Your Directors have pleasure in presenting their 31st Annual Report together with theAudited Accounts and Auditor's Report of the Company for the year ended on 31st March2020.
1. FINANCIAL RESULTS
A summary of the company's results for the financial year 2019-20 is as under:
| ||201 ||2018-2019 |
|P A R T I C U L A R S ||2019-20 ||2018-19 |
|Gross Revenue from Operations ||53499.91 ||41158.18 |
|Profit/(Loss) before Interest Depreciation & Tax (EBIDTA) ||7989.56 ||6184.25 |
|Less: Interest ||208.18 ||223.18 |
|Profit before Depreciation ||7781.38 ||5961.07 |
|Less: Depreciation ||1409.72 ||1229.41 |
|Profit / (Loss) before Tax ||6371.66 ||4731.66 |
|Provision of Tax ||1438.04 ||1705.27 |
|Net Profit/Loss ||4933.62 ||3026.39 |
2. Financial Performance
Your Company reported a top line growth of 30% over the previous year and has achieveda turnover of RS 53499.91 lakhs in the current year against RS 41158.18 lakhs in theprevious year the increase in revenue can be majorly attributed to the higher productionachieved on expanded capacity further contribution of IMFL sales and sale of Extra NeutralAlcohol.
Earnings Before Interest Depreciation & Tax (EBIDTA) for the year stood at RS7989.56 lakhs an increase of 29.20% from RS 6184.25 lakhs in the previous year. OperatingProfit Before Tax (PBT) stood at RS 6371.66 lakhs an increase on 34.66% from RS 4731.66lakhs in the previous year & the net profit for the year was RS 4933.62 lakhs asagainst RS 3026.39 lakhs an increase of about 63.01% from the previous year. The changesin key financial ratios form part of this report.
The company continues to retain and reinforce its market leadership in the allocatedsegments in which it operates. There are no material changes or commitments affecting thefinancial position of the company which have occurred between the end of the financialyear and the date of this report other than the impact of Covid-19 on business operationsof the company detailed in this report.
3. Material Changes from the end of Financial Year till the Date of Report
Material Changes and commitment affecting the financial position of the company fromthe end of financial year to the date of report.
Global Pandemic & Impact of Covid-19
In the last month of FY 2020 the COVID-19 pandemic developed rapidly into a globalcrisis forcing governments to enforce lockdowns of all economic activity. For theCompany the focus immediately shifted to ensuring the health and well-being of allemployees and on minimizing disruption to services for all our customers. The operationsof the company were shut down as per the lockdown directives except to the extent of whatwas permitted The impact of COVID-19 pandemic on the overall economic environment beinguncertain and as the situation is unprecedented and while the lockdown is graduallylifting the Company is closely monitoring the situation as it evolves in the future andexpects the normal business depending on the factors caused by COVID-19 and associatedissues.
4. Share Capital
The paid-up equity share capital of the company as at March 31 2020 stood at RS1807.92 lakhs divided into 18079200 equity shares of RS 10/- each.
5. Dividend & Reserves
Your directors have pleasure in recommending dividend for approval of the members atthe Annual General Meeting a dividend of 10% i.e RS 1.00/- each (previous year 10% i.e. RS1.00/- each) on 18079200 Equity Shares of face value of RS 10/- each the aggregate amountbeing RS 180.79 lakhs payable to shareholders whose name appear in the Register ofMembers as on the Book Closure Date/Record Date.
During the year under review 100 lakhs was transferred to General Reserve from retainedearnings.
6. Finance & Accounts
As mandated by the Ministry of Corporate Affairs the financial statements for the yearended on March 31 2020 has been prepared in accordance with the Indian AccountingStandards (IND AS) notified under Section 133 of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 as amended from time to time. The estimates and judgmentsrelating to the Financial Statements are made on a prudent basis so as to reflect in atrue and fair manner the form and substance of transactions reasonably present theCompany's state of affairs profits and cash flows for the year ended March 31 2020. TheNotes to the Financial Statements adequately cover the Audited Statements and form anintegral part of this report.
7. A Full Year Operated on Expanded Capacity (4.5 Crore Litres)
The company much awaited project was completed in September 2018 and Stabilized byNov-Dec18 the year 2019-20 can be termed as the first full year of expanded capacity. Theaverage utilization during the year was at 95%.
8. Awards & Accolades
The company product 'Titanium' Vodka has been awarded as the Best Popular Vodka(Silver) at Indspirit 2019 awards at New Delhi.
9. VAT/GST on Rectified Spirit /ENA
There exist amid confusion on the levy of GST/VAT on the sale of rectified spirit andextra neutral alcohol and inspite of repeated reminders and representation from companyand industry no concrete response/clarification from state authorities has been receivedthe company has prudently finally taken a view that the VAT which was withhold now beingdeposited with the government. The company is now regular in depositing the VAT onrectified spirit/ENA.
10. Shifting of registered office of the company
The Company pursuant to Regional Director order no. RD/ T/29572/S-13(4)/19/3126 dated21st June 2019 has shifted its registered office from Kolkata West Bengal to IndoreMadhya Pradesh the effective date being 1st July 2019.
11. Listing and Dealing of Equity Share Capital of The Company at National StockExchange of India Limited (NSE).
The company during the year has pursued the listing of its Equity Share to NationalStock Exchange and moved the application on 11th December 2019 and followed by details asseek by them which the company provided followed by final inspection and set of questionanswers.
It's our pleasure to inform the shareholders that the Company has got listed andadmitted to dealing its equity shares at National Stock Exchange of India Limited (NSE)w.e.f. 12th February 2020.
12. Income Tax Assessment Order In Relation to Income Tax Search
As disclosed earlier (Annual Report 2017-18) the Income Tax Search was carried in thepremises and at plant locations in November 2017 where full cooperation explanationinformation and clarification as desired were provided to the department officials andfurther assured.
At AABL we follow ethical and legal standards of highest order and have robustinstitutional measures to monitor further the Assessment Order in relation to abovesearch for the Assessment Year 2012-13 to Assessment Year 2018-19 were passed in December2019 and no difference or addition on account of stock work in progress or finished goodsin any of these year as such were found. However the IT department has made the additionsof RS 1376.94 Lakhs in respect of amounts infused as unsecured loans by certain companiesas unexplained cash credit and finally the IT department after rectification has raised atotal demand of RS 761.32 Lakhs in all the 7 years against which the company has depositeda sum of RS 118.71 Lakhs the company has appealed against the orders before Commissionerof Income Tax (Appeals) which is pending adjudication and the company is hopeful ofgetting relief.
13. Hand Rub Sanitizer
During the Covid-19 Pandemic the government proactively on situations prevailinggranted permission to the distillers like us to manufacture alcohol based hand sanitizerthe company look it as an opportunity and manufactured the hand rub sanitizer withrecommended guidelines. The company's strategy is to place its product and stabilize itsbrand in the market for long run.
14. Directors' Responsibility Statement
As required under section 134(5) of the Companies Act 2013 the Directors confirm that:
a) that in the preparation of the annual accounts the applicable accounting standardshave been followed.
b) that appropriate accounting policies have been selected and applied consistently andthat judgments and estimates made are reasonable and prudent so as to give a true and fairview of the state of affairs of the company as on 31st March
2020 and of its profit for the year ended on that date.
c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records under the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities.
d) that the annual financial statements have been prepared on a going concern basis.
e) that the directors had laid down internal financial control to be followed by thecompany and that such internal financial control is adequate and were operatingeffectively.
f) that the director had devised proper system to ensure compliance with the provisionof all applicable laws and that such system were adequate and operating effectively.
15. Composition of Board
Director & KMP
The Board provides leadership strategic guidance objective and independent view tothe Company's management while discharging its fiduciary responsibilities thereby ensuringthat the management adheres to high standards of ethics transparency and disclosure. TheBoard has constituted Audit Committee Stakeholder Relationship Committee Nomination& Remuneration Committee and Corporate Social Responsibility Committee.
Mr. Tushar Bhandari (DIN 03583114) is the Whole Time Director of the company thecompany has appointed adequate Key Managerial Personnel's as per requirements of Section203 of the Companies Act 2013
Declaration of Independence
The Independent Directors of the Company have given declarations that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 andRegulation 16(1) (b) of the Listing Regulations. In the opinion of the Board theIndependent Directors fulfil the conditions of independence specified in Section 149(6)of the Act and Regulation 16(1) (b) of the Listing Regulations. The Independent Directorshave also confirmed that they have complied with the Company's Code of Business Conduct& Ethics.
Director liable to retire by rotation seeking reappointment
In accordance with the provisions of section 152 of the Companies Act 2013 andCompany's Articles of Association Mr. Manish Kumar Tibrewal Director retires by rotationat the forthcoming Annual General Meeting and being eligible offers himself forreappointment. The Board has recommended his appointment for the consideration of themembers at the forthcoming AGM. Brief profile of Mr. Manish Kumar Tibrewal has been givenin the Notice convening this AGM.
Confirmation of Additional Director
Ms. Homai Ardeshir Daruwalla (DIN: 00365880) was appointed as an additional director on16th May 2020 termed as Non-executive & Independent Director and Mr. Debashis Das(DIN: 08755043) was appointed as an additional director on 16th May 2020 termed asNon-Executive & Non-Independent Director. The confirmation of both the director'sforms part of the notice convening 31st Annual General Meeting
16. Key Managerial Personnel
During the period under review following are the Key Managerial Personnel of thecompany
1. Mr. Tushar Bhandari - Whole Time Director
2. Mr. Sanjay Kumar Tibrewal - Chief Financial Officer
3. Mr. Sumit Jaitely - Company Secretary
During the year Six Board Four Audit Committee Four Stakeholders Relationshipcommittee Two Nomination & Remuneration Committee and Two CSR Committee Meetings wereconvened and held.
18. Performance Evaluation of Board Committees & Directors
Pursuant to the provisions of the Companies Act 2013 and the Regulation 25 SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board ofDirectors adopted a formal mechanism for evaluating its performance and as well as that ofits committees and individual Directors.
The Directors were satisfied with the evaluation results which reflected overallengagement of the Board and its Committees with the Company.
19. Corporate Social Responsibility Initiatives
As part of its initiatives under "Corporate Social Responsibility" (CSR) thecompany has constituted Corporate Social Responsibility Committee. The CSR Committee hasframed the CSR policy of the company. The Committee has made expenditure which form partof this report.
Annual Report on CSR activities is annexed herewith as: "Annexure B"
20. Corporate Governance
The Company has complied with the mandatory provisions of Corporate Governance asprescribed in the Regulation 27 of the SEBI (LODR) Regulations 2015 as applicable to theCompany. A separate report on Corporate Governance and Auditors Report thereon areincluded as part of the Annual Report.
21. Related Party Transactions
All related party transactions that were entered during the financial year were on anarm's length basis and were in the ordinary course of business and that the provision ofsection 188 of the Companies Act 2013 and the Rules made thereunder are not attracted.Thus disclosure in form AOC-2 in terms of section 134 of the Companies Act 2013 is notrequired. Further there is no material related party transaction during the year underreview with the Promoter Directors or Key Managerial Personnel.
All related party transactions are before the Audit Committee as also the Board ofDirectors for approval. Omnibus approval was obtained on a yearly basis for transactionswhich are repetitive in nature.
22. Risk Management and Adequacy of Internal Financial Controls
The Company's system of financial and compliance controls with reference to thefinancial statements and risk management is embedded in the business process by which theCompany pursue its objectives.
Management is responsible for establishing and maintaining adequate disclosure controlsand procedures and adequate internal controls over financial reporting with respect tofinancial statements besides its effectiveness in the context of applicable regulations.
The Internal Auditor the Audit Committee as well as the Board of Directors conductfrom time to time an evaluation of the adequacy and effectiveness of the system ofinternal controls for financial reporting with respect to financial statements.
M/s Singhi & Co. Chartered Accountants Kolkata FRN (302049E) were appointed asStatutory Auditors of your company at the 28th Annual General Meeting held on 05th August2017 for a term of five consecutive years upto the conclusion of 33rd Annual GeneralMeeting.
In accordance with Notification No. GSR 432(E) issued on 07th May 2018 by the Ministryof Corporate Affairs the appointment of statutory auditors is not required to be ratifiedat every Annual General Meeting.
The Report given by the Auditors on the financial statement of the company forms partof this Report and are self-explanatory. There has been no qualification reservationadverse remark or disclaimer as such given by the Auditors in their Report.
24. Secretarial Audit
The Board of Directors under section 204(1) of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Management Personnel) Rules 2014 has appointedM/s K. Arun & Co. (Practicing Company Secretaries) Kolkata to conduct secretarialaudit of the company for the financial year 2019-20. The Secretarial Audit report for theFinancial Year ended 31st March 2020 is annexed herewith as "Annexure C" andforms part of this report. The report is self-explanatory and do not call for anycomments.
Further the Board has appointed M/s K. Arun & Co. (Practicing CompanySecretaries) Kolkata as Secretarial Auditor for the financial year 2020-21.
25. Extract of Annual Return
The detail forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure D" and forms part of this report.
26. Conservation of Energy Technology Absorption and Foreign Exchange Earnings / Outgo
Information required under Section 134(3) (m) of the Companies Act 2013 read with Rule8(3) of the Companies (Account) Rules 2014 with respect to conservation of energytechnology absorption and foreign exchange earnings/outgo is annexed herewith as"Annexure E" and forms part of this report.
27. Particulars of Loans Guarantees and Investments Under Section 186 Of The CompaniesAct 2013
The particulars of Loans Guarantees and Investment in pursuance to Section 186 of theCompanies Act 2013 are given in the Notes to the financial statements.
28. Fixed Deposits
During the year your company has not accepted any deposit from public under Section 73of the Companies Act 2013 and Companies (Acceptance of Deposit) Rules 2014.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
Issue of equity shares with differential rights as to dividend voting orotherwise.
Issue of shares (including sweat equity shares) to employees of the Companyunder any scheme.
No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
During the year under review there were no cases filed or reported pursuant tothe sexual harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013.
No instances of fraud reported by auditor under 143(12) of the Companies Act2013
30. Particulars of Employees and Related Disclosure
The relation between the employees and the management has been cordial throughout theyear under review and the Directors place on record their appreciation for the efficientservices rendered by the employees at all levels.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed herewith as "Annexure - A" andforms part of this report.
31. Vigil Mechanism/ Whistle Blower Policy
The company has a Vigil Mechanism/Whistle Blower Policy to deal with instance of fraudand mismanagement if any. The details of the policy is explained in the CorporateGovernance Report and also posted on the website of the company.
32. Internal Complaints Committee
As per the requirements of Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 the company has constituted Internal ComplaintsCommittee (ICC) as per the requirements.
33. Details of Significant changes in Key Financial Ratios
|Particulars ||2019-20 ||2018-19 |
|Debtor Turn Over Cycle ||26 Days ||27 Days |
|Inventory Turnover Cycle ||39 Days ||50 Days |
|Interest Coverage Ratio ||38.38 ||27.71 |
|Current Ratio ||2.24 ||1.47 |
|Debt Equity Ratio ||0.04 ||0.09 |
|Operating Profit Margin ||15% ||15% |
|Net Profit Margin ||9% ||7% |
|Return on Capital Employed ||25% ||20% |
Your Directors express their sincere appreciation for the co-operation and supportreceived from shareholders bankers financial institutions regulatory bodies customerssuppliers employees and other business constituents during the year under review.
| || |
FOR AND ON BEHALF OF THE BOARD
| ||Tushar Bhandari ||Nitin Tibrewal |
|Place: Indore || |
|Date: 29th June 2020 ||DIN:03583114 ||DIN: 01892892 |