TASTY BITE EATABLES LIMITED

CORPORATE INFORMATION

Directors Registered Office

Mr. Ashok Vasudevan, Chairman 204, Mayfair Towers
Mr. Ravi Nigam, Managing Director Wakdewadi, Shivajinagar
Mrs. Meera Vasudevan Pune - 411 005
Mr. K. P. Balasubramaniam Tel: 020- 25510685
Dr. V. S. Arunachalam Fax: 020- 25512695
Mr. Kavas Patel
Mr. Sohel Shikari, Alternate Director

Auditors Factory
M/s Kalyaniwalla & Mistry Village Bhandgaon
Chartered Accountants, Pune Taluka Daund
Dist. Pune, Maharashtra

Bankers Share Transfer Agent

AXIS Bank Limited M/s Karvy Computershare Pvt. Ltd.
ICICI Bank Limited “Karvy House”, 46, Avenue 4,
Bank of Baroda Street No. 1, Banjara Hills,
Hyderabad - 500 034

Contents
Financial Highlight ................................................................................................................................ 02
Message from the Chairman ................................................................................................................ 03
Notice ................................................................................................................................................... 05
Directors’ Report .................................................................................................................................. 10
Corporate Governance Report .............................................................................................................. 17
Management Discussion Analysis ....................................................................................................... 27
Auditors’ Report ................................................................................................................................... 36
Balance Sheet ...................................................................................................................................... 40
Profit & Loss Account .......................................................................................................................... 41
Schedules ............................................................................................................................................ 42
Notes to Accounts ............................................................................................................................... 250
Balance Sheet Abstract & Company’s General Business Profile ......................................................... 61
Cash Flow Statement ........................................................................................................................... 62

26th Annual General Meeting A Request

Date : 16th September 2010 As a measure of economy, copies of the Annual Report will
Time : 3:00 p.m. not be distributed at the Annual General Meeting.
Shareholders are requested to kindly bring their copies to
Venue : Hotel Le Meridien Pune,
RBM Road the meeting.
Pune - 411 001

1 26TH ANNUAL REPORT 2009-10

 FINANCIAL HIGHLIGHTS
(Rs. in lakhs)
FINANCIAL HIGHLIGHTS 2009-2010 2008-09 2007-08 2006-07 2005-06 2004-05
Months 12 12 12 12 12 12

Statement of Income
Revenue 7,244.14 4,632.71 3,698.90 3,075.48 2,682.66 2,292.66
Cost of Revenue *4,103.45 2,388.19 1,972.48 1,686.44 1,302.07 1,210.17
Gross Profit 3,140.69 2,244.52 1,726.42 1,389.04 1,380.59 1,082.49
Operating Expenses 1,760.06 1,815.30 1,409.56 1,146.22 1,071.16 948.24
Depreciation 152.22 99.38 86.47 67.12 64.93 70.04
Interest 99.54 97.46 71.08 32.00 77.18 104.69
Extra-Ordinary (Income)/Expenses 0.21 0.76 (14.69) 20.27 26.75 1.08
Provision for Tax 431.77 90.59 57.03 36.79 84.76 (14.74)
Net Profit 696.90 141.03 116.97 86.64 55.81 (26.82)

Assets Employed
Fixed Assets - Gross 2,487.73 2,086.24 2,109.81 1,885.95 1,286.61 1,241.27
Fixed Assets - Net 1,548.11 1,365.01 1,119.97 1,032.00 632.45 463.11
Investments - - - 0.50 0.50 0.50
Current Assets 3,626.23 2,242.80 1,889.72 1,730.77 1,488.69 1,908.73
Current Liabilities (1,405.96) (868.06) (916.16) (852.94) (746.63) (629.05)
Deferred Revenue Expenditure - - - 0.18 0.36 0.53
Deferred Tax Asset / (liability) (120.53) (83.85) (63.40) (21.48) 10.35 91.29
3,647.85 2,655.90 2,030.13 1,889.03 1,385.72 1,835.11
Net Current Assets 2,220.27 1,374.74 973.56 877.83 742.06 1,279.68
Financed By
Share Capital 316.13 316.13 316.13 316.13 316.13 316.13
Reserves 1,312.92 1,312.92 1,312.92 1,312.92 1,312.92 1,312.92
Shareholders' Funds 1,629.05 1,629.05 1,629.05 1,629.05 1,629.05 1,629.05
Profit (Loss ) Carried Forward/ Surplus 522.02 (144.25) (285.28) (402.25) (488.89) (544.70)
Loan Funds 1,496.78 1,171.10 686.36 662.23 245.56 750.76
3,647.85 2,655.90 2,030.13 1,889.03 1,385.72 1,835.11
Ratios
Current Ratio 2.58 2.41 2.06 2.03 1.99 3.03
Working Capital Turnover 3.26 3.37 3.80 3.50 3.62 1.79
Gross Profit % To Revenue 43% 48% 47% 45% 51% 47%
Net Profit % To Revenue 9.62% 3.04% 3.16% 2.82% 2.08% -1.17%
Debt Equity Ratio 0.70 0.72 0.42 0.41 0.15 0.46
Capital Turnover 1.96 1.74 1.82 1.63 1.94 1.25
Fixed Assets to Shareholders' Funds 0.72 0.84 0.69 0.63 0.39 0.28
Earnings Per Share 27.13 5.50 4.56 3.38 2.17 (1.05)
Net Worth 2,151.07 1,484.80 1,343.77 1,226.80 1,140.16 1,084.35

* Current year includes trading goods.

2
 MESSAGE FROM THE CHAIRMAN

Dear Shareholders,

It was a decade ago, when I first had the privilege to address all you as Chairman of your Company in the
Annual Report titled “The Turnaround”. We articulated the 4C strategy and reported profits for the first
time in the Company’s history, releasing it from the clutches of BIFR.

What a decade it has been. Ten years since the turnaround it is my pleasure to announce this year’s
record results. Simply put, it is another year of record growth in your Company’s revenues and profits. Or
to express it in another way, this year’s PAT (profit after tax) is greater than the revenues of the Company
then!

For the year ended March 31, 2010 your Company’s revenues grew to Rs.72. 4 crores- a 56% growth
over last year. The PAT for the same period grew nearly 400% to Rs. 7 crores! This has resulted in the
elimination of all the Company’s historical accumulated losses and the Board consequently endorsed the
management’s recommendation of a 10% dividend for the year subject to your approval at the Company’s
Annual General Meeting scheduled to be held on September 16, 2010

This performance raises two questions that are probably foremost in your mind.

What is driving this growth in revenues and earnings these last several years?
Is such growth sustainable in the near and medium-term?

Let me address the issue of the historical growth rate first. You will recall the Company’s revenues have
grown from less than Rs. 27 crores in FY’06 to over Rs. 72 crores last year. This translates to a CAGR
(compound annual growth rate) of nearly 28% over this 4-year period. During the same 4-year period,
PAT grew from Rs. 56 lakhs in FY’06 to nearly Rs. 7 crores last year- an annual rate of nearly 88%!

What makes this remarkable is that nearly 75% of this growth has been generated due to increase in
exports and that too to the most competitive grocery industry in the world -the United States. Equally
significant is that this has been achieved during years of unprecedented sluggishness in the US economy.

This growth has come through the sustained efforts of our largest customer and majority shareholder-
Preferred Brands International, the Stamford CT based food company. Major focus has been to promote
volume growth through three sustained efforts: increasing the number of users through wider grocery
chain authorizations, increased usage amongst existing customers through focused and highly targeted
marketing programs and finding new uses for our consumers through the launch of several new, innovative
and relevant products that provide them greater usage occasion. While the private label business has
grown modestly the Tasty Bite brand has grown rapidly and retained its status in the US prepared foods
category as the #1 Indian brand and the # 3 Pan-Asian brand. Simultaneously, Australia has continued its
steady growth over these years and there too, Tasty Bite is the dominant brand in its category and is
distributed nationally in all major supermarket chains and independent stores.

Our focus in India has been the institutional segment catering to major international quick-service
restaurants & corporates. For the same 4-year period our domestic business has grown from Rs. 1.3
crores in FY’06 to Rs.10.8 crores last year.

3 26TH ANNUAL REPORT 2009-10

 MESSAGE FROM THE CHAIRMAN

Meanwhile, in a continuing effort to drive profits, our manufacturing and supply chain team is working
closely with the Tasty Bite Research Center (TBRC) to build efficiencies throughout the system, improve our
cost structure and majorly contribute to customer acquisition. We have also maintained a conservative
foreign exchange posture and benefited from the tailwinds of a reasonably stable dollar despite a weak US
economy.

Clearly, our theme for FY’10 –‘profitable growth’ was well conceived and executed during the year as can
be seen from various performance indicators.

Let me now briefly address the second question dealing with the sustainability of such growth and our
ability to keep pace.

Even as the business has grown and brought with it operating pressures, the Company has retained a
major focus on strategy, process and execution. As a result, I am deeply persuaded that we now have a
business infrastructure in place that is geared to drive growth in all our key markets even as we endeavor
to explore new opportunities. Here are a few highlights of our preparedness:

We have embarked upon a major expansion and modernization drive that will virtually double our
plant capacity this year.
We are building a state-of-the-art research center in our campus in Bhandgaon and TBRC will
relocate there in September. The mission statement of TBRC envisages it to become a center for
excellence in prepared foods R&D.
We are envisioning a major revamp in our farm and will transform it to a demonstration high-yielding
farm while we further strengthen our contract farming initiatives. This will improve quality of our
inputs and help keep our costs under control.
Major efforts are being made to make Tasty Bite a household name in all our key markets by our
focus on our product innovation, low cost manufacturing and customer partnerships.
Most importantly, our employees continue to be our biggest source of inspiration. I am particularly
pleased to announce that this year too the Great Place to Work Institute rated us among the Top 100
companies to work for in India.
In the domestic business we see major opportunities over the next five years. We will be working very
closely to build strategic relationships with some of our key customers and will continue to transform
ourselves from a material supplier to a solutions provider.
All of this is being facilitated in no small measure through the introduction of a unique strategy tool
called the Spice Card inspired by the Balanced Score Card and adapted to suit our Company’s
unique needs.
Your Company is well poised to continue its growth trajectory in the medium term. While the North American
consumers will continue to be the largest revenue source for the Company over the next five years,
clearly it is my view that the Indian market will be the fastest growing as Tasty Bite continues to define new
opportunities, identify and ride the megatrends in the Indian food and grocery industry.

I wish to thank all our stakeholders who have persisted with us in this long journey. On behalf of all the
employees of the Company, I invite all to mark 2010 as a new beginning in the Company’s journey and to
join us in making Tasty Bite a valued partner to our customers and to make the brand a household name
in all our key global markets.

Ashok Vasudevan
Chairman

4
 NOTICE

NOTICE

Notice is hereby given that the Twenty Sixth Annual General Meeting of the Members of Tasty Bite Eatables
Limited will be held on Thursday, September 16, 2010 at 3.00 p.m. at Hotel Le Meridien Pune, RBM Road,
Pune 411 001 to transact the following business:
ORDINARY BUSINESS:
1. To receive, consider and adopt the Audited Balance Sheet as at March 31, 2010, the Profit & Loss Account for
the financial year ended on that date and the reports of the Directors and the Auditors thereon.
2. To declare dividend on 59,530 1% Non-Cumulative Non-Convertible Redeemable Preference Shares of Rs.
100 each for the Financial Year 2009-2010.
3. To declare dividend of Rs. 1 per Equity Share on 2,566,000 Equity shares of Rs. 10 each for the Financial Year
2009-2010.
4. To appoint a Director in place of Mr. Ashok Vasudevan, who retires by rotation and being eligible, offers himself
for re-appointment.
5. To appoint a Director in place of Mr. K. P. Balasubramaniam, who retires by rotation and being eligible, offers
himself for re-appointment.
6. To appoint Auditors and to fix their remuneration and to pass with or without modification, the following
resolution as an Ordinary Resolution.
“RESOLVED THAT M/s Kalyaniwalla & Mistry, Chartered Accountants, Pune who retire at this Annual General
Meeting and being eligible, offer themselves for re-appointment, be and are hereby appointed as Auditors of
the Company for holding office from the conclusion of this Annual General meeting until the conclusion of the
next Annual General Meeting and that the Audit Committee of the Board of Directors be and is hereby
authorized to determine the remuneration payable to the said Auditors.”
SPECIAL BUSINESS:
7. To consider and if thought fit, to pass with or without modifications, the following, as Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of Sections 198, 269 read with Schedule XIII, 309, 310, 311 and
other applicable provisions, if any, of the Companies Act, 1956, including any amendment, modification,
variation or re-enactment thereof and the Agreement dated July 20, 2006, approval of the Members of the
Company be and is hereby accorded to revise the remuneration payable to the Managing Director of the
Company as detailed in the Explanatory Statement w.e.f. April 1, 2010 till July 20, 2011.
RESOLVED FURTHER THAT all other terms and conditions of the agreement mentioned above for the
appointment of Mr. Ravi Nigam as approved by the Members at their Annual General Meeting held on September
25, 2006 shall remain unchanged.
RESOLVED FURTHER THAT the aforesaid remuneration be considered as minimum remuneration
notwithstanding that the Company may make loss or inadequate profits in the year(s) in which Mr. Ravi Nigam
is paid the said remuneration.
RESOLVED FURTHER THAT the Board of Directors be and is hereby authorized to do all such acts, deeds,
matters and things as may be necessary, proper or expedient, to give effect to this Resolution.”
8. To consider and if thought fit, to pass with or without modifications, the following, as an Ordinary Resolution :
“RESOLVED THAT consent of the Members of the Company be and is hereby accorded for appointment and
payment of remuneration of Mr. Sohel Shikari (an Alternate Director appointed by the Board of Directors of the
Company on February 6, 2010, pursuant to Article 84 of the Articles of Association of the Company and under
Section 313 of the Companies Act, 1956, to Mrs. Meera Vasudevan, Director during her absence from the
State of Maharashtra) as Alternate Director in whole time employment, designated as Group Chief Financial
Officer (CFO) of the Company w.e.f. February 6, 2010 pursuant to Sections 198, 269, 309, 313 and other
applicable provisions of the Companies Act, 1956 read with Schedule XIII of the said Act.

5 26TH ANNUAL REPORT 2009-10

 NOTICE

RESOLVED FURTHER THAT Mr. Sohel Shikari in the capacity as the CFO be paid remuneration as may be
fixed by the Board within the limits approved by the Members until March 31, 2011 as per the details given in
the Explanatory Statement.
RESOLVED FURTHER THAT the aforesaid remuneration be considered as minimum remuneration
notwithstanding that the Company may make loss or inadequate profits in the year(s) in which Mr. Sohel
Shikari is paid the said remuneration.
RESOLVED FURTHER THAT the appointment of Mr. Sohel Shikari as CFO on aforesaid remuneration, shall
continue without a break, notwithstanding the break being caused in his Alternate Directorship due to the
return/ arrival of Mrs. Meera Vasudevan in the State of Maharashtra, India for any reason.
RESOLVED FURTHER THAT the Board of Directors be and is hereby authorized to do all such acts, deeds,
matters and things as may be necessary, proper or expedient, to give effect to this Resolution.”

BY ORDER OF THE BOARD OF DIRECTORS

OF TASTY BITE EATABLES LIMITED

Dated : May 30, 2010 Ravi Nigam

Place : Bengaluru Managing Director

NOTES:
1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND
VOTE ON A POLL INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY.
PROXIES IN ORDER TO BE EFFECTIVE MUST BE DEPOSITED AT THE REGISTERED OFFICE OF THE
COMPANY NOT LESS THAN 48 HOURS BEFORE THE MEETING, DULY STAMPED AND SIGNED.
2. Members /Proxies should bring duly-filled Attendance Slips sent herewith, to attend the meeting.
3. Members who hold shares in demateralised form are requested to write their Client ID and DP ID and those
who hold shares in physical form are requested to write their Folio Number in the attendance slip for attending
the Meeting.
4. Corporate Members are requested to send to the Company, a duly certified copy of the Board Resolution
authorizing their representative to attend and vote at the Annual General Meeting.
5. The Register of Members and the Share Transfer Books of the Company will remain closed from September
9, 2010 to September 16, 2010 (both days inclusive) for the purpose of Annual General Meeting and Declaration
of Dividend.
6. The dividend as recommended by the Board of Directors, upon declaration by the members at the 26th Annual
General Meeting shall be paid to those members whose names appear on the Register of Members of the
Company after giving effect to all valid share transfers in physical form lodged with the Company or its
Registrar & Transfer Agents on or before Wednesday, September 8, 2010. In respect of shares held in
dematerialised form, the dividend will be paid on the basis of particulars of beneficial ownership furnished by
the Depositories as on the closing hours of business on Wednesday, September 8, 2010.
7. Members are requested to notify changes, if any, in their registered addresses and all correspondences,
including dividend matters to M/s. Karvy Computershare Pvt. Ltd. (Karvy).
8. The Company prefers use of ECS for payment of dividend. Considering the advantages, members are requested
to enroll for ECS facility. In order to avoid loss of dividend warrants in transit, undue delay in receiving the
warrants and to protect against fraudulent encashment of dividend warrants, members are requested to provide
ECS Mandate before Wednesday, September 8, 2010 to Karvy under the signature of the sole/first joint
holder, as per the following information which will be used by the Company for Dividend payment:
i) Name of Sole/First joint holder and Folio No.
ii) Particulars of Bank account viz.
a) Name of the Bank
b) Name of the Branch

6
 c) Complete address of the Bank with Pin Code
d) Branch Code (9 Digits code number appearing on the MICR Band of the cheque supplied by the Bank)
e) Account Type (Savings Bank or Current account)
f) Bank account number allotted by the Bank
9. The Members holding shares in physical form are requested to send ECS Mandate duly filled in to Karvy. If
shares are held in dematerialised form, Bank account details provided by the Depository Participants (DPs)
will be used by the Company for dividend payments. Shareholders who wish to change such bank accounts
may advise their DPs about such change with complete details of Bank account including MICR Code. After
dispatch of dividend warrants, any request for change in the Bank Account will not be entertained by the
Company or its Registrars.
10. Members desirous of obtaining any detailed information concerning the accounts and operations of the Company
are requested to address their queries to the Managing Director or the Company Secretary so as to reach the
Company at least seven days before the date of the AGM so that the required information may be made
available at the meeting.
11. The relevant Explanatory Statement pursuant to Section 173 of the Companies Act, 1956 in respect of the
Special Business at Item No. 7 & 8 of the Notice is annexed hereto.
12. All the documents referred to in the Notice & Explanatory Statement are open for inspection at the Registered
Office of the Company an all working days viz. from Monday to Friday between 10:00 am to 1:00 pm up to the
date of Annual General Meeting.
13. Members are requested to bring their own copy of the Annual Report to the meeting. No extra copies of the
Annual Report will be distributed at the meeting.
PURSUANT TO CLAUSE 49 OF THE LISTING AGREEMENT, A BRIEF RESUME OF THE DIRECTORS
PROPOSED TO BE REAPPOINTED VIDE ITEM NO. 4 & 5 MENTIONED IN THE NOTICE IS DETAILED
BELOW:
Mr. Ashok Vasudevan, aged 55 years, is a Non-Executive Director of the Company. Prior to
co-founding Preferred Brands, he headed the India desk of Pepsi World Trade from its world beverage
headquarters in Somers, New York. Prior to this he was a member of Pepsi's start-up team in India as Vice
President - Exports. During his tenure at Pepsi he helped set up India's international trading division in a wide
range of businesses including commodity trading, food processing, and value added exports. In the process,
he has been involved in the design of several joint ventures in India and the US and was awarded the prestigious
International MVP award.
Before joining Pepsi, Mr. Ashok Vasudevan spent 10 years with the Unilever group in India in various functions
that included Management Development and Sales & Marketing, where he gained a unique understanding of
both urban and rural India. During his last three years, with Unilever, he was Operations Manager for Eastern
Europe, where he ran India's largest export program in that region.
Mr. Ashok Vasudevan regularly lectures at leading business schools in the US and India. He has a Bachelors
in Agricultural Economics and a Masters in Business Administration. Ashok is currently the Chairman of
Tasty Bite Eatables Limited. He is a Director in Preferred Brands International Inc., USA which in turn is the
holding company with 100% shareholding of Preferred Brands Foods (India) Limited, the holding Company of
Tasty Bite Eatables Limited. He is also a Director of ASG Omni India Pvt. Ltd. He does not hold any shares
of the Company.
Mr. K. P. Balasubramaniam, aged 69 years, is an Independent Director of the Company. He is a graduate
in Science (Maths) with Diploma in Business Administration from London, Fellow Member of the Institute of
Directors, London and Member of British Institute of Management, London. He has rich and vast experience
in Beer, Food Products and Garment Industries. He has successfully negotiated trade agreements for promoting
different brands of Mysore Breweries Ltd. He has also promoted Export Garments & Spices for Pal Industries
Ltd. He has introduced manufacture and distribution of Mineral Water with Brand name “Stream” in Karnataka
& Andhra Pradesh. He is also a Director of many other Companies in India and President of Karnataka
Brewers & Distillers Association. He holds 1500 Equity Shares of Rs. 10 each jointly with his wife Mrs.
Rajeswari Balasubramaniam.

7 26TH ANNUAL REPORT 2009-10

EXPLANATORY STATEMENT PURSUANT TO SECTION 173 OF THE COMPANIES ACT, 1956
Item No. 7 of Special Business:
Revision in Remuneration of Mr. Ravi Nigam, Managing Director

Mr. Ravi Nigam was re-appointed as Executive Director and later re-designated as Managing Director, of the
Company for 5 years w.e.f. July 20, 2006 approved by the Members of the Company at the Annual General Meeting
held on September 25, 2006. The Members also approved his remuneration and other terms and conditions of the
appointment as detailed in the Agreement signed for the purpose dated July 20, 2006.

Mr. Ravi Nigam, aged 50 years, holds a Degree in Chemistry and a Masters Degree in Rural Management from the
Institute of Rural Management, Anand. He has vast domestic and international experience of over 28 years in
Foods and Agriculture Sector. He was the Chief General Manager of Ballarpur Industries Ltd.’s Commodity Foods
Group. He started his career with Britannia Industries and also worked for Pepsi India. He also, set up his own
business providing Agri-exports consultation and worked with clients such as Pepsi, L&T, Proctor & Gamble, Tata
Exports and Ballarpur Industries.

He has been the Chief Executive Officer of Tasty Bite Eatables Limited since 1997 when it was a sick unit under
BIFR. He turned it around and made it a profit-making unit.

The remuneration since his re-appointment in 2006 has been in terms of Schedule XIII of the Companies Act, 1956.

The Board of Directors, considering the present profitable position of the Company for the year ended on March 31,
2010 propose to revise the remuneration payable to Mr. Ravi Nigam w.e.f. April 1, 2010 till the expiry of his tenure
i.e. July 20, 2011.

The Food Industry needs constant efforts at product innovation and development, process improvisation, productivity
increase and efficiencies and ensuring observance of highest international quality standards. The Board of Directors
recognizes the leadership and guidance of Mr. Ravi Nigam to the Tasty Bite team and therefore proposes revision
in the remuneration as follows:

Salary & Allowances: upto Rs. 3,10,000 p.m.

Perquisites: Provision of a car with driver for use in Company’s business, Fuel & vehicle maintenance reimbursement
upto Rs. 1.25 lacs p.a., Educational Allowance at Rs. 200 p.m. per child for max. 2 children.

Valuation of perquisites shall be as per the Income Tax Rules, 1962.

Other Benefits: Contribution to Provident Fund as per applicable Income Tax Rules and Company policy, Medical
reimbursement as per Income Tax Rules and Leave Travel Allowance for self, spouse and children for travel to any
place in India upto Rs. 60,000 p.a.

Other terms and conditions of the agreement dated July 20, 2006 remain unchanged.

The Board recommends the resolution for approval of the Members.

This be treated as an abstract of variation of the terms and conditions governing the payment of remuneration of the
Managing Director under Section 302 of the Companies act, 1956.

No other Director, except Mr. Ravi Nigam, is in any way, concerned or interested in the said resolution.

Item No. 8 of Special Business:

The Board of Directors of the Company appointed Mr. Sohel Shikari as Alternate Director to Mrs. Meera Vasudevan
who resides abroad, on February 6, 2010 under Section 313 of the Companies Act, 1956 read with Article 84 of the
Articles of Association of the Company.

Mr. Sohel Shikari has been employed as Group Chief Financial Officer and in the whole time employment of the
Company since 2002.

8
Mr. Sohel Shikari, aged 40 years, has a Masters degree in Civil Engineering from the Massachusetts Institute of
Technology and has previously worked with Goldman Sachs in New York. He has been involved in the acquisition
by Preferred Brands International Inc. USA of a majority interest of Tasty Bite Eatables Limited in 1999 and
integrating the operations of the business.

He has been responsible for strategic planning in the group and heads the finance function as Group CFO. He is the
Director of Preferred Brands Foods (India) Limited which is the holding Company of this Company. He is also a
Director of Preferred Brands International Inc., the ultimate holding Company of the group.

The remuneration details of Mr. Sohel Shikari (Alternate Director) designated as Group Chief Financial Officer are:

Salary & Allowances: upto Rs. 2,85,000 p.m.

Perquisites: Provision of a car with driver for use in Company’s business, Fuel & vehicle maintenance reimbursement
upto Rs. 1.25 lacs p.a., Educational Allowance at Rs. 100 p.m. per child for max. 2 children.

Valuation of perquisites shall be as per the Income Tax Rules, 1962.

Other Benefits: Contribution to Provident Fund as per applicable Income Tax Rules and Company policy, Medical
reimbursement as per Income Tax Rules and Leave Travel Allowance for self, spouse and children for travel to any
place in India upto Rs. 1,00,000 p.a.

The Board recommends the resolution for approval of the Members.

This be treated as an abstract of the terms of appointment and remuneration of Mr. Sohel Shikari as the Alternate
Director in whole time employment designated as CFO under Section 302 of the Companies Act, 1956.

No other Director except Mr. Sohel Shikari, is concerned or interested in the proposed resolution.

BY ORDER OF THE BOARD OF DIRECTORS

OF TASTY BITE EATABLES LIMITED

Dated : May 30, 2010 Ravi Nigam

Place : Bengaluru Managing Director

9 26TH ANNUAL REPORT 2009-10

 DIRECTORS’ REPORT

To The Members,

Your Directors are pleased in presenting the Twenty Sixth Annual Report together with Audited Statement of
Accounts for the year ended March 31, 2010.

FINANCIAL RESULTS
(Rs. In lacs)
Particulars Year Ended Year Ended
March 31, 2010 March 31, 2009
Total Revenue 7244.14 4632.70
Operating Profit (loss) – PBDIT 1380.63 429.19
Interest 99.54 97.46
Depreciation 152.22 99.36
Profit (Loss) before Tax 1128.87 232.37
Provision for Taxation (MAT Credit Entitlement) (395.09) (70.14)
Provision for Deferred Tax (36.68) (20.44)
Prior Period Income/ (Expenses) (0.21) (0.76)
Net Profit 696.89 141.03
Profit/(Deficit) Carried Forward (144.25) (285.27)
Appropriations
Dividend on Preference Shares 0.60 -
Dividend on Equity shares 25.66 -
Tax on Dividend 4.36 -
Profit/ (Loss) transferred to Balance Sheet 522.02 141.03

OPERATIONS
Your Company increased revenues by 56.37% from Rs. 46.33 Cr to Rs. 72.44 Cr. The export revenues grew from
Rs. 36.01 Cr to Rs. 56.56 Cr. an increase of 57.07%. The volume growth in Sales was 60.78% as compared to the
previous year. The Company continues using foreign exchange forward contracts to hedge the exposure to movements
in foreign exchange rates.
DIVIDEND
The Board of Directors at their meeting held on May 30, 2010, recommended a maiden dividend of Re. 1 per equity
Share (10% on the face value of Rs. 10 each) , subject to the approval of shareholders at the ensuing AGM, for the
financial year 2009-2010. The Equity dividend payment would involve a cash outgo of Rs. 25.66 lacs towards
dividend and Rs. 4.26 lacs towards tax on dividend being borne by the Company.
In addition to the above, the Company has provided for a preference dividend of 1% aggregating Rs.59, 530/- on its
59,530 1% Non Cumulative Non Convertible Redeemable Preference Shares of Rs. 100 each for the financial year
2009-10.
Upon declaration by the members at the 26th Annual General Meeting, the dividend shall be paid to those members
whose names appear on the Register of Members of the Company after giving effect to all valid share transfers in
physical form lodged with the Company or its Registrar & Transfer Agents on or before Wednesday, September 8,
2010. In respect of shares held in dematerialised form, the dividend will be paid on the basis of particulars of
beneficial ownership furnished by the Depositories as on the closing hours of business on Wednesday, September
8, 2010.

10
 DIRECTORS’ REPORT

FIXED DEPOSITS

The Company has not accepted or invited any deposits from the public during the year under review.

DIRECTORS

Mr. Ashok Vasudevan and Mr. K.P. Balasubramaniam, who retire by rotation at the ensuing Annual General Meeting,
and being eligible, offer themselves for reappointment.

CORPORATE GOVERNANCE

Your Company places great significance to good Corporate Governance as an important step towards building
investors’ confidence, improve investors’ protection and maximize long-term shareholders’ value. Accordingly, it
has taken adequate steps to ensure that the provisions of Corporate Governance as prescribed under the Listing
Agreement with the Stock Exchange are complied with.

A detailed report on Corporate Governance forms a part of this Annual Report. Your Company has also obtained a
certificate from Practicing Company Secretary regarding compliance of conditions of corporate governance and is
annexed as Annexure A to this report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Directors confirm:

(i) that in preparation of the accounts for the financial year ended March 31, 2010, the applicable accounting
standards have been followed alongwith proper explanation relating to material departures;

(ii) that they have selected such accounting policies and applied them consistently and made judgments
and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit and loss of the Company for the year
under review;

(iii) that they have taken proper & sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company
and for preventing and detecting fraud and other irregularities;

(iv) that they have prepared the annual accounts for the financial year ended March 31, 2010 on a ‘going
concern’ basis.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Clause 49 of the Listing Agreement, the Management Discussion and Analysis Report is given as an
addition to this report and forms part of it.

AUDITORS

M/s. Kalyaniwalla & Mistry, Chartered Accountants, Pune, retire as the Auditors of the Company at the forthcoming
Annual General Meeting and are eligible for reappointment. The Directors recommend that M/s. Kalyaniwalla &
Mistry, Chartered Accountants, Pune, be appointed as the Company’s Auditors to hold office until the conclusion
of the next Annual General Meeting. The Company has received confirmation that their appointment, if made, will
be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information in accordance with provisions of Section 217 (1)(e) of the Companies Act, 1956 read with Companies
(Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy, technology
absorption and foreign exchange earnings and outgo, is given in the Annexure B forming part of this Report.

PERSONNEL

During the year under review, the industrial relations of the Company continued to be cordial and peaceful. The
Company strives in its HR initiatives to be an engine for instituting value and performance driven culture.

11 26TH ANNUAL REPORT 2009-10

 DIRECTORS’ REPORT

The Company has come a long way in achievement of its mission statement through its continuous efforts and
perseverance. The focus is on continuous learning and development to build on the capabilities of the employees.
Your Company consistently organises employees’ training programmes which are right blend of classroom sessions
and on-the-job training. This is done to balance the needs for training in behavioral, functional, managerial and
leadership areas. The Company continues to maintain strong belief in all its employees who have played a vital role
in the Company’s transformation and gearing up for the future growth.

Information as per Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975 as amended, forms part of this report. However as per the provisions of Section 219(1)(b)(iv) of the Act,
the Reports and Accounts being sent are excluding the statement containing the particulars provided under Section
217(2A) of the Act. Any member interested in obtaining such particulars may inspect the same at the Registered
Office of the Company or write to the Company Secretary for a copy thereof.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation for the confidence reposed and continued support extended by the
customers, suppliers and shareholders as well as the bankers to the Company.

Your Directors also place on record their deep sense of appreciation for the efforts and contribution of the executives,
staff and workers of the Company during 2009 – 10.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

OF TASTY BITE EATABLES LIMITED

Date : May 30, 2010 Ashok Vasudevan

Place : Bengaluru Chairman

12
 DIRECTORS’ REPORT

ANNEXURE TO DIRECTORS’ REPORT

Annexure A
The Members
Tasty Bite Eatables Limited

Re: Corporate Governance Certificate

I have examined the compliance of conditions of Corporate Governance by Tasty Bite Eatables Limited (the Company)
for the year ended on March 31, 2010 as stipulated in Clause 49 of the Listing Agreement entered into with Bombay
Stock Exchange Limited.
The compliance of conditions of Corporate Governance is the responsibility of the management. My examination
was limited to procedures and implementations thereof, adopted by the Company for ensuring compliance with the
conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements
of the Company.
In my opinion and to the best of my information and according to the explanations given to me and representations
made by the Directors and Management, I certify that the Company has complied with the conditions of Corporate
Governance as stipulated in the Clause 49 of the Listing Agreement.
I further state that such compliance is neither an assurance as to the future viability of the Company nor the
efficiency or effectiveness with which management has conducted the affairs of the Company.

J. N. Mavji
Practising Company Secretary
Membership No. 6111
Certificate of Practice No. FCS 2821
Date : 29 May 2010
Place : Pune

13 26TH ANNUAL REPORT 2009-10

 DIRECTORS’ REPORT

Annexure B

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE EARNINGS & OUTGO :

A. CONSERVATION OF ENERGY :
a) Energy Conservation measures taken:
Power produced from captive power is maintained at 3.05 units/litre of fuel by undertaking preventive
maintenance at regular basis.
b) Additional investment & proposals for reduction of consumption of energy being proposed:
The Company had purchased a new Diesel Generator Set of 250 KVA. This has increased the capacity
to 750 KVA.
c) Impact of measures (a) and (b) above for reduction of energy consumption and consequent impact on the
cost of production of goods: —
d) Total energy consumption & energy consumption per unit of production as per Form A of the Annexure.

B. TECHNOLOGY ABSORPTION
e) Efforts made in technology absorption as per Form B of the Annexure.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
f) total foreign exchange used & earned :

Current Year Current year Previous Year

Used (Rs. lacs) 44.52 802.13
Earned (Rs. lacs) 5312.63 3474.38

14
 DIRECTORS’ REPORT

FORM A
Disclosure of particulars with respect to Conservation of Energy :
(A) Power and Fuel Consumption:
1. Electricity Current Year Previous Year
a) Purchased Unit (in KWH) 25,01,710 21,31,230

Total Amount (in Rupees) 1,26,61,910 98,07,549

Rate/Unit (In Rupees) 5.06 4.6

b) Own Generation :

Through Diesel Generator: A very small amount of electric power was generated through 750 KVA DG
sets installed as stand-by arrangements, whenever there is power shortage from MSEDCL.

2. Others (Briquettes)
Qty. (in ton) 1,901.07 1375.45
Total Amount (In Rupees) 77,20,469 52,26,710
Avg. Rate (in Rs./ton) 4061.12 3800.00

(B) Consumption Per Unit Production:

Standard products (with details) unit
Electricity: KWH/KG 0.339 0.489
Furnace oil: KG/ KG 0.006 -
Briquettes: KG/ KG 0.256 0.352

FORM B

(A) RESEARCH & DEVELOPMENT (R & D)

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

With continuous change in business and technology, investments in research and development need to
be made. In its strive to be a centre of excellence in prepared foods R&D, the Company has set-up a
modern in-house R&D research center lab within its Regd. & Corporate Office at 204, Mayfair Towers,
Pune.

During the year a range of new products were launched like rices, entrées, sauces, meal inspirations for
both the branded and the private labeled business.

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

The above developments have benefited in a growth of Exports to Rs. 56.56 Crores in the current year
from Rs. 36 Crores in the previous year.

3. Future plan of action

The future plan of action for the Company is to develop various food ranges viz. frozen and chilled foods,
nutritious and leguminous foods and organic foods.

15 26TH ANNUAL REPORT 2009-10

 DIRECTORS’ REPORT

4. Expenditure on R & D
a) Capital (in Rs.) 7,69,819
b) Recurring (in Rs.) 95,290
c) Total (in Rs.) 8,65,109
d) Total R & D expenditure as a percentage of total turnover 0.12%

(B) TECHNOLOGY, ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts in brief, made towards technology, absorption,

adaptation and Innovation NIL

2. Benefits derived as a result of above efforts

3. Technology Imported (during last 5 years)

16
 CORPORATE GOVERNANCE REPORT

GOVERNANCE PHILOSOPHY

Your Company is committed to best global business practices coupled with excellence in Corporate Governance.
The principles of transparency, accountability, integrity and innovation constitute the foundation on which the
edifice of the organization is built. Your Company firmly believes in the right of all its stakeholders to information
regarding Company’s business and financial performance.

Your Company continues to upgrade its management practices to conform to the norms of ideal corporate governance
at frequent intervals.

BOARD OF DIRECTORS

a) Composition of Board

The Company is managed by the Board of Directors with a Non-Executive Chairman, a Non-Executive Director,
an Alternate Director, an Executive Director and three eminently qualified Independent Directors.

b) Board Meetings

There were five Board Meetings during the year ended March 31, 2010. These were on May 29, 2009, July 29,
2009, September 22, 2009, October 29, 2009 and January 31, 2010 and the maximum interval between any
two meetings was not more than 4 months.

All the Board Meetings are scheduled well in advance and the notice of each Board Meeting is given in writing
and through e-mail to each Director. All the items in the agenda are accompanied by notes giving comprehensive
information on the related subject and in certain matters such as financial/business plans, financial results,
detailed presentations are made. The agenda and the relevant notes are sent in advance separately to each
Director. A Board member is also free to recommend the inclusion of any matter for discussion in consultation
with the Chairman.

To enable the Board to discharge its responsibilities effectively, the members of the Board are briefed at every
Board Meeting, on the overall performance of the Company, with detailed presentations by functional heads.

The Board’s role, functions, responsibility and accountability are clearly defined, in addition to matters statutorily
requiring Board’s approval, all major decisions involving policy formulation, strategy and business plans,
annual operating and capital expenditure budgets, new investments, compliance with statutory/regulatory
requirements, major accounting provisions and write-offs are considered by the Board. The minutes of the
Board Meeting are circulated in advance to all Directors and confirmed at the subsequent Meeting.

17 26TH ANNUAL REPORT 2009-10

 CORPORATE GOVERNANCE REPORT

c) Directors attendance record & directorships held

Sr. Name of the Category Of Attendance Attendance No. of other No. of other
No. Director Directorship in Board at last AGM Directorships# Committee
Meetings held on as on positions
during 27.08.09 31.03.2010 held as on
2009-10 31.03.2010
(Other
Companies)
(1) (2) (3) (4) (5) (6) (7)

1. Mr. Ashok Vasudevan N.E.D. 3 Yes 3 NIL

2. Mrs. Meera Vasudevan N.E.D. 2 No 4 NIL
3. Mr. Ravi Nigam E.D. 5 Yes 3 NIL
4. Mr. K. P. Balasubramaniam I.D. 3 No 5 1 (Member)
5. Dr. V. S. Arunachalam I.D. 4 No 1 NIL
6. Mr. Sohel Shikari* A.D. 3 Yes 3 NIL
7. Mr. Kavas Patel I.D. 4 Yes 7 3 (Chairman)

NED – Non-Executive Director, ED – Executive Director, AD – Alternate Director I.D. – Independent Director

Mrs. Meera Vasudevan is wife of Mr. Ashok Vasudevan.

*Mr. Sohel Shikari is an Alternate Director to Mrs. Meera Vasudevan.

# including Private Limited companies and excluding foreign companies.

Details of the Directors seeking appointment/reappointment at the AGM pursuant to Clause 49 of the Listing
Agreement have been given with the notice of Annual General Meeting.

COMMITTEES OF THE BOARD

a) AUDIT COMMITTEE

The Audit Committee consists of four members, three being Independent Non-Executive Directors and one Executive
Director. All the members of the Audit Committee have adequate accounting and financial knowledge.

The constitution of the Committee & the attendance by the Committee members are as follows:
Name of the Director Position Independent/ No. of Meetings
Executive Held Attended
Mr. K. P. Balasubramaniam Chairman Independent 4 3

Dr. V.S.Arunachalam Member Independent 4 4

Mr. Ravi Nigam Member Executive 4 4

Mr. Kavas Patel Member Independent 4 3

The Group C.F.O., Internal Auditors and Statutory Auditors are invited to attend the meetings. Company Secretary
of the Company acts as the Secretary of the Committee.

All Members of the Committee have wide exposure and possess sound knowledge in the areas of accounts,
finance, business and internal control. The composition of the Committee is in conformity with the Clause 49 (II) of
the Listing Agreement.

18
 CORPORATE GOVERNANCE REPORT

Terms of reference:

The powers, duties and terms of reference of the Committee are as mentioned in Clause 49 of the Listing Agreement
with the Bombay Stock Exchange Limited and Section 292A of the Companies Act, 1956 which are:

(a) Overseeing the Company’s financial reporting process and disclosure of its financial information to ensure
that the financial statement is correct, adequate and credible.
(b) Recommend the appointment and removal of external auditors, and fixation of audit fees and charges for other
services.
(c) Review the quarterly, half yearly and annual financial statements before submission to the Board or to the
Members.
(d) Review the adequacy and quality of internal control systems.
(e) Review and comment on draft audit report / Report to management & qualifications.
(f) Review any change in Accounting Policies and practices.
(g) Compliance with stock exchange – listing requirements.
(h) Compliance with other Corporate and Foreign Exchange laws vis-à-vis remittances made & received.
(i) Discussion with external auditors on the nature, time period and scope of the audit and post-audit review on
any areas of concern.
(j) Reviewing the Company’s financial and risk management policies.
(k) Look into reasons for defaults, if any, in the payment to creditors/ suppliers/government.
(l) Look into reasons for defaults by Company’s customers, dealers, distributors & credit days’ control.
(m) In addition to the above, all items listed in clause 49(II)(D) of the Listing Agreement.

The minutes of the Audit Committee Meeting(s) are noted by the Board of Directors at subsequent Board Meeting(s).

b) SHAREHOLDERS’ GRIEVANCE COMMITTEE

The Shareholders’ Grievance Committee of the Board was constituted on May 25, 2002 to look into the redressal
of shareholder complaints like share transfers, non-receipt of Annual Reports, issue of duplicate shares etc. The
Committee comprised of:

Mr. Ashok Vasudevan Chairman Non-Executive Director

Mr. Sohel Shikari Member Alternate Director
Mr. Ravi Nigam Member Executive Director

The Compliance Officer is Mr. Prasad Nadkarni, Company Secretary.

The Board at its meeting held on May 30, 2010 has reconstituted the Shareholders’ Grievance Committee as follows:

Mr. K. P. Balasubramaniam Chairman Independent Director

Dr. V.S.Arunachalam Member Independent Director

Mr. Kavas Patel Member Independent Director

At the beginning of the year under review, there were no complaints that were unresolved. During the year, the
Company has received 4 (four) complaints which were resolved & no complaint is pending as on March 31, 2010.

19 26TH ANNUAL REPORT 2009-10

 CORPORATE GOVERNANCE REPORT

DETAILS OF REMUNERATION OF THE BOARD OF DIRECTORS

All decisions related to the remuneration of the Directors, both Executive & Non Executive are decided by the
Board of Directors of the Company in accordance with the shareholders approval, wherever necessary. Details of
remuneration paid to the Executive & Non Executive Directors for the year 2009-10 are as follows:

a) Non Executive Directors

Name of the Director No. of Sitting Professional Total

Tasty Bite’s fees (Rs.) fees (Rs.) (Rs.)
Shares held

Mr. Ashok Vasudevan — — — —

Mrs. Meera Vasudevan — — — —
Mr. K. P. Balasubramaniam *1500 15,000 60,000 75,000
Dr. V.S.Arunachalam NIL 20,000 80,000 1,00,000
Mr. Kavas Patel NIL 20,000 80,000 1,00,000

* Jointly

The Board at its meeting held on May 30, 2010 has revised the sitting fees paid to the Independent Directors as
follows (for each meeting attended):
Board Meeting (Rs.) 20,000
Audit Committee Meeting (Rs.) 20,000
Shareholder’s Grievance Committee (Rs.) 10,000

b) Whole Time Directors : Mr. Ravi Nigam & Mr. Sohel Shikari :-

Salary (Rs.) 65,37,875

Benefits (Rs.) -
Performance linked Incentive /
Commission /Bonus (Rs.) NIL

Notes:
1. The agreement with Mr. Ravi Nigam, Managing Director is for a period of five years. The Company or the
Managing Director shall be entitled to terminate the agreement at any time by giving “Three months” advance
notice in writing in that behalf to the other party .
2. Salary includes allowances. No commission or performance bonus has been paid to the directors.
3. No stock option scheme has been launched by the Company till now.
c) Remuneration Policy:
The Board of Directors has fixed the remuneration of the Whole-time Director, subject to the approval of the
shareholders. The remuneration is fixed considering various factors such as qualification, experience, expertise,
prevailing remuneration in the corporate world, financial position of the Company etc. The remuneration structure
comprises basic salary, perquisites and allowances, contribution to provident fund and other funds in accordance
with Sections 198 & 309 of the Companies Act, 1956. The non-executive directors do not draw any remuneration
from the Company except sitting fees for each meeting of the Board & professional fees by Independent
Directors.

20
 CORPORATE GOVERNANCE REPORT

CODE OF CONDUCT

The Board of Directors of the Company has laid down a Code of Conduct for all its Members and Managerial personnel
in line with the industry practice and all the members of the Board & the Managerial personnel of the Company have
confirmed compliance with the Code of Conduct for the year under review, as adopted by the Company. The confirmation
from the Managing Director regarding the compliance with the Code by all the Directors & Senior Management is
annexed to the Report.
GENERAL BODY MEETINGS
Details of the last three Annual General Meeting are as follows

Financial year Date & Time Venue Special Resolution

ended
2008-09 27th Aug 09, 11.00 a.m. Registered Office None
2007-08 22nd Aug 08, 10.30 am Registered Office Extension of period of
Redemption of Redeemable
Preference Shares.
2006-07 14th Sept 07, 11:00 am Registered Office None

G The Registered Office of the Company is situated at 204, Mayfair Towers, Shivajinagar, Wakdewadi,
Mumbai-Pune Road, Pune- 411005.
G All resolutions moved at the last Annual General Meeting were passed by a show of hands by the Members
present at the meeting. During the previous year, the Company did not pass any special resolution through
postal ballot.
DISCLOSURES
1. The transactions with related parties do not have potential conflict with the interests of the Company at large.
A comprehensive list of related party transactions as required by the Accounting Standards (AS) 18 issued by
Institute of Chartered Accountants of India, forms part of Note No. 11 of Schedule 15 to the Accounts in the
Annual Report.
2. There has been no instance of non- compliance by the Company on any matter related to capital markets.
Hence the question of penalties or strictures being imposed by SEBI or the Stock exchanges or any other
statutory authority does not arise.
3. The Company has laid down procedures to inform Board members about the risk assessment and minimization
procedures. The Company has identified major and minor risks like market risk, fluctuation in foreign exchange,
interest rate, commodity (raw material etc.), price risks and packaging material prices and other business risks
and these risks are analyzed from time to time by the executive management team and reviewed by the Board.
4. There has been no public, rights or preferential issues of shares and debentures during the year.
5. As required by Clause 49 of the Listing Agreement, the Company has obtained a certificate from Practising
Company Secretary regarding compliance of conditions of Corporate Governance. The certificate is given as
an annexure to the Directors’ Report.
The Company has complied with all the mandatory requirements of the Listing Agreement. The extent of
adoption of non- mandatory requirements is given below:
Whistle Blower Policy
G Your Company has adopted and circulated whistle blower policy to provide necessary forum to raise any
corporate governance issue to the management. This policy encourages employees to communicate incidents
of any misuse of company’s properties, any mismanagement or wrongful conduct prevailing anywhere within
the organization

21 26TH ANNUAL REPORT 2009-10

 CORPORATE GOVERNANCE REPORT

G The quarterly un-audited results of the Company after being subjected to Limited Review by the Statutory
Auditors are published in newspapers and were also filed with the Electronic Data Information Filing and
Retrieval System at www.sebiedifar.nic.in as per the earlier requirement of Listing Agreement. These results
are not sent to shareholders individually.
G The Auditors have issued an unqualified report on the statutory financial statements of the Company.
G Training of Board Members/ Mechanism for evaluating non-executive directors.
All the non – executive directors have due qualifications, rich experience and expertise in their respective functional
areas. They attend various programmes in the personal capacities which keep them abreast of relevant developments.
There is no formal system of evaluating them.
MEANS OF COMMUNICATION
G The annual, half-yearly and quarterly results of the Company are published in national newspaper viz. Asian
Age and local newspaper viz. Punyanagari.
G These newspapers are selected on the basis of having reasonable circulation in the areas where majority of
our shareholders are located and also on the basis of cost effectiveness.
G The Company provides information to the Bombay Stock Exchange Limited as per the requirement of the
Listing Agreement.
G The Company does not have its own website. Quarterly results, official news releases are therefore not being posted.
G Management Discussion and Analysis forms part of this Annual Report.
GENERAL SHAREHOLDER INFORMATION
a) Annual General Meeting
- Date and Time : September 16, 2010 at 3.00 p.m.
- Venue : Hotel Le Meridien Pune, RBM Road, Pune 411 001.
b) Financial Calendar
Financial reporting for
- the quarter ending June 30, 2010 : Second week of August, 2010
- the half year ending September 30, 2010 : Second week of November, 2010
- the quarter ending December 31, 2010 : Second week of February, 2011
- year ending March 31, 2011 : Last week of May, 2011
Annual General Meeting for the year
ending March 31, 2011 : September, 2011
c) Financial Year : April 1 to March 31
d) Dates of Book Closure : September 9, 2010 to September 16, 2010
(Both days inclusive)
e) Dividend Payment : Re. 1 per each equity share of Rs. 10
f) Listing on Stock Exchange : Bombay Stock Exchange Ltd (BSE)
Code : 519091
ISIN: INE 488B01017
Group : B
g) Registrar & Shares Transfer Agent : M/s. Karvy Computershare Pvt. Ltd.
“Karvy House”, 46, Avenue 4, Street no.1
Banjara Hills, Hyderabad – 500034
Ph: 040-23312454
e-mail: mahendra.singh@karvy.com

22
 CORPORATE GOVERNANCE REPORT

h) Stock Market data

The Market Price and Volume of the Company’s Equity Shares traded on the Bombay Stock Exchange Limited;
Mumbai during the year 2009-10 is as follows:

Month High (Rs.) Low (Rs.) Volume (Nos.) Spread (Rs.) H-L
April 09 21.75 16.55 5,242 5.20
May 09 26.00 20.00 4,729 6.00
June 09 52.70 27.30 53,969 25.40
July 09 97.35 52.20 148,273 45.15
Aug 09 97.00 78.00 60,932 19.00
Sept 09 90.00 77.20 31,459 12.80
Oct 09 94.35 75.20 28,157 19.15
Nov 09 164.55 90.00 1,27,896 74.55
Dec 09 190.30 146.10 1,08,094 44.20
Jan 10 172.85 134.00 24,930 38.85
Feb 10 190.00 145.70 87,299 44.30
Mar 10 184.50 164.50 1,40,672 20.00

Note: The above data has been downloaded from the official website of the Bombay Stock Exchange Limited.
Stock performance Vs BSE Sensex :

BSE SENSEX V/S TBEL SHARE PRICE

20,000 190
180
170
B SE SENSEX (PO IN TS)

17,000 160
150
140
14,000 130
120
110
11,000 100
90
80
8,000 70
60
50
5,000 40
30
20
2,000 10
Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar-
09 09 09 09 09 09 09 09 09 10 10 10
MONTHS
Sensex TBEL (Rs)

The graph relates to the monthly closing price/ indices

i) Share Transfer System
In respect of transfer of shares, shareholders are advised to contact M/s. Karvy Computershare Pvt. Ltd. directly.
Every effort is made to clear share transfers/transmissions and split/consolidation requests within 15 days. Requests
for issue of duplicate share certificates are normally cleared within 25 days, subject to the documents being
complete in all respects.

23 26TH ANNUAL REPORT 2009-10

 CORPORATE GOVERNANCE REPORT

Secretarial Audit Report

The Securities and Exchange Board of India (SEBI) has, vide its circular dated December 31, 2002, made it
mandatory for listed companies to subject themselves to secretarial audit to, inter alia, confirm that the total of the
shares held in National Securities Depository Limited (NSDL), Central Depository Services Limited (CDSL) and in
physical form tally with the issued / paid up capital listed with the Stock Exchanges. This audit is carried out every
quarter and the report thereon is submitted to the Stock Exchange and is placed before the Board of Directors.

j) Distribution of Shareholding as on March 31, 2010

As of March 31, 2010, the distribution of the Company’s shareholding was as follows :

Category (Amount) No. of Cases % of Cases Total Shares Amount(Rs.) % to Equity

1 - 5000 1497 91.22 % 207724 2077240 8.10 %

5001 - 10000 69 4.20 % 53745 537450 2.09 %
10001 - 20000 34 2.07 % 51473 514730 2.00 %
20001 - 30000 10 10.61 % 26082 260820 1.02 %
30001 - 40000 8 0.49 % 28281 282810 1.10 %
40001 - 50000 7 0.43 % 33772 337720 1.31 %
50001 - 100000 8 0.49 % 57246 572460 2.23 %
100001 & Above 8 0.49 % 2107677 21076770 82.14 %
Total 1641 100% 2566000 25660000 100%

k) Shareholding Pattern as on March 31, 2010

Category No. of Holders Total Shares % to Equity

PROMOTERS 3 1904510 74.22%
RESIDENT INDIVIDUALS 1546 524821 20.45%
BODIES CORPORATES 64 127965 4.99%
HUF 17 4269 0.17%
NRI 6 284 0.01%
CLEARING MEMBERS 5 4151 0.16%
Total 1641 2566000 100.00%

PRO PUB LTD HUF NRI Clearing Members

24
 CORPORATE GOVERNANCE REPORT

l) Dematerialization of shares and liquidity as on March 31, 2010

Description No. of Total % to

cases Shares equity

Physical 821 2071011 80.71%

NSDL 596 388184 15.13%

CDSL 224 106805 4.16%

Total 1641 2566000 100%

Physical NSDL CDSL

m) Outstanding GDR/ADR/Warrants or any

convertible instruments : Not Applicable
n) Factory Location : Bhandgaon & Khutbao Villages, Taluka – Daund,
Dist - Pune - 412214, Maharashtra.
o) Investors Correspondence : Prasad Nadkarni / Anuja Laturkar w.e.f. August 11, 2010
Company Secretary
204, Mayfair Towers, Wakdewadi,
Shivajinagar, Pune - 411005
Ph: 91-020-2551 0685
Fax: 91-020-2551 2695
prasad.nadkarni@tastybite.com
anuja@tastybite.com

25 26TH ANNUAL REPORT 2009-10

 CORPORATE GOVERNANCE REPORT

Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certification

To the Board of Directors of

Tasty Bite Eatables Limited
We certify to the Board that:
(a) We have reviewed financial statements and the cash flow statement for the year 2009-10 and that to the best
of our knowledge and belief:
(i) these statements do not contain any materially untrue statement or omit any material fact or contain
statements that might be misleading;
(ii) these statements together present a true and fair view of the Company’s affairs and are in compliance
with existing accounting standards, applicable laws and regulations;
(b) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the
year which are fraudulent, illegal or violative of the Company’s Code of Conduct.
(c) We accept responsibility for establishing and maintaining internal controls for financial reporting and that we
have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting
and have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of such
internal controls, if any, and the steps they have taken or propose to take to rectify these deficiencies.
(d) We have indicated to the Auditors and the Audit committee
(i) significant changes in internal control over financial reporting during the year;
(ii) significant changes in accounting policies during the year and that the same have been disclosed in the
notes to the financial statements; and
(iii) instances of significant fraud of which we have become aware and the involvement therein, if any, of the
management or an employee having a significant role in the Company’s internal control system over
financial reporting.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
OF TASTY BITE EATABLES LIMITED

Place : Bengaluru Ravi Nigam Sohel Shikari

Date : May 30, 2010 Managing Director CFO

Certificate for compliance with Code of Conduct

I, confirm that all Directors & Members of the Senior Management have affirmed compliance with the Code of Conduct.

Ravi Nigam
Managing Director

Place : Bengaluru
Date : May 30, 2010

26
 MANAGEMENT DISCUSSION AND ANALYSIS
The financial statements have been prepared in compliance with the requirements of the Companies Act, 1956,
guidelines issued by the Securities and Exchange Board of India (SEBI) and Generally Accepted Accounting
Principles (GAAP) in India. The Company’s Management accepts responsibility for the integrity and objectivity of
these financial statements as well as for various estimates and judgments used therein. The estimates and judgments
relating to the financial statements have been made on a prudent and reasonable basis, so that the financial
statements reflect in a true and fair manner, the Balance Sheet as on March 31, 2010, the Profits and Cash Flows
for the Financial Year 2009-10.
A. INDUSTRY STRUCTURE AND DEVELOPMENTS
Tasty Bite Eatables Limited (TBEL) manufactures and markets “Tasty Bite,” brand of a range of shelf stable, all-
natural, ready-to-serve (RTS) ethnic food products. As a brand, Tasty Bite is the No. 1 brand in the ethnic dishes,
entrées and mixes category in the United States and commands a leading share (more than 50% in conventional
supermarkets)1. Aside from the US, Tasty Bite is marketed in several countries globally. In India, the Company also
develops and manufactures a range of products for institutional users such as hotels, quick-service restaurants
and other retail and corporate customers.
There are three major global food trends that drive the growth of the Company’s revenues in its international
markets. Consumers are seeking foods that are natural (those that contain no preservatives and chemical additives).
This industry is over $60 billion in size and is growing at 12% per annum. The second big trend is the growth of
convenience foods. Consumers have reduced the time to prepare foods by using ready-to-eat products to prepare
meals. This segment of the US supermarket is $40 billion in size and also growing at approximately 12% per
annum. Finally, the third big mega-trend is the growth of international cuisines also called specialty foods. Cuisines
such as Indian and pan-Asian are growing in demand and growing at more than 30% per annum in US grocery.
Tasty Bite occupies the ‘sweet spot’ across these three industry mega-trends.
The Company’s Mission Statement reads:
Be a values driven Company that will make Tasty Bite a house hold name by
Manufacturing & marketing Natural, Convenient, Specialty Foods that will offer consumers
Great Taste, Good Value and a Range of cuisine achieved through
Product Innovation, Low cost manufacturing, Versatility, Vertical integration and Customer Partnerships
In a Knowledge driven, Energetic and Fun work environment.
We continue to be committed to this mission and build upon the five areas that are and continue to be areas of
competitive advantage to the Company.
All key management functional areas have developed their independent mission statements that are aligned with
the Company’s mission statement and a balanced score card methodology is being used to align key decision
making in the context of the mission statement.
The Balanced Scorecard approach has allowed focus on key measurement criteria and is a much focused method
of looking at individual and group performance. We believe that in the years to come, this will significantly enhance
performance all across the Company.
Results of this focused strategy have yielded results with a top line growth of around 56.37% in FY10.
TBEL manufacturers the products in a world-class, versatile manufacturing facility located near Pune, India. The
versatility of the plant encompasses manufacture of products in multiple formats (shelf-stable, frozen), multiple packaging
(pouches, trays), multiple cuisines and multiple pack sizes. The Company prides itself of its quality and has constantly
endeavored to set industry standards of quality assurance. The Tasty Bite factory has a capacity to manufacture over
60,000 meals per day on a two shift basis in addition to manufacturing prepared frozen formed products.
1
SPINS scan data for the year ending December 29, 2008
1
SPINSscan data for year ending December 29, 2008

27 26TH ANNUAL REPORT 2009-10

 MANAGEMENT DISCUSSION AND ANALYSIS

TBEL recognizes that the core competence of the organization is in the manufacturing of ready-to-eat (RTS) and
formed frozen products. It has begun a strategic outsourcing program to source several of its ingredients in a value-
added form such as frozen vegetables and intermediate pastes. This will enable effective utilization of the Company’s
assets.

The engine of growth of the Company has really been its ability to bring innovative products in a timely manner to
its customers. The Tasty Bite Research Center (TBRC) has a team of skilled professionals who drive the development
of new recipes, product forms, new formulations etc. all with a single-minded focus of delivering on the Company’s
promise to bring consumers great taste, good value and a range of cuisine. Aside from in-house professionals,
TBRC works closely with food and technology experts across the globe to understand new technologies and
explore various options to add value to its product portfolio. Product innovation is seen as the key differentiator in
the Company’s strategy and will be the factor that will provide sustained competitive advantage to it in the future.

The Company has been recognized for its export performance and is currently certified as an Export House.

B. FINANCIAL PERFORMANCE

RESULTS OF OPERATIONS

Some salient features of the Company’s financial performance in fiscal FY10 (2009-10) are:

G Gross Revenues have grown 56.37% to Rs. 72.44 Crores in FY10 up from Rs. 46.33 Crores in FY09.
G Export Sales have grown 57.07% to Rs. 56.56 Crores in FY10 up from Rs. 36.01 Crores in FY09.
G The Company has reported earnings before interest, taxes, depreciation and amortization (EBITDA) of
Rs. 10.74 Crores in FY10 as against Rs. 7.4 Crores in FY09.
G Profit after-tax for the year increased 394% over the previous financial (Rs. 6.97 Crores in FY10 against
Rs. 1.41 Crores in FY09).

The Company’s overall turnover continues to grow at a CAGR of 28.2%.

Revenue
80
72.44
Rs. in Crores

60
46.4
40 36.99
26.83 30.75
20
0
2005-06 2006-07 2007-08 2008-09 2009-10

Years
Rs. in Crores

28
 MANAGEMENT DISCUSSION AND ANALYSIS

Revenue Analysis

Revenue break-up across key business divisions for the financial year ended March 31, 2010 and 2009 is given
below:

Particulars (Rs. in Crores) 2009-10 2008-09 % Growth

Export Sales & Incentives 61.07 39.15 55.99%

Domestic Sales 10.78 6.33 70.30%
Processing Income and Rentals 0.06 0.30 -80.00%
Other Income 0.53 0.55 -3.64%
Total Revenues 72.44 46.33 56.36%

TBEL achieved revenues of Rs. 72.44 Crores in FY10, a growth of 56.37% over FY09 revenues of Rs. 46.33 Crores.
Export revenues including export related incentives grew 56% to Rs. 61.07 Crores in FY10 (Rs. 39.15 Crores in
FY09). Volume growth in sales was 60.78% over FY09 primarily driven by export sales to USA and Australia and an
increase in the India institutional business by over 70%.

Export revenues come mainly from the sale of ready-to-eat meals in consumer branded packs, which continues to
remain the key product line of the Company. These retail packs are exported and distributed to consumers through
mainstream supermarkets and grocery stores in the US, Canada, Australia and other global markets. Exports
including incentives comprise the bulk of the revenues and contribute over 84% of the Company’s revenues.

Growth of export sales over the past 5 years is summarized in the chart below. These have grown at an annual
compounded growth rate of 24.46%.

Export Rs. in crores

60 56.56
50
40 36
R eve nue

26.78 29.68
30 23.57
20
10
0
2005-06 2006-07 2007-08 2008-09 2009-10
Year
Export Rs. in crores

Institutional sales grew 70.30% in FY10 to reach Rs. 10.78 Crores as compared to Rs. 6.33 Crores in FY09. The
bulk of the domestic sales is from the sale to quick service restaurants. Therefore, the sales growth in domestic
sales is linked to the growth of the number of their outlets in India where our product is sold.

29 26TH ANNUAL REPORT 2009-10

 MANAGEMENT DISCUSSION AND ANALYSIS

In line with the strategy to focus on providing food solutions, the Company has decided to discontinue processing
of frozen vegetables for third parties and renting out its cold storage. It is utilizing these assets for its own branded
and institutional products business. Therefore, the operational income, which mainly includes export incentives
grew only 32.50% in FY10 (Rs. 4.57 Crores compared to Rs. 3.45 Crores). Export incentives schemes which
include duty drawback and the Vishesh Krishi and Gram Udyog Yojana (VKGUY) grew 43.4% in FY10 which is
primarily attributable to growth in export sales.
EXPENDITURE ANALYSIS
Cost of Goods Analysis
Raw and packing material costs as a percentage of sales were at 60.73% in FY10 compared to 56% in FY09. The
increase in these costs are on account of the inflation seen across all ingredients used for the manufacture of our
products.
The Company buys a bulk of its raw materials such as vegetables and pulses from mandis and traders. The
Company is exposed to variations in prices of raw vegetables such as onions, tomatoes, spinach, potatoes etc,
and price escalation of the same has an impact on the gross margins of the business.
Particulars of Material consumption during the year
(Rs. in Crores)
Particulars 2009-10 2008-09
Sales 67.70 42.34
Material Consumed 40.91 23.72
% COGS 60.73% 56%

Manufacturing and Other Expenses

The Company has initiated various projects of modernization and improvement of the manufacturing facility in order
to increase productivity and capacity.
G Power and fuel costs have reduced to 1.9% of sales in FY10 compared to 2.3% in the previous financial.
G Stores and spares consumed decreased to 2.88% of sales in FY10 compared with 3.24% in FY09.
G Payroll expenses including salaries, wages, bonus and gratuity expenses have reduced to 12% of sales in
FY10 compared to 13% in FY09.
G Repairs and maintenance costs have increased to Rs. 0.96 crores in FY10 compared to Rs. 0.36 crores in
FY09. This primarily relates to expenses to improve plant GMP and consequential manufacturing efficiencies.
Export freight as a percentage of export sales is 7.35% in FY10 as compared to 8.88% in FY09. Cargo freight rates
have seen a decline during FY10 given the global recessionary environment which has impacted the shipping trade
and providing attractive ocean freight rates between India and the Company’s major export markets, namely the US
and Australia.
Foreign Exchange Transactions
The Company booked a total gain on account of various foreign exchange contracts and mark-to-market position of
its foreign assets and liabilities of Rs. 3.07 Crores. Of this, gain of Rs. 0.25 Crores was on account of the mark-to-
market of its USD external commercial borrowing from its parent company, Preferred Brands International, the total
balance which is outstanding as on March 31, 2010 of US$ 1,800,000.
The Company continues to hedge its exposure to foreign exchange risk and by taking forward contracts covers its
existing and projected export sales.
As on March 31, 2010, Company’s outstanding forward contracts for the purpose of hedging its exposure to foreign
currency receivables US$ 5,100,000 and AUD 300,000.

30
 MANAGEMENT DISCUSSION AND ANALYSIS

EBITDA
Operating EBITDA of the Company came to Rs. 10.74 Crores in FY09 (14.82%) compared to Rs. 7.4 Crores in
FY09. This growth of 45% has been on the back of strong growth in revenues in FY10 versus FY09.
Finance Costs
Financial expenses have remained constant between FY10 and FY09 at approximately Rs. 0.99 crores. As on
March 31, 2010, total limits utilized from Axis Bank for working capital stood at Rs. 6.4 Crores compared to Rs. 2.3
Crores as on March 31, 2009. Interest costs as a percentage of revenues stood at 1.37% in FY10 compared to
2.10% in FY09. Interest coverage ratio stood at 10.79 times in FY10 compared to 3.47 times in FY09.
Depreciation and Amortization
Depreciation increased to Rs. 1.53 Crores in FY10 compared to Rs. 0.99 Crores in FY09. This is on account of
capitalization of a few additional assets in FY10 and depreciating the plant on a three-shift basis for the second half
of FY10 since the plant had been running on a three shift basis during that period.
PROFITS
Net profit of TBEL stood at Rs. 6.97 Crores (9.62% of the total revenues) in FY10 compared to Rs. 1.41 Crores
(3.04% of the total revenues) in FY09, a growth of 395%.
BALANCE SHEET ANALYSIS
Share Capital
There is only one class of equity shares having a face value of Rs. 10 each. Currently, the Company has a total of
2,566,000 Equity Shares issued and fully paid up.
The Company, also, has 59,530 Preference Shares of face value of Rs. 100 each (1% Non-Cumulative Non-
Convertible Redeemable) which were due for redemption on August 31, 2008 at their issued premium of Rs. 1950
per preference share. The Shareholders approved extension for redemption for a maximum period of 20 years from
the date of issue of these shares (31.10.1998). Preferred Brands Foods (India) Limited will have the right to demand
redemption at any time on these preference shares by giving a 90-day notice in writing to the Company.
Fixed Assets
The Company added Plant and Machinery, Computers and Office Equipment worth Rs. 4.30 Crores during the
financial year as part of the modernisation & expansion of the manufacturing facility. The total gross block of the
Company as on March 31, 2010 is Rs. 24.9 crores.
Provisions
As per accounting standards relating to employee benefit, a provision of Rs. 0.24 Crores against leave encashment
and Rs. 0.15 Crores against gratuity existed on the financials as of March 31, 2010. The Company has also
created a Tasty Bite Employees Gratuity Trust in which it has funded Rs. 10 lacs during the financial year.

31 26TH ANNUAL REPORT 2009-10

 MANAGEMENT DISCUSSION AND ANALYSIS

Ratio Analysis

Ratio Analysis FY 10 FY 09 FY 08

Ratios - Financial Performance

Export Sales/Total Sales (%) 83.99% 85.05% 83.80%
Domestic Revenue/Total Sales (%) 14.88% 14.95% 16.20%
GrossProfit /Total Revenue (%) 43.35% 48.79% 53.30%
Aggregate Employee Cost /Total Revenue (%) 11.35% 12.70% 14.40%
Earnings before Depreciation, interest and taxes / Total Revenue (%) 14.82% 9.26% 8.60%
Depreciation / Total Revenue (%) 2.10% 2.14% 2.30%
Interest / Total Revenue (%) 1.37% 2.10% 1.90%
Profit Before Tax / Total Revenue (%) 15.58% 5.02% 4.30%
Profit After Tax / Total Revenue (%) 9.62% 3.04% 3.20%

Ratio – Balance Sheet

Debt - Equity Ratio 0.70 0.56 0.42
Current Ratio 2.38 2.58 2.10
Days Accounts Receivables 70 72 72
Days Inventory 41 36 47
Days Accounts Payable 42 65 71

Ratios – Return
ROCE (PBIT / capital employed) (%) 33.68% 13.13% 11.80%
Return on average invested capital (%) 38.33% 9.97% 5.80%
Capital Output ratio 0.50 0.57 0.55

Ratios – Per Share

Basic EPS (Rs.) 27.13 5.50 4.60
Book value (Rs.) 36.27 10.31 1.20
Price, end of year (Rs.) 166.00 16.50 38.80
Price / Earnings, end of year (Rs.) 6.12 3.00 8.50
Market capitalization / Total Revenue, end of year 0.59 0.09 0.27

C. OPPORTUNITIES AND THREATS

The international market for convenient, natural and specialty foods especially in the Indian and Thai category
continued to see robust growth in FY10. The Tasty Bite brand occupies a 74% market share in natural supermarkets
and a 54% market share in the mainstream grocery markets. We believe that consumer trends will continue to
drive growth at robust rates in all our export markets.

The institutional business for the Company in India has also grown aggressively achieving more than 70% growth
over the previous financial year. The increase in quick-service restaurants and the product offering new category
enabled the Company to grow in this segment.

32
 MANAGEMENT DISCUSSION AND ANALYSIS

Going forward, growth in revenue will continue to be driven by increasing width of distribution in key markets,
increased product offering allowing for new uses of the Company’s products as well as increasing frequency of
usage.

In the Indian market, your Company will continue to add on its existing base of customers and products focused on
the food service industry. The Company will forge strong customer partnerships with leading players in the quick-
service restaurant and other food companies in India to grow this segment.

D. RISKS, CONCERNS & RISK MITIGATION

A large part of our revenues come from the US market. Economic slowdown or factors that impact the economic
health of this economy has the potential to negatively impact our growth.

Since, a large part of our Company’s revenues comes from export (and our price to our customers is pegged in
foreign currency), the volatility of the Indian rupee vis-à-vis the US dollar and Australian dollar will have an impact on
the revenues and profitability of the business. Appreciation of the Indian rupee vis-à-vis these currencies will have a
negative impact to the Company’s bottom line. The Company hedges its foreign exchange risk using forward
contracts. The Company also has a partial hedge against currency risks because of its use of certain raw and
packaging materials that are imported and priced in US dollars.

The past year has seen a significant increase in many agricultural commodities such as vegetable oil, rice, wheat
and milk products. The Company has entered into short term Rate contracts for some of the key raw materials. The
cold store facility at the factory enables to procure and store vegetables in season in order to manage these costs.

The Company exported by sea to various global markets & any change in oil costs or supply and demand can lead
to increased shipping costs which would have an impact on our margins. In FY10, the average cost of rate had been
at low levels.

In the consumer business there are no minimum purchase commitments or contracts with customers. The growth
is dependent upon the market demand for these kinds of products and our ability to deliver great tasting products
at globally competitive prices. The Company understands that consistent deliverance of “great” taste will ensure
global competitiveness.

As the Company’s revenues are dependent upon a few markets and within that to a limited number of customers
(retailers, distributors and corporates), the growth is also linked to customers’ growth in the markets they operate
in.

E. HUMAN RESOURCES, INDUSTRIAL RELATIONS, SAFETY AND ENVIRONMENT

Human Resources and Industrial Relations

The Company strives in its HR initiatives to be an engine for instituting value and a performance driven
culture in a Transparent, Energetic and fun work environment.

Tasty Bite believes in achieving organizational excellence through Human Resources. It follows ‘People first’ approach
to leverage the potential of its 148 employees. Professional training programs, recognition systems and skill
enhancement initiatives make Tasty Bite a learning Organization and one of the Great Places to Work for in India.
The Company has been ranked as 83 in “India’s Best Companies to work for” in India in 2010 study done jointly by
the Economic Times of India and Great Places to Work Institute, India.

33 26TH ANNUAL REPORT 2009-10

 MANAGEMENT DISCUSSION AND ANALYSIS

We are proud of this recognition and delighted to know that the Tasty Bite family has built such a “Great Place to
Work At”.

The Company’s success lies in its ability to attract hire and retain qualified and motivated people in all functional
areas. The selection process is based on a combination of education, experience and expertise. Given the growth
in industry, in general and the emergence of several competitors who have recently entered this area, the challenge
of hiring and retaining quality talent continuous to remain large.

Our program to provide a matching education grant for children of the factory employees is going successfully.

Industrial relations at the plant continued to be cordial and the committed efforts of the team and the sustained
motivation of the employees has resulted in the Company posting significant productivity gains and achieving
several production records.

The management records its sincere appreciation of the efforts of all its employees.

Quality

The Company’s stated mission for quality is to “rise beyond certifications”. The Company continues to be
certified for the following certifications:

G ISO-9001:2000, HACCP (Hazard Analysis & Critical Control Points);

G ISO-14001:2004 ( Environmental Management Systems);
G ISO 22000:2005 (Integrated Food Safety) ;
G OHSAS 18001:2007 (Occupational Health and Safety Management System)
G BRC January 2008 (British Retail Consortium).

The Company continues the CT-PAT (Customs Trade Partnership against Terrorism) advantage for exports - without
too much delay or inspections into the United States of America.

Environment

The Company is certified for Environmental Management Systems (ISO-14001) and the management and employees
continue to be deeply committed towards doing our little bit to preserve the environment. We believe it also often
makes business sense.

We recognize that by nature, the food processing industry is a prodigious consumer of water, another increasingly
scarce resource. We have invested a lot of resources in effluent treatment through biological intervention rather
than polluting chemicals. More importantly, the effluent treatment plant becomes a valuable source of irrigation
allowing us to recycle water to our agricultural farm where we grow vegetables and herbs that are important raw
materials in our processing plant.

F. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Tasty Bite Eatables Limited has in place adequate systems and processes for internal controls to provide reasonable
assurance with regard to information and maintenance of proper accounting records, reliability of financial information,
and efficient utilization of the Company’s resources and safeguarding of assets.

34
 MANAGEMENT DISCUSSION AND ANALYSIS

The Company has implemented a new ERP system integrating some of the critical operations.

The CEO and CFO certification provided in this report discusses the adequacy of the internal controls systems and
procedures.

G. CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis describing the Company’s objectives, projections,
estimates, expectations may be “forward-looking statements” within the meaning of applicable securities laws and
regulations. Actual results could differ materially from those expressed or implied. Important factors that could
make a difference to the Company’s results include, among others, economic conditions affecting demand /
supply, price conditions in the domestic and overseas markets in which the Company operates, competitive pressures
in these markets, changes in Government regulations, tax laws and other statutes and incidental factors.

35 26TH ANNUAL REPORT 2009-10

 AUDITORS’ REPORT
TO
THE MEMBERS OF TASTY BITE EATABLES LIMITED
1. We have audited the attached Balance Sheet of TASTY BITE EATABLES LIMITED as at March 31, 2010 and
also the Profit and Loss Account of the Company for the year ended as on that date annexed thereto and the
Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the
Company’s Management. Our responsibility is to express an opinion on these financial statements based on
our audit.
2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government of India in
terms of sub-section (4A) of section 227 of the Companies Act, 1956, we annex hereto 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:
a) We have obtained all the information and explanations which to the best of our knowledge and belief
were necessary for the purpose of our audit.
b) In our opinion, proper books of account as required by law, have been kept by the Company so far as
appears from our examination of these books.
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in
agreement with the books of account.
d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with
by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956.
e) On the basis of the written representations received from the Directors as on March 31, 2010 and taken
on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31,
2010, from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the
Companies Act, 1956.
f) In our opinion and to the best of our information and according to the explanations given to us, the said
accounts read with the notes thereon, give the information required by the Companies Act, 1956, in the
manner so required and give a true and fair view in conformity with the accounting principles generally
accepted in India:
i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010;
ii) in the case of the Profit and Loss Account, of the Profit of the Company for the year ended on that
date; and
iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on
that date.

For and on behalf of

Kalyaniwalla & Mistry
Chartered Accountants
(Firm Registration No.: 104607W)
Anil A. Kulkarni
Partner
Membership No.47576
Date : May 30, 2010
Place : Pune

36
 AUDITORS’ REPORT

ANNEXURE TO THE AUDITORS’ REPORT

Referred to in Paragraph (3) of our report of even date on the accounts of Tasty Bite Eatables Limited ended
March 31, 2010.
1) (i) The Company is maintaining proper records showing full particulars, including quantitative details and
situation of fixed assets.
(ii) As explained to us, the Company has a program for physical verification of fixed assets at periodic
intervals. In our opinion, the frequency of physical verification of fixed assets is reasonable having regard
to the size of the Company and the nature of its assets. As informed to us, no material discrepancies
were noticed on such verification and the same have been properly dealt with in the accounts.
(iii) In our opinion, there was no significant disposal of fixed assets during the year to affect the going
concern assumption.
2) (i) The Management has conducted physical verification of inventory at reasonable intervals. In our opinion,
the frequency of verification is reasonable.
(ii) In our opinion, the procedures of physical verification of inventories followed by the management are
reasonable and adequate in relation to the size of the Company and the nature of its business.
(iii) The Company is maintaining proper records of inventory. As informed to us, no material discrepancies
were noticed on verification between the physical stocks and the book records and the same have been
properly dealt with in the accounts.
3) (i) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties
listed in the register maintained under section 301 of the Companies Act, 1956.
(ii) The question of commenting on the rates of interest and other terms and conditions of the loans granted
being prejudicial to the interest of the Company, regular receipt of principal and interest and reasonable
steps taken for recovery of principal and interest does not arise.
(iii) There is no overdue amount of loans taken from, or granted to companies, firms, or other parties listed in
the register maintained under section 301 of the Companies Act, 1956.
(iv) The Company has taken loans from one party listed in the register maintained under section 301 of the
Companies Act, 1956. The total loan amount outstanding at the year end is Rs.80,954,460.
(v) In our opinion, the rate of interest and other terms and conditions of loans taken from Companies and
parties listed in the register maintained under Section 301 of the Companies Act, 1956 are not, prima
facie, prejudicial to the interest of the Company.
(vi) The Company is regular in repaying the principal amounts as stipulated and has also been regular in the
payment of interest.
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, for the
purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, no
major weakness has been noticed in the internal controls.
5) (i) Based upon the audit procedures applied by us and according to the information and explanations given
to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of
the Companies Act, 1956, have been entered in the register maintained under that section.
(ii) In our opinion and according to the information and explanations given to us, the transactions made in
pursuance of such contracts or arrangements entered in the register maintained under section 301 of the
Companies Act, 1956 and exceeding the value of Rs.5,00,000 in respect of any party during the year,
have been made at prices which are reasonable, having regard to prevailing market prices at the relevant
time.

37 26TH ANNUAL REPORT 2009-10

 AUDITORS’ REPORT

6) In our opinion and according to the information and explanations given to us, the Company has not accepted
any deposits from the public within the meaning of section 58A, 58AA, or any other relevant provisions of the
Companies Act, 1956 and the rules framed thereunder.
7) In our opinion, the Company has an internal audit system commensurate with the size of the Company and
nature of its business.
8) According to the information and explanations given to us, the maintenance of cost records has not been
prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956, for any of the
activities of the Company.
9) (i) According to the information and explanation given to us, the Company is regular in depositing undisputed
statutory dues including dues pertaining to Provident Fund, Employees’ State Insurance, Income-tax,
Value Added Tax, Customs Duty, Cess (except Cess under Section 441A of the Companies Act, 1956
since the aforesaid section has not yet been made effective by the Central Government) and any other
statutory dues with the appropriate authorities.
We have been also informed that there are no undisputed dues which have remained outstanding at the
end of the financial year for a period of more than six months from the date they became payable.
(ii) According to the information and explanations given to us, there are no dues of Sales Tax, Value Added
Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty or cess outstanding on account of any
dispute, other than the following:

Name of Statute Nature of Dues Amount (Rs.) Period to which Forum where
the amount relates dispute is pending

Employees' Dues and 1,09,33,763 1996-2007 Employees'

Provident Funds and Interest Provident Fund
Miscellaneous Tribunal
Provisions Act, 1952 Dues 4,30,191 1991-1997

Central Sales Tax Tax, Interest 7,88,036 1999-2000 Sales Tax Tribunal
Act, 1956 and Penalty

Bombay Sales Tax Interest 41,778 1999-2000 Sales Tax Tribunal

Act, 1959 and Penalty

Delhi Sales Tax Tax, Interest 48,702 2003-2004 Deputy

Act, 1975 and Penalty Commissioner
of Sales Tax (Appeal)

The Customs Tax Fine 9,50,000 1987-1988 High Court

Act, 1962 and Penalty

Of the above, the Company has deposited Rs.2,062,118 towards the Provident Fund dues, Rs.491,778 towards
Sales Tax.
Further, the Company has disputed certain disallowances under the Income Tax Act, 1961 for the years 2003-
2004, 2004-2005 and 2005-2006 before the Commissioner of Income Tax (Appeals). There is no demand for
these cases.
10) The Company has no accumulated losses as at the end of the financial year. Further, it has not incurred any
cash losses in the current financial year and immediately preceding financial year.
11) According to the information and explanations given to us and based on the documents and records produced
before us, there has been no default in repayment of dues to banks. There are no dues to financial institutions
or debenture holders.

38
 AUDITORS’ REPORT

12) According to the information and explanations given to us and based on the documents and records produced
before us, the Company has not granted any loans or advances on the basis of security by way of pledge of
shares, debentures or other securities.
13) In our opinion and according to the information and explanations given to us, the nature of activities of the
Company does not attract any special statute applicable to chit fund and nidhi / mutual benefit fund / societies.
14) The Company does not deal or trade in shares, securities, debentures and other investments.
15) According to the information and explanations given to us, the Company has not given any guarantee for loans
taken by others from banks or financial institutions.
16) In our opinion and according to the information and explanations given to us, the term loans obtained by the
Company were applied for the purpose for which the loans were obtained.
17) According to the information and explanations given to us and on an overall examination of the Balance Sheet,
Cash Flow Statement and other records examined by us, the Company has not used funds raised on short-
term basis for long-term investment.
18) The Company has not made any preferential allotment of shares to parties or companies covered in the
register maintained under section 301 of the Companies Act, 1956.
19) The Company did not issue any debentures during the year.
20) The Company has not raised any money through a public issue during the year.
21) According to the information and explanations given to us by the Management and to the best of our knowledge
and belief, no fraud on, or by the Company has been noticed or reported during the year.

For and on behalf of

KALYANIWALLA & MISTRY
CHARTERED ACCOUNTANTS
(Firm Registration No.: 104607W)

Anil A. Kulkarni
Partner
Membership No.: 47576
Date : May 30, 2010
Place : Pune

39 26TH ANNUAL REPORT 2009-10

BALANCE SHEET AS AT MARCH 31, 2010
Schedule Current Year Previous Year
Rs. ‘000 Rs. ‘000 Rs. ‘000
SOURCES OF FUNDS:
1. SHAREHOLDERS’ FUNDS
a) Share Capital 1 31,613 31,613
b) Reserves and Surplus 2 183,494 116,867
215,107 148,480
2. LOAN FUNDS
a) Secured Loans 3 149,678 106,993
b) Unsecured Loans 4 - 10,117
149,678 117,110
3. DEFERRED TAX LIABILITY 12,053 8,385
TOTAL 376,838 273,975
APPLICATION OF FUNDS:
4. FIXED ASSETS 5
a) Gross Block 248,773 208,624
b) Less: Depreciation 117,789 103,459
c) Net Block 130,984 105,165
d) Capital Work-in-Progress 23,827 31,336
154,811 136,501
5. CURRENT ASSETS, LOANS AND ADVANCES 6
a) Inventories 75,968 44,742
b) Sundry Debtors 138,075 90,820
c) Cash and Bank Balances 26,091 30,207
d) Other Current Assets 6,455 17
e) Loans and Advances 116,034 58,494
362,623 224,280
6. Less: CURRENT LIABILITIES AND PROVISIONS 7
a) Current Liabilities 82,905 75,563
b) Provisions 57,691 11,243
140,596 86,806
7. NET CURRENT ASSETS 222,027 137,474
TOTAL 376,838 273,975
NOTES TO ACCOUNTS 15
The Schedules referred to above form an integral part of the Balance Sheet
As per our Report attached Signatures to the Balance Sheet and
Schedules 1 to 7 & 15.
For and on behalf of For and on behalf of the Board
KALYANIWALLA & MISTRY
CHARTERED ACCOUNTANTS
Anil A. Kulkarni Ravi Nigam Sohel Shikari Prasad Nadkarni
PARTNER Managing Director Director Company Secretary
Date : May 30, 2010 Date : May 30, 2010
Place : Pune Place : Bengaluru

40
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010
Schedule Current Year Previous Year
Rs. ‘000 Rs. ‘000 Rs. ‘000
INCOME:
1. Sales (Net of Returns) 677,047 423,382
2. Operational Income 8 45,723 34,458
3. Other Income 9 1,644 5,430
724,414 463,270
EXPENDITURE
4. Materials Consumed 10 409,077 237,231
5. Purchase of Trading Goods 596 921
6. Manufacturing and Other Expenses 11 176,006 180,608
7. Interest and Finance Charges 12 9,954 9,746
8. Depreciation and Amortisation 15,222 9,938
610,855 438,444
9. Inventory Change 13 672 1,588
611,527 440,032
PROFIT BEFORE TAX 112,887 23,238
10. Provision for Taxation
a) Current Tax (including Fringe Benefit Tax) 39,509 7,014
b) Deferred tax 3,668 2,045
PROFIT AFTER TAX 69,710 14,179
11. Prior Period Items (Net) 14 21 76
69,689 14,103
12. (Deficit) Brought Forward (14,425) (28,528)
SURPLUS AVAILABLE FOR APPROPRIATION OR 55,264 (14,425)
(DEFICIT) TO BE CARRIED FORWARD
13. APPROPRIATIONS
a) Proposed Dividend on Equity Shares 2,566 -
b) Dividend on Redeemable Preference Shares 60 -
c) Tax on Dividend 436 -
d) Balance Surplus / (Deficit) carried to Balance Sheet 52,202 (14,425)
55,264 (14,425)
Basic and Diluted Earnings per Share (Rs.) 15 27.13 5.50
Face value Rs. 10 per share
NOTES TO ACCOUNTS 15

The Schedules referred to above form an integral part of the Profit and Loss Account.
As per our Report attached Signatures to the Balance Sheet and
Schedules 8 to 15
For and on behalf of For and on behalf of the Board
KALYANIWALLA & MISTRY
CHARTERED ACCOUNTANTS
Anil A. Kulkarni Ravi Nigam Sohel Shikari Prasad Nadkarni
PARTNER Managing Director Director Company Secretary
Date : May 30, 2010 Date : May 30, 2010
Place : Pune Place : Bengaluru

41 26TH ANNUAL REPORT 2009-10

SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010
Current Year Previous Year
Rs. ‘000 Rs. ‘000
SCHEDULE 1: SHARE CAPITAL

1. AUTHORISED:
4,400,000 Equity shares of Rs. 10/- each. 44,000 44,000
60,000 1% Non-Cumulative, Non-Convertible
Redeemable Preference Shares of Rs. 100/- each 6,000 6,000
50,000 50,000
2. ISSUED, SUBSCRIBED AND PAID UP
- 2,566,000 Equity shares of Rs. 10/- each fully paid up 25,660 25,660
- 59,530 1% Non-Cumulative, Non-Convertible
Redeemable Preference Shares of Rs. 100/- each fully paid up. 5,953 5,953
TOTAL 31,613 31,613
Note:
a) Out of above 1,904,510 (Previous Year: 1,904,510) Equity shares and 59,530
(Previous Year: 59,530) Preference Shares are held by Preferred Brands
Foods India Limited, the Holding Company, the subsidiary of Preferred Brands
International Inc., USA, the Ultimate Holding Company.
b) 1% Non-Cumulative, Non-Convertible Redeemable Preference Shares are
redeemable on or before August 31, 2018 at a premium of Rs. 1,950/- per
share.

SCHEDULE 2: RESERVES AND SURPLUS

Current Year Previous Year
Rs. ‘000 Rs. ‘000 Rs. ‘000

1. CAPITAL RESERVE 5,734 5,734

2. SECURITIES PREMIUM ACCOUNT 9,475 9,475
3. RESERVE FOR PREMIUM ON PREFERENCE
SHARE CAPITAL 116,083 116,083
4. PROFIT AND LOSS ACCOUNT - SURPLUS/(DEFICIT) 52,202 (14,425)
TOTAL 183,494 116,867

42
SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010
Current Year Previous Year
Rs. ‘000 Rs. ‘000
SCHEDULE 3: SECURED LOANS

1. FROM BANKS
a) Cash Credit 64,032 23,466
b) Term Loans (Refer Note no. 2 of Schedule 15 :Notes to accounts) 4,692 4,692
(Repayment within one year: Rs. 2,500 thousands;
Previous Year: Rs. 2,500 thousand)
2. FROM OTHERS
a) Term Loans 80,954 78,835
(Refer Note No. 3 of Schedule 15 : Notes To Accounts)
TOTAL 149,678 106,993

Note :
1. Cash credit is secured by hypothecation charge on all current assets
of the Company including stocks and book debts to the extent of USD
1,500 Thousand (Previous Year : USD 750 thousand) and deposit with
bank.
2. Term loan from banks is secured by deposits with bank.
3. Term loans from others are secured by way of first priority charge and
mortgage over all the movable and immovable properties, present and
future, all rights in the contracts of the borrower, borrowers right, title
and interest in all receivables, returns from investments except to the
extent mentioned in Note 1 above.

SCHEDULE 4: UNSECURED LOANS

FROM BANKS
a) Working Capital Demand Loan - 10,117
TOTAL - 10,117

Amount repayable within one year - 10,117

43 26TH ANNUAL REPORT 2009-10

 SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010
SCHEDULE 5: FIXED ASSETS
Rs. ‘000
ASSET GROSS BLOCK DEPRECIATION NET BLOCK
As at As at Upto For the On Upto As at As at
31-Mar-09 Additions Deductions 31-Mar-10 1-Apr-09 Year Deductions 31-Mar-10 31-Mar-10 31-Mar-09
Tangible Assets
Freehold Land 1,255 - - 1,255 - - - - 1,255 1,255
Buildings 37,230 2,579 - 39,809 11,768 1,303 - 13,071 26,738 25,462
Plant and Machinery 144,671 34,368 2,605 176,434 82,701 12,055 768 93,988 82,446 61,970
Office Equipment 2,506 703 60 3,149 654 134 18 770 2,379 1,852
Computers 5,418 1,176 125 6,469 4,459 391 70 4,780 1,689 959
Furniture and Fixtures 3,308 445 73 3,680 2,877 66 36 2,907 773 431
Vehicles 75 - - 75 33 5 - 38 37 42

44
Electrical Installations 14,161 - - 14,161 967 673 - 1,640 12,521 13,194
Intangible Assets
Computer Softwares - 3,741 - 3,741 - 595 - 595 3,146 -
TOTAL 208,624 43,012 2,863 248,773 103,459 15,222 892 117,789 130,984
Previous Year 210,981 5,069 7,426 208,624 99,668 9,938 6,147 103,459 105,165
CAPITAL WORK IN PROGRESS
A. Capital Work-in-Progress 9,488 21,062
B. Advance for Capital Goods (Unsecured, Considered Good) 14,339 10,274
TOTAL 23,827 31,336
SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010
Current Previous
Year Year
Rs. ‘000 Rs. ‘000 Rs. ‘000
SCHEDULE 6: CURRENT ASSETS, LOANS AND ADVANCES
1. INVENTORIES
a) Raw Materials 31,465 15,570
b) Stores and Spares 424 507
c) Packing Material 38,791 22,705
d) Work-in-Progress 2,594 3,699
e) Finished Goods 2,694 2,261
75,968 44,742

2. SUNDRY DEBTORS
(Unsecured - Considered good, unless otherwise stated)
a) Debts outstanding for a period exceeding six months 1,104 3,632
(Including doubtful debts Rs. NIL;
Previous Year Rs. 3,150 thousand)
b) Other Debts 136,971 90,338
138,075 93,970
c) Less : Provision for Doubtful Debts - 3,150
138,075 90,820
Due from companies under the same management:
Preferred Brands International Inc. USA 81,533 67,078
Preferred Brands Australia Pty. Ltd. 37,132 14,838

3. CASH AND BANK BALANCES

a) Cash in Hand 223 55
b) Balances with Scheduled Banks
- in Current Accounts 13,766 2,059
- in Deposit Accounts 12,102 28,093
26,091 30,207

4. OTHER CURRENT ASSETS 6,455 17

45 26TH ANNUAL REPORT 2009-10

SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010
Current Previous
Year Year
Rs. ‘000 Rs. ‘000 Rs. ‘000
5. LOANS AND ADVANCES
(Unsecured - considered good, unless otherwise stated)
a) Advances recoverable in cash or in kind or for
value to be received. 69,225 45,922
(includes dues from Preferred Brands Foods India
Limited, being a Company under the same
management Rs. 90 thousand; (Previous Year : Rs. 61
thousand); Maximum amount due at any time during
the year from Preferred Brands Foods India Limited
Rs. 90 thousand; (Previous Year: Rs. 61 thousand)).
b) Sundry Deposits 4,514 4,388
c) Advance Payment of Taxes 42,295 8,184
116,034 58,494
TOTAL 362,623 224,280

SCHEDULE 7: CURRENT LIABILITIES AND PROVISIONS

1. CURRENT LIABILITIES
a) Sundry Creditors 66,187 54,,578
(Refer Note no. 7 of Schedule 15 : Notes to Accounts)
b) Other Liabilities 16,718 20,985
82,905 75,563
2. PROVISIONS
a) Proposed Dividend on Equity Shares 2,566 -
b) Proposed Dividend on Redeemable Preference Shares 60 -
c) Tax on Dividend 436 -
d) For Retirement Benefits 3,886 2,882
e) For Taxation 50,743 11,640
Less: MAT Credit Entitlement - 3,279
50,743 8,361
57,691 11,243
TOTAL 140,596 86,806

46
SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010
Current Previous
Year Year
Rs. ‘000 Rs. ‘000 Rs. ‘000
SCHEDULE 8: OPERATIONAL INCOME

1. Cold Storage Rent 471 1,821

2. Processing Charges 138 1,177
3. Export Incentives 45,114 31,460
TOTAL 45,723 34,458

SCHEDULE 9: OTHER INCOME

1. Interest (Gross) 1,244 4,111

(Tax Deducted at Source Rs.154,009;
Previous Year Rs.251,074)
2. Sundry Balances Written Back 368 928
3. Excess Provision Written Back - 338
4. Miscellaneous Income 32 53
TOTAL 1,644 5,430

SCHEDULE 10: MATERIALS CONSUMED

RAW MATERIALS INCLUDING PACKING MATERIAL

Opening Inventory 38,275 33,255
Add: Purchases 441,058 242,251
479,333 275,506
Less: Closing Inventory 70,256 38,275
TOTAL 409,077 237,231

47 26TH ANNUAL REPORT 2009-10

SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010
Current Previous
Year Year
Rs. ‘000 Rs. ‘000 Rs. ‘000
SCHEDULE 11: MANUFACTURING AND OTHER EXPENSES
Salaries, Wages, Bonus and Gratuity 78,806 54,397
Contribution to Provident and Other Funds 2,529 1,984
Workmen and Staff Welfare Expenses 884 1,796
Stores and Spares Consumed 19,483 13,711
Power and Fuel 12,746 9,664
Repairs and Maintenance:
a) Plant and Machinery 2,504 1,938
b) Buildings 5,885 341
c) Others 1,297 1,288
9,686 3,567
Rent, Rates and Taxes 3,918 4,324
Telephone and Postage 3,133 2,183
Travelling and Conveyance 8,957 6,312
Legal and Professional Charges 8,861 6,727
Printing and Stationary 4,963 1,227
Insurance 1,345 700
Freight 41,707 32,161
Sales Promotion 102 616
Selling and Distribution Expenses - 763
Bad Debts Written Off 3,205 -
Provision for Doubtful Debts (3,150) 2,550
(Profit) / Loss on fixed assets sold / written off (Net) 1,532 1,279
Loss /(Gain) on Foreign Exchange (Net) (30,665) 39,650
Loss on derivative contracts - 3,560
Less: Provision for Loss on Derivative Contracts - 12,059
- (8,499)
Auditor’s Remuneration 935 681
Sundry Balances Written Off 167 262
Miscellaneous Expenses 6,862 4,553
TOTAL 176,006 180,608

48
SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010
Current Previous
Year Year
Rs. ‘000 Rs. ‘000 Rs. ‘000
SCHEDULE 12: INTEREST AND FINANCE CHARGES

1. Interest
- on term loans
- Banks 397 300
- Others 3,136 4,000
3,533 4,300
- on other loans
- Banks 3,787 3,396
- others - 202
7,320 7,898
2. Other Finance Charges 2,634 1,848
TOTAL 9,954 9,746

SCHEDULE 13: INVENTORY CHANGE

1. Opening Inventory
a) Finished Goods 2,261 3,210
b) Work-in-Progress 3,699 4,338
5,960 7,548
2. Less : Closing Inventory
a) Finished Goods 2,694 2,261
b) Work-in-Progress 2,594 3,699
5,288 5,960
3. (Increase) / Decrease in Inventory 672 1,588

SCHEDULE 14: PRIOR PERIOD ITEMS

1. Short Provision for Income - (657)

2. Short Provision for Expenses 21 733
21 76

49 26TH ANNUAL REPORT 2009-10

SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010
SCHEDULES 15 : NOTES TO ACCOUNTS
1. SIGNIFICANT ACCOUNTING POLICIES
a) Basis of Accounting:
The financial statements of Tasty Bite Eatables Limited (‘the Company’) have been prepared on
accrual basis under the historical cost convention and on the ‘going concern basis’, in conformity in
all material aspects with the generally accepted accounting principles in India, the Accounting
Standards prescribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central
Government in consultation with the National Advisory Committee on Accounting Standards and
relevant provisions of the Companies Act, 1956.
b) Use of Estimates:
The preparation of financial statements requires management to make certain estimates and
assumptions that affect the amounts reported in the financial statements and notes thereto. The
differences between the actual results and estimates are recognized in the period in which the results
materialize / are known.
c) Fixed Assets and Depreciation:
Tangible and intangible fixed assets are stated at cost less accumulated depreciation / amortization.
Cost includes all expenses related to acquisition and installation of the concerned assets and any
attributable cost of bringing the asset to the condition of its intended use.
Depreciation is provided under the straight-line method at the rates specified in Schedule XIV to the
Companies Act, 1956, pro-rata to the period of use. Assets installed on Leasehold Premises are
depreciated over the period of Lease. Computer software is amortised over its estimated useful
economic life of five years.
d) Inventories:
Raw materials, packing materials, stores and spares are valued at standard cost.
Work-in-progress and Finished Goods are valued at standard cost or net realisable value, whichever
is lower. The standard cost comprises of direct material, direct labour and factory overheads.
Trading goods are valued at lower of cost or net realisable value.
e) Investments:
Long-term investments are valued at cost less provision for diminution in value, if the diminution is
other than temporary.
Current Investments are stated at lower of cost or fair value.
f) Borrowing Costs:
Borrowing Costs directly attributable to the acquisition, construction or production of qualifying assets
are capitalized till the date the asset is ready to use, as part of the cost of that asset. Other
borrowing costs are recognized as an expense in the period in which these are incurred.
g) Foreign Exchange Transactions:
Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the
transaction. Assets and liabilities related to foreign currency transactions, remaining unsettled at the
year-end, are stated at the year-end rates. Forward exchange contracts, remaining unsettled at the
year end, backed by underlying assets or liabilities are also translated at the year end exchange
rates. Exchange gains / losses are recognized in the Profit and Loss Account. The premium /
discount on forward exchange contracts is amortised over the life of the contract.

50
h) Revenue Recognition:
Sale of goods is recognized on dispatch to customers. Sales are net of returns and sales tax.
Income from cold storage is recognized on accrual basis on time proportionate basis and income from
processing activities is recognized on accrual basis as and when the services are rendered.
Interest income is recognised on the time proportion method.
Dividend income on investments is accounted for when the right to receive the income is established.
i) Research and Development Expenditure:
Revenue expenditure on research and development is charged to the Profit and Loss Account in the
year in which it is incurred.
j) Export Incentives:
Export incentives receivable under various schemes are accounted for on accrual basis as on actual
date of shipment from the factory to the extent the management is certain of income.
k) Employee Benefits:
Employee benefits comprise payments under defined contribution plans like provident fund and family
pension. Payments under defined contribution plans are charged to the profit and loss account. The
liability in respect of defined benefit schemes like gratuity and leave encashment benefit on retirement
is provided on the basis of actuarial valuation at the end of each year. The liability for retirement
gratuity is funded through a trust created for the purpose.
l) Taxes on income:
Income Taxes are computed using the tax effect accounting method, where taxes are accrued in the
same period as the related revenue and expenses arise. Minimum Alternate Tax (MAT) Credit
Entitlement is recognized as an asset for the expected entitlement of credit in future only to the
extent management is virtually certain as to sufficiency of future tax liability against which the assets
can be realized.
Deferred tax assets and liabilities are recognised for the expected future tax consequences attributable
to timing differences between the taxable income and accounting income for a period. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to taxable income in
the years in which the timing differences are expected to be recovered or settled. The effect of
changes in tax rates on deferred tax assets and liabilities will be recognised in Profit and Loss
Account in the period of change. Deferred tax assets are recognised only to the extent management
is reasonably certain as to the sufficiency of future taxable income against which the tax assets can
be realised.
m) Impairment of Assets:
Carrying amount of cash generating units / assets is reviewed at balance sheet date to determine
whether there is any indication of impairment. If such indication exists, the recoverable amount is
estimated as the net selling price or value in use, whichever is higher. Impairment loss, if any, is
recognized whenever carrying amount exceeds the recoverable amount.
n) Provisions and Contingencies:
A provision is recognised when the company has a present obligation as a result of a past event and
it is probable that an outflow of resources will be required to settle the same. Provisions are
determined based on best estimates required to settle the obligation at the balance sheet date.
Contingencies are recorded when it is probable that a liability will be incurred, and the amount can
be reasonably estimated. Where no reliable estimate can be made as to the outcome of an event,
a disclosure is made as contingent liability. Contingent assets are not recognised in the accounts.

51 26TH ANNUAL REPORT 2009-10

 o) Earnings Per Share
Basic earnings per share is computed using the weighted average number of common shares
outstanding during the year. Diluted earnings per share is computed using the weighted average
number of common and dilutive common equivalent shares outstanding during the year, except where
the results would be anti-dilutive.
2. TERM LOANS FROM BANKS
Term loans include Rs.2,192 thousand (Previous Year: Rs.2,192 thousand) being disbursement of the grant
released by the Ministry of Food Processing Industries to the Company in the form of ‘Term Loan (non-
interest bearing)’ under the scheme ‘Technology Up-gradation / Establishment / Modernization of Food
Processing Plant’ of the Ministry of Food Processing Industries for expansion of existing unit for manufacture
of ready to eat foods etc.
The Ministry has sanctioned the grant of Rs.4,384 thousand, which will be released in two equal installments.
As per the scheme, the first installment of Rs.2,192 thousand has been released by the bankers on behalf
of the Ministry in the form of the term loan. As per the Government scheme guidelines, the term loan will
become ‘grant’ on compliance with the terms and conditions of the scheme.
3. TERM LOANS FROM OTHERS
The Company has taken External Commercial Borrowing (ECB) of USD 1,300 thousand from Preferred
Brands International Inc., U.S.A. (PBI), its ultimate holding company, for capacity expansion and modernisation
of the existing manufacturing infrastructure. The Company has received the Reserve Bank of India (RBI)
approval ref. FED.CO.ECBD./03.02.766/2005-06 dated November 9, 2005. The Company has drawn down
entire amount of the loan in the year ended March 31, 2007. As per the terms of the loan agreement, the
loan is repayable at any time after the third anniversary of the date of first disbursement upon the written
demand by the lender. In the absence of a written demand, the Company has to repay the principal sum
in approximately eight quarterly installments commencing with the first payment date occurring eight years
after the date of drawdown.
The Company has been sanctioned an additional ECB of USD 1,000 thousand by PBI in the year 2008-
2009 for modernization and up-gradation of existing manufacturing facility. The Company has received the
RBI approval ref. FED.CO.ECBD/13748/03.02.766/2008-09 dated November 17, 2008. The Company has
drawn down USD 500 thousand (Previous Year: USD 250 thousand) as at the balance sheet date. The
loan is repayable at any time after the third anniversary of the date of first disbursement upon the written
demand by the lender. In absence of a written demand, the Company has to repay the principal sum in
twenty equal installments on quarterly basis commencing from September 30, 2012.
The above ECBs are not pre-payable.
4. CONTINGENT LIABILITIES
a) Claims against the Company not acknowledged as debts and not provided for:
i) Sales Tax demands disputed by the Company and under appeal Rs.930 thousand (Previous
Year: Rs.930 thousand).
ii) Income tax claims disputed by the Company and under appeal Rs.11,767 thousand (Previous
Year: Rs.10,407 thousand).
iii) Custom duty demand disputed by the Company and under appeal Rs.950 thousand (Previous
Year: Rs.950 thousand).
iv) Provident Fund demand disputed by the Company and under appeal Rs.10,034 thousand
(Previous Year: Rs.10,034 thousand).
b) Guarantees given by the Company’s bankers against counter guarantees given by the Company of
Rs.3,200 thousand (Previous Year: Rs.3,200 thousand). It includes bank guarantees amounting to
Rs.950 thousand (Previous Year: Rs.950 thousand) in respect of item (a) (iii) above.

52
 The amounts included above, represent the best possible estimates arrived at on the basis of
available information. The uncertainties and possible reimbursements are dependent on the outcome
of the different legal processes which have been invoked by the Company or the claimants as the
case may be and therefore cannot be predicted accurately.
5. DERIVATIVE INSTRUMENTS
The derivative instruments outstanding as at March 31, 2010 are as under:
i) Forward contracts USD-INR for the purpose of hedging its exposure to foreign currency receivables:
USD 5,100 thousand (Previous Year: USD 4,350 thousand).
ii) Forward contracts AUD-INR for the purpose of hedging its exposure to foreign currency receivables:
AUD 300 thousand (Previous Year: Nil).
The Company has provided for the losses on derivative instruments by marking them to market.
6. Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs.69,312
thousand (Previous Year: Rs.9,567 thousand).
7. LIABILITIES
Micro, Small and Medium enterprises as defined under the Micro, Small and Medium Enterprises Development
Act, 2006 (MSMED Act) have been identified by the Company on the basis of the information available
and the auditors have relied on the same. Sundry Creditors include total outstanding dues of micro
enterprises and small enterprises amounting to Rs. NIL (Previous Year: Rs.2,883 thousand). The disclosures
pursuant to the Schedule VI to the Companies Act, 1956 and MSMED Act based on the books of account
are as under:
Rupees in thousand
2009-10 2008-09
Dues remaining unpaid
Principal Nil 1,259
Interest Nil Nil
Interest paid in terms of Section 16 of MSMED Act Nil Nil
Amount of payments made to supplier beyond the appointed day 654 Nil
Amount of interest due and payable for the period of delay on
payments made beyond the appointed day during the year
without adding interest specified under MSMED Act Nil Nil
Amount of interest accrued and remaining unpaid Nil Nil
Amount of further interest remaining due and payable in
succeeding years for the purpose of disallowance under
section 23 of the Act Nil Nil
8. DEFERRED TAXATION
In accordance with the Accounting Standard 22 on Accounting for Taxes on Income, the Company has made
adjustments in its accounts for deferred tax liabilities / assets. The tax effects of significant temporary differences
that resulted in deferred tax assets and liabilities are:
Particulars As at As at
March 31, 2010 March 31, 2009
(Rs. in thousand) (Rs. in thousand)
Deferred Tax Asset
Provision for Retirement Benefits 1,695 979
Others 691 2,865
Deferred Tax Liability
Depreciation on Fixed Assets (14,439) (12,229)
Deferred Tax Asset / (Liability) (12,053) (8,385)

53 26TH ANNUAL REPORT 2009-10

SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010

SCHEDULE 15: NOTES TO ACCOUNTS (Contd.)

9. EMPLOYEE BENEFITS
Defined Contribution Plan:
Contribution to defined contribution plans are recognized as expense for the year. The contributions to
provident fund under defined contribution plan are reported in Schedule 11 – Manufacturing and other
expenses.
Defined Benefit Plan:
The amounts recognized in the Company's financial statements as at the year end as per the certificate
issued by actuary are as under:
(Rs. In thousands)
Particulars 2009-10 2008-09

Change in Present Value of Obligation

Present value of the obligation at the beginning of the year 3,390 2,712
Current Service Cost 440 412
Interest Cost 302 244
Contribution by Plan Participants - -
Actuarial (Gain) / Loss on Obligation 1,523 159
Foreign Currency exchange rate changes - -
Benefits Paid (108) (137)
Past Service Cost - -
Amalgamations/ Curtailments/ Settlements - -
Present value of the obligation at the end of the year 5,547 3,390
Change in Plan Assets
Fair value of Plan Assets at the beginning of the year 2,463 1,569
Expected return on Plan Assets 273 208
Actuarial Gain / (Loss) on Plan Assets 437 (277)
Foreign Currency exchange rate changes - -
Contributions by the Employer 1,000 1,100
Contributions by Plan Participants - -
Benefits Paid (108) (137)
Amalgamations/ Settlements - -
Fair value of Plan Assets at the end of the year 4,065 2,463
Amounts Recognized in the Balance Sheet:
Present value of Obligation at the end of the year 5,547 3,390
Unrecognized Past Service Cost - -
Fair value of Plan Assets at the end of the year 4,065 2,463
Net Obligation at the end of the year (1,482) (927)
Amounts Recognized in the statement of Profit and Loss:
Current Service Cost 440 412
Interest cost on Obligation 302 244
Expected return on Plan Assets (273) (208)
Expected return on Reimbursement Right recognised as an asset - -
Net Actuarial (Gain) / Loss recognised in the year 1,086 436
Past Service Cost - -
Effect of Curtailment or Settlement - -

54
SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010

SCHEDULE 15: NOTES TO ACCOUNTS (Contd.)

(Rs. In thousands)
Particulars 2009-10 2008-09

Net Cost Included in Personnel Expenses - -

Expenses recognized in the statement of profit and loss 1,555 884
Major categories of plan assets as a percentage of total plan
Actual return on Plan Assets 710 69
Estimated contribution to be made in next financial year 1,717 1,061
Actuarial Assumptions
i) Discount Rate 8.25% 8.00%
ii) Expected Rate of Return on Plan Assets 8.00% 8.00%
iii) Salary Escalation Rate 5.00% 5.00%
iv) Employee Turnover 2.00% 2.00%
v) Mortality LIC (1994-96) Ultimate LIC (1994-96) Ultimate
Note:
a) The estimates of future salary increases, considered in actuarial valuation, has been done on the basis
of current salary suitably projected for future taking into consideration the general trend in salary rise and
inflation rates.
b) The liability for leave encashment as at the year end is Rs.2,404 thousand (Previous Year: Rs.1,955
thousand).
10. SEGMENT REPORTING
The disclosure requirements in respect of ‘Accounting Standard 17 – Segment Reporting’ is as under:
a. Information about Primary Segment
The Company has a single business segment ‘Prepared Foods’ in accordance with the criteria for
identification of reportable segment specified in the said standard. The Company has reduced the activity
of providing cold storage on rental basis and vegetable processing activities substantially and now these
activities have remained incidental. Hence, the management does not consider the above incidental
activities as reportable segment.
b. Information about Secondary Segments
The Company has identified following geographical segments as secondary reportable segments (Rupees
in Thousand):
Particulars India Outside India Total
2009-10 2008-09 2009-10 2008-09 2009-10 2008-09
Revenue 1,58,860 1,07,746 5,65,554 3,55,524 7,24,414 4,63,270
Carrying amount of
segment assets 3,88,509 2,78,866 1,28,925 81,915 5,17,434 3,60,781
Capital expenditure 31,438 35,721 - - 31,438 35,721

c. Notes:
i. Revenue within India includes sales to customers located within India and earnings in India. Revenue
outside India includes sales to customers located outside India and earnings outside India.
ii. Carrying amount of segment assets are determined by geographical location of assets in India and
outside India.
iii. Capital expenditure includes cost incurred during the year to acquire the tangible and intangible fixed
assets by geographical location of assets in India and outside India.

55 26TH ANNUAL REPORT 2009-10

SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010
SCHEDULE 15: NOTES TO ACCOUNTS (Contd.)

11. RELATED PARTY DISCLOSURE

1. Relationships :

(i) HOLDING COMPANY

Preferred Brands Foods India Limited.

(ii) ULTIMATE HOLDING COMPANY

Preferred Brands International, Inc. USA

(iii) FELLOW SUBSIDIARY

Preferred Brands Australia Pty. Ltd.
ASG Omni India Private Limited

(iv) KEY MANAGEMENT PERSONNEL

Mr. Ravi Nigam - Managing Director
Mr. Sohel Shikari - Alternate Director

(v) RELATIVES OF KEY MANAGEMENT PERSONNEL

Mrs. Ruby Nigam
Mrs. Reshma Shikari
M/s. K. S. Shikari & Associates

2. Following transactions were carried out with the related parties in the ordinary course of business:
(i) Details Relating to parties referred to in items 1 (i), (ii) & (iii) above (Rupees in Thousands ) :

Sr. Particulars Holding Ultimate Holding Fellow

No. Company Company Subsidiary
2009-10 2008-09 2009-10 2008-09 2009-10 2008-09

1 Sales - - 467,074 300,710 97,677 53,735

2 Interest Income - - - 2,681 - 48

3 Expenses Charged to Other Companies 30 37 2,985 2,596 440 797

4 Expenses Charged by Other Companies - - 451 2,459 - 739

5 Interest on Loan Taken - - 3,136 4,000 - -

6 Loans taken during the year - - 11,525 12,265 - -

7 Outstanding receivables net of payables 90 60 81,533 67,078 36,917 14,602

8 Loan Outstanding - - 80,954 78,835 - -

(ii) Details Relating to parties referred to in items 1 (iv) and (v) above (Rupees in Thousand):

Particulars Key Management Personnel Relatives of Key Management Personnel

2009-10 2008-09 2009-10 2008-09

1 Remuneration 7,041 3,319 - -

2 Receiving of Services - - 810 240

56
SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010

SCHEDULE 15: NOTES TO ACCOUNTS (Contd.)

12. ANNUAL CAPACITIES AND PRODUCTION

Sr. Item Installed Capacity Actual Production

No. Current Previous Current Previous
Year Year Year Year
MT MT MT MT

1. Ready to Serve Foods 9,800 17,200 7,382 4,687

* includes captive consumption.

Notes :
Installed capacities are as certified by the Management.
Licenced Capacity has not been mentioned as the product has been delicenced

13. INVENTORY OF FINISHED GOODS

Sr. Item March 31, 2010 March 31, 2009

No. Quantity Value Quantity Value
MT Rs. ‘000 MT Rs.‘000

1. Ready to Serve Foods 43 2,694 41 2,261

2,694 2,261

14. SALES TURNOVER

Sr. Item Current Year Previous Year

No. Quantity Value Quantity Value
MT Rs. ‘000 MT Rs.‘000

1. Ready to Serve Food Products 7,380 673,384 4,590 421,248

3. Trading Sales 20 1,980 20 1,105
4. Scrap Sales * 1,683 * 1,029
TOTAL 677,047 423,382

* Considering the varied nature of items, quantitative information has not been given.

15. MATERIALS CONSUMED

Sr. Item Current Year Previous Year

No. Quantity Value Quantity Value
MT Rs. ‘000 MT Rs.‘000

1. Raw Material and Packing Material 409,077 237,231

TOTAL 409,077 237,231

Note:
Considering the varied number of items, quantitative information has not been given.

57 26TH ANNUAL REPORT 2009-10

SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010
SCHEDULE 15: NOTES TO ACCOUNTS (Contd.)
16. CONSUMPTION OF RAW MATERIALS AND STORES

Item Current Year Previous Year

Rs. ‘000 % Rs.‘000 %
a) Raw Materials including Packing Material
- Imported 95,591 23 41,659 18
- Indigenous 313,486 77 195,572 82
409,077 100 237,231 100
b) Stores and Spare Parts
- Imported 1,339 7 146 1
- Indigenous 18,144 93 13,565 99
TOTAL 19,483 100 13,711 100

Current Previous
Year Year
Rs. ‘000 Rs. ‘000

17. VALUE OF IMPORTS ON C.I.F. BASIS

a) Raw Materials and Packing Materials 84,408 46,181
b) Purchases of Trading Goods - 637
c) Plant and Machinery 8,158 18,751
d) Stores and Spares 1,022 146

TOTAL 93,588 65,715

18. EXPENDITURE IN FOREIGN CURRENCY

- Travel 838 2,197
- Interest 3,136 4,000
- Others 478 3,198
TOTAL 4,452 9,395

19. EARNINGS IN FOREIGN CURRENCY

- F.O.B. Value of Exports 531,263 329,304
- Interest Income - 2,729

TOTAL 531,263 332,033

58
SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010

SCHEDULE 15: NOTES TO ACCOUNTS (Contd.)

Current Previous
Year Year
Rs. ‘000 Rs. ‘000
20. MANAGERIAL REMUNERATION
a) Directors

Salaries and Bonus 6,538 3,001

Contribution to Provident Fund 503 318

(Above figures do not include provisions for

leave encashment and gratuity as separate actuarial

valuation is not available for the Managing Director.)

b) Independent Directors

Professional Fees 220 120

Directors Sitting Fees 55 30

7,316 3,469

c) Computation of net profit in accordance with

section 349 of the Companies Act, 1956

Profit before tax 112,887

Add:

i) Managerial Remuneration 7,041

ii) Directors’ sitting fees 55

iii) Depreciation 15,222

iv) (Profit) / Loss on fixed assets sold / written off (Net) 1,532

v) Provision for doubtful debts (3,150)

133,587

Less:

i) Depreciation u/s 350 15,222

ii) Brought forward losses of earlier years u/s 349 14,713

103,652

The computation of net profits for the previous year has not been given, as the Company has paid managerial
remuneration as per limits specified in Section II of Part II of Schedule XIII to the Companies Act, 1956.

59 26TH ANNUAL REPORT 2009-10

SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010

SCHEDULE 15: NOTES TO ACCOUNTS (Contd.)

Current Previous
Year Year
Rs. ‘000 Rs. ‘000
21. AMOUNTS PAID TO AUDITORS (Excluding Service Tax)

a) Audit Fees 475 375

b) Audit under other statutes 275 150

c) Certificates 170 120

d) Out of Pocket Expenses 15 36

TOTAL 935 681

22. DISCLOSURE IN RESPECT OF LEASES

The Company has operating leases for office space and guest house, that expire over the next 1-4 years. These
agreements provide for cancellation by either party with a notice period ranging from 60 days to 180 days, after the
initial lock-in period, if any. The total of future minimum lease payments under non-cancelable operating leases:

a) Not later than one year 384 1,740

b) Later than one year and not later than five years 538 -

c) Later than five years

23. EARNING PER SHARE

Net Profit as per Profit and Loss Account 69,689 14,103

Less: Preference share dividend (including dividend distribution tax) 70 -

Amount available for Equity shareholders 69,619 14,103

Weighted Average No. of Equity shares outstanding 2,566,000 2,566,000

Earning per share - Basic and Diluted (Rs.) 27.13 5.50

Face Value per Equity share (Rs.) 10 10

24. PREVIOUS YEAR FIGURES

Figures for the previous period have been regrouped / restated wherever necessary.

60
16) Statement Pursuant to Part IV of Schedule VI to the Companies Act, 1956 :
Balance Sheet Abstract for the Year Ended March 31, 2010 and Company’s General Business Profile

I) Registration Details:
Registration No. : 37347
State Code : 11
Balance Sheet Date : March 31, 2010

II) Capital Raised During the Year: (Amount in Rs. Thousand)

Public Issue : NIL
Right Issue : NIL
Bonus Issue : NIL
Private Placement : NIL

III) Position of Mobilisation and Deployment of Funds: (Amount in Rs. Thousand)

Total Liabilities : 376,838
Total Assets : 376,838

Sources of Funds
Paid-up Capital : 31,613
Reserves and Surplus : 183,494
Secured Loans : 149,678
Unsecured Loans : -

Application of Funds
Net Fixed Assets : 154,811
Investments : -
Net Current Assets : 222,027
Misc. Expenditure : -
Accumulated Losses : -

IV) Performance Of Company : (Amount in Rs. Thousand)

Turnover : 724,414
Total Expenditure : 611,527
Profit/Loss Before Tax : 112,887
Profit/Loss After Tax : 69,710
Earning Per Share in Rs. : 27.13
Dividend Rate % : 10%

V) Generic Names Of 3 Principal Products / Services of Company:

(As per monetary terms)
a) Item Code No. (ITC Code) : 20059000
Product Description : Ready to Serve Food Products

61 26TH ANNUAL REPORT 2009-10

CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
Current Previous
Year Year
Rs. ‘000 Rs. ‘000 Rs. ‘000

A. CASH FLOW FROM OPERATING ACTIVITIES:

Net Profit Before Tax and Extraordinary Items 112,887 23,238

Adjustment for:

Depreciation and Amortisation 15,222 9,938

Interest Expense 7,320 7,898

Interest Income (1,244) (4,111)

Loss / (Gain) on Foreign Exchange Transactions (14,808) 14,153

(Profit) / Loss on fixed assets sold / written off (Net) 1,532 1,279

8,022 29,157

Operating Profit Before Working Capital Changes 120,909 52,395

Adjustments for:

Trade and Other Receivables (72,131) (21,900)

Inventories (31,226) (3,468)

Trade Payables 8,515 (2,316)

(94,842) (27,684)

Cash Generated from Operations 26,067 24,711

Income Tax Paid :

Current Tax (including Fringe Benefit Tax) (31,238) (5,076)

Cash Flow Before Extraordinary Items (5,171) 19,635

Prior Period Items (21) (76)

Net Cash Flow from Operating Activities (5,192) 19,559

B. CASH FLOW FROM INVESTING ACTIVITIES:

Purchase of Fixed Assets (35,503) (35,721)

Sale of Fixed Assets 439 -

Net Cash Used in Investing Activities (35,064) (35,721)

Balance carried forward (40,256) (16,162)

62
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
Current Previous
Year Year
Rs. ‘000 Rs. ‘000 Rs. ‘000

Balance Brought Forward (40,256) (16,162)

C. CASH FLOW FROM FINANCING ACTIVITIES:

Change in Borrowings 42,216 33,932

Swap contracts - (3,560)

Interest Expense (7,320) (7,898)

Interest Income 1,244 4,111

Net Cash Used in Financing Activities 36,140 26,585

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS: (4,116) 10,423

CASH AND CASH EQUIVALENTS AS AT THE BEGINNING

Cash and Bank Balances 30,207 19,784

30,207 19,784

CASH AND CASH EQUIVALENTS AS AT THE ENDING

Cash and Bank Balances 26,091 30,207

26,091 30,207

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS: (4,116) 10,423

NOTES
1. The Cash Flow statement has been prepared following the indirect method except in case of taxes paid which have
been considered on the basis of actual movement of cash.

2. Purchase of fixed assets includes movements in Capital Work-in-process between the beginning and end of the year.

3. Change in borrowings are shown net of receipts and payments.

4. Cash and cash equivalent represent cash and bank balances including deposits towards margin money amount-
ing to Rs.5,035 thousand (Previous Year: Rs.23,885 thousand) and deposits towards security for loans amounting
to Rs.5,977 thousand (Previous Year: Rs.2,880 thousand).

5. Previous year’s figures have been regrouped / reclassified wherever necessary.

6. Figures in brackets represent outflows.

For and on behalf of For and on behalf of the Board

KALYANIWALLA & MISTRY
CHARTERED ACCOUNTANTS
Anil A. Kulkarni Ravi Nigam Sohel Shikari Prasad Nadkarni
PARTNER Managing Director Director Company Secretary
Date : May 30, 2010 Date : May 30, 2010
Place : Pune Place : Bengaluru

63 26TH ANNUAL REPORT 2009-10

 PROXY FORM
TASTY BITE EATABLES LIMITED
Regd.Office : 204, Mayfair Towers, Wakdewadi, Shivajinagar, Pune – 411 005

I/We………………………………………………………… of…………………………. in the State of

…………………………… being a Member/Members of the above named Company hereby appoint Mr./Ms.
……………………………………….. of ……………………. in the State of ……………………….. or failing him/
her ……………………………………….. of ……………………. as my/our proxy to vote for me/us on my/our
behalf at the 26th Annual General Meeting of the Company, to be held on September 16, 2010 at 3.00 p.m at
Hotel Le Meridien Pune, RBM Road, Pune 411 001 and at any adjournment thereof.
Affix One
Rupee
DP ID * Revenue
Stamp
Client ID * here
Regd. Folio ID
No. of shares held

* Applicable if shares are held in electronic form ____________

Signature of Registered Holder

____________

Signature of Proxy holder

NOTE: This form in order to be effective should be duly stamped, completed and signed and must be deposited
at the Registered office of the Company, not less than 48 hours before the meeting.

TASTY BITE EATABLES LIMITED

Regd.Office : 204, Mayfair Towers, Wakdewadi, Shivajinagar,
Pune – 411 005

ATTENDANCE SLIP

DP ID * Name And Address of the Registered

Shareholder
Client ID *

Regd. Folio No.

No. of shares held

* Applicable if Shares are held in electronic form

I Certify that I am a registered shareholder/ proxy for the registered shareholder of the Company. I hereby record
my presence at the 26th ANNUAL GENERAL MEETING held on September 16, 2010 at 3.00 p.m at Hotel Le
Meridien Pune, RBM Road, Pune 411 001.

…………………………………………… Member’s/ Proxy’s Signature

Note: Please fill this attendance slip and hand it over at the Entrance of the Office.