Kemistar Corp. Director Discussions


To

The Members,

KEMISTAR CORPORATION LIMITED

Your Directors are pleased to present the TWENTYNINETH ANNUAL REPORT along with the Standalone and Consolidated Audited Financial Statements of your Company for the Financial Year ended on March 31, 2023.

1. FINANCIAL RESULTS:-

(In Lakh)

Particulars Standalone Consolidated
2022-23 2021-22 2022-23 2021-22
Income from operations 378.95 643.85 1817.02 2092.24
Income from other heads 6.66 0.69 16.71 4.84
Total Expenditure 353.92 616.19 1719.54 1988.99
Profit Before Tax 31.70 29.38 114.20 108.09
Profit After Tax 23.03 22.95 83.90 83.92
Basic and diluted EPS 0.21 0.21 0.78 0.78

2. BUSINESS OVERVIEW

Standalone Basis

The total revenue during the year under review was Rs. 378.95 lakhs against Rs. 643.85 lakhs for theprevious year. Profit before Tax Expense for the current year is Rs. 31.70 lakhs (Rs. 29.38 lakhs in previous year). Net Profit after tax amounted to Rs. 23.03 lakhs (Rs. 22.95 lakhs in previous year) thereby resulting increase of around 0.35%.

Consolidated Basis

As per the Consolidated Financial Statements, the Total Income of the Company, Profit before Tax (PBT), and net profit for the year were Rs. 1817.02 lakhs, Rs. 114.20 Lakhs and 83.90 Lakhs respectively.

3. SHARE CAPITAL

The paid up Equity Share capital of the Company is Rs. 10,75,94,080/- for the year under review. During the year under review, the company has neither issued any shares with differential voting rights nor granted any stock Option nor any sweat Equity Shares.

4. DIVIDEND

The Board of Directors has recommended a dividend of Rs. 0.40/-(Rupees Forty Paisa only) per equity share of Rs. 10/- (Ten rupees) each fully paid-up of the Company. Dividend is subject to approval of members at the ensuing annual general meeting and shall be subject to deduction of income tax at source.

Transfer of unclaimed dividend to Investor Education and Protection Fund

Since there was no unpaid/unclaimed Dividend declared and paid last year, the provisions of Section 125 of the Companies Act, 2013 do not apply.

5. FINANCE:

Cash and Cash equivalent as at March 31, 2023 was Rs. 11.100 Lakh. The company continues to focus on adjusting management of its working capital, Receivable, purchases and other working capital parameters were kept under strict check through continuous monitoring.

6. DEPOSIT:

The company has not invited, accepted or renewed any deposit within the meaning of Chapter V other than exempted deposit as prescribed under the provisions of the Company Act, 2013 and the rules framed thereunder, as amended from time to time. Hence there are no particulars to report about the deposit falling under Rule 8(5) (v) and (vi) of the Companies (Accounts) Rules, 2014.

7. SUBSIDIARIES, JVS OR ASSOCIATE COMPANIES

K P International Pvt. Ltd is the Wholly Owned Subsidiary of Company as on 31.03.2023

In terms of the provisions contained in Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a report of performance and the financial of wholly owned subsidiary is provided as "Annexure- A " to this report.

8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not provided any loan or given any guarantee or provided security in connection with such loan pursuant to section 186 of the Companies Act, 2013 during the year under review. The details of the investments made by Company are as per Schedule V of the Companies Act, 2013.

The details of an investment made by the Company as detailed in the Note No. 5 of the balance sheet of the financial statement :

(Rs. In lakhs)

NOTE:5 INVESTMENTS As at 31/03/2023 As at 31/03/2022
Investment in Liquid Funds etc. 47.63 89.96
TOTAL 47.63 89.96

Note : The above investment, during F.Y. 2022-23, is exclusively made in Nippon India Mutual Fund (Reliance Liquid Fund). In the opinion of company such investment is purely on short-term basis and hence, is treated as a current investment.

9. ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The process of Internal Financial Control over financial reporting is designed to provide reasonable assurance regarding reliability of financial reporting and preparation of financial statements for various external purposes. As per extant guidelines for various financial reporting, the Company requires having adequate internal financial controls over financial reporting to assure reliability of financial reporting and should have risk management systems to counter and mitigate the possible risks involved in the business.

Your Company has established adequate internal financial control systems to ensure reliable financial reporting and compliance with laws and regulations. All resources are put to optimal use and adequately protected against any loss. Internal control systems commensurate with its size and operations to ensure orderly and efficient conduct of business while safeguarding the assets, quality, safety, procurements, finance and accounts and reducing and detecting error.

10. APPOINTMENT AND RESIGNATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review and upto the date of this report the following changes occurred in the composition of Board and Key Managerial Personnel of the Company:

1. Appointment/ Cessation:

• Ms. Nisha Mathew has appointed as Chief Financial Officer of the Company w.e.f 13th July, 2022.

• Ms. Trusha Shah has resigned from the post of Company Secretary w.e.f 31st October, 2022.

2. Key Managerial Personnel:

The following are designated as Key Managerial Personnel as on 31.03.2023

1) Mr. Ketankumar Patel (Managing Director)
2) Ms. Aesha Mashru (Company Secretary) : Appointed w.e.f 20.03.2023
3) Mrs. Nisha Mathew : Appointed w.e.f 13.07.2022

The company has compiled with the requirements of having Key managerial Personnel as per provisions of section 203 of the companies Act, 2013.

The Company has received the Declarations from all the Independent Directors confirming that they meet the criteria of Independence as prescribed under the provisions of Section 149 of the Companies Act, 2013 read with the schedules and Rules issued thereunder as well as Regulations 16 of SEBI (Listing Obligation & Disclosure Requirements) Regulation, 2015 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

JUSTIFICATION FOR RE-APPOINTMENT OF INDEPENDENT DIRECTOR:

During the year, based on the recommendation of Nomination and Remuneration Committee, the Board of the Directors approved the re-appointment of Mr. Maheshkumar Dhanjibhai Baldha (DIN: 06542441) as an Additional Non Executive Independent Director, of the Company, with effect from 27th April, 2023 which was subject to shareholders approval. The Securities Exchange Board of India vide Third Amendment Regulations, 2021 read with the corrigendum to Listing Regulations has stipulated the requirement of attaining approval of shareholders by means of a special resolution, for re-appointment of an Independent Director on the Board of Directors either at the next general meeting or within a time period of three months from the date of appointment, whichever is earlier, effective from 1st January, 2022. the Company has received approval of the Members of the Company by means of Special Resolution through Postal Ballot for re-appointment of Mr. Maheshkumar Dhanjibhai Baldha as a Non Executive Independent Director of the Company for a period of 5 (five) years with effect from 27th April, 2023 to 26th April, 2028.

11. PERFORMANCE EVALUATION OF THE BOARD

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board had adopted a formal mechanism for evaluating its own performance and as well as that of its committee and individual Directors, including the chairperson of the Board. The Exercise was carried out through a structured evaluation process covering the various aspects of the Boards functioning such as composition of board & committees, experience & competencies, performance of specific duties & obligations, governance issues etc.

The evaluation of the independent Directors was carried out by Board, except the independent Director being evaluated and the chairperson and the non-independent Directors were carried out by the independent Directors.

12. REMUNERATION AND NOMINATION POLICY

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of the board members. The detail of this policy is explained in the Corporate Governance Report and also available on www.kemistar.in.

13. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

The Board of the Company is endlessly focused for the growth and expansion of the Company. It is further involved to strategize the optimum utilization of the available resources and to reduce cost so as to improve the profitability of the Company and also to generate additional opportunities to increase overall performance of the Company.

The Management of the Company is also striving towards becoming a 100% compliant entity and to improve its investor relations by sharing latest and correct information with its stakeholders and thereby creating a transparent atmosphere.

The Board met 7 times during the year under review. The Board held one meeting in each quarter and the gap between any two meetings was not more than one hundred and twenty days as prescribed under the Companies Act, 2013.

The details of attendance of Directors are mentioned in Corporate Governance Report which forms part of this report. Details of the Meeting held and convened during the financial year are as follows:

Sr. No Date of Board Meeting

1. May 25, 2022

2. July 13, 2022

3. August 12, 2022

4. September 07,2022

5. November 14,2022

6. February 14, 2023

7. March 20, 2023

14. DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement:—

a. In the preparation of the annual accounts s for the year ended March 31, 2023, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. The directors had selected such accounting policies and applied them consistently and made judgments and estimates 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 at the end of the financial year and of the profit and loss of the company for that period;

c. The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d. The directors had prepared the annual accounts on a going concern basis; and

e. The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

f. The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

15. AUDITORS:

I. Statutory Auditors:

Since the terms of M/s S. D. Mehta & Co. Chartered Accountants will expire in the coming 29th AGM of the Company. M/s S. D. Mehta & Co. was appointed as the Statutory Auditor of the Company for the period of 4 years from 25th AGM to 29th AGM of the Company. Further, M/s S. D. Mehta & Co. Chartered Accountants is eligible for re-appointment but the auditor gives his unwillingness to be reappointed.

Therefore, Pursuant to the provisions of Sections 139, 142 and other applicable provisions, if any, of the Act (including any statutory modification or re-enactment thereof for the time being in force) and the Companies (Audit and Auditors) Rules, 2014, as amended from time to time and on the recommendation of Audit Committee, the board of directors at their meeting held on September 06, 2023 and subject to approval of the shareholder in the ensuing AGM have approved the appointment of M/s N. S. Nanavati & Co., Chartered Accountants (FRN: 134235W) as Statutory Auditors of the Company for a the term of five years to hold office from the conclusion of the 29th AGM till the conclusion of the 34th AGM in 2028, subject to approval of Members in the ensuing AGM. The necessary resolutions for appointment of N. S. Nanavati & Co., form part of the Notice convening the ensuing AGM scheduled the to be held on 29th September, 2023.

EXPLANATION ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS MADE BY THE AUDITORS

The Audit for FY 2022-23 was conducted by M/s S. D. Mehta & Co and there are no qualifications, reservations, adverse remarks or disclaimers made by the Statutory Auditor in their Audit Report. The

Notes to the financial statements referred in the Auditors Report are self-explanatory and therefore do not call for any comments under Section 134 of the Companies Act, 2013. The Auditors Report is enclosed with the financial statements in the Annual Report.

II. Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed, M/s Rohit Periwal & Associates, Practicing Company Secretary (FCS- 12203, CP No. 22021) Ahmedabad to conduct a Secretarial Audit of the Companys Secretarial and related records for the year ended 31st March, 2023.

III. Cost Auditor:

Company is not covered under Rule 3 and is not falling within the limits as specified under Rule (4) of the Companies (Cost Records and Audit) Rules, 2014, and hence appointment of Cost Auditor is not applicable to the Company.

IV. Internal Auditor:

Pursuant to Section 138 of the Companies Act, 2013 and rules made thereunder company has appointed Ms. Aesha Mashru, Company Secretary (Membership No.: A45737) as the Internal Auditor of the Company for the Financial year 2022-23 at the remuneration as may be mutually agreed between the Internal Auditor and the Board of Directors."

16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION:

Your Company has not consumed energy of the significant level and accordingly no measures were taken for energy conservation and no additional investment was made for the reduction of energy conservation.

The particulars regarding technology absorption and foreign exchange earnings and outgo pursuant to section 134 (6) (m) of the companies Act, 2013 are NIL. - Annexure B

17. ANNUAL RETURN

The Annual Return of the Company as on 31st March 2023 in Form MGT - 7 in accordance with Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, is available on the website of the Company www.kemistar.in.

18. CORPORATE GOVERNANCE

The Corporate Governance Report together with the certificate received from the Auditor of the Company regarding compliance with the requirements of Corporate Governance as stipulated under Regulation 34 of the SEBI (Listing Obligations and disclosure Requirements) Regulations, 2016, form an internal part of this report.-Annexure C.

19. MANAGEMENT DISCUSSION AND ANALYSIS

In terms of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) with Stock Exchange, Management discussion and analysis on the business and operations of the company is attached herewith and forms part of this Annual Report-Annexure D.

20. SECRETARIAL AUDIT

As a measure of good corporate practice, the board of the director of the Company has sought the professional services M/s. Rohit Periwal & Associates, Practicing Company Secretary to conduct Secretarial Audit for FY 2022-23. The Secretarial Audit Report for the financial year end 31.03.2023 is provided in the Annual Report. - Annexure E.

The Secretarial Audit Report confirms that the Company has complied with all the applicable provisions of the Companies Act,2013.

21. CORPORATE SOCIAL RESPONSIBILITY

In accordance with the provisions of section 135 of the Companies Act 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 made there under, The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable.

22. PARTICULAR OF EMPLOYEES

The particulars of employees required to be furnished pursuant to section 197(12) of the Companies Act, 2013 read with sub rules 2 and 3 of Rule 5 of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014, are not applicable to the Company. However, there was no employee in receipt of remuneration under this section. The details required under section 197(12) and under rule 5 of Appointment and Remuneration of Managerial Personnel) Rules, 2014 of the Companies Act 2013 is provided in the Annual Report as Annexure F.

23. RELATED PARTY TRANSACTIONS

All Related Party Transactions those were entered during the financial year were in ordinary course of the business of the company and were on arms length basis. There were no materially significant related party transactions entered by the Company with Promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interest of the company. All such Related Party Transactions are placed before the Audit Committee for approval. The policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions as approved by the Audit Committee and the Board of Directors is has been uploaded on the website of the Company at www.kemistar.in.

24. FOREIGN EXCHANGE EARNINGS AND OUTGO

Foreign exchange earnings and outgoings flow were NIL

25. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

In compliance of provisions of Section 177 of the Companies Act, 2013 ("the Act"), other applicable provisions of the Act, Companies (Meetings of the Board and its Powers), Rules 2014 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) 2015, your Company has establish a vigil mechanismfor their directors and employees, so as to report their genuine concerns or grievances.

The vigil mechanism shall provide for adequate safeguards against victimization of person(s) who use such mechanism and make provision for direct access to the chairman of the Audit Committee or the director nominated by the Audit Committee, as the case may be, in exceptional cases.

The functioning of the Whistle Blower mechanism is reviewed by the Audit Committee on regular basis. The Vigil Mechanism and Whistle Blower Policy has been posted on the website of the Company at www.kemistar.in.

26. PREVENTION OF INSIDER TRADING:

Your company has adopted the "Code of Conduct on Prohibition of insider trading" and "Code of Conduct for Directors and Senior Management Personnel" for regulating the dissemination of Unpublished Price Sensitive Information and trading in security by insiders.

27. PREVENTION OF SEXUAL HARASSMENT OF WOMAN AT WORKPLACE:

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules made thunder and no complaint has been received on sexual harassment during the financial year 2022-23. Further Company has complied with the provisions relating to the constitution of Internal Complaint Committee under the Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

28. RISK MANAGEMENT

The Company has in place a mechanism to inform the Board about the risk assessment and minimization procedure and review to ensure that risk is controlled. In the Boards view, there are no material risks.

29. STATUS OF LISTING FEES

Your Company has been regularly paying listing fees to the BSE, Mumbai where its Equity Shares are listed.

30. DECLARATION OF INDEPENDENT DIRECTORS

The Company has received declarations from all the independent Directors of the Company confirming 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 Listing Regulations.

31. HUMAN RESOURCE

The company considers its employees as its most valuable assets. The company focuses on building an organization through induction and development of talent to meet current and future needs.

32. STOCK EXCHANGES

The Companys equity shares are listed with the Bombay Stock Exchange.

33. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with all the applicable provisions of Secretarial Standard - 1 and Secretarial Standard - 2 relating to Meetings of the Board of Directors and General Meetings, respectively issued by Institute of Company Secretaries of India and approved by the central government under section 118(10) of the Companies Act, 2013.

34. DETAILS OF APPLICATION MADE OR PROCEEDINGS PENDING UNDER INSOLVENCY & BANKRUPTCY ACT, 2016 & THERE STATUS

During the Year under the review, there were no applications made or proceedings pending in the name of the Company under the Insolvency & Bankruptcy Code, 2016 which materially impact the business of the Company.

35. DETAILS OF DIFFERENCE BETWEEN VALUATION AMOUNT ON ONE TIME SETTELEMENT AND VALUATION WHILE AVAILING LOAN FROM BANKS AND FINANCIAL INSTITUTION

During the Year under the review, there was no One Time Settlement of loan taken from Banks or any financial Institutions. Hence, the difference in valuation does not arise.

36. ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companies activities during the year under review. They also record their appreciation of the devoted services rendered by the Executives, Staff Members and Workers of the Company. Your Directors also acknowledge gratefully the shareholders for their support and confidence reposed on your Company.

by order of board of directors
for, and on behalf of the Company
Sd/- Sd/-
Ketankumar Patel Hrishikesh Rakholia
Place: Ahmedabad Managing Director Director
Date: 6th September, 2023 (DIN: 01157786) (DIN: 08699877)