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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 21st Annual Reporttogether with the Audited Financial Statements of your Company for the year ended 31stMarch 2021.

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 2021 31st March 2020
Total Revenue 700404895 564221146
Less: Total expenses 656918532 506677911
Profit Before Exceptional And Extraordinary Items And Tax 43486363 57543235
Exceptional Items - -
Profit Before Extraordinary Items And Tax 43486363 57543235
Extraordinary Items - -
Add / (Less) : Prior Period Incomes / (Expenses) - -
Add : Excess / (Short) Provision of Taxation For Previous Years - -
Profit Before Tax 43486363 57543235
Tax Expense:
Less : Current Tax 9041771 9605200
Earlier Year Tax 168442 144003
Deferred Tax 674790 12927048
Mat Credit Entitlements 2936871 (6251774)
Profit (Loss) For The Year 30664489 41118758

REVIEW OF OPERATIONS AND FUTURE OUTLOOK

The Company generated revenue of Rs. 700404895/- during the current year as againstrevenue of Rs. 564221146/- generated in the preceding year. The operations of theCompany have resulted into post tax profit of Rs. 30664489 /- against post tax profitof Rs. 41118758/- in the preceding year.

Company is engaged in the production of various types of Alcohol viz Rectified SpiritExtra Neutral Alcohol and Denatured Spirit.

The Government of India initiated the use of Ethanol as an automotive fuel in the year2003 and issued a notification for mandatory blending of 5% Ethanol. Recently theGovernment of India has advanced the target for 20% Ethanol blending in petrol. This is anopportunity to Distillers since Rectified Spirit is a raw material for Ethanol production.

In consideration of huge availability of raw material and substantial profit marginManagement has obtained necessary licenses for Ethanol production and erection of plantand machinery is in progress.

Management is hopeful to start commercial production by month of November 2021.

DIVIDEND

Owing to the growing business needs and the necessity to plough back the profits in thebusiness your Directors do not recommend any dividend for the year.

TRANSFER TO RESERVES

The Board of Directors do not recommend to carry any amount to reserves.

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 Five (5) times during the year under review on 30th June2020 24th August 2020 29th September 2020 12th November 2020 and 6th March 2021respectively. Notice of meetings with agenda along with necessary details was sent to theDirectors in time.

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

Name of Director Board Meetings held during the Board Meeting Attended
tenure of Director
Mr. Dharampal Kalani 5 5
Mr. Amardeepsingh Sethi 5 5
Mr. Kanyalal Kalani 5 5
Mrs. Jagjitkaur Sethi 5 4
Mr. Karan Yadav 5 5
Mr. Ashokchandra Dhish 1 1
Mr. Prakash Sawant 5 4
Mr. Tanaji Yadav 5 5
Mr. Avinash Salunke 5 4
Mr. Dilip Mutalik 4 3

COMMITTEES OF THE BOARD:

i. Audit Committee

Composition of Audit Committee of the Company as follows:

Name of the Member Category
Mr. Avinash Salunke Chairman & Independent Director
Mr. Prakash Sawant Independent Director
Mr. Dharampal Kalani Managing Director

ii. Nomination and Remuneration Committee

Composition of Nomination and Remuneration Committee as follows:

Name of the Member Category
Mr. Avinash Salunke Chairman & Independent Director
Mr. Prakash Sawant Independent Director
Mrs. Jagjitkaur Sethi Non-executive Director

iii. Stakeholders Relationship Committee

Composition of Stakeholders Relationship Committee as follows:

Name of the Member Category
Mr. Avinash Salunke Chairman & Independent Director
Mr. Prakash Sawant Independent Director
Mr. Dharampal Kalani Managing Director

iv. Corporate Social Responsibility Committee

Composition of Corporate Social Responsibility Committee as follows:

Name of the Member Category
Mr. Dharampal Kalani Chairman & Managing Director
Mr. Avinash Salunke Independent Director
Mr. Prakash Sawant Independent Director

Note: Audit Committee Nomination and Remuneration Committee and StakeholdersRelationship Committee re-constituted through passing resolution by circular on 17thAugust 2020.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with Section 152 of the Companies Act 2013 Mrs. JagjitkaurAmardeepsingh Sethi (DIN: 01825035) and Mr. Karan Vallabh Yadav (DIN: 07587347) areretiring by rotation at this Annual General Meeting and being eligible have offeredthemselves for re-appointment.

Mr. Dilip Mutalik was appointed as an Additional Independent Director by the Board ofDirectors of the Company in their Board Meeting held on 24th August 2020 on recommendationof the Nomination & Remuneration Committee of the Board. Further his designation waschanged from Additional Independent Director to Independent Director with effect from 29thSeptember 2020.

During the year under review Mr. Chetan Kumbhojkar resigned w.e.f. 28th September 2020as a Company Secretary and Mr. Manish Garad was appointed as a Company Secretary of theCompany w.e.f. 29th September 2020.

Board on recommendation of Nomination and Remuneration Committee re-appointment of Mr.Amardeepsingh Sethi as Whole-Time Director for a period of 5 years with effect from 13thJune 2021 subject to approval of members in the ensuing Annual General Meeting.

Board on recommendation of Nomination and Remuneration Committee re-appointment of Mr.Dharampal Kalani as Managing Director for a period of 5 years with effect from 13th June2021 subject to approval of members in the ensuing Annual General Meeting.

Board on recommendation of Nomination and Remuneration Committee re-appointment of Mr.Karan Yadav as Whole-Time Director for a period of 3 years with effect from 1st September2021 subject to approval of members in the ensuing Annual General Meeting.

Board on recommendation of Nomination and Remuneration Committee re-appointment of Mr.Tanaji Yadav as Whole-Time Director for a period of 3 years with effect from 1stSeptember 2021 subject to approval of members in the ensuing Annual General Meeting.

Board on recommendation of Nomination and Remuneration Committee re-appointment of Mr.Prakash Madhavrao Sawant as Independent Director not liable to retire by rotation for aperiod of consecutive 5 years with effect from 19th September 2021 subject to approval ofmembers in the ensuing Annual General Meeting.

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

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

Pursuant to the provisions of Section 139 142 and other applicable provisions if anyof the Companies Act 2013 read with Companies (Audit and Auditors) Rules 2014 (includingany statutory modification(s) or re-enactment thereof for the time being in force) and inpursuance to resolution passed by the members of the Company at the Annual General Meetingdated September 28 2019 for appointment of M/s. Kale & Associates CharteredAccountants (FRN: 114144W) as statutory auditor of the Company for a block subsequentfive financial years ending 31st March 2024.

The Statutory Auditors' Report does not contain any qualification reservation oradverse 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 year2020-21.

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

The Secretarial Auditors' Comment/observation

i. There was some delay in filing e forms with the Ministry of Corporate Affairs;

Management Response: The delay was due to inadvertence. The company has takensufficient precautions not to repeat such instance in future.

ii. The Firm of Statutory Auditor of the Company was not peer reviewed as per therequirement of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.

Management Response - The firm of Statutory auditors is under process of getting peerreviewed in due course of time.

COST AUDITORS

The Company is required to have the audit of its cost records conducted by a CostAccountant in Practice. In this connection the Audit Committee has recommended to theBoard of Directors and the Board of Directors has approved the appointment of M/s. Dargad& Associates Cost Accountants as Cost Auditors of the Company to conduct the CostAudit Functions for the financial year 2020-21.

As required under the provisions of Companies Act 2013 a resolution seeking membersapproval for the remuneration payable to the Cost Auditors forms part of the Noticeconvening the Annual General Meeting of the Company.

SHARE CAPITAL

The paid up share capital of the Company as on 31st March 2021 was Rs. 8.20 Crores.During the year under review the Company has not issued any types shares.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Particulars of loans given investments made guarantees given and securities providedare provided in the below mentioned table:

Particulars Amount (Rs.)
1. Loans
i) Loans given during the year 101255002/
2. Details of Investment
i) Investment in The Saraswat Co-op Bank Ltd 26300/-
ii) Investment in Other 2000/-
3. Details of Guarantee's / Securities Provided -
Total 101283302/-

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

COVID-19 IMPACT

Global disruption caused by CoVID-19 combined with a total lockdown has resulted insignificant economic contraction in India. However the Company got orders for productionof alcohol-based sanitizer.

Considering the opportunities threats and strengths of your Company managementcontinuously works for increasing the productivity of the Company.

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.

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 company's 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“Annexure V” 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.

Pursuant to the provisions of the Companies Act 2013 the Board has carried outperformance evaluation of its own performance and that of its committees and individualDirectors.

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.

VIGIL MECHANISM

Pursuant to Section 177 of the Companies Act 2013 read with Rule 7 of the Companies(Meetings of Board and its Power) Rules 2014 the vigil mechanism policy is alreadyadopted by board of Directors.

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.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVE

Pursuant to the provisions of Section 135 of the Companies Act 2013 and Rule 5 of theCompanies (CSR Policy) Rules 2014 the Board of Directors of your Company have alreadyconstituted a Corporate Social Responsibility (CSR) Committee.

Following are the present members of the CSR Committee.

Name of the Member Category
Mr. Dharampal Kalani Chairman & Managing Director
Mr. Avinash Salunke Independent Director
Mr. Prakash Sawant Independent Director

The CSR Committee met 2 (Two) times during the year i.e. on 21st August 2020 and 29thSeptember 2020. All the Members of the CSR Committee were present at both the Meetings.

The CSR Committee has formulated the CSR Policy and has recommended the activities tobe undertaken by the Company as specified under Schedule VII of the Companies Act 2013.

Pursuant to Rule 8 of the Companies (CSR Policy) Rules 2014 the Report on CSRActivities for the financial year 2020-21 is enclosed as “Annexure VII”.

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 of
Aurangabad Distillery Limited
SD/-
Amardeepsingh Sethi
Chairman & Whole time Director
DIN: 00097644
Date: 07/09/2021
Place: Aurangabad

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