Khyati Multimedia Entertainment Ltd Directors Report.

Your Directors are pleased to submit herewith their report together with the audited statement of accounts for the 25th financial year ended 31st March, 2020.

[Amount in Rs.]

PARTICULARS 2019-20 2018-19
Income from Operation 28,57,609 0.00
Other Income - 59,916
Total Income 28,57,609 59,916
Total Expenditure 43,67,691 13,07,687
Profit/ (loss) before tax and dep. (15,10,082) (12,47,772)
Provision for depreciation 3748 3,748
Provision for Differ Tax 7,11,487 -
Net Profit / (Loss) after tax for the year (7,98,595) (12,47,772)

OPERATIONAL OVERVIEW

During the year under review the Company has earned total income from other sources of Rs. 28,57,609/- (Previous Year of Rs. 59,916). After deducting all administrative expenses and depreciation and necessary adjustments for taxation, etc. the company has incurred a net loss of Rs. (7,98,595)/- (Previous of Rs (12,47,772)/-.

DIVIDEND

Due to loss, your Directors have not recommended dividend for the financial year 2019-20.

BUSINESS ACTIVITY

Khyati Multimedia Entertainment Limited has involved in the area of high-quality Desktop Publishing, imaging, Corporate Presentations, advertisements, creative designing, graphic designing and multimedia software development and is also engaged in the business of letting out vehicle.

There was no change in the nature of any of the business activity during the year.

DETAILS OF THE ASSOCIATES/ JOINT VENTURE / SUBSIDIARIES COMAPANIES

The company does not have holding or subsidiary companies during the year and no other company has become holding / subsidiary/ joint venture.

FIXED DEPOSIT

The Company has not accepted any public deposit during the year under review and no amount against the same was outstanding at the end of the year.

REGULATORY STATEMENT

In conformity with Regulations of SEBI (Listing Obligation and Disclosures Regulations) 2015 the Cash Flow Statement for the year ended 31.03.2020 is annexed hereto. The equity shares of the Company are listed on the BSE Ltd.

The Company has paid listing fees for the year 2019-20 to above stock exchanges.

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

As required under Section 134 (3) (m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014, particulars relating to conservation of Energy, R & D, Technology absorption and foreign Exchange earnings / outgo are, not applicable to the Our Company.

DETAILS OF RELATED PARTIES TRANSACTIONS PURUSANT TO SECTION 188(1) OF THE COMPANIES ACT, 2013

The Company had entered into related parties transactions for sale/purchase of goods or services. On arms length basis. However, as there was no such business transactions or turnover in the previous financial year as well as no such transactions with any other outside parties during the year, the transactions though being done at the prevailing market rates as per prudent business practices, such transactions though not comparable with any other business transactions are treated at arms length basis, except the salary paid to employees and director and key managerial person. However, a lease rent is being paid to Mrs. Jignaben K Patel as per the valid lease rental agreement. The same were reported to the Board at every meeting and Board took a note of the same and approved. Other details for inter corporate financial transactions or remuneration and other benefits paid to directors, their relatives, key managerial personnel etc are given in the financial statements and also by way of notes to the Accounts in terms of AS 18.

The Company has formulated various other policies like Risk Management Policy, Evaluation of Board Performance Policy, and CSR Policy etc. All such policies were documented and adopted by the Board and also uploaded all the policies applicable on the website of the Company www.khyatimultimedia.com

Full details of Risk Management Policy are given in the Corporate Governance Report under the head Whistle Blower Policy.

As the Company is loss making one, the provisions related to CSR is presently not applicable to the Company.

Regarding Performance Review of each of the member of the Board and also the performance of the various Committees and the Board, the Company has adopted the Model Code of Conduct for Independent Directors, Key Managerial Personnel as prescribed in Schedule IV to the Companies Act, 2013 and also as prescribed in the SEBI (Insider Trading) Regulations. The Company strictly follows the procedure to obtain necessary timely declarations from each of the directors and key managerial personnel from time to time.

DETAILS OF LOANS, GUARANTEES AND INVESTMENTS U/S 186 OF THE COMPANIES ACT, 2013

During the year under review the Company has not made any inter corporate loans, investments, given any corporate guarantee to any other body corporate, subsidiary, associate or any other company. However, the company has borrowed a sum of Rs. 29,62,100 from Director as a unsecured loan at 0% Interest for dealing with the day to day fund requirement of the company.

The Board of Directors supports to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity. The Report on corporate governance as stipulated according to the SEBI (LODR) Regulation, 2015 forms part of the Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance as required under SEBI (LODR), Regulation 2015 is attached to the Report on corporate governance.

BOARD OF DIRECTORS

Details about the Board of Directors Meetings are attached to the Report on Corporate Governance. Further, Mr. Kartik J. Patel, will be the Director retiring by rotation and being eligible offers himself for re-appointment at the ensuing Annual General Meeting.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section

(6) of Section 149 of the Companies Act, 2013 and under Regulation of the SEBI (Listing Obligations and Disclosures) Regulations,2015 with the Stock Exchanges.

DECLARATION BY INDEPENDENT DIRECTORS:

(Pursuant to Provisions of section 149(6) OF the Companies Act 2013)

All the Independent Directors of the Company do hereby declare that:

(1) All the Independent Directors of the Company are neither Managing Director, nor a Whole Time Director nor a Manager or a Nominee Director.

(2) All the Independent Directors in the opinion of the Board are persons of integrity and possesses relevant expertise and experience.

(3) Who are or were not a Promoter of the Company or its Holding or subsidiary or associate company.

(4) Who are or were not related to promoters or directors in the company, its holding, subsidiary or associate company.

(5) Who has or had no pecuniary relationship with the company, its holding, subsidiary or associate company or their promoters or directors, during the two immediately preceding financial years or during the current financial year.

(6) None of whose relatives has or had pecuniary relationship or transaction with the company, its holding, subsidiary, or associate company, or their promoters, or directors, amounting to two per cent or more of its gross turnover or total income or fifty lakhs rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year,

(7) Who neither himself, nor any of his relatives,

(a) Holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of three financial years immediately preceding the financial year in which I\he is proposed to be appointed.

(b) Is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial years in which he is proposed to be appointed of

(i) A firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company; OR

(ii) Any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten per cent, or more of the gross turnover of such firm;

(iii) Holds together with his relatives two per cent, or more of the total voting power of the company; OR

(iv) Is a Chief Executive or director, by whatever name called, or any non-profit organization that receives twenty-five per cent or more of its receipts from the Company, any of its promoters, directors or its holding, subsidiary or associate company or that holds two per cent or more of the total voting power of the company; OR

Who possesses such other qualifications as may be prescribed.

(8) Both Independent Directors of the Company are yet to get themselves registered with the website of the Indian Institute of Corporate Affairs (IICA) as an Independent Director. However, both directors have requisite experience of working in a defined class company having such criteria as prescribed by MCA, they are not required to pass any examination for their appointment as Independent Directors.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of section 134 Clause (C) of Sub-Section (3) of the Companies Act, 2013, in relation to financial statements for the year 2019-20, the Board of Directors state:

a) In the preparation of the annual accounts for the financial year ended 31st March 2020, as far as possible and to the extent, if any, accounting standards mentioned by the auditors in their report as not complied with, all other applicable accounting standards have been followed along with proper explanation relating to material departure;

b) The Directors have 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 at the end of the financial year and profit and loss account of the Company for that period;

c) The Directors have 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 have prepared the annual accounts on a going concern basis; and

e) The directors in the case of a listed company 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 have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DECLARATION BY BOARD AS PER REQUIREMENT OF SECTION 178 (1)

In compliance with Section 178 (1) as also in compliance with Regulation of SEBI (LODR), 2015, the

Board of Directors does hereby declare that:

a. The Company has proper constitution of the Board of Directors including independent directors in proportion as per requirement of SEBI (LODR), 2015. However,

b. The Company has constituted Nomination and Remuneration Committee, Stakeholders Relationship Committee, Audit Committee as per requirements of the SEBI (LODR), 2015 and provisions of the Companies Act 2013. However, as the Company has only two Independent Directors, the Nomination and Remuneration committee is not formed as per requirements of the Companies Act 2013.

c. The Company has the policy for selection and appointment of independent directors who are persons of reputation in the society, have adequate educational qualification, sufficient business experience and have integrity & loyalty towards their duties.

d. The Company is not paying managerial remuneration to its Managing/Whole Time Directors based upon their qualification, experience and past remuneration received by them from their previous employers and companys financial position.

e. The Independent Directors are paid sitting fee for attending Board and other committee meetings as decided by the Board from time to time. This sitting fee is decided considering the financial position of the company.

f. The Company is not paying any commission on net profits to any directors.

g. During the year the Board has met 7 times during the year. The details of presence of every director at each meeting of the Board including the meetings of the Committees, if any, are given in the reports of the Corporate Governance.

INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY:

The details in respect of internal financial control and their adequacy are included in Management Discussion and Analysis Report, which forms part of this report.

SYSTEM OF PERFORMANCE EVALUATION OF THE BOARD, INDEPENDENT DIRECTORS AND

COMMITTEES AND INDIVIDUAL DIRECTORS

1. The Board makes evaluation of the effectiveness and efficiency of every individual director, committee of directors, independent directors and board as a whole.

2. For these purposes the Board makes evaluation twice in a year on a half yearly basis.

3. The performance of individual directors is evaluated by the entire Board, excluding the Director being evaluated on the basis of presence of every director at a meeting, effective participation in discussion of each of the business of agenda for the meetings, feedback receives from every director on draft of the minutes and follow up for action taken reports from first line management.

4. Effectiveness and performance of various committees are evaluated on the basis of the scope of work assign to each of the committees the action taken by the committees are reviews and evaluated on the basis of minutes and agenda papers for each of the committee meetings.

5. The performance of independent directors is evaluated on the basis of their participation at the meetings and post meeting follow up and communication from each of such independent directors.

DISCLOUSER AS PER COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014.

Total managerial remuneration paid to each of them during the current year and previous year are as under:

I. The Percentage of the remuneration of each director to the median remuneration of the employees of the company for the financial year:

Sr. Name of director No. Designation Remunerati on paid in current year Remunerat ion paid in previous year Total cost of remuneration of the employees Percentage remuneration of director to total cost of remuneration
1 Mr. Kartik J. Patel Managing Director NIL NIL NIL 0%
2 Mrs. Jignaben K. Patel Women Director NIL NIL NIL 0%
3 Mr. Prafulchandra Agarwal Non Independent Director NIL NIL NIL 0%
4 Mr. Arvind Prajapati Independent Director NIL NIL NIL 0%
5 Mr. Kamalkant Rao Independent director NIL NIL NIL 0%
6 Mr. Devilal J. Shah Upto 25/03/2019 Company Secretary 52,000/- NIL
7 Mrs. Deepa Gidwani Chief Financial Officer 3,00,000/- NIL NIL

II. The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any in the financial year:

There was no increase in remuneration.

III. The number of permanent employees on the rolls of company:

There were no other employees other than the Key Managerial person and directors which are on the pay rolls of company.

IV. The explanation on the relationship between average increase in remuneration and company performance;

NOT APPLICABLE as there was no substantial increase in remuneration of any employee during the year. The increase was only due to increase in inflation index.

V. Comparison of the remuneration of the Key managerial personnel against the performance of the company:

The KMP i.e. Whole time Directors and Financial Managers does not receive any remuneration apart from the Company Secretary & Chief Financial Officer who has been paid Remuneration of Rs. 3,52,000/-.

VI. Variations in the market capitalization of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the net worth of the company as at the close of the current financial year and previous financial year;

Closing Market Price of shares of Company as on 31/03/2020: Rs. 0.68/-

Closing Market Price of shares of Company as on 31/03/2019: Rs. 0.50/-

Earnings Per share for the financial year ended on 31/03/2020: Rs. (0.07)/-

Earnings per share for the financial year ended on 31/03/2019: Rs. (0.12)/-

Regarding other information like Variations in the market capitalization of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies is not given herewith since Company had made IPO more than 5 Years before and there was no substantial variation in the market price of shares of the company. Companys EPS is negative and hence PE Ratio is not given.

VII. Comparison of the remuneration of each key managerial personnel against the performance of the company;

As the company is paying minimum managerial remuneration to its managerial personnel and the Company is the loss making one the comparison of remuneration of each of the KMP with performance of the company is not comparable.

Since Managing director and Executive Directors are being not paid minimum remuneration and other KMPs are getting remuneration as per prevailing industry norms, it is not possible to compare remuneration with the performance of the company.

VIII. The key parameters for any variable component of remuneration availed by the directors;

NOT APPLICABLE.

IX. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year;

X. Affirmation that the remuneration is as per the remuneration policy of the Company.

All remuneration of the Employees and directors are paid as per remuneration policy of the Company.

PARTICULARS OF THE EMPLOYEES

Particulars of the employees as required under provisions of Section 197 (12) of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time, are not attached with this report since there was no employee who was in receipt of remuneration in excess of Rs.8,50,000 per month during the year or Rs. 1.02 Cr. per annum in the aggregate if employed part of the year.

AUDITORS

STATUTORY AUDITORS

M/s. MAAK & Associates Chartered Accountant were appointed in the Casual Vacancy for the Financial Year i.e. 2019-20 hence, the Board has now proposed to appoint the Statutory Auditors for a period of Next 5 Years. Necessary Resolution for their appointment as the Statutory Auditors and fixing their remuneration is proposed to be passed at the Annual General Meeting.

COST AUDITORS

NOT APPLICABLE

SECREATARIAL AUDITOR

The Company has appointed M/s. KAMLESH M. SHAH & CO., as the secretarial auditor for the financial year 2019-20. They have given their report in the prescribed form MR-3 which is annexed to this report as an ANNEXURE.

EXPLANATION TO THE AUDITORS REMARKS:

AUDITORS REMARK:

Advance Against Land (Unsecured, Considered Good) Amounting To Rs 208.75 Lakhs Has Been Paid To Certain Parties As Advance Against Land Over The Years But The Land Registration Has Not Yet Been Completed. Refer Note 9 To The Standalone Financial Statements. We Have Also Not Been Provided With The Registered Agreements Of Party Confirmations For The Said Advances.

Managements Reply to Auditors Remark:

Long Term loans and Advances as at Balance sheet date Represent bonavide long term loans and advances for value to be received in cash or in kind Respectively. The Advance for Capital items has been provided and company is in process of getting the Confirmation statements from them. The Same will be made available for verification once they are received.

MATERIAL CHANGES / INFORMATION:

1. No material changes have taken place after the closure of the financial year up to the date of this report which may have substantial effect on the business and financial of the Company. However, net worth of the company has been completely eroded

2. No significant and material orders have been passed by any of the regulators or courts or tribunals impacting the going concern status and companies operations in future.

APPRECIATION

Your Directors place on record their sincere appreciation for the valuable support and co-operation as received from government authorities, Financial Institutions and Banks during the year. The Directors are also thankful for the support extended by Customers, Suppliers and contribution made by the employees at all level. The Directors would also like to acknowledge continued patronage extended by Companys shareholders in its entire endeavor.

For and on behalf of the Board
Khyati Multi-Media Entertainment Limited Sd/-
Date: 03.09.2020 Kartik J. Patel
Place: Ahmedabad (DIN:00047862)
Chairman & Managing Director