Chordia Food Products Ltd Directors Report.

To,

The Members,

The Directors have pleasure in presenting the 38th Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2020.

1. FINANCIAL RESULTS

A) STANDALONE FINANCIAL RESULTS

The Standalone Financial results for the year ended 31st March, 2020 are briefly given below:-

Particulars 2019-20 2018-19
(Rs) (Rs)
Sales & Other Income 65,54,62,726 61,05,73,907
Profit before Depreciation & Interest 3,69,01,827 5,88,74,927
Less:- Depreciation 2,08,16,219 2,07,63,827
Interest/Finance cost 53,76,106 94,95,535
Profit before exceptional Item 1,07,09,502 2,86,15,565
Add: Exceptional Items - -
Add: Extra Ordinary Item of Income - -
Profit before Tax 1,07,09,502 2,86,15,565
Less: Provision for Taxation 31,86,077 78,61,598
Profit after Taxation for the Year 75,23,425 2,07,53,967

B) CONSOLIDATED FINANCIAL RESULTS:

The Company has acquired 100% Stake of Aveer Foods Limited as on 14th August, 2019. Aveer Foods Limited, is a Company incorporated as on 11th April, 2019 under Companies Act, 2013. Consequent to the acquisition made by the Company, during the Financial year 2019-20 the Aveer Foods Limited has become 100% Subsidiary Company.

Accordingly, 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 IV.

2. SCHEME OF ARRANGEMENT OF DE-MERGER:

Considering the independent growth of each Division of the Company, the Management has decided to enter into Scheme of Arrangement between Chordia Food Products Limited and Aveer Foods Limited and their respective shareholders.

Accordingly the Board of Directors of your Company in its meeting held on 5th February, 2020 approved the draft of Scheme of Arrangement for Demerger of the Food Division (elaborated in the Scheme) of Chordia Food Products Limited into Aveer Foods Limited on a going concern basis;

and continuation of the Food Infra Division / Business in the Company itself i.e. Chordia Food Products Limited.

The Company has approached BSE Limited (Bombay Stock Exchange) by submitting the draft Scheme of Arrangement to effect the above De-merger. The Companys application with BSE Limited is under its consideration.

Once cleared by BSE Limited, it is subject to the approval of the shareholders and creditors of both the companies and is further subject to approval of Honble National Company Law Tribunal (NCLT) Mumbai.

On the De-merger coming into effect after the approval of Honble National Company Law Tribunal Mumbai [NCLT] Aveer Foods Limited will issue new Equity Shares to the then existing Equity Shareholders of the Company in equal proportion of 1:1. The Equity Shares so allotted shall be listed on BSE Limited.

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 6554.63 Lakh as against Rs 6105.73 Lakh of the previous year. The Company has earned a profit of Rs 75.23 Lakh, after carrying 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 and handmade & machine made Papad.

Product Development

The Company is having its own Research & Development department and the full fledged Laboratory and Quality Control force in place, with the help of this, the Company is diversifying the business activities by introducing some unique food items which are non seasonal in nature. During the Financial year 2018-19, the Company has introduced unique "Chutney Range" which is highly qualitative and well demanded by the Market.

After a successful launch of Chutney Range, the Company has introduced new range of Chinese Sauces and Ketchup such as Red Chilli Sauce, Green Chili Sauce, Soya Sauce and Hot & Sweet Red Chili Sauce during Financial Year i.e. FY 2019-20.

COVID 19- PANDEMIC:

The beginning of the year 2020 has witnessed the global spread of COVID 19 which is continuing to grow at rapidly accelerating rate. 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.

As the Company is in Food Industry the Government Restrictions during the Pandemic were little relaxed. Accordingly the Company continued its production to the possible extent. The Company considering the restrictions on transportation facility faced problems in getting supplies of the raw material and labour supply during a peak season of manufacturing of Mango Pickle. However the said difficulty was resolved by making alternative arrangements and decentralizing the manufacturing/ processing activities.

While ensuring the Health and Safety of the Staff and Workers the Company could succeed in timely supply of Finished Goods to the end Customers. Thus there was no major impact of the Pandemic.

Your Directors wish to place on record their appreciation to the Companys Employees and workforce for their exceptional efforts during this Pandemic. The Company has also shown the gesture in paying Incentives to them who worked 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. No. Particulars Ratio as on 31st March, 2020 Ratio as on 31st March, 2019 % change Explanations, if any
1 Debtors Turnover 6.77 4.74 42.83 Refer Note 1
2 Inventory Turnover 3.00 3.18 (5.66) Not Applicable
3 Interest Coverage Ratio 2.99 4.01 (25.44) Refer Note 2
4 Current Ratio 4.37 4.78 (8.58) Not Applicable
5 Debt Equity Ratio 0.14 0.20 (30.00) Refer Note 3
6 Operating Profit Margin (%) 2.46 6.25 (60.64) Refer Note 4
7 Net Profit Margin (%) 1.15 3.40 (66.18) Refer Note 4

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 31s* March, 2020 Ratio of Return on Net Worth as on 31st March, 2019 % change Explanations, If any
1 Return on Net worth 2.13 6.13 (65.25) Refer Note 5

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 the Debtor Turnover Ratio in the current year as compared to last year.

2. The decrease in Interest Coverage ratio is due to decrease in Net Profit of the company.

3. Debt Equity ratio has decreased on account of repayment of loans during the year.

4. 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.

5. 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 Rs 75,23,425/- 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 31s* March 2020.

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

In accordance with provisions of Section 152 of Companies Act, 2013 and in terms of Articles of Association of the Company, Mr. Bapu Gavhane [DIN: 00386217], retires by rotation at forthcoming Annual General Meeting and, being eligible, offers himself for re-appointment.

9. PUBLIC DEPOSITS

During the financial year 2019-2020, 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 2019-2020 as well as for the financial year 2020-2021 have been paid to BSE Limited, where your Companys shares are listed.

12. HOLDING COMPANIES, SUBSIDIARY COMPANIES AND ASSOCIATE COMPANIES

During the current financial year 2019-2020 as on 14th August, 2019, 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

The details forming part of the extract of the Annual Return in Form MGT- 9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, are set out herewith as Annexure I to this Report.

14. NUMBER OF MEETINGS OF THE BOARD

During the year Seven (7) Board Meetings were convened and held, including one independent Directors meeting. The meeting of Independent Directors was held on 15th March 2020. 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, 2020 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, 2020 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 DIRECTOR

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 Financial Year 2019-20.

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 - II 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 Loan, Guarantee and Investment 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 granted an Unsecured Loan of Rs 35,06,767/- to Aveer Foods Limited (100% Subsidiary Company)

b) There are no Guarantees 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 31st March, 2020 (including Investments made in the previous years) in quoted and unquoted Shares are as under:-

Name of Entity Amount as at 31st March, 2020 (Rs) Amount as at 31st March, 2019 (Rs)
1. Unquoted
(a) 1,000 Shares of Rupee Co-op. Bank Ltd. of Rs 50/- each 50,000/- 50,000/-
(b) Investment in Vishweshar Sahakari Bank Ltd. 2,13,905/- 2,13,905/-
TOTAL 2,63,905/- 2,63,905/-

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 Or 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 III.

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 Rs Nil.

22. RISK MANAGEMENT POLICY

At present the Company has not formulated any Policy for Risk Management, however during the course of business the Management looks after and study the Business Risks involved.

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.

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 became 100% subsidiary Company of this Company.

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 V.

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, 2020 is attached to the Financial Statement.

32. CORPORATE GOVERNANCE

The Corporate Governance provisions as specified under Regulation 17 to 27 and clauses (b) to (i) of Sub- Regulation (2) of Regulation 46 and Para C, D and E of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (Listing Regulations) are not applicable to the Company pursuant to the provisions of regulation 15(2) of Listing Regulations, 2015. However, the Company has furnished the Corporate Governance Report, voluntarily as an additional disclosure and as a good Corporate Governance Practice, along with Auditors Certificate on Corporate Governance.

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

During the year under review, there were no instances occurred pursuant to the aforesaid Act.

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
Place: - Pune Hukmichand S. Chordia
Date: 13th August, 2020 Chairman
[DIN: 00389587]