Tilaknagar Industries Ltd — Interim / Quarterly Report 2020

Oct 6, 2020

CIN: Ll5420PN1933PLC133303 Repstcrec1 Office: P 0 "Naknagar, Tal Shnrampur, 01st. Ahmednagar, Maharashtra-413 720 Cor~~rate Office: 3"' Floor, lndustnal Assurance Buildulg, Churchgatc, MumbaJ, Maharashtra-400 020 Emall mvcsto~tilind.com, Website: www.tihndcom, Phone: +91 22 22831716/18, Fax: +9122 22046904

ONUNE FILING

Ref: TI/BSE/COMP/2020-21/37

October 06, 2020

To, The Manager (Listmg), BSE Lim1ted, P.J. Towers, Dalal Street, Mumbai- 400 001 Ph: 022 2272 1233/34 Fax: 022 2272 19 19

Sub: Un-audited financial results (consolidated and standaloAe) of the Company for the quarter ended June 30. 2020 Ref: Scrip Code - 507205

Dear S1r/Madam,

We w1sh to mfonn you that the Board of 01rectors of the Company has, m 1ts Meetmg held on October 06, 2020, approved and took on record the un-aud1ted fmanctal results (consolidnted and standalone) of the Company for the quarter ended June 30, 2020. Coptes of the snme along with the Limited Review Reports submitted by M/s. Harshll Shah & Company, Statutory Auditors of the Company are enclosed hereWith pursuant to the prov1sions of Regulation 33 of the SEBl (LODR) Regulat1ons, 2015.

Please take note that the Meeting commenced nt 12·10 p m. and concluded at 01.35 p.m.

1

Kindly acknowledge the receipt and take the same on your record.

Thanking you,

Yours fmthfully,

Bacl: .,.

Limited Review Report on the Unaudited Quarterly Consolidated Financial Results of Tilaknagar Industries Limited pursuant to Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended

fo the Board of Directors of Tilaknagar Industries Limited

• I. We have reviewed the accompanying statement of unaudited consolidated financial results of Tilaknagar Industries Limited (hereinafter referred to as the "Holding Company") and its subsidiaries and Associate (collectively referred to as "the Group") for the quarter ended June 30, 2020 ("Consolidated Statement"), being submitted by the Holding Company pursuant to the requirements of Regulation 33 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ('Listing Regulations').
• 1. This Consolidated Statement, which is the responsibility of the Holding Company's management and approved by the Holding Company's Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34 "Interim Financial Reporting" ("Ind AS 34"), prescribed under Section 133 of the Companies Act, 2013, and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. Our responsibility is to express a conclusion on the Consolidated Statement based on our review.
• 1. We conducted our review of the Consolidated Statement in accordance with the Standard on Review Engagements (SRE) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued by the Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the financial statements arc free of material misstatement. A review of interim financi al information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We also performed procedures in accordance with the circular issued by the SEBI under Regulation 33 (8) of the Listing Regu lations to the extent applicable.

1. This Consolidated Statement includes the results of Holding Company and its fo ll owing Subsidiaries and Associate:

Holding Company
Tilaknagar Industries Ltd

I	I Subsidiaries:
2	Prag Distillery (P) Ltd
-'	Vahni Distilleries Pvt. Ltd
4	Kesarval Spring Distillers Pvt. Ltd
5	I I Punjab Expo Breweries Pvt. Ltd
16	Mykingdom Ventures Pvt. Ltd
7	Studd Proj ects P Ltd
8	Srirampur Grains Pvt. Ltd
9	Shivprabha Sugars Ltd
	Associate:
10	\1ason & Summers Marketing Services Pvt. Ltd

1. Attention is invited to the following:

(./\

• a. The Holding Company has not carried out impairment assessment of one of the ENA plants as required by Indian Accounting Standard (Ind AS 36) ' Impairment of Assets' though there is an indication of impairment. Reference is invited to note no. 6 of the consolidated statement.
• b. The Holding Company has not recognised impairment loss on long overdue advances given to certain parties amounting to Rs. 6074.08 lakhs as required by Indian Accounting Standard (Ind AS 1 09) 'Financial Instruments'. Reference is invited to note no. 7 of the consolidated statement.
• c. The following paragraph in was included in the review report dated October 5, 2020 issued on the unaudited financia l results of Prag Distillery (P) Ltd ("Prag"), a subsidiary company of the Holding Company issued by an Independent Firm of Chartered Accountants, is reproduced as under:
• We draw attention to note no. 6 of the Statement which states that the Company has incutTed capital expenditure of Rs. 10,038.63 lakhs as at June 30, 2020 on expansion project grouped under the head capital work in progress. Work on the said project has been suspended and has not been completed since many years. The Company has not tested the said proj ect for impairment loss as per Indian Accounting Standard (Ind AS 36) 'Impairment of Assets'. In absence of sufficient audit evidence, we were unable to determine the amount of impairment in the value of capital work in progress

• We draw attention to note no. 7 of the statement which states that there are unsecured overdue trade receivables of Rs. 586.55 lakhs from Andhra Pradesh Beverage Corporation Ltd. The management has not considered any provision for allowance on doubtful trade receivables/ expected credit loss though it is long overdue. In absence of sufficient appropriate audit evidence and balance confirmations, we arc unable to verify the recoverability amount of the trade receivables.

Note no. 6 and 7 of Prag as described above is reproduced as note no. ll and 12 to the consolidated statement respectively.

• 1. Based on our review conducted and procedures performed as stated in paragraph 3 above and based on the consideration of the review report of the other auditors referred to in paragraph 11 below and except for the possible effects of the matters described in paragraph 5 above, nothing has come to our attention that causes us to believe that the accompanying Consolidated Statement prepared in accordance with the recognition and measurement princ iples laid down in the aforesaid Indian Accounting Standard and other accounting principles generally accepted in India has not disclosed the information required to be disclosed in terms of Regulation 33 of the Listing Regulations including the manner in which it is to be disclosed, or that it contains any material misstatement.
• 1. The following paragraph in respect of material uncertainty related to going concern was included in the review report dated October 5, 2020 issued on the unaudited financial results of PunjabExpo Breweries Pvt Ltd ("Punj abexpo"), a subsidiary company of the Holding Company issued by an Independent firm of Chartered Accountants, is reproduced as under:

We draw attention to Note no. 6 of the statement which states that the Company has incurred a net loss of Rs. 257.40 lakhs during the quarter and the business operations have been scaled down significantly. The Company has accumulated losses of Rs. 1081.92 lakhs and its net worth has been fully eroded as at June 30, 2020. These conditions indicate that a material uncertainty exists that may cast a significant doubt about the Company's ability to continue as a going concern. However, the financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said Note. Our conclusion is not modified in respect of this matter.

Note no. 6 of Punjabcxpo as described above is reproduced as note no. 10 to the consolidated statement. Our conclusion is not modified in respect of this matter.

8 The following paragraph in respect of Material uncertainty related to going concern was included in the review report dated October 5, 2020 issued on the unaudited financial results of Prag Distillery (P) Ltd ("Prag"), a subsidiary company of the Holding Company issued by an Independent firm of Chattered Accountants, is reproduced as under :

We draw attention to Note no. 6 the statement which states that the Company has been referred to National Company Law Tribunal for Corporate Insolvency Resolution Process (CIRP) under the provisions of Insolvency and Bankruptcy Code 2016 (the Code). Further the Company has incurred net loss during the quarter ended June 30, 2020 and as of that date the business has ceased completely and there are defaults in repayment of bank loans. The uncertainty of the outcome of the NCL T proceedings and other events as mentioned above, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our conclusion IS not modified in respect of this matter.

Note no. 6 of Prag as described above is reproduced as note no. 11 to the consolidated statement. Our conclusion is not modified in respect of this matter.

1. The following Emphasis of matter was included in the audit report dated October 05, 2020 issued on the Financial Statements of Prag Distillery (P) Ltd ("Prag"), a subsidiary company of the Holding Company issued by an Independent firm of Chartered Accountants, is reproduced as under:

We draw attention to note no. 8 of the statement regarding the pending litigation between the Company and DCB Bank wherein the outcome of the matter is uncertain. Our conclusion is not modified in respect of this matter.

Note no. 8 of Prag as described above is reproduced as note no. 13 to the consolidated statement. Our conclusion is not modified in respect of this matter.

• 1. We draw attention to note no. 14 of the Consolidated statement which describes the assessment made by the management of the Holding Company that no material uncertainty exists on the Group's ability to continue as a Going concern despite the loss incurred during the qumter and erosion of Net worth and that the going concern assumption is appropriate in preparation of the statement. Our conclusion is not modified in this matter.
• 11. a. We did not review the interim financial statements /information of 8 subsidiaries included in the consolidated whose Ind AS financial statements include total revenue of Rs. 59.30 lakhs and total loss of Rs. 381.05 lakhs including other comprehensive income for the quarter ended June 30, 2020 as considered in the consolidated annual financial results. These interim financial information have been reviewed by other auditors whose reports have been furnished to us by the Management, and our conclusion on the Consolidated statement insofar as it relates to the amounts and disclosures included in respect of these subsidiaries is based solely on the reports of such auditors and the procedure performed by us as stated above. Our conclusion is not modified in respect of the above matter.

b. The Consolidated statement also include Group's share of loss /profit Rs Nil for the quarter ended June 30, 2020 as considered in the Consolidated statement in

respect of 1 Associate whose financial results have not been audited by us. The Financial information of the Associate is not available and the Group has provided its share of loss to the extent of the Investment. According to the information and explanation given to us by the management this financial information are not material to the Group.

Our conclusion is not modified in respect of the above matter.

1. Attention is drawn to the fact that the figures for the quarter ended March 31 , 2020 as reported in these consolidated financial results are the balancing figures between audited figures in respect of the full previous financial year and the published year to date figures up to the quarter ended December 31, 2019 which were subject to limited rev1ew

For Harshil Shah & Company Chartered Accountants lCAl Firm Reg. No. 141179W

HARSHIL SHAH

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Harshil Shah Partner Membership No. 124146

Place: Mumbai Date: October 06, 2020 ICAI UDIN: 20124146AAAADY3450

TILAKNAGAR INDUSTRIES L TO. (CIN: L 15420PN1933PLC133303)

Corporate Office: 3rd Floor, Industrial Assurance Building, Churchgate, Mumbai, Maharashtra- 400 020 Regd.Office: P.O. Tilaknagar, Tal. Shrirampur, Dist. Ahmed nagar, Maharashtra - 413 720

Email: investor@tilind.com; Website: www.tilind.com; Phone: +91 22 22831716/18; Fax: +91 22 22046904

	Statement of Consolidated Unaudited Fmanc1al Results for tne Quarter ended June 30. 2020
	Particulars	Quarter ended			Year ended
		30.06.2020	31 .03.2020	30.06.2019	31 .03.2020
		Unaudited	Audited	Unaudited	Audited
I	Revenue from operations	18,542.75	34,677.11	32,318.92	1,48,345.79
II	Other Income	30.63	2,514.12	132.35	2,994.22
Ill	Total Income (I + II)	18,573.38	37,191.23	32,451.27	1,51,340.01
IV	Expenses
	(a) Cost of matenals consumed	3,325 33	6,872.95	6,830.88	32 108.21
	(b) Purchases of stock-in-trade				-
	(c) Changes in mventones of fimshed goods, stock-m-trade and work-In-progress	(876.89)	1,660 04	184 53	3,112.09
	(d) Excise duty	12,904 56	19,065.40	18,813.39	83,063.01
	(e) Employee benefits expense	689.41	630.05	820.00	2,960 03
	Fmance costs (f)	1 72366	(1,305.99)	4.621 56	12.893 28
	(g) Depreciation and amortization expense	830 89	823.92	822.90	3,298.13
	(h) Other expenses	2,253.13	16,804 14	4,053.94	32,296.67
	Total expenses	20,850.09	44,550.51	36,147.20	1,69,731.42
v	Profit!( loss) before exceptional items and tax (III-IV)	(2,276.71)	(7,359.28)	(3,695.93)	(18,391.41)
VI	Exceptional items		45,518.35		45,518.35
VII	Profitl(loss) Before Tax (V+/-VI)	(2,276.71)	38,159.07	(3,695.93)	27,126.94
VIII	Tax Expense
	Current tax (a)		(1 0.93)		0.62
	Taxes for Earl1er Years (b)	3 21	120.34		120 34
	(c) Deferred tax				33.22 -
	(d) MAT	3.21	109.41		154.18
	Total tax expense Profiti(Loss) for the period before share of Profitl(loss) of associate (VII-VIII)
IX	Share of Profitl(l oss) of associate	(2,279.92)	38,049.66 -	(3,695.93)	26,972.76
X	Profit!( loss) for the period (IX+X)
XI XII		(2,279.92)	38,049.66	(3,695.93)	26,972.76
	Other Comprehensive lncome/(Loss)
	(a) Items that will not be reclassified to Profit & Loss	(3.46)
	(i) Remeasurement gain /(loss) in respect of the defined benefit plans		0.02	(4.40)	(1 3.85)
	(ii) Tax on above		-
	(b) Items that will be reclassified to Profit & Loss		-
	Total Other Comprehensive lncome/(Loss) for the period [(a) +(b)]	(3.46)	0.02	(4.40)	(13.85)
XIII	Total Comprehensive lncome/(l oss) for the period (XI+ XII)	(2,283.38)	38,049.68	(3,700.33)	26,958.91
XIV	Profit/Loss for the period attributable to
	(a) Owners of the Company	(2,279.92)	38,049.66	(3,695.93)	26,972.76
	(b) Non-Controlling Interests			-
XV	Other Comprehensive lncome/(loss) for the period attributable to
	(a) Owners of the Company	(3.46)	0.02	(4.40)	(13.85)
	(b) Non-Controlling Interests		-
XVI	Total Comprehensive lncome/(Loss) for the period attributable to
	(a) Owners of the Company	(2,283.38)	38,049.68	(3,700.33)	26,958.91
	(b) Non-Controlling Interests		-	-	-
XVII	Paid-up equity share capital (Face value of Rs. 10/- per Share)	12,513.38	12,513.38	12,513.38	12,513.38
XVIII	Reserves as per Balance Sheet of Previous Accounting Year				(14,250.66)
XIX	Earnings Per Equity Share of Rs. 10 /- each (not annualized)
	(a) Basic (Rs.)	(1 .82)	30 41	(2.96)	21.56

Notes

• The above ·esults have been reviewed by the Audit Committee and approved by the Board of Directors at its Meeting held on October 06, 2020 and have been subjected to a limited review by the Statutory Auditors.
• 2 The figures 'o the quarter ended March 31, 2020 are the balancing f1gures between the audited figures in respect of the full financial year and the published year to date figures (L.naudlted) upto the !h1rd quarter of the relevant financial year, which have been subjected to limited review by the Statutory Auditors.
• 3 The above results have been prepared m accordance with recogmtion and measurement principles laid down in the IND-AS 34 : Interim Financial Reporting prescribed unde1 Section 133 of the Companies Act, 201 3 read with relevant rules 1ssued thereunder and other accounting principles generally accepted in India.
• 4 The unaudited Consolidated financial results have been prepared by the Company in accordance with IND-AS 110: Consolidated Financial Statements and IND-AS 28: Accountmg for Investments in Associate in Consolidated Financial Statements prescribed under Section 133 of the Companies Act, 2013 and other recognized accounting prae11ces and polic1es.
• 5 The Company IS predominantly engaged in the business of manufacture and sale of Indian Made Foreign Liquor (IMFL) and its related products, which constitute a single business segment as per IND-AS 108: Operating Segments. Accordingly, disclosure in accordance with the provisions of Circular issued by the SEBI on July 05, 2016 is 11ot applicable
• 6 The Compan had applied to the State government authorities for dual feed permission for manufacture of ENA through molasses as well as grain at one of its ENA Plants. Perm,ss1on has been received for operating the fermentation section till September 02, 2021. It is expected that permission for operating the distillation section also will be received soon. In view of this, the management believes that there is no impairment in value of its ENA Plant and hence the recoverable amount of the ENA Plant is not required to be estimated.
• 7 In lieu of adv: nces g1ven to certain body corporales amounting toRs 6.074 08 lacs, the Company had received land from their holding company. The land received has been reg1stered in the name of the Company. The advances have not been adjusted against the dues to the said holding company pending completion of the merger formalities of the said body corporales with their holding company. In view of this, the management believes that no provision is considered necessary in the books of accounts

8 Except1ona items accounted during the prev1ous quarter ended March 31, 2020, as net mcome include the following :

a) Ounng 20 7 ·201 8, the Company had entered into a One Time Settlement (OTS) with Bank of India at Rs.9,500.00 lacs in full and final settlement of its dues payable over a period of three years The Company has paid Rs.3,000 00 lacs during the year ended March 31 , 2020 in compliance with the payment schedule of the OTS. Unlll the payment of last instalment, the Company continued to provide interest in books of accounts on the principal outstanding at original contracted rates. Consequent to the full and final payment to Bank of India, the Company has written back Rs.22,623.77 lacs being the difference between the OTS amounts paid and the .otal dues to Bank of India of Rs.32, 123.77 lacs, including Interest accounted in books of accounts.

b) During the prev1ous year, the Company entered into a One Time Settlement (OTS) with State Bank of India at Rs.1 0,200.00 lacs in full and final settlement of its outstanding '11/orking Capital dues of Rs. 29,727.26 lacs as per its books of accounts including interest at original contracted rates, pursuant to which the entire settlement amount has been paid before March 31 , 2020 in accordance with the terms and conditions of the OTS. Consequent to the full and final payment to State Bank of India, the Company has wntten back Rs.19,527.26 lacs being the difference between the OTS amounts paid and the total dues to State Bank of India includmg interest in books of accounts

c) Dunng the prev1ous year, the Company entered 1nto a One Time Settlement (OTS) with lOBI Ltd. at Rs.1 ,603.83 lacs in full and final settlement of its outstanding Working Cap1tal dues of Rs.4,971 .15 lacs including interest at original contracted rates, pursuant to which the entire settlement amount has been paid before March 31 , 2020 in accordance with the terms and conditions of the OTS. Consequent to the full and final payments to lOBI Ltd., the Company has written back Rs.3,367.32 lacs being the difference between the OTS amounts paid and the total dues to lOBI Ltd. including interest in books of accounts.

Consequent to the full and f1nal payments to the banks with respect to the above Compromise Settlements with the banks, the Company has written back in aggregate Rs. 45,51 8.35 lacs being the difference between the OTS amounts paid and the total dues to the various banks including interest in books of accounts on the pnncipal outstanding at anginal contracted rates

• 9 The Compa'ly has executed dunng the previous quarter ended March 31 2020, restructuring documents/agreements with Edelweiss Asset Reconstruction Company .1m1ted (EARC), acting as Trustee of EARC Trust SC233. EARC Trust SC241 and EARC Trust SC269, in favour of whom some of the Lender Banks and Financial Institution had ass1gned all the rights, title and interests in financial ass1stances granted by them to the Company with respect to restructuring of the debts owed to it by the Company. As per the terms of the restructuring documents/agreements the total dues of Rs 52,332.37 lacs were segregated into
• i) Restructured debt of Rs 34447 231acs carrying interest at the rate of 9% per annum payable in instalments by March 31, 2024

ii) Balance debt of Rs 14,498.38 lacs accruing Interest at the rate of 0.001% per annum, the payment. including the interest thereon, of which was to be waived on the repayment of the Restructured Debt to the Lender, to the satisfaction of Lender and

iii) Interest free Converted Balance debt of Rs. 3,386.75 to be converted into Eqwty shares.

Although certa1n on account payments were made to Edelweiss Asset Reconstruction Company Limited (EARC)., the Company had defaulted in repayment of principal dues of loans amounting to Rs. 1,000 00 lacs as per the terms of the restructuring documents/agreements with ' EARC. The said amount in default has since been paid on June 30, 2020.

The above has been recorded in the financ1al results as per the reqwrements of IND AS.

• 10 The net wo: tr o' PunjabExpo Brewer<es Pr•vate Limited ("PunjabExpo"), a subs1d1ary of Tl, has been eroded and has incurred net loss during the current quarter. However, the parent company is actively exploring the possibility of entering 1nto northern markets where Punjab Expo will be one of the major sources of supply. It is also in talks w1th other brand owners to enter into bottling arrangements for the said brand owners. This would significantly improve the capacity utilisation and have favourable 1m pact on the profitability of the PunjabExpo. Moreover, the Punjab Expo is also in the process of rationalization of its administrative overheads the effect of which is expected 1n the last quarter of 2020-21 The Board of Directors have assessed the above conditions and indicators and have come to the conclusion that no material uncertainty exists that may cast significant doubt on the Punjab Expo's ability to continue as a going concern taking into account the plans management has put in pla:e and the other mitigatmg factors described above
• 11 The National Company Law Tribunai("NCL T") has ordered for liquidation of Prag Distillery (P) ltd, wholly owned subsidiary of the Company ("Prag") vide its order No. MA 309/2018 in CP1067/ 201 7 dated July 26, 2018, as a going concern. The Official Liquidator having initiated the preliminary process of liquidation of Prag as a going conc~rn has sought for further direct1ons from NCL T in the matter, wh1ch is still awaited. Tilaknagar Industries ltd. has also submitted a formal proposal to the lenders for full and final settlement of all their claims, final approval for which IS awaited. Hence, the accounts of Prag have been prepared on a going concern basis. The 1mpa1rment, if any, of the project undertaken by Prag in earlier years will be considered on completion of the liquidation process/ final settlement as the case may be. as the recoverable value 1s not currently ascertainable
• 12 Trade Rece1vab1es of Prag Distillery (P) ltd, wholly owned subsidiary of the Company ("Prag"), include Rs. 586.55 lacs (March 31, 2020 Rs. 586.55 lacs) receivable from Andhra Pradesh Beverage Corporation ltd. towards sale of IMFL made by the Company in 2018-2019 and 2019-2020. Prag, through the Liquidator is in the process of f1 ,ng an application with National Company Law Tribunal for approval to initiate legal action against Andhra Pradesh Beverage Corporation Ltd. for recovery of the same. The Management believes that no provision for doubtful debts is required to be made against this receivable as the amount is expected to be received.
• 13 Prag Distillery (P) Ltd has filed an application w1th the Hon'ble National Company Law Tribunal seeking reversal of interest debited by DCB Bank during the Corporate Insolvency Resolution Process. The Hon'ble National Company Law Tribunal Had directed DCB Bank to reverse the interest debited. The said order has been appealed against by DCB bank with the Hon'ble National Company Law Appellate Tribunal and later with the Hon'ble Supreme Court of India, where the matter 1s currently pending. Prag has also filed a Miscellaneous Application to the Hon'ble National Company Law Tribunal against DCB Bank ltd., seeking removal of the lien marked on the bank account with DCB Bank and an order declaring the realisation/enforcement of security interest of DCB Bank ltd. as null and void. The said application 1s pending before the National Company Law Tribunal for further arguments.
• 14 The erosion of the net worth of the Group has been substantially recovered 1n the previous year and the negative networth stands at Rs 4,002.79 1acs as at June 30, 2020. This IS due to maJor reduction in debt resulting from compromise settlements with banks and entering into agreement, during the previous quarter ended March 31, 2020 with Edelweiss Asset Reconstruction Company Lim,ted ("EARC") acting as Trustee on behalf of Trustsin favour of whom some of the lender Banks and Financ1a Institution have assigned all the rights, Iitie and interests in financial assistances granted by them to the Company with respect to restructuring of the debts owed to it by the Company. The compromise settlements and restructuring agreement have significantly reduced the debt burden and consequential finance cost thereon the benefit whereof will continue to accrue m the years to come The Group has initiated the process of cost reduction, changes in business strategy and rationali: at,on of manpower which will strengthen its financial position.

In spite of the country wide lockdown due to the global pandemic affecting the operations in the first two months of the current year, ever since the staggered

resumption ,f operations, sales have started stabilising across the country w1th certain southern states showing substantial grow1h and is expected to match the

yearly estimates resulting in improved operational performance of the business 1n terms of sales, market share and margins. The Board of Directors have assessed the above conditions and mdicators and have come to the conclusion that no material uncertainty exists that may cast significant doubt on the Group's ability to contmue as a going concern taking into account the plans management has put in place and the other mitigating factors descnbed above.

15 Impact of COVID-1 9

The outbreak of Covld-1 9 pandemic continues to spread across India and g1ven its unpredictable and evolving nature, though most of the Group's manufacturing locations became operational from May 2020 I June 2020 onwards, temporary disruptions have occurred in some locations and units from time to time during the pendency o! a lockdown in that location. Management continues to implement appropriate action, as necessary, to scale up manufacturing operations in due compliance w1th the applicable laws Sales have resumed in a staggered manner across the country with the sale of beverage alcohol being permitted in most states. as per the Guidelines of the Government of India

Management has conSidered vanous internal and external information available up to the date of approval of financial results in assessing the impact of Covid-19 pandemic 1r the standalone 1 consolidated financ1al results for the quarter ended June 30, 2020 and will continue to monitor changes in future economic conditions. The eventual outcome of the impact of Covid-19 may be different from that estimated as on the date of approval of these financial results.

• 16 The Standlone and Consolidated audited financial results of the Company for the quarter ended June 30, 2020 are available on the Company's website (www.tilind com) and on the webs1te of BSE (www.bseindia.com) and NSE (www.nseindia.com).
• 17 The previous penod figures have been regrouped and reclassified wherever necessary.

By Order of the Board For Tilaknagar Industries Ltd.

A MIT DAHANUKAR Digitally sign~ by AMIT DAHANUKAR Dati!: 2020.10.06 12:45:36 +05'30'

Amit Dahanukar Chairman & Managing Director (DIN: 00305636)

Place: Mumbai Date : October 06, 2020 Limited Review Report on the Unaudited Quarterly Standalone Financial Results of Tilaknagar Industries Limited pursuant to Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended

To the Board of Directors of Tilaknagar Industries Limited

• I. We have reviewed the accompanying statement of unaudited standalone financial results of Tilaknagar Industries Limited ("the Company") for the quarter ended June 30, 2020 ("the Statement"), being submitted by the company pursuant to the requirement of Regulation 33 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ('Listing Regulations').
• 1. This Statement, which is the responsibility of the Company's management and approved by the Company's Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34 "Interim Financial Reporting" ("Ind AS 34"), prescribed under Section 133 of the Companies Act, 2013, as amended read with relevant rues issued thereunder and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on the Statement based on our review.
• 1. We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued by the Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review is limited primarily to inquiries of company personnel and an analytical procedure applied to financial data and thus provides less assurance than an audit. We have not performed an audit and accordingly, we do not express an audit opm10n.
• 1. a. The Company has not carried out impairment analysis of one of the ENA plants as required by Indian Accounting Standard (Ind AS 36) 'Impairment of Assets' though there is an indication of impairment. Reference is invited to note no. 5 of the standalone statement.

b. The company has not recognised provision for impairment of long overdue advances given to certain parties amounting to Rs. 6074.08 lakhs as required by Indian Accounting Standard (Ind AS 109) 'Financial Instruments'. Reference is invited to note no. 6 of the standalone statement.

c. The National Company Law Tribunal ("NCLT") has ordered for liquidation of Prag Distillery (P) Ltd ("Prag") wholly owned subsidiary of the Company, vide its order No. MA 309/2018 in CP1067/ 2017 dated July 26, 2018. However, the Company has not made impairment provision for equity investment of Rs. 1543.35

lakhs in Prag as required by lndian Accounting Standard (lnd AS 36) 'Impairment of assets'. Reference is invited to note no. 8 of the standalone statement.

d. PunjabExpo Breweries Private Limited ("Punjabexpo") wholly owned subsidiary of the Company, has incurred net loss during the year and due to accumulated losses, the net worth is negative. Despite adverse financial condition, the Management has not recognised provision for impainnent in equity investment of Rs. 1080.39 lakhs and advances given ofRs. 3502.55 lakhs to Punjabexpo as required by Indian Accounting Standard (Ind AS 36) 'Impairment of assets'. Reference is invited to note no. 9 of the standalone statement.

The above matters were also qualified in our report on the audited financial results for the quarter and year ended March 31, 2020.

• 1. Based on our review conducted and procedures performed as stated above, except for the possible effects for the matters described in paragraph 4 above. nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standard and other recognised accounting practices and policies generally accepted in India has not disclosed the information required to be disclosed in terms of Regulation 33 of the Listing Regulations including the manner in which it IS to be disclosed, or that it contains any material misstatement.
• 1. We draw attention to note no. 12 of the standalone statement which describes the assessment made by the management of the Company that no material uncertainty exists on the Company's ability to continue as a Going concern despite the loss incurred during the quarter and erosion of Net worth and that the going concern assumption is appropriate in preparation of the statement. Our conclusion is not modified in this matter.
• 1. Attention is drawn to the fact that the figures for the quarter ended March 31 , 2020 as reported in these financial results arc the balancing figures between audited figures in respect of the full previous financial year and the published year to date figures up to the quarter ended December 31, 2019 which were subj ect to limited review.

For Harshil Shah & Company Chartered Accountants ICAI Firm Reg. No. 141179W

HARSH IL SHAH ~~?~===.~~~.:

Harshil Shah Pmtncr Membership No. 124146 Place: Mumbai Date: October 06, 2020 ICAI UDIN: 20124146AAAADZ3279

TILAKNAGAR INDUSTRIES LTD. (CIN: L 15420PN1933PLC133303)

Corporate Office: 3rd Floor, Industrial Assurance Building, Churchgate, Mumbai, Maharashtra - 400 020

Regd.Office: P.O. Tilaknagar, Tal. Shrirampur, Dist. Ahmednagar, Maharashtra- 413 720

Email: investor@tilind.com ; Website: www tilind.com; Phone· +91 22 2283171 6/18 ; Fax: +91 22 22046904

(Rs. in lacs)
	Statement of Standalone Unaudited Financial Results f or the Quarter ended June 30, 2020
	Particulars		Quarter ended	30.06.2019	Year ended
		30.06.2020 Unaudited	31.03.2020 Audited	Unaudited	31.03.2020 Audited
I	Revenue from Operations	18,542.75	34,658.44	20,226.62	1 ,47' 918.39
II	Other Income	27.43	1,432.72 97.14		1,864.84
Ill	Total Income (I+ II)	18,570.18	36,091.16	20,323.76	1,49,783.23
IV	Expenses
	Cost of materials consumed (a)	3,325.33	5,324.53	5,799.05	32,086.37
	Purchases of stock-in-trade (b)	-	-	-	-
	Changes in inventories of finished goods stock-in-trade and work-In-progress (c)	(876.89)	3,189.17	(900 05)	2,857.72
	(d) Excise duty	12,904.56	19,065.40	8,243.43	83,063.01
	Employee benefits expense (e)	445.07	371 .57	525.13	1,897.80
	Finance costs (f)	1,621.33	(1,411.38)	4,417.99	12,508.30
	(g) Depreciation and amortization expense	786.86	780.36	777.38	3,118.90
	Other expenses (h)	2,261.42	13,408.00	4,738.53	28,892.00
	Total Expenses	20,467.68	40,727.65	23,601.46	1 ,64,424.1 0
v	Profit/(Loss) Before Exceptional Items And Tax (III-IV)	(1,897.50)	(4,636.49)	(3,277.70)	(14,640.87)
VI	Exceptional Items	-	45,518.35	-	45,518.35
VII	Profit/(Loss) Before Tax (V+/-VI)	(1,897.50)	40,881.86	(3,277.70)	30,877.48
VIII	Tax Expense
	(a) Current tax	-	-	-	-
	Taxes for Earlier Years (b)	1.33	85.48	-	85.48
	Deferred tax (c)	-	-	-	-
	Total Tax Expense	1.33	85.48	-	85.48
IX	Profit/(Loss) For The Period (VII-VIII)	(1,898.83)	40,796.38	(3,277.70)	30,792.00
X	Other Comprehensive lncome/(Loss)
	(a) Items that will not be reclassified to Profit & Loss
	(i) Remeasurement gain /(loss) in respect of the defined benefit plans	(3.52)	(7.84)	(1.98)	(14.09)
	(ii) Deferred tax on remeasurement gain /(loss) in respect of defined benefit plans	-	-	-	-
	(b) Items that will be reclassified to Profit & Loss	-	-	-	-
	Total Other Comprehensive lncome/(Loss) For The Period [(a) +(b)] Total Comprehensive Income/( loss) For The Period (IX+X)	(3.52)	(7.84)	(1.98)	(14.09)
XI XII	Paid-up Equity Share Capital (Face value of Rs. 10/- per Share)	(1,902.35) 12,513.38	40,788.54 12,513.38	(3,279.68) 12,513.38	30,777.91 12,513.38
XIII	Reserves as per Balance Sheet of Previous Accounting Year				(14,888.03)
XIV	Earnings Per Equity Share of Rs. 10 /- Each (not annualized)
	(a) Basic (Rs.)	(1.52)	32.60	(2.62)	24.61
	(b) Diluted (Rs.)	(1.52)	32.52	(2.62)	24.53

Notes

• The abovl resu1ts have been rev1ewed by the Audit Committee and approved by the Board of Directors at its Meeting held on October 06, 2020 and have been subwcted to a limited rev1ew by the Statutory Auditors.
• 2 The figures for the quarter ended March 31 , 2020 are the balancing figures between the audited figures in respect of the full financial year and the published year to da·e ligures (unaudited) upto the third quarter of the relevant financial year, which have been subjected to limited review by the Statutory Auditors.
• 3 The abOVb results have been prepared 1n accordance with recognition and measurement principles laid down in the IND-AS 34 : Interim Financial Reporting prescribed under Section 133 of the Companies Act, 201 3 read with relevant rules issued thereunder and other accounting principles generally accepted in India.
• 4 The Company IS predommantly engaged in the business of manufacture and sale of Indian Made Foreign Liquor (IMFL) and its related products, which constitute a single business segment as per IND-AS 108: Operating Segments. Accordingly, disclosure in accordance with the provisions of Circular issued by the SEBI on July 05, 2016 IS not applicable.
• 5 The Company had applied to the State government authorities for dual feed permission for manufacture of ENA through molasses as well as grain at one of its ENA Plants Permission has been received for operating the fermentation section till September 02, 2021. It is expected that permission for operating the distillatior section also will be received soon In view of this, the management believes that there is no impairment in value of its ENA Plant and hence the recoverable amount of the ENA Plant IS not requ1red to be estimated.
• 6 In lieu of 1dvances g1ven to certain body corporales amounting to Rs 6,074.08 lacs, the Company had received land from their holding company. The land received 1as been registered in the name of the Company The advances have not been adjusted against the dues to the said holding company pending complet1on of the merger formalities of the said body corporales with the1r holding company. In view of this, the management believes that no provision is considered necessary 1n the books of accounts.
• 7 Exceptional tems accounted during the previous quarter ended March 31, 2020, as net income include the following : a) During 2017-2018, the Company had entered into a One Time Settlement (OTS) with Bank of India at Rs.9,500.00 lacs in full and final settlement of its dues payable over a period of three years ·"e Company has pa1d Rs.3,000 00 lacs during the year ended March 31, 2020 in compliance with the payment schedule of the OTS. Until the payment of last instalment, the Company continued to provide interest in books of accounts on the principal outstanding at original contracted rates. Consequent to the full and final payment to Bank of India, the Company has written back Rs.22,623.77 lacs being the difference between the OTS amounts paid and :he total dues to Bank of India of Rs.32, 123.77 lacs, including interest accounted in books of accounts.

b) During the previous year, the Company entered into a One Time Settlement (OTS) with State Bank of India at Rs.10,200.00 lacs in full and final settlement of its outstanding Working Capital dues of Rs. 29,727.26 lacs as per its books of accounts including interest at original contracted rates, pursuant to which the entire settlement amount has been paid before March 31 , 2020 in accordance with the terms and conditions of the OTS. Consequent to the full and final payment to State Bank of India. the Company has written back Rs.19,527 26 lacs being the difference between the OTS amounts paid and the total dues to State Ba11k of lnd1a 1ncluding 1nterest in books of accounts

c) During the previous year, the Company entered into a One Time Settlement (OTS) with lOBI Ltd. at Rs.1 ,603.83 lacs in full and final settlement of its outstand1r1g Working Capital dues of Rs.4,971 .151acs including interest at original contracted rates, pursuant to which the entire settlement amount has been pa1d before March 31, 2020 1n accordance w1th the terms and conditions of the OTS. Consequent to the full and final payments to lOBI Ltd., the Company has wntten back Rs.3,367 32 lacs be1ng the difference between the OTS amounts paid and the total dues to lOBI ltd. including interest in books of accounts.

Consequent to the full and tina payments to the banks w1th respect to the above Compromise Settlements with the banks, the Company has written back in aggregate Rs. 45,518.35 lacs being the difference between the OTS amounts paid and the total dues to the various banks including interest in books of accounts on the principal outstanding at original contracted rates

• 8 The Nat1onal Company Law Tnbunai("NCL T") has ordered for liquidation of Prag Distillery (P) Ltd, wholly owned subsidiary of the Company ("Prag") vide its order No MA 30912018 m CP1067f 2017 dated July 26, 2018, as a gomg concern. The Official Liquidator having initiated the preliminary process of liquidation of Prag as a going concern has sought for further directions from NCL T in the matter, which is still awaited. Tilaknagar Industries ltd. has also submitted a formal proposal to the lenders for full and final settlement of all their claims, final approval for which is awaited. The impairment, if any, of the equity n· ·estment 1n Prag Will be considered on completion of the liqu1dat1on processf final settlement as the case may be.
• 9 The Company has executed, during the previous quarter ended March 31, 2020. restructuring documentsfagreements with Edelweiss Asset Reconstruction Company Um1ted (EARC}, acting as Trustee of EARC Trust SC233. EARC Trust SC241 and EARC Trust SC269, in favour of whom some of the Lender Banks and Financial Institution had assigned all the rights. title and Interests in financial assistances granted by them to the Company with respect to restructunng of the debts owed to it by the Company. As per the terms of the restructuring documentsfagreements the total dues of Rs 52,332.37 lacs were segrega·ed into

i) Restructured debt of Rs. 34,447.23 lacs carry1ng interest at the rate of 9% per annum payable in instalments by March 31 , 2024

ii) Balance debt of Rs. 14,498.38 lacs accruing interest at the rate of 0.001% per annum, the payment. including the interest thereon, of which was to be waived on the repayment of the Restructured Debt to the Lender to the satisfaction of Lender and

iii) Interest free Converted Balance debt of Rs. 3,386.75 to be converted into EqUity shares.

Althougt certam on account payments were made to Edelweiss Asset Reconstruction Company Limited (EARC)., the Company had defaulted in repayment of princ1pal dues of loans amounting to Rs. 1,000.00 lacs as per the terms of the restructuring documentsfagreements with "EARC. The said amount in default has since been paid on June 30, 2020.

The above has been recorded m the financial results as per the requirements of IND AS.

• 10 The net wort~ of PunJabExpo Breweries Private Limited ("PunjabExpo"), a subsidiary of Tl, has been eroded and has incurred net loss during the current quarter However the parent company IS actively explonng the possibility of entering into northern markets where PunjabExpo will be one of the major sources o supply It IS also in talks w1th other brand owners to enter into bottling arrangements for the said brand owners. This would significantly improve the capac ty Jtillsation and have favourable impact on the profitability of the PunjabExpo. Moreover, the PunjabExpo is also in the process of rationalization of its adm mstrat1ve overheads the effect of which is expected in the last quarter of 2020-21 .The Board of Directors have assessed the above conditions and indicators at'd have come to the conclusion that no material uncertainty exists that may cast significant doubt on the PunjabExpo's ability to continue as a going cor cern taking into account the plans management has put 1n place and the other mitigating factors described above. Hence, the management believes!' at no provision for impairment in equity investment and advances given are required.
• 11 The Co'Tl >a'ly had entered into arrangements with Vahni Distiller;es Private Limited and Punjab Expo Breweries Private Limited, (its subsidiary companies) for manufac:ure and market1ng of its own brands These subs1d1ary companies have necessary license and regulatory permits to manufacture alcohol. Upto the quartE'r ended June 30. 2019. the Company had recognised net surplus (total revenue over total expenses) from the operation through these units under Revenue from operat1ons and thereafter, it has aggregated sales and expenses in its Statement of financial results with respect to these subsidiary compan;es Accordmgly, current quarter's figures are not comparable with corresponding quarter to that extent Consequent to these changes, there is no impact on the total profit
• 12 The eros,on of the net worth of the Company has been substantially recovered 1n the previous year and the negative networth stands at Rs 4,259.14 lacs as at June 30, 2020. Th1s is due to major reduction in debt resulting from compromise settlements with banks and entering into agreement, during the quarter ended March 31 2020 w1th EdelweiSS Asset Reconstruction Company Limited ("EARC' ) acting as Trustee on behalf of Trustsin favour of whom some of the lender Banks and Financ1al lnst1tution have assigned all the rights, title and interests in financial assistances granted by them to the Company with respect to restructunng of the debts owed to it by the Company. The compromise settlements and restructuring agreement have significantly reduced the debt burden and consequential finance cost thereon. the benefit whereof will continue to accrue in the years to come. The Company has initiated the process of cost reduction changes in bus1ness strategy and rationalisation of manpower which will strengthen its financial position.

In spite o the country wide lockdown due to the global pandemic affecting the operations in the first two months of the current year, ever since the staggered

resumpt1on of operations, sales have started stabilising across the country with certain southern states showing substantial growth and is expected to match

the yearly estimates resulting in improved operational performance of the business in terms of sales, market share and margins. The Board of Directors have assessed the above conditions and indicators and have come to the conclusion that no material uncertainty exists that may cast significart doubt on the Company's ability to continue as a going concern taking into account the plans management has put in place and the other mitigating factors described above

13 Impact o COVID-19

The outbreak of Covid-1 9 pandemiC continues to spread across India and g1ven its unpredictable and evolving nature, though most of the Company's manufactunng locations became operational from May 2020 I June 2020 onwards, temporary disruptions have occurred in some locations and units from time to !;me dunng the pendency of a lockdown in that location. Management continues to implement appropriate action, as necessary, to scale up manufactunng operations in due compliance w1th the applicable laws. Sales have resumed in a st<~ggered manner across the country with the sale of beverage alcohol be1ng perm1tted in most states. as per the Guidelines of the Government of India.

ManageMent has considered various Internal and external information available up to the date of approval of financial results in assessing the impact of Covid- 9 pandemic in the standalone I consolidated financial results for the quarter ended June 30, 2020 and will continue to monitor changes in future economHc cond1!1ons. The eventual outcome of the impact of Covid-19 may be different from that estimated as on the date of approval of these financial results

14 The pre~; ^speriod figures have been regrouped and reclassified wherever necessary.

By Order of the Board For Tilaknagar Industries Ltd.

A MIT DAHANUKAR Digitally signed by AMIT OAHANUKAR Oate: 2020.10.0612:44:31 tOS'30'

Place Mumbai Date · October 06, 2020

Amit Dahanukar Chairman & Managing Director