Mount Shivalik Industries Ltd Directors Report.

Dear Members,

Your Directors have pleasure in submitting 26thAnnual Report of the Company together with Audited Statements of Accounts for the Financial Year/Period ended 31ST March, 2019.

1. FINANCIAL RESULTS.

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

(Amount in lacs)

Particulars For the Year ended 31.03.2019 (Rs.) For the Year ended 31.03.2018 (Rs.)
Net Sales 434.21 521.66
Add: Other Income 3.92 4.60
Total 438.13 526.26
Less: Total Expenditure 545.70 753.65
Operating Profit/ Loss (107.57) (227.39)
Less: Interest 158.25 792.16
Less Depreciation 211.77 231.57
Profit before exceptional item & tax (477.59) (1251.12)
Less: Exceptional Item - -
Profit/ Loss before tax (477.59) (1251.12)
Less: Provision for taxes - -
Current Tax - -
Deferred Tax -
Earlier Year: Deferred Tax - -
Earlier Year: Income Tax - -
Profit / (Loss) after tax (477.59) (1251.12)

2. DIVIDEND.

In view of accumulated losses of the Company, your Directors have not recommended any dividend this year also.

3. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION ANDPROTECTION FUND.

No-Unclaimed/unpaid-Dividend,is due for transfer to the Investor Education and Protection Fund established by the Central Government.

4. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS.

Brewery Business

During the year under review, the company did not operate the Brewery and the sale of Beer was nil.

Restaurant Business

The Companys two Restaurants at Amber Fort, Jaipur and another at HanwantMahal, Jodhpur are on leased premises.

During the year under review the Company has continued to appoint Mount Shivalik Hotels & Resorts Pvt Limited, as an ‘Operation and Management (O&M) contractor for operating and managing the Restaurant business according to the O & Magreement. The O & Magreement was approved by the members of the Company in its meeting held on 30.06.2017.

The salient features of this O & M Agreement are:

1) All working capital required will be inducted by the O & M Contractor,

2) The Annual Operating Loss if any shall be compensated by O & M Contractor to MSIL,

3) The Annual Operating profit if any shall be shared with MSIL – 25% to MSIL.

This agreement is beneficial to the Company as in 2017-18 Rs. 23.36 lakhs had been taken in income from the Restaurants, O & M operator had compensated for loss of Rs. 23.36 lakhs and in Financial Year 2018-19, the Company has received Rs. 13.78 lakhs from O&M Contractor as the part of operating profit.

The Company is constantly making efforts to improve sales and operational efficiency at the restaurants. Note No. 27 of the financial Statements for the period ended March 31st,2019 shows the segment reporting of Brewery and Hospitality Business of the Company.

5. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT.

The Honble National Company Law Tribunal, New Delhi Bench-III, New Delhi (‘NCLT), vide an order dated 12th June, 2018 has admitted the reference for initiation of Corporate Insolvency Resolution Process (‘CIRP) in respect of Mount Shivalik Industries Limited (the ‘Company) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (‘IBC).

By the said Order dated 12th June, 2018, Ms. Pratibha Khandelwal (IP Registration No.IBBI/IPA-002/IP-N00031/2016-17/10068) had been appointed as an Interim Resolution Professional (‘IRP) and in the First COC meeting dated 12.07.2018 she has been appointed as Resolution Professional, under the provisions of IBC.

It is also noted that according to the order passed by the Honble National Company Law Tribunal, New Delhi Bench – III, New Delhi (‘NCLT) dated 12th June 2018, a Moratorium has been declared under section 14 of the IBC.

In the COC Meeting dated June 04, 2019, COC members has approved the Resolution Plan of Kals Distilleries Pvt Ltd and after the approval the same Resolution Plan has been submitted to NCLT, Jaipur for the approval and the Approvalof the NCLT is awaited.

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

The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in "Annexure-I"and is attached to this report.

7. RESEARCH AND DEVELOPMENT.

Particulars regarding Research & Development as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in "Annexure-I" and is attached to this report.

8. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY.

The development and implementation of a Risk Management Policy after identifying the following elements of risks which in the opinion of the Board may threaten the very existence of the Company itself.

• Operational, business and market risks.

• Decrease in product prices

• Customer defaults

• Interest rates risk and inventory carrying risk.

9. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Since the Company doesnt fall under the companies required to constitute the Corporate Social Responsibility Committee as per Section 135 of the Companies Act, 2013. Therefore, the Company has not developed and implemented any Policy on Corporate Social Responsibility as the said provisions are not applicable.

10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013.

There were no loans, guarantees or investments made by the Company as specified under Section 186 of the Companies Act, 2013 during the year under review and Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial.

11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES.

All related party transactions are in the ordinary course of business and at arms length basis.The details of Related Party transactions of the Company are disclosed in the note no. 29of financial statement of the Company and in Form AOC 2 as annexed herewith marked as "Annexure II to this report.

12. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS.

i. Statutory Auditors

M/s R. K. RELAN & CO., Chartered Accountants, FRN N.002267N, the Statutory Auditors of the Company, were appointed as Statutory Auditors for a period of 5 years in the Extra Ordinary General Meeting held on 07th April, 2014 and are eligible for reappointment, at ensuing Annual General Meeting of the Company. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment.

The Notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments.

ii. Secretarial Auditor

The Board had appointed M/s. B. Chakraborty & Co., Company Secretaries Firm, to conduct Secretarial Audit for the financial year 2018-19. The Secretarial Audit Report for the financial year ended March 31st, 2019 is annexed herewith marked as "Annexure-III" to this Report.

The observations referred to in the Secretarial Auditors Report are self-explanatory except the followings:-Observation – Insufficient number of Independent directors in the Board Composition of the Company.

Managements Remark – the Management is unable to find suitable person for the designation of Independent Directors of the Company, due to uncertain financial conditions of the Company. We need to appoint at least two Independent Directors and a woman director as per the requirements of Companies Act 2013 and other applicable rules made there under.

13. COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES.

The Company has its Policy relating to appointment of Directors, payment of Managerial remuneration, Directors qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013.

14. EXTRACT OF ANNUAL RETURN

The extracts of Annual Return in MGT- 9 pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in "Annexure-IV" and is attached to this Report.

15. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

The Company had Five (5) Board Meetings during the financial year under review.

S. No. Date of Meeting Number of Directors Presents
1. 14.05.2018 03
2. 14.08.2018 03
3. 01.09.2018 02
4. 14.11.2018 02
5. 14.02.2019 02

16. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013 with respect to the Directors Responsibility Statement, it is hereby confirmed that:

i. in preparation of the annual accounts for the financial year 2018-19, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. the accounting policies selected and applied are consistent and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March, 2019and of the profit / (loss) of the company for year ended on that date;

iii. proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a going concern basis;

v. 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.

17. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company has no Subsidiary, Joint Venture or Associate Company.

18. DEPOSITS

The Company has neither accepted nor renewed any deposits during the year under review.

19. DIRECTORS

Shri Rajiv Bali, Director, who is liable to retire by rotation, retires at the ensuing Annual General Meeting and being eligible offer himself for re-appointment.

Shri Kailash Chandra Garg, Re-appoint as whole time Director for the period of the One Year from 01st October 2019 to 30th September 2020, at the ensuing AGM.

Shri Jag Mohan Malhotra has resigned from the office of Independent Director of the Company w.e.f. 05th June 2019.

Shri Baldev Dutt Bali ceased from the office of Director of the Company, due todeath, on 12th July 2019.

20. RISK MANAGEMENT POLICY

The risk management includes identifying types of risks and its assessment, risk handling and monitoring and reporting. The implementation of risk management policy has also been covered in the Management Discussion and Analysis which forms part of this report.

Risk evaluation and management is an ongoing process within the Organization. Your Company has comprehensive risk management policy which is periodically reviewed by the Committee and Board of the Company.

21. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM

The Company do not have Audit Committee due to insufficient number of Independent Directors.

22. DISCLOSURE UNDERSEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 AND PROVIDING VIGIL MECHANISM.

The Company has no women employees, so the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013 are not attracted on the Company.

23. SHARES

i. LISTING OF SECURITIES OF COMPANY

The Equity Shares of the Company continue to be listed at Bombay Stock Exchange Ltd. (BSE).

ii. DEMATERIALISATION

Trading of Equity Shares of the Company in dematerialized form is compulsory for all shareholders in terms of the Notification issued by the Securities and Exchange Board of India (SEBI).

Your Company has achieved higher level of dematerialization with87.61%of the total number of Equity Shares being held in the electronic mode with the two depositories.

24. PARTICULARS OF EMPLOYEES

The Company does not have any Key Managerial Personnel or employee, receiving remuneration of Rs. 5,00,000/- per month or Rs. 60,00,000/- per annum and therefore no particulars are required to be furnished under section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

No remuneration being paid to Directors of the Company during the year under review, except remuneration of Mr. K. C. Garg.

25. CORPORATE GOVERNANCE REPORT.

As listing agreement was replaced with SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 SEBI LODR.

Pursuant to provisions of Regulation 15(2) of SEBI (LODR), 2015 provisions of corporate governance are not applicable to listed Companies having paid up capital not exceeding Rs.10 Crore and net worth not exceeding Rs. 25 Crore as on the last date of the previous year. As paid up capital and net worth of the Company are not exceeded prescribed limit, provisions of Corporate Governance are not applicable to the Company.

A Certificate of the Board of Directors onNon submission of Corporate GovernanceReport is included in the Annual Report as "Annexure-V".

26. MANAGEMENT DISCUSSION ANALYSIS

Management Discussion and Analysis Report as required in Regulation 34 (2) (e) of SEBI Listing Regulations and Schedule V of the SEBI (Listing Obligations & disclosure Requirements) Regulations, 2015 with Stock Exchanges is given in "Annexure-VI" forming part of this report.

27. INTERNAL FINANCIAL CONTROL

Company has a proper and adequate system of internal control to oversee the Companys financial reporting process, disclosure of financial information, reviewing the performance of statutory and internal auditors with management, adequacy of internal audit function and internal control system, related party transactions etc., and for this purpose the Company has an Audit Committee.

Further, the Companys Internal Auditors verify the information concerning the reliability of the financial statements as well as the compliance with your Company policies to maintain accountability of all its assets and correctness of recorded transactions.

28. EVALUATION OF BOARD AND INDIVIDUAL DIRECTORS

Pursuant to the Section 134(3)(p) of the Companies Act, 2013 a formal evaluation must be made by the Board of its own performance and that of its committees and individual Directors.

During the year under review, The Board could not carry out a formal annual evaluation of its own performance, Board Committees and individual Directors pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations, due to insufficient number of Independent directors.

29. ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks to bankers, business associates, consultants, various Government Authorities and Stakeholders of the Company for their continued support extended to your Companys 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
Mount Shivalik Industries Ltd.
(Kailash Chandra Garg) (Sanjiv Bali)
Date: 05th September, 2019 Director Director
Place: Jaipur, Rajasthan DIN: 00227554 DIN: 00226806

Annexure-I

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE

Details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outflow.

Information pursuant to Section 134 (3) of the Companies Act, 2013, read with Rule 08 of the Companies (Accounts) Rules, 2014 for the financial year ended 31st March 2019.

a) Conservation of Energy

The manufacturing operations of the Company are conducted in the manner whereby optimum utilization and maximum saving of energy is achieved.

The Company is making use of treated effluents for gardening of the factory campus by drain system. The Company is using UF & RO technology to recycle treated effluent water. The Company is using CFL lights in the factory and office premises to reduce the consumption of electricity. The Company has also initiated number of measures to bring down the Boiler usage; hence it will help in reducing the energy consumption.

There are several other measures taken by the Company for conservation and optimum utilization of energy which are not quantitative and their impact on cost cannot be stated accurately.

b) Technology Absorption, Research and Development

It has always been endeavor of the Company to adopt latest developments in technology in order to minimize our environmental impact. Trying various new types of brewing aids to improve our quality is an ongoing and continuous process.

The Company has its own laboratory at the Brewery Plant, wherein regular research and development activities are carried out for the improvement and maintenance of the quality of its products. No specific capital expenditure on research and development was incurred during the financial year.

c) Foreign Exchange Earnings and Outgo

Foreign Exchange Earnings

Foreign exchange earning of the Company from exports during the financial year was nil. So far Company has not made any ‘tie-up for exports of its Brands.

Foreign Exchange Outgo Amount
VALUE OF IMPORTS CALCULATED ON C.I.F. BASIS:
-Purchase of Raw Materials Nil