Directors Report of Shah Foods Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presentina the 33rd Board's Report of your Company together with the Audited Statement

of Accounts and the Auditors' Report of your company for the financial year ended, 31st March, 2015.

FINANCIAL HIGHLIGHTS

(Rs. In Lacs)

Particulars 2014-2015 2013-14

Gross Income 477.71 377.97

Profit Before Interest and Depreciation 31.03 16.04

Finance Charges (2.72) (2.36)

Gross Profit 28.31 13.68

Provision for Depreciation (9.11) (8.01)

Net Profit Before Tax 19.2 5.67

Tax Expenses (5.80) (1.55)

Net Profit After Tax 13.36 4.11

STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK

We are in active dialogue with Britannia, for whom we have worked for 24 years as a reliable and dependable supply chain partner of utmost integrity, to give us sufficient volume at appropriate conversion rate for us to be able to continue operating as we have. We seek a viable commercial arrangement with Britannia.

CHANGE IN NATURE OF BUSINESS, IF ANY

Your Company continues to operate in same business segment as that of previous year and there is no change in the nature of the business

DIVIDEND

In order to conserve the resources of the Company, the Board of directors has not recommended any dividend for current year.

AMOUNTS TRANSFERRED TO RESERVES

The Board of Directors proposed to carry nil amounts to General Reserve Account CHANGES IN SHARE CAPITAL, IF ANY

There was no change in the share capital of the Company during the year.

INFORMATION ABOUT SUBSIDIARY/ JV/ ASSOCIATE COMPANY

Company does not have any Subsidiary, Joint venture or Associate Company.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND

The Company has transferred an amount of Rs. 47493 of unclaimed dividend for accounting year 2006-07 to Investor Education And Protection Fund.

MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year to which this financial statement relate and on the date of this report.

MEETINGS OF THE BOARD OF DIRECTORS

During the Financial Year 2014-15, the Company held four Board meetings of the Board of Directors as per Section 173 of Companies Act, 2013 which is summarized below. The provisions of Companies Act, 2013 and listing agreement were adhered to while considering the time gap between two meetings.

S Date of Meeting Board Strength No. of Directors Present No.

1 29/05/2014 6 5

2 28/07/2014 6 5

3 04/11/2014 6 5

4 31/01/2015 6 5

AUDIT COMMITTEE

The role of the Audit Committee is in accordance with the Section 177 of the Companies Act, 2013 which shall include the following:

1) Oversight of the company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

2) The recommendation for appointment, remuneration and terms of appointment of auditors of the company;

3) Approval of payment to statutory auditors for any other services rendered by them.

4) Reviewing, with the management, the annual financial statements before submission to the board for approval, with particular reference to:

a) Matters required tobe included in the Director's Responsibility Statement to be included in the Board's report in terms of clause (C) of sub-section 3 of section 134 of the Companies Act, 2013.

b) Changes, if any, in accounting policies and practices and reasons for the same

c) Major accounting entries involving estimates based on the exercise of judgment by management

d) Compliance with listing and other legal requirements relating to financial statements

e) Disclosure of any related party transactions

5) Reviewing, with the management, the quarterly financial statements before submission to the board for approval

6) Review and monitor the auditor's independence and performance and effectiveness of audit process.

7) Evaluation of internal financial controls and risk management systems.

8) Reviewing the adequacy of internal audit function and frequency of internal audit.

9) Discussion with internal auditors any significant findings and follow up there on

10) To oversee the vigil mechanism and review the functioning of the whistle blower policy

11) Carrying out any other function as is mentioned in the terms of reference of the Audit Committee

The company's Audit Committee comprised of three non executive directors. The board has accepted the recommendations of the Audit Committee. The table sets out the composition and participation of the member at the meeting of audit committee.

Name of director Designation No of meetings attended

Shri Virendra Shah Chairman 4

Shri Sushil P Shah Member 4

Shri Pradip P. Shah Member 2

NOMINATION AND REMUNERATION COMMITTEE

In terms of section 178 of the Companies Act, 2013, it is mandatory for all listed companies to constitute a Nomination & Remuneration Committee (N&RC) to take care of the nomination of Directors, KMP, etc. and remuneration related matters of the Directors, KMPs and Employees, etc.

The Terms of Reference of the Nomination & Remuneration Committee include followings.

1) To identify persons who may be appointed in senior management and shall carry out evaluation of every Director's performance.

2) To recommend to the Board a policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees.

3) The Nomination and Remuneration Committee shall, while formulating the policy ensure that:

a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

b) elationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

4) Regularly review the Human Resource function of the Company

5) Discharge such other function(s) or exercise such power(s) as may be delegated to the Committee by the Board from time to time.

6) Any other work and policy, related and incidental to the objectives of the committee as per provisions of the Act and rules made there under.

REMUNERATION TO DIRECTORS

The remuneration paid to Executive Directors is recommended by the Nomination and Remuneration Committee and approved by Board in Board meeting, subject to the subsequent approval of the shareholders at the General Meeting and such other authorities, as may be required. The remuneration is decided after considering various factors such as qualification, experience, performance, responsibilities shouldered, industry standards as well as financial position of the Company. Remunerationpaid for the year ended 31st March, 2015was as under:

Name of the Period of appointment Remuneration Approving director (in lacs) authority

Shri Janak For period of five years P. Shah with effect from 01/10/2014 10.13 32nd AGM

Shri S. R. For period of three years 33rd AGM Kahar with effect from 01/10/2015 4.01 (ensuing)

Shri Nirav For period of five years J Shah with effect from 01/10/2014 10.61 32nd AGM

TOTAL 24.75

RATIO OF REMUNERATION TO EACH DIRECTOR

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Directors is furnished here as annexure 1.

STAKEHOLDER RELATIONSHIP COMMITTEE

The terms of reference of the Committee include reviewing and redressing complaints from shareholders such as nonreceipt of annual report, transfer of shares, issue of duplicate share certificates, etc.; to oversee and review all matters connected with transfers, transmissions, dematerialization, rematerialization, splitting and consolidation of securities; to oversee the performance of the Registrar and Transfer Agent and recommends measures for overall improvement in the quality of investor services; and to perform any other function, duty as stipulated by the Companies Act, Securities & Exchange Board of India, Stock Exchanges and any other regulatory authority or under any applicable laws, as amended from time to time.

Committee met four times during FY 2014-15 i.e. 29/05/2014, 28/07/2014, 04/11/2014 and 31/01/2015. The Composition of the Stakeholders Relationship Committee and details of Members participation at the Meetings of the Committee are as under:

Name Position No of meetings attended

Shri Virendra Shah Chairman 4

Shri Janak P Shah Member 4

In addition, Details of Shareholders' Complaints received during the year are as follows:

Particulars No. of Complaints

Investor complaints pending as at April 1,2014 0

Investor complaints received during the year ended on March 31,2015 0

Investor complaints resolved during the year endedMarch 31,2015 0

Investor complaints pending as on March 31,2015 0

Share transfer committee

The Stakeholder relationship committee has delegated power of approving transfer of securities to ShriJanak P Shah and ShriNirav J Shah. The Committee, inter alia, reviews and approves the transfer/ transmission/ D-mat of equity shares as submitted by BigShare., the Registrar & Transfer Agent of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors of the Company confirms that-

a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) The directors had prepared the annual accounts on a going concern basis; and

e) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DIRECTORS AND KMP

In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013,Shri Janak. P. Shah(DIN- 01880079) and Shri Sushil P. Shah (DIN-02529990) would retire by rotation at the ensuing AGM and being eligible, offers himself for reappointment.

The term of the Shri Shrichand Kahar as Director is Expiring on 30/09/2015. On recommendation of Nomination & Remuneration Committee. Your Directors recommend to approve his reappointment as Director for further period of 3 years on a remuneration as specified in the Notice calling Annual General Meeting.

During the current financial year the following changes have occurred in the constitution of directors of the company:

Mrs. Pushpa Janak Shah holds the position till this AGM. The Board has issued the notice for her reappointment and recommends her resolution for the approval of the shareholders at AGM.

The Board has identified the following officials as Key Managerial Personnel pursuant to Section 203 of the Companies Act, 2013:

1. Mr.Nirav J. Shah- Managing Director & CEO

2. Mr. Janak P. Shah - Chief Financial Officer

INDEPENDENT DIRECTORS AND DECLARATION

Mr. Virendra Shah has been appointed as the independent director of the company as per Section 149(10) of the Companies Act, 2013 on 20/09/2014 for a term of 5 (Five) consecutive years on the Board of the Company.

The Board of Directors of the Company hereby confirms that the Independent director duly appointed by the Company has given the declaration and he meet the criteria of independence as provided under section 149(6) of the Companies Act, 2013.

AUDITORS AND REPORT THEREON

M/s Dinesh R Shah & Co., Chartered Accountants, Ahmedabad retire at the ensuing Annual General Meeting and, being eligible; offer themselves for reappointment for a period of two years from the conclusion of this Annual General Meeting [AGM] till the conclusion of 35th AGM

There are no qualifications or adverse remarks in the Auditors' Report which require any clarification/ explanation. The Notes on financial statements are self-explanatory, and needs no further explanation.

SECRETARIAL AUDIT REPORT

The company has appointed M/s Pinakin shah & Co., Practicing Company Secretary as secretarial auditor to conduct audit under section 204 of the Companies Act, 2013.

There are qualifications or adverse remarks in the Secretarial Audit Report which require clarification/ explanation.

Sr Remarks Explanation no.

1 Non-compliance of regulation The website was under maintenance 54 of the listing agreement- at the time of secretarial audit.

2 Non-compliance of section 149 The Company had two independent (4) of the Companies Act,2013. directors till October, 2014. Our -appointment of independent Company falls in the category of director small Company and it is our endeavor to appoint Independent Director as early as possible.

3 Schedule IV of the Companies As there is one Independent Act, 2013. - Meeting of Director there was no separate Independent Director. meeting of Independent Director was held.

4 Non-compliance of section 203 No Company Secretary likes to of the Companies Act, 2013. join Small Scale Industry (SSI) - Appointment of Company Company Secretary

5 Non-compliance of Section 177 The Company has constituted audit and 178 of the Companies Act, committee and nomination & 2013 as Company does not have remuneration committee with three required independent directors. non-executive directors.

6 Non-compliance of Clause 41 Notice convening the Board (III) of the listing agreement Meeting were sent to BSE as per listing agreement and was uploaded on the website.

The Secretarial Audit Report for the financial year ended, 31st March, 2015 is annexed herewith for your kind perusal. DEPOSITS

The company has not accepted any deposits during the year LOANS, GUARANTEES AND INVESTMENTS

There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable

RELATED PARTY TRANSACTIONS

The Company has not entered into any Related Parties Transactions as defined under Section 188 of the Companies Act, 2013 with related parties as defined under Section 2 (76) of the said Act.

CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

A. Conservation of energy

a) The Company has not made any investment for (energy conservation) and taken any specific measures to reduce energy cost per unit. However, it intends to conserve energy for future generation.

B. Technology absorption

There is no research and development activity carried out by the Company.

C. Foreign exchange earnings and Outgo

There were no foreign exchange earnings and outgo during the year under review.

RISK MANAGEMENT

Periodic assessments to identify the risk areas are carried out and management is briefed on the risks in advance to enable the company to control risk through a properly defined plan. The risks are classified as financial risks, operational risks and market risks. The risks are taken into account while preparing the annual business plan for the year. The Board is also periodically informed of the business risks and the actions taken to manage them. The Company has formulated a policy for Risk management with the following objectives:

* Provide an overview of the principles of risk management

* Explain approach adopted by the Company for risk management

* Define the organizational structure for effective risk management

* Develop a "risk" culture that encourages all employees to identify risks and associated opportunities and to respond to them with effective actions.

* Identify access and manage existing and new risks in a planned and coordinated manner with minimum disruption and cost, to protect and preserve Company's human, physical and financial assets.

CORPORATE SOCIAL RESPONSIBILITY

The company does not meet the criteria of Section 135 of Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 so there is no requirement to constitute Corporate Social Responsibility Committee.

ANNUAL EVALUATION

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees.

A separate exercise was carried out to evaluate the performance of individual Directors includingthe Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board.

VIGIL MECHANISM

As per Section 177(9) and (10) of the Companies Act, 2013, the company has established Vigil Mechanism for directors and employees to report genuine concerns and made provisions for direct access to the chairperson of the Audit Committee. Company has formulated the present policy for establishing the vigil mechanism/ Whistle Blower Policy to safeguard the interest of its stakeholders, Directors and employees, to freely communicate and address to the Company their genuine concerns in relation to any illegal or unethical practice being carried out in the Company.

INTERNAL CONTROL SYSTEM

The Company has in place, adequate systems of Internal Control to ensure compliance with policies and procedures. It is being constantly assessed and strengthened with new / revised standard operating procedures and tighter Information Technology controls. Internal audits of the Company are regularly carried out to review the Internal Control Systems.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

Internal financial control is in place commensurate with the size of the Company

EXTRACT OF ANNUAL RETURN

The Extract of Annual Return as required under section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, in Form MGT-9 is annexed as annexure-2 herewith for your kind perusal and information.

SHARES

BUY BACK OF SECURITIES

The Company has not bought back any of its securities during the year under review.

SWEAT EQUITY

The Company has not issued any Sweat Equity Shares during the year under review.

BONUS SHARES

No Bonus Shares were issued during the year under review.

EMPLOYEES STOCK OPTION PLAN

The Company has not provided any Stock Option Scheme to the employees.

SHARES IN SUSPENSE ACCOUNT

i. Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year: Nil

ii. Number of shareholders who approached issuer for transfer of shares from suspense account during the year: Not Applicable

iii. Number of shareholders to whom shares were transferred from suspense account during the year: Not Applicable

iv. aggregate number of shareholders and the outstanding shares in the suspense account lying at the end of the year: Nil

v. That the voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares: Not Applicable

SHARES IN UNCLAIMED SUSPENSE ACCOUNT

i. Aggregate number of shareholders and the outstanding shares lying in the Unclaimed Suspense Account at the beginning of the year Nil

ii. Number of shareholders who approached the issuer for transfer of shares from the Unclaimed Suspense Account during the year: Not Applicable

iii. Number of shareholders to whom shares were transferred from the Unclaimed Suspense Account during the year: Not Applicable

iv. Aggregate number of shareholders and the outstanding shares lying in the Unclaimed Suspense Account at the end of the year: Nil

MATERIAL VARIATIONS

The material variations between the projections and the actual utilization/profitability are as follows: Nil CODE OF CONDUCT

The Code of Conduct for all Board members and Senior Management of the Company have been laid down and are being complied with in words and spirit.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

No orders were passed by the regulators or courts or Tribunals impacting the going concern status and company's operation in future.

ACKNOWLEDGEMENT

The Board places on record their appreciation of the support of all stakeholders.

Place: Ahmedabad By order of the Board Date: 01/08/2015

Registered office: Mr. Janak P shah Chhatral, Kalol-Mehsana Highway, Vice Chairman Taluka - Kalol, Gandhinagar- 382729 DIN: 01880079

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Mar 31, 2014

Dear Members,

The Directors are pleased to present the Thirty Second Annual Report and the Audited Accounts for the financial year ended March 31, 2014.

SUMMARY OF FINANCIAL RESULTS F.Y.2013-2014 F.Y.2012-2013 (Rs. in Lacs) (Rs. in Lacs)

INCOME FROM OPERATIONS 36,711,299 24,042,897

Add : Gain/-Loss From Trading 5,45,576 1,80,199

Add : Other Income 5,40,570 248,469

Total Income 37,797,445 24,111,167

Less : Expenditures 36,191,872 23,347,381

Less : Finance Charges 2,36,677 43,643

Less : Depreciation 8,01,356 710,862

PROFIT FOR THE YEAR BEFORE TAX 5,67,540 9,282

Less : Provision for Taxation 190,000 43,000

Less: Provision for Deferred Tax (34,278) (58,671)

Net Surplus for the year 4,11,818 24,952

Financial Performance

Net Revenue from Operations for the year ended March 31,2014 was Rs 377.97lacs representing an increase of 56.76 per cent over the previous year.

Profit before tax for the year was at Rs 5.67lacs representing an increase of 6014.41 per cent over the previous year.

Appropriations

Dividend

The Company has not recommended any dividend for current year.

Transfer to Reserves

According to Companies (Transfer of Profits to Reserves) Rules, 1975, Company is not mandatorily required to transfer certain minimum percentage of profits to general reserve and hence the Board has recommended a transfer of Rs. NIL to the general reserve and an amount of Rs. 4,11,818/- has been retained in statement of Profit and Loss.

Listing Of Shares

The Company''s share continues to remain listed with the Bombay Stock Exchange, where the shares are actively traded.

Outlook

We are in active dialogue with Britannia, for whom we have worked for 23 years as a reliable and dependable supply chain partner of utmost integrity, to give us sufficient volume at appropriate conversion rate for us to be able to continue operating as we have. We seek a viable commercial arrangement with Britannia.

Directors

Shri Nirav Shah [DIN 01880069] and Shri Pradip Shah [DIN 00066242] retire at the Annual General Meeting and have offered themselves for re-appointment. It is also proposed to reappointment Shri Janak Shah [Din 01880079] as a Whole Time Director,[CFO] and Shri Nirav Shah [Din 01880069] as an Managing Director,[CEO]. It is also proposed to reappoint Shri Virendra Shah [DIN 00643925] as Independent Directors of the Company for a term up to five years, at the forthcoming Annual General Meeting.

Necessary Resolutions for the appointment of the aforesaid Directors have been included in the Notice convening the ensuing Annual General Meeting and details of the proposals for appointment are mentioned in the explanatory statement to the Notice-Statutory Disclosures:

Conservation of energy, technology absorption and Foreign Exchange earnings and outgo is provided below:

1. Conservation of energy:

a. The company has not made any investment [for energy conservation] and taken any specific measures to reduce energy cost per unit. However, it intends to conserve energy for future generation.

b. Part A pertaining to conservation of energy is applicable to the Company.

Power & Fuel Consumption

a. ELECTRICITY

I. Purchased Current year Previous Year

Unit 3,22,310 2,15,520

Total Amount Rs.21,95,694 Rs. 16,03,992

Rate/Unit Rs. 7.40 Rs. 6.81

II. Own generation

1. Through diesel generator Nil

2. Through stream turbine generator Nil

b. Consumption of coal Nil

c. Consumption of furnace oil Nil

2. Technology Absorption

There is no Research and Development activity carried out by the Company.

3. Foreign Exchange Earnings and Outgo

The Company has neither used nor earned any foreign exchange during the year Personnel

The Industrial Relations scenario continued to be cordial. The Company regards its employees as a great asset and accords high priority to training and development of employees.

Information as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Amendment Rules, 2011 is Nil.

Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed;

(b) Appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at March 31,2014 and of the profit of the Company for the year ended March 31,2014;

(c) Proper and sufficient care has been taken 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;

(d) The annual accounts have been prepared on a going concern basis.

Cash Flow

A Cash Flow statement for the year ended on 31 st March, 2014 is attached to the Balance Sheet.

Auditors

M/s Dinesh R Shah & Co., Chartered Accountants, Ahmedabad [Membership No.047928] were appointed as the statutory auditors of the Company for financial year 2013-14 at the Annual General Meeting of the Company held on 21 / 09/2013. M/s Dinesh R Shah & Co., Chartered Accountants, Ahmedabad [Membership No.047928] have been the Auditors of the Company since 29/09/2007 and have completed a term of 7 years. As per the provisions of section 139 of the Act, no listed company can appoint or re-appoint an audit firm as auditor for more than two terms of five consecutive years and has also provided a period of three years from the date of commencement of the Act to comply with this requirement.

In view of the above, M/s Dinesh R Shah & Co., Chartered Accountants, Ahmedabad [Membership No.047928] being eligible for re-appointment, offer themselves for re-appointment and based on the recommendation of the Audit Committee, , the Board of Directors proposes their reappointment as the statutory auditors of the Company. However they will eligible for reappointment for a maximum period of three year to hold office from the conclusion of this AGM.

Fixed Deposits

No fixed deposits were accepted from the public during the year.

Insurance

The Company''s assets are adequately insured against major risks.

ISO: 22000-2005 CERTIFICATE

Your company has obtained ISO: 22000-2005 certificate for food safety by TUV-SUD Management Services GmbH - trading as TUV South Asia Private Ltd., valid up to 22-01 -2016.

Acknowledgement

The Board appreciates and places on record the contribution made by employees to the sustained satisfactory business performance during the period under review. The Board also places on record their appreciation of the support of all stakeholders particularly shareholders, customers, suppliers, the medical fraternity and business partners, all of whom have contributed to the Company''s success.

Place: Ahmedabad For and on behalf of the Board Date:26/07/2014 Vice Chairman Registered Office: Chhatral, Kalol-Mehsana Highway Road, Taluka-Kalol, Dist. Gandhinagar. Gujarat-382729

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Mar 31, 2010

The Directors submit herewith the Annual Report together with audited statement of accounts for the year ended March 31, 2010.

FINANCIAL RESULTS F.Y. 2009-2010 F.Y.2008-2009

(Rs. in Lacs) (Rs. in Lacs)

INCOME FROM OPERATIONS 203.98 241.70

Add : GainALoss From Trading 15.54 -8.57

Add : Other Income 2.84 4.72

Total Income 222.36 237.85

Less : Expenditures 182.02 212.28

Less : Finance Charges 0.18 0.55

Less : Depreciation 6.70 6.56

PROFIT FOR THE YEAR BEFORE TAX 33.46 18.46

Less : Provision for Taxation 7.13 7.50

Less : Provision for FBT 0.00 0.31

Less : Provision for Deferred Tax 0.01 1.07

Net Surplus for the year 26.32 9.58

Add: B/F from P & L A/c 27.08 27.49

Balance for Appropriation 53.40 37.07

Less : Proposed Dividend 5.97 5.97

Less : Tax on Dividend 0.93 1.02

Less : Transfer to General Reserves 3.00 3.00

Net Balance c/f to Balance Sheet 43.50 27.08

DIVIDEND

The Board recommends a dividend of 10% (Re. 1 per share; 2008-2009; Re. 1 Per Share) which will absorb Rs. 6.90 lacs together with tax on Dividend of Rs. 0.93 Lacs. The Board has transferred Rs. 3.00 lacs to the General Reserves and proposed to carry forward balance in profit and loss account of Rs. 43.50 Lacs.

PERFORMANCE OF THE COMPANY

The company produced 4659 metric tonnes of biscuits as against 4,925 metric tonnes in the previous year, for our principal customer. However, profits from manufacturing operations are not satisfactory and we continue to raise this issue with Britannia. We continue to face the situation of inadequate orders on us from Britannia relative to our capacity, unevenness of order book month by month, as well as sudden reduction in ordered quantity.

OUTLOOK

The management continues to request Britannia to increase production volume of the current varieties. They have also loaded us with Good Day butter and Cashew varieties from the first quarter of this year. Your company is also examining opportunities for diversification with urgency.

AUDITORS

The statutory Auditors M/s Dinesh R. Shah & Co. Chartered Accountants, Ahmedabad retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

ISO: 22000-2005 CERTIFICATE AND PRIZE FROM BRITANNIA

Your company has obtained ISO: 22000-2005 certificate for food safety by TUV-SUD Management Services GmbH - trading as TUV South Asia Private Ltd.- valid up to March, 2013

We are pleased to inform you that your company has been selected as best franchisee for having Zero Foreign Body Contamination (FBC) during financial year 2006-07, 2007-08, 2008-09 and again in financial year 2009-10, and was awarded Rs. 50,000/- cash prize by our principal customer Britannia Industries Ltd. for the last three years.

CORPORATE GOVERNANCE

The Company has complied with the provision of listing agreement. A compliance certificate confirming compliance with the company laws is annexed and forms a part of the Directors, Report.

The company has put up email ID for investor grievances. Shareholders may lodge their complaint or grievances to Compliance Officer for quick resonse on following email ID [email protected]

The Registrars and Share Transfer Agents of the company are M/S Bigshare Servicex Pvt. Ltd., E/2, Ansa Industrial Estate, Sakivihar Road, Saki-Naka, Andheri (East), Mumbai - 400 072.

Of the subscribed capital of company of 5,97,500 shares, 4,55,185 shares have been dematerialized upto March 31,2010. Shareholders are requested to send their physical shares for dematerialization through their depository participants. The companys ISIN No. is INE 455D01012.

DIRECTORS

Mr. Virendra P. Shah retires by rotaion and, being eligible, offers himself for re-appointment.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 2000, the Directors state as under.

1. That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures:

2. That the directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the

state of affairs of the company at the end of the financial year and of the profit or loss of the company for the period;

3. That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

4. That the directors have prepared the annual accounts on a going concern basis.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY AND ABSORBTION AND FOREIGN EXCHANGE EARNINGS

As reported last year, the management took steps to improve fuel efficiency and energy conservation in this expansion and modernization programme.

1. Secured piped natural gas connection and switched over to gas as fuel for the oven from liquid fuel.

2. Replaced tube light chokes with electronic ballast to save electric power. Provided mirror-optic light fixtures with electronic ballast in newly built-up factory building. Also provided energy-efficient Super Saver Meta-Halide light fixtures in the factory premises.

3. Provided 80 KVAR capacitor bank with auto power factor control panel to improve power factor & reduce energy consumption.

4. Provided natural roof extraction ventilators in shop-floor & godown area for natural air circulation on shop floor and translucent fiberglass roofing sheets for providing natural day light.

5. Provided energy efficient man coolers & desert coolers for improving air circulation in the factory.

6. Replaced A.C. servo drives with Variable Frequency Drives.

As required in Section 217 (1) (e) of the Companies Act, 1956 details regarding conversion of energy, etc. are given hereunder:

FORM-A

(A) PARTICULARS :

Power and Fuel Consumption 2009-2010 2008-2009

1. Electricity Purchased : Units 2,76,690 3,51,429

Amount (Rs. Lacs) 16.15 20.65

Average Rate/Unit Rs. 5.84 5.88

2. LDO/HSD: K. Litres FY 09-10 (01-4-08 to 30-11-08) 0.00 202.92

Amount (Rs. Lacs) 0.00 73.85

Average Rate/K.L. Rs. 0.-00 36,394.19

3. GAS SCM FY 09-10 (01-12-08 to 31-03-09) 3,14,373.45 81,122.30

Amount(Rs. Lacs) 53.97 15.28

Average rate/SCM Rs. 17.17 18.84

(B) CONSUMPTION PER UNIT OF PRODUCTION OF BISCUITS :

1. Electricity ( KWH/T) 59.39 71.36

2. LDO/HSD - (KL/T) 01-04-08 to 30-11-08 0.00 0.0540

3. GAS (SCM/T) 01-12-08 to 31-03-09 67.477 69.693

PARTICULARS OF EMPLOYEES :

There is no employee drawing remuneration in excess of Rs.24,00,000/- per annum or Rs. 2,00,000/- per month or above whose particulars are required to be annexed to the Directors Report under Section 217(2A) of the Companies Act, 1956.

DEPOSITS

The company has not accepted deposits from the public under section 58A of the Companies Act, 1956.

INSURANCE

All the fixed assets and stocks of the company are adequately insured.

APPRECIATION

Your directors place on record appreciation of services rendered to the company by employees, customers and suppliers as well as our bankers and Government authorities.

For and on behalf of the Directors

Place : Ahmedabad Pradip P. SHAH

Date: 29-07-2010 Chairman