nhc foods - annual report 2010-11 - colour pages · 2 19th annual report notice notice is hereby...

19th ANNUAL REPORT 1

NHC FOODS LIMITED

CORPORATE INFORMATION

Board of Directors: Mr. Apoorva Shah …. Chairman & Managing DirectorMrs. Alpa Shah …….. Whole-Time DirectorMr. Aashish VyasMr. Rajiv BhattMr. Amit Shah (Resigned on 11.11.2010)Mr. Jai Popat (Appointed on 14.02.2011)

Registered Office: ‘NHC House’2/13, Anand Nagar,Santacruz (E),Mumbai – 400055

Statutory Auditors: M/s. NGS & Co.Chartered AccountantsMumbai

Bankers: Union Bank of IndiaState Bank of IndiaHDFC Bank

Registrar & ShareTransfer Agents: M/s. System Support Services

209, Shivai Industrial Estate,89, Andheri Kurla Road,Saki Naka, Andheri (E),Mumbai – 400072

Company Secretary: Ms. Pranali Dhumal

19th ANNUAL GENERAL MEETINGOn the Monday, 25th July, 2011 at 3.00 p.m. at Hotel Athithi, 77 A & B,

Sangathan - 2 Basement, Nehru Road, Vile Parle (East), Mumbai - 400099

19th ANNUAL REPORT2

NOTICE

NOTICE is hereby given that the Nineteenth AnnualGeneral Meeting of the Members of NHC Foods Limited(Formerly, Midpoint Software & Electro Systems Limited)will be held on Monday, the 25th day of July, 2011 at3.00 p.m. at Hotel Atithi, 77 A & B, Sangathan 2 –Basement, Nehru Road, Vile Parle, Mumbai – 400099to transact with or without modification(s), as may bepermissible, the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Profitand Loss Account for the year ended 31st March,2011 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. Aashish Vyas,who retires by rotation, and being eligible, offershim-self for re-appointment.

3. To appoint Statutory Auditors of the Company andto fix their remuneration.

SPECIAL BUSINESS:

4. To consider, and if thought fit, to pass, with or withoutmodifications, the following resolution as anOrdinary Resolution:

“RESOLVED THAT pursuant to the provisions ofSection 257 and all other applicable provisions, ifany, of the Companies Act, 1956 (including anystatutory modification(s) thereto or any re-enactment(s) thereof for the time being in force),Mr. Jai Popat, who was appointed as an AdditionalDirector by the Board of Directors of the Companywith effect from 14th February, 2011 in terms ofprovisions of Section 260 and any other applicableprovisions, if any, of the Companies Act, 1956 (the“Act”) and whose term of office expires at theensuing Annual General Meeting and in respect ofwhom the Company has received a notice in writingfrom a Member proposing his candidature for theoffice of Director of the Company, be and is herebyappointed as a Director of the Company, liable toretire by rotation.”


“RESOLVED THAT pursuant to the provisions ofSections 198, 269, 309 and other applicableprovisions, if any, of the Companies Act, 1956 (“theAct”) (including any statutory modifications or re-enactment thereof, for the time being in force), read

with Schedule XIII to the Act, the consent ofmembers be and is hereby accorded forappointment of Mr. Apoorva Shah, as ManagingDirector of the Company, for a period of five yearswith effect from November 13, 2010 to November12, 2015, as per the terms of remuneration andincrease in / revision of remuneration payable toMr. Apoorva Shah, the Managing Director, asrecommended by the Remuneration Committee onthe terms and conditions as set out in theExplanatory Statement annexed to the Notice;

RESOLVED FURTHER THAT the Board /Remuneration Committee be and is herebyauthorized to alter, vary and modify the said termsof his appointment and/or remuneration includingsalary, allowances and perquisites in such manneras may be agreed to between the Board /Remuneration Committee and Mr. Apoorva Shahand in accordance with the limits prescribed bySchedule XIII to the said Act or any amendment(s)and / or any statutory modification(s) thereto;

RESOLVED FURTHER THAT in absence of orinadequacy of profits in any financial year, (a)subject to approval of Central Government, theremuneration payable to Mr. Apoorva Shah by wayof salary and perquisites shall not be reduced and(b) if the approval of the Central Government asstated in (a) is not received, the remunerationpayable to Mr. Apoorva Shah, the ManagingDirector shall be the maximum amount permittedas per Schedule XIII to the said Act or anyamendment(s) and / or any statutory modification(s)thereto;

RESOLVED FURTHER THAT the Board ofDirectors of the Company be and is herebyauthorized to take all such steps as may benecessary, expedient, usual or proper to give effectto this resolution.”


“RESOLVED THAT pursuant to the provisions ofSections 198, 269, 309 and other applicableprovisions, if any, of the Companies Act, 1956 (“theAct”) (including any statutory modifications or re-enactment thereof, for the time being in force), readwith Schedule XIII to the Act, the consent ofmembers be and is hereby accorded forappointment of Mrs. Alpa Shah, as the Whole-TimeDirector of the Company, for a period of five yearswith effect from February 14, 2011 to January 13,2016, as per the terms of remuneration andincrease in / revision of remuneration payable to


NHC FOODS LIMITED

Mrs. Alpa Shah, the Whole-Time Director, asrecommended by the Remuneration Committee onthe terms and conditions as set out on theExplanatory Statement annexed to the Notice;

RESOLVED FURTHER THAT the Board /Remuneration Committee be and is herebyauthorized to alter, vary and modify the said termsof her appointment and/or remuneration includingsalary, allowances and perquisites in such manneras may be agreed to between the Board /Remuneration Committee and Mrs. Alpa Shah asthe Whole-Time Director and in accordance withthe limits prescribed by Schedule XIII to the saidAct or any amendment(s) and / or any statutorymodification(s) thereto;

RESOLVED FURTHER THAT in absence of orinadequacy of profits in any financial year, (a)subject to approval of Central Government, theremuneration payable to Mrs. Alpa Shah by way ofsalary and perquisites shall not be reduced and (b)if the approval of the Central Government as statedin (a) is not received, the remuneration payable toMrs. Alpa Shah, the Whole-Time Director shall bethe maximum amount permitted as per ScheduleXIII to the said Act or any amendment(s) and / orany statutory modification(s) thereto;

RESOLVED FURTHER THAT the Board ofDirectors of the Company be and is herebyauthorized to take all such steps as may benecessary, expedient, usual or proper to give effectto this resolution.”

By the order of the Board of Directors,

Pranali Dhumal (Company Secretary)

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

Place: MumbaiDate: 30th May, 2011

NOTES :

1. The explanatory statement setting out the materialfacts concerning the Special Business mentionedunder item Nos. 4 to 6 of the Notice pursuant toSection 173(2) of the Companies Act, 1956 isannexed hereto.

2. 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.

3. The Register of Members and Share TransferBooks of the Company will remain closed fromThursday, the 21th July, 2011 to Monday, the 25th

July, 2011, both days inclusive, in terms of theprovisions of Section 154 of the Companies Act,1956 and the applicable Clauses of ListingAgreement entered into with the Stock Exchanges.

4. 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 the

19th ANNUAL REPORT4

EXPLANATORY STATEMENT IN RESPECT OF ITEMNO. 4, 5 and 6 OF THE NOTICE PURSUANT TOSECTION 173(2) OF THE COMPANIES ACT, 1956Item No. 4:

The Board of Directors of the company appointedMr. Jai Popat as an Additional Director on the Board ofthe Company, with effect from February 14, 2011, interms of Section 260 of the Companies Act, 1956.

Mr. Jai Popat vacates his office at the ensuing AnnualGeneral Meeting pursuant to provisions of Section 260of the Act. Notice under Section 257 of the Act has beenreceived from a Member proposing the appointment ofMr. Jai Popat as Director of the Company. Requisiteconsent, pursuant to Section 264(1) of the Act, has beenfiled by Mr. Jai Popat to act as the Director of theCompany.

Mr. Jai Popat is finance professional and has close to15 years of experience in the field of finance and treasury.His expertise lies in funds mobilization both - PrivateEquity and Debt.

Yours Directors recommend this Resolution for yourapproval.

None of the Directors of the Company, except Mr. JaiPopat is concerned or interested in the said resolution.

Item No.5:

Pursuant to the recommendations received from theRemuneration Committee, Board has subject to theapproval of shareholders, has approved appointment ofMr. Apoorva Shah, as Managing Director of the Company,for a period of five years with effect from November 13,2010 to November 12, 2015 and the revision / increaseof remuneration payable to Mr. Apoorva Shah as theManaging Director of the Company with effect fromNovember 13, 2010.

Mr. Apoorva Shah is presently working as a Chairman &Managing Director at NHC Foods Limited (Formerly,Midpoint Software & Electro Systems Limited). He hascontributed immensely to the growth of the Company.He is involved with the affairs of NHC at a strategic andvision level. Whilst continuing to be at the helm of affairs,he is responsible for the expansion of NHC into an ‘end-to-end’ food processing company.

The appointment of Mr. Apoorva Shah as a ManagingDirector is in compliance with the provisions of Section269 of the Companies Act, 1956 which prescribes everyPublic Limited Company having a share capital of more

Meeting, 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 nowmandatory 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 above-mentioned transactions.

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

(h) Disclosures pursuant to Clause 49 of theListing Agreement with respect to the Directorsseeking re-appointment/appointment at theforthcoming Annual General Meeting areattached hereto.


NHC FOODS LIMITED

than Rupees Five (5) Crores must appoint a ManagingDirector.

The details of remuneration payable to Mr. Apoorva Shahare as under:

(i) Salary: Rs. 29,17,400/- (Rupees Twenty Nine LakhsSeventeen Thousand Four Hundred only) perannum with effect from November 13, 2010.

(ii) Perquisites: In addition to the above salary, theManaging Director will be entitled to the followingperquisites as specified below:

a) Medical Reimbursement: He shall be entitledto medical expenses as per the rules of theCompany which include such expenses asshall relate to surgical, optical and Dentaltreatment incurred by himself and his familyup to Rs. 15,000/- per annum.

b) Club membership: The Company shall payfees of Club/s, as allowed under the Act andas per the rules of the Company, subject to amaximum of Rs. 25,000/- per annum. This will,however, not include admission and lifemembership fees.

c) A car with a chauffeur for official purposes asper the rules of the Company.

d) Leave: Subject to the exigencies of hisemployment, Mr. Apoorva Shah shall beentitled to leave in a year on full pay andallowances as per the rules and regulationsof the Company.

e) Telephone & Fax at residence & Mobile phonefor official use as per the rules of the Company.

f) Variable Pay / Performance Bonus: Mr.Apoorva Shah may be paid as may bedetermined by the Committee or the Boardthereof based on such performanceparameters as may be laid down by theCommittee or the Board and as per the rulesof the Company.

g) The Company shall pay contribution at apercentage of salary towards Provident Fundprovided the contribution shall not exceed thelimit laid down under the Income Tax Act, 1961.

h) The Company shall pay gratuity as per thePayment of Gratuity Act, 1972.

Subject to overall ceiling on remuneration mentionedherein, Mr. Apoorva Shah, Managing Director may begiven such other benefits in accordance with theschemes and rules applicable to the members of theCompany framed from time to time.

Explanation: Perquisites shall be evaluated as perIncome Tax Rules, wherever applicable and in absenceof any such rule, perquisites shall be evaluated at actualcost.

In the event of any re-enactment or modification of theCompanies Act, 1956 or the Income Tax Act, 1961 oramendments thereto, this resolution shall continue toremain in force and the reference to various provisionsof the Companies Act, 1956 or the Income Tax Act, 1961shall be deemed to be substituted by the correspondingprovisions of the new act or the amendments thereto orthe rules and notifications issued thereunder.

(iii) Other terms & conditions:

(a) Termination: A notice period of three monthsfrom both the sides.

(b) Rotation: Mr. Apoorva Shah shall not be liableto retire by rotation.

(c) Sitting Fees: Mr. Apoorva Shah will not beentitled to receive any sitting fees for the Boardor the committee meetings constituted by theBoard.

(iv) Overall Remuneration: The aggregate of salary,commission and perquisites in any one financialyear shall not exceed the limits prescribed from timeto time under Section 198, 309 and other applicableprovisions of the Companies Act, 1956 read withSchedule XIII of the said act as may be for the timebeing in force.

(v) Minimum Remuneration: In absence or inadequacyof profits in any financial year, (a) subject to theapproval of the Central Government, theremuneration payable to Mr. Apoorva Shah by wayof salary and perquisites shall not be reduced and(b) if the approval of the Central Government asstated in (a) is not received, the remunerationpayable to Mr. Apoorva Shah shall be the maximumamount permitted as per schedule XIII, as amendedfrom time to time.

Your directors recommend this resolution for yourapproval.

19th ANNUAL REPORT6

None of the directors except Mr. Apoorva Shah isconcerned or interested in this resolution.

Item No. 6:

Your Directors have pursuant to the recommendationsreceived from the Remuneration Committee and subjectto the approval of the members of the company,appointed Mrs. Alpa Shah as the Whole-time director ofthe Company for a period of 5 years with effect fromFebruary 14, 2011 to February 13, 2016 on such termsand conditions set out in the in the resolution at itemno.6 of the Notice. The material terms, includingremuneration, of the said appointment are as follows:

(i) Period: Five years with effect from 14th February,2011 to 13th February, 2016.

(ii) Salary: Rs. 29,17,400/- (Rupees Twenty Nine LakhsSeventeen Thousand Four Hundred only) perannum with effect from February 14, 2011.

(iii) Perquisites: In addition to the above salary, theWhole Time Director will be entitled to the followingperquisites as specified below:

(a) Medical Reimbursement: She shall be entitledto medical expenses as per the rules of theCompany incurred by herself and her familyup to Rs. 15,000/- per annum.

(b) Club membership: The Company shall payfees of Club/s, as allowed under the Act andas per the rules of the Company, subject to amaximum of Rs. 25,000/- per annum. This will,however, not include admission and lifemembership fees.

(c) A car with a chauffeur for official purposes asper the rules of the Company.

(d) Leave: Subject to the exigencies of heremployment, Mrs. Alpa Shah shall be entitledto leave in a year on full pay and allowancesas per the rules and regulations of theCompany.

(e) Telephone & Fax at residence & Mobile phonefor official use as per the rules of the Company.

(f) Variable Pay / Performance Bonus: Mrs. AlpaShah may be paid as may be determined bythe Committee or the Board thereof based onsuch performance parameters as may be laiddown by the Committee or the Board and asper the rules of the Company.

(g) The Company shall pay contribution at a percentageof salary towards Provident Fund provided thecontribution shall not exceed the limit laid downunder the Income Tax Act, 1961.

(h) The Company shall pay gratuity as per the Paymentof Gratuity Act, 1972.

Subject to overall ceiling on remuneration mentionedherein, Mrs. Alpa Shah, Whole time Director may begiven such other benefits in accordance with theschemes and rules applicable to the members of theCompany, framed from time to time.

Explanation: Perquisites shall be evaluated as perIncome Tax Rules, wherever applicable and in absenceof any such rule, perquisites shall be evaluated at actualcost.

In the event of any re-enactment or modification of theCompanies Act, 1956 or the Income Tax Act, 1961 oramendments thereto, this resolution shall continue toremain in force and the reference to various provisionsof the Companies Act, 1956 or the Income Tax Act, 1961shall be deemed to be substituted by the correspondingprovisions of the new act or the amendments thereto orthe rules and notifications issued thereunder.

(iv) Other terms & conditions:

(a) Termination: A notice period of three monthsfrom both the sides.

(b) Rotation: Mrs. Alpa Shah shall not be liable toretire by rotation.

(c) Sitting Fees: Mrs. Alpa Shah will not be entitledto receive any sitting fees for the Board or thecommittee meetings constituted by the Board.

(v) Overall Remuneration: The aggregate of salary,commission and perquisites in any one financialyear shall not exceed the limits prescribed from timeto time under Section 198, 309 and other applicableprovisions of the Companies Act, 1956 read withSchedule XIII of the said act as may be for the timebeing in force.

(vi) Minimum Remuneration: In absence or inadequacyof profits in any financial year, (a) subject to theapproval of the Central Government, theremuneration payable to Mrs. Alpa Shah by way of


NHC FOODS LIMITED

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 25th July, 2011.Name of the Directors Mr. Aashish Vyas Mr. Jai PopatDate of Birth 27/04/1966 25/11/1968

Date of Appointment 30/10/2009 14/02/2011

Expertise in specific general Mr. Aashish Vyas is Mr. Jai Popat is financefunctional area working in the field of Professional and has close to

invesment banking over 15 years of experience in the18 years and has worked field of finance and treasury.with various international His expertise lies in fundsinvestment banks & mobilization both - Privatebrokers in a very senior Equity and Debt.position.

Qualification B.Com., ACA B.Com

List of other Directorships held Intellvision Software NIL(Public Limited Companies) Limited

Chairman/Member of the NIL NILCommittee of the Board ofDirectors of the Company

Chairman/Member of the NIL NILCommittee of Directors of theother Public Limited Companiesin which he/she is a Directora) Audit Committeeb) Shareholder's Committee

By the order of the Board of Directors,Pranali Dhumal

(Company Secretary)Registered Office:NHC FOODS LTD.2/13, Anand Nagar, Santacruz (East),Mumbai - 400055Place: MumbaiDate: 30th May, 2011

salary and perquisites shall not be reduced and (b)if the approval of the Central Government as statedin (a) is not received, the remuneration payable toMrs. Alpa Shah shall be the maximum amountpermitted as per schedule XIII, as amended fromtime to time.

Your directors recommend this resolution for yourapproval.

None of the directors except Mrs. Alpa Shah is concernedor interested in this resolution.

By the order of the Board of Directors,

Pranali Dhumal (Company Secretary)



19th ANNUAL REPORT8

DIRECTORS’ REPORT

Dear Members,

Your Directors are pleased to present their NineteenthAnnual Report together with the Audited FinancialStatement of Accounts along with the Report of theAuditors for the year ended 31st March, 2011.

FINANCIAL HIGHLIGHTS:The Financial Highlights of your company for the yearunder review are given below :

(Rs. in '000)2010-2011 2009-2010

Total Income 731,106.10 716,427.73Profit Before Depreciation & Tax 12,509.80 14,941.87Less : Depreciation 7,697.25 6,242.42Profit Before Tax 4,812.55 8,699.45Less : Earlier year adjustment - 1,295.51Less : Provision for Tax 744.00 700.00Less : Deferred Tax (458.40) 3,985.60Profit After Tax 4,526.95 2,718.34

OPERATIONS:During the year under review, your company hasrecorded income of Rs. 731106.10 Thousand as againstRs. 716427.73 Thousands in the previous year. The netprofit for the financial year ended 31st March, 2011increased to Rs. 4526.95 Thousands from Rs. 2718.34Thousands in the previous year representing an increaseof 66.56 % of the profit after tax.

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.

ALLOTMENT OF SHARES ON AMALGAMATION:

During the year under review, the Board of Directors ofyour Company, at their meeting held on 11th September,2010, had pursuant to the Scheme of Amalgamationpassed by the Hon’ble High Court of Bombay on 13th

August, 2010 for amalgamation of M/s. NHC IndustriesPrivate Limited with that of the Company, and inconsideration thereof, has allotted 22,00,750 Equity

Shares of face value of Rs. 10/- each fully paid-upaggregating to Rs. 2,20,07,500 and 70,42,400 OptionallyConvertible Redeemable Preference Shares of Rs. 10/-each fully paid-up aggregating to Rs. 7,04,24,000 to theEquity Shareholders of M/s. NHC Industries PrivateLimited.

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:

• 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 ExportHouse Status’ by the Ministry of Commerce andIndustry, Office of Zonal Joint Director of ForeignTrade, a recognition granted to establishedexporters for promoting India’s exports and tobuilding up marketing infrastructure and expertiserequired for export promotion.

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


NHC FOODS LIMITED

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.

CORPORATE GOVERNANCE & MANAGEMENTDISCUSSION & ANALYSIS:

A detailed report on Corporate Governance including therelevant Auditors’ Certificate on compliance with theconditions of Corporate Governance as stipulated inClause 49 of the Listing Agreement with the StockExchanges is enclosed.

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, 2011, 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 the companyfor 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 assets

of 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 for re-appointment of M/s. NGS & Co. as Statutory Auditors ofthe Company for the Financial year 2011-12, the Boardof 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 2011-12 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 2011-12, on a remuneration to be decided bythe Board of Directors, in consultation with the said firmof Auditors.

DIRECTORS:

With profound sorrow and grief, the Directors report thesad demise of Mr. Himatlal Shah on 4th May, 2010. Mr.Himatlal Shah, a pioneering of NHC Group and adedicated humanist, guided the affairs of the Company

19th ANNUAL REPORT10

from strength to strength under his valuable advice,guidance and leadership. He provided strategic andunique attributes for NHC’s growth. Your Directors placeon record their deep appreciation for the valuable adviceand guidance rendered by him to NHC group.

Mr. Amit Shah, non executive independent directorstepped down from the Board of the Company, with effectfrom 11th November, 2010 and your directors wish toplace on record their appreciation of the distinguishedservices rendered by him and for his rich and valuablecontributions made to the company. Mr. Aashish Vyas,non-executive independent director, retires from theoffice as Director of your Company, at the ensuing AnnualGeneral Meeting and being eligible, offers himself forre-appointment.

Mr. Apoorva Shah, the Chairman of the Company, wasalso appointed as the Managing Director for a period offive years with effect from 13th November, 2010, and Mrs.Alpa Shah was appointed as a Whole-time Director fora period of five years with effect from 14th February, 2011respectively, as per the terms of remunerationrecommended by the Remuneration Committee and onthe terms and conditions as set out in the ExplanatoryStatement annexed to the Notice and forming part ofthis Annual Report.

Mr. Jai Popat was appointed as an additional director(non-executive director) with effect from 14th February,2011, to hold office till the conclusion of the ensuingAnnual General Meeting. The company has pursuant toSection 257, received notice in writing from a Memberproposing his candidature for office of Directors, liableto retire by rotation.

The Board recommends the above appointments.Resolutions seeking your approval on these items areincluded in the Notice convening the Annual GeneralMeeting together with a brief resumes of the Directorsbeing appointed / re-appointed.

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, 2011 there are no unclaimed depositslying with the Company.

LISTING AGREEMENT COMPLIANCE:

Pursuant to the requirements of the Listing Agreement,the Company declares that its Equity Shares are listed

on 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 year2011-2012.

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)




NHC FOODS LIMITED

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, 2011.

A. Conservation of Energy:

1. Energy conservation measures takenduring the year 2010-11:

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

2010-2011 2009-2010(A) Power & Fuel Consumption

1. Electricity N.A.a) Purchased Units (Kwh) 64164

Total Amount (Rs.) 5,66,542Rate / Unit (Rs./Kwh) 8.83

b) Own Generationi) Through Diesel Generatorii) Through Steam Turbine / GeneratorsUnits LitresUnits / Ltr. of diesel 540Cost / Unit 42.35

2. Coal N.A. N.A.QuantityTotal CostAverage Rate

3. Furnace Oil N.A. N.A.QuantityTotal CostAverage Rate

4. Others/Internal Generation 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.


FORM B

1. Specific areas in which R & D is being carried out by the Company:- Development of new masalas in own brand name- Improvement in quality and testing of purity of the products- Standardized packaging

2. Benefits derived as a result of the above R & D:Improvement in exports, client satisfaction as a result of introduction of new brands and products.

3. Future plan of action:

The company would continue its research to develop a new portfolio of new products, reduce costs, improvetechnology and produce quality products with focus on health and nutrition. The key challenge for the future isto build and broaden the range of products to meet company’s growth.

4. Expenditure on R & D: (Rs. in '000)

2010-11 2009-10(a) Capital — N.A.(b) Recurring 1641.00 N.A.(c) Total 1641.00 N.A.(d) R & D expenditure as percentage of turnover 0.23 N.A.

5. Technology, Absorption, Adaption & Innovation:1. Efforts, in brief, made towards technology absorption, adaption and innovation:

The Company is upgraded its technology at Pardi by installing advanced equipments & machinery.

2. Benefits derived as a result of the above efforts:Satisfaction of clients needs, improvement in product quality, new product development.

3. Imported Technology: N.A.

6. Foreign Exchange Earnings & Outgo:

(Rs. in '000)

EARNINGS IN FOREIGN CURRENCY

Sr. No. Particulars 2010-11 2009-101. Earnings 5,62,638.59 6,44,814.23

OUTGO IN FOREIGN CURRENCY

Sr. No. Particulars 2010-11 2009-101. Commission 4,394.24 11,956.372. Travelling 318.05 NIL


NHC FOODS LIMITED

MANAGEMENT DISCUSSION AND ANALYSIS

1) BUSINESS OF THE COMPANY

Overview:

With a humble set up of a multi-dimensional foodproducts manufacturing and exports company, NHCFoods Limited has carved a niche for itself in theglobal spices and agro based products industry.NHC is a well recognized manufacturer andexporter of spices, oilseeds and other food productsto numerous countries across the globe. Given thediversity of consumers, NHC caters and developthe products as per the customer taste and needswith the perfect blend of only the best qualityproducts and ingredients, colour and texture.

A. Industry structure & development:

The food sector has been witnessing a markedchange in consumption pattern. Currently,India is the world’s second largest producerof food in the world and the food processingindustry is the one of the largest industries inIndia. In terms of production, consumption,export and expected growth, India is rankedfifth in the world. India is the land of spicesand seeds producing all varieties worth overINR 45 bn amounting to 25%-30% of worldproduction. The export of spices and spice-based value added products during April-February 2010-11 was US$ 1,323.28compared to the US$ 1,063.44 in the sameperiod last year.

India’s agricultural sector, especially foodprocessing and allied activities is goingthrough a major transformation driven by rapidurbanization, improving policy environment,changing life style, increased number ofwomen in workforce and an increasing thruston improvement in rural infrastructure.

In an extremely competitive industry,continued growth depends on bringing newproducts and technologies through a strongResearch & Development platform anddevelops new markets through in-field farmerlevel work.

B. Opportunities and threats:

Your Company is focusing on expanding itsproduct and distribution reach both within itsexisting core business and also newopportunities. Your company’s innovation andR&D effort focuses on developing a portfolioof new products. Your company aims to bringnew and exciting brands that will appeal tomodern lifestyle choices a significantlyemerging player in both domestic as well asexport of variety of spices and allied agroproducts at the most competitive rate in theworld market. The wide range of Company’sproducts include Whole Spices, SpicesPowders, Indian Masalas, Ready Mixes,Processed Foods, Snacks, Semi-ProcessedFoods, Oilseeds of all kinds, Cereals, Grains,Dry Fruits, Nuts, Pickles, Papads, Seasoningsand all types of Food and Spices and alliedfood products etc.

Indian Market presents a good opportunityconsidering the changing attitudes andlifestyles of the new middle class Indianconsumer. However, the biggest bottleneck inexpanding the food processing sector is thelack of adequate infrastructure and technologyin food processing. Also, the industry growthis affected by lack of integrated supply chainand scale of operations and low level ofpenetration in the domestic markets. Everincreasing food inflation and the intensecompetition faced from established brandsfrom organized sector and numerous playersin unorganized sector may pose as achallenge to the business and continue toexert pressure on our business.

C. Risks and concerns:

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.


The availability of the materials in the markets intime and dispatching of the products is alwaysdependent on the agricultural produce of a particularcrop, and the crop failure or shortages whichindirectly puts pressure on the profitability marginsof the Company.

2) INTERNAL CONTROL SYSTEMS AND THEIRADEQUACY:

Your Company’s management continuouslyreviews the internal control system and proceduresto ensure orderly and efficient conduct of business.Your Company adheres to its written corporatepolicies with respect to all transactions, financialreporting and budgeting.

The Company regularly conducts internal auditseither through external or internal resources tomonitor the effectiveness of internal control in theorganisation.

3) FINANCIAL PERFORMANCE & ANALYSIS:

The Company was able to generally maintain itsprofit margins despite of lower realization and debtpayments. Funds have been judiciously deployedto support high quantum of operations.

4) MATERIAL DEVELOPMENTS IN HUMANRESOURCE DEVELOPMENT / INDUSTRIALRELATIONS FRONT:

The Company believes in the overall developmentand continuous growth of its employees. TheCompany continues to provide its employees theideal workplace which results into team spirit andteam work.

Our Development, Performance and Rewardssystem is linked to our Human Resource systemsand helps us to build a successful organisation. Wehave built a team-driven organisation where allemployees work together to create our future.

5) CAUTIONARY STATEMENT:

Statements in this report on ManagementDiscussion and Analysis describing the Company’s

objectives, 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 demand-supply 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 no responsibility in respectof forward looking statements herein which mayundergo changes in future on the basis ofsubsequent developments, information or events.


NHC FOODS LIMITED

REPORT ON CORPORREPORT ON CORPORREPORT ON CORPORREPORT ON CORPORREPORT ON CORPORAAAAATE GOTE GOTE GOTE GOTE GOVERNANCEVERNANCEVERNANCEVERNANCEVERNANCE

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. The detailed report set out below for the financialyear 1st April, 2010 to 31st March, 2011 is as per the format prescribed by SEBI and as is incorporated in Clause 49of the Listing Agreement:

I. Company’s philosophy on Corporate Governance :

The corporate governance philosophy of your company is to ensure attainment of transparency, accountabilityand integrity in all the conduct, dealings and in functioning of the management and the Board. The Companybelieves that good Corporate Governance is essential to achieve long-term corporate goals and to enhancestake holder’s value. Company’s business objective and that of its management and employees is to produceand market the Company’s products in such a way so as to create value that can be sustained over a long termfor all its stakeholders including shareholders, employees, customers, Government and the lenders. In additionto compliance with regulatory requirements, the Company endeavors to ensure that highest standards ofethics are met throughout the organization.

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 five Directors. Mr. Apoorva Shah was a Non-Executive Chairman till 12th November, 2010 and with effect from 13th November, 2010 he wasappointed as an Executive Chairman & Managing Director of your Company; and Mrs. Alpa Shahwho was a Non-Executive Director till 13th February, 2011 was appointed as the Whole-time Directorwith effect from 14th February, 2011. The remaining three Directors are Non-Executive Director, outof whom two are independent directors.

b) Attendance of each director at the Board Meetings and AGM:

During the financial year, eight Board Meetings were held on 29.05.2010, 30.07.2010, 11.09.2010,04.10.2010, 15.10.2010, 13.11.2010, 20.12.2010 and 14.02.2011.

The Details of attendance of each Director at the Board Meeting and Last Annual General Meeting are asfollows:

• Mr. Apoorva Shah, Mr. Aashish Vyas and Mr. Rajiv Bhatt attended all the eight meetings, whereasMr. Amit Shah (resigned on 11.11.2010) attended 5 meetings, Mrs. Alpa Shah (appointed on11.09.2010) attended 6 meetings and Mr. Jai Popat (appointed on 14.02.2011) attended 1 meetingof the Board of Directors.

• All the Directors, except Mr. Amit Shah, Mr. Rajiv Bhatt and Mr. Jai Popat (appointed on 14.02.2011),attended the last Annual General Meeting of the Company held on 11th November, 2010.


(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 0Jai Popat Non Executive 0 0(Appointed on 14/2/11)Amit A. Shah Independent & Non-Executive 0 0(Resigned on 11/11/10)

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

III. Audit Committee: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.

■ 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. Mr.Aashish Vyas is the Chairman of the Committee and Mr. Rajiv Bhatt and Mr. Apoorva Shah are themembers.

During the year under review, the Audit Committee Meetings met 4 (four) times on 29.05.2010, 30.07.2010,13.11.2010 and 14.02.2011 respectively and the necessary quorum was present at the meetings.


NHC FOODS LIMITED

Mr. Aashish Vyas, Chairman of the Audit Committee has attended the Annual General Meeting of the Companyheld on 11th November, 2010 to answer the queries raised by the shareholders.

IV. Remuneration Committee:

a) Brief description and terms of reference:

The Board constituted a Remuneration Committee to determine on their behalf and on behalf of theshareholders, the company’s policy on specific remuneration packages to the executive directors includingany other compensation. The Committee reviewed and decided the overall remuneration of the ManagingDirector and the Whole-time Director.

The Remuneration Committee of the Company was constituted on 05th November, 2010 to determine thecompensation payable to the Executive Directors. The committee was re-constituted on 14th February,2011 to who comprise of Mr. Rajiv Bhatt as a Chairman and Mr. Aashish Vyas and Mr. Jai Popat asmembers.

b) Remuneration Policy:

Payment of remuneration to the Executive Director is in accordance with the terms entered into withthem, the terms and conditions of which are approved by the Remuneration Committee, the Board andsubject to the approval of shareholders. No sitting fees are paid to the Directors of the Company forattending the Board / Committee meetings.

c) The details of the remuneration paid to the Directors during the year 2010-11 are given below:

Sr. No. Name of the Director Salary Perquisites Total

1. Mr. Apoorva Shah 1118337 31662 11500102. Mrs. Alpa Shah 364676 10095 383333

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 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;

viii) Results of Postal Ballot;

ix) General Information about the Company;

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

b) Composition, Meetings and Attendance of Committee:

The Committee comprised of three members with Mrs. Alpa Shah as the Chairman of the Committee andMr. Rajiv Bhatt and Mr. Aashish Vyas as the members. The Committee meets as and when the needarises.

c) Name & Designation of the Compliance Officer:

Ms. Pranali Dhumal, Company Secretary, acts as a Compliance Officer.

d) Details of Shareholders Complaints:

The total number of complaints received and replied, to the satisfaction of shareholders, during the yearwas 12. There are no outstanding complaints as on 31st March, 2011. No request for Share transfers andfor dematerialization was pending for approval as on 31st March, 2011. There was no share transferpending for registration for more than 30 days as on the said date, except in disputed cases.

II. 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

16th Thursday 28.08.2008 11.30 A.M. D-22/8, TTC Industrial Area, 1MIDC, Thane-Belapur Road,Turbhe, Navi Mumbai - 400705

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

* The Registrar of Companies, Mumbai has granted an extension of time to the Company, for holding its18th Annual General Meeting for the year ended 31st March, 2010 upto 13th November, 2010.


NHC FOODS LIMITED

b. Whether special resolutions were put through postal ballot last year? Yes.

During the year 2010-11, two special resolutions were approved by the shareholders through a postalballot. The special resolutions pertained to Alteration of the Object Clause in the Memorandum of Associationof the Company and for shifting of the Registered Office of the Company outside the local limits of the cityof Navi Mumbai to the Mumbai city. Both the Special Resolutions were passed with requisite majority. Themembers also approved through postal ballot two ordinary resolutions relating to Creation of Mortgage /charge on movable / immovable property of the Company and for Increase in the Borrowing powers of theCompany. Both the Ordinary resolutions were also passed with requisite majority.

• Postal Ballot held in October / November, 2010:

Sr. Particulars (Resolution) Valid Postal Postal Ballot Postal BallotNo. Ballot Forms forms with forms with

received Assent for the Dissent for theResolution Resolution

1. Special Resolution u/s 17, 18 No. of Postaland 149 (2A) of the Companies Ballot Forms 39 35 4Act, 1956 for alteration of ObjectClause in Memorandum of No. of shares 2441208 2441068 140Association of the Company.

2. Special Resolution under Section No. of Postal146 of the Companies Act, 1956 Ballot Forms 38 35 3for shifting of the Registered Officeof the Company outside the locallimits of any city town or village i.e. No. of sharesfrom the city of Navi Mumbai to thecity of Mumbai within the state of 2441173 2441033 140Maharashtra.

3. Ordinary Resolution u/s 293(1) No. of Postal(d) of the Companies Act, 1956 Ballot Forms 38 35 3for Increase in borrowing powersof the Company. No. of shares

2441173 2441068 105

4. Ordinary Resolution u/s 293(1) No. of Postal(a) of the Companies Act, 1956 for Ballot Forms 38 35 3Mortgage and/or charge of movableand immovable properties of the No. of sharesCompany. 2441173 2441068 105

All the aforesaid 4 (four) resolutions have therefore been approved by the members with requisite majority.

• Person who conducted the postal ballot exercise:

The Postal ballot exercise in October / November, 2010 was conducted by the Registrar and ShareTransfer Agent of the Company, M/s. System Support Services under the overall supervision of Mr. NarayanParekh, Practicing Company Secretary, the Scrutinizer appointed by the Board and the Company Secretary.


• Procedure for Postal Ballot:

The Postal Ballot was carried out following the procedure set out in Section 192A of the Companies Act,1956 read with the Companies (The Passing of the Resolution by Postal Ballot) Rules, 2001.

c. Are special resolution proposed to be put through postal ballot this year? If required, shall beconducted as per the provisions of relevant laws.

VII. Disclosure

(i) Details of the transactions of a material nature as specified in Accounting Standard 18 of the Companies(Accounting Standards) Rules, 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) The Company, after paying requisite amount towards re-instatement penalty to the Bombay Stock ExchangeLimited (BSE) has revoked the suspension of trading in Equity Shares of the Company with effect fromWednesday, January 27, 2010. After revocation of suspension, there has no instances of non-complianceby the Company, on any matter related to the capital market.

(iii) Whistle Blower policy is at present not adopted by the Company.

(iv) 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 isstrictly 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.

(v) 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.

VIII. Means of communication

(i) Half–yearly report sent to each household of shareholders No

(ii) Quarterly results: YesWhich newspapers normally published in The Company is regularly

publishing its quarterly results inThe Free Press Journal, &Navshakti, Mumbai

(iii) Any web site, where displayed No

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

(v) Whether Management Discussion & Analysis is a Yespart of Annual Report


NHC FOODS LIMITED

IX. General Shareholder Information

(a) Annual General Meeting to be held:

Day/Date Monday, the 25th day of July, 2011Time 3.00 p.m.Venue Hotel Athithi, 77 A & B, Sangathan - 2 Basement,

Nehru Road, Vile Parle (E), Mumbai - 99

(b) Financial Calendar 2010 – 2011 (Tentative):First Quarterly Results on or before 15th August, 2011Second Quarterly Results on or before 15th November, 2011Third Quarterly Results on or before 15th February, 2012Audited Annual Accounts on or before 30th May, 2012Financial Year 1st April to 31st March

(c) Dates of Book Closure:

Thursday, the 21th July, 2011 to Monday, the 25th July, 2011 (Both days inclusive)

(d) Dividend payment date :

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

(e) Listing on Stock Exchange Listing :

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

Phiroze Jeejeebhoy Towers,

Dalal Street, Mumbai – 400 023

2. Ahmedabad Stock Exchange

Kamdhenu Complex, Opp. Sahajanand College,

Panjara Pole, Ambawadi,

Ahmedabad – 380015

3. Madras Stock Exchange Limited

Post Box No. 183, No. 30,

Second Line Beach,

Chennai – 800 001

f) Listing Fees:

The Annual Listing fee for 2011-12 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

(Post Reduction of Equity Share capital)


h) Market Price data :

BOMBAY STOCK EXCHANGE (BSE)Month High Price Low Price No. of Shares

January, 2010 50.00 12.00 57334

February, 2010 44.70 22.75 125649

March, 2010 28.00 20.40 25004

April, 2010 27.70 20.20 16816

May, 2010 37.00 22.65 23404

June, 2010 28.10 21.70 35664

July, 2010 26.45 21.25 13352

August, 2010 32.00 21.55 31641

September, 2010 30.30 22.55 38442

October, 2010 27.95 22.60 22809

November, 2010 39.00 24.50 41844

December, 2010 39.90 26.35 17611

January, 2011 39.60 29.50 5681

February, 2011 38.30 23.80 6034

March, 2011 26.30 20.90 4595

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 contact details are as follows:

M/s. System Support ServicesUnit : NHC Foods Limited209, Shivai Industrial Estate,Next to Parke-Davis,89, Andheri Kurla Road,Saki Naka, Mumbai - 400072Tel No. 022-2850 0835Fax No. 022-2850 1438E-mail: [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.


NHC FOODS LIMITED

k) Distribution Pattern of Shareholding as on 31st March, 2011:

No. of Equity No. of % of Shareholders Total Number % of ShareholdingShares held Shareholders of Shares1-500 5242 96.01 388086 11.94

501-1000 117 2.14 82423 2.54

1001-2000 53 0.97 80196 2.472001-3000 15 0.28 34968 1.08

3001-4000 7 0.13 24220 0.74

4001-5000 4 0.07 18620 0.57

5001-10000 12 0.22 90362 2.78

100001 & above 10 0.18 2532260 77.88Total 5460 100.00 3251135 100.00

Categories of Shareholders as on 31st March, 2011:

Sr. No. Category of shareholders No. of Shares % of Equity1 Indian Promoters 2436222 74.932 Banks, Financial Institutions 910 0.033 Private Corporate Bodies 31482 0.974 NRI Individuals 69535 2.145 Indian Public 712986 21.93

Total 3251135 100.00

Pledge of Shares: - None of the promoters have pledged their shares as on 31st March, 2011.

l) Dematerialization of Shares and liquidity:

The Shares of the Company are compulsorily traded in dematerialised form and are available for trading underboth Depository Systems, viz. NSDL ( National Securities Depository Limited) and CDSL (Central DepositoryServices (India) Limited).

As on 31st March, 2011, nearly, 90.46% of the Company’s total paid-up capital representing 29,41,099 EquityShares are held in dematerialized form and balance 9.54% representing 3,10,036 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, 2011.

However, 70,42,400 0% Optionally Convertible Redeemable Preference Shares (OCRPS) of Rs. 10/- eachfully paid-up aggregating to Rs. 7,04,24,000 allotted pursuant to the scheme of amalgamation of M/s. NHCIndustries Private Limited with that of the Company, are pending for conversion into Equity Shares. The OCRPSshall be converted into Equity shares in the ratio of 1 (One) New Equity Shares of the face value of Rs. 10/-(Rupees Ten only) each to the shareholders of M/s. NHC Industries Private Limited with rights attached thereto,for every 1 (One) OCRPS of the face value of Rs. 10/- (Rupees Ten only) each credited as fully paid-up held bysuch OCRPS holders or their respective heirs, executors or as the case may be, successors in the Company.

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


n) Plant Locations:(i) Factory: 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 certificate, 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]

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.

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)



NHC FOODS LIMITED

AUDITOR’S REPORT

To,The Members of NHC Foods Limited.(formerly known as Midpoint Software & Electro Systems Limited)

1. We have audited the attached Balance Sheet ofNHC Foods Limited (Formerly known as MidpointSoftware and Electro Systems Limited), as at March31, 2011, and also the related Profit and LossAccount and Cash Flow Statement of the companyfor the year ended on that date annexed thereto.These financial statements are the responsibilityof the Company’s management. Our responsibilityis to express an opinion on these financialstatements based on our audit.

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 31,2011 and taken on record by the Board ofDirectors, we report that none of the directorsis disqualified as on March 31, 2011 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, 2011;

ii) 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 Accountants

(Ganesh Toshniwal)PartnerMembership # 46669



ANNEXURE REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE ON THE ACCOUNTS FORTHE YEAR ENDED March 31, 2011 OF NHC FOODS LIMITED (Formerly known as Midpoint Software and ElectroSystems 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. Accordingly, the provisions of clauses4(iii)(b) to (d) of the Order are not applicable.

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 Rs. 1,35,33,936 and the year-end balancewas Rs. 1,21,04,206.

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

d) The loans taken are re-payable on demand. As informed, the lenders have not demanded repayment ofany such loan during the year, thus, there has been no default on the part of the company. The loan givenis interest free.

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. There are no transactions in pursuance of contracts or arrangements entered in the registered maintainedunder section 301 of the Act during the year aggregating to rupees five lakhs or more in respect of anyparty.


NHC FOODS LIMITED

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 (Rs.) the amount related is pending

Income Tax, Tax Liability on 5,47,469/- FY:1995-96 ITAT, referred back theAct, 1961 Regular Assessement case to Assessing Officer

for further hearings.Income Tax, Tax Liability on 3,58,310/- AY:2000-01 Income TaxAct, 1961 Regular Assessement Appellate Tribunal

Income Tax, Tax Liability on 18,39,411/- AY:2001-02 Income TaxAct, 1961 Regular Assessement Appellate Tribunal

Central Excise Excise and 2,26,871/- 1992 to 1995 Customs, Excise andAct, 1961 Service Tax Service 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 a financial institution, bank or debentureholders.

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 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 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.Accordingly, the provisions of clause xiv 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 an overall examination of the balance sheetof the Company, we report that no funds raised on short-term basis have been used for long-term investment.

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 xxof 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 # 46669



NHC FOODS LIMITED

AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCE

We have examined the compliance of conditions of Corporate Governance by NHC Foods Limited for the yearended on 31st March, 2011, 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 # 46669



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, 2011.

For NHC Foods Limited

Apoorva Shah(Chairman & Managing Director)



NHC FOODS LIMITED

MANAGING DIRECTORS CERTIFICATION

To,The 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, 2011 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, 2011

PARTICULARS SCH. As at As atMarch 31, 2011 March, 31 2010

(Rs. in '000) (Rs. in '000)

SOURCES OF FUNDS :Shareholders' FundsShare Capital 1 102,935.35 10,503.85Share Capital Pending Allotment – 92,431.50Reserves & Surplus 2 12,390.07 7,863.12

115,325.42 110,798.47LOAN FUNDS :Secured Loans 3 90.825.56 100,996.62Unsecured Loans 4 22,666.02 14,053.44

113,491.58 115,050.06Deferred Tax Liability 4,308.61 4,767.01

TOTAL 233,125.61 230,615.55

APPLICATION OF FUNDS :Fixed Assets 5Gross Block 214,098.31 91,503.16Less : Depreciation 19,613.75 11,918.57

Net Block 194,484.56 79,584.59Capital Work in Progress 3,145.84 92,718.86Investments 60.00 –

Current Assets, Loans and Advances 6Inventories 43,471.53 25,045.82Sundry Debtors 133,817.93 36,066.30Cash and Bank Balances 25,787.49 35,660.99Loans & Advances 28,208.29 35,941.06

231,285.24 132,714.17

Less: Current Liabilities and Provisions 7Current Liabilities 185,819.41 66,637.60Provisions 10,030.62 7,764.48

195,850.03 74,402.08Net Current Assets 35,435.21 58,312.09

233,125.61 230,615.55

Significant Accounting Policies and Notes on Accounts 14

For NGS & CO. For and behalf of the Board of Directors,Chartered AccountantsFirm Reg. No. : 119850WGANESH TOSHNIWAL Apoorva H. Shah Alpa Shah(Partner) (CMD) (Director)M. No. 046669 Pranali DhumalPlace: Mumbai (Company Secretary)Date: 30th May, 2011


NHC FOODS LIMITED

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2011PARTICULARS SCH. As on As on

March 31, 2011 March 31, 2010(Rs. in '000) (Rs. in '000)

INCOME :Sales and Operating Income 8 724,099.77 713,230.97Other Income 9 7,006.34 3,196.76

731,106.10 716,427.73

EXPENDITURE :Cost of Goods Sold 10 626,539.32 602,259.99Personnel Expenses 11 13,091.08 14,931.45Manufacturing and other Expenses 12 64,235.23 75,081.35Finance Expenses 13 14,730.67 9,213.07Depreciation 5 7,697.25 6,242.42

726,293.55 707,728.28

Profit before tax and adjustments 4,812.55 8,699.45Less : Earlier year adjustments – 1,295.51

Profit before tax 4,812.55 7,403.94Less : Provision for TaxLess : Current Tax 744.00 700.00Less : Deferred Tax (458.40) 3,985.60

Profit after Tax 4,526.95 2,718.34Balance brought forward from previous year 7,863.12 (14,362.37)

12,390.07 (11,644.03)Add : capital reduction – 19,507.15

Balance carried to the Balance Sheet 12,390.07 7,863.12

Earnings per share (FV Rs. 10/-)Basic 1.39 2.59Diluted 0.44 0.26

Significant Accounting Policies and Notes on Accounts 14

For NGS & CO. For and behalf of the Board of Directors,Chartered AccountantsFirm Reg. No. : 119850WGANESH TOSHNIWAL Apoorva H. Shah Alpa Shah(Partner) (CMD) (Director)M. No. 046669 Pranali DhumalPlace: Mumbai (Company Secretary)Date: 30th May, 2011


SCHEDULES TO BALANCE SHEET & PROFIT & LOSS ACCOUNT

March 31, 2011 March 31, 2010PARTICULARS (Rs. in '000) (Rs. in '000)

SCHEDULE - 1SHARE CAPITALAUTHORISED CAPITAL

3500,000 (6500000) Equity Shares of Rs. 10/- Each 35,000.00 65,000.007500000 0% Optionally Convertible Redeemable Preference 75,000.00 –Shares of Rs. 10 each

110,000.00 65,000.00

ISSUED, SUBSCRIBED AND PAID UP CAPITAL3251135 (1050385) Equity Shares of Rs. 10/- each fully paid up 32,511.35 10,503.857042400 0 % Optionally Convertible Redeemable PreferenceShares of 10/- each fully paid up 70,424.00 –

(of the above, 2200750 equity shares and 7042400 0% optionallyconvertible redeemable preference shares, were allotted pursuantto scheme of amalgamation without payment being received in cash)

102,935.35 10,503.85

SCHEDULE - 2RESERVES AND SURPLUSProfit and Loss Account 12,390.07 7,863.12

12,390.07 7,863.12

SCHEDULE - 3SECURED LOANS

Term Loan from BanksRupee Loans 47,051.40 56,297.01

Working Capital LoansRupee Loans 43,774.16 44,699.61

90,825.56 100,996.62

SCHEDULE - 4UNSECURED LOANSLong TermA. From Banks 10,202.94 6,579.06

Short TermA. From Others 12,463.08 7,474.38

22,666.02 14,053.44


NHC FOODS LIMITED

CURRENT YEAR PREVIOUS YEARPARTICULARS (Rs. in '000) (Rs. in '000)

SCHEDULE 6CURRENT ASSETSINVENTORIES: Finished goods / Traded goods 43,471.53 25,045.82

43,471.53 25,045.82

SUNDRY DEBTORS(Unsecured, Considered Good) Outstanding for more than six months 1,261.34 1,761.34 Other 132,556.59 34,304.96

133,817.93 36,066.30

LOANS & ADVANCES:(Unsecured, Considered Good) Advances recoverable in cash or in kind 17,920.27 12,459.80 Deposits 990.06 15,429.92 Payment/Deduction of Income Tax 9,297.96 8,051.34

28,208.29 35,941.06

CASH & BANK BALANCES: Cash In Hand 6.65 64.35Balance With Scheduled Bank In Current Account 1,358.16 10,217.41 In Fixed Deposits as margin money 24,422.68 25,379.23

25,787.49 35,660.99

SCHEDULE - 5 FIXED ASSETS (Rs. in '000)

GROSS BLOCK DEPRECIATION NET BLOCKPARTICULARS As on Additions Deduction As At As at For the Adjustment As at As at As at

01/04/10 31/03/11 01/04/10 year 31/03/11 31/03/11 31/03/10

Freehold land 2,118.91 – – 2,118.91 – – – – 2,118.91 2,118.91Factory Building – 66,447.71 – 66,447.71 – 2,073.42 – 2,073.42 64,374.28 –Office Premises – 31,635.00 – 31,635.00 – 474.66 – 474.66 31,160.35 –Plant and Machinery 6,060.05 17,147.79 – 23,207.84 5,822.73 765.84 – 6,588.57 16,619.28 237.32Electrical Fittings 200.68 6,161.52 – 6,362.20 29.11 39.70 – 68.81 6,293.38 171.57Furniture and Fittings 2,663.04 500.93 – 3,163.97 967.98 156.48 – 1,124.45 2,039.51 1,695.07Computer 393.90 110.62 – 504.52 133.40 73.59 – 206.99 297.53 260.49Vehicles 2,346.60 322.77 – 2,669.37 695.65 239.48 – 935.13 1,734.24 1,650.95Office Equipment 1,023.96 300.07 31.25 1,292.77 434.90 39.29 2.07 472.11 820.66 589.06Goodwill on amalgamation 76,696.03 – – 76,696.03 3,834.80 3,834.80 – 7,669.60 69,026.43 72,861.23

Total 91,503.16 122,626.40 31.25 214,098.31 11,918.57 7,697.25 2.07 19,613.75 194,484.56 79,584.59Previous Year 91,150.30 352.86 – 91,503.16 5,676.15 6,242.42 – 11,918.57 79,584.59 6,836.59Capital Work in Progress 3,145.84 92,718.86



SCHEDULE 7CURRENT LIABILITIES Sundry Creditors 172,133.62 54,916.71 Advance from Customers 5,673.05 1,471.65 Other liabilities 7,896.55 10,249.24 Interest accrued but not due 116.19 –

185,819.41 66,637.60

PROVISIONS Provision for Gratuity 1,701.92 785.14 Provision for Income Tax 6,621.85 5,877.85 Other Provisions 1,706.85 1,101.49

10,030.62 7,764.48

SCHEDULE 8SALES Sales of Goods 701,582.88 665,788.08 Less : VAT 961.66 1,387.13 Net Sales 700,621.22 664,400.95 Operating Income 23,478.55 48,830.02

724,099.77 713,230.97

SCHEDULE 9OTHER INCOME Exchange Rate Fluctuation (net) 4,598.27 691.02 Excess Provision and Sundry Bal Written back 6.31 507.19 Interest Income 1,586.51 1,797.02 TDS 156.86 (P.Y. 179.70) Miscellaneous Income 815.25 201.53

7,006.34 3,196.76

SCHEDULE 10COST OF GOODS SOLD Opening Stock 25,045.81 18,746.78 Add: Purchases 644,965.03 608,559.03

670,010.85 627,305.80 Less: Closing Stock 43,471.53 25,045.82

626,539.32 602,259.99


NHC FOODS LIMITED


SCHEDULE 11EMPLOYEE EXPENSES Salary, Wages and Bonus 11,186.87 12,885.44 Contribution to Provident and Other Funds 726,86 782.74 Staff Welfare Expenses 260.57 625.97 Gratuity 916.78 637.30

13,091.08 14,931.45

SCHEDULE 12MANUFACTURING AND OTHER EXPENSES Power and Fuel 870.54 225.92 Transportation 37,948.03 29,538.50 Job Charges 3,135.94 3,706.12 Labour Charges 334.60 – Packing Material 556.47 – Rent 1,210.50 1,631.31 Auditors Remuneration 298.87 79.12 Insurance Expenses 884.85 206.32 Loss on Sale of Fixed Assets 6.38 – Donation 9.00 –REPAIRS & MAINTENANCE Plant and Machinery 480.75 – Building 211.51 209.58 Others 134.87 349.05 Rates and Taxes 1,244.81 577.78 Commission 5,066.59 11,956.37 Miscellaneous Expenses 11,841.51 26,601.28

64,235.23 75,081.35

SCHEDULE 13FINANCIAL EXPENSES Interest On Fixed Loans 6,683.51 8,915.67 On Other Loans 7,547.40 297.40

14,230.91 9,213.07Discounting Charges 499.76 –

14,730.67 9,213.07


SCHEDULE ‘14’ OF NOTES FORMING PART OF THE ACCOUNTS AS AT 31ST MARCH, 2011

1) SIGNIFICANT ACCOUNTING POLICIES

1.1 BASIS OF ACCOUNTING

The 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 notifiedby the Central Government of India.

1.2 USE OF ESTIMATES:

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

1.3 REVENUE RECOGNITION:

Revenue 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 to thebuyer, Sales Tax and VAT deducted from turnover (gross) is the amount that is included in the amount ofturnover (gross) and not the entire amount of liability arose during the year.

Commission:

Commission income is recognized as and when the terms of the contract are fulfilled.

Interest Income:

Interest income is accrued at applicable interest rates.

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

1.4 EMPLOYEE BENEFITS:

Defined Contribution Plan:

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

Defined Benefit Plan:

Gratuity Liability for eligible employees are defined benefit obligation and are provided for on the basis of anactuarial valuation on projected unit credit method made at the end of each financial period. Obligation ismeasured at the present value of estimated future cash flows using discounted rate that is determined byreference to market yields at the Balance Sheet date on Government Securities where the currency and termsof the Government Securities are consistent with the currency and estimated terms of the defined benefitobligation.

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.


NHC FOODS LIMITED

1.5 FIXED ASSETS:

Fixed 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.

1.6 DEPRECIATION AND AMORTISATION:

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

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

1.7 LEASES:

Assets 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.

1.8 IMPAIRMENT OF ASSETS:

The 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 undiscountedcash flows 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.

1.9 INVESTMENTS:

Investments that are readily realisable and intended to be held for not more than a year are classified ascurrent investments. 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. Current investments are carried at lower of cost and fair value determined on anindividual investment basis.

1.10 INVENTORIES:

Traded goods are valued at lower of cost (determined on FIFO basis) or net realizable value . Cost includespurchase cost plus custom duty, freight and insurance, if any. Net realizable value is the estimated selling pricein the ordinary course of business, less estimated selling costs of completion and estimated costs necessaryto make the sale.

1.11 BORROWING COSTS:

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

1.12 CAPITAL ISSUE/PRELIMINARY AND PRE-OPERATIVE EXPENSE:

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


1.13 FOREIGN CURRENCY TRANSACTIONS:

Initial Recognition

Foreign 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.

Conversion

Foreign 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 Differences

Exchange 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

1.14 TAXES ON INCOME:

Taxes 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.

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.

1.15 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.


NHC FOODS LIMITED

2. NOTES FORMING PART OF ACCOUNTS :

2.1 Contingent Liabilities not provided for :(Rs. in ‘000’)

Particulars 2010-11 2009-10

A. Bills discounted and outstanding 48,996.57 28,014.92B. Guarantees given to Spices Board 3622.49 NILC. Claims against the company not acknowledged as debts Excise

Duty and Income Tax 771.29 NIL

2.2 Future interest liability in respect of assets of the value of Rs. 1,432.45 thousands (2010: Rs.1,432.45 thousands)is Rs. NIL (2010: Rs.5.17 thousands).

2.3 Estimated amount of contracts remaining to be executed on capital account and not provided for (net ofadvances) Rs. 3,017 thousands (2010:NIL).

2.4 (a) Secured loans include a sum of Rs. 12,000 thousands (2010: Rs. 9,000 thousands) repayable within oneyear.

(b) Unsecured loans include a sum of Rs. 4,581.73 thousands (2010: Rs. Nil) repayable within one year.

2.5 Secured Loans: Amount Outstanding

a) Term Loan Rs. 47,051.40 thousandsSecured by pari passu first charge on land and building, plant and machineries and asset created at siteand personal guarantee of directors.

b) Working Capital Loan Rs. 43,774.16 thousandsSecured by pari passu first charge on export bills receivable, stock, other current assets, personal assetsof directors and personal guarantee of all directors.

2.6 Payments to Auditors:

Particulars March 31, 2011 March 31, 2010(Rs. in '000) (Rs. in '000)

Statutory Audit Fees 150.00 51.54

Tax Audit Fees 35.00 27.58

Other Services 113.87 –

TOTAL 298.87 79.12

2.7 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.

2.8 Particulars of Remuneration and other benefits provided to Directors:(A) (Rs. in ‘000)

Particulars Salary & Perquisites Sitting Fees2010-2011 2009-2010 2010-2011 2009-2010

Managing Director and other Wholetime Directors 1,533.34 NIL NIL NIL


Note: As the future liability towards gratuity and Leave encashment is provided on an actuarial basis for thecompany as a whole, amount pertaining to the Directors is not ascertainable and therefore not included inabove.

(B) Computation of net profit in accordance with Section 349 of the Companies Act, 1956 and calculation ofcommission payable to non-wholetime directors.

Particulars March 31, 2011(Rs in ‘000’)

Profit before tax 4,812.55

Depreciation as per accounts 7,697.25

Managerial Remuneration 1,533.34

Less : Depreciation as per Section 350 of the Companies Act, 1956 7,697.25

Profit under section 349/350 for computing Managerial Remuneration 6,345.89

The remuneration payable to the Managing and Whole-time directors is subject to approval of shareholders.

2.9 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 (Rs in ‘000’)Particulars 2010-11 2009-10Segment Revenue- External Turnover

Within India 137,782.63 19,586.81

Outside India 562,838.59 644,814.13

Total Revenue 700,621.22 664,400.94

Segment Assets

Within India 374,611.18 246,967.10

Outside India 54,364.46 58,050.52

Total Assets 428,975.64 305,017.62

Segment Liability

Within India 313,650.21 194,219.15

Outside India - -

Total Liability 313,650.21 194,219.15

Capital Expenditure

Within India 122,626.40 352.86

Outside India - -

Total Expenditure 122,626.40 352.86


NHC FOODS LIMITED

2.10 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 PersonnelMr. Apoorva H. ShahMrs. Alpa A. Shah

Related party to Key Management PersonnelA.H.Shah (HUF)Hansa ShahH. H. Shah (HUF)Himmatlal Shah (upto May 4, 2010)Company over which key management personnel are able to exercise significant influence.NHC Mercantile Private Limited

(b) Transaction with related Parties (Rs. in '000)

Nature of transactions Key Management Relatives of Key Company overPersonnel Management which key

Personnel managementpersonnel is able toexercise significant

influence1. Loans Taken 20,161.22 1,500.00 2,100.00

(2,210.20) (–) (–)

2. Repayment of loans taken 13,173.81 1,500.00 100.00(1,346.52) (–) (–)

3. Directors Remuneration & 15,33.35 – –Perquisites (9,440.00) (–) (–)

4. Repayment of deposits taken 14,500.00 – –(–) (–) (–)

5. Rent Paid – – –(600.00) – –

6. Purchase of Fixed Assets 30,100.00 – –(–) (–) (–)

7. Interest on Loan 1.91 – 1.91(–) (–) (–)

8. Expenses Incurred – – 1,641.13(–) (–) (–)

9. Payable (as on 31st March) 25,902.30 – 460.78(1,703.00) (–) (–)

Figures in bracket relates to last year.


c) Disclosure in respect of material Related Party Transactions during the year :

(i) Loan Taken includes Loan taken from Mr. Apoorva H. Shah Rs.14,861.22 thousands (2010Rs. 1,190.00 thousands), Mrs.Alpa A. Shah Rs.5,300.00 thousands (2010 Rs. 623.64 thousands).

(ii) Repayment of Loans taken includes Loan repaid to NHC Mercantile Private Limited Rs.1,00.00thousands (2010 Rs. NIL thousands), Mr.Apoorva H. Shah Rs.8,423.81 thousands (2010 Rs. 200.00thousands), Mrs. Alpa A. Shah Rs.4,750.00 thousands (2010 Rs. 423.64 thousands).

(iii) Repayment of deposit taken pertains to repayment made to Mr.Apoorva H. Shah Rs.14,500.00thousands (2010 Rs. NIL thousands).

(iv) Purchase of Fixed Assets includes purchases from Mr.Apoorva H. Shah Rs.30,100.00 thousands(2010 Rs. NIL thousands).

(v) Interest on Loan includes NHC Mercantile Private Limited Rs.1.91 thousands (2010 Rs. NILthousands).

2.11 Earnings per Share (EPS)

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


1. Profit after tax 4,526.95 27,18.34

2. Nominal Value of Ordinary Shares (Rs.) 10 10

3. Weighted Number of Ordinary Shares 32,51,135 10,50.385

4. Weight Number of Diluted Share 1,02,93.53 1,02,93.53

5. Basic Earnings per Ordinary Shares (Rs.) 1.39 2.59

6. Diluted earning per share (Rs.) 0.44 0.26

2.12 Deferred Tax Liability / Asset

As per AS 22, ‘Accounting for Taxes on Income’, the deferred tax liability/asset comprises of the following :


Deferred Tax LiabilityDifference between book and 13,145.46 50,94.96Tax Depreciation

Deferred Tax AssetDisallowance under Income Tax Act 8,836.95 327.95

Net Deferred Tax (Liability) 4,308.61 4,767.01

2.13 Opeating Lease Obligations :

Non Cancellable operating lease obligations Rs. NIL (2010 Rs. NIL)


NHC FOODS LIMITED

2.14 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 (Rs. in '000)

Particulars Gratuity Gratuity(Unfunded) (Unfunded)

2010-11 2009-10

Present Value of the Obligation as on April 1, 2010 785.14 360.26

Interest Cost 62.81 28.82

Current Service Cost 294.20 204.31

Benefits Paid - 212.42

Actuarial (gain)/ loss on obligations 559.76 404.17

Present Value of the Obligation as on March 31, 2011 1,701.92 785.14

(B) Amount recognized in the Balance Sheet (Rs. in '000)


2010-11 2009-10

Present Value of the Obligation as on April 1, 2010 1,701.92 –

Fair value of plan assets – –

Un-funded Liability 1,701.92 –

Unrecognized actuarial gains/ losses – –

Un-funded liability recognized in Balance Sheet 1,701.92 –

(C) Amount recognized in the Profit and Loss Account (Rs. in '000)


2010-11 2009-10

Interest Cost 62.81 28.82

Current Service Cost 294.20 204.31

Expected Return on Plan Assets – –

Actuarial (gain)/ loss on obligations 559.76 404.17

Total expense recognized in the Profit and Loss Account 916.78 637.30

(D) The Assumptions used to determine the benefit obligations are as follows:

Particulars Gratuity

Discount Rate 8.00%

Expected Rate of increase in Compensation levels 5.00%

Expected Rate of return on plan Assets 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 market

2.15 The Ministry of Corporate Affairs, Government of India vide its General Notification No. S.O.301(E) datedFebruary 8, 2011 issued under section 211(3) of the Companies Act, !956 has exempted certain classes ofcompanies from disclosing certain information in their Profit and Loss Account. The Company being an ‘exportoriented company’ is entitled to the exemption. Accordingly, disclosures mandated by paragraphs 3(i)(a), 3(ii)(a),3(ii)(b) and 3(ii)(d) of Part II, Schedule VI to the Companies Act, 1956 have not been provided.

2.16 Value of Imports (on CIF) (Rs. in '000)

Particulars For the year ended For the year endedMarch 31, 2011 March 31, 2010

Traded Goods 24,563.00 27,360.90

2.17 Expenditure in Foreign Currency (Rs. in '000)

Particulars For the year ended For the year endedMarch 31, 2011 March 31, 2010

Commission 4,394.24 119,56.37

Travelling 318.05 NIL

2.18 Earnings in Foreign Currency: Rs. 5,62,638.59 thousands (2010 : Rs. 6,44,814.13 thousands)

2.19 Other clauses of paragraph 3, 4C, 4D of part II of Schedule VI of the Companies Act, 1956 are not applicableto the company during the year.

2.20 During the year company has issued and allotted 70,42,400 0% Optionally Convertible Reedeemable Preferenceshares (OCRPS) of Rs.10/- each. The OCRPS shall be converted into Equity shares in the ratio of 1:1 in oneor more trenches within a period of five (5) years from the date of allotment in such manner that the requirementsof 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 five (5) years, shall be compulsorily redeemed within a period ofnext five (5) years in one or more trenches.

2.21 During the year, company has issued and allotted 22,00,750 Equity shares of Rs.10 each to the equity shareholders of NHC Industries Pvt. Ltd. pursuant to the Scheme of Amalgamation between the Company and M/sNHC Industries Private Limited under Section 391 to 394 and other provisions of Companies Act, 1956 dulyapproved by the Hon’ble High Court of Judicature at Bombay vide its Order dated August 13, 2010.

2.22 Previous year’s figures are regrouped wherever necessary.

For NGS & CO. For and behalf of the Board of Directors,Chartered AccountantsFirm Reg. No. : 119850W

GANESH TOSHNIWAL Apoorva H. Shah Alpa Shah(Partner) (CMD) (Director)M. No. 046669 Pranali DhumalPlace: Mumbai (Company Secretary)Date: 30th May, 2011


NHC FOODS LIMITED

Cash flow statement for the year ended 31st March, 2011pursuant to clause 32 of the listing agreement 31.3.2011 31.3.2010

(Rs. in '000) (Rs. in '000)CASH FLOW FROM OPERATING ACTIVITIES :Profit Before Tax 4,812.55 8,699.45Adjustment for :Depreciation 7,697.25 6,242.42Interest Paid 14,730.67 9,213.07Interest Received (1,586.51) (1,797.02)Loss on Sale of Fixed Assets 6.38 –Excess Provision and Sundry Bal Written back (6.31) –Exchange Rate Fluctuation (Net) (4,598.27) –Adjustment on account of merger – 18,127.72Provision for Dimunition in value of Investment – 223.00

Operating Profit before Working Capital Changes 21,055.77 40,708.65Inventories (18,425.72) (25,045.82)Debtors (99,537.61) (36,066.30)Loans and Advances 8,743.77 (32,363.65)Current Liabilities and Provision 127,094.50 74,106.71

Net Changes in Working Capital 38,930.71 21,339.60Extraordinary items – (1,278.61)Taxes paid (1,011.00) (3,354.41)

Net Cash in Operating activities (A) 37,919.71 16,706.58CASH FLOW FROM INVESTING ACTIVITIES :Purchasing of Fixed Assets (33,053.38) (178,530.63)Proceeds from sale of fixed assets 22.80 –Purchase of Investments (60.00) –Interest Received 1,586.51 1,797.02

Net Cash used in Investing Activities (B) (31,504.07) (176,733.61)CASH FLOW FROM FINANCIAL ACTIVITIES :Proceeds from Issue of Share Capital – 92,431.50Borrowings (Net) (1,558.48) 112,412.18Interest Paid (14,730.67) (9,213.07)

Net Cash from Financial Activities (16,289.15) 195,630.61

Net Increase/(decrease) in cash/cash equivalent (A+B+C) (9,873.50) 35,603.58Opening balances of cash/cash equivalent 35,660.99 57.41Closing balances of cash/cash equivalent 25,787.49 35,660.99

Schedules form an integral part of accountsAs per our report of even date

For NGS & CO. For and behalf of the Board of DirectorsChartered AccountantsFirm Reg. No. : 119850WGANESH TOSHNIWAL Apoorva H. Shah Alpa Shah(Partner) (CMD) (Director)M. No. 046669 Pranali DhumalPlace: Mumbai (Company Secretary)Date: 30th May, 2011


(A) Registration DetailsRegistration No. 6 8 0 2 1 State Code 1 1

Balance Sheet Date 3 1 0 3 1 1

Date Month Year

(B) Capital raised during the year (Rs. in ’000)

Bonus Issue NIL Private Placement NIL

Public Issue NIL Right Issue NIL

(C) Position of Mobilisation and Deployment of Funds (Rs. in '000)

Total Liabilities 233126 Total Assets 233126

Sources of Funds

Paid up Capital 102935 Reserve & Surplus 12390

Secured Loans 90826 Unsecured Loans 22666

Deferred Tax Liability 4309

Application of Funds

Net Fixed Assets 194485 Investments 60

Net Current Assets 35435 Misc. Expenditures NIL

Accumulated Losses NIL

(D) Performance of Company (Rs. in ’000)

Turnover 724100 Total Expenses 726294

Profit/Loss before Tax 4813 Profit/Loss after Tax 4527

Earning per share in Rs. 1.39 Dividend Rate % NIL

(E) Generic Names of Three Principal Products/ Service of Company (As per Monetary Terms)

Item Code (ITC Code) Product Description

NA SPICE EXPORTS

For and behalf of the Board of Directors

Apoorva H. Shah Alpa Shah(CMD) (Director)


THE COMPANIES ACT OF 1956, SCHEDULE VI - PART IVBALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE


NHC FOODS LIMITED

NHC Foods Limited(Formerly, Midpoint Software & Electro Systems 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-315/2011-12

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 LIMITEDNHC Foods Limited

(Formerly, Midpoint Software & Electro Systems Limited)Regd 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 19th ANNUAL GENERAL MEETING of the Company held on Monday25th July, 2011 at 3.00 p.m. at Atithi, 77 A & B, Sanagathan - 2 Basement, Nehru Road, Vile Parle (East), Mumbai- 400099 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 Limited(Formerly, Midpoint Software & Electro Systems Limited)

Regd 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 Nineteenth Annual General Meeting of the Company tobe held on 25th July, 2011 at 3.00 p.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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