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Chordia Food Products Ltd.

BSE: 519475 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE975C01011
BSE 15:04 | 14 May 174.80 29.10
(19.97%)
OPEN

151.00

HIGH

174.80

LOW

145.00

NSE 05:30 | 01 Jan Chordia Food Products Ltd
OPEN 151.00
PREVIOUS CLOSE 145.70
VOLUME 21307
52-Week high 174.80
52-Week low 75.45
P/E 71.06
Mkt Cap.(Rs cr) 70
Buy Price 174.80
Buy Qty 9557.00
Sell Price 0.00
Sell Qty 0.00
OPEN 151.00
CLOSE 145.70
VOLUME 21307
52-Week high 174.80
52-Week low 75.45
P/E 71.06
Mkt Cap.(Rs cr) 70
Buy Price 174.80
Buy Qty 9557.00
Sell Price 0.00
Sell Qty 0.00

Chordia Food Products Ltd. (CHORDIAFOOD) - Director Report

Company director report

To

The Members

The Directors have pleasure in presenting the 38th Annual Report together with theAudited 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 givenbelow:-

Particulars 2019-20 2018-19
(Rs) (Rs)
Sales & Other Income 655462726 610573907
Profit before Depreciation & Interest 36901827 58874927
Less:- Depreciation 20816219 20763827
Interest/Finance cost 5376106 9495535
Profit before exceptional Item 10709502 28615565
Add: Exceptional Items - -
Add: Extra Ordinary Item of Income - -
Profit before Tax 10709502 28615565
Less: Provision for Taxation 3186077 7861598
Profit after Taxation for the Year 7523425 20753967

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 Act2013. Consequent to the acquisition made by the Company during the Financial year 2019-20the Aveer Foods Limited has become 100% Subsidiary Company.

Accordingly pursuant to provisions of Section 129 of the Companies Act 2013 readwith Companies (Accounts) Rules 2014 and applicable accounting standards the Company hasprepared Consolidated Financial Statements along with the Financial Statements of theSubsidiary in same form & manner of Company's Standalone Financial Statements. Thesame are attached in the Annual Report.

Statement containing salient features of the financial statement ofSubsidiaries/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 isannexed herewith as Annexure IV.

2. SCHEME OF ARRANGEMENT OF DE-MERGER:

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

Accordingly the Board of Directors of your Company in its meeting held on 5th February2020 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 agoing 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 draftScheme of Arrangement to effect the above De-merger. The Company's application with BSELimited is under its consideration.

Once cleared by BSE Limited it is subject to the approval of the shareholders andcreditors of both the companies and is further subject to approval of Hon'ble NationalCompany Law Tribunal (NCLT) Mumbai.

On the De-merger coming into effect after the approval of Hon'ble National Company LawTribunal Mumbai [NCLT] Aveer Foods Limited will issue new Equity Shares to the thenexisting Equity Shareholders of the Company in equal proportion of 1:1. The Equity Sharesso allotted shall be listed on BSE Limited.

3. COMPANY'S 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 6554.63Lakh as against Rs 6105.73 Lakh of the previous year. The Company has earned a profit ofRs 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 showingremarkable growth. The Governments both Central and State are focusing on development ofPreservation of Agro Products and the main thrust is for processing of more and more agrocultivation.

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 fullfledged Laboratory and Quality Control force in place with the help of this the Companyis diversifying the business activities by introducing some unique food items which arenon seasonal in nature. During the Financial year 2018-19 the Company has introducedunique "Chutney Range" which is highly qualitative and well demanded by theMarket.

After a successful launch of Chutney Range the Company has introduced new range ofChinese 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 iscontinuing to grow at rapidly accelerating rate. Many Countries including our Countryannounced lockdowns which restricted the movement of personnel and material. This resultedin slowdown in the overall economy and business growth all over World.

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

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

Your Directors wish to place on record their appreciation to the Company's Employeesand workforce for their exceptional efforts during this Pandemic. The Company has alsoshown 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 theimmediately previous Financial Year) in key financial ratio along with detailedexplanation 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 immediatelyprevious 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 decreaseof the amount of trade receivable and consequent increase in the Debtor Turnover Ratio inthe current year as compared to last year.

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

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 consumptionratio has increased in the current year as compared to the previous year resulting in adecrease in the operating profit as well as net profit ratio.

5. The decrease in Operating Profit margin & resulting decrease in Net Profitmargin 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 Amountof Rs 7523425/- 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 notrecommend any Dividend on the Equity Shares of the Company for the Financial Year ended31s* March 2020.

7. CAUTIONARY STATEMENT

Statements in this Report particularly those which relate to management discussion andanalysis describing the Company's objectives projections estimates and expectations mayconstitute "forward looking statements" within the meaning of applicable lawsand regulations. Actual Results might differ materially from those either expressed orimplied.

8. DIRECTORS

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

9. PUBLIC DEPOSITS

During the financial year 2019-2020 your Company has not accepted any deposit withinthe meaning of Sections 73 and 74 of the Companies Act 2013 read together with theCompanies (Acceptance of Deposits) Rules 2014.

The Central Government Ministry of Corporate Affairs vide notification dated 22ndJanuary 2019 read with further notification dated 30th April2019 required the Companiesto file return of Deposits or Particulars of Transactions not considered as Deposit. TheCompany has complied with the said notification.

10. INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY

The Company has adequate internal control systems to ensure operational efficiencyaccuracy and promptness in financial reporting and compliance of various laws andregulations.

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

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

11. LISTING FEES

The annual listing fees for the financial year 2019-2020 as well as for the financialyear 2020-2021 have been paid to BSE Limited where your Company's 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 hasacquired 100% stake of Aveer Foods Limited and as such the said Aveer Foods Limited hasbecome 100% subsidiary company.

13. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT- 9 inaccordance 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 thisReport.

14. NUMBER OF MEETINGS OF THE BOARD

During the year Seven (7) Board Meetings were convened and held including oneindependent Directors meeting. The meeting of Independent Directors was held on 15th March2020. 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 CompaniesAct 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.

15. DIRECTOR'S RESPONSIBILITY STATEMENT

Directors' Responsibility Statement prepared pursuant to the provisions of Section134(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 theapplicable Accounting Standards have been followed and there were no material departures;

b) Accounting Policies as mentioned in Part-B to the Financial Accounts have beenselected and applied consistently. Further judgments and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March 2020 and of the Profit of the Company for the year ended on thatdate;

c) Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets 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 controlswere adequate and were operating effectively; and

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

16. DECLARATION BY INDEPENDENT DIRECTOR

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

17. AUDITORS AND AUDITORS' REPORT

a) Internal Auditor:

Mr. Nisarg Shah Chartered Accountant was appointed as an Internal Auditor of theCompany as per the provisions of Section 138 of the Companies Act 2013 for Financial Year2019-20.

He has conducted internal audits periodically and submitted his reports to the AuditCommittee. His Reports have been reviewed by the Statutory Auditors and the AuditCommittee.

b) Statutory Auditor:

Mr. Bharat H Shah Chartered Accountant was appointed as the Company's StatutoryAuditor and his term of appointment is valid till the conclusion of 40th Annual GeneralMeeting to be held in the year 2022.

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

No frauds have been reported by the Auditors under Section 143(12) of the CompaniesAct 2013 requiring disclosure in Board's Report.

c) Secretarial Audit:

The Secretarial Audit Report is annexed herewith as Annexure - II to this Report. TheSecretarial Audit Report does not contain any qualification reservation or adverseremark.

d) Cost Audit:

For the Financial Year under Report the appointment of Cost Auditor and obtaining oftheir 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 Act2013 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 Rs3506767/- to Aveer Foods Limited (100% Subsidiary Company)

b) There are no Guarantees issued by Company in accordance with Section 186 of theCompanies 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 asunder:-

Name of Entity Amount as at 31st March 2020 (Rs) Amount as at 31st March 2019 (Rs)
1. Unquoted
(a) 1000 Shares of Rupee Co-op. Bank Ltd. of Rs 50/- each 50000/- 50000/-
(b) Investment in Vishweshar Sahakari Bank Ltd. 213905/- 213905/-
TOTAL 263905/- 263905/-

19. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED IN SUBSECTION (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) ofthe Companies (Accounts) Rules 2014 the Particulars of contracts Or Arrangements enteredinto by the Company with Related Parties have been done at Arm's Length and are in theordinary course of business.

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

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

There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the Financial Year of the Company towhich 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 Company's operations involve very low energy consumption. Wherever possibleenergy conservation measures have been implemented and there are no further areas whereenergy conservation measures can be taken. However efforts to conserve and optimize theuse 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 productsby its own developed methods/operations. The Company has setup a Research and DevelopmentCentre whose emphasis is on product development product quality Cost reduction energyconservation and improvement in process productivity. The Company has also setupLaboratory and Quality Control Department to ensure the quality of different productsmanufactured.

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 howeverduring the course of business the Management looks after and study the Business Risksinvolved.

23. NOMINATION AND REMUNERATION POLICY

The Board has on the recommendation of Nomination and Remuneration Committee framed thepolicy for selection and appointment of Directors KMP's and senior Management personneland their remuneration.

24. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The provisions of Section 135 of the Companies Act 2013 in respect of CSR activitiesare 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 carriedout an annual performance evaluation of its own performance the Directors individually aswell as the evaluation of the working of its Audit Nomination and Remuneration and otherstatutory committees. Performance valuation has been carried out as per the Nomination andRemuneration Policy.

26. CHANGE IN THE NATURE OF BUSINESS IF ANY.

Company has acquired 100% stake in Aveer Foods Limited due to which the said AveerFoods Limited has became 100% subsidiary Company of this Company.

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

Directors appointed/ceased during the Year

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

28. COMPOSITION OF AUDIT COMMITTEE

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

29 PARTICULARS OF EMPLOYEES

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

30. SIGNIFICANT ORDERS PASSED BY REGULATORS COURTS OR TRIBUNALS IMPACTING GOINGCONCERN AND COMPANY'S 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 FinancialStatement.

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 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (ListingRegulations) are not applicable to the Company pursuant to the provisions of regulation15(2) of Listing Regulations 2015. However the Company has furnished the CorporateGovernance Report voluntarily as an additional disclosure and as a good CorporateGovernance Practice along with Auditors Certificate on Corporate Governance.

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

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

34. SECRETARIAL STANDARDS:

During the year under review the Company has complied with all applicable mandatorySecretarial Standards issued by Institute of Company Secretaries of India and approved bythe 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 continuedsupport from the Company's Bankers valued Customers Distributors Suppliers of theCompany.

The Directors are also thankful to the officials of the Government of India StateGovernments Local Authorities for their continued help and timely assistance extended tothe 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]

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