To

The Members of

SHAH FOODS LIMITED

Your Directors have pleasure in presenting the 37^th Director's Report of your Company together with the Audited Statement of Accounts and the Auditors' Report of your company for the financial year ended 31^st March 2019.

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

1. FINANCIAL HIGHLIGHTS

2. STATE OF COMPANY'S AFFAIRS

During the year under review the total Income of the Company was Rs 569.86 Lakhs against Rs 546.06 Lakhs in the previous year. The Company has earned a Profit after Tax of Rs. 11.70 Lakh compared to Rs 12.29 Lakh in the previous year.

It is with deep sadness that we report of the passing of Mr Janak Shah founder director of Shah Foods Limited on the night of April 1 2019. He had always maintained in the company the highest standards of integrity and instilled in the company the culture of delivering highest standards of products and services to the customer be it individuals who bought our own-branded products or in later years our principal client Britannia.

Sadly we also report that Britannia served by hand delivery on April 1 2019 a notice dated March 29 2019 on Shah Foods Limited terminating the contract manufacturing arrangements with effect from June 30 2019. These contract manufacturing arrangements were operational for over 29 years but were terminated with three months' notice in accordance with a term in the contract without assigning any reason. It may be recalled that Shah Foods has won several awards from Britannia as a supplier.

Britannia explained that the termination was on account of Britannia having built up its own manufacturing capacity at Jhagadia in Gujarat and Ranjangaon which was being underutilised. Britannia did seek to explore the possibility for a contract manufacturing arrangement with Shah Foods for Britannia bread. Following the communication about possible contract manufacture of bread Britannia's head of breads business visited Shah Foods; unfortunately the arrangement envisaged would not have been commercially workable for Shah Foods especially since Britannia has a weak position in the breads markets that we could have served.

Shah Foods explored the possibility of contract manufacture of biscuits for another leading player in India; however faced with market weakness in the current ongoing economic slowdown the company explained that it would consider such an arrangement at a later date and not immediately.

Consequently with a view to minimizing losses and under advice of labour counsel we announced to the workers/staff by notice about cessation of their service from June 30. Simultaneously it was decided to settle with employees as quickly as possible to avoid hardship to the workers after they had resigned.

With the interest-free support of the promoter group Shah Foods was able to settle with most workers shortly after closure of the plant on June 30 to enable them to move on.

The company is planning to realize liquidity from the machinery line before it deteriorates with the passage of time also the management proposes to sell off the existing land at a rate not less than the jantri rate to raise funds. It is the intention of the management that once the company has discharged its liabilities to workers it should examine other possibilities of business with the assets it has including by monetizing such assets.

3. TRANSFER TO RESERVES

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

4. 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 financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

5. DETAILS OF SUBSIDIARY/ JOINT VENTURES/ ASSOCIATE COMPANIES

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

6. CHANGE IN THE NATURE OF BUSINESS

Your Company continues to operate in the same business segment as that of previous year and there is no change in the nature of the business.

Authorized Share Capital

There has been no change in Authorized Share Capital of Company.

Issued Subscribed and Paid-Up Share Capital

There has been no Change in Issued Subscribed and Paid-Up Share Capital of Company.

8. MANAGEMENT DISCUSSION & ANALYSIS

A report on Management Discussion and Analysis as required in terms of Regulation 34(2) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations 2015 forms part of this report and it deals with the Business Operations and Financial Performance Research & Development Expansion & Diversification Risk Management Marketing Strategy Safety & Environment significant changes in key financial ratios etc. in Annexure-A

9. MEETINGS OF THE BOARD OF DIRECTORS

The gap between two Board meetings did not exceed four months. The schedule of Board/ Committee meetings are communicated in advance to the directors/ committee members to enable them to plan their schedules and to ensure their meaningful participation in the meetings. The Board met six times in financial year details of which are summarized as below:

In addition independent directors met exclusively in the last quarter of the financial year i.e. on 05/02/2019.

10. CORPORATE GOVERNANCE

As provided under Regulation 15(2) of the SEBI (LODR) Regulations 2015 the compliance with Corporate Governance as specified in Regulation 17 to 27 46(2)(b) to (i) & para c d & e of Schedule V are not applicable to the Company as paid up share capital doesn't exceed Rs. 10 Crore and Net Worth doesn't exceeding Rs. 25 Crore as on the last day of previous financial year.

11. DIVIDEND

To conserve resources of the Company your Directors have decided to plough back the profit and hence no Dividend is recommended for the year under review.

12. DEPOSITS

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

13. RISK MANAGEMENT

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

14. LISTING

The Equity shares of the Company are listed at Bombay Stock Exchange. The Company has paid listing fees to the Stock Exchange for the year 2018-19.

15. PERFORMANCE EVALUATION OF BOARD

During the year under report Board of Directors evaluated performance of Committees and all the individual Directors including Independent Directors and concluded by affirming that the Board summarizing as a whole as well as all of its Directors individually and the Committees of the Board continued to good governance and contribute its best in the overall growth of the organization. Independent Directors also held separate meeting to evaluate annual performance of Chairman and executive directors and expressed satisfaction on their performance.

16. INDEPENDENT DIRECTORS MEETING

During the year under review the Independent Directors of the Company met on 05^th February 2019 discussed inter-alia

a. Evaluation of performance of Non-Independent Director and the Board of Directors of the Company as a whole.

b. Evaluation of performance of the Chairman of the Company taking into views of executive and Non-Executive Directors.

c. Evolution of the quality content and timelines of flow of information between the management and the board that is necessary for the board to effectively and reasonably perform its duties.

17. DISCLOSURE REGARDING MAINTENANCE OF COST RECORDS

The Company is not required to maintain cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act 2013.

i. Sad demise of Shri Janak Panalal Shah:

Shri Janak Panalal Shah (DIN : 01880079) has expired as on 02/04/2019.

ii. Retirement by Rotation:

Shri Nirav J. Shah Director (DIN: 01880069) retires by rotation and being eligible offers himself for reappointment. Pursuant to Regulation 17 of the SEBI (LODR) Regulations 2015 details of Director retiring by rotation is provided under explanatory statement of the Notice of the 37^th Annual General Meeting.

iii. Re-appointment of an Independent Directors:

Shri Malav Jashwantlal Shah Director (DIN: 00066829) and Shri Sunil Gautambhai Parikh Director (DIN: 08403488) have been re-appointed as additional Non-Executive Independent Directors with effect from 28/03/2019 pursuant to the provisions of Sections 149 152 and 161 and other applicable provisions if any of the Companies Act 2013 and the rules framed there under read with Schedule IV to the Act as amended from time to time. They meets the criteria for independence as provided in Section 149(6) of the Act read with Regulation 17 of the SEBI (LODR).

iv. Resignation of Directors:

Pursuant to the provisions of section 168 and other applicable provisions if any of the Companies Act 2013 Shri Shrichand Kahar (DIN: 02538221) Shri Hemant Asarpota Morlidhar (DIN: 00364044) have resigned from the Company with effect from 28/03/2019. Shri Sushil P. Shah (DIN: 02529990) has resigned from the Company with effect from 29/06/2019.

v. Appointment of KMP:

Pursuant to provision of section 196 & 203 of the Companies Act 2013 (as amended or re-enacted from time to time) Shri Pradip Ramanlal Shah appointed as CFO and Key Managerial Personnel (KMP) of the Company with effect from 16.04.2019.

19. STATUTORY AUDITORS

M/s. Suresh R. Shah & Associates Chartered Accountants Ahmedabad (Firm Registration No: 110691W) were appointed as a Statutory Auditors of the Company with the approval of members at the 36^th Annual General Meeting to hold office till the conclusion of the 39^th Annual General Meeting. As per the recent amendment issued by Ministry of Corporate Affairs ratification of statutory auditors at every Annual General Meeting is not required and hence your Directors have not proposed the ratification of M/s. Suresh R. Shah & Associates at ensuing Annual General Meeting.

Remuneration to Auditors:

The Statutory Auditor was paid Rs. 70000/- (Rupees Seventy Thousand Only) as Audit fees for the year 2018-19.

20. AUDITORS' REPORT

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

21. SECRETARIAL AUDITOR

M/s. Pinakin Shah & Co. Practicing Company Secretary has been appointed as the Secretarial Auditor of the Company for the financial year 2018-19 as required under Section 204 of the Companies Act 2013 and Rules thereunder. The Secretarial Audit Report for the financial year ended March 31 2019 is annexed herewith marked as Annexure-D to this Report. The Secretarial Audit Report contains certain adverse remarks which are dealt with as under:

Currently the Board has Three Committees:

a. Audit Committee

b. Stakeholders' Relationship Committee

c. Nomination & Remuneration committee.

A detailed note on the Board and its committees composition and compliances as per the applicable provisions of the Act and Rules is provided as under:

A. AUDIT COMMITTEE

All Members of the Audit Committee have accounting and financial management expertise. The Chairman of the Committee attended the 37^th Annual General Meeting held on 28/09/2019 to answer the shareholders` queries. The role of Audit Committee the powers exercised by it pursuant to the terms of reference and the information reviewed by it are in accordance with the requirements as specified in the Regulation 18 of SEBI (LODR) Regulations 2015 Companies Act 2013 and other applicable laws if any. Apart from the above the Audit Committee also exercises the role and powers entrusted upon it by the Board of Directors from time to time.

The Vice-Chairman & Whole-time Director and Statutory Auditors are the invitees to the Audit Committee meetings. During the period under review the Audit Committee met four times on 29/05/2018 06/08/2018 02/11/2018 and 05/02/2019 and was attended by the following members. The Constitution of the Audit Committee for the financial year ended March 31 2019 is given below:

* Shri Hemant Murlidhar Asarpota has resigned w.e.f. 28/03/2019.

* Shri Sunil Gautambhai Parikh was appointed w.e.f. 28/03/2019.

B. NOMINATION AND REMUNERATION COMMITTEE

The roles and responsibilities of the Committee are in accordance with the requirements as specified in the Regulation 19 of SEBI (LODR) Regulations 2015 Companies Act 2013 and other applicable laws if any. Apart from the above the Committee also exercises the role and powers entrusted upon it by the Board of Directors from time to time.

The Constitution of the Nomination and Remuneration Committee for the financial year ended March 31 2019 is given below:

* Shri Hemant Murlidhar Asarpota has resigned w.e.f. 28/03/2019.

* Shri Sunil Gautambhai Parikh was appointed w.e.f. 28/03/2019.

a. The Whole Time Director/ Managing Directors/ Manager/ and/or Directors get salary and perquisites. Remuneration paid for the year ended 31st March 2019 was as under:

*Mr. Janak Shah expired on 02/04/2019.

*Mr. Shrihand Kahar has resigned w.e.f. 28/03/2019.

b. The criteria for making payments to the Whole time Directors are:

Salary as recommended by the Nomination and Remuneration Committee and approved by the Board and the Shareholders of the Company. Perquisites retirement benefits and performance pay are also paid/ provided in accordance with the Company's compensation policies as applicable to all employees and the relevant legal provisions.

Remuneration is determined keeping in view the industry benchmarks.

c. The Non-Executive Directors are not paid sitting fees for attending the meetings of the Board and Committees.

The Company has not paid sitting fees to any director of the Company.

C. STAKEHOLDER RELATIONSHIP COMMITTEE

The terms of reference of the Committee include reviewing and redressing complaints from shareholders such as non-receipt of annual report transfer of shares issue of duplicate share certificates etc.; to oversee and review all matters connected with transfers transmissions dematerialization re-materialization splitting and consolidation of securities; to oversee the performance of the Registrar and Transfer Agent and recommends measures for overall improvement in the quality of investor services; and to perform any other function duty as stipulated by the Companies Act Securities & Exchange Board of India BSE and any other regulatory authority or under any applicable laws as amended from time to time.

Committee met four times during FY 2018-19 i.e. 29/05/2018 06/08/2018 02/11/2018 and 05/02/2019. The Composition of the Stakeholders Relationship Committee and details of Members participation at the Meetings of the Committee are as under:

*Mr. Janak Shah expired on 02/04/2019.

*Shri Sunil Gautambhai Parikh was appointed w.e.f. 28/03/2019.

In addition Details of Shareholders' Complaints received during the year are as follows:

Share transfer committee

The Stakeholder relationship committee has delegated power of approving transfer of securities to Shri Janak Shah* and Shri Virendra Shah. The Committee inter alia reviews and approves the transfer/ transmission/ D-mat of equity shares as submitted by M/s. Big Share Services Private Limited. the Registrar & Transfer Agent of the Company. There is no physical transfer during the year.

*Mr. Janak Shah expired on 02/04/2019.

23. 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 hence information is nil.

24. 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 have been followed and that there are no material departures.

II. It has in the selection of the accounting policies consulted the Statutory Auditors and has applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31^st March 2019 and of the profits of the company for that period.

III. It has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities to the best of its knowledge and ability. There are however inherent limitations which should be recognized 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 the company and that such internal financial controls are adequate and were operation efficiently.

VI. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

25. EXTRACT OF ANNUAL RETURN

Extract of Annual Return of the Company is annexed herewith as Annexure C to this Report.

26. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) & 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed herewith as Annexure B to this report.

27. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year the Company has transferred unclaimed dividend of Rs. NIL to the Investor Education and Protection Fund in compliance with provisions of the Companies Act 2013.

28. INSURANCE

All Inventories including Buildings Machinery etc. is adequately insured.

29. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the financial year 2018-19 your Company has not entered into any material related party transaction as per the SEBI Listing Regulations with any of its related parties. Disclosures pursuant to the Accounting Standards on related party transactions have been made in the notes to the Financial Statements. As there were no related party transactions which were not in the ordinary course of the business or not on arm's length basis and also since there was no material related party transaction as stated above disclosure under Section 134(3) (h) in Form AOC-2 of the Companies Act 2013 is not applicable.

30. DECLARATION BY INDEPENDENT DIRECTORS

The Board of Directors of the Company hereby confirms that Independent directors have given the declaration and he meets the criteria of independence as provided under Section 149(6) of the Companies Act 2013.

31. FAMILIARIZATION PROGRAMME

The company has not conducted familiarization programme for independent director.

32. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has established a Vigil Mechanism/ Whistle Blower Policy to deal with instances of fraud and mismanagement if any. The Policy has a systematic mechanism for directors and employees to report concerns about unethical behavior actual or suspected fraud 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 any specific measures to reduce energy cost per unit. However it intends to conserve energy for future generation.

B. Technology absorption

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

34. 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 dividend voting or otherwise.

36. SHARES IN SUSPENSE ACCOUNT

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

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

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

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

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

37. SHARES IN UNCLAIMED SUSPENSE ACCOUNT

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

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

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

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

38. 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 going concern status and company's operation in future.

39. INTERNAL FINANCIAL CONTROLS

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

40. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and no complaint has been received on sexual harassment during the financial year 2018-19.

41. DETAILS OF FRAUDS REPORTED BY THE AUDITORS

During the year under review neither the Statutory Auditor nor the secretarial auditor have reported to the Audit Committee under Section 143(12) of the Companies Act 2013 any instances of fraud committed against the Company by its officers or employees.

42. ACKNOWLEDGEMENT

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