Chothani Foods Ltd Directors Report.

To

The Members

CHOTHANI FOODS LIMITED

The directors take pleasure in presenting the 08th Annual report together with the Audited financial accounts for the Year ended 31st March, 2021.

FINANCIAL RESULTS

The working results of the company for the year ended are as follows:

Particulars Financial Year ended
31/03/2021 31/03/2020
Total Income 3,96,85,530.59 4,57,43,908.40
Finance Charges 10,26,064.51 8,99,431.00
Depreciation 7,66,125.73 8,89,924.28
Income Tax (Current and prior year) 2,35,981.00 3,59,899.00
Deferred Tax Liability 7,707.22 21,839.24
Extra-ordinary Items NIL NIL
Net Profit/(Loss) After Tax 8,82,702.83 12,24,832.40
Profit/(Loss) carried to Balance Sheet 8,82,702.83 12,24,832.40

FINANCIAL HIGHLIGHTS

During the year, the net profit from operations of your Company is INR 8,82,702.83 (Rupees Eight Lakhs Eighty Two Thousand Seven Hundred Two and Eighty Three Paise only).

CAPITAL STRUCTURE

The Authorized Share Capital of your Company as on 31st March, 2021, stood at INR 5,50,00,000.00 (Indian Rupees Five Crore Fifty Lakhs Only), comprising of 55,00,000 Equity Shares (Fifty Five Lakhs) of INR 10/ - each.

As on 31st March, 2021, the issued, subscribed and paid up share capital of your Company stood at INR 5,16,00,000.00 ((Indian Rupees Five Crore Sixteen Lakhs Only), comprising of 51,60,000 Equity Shares (Fifty One Lakhs Sixty Thousand) of INR 10.00 each. During the year under review, the Company has not made any allotment of Shares / Securities.

DIVIDEND

No divined is being recommended by the Directors for the year ending on 31st March, 2021. As the Board of Directors wants to plough back the profit in the business.

DEPOSIT

During the year under review your company has not accepted any deposits from the public and therefore no information is required to be furnished in respect of outstanding deposits.

CHANGES IN NATURE OF BUSINESS

There is no significant change made in the nature of the company during the financial year.

NAME OF THE COMPANIES, WHICH HAVE BECOME OR CEASED TO BE SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES

Not Applicable as the company has no subsidiaries, joint ventures or associates company.

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM

The Company has established a well-defined process of risk management, wherein the identification, analysis and assessment of the various risks, measuring of the probable impact of such risks, formulation of risk mitigation strategy and implementation of the same takes place in a structured manner. Though the various risks associated with the business cannot be eliminated completely, all efforts are made to minimize the impact of such risks on the operations of the Company. The Company on various activities also puts necessary internal control systems in place across the board to ensure that business operations are directed towards attaining the stated organizational objectives with optimum utilization of the resources.

DEMATERIALIZATION OF SHARES

100% Shareholding of the Company is in dematerialized form and the Company has entered into Tripartite Agreement with NSDL and CDSL for providing demat facilities to its shareholders KFin Technologies Private Limited continue to be our Registrar and Share Transfer Agent.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of business. Particulars of contract or arrangements with related parties is annexed herewith in Form AOC- 2 as "Annexure - A"

SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators/Courts, which would impact the going concern status of the Company and its future operations.

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

During the year, Mr. Ashok Chothani was liable to retire by rotation and was re-appointed in the 7th AGM. The Company has also received Disclosure of Interest by Directors as per the provisions of Section 184 of Companies Act, 2013.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTOR(S) UNDER SECTION 149

The Board confirms that all the Independent Directors on the Board have given a declaration of their Independence to the Board as required under Section 149(6) of the Companies Act, 2013.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The company has not given any loans or guarantees or investments covered under the provisions of section 186 of the Companies Act, 2013 during the Financial Year 2020-21.

RESERVES

Your Company has transferred a net profit of INR 8,82,702.83 (Rupees Eight Lakhs Eighty Two Thousand Seven Hundred Two and Eighty Three Paise only) to Reserves during the financial year under review.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Monil Ashok Chothani, Director (DIN: 07978664) of the company is liable to retire by rotation at the ensuring Annual General Meeting and being eligible, offers himself for re-appointment.

The Independent Directors of the Company have submitted the declaration of independence pursuant to Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provide in section 149(6) of the Companies Act, 2013.

The Board of Directors has appointed Mr. Nikunj Vasantlal Chheda (DIN: 08033201) as an Additional Director in the capacity of Non-Executive Independent Director of the Company on 31st August, 2021 on the recommendation of Nomination and Remuneration Committee, he shall hold office up to the date of the ensuing annual general meeting and being eligible offered himself for appointment as an Independent director by the members in the annual general meeting.

BOARD EVALUATION

In compliance with the provisions of the Companies Act, 2013 and other provisions, if any, 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 Nomination & Remuneration Committee and Shareholders Grievance Committee.

MEETING OF BOARD OF DIRECTORS A) Number of Board Meetings in the year

During the year 05 meetings of the Board of Directors were held. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

Sr. No. Date on which board Meetings were held
1. 15th June, 2020
2. 30th July, 2020
3. 13 th November, 2020
4. 7th December, 2020
5. 22nd February. 2021

B) Attendance of Directors at Board meetings held in the previous year are as follows:

Name of Director Category of Director No. of Board Meeting attended Attendance at the last AGM No. of Committee Membership in which he/she is a Chair Person
1 Neeraj Ashok Chothani (DIN: 06732169) Managing Director 5 Yes Member in Two Committee
2 Ashok Shivji Chothani (DIN:06732163) Chairman &Director 5 Yes Not member in any committee
3 Sunil Shivji Chothani (DIN: 06732173) Executive NonIndependent Director 5 Yes Member in Two Committee
4 Mansi Harsh Dave (DIN: 07663806) Independent Director 5 Yes Member in Three Committee
5 Monil Chothani (DIN: 07978664) Non-Executive Non Independent Director 5 Yes Member in Two Committee

COMMITTEES

There are three Committees constituted as per Companies Act, 2013. They are:

A. Audit Committee

B. Nomination & Remuneration Committee

C. Stakeholders & Relationship Committee

A. Audit Committee

During the year, Four (5) Audit Committee meetings were held on 15-06-2020, 30-07-2020, 13-11-2020, 07-12-2020 and 22-02-2021.

Name Designation Position in committee No. of Meetings Attended
1 Mrs. Mansi Harsh Dave Independent Director Chairman 4
2 Mr. Sunil Shivii Chothani Whole-Time Director Member 4
3 Mr. Neeraj Ashok Chothani Managing Director Member 4

B. Nomination and Remuneration Committee

During the year Two (2) Nomination & Remuneration Committee meetings were held on 30-072020 and 13-11-2020.

Name Designation Position in Committee No. of Meetings Attended
1 Mrs. Mansi Harsh Dave Independent Director Chairperson 02
2 Mr. Sunil Shivji Chothani Whole-Time Director Member 02
3 Mr. Monil Ashok Chothani Director Member 02

C. Stakeholders Relationship Committee

During the year Two (2) Stakeholders Relationship Committee meetings were held on 30-07-2020 and 13-11-2020.

Name Designation Position in Committee No. of Meetings Attended
1 Mrs. Mansi Harsh Dave Independent Director Chairman 02
2 Mr. Monil Ashok Chothani Whole-Time Director Member 02
3 Mr. Neeraj Ashok Chothani Managing Director Member 02

D. Independent Director Meeting:

During the year, no Independent Director meeting was held as the Company has only one director as an Independent Director. The Company is in process to identify the appropriate candidate who can act as an Independent Director.

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 THE REPORT

Mr. Nikunj Vasantlal Chheda has been appointed as an Additional Director in the capacity of Independent Director of the Company with effect from 31st August, 2021.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

Pursuant to rule 8(3) of the Companies (Accounts) Rules, 2014, it is stated that the Company has no particulars to be furnished under the head Energy Conservation and Technology Absorption because it has carried on no manufacturing activity during the year under review. The operations of the Company are not power intensive. The Company is, however, taking every possible steps to conserve the energy wherever possible. It has imported no technology.

During the year there is no expenditure/Income of foreign exchange.

EXPLANATION/COMMENTS BY THE BOARD ON QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE IN AUDITORS REPORT AND SECRETARIAL AUDIT REPORT

During the audit Period, only 1 Independent Directors is on board of directors of the Company, One Director had resigned from the Board of Directors of the Company in the year 2018-19 and since then the place of 1 Independent Director is vacant.

The Company was in process to identify the appropriate candidate who can act as an Independent Director and Now, Mr. Nikunj Vasantlal Chheda has been appointed as an Additional Director in the capacity of Independent Director of the Company with effect from 31st August, 2021.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

The Auditors have not reported any fraud(s) during the period under review.

DISCLOSURE ABOUT CORPORATE SOCIAL RESPONSIBILITY

In line with the provisions of the Companies Act, 2013 and the rules framed there under with respect to the Corporate Social Responsibility (CSR), your company is not governed by the provisions of Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014. So, the Company is not required to formulate a policy on CSR and also has not constituted a CSR Committee.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as

"Annexure - B".

DIRECTORS RESPONSIBILITY STATEMENT

(i) To the best of their knowledge and belief and according to the information and explanation obtained by them, your Directors make the following statements in terms of the Section 134(3)(c) of the Companies Act, 2013.

(ii) That in the preparation of the annual financial statements for the year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(iii) That such accounting policies, as mentioned in the Financial Statements as Significant Accounting Policies have been selected and applied consistently and 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 March 31, 2021 and of the profit of the Company for the year ended on that date;

(iv) That 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;

(v) That the annual financial statements have been prepared on a going concern basis;

(vi) That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

(vii) That proper system to ensure compliance with the provisions of all applicable laws was in place and was adequate and operating effectively.

AUDITORS

(I) Statutory Auditors

M/s. Rakesh Agarwal & Associates, Chartered Accountants (Firm Registration No. 119168W) were appointed as statutory auditors of the company at 3rd AGM for a period of 5 years. Currently, they are holding office of the auditors up to the conclusion of the 8th AGM.

As per Section 139(2) of the Companies Act, 2013 (the Act), No listed company shall appoint or reappoint an individual as auditor for more than one term of five consecutive years.

Accordingly, as per the said requirements of the Act, M/s. Urvesh Tanna & Company (Proprietor), Chartered Accountants, (Firm Registration No. 143047W) is proposed to be appointed as statutory auditors of the company, for a period of 5 years, commencing from the conclusion of 8th AGM till the conclusion of the 13th AgM.

M/ s. Urvesh Tanna & Company, Chartered Accountants (Firm Registration No. 143047W), have consented to the said appointment and confirmed that his appointment, if made, would be within the limits specified under Section 141(3)(g) of the Act. He has further confirmed that he is not disqualified to be appointed as statutory auditors in terms of the provisions of the proviso to Section 139(1), Section 141(2) and Section 141(3) of the Act and the provisions of the Companies (Audit and Auditors) Rules, 2014.

The Audit Committee and the Board of Directors have recommended the appointment of M/s. Urvesh Tanna & Company, Chartered Accountants (Firm Registration No. 143047W), as statutory auditors of the Company from the conclusion of the 8th AGM till the conclusion of 13th AGM, to the shareholders.

(II) Secretarial Auditors

In terms of Section 204 of the Companies Act, 2013 and Rules made there under, M/s K Pratik & Associates, Practicing Company Secretary, have been appointed as a Secretarial Auditors of the Company. The Secretarial Audit report of the Secretarial Auditor is enclosed as "Annexure-C to this Report"

PARTICULARS OF EMPLOYEES

Disclosure pertaining to remuneration and other details as required under Section 197 (12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report and is marked as "Annexure-D " to this Report.

Further during the year, no employees of the Company were in receipt of remuneration in terms of the provisions of Section 197(12) of the Companies Act, 2013, read with Rules 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the financial year under review is annexed as a part of this Annual Report as "Annexure-E."

CORPORATE GOVERNANCE

Company is listed on BSE-SME. Hence, Corporate Governance Report is not applicable to the company for financial year 2020-21.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has a vigil mechanism named Whistle Blower Policy (WBP) to deal with instances of fraud and mismanagement, if any. This mechanism is looked after by the Audit Committee of the Company.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the Secretarial Standards on Meetings of the Board of Directors and General Meetings issued by the Institute of Company Secretaries of India (ICSI).

SEXUAL HARASSMENT

There was no case filled during the year, under the sexual harassment of women at workplace (Prevention, Prohibition & Redressal) Act, 2013. Further Company ensures that there is a healthy and safe atmosphere for every women employee at the workplace and made the necessary policies for safe and secure environment for women employee.

ACKNOWLEDGEMENT

The Board wishes to place on record their sincere appreciation and acknowledge with gratitude the effort put in and co-operation extended by bankers, shareholders, employees at all levels and all other associated persons, bodies or agencies for their continued support.