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Aaron Industries Ltd.

BSE: 535103 Sector: Engineering
NSE: AARON ISIN Code: INE721Z01010
BSE 05:30 | 01 Jan Aaron Industries Ltd
NSE 05:30 | 01 Jan Aaron Industries Ltd

Aaron Industries Ltd. (AARON) - Director Report

Company director report

To

The Members

Your Directors are pleased to present the 6th Annual Report of your Companytogether with the Audited Financial statements and Auditors'

Report for the year ended on 31st March 2019.

Financial Performance:-

The financial performance of the Company is summarized below:
(Amount in Rs.)
Particulars 2018-19 2017-18
Revenue from Operations 175532426.16 117685802.00
Other Income 344018.40 218306.37
Net Income 175876444.56 117904108.37
Profit/(Loss) Before Tax & Exceptional/Extraordinary Items 15732051.00 13391130.27
Less:
Exceptional/Extraordinary items 0.00 0.00
Profit/(Loss) Before Tax 15732051.00 13391130.27
Less: Tax Expense :
- Current Tax 3238725.00 3648665.00
- Deferred Tax Charge/ (Credit) 1904257.58 437116.00
Net Profit/(Loss) After Tax 10589068.42 9305348.84

Review Of Operations:-

The Net Income of your Company for the current year was increased to Rs.175876444.56/- as against Rs. 117904108.37/- of the previous year. Accordingly theCompany's Net Profit After Tax has been increased to Rs. 10589068.42/- for the currentyear as against the Net Profit After Tax of Rs. 9305348.84/- of the previous year.

Transfer To Reserves:-

During the year under review your Directors have not proposed to transfer any amountto Reserves.

Dividend:-

During the year under review your Directors have not recommended any Dividend onequity shares of the Company.

Deposits:-

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.

Board Of Directors And Key Managerial Personnel:-

i. Mr. Amar Doshi Mr. Karan Doshi Mr. Monish Doshi Mr. Pradeep Choksi Mr. HetalMehta and Mrs. Shrungi Desai were the Directors on the Board at the beginning of financialyear.

ii. There was no change in the Board during the year.

iii. As per the provisions of the Companies act 2013 Mr. Karan

Doshi Whole-time Director of the Company retires by rotation at the ensuing AnnualGeneral Meeting and being eligible seeks re-appointment.

iv. Pursuant to the Section 2(51) and provisions of Section 203 of the Companies Act2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the Company has appointed Key Managerial Personnel (KMP) and there was no change inthe KMP during the year.

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.

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

31st March 2019 the applicable accounting standards have been followed andno material departures have been made for the same;

ii. appropriate accounting policies have been selected and applied and such judgmentsand estimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year 31stMarch 2019 and of the profit of the Company for that period;

iii. proper and sufficient care have been taken for maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a "going concern" basis;

v. the proper internal financial controls are laid down and are adequate and operatingeffectively;

vi. the proper systems to ensure compliance with the provisions of all applicable lawshave been devised and such systems were adequate and operating effectively.

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.

Details Of Subsidiary Joint Venture Or Associates:-

As on 31st March 2019 your Company does not have any Joint VenturesSubsidiaries and Associates Company.

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.

Meetings Of Board Of Directors:-

During the year 13 (Thirteen) Board Meetings were held. The intervening gap betweenthe Meetings did not exceed the period prescribed under the Companies Act 2013 and theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The details ofwhich are as follow:

Sr. No. Date of Meeting Board Strength Director's present
1 2nd April 2018 6 6
2 23rd April 2018 6 6
3 4th May 2018 6 6
4 28th May 2018 6 6
5 5th June 2018 6 6
6 5th July 2018 6 6
7 1st August 2018 6 6
8 29th August 2018 6 6
9 1st October 2018 6 6
10 5th November 2018 6 4
11 20th February 2019 6 5
12 18th March 2019 6 5
13 23rd March 2019 6 3

Committee Meetings:-

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.

Auditors:-

i. Statutory Auditor:

M/s. P. J. Desai & Co. Chartered Accountants Surat was appointed as the StatutoryAuditors of the Company at the 1st AGM of the Company to hold office untilconclusion of the AGM to be held in the year 2019. Accordingly the tenure of M/s. P. J.Desai & Co. as Statutory Auditors is expiring at the ensuing AGM. In terms ofprovisions of Section 139 of the Act and the Rules made thereunder your Directors haveproposed re-appointment of M/s. P. J. Desai & Co. as Statutory Auditors of the Companyfor another term of 5 consecutive years from conclusion of the ensuing AGM of the Companytill conclusion of the 11th AGM of the Company to be held in the year 2024 forapproval of Shareholders of the Company. M/s. P. J. Desai & Co. has given consent toact as Auditors of the Company and has further confirmed that their appointment if madeat the ensuing AGM shall be in accordance with conditions specified in the Act.

The Auditor's Reports for the Financial Year 2018-19 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.

During the year under review the Auditors had not reported any matter under Section143(12) of the Companies Act 2013 therefore no details is required to be disclosed undersection 134(3)(ca) of the Act.

ii. Internal Auditors:

The Board of the Company has appointed M/s. VCAS & Co. Chartered Accountant Suratas Internal Auditors of the Company.

iii. Cost Auditors:

Provisions related to Cost Auditor is not applicable to the Company.

Particulars Of Loans Guarantees And Investments:-

During the year under review no loans or guarantees have been given to any person orbody corporate directly or indirectly and no investments have been made by the Companyunder Section 186 of the Companies Act 2013.

Change In The Nature Of Business:-

Earlier your Company was engaged in business of manufacturing of Elevator parts andElectrical products. Apart from that the Company has started new business of Polishingprocessing designing and finishing of Stainless Steel Sheet at Block No. 251 RoyalIndustrial Park Village- Moti Pardi Taluka - Mangrol Surat - 394120 Gujarat in theYear 2018-19.

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.

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.

Internal Financial Control System:-

The Company has a well placed proper and adequate internal financial control systemwhich ensures that all the assets are safeguarded and protected and that the transactionsare authorized recorded and reported correctly. The internal audit covers a wide varietyof operational matters and ensures compliance with specific standard with regards toavailability and suitability of policies and procedures. During the year no reportablematerial weakness in the design or operation were observed.

Policy:-

i. Vigil Mechanism (Whistle Blower Policy):-

The Company has adopted Vigil Mechanism/Whistle Blower Policy in accordance with theprovisions of Section 177 of the Companies Act 2013 read with Rule 7 of the Companies(Meetings of Board and its Powers) Rules 2014 and Regulation 22 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. It aims to provide an avenuefor employees through this policy to raise their concerns on any violation of legal orregulatory requirements suspicious fraud misfeasance misrepresentation of any financialstatements and reports. The Vigil Mechanism/Whistle Blower Policy is being made availableon the Company's website www.aaronindustries.net.

ii. 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.

Listing Of Shares:-

Your Company issued a Prospectus dated 4th August 2018 and the basis ofallotment was finalized in consultation with the National Stock Exchange of India Limited(NSE) on 29th August 2018. The Company allotted fully paid up 1257000 EquityShares of Rs. 10/- each at a price of Rs. 38/- per Share (including premium of Rs. 28/-per Share). The Equity Shares of the Company were listed and admitted to dealings on theEmerge Platform of NSE with effect from 3rd September 2018.

Use Of Proceeds:-

The proceeds from the Issue of the Company vide prospectus dated 4th August2018 have been utilized in process of utilization for the purpose for which they wereraised. There are no deviation of funds raised by IPO.

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.

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.

Human Resources:-

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.

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 theprovisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is attachedto this report as Annexure - 5.

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.

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 2018-19.

Corporate Governance:-

The Company has been exempt from reporting on Corporate Governance as per Regulation 15of the SEBI (Listing Obligation and Disclosure requirements) Regulations 2015. ThereforeCorporate Governance Report is not provided.

Secretarial Auditor:

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 appointed Mr. Dhiren R. Dave Company Secretary toconduct Secretarial Audit for the Financial Year 2018-19. The Report of the SecretarialAuditors is attached as Annexure - 6 in Form MR-3 to this Report and does not contain anyqualification reservation adverse remark or disclaimer.

During the year under review the Secretarial Auditor had not reported any matter underSection 143(12) of the Companies Act 2013 therefore no details is required to bedisclosed under section 134(3)(ca) of the Act.

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 2019 is attached herewith as per Annexure - 7.

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.

Code Of Conduct:-

Board of Directors of the Company has formulated and adopted Code of Conduct for Boardof Directors and Senior Management Personnel from 10th February 2018. Duringthe year Board of Directors and Senior Management Personnel has complied with generalduties rules acts and regulations. In this regard certificate from Managing Directors asrequired under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 has been received by the Board and the same is attached herewith as perAnnexure - 8

Code of Conduct form Board of Directors and Senior Management Personnel is available onthe Company's website www.aaronindustries.net.

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.

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.

Disclosures Under Sexual Harassment Of Women At Workplace (Prevention Prohibition& Redressal) Act 2013:-

During the year under review no complaints were received by the Company relating tosexual harassment at workplace.

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.

Insurance:-

Your Company has taken the required insurance coverage for its assets against thepossible risks like fire flood burglary etc.

Significant And Material Orders Passed By The Regulators Or Courts Or Tribunals:-

During the year under review no significant or material orders were passed by theRegulators or Courts or Tribunals which would impact the going concern status of theCompany and its operations in future.

Appreciation:-

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 of appreciation for thecommitted services by the Company's executives staff and workers.

For and on behalf of the Board of
Aaron Industries Limited
Amar Doshi
Date: 12/07/2019 Chairman & Managing Director
Place: Surat DIN: 00856635