Silver Oak (India) Ltd

To,

Dear Members,

The Directors present the 40^th Annual Report of SILVER OAK (INDIA) LIMITED along with the audited financial statements for the financial year ended March 31, 2024. The consolidated performance of the Company has been referred to wherever required.

1. Financial results

a) Standalone figures:

b) Consolidated figures:

2. Dividend

The Company has incurred a Net loss of Rs. 15623.71 thousand during the financial year 2023-24 and further in view of the future expansion plan and other business activities your Directors have decided not to recommend any dividend for the year ended 31^st March, 2024.

3. Going Concern Status

During the year under review, there were no significant or material orders passed by any regulators or court or tribunal, which can impact the going concern status of the company and/or its future operations.

4. Share Capital

The paid up equity share capital of the Company as on 31^st March, 2024 stood at Rs. 3,79,02,000/- (Three Crore Seventy-Nine Lac Two Thousand Only). During the year under review, the Company has neither issued shares with differential voting rights nor granted any stock options / sweat equity. Mrs. Leela Kalyani, Director of the Company holds 3.30% of shares of the Company as on the date of this report.

During the year under review, no Stock Options were granted, vested or exercised. No Stock Options are in force as on date. Hence, there are no disclosures required to be made pursuant to the applicable requirements of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

5. Insurance

Your company has taken all the necessary steps to insure its properties and insurable interests, as deemed appropriate and also as required under the various legislative enactments.

6. Transfer to reserves

The Company has not created any reserves during the financial year 2023-24.

7. Company's performance

Your Company has incurred net loss of Rs. 15623.71 thousand on standalone basis, during the Financial Year 2023-24 as against the loss of Rs. 12,221.20 thousand on standalone basis during the Financial Year 2022-23, after taking into account interest, depreciation, prior period adjustments and exceptional items.

8. Human resource development

Attracting, enabling and retaining talent have been the cornerstone of the Human Resource function and the results underscore the important role that human capital plays in critical strategic activities like growth.

9. Borrowings

The Total Term Loan amount of the Company on standalone basis as on 31.03.2024 is 8,19,90,000/- (Rupees Eight Crore Nineteen Lac Ninety Thousand Only) as against 7,54,50,000/- (Rupees Seven Crore Fifty-Four Lac Fifty Thousand Only) as on 31.03.2023.

10. Industry Overview

India is one of the fastest-growing alcohol markets in the world. Rapid increase in urban population, a sizable middle-class population with increasing spending power, and a sound economy are certain significant reasons behind the increase in alcohol consumption in India. The Indian alcohol industry is segmented into IMFL (Indian made foreign liquor), IMIL (Indian made Indian liquor), wine, beer and imported alcohol. Imported alcohol accounts for a meager share of around 0.8% of the Indian market.

India is the largest consumer of whiskey in the world and constitutes about 60% of the IMFL market. Though India is one of the largest consumers of alcohol in the world owing to its huge population, the per capita alcohol consumption of India is low compared to Western countries. The most popular channel of alcohol sale in India is the liquor store; alcohol consumption is primarily an outdoor activity and supermarkets and malls are present only in Tier I and Tier II cities of India. The trends and patterns of alcohol consumption are changing in the country. With the increasing acceptance of women consuming alcohol, growing popularity of wine and high demand for expensive liquor, the market scenario seems to be optimistic.

11. Business Outlook/ Future Projects

Your company is making continuous endeavor to enter into new area of market. The high standard and development will ensure cost reduction and cost control which preliminary affect the bottom line of the Company.

12. Directors' responsibility statement

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. they 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 of the Company for that period;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; and

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the

Board is of the opinion that the Company's internal financial controls were adequate and effective during FY 2023-24.

13. Directors and key managerial personnel

Each of the Independent Directors have furnished their declarations of independence, as required pursuant to the provisions of section 149(6) of the Act, stating that he/she meet, the criteria of independence as provided in section 149(6) of the Companies Act, 2013.

Mrs. Leela Kalyani retires by rotation and being eligible, offers herself for re-appointment. A resolution seeking shareholders' approval for her re-appointment forms part of the Notice.

Pursuant to the provisions of Section 149 of the Act, the independent directors have submitted declarations that each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed there under and Regulation 16(1)(b) of the SEBI Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company.

During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission, if any and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board / Committee of the Company.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31^st, 2024 are:

1. Mr. Shirish Jaltare (Whole Time Director),

2. Mr. Sunil Khandelwal (Chief Financial Officer)

3. Mr. Deepak Meena (Company Secretary and Compliance Officer).

14. Profile of the Directors Seeking Appointment / Reappointment:

As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, following Directors are liable to retire by rotation and seeking reappointment at the ensuing Annual General Meeting is annexed to the notice convening 40^th Annual General Meeting. Mrs. Leela Kalyani (Director) is liable to retire by rotation and reappointment in ensuing Annual General Meeting.

15. Number of meetings of the Board

Five meetings of the Board were held during the year under review. For details of meetings of the Board, please refer to the Corporate Governance Report, which is a part of this report.

16. Managerial Remuneration:

Disclosures of the ratio of Remuneration of each director to the median employee's remuneration and other details as require with respect to Section 197(12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and remuneration of Managerial Personnel) Rules 2014 are given in the Annexure-A of the Director Report.

The Detail of remuneration paid to the directors including executive directors of the Company are given in Form MGT-9 available on the website of the Company at www.silveroakindia.co.in .

17. Board evaluation

The Board of Directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act and SEBI Listing Regulations. The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.

In a separate meeting of independent directors, performance of non-independent directors, the Board as a whole and the Chairman of the Company was evaluated, taking into account the views of executive directors and non-executive directors.

The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. At the board meeting that followed the meeting of the independent directors and meeting of Nomination and Remuneration Committee, the performance of the Board, its Committees, and individual directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the independent director being evaluated.

18. Policy on directors' appointment and remuneration and other details

The contents of Nomination and Remuneration Policy of the Company prepared in accordance with the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are provided in the Corporate Governance Report. The Policy may be referred to at the Company's website at(www.silveroakindia.co.in).

19. Audit committee

Five Audit Committee meetings were held during the FY 2023-24. The details pertaining to the composition of the Audit Committee are included in the Corporate Governance Report, which is a part of this report.

20. Nomination and Remuneration Committee

The details pertaining to the meeting and composition of the Nomination and Remuneration Committee are included in the Corporate Governance Report.

21. Statutory Auditors

Pursuant to provisions of section 139 of the Companies Act, 2013 and rules made there under and on recommendation of the audit committee M/s. Mahendra Badjatya and Company, Chartered accountants was Re-appointed as Statutory auditor of the company for a further period of Five years commencing from the year 2022-23 to 2026-27 in the Annual General Meeting held on 28th September 2022.

The Auditors Report given by M/s. Mahendra Badjatya & Co., Statutory Auditors, on the Financial Statements of your Company, for the year ended March 31, 2024, forms part of the Annual Report. There is no qualification, reservation or adverse remark or any disclaimer in their Report.

22. Secretarial Auditor

According to the provision of section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Neelesh Gupta, Company Secretary in Practice, Indore has been appointed by the Board of Directors to conduct the audit of the secretarial records of the Company for the year ended 2023-24.

23. Auditor's report and Secretarial audit report

The Auditors' Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments.

1. Secretarial Audit Report

In terms of Section 204 of the Act and Rules made there under, Mr. Neelesh Gupta, Company Secretary in Practice, Indore has been appointed Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure - B to this report. The report is self-explanatory and do not call for any further comments.

2. Internal Audit & Controls

The Company has appointed Professional Chartered Accountants, M/s. A.B. Doshi & Co., as Internal Auditor for this financial year 2023-24. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Pursuant to provision of Section 138 of The Companies Act, 2013.

The Audit Committee of the Board of Directors in consultation with the Internal Auditor formulates the scope, functioning, periodicity and methodologies for conducting the Internal Audit subject to terms and conditions as decided by the Audit Committee.

24. Cost Auditor

The Ministry of Corporate Affairs (MCA) vides Notification dated 31^st December, 2014 made amendment in the Companies (Cost Records and Audit) Rules, 2014, through Companies (Cost Records and Audit) Amendment Rules, 2014. As per the said amendment rules, our Company is exempted from the requirement to conduct Cost Audit. Therefore, the Company did not appointed Cost Auditor for financial year 2023-24.

25. Risk management

The Company has established a well-defined process of risk management, wherein the identification, analysis and assessment of the various risks, measuring of the probable impact of such risks, formulation of risk mitigation strategy and implementation of the same takes place in a structured manner. Though the various risks associated with the business cannot be eliminated completely, all efforts are made to minimize the impact of such risks on the operations of the Company. Necessary internal control systems are also put in place by the Company on various activities across the board to ensure that business operations are directed towards attaining the stated organizational objectives with optimum utilization of the resources. Apart from these internal control procedures, a well- defined and established system of internal audit is in operation to independently review and strengthen these control measures, which is carried out by a reputed firm of Chartered Accountants. The Audit Committee of the Company regularly reviews the reports of the internal auditors and recommends actions for further improvement of the internal controls.

26. Vigil Mechanism

The Company has a vigil mechanism named Whistle Bowler Policy to deal with instance of fraud and mismanagement, if any. In staying true to our values of Strength, Performance and Passion and the Company is committed to the high standards of Corporate Governance and stakeholder responsibility. The Policy ensures that strict confidentiality is maintained whilst dealing with concerns an Experts Committee has been constituted which looks into the complaints raised. The Committee reports to the Audit Committee and the Board.

The Vigil Mechanism comprises three policies viz.,

i. The Whistle Blower Policy for Directors & Employees,

ii. Whistle Blower Policy for Vendors and

iii. Whistle Blower Reward & Recognition Policy for Employees.

The constitution of the committee during the financial year under review is as follows:

27. Particulars of loans, guarantees and investments

During the year under review, the Company has not given any loan or provided guarantees or made any investments as prescribed under Section 186 of the Companies Act, 2013.

28. Transactions with related parties

The Company has entered into transaction with the related party during the financial year 2023-24 with the related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 and the Statutory auditors of the company has also verified through its Auditor's Report that the related party transactions are undertaken at Arm's Length

Price. Details of the transactions are disclosed in Form AOC-2 as Annexure C2.

29. Corporate Social Responsibility

Provision relating to Corporate Social Responsibility is not applicable to the Company as the turnover/net worth is below the threshold limit.

30. Extract of annual return

The extract of Annual Return in Form MGT 9 as required under Section 92 (2) of the act, (as amended) read with Rule12 of the Companies (Management and Administration) Rules 2014 (as amended) is available at the website of the Company at www.silveroakindia.co.in.

31. CEO/CFO Certification:

Certificate obtained from Mr. Shirish Jaltare, Whole-time Director and Mr. Ashok Vyas, Chief Financial Officer, pursuant to Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, for the year under review has been duly placed before the board and a copy of the certificate on the financial statements for the year ended March 31, 2024 is annexed as annexure D along with this report.

32. Ratio Of the Remuneration of Each Director to the Median Remuneration of the Employees of the Company:

Pursuant to the provisions of Section 197(12) read with Rule 5 of (Appointment and remuneration of managerial Personnel) Rules, 2014, the details are given in Annexure A along with this report.

33. Particulars of employees:

Pursuant to Section 197 of Companies act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, Remuneration paid to all the Key Managerial Personnel was in accordance with remuneration Policy adopted by the Company.

Particulars of Employee of the company who are covered by the provisions contained in Rule 5(2) and Rule 5 (3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are as under.

Employee throughout the Year: Nil Employee for part of the year: Nil

34. Details of significant and material orders passed by the regulators or courts or Tribunals:

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

35. Prevention of Insider Trading:

In terms of SEBI (Prohibition of Insider Trading) Regulation, 2018 The Company has revised its Code of Conduct for Prevention of Insider Trading along with adoption of Policy for Legitimate purpose with a view to regulate trading insecurities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code.

36. Subsidiary Companies:

During the financial year 2022-23, there is no change in the material subsidiary, the Company's investment in M/s APT Infrastructure Private Limited (CIN: U45400DL2007PTC170319), which is a subsidiary to your company stands at 6,00,000 (Six Lac) Equity shares of Rs. 10 (Rupees ten only) each for Rs. 60,00,000/- (Sixty Lac only) Statement containing salient features of the financial statement of subsidiary company pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014) has been annexed with this report as Annexure -C1 along with this report .

37. Listing of Equity Shares on Stock Exchanges:

The Company's shares are listed in Bombay Stock Exchange Limited with Security Code 531635 and ISIN INE870J01019.

38. Deposits from public:

The Company has not accepted any deposits from public.

39. Independent Directors' Meeting and Familiarization Programme:

In terms of SEBI Regulation, 2015, a meeting of Independent Directors was held in absence of Non-Independent Directors and members of the Management. The Meeting was held inter-alia, with a view to review the performance of non-independent directors and the Board as a whole, review the performance of the Chairperson of the company, taking into account the views of executive directors and non-executive directors; and to assess the quality, quantity and timeliness of flow of information between the company management and the Board.

The details of Independent Directors' Meeting and familiarization program are stated in the Corporate Governance Report.

40. Adequacy of Internal Financial Control:

The Company has in place adequate internal financial control with reference to financial statements. Periodic audit is undertaken on continuous basis covering all the major operations. Reports of the Internal Auditors are reviewed by the management from time to time and desired actions are initiated to strengthen the control and effectiveness of the system. During the year, such control was tested and no reportable material weaknesses were observed in the design or operation.

The Internal financial control with reference to financial statement as designed and implemented by the company are adequate. During the year under review, no material or serious observation has been received from the Internal Auditors of the company for inefficiency of such control.

41. Internal Control System and Their Adequacy:

The Internal Control System provides for well documented policies/guidelines, authorization and approval procedures. Considering the nature of its business and size of operation, your company through its internal auditor carried out periodic audit based on the plan approved by the audit committee.

The Summary of the Internal Audit observation and the status of the implementation are submitted to the Audit Committee. The status of implementation of the recommendation is reviewed by the Audit Committee on a regular basis and desired action are initiated to strengthen the control and effectiveness of the system. Concerns, if any, reported to the board.

42. Disclosure As Per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

The Company has no tolerance towards sexual harassment at the workplace and has adopted a policy on prevention prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder.

43. Policies As Per SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015:

Pursuant to requirements of provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has adopted the following policies currently which are available on the portal of the company (www.silveroakindia.co.in).

• Policy for Preservation of Documents.

• Policy for Determination and Disclosure of Material Events.

• Policy on Remuneration of Directors and Key Managerial personal

• Archival Policy.

• Policy on Material Related Party Transactions.

• Internal financial control policy

• Terms and condition of appointment of Independent Directors

• Policy on Sexual harassment of Women at Workplace

• Code of Insider Trading.

44. Green Initiative:

Your Directors would like to draw your attention to section 20 of the Companies act, 2013 read with the Companies (Management and administration) Rules, 2014 as may be amended from time to time which permit the paperless compliances and also service of notice/documents (including annual report) through electronic mode to its shareholders.

Your Directors hereby once again appeal to all those members who have not registered their e- mail address so far is requested to register their email address in respect of electronic holding with their concerned Depository participants and /or with the Company.

45. Health Safety and Environment:

Your company recognizes the protection and management of environments as one of the highest priorities and every effort is made to conserve and protect the environment. During the year, your company continued its focus in creating a aesthetic, environment friendly, Industrial habitant in its factory units, mobilizing support generating interest among staff and labors for maintaining hygienic and green surroundings.

46. Business Responsibility Report:

The business responsibility reporting as required by regulation 34(2) (f) of the SEBI (listing obligations and disclosure requirements) regulations, 2015 is not applicable to your company for the financial year ending March 31, 2024.

47. Management Discussion and Analysis Report:

A) Industry Structure & Development and Outlook

Indian Made Foreign Liquor (IMFL) is "state subject" and as such every State has its own policies in respect of this industry. Madhya Pradesh, the state in which the company operates, has its own policy, both for manufacture as well as for marketing/distribution. The industry is expected to achieve average annual growth and many new players are expected to be stepping into the industry.

B) Opportunities & Threats, Risks & Concerns

The Company's strength is built around domestic marketing network. The growth of the industry provides the necessary opportunities for the company to grow. However, the industry is under constant pressure due to steep competition from unorganized sector and the industrial scenario in the nearby area.

C) Internal Controls and their adequacy

The company has adequate internal control systems, commensurate with the size and operations of the company. The scope of the internal audit is to ensure the control systems established by the management are correctly implemented and to suggest any additional changes required to strengthen the existing systems. These Systems and procedure are reviewed at regular intervals through internal audits, statutory audits and audit committee.

D) Human Resource and Industrial Relations

Industrial relations continue to remain peacefully at the factory and other offices of the Company and all the employees are working with the company for a common objective. Industrial relations of the company were cordial during the year.

48. Code of Conduct:

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day-to-day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behaviors of any form and the Board has laid down the directives to counter such acts. The code laid down by the Board is known as "code of business conduct" which forms an Appendix to the Code. The Code has been posted on the Company's website www.silveroakindia.co.in.

The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behavior from an employee in a given situation and the reporting structure. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard.

49. Conservation of energy, technology absorption, foreign exchange earnings and outgo Conservation of energy:

Information in respect of Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo pursuant to provisions of Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, for the financial year ended 31.03.2024, is attached as Annexure-E which forms part of this Report.

50. Appreciation:

Your Directors wish to acknowledge the co-operation and assistance extended to the company by the Company's Banker and state and Central Government agencies. Your directors also acknowledge with gratitude the support of the shareholders customers, dealers, agents and suppliers for their continued faith and support in the company and its management.

51. The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016):

No application has been made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year to which this financials relates.

52. The details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof:

The Company has not undertaken any one-time settlement and hence there was no need to undertake valuation also for the same.

53. 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. No issue of equity shares with differential right as to dividend, voting or otherwise.

2. There is no Employees' Stock Option Scheme (ESOS).

3. The Company has not issued any Sweat Equity Shares.