To,
The Shareholders,
Your Directors have pleasure in presenting the Thirty Third Annual Report together with
Audited Accounts for the year-ended 31st March, 2023.
FINANCIAL RESULTS:
( Rs in lakh )
| Particular |
31st March, 2023 |
31st March, 2022 |
| Income |
42168.56 |
49542.75 |
| Expenditure |
41567.59 |
48539.05 |
| (Loss )/ Profit Before Exceptional Item & Tax |
600.96 |
1003.71 |
| Profit Before Tax |
600.96 |
1003.71 |
| (Less)/ Add: Tax Expenses |
(223.86) |
(348.23) |
| Balance Carried To Balance Sheet |
377.11 |
655.48 |
REVIEW OF OPERATIONS & FUTURE OULLOOK
Our company is manufacturing the following intermediates- Mono Methyl Urea, Die Methyl
Urea. Ortho Para Nitro Anisole, 2 Bromomethyl 1,3 Dioxalane & Uracile & in Active
Pharma Ingredients the company is involved in manufacturing Metformin HCL, Mefenamic Acid
& Doxophylline. Besides we intend to increase capacity of all the products based upon
the demand of the product and also plans to do backward & forward integration of
products such as DMA-HCL, Ortho chloro benzoic acid and further APIs like theophylline.
Necessary steps has been initiated.
DIVIDEND
Your directors do not recommend any dividend for the year ended 31st March,
2023.
DEPOSITS
The Company has not accepted the deposits from the public as per the Section in
accordance with the provisions of Section 73 and 76, and other applicable provisions of
Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
TRANSFER TO RESERVE:
Your Company has not transferred any amount to the General Reserves during the year
under review.
CHANGES IN SHARE CAPITAL, IF ANY:
During the financial year, Company has increased the Authorized Share Capital of the
Company from existing is Rs. 25,00,00,000/- (Rupees Twenty five crores only) divided into
2,50,00,000 (Two crores Fifty Lakh) Equity Shares of Rs. 10/- (Rupees Ten only) each, to
Rs 25,50,00,000/-(Rupees Twenty five crores Fifty Lakh only) divided into 3,50,00,000
(Three crores Fifty Lakh) Equity Shares of Rs.10/- (Rupees Ten only)
SUBSIDIARY / HOLDING COMPANY, ETC.:
The Company does not have any Subsidiary, Holding Company, Associate or Group Venture
Company.
VIGIL MECHANISM
Pursuant to the requirements laid down under Section 177 of the Companies Act, 2013 and
Regulation 22 of the SEBI Listing Regulations, the Company has well laid down Vigil
Mechanism. The details of the same are provided in the Report on Corporate Governance
forming part of this Annual Report. During the year, the Company did not receive any
complaint under Vigil mechanism.
CORPORATE SOCIAL RESPONSIBILITY
In accordance with the provisions of Section 135 of the Companies Act, 2013 read with
Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to
time, the Board of Directors of the Company has constituted Corporate Social
Responsibility (CSR) Committee Corporate Social Responsibility (CSR) is a good way of
conducting business by which corporate entities visibly contribute to the society. The
essence of CSR is to integrate the economic, environment and social objectives of the
companys operations and growth. CSR is the process by which the organization thinks about
and evolves its relationship with the society and demonstrates its commitment by giving
back to the society for the resources it used.
The Composition, particulars of Meeting held and attendance thereat are mentioned in
the Corporate Governance Report forming part of the Annual Report.
The key philosophy of all CSR initiatives of the Company is guided by three core
commitments of Scale, Impact and Sustainability.
During the year, the Company has spent Rs. 16,35,315/- on CSR activities. The Company
has identified focus areas of engagement which have been enumerated in the Annual Report
on CSR Activities attached as Annexure-A.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
As on 31stMarch 2023, the Board consists of six members, two of whom are
Executive Directors and 3 are Independent Directors and one is Non-Executive Directors.
Pursuant to the provisions of Section 203 of the Act, Mihir R Ghatalia Managing Director,
Mrs. Mira Ghatalia, Chief Financial Officer and Mrs. Preeti Rathi, Company Secretary are
the Key Managerial Personnel of the Company as on the date of this Report.
INTER-SE RELATIONSHIP BETWEEN DIRECTORS:
Mihir R Ghatalia Managing Director and Nimit R Ghatalia Director are relatives
(siblings). Apart from this none of the Directors of the Company are in any way related to
each other.
DIRECTORS RESPONSIBILTY STATEMENT
As referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act,
2013, the Directors hereby confirm:
a) that in preparation of the Annual Accounts for the year ended 31st March,
2023, the applicable accounting standards had been followed along with proper explanation
relating to material departures , if any;
b) that the directors had selected such accounting policies and applied them
consistently and made judgments and estimates that were reasonable and prudent so as to
give true and fair view of the state of affairs of the company at the end of financial
year ended 31st March, 2023 and the profit/(Loss) of the Company for the year
under review;
c) that proper and sufficient care has been taken for maintenance of adequate
accounting records in accordance with the provisions of the Companies Act ,2013 for
safeguarding the assets of the company and for preventing and detecting fraud and other
irregularities;
d) that the annual accounts for the year ended 31st March, 2023 have been
prepared on a "going concern basis"
e) 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.
f) they devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively.
ANNUAL RETURN
Annual Return as provided under Section 92(3) and Section 134(3)(a) of the Companies
Act, 2013, is available on the website of the Company at
http://www.aareydrugs.com/pdf/annual-return/MGT-7.pdf
AUDITORS
M/s. Motilal & Associates, Chartered Accountants (Firm Registration No:
106584W)were appointed as Statutory Auditors of the Company at the 30thAnnual
General Meeting held on 28th December, 2020 for a term of five consecutive
years from the conclusion of that Annual General Meeting to until the conclusion of 35thAnnual
General Meeting of the Company.
SECRETARIAL AUDIT REPORT
The Secretarial Audit Report pursuant to the provisions of Section 204 for the
financial year 2022-23 was obtained from M/s. Virendra Bhatt& Associates, Practicing
Company Secretaries, which is annexed hereto as Annexure B.
The Board has re-appointed M/s. Virendra Bhatt& Associates, Practicing Company
Secretaries as the Secretarial Auditors of the Company for the financial year 2023-24.
MEETINGS
During the financial year 2022-23, 09 (nine) meetings of the Board of Directors and 09
(nine) meetings of the Audit Committee were held. Details of these meetings and other
Committees of the Board/General Meeting are given in the Report on Corporate Governance
forming part of this Annual Report.
DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTOR
All the Independent Directors of the Company have furnished a declaration to the effect
that they meet the criteria of independence as provided in Section 149(6) of the Act and
Regulation 16(1)(b) and Regulation 25 of Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 (‘the Listing
Regulations). In the opinion of the Board, all the Independent Directors possess the
integrity, expertise and experience including the proficiency required to be Independent
Directors of the Company, fulfill the conditions of independence as specified in the Act
and the Listing Regulations and are independent of the management and have also complied
with the Code for Independent Directors as prescribed in Schedule IV of the Companies Act,
2013
PERFORMANCE EVALUATION AND ITS CRITERIA:
The Board of Directors carried out an evaluation of its own performance, of the Board,
Committees and of the individual Directors pursuant to the provisions of the Act and
Corporate Governance requirements as prescribed by the Listing Regulations.
The performance of the Board and its Committees was evaluated by the Board after
seeking inputs from the Board / Committee Members based on criteria such as composition of
the Board / Committees and structure, effectiveness of the Board / Committee processes,
providing of information and functioning etc. The Board and the Nomination and
Remuneration Committee reviewed the performance of individual Directors based on criteria
such as attendance in Board / Committee meetings, contribution in the meetings like
preparedness on issues to be discussed etc.
The Independent Directors at its separate meeting held on 24th February,
2023 reviewed the performance of Non-Independent Directors and performance of the Board as
a whole, performance of the Chairman of the Company taking into account the views of
Executive and Non-executive Directors and assessed the quality, quantity and timeliness of
flow of information to the Board to perform their duties effectively and reasonably.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:
The details of Loans given, Guarantees given and Investments made, if any and covered
under the provisions of Section 186 of the Act, read with Companies (Meetings of Board and
Its Powers) Rules, 2014 are given in the notes to the Financial Statements forming part of
this Annual Report.
COMMITTEES OF THE BOARD
The details of the powers, functions, composition and meetings of the Committees of the
Board held during the year are given in the Report on Corporate Governance section forming
part of this Annual Report.
AUDIT COMMITTEE
The details pertaining to the composition, terms of reference, etc. of the Audit
Committee of the Board of Directors of the Company and the meetings thereof held during
the financial year are given in the Report on Corporate Governance section forming part of
this Annual Report. The recommendations of the Audit Committee were accepted by the Board
of Directors of the Company from time to time.
CORPORATE GOVERNANCE
A separate report on Corporate Governance is produced as a part of the Annual Report
along with the Auditors statement on its compliance.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND
OUTGO:
Your Company has made the necessary disclosures in this Report in terms of Section
134(3) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules,
2014is given in Annexure C and forms part of this report.
INTERNAL FINANCIAL CONTROL SYSTEM
The Board is responsible for establishing and maintaining adequate internal financial
control as per Section 134 of the Act.
Your Company has in place an adequate system of internal controls to ensure compliance
with various policies, practices and statutes. It has procedures covering all financial
and operating functions and processes. These have been designed to provide a reasonable
assurance with regards to maintaining of proper accounting controls for ensuring
reliability of financial reporting, monitoring of operations, protecting assets from
unauthorized use or losses and compliance with regulations. Key controls have been tested
during the year and corrective and preventive actions are taken for any weakness.
CHANGE IN THE NATURE OF BUSINESS (IF ANY):
There is no material change in the type of business the Company is carrying.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS(IF ANY):
The Directors of your Company confirm that no frauds or instances of mis-management
were reported by the Statutory Auditors under sub-section (12) of Section 143 of the
Companies Act, 2013.
COMPLIANCE WITH SECRETARIAL STANDARDS:
The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating
to ‘Meetings of the Board of Directors and ‘General Meetings, respectively,
have been duly followed by the Company.
MATERIAL CHANGES AND COMMITMENT:
Except as disclosed elsewhere in the Report, there have been no material changes and
commitment affecting, the financial position of your Company, which have occurred between
the end of the financial year of the Company and the date of this Report.
SIGNIFICANT AND MATERIAL ORDERS:
No significant and material order has been passed by the Regulators or Courts or
Tribunals impacting the going concern status and Companys operations in future.
PARTICULARS OF RELATED PARTY TRANSACTIONS:
All transactions entered into with related parties during the financial year were in
the ordinary course of business and on arms length basis and do not attract the
provisions of Section 188(1) of the Act. Suitable disclosures as required by the Indian
Accounting Standards (IndAS-24) have been made in the notes to the Financial Statements.
The Board has a policy for related party transactions which has been uploaded on the
Companys website_ http://www.aareydrugs.com/pdf/2-Related-Party-Transaction.pdf
There were no material Related Party Transactions during the year. Accordingly, Form
No. AOC-2, prescribed under the provisions of Section 134 (3)(h) of the Act and Rule 8 of
the Companies (Accounts) Rules, 2014, for disclosure of details of Related Party
Transactions, which are not "not at arms length basis" and also which are
"material and arms length basis", is not provided as an annexure to this Report
as it is not applicable.
PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN:
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements
of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal)
Act, 2013.
Internal Complaints Committee (ICC) has been set up to redress complaints received
regarding sexual harassment. All employees (permanent, contractual, temporary and
trainees) are covered under this policy who are also provided training about the Act.
During the year under review, no complaint was received.
POLICIES AND DISCLOSURE REQUIREMENTS:
In terms of provisions of the Act and the Listing Regulations, the Company has adopted
all the applicable policies. The policies are available on the website of the Company at_
http://www.aareydrugs.com/financial.html
All Directors and Senior Management Personnel have affirmed their adherence to the
provisions of the Code of Conduct during the financial year 2022-23.
The Companys policy on Directors appointment, remuneration and other matters provided
in Section 178(3) of the Act forms part of Nomination and Remuneration Policy and has been
disclosed in the Corporate Governance Report.
CORPORATE GOVERNANCE & VIGIL MECHANISM:
A separate Corporate Governance Report on compliance with Corporate Governance
requirements as required under Regulation 34(3) read with Schedule V to the Listing
Regulations forms part of this Annual Report. The same has been reviewed and certified by
Mr. Virendra G. Bhatt, Practising Company Secretary, the Secretarial Auditors of the
Company and Compliance Certificate in respect thereof is attached as Certificate of
Corporate Governance.
RISK MANAGEMENT:
The Company has its Risk Management Plan & Policy in place which is also displayed
on the website of the Company. In the opinion of the Board, during the financial year
2022-23, no elements of risk which may threaten the existence of the Company were noticed
by the Board. The Committee monitors the risk management plan and ensures its
effectiveness. The details of Committee are set out in the Corporate Governance Report
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Managements Discussion and Analysis Report for the year under review, as stipulated
under the Listing Regulations, is presented in a separate section, forming part of this
Report.
PROMOTERS:
The Promoter Groups holding in the Company as on 31st March, 2023 was
50.04% of the Companys paid up Equity Capital. The members may note that the shareholding
and other details of Promoters has been provided in Annual Return.
DISCLOSURE REGARDING MAINTENANCE OF COST RECORDS UNDER SECTION 148 OF THE COMPANIES
ACT, 2013:
During the year under review, Maintenance of cost records under section 148 of
Companies Act, 2013 is not applicable to the Company as the Company did not carry on any
activity as specified in Table A and B of Rule 3 of the Companies (Cost Records and Audit)
Rules, 2014.
EMPLOYEES:
There were no employees coming under the purview of Section 197(12) of the Act read
with Rules 5 of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014and the rules frame there under.
REMUNERATION:
As per Section 197of the Companies Act, 2013, the ratio of remuneration of each
director to the median remuneration of the employees of the company for the financial
year:
| Name of the Director |
Ratio to Median employees |
| Mihir R Ghatalia, Managing Director |
5:3 |
DISCLOSURE UNDER SECTION 164
None of the Directors of the company are disqualified for being appointed as Directors
as specified under section 164 of the Companies Act, 2013.
ACKNOWLEDGEMENTS
Your Directors wish to place on record, the appreciation for the continued support of
the customers, Bankers and Suppliers. Your Directors acknowledge and thank the employees
for their valuable contribution and involvement.
For and on behalf of the Board of Directors
| Place: Mumbai |
Mihir R. Ghatalia |
| Date: 29th May, 2023 |
Chairman and Managing Director |
+91-9892691696
