Notes to Accounts of NHC Foods Ltd.

Mar 31, 2024

(b) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Note 31: Commitments and Contingencies (a) Estimated amount of contracts remaining to be executed on capital account and not provided for - Nil (b) Contingent Liabilities not provided for: (Amount in Lakhs) Particulars 2023-24 2022-23 A. Disputed Demands Outstanding: Income Tax* 28.04 28.04 Excise Duty** - 2.27 * Based on the decisions of the Appellate authority and interpretation of other provision, the company has legally advised that demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.
	** during the year “CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL’ set a side demand order’.
(C)	Bill Discounted/Factoring Payables netted off to the receivables. (Amount in Lakhs) Particulars 2023-24 2022-23 A. Bills discounted and outstanding 16.58 06.22
31.	Details of dues to Micro and Small Enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006). Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information provided by the vendors and available with the Company.

31. Company operates in a single business segment. However, it operates both in Indian and international markets. Accordingly, information required under Ind AS - 108 “Segment Reporting” pertaining to geographical segment is as under, The Chief Operating Decision Maker (CODM) evaluates the Group’s performance and allocates resources based on an analysis of various performance indicators by industry classes. :

37. Employee Benefit Obligations (as per Ind AS 19 “Employee benefits”) :

Post-Emplovment obliaations-a) Defined benefit plan - Gratuity

The company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of five years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied by number of years of service.

Sensitivity Analysis

Discount Rate, Salary Escalation Rate and Withdrawal Rate are significant actuarial assumptions. The change in the Present Value of Defined Benefit Obligation for a change of 100 Basis Points from the assumed assumption is given below:

The weighted average duration of the defined benefit obligation is 22.20

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.

38. The company also has defined contribution plans. Contributions are made to provident fund in India for employees at rate of the decided by the board. The contributions are made to registered provident fund administered by the government. The obligation of the company is limited to the amount contributed and it has neither contractual nor any constructive obligation. The expense recognized during the period towards defined contribution plan is INR 11.31 Lakhs (March 31,2023: INR 11.02 Lakhs).

The management assessed that the fair value of cash and cash equivalent, other balances with bank, trade receivables, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short term maturities of these instruments.

ii. Fair Value Measurement

Level 1 - Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2 - The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3 - If one or more of the significant inputs are not based on observable market data, the instrument is included in level 3.

iii. Valuation technique used to determine fair value

Specific Valuation techniques used to value financial instruments include:

- the use of quoted market prices or dealer quotes for similar instruments

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis

iv. Valuation processes

The accouts and finance department of the company includes a team that performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values. This team reports direclty to the chief financial officer (CFO) and the audit committte. Discussions of valuation processes and results are held between the CFO, AC and the valuation team regulary in line with the company’s reporting requirements.

40. FINANCIAL RISK MANAGEMENT

The company’s activity exposes it to market risk, liquidity risk and credit risk. In order to minimize any adverse effects on the financial performance of the company, derivative financial instruments, such as foreign exchange forward contracts, foreign currency option contracts are entered to hedge certain foreign currency risk exposures and interest rate swaps to hedge variable interest rate exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the impact of hedge accounting in the financial statements.

(A) Credit riski. Credit risk management

The company assesses and manages credit risk based on internal credit rating system. Internal credit rating is performed on a group basis for each class of financial instruments with different characteristics.

The company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information.

A default on a financial asset is when the counterparty fails to make contractual payments within 90 days of when they fall due. This definition of default is determined by considering the business environment in which entity operates and other macro-economic factors.

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* During the year the company wrote off a long-term receivable amounting to Rs. 85.98 Lakhs. This receivable was deemed uncollectible after extensive efforts to recover the amount proved unsuccessful. The write-off has been recognized as an expense in the income statement under other expenses. The long-term receivable related to a contract Agron Holdings Ltd, management has taken action was in accordance with the company’s accounting policy for doubtful debts.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, company maintains flexibility in funding by maintaining availability under committed credit lines.Management monitors rolling forecasts of the company’s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. In addition, the company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

(i) Maturities of financial liabilities

The tables below analyse the company’s financial liabilities into relevant maturity groupings based on their contractual maturities for:

The amounts disclosed in the table are the contractual undiscounted cash flows. Balance due within 12 months equal their carrying balances as the impact of discounting is not significant.

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of change in market prices. Market risk comprises three types of risk: foreign currency risk, interest rate risk and other price risk such as equity price risk and commodity risk.

(i) Foreign currency risk

The company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD, EUR and GBP. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company’s functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the hedges is to minimise the volatility of the INR cash flows of highly probable forecast transactions.

The company’s risk management policy is to hedge around 80% to 90% of forecasted foreign currency sales for the subsequent 1 month. As per the risk management policy, foreign exchange forward contracts are taken to hedge around 40% to 50% of the forecasted sales.

The company while dealing with imports transactions which are denominated in foreign currency which exposes it to foreign currency risk. To minimise the risk of imports, the company may use forward contract to minimse the risk apetite due to foreign currency.

The company uses a combination of foreign currency forward contracts to hedge its exposure in foreign currency risk. The company designates the spot element of forward contracts and the intrinsic value of foreign currency forward contracts as the hedging instrument. The changes in the forward element that relate to the hedged item (‘aligned forward element’) and the changes in time value that relate to the hedged item (‘aligned time value’) are deferred in the costs of hedging reserve and recognised against the related hedged transaction when it occurs. The forward element and the time value relate to the respective hedged item if the critical terms of the forward or the option are aligned with hedged item. Any residual time value and forward points (the non-aligned portion) are recognised in the statement of profit and loss.

The forward contracts is determined with reference to relevant spot market exchange rates. The differential between the contracted forward rate and the spot market exchange rate is defined as the forward points.

The intrinsic value of foreign exchange forward contracts is determined with reference to the relevant spot market exchange rate. The differential between the contracted strike rate and the spot market exchange rate is defined as the intrinsic value. Time value of the option is the difference between fair value of the option and the intrinsic value.

(ii) Interest rate risk

Interest rate can be either fair value interest risk or cash flow interest risk. Fair value interest rate risk is the risk of change in fair values of fixed interest rate bearing instruments because of interest rate fluctuation in interest rate. Cash flow interest rate risk is the risk that the future cash flow of floating interest bearing instruments will fluctuate because of fluctuation risk.

However, During the year presented in these financial statement, the company had primarily borrowed funds under fixed interest rate arrangments with banks and financial institution and therefore the company is not exposed to interest rate risk.

(iii) Price risk (a) Exposure

Commodity price risk - The company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase and manufacture of spices and therefore require a continuous supply of commodities. Due to the significantly increased volatility of the price of the commodities, the company also entered into various purchase contracts for various commodities for which there is an active market.

Equity price risk - The company is not exposed to other Equity price risk during the year presented in these financials statement.

42. CAPITAL MANAGEMENT

For the purpsoe of the company’s capital management, capital includes issued equity capital, convertible preference shares, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company’s capital management is to maximise the shareholder value.

The company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The company’s policy is to keep the gearing ratio between 20% to 40%. The company includes within debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents, other balances with bank excluding discontinued operations.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the borrowings that define capital structure requirements as follows.

- the gearing ratio must be not more than 75% and

- the ratio of net finance cost to EBITDA must be not more than 50%

Pursuant to the amendments wheras disclosure of information enabling users of financial statements to evaluate changes in liabilities arising from financing activities however amendments do not define financing activities, instead they clarify that financing activities are based on the existing definition of Ind AS 7, based on this we have reconciled financing activity wheras amendments are first applied, entities are not required to present comparative information for earlier periods.

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liablities relate to income taxes levied by the same tax authority.

Considering the probability of availability of future taxable profits in the period in which tax losses expire, deferred tax assets have not been recognised in respect of tax lossses carried forward by the Company

Significant estimates

In calculating the tax expense for the current period, the company has treated certain expenditures as being deductible for tax purposes. However, the tax legislation in relation to these expenditures is not clear and the company has applied for a private ruling to confirm their interpretation.

Reconciliation of tax expense and accounting profit multiplied by income tax rate for March 31,2024 and March 31, 2023

2 The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

3 The Company do not have any transactions with companies struck of

4 The Company has not been declared as a willful defaulter by any lender who has powers to declare a company as a willful defaulter at any time during the financial year or after

5 The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year,

6 The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:a) directly or indirectly

lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) orb) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries,

7 The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

8 The Company have no such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961),

9 The provisions regarding CSR Expenses under Section 135 of the Companies Act, 2013 are not applicable to the Company.

10 The company has remitted Indian Rupees Rs.576.68/- Lakhs, equivalent to USD 6.91 Lakhs, for the purpose of acquiring 2540 shares out of 2640 in M/s Intra Metal Trading L.L.C, located within the free trade zone of the United Arab Emirates and same has been disclosed in to financials “Non Trade investments”. as of the aforementioned date, both the issuance, registration, and allotment of shares for M/s Intra Metal Trading L.L.C are still in process. The acquisition itself has not yet been completed even on the date of the signing the financials. Due to the ongoing nature of this transaction, the management has taken the decision to refrain from preparing the consolidated financial statements for the period ended March 31, 2024. This decision is based on the uncertainty surrounding the completion timeline of the acquisition and establish control over the entity

11 Compliance with regards to the number of layers prescribed under clause (87) of section 2 of the Companies Act 2013 read with Companies (Restrictions on number of Layers) Rules, 2017 is not applicable to the Company.

47. Previous year’s figures have been regrouped or reclassified to confirm with the current years’ presentation

Owherever considered necessary.a

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Mar 31, 2015

1. Share Capital

(a) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(b) The Company does not have a holding company.

(c) Aggregate number and class of shares allotted as fully paid-up pursuant to scheme of amalgamation without payment being received in cash.

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

2. Contingent Liabilities not provided for :

(Amount in Rs. )

Particulars 2014-15 2013-14

A. Bill discounted and outstanding 9,04,73,727 5,86,63,680

B. Bank Certificate for cancelled - - guarantee

C. Disputed Demands Outstanding:*

Income Tax 5,47,469 5,47,469

Excise Duty 2,26,871 2,26,871

* Based on the decisions of the Appellate authority and interpretation of other provision, the company has legally advised that demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

3. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Nil (2014: Nil)

4. There are no Micro, Small and Medium Enterprises, to whom the Company over dues which are outstanding for more than 45 days as at March 31,2015 and no interest payment during the year to any Micro, Small and Medium Enterprises. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

5. 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 as under :

6. Leases

The Company has entered into operating lease arrangements for premises. The future minimum lease rental obligations under non-cancellable operating lease for the period less than 1 year is 1,50,000/- (2014 : Nil).

7. During the year, 35,96,400 0% Optionally Convertible Preference Shares of 10/- each were converted into 35,96,400 Equity Shares of 10/- each.

8. As of balance sheet date, the company has net foreign currency exposures (In USD) that are not hedged by derivative instruments or otherwise amounting to Nil (2014: NIL).

9. Related Party Disclosure:

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

a) List of Key Management Personnel and Relatives

Key Management Personnel

Mr. Apoorva H. Shah - Managing Director

Mrs. Alpa A. Shah - Whole time Director

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

NHC Mercantile Private Limited

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

(i) Loan Taken includes from Mr. Apoorva H. Shah 3,67,00,000 (2014: 12,000).

(ii) Repayment of Loans taken includes to Mr. Apoorva H. Shah Rs. 1,27,56,016 (2014: 38,74,043).

(iii) Remuneration includes to Mr. Apoorva H. Shah 42,25,450 (2014: 29,17,404) and to Mrs. Alpa

A. Shah 42,25,450 (2014: 29,17,404).

10. Previous year figures have been recasted / restated wherever necessary.

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Mar 31, 2014

1. Share Capital

(a) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(b) Terms of conversion/redemption of preference shares

0% Optionally Convertible Preference Shares (OCPRS) of Rs. 10/- each shall be converted into equity shares in the ratio of 1:1 in one or more tranches within a period of five years from the date of allotment in such a manner that the requirements of Clause 40A of the listing agreement is met at all times. The OCPRS, if not converted in equity shares, either fully or partly within the said period of five years, shall be compulsorily redeemed within the period of subsequent five years in one or more tranches.

(c) Aggregate number and class of shares allotted as fully paid-up pursuant to scheme of amalgamation without payment being received in cash.

The Company allotted 22,00,750 equity shares of Rs. 10/- each and 70,42,400 0% Optionally Convertible Redeemable Preference Shares of Rs. 10/- each in pursuance of scheme of amalgamation without payment being received in cash during the year ended March 31, 2011.

2.Long Term Borrowings

(i) Term loan from bank is secured by hypothecation of land and building, plant and machinery, and personal guarantee of directors; carries rate of interest of 12% to 12.40% and is repayable in 2015-16 Rs. 1,10,84,135; 2016-17 Rs. 49,99,992 ; 2017-18 Rs. 49,99,992 ; and 2018-19 Rs. 35,79,103.

(ii) Unsecured loans from Bank carries rate of interest 13% is repayable in 2015-16 Rs. 5,10,213 and unsecured loans from others carries rate of interest of 18.80% and is repayable in 2015-16 Rs. 10,00,000.

(iii) Loans and advances from related party carries interest rate of 10% and is repayable in 2015-16.

3. Short Term Borrowings

(i) Working Capital Borrowings from Banks is secured against stock-in-trade includes cash credit facilities, carries rate of interest 12.25% and Packing Credit carries rate of interest Libor 2.5%.

(ii) Other loans carries rate of interest 15% to 16.8% p.a.

4. Contingent Liabilities not provided for :

(Amount in Rs.)

Particulars 2013-14 2012-13

A. Bill discounted and outstanding 5,86,63,680 5,55,88,072

B. Bank Certificate for cancelled - 36,22,494 guarantee C. Disputed Demands Outstanding:*

Income Tax 5,47,469 5,47,469 Excise Duty 2,26,871 2,26,871

* Based on the decisions of the Appellate authority and interpretation of other provision, the Company has legally advised that demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

5. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. Nil (2013: Rs. 6,01,250/-)

6. There are no Micro, Small and Medium Enterprises, to whom the Company over dues which are outstanding for more than 45 days as at March 31, 2014 and no interest payment during the year to any Micro, Small and Medium Enterprises. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

7. 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 as under:

8. Leases

The Company has entered into operating lease arrangements for premises. The future minimum lease rental obligations under non-cancellable operating lease is Rs. Nil (2013 : Nil).

9. During the year, 19,03,600 0% Optionally Convertible Preference Shares of Rs.10/- each were converted into 19,03,600 Equity Shares of Rs. 10/- each.

10. As of balance sheet date, the company has net foreign currency exposures (In USD) that are not hedged by derivative instruments or otherwise amounting to Rs. Nil (2013: Rs. 1,16,25,512).

11. Related Party Disclosure:

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

a) List of Key Management Personnel and Relatives

Key Management Personnel

* Mr. Apoorva H. Shah - Managing Director

* Mrs.Alpa A. Shah - Whole time Director

Related party to Key Management Personnel

* Miss. Aneri Shah - (Daughter of Alpa and Mr. Apoorva Shah)

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

* NHC Mercantile Private Limited

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

(i) Loan Taken includes from Mr. Apoorva H. Shah Rs. 12,000 (2013: Rs. 1,17,30,000).

(ii) Repayment of Loans taken includes to Mr. Apoorva H. Shah Rs. 38,74,043 (2013: Rs. 87,03,869).

(iii) Remuneration includes to Mr. Apoorva H. Shah Rs. 29,17 404 (2013: Rs. 29,17,404) and to Mrs. Alpa A. Shah Rs. 29,17,404 (2013: Rs. 29,17,404).

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

Disclosure relating to experience adjustments has not been provided in the absence of relevant information.

12. Previous year figures have been reclassified to conform to this year''s classification.

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Mar 31, 2013

Note 1: Contingent Liabilities not provided for :

(Amount in Rs.) Particulars 2012-13 2011-12

A. Bill discounted and outstanding 5,55,88,072 6,65,76,051

B. Guarantees given to Spice Board 36,22,494 36,22,494

C. Disputed Demands Outstanding:*

Income Tax 5,47,469 5,47,469

Excise Duty 2,26,871 2,26,871

*Based on the decisions of the Appellate authority and interpretation of other provision, the Company has legally advised that demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 6,01,250/- (2012: Rs. 8,01,000/-).

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

4. 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 as under:

5. Related Party Disclosure:

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

a. List of Key Management Personnel and Relatives Key Management Personnel

- Mr. Apoorva H. Shah

- Mrs. Alpa A. Shah

Related party to Key Management Personnel

- Miss. Aneri Shah

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

- NHC Mercantile Private Limited

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

(i) Loan Taken includes from Mr. Apoorva H. Shah Rs. 1,17,10,000 (2012: X 1,70,75,990) (ii) Repayment of Loans taken includes to Mr. Apoorva H. Shah Rs. 87,03,869 (2012: Rs. 1,38,34,421) (i) Remuneration includes to Mr. Apoorva H. Shah Rs. 29,17,404 (2012: Rs. 29,17,404) and to Mrs. Alpa A. Shah X 29,17,404 (2012: Rs. 29,17,404).

6. Leases:

The Company has entered into operating lease arrangements for premises. The future minimum lease rental obligations under non - cancellable lease is X Nil (2012: Nil)

7. As of balance sheet date, the Company has net foreign currency exposures (in USD) that are not hedged by derivative instruments or otherwise amounting to Rs. 1,16,25,512 (2012: Rs. 264,33,075).

8. During the period, Company has allotted 10,00,000 Equity Shares of X 10/- at a premium of Rs. 12.60/- on preferential basis.

9. During the year, 15,42,400 0% Optionally Convertible Preference shares of Rs. 10/- each were converted into 15,42,400 Equity Shares of X 10/- each.

10. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the Current year''s classification/disclosure.

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Mar 31, 2012

Note 1: Contingent Liabilities not provided for

(Rs. in Lacs)

Particulars 2011-12 2010-11

A. Bills discounted and outstanding 665.76 489.97

B. Guarantees given to Spices Board 36.23 36.23

* The disputed demand outstanding of Rs. 5.47 lacs towards Income tax and Rs. 2.27 lacs towards Service tax. Based on the decisions of the Appellate authority and interpretation of other provision the company has legally advised that demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

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

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

4. 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 as under:

5. Related Party Disclosure:

Disclosures as required by the Accounting Standard 18 "Related Party Disclosure" is given below: a. List of Key Management Personnel and Relatives

Key Management Personnel

- Mr. Apoorva H. Shah

- Mrs. Alpa A. Shah

Related party to Key Management Personnel

- NIL

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

- NHC Mercantile Private Limited

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

(i) Loan Taken includes Mr.Apoorva H. Shah Rs. 170.76 Lacs (2011 Rs. 148.61 Lacs), Mrs. Alpa A. Shah Rs. 2.50 Lacs (2011 Rs. 53.00 Lacs).

(ii) Repayment of Loans taken includes Mr. Apoorva H. Shah Rs. 138.34 Lacs (2011 Rs. 84.24 Lacs), Mrs. Alpa A. Shah Rs. 3.55 Lacs (2011 Rs. 47.50 Lacs).

(iii) Repayment of deposit taken includes Mr. Apoorva H. Shah Rs. NIL. (2011 Rs. 145.00 Lacs).

(iv) Sales includes NHC Mercantile Private Limited Rs. 24.95 lacs (2011 Rs. NIL).

6. Operating Lease Obligation

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

7. Employee Benefits

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

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

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Mar 31, 2010

1.1 AMALGAMATION

During the year, a composite scheme of amalgamation between the Company and M/s NHC Industries Private Limited (the amalgamating company) under Section 391 to 394 and other provisions of Companies Act, 1956 was filed in the High Court of Judicature at Bombay.

NHC Industries Private Limited was carrying on the business of exports of oil seeds, spices powder, pulses, sugar and wide range of agricultural food products and was also engaged in trading on commodity exchange, import of pulses, spices etc. and sale in local market.

Under the scheme, entire assets and liabilities of NHC Industries Private Limited were to vest with the company with effect from April 1, 2009 (Appointed Date). The said scheme was approved by the Honble High Court of Judicature at Bombay on August 13, 2010. The Company filed the certified copy of the Court order approving the scheme with the Registrar of Companies (ROC), Bombay on September 7, 2010 (Effective Date) as required under the applicable provisions of the Companies Act, 1956. Accordingly, the said scheme became effective from the Appointed Date on April 1, 2009.

The method of accounting employed by the Company is the pooling of interest method.

Salient feature of the Scheme are as under:

(a) With effect from April 1, 2009 (Appointed Date), all assets and liabilities of NHC Industries Private Limited shall be transferred and vested in the Company as a going concern.

(b) In consideration of the scheme, the Company will issue:

(i) 22,00,750 Equity shares of face value of Rs 10/- each fully paid up aggregating to Rs. 2,20,07,500 to the equity shareholders of NHC Industries Private limited ; and

(ii) 70,42,400 Optionally Convertible Preference shares of Rs 10/- each fully paid up aggregating to Rs 7,04,24,000 to the Equity shareholders of the NHC Industries Private Limited.

Pending issue of these equity and preference shares, a sum of Rs 9,24,31,500 has been shown as Share Capital pending allotment.

Accounting (As per approved Scheme)

(i) The Company has recorded all the assets and liabilities of the amalgamating company at the respective values appearing in their books.

(ii) Loans and Advances and other dues outstanding between the Company and the amalgamating company are cancelled.

(iii) The difference of Rs 76,696,032/- between Shares to be issued by the Company pursuant to the amalgamation scheme and the net assets of the amalgamating company acquired are shown as Goodwill on amalgamation.

(iv) All costs, charges, taxes including duties, levies and all other expenses arising out of, or incurred in carrying out and implementing the scheme aggregating to Rs 18,70,532 are debited to Goodwill Account.

1.2 CONTINGENT LIABILITY

Bills discounted and outstanding Rs. 28,014,916 ( P.Y- Nil)

In respect of possible warranty claims, if any, that may arise for products sold and services rendered in earlier years. However, these shall be accounted for in the year in which the claims are settled.

There was a raid of the Excise Department. Certain objections were raised, duty was assessed for 1992 to 1995 by the Department and demand was raised of Rs. 16,06,916 for duty and penalty. The company, thereafter, filed an appeal with the Appellate Tribunal. The judgment of the Tribunal has been delivered on 23.06.1998 setting aside the original assessment order. Fresh assessment has not yet been done. The amount of contingent liability, if any, in respect of this is not ascertainable.

Income Tax demand of Rs 5,47,469 ( 2009 : 5,47,469) for AY 1996-97 where the ITAT Mumbai Bench : "B" has vide its order dated 26th July, 2004 referred back the matter to A.O. to decide the claim of the Assesses after offering adequate opportunity of hearing.

1.3 The balances of Sundry Debtors, Loans & Advances and Sundry Creditors are subject to confirmation and consequential reconciliation/adjustments arising there from, if any. The management, however, does not expect any material variation.

1.4 During the year on August 14, 2009, shareholders of the company by passing a special resolution decided to reduce the paid up equity share capital of the company, to which High Court of Bombay has given its approval on October 9, 2009. Accordingly, the existing Share Capital of 30,01,100 equity shares of Rs 10/- each was cancelled and replaced by 10,50,385 equity shares of Rs. 10/- each bearing new series from 01 to 10,50,385. The Capital Reduction Account of Rs. 1,95,07,150/- was adjusted against earlier years losses of Rs. 3,13,22,234/- and expenses on account of professional fees of Rs. 18,70,532/- were charged to Profit and Loss Account for the year under head "Goodwill Account".

1.5 Future interest liability in respect of assets of the value of Rs.14,32,451 (2009 : Rs. Nil ) is Rs. 5,468 (2009 : Rs. Nil)

1.6 Secured loans include a sum of Rs.90,00,000 (2009 : Rs.Nil) repayable before 31st March 2011.

1.7 In the opinion of the board, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of the business. The provision for all known liabilities is adequate and not in excess of the amount considered reasonably necessary.

1.8 The Company operates in a single business and geographical segment. Hence information required under Accounting Standard 17, Segment Reporting, issued by the Council of the Institute of Chartered Accountants of India, has not been given.

1.9 Related Party Disclosure:

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

a) List of Key Management Personnel and Relatives

Key Management Personnel

Mr. Himatlal H. Shah

Mr. Apoorva H. Shah

Mrs. AlpaA. Shah

Mr. Amit Shah

Related party to Key Management Personnel

A.H.Shah (HUF)

Amit Shah

Hansa Shah

H. H. Shah (HUF)

(b) Transaction with related Parties

1.10 Earnings per Share (EPS)

1.11 Deferred Tax Liability / Asset

1.12 Employee Benefits

Since the Company has not funded its gratuity liability and leave encashment, there are no returns on the planned assets and hence the details related to changes in fair value of assets have not been given.

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.

1.13 Sales, Purchase, Opening & Closing Stock

1.14 Value of Imports (on CIF)

1.15 Expenditure in Foreign Currency

1.16 Earnings in Foreign Currency: Rs. 644,814,132 (2009:- Nil)

1.17 Licensed Capacity:

The Company is not required to obtain any license under Industries (Development & Regulation) Act, 1951, therefore legal licensed capacity is not applicable.

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

1.19 Previous years figures are regrouped wherever necessary.