Associated Alcohols & Breweries Ltd.
|BSE: 507526||Sector: Consumer|
|NSE: ASALCBR||ISIN Code: INE073G01016|
|BSE 00:00 | 30 Nov||439.35||
|NSE 00:00 | 30 Nov||439.50||
|Mkt Cap.(Rs cr)||794|
|Mkt Cap.(Rs cr)||794.34|
Associated Alcohols & Breweries Ltd. (ASALCBR) - Director Report
Company director report
Your Directors have pleasure in presenting their 33rd Annual Reporttogether with the Audited Accounts and Auditor?s Report of the Company for the yearended on 31st March 2022.
1. FINANCIAL RESULTS
A summary of the company?s financial result year 2021-22 is asunder:
(Rs in Lakhs)
2. FINANCIAL PERFORMANCE
The Company?s operations and financial results for the Q1 FY2021-22 have been adversely impacted by the outbreak of Covid-19 Second-Wave and thelockdown announced by the State Government amidst all these challenges your company hasachieved a turnover of RS51422 lakhs in the current year against RS45317 lakhs in theprevious year the year FY 22 was a year of unprecedented challenged but thecompany?s agile business model helped to navigate the headwinds and delivered highestbottom line in the history of AABL.
Earnings Before Interest Depreciation & Tax (EBIDTA) for the yearstood at RS9637 lakhs an increase of 2.51% from RS9401 lakhs in the previous year.Operating Profit Before Tax (PBT) stood at RS8116.24 lakhs an increase of 3.42% fromRS7847.54 lakhs in the previous year & the net profit for the year was RS6080.56 lakhsas against RS5795.67 lakhs an increase of about 4.91% from the previous year. The changesin the key financial ratios form part of this report. The company continues to retain andreinforce its market leadership in the allocated segments in which it operates. There areno material changes or commitments affecting the financial position of the company whichhave occurred between the end of the financial year and the date of this report other thanthe impact of Covid-19 on business operations of the company detailed in this report.
3. IMPACT OF COVID-19 SECOND WAVE
The operations & business of the company were impacted for a partof the quarter (Q1) due to the second lockdown & closure of liquor shops as per stategovernment directives. Although there were initial uncertainties during the year thingstrend to normalize gradually post first quarter and the economy regained momentum in thefirst half of FY 22. The better balance sheet position fair profitability and inherentresilience of the business model positioned the company well to navigate the challengeahead and continue its growth trajectory.
4. SHARE CAPITAL
The paid-up equity share capital of the company as at March 31 2022stood at RS1807.92 lakhs divided into 18079200 equity shares of RS10/- each.
5. DIVIDEND & RESERVES
Your directors have pleasure in recommending dividend for approval ofthe members at the ensuing 33rd Annual General Meeting a dividend of 10% i.e RS1.00/- each(previous year 10% i.e. RS1.00/- each) on 18079200 Equity Shares of face value of RS10/-each the aggregate amount being RS180.79 lakhs payable to shareholders whose name appearin the Register of Members as on the Book Closure Date/Record Date.
During the year under review RS100 lakhs was transferred to GeneralReserve from retained earnings.
6. FINANCE & ACCOUNTS
As mandated by the Ministry of Corporate Affairs the financialstatements for the year ended on March 31 2022 has been prepared in accordance with theIndian Accounting Standards (IND AS) notified under Section 133 of the Companies Act 2013read with the Companies (Accounts) Rules 2014 as amended from time to time. The estimatesand judgments relating to the Financial Statements are made on a prudent basis so as toreflect in a true and fair manner the form and substance of transactions reasonablypresent the Company?s state of affairs profits and cash flows for the year endedMarch 31 2022. The Notes to the Financial Statements adequately cover the AuditedStatements and form an integral part of this report.
7. INCOME TAX REFUND
The demand raised by the Income Tax Department as quashed by the CITAppeals earlier has been affirmed by the Income Tax Appellate Tribunal (ITAT) Further thecompany has received a refund of Rs 64.35 Lakhs including interest of RS5.68 Lakhs againstthe deposit of Rs 118.7 Lakhs the company is in the process of rectifying and receivingthe balance amount as adjusted by the department.
8. NEW ETHANOL DIVISION
The company has embarked the diversification with more focus onestablishing Ethanol Plant & division the plant will be designed to cater the futureneeds and is laid on the foundation to meet the Ethanol demand in the state of MadhyaPradesh & nearby surroundings state.
The Project will add 40 MLPA the new plant is exclusive for theEthanol Division for Sale to Oil & Petroleum Companies (OPC) the project outlay isexpected to be at around 120 crores (approximately) including all the modern-day utilitiesand facilities and expected to complete by end of financial year 2022-23.
9. CCI INVESTIGATION
The office of the Director General Competition Commission of India hasconducted a state wide investigation on the leading distillers of the state of MadhyaPradesh in the same line an investigation was carried out at the corporate office premisesof the company on 27th October 2021 The team examined the sale and supply of countryliquor (IMIL) and its tender process the company officials has extended full cooperationand furnished all explanation. Further the company is in the process of providingnecessary information and explanation as and when called and required by the CCI.
10.DIRECTORS? RESPONSIBILITY STATEMENT
As required under section 134(5) of the Companies Act 2013 theDirectors confirm that:
a) that in the preparation of the annual accounts the applicableaccounting standards have been followed.
b) that appropriate accounting policies have been selected and appliedconsistently and that judgments and estimates made are reasonable and prudent so as togive a true and fair view of the state of affairs of the company as on 31st March 2022and of its profit for the year ended on that date.
c) that proper and sufficient care has been taken for the maintenanceof adequate accounting records under the provisions of the Act for safeguarding the assetsof the Company and for preventing and detecting fraud and other irregularities.
d) that the annual financial statements have been prepared on a goingconcern basis.
e) that the directors had laid down internal financial control to befollowed by the company and that such internal financial control is adequate and wereoperating effectively.
f) that the director had devised proper system to ensure compliancewith the provision of all applicable laws and that such system were adequate and operatingeffectively.
11.COMPOSITION OF BOARD
Directors & KMP
The Board provides leadership strategic guidance objective andindependent view to the Company?s management while discharging its fiduciaryresponsibilities thereby ensuring that the management adheres to high standards of ethicstransparency and disclosure. The Board has constituted Audit Committee StakeholderRelationship Committee Nomination & Remuneration Committee Corporate SocialResponsibility Committee and Risk Management Committee. Mr. Tushar Bhandari (DIN:03583114) and Mr. Sanjay Kumar Tibrewal (DIN 00737877) are the Whole Time Directors of thecompany the company has appointed adequate Key Managerial Personnel?s as perrequirements of Section 203 of the Companies Act 2013.
Declaration of Independence
The Independent Directors of the Company have given declarations thatthey meet the criteria of independence as laid down under Section 149(6) of the CompaniesAct 2013 and Regulation 16(1) (b) of the Listing Regulations. In the opinion of theBoard the Independent Directors fulfill the conditions of independence specified inSection 149(6) of the Act and Regulation 16(1) (b) of the Listing Regulations.
The Independent Directors have also confirmed that they have compliedwith 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 Act2013 and Company?s Articles of Association Mr. Tushar Bhandari (DIN: 03583114)Director retires by rotation at the forthcoming Annual General Meeting and being eligibleoffers himself for reappointment. The Board has recommended his appointment for theconsideration of the members at the forthcoming AGM. Brief profile of Mr. Tushar Bhandarihas been given in the Notice convening this AGM.
Resignation of Directors
Mr. Manish Kumar Tibrewal (DIN: 00747559) Director of the company hasresigned on 28th May 2021. the director has resigned on the grounds that their personalambitions priorities and plans are different out of change in priorities and goals thusthey wish to quit the directorship of the company.
The Board has placed on record special thanks for the time rendered byhim during their tenure and wishes him all the best in their future endeavors.
12.KEY MANAGERIAL PERSONNEL
1. Mr. Tushar Bhandari - Whole Time Director
2. Mr. Sanjay Kumar Tibrewal - Whole Time Director
3. Mr. Sumit Jaitely Company Secretary
Mr. Rahul Tiwari Chief Financial officer of the company has resignedw.e.f. 30.11.2021 who was appointed on 13th April 2021.The Board has placed on recordspecial thanks for the time rendered by him during their tenure and wishes him all thebest in their future endeavors. Mr Sanjay Kumar Tibrewal has been appointed as the ChiefFinancial Officer designated as Whole Time Director & CFO w.e.f. 25.05.2022
During the year Seven (7) Board Four (4) Audit Committee Three (3)Stakeholders Relationship Committee One (1) Nomination & Remuneration Committee Two(2) CSR Committee Meetings and One (1) Risk Management Committee Meeting were convened andheld.
14.PERFORMANCE EVALUATION OF BOARD COMMITTEES & DIRECTORS
Pursuant to the provisions of the Companies Act 2013 and theRegulation 25 SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Board of Directors adopted a formal mechanism for evaluating its performance and aswell as that of its committees and individual Directors.. The Directors were satisfiedwith the evaluation results which reflected overall engagement of the Board and itsCommittees with the Company.
15.CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As part of its initiatives under "Corporate SocialResponsibility" (CSR) the company has constituted Corporate Social ResponsibilityCommittee. The CSR Committee has framed the CSR policy of the company. The Committee hasmade expenditure which form part of this report.
Annual Report on CSR activities is annexed herewith as:
The Company has complied with the mandatory provisions of CorporateGovernance as prescribed in the Regulation 27 of the SEBI (LODR) Regulations 2015 asapplicable to the Company. A separate report on Corporate Governance and Auditors Reportthereon are included as part of the Annual Report.
17.RELATED PARTY TRANSACTIONS
All related party transactions that were entered during the financialyear were on an arm?s length basis and were in the ordinary course of business andthat the provision of section 188 of the Companies Act 2013 and the Rules made thereunderare not attracted. Thus disclosure in form AOC-2 in terms of section 134 of the CompaniesAct 2013 is not required. Further there is no material related party transaction duringthe year under review with the Promoter Directors or Key Managerial Personnel All relatedparty transactions are places before the Audit Committee as also the Board of Directorsfor approval. Omnibus approval was obtained on a yearly basis for transactions which arerepetitive in nature.
18.RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The Company?s system of financial and compliance controls withreference to the financial statements and risk management is embedded in the businessprocess by which the Company pursues its objectives.
Management is responsible for establishing and maintaining adequatedisclosure controls and procedures and adequate internal controls over financial reportingwith respect to financial statements besides its effectiveness in the context ofapplicable regulations.
The Internal Auditor the Audit Committee as well as the Board ofDirectors conduct from time to time an evaluation of the adequacy and effectiveness of thesystem of internal controls for financial reporting with respect to financial statements.
M/s Singhi & Co. Chartered Accountants Kolkata FRN (302049E) wereappointed as Statutory Auditors of your company at the 28th Annual General Meeting held on05th August 2017 for a term of five consecutive years upto the conclusion of 33rd AnnualGeneral Meeting.
The term of 5 years in accordance with section 139(2) of the CompaniesAct 2013 is completed in the financial year ended 31.03.2022 and will hold office uptothe conclusion of the 33rd Annual General Meeting. The appointment/ reappointment of thestatutory auditor is due at the ensuing 33rd Annual General Meeting.
The Report given by the Auditors on the financial statement of thecompany forms part of this Report and are self-explanatory. There has been noqualification reservation adverse remark or disclaimer given by the Auditors in theirReport.
The Board of Directors under section 204(1) of the Companies Act 2013read with the Companies (Appointment and Remuneration of Management Personnel) Rules 2014has appointed M/s K. Arun & Co. (Practicing Company Secretaries) Kolkata to conductsecretarial audit of the company for the financial year 2021-22. The Secretarial Auditreport for the Financial Year ended 31st March 2022 is annexed herewith as "AnnexureC" and forms part of this report. The report is self-explanatory and do not call forany comments.
Further the Board has appointed M/s K. Arun & Co. (PracticingCompany Secretaries) Kolkata as Secretarial Auditor for the financial year 2022-23.
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act theAnnual Return as on 31st March 2022 is available on the Company?s website onhttps://www.associatedalcohols. com/form-mgt-7/
22.CONSERVATION OF ENERGY TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE EARNINGS / OUTGO
Information required under Section 134(3) (m) of the Companies Act2013 read with Rule 8(3) of the Companies (Account) Rules 2014 with respect toconservation of energy technology absorption and foreign exchange earnings/ outgo isappended hereto as "Annexure D" and forms part of this report.
23.PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS UNDER SECTION 186OF THE COMPANIES ACT 2013
The particulars of Loans Guarantees and Investment in pursuance toSection 186 of the Companies Act 2013 are given in the Notes to the financial statements.
During the year your company has not accepted any deposit from publicunder Section 73 of the Companies Act 2013 and Companies (Acceptance of Deposit) Rules2014.
Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theyear under review:
Issue of equity shares with differential rights as to dividendvoting or otherwise.
Issue of shares (including sweat equity shares) to employees ofthe Company under any scheme.
No significant or material orders were passed by the Regulatorsor Courts or Tribunals which impact the going concern status and Company?s operationsin future.
During the year under review there were no cases filed orreported pursuant to the sexual harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.
No instances of fraud reported by auditor under 143(12) of theCompanies Act 2013.
26.PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURE
The relation between the employees and the management has been cordialthroughout the year under review and the Directors place on record their appreciation forthe efficient services rendered by the employees at all levels.
Disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed hereto as "Annexure A" and forms part of this report.
27.VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The company has a Vigil Mechanism/Whistle Blower Policy to deal withinstance of fraud and mismanagement if any. The details of the policy is explained in theCorporate Governance Report and also posted on the website of the company.
28.INTERNAL COMPLAINTS COMMITTEE
As per the requirements of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 the company has constituted InternalComplaints Committee (ICC) as per the requirements.
29.DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS
Your Directors express their sincere appreciation for the cooperationand support received from shareholders bankers financial institutions regulatorybodies customers suppliers employees and other business constituents during the yearunder review.