance Corporation of India. The present value of the obligation under such defined

benefit plans is determined based on actuarial valuation using the Projected unit Credit Method.

12. employees’ stock options

Stock Options granted to employees under the Employees’ Stock Option Scheme are accounted as per the intrinsic value

method permitted by the “Guidance Note on Share Based Payments” issued by the Institute of Chartered Accountants of

India. Accordingly, the excess of Fair Market Price of the shares as on the date of grant of options over the Exercise price

is recognized as deferred employee compensation and is charged to profit and loss account over the vesting period.

The number of options expected to vest is based on the best available estimate and would be revised, if necessary, if

subsequent information indicates that the number of stock options expected to vest differs from previous estimates.

schedules SChEDuLES FORMING PART OF ThE ACCOuNTS (Contd.)

082 Ann

ual R

epor

t 200

8-09





13. Taxes on income

a. Tax on income for the current period is determined on the basis of estimated taxable income and tax credits

computed in accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome

of assessments/appeals.

b. Deferred tax is recognised on timing differences between the accounting income and the estimated taxable

income for the year and quantified using the tax rates and laws enacted or substantially enacted as on the

balance sheet date.

c. Deferred tax assets, other than brought forward business loss and unabsorbed depreciation, are recognised and

carried forward to the extent there is reasonable certainty that sufficient future taxable income will be available

against which deferred tax assets can be realised.

d. MAT credit is recognised as an asset in accordance with the recommendation provided in the Guidance Note

issued by the Institute of Chartered Accountants of India.

e. Fringe Benefit Tax (FBT) on the Employees’ Stock Options is recognised in the profit and loss account when the

liability crystalises upon vesting of such stock options. Whenever such FBT liability is borne by the employee,

the same is not recognised.

FBT on all other expenses as specified in the Income Tax Act, 1961 is recognised in the profit and loss account

when the underline expenses are incurred.

14. provisions, Contingent Liabilities and Contingent assets

a. Accounting for contingencies (gains and losses) arising out of contractual obligations, are accounted on the basis

of mutual acceptances.

b. Contingent Assets are neither recognized nor disclosed.

c. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

15. events occuring after The Balance sheet date

Where material, events occurring after the date of the Balance Sheet are considered upto the date of approval of

accounts by the Board of Directors.


083Tem

ptat

ion

Food

s Li

mite

d





schedules SChEDuLES FORMING PART OF ThE ACCOuNTS (Contd.) sCHedULe Q :

NOTES TO ThE ACCOuNTS

1. Contingent Liabilities:

(a) Claims against the Company not acknowledged as debts : Rs. 6,851,986 (Previous Year: Rs.1,863,032).

(b) Counter guarantees given to a bank on account of guarantees given by the bank to Value Added Tax

authorities : Rs. 2,804,500 (Previous year Rs. 2,205,000).

(c) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of

advances) Rs.NIL (Previous year Rs. 1,333,964/-).

2. Capital Reserve:

(a) Capital Reserve includes Rs. 962,500 being the amount of warrant application money forfeited on 275,000

warrants in respect of which the warrant holder did not exercise its conversion option.

(b) The Company acquired on slump sale basis the business of Karen’s Gourmet Kitchen (India) Private Limited,

comprising, inter alia, the “Karen Anand” brand. The excess of the fair value (based on valuation report) of the

assets acquired over the consideration paid, amounting to Rs. 63,916,215 has been credited to Capital Reserve.

3. Convertible Warrants:

The Company has allotted 7,300,000 convertible warrants during the year, including 300,000 warrants allotted

to the Directors of the Company, on August 11, 2008. Each warrant is convertible into one equity share of the

Company, fully paid up, at a conversion price of Rs. 200 per share. The option is to exercised within a period of

18 months from the date of allotment. The warrant holders have paid 10% of the conversion price at the time of

allotment, which will stand forfeited to the Company if the option to exercise is not exercised within the 18 months

period.

A warrant holder who was allotted 900,000 warrants in November, 2006, did not exercise its right to convert the

warrants into shares in respect of 275,000 outstanding warrants, and on the expiry of the conversion period, the

application money of Rs. 962,500 paid in respect of the outstanding warrants were forfeited to the Company and has

been credited to the Capital Reserve Account.

4. secured Loans:

Pre/Post Shipment Credit Facility and the Working Capital Demand Loan are secured by charge on the current assets

of the Company, including receivables, present and future, a charge on the immovable and movable assets, present

and future, and Corporate Guarantee by the promoter Company.

Inter Corporate Deposit is secured by pledge of the shares of the Company held by Venture Business Advisors Pvt.

Ltd. (the promoter Company).

Term Loan is partly secured by hypothecation of the Fixed Deposit Receipt issued by the lending bank.

Vehicle loans are secured by hypothecation of the specific vehicles.

Factoring Facility is secured by a charge on Fixed Assets, receivables, pledge of the shares of the Company held by

Venture Business Advisors Pvt. Ltd. (the promoter Company) and Corporate Guarantee by the promoter Company.

Margin Funding Facilities are secured by the pledge of the shares of the Company which have been acquired by

utilising the Facilities and, in certain cases, by the pledge of the shares of the Company held by Venture Business

Advisors Pvt. Ltd. (the promoter Company).

084 Ann

ual R

epor

t 200

8-09





schedules SChEDuLES FORMING PART OF ThE ACCOuNTS (Contd.) 5. dues to Micro and small enterprises:

There are no micro and small enterprises to whom the Company owes dues, which are outstanding for more than 45

days as at 31st March, 2009.

The above information pertaining to micro and small enterprises has been determined to the extent such parties

have been identified on the basis of the information available with the Company. This has been relied upon by the

auditors.

6. assets Taken on Lease:

A. During the year, based on professional advice received, the Company had reclassified the leasehold land

situated at MIDC Jejuri, Taluka Purandhar, District Pune, from “Intangible Assets” to “Tangible Assets” in

Schedule ‘F’ (dealing with fixed assets) to the Balance Sheet.

B. The following are the disclosures in accordance with Accounting Standard 19 “Accounting for Leases” :

operating Lease:

During the year, the Company has acquired a commercial premises under renewable lease. Lease rental

Rs.11,345,889 has been debited to Profit & Loss Account during the year (Previous Year : Rs. 3,381,818).

Finance Lease:

a. Assets acquired on finance lease comprise of motor cars. The lease has a primary period which is fixed and

non-cancellable. There are no exceptional/restrictive covenants in the lease agreements.

b. The minimum lease payment and the present value of the minimum lease payments as at 31st March, 2009

in respect of assets acquired under finance lease are as follows:

(Rs.)

Particulars Minimum Lease Payments Present Value of Minimum

Lease Payments

As at 31-03-2009 As at 31-03-2008 As at 31-03-2009 As at 31-03-2008

i. Payable not later than 1 year 642,600 642,600 439,330 393,043

ii. Payable later than 1 year and not later than 5 year 1,820,700 2,463,300 1,550,694 1,990,024

Total (i+ii) 2,463,300 3,105,900 1,990,024 2,383,067

Less: Future Finance charges 473,276 722,833 - -

Present Value of Minimum Lease Payments 1,990,024 2,383,067 1,990,024 2,383,067

7. pledge/Hypothecation of securities/Fixed deposits:

(a) National Savings Certificates (NSCs), VIIIth Issue, amounting to Rs. 25,000/- (Previous Year Rs.25,000/-) have

been pledged with the Value Added Tax Authorities of a State. The NSCs is in the name of the Managing

Director of the Company as a nominee of the Company. (As per policy, NSCs are issued only in the name of an

individual).

(b) 2,853,237 shares of Kohinoor Foods Limited have been pledged with the financiers who have provided

Margin Funding Facilities for purchase of the shares. Out of the above, 1,646,605 have been transferred to the

Depository Participants Accounts of the financiers as security for the Facilities.

(c) Fixed deposits with banks, amounting to Rs. 2,804,500/- (Previous Year Rs. 2,205,000/-) have been

hypothecated with banks who have issued guarantees to Value Added Tax authorities of various States.

(d) Fixed Deposits of Rs 7,500,000 (Previous Year: Nil) have been hypothecated to the bank which has provided

Term Loan facility.

8. Balance Confirmations:

Sundry Debtors, Loans & Advances and Creditors balances are subject to confirmation, reconciliation and

consequent adjustments, if any.

9. particulars of Unhedged Foreign Currency exposures as at 31st March, 2009:

Foreign Currency Debtors: Rs.139,851,636/- (uS$ 2,595,737 @ closing rate of 1 uSD = Rs.50.96 & EuRO 112,173

@ closing rate of 1 EuRO = Rs.67.48) [Previous Year: Rs. 94,732,857 (uS $ 2,370,099 @ closing rate of

1 uSD = Rs.39.97)].

085Tem

ptat

ion

Food

s Li

mite

d





10. subsidiary Company:

During the year, the Company incorporated Temptation Foods International Limited (“TFIL”), a Company limited by

shares, in the British Virgin Islands of which it will hold 100% of the equity share capital as and when TFIL issues

its shares. As on the Balance Sheet date, TFIL has not issued any shares. Two Directors of the Company have been

appointed as Directors of TFIL and are its only Directors.

11. Managerial Remuneration:

Computation of Net Profit in accordance with Section 349 of the Companies Act, 1956:


( Rs.)

Particulars FY 2008-09 FY 2007-08

profit before Tax as per profit & Loss account 549,994,535 273,598,050

Add: Depreciation debited in Profit & Loss

Account (Net of Transfer from Revaluation

Reserve) 81,336,407 45,926,790

Managing Director’s Remuneration 4,867,786 3,322,097

Directors’ Fees 288,000 318,000

Loss on sale of Fixed Assets NIL (4,334)

Loss on sale of Investments 25,191,443 NIL

Loss on sale of Shares 3,732,303 NIL

Provision for Dimunition in Value of

Current Investment 2,603,563 NIL

Provision for Doubtful debts 1,444,676 119,464,178 3,292,601 52,855,154

669,458,713 326,453,204

Less:

Depreciation u/s 350 of The Companies

Act, 1956 81,336,407 45,926,790

Share issue expense charged to Securities

Premium account NIL 81,336,407 24,956,491 70,883,281

588,122,306 255,569,923

*Maximum remuneration payable to Managing Director @ 5% of

the above on prorata basis from date of appointment 29,406,115 5,516,400*

( Rs.)


Remuneration paid to the Managing director

Basic 3,913,457 2,672,903

house Rent Allowance 954,329 649,194

Total 4,867,786 3,322,097

12. extraordinary item:

The Company has made a loss of Rs. 25,191,443 during the year (Previous Year: Nil) on account of sales of shares of

Kohinoor Foods Limited, which has been disclosed as an Extraordinary Item.

13. employee Benefits:

The disclosures pursuant to Accounting Standard (AS) 15 (Revised) on “Employee Benefits” are as follows :

A) Defined Contribution Plan

Contribution to Defined Contribution Plan, recognised as an expense and included in “Personnel Cost” –

Schedule M in the Profit and Loss Account is as under :

- Employers contribution to Provident Fund and Other Funds– Rs. 1,666,654 (Previous year Rs. 446,634)

086 Ann

ual R

epor

t 200

8-09





schedules SChEDuLES FORMING PART OF ThE ACCOuNTS (Contd.) B) Defined Benefit Plan

( Rs.)Particulars Gratuity (Partly Funded)

2008-09 2007-08I Change in obligation during the year ended 31st March, 2009 1 Liability at the beginning of the year 639,695 99,792 2 Interest Cost - - 3 Current Service Cost 750,079 348,469 4 Less :Benefit Paid ( prior to contribution to scheme) 70,174 15,000 Sub-total 1,319,600 433,261 5 Actuarial (Gain)/Loss 676,387 - 6 Liability taken over on acquisition of business - 206,434 7 Liability at the end of the year 1,995,987 639,695 II Change in assets during the year ended 31st March, 2009 1 Plan assets at the beginning of the year 133,441 - 2 Expected Return on plan assets 2,819 - 3 Contribution transferred in - 133,441 4 Benefit paid ( from contribution to the scheme) - - 5 Actuarial (Gain)/Loss - - 6 Plan assets at the end of the year 136,260 133,441 Total actuarial (gain)/loss to be recognized 676,387 -III Actual Return on Plan Assets 1 Expected Return on plan assets 2,819 - 2 Actuarial (Gain)/Loss 676,387 - 3 Actual return on plan assets 673,568 -IV The major categories of plan assets as a percentage of total plan assets As per LIC scheme V Net asset / (liability) recognised in the Balance Sheet as at 31st March, 2009 1 Liability at the end of the year (1,995,987) (639,695) 2 Plan assets at the end of the year 136,260 133,441 3 Amount recognised in the Balance sheet (1,859,727) (506,254) VI Expenses recognised in the statement of P&L account for the year ended

31st March, 2009 1 Current Service Cost 750,079 348,469 2 Interest Cost - - 3 Expected Return on Plan Assets - - 4 Actuarial (Gain)/Loss 676,387 -

5 Liability carried forwards from earlier employer - - 6 Total expenses recognised in the Profit and Loss Account 1,426,466 348,469VII Amount to be recognised in the Balance Sheet Present Value of Defined Benefit Obligation 1,995,987 639,695 Less: Fair value of Plan Assets (136,260) (133,441) Net Liability/(Asset) 1,859,727 506,254VIII Principal actuarial assumptions at the Balance Sheet date: 1 Discount Rate at 31 March, 2009 8% 8% 2 Expected return on plan assets as at 31 March, 2009 8% 8% 3 Attrition Rate (Staff Turnover Rate) 1% to 3% 1% to 3% 4 Salary Escalation Rate 5% 5%General description of the defined benefit plan

The Company makes contributions to the Employees Group Gratuity Scheme of the Life Insurance Corporation of India,

a partly funded defined benefit plan for qualifying employees. The Scheme provides for lumpsum payment to employees

on retirement, death while in employment or termination of employment of an amount equivalent to 15 days salary for

every completed year of service or part thereof in excess of six months, provided the employee has completed five years

in service.

087Tem

ptat

ion

Food

s Li

mite

d





schedules SChEDuLES FORMING PART OF ThE ACCOuNTS (Contd.) 14. segment Reporting:

The disclosure requirements in respect of Accounting Standard 17 on “Segment Reporting” is as under:

a. Primary Segment

The Company is a single segment Company dealing in fresh and frozen foods in accordance with the criteria for

identification of reportable segment specified in the said standard.

b. Secondary Segment (Geographical Segment)

Particulars 2008-09 2007-08

Within India Outside India Total Within India Outside India Total

Sales 8,316,135,024 384,605,756 8,700,740,780 2,975,360,097 305,116,585 3,280,476,682

Segment

Assets

2,457,008,522 139,851,636 2,596,860,158 608,456,165 94,732,857 703,189,022

Note: The Company has common Fixed Assets for producing goods for domestic and overseas markets. hence,

separate disclosure for Fixed Assets is not required to be furnished.

15. Related party disclosures:

The disclosure requirements in respect of Accounting Standard 18 on “Related Party Disclosures” are as under:

(A) Relationships:

(i) For the Financial year 2008-09

a) Company under same Management : Venture Business Advisors Pvt. Ltd.

b) Key Management Personnel : Mr.Vinit Kumar, CMD

c) Wholly Owned Subsidary Company : Temptation Foods International Ltd

(ii) For the Financial year 2007-08

a) holding Company (Till 18th October, 2007) : Venture Business Advisors Pvt. Ltd.

b) Key Management Personnel : Mr.Vinit Kumar – Managing Director

(B) The following transactions were carried out with related parties in the ordinary course of business:


Sr.

No.

Transactions Subsidary

Company

holding

Company

Common

control exists

Key

Management

Personnel

Subsidary

Company

holding

Company

Common

control

exists

Key

Management

Personnel

1. Consultancy - - - - - - - -

2 Remuneration to Mr. Vinit

Kumar - - - 4,867,786 - - - 3,322,097

3 Loan Taken / Advance - - - - - - - -

4 Sharing of Office and

Infrastructure to Venture

Business Advisors Pvt. Ltd. - - - - - 2,400,000 - -

5 10% Application money for

Convertible warrants - - - - - - - -

6 Purchases - - - - - - - -

088 Ann

ual R

epor

t 200

8-09






(C) The following are the balances with related parties in the ordinary course of business :

16. earnings per share:

The disclosure requirements in respect of Accounting Standard 20 on “Earnings Per Share” are as under :

Particulars As at 31st March, 2009 As at 31st March, 20081 Amounts due from

- Tempatation Foods International Limited 42,895 Nil- Mr. Vinit Kumar Nil Nil- Venture Business Advisors Private Limited Nil Nil

2 Amounts due to- Tempatation Foods International Limited Nil Nil- Mr. Vinit Kumar 129,808 Nil- Venture Business Advisors Private Limited Nil Nil

Particulars FY 2008-09 FY 2007-08Earning per share before extraordinary itemsBasicProfit After Tax Excluding Extra Ordinary Item as per accounts 552,147,585 238,056,235Weighted average number of shares outstanding 25,142,100 20,851,936Basic EPS Rs. 21.96 Rs. 11.42dilutedProfit after tax Excluding Extra Ordinary Item as per Accounts 552,147,585 238,056,235Weighted average number of shares outstanding 25,142,100 20,851,936Number of Shares under Option 256,600 NilNumber of shares that would have been issued at fair value:

(256,600 x 150*1/168.03*2)

(229,066) Nil

Weighted average number of potential equity shares that would

be allotted on exercise of Options

27,534 275,000

Weighted average number of dilutive shares outstanding 25,169,634 21,126,936Diluted EPS Rs. 21.94 Rs. 11.27Face Value Rs.10 Rs.10

(*1 : Exercise Price; *2: Fair Market Price)

Note: The Fair Value (ie. Rs. 176/-) of the outstanding 7,300,000 convertible warrants being higher than the

convertible price of Rs.200/- per share, the warrants are not dilutive in nature.

(*1 : Exercise Price; *2: Fair Market Price)

Note: The Fair Value (ie. Rs. 176/-) of the outstanding 7,300,000 convertible warrants being higher than the

convertible price of Rs.200/- per share, the warrants are not dilutive in nature.

There were no extra-ordinary items of income or expense in the previous year.

Earning per share after Extra Ordinary Item

Particulars FY 2008-09 2007-08BasicProfit After Tax Excluding Extra Ordinary Item as per accounts 552,147,585 238,056,235Less : Extra Ordinary Item Loss on Sale of Investments 25,191,443 NILProfit After Tax including Extra Ordinary Item as per accounts 526,956,142 238,056,235Weighted average number of shares outstanding 25,142,100 20,851,936Basic EPS (Rupees) Rs. 20.96 Rs. 11.42dilutedProfit after tax Excluding Extra Ordinary Item as per Accounts 552,147,584 238,056,235Less : Extra Ordinary Item Loss on Sale of Investments 25,191,443 NILProfit After Tax including Extra Ordinary Item as per Accounts 526,956,141 238,056,235Weighted average number of shares outstanding 25,142,100 20,851,936Number of Shares under option 256,600 NilNumber of shares that would have been issued at fair value: (256,600 x 150*1/168.03*2) (229,066) NilWeighted average number of potential equity shares that would be allotted on exercise of Options 27,534 275,000Weighted average number of dilutive shares outstanding 25,169,634 21,126,936Diluted EPS Rs. 20.94 Rs. 11.27Face Value Rs.10 Rs.10

089Tem

ptat

ion

Food

s Li

mite

d





schedules SChEDuLES FORMING PART OF ThE ACCOuNTS (Contd.) 17. options under employees’ stock option scheme:

The Company has granted 256,600 options on 21st August, 2008, to select permanent employees of the Company

under the Employees’ Stock Options Scheme, 2008. The options would vest over a period of 4 years as per the

Vesting Schedule under the Scheme. No option has vested during the year and the options granted during the year

are outstanding at the Balance Sheet date. The vesting period shall commence from 21st August, 2009.

The Exercise Price is Rs. 150 per share against the fair market value of Rs. 290.10 prevailing at the time of grant

of the options. The accounting of the options has been done as per the Guidance Note on “Accounting for Share

based payments” issued by the Institute of Chartered Accountants of India. Accordingly, the accounting value of the

options has been treated as another form of employee compensation in the financial statements of the Company,

by valuing the options at their Intrinsic Value. The Deferred Employee Compensation Expense is written off over the

vesting period. had the Company followed fair value approach described in the Guidance Note, the Company’s

net income and basic and diluted earnings per share as reported would have reduced to the pro forma amounts as

below:

Sr. No. Particulars Year ended March 31, 2009

(a) Net Profit before Extraordinary Items as reported - Rs. 552,147,585

Less: Differential Employee Compensation Cost 4,502,043

Adjusted Pro forma 547,645,542

(b) Net Profit after Extraordinary Items as reported - Rs. 526,956,142

Less: Differential Employee Compensation Cost 4,502,043

Adjusted Pro forma 522,454,099

(c) Basic Earnings Per Share before Extraordinary Items as reported 21.96

Pro forma Basic Earnings Per Share before Extraordinary Items 21.78

(d) Basic Earnings Per Share after Extraordinary Items as reported 20.96

Pro forma Basic Earnings Per Share after Extraordinary Items 20.78

(e) Diluted Earnings Per Share before Extraordinary Items as reported 21.94

Pro forma Diluted Earnings Per Share before Extraordinary Items 21.76

(f) Diluted Earnings Per Share after Extraordinary Items as reported 20.94

Pro forma Diluted Earnings Per Share after Extraordinary Items 20.76

The Fair Value of each Option is estimated on the date of the grant using Black-Scholes model with the following

assumptions:

Sr. No. Particulars Year ended March 31, 2009

(a) Volatility 51.81%

(b) Risk Free Rate 9.14%

(c) Exercise Price Rs. 150

(d) Time to Maturity (Years) 4.40

(e) Dividend Yield Nil

090 Ann

ual R

epor

t 200

8-09





schedules SChEDuLES FORMING PART OF ThE ACCOuNTS (Contd.) 18. deferred Taxation:

(a) In compliance with the Accounting Standard 22 on “Accounting for Taxes on Income”, the Company has

recognized deferred tax on timing differences, being the difference between taxable income and accounting

income that originate in one period and are capable of reversal in one or more subsequent periods.

(b) Deferred tax assets are attributable to the following items:( Rs.)

Particulars Deferred Tax Assets

/(Liabilities) as at

31.03.2008

(Charge)/Credit Deferred Tax Assets

/ (Liabilities) as at

31.03.2009

Deferred Tax Asset:

Expenses allowed for tax purposes

when paid 236,590 (236,590) Nil

Provision for Doubtful Debts 1,119,156 (628,111) 491,045

Expenses allowed for tax purposes on

payment of TDS Nil 48,734,352 48,734,352

Provision for Dimunition in Value of

Current Investment Nil 884,951 884,951

Sub-Total (a) 1,355,746 48,754,603 50,110,348

Deferred Tax Liabilty:

Depreciation on Assets other than

assets used for tax-holiday. Nil (7,476,795) (7,476,795)

Sub-Total (b) Nil (7,476,795) (7,476,795)

Total (a-b) 1,355,746 41,277,807 42,633,553

Note:

1) The Company does not recognize deferred tax liability for timing differences on account of items which relate to

income eligible for tax exemption under section 80-IB of the Income Tax Act, 1962, and which reverse during

the tax-holiday period.

2) The Company falls under the purview of section 115JB of the Income Tax Act, 1962. hence, Current Tax is

calculated as per the provisions of Minimum Alternative Tax(MAT).

19. impairment of assets:

As required by Accounting Standard 28 on “Impairment of Assets”, the Company has reviewed the potential

generation of economic benefits from fixed assets and concluded that the fixed assets employed in the business

will generate adequate economic returns over their useful lives. Consequently, no provision for impairment loss is

required.

20. Quantitative details:

a) Licensed Capacity, installed Capacity and production:

Particulars Licensed Capacity (MT) Installed Capacity* (MT) Production ** (MT)

FY 2008-09 FY 2007-08 FY 2008-09 FY 2007-08 FY 2008-09 FY 2007-08

Fresh & Frozen Foods 70,000.00 70,000.00 70,000.00 70,000.00 107,000.29 45,863.01

* The installed capacity is as certified by the management.

** A part of the production is outsourced from other plants depending upon requirements.

b) Finished Goods stocks*:

Particulars As at 31.03.2009 As at 31.03.2008

unit Quantity Rs. Quantity Rs.

Fresh & Frozen Foods MT 19,374.31 580,621,279 9,895.34 319,383,300

* Purchases of Finished Goods in Current Year: Nil (Previous Year: 3,605.41 MT; Rs.100,215,346).

091Tem

ptat

ion

Food

s Li

mite

d






c) sales: *



Fresh & Frozen Foods MT 96,786.06 8,700,740,780 40,748.56 3,280,476,682

* Sales include processing done on job-work basis

d) Raw Materials Consumed



Fresh & Frozen Foods MT 132,458.89 7,326,027,129 69,069.77 2,766,609,232

Where of : - FY 2008-09 FY 2007-08

Consumption (Rs.) Percentage Consumption (Rs.) Percentage

1. Imported 1,509,535 0.02% Nil Nil

2. Indigenous 7,324,517,594 99.98% 2,766,609,232 100%

Total 7,326,027,129 100% 2,766,609,232 100%

e) Consumables & packing Material:

Where of : - FY 2008-09 FY 2007-08

Consumption (Rs.) Percentage Consumption (Rs.) Percentage

1. Imported 768,083 0.46% Nil Nil

2. Indigenous 164,674,950 99.54% 60,346,648 100%

Total 165,443,033 100% 60,346,648 100%

f) expenditure in Foreign Currency charged to accounts :Rs.


Travelling Expenses 10,524,850 5,050,426

Professional Fees 3,391,191 3,544,047

Membership & Subscription ---- 115,542

Others 2,941,128 -

Total 16,857,169 8,710,015

g) earnings in Foreign CurrencyRs.


Export of Fresh & Frozen

Foods (FOB basis) 350,862,288 305,116,585

21. Regrouping / Reclassification:

Figures for the previous year have been regrouped/reclassified wherever necessary to make them comparable with

those of the present year.




Partner Chairman & Managing Director Director Membership No. 43385Mumbai NIMISh ThAKORE Dated : 27th April, 2009 President Corporate Affairs & Company Secretary

092 Ann

ual R

epor

t 200

8-09





bAlAnce sheet AbstrAct AND COMPANY’S GENERAL BuSINESS PROFILE




Partner Chairman & Managing Director Director Membership No. 43385Mumbai NIMISh ThAKORE Dated : 27th April, 2009 President Corporate Affairs & Company Secretary

I. REGISTRATION DETAILS :

II. CAPITAL RAISED DuRING ThE YEAR : (Amount in Thousands)

III. POSITION OF MOBILISATION AND DEPLOYMENT OF FuNDS : : (Amount in Thousands)

IV. PERFORMANCE OF ThE COMPANY : (Amount in Thousands)

V. GENERIC NAMES OF ThREE PRINCIPAL PRODuCTS/ SERVICES OF ThE COMPANY (AS PER MONETARY TERMS)

N I LPublic Issue

N I LBonus Issue

N I LRights Issue

N I LPrivate Placement

3 6 3 7 6 3 0Total Liabilities

2 5 1 4 2 1Paid-up Capital

9 8 4 7 7 9Fixed Assets

8 7 1 9 8 0 7Turnover (including other income)

I Q F F R O Z E N F R u I T S 0 8 1 1 9 0

I Q F F R O Z E N V E G E T A B L E S 0 7 1 0 8 0

M A R I N E F O O D P R O D u C T S 0 3 0 2

Product Description Item Code No.(ITC Code)

1 4 6 0 0 0Share/Convertible warrant application money

4 2 6 3 3Deferred Tax Asset

5 7 5 1 8 6Profit / (Loss) before Extra Ordinary Item

6 8 8 1 5unsecured Loans

N I LMiscellaneous Expenditure :

5 2 6 9 5 6Profit After Tax

2 1 . 9 4Earnings Per Equity Share before Extra Ordinary Item in Rs. – Diluted

2 1 5 3 0 6 1Reserves and Surplus

2 8 0 9 8 4Investments

8 1 4 4 6 2 1Total Expenditure

1 0 1 8 3 3 3Secured Loans

2 3 2 9 2 3 4Net Current Assets

5 4 9 9 9 5Pro Profit / (Loss) after Extra Ordinary Item /Profit Before Tax

N I LDeferred Tax Liability

2 1 . 9 6Earnings Per Equity Share before Extra Ordinary Items in Rs. - Basic

2 0 . 9 6Earnings Per Equity Share after Extra Ordinary Items in Rs. - Basic

2 0 . 9 4Earnings Per Equity Share after Extra Ordinary Item in Rs. – Diluted

6Dividend Rate (%)

sources of Funds

application of Funds

3 6 3 7 6 3 0Total Assets

6 0 6 4 3Registration No

1 1State Code

3 1 0 3 0 9Balance Sheet Date

093Tem

ptat

ion

Food

s Li

mite

d





“i deal with temptation by yielding to it” - Mark Twain

“what makes resisting temptation difficult for many people, is that they don’t want to discourage it

completely.” - Benjamin Franklin

“it is good to be without vices, but it is not good to be without temptations” - Walter Bageot

“lead us not into temptation. Just tell us where it is; we’ll find it.” - Sam Levenson

“temptation is the fire that brings up the scum of the heart.” - William Shakespeare

“the only trouble with resisting temptation is that you may not get

another chance” - Anonymous

“every temptation is an opportunity to triumph over evil.” - Marc Williams

094 Ann

ual R

epor

t 200

8-09





“resist no temptation: a guilty conscience is more honorable than regret”- Anonymous

“everything tempts the man who fears temptation” - French Proverb

“the biggest human temptation is to settle for too little.” - Thomas Merton

“temptation is an irresistible force at work on a movable body”- henry Louis Mencken

“opportunity may knock only once, but temptation leans on the doorbell.” - Anonymous

“ever notice that the whisper of temptation can be heard farther than the loudest call

to duty.” - Earl Wilson

“those who flee temptation generally leave a forwarding address.” - Lane Olinghouse

095Tem

ptat

ion

Food

s Li

mite

d





notes

096 Ann

ual R

epor

t 200

8-09





directors Mr. Vinit Kumar, Chairman & Managing Director

Dr. (Ms.) Kala Pant

Mr. R. V. Joshi


Mr. E. David Ellington

Mr. G. Ramachandran


President – Corporate Mr. Nimish Thakore

affairs & Company secretary

registered Office 4, Unity House, 2nd Floor, 8, Mama Parmanand Marg

Opera House, Mumbai-400 004

Plant locations Plot No. C-2, MIDC, Jejuri, Taluka Purandar, Dist. Pune-412 302

Village & Post Office Rathdhana

Sonipat Jatheri Road, Sonipat, (Haryana) – 131 001

136, K.M.Stone, G.T.Road, Village & Post Office Shamgarh

Karnal (Haryana) – 132 116

Principal Bankers ICICI Bank

Bank of Baroda

United Bank of India

HDFC Bank Ltd.

statutory auditors Sharp & Tannan


Ravindra Annex

194, Churchgate Reclamation,

Dinshaw Vachha Road, Mumbai-400 020

internal auditors R. G. Mehta & Co.


B-203, Suchita Enclave, Maharashtra Nagar

Borivali (W), Mumbai 400 092

COrPOrate inFOrmatiOn





Temptation Foods Limitedwww.temptationfoods.com





its all in the - 1icz9g2sdfe31jz0lglwdu48 … & A with the Managing Director & CEO 20 ... Zeus and the wife of King Menalus of Sparta, ... Frozen Tiger Prawns; Shrimps and Other Sea

Documents