Dear Members,
Your Directors have pleasure in presenting the 29 Annual Report
(Report) of your Company and the audited financial statements for the year ended March
31, 2022.
FINANCIAL SNAPSHOT
The Summary of Financial Performance of the Company for the year
2021-22 is as under:
(INR in Lakhs)
| Particulars |
2021-22 |
2020-21 |
| Gross sales |
19,164 |
15,794 |
| Add: Other operating revenue |
2,006 |
946 |
| Add: Other income |
301 |
301 |
| Total Income |
21,471 |
17,041 |
| Less: Cost of goods sold |
16,028 |
13,309 |
| Less: Other costs |
5,816 |
5,598 |
| Earnings before government grant,
depreciation, interest and taxes |
(373) |
(1,866) |
| Add: Government grant |
- |
(266) |
| Earnings before depreciation, interest and taxes |
(373) |
(2,131) |
| Less: Interest costs |
3,386 |
3,212 |
| Less: Depreciation |
3,437 |
3,314 |
| Earnings before taxes |
(7,196) |
(8,657) |
| Income tax expenses |
- |
- |
| Other comprehensive income (Net of tax) |
6 |
(80) |
| Profit / (loss) available for appropriation |
(7,190) |
(8,737) |
Performance of the Company
The Company has achieved a gross sales of Rs. 19,164 Lakhs for the
financial year ended March 31, 2022 against the gross sales of Rs. 15,794 Lakhs for the
financial year ended March 31, 2021. The Company has reported a loss of Rs. 7,196 Lakhs
before tax due to intermittent breakdowns in plant machineries, external challenges
leading to frequent shutdowns and delay in stabilization of operations
Boards responses to observations, qualifications and adverse remarks
in auditors report
The statutory and secretarial auditors have given unqualified opinion
on the financial statements and in the secretarial audit report for the year ended March
31, 2022 respectively and hence this is not applicable.
Board Meetings
During the year under review, four Board Meetings were held. The
details of the same are covered in the Corporate Governance Report.
State of Companys Affairs
Except to the extent as stated under material changes and commitments,
there have been no significant or material orders passed during the year by the regulators
or Courts or Tribunals impacting the going concern status and the companys operations in
future.
The net worth of the Company has eroded and the current liabilities
exceed the current assets as at the year-end. However, the Management and the Board of
Directors have reviewed the cash flow forecast for the next twelve months and based on the
letter of financial support obtained from United Spirits Limited, the holding company,
have concluded that there is no material uncertainty on the ability of the Company to
continue as a going concern.
Material changes and commitments
As per directions issued by Maharashtra Pollution Control Board (MPCB)
on November 26, 2019, the Company had submitted High Density Polyethylene (HDPE) Pond
completion report on May 17, 2021 and the Company received the consent to operate for a
period of 5 years with effect from September 01, 2019 to August 31, 2024.
A suo-moto case was initiated before the Office Of The Chairman Cum VII
Additional District And Sessions Judge, Mandal Legal Services Committee, Nirmal against
the Company based on the article published in the local newspaper. In response, the
Company had also filed its affidavit. As per the last date of hearing viz., November 28,
2019 and the reply and oral submissions filed by the Company, the Court has adjourned the
case without fixing a date.
The water board has substantially increased the tariff on water and
changed the jurisdiction from Revenue department to Maharashtra Water Resources Regulatory
Authority (MWRRA) thereby giving the control of supply and collection of charges towards
consumption to Water Resources Department (WRD). As the hike in water charges was having a
substantial impact, the Company had approached High Court of Bombay at Aurangabad Bench to
avoid any hostile actions. The Company had also obtained a stay order in its favour from
the Honble High Court but subsequently withdrew the High Court petition and
approached the Primary Dispute Regulation Officer (PDRO).
The Company questioned the increase in levy of water tariff and
submitted that the existing water source is a partly assured water supply and water is
consumed in the distillery as a process water. On April 27, 2021, PDRO upheld the tariff
levied by WRD against which the Company filed an appeal before MWRRA under the provisions
of Maharashtra Water Resources Regulatory Authority Act, 2005 on June 7, 2021. The matter
is pending before MWRRA for disposal.
The Management Discussion and Analysis Report read with the report on
Risk Management contains impact on the business due to regulatory changes.
DEPOSITORY SYSTEM
The trading in the equity shares of your Company is under compulsory
dematerialization mode. As on March 31,
2022, equity shares representing 98.29% of the equity share capital are
in dematerialization form. As the depository system offers numerous advantages, members
are requested to take advantage of the same and avail of the facility of dematerialization
of the Companys shares.
Members may please note that effective from 1 April 2019, shares of the
listed entity can be traded only in dematerialized mode pursuant to Securities and
Exchange Board of India (SEBI) notification SEBI/LAD-NRO/GN/2018/24 published on 08 June
2018.
Change in nature of business, if any
The details of change in nature of business, if any, are provided under
Management Discussion and Analysis Report and the Report on Risk Management forming part
of this Report.
Dividend
In view of the accumulated losses of the preceding years, your
directors could not recommend any dividend on equity shares of the Company.
Transfer to reserve
During the year under review, there was no amount transferred to
reserves of the Company.
Capital
The authorized share capital of your Company remains unchanged at
2,00,00,000 equity shares of Rs. 10/- each. The issued, subscribed and paid-up capital of
the Company is 1,33,88,200 equity shares of Rs. 10/- each aggerating Rs.13,38,82,000.
There was no change in the issued, subscribed and paid-up capital of the Company during
the year under review.
Appointment/Resignation of Directors and Key Managerial Personnel
(i) Re-appointment of Mr. Sanjeev Gupta
As per the provisions of the Companies Act, 2013, Mr. Sanjeev Gupta
(Mr. Gupta) retires by rotation at the ensuing annual general meeting (AGM) and being
eligible, offered himself for re-appointment. Members may please note that Mr. Gupta, who
was appointed as a director at the 27 AGM held on September 29, 2020. Mr. Gupta is not
debarred from holding the directorship under any statutory regulations. Details about Mr.
Gupta is provided in the Notice of the 29 annual general meeting of the Company.
(ii) Resignation of Mr. Gopal Kothari as Director
The Board at its meeting held on October 22, 2021 noted the resignation
of Mr. Gopal Kothari (Mr. Kothari) as a non-executive director of the Company with effect
from October 22, 2021.
(iii) Appointment of Mr. Nimish Shah as additional director
The Board through circular resolution passed on December 31, 2021,
appointed Mr. Nimish Shah as additional director of the Board. It is proposed to appoint
him as director subject to approval of shareholders in ensuing AGM
(iv) Appointment of Mr. Gopal Kothari as Chief Financial Officer
The Board at its meeting held on October 22, 2021 appointed Mr. Gopal
Kothari as Chief Financial Officer of the Company with effect from October 22, 2021
(v) Resignation of Mr. B L Akshara as Company Secretary &
appointment of Mr. J Swaminathan as
Company Secretary
The Board at its meeting held on October 22, 2021 appointed Mr. J
Swaminathan as Company Secretary with effect from October 23, 2021 in the place of Mr. B L
Akshara, who resigned as a Company Secretary effective end of day October 22, 2021.
(vi) Resignation of Mr. Sanjoy Sarkar as Chief Financial Officer
The Board at its meeting held on October 22, 2021 noted the resignation
of Mr. Sanjoy Sarkar, Chief Financial Officer of the Company with effect from October 22,
2021.
Brief profile of the directors being re-appointed/appointed, are
provided in the Notice convening this Annual General Meeting (AGM) .
As per the declarations received, no Director of the Company is
disqualified to be appointed as a Director of any public limited company in terms of
Section 164(2) of the Companies Act, 2013.
Independent Directors
Your Company did not appoint any new Independent Director in the
financial year 2021-22. Criteria for selection/appointment or reappointment of Independent
Directors include skills, expertise of the Director, qualifications, experience and domain
knowledge. The required skills of Independent Directors are leadership, managerial
experience, diversity, risk management and corporate governance. All our Independent
Directors viz., Mr. R Krishnamurthy and Ms. Srivathsala K N possess the aforesaid skills.
Declaration from Independent Directors
Independent Directors have given a declaration pursuant to sub-section
(6) of Section 149 of the Companies Act, 2013. In the opinion of the Board, Independent
Directors fulfill the conditions specified in Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI (LODR)
Regulations) and are independent of the management.
Number of meetings of the Board
The details of the Board Meetings and other Committee Meetings held
during the financial year 2021-22 are stated in the Corporate Governance Report which is
forming part of this Report.
Board Committees
The Company has the following committees of the Board:
Audit Committee and Risk Management Committee
Nomination and Remuneration Committee
Stakeholders Relationship Committee
Corporate Social Responsibility Committee
The composition of each of the above Committees, their respective roles
and responsibilities are provided in the
Corporate Governance Report which forms part of this Report.
Policies
The Company has adopted all policies as required to be maintained by
the Company under the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations
and the same are uploaded on the website of the Company wherever required and the salient
features of the policies are detailed in Corporate Governance Report.
Recommendations of the audit committee and other committees
All the recommendations of the Audit Committee and of the other
Committees were accepted by the Board.
Details of remuneration to directors
As required under section 197(12) of the Companies Act, 2013
information relating to remuneration paid to Directors during the financial year 2021-22
is provided in the Corporate Governance Report. The Company has also prepared a draft
annual return in e-form MGT-7 for FY 2021-22 and uploaded the same on Company s
website at http;//pioneerdistilleries.com/downloads.php . Members may also note that the
annual return uploaded on the website is a draft and the final annual return will be
uploaded after the same is filed with the Ministry of Corporate Affairs (‘MCA).
As stated in the Corporate Governance Report, sitting fees is paid to
Independent Directors for attending Board/Committee meetings. They are also entitled to
reimbursement of actual travel expenses, boarding and lodging, conveyance and incidental
expenses incurred in attending such meetings.
Board evaluation criteria
Pursuant to the provisions of the Companies Act, 2013 and regulation 17
of the SEBI (LODR) Regulations, the Board has carried out an annual performance
evaluation, based on parameters which, inter alia, include performance of the Board
on deciding strategy, rating the composition & mix of Board members, discharging of
their duties and handling critical issues etc. The parameters for the performance
evaluation of the Directors include contribution made at the Board meeting, attendance,
instances of sharing information on best practices applied in other industries, domain
knowledge, vision, strategy and engagement with senior management, etc.
The Independent Directors at their separate meetings, review the
performance of non-independent directors and the Board as a whole. Chairperson of the
Company after taking into account the views of Executive Director and non-executive
directors, reviews the quality, quantity and timeliness of flow of information between the
management and the Board for the Board to effectively and reasonably perform their duties.
Based on the outcome of the performance evaluation exercise, areas have been identified
for the Board to engage itself with and the same would be acted upon. The details of the
evaluation process are set out in the Corporate Governance Report which forms part of this
Report.
Vigil Mechanism
At PDL, we have an established whistle-blower mechanism known as
SpeakUp, which is being independently operated by a third-party agency. We encourage our
employees or representatives acting on behalf of the Company, to raise their compliance
concerns through this mechanism, apart from other internal reporting channels viz. Line
Manager, HR Business Partner, Legal Business Partner and Business Integrity partner.
The SpeakUp channel is available at
https://pioneerdistilleries.com/speakup.php with services available in English and 5 other
regional languages, and compliance concerns can be raised by any aggrieved person through
web page or toll-free number. During the year, we have introduced QR code to facilitate
the access to SpeakUp channel.
The quality of investigation reports and remedial actions are reviewed
and monitored by the Global Business Integrity team and Diageo India Business Integrity
team. A structured Breach Management Standard is in place which is in line with the Global
Standard, for timely and conclusive resolution of compliance concerns raised through the
whistle blower mechanism.
During the year, 2 cases have been reported through Speak-up channel
and the same has been investigated and resolved with appropriate actions.
This vigil mechanism has been established to provide adequate
safeguards against the victimization of employees, who avail this mechanism for reporting
complaints and grievances in good faith and without fear of being punished for doing so.
Access to the Chairman of the Audit and Risk Management Committee is provided as required
under the Companies Act, 2013 and the SEBI (LODR) Regulations.
Related Party Transactions
The Company has formulated a policy on dealing with Related Party
Transactions (RPTs) which has been reviewed by the Audit and Risk Management Committee at
regular intervals. This policy is available on the Companys website at
http://www.pioneerdistilleries.com/policies.php. All related party transactions that were
entered into during the financial year, were at arms length basis and were in the
ordinary course of business. Form AOC-2 pursuant to Section 134(3)(h) of the Companies
Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out in the Annexure-3
to this Report. In accordance with Ind AS 24, the RPTs are disclosed under notes
forming part of the Financial Statements.
Meeting amongst Independent Directors
Schedule IV of the Companies Act, 2013, SEBI (LODR) Regulations and
Secretarial Standard - 1 on Meetings of the Board of Directors mandates that the
Independent Directors of the Company hold at least one meeting in a year, without the
attendance of Non-Independent Directors. The Independent Directors met amongst themselves
without the presence of any other persons on May 07, 2021, July 20, 2021 and October 22,
2021.
Auditors
I) Financial audit
M/s. Price Waterhouse & Co., Chartered Accountants LLP (FRN
304026E/E-300009), were appointed as Statutory Auditors of your Company in the 24 Annual
General Meeting (AGM) held on 28 July 2017 for a period of 5 years and their term comes to
end at the conclusion of 29 AGM of the Company. The Audit Committee at their meeting held
on 19 May 2022, recommended the re-appointment of M/s Price Waterhouse & Co Chartered
Accountants LLP, (FRN 304026E/E-300009) (PW) who have given their consent and
willingness to be re-appointed as Auditors of your Company. PW, being one of the reputed
international audit firm and given their expertise in the field of audit, the Board of
Directors at their meeting held on 19 May 2022 approved the recommendation of the Audit
Committee and proposed to re-appoint PW as Auditors of your Company for a period of 5
years, from the conclusion of the ensuing 29 AGM till the conclusion of the 34 AGM of the
Company subject to the approval of the members of the Company at the ensuing AGM.
(ii) Secretarial Audit
Pursuant to section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, a Secretarial Audit
has been carried out by Mr. Sudhir V Hulyalkar, Practicing Company Secretary (FCS: 6040
and CP No. 6137) and his report is annexed as Annexure 2.
Reporting of fraud by Auditors
During the year under review, neither the statutory auditors nor the
secretarial auditor have reported to the Audit Committee or the Board, under section
143(12) of the Companies Act, 2013, any instances of fraud committed against the Company
by its officers or employees, the details of which would need to be mentioned in this
Report.
Corporate Governance
A Corporate Governance Report is annexed separately as part of this
Report. Board confirms compliance with Secretarial Standards.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report is annexed separately as
part of this Report.
Fixed Deposits
The Company has not accepted any deposits from the public during the
year. There was no fixed deposit amount that remained unpaid/unclaimed as at the end of
the year.
Annual Return
The draft Annual Return of the Company as on March 31, 2022 in e-Form
MGT - 7 in accordance with section 92(3) of the Companies Act, 2013 read with the
Companies (Management and Administration) Rules, 2014, is available on the website of the
Company at http://pioneerdistilleries.com/downloads.php
Transfer to Investor Education and Protection Fund (IEPF)
In terms of Sections 124 and 125 of the Act (erstwhile Section 205A(5)
and 205 C of the Companies Act, 1956), read with the Investor Education and Protection
Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules), both
of which were applicable with effect from September 07, 2016, the unclaimed/unpaid
dividend remaining unclaimed/unpaid for a period of seven years, have been transferred to
the IEPF. There were no amount pending to be transferred to the IEPF account for the
financial year ended March 31, 2022.
Necessary compliance under Rule 3 of the Investor Education and
Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying
with Companies) Rules, 2012 have been complied with.
Human Resources
Employee relations remained cordial during the year. The ratio of the
remuneration of each director to the median employees remuneration, the names of the top
ten employees in terms of remuneration drawn and other details during the financial year
2021-22 in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) &
(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
are provided in Annexure 1 and also in the Corporate Governance Report. None of the
employee draws remuneration in excess of the limit prescribed under rule 5(2) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Employee stock option scheme
Your Company has not offered any stock options to its employees during
the year 2021-22 within the meaning of SEBI (Share Based Employee Benefits) Regulations,
2014.
Particulars of loans, guarantees and investments
There are no loans given, investments made, guarantees given,
securities provided by the Company and acquired by way of subscription, purchase or
otherwise securities of any other body corporate which are covered under the provisions of
the Section 186 of the Companies Act, 2013.
Risk Management
The Company has a Risk Management framework. Risk evaluation by the
management is an ongoing process within the organization and is periodically reviewed by
the Board of Directors. Risk Management has been made part of Audit Committee by renaming
the Audit Committee as Audit and Risk Management Committee. The Risk Management policy
adopted by the Company has been explained in the Management Discussion and Analysis Report
which forms part of this Report.
Internal Financial Controls
Your Company has established and maintained a framework of Internal
Financial Controls and compliance systems. Based on Boards review of the effectiveness of
the policies and procedures adopted by the Company for ensuring orderly and efficient
conduct of its business, including adherence to Companys policy, safeguarding its assets,
prevention and detection of frauds and errors and completeness of accounting records and
timely preparation of financial statements and the confirmation received from the external
parties, the Board has satisfied itself that the Company has laid down internal financial
controls, commensurate with size of the Company and that such internal financial controls
are broadly adequate and are operating effectively. The certification by the auditors on
internal financial control forms part of the audit report.
Corporate Social Responsibility
The Corporate Social Responsibility (CSR) committee has been setup by
the Company. The composition and other details have been provided in the Corporate
Governance Report.
The Company and its employees have actively participated in engaging
with stakeholders and regulatory authorities so as to create positive impact of our
existence and operations. This has widely been applauded and reflected with true
commitment of creating a sustainable socio-economic growth. Company has focused on
community wellbeing in the times of pandemic by helping the government to handle the
pandemic situation by providing necessary infrastructure to the local government
authorities.
The company did not generate profits in the previous three financial
years and the Company continues to report losses and is operating on working capital
borrowed from banks and intercorporate loans and advances from the holding company.
Therefore, in FY 2021-22 company did not spend on CSR activities. The details are enclosed
in
Annexure-5
The calculation of average of last 3 years profits is given below:
| Period |
Rs. |
| FY 18-19 |
(80,95,16,722) |
| FY 19-20 |
(1,08,50,00,000) |
| FY 20-21 |
(1,08,51,00,000) |
| Total |
(2,97,96,16,722) |
| Average of last three years profits u/s 198 |
(99,32,05,574) |
| 2% of Average to be spent for FY 21-22 |
(1,98,64,111) |
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
4 to this Report.
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 the Companies (Accounts) Rules, 2014.
The Company has not received any significant or material orders passed
by the regulators or courts or tribunals impacting the Companys going concern status
on the Companys operations in future.
Disclosure under the sexual harassment of women 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 workplace 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 Committees (IC) have been constituted as per the requirement.
Maintaining the highest governance norms, each Internal Committee has appointed members
who are employees of the Company and an independent external member, having extensive
experience in the field. The ICs meet on a half yearly basis to discuss matters on policy
awareness, best practices, judicial trends, etc. During the year, ICs have also been
trained on nuances of the Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013.
The Internal Committees role is to consider and resolve the complaints
reported on sexual harassment at workplace. Investigation is conducted and decisions are
made by the IC at the respective location, and a senior woman employee is the presiding
officer on every case.
I) Number of complaints filed during the financial year ending 31st
March 2022: No Sexual harassment complaint received during the financial year.
ii) Number of complaints disposed of during the financial year : Nil
iii) Number of complaints pending as on end of the financial year: Nil
To build awareness in this area, the Company has been publishing
newsletter, emailers, posters, conducting online training module and monthly induction
training for newly joined employees. Besides the refresher, virtual training programmes
are conducted in the organization on a continuous basis for employees (including blue
collared employees), consultants, contractual employees and permanent/contractual workers
in regional languages. The Internal Committee has also conducted informal sessions to
check the pulse at the grassroot levels
Other Disclosures a) The Company has not issued equity shares with
differential rights as to dividend, voting or otherwise.
b) The Company has not issued any sweat equity shares to its directors
or employees.
c) No application has been made under the Insolvency and Bankruptcy
Code; hence the requirement to disclose the details of application made or any proceeding
pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along
with their status as at the end of the financial year is not applicable.
d) The requirement to disclose the details of difference between amount
of the valuation done at the time of onetime settlement and the valuation done while
taking loan from the Banks or Financial Institutions along with the reasons thereof, is
not applicable.
Directors responsibility statement
Pursuant to Section 134 (5) of the Companies Act, 2013 in relation to
financial statements (together with the notes to such financial statements) for the year
2021-22, the Board of Directors report that:
(I) in the preparation of the annual accounts for the financial year
ended March 31, 2022, the applicable accounting standards have been followed and there are
no material departures;
(ii) 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 as at March 31, 2022
and of the profit of the Company for year ended on that date;
(iii) the Directors have taken proper and sufficient care for the
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 Directors have prepared the financial statements on a going
concern basis;
(v) the Directors have laid down internal financial controls to be
followed by the Company commensurate with the size and nature of its business and the
complexity of its operations and that such internal financial controls are adequate and
are operating effectively.
(vi) Proper systems have been devised to ensure compliance with the
provisions of all applicable laws by implementing an automated process having
comprehensive systems and securing reports of statutory compliances periodically from the
functional unit and such systems are adequate and are operating effectively
Listing of equity shares of the Company
The equity shares of your Company continue to be listed with BSE
Limited and National Stock Exchange of India Limited (NSE). The Annual Listing fees for
the year 2022-23 have been paid to these stock exchanges.
Disclosure of compliance of secretarial standards:
The relevant Secretarial Standards issued by the Institute of Company
Secretaries of India (ICSI) related to the Board Meetings and General Meeting have been
complied with by the Company.
Acknowledgment
Your Directors place on record their sincere appreciation for the
support from employees, shareholders, customers, suppliers, banks, auditors, government of
Maharashtra, Telangana & Karnataka and other business associates.
|
By Authority of the Board |
| Bengaluru |
R Krishnamurthy |
|
Chairman |
| 19 May 2022 |
|
+91-9892691696
