Associated Alcohols & Breweries Ltd Directors Report

Your Directors have pleasure in presenting their 36^th Annual Report together with the Financial Statements and Auditors Report of the Company for the financial year ended on 31^st March 2025.

A summary of the companys financial result for the financial year 2024-25 is as under:

(Rs in Lakhs)

Your company has demonstrated robust financial growth, with Net Revenue from Operations increasing by 43% year-over-year to Rs 109657.90 Lakh. The companys EBITDA rose 67% year-over-year to Rs 12809.10 Lakh reflecting enhanced operational efficiency. Profit After Tax (PAT) reached Rs 8146.22, Lakh marking a 61% year-over-year increase and expanding the PAT. Additionally, the Diluted Earnings Per Share (EPS) stood at Rs 43.05, reflecting a growth of 54% year-over-year, underscoring the companys strong financial performance and value creation for shareholders.

Associated Alcohols & Breweries Ltd. (AABL) plays a pivotal role in the Indian alcoholic beverage industry, serving as a primary supplier of high-quality Extra Neutral Alcohol (ENA) to leading Indian Made Foreign Liquor (IMFL) manufacturers and bottlers. The company has strategically directed a significant portion of its ENA production towards value-added products, resulting in a slight decrease in overall ENA volumes. AABLs versatility is evident in its ability to produce ENA from a variety of feedstocks, ensuring a steady supply to meet diverse market demands. In a significant expansion of its operations, AABL commenced commercial production at its state-of- the-art 130 KLPD ethanol plant in Barwaha, Madhya Pradesh, with an investment of approximately Rs 150 crore. This grain-based facility is equipped with advanced technology and a versatile boiler capable of utilizing various fuels, including coal, husk, and briquettes, underscoring the companys commitment to eco-friendly practices and operational efficiency.

Furthermore, AABL is capitalizing on favorable government initiatives, such as the Ethanol Blending with Petrol (EBP) program, to diversify its revenue streams and contribute to sustainable energy solutions.

The paid-up equity share capital of the company as at March 31, 2025, stood at Rs 1807.92 lakhs divided into 1,80,79,200 equity shares of Rs 10/- each.

Preferential Allotment: During the year, the company proposed and thus allotted;

a) 9,00,000 warrants at price of Rs 485/- each convertible into 9,00,000 equity shares of Rs 10/- each at a premium of Rs 475/- per share in one or more tranches within a period of 18 months from the date of allotment i.e. 28^th March 2024 on preferential basis to two promoters of the company of the company as per provisions of the SEBI (ICDR) Regulations, 2018 and the SEBI (LODR), Regulations, 2015.

b) 11,00,000 warrants at price of Rs 679/- each convertible into 11,00,000 equity shares of Rs 10/- each at a premium of Rs 669/- per share in one or more tranches within a period of 18 months from the date of allotment i.e. 7^th October 2024 on preferential basis to two promoters of the company and two other persons/non-promoter of the company as per provisions of the SEBI (ICDR) Regulations, 2018 and the SEBI (LODR), Regulations, 2015.

These warrants are outstanding on the date of report.

Your directors have recommended dividend for approval of the members at the ensuing 36^th Annual General Meeting a dividend of 20% i.e. Rs 2.00/- each (previous year 20% i.e. Rs 2.00/- each) on 1,80,79,200 Equity Shares of face value of Rs 10.00/- each the aggregate amount being Rs 361.58 lakhs, payable to shareholders whose name appear in the Register of Members as on the Book Closure Date/Record Date. The company has not transferred any amount in the general reserve.

As mandated by the Ministry of Corporate Affairs, the financial statements for the financial year ended on 31^st March 2025 has been prepared in accordance with the Indian Accounting Standards (IND AS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 as amended from time to time. The estimates and judgments relating to the Financial Statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions reasonably present the Companys state of affairs, profits and cash flows for the financial year ended 31^st March, 2025. The Notes No. 3 & 4 to the Financial Statements adequately cover the accounting policy and form an integral part of this report.

A significant step towards diversifying our product portfolio, and a testament to our vision and commitment to innovation, the Ethanol Project / Plant has been completed, and commercial production has commenced at its state-of-the-art 130 KLPD ethanol plant in Barwaha, Madhya Pradesh, with an investment of approximately Rs 150 crore. This grain- based facility is equipped with advanced technology and a versatile boiler capable of utilizing various fuels, including coal, husk, and briquettes, underscoring the companys commitment to eco-friendly practices and operational efficiency.

As reported from time to time and that during last year the company had received an order from the CCl based on the investigation report of the DG submitted to the CCl alleging cartelisation in the supply of certain products.

The company has challenged the jurisdiction of the CCl on the aforesaid order before the Honble Delhi High Court, the Honble Court directed the Company to raise all its contentions before the CCI during the process.

Accordingly, the company has sought necessary clarification from CCl and is in the process of submitting its responses as further sought in the order. The CCI in its last order dated 20.03.2024 has further order the DG to investigate the report, till date CCl has not raised any demand in this matter and the Company doesnt perceive any unfavourable impact.

9. DIRECTORS RESPONSIBILITY STATEMENT

During the year Six (6) Board, Five (5) Audit Committee, Two (2) Stakeholders Relationship committee, Three (3) Nomination and Remuneration Committee, One (1) CSR Committee and Two (2) Risk Management Committee Meetings were convened and held. The details of the same is disclosed in Corporate Governance report.

Pursuant to the provisions of the Companies Act, 2013 and the Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors adopted a formal mechanism for evaluating its performance and as well as that of its committees and individual Directors.

The Directors were satisfied with the evaluation results, which reflected overall engagement of the Board and its Committees with the Company.

14. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

As part of its initiatives under "Corporate Social Responsibility” (CSR), the company has constituted Corporate Social Responsibility Committee. The CSR Committee has framed the CSR policy of the company. The Committee has made expenditure which form part of this report.

Annual Report on CSR activities is annexed herewith as ‘Annexure A”.

As stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report form part of this Annual Report.

The Company has complied with the mandatory provisions of Corporate Governance as prescribed in the Regulation 27 of the SEBI (LODR) Regulations, 2015 as applicable to the Company. A separate report on Corporate Governance and Auditors Certificate thereon are included as part of the Annual Report

All related party transactions that were entered during the financial year were on an arms length basis and were in the ordinary course of business and that the provision of Section 188 of the Companies Act, 2013 and the Rules made thereunder are not attracted. Thus, disclosure in form AOC-2 in terms of Section 134 of the Companies Act, 2013 is not required. Further there is no material related party transaction during the year under review with the Promoter, Directors or Key Managerial Personnel.

All related party transactions are placed before the Audit Committee as also the Board of Directors for approval. Omnibus approval was obtained on a yearly basis for transactions which are repetitive in nature. The details of the related party transaction are disclosed in Note no. 43 of the Financial Statements.

The Company in accordance with the provisions of the Companies Act, 2013 has adopted a Risk Management Policy. The Company has constituted a Risk Management Committee under the Companies Act, 2013 and Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This ensures identification and mitigation therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company.

The Companys system of financial and compliance controls with reference to the financial statements is embedded in the business process by which the Company pursues its objectives.

Management is responsible for establishing and maintaining adequate disclosure controls and procedures and adequate internal controls over financial reporting with respect to financial statements besides its effectiveness in the context of applicable regulations.

The Internal Auditor, the Audit Committee as well as the Board of Directors conduct from time to time an evaluation of the adequacy and effectiveness of the system of internal controls for financial reporting with respect to financial statements.

M/s Singhi & Co., Chartered Accountants, Kolkata (FRN: 302049E) are the Statutory Auditors of the Company to hold office till the conclusion of 38^th Annual General Meeting of the Company to be held in the year 2027.

The Report given by the Auditors on the financial statement of the company forms part of this Report and are self-explanatory. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

The Board of Directors under section 204(1) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Management Personnel) Rules, 2014 and Regulation 24A of SEBI Listing Regulations has appointed M/s K. Arun & Co. (Practicing Company Secretaries), Kolkata to conduct secretarial audit of the company for a period of five years from FY 2025-26 to FY 2029-30 subject to the approval of shareholders of the Company in the ensuing Annual General Meeting.

The Secretarial Audit report for the Financial Year ended 31^st March, 2025 is annexed herewith as “Annexure B” and forms part of this report. The report is self-explanatory and do not call for any comments except the secretarial auditor has reported about the fines which was paid during the year under review to Stock Exchanges for non-compliance of regulation 19 (1) & (2), 20 (2) & 20A and 17(1A) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 which was occurred due to different views of interpretation of relevant regulations by the stock exchanges and the company.

The Board on the recommendation of the Audit Committee has appointed M/s M.P. Turakhia & Associates (Practicing Cost Accountant), Indore as the Cost Auditor of the Company for the financial year 2025-26. In accordance with the provisions of the Act, read with the Companies (Cost Records and Audit) Rules, 2014, the Company has maintained cost records.

Pursuant to Section 92(3) read with Section 134(3)

(a) of the Companies Act, 2013 the Annual Return as on 31^st March, 2025 is available on the Companys website on https://associatedalcohols.com/investor- contact/

During the year under review, the Company has complied with the provisions of the applicable Secretarial Standards issued by the Institute of Company Secretaries of India as mandated under Section 118(10) of the Companies Act, 2013.

25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS / OUTGO

Information required under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Account) Rules, 2014 with respect to conservation of energy, technology absorption and foreign exchange earnings/ outgo is appended hereto as “Annexure C” and forms part of this report.

The particulars of Loans, Guarantees and Investment in pursuant to Section 186 of the Companies Act, 2013 are given in Note no. 50 to the financial statements.

Statement containing the salient features of Financial Statement of subsidiary i.e. Associated Alcohols & Breweries (Awadh) Limited pursuant to provisions of section 129(3) in form AOC-1 annexed herewith as “Annexure D” and forms part of this report.

The Company has neither associate companies nor joint ventures during the period under review.

During the year your company has not accepted any deposit from public under Section 73 of the Companies Act, 2013 and Companies (Acceptance of Deposit) Rules, 2014.

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

• Issue of equity shares with differential rights as to dividend, voting or otherwise.

• Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

• No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

• No instances of fraud reported by auditor under Section 143(12) of the Companies Act, 2013.

• There are no proceedings initiated/ pending against the Company under the Insolvency and Bankruptcy Code, 2016.

• During the financial year under review, there were no instances of one-time settlement with any bank or financial institution.

• The company did not undergo any change in the nature of its business during the financial year.

• Details of deposits covered under Chapter V of the Act.

The relation between the employees and the management has been cordial throughout the year under review and the Directors place on record their appreciation for the efficient services rendered by the employees at all levels.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto as “Annexure E” and forms part of this report.

The company has a Vigil Mechanism/Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The details of the policy is explained in the Corporate Governance Report and also posted on the website of the company.

32.INTERNAL COMPLAINTS COMMITTEE

The company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and there were no cases filed or reported pursuant to the said act during the year under review.

Pursuant to applicable provisions of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules”), all unpaid or unclaimed dividends are required to be transferred by the Company to the Investor Education and Protection Fund ("IEPF” or "Fund”) established by the Central Government, after completion of seven years from the date the dividend is transferred to unpaid/unclaimed account. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the Members for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority.

The Company had advertised a notice in the newspapers seeking action from the Members who have not claimed their dividends for seven consecutive years or more. Thereafter, the Company has transferred such unpaid or unclaimed dividends and corresponding shares to IEPF, in relation to FY 2014-15, FY 2015-16 & 2016-17.

Members/claimants whose shares or unclaimed dividend, have been transferred to the IEPF demat Account or the Fund, as the case may be, may claim the shares or apply for a refund by approaching the company or the Companys RTA for issue of Entitlement Letter along with all the required documents, after making an application to the IEPF Authority in Form IEPF - 5 (available on http://www. iepf.gov.in) along with requisite fee as decided by the IEPF Authority from time to time.

The Company will be transferring such unpaid or unclaimed dividends and corresponding shares to IEPF, in relation to FY 2017-18 within statutory timelines. Members are requested to ensure that they claim the dividends and shares referred above, before they are transferred to the said Fund.

The unpaid or unclaimed dividend amount of Rs 8,07,260/- related to financial year 2016-17 which was required to be transfer to IEPF has been transferred on 28^th October 2024.

No material changes and commitments which could affect your Companys financial position have occurred between the end of the financial year of your Company and date of this report.

The Board of Directors of the Company has approved and adopted the Dividend Distribution Policy in line with Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This Report is also uploaded on the website of the Company and is available on the Companys website on https://www.associatedalcohols.com/policies/.

The details about the prospects / outlook of your company are provided under the Management Discussion and Analysis forming part of this report.

Your Directors express their sincere appreciation for the co-operation and support received from shareholders, bankers, financial institutions, regulatory bodies, customers, suppliers, employees and other business constituents during the year under review.