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Aarey Drugs & Pharmaceuticals Ltd.

BSE: 524412 Sector: Health care
NSE: AAREYDRUGS ISIN Code: INE198H01019
BSE 09:55 | 26 May 35.70 -0.10
(-0.28%)
OPEN

37.90

HIGH

37.90

LOW

35.55

NSE 09:39 | 26 May 36.05 0.25
(0.70%)
OPEN

36.25

HIGH

37.35

LOW

35.65

OPEN 37.90
PREVIOUS CLOSE 35.80
VOLUME 881
52-Week high 64.40
52-Week low 30.70
P/E 10.41
Mkt Cap.(Rs cr) 91
Buy Price 35.60
Buy Qty 85.00
Sell Price 35.80
Sell Qty 140.00
OPEN 37.90
CLOSE 35.80
VOLUME 881
52-Week high 64.40
52-Week low 30.70
P/E 10.41
Mkt Cap.(Rs cr) 91
Buy Price 35.60
Buy Qty 85.00
Sell Price 35.80
Sell Qty 140.00

Aarey Drugs & Pharmaceuticals Ltd. (AAREYDRUGS) - Director Report

Company director report

To

The Shareholders

Your Directors have pleasure in presenting the Thirty first Annual Report together withAudited Accounts for the year-ended 31sl March 2021.

FINANCIAL RESULTS:

(Amount in Rs.)

Particular 31st March 2021 31st March 2020
Income 3554310438 3067780783
Expenditure 3471296643 2995357260
(Loss )/ Profit Before Exceptional Item & Tax 83013795 72423523
Profit Before Tax 83013795 72423523
(Less)/ Add: Tax Expenses (17870735) (14488083)
Balance Carried To Balance Sheet 65143060 57935440

REVIEW OF OPERATIONS & FUTURE OULLOOK

Our company is manufacturing the following intermediates- Mono Methyl Urea Die MethylUrea. Ortho Para Nitro Anisole 2 Bromomethyl 13 Dioxalane & Uracile & in ActivePharma Ingredients the company is involved in manufacturing Metformin HCL Mefenamic Acid& Doxophylline. Besides we intend to increase capacity of all the products based uponthe demand of the product and also plans to do backward & forward integration ofproducts such as DMA- HCL Oitho chloro benzoic acid and further API's like theophylline.Necessary steps has been initiated.

COVH) 19 PANDEMIC IMPACT & RESPONSE

The first quarter of 2020 saw an unprecedented outbreak of COVTD-19 pandemic whichcaused an all-round disruption of economies around the world and dampened the alreadybleak economic prospects. It has proved to be one of the most damaging events of humanhistory and believed to have deep and cascading impact across the entire economic chain.Another significant disruption was in the area of Global supply chain wherein China is thekey link and was being heavily impacted by the Pandemic.

The second half of the year showcased the resilience of the Pharmaceutical Industrywith significant outcome of efforts on vaccine development with multiple vaccineapprovals. The launch of vaccination in some countries in End 2020 raised hopes of aneventual end to the pandemic. Moreover economic data released after the October 2020World Economic Organisation (WEO) forecast suggest stronger-than-projected momentum onaverage across regions in the second half of 2021.

The Office of the Company was closed due to nationwide lockdown imposed by theGovernment of India and the Company has adopted work from home policy for safety of theemployees DIVIDEND

Your directors do not recommend any dividend for the year ended 31sl March2021.

DEPOSITS

The Company has not accepted the deposits from the public as per the Section inaccordance with the provisions of Section 73 and 76 and other applicable provisions ofCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.

TRANSFER TO RESERVE:

Your Company has not transferred any amount to the General Reserves during the yearunder review.

CHANGES IN SHARE CAPITAL IF ANY:

During the financial year there has been no change in the Share Capital of theCompany. SUBSIDIARY / HOLDING COMPANY ETC.:

The Company does not have any Subsidiary Holding Company Associate or Group VentureCompany.

VIGIL MECHANISM

Pursuant to the requirements laid down under Section 177 of the Companies Act 2013 andRegulation 22 of the SEB1 Listing Regulations the Company has well laid down VigilMechanism. The details of the same are provided in the Report on Corporate Governanceforming part of this Annual Report. During the year the Company did not receive anycomplaint under Vigil mechanism.

CORPORATE SOCIAL RESPONSIBILITY

In accordance with the provisions of Section 135 of the Companies Act 2013 read withCompanies (Corporate Social Responsibility Policy) Rules 2014 as amended from time totime the Board of Directors of the Company has constituted Corporate SocialResponsibility (CSR) Committee Corporate Social Responsibility (CSR) is a good way ofconducting business by which corporate entities visibly contribute to the society. Theessence of CSR is to integrate the economic environment and social objectives of thecompany's operations and growth. CSR is the process by which the organization thinks aboutand evolves its relationship with the society and demonstrates its commitment by givingback to the society for the resources it used.

The Composition particulars of Meeting held and attendance thereat are mentioned inthe Corporate Governance Report forming part of the Annual Report.

The key philosophy of all CSR initiatives of the Company is guided by three corecommitments of Scale Impact and Sustainability.

During the year the Company has spent Rs. 1212880/- on CSR activities. The Companyhas identified focus areas of engagement which have been enumerated in the Annual Reporton CSR Activities attached as Annexure-A.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on 31 "March 2021 the Board consists of six members two of whom are ExecutiveDirectors and 3 are Independent Directors and one is Non-Executive Directors.

Mrs. Archana P. Wani (DIN: (03121886) was appointed as Additional Non-ExecutiveDirectors of the Company with effect from 17th April 2020 and has beenregularized at the Annual General Meeting held on 28th December 2020.

Mr. Niniit R. Ghatalia (DIN: (07069841) was appointed as an Additional ExecutiveDirector of the Company with effect from 01st July. 2020 and has beenregularized at the Annual General Meeting held on 28th December 2020.

Mr. Anil Mandal (D1N:( 08291619) was appointed as an Additional Independent Director ofthe Company with effect from 01st July 2020 and has been regularized at theAnnual General Meeting held on 28lh December 2020.

Mr. Rajesh P. Ghatalia had resigned from the position of Chief Financial Officer witheffect from 08th December 2020.

Mrs. Mira Mihir Ghatalia was appointed as the Chief Financial Officer of the Companywith effect from 04th January 2021.

Pursuant to the provisions of Section 203 of the Act Mihir R Ghatalia ManagingDirector Mrs. Mira Ghatalia. Chief Financial Officer and Mrs. Preeti Rathi CompanySecretary are the Key Managerial Personnel of the Company as on the date of this Report.

INTER-SE RELATIONSHIP BETWEEN DIRECTORS:

Mihir R Ghatalia Managing Director and Nimit R Ghatalia Director are relatives(siblings). Apart from this none of the Directors of the Company are in any way related toeach other.

DIRECTORS RESPONSIBILTV STATEMENT

As referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act2013 the Directors hereby confirm:

a) that in preparation of the Annual Accounts for the year ended 31st March.2021 the applicable accounting standards had been followed along with proper explanationrelating to material departures if any;

b) that the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive true and fair view of the state of affairs of the company at the end of financialyear ended 31st March. 2021 and the profit/) Loss) of the Company for the yearunder review;

c) that proper and sufficient care has been taken for maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

d) that the annual accounts for the year ended 31st March. 2021 have beenprepared on a "going concern basis'‘

e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

f) they devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

ANNUAL RETURN

Annual Return as provided under Section 92(3) and Section 134(3)(a) of the CompaniesAct 2013 is available on the website of the Company athttp://www.aareydrugs.com/pdf/annual- return/MGT-7.pdf

AUDITORS

M/s. Motilal & Associates Chartered Accountants (Firm Registration No:106584W)were appointed as Statutory Auditors of the Company at the 30thAnnualGeneral Meeting held on 28th December 2020 tor a term of five consecutiveyears from the conclusion of that Annual General Meeting to until the conclusion of 35thAnnualGeneral Meeting of the Company.

SECRETARIAL AUDIT REPORT

The Secretarial Audit Report pursuant to the provisions of Section 204 for thefinancial year 2020-21 was obtained from M/s. Virendra Bhatt& Associates PracticingCompany Secretaries which is annexed hereto as Annexure B.

The Board has re-appointed M/s. Virendra Bhatt& Associates Practicing CompanySecretaries as the Secretarial Auditors of the Company for the financial year 2021-22.

The Company’s reply to the Secretarial Auditor’s Observations:

The Secretarial Auditor has mentioned qualifications regarding the compliance ofRegulations (3) 17(1) 19 20 30 33 34 47 of the SLB1 (Listing Obligations andDisclosure Requirements) Regulations 2015 and other SLB1 Circulars in his report.

Due to Covid-19 pandemic and nationwide lockdown imposed by Government of India theOffice of the Company was closed and the employees are not habited to do work from home sothe Company has inadvertently delayed in filing the same.

In respect of non spending of funds under Corporate Social Responsibility Company hascalculated Corporate Social Responsibility amount on net profit after tax instead ofprofit before tax.

MEETINGS

During the financial year 2020-21 07 (seven) meetings of the Board of Directors and 06(six) meetings of the Audit Committee were held. Details of these meetings and otherCommittees of the Board/General Meeting are given in the Report on Corporate Governanceforming part of this Annual Report.

DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTOR

All the Independent Directors of the Company have furnished a declaration to the effectthat they meet the criteria of independence as provided in Section 149(6) of the Act andRegulation 16(1 )(b) and Regulation 25 of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ('the Listing Regulations'). Inthe opinion of the Board all the Independent Directors possess the integrity expertiseand experience including the proficiency required to be Independent Directors of theCompany fulfill the conditions of independence as specified in the Act and the ListingRegulations and are independent of the management and have also complied with the Code forIndependent Directors as prescribed in Schedule IV of the Companies Act 2013

PERFORMANCE EVALUATION AND ITS CRITERIA:

The Board of Directors carried out an evaluation of its own performance of the Board.Committees and of the individual Directors pursuant to the provisions of the Act andCorporate Governance requirements as prescribed by the Listing Regulations.

The performance of the Board and its Committees was evaluated by the Board afterseeking inputs from the Board / Committee Members based on criteria such as composition ofthe Board / Committees and structure effectiveness of the Board / Committee processesproviding of information and functioning etc. The Board and the Nomination andRemuneration Committee reviewed the performance of individual Directors based on criteriasuch as attendance in Board /

Committee meetings contribution in the meetings like preparedness on issues to bediscussed etc.

The Independent Directors at its separate meeting held on 25th February2021reviewed the performance of Non-Independent Directors and performance of the Board as awhole performance of the Chairman of the Company taking into account the views ofExecutive and Non-executive Directors and assessed the quality quantity and timeliness offlow of information to the Board to perform their duties effectively and reasonably.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:

The details of Loans given. Guarantees given and Investments made if any and coveredunder the provisions of Section 186 of the Act read with Companies (Meetings of Board andIts Powers) Rules 2014 are given in the notes to the Financial Statements forming part ofthis Annual Report.

COMMITTEES OF THE BOARD

The details of the powers functions composition and meetings of the Committees of theBoard held during the year are given in the Report on Corporate Governance section formingpart of this Annual Report.

AUDII COMMITTEE

The details pertaining to the composition terms of reference etc. of the AuditCommittee of the Board of Directors of the Company and the meetings thereof held duringthe financial year are given in the Report on Corporate Governance section forming part ofthis Annual Report. The recommendations of the Audit Committee were accepted by the Boardof Directors of the Company from time to time.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is produced as a part of the Annual Reportalong with the Auditors statement on its compliance.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS ANDOUTGO:

Your Company has made the necessary disclosures in this Report in terms of Section134(3) of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules2014is given in Annexure C and forms part of this report.

INTERNAL FINANCIAL CONTROL SYSTEM

The Board is responsible for establishing and maintaining adequate internal financialcontrol as per Section 134 of the Act.

Your Company has in place an adequate system of internal controls to ensure compliancewith various policies practices and statutes. It has procedures covering all financialand operating functions and processes. These have been designed to provide a reasonableassurance with regards to maintaining of proper accounting controls for ensuringreliability of financial reporting monitoring of operations protecting assets fromunauthorized use or losses and compliance with regulations. Key controls have been testedduring the year and corrective and preventive actions are taken for any weakness.

CHANGE IN THE NATURE OF BUSINESS (IF ANY):

There is no material change in the type of business the Company is carrying.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS(IF ANY):

The Directors of your Company confirm that no frauds or instances of mis-managementwere reported by the Statutory Auditors under sub-section (12) of Section 143 of theCompanies Act 2013.

COMPLIANCE WITH SECRETARIAL STANDARDS:

The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto 'Meetings of the Board of Directors' and 'General Meetings’ respectively havebeen duly followed by the Company.

MATERIAL CHANGES AND COMMITMENT:

Except as disclosed elsewhere in the Report there have been no material changes andcommitment affecting the financial position of your Company which have occurred betweenthe end of the financial year of the Company and the date of this Report.

SIGNIFICANT AND MATERIAL ORDERS:

No significant and material order has been passed by the Regulators or Courts orTribunals impacting the going concern status and Company’s operations in future.

PARTICULARS OF RELATED PARTY TRANSACTIONS:

All transactions entered into with related parties during the financial year were inthe ordinary course of business and on arm's length basis and do not attract theprovisions of Section 188(1) of the Act. Suitable disclosures as required by the IndianAccounting Standards (IndAS-24) have been made in the notes to the Financial Statements.The Board has a policy for related party transactions which lias been uploaded on theCompany’s website_ http://www.aareydrugs.com/pdf/2-Related-Party-Transaction.pdf

There were no material Related Party Transactions during the year. Accordingly FormNo. AOC-2 prescribed under the provisions of Section 134 (3)(h) of the Act and Rule 8 ofthe Companies (Accounts) Rules 2014 for disclosure of details of Related PartyTransactions which are not "not at arm's length basis" and also which are"material and arm's length basis" is not provided as an annexure to this Reportas it is not applicable.

PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN:

The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal)Act 2013.

Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary andtrainees) are covered under this policy who are also provided training about the Act.

During the year under review no complaint was received.

POLICIES AND DISCLOSURE REQUIREMENTS:

In terms of provisions of the Act and the Listing Regulations the Company has adoptedall the applicable policies. The policies are available on the website of the Company at_http://www.aareydrugs.com/financial.html

All Directors and Senior Management Personnel have affirmed their adherence to theprovisions of the Code of Conduct during the financial year 2020-21.

The Company’s policy on Directors’ appointment remuneration and othermatters provided in Section 178(3) of the Act forms part of Nomination and RemunerationPolicy and has been disclosed in the Corporate Governance Report.

CORPORATE GOVERNANCE & VIGIL MECHANISM:

A separate Corporate Governance Report on compliance with Corporate Governancerequirements as required under Regulation 34(3) read with Schedule V to the ListingRegulations forms part of this Annual Report. The same has been reviewed and certified byMr. Virendra G. Bhatt Practising Company Secretary the Secretarial Auditors of theCompany and Compliance Certificate in respect thereof is attached as Certificate ofCorporate Governnace.

RISK MANAGEMENT:

The Company has its Risk Management Plan & Policy in place which is also displayedon the website of the Company. In the opinion of the Board during the financial year2020-21 no elements of risk which may threaten the existence of the Company were noticedby the Board. The Committee monitors the risk management plan and ensures itseffectiveness. The details of Committee are set out in the Corporate Governance Report

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management’s Discussion and Analysis Report for the year tinder review asstipulated under the Listing Regulations is presented in a separate section forming partof this Report.

PROMOTERS:

The Promoter Group’s holding hi the Company as on 31st March 2021 was49.38%of the Company’s paid up Equity Capital. The members may note that theshareholding and other details of Promoters has been provided in Annual Return asmentioned below.

DISCLOSURE REGARDING MAINTENANCE OF COST RECORDS UNDER SECTION 148 OF THE COMPANIESACT 2013:

During the year under review. Maintenance of cost records under section 148 ofCompanies Act 2013 is not applicable to the Company as the Company did not carry on anyactivity as specified in Table A and B of Rule 3 of the Companies (Cost Records and Audit)Rules 2014.

EMPLOYEES:

There were no employees coming under the purview of Section 197(12) of the Act readwith Rules 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014and the rules frame there under.

REMUNERATION:

As per Section 197of the Companies Act 2013 the ratio of remuneration of eachdirector to the median remuneration of the employees of the company for the financialyear:

Name of the Director Ratio to Median employees
Mihir R Ghatalia Managing Director 5:3

DISCLOSURE UNDER SECTION 164

None of the Directors of the company are disqualified for being appointed as Directorsas specified under section 164 of the Companies Act 2013.

ACKNOWLEDGEMENTS

Your Directors wish to place on record the appreciation for the continued support ofthe customers Bankers and Suppliers. Your Directors acknowledge and thank the employeesfor their valuable contribution and involvement.

For and on behalf of the Board of Directors

Mihir R. Ghatalia

Chairman and Managing Director

Place: Mumbai

Dale: 29hJune 2021

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