Silver Oak (India) Ltd Directors Report.

To,

The Members,

SILVER OAK (INDIA) LIMITED

CIN: L11531MP1984PLC002635

Your Directors have pleasure in presenting their 35th Annual Report, together with Audited Accounts of ti Company for the year ended 31st March, 2019.

1. FINANCIAL RESULTS:

a) Standalone figures:

PARTICULARS 2018-19 2017-18
(Rs in Lacs)
Sales and other Income 46.20 73.93
Profit/(Loss) before Depreciation (143.60) (49.50)
Interest 42.66 41.04
Depreciation 8.82 8.91
Profit/(Loss) before Tax (195.08) (99.46)
Less: Provision for Tax 0 (48.69)
Net Profit/(loss) for the year (195.08) (50.76)
Profit/(Loss) brought forward from previous year (265.39) (214.63)
Balance carried to Balance Sheet (460.47) (265.39)

b) Consolidated figures:

PARTICULARS 2018-19 2017-18
Sales and other Income 722.51 3146.49
Profit/(Loss) before Depreciation (160.82) (686.55)
Interest 42.88 40.76
Depreciation 11.36 14.44
Profit/(Loss) before Tax (215.06) (741.76)
Less: Provision for Tax 15.96 (151.93)
Net Profit/(loss) for the year (226.84) (589.93)

2. DIVIDEND:

The Company has incurred a Net loss of Rs. 1,95,08,356/- during the financial year 2018-19 and further in view of the future expansion plan and other business activities your directors have decided not to recommend any dividend for the year ended 31st March, 2019.

3. APPROPRIATIONS AND TRANSFER TO RESERVE:

The Company has not created any reserves during the financial year 2018-19.

4. OPERATING RESULTS:

Your Company has incurred a net loss of Rs. 195.08 Lacs on standalone basis, during the Financial Year 2018-19 as against the loss of Rs. 50.76 Lacs on standalone basis during the Financial Year 2017-18, after taking into account interest, depreciation, prior period adjustments and exceptional items.

5. BORROWINGS:

The Total term Loan amount of the company on standalone basis as on 31.03.2019 is 4,17,00,977 (Four Crores Seventeen lacs Nine hundred Seventy Seven Only) as against 3,57,86,306 (Three Crore Fifty Seven Lacs Eighty Six Thousand Three hundred Six Only) loan amount as on 31.03.2018.

6. FINANCE:

The total Cash & Cash Equivalent as on 31st March, 2019 is Rs. 17,33,963/- (Seventeen lacs thirty three thousand nine hundred sixty three only) . Your company continues to focus on judicious management of its working capital. Receivables, Inventories & other working capital parameters were kept under strict check through continuous monitoring.

7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

During the financial year 2018-19, the Company has made no investment in Shares in pursuant to section 186 of the Companies Act, 2013. The company has not given any loans or advances during the year other than to the related parties.

8. FIXED DEPOSITS:

Pursuant to the provisions of Section 73 Read with Companies (Acceptance of Deposit) Rules, 2014, the Company has not accepted any deposits from public during the year under review.

9. SHARE CAPITAL

The paid up equity share capital of the Company as on 31st March, 2019 stood at Rs. 3,79,02,000/- (Three Crore Seventy Nine Lac Two Thousand Only). During the year under review, the Company has neither issued shares with differential voting rights nor granted any stock options / sweat equity. Mrs. Leela Kalyani, Director of the Company holds 4.88% of shares of the Company as on the date of this report.

During the year under review, no Stock Options were granted, vested or exercised. No Stock Options are in force as on date. Hence, there are no disclosures required to be made pursuant to the applicable requirements of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

10. CHANGE IN THE NATURE OF BUSINESS, IF ANY:

There is no significant change in the nature of the business of the company.

11. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There are no other material changes and commitments affecting the financial position of the Company occurred between the end of the financial year of the company i.e. 31st March 2019 and the date of Directors report.

12. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

During the year under review, the Company has been taken over by M/s. Royal Highland Distilleries Limited, an unlisted Non-banking Finance Company under the guidance and prior approval of Securities and Exchange Board of India.

M/s. Royal Highland Distilleries Limited, through the Merchant Banker Arihant Capital Markets Limited had filed an Open Offer Letter with SEBI on 20th March, 2017, which was approved by the SEBI on 19th March, 2018, resulting M/s. Royal Highland Distilleries Ltd. and Mrs. Leela Kalyani become the New Promoters of the Company with the total holding of 64.71% of total Paid-up share Capital of the Company, Royal Highland Distilleries Limited holds 59.83% and Mrs. Leela Kalyani, the Person Acting in Concert (PACs) holds 4.88%.

Except the above, there are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future.

13. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:

During the financial year 2018-19, there is no change in the material subsidiary, the Companys investment in M/s APT Infrastructure Private Limited (CIN: U45400DL2007PTC170319), which is a subsidiary to your company stands at 6,00,000 (Six lacs) Equity shares of Rs. 10 (Rupees ten only) each for Rs. 60,00,000/- (Sixty lacs only) and also 7,000 (Seven thousand) convertible debentures for Rs. 1,50,47,083 (One Crore Fifty lacs forty seven thousand and eighty three only).

Statement containing salient features of the financial statement of subsidiary company pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014) has been annexed with this report as "Annexure "K".

14. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A) Industry Structure & Development and Outlook

Indian Made Foreign Liquor (IMFL) is "state subject" and as such every State has its own policies in respect of this industry. Madhya Pradesh, the state in which the company operates, has its own policy, both for manufacture as well as for marketing/distribution. The industry is expected to achieve average annual growth and many new players are expected to be stepping into the industry.

B) Opportunities & Threats, Risks & Concerns

The Companys strength is built around domestic marketing network. The growth of the industry provides the necessary opportunities for the company to grow. However, the industry is under constant pressure due to steep competition from unorganized sector and the industrial scenario in the nearby area.

C) Internal Controls and their adequacy

The company has adequate internal control systems, commensurate with the size and operations of the company. The scope of the internal audit is to ensure the control systems established by the management are correctly implemented and to suggest any additional changes required to strengthen the existing systems. These Systems and procedure are reviewed at regular intervals through internal audits, statutory audits and audit committee.

D) Human Resource and Industrial Relations

Industrial relations continue to remain peacefully at the factory and other offices of the Company and all the employees are working with the company for a common objective. Industrial relations of the company were cordial during the year.

15. DIRECTORS AND KEY MANAGERIAL PERSONNEL DIRECTOR

There is no change in the Board of Directors of the Company till the date of this report.

KEY MANAGERIAL PERSONNEL

In terms of Section 203 of the Companies Act, 2013, the following are the Key Managerial Personnel (KMP) of the Company:

01. Mr. Shirish Jaltare : Whole-time Director
02. Mr. Sunil Khandelwal : Chief Financial Officer
03. Mr. Deepak Meena : Company Secretary

No KMP has been appointed, retired or resigned during the year.

16. INDEPENDENT DIRECTORS DECLARATION:

The Company has received the necessary declaration from each Independent Director in accordance with Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(b) SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

17. COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors of the Company has constituted the following committees in terms of the provisions of The Companies Act, 2013 and applicable Regulations of SEBI(Listing Obligations & Disclosure Requirements) Regulations, 2015:

I. Audit Committee:

Our Audit Committee was properly constituted as laid under sec. 177 of The Companies Act, 2013 and Regulation 18 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Committee has adopted a Charter for its functioning.

The primary objective of the Committee is to monitor and provide effective supervision of the Managements financial reporting process, to ensure accurate and timely disclosures, with the highest levels of transparency, integrity and quality of financial reporting. The Committee met seven times during the year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report.

The constitution of the committee during the financial year under review is as follows:

Name of the Director Category
Mr. Suresh Kejriwal Independent Director
Mr. Prakash Kumar Gadia Independent Director
Mr. Shirish Jaltare Executive Director

II. VIGIL MECHANISM COMMITTEE:

The Board of the company has approved the reconstitution of Vigil Mechanism committee that provides a formal mechanism for all Directors, employees and vendors of the Company to approach the Ethics Counsellor/Chairman of the Audit Committee of the Board and make protective disclosures about the unethical behaviour, actual or suspected fraud or violation of the Code of Conduct of the company.

The Vigil Mechanism comprises three policies viz.,

i. the Whistle Blower Policy for Directors & Employees,

ii. Whistle Blower Policy for Vendors and

iii. Whistle Blower Reward & Recognition Policy for Employees.

The constitution of the committee during the financial year under review is as follows:

Name of the Director Category
Mr. Suresh Kejriwal Independent Director
Mr. Prakash Kumar Gadia Independent Director
Mr. Shirish Jaltare Executive Director

III. Nomination and Remuneration Committee:

a. Selection of New Directors and Board Membership Criteria

The Nomination and Remuneration Committee works with the Board to determine the appropriate characteristics, skills and experience for the Board as a whole and its individual members with the objective of having a Board with diverse backgrounds and experience in business, government, education and public service. Characteristics expected of all Directors include independence, integrity, high personal and professional ethics, sound business judgment, ability to participate constructively in deliberations and willingness to exercise authority in a collective manner. The policy on appointment and removal of Directors and determining Directors independence is annexed to this report.

b. Compensation Policy for Board and Senior Management

Based on the recommendations of the Nomination and Remuneration Committee, the Board has approved the Remuneration Policy for Directors, KMP and all other employees of the Company. As part of the policy, the Company strives to ensure that:

i. the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

ii. relationship between remuneration and performance is clear and meets appropriate performance benchmarks; and

iii. remuneration to Directors, KMP and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives

iv. Appropriate to the working of the Company and its goals.

The constitution of the committee during the financial year under review is as follows:

Name of the Director Category
Mr. Suresh Kejriwal Independent Director
Mr. Prakash Kum,ar Gadia Independent Director
Mrs. Leela Kalyani Non-executive Director

IV. STAKEHOLDER RELATIONSHIP COMMITTEE:

The constitution of the committee during the financial year under review is as follows:

Name of the Director Category
Mr. Suresh Kejriwal Independent Director
Mrs. Leela Kalyani Non Executive Director
Mr. Shirish Jaltare Executive Director

V. Finance Committee

The Finance Committee was properly constituted as laid under sec. 179 of The Companies Act, 2013, as per section 179 of the Companies Act, 2013 the power to borrow monies, power to invest the funds of the company and power to grant loans or give guarantee or provide security in respect of loans needs to be exercised at a Board Meeting or may be delegated by the Board to a Committee of the Directors. In view of the above, the Board formed Finance Committee of the Board to consider the abovementioned matters and report to the Board on regular basis.

The Committee has adopted a Charter for its functioning.

The constitution of the committee during the financial year under review is as follows:

Name of the Director Category
Mr. Suresh Kejriwal Independent Director
Mr. Shirish Jaltare Whole Time Director
Mrs. Leela Kalyani Non-executive Director
Mr. Sunil Kahndelwal Chief Financial Officer

18. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:

The Company has conducted 06 (SIX) Board Meetings in the financial year 2018-19 i.e. 30/05/2018, 14/08/2018, 18/08/2018, 31/08/2018, 13/11/2018 and 14/02/2019.

19. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder.

20. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The Company has entered into transaction with the related party during the financial year 2018-19 with the related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 and the Statutory auditors of the company has also verified in its through its Auditors Report that the related party transactions are undertaken at Arms Length Price. Details of the transactions are disclosed in Form AOC 2 as Annexure "G".

21. SECRETARIAL AUDIT REPORT:

As required by Section 204 of the Act, 2013 read with rule 9 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report for the year 201819, given by FCS Varun Bhomia, Practicing Company Secretary, Indore is attached to this report as Annexure "F".

22. EXPLANATION TO OBSERVATIONS RAISED BY SECRETARIAL AUDITOR:

FCS Varun Bhomia, Practicing Company Secretary has not raised any observations in Secretarial Audit Report prepared pursuant to Section 204 of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

23. RISK MANAGEMENT POLICY:

The Company has an integrated Risk Management Policy identifying the possible risks & mitigates factors thereto.

24. INTERNAL CONTROL AND THEIR ADEQUACY:

The Company has a proper and adequate internal control system to ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized and recorded. Information provided to management is reliable and timely and statutory obligations are adhered to.

25. INTERNAL FINANCIAL CONTROL:

The Company has an established internal financial control framework including internal controls over financial reporting, operating controls and anti-fraud framework. The framework is reviewed regularly by the management and tested by internal audit team and presented to the audit committee. Based on the periodical testing, the framework is strengthened, from time to time, to ensure adequacy and effectiveness of Internal Financial Controls.

26. CEO/CFO CERTIFICATION:

Certificate obtained from Mr. Shirish Jaltare, Whole-time Director and Mr. Sunil Khandelwal, Chief Financial Officer, pursuant to Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, for the year under review has been duly placed before the board and a copy of the certificate on the financial statements for the year ended March 31, 2019 is annexed as annexure "D" along with this report.

27. DIRECTORS RESPONSIBILITY STATEMENT:

The Directors Responsibility Statement referred to in clause (c) of sub-section (3) of section 134 of companies act, 2013, shall state that

a. In the preparation of the annual accounts for the financial year ended 31st March, 2019, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. the directors had 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 ended 31st March, 2019 and of the profit and loss of the company for that period;

c. The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d. The directors had prepared the annual accounts on a going concern basis; and

e. The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

Explanation.—For the purposes of this clause, the term "internal financial controls" means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information;

f. 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.

28. RATIO OF THE REMUNERATION OF EACH DIRECTOR TO THE MEDIAN REMUNERATION OF THE EMPLOYEES OF THE COMPANY:

Pursuant to the provisions of Section 197(12) read with Rule 5 of (Appointment and remuneration of managerial Personnel) Rules, 2014, the details is given in Annexure "I".

29. PARTICULARS OF REMUNERATION OF EMPLOYEES:

During the year under review, none of the employees received remuneration in excess of the prescribed limit as laid under section Section 197(12) read with Rule 5 of (Appointment and remuneration of managerial Personnel) Rules, 2014.

Therefore there is no information to disclose in terms of the provisions of The Companies Act, 2013.

30. AUDITORS:

M/s Mahendra Badjatya And Company, Chartered Accountants, Indore, have been appointed as Auditors of the company, to hold office from the conclusion of 33rd Annual General Meeting till the conclusion of Thirty Eighth Annual General Meeting of the Company.

31. AUDITORS REPORT:

The notes to the accounts referred to in the Auditors Report are self-explanatory and therefore do not call for any further comments.

32. EXTRACT OF THE ANNUAL RETURN:

The extract of annual return in Form No. MGT - 9 is annexed as Annexure "H" along with this report.

33. CORPORATE SOCIAL RESPONSIBILITY (CSR):

As the provisions of Section 135 of the Companies Act, 2013 and the rules there under, are not applicable on the Company. Therefore, the Company is not required to comply with the section.

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

Information in respect of Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo pursuant to provisions of Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, for the financial year ended 31.03.2019, is attached as Annexure" A" which forms part of this Report.

35. LISTING OF EQUITY SHARES ON STOCK EXCHANGES:

The Companys shares are listed in Bombay Stock Exchange Limited with Security Code 531635 and ISIN INE870J01019.

36. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees.

A separate exercise was carried out to evaluate the performance of directors individually, including Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority members etc. The Performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and Non-executive Independent Directors was also carried out by the Independent Directors at their separate meeting. The Directors expressed their satisfaction with the evaluation.

37. Internal Auditor

As per requirements of Section 138(1) of the Companies Act, 2013 read with rule 13 of the Companies (Accounts) Rules, 2014, the Board of Directors of the Company has appointed M/s A.B. Doshi & Co., Chartered Accountants, Indore as Internal Auditor of the Company to conduct Internal Audit of business processes, financial reporting & controls, compliance with applicable laws, regulations etc. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company.

38. Cost Auditor

The Ministry of Corporate Affairs (MCA) vides Notification dated 31st December, 2014 made amendment in the Companies (Cost Records and Audit) Rules, 2014, through Companies (Cost Records and Audit) Amendment Rules, 2014. As per the said amendment rules, our Company is exempted from the requirement to conduct Cost Audit. Therefore, the Company did not appointed Cost Auditor for financial year 2018-19.

39. INDEPENDENT DIRECTORS FAMILIARIZATION PROGRAMME

The Company continued with its Independent directors familiarization program, when needed, for familiarizing them with companys operations, regulatory and critical aspects which would enable them to effectively discharge responsibilities and functions conferred on them. Policy about familiarization Programme is placed on the Companys website.

40. CORPORATE GOVERNANCE:

[A report on Corporate Governance along with Auditors Certificate is annexed herewith as annexure "B".

41. PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Companys shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

All Directors and the designated employees have confirmed compliance with the Code.

42. CASH FLOW ANALYSIS

In conformity with the provisions of Regulation 34 of the Listing Regulations, the Cash Flow Statement forms part of annual report.

43. ENVIRONMENT AND SAFETY

The Company is conscious of the importance of environmentally clean and safe operations. The Companys policy requires conduct of operations in such a manner so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.

In order to prevent sexual harassment of women at work place, a new act the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. As per the said act, every company is required to set up an Internal Complaints Committee (ICC) to look into complaints relating to sexual harassment at work place of any women employee.

Accordingly, the Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up an Internal Complaints Committee for implementation of said policy.

There were no incidences of sexual harassment reported during the year under review.

44. POLICIES AS PER SEBI LISTING REGULATIONS

As per requirements of provisions of Listing Regulations the Company has adopted the following policies:

• Policy for Preservation of Documents. (Regulation 9)

• Policy for Determination and Disclosure of Material Events. (Regulation 30(4) (ii))

• Archival Policy, (Regulation 30(8))

• Policy on Material Related Party Transactions. (Regulation 23)

• Familiarization Programme for independent directors as per Regulation 25 of the Listing Regulations.

As, the Company does not have any subsidiary, hence not formulated policy on material subsidiary as stipulated under regulation 16(1)(c).

45. BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Reporting as required by Regulation 34(2) (f) of the Listing Regulations, is not applicable to your Company for the financial year ending March 31, 2019.

46. DISCLOSURES

The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

The Board of Directors state that except disclosures as given above, no further mandatory disclosure or reporting is required to give with this report.

47. GREEN INITIATIVE

The Ministry of Corporate Affairs had taken the Green Initiative in Report on Corporate Governance by allowing paperless compliances by Companies through electronic mode.

Your Company supports the Green Initiative and has accordingly decided to send necessary communications to its Shareholders to their respective registered E-mail addresses.

Your Company appeals to its Shareholders, who are yet to register the E-mail addresses that they take necessary steps for registering the same so that you can also become a part of the initiative and contribute towards a Greener environment.

48. , CAUTIONARY STATEMENT:

The statement in this report is based on the experience and information available to the company in its businesses and assumptions with regard to economic conditions, Government and regulatory policies. The performance of the company is dependent on these factors. It may be materially influenced by various factors including change in economic conditions, government regulations, tax laws and other incidental factors, which are beyond the companys control, affecting the views expressed in or perceived from this report.

49. ACKNOWLEDGEMENT:

Your Directors take this opportunity to place on record their appreciation for the confidence reposed and co-operation extended to the Company by the Bankers of the Company, State Bank of Travancore, other Banks, Central and State Government Authorities, Business Associates, the family of Shareholders and others.

Your Directors also wish to place on record their appreciation for the dedicated and hard work put in by the Officers, Employees and Other Staff Members, at all levels.

FOR SILVER OAK (INDIA) LTD.
CIN: L11531MP1984PLC002635
Place: Indore (M.P.) Sd/- Sd/-
Date : 05th September, 2019 Leela Kalyani Shirish Jaltare
SILVER OAK (INDIA) LTD. Director Director
CIN: L11531MP1984PLC002635 DIN:06625369 DIN:00070935