Kush Industries Ltd

DIRECTORS' REPORT

Dear Members,

Your Directors present the 32^nd ANNUAL REPORT together with the Audited Financial Statements for the Financial Year 2023-24 ended 31^st March, 2024.

1. FINANCIAL RESULTS :

There are no material changes and commitment affecting the financial position of the Company which have occurred between 1^st April, 2024 and date of this report.

2. REVIEW OF OPERATIONS / COMPANY AFFAIRS:

During the year under review, the sales value is Rs. 66.32 Lakh, against sales value of Rs. 82.39 in the previous year. The Company incurred Loss before Depreciation of Rs. 4.30 lakh compared to Loss of Rs. 7.72 lakh in the previous year. After providing for Depreciation, effect of Exceptional items and Tax expenses the Net profit during the year stood at Rs. 227.08 lakh compared to Net Loss of Rs. 12.14 lakh in the previous year.

During the year under review, the Profit before/ after tax amounted to Rs. 227.08 lakh, mainly due to exceptional and one time income being profit of Rs. 231.40 lakh on disposal of undertaking at plot no, 129, GIDC, Ankleshwar. Excluding the same, the Loss before Depreciation and Tax was at Rs. 4.30 lakh as compared to loss of Rs. 7.72 lakh in the previous year.

The other comprehensive income stood at Rs. 4.95 lakh during the year as compared to loss of Rs. 1.25 lakhs in the previous year.

3. DIVIDEND & DIVIDEND DISTRIBUTION POLICY:

In view of the large accumulated losses, your Directors regret their inability to recommend any dividend on the Equity Shares of the Company.

4. FUTURE OUT LOOK:

The Company had started new trading activity in ceramics in last year but the same could not be extended hence will explore other profitable activities for company in future

5. FINANCE:

Fund arrangements including working capital have been prudently managed and during the current financial year company did not enjoy any financial assistance from Financial Institutions and Banks.

The Company has not raised any term loan during the year as well as not given any guarantee for loans taken by others from bank or financial institutions.

6. INCOME TAX ASSESSMENT:

The regular Income tax assessment of the Company has been completed till Assessment Year 201718. The Company has disputed liability of Rs. 81.64 Lakhs plus interest for Assessment Year 2017-18 against which company had paid Rs.22.53 Lakh against pendency of appeal before the Commissioner (Appeals). Sales tax assessment is completed up to the Financial Year 2001-02.

7. LISTING:

The Equity Shares of the Company are listed on BSE Limited. The Company is regular in payment of Annual Listing Fees. The Company has paid Listing fees up to the year 2023-24.

8. SHARE CAPITAL:

There are no changes in the authorized share capital and paid-up share capital during the period under review.

The issued, subscribed and paid up Share Capital of the Company as on 31^st March, 2024 was Rs. 15,25,00,000/-. As on 31^st March, 2024, the Company has not issued shares with differential voting rights nor granted stock options nor do sweat equity and none of the Directors of the Company hold any convertible instruments.

9. DIRECTORS:

9.1 One of your Directors viz. Mr. Mansukhlal K. Virani (DIN: 00873403), retires by rotation in terms of the Articles of Association of the Company. However, being eligible offers himself for reappointment.

The above re- appointment forms part of the Notice of the forthcoming 32^nd AGM and the resolutions are recommended for your approval.

9.2 The Board of Directors, in their meeting held on 30^th July, 2024 have appointed Mr. Hiren B. Hirpara (DIN: 02164972), as an Additional Director (Non-executive Independent Director) w.e.f. 1^st September, 2024 based on the recommendation of the Nomination and Remuneration Committee and subject to approval of members/shareholders. Furthermore, the appointment of Mr. Hiren B. Hirpara as a Non-executive Independent Director for a period of 5 years is being proposed at the ensuing 32^nd Annual General Meeting.

9.3 The Board, based on the recommendation of the Nomination and Remuneration Committee and subject to approval of members/shareholders, had reappointed Mr. Mansukhlal K. Virani (DIN: 00873403), as Whole time Director of the Company for a period of 5 years with effect from 1^st October, 2024 to hold the office upto the 30^th September, 2029.

9.4 Mr. Ranjitsinh A. Parmar will retire from the position of Independent Director of the Company upon the conclusion of the ensuing 32^nd Annual General Meeting.

9.5 Brief profile of the Director who is being appointed or re-appointed as required under Regulations 36(3) of Listing Regulations, 2015 and Secretarial Standard on General Meetings is provided in the notice for the forthcoming AGM of the Company.

9.6 The Board of Directors duly met 4 times during the financial year under review. The details of Board Meeting convened and held, are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and circulars and regulations issued under SEBI (LODR) Regulations, 2015 as amended from time to time.

9.7 The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 (the Act) that they meet with the criteria of their independence laid down in Section 149(6) of the Act.

9.8 FORMAL ANNUAL EVALUATION:

The Nomination and Remuneration Committee adopted a formal mechanism for evaluating the performance of the Board of Directors as well as that of its Committees and individual Directors, including Chairman of the Board, Key Managerial Personnel/ Senior Management etc. The exercise was carried out through an evaluation process covering aspects such as composition of the Board, experience, competencies, governance issues etc.

9.9 DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134 of the Companies Act, 2013, it is hereby confirmed:

(i) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) that 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 at 31^st March, 2024 being end of the financial year 2023-24 and of the profit of the Company for the year;

(iii) that the Directors had taken proper and sufficient care 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) that 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.

(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.

9.10 With respect to the loans advanced by the Directors to the Company, the Company has received necessary declarations from Directors that the said loan is not given out of funds acquired by them by borrowing or accepting loans or deposits from others.

10. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY:

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.

REMUNERATION OF DIRECTORS:

The Company has not paid any Managerial Remuneration or other benefits to any of its Directors. The Board of Directors has framed a Remuneration Policy that assures the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors, Key Managerial Personnel and Senior Management to enhance the quality required to run the Company successfully. The Relationship of remuneration to performance is clear and meets appropriate performance benchmarks. All the Board Members and Senior Management personnel have affirmed time to time implementation of the said Remuneration policy.

The Nomination and Remuneration Policy are available on the Company's website- www.kushindustrieslimited.com

12. KEY MANAGERIAL PERSONNEL (KMP) AND PERSONNEL:

The company at present has the following two personnel, statutorily required:

Remuneration of KMP:

13.1 INDUSTRIAL RELATIONS:

The industrial relations continued to remain cordial and peaceful and your Company continued to give ever increasing importance to training at all levels and other aspects of H. R. D.

The numbers of Employees of the Company are 2 (Two). The relationship between average increase in remuneration and Company's performance is as per the appropriate performance benchmarks and reflects short and long term performance objectives appropriate to the working of the Company and its goals.

13.2 PARTICULARS OF EMPLOYEES:

There is no Employee drawing remuneration requiring disclosure under Rule 5(2) of Companies (Appointment & Remuneration of Managerial personnel) Rules, 2014.

14. RELATED PARTY TRANSACTION AND DETAILS OF LOANS, GUARANTEES, INVESTMENT & SECURITIES PROVIDED:

Details of Related Party Transactions and Details of Loans, Guarantees and Investments covered under the provisions of Section 188 and 186 of the Companies Act, 2013 respectively are given in the notes to the Financial Statements attached to the Directors' Report.

All transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any transactions with related parties which could be considered as material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at www.kushindustrieslimited.com

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

The information required under Section 134(3) (m) of the Companies Act, 2013 and Rule 8(3) of Companies (Accounts) Rules, 2014, relating to the conservation of Energy and Technology Absorption forms part of this report and is given by way of Annexure - A.

16. CORPORATE GOVERNANCE AND MDA:

As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Report on Corporate Governance, Management Discussion and Analysis (MDA) and a certificate regarding compliance with the conditions of Corporate Governance are appended to the Annual Report as Annexure - B.

17. SECRETARIAL AUDIT REPORT:

Your Company has obtained Secretarial Audit Report as required under Section 204(1) of the Companies Act, 2013 from M/s. Kashyap R. Mehta & Associates, Company Secretaries, Ahmedabad. The said Report is attached with this Report as Annexure - D.

There are no remarks / qualification in the Secretarial Audit Report, hence no explanation has been offered.

18. WEB ADDRESS OF ANNUAL RETURN:

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the draft Annual Return as on 31^st March, 2024 is available on the Company's website www.kushindustrieslimited.com.

19. AUDIT COMMITTEE/ NOMINATION AND REMUNERATION COMMITTEE/ STAKEHOLDERS' RELATIONSHIP COMMITTEE:

The details of various committees and their functions are part of Corporate Governance Report.

20.1. STATUTORY AUDITORS:

The present Auditors of the Company M/s. V H Gundarwala & Co., Chartered Accountants (Firm Registration No. 113291W), were appointed as Statutory Auditors of the Company at the 28^th Annual General Meeting for a period of 5 years i.e. for financial years 2020-21 to 2024-25. They continue to hold office as Statutory Auditors till the conclusion of 33^rd AGM to be held in the year 2025.

The remarks of Auditor are self explanatory and have been explained in Notes on Accounts.

20.2 FIXED DEPOSITS:

The Company has not accepted any fixed deposits from the public within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

20.3 RISKS MANAGEMENT POLICY:

The Company has a risk management policy, which from time to time, is reviewed by the Audit Committee of Directors as well as by the Board of Directors. The Policy is reviewed quarterly by assessing the threats and opportunities that will impact the objectives set for the Company as a whole. The Policy is designed to provide the categorization of risk into threat and its cause, impact, treatment and control measures. As part of the Risk Management policy, the relevant parameters for protection of environment, safety of operations and health of people at work are monitored regularly with reference to statutory regulations and guidelines defined by the Company.

20.4 SUBSIDIARIES/ ASSOCIATES/ JVS:

The Company does not have any Subsidiaries/ Associates Companies / JVs.

20.5 RESEARCH & DEVELOPMENT:

The Company is continuously working on Research and Development resulting in new innovation leading to cost reduction and better product quality.

20.6 CODE OF CONDUCT:

The Board of Directors has laid down a Code of Conduct applicable to the Board of Directors and Senior Management. All the Board Members and Senior Management personnel have affirmed compliance with the code of conduct.

20.7 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

There have been no significant and material orders passed by any regulators or courts or tribunals, impacting the going concern status of the Company and its future operations.

20.8 ENVIRONMENT AND SAFETY:

The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.

20.9 DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

The Company has in place an Anti Sexual Harassment Policy, in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, the Company did not receive any complaint.

20.10 INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORS:

There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.

20.11 SECRETARIAL STANDARDS:

The Company complies with the Secretarial Standards, issued by the Institute of Company Secretaries of India, which are mandatorily applicable to the Company.

20.12 DETAILS OF PROCEEDINGS UNDER IBC & OTS, IF ANY:

There are no proceedings pending under the Insolvency and Bankruptcy Code, 2016. Further, there was no instance of one-time settlement with any Bank or Financial Institution.

20.13 AGREEMENTS EFFECTING THE CONTROL OF THE COMPANY:

No agreements have been entered / executed by the parties as mentioned under clause 5A of paragraph A of Part A of Schedule III of SEBI (Listing Obligation and Disclosures Requirements) Regulations, 2015 which, either directly or indirectly effect / impact the Management or Control of the Company or impose any restriction or create any liability upon the Company.

21. DISCLOSURE OF ACCOUNTING TREATMENT:

In the preparation of the financial statements, the Company has followed the Accounting Standards referred to in Section 133 of the Companies Act, 2013. The significant accounting policies which are consistently applied are set out in the Notes to the Financial Statements.

22. DISCLOSURE OF MAINTENANCE OF COST RECORDS:

Maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is not applicable to the Company.

23. DEMATERIALISATION OF EQUITY SHARES:

Shareholders have an option to dematerialise their shares with either of the depositories viz NSDL and CDSL. The ISIN No. allotted is INE979D01011.

24. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

During this period pursuant to the provisions under section 135 in respect of CSR, the same is not applicable to the Company. Hence, your Directors have not constituted the Corporate Social Responsibility (CSR) Committee.

25. INSIDER TRADING POLICY:

As required under the Insider Trading Policy Regulations of SEBI, your Directors have framed and approved Insider Trading Policy for the Company i.e. ‘Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information' and ‘Code of Conduct for Regulating Monitoring and Reporting of Trading by Designated Persons/Insiders'. The Policy is available on the company's website.

26. ACKNOWLEDGEMENT:

Your Directors express their sincere thanks and appreciation to Promoters and Shareholders for their constant support and co operation. Your Directors also place on record their grateful appreciation and co operation received from Bankers, Financial Institutions, Government Agencies and employees of the Company.