DIRECTORS' REPORT

Dear Members,

The Directors hereby present their 23rd Annual Report on the business and operations of the Company and financial accounts for the year ended 31st March, 2015

2. Operations:

During the year under review, your Company has recorded income of 14819.81 Lacs as against Rs 14366.65 Lacs in the previous year. Due to adverse & volatile market conditions our Company has recorded net profit after tax of Rs. 1.18 Crore, resulting into an Earning Per Share(EPS) of Rs. 1.45 for the financial year.

3. Future Outlook:

In the current year, the business of the Company is likely to improve due to better market condition, technological advancements/improvement in the economy. Moreover, the company is diversifying into other related business areas where business potential is much more.

4. Dividend:

In order to conserve the resources for the future expansion plan of the company under implementation, your directors do not recommend any dividend for the year under the review.

5. Extract of Annual return:

The details forming part of the extract of the Annual Return in form MGT 9 as required under Section 92 of the Companies Act, 2013, is marked as ANNEXURE A which is annexed hereto and forms part of the Directors' Report.

6. Number of Meetings of the Board:

The details of the number of meetings of the Board held during the financial year 2014-15 forms part of the Corporate Governance Report.

7. Directors' Responsibility Statement:

As required by Section 134(3)(c) of the Companies Act, 2013 your Directors state that:

(a) In the preparation of the annual accounts for the year ended 31st March, 2015, the applicable accounting standards have been followed with proper explanation relating to material departures, if any.

(b) The accounting policies adopted in the preparation of the annual accounts have been applied consistently except as otherwise stated in the Notes to financial statements and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year 2014-15 and of the profit for the year ended 31st March, 2015.

(c) Proper and efficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the CompaniesAct, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) The annual accounts for the year ended 31st March, 2015, have been prepared on a going concern basis.

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

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

8. Declaration by independent directors:

Mr. Rajiv Bhatt and Mr. Aashish Vyas are independent directors on the Board of the Company. The Company has received declaration from all the independent directors of the Company confirming that they meet the criteria of Independence as prescribed both under the Companies Act, 2013 and Clause 49 of the Listing Agreement.

9. Company's policy on Director's Appointment and Remuneration:

Pursuant to provisions of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors of the Company, based on the recommendation of the Nomination and Remuneration Committee, has formulated Remuneration Policy.

The remuneration policy of the Company, inter alia, include the aims and objectives, principles of remuneration, guidelines for remuneration to Executive Directors and Non - Executive Directors, fixed and variable components in the remuneration package, criteria for identification of the Board Members and appointment of senior management.

The criteria for identification of the Board Members including that for determining qualification, positive attributes, independence etc. summarily given hereunder:

• The Board members shall possess appropriate skills, qualification, characteristics and experience. The objective is to have a Board with diverse background and experience in business, government, academics, technology, human resources, social responsibilities, finance, law etc. and in such other areas as may be considered relevant or desirable to conduct the Company's business in holistic manner.

• Independent Director shall be person of integrity and possess expertise and experience and / or someone who the Committee/Board believes could contribute to the growth /philosophy/strategy of the Company.

• In evaluating the suitability of individual board members, the Committee takes into account many factors, including general understanding of the Company's business dynamics, global business, social perspective, educational and professional background and personal achievements.

• Director should possess high level of personal and professional ethics, integrity, and values. He should be able to balance the legitimate interest and concerns of the company's stakeholders in arriving at decisions, rather than advancing interest of particular constituency.

• Director must be willing to devote sufficient time and energy in carrying out their duties and responsibilities effectively. He must have the aptitude to critically evaluate management's working as part of a team in an environment of collegiality and trust.

• The Committee evaluates each individual with the objective of having a group the best enables the success of the Company's business and achieve its objectives.

10. Particulars of loans, guarantees or investments:

Details of Loans, Guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.

11. Related party transactions:

All transactions entered with Related Parties during the financial year were on an arm's length basis and were in the ordinary course of business and the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus, disclosure in Form AOC - 2 is not required. Further, there are no materially significant related party transactions during the year under the review made by the Company with promoters, directors, and key managerial personnel or the designated persons which may have a potential conflict with the interest of the Company at large.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website.

12. Energy conservation, technology absorption and foreign exchange earnings and outgo:

As required under the provisions of the Companies Act, 2013 and Rule 8(3) of Companies (Accounts) Rules, 2014 details relating to Conservation of

Energy, Technology Absorption and Foreign Exchange Earnings and outgo are given in Annexure B, which is annexed hereto and forms part of the Directors' Report.

13. Risk management:

Risk management is the process of identification, assessment, and prioritisation of risk followed by coordinated efforts to minimise, monitor and mitigate / control the probability and / or impact of unfortunate events or to maximise the realisation of opportunities.

14. Board evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, the Directors individually as well as the evaluation of the working of the various committee. The independent directors also carried out the evaluation of the performance of the Chairman and the Non - Independent Directors, the details of which are covered in the Corporate Governance Report.

15. Criteria for evaluation of directors:

For the purpose of proper evaluation, the Directors of the Company have been divided into 3 (three) categories i.e. Independent, Non - Independent, & Non - Executive and Executive.

The criteria for evaluation includes factors such as engagement, strategic planning and vision, team spirit and consensus building, effective leadership, domain knowledge, management qualities, team work abilities, results/achievements, understanding and awareness, motivation/commitment/diligence, integrity/ethics/values and openness/receptivity.

16. Directors and key managerial personnel:

i. Mr. Ashok Kamath appointed as Chief Financial officer of the Company w.e.f. 01st Oct, 2014.

ii. Mr. Apoorva Shah, Chairman & Managing Director of the Company retires from the Board by rotation and eligible, offer himself for reappointment. The Board recommends his reappointment. The Board places on record its deep appreciation for the valuable contribution made by him during his tenure as Managing Director of the Company.

In view of the provisions of Section 203 of the Companies Act, 2013 Mr. Apoorva Shah, Chairman & Managing Director, Mrs. Alpa Shah, Whole - Time Director, Mr. Ashok Kamath, Chief Financial Officer and Ms. Suvarnalata Chavan, Company Secretary and Compliance Officer were identified and appointed as Key Managerial Personnel of the Company.

17. Material changes/commitments affecting the financial position, occurred after end of the financial year till date of report

No material changes have been occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report of Board like settlement of any tax liabilities, depression in market value of investments, institution of cases by or against the company, sale or purchase of capital assets or destruction of any assets etc.

18. DETAILS OF UNCLAIMED SHARE CERTIFICATES

In accordance with the requirements of the Clause 5A of the Listing Agreement, shares remaining unclaimed even after 3 reminders have to be transferred and held in a separate demat account. As per the information provided by the Registrars and Transfer Agent, No share remained unclaimed at the end of the year.

19. Deposits:

Your company has not accepted any public deposit during the financial period under review.

20. Details of significant and material orders passed by the regulators, courts and tribunals

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and company's operation in future.

21. Internal control and systems:

The Company has adequate internal control procedures commensurate with its size and nature of business. The objective of these procedure is to ensure efficient use and protection of the Company's resources, accuracy in financial reporting and due compliance of statutes and corporate policies and procedures.

The adequacy of internal control systems are reviewed by the Audit Committee of the Board in its periodical meetings.

22. VIGIL MECHANISM/WHISTLE BLOWER POLICY:

In Compliance with the provisions of Section 177(9) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has framed a vigil mechanism/whistle blower policy to deal with unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct or ethics policy, if any. The Vigil Mechanism / Whistle Blower Policy has also been uploaded on the website of the Company.

23. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

There has been no contract or arrangements entered into by the Company with any related party referred to in sub-section (1) of Section 188 of the Companies Act, 2013.

24. Particulars of employees:

As required under the provisions of the Companies  Act, 2013 and Rule 5(2) and Rule 5(3) of the  Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, particulars of the employees concerned forms a part of Director's Report. Having regard of the provisions of Section 136 of the Companies Act, 2013, theAnnual Report excluding the aforesaid information is being sent to the members of the Company. Any member interested in obtaining such particulars may write to the Company Secretary of the Company.

25. Details relating to remuneration of directors, key managerial personnel and employees:

Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is marked as Annexure - C which is annexed hereto and forms part of the Director's Report.

26. Human resource:

One of the major reason for the sustained success of NHC Foods is our employees of the Company.

The Management of the Company fully recognise the fact that with a well-motivated and energized work force, is key of achieving of Company goals and aims.

The Human Resource Management in NHC Foods is concerned with the people's dimension in the organisation, facilitating the competencies and retention of skilled force, developing management systems that promote commitment, practices that foster team work and flexibility, making employees feel valued and rewarded. Our remuneration package also has a large in-built flexibility to suit individual needs and preferences. There is constant drive to keep the motivation levels of employees high and let them take part in operating decisions of the Company.

The recruitment policy ensure that it has the right number & kind of people at the right place and at right time, capable of effectively and efficiently completing those tasks that help the organisation achieve its overall objective.

27. Auditors and auditor's report

Statutory Auditor:

M/s NGS & Co. LLP, Chartered Accountants (Firm Registration No. 119850W) StatutoryAuditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received a confirmation from M/s. NGS & Co. LLP to the effect that their appointment, if made, at the ensuing AGM would be in terms of Section 139 and 141 of the CompaniesAct, 2013 and Rules made there under and that they are not disqualified for re-appointment.

Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Board had appointed Mr. Dinesh Deora, Practising Company Secretary to conduct SecretarialAudit of the Company for the financial year 2014-15. The SecretarialAudit Report

for the financial year ended 31st March, 2015 is annexed herewith and marked as "Annexure - D". The report is self-explanatory and do not call for any other comments.

28. Subsidiary / Joint Ventures / Associate Companies

Your company does not have any Subsidiary / Joint Ventures / Associate Companies.

29. Disclosure on Sexual Harassment of women at workplace

The Company has set up an Internal Complaints Committee for providing a redressal mechanism pertaining to sexual harassment of women employees at workplace. there was no case of sexual harassment reported during the year under review.

30. Acknowledgments :

The Board of Directors wish to place on record its sincere appreciation for the support received from  its stakeholders, including shareholders, bankers, distributors, suppliers and business associates. The Directors recognize and appreciate the sincere, hard work, loyalty, dedicated efforts and contribution of all the employees that ensured sustained performance in a challenging business environment.

For and on behalf of Board of Directors,

Apoorva Shah

(Chairman & Managing Director)

Registered Office: NHC FOODS LTD. Survey No. 777, Umarsadi Desaiwad Road, Village Umarsadi, Taluka Pardi, District Valsad, Gujarat - 396175