Aether Industri. Director Discussions


To,

The Members of Aether Industries Limited.

Plot No. 8203,

GIDC Sachin, Surat-394230

Your Directors take pleasure in presenting the 9th Annual Report of your Company together with the Audited Statement of Accounts and the Auditors Report of your Company for the Financial Year ended, March 31, 2021.

Financial Summary and Highlights:

Financial performance of the Company for the Financial Year ended March 31, 2021 is summarized as below:

(Amount in Rs.)
Particulars As on 31st March 2021 As on 31st March 2020
Income from Business Operations 4,50,23,06,005 3,01,87,47,783
Other Income 3,89,11,075 1,97,20,403
Total Income 4,54,12,17,081 3,03,84,68,186
Less: Depreciation/Amortization/Impairment 10,47,96,868 7,44,09,348
Profit/loss before Finance Cost, Exceptional Items and Tax Expenses 4,43,64,20,213 2,96,40,58,838
Less: Finance Costs 9,74,07,533 8,13,08,202
Less: Other Operating & Non-Operating Expenses 4,33,90,12,680 2,32,21,99,430
Profit/Loss before Exceptional Items and Tax Expense 93,74,76,182 56,05,51,206
Add/(less): Exceptional items 0 0
Profit/Loss before Tax Expense 93,74,76,182 56,05,51,206
Less: Tax Expense Current Tax 20,09,98,596 12,19,18,603
Deferred Tax 2,62,58,242 4,25,09,357
Profit/loss for the year 71,02,19,345 39,61,23,246
Earnings per Equity Share:
Basic 70.33 46.27

Business operations and affairs of the Company:

The fiscal year 2020-21 begun with full of challenges and uncertainties due to outbreak of the CoVID-19, which impacted the entire nation, in-fact the globe completely in every aspect, ultimately resulted into nation-wide disruption of commercial activities.

At the initial period of the year, numerous hurdles were on floor. However, the Management at the operational level with the extensive support of the employees, made it possible to perform the organizational activities at the desired markings and the cumulative efforts turned the budgets into achievement.

The Company uninterruptedly performed well and achieved the annual revenue of Rs. 454.22 Cr., at an annual growth rate of 50%, compared to the previous year.

The Company also booked the EBDITA of Rs.113.97 Cr., being 25.10% of the Sales. In the immediate previous financial year, the Company booked the EBIDTA of Rs. 71.63 Cr.

Profit after Tax (PAT) for the year under review was reported to Rs. 71.02 Cr. at the EPS of Rs. 70.33, against the previous years PAT of Rs. 39.61 and EPS of Rs. 46.27.

Transfer to Reserves:

For the Financial Year 2020-21, Company has transferred Rs. 71.02 Cr. to the Reserves & Surplus Account.

Dividend:

Board of the Company has not recommended any dividend to the Members for the Financial Year ended on March 31, 2021.

Change in Nature of the Business:

During the year under review, Company pursued the existing stream of business operations without introducing any new business venture. Business activity of the Company remained unchanged throughout the year.

Details of revision of Financial Statement or Annual Report:

No revision of the Financial Statements or Annual Report has been made during Financial Year ending March 31, 2021 neither in any of the preceding three Financial Years.

Material changes and commitments after the end of Financial Year:

There have been no material changes and commitments which have occurred between the end of the Financial Year to which the Financial Statements relate and the date of this Report, which affect the financial position of the Company.

Share Capital Structure:

During the year under review, the Company has increased its Authorised Share Capital and has also converted the 8% Cumulative Redeemable Preference Shares into existing class of Equity Shares at par.

The Company raised the Authorised Share Capital by Rs. 5.00 Cr. Equity Shares and at the end of the financial year, total Authorised Share Capital stood at Rs. 40.00 Cr., bifurcated as below:

Authorized Capital:

Rs. 40,00,00,000/- (Rs. Forty Crore only), comprised of 1,50,00,000 Equity Shares of Rs. 10 /- each and 2,50,00,000 Preference Shares of Rs. 10 each.

During the year under review, all the 8% Cumulative Redeemable Preference Shares of the Company were converted into Equity Shares of the Company. Such Preference Shares were converted at the conversion ration of 1:16.251 whereby, all the 2,50,00,000 Preference Shares were converted into 15,38,367 Equity Shares and at the end of the fiscal, no Preference Shares were existed. Post the conversion, the Companys issued share capital structure was as below;

Issued, Subscribed and Paid-up Capital:

Rs.10,09,85,670/- (Rs. Ten Crore Nine Lakh Eighty-five Thousand Six Hundred Seventy only), comprised of 1,00,98,567 Equity Shares of Rs. 10/- each.

Credit rating of the Company:

Your Company with its continuous outstanding performance, has also impacted the credit rating in a positive way. This time once again, the Company has maintained the excellent upward trend and the credit rating of the Company is improved from ACUITE BBB to ACUITE BBB+, conducted by M/s. Acuite Ratings & Research Limited.

The rating was opted on credit exposure of Rs.203.17 Cr. (enhanced from previous exposure of Rs. 187.15 Cr.). The long term rating was improved to BBB+ and the short term rating was improved to A2. Companys continuous outstanding performance at optimum level made this achievable for the third time in a row.

Transfer of amounts to Investor Education and Protection Fund:

Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore, there were no funds which were required to be transferred to Investor Education and Protection Fund.

Meetings of the Board of Directors:

Board of the Company met at regular intervals as specified under the norms specified under the Companies Act, 2013 for discussing and reviewing various Board and other strategic matters.

During the fiscal under review, total 5 (five) Board Meetings were conducted on:

1. 11th July, 2020

2. 17th August, 2020

3. 3rd October, 2020

4. 30th January, 2021

5. 6th February, 2021

Business transactions were all well-arranged through out the year under review and accordingly Board Meetings were planned-out well.

Board of Directors and its Committees:

Board of the Company is duly constituted, comprising adequate number of Executive, Non-Executive, Women Directors, Independent Directors and the same remained unchanged throughout the year under review.

Board of the Company has duly formed various Committees according to provisions framed under Companies Act, 2013, as mentioned below:

- Audit Committee:

The Company has duly formed Audit Committee under Section 177, comprising following members:

Sr. No. Name of the Director Position held in the Committee Category of the Director
1. Mr. Ashwin Jayantilal Desai Chairman Managing Director
2. Mr. Jeevan Lal Nagori Member Independent Director
3. Mr. Arun Brijmohan Kanodia Member Independent Director

The above composition of the Audit Committee consists of Independent Directors viz., Mr. Jeevan Lal Nagori and Mr. Arun Brijmohan Kanodia, who form the majority.

The Company has established a vigil mechanism through this Committee where, the genuine concerns are expressed by the employees and other Directors with provision of keeping adequate safeguard against victimization of employees and Directors who express their concerns and has also provided direct access to the Chairman of the Audit Committee in certain extents on reporting issues concerning the interests of employees and the Company. Particulars of the Policy on Vigil Mechanism are uploaded on the website of the Company, accessible at www.aether.co.in.

During the year under review total 3 (three) Committee Meetings were held on:

1) 11th July, 2020

2) 17th August, 2020 and

3) 30th January, 2021.

During all the Meeting, requisite quorum remained present throughout the Meeting.

- Nomination & Remuneration Committee:

The Company has duly formed Nomination and Remuneration Committee under Section 178, comprising following members:

Sr. No. Name of the Director Position held in the Committee Category of the Director
1. Mr. Ashwin Jayantilal Desai Member Managing Director
2. Ms. Ishita Surendra Manjrekar Chairperson Non-Executive Director
3. Mr. Jeevan Lal Nagori Member Independent Director
4. Mr. Arun Brijmohan Kanodia Member Independent Director

Various terms of reference of the Committee are stated as below:

1. To identify persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall carry out evaluation of every Directors performance.

2. The Nomination and Remuneration Committee shall, while formulating the policy ensure that:

- the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

- regularly review the Human Resource function of the Company.

- relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

- remuneration to Directors, Key Managerial Personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

3. Discharge such other function(s) or exercise such power(s) as may be delegated to the Committee by the Board from time to time.

4. Make reports to the Board as appropriate.

5. Review and reassess the adequacy of this charter periodically and recommend any proposed changes to the Board for approval from time to time.

6. Any other work and policy related and incidental to the objectives of the committee as per provisions of the Act and rules made there under.

Policy on Nomination & Remuneration of Directors, KMP and Employees is placed on the website of the Company, accessible at www.aether.co.in.

During the year under review total 3 (three) Committee Meetings were held on

1.) 11th July, 2020

2.) 17th August, 2020 and

3.) 30th January, 2021 with presence of requisite quorum.

- Corporate Social Responsibility Committee:

Company has duly constituted The Corporate Social Responsibility Committee under Section 135, comprised of following members:

Sr. No. Name of the Director Position held in the Committee Category of the Director
1. Ms. Purnima Ashwin Desai Chairperson Managing Director
2. Mr. Rohan Ashwin Desai Member Executive Director
3. Dr. Aman Ashwinbhai Desai Member Executive Director
4. Mr. Arun Brijmohan Kanodia Member Independent Director
5. Mr. Kamalvijay Ramchandra Tulsian Member Non-Executive Director

Policy on CSR activities and spending was formed by the Committee and approved by the Board are placed on the website of the Company, accessible at www.aether.co.in.

During the year under review total 3 (three) Committee Meetings were held on:

1) 11th July, 2020

2) 17th August, 2020 and

3) 30th January, 2021 where the quorum requirements were as per the norms stipulated.

Directors retirement by rotation:

According to provision of Section 152(6) of the Companies Act, 2013 and as per terms framed under the Articles of Association, Dr. Aman Ashwinbhai Desai (DIN: 00043633) and Ms. Ishita Surendra Manjrekar (DIN: 06731016) will be retiring by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment.

The Board recommends their re-appointment.

Declaration by Independent Directors:

The Board of Directors of the Company hereby confirms that all the Independent Directors have been duly appointed by the Company and they have given the annual declaration that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013.

Board evaluation:

The Board evaluated the effectiveness of its functioning and that of the Committees and of Individual Directors by seeking their inputs on various aspects of Board/Committee governance.

The aspects covered in the evaluation included the contribution to and monitoring of corporate governance practices, participation in the long-term strategic planning and the fulfillment of Directors obligations and fiduciary responsibilities, including but not limited to, active participation at the Board and Committee meetings. The Chairman of the Board had one-on-one Meetings with the Independent Directors and the Chairman of the Nomination and Remuneration Committee had one-on-one meetings with the Executive and Non-Executive Directors. These Meetings were intended to obtain Directors inputs on effectiveness of Board/Committee processes. The Board considered and discussed the inputs received from the Directors. Further, the Independent Directors at their Meeting, reviewed the performance of the Board, Chairman of the Board and of Non-Executive Directors.

Directors Responsibility Statement:

Pursuant to Section 134 (5) of the Companies Act, 2013 the Board of Directors of the Company confirm that;

a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) 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 and loss of the company for that period;

c) 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;

d) The Directors had prepared the annual accounts on a going concern basis; and

e) 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.

Internal Financial Controls:

Internal Financial Control System (IFCS) of the Company has been set out upon considering following measures;

1. That IFCS commensurate with the size and nature of its operations.

2. All legal and statutory compliances are ensured on a monthly basis. Non-compliance, if any, is seriously taken by the management and corrective actions are taken immediately. Any amendment is regularly updated by internal as well as external agencies in the system.

3. Approval of all transactions is ensured through a pre-approved Delegation of Authority Schedule which is reviewed periodically by the Management.

4. The Company follows a robust internal audit process. Transaction audits are conducted regularly to ensure accuracy of financial reporting, safeguard and protection of all the assets. Verification of Fixed Asset is done on an annual basis. The audit reports for the above audits are compiled and submitted to Board of Directors for review and necessary action Company has tried to put the best in class IFCS for the optimum output.

Deposits:

The Company has not accepted any deposit from public within the meaning of Section 73 of the Companies Act, 2013 and Rules framed thereunder.

Loans, Guarantees and Investments:

During the year under review, Company has not made/given/advanced any Loan, Guarantee and Investment covered under Section 186 of the Companies Act, 2013.

Related Party Transactions:

All related party transactions that were entered into during the financial year were in the ordinary course of business and at arms length pricing. There are no materially significant Related Party Transactions made by the Company with Promoters, Directors, Key Managerial Personnel or any such designated persons which may have a potential conflict with the interest of the Company.

Particulars of such transactions with related parties are duly noted on accounts forming part of the Financial Statements.

Further all the necessary details of transaction entered with the related parties as defined under Section 2(76) and Section 188 of the Companies Act, 2013 are attached herewith in Form No. AOC-2 as Annexure-A for your kind perusal and information.

Corporate Social Responsibility initiatives:

For the year under review, Company has spent Rs. 65.30 lakhs towards CSR initiatives. All the CSR oriented planning were executed in line with the budgets and at the end of the year, CSR obligations of the Company were cent percent achieved in true letter and spirit of the law. The Promoters of the Company considers CSR as one of the key format to thank the society for what the Company has achieved so far. Promoters of the Company are of the belief that the needy must be supported towards elimination of inequality prevailing in the society.

At the beginning of the year, amidst all the uncertainties, your Company preferred to begin the CSR initiatives with areas associated with CoVID-19 and later, focused on education area broadly.

Your Companys strong belief in achieving the balanced growth with social, economical and environmental elements keeps the moral always high and Company will remain always committed for the society.

CSR initiatives of the Company for the Financial Year 2020-21 are separately reported as Annexure-B.

Energy conservation, Technology absorption and Foreign Exchange Earnings & Outgo:

Information on conservation of Energy, Technology absorption, Foreign Exchange earnings and outgo required to be disclosed under Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are provided as under:

a) Conservation of Energy:

- the steps taken or impact on conservation of energy;

The Company is taking all the efforts to save electricity and other resources to conserve energy and utilize the same optimally.

- the steps taken by the company for utilizing alternate sources of energy;

Strict adherence is cultivated in all the members in the Company to save electricity and other resources. Sign boards and instructions are placed at various places within the premises of the Company to switch of the lights etc. when not in use and other conservation measures.

- the capital investment on energy conservation equipment;

As such there is no investment in the same but Company inculcates the saving of energy within all.

b) Technology Absorption:

- the efforts made towards technology absorption;

The Company has developed its own technologies for the development of various products and services which it is imparting to varied customers.

- the benefits derived like product improvement, cost reduction, product development or import substitution;

The Company is into Research, Development and Manufacturing of Specialized Chemicals and as such measures are always taken to reduce the cost of the products and services which it offers to its customers

- in case of imported technology (imported during the last three years reckoned from the beginning of the financial year): None

- the expenditure incurred on Research and Development: Rs. 71,61,887/-

c) Foreign Exchange Earnings and Outgo:

- The Foreign Exchange earned during the year and the Foreign Exchange outgo during the year: Earning: US $ 2,94,25,902.47

Outgo: US $ 1,43,17,108.96

EUR- 1,44,421

CHF - 4,870.75

Extract of Annual Return:

The Extract of Annual Return as required under Section 92(3) of the Companies Act, 2013 in Form No. MGT-9 is annexed herewith as Annexure-C for your kind perusal and information.

Risk Management:

A formal enterprise wide approach to Risk Management is being adopted by the Company and key risks are being managed within a unitary framework. As a formal roll-out, all business divisions and corporate functions will embrace Risk Management Policy and Guidelines, and to make use of these in the decision making. Key business risks and their mitigation are considered in the annual/strategic business plans and in periodic management reviews. The risk management process in our multibusiness, multi-site operations, over the period of time have been embedded into the Companys business systems and processes, such that Companys response to risk remain current and dynamic as per condition.

Vigil Mechanism:

The Company has established a Vigil Mechanism cum Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The Policy has a systematic mechanism for Directors and Employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct or Policy.

Once again in this year as well, no such instances has been reported under unethical and prohibited context. Vigil Mechanism Policy is placed on the website of the Company, accessible at www.aether.co.in.

Regulatory action:

During the reporting period, no such significant and material orders were passed by any Regulators, Courts or Tribunals that could impact the going concern status and operations of the Company in future.

Statutory Auditors and their Report:

For the first time, this years audit was conducted by M/s. Birju S. Shah & Associates, Chartered Accountants, Surat. They were duly appointed in the Extra Ordinary General Meeting held on 6th February, 2021 to fill the vacancy of resigning Auditors.

Alike the previous year, no such observations (including any qualification, reservation, adverse remark or disclaimer) are stated by the Auditors in their Audit Report that may call for any explanation from the Directors. Further, notes to accounts referred to in the Auditors Report are self-explanatory in nature.

Secretarial Audit:

Pursuant to provision of Section 204 of the Companies Act, 2013 and Rules framed thereunder , Ms. Pashmina P. Chevli, Company Secretary in practise was appointed as the Secretarial Auditor of the Company for the FY 2020-21. She undertook the secretarial audit activity with at-most depth and integrity. All the conducts of the Company were found in line with the stipulated norms and the compliance system was found in-line with the law. There was no instance of any material misconduct found in the audit.

The Auditor observed that "The Cost Auditor has submitted the Cost Audit Report for FY 2019-20 to the Board of the Company on 30th January, 2021. However, the Company has considered and examined the said report and filed the requisite E-Form within the time limit stipulated under the Act." On this, the Management represented that "Due to CoVID-19 contamination, the Cost Auditor of the Company was unable to perform his duty in time and consequently the Report was received late by the Board though, the same was approved and submitted before the Registrar of Company within stipulated time of 30 days from the receipt."

The Secretarial Audit Report for the year ended March 31, 2021 is annexed herewith Annexure-D, which is self-explanatory in nature.

Reporting of frauds by Auditors:

There are no qualification, reservation or any adverse remarks made by M/s. Birju S. Shah & Associates, Statutory Auditors in their Audit Report, Ms. Pashmina P. Chevli, Secretarial Auditor in her Secretarial Audit Report and Ms. Ishita H. Rathod, Internal Auditor in her Internal Audit Report.

Apart from it, no such instance of fraud committed to Company by its employees or officers to the Audit Committee have been reported under Section 143(12) of the Companies Act, 2013.

Corporate insolvency resolution process initiated under the Insolvency and Bankruptcy Code, 2016:

Currently, no such process has been initiated by the Company/against the Company during the period under review under the Insolvency and Bankruptcy Code, 2016 (IBC).

Disclosure under ‘Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.

Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

Members to note that there were no such instances reported in the Company during the period under review. All the male and female workforce in the Company works with due respect to each other.

Secretarial Standards:

The Company has duly complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India on Board and General Meetings of the Company (SS-1 and SS-2) from time to time.

Human Resources and Industrial Relations:

The Company takes pride in the commitment, competence and dedication of its employees in all areas of the business. The Company has a structured induction process at all locations and management development programs to upgrade skills of Managers. Objective appraisal systems based on Key Result Areas (KRAs) are in place for senior management staff and the system is always being implemented towards unbiased appraisal system.

The Company is committed to nurturing, enhancing and retaining its top talent through superior learning and organizational development. This is a part of our Corporate HR function and is a critical pillar to support the organizations growth.

Environment, Health and Safety Protection:

Companys Health and Safety Policy commits to comply with applicable legal and other requirements concerned to occupational Health, Safety and Environment matters. Your Company has due system for environmental issues, health and safety issues concerned with the employees and the same is reviewed at regular intervals.

Appreciation and Acknowledgement:

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The Board places on record its appreciation for the support and cooperation, your company has been receiving from its Suppliers, Retailers, Dealers & Distributors and others associated with the Company. The Directors also take this opportunity to thank all Clients, Vendors, Banks, Regulatory Authorities, Government and every Stakeholders for their continuous support.

For and behalf of Board of Directors
Ashwin Jayantilal Desai
Chairman Managing Director
(DIN: 00038386)
Place: Surat
Date: 4th September, 2021