Jagatjit Industries Ltd Directors Report

Dear Members,

Your Directors have pleasure in presenting the 78^th (Seventy Eighth) Annual Report on the business and operations of your Company along with the Audited Financial Statements for the Financial Year ended 31^st March, 2023.

FINANCIAL SUMMARY

The Board Report is prepared on the basis of standalone financial statements of the Company. The Companys financial performance for the year under review along with previous years figures is given hereunder: (Rs in Lacs)

	2022-23	2021-22
Profit/(Loss) for the year after charging all expenses excluding financing charges and depreciation	4913	3961
Deduct : Financing Charges	3051	2882
Cash Profit/(Loss)	1862	1079
Deduct: Depreciation/Amortization	1001	996
Profit/(Loss) for the year before taxation and exceptional Items	861	83
Exceptional Items –Income	-	-
Profit/(Loss) for the year before taxation and after exceptional Items	861	83
Tax Expenses
- Income tax adjustment related to earlier years	-	4
Profit/(Loss) after tax from discontinuing operations	58	(17)
Profit/(Loss) after tax for the year	919	62
Other Comprehensive Income
- Fair value changes in Equity Instruments	3	1
- Re-measurement Gains/(Losses) on defined Benefit Plans	140	26
- Tax Impact on Re-measurement Gains/(Losses) on defined Benefit Plans	-	-
Total Comprehensive Income for the period	1062	89

STATE OF COMPANYS AFFAIRS

During the year under review, the Gross Turnover (including income from Services & Other Sources) was Rs 62,561 Lacs as compared to Rs 50,392 Lacs during the previous year. The Company earned a profit before taxation of Rs 861 Lacs as compared to profit before taxation of Rs 83 Lacs during the previous year.

The turnaround strategy envisioned in the year 2019 led to significant changes. The improved profitability has instilled confidence in our investors, strengthened our market position and laid a solid foundation for sustainable growth and success in the future.

The Companys primary focus is in the business of manufacturing, distributing and selling of IMFL brands with intent to provide superior brands at affordable prices along with malted milk food business. During Financial Year 2022-23, the Company sold 3.15 million IMFL cases as against 2.66 million IMFL cases during the previous year. The Company is also engaged in manufacturing of Country liquor in the state of Punjab & Rajasthan, where it recorded gross volume of around 2.07 million cases. The Company is also planning to expand its export markets from 13 to 15 countries, with Nigeria and Russia as the new destinations for export.

Your Companys focus is the operationalization of our grain-based ethanol manufacturing plant in FY 2024-25, which is a crucial step in order to significantly contribute to the Companys revenus and profitability. The Company is also aiming to broaden the consumer base and fuel further growth, eventually reaching 22 states. The Company is continuously focusing on production of Extra Neutral Alcohol (ENA) and it had positive bearing on the performance of the Company in Financial Year 2022-23 by utilising its capacity and expects reasonable overall growth in future years also.

TRANSFER TO GENERAL RESERVE

During the year under review, no amount was transferred to General Reserve.

DIVIDEND

The Board proposes to utilize the profits for the operations of the Company and accordingly do not recommend any dividend.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and to the date of this Report.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the year under review, there was no material change in the nature of business of the Company.

SHARE CAPITAL

During the year under review, there was no change in the Authorized Share Capital of the Company. However, due to allotment of 1,67,516 equity shares to the eligible employees under Jagatjit Industries Limited Stock Incentive Plan, 2021, the paid-up share capital as on 31^st March, 2023 increased from Rs 46,14,81,120 to Rs 46,31,56,280.

EMPLOYEES STOCK INCENTIVE PLAN

Pursuant to the approval of shareholders in the 76^th Annual General Meeting held on 30^th September, 2021, the Company has introduced and implemented the "Jagatjit Industries Limited Stock Incentive Plan, 2021" ("JIL SIP 2021" / "Plan"), in accordance with the provisions of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. The Nomination and Remuneration Committee ("NRC Committee") of the Board administers and monitors the JIL SIP 2021. During the year under review the NRC Committee had granted 4,83,000 stock options at an exercise price of Rs 10/- per stock option on 25^th April, 2022.

Disclosures required under Regulation 14 of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 relating to Employees Stock Options as at 31^st March, 2023 are given in ‘Annexure-1 to this Report. Further, a certificate from the Secretarial Auditors on the implementation of the Companys Employees Stock Incentive Plan will be available at the ensuing Annual General Meeting for the inspection of the Members.

FIXED DEPOSITS

During the year under review, the Company has not accepted any deposits, falling within the ambit of Section 73 of the Companies Act, 2013 ("the Act") and the Companies (Acceptance of Deposits) Rules, 2014.

As on 31^st March, 2023, outstanding deposits of 10 persons, which have become due for repayment amounting to Rs 6.5 Lacs remained unpaid. Out of this 1 person laid his claim for a deposit amounting to Rs 1 Lac. The balance amount of 9 persons amounting to Rs 5.5 Lacs has since been deposited in IEPF in accordance with the provisions of Section 125 of the Companies Act, 2013 read with relevant rules.

During the year under review, there has been no default in repayment of deposits or interest thereon.

HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES Holding Company:

As M/s LPJ Holdings Private Limited holds 65.17% voting rights in the Company i.e Jagatjit Industries Limited as on 31^st March, 2023 and by virtue of such holding M/s Jagatjit Industries Limited continued to be subsidiary company of M/s LPJ Holdings Private Limited as per the provisions of Section 2(87) of the Companies Act, 2013.

Subsidiary and Associate Companies:

During the year under review, M/s JIL Trading Private Limited, M/s L. P. Investments Limited, M/s Natwar Liquors Private Limited, M/s Sea Bird Securities Private Limited and M/s S. R. K. Investments Private Limited continued to be the subsidiary companies of the Company.

M/s Yoofy Computech Private Limited, one of the subsidiary Companies, not being in operations, had applied to the Registrar of Companies (ROC) for striking off its name. As the name of the Company has been struck off from ROC records, M/s Yoofy Computech Private Limited ceased to be the subsidiary of the Company.

During the year under review, M/s Hyderabad Distilleries & Wineries Private Limited continued to be an Associate Company of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of your Company for the Financial Year 2022-23 are prepared in compliance with the applicable provisions of the Act, Indian Accounting Standards ("Ind ASs") and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI (LODR) Regulations) which shall be placed before the members in their forthcoming Annual General Meeting (AGM).

In accordance with Section 129 (3) of the Act, a statement containing the salient features of the financial statements of subsidiary/ associate companies is being provided as Annexure in Form AOC–1 to the consolidated financial statements of the Company and therefore not being repeated to avoid duplication.

DIRECTORS AND KEY MANAGERIAL PERSONNEL Retirement by Rotation

In accordance with the provisions of Section 152 of the Act and in terms of the Articles of Association of the Company, Mrs. Asha Saxena (DIN: 08079652), Non-Executive Director is liable to retire by rotation at the ensuing AGM and being eligible, offers herself for re-appointment. Your Board recommends her re-appointment.

Appointment / re-designation

Mrs. Asha Saxena (DIN: 08079652), who was appointed as an Additional Non-Executive Director of the Company by the Board of Directors w.e.f. 22^nd July, 2022 and in respect of whom the Company had received a notice in writing from a Member proposing her candidature for the office of Director, was appointed as Director of the Company liable to retire by rotation, in the 77^th Annual General Meeting of the Company held on 30^th September, 2022.

Mrs. Sushma Sagar (DIN: 02582144), who was appointed as a Director liable to retire by rotation and whose candidature for the office of Independent Director was recommended by the Nomination and Remuneration Committee and the Board of Directors, had been re-designated as Independent Director of the Company not liable to retire by rotation, to hold office for a term of five years, with effect from 22^nd July, 2022. The said appointment was confirmed by the shareholders in the 77^th AGM of the Company held on 30^th September, 2022.

Key Managerial Personnel

During the year under review, Mr. Ravi Manchanda, Managing Director, Mr. Anil Vanjani, Chief Executive Officer & CFO and Mr. Roopesh Kumar, Company Secretary continue to be the Key Managerial Personnel of your Company.

MEETINGS OF THE BOARD AND ITS COMMITTEES

The number of meetings of the Board and various Committees thereof are set out in the Corporate Governance Report which forms part of this report. The intervening gap between the meetings was within the period prescribed under the Act and SEBI (LODR) Regulations, as applicable.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) read with Section 134 (5) of the Act, the Directors state that:

(a) in the preparation of Annual Accounts for the year ended 31^st March, 2023, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

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

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts of the Company on a going concern basis;

(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

DETAILS IN RESPECT OF FRAUDS REPORTED BY THE AUDITORS:

During the year under review, neither the Statutory Auditors nor the Secretarial Auditors have reported to the Audit Committee or the Board, under section 143(12) of the Companies Act, 2013 any instances of fraud committed against the Company by its officers or employees, the details of which need to be mentioned in this Report.

DECLARATION BY INDEPENDENT DIRECTORS

Your Company has received necessary declarations from each Independent Director that he/she meets the criteria of independence as laid down under the Act read with Schedule IV and Rules made thereunder, as well as SEBI (LODR) Regulations including any amendment thereof. The Board considered the independence of each of the Independent Directors in terms of above provisions and is of the view that they fulfill / meet the criteria of independence.

NOMINATION AND REMUNERATION POLICY OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

In accordance with the provisions of Section 178(1) of the Act read with Rules made thereunder and SEBI (LODR) Regulations, based on the recommendations of the Nomination and Remuneration Committee, the Board of Directors of the Company have approved a policy on nomination and remuneration of Directors, Key Managerial Personnel and other employees including criteria for determining qualifications, positive attributes, independence of a director and other matters provided U/s 178(4)of the Act. The broad parameters covered under the Policy are:

• Principle and Rationale

• Company Philosophy

• Guiding Principles

• Nomination of Directors

• Remuneration of Directors

• Evaluation of the Directors

• Nomination and Remuneration of the Key Managerial Personnel (other than Managing/ Whole-time Directors), Key-Executives and Senior Management.

• Remuneration of other employees.

The Companys Policy relating to appointment of Directors, payment of Managerial remuneration, Directors qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Act forms part of this report. The policy is available on the website of the Company i.e. www.jagatjit.com.

The policy is not being sent along with this Report to the members of the Company in line with the provisions of Section 136 of the Act. The aforesaid Policy is available for inspection by Members at the Registered Office of the Company up to the date of the ensuing AGM during the business hours on all working days, except Saturdays. Members who are interested in obtaining these particulars of the said policy may write to the Company Secretary at the Registered Office of the Company.

ANNUAL PERFORMANCE EVALUATION

Pursuant to the provisions of Section 134 (3) (p) of the Act and the rules made thereunder, the Board was required to carry out Annual Performance Evaluation of the Board, its Committees and individual Directors. Additionally, as per provision of Regulation 17 (10) of SEBI (LODR) Regulations and Schedule IV of the Act, the performance evaluation of the independent directors was also to be done by the Board of Directors. Accordingly, the Board has carried out the annual evaluation of the Directors individually including the Independent Directors (wherein the concerned director being evaluated did not participate), the Board as a whole and following Committees of the Board of Directors:

i) Audit Committee;

ii) Nomination and Remuneration Committee;

iii) Stakeholders Relationship Committee; and iv) Corporate Social Responsibility Committee.

The evaluation affirmed that the Board as a whole as well as all of its Members, individually and the Committees of the Board continued to display commitment to good governance, ensuring a constant improvement of processes and procedures.

It was acknowledged that every Director and the Committee of the Board contributed its best in the overall performance of the Company.

ANNUAL RETURN

In accordance with section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, the draft annual return in e-form MGT-7 for financial year 2022-23 has been uploaded on Companys website www.jagatjit.com. Members may also note that the annual return being uploaded on the website is a draft and the final annual return will be uploaded after the same is filed with the Ministry of Corporate Affairs (‘MCA).

AUDITORS AND AUDITORS REPORT

The Members of the Company vide their resolution passed at the 76^th (Seventy Sixth) AGM, appointed M/s. V. P. Jain & Associates, Chartered Accountants, New Delhi (FRN 015260N) as Statutory Auditors of the Company for a term of 5 (five) years to hold office from the conclusion of 76^th Annual General Meeting until the conclusion of the 81^st Annual General Meeting of the Company to be held in the calendar year 2026.

The Auditors Report does not contain any qualification, reservation or adverse remarks. Other observations of the Statutory Auditors in their reports on standalone and consolidated financial statements are self-explanatory and therefore do not call for any further comments.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Act read with corresponding Rules framed thereunder, M/s. Saqib & Associates, Company Secretaries were appointed as the Secretarial Auditors of the Company to carry out the Secretarial Audit of secretarial and related records of the Company for the Financial Year ended 31^st March, 2023.

A Secretarial Audit Report submitted by the Secretarial Auditors in Form No. MR-3 forms part of this report and is annexed herewith as Annexure-2.

ANNUAL SECRETARIAL COMPLIANCE REPORT

A Secretarial Compliance Report for the financial year ended 31^st March, 2023 on compliance of all applicable SEBI Regulations and circulars/guidelines issued thereunder, as received from M/s. Saqib & Associates, Company Secretaries, Secretarial Auditors of the Company, was submitted to the Bombay stock exchange.

COST AUDIT

Cost Audit Report for the financial year 2021-22 for Extra Neutral Alcohol (ENA) was duly filed by the Cost Auditors with the Ministry of Corporate Affairs within the due date of filing vide SRN F29272705 dated 13.10.2022.

The Company is maintaining applicable Cost Records as specified under Section 148 of the Companies Act, 2013 and the records for the Financial Year 2022-23 shall be audited by the Cost Auditors M/s. P. K. Verma & Co., Cost Accountants.

The Board of Directors, on the recommendation of the Audit Committee, has re-appointed M/s P. K. Verma & Co., Cost Accountants, Chandigarh (Firm Registration No. 0005111), as Cost Auditors of the Company for the financial year 2023-24, for conducting the audit of the cost records maintained by the Company for Extra Neutral Alcohol (ENA) product of the Company. A resolution seeking members ratification for the remuneration payable to the Cost Auditors for the financial year 2023-24 forms part of the notice of the 78^th Annual General Meeting of the Company and the same is recommended for your consideration and approval.

INTERNAL FINANCIAL CONTROLS

The Company generally has in place adequate Internal Financial Controls with reference to financial statements. During the year, such controls were tested, and the Auditors reported that the Company generally has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls were generally operating effectively as on 31^st March, 2023. In some areas, the controls were effective but need to be further strengthened. The Company is taking necessary steps to further strengthen the same. In view of the provisions under the Act the report on the Internal Financial Control issued by M/s. V. P. Jain & Associates, Chartered Accountants, the Statutory Auditors of the Company is annexed to the Audit Report on the Financial Statements of the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements and for the sake of brevity; the same are not being repeated.

RELATED PARTY TRANSACTIONS

All contracts / arrangements / transactions entered into by the Company with Related Parties, as defined under the Act and SEBI (LODR) Regulations, during the Financial Year 2022-23 were at arms length basis and in the ordinary course of business. As per the provisions of Section 188 of the Act and Rules made thereunder, read with Regulation 23 of SEBI (LODR) Regulations, your Company has obtained necessary approval of the Audit Committee before entering into such transactions and the same has been reviewed periodically.

Your Company has framed a Policy on Related Party Transactions in accordance with SEBI (LODR) Regulations and as per the amended provisions of the Act. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and related parties. The policy is uploaded on the website of the Company at www.jagatjit.com.

During the year, the Company has not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the aforesaid Policy of the Company on Related Party Transactions.

None of the transactions with any of the related parties were in conflict with the interest of the Company. Rather, they synchronised and synergised with the Companys operations. Attention of Members is drawn to the disclosure of transactions with the related parties set out in Note No. 34 of the Standalone Financial Statements, forming part of the Annual Report.

Since all the transactions which were entered into during the Financial Year 2022-23 were at arms length basis and were in the ordinary course of business and there was no material related party transaction entered by the Company during the Financial Year 2022-23 as per Related Party Transactions Policy, hence no details are required to be provided in Form AOC-2 prescribed under Clause (h) of Sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

CORPORATE SOCIAL RESPONSIBILITY [CSR]

The composition, role, functions and powers of the Corporate Social Responsibility (CSR) Committee of the Company are in accordance with the requirements of the Act. Presently, the CSR Committee comprises of Mrs. Kiran Kapur, Independent Director, Mrs. Anjali Varma, Non-Executive Director and Mr. Ravi Manchanda, Managing Director as Members.

The CSR Policy of the Company as approved by the CSR Committee is also available on the website of the Company at www.jagatjit.com. During the year under review, in terms of Section 135(5) of the Act, no such activities were required to be undertaken by the Company.

RISK MANAGEMENT

The Company is aware of the risks associated with the business. It regularly analyses and takes corrective actions for managing / mitigating the same. Your Companys Risk management framework ensures compliance with the provisions of SEBI (LODR) Regulations. Your Company has institutionalized the process for identifying, minimizing and mitigating risks which is periodically reviewed. Some of the risks identified and been acted upon by your Company are: securing critical resources; ensuring sustainable plant operations; cordial relations with the workers; ensuring cost competitiveness including logistics; maintaining and enhancing customer service standards and resolving environmental and safety related issues. The Board of Directors has adopted a formal Risk Management Policy for the Company and the same is available at the website of the Company at www.jagatjit.com. The Policy outlines the parameters of identification, assessment, monitoring and mitigation of various risks which are key to business objectives.

REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES

The information required to be disclosed in the Boards Report pursuant to Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for the year ended 31^st March, 2023 forms part of this report.

The above is not being sent along with this Report to the Members of the Company in line with the provision of Section 136 of the Act. The same is available for inspection by Members at the Registered Office of the Company upto the date of the ensuing AGM during the business hours on all working days, except Saturdays. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 forms part of this report and is annexed herewith as Annexure-3.

CORPORATE GOVERNANCE

Your Company upholds the standards of governance and is compliant with the Corporate Governance provisions as stipulated under SEBI (LODR) Regulations, in both letter and spirit. The Companys core values of honesty and transparency have since its inception been followed in every line of decision making. Setting the tone at the top, your Directors cumulatively at the Board level, advocate good governance standards at the Company. Your Company has been built on a strong foundation of good Corporate Governance.

Parameters of Statutory compliances evidencing the standards expected from a listed entity have been duly observed and a Report on Corporate Governance as well as the Certificate from M/s. Saqib & Associates, Company Secretaries, confirming compliance with the requirements of Regulation 34 read with Schedule-V of the SEBI (LODR) Regulations forms part of this report and is annexed herewith as Annexure-4.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report as stipulated under Regulation 34 read with Schedule-V of the SEBI (LODR) Regulations is presented in separate section forming part of the Annual Report.

LISTING OF SHARES OF THE COMPANY

The shares of your Company are listed on the BSE Limited. The Listing fees for the Financial Year 2023-24 has been paid to the BSE Limited.

RESEARCH AND DEVELOPMENT (R&D)

The Company takes regular steps for R&D in the manufacturing process and optimum utilization of its resources. No major capital investment was made for R&D during the year under review.

CAUTIONARY STATEMENT

Statements in the Boards Report and the Management Discussion & Analysis Report describing the Companys objectives, expectations or forecasts may be forward looking within the meaning of applicable security laws and Regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include economic and political conditions in India and other countries in which the Company operates, volatility in interest rates, changes in government regulations and policies, tax laws, statutes and other incidental factors. The Company does not undertake to update these statements.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transaction on these items during the year under review:-

1. Issue of equity shares with differential voting rights as to dividend, voting or otherwise.

2. The Managing Director of the Company does not receive any remuneration or commission from any of its subsidiaries.

3. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

4. Issue of Sweat Equity Shares.

5. Further, the Board of Directors also confirms that the Company is in regular compliance of applicable provisions of Secretarial Standards issued by the Institute of Company Secretaries of India.

ACKNOWLEDGEMENT

The Directors wish to place on record their appreciation for the sincere services rendered by employees of the Company at all levels. Your Directors also wish to place on record their appreciation for the valuable co-operation and support received from the Government of India, State Governments, the Banks / Financial Institutions and other stakeholders such as, shareholders, customers and suppliers, among others. The Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Companys success. The Directors look forward to their continued support in future.

For and on behalf of the Board
For Jagatjit Industries Limited
Ravi Manchanda	Sushma Sagar
Managing Director	Director
(DIN.00152760)	(DIN. 02582144)
Date : 14th August, 2023
Place : New Delhi