Airo Lam Ltd Directors Report.

To,

The Members,

Airo Lam Limited,

The Board of directors of your Company is pleased in presenting the Fourteenth (14th) Annual Report of your Company together with the Audited Financial Statements for the period ended 31st March, 2021.

FINANCIAL RESULTS:-

(Amount in Lakhs)

Particulars Current Year Ended on 31/03/2021 Previous Year Ended on 31/03/2020
Income from operations 13327.75 10638.53
Other Income 83.33 91.53
Total 13411.08 10730.06
Profit before depreciation, taxation & Extraordinary Items 1006.59 800.03
Less: Depreciation & amortization 234.80 164.49
Less: Provision for Tax 60.54 171.14
Less: Deferred Tax 165.73 (13.36)
Less: Prior period Tax adjustment - -
Profit/(Loss) After Tax 545.52 477.77
Add: Balance brought forward from previous year 1653.70 1175.93
Surplus available for appropriation 2199.22 1653.70
Appropriations:
General Reserves Nil Nil
Less: Proposed Dividend Nil Nil
Less: Tax on Dividend Nil Nil
Accelerated depreciation on fixed asset Nil Nil
Securities Premium 1269.07 1269.07
Balance Carried to Balance Sheet 3468.29 2922.77

OPERATIONAL REVIEW:-

Standalone

Your Company took several initiatives during the last financial year that helped in achieving and consolidating growth in production and sales volumes. Your company tried to increase the sales in the product being manufactured and marketed in-house.

During the year under review, the Company had a standalone revenue from operations of Rs. 13,327.75 Lakhs (previous year Rs. 10,638.53 Lakhs). Total earnings before tax, depreciation and finance cost was Rs. 1,240.55 Lakhs against Rs. 969.56 Lakhs in the previous year. The Companys Profit before exceptional items and tax was Rs. 771.79 Lakhs which was Rs. 635.54 Lakhs in the Previous Year. The Company had Net Profit of Rs. 545.52 Lakhs during current year (Previous year Profit Rs. 477.77 Lakhs). The Basic and Diluted EPS of the Company for FY 2020-21 is Rs. 3.64 and Rs. 3.64 respectively.

Consolidated

During the year under review, the Company had consolidated revenue of Rs. 13,327.75 Lakhs. The Companys consolidated net profit after tax stood at Rs. 545.52 Lakhs.

AMOUNT TRANSFERRED TO RESERVES IF ANY:-

No amount was transferred to reserves during the year under review.

DIVIDEND:-

Your Directors do not recommend any dividends so as to conserve the resources of the company for future needs, for the year 2020-21.

CHANGE IN NATURE OF BUSINESS:-

No change in the nature of Business of the Company during the period under review.

DEPOSITS:-

During the year under review, the Company has not accepted/ renewed deposit from public/ shareholders as per the applicable provisions of the new Companies Act, 2013 and Companies (acceptance of Deposits) Rules, 2014. There is no overdue deposit as on 31st March, 2021.

SUBSIDIARY, JOINT VENTURE (JV) AND ASSOCIATE COMPANIES:-

The Company has following Associate Company:

Sr. No Name of the Subsidiary/JV/Associate Nature Business
1 Airolam Asia Pacific Co. Ltd Associate Trading of plywood and veneer sheets

Further, a statement containing salient features of the financial statements of our associate company in the prescribed format AOC-1 is appended as "Annexure-B" to the Boards Report. The statement also provides the details of performances, financial position of our associate concern.

The Company does not have any Joint Venture & Subsidiary Companies.

CORPORATE GOVERNANCE:-

A separate report on Corporate Governance Compliance as stipulated in Regulation 34 (3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") forms part of the Directors Report.

AUDIT COMMITTEE:-

The Company has in place an Audit Committee in terms of requirements of the Act read with rules framed thereunder and Listing Regulations. The details relating to the Audit Committee are given in the Corporate Governance Report forming part of this report. The recommendations of Audit Committee were duly accepted by the Board of Directors.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:-

As per Listing Regulations, the Management Discussion and Analysis, is appended to this report. DIRECTORS AND KEY MANAGERIAL PERSONNEL:-

1. Resignation / Cessation

During the year under review, none of the Directors or KMPs resigned from the Company.

2. Appointments

During the year under review, none of the Directors or KMPs was appointed.

3. Retirement by Rotation

At the ensuing Annual General Meeting Mr. Hardikkumar Prafulbhai Patel who retires by rotation and being eligible offers themselves for re-appointment.

There being no other changes in Directorship or KMPs of the Company during the year under review.

The details of Directors seeking appointment, re-appointment at the ensuing Annual General Meeting has been provided in the Notice of the Annual General Meeting, forming part of the Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT:-

Pursuant to the requirement of Section 134 (5) of the Companies Act, 2013 ("Act"), and based on the representations received from the operating management, the Directors hereby confirm:

• that in the preparation of Annual Accounts, the applicable Accounting Standards had been followed and that no material departures have been made from the same.

• that they 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 or loss of the Company for that period.

• that they had taken proper and sufficient care for the 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.

• that they had prepared the Annual Accounts on a going concern basis.

• that the Company had adequate internal systems and controls in place to ensure compliance of laws applicable to the Company.

• 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.

DECLARATION BY INDEPENDENT DIRECTORS:-

All the Independent Directors have given declaration to the Company stating their independence pursuant to Section 149(6) of the Companies Act, 2013 and there has been no change in the circumstances which may affect their status as independent director during the year.

BOARD MEETINGS:-

The Board of Directors duly met 10 (Ten) times respectively on 04.06.2020, 09.07.2020, 27.07.2020, 29.08.2020, 02.09.2020, 05.10.2020, 12.11.2020, 01.12.2020, 05.02.2021 and 26.03.2021 in respect of which meetings proper notices were given and the proceedings were properly recorded and signed. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report attached hereto which forms part of this Report.

BOARD EVALUATION:-

The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board that of its committees and individual Directors. Schedule IV to the Companies Act, 2013 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated. The Board works with the Nomination & Remuneration Committee to lay down the evaluation criteria for the performance of Executive/ Non- Executive/ Independent Directors.

The evaluation of all the Directors, Committees and the Board as a whole was conducted based on the criteria and framework adopted by the Board and results of the evaluation is satisfactory and adequate and meets the requirements. The Board approved the evaluation results as collated by the Nomination & Remuneration Committee.

DETAILS OF COMMITTEE OF DIRECTORS:-

Composition of Audit Committee of Directors, Nomination and Remuneration Committee of Directors, Stake Holders Relationship/ Grievances Committee of Directors and Corporate Social Responsibility Committee, number of meetings held of each Committee during the Financial year 2020-21 and meetings attended by each member of the Committee as required under the Companies Act, 2013 are provided in Corporate Governance Report and forming part of the report.

REMUNERATION POLICY:-

A Nomination and Remuneration Policy has been formulated pursuant to the provisions of Section 178 and other applicable provisions of the Companies Act, 2013 and Rules thereto stating therein the Companys policy on appointment and remuneration of Directors and Key Managerial Personnel which was approved and adopted by the Board of Directors.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:-

The particulars regarding conservation of energy, technology absorption and Foreign Exchange earnings and outgo pursuant to 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed herewith as "Annexure C".

EXTRACT OF ANNUAL RETURN:-

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in "Annexure - A" and the same is attached to this Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:-

In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour, the Company has adopted a Vigil Mechanism/Whistle Blower Policy. This policy is explained in corporate governance report and also posted on the website of company i.e. https://airolam.com/investor-relation/.

CORPORATE SOCIAL RESPONSIBILITY:-

The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Companys website at the link https://airolam.com/investor-relation/.

The Average Net Profits of the Company for the last three financial years is Rs. 5,74,70,250/- and accordingly the prescribed CSR expenditure during the financial year 2020-21 was Rs. 11,49,405/- (i.e. 2% of the Average Net Profits of the Company for the last three financial years). The Company had undertaken to spend an amount of Rs. 15,37,813/- during the financial year 2020-21 against the mandatory requirement of Rs. 11,49,405/-.

However, due to disruption of COVID-19 pandemic, nationwide lockdown and traveling restriction, the Company could spend Rs. 12,500/- towards CSR during the financial year 2020-21 and Rs. 15,25,313/- remained unspent. Pursuant to the provisions of Section 135(5) of the Companies Act, 2013, the unspent CSR amount has been transferred to unspent Corporate Social Responsibility account.

The Annual Report on CSR activities is annexed as "Annexure-D" to this Report.

STATUTORY AUDITORS:-

M/s Piyush J. Shah & Co., Chartered Accountants Statutory Auditors of the Company, were appointed as statutory auditors of the Company for a period of five years from the financial year 2021-22 till the financial year 2025-26. Pursuant to the provisions of section 139(1) of the

Companies Act, 2013 and the Rules framed there under, it is proposed to re-appoint, M/s Piyush J. Shah & Co., Chartered Accountants as Statutory Auditors of the Company for further period of five years from the conclusion of the forthcoming AGM till the conclusion of Annual General Meeting to be held for the financial year 2030-31 of the Company at such remuneration plus GST, out-of pocket, travelling and living expenses, etc., as may be mutually agreed between the Board of Directors of the Company and the said Auditors.

The Company has received letters from, M/s Piyush J. Shah & Co., Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified from being appointed as Statutory Auditors of the Company.

COMMENTS ON AUDITORS REPORT:-

There is no adverse comment in the Auditors Report which requires any further explanation. 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 Company has appointed Vickey Patel, Practising Company Secretary, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for FY 2020-21. The Secretarial Audit Report is appended to this report as "Annexure E".

COMMENTS ON SECRETARIAL AUDITORS REPORT:-

There is no adverse comment in the Secretarial Auditors Report which requires any further explanation.

COST AUDITORS AND COST RECORD:-

Your Company was not required to appoint cost auditor of the Company for FY 2020-21.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:-

No guarantees were given. Details of Loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 form part of the notes to the Financial Statements provided in this Annual Report.

RELATED PARTY TRANSACTIONS (RPT):-

Related party transactions that were entered during the financial year were on an arms length basis and were in the ordinary course of business. There were no materially significant related party transactions with the Companys Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval and the particulars of contracts entered during the year as per Form AOC-2 is enclosed as "Annexure - F".

INTERNAL CONTROL SYSTEMS:-

The Company has adequate system of internal control to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorised, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal management of the company checks and verifies the internal control and monitors them in accordance with policy adopted by the company. The Company continues to ensure proper and adequate systems and procedures commensurate with its size and nature of its business.

RISK MANAGEMENT:-

The Company has framed a sound Risk Management Policy to identify and evaluate business risks and opportunities and the same has become integral part of Companys day to day operations. The key business risks identified by the Company are as follows viz. Industry Risk, Management and Operations Risk, Market Risk, Government Policy risk, Liquidity risk, and Systems risk. The Company has in place adequate mitigation plans for the aforesaid risks.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:-

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the ends of the financial year of the Company to which the financial statements relate and the date of the report.

SIGNIFICANT AND MATERIAL ORDERS:-

There are no material orders passed by Regulators, Courts or Tribunals impacting the going concern status and companys operations in future.

REPORTING OF FRAUD:-

There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and/or Board under section 143(12) of Act and Rules framed thereunder.

DISCLOSURE OF ABOUT RECEIPT OF ANY COMMISSION BY MANAGING DIRECTOR:-

No Commission was drawn by the Managing Director during the financial year.

INDUSTRIAL RELATIONS:-

The relationship with the workmen and staff remained co-ordial and harmonious during the year and management received full cooperation from employees.

CAUTIONARY STATEMENT:-

Statements in the Boards Report and the Management Discussion and Analysis describing the Companys objectives, explanations and predictions, may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the companys operations include: global and domestic demand and supply conditions affecting selling prices, new capacity additions, availability of critical materials and their cost, changes in government policies and tax laws, economic development of the country, and other factors which are material to the business operations of the Company.

ACKNOWLEDGEMENT:-

Your Directors place on record their sincere appreciation for the continuous support and cooperation received from the Business Associates including vendors, customers and Banks. Your Directors greatly appreciates overwhelming cooperation, dedication, commitment and contribution made by employees at all levels and look forward for their continued support in future as well. Your Directors would also wish to place on record their gratitude to the shareholders for having faith on the management of the Company.

Place: Prantij By Order of Board of Directors
Date: 16.06.2021 For, Airo Lam Limited
CIN:L20211GJ2007PLC052019
Sd/- Sd/-
Registered office: Pravinbhai N. Patel Sureshbhai H. Patel
Survey No. 355, Chairman & MD Whole-Time Director
Nananpur Road, DIN:01840244 DIN:02223842
N.H. No. 8, Dalpur,
Prantij - 383120,
Gujarat, India.