Shah Foods Ltd.

To

The Members of SHAH FOODS LIMITED

Your Directors have pleasure in presenting the 35^th Director's Report ofyour Company together with the Audited Statement of Accounts and the Auditors' Report ofyour company for the financial year ended 31^st March 2017.

The summary of operating results for the year is given below.

FINANCIAL HIGHLIGHTS

STATE OF COMPANY'S AFFAIRS

During the year under review the total Income of the Company was Rs 540.01 Lakhagainst Rs 512.18 Lakh in the previous year. The Company has earned a Profit after tax ofRs 43.39 Lakh compared to Rs 20.62 Lakh in the previous year. Your Directors arecontinuously looking for avenues for future growth of the Company.

TRANSFER TO RESERVES

There is no proposal to transfer any amount to any reserve.

MATERIAL CHANGES BETWEEN THE DATE OF THE BOARD REPORT AND END OF FINANCIAL YEAR

There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES

No company has become or ceased to be Subsidiary Company Joint Venture Company orAssociate Company during the year.

CHANGE IN THE NATURE OF BUSINESS

There is no change in the nature of the business of the Company.

MEETINGS OF THE BOARD OF DIRECTORS

The information on meetings of the Board of Directors held during the Financial Year2016-17 is provided under clause 2 (B) of the Corporate Governance Report.

CORPORATE GOVERNANCE

As provided under Regulation 15(2) of the SEBI (LODR) Regulations 2015 the compliancewith Corporate Governance as specified in Regulation 17 to 27 46(2)(b) to (i) & parac d & e of Schedule V are not applicable to the Company as paid up share capitaldoesn't exceed Rs. 10 Crore. However the Report on Corporate Governance and the RequisiteCertificate from M/s Pinakin Shah & Co. Practicing Company Secretary Ahmedabad isannexed to this Report.

DIVIDEND

The Board has recommended 10% of dividend on equity shares of the Company for thefinancial year 2016-17 subject to approval of Members in the 35th Annual General Meeting.

DEPOSITS

Your Company has not accepted any fixed deposits during the year under review.

RISK MANAGEMENT

There is an adequate risk management infrastructure in place capable of addressingrisks that the organization faces such as strategic financial market property ITlegal regulatory reputational and other risks those have been identified and assessed.

DIRECTORS & KEY MANAGERIAL PERSON

Shri Nirav Janak Shah Managing Director (DIN : 01880069) retires by rotation and beingeligible offers himself for reappointment. Pursuant to Regulation 17 of the SEBI (LODR)Regulations 2015 Details of Director retiring by rotation and proposed forre-appointment as Managing Director is provided under explanatory statement of the Noticeof the 35^th Annual General Meeting.

Shri Hemant Murlidhar Asarpota Director (DIN : 00364044) & Shri BhupendraDwarkadas Parikh Director (DIN : 01462224) have been appointed as a Non-ExecutiveIndependent Directors with pursuant to the provisions of sections 149 152 and

161 and other applicable provisions if any of the Companies Act 2013 and the rulesframed there under read with

Schedule IV to the Act as amended from time to time. They meet the criteria forindependence he meets the criteria for independence as provided in section 149(6) of theAct read with Regulation 17 of the SEBI (LODR) with effect from 29/ 04/2017.

AUDITORS

M/s Suresh R. Shah & Associates Chartered Accountants Ahmedabad (FRN 110691W)were appointed as statutory auditors of the Company by the Board for a period of fiveyears from the conclusion of this Annual General Meeting till the conclusion of the 39^thAnnual General Meeting of the Company to be held in the year 2022. Pursuant to theprovisions of section 139 of the Act and the rules framed thereafter the appointment ofAuditors shall be placed for ratification at every Annual General Meeting. In this regardthe Company has received consent from the Auditors to the effect that they are willing tobe appointed and it would be in accordance with the provisions of section 141 of the Act.

AUDITORS' REPORT

The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation or adverse remark.

SECRETARIAL AUDITOR

M/s Pinakin Shah & Co Practising Company Secretary has been appointed as thesecretarial Auditor of the Company for the financial year 2016-17 as required underSection 204 of the Companies Act 2013 and Rules thereunder. The Secretarial Audit Reportfor the financial year ended March 31 2017 is annexed herewith marked as Annexure III tothis Report. The Secretarial Audit Report contains certain adverse remarks which are dealtwith as under:

COMMITTEES OF THE BOARD

The Committees of the Board is provided under Clause 3 of the CorporateGovernance Report.

PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIES PROVIDED

The Company has not given any loan made any investment or given any guarantee henceinformation is nil.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134 (3)(c) of the Companies Act 2013 the

Board of Directors hereby confirms that

I. In the preparation of the annual accounts the applicable accounting standards havebeen followed and that there are no material departures.

II. It has in the selection of the accounting policies consulted the StatutoryAuditors and has applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of thecompany as at 31^st March 2017 and of the profits of the company for thatperiod.

III. It has taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of thecompany and for preventing and detecting fraud and other irregularities to the best ofits knowledge and ability. There are however inherent limitations which should berecognized while relying on any system of internal control and records.

IV. It has prepared the annual accounts on a going concern basis.

V. The Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operationefficiently.VI. The Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return of the Company is annexed herewith as Annexure II tothis Report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) & 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed herewith as Annexure I tothis report.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year the Company has transferred unclaimed dividend of Rs. 49809 to theInvestor Education and Protection Fund in compliance with provisions of the Companies Act2013.

INSURANCE

All Inventories including Buildings Machinery etc. is adequately insured.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

There were no Related Party Transactions entered by the Company.

DECLARATION BY INDEPENDENT DIRECTORS

The Board of Directors of the Company hereby confirms that Independent director hasgiven the declaration and he meets the criteria of independence as provided under section149(6) of the Companies Act 2013.

FAMILIARIZATION PROGRAMME

The company has not conducted familiarization programme for independent director.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a Vigil Mechanism / Whistle Blower Policy to deal withinstances of fraud and mismanagement if any. The Policy has a systematic mechanism fordirectors and employees to report concerns about unethical behavior actual or suspectedfraud or violation of the Company's Code of Conduct or policy.

A. Conservation of Energy

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

B. Technology absorption

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

FOREIGN EXCHANGE EARNINGS AND OUT GO

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

a) BUY BACK OF SECURITIES

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

b) SWEAT EQUITY

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

c) BONUS SHARES

No Bonus Shares were issued during the year under review.

d) EMPLOYEES STOCK OPTION PLAN

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

e) EQUITY SHARES WITH DIFFERENTIAL RIGHTS

The company has not issued equity shares with differential rights as to dividendvoting or otherwise.

SHARES IN SUSPENSE ACCOUNT

• Aggregate number of shareholders and the outstanding shares in the SuspenseAccount lying at the beginning of the year: NIL

• Number of shareholders who approached issuer for transfer of shares fromSuspense Account during the year: Not Applicable

• Number of shareholders to whom shares were transferred from Suspense Accountduring the year: Not Applicable

• Aggregate number of shareholders and the outstanding shares in the SuspenseAccount lying at the end of the year: NIL

• That the voting rights on these shares shall remain frozen till the rightfulowner of such shares claims the shares: Not Applicable

SHARES IN UNCLAIMED SUSPENSE ACCOUNT

• Aggregate number of shareholders and the outstanding shares lying in theUnclaimed Suspense Account lying at the beginning of the year: NIL

• Number of shareholders who approached issuer for transfer of shares from theUnclaimed Suspense Account during the year: Not Applicable

• Number of shareholders to whom shares were transferred from the UnclaimedSuspense Account during the year: Not Applicable

• Aggregate number of shareholders and the outstanding shares lying in theUnclaimed Suspense Account lying at the end of the year: NIL

ANY SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNALS

No orders were passed by the regulators or courts or tribunals impacting the goingconcern status and company's operation in future.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weaknesses in the design or operation were observed.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

There were no cases filed pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.

DISCLOSURE OF DEMONETIZATION NOTES:

Your company has disclosed the details of specified Bank notes held and transactedduring the period from 8^th November 2016 to 30^th December 2016 inthe Balance sheet as on 31/03/2017. The disclosure has been made in Compliance ofnotification No. GSR 308 (E) dated 30/03/2017.

ACKNOWLEDGEMENT

Your Directors wish to express the continued co-operation received from all theStakeholders.