Aurangabad Dist. Director Discussions


To,

The Members,

Aurangabad Distillery Limited

The Board of Directors has pleasure in presenting herewith their 23rd Annual Report together with the Audited Financial Statements of your Company for the year ended 31st March, 2023.

FINANCIAL SUMMARY

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

(Rs. in Lakhs)

Particulars

31st March 2023 31st March 2022
Revenue from Operation 11,872.15 10,101.28
Other Income 357.06 154.63

Total Revenue

12,229.21 10,255.91
Less: Expenses 9484.52 8,620.34

Operating Profit before Preliminary expenses, Depreciation & Taxation

2744.69 1,635.57
Less: Depreciation and Preliminary expenses written off 358.91 342.04

Profit Before Exceptional and Extraordinary Items and Tax

2,385.78 1,293.53
Less: Exceptional Items - -25.50

Profit Before Extraordinary Items and Tax

2,385.78 1,319.03
Less: Extraordinary Items - -
Add / (Less): Prior Period Incomes / (Expenses) - -
Add: Excess / (Short) Provision of Taxation for Previous Years - -

Profit Before Tax

2,385.78 1,319.03
Tax Expense:
Less: Current Tax 669.71 443.89
Deferred Tax 39.73 -26.98
Excess/Short Provision Written back/off 0.17 3.90

Profit (Loss) for the Year

1,676.17 898.22

REVIEW OF OPERATIONS AND FUTURE OUTLOOK

The Company generated revenue of Rs.12,229.21 Lakhs during the current year as against revenue of Rs. 10,255.91 Lakhs generated in the preceding year. The operations of the Company have resulted into post tax profit of Rs.1,676.17 Lakhs against post tax profit of Rs.898.22 Lakhs in the preceding year. The product portfolio of Company includes production of various types of Alcohol viz Rectified Spirit, Neutral Alcohol, Extra Neutral Alcohol and Denatured Spirit.

The National Policy on Biofuels – 2018, provides an indicative target of 20% ethanol blending under the Ethanol Blended Petrol (EBP) Programme by 2030. Currently petrol with 10% ethanol blend (E10) is being retailed by various Oil Marketing Companies (OMCs) in India, wherever it is available. The usage of rectified spirit as a raw material in ethanol production creates new opportunities for the distillery industry.

DIVIDEND

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.

TRANSFER TO RESERVES

The Board of Directors do not recommend to carry any amount to reserves. The Board of Directors proposes an amount of Rs. 1676.17 Lakhs to be retained in the statement of profit and loss account.

WEBLINK OF ANNUAL RETURN

The Company has its website; the link for Annual Return is as follows https://aurangabaddistillery.com/report.php

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met Eight (8) times during the year under review on 1st April 2022, 27th May 2022, 26th June 2022, 6th September 2022, 1st November 2022, 14th November 2022, 23rd January 2023 and 1st March 2023 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. Amardeepsingh Sethi 8 8
Mr. Dharampal Kalani 8 6
Mr. Karan Yadav 8 8
Mr. Tanaji Yadav 8 6
Mr. Kanyalal Kalani 8 2
Mrs. Jagjitkaur Sethi 8 6
Mr. Avinash Salunke 8 8
Mr. Prakash Sawant 8 3
Mr. Dilip Mutalik 8 4

COMMITTEES OF THE BOARD i) Audit Committee

Composition of Audit Committee of the Company as follows:

Name of the Member

Category
Mr. Prakash Sawant Chairman
[Independent Director]
Mr. Dilip Shriniwas Mutalik Member
[Independent Director]
Mr. Dharampal Kalani Member
[Managing Director]

ii) Nomination and Remuneration Committee

Composition of Nomination and Remuneration Committee as follows:

Name of the Member

Category

Mr. Avinash Salunke

Chairman [Independent Director]

Mr. Prakash Sawant

Member [Independent Director]

Mrs. Jagjitkaur Sethi

Member [Non-Executive Director]

iii) Stakeholders Relationship Committee

Composition of Stakeholders Relationship Committee as follows:

Name of the Member

Category

Mr. Avinash Salunke

Chairman [Independent Director]

Mr. Prakash Sawant

Member [Independent Director]

Mr. Dharampal Kalani

Member [Managing Director]

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with Section 152 of the Companies Act, 2013, Mr. Dharampal Kimatram Kalani and Mr. Tanaji Haribhau Yadav are retiring by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment. Mr. Avinash Salunkhe has re-appointed by the Board of Directors as an ‘Independent Director of the Company for a period of 1 (One) Year with effect from 13th November 2022 subject to approval of members of the Company at the ensuing

Annual General Meeting (AGM).

Further, during the year under review Ms. Ankita Gandhi has resigned as Company Secretary of the Company w.e.f. 31st October 2022 and Ms. Komal Shendge was appointed as Company Secretary of the Company w.e.f. 1st November 2022.

DECLARATION ON FROM INDEPENDENT DIRECTORS

All Independent Directors have given Declaration that; a. They meet the criteria for independence as laid down under Section 149(6) of the Companies Act, 2013, and Regulation 25(8) read with 16(1)(b) of the Listing Obligation and Disclosure Requirements, 2015. b. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act.

In the opinion of the Board, the Independent Directors fulfil the conditions specified in the Listing Regulations and are Independent of the Management. Further there has been no change in the circumstances affecting their status as Independent Directors of the Company.

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.

Overall, the Nomination and Remuneration Policy of the Company demonstrates the companys commitment to fostering a conducive work environment, recognizing and rewarding employee contributions, and ensuring the long-term success and growth of the organization while upholding principles of good corporate governance.

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 of the Company for the 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; and (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 A) STATUTORY AUDITORS

In the 22nd Annual General Meeting of the Company held on 30th September 2022, members of the Company have appointed M/s. HMA & Associates, Chartered Accountants, Pune (Firm Registration No.: 100537W) as a Statutory Auditors of the Company to hold office from the conclusion of the 22nd Annual General Meeting for a period of 5 (five) consecutive financial years i.e., from the conclusion of 22nd Annual General Meeting which was held for the financial year 2022 until the conclusion of the 27th Annual General Meeting to be held for the financial year 2027-28.

In response to Auditors Report, Para wise explanation by the management is given below: i. Point No. 2 (b) of CARO Report ‘Inventory - Quarterly statements are filed with such Banks which are not in agreement with the books of account, which is as per the explanations given by the company in Note No. 39 of the Financial Statements of the company.

The details of the differences are as under:

(Rs. in Lakhs)

Periodicity

As submitted to bank As per books of accounts Difference
Q-1 7,549.59 7,605.97 -56.38
Q-2 8,434.24 8,330.25 103.99
Q-3 5826.71 6,285.62 -458.91
Q-4 6,105.04 5,990.83 114.21

Management Reply:- The difference is due to change in method of valuation of inventories as per AS-2 from FIFO method to Weighted Average method during the year. The change in the accounting policy was implemented due to the rate variations in purchase of primary raw material (Molasses) arising due to its seasonal nature of production. Such change in accounting policy has decreased the valuation on inventories by Rs. 188.37 lakhs as on 31st March 2023.

B) 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 2022-23.

The Secretarial Auditors have given their report, which is annexed hereto as "Annexure I".

Further, as per recommendation of the Audit Committee, the Board of Director has re-appointed M/s. Prajot Tungare & Associates, Practicing Company Secretaries as Secretarial Auditors of your Company in their meeting held on 27th May 2023 for the Financial Year 2023-24.

The Secretarial Auditors Comment/observation –i. There was some delay in filing e forms with the Ministry of Corporate Affairs; Management Reply:- The delay was due to inadvertence. The Company has taken sufficient precautions so as not to repeat such instance in future. Further, the said delays were unintentional and have not affected the interests of the stakeholders, neither have benefited any persons.

C) COST AUDITORS

The Company is required to have the audit of its cost records conducted by a Cost Accountant in Practice. In this connection, the Audit Committee has recommended to the Board of Directors and the Board of Directors had approved the appointment of M/s. Dargad & Associates, Cost Accountants, as Cost Auditors of the Company to conduct the Cost Audit functions for the Financial Year 2022-23.

Further, as per recommendation of the Audit Committee, the Board of Director has re-appointed M/s. Dargad

& Associates, Cost Accountants, as Cost Auditors of the Company to conduct the Cost Audit functions for the Financial Year 2023-24 subject to rectification of remuneration of the cost auditor in ensuring Annual General Meeting.

The Company has maintained cost records as stated in the provisions of maintenance of Cost Records pursuant to Section 148 of the Companies Act, 2013 read with Companies (Cost Record & Audit) Amendment Rules 2014.

D) INTERNAL AUDITOR

The Board of Directors had appointed M/s. S. R. Bakare & Co., Chartered Accountants as the Internal Auditor of the Company pursuant to Section 138 and other applicable provisions, if any of the Companies Act, 2013 for the financial year 2022-23.

As per recommendation of the Audit Committee, the Board of Director has re-appointed M/s. S. R. Bakare & Co., Chartered Accountants as an Internal Auditor of the Company for the Financial Year 2023-24.

COMPLIANCE OF THE SECREATARIAL STANDARDS ISSUED BY ICSI

The Board confirms that, during the period under review, the Company has complied with the applicable Secretarial Standards to the extend applicable to the Company issued by the Institute of Company Secretaries of India (ICSI) as amended from time to time.

DETAILS IN RESPECT OF FRAUDS REPORTED BY

AUDITORS UNDER SUB-SECTION (12) OF SECTION 143 OF

THE COMPANIES ACT, 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

There were no frauds reported by Auditors under Sub-Section (12) of Section 143 of the Companies Act, 2013 other than those which are reportable to the Central Government.

SHARE CAPITAL

The paid-up share capital of the Company as on 31st March 2023 was Rs. 8.20 Crores. During the year, the Company has not issued any securities.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Particulars of loans given, investments made, guarantees given and securities provided as on 31st March 2023 are mentioned in the table herein-below:

(Rs. in Lakhs)

Sr. No.

Particulars

Amount

1.

Loans
i) Loans given 1,500.00

2.

Details of Investment

i) Investment in The Saraswat Co-op Bank Ltd

0.26
ii) Investment in Other -

3.

Details of Guarantees / Securities Provided -

Total

1500.26

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 II" to this report.

MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate till the date of this report. Except that, the Company has received order from Office of Commissioner, State Excise, State of Maharashtra, Mumbai on 16th August 2023 for payment of duty. The Order has been received by the Company on the grounds that the Company has released 34,58,175 liters of pure alcohol for the manufacturing of liquor. Therefore, the Company shall deposit an amount of Rs.1,435.14 million within 15 days with the Government. If the said amount is not paid within the prescribed period, further legal action will be taken by the Collector, Pune, as per the provisions of Land Revenue Act to recover the said amount. Further, Form-I license no.6 Unit of the Company has cancelled. The said Order has effective from the 21st August 2023.

However, the Company has filed application for the stay order in the appropriate court/authority.

Management recognizes that the Companys future operations are unlikely to be significantly impacted by COVID-19 due to widespread vaccination efforts and the Companys prior experience with the pandemic. Despite ongoing monitoring of future economic conditions, the Company maintains a positive outlook for the upcoming financial year.

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

The particulars prescribed under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, are set out in Annexure III to this Report.

DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

The Company has a robust risk management framework that includes a well-defined risk governance structure and established processes. It proactively identifies and assesses all strategic, operational, and financial risks by analyzing the most up-to-date risk information from both internal and external sources. This valuable insight is then utilized to plan and implement risk mitigation activities effectively.

INTERNAL FINANCIAL CONTROLS

The Company has implemented comprehensive procedures to ensure robust internal financial controls. It consistently adheres to industry best practices to safeguard its assets, prevent and detect frauds and errors, maintain the accuracy and completeness of accounting records, and ensure the 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 of Section 73 of the Companies Act, 2013.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS IMPACTING THE GOING CONCERN STATUS AND COMPANYS

OPERATIONS IN FUTURE PURSUANT TO RULE 8(5)(VII) OF COMPANIES (ACCOUNTS) RULES, 2014

The Company has not received any significant or material order passed by regulators or courts or tribunals impacting the Companys going concern status or the Companys operations in future except below: The Company has received order from Office of Commissioner, State Excise, State of Maharashtra, Mumbai on 16th August 2023 for payment of duty.

The Order has been received by the Company on the grounds that the Company has released 34,58,175 liters of pure alcohol for the manufacturing of liquor. Therefore, the Company shall deposit an amount of Rs.1435.14 million within 15 days with the Government. If the said amount is not paid within the prescribed period, further legal action will be taken by the Collector, Pune, as per the provisions of Land Revenue Act to recover the said amount. Further, Form-I license no.6 Unit of the Company has cancelled. The said Order has effective from the 21st August 2023.

However, the Company has filed application for the stay order in the appropriate court/authority

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-IV" to this report.

PERFORMANCE EVALUATION

The Company has developed a comprehensive policy for evaluating the performance of the Board, Committees, and individual Directors, including Independent Directors and Executive Directors. This policy encompasses various criteria for assessing the performance of Non-executive Directors and Executive Directors. The evaluation process takes into account factors such as Directors attendance at Board and Committee Meetings, understanding of the Companys business, effective communication among Board members, active participation, domain knowledge, adherence to the code of conduct, vision and strategy, and benchmarks set by global peers. Importantly, this evaluation process ensures compliance with all relevant 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 - V" to this report.

VIGIL MECHANISM

The Company has a vigil mechanism named as Whistle Blower Policy of the Company, an avenue to raise concern and access in good faith the Chairman of the Audit Committee which provide for adequate safeguard against victimization of person. The Policy on Whistle Blower Policy is available on the website of the Company under the weblink www.aurangabaddistillery. com.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF

WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

As per requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (SHWWA), the Company has designed and implemented a comprehensive policy and framework to promote a safe and secure work environment, where every person at the work place is treated with dignity and respect. Moreover, the Companys policy is inclusive and gender neutral. Further, the complaint redressal mechanism detailed in the policy ensures complete anonymity and confidentiality to the parties.

Internal Complaints Committee (ICC) have been constituted as per the requirement with the highest governance norms. During the year under review, there was no complaints received pursuant to the aforesaid Act.

Amardeepsingh Sethi
Chairman & Whole time Director
DIN: 00097644
Date: 4th September 2023

Place: Chhatrapati Sambhajinagar