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Pioneer Distilleries Ltd.

BSE: 531879 Sector: Consumer
NSE: PIONDIST ISIN Code: INE889E01010
BSE 00:00 | 05 Jan Pioneer Distilleries Ltd
NSE 05:30 | 01 Jan Pioneer Distilleries Ltd
OPEN 166.00
PREVIOUS CLOSE 180.90
VOLUME 1782
52-Week high 204.95
52-Week low 128.00
P/E
Mkt Cap.(Rs cr) 242
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 166.00
CLOSE 180.90
VOLUME 1782
52-Week high 204.95
52-Week low 128.00
P/E
Mkt Cap.(Rs cr) 242
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Pioneer Distilleries Ltd. (PIONDIST) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 29 Annual Report('Report') of your Company and the audited financial statements for the year ended March31 2022.

FINANCIAL SNAPSHOT

The Summary of Financial Performance of the Company for the year2021-22 is as under:

(INR in Lakhs)

Particulars 2021-22 2020-21
Gross sales 19164 15794
Add: Other operating revenue 2006 946
Add: Other income 301 301
Total Income 21471 17041
Less: Cost of goods sold 16028 13309
Less: Other costs 5816 5598
Earnings before government grant depreciation interest and taxes (373) (1866)
Add: Government grant - (266)
Earnings before depreciation interest and taxes (373) (2131)
Less: Interest costs 3386 3212
Less: Depreciation 3437 3314
Earnings before taxes (7196) (8657)
Income tax expenses - -
Other comprehensive income (Net of tax) 6 (80)
Profit / (loss) available for appropriation (7190) (8737)

Performance of the Company

The Company has achieved a gross sales of Rs. 19164 Lakhs for thefinancial year ended March 31 2022 against the gross sales of Rs. 15794 Lakhs for thefinancial year ended March 31 2021. The Company has reported a loss of Rs. 7196 Lakhsbefore tax due to intermittent breakdowns in plant machineries external challengesleading to frequent shutdowns and delay in stabilization of operations

Board's responses to observations qualifications and adverse remarksin auditor's report

The statutory and secretarial auditors have given unqualified opinionon the financial statements and in the secretarial audit report for the year ended March31 2022 respectively and hence this is not applicable.

Board Meetings

During the year under review four Board Meetings were held. Thedetails of the same are covered in the Corporate Governance Report.

State of Company's Affairs

Except to the extent as stated under material changes and commitmentsthere have been no significant or material orders passed during the year by the regulatorsor Courts or Tribunals impacting the going concern status and the company's operations infuture.

The net worth of the Company has eroded and the current liabilitiesexceed the current assets as at the year-end. However the Management and the Board ofDirectors have reviewed the cash flow forecast for the next twelve months and based on theletter of financial support obtained from United Spirits Limited the holding companyhave concluded that there is no material uncertainty on the ability of the Company tocontinue as a going concern.

Material changes and commitments

As per directions issued by Maharashtra Pollution Control Board (MPCB)on November 26 2019 the Company had submitted High Density Polyethylene (HDPE) Pondcompletion report on May 17 2021 and the Company received the consent to operate for aperiod of 5 years with effect from September 01 2019 to August 31 2024.

A suo-moto case was initiated before the Office Of The Chairman Cum VIIAdditional District And Sessions Judge Mandal Legal Services Committee Nirmal againstthe Company based on the article published in the local newspaper. In response theCompany had also filed its affidavit. As per the last date of hearing viz. November 282019 and the reply and oral submissions filed by the Company the Court has adjourned thecase without fixing a date.

The water board has substantially increased the tariff on water andchanged the jurisdiction from Revenue department to Maharashtra Water Resources RegulatoryAuthority (MWRRA) thereby giving the control of supply and collection of charges towardsconsumption to Water Resources Department (WRD). As the hike in water charges was having asubstantial impact the Company had approached High Court of Bombay at Aurangabad Bench toavoid any hostile actions. The Company had also obtained a stay order in its favour fromthe Hon'ble High Court but subsequently withdrew the High Court petition andapproached the Primary Dispute Regulation Officer (PDRO).

The Company questioned the increase in levy of water tariff andsubmitted that the existing water source is a partly assured water supply and water isconsumed in the distillery as a process water. On April 27 2021 PDRO upheld the tarifflevied by WRD against which the Company filed an appeal before MWRRA under the provisionsof Maharashtra Water Resources Regulatory Authority Act 2005 on June 7 2021. The matteris pending before MWRRA for disposal.

The Management Discussion and Analysis Report read with the report onRisk Management contains impact on the business due to regulatory changes.

DEPOSITORY SYSTEM

The trading in the equity shares of your Company is under compulsorydematerialization mode. As on March 31

2022 equity shares representing 98.29% of the equity share capital arein dematerialization form. As the depository system offers numerous advantages membersare requested to take advantage of the same and avail of the facility of dematerializationof the Company's shares.

Members may please note that effective from 1 April 2019 shares of thelisted entity can be traded only in dematerialized mode pursuant to Securities andExchange Board of India (SEBI) notification SEBI/LAD-NRO/GN/2018/24 published on 08 June2018.

Change in nature of business if any

The details of change in nature of business if any are provided underManagement Discussion and Analysis Report and the Report on Risk Management forming partof this Report.

Dividend

In view of the accumulated losses of the preceding years yourdirectors could not recommend any dividend on equity shares of the Company.

Transfer to reserve

During the year under review there was no amount transferred toreserves of the Company.

Capital

The authorized share capital of your Company remains unchanged at20000000 equity shares of Rs. 10/- each. The issued subscribed and paid-up capital ofthe Company is 13388200 equity shares of Rs. 10/- each aggerating Rs.133882000.There was no change in the issued subscribed and paid-up capital of the Company duringthe year under review.

Appointment/Resignation of Directors and Key Managerial Personnel

(i) Re-appointment of Mr. Sanjeev Gupta

As per the provisions of the Companies Act 2013 Mr. Sanjeev Gupta(Mr. Gupta) retires by rotation at the ensuing annual general meeting (AGM) and beingeligible offered himself for re-appointment. Members may please note that Mr. Gupta whowas appointed as a director at the 27 AGM held on September 29 2020. Mr. Gupta is notdebarred from holding the directorship under any statutory regulations. Details about Mr.Gupta is provided in the Notice of the 29 annual general meeting of the Company.

(ii) Resignation of Mr. Gopal Kothari as Director

The Board at its meeting held on October 22 2021 noted the resignationof Mr. Gopal Kothari (Mr. Kothari) as a non-executive director of the Company with effectfrom October 22 2021.

(iii) Appointment of Mr. Nimish Shah as additional director

The Board through circular resolution passed on December 31 2021appointed Mr. Nimish Shah as additional director of the Board. It is proposed to appointhim as director subject to approval of shareholders in ensuing AGM

(iv) Appointment of Mr. Gopal Kothari as Chief Financial Officer

The Board at its meeting held on October 22 2021 appointed Mr. GopalKothari as Chief Financial Officer of the Company with effect from October 22 2021

(v) Resignation of Mr. B L Akshara as Company Secretary &appointment of Mr. J Swaminathan as

Company Secretary

The Board at its meeting held on October 22 2021 appointed Mr. JSwaminathan as Company Secretary with effect from October 23 2021 in the place of Mr. B LAkshara who resigned as a Company Secretary effective end of day October 22 2021.

(vi) Resignation of Mr. Sanjoy Sarkar as Chief Financial Officer

The Board at its meeting held on October 22 2021 noted the resignationof Mr. Sanjoy Sarkar Chief Financial Officer of the Company with effect from October 222021.

Brief profile of the directors being re-appointed/appointed areprovided in the Notice convening this Annual General Meeting (AGM) .

As per the declarations received no Director of the Company isdisqualified to be appointed as a Director of any public limited company in terms ofSection 164(2) of the Companies Act 2013.

Independent Directors

Your Company did not appoint any new Independent Director in thefinancial year 2021-22. Criteria for selection/appointment or reappointment of IndependentDirectors include skills expertise of the Director qualifications experience and domainknowledge. The required skills of Independent Directors are leadership managerialexperience diversity risk management and corporate governance. All our IndependentDirectors viz. Mr. R Krishnamurthy and Ms. Srivathsala K N possess the aforesaid skills.

Declaration from Independent Directors

Independent Directors have given a declaration pursuant to sub-section(6) of Section 149 of the Companies Act 2013. In the opinion of the Board IndependentDirectors fulfill the conditions specified in Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 (SEBI (LODR)Regulations) and are independent of the management.

Number of meetings of the Board

The details of the Board Meetings and other Committee Meetings heldduring the financial year 2021-22 are stated in the Corporate Governance Report which isforming part of this Report.

Board Committees

The Company has the following committees of the Board:

Audit Committee and Risk Management Committee

Nomination and Remuneration Committee

Stakeholders Relationship Committee

Corporate Social Responsibility Committee

The composition of each of the above Committees their respective rolesand responsibilities are provided in the

Corporate Governance Report which forms part of this Report.

Policies

The Company has adopted all policies as required to be maintained bythe Company under the provisions of the Companies Act 2013 and SEBI (LODR) Regulationsand the same are uploaded on the website of the Company wherever required and the salientfeatures of the policies are detailed in Corporate Governance Report.

Recommendations of the audit committee and other committees

All the recommendations of the Audit Committee and of the otherCommittees were accepted by the Board.

Details of remuneration to directors

As required under section 197(12) of the Companies Act 2013information relating to remuneration paid to Directors during the financial year 2021-22is provided in the Corporate Governance Report. The Company has also prepared a draftannual return in e-form MGT-7 for FY 2021-22 and uploaded the same on Company' swebsite at http;//pioneerdistilleries.com/downloads.php . Members may also note that theannual return uploaded on the website is a draft and the final annual return will beuploaded after the same is filed with the Ministry of Corporate Affairs (‘MCA').

As stated in the Corporate Governance Report sitting fees is paid toIndependent Directors for attending Board/Committee meetings. They are also entitled toreimbursement of actual travel expenses boarding and lodging conveyance and incidentalexpenses incurred in attending such meetings.

Board evaluation criteria

Pursuant to the provisions of the Companies Act 2013 and regulation 17of the SEBI (LODR) Regulations the Board has carried out an annual performanceevaluation based on parameters which inter alia include performance of the Boardon deciding strategy rating the composition & mix of Board members discharging oftheir duties and handling critical issues etc. The parameters for the performanceevaluation of the Directors include contribution made at the Board meeting attendanceinstances of sharing information on best practices applied in other industries domainknowledge vision strategy and engagement with senior management etc.

The Independent Directors at their separate meetings review theperformance of non-independent directors and the Board as a whole. Chairperson of theCompany after taking into account the views of Executive Director and non-executivedirectors reviews the quality quantity and timeliness of flow of information between themanagement and the Board for the Board to effectively and reasonably perform their duties.Based on the outcome of the performance evaluation exercise areas have been identifiedfor the Board to engage itself with and the same would be acted upon. The details of theevaluation process are set out in the Corporate Governance Report which forms part of thisReport.

Vigil Mechanism

At PDL we have an established whistle-blower mechanism known asSpeakUp which is being independently operated by a third-party agency. We encourage ouremployees or representatives acting on behalf of the Company to raise their complianceconcerns through this mechanism apart from other internal reporting channels viz. LineManager HR Business Partner Legal Business Partner and Business Integrity partner.

The SpeakUp channel is available athttps://pioneerdistilleries.com/speakup.php with services available in English and 5 otherregional languages and compliance concerns can be raised by any aggrieved person throughweb page or toll-free number. During the year we have introduced QR code to facilitatethe access to SpeakUp channel.

The quality of investigation reports and remedial actions are reviewedand monitored by the Global Business Integrity team and Diageo India Business Integrityteam. A structured Breach Management Standard is in place which is in line with the GlobalStandard for timely and conclusive resolution of compliance concerns raised through thewhistle blower mechanism.

During the year 2 cases have been reported through Speak-up channeland the same has been investigated and resolved with appropriate actions.

This vigil mechanism has been established to provide adequatesafeguards against the victimization of employees who avail this mechanism for reportingcomplaints and grievances in good faith and without fear of being punished for doing so.Access to the Chairman of the Audit and Risk Management Committee is provided as requiredunder the Companies Act 2013 and the SEBI (LODR) Regulations.

Related Party Transactions

The Company has formulated a policy on dealing with Related PartyTransactions (RPTs) which has been reviewed by the Audit and Risk Management Committee atregular intervals. This policy is available on the Company's website athttp://www.pioneerdistilleries.com/policies.php. All related party transactions that wereentered into during the financial year were at arm's length basis and were in theordinary course of business. Form AOC-2 pursuant to Section 134(3)(h) of the CompaniesAct 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014 is set out in the Annexure-3to this Report. In accordance with Ind AS 24 the RPTs are disclosed under notesforming part of the Financial Statements.

Meeting amongst Independent Directors

Schedule IV of the Companies Act 2013 SEBI (LODR) Regulations andSecretarial Standard - 1 on Meetings of the Board of Directors mandates that theIndependent Directors of the Company hold at least one meeting in a year without theattendance of Non-Independent Directors. The Independent Directors met amongst themselveswithout the presence of any other persons on May 07 2021 July 20 2021 and October 222021.

Auditors

I) Financial audit

M/s. Price Waterhouse & Co. Chartered Accountants LLP (FRN304026E/E-300009) were appointed as Statutory Auditors of your Company in the 24 AnnualGeneral Meeting (AGM) held on 28 July 2017 for a period of 5 years and their term comes toend at the conclusion of 29 AGM of the Company. The Audit Committee at their meeting heldon 19 May 2022 recommended the re-appointment of M/s Price Waterhouse & Co CharteredAccountants LLP (FRN 304026E/E-300009) ('PW') who have given their consent andwillingness to be re-appointed as Auditors of your Company. PW being one of the reputedinternational audit firm and given their expertise in the field of audit the Board ofDirectors at their meeting held on 19 May 2022 approved the recommendation of the AuditCommittee and proposed to re-appoint PW as Auditors of your Company for a period of 5years from the conclusion of the ensuing 29 AGM till the conclusion of the 34 AGM of theCompany subject to the approval of the members of the Company at the ensuing AGM.

(ii) Secretarial Audit

Pursuant to section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 a Secretarial Audithas been carried out by Mr. Sudhir V Hulyalkar Practicing Company Secretary (FCS: 6040and CP No. 6137) and his report is annexed as Annexure 2.

Reporting of fraud by Auditors

During the year under review neither the statutory auditors nor thesecretarial auditor have reported to the Audit Committee or the Board under section143(12) of the Companies Act 2013 any instances of fraud committed against the Companyby its officers or employees the details of which would need to be mentioned in thisReport.

Corporate Governance

A Corporate Governance Report is annexed separately as part of thisReport. Board confirms compliance with Secretarial Standards.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report is annexed separately aspart of this Report.

Fixed Deposits

The Company has not accepted any deposits from the public during theyear. There was no fixed deposit amount that remained unpaid/unclaimed as at the end ofthe year.

Annual Return

The draft Annual Return of the Company as on March 31 2022 in e-FormMGT - 7 in accordance with section 92(3) of the Companies Act 2013 read with theCompanies (Management and Administration) Rules 2014 is available on the website of theCompany at http://pioneerdistilleries.com/downloads.php

Transfer to Investor Education and Protection Fund (IEPF)

In terms of Sections 124 and 125 of the Act (erstwhile Section 205A(5)and 205 C of the Companies Act 1956) read with the Investor Education and ProtectionFund Authority (Accounting Audit Transfer and Refund) Rules 2016 ('IEPF Rules') bothof which were applicable with effect from September 07 2016 the unclaimed/unpaiddividend remaining unclaimed/unpaid for a period of seven years have been transferred tothe IEPF. There were no amount pending to be transferred to the IEPF account for thefinancial year ended March 31 2022.

Necessary compliance under Rule 3 of the Investor Education andProtection Fund (Uploading of information regarding unpaid and unclaimed amounts lyingwith Companies) Rules 2012 have been complied with.

Human Resources

Employee relations remained cordial during the year. The ratio of theremuneration of each director to the median employee's remuneration the names of the topten employees in terms of remuneration drawn and other details during the financial year2021-22 in terms of Section 197(12) of the Companies Act 2013 read with Rule 5(1) &(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are provided in Annexure 1 and also in the Corporate Governance Report. None of theemployee draws remuneration in excess of the limit prescribed under rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

Employee stock option scheme

Your Company has not offered any stock options to its employees duringthe year 2021-22 within the meaning of SEBI (Share Based Employee Benefits) Regulations2014.

Particulars of loans guarantees and investments

There are no loans given investments made guarantees givensecurities provided by the Company and acquired by way of subscription purchase orotherwise securities of any other body corporate which are covered under the provisions ofthe Section 186 of the Companies Act 2013.

Risk Management

The Company has a Risk Management framework. Risk evaluation by themanagement is an ongoing process within the organization and is periodically reviewed bythe Board of Directors. Risk Management has been made part of Audit Committee by renamingthe Audit Committee as Audit and Risk Management Committee. The Risk Management policyadopted by the Company has been explained in the Management Discussion and Analysis Reportwhich forms part of this Report.

Internal Financial Controls

Your Company has established and maintained a framework of InternalFinancial Controls and compliance systems. Based on Board's review of the effectiveness ofthe policies and procedures adopted by the Company for ensuring orderly and efficientconduct of its business including adherence to Company's policy safeguarding its assetsprevention and detection of frauds and errors and completeness of accounting records andtimely preparation of financial statements and the confirmation received from the externalparties the Board has satisfied itself that the Company has laid down internal financialcontrols commensurate with size of the Company and that such internal financial controlsare broadly adequate and are operating effectively. The certification by the auditors oninternal financial control forms part of the audit report.

Corporate Social Responsibility

The Corporate Social Responsibility (CSR) committee has been setup bythe Company. The composition and other details have been provided in the CorporateGovernance Report.

The Company and its employees have actively participated in engagingwith stakeholders and regulatory authorities so as to create positive impact of ourexistence and operations. This has widely been applauded and reflected with truecommitment of creating a sustainable socio-economic growth. Company has focused oncommunity wellbeing in the times of pandemic by helping the government to handle thepandemic situation by providing necessary infrastructure to the local governmentauthorities.

The company did not generate profits in the previous three financialyears and the Company continues to report losses and is operating on working capitalborrowed from banks and intercorporate loans and advances from the holding company.Therefore in FY 2021-22 company did not spend on CSR activities. The details are enclosedin

Annexure-5

The calculation of average of last 3 years profits is given below:

Period Rs.
FY 18-19 (809516722)
FY 19-20 (1085000000)
FY 20-21 (1085100000)
Total (2979616722)
Average of last three years profits u/s 198 (993205574)
2% of Average to be spent for FY 21-22 (19864111)

Conservation of energy technology absorption and foreign exchangeearnings and outgo

The particulars prescribed under section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are set out in Annexure4 to this Report.

Details of significant and material orders passed by the regulators orcourts impacting the going concern status and Company's operations in future pursuantto Rule 8 (5)(vii) of the Companies (Accounts) Rules 2014.

The Company has not received any significant or material orders passedby the regulators or courts or tribunals impacting the Company's going concern statuson the Company's operations in future.

Disclosure under the sexual harassment of women at workplace(prevention prohibition and redressal) Act 2013

As per requirements of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 (SHWWA) the Company has designed andimplemented a comprehensive policy and framework to promote a safe and secure workenvironment where every person at the workplace is treated with dignity and respect.Moreover the Company's policy is inclusive and gender neutral. Further the complaintredressal mechanism detailed in the policy ensures complete anonymity and confidentialityto the parties.

Internal Committees (IC) have been constituted as per the requirement.Maintaining the highest governance norms each Internal Committee has appointed memberswho are employees of the Company and an independent external member having extensiveexperience in the field. The ICs meet on a half yearly basis to discuss matters on policyawareness best practices judicial trends etc. During the year ICs have also beentrained on nuances of the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.

The Internal Committees role is to consider and resolve the complaintsreported on sexual harassment at workplace. Investigation is conducted and decisions aremade by the IC at the respective location and a senior woman employee is the presidingofficer on every case.

I) Number of complaints filed during the financial year ending 31stMarch 2022: No Sexual harassment complaint received during the financial year.

ii) Number of complaints disposed of during the financial year : Nil

iii) Number of complaints pending as on end of the financial year: Nil

To build awareness in this area the Company has been publishingnewsletter emailers posters conducting online training module and monthly inductiontraining for newly joined employees. Besides the refresher virtual training programmesare conducted in the organization on a continuous basis for employees (including bluecollared employees) consultants contractual employees and permanent/contractual workersin regional languages. The Internal Committee has also conducted informal sessions tocheck the pulse at the grassroot levels

Other Disclosures a) The Company has not issued equity shares withdifferential rights as to dividend voting or otherwise.

b) The Company has not issued any sweat equity shares to its directorsor employees.

c) No application has been made under the Insolvency and BankruptcyCode; hence the requirement to disclose the details of application made or any proceedingpending under the Insolvency and Bankruptcy Code 2016 (31 of 2016) during the year alongwith their status as at the end of the financial year is not applicable.

d) The requirement to disclose the details of difference between amountof the valuation done at the time of onetime settlement and the valuation done whiletaking loan from the Banks or Financial Institutions along with the reasons thereof isnot applicable.

Director's responsibility statement

Pursuant to Section 134 (5) of the Companies Act 2013 in relation tofinancial statements (together with the notes to such financial statements) for the year2021-22 the Board of Directors report that:

(I) in the preparation of the annual accounts for the financial yearended March 31 2022 the applicable accounting standards have been followed and there areno material departures;

(ii) the Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at March 31 2022and of the profit of the Company for year ended on that date;

(iii) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

(iv) the Directors have prepared the financial statements on a goingconcern basis;

(v) the Directors have laid down internal financial controls to befollowed by the Company commensurate with the size and nature of its business and thecomplexity of its operations and that such internal financial controls are adequate andare operating effectively.

(vi) Proper systems have been devised to ensure compliance with theprovisions of all applicable laws by implementing an automated process havingcomprehensive systems and securing reports of statutory compliances periodically from thefunctional unit and such systems are adequate and are operating effectively

Listing of equity shares of the Company

The equity shares of your Company continue to be listed with BSELimited and National Stock Exchange of India Limited (NSE). The Annual Listing fees forthe year 2022-23 have been paid to these stock exchanges.

Disclosure of compliance of secretarial standards:

The relevant Secretarial Standards issued by the Institute of CompanySecretaries of India (ICSI) related to the Board Meetings and General Meeting have beencomplied with by the Company.

Acknowledgment

Your Directors place on record their sincere appreciation for thesupport from employees shareholders customers suppliers banks auditors government ofMaharashtra Telangana & Karnataka and other business associates.

By Authority of the Board
Bengaluru R Krishnamurthy
Chairman
19 May 2022

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