To,
The Members,
AAA Technologies Limited
The Directors are pleased to present the Twenty-Third Annual Report and the Audited Financial Statements for the year ended 31st March 2023: -
1. FINANCIAL RESULTS
The financial statements of the Company are prepared in accordance with Indian Accounting Standards ("Ind AS") and are in accordance with the Section 133 of the Companies Act, 2013 (the 'Act') read with Companies (Accounts) Rules, 2014 and amendments thereof. The financial highlights of the Company for the financial year ended March 31, 2023 as compared to financial year ended March 31, 2022, are summarized as follows:
2. STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK
During the year under review, Company's performance is as follows:
Revenue from Business Operations is Rs. 2,300.04 Lakhs as compared to the previous F.Y of Rs. 1,440.16 Lakhs. There is increase of 59.71% in Revenue from Business Operations as compared to the previous year. The Net Profit of the Company recorded an increase of 22.67% at Rs. 286.84 Lakhs as compared to the previous F.Y of Rs. 233.84 Lakhs. The Earnings per Share is Rs. 2.24 as compared to the previous EPS of Rs. 1.82. The pandemic has resulted the businesses realizing the importance of cyber security and as the business environment is returning to normalcy, your directors expect better performance in coming years after the company has successfully sustained the pandemic period and is on track of smooth transition & exponential growth for the period which lies ahead.
3. LISTING ON MAIN BOARD OF NSE AND BSE
The Equity Shares of the Company was listed and admitted to dealings on the EMERGE SME Platform of the National Stock Exchange of India Limited w.e.f. October 13, 2020 with symbol "AAATECH". The Company migrated to Main Board of National Stock Exchange of India Limited with symbol "AAATECH" and Bombay Stock Exchange with Scrip Code "543671" and Scrip ID "AAATECH" w.e.f. November 28, 2022.
4. EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) and Section 134 (3)(a) of the Act, read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of Annual return is appended to this Report as Annexure- I and has also been uploaded on the Company's website under the web-link at www.aaatechnologies.co.in.
5. TRANSFER TO RESERVE
For the financial year ended 31st March, 2023, your Company has not proposed to carry or transfer any amount to any other specific reserve account.
6. CHANGE IN NATURE OF BUSINESS
There was no change in the nature of business during the year under review.
7. DIVIDEND
The Board of Directors of your company, in its meeting held on 18th May, 2023 has recommended the payment of dividend of Rs. 0.50 per equity share for the financial year ended March 31, 2023. The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting (AGM).
The final dividend on equity shares, if approved by the members, would involve a cash outflow (including Tax Deducted at source) of Rs.64.13 Lakhs.
The dividend would be payable whose names appear in the Register of Members as on the Book Closure Date.
8. INFORMATION ABOUT SUBSIDIARY/ JV/ ASSOCIATE COMPANY
The Company does not have any Holding, Subsidiary, Joint Venture or Associate during the year under review.
9. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
Since there was no unpaid/unclaimed Dividend in the books for more than 7 years, the provisions of Section 125 of the Companies Act, 2013 do not apply to your company.
10. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENT RELATES AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year 2022-23 to which these financial statements relate and the date of this report.
11. PUBLIC DEPOSITS
During the year under review, the Company has not accepted any deposits within the meaning of Section 73 and 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.
12. CHANGES IN SHARE CAPITAL
* The Company has alloted 42,75,600 Equity Shares as fully paid up by way of Bonus Shares during the Financial Year 2022-2023.
13. DEPOSITORY SERVICES
The Company's Equity Shares have been admitted to the depository mechanism of the National Securities Depository Limited (NSDL) and also the Central Depository Services (India) Limited (CDSL). As a result the investors have an option to hold the shares of the Company in a dematerialized form in either of the two Depositories. The Company has been allotted ISIN No. INE0D0U01013.
Shareholders therefore are requested to take full benefit of the same and lodge their holdings with Depository Participants [DPs] with whom they have their Demat Accounts for getting their holdings in electronic form.
14. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
> During the year under review Mrs. Ruchi Agarwal (DIN: 00415485) was reappointed as the Executive Director of the Company.
> DIRECTOR RETIRE BY ROTATION:
Mr. Venugopal Dhoot, (DIN: 02147946) Executive Director retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offers himself for reappointment. The Board recommends the re-appointment of Mr. Venugopal Dhoot (DIN: 02147946)
> CURRENT STRUCTURE OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
15. ANNUAL PERFORMANCE EVALUATION
Pursuant to the provisions of the Companies Act, 2013, a formal annual evaluation needs to be made by the Board of its own performance and that of its Committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of the independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. The Board works with the Nomination and Remuneration Committee to lay down the evaluation criteria. The Board has carried out an evaluation of its own performance, the directors individually as well as (including chairman) the evaluation of the working of its Audit Committee, Nomination and Remuneration Committee, Stakeholders' Relationship Committee and Corporate Social Responsibility Committee of the Company.
The Board has devised questionnaire to evaluate the performances of each of Executive, Non-Executive and Independent Directors. Such questions are prepared considering the business of the Company and the expectations that the Board have from each of the
Directors. The evaluation framework for assessing the performance of Directors comprises of the following key areas:
1. Attendance at the Board Meetings and Committee Meetings;
2. Quality of contribution to Board deliberations;
3. Strategic perspectives or inputs regarding future growth of Company and its performance;
4. Providing perspectives and feedback going beyond information provided by the management.
16. CORPORATE SOCIAL RESPONSIBILITY
The members of Corporate Social Responsibility Committee held internal discussion and it came to the conclusion that during the year under Review Company has not exceeded any of the limit prescribed in section 135. Hence the company does not require to comply with provisions of Corporate Social Responsibility nor required to make any provision of expenses for CSR activities given in Schedule VII of the Companies Act, 2013.
17. DIRECTORS'RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors of the Company confirms that-
a) In the preparation of the annual accounts, the applicable Indian Accounting Standards ("Ind AS") 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;
e) The directors of the Company, 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
f) 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.
18. CODE OF CONDUCT
The Board has adopted the Code of Conduct for members of the Board and Senior Management personnel of the Company. The Code lays down, in details, the standards of business conduct, ethics and governance. Code of Conduct has also been posted on the Company's Website www.aaatechnologies.co.in.
19. NOMINATION AND REMUNERATION POLICY
The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a Policy for selection, appointment and remuneration of Directors and Key Managerial Personnel, including criteria for determining qualifications, positive attributes and Independence of Directors.
The said policy is available on the Company's Website. Website Link: www.aaatechnologies.co.in
20. VIGIL MECHANISM/WHISTLE BLOWER POLICY
In accordance with Section 177 of the Companies Act, 2013, the Company has adopted a Vigil mechanism / Whistle Blower Policy to deal with instance of fraud and mismanagement, if any.
The Company had established a mechanism for directors and employees to report concerns about unethical behaviour, actual or suspected fraud, or violation of our Code of Conduct and Ethics. The mechanism also provides for adequate safeguards against victimization of directors and employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in the exceptional cases.
We affirm that during the financial year 2022-23, no employee or director was denied access to the Audit Committee.
The Vigil mechanism / Whistle Blower Policy is available on the website of the Company at www.aaatechnologies.co.in
21. RISK MANAGEMENT POLICY
The Company has laid down a well-defined Risk Management Policy to identify the risk, analyze and to undertake risk mitigation actions. The Board of Directors regularly undertakes the detailed exercise for identification and steps to control them through a well-defined procedure. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through properly defined framework.
The Risk Management Policy is available on the website of the Company at www.aaatechnologies.co.in.
22. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There are no significant or material order passed by any regulator or court or tribunal, which impacts the going concern status of the Company or will have bearing on company's operations in future.
23. STATUTORY AUDITOR
The Statutory Auditors of the Company, M/s. Vandana V. Dodhia & Co., Chartered Accountant [ICAI Registration No. 117812W], are to be re-appointed as Auditors of the Company to hold office from the conclusion of this Annual General Meeting (AGM) till the conclusion of the next AGM of the Company, subject to the approval of Shareholders. The statutory auditor confirmed that, they satisfy the eligibility criteria to be appointed as Statutory Auditor in the Company.
24. AUDITOR'S REPORT
There is no qualification, reservation, adverse remark or disclaimer given by the Auditor in their Report.
25. REPORTING OF FRAUD BY AUDITORS
During the year under review, statutory auditor has not reported any instances of Fraud committed against the Company by its officers or employee, the details of which needs to be reported to the Board under Section 143(12) of the Companies Act, 2013.
26. INTERNAL AUDITOR
For the financial year 2022-23, the Company in the Board Meeting held on 15th July, 2022 appointed M/s. P D Pandya & Associates (Practicing Company Secretaries), as Internal Auditors of the Company for the financial year 2022-2023 and the report of Internal Auditor was issued and the same has been reviewed by audit committee.
27. SECRETARIAL AUDITOR
The Board appointed M/s. VKM & Associates, Practicing Company Secretaries (COP No. 4279) as Secretarial Auditor to conduct the Secretarial Audit of the Company for the financial year ended March 31, 2023. As per the provisions of Section 204 of the Act read with Rules framed thereunder. The Secretarial Audit Report in Form MR-3 is given as Annexure II and forms part of this Report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.
28. CORPORATE GOVERNANCE
AAA Technologies Limited constantly endeavors to follow the appropriate standards for Corporate Governance and best practices and disclose the same transparently. The board is conscious of its inherent responsibility to disclose timely and accurate information on the company's operations, performance, material corporate events as well as on the leadership and governance matters relating to the company.
The company has complied with the requirements of the Securities and Exchange Board of India (Listing obligation and Disclosure Requirements) Regulations, 2015 regarding Corporate Governance. A report on the Corporate Governance practices is given as Annexure III and forms part of this report.
A Compliance Certificate signed by Chief Financial Officer is given as Annexure IV and forms part of this report.
A Certificate on Corporate Governance issued by M/s. VKM & Associates, Practicing Company Secretaries (COP No. 4279) is given as Annexure V and forms part of this Report.
A Certificate that none of the Directors are disqualified issued by M/s. VKM & Associates, Practicing Company Secretaries (COP No. 4279) is given as Annexure VI and forms part of this Report.
29. COST AUDITOR
For the financial year 2022-23, the Company is not required to appoint any Cost Auditor.
30. DISCLOSURE ON MAINTENANCE OF COST RECORDS
The Company is not required to Maintain cost records as specified under section 148(1) of the Act.
31. LOANS, GUARANTEES AND INVESTMENTS
There are no loans granted, guarantees given and investments made by the Company under Section 186 of the Companies Act, 2013 read with rules framed thereunder.
32. RELATED PARTY TRANSACTIONS
In line with the requirements of the Act and SEBI Listing Regulations, the Company has formulated a Policy on Materiality of Related Party Transactions which is also available on the Company's website at www.aaatechnologies.co.in. The Policy intends to ensure that proper reporting; approval and disclosure processes are in place for all transactions between the Company and its Related Parties. All related party transactions are placed before the Audit Committee for review and approval.
Pursuant to the provisions of the Act and SEBI Listing Regulations with respect to omnibus approval, prior omnibus approval is obtained for related party transactions on a yearly basis for transactions which are of repetitive nature and entered in the ordinary course of business and are at arm's length. Transactions entered into pursuant to omnibus approval are verified by the Finance Department and a statement giving details of all related party transactions are placed before the Audit Committee and the Board for review and approval on a quarterly basis.
Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel, which may have a potential conflict with the interest of the Company at large. Therefore, Form AOC-2, is not required to be annexed.
33. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:
A. Considering the nature of activities of the company, the provisions of Section 134(3)(m) of the Companies Act, 2013 relating to conservation of energy and technology absorption do not apply to the company.
B. Foreign exchange earnings and Outgo
(Rupees in lakhs)
34. PARTICULARS OF THE EMPLOYEES AND REMUNERATION.
Pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, details of ratio of remuneration of each director to the median employee's remuneration are appended to this report as "Annexure VII".
35. MANAGEMENT DISCUSSION ANALYSIS
Management Discussion and Analysis Report for the year under review, is presented in a separate section forming part of the Annual Report and is annexed herewith as "Annexure VIII".
36. BUSINESS RESPONSIBILITY REPORT
As per the provisions of Regulation 34(2) of the SEBI Listing Regulations, as amended, the Annual Report of the top 1000 listed entities based on market capitalization shall include a Business Responsibility Report ("BRR"). But, the Company, not being one of such top 1000 listed entities, is not required to annex any Business Responsibility Report.
37. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has clearly defined organization structure and lines of authority and sufficient Control is exercised through business review by the Management. The Company has adopted a well-defined system to ensure adequacy and efficiency of the Internal Financial Control Function.
38. COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has devised proper systems to ensure compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and the Company complies with all the applicable provisions of the same during the year under review.
39. INSIDER TRADING
The Company has adopted an 'Internal Code of Conduct for Regulating, Monitoring and Reporting of Trades by Designated Persons' ("the Code") in accordance with the SEBI (Prohibition of Insider Trading) Regulations, 2015 ("PIT Regulations"). The Code is applicable to promoters, member of promoter group, all Directors and such designated employees who are expected to have access to unpublished price sensitive information relating to the Company. The Company Secretary 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, www.aaatechnologies.co.in .
40. AFFIRMATIONS AND DISCLOSURES
a. Details of non-compliance by the Company, penalties, and strictures imposed on the Company by Stock Exchanges or SEBI or any statutory authority, on any matter related to capital markets, during last three financial years: There was only one instance of noncompliances by the Company necessitating imposition of penalties, strictures on the Company by Stock Exchanges or SEBI or any statutory authority, on any matter related tocapital markets i.e. 6 days of delay in implementation of Bonus Issue @ Rs. 20,000/- per rs .day amounting to Rs. 1,20,000/-
b. Where the Board had not accepted any recommendation of any committee of the Board which is mandatorily required, in the relevant financial year: NA
41. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013
The company has in place a policy for prevention of sexual harassment in accordance with the requirements of the Sexual Harassment of women at workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy and no such action is reported.
42. POLICY ON BOARD DIVERSITY:
The Board has framed a policy for Board Diversity which lays down the criteria for appointment of Directors on the Board of your Company and guides organization's approach to Board Diversity.
Your Company believes that, Board diversity on the basis of the gender, race and age will help build diversity of thought and will set the tone at the top. A mix of individuals representing different geographies, culture, industry experience, qualification and skill set will bring in different perspectives and help the organization grow. The Board of Directors is responsible for review of the policy from time to time. Policy on Board Diversity has been placed on the Company's website at www.aaatechnologies.co.in
43. ACKNOWLEDGEMENT
The Directors take this opportunity to thank all Shareholders, Clients, Vendors, Banks, Government and Regulatory Authorities, Stock Exchanges, Depository Services and RTA for their continued support.