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Aayush Food And Herbs Ltd.

BSE: 539528 Sector: Health care
NSE: N.A. ISIN Code: INE430R01015
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P/E 20.47
Mkt Cap.(Rs cr) 16
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OPEN 50.05
CLOSE 48.95
VOLUME 6753
52-Week high 53.45
52-Week low 15.85
P/E 20.47
Mkt Cap.(Rs cr) 16
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Aayush Food And Herbs Ltd. (AAYUSHFOODHERB) - Director Report

Company director report

Dear Shareholders

Your Directors are pleased to present their 33rd Annual Report of the Company alongwith the statement of Accounts for the financial year ended 31 March 2017.

FINANCIAL RESULTS (Rs. in Lakhs)
Particulars Year ended 31.03.2017 Year ended 31.03.2016
Gross Income from Sales & other operations 10037.09 537.05
Profit / (Loss) before depreciation and taxes 51.12 9.35
Less: Depreciation 0.51 0.82
Profit / (Loss) before taxes 50.61 8.52
Less : Provision for taxes including deferred taxes 17.55 0.09
Profit / (Loss) after taxes 33.06 8.43
Profit / (Loss) carried forward to Reserves & Surplus 33.06 8.43
Earning Per Share (in Rs.) 1.02 0.26

PERFORMANCE

During the year under review your company has achieved total revenue of Rs. 100.37Crore with all round improvement in performance including profitability. The company hasmade a Profit after Tax ("PAT”) of Rs. 33.06 Lakhs as compared to Profit AfterTax (“PAT”) of Rs. 8.43 Lakhs of last year. Your company is optimistic for theFinancial Year 2017-18.

DIVIDEND

Your Company strives to expand its operations across its new business. In view of thisyour directors consider it prudent and rational to conserve resources for beingappropriately re-invested into the Company's future operations and therefore do notrecommend any dividend on equity shares for the financial year under review.

RESERVES

The Company has transferred Rs. 33.06 Lakhs to reserves during Financial Year 2016-17.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

The provisions of Section 125(2) of the Companies Act 2013 do not apply as no dividendwas declared during the last financial years.

CHANGE IN SHARE CAPITAL

There has been no change in the capital structure of the Company during the year underreview.

DEPOSITS

During the year under review the Company has not accepted any deposits under theCompanies Act 2013 (“Act”). CHANGE IN PROMOTERS

Ms. Pallavi Mittal acted as an Acquirer in the Takeover Open Offer to acquire 26% ofthe shares of Aayush Food and Herbs Limited by issuing a Public announcement on March 172016 whereby she has acquired 513901 equity shares on September 202016 representing15.84% of the present issued subscribed and paid-up capital of the Company.

On completion of aforesaid offer obligations Ms. Pallavi Mittal along with Mr. AshishMittal (“PAC”) were recognized as promoters of the Company w.e.f 21.09.2016.

Further on Sep 23 2016 Ms Pallavi Mittal has acquired 500000 equity sharesrepresenting 15.41 % of the present paid- up equity share capital of the company persuantto the execution of Share Purchase Agreement dated March 172016 with Vertex Drugs PvtLtd.

Accordingly with the acquisition of above share the aggregate share holding of MsPallavi Mittal along with Mr Ashish Mittal reached to 1513901 equity shares representing46.65% of the present issued subscribed and paid-up capital of the Company.

INTER-SE TRANSFER OF SHARES AMONGST PROMOTER GROUP

On 16th May 2016 Ms. Pallavi Mittal acquired 500000 equity shares of Mr. AshishMittal pursuant to the provisions of regulation 10(1 )(a)(i) of SEBI (SubstantialAcquisition of Shares and Takeovers) Regulations 2011 pertaining to Inter-se transfer ofshares amongst promoter group being immediate relatives.

Post-acquisition of shares as above under inter-se transfer shareholding of Ms.Pallavi Mittal reached to 1513901 equity shares and shareholding of Mr. Ashish Mittalbecame Nil.

MANAGEMENT DISCUSSION & ANALYSIS

In line with the requirements of Regulation 34(3) read with Schedule V of ListingRegulations the Management Discussion & Analysis forms part of this report andannexed hereto as Annexure-A.

BOARD OF DIRECTORS COMMITTEES OF BOARD AND MEETINGS

• Composition and category of Directors

The Board as a main functionary is primary responsible to ensure value creation for itsstakeholders. The Board of Directors and its Committees through their leadership andguidance ensures the highest standards of corporate governance.

There were 6 (Six) Directors on Board as on 31st March 2017. There is an appropriatecombination of Independent and non-independent Directors on Board.

• Composition of Board and Directorships held as on 31 st March 2017

S. No. Name of the Director Category Particulars
1 Pallavi Mittal1 Managing Director Nil
2 Ajay Mathur* Independent Director Diamond Agro Industries Limited Justride Enterprises Limited Santosh Overseas Limited
3 Atul Kumar Chaturvedi Independent Director Ratan Exports and Industries Limited Coventry Coil-O-Matic (Haryana) Limited Priority Vanijya Private Ltd.
4 Rajesh Goel Independent Director Nil
5 Reema Aggarwal2 Additional Director 1. N.A. Foods Pvt. Ltd.
2. GPM Spinning Mills Pvt. Ltd.
3. Priority Vanijya Pvt. Ltd.
4. NavTradex Pvt. Ltd.
5. Santosh Warehousing Ltd.
6 Pawan Kumar Singh Independent Director Santosh Warehousing Limited

* Resigned from the Board w.e.f 22.06.2017

The Board consists of 5 (Five) Members 1 (one) of whom is an Executive Director 1(One) of them is a Non-Executive Woman Director and 3 (Three) of them are IndependentDirectors. The Company is in compliance with the composition of Board of Directors interms of the Companies Act 2013. All Independent Directors have confirmed that they havemet the criteria as mentioned under Section 149(7) of the Companies Act 2013(“Act”). During the year the Independent Directors have met on 15th March 2017without the presence of Non-Independent Directors and Members of the Management toevaluate the performance of Non-Independent Directors and the Board of Directors as awhole as required under section 149(8) of the Companies Act 2013 read with Schedule IVi.e. Code for Independent Directors.

Notes:

1. Appointed as an Additional Director w.e.f 13.01.2017 and designated as ManagingDirector by the Board w.e.f 28.06.2017.

2. Appointed as an Additional Director by the Board w.e.f 24.01.2017.

DECLARATION BY INDEPENDENT DIRECTORS

In compliance with section 149(7) of the Act all Independent Directors have givendeclaration that they meet the criteria of independence as laid down under Section 149(6)of the Act and Regulation 16(1 )(b) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

Mr. Atul Kumar Chaturvedi Mr. Rajesh Goel and Mr. Pawan Kumar Singh IndependentDirectors are already familiar with the nature and industry business plan and otheraspects of the Company. However the familiarization programs of Independent Directorsfamilarise the Independent Directors with the company in respect of their roles dutiesand responsibilities and related matters.

DIRECTORS' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and the reviews performed by the

Management and the relevant Board Committees including the Audit Committee the Boardis of the opinion that the Company's internal financial controls were adequate andeffective during the financial year 2016-17.

Accordingly pursuant to Section 134(5) of the Act the Board of Directors to the bestof their knowledge and ability confirm that: -

a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b) The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company forthat period;

c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

d) The Directors had prepared the annual accounts on a going concern basis;

e) The Directors had laid down proper Internal Financial Controls (“IFC”) andsuch IFC are adequate and were operating effectively;

f) The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review the Board made the following appointments /reappointments based on the recommendations of the Nomination and Remuneration Committee.

1. Appointment of Ms. Pallavi Mittal and Ms. Reema Aggarwal as Additional Directors inBoard Meeting dated 13th January 2017 and 24th January 2017 respectively who holdoffice upto the date of ensuing AGM. Notice along with the requisite deposit has beenreceived from the Members of the Company proposing their candidature. The Board recommendstheir appointment in the ensuing AGM.

2. Ms. Pallavi Mittal was designated as Managing Director of the Company subject toapproval of shareholders by the Board w.e.f. 28th June 2017. The Board recommends herappointment as Managing Director.

3. Mr. Ashish Mittal- Managing Director Mr. Sunil Mittal and Ms. Neena Mittal-Directors have resigned from the Board of the Company w.e.f 24.01.2017.

4. Mr. Ajay Mathur resigned as Director from the Board w.e.f. 22.06.2017.

5. Mr. Sachin Goyal CFO has resigned with effect from 16th June 2017.

6. Mr. Bhavdish Shrey was appointed as CFO with effect from 21 st Aug 2017.

BOARD MEETINGS

During the year under review there were 09 (Nine) Board Meetings held on 25th May2016 10th August 2016 24th August 201621st September 201612th November 201613thJanuary 201724th January 201710th February 2017 and 24th March 2017. Dates of BoardMeetings are generally decided in advance. The Board periodically reviews compliancereports of all laws applicable to the Company. The Board meets at least once in a quarterto review the quarterly results. Additional meetings are held as and when it isnecessary.

• Attendance of Directors for the year ended 31 st March 2017

Name of the Directors Position No. of Meetings attended
Pallavi Mittal* Managing Director 3
Atul Kumar Chaturvedi Independent Director 6
Rajesh Goel Independent Director 6
Reema Aggarwal** Additional Director 2
Pawan Kumar Singh Independent Director 3

* Appointed as Additional Director w.e.f 13th January 2017 and designated as ManagingDirector by the Board w.e.f 28.06.2017.

** Appointed as Additional Director w.e.f 24th January 2017.

• Board Committees

The Board has constituted various Committees with specific terms of reference / scopeto focus effectively on the issues and ensure expedient resolution of diverse matters. Theminutes of various Committee meetings are placed before the

Board for discussions review noting etc. The recommendations of the Committees areplaced before the Board for necessary approval.

The Board has constituted following Committees: -

i) Audit Committee;

ii) Nomination & Remuneration Committee; and

iii) Stakeholders' Relationship Committee;

Each Committee has appropriate combination of Independent and Non-IndependentDirectors. The Company Secretary acts as Secretary to all the Committees.

• Audit Committee

The Company has complied with the requirements of Section 177 of the Companies Act2013 with regard to the composition of the Audit Committee. All Members of the Committeeare financially literate and have relevant finance and/ or audit exposure. The Committeeis entrusted with the responsibility to supervise the Company's internal control andfinancial reporting process. The Statutory Auditors are invited in meeting as and whenrequired for interacting with the Members of the Committee regarding the accounts of theCompany.

The terms of reference of Audit Committee are as under:

1. To review and recommend the quarterly financial statements of the company;

2. To review internal control and internal audit system;

3. Review of Accounts and Reports;

4. Overseeing the vigil mechanism;

5. To make recommendation for appointment remuneration and terms of appointment ofauditors of the company.

Audit Committee has all the powers and scope of activities laid down in Section 177 ofthe Companies Act 2013. All recommendations made by the Audit Committee during the yearwere accepted by the Board.

During the year the Audit Committee has met 4 (Four) times on following dates:- 1.25thMay 2016;

2.10thAugust 2016;

3.12th November 2016;

4.10th February 2017.

The composition of the Committee and the attendance details of the Members are givenbelow:

Name of the Member Category No. of Meetings attended
Ajay Mathur* Member - Independent 4
Atul Kumar Chaturvedi Member - Independent 4
Neena Mittal** Member-Non-Independent and Non-Executive 3
Rajesh Goel Member- Independent 1
Pawan Kumar Singh*** Member- Independent N.A.

* Mr. Ajay Mathur was unanimously elected as Chairman in all the Audit CommitteeMeetings.

He has resigned w.e.f 22.06.2017.

** Ms. Neena Mittal has resigned w.e.f. 24.01.2017.

*** Appointed as committee member by the Board w.e.f 28.06.2017.

• Nomination & Remuneration Committee

In terms of Section 178 of the Act the Board has constituted the Nomination andRemuneration Committee to oversee the appointment of Directors and Senior Management andtheir remuneration including criteria for determining qualifications positive attributesindependence of a director and other matters.

During the year the committee has met twice on following dates:-

1. 13th January2017;

2. 24th January 2017.

The composition of this Committee and the details of meetings attended by Members aregiven below:-

Name of the Member Category No. of Meetings attended
Ajay Mathur* Member - Independent 2
Atul Kumar Chaturvedi Member - Independent 2
Neena Mittal** Member-Non-Independent and Non-Executive 1
Rajesh Goel Member- Independent 2
Pawan Kumar Singh*** Member- Independent N.A.

* Mr. Ajay Mathur was unanimously elected as Chairman in all the Nomination andRemuneration Committee Meetings. However he has resigned w.e.f 22.06.2017.

** Ms. Neena Mittal has resigned w.e.f 24.01.2017.

*** Appointed as committee member by the Board w.e.f 28.06.2017.

POLICYON DIRECTOR'S APPOINTMENT AND REMUNERATION

The policy of the Company on director's appointment and remuneration as required undersub-section 3 of Section 178 of the Companies Act 2013 is available on our website (www.aayushfoods.com ). There has been no change in thepolicy since the last financial year.

EVALUATION

The Board evaluated the effectiveness of its functioning and that of the Committees andof individual directors by seeking their inputs on various aspects of Board / CommitteeGovernance.

The aspects covered in the evaluation included the contribution to and monitoring ofcorporate governance practices participation in the long-term strategic planning and thefulfillment of Directors' obligations and fiduciary responsibilities including but notlimited to active participation at the Board and Committee meetings.

The Board considered and discussed the inputs received from the Directors.

Further the Independent Directors at their meeting reviewed the performance of BoardExecutive and Non-Executive Directors of the Board.

• STAKEHOLDERS' RELATIONSHIP COMMITTEE

In terms of Section 178 (5) of the Act the Board has constituted Stakeholders'Relationship Committee (“SRC”). The Committee shall specifically look into themechanism of redressal of grievances of shareholders including complaints related totransfer of shares non-receipt of annual report and non-receipt of declared dividends.

There was no meeting of the Committee during the year.

The composition of this Committee is given below:

Name of the Member Category No. of Meetings attended
Ajay Mathur* Member - Independent N.A.
Atul Kumar Chaturvedi Member - Independent N.A.
Neena Mittal** Member-Non-Independent and Non-Executive N.A.
Rajesh Goel Member- Independent N.A.
Pawan Kumar Singh*** Member- Independent N.A.

* Mr. Ajay Mathur has resigned w.e.f 22.06.2017.

** Ms. Neena Mittal has resigned w.e.f 24.01.2017.

*** Appointed as committee member by the Board w.e.f 28.06.2017.

Details of Shareholders' Complaints received resolved & pending during FY. 2016-17

Particulars No.s
Complaints pending as on 1 April 2016 Nil
Complaints received during the year ended 31 March 2017 Nil
Complaints disposed of during the year ended 31 March 2017 Nil
Complaints pending as on 31 March 2017 Nil

Name designation & address of Compliance Officer:-

Ms. Khushbu Mittal

Company Secretary

G-321 Chirag Delhi

New Delhi-110017

Ph. #011-41009092

E-Mail: aayushfoodherbs@gmail.com

INTERNAL FINANCIALCONTROL

Your Company has adequate internal control system in place commensurate with the sizescale and complexity of the operations. The Statutory Auditor has also commented on theinternal financial control on financial reporting in their report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT -9inAnnexure-B as per provisions of the Act and rules framed thereunder is annexed to thisReport.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The particulars of loans guarantees and investments have been disclosed in thefinancial statements.

SUBSIDIARY JOINTVENTURE AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary Joint Venture and Associate Company.

CORPORATE SOCIAL RESPONSIBILITY

The Company is not required to constitute a Corporate Social Responsibility Committeeas it does not fall within purview of Section 135(1) of the Companies Act 2013 and henceit is not required to formulate policy on corporate social responsibility.

RELATED PARTY TRANSACTIONS

All related party transactions (“RPT”) entered into during FY 2016-17 were onarm's length basis and also in the ordinary course of business.

The policy on RPT as approved by the Board is uploaded on the Company's website at thelink www.aayushfoods.com.

Details of material contracts or arrangement or transactions at arm's length basis withrelated parties referred to in Section 188(1) of Companies Act 2013 in the prescribedForm AOC-2 is appended as Annexure C to the Board's Report.

PROHIBITION OF INSIDER TRADING

Based on the requirements under SEBI (Prohibition of InsiderTrading) Regulations 2015as amended from time to time the code of practices and procedures for Fair Disclosure ofUnpublished Price Sensitive Information ("Code”) as approved by the Board is inforce. The objective of this Code is to protect the interest of shareholders at large toprevent misuse of any price sensitive information and to prevent any insider tradingactivity by dealing in shares of the Company by its Directors designated employees andother employees. The Company also adopts the concept of Trading Window Closure to preventits Directors Officers designated employees and other employees from trading in thesecurities of Aayush Food and Herbs Limited at the time when there is unpublished pricesensitive information.

SIGNIFICANT MATERIAL ORDERS PASSED BY REGULATORS/ COURTS

There were no significant material orders passed by the Regulators/Courts/Tribunalsimpacting the going concern status and Company's operations in future.

There were also no material changes and commitments after the closure of the year tillthe date of this report which affect the financial position of the Company.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars required by the Section 134(3)(m) of the Companies Act 2013 (“theAct”) read with rule 8(3) of the Companies (Accounts) Rules 2014 and forming part ofthe Directors' Report for the year ended March 312017:

A. Conservation of energy-
(i) the steps taken or impact on conservation of energy: NIL
(ii) the steps taken by the company for utilising alternate sources of energy: NIL
(iii) the capital investment on energy conservation equipments: NIL
(B) Technology absorption-
(i) the efforts made towards technology absorption: NIL
(ii) the benefits derived like product improvement cost reduction product development or import substitution: NIL
(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year): NIL
(iv) the expenditure incurred on Research and Development: NIL

C. Foreign Exchange Earning and outgo:

(i) Activities relating to exports; Initiative taken to increase exports developmentof new markets for products and services; and export plans:

During the year under review the Company was engaged in the export of Non Basmati Ricein different weight of packing. All the export was made to Gulf Countries basically toSaudi Arabia & Dubai (UAE). The Company receives all the remittances within therequisite time as per the LOA signed with customers. The Company abides all the rules& regulations with regard to foreign currency remittances prescribed by RBI.

(ii) Total Foreign Exchange Earned: USD 11767452.50
(iii) Total Foreign Exchange Used: NIL

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Act read with sub-rules (2) and(3) of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 there are no employees drawing remuneration in excess of the limits set outin the said Rules.

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are available for inspection at the registered officeand the same shall be furnished on request.

STATUTORY AUDITORS

M/sSudhirAgarwal & Associates (Firm Registration No. 509930C) CharteredAccountant who are the statutory auditors of the Company hold office until theconclusion of the ensuing AGM and are eligible for re-appointment. Members of the Companyat the AGM held on 20th September 2014 had approved the appointment of M/s SudhirAgarwalfora period of five financial years. As required by the provisions of the Companies Act2013 their appointment should be ratified by members each year at the AGM. Accordinglyrequisite resolution forms part of the notice convening the AGM.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company had appointed Mr. K. O.Siddiqui Practicing Company Secretary to undertake the Secretarial Audit of the Companyfor the year ended 31 March 2017. The Secretarial Audit Report is annexed in Annexure-Dherewith and forms part of this report.

AUDITORS' QUALIFICATION

There are no qualifications in the reports of the Statutory Auditors and SecretarialAuditors.

RISK MANAGEMENT

The Company has already identified the key risks areas which may affect the businessgoals and periodically revisits the relevance of the identified risks and progress of themitigation plans undertaken.

The Company has adopted a Risk Management Policy in accordance with the provisions ofthe Act. It establishes various levels of accountability and overview within the Company.

The Audit Committee of the Board of the Company has been entrusted with the task toframe implement and monitor the risk management plan for the Company and it isresponsible for reviewing the risk management plan and ensuring its effectiveness with anadditional oversight in the area of financial risks and controls.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has in place a Policy in line with the requirements of The SexualHarassment of Women at the Work place (Prevention Prohibition & Redressal) Act 2013.Internal Complaints Committee (“ICC”) is in place to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary traineesetc.) are covered underthis Policy.

The following is a summary of sexual harassment complaints received and disposed ofduring the year 2016-17:-

• No. of complaints received-NIL

• No. of complaints disposed of-NIL

VIGILMECHANISM

In pursuance to the provisions of section 177(9) & (10) of the Companies Act 2013the Company has established a vigil mechanism and overseas through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the chairman of the AuditCommittee on reporting issues concerning the interests of co employees and the Company.

The Company has adopted a policy on Vigil Mechanism which is available on our websitei.e. www.aayushfoods.com . ACKNOWLEDGEMENT

The Board takes this opportunity to sincerely thank all its stakeholders i.e.shareholders customers suppliers contractors bankers employees government agencieslocal authorities and the immediate society for their un-stinted support and co-operationduring the year.

On behalf of the Board of Directors On behalf of the Board of Directors
For Aayush Food and Herbs Limited For Aayush Food and Herbs Limited
Sd /- Sd/-
Pallavi Mittal Reema Aggarwal
Managing Director Director
DIN: 07704583 DIN: 01644142
Place: Delhi
Date: 21.08.2017