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ASRAWAL CHHALLANI 4 CO., CHARTERED ACCOUNTANTS,

Byramji Town,
NA6PUR-440001. PH. NO. 2544250. 2544253.

AUDITORS' REPORT TO THE MEMBERS OF HALDIRAM FOObS INTEENUTIONAL LIMITED

To The Members of :

HALDIRAM FOODS INTERNATIONAL LIMITED.

Report on the accounts for the year ended on 31st March, 2005 in compliance with Section 227(2) of the Companies Act, 1956. We have audited the attached Balance Sheet of HALDIRAM FOODS INTERNATIONAL LIMITED, as at 31* March, 2005 and also the Profit and Loss /Account for the year ended on that date annexed thereto and the Cash Flow Statements for the year ended on that date. 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. 1 As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies ( Auditor's Report ) Amendment Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order. Further to our comments in the Annexure referred to above, we report that : (a) We have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purposes of our audit; In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of thosj For, Baldiram Foods International Limits* Director

(b)

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A6RAWAL CHHALLANI A CO., CHARTERED ACCOUNTANTS, (c) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of accounts; In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the Accounting Standards referred to in subsection (3C) of Section 211 of the Companies Act, 1956, to the extent applicable; On the basis of written representations received from the directors/companies, as at 31st March, 2005 and taken on record by the Board of Directors, we report that none of the directors is disqualified as at 31st March, 2005 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; In our opinion and to the best of our information and according to the explanations given to us, the said accounts 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: (i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2005; In the case of the Profit and Loss Account, of the Profit for the year ended on that date; and In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.
For. A6RAWAL CHHALLANI A Co., CHARTERED ACCOUNTANTS,

(d)

(e)

(f)

(ii)

(iii)

Nagpur ^^^^^^^^ Dated J&M* July, 2CX5v0o^

( S.R. CHHALLANI ) PARTNER. M. NO. 30154.

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ASRAWAL CHHAUANI A CO.. CHARTERED ACCOUNTANTS,

ANNEXURE TO THE AUDITORS' REPORT ;

[ Referred to in Paragraph 1 of our Report of even date on the Accounts for the year ended 31" March, 2005 of HALOIRAM FOODS INTERNATIONAL LIMITED ]. (i) The Company is maintaining proper records showing full particulars including quantitative details and situation of Fixed Assets. A substantial portion of the fixed assets have been physically verified by the management during the year and in our opinion the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification. Fixed Assets disposed off during the year were not substantial. According to the information and explanations given to us, we are of the opinion that the disposal of fixed assets has not affected the going concern status of the Company. The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between physical stocks and the book records were not material and have been properly dealt with in the books of account. The Company has taken loans from Companies listed in the Register maintained under Section 301. The Number of parties is 12 and the amount involved in the transactions is Rs. 74.98 Lacs. The Company has not granted loans to Companies listed in the Register maintained under Section 301.

(ii)

(iii)

(iv)

(v)

(vi)

(vii)

(viii) The rate of interest and other terms and conditions of the unsecured loans taken from Companies listed in the Register maintained under Section 301 are not prejudicial to the interest of the company. The Company has been regular in payment of principal and interest amount. There are no over-dues. (ix) In our opinion and according to the information and explanations given to us, there are adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and

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A6RAWAL CHHALLANI A CO.. CHARTERED ACCOUNTANTS, fixed assets. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal controls. (x) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that there are no transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956. In our opinion and according to the information and explanations given to us, the Company has not taken any deposits from public as such not required to comply with the provisions of Section 58A and 58AA of the Companies Act, 1956 and the Companies ( Acceptance of Deposits ) Rules, 1975, with regard to deposits accepted from the public. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

(xi)

(xii)

(xiii) The Central Government has not prescribed the maintenance of cost records under section 209(l)(d) of the Companies Act, 1956. (xiv) According to the records of the Company, Provident Fund, Investor, Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other Material statutory dues applicable to it have been generally regularly deposited during the year with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of above were in arrears, as at 31st March, 2005 for a period of more than six months from the date on which they became payable. According to the records of the Company, there are no disputed Sales-Tax, Income-Tax, Customs Duty, Wealth tax, Excise Duty or Cess which have not been deposited on account of dispute. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xv)

(xvi)

(xvii) In our opinion and according to the information and explanation given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

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ASRAWAL CHHALLANI & CO.. CHARTERED ACCOUNTANTS, (xviii) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. (xix) In our opinion the Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore the provisions of clause 4(xiii) of the Companies ( Auditor's Report) Order, 2003 are not applicable to the Company. (xx) In our opinion the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company. In our opinion, the Company has not given guarantees for loans taken by others from banks or financial institutions.

(xxi)

(xxii) In our opinion, the term loans have been applied for the purpose for which they were raised. During the year no term loan is raised. (xxiii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment. (xxiv) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. (xxv) The Company has not raised any secured debentures during the year, (xxvi) The Company has not raised any money through public issue during the year. (xxvii) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.
For, A6RAWAL CHHALLANI 4 Co., CHARTERED ACCOUNTANTS,

( S.R. CHHALLANI ) P^TNER. M. NO. 30154.

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A6RAWAL CHHAUANI & CO.. CHARTERED ACCOUNTANTS. BYRAMJI TOWN, NA6PUR 440 001. PH. 2544250; 2544253. HAIDIRAM FOODS INTERNATIONAL LIMITED NAfiPUR. BALANCE SHEET AS AT 31 ST MARCH. 2005. PARTICULARS SOURCES OF FUND : SCHEDULES 31.03.2005 31.03.2004

I SHAREHOLDERS' FUNDS : Share Capital. Reserves & Surplus. Shore Application Money. Pending Allotment.

" A" " B"

17,145,000 233,007,671 6,491,000

16,945,000 203.726,107 7,231,000 227,902.107

" I " Rs.

256,643.671

n LOAN FUNDS :
Secured Loans. Unsecured Loans. "C" " D"
" H " Rs.

70,570,304 143,441,282 214,011,586 48,868,437

74,449,923 100,089,050 174,538.973 19,435,032 19.435.032 421,876.112

DEFERRED T-* ' VOTI TTTES :

" m " RS .
TOTAL ( I TO m ) APPLICATIONS OF FUND : R*.

48.868.437 519.523.694

i FIXED ASSETS

= 6ross Block. Less: Depreciation. Net Block. Add: Capital W-I-P. Advances & Deposits.
11

" E" 407,628,829 69,787,876 337,840,953 91,277,839

I " Rs.

300,538,782 53,458,553 247,080,229 100,491,443 347,571.672 37,400 37.400

429.118,792 37,400 37.400

INVESTMENT:

" F"
" IT' Rs.

m NET

CURRENT ASSETS A CURRENT ASSETS: LOANS A ADVANCES a Inventory. Sundry Debtors. b Cash & Bank Balances. c Loans & Advances. d

"6" 29,615,000 50,903,024 40,119,816 21,498,400 142.136.240 39,490,000 33,211,395 29,522,431 20.918,087 123.141,913

" A " R.

Director

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ACRAWAL CHHALLANX CO. CHARTERED ACCOUNTANTS.

31.03.2005
11

31.03.2004

H"

a b

Current Liabilities, Provisions.

11

B " Rs.

47,765,797 4,002,941 51,768.737 90.367,502 519.523.694

46,808,544 2,066,329 48,874.873 74,267,040 421,876,112

( A - B ) " m" Rs.

TOTAL ( I TO IH )
A6RAWAL CHHALLANI 4 CO., CHARTERED ACCOUNTANTS. SIGNIFICANT ACCOUNTIN6 POLICIES AND NOTES TO THE ACCOUNTS = " P"

Rs.

Schedules " A " to " H " and " P " referred to above forms an integral part of the Balance Sheet. For and on behalf of Haldiram Foods Intl. Ltd. As per our report of even date attached. For.ASRAWALCHHAlkANIACO., CHARTERED ACCOUNTANTS. ( RAJENORAKUMAR S. ASRAWAL )

( S.R. CHHALLANI) PARTNER. M.NO. 30154.

for, flakJiram Foods Intentional Limited Limi

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A6RAWAL CHHALLANI A CO.. CHARTERED ACCOUNTANTS. BVRAMJI TOWN, NA6PUR 440 001. PH. 2544250; 2544253. HAtDIRAM FOODS INTERNATIONAL LIMITED. NA6PUR. PROFIT AND LOSS ACCOUNT. FOR THE YEAR ENDED 31ST MARCH. 2005 PARTICULARS INCOME: Soles / Income From Operation. Other Income. 31.03.2008

31.03.2004
623,666.759 1,353,692 625.020.451

"I" J"
Rs.

710,175.235 1,964,732 712.139.967

EXPENDITURE : Coat Of 6oods Consumed / Sold. Payments & Benefits To Employees. Manufacturing Expenses. Other Expenses.

" K" " L" "M1 "NT

Rs. Rs. "O1 Rs. Rs. Rs.

459,201,303 12,279,581 127,058.372 49,541,634 648.060.891 64.059.076 1,959,828 62.099.249 16,754,290 45.344.999 3,555.612 41.789.347 29,433,405 12.355.942 800.000 700,000 13.855.942 46,172,802 60.028,744 3,389,000 447,329 3,000,000 6.836.329 53,192,415

415,589,200 10,246,645 107,977,042 48,134,392 581.947.279 43,073.172 2,571,912 40,501.260 13,535.783 26,965.477 2,066,329 24,899.148 8,313,569 14,136 16,571,443

PROFIT BEFORE INTEREST A DEPRECIATION: Less: Interest. PROFIT BEFORE DEPRECIATION A TAX: Less ' Depreciation. PROFIT BEFORE TAX: Less: Income Tax. PROFIT AFTER TAX: Less ' Deferred Tax. Wealth Tax. PROFIT : Add : Income Offered Under Search: Financial Year 2004 - 05. Financial Year 2003 - 04. PROFIT : Add : Profit Brought Forward. PROFIT : Less . APPROPRIATIONS: Interim / Final Dividend. Dividend Tax. general Reserve.

Rs.

Rs. Rs.

16.571.443 36,396,936 52.968.379 3,364,500 431.077 3,000,000 6,795,577 46.172.802

Rs.
PROFIT CARRIED FORWARD :

Rs.

SI6NIFICANT ACCOUNTIN6 POLICIES "P" AND NOTES TO THE ACCOUNTS : Schedules " J " to " P " and " Q " referred to above forms an integral part of the Profit 4 Loss Account For and on behalf of Haldiram Foods Intl. Ltd. > As per our report of even date attached. For, A6RAWAL CHARTEREI ( RAJEKIDRAKUMAR S. A6RAWAL )
ANI 4 CO., IOUNTANTS.

( S.R. CHHALLANI) PARTNER. M.NO. 30154.

Food. ****

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A6RAWAL CHHALLANI A CO.. CHARTERED ACCOUNTANTS. BYRAMJI TOWN, NA6PUR 440 001. PH. 2544250; 2544253.

DETAT1 5 fHEET TO BALANCE SHEET AND PROFIT AND LOSS ACCOUNT.

AS AT 31ST MARCH. 2005.

31.03.2005 SCHEDULE " A " SHARE CAPITAL = I AUTHORISED SHARE CAPITAL : 5,000,000 Equity Shares of Rs. 10/-each. 31.03.2004

50,000,000

50,000,000 50.000.000

Rs.
II ISSUED. SUBSCRIBED AND PAID UP SHARE CAPITAL 17,14,500 Equity Shares of Rs. 10/- each fully Paid Up in Cash.( Previous Year 16,94,500 Shares.) TOTAL " A " SCHEDULE " B " RESERVES AND SURPLUS : I SECURITIES PREMIUM RESERVE : As Per Last Balance Sheet. Add: Received During The Year.
11

50.000.000

17,145,000 Rs. 17.1,45,000

16,945,000 16,945.000

80,305,000 9,800,000

80,305,000 80.305.000

I"

Rs

90,105.000

II

CAPITAL SUBSIDY FROM O.I.C. : As Per Last Balance Sheet.

2,000,000

2,000,000 2.000,000

" II "
III 6RANT FROM APEOA : As Per Last Balance Sheet. Add: Received During The Year.
11

Rs

2,000,000

790,641

495,387 295,254

I " Rs

790.641

790,641

IV 6ENERAL RESERVE = As Per Last Balance Sheet. Add'.Transferred For The Year.

27,000,000 3,000,000

24,000,000 3.000,000 27.000.000

"H I"

Rs

30,000.000

For, Haktiram Foods International limitod

Mnotar

(*( /^ \qk -<

f^

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A6RAWAL CHHALLANI CO.. CHARTERED ACCOUNTANTS. 31.03.2009 V SALES TAX INCENTIVE CAPITAL RESERVE : As Per Lost Balance Sheet. Add:Transferred FOP The Year.

31.03.2004

47.457,664 9,461,951
M

41,571,304 5,886,360 47.497,664

Rs.

96.919,615

VI PROFIT AND LOSS ACCOUNT : Surplus As Per Profit And Loss Account.
11

53.19Z.415
IV "
Rs.
Ri.

46,172,802

53.192,419
233.007,671

46.172.802
203.726.107

TOTAL " B " ( I TO VI ) SCHEDULE " C " SECURED LOANS I TERM LOAN = FROM S.B.I.. H.I.E. BRANCH. NA6PUR.
FCNRB.

32,366,040
Rs.

42,095,250 42.099,290

32,366,040

II

WORION6 CAPITAL LOAN FROM S.B.I.. H.I.E. BRANCH. NA6PUR. Aooinst HYP. Of Stocks A Books Debts. FCNRB. Hingna - Cash Credit A/c. No. 01600005153. Itwari - Cash Credit A/c. No. 01600005579.
H"

24,173,516 14,030,748

23,386.250 388,793 8,579,630 32,394.673 74.449.923

Rs. Rs.

38.204.264 70,570.304

TOTAL " C " ( I * H )

SCHEDULE " D " UNSECURED LOANS =

From Directors. From Others. From Punjab National Bank CM: Overdraft Due To Reconciliation. SBIC/A - Water Park - Bank O/D. TOTAL"D"

418,176 114,157,064

300,529 99,788,521

27,471,479 1,394,563
Rs.

143.441.282

100.069.090

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