Chordia Food Products Ltd Directors Report.

To,

The Members,

The Directors have pleasure in presenting the 39th Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2021.

1. FINANCIAL RESULTS

A) STANDALONE & CONSOLIDATED FINANCIAL RESULTS

Aveer Foods Limited is the 100% subsidiary of the Company. Consequently pursuant to provisions of Section 129 of the Companies Act, 2013, read with Companies (Accounts) Rules 2014, and applicable Accounting Standards, the Company has prepared Consolidated Financial Statements along with the Financial Statements of the Subsidiary, in same form & manner of Companys Standalone Financial Statements. The same are attached in the Annual Report.

Statement containing salient features of the Financial Statement of Subsidiaries/ Associate Companies/ Joint Ventures pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014 i.e. AOC- 1 is annexed herewith as Annexure III.

The Standalone & Consolidated Financial Results for the year ended 31st March, 2021 are briefly given below: -

Standalone Consolidated
Particulars 2020-21 (Rs) 2019-20 (Rs) 2020-21 (Rs) 2019-20 (Rs)
Sales & Other Income 78,10,61,569/- 65,54,62,726/- 78,19,77,277/- 65,54,62,726/-
Profit before Depreciation & Interest 3,21,81,349/- 3,69,01,827/- 3,49,35,361/- 3,56,17,934/-
Less:- Depreciation 1,74,74,716/- 2,08,16,219/- 1,80,33,075/- 2,08,16,962/-
Interest/Finance cost 57,59,128/- 53,76,106/- 57,62,153/- 53,76,376/-
Profit before exceptional Item 89,47,505/- 1,07,09,502/- 1,11,40,133/- 94,24,596/-
Add: Exceptional Items - - - -
Add: Extra Ordinary Item of Income - - - -
Profit before Tax 89,47,505/- 1,07,09,502/- 1,11,40,133/- 94,24,596/-
Less: Provision for Taxation 27,64,779/- 31,86,077/- 34,42,301/- 28,03,817/-
Profit after Taxation for the Year 61,82,726/- 75,23,425/- 76,97,832/- 66,20,779/-

2. SCHEME OF ARRANGEMENT OF DE-MERGER:

The Members are aware that the Scheme of Arrangement with Aveer Foods Limited (100% Subsidiary Company and Resulting Company) is approved by the Company in their Extra Ordinary General Meeting held on 27th April, 2021.

In this connection, the Directors would like to inform you as under:

a) The Company has received an Observation Letter from BSE Limited as on 6th November, 2020 pursuant to the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

b) The Company has filed a Joint Petition with Honble National Company Law Tribunal Mumbai Bench (NCLT) on 1st June, 2021 for their approval.

c) The Petition is under consideration of Honble NCLT.

3. COMPANYS AFFAIRS, PERFORMANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT

Financial and Present Performance:

During the year under review the Revenue from Operations of the Company was Rs 7,806.82 Lakh as against Rs 6,548.27 Lakh of the previous year. The Company has earned a Profit of Rs 61.82 Lakh, after depreciation, interest and tax.

Industry Structure, Development, Opportunities and Outlook:

The Company is mainly engaged in the food processing Industry which is showing remarkable growth. The Governments both Central and State are focusing on development of preservation of Agro Products and the main thrust is for processing of more and more agro cultivation.

The main revenue of the Company is from Products like Pickles, Ketchups, Chutneys and handmade & machine made Papad.

Product Development:

After a successful launch of Chutney Range, and Chinese Sauce range during the last year, this year the Company has achieved the increasing demand of the Chutney products, as during the lockdown period the instant chutney range has been widely used by the households for their home delicacies. Considering the increased demand of the products the Company has continued to develop the existing products as per customer preferences.

Company Performance Overview:

The beginning of the year 2020 has witnessed the global spread of COVID 19 which is continuing to grow at rapidly accelerating rate till date.This is the biggest global humanitarian crisis of our time and poses major challenges to public health systems, food security and employment. The social and economic impact of the pandemic has disrupted the lives and livelihood of millions of people and affected economies across the world. Many Countries, including our Country announced lockdowns which restricted the movement of personnel and material. This resulted in slowdown in the overall economy and business growth all over World.

However as the said Pandemic occurred at the flag end of the Financial Year under Report, the performance of the said Financial Year was not affected. The Company considering the restrictions on transportation facility faced problems in getting supplies of the raw material and labour supply during the said Pandemic period.

However the said difficulty was resolved, while ensuring the Health and Safety of the Staff and Workers the Company.

Your Directors wish to place on record their appreciation to the Companys Employees and workforce for their exceptional efforts during this Pandemic.

4. KEY FINANCIAL RATIOS:

Details of significant changes, (i.e., change of 25 percent or more, as compared to the immediately previous Financial Year) in Key Financial Ratio, along with detailed explanation thereof: -

Sr. Particulars No. Ratio as on 31st March, 2021 Ratio as on 31st March, 2020 % change Explanations, if any
1 Debtors Turnover 10.64 6.77 57.16 Refer Note 1
2 Inventory Turnover 3.79 3.00 26.33 Refer Note 2
3 Interest Coverage Ratio 2.55 2.99 (14.72) Not Applicable
4 Current Ratio 4.73 4.37 8.24 Not Applicable
5 Debt Equity Ratio 0.22 0.14 57.14 Refer Note 3
6 Operating Profit Margin (%) 1.88 2.46 (23.58) Refer Note 2
7 Net Profit Margin (%) 0.79 1.15 (31.30) Refer Note 2

Details of change in Ratios on Return on Net Worth as compared to the immediately previous Financial Year as follows:

Sr. No. Particulars Ratio of Return on Net worth as on 31st March, 2021 Ratio of Return on Net Worth as on 31st March, 2020 % change Explanations, If any
1 Return on Net Worth 1.72 2.13 (19.25) Refer Note 4

Notes:

1. The Company has made substantial recovery from the debtors resulting in a decrease of the amount of trade receivable and consequent increase in debtors turnover ratio as compared to last year.

2. Due to change in product mix and increase in material cost, the material consumption ratio has increased in the current year as compared to the previous year, resulting in a decrease in the operating profit as well as net profit ratio. Further, due to increase in cost of material consumption, Inventory Turnover ratio has also increased as compared to previous year.

3. Debt Equity Ratio has been increased on account of availing of Cash Credit Facility during the year.

4. The decrease in operating profit margin & resulting decrease in net profit margin led to decline in the return on net worth.

5. TRANSFER TO RESERVES

Your Company has not proposed to transfer any amount to the General Reserve. An amount of 61,82,726/- is proposed to be retained in the Profit and Loss Account.

6. DIVIDEND

To strengthen the long-term Capital needs of the Company, the Directors do not recommend any Dividend on the Equity Shares of the Company for the Financial Year ended 31st March 2021.

7. CAUTIONARY STATEMENT

Statements in this Report, particularly those which relate to management discussion and analysis, describing the Companys objectives, projections, estimates and expectations may constitute "forward looking statements" within the meaning of applicable laws and regulations. Actual Results might differ materially from those either expressed or implied.

8. DIRECTORS

a) In accordance with provisions of Section 152 of Companies Act, 2013, Regulation 17[1A] of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and in terms of Articles of Association of the Company, Mr. Hukmichand Chordia [DIN: 00389587], retires by rotation at forthcoming Annual General Meeting and, being eligible, offers himself for re-appointment.

b) The term of appointment of Dr Ajitkumar Mandlecha [DIN: 06822184] as an Independent Director expired on 10th April, 2021.

Necessary resolutions for appointment of Mr. Hukmichand Chordia as a Director, and re-appointment of Dr. Ajitkumar Mandlecha an Independent Director for a further term of 5 years are recommended for your approval.

9. PUBLIC DEPOSITS

During the Financial Year 2020-2021, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.

The Central Government Ministry of Corporate Affairs vide notification dated 22nd January, 2019 read with further notification dated 30th April, 2019 required the Companies to file return of Deposits or Particulars of Transactions not considered as Deposit. The Company has complied with the said notification.

10. INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY

The Company has adequate internal control systems to ensure operational efficiency, accuracy and promptness in financial reporting and compliance of various laws and regulations.

The internal control system is supported by the internal audit process. An Internal Auditor has been appointed for this purpose.

The Audit Committee of the Board reviews the Internal Audit Report and the adequacy and effectiveness of internal controls periodically.

11. LISTING FEES

The Annual Listing Fees for the Financial Year 2020-2021 as well as for the financial year 2021-2022 have been paid to BSE Limited, where your Companys shares are listed.

12. HOLDING COMPANIES, SUBSIDIARY COMPANIES AND ASSOCIATE COMPANIES

The Company has acquired 100% stake of Aveer Foods Limited and as such the said Aveer Foods Limited has become 100% Subsidiary Company.

13. EXTRACT OF ANNUAL RETURN

Pursuant to provisions of Section 134 read with Section 92(3) of the Companies Act, 2013, as amended; copies of annual returns filed with the MCA are available at the website of the Company viz., www.chordiafoods.com and the Annual Return for the financial year 2020-2021 will be uploaded at the website of the Company after filing with the MCA.

14. NUMBER OF MEETINGS OF THE BOARD

During the year Ten (10) Board Meetings were convened and held, including one Independent Directors meeting. The meeting of Independent Directors was held on 31st March 2021. The details of the said Meetings held are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

15. DIRECTORS RESPONSIBILITY STATEMENT

Directors Responsibility Statement prepared pursuant to the provisions of Section 134(5) of the Companies Act, 2013, is furnished below as required under Section 134(3)(c).

Directors state that:-

a) In the preparation of the Annual Accounts for the year ended 31st March, 2021 the applicable Accounting Standards have been followed and there were no material departures;

b) Accounting Policies as mentioned in Part-B to the Financial Accounts have been selected and applied consistently. Further judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2021 and of the Profit of the Company for the year ended on that date;

c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The Annual Financial Statements have been prepared on a going concern basis;

e) Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and

f) Proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

16. DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors have given declarations under Section 149( 7) of the Companies Act, 2013, that they meet the criteria of Independence as laid down under Section 149 (6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

17. AUDITORS AND AUDITORS REPORT

a) Internal Auditor:

Mr. Nisarg Shah Chartered Accountant was appointed as an Internal Auditor of the Company as per the provisions of Section 138 of the Companies Act, 2013 for the Financial Year 2020-2021.

He has conducted Internal Audits periodically and submitted his reports to the Audit Committee. His Reports have been reviewed by the Statutory Auditors and the Audit Committee.

b) Statutory Auditor:

Mr. Bharat H Shah, Chartered Accountant was appointed as the Companys Statutory Auditor and his

term of appointment is valid till the conclusion of 40th Annual General Meeting to be held in the year 2022.

The Auditors Report to the Shareholders for the year under review does not contain any qualification.

No frauds have been reported by the Auditors under Section 143(12) of the Companies Act, 2013 requiring disclosure in Boards Report.

c) Secretarial Audit:

The Secretarial Audit Report is annexed herewith as Annexure I to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

d) Cost Audit:

For the Financial Year under Report the appointment of Cost Auditor and obtaining of their Report was not applicable to the Company.

18. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

The Details of Loans, Guarantees and Investments under Section 186 of the Companies Act, 2013 read with Companies (Meeting of Board and its Powers) Rules, 2014 are as follows:

a) During the year under report the Company has given Unsecured Loan to Aveer Foods Limited (100% Subsidiary Company) the balance of which as on 31 st March, 2021 was Rs 6,59,70,116/-.

b) There are no Guarantees given/issued by Company in accordance with Section 186 of the Companies Act, 2013 read with Rules issued there under.

c) Details of Investments in Equity Shares made by the Company as on 31s* March, 2021 (including Investments made in the previous years) in quoted and unquoted Shares are as under:-

Name of Entity Amount as at 31st March, 2021 (Rs) Amount as at 31st March, 2020 (Rs)
1. Unquoted
(a) 1,000 Shares of Rupee Coop. Bank Ltd. of Rs 50/- each 50,000/- 50,000/-
(b) 3380 Shares of Vishweshwar Sahkari Bank Ltd of Rs 50/- each. (*) 1,69,000/- 2,13,905/-
(c) Aveer Foods Ltd. 1,00,000/- 1,00,000/-
TOTAL 3,19,000/- 3,63,905/-

(*) The difference between last year & this year end amount is due to encashment of dividend.

19. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED IN SUB SECTION (1) OF SECTION 188 OF THE COMPANIES ACT, 2013

Pursuant to provisions of Section 134 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014, the Particulars of contracts of Arrangements entered into by the Company with Related Parties have been done at Arms Length and are in the ordinary course of business.

The Particulars of the transactions so entered in to with Related Parties have been provided in Form No. AOC -2 attached herewith as Annexure II.

20. MATERIAL CHANGES AND COMMITMENTS BETWEEN THE DATE OF THE BALANCE SHEET AND THE DATE OF REPORT AND SIGNIFICANT/ MATERIAL ORDERS PASSED BY THE REGULATORS.

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of this report.

21. CONSERVATION OF ENERGY, TECHNOLOGY

ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

A. Conservation of Energy and Technology

Absorption:

a) The Companys operations involve very low energy consumption. Wherever possible energy conservation measures have been implemented and there are no further areas where energy conservation measures can be taken. However, efforts to conserve and optimize the use of Energy through improved Operational methods and other means will continue.

b) The Company has no collaborations and is engaged in the manufacture of the products by its own developed methods/operations. The Company has setup a Research and Development Centre whose emphasis is on product development, product quality, Cost reduction, energy conservation and improvement in process productivity. The Company has also setup Laboratory and Quality Control Department to ensure the quality of different products manufactured.

B. Foreign Exchange Earnings and Outgo:

Foreign Exchange Earnings and Outgo during the year was Nil.

22. RISK MANAGEMENT POLICY

The Company has formulated various policies and procedures to face the risks and challenges affecting the Business of the Company. The Company has a Risk Management Policy in place and is being reviewed regularly. Various risks such as financial risk arising out of the operations, increased competition in the sectors/areas of the Company, business conditions in the markets and other risks have been identified and taken into account while formulating policies. The Directors get themselves trained and educated on various risks factors. Periodic reviews are also being taken to improve the same.

23. NOMINATION AND REMUNERATION POLICY

The Board has on the recommendation of Nomination and Remuneration Committee framed the policy for selection and appointment of Directors, KMPs and senior Management personnel and their remuneration. The same is available on companys website at http://chordiafoods.com/wp-content/ uploads/2021/04/REMUNERATION-POLICYpdf

24. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The provisions of Section 135 of the Companies Act, 2013 in respect of CSR activities are not applicable to the Company.

25. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, Rules there under and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration and other statutory committees. Performance valuation has been carried out as per the Nomination and Remuneration Policy.

26. CHANGE IN THE NATURE OF BUSINESS, IF ANY.

Company has acquired 100% stake in Aveer Foods Limited due to which the said Aveer Foods Limited has become 100% subsidiary Company of this Company. Apart from this there is no change in the nature of business.

27. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR

Directors appointed/ceased during the Year

During the year under report there was no change in the composition of the Board of Directors of the Company.

28. COMPOSITION OF AUDIT COMMITTEE

The composition of the Audit Committee has been mentioned in the Corporate Governance Report annexed to this Report.

29 PARTICULARS OF EMPLOYEES

Particulars of Employees and information pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure IV.

30. SIGNIFICANT ORDERS PASSED BY REGULATORS, COURTS OR TRIBUNALS IMPACTING GOING CONCERN AND COMPANYS OPERATIONS

The Company has not received any orders from any regulator, court & tribunals.

31. CASH FLOW

A Cash Flow Statement for the year ended 31st March, 2021 is attached to the Financial Statements.

32. CORPORATE GOVERNANCE

In terms of Regulation 34(3) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a separate report on Corporate Governance is provided together with a Certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Listing Regulations. A Certificate of the CEO/Managing Director and CFO of the Company in terms of Listing Regulations, inter-alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, are part of this Annual Report.

33. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

During the year under Report the Company has in place Anti-sexual Harassment Policy and also complied with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and constituted an ‘Internal Complaints Committee to ensure protection against sexual harassment of women at workplace and for the prevention and redressal of complaints of sexual harassment at all the administrative units and offices. During the Year under Report, there was no instance of Sexual Harassment of Women at Workplace.

34. SECRETARIAL STANDARDS:

During the year under review the Company has complied with all applicable mandatory Secretarial Standards issued by Institute of Company Secretaries of India, and approved by the Central Government u/s 118(10) of the Companies Act, 2013.

35. APPRECIATION

Your Directors wish to place on record their sincere appreciation of the continued support from the Companys

Bankers, valued Customers, Distributors, Suppliers of the Company.

The Directors are also thankful to the officials of the Government of India, State Governments,Local Authorities for their continued help and timely assistance extended to the Company.

By Order of the Board of Directors
For Chordia Food Products Limited
Hukmichand S. Chordia
Place: - Pune Chairman
Date: 10th August, 2021 [DIN: 00389587]