Aurangabad Distillery Ltd Directors Report.

To

The Members

Aurangabad Distillery Limited

The Board of Directors has pleasure in presenting herewith their 20th Annual Report together with the Audited Financial Statements of your Company for the year ended 31st March, 2020.

FINANCIAL RESULTS:

The Companys financial performance for the year under review along with previous years figures is given hereunder:

(Amount in Rs.)
Particulars 31st March 2020 31st March 2019
Total Revenue 56,42,21,146 55,85,76,197
Less: Total expenses 50,66,77,911 47,60,96,256
Profit Before Exceptional And Extraordinary Items And Tax 5,75,43,235 8,24,79,941
Exceptional Items - -
Profit Before Extraordinary Items And Tax 5,75,43,235 8,24,79,941
Extraordinary Items - -
Add / (Less) : Prior Period Incomes / (Expenses) - -
Add : Excess / (Short) Provision of Taxation For Previous Years - -
Profit Before Tax 5,75,43,235 8,24,79,941
Tax Expense:
Less : Current Tax 96,05,200 1,76,00,000
Earlier Year Tax 1,44,003 7,34,069
Deferred Tax 1,29,27,048 2,15,12,359
Mat Credit Entitlements (62,51,774) (2,21,45,437)
Profit (Loss) For The Year 4,11,18,758 6,47,78,950

REVIEW OF OPERATIONS AND DIVIDEND

The Company generated revenue of Rs. 56,42,21,146/- during the current year as against revenue of Rs. 55,85,76,197/- generated in the preceding year. The operations of the Company have resulted into post tax profit of Rs. 4,11,18,758/- against post tax profit of Rs. 6,47,78,950/- in the preceding year. Owing to the growing business needs and the necessity to plough back the profits in the business, your Directors do not recommend any dividend for the year.

COVID-19 IMPACT

Global disruption caused by CoVID-19 combined with a total lockdown has resulted in significant economic contraction in India. However, we got the instructions from the State Government for the production of alcohol based sanitizer, as this item is included in the essential commodities by the Central Government. Hence, we were manufacturing sanitizer as per the guidelines issued by the Central and State Government.

Considering the opportunities, threats and strengths management continuously works for increasing the productivity of the Company.

TRANSFER TO RESERVES

The Board of Directors do not recommend to carry any amount to reserves.

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-I" and is attached to this Report.

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met 7 times during the year under review on 30th May, 2019, 21st August, 2019, 28th September 2019, 13th November, 2019, 21st November, 2019, 6th March, 2020 and 20th March 2020 respectively. Notice of meetings with agenda along with necessary details was sent to the Directors in time.

Further following are the details with respect to Board meeting attendance by each Director.

Name of Director Board Meetings held during the tenure of Director Board Meeting Attended
Mr. Dharampal Kalani 7 7
Mr. Amardeepsingh Sethi 7 6
Mr. Kanyalal Kalani 7 6
Mrs. Jagjitkaur Sethi 7 5
Mr. Karan Yadav 7 7
Mr. Ashokchandra Dhish 7 6
Mr. Prakash Sawant 7 7
Mr. Tanaji Yadav 7 7
Mr. Avinash Salunke 7 7

COMMITTEES OF THE BOARD:

i. Audit Committee

Composition of Audit Committee of the Company is as follows:

Name of the Member Category
Mr. Avinash Salunke Chairman & Independent Director
Mr. Prakash Sawant Independent Director
Mr. Dharampal Kalani Managing Director

ii. Nomination and Remuneration Committee

Composition of Nomination and Remuneration Committee is as follows:

Name of the Member Category
Mr. Avinash Salunke Chairman & Independent Director
Mr. Prakash Sawant Independent Director
Mrs. Jagjitkaur Sethi Non-executive Director

iii. Stakeholders Relationship Committee

Composition of Stakeholders Relationship Committee is as follows:

Name of the Member Category
Mr. Avinash Salunke Chairman & Independent Director
Mr. Prakash Sawant Independent Director
Mr. Dharampal Kalani Managing Director

iv. Corporate Social Responsibility Committee

Composition of Corporate Social Responsibility Committee is as follows:

Name of the Member Category
Mr. Dharampal Kalani Chairman & Managing Director
Mr. Avinash Salunke Independent Director
Mr. Prakash Sawant Independent Director

Note: Audit Committee, Nomination & Remuneration Committee and Stakeholders Relationship Committee are re-constituted by passing circular resolution dated 1/h August, 2020.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with Section 152 of the Companies Act, 2013, Mr. Dharampal Kalani and Mr. Tanaji Yadav are retiring by rotation at this Annual General Meeting and being eligible has offered themselves for reappointment.

Mr. Dilip Mutalik was appointed as an Additional Independent Director by the Board of Directors of the Company in their Board Meeting held on 24th August 2020 on recommendation of the Nomination & Remuneration Committee of the Board.

With deep regret, we report the sad demise of our Independent Director, Mr. Ashokchandra Dhish, on July 19 2020. Your Directors place on record their highest gratitude and appreciation for the guidance given by Mr. Ashokchandra Dhish to the Board during his tenure as a Director.

All Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Act.

NOMINATION AND REMUNERATION POLICY

The Nomination and Remuneration Policy is designed to attract, motivate, improve productivity and retain manpower, by creating a congenial work environment, encouraging initiatives, personal growth and team work, and inculcating a sense of belonging and involvement, besides offering appropriate remuneration packages and superannuation benefits. The policy reflects the Companys objectives for good corporate governance as well as sustained long term value creation for shareholders.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors of your Company, to the best of their knowledge and ability, confirm that:

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

(b) the Directors have 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 & loss of the Company for that period;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) the Directors have laid down proper internal financial controls and system which are adequate and are operating effectively.

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

AUDITORS &THEIR REPORTS

STATUTORY AUDITORS

Pursuant to the provisions of Section 139, 142 and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or reenactment thereof, for the time being in force) and in pursuance to resolution passed by the members of the Company at the Annual General Meeting dated September 28, 2019 for appointment of M/s. Kale & Associates, Chartered Accountants, (FRN: 114144W) as statutory auditor of the Company for a block of subsequent five financial years ending 31st March, 2024.

The Statutory Auditors Report does not contain any qualification, reservation or adverse remark.

SECRETARIAL AUDITORS

The Board of Directors had appointed M/s. Prajot Tungare & Associates, Practicing Company Secretaries, as the Secretarial Auditors of your Company to issue a Secretarial Audit Report pursuant to Section 204 of the Companies Act, 2013 for the financial year 2019-20.

Accordingly, the Secretarial Auditors have given their report, which is annexed hereto as "Annexure II".

Auditor comments/ observation:

i. There was some delay in filing Form DPT - 3 (Reporting of exempted deposit - One time return);

Management Reply: The management is aware about the compliance of reporting of Exempt deposit but due to technical problem in MCA website, it was delayed.

ii. The Company has failed to file Form MSME - I for the half year ended 30th September, 2019.

Management reply: The delay was due to inadvertence. The company has taken sufficient precautions not to repeat such instance in future.

COST AUDITORS

The Company is required to have the audit of its cost records conducted by a Cost Accountant in Practice. In this connection, as per recommendation of the Audit Committee the Board of Directors has approved the appointment of M/s. Dargad and Associates as Cost Auditors of the Company to conduct the Cost Audit Functions for the financial year 2020-21.

As required under the provisions of Companies Act, 2013, a resolution seeking members approval for the remuneration payable to the Cost Auditors forms part of the Notice convening the Annual General Meeting of the Company.

SHARE CAPITAL

The paid up share capital of the Company as on 31st March, 2020 was Rs. 8.20 Crores. During the year under review the Company has not issued any types shares.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

There were no loans, guarantees or investments made by the Company as referred under the under the provisions of the section 186 of the Companies Act, 2013 during the year, and hence the said provision are not applicable to the Company.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

The transactions entered by the Company with related parties were in ordinary course of business and at arms length basis. The particulars of transactions entered with related parties are annexed herewith as "Annexure III" to this report.

MATERIAL CHANGES AND COMMITMENT

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which financial statements relate and on the date of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The Particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in "Annexure IV" to this report.

DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

The Company has a robust risk management framework comprising risk governance structure and defined risk management processes. The Company identifies all strategic, operational and financial risks that the Company faces, by assessing and analyzing the latest trends in risk information available internally and externally and uses the same to plan for risk mitigation activities.

INTERNAL FINANCIAL CONTROLS

The Company has adopted adequate procedures for ensuring the internal financial controls. The Company adheres to best practices for safeguarding its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable and accurate financial information.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES AND THEIR POSITION & FINANCIAL PERFORMANCE

The Company does not have any Subsidiary, Joint venture or Associate Company.

DEPOSITS

Your Company has not accepted any deposits within the meaning as provided in the Companies Act, 2013. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the courts / regulators or tribunals impacting the going concern status and companies operations in future.

MANAGEMENTS DISCUSSION AND ANALYSIS REPORT

Managements Discussion and Analysis Report for the year under review, as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is presented in "Annexure V" to this report.

PERFORMANCE EVALUATION

The Company has devised a Policy for performance evaluation of the Board, Committees and other individual Directors (including Independent Directors) which includes criteria for performance evaluation of the Nonexecutive Directors and Executive Directors. The evaluation process inter alia considers attendance of Directors at Board and committee meetings, acquaintance with business, communicating inter-se board members, effective participation, domain knowledge, compliance with code of conduct, vision and strategy, benchmarks established by global peers, etc., which is in compliance with applicable laws, regulations and guidelines.

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out performance evaluation of its own performance and that of its committees and individual Directors.

PARTICULARS OF EMPLOYEES

Disclosure as per Section 197 (12) of the Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as "Annexure VI" to this report.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

In this regard, Internal Complaints Committee has been set up to redress complaints. During the year under review, there were no complaints received pursuant to the aforesaid Act.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVE

Pursuant to the provisions of Section 135 of the Companies Act, 2013 and Rule 5 of the Companies (CSR Policy) Rules, 2014 the Board of Directors of your Company has already constituted a Corporate Social Responsibility (CSR) Committee.

Following are the present members of the CSR Committee.

Name of the Member Category
Mr. Dharampal Kalani Chairman & Managing Director
Mr. Avinash Salunke Independent Director
Mr. Prakash Sawant Independent Director

The CSR Committee met 2 (Two) times during the year i.e. on 21st August, 2019 and 28th September, 2019. All the Members of the CSR Committee were present at both the Meetings.

The CSR Committee has formulated the CSR Policy and has recommended the activities to be undertaken by the Company as specified under Schedule VII of the Companies Act, 2013.

Pursuant to Rule 8 of the Companies (CSR Policy) Rules, 2014 the Report on CSR Activities for the financial year 2019-20 is enclosed as "Annexure VII".

ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companies activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company.

For and on behalf of The Board of Directors

Aurangabad Distillery Limited

Amardeepsingh Sethi

Chairman & Wholetime Director

DIN:00097644

Date: 24th August 2020

Place: Aurangabad.