Kanchi Karpooram Ltd

Dear Members,

Your Directors are pleased to present the 31st (Thirty First) Annual Report on the business and operations of the Company together with the Audited Financial Statements (Standalone & Consolidated) for the year ended 31st March, 2024.

FINANCIAL RESULTS

The Financial performance of the Company for the year ended 31st March, 2024 on a Standalone and Consolidated basis, is summarized below:

FINANCIAL PERFORMANCE

There was no change in the nature of business of the Company in the financial year 2023-24.

a. Standalone Performance

The Gross Revenue from operations for FY 2023-24 was at Rs. 13,116.28 Lakhs (Previous Year Rs. 20,856.89 Lakhs), showing a decrease of 37.11%.

The Company earned a Profit after tax of Rs. 128.95 Lakhs as against Rs. 1,414.65 Lakhs for the previous year, thereby registering a decline of 90.88%.

Due to decrease in the profit, the Earning per share (EPS) decreased from Rs. 32.38 in the previous year to Rs. 3.34 in the year under review.

The net worth of your Company increased to Rs. 19,891.74 Lakhs at the end of the FY 2023-24 from Rs. 19806.23 Lakhs at the end of FY 2022-23, thereby registering a growth of 0.43%

b. Consolidated Performance.

The Consolidated total sales of your Company for the FY 2023-24 was at Rs. 14,837.29 Lakhs (Previous Year Rs. 22,131 Lakhs), showing a decrease of 32.96%.

The Company earned a Consolidated Profit / (Loss) after tax of Rs. (22.22) Lakhs as against Rs. 1,288.82 Lakhs for the previous year, thereby registering a decline of (101.73)%

Due to decrease in the profit, the Earning per share (EPS) decreased from Rs. 30.91 in the previous year to Rs. 1.38 in the year under review.

The Consolidated net worth of your Company increased to Rs. 19,647.66 Lakhs at the end of the FY 2023-2024 from Rs. 19,704.90 lakhs at the end of FY 2022-2023, thereby registering a growth of 0.29%.

STATE OF THE COMPANY'S AFFAIRS

On the performance highlights specifically, despite the uncertainties, your Company is pleased to report a resilient performance for the financial year 2023-24, registering a total revenue of Rs. 13,116.28 Lakhs. Overall, demand from the end user market of Camphor, albeit a bit slower than it is expected, however, was stable.

EXTRACT OF ANNUAL RETURN

In accordance with Section 92(3) read with Section 13(3) and other provisions of the act the draft annual return in the form of MGT-7 as on 31st March 2024 is available on the website of your Company at web-link http://kklgroup.in/inspection_doc.php

DIVIDEND AND TRANSFER TO RESERVES IN TERMS OF SECTION 134 (3) (J) & (k) OF THE COMPANIES ACT, 2013:

Your Directors recommend a final dividend of Rs. 1.00 (10%) per fully paid up equity share of the face value of Rs. 10 per share. Payment of Dividend is subject to the approval of Shareholders at the ensuing Annual General Meeting. Your Directors do not propose to transfer any amount to reserves for the financial year ended 31st March, 2024.

DIRECTOR'S RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) 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 financial year 31st March, 2024, the applicable accounting standards have been followed and there are no material departures;

ii. 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 as at 31st March 2024 and of the profit of the Company for the year ended on that date;

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Directors have prepared the annual accounts on a going concern basis;

v. The Directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

vi. 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.

SHARE CAPITAL

The Authorized Share Capital of the Company is Rs. 7,00,00,000/-(Rupees Seven Crores only) divided into 70,00,000 (Seventy Lakhs) equity shares of Rs. 10 each.

The Issued, Subscribed and paid-Up Capital of the Company as on 31st March 2024 was Rs. 4,34,38,910/- (Rupees Four Crores Thirty-Four Lakhs Thirty-Eight Thousand Nine Hundred and Ten Only) divided into 43,43,891 (Forty-Three Lakhs Forty-Three Thousand Eight Hundred and Ninety One) equity shares of Rs. 10 each.

During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity.

INFORMATION ABOUT SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES

During the year under review your Company has one subsidiary Company - Kanchi Agro Product Private Limited. The Subsidiary Company's main business is trading in Raw Cashew nuts and other Agro products. During the financial year, it recorded a loss of Rs.167.25 Lakhs. Your Company has no associate or holding Company.

Pursuant to the provisions of Section 129 (3) of the Act, a statement containing the salient features of financial statements of the Company's subsidiaries in Form AOC-1 is attached as "Annexure-1" to the Board's Report.

DIRECTORS

During the year under review, the Board of Directors of the company comprises of Two Managing Directors, One Whole-time Director, one Non-executive Woman Director who are the Promoters of the company and four NonExecutive Directors which includes Three Independent Directors and one Woman Director. The composition of the Board of Directors is in compliance with Section 149 of the Companies Act, 2013.

During the financial year ended at 31st March 2024, there is no change in the composition of Board of Directors.

The Board of Directors had, on the recommendation of the Nomination and Remuneration Committee, at its meeting held on 29th May 2024 appointed Mr. Karaikudi Chandrasekaran Radhakrishnan (DIN: 10640673) as an Additional Director in the capacity of Non-Executive Independent Director of your Company with effect from 29th May 2024 for a term of five consecutive years whose appointment was approved by the shareholders during the Extra-ordinary general meeting held on 28th August, 2024 through OAVM

The Board of Directors had, on the recommendation of the Nomination and Remuneration Committee, at its meeting held on 13th August 2024 appointed Mrs. Ranjani Vydeeswaran (DIN: 10738461) as an Additional Director in the capacity of Non-Executive Independent Director of your Company with effect from 13th August 2024 for a term of five consecutive years whose appointment is subject to approval of the Members at the ensuing Annual General meeting to be held on 27th September 2024 and is accordingly placed for your approval.

The Company has received necessary declarations from the Independent Directors under section 149(7) of the Companies Act, 2013 stating that they meet the criteria of Independence as specified in Section 149(6) of the Companies Act, 2013 and as per Regulation of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015. The Company has set Familiarization programs for Independent Directors with regard to their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, the business model of the Company etc. The details of which are available on the website of the Company www.kklgroup.in

In accordance with the provisions of Section 152 (6) and other applicable provisions of the Companies Act, 2013 and the Company's Articles of Association, Mr. Arun Veerchand Shah, Whole time director retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself for re-appointment. The Board recommends his reappointment for the consideration of the Members of the Company at the ensuing Annual General Meeting.

NUMBER OF MEETINGS OF THE BOARD:

During the year 2023-24, Seven (07) Board Meetings were held, the details of which are given in the Corporate Governance Report that is annexed herewith as 'Annexure-7'

KEY MANAGERIAL PERSONNEL:

The following are the Key Managerial Personnel of the Company:

Mr. Suresh Veerchandji Shah - Managing Director (DIN - 01659809)

Mr. Dipesh Suresh Jain - Joint Managing Director (DIN - 01659930)

Mr. Arun Veerchand Shah - Whole Time Director (DIN - 01744884)

Mr. Surendra Kumar Shah - Chief Financial Officer

Mr. J. R. Vishnu Varthan, Company Secretary *

Ms. Kasi Viswanath Abirami - Company Secretary **

* Mr. J. R. Vishnu Varthan, Company Secretary resigned on 30th November 2023.

** Ms. Kasi Viswanath Abirami has been appointed as Company Secretary of the Company with effect from 10th May 2024

COMMITTEES OF THE BOARD

The Board of Directors has the following Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders' Relationship Committee

4. Corporate Social Responsibility Committee

The details of the Committees along with their composition, number of meetings, objectives and attendance at the meetings are provided in the Corporate Governance Report.

a) STATUTORY AUDITOR:

As per the provisions of Sections 139, 142 and other applicable provisions of the Companies Act, 2013, if any, read with the Companies (Audit and Auditors) Rules, 2014, the Auditors, M/s. P. Chandrasekar, LLP, Chartered Accountants (Firm Registration Number: 000580S/S200066) were appointed as Statutory Auditors of the Company at the 29th Annual General Meeting held on 9th September 2022 for a period of Five (5) consecutive Financial Years till the conclusion of Thirty Fourth Annual General Meeting. There are no qualifications or adverse remarks in the Statutory Audit Report which require any explanation from the Board of Directors.

b) COST RECORDS AND AUDITORS :

Pursuant to the provisions of Section 148(2) of the Companies Act, 2013 read with the Companies (Cost Records and Audit), Amendment Rules 2014, Board had appointed M/s. N. Sivashankaran & Co., Cost Accountants as cost auditors to conduct the audit of Cost accounting records for the financial year 2023-24.

The Board has re-appointed M/s. N. Sivashankaran & Co., Cost Accountants to conduct the audit of the cost accounting records of the Company for the financial year 2024-25 at a remuneration of Rs. 60,000/- plus out of pocket expenses and applicable taxes. The remuneration is subject to the ratification of the Members in terms of Section 148 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 and is accordingly placed for your ratification.

c) SECRETARIAL AUDIT:

The Secretarial Audit was carried out by Mr. N Lovelish Lodha, Practicing Company Secretary (Membership No. 35677) for the financial year ended 31st March 2024. The Report given by the Secretarial Auditors is annexed as 'Annexure-8' and forms an integral part of this Report.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. The Company is in compliance with the Secretarial Standards, specified by the Institute of Company Secretaries of India ('ICSI').

In terms of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, on the recommendation of the Audit Committee, the Board of Directors appointed Mr. N Lovelish Lodha, Practicing Company Secretary (Membership No. 35677) as the Secretarial Auditors of the Company for the financial year ending 31st March 2025.

The Company has received his written consent that his appointment is in accordance with the applicable provisions of the Act and rules framed thereunder. The Secretarial Auditor has confirmed that they are not disqualified to be appointed as the Secretarial Auditor of the Company for the financial year ending 31st March 2025.

d) INTERNAL AUDITOR:

Pursuant to the provisions of Section 138 of the Companies Act, 2013 and rules made there under, the Company has appointed M/s R. Subramanian & Co LLP Chartered Accountants, to undertake the Internal Audit of the Company for the financial year 2024-25.

e) COMMENTS ON AUDITORS' REPORT

There were no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditor and Secretarial Auditor in their reports, respectively.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The particulars of loans, guarantees and investments as per Section 186 of the Companies Act, 2013 by the Company, have been disclosed in the financial statements.

PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

All transactions entered with Related Parties for the year under review were on arm's length basis.

All related party transactions are placed before the Audit Committee for approval. Details of the transactions are provided in form AOC-2 in terms of Section 134 of the Companies Act, 2013 is appended as 'Annexure-2' to this Report.

As required under Regulation 23(1) of the SEBI Listing Regulations, the Company has formulated a policy on dealing with Related Party Transactions. The policy on dealing with Related Party Transactions as approved by the Board is uploaded on the Company's website www.kklgroup.in and the weblink thereto is: http://kklgroup.in/admin/upload/ corporate_governance/9/60463.pdf

CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING

The Company has a policy viz., "Code of Conduct for prevention of Insider Trading" and the same has been posted on its website: http://kklgroup.in/admin/upload/corporate_governance/1/93856.pdf

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were no material changes and commitments affecting the financial position of the Company between the end of the financial year (31st March 2024) and the date of the report.

SECRETARIAL STANDARDS:

During the period under review, your Company has complied with applicable Secretarial Standards i.e. SS-1 and SS-2, relating to "Meetings of the Board of Directors" and "General Meetings", respectively.

CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility Committee to meet the provisions laid down in Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR Report for the Financial Year 2023-24 is annexed to this report as 'Annexure-3'. The composition of CSR Committee and the details of the ongoing CSR projects/ programs/activities are included in the CSR report/section. The CSR policy is uploaded on the Company's website at the web link: http://kklgroup.in/admin/upload/corporate_ governance/7/71738.pdf

DEPOSITS FROM PUBLIC AND THE DETAILS OF DEPOSITS WHICH ARE NOT IN COMPLIANCE WITH THE REQUIREMENTS OF CHAPTER V OF THE ACT;

During the year under review, the Company did not accept any deposits within the meaning of provisions of Chapter V of Acceptance of Deposits by the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 and hence disclosure of the details under this head does not arise.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has an Internal Control System in accordance with Section 134(5)(e) of the Act, commensurate with the size, scale and complexity of its operations. The Audit Committee comprising of qualified Directors, interacts with the auditor, internal auditors and the management in dealing with matters within its terms of reference.

Your Company has adequate internal control system which includes financial control commensurate with the size, scale and complexity of Company's business and operations and also ensures that the Company's assets are well protected. These controls ensure transactions are authorized, recorded and reported correctly and assets are safeguarded and protected against loss from unauthorized use or disposition. In addition, there are operational controls and fraud risk controls, covering the entire spectrum of internal financial controls within the meaning of the Act. The internal audit evaluates the efficacy and adequacy of internal control system in the Company, its compliance with accounting procedures and policies of the Company. The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same.

CORPORATE GOVERNANCE

The Company is not only committed to maintain the standards of Corporate Governance set out by SEBI but also is morally committed to its Members. As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on corporate governance practices followed by the Company, together with a certificate from the Company's Auditors confirming compliance forms an integral part of this Report.

COST RECORDS

Your Company is maintaining cost records and reports in pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended, prescribed by the Central Government under sub - section (1) of Section 148 of the Companies Act, 2013.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to Section 177(9) of Companies Act 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has formulated a whistle blower mechanism. The Whistle Blower Policy covering all employees and directors is available in the Company's website:

http://kklgroup.in/admin/upload/corporate_governance/6/47991.pdf

This Policy aims to provide an appropriate platform and protection to all stakeholders to make protected disclosure of any actual or suspected incidents of unethical practices, violation of applicable laws and regulations The Policy also provides for adequate safeguards against retaliation and victimization of the whistleblower. All employees and Directors have access to Chairperson of the Audit Committee for any reporting.

Your Company hereby affirms that no complaints were received during the year. The Audit Committee of the Board oversees the functioning of Whistle Blower Policy.

BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a structured questionnaire was prepared after taking into consideration the various aspects of the Board's functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance. The performance evaluation of the Managing Director and the Non-Independent Directors was carried out by the Independent Directors. The performance evaluation of the Independent Directors was held by the Board of Directors on 10th May 2024. The Board of Directors expressed their satisfaction with the evaluation process.

The criteria for performance evaluation have been detailed in the Corporate Governance Report.

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 and the policy is available in the Company's website in the web-link at http://kklgroup.in/admin/upload/corporate_governance/12/10747.pdf.

This policy also lays down criteria for selection and appointment of Board Members. The details of this policy are explained in the Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report on the operations of the Company, as required under Regulation 34(2) of SEBI LODR (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in a separate section and forms a part of this Report as 'Annexure-4'.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators/ Courts that would impact the going concern status of the Company and its future operations.

CRYPTO CURRENCY AND VIRTUAL CURRENCY

During the year under review the Company has not traded or invested in Crypto or Virtual Currency.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3) (m) of the Companies Act, 2013, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed as 'Annexure-5' and forms a part of this report.

RISK MANAGEMENT:

Your Company, as part of Standard Operating System and Procedure institutionalized risk management covering risk identification, mitigation and management measures. This Risk Policy have been brought to practice as per part of internal control systems and procedures. The Management embed risk management into daily decision-making across all functions, fostering a culture that is aware of and responsive to risks and opportunities. The Company continuously assess risks and opportunities to ensure alignment between the Company's business strategy and the internal and external environment.

DETAILS IN RESPECT OF FRAUDS

The Company's Auditor's report does not have any statement on suspected fraud in the company operations to explain as per Sec. 134(3) (ca) of the Companies Act 2013.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

To maintain a safe and respectful workplace, the Company has established a Prevention of Sexual Harassment (POSH) Policy, which promotes adherence to applicable laws and promotes a culture of respect and inclusivity. Employees are encouraged to report any instances of sexual harassment promptly to a ensure timely resolution. During the year under review, no complaints were received by the Board.

PARTICULARS OF EMPLOYEES:

The Disclosure required under Section 197(12) of the Companies Act, 2013 read with the Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, relating to the ratio of remuneration of each director to the median employee's remuneration is annexed as 'Annexure-6' to this Report.

INSURANCE:

The Company's buildings, plant & machinery and inventories have been adequately insured

THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR

There was no pending application under the Insolvency and Bankruptcy Code, 2016 (31 of 2016).

THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE 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:

There is no requirement for valuation during the financial year under review.

APPRECIATIONS AND ACKNOWLEDGEMENTS:

Your Directors place on record their appreciation to employees at all levels for their dedication and commitment. Your Directors would also like to express their sincere appreciation for the assistance and co-operation received from the banks, financial institutions, Government Authorities, customers, vendors and Members during the year under review.