khemani distributors marketing ltd Directors report

The Standalone Financial Statements for the F.Y. ended 31^st March, 2023, forming part of this Annual Report, have been prepared in accordance with the Generally Accepted Accounting Principles in India (‘Indian GAAP) to comply in all material respects with the notified Accounting Standards (‘AS) prescribed under Section 133 of the Companies Act, 2013 (“Act”) and other recognized accounting practices and policies to the extent applicable. The Companys performance during the F.Y. under review as compared to the previous F.Y. is summarized below:

During the year, your Company has recorded a Total Income of Rs. 81,37,39,948/- as compared to that of the previous year which was Rs. 68,85,55,087/-. Accordingly, the Profit after tax of the Company was Rs. 5,20,60,709/- as compared to the Profit after tax of the previous year ofRs. 5,83,01,730/-.

Your Directors are hopeful and committed to improve the profitability of the Company in the coming year. The Directors are aiming to achieve this by the provision of quality services, wide-spreading its services, the addition of new services into its portfolio, and capitalizing on the opportunities provided by the industry and the market.

The Board of Directors of your Company has decided to retain the entire amount of Profit for the financial year 2022-23 in the statement of Profit & Loss.

The Board of Directors of your Company has not recommended any Dividend for the financial year 2022-23.

During the year under review, the Company has not accepted or renewed any deposit from the public falling within the ambit of section 73 of Companies Act 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

The Board of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Non-Independent Director and Non-Executive Independent Directors including Women Director in accordance with the provisions of Act and SEBI Listing Regulations. All the Directors possess extensive experience and specialized knowledge in various sectors, encompassing finance, accountancy, and other relevant areas.

During the year under review, there has been no change in the Board of Directors of the Company. As on 31^st March, 2023, the Board of your Company consists of Six (6) Directors as follows:

Executive Directors:

I. Mr. Vijaykumar Mangturam Khemani (DIN: 02227389) II. Mr. Amitkumar Vijaykumar Khemani (DIN: 02227413)

Non-Executive Directors:

Non-Independent Director (Woman Director)

I. Mrs. Anupa Amitkumar Khemani (DIN: 07360209)

Independent Directors

I. Mr. Amit Mahavirprasad Jain (DIN: 07368746) II. Mr. Balkishan Ramsnehi Agarwal (DIN: 07403295) III. Mr. Mukeshkumar Devidutt Kabra (DIN: 07987025)

The Chairman of the Company is an Executive Director.

Mrs. Anupa Amitkumar Khemani (DIN: 07360209), retires by rotation at the ensuing Annual General Meeting and being eligible offers herself for re-appointment.

Considering the relevant knowledge, expertise, and experience of Mr. Amit Mahavirprasad Jain, Mr. Balkishan Ramsnehi Agarwal and Mr. Mukeshkumar Devidutt Kabra, during their current tenure as an Independent Director, the Board of Directors proposed re-appointment of Mr. Amit Mahavirprasad Jain, Mr. Balkishan Ramsnehi Agarwal and Mr. Mukeshkumar Devidutt Kabra as an Independent Director of the Company for a further period of five (5) consecutive years, w.e.f. 2^nd September, 2023 till 1^st September, 2028 subject to Shareholders approval. The Company has received the necessary declaration from all three Independent Directors that they continue to fulfil the criteria of independence as prescribed under the relevant provisions of the Act and the SEBI Listing Regulations.

None of the Directors of the Company have incurred any disqualification under Section 164(2) of the Act read with Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014. All the Directors have confirmed that they are not debarred from accessing the capital market as well as from holding the office of Director pursuant to any order of SEBI or MCA or any other such Regulatory Authority.

None of the Director is a Director in more than 10 Public Limited Companies or acts as an Independent Director in more than 7 Listed Companies. Further, none of the Directors on the Companys Board is a Member of more than 10 (ten) Committees and Chairman of more than 5 (five) Committees (Committees being, Audit Committee and Stakeholders Relationship Committee) across all the Companies in which he/she is a Director. All the Directors have made necessary disclosures regarding Committee positions held by them in other companies as on 31^st March, 2023.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on 31^st March, 2023, are:

I. Mr. Vijaykumar Mangturam Khemani, Chairman & Managing Director II. Mr. Amitkumar Vijaykumar Khemani, Whole Time Director & CFO III. Ms. Vaishali Vimalkumar Punjabi, Company Secretary & Compliance Officer

During the Year under review, there has been no change in the Key Managerial Personnel of the Company.

The Company has received Declarations from all the Independent Directors confirming that:

they meet the criteria of independence as prescribed under the provisions of the Companies Act, read with the Schedule and Rules issued thereunder, and the SEBI

(Listing Obligations and Disclosure Requirements) Regulations, 2015. There has been no change in the circumstances affecting their status as Independent Directors of the Company; and

they have complied with the Code for Independent Directors prescribed under Schedule IV to the Act and formulated by the Company; and

they have registered their names in the databank of Independent Directors as being maintained by the Indian Institute of Corporate Affairs in terms of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfill the conditions specified in the Act, and the rules made thereunder and are independent of the management.

During the financial year ended on 31^st March, 2023, four (4) Board meetings were held. The maximum interval between any two meetings did not exceed 120 days. The prescribed quorum was presented for all the Meetings and Directors of the Company actively participated in the meetings and contributed valuable inputs on the matters brought before the Board of Directors from time to time.

During the year under review, 11^th Annual General Meeting of the Company was held on 28^th September, 2022. No Extra-Ordinary General Meeting was held during the year.

Details of Board Meetings held during the year:

Attendance of Directors at the Board Meetings and at last AGM:

The details pertaining to the constitution and composition of Committees of the Board and their meetings held during the year are provided in Annexure-1.

Pursuant to the provisions of Section 134 of Companies Act, 2013 read with Companies Accounts Rules, 2014 and SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015, annual evaluation of the performance of the Board, its Committees and of Individual Directors was undertaken.

During the year, the Evaluation cycle was completed by the Company internally which included the evaluation of the Board as a whole, Board Committees and Directors. The Evaluation process focused on various aspects of the Board and Committees functioning such as composition of the Board and Committees, experience, performance of duties and governance issues etc. Separate exercise was carried out to evaluate the performance of individual Directors on parameters such as contribution, independent judgment and guidance and support provided to the Management, presence at the Board meeting, general meetings and inputs in the discussion of the meeting and decision taking power, roles played as per their designation in the Company.

10. DIRECTORS RESPONSIBILITY STATEMENT:-

Pursuant to the provisions of Section 134 of the Companies Act, 2013, the Board of Directors to the best of their knowledge and ability, confirm that-

(i) in the preparation of the Annual Accounts for the year ended 31^st March, 2023, the applicable accounting standards have been followed and no material departures have been made for the same; (ii) appropriate accounting policies have been selected and applied them 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 at the end of the financial year 31^st March, 2023 and of the profit of the Company for that period; (iii) proper and sufficient care have been taken for 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; (iv) the annual accounts have been prepared on a “going concern” basis; (v) the internal financial controls laid down are properly followed and are adequate and operating effectively; (vi) the proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems were adequate and operating effectively.

11. SHARE CAPITAL:-

Authorised Share Capital:

The Authorised Share Capital of the Company is Rs. 11,50,00,000/- (Rupees Eleven Crore Fifty Lakh Only) divided into 2,30,00,000 (Two Crore Thirty Lakh) equity shares of Rs. 5/- (Rupees Five) each. There has been no change in the Authorized Share Capital of the Company during the financial year ended 31^st March, 2023.

Issued and Paid Up Share Capital:

The Company has Paid-Up Share Capital of Rs. 11,48,70,000/- (Rupees Eleven Crore Forty Eight Lakh Seventy Thousand) consisting of 2,29,74,000 (Two Crore Twenty Nine Lakh Seventy Four Thousand) equity shares of Rs. 5/- each as on 31^st March, 2023.

12. RELATED PARTY TRANSACTIONS:-

Your Board endeavors that all contracts/ arrangements/transactions entered by the Company during the financial year with related parties are in the ordinary course of business and on an arms length basis only.

During the year under review, all the transactions with related parties are placed before the Audit Committee for its approval. All the transactions with related parties entered into during the year under review were at an arms length basis and in the ordinary course of business and in accordance with the provisions of the Act and the rules made thereunder. Your Company has not entered into any transactions with related parties which could be considered material in terms of Section 188 of the Act. Accordingly, details that are required to be reported in form AOC-2 in terms of Section 134 of the Companies Act, 2013 is attached herewith as Annexure-2.

13. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:-

Details of Loans, Guarantees and Investments made by the Company pursuant to the provisions of Section 186 of the Companies Act, 2013 are provided in the notes to the Financial Statements.

14. RATIO OF DIRECTORS REMUNERATION TO MEDIAN EMPLOYEES REMUNERATION AND OTHER DISCLOSURES:-

The information required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time-to-time, are provided in Annexure-3.

During the year, none of the employees received remuneration in excess of the prescribed limit in accordance with the provisions of Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Therefore, there is no information to disclose in terms of the provisions of the Companies Act, 2013.

15. CORPORATE GOVERNANCE:-

Pursuant to Regulation 15(2) of SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015, the Compliance with the Corporate Governance provisions shall not apply in respect of the following class of the Companies:

A. The Listed Entity having Paid up Equity Share Capital not exceeding Rupees Ten Crore and Net Worth not exceeding Rupees Twenty Five Crore, as on the last day of the previous Financial Year; B. The Listed Entity which has listed its specified securities on the SME Exchange.

Since, our Company falls within the ambit of aforesaid exemption (b); hence compliance with the provision of Corporate Governance shall not apply to the Company and it does not form the part of the Annual Report for the financial year 2022-23.

However, It is pertinent to mention that the Company follows majority of the provisions of the corporate governance voluntarily as a part of Good Corporate Governance.

16. AUDITORS AND AUDITORS REPORT:-

(A) STATUTORY AUDITORS:-

At the 10^th Annual General Meeting held on 22^nd September, 2021, the Members approved the appointment of M/s. B Chordia & Co., Chartered Accountants (FRN: 121083W) as Statutory Auditors of the Company to hold office for a period of five years from the conclusion of that AGM till the conclusion of the 15^th AGM.

M/s. B Chordia & Co. is a Partnership and Peer Review Certified Chartered Accountants Firm. The Firm/Partners have rich experience in Statutory, Concurrent, Revenue & Inspection Audits among Banking Sector and other Private/Listed Companies.

The Auditors have issued an unmodified opinion on the Financial Statements for the financial year ended 31^st March, 2023. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments. The said Auditors Report for the financial year ended 31^st March, 2023 on the financial statements of the Company forms part of this Annual Report.

The Auditors Report does not contain any reservations, qualifications or adverse remarks. However, there are observations in the Statutory Audit Report stating that- (i) “The Company have pending Litigation which is pending before Appellant Authorities.”

Management Reply in this regard: The Management is of the view that Demand from Income Tax Department is unjustified, against which Company has filed appeal before Appellant Authorities against the pending litigation.

(ii) “CSR amount upto the extent of Rs. 6,32,950/- as per CSR Liability is unspent during the F.Y. 2022-23.” Management Reply in this regard: The Management is of the view that the Company will transfer the amounts of Unspent CSR activities as mentioned in Schedule VII of the Companies Act, 2013 till 30^th September, 2023.

(B) INTERNAL AUDITORS:-

Mr. Ravindra Dhakar & Associates, Chartered Accountants, Surat were appointed as the Internal Auditors of the Company for the F.Y. 2022-23 in the Board Meeting held on 10^th May 2022, in accordance with the provisions of Section 138 of the Act read with the Companies (Accounts) Rules, 2014. The auditors have carried out internal audit during the F.Y. 2022-23. Their reports were reviewed by the Audit Committee.

(C) SECRETARIAL AUDITORS:-

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr.

Bhaveshkumar Rawal, Company Secretary in Practice, Surat, were appointed as the Secretarial Auditors of the Company for the F.Y. 2022-23 by the Board of Directors at its meeting held on 10^th May, 2022.

The Report of the Secretarial Auditor in form MR-3 for the Financial Year 2022-23 is annexed to this report as Annexure-4. The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors, Committees and General Meetings. There are no adverse remarks or qualifications in the Secretarial Audit Report, hence do not call for any further explanation/s by the Company.

(D) COST AUDITORS:-

Provisions related to Cost Auditor are not applicable to the Company.

The Company is not required to maintain Cost Records as specified by Central Government under section 148(1) of the Companies Act, 2013, and accordingly such accounts and records are not made and maintained.

Pursuant to provisions of Section 143 (12) of the Act, the Statutory Auditors and the Secretarial Auditor have not reported any incident of fraud to the Audit Committee or Central Government during the F.Y. under review.

17. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE

EARNING AND OUTGO:-

The information on Conservation of Energy, Technology absorption, Foreign Exchange earnings and outgo, as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is as below:

18. INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY:-

The Company has an adequate system of internal controls in place, commensurate with the size and nature of its business. These controls have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls for ensuring reliability of financial reporting, monitoring of operations, protecting assets from unauthorized use or losses, compliance with regulations.

19. CORPORATE SOCIAL RESPONSIBILITY [CSR]:-

Your Company has adopted and formulated a Corporate Social Responsibility Policy and has also constituted Corporate Social Responsibility Committee in compliance with the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. Further, the CSR Committee assures implementation and monitoring the CSR Policy as per requirement of the Act. The CSR activities recommended by the Committee as mentioned in the CSR Policy are reviewed by the Board from time to time.

It is committed to ensure the social wellbeing of the communities through its CSR initiatives, in alignment with the Companys key priorities. The Policy is also available on website of the Company at https://www.khemanigroup.net.

The brief outline of the CSR Policy of the Company and the report on CSR activities is attached to this report as Annexure-5. The total obligation of the Company towards CSR Expenditure is Rs. 6,40,150/- against which the Company has spent Rs. 7,200/-. Due to unavailability of local sources for implementation of CSR projects in rightful manner, the Company was not able to spend the amount on CSR activities. The Company is committed to spend the entire unspent CSR obligation amount within due time period as prescribed under the provisions of Section 135 of the Companies Act, 2013.

20. VIGIL MECHANISM (WHISTLE BLOWER POLICY):-

The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns about unethical behavior. No person has been denied access to the Chairman of the Audit Committee. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act and as per SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

The Vigil Mechanism / Whistle Blower Policy is available on the Companys website https://www.khemanigroup.net. During the year under review, there were no instances of whistle blowers.

21. MANAGERIAL REMUNERATION:-

The Company has paid Rs. 10,80,000/- as Remuneration to the Directors during the year:

22. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

(PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:-

As per requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,2013, the Company has already maintained an internal policy to prevent womens harassment at work and covered all employees so they could directly make complaints to the management or Board of Directors if such situation arises.Further, the Company ensures that there is a healthy and safe atmosphere for every women employee at the workplace.

The Management and Board of Directors together with confirm a total number of complaints received and resolved during the year is as follows:

23. MANAGEMENTS DISCUSSION AND ANALYSIS REPORT:-

Pursuant to the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Managements Discussion and Analysis Report capturing your Companys performance, industry trends and other material changes with respect to your Company is attached to this report as Annexure-6.

24. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION

OF THE COMPANY BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE BOARD REPORT:-

There have been no material changes and commitments, affecting the financial position of the company which occurred between the end of the financial year to which the financial statements relate and the date of this Report.

25. RISK MANAGEMENT:-

In todays economic environment, Risk management is a very important and integral part of the Companys strategy and for the achievement of our long-term goals. The main aim of risk management is to identify, monitor and take precautionary measures in respect of the events that may pose risks for the business. The Directors of the Company take pro-active steps to minimize adverse impact on the business objectives and enhance the Companys competitive advantage.

Your Company‘s risk management is embedded in the business processes. Your company has identified the certain risk like price risk, uncertain global economic environment, human resource, competition, compliance and industrial health and safety risk and also planned to manage such risk by leveraging on their expertise and experience. Every step has taken to adhere to the risk evaluation and reduction before every crucial business decisions.

The Company has been exempt under Regulation 21 of the SEBI (Listing Obligation and Disclosure requirements) Regulations, 2015 from reporting of risk management.

26. CHANGE IN THE NATURE OF BUSINESS:-

For sustained growth in the future, Company wants to rely on its main business only. Hence, there is no change in the nature of the business of the Company during the year.

27. INSURANCE:-

Your Company has taken appropriate insurance for all assets against foreseeable perils.

28. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR

COURTS OR TRIBUNALS:-

During the year under review, no significant or material orders were passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its operations in future.

29. JOINT VENTURES, SUBSIDIARIES AND ASSOCIATES:-

As on 31^st March, 2023, your Company does not have any Joint Ventures, Subsidiaries and Associates Company. Hence, the requirement of providing details in Form AOC-1 is not required.

30. CREDIT RATING:-

No Credit Rating has been done by the Company during the year.

31. EXTRACT OF ANNUAL RETURN:-

Pursuant to Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, the Annual Return in the Form MGT-7 as on 31^st March, 2023 is available on the Companys website https://www.khemanigroup.net.

32. AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE:-

The Company is listed on the SME Platform of BSE Limited. Hence, as per the exemptions available to SME Listed Companies, Auditors Certificate on Corporate Governance is not provided.

33. DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR

MANAGEMENT PERSONNEL WITH THE COMPANYS CODE OF CONDUCT:

The Code of Conduct of the Company aims at ensuring consistent standards of conduct and ethical business practices across the Company. All the Board Members and Senior Management Personnel have affirmed compliance with the Code on annual basis. In this regard certificate from Managing Directors as required under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been received by the Board and the same is attached to this report as Annexure-7.

34. MD / CFO CERTIFICATION:-

In terms of Regulation 17(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, the Managing Director and CFO have certified the accuracy of the Financial Statements and adequacy of Internal Control Systems for financial reporting for the year ended 31^st March, 2023. The certificate is attached herewith as per Annexure-8.

35. AWARDS AND RECOGNITION:-

During the year under review, your Company has achieved following awards by Hindustan Unilever Limited:

10 Years of Excellence Award;

Excellence Growth Award in ‘Modern Trade Division.

36. SECRETARIAL STANDARDS COMPLIANCE:-

The Company has ensured compliance with the mandated Secretarial Standard I & II issued by the Institute of Company Secretaries of India with respect to Board Meetings and General Meetings respectively and approved by the Central Government under section 118(10) of the Companies Act, 2013.

37. DISCLOSURE REGARDING PROCEEDINGS UNDER INSOLVENCY AND

BANKRUPTCY CODE (IBC), 2016:-

During the year under review, your Company has neither made any Application nor are any Proceedings pending under the Insolvency and Bankruptcy Code (IBC), 2016.

38. DISCLOSURE ABOUT THE DIFFERENCE BETWEEN THE AMOUNTS OF THE

VALUATION EXECUTED AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF:-

During the year under review, your Company was not required to do any Valuation while taking Loan from the Banks or Financial Institution.

39. GREEN INITIATIVES:-

In commitment to keep in line with the Green Initiative and going beyond it to create new green initiatives, electronic copy of the 12^th Annual Report of the Company will be sent to all Members via e-mail whose e-mail addresses are registered with the Company. For members who have not registered their e-mail addresses, physical copies will be sent through the permitted mode.

40. CAUTIONARY STATEMENT:-

The Annual Report including those which relate to the Boards Report, Management Discussion and Analysis Report may contain certain statements on the Companys intent expectations or forecasts that appear to be forward-looking within the meaning of applicable securities laws and regulations while actual outcomes may differ materially from what is expressed herein. The Company bears no obligations to update any such forward looking statement. Some of the factors that could affect the Companys performance could be the demand and supply for Companys product and services, changes in Government regulations, tax laws, etc.

41. ACKNOWLEDGEMENT:-

Your Directors would like to express their gratitude to the esteemed Shareholders for their trust and confidence in the management of the Company. They would also like to place on record their sincere appreciation for the continued co-operation, guidance, support, and assistance extended by bankers, customers, suppliers, local authorities, business associates, auditors, consultants, financial institutions, government and non-government agencies, and various other stakeholders.

The Directors appreciate and value the contribution made by every Members of the Company. Your Directors also wish to place on record their appreciation for the committed services by the executives, staff and employees of the Company.