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Aurangabad Distillery Ltd.

BSE: 538379 Sector: Consumer
NSE: AURDIS ISIN Code: INE448V01019
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Aurangabad Distillery Ltd. (AURDIS) - Director Report

Company director report

To

The Members

Aurangabad Distillery Limited

The Board of Directors has pleasure in presenting herewith their 17th AnnualReport together with the Audited Financial Statements of your Company for the year ended31st March 2017.

FINANCIAL RESULTS:

The Company's financial performance for the year under review along with previousyear's figures is given hereunder:

(Amount in Rs.)
Particulars 31st March 2017 31st March 2016
Total Revenue 409115345 463482699
Less: Total expenses 395564513 416048068
Profit Before Exceptional And Extraordinary Items And Tax 13550832 47434631
Exceptional Items - -
Profit Before Extraordinary Items And Tax 13550832 47434631
Extraordinary Items - -
Add / (Less) : Prior Period Incomes / (Expenses) - -
Add : Excess / (Short) Provision of Taxation For Previous Years - -
Profit Before Tax 13550832 47434631
Tax Expense:
Less : Current Tax 2750000 9675000
Earlier Year Tax 851628 (3544343)
Deferred Tax 3105114 10168233
Profit (Loss) For The Year 6844090 31135741

REVIEW OF OPERATIONS AND DIVIDEND

The Company generated revenue of Rs. 409115345/- during the current year as againstrevenue of Rs. 463482699/- generated in the preceding year. The operations of theCompany have resulted into post tax profit of Rs. 6844090/- against post tax profit ofRs. 31135741/- in the preceding year. Owing to the growing business needs and thenecessity to plough back the profits in the business your Directors do not recommend anydividend for the year.

TRANSFER TO RESERVES

Your Company does not propose to transfer amounts to the General Reserve consideringthe availability of profits during the year under review.

ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and Administration) Rules 2014 is furnished in "Annexure-I"and is attached to this Report.

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met 14 times during the year under review on 25th April2016 19th May 2016 04th June 2016 08th June 2016 15thJune 2016 28th June 2016 11th July 2016 01st August2016 20th August 2016 1st September 2016 19thSeptember 2016 22nd September 2016 13th October 2016 and 08thFebruary 2017 respectively. Notice of meetings with agenda along with necessary detailswas sent to the Directors in time.

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

Name of Director Board Meetings held during the tenure of Director Board Meeting Attended
Mr. Dharampal Kimatram Kalani 14 14
Mr. Amardeepsingh Triloksingh Sethi 13 13
Mr. Kanyalal Kimatram Kalani 14 14
Mrs. Jagjitkaur Amardeepsingh Sethi 14 14
Mr. Gurnamsing Surendrasing Bhatiyani 05 05
Mr. Karan Vallabh Yadav 05 05
Mr. Ashokchandra Dwarkadhish Dhish 05 05
Mr. Prakash Madhavrao Sawant 03 03

COMMITTEES OF THE BOARD:

i.Audit Committee

Composition of Audit Committee:

The Audit Committee was constituted by the Board of Directors in a meeting held onSeptember 1 2016. The Committee comprises of the following members:

Name of the Member Category
Mr. Karan Vallabh Yadav Chairman & Independent Director
Mr. Ashokchandra Dwarkadhish Dhish Independent Director
Mr. Dharampal Kimatram Kalani Managing Director

ii.Nomination and Remuneration Committee

Composition of Nomination and Remuneration Committee:

The Nomination and Remuneration Committee was constituted by the Board of Directors ina meeting held on September 1 2017. The Committee comprises of the following members:

Name of the Member Category
Mr. Ashokchandra Dwarkadhish Dhish Chairman & Independent Director
Mr. Karan Vallabh Yadav Independent Director
Mr. Gurnamsing Surendrasing Bhatiyani Independent Director

iii.Stakeholders Relationship Committee

Composition of Stakeholders Relationship Committee:

The Stakeholders Relationship Committee was constituted by the Board of Directors in ameeting held on September 1 2017. The Committee comprises of the following members:

Name of the Member Category
Mr. Gurnamsing Surendrasing Bhatiyani Chairman & Independent Director
Mr. Karan Vallabh Yadav Independent Director
Mr. Dharampal Kimatram Kalani Managing Director

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Dharampal Kimatram Kalani Managing Director of the Company retires by rotationand being eligible has offered himself for re-appointment.

The Company had appointed Mr. Prakash Madhavrao Sawant as an Additional Director of theCompany in a Board Meeting held on 19th September 2016 pursuant to Section 161of the Companies Act 2013 (the Act) and he can hold the office till the conclusion ofthis Annual General Meeting (AGM). The Company has received notice under Section 160 ofthe Companies Act 2013 in writing from the member signifying his intention to be proposedas a candidate for Directorship.

All Independent Directors have given declarations that they meet the criteria ofIndependence as laid down under Section 149(6) of the Companies Act 2013.

During the year under review Mr. Ratansingh Sethi resigned as Director of the Company.The Board places on record their sincere appreciation for his valuable contributionsduring his tenure as Director of your Company.

Mr. Uday Hemade and Mrs. Sheetal Jagetiya were appointed as Chief Financial Officer(CFO) and Company Secretary & Compliance officer of the Company (CS) respectively witheffect from 15th June 2016. Mr. Amardeepsingh Sethi and Mr. Dharampal Kalaniwere designated as a Whole Time Director and a Managing Director respectively in an ExtraOrdinary General Meeting of the Company held on 13th June 2016.

NOMINATION AND REMUNERATION POLICY

The Nomination and Remuneration Policy is designed to attract motivate improveproductivity and retain manpower by creating a congenial work environment encouraginginitiatives personal growth and team work and inculcating a sense of belonging andinvolvement besides offering appropriate remuneration packages and superannuationbenefits. The policy reflects the Company's objectives for good corporate governance aswell as sustained long term value creation for shareholders.

DIRECTORS' RESPONSIBILITY STATEMENT

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

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

(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit & loss of the Company for that period;

(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 whichare adequate and are operating effectively.

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

AUDITORS & THEIR REPORTS

STATUTORY AUDITORS

M/s. Natesh & Associates Chartered Accountants Nashik were appointed asStatutory Auditors of the Company at the Annual General Meeting of the Company held on 26thSeptember 2014 to hold office till the conclusion of 19th Annual GeneralMeeting subject to ratification by shareholders at every Annual General Meeting.

A resolution proposing ratification of their appointment is submitted at the ensuing 17thAnnual General Meeting. The Statutory Auditors' Report does not contain any qualificationreservation or adverse remark.

SECRETARIAL AUDITORS

The Board of Directors had appointed M/s. Prajot Tungare & Associates PracticingCompany Secretaries as the Secretarial Auditors of your Company to issue a SecretarialAudit Report pursuant to Section 204 of the Companies Act 2013 for the financial year2016-17.

Accordingly the Secretarial Auditors have given their report which is annexed heretoas "Annexure II".

AUDITORS' COMMENTS

1) The Company has not filed necessary e-forms as required to be filed with respect toappointment of internal auditor and for availing credit facilities from The SaraswatCo-operative Bank Limited and HDFC Bank Limited;

2) Form MGT- 7 for the financial year ended 31st March 2016 has not beensigned by the Company Secretary in Employment; and

3) There has been a delay in filing statement of investor complaints for quarter ended31st December 2016.

MANAGEMENT REPLY

The Company is taking due efforts to comply with the provisions of the laws applicableto Company and assures to make the defaults good.

SHARE CAPITAL

The Company has increased it authorized share capital from Rs. 21000000/- to Rs.69000000/-. Bonus shares were allotted to the shareholders of the Company amounting toRs. 40000000/- in a Board meeting dated 19th May 2016. The Company has alsomade an Initial Public Offering for 2200000 Equity Shares. Shares were allotted to theapplicants in a board meeting dated 13th October 2016.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

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

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

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

MATERIAL CHANGES AND COMMITMENT

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

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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

DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

The Company has a robust risk management framework comprising risk governance structureand defined risk management processes. The Company identifies all strategic operationaland financial risks that the Company faces by assessing and analyzing the latest trendsin risk information available internally and externally and uses the same to plan for riskmitigation activities.

INTERNAL FINANCIAL CONTROLS

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

CORPORATE SOCIAL RESPONSIBILITY INITIATIVE

The provisions of Section 135 of the Companies Act 2013 are not applicable to theCompany hence Company has not developed and implemented any Corporate SocialResponsibility initiatives.

SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES AND THEIR POSITION & FINANCIALPERFORMANCE

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

DEPOSITS

Your Company has not accepted any deposits within the meaning as provided in theCompanies Act 2013.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

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

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

Management's Discussion and Analysis Report for the year under review as stipulatedunder the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") is presented in "AnnexureV" to this report.

PERFORMANCE EVALUATION

The Company has devised a Policy for performance evaluation of the Board Committeesand other individual Directors (including Independent Directors) which includes criteriafor performance evaluation of the Non-executive Directors and Executive Directors. Theevaluation process inter alia considers attendance of Directors at Board and committeemeetings acquaintance with business communicating inter se board members effectiveparticipation domain knowledge compliance with code of conduct vision and strategybenchmarks established by global peers etc. which is in compliance with applicable lawsregulations and guidelines.

The Board carried out annual performance evaluation of the Board Board Committees andIndividual Directors and Chairperson. The Chairman of the respective Board Committeesshared the report on evaluation with the respective Committee members. The performance ofeach Committee was evaluated by the Board based on report on evaluation received fromrespective Board Committees.

PARTICULARS OF EMPLOYEES

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

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

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

ACKNOWLEDGEMENTS:

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

For and on behalf of The Board of Directors

Aurangabad Distillery Limited

Amardeepsingh Sethi

Chairman & Wholetime Director

DIN: 00097644

Place: Walchandnagar

Date: 17th August 2017