DIRECTORS' REPORT To, The Members, 1.The Directors have pleasure in presenting the 33rd Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2015. 2. COMPANY'S AFFAIRS AND PERFORMANCE a) Sale of property at Village Chittiambakkam, District Kanchipuram, Tamil Nadu State. As the Members are aware the Company is engaged in the manufactures of Pickles, Ketchups, Instant Mixes, Syrups and other processed foods. The main factory of the Company is situated at Village Sangavi- Shirwal, Tal. Khandala, District Satara in the Maharashtra State. The Company had also setup a small place located at Plot No. 100, Village Chittiambakkam, District Kanchipuram, Tamil Nadu State. The said Unit was established mainly to avail the local benefits for procurement of Raw Material and for packaging. However, considering the low operations, the said Unit was not becoming viable and proitable. Accordingly, during the year under the Report the Company disposed off the said property, which does not have a major bearing on the Company's affairs. b) Change in Marketing, Sales and Distribution arrangement and sale of Brands. During the year under Report the Company Sold / Assigned its Brands/ Trade Marks viz. 'Pravin' and 'Toofan' to Raja Flavours and Foods LLP. The Partners of the above LLP, through their other business concerns, engaged in Food business, have set up very large Distribution Infrastructure and have strong Sales force, that keeps servicing the ever increasing market demands regularly. The Company with this arrangement plans to use their available Sales and Distribution Network to directly push the Products of the Company into the deepest of the Market i.e. making the Products available to a much wider reach/ consumer base and help grow the business at a rapid pace. This will also help the Company to service larger Geographies that it has been unable to cater so far. This will improve the Brand Image and widening of Market both Indigenous as well as Export. This will also enable the Company to fully concentrate on Production activities, and development of new Food Products. The Directors are confident that with the said arrangement the performance of the Company will grow in the Years to come, which was stagnant over past few years. However there was no major impact and bearing on the Company's affairs for the Year under Report. c) Financial Performance During the year under review the Revenue from Operations of the Company was Rs. 3960.20 Lacs as against Rs. 3504.79 Lacs of the previous year. The export turnover of the Company during the year under report was Rs. 1.92 Lacs as against Rs 24.13 Lacs of the previous year. The Company has earned the Proit before Tax of Rs. 466.56 Lacs as against the Profit of Rs. 234.51 Lacs of the previous year. 3. TRANSFER TO RESERVES Your Company has not proposed to transfer any amount to the General Reserve. An amount of Rs. 3,29,06,402/-is proposed to be retained in the Statement of Proit and Loss. 4. DIVIDEND Considering the present sluggish business environment, slow down in the economy, and with a view to augment the long term resources and to plough back the earnings in the business itself, your Directors do not recommend any Dividend on the Shares of the Company. 5. MANAGEMENT DISCUSSION & ANALYSIS REPORT Introduction The Indian Food Processing Industry is showing remarkable Growth. The packaged Food processing Sector is one of the largest Sectors in India. However having accepted these facts your Company could not achieve better performance mainly because of the peculiar product range the Company is having. The main revenue generation of the Company, at present is out of the Food Items like Pickles and Ketchups, which are low growth oriented. These Food Products have its own limitations to contribute to the growth success. Market Scenario and Challenges Food processing sector is an extension of an Agri-Sector. Both are interdependent on each other for its progress. The developments in the food processing sector have created a demand in the fruits and vegetables segment of Agri-Sector. In this modern era, the consumer demands and tastes have been varied due to changing lifestyles, change in the customer tastes and priorities and that they have become more health conscious. Due to the changing environment, erratic atmosphere and weather conditions the agricultural sector has seen a setback over past few years. The procurement of quality raw material at a right time and right price has become a difficult task. As a result, the Company manufacturing Pickles and Ketchups is facing low growth orientation. Competition 'Competition' in Food Industry is very strong and tough, as it covers International Players as well as Players from Organized and Unorganized Sector. It is dificult to balance the marketing and pricing strategies, because of the product range and volumes the International Players are dumping in the market and the low prices that are offered by the Unorganized Sector. The ever increasing prices and scarcity of quality Raw Material also matters the inancial performance of the Company, as the Prices of the Products marketed by the Company are market driven and there is hardly any chance to ix the Prices on its own. The Company has established a wide range of Distribution network in Maharashtra, Karnataka and Goa which approaches to the numerous grocery stores. However the Customers now adopting new means of purchasing like E- Commerce Platform, Online purchasing, Malls etc. the Company is inding it dificult to boost the demand for its Products in the Market by the present marketing strategies. The Company is focusing to tap new Products, new Markets and new means of marketing to meet the changing trends and preferences of the Customers. Sustainability and Growth: To match with the fast growing technical developments, the Company is also upgrading itself with new developed manufacturing techniques and is upgrading its manufacturing processes and production infrastructure. In the processed Food Industry, 'Packaging' is also a vital part. The Company is giving utmost thrust and importance to the packaging whereby the shelf life of the products is improved as well it attracts the attention of the Customers. The Company is also developing new Processed and Ready to eat Food items, and is giving emphasis on the market driven fast moving Food Products, to add to its present range of Products. The Company gives utmost care on Waste Management, as lot of Bio based Waste is generated during the course of production. The Company is taking each and every step to be environmental friendly in its manufacturing processes and in compliance with the stricter norms introduced by the Food Safety Authority. 6. CAUTIONARY STATEMENT Statements in this Report, particularly those which relate to management discussion and analysis, describing the Company's 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. 7. DIRECTORS The Directors with deep regret inform about the sad and untimely demise of Mr. Mahendra Mehta the Director of the Company, on 4th July, 2015. The Directors do place on records their sincere thanks and appreciation for the contribution made by him, over all these years. 8. PUBLIC DEPOSITS During the inancial year 2014-15, 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. 9. INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY The Company has adequate internal control systems to ensure operational eficiency, 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. ANNUAL REPORT 2014-2015 The Audit Committee of the Board reviews the Internal Audit Report and the adequacy and effectiveness of internal controls periodically. 10. LISTING FEES The annual listing fee for the year under review has been paid to BSE Limited, where your Company's shares are listed. 11. HOLDING COMPANIES, SUBSIDIARY COMPANIES AND ASSOCIATE COMPANIES Company does not have any Holding Company, Subsidiary Company and Associate Company. 12. 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. 13. NUMBER OF MEETINGS OF THE BOARD During the year under review Fourteen (14) Board Meetings were convened and held. The details of which are given in Annexure II. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the Listing Agreement. 14. DIRECTOR'S 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 Financial Statements for the year ended 31st March, 2015, the applicable Accounting Standards have been followed along with the proper explanation relating to material departures; b) Accounting Policies as mentioned in Part-B to the Financial Statements 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, 2015 and of the Profit of the Company for the year ended on that date; c) Proper and suficient 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 inancial controls were in place and that the inancial 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. 15. DECLARATION BY INDEPENDENT DIRECTOR All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. 16. AUDITORS AND AUDITORS' REPORT a) Statutory Auditor: In the Annual General Meeting held on 29th September, 2014, the Company had appointed M/s Sunil Shah, Chartered Accountants, having Membership No. 37483 as the Auditors of the Company. The Directors have now recommended their appointment till the conclusion of 35th Annual General Meeting of the Company to be held in the Year 2017 subject to ratification by the Members at every Annual General Meeting. b) Secretarial Audit: Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed M/s. Shekhar Ghatpande & Co., Company Secretaries having Membership No FCS: 1659 CP:782 to conduct the Secretarial Audit of your Company for the Financial Year 2014-2015. The Secretarial Audit Report is annexed herewith as Annexure - III to this Report. The Secretarial Audit Report does not contain any major qualiication, reservation or adverse remark. c) Cost Audit: For the Financial Year under Report the appointment of Cost Auditor and obtaining of their Report was not applicable to the Company. 17. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT 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) The Company has not advanced any amount in the nature of Loan to any other entity, however earlier the Company has paid an advance towards the purchase of Cold Storage to Chordia Food Park & Properties Ltd., the final conveyance of which is yet to be completed. 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, 2015 (including Investments made in the previous years) in quoted and unquoted Shares are as under:- 18. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED IN SUB SECTION (1) OF SECTION 188 OF THE COMPANIES ACT, 2013 Pursuant to the 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, as far as possible been done at Arm's Length and are in the ordinary course of business, and as such the provisions of Section 188 are not applicable for such transactions. However, as an abundant precaution and pursuant to the provisions of Clause 49 of the Listing Agreement, the Company has obtained the approval of the Shareholders of the Company, by way of blanket permission, to the said transactions for the period of ive Financial Years w.e.f. 1st April, 2014, in their Annual General Meeting held on 29th September, 2014 by way of Special Resolution. The Company has now recommended a Special Resolution for you approval in the ensuing Annual General Meeting, in partial modiication of the same. The particulars of the transactions so entered into with Related Parties have been provided in Form No. AOC-2 attached herewith as Annexure IV and in Related Party disclosures as per AS-18 in Note No. 30 to the Financial Statements. 19. MATERIAL CHANGES AND COMMITMENTS BETWEEN THE DATE OF THE BALANCE SHEET AND THE DATE OF REPORT There have been no material changes and commitments affecting the inancial 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. 20. SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS There are no signiicant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future. 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 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 Center 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. 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. 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. The Company voluntarily also has not undertaken any CSR activity. 24. BOARD EVALUATION Pursuant to provisions of the Companies Act, 2013, Rules there under and Clause 49 of Listing Agreement, the Board has carried out evaluation of its own performance and that of its Committees and individual Directors. 25. CHANGE IN THE NATURE OF BUSINESS, IF ANY There has been no change in the nature of business during the Financial Year under review. 27. DIRECTORS PROPOSED TO BE RE-APPOINTED AT THE ENSUING ANNUAL GENERAL MEETING Mr. Hukmichand Chordia, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Ms. Gargi Sharma was appointed as an Additional Director of the Company who holds ofice upto the date of the ensuing Annual General Meeting. The necessary resolution for her appointment as the Woman Independent Director of the Company is proposed in the ensuing Annual General Meeting. 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 No employee of the Company was in receipt of remuneration aggregating to Rs. 60/- Lacs or more per year or Rs. 5/- Lacs or more per month when employed for a part of the year and the particulars as required under Rule 5(2) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014. 30. CASH FLOW A Cash Flow Statement for the year ended 31st March, 2015 is attached to the Financial Statement. 31. CORPORATE GOVERNANCE A report on the Corporate Governance, along with the certiicate of compliance from the Auditors, forms part of the Annual Report. 32. APPRECIATION Your Directors wish to place on record their sincere appreciation of the continued support from the Company's Bankers viz. Corporation Bank, its valued Customers, Distributors, Suppliers, etc. 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 Chairman [DIN : 00389587] Place: - Pune Date: - 14th August, 2015 |