Khemani Distributors & Marketing Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting Annual report on the affairs of the Company together with the Audited Statement of Accounts for the year ended on 31st March, 2019.

1. FINANCIAL SUMMARY OR PERFORMANCE OF THE COMPANY:-

(In Lacs)
Particulars 2018-19 2017-18
Revenue from operation 6102.96 7070.28
Other Income (Non Operating) 242.78 143.59
Total Income 6345.74 7213.87
Total Expenditure 6013.26 6837.50
Profit/(Loss) before finance cost and exceptional item 332.48 376.37
Finance cost 16.80 74.32
Profit/(Loss) before exceptional item and tax 315.68 302.05
Add/(Less): Exceptional item -- --
Profit before Taxation 315.68 302.05
Add/(Less) : Tax Expenses 60.98 5.78
Profit after Taxation/Net profit 254.70 296.27

2. OPERATIONS:-

The total operating income of the company for the year under review is Rs. 6102.96 Lacs compared to the previous year’s operating income of Rs 7070.28 Lacs. The company has incurred profit before tax of Rs. 315.68 Lacs compared to previous year’s profit of Rs. 302.05 Lacs. The profit after tax of the Company is Rs. 254.69 Lacs compared to previous year’s profit after tax of Rs. 296.27 Lacs. In previous year, the company had received a dividend income of Rs. 26.79 Lacs from investments.

Your Directors are striving hard to increase the net worth of the Company in best interest of the members of the Company.

3. TRANSFER TO RESERVES:-

The Board of the company has proposed to carry Rs. 254.69 Lacs (being the profit for the current year) to reserves and surplus.

4. DIVIDEND:-

In view of the planned business growth, your directors deem it proper to conserve the resources of the Company for its activities/ expansion and therefore, do not propose any dividend for the Financial Year ended 31.03.2019 and carried forward the net profit balance to the next year.

5. SHARE CAPITAL

1) Authorised Capital

There is no change in the authorized share capital during the year.

2) Paid Up Share Capital

The Paid up share capital of the Company has remained unchanged to Rs. 5,74,35,000/- (Rupees Five Crore Seventy Four Lacs Thirty Five Thousand Only).

6. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS & COMPANY’S OPERATIONS IN FUTURE:-

During the year under review there has been no such significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future.

7. 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

No material changes and commitments affecting the financial position of the company have occurred between the end of the financial year of the company to which the financial statements relate and the date of this report

8. SUBSIDIARY / JOINT VENTURE / ASSOCIATE COMPANY:-

As on March 31, 2019, the Company does not have any subsidiary or joint venture or any associates Company.

9. STATUTORY AUDITOR & AUDIT REPORT:-

M/s C. P. Jaria & Co., Chartered Accountants (Firm registration No.104058W), is a Statutory Auditors of the Company to hold office of the Auditors of the Company from the conclusion of Annual General Meeting (5Th AGM) held on 28th September 2016 till conclusion of Annual general Meeting (10th AGM) of the Company to be held in the year 2021.

The Auditors Report for the year under review does not contain any reservations, qualifications or adverse remarks.

10. SECRETARIAL AUDIT:-

The Board had appointed Mrs. Richa Goyal, Practicing Company Secretaries, Surat as Secretarial Auditor pursuant to the provisions of Section 204 of the Companies Act, 2013. The Report of the Secretarial Auditor Form MR-3 is annexed to the Report as per "Annexure V"

11. CHANGE IN THE NATURE OF BUSINESS:-

There is no change in the nature of the business of the company.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL:-

Mr. Chinmay Methiwala has resigned from the post of Company Secretary W.e.f 19th July 2018 and Ms. Rekha Naraniwal was appointed W.e.f. 20th October, 2018 and the same was notified to the Bombay Stock Exchange.

Mr. Vijaykumar Mangturam Khemani has completed the term of three years as Managing Director of the Company and again reappointed on 21.06.2019 for five years. Mr. Amit Vijaykumar Khemani has completed the term of three years as Whole-time Director and Chief financial Officer and again reappointed on 21.06.2019 for five years.

Details of Directors and KMPs are as follows:-

S.N. Name od Directors/KMP Designation
1. Mr. Vijaykumar Khemani Managing Director
2. Mr. Amit Khemani Whole-time Director and CFO
3. Mrs. Anupa Khemani Non Executive Director
4. Mr. Mukesh Kabra Independent Non-Executive Director
5. Mr. Balkishan Agarwal Independent Non-Executive Director
6. Mr. Amit Jain Independent Non-Executive Director
7. Ms. Rekha Naraniwal Company Secretary

13. MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEE THEREOF:-

The Board of Directors of the Company met 9 (Nine) times during the year, in respect of which proper notices were given and the proceedings were properly recorded, signed and maintained in the Minutes Book kept by Company for the purpose. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. The details of the meetings of the Board held during the financial year are as follow:

Sr. No. Date of the Board Meeting
1 08/05/2018
2 19/05/2018
3 29/05/2018
4 05/09/2018
5 06/09/2018
6 20/10/2018
7 01/11/2018
8 17/12/2018
9 20/03/2019

The names of members of the Board and their attendance at the Board Meetings are as under:

Sr. No. Name of Director No. of Meetings attended
1 Mr. Vijaykumar Khemani 7
2 Mr. Amit Khemani 9
3 Mrs. Anupa Khemani 9
4 Mr. Amit Jain 6
5 Mr. Balkishan Agarwal 7
6 Mr. Mukesh Kabra 9

EXTRA ORDINARY GENERAL MEETING

During the year under review, The Company Does not hold any extra ordinary general meeting of members.

COMMITTEES OF BOARD

Currently, the Board has four committees i.e. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and CSR Commitee. All committees are constituted with proper composition of Independent Directors as mentioned in relevant provisions of Companies Act, 2013.

1. Audit Committee

Sr. No. Name of Director Designation Category
1 Mr. Mukesh D. Kabra Non executive Independent Director Chairman
3 Mr. Balkishan R. Agarwal Non executive Independent Director Member
2 Mr. Amit Khemani Whole-time Director Member

2. Nomination and Remuneration Committee

Sr. No. Name of Director Designation Category
1 Mr. Amit Jain Non executive Independent Director Chairman
2 Mr. Balkishan R. Agarwal Non executive Independent Director Member
3 Mr. Anupa Khemani Non executive Director Member

3. Stakeholders Relationship Committee

Sr. No. Name of Director Designation Category
1 Mr. Mukesh D. Kabra Non executive Independent Director Chairman
2 Mr. Amit Jain Non executive Independent Director Member
3 Mr. Vijaykumar Khemani Managing Director Member

4.Corporate Social Responsibility Committee

Sr. No. Name of Director Designation Category
1 Mr. Mukesh D. Kabra Non executive Independent Director Chairman
2 Mr. Vijaykumar Khemani Managing Director Member
3 Mr. Amit Khemani Whole-time Director Member

14. DEPOSITS:-

The Company has not invited / accepted any deposits within the meaning of section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules 2014 from the public during the year ended March31, 2019. There were no unclaimed or unpaid deposits as on March 31, 2019.

15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:-

The details of Energy, Technology, Absorption, Foreign Exchange Earnings and Outgo are as under:

1. Conservation of Energy:

a) The Company is not in manufacturing sector, therefore company has not adopted proper criteria for conservation of energy although company is committed to optimum utilization and maximum possible savings of energy.

b) No specific investment has been made in reduction in energy consumption.

2. Technology Absorption

The Company has no activity relating to technology absorption.

3. Foreign Exchange Earnings/ Outgo:

Company is not in the activity of import and export of goods, therefore it does not have any foreign earning and outgo as on 31st March, 2019.

16. CORPORATE SOCIAL RESPONSIBILITY:-

The company has approved the CSR policy and the Company has contributed Rs. 10,84,700/-(Rupees Ten Lakhs Eighty four Thousand seven hundred only) which is more than the statutory requirement under the law. The main thrust of the company has been to contribute towards Safe Drinking Water, Tree Plantation, Environmental Sustainability, Promoting Education, Eradicating Hunger Poverty & Social evils and promoting religious activities & Social welfare etc, which are in accordance with CSR Policy of the Company and Schedule VII of The Companies Act, 2013.

The CSR Committee is duly constituted and has contributed as per the provisions of section 135 of the Companies Act, 2013

The average net profits for the company for the last 3 financial years is Rs. 29090949

The prescribed CSR expenditure (2% of the average net profits)

Details of CSR spent during the financial year

A. Total amount to be spent during the financial year- Rs. 581819

B. Amount unspent, if any NIL

C. Manner in which CSR amount approved during the year

RS. 10,84,700 Rs 780300 in CSR Committee Meeting dated 20.04.2018

Rs 304400 in CSR Committee Meeting dated 01.10.2018

17. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:-

In pursuant to the section 177 (9) & (10) of the Companies Act, 2013,The Company has formulated a Whistle Blower Policy/vigil Mechanism with a view to providing a mechanism for director and employees to report violations and assure them of the process that will be followed to address the reported violation.

18. RISK MANAGEMENT POLICY:-

Risk Management is a key aspect of the "Corporate Governance Principles and Code of Conduct" which aims to improve the governance practices across the Company’s activities. The assessment of the risks covers Strategy, Technology, Financial, Operations & Systems, Legal & Regulatory and Human Resources Risks. There is appropriate assurance and monitoring mechanism in place to monitor the effectiveness of the risk management. Further company is in the process of developing risk management framework to implement and adhere to the policy to mitigate risk, avoid risk or take risk that cannot be mitigate or avoid for the benefit of the company’s business and growth.

COMMITTEE

The Company has not made Risk Management Committee but the Board of Directors and Audit Committee is looking after the Risk Management of the Company.

19. DIRECTORS’ RESPONSIBILITY STATEMENT:-

Pursuant to the requirement under section 134(3)(C) of the Companies Act, 2013 with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

(i) In the preparation of the annual accounts for the financial year ended 31st March, 2019, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) 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, 2019 and of the profit and loss of the company for that period;

(iii) The directors had taken proper and sufficient care 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;

(iv) The directors had prepared the annual accounts on a going concern basis;

(v) 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; and

(vi) 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.

20. DECLARATION BY INDEPENDENT DIRECTORS:-

The Company has received declaration from the Independent Directors of the Company under section149 (7) of the Companies Act, 2013 that he meets the criteria of independence laid down in section149 (6) of the Companies Act, 2013.

21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:- Details of loans, guarantees given and investments made by the Company during F.Y. 2018-19, pursuant to the provisions of Section 186 of the Companies Act, 2013 and Schedule V of the Listing Regulations are given in the note to the Financial Statements.

22. INTERNAL CONTROL SYSTEMS:-

The Company’s internal control systems are adequate and commensurate with the nature and size of the Company and it ensures:

• Timely and accurate financial reporting in accordance with applicable accounting standards.

• Optimum utilization, efficient monitoring, timely maintenance and safety of its assets.

• Compliance with applicable laws, regulations and management policies.

23. HUMAN RESOURCES AND INDUSTRIAL RELATIONS:-

Your Company treats its human resources as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. Your company’s trust is on the promotion of talent internally through job rotation and job enlargement.

24. PARTICULARS OF EMPLOYEE:-

Disclosure pertaining to remuneration and other details as required under section 197(12) of the Act, read with Rule 5(1) of the companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report as "Annexure I". Further, no employee of the Company was employed during the year drawing remuneration exceeding the limits as prescribed under Rule 5(2) of the(Appointment and Remuneration of Managerial Personnel) Rules, 2014. Hence the information under Rule 5(2) is not applicable.

25. RELATED PARTY TRANSACTIONS:-

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in ordinary course of business and on an arm’s length basis. Further, during the year, the

Company had not entered into any contract / arrangement /transaction with related parties covered under subsection (1) of section 188 of the Companies Act, 213 which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Details of transactions at arm’s length is as per AOC-2 which is attached as "Annexure-II". The details of the related party transactions as required under Accounting Standard-18 are set out in note to the financial statements forming part of this Annual Report.

26. EXTRACT OF ANNUAL RETURN:-

The extract of the annual return in form MGT-9 as "Annexure I" as required under section 134(3) (a) of the

Companies Act 2013 is annexed with this report.

27. INVESTOR EDUCATION AND PROTECTION FUND

There were no amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year.

28. LISTING OF EQUITY SHARE OF THE COMPANY:-

The equity shares of the company are listed on the SME platform of Bombay Stock Exchange Limited (BSE). The Company has paid the Annual Listing Fees to BSE for the financial year 2018-19.

29. BOARD EVALUATION:-

In compliance with the provision of Companies Act, 2013 and Listing Compliances, the Board carried out at an annual evaluation of its own performance and Independent directors. It also evaluated the performance of its committees. The evaluation inter-alia covered different aspects viz. composition of board and its committees, qualification, performance, inter-personal skills, submission done by the director in varied disciplines related to the company’s business etc.

30. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:-

In terms of the Regulation 34(e) of SEBI (LODR) Regulations, 2015, Management Discussion and Analysis Report is set out in the Annual Report as "Annexure III".

31. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:- In order to prevent sexual harassment of women at work place a new act, The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. 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 provision of the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules there under for prevention and redressal of complaints of sexual harassment at workplace. The company is committed to providing equal opportunities without regard to their race, caste, sex, religion, color, nationality, disability, etc. All women associates (permanent, temporary, contractual and trainees) as well as any women visiting the company’s office premises or women service providers are covered under this policy. All employees are treated with dignity with a view to maintain a work environment free of sexual harassment whether physical, verbal or psychological.

During the year under review, no complaints were received by the Company relating to sexual harassment at workplace. The Management of the Company endeavors to provide safe environment for the female employees of the Company.

32. CORPORATE GOVERNANCE:-

Your company is being SME Company and listed on SME exchange of BSE Limited. Therefore, pursuant to Regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, the compliance with corporate governance as specified in 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 shall not apply.

33. ACKNOWLEDGEMENT:-

Yours Directors place on record their sincere appreciation for the assistance and support received to the Company from the Shareholders, Banks, Consultants, Auditors and Clients of the Company. Yours directors express their appreciation for dedicated and sincere services rendered by the employees of the Company.

34. COMPLIANCES OF SECRETARIAL STANDARDS: -

The Company has made all the compliance of Secretarial Standards as notified by the MCA.

Place : Surat FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
Date : 03.08.2019 Sd/- Sd/-
Amit Khemani Vijaykumar Khemani
Whole Time Director Managing Director
DIN: 02227413 DIN: 02227389