To,
The Members,
Aartech Solonics Limited
Your directors are pleased in presenting their 41st Annual
Report on the business performance and operations along with the Audited Financial
Statements with the consolidated financial statements of the company and the Auditor's
Report for the financial year ended March 31, 2023.
1. FINANCIAL SUMMARY OR HIGHLIGHTS / PERFORMANCE OF THE COMPANY:
The summary of the Standalone and Consolidated performance are set out
below: -
(In Lakhs)
|
Standalone |
Consolidated |
PARTICULARS |
Year ended 31st March 2023 |
Year ended 31st March 2022 |
Year ended 31st March 2023 |
Year ended 31st March 2022 |
Revenue from Operations |
2,164.67 |
1,635.96 |
2,168.80 |
1,633.64 |
Other Income |
213.39 |
181.98 |
187.19 |
145.17 |
Total Revenue |
2,378.07 |
1,818.00 |
2,356.00 |
1,778.81 |
Less: Expenses |
(2,138.07) |
(1,645.99) |
(2,120.90) |
(1,436.40) |
Profit before Finance Cost, Depreciation/ Amortisation
Expenses & Tax |
239.99 |
172.01 |
235.10 |
342.41 |
Exceptional Items |
- |
- |
- |
- |
Profit before Depreciation/ Amortisation Expenses & Tax |
239.99 |
172.01 |
235.10 |
342.41 |
Less: Depreciation/ Amortisation Expenses |
|
|
|
|
Profit/ (Loss) before tax |
239.99 |
172.01 |
235.10 |
342.41 |
Current T ax |
46.26 |
28.70 |
47.10 |
59.25 |
Deferred Tax |
0.61 |
1.52 |
2.17 |
3.41 |
Net Profit/ (Loss) after tax |
193.12 |
141.79 |
185.83 |
279.75 |
2. BRIEF DESCRIPTION OF THE COMPANY'S OPERATIONS DURING THE YEAR /
STATE OF COMPANY'S AFFAIR
STANDALONE
At Standalone level, the Revenue from operations amounted to Rs
2,164.67 Lakhs as against Rs 1,635.96 Lakhs in the previous year. The Profit before Tax
amounted to Rs 239.99 Lakhs as against Rs 172.01 Lakhs in the previous year. The Net
Profit for the year amounted to Rs 193.12 Lakhs as against Net Profit of Rs 141.79 Lakhs
reported in the previous year.
CONSOLIDATED
The Consolidated Revenue from Operations amounted to Rs 2,168.80 Lakhs
as against Rs 1,633.64 Lakhs in the previous year. The Consolidated Profit before Tax
amounted to Rs235.10 Lakhs as against Consolidated Profit before Tax amounted to Rs342.41
Lakhs in the previous year. The Consolidated Net Profit after Tax amounted to Rs185.83
Lakhs as against Consolidated Net Profit after Tax amounted to Rs279.75 Lakhs in previous
year.
3. CHANGE IN NATURE OF BUSINESS
There was no change in business of the Company during the year under
review.
4. DIVIDEND
Based on the Company's performance and considering the accumulated
profit of the previous years, your directors have recommended a dividend of Rs 0.50/-
(Fifty Paise) i.e. 5% per equity share of Face Value Rs10.00 (Rupees Ten only) each
(previous year Rs 0.50/- per equity share i.e. 5% on the equity share of Rs10/- each) for
the financial year 2022-23 subject to the TDS as may be applicable. The dividend payment
is subject to the approval of members at the ensuing Annual General Meeting and will be
paid to those members whose names appear in the Company's Register of Members and are
beneficial owners as per the details to be furnished by National Securities Depository
Limited (NSDL) and Central Depository Services (India) Limited. (CDSL) as on the date of
book closure date and shall be paid within the period of 30 days from the date of
declaration at the Annual General Meeting.
Pursuant to the Finance Act, 2020, dividend income is taxable in the
hands of the members w.e.f. April 1, 2020 and the Company is required to deduct tax at
source (TDS) from dividend paid to the members at prescribed rates as per the Income-tax
Act, 1961.
The Register of Members and Share Transfer Books of the Company shall
remain closed from Saturday, September 23, 2023 to Saturday, September 30, 2023 (both days
inclusive) for the purpose of ascertainment for eligibility for participation in payment
of dividend for the financial year ended March 31, 2023.
5. SHARE CAPITAL
During the period under review, there has been no change in the
Authorized Share Capital of the Company which stand at Rs15,00,00,000/- (Rupees Fifteen
Crores Only) divided into 15000000 (One Crore Fifty Lakh) equity shares of Rs10/- (Rupees
Ten only) each.
The paid-up equity share capital as at March 31, 2023 is Rs.
10,59,01,250/- (Rupees Ten Crore Fifty-Nine Lakh One Thousand Two Hundred Fifty only)
divided into 10590125 (One Crore Five Lakh Ninety Thousand One Hundred and Twenty Five)
equity shares of Rs10/- (Rupees Ten only) each.
6. RESERVES
Your directors proposed to transfer Rs193.12 Lakhs to the general
reserve out of the profits available with the Company for appropriations.
7. DEPOSITS
During the year under review, the Company has not accepted or renewed
any deposits falling within the purview of provisions of Section 73 of the Companies Act,
2013 read with The Companies (Acceptance of Deposits) Rules, 2014.
8. CORPORATE GOVERNANCE
The Corporate Governance Report pursuant to the SEBI (LODR)
Regulations, 2015 is not applicable for the year under review.
9. ANNUAL RETURN
The copy of annual return is prepared in form MGT-7 as per the
provisions of the companies Act, 2013 and will be placed on the Company website at
www.aartechsolonics.com.
10. SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES
The Company has two subsidiary companies namely AIC-Aartech Solonics
Private Limited and Faradigm Ultracapacitors Private Limited.
11. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of section 203 of the Companies Act, 2013
and the rules made their under, following are the Board of Directors and Key Managerial
Personnel of the Company as on March 31, 2023:
S. Name of No. Directors/ KMPs |
Current Designation |
Original date of appointment |
Nature of changes |
Date of Cessation |
DIN/PAN |
1 Mr. Amit Anil Raje |
Chairman & Managing Director |
01.04.2007 |
- |
- |
00282385 |
2 Mrs. Arati Nath |
Woman Director & CEO |
12.05.2020 |
- |
- |
08741034 |
3 Mr. Anil Anant Raje |
Non-executive director |
24.08.1982 |
|
- |
01658167 |
4 Mr. Prashant Dattatray Lowlekar |
Independent Director |
27.02.2018 |
|
|
08041377 |
5 Mr. Kshitij Negi |
Independent Director |
08.02.2021 |
|
- |
09046425 |
6 Ms. Supriya Sunil Chitre |
Independent Director |
23.03.2023 |
Appointed as Independent Director |
|
09237218 |
7 Mr. Pradeep Vasant Narkhede |
Chief Financial Officer |
12.05.2020 |
|
|
ADIPN4506H |
8 Mr. K R T anuj Reddy |
Company Secretary & Compliance Officer |
08.06.2018 |
|
|
APIPT5347Q |
(a) Directors seeking appointment/ re-appointment
In terms of the provisions of the Companies Act, 2013, Mr. Anil Anant
Raje (01658167), Non-executive Director of the Company will retire by rotation and being
eligible, offer himself for re-appointment at the ensuing Annual General Meeting.
The Board recommends his re-appointment for the consideration of the
members of the Company at the ensuing Annual General Meeting.
In case of appointment/re-appointment of Directors, the details of
respective Directors as stipulated under Regulation 36(3) of the Listing Regulations are
included in the Notice of Annual General Meeting.
(b) Woman Director
Mrs. Arati Nath (DIN: 08741034) was appointed as Woman Director &
CEO and Ms. Supriya Sunil Chitre (DIN: 09237218) was appointed as a Woman Independent
Director on the Board as required under the provisions of the Companies Act, 2013 and the
SEBI (LODR) Regulations, 2015.
(c) Independent Directors and their Declaration
The Company is having 3 (Three) Independent Directors which are in
accordance with the requirement of the SEBI (LODR) Regulations, 2015 as well as under the
Companies Act, 2013.The terms and conditions of appointment of the Independent Directors
are placed on the website of the Company.
All the Independent Directors have confirmed that they meet the
criteria as mentioned under Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015 read
with Section 149(6) of the Companies Act, 2013. As per the SEBI (LODR) Regulations 25 (8)
states that every Independent Director, at the first meeting of the Board in which he
participates as a Director and thereafter at the first meeting of the Board in every
financial year, or whenever there is any change in the circumstances which may affect his
status as an independent director, submit a declaration that he meets the criteria of
independence as provided in clause of sub-regulation (1) of regulation 16 and that he is
not aware of any circumstance or situation, which exist or may be reasonably anticipated,
that could impair or impact his ability to discharge his duties with an objective
independent judgment and without any external influence and the board of directors of the
company shall take on record the declaration and confirmation submitted by the independent
director under sub-regulation (8) after undertaking due assessment of the veracity of the
same.
In the opinion of the Board, the Independent Directors possess the
requisite expertise and experience (including the proficiency of the independent director
as ascertained from the online proficiency self- assessment test conducted by the Indian
Institute of Corporate Affairs notified under sub-section (1) of section 150 of the
Companies Act, 2013 and are the persons of high integrity and repute. They fulfill the
conditions specified in the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 and the
Rules made thereunder and are independent of the management.
The Independent Directors have registered their names in the data bank
maintained with the Indian Institute of Corporate Affairs. As per the proviso to Rule 6(4)
of the Companies (Appointment and Qualification of Directors) Rules, 2014, all the
Independent Directors of the Company have passed or are exempted from undertaking the
online proficiency self-assessment test. These confirmations have been placed before the
Board. None of the Independent Directors hold office as an Independent Director in more
than seven listed companies as stipulated under Regulation 17A of the Listing Regulations.
The maximum tenure of Independent Directors is determined in accordance with the Act and
rules made thereunder, in this regard, from time to time.
(d) Programme for familiarization of Directors
The Company conducts familiarization programme for all the directors at
the time of their appointment and also at regular intervals to enlighten the directors
regarding their roles, rights and responsibilities in the Company and the nature of the
industry in which the Company operates, the business model of the Company etc. The details
regarding the familiarization programme conducted during the year are put up on the
website of the company.
12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY UNDER
SECTION 186
The Company has not granted any loan, guarantee, or made any
investments during the year ended 31st March 2023 under Section 186 of the Companies Act,
2013 and rule made there under. Pursuant to Section 186 (4) read with rule 11 of the
Companies (Meetings of Board and its Powers) Rules, 2014 and Schedule V of the Securities
and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 ("Listing Regulations"), disclosure on particulars relating to Loans,
advances and investments are provided as part of the financial statements.
13. CONSTITUTION OF THE BOARD OF DIRECTORS AND THEIR MEETINGS
a) Constitution of the Board
The composition of the Board is in conformity with Regulation 17 of the
SEBI (LODR) Regulations, 2015 and Section 149 of the Companies Act, 2013. The Company's
policy is to maintain optimum combination of Executive and Non-Executive Directors. As on
March 31, 2023, the Company has 6 (Six) Directors. Out of the 6 (Six) Directors, 2 (Two)
are Executive Directors; 1 (One) Non-executive Director and 3 (Three) are Non-Executive,
Independent Directors.
Mr. Amit Anil Raje, Chairman & Managing Director and Mr. Anil Anant
Raje, Non-executive Director of the Company, are the Promoters of the Company and Mrs.
Arati Nath, Director & CEO comes into the category of Promoter Group of the Company.
The Members of the Board are highly qualified and having varied experience in their
respective field and they assist the Board to discharge their functions from time to time.
b) Meetings of the Board
The Company prepares the schedule of the Board Meeting in advance to
assist the Directors in scheduling their programme. The agenda of the meeting is
circulated to the members of the Board well in advance along with necessary papers,
reports, recommendations and supporting documents so that each Board member can actively
participate on agenda items during the meeting.
The Board met 7 (seven) times during the Financial Year 2022-23. The
maximum interval between any two meetings did not exceed 120 days. The details of Board
meetings held during the financial year 2022-23 are as follows:
S. No. Date of Board Meeting |
Board Strength |
No. of Directors Present |
1. 12.05.2022 |
5 |
5 |
2. 29.06.2022 |
5 |
5 |
3. 16.08.2022 |
5 |
4 |
4. 13.10.2022 |
5 |
4 |
5. 12.11.2022 |
5 |
4 |
6. 11.01.2023 |
5 |
3 |
7. 23.03.2023 |
5 |
5 |
Attendance of Directors at the Board Meetings and at the last Annual
General Meeting (AGM)
Name of the Directors |
Number of board meetings
during the year 2022-23 |
Whether attended last AGM |
|
Held |
Attended |
|
Mr. Amit Anil Raje |
7 |
7 |
Yes |
Mrs. Arati Nath |
7 |
7 |
Yes |
Mr. Anil Anant Raje |
7 |
6 |
Yes |
Mr. Prashant Dattatray Lowlekar |
7 |
6 |
Yes |
Mr. Kshitij Negi |
7 |
4 |
Yes |
Ms. Supriya Sunil Chitre |
0 |
0 |
NA |
c) Information available for the members of the Board
The Board has complete access to any information within the Company.
The Company has provided inter alia following information.
- Financial results of the Company, its Subsidiaries;
- Minutes of meetings of the Board, Committees, resolutions passed by
circulations and minutes of the meetings of the Board of Subsidiary Companies;
- Periodic compliance/reports which includes non-compliance, if any;
- Disclosures received from Directors;
- Related party transactions;
- Regular business updates;
- Action Taken Report on decisions of previous Board Meetings;
- Various Policies of the Board;
- Code of Conduct for the members of the Board;
- Discussion with the Auditors and the audit committee members.
18. COMMITTEES OF THE BOARD
The Board of Directors has constituted various mandatory and
non-mandatory committees to deal with specific areas and activities. The Committees are
formed with approval of the Board and function under their respective Charters.
These Committees play an important role in the overall management of
day-to-day affairs and governance of the Company. The Board Committees meet at regular
intervals and take necessary steps to perform its duties entrusted by the Board. The
Minutes of the Committee Meetings are placed before the Board for noting. The Board
currently has the following Committees:
a) Audit Committee
The Audit Committee was constituted by our Board in accordance with
Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (LODR) Regulations,
2015. Its purpose is to assist the Board in fulfilling its oversight responsibilities of
monitoring financial reporting processes, reviewing the Company's established systems and
processes for internal financial controls, governance and reviewing the Company's
statutory and internal audit activities.
As on March 31, 2023, the Audit Committee is headed by Mr. Prashant
Dattatray Lowlekar and has Mr. Kshitij Negi and Mr. Amit Anil Raje as its members. All the
members of the Committee have relevant experience in financial matters.
The Board assures that the members of the Committee are financially
literate. In addition to the Audit Committee members, Statutory Auditors, the Chief
Financial Officer, Head - Internal Auditors, are also invited to the Audit Committee
Meetings, on need basis. The Company Secretary of the Company is the Secretary of the
Committee.
The Audit Committee member meets at least four times a year with
maximum interval of four months between two meetings and reports to the Board if required.
During the year 2022-23, seven meeting of the Audit Committee were held i.e., 12.05.2022,
29.06.2022, 16.08.2022, 13.10.2022, 12.11.2022, 11.01.2023 and 23.03.2023.
The Composition of the Audit Committee and the details of the meetings
attended by its members held during the financial year 2022-23 are stated below:
Sr. No. Name of the Director(s) |
Category |
Position held |
No. of Meeting |
|
|
|
Held |
Attended |
1. Mr. Prashant Dattatray Lowlekar |
Non-Executive & Independent Director |
Chairperson |
7 |
6 |
2. Mr. Kshitij Negi |
Non-Executive & Independent Director |
Member |
7 |
5 |
3. Mr. Amit Anil Raje |
Executive Director |
Member |
7 |
7 |
The terms of reference of Audit Committee Inter-alia, includes the
following:
- Overseeing of the Company's financial reporting process and the
disclosure of its financial information to ensure that the financial statement is correct,
sufficient, and credible.
- Recommending to the Board, the appointment, remuneration and terms of
appointment of the Statutory Auditor of the Company.
- Approving payments to Statutory Auditors for any other services
rendered by them.
- Reviewing, with the management, the Annual Financial Statements and
Auditor's Report thereon before submission to the Board for approval, with particular
reference to:
Matters required to be included in the Director's Responsibility
Statement to be included in the Board's Report in terms of Section 134 (3)(c) of the
Companies Act, 2013;
Changes, if any, in accounting policies and practices and
reasons for the same;
Major accounting entries involving estimates based on the
exercise of judgment by management;
Significant adjustments made in the financial statements arising
out of audit findings;
Compliance with listing and other legal requirements relating to
financial statements;
Disclosure of any related party transactions;
Modified opinion(s) in the draft Audit Report.
- Reviewing, with the management, the quarterly, half-yearly and Annual
Financial Statements before submission to the Board for approval;
- Reviewing, with the management, the statement of uses / application
of funds raised through an issue (preferential issue, rights issue etc.), the statement of
funds utilized for purposes other than those stated in the offer document/
prospectus/notice and the report submitted by the monitoring agency monitoring the
utilization of proceeds of a public or rights issue, and making appropriate
recommendations to the Board to take up steps in this matter. This also includes
monitoring the use or application of the funds raised through the proposed initial public
offering by our Company;
- Reviewing and monitoring the auditor's independence and performance,
and effectiveness of audit process;
- Approving of any subsequent modification of transactions of the
Company with related parties;
- Scrutinizing inter-corporate loans and investments;
- Valuing undertakings or assets of the Company, wherever it is
necessary;
- Evaluating internal financial controls and risk management systems;
- Reviewing, with the management, the performance of statutory and
internal auditors, and adequacy of the internal control systems;
- Reviewing the adequacy of internal audit function, if any, including
the structure of the internal audit department, staffing and seniority of the official
heading the department, reporting structure coverage and frequency of internal audit;
- Discussing with internal auditors any significant findings and follow
up thereon;
- Reviewing the findings of any internal investigations by the internal
auditors into matters where there is suspected fraud or irregularity or a failure of
internal control systems of a material nature and reporting the matter to the Board;
- Discussing with statutory auditors, internal auditors, secretarial
auditors, and cost auditors before the audit commences, about the nature and scope of
audit as well as post-audit discussion to ascertain any area of concern;
- To investigate the reasons for substantial defaults in the payment to
the depositors, debenture holders, shareholders (in case of non-payment of declared
dividends) and creditors;
- To review the functioning of the whistle blower mechanism;
- Establishing a vigil mechanism policy for directors and employees to
report their genuine concerns and grievances;
- Approval of appointment of the CFO (i.e., any person heading the
finance function or discharging that function) after assessing the qualifications,
experience, and background, etc. of the candidate;
- Review and monitor the process for compliance with laws, regulations
and the code of conduct as per SEBI Insider Trading Regulations, 2015, and all other
applicable Laws, rules and regulations, if any;
- Review all the provisions as per the Companies Act, 2013 and
Securities and Exchange Board of India (LODR) Regulations, 2015 as amended from time to
time; and
- Carrying out any other function as mentioned in the terms of
reference of the Audit Committee.
The Audit Committee also mandatorily review the following information:
i. Management discussion and analysis of financial condition and result
of operations;
ii. Statement of significant related party transactions (as defined by
the Audit Committee), submitted by management;
iii. Management letters/ letters of internal control weaknesses issued
by the Statutory Auditor;
iv. Internal audit reports relating to internal control weaknesses;
v. Statement of deviations:
- Quarterly statement of deviation(s) including report of monitoring
agency, if applicable, submitted to stock exchange(s) in terms of the Securities and
Exchange Board of India (LODR) Regulations, 2015; and
- Annual statement of funds utilized for purposes other than those
stated in the offer document / prospectus / notice in terms of the Securities and Exchange
Board of India (LODR) Regulations, 2015.
The Board considered and approved the same and instructed to forward
the matter to the audit committee for its noting and record.
The powers of the Audit Committee include the following:
a. To investigate any activity within its terms of reference;
b. To seek information from any employee;
c. To obtain outside legal or other professional advice; and
d. To secure attendance of outsiders with relevant expertise, if it
considers necessary.
Details of establishment of vigil mechanism for directors and employees
The Company has formulated the Vigil Mechanism and Whistle Blower
Policy. The policy aims for conducting the affairs in a fair and transparent manner by
adopting highest standards of professionalism, honesty, integrity, and ethical behavior.
All permanent employees of the Company are covered under the Vigil Mechanism Policy.
A mechanism has been established for employees to report concerns about
unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics.
It also provides for adequate safeguards against the victimization of employees who avail
the mechanism and allows direct access to the Chairperson of the Audit Committee in
exceptional cases. Further, during the financial year 2022-23, no whistle blower complaint
has been received against any Promoter, Directors and employees of the Company. The Policy
is available on the website of the Company.
b) Stakeholder's Relationship Committee
Stakeholder's Relationship Committee has been constituted by the Board
in accordance with Section 178 of the Companies Act, 2013. The Committee specifically
looks into the redressal of shareholders and investors complaints such as transfer of
shares, non-receipt of Balance Sheet, non-receipt of declared dividends, payment of
unclaimed dividends etc.
In addition, the Committee also investigated matters that can
facilitate better investor services and relations. The Board was kept apprised of all the
major developments on investors' issues through various reports and statements furnished
to the Board from time to time throughout the year. As on March 31, 2023, the Company's
Stakeholders Relationship Committee was headed by Mr. Kshitij Negi and other members of
the Committee are -Mr. Anil Anant Raje and Mr. Amit Anil Raje.
In order to act in compliance with Regulation 13(3) of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 the Stakeholders Relationship
Committee reports to the Board as and when need arise, with respect to the status of
redressal of complaints received from the shareholders of the Company. During the year
2022-23, five meeting of the committee were held on 12.05.2022, 16.08.2022, 13.10.2022,
11.01.2023 and 23.03.2023. The requisite quorum was present in the meeting.
The Composition of the Stakeholders Relationship Committee and the
details of the meetings attended by its members held during the financial year 2022-23 is
stated below:
Sr. No. Name of the Director(s) |
Category |
Position held |
No. of Meeting |
|
|
|
Held |
Attended |
1. Mr. Kshitij Negi |
Non-Executive & Independent Director |
Chairperson |
5 |
4 |
2. Mr. Anil Anant Raje |
Non-Executive Director |
Member |
5 |
4 |
3. Mr. Amit Anil Raje |
Executive Director |
Member |
5 |
5 |
The terms of reference of the Stakeholder's Relationship Committee of
the Company includes the following:
i. Consider and resolve grievances of the security holders of the
Company, including complaints related to the transfer of shares, non-receipt of Annual
Report and non-receipt of declared dividends; and
ii. Carrying out any other function as prescribed under the SEBI (LODR)
Regulations, 2015.
c) Nomination and Remuneration Committee
The Nomination and Remuneration Committee has been constituted by the
Board in accordance with section 178 of Companies Act, 2013 and Regulation 19 of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015. This policy is
applicable to all Directors, Key Managerial Personnel (KMP), Senior Management team and
other employees of Aartech Solonics Limited ("Company"). During the year
2022-23, seven meeting of the committee were held on 12.05.2022, 29.06.2022, 16.08.2022,
13.10.2022, 12.11.2022, 11.01.2023 and 23.03.2023. The requisite quorum was present in the
meeting.
The Composition of the Nomination and Remuneration Committee and the
details of the meetings attended by its members held during the financial year 2022-23 is
stated below:
Sr. No. Name of the Director(s) |
Category |
Position held |
No. of Meeting |
|
|
|
Held |
Attended |
1. Mr. Kshitij Negi |
Non-Executive & Independent Director |
Chairperson |
7 |
5 |
2. Mr. Prashant Dattatray Lowlekar |
Non-Executive & Independent Director |
Member |
7 |
6 |
3. Mr. Anil Anant Raje |
Non-Executive Director |
Member |
7 |
7 |
The Nomination and Remuneration policy was adopted by the Board on the
recommendation of
Nomination & Remuneration Committee. The Policy is available on the
website of the Company.
Brief description of terms of reference:
- Formulation of the criteria for determining qualifications, positive
attributes and independence of a director and recommend to the Board a policy relating to,
the remuneration of the Directors, Key Managerial Personnel, and other employees;
- Formulation of criteria for evaluation of performance of independent
Directors and the Board;
- Devising a policy on Board diversity;
- Identifying persons who are qualified to become Directors and who may
be appointed in Senior Management in accordance with the criteria laid down and recommend
to the Board their appointment and removal and evaluation of Director's performance;
- Determining whether to extend or continue the term of appointment of
the Independent Director, on the basis of report of performance evaluation of independent
directors;
- Carrying out any other function as prescribed under the SEBI Listing
Regulations;
- recommend to the board, all remuneration, in whatever form, payable
to senior management; and
- Performing such other activities as may be delegated by the Board of
Directors and/or are statutorily prescribed under any law to be attended by the Nomination
and Remuneration Committee.
19. MECHANISM FOR EVALUATION OF BOARD, COMMITTEES, CHAIRPERSON AND
INDIVIDUAL DIRECTORS
The Nomination and Remuneration Committee and the Board have laid down
the manner in which formal annual evaluation of the performance of the Board, Committees,
Individual Directors, CEO & MD and the Chairman has to be made. Pursuant to the
provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015, a structured
questionnaire was prepared after taking into consideration the various aspects of the
Board's functioning, composition of the Board and its Committees, culture, execution and
performance of specific duties, obligations and governance. All Directors responded
through a structured questionnaire giving feedback about the performance of the Board, its
Committees, Individual Directors, CEO & MD and the Chairman.
As per Section 134(3) read with Rule 8(4) of the Companies (Accounts)
Rules, 2014, the evaluation is done by the Independent Directors of the Board for the
performance of the executive directors with specific focus on the performance and
effective functioning of the Board and Individual Directors, areas of improvement for the
Directors and for the aforesaid purpose, Independent Directors of the Company have
conducted their separate meeting on December 05, 2022. The Board of Directors expressed
their satisfaction with the evaluation process.
Criteria for evaluation of Board as a whole
i. Board Composition & Quality;
ii. Board Meetings;
iii. Committees;
iv. Core Governance & Compliance; and
v. Risk Management.
Criteria for evaluation of Committees
i. Structure of committees;
ii. Appropriateness of delegation of responsibilities by the Board to
its committees;
iii. Composition of the committees;
iv. The meetings are conducted in a manner that ensures open
communication and meaningful participation;
v. The amount of information received is appropriate for discussion and
decision-making purposes;
vi. The reporting by each of the Committees to the Board is sufficient;
vii. Committees takes effective and proactive measures to perform its
functions; and
viii. The frequency of the Committee meetings is adequate.
Criteria for evaluation of Chairperson
i. Leadership; and
ii. Managing Relationships.
Criteria for evaluation of the Executive Directors
i. Strategy Formulation & Execution;
ii. Board Meetings;
iii. Interpersonal Skills;
iv. Leadership;
v. Diligence; and
vi. Knowledge & Expertise.
Criteria for evaluation of the Independent Directors
i. Knowledge & Expertise;
ii. Participation in Board Meetings;
iii. Interpersonal Skills;
iv. Professional Conduct & Independence;
v. Diligence;
vi. Roles & Responsibilities; and Disclosure & Reporting.
20. VIGIL MECHANISM (WHISTLE BLOWER POLICY)
In terms of the Section 177(9) of Companies Act, 2013 and rules framed
there under, your Company has established a 'Whistle Blower Policy and Vigil Mechanism'
for directors and employees it provides a channel to the employees to report to the
appropriate authorities concerns about unethical behavior, actual or suspected, fraud or
violation of the Company's code of conduct policy and provides safeguards against
victimization of employees who avail the mechanism and also provide for direct access to
the Chairman of the Audit Committee in exceptional cases. Protected disclosures can be
made by whistle blower through an e-mail, or dedicated telephone line or a letter to the
concerned authorities.
21. GOVERNANCE CODES
a) Code of Business Conduct & Ethics
The Company has adopted Code of Conduct for Board of Directors and
Senior Management ("the Code") which is applicable to the Board of Directors and
all Employees of the Company. The Board of Directors and the members of Senior Management
Team of the Company are required to affirm Compliance of this Code. The Company has
received the annual affirmation declaration from the Board of Directors and Senior
Management. The Code requires Directors and Employees to act honestly, fairly, ethically
and with integrity, conduct themselves in professional, courteous and respectful manner.
The Code is displayed on the Company's website.
b) Conflict of Interests
Each Director informs the Company on an annual basis about the Board
and the Committee positions they occupies in other Companies including Chairmanships and
notify changes during the year. The Members of the Board while discharging their duties,
avoid conflict of interest in the decision-making process. The Members of Board restrict
themselves from any discussions and voting in transactions in which they have concern or
interest.
c) Insider Trading Code
The Company has adopted a Code of conduct for prevention of Insider
Trading ("the Code") in accordance with the SEBI (Prohibition of Insider
Trading) Regulations, 2015, amended time to time (the PIT Regulations). This Code is
displayed on the Company's website.
The code shall be applicable to the insiders of the Company which
includes all insiders, designated persons and their immediate relatives, connected
persons, fiduciaries and intermediaries and shall come into effect from the date of
listing of equity shares of the Company on a Stock Exchange in India subsequent to an
initial public offering of the equity shares of the Company. The Chief Financial Officer
of the Company is the Compliance Officer for monitoring adherence to the said PIT
Regulations.
The Company has also formulated 'The Code of Practices and Procedures
for Fair Disclosure of Unpublished Price Sensitive Information (UPSI)' in compliance with
the PIT Regulations. This Code is displayed on the Company's website.
22. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Sec. 134 (5) of the Companies Act, 2013,
the Directors confirm that:
i. in the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to material departures;
ii. 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 the end of the
Financial Year and of the profit of the company for that period;
iii. the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of this Act
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 for the
Financial Year ended March 31, 2023 on a going concern basis;
v. that 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; and
vi. that 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.
23. PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES
REFERRED TO SECTION 188(1)
All transactions entered with Related Parties for the year under review
were entered on arm's length basis and in the ordinary course of business and that the
provisions of Section 188(1) of the Companies Act, 2013 and the Rules made there under
were not attracted. The particulars of contracts or arrangements with related parties
referred to in Section 188(1) is prepared in Form AOC-2 pursuant to Section 134(3)(h) of
the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 and the same is annexed to
the Board's Report as Annexure-A.
All Related Party Transactions are placed before the Audit Committee
and the Board for approval. The Company has a process in place to periodically review and
monitor Related Party Transactions. Omnibus approval was obtained on a yearly basis for
transactions which are of repetitive nature. All the related party transactions were in
the ordinary course of business and at arm's length.
24. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
Your Company has an effective internal control and risk mitigation
system, which are constantly assessed and strengthened with new/revised standard operating
procedures. The Company's internal control system is commensurate with its size, scale and
complexities of its operations.
The Audit Committee of the Board of Directors actively reviews the
adequacy and effectiveness of the internal control systems and suggests improvements to
strengthen the same. The Company has a robust Management Information System, which is an
integral part of the control mechanism.
25. RISK MANAGEMENT
For your Company, Risk Management is an integral and important
component of Corporate Governance. Your Company believes that a robust Risk Management
ensure adequate controls and monitoring mechanisms for a smooth and efficient running of
the business. A risk-aware organization is better equipped to maximize the shareholder
value. Your Company has a well-defined risk management framework in place. The risk
management framework works at various levels across the Company. These levels form the
strategic defense cover of the Company's risk management. The Company has a robust
organizational structure for managing and reporting on risks. The Company follows well
established and detailed risk assessment and minimization procedures, which are
periodically reviewed by the Board. The Company's Business Risk Management Framework helps
in identifying risks and opportunities that may have a bearing on the organization's
objectives, assessing the terms of likelihood and magnitude of impact and determining
response strategy.
26. CONSERVATION OF ENERGY, TECHNICAL ABSORPTION, FOREIGN EXCHANGE
EARNING AND OUTGO
The Conservation of Energy, Technology Absorption, Foreign Exchange
Earning and Outgo pursuant to provisions of Section 134(3)(m) of the Companies Act, 2013
read with Rule 8 of Companies (Account) Rules, 2014:
A. Conservation of Energy
While continuing to believe in philosophy of Energy saved is Energy
produced, adequate measures commensurate with the business operations have been taken to
reduce and conserve the energy consumption by utilizing energy efficient equipment
whenever required.
B. Technology Absorption
The Company is doing its business by ensuring optimum utilization of
its available resources. Your company has not taken any research & development
activity so far.
C. Foreign Exchange Earnings and Outgo
Foreign Exchange Earnings: Rs30.93 Lakhs.
Outgo: Rs2.67 Lakhs.
27. POLICIES:
SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, mandated the formulation of certain policies for all listed companies. In compliance
with the same, the Company has formulated the policies.
POLICY ON NOMINATION AND REMUNERATION POLICY
The policy of the Company on director's appointment and remuneration,
including criteria for determining qualification, positive attributes, independence of a
director and other matters provided under sub - section (3) of Section 178 of the
Companies Act, 2013 was framed on the recommendation of Nomination and Remuneration
Committee and approved by the Board.
The key objective of this policy is selection, appointment of and
remuneration to Key Managerial Personnel, Directors and Senior Management Personnel.
RELATED PARTY TRANSACTIONS AND POLICY
The Company has developed a related party transactions framework
through standard operating procedures for the purpose of identification and monitoring of
transactions with the related parties.
None of the Directors has any pecuniary relationship or transactions
vis-a-vis the Company.
CODE OF CONDUCT
In Compliance with Regulation 26(3) of the SEBI (Listing Obligation and
Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013, The Company has
laid down the Code of Conduct for all Board members and senior management of the Company.
All the Board members and senior management of the Company have
affirmed compliance with their Code of Conduct for the financial year ended March 31,
2023. The Managing Director has also confirmed and certified the same. The certification
is annexed at the end of this report.
VIGIL MECHANISM AND WHISTLE BLOWER POLICY
The Company has implemented a vigil mechanism policy (Whistle blower
policy), whereby the employees can raise their concerns on any violation of legal or
regulatory requirements, suspicious fraud, misfeasance, misrepresentation of any financial
statements and reports. The policy safeguards the whistle blower and also provides a
direct access to the Chairman of Audit Committee. During this year no complaints were
received under this mechanism nor has any personnel been denied access to the Audit
Committee.
28. CORPORATE SOCIAL RESPONSIBILITY
The provisions of Section 135 of the Companies Act, 2013 are not
applicable to the Company.
29. SIGNIFICANT AND MATERIAL OREDERS PASSED BY REGULATORS OR COURTS
There are no significant and material orders passed by the
Regulators/Courts that would impact the going concern status of the Company and its future
operations.
30. AFFIRMATION ON COMPLIANCE OF SECRETARIAL STANDARDS
The Company hereby affirms that during the year under review the
Company has complied with all the applicable mandatory secretarial standards (including
any modifications or amendments thereto) issued by the Institute of Company Secretaries of
India.
31. INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL
STATEMENTS
The Company has designed and implemented a process driven framework for
Internal Financial Controls ("IFC") within the meaning of the explanation to
Section 134(5)(e) of the Companies Act, 2013 read with Rule 8(5)(viii) of the Companies
(Accounts) Rules, 2014, the Board is of the opinion that the Company has sound Internal
Financial Control commensurate with the nature and size of its business operations and
operating effectively and no material weakness exists. The Company has a process in place
to continuously monitor the same and identify gaps, if any, and implement new and/or
improved controls wherever the effect of such gaps would have a material effect on the
Company's operations. This process includes the design, implementation and maintenance of
adequate Internal Financial Control that were operating effectively for ensuring the
orderly and efficient conduct of its business, including adherence to company's policies,
safeguarding of its assets, the prevention and detection of frauds and errors, accuracy
and completeness of the accounting records, and timely preparation of reliable financial
information, as required under the Act.
During the period under review, the Company has appointed independent
audit firm as Internal Auditors to observe the Internal Control system.
The Board of Directors of the Company have adopted various policies
like Related Party Transactions Policy, Vigil Mechanism Policy, Policy to determine
Material Subsidiaries and such other procedures for ensuring the orderly and efficient
conduct of its business for safeguarding of its assets, the prevention and detection of
frauds and errors, the accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information.
The Audit Committee of the Board of Directors actively reviews the
adequacy and effectiveness of the internal control system and suggests improvements to
strengthen the same. The Company has robust management information system, which is an
integral part of the control mechanism.
32. AUDIT REPORT AND AUDITORS Statutory Auditors & their Reports
M/s S. Ramanand Aiyar & Co., Chartered Accountants, Indore (ICAI
Firm Registration No. 000990N) were appointed as Statutory Auditor of the Company for a
term of three years (3) in the Annual General Meeting of the Company held on September 24,
2020.
M/s S. Ramanand Aiyar & Co., Chartered Accountants, Indore have
audited the books of accounts of the Company for the financial year ended March 31, 2023
and have issued the Auditor's Report there on. There are no qualifications or reservations
or adverse remarks or disclaimers in the said report. Further, no fraud has been reported
by the Auditors to the Audit Committee or the Board during the period under review.
The Auditor's Report, read together with the notes on financial
statements are self-explanatory and hence do not call for any further comments under
section 134 of the Act.
The term of M/s S. Ramanand Aiyar & Co., Indore will culminate at
the conclusion of the ensuing Annual General Meeting of the Company. Due to the expiration
of terms as mentioned above for Statutory provisions of the Companies Act, 2013 and other
applicable provisions, if any, and the Companies (Audit and Auditors) Rules, 2014
(including any statutory modification(s) or re-enactment thereof, for the time being in
force), the Audit Committee and Board has recommended the appointment of M/s BANCRS &
CO. LLP, Chartered Accountants, Bhopal (ICAI Firm Registration No. C400331), as the
Statutory Auditors of the Company, to hold an office for a term of Five (5) years from the
conclusion of this Annual General Meeting till the conclusion of 46th Annual
General Meeting of the Company to be held in the year 2028, at a remuneration of Rs2.50
Lakhs (Rupees Two Lakh Fifty Thousand Only) which includes Audit Fee, Consolidation of
Accounts, Limited Review Report plus applicable taxes and reimbursement of out-of-pocket
expenses at actuals.
Further M/s BANCRS & CO. LLP, Chartered Accountants, Bhopal (ICAI
Firm Registration No. C400331), have confirmed the compliance of the statutory
requirements under the Companies Act, 2013 and of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
Further pursuant to regulation 36(5) of SEBI (LODR) Regulations, 2015,
the details and credentials of the statutory auditor are as under :
M/s BANCRS & CO. LLP is a firm of Chartered Accountants established
in the year 2022. The firm is engaged in providing services in Audit, Accounting, Taxation
and Advisory services. The firm is an empanelled Auditors having 5 Partners and 15 plus
staff.
The firm has been awarded the Peer Review Certificate issued by the
Institute of Chartered Accountants of India pursuant to the Statement on Peer Review. The
firm has large team of professionals including Chartered Accountants, CWA's, DISA, CS,
amongst others.
M/s BANCRS & CO. LLP, Chartered Accountants, Bhopal (ICAI Firm
Registration No. C400331), has fulfilled and complied all the conditions as specified in
the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 and has submitted their eligibility certificate to the Company and also
meets the criteria as specified in section 141 of the Companies Act, 2013 and resolution
seeking member's approval for appointment of Statutory Auditor forms part of the Notice
convening the Annual General Meeting.
Secretarial Auditors
Secretarial Audit Report for the Financial Year 2022-23 issued by M/s
APVN & Associates, Practicing Company Secretaries, Bhopal in Form MR-3 which is
annexed to the Board's Report as Annexure-C which is self-explanatory and do not
call for any further explanation of the Board.
Internal Auditors
As per the provisions of Section 138 of the Companies Act,2013, the
Board of Directors had appointed M/s Prem Chand Jain & Co., Chartered Accountants,
Bhopal (ICAI Firm Registration No. 000066C), as an Internal Auditor to conduct internal
audit of the Company for the Financial Year 2022-23.
33. DISCLOSURE WITH RESPECT TO MAINTENANCE OF COST RECORDS
Your Company doesn't fall within the scope of Section 148(1) of the
Companies Act, 2013 and hence does not require to maintain cost records as specified by
the Central Government.
34. MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL
POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE
COMPANY TO WHICH THE FINANCIAL STATEMENT RELATED AND THE DATE OF REPORT
During the year under review and as on the date of report, there is no
material change and commitments made which affect the financial position of the Company.
35. PARTICULARS OF EMPLOYEES
Disclosures under section 197(12) of the Companies Act, 2013 read with
Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 respectively, is annexed to the Board's report as Annexure-D
36. MANAGEMENT DISCUSSION AND ANALYSIS
In terms of the provisions of Regulation 34(2)(e) of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 the Management Discussion and
Analysis Report on the financial condition and result of operations of the Company for the
year under review is presented in a separate section forming part of the Annual Report.
37. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company is committed to provide a work environment that ensures
everyone is treated with dignity and respect. The Company is also committed to promote
equality at work and an environment that is conducive to the professional growth for all
employees and encourages equal opportunity. Your Company does not tolerate any form of
sexual harassment and is committed to take all necessary steps to ensure that its
employees are not subjected to any form of harassment including sexual harassment. The
Company has zero tolerance for sexual harassment at workplace and has adopted a policy on
prevention, prohibition, and redressal of sexual harassment at workplace in line with the
provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 and the rules framed thereunder. All employees (permanent,
contractual, temporary, trainees) are covered under this policy. During the Financial Year
ended March 31, 2023, the Company has not received any Complaints pertaining to Sexual
Harassment.
38. GENERAL DISCLOSURES
During the year under review, the Company has not entered into any
transactions which covered under the following provisions and no disclosure or reporting
is required :
a) Details relating to deposits covered under Chapter V of the Act and
rules made there under.
b) As per rule 4(4) of the Companies (Share Capital and Debentures)
Rules, 2014, the Company has not issued equity shares with differential rights as to
dividend, voting or otherwise.
c) As per rule 8(13) of the Companies (Share Capital and Debentures)
Rules, 2014, the Company has not issued shares (including sweat equity shares) to
employees of the Company under any scheme.
d) As per rule 12(9) of the Companies (Share Capital and Debentures)
Rules, 2014, the Company has not issued equity shares under the scheme of employee stock
option.
e) As per rule 16(4) of the Companies (Share Capital and Debentures)
Rules, 2014, there are no voting rights exercised directly or indirectly by the employees
in respect of shares held by them. The Company does not have any scheme of provision of
money for the purchase of its own shares by employees or by trustees for the benefit of
employees.
f) Neither the Managing Director nor the Whole-time Directors of the
Company receive any remuneration or commission from any of its subsidiaries.
g) No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the Company's going concern status and operations in
future.
h) No fraud has been reported by the Auditors to the Audit Committee or
the Board.
i) There is no amount of unpaid/unclaimed dividend and shares which are
required to be transferred in IEPF (Investor Education and Protection Fund) as per the
provisions of the Companies Act, 2013.
j) There is no Corporate Insolvency Resolution Process initiated by and
against the Company under the Insolvency and Bankruptcy Code, 2016 (IBC).
k) There is no one time settlement of loans taken from banks and
financial Institution.
39. REPORTING OF FRAUDS
During the year under review, neither the Statutory Auditors nor the
Secretarial Auditor has reported to the Audit Committee under Section 143(12) of the
Companies Act, 2013, any instances of fraud committed against the Company by its officers
or employees, the details of which would need to be mentioned in boards report.
40. ENHANCING SHAREHOLDERS VALUE
Your Company believes that its members are among its most important
stakeholders. Accordingly, your Company's operations are committed to the pursuit of
achieving high levels of operating performance and cost competitiveness, consolidating,
and building for growth, enhancing the productive asset and resource base, and nurturing
overall corporate reputation.
41. CAUTIONARY STATEMENT
Statements in this Board's Report and Management Discussion and
Analysis describing the Company's objectives, projections, estimates, expectations or
predictions may be "forward-looking statements" within the meaning of applicable
securities laws and regulations. Actual results could differ materially from those
expressed or implied. Important factors that could make difference to the Company's
operations include raw material availability and its prices, cyclical demand and pricing
in the Company's principle markets, changes in Government regulations, tax regimes,
economic developments in the Country and other ancillary factors.
42. APPRECIATIONS AND ACKNOWLEDGMENTS
Your Company's organizational culture upholds professionalism,
integrity and continuous improvement across all functions, as well as efficient
utilization of the Company's resources for sustainable and profitable growth. Your
directors acknowledge with gratitude and wishes to place on record its appreciation for
the dedication and commitment of your Company's employees at all levels which has
continued to be our major strength. Your directors also thank the shareholders, investors,
customers, visitors to our websites, business partners, bankers and other stakeholders for
their confidence in the Company and its management and look forward for their continuous
support.
|
For and on behalf of the
Board |
|
Aartech Solonics Limited |
|
Sd/- |
Sd/- |
|
Amit Anil Raje |
Arati Nath |
Place: Bhopal |
Managing Director |
Director |
Dated: 06/09/2023 |
(DIN:00282385) |
(DIN:08741034) |
|