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Annual Report 2011-125

N O T I C ENotice is hereby given that the 19th Annual GeneralMeeting of the Members of DFM FOODS LIMITED willbe held on Wednesday, the 1st day of August, 2012 at10.00 A.M. at Air Force Auditorium, Subroto Park, NewDelhi - 110010 to transact the following business:

ORDINARY BUSINESS1. To consider and adopt the audited Balance Sheet as

at 31st March, 2012, Profit and Loss Account for theyear ended on that date and the Reports of theBoard of Directors and Auditors thereon.

2. To declare dividend.3. To appoint a Director in place of Mr. S.C. Nanda, who

retires by rotation and being eligible, offers himselffor re-appointment.

4. To appoint a Director in place of Mr. R.P. Jain, whoretires by rotation and being eligible, offers himselffor re-appointment.

5. To appoint Auditors who shall hold office from theconclusion of this meeting until the conclusion ofthe next Annual General Meeting of the Companyand to fix their remuneration.M/s A.K. Gangaher & Co., Chartered Accountants(Regn. No. 004588N), the retiring Auditors beingeligible, offers themselves for reappointment.

SPECIAL BUSINESS6. To consider and if thought fit, to pass with or without

modification(s) the following resolution as a SpecialResolution:-“RESOLVED that pursuant to Section 198, 269, 309,310, 311 read with Schedule XIII, Section 316 and allother applicable provisions, if any, of the CompaniesAct, 1956 (including any statutory modification orenactment thereof for the time being in force), theconsent of the Company be and is hereby accordedto the payment of the proposed remuneration toMr. Mohit Jain, Managing Director of the Companyw.e.f. 28th February, 2012 for the remaining tenureof his appointment i.e. till 27th February, 2014 as setout in the draft supplemental agreement placedbefore the meeting and for the purpose ofidentification initialed by the Chairman of themeeting, which is hereby specifically sanctionedwith liberty to the Board of Directors to alter andvary the terms and conditions of the said agreement

in such manner as may be agreed to betweenMr.Mohit Jain and the Board of Directors of theCompany.RESOLVED FURTHER that in accordance with theprovisions of Section 198 (4) read with Schedule XIIIand the notifications issued under that Schedule ofthe Companies Act, 1956, the proposedremuneration and perquisites as set out in the draftsupplemental agreement may be paid as theminimum remuneration to Mr. Mohit Jain, as theManaging Director in the absence or inadequacy ofprofits in any financial year.”

7. To consider and if thought fit, to pass with or withoutmodification(s) the following resolution as a SpecialResolution:-“RESOLVED that pursuant to Section 198, 269, 309,310, 311 read with Schedule XIII and all otherapplicable provisions, if any, of the Companies Act,1956 (including any statutory modification orenactment thereof for the time being in force), theconsent of the Company be and is hereby accordedto the payment of the proposed remuneration toMr. Rohan Jain, Executive Director of the Companyw.e.f. 1st June, 2012 for the remaining tenure of hisappointment i.e. till 31st May, 2014 as set out in thedraft supplemental agreement placed before themeeting and for the purpose of identificationinitialed by the Chairman of the meeting, which ishereby specifically sanctioned with liberty to theBoard of Directors to alter and vary the terms andconditions of the said agreement in such manner asmay be agreed to between Mr. Rohan Jain and theBoard of Directors of the Company.RESOLVED FURTHER that in accordance with theprovisions of Section 198 (4) read with Schedule XIIIand the notifications issued under that Schedule ofthe Companies Act, 1956, the proposedremuneration and perquisites as set out in the draftsupplemental agreement may be paid as theminimum remuneration to Mr. Rohan Jain, as theExecutive Director in the absence or inadequacy ofprofits in any financial year.”

Delhi By order of the BoardDated: 30th May, 2012 For DFM FOODS LIMITED

Registered Office: N.K. Arora8377, Roshanara Road, Delhi-110 007 Secretary

Annual Report 2011-12 6

NOTES1. A MEMBER ENTITLED TO ATTEND AND VOTE AT

THE MEETING IS ENTITLED TO APPOINT A PROXYTO ATTEND AND VOTE INSTEAD OF HIMSELFAND THE PROXY NEED NOT BE A MEMBER OF THECOMPANY. PROXY SHOULD REACH THEREGISTERED OFFICE OF THE COMPANY AT LEAST48 HOURS BEFORE THE TIME OF THE MEETING.

2. The Explanatory Statement pursuant to Section173(2) of the Companies Act, 1956 in respect ofSpecial Business under item nos. 6 and 7 set outabove are annexed hereto.

3. The Register of Members and Share Transfer booksof the Company will remain closed from 16th July,2012 to 1st August, 2012 both days inclusive.

4. Members/ Proxies should bring the Attendance slipduly filled in for attending the meeting.

5. Members are requested to intimate M/s. MCS Ltd.,F-65, 1st Floor, Okhla Industrial Area, Phase-I,New Delhi-110020, Registrar and Transfer Agent ofthe Company, change of address, if any, along withPin Code Numbers for updating the records.

6. The dividend on Equity Shares, if declared at theMeeting, will be credited / dispatched on August 09,2012 to those members whose names shall appearon the Company’s Register of Members on August01, 2012; in respect of the shares held indematerialized form, the dividend will be paid tomembers whose names are furnished by NationalSecurities Depository Limited and CentralDepository Services (India) Limited as beneficialowners as on that date.

7. Shareholders are advised that those who have notencashed their dividend warrant(s) so far for thefinancial year ended 31st March, 2005 onwardsbefore the respective amounts become due fortransfer to the ”Investor Education and ProtectionFund” or any subsequent dividend payment(s) maysend their outdated dividend warrants forrevalidation/ issue of demand draft in lieu thereof.

8. Members holding shares in electronic form may notethat bank particulars registered against theirrespective depository accounts will be used by theCompany for payment of dividend. The Companyor its Registrars and Transfer Agent cannot act onany request received directly from the membersholding shares in electronic form for any change ofbank particulars or bank mandates. Such changes

are to be advised only to the Depository Participantof the members.

9. Members holding shares in electronic form arerequested to intimate immediately any change intheir address or bank mandates to their DepositoryParticipants with whom they are maintaining theirdemat accounts. Members holding shares inphysical form are requested to advise any changein their address immediately to the Company/Registrars and Transfer Agent, M/s. MCS Limited.

10. The securities of the Company are listed on BombayStock Exchange Ltd., Phiroze Jeejeebhoy Towers,Dalal Street, Mumbai-400 001 and the annual listingfee has been paid to it for the financial year2012-13.

11. Reappointment of Directors:At the ensuing Annual General Meeting, Mr. S.C.Nanda and Mr. R.P. Jain retire by rotation and beingeligible offer themselves for reappointment. Theinformation or details pertaining to these Directorsto be provided in terms of clause 49 of the ListingAgreement with the Stock Exchange are furnishedin the Report on Corporate Governance publishedin this Annual Report.The Directors seeking reappointment havefurnished the declaration under the Companies(Disqualification of Directors under Section 274(1)(g) of the Companies Act, 1956) Rules, 2003.Disclosure of relationship between Directors:Mr. R.P. Jain, whose reappointment is beingconsidered, is the father and grandfather ofMr. Mohit Jain, Managing Director and Mr. RohanJain, Executive Director of the Company.

12. Important Communication to MembersThe Ministry of Corporate Affairs has taken a “GreenInitiative in the Corporate Governance” by allowingpaperless compliances by the companies and hasissued circulars stating that service of notice /documents including Annual Report can be sent bye-mail to its members. To support this greeninitiative of the Government in full measure,members who have not registered their e-mailaddresses, so far, are requested to register theire-mail addresses, in respect of electronic holdingswith the Depository through their concernedDepository Participants. Members who hold sharesin physical form are requested to provide necessarydetails to the Company at [email protected]


ANNEXURE TO THE NOTICEEXPLANATORY STATEMENT

[Pursuant to Section 173(2) of the Companies Act, 1956]

ITEM NO. 6

Mr. Mohit Jain was last appointed as Managing Directorfor a period of 5 years w.e.f. 28th February, 2009 with theapproval of the Shareholders of the Company. Furtheras required under Schedule XIII to the Companies Act,1956, the shareholders had approved payment ofremuneration for a period of 3 years from the date ofhis reappointment. The Remuneration Committee (i.e.Board of Directors) in their meeting held on 30th January,2012 have unanimously decided to continue thepayment of the remuneration to Mr. Mohit Jain,Managing Director of the Company for the remainingtenure of his appointment i.e. till 27th February, 2014which is reproduced hereunder:-

I. REMUNERATION

1. Salary : Rs. 1,25,000 per month

2. Commission : 4% (Four percent) of thenet profits of theCompany computed inthe manner laid downin Section 309 (5) of theCompanies Act, 1956,after the profits of theCompany areascertained in eachyear.

3. Perquisites :

Category A

a) Payment of expenditure incurred on gas,electricity, water, furnishing and servantsat residence and office of the ManagingDirector.

b) Reimbursement of medical expensesactually incurred in India or abroad(inclusive of air fare, boarding/lodging forthe patient and the attendant) for self andfamily.

c) Furniture allowance as per rules of theCompany.

d) Leave travel allowance for self and familyas per rules of the Company.

e) Subscription fees of clubs subject to amaximum of two clubs excludingadmission and life membership fees.

f ) Personal Accident Insurance as per rulesof the Company.

g) Helper allowance as per rules of theCompany.

Category B

a) Company’s contribution towardsProvident Fund as per rules of theCompany.

b) Gratuity as per rules of the Company.

c) Company’s contribution towardssuperannuation fund or annuity fund asper rules of the Company.

Category C

a) Free use of car and driver, both for officialand personal purposes.

b) Free telephone facility at residence.However long distance personal calls to bebilled by the Company.

c) Encashment of earned/ privilege leave onfull pay and allowance as per rules of theCompany at the end of tenure.

d) Reimbursement of entertainment and allother expenses incurred for the purposeof the Company’s business.

e) The Managing Director shall not be paidany sitting fees for attending the meetingsof the Board of Directors or Committeesthereof.

Minimum remuneration

The Managing Director shall be paid theaforesaid remuneration and perquisites asminimum remuneration even in the event ofabsence or inadequacy of profits in any yearduring his remaining tenure, subject howeverto the compliance of Schedule XIII of theCompanies Act, 1956 in this regard.


The total remuneration drawn from theCompany including perquisites shall notexceed in aggregate 5% of the net profits ofthe Company computed in the manner laiddown in Section 309 (5) of the Companies Act,1956. For the purposes of this computation,the perquisites shall be valued on the basis laiddown under the rules framed under theIncome Tax Act.

Further, the remuneration drawn by Mr. MohitJain from the Company and from The DelhiFlour Mills Co. Ltd., of which he is the Jt.Managing Director, put together shall notexceed the higher of the maximum limitadmissible from any one of the Companies.

II. In the event of termination of the appointment ofthe Managing Director by the Company he shall beentitled to receive compensation in accordance withthe provisions of Section 318 of the Companies Act,1956.

In compliance with the provisions of Section 198,269, 309, 310, 311 read with Schedule XIII and allother applicable provisions, if any, of the CompaniesAct, 1956, the payment of the remuneration to theManaging Director as set out above is now beingplaced before the members for their approval.

The draft supplemental agreement based on theterms with respect to the continuance of paymentof the aforesaid remuneration as approved by theBoard, between the Company and Mr. Mohit Jain isavailable for inspection by the members of theCompany at its registered office between 11.00 A.M.to 1.00 P.M. on any working day of the Company.

Besides Mr. Mohit Jain, Mr. R. P. Jain, Chairman andMr. Rohan Jain, Executive Director being father andson of Mr. Mohit Jain are concerned or interested inthis resolution.

The contents of Item no. 6 of the notice and therelevant Explanatory Statement may be treated asabstract of terms and the Memorandum of concernor interest under Section 302 of the Companies Act,1956. Further a statement containing theinformation required to be given to the shareholdersof the Company in this regard under Part IISection II paragraph 1(B) of Schedule XIII to theCompanies Act, 1956 is annexed hereto.

ITEM NO. 7

Mr. Rohan Jain was last appointed as the ExecutiveDirector for a period of 5 years w.e.f. 1st June, 2009 withthe approval of the Shareholders of the Company.Further, as required under Schedule XIII to theCompanies Act, 1956, the shareholders had approvedpayment of remuneration for a period of 3 years fromthe date of his appointment. The RemunerationCommittee (i.e. Board of Directors) in their meeting heldon 30th May, 2012 have unanimously decided tocontinue the payment of the remuneration to Mr. RohanJain, Executive Director of the Company for theremaining tenure of his appointment i.e. till 31st May,2014, which is reproduced hereunder:-

I. REMUNERATION

1. Salary : Rs. 2,20,000 per month

2. Commission : 4% (Four percent) of thenet profits of theCompany computed inthe manner laid downin Section 309 (5) of theCompanies Act, 1956,after the profits of theCompany areascertained in eachyear.

3. Perquisites :

Category A

a) Payment of expenditure incurred on gas,electricity, water, furnishing and servantsat residence and office of the ExecutiveDirector.

b) Reimbursement of medical expensesactually incurred in India or abroad(inclusive of air fare, boarding/lodging forthe patient and the attendant) for self andfamily.

c) Furniture allowance as per rules of theCompany.

d) Leave travel allowance for self and familyas per rules of the Company.

e) Subscription fees of clubs subject to amaximum of two clubs excludingadmission and life membership fees.


f ) Personal Accident Insurance as per rulesof the Company.

g) Helper allowance as per rules of theCompany.

Category B

a) Company’s contribution towardsProvident Fund as per rules of theCompany.

b) Gratuity as per rules of the Company.

c) Company’s contribution towardssuperannuation fund or annuity fund asper rules of the Company.

Category C

a) Free use of car and driver, both for officialand personal purposes.

b) Free telephone facility at residence.However long distance personal calls to bebilled by the Company.

c) Encashment of earned/ privilege leave onfull pay and allowance as per rules of theCompany at the end of tenure.

d) Reimbursement of entertainment and allother expenses incurred for the purposeof the Company’s business.

e) The Executive Director shall not be paidany sitting fees for attending the meetingsof the Board of Directors or Committeesthereof.

Minimum remuneration

The Executive Director shall be paid theaforesaid remuneration and perquisites asminimum remuneration even in the event ofabsence or inadequacy of profits in any yearduring his remaining tenure, subject howeverto the compliance of Schedule XIII of theCompanies Act, 1956 in this regard.

The total remuneration drawn from theCompany including perquisites shall notexceed in aggregate 5% of the net profits ofthe Company computed in the manner laid

down in Section 309 (5) of the Companies Act,1956. For the purposes of this computation,the perquisites shall be valued on the basis laiddown under the rules framed under theIncome Tax Act.

II In the event of termination of the appointment ofthe Executive Director by the Company he shall beentitled to receive compensation in accordance withthe provisions of Section 318 of the Companies Act,1956.

In compliance with the provisions of Section 198,269, 309, 310, 311 read with Schedule XIII and allother applicable provisions, if any, of the CompaniesAct, 1956, the payment of the remuneration to theExecutive Director as set out above is now beingplaced before the members for their approval.

The draft supplemental agreement based on theterms with respect to the continuance of paymentof the aforesaid remuneration as approved by theBoard, between the Company and Mr. Rohan Jain isavailable for inspection by the members of theCompany at its Registered office between 11.00 A.M.to 1.00 P.M. on any working day of the Company.

Besides Mr. Rohan Jain, Mr. R. P. Jain, Chairman andMr. Mohit Jain, Managing Director being grandfatherand father of Mr. Rohan Jain are concerned orinterested in this resolution.

The contents of Item no. 7 of the notice and therelevant Explanatory Statement may be treated asabstract of terms and the Memorandum of concernor interest under Section 302 of the Companies Act,1956. Further a statement containing theinformation required to be given to the shareholdersof the Company in this regard under Part IISection II paragraph 1(B) of Schedule XIII to theCompanies Act, 1956 is annexed hereto.

Delhi By order of the BoardDated: 30th May, 2012 For DFM FOODS LIMITED

Registered Office: N.K. Arora8377, Roshanara Road, Delhi-110 007 Secretary


ANNEXURE TO THE EXPLANATORY STATEMENT[Refer Item No 6 and 7]

Statement required under Part II Section II paragraph 1(B) of Schedule XIII to the Companies Act, 1956 forItem No. 6 and 7 of the Notice of A.G.M.

I. General Information

1. Nature of industry : Manufacturing

2. Date or expected date of commencement of : Since 1994commercial production

3. In case of new companies, expected date of : N.A.commencement of activities as per projectapproved by financial institutions appearingin the prospectus

4. Financial performance(Rs. in lacs)

(Year ended)31/03/09 31/03/10 31/03/11

Sales 7650.98 7218.99 11984.05Profit before Interest, Financialexpenses & Depreciation 585.61 863.76 1613.06Interest & Financial expenses 227.01 132.32 200.74Depreciation 49.89 96.66 140.68Profit before Tax 308.71 634.78 1271.64Profit after Tax 199.86 421.09 832.35Equity Capital 997.17 997.17 1000.17Reserve & Surplus 397.63 644.30 1270.53

5. Export performance and net foreign exchange collaborations : NIL

6. Foreign investments or collaborations, if any : NIL

II. Information about the appointee

A) Mr. Mohit Jain

Background details, job profile and his suitability

Mr. Mohit Jain has been the Managing Director of the Company since 28th February, 1994.

Mr. Mohit Jain joined the promoter company The Delhi Flour Mills Co. Ltd. after completing his B.A. inEconomics Honours from St. Stephens College, Delhi University. He has been involved in the flour millingbusiness since then. He was instrumental in establishing the snack food business for the promotercompany in 1984. He has acquired intimate knowledge of the industry and currently manages the day today operations of the Company.


Past remuneration

Salary : Rs.1,00,000/- per month

Perquisites : Same as mentioned in the item no. 6 of the Explanatory statement attached to the noticeof A.G.M.

Remuneration proposed

Salary : Rs.1,25,000/- per month

Perquisites : Same as previous

Comparative remuneration profile with respect to industry, size of the Company, profile of theposition and person

Information on comparative remuneration profile of a company of similar size and nature of business isnot available.

Pecuniary relationship with the Company and relationship with the managerial personnel

- Shareholding in the Company is 39,500 shares i.e. 0.39% of the paid up capital.

- Mr. Mohit Jain is son of Mr. R. P. Jain, Chairman and father of Mr. Rohan Jain, Executive Director of theCompany.

B) Mr. Rohan Jain

Background details, job profile and his suitability

Mr. Rohan Jain has been the Executive Director of the Company since 1st June, 2009.

Mr. Rohan Jain has graduated with B.Sc. in Economics with concentration in Finance from the renownedWharton School, University of Pennsylvania, U.S.A. in May, 2005. After completing his studies, he hadjoined the promoter company The Delhi Flour Mills Co. Ltd. as Executive Asstt. to the Jt. Managing Directorto assist him in the management of overall affairs of the Company. Further he had been providingassistance in managing the sales and marketing affairs of the snack food business of the Company since2005. He has developed the necessary experience and expertise in this area and has played a major rolein the growth and development of this business.

Past remuneration

Salary : Rs. 1,70,000 per month

Perquisites : Same as mentioned in the item no. 7 of the Explanatory Statement attached to the noticeof A.G.M.

Remuneration proposed

Salary : Rs. 2,20,000/- per month

Perquisites : Same as previous

Comparative remuneration profile with respect to industry, size of the Company, profile of theposition and person

Information on comparative remuneration profile of a company of similar size and nature of business isnot available.


Pecuniary relationship with the Company and relationship with the managerial personnel

- Shareholding in the Company is 19, 200 shares i.e. 0.19% of the paid up capital.

- Mr. Rohan Jain is grandson of Mr. R. P. Jain, Chairman and son of Mr. Mohit Jain, Managing Director ofthe Company.

III. Other information

Reason of loss / inadequate profits

Not applicable

Steps taken / proposed to be taken for improvement

Not applicable

Expected increase in productivity and profits in measurable terms

Not applicable

IV. Disclosures

The details of the remuneration package for Mr. Mohit Jain and Mr. Rohan Jain are as mentioned in the itemno.6 and 7 of the Explanatory Statement annexed to the notice of A.G.M.


M A N A G E M E N T ’ S D I S C U S S I O N & A N A L Y S I S

1. The core business of your company is themanufacture and marketing of snack foods.

2. Economic scenario

Overall economic growth slowed down during theyear as the Reserve Bank of India and theGovernment took measures to contain inflation.Market reports seemed to suggest that theslowdown was more apparent in the second half ofthe financial year.

3. Financial highlights

Despite the manufacturing capacity constraints tillNovember 2011, the business continued to growstrongly during the year.

Revenue from operations increased from Rs.119.98crores to Rs. 169.42 crores and Profit after taximproved from Rs. 8.34 crores to Rs. 10.36 crores.

Manufacturing margins were maintained butoperating costs increased. There was a substantialincrease in employees expenses during the year. Thiswas primarily on account of:

• commencement of sales and distribution inthe west zone of the country

• employment of personnel for the newmanufacturing facility and

• additional recruitment in virtually all areas ofoperations

Furthermore, the financial costs and depreciationexpense also increased substantially on account ofthe capital investment in the new facility.

The total commitment made for the newmanufacturing facility at Greater Noida, U.P. isRs. 75.45 crores of which Rs. 66.00 crores has beenincurred during the year.

4. Developments during the year

The new manufacturing facility was commissionedin November 2011. The project with a capital outlayof Rs. 75.45 crores has a capacity to manufactureabout 10,000 MT of snack foods per annum.

Furthermore, the infrastructure for furtherexpansion has also been created, such that the next

phase of capacity expansion can be executed innominal time and with marginal costs.

Sales and distribution of our products was extendedto the west zone of the country. A start has beenmade in the principal markets of Maharashtra,Gujarat, MP and Chhattisgarh and further extensioninto these states will be undertaken during thecurrent year. Efforts are also being made tocommence operations in the east zone during thecurrent year. Intensification of distribution in theexisting markets also continued.

Key initiatives such as institutionalization andstandardization of management processes, systemsand procedures were undertaken during the year.This will enable the organization to handle largerbusiness volumes efficiently.

During the year competition increased within theindustry from both the organized and unorganizedsector. However, this should not be a major sourceof worry as the demand for our products is growingsteadily as is the overall snack food market.

5. Outlook

The continued growth of the economy, risingincome levels and increased urbanization willcontinue to provide immense potential for thehealthy growth of the processed food industry.

Our continued focus on intensification of existingmarkets, expanding to new markets andstrengthening, improving and expanding ourbrands/product portfolio should hold the companyin good stead.

However, the increase in the cost of raw materialsand the current slowdown of the economy couldbe a source of concern.

6. Internal controls and their adequacy

The Company has proper and adequate internalcontrol systems to ensure that all the assets aresafeguarded and that all transactions are authorized,recorded and reported correctly. Regular internalaudits and checks are carried out to ensure that theresponsibilities are executed effectively and that thesystems are adequate. Management continuously


reviews the internal control systems and proceduresto ensure the efficient conduct of business. An AuditCommittee of the Board oversees the internalcontrols within the organization.

7. Human resources

Our employees form the backbone of ourorganization. Your company takes pride in thecommitment, competence and dedication shown byits employees in all areas of operation. Industrialrelations have remained harmonious throughoutthe year.

Your company endeavors to follow best HR practicesacross all areas. These cover recruitment, induction,development and training, and appraisal systemswhich are tied in with defined key result areas.

There has been a substantial addition to theemployee strength during the year. The employeestrength rose from 240 in the previous year to 325as on 31st March, 2012.


D I R E C T O R S ’ R E P O R TDear Shareholders,

Your Directors have pleasure in presenting their report along with the audited accounts of the Company for theyear ended 31st March, 2012.

FINANCIAL RESULTS

The financial results as compared to the previous year are as under:-(Rs. in lacs)

Year ended Year ended31st March, 2012 31st March, 2011

Revenue from operations 16942 11998Profit before interest, financial expenses and depreciation 2277 1629Interest & financial expenses 447 217Depreciation and amortisation 238 141Profit before tax 1592 1271Provision for tax 556 439Net profit for the year 1036 832

Add Surplus brought forward 380 280Available for appropriation 1416 1112

AppropriationsDividend 250 200Tax on proposed dividend 41 32Transfer to General Reserve 1000 500Balance Carried forward 125 380

DIVIDEND

Your Directors recommend the payment of dividend ofRs. 2.50 per equity share of Rs. 10/- each for the currentyear, to those shareholders, whose names would appearon the register of members as on 1st August, 2012.

OPERATIONAL REVIEW

The business continued to perform well during theyear. Revenue from operations increased from Rs. 119.98crores to Rs. 169.42 crores and net profit increased fromRs. 8.32 crores to Rs. 10.36 crores.

Several key initiatives have been undertaken toinstitutionalize management processes which willenable the organization to handle larger businessvolumes efficiently. Efforts are also being continuously

made to further develop, strengthen and expandorganizational capacity in all the areas of operations.

The new manufacturing facility established in U.P. wascommissioned in November, 2011. The operations at thenew plant have stabilized and the capacity constraintsto further growth now stand removed.

A detailed business review is included in theManagement’s Discussion and Analysis Report whichforms part of the Annual Report.

NSE LISTING

The Company has applied for the listing of its equityshares on the National Stock Exchange. The same isunder active consideration of the NSE.


CORPORATE GOVERNANCE

The report of the Board of Directors of the Company onCorporate Governance is given as a separate sectiontitled Report on Corporate Governance, which formspart of the Annual Report. The Auditors Report onCorporate Governance compliance is also annexedtherewith.

FIXED DEPOSITS

The total amount of deposits remaining due not havingbeen claimed for repayment as on 31st March, 2012 wasRs. 3.57 lacs in respect of 4 deposits and the same is stillunclaimed.

CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO

The information pursuant to Section 217(1)(e) of theCompanies Act, 1956 read with the Companies(Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988 is enclosed in Annexure 1 to thisreport.

PARTICULARS OF EMPLOYEES

Information as per Section 217(2A) of the CompaniesAct, 1956 read with the Companies (Particulars ofEmployees) Rules, 1975, is attached as Annexure 2 tothis report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act,1956, your Directors confirm that:

• in the preparation of the annual accounts, theapplicable accounting standards have beenfollowed and no material departures have beenmade from the same;

• they have selected such accounting policies andapplied them consistently and made judgments andestimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of theCompany as at 31st March, 2012 and of the profitsfor the year ended on that date;

• they have taken proper and sufficient care for themaintenance of adequate accounting records inaccordance with the provisions of the CompaniesAct, 1956 for safeguarding the assets of theCompany and for preventing and detecting fraudand other irregularities;

• the annual accounts have been prepared on a goingconcern basis.

DIRECTORS

Mr. S.C. Nanda and Mr. R.P. Jain retire by rotation andbeing eligible offer themselves for reappointment.

AUDITORS

The auditors M/s. A.K. Gangaher & Co., who retire, offerthemselves for reappointment.

The Company has received a letter from them to theeffect that their reappointment, if made, would bewithin the prescribed limit under Section 224(1B) of theCompanies Act, 1956 and that they are not disqualifiedfor reappointment within the meaning of Section 226of the said Act.

COST AUDITORS

Pursuant to Section 233B of the Companies Act, 1956and the Companies (Cost Audit Report) Rules, 2011,M/s. Kabra & Associates, Cost Accountants have beenappointed as Cost Auditors to audit the cost accountsof the Company for the financial year 2012-13 subjectto the approval of the Central Government.

ACKNOWLEDGEMENT

The Directors place on record their sincere gratitude forthe assistance received from the banks during the year.They also wish to place on record their appreciation forthe loyal and devoted services rendered by all categoriesof employees.

On behalf of the Board

Place : Delhi R.P. JAINDated : 30th May, 2012 Chairman


A N N E X U R E – 1 T O D I R E C T O R S ’ R E P O R T

PARTICULARS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARDOF DIRECTORS) RULES, 1988

A. Conservation of Energy

(a) Energy conservation measures taken:-

Energy efficient lighting systems have been installed in the new plant.

(b) Additional investments and proposals for reduction of consumption of energy:-

These proposals are generated on an ongoing basis.

(c) Impact of the above measures:-

Reduction in power / fuel consumption and a smoother operation.

(d) Total energy consumption and energy consumption per unit of production:-

As per Form ‘A’ enclosed.

B. Technology absorption

(e) As per Form ‘B’ enclosed.

C. Foreign exchange earnings and outgo

(f ) Activities relating to exports, initiatives taken to increase exports, development of new export marketsfor products and services and exports plan:-

No progress could be made in the export of products.

(g) Total foreign exchange used and earned:- (Rs. in Lacs)

2011-12 2010-11(i) CIF value of import 1846 306(ii) Expenditure in foreign currency 69 53(iii) Foreign exchange earned NIL NIL


FORM ‘A’DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY

SNACK FOODSA. POWER AND FUEL CONSUMPTION 2011-12 2010-111. Electricity

a) Purchased Unit 2179131 1889264Total Amount (Rs.) 11583616 10278922Rate per Unit (Rs.) 5.32 5.44

b) Own Generation(i) Through Diesel Generator

Unit 839045 271055Unit per ltr. of Diesel Oil 3.20 3.35Cost per Unit 12.55 10.20

(ii) Through Steam Turbine / GeneratorUnits - -Units per ltr. of Fuel Oil / Gas - -Cost per Unit - -

2. CoalQty. (Tonnes) - -Total Cost - -Average Rate - -

3. Furnace OilQty. (K. Ltrs.) - -Total Amount - -Average Rate - -

4. Other / Internal GenerationQty. (Kgs.) - -Total Cost (Rs.) - -Rate per Unit (Rs.) - -

B. CONSUMPTION PER UNIT OF PRODUCTIONSNACK FOODS

Units Standards 2011-12 2010-11(if any)

Production MT NA 9328 6565Electricity Units / MT KWH NA 324 329Diesel Units / MT Litres NA 30.19 42.67LPG Units / MT KG NA 3.59 4.24CNG Units / MT SCM NA 3.21 -


FORM ‘B’DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION

Research and Development (R&D)

1. Specific areas in which R&D was carried out by the Company

(i) Developing new products and product improvements

(ii) Optimizing process parameters to improve yield, quality and output

(iii) Standardization of raw material, production methods and finished goods quality

(iv) Mechanization of production systems

(v) Use of Information technology in operations

2. Benefits derived as a result of the above R&D

i) New carton structures for various products were developed

ii) Automated carton closing systems were developed

iii) Heated storage systems for refined oil were developed

iv) Capability of gift insertion systems to handle different kinds of gifts was developed

v) A new flavor variant was developed

vi) Developed an IT application for the sales system

3. Future plan of action

To continue R & D activity in the existing areas

4. Expenditure on R & D

As R & D is a part of the ongoing activity of quality control and manufacturing operations, the expenditure isnot separately allocated and identified

Technology absorption, adaptations and innovations

1. Efforts made

All the above mentioned developments were commercialized and put to use

2. Benefits

Resulted in the following benefits:

i) Lower damages in finished goods handling and transportation

ii) Reduction in manpower deployed and better sealing quality of finished goods cartons

iii) Enabling the use of cheaper oils in the winter season

iv) Enabling the use of a larger variety of gifts to be inserted in the pack thereby reducing costs

v) Higher sales

vi) Generation of accurate and timely MIS resulting in faster decision making / corrective action

3. Particulars of technology imported during the last 5 years

- NIL -


A N N E X U R E – 2 T O D I R E C T O R S ’ R E P O R TStatement of particulars of employees pursuant to the provisions of Section 217(2A) of theCompanies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 and formingpart of the Directors’ Report for the year ended 31st March, 2012

Name Designation/ Qualifi- Experience Remune- Date of Age ParticularsNature of cations (in Yrs) ration Appointment (in yrs) of lastDuties (Rs.) employment

Jain Mohit Managing B.A. (Hons) 36 72,24,638 17/03/1993 56 The Delhi Flour Director Mills Company Ltd.

Jain Rohan Executive B.Sc. in 7 83,22,747 01/06/2009 28 The Delhi FlourDirector Economics Mills Company Ltd.

Notes:

1. Gross remuneration shown above is subject to tax and comprises salary including arrears, perquisites, providentfund & gratuity under LIC scheme in terms of actual expenditure incurred by the Company and commission.

2. The employees have adequate experience to discharge the responsibilities assigned to them.

3. Mr. Mohit Jain and Mr. Rohan Jain are inter-related and also related to Mr. R. P. Jain who is the Chairman of theCompany.

4. The employment of both Mr. Mohit Jain and Mr. Rohan Jain are contractual and the terms of the same havebeen approved by the shareholders.

5. Percentage of equity shares held by Mr. Mohit Jain and Mr. Rohan Jain are 0.39% and 0.19% respectively.


R E P O R T O N C O R P O R A T E G O V E R N A N C E

1. Company’s philosophy on Corporate Governance

Corporate Governance is a set of systems andpractices for the ethical conduct of business of thecompany. It ensures accountability, transparencyand commitment to values to meet its stakeholdersaspirations.

In DFM Foods, we believe that CorporateGovernance is an approach to succeed, maintainsustainable growth and create long-term value.

The Company endeavors to attain the best practicesin Corporate Governance. All major corporatedecisions are taken by the Company’s professionalBoard in conjunction with a competentmanagement team, keeping in view the best interestof all its stakeholders. It is committed to apply thebest management practices, comply with theapplicable legal requirements and adhere to ethicalstandards to improve sustainable development ofall stakeholders. These include:-

Independent Board with defined role andresponsibilities: 3 out of 6 Board members areIndependent Directors. The Audit Committee andRemuneration Committee comprise of onlyindependent directors. The Company hasestablished a framework for the meetings of theBoard and the Committees of the Board. Thisframework seeks to systematise the decision makingprocess at the Board and Committee meetings inan informed and efficient manner.

The Board evaluates strategic direction of theCompany, management policies and theireffectiveness. The agenda for the Board reviewsinclude strategic, annual operating plans and capitalallocation and budgets. It also reviews financial andbusiness reports. All these reviews also provide astrategic roadmap for the future growth of theCompany.

Audits and internal checks and balances: TheAudit Committee of the Company reviews internalcontrols and operating systems and procedures. TheCompany Secretary along with the Chief Financial

Officer ensures that the business of the Company isconducted with all statutory and regulatorycompliances. The Company has also institutionalizeda statutory compliance programme covering allareas of business.

The Company has also wide use of informationtechnology to ensure proper financial reporting andinternal controls for optimal use and safeguard ofassets, accurate and timely compilation of financialstatements and management reports.

Best Corporate Governance practices: OurCompany believes in adopting the best CorporateGovernance practices such as:

• All securities related filings with StockExchanges and SEBI are reviewed everyquarter by the Shareholders and InvestorsGrievance Committee of Directors of theCompany.

• The Company undergoes internal auditconducted by independent auditors.

• The Company also undergoes quarterly andannual secretarial audit conducted by anindependent Company Secretary in whole-time practice.

Stakeholders communication: The Companyrecognizes the importance of dissemination offinancial and other information to all of itsshareholders. To help the process, all relatedinformation is made available on the Company’swebsite www.dfmfoods.com.

Role of the Company Secretary in overallgovernance process: The Company Secretaryensures that all relevant information, details anddocuments are made available to the Directors andSenior Management for effective decision makingat the meetings. The Company Secretary is primarilyresponsible to ensure compliance of applicablestatutory requirements. All the Board members ofthe Company have access to the advice and servicesof the Company Secretary.


2. Board of Directors

Board composition and particulars of Directors

The Board of Directors of the Company has an optimum combination of Executive and Non-executive Directorswho have in depth knowledge of business, in addition to the expertise in their areas of specialization.

The Board consists of 6 Directors of whom 2 are Whole-time Directors.

The composition of the Board is as follows:

Profile of the Board members:

A brief resume of all the Directors, nature of theirexpertise and names of the other Companies inwhich they hold Directorships, Memberships /Chairmanships of Board Committees are providedbelow:

Mr. R.P. Jain is a promoter Director of the Companyand the Chairman & Managing Director of thepromoter Company, The Delhi Flour Mills Co. Ltd. Hehas been associated with the flour milling industryfor over five decades, and is a known authority onthe working of flour milling industry and snack foodbusiness.

He has been the past president of the Roller FlourMillers Federation of India, Delhi Factory OwnersFederation, Snack Food Association of India,Northern Flour Millers Confederation and DelhiRoller Flour Mills Association.

He has been on the Board of DFM Foods Ltd. since17th March, 1993 and is the Chairman of theCompany.

Other Directorships:

Sl. No. Name of the Company Designation1. The Delhi Flour Mills Co. Ltd. Chairman &

ManagingDirector

2. DFM Agro Ltd. Director3. Jain Farms & Industries Director

Pvt. Ltd.4. Ravi Mohit Enterprises Director

Pvt. Ltd.

Membership of Committees:

- NIL -

Disclosure of Relationship:

Mr. R.P. Jain is the father of Mr. Mohit Jain, ManagingDirector, and grandfather of Mr. Rohan Jain, ExecutiveDirector of the Company.

Shareholding:

He holds 11,20,500 shares of the Company as on 31st

March, 2012.

Name of Director Category Directorship in Membership inother Companies specified Committees

Mr. R.P. Jain, Promoter & 4 -Chairman Non-Executive DirectorMr. Mohit Jain, Promoter & 4 -Managing Director Executive DirectorMr. Rohan Jain, Promoter & - -Executive Director Executive DirectorMr. Pradeep Dinodia Non-Executive 9 10

Independent DirectorMr. S.C. Nanda Non-Executive 6 -

Independent DirectorMr. Mohit Satyanand Non-Executive 5 5

Independent Director


Mr. Mohit Jain has been the Managing Director of theCompany since 28th February, 1994.

Mr. Mohit Jain is a promoter Director of the Companyand the Vice Chairman & Jt. Managing Director of thepromoter Company The Delhi Flour Mills Co. Ltd. Hejoined The Delhi Flour Mills Co. Ltd. in 1975 and has beeninvolved in the flour milling industry since then. He hadthe pivotal role in establishing the snack food divisionof the Company in 1984 and has been involved in itsdevelopment since then. He has intimate knowledgeof both the flour milling and snack food industry.


Sl. No. Name of the Company Designation1. The Delhi Flour Mills Co. Ltd. Vice

Chairman &Jt. ManagingDirector

2. DFM Agro Ltd. Director3. Jain Farms & Industries Director

Pvt. Ltd.4. Ravi Mohit Enterprises Director

Pvt. Ltd.


- NIL -


Mr. Mohit Jain is the son of Mr. R.P. Jain, Chairman andfather of Mr. Rohan Jain, Executive Director of theCompany.

Shareholding:

He holds 39,500 shares of the Company as on 31st March,2012.

Mr. Rohan Jain is the Executive Director of DFM FoodsLtd. He graduated with B.Sc. in Economics withconcentration in Finance from the renowned WhartonSchool, University of Pennsylvania, U.S.A. in May, 2005.

After completing his studies, he had joined the promoterCompany The Delhi Flour Mills Co. Ltd. as Executive Asstt.to the Jt. Managing Director to assist him in themanagement of overall affairs of the Company. Furtherhe had been providing assistance in managing the salesand marketing affairs of the snack food business of theCompany since 2005. He has developed the necessaryexperience and expertise in this area and has played a

major role in the growth and development of thisbusiness.

He has been the Executive Director of the Companysince 1st June, 2009.


- NIL -


- NIL -


Mr. Rohan Jain is the son of Mr. Mohit Jain, ManagingDirector, and grandson of Mr. R.P. Jain, Chairman of theCompany.

Shareholding:


Mr. Pradeep Dinodia is a leading Chartered Accountantand taxation expert. He is practicing as a partner of S.R.Dinodia & Co., a Chartered Accountant firm in New Delhi.He has been associated with the Federation of IndianChambers of Commerce & Industry (FICCI), New Delhi,Institute of Chartered Accountants of India andInternational Fiscal Association, India Chapter in variouscapacities.

He has been on the Board of the Company since 8th

March, 1994.


Sl. No. Name of the Company Designation1. Shri Ram Pistons & Rings Ltd. Chairman /

Director2. DCM Shriram Consolidated Director

Ltd.3. Hero Moto Corp Ltd. Director4. Hero Corporate Services Ltd. Director5. Micromatic Grinding Director

Technologies Ltd6. SPR International Auto Director

Exports Ltd.7. Ultima Finvest Ltd. Director8. J.K. Lakshmi Cement Ltd. Director9. Dinodia Capital Director

Advisors Pvt. Ltd.



Sl. Name of the Name of the Desig-No. Company Committee nation1. DCM Shriram Committee of Member

Consolidated Board for paymentLtd. of remuneration

to MDShareholders & ChairmanInvestors GrievanceCommitteeAudit Committee Member

2. Hero Moto Audit Committee ChairmanCorp Ltd. Shareholders & Member

Investors GrievanceCommittee

3. Hero Corporate Audit Committee ChairmanServices Ltd.

4. Shriram Pistons Audit Committee Member& Rings Ltd. Shareholders & Member

Investors GrievanceCommitteeRemuneration MemberCommitteeNominations ChairmanCommittee


Mr. Pradeep Dinodia is not related to any otherDirector(s) of the Company.

Shareholding:


Mr. S.C. Nanda is a renowned Advocate with more than25 years of legal experience. In 1977, he joined Khaitan& Co, a renowned Solicitors Firm in Delhi and during histenure handled the litigation work in the various HighCourts and the Supreme Court. Subsequently he starteddoing more of non-litigation work including drafting ofdocument, deeds, Foreign Collaborations, internationalbusiness transaction, conveyancing etc.

He has vast experience in matters pertaining to realestate and development of hotels, resorts, colonies andcommercial establishments.

He has been on the Board since 8th March, 1994.


Sl. No. Name of the Company Designation1. Samniti Corporate Director

Consultants Pvt. Ltd.2. RAMPgreen Solutions Pvt. Ltd. Director3. Ramp Green Technologies Director

Pvt. Ltd.4. Achilles Retail Ventures Director

Pvt. Ltd.5. The Delhi Flour Mills Co. Ltd. Director6. Tech Geine Services Director

International Pvt. Ltd.


- NIL -


Mr. S.C. Nanda is not related to any other Director(s) ofthe Company.

Shareholding:


Mr. Mohit Satyanand is a management Consultant. Hestarted his career with Hindustan Lever Ltd. in 1977 andserved them as an Area Sales Manager (Foods) till 1981.Then he joined The Delhi Flour Mills Co. Ltd., where hewas instrumental in establishing the present snack foodbusiness of the Company. Subsequently, he set up andran an event management company Team Work FilmsPvt. Ltd. He was a key member of the team responsiblefor the success of UNCLE CHIPS. He is a promoterDirector of Inlingua School of Language, New Delhi, forlanguage training.

He has an extensive knowledge in sales and marketingof consumer goods including the snack food market.

He has been on the Board since 29th January, 2000.


Sl. No. Name of the Company Designation1. Teamwork Films Pvt. Ltd. Chairman2. Magic Mountain Retreat Director

Pvt. Ltd.3. Amrit Learning Ltd. Director4. Amrit Corp. Ltd. Director5. Amrit Banaspati Company Ltd. Director



Sl. Name of the Name of the Desig-No. Company Committee nation1. Amrit Corp. Ltd. Shareholders & Member

Investors GrievanceCommitteeAudit Committee Member

2. Amrit Banaspati Audit Committee MemberCo. Ltd. Remuneration Member

CommitteeLoan & Banking MemberCommittee


Mr. Mohit Satyanand is not related to any otherDirector(s) of the Company.

Shareholding:


3. Board / Committee Meetings and Procedures

The Board of Directors is the apex body constitutedby the shareholders for overseeing the overallfunctioning of the Company. The Board provides andevaluates the strategic directions of the Company,management policies and their effectiveness andensures that the long-term interests of theshareholders are being served. The ManagingDirector is assisted by the Executive Director andsenior managerial personnel in overseeing theaffairs of the Company.

The Board meets atleast once in a quarter to reviewthe quarterly results and other items of the agenda.

The Board is given presentations covering finance,sales, marketing, operations including businessopportunities / strategy and corporate affairs of theCompany.

The information regularly provided to the Boardincludes:

• Annual operating plans and budgets includingcapital budgets and any updates.

• Quarterly results of the Company.

• Significant changes in accounting policies andinternal controls.

• Minutes of meetings of Audit Committee,Banking and Finance Committee andShareholders & Investors GrievanceCommittee of the Board.

• The information on recruitment andremuneration of senior managementpersonnel.

• Show cause, demand, prosecution notices andpenalty notices which are materiallyimportant.

• Fatal or serious accidents, dangerousoccurrences, any material effluent or pollutionproblems.

• Any material default in the financialobligations to and by the Company, orsubstantial non-payment for goods sold by theCompany.

• Any issue, which involves possible public orproduct liability claims of substantial nature,including any judgment or order which, mayhave passed strictures on the conduct of theCompany or taken an adverse view regardinganother enterprise that can have negativeimplications on the Company.

• Any significant development in HumanResources / Industrial Relations front.

• Sale of material nature of investments, assets,which is not in normal course of business.

• Non-compliance of any regulatory, statutorynature or listing requirements andshareholders service such as non payment ofdividend, delay in share transfer etc.

• Statutory compliance report of all lawsapplicable to the Company, as well as stepstaken by the Company to rectify instances ofnon-compliances, if any.

• Details of the transactions with the relatedparties.

• Making of loans and investment of surplusfunds.

• General notices of interest of directors.

• Brief on statutory developments, changes ingovernment policies, etc. with impact thereof.


Board material distributed in advance

The agenda for each board meeting is circulated inadvance to the Board members. All materialinformation is incorporated in the agendafacilitating meaningful and focused discussions atthe meeting.

Post meeting follow-up mechanism

The important decisions taken at the Board/Committee(s) meetings are promptlycommunicated to the concerned departments.Action taken report on the decisions of the previousmeeting(s) is placed at the immediately succeedingmeeting of the Board/ Committee(s) for informationand review by the Board/ Committee(s).

4. Number of Board Meetings held, the dates onwhich held and attendance thereat

4 Board meetings were held during the year2011-12 on 21st May, 2011, 3rd August, 2011,14th November, 2011 and 30th January, 2012.

Attendance details of each Director at the Boardmeetings and the last A.G.M.:-

Name of Director No. of Board Attendancemeetings at the lastattended A.G.M.

Mr. R.P. Jain 4 NoMr. Mohit Jain 4 YesMr. Rohan Jain 4 YesMr. Pradeep Dinodia 4 YesMr. S.C. Nanda 4 YesMr. Mohit Satyanand 4 Yes

5. Re-appointment of Directors

Mr. S. C. Nanda and Mr. R. P. Jain shall retire byrotation at the ensuing Annual General Meeting andbeing eligible offer themselves for re-appointment.

The details and profile of the aforesaid directorsseeking reappointment are furnished above in thisreport.

6. Board Committees

Standing Committees

Details of the Standing Committees of the Board andother related information are provided hereunder:

(i) Audit Committee

Composition: The Audit Committee of the Boardcomprises three independent directors namelyMr. Pradeep Dinodia (Chairman), Mr. S. C. Nanda andMr. Mohit Satyanand.

Terms of Reference: The terms of reference of thisCommittee cover the matters specified for it underthe Clause 49 of the Listing Agreement with StockExchanges and Section 292A of the Companies Act,1956.

A. Powers of the Audit Committee

1. To investigate any activity/matter within itsterms of reference.

2. To have full access to information containedin the records of the Company.

3. To obtain external professional advice, ifnecessary.

B. Role of the Audit Committee

1. Overseeing of the company’s financialreporting process and the disclosure of itsfinancial information to ensure that thefinancial statement is correct, sufficient andcredible.

2. Recommending the appointment andremoval of Statutory Auditors including CostAuditors and Internal Auditors, fixation of auditfee and also approval for payment for anyother services.

3. Reviewing with management the quarterly /annual financial statements before submissionto the Board, focusing primarily on:

• Any changes in accounting policies andpractices.

• Qualifications in draft audit report.

• Significant adjustments arising out ofaudit.

• The going concern assumption.

• Compliance with accounting standards.

4. To discuss with the Auditors periodically aboutinternal control systems, the scope of auditincluding the observations of the Auditors.

5. To provide any clarification on matters relatingto audit at the annual general meetings.


Meetings and attendance thereat

4 meetings of the Audit Committee were heldduring the year 2011-12 on 21st May, 2011,3rd August, 2011, 14th November, 2011 and30th January, 2012.

Attendance details

Name of Director No. ofmeetings attended

Mr. Pradeep Dinodia 4Mr. S. C. Nanda 4Mr. Mohit Satyanand 4

The Chairman of the Audit Committee was presentat the last Annual General Meeting.

(ii) Banking & Finance Committee

Composition: The Banking & Finance Committee ofthe Board comprises of Mr. R.P. Jain (Chairman) andMr. Mohit Jain.Terms of Reference:1. Review and approve banking arrangements

and cash managements.2. Borrow monies by way of loan(s) for the

purpose of capital expenditure, generalcorporate purposes including working capitalrequirements within the limits approved bythe Board.

3. Invest funds of the Company in short termdeposits / otherwise within the limitsapproved by the Board.

4. Delegate authorities to the authorized personsto implement the decisions of the Committee.

Meetings and attendance thereat4 meetings of the Banking & Finance Committeewere held during the year 2011-12 on 9th April, 2011,23rd July, 2011, 28th October, 2011 and 24th January,2012.

Attendance details

Name of the No. ofCommittee Member meetings attendedMr. R.P. Jain 4Mr. Mohit Jain 4

(iii) Remuneration CommitteeComposition: The Remuneration Committee of theBoard comprises three independent directors

namely Mr. Pradeep Dinodia, Mr. S. C. Nanda andMr. Mohit Satyanand.Terms of Reference: The Remuneration Committeehas been constituted to recommend/reviewremuneration of the Managing Director and Whole-time Directors.Details of remuneration and other terms ofappointment of Directors:Non Executive Directors are being paid sitting feeonly within the limits prescribed under theCompanies Act, 1956.Details of remuneration paid to the Directorsduring the year 2011-12:

Salary, Sitting feeallowances for attending

& Board/perquisites Committee

(Rs.) meetings(Rs.)

Whole TimeDirectorsMr. Mohit Jain 72,24,638 -Mr. Rohan Jain 83,22,747 -Non-ExecutiveDirectorsMr. R.P. Jain - 2,40,000/-Mr. Pradeep Dinodia - 1,60,000/-Mr. S. C. Nanda - 1,60,000/-Mr. Mohit Satyanand - 1,60,000/-

Note:-a) The service contract with the Managing Director and

Executive Director, who are the Whole TimeDirectors, are for a period of 5 years.

b) The Company does not have any Stock optionscheme.

(iv) Shareholders & Investors Grievance CommitteeComposition: The Shareholders & InvestorsGrievance Committee comprises of Mr. R.P. Jain(Chairman) and Mr. Mohit Jain. Mr. Arjun Sahu, Asstt.Secretary has been nominated as ComplianceOfficer.Terms of Reference: The terms of reference of thisCommittee includes redressal of the shareholders/Investors complaints in respect of any matter.The Committee also monitors the implementationsand compliances of the Company’s Code of Conduct


for prevention of Insider Trading in pursuance of SEBI(Prohibition of Insider Trading) Regulations, 1992.Meetings and attendance thereat4 meetings of the Shareholders & InvestorsGrievance Committee were held during the year2011-12 on 14th April, 2011, 23rd July, 2011,28th October, 2011 and 24th January, 2012.Attendance details

Name of the No. ofCommittee Member meetings attendedMr. R.P. Jain 4Mr. Mohit Jain 4Investor Grievance Redressal: During the year2011-12, the Company had received two complaintsfrom investors, which were disposed offsatisfactorily. No request for share transfers receivedduring the year was pending beyond the normalservice time of a fortnight from the date of receiptof duly completed documents required to effect thetransfer.Procedure at Committee MeetingsThe guidelines relating to Board meetings areapplicable to Committee meetings as far as may bepracticable. Each Committee has the authority toengage outside experts, advisors and counsels tothe extent it considers appropriate to assist in itswork. Minutes of the proceedings of the Committeemeetings are placed before the Board meetings forperusal and noting.

7. Management CommitteeThe Company has set up a Management Committeecomprising of all functional heads for periodic

review of the operations of the Company for betteroperational control.Generally, this Committee meets every month toreview finance, sales, marketing and strategic issues.The highlights of the decisions taken by thisCommittee and also issues arising out of thedeliberations by it are presented to the Board.

8. Code of ConductThe Board of Directors has adopted the Code ofConduct for Board Members and SeniorManagement team. The said code has also beendisplayed on the Company’s website:www.dfmfoods.com.All Board members and senior managementpersonnel have confirmed compliance with theCode for the year 2011-12. A declaration to this effectsigned by the Managing Director of the Company isprovided elsewhere in the Annual Report.

9. Insider TradingCode of Internal Procedure and ConductPursuant to requirement of SEBI (Prohibition ofInsider Trading) Regulations, 1992, the Company hasadopted a ‘Code of Internal Procedure & Conduct’for prevention of insider trading. The code isapplicable to all Directors and such designatedemployees who are expected to have access tounpublished price sensitive informations relating tothe Company.

10. General Body MeetingsThe date, time and venue of the General Meetingsheld during the preceding 3 years and the SpecialResolution(s) passed thereat are as follows:

A. Annual General Meeting:

Date of A.G.M. Time Venue Special Resolution30th July, 2009 10.00 A.M. Airforce Auditorium, - Reappointment of Mr. Mohit Jain as Managing Director

Subroto Park, - Appointment of Mr. Rohan Jain as Executive DirectorNew Delhi -110010 - Keeping the Register / Index of Members and Annual

Returns together with the copies of certificates anddocuments required to be annexed thereto at the officeof the Registrar and Share Transfer Agent.

- Investments in shares of any body or bodies corporatein excess of the prescribed limits.

30th July, 2010 10.00 A.M. -Do- NIL3rd August, 2011 10.00 A.M. -Do- NIL


B. Extra Ordinary General Meeting:

There was no Extra Ordinary General Meeting held during the financial year 2011-12.

C. Postal Ballot

During the year ended 31st March, 2012, no special resolution has been put through postal ballot. Further,none of the businesses proposed to be transacted in the ensuing Annual General Meeting require passing aSpecial Resolution through Postal Ballot.

11. Disclosure

- Disclosure on materially significant related None of the transactions with any of the related partiesparty transactions that may have potential were in conflict with the interest of the Company.conflict with the interest of Company at large. Attention of the members is drawn to the disclosure of

transactions with the related parties set out in Note 36to the Accounts.All related party transactions are negotiated on arm’slength basis.

- Details of non-compliance by the Company, There has been no instance of non-compliance by thePenalties, strictures imposed on the Company on any matter related to capital marketsCompany by Stock Exchange or SEBI or any during the last 3 years.statutory authority, on any matter relatedto capital markets, during the last threeyears.

12. Means of Communication

(a) Quarterly Results: Quarterly Results of theCompany are published in ‘Financial Express’and ‘Jansatta’ and are displayed on theCompany’s website www.dfmfoods.com.

(b) News Releases, Presentations, etc.: Officialannouncements and other generalinformation are displayed on the Company’swebsite www.dfmfoods.com. Official MediaReleases are sent to the Stock Exchanges.

(c) Website: The Company’s websitewww.dfmfoods.com contains an exclusivesection on ‘Investors’ which enables them toaccess information such as quarterly / halfyearly / annual financial statements,shareholding patterns and releases indownloadable format as a measure of addedconvenience.

(d) Annual Report: Annual Report containing,inter alia, Audited Annual Accounts, Directors’Report, Auditors’ Report and other importantinformation is circulated to members andothers entitled thereto.

The Management’s Discussion and Analysis(MD&A) Report forms part of the AnnualReport.

The Annual Report of the Company is alsoavailable on the website in a user-friendly anddownloadable form.

(e) Corporate Filing and Dissemination System(CFDS): Pursuant to clause 52 of the ListingAgreement, the Company during the year hasuploaded financial information like annual andquarterly financial statements andshareholding pattern on the CFDS websitewww.corpfiling.co.in.

(f ) SEBI Complaints Redress System (SCORES):The investor complaints are processed in acentralized web based complaints redresssystem. The salient features of this system arecentralized database of all complaints, onlineupload of Action Taken Reports (ATRs) by theconcerned companies and online viewing byinvestors of actions taken on the complaintand its current status.


(g) Designated Exclusive email-id: TheCompany has a designated email-id:[email protected] for investorservicing.

13. General Shareholder Information

Company Registration Details

The Company is registered in the State of Delhi,India. The Corporate Identity Number (CIN) allottedto the Company by the Ministry of Corporate Affairs(MCA) is L15311DL1993PLC052624.

Annual General Meeting

(Day, Date, Time and Venue):

Wednesday, August 01, 2012 at 10.00 a.m.

Airforce Auditorium, Subrato Park,

New Delhi – 110 010

Financial Calendar (tentative)

Financial Year: April 1, 2012 to March 31, 2013

Results for the quarter ending:

June 30, 2012 – 1st August, 2012

September 30, 2012 - Fourth week of October, 2012

December 31, 2012 - Fourth week of January, 2013

March 31, 2013 - Third week of May, 2013

Annual General Meeting - July, 2013

Date of Book Closure

Monday, July 16, 2012 to Wednesday, August 01,2012(both days inclusive).

Dividend Payment

Credit/dispatch on 9th August, 2012 subject to theapproval of shareholders

Listing on Stock Exchanges

BSE Limited (BSE),Phiroze Jeejeebhoy Towers, Dalal Street,Mumbai 400 001Scrip Code: 519588

ISIN - INE456C01012

Payment of Listing Fees: Annual listing fee for theyear 2012-13 (as applicable) has been paid by theCompany to BSE.

Payment of Depository Fees: Annual custody /Issuer fee for the year 2012-13 has been paid by theCompany to NSDL and CDSL.

Market Price data and stock performance in thelast financial year:

BSE Monthly High and LowsMonth High (Rs.) Low (Rs.)April’11 127.35 105.00May’11 149.00 117.00June’11 140.30 118.00July’11 147.00 120.25August’11 208.00 135.50September’11 195.50 167.30October’11 295.85 185.00November’11 255.20 206.25December’11 258.45 199.00January’12 289.00 200.05February’12 275.00 215.15March’12 255.95 203.60

DFM Foods share price BSE Sensex

Stock performance vis-a-vis BSE Sensex

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(Rs.)

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0.00

50.00

100.00

150.00

200.00

250.00

300.00 25000.00

20000.00

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0.00Apr'11 May'11June'11July'11 Aug'11 Sept'11 Oct'11 Nov'11 Dec'11 Jan'12 Feb'12 Mar'12

Registrar and : M/s MCS Ltd.,Transfer Agent F-65, 1st Floor,

Okhla Industrial Area,Phase – I,New Delhi-110020

Share transfer system : All the transfers anddematerialization received areprocessed and approvedevery fortnight.


Distribution of shareholding as on 31st March, 2012

Range (in shares) No. of No. of % toFrom To share- shares total

holder capital0 500 6852 6,59,840 6.60

501 1000 93 77,800 0.781001 2000 47 68,688 0.692001 3000 33 82,923 0.833001 4000 11 41,484 0.414001 5000 10 47,391 0.475001 10000 27 2,12,291 2.12

10001 and above 34 88,11,259 88.10Total 7,107 1,00,01,676 100.00

Shareholding pattern as on 31st March, 2012

Sl. Category No. of %No. shares held1 Shareholding of

Promoter andPromoter Group 69,03,396 69.02

2 Public shareholdingA Institutions(a) Mutual Funds 1,200 0.01

Sub-Total (A) 1,200 0.01B Non-institutions(a) Bodies Corporates 1,06,182 1.06(b) Individuals 29,72,759 29.73(c) NRIs 18,139 0.18

Sub-Total (B) 30,97,080 30.97GRAND TOTAL 1,00,01,676 100.00

Dematerialisation As on 31st March, 2012, 94.36%of shares of the total paid-up equityand liquidity shares of the Company have

been dematerialized by theshareholders.The number of beneficiaries ason 31st March, 2012 is 2263.

Outstanding GDRs/ None issued/ outstandingADRs/warrantsor any convertibleinstruments,conversion dateand likelyimpact on equity

Plant locations The plants of the Company arelocated at:

1. C - 40, Site III,Meerut Road,Industrial Area,Ghaziabad (U.P.)

2. Plot Nos. 49,50,53 & 54,Ecotech - I, Extn,Greater Noida,Distt Gautam Budh Nagar(U.P.)

Address for Shareholders correspondencecorrespondence may be addressed to:-

1. M/s. MCS Ltd.,F-65, 1st FloorOkhla Industrial Area,Phase – INew Delhi-110020

2. The Company SecretaryDFM Foods Ltd.,8377, Roshanara Road,Delhi-110007

Transfer of unclaimed amounts to Investor andEducation Protection Fund

The investors are advised to claim the unencasheddividends lying in the unpaid dividend account ofthe company as indicated in the Notes to the Noticeand the matured deposits before the same becomedue for crediting to the Investor Education andProtection Fund.

14. Compliance Certificate of the Auditors

Certificate from the Auditors of the Company,M/s. A.K. Gangaher & Co., confirming compliancewith the conditions of Corporate Governance asstipulated under Clause 49, is attached to theDirectors’ Report forming part of the Annual Report.


15. Adoption of Mandatory and Non-MandatoryRequirements of Clause 49

The Company has complied with all mandatoryrequirements and has adopted following non-mandatory requirements of Clause 49.

Chairman of the Board

The Chairman of the Board is entitled to maintain aChairman’s office at the Company’s expense and alsoallowed reimbursement of expenses incurred in theperformance of his duties.

Remuneration Committee

Refer 6 (iii) above

Shareholders Rights

The Clause states that half yearly declaration offinancial performance including summary of thesignificant events in the last 6 months, may be sentto each shareholder.

Company’s Quarterly / Half yearly results arepublished in a leading daily English newspaper anda local language newspaper and also displayed onthe Company’s website www.dfmfoods.com as wellas provided to the special websitewww.corpfiling.co.in.

Audit Qualification

The financial statements have not been qualified.

Training of Board Members

The Board members are well aware of the businessmodel as well as the risk profile of the businessparameters of the company and also theirresponsibilities as Directors.

Mechanism for evaluating NEDs

All the non-executive Board members are leadingprofessionals in their respective fields and have beencontributing their best in the performance of thecompany.

Whistle Blower policy

As per the policy of the Company, all the employeeshave a direct and secured access to themanagement as well as the Chairman of the AuditCommittee to report about any unethical behaviour,fraud etc.

16. CEO and CFO Certification

The Managing Director and the Chief FinancialOfficer of the Company give annual certification onfinancial reporting and internal controls to the Boardin terms of Clause 49. They also give quarterlycertification on financial results while placing thefinancial results before the Board in terms of Clause41 of the Listing Agreement.


DECLARATION BY THE MANAGING DIRECTOR

It is hereby declared that all the Board members and senior management personnel have complied with the Codeof Conduct laid down by the Board under clause 49 of the Listing Agreement.

Further, they have affirmed compliance with the said code of conduct as on 31st March, 2012.

Place : Delhi Mohit JainDate : 30th May, 2012 Managing Director

CEO / CFO CERTIFICATION

As required under sub clause V of Clause 49 of the Listing Agreement with the Stock Exchange, we have certifiedto the Board that for the Financial Year ended March 31, 2012, the Company has complied with the requirementsof the said sub-clause.

Place : Delhi Rajiv Bhambri Mohit JainDate : 30th May, 2012 Chief Financial Officer Managing Director

AUDITORS’ CERTIFICATE

To the Members of DFM Foods Ltd.

We have examined the compliance of conditions of Corporate Governance by DFM Foods Limitd for the yearended 31st March, 2012, as stipulated in Clause 49 of the Listing Agreement(s) of the said company with the stockexchanges.

The compliance of conditions of corporate governance is the responsibility of the management. Our examinationwas carried out in accordance with the Guidance Note on Certification of Corporate Governance (as stipulated inClause 49 of the Listing Agreement), issued by the Institute of Chartered Accountants of India and was limited toprocedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditionsof the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of theCompany.

On the basis of our review and according to information and explanations given to us, the conditions of CorporateGovernance as stipulated in Clause 49 of the Listing Agreements with the stock exchanges have been compliedwith in all material respect by the Company.

We further state that such compliance is neither an assurance as to the future viability of the Company nor efficiencyor effectiveness with which the management has conducted the affairs of the Company.

For A.K. Gangaher & Co.Chartered Accountants

A.K. GangaherProprietor

Place : Delhi M. No.083674Date : 30th May, 2012 Firm ICAI Regn. No.004588N


AUDITORS’ REPORT

The Members of DFM FOODS LIMITED

1. We have audited the attached Balance Sheet of DFM Foods Limited as at 31st March, 2012, Statement of Profit and Lossand also the Cash Flow Statement annexed thereto for the year ended on that date. These financial statements are theresponsibility of the company’s management. Our responsibility is to express an opinion on these financial statementsbased on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accounting principles used and significant estimates madeby management, as well as evaluating the overall financial statement presentation. We believe that our audit provides areasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) (Amendment) Order, 2004 issued by the Central Government of India interms of sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks of the books andrecords of the Company as we considered appropriate and according to the information and explanations given to us,we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to above, we report that:

(i) We have obtained all the information and explanations which to the best of our knowledge and belief were necessaryfor the purposes of our audit;

(ii) In our opinion, proper books of account, as required by law, have been kept by the company so far as appears fromour examination of those books;

(iii) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreementwith the books of account;

(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this reportcomply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from the Directors and taken on record by the Board of Directors,we report that none of the Directors is disqualified as on 31st March, 2012 from being appointed as a Director interms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accountsread together with the significant Accounting Policies and other notes thereon give the information required bythe Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

(b) in the case of the Statement of Profit and Loss , of the profit of the Company for the year ended on that date;and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

For A.K.Gangaher & Co.Chartered Accountants

A.K.GangaherProprietor

Place : Delhi M.No.083674Dated : 30th May, 2012 Firm ICAI Regn No. 004588N


ANNEXURE TO THE AUDITORS’ REPORT

(Referred to in paragraph 3 of our report of even date)1. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situationof fixed assets.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phasedperiodical manner, which in our opinion is reasonable having regard to the size of the Company and the nature ofits assets. The discrepancies noticed during the verification have been properly dealt with in the books of accounts.

c. In our opinion and according to the information and explanations given to us, the Company has not disposed off asubstantial part of its fixed assets during the year.

2. In respect of its inventories:a. As explained to us, the inventory has been physically verified at all its locations during the year by the management.

In our opinion, the frequency of verification is reasonable.b. In our opinion and according to the information and explanations given to us, the procedures of physical verification

of inventories followed by the management are reasonable and adequate in relation to the size of the Companyand the nature of its business.

c. On the basis of our examination, we are of the opinion that the Company is maintaining proper records of inventories.The discrepancies noticed on physical verification of stocks as compared to book records have been properly dealtwith in the books of accounts.

3. a) The Company has granted unsecured loans to a company listed in the register maintained under Section 301 ofthe Companies Act, 1956. The maximum amount involved during the year was Rs. 2140.00 lacs (Previous yearRs. 1785.00 lacs) and the year end balance of loan given to such party was Rs. 1325.00 lacs ( Previous year Rs. 550.00lacs).

b) In our opinion, the rate of interest and other terms and conditions of unsecured loans given are prima facie notprejudicial to the interests of the Company.

c) The principal amounts and wherever applicable interest thereon in respect of loans and or advances in the natureof loans given by the Company to parties have been recovered regularly as stipulated.

d) There is no overdue amount of loan to be recovered by the Company.e) The Company has not taken loans from companies, firms or other parties covered in the register maintained under

Section 301 of the Companies Act.4. In our opinion and according to the information and explanations given to us, there are adequate internal control

procedures commensurate with the size of the Company and the nature of its business with regard to purchases ofinventory and fixed assets and also with regard to sale of goods and services. Further on the basis of our examination ofthe books and records of the Company, and according to the information and explanations given to us, we have neithercome across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internalcontrol systems.

5. In our opinion and according to the explanations given to us, all the transactions made in pursuance of contracts orarrangements, that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 havebeen so entered. Further in our opinion and according to the explanations given to us, the transactions made in pursuanceof contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 in respectof each party during the year have been made at prices which are reasonable having regard to the prices at whichtransaction for similar goods, materials and services have been made with other parties.

6. a) The Company had accepted deposits from public and in our opinion and according to the information andexplanations given to us, the Company has complied with the provisions of Sections 58A and 58AA or any otherrelevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 framedthereunder with regard to the deposits accepted from the public.

b) An amount of Rs. 3.57 lac (Previous year Rs. 2.15 lac) is outstanding towards matured unclaimed deposits as on31.03.2012.

c) We are informed that no order has been passed against the company by the Company Law Board or NationalCompany Law Tribunal or Reserve Bank of India or any other Court/ Tribunal.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.8. We have broadly reviewed the books of accounts and records maintained by the Company pursuant to the Companies

(Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the CompaniesAct, 1956 in respect of manufacturing activities and are of the opinion that prima facie the prescribed accounts and


records have been made and maintained. We have, however, not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.

9. a) According to the information and explanations given to us and the records of the Company examined by us, theCompany is regular in depositing with the appropriate authorities undisputed statutory dues including ProvidentFund, Investor Education and Protection Fund, Employees’ State Insurance, Income tax, Sales Tax, Wealth Tax, ServiceTax, Custom Duty, Excise Duty, Cess and other statutory dues applicable to it.

b) According to the information and explanations given to us, no undisputed statutory dues in respect of Income TaxWealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears as on 31.03.2012 for a periodof more than six months from the date they became payable.

c) The details of disputed dues as at 31.03.2012 in respect of Excise Duty, Sales Tax and Income Tax which have notbeen deposited by the Company are as follows:

Name of Nature of dues Amount (Rs.)# Period to which the Forum wherestatute amount relates dispute is pendingSales Tax Entry Tax (Sales Tax) 2,41,384 2004-05 High CourtCentral Excise Excise Duty* 1,23,92,053 2007-08 Customs, Excise and Service TaxLaws 2,86,33,279 2008-09 Appellate Tribunal

1,18,61,341 2009-103,47,59,310 2010-114,63,52,710 2011-12

# The amounts mentioned are as per demand orders including interest and penalty wherever indicated in the order.* The case of Excise duty has been decided in the favor of the Company, but the Department has preferred appeals

at higher levels.10. The Company has no accumulated losses and has not incurred any cash losses during the financial year covered by our

audit or in the immediately preceding financial year.11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment

of dues to any financial institution, bank or debenture holders.12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and

other securities.13. In our opinion and according to information and explanation given to us, the Company is not a chit fund or a nidhi /

mutual benefit fund /society.14. In our opinion and according to the information and explanation given to us, the Company is not dealing in or trading in

shares, securities, debentures and other investments.15. In our opinion and according to the information and explanation given to us, the Company has not given guarantees for

loans taken by others from banks or financial institutions.16. In our opinion and according to information and explanations given to us, the term loans have been applied for the

purpose for which they were raised.17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the

Company, we report that the Company has used funds raised on short-term basis for short-term investments only.18. During the year the Company has not made preferential allotment of shares to parties and companies covered in the

register maintained under Section 301 of the Companies Act, 1956.19. According to the information and explanations given to us, the Company has not issued any debentures during the year.20. During the year the Company has not raised any money through a public issue.21. During the course of our examination of the books and records of the Company carried out in accordance with the

generally accepted auditing practices in India, and according to the information and explanations given to us, no fraudon or by the Company has been noticed or reported during the course of our audit.

For A.K.Gangaher & Co.Chartered Accountants

A.K.GangaherProprietor

Place : Delhi M.No.083674Dated : 30th May, 2012 Firm ICAI Regn No. 004588N


Financial Statements


Balance Sheet as at 31st March, 2012(All Amounts in Rs. Lacs, unless otherwise stated)

Notes 31st March, 2012 31st March, 2011Equity and LiabilitiesShareholders’ FundsShare Capital 3 10,00 10,00Reserves and Surplus 4 20,15 12,70Sub-Total Shareholders Funds 30,15 22,70

Non – Current LiabilitiesLong Term Borrowings 5 47,68 8,81Long Term Provisions 6 53 38Deferred Tax Liability 7 4,74 2,58Sub-Total Non Current Liabilities 52,95 11,77

Current LiabilitiesShort Term Borrowings 8 6,62 4,12Trade Payables 9 8,38 3,13Other Current Liabilities 10 21,21 10,33Short Term Provisions 11 3,95 3,12Sub-Total Current Liabilities 40,16 20,70

Total- Equity and Liabilities 1,23,26 55,17

AssetsNon – Current AssetsFixed AssetsTangible Assets 12 83,12 29,38Intangible Assets 13 2,49 2,43Capital Work-in-Progress 14 2,84 30Non –Current Investments 15 2 2Long Term Loans and Advances 16 68 4,13Other Non- Current Assets 17 4,81 4,56Sub-Total Non - Current Assets 93,96 40,82

Current AssetsCurrent Investments 18 - 48Inventories 19 13,44 4,41Trade Receivables 20 6 -Cash and Bank Balances 21 1,12 2,88Short Term Loans and Advances 22 14,26 6,53Other Current Assets 23 42 5Sub-Total Current Assets 29,30 14,35

Total-Assets 1,23,26 55,17

Note 1 to 41 form an integral part of the Financial Statements.


For A.K.GANGAHER & CO. MOHIT JAIN R. P. JAINChartered Accountants Managing Director Chairman

Place : Delhi A.K. GANGAHER N. K. ARORA RAJIV BHAMBRIDated : 30th May, 2012 Proprietor Secretary Chief Financial Officer

M.No. 083674Firm ICAI Regn No. 004588N


Statement of Profit and Loss for the year ended 31st March, 2012(All Amounts in Rs. Lacs, unless otherwise stated)

Notes 31st March, 2012 31st March, 2011Income

Revenue from Operations 27 1,69,42 1,19,98Other Income 28 2,77 1,40

Total Revenue 1,72,19 1,21,38

Expenses

Cost of Materials Consumed 29 1,10,48 76,24Changes in Inventories of Finished Goods 30 (2,51) 7Employees Benefits Expenses 31 10,96 7,55Finance Cost 32 4,47 2,17Depreciation and Amortization Expense 33 2,38 1,41Other Expenses 34 30,49 21,23

Total Expenses 1,56,27 1,08,67

Profit Before Tax 15,92 12,71

Tax ExpensesCurrent Tax 3,31 4,15Deferred Tax 2,16 29Adjustment of Earlier Year Tax 9 (5)

Total Tax Expenses 5,56 4,39

Profit for the Year from Continuing Operations 10,36 8,32

Profit for the year 10,36 8,32

Earning Per Equity Share 35[Nominal Value Per Share : Rs.10/- (2011: Rs.10/-)]Basic 10.36 8.34Diluted 10.36 8.34

Note 1 to 41 form an integral part of the Financial Statements.


For A.K.GANGAHER & CO. MOHIT JAIN R. P. JAINChartered Accountants Managing Director Chairman




Cash Flow Statement for the year ended 31st March, 2012 (All Amounts in Rs. Lacs, unless otherwise stated)

Year ended31st March, 2012 31st March, 2011

A. Cash Flow from Operating ActivitiesProfit before taxation 15,92 12,71Adjustments for:Depreciation and Amortization Expenses 2,38 1,41Loss on Sale of Tangible Assets (net) 10 20Loss on Sale of Investments - 3Loss on Valuation of Assets - 14Interest Income (2,79) (1,75)Dividend Income (1) (2)Interest Expenditure 4,47 2,17Provision for Commission to Directors 1,04 80Operating Profit before Working Capital Changes (i) 21,11 15,69

Changes in Working Capital:Increase / (Decrease) in Trade Payables 5,25 44Increase / (Decrease) in Provisions 15 27Increase / (Decrease) in Other Current Liabilities 4,72 3,03(Increase) / Decrease in Trade Receivables (6) 3(Increase) / Decrease in Inventories (9,03) (50)(Increase) / Decrease in Loans and Advances (15) (58)(Increase) / Decrease in Other Current Assets (37) -Total Changes in working capital (ii) 51 2,69Cash Generated from Operations (i) + (ii) 21,62 18,38Taxes paid (net of refunds) (3,34) (4,01)Commission paid to Directors (80) (12)Net cash generated from Operating Activities (A) 17,48 14,25

B. Cash Flow from Investing ActivitiesPurchase of Tangible/Intangible Assets (55,36) (14,99)Sale of Intangible Assets 11 9Purchase of Current Investments - (50)Sale of Current Investments 47 -Interest Received 2,82 1,87Dividend Received 1 2Loss on Valuation of Assets - (14)Net Cash from Investing Activities (B) (51,95) (13,65)

C. Cash flow from Financing ActivitiesDividend Paid (2,00) (1,50)Dividend Distribution Tax (32) (25)Interest Paid (4,17) (2,18)Deposits Given (7,75) 10Proceeds of Borrowings 47,21 (17)(Increase )/ Decrease in Non Current Assets (26) (3,49)Net Proceed from Increase in Share Capital - 29Net Cash used in Financing Activities (C) 32,71 (7,20)

Net Increase in Cash and Cash Equivalents (A+B+C) (1,76) (6,60)

Cash and Cash equivalents:At the beginning of the year 2,88 9,48At the end of the year 1,12 2,88Total (1,76) (6,60)Cash & Cash Equivalents comprises of :Cash on Hand 4 6Balances with Banks* 1,08 2,82Total 1,12 2,88* Includes the following balanc’es which are not available for use by the CompanyUnpaid Dividend Account 20 14Deposits with Banks held as lien 70 55

On behalf of the BoardFor A.K.GANGAHER & CO. MOHIT JAIN R. P. JAIN

Chartered Accountants Managing Director Chairman




NOTES TO THE FINANCIAL STATEMENTSNOTE 1

Corporate Information

DFM FOODS LIMITED is engaged in the manufacture and sale of Snack Foods. The Company has manufacturingfacilities in India and sells its products under the brand name “CRAX” & “NATKHAT”. The Company is a public limitedcompany incorporated under the provisions of the Companies Act, 1956. It is listed on the Bombay Stock Exchange(BSE).

NOTE 2

Summary of Significant Accounting Policies

2.1. Basis of Preparation of Financial StatementsThe financial statements have been prepared under historical cost convention in accordance with thegenerally accepted accounting principles and the applicable accounting standards notified under Section211(3C) of the Companies Act,1956 and the Companies (Accounting Standards) Rules, 2006 (as amended).All assets and liabilities have been classified as current or non-current as per the criteria set out in the ScheduleVI to the Companies Act, 1956. The Company has ascertained its operating cycle as 12 months for the purposeof current - non-current classification of assets and liabilities.

2.2. Use of EstimatesThe preparation of financial statements requires estimates and assumptions to be made that affect thereported amount of assets and liabilities on the date of the financial statements and the reported amount ofrevenues and expenses during the reporting period. Difference between the actual results and estimatesare recognized in the period in which the results are known / materialized.

2.3. Tangible AssetsTangible Assets are stated at acquisition cost, net of accumulated depreciation.Subsequent expenditures related to an item of fixed asset are added to its book value only if they increasethe future benefits from the existing asset beyond its previously assessed standard of performance. Lossesarising from the retirement of and gains or losses arising from the disposal of fixed assets are recognized inthe statement of Profit and Loss.Depreciation is provided on a pro-rata basis on the straight line method over the estimated useful lives ofthe assets or the rates prescribed under Schedule XIV of the Companies Act, 1956, whichever is higher andare as follows:

Assets Rates %Building 3.34Plant and Machinery 4.75Furniture and Fixtures 6.33Office Equipment 19.00Vehicles 19.00Computer 23.75Mobile Phones 31.67


2.4. Intangible AssetsIntangible Assets are stated at acquisition cost, net of accumulated amortization and depreciation. Thedepreciation rates used are:

Assets Rates %Trade Mark 0Computer Software 23.75

2.5. Impairment of AssetsThe Company assesses at each Balance Sheet date whether there is any indication that an asset may beimpaired. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. Animpairment loss is charged to the Statement of Profit and Loss in the year in which the asset is identified asimpaired. The impairment loss recognized in prior accounting period is reversed, if there has been a changein the estimate of recoverable amount.

2.6. InvestmentsCurrent investments are carried at lower of cost or quoted / fair value, computed category wise. Long terminvestments are stated at cost. Provision for diminution in the value of long term investments is made onlyif such a decline is other than temporary.

2.7. Cash and Cash EquivalentsCash and cash equivalents for the purposes of Cash Flow Statement comprise cash in hand, demand depositswith banks and other short term highly liquid investments.

2.8. Inventories

Basis of valuation is as under:-1. Raw Material : Valuation is at material cost on FIFO basis2. Stock in Trade : Finished Goods are valued at cost of Raw material and apportioned direct

expenses3. Stores and Spares : Valuation is at cost or market value, whichever is lower

2.9. Revenue RecognitionSale of Goods: Revenue from sales of goods is recognized when all the substantial risks and rewards ofownership of the goods have been passed to the buyer and are recognized net of claims. The Companycollects value added taxes on behalf of the government and these taxes are not economic benefits flowingto the Company and as such these taxes are excluded from revenue.Interest: Interest income is recognized on a time proportion basis taking into account the amountoutstanding and the applicable interest rate. Interest income is included under the head “Other Income” inthe Statement of Profit and Loss.Dividends: Dividend income is recognized when the right to receive dividend is established.

2.10. Borrowing CostsBorrowing costs, which are directly attributable to the acquisition /construction of fixed assets, till the timesuch assets are ready for intended use, are capitalized as a part of the cost of assets. Other borrowing costsare recognized as an expense in the Statement of Profit and Loss.

2.11. Employees BenefitsProvident Fund: Contributions to Provident Fund and Employee State Insurance are being paid andaccounted as per the respective Rules and debited to the Statement of Profit and Loss. Provident Fundcontributions are made to a Trust administered by the promoter company. The Company makes good thedeficiency, if any, in its Provident Fund Trust on a year to year basis.


Gratuity: The Company provides for gratuity under a defined benefit plan for all employees. The GratuityPlan provides a lump sum payment to vested employees at retirement, death, incapacitation or terminationof employment of an amount based on the respective employee’s salary and the tenure of employment.The Company liability is actuarially determined at the end of each year and is recognized in the Statementof Profit and Loss in the year in which it arises.Leave Encashment: Provision for encashment of leave is being made on the basis of actuarial valuationmade at the end of each financial year by an independent actuary and is charged to the Statement of Profitand Loss.

2.12. LeasesLeases in which a significant portion of the risks and rewards of ownership are retained by the Lessor areclassified as operating leases. Payments made under operating leases are charged to the Statement of Profitand Loss.

2.13. Earnings Per ShareBasic earning per share is calculated by dividing the net profit or loss for the period by the weighted averagenumber of equity shares outstanding during the period.For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable toequity shareholders and the weighted average number of shares outstanding during the period is adjustedfor the effects of all dilutive potential equity shares.

2.14. Provision for Current and Deferred TaxProvision for current tax is made after taking into consideration benefits admissible under the provision ofthe Income Tax Act, 1961. Deferred tax resulting from “timing differences” between taxable and accountingincome is accounted for using the tax rates and laws that are enacted as on the balance sheet date. DeferredTax asset is recognized and carried forward only to the extent that there is a virtual certainty that the assetwill be realized in future.

2.15. Foreign Currency Transactions

1. All transaction in foreign currency are recorded on initial recognition at the exchange rate prevailing atthe time of the transaction.

2. Loans in foreign currencies are reported using the closing exchange rate on balance sheet date.

3. In case of forward exchange contracts entered into to hedge foreign currency risks, the exchange ratedifference arising between the contracted rate and the rate on settlement date or reporting date isrecognized as income / expenses for the period.

2.16. Provisions and Contingent LiabilitiesProvisions are recognized when there is present obligation as a result of past events and it is probable thatthere will be an outflow of resources. Provisions are measured at the best estimate of the expenditure requiredto settle the present obligation at the Balance sheet date and are not discounted to its present value.Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existenceof which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future eventsnot wholly within the control of the Company or a present obligation that arises from past events where it iseither not probable that an outflow of resources will be required to settle or a reliable estimate of the amountcan not be made, is termed as a contingent liability.


(All Amounts in Rs. Lacs, unless otherwise stated)

NOTE 3

SHARE CAPITAL

As at

March 31, 2012 March 31, 2011Authorized1,30,00,000 (March 31, 2011: 1,30,00,000 )Equity shares of Rs. 10/- each 13,00 13,0020,00,000 (March 31, 2011: 20,00,000 )10% Cumulative Convertible PreferenceShares of Rs. 10/- each 2,00 2,00Issued, Subscribed and Paid up1,00,01,676 ( March 31, 2011 : 1,00,01,676)Equity Shares of Rs. 10/- each 10,00 10,00

Reconciliation of Number of Shares

As at As atMarch 31, 2012 March 31, 2011

Number of Shares Amount Number of Shares AmountBalance as at the beginning of the year 1,00,01,676 10,00 99,71,676 9,97Addition during the year - - 30,000 3Balance as at the end of the year 1,00,01,676 10,00 1,00,01,676 10,00

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 equityshares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approvalof the shareholders in the ensuing Annual General Meeting.

In the event of liquidation, equity share holders are eligible to receive the remaining assets in proportion to theirshareholding.

Details of shares held by shareholders holding more than 5% of the aggregate shares in the Company

As at As atMarch 31, 2012 March 31, 2011

# of Shares % age # of Shares % ageThe Delhi Flour Mills Co. Ltd. 37,11,676 37% 37,11,676 37%Mrs. Surekha Jain 20,06,120 20% 20,06,120 20%Mr. R P Jain 11,20,500 11% 11,20,500 11%Mr. Man Mohan Singh 9,10,000 9% 9,30,000 9%



NOTE 4

RESERVES AND SURPLUS

As at

March 31, 2012 March 31, 2011General ReserveBalance as at the beginning of the year 8,64 3,64Add : Transferred from Surplus in Statement ofProfit & Loss during the year 10,00 5,00Balance as at the end of the year 18,64 8,64Share Premium AccountBalance as at the beginning of the year 26 -Add : Addition during the year - 26Balance as at the end of the year 26 26

Surplus in Statement of Profit and LossBalance as at the beginning of the year 3,80 2,80Add: Profit for the year 10,36 8,32Less : AppropriationsProposed Dividend on Equity Shares for the year 2,50 2,00Dividend distribution tax on ProposedDividend on Equity Shares 41 32Transferred to General Reserve 10,00 5,00Balance as at the end of the year 1,25 3,80Total 20,15 12,70

NOTE 5

LONG TERM BORROWINGS

As at

March 31, 2012 March 31, 2011Secured Borrowings• Term Loans from Banks 46,04 7,55Sub-Total 46,04 7,55Unsecured Borrowings• Fixed Deposits* 87 1,16• Vehicle Loans ** 77 10Sub-Total 1,64 1,26Total 47,68 8,81

* Out of above deposits, Rs. 80.34 lacs are guaranteed by a Director (March 31, 2011 Rs. 41.80 lacs)** Vehicle Loans are secured by hypothecation of vehicles.


NATURE OF SECURITY AND TERMS OF REPAYMENT FOR BORROWINGS

NATURE OF SECURITY TERMS OF REPAYMENT

i) Term Loan from bank amounting to Rs. 71 lacs Repayable in 20 equal quarterly instalments,

(March 31, 2011 Rs.93 lacs) is secured by equitable with first instalment commencing on

mortgage of the property at XII 8380/1-4A(Part), 07.07.2010.

Flour Mills Road, Roshanara Road, Delhi – 110007. Interest paid on monthly rest @ 12 % p.a.

ii) Term loans from bank amounting to Rs. 684 lacs Repayable in 20 equal quarterly instalments,

(March 31, 2011 Rs. 912 lacs) are secured by: with first instalment commencing on

a) Hypothecation of all tangible assets, present as 30.06.2010.

well as future, located at Plot No. C-40, Interest paid on monthly rest @ 14 % p.a.

Industrial Area, Meerut Road, Ghaziabad (U.P.) and

b) Equitable mortgage of lease hold property No. C-40,

Industrial Area, Meerut Road, Ghaziabad (U.P.).

Amount outstanding include letters of comfort

issued by bank under buyer’s credit scheme.

iii) Term loans from bank amounting to Rs. 4721 lacs Repayable in 22 equal quarterly instalments,

(March 31, 2011 Rs. NIL) are secured by: with first instalment commencing on

a) Hypothecation of all tangible assets, present as 30.09.2012.

well as future, located at Plot No. 49, 50, 53 & 54 Interest paid on monthly rest @ 14% p.a.

Ecotech – I, Extension, Greater Noida (U.P.) and

b) Equitable mortgage of lease hold property No 49, 50,

53 & 54 Ecotech - I, Extension , Greater Noida (U.P.)

Amount outstanding, includes letters of comfort issued

by bank under buyer’s credit scheme.

iv) Fixed Deposits amounting to Rs. 554 lacs (March 31, Deposits are for a period of 1, 2 or 3 years.

2011 Rs. 485 lacs) from Public / Director are accepted Interest is paid @ 11% p.a.

as per the scheme framed under the provisions of

Section 58A of the Companies Act.

v) Vehicle Loans amounting to Rs. 133 lacs (March 31, Repayable in 36 monthly instalments

2011 Rs. 53 lacs) represent vehicle financed from Banks commencing from the date of purchase

under Hire purchase agreements.

All the loans from the banks are also guaranteed by the Managing Director



NOTE 6

LONG TERM PROVISIONS

As at

March 31, 2012 March 31, 2011Provision for employee benefitsProvision for Gratuity 28 19Provision for Accrued Leave 25 19Total 53 38

NOTE 7

DEFERRED TAX LIABILITIES (NET)

As at

March 31, 2012 March 31, 2011Deferred Tax LiabilitiesDepreciation 4,82 2,63Deferred Tax AssetsProvision for accrued Leave 8 5Total 4,74 2,58

NOTE 8

SHORT TERM BORROWINGS

As at

March 31, 2012 March 31, 2011Secured• Working Capital Loans* 1,39 -Sub-Total 1,39 -Unsecured• Fixed Deposits** 4,67 3,69• Vehicle Loans 56 43Sub-Total 5,23 4,12Total 6,62 4,12

* Working Capital Loans from Bank are secured by hypothecation of inventories and book debts and are repayableon demand

** Out of above deposits, Rs. 11.90 lacs are guaranteed by a Director (March 31, 2011 Rs. 39.80 lacs)



NOTE 9

TRADE PAYABLES

As at

March 31, 2012 March 31, 2011Due to Micro and Small Enterprises * 4,48 2,04Others 3,90 1,09Total 8,38 3,13

* The details of amounts outstanding to Micro, Small and Medium Enterprises are based on information availablewith the Company. The disclosures pursuant to the said MSMED Act are as follow:-

Sl. As at

No. March 31, 2012 March 31, 20111. Principal amount due and remaining unpaid - -2. Interest due on above and the unpaid interest - -3. Interest paid - -4. Payment made beyond the appointed day during the year - -5. Interest due and payable for the period of a day - -6. Interest accrued and remaining unpaid - -7. Amount of further interest remaining due and payable in - -

succeeding years

NOTE 10

OTHER CURRENT LIABILITIES

As at

March 31, 2012 March 31, 2011Current Maturities of Long term Debt 8,72 2,86Interest Accrued but not due on borrowings 75 45Unclaimed Dividend 20 14Unclaimed Matured Deposits 4 2Advance from Customers 7,61 5,21Creditors for Capital Goods 36 13Miscellaneous Creditors 1,75 78Expenses accrued but not due 56 43Employee benefits payable 18 14Statutory dues ( include P.F. / TDS/ Service Tax) 1,04 17Total 21,21 10,33

There are no amounts due for payment to the Investor Education and Protection Fund as at the year end



NOTE 11

SHORT TERM PROVISIONS

As at

March 31, 2012 March 31, 2011Provisions for Employees BenefitProvision for Commission due to Directors 1,04 80Other ProvisionsProposed Dividend on Equity Shares 2,50 2,00Dividend distribution tax on proposed dividendon Equity Shares 41 32Sub-Total 2,91 2,32Total 3,95 3,12

FIXED ASSETS

NOTE 12

TANGIBLE ASSETS:Own Assets: Gross Block Depreciation Net Block

Particulars Cost as at Additions Deletions Other Cost as at As at For the Written Upto As at As at31.03.2011 Adjustments 31.03.2012 31.03.2011 year Back 31.03.2012 31.03.2012 31.03.2011

Land Leasehold 9,06 - - - 9,06 - - - - 9,06 9,06

Land Freehold 1,18 - - - 1,18 - - - - 1,18 1,18

Building 4,02 19,77 - - 23,79 46 33 - 79 23,00 3,56

Plant & Machinery 15,66 34,21 1 - 49,86 2,69 1,30 1 3,98 45,88 12,97

Furniture & Fixtures 1,14 9 3 - 1,20 19 7 2 24 96 95

Office Equipments 65 9 2 - 72 21 11 2 30 42 44

Computers 36 8 - - 44 28 3 - 31 13 8

Vehicles 1,94 2,07 55 - 3,46 80 53 36 97 2,49 1,14

Total 34,01 56,31 61 - 89,71 4,63 2,37 41 6,59 83,12 29,38

Previous year 23,42 10,98 36 - 34,04 3,31 1,41 6 4,66

NOTE 13

INTANGIBLE ASSETS:Own Assets: Gross Block Depreciation Net Block

Acquired

Particulars Cost as at Additions Deletions Other Cost as at As at For the Written Upto As at As at31.03.2011 Adjustments 31.03.2012 31.03.2011 year Back 31.03.2012 31.03.2012 31.03.2011

Trade Marks* 2,43 - - - 2,43 - - - - 2,43 2,43

Computer Software 2 7 - - 9 2 1 - 3 6 -

Total 2,45 7 - - 2,52 2 1 - 3 2,49 2,43

Previous year 2,43 - - - 2,43 - - - -

* In pursuance with Accounting Standard 26 on Intangible Assets the Company is of the view that the Trade Marksheld by the Company are not less than the value at which they are stated in the Balance Sheet. The Company on thebasis of working and the calculations of future economic benefits, is of the opinion that the value of these trademarks should not be amortised, as the value has appreciated since their purchase by the Company. Therefore, theCompany has not charged any depreciation on these assets.



NOTE 14

CAPITAL WORK- IN- PROGRESS

As at

March 31, 2012 March 31, 2011Opening Balance 30 -Add:- Addition during the year 42,88 30Less:- Capitalized 40,34 -Closing Balance 2,84 30

NOTE 15

NON – CURRENT INVESTMENTS

As at

March 31, 2012 March 31, 2011Trade Investment (valued at cost )Unquoted Equity instruments in Group Company24,750 Equity Shares [ March 31, 2011 : 24,750]of Rs. 10/-each of DFM Agro Ltd. 2 2Total 2 2

NOTE 16

LONG TERM LOANS AND ADVANCES

(Unsecured, considered good)

As at

March 31, 2012 March 31, 2011VAT Recoverable 7 5Capital Advances 51 4,07Security Deposits 33 18Advance Income Tax [ Net of provision of Rs. 754 lacs(March 31, 2011 Rs. 523 lacs)] (23) (17)Total 68 4,13

NOTE 17

OTHER NON-CURRENT ASSETS

As at

March 31, 2012 March 31, 2011Term Deposits with banks * 4,81 4,56Total 4,81 4,56

(* Held as lien by bank towards Margin money)



NOTE 18CURRENT INVESTMENTS(At cost or market value, whichever is less)

As at

March 31, 2012 March 31, 2011QuotedMutual Fund(As on March 31, 2011, 4,43,314 Units at face value of Rs. 10/- each ) - 48

NOTE 19INVENTORIES

As at

March 31, 2012 March 31, 2011Stores & Spares 95 51Raw Materials 9,18 3,10Finished Goods 3,31 80Total 13,44 4,41

NOTE 20TRADE RECEIVABLES(Unsecured, considered good)

As at

March 31, 2012 March 31, 2011Outstanding for a period exceeding 6 months - -Others 6 -Total 6 -

NOTE 21CASH AND BANK BALANCES

As at

March 31, 2012 March 31, 2011Cash and Cash Equivalents:Cash on hand 4 6Bank Balances:In Current Accounts 18 2,13Sub-Total 22 2,19Other Bank Balances:Long Term Deposits 70 55Unpaid Dividend Accounts 20 14Sub-Total 90 69Total 1,12 2,88



NOTE 22

SHORT TERM LOANS AND ADVANCES(Unsecured, considered good)

As at

March 31, 2012 March 31, 2011Short Term Deposits * 13,25 5,50Other Loans and Advances 36 60Prepaid Expenses 58 5VAT Recoverable 7 38Total 14,26 6,53

* Deposits are with a company in which Directors are interested

NOTE 23

OTHER CURRENT ASSETS

As at

March 31, 2012 March 31, 2011Interest accrued but not due on term deposits 42 5Total 42 5

NOTE 24

CONTINGENT LIABILITIES

Claims against the Company not acknowledged as debts

Year ended

March 31, 2012 March 31, 2011Sales Tax (Entry Tax) 2 2Excise Duty ** 13,40 8,76Total 13,42 8,78

** During the year, the Excise Department has raised a demand against the Company amounting to Rs. 463.53 lacs(Previous Year Rs. 347.59 lacs), on account of excise duty payable on the products of the Company. The total demandoutstanding as on 31.03.2012 is Rs. 1340 lacs (Previous year Rs. 876.46 lacs). As per reclassification of the productsfiled by the Company, nil excise duty is leviable on its products from 01.12.2007. The Excise Department hadcontested the reclassification filed by the Company. Commissioner of Excise Duty (Appeals) had upheld thereclassification in favour of the Company. The Excise Department has raised the abovementioned demand andfiled an appeal with Custom, Excise and Service Tax Appellate Tribunal. The Company has not created any provisionin its accounts and has treated these amounts as contingent liability. Accordingly, CENVAT credit for the yearamounting to Rs. 321.50 lacs (Previous year Rs. 278.55 lacs) has also not been claimed as a credit by the Company,but has been charged as part of purchase cost for the year. The balance unavailed CENVAT credit as on 31.03.2012is Rs. 843.49 lacs (Previous year Rs. 521.99 lacs). The net liability of the Company after availing CENVAT credit wouldbe Rs. 496.51 lacs (Previous Year Rs. 354.47 lacs)



NOTE 25CAPITAL AND OTHER COMMITMENTS

As at

March 31, 2012 March 31, 2011

A) CAPITAL COMMITMENTSEstimated value of contracts in capital accountremaining to be executed (net of advances) 9,45 28,47

B) OTHER COMMITMENTSThe Company has imported capital goods under the ExportPromotion Capital Goods Scheme of the Government of India, at concessional rates of duty on an undertaking to fulfill quantifiedexports 7,55 7,55

NOTE 26PROPOSED DIVIDENDThe final dividend proposed for the year is as follows:

Year ended

March 31, 2012 March 31, 2011On Equity Shares of Rs. 10/- eachAmount of dividend proposed 2,50 2,00Dividend per Equity Share Rs. 2.50 per share Rs. 2 per share

NOTE 27REVENUE

Year ended

March 31, 2012 March 31, 2011Sale of Products 1,69,17 1,19,84Other Operating RevenueScrap Sales 25 14Total 1,69,42 1,19,98

NOTE 28OTHER INCOME

Year ended

March 31, 2012 March 31, 2011Interest Income 2,79 1,74Dividend Income 1 2Loss in value of Investments - (2)Net Loss on sale of fixed assets (10) (35)Miscellaneous Income 7 1Total 2,77 1,40



NOTE 29COST OF MATERIALS CONSUMED

Year ended

March 31, 2012 March 31, 2011Raw Material ConsumedOpening Inventory 3,10 2,16Add :- Purchases 1,16,56 77,18Less :- Inventory at the end of the year 9,18 3,10Cost of Raw Material Consumed during the year 1,10,48 76,24

NOTE 30CHANGES IN INVENTORY OF FINISHED GOODS

Year ended

March 31, 2012 March 31, 2011(Increase)/Decrease in stocksStock at the beginning of the year:Finished Goods (A) 80 87Less: Stock at the end of the year:Finished Goods (B) 3,31 80Increase/ Decrease in stocks (A-B) (2,51) 7

NOTE 31EMPLOYEE BENEFITS EXPENSES

Year ended

March 31, 2012 March 31, 2011Salaries, Wages and Bonus 9,52 6,52Contribution to Provident Fund 46 35Gratuity 24 19Workmen & Staff Welfare Expenses 74 49Total 10,96 7,55

As per Accounting Standard 15 “Employee Benefits”, the disclosures as defined in the Accounting Standard are given below:

A) PROVIDENT FUND: Provident Fund for all the employees is deposited with “The Delhi Flour Mills Co. Ltd. EmployeesProvident Fund Trust”. The Provident Fund Trust is managed in line with the Employees’ Provident Funds & MiscellaneousProvisions Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contributionby the employer and the employee together with the interest accumulated thereon are payable by the Trust to employeesat the time of their separation from the Company or retirement, whichever is earlier. The benefits vest immediately onrendering of the services by the employee.

B) GRATUITY: The Company operates a gratuity plan through the “ DFM Foods Ltd. Gratuity Trust “. Every employee is entitledto a benefit equivalent to fifteen days of the salary last drawn for each completed year of service in line with the Paymentof Gratuity Act, 1972. The same is payable by the trust at the time of separation from the Company or retirement, whicheveris earlier. The benefits vest after five years of continuous service.


C) LEAVE ENCASHMENT: The present value of obligation of leave encashment is determined based on actuarial valuationusing the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit ofemployee benefit entitlement and measures each unit separately to build up the final obligation for leave encashment.Short term liability is ascertained in respect of the following year and based on respective emoluments and encashment.


Leave Encashment(Unfunded)

31.03.2012 31.03.2011a. Reconciliation of opening and closing

balances of Defined Benefit obligationDefined Benefit obligation at beginning of the year 14 10Current Service Cost 13 10Interest Cost 1 1Actuarial (gain)/loss * 1Benefits Paid (10) (7)Defined Benefit obligation at year end 19 14

b. Reconciliation of opening and closingbalances of Fair value of plan assetsFair values of plan assets at beginning of the year - -Expected return on plan assets - -Actuarial gain / (loss) - -Employer contribution - -Benefits Paid (10) (7)Fair value of plan assets at year end - -Actual return on plan assets - -

c. Reconciliation of Fair value ofAssets and obligationsFair value of plan assets as at 31st March, 2012 19 14Present value of obligation as at 31st March, 2012 (19) (14)Amount recognized in Balance Sheet(Long term liability of deferred leave) 19 14Expected short term liability 6 5

d. Expenses recognized during the yearCurrent Service Cost 13 10Interest Cost 1 1Expected return on plan assetsActuarial (gain)/loss * 1Net Cost 14 11

e. Actuarial assumptionsMortality Table (L.I.C) 1994-96 1994-96

(Ultimate) (Ultimate)Attrition rate p.a. 5.00 % 5.00 %Imputed Rate of interest p.a. 8.75 % 8.50 %Expected rate of return on plan assets(per annum) - -Rate of escalation in salary (per annum) 5.00 % 5.00 %Remaining Working life 23.38 Years 22.35 Years

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority,promotion and other relevant factors including supply and demand in the employment market. The above informationis certified by the actuary.

*Amount is below the rounding off norm adopted by the Company



NOTE 32FINANCE COSTS

Year ended

March 31, 2012 March 31, 2011Interest 3,25 1,44Bank Charges 46 16Loss on foreign currency transactions and translation 76 57Total 4,47 2,17

NOTE 33DEPRECIATION AND AMORTIZATION EXPENSE

Year ended

March 31, 2012 March 31, 2011Depreciation on Tangible Assets 2,37 1,41Depreciation on Intangible Assets (Refer Note 13) 1 -Total 2,38 1,41

NOTE 34OTHER EXPENSES

Year ended

March 31, 2012 March 31, 2011Consumption of Stores and Spares 52 34Power and Fuel 3,55 2,40Rent 2,04 1,80Repair to Buildings 1 4Repair to Plant and Machinery 22 12Repair Others 1 1Insurance 6 5Rates and Taxes 31 3Director’s Fee 7 7Payment to Auditor :-• Statutory Audit Fee 1 1• Tax Audit Fees 1 1• Certification Fees * *• Reimbursement of out of pocket expenses * *Delivery Expenses 9,71 6,01Production Expenses 2,22 1,36Advertisement and Marketing Expenses 6,69 5,38Miscellaneous Expenses 5,06 3,60Total 30,49 21,23

* Amount is below the rounding off norm adopted by the Company



Expenses capitalized as a part of Capital Work–in-Progress

Year ended

March 31, 2012 March 31, 2011Consumption of Raw Material during Trial Production 17 -Power and Fuel 5 -Employees Benefits Expenses 6 -Miscellaneous Expenses 11 24Financial Expenses 1,63 -Total 2,02 24

NOTE 35

EARNING PER SHARE

Year ended

March 31, 2012 March 31, 2011a) Net Profit after tax available for equity share holders 10,36 8,32b) Weighted average number of equity shares of Rs. 10/- each

outstanding during the year ( No. of Shares) 1,00,01,676 99,79,176c) Dilutive Potential - -d) Basic/ Diluted Earning per Share (Rs.)(a/b) 10.36 8.34

NOTE 36

RELATED PARTY DISCLOSURES

1. Names of related parties and nature of relationship:(a) Where Control Exists : The Delhi Flour Mills Co. Ltd.(b) Key Management Personnel : (i) Shri R. P. Jain (Chairman)

(ii) Shri Mohit Jain (Whole-time Director)(iii) Shri Rohan Jain (Executive Director)

2. Volume of transactions with Related Parties during the year

NATURE OF Referred Referred Referred ReferredTRANSACTIONS in 1 (a) above in 1(b) (i) above in 1 (b)(ii) above in 1 (b)(iii) abovePURCHASES :Goods and Materials 60 - - -

(41) - - -SALES :Goods and Materials * - - -

(*) - - -Sale of Fixed Assets Nil - - -

(Nil) - - -



NATURE OF Referred Referred Referred ReferredTRANSACTIONS in 1 (a) above in 1(b) (i) above in 1 (b)(ii) above in 1 (b)(iii) aboveEXPENSES:Remuneration - - 72 83

- - (55) (70)Sitting Fees - 2 - -

- (2) - -Rent Paid 1,65 - - -

(1,65) - - -INCOME :Interest Received 2,16 - - -

(1,42) - - -FINANCE & INVESTMENT :Shares (Part of the year) - - - -

- - - -Inter Corporate Deposit given 24,10 - - -

(20,25) - - -Inter Corporate Deposit Repaid 10,85 - - -

(18,35) - - -Dividend Paid 74 - - -

(56) - - -OUTSTANDINGS :a) Interest accrued but not due Nil - - -

(1) - - -b) Inter Corporate Deposit 13,25 - - -

(5,50) - - -c) Creditor of Raw Material 1 - - -

(Nil) - - -Note: Previous year’s figures have been given in brackets.*Amount is below the rounding off norm adopted by the Company.

NOTE 37

LEASES

The disclosure in respect of Accounting for Leases as per Accounting Standard-19 is as under:-

Year ended

March 31, 2012 March 31, 2011Operating lease payments recognized during the yearMinimum Lease obligation:- Not later than 1 year 33 32- Later than 1 year but not later than 5 years 49 83- Later than 5 years - -



NOTE 38

DERIVATIVES OUTSTANDING AS AT THE REPORTING DATEParticulars Purpose Year Ended

March 31, 2012 March 31, 2011Forward Contracts to buy JPY Hedge of Liability under Buyer JPY 2347 lacs JPY 527 lacs

Credit Scheme availedForward Contracts to buy Euro Hedge of Liability under Buyer Euro 9 lacs Euro 4 lacs

Credit Scheme availedForward Contracts to buy US $ Hedge of Liability under Buyer US $ 9 lacs -

Credit Scheme availed

NOTE 39EXPENDITURE & EARNING IN FOREIGN CURRENCY

Year ended

March 31, 2012 March 31, 2011Interest 15 NILForeign Travel 54 53Store and Spare parts 21 5Capital Goods 18,25 3,01Earning in Foreign Exchange NIL NIL

NOTE 40VALUE OF RAW MATERIALS AND STORE AND SPARES CONSUMED

2011-12 2010-11A) Raw Materials Consumed Rs. in lacs % of Consumption Rs. in lacs % of Consumption

Imported - - - -Indigenous 1,10,48 100 76,24 100Total 1,10,48 100 76,24 100

B) Stores and Spares ConsumedImported 6 11 6 17Indigenous 46 89 28 83Total 52 100 34 100

NOTE 41

PREVIOUS YEAR FIGURES

The Financial Statements for the year ended March 31, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under theCompanies Act, 1956, the Financial Statements for the year ended March 31, 2012 are prepared as per RevisedSchedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year’s classification.The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurementprinciples followed for preparation of Financial Statements.

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