Your Directors are pleased to present the 7th Annual Report of your Companytogether with the Audited Financial statements and Auditors' Report for the year ended on31st March 2020.
1. FINANCIAL PERFORMANCE:-
The financial performance of the Company is summarized below:
| || ||(Amount in Rs.) |
|Particulars ||2019-20 ||2018-19 |
|Revenue from Operations ||213991936.83 ||175532426.16 |
|Other Income ||1095422.68 ||344018.40 |
|Net Income ||215087359.51 ||175876444.56 |
|Profit/(Loss) Before Tax & Exceptional/Extraordinary ||20136356.16 ||15732051.00 |
|Items || || |
|Less: || || |
|Exceptional/Extraordinary items ||0.00 ||0.00 |
|Profit/(Loss) Before Tax ||20136356.16 ||15732051.00 |
|Less: Tax Expense : || || |
|- Current Tax ||3361160.00 ||3238725.00 |
|- Deferred Tax Charge/ (Credit) ||2532179.08 ||1904257.58 |
|Net Profit/(Loss) After Tax ||14243017.08 ||10589068.42 |
2. REVIEW OF OPERATIONS:-
The Net Income of your Company for the current year was increased to Rs.215087359.51/- as against Rs. 175876444.56/- of the previous year. Accordingly theCompany's Net Profit After Tax has been increased to Rs. 14243017.08/- for the currentyear as against the Net Profit After Tax of Rs. 10589068.42/- of the previous year.
3. BUSINESS GROWTH:-
Your Company has a dedicated team of Management and Operating Personnel who have beeninstrumental in the growth of the business over the years. Your Directors believe that theCompany has the potential to further scale up its business volumes and profitability andare in the process of identifying new avenues of growth and effective utilization of itsexisting resources.
In the last month of FY 2019-20 the COVID-19 pandemic developed rapidly into a globalcrisis forcing governments to enforce lock-downs of all economic activity. For theCompany the focus immediately shifted to ensuring the health and well-being of allemployees and on minimizing disruption to services for all our customers.
5. TRANSFER TO RESERVES:-
During the year under review your Directors have not proposed to transfer any amountto Reserves.
The Board of Directors in their meeting held on 30th June 2020 haverecommended a Dividend of Rs. 0.60/- per share on face value of Rs. 10/- each for theFinancial Year ended 31st March 2020 which shall be paid/dispatched within 30days of conclusion of the AGM subject to the approval of the members at the ensuing AGMof the Company. The Total Dividend outgo amounts to Rs. 31.69/- Lakh.
7. SHARE CAPITAL:-
During the year under review your Company's Authorized Share Capital has beenincreased from Rs. 5.00 Cr. divided into 5000000 (Fifty Lakh) equity shares of Rs. 10/-each to Rs. 6.00 Cr. divided into 6000000 (Sixty Lakh) equity shares of Rs. 10/- each.
During the year under review your Company's issued subscribed & paid up EquityShare Capital has been increased from Rs. 47828380/- (Rupees Four Crore Seventy EightLakh Twenty Eight Thousand Three Hundred Eighty) consisting of 4782838 (Forty Seven LakhEighty Two Thousand Eight Hundred Thirty Eight) equity shares of Rs. 10/- each to Rs.52611140/- (Rupees Five Crore Twenty Six Lakh Eleven Thousand One Hundred and Forty)consisting of 5261114 (Fifty Two Lakh Sixty One Thousand One Hundred and Fourteen)equity shares of Rs. 10/- each by way of issue of Bonus shares in the proportion of 1:10.
During the year under review your Company has neither invited nor accepted any PublicDeposits within the meaning of Section 73 of the Companies Act 2013 read with Companies(Acceptance of Deposit) Rules 2014.
9. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:-
Mr. Amar Doshi Mr. Karan Doshi Mr. Monish Doshi Mr. Pradeep Choksi Mr. Hetal Mehtaand Mrs. Shrungi Desai were the Directors on the Board at the beginning of financial year.
There was no change in the Board during the year.
As per the provisions of the Companies act 2013 Mr. Monish Doshi Director of theCompany retires by rotation at the ensuing Annual General Meeting and being eligibleseeks re-appointment.
Pursuant to the Section 2(51) and provisions of Section 203 of the Companies Act 2013read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014the Company has appointed Key Managerial Personnel (KMP) and there was no change in theKMP during the year.
10. DECLARATION FROM INDEPENDENT DIRECTORS :-
The Company has received necessary declaration from each Independent Directors underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of independenceas laid down in Section 149(6) of the Companies Act 2013 and Regulation 25 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The Board relies ontheir declaration of independence.
11. DIRECTORS' RESPONSIBILITY STATEMENT:-
Pursuant to the provisions of Section 134(5) of the Companies Act 2013 the Directorsconfirm that I. in the preparation of the Annual Accounts for the year ended 31stMarch 2020 the applicable accounting standards have been followed and no materialdepartures have been made for the same; II. appropriate accounting policies have beenselected and applied and such judgments and estimates have been made that are reasonableand prudent so as to give a true and fair view of the state of affairs of the Company atthe end of the financial year 31st March 2020 and of the profit of the Companyfor that period; III. proper and sufficient care have been taken for maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;IV. the annual accounts have been prepared on a going concern basis; V. theproper internal financial controls are laid down and are adequate and operatingeffectively; VI. the proper systems to ensure compliance with the provisions of allapplicable laws have been devised and such systems were adequate and operatingeffectively.
12. EXTRACT OF ANNUAL RETURN:-
As provided under Section 92(3) of the Companies Act 2013 read with Companies(Management and Administration) Rules 2014 the extract of the Annual Return in formMGT-9 is attached to this report as Annexure - 1.
13. DETAILS OF SUBSIDIARY JOINT VENTURE OR ASSOCIATES:-
As on 31st March 2020 your Company does not have any Joint VenturesSubsidiaries and Associates Company.
14. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:-
The Company has not given any loan or provided any guarantee or made any investmentunder provision of Section 186 of the Companies Act 2013.
15. CORPORATE SOCIAL RESPONSIBILITY [CSR]:-
The provisions of the CSR expenditure and Composition of Committee as provided in theSection 135 of the Companies Act 2013 is not applicable to the Company.
16. CHANGE IN THE NATURE OF BUSINESS:-
During the year there was no change in nature of Business of the Company.
17. RELATED PARTY TRANSACTIONS:-
All related party transactions that were entered during the financial year were on thearm's length basis and were in the ordinary course of business. Details of the relatedparty transactions made during the year are attached as Annexure - 2 in form AOC-2 foryour kind perusal and information in terms of Section 134 of the Companies Act 2013.
A policy on the related party Transitions was framed approved by the Board and postedon the Company's website www.aaronindustries.net.
18. MEETINGS OF BOARD OF DIRECTORS & COMMITTEE:-
During the year 7 (Seven) Board Meetings were held. The intervening gap between theMeetings did not exceed the period prescribed under the Companies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The details of whichare provided in Annexure - 3.
The details pertaining to the constitution and composition of the Audit CommitteeNomination & Remuneration Committee and Stakeholders Relationship Committee andmeetings held during the year are provided in Annexure - 3.
19. MEETINGS OF MEMBERS:-
During the year under review 1 (One) Extra Ordinary General Meeting was held on 18thApril 2019 and 6th Annual General Meeting of the Company was held on 24thAugust 2019.
a) STATUTORY AUDITOR:
The members at the 6th Annual General Meeting of the Company had appointedM/s. P. J. Desai & Co. Chartered Accountants (FRN 102330W) as the Statutory Auditorsof the Company to hold office from the conclusion of the said Annual General Meeting untilthe conclusion of 10th the Annual General Meeting to be held in the year 2023.The Ministry of Corporate Affairs vide its Notification dated 7th May 2018has dispensed with the requirement of ratification of Auditor's appointment by theshareholders every year. Hence the resolution relating to ratification of Auditor'sappointment is not included in the Notice of the ensuing Annual General Meeting. TheCompany has received a certificate from M/s. P. J. Desai & Co. confirming that theyare not disqualified from continuing as Statutory Auditors of the Company.
The Auditor's Reports for the Financial Year 2019-20 do not contain any qualificationreservation adverse remark or disclaimer. Notes to Accounts and Auditors remarks in theirreport are self-explanatory and do not call for any further comments. b) INTERNALAUDITORS:
The Board of the Company has appointed M/s. VCAS & Co. Chartered Accountant Suratas Internal Auditors of the Company.
c) COST AUDITORS:
Provisions related to Cost Auditor is not applicable to the Company.
21. BOARD EVALUATION:-
The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and Individual Directors pursuant to the provisions of the Companies Act2013 and the Corporate Governance requirements as prescribed by the SEBI Regulations.
The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors on the basis of the criteria such as the Board composition and structureeffectiveness of Board processes information and functioning etc.
The performance of the Committees was evaluated by the Board after seeking inputs fromthe Committee members on the basis of the criteria such as the composition of Committeeseffectiveness of Committee meetings etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of theIndividual Directors on the basis of the criteria such as the contribution of theIndividual Director to the Board and Committee meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the Chairman was also evaluated on the key aspects of his role.
In a separate meeting of Independent Directors performance of Non-IndependentDirectors performance of the Board as a whole and performance of the Chairman wasevaluated taking into account the views of Executive Directors and Non-ExecutiveDirectors. The same was discussed in the Board Meeting that followed the meeting of theIndependent Directors at which the performance of the Board its Committees andIndividual Directors was also discussed. Performance evaluation of Independent Directorswas done by the entire board excluding the Independent Director being evaluated.
22. PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO:-
The information on Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo stipulated under Section 134 (3)(m) of the Act read with Rule 8(3) ofthe Companies (Accounts) Rules 2014 is annexed as Annexure - 4 and forms part of thisReport.
23. PARTICULARS OF EMPLOYEES:-
None of the employee has received remuneration exceeding the limit as stated in rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
24. INTERNAL FINANCIAL CONTROL SYSTEM:-
The Company has its internal financial control systems commensurate with the size andcomplexity of its operations to ensure proper recording of financials and monitoring ofoperational effectiveness and compliance of various regulatory and statutory requirements.The management regularly monitors the safeguarding of its assets prevention and detectionof frauds and errors accuracy and completeness of the accounting records including timelypreparation of reliable financial information. The internal auditor consults and reviewsthe effectiveness and efficiency of the internal financial control systems and procedureto ensure that all the assets are protected against loss and that the financial andoperational information is accurate and complete in all respects. During the year noreportable material weakness in the design or operation were observed.
25. VIGIL MECHANISM/WHISTLE BLOWER POLICY:-
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors and employees to report their concerns about unethical behavior actual orsuspected fraud or violation of the Company's Code of Conduct or Ethics Policy. It aims toprovide an avenue for employees through this policy to raise their concerns on anyviolation of legal or regulatory requirements suspicious fraud misfeasancemisrepresentation of any financial statements and reports. It also provides for directaccess to the Chairman of the Audit Committee. The Vigil Mechanism/Whistle Blower Policyis being made available on the Company's website www.aaronindustries.net.
26. REMUNERATION POLICY:-
Pursuant to provision of Section 178(3) of the Companies Act 2013 The Board hasframed a Policy for selection appointment and remuneration of Directors and KeyManagerial Personnel including criteria for determining qualifications positiveattributes and independence of Directors. The Remuneration Policy has been uploaded on theCompany's website www.aaronindustries.net.
27. LISTING AGREEMENT:-
The Securities and Exchange Board of India (SEBI) on 2nd September 2015issued the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 withthe aim to consolidate and streamline the provisions of the Listing Agreement fordifferent segments of capital markets to ensure better enforceability. All listed entitiesare required to enter into the Listing Agreement and accordingly the Company entered intoListing Agreement with the NSE on 30th August 2018.
The Company has paid Annual listing fee for the year 2019-20 to National Stock Exchangeof India Limited. The Company has also paid Annual custodian charges of Depository to NSDLand CDSL.
28. REGISTRAR AND SHARE TRANSFER AGENT:-
Your Company has appointed M/s. Bigshare Services Private Limited as its Registrar andShare Transfer Agent and executed post IPO agreement between Company and M/s. BigshareServices Private Limited on 3rd September 2018.
29. HUMAN RESOURCES:-
The manpower strength of the Company as on 31st March 2020 was 85 permanentemployees including all Management Staff across different locations.
Your Company firmly believes that its human resources are the key enablers for thegrowth of the Company and important asset. Your Company continuously invests inattraction retention and development of talent on an ongoing basis.
During the year the Company has undertaken initiatives to reinforce a progressive workenvironment. The Company has held various session of Learning & Development fordifferent employees groups.
30. RATIO OF DIRECTORS' REMUNERATION TO MEDIAN EMPLOYEES' REMUNERATION AND OTHERDISCLOSURES:-
The table containing the names and other particulars of ratio of Directors'Remuneration to Median Employees' Remuneration in accordance with the provisions ofSection 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is attached to thisreport as
Annexure - 5.
31. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:-
Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 read with Schedule V of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is presented in a separate section forming part of thisAnnual Report. It provides details about the overall industry structure economicscenarios developments in business operations/ performance of the Company's businessesProduct Portfolio Distribution and Marketing Activities internal controls and theiradequacy Human Resource Development and Industrial Relations and other materialdevelopments during the financial year 2019-20.
32. SECRETARIAL AUDITOR & SECRETARIAL AUDIT REPORT:-
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Audit Committeerecommended and the Board of Directors has appointed Mr. Dhiren R. Dave Company Secretaryin Practice to conduct Secretarial Audit for the Financial Year 2020-21. The Report of theSecretarial Auditors is attached as Annexure - 6 in Form MR-3 to this Report. TheObservation made in the Secretarial Audit Report call for comment under Section 134(3)(f)of the Companies Act 2013 regarding Gap between two Audit Committee meetings12.07.2019 and 12.11.2019 is exceeding 120 days.
The Board clarifies the same as under:
Due to non-availability of committee members time gap of 120 was exceeded byonly 1 (One) day of two Audit Committee meetings held on 12.07.2019 and 12.11.2019.
33. REPORTING OF FRAUDS PARTICULARS:
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit committee and / or Board under Section 143(12)of the Act and the rules made thereunder.
34. CORPORATE GOVERNANCE:-
The Company has been exempted from reporting on Corporate Governance as per Regulation15 of the SEBI (Listing Obligation and Disclosure requirements) Regulations 2015.Therefore Corporate Governance Report is not provided.
35. AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE:-
As per Regulation 15 of the SEBI (Listing Obligation And Disclosure Requirement)Regulations 2015 the compliance with the Corporate Governance provisions shall not applyin respect of (a) listed entity having paid up equity share capital not exceeding tencrore and net worth not exceeding rupees twenty five crore as on the last day of previousyear (b) the listed entity which has listed its specified securities on the SME Exchange.Hence Auditors' Certificate on Corporate Governance is not provided.
36. CHIEF FINANCIAL OFFICER (CFO) CERTIFICATION:-
In compliance with Regulation 17(8) of the Listing Regulations a declaration by CFOwas placed before the Board certifying the accuracy of Financial Statements and theadequacy of internal controls pertaining to Financial Reporting for the year ended 31stMarch 2020 is attached herewith as per Annexure - 7.
37. CODE OF CONDUCT:-
The Board has laid down a specific code of Conduct for all Board Members and SeniorManagement of the Company. All the Board Members and Senior Management Personnel haveaffirmed compliance with the Code on annual basis. In this regard certificate fromManaging Directors as required under Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 has been received by the Board and the same isattached herewith as per Annexure - 8.
Code of Conduct form Board of Directors and Senior Management Personnel is available onthe Company's website www.aaronindustries.net.
38. MATERIAL CHANGES BETWEEN THE DATE OF THE BOARD REPORT AND END OF FINANCIAL YEAR:-
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of the report.
39. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION PROHIBITION & REDRESSAL) ACT 2013:-
In accordance with Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and the Rules framed thereunder the Company has formed an InternalComplaints Committee and also framed and adopted the policy for Prevention of SexualHarassment at Workplace.
During the year under review no complaints were received by the Company relating tosexual harassment at workplace.
40. RISK MANAGEMENT POLICY:-
The Company has been exempt under regulation 21 of the SEBI (Listing Obligation andDisclosure requirements) Regulations 2015 from reporting of risk management.
A well-defined risk management mechanism covering the risk mapping and trend analysisrisk exposure potential impact and risk mitigation process is in place. The board isfully aware of Risk Factor and is taking preventive measures wherever required.
Your Company has taken the required insurance coverage for its assets against thepossible risks like fire flood burglary etc.
42. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:-
There are no significant or material orders were passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its operations infuture.
43. GREEN INITIATIVES:-
In commitment to keep in line with the Green Initiative and going beyond it to createnew green initiatives electronic copy of the Notice of 7th Annual GeneralMeeting of the Company are sent to all Members whose email addresses are registered withthe Company/Depository Participant(s). For members who have not registered their e-mailaddresses physical copies are sent through the permitted mode.
Your Directors take this opportunity to thank the financial institutions GovernmentAuthorities customers vendors investors of the Company and the communities in which theCompany operates for their co-operation and valuable support extended to the Companyduring the year. Your Directors also wish to place on record their deep sense ofappreciation for the committed services by the Company's executives staff and workers.
| ||For and on behalf of the Board |
|Date: 20/07/2020 ||Amar Doshi |
|Place: Surat ||Chairman & Managing Director |
| ||DIN: 00856635 |