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Directors Report of ADF Foods Ltd.

Mar 31, 2017

Dear Shareholders,

ADF Foods Limited

The Directors have pleasure in presenting the Twenty Seventh Annual Report together with the Audited Financial Statements for the Financial Year ended 3Ist March 20I7.

A. FINANCIAL RESULTS

The performance of the Company for the financial year ended 3Ist March 20I7 is summarized below:

(Rs. in Lakhs)

Particulars

Standalone

Consolidated

Audited

Audited

2016-17

2015-16

2016-17

2015-16

Net sales/Income from operation

I6,672.62

I6,090.06

20,224.60

2I,005.0I

Other Income

533.37

405.4I

608.94

444.92

Total Income

17,205.99

16,495.47

20,833.54

21,449.93

Less: Total expenditure

Cost of materials consumed

7,9I0.45

7,4I9.84

7,9I0.45

8,876.52

Purchase of Stock-in-trade

I,I09.38

663.67

3,086.44

I,707.0I

Changes in inventories of finished goods, work-in-progress and stock-in-trade

(80.85)

(I79.66)

(75.I4)

53.I8

Employee benefits expense

I,377.68

I,235.43

I,736.56

2,349.2I

Financial Expenses

94.56

II3.68

97.22

I36.97

Depreciation and amortization

7I2.27

789.I8

I,00I.I6

I,I96.22

Other expenses

4,I79.79

4,23I.47

5,376.00

6,047.49

Total expenses

15,303.28

14,273.61

19,132.69

20,366.60

Profit before exceptional and extraordinary items and tax

1,902.71

2,221.86

1,700.85

1,083.33

Exceptional Items

-

-

-

-

Profit before tax

1,902.71

2,221.86

1,700.85

1,083.33

Current tax

637.45

76I.05

638.56

768.05

Deferred tax

26.05

50.75

(27.84)

(344.00)

Prior year''s tax adjustment

2.44

-

5.93

(I.46)

Total tax expenses

665.94

811.80

616.65

422.59

Prior Period adjustments (Net off)

-

-

-

-

Net Profit ( ) / Loss (-)

1,236.77

1,410.06

1,084.20

660.74

Less : share of minority interest

-

-

-

-

Profit/loss for the period after minority interest

1,236.77

1,410.06

1,084.50

660.74

EPS (Basic)

5.74

6.41

5.03

3.00

EPS (Diluted)

5.74

6.41

5.03

3.00

Previous year''s figures have been re-grouped wherever necessary

FINANCIAL PERFORMANCE

o Standalone results

During the year under review, your Company has recorded revenue from operations (net) of Rs. I66.73 Crore as against Rs. I60.90 Crore in the previous year. The Net profit (after tax and extra ordinary items) for the financial year ended 3Ist March 20I7 was Rs.I2.37 Crore as against Rs. I4.I0 Crore in the previous year. The reduction in the net profit is mainly due to two factors. One of these is high input cost of major raw materials and the other is devaluation of sterling pound on account of Brexit which has impacted revenue and profits of our UK business.

o Consolidated Results

Your Company has recorded revenue from operations (net) of Rs. 202.25 Crore as against Rs. 2I0.05 Crore in the previous year. The net profit (after tax and extra ordinary items) for the financial year was Rs.I0.84 Crore, as against Rs. 6.6I Crore during the previous year recording an impressive increase over 60%. The improvement in the profitability could be achieved on account of improvement in our US operations through cost control measures.

B. BUSINESS DEVELOPMENT

Our Truly Indian Organic Ready to Eat product category bagged 2 silver awards at the prestigious SOFI Awards 20I7, held by Specialty Foods Association, USA which honours the best and the most innovative products in specialty food. Our products, Delhi Lentils (Dal Makhani) won silver award in the Savoury Appetizer, Soup & Stew category and Delhi Potatoes (Aloo Matar) received the Silver Award in the vegan products category. The general review of the major business developments during the year under review is as under:

Domestic Business :

The Company has launched four delicious dipping sauces in very attractive packaging. The same have received warm response from the consumers. The Company also invested in product sampling as a part of its brand promotion program and showcased its brand ‘ADF Soul'' at major supermarkets across the metro cities. However, the distribution ramp up did not pay off as expected due to lack of demand in general trade. The same was mainly attributable to lack of purchasing power on account of demonetization.

The Company is focused to strengthen its marketing and distribution network in the current fiscal year.

US Business :

The Company has moved all its production to a contract packer located in Ohio. The contract manufacturing would help the Company to reduce considerably the cost of operation & improve financial position. We expect an improvement in the US operations in the year to come.

We are looking forward to the launch of new and exciting products in the US market during the current fiscal year. International Business :

Brexit had an adverse impact on the Company''s business in the U.K. On account of the Brexit, the average realization of pound has gone down. Hence the revenue, EBITDA and profitability were affected.

‘Ashoka'' has launched a new range of Frozen products called ‘Dosa Wrap''. These Dosa Wraps are available in three exciting and delicious variants. The Company is all set to launch an exciting range of healthy snack items shortly.

C. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There are no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the Financial year of the Company to which the Financial Statements relate and the date of the report.

D. SHARE CAPITAL :

The paid up Equity Share Capital as on March 3I, 20I7 was Rs. 2I.20 Crore. During the year under review, the Company has not issued or allotted any securities. During the year, there was a reduction in the paid up equity share capital from Rs. 22 Crore to Rs. 2I.20 Crore on account of buyback of equity shares.

E. BUYBACK :

The Board of Directors in its meeting held on 27th July, 2016 approved buyback of Equity Shares at a price not exceeding Rs. I25 per equity share of Rs. I0/- each (‘Maximum Buyback Price'') for an aggregate amount not exceeding Rs.I8 Crore (‘Maximum Buyback Size''). The Company adopted the Open Market Route in accordance with the provisions contained in SEBI (Buyback of Securities) Regulations, I998 (including any statutory modification(s), or re-enactments for the time being in force).

The buyback commenced from August I0, 20I6 and closed on November I5, 20I6. The Company bought back 798,539 equity shares at an average price of Rs.I20.60 per share. The Company had thus spent Rs. 9,63,07,029/- (Rupees Nine Crore Sixty Three Lakhs Seven Thousand and Twenty Nine Only) excluding the transaction cost. Till closure of the buyback, the Company has utilized 53.50% of the maximum buyback size authorized for the buyback. In respect of the shares so extinguished, the Company has adjusted an amount of Rs. 79,85,390/- against paid up equity shares and Rs. 8,83,2I,639/- against securities premium.

F. DIVIDEND :

Your Directors are pleased to recommend a Dividend of Rs. 2.50 per equity share (i.e. @ 25%) for the financial year ended 3Ist March, 20I7. The dividend payout, if approved, will result in outflow of Rs. 709.87 Lakhs inclusive of Rs. I79.84 Lakhs on account of Dividends Distribution Tax.

G. TRANSFER TO RESERVES :

During the year your Company has not transferred any amount to General Reserves.

H. SUBSIDIARY COMPANIES :

Your Company has three subsidiaries viz. ADF Foods UK Ltd, Power Brands (Foods) Pvt. Ltd. and ADF Foods (India) Ltd. and two step down subsidiaries viz. ADF Holdings (USA) Ltd. and ADF Foods (USA) Ltd as on 3Ist March, 20I7.

M/s Power Brands (Foods) Pvt. Ltd, 99.99% Subsidiary of the Company, is undergoing Voluntary Liquidation vide Special resolution passed by the Members on 5th November, 20I2.

During the year, the Board of Directors reviewed the affairs of the subsidiaries in accordance with Section I29(3) of the Companies Act, 20I3. We have prepared consolidated financial statements of the Company which form part of the Annual Report. The salient features of the financial statement of the subsidiaries are set out in the prescribed form AOC-1 which is attached to the financial statements. The statement also provides the details of performance and financial position of the Company''s subsidiaries.

During the year under review Company did not have any JVs and/or Associate companies.

The financial statements of each of the subsidiaries may also be accessed on the Company''s website www.adf-foods.com.

I. BOARD OF DIRECTORS AND COMMITTEES : o Directors

In accordance with the provisions of Section I52 of the Companies Act, 20I3, Mr. Ashok H. Thakkar, Whole Time Director (Chairman), retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment.

During the year, Mr. Ashok H. Thakkar, Chairman of the Company was appointed as the Whole Time Director for a period of one year from Ist October, 20I6, Mr. Bimal R Thakkar , Managing Director to hold office as the Managing Director for a period of one year from Ist October, 20I6, and Mr. Bhavesh R. Thakkar, Executive Director to hold office as a Whole Time Director for a period of one year from Ist October, 20I6.

The Board of Directors has appointed Mr. Naresh L. Kothari as an Additional Director of the Company in the category of Independent Director w.e.f. I2th May, 20I7.

The brief particulars of Mr. Naresh L. Kothari, for which approval of Members for his appointment is sought have been provided in the notice of the 27th Annual General Meeting of the Company pursuant to Regulation 25 of Securities & Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 20I5.

- Relationship Between Directors Inter-SE

The details of Inter-se relationship between Executive Directors are given in the Corporate Governance Report.

- Meetings of Board of Directors

Five meetings of the Board of Directors of the Company were held during the year. For detail of the meetings, please refer to Clause II E of the Corporate Governance Report, which forms part of this Report.

- Committees of the Board

The Company has duly constituted the Committees required under the Companies Act, 20I3 read with applicable Rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 20I5.

The Board of Directors of the Company has formed an Audit Committee which consist of the Independent Directors viz. Mr. Nipun C. Shah as the Chairman, Mr. Yasir J. Varawala, Mr. Viren A. Merchant and Mr. Ravinder Kumar Jain.

All the recommendations of the Audit Committee were accepted by the Board during the financial year under review.

The other Committees of the Board are:

i) Nomination and Remuneration Committee

ii) Stakeholders Relationship / Shareholders Grievance Committee

iii) Corporate Social Responsibility Committee

iv) Share Transfer Committee

The details with respect to the composition, powers, roles, terms of reference, Meetings held and attendance of the members at such Meetings of the relevant Committees are provided in the Report on Corporate Governance of the Company which forms part of this Annual Report.

- DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section I34(5) of the Companies Act, 20I3:

a) that in the preparation of the annual financial statements for the financial year ended March 3I, 20I7, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in Note 2 of the Notes to the Standalone Financial Statements and in Note 3 of the Notes to the Consolidated Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 20I3 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

- Independent Directors’ Declaration :

The Independent Directors have submitted a declaration that each of them meets the criteria of independence as provided in Sub-Section (6) of Section I49 of the Companies Act, 20I3 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 20I5.

- Meeting of Independent Directors

During the year under review the meeting of the Independent Directors was held on 3rd March, 20I7. Subsequently additional meeting of Independent Directors was held on 20th July, 20I7. The performance of the Board as a whole, the Chairman and the non Independent Directors was reviewed in the said meetings.

- Performance Evaluation of the Board

Pursuant to the provisions of the Companies Act, 2013 and Regulation I 7 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 20I5, the Board has carried out an annual performance evaluation of its own performance, of its Committees and the directors individually.

The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

- Familiarization Program for Independent Directors

The Independent directors of the Company are eminent personalities having wide experience in the field of business, finance, industry and law. Their presence on the Board has been advantageous and fruitful in taking business decisions. Independent Directors are appointed as per the Governance guidelines of the Company, with management expertise and wide range of experience. The Directors appointed by the Board are given induction and orientation with respect to the Company''s vision, strategic direction, core values, including ethics, corporate governance practices, financial matters and business operations by having one-to-one meeting with the Managing Director. The new Board members are also requested to access the necessary documents / brochures, Annual Reports and policies available on the Company''s website www.adf-foods.com to enable them to familiarize with the Company''s procedures and practices. Periodic presentations are made by the Senior Management, Statutory and Internal Auditors at the Board/Committee meetings on business and performance updates of the Company, business risks and its mitigation strategy, impact of regulatory changes on strategy etc. Updates on relevant statutory changes encompassing important laws are regularly intimated to the Independent directors.

Familiarization program of the Company as specified under Regulation 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is displayed on the Company''s website www.adf-foods.com and is available under the we blink: http://www.adf-foods.com/wp-content/uploads/2017/06/ADF-Familiarisation-Program-%E2%80%93-F.Y.-20I6-20I7.pdf

- Policy of Directors’ Appointment and Remuneration

In accordance with the provisions of Section I34(3)(e) of the Companies Act, 20I3 ("the Act”) read with Section I78(3) of the Act and The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 20I5, the Company has formulated policy on Directors'' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters, which is covered in the Corporate Governance Report which forms part of this Report. Further, information about elements of remuneration package of individual directors is provided in the extract of Annual Return as provided under Section 92(3) of the Act at Annexure-V in the prescribed form MGT-9 and forms part of this Report.

J. CASH FLOW STATEMENT :

The Cash Flow Statement pursuant to Regulation 34(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 20I5 is annexed to this Report.

K. CONSOLIDATED ACCOUNTS :

In compliance with Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 20I5 and in accordance with the requirements of Accounting Standards AS-2I prescribed by the Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries are annexed to this Report.

L. GOVERNANCE :

- Report on Corporate Governance

In compliance with the requirements of Regulation 34(3) and Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 20I5, a separate report on Corporate Governance along with Auditors'' certificate on its compliance has been provided elsewhere in this Annual Report which forms part of this report.

Report on Management Discussion and Analysis is provided in separate section and forms part of this Annual Report.

Various information required to be disclosed under the Companies Act, 20I3 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 20I5 is set out in the Annexure-I and forms part of this report.

-Vigil Mechanism/Whistle Blower Policy

The Company has adopted a Vigil Mechanism/‘Whistle Blower Policy'' pursuant to Section I77 of the Companies Act, 20I3 read with Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 20I5 with an objective to conduct its affairs in a fair and transparent manner and by adopting the highest standards of professionalism, honesty, integrity and ethical behavior.

With the adoption of this policy, the Company has put in place a mechanism wherein the Employees are free to report to the management any actual or possible violation of the Principles or any other unlawful or unethical or improper practice or act, or activity of the Company. Under the Whistle Blower Policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. No personnel has been denied access to the Management & Audit Committee. The mechanism is reviewed by the Audit Committee of the Company in accordance with the SEBI (LODR) Regulations, 20I5. The Company did not receive any such complaints during the year.

Whistle Blower Policy of the Company is displayed on the Company''s website www.adf-foods.com and is available under the we blink http://www.adf-foods.com/wp-content/uploads/20I7/03/ADF-Whistle-Blower-policy.pdf

- Nomination & Remuneration Policy :

The Nomination & Remuneration policy is attached as Annexure II to the Board''s Report forming part of the Annual Report and is also available on the website of the Company www.adf-foods.com

- Risk Management Framework

The Company has adopted Business Risk Management System (BRMS) for mitigating various risks associated and identified across all levels within the organization. This model is based on ISO 3I000. BRMS enables the management to review the business risks on periodical basis and to bring the high risk areas to the immediate attention of the Board.

- Internal Financial Controls

Your Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. Review of the internal financial controls environment of the Company was undertaken during the year under review which covered verification of entity level control, process level controls and IT controls, review of key business processes and analysis of risk control matrices, etc. During the period under review, effectiveness of internal financial controls was evaluated. Reasonable Financial Controls are operative for all the business activities of the Company and no material weakness in the design or operation of any control was observed.

- Other Policies under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

In accordance with the provisions of Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 20I5, the Company has framed Policy for determination of Materiality for disclosure of events or information. The same has been hosted on the website of the Company at the link: http://www.adf-foods.com/wp-content/uploads/20I6/0I/PQLICY.Material-events.pdf

The details of the other policies of the Company can be obtained using the following weblinks :

Sr

No

Policy

Link

I

Code of Conduct

http://www.adf-foods.com/wp-content/uploads/20I6/I2/ADF-Code-of-Conduct.

pdf

2

Nomination and

http://www.adf-foods.com/wp-content/uploads/20I6/I2/NOMINATION-

Remuneration Policy

REMUNERATION-POLICY.pdf

3

Insider Trading Code

http://www.adf-foods.com/wp-content/uploads/20I7/07/ADF-Insider-Trading-

20I5

Code.pdf

4

Whistle Blower Policy

http://www.adf-foods.com/wp-content/uploads/20I7/03/ADF-Whistle-Blower-

policy.pdf

5

Related Party

http://www.adf-foods.com/wp-content/uploads/20I7/03/ADF-Related-Party-

Transactions Policy

Transactions-Policy.pdf

6

Material Subsidiary

http://www.adf-foods.com/wp-content/uploads/20I7/06/Policy-for-determinig-the-

Policy

Material-Subsidiary.pdf

7

CSR Policy

http://www.adf-foods.com/wp-content/uploads/20I6/0I/CSR-Policy.pdf

8

Familiarization

http://www.adf-foods.com/wp-content/uploads/20I7/06/ADF-Familiarisation-

Program

Program-%E2%80%93-F.Y-20I6-20I7.pdf

9

Board Diversity Policy

http://www.adf-foods.com/wp-content/uploads/20I6/0I/ADF-Board-Diversity-

Policy.pdf

I0

Sexual Harassment

http://www.adf-foods.com/wp-content/uploads/20I6/0I/Sexualharasspolicy.pdf

policy

II

Preservation of

http://www.adf-foods.com/wp-content/uploads/20I6/0I/POLICY.

Documents

PRESERVATION-OF-DOCUMENTS.pdf

I2

Archival Policy

http://www.adf-foods.com/wp-content/uploads/20I6/I2/ADF-Archival-Policy.pdf

o Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has a policy on Prevention of Sexual Harassment of Women at Workplace pursuant to the provisions of The Sexual Harassment of Woman at Workplace (Prevention, Prohibition & Redressal) Act 20I3. The Company did not receive any such complaints during the year.

The Prevention of Sexual Harassment Policy of the Company is displayed on the Company''s website www. adf-foods.com and is available under the we blink: http://www.adf-foods.com/wp-content/uploads/2016/01 / Sexualharasspolicy.pdf.

M. PARTICULARS OF EMPLOYEES :

o Key Managerial Personnel (KMP)

Mr. Ashok H. Thakkar, Chairman, Mr. Bimal R. Thakkar, Managing Director & CEO, Mr. Bhavesh R. Thakkar, Executive Director & CFO and Ms. Shalaka Ovalekar, Company Secretary & Compliance Officer are the KMPs of the Company.

During the period under review there was no change in KMPs. o Employees

There were no employees drawing remuneration exceeding the monetary ceiling of Rs. I.02 Crores per annum or Rs. 8.50 Lakhs per month during the financial year 20I6-I7, if employed for a part of the year prescribed under the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 20I4.

The information required under Companies (Appointment and Remuneration of Managerial Personnel) Rules, 20I4 is given at Annexure I that forms part of the Board''s Report.

- Human Resource and Employee Relations

The Company has always perceived its Manpower as its biggest strength. The emphasis was on grooming in-house talent enabling them to take higher responsibilities. The Employee relations continue to be cordial at all the divisions of the Company. Your Directors place on record their deep appreciation for exemplary contribution of the employees at all levels. Their dedicated efforts and enthusiasm have been integral to your Company''s steady performance.

N. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 of the Companies Act, 2013 :

The Loans, Guarantees and investments covered under Section I86 of the Companies Act, 20I3 form part of the Notes to the Financial Statements provided in this Annual Report.

O. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES :

All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons, subsidiary companies and other related parties which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee and also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on yearly basis for the transactions which are of a foreseen and repetitive nature. A statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website.

Pursuant to requirements of Regulation I6(I)(c) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 20I5, Company has formulated a ‘Policy on determining Material Subsidiaries''.

The Policy is posted on website of the Company viz. www.adf-foods.com.

The web link of the said Policy is http://www.adf-foods.com/wp-content/uploads/20I7/06/Policy-for-determinig-the-Material-Subsidiary.pdf

P. PUBLIC DEPOSITS :

Your Company has not accepted any deposit within the meaning of Section 73 and 76 of the Companies Act, 20I3 and the rules made there under during the financial year 20I6-I7.

Q. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND :

Pursuant to erstwhile Section 205A and 205C of the Companies Act, I956, dividends pertaining to the financial year 2008-09 (Final) amounting to Rs. 8,33,060/- which remained unpaid or unclaimed for a period of 7 years were transferred by the Company to the Investor Education and Protection Fund during the financial year under review.

Transfer of Equity Shares to the IEPF Suspense Account -

Pursuant to the provisions of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 20I6 notified by the Ministry of Corporate Affairs (MCA) effective from September 7, 20I6 all shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more would get transferred to the Demat Account of IEPF Authority. The said Rules have also laid down the procedure for transfer of the shares to IEPF Authority.

Accordingly, the Company has intimated all the concerned shareholders via letter dated 30th November, 20I6 to claim their unclaimed/unpaid dividends. The Company had also published the notices to the said effect in the Financial Express (English & Gujarati editions) on 6th December, 20I6 and I2th May, 20I7 respectively. The Company has also uploaded on its website the list of the shareholders whose dividend has remained unpaid/unclaimed for seven consecutive years or more since the F.Y. 2008-09. The same can be accessed by following the we blink http://www.adf-foods.com/wp-content/uploads/20I7/07/Transfer-of-Equity-Shares-to-the-IEPF-Suspense-Account-Shareholder-List-20.07.20I7.pdf.

The MCA had notified the due date of transfer as 3Ist May, 20I7.

The MCA vide its latest General Circular no. 06/20I7 dated 29.05.20I7 has stated that the revised due date of transfer /transmittal of shares shall be notified soon. Accordingly the Company will initiate the necessary action.

R. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES :

The Company has a Corporate Social Responsibility (CSR) policy and set up CSR Committee comprising of three members viz. Mr. Viren Merchant, Independent Director, Mr. Nipun Shah, Independent Director and Mr. Bimal R. Thakkar, Managing Director.

During the Financial Year 20I6-I7 the Company was required to spend an amount of Rs. 56.73 Lakhs on the CSR activities (including Rs. I7.24 Lakhs for Financial Year 20I5-I6) pursuant to Section I35 of the Companies Act, 20I3. During the year, the Company had undertaken various meaningful CSR activities in the areas such as educational aid for underprivileged and disabled, health, eradication of hunger and poverty, animal and environment protection etc. and the amount spent on these activities was Rs. 54.97 Lakhs. The amount of Rs. I.76 Lakhs remained unspent as few CSR activities that were planned could not materialize during the said financial year on account of administrative delays on part of a N.G.O. The Company is committed to spend the remaining CSR funds during the Financial year 20I7-I8 along with other CSR activities.

The CSR Policy of the Company and the relevant report as per the Companies (Corporate Social Responsibility Policy) Rules, 20I4 have been disclosed in Annexure-IV to this Report.

S. EXTRACT OF ANNUAL RETURN :

Pursuant to sub-section 3 (a) of Section I34 and sub-section (3) of Section 92 of the Companies Act, 20I3, read with Rule I2 of the Companies (Management and Administration) Rules, 20I4, an extract of the Annual Return as at 3Ist March, 20I7 forms part of this report as Annexure V

T. AUDITORS AND THEIR REPORT :

- Statutory Auditors

For the financial year 20I7-I8, it is proposed to ratify appointment of M/s. Kalyaniwalla & Mistry LLP Chartered Accountants, Mumbai (Registration no. 104607W/W100166) as Statutory Auditors subject to approval of the Members in the ensuing Annual General Meeting.

The Company has received letters from the Auditors to the effect that their re-appointment, if made, would be within the prescribed limits under Section I4I(3)(g) of the Companies Act, 20I3 and that they are not disqualified for re-appointment.

There are no qualifications, reservations or adverse remarks contained, in the Auditors Report and therefore there are no further explanations to be provided for in this report.

- Details with respect to fraud reported by Auditors

During the year under review there was no fraud reported by Auditors. o Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 20I3 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 20I4, the Company has appointed M/s. Keyul M. Dedhia & Associates, Company Secretary in Practice (C.P No. 86I8), to undertake the Secretarial Audit of the Company for the Financial Year 20I6-I7. The Secretarial Audit Report is annexed herewith as "Annexure III”. There are no qualifications reservations or adverse remarks contained, in the said Report. However the Secretarial Auditors have stated the following observation in their Report:

The Company has an unspent amount during the year in the amount to be spent towards Corporate Social Responsibility.

The explanation for the above observation is mentioned above, under the head Corporate Social Responsibility Initiative.

- Internal Audit

M/s. Suresh Gandhi & Co., Chartered Accountants, Surat (Registration no. II49I7W) have been associated with your Company as Internal Auditor for Nadiad Division.

For the financial year 20I7-I8 in place of Company''s outgoing Internal Auditors M/s S M S R & Co LLP Chartered Accountants, Mumbai, (Registration no. I 10592W/W100094) M/s. B.K. Khare & Co., Chartered Accountant, Mumbai (Registration no. I05I02W) have been appointed as Internal Auditors for Mumbai and Nasik divisions of the Company.

The Audit Committee of the Board of Directors, Statutory Auditors and the Management are periodically apprised of the Internal Audit findings and corrective actions taken.

U. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS :

During the Financial Year under review, no significant and material orders were passed by the regulators or courts or tribunals that would impact the going concern status of the Company and its future operations.

V. LISTING OF SHARES :

The Company''s shares are actively traded on BSE Limited and the National Stock Exchange of India Limited

W. TECHNOLOGY AND QUALITY :

Your Company is committed to deliver highest quality of products by continuous improvement in terms of product quality and achieving customer satisfaction and delight. Your Company has already obtained various quality certifications such as the internationally recognized BRC (British Retail Consortium) Global Standard - Foods, ISO 22000/ HACCP & ISO 900I: 2000 certifications for its plants located at Nadiad, Gujarat and Nashik, Maharashtra.

X. ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE :

Information required under Section I34(3)(m) of the Companies Act, 20I3 read with the Rule 8 of The Companies (Accounts) Rules, 20I4 is appended hereto and forms part of this report at Annexure VII.

Y. CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT :

The Directors and members of Senior Management have affirmed compliance with the Code of Conduct for Directors and Senior Management. A declaration to this effect has been signed by Mr. Bimal R. Thakkar, Managing Director and forms part of the Annual Report.

Z. ACKNOWLEDGEMENTS :

Your Directors wish to express their sincere appreciation of the excellent support and co-operation extended by the Company''s shareholders, customers, bankers, suppliers and all other stakeholders.

For and on Behalf of the Board of Directors

Bimal R. Thakkar Bhavesh R. Thakkar

Managing Director Executive Director

Mumbai, 20th July, 20I7 DIN: 00087404 DIN: 00939805

Regd. Office :

83/86 GIDC Industrial Estate, Nadiad 38700I,

Gujarat Tel.: 0268-255I38I/2

Fax. : 0268-2565068;

E-mail: info@adf-foods.com;

website: www.adf-foods.com


Mar 31, 2015

Dear Shareholders,

The Directors have pleasure in presenting the Twenty Fifth Annual Report together with the Audited Financial Statements for the year ended 31st March 2015.

FINANCIAL RESULTS

The performance of the Company for the financial year ended 31st March 2015 is summarized below:

(Rs. in Lakhs)

Particular s 2014-15 2013-14

Net sales/Income from operation 14,945.17 14,181.40

Other Income 689.48 399.23

Total Income 15,634.65 14,580.63

Less: Total expenditure

Manufacturing & Other Expenses 12,905.73 11,934.74

Depreciation and amortization 732.37 732.72

Financial Expenses 95.18 113.65

Profit before exceptional and extraordinary items and tax 1,901.37 1,799.52

Exceptional Items 174.63 -

Profit before tax 2,076.00 1,799.52

Provision for taxation 538.67 468.32

Deferred tax Assets/ (Liabilities) 77.07 86.32

Net Profit ( ) / Loss (-) 1,460.26 1,244.88

Prior Period adjustments (Net off) - -

Net Profit( ) / Loss(-) 1,460.26 1,244.88

Balance brought forward 7,364.76 6,595.96

Adjustment in carrying amount of depreciation as per Part C of Schedule (91.73) - II of the Companies Act, 2013

Amount available for appropriation 8,733.29 7,840.84

Dividend declared/ paid 262.82 330.00

Tax on dividend 67.18 56.08

Transfer to General Reserve 125.00 90.00

Balance Carried to the Balance Sheet 8,278.29 7,364.76

EPS (Basic) 6.64 5.66

EPS (Diluted) 6.64 5.66

Previous year's figures have been re-grouped wherever necessary

FINANCIAL PERFORMANCE

Standalone results

During the year under review, your Company has recorded revenue from operations (net) of Rs. 149.45 Crore as against Rs. 141.81 Crore in the previous year. The Net profit (after tax and extra ordinary items) for the financial year ended 31st March 2015 is Rs. 14.60 crore as against Rs. 12.45 crore in the previous year recording an increase of 17%.

Consolidated Results

Your Company has recorded revenue from operations (net) of Rs. 203.80 Crore as against Rs. 207.64 Crore in the previous year. Despite of the revenue remaining almost at the same level as that of the previous year, the net profit (after tax and extra ordinary items) for the financial year grew by 56% to Rs. 8.84 Crore, as against Rs. 5.65 Crore during the previous year.

DIVIDEND

Your Directors are pleased to recommend a Dividend of Rs. 1.5 per share (i.e. @ 15 %) for the year ended 31st March 2015. The dividend payout, if approved, will result in outflow of Rs. 330.00 Lakhs inclusive of Rs. 67.18 Lakhs on account of Dividend Distribution Tax.

TRANSFERRED TO RESERVES

During the year, Rs. 125 Lakhs were transferred to General Reserves.

BUSINESS DEVELOPMENT

The Domestic market:

During the year the company took a major step of rebranding of the Company's brand ADF SOUL with a better look of the logo and more appealing packaging designs. The new products launched under this brand were the South Indian Style Pickles and Cooking Pastes – packed in user-friendly laminated tubes. These products have been well received by the consumers & are fast gaining shelf space amongst the top retail chains in India. The new product launch was supported by advertising in retail stores, outdoor campaigns, in-store branding, promotions, and presence in social media. The Company is gearing up to launch a range of exciting new products and expand its footprints in new markets in the forthcoming year.

During the year the Company's new manufacturing plant at Nadiad has become fully functional and the same would increase manufacturing capacity of the company's core products such as pickles and pastes.

The US Operations :

The Company continues to develop the presence of its core brands viz. ADF SOUL, Nate's and PJ's and solidify its distribution channels across the US markets. During the year, under review the Company developed and launched a range of new products including a very innovative product called Nate's Mediterranean Bites that has received an overwhelming response from the consumers. The company has been successful in doing new listing in major supermarket chains and natural grocery stores across the USA. Also several exciting and innovative new products are in pipeline under the Company's brand umbrella.

International business :

Apart from India and USA the Company's products are being sold in over 45 countries across the Globe. During the year under review, the company's leading International brands Ashoka , Aeroplane and Camel underwent packaging revamp.

The new product introductions under the Ashoka brand were Mini Samosas, Snacks, Kathi Rolls in the frozen range and Chutneys made with Olive Oil in the dry range. There were new introductions under Camel and Aeroplane brands like the Cooking Pastes, and South Indian Style Pickles, North Indian Pickles and Sauces.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the Financial year of the Company to which the Financial Statements relate and the date of the report.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(5) of the Companies Act, 2013:

a. that in the preparation of the annual financial statements for the financial year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. that such accounting policies as mentioned in Note 27(2) of the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2015 was Rs. 22 crore. During the year under review, the Company has neither issued shares with differential voting rights nor granted stock options nor sweat equity.

LISTING OF SHARES

The Company's shares are actively traded on BSE Limited (BSEL) and The National Stock Exchange of India Limited (NSEIL).

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Messrs Keyul M. Dedhia & Associates, Company Secretary in Practice (C.P. No. 8618) , to undertake the Secretarial Audit of the Company for the Financial Year 2014-15. The Secretarial Audit Report is annexed herewith as "Annexure II". There are no qualifications contained, in the said Report. However the Secretarial Auditors have stated the following observation in their Report :

The Company has an unspent amount during the year in the amount to be spend towards Corporate Social Responsibility.

The explanation for the above observation is mentioned below under the Head CORPORATE SOCIAL RESPONSIBILITY INITIATIVES.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, of its committees and the directors individually.

The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure I V.

CORPORATE GOVERNANCE

In compliance with the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, a separate report on Corporate Governance along with Auditors' certificate on its compliance has been provided elsewhere in this Annual Report.

Report on Management Discussion and Analysis is provided in separate section and forms part of this Annual Report.

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Bimal R. Thakkar, Director, retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment.

The Board of Directors has appointed Ms. Anjali Seth as an Additional Director of the Company in the category of Woman / Independent Director with effect from 10th March, 2015.

The brief particulars of Ms. Anjali Seth , for which approval of members for her appointment is sought, have been provided in the Notice of the Twenty Fifth Annual General Meeting pursuant to the Clause 49 of the Listing Agreement relating to the Corporate Governance.

During the year, Mr. Ashok H. Thakkar, Chairman of the Company was appointed for a period of one year from 1st October, 2014, Mr. Bimal R. Thakkar as Managing Director for a period of one year from 1st October, 2014 and Mr. Bhavesh R. Thakkar as Executive Director for a period of one year from 1st October, 2014.

AUDITORS AND THEIR REPORT

In the previous Annual General Meeting M/s. D.P. Ghevaria & Co. , Chartered Accountants, Mumbai were appointed as joint Statutory Auditors of the Company for the F.Y. 2014-15. Prior to the said appointment M/s. D.P. Ghevaria & Co. had served the Company as Statutory Auditors for more than 5 consecutive years. Therefore, pursuant to Section 139 of the Companies Act, 2013 and the Rules framed thereunder, M/s. D. P. Ghevaria & Co., not being entitled for re-appointment, ceases to be the Statutory Auditors of the Company.

For the financial year 2015-16, it is proposed to ratify appointment of M/s. Kalyaniwalla & Mistry, Chartered Accountants, Mumbai as Statutory Auditors subject to approval of members in the ensuing Annual General Meeting.

The Company has received letters from the Auditors to the effect that their appointment/re-appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for appointment/re-appointment.

There are no qualifications contained, in the Auditors Report and therefore there are no further explanations to be provided for in this report.

INTERNAL AUDIT

M/s. Suresh Gandhi & Associates, Surat have been associated with your Company as internal auditor for Gujarat location.

During the year, on account of resignation of M/s. Pipalia Singhal & Associates, Chartered Accountants, Mumbai, M/s. S M S R & Co., Chartered Accountants, Mumbai have been appointed as the internal Auditors for Mumbai and Nasik locations of the Company.

The Audit Committee of the Board of Directors, Statutory Auditors and the Management are periodically apprised of the Internal Audit findings and corrective actions taken.

SEXUAL HARASSMENT POLICY

During the year the Company has formed the policy on Sexual Harassment of Women at Workplace pursuant to the provisions of Sexual Harassment of Woman at Workplace (Prevention, Prohibition & Redressal) Act 2013. The company did not receive any such complaints during the year.

Sexual Harassment Policy of the Company is displayed on the Company's website www.adf-foods.com and is available under the weblink: http://www.adf-foods.com/pdfs/Sexualharasspolicy.pdf.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The company has formulated Corporate Social Responsibility (CSR) policy and set up CSR Committee comprising of three members viz. Mr. Viren Merchant, Independent Director, Mr. Nipun Shah, Independent Director and Mr. Bimal R. Thakkar, Managing Director.

During the FY 2014-15 the Company was required to spend an amount of Rs. 31.83 Lakhs on the CSR activities pursuant to Section 135 of the Companies Act, 2013. The Company was keen on undertaking the CSR activities in Nasik and Nadiad where the Company's plants have been situated. The Company identified certain concrete projects and was in the talks with the concerned Government Authorities to start the CSR activity. However pending certain information and clarifications from the authorities the activities could not be undertaken in the FY 2014-15. However, since April 2015, the Company has started construction work of household toilets in Nadiad District that forms part of the 'Swatchh Bharat Mission' initiated by the Government of India . Simultaneously the company has been also planning to undertake CSR activities in the areas of primary education, women empowerment and conservation of the natural resources.

The CSR Policy of the Company and the relevant report as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been disclosed in Annexure-III to this Report.

TECHNOLOGY AND QUALITY

Your Company is committed to deliver highest quality of products by continuous improvement in terms of product quality and achieving customer satisfaction and delight. Your Company has already obtained various quality certifications such as the Internationally recognized BRC (British Retail Consortium) Global Standard – Foods, ISO 22000/ HACCP & ISO 9001: 2000 certifications for its plants located at Nadiad, Gujarat and Nashik, Maharashtra.

ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

Information required under Section 134 (3) (m) of the Companies Act, 2013 read with the Rule 8 of The Companies (Accounts) Rules, 2014 is appended hereto at Annexure VI.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 124 of the Companies Act, 2013 (corresponding to Section 205 A and 205C of the Companies Act, 1956), dividends pertaining to the financial year 2006-07 (Interim) & (Final) amounting to Rs. 6,76,523/- and Rs. 6,00,396/- respectively and pertaining to the financial year 2007-08 (Interim ) amounting to Rs. 5,71,806/- which remained unpaid or unclaimed for a period of 7 years were transferred by the Company to the Investor Education and Protection Fund.

PARTICULARS OF EMPLOYEES

There are no employees drawing remuneration exceeding the monetary ceiling of Rs. 60 lakhs or more per annum or Rs. 5 lakhs or more per month, if employed for a part of the year prescribed under provisions of Section 197 of the Companies Act, 2013 and the Rules made thereunder.

SUBSIDIARY COMPANIES

Your Company has three subsidiaries namely ADF Foods UK Ltd, Power Brands (Foods) Pvt. Ltd.and ADF Foods (India) Ltd. and two step down subsidiaries viz. ADF Holdings (USA) Ltd. and ADF Foods (USA) Ltd.

M/s Power Brands (Foods) Pvt. Ltd, 99.99% Subsidiary of the Company, is undergoing Voluntary Liquidation vide Special resolution passed by the Members on 5th November, 2012.

Shareholders interested in obtaining a copy of the audited annual accounts of the subsidiary companies may write to the Company Secretary.

In terms of proviso to sub section (3) of Section 129 of the Act, the salient features of the financial statement of the subsidiaries are set out in the prescribed form AOC-1 and the same is attached to the financial statements.

CASH FLOW STATEMENT

The Cash Flow Statement pursuant to Clause 32 of the Listing agreement is annexed to this Report.

CONSOLIDATED ACCOUNTS

In compliance with Clause 32 of the Listing Agreement with the Stock Exchanges and in accordance with the requirements of Accounting Standards AS-21 prescribed by the Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries are annexed to this Report.

CORPORATE GOVERNANCE REPORT, MANAGEMENT DISCUSSION & ANALYSIS AND OTHER INFORMATION REQUIRED UNDER THE COMPANIES ACT, 2013 AND LISTING AGREEMENT

As per Clause 49 of the listing agreement entered into with the stock exchanges, Corporate Governance Report with Auditors' certificate thereon and Management Discussion and Analysis report are attached and form part of this report.

Various information required to be disclosed under the Act and the Listing Agreement is set out in the Annexure-I and forms part of this report.

DEPOSIT

Your Company has not accepted any deposit within the meaning of Section 73 of the Companies Act, 2013 during the financial year 2014-15.

HUMAN RESOURCE AND EMPLOYEE RELATIONS

The Company has always perceived its Manpower as its biggest strength. The emphasis was on grooming in-house talent enabling them to take higher responsibilities. The Employee relations continue to be cordial at all the divisions of the Company. Your Directors place on record their deep appreciation for exemplary contribution of the employees at all levels. Their dedicated efforts and enthusiasm have been integral to your Company's steady performance.

ACKNOWLEDGEMENTS

Your Directors wish to express their sincere appreciation of the excellent support and co-operation extended by the Company's shareholders, customers, bankers, suppliers and all other stakeholders.

For and on Behalf of the Board of Directors

Ashok H. Thakkar

Chairman

DIN: 00087465

Mumbai, 12th August, 2015

Regd. Office :

83/86 GIDC Industrial Estate,

Nadiad 387001, Gujarat

Tel.: 0268-2551381/2 Fax. : 0268-2565068;

E-mail: info@adf-foods.com; website: www.adf-foods.com

CIN: L15400GJ1990PLC014265


Mar 31, 2014

Dear Shareholders,

The Directors have pleasure in presenting the Twenty Fourth Annual Report together with the Audited Financial Statements for the year ended 31st March 2014.

FINANCIAL RESULTS

The performance of the Company for the financial year ended 31st March 2014 is summarized below:

(Rs. in Lakhs)

Particulars 2013-14 2012-13

Net sales/Income from operation 14,181.40 12,969.15 Other Income 399.23 340.36 Total Income 14,580.63 13,309.51

Less: Total expenditure

Manufacturing & Other Expenses 11,934.74 11,478.58

Depreciation 732.72 414.56

Financial Expenses 113.65 162.57

Profit from ordinary activities after finance 1,799.52 1,253.80 cost but before exceptional items

Exceptional Items - 719.75

Profit before tax 1,799.52 1,973.55

Provision for taxation 468.32 289.02

Deferred tax Assets/ (Liabilities) 86.32 I25.96

Net Profit ( ) / Loss (-) 1,244.88 1,558.57

Prior Period adjustments (Net off) - -

Net Profit( ) / Loss(-) 1,244.88 1558.57

Balance brought forward 6,595.96 5503.49

Dividend declared/ paid 330.00 330.00

Tax on dividend 56.08 56.I0

Transfer to General Reserve 90.00 80.00

Balance Carried to the Balance Sheet 7,364.76 6,595.96

EPS (Basic) 5.66 7.59

EPS (Diluted) 5.66 7.59

Previous year''s figures have been re-grouped wherever necessary

FINANCIAL PERFORMANCE

Standalone results

During the year under review, your Company has recorded revenue from operations (net) of Rs. 141.81 Crore as against Rs. 129.69 Crore in the previous year recording an increase of 9% over the previous year. The Net profit (after tax and extra ordinary items) for the financial year ended 31st March 2014 is Rs. 12.44 crore as against Rs. 15.58 Crore in the previous year. Since the Company had an extraordinary income of Rs. 7.20 crores in the previous financial year, the Profit after Tax for the current year is not comparable with that of the last year.

Consolidated Results

Your Company''s revenue from operations (net) for the year under review grew by 16 % to Rs 207.46 Crores as against Rs. 178.95 Crores in the previous year. The net profit (after tax and extra ordinary items) for the year is Rs. 4.77 crores, as against Rs. 13.78 Crores during the previous year . As stated in the above paragraph, the Profit after Tax for the current year is not comparable with that of the previous year on account of extraordinary income in the previous year. Further as the domestic business and the USA business of the Company are on the investment mode, the profitability on a consolidated basis may appear restrained.

DIVIDEND

Your Directors are pleased to recommend a Dividend of Rs. 1.5 per share (i.e. @ 15 %) for the year ended 31st March 2014. The dividend payout, if approved, will result in outflow of Rs. 386 Lakhs inclusive of Rs. 56.08 Lakhs on account of Dividend Distribution Tax.

BUSINESS DEVELOPMENT

The Domestic market:

This year, your Company''s domestic business has grown by about 20% over last fiscal. This is a result of our continuous efforts to bring in constant innovation into our products range catering the market taste buds. Our focus on consumer satisfaction and distribution has helped us further strengthen our portfolio. ADF SOUL'' brand''s presence can now be seen in over 30,000 grocery stores across markets. The Company has successfully covered certain cities in the West, South and North regions of India. The feedback on the products has been very encouraging. The Sales team is closely monitoring the market and feedback from the consumers.

Your Company is also excited about re-branding its Brand ADF SOUL'' and launching its new look by end of this year. The approaching months will witness introduction of exciting products in Pickles and Pastes category. The re-branding requires heavy investment in the areas of sales promotion, advertisements and other marketing activities . The Company will continue to invest in additional manpower as well as upgrading the core R&D function .

Expansions :

Your Company''s Greenfield project in Nadiad shall become operational during the current financial year. The same would increase manufacturing capacity of the Company''s core products such as pickles, pastes and chutneys.

U.S.A Operations:

Your Company''s U.S.A business has grown by l6% over last fiscal. The U.S.A markets continues to offer us great scope for our products. The Company is confident of generating better results in the years to come.

During the year, the new burritos introduced last year were well received by the customers. This year the Company is planning to introduce a range of new products under its Nate''s and PJ''s brands and to do new listings in major supermarket chains and natural grocery stores all across U.S.A.

The Company maintains its strategic focus on improvement in the product mix, product rationalization, greater marketing synergies and cost-efficiency throughout the organization.

Like past years, this year also the Company participated in the Gulf Food show held in Dubai and received a favorable response.

TECHNOLOGY AND QUALITY

Your Company is committed to deliver highest quality of products by continuous improvement in terms of product quality and achieving customer satisfaction and delight. Your Company has already obtained various quality certifications such as the

Internationally recognized BRC (British Retail Consortium) Global Standard - Foods, ISO 22000/ HACCR & ISO 900I: 2000 certifications for its plants located at Nadiad, Gujarat and Nashik, Maharashtra.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Director''s Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) 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 true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for the year under review;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) that the Directors have prepared the accounts for the financial year ended 31st March 2014 on a ''going concern'' basis. LISTING OF SHARES :

The Company''s shares are actively traded on BSE Limited (BSE) and National Stock Exchange of India Limited (NSEIL). CORPORATE GOVERNANCE

In compliance with the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, a separate report on Corporate Governance along with Auditors'' certificate on its compliance has been provided elsewhere in this Annual Report.

Report on Management Discussion and Analysis is provided in separate section and forms part of this Annual Report.

DIRECTORS AND SENIOR MANAGEMENT

It is with deep regret that we inform you of the sad demise of our Chairman Mr. Ramesh H Thakkar on the 24th December, 2013. The Directors place on record their deep appreciation for his valuable guidance and assistance received during the tenure as a Promoter Director of the Company.

Consequent to death of Mr. Ramesh H Thakkar, Mr. Ashok H. Thakkar,Vice Chairman has been designated as the Chairman of the Company in the Board meeting held on 11th August, 2014.

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Ashok H. Thakkar, Director, retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment.

In terms of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, the Independent Directors can hold office for a term of up to five (5) consecutive years on the Board of Directors of your Company and are not liable to retire by rotation. Accordingly, it is proposed to appoint Mr. Nipun C Shah, Mr. Yasir J Varawala, Mr. Viren A Merchant, Mr. Jay Mehta and Mr. Ravinder Kumar Jain as Independent Directors of your Company for 5 (five) consecutive years up to 24th September, 2014.

The brief particulars of all the Directors, for which approval of members for their reappointment is sought, have been provided in the Notice of the Twenty fourth Annual General Meeting pursuant to the Clause 49 of the Listing Agreement relating to Corporate Governance.

AUDITORS AND THEIR REPORT

M/s. BSR & Co. LLP Chartered Accountants, Mumbai were appointed as the Statutory Auditors jointly with M/s. D.P Ghevaria & Co., Chartered Accountants by the Members at the last Annual General Meeting held on 3lst July, 2013.

M/s. BSR & Co. LLP had tendered their resignation w.e.f. 24th May, 2014 and had expressed their inability to continue as Statutory Auditors of the Company. In view of this resignation, other joint Auditor M/s. D.P Ghevaria & Co. continues as the sole Auditor till the ensuing Annual General Meeting.

For the financial year 2014-15, it is proposed to appoint M/s. D.P Ghevaria & Co., Chartered Accountants, Mumbai as Statutory Auditors subject to approval of members in the ensuing Annual General Meeting.

It is also proposed to appoint M/s. kalyaniwalla & Mistry, Chartered Accountants, Mumbai, as the joint statutory Auditors for a term of five years from conclusion of the ensuing Annual General Meeting subject to approval of the members in the ensuing Annual General Meeting.

The Company has received letters from both the Auditors to the effect that their appointment/re-appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for appointment/re-appointment.

There are no qualifications contained, in the Auditors Report and therefore there are no further explanations to be provided for in this report.

COST AUDIT

The Company''s Cost Auditors, M/s Girikrishna S Maniar, Cost Accountants, conducted the Cost Audit for the financial year 2012-13 and the Cost Audit Report submitted by them was filed with the Central Government accordingly. The Cost Audit Report for the financial year 2013-14 is in the process of being filed with the Central Government.

INTERNAL AUDIT

M/s. Suresh Gandhi & Associates, Surat, and M/s. Pipalia Singhal & Associates, Mumbai, Chartered Accountant Firms, have been associated with your Company as its internal auditor.

The Audit Committee of the Board of Directors, Statutory Auditors and the Management are periodically apprised of the Internal Audit findings and corrective actions taken.

WHISTLE BLOWER POLICY

Your Company has adopted a ''Whistle Blower Policy'' in its meeting held on llth August, 20l4 with an objective to conduct its affairs in a fair and transparent manner and by adopting the highest standards of professionalism, honesty, integrity and ethical behaviour.

With the adoption of this policy, the Company has put in place a mechanism wherein the Employees and the Directors are free to report to the management any actual or possible violation of the Principles or any other unlawful or unethical or improper practice or act, or activity of the Company. Under the Whistle Blower Policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. No personnel has been denied access to the Management. The mechanism shall be reviewed by the Audit Committee of the Company (in accordance with the Listing Agreement).

Whistle Blower Policy of the Company is displayed on the Company''s website www.adf-foods.com RISK MANAGEMENT

The Company has adopted Business Risk Management System (BRMS) for mitigating various risks associated and identified across all levels within the organization. This model is based on ISO 3l000. BRMS enables the management to review the business risks on periodical basis and to bring the high risk areas to the immediate attention of the Board.

ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

Information required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is appended hereto and forms part of this report.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, dividends pertaining to financial year 2005-06 & 2006-07 (Interim) amounting to Rs. 575,302/- and Rs. 676,523/- respectively which remained unpaid or unclaimed for a period of 7 years was transferred by the Company to the Investor Education and Protection Fund.

PARTICULARS OF EMPLOYEES

There are no employees drawing remuneration exceeding the monetary ceiling of Rs. 60 lakhs or more per annum or Rs. 5 Lakhs or more per month, if employed for a part of the year prescribed under Section 217 (2A) of the Companies Act, 1956 and the Rules made thereunder.

SUBSIDIARY COMPANIES

Your Company has three subsidiaries namely ADF Foods UK Ltd, Power Brands (Foods) Pvt. Ltd.and ADF Foods (India) Ltd. and two step down subsidiaries viz. ADF Holdings (USA) Ltd. and ADF Foods (USA) Ltd.

Power Brands (Foods) Private Limited:

M/s Power Brands (Foods) Pvt. Ltd, 99.99% Subsidiary of the Company, is undergoing Voluntary Liquidation vide Special resolution passed by the Members on 5th November, 2012.

In accordance with the general circular issued by the Ministry Of Corporate Affairs, Government Of India, the annual accounts of the subsidiary companies are not being attached with the financial statements of the Company. The Company will make available the Annual Accounts of the subsidiaries and the related detailed information to any Member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies shall also be kept for inspection by any shareholders in the head office of the holding company and of the subsidiaries concerned and shall be available on the Company''s website. Further as required under Listing agreement with the Stock Exchanges, a consolidated financial statement of the Company and all its subsidiaries is attached. We believe that the consolidated accounts present a full and fair picture of the state of affairs and the financial conditions and are globally accepted.

Further as required, the brief financial data of the subsidiaries has been furnished under the head ''Statement pursuant to Section 212(8) of the Companies Act, 1956'', related to subsidiary companies forming part of the annual Report.

CASH FLOW STATEMENT

The Cash Flow Statement pursuant to Clause 32 of the Listing agreement is annexed to this Report.

CONSOLIDATED ACCOUNTS

In compliance with Clause 32 of the Listing Agreement with the Stock Exchanges and in accordance with the requirements of Accounting Standards AS-21 prescribed by the Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries are annexed to this Report.

DEPOSIT

Your Company has not accepted any deposit within the meaning of Section 58A of the Companies Act, 1956 during the financial year 2013-14.

HUMAN RESOURCE AND EMPLOYEE RELATIONS

The Company has always perceived its Manpower as its biggest strength. The emphasis is on grooming in-house talent enabling them to take higher responsibilities. The Employee relations continue to be cordial at all the divisions of the Company. Your Directors place on record their deep appreciation for exemplary contribution of the employees at all levels. Their dedicated efforts and enthusiasm have been integral to your Company''s steady performance.

ACKNOWLEDGEMENTS

Your Directors wish to express their sincere appreciation of the excellent support and co-operation extended by the Company''s shareholders, customers, bankers, suppliers and all other stakeholders.

For and on Behalf of the Board of Directors

Ashok H. Thakkar Chairman

Mumbai, 11th August, 2014


Mar 31, 2013

Dear Shareholders,

The Directors have pleasure in presenting the Twenty Third Annual Report together with the Audited Financial Statements for the year ended 31st March 2013.

FINANCIAL RESULTS

The performance of the Company for the financial year ended 31st March 2013 is summarized below:

(Rs. in Lakhs)

Particulars 2012-13 2011-12

Revenue from Operations (Net) 12,969.15 11,248.25

Other Income 340.36 262.76

Total Income 13,309.51 11,511.01

Less: Total expenditure

Manufacturing & Other Expenses 11,478.58 9,198.53

Depreciation 414.56 467.23

Financial Expenses 162.57 124.35

Profit from ordinary activities after finance cost but before exceptional items 1,253.80 1,720.90

Exceptional Items 719.75

Profit before tax 1,973.55 1,720.90

Provision for taxation 289.02 362.12

Deferred tax (Assets) / Liabilities 125.96 195.75

Net Profit ( ) / Loss (-) 1,558.57 1,163.03

Prior Period adjustments (Net off) 3.18

Net Profit( ) / Loss(-) 1,558.57 1,166.21

Balance brought forward 5,503.49 4,749.44

Dividend declared/ paid 330.00 303.00

Tax on dividend 56.10 49.16

Transfer to General Reserve 80.00 60.00

Balance Carried to the Balance Sheet 6,595.96 5,503.49

EPS (Basic) 7.59 5.77

EPS (Diluted) 7.59 5.45

Previous years figures have been re-grouped wherever necessary

FINANCIAL PERFORMANCE

Standalone results

During the year under review, your Company has recorded revenue from operations (net) of Rs. 129.69 Crore as against Rs. 112.48 Crore in the previous year recording an increase of 15% over the previous year. The Net profit (after tax, exceptional and extra ordinary items) for the financial year ended 31st March 2013 is Rs. 15.58 Crore as against Rs. 11.66 Crore in the previous year.

Consolidated Results

Your Company''s revenue from operations (net) is Rs. 178.95 Crores as against Rs. 155.88 Crores in the previous year recording an increase of 15% over the previous year. The Net profit (after tax, exceptional and extra ordinary items) for the year is Rs. 14.04 Crores, as against Rs. 6.37 Crores in previous year recording an increase of 120% over the previous year.

WARRANTS

During the year, the Promoters had exercised their option to covert the outstanding 18,00,000 warrants on 23rd January, 2013 out of the 20,00,000 warrants issued on Preferential Basis on 29th July, 2011. After the said conversion, there are no outstanding warrants left to be converted with the Company. The proceeds of the Warrants/Equity Shares issued by Company are being used for the purpose for which they have been raised.

DIVIDEND

Your Directors are pleased to recommend a Dividend of Rs. 1.5 per share (i.e. @ 15 %) for the year ended 31st March 2013. The dividend payout, if approved, will result in outflow of Rs. 386.10 Lakhs inclusive of Rs. 56.10 Lakhs on account of Dividend Distribution Tax.

BUSINESS DEVELOPMENT

The Domestic market:

During the year, your Company has expanded its distribution network in Uttar Pradesh, Delhi and Bangalore in addition to its existing presence in Mumbai, Pune, Gujarat and Madhya Pradesh . The ''ADF SOUL'' brand has its presence in almost 30,000 grocery outlets across India. The modern trade business has shown remarkable growth during the year and the products are listed and sold in approximately 80% of the major supermarket chains in the cities where we are present. The recent additions in the product line are the all new ''WET MASALAS'' range of products made with extra virgin olive oil which have been initially launched in Gujarat and Mumbai markets. The current range of ADF SOUL products include pickles in olive oil, traditional pickles, Ready to eat foods, Kesar Mango Pulp, Pizza Sauces and Pasta sauces. The Company''s motivated sales force has been making constant efforts to increase the penetration of the products on retail shelves. In order to drive a long-term sustainable growth through brand building , the Company plans to do a significant increase in its investments in advertisement, sales promotion and marketing activities during next two financial years.

Expansions :

Your Company''s Greenfield project in Nadiad which is spread over 45,000 square feet., would be operational by end of the financial year 2013-14 and the same would increase manufacturing capacity of the Company''s core products such as pickles, pastes and chutneys. The approximate project cost would be Rs 20 crores.

U.S. Operations:

The Company''s acquired business of Elena''s Food Specialties has turned profitable at EBITDA level. The Company is confident of generating better results in the years to come .

During the year, the Company has introduced four new burritos under the brand PJ''s Organics. The Company has also introduced a unique range of protein based Ethnic Indian foods such as Kathi Rolls and Indian style Pizzas called NAANZZA under its brand ''ADF SOUL''. These products are made in the U.S. Facility and are going to be exported to the Gulf market in addition to being sold in USA and Canada. During the year, your Company also participated in the Gulf Food show and has received a very encouraging response.

The Company continues to maintain strategic focus on improvement in the product mix, product rationalization, greater marketing synergies and cost-efficiency throughout the organization.

TECHNOLOGY AND QUALITY

Your Company is committed to deliver highest quality of products by continuous improvement in terms of product quality and achieving customer satisfaction and delight. Your Company has already obtained various quality certifications such as the Internationally recognized BRC (British Retail Consortium) Global Standard – Foods, ISO 22000/ HACCP & ISO 9001:2000 certifications for its plants located at Nadiad, Gujarat and Nashik, Maharashtra.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Director''s Responsibility Statement, it is hereby confirmed:

(i). that in the preparation of the annual accounts for the financial year ended 31st March 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii). 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 true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for the year under review;

(iii). that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv). that the Directors have prepared the accounts for the financial year ended 31st March 2013 on a ''going concern'' basis.

LISTING OF SHARES :

The Company''s shares are actively traded on BSE Limited (BSE) and National Stock Exchange of India Limited (NSEIL).

CORPORATE GOVERNANCE

In compliance with the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, a separate report on Corporate Governance along with Auditors'' certificate on its compliance has been provided elsewhere in this Annual Report.

Report on Management Discussion and Analysis is provided in separate section and forms part of this Annual Report.

DIRECTORS AND SENIOR MANAGEMENT

Mr. Vikram Munshi, Non Executive Independent Director, resigned from the Board of Directors of the Company w.e.f. May 09, 2013. The Board has placed on record its deep appreciation of Mr. Munshi''s contribution during his long association with the Company.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Bhavesh R. Thakkar, Mr. Viren Merchant and Mr. Ravinder Kumar Jain, Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment.

The brief particulars of all the Directors, for which approval of members for their reappointment is sought, have been provided in the Notice of the Twenty Third Annual General Meeting pursuant to the Clause 49 of the Listing Agreement relating to Corporate Governance.

The Company has appointed Mr. Milroy Fernandes as the General Manager- Finance and Mr. Maneck Katpitia as Vice-President (International Business) in the month of November, 2012. The Company is positive of benefiting from their varied experience and expertise.

AUDITORS AND THEIR REPORT

M/s. D.P. Ghevaria & Co., Chartered Accountants and M/s. B S R & Co., Chartered Accountants, both Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received certificates from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224 (1B) of the Companies Act, 1956 and that they are not disqualified for re-appointment within the meaning of Section 226 of the said Act.

There are no qualifications contained, in the Auditors Report and therefore there are no further explanations to be provided for in this report.

COST AUDIT

As per the Central Government Order dated 24th January, 2012, the Company is required to get its cost accounting records, in respect of each of its financial years commencing on or after 1st April, 2012, audited by a cost auditor. The Board of Directors of the Company appointed M/s. N.Ritesh & Associates , Cost Accountants, as the Cost Auditor of the Company for the year ended 31st March, 2013.The Cost Audit Report for the year ended 31st March, 2013, will be submitted to the Central Government in due course.

M/s Girikrishna S Maniar, Cost Accountants, have been appointed as the Cost Auditors for the Company by the Board of Directors in their meeting held on 30th May, 2013 to conduct the cost audit for the Financial Year ended 31st March, 2014.

INTERNAL AUDIT

M/s. Suresh Gandhi & Associates , Surat, and M/s. Pipalia Singhal & Associates, Mumbai , Chartered Accountant Firms, have been associated with your Company as its internal auditor.

RISK MANAGEMENT

During the year your Company has adopted the Business Risk Management System (BRMS) for mitigating various risks associated and identified across all levels within the organization. This model is based on ISO 31000. BRMS would enable the management to review the business risks on periodical basis and to bring the high risk areas to the immediate attention of the Board.

ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

Information required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is appended hereto and forms part of this report.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, dividends pertaining to financial year 2004-05 amounting to Rs. 597,530/- which remained unpaid or unclaimed for a period of 7 years was transferred by the Company to the Investor Education and Protection Fund.

PARTICULARS OF EMPLOYEES

There are no employees drawing remuneration exceeding the monetary ceiling of Rs. 60 lakhs or more per annum or Rs. 5 lakhs or more per month, if employed for a part of the year prescribed under Section 217 (2A) of the Companies Act, 1956 and the Rules made thereunder.

SUBSIDIARY COMPANIES

Your Company has three subsidiaries namely ADF Foods UK Ltd, Power Brands (Foods) Pvt. Ltd.and ADF Foods (India) Ltd. and two step down subsidiaries viz. ADF Holdings (USA) Ltd. and ADF Foods (USA) Ltd.

Power Brands (Foods) Private Limited:

M/s Power Brands (Foods) Pvt. Ltd, 99.99% Subsidiary of the Company, has under gone Voluntary Liquidation vide Special resolution passed by the Members'' on 5th November, 2012.

In accordance with the general circular issued by the Ministry Of Corporate Affairs, Government Of India, the annual accounts of the subsidiary companies are not being attached with the financial statements of the Company. The Company will make available the Annual Accounts of the subsidiaries and the related detailed information to any Member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies shall also be kept for inspection by any shareholders in the head office of the holding company and of the subsidiaries concerned. Further as required under Listing agreement with the Stock Exchanges, a consolidated financial statement of the Company and all its subsidiaries is attached. We believe that the consolidated accounts present a full and fair picture of the state of affairs and the financial conditions and are globally accepted.

Further as required, the brief financial data of the subsidiaries has been furnished under the head ''Statement pursuant to Section 212(8) of the Companies Act, 1956'', related to subsidiary companies forming part of the Annual Report.

CASH FLOW STATEMENT

The Cash Flow Statement pursuant to Clause 32 of the Listing agreement is annexed to this Report.

CONSOLIDATED ACCOUNTS

In compliance with Clause 32 of the Listing Agreement with the Stock Exchanges and in accordance with the requirements of Accounting Standards AS-21 prescribed by the Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries are annexed to this Report.

DEPOSIT

Your Company has not accepted any deposit within the meaning of Section 58A of the Companies Act, 1956 during the financial year 2012-13.

HUMAN RESOURCE AND EMPLOYEE RELATIONS

The Company has always perceived its Manpower as its biggest strength. The emphasis was on grooming in-house talent enabling them to take higher responsibilities. The Employee relations continue to be cordial at all the divisions of the Company. Your Directors place on record their deep appreciation for exemplary contribution of the employees at all levels. Their dedicated efforts and enthusiasm have been integral to your Company''s steady performance.

ACKNOWLEDGEMENTS

Your Directors wish to express their sincere appreciation of the excellent support and co-operation extended by the Company''s shareholders, customers, bankers, suppliers and all other stakeholders.

For and on Behalf of the Board of Directors

Ramesh H Thakkar Chairman

Registered Office:

83/86, G.I.D.C.

Industrial Estate,

Nadiad- 387 001,

Gujarat. Mumbai,

date 30th May, 2013


Mar 31, 2012

The Directors have pleasure in presenting the Twenty Second Annual Report together with the Audited Financial Statements for the year ended 31st March 2012.

FINANCIAL RESULTS

The performance of the Company for the financial year ended 31st March 2012 is summarized below:

(Rs. in Lakhs)

Particulars 2011-12 2010-11

Net sales/Income from operation 11,248.25 11,137.67

Other Income 262.76 313.42

Total Income 11,511.01 11,451.09

Less: Total expenditure Manufacturing & Other Expenses 9,198.53 8,837.97

Depreciation 467.23 450.25

Financial Expenses 124.35 163.01

Profit ( )/Loss (-) before tax 1,720.90 1,999.86

Provision for taxation 362.12 359.07

Deferred tax (Assets) / Liabilities 195.75 (139.97)

Net Profit ( ) / Loss (-) 1,163.03 1,780.76

Prior Period adjustments (Net off) 3.18 (1.17)

Net Profit( ) / Loss(-) 1,166.21 1,779.59

Balance brought forward 4,749.44 3,410.65

Dividend declared/ paid 303.00 300.00

Tax on dividend 49.16 49.83

Transfer to General Reserve 60.00 90.97

Balance Carried to the Balance Sheet 5,503.49 4,749.44

EPS (Basic) 5.77 8.90

EPS (Diluted) 5.451 8.90

Previous years figures have been re-grouped wherever necessary

FINANCIAL PERFORMANCE

During the year under review, your Company has recorded a turnover of Rs. 112.48 Crore as against Rs. 111.37 Crore in the previous year. The Net profit (after tax and extra ordinary items) for the financial year ended 31st March 2012 is Rs. 11.66 Crore as against Rs. 17.79 Crore in the previous year.

WARRANTS

During the year, the Company allotted 20,00,000 (Twenty Lakh) warrants convertible into equivalent number of equity shares of Rs. 10/- each at an issue price of Rs. 65/- per warrant to certain members of the promoter group on preferential basis on receipt of the minimum subscription amount of 25% of issue price i.e. Rs. 16.25/- per warrant. Of the above, 200,000 (Two Lakh) warrants were converted into equity shares by the warrant holders on 28th March, 2012 by payment of balance 75% of the Issue Price. The said allotment was done in compliance with Chapter VII of SEBI (ICDR) Regulations, 2009. The option to covert remaining 18,00,000 warrants, if not exercised, would expire on 28th January, 2013. The proceeds of the warrants/Equity Shares issued by Company are being used for the purpose for which they were raised.

DIVIDEND

Your Directors are pleased to recommend a Dividend of Rs. 1.5/- per share (i.e. @ 15 %) for the year ended 31st March 2012. The dividend payout, if approved, will result in outflow of Rs. 352.16 Lakhs inclusive of Rs. 49.16 Lakhs on account of Dividend Distribution Tax. -

BUSINESS DEVELOPMENT

The Domestic market:

During the year, your Company has expanded its distribution in Gujarat and Madhya Pradesh in addition to its existing presence in Mumbai and Pune. The products are being sold in traditional grocery stores and also in major supermarkets. The Modern trade (supermarket business) has shown a remarkable growth during the year. There has been an addition of new products such as Kesar Mango pulp, Pizza Sauces and Pasta Sauces , all under the umbrella brand 'ADF SOUL'. The domestic division of the Company has equipped itself with strong distribution network and a motivated sales force to accomplish the targeted growth. The Company is constantly focusing to roll out aggressive strategies for its domestic business in order to establish a strong position in the growing processed foods industry in India.

Your Company has acquired a plot adjacent to its existing factory at Nadiad and is in the process of setting up a new factory on the said plot. The new set up would increase manufacturing capacity of the Company's core products such as pickles, pastes and chutneys.

US Operations:

During the previous financial year the Company's US based subsidiary acquired substantial assets of Elena's Food Specialties, Inc. a US based manufacturer and marketer of organic and natural food products. The acquisition has provided the Company with a USDA approved manufacturing facility and a complimentary business and distribution network in the USA. Apart from this your company also got well established brands such as NATES, PJs Organics and Elena's Kitchen with this acquisition.

Elena's business achieved break-even in the very first year itself through the implementation of various cost control measures, efficient business operations and rationalization of the product range. Your Company also introduced certain Ethnic Indian wraps in the US under its brand 'ADF SOUL' , made in the U.S. Facility. The products are listed and sold at major supermarket chains and natural grocery chains all across USA.

Your Company's core international business has a strong business foothold in over 45 countries. In addition to the growth of the existing business your Company is continuously exploring the opportunities of complimentary acquisitions in both domestic as well as international markets in order to accelerate its growth.

TECHNOLOGY AND QUALITY

Your Company is committed to deliver highest quality of products by continuous improvement in terms of product quality and achieving customer satisfaction and delight. Your Company has already obtained various quality certifications such as the Internationally recognized BRC (British Retail Consortium) Global Standard - Foods, ISO 22000/ HACCP & ISO 9001:2000 certifications for its plants located at Nadiad, Gujarat and Nashik, Maharashtra.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 2I7(2AA) of the Companies Act, 1956 with respect to Director's Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) 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 true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for the year under review;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,I956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) that the Directors have prepared the accounts for the financial year ended 31st March 2012 on a 'going concern' basis. LISTING OF SHARES :

The Company's shares are actively traded on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE).

CORPORATE GOVERNANCE

In compliance with the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, a separate report on Corporate Governance along with Auditors' certificate on its compliance has been provided elsewhere in this Annual Report.

Report on Management Discussion and Analysis is provided in separate section and forming part of this Annual Report.

DIRECTORS

The Company has 10 Directors out of which 6 are Non- Executive Independent Directors and 4 are Executive Promoter Directors.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Nipun Shah, Mr. Vikram Munshi and Mr. Jay Mehta , Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment.

The brief particulars of all the Directors, for which approval of members for their reappointment is sought, have been provided in the Notice of the Twenty Second Annual General Meeting pursuant to the Clause 49 of the Listing Agreement relating to Corporate Governance.

AUDITORS AND THEIR REPORT

M/s. D.P Ghevaria & Co., Chartered Accountants and M/s. B S R & Co., Chartered Accountants, both Statutory Auditors of the Company , hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received certificates from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224 (IB) of the Companies Act, 1956 and that they are not disqualified for re-appointment within the meaning of Section 226 of the said Act.

There are no qualifications contained, in the Auditors Report and therefore there are no further explanations to be provided for in this report.

COST ACCOUNTING RECORDS AND COST AUDIT

As per the provisions of Companies (Cost Accounting Records) Rules, 2011, the Company is required to maintain cost records and to submit a compliance report duly certified by a cost accountant to the Central Government in the prescribed form in respect of each of its financial year commencing on or after 1st April, 2011. The Company has been complying with the provisions of the said Rules.

Further, as per the Central Government Order dated 24th January, 2012, the Company is required to get its cost accounting records, in respect of each of its financial years commencing on or after 1st day of April, 2012, audited by a cost auditor.

In order to comply with the said Order, the Company has appointed M/s. N. Ritesh & Associates, Cost Accountants to conduct Cost Audit for the financial year 2012-13 pursuant to the provisions of Section 233B of the Companies Act, 1956.

A written certificate has been obtained from M/s. N. Ritesh & Associates, to the effect that the said appointment, if made will be in accordance with regulations as specified under Section 224 (IB) of the Companies Act, 1956.

ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

Information required under Section 2I7(I)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is appended hereto and forms part of this report.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 205A(5) of the Companies Act, I956, dividends pertaining to financial year 2003-04 amounting to Rs. 545,417/- which remained unpaid or unclaimed for a period of 7 years was transferred by the Company to the Investor Education and Protection Fund.

PARTICULARS OF EMPLOYEES

There are no employees drawing remuneration exceeding the monetory ceiling of Rs. 60 lakhs or more per annum or Rs. 5 lakhs or more per month, if employed for a part of the year prescribed under Section 217 (2A) of the Companies Act, 1956 and the Rules made thereunder.

SUBSIDIARY COMPANIES

Your Company has four subsidiaries namely ADF Foods UK Ltd, ADF Foods (Mauritius) Ltd., Power Brands (Foods) Pvt. Ltd. and ADF Foods (India) Ltd. and two step down subsidiaries viz. ADF Holdings (USA) Ltd. and ADF Foods (USA) Ltd.

In the meeting of the Board Of Directors of the Company held on 29th May, 2012 it has been decided to voluntarily wind up the Mauritius subsidiary of the Company i.e. ADF Foods (Mauritius) Ltd. in view of no business operations. The said subsidiary would be wound up in compliance with the applicable Mauritius Laws.

In accordance with the general circular issued by the Ministry Of Corporate Affairs, Government Of India, the annual accounts of the subsidiary companies are not being attached with the financial statements of the Company. The Company will make available the Annual Accounts of the subsidiaries and the related detailed information to any Member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies shall also be kept for inspection by any shareholders in the head office of the holding company and of the subsidiaries concerned. Further as required under Listing agreement with the Stock Exchanges, a consolidated financial statement of the Company and all its subsidiaries is attached. We believe that the consolidated accounts present a full and fair picture of the state of affairs and the financial conditions and are globally accepted.

Further as required, the brief financial data of the subsidiaries has been furnished under the head 'Statement pursuant to Section 212(8) of the Companies Act, 1956', related to subsidiary companies forming part of the Annual Report.

CASH FLOW STATEMENT

The Cash Flow Statement pursuant to Clause 32 of the Listing agreement is annexed to this Report.

CONSOLIDATED ACCOUNTS

In compliance with Clause 32 of the Listing Agreement with the Stock Exchanges and in accordance with the requirements of Accounting Standards AS-21 prescribed by the Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries are annexed to this Report.

DEPOSIT

Your Company has not accepted any deposit within the meaning of Section 58A of the Companies Act, 1956 during the financial year 2011-12.

EMPLOYEE RELATIONS

The Employee relations continue to be cordial at all the divisions of the Company. Your Directors place on record their deep appreciation for exemplary contribution of the employees at all levels. Their dedicated efforts and enthusiasm have been integral to your Company's steady performance.

ACKNOWLEDGEMENTS

Your Directors wish to express their sincere appreciation of the excellent support and co-operation extended by the Company's shareholders, customers, bankers, suppliers and all other stakeholders. For and on Behalf of the Board of Directors

Ramesh H Thakkar

Chairman

Registered Office:

83/86, G.I.D.C. Industrial Estate,

Nadiad- 387 001, Gujarat.

Mumbai, date 29th May, 2012


Mar 31, 2011

The Directors have pleasure in presenting the Twenty First Annual Report together with the Audited Financial Statement for the year ended 31st March 2011.

FINANCIAL RESULTS

The performance of the Company for the financial year ended 31st March 2011 is summarized below:

(Rs. in Lakhs)

Particulars 2010-11 2009-10

Net sales/Income from operation 11,177.98 10,289.22

Other Income 432.24 654.87

Total Income 11,610.22 10,944.09

Add: Increase/ (Decrease) in Stock in trade 289.99 (309.90)

11,900.21 10,634.19 Less: Total expenditure

Manufacturing & Other Expenses 9,286.27 8,072.40

Depreciation 450.25 418.65

Financial Expenses 163.01 181.06

Profit (+)/Loss (-) before tax 2,000.68 1,962.08

Provision for taxation 359.89 352.51

Deferred tax Assets / (Liabilities) 139.97 (44.23)

Net Profit (+) / Loss (-) 1,780.76 1,565.34

Prior Period Expenses/ Tax (Net off) 1.17 2.15

Net Profit(+) / Loss(-) 1,779.59 1,563.19

Balance brought forward 3,410.65 2,276.59

Dividend declared/ paid 300.00 300.00

Tax on dividend 49.83 50.97

Transfer to General Reserve 90.97 78.16

Balance Carried to the Balance Sheet 4,749.44 3,410.65

EPS (Basic) 8.90 8.33

EPS (Diluted) 8.90 8.33

FINANCIAL PERFORMANCE

During the year under review, your Company has recorded a turnover of Rs. 111.78 Crore as against Rs. 102.89 Crore in the previous year. The Net profit (after tax and extra ordinary items) for the financial year ended 31st March 2011 increased to Rs. 17.79 Crore from Rs. 15.63 Crore in the previous year representing an increase of 13.82% profit after tax.

DIVIDEND

Your Directors are pleased to recommend a Dividend of Rs. 1.50/- per share (i.e. @ 15%) for the year ended 31st March 2011. The dividend payout, if approved, will result in outflow of Rs. 349.83 Lakhs inclusive of Rs. 49.83 Lakhs on account of Dividend Distribution Tax.

BUSINESS DEVELOPMENT

During the year your Company has completed expansion of its Nadiad Factory including significant increase in its cold storage facility.

During the previous year your Company introduced a wide range of ready to eat products and pickles under the brand ADF SOUL in Mumbai and Pune. The same has met with an encouraging response especially pickles in virgin olive oil. The Company is gearing up to market the products under the brand ADF SOUL throughout India.

During the year your Company has completed the acquisition of Elenas Food Specialties, Inc., a US based manufacturer and marketer of organic and natural food products. Your Company acquired all substantial assets and certain liabilities of Elenas including its intellectual property rights through its international subsidiaries. The integration of Companys new acquisition is going as planned. The Management has taken initiatives to bring down the losses since the acquisition and has taken various measures to cut expenses and ensure better sourcing of Raw Materials and Packing Materials. The Company will also be launching some new products in the Mexican Food Category under the PJs Organics Brand and has also decided to launch in June some protein based Ethnic Indian Foods under its brand name ADF SOUL in US markets.

TECHNOLOGY AND QUALITY

Your Company is committed to deliver highest quality of products by continuous improvement in terms of product quality and achieving customer satisfaction and delight. Your Company has already obtained various quality certifications such as the Internationally recognized BRC (British Retail Consortium) Global Standard – Foods, ISO 22000/ HACCP & ISO 9001:2000 certifications for its plants located at Nadiad, Gujarat and Nashik, Maharashtra.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) 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 true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for the year under review;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) that the Directors have prepared the accounts for the financial year ended 31st March 2011 on a going concern basis.

LISTING OF SHARES

The Company received approval from the National Stock Exchange of India Limited (NSE) for trading of shares with effect from 15th September, 2010. Thus Companys shares are actively traded on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE).

CORPORATE GOVERNANCE

In compliance with the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, a separate report on Corporate Governance along with Auditors certificate on its compliance has been provided elsewhere in this Annual Report.

Report on Management Discussion and Analysis is provided in separate section and forming part of this Annual Report.

DIRECTORS

The Company has 10 Directors out of which 6 are Non- Executive Independent Directors and 4 are Executive Promoter Directors.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Bhavesh R. Thakkar, Mr. Ravinder Kumar Jain and Mr. Yasir Varawala, Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment.

The brief particulars of all the Directors, for which approval of Members for their re-appointment is sought, have been provided in the Notice of the Twenty First Annual General Meeting pursuant to the Clause 49 of the Listing Agreement relating to Corporate Governance.

Mr. D.E. Udwadia resigned from the Board Of Directors w.e.f. 21st October, 2010. The Board has placed on record its deep appreciation of Mr. Udwadias immense contribution and valuable services during his long association with the Company and acknowledged Mr. Udwadias outstanding experience and expertise.

AUDITORS AND THEIR REPORT

M/s. V. P. Thacker & Co., Chartered Accountants, Mumbai were appointed as the Statutory Auditors jointly with M/s. D.P. Ghevaria & Co., Chartered Accountants by the Members at the last Annual General Meeting held on 28th July, 2010.

M/s. V. P. Thacker & Co., had tendered their resignation w.e.f. 09th October, 2010 and had expressed their inability to continue as Statutory Auditors of the Company. In view of this resignation, other joint Auditor M/s. D.P. Ghevaria & Co. continues as the sole Auditor till the ensuing Annual General Meeting.

For the financial year 2011-12, it is proposed to appoint M/s. B S R & Co., Chartered Accountants, Mumbai as Statutory Auditors alongwith M/s. D. P. Ghevaria & Co. A written certificate has been obtained from both M/s. B S R & Co. and M/s. D.P. Ghevaria & Co., to the effect that the said appointment, if made will be in accordance with regulations as specified under Section 224 (1B) of the Companies Act, 1956. The matter as such is being placed before the Members to consider appointment of M/s. B S R & Co., Chartered Accountants as Statutory Auditors jointly with M/s. D. P. Ghevaria & Co., Chartered Accountants to hold office from conclusion of the ensuing Annual General Meeting till the conclusion of next Annual General Meeting.

There are no qualifications contained, in the Auditors Report and therefore there are no further explanations to be provided for in this report.

ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

Information required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is appended hereto and forms part of this report.

PARTICULARS OF EMPLOYEES

There are no employees drawing remuneration exceeding the monetory ceiling of Rs. 60 Lakhs or more per annum or Rs. 5 Lakhs or more per month, if employed for a part of the year prescribed under Section 217 (2A) of the Companies Act, 1956 and the Rules made thereunder.

SUBSIDIARY COMPANY

At the beginning of the year the Company had four subsidiaries namely ADF Foods UK Ltd, ADF Foods (Mauritius) Ltd., Power Brands (Foods) Pvt. Ltd. and ADF Foods (India) Ltd.

On 22nd September, 2010, your Company had set up two step down subsidiaries in U.S.A. viz. ADF Holdings (USA) Ltd. and ADF Foods (USA) Ltd.

Ministry Of Corporate Affairs vide its General Circular No.2/2011 dated 08.02.2011 has directed that provisions of Section 212(1) i.e. attaching the Annual Accounts of all the subsidiaries, shall not apply in relation to subsidiaries of those companies on fulfillment of certain conditions. Your Company has fulfilled the conditions including obtaining of the consent of the Board Of Directors of the Company for not attaching the Annual Accounts of the subsidiaries. The Company will make available the Annual Accounts of the subsidiaries and the related detailed information to any Member of the Company who may be interested in obtaining the same. The Annual Accounts of the subsidiary companies shall also be kept for inspection by any Members in the head office of the holding company and of the subsidiaries concerned. Further as required under Listing Agreement with the Stock Exchanges, a consolidated financial statement of the Company and all its subsidiaries is attached. We believe that the consolidated accounts present a full and fair picture of the state of affairs and the financial conditions and are globally accepted.

Further as required, the brief financial data of the subsidiaries has been furnished under the head " Statement pursuant to Section 212(8) of the Companies Act, 1956, related to subsidiary companies forming part of the Annual Report.

CONSOLIDATED ACCOUNTS

In compliance with Clause 32 of the Listing Agreement with the Stock Exchanges and in accordance with the requirements of Accounting Standards AS-21 prescribed by the Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries are annexed to this Report.

DEPOSIT

Your Company has not accepted any deposit within the meaning of Section 58A of the Companies Act, 1956 during the financial year 2010-11.

EMPLOYEE RELATIONS

The Employee relations continue to be cordial at all the divisions of the Company. Your Directors place on record their deep appreciation for exemplary contribution of the employees at all levels. Their dedicated efforts and enthusiasm have been integral to your Companys impressive growth.

ACKNOWLEDGEMENTS

Your Directors wish to express their sincere appreciation of the excellent support and co-operation extended by the Companys shareholders, customers, bankers, suppliers and all other stakeholders.

For and on Behalf of the Board of Directors

Ramesh H Thakkar Chairman

Registered Office:

83/86, G.I.D.C. Industrial Estate, Nadiad- 387 001, Gujarat.

Mumbai, date 16th June, 2011


Mar 31, 2010

The Directors have pleasure in presenting the Twentieth Annual Report together with the Audited Financial Statement for the year ended 31" March 2010.

FINANCIAL RESULTS

The performance of the Company for the financial year ended 31H March 2010 is summarized below:

Rs. in Lakhs

Particulars 2009-10 2008-09

Net sales/ Income from operation 10,168.54 9,584.23

Other Income 775.55 382.77

Total Income 10,944.09 9,967.00

Add: Increase/ (Decrease) in Stock in trade (309.90> 218.05

10,634.10 10,185.05

Less: Total expenditure

Manufacturing & Other Expenses 8,072.40 8,249.74

Depreciation 418.65 393.69

Financial Expenses 181.06 219.90

Profit (+)/Loss (-) before tax 1,962.08 1,321.72

Provision for taxation 336.90 269.76

Deferred tax Assets / (Liabilities) 44.23 32.41

Net Profit (+) / Loss (-) 1,580.95 1,019.55

Prior Period Expenses/ Tax (Net off) 17.76 39.70

Net Pfofit(+) / Loss(-) 1,563.19 979,85

Balance brought forward 2,276.59 1655.91

Dividend -declared/ paid 300.00 265.11

Tax on dividend 50.97 45.06

Transfer to General Reserve 78.16 49.00

Balance Carriedto the Balance Sheet 3,410.65 2276.59

EPS (Basic) 8.33 5.54

EPS (Diluted) 8.33 5.11

FINANCIAL PERFORMANCE

During the year under review, your Company has recorded a turnover of Rs. 101.68 Crores as against Rs. 95.84 Crores in the previous year. The Net profit (after tax and extra ordinary items) for the financial year ended 3 Ist March 2010 increased to Rs. 15.63 Crores from Rs. 9.80 Crores in the previous year representing an increase of 59.49 % profit after tax.

WARRANTS

The Company had allotted 15,00,000 Convertible Warrants of Rs. 70/- each (Rs. 7.00 per warrant paid on allotment) on preferential basis to Promoters/Directors, their friends and relatives on 24th December 2007. None of the subscribers of the warrants had exercised their option and the same expired on 23rd June 2009. Rs. 1,05,00,000 received on allotment of warrants was credited to Capital Reserve Account.

The Company had allotted 23,26,110 Convertible warrants of Rs. 32/- each (Rs. 8.00 per warrant paid on allotment) on preferential basis to Promoters/Directors, their friends and relatives on 29th July 2009. Of the above, 8,20,222 warrants were converted on 11 * September 2009 and balance warrants 15,05,888 were converted on 27* October 2009. The balance amount of Rs. 24 per warrant was duly received before exercise of warrants.

DIVIDEND

Your Directors are pleased to recommend a Dividend of Rs. 1.50/- per share (i.e. @ 15%) for the year ended 31st March 2010. The dividend payout, if approved, will result in outflow of Rs. 350.97 Lakhs inclusive of Rs. 50.97 Lakhs on account of Dividend Distribution Tax.

BUSINESS DEVELOPMENT

During the year under review, your Company has entered the domestic market through its wholly owned Subsidiary ADF Foods (India) Ltd and launched a range of products under the brand "ADF SOUL". The initial product range which has been launched is die range of healthy Indian pickles made with Virgin Olive Oil, traditional pickles and select ready-to-eat recipes. The range has been initially introduced in Mumbai and Pune. The products are being sold in traditional grocery stores and also in some leading Supermarkets. The company is currently in the process of securing listing with the other- Supermarket chains and also increasing its penetration in the traditional grocery outlets. The initial response for the products has been very encouraging and die Company is focusing on building its distribution network and expects to be pan India within next 2 years.

Despite global recession and economic slowdown last year your Companys sales have increased for all its brands during the financial year ended 31 * March 2010. Your Company has been widening its customer base and has also added new products to marginalize the impact of economic slowdown.

TRULY INDIAN Brand has been launched in Germany during the latter part of this financial year and the initial response has been positive. The company also obtained new listings in US Supermarkets and is poised to grow the main stream side of the business through TRULY INDIAN. Your Company continues to promote Indian Food Culture world over and takes pride in being an innovator in the Ethnic Indian Food Category.

Even tiiough globally many countries are still struggling under the pressures of economic slowdown, we are cautiously optimistic and hope to grow the business in the new financial year. In addition to organic growth your company is also looking at growing its business through inorganic means and is scouting for businesses which have a strong distribution network in the mainstream markets in the ethnic foods space where there is synergy with its existing product line.

TECHNOLOGY AND QUALITY

Your Company is committed to deliver highest quality of products by continuous improvement in terms of product quality and achieving customer satisfaction and delight. Your Company has already obtained various quality certifications such as die Internationally recognized BRC (British Retail Consortium) Global Standard - Foods, ISO 22000/ HACCP & ISO 9001.2000 certifications for its plants located at Nadiad, Gujarat and Nashik, Maharashtra.

DIRECTORSRESPONSIBILITY STATEMENT

Pursuant to die requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed:

(i) that in die preparation of the annual accounts for the financial year ended 31* March 2010, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) drat die Directors have selected such accounting policies and applied them consistently and made judgments and estimates diat are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at the end of die financial year arid
(iii) diat die Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with die provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) diat die Directors have prepared the accounts for the financial year ended 3 Ist March 2010 on a going concern basis.

CORPORATE GOVERNANCE

In compliance witii die requirements of Clause 49 of the Usting Agreement with the Stock Exchange, a separate report on Corporate Governance along with Auditors certificate on its compliance has been provided elsewhere in this Annual Report.

Report on Management Discussion and Analysis is provided in separate section and forming part of this Annual Report.

DIRECTORS

The Company has 11 Directors out of which 7 are Non- Executive independent Directors and 4 are Executive Promoter Directors.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Viren Merchant and Mr. Darius E. Udwadia, Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for reappointment.

The brief particulars of all the Directors, for which approval of members for their reappointment is sought, have been provided in the Notice of the Twentieth Annua! General Meeting pursuant to the Clause 49 of the Listing Agreement relating to Corporate Governance.

AUDITORS AND THEIR REPORT

The Statutory Auditors, M/s D. R Ghevaria & Co., Chartered Accountants and M/s. V R Thacker & Co., Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for re-appointment as Joint Statutory Auditors of the Company.

There are no qualifications contained, in the Auditors Report and therefore there are no further explanations to be provided for in this report.

ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

Information required under section 217( I )(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is appended hereto and forms part of this report.

PARTICULARS OF EMPLOYEES

There are no employees drawing remuneration exceeding the monetary ceiling prescribed under Section 217(2A) of the Companies Act, 1956, as amended upto date.

SUBSIDIARY COMPANY

At the beginning of the year the Company had three subsidiaries namely: ADF Foods UK Ltd (ADF UK), ADF Foods (Mauritius) Limited (ADF M) and Tower Brands (Foods) Pvt. Ltd. (PBFPL).

On 7th December 2009 your Company set up a Wholly Owned Subsidiary viz. ADF Foods (India) Ltd (ADFIL). The certificate of commencement of Business was received for the same on 9* January 2010.

The Statement of Accounts of ADF UK, ADF-M, PBFPL and ADFIL together with the Report of the Director and the Auditors as required under section 212 of the Companies Act, 1956 are attached to this Annual Report.

CONSOLIDATED ACCOUNTS

In compliance with Clause 32 of the Listing Agreement with the Stock Exchange and in accordance with the requirements of Accounting Standards AS-21 prescribed by the Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiary are annexed to this Report.

DEPOSIT

Your Company has not accepted any deposit within the meaning of Section 58A of the Companies Act,. 1956 during the financial year 2009-10.

EMPLOYEE RELATIONS

The Employee relations continue to be cordial at all the divisions of the Company. Your Directors place on record their deep appreciation for exemplary contribution of the employees at all levels. Their dedicated efforts and enthusiasm have been integral to your Companys impressive growth.

ACKNOWLEDGEMENTS

Your Directors wish to express their sincere appreciation of the excellent support and co-operation extended by the Companys shareholders, customers, bankers, suppliers and all other stakeholders.

For and on Behalf of the Board of Directors

Ramesh H Thakkar Chairman

Registered Office:

83/86, G.I.D.C. Industrial Estate, Nadiad - 387 001, Gujarat. Mumbai 20th May 2010

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