CHOTHANI FOODS LIMITED

The directors take pleasure in presenting the 10 th Annual report together with the Audited financial accounts for the Year ended 31st March, 2023.

FINANCIAL RESULTS

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

FINANCIAL PERFORMANCE

During the year, Total Revenue of the company increased to Rs. 821.03 as compared to previous year revenue which amounted to Rs. 731.27 Lakhs. The net profit from operations of your Company is Rs. 12.85 Lakhs as compared to Rs. 9.92 Lakhs in last financial year.

CAPITAL STRUCTURE

The Authorized Share Capital of your Company as on 31st March, 2023, stood at Rs. 5,50,00,000 (Indian Rupees Five Crore Fifty Lakhs Only), comprising of 55,00,000 Equity Shares (Fifty Five Lakhs) of Rs. 10/- each.

As on 31st March, 2023, the issued, subscribed and paid up share capital of your Company stood at Rs. 5.16.00. 000.00 (Rupees Five Crore Sixteen Lakhs Only), comprising of 51,60,000 Equity Shares (Fifty One Lakhs Sixty Thousand) of Rs. 10/- each. During the year under review, the Company has not made any allotment of Shares / Securities.

On 22nd August, 2023 in the Extra-Ordinary General Meeting, the Company increased the authorised share capital from Rs. 5,50,00,000 (Rupees Five Crore Fifty Lakhs Only), comprising of 55,00,000 Equity Shares (Fifty Five Lakhs) of Rs. 10/- each to Rs. 10,50,00,000/- (Rupees Ten Crores Fifty Lakhs Only) divided into 1.05.00. 000 (One Crore Five Lakhs Only) Equity Shares of Rs. 10/ - each.

The necessary amendments were made to the capital clause in the Memorandum of Association of the Company, to enable the increase in the Authorised Share Capital of the Company.

DIVIDEND

No divined is being recommended by the Directors for the year ending on 31st March, 2023. As the Board of Directors wants to plough back the profit in the business.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

Since there was no Dividend declared and paid last year, the provisions of Section 125 of the Companies Act, 2013 does not apply. Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore, there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

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 associate 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 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 arm's 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 9th AGM. The Company has also received Disclosure of Interest by Directors as per the provisions of Section 184 of Companies Act, 2013.

Mr. Nikunj Chheda resigned as an Independent Director of the Company with effect from 19th April, 2022.

Mr. Raviprakash Narayan Vyas was appointed as an Additional Director in the capacity of Independent Director of the Company with effect from 19th April, 2022.

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 details of loans, guarantees, and investments as required by the provisions of Section 186 of the Companies Act, 2013 and the rules made thereunder form part of the Notes to the Financial Statements provided in this Annual Report.

TRANSFER TO RESERVES

The Company has transferred current year's profit of Rs. 12.85 Lakhs to the Reserve & Surplus and the same is in compliance with the applicable provisions prescribed under the Companies Act, 2013.

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.

As of 31st March, 2023, your Company's Board of Directors ("Board") had Six Directors comprising of Three Executive Director and One Non-Executive Director, Two Independent Directors.

BOARD EVALUATION

In compliance with the provisions of the Companies Act, 2013 and the 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 Nomination & Remuneration Committee and Shareholder's Grievance Committee.

The Board reviewed the performance of the individual directors on the basis of the criteria such as the contribution in decision making, contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive suggestions and advice in meetings etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent directors, performance of non-independent directors, performance of Board as whole was evaluated, taking into account the views of executive and non-executive directors.

Performance evaluation of independent directors was done by the entire board, excluding the independent directors being evaluated.

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

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

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

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, five (5) Audit Committee meetings were held on 19-04-2022, 30-05-2022, 30-08-2022, 14-11-2022 and 15-02-2023.

B. Nomination and Remuneration Committee

During the year Two (2) Nomination & Remuneration Committee meetings were held on 19-04-2022 and 30-08-2022.

C. Stakeholders Relationship Committee

During the year Two (2) Stakeholders Relationship Committee meetings were held on 30-08-2022 and 15-02-2023.

D. Independent Director Meeting:

The Company's Independent Directors meet at least once in every financial year without the presence of Executive Directors or management personnel. Such meetings are conducted informally to enable Independent Directors to discuss matters pertaining to the Company's affairs and put forth their views to the Lead Independent Director.

During the year under review, the independent directors met on 31.03.2023 inter alia, to discuss:

1. Evaluation of the performance of Non-independent Directors and the Board of Directors as a whole.

2. Evaluation of the performance of the chairman of the Company, taking into account the views of the Executive and Non- Executive directors.

3. Evaluation of the quality, content and timeliness of flow of information between the management and the board that is necessary for the board to effectively and reasonably perform its duties.

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.

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, 2023, 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, 2023 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.

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

The Authorised Capital of the Company increased from existing Rs. 5,50,00,000/- (Rupees Five Crores Fifty Lakhs only) divided into 55,00,000 (Fifty Five Lakhs Only) Equity Shares of Rs. 10/- each to Rs.10.50.00. 000/ - (Rupees Ten Crores Fifty Lakhs Only) divided into 1,05,00,000 (One Crore Five Lakhs Only) Equity Shares of Rs. 10/- each, by creation of additional 50,00,000 (Fifty Lakhs Only) Equity Shares of Rs. 10/-each.

In the Extra-Ordinary General Meeting of the Company held on 22nd August, 2023, the Company issued 50.00. 000 Fully Convertible Warrants, each carrying a right to subscribe to one Equity Share at an exercise price of '15.65/- per Equity Share on a preferential basis ("Preferential Allotment") to Promoter and Nonpromoters in one or more tranches within a maximum period of 18 (eighteen) months from the date of allotment of Warrants.

PREFERENTIAL ISSUE

Pursuant to the approval of the Board at its meeting held on 31st July, 2023 and approval of the members of the Company at their Extra-Ordinary General Meeting ('EGM') held on 22nd August 2023, the Company issued 50,00,000 (Fifty Lakhs) Fully Convertible Warrants ("Warrants") on preferential basis to the Promoter/Promoter Group of the Company and certain identified non-promoter persons/entity, each convertible into, or exchangeable for, at an option of the Proposed Warrant Allottee, in one or more tranches, one Equity Share of face value of Rs. 10/- each at a price (including the Warrant Subscription Price and the Warrant Exercise Price) of Rs. 15.57/- (Rupees Fifteen and Fifty Seven Paise only) ("Preferential Allotment Price") each

(A) Conservation of Energy:

(B) Technology Absorption:

(C) Foreign Exchange Earnings and Outgo:

ACCOUNTING STANDARDS

The Company has prepared the Financial Statements for the year ended 31st March, 2023 as per Section 133 of the Companies Act, 2013, read with rule 7 of Companies (Accounts) Rules, 2014.

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

There are no qualifications, reservations, adverse remarks, disclaimers or any fraud reported by the Statutory Auditors in their report on Financial Statements for the Financial Year 2022-23. There are no qualifications, reservations, adverse remarks and disclaimers of the Secretarial Auditors in the Secretarial Audit Report for the Financial Year 2022-23.

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

There were no frauds found which have been reported to the Audit Committee/ Board members as well as to the Central Government. Further, there was no fraud reported by auditors under section 143(12) of the Companies Act, 2013.

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

Pursuant to Section 92(3) of the Act read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2023 is available on the website of the Company at www.chothanifoodslimited.com

(I) Statutory Auditors

M/s. A Y & Company, Chartered Accountants (Firm Registration No. 020829C) were appointed as the Statutory Auditors for a period of 5 years from the conclusion of the 9th Annual General Meeting till the conclusion of 14th Annual General Meeting of the Company.

The Notes to the financial statements referred in the Auditors' Report are self-explanatory. The Auditors' Report is enclosed with the financial statements forming part of this Annual Report.

M/s. A Y & Company have confirmed their eligibility and qualification required under Section 139, 141 and applicable provisions of the Companies Act, 2013 and rules issued there under (including any statutory modification (s) or re-enactment (s) thereof for the time being in force).

(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-B to this Report"

COST RECORDS AND AUDIT

The provisions relating to maintaining of cost record and to conduct cost audit are not applicable to the Company.

DISCLOSURE OF EMPLOYEES REMUNERATION

The provisions of Rule 5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 requiring particulars of the employees in receipt of remuneration in excess of Rs. 60 Lacs per year to be disclosed in the Report of Board of Directors are not applicable to the Company as none of the employees was in receipt of remuneration in excess of Rs. 60 Lacs during the financial year 2022-23.

Appointment & Remuneration of Managerial Personnel is annexed herewith as " Annexure -C".

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- D."

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

Your Company has an effective internal financial control and risk-mitigation system, which are constantly assessed and strengthened with new/revised standard operating procedures which also covers adherence to the Company's Policies for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and timely preparation of reliable financial disclosures. The Company's internal financial control system is commensurate with its size, scale and complexities of its operations.

CORPORATE GOVERNANCE

The Company being listed on the Small and Medium Enterprise Platform is exempted from provisions of corporate governance as per Regulation 15 of Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulation, 2015. Hence no corporate governance report is disclosed in this Annual Report.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

In pursuance of the provisions of Section 177(9) & (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Policy on vigil mechanism i.e. whistle blower policy may be accessed on the Company's website.

The policy provides for a framework and process, for the employees and directors to report genuine concerns or grievances about leakage of unpublished price sensitive information (UPSI), illegal and unethical behavior to the Chairman of the Audit Committee.

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.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

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

4. There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016.

5. The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable.

ACKNOWLEDGEMENT

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The Board places on record its appreciation for the support and cooperation your company has been receiving from its Suppliers, Retailers, and Dealers & Distributors and other associated with the Company. The Directors also take this opportunity to thank all Investors, Clients, Vendors, Banks, Government & Regulatory Authorities and Stock Exchange for their continued support.