NHC Foods 20th AR - 2011-12 - Moneycontrol.com · 2013. 3. 12. · 20th ANNUAL REPORT NHC FOODS...

20th ANNUAL REPORT

NHC FOODS LIMITED

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CORPORATE INFORMATION

20th ANNUAL GENERAL MEETINGOn the Thursday, 27th September, 2012 at 10.30 a. m. at Mualana Azad Hall,

Guru Narayan Road, Near Reliance Energy, Santacruz (East), Mumbai - 400055

Board of Directors :

Mr. Apoorva Shah …. Chairman &

Managing Director

Mrs. Alpa Shah …….. Whole-Time Director

Mr. Aashish Vyas …. Director

Mr. Rajiv Bhatt …….. Director

Registered Office :

‘NHC House’

2/13, Anand Nagar,

Santacruz (E),

Mumbai – 400055

Statutory Auditors :

M/s. NGS & Co.

Chartered Accountants

Mumbai

Registrar & Share Transfer Agents :

M/s. System Support Services

209, Shivai Industrial Estate,

89, Andheri Kurla Road,

Saki Naka, Andheri (E),

Mumbai – 400072

Board Committees :

Audit Committee :Mr. Aashish Vyas …. Chairman

Mr. Apoorva Shah … Member

Mr. Rajiv Bhatt ….…. Member

Remuneration Committee :Mr. Rajiv Bhatt …..... Chairman

Mr. Aashish Vyas …. Member

Mr. Apoorva Shah … Member

Shareholders'/Investor's GrievancesCommittee :Mr. Rajiv Bhatt …..... Chairman

Mr. Aashish Vyas …. Member

Mrs. Alpa Shah ….... Member

Bankers :Union Bank of India

State Bank of India

HDFC Bank

Company Secretary :Ms. Suvarnalata Chavan

20th ANNUAL REPORT2

NOTICE

NOTICE is hereby given that the Twentieth AnnualGeneral Meeting of the Members of NHC Foods Limitedwill be held on Thursday, the 27th day of September,2012 at 10.30 a.m. at Maulana Azad Hall, GuruNarayan Road, Near Reliance Energy, Santacruz (E),Mumbai – 400055 to transact with or withoutmodification(s), as may be permissible the followingbusiness:

ORDINARY BUSINESS :

1. To receive, consider and adopt the Audited Profitand Loss Account for the year ended 31st March,2012 and the Balance Sheet as at that datealongwith the Reports of the Board of Directors andAuditors’ thereon.

2. To appoint a Director in place of Mr. Rajiv Bhatt,who retires by rotation, and being eligible, offershimself for re-appointment.

3. To appoint Auditors and to fix their remunerationand in this regard to consider and if thought fit, topass, with or without modification(s), the followingresolution as an Ordinary Resolution:

“RESOLVED THAT M/s. NGS & Co., CharteredAccountants, be and are hereby appointed asAuditors of the Company, to hold office from theconclusion of this Annual General Meeting until theconclusion of the next Annual General Meeting ofthe Company on such remuneration as shall befixed by the Board of Directors.”

By the order of the Board of Directors,

Suvarnalata Chavan (Company Secretary)

Registered Office:NHC FOODS LTD.2/13, Anand Nagar, Santacruz (East),Mumbai - 400055

Place: MumbaiDate: 26th May, 2012

NOTES :

1. A MEMBER ENTITLED TO ATTEND AND VOTEAT THE MEETING IS ENTITLED TO APPOINT APROXY TO ATTEND AND VOTE INSTEAD OFHIMSELF AND THE PROXY NEED NOT BE AMEMBER OF THE COMPANY. PROXIES, INORDER TO BE EFFECTIVE, MUST BEDEPOSITED AT THE REGISTERED OFFICE OFTHE COMPANY NOT LATER THAN 48 HOURSBEFORE THE COMMENCEMENT OF THEMEETING.

2. The Register of Members and Share TransferBooks of the Company will remain closed fromMonday, 24th September, 2012 to Thursday, 27th

September, 2012, both days inclusive, in terms ofthe provisions of Section 154 of the Companies Act,1956 and the applicable Clauses of ListingAgreement entered into with the Stock Exchanges.

3. The members are requested to:

(a) Intimate to the Company’s Registrar andShare Transfer Agents M/s. System SupportServices (for shares held in physical form) andto their Depository Participants (DP) (forshares held in dematerialized form) thechanges, if any, in their registered addressdetails at an early date;

(b) Quote ledger folio numbers / DP Identity andClient Identity Numbers in all theircorrespondences;

(c) Approach the Company for consolidation offolios, if shareholdings are under multiplefolios;

(d) Get the shares transferred in joint names, ifthey are held in single name to avoidinconvenience;

(e) Members desirous of obtaining anyinformation concerning the accounts andoperations of the Company are requested toaddress their questions to the Company at theRegistered Office address so as to reach atleast seven days before the date of theMeeting, to enable the information requiredto be made available at the Meeting, to thebest extent possible.

(f) In terms of circulars issued by Securities andExchange Board of India (SEBI), it is now

20th ANNUAL REPORT

NHC FOODS LIMITED

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mandatory to furnish a copy of PAN card tothe Company or its RTA in the following casesviz. Transfer of Shares, Deletion of name,Transmission of shares and Transposition ofshares. Shareholders are requested to furnishcopy of the PAN card for all the abovementioned transactions.

(g) Members are requested to bring theirAttendance Slip along-with copy of the Reportand Accounts to the Annual General Meeting.

4. Corporate members intending to send theirauthorised representatives to attend the Meetingare requested to send to the Company a certifiedcopy of the Board Resolution authorising theirrepresentative to attend and vote on their behalf atthe Meeting.

5. Members are informed that in case of joint holdersattending the meeting, only such joint holder whois higher in the order of names will be entitled tovote.

6. A brief profile of the Directors retiring by rotationand eligible for reappointment, as stipulated underclause 49(IV)(G) of the Listing Agreement areprovided as an annexure to the Notice. TheCompany has received the requisite Form DD-Afrom the said Directors in terms of Companies(Disqualification of Directors under Section274(1)(g) of the Companies Act, 1956) Rules 2003confirming their eligibility for re-appointment.

7. In terms of section 109A of the Companies Act,1956, Members are entitled to make nomination inrespect of shares held by them in physical form.Members desirous of making nominations arerequested to send their requests in Form 2B induplicate to the registered office of the Companyor the Registrars. The nomination forms will bemade available to the members on request.

8. Members holding shares in physical form arerequested to immediately intimate changes, if any,in their registered addresses along with the PinCode to the Company or the Registrars so as toenable the Company to address futurecommunication to their correct addresses.

9. Members holding shares in electronic form arerequested to intimate immediately any change intheir address or bank mandates to their DepositoryParticipants (DP) with whom they are maintaining

their demat accounts. Members holding shares inphysical form are requested to advise any changeof address immediately to the Company/Registrarsand Transfer Agents, M/s. System SupportServices.

By the order of the Board of Directors,

Suvarnalata Chavan (Company Secretary)



20th ANNUAL REPORT4

DISCLOSURE PURSUANT TO CLAUSE 49 OF THE LISTING AGREEMENT :Disclosure of Directors seeking appointment/re-appointment at the ensuing Annual General Meeting to beheld on 27th September, 2012.

Name of the Directors Mr. Rajiv Bhatt

Date of Birth 22/11/1965

Date of Appointment 30/08/2008

No. of Shares Held Nil

Expertise in specific Functional Area Electronics Engineer having vast businessexperience

Qualifications Diploma in Electronics Engineering

List of Companies in which outside Directorship Shingar Limitedheld as on 31.03.2012 (excluding Private andForeign Companies)

Chairman/Member of the Audit Committee and NILInvestor Grievance Committee of otherCompanies, of which he is a Directoras on 31.03.2012

By the order of the Board of Directors,Suvarnalata Chavan

(Company Secretary)Registered Office:NHC FOODS LTD.2/13, Anand Nagar, Santacruz (East),Mumbai - 400055Place: MumbaiDate: 26th May, 2012

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NHC FOODS LIMITED

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DIRECTORS’ REPORT

Dear Members,

Your Directors are pleased to present their TwentiethAnnual Report together with the Audited FinancialStatement of Accounts along with the Report of theAuditors for the year ended 31st March, 2012.

FINANCIAL HIGHLIGHTS:

The Financial Highlights of your Company for the yearunder review are given below:

( In Lacs)

2011-2012 2010-2011

Total Income 9326.27 7311.06Profit Before Depreciation & Tax 162.38 125.10Less : Depreciation 87.09 76.97Profit Before Tax 75.29 48.13Less : Earlier year adjustment – –Less : Provision for Tax – 7.44Less : Deferred Tax 28.98 (4.58)Profit After Tax 46.31 45.27

OPERATIONS

During the year under review, your Company hasrecorded income of 9326.27 Lacs as against 7311.06Lacs in the previous year. The Net Profit for the financialyear ended 31st March, 2012 increased to 46.31 Lacsfrom 45.27 Lacs in the previous year.

A) NHC FOODS LTD – “SAAZ”

Vision – India’s Finest Premium Brand for Spice & SpiceMixes.

Mission – Export Quality Spices & Spice Mixes atAffordable Prices for All.

Aim – Presence of NHC Foods Ltd Saaz in Pan India by2014 – 2015.

Objective – To Capture 45% of Unorganized SpiceMarket Share in India

Current Upgradation for 2012 – 2013 – launch of 7new variants in September 2012 – Chole Masala,Sambhar Masala, Paani Puri Masala, Kitchen Mix, EggCurry Masala, Fish Masala, Jaljeera Masala, this willincrease the sale volume and turnover.

Brand Guru Mr. Jagdeep Kapoor of SamsikaMarketing Consultants appointed as marketingconsultant for the success of ‘NHC SAAZ’.

Final stage of negotiation for Exporting NHC SAAZ toUSA, South Africa, UAE, Malaysia & Israel.

BUSINESS OUTLOOK:

A rapidly growing domestic economy with changingconsumption patterns presents huge opportunity for yourCompany going forward and has draw up a strategy tocontinue its focus on the branded food business. It willcontinue to introduce new products and penetrate newmarkets, overseas.

DIVIDEND:

In order to conserve the resources for the futureexpansion plan of the Company & plans underimplementation, your Directors do not recommend anydividend for the year under review.

TECHNOLOGY AND QUALITY:

Your Company has already obtained various qualityCertifications in its name, such as:-

• *ISO 9001:2008 - for its satisfactory development,implementation and continual improvements inManagement Operations Systems for procurementand dispatch of Whole & Grounded Spices andother food products and Miscellaneous assortedproducts for grocery.

• ISO 22000: 2005 - (Food Safety ManagementSystems) - is awarded to our plant at Pardi, Gujarat,for laying down a set of standardized requirementsfor Food Safety Management Systems aftersatisfactory verification and validations of its FoodSafety Management Systems. This certificationwould have following benefits to our organization:

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• A truly global international standard that covers themajority of the requirements of the current foodsafety standards.

• Complies with the Codex HACCP principlesenabling the communication of HACCP conceptsinternationally. HACCP compliance / HACCPcertification helps organizations focus on thehazards affecting food safety and hygiene and alsoidentifies them by setting up control limits at criticalpoints during the food production process.

• An auditable standard with clear requirementswhich provides a framework for third partycertification.

• Our Company, has received the *‘Star Export HouseStatus’ by the Ministry of Commerce and Industry,Office of Zonal Joint Director of Foreign Trade, arecognition granted to established exporters forpromoting India’s exports and to building upmarketing infrastructure and expertise required forexport promotion.

(*The said certifications are transferred in the name ofour Company from erstwhile, M/s. NHC Industries PrivateLimited, pursuant to the Scheme of Amalgamation).

At NHC FOODS LTD, quality is of paramount importance.Thus, the Company ensures that stringent quality checksare followed at each and every stage of processing sothat the end result surpasses the expectations of itscustomers.

CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE:

A Statement giving details of Conservation of Energy,Technology Absorption, Foreign Exchange Earnings andOutgo in accordance with the Companies (Disclosure ofParticulars in the Report of Board of Directors) Rules,1988 is annexed to this report.

Report on Management Discussion & Analysis isprovided in a separate section and forming part of thisAnnual Report.

PARTICULARS OF EMPLOYEES:

Your Company does not have any employee of thecategory as specified in Section 217 (2-A) of theCompanies Act, 1956 read with the Companies(Particulars of Employees) Rules, 1975, as amendedthereto from time to time.

DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) ofthe Companies Act, 1956 with respect to Directors’

Responsibilities Statement, your Directors herebyconfirm:

(1) that in the preparation of the annual accounts forthe year ended 31st March, 2012, the applicableaccounting standards have been followed alongwith proper explanation relating to materialdepartures.

(2) that the Directors have selected such accountingpolicies and applied them consistently and madejudgments and estimates that are reasonable andprudent so as to give a true and fair view of thestate of affairs of the Company at the end of thefinancial year and of the profit or loss of theCompany for the financial year;

(3) that the Directors have taken proper and sufficientcare for the maintenance of adequate accountingrecords in accordance with the provisions of theCompanies Act, 1956 for safeguarding the assetsof the Company and for preventing and detectingfraud and other irregularities; and

(4) that the Directors have prepared the annualaccounts on a going concern basis.

INTERNAL AUDIT AND CONTROLS:

During the year under review, your Company hasappointed M/s. Surekha Associates, CharteredAccountants as its Internal Auditor. Your Companycontinued to implement their suggestions andrecommendations to improve the control environment.

Their scope of work includes safeguarding the assets ofyour Company, review of operational efficiency,effectiveness of systems and processes and assessingthe internal control strengths in all areas of operations.

The Internal Auditors findings are discussed with theprocessing persons and suitable corrective actions aretaken as per the Directions of the Audit Committee on agoing concern basis to improve the efficiency inoperations.

AUDITORS & THEIR REPORT:

In terms of provisions of Section 224 of the CompaniesAct, 1956, M/s. NGS & Co., Chartered Accountants retireat this Annual General Meeting and being eligible, offerthemselves for re-appointment. Pursuant to therecommendations of the Audit Committee forreappointment of M/s. NGS & Co. as Statutory Auditorsof the Company for the Financial year 2012-13, the Board

20th ANNUAL REPORT

NHC FOODS LIMITED

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of Directors have, subject to the approval of theshareholders have approved the re-appointment of M/s.NGS & Co. as Statutory Auditors of the Company for theFinancial Year 2012-13 and to hold the office till theconclusion of the next Annual General Meeting.

Resolution seeking your approval on this item is includedin the Notice convening the Annual General Meeting.Members are requested to consider the appointment ofM/s. NGS & Co., Chartered Accountants, Mumbai, forthe year 2012-13, on a remuneration to be decided bythe Board of Directors, in consultation with the said firmof Auditors.

DIRECTORS:

Pursuant to Article 138 of Article of Association of theCompany Mr. Rajiv Bhatt, Non – executive IndependentDirector of your Company retires from the office asDirector of your Company, at the ensuing Annual GeneralMeeting & being eligible, offers himself for re-appointment.

Mr. Jai Popat, Non - executive Independent Directorstepped down from the Board of the Company, with effectfrom 17th August, 2011 and your Directors wish to placeon record their appreciation of the distinguished servicesrendered by him and for his rich and valuablecontributions made to the Company.

The Board recommended the above re-appointment.Resolution seeking your approval on these items areincluded in the Notice convening the Annual GeneralMeeting together with brief resumes of the Directorsbeing re-appointed.

As stipulated by Clause 49 of the Listing Agreement,brief profile of the Director seeking re-appointment,nature of his expertise in specific functional area andnames of Companies in which he is director are providedinto Annual Report.

FIXED DEPOSITS:

During the year under review, the Company has notaccepted any Deposits within the meaning of Section58A of the Companies Act, 1956 from the Public. Hence,as on 31st March, 2012 there are no unclaimed depositslying with the Company.

DEPOSITORY SYSTEM:

As the Shareholders are aware, your Company’s Sharesare tradable in electronic form and the Company hasestablished connectivity with both the depositories i.e.NSDL and CDSL. In view of the advantages offered by

the Depository System, the shareholders are requestedto avail the facility of dematerialization of the Company’sshares.

LISTING AGREEMENT COMPLIANCE:

Pursuant to the requirements of the Listing Agreement,the Company declares that its Equity Shares are listedon the Bombay Stock Exchanges Limited, AhmedabadStock Exchange Limited and Madras Stock ExchangeLimited. The Company confirms that it has paid AnnualListing Fees due to all the Stock Exchanges for the year2012-2013.

Corporate Governance:

A separate report on Corporate Governance is annexedhereto as a part of this report. A Certificate from theChartered Accountant in practice regarding complianceof conditions of Corporate Governance as prescribedunder Clause 49 of the Listing Agreement is attached tothis report. A Separate report on Management Discussion& Analysis is enclosed as a part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS:

In compliance with the Accounting Standard 21 and theListing Agreement entered into with Stock Exchanges,this Annual Report includes the consolidated financialstatements of the Company for the financial year 2011-12.

ACKNOWLEDGEMENT:

Yours Directors express their grateful appreciation forthe assistance and co-operation extended by theCompany’s Shareholders, Customers, Bankers,Suppliers, Registrar and Share Transfer Agents,Employees and all other Authorities / Stakeholders duringthe year and look forward to their continued support infuture years of growth.

For and on behalf of Board of Directors,

Apoorva Shah (Chairman & Managing Director)



20th ANNUAL REPORT8

ANNEXURE TO DIRECTORS’ REPORTParticulars of Conservation of Energy, Technology absorption and Foreign Exchange earnings and outgo in termsof Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report ofBoard of Directors) Rules, 1988 and forming part of the Directors Report for the year ended 31st March, 2012.

A. Conservation of Energy:

1. Energy conservation measures takenduring the year 2011-12:

2. Additional investments and any newproposals under implementation The Company continues to take all possible steps toaimed at energy conservation: conserve energy. These includes efficient electric fittings

and equipments that consume less energy3. Impact of the measures taken: than conventional ones.

FORM AForm for disclosure of particulars with respect to Conservation of Energy

2011-2012 2010-2011

(A) Power & Fuel Consumption1. Electricity

a) Purchased Units (Kwh) 84,459 64,164Total Amount (Rs.) 7,14,484 5,66,542Rate / Unit (Rs./Kwh) 8.46 8.33

b) Own Generationi) Through Diesel Generatorii) Through Steam Turbine / Generators

Units Liters LitersUnits / Ltr. of diesel Nil 540Cost / Unit Nil 42.35Coal N.A. N.A.QuantityTotal CostAverage Rate

3. Furnace Oil N.A. N.A.QuantityTotal Cost

4. Others/Internal Generations N.A. N.A.QuantityTotal CostAverage Rate

(B) Consumption per unit of productionProducts (With details) UnitElectricityFurnace OilCoal

Since the company manufactures several items,it is impracticable to apportion the utilities.

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NHC FOODS LIMITED

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FORM B

1. Research & Development has always been a focus area at NHC FOODS LTD. The R&D team of the Companyhas worked on a number of areas; this has resulted in the Company being able to launched its new product ofMasala (Spices) range in the Indian Markets under the Brand name of “NHC’s Saaz” on 7th October, 2011.

2. BENEFITS DERIVED AS A RESULT OF THE ABOVE

Introduction of new brand of NHC FOODS LTD for domestic sale, client satisfaction as a result of introductionof new brands & products.

3. FUTURE PLAN OF ACTION

Steps are continuously being taken to promote the branded sales in domestic as well as overseas market. Thecompany is continuously making efforts to provide best of quality products to its customers.

4. TECHNOLOGY, ABSORPTION, ADAPTION & INNOVATION

Technology Absorption, Adaptation and Innovation has always been the key strength of the Company. Companyplans to be a leading player in technology introduction through innovative products.

5. FOREIGN EXCHANGE EARNINGS & OUTGO

( in Lacs)

EARNINGS IN FOREIGN CURRENCY

Sr. No. Particulars 2011-12 2010-111. Earnings 7766.39 5626.39

OUTGO IN FOREIGN CURRENCY

Sr. No. Particulars 2011-12 2010-111. Commission 31.83 43.942. Travelling 2.40 3.18

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MANAGEMENT DISCUSSION AND ANALYSIS1. BUSINESS OF THE COMPANY

Overview

“A potential that is enabling our growth as India’sfast emerging spices and food stuff Company withglobal footprints.”

The food processing industry is of enormoussignificance for India’s development because of thevital linkages & synergies it promotes between thetwo pillars of our economy, industry and agriculture.Steered by an enabling environment and supportedby government initiative, the industry is on fast trackof growth. NHC is a well recognized manufacturerand exporter of spices, oilseeds and other foodproducts to numerous countries across the globe.Given the diversity of consumers, NHC caters anddevelops the products as per the customer tasteand needs with the perfect blend of only the bestquality products and ingredients, colour and texture.

A. Industry Structure & Development

India produces the widest range of spices andfoodstuffs in the world.

According to the Confederation of IndianIndustry (CII) the food-processing sector hasthe potential of attracting US$ 33 billion ofinvestment in 10 years and generatesemployment of 9 million person-days. In an

effort to boost the food sector, the Governmentis working on agri zones and the concept ofmega food parks. Twenty such mega parkswill come are proposed across the country invarious cities to attract Foreign DirectInvestment (FDI) in the food-processingsector.

B. Opportunities and threats

Changing lifestyles, food habits, organizedfood retail & urbanization are providingconducive factors for the growth of the foodprocessing sector in India and abroad. Thereis a large crop and material base in Indiaoffering vast potential for agro processingsector for all kinds of players in small scaleand organized sector. Government of Indiaand the State governments have also initiatedlarge number of policy initiatives to give boostto the food processing sector. Your companyaims to bring new and exciting brands that willappeal to modern lifestyle choices asignificantly emerging player in both domesticas well as export of variety of spices and alliedagro products at the most competitive rate inthe world market. The wide range ofCompany’s products include Whole Spices,Spices Powders, Indian Masalas, ReadyMixes, Processed Foods, Snacks, Semi-Processed Foods, Oilseeds of all kinds,Cereals, Grains, Dry Fruits, Nuts, Pickles,Papads, Seasonings and all types of Food andSpices and allied food products etc.

However, the biggest bottleneck in expandingthe food processing sector is the lack ofadequate infrastructure and technology in foodprocessing. Also, the industry growth isaffected by lack of integrated supply chain andscale of operations and low level of penetrationin the domestic markets. Ever increasing foodinflation and the intense competition facedfrom established brands from organized sectorand numerous players in unorganized sectormay pose as a challenge to the business andcontinue to exert pressure on our business.

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C. Risks and concerns

An analysis of the Company’s key business risks isas follows:

a) Competitor Risk:

The market is highly competitive with no fiscalbarriers and entry of large MNCs into thecountry with inorganic growth strategies. YourCompany continues to focus on increasing itsmarket share and taking marketing initiativesthat help create differentiation and provideoptimum service to its customers

b) Human Resource Risk:

Your Company’s ability to deliver value isshaped by its ability to attract, train, motivate,empower and retain the best professionaltalents. Your Company continuouslybenchmarks HR policies and practices withthe best in the industry and carries out thenecessary improvements to attract and retainthe best talent.

c) Foreign Exchange Risk:The Company being engaged in exports, itderives approximately 90% of its revenue fromexport sales. A volatility of the Exchange ratesand duties can adversely impact theCompany’s exports. The Company managesthis financial risk through foreign exchangeplanning under the expert guidance of reputedForeign Exchange Consultants.

d) Commodity Price Risk:Your Company is exposed to the risk of pricefluctuation on raw materials and finishedgoods. However, considering the normalcorrelation in the prices of raw materials andfinished goods, the risk is reduced.

2. INTERNAL CONTROL SYSTEMS AND THEIRADEQUACY:Your Company has put in place an adequate systemof internal controls commensurate with the size andnature of operations to ensure that the transactionsare properly recorded, authorized and the assetsare continuously monitored and safeguarded. Theinternal control system is backed up by welldocumented policies, guidelines and proceduresand the Company’s internal audit process isdesigned inter alia, to cover all significant areas ofthe Company’s operations such as accounting,finance, inventory, insurance, treasury etc. Theadequacy and effectiveness of the Internal ControlDepartment is reviewed by the Audit Committee ofthe Board which recommends control measuresfrom time to time.

3. FINANCIAL PERFORMANCEThe financial performance during the last year hasbeen discussed in the Directors’ Report and thesame can be referred to in the said report.

4. HUMAN RESOURCESYour Company has consistently believed that itsemployees are the most valuable assets and in thisspirit, the Company keeps focus on its humanresources. Your Company provides a congenialworking atmosphere, which fosters creativethinking, efficiency, and commitment. The key focusof the policies is to attract, retain and develop talentas a resource. The industrial relations acrossdifferent locations of the Company were cordialduring the year.

5. CAUTIONARY STATEMENTStatements in this report on ManagementDiscussion and Analysis describing the Company’sobjectives, projections, estimates, expectations orpredictions may be forward looking statementswithin the meaning of applicable security laws orregulations. These statements are based on certainassumptions and expectation of future events.Actual results could however, differ materially fromthose expressed or implied. Important factors thatcould make a difference to the Company’soperations include global and domestic demandsupply conditions, finished goods prices, rawmaterials cost and availability, changes inGovernment regulations and tax structure,economic developments within India and thecountries with which the Company has businesscontacts and other factors such as litigation andindustrial relations. The Company assumes noresponsibility in respect of forward looking in futureon the basis of subsequent developments,information or events.


REPORT ON CORPORATE GOVERNANCE

The report on Corporate Governance is pursuant to Clause 49 of the Listing Agreement entered into with the StockExchanges and forms a part of the report of the Board of Directors.

Certain additional details with respect to attendance of present directors of the Company in the meeting of Board /Committee(s) since the date of appointment, remuneration paid to Directors during the financial year, generalmeetings held and postal ballot process have been provided in this report for the information of members.

The detailed report set out below for the Financial Year 1st April, 2011 to 31st March, 2012 is as per the formatprescribed by SEBI and as is incorporated in Clause 49 of the Listing Agreement:

I. Company’s philosophy on Corporate Governance:

Good corporate governance makes good business sense. It increases the confidence of stakeholders in theCompany. Over the last few years, governance process and system have been religiously followed and improvedupon at NHC FOODS LTD. Apart from complying with statutory requirements, NHC FOODS LTD makingcontinuous efforts towards improving transparency, disclosures, and promotion of ethics at work – place. Itcontinues to be committed to the principles of integrity, ethics, equity, fairness, transparency and accountability.

The Board of Directors is at the core of corporate governance practices and strives to protect the long – terminterests of all the stakeholders.

The Company has implemented all the mandatory requirements of Clause 49 of the Listing Agreement.

All Board members and senior management personnel have affirmed compliance with the Code of BusinessConduct & Ethics which is posted on the website of the Company.

The Company recognizes that good Corporate Governance is continuing exercise and reiterates its commitmentto achieve highest standards of Corporate Governance in the overall interest of all the Stakeholders. Webelieve that sound Corporate Governance is critical to enhance and retain Investor trust. Accordingly, wealways seek to ensure that we attain our performance with integrity.

II. BOARD OF DIRECTORS

a) Composition and Category of the Board

The composition of the Board of Directors with reference to Executive and Non-Executive Directorsmeets the requirement of code of Corporate Governance.

The Board of Directors of the Company comprises four Directors as on 31st March, 2012:

Name of the Director Category

Mr. Apoorva Shah Chairman and Managing Director

Mrs. Alpa Shah Whole – Time Director

Mr. Aashish Vyas Independent & Non-Executive Director

Mr. Rajiv Bhatt Independent & Non-Executive Director

The provisions relating to the time period between two Board Meeting not to exceed 4 months have beencomplied with.

As mandated by Clause 49, none of the directors on the Board is a member on more than 10 Committeesand Chairman of more than 5 Committees including NHC FOODS LTD.

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b) Attendance of each director at the Board Meeting and AGM

During the financial year, Six Board Meetings were held on following dates

For the Quarter Date of Board Meeting

1st Quarter (From 1st April to 30th June, 2011) 30th May, 20112nd Quarter (From 1st July to 30th September, 2011) 25th July, 2011

30th July, 201118th Aug, 2011

3rd Quarter (From 1st October to 31st December, 2011) 14th Nov, 20114th Quarter (From 1st January to 31st March, 2012) 04th Feb, 2012

• Annual General Meeting 25th July, 2011

All the directors were present in all the Board Meetings and the last Annual General Meeting

(c) The details of other Directorships and Committee Membership:(Only Public limited companies are considered)

Name Category of Directors No. of Other No. of other BoardDirectorships Committee(s)(*) of

held which he/she isMember /Chairman

Apoorva H. Shah Promoter Executive 0 0Alpa Shah Promoter Executive 0 0Aashish Vyas Independent & Non-Executive 1 0Rajiv Bhatt Independent & Non-Executive 0 0

(*) Chairmanship and Membership of Audit Committee and Shareholders / Investors Grievances Committee only.

1. Independent Director means a Director as defined under Clause 49 of the Listing Agreement

2. Excluding Alternative Directorship and directorship in foreign companies and companies under Section25 of the Companies Act, 1956.

3. Only two committees viz. the Audit Committee and the Shareholder / Investor Grievance Committeeof all public limited companies are considered.

4. No Director is related to any other director on the Board, except for Mr. Apoorva Shah and Mrs. AlpaShah who are husband and wife.

5. The Directorship / Committee Membership is based on the latest disclosures received from Directors.

Detail of Director seeking re-appointment at the forthcoming Annual General Meeting:

i) Mr. Rajiv Bhatt :

He has completed his Diploma in Electronics in the year 1985, started his career as ElectronicsEngineer in a software firm. After successful completion of his training as management trainee hewas over a period of time, promoted as General Manager - Business Development at Shingar Limited.He has excellent knowledge of Business development skills and is helping the company towards itsbrand development business.

He is the Chairman of the Shareholders’/Investors’ Grievances Committee and the RemunerationCommittee and member of the Audit Committee of the Company.


He does not hold any equity share in the Company.

As mandated under Clause 49, the Independent Directors on NHC's Board:

a) Don’t have any material pecuniary relationship or transactions with the company, its promoters, Directors,Senior Management or its holding company, subsidiaries and Associates which may affect independenceas a Director

b) Are not related to promoters or persons occupying management positions at the Board Level or at onelevel below the Board

c) Have not been executive of the Company in the immediately preceding three financial years

d) Are not partners or executives or were not partners or executives during the preceding three years of the:

(i) Statutory audit firm or the internal audit firm that is associated with the Company.

(ii) Legal firm (s) and Consulting firm (s) that have a material association with the Company.

e) Are not material suppliers, service providers or customers or lessors or lessees of the Company, whichmay affect independence of the Director

f) Are not substantial shareholders of the Company i.e. do not own two per cent or more of the block ofvoting shares

g) Are not less than 21 years of age.

• Code of Conduct

The Company has laid down a Code of Conduct for all its Board Members and Senior ManagementPersonnel for avoidance of conflicts of interest and ensuring the highest standard of honesty, dedicationand professionalism in carrying out their functional responsibilities. The Company’s Code of Conduct is inconsonance with the requirements of Clause 49 of the Listing Agreement. The Code of Conduct is postedon the Company’s website www.nhcgroup.com. The code has been circulated to all the members of theBoard and senior management and the compliance of the same have been affirmed by them. There areno commercial or material financial transactions, with the senior management personnel, where there isa personnel interest that may have in a potential conflict with the interest of the Company at large.

III. Audit Committee:

The composition, role and power of the Audit Committee meet the requirements of Clause 49 of the ListingAgreement as well as Section 292 A of the Companies Act, 1956.

a) Brief terms of reference:

• To overview of the Company’s financial reporting process and disclosure of its financial informationand to ensure that the financial statements are correct, sufficient and credible.

• To recommend the appointment /re-appointment / removal of statutory auditor and fixation of theirremuneration thereof.

• To review with the Management, the Annual Financial Statements before submission to the Board,focusing primarily on:

■ Matters to be included in the Director’s Responsibility Statement to be included in the Board’sReport in terms of Clause (2AA) of Section 217 of the Companies Act, 1956.

■ Any changes in the Accounting Policies and Practices.

■ Major accounting entries based on exercise of judgment by management.

■ Qualifications in the draft Audit Report.

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■ Significant adjustments arising out of audit.

■ Compliances with Accounting Standards, with the listing and legal requirements relating to thefinancial statements.

■ Any related party transactions and their impact on the interest on the Company at large.

• To review the management, the quarterly financial statements before submission to the Board forapproval.

• To review and approve annual accounts of the Company and recommend to the Board for approval.

• To review with the management, the performance adequacy in the Internal and external audit functionwhether in line with the internal control system.

b) Constitution & Meetings:

The Company has a qualified and independent Audit Committee with three directors as members. All theDirectors possess knowledge of corporate finance, accounts and company law. An Independent, NonExecutive Director acts as Chairman of the Committee Meetings. The quorum of the Audit Committee istwo members. The Company Secretary acts as Secretary to the Committee.

At present the Committee comprises of the following members:

Name of the Director Position

Mr. Aashish Vyas ChairmanMr. Rajiv Bhatt MemberMr. Apoorva Shah Member

During the year under the review, the Audit Committee Meeting met 4 (Four) times on 30th May, 2011, 25th

July, 2011, 14th November, 2011, and 04th Feb, 2012 respectively and the necessary quorum was presentat the meeting.

Mr. Aashish Vyas, Chairman of the Audit Committee has attended the Annual General Meeting of theCompany held on 25th July, 2011to answer the queries raised by the shareholders.

IV. REMUNERATION COMMITTEE

Your Company had constituted Remuneration Committee as required under clause 49 of the Listing Agreement.The Committee reviewed and decided the overall remuneration of the Managing Director and the Whole –Time Director.

At present the Committee comprises of the following members:


Mr. Rajiv Bhatt ChairmanMr. Aashish Vyas MemberMr. Apoorva Shah Member

The details of the remuneration paid to the Directors during the year 2011-12 are given below:

Sr. No. Name of the Director Salary Perquisites Total

1. Mr. Apoorva Shah 29,17,400 82,600 30,00,0002. Mrs. Alpa Shah 29,17,400 82,600 30,00,000


NOTES:

(i) Mr. Apoorva Shah was appointed as the Managing Director for a period of five years with effect from 13th

November, 2010 and Mrs. Alpa Shah was appointed as a Whole-time Director for a period of five yearswith effect from 14th February, 2011 respectively.

(ii) The remuneration paid to the Managing Director and the Whole-time Director is excluding contribution toprovident fund, gratuity and leave encashment as the same are provided in the books based on actuarialvaluation report.

(iii) Presently, the Company does not have any scheme for grant of Stock Options to its Directors, ManagingDirectors or other employees.

(iv) None of the employees are related to any of the Directors of the Company.

(v) During the year under review, the Company has not paid any sitting fees to any Non-Executive Directorsfor attending Board and Committee meetings.

V. SHAREHOLDERS’ / INVESTORS GRIEVANCES COMMITTEE

a) Scope of Shareholders’/Investors Grievances Committee’s activities:

The Shareholders and Investors Grievance Committee of the Board is empowered to see the redressalof investors’ complaints pertaining to share transfer, non receipt of annual report, issue of duplicatecertificates, transfers and transmissions of shares and other miscellaneous investors’ complaints. Inaddition, the Committee also looks into matters which can facilitate better investors’ services and relations.

Shareholders Services:

For the purpose of facilitating the shareholders, the Company has posted on its website detailed servicesfor the Shareholders which contain the information on the following:

i) Procedure for Dematerialization of Shares;

ii) Procedure for transfer of Shares;

iii) Procedure & forms for transmission of Shares and transposition;

iv) Change of address;

v) Nomination Facility;

vi) Loss of Share Certificates;

vii) Disclosures of Quarterly Results & Shareholding Pattern & all the information required to be given tothe shareholder as their right;

vii) Results of Postal Ballot;

viii) General Information about the Company;

ix) Facilitation of a designated email-id :- [email protected] for the purpose of registeringcomplaints by shareholders/investors.

b) Composition, Meetings and Attendance of Committee:


Mr. Rajiv Bhatt ChairmanMr. Aashish Vyas MemberMrs. Alpa Shah Member

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c) Name & Designation of the Compliance Officer:

Ms. Suvarnalata Chavan act as a Company Secretary, Mr. Bharat Akhiyania act as a Compliance Officer

d) Status of Shareholders Complaints during each quarter

Quarter Ended Received Pending Disposed off Unresolved

June, 2011 3 Nil 3 Nil

September, 2011 2 Nil 2 Nil

December, 2011 5 Nil 5 Nil

March, 2012 1 Nil 1 Nil

There were no major complaints received from the Shareholders of the Company. The Complaints receivedwere promptly replied by the Registrar and Share Transfer Agents of the Company. The Directors are notpaid any sitting fees for attending the meeting of the aforesaid Committee.

VI. GENERAL BODY MEETINGS :

a. The details of the Annual General Meeting held in last three years are as under:

No. of SpecialAGM DAY DATE TIME VENUE Resolutions

approved at thelast AGM

17th Friday 14.08.2009 10.30 A.M. D-22/8, TTC Industrial Area, 2MIDC, Thane-Belapur Road,Turbhe, Navi Mumbai - 400705

18th Thursday *11.11.2010 11.30 A.M. D-22/8, TTC Industrial Area, NILMIDC, Thane-Belapur Road,Turbhe, Navi Mumbai - 400705

19th Monday 25.07.2011 03.00 P.M. Hotel Athithi, 77A & B, 3Sangathan - 2, Basement,Nehru Road, Vile Parle (E),Mumbai - 400099

* The Registrar of Companies, Mumbai has granted an extension of time to the Company, for holdingits 18th Annual General Meeting for the year ended 31st March, 2010 upto 13th November, 2010.

b. Whether Special Resolutions were put through postal ballot last year? No.

VII. DISCLOSURE :

(i) Details of the transactions of a material nature as specified in Accounting Standard 18 of the Companies(Accounting Standards) Rule, 2006 have been reported in the Notes to Accounts. There was no transactionof a material nature with any of the related parties which was in conflict with the interest of the Companyat large.

(ii) Whistle Blower Policy is at present not adopted by the Company

(iii) In compliances with the Securities and Exchange Board of India (Prevention of Insider Trading) Regulations,1992, as amended till date, the Company has drafted a comprehensive code of conduct and the same is


strictly adhered by its management, staff and senior management. The code expressly lays down theguidelines and the procedures to be followed and disclosures to be made, while dealing with the sharesof the Company and cautioning them on the consequences of non-compliances thereof.

(iv) All the mandatory requirements of Compliances with Corporate Governance have been complied with bythe Company and the non – mandatory compliances complied by the Company have been detailed underSerial No. X of this report.

(v) SECRETARIAL AUDIT:

A qualified Practicing Company Secretary carried out Secretarial Audit to reconcile the total admittedequity share capital with the NSDL and CDSL and the total issued and listed equity share capital. TheSecretarial Audit Report confirms that the total issued / paid-up capital is in agreement with the totalnumber of shares in physical form and the total number of dematerialized shares held with NSDL andCDSL.

VIII. MEANS OF COMMUNICATION

(i) Half–yearly report sent to each household of Noshareholders

(ii) Quarterly results: YesThe Company is regularly publishing itsquarterly results in :The Free Press Journal & Navshakti, Mumbai

(iii) Any web site, where displayed No

(iv) Whether it also displays official News releasesand presentations made to Institutional investors /analysts No

(v) Whether Management Discussion & Analysis is apart of Annual Report Yes

IX. General Shareholder Information

a) Annual General Meeting to be held:Day/Date Thursday, the 27th day of September, 2012Time 10.30 a.m.Venue Maulana Azad Hall, Guru Narayan Road,

Near Reliance Energy, Santacruz (E), Mumbai – 400055

b) Financial Calendar 2011-12 (Tentative and subject to changes)First Quarterly Results on or before 14th August, 2012Second Quarterly Results on or before 14th November, 2012Third Quarterly Results on or before 14th February, 2013Audited Annual Accounts on or before 30th May, 2013Financial Year 1st April to 31st March

c) Date of Book Closure:

Monday, 24Th September, 2012 to Thursday, 27th September, 2012 (Both days inclusive).

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d) Dividend Payment Date:

The Board of Directors has not recommended any dividend during the year under review.

e) Listing on Stock Exchanges:

1 Bombay Stock Exchange Limited (Scrip Code: 517554).

P. J. Towers, Dalal Street,Mumbai – 400001.

2. Ahmedabad Stock Exchange Limited

Kamdhenu Complex, Opposite Sahajanand College,Panjarapole, Ambawadi,Ahmedabad - 380015.

3 Madras Stock Exchange Limited

No.30, Second Line Beach,Chennai - 600001,Tamilnadu.

f) Listing Fees

The Annual Listing Fee for 2012-13 has been paid to all the Stock Exchanges, where the securities of theCompany are listed.

g) Demat ISIN Number in NSDL and CDSL for Equity Shares: INE141C01028

h) Market Price data :

Month High Price Low Price No. of Shares

April, 2011 30.15 20.20 10,369

May, 2011 35.75 29.90 11,206

June, 2011 35.95 27.00 3,229

July, 2011 30.00 22.45 32,647

August, 2011 29.60 24.95 18,878

September, 2011 30.50 23.10 8,553

October, 2011 32.75 23.75 15,596

November, 2011 31.35 24.20 16,409

December, 2011 28.85 24.25 14,267

January, 2012 33.00 24.45 7,429

February, 2012 29.50 25.70 6,623

March, 2012 27.00 22.95 12,339


i) Registrar & Share Transfer Agents

In order to attain speedy processing and disposal of share transfers and other allied matters, the Board hasappointed M/s. System Support Services as the Registrar and Share Transfer Agents of the Company. Theircomplete details are as follows:M/s System SupportUnit: NHC FOODS LTD209, Shivai Industrial Estate,Next to Parke-Davis,89, Andheri Kurla Road,Saki Naka, Mumbai – 400072Tel No.: 022-2850 0835Fax No.: 022-28501438Email: [email protected]

j) Share Transfer System:

Shares held in the dematerialized form are electronically traded with the Depositories and the Registrar andShare Transfer Agents of the Company periodically receive the data of beneficial holders from the Depositoriesso as to enable them to update their records. Physical shares received for dematerialization are processedand completed within a period of 15 to 30 days from the date of receipt provided they are in order in everyrespect. The Registrar and Share Transfer Agents usually approves the transfer of shares every 15 to 30 days.

k) Distribution Pattern of Shareholding as on 31st March, 2012:

No. of Equity No. of % of Shareholders Total Number % of ShareholdingShares held Shareholders of Shares1-500 5114 96.18 374695 11.52

501-1000 111 2.09 81004 2.49

1001-2000 46 0.87 71034 2.19

2001-3000 13 0.24 30043 0.92

3001-4000 9 0.17 30435 0.94

4001-5000 2 0.04 9455 0.29

5001-10000 9 0.17 62392 1.92

10001 & above 13 0.24 2592077 79.73

Total 5317 100.00 3251135 100.00

Categories of Shareholders as on 31st March, 2012:

Sr. No. Category of shareholders No. of Shares % of Equity1 Indian Promoters 2436292 74.942 Banks, Financial Institutions 910 0.033 Private Corporate Bodies 60755 1.874 NRI Individuals 63039 1.945 Indian Public 690209 21.22

Total 3251135 100.00

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Pledge of Shares: - None of the promoters have pledged their shares as on 31st March, 2012.

l) Dematerialization of Shares and liquidityThe Shares of the Company are compulsorily traded in dematerialized form and are available for trading underboth Dematerialised form and are available for trading under both Depository Systems, viz NSDL (NationalSecurities Depository Limited) and CDSL (Central Depository Services (India) Limited).As on 31st March, 2012, nearly, 91.12% of the Company’s total paid up capital representing 29,62,519 EquityShares are held in dematerialized form and balance 8.88% representing 2,88,616 Equity Shares were held inphysical form.

m) Outstanding GDR/Warrants and Convertible Bonds, Conversion date and the likely impact on the Equity:There were no outstanding GDRs / ADRs as on 31st March, 2012However, 70,42,400, 0% Optionally Convertible Redeemable Preference Shares (OCRPS) of 10/- each fullypaid-up aggregating to 7,04,24,000 allotted pursuant to the scheme of amalgamation of M/s NHC IndustriesPrivate Limited with that of the Company, are pending for conversion into Equity Shares. The OCRPS shall beconverted into Equity Shares in the ratio of 1(one) New Equity Shares of the face value of 10/- (Rupees TenOnly) each to the shareholders of M/s NHC Industries Private Limited with right attached thereto, for every1(One) OCRPS of the face value of 10/- (Rupees Ten Only) each credited as fully paid-up held by suchOCRPS holders or their respective heir, executors or as the case may be, successors in the Company.

Assuming full conversion of all warrants granted, under the Scheme of Amalgamation, which, would vest, beexercised and converted into Equity Shares of the Company, the total number of Equity Shares would beincreased to 1,02,93,535 Equity Shares of 10/- each.

n) Plant Locations:Survey No. 777,Umarsadi Desaiwad Road,Village Umarsadi,Taluka Pardi, District Valsad,Gujarat – 396175

o) Address for Correspondence:(a) For shares held in physical form:

Share transfer and communication M/s. System Support Servicesregarding share certificates, dividends Unit : NHC Foods Limitedand change of address 109, Shivai Industrial Estate, Next to Parke-Davis,

89, Andheri Kurla Road, Saki Naka,Mumbai - 400072Tel. : 022 - 2850 0835Fax No. : 022 - 2850 1438E- mail : [email protected]

1 Indian Promoters

2 Banks, Financial Institutions

3 Private Corporate Bodies

4 NRI Individuals

5 Indian Public


b) For Shares held in Demat Form with the respective Depository Participants :

National Securities Depository Ltd. Central Depository Services (India) Ltd.Trade World, A Wing, 4th Floor, Phiroze Jeejeebhoy Towers,Kamala Mills Compound, Senapati Bapat Marg, 17th Floor, Dalal Street,Lower Parel, Mumbai - 400013 Fort, Mumbai - 400001Tel. : 022 - 2499 4200 Tel. : 022 - 2272 3333Fax : 022 - 2497 2993 Fax : 022 - 2272 3199Email : [email protected] Email : [email protected] : www.nsdl.co.in Website : www.cdslindia.com

c) The Company has designated [email protected] as the e-mail ID for the purpose ofregistering complaints by investors.

Since there is neither unclaimed shares lying in the escrow account nor unclaimed benefits likedividend, bonus shares etc., there is no information to disclose about the notification.

p) Nomination FacilityIndividual Shareholders can avail of the facility of nomination. The nominee shall be the person in whomall the rights or transfer and/or amount payable in respect of the shares shall vest in the event of the deathof Shareholder(s). A minor also can be a nominee provided the name of the guardian is given in thenomination form. The facility of nomination is not available to non-individual shareholders such as Corporate,Financial Institutions, Kartas of Hindu Undivided Families and holders of Power of Attorney.

X. Non-Mandatory Requirements:

1. The Company has an Executive Chairman on its Board.

2. The Remuneration Committee is constituted by the Board, the details of which are provided under theheading “Remuneration Committee and Remuneration to Directors.”

3. Shareholder Rights: The quarterly, half-yearly and annual financial results of the Company are publishedin newspapers on an all India basis and are also posted on the Company’s corporate website. Thecomplete Annual Report is sent to every Shareholder of the Company.

4. The Company has complied with the Accounting standards issued by the Institute of Chartered Accountantsof India (ICAI) from time to time.

5. There are no qualifications in the Auditors Report for the year.

For & on behalf of the Board of Directors,

Apoorva Shah (Chairman & Managing Director)


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AUDITOR’S REPORT

To,The Members of NHC Foods Limited.

1. We have audited the attached Balance Sheet ofNHC Foods Limited, as at March 31, 2012, andalso the related Profit and Loss Account and CashFlow Statement of the company for the year endedon that date annexed thereto. These financialstatements are the responsibility of the Company’smanagement. Our responsibility is to express anopinion on these financial statements based on ouraudit.

2. We conducted our audit in accordance with theauditing standards generally accepted in India.Those Standards require that we plan and performthe audit to obtain reasonable assurance aboutwhether the financial statements are free of materialmisstatement. An audit includes examining, on atest basis, evidence supporting the amounts anddisclosures in the financial statements. An audit alsoincludes assessing the accounting principles usedand significant estimates made by management,as well as evaluating the overall financial statementpresentation. We believe that our audit provides areasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report)Order, 2003 (as amended), issued by the CentralGovernment of India in terms of sub-section (4A)of section 227 of the Companies Act, 1956 , weenclose in the Annexure a statement on the mattersspecified in paragraphs 4 and 5 of the Order.

4. Further to our comments in the Annexure referredto in Paragraph 3 above, we report that:

a. We have obtained all the information andexplanations, which to the best of ourknowledge and belief were necessary for thepurposes of our audit;

b. In our opinion, proper books of account asrequired by law have been kept by theCompany so far as appears from ourexamination of those books

c. The Balance Sheet, Profit and Loss Accountand Cash Flow Statement dealt with by thisreport are in agreement with the books ofaccount;

d. On the basis of written representationsreceived from the directors, as on March 31,2012 and taken on record by the Board ofDirectors, we report that none of the directorsis disqualified as on March 31, 2012 from beingappointed as a director in terms of clause (g)of sub-section (1) of section 274 of theCompanies Act, 1956;

e. In our opinion and to the best of ourinformation and according to the explanationsgiven to us, the Balance Sheet, Profit and LossAccount and Cash Flow Statement dealt withby this report comply with the accountingstandards referred to in sub-section (3C) ofsection 211 of the Act and the Rules framedthere under and give the information requiredby the Act, in the manner so required and givea true and fair view in conformity with theaccounting principles generally accepted inIndia, in the case of:

i) the Balance Sheet, of the state of affairsof the Company as at March 31, 2012;

i) the Profit and Loss Account, of the Profitfor the year ended on that date; and

iii) in case of the Cash flow statement, thecash flow of the company for the yearended on that date.

For NGS & Co.Chartered AccountantsFirm Regd. No. : 119850W

(Ganesh Toshniwal)PartnerMembership 046669



ANNEXURE REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE ON THE ACCOUNTS FORTHE YEAR ENDED March 31, 2012 OF NHC FOODS LIMITED.

On the basis of the information and explanations furnished to us and books and records examined by us in thenormal course of audit and to the best of our knowledge and belief, we report that:

i. a) The Company has maintained proper records showing full particulars, including quantitative details andsituation of fixed assets.

b) Fixed assets have not been physically verified by the management during the year, hence, we are unableto comment on the discrepancies, if any.

c) In our opinion, a substantial part of fixed assets has not been disposed off during the year.

ii. a) The management has conducted physical verification of inventory at regular intervals during the year.

b) In our opinion and according to the information and explanations given to us, the procedures of physicalverification of inventory followed by the Management are reasonable and adequate in relation to the sizeof the Company and its nature of business.

c) In our opinion and according to the information and explanations given to us, the Company is maintainingproper records of inventory. The discrepancies noticed on verification between physical stocks and thebook records were not material having regard to the size of the operations of the company.

iii. a) The Company has not granted any loan, secured or unsecured to companies, firms or other partiescovered in the register maintained under section 301 of the Act. Therefore, the provisions of clauses4(iii)(b) to (d) of paragraph 4 of the Order are not applicable to the Company.

b) The Company had taken loans from three parties covered in the register maintained under section 301 ofthe Act. The maximum amount outstanding during the year was 175.38 lacs and the year-end balancewas 103.91 lacs.

c) Since the loans are interest free and there are no covenants as to the repayment of loans, we are unableto comment whether such loans are prejudicial to the interests of the company.

d) The loans taken are re-payable on demand. The Company has repaid the amounts as demanded by thelenders from time to time and thus there is has been no default on part of the. The loans taken are interestfree.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internalcontrol system commensurate with the size of the Company and the nature of its business, for sale of goods/services and for the purchase of fixed assets. However, the internal control system for purchases of inventoryis inadequate since the purchases are made without inviting quotations. In our opinion this is a continuingfailure to correct major weakness in the internal control system.

v. In respect of particulars of contracts or arrangements and transactions entered in the register maintained inpursuance of section 301 of the Companies Act, 1956,

a) To the best of our knowledge and belief and according to the information and explanations given to us,particulars of contracts or arrangements that needed to be entered into the register have been so entered.

b) In our opinion, the transactions made in pursuance of such contracts or arrangements and exceeding thevalue of rupees five lakhs in respect of any party during the year have been made at prices which arereasonable having regard to prevailing market prices at the relevant time.

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vi The Company has not accepted any deposits from the public within the meaning of sections 58A and 58AA ofthe Act and the Companies (Acceptance of Deposits) Rules, 1975. Therefore, the provisions of clause (vi) ofParagraph 4 of the Order are not applicable to the Company.

vii. In our opinion, the internal audit functions carried out during the year by firm of Chartered Accountants appointedby the management have been commensurate with the size of the Company and the nature of its business.

viii. To the best of our knowledge and as explained, the Central Government has not prescribed maintenance ofcost records under clause (d) of sub-section (1) of Section 209 of the Act, in respect of Company’s products.Therefore the provision of clause (viii) of Paragraph 4 of the Order are not applicable to the Company.

ix. (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees’state insurance, income-tax, sales-tax, wealth-tax, service-tax, custom duty, excise duty, cess and othermaterial statutory dues, as applicable, have generally been regularly deposited with the appropriateauthorities, though there has been a slight delay in a few cases. No undisputed amounts payable inrespect thereof were outstanding at the year end for a period of more than six months from the date theybecame payable.

(b) According to the information and explanation given to us, the dues of Sales Tax, Income Tax, CustomsDuty, Wealth Tax, Excise Duty, Cess, Service Tax and other statutory dues which have not been depositedon account of any dispute and the forum where the dispute is pending are as under :

Name of the Nature of the Amount Period to which Forum Where disputeStatute dues ( In Lacs) the amount related is pending

Income Tax, Tax Liability on 5.47 FY:1995-96 ITAT, referred back the caseAct, 1961 Regular Assessement to Assessing Officer

for further hearings.

Central Excise Excise and 2.27 1992 to 1995 Customs, Excise and ServiceAct, 1962 Service Tax Tax Appellate Tribunal

x. In our opinion, the Company has no accumulated losses at the end of the financial year and it has not incurredcash losses in the current and immediately preceding financial year.

xi. Based on our audit procedures and as per the information and explanations given by management, we are ofthe opinion that the Company has not defaulted in repayment of dues to bank. There were no dues repayableto financial institutions and debenture holders during the year.

xii. According to the information and explanations given to us, the Company has not granted any loans andadvances on the basis of security by way of pledge of shares, debentures and other securities. Therefore, theprovisions of clause (xii) of paragraph 4 of the Order are not applicable to the Company.

xiii. In our opinion, the Company is not Chit Fund or Nidhi Mutual Benefit Fund/Society. Therefore, the provisionsof clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments.Therefore, the provisions of clause (xiv) of paragraph 4 of the Order are not applicable to the Company.

xv. In our opinion, and according to the information and explanations given to us, the company has not given anyguarantee for loans taken by others from financial institutions/banks.

xvi. Based on information and explanations given to us by the management, term loans were applied for thepurpose for which the loans were obtained.


xvii. According to the information and explanations given to us and on overall examination of the Balance Sheetand Cash Flow Statement of the Company, we report that the Company has used funds raised on short termbasis amounting to 121.67 lacs for long term investments.

xviii.During the year, the Company has not made any preferential allotment of shares to parties covered in theregister maintained under Section 301 of the Companies Act, 1956.

xix. According to the information and explanations given to us, the Company has not issued any secured debenturesduring the year

xx. The Company has not raised any money by public issue during the year. Therefore, the provisions of clause(xx) of paragraph 4 of the Order are not applicable to the company.

xxi. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financialstatements and as per the information and explanations given by the management, we report that no fraud onor by the Company has been noticed or reported during the course of our audit.

For NGS & Co.Chartered Accountants

(Ganesh Toshniwal)Partner Membership 046669


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AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCE

ToThe Members,NHC Foods Limited

We have examined the compliance of conditions of Corporate Governance by NHC Foods Limited for the yearended on 31st March, 2012, as stipulated in clause 49 of the Listing Agreement of the said company with stockexchanges in India.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examinationwas limited to procedures and implementation thereof, adopted by the company for ensuring the compliance of theconditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statementsof the company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that thecompany has complied with the conditions of Corporate Governance as stipulated in the above-mentioned ListingAgreement.

We further state that such compliance is neither an assurance as to the future viability of the company nor theefficiency or effectiveness with which the management has conducted the affairs of the company.

For NGS & Co.Chartered Accountants

(Ganesh Toshniwal)Partner Membership 046669



CODE OF CONDUCT

DECLARATION

As provided under Clause 49 of the Listing Agreement with the Stock Exchanges, the Board Members and theSenior Management Personnel have confirmed compliances with the Code of Conduct for the year ended 31st

March, 2012

For NHC Foods Limited

Apoorva Shah(Chairman & Managing Director)


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MANAGING DIRECTORS CERTIFICATION

ToThe Board of DirectorsNHC Foods Limited

We certify that:

1. We have reviewed the Financial Statement, read with the Cash Flow Statement of NHC Foods Limited (theCompany) for the year ended 31st March, 2012 and to best of our knowledge and belief:

(i) these statements do not contain any materially untrue statement or omit any material fact or containstatements that might be misleading;

(ii) these statements and other financial information included in this report presents a true and fair view of theCompany’s affair and are in compliance with the existing accounting standards, applicable laws andregulations.

2. To the best of our knowledge and belief, no transactions entered into by the Company during the year whichare fraudulent, illegal or violative of the Company’s Code of Conduct;

3. We are responsible for establishing and maintaining internal controls for financial reporting and we have evaluatedthe effectiveness of the internal control systems of the Company pertaining to financial reporting;

4. We have disclosed to the Company’s Auditors and the Audit Committee of the Company’s Board of Directorsall significant deficiencies in the design or operation of internal controls, if any, of which we are aware and thesteps taken or proposed to be taken to rectify the deficiencies.

5. We have indicated to the Auditors and the Audit Committee about the:-

a) significant changes, if any, in the Company’s internal control over financial reporting during the year.

b) significant changes in accounting policies during the year, if any, and that the same have been disclosedin the notes to the financial statements.

c) instances of significant fraud of which we have become aware and involvement therein if any ofmanagement or other employees having a significant role in the Company’s internal control system overfinancial reporting.

For NHC Foods Limited

Apoorva Shah(Chairman & Managing Director)



BALANCE SHEET AS AT 31ST MARCH, 2012

PARTICULARS Notes As at As atMarch 31, 2012 March, 31 2011

I Equity and LiabilitiesShareholders’ FundsShare Capital 2 102,935,350 102,935,350Reserves and Surplus 3 17,021,684 12,390,086

Total 119,957,034 115,325,436

Non – Current LiabilitiesLong Term Borrowings 4 28,417,947 42,642,644Deferred Tax Liabilities (Net) 5 7,206,469 4,308,610Long Term Provisions 6 3,079,923 1,701,920

Total 38,704,339 48,653,174Current LiabilitiesShort Term Borrowings 7 59,513,717 56,237,237Trade Payable 8 156,851,924 172,133,620Other Current Liabilities 9 47,493,666 28,491,451Short Term Provisions 10 342,213 1,706,850Total 264,201,520 258,569,158

Total 422,862,893 422,547,768

II Non – Current Assets• Tangible Assets 11 135,117,056 125,458,132• Intangible Assets 11 65,802,701 69,026,428Total 200,919,757 194,484,560Non – Current Investment 12 120,000 60,000Long Term Loans and Advances 13 4,811,686 7,049,400

Total 4,931,686 7,109,400Current AssetsInventories 14 61,303,848 43,471,530Trade Receivables 15 82,394,026 133,817,930Cash and Cash Equivalents 16 49,993,016 25,787,490Short Term Loans and Advances 17 23,320,559 17,876,858Total 217,011,449 220,953,808

Total 422,862,893 422,547,768

Notes to the financial statements 1-38

The Accompanying notes are an integral part of the financial statementsAs per our report of even date attachedFor NGS & CO. For and behalf of the Board of Directors,Chartered AccountantsFirm Reg. No. : 119850WGANESH TOSHNIWAL Mr. Apoorva H. Shah Mrs. Alpa Shah(Partner) (CMD) (Whole Time Director)M. No. 046669 Mr. Ashok KamathPlace: Mumbai (Financial Controller)Date: 26th May, 2012

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PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2012PARTICULARS Notes As on As on

March 31, 2012 March 31, 2011

I IncomeRevenue from Operations 18 926,791,483 724,099,767

II Other Income 19 5,835,738 7,006,340

III Total Revenue (I +II) 932,627,221 731,106,107

IV ExpensesCost of Raw Material Consumed 20 16,818,012 –Purchase of traded goods 21 779,268,397 644,965,034(Increase)/Decrease in Inventory offinished goods and Work in progress 22 (15,068,598) (18,425,717)Employee Benefit Expenses 23 19,907,329 13,091,080Finance Cost 24 19,187,993 14,230,910Depreciation and Amortisation Expenses 11 8,709,009 7,697,253Other Expenses 25 96,275,623 64,734,980

Total Expenses 925,097,764 726,293,540

V Profit Before Tax 7,529,457 4,812,567

Less:

VI Tax Expenses• Current Tax 1,125,596 744,000

Less: MAT Receivable 1,125,596 –– 744,000

• Deferred Tax 2,897,859 (458,399)

VII Profit After Tax for the year 4,631,598 4,526,966

VIII Earning per share in (Face Value of 10/- each)• Basic Earning Per Share ( ) 1.42 1.39• Diluted Earning Per Share ( ) 0.44 0.44Notes to the financial statements 1-38



NOTES FORMING PART OF THE ACCOUNTS AS AT 31ST MARCH, 2012

NOTES 1: SIGNIFICANT ACCOUNTING POLICIES

1.1 Basis of AccountingThe Company maintains its accounts on accrual basis following the historical cost convention in accordancewith generally accepted accounting principles (GAAP) in compliance with the provisions of Companies Act,1956 and the Accounting Standards as specified in the Companies (Accounting Standard) Rules 2006 (asamended) and other relevant provisions of the Companies Act, 1956.

1.2 Use of Estimates:The preparation of financial statements in conformity with GAAP requires that the management of the Companyto make estimates and assumptions that affect the reported amounts of income and expenses of the period,the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the dateof the financial statements. Difference, if any, between the actual results and estimates is recognised in theperiod in which the results are known.

1.3 Fixed AssetsFixed assets are stated at their cost net of tax/duty credits availed, if any, less accumulated depreciation andaccumulated amortizations. Costs comprise the purchase price and any attributable costs of bringing theassets to its working condition, for its intended use.

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset arecapitalized as part of the cost of such asset till such time as the asset is ready for its intended use or sale.

All other borrowing costs are recognized as an expense in the period in which they are incurred

1.4 Depreciation and AmortisationDepreciation on tangible assets is provided on Straight line method at the rates prescribed under ScheduleXIV to the Companies Act, 1956.

Goodwill on amalgamation is amortized over a period of 20 years as per the approved court scheme.

1.5 LeasesAssets acquired on leases where a significant portion of the risks and rewards of ownership are retained by thelessor are classified as Operating leases. Lease rentals are charged to the Profit and Loss Account on accrualbasis.

1.6 Impairment of AssetsThe carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairmentbased on internal/external factors. An impairment loss is recognized wherever the carrying amount of an assetexceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price andvalue in use.

In assessing value in use, the Company has measured its ‘value in use’ on the basis of undiscounted cashflows of next five years projections estimated based on current prices.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaininguseful life.

1.7 InvestmentsInvestments that are readily realizable and intended to be held for not more than a year are classified ascurrent investments. Current investments are carried at lower of cost and fair value determined on an individualinvestment basis. All other investments are classified as long term investments. Long term investments arecarried at Cost. However provision for diminution in value is made to recognize a decline other than temporaryin the value of investment.

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1.8 Revenue RecognitionRevenue is recognized based on the nature of activity when consideration can be reasonably measured andthere exists reasonable certainty of its recovery.

• Sale of Goods:Revenue is recognised when the significant risks and rewards of ownership of the goods have passed tothe buyer. The company collects Sales Tax and Value Added Tax (VAT) on behalf of the Government andtherefore these are not economic benefit flowing to the company and hence excluded from revenue bythe reporting date.

• Commission:Commission income is recognised as and when the terms of the contract are fulfilled.

• Interest Income:Interest income is recognised pro-rata on accrual basis on the basis of amount outstanding and rateapplicable.

• Other items of income are accounted as and when the right to receive arises.

1.9 Taxes on IncomeTaxes on income for the current period is determined on the basis of taxable income and tax credits computedin accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome ofassessments/appeals.

Minimum alternate tax (MAT) paid in accordance to the tax laws, which gives rise to future economic benefitsin the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidencethat the company will pay normal income tax. Accordingly, MAT is recognised as an asset in the balance sheetwhen it is probable that the future economic benefit associated with it will flow to the company and the assetcan be measured reliably.

Deferred tax is recognized on timing differences between the income accounted in financial statements andthe taxable income for the year and quantified using the tax rates and laws enacted or substantively enactedas on the Balance Sheet date.

Deferred tax assets relating to unabsorbed depreciation/business losses/losses under the head ‘Capital gains’are recognized and carried forward to the extent there is virtual certainty that sufficient future taxable incomewill be available against which such deferred tax assets can be realized.

Other deferred tax assets are recognised and carried forward to the extent that there is a reasonable certaintythat sufficient future taxable income will be available against such deferred tax assets can be realized.

1.10 Employee Benefits• Defined Contribution Plan:

Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributionsare charged to the Profit and Loss Account of the period when the contributions to the respective fundsare due.

• Defined Benefit PlanGratuity Liability for eligible employees are defined benefit obligation and are provided for on the basis ofan actuarial valuation on projected unit credit method made at the end of each financial period. Obligationis measured at the present value of estimated future cash flows using discounted rate that is determinedby reference to market yields at the Balance Sheet date on Government Securities where the currencyand terms of the Government Securities are consistent with the currency and estimated terms of thedefined benefit obligation.


The Company does not have a policy of encashment of unexpired leave.

Actuarial gains / losses are immediately taken to Profit and Loss account and are not deferred

1.11 Foreign Currency Transactions

Initial RecognitionForeign currency transactions are recorded in the reporting currency, by applying to the foreign currencyamount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

ConversionForeign currency monetary items are reported using the closing rate. Non-monetary items which are carried interms of historical cost denominated in a foreign currency are reported using the exchange rate at the date ofthe transaction; and non-monetary items which are carried at fair value or other similar valuation denominatedin a foreign currency are reported using the exchange rates that existed when the values were determined.

Exchange DifferencesExchange differences arising on the settlement of monetary items or on reporting company’s monetary itemsat rates different from those at which they were initially recorded during the period are recognised as incomeor as expenses in the period in which they arise

1.12 Inventories

Inventories are valued as follows:-

a) Raw material : At cost

b) Finished goods and work in Progress: At the lower of cost and net realizable value.

Cost includes purchase cost plus custom duty, freight and insurance, if any. Net realizable value is theestimated selling price in the ordinary course of business, less estimated selling costs of completion andestimated costs necessary to make the sale.

1.13 Capital Issue/Preliminary and Pre-Operative Expense

These expenses are charged to the profit and loss account in the period in which incurred.

1.14 Provisions, Contingent Liabilities and Contingent Assets

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probablethat an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate canbe made. Provisions are not discounted to its present value and are determined based on best estimaterequired to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date andadjusted to reflect the current best estimates.

Contingent liability is disclosed in case of

(i) a present obligation arising from past events, when it is not probable that an outflow of resources will berequired to settle the obligation.

(ii) a present obligation arising from past events, when no reliable estimate is possible.

(iii) a possible obligation arising from past events, when the probability of outflow of resources is not remote.

Contingent assets are neither recognized nor disclosed.

Provisions, contingent liabilities and contingent assets are reviewed at each Balance sheet date.

PROOF

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NOTES 2 :

March 31, 2012 March 31, 2011

Authorised Share Capital35,00,000 Equity Shares of face value 10/- each 35,000,000 35,000,00075,00,000, 0% Optionally Convertible RedeemablePreference share of 10/- each 75,000,000 75,000,000Total 110,000,000 110,000,000

Issued, Subscribed and Paid Up Capital32,51,135 Equity Shares of 10/- each 32,511,350 32,511,35070,42,400, 0% Optionally Convertible RedeemablePreference Shares of 10/- each 70,424,000 70,424,000

102,935,350 102,935,350

a)

Reconciliation of the shares outstandingat the beginning and at the end of the March 31, 2012 March 31, 2011reporting period Number (‘In ) Number (‘In )

Equity Share CapitalOutstanding at the beginning ofthe year 3,251,135 32,511,350 1,050,385 10,503,850Issued as per the schemeof amalgamation – – 2,200,750 22,007,500

Outstanding at the end of the year 3,251,135 32,511,350 3,251,135 32,511,350

0% Optionally ConvertibleRedeemable Preference Shares Number (‘In ) Number (‘In )Outstanding at the beginning ofthe year 7,042,400 70,424,000 – –Issued as per the Scheme ofAmalgamation – – 7,042,400 70,424,000

Outstanding at the end of the year 7,042,400 70,424,000 7,042,400 70,424,000

b) Terms/Rights Attached To Equity SharesThe Company has only one class of equity shares having a par value of 10/- per share. Each holder ofequity shares is entitled to one vote per share. The Company declares and pays dividends in Indianrupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in theensuing Annual General Meeting.In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remainingassets of the Company, after distribution of all preferential amounts. The distribution will be in propotion tothe number of equity shares held by the shareholder.

c) Terms of Conversion/Redemption of Preference Shares70,42,400, 0% Optionally Convertible Preference Shares (OCRPS) of 10/- each shall be convertedinto Equity Shares in the ratio of 1:1 in one or more tranches within a period of five (5) years from the dateof allotment in such manner that the requirements of Clause 40A of the Listing Agreement is met at all


times. The OCRPS, if not converted into Equity Shares, either fully or partly within the said period of nextfive (5) years shall be compulsorily redeemed within a period of next five years in one or more tranches.

(d) Details of Share Holders Holding More Than 5% Shares in The Company

Particulars As at March 31,2012 As at March 31,2011Equity Shares Equity Shares

Number % Number %Equity SharesApoorva Himatlal Shah 1,494,051 46 1,494,051 46Hansa Himatlal Shah 691,286 21 691,286 21Alpa Apoorva Shah 250,635 8 250,635 8

Total 2,435,972 75 2,435,972 75

0% Optionally Convertible Preference Shares Preference SharesRedeemable Preference shares

Apoorva Himatlal Shah 4,148,800 58.91 4,148,800 58.91Hansa Himatlal Shah 2,089,200 29.67 2,089,200 29.67Alpa Apoorva Shah 800,800 11.37 800,800 11.37

Total 7,038,800 99.95 7,038,800 99.95

(e) Aggregate Number and Class of Shares Allotted As Fully Paid Up Pursuant To Scheme OfAmalgamation Without Payment Being Received In Cash

The Company allotted 22,00,750 Equity Shares of 10/- each and 70,42,400, 0% Optionally RedeemablePreference Shares of 10/- each in pursuance of scheme of amalgamation without payment being receivedin cash during the year ended March 31, 2011.

Note 3: Reserves & Surplus

Reserves & Surplus March 31, 2012 March 31, 2011Profit and Loss AccountAs per last Balance Sheet 12,390,086 7,863,120Add: Profit for the year 4,631,598 4,526,966

Total 17,021,684 12,390,086

Note 4: Long Term Borrowings

Long Term Borrowings March 31, 2012 March 31, 2011SecuredTerm Loan from bank 24,975,483 35,448,290(Secured Land and building, Plant and Machinery and Personalguarantee of directors) (Rate of Interest is 14.75% p.a.)Unsecured*Short Term LoanFrom bank 2,711,121 7,194,354From Others 731,343 –Total 28,417,947 42,642,644• (Repayment of unsecured loan in 2013 – 14 is 34,42,464/-)• (Interest Rate is 16.5% to 19.5%)

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Note 5: Deferred Tax Liability/AssetAs per AS 22,’Accounting for Taxes on Income’, the deferred tax liability/asset comprises of the following:

Particulars March 31, 2012 March 31, 2011Deferred Tax Liability – on Fixed Asset 17,739,589 13,145,460Deferred Tax Asset – Disallowances under Income Tax Act 10,533,120 8,836,850Total 7,206,469 4,308,610

Note 6: Long Term ProvisionsParticulars March 31, 2012 March 31, 2011

Provision for Gratuity 3,079,923 1,701,920Total 3,079,923 1,701,920

Note 7: Short Term Borrowings

Particulars March 31, 2012 March 31, 2011SecuredPacking Credit(Secured against Stock – in – Trade, rate of interest is 11.25%) 42,348,359 43,774,160UnsecuredFrom related parties 14,449,734 –From other 2,715,624 12,463,077Total 59,513,717 56,237,237

Note 8: Trade Payables

Particular March 31, 2012 March 31, 2011

Trade Payables (Refer Note No. 28) 156,851,924 172,133,620

Total 156,851,924 172,133,620

Note 9: Other Current LiabilitiesParticular March 31, 2012 March 31, 2011

Current Maturities of Long – Term Loan 18,663,921 14,648,231Deposits 8,198 8,790Interest Accrued but not due on borrowings 143,999 116,000Advances from Customers 22,918,266 5,673,050Other payable* 5,759,282 8,045,380Total 47,493,666 28,491,451*Primarily comprises of Statutory Liabilities and Provision for Expenses.

Note 10: Short Term ProvisionsParticular March 31, 2012 March 31, 2011

Provision for Loss on forward contract – 1,706,850Provision for Gratuity 342,213 –

342,213 1,706,850


NOTE 11 :

a) TANGIBLE ASSETS (Amount in )

Gross Block (At Cost) Depreciation Net Block(At Cost)

DESCRIPTIONS As on Additions Deductions As At As at For the Decuctions As at As at As at01/04/11 31/03/12 01/04/11 year 31/03/12 31/03/12 31/03/11

Free - hold land 2,118,910 – – 2,118,910 – – – – 2,118,910 2,118,910Factory Building 66,447,706 7,063,476 – 73,511,182 2,073,424 2,407,083 – 4,480,507 69,030,675 64,374,282Office Premises 31,635,000 – – 31,635,000 474,655 518,475 – 993,130 30,641,870 31,160,345Machinery 23,207,841 3,416,179 – 26,624,020 6,588,566 910,058 – 7,498,624 19,125,396 16,619,275Furniture 3,163,966 1,772,609 – 4,936,575 1,124,454 239,299 – 1,363,753 3,572,822 2,039,512Vehicles 2,665,879 – 194,470 2,471,409 933,639 240,675 88,384 1,085,930 1,385,479 1,732,240Office Equipment 1,292,772 1,017,088 – 2,309,860 472,114 62,051 – 534,165 1,775,695 820,658Computer 504,518 589,286 – 1,093,804 206,989 134,061 – 341,050 752,754 297,529Electrical Fittings 6,362,197 744,634 – 7,106,831 68,814 326,225 – 395,039 6,711,792 6,293,383Bicycle 3,490 – – 3,490 1,493 334 – 1,827 1,663 1,997Total 137,402,279 14,603,272 194,470 151,811,081 11,944,148 4,838,261 88,384 16,694,025 135,117,056 125,458,131Previous Year 14,807,132 122,626,397 31,250 137,402,279 8,083,771 3,862,451 2,074 11,944,148 125,458,131 6,723,361

b) INTANGIBLE ASSETS (Amount in )

Gross Block (At Cost) Depreciation Net Block(At Cost)

DESCRIPTIONS As on *Additions Deductions As At As at For the Deductions As at As at As at01/04/11 31/03/12 01/04/11 year 31/03/12 31/03/12 31/03/11

Goodwill on amalgamation 76,696,032 647,021 – 77,343,053 7,669,604 3,870,748 – 11,540,352 65,802,701 69,026,428Total 76,696,032 647,021 – 77,343,053 7,669,604 3,870,748 – 11,540,352 65,802,701 69,026,428Previous year 76,696,032 – – 76,696,032 3,834,802 3,834,802 – 7,669,604 69,026,428 72,861,230

* Persuant to scheme of arrangement to merge certain undertakings which was approved by the Hon’ble HighCourt, Mumbai on August 13, 2010, the Company had demerged asset and liabilities relatable to this mergedundertaking on the close of business on March 31, 2010. The difference between net assets acquired andshares to be issued treated as Goodwill. There have been certain claims relating to the above merger whichhave settled by the Company during the year and an additional amount of 6.47 lacs has been added toGoodwill Account.

Note 12: Non Current Investments

Particulars March 31, 2012 March 31, 2011

Non – Trade Investments (at cost) (Unquoted)

Government and trust securities

National Saving Certificates* 120,000 60,000

Aggregate amount of unquoted investments 120,000 60,000

* Under lien with Sales Tax Department

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Note 13: Long Term advances (Unsecured, considered good)


Capital Advances 881,000 3,145,840Security Deposits 1,177,946 990,060Deduction of Income Tax (Net of provision for income tax) 2,633,208 2,676,110Loans to Employees 119,532 237,390

Total 4,811,686 7,049,400

Note 14: Inventories


Raw Materials 2,763,720 –Work in Progress 3,193,238 –Finished Goods 380,991 –Stock in Trade 54,965,899 43,471,530

Total 61,303,848 43,471,530

Note 15: Trade Receivable


(Unsecured)Outstanding for a period exceeding six monthsConsidered Doubtful 1,211,344 1,261,340Less: Provision for Doubtful Debts 1,211,344 –

– 1,261,340Other debts Considered good 82,394,026 132,556,590

Total 82,394,026 133,817,930

Note 16: Cash and Bank Balance


Cash and Cash EquivalentsBalance with BanksIn current account 16,070,528 1,358,160In deposit account with original maturity less than 3 Month 25,000 –Cash in hand 498,652 6,650

16,594,180 1,364,810Other Bank BalancesShort Term Bank Deposits 33,398,836 24,422,680

Total 49,993,016 25,787,490


Note 17: Short Term Loans and Advances


(Unsecured, Considered good)Loans to Employees 172,500 –Security Deposits 111,213 –Other advances* 23,036,846 17,876,858

Total 23,320,559 17,876,858

*Primarily comprises of indirect tax receivables, advance to suppliers and other current assets

Note 18: Revenue from operation


Sale of Culinary, ready to eat and Builk Agri Items 906,799,065 724,099,767Other operating incomeExport Benefits 19,992,418 –

Total 926,791,483 724,099,767

Note 19: Other Income


Interest – income 2,343,253 1,586,510Exchange gain (net) – 4,598,270Sundry balance w/ back 2,647,315 6,310Miscellaneous Income 841,813 815,250

Total 5,832,381 7,006,340

Note 20: Cost of Raw material Consumed


Opening Stock – –Add: Purchases 18,723,509 –Less: Closing Stock 2,763,720 –Raw material consumed 15,959,789 –Direct Expenses 858,223 –

Total 16,818,012 –

Note 21: Purchase of Traded Goods


Purchase of Traded Goods 779,268,397 644,965,034

Total 779,268,397 644,965,034

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Note 22: (Increase)/Decrease in Inventory of finished goods and work in progress


Inventory (at the end of the period)• Work in progress 3,193,238 –• Finished Goods 380,991 –• Stock in Trade 54,965,899 43,471,530

58,540,128 43,471,530Inventory (at the beginning of the period)• Work in progress – –• Finished Goods – –• Stock in Trade 43,471,530 25,045,813Total (15,068,598) (18,425,717)

Note 23: Employee Benefit Expense


Salaries, Wages and Bonus 16,874,606 11,186,870Contribution to Provident and Other funds 769,354 726,860Welfare Expenses 395,840 260,570Gratuity 1,867,529 916,780

Total 19,907,329 13,091,080

Note 24: Finance Cost


Interest 19,187,993 14,230,910

Total 19,187,993 14,230,910

Note 25: Other Expenses


Transportation 52,615,097 37,948,030Electricity 676,626 870,540Repairs and Maintenance – Factory 739,046 –Rent 589,400 1,210,500Rates and Taxes 409,507 1,244,810Aditors Remuneration• Statutory Audit Fees 200,000 150,000• Tax Audit 30,000 35,000• Other Certification Work 51,845 113,870Loss on sale of Fixed Assets 41,197 6,378Insurance 957,603 884,850Exchange Loss (net) 7,131,384 –Miscellaneous Expenses 32,833,917 22,271,002

Total 96,275,623 64,734,980


Notes on Financial Statements for the year ended March 31, 2012

Note 26: Contingent Liabilities not provided for( in Lacs)

Particulars 2011-12 2010-11

A. Bills discounted and outstanding 665.76 489.97

B. Guarantees given to Spices Board 36.23 36.23

* The disputed demand outstanding of 5.47 lacs towards Income tax and 2.27 lacs towards Servicetax. Based on the decisions of the Appellate authority and interpretation of other provision the companyhas legally advised that demand is likely to be either deleted or substantially reduced and accordingly noprovision has been made.

27. Estimated amount of contracts remaining to be executed on capital account and not provided for (net ofadvances) 8.01 Lacs (2011: 30.17 lacs).

28. The Company has not received any intimation from “suppliers” regarding their status under the Micro, Smalland Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid asat the year end together with interest paid / payable as required under the said Act have not been given.

29. Company operates in a single business segment. However it operates both in Indian and international markets.Accordingly information required under AS – 17 “Segment Reporting” pertaining to geographical segment is asunder:

Secondary Segment Information ( in Lacs)


Segment Revenue- External Turnover• Within India 1301.60 1377.83• Outside India 7766.39 5628.39

Total Revenue 9067.99 7006.22

Segment Assets• Within India 3486.4 3681.78• Outside India 742.23 543.65

Total Assets 4228.63 4225.43

Segment Liability• Within India 3029.06 3072.22• Outside India – –

Total Liability 3029.06 3072.22

Capital Expenditure• Within India 152.53 1226.26• Outside India – –

Total Expenditure 152.53 1226.26

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30. Related Party Disclosure:

Disclosures as required by the Accounting Standard 18 “Related Party Disclosure” is given below:

a. List of Key Management Personnel and Relatives

Key Management Personnel• Mr. Apoorva H. Shah• Mrs. Alpa A. Shah

Related party to Key Management Personnel• NIL

Company over which key management personnel are able to exercise significant influence

• NHC Mercantile Private Limited

b. Transaction with related Parties ( in Lacs)

Nature of transactions Key Management Company over which keyPersonnel management personnel

is able to exercisesignificant influence

1. Loan Taken 173.26 12.00(201.61) (21.00)

2. Repayment of Loans taken 141.89 6.50(131.73) (1.00)

3. Remuneration 58.54 –(15.34) –

4. Repayment of deposit taken NIL –(145.00) –

5. Purchase of Fixed Assets NIL –(301.00) –

6. Interest on Loan – –(0.02) (0.02)

7. Expenses Incurred – 11.30– (16.41)

8. Sales – 24.95Balance as on March 319. Payable 290.39 10.11

(259.02) (4.61)(Figures in bracket relates to last year.)

c. Disclosure in respect of material Related Party Transactions during the year:(i) Loan Taken includes Mr.Apoorva H. Shah 170.76 Lacs (2011 148.61 Lacs), Mrs. Alpa A. Shah

2.50 Lacs (2011 53.00 Lacs).(ii) Repayment of Loans taken includes Mr. Apoorva H. Shah 138.34 Lacs (2011 84.24 Lacs),

Mrs. Alpa A. Shah 3.55 Lacs (2011 47.50 Lacs).(iii) Repayment of deposit taken includes Mr. Apoorva H. Shah NIL. (2011 145.00 Lacs).(iv) Sales includes NHC Mercantile Private Limited 24.95 lacs (2011 NIL).


31. Earnings per Share (EPS)

The calculation of Earning per Share (EPS) has been made in accordance with AS – 20 earning Per Share

Particulars March 31, 2012 March 31, 2011Amount Amount

( in ‘Lacs’) ( in ‘Lacs’)

i. Profit after tax 46.32 45.27ii. Nominal Value of Ordinary Shares ( ) 10 10iii. Weighted Number of Ordinary Shares ( No’s ) 32,51,135 32,51,135iv. Weight Number of Diluted Share ( No’s ) 1,02,93,535 1,02,93,535v. Basic Earnings per Ordinary Shares ( ) 1.43 1.39vi. Diluted earning per Share ( ) 0.44 0.44

32. Operating Lease Obligation

The Company has entered into operating lease arrangements for premises. The future minimum lease rentalobligations under non-cancellable operating lease is Nil (2010: Nil).

33. Employee Benefits

The Amount recognized in the Company’s financial statements as at the year-end is as under:

A. Change in Present Value of Obligation

( ‘Lacs’)Particulars Gratuity Gratuity

(Unfunded) (Unfunded)2011-12 2010-11

Present Value of the Obligation as on April 1, 2011 17.02 7.85Interest Cost 1.36 0.63Current Service Cost 3.44 2.94Benefits Paid – –Actuarial (gain)/ loss on obligations 12.40 5.60Present Value of the Obligation as on March 31, 2012 34.21 17.02

B. Amount recognized in the Balance Sheet

( ‘Lacs’)Particulars Gratuity Gratuity

(Unfunded) (Unfunded)2011-12 2010-11

Present Value of the Obligation as on April 1, 2011 34.22 17.02Fair value of plan assets – –Un-funded Liability 34.22 17.02Unrecognized actuarial gains/ losses – –Un-funded liability recognized in Balance Sheet 34.22 17.02

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C. Amount recognized in the Profit and Loss Account( ‘Lacs’)

Particulars Gratuity Gratuity(Unfunded) (Unfunded)

2011-12 2010-11

Interest Cost 1.36 0.63Current Service Cost 3.44 2.94Expected Return on Plan Assets – –Actuarial (gain)/ loss on obligations 12.40 5.60Total expense recognized in the Profit and Loss Account 17.20 9.17

D. The Assumptions used to determine the benefit obligations are as follows( ‘Lacs’)

Particulars Gratuity Gratuity2011-12 2010-11

Discount Rate 8.00% 8.00%Expected Rate of increase in compensation levels 5.00% 5.00%Expected Rate of return on plan Assets N.A. N.A.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,promotion and other relevant factors, such as supply and demand in the employment markret.

34. Particular of Raw Material Consumed

Particular 2011-12 2010-11Amount % of Amount % of

Consumption Consumption

Imported Nil 0 % Nil –Indigenous 159,59,789/- 100 % Nil –

Total 159,59,789/- 100 % Nil –

35. Value of Imports (on CIF)

( ‘Lacs’)


Traded Goods Nil 245.63

36. Expenditure in Foreign Currency( ‘Lacs’)


• Commission 31.83 43.94• Travelling 2.40 3.18


37. Earnings in Foreign Currency:

( ‘Lacs’)


• Sales (Export) 7766.39 5626.39

38. These financial statements have been prepared in the format prescribed by the Revised Schedule VI to theCompanies Act, 1956. Previous year’s figures have been recasted / restated.

As per our report of even date attached

For NGS & CO. For and behalf of the Board of Directors,Chartered AccountantsFirm Reg. No. : 119850WGANESH TOSHNIWAL Mr. Apoorva H. Shah Mrs. Alpa Shah(Partner) (CMD) (Whole Time Director)M. No. 046669 Mr. Ashok KamathPlace: Mumbai (Financial Controller)Date: 26th May, 2012

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Cash flow statement for the year ended 31st March, 2012pursuant to clause 32 of the listing agreement 31.3.2012 31.3.2011

Amount (in ) Amount (in )Cash Flow from Operating Activities:Profit Before Tax 7,529,457 4,812,550Adjustments for:Depreciation 8,709,009 7,697,250Interest Paid 19,187,993 14,730,680Interest Received (2,343,253) (1,586,510)Loss on sale of Fixed Assets 41,197 6,380Excess Provision and Sundry Bal Written Back (2,647,315) (6,310)Exchange Rate Fluctuation (Net) 7,131,384 (4,598,270)

Operating profit Before Working Capital Changes 37,608,471 21,055,770(Increase)/Decrease in Working Capital(Increase) in Inventories (17,832,318) (18,425,720)(Increase)/Decrease in trade receivables 50,939,846 (99,537,610)(Increase)/Decrease in loans and advances (3,205,987) 8,743,770Decrease in trade payables (15,281,696)Increase in Current Liabilities and Provision 17,015,581 127,094,500

Cash generated from operations 31,635,426 17,874,940Taxes paid (2,000,000) (1,011,000)

Net Cash from Operating Activities (A) 67,243,896 37,919,710Cash Flow from Investing ActivitiesPurchase of Fixed Assets (15,250,293) 33,053,380Proceeds from sale of fixed assets 64,889 22,800Purchase of Investment (60,000) 60,000Interest Received 2,343,253 1,586,510

Net Cash used in Investing activities (B) (12,902,151) 31,504,070

Borrowings (Net) (10,948,217) 1,558,480Interest Paid (19,187,993) 14,730,670

Net Cash fom financing activities (C) (30,136,209) 16,289,150

Net increase/ (decrease)in cash and Cash Equivalent ( A+B+C) 24,205,536 (9,873,510)Cash and Cash Equivalent at the beginning of the year 1,364,810 35,660,990Cash and Cash Equivalent at the end of the year 16,594,180 1,364,810Earmarked Deposits with Banks 33,398,836 24,422,680Cash and Bank Balances at end of the year 49,993,016 25,787,490


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NHC Foods Limited

Name: ______________________________________________________________

E-mail address: _________________________________

Address: ____________________________________________________________

___________________________________________________________________

___________________________________________________________________

DP ID: _________________________________________

Client ID: _________________________________________

Folio No. _________________________________________(In case of physical holding)

No. of Equity Shares held: _________________________________________

Members are requested to send this feedback form to the address given overleaf.

Signature of the member

BUSINESS REPLY INLAND LETTER

Business Reply Permit No.MH/BYNE/BRP – 315/2012-13

To,System Support ServicesUnit: NHC Foods Limited208, Shivai Industrial Estate,Next to Parke-Davis,89, Andheri Kurla Road,Saki Naka, Mumbai – 400071

Postagewill bepaid by theAddressee

No PostageStampnecessary ifpostedwithin India

NHC Foods LimitedRegd Office : ‘NHC House’, 2/13, Anand Nagar, Santacruz (East), Mumbai - 400055

ATTENDANCE SLIPPlease complete this Attendance Slip and hand it over at the entrance of the Meeting Hall. It helps us to make properarrangements. Failure to bring this Attendance Slip will create unnecessary inconvenience to you.

I/We hereby record my/our presence at the 20th ANNUAL GENERAL MEETING of the Company held on Thursday27th September, 2012 at 10.30 a. m. at Mualana Azad Hall, Guru Narayan Road, Near Reliance Energy, Santacruz(East), Mumbai - 400055 and at any adjournment thereof.

NAME(S) OF THE MEMBER(S) OR PROXY/PROXIES IN BLOCK LETTERS

Registered Folio No.:Share held :

Member’s/Proxy’s Signature(To be signed at the time of handing over this slip)

NOTE : Members/Proxy holders are requested to bring their copies of the Annual Report with them at the Meeting.

Cut here

NHC Foods LimitedRegd Office : ‘NHC House’, 2/13, Anand Nagar, Santacruz (East), Mumbai - 400055

PROXY FORMI/we ______________________________________________________________________________________of _____________________________________________________________________ in the district of_______________________________________ being a member / members of the above named Company herebyappoint ______________________________________________________________________________ of______________________________ in the district of ________________________________________________as my/our proxy to vote for me/us on my/our behalf at the Twentieth Annual General Meeting of the Company tobe held on 27th September, 2012 at 10.30 a.m. and at any adjournment thereof.

DP ID/ Client ID ____________________Folio No.__________________________No. of Shares held _________________

Signature of Shareholder(s):Sole holder/First holder: ___________________________Second holder: __________________________________Third holder: ____________________________________Signature of Proxy: _______________________________

Notes:1. Please affix Revenue Stamp before putting Signature.2. All alterations in proxy form should be initialed.3. The proxy form duly signed by the Equity Shareholder should be deposited at the Registered Office of the Company at ‘NHC House’, 2/13, Anand

Nagar, Santacruz (East), Mumbai - 400055, not later than 48 hours before the commencement of the said meeting.4. Proxy need not be a Shareholder of the Applicant Company.5. In case of multiple proxies, the proxy later in time shall be accepted.

AffixRe. 1/-

RevenueStamp

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