Chairman & managing Director Joint managing Director Shaji ... · PDF fileChennai - 600 028...

empee DISTILLeRIeS LImITeD

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Board Of Directors M.p.purushothaman -Chairman & managing Director Nishapurushothaman -Joint managing Director Shajipurushothaman Lt.GenR.S.Nagra(Retd.) T.S.Raghavan M.k.Mohan

Company Secretary N.S.Suryanarayanan

& Vice president

Corporate Affairs

Auditors N.C.Ananthakumar

CharteredAccountant

No.19,TrustpakkamSouth

RajaAnnamalaipuram

Chennai-600028

Bankers AndhraBank

IndianOverseasBank

AllahabadBank

Factories ImFL:

1)MevaloorkuppamVillage,SriperumbudurTaluk,

kancheepuramDistrict,TamilNadu,

2)Nida,MenonparaRoad,kanjikodepost,

palakkadDistrict,kerala.

power

kottadivayalVillage,

AranthangiTaulk,pudukottaiDistrict,TamilNadu.

Registered Office 693,MountRoad

Chennai-600006.

Corporate Office EmpeeTowerNo.59,HarrisRoad pudupet,Chennai-600002.

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INDeX page Nos

NoticeofAnnualGeneralMeeting 3-4

DirectorsReport 5-17

ManagementDiscussionandAnalysisReport 18-20

AuditorsReport 21-23

BalanceSheet&profit&LossAccount/profit&LossAppropriationAccount 24-26

SchedulestotheAccounts 27-40

AuditorsReportOnConsolidatedAccounts 41

ConsolidatedBalanceSheet&profitandLossAccount 44-45

SchedulestotheConsolidatedAccounts 46-56

ConsolidatedCashFlowStatement 57


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EMPEE DISTILLERIES LIMITEDRegd Office: 693, Mount Road, Chennai 600 002.

NOTICe TO SHARe HOLDeRS

NOTICEisherebygiventhatthe23rdAnnualGeneralMeetingofEmpeeDistilleriesLimitedwillbeheldonMonday,the10thMarch,2008at10.00A.MatIMAGEHall,MRCNagar,RajaAnnamalaipuram,Chennai600028totransactthefollowingbusiness:

ORDINARY BUSINeSS

Toreceive,considerandadopttheBalanceSheetoftheCompanyasat30thSeptember2007andtheprofitandLossAccountfortheyearendedonthatdatetogetherwiththereportsoftheDirectorsandAuditorsthereon.

1. ToappointaDirectorinplaceofMr.M.k.Mohan,whoretiresbyrotationandbeingeligible,offershimselfforreappointment.

2. ToappointaDirectorinplaceofLt.Gen.R.S.Nagra(Retd.),whoretiresbyrotationandbeingeligible,offershimselfforreappointment.

3. ToappointAuditorsoftheCompanyfortheperiodcommencingfromtheconclusionofthisAnnualGen-eral Meeting till the conclusion of the next Annual General meeting and to fix their remuneration. Mr.N.C.Ananthakumar,CharteredAccountant,Chennai,theretiringAuditor,iseligibleforreappointment.

SpeCIAL BUSINeSS

4. Toconsiderandif thoughtfit topasswithorwithoutmodificationthefollowingresolutionasanordinaryresolution:

“RESOLVEDthatMr.Shajipurushothaman,whowasappointedasanAdditionalDirectorpursuanttotheprovi-sionsofSection260oftheCompaniesAct,1956,beandisherebyappointedasaDirectoroftheCompanyliabletoretirebyrotation.”

place:Chennai. ByOrderoftheBoardDate:5.12.2007 ForEmpeeDistilleriesLtd

N.S.Suryanarayanan CompanySecretary&Vicepresident(Corp.Affairs)

NOTES:

1. AmemberentitledtoattendandvoteattheAnnualGeneralMeetingisentitledtoappointaproxytoattendandvoteonapollonhisbehalfandtheproxyneednotbeamember.Theproxyformdulycompletedandstampedmustreachtheregisteredofficeofthecompanynotlessthan48hoursbeforecommencementoftheMeeting.

2. Theregisterofmembersandsharetransferbooksofthecompanywillbeclosedfrom1stMarch,2008to10thMarch,2008(bothdaysinclusive).

3. Members/proxiesshouldbringtheattendanceslipdulyfiledalongwithcopyofannualreportinforattendingthemeeting.


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4. Membersarerequestedtointimatechangeifany,intheiraddresstothecompanyatitsRegisteredOfficequotingtheirfolionumbers.

5. MembersarerequestedtokindlycorrespondwiththeRegistrarsandShareTransferAgentsoftheCompany–CameoCorporateServicesLtd,1,SubramaniamBldg,ClubHouseRoad,Chennai600002formatterspertainingtotheirchangeofaddressandothersharerelatedmatters.

6. ExplanatoryStatementpursuanttoSection173(2)oftheCompaniesAct,1956relatingtotheSpecialBusi-nesstobetransactedattheMeetingisannexed.

eXpLANATORY STATemeNT UNDeR SeC �7�(�) OF THe COmpANIeS ACT, �956

ItemNo.4

TheBoardofDirectorsoftheCompanyappointed,Mr.ShajipurushothamanasanAdditionalDirectoroftheCompanywitheffectfromJuly25,2007pursuanttotheprovisionsofSection260oftheCompaniesAct,1956andArticle75oftheArticlesofAssociationoftheCompany.

IntermsoftheprovisionofSection260oftheCompaniesAct,1956,Mr.ShajipurushothamanwouldholdofficeuptothedateofthisAnnualGeneralMeeting.TheCompanyhasreceivedanoticeinwritingfromamemberalongwithadepositofRs.500/-proposingthecandidatureofMr.ShajipurushothamanfortheofficeofDirectoroftheCompany,undertheprovisionsofSection257oftheCompaniesAct,1956.

Mr.ShajipurushothamanisthesonofMr.M.p.purushothaman.HeisanArtsGraduateandhasalsocompletedOxford‘A’levelfromOxfordUniversity,U.k.HehasbeenactivelyassociatedwithourCompanyforthelast12years.Heiscurrentlyengagedinexecutingandimplementingthediversificationplansofthegroup.Hehasmorethanadecadeofadministrativeexperience.

AccordinglyordinaryresolutionsetoutunderItemNo.4oftheNoticeissubmittedtotheMeeting.

Noneof thedirectors,exceptMr.M.p.purushothamanandMs.Nishapurushothamanaredeemedtobecon-cernedorinterestedinthisresolution.

WithregardtothedetailsofMessersM.k.Mohan,Lt.GenR.S.Nagra(Retd)andMrShajipurushothamantobefurnishedunderClause49IV(g)oftheListingAgreement,thesameisprovidedintheDirectorsReportbeingsentalongwiththisnotice,whichmaykindlybereferredto.

ByOrderoftheBoard

ForEmpeeDistilleriesLtdplace:Chennai. N.S.SuryanarayananDate:5.12.2007 CompanySecretary&Vicepresident(Corp.Affairs)


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DIReCTORS RepORT TotheMembers,

YourDirectorstakepleasureinpresentingtheirReporttogetherwiththeAuditedAccountsfortheyearended30thSeptember2007

Financial Results (Rs.inlacs)

�006-07 2005-06

OperatingprofitbeforeInterestandDepreciation �756.�6 1706.70

LessInterest

Depreciation

DeferredRevenueExpenses

5�7.50

�8�.��

��.56

312.85

416.75

41.56

profitbeforeTax&ExtraOrdinaryItems �986.08 1205.74

provisionforTaxation(MAT)includingFBT

DeferredTax(Liability)/Asset

8��.�6

��.�512.06

218.81

profit/(Loss)AfterTax �0�0.�7 1538.18

DIVIDeND

InviewoftheexpansionsplannedbytheCompany,YourDirectorsconsider itprudenttoretainthefundsinthesystemtomeettheincreaseinworkingcapitalrequirementandotheractivitiestosupportthegrowthplansenvisaged.HenceyourDirectorsdonotrecommendanyDividendfortheyearunderreview

pUBLIC ISSUe

YourcompanyhassuccessfullyconcludeditsInitialpublicOffering(IpO)ofitsSharesbywayofBookBuildingroute.TheIssueopenedforpublicsubscriptiononthe1stNovember,2007andclosedonthe6thNovember,2007.TheIssuewasoversubscribedbyabout7times.TheBoardwishestothanktheinvestorsfortheirwholeheartedsupport to theIpOof theCompany.TheShareswereallottedto thesuccessfulalloteesasper thebasisofallotmentapprovedbytheBombayStockExchangeonthe16thNovember,2007andtherefundpayabletotheunsuccessfulapplicants/prorataallotteeshavesincebeeneffectedbywayofRTGS/ECS/Warrantsimmediatelythereafter.TheCompanyhasalsolisteditssharesintheBombayandtheNationalStockExchanges.

OpeRATIONS

TheTurnoverfortheyear2006-07wasRs62569.59LacsascomparedtoRs.47879.93Lacsfortheyear2005-06.NetprofitfortheYear2006-07wasRs.2010.49LacsascomparedtoRs1538.18Lacsfortheyear2005-06.ThiswaslargelyduetoincreasedCapacityUtilisationandenhancedproductionandSalesVolume.


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FUTURe pLANS

TheIMFLIndustryinIndiaispoisedforsignificantgrowthinthecomingyears,keepinginviewthefavourabledemographicsandthelowpercapitaconsumptionofAlcoholicBeverages.GrowthindisposableincomeduetoincreaseinpercapitaincomeandriseintheconsumptionoflifestyleproductsisexpectedtofurtherbenefittheIMFLIndustry.TheIndianIMFLIndustryinwhichtheCompanyoperatesisalsoprotectedbystrongentrybarrierslikeLicensesandhasbeensubjectedtohighTaxes,banondirectadvertisingandcomplexlogisticsanddistribution,whichworktotheadvantageofexistingplayerstherebyassuringthemofasteadygrowthintheforeseeablefuture.

Duringtheyearended30thSeptember,2007,yourCompanyachievedremarkablegrowthof31%overthelastyear’sSalesVolume.ThetotalSalesVolumecrossed4millioncasesduringtheyear.TheCompany’smarketsharehasalsoincreasedsignificantlyduringtheyear.Yourcompanycontinuestoputitseffortsinbrandbuildingthroughinnovativemethodsandmeasures.YourCompanyhasplanstospreaditsactivitiestootherpotentialmarketsintheCountry.YourCompanyhasalsoimplementedtheplanstoincreaseitspresenceinMediumandpremiumsegmentsofIMFLbythelaunchoftwonewbrandsElCansoXXXDarkRumandOldSecretBrandyintheyear2006.YourCompanycontinuesitspresenteffortsincostcontrolbyoptimizingtheutilizationofavailableresourcesandenhancementproductivityatalllevelsofoperation.Qualityup-gradationthroughin-houseR&D,isanongoingprocessinyourCompany.

OUTLOOK FOR THe FUTURe

TheCompanyisincreasingthecapacityofitsexistingExtraNeutralAlcoholplantsituatedinTamilNadufrom20kLpDto70kLpDandfurtherincreasingthecapacityofthisdistillerytohandle5.00Lakhcasespermonthfromthepresent3.20Lakhcasespermonthwhichwouldbringhorizontalexpansionandtherebyhelpingustolowerourinputcosts.Itisalsoproposedtodiversifyintothebusinessofpowergenerationbysettingupof10MWBio-massbasedpowerplantinTamilNaduandimplementingrealestateprojectbydeveloping2.00Lakhsq.ft.ofresidentialspaceinMevalorkuppam,SriperumbudurTaluk,kancheepuram,DistrictTamilNadu.

DIReCTORS

Mrs.AkAruna,MrsSheenapurushothamanandMr.SheejupurushothamanresignedfromtheBoarddueto their personal preoccupations during the year under review. The Board wishes to place on record theirappreciationfortheirinvaluablecontributionasDirectorsoftheCompany.Mr.Shajipurushothaman,whohadresignedfromtheBoardearlierthisyearduetopersonalreasons,wasco-optedasanAdditionalDirector,willbeholdingofficetilltheensuingAnnualGeneralMeeting.AnoticehasbeenreceivedfromamemberoftheCompanyproposinghiscandidatureforappointmentasaDirectoroftheCompanyattheforthcomingAnnualGeneralMeeting.

Mr.M.k.MohanandLtGenNagra ,Directors retireby rotationat theensuingAnnualGeneralMeetingofferthemselvesforreappointment.


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SUBSIDIARY COmpANY

M/sEmpeeSugarsandChemicalsLtd.(ESCL)isthecompany’ssubsidiary,whosesharesarelistedonStockExchangesatHyderabad,MadrasandMumbaiandisholding2,81,22,102EquitysharesofRs.10/-eachinESCL,whichamounts to67%of thepaidupcapitalof thecompany.During theyearunder review,EmpeepowerCo(India)Ltd(EpCIL)becameawhollyownedsubsidiaryoftheESCL,thusalsobecomingasubsidiaryof theCompany.EpCIL iscurrently implementingaproject foraBagassebasedCogenpowerplantat thefactorysiteatNaidupet.

TheCompanyhasobtainedthenecessaryexemptionfromtheGovermentofIndia,MinistryofCorporateAffairsunderSection212(8)oftheCompaniesAct,1956fromannexingtheAnnualAccountsofitsSubsidaryCompany- EmpeeSugarsandChemicalsLtdand itsSubsidary-EmpeepowerCompany(India)Ltd.However theConsolidatedAccountsoftheCompanytogetherwithitsSubsidiariesarepublishedinthisAnnualReport.IntheeventofanyshareholderrequiringacopyoftheSubsidiaryCompany’sAccounts,hemaywritetotheCompanySecretarymentioninghisFolio/ClientIDNumber.CopiesoftheAnnualAccountsoftheSubsidiaryCompaniesareavailableforinspectionbythemembersattheRegisteredOfficesoftheCompanyanditssubsidiary.

AUDITOR Mr.N.C.Ananthakumar, the Auditor of theCompanywill retireat the conclusionof theensuing AnnualGeneralMeetingandbeingeligibleoffershimselfforreappointment.ThecompanyhasreceivedacertificatefromtheAuditortotheeffectthattheirreappointment,ifmadewouldbeinaccordancewithSection224(1B)oftheCompaniesAct,1956.TheBoardrecommendshisre-appointment.

FIXeD DepOSITS

YourCompanyhasnotacceptedanyfixeddepositsfromthepublicduringtheyear.

There isnoemployee fallingwithin theprovisionofSection217(2A)of theCompaniesAct,1956 readwithcompanies(particularsofEmployees)Rules1975.

CONSeRVATION OF eNeRGY, TeCHNOLOGY ABSORpTION AND FOReIGN eXCHANGe OUTGO

Information regarding conservation of Energy, Technology absorption and Foreign Exchange earnings andoutgoinaccordancewiththeprovisionsofSection217(1)(e)oftheCompaniesAct,1956readwithCompanies(DisclosureofparticularsintheReportofDirectors)Rules1988isannexedtothisReport.

CORpORATe GOVeRNANCe RepORT

A Report in line with the requirement of clause 49 of the Listing Agreement on the Corporate GovernancepracticesfollowedbytheCompanyandtheCertificatefromtheStatutoryAuditorsonComplianceofmandatoryrequirementsalongwithManagementDiscussionandAnalysis,aregivenasanannexuretothisreport.

INDUSTRIAL ReLATIONS

TheIndustrialClimateintheCompanyduringtheyearhasbeenconduciveandtheCompanyhadgoodrelationswithitsworkforcelocatedatitsfactories.

DIReCTORS’ ReSpONSIBILITY STATemeNT

pursuanttotherequirementsunderSection217(2AA)oftheCompaniesAct,1956yourDirectorsherebystateandconfirmthat:

a) Inthepreparationoftheannualaccounts,theapplicableaccountingstandardshavebeenfollowed;


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b) TheDirectorshaveselectedaccountingpoliciesandappliedthemconsistentlyandmadejudgmentsandestimatesthatarereasonableandprudentsoastogiveatrueandfairviewofthestateofaffairsofthecompanyasat30thSeptember2007andoftheprofitorlossofthecompanyfortheyearendedonthatdate;

c) theDirectorshavetakenproperandsufficientcareforthemaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionsoftheCompaniesAct,1956,forsafeguardingtheassetsoftheCompanyandforpreventinganddetectingfraudandotherirregularities;

d) theDirectorshavepreparedtheannualaccountsona‘goingconcern’basis.

ACKNOWLeDGemeNT

YourDirectorsplaceonrecordtheirappreciationoftheeffortsandvaluablecontributionsputinbytheemployeesatalllevelsoftheCompany.YourDirectorsalsowishtoexpresstheirgratitudeforthecontinuousassistanceandsupportextendedbytheBanks,FinancialInstitutions,CustomersandGovernmentauthoritiesandalsototheshareholdersfortheirforbearanceandtheirfaithinthemanagement.Further,yourDirectorsalsoplaceonrecordtheirdeepsenseofappreciationforthecontributionsmadebyemployeesatvariouslevelstothegrowthandsuccessofthecompany.

ForandonbehalfoftheBoardofDirectorsplace:Chennai M.p.purushothamanDate:5.12.2007 Chairman&ManagingDirector

STATemeNT ReGARDING SUBSIDIARY COmpANIeS AS peR SeCTION ��(�) OF THe COmpANIeS ACT, �956.(Rs.inlacs)

Sl.No NameoftheCompanyEmpeeSugars

&ChemicalsLtdEmpeepower

CompanyLimited

1

HoldingCompany’sinterestattheendofthefinan-cialyearofthesubsidiaryCompanya.NoofEquitySharesb.ExtentofHoldingc.NumberofpreferenceSharesd.ExtentofHolding

2,81,22,10267%NilNil

5,00,00067%NilNil

2

The net aggregate amount of the Subsidiary’sprofit/(Loss) so far as it concerns the membersoftheHoldingCompanyandisnotdealtwiththeHoldingCompany’sbooksofaccountsa. profit/(Loss)fortheFinancialYearb. profit/(Loss) for the previous financial yearssincebecomingasubsidiary

NilNil

NilNill

3

The net aggregate amount of the Subsidiary’sprofit/(Loss)sofarasitconcernsthemembersoftheHoldingCompanyandisdealtwiththeHoldingCompany’sbooksofaccountsa. profit/(Loss)fortheFinancialYearb. profit/(Loss) for the previous financial yearssincebecomingasubsidiary

48.841139.36

NilNill

*HeldbyEmpeeSugars&ChemicalsLtd.


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STATemeNT SHOWING HOLDING COmpANY’S INTeReST IN ITS SUBSIDIARY COmpANY pURSUANT TO THe

pROVISIONS OF SeCTION �� (5) OF THe COmpANIeS ACT, �956(Rs.inlacs)

a

Change in the holding company’s interest in the subsidiary be-tweentheendof the financialyearorof the lastof the financialyearsof thesubsidiaryandtheendof theholdingcompany’s fi-nancialyear:

Nil

b

Materialchangeswhichhaveoccurredbetweentheendofthefi-nancialyearorofthelastofthefinancialyearsofthesubsidiaryandtheendoftheholdingcompany’sfinancialyearinrespectof:(i)thesubsidiary’sfixedassets:(ii)itsinvestments(iii)themoneyslentbyit(iv)themoneyborrowedbyitforanypurposeotherthanthatofmeetingcurrentliabilities.

93.66NilNil

25.00

ForandonbehalfoftheBoardofDirectors

Place: Chennai M.P.PurushothamanDate : 05.12.2007 Chairman & Managing Director

ANNeXURe TO THe DIReCTORS RepORT

InformationpursuanttotheCompanies(DisclosureofparticularsintheReportofBoardofDirector)Rules,1988andformingpartoftheDirectorsReportfortheperiodended30thSeptember2007.

A. Conservation of energy:

a.Energyconservationmeasuresundertaken.

TheCompanyhasinstalledthenecessaryenergyconservingmachineryasperthestandardspecificationlistprescribedbytheGovernmentofIndiaforafactoryofitssize.

b. AdditionalInvestmentsandproposals,ifany,beingimplementedforreductionofconsumptionofenergy. Nil

c. Impactofmeasuresof(a)and(b)aboveforreductionofenergy,consumptionandconsequentimpactonthecostofproductionofgoods.N.A


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B. Technology absorption:

1SpecificareasinwhichR&Dcarriedoutbythecompany. Nil

2.BenefitsderivedasaresultoftheaboveR&D NotApplicable

3.Futureplanofaction Nil

4.ExpenditureonR&D

a.Capital Nil

b.Recurring Nil

c.Total Nil

d.TotalR&Dexpenditureasa%ofthetotalturnover Nil

Technologyabsorption,adaptationandinnovation

1. Efforts,inbriefmadetowardstechnologyabsorption,adaptationandinnovation.Nil

2. Benefits derived as a result of the above efforts, e.g product improvement,cost reduction, productdevelopment,importsubstitutionNotApplicable

(C) Foreign exchang earnings Nil

(D) Foreign exchange outgo 296.78Lacs

ForandonbehalfoftheBoard

place:Chennai. M.p.pURUSHOTHAMAN

Date:5.12.2007 Chairman&ManagingDirector

RepORT ON CORpORATe GOVeRNANCe

�. Company’s philosophy on Corporate Governance

The company firmly believes that good corporate governance is the foundation of corporate excellence. Asoundgovernanceprocessconsistsofacombinationofbusinesspracticeswhich result inenhancementofshareholdervalueandenable thecompany to fulfill itsobligations tocustomers,employees, financiersandtothesocietyingeneral.Thecompanyaimstoincreaseandsustainitscorporatevaluethroughgrowthandinnovation.YourCompanyhasbeenobservingthekeyprinciplesofthecodeandiscommittedtotakeadequatemeasurestowardsachievingfullcomplianceoftheCorporateGovernancecode.TheareaswheretheCompanyisobservingtherecommendationofSEBIcodearegivenbelow:

�. Board of Directors

TheBoardofDirectorsofthecompanyconsistsoftwoExecutiveDirectorsandfournon-executivedirectors.Threenon-executivedirectorsareindependentandtheyhavenopecuniaryrelationshipwiththeCompanyintheircapacityasDirector.Duringtheyear2006-07theBoardmet10times.TheabovecompositionoftheBoardmeetswiththerecommendationofSEBIcodeofCorporateGovernance.


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DetailsofBoardMeetingsattendedbyDirectorsduring01/10/2006to30/09/2007:

Sl.No. Name DesignationNoof

meetingsattended

OtherDirector-shipheld

1. Mr.M.p.purushothaman promoter–Chairman&ManagingDirector

10 14

2. Ms.Nishapurushothaman JointManagingDirector 4 8

3. Mr.M.k.Mohan NonExecutiveIndependentDirector 2 4

4. Lt.Gen.R.S.Nagra(Retd.) NonExecutiveIndependentDirector 1 4

5. Mr.T.S.Raghavan NonExecutiveIndependentDirector 2 2

6. Mr.Shajipurushothaman NonIndependentDirector - 12

7. Mrs.A.k.Aruna* NonIndependentDirector 9 10

8. Ms.Sheenapurushothaman** NonIndependentDirector 4 9

9. Mr.Sheejupurushothaman** NonIndependentDirector 4 10

*ResignedfromtheBoardoftheCompanywitheffectfrom25thJuly2007.**ResignedfromtheBoardoftheCompanywitheffectfrom11thJanuary2007.

�. Audit Committee:

TheAuditCommitteeoftheCompanycomprisesofMr.M.k.Mohan,ChairmanoftheCommittee.Mr.M.k.Mohanisabusinessmanofreputehavingvariedlinesofbusiness.Mrs.NishapurushothamanandLt.Gen.R.S.Nagra(Retd.).TwooutofthreememberscomprisingtheCommitteei.e.Mr.M.k.MohanandLt.Gen.R.S.Nagra(Retd.)areIndependentDirectors.AlltheseDirectorspossessknowledgeofcorporatefinance.TheroleandtermsreferenceoftheAuditCommitteecoverthemattersspecifiedunderClause49oftheListingAgreementandSection292AoftheCompaniesAct,1956,besidesothertermsasmaybereferredbytheBoardofDirectors.TheCompanySecretaryactsastheSecretarytotheCommittee.TheChiefExecutiveOfficer,theStatutoryandInternalAuditorsoftheCompanyattendthemeetingsbyinvitation.

meeting and the attendance during the year

Sl.No. Nameofmember No.ofmeetingsHeld

NoofmeetingsAttended

1. Mr.M.k.Mohan 4 4

2. Lt.Gen.R.S.Nagra(Retd.) 4 4

3. Ms.Nishapurushothaman 4 4


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�. Remuneration Committee:TheRemunerationcommittee,comprisingofLt.Gen.R.S.Nagra(Retd.),Mr.M.k.Mohan,andMs.NishapurushothamanhasbeenconstitutedundertheChairmanshipofLt.Gen.R.S.Nagra(Retd.),todeterminethequantumandcomponentsoftheremunerationtobepaidtotheWholetimeDirectors.Onemeetingwasheldfortheyearunderreview.

Detailsof the remunerationofExecutiveDirectorsandNon-ExecutiveDirectors for theyearended30thJune2007areasfollows:

executive Directors Rs.inlacs

Name Salary/Allowances Totalperquisites Contributiontoprovident/Gratuityfunds

Mr.M.p.purushothaman Nil Nil Nil

Ms.Nishapurushothaman 24 1.08 2.88

Non-executive Directors

NameoftheDirector SittingFeeRs.

1.Mrs.A.k.Aruna Nil

2.Mr.M.k.Mohan 10000

3.Lt.Gen.R.S.Nagra(Retd.) 10000

4.Mr.R.S.Raghavan 10000

5.Mr.Shajipurushothaman Nil

6.Ms.Sheenapurushothaman Nil

7.Mr.Sheejupurushothaman Nil

5. Share Transfer Cum Shareholders’ / Investors’ Grievance Committee:The Share transfer cum Shareholders’/Investors’ Grievance and Share Transfer Committee consists of thefollowing:

1)Mr.M.k.Mohan ChairmanoftheCommittee

2)Ms.Nishapurushothaman Member

3)Lt.Gen.R.S.Nagra(Retd.) Member

TheCommittee, interalia,approvesshare transfers, transmissionsandalso requests for issueofduplicatecertificates,split/consolidationofsharesetcandoverseesallmattersconnectedwithsecuritiestransfersandotherprocesses.TheCommitteealsolooksintoredressalofshareholders’complaintsrelatedtosharetransfers,nonreceiptofbalancesheets,non-receiptofdividendetc.TheCommitteealsooverseestheperformanceoftheR&TAandrecommendsoverallimprovementofthequalityofinvestorservices.Noinvestorcomplaintwaspendingason30.6.2007.


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TheBoardhasdesignatedMrN.S.Suryanarayanan,CompanySecretary&Vicepresident(CorporateAffairs)astheComplianceOfficer,pursuanttoClause47(a)oftheListingAgreementwithStockExchanges.

6. General Body meetings:ThelastthreeAnnualGeneralMeetingswereheldasunder:

Year Location Date Time

2005-06 693,MountRoad,Chennai600006 19/02/2007 11AM

2004-05 -do- 29/03/2006 11AM

2003-04 -do- 28/03/2005 11AM

7. postal Ballot:

Duringthelastyearnoresolutionwaspassedthroughpostalballot.Asofnowthereisnoproposalforconductinganyspecialresolutionthroughpostalballot.

8. profile of Directors seeking re-appointment:

Mr.M.k.Mohan,aged53yearsjoinedourBoardasanIndependentDirectoron.Heisinvolvedinthebusinessofbrickmanufacturingandlorrytransport.Hehasaround25yearsofbusinessexperienceinvariedfields.

Lt.Gen.R.S.Nagra(Retd.),aged62years joinedourBoardasanIndependentDirectoron.HeholdsaM.Sc.aswellasM.philinDefenceStudiesfromChennaiUniversity.HeistherecipientofparamVishistSewaMedalandawardoftheBartoVishistSewaMedal.Hehasaround42yearsofexperienceofserviceintheIndianArmy.

ThedetailsofotherDirectorshipandCommitteeMembershipoftheaforesaidDirectorsareasfollows:

NameoftheDirector/Company/ShareholdingintheCompany

Chairmanship/Directorship

NameoftheCommittee Chairmanship/Membership

Mr.M.k.Mohan

a.EmpeeSugars&ChemicalsLtd

b.FiveStarBusinessCreditsLtd

c.kurinjiChitFundspvt.Ltd

d.EmkayHolidayInnpvt.Ltd

IndependentDirectorDirectorDirector

promoter-Director

RemunerationCommittee Member

LtGen.R.S.Nagra(Retd)

a.EmpeeSugar&ChemicalsLtd.

b.RanspectraIndiaConsultantspvtLtd.

c.JojipojiFoodspvt.Ltd

d.MukteshwarAgroTechnologiespvt.Ltd

IndependentDirector

IndependentDirector

IndependentDirector

IndependentDirector

AuditCommittee&RemunerationCommittee

MemberChairman


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9. material Disclosures:Thecompanydoesnothaveanyrelatedpartytransactions,whichmayhavepotentialconflictwiththeinterestsofthecompanyatlarge.

�0. means of Communication

1. HalfYearlyReportsenttothehouseholdofeachShareholder No

2. QuarterlyResultsWillbepublishedinthenewspapersasperListingRequirements

3. AnyWebsitewheredisplayed www.sebiedifar.nic.in/www.empeegroup.com

4 AnyOfficialNewsReleasepublishedNoOfficialNewsReleasepublishedafterListingofSharessofar.

5 DetailsofpresentationmadetoInstitutionalInvestors/Analystspresentation made to Institutional Investors fortheIpOofshareson7thDecember2007

��. General Share holder Information:

a. AGM-Date,Time&Venue 10thMarch2007,ImageHall-10AM

b. FinancialYear October2006-September2007

c. BookClosureDate 1stMarch2008-10thMarch2008

d. DividendDespatchDate NotApplicable

e. ListingonStockExchangesBombayStockExchangeLtd.NationalStockExchangeLtd

f. ScripName&CodeISINNo(NSDL&CDSL) INE180G01019

��. market prices:

SincetheSharesof theCompanywereListedonlyw.e.f26thNovember,2007, theExchangeQuotesfor thesharesoftheCompanyfortheyearunderreviewarenotavailable.

��. Registrar and Transfer Agents:TheCompanyhasappointedM/s.CameoCorporateServicesLimited,ChennaiasRegistrar&TransferAgents(RTA)oftheCompany(bothphysicalandDemat)fortheEquitySharesw.e.f.1.11.2006.TheaddressoftheRTAisM/s.CameoCorporateServicesLimited,1,SubramaniamBldg,ClubHouseRoad,Chennai600002.


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��. a.Distribution of Shareholding as on September �0, �007

No.ofEquitySharesheld No.ofShareholders %ofShareholders No.ofSharesheld %ofShareHolding

upto500 1 6.67 400 -

501–1000 -

1001–2000 -

2001–3000 1 6.67 2400 0.02

3001–4000 - -

4001–5000 - -

5001–10000 - -

10001andabove 13 86.66 14201200 99.98

Total 15 100.00 14204000 100.00

b.Share Holding pattern as on September �0, �007

Category NumberofShareholders No.ofSharesheld %ofShareholding

promoters 9 13963600 98.31

OtherBodiesCorporate 1 400 -

NRI/OCB - - -

public 5 240000 1.69

TOTAL 15 14204000 100.00

�5.Dematerialisation of Shares:

TheCompanyhasarrangementswithbothNationalSecuritiesDepositoryLimited(NSDL)andCentralDepositoryServicesLimited(CDSL)fordematfacility.Nearly99%ofthetotalEquityCapitalisheldindematerialisedformason30thSeptember2007.

�6.Code of Conduct:

In compliance with the requirements of the amended Clause 49 of the Listing Agreement. The Board ofDirectorshaslaiddownacodeofconductfortheBoardMembersandSeniorManagementoftheCompany.ThesaidcodeofconducthasalsobeenpostedontheWebsiteofthecompany,www.empeegroup.co.in.The Directors and Senior Management are committed to strict adherence of the code and to conduct thebusinessinanethicalandtransparentmanner.

�7. Risk management:

The Company has laid down procedures to inform Board Members about the risk assessment and lossminimization procedures. The Board periodically discusses the significant business risks identified by theManagementandthemitigationprocessbeingtakenup.


�6

�8. prevention of Insider Trading:ThecompanyhasframedaCodeofconductforpreventionofInsiderTradingbasedonSEBI(InsiderTrading)Regulations,1992.ThiscodeisapplicabletoallDirectors/Officers/DesignatedEmployees.Thecodeensuresthe prevention of dealing in Company’s Shares by persons having access to unpublished price sensitiveinformation.

�9. Compliance with Corporate Governance Norms:The Company has complied with the mandatory requirements of the Code of Corporate Governance asstipulated in Clause 49 of the Listing Agreement with the Stock Exchanges. The certificate from StatutoryAuditorstothiseffectisannexedtotheDirectors’Report.

�0. management Discussion and Analysis Report:TheManagement’sDiscussionandAnalysisReportwhichhasbeenprovidedintheearliersection,formspartofthisAnnualReport.

��. General Shareholders Information:DisclosureasperRegulation3(1)(e)ofSEBI(SubstantialAcquisitionofSharesandTakeovers)Regulations1997:

ThelistofCompaniesfallingwithintheGroupCompanyasdefinedintheMRTpAct,1969isasfollows:

1. EmpeeDistilleriesLtd 9. EmpeeMarineproductsLimited2. EmpeeInternationalHotels&ResortsLtd 10.EmpeeLeasing&FinanceLtd3. South(India)Hotelspvt.Ltd. 11.EmpeeAgroFarmproductspvtLtd4. EmpeeHotelsLimited 12.UniversalSpiritsLimited5. AppolloAlchobevLimited 13.EmpeeConstructionCompanypvtLtd6. EmpeeHoldingsLimited 14.EmpeepowerandInfrastructurepvtLtd7. ArunaExportspvtLtd. 15.EDLpropertiesprivateLimited8. ArunaConstructions(India)Ltd.

��. Investors’ correspondence:For all share related matters, Investors may kindly contact the Company’s Registrars and Share TransferAgentsatCameoCorporateServicesLimited,1,SubramaniamBldg,ClubHouseRoad,Chennai600002;orTheCompanySecretary,EmpeeDistilleriesLimited,EmpeeTower,No.59,HarrisRoad,pudupet,Chennai600002.

��. Chief executive Officer and Chief Financial Officer Certificate:TheChiefExecutiveOfficerandChiefFinancialOfficerhavecertifiedtotheBoardasrequiredundertheClause49(v)oftheListingAgreementisannexedtoandformingpartofthisreport.

ForandonbehalfoftheBoardplace:Chennai. M.p.pURUSHOTHAMANDate:5.12.2007 Chairman&ManagingDirector


�7

DeCLARTION ReGARDING COmpLIANCe BY BOARD memBeRS AND SeNIOR mANAGemeNT peRSONNeL WITH COmpANY’S CODe OF CONDUCT.

This is toconfirm that theCompanyhasadoptedacodeconduct for themembersof itsBoardandSeniorManagementpersonnel.IconfirmthattheCompanyhas,inrespectoftheFinancialyearended31stMarch,2007,receivedfromthemembersoftheBoardandSeniorManagementTeamoftheCompany,adeclarationofcompliancewiththecodeofconductasapplicabletothem.

Chennai M.p.purushothaman5.12.2007 Chairman&ManagingDirector

CeO AND CFO CeRTIFICATION

We, M.p.purushothaman, Chairman & Managing Director and Ms.Nisha purushothaman, Joint ManagingDirector,responsibleforthefinancefunctioncertifythat:

a) Wehavereviewedthefinancialstatementsandcashflowstatementfortheyearended30thSeptember,2007andtothebestofourknowledgeandbelief:

i) thesestatementsdonotcontainanymateriallyuntruestatementoromitanymaterialfactorcontainstatementsthatmightbemisleading;

ii) thesestatementstogetherpresentatrueandfairviewofthecompany’saffairsandareincompliancewithexistingAccountingStandards,applicablelawsandregulations.

b) Tothebestofourknowledgeandbelief,notransactionsenteredintobytheCompanyduringtheyearended30thSeptember2007arefraudulent,illegalorviolativeoftheCompany’scodeofconduct.

c) Weaccept responsibility forestablishingandmaintaining internal controls for financial reportingandwehaveevaluatedtheeffectivenessofinternalcontrolsystemsoftheCompanypertainingtofinancialreporting.Deficienciesinthedesignoroperationofsuchinternalcontrols,ifany,ofwhichweareawarehavebeendisclosedtotheauditorsandtheAuditCommitteeandstepshavebeentakentorectifythesedeficiencies.

d) i)Therehasnotbeenanysignificantchangeininternalcontroloverfinancialreportingduringtheyearunderreference;

ii) TherehasnotbeenanysignificantchangeinaccountingpoliciesduringtheyearexceptaslaiddowninAccountingStandard (AS)15 (revised2005)onEmployeeBenefits, requiringdisclosure in thenotestothefinancialstatements;and

iii) WearenotawareofanyinstanceduringtheyearofsignificantfraudwithinvolvementthereinofthemanagementoranyemployeehavingasignificantroleintheCompany’sinternalcontrolsystemoverfinancialreporting.

place:Chennai M.p.purushothaman NishapurushothamanDate:5.12.2007 Chairman&ManagingDirector JointManagingDirector


�8

AUDITORS CeRTIFICATe ON COmpLIANCe WITH CORpORATe GOVeRNANCeIhaveexaminedthecomplianceofconditionsofCorporateGovernancebyEmpeeDistilleriesLtd,fortheyearended30thSeptember2007,asstipulatedinClause49oftheListingAgreementofthesaidCompanywithStockExchange(s).

ThecomplianceofconditionsofCorporateGovernanceistheresponsibilityofthemanagement.Myexaminationwaslimitedtoproceduresandimplementationthereof,adoptedbytheCompanyforensuringthecomplianceoftheconditionsoftheCorporateGovernance.ItisneitheranauditnoranexpressionofopiniononthefinancialstatementsoftheCompany.

Inmyopinionandtothebestofmyinformationandaccordingtotheexplanationsgiventome,IcertifythattheCompanyhascompliedwiththeconditionsofCorporateGovernanceasstipulatedintheabovementionedListingAgreement.

IstatethatnoinvestorgrievancesispendingforaperiodexceedingonemonthagainsttheCompanyaspertherecordsmaintainedbytheShareholders/InvestorGrievanceCommittee.

IfurtherstatethatsuchcomplianceisneitheranassuranceastothefutureviabilityoftheCompanynortheefficiencyoreffectivenesswithwhichthemanagementhasconductedtheaffairsoftheCompany.

place:Chennai N.C.ANANTHAkUMARM.Com.,F.C.A

Date:5.12.2007 CharteredAccountant MembershipNo:23667

mANAGemeNT DISCUSSION AND ANALYSIS RepORTTheobjectiveofthisreportistopresenttheManagement’sperspectiveofthedevelopmentsinthebusinessenvironment,challengesandopportunitiesbeforethecompanyaswellastoprovideananalysisofthecompany’sperformance.ThisreportshouldbereadinconjunctionwiththeDirector’sreporttotheShareholders,FinancialStatementsandNotesformingpartthereof.

I. economic Scenario:

TheCountry’seconomicperformancein2006-07wassustainedthemomentumoftheearlieryear.Theforexreservesswelledduetorecordinflowswhichresultedinthestrengtheningoftherupeevis-avisthebenchmarkcurrency-theUSdollar.TheEconomygrewatanaveragerateof8%andtherewasanallrounddemandfortheservicesandgoodsindustry.TheprogressiveliberalizationofthegovernmentalpoliciesespeciallywithregardtoForeignDirectInvestments,andJointVentureswithreputedinternationalmanufacturinghousesresultedinincreasedindustrializationandtheprogressivegrowthofStockmarkets.

II. Company’s performance:

A. Distillery Division:

TheIMFLmarketisestimatedtobemorethan125millioncasesandhasbeengrowingatanaveragerateof10to12%peryear.TheIndianliquorindustrycontinuestobeahighlytaxedandregulatedindustry.Theexcisedutyonliquorbeingastatesubject,multiplicityoflawsandregulationslegislatedbydifferentStategovernments, have contributed toanenvironmentwithdifferent requirementsacrossdifferentstates.The


�9

liquormarketisgrowingataveryfastpacethankstorapideconomicgrowth,increasingsocialacceptanceofliquorconsumptionandgreaterinfluenceofwesternculturecombinedwithrisingdisposableincomesinthehandsofthepopulation.

India’sper capita consumptionof alcoholicbeverages isoneof the lowest.According to industrydata, percapitaconsumptionofIMFLislessthan1litreascomparedwiththeglobalaverageof3.1litres.EvenasmallincreaseinpercapitaconsumptionwilltranslatetoaverysignificantgrowthoftheIndianindustrydueitslargepopulation.

InTamilNadu,thecompanyispresentacrossalltherangesoftheIMFLsegmentandhasthetopsellingbrandsinthepremiumBrandyandRumsegment.TheCompanyisaugmentingitsproductioncapacitiesbyinstallinga60kLpDGrainBasedDistilleryUnitandablendingandbottlingplantwithacapacityof70thousandcasespermonthatNelloreDistrictinthestateofAndhrapradesh.TheCompanyhasacquiredablendingandbottlingunitinkarnataka,wheretheproductioncapacitiesareexpectedtobearound1lakhcasespermonth.Withthesediversificationandexpansionplansinprogress,theCompanywillbeabletoestablishitspresenceasamajorplayerinallthefourstatesinSouthIndia.

Anewbrand“OldSecretBrandy”hasbeenlaunchedinthemediumbrandysegmentwhichisestimatedtoabout7-8lakhcasespermonth.Thelaunchof“EmpeespremiumGoldWhisky”inthepremiumsegmentisplannedinthefirstquarterof2008.WearealsoplanningtointroducepowerAppleVodkaandpowerOrangeVodkainthecomingmonths.

B. Real estate Division:

Theevergrowingpopulationinthecountryhaswitnessedanincreaseddemandforhousing.Withrisinglandcostswith in theMetrosdue tononavailability of space inprimeareas.The Indianhousing sector is veryfragmentedwithonlyaveryfeworganizedplayerswhohavearegionalpresence.ThegrowthintherealestatemarketisattributedtotheriseindisposableincomesduetorapidgrowthoftheITsectorandtheincreasedavailabilityofhousingfinance.Totakeadvantageof thepresentdemand,theCompanyhasfelt itprudenttodiversifyintothebusinessofpromotingHousingApartments.TheCompanypossessessufficientlandsinandaroundChennaiwhichareproposedtobedevelopedasastateofarthousingprojectwithspecialemphasisonhighqualityluxuryhousing.ThehousingprojectwhichwouldcompriseofluxuryapartmentsisbeingexecutedisinSriperambudur,nearChennaiwhichisdesignedbyanarchitectofinternationalrepute.TheotherresidentialprojectswhichareontheanvilareplannedinkuthumbakkamnearChennaiandWhitefieldnearBangalore.Atotalof40lakhsqftwillbeconstructedbythecompanyinthenext3years.

C. power Generation Division:

Therapidgrowthoftheindustryhaswitnessedthesurgeinthedemandforpower,whichhasbeenidentifiedasoneofthegrowthareasbytheCompany.TheCompanyhasinitiallymadeaforayintothisfieldbysettingupecofriendlywindturbinegeneratorswhichgeneratespowerusingrenewablenonconventionalenergywithoutdependingonfossilfuel.Infurtherancetoitsexpansionplans,theCompanyisintheprocessofsettingupa10MWbiomassbasedpowerplantinAranthanginearTrichyinTamilnaduwhichisexpectedtobeoperationalinthefirstquarterof2008.TheCompanyfurtherplanstosetuptwomorepowerplantsinTamilnadu.Otherformofpowergenerationviz.solarpowergenerationandhybridtechnologyarealsobeingactivelypursuedbythe


�0

company.TherevenuesareexpectedtoaccruetotheCompanyinthecurrentfinancialyear.

Financial performance:

Duringtheyearended30thSeptember,2007,yourCompanyachievedremarkablegrowthof31%overthelastyear’sSalesVolume.ThetotalSalesVolumecrossed4millioncasesduringtheyear.TheCompany’smarketsharehasalsoincreasedsignificantlyduringtheyear.TheCompanycontinuedtomaintainastrictcontroloveritscoststomaximizeindividualproductcontribution.

III. Growth prospects:

The Company sees a very good potential for growth across all the three lines of businesses. With higherdisposableincomesandchangeinconsumerbehaviorandliberalizedgovernmentpolicies,theofftakefortheCompany’sproductsareassuredandthedemandisexpectedtoescalateinthecomingyears.

IV. Opportunities, Threats and Risks:

WhiletherehasbeenarobustgrowthoftheIMFLmarket,thereisafurtherscopeforexpansion,ThegovernmentpolicieswillhaveagreatimpactontheIMFLbusinessastheentryofnewplayersinthisfieldiscontrolledbythemandvariesfromstatetostate.Withregardtotherealestatebusiness,theGovernmentiscommittedtoprovidinghousing toall in thecountryand itspoliciesarestructured in thisdirectionwhichaugurswellwiththebusinessplansof theCompany.Exceptinganygovernmentalcontrol,no threatassuch isperceived inthissector.An immensepotential is foreseen in thepowerGenerationas thedemandforpower isgrowingyearafteryear;However,thetransmissionanddistributionofpower,whichisstillwiththeexclusivedomainoftheStateElectricityBoards,mayaffecttheprofitabilityoftheCompanyduetocapacityconstraintsfacedbythemtoeffectivelyhandlethepowergenerated.TheCompanyisexposedtoBusinessRiskswhichincludethegovernmentalpoliciesasstatedhereinbefore.TheCompanyhasbroadbaseditsscopeofoperationssoastominimizetheimpactwhichmaybecausedtoanyparticularsegmentofbusiness.WithregardtoAssetRisks,TheCompanyensuresthatitsassetsareproperlysafeguardedagainstallinsurablerisksbyobtainingperiodicaladvicefromtheunderwriters.TheCompany’soperationsarecapitalintensiveespeciallywithregardtoitspowerandRealEstateDivisions.AstrictcontrolismaintainedovertheinterestcostofborrowingandajudiciousmixofLCandGuaranteesareresortedtoforfinancinglargescalepurchasestomitigatetheFinancialRisks.

V. Internal Control Systems:

TheCompanyhasadequate internalcontrolsystemsandproceduresinstalledatall levels.InternalControlSystemsarecontinuouslymonitoredfortheiradequatenessandstrengthenedthroughanongoingprocess.Thereportof Internalaudit is regularlydiscussedwith themanagementandcorrectivemeasures,whereverrequired,aretakenandcontinuouslymonitored.

VI. Cautionary Statement:

StatementsintheManagementdiscussionandanalysisreportoutliningtheCompany’sestimates,perceptionsandexpectationsmaybeforwardlookingstatementswithinthemeaningofapplicable lawsandregulations.TheActualresultsmaydiffermateriallyfromthoseexpressedhereinaboveduetocertainfactorswhichmaybebeyondthecontroloftheCompany.


��

Auditor’s Report

To the members of empee Distilleries Limited

IhaveauditedtheattachedbalancesheetofM/sempee DISTILLeRIeS LImITeD,693,MountRoad,Chennai600006asat30thSeptember2007andalsotheprofitandLossAccountfortheyearendedonthatdatean-nexedtheretoforyearendedonthatdate.Thesefinancialstatementsaretheresponsibilityofthecompany’sManagement.Myresponsibilityistoexpressanopinionorthesefinancialstatementsbasedonmyaudit.

1) I have conducted my audit in accordance with auditing standards generally accepted in India, thosestandards require that I plan and perform the audit to obtain reasonable assurance about whether thefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexamining,ontestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.Anauditalsoincludesassessingtheaccounting principles used and significant estimates made by management as well as evaluating theoverallfinancialstatementspresentation.Ibelievethatmyauditprovidesareasonablebasisformyopinion.

2) AsrequiredbytheCompanies(Auditor’sReport)Order,2003issuedbetheCenralGovernmentofIndiaintermsofsub-section(4A)ofsection227oftheCompaniesAct,1956,IencloseintheAnnexureStatementonthemattersspecificedinparagraphs4and5ofthesaidorder.

3) Furthertomycommentsinannexurereferredtoabove,Istatethat:

i) Ihaveobtainedalltheinformationandexplanations,whichtothebestofmyknowledgeandbeliefwerenecessaryforthepurposeofmyaudit.

ii) Inmyopinion,properbooksofaccountsasrequiredbylawhavebeenkeptbytheCompanysofarasappearsfrommyexaminationofthosebooks.

iii) TheBalanceSheetandprofitandLossAccountandCashflowstatementdealtwithbythisreportareinagreementwiththebooksofaccounts.

iv)Inmyopinion,theBalanceSheetandprofitandLossAccountdealtwithbythisreportcomplywiththemandatoryaccountingstandardsreferredtoinsubsection(3C)ofsection211oftheCompaniesAct,1956.

v) Inmyopinionandbasedoninformationandexplanationgiventome,noneoftheDirectorsaredisquali-fiedason30thSeptember2007frombeingappointedasaDirectorintermofclause(g)ofsub-section(1)ofsection274oftheCompaniesActins,1956.

vi) Inmyopinionandtothebestofmyinformationandaccordingtotheexplanationgiventome,thesaidAccountsreadtogetherwiththesignificantAccountingpoliciesandothernotesthereongivetheinfor-mationrequiredbytheCompaniesAct1956,inthemannersorequiredandgiveatrueandfairviewinconformitywiththeAccountingprinciplesgenerallyacceptedinIndia.

i. InsofarasitrelatestoBalancesheet,ofthestatementofaffairsoftheCompanyasat30thSeptem-ber2007and

ii. InsofarasitrelatestoprofitandLossaccountoftheprofitoftheCompanyfortheyearendedonthatdate.


Date:5.12.2007 CharteredAccountant MembershipNo:23667


��

Annexure referred to in paragraph � of the Auditor’s Report to the members of empee Distilleries Lim-ited on the Accounts for the year ended �0th September, �007

Onthebasisoftheinformationandexplanationsgiventomeandthebooksandrecordsexaminedbymeinthenormalcourseofmyauditandtothebestofknowledgeandbelief;

1.InrespectofFixedAssets;

a. Thecompanyhasmaintainedproperrecordsshowingfullparticularsincludingquantitativedetailsandsituationoffixedassetsonthebasisofavailableinformation.

b. Asexplainedtome,thefixedassetshavebeenphysicallyverifiedbytheManagementduringtheyearinaphasedperiodicalmanner,whichinmyopinionisreasonablehavingregardtothesizeofthecompanyandnatureofitsassets.Nomaterialdiscrepanciestherenoticedonsuchphysicalverfication.

c. InmyopinionthecompanyhasnotdisposedofsubstantialpartoffixedassetsduringtheyearandthegoingconcernstatusoftheCompanyisnotaffected.

2.InrespectofInventories;

a. Asexplainedtome,InventorieshavebeenphysicallyverifiedbytheManagementatregularintervalsduringtheyear.

b. Inmyopinionandaccordingtotheexplanationgiventome, theproceduresofphysicalverificationofinventoriesfollowedbytheManagementarereasonableandadequateinrelationtothesizeofthecom-panyandnatureofitsbusiness.

c.Thecompanyhasmaintainedproperrecordsofinventories.AsexplainedtometherewerenomaterialdiscrepanciesnoticedonphysicalverificationofinventoryascomparedtothebooksofAccounts.

3. InrespectofLoans,SecuredorUnsecured,grantedortakenbytheCompanyto/fromCompanies,FirmsorotherpartiescoveredintheRegistermaintainedintheSection301oftheCompaniesAct,1956.

a. TheCompanyhasalsograntedloanstotheCompaniesunderthesameManagement.Inmyopinionandaccordingtotheinformationandexplanationgiventome,thetermsandconditionsarenotprimafacieprejudicialtotheinterestoftheCompany.

4. Inmyopinionandaccordingtotheinformationandexplanationgiventome,thereareadequateinternalcontrol procedures commensurate with the size of the Company and the nature of its business for thepurchaseofInventoryandFixedAssetsandforthesaleofgoodsandservices.Duringthecouresofmyaudit,Ihavenotobservedandmajorweaknessininternalcontrols.

5. Inrespectoftransactionscoveredundersection301oftheCompaniesAct1956.

a. Inmyopinionandaccordingtotheinformationandexplanationgiventomet,theparticularsofContractsorArrangement referred to inSection301of theCompaniesActhavebeenentered in theRegisterrequiredtobemaintainedunderthatSection.

6. Thecompanyhasnotacceptedanydepositsfromthepublic.

7. InmyopinionthecompanyhasanadequateInternalAuditSystemcommensuratewiththesizeandthenatureofitsbusiness.


��

8. TheCentralGovernmenthasnotprescribedmaintenanceofcostrecordundersection209(1)(d)oftheCompaniesAct,1956fortheproductsofthecompany.

9.Inrespectofstatutoryduestherearenoundisputedstatutoryduesincludingprovidentfund,investoredu-cationandprotectionfund,employessstateinsurance,Incometax,Wealthtax,Salestax,CustomsDuty,servicetax,exciseduty,CessandotherStatutoryduesoutstandingasat30thSeptember2007foraperiodofmorethan6monthsfromthedateofbecomingpayable.

10. Thecompanyhasnoaccumulatedlossason30.9.2007.

11. Basedonauditproceduresandaccordingtotheinformationandexplanationgiventome,Iamoftheopin-ionthattheCompanyhasnotdefaultedinrepaymentofduestoFinancialInstructions,Banksetc.

12. Inmyopinionandaccordingtotheinformationandexplanationgiventome,IamoftheopinionthattheCompanyisnottradinginSecurities,DebenturesandotherInvestments.

13. InmyopiniontheCompanyisnotaChitFundaNidhiMutualBenefitFund/Society.Thereforeclause4(xiii)oftheCompanies(Auditor’sReport)order2003isnotapplicabletotheCompany.

14. TheCompanyhasgivenguaranteeforloanstakenbyEmpeeSugarsandChemicalsLtdfromBankandFinancialInstructions.Iamoftheopinionthatthetermsandconditionsthereofarenotprimafaciepreju-dicialtotheinterestoftheCompany.

15. TheCompanyhasobtainedandutilizedthetermloanforwhichpurposethetermloanwasavailed.

16. TheCompanyhasnotutilizedthefundsraisedforshorttermpurposeforlongterminvestment.

17. DuringtheyeartheCompanyhasnotmadeanypreferentialallotmentofsharestopartiesandCompaniescoveredintheRegistermaintainedunderSection301oftheCompaniesact1956.

18. TheCompanyhasnotissuedanydebenturesduringtheyear.Hencethequestionofcreatingsecuritiesinrespectofthesamedoesnotarise.

19. TheCompanyhasnotraisedanymoneybywayofpublicIssueduringtheyear.

20. In my opinion and according to the information and explanation given to me, no fraud on or by theCompanyhasbeennoticedorreportedduringtheyearthatcausestheFinancialStatementstobemateriallymisstated.


Date:05.12.2007 CharteredAccountant

MembershipNo.23667


��

BALANCE SHEET

pARTICULARS ScheduleAs at

�0.09.�007(Rs in Lacs)

Asat30.09.2006(Rs in Lacs)

SOURCES OF FUNDS

Share Capital 1 1420.40 1420.40

Reserves & Surplus 2 5979.80 5599.08

Secured Loan 3 5955.54 4154.47

Unsecured Loan 1801.98 0.00

Deferred Tax Liabilities 4 534.41 402.96

Total 15692.13 11576.91

APPLICATION OF FUNDS

Fixed Assets 5

Gross Block 5484.06 6105.60

Less: Accumulated depreciation 1353.37 1467.86

Net Block 4130.69 4637.74

Add: Capital WIP 3623.16 742.43

7753.85 5380.17

Investments 6 807.19 1667.11

CURRENT ASSETS, LOANS & ADVANCES

Inventories 7 1862.75 1574.04

Sundry Debtors 8 1726.79 1182.41

Cash & Bank Balances 9 207.82 315.33

Loans & Advances 10 6682.15 4793.83

10479.51 7865.61

Less:

Current Liabilities & Provisions 11 3391.02 3379.63

Net Current Assets 7088.49 4485.98

Miscellaneous Expenditure 12 42.60 43.65

TOTAL 15692.13 11576.91

Significant Accounting Policies and Notes on Financial Statements 22

As per my report of even date annexed For and on behalf of the BoardN.C.Ananthakumar M.P.Purushothaman Nisha PurushothamanChartered Accountant Chairman & Managing Director Joint Managing DirectorMembership No.:23667Place: Chennai T.S.Raghavan N.S.SuryanarayananDate : 05.12.2007 Director Company Secretary


�5

pROFIT & LOSS ACCOUNT

pARTICULARS ScheduleYear ended �0.09.�007(Rs in lacs)

YearEnded30.09.2006(Rsinlacs)

INCOme

SalesIncome

IncomefromSaleofpower

OtherIncome

StockMovement

Total

eXpeNDITURe

Manufacturing&OtherExpenses

Rents,Rates&Taxes

EmployeeCost

AdministrativeExpenses

Selling&DistributionExpenses

powers&Fuel

Total

profit Before Interest, Depreciation Tax and extra-Ordinary items

FinancialCost

Depreciation

DeferredRevenueExpenses

profit before Taxation & extra Ordinary Items

Add:DepreciationWrittenBackdueto

ChangeinMethodofDepreciation

Total

provisionforTaxation-Current

-DeferredTax

profit after Taxation

earning per equity Share (Basic/Diluted) Before extraordinary items (Face Value Rs. �0/- per share)

earning per equity Share (Basic/Diluted) After extraordinary items (Face Value Rs. �0/- per share)

13

14

15

16

17

18

19

20

21

5

6�569.59

��.5�

6�6��.��

��79.60

(��.�5)

6�778.�6

��08�.�5

�60�8.��

66�.�8

8��.8�

��97.78

�97.�5

600��.99

�756.�7

5�7.50

�8�.��

��.56

�986.08

0.00

�986.08

8��.�6

��.�5

�0�0.�7

��.�5

��.�5

47,879.93

52.93

47932.86

558.22

(192.11)

48,298.97

7,991.50

35,340.37

432.76

706.19

1,822.76

298.68

46,592.26

1,706.71

312.85

146.56

41.56

1,205.74

563.31

1,769.05

12.06

218.81

1,538.18

8.20

10.83

SignificantAccountingpoliciesandNotesonFinancialStatements 22

Aspermyreportofevendateannexed ForandonbehalfoftheBoard

N.C.AnanthakumarCharteredAccountantMembershipNo:23667

place:ChennaiDate:05.12.2007

M.p.purushothamanChairman&ManagingDirector

T.S.RaghavanDirector

NishapurushothamanJointManagingDirector

N.S.SuryanarayananCompanySecretary


�6

pROFIT & LOSS AppROpRIATION ACCOUNT

PARTICULARSYear Ended 30.09.2007(Rs. in Lacs)

Year Ended 30.09.2006(Rs. in Lacs)

Balance brought forward from previous year 1,584.08 48.95

Add: Net Profit transferred from Profit & Loss Account 2,010.47 1,538.18

Add: Prior Period Adjustment - 37.98

Amount available for Appropriation 3,594.55 1,625.11 Add: Transferred from General Reserve for bonus issue - 669.17

Less: Bonus Share issued - (710.20)

Proposed Dividend - -

Balance Carried to Reserves 3,594.55 1,584.08


N.C.AnanthakumarCharteredAccountantMembershipNo:23667

place:ChennaiDate:05.12.2007

M.p.purushothamanChairman&ManagingDirector

T.S.RaghavanDirector

NIshapurushothamanJointManagingDirector

N.S.SuryanarayananCompanySecretary


�7

SCHeDULeS TO THe ACCOUNTS

SCHeDULe �: SHARe CApITALAs at

�0.09.�007(Rs in Lacs)

Asat30.09.2006(RsinLacs)

Authorised:

3,00,00,000EquitySharesofRs.10/-each �000.00 3000.00

Issued, Subcribed & paid up: ��0.�0 1420.40

142,04,000EquitySharesofRs.10/-each ��0.�0 1420.40

SCHeDULe �: ReSeRVeS & SURpLUS

FixedAssetsRevaluationReserve �685.�5 2471.34

InvestmentsRevaluationReserve(seenote16) 0.00 843.66

GeneralReserve 700.00 700.00

profit&LossAppropriationA/c �59�.55 1584.08

5979.80 5599.08

SCHeDULe �: SeCUReD LOANS

TermLoanfromBanks&FinancialInstitutions �568.70 2241.23

WorkingCapitalLoans ��70.�� 1906.76

SecuredLoansfromNBFC’s �6.7� 6.48

5955.5� 4154.47

SCHeDULe �: DeFeRReD TAX LIABILITIeS

Depreciation 5��.�� 402.96

SCHeDULe 5 : FIXeD ASSeTS (Rs.inlacs)

GrossBlock Depreciation NetBlock

Opening Additions Deletions Closing Opening Forthe Deletions Closing NetBlock NetBlockNameoftheAsset Balance Balance Balance year* Balance ason ason 01.10.06 30.09.07 01.10.06 30.09.07 30.09.07 30.09.06

Land 1,490,61 223.78 48.36 1,666.03 0.00 0.00 0.00 0.00 1,666.03 1,490.56

FactoryBuildings 1,192.92 0.00 150.81 1,042.11 294.67 39.33 47.31 286.68 755.42 898.30

plant&Machinary 2,934.27 200.32 904.17 2,230.41 894.48 145.03 293.86 745.64 1,484.77 2,039.79

Computer 68.15 41.35 0.00 109.51 50.41 13.65 0.00 64.07 45.44 17.74

Furniture&Fitting 20.89 1.81 0.00 22.71 13.54 1.43 0.00 14.96 7.75 7.36

Computer 349.92 27.48 18.26 359.14 202.10 34.09 9.31 226.87 132.27 147.82

OfficeEquipments 48.84 5.32 0.00 54.15 12.66 2.49 0.00 15.15 39.01 36.17

GrandTotal 6,105.60 500.06 �,��.60 5,�8�.06 �,�67.86 ��6.0� �50.�8 �,�5�.�7 �,��0.69 �,6�7.7�

previous year 7,�0�.0� �76.69 �,�7�.�0 6,�05.60 �96�.97 ��7.9� �8�5.0� �,�67.86 �,6�7.7� ��6.0�

* Depreciation for the year amounts to Rs.5�.69 Lacs (previous year Rs.56.�� Lacs) is charged to Fixed Assets Revaluation Reserve A/c


�8

SCHeDULe 6: INVeSTmeNTS As at �0.09.�007(Rs in Lacs)

Asat30.09.2006(RsinLacs)

QUOTeD INVeSTmeNTS

AndhraBank

Cost(1000Equityshares) 0.96 0.96

Marketvalue(asof30thSeptember2007Rs.1.04Lakhs)

EmpeeSugars&ChemicalsLimited

(SubsidiaryCompany)

Cost(28122102EquityShares) �68.7� 1012.40

[email protected]

Marketvalue(asof30thSeptember2007Rs.2657.54Lakhs)

UNQUOTeD INVeSTmeNTS

ShareApplicationMoney 600.00 600.00

25000preferenceSharesofRs.10/-eachofCeatFinanceLtd �.50 2.50

EmpeeHotelsLtd �5.00 35.00

ZiqitzaHealthcareLtd 0.00 16.25

807.�9 1667.11

Total Quoted Investment - Cost Rs.�69.69 Lacs - market value as of �0th September �007 Rs.�658.57 Lacs

SCHeDULe 7: INVeNTORIeS

FinishedGoods

RawMaterials

Workinprogress

��6.��

��5.57

�00.9�

�86�.75

245.03

1134.61

194.40

1574.04

SCHeDULe 8: SUNDRY DeBTORS

(UnsecuredbutConsideredGood)

DebtsOutstandingforaperiodnotexceeding6months

Others

�5��.�5

�8�.��

�7�6.79

1004.98

177.43

1182.41

SCHeDULe 9: CASH & BANK BALANCeCashinHand

CashatBankinCurrentAccounts

96.80

��.0�

�07.8�

102.60

212.73

315.33


�9

SCHeDULe �0: LOANS & ADVANCeS

AdvanceRecoverableincashorinkindorforthe

valuetobereceived

(unsecuredbutconsideredgood)

Loans and Advances

AdvancetoSuppliers&OtherAssets

LoansandAdvancestoSubsidiary

(EmpeeSugars&ChemicalsLimited)

prepaidExpenses

Deposits

FixedDepositwithBanks

DepositwithGovernmentDepartments

OtherDeposits

Year ended �0.09.�007(Rs in Lacs)

5��0.0�

��8.��

��.�5

�9.�0

�5.��

�86.��

668�.�5

YearEnded30.09.2006(RsinLacs)

4080.25

425.98

21.39

0.50

118.01

147.70

4793.83

SCHeDULe ��: CURReNT LIABILITIeS & pROVISIONS

SundryCreditorsforSupplies

TradeDeposits

OtherCurrentLiabilities

provisions

650.�6

��.88

�057.66

6�0.��

��9�.0�

1032.18

42.30

2090.70

214.45

3379.63

SCHeDULe �� : mISCeLLANeOUS eXpeNDITURe

(Totheextentnotwrittenofforadjusted)

OSRLaunching&AdvertisementExpenses

ShareissueExpenses

0.00

��.60

��.60

41.56

2.09

43.65

SCHeDULe �� : SALeSSales-Basic

ExciseDutyCollected

SalesTaxCollected

Sales-kerala

Sales-Andhrapradesh

�5568.65

��076.95

��57.5�

�766.�8

0.00

6�569.59

12,400.95

17,585.49

16,491.85

1,297.27

104.37

47,879.93

SCHeDULe �� : OTHeR INCOme

DividendReceivedMakingChargesprofitonSaleofInvestementsprofitonSaleofAssetsDebit/CreditBalanceWrittenOffScrapSalesMiscellaneousIncome

0.0��9.�5

0.006��.��5.80

67.��.�7

��79.60

0.0494.80

245.680.49

102.3464.9849.89

558.22


�0

SCHeDULe �5 : DIFFeReNCe IN STOCK (FINISHeD GOODS)

ClosingStock:FinishedGoods

Work-in-process

Less:OpeningStock–FinishedGoods

-Work-in-process

Difference in Closing Stock


��6.��

�00.9�

��7.�8

��5.0�

�9�.�0

��9.��

(��.�5)

Yearended30.09.2006(RsinLacs)

245.03

194.40

439.43

381.14

250.40

631.54

(192.11)

Schedule �6 : RAW mATeRIAL CONSUmpTIONA. Opening Stock -

-RawMaterials

TOTAL

B. pURCHASeS

Spirit&SpecialSpirit

BottlingMaterials

ppCaps

kraftpaper

Labels

Essence&Flavours

OtherRawMaterialpurchased

ConsumptionofStores&Spares

C. Closing Stock

-RawMaterials

RAWMATERIALSCONSUMED(A+B-C)

��.6�

��.6�

5��0.�9

��66.6�

6��.��

�5�.�6

��.�5

�00.8�

579.�8

�0�.56

��8�.��

��5.57

��5.57

��08�.�5

960.41

960.41

3,867.31

2,802.17

477.72

216.17

197.81

79.91

457.39

67.22

8,165.70

1,134.61

1,134.61

7,991.50

SCHeDULe - �7 ReNT, RATeS & TAXeSExciseDuty

ExciseLabel

SalesTaxVat

AdditionalSalesTax

SalesTaxonScrapSales

LabelRegistrationFee

LabelRenewalFee

Rent

Rates&Taxes

��077.�0

�79.��

��57.59

��.�5

�9.97

0.�5

��.��

�0.7�

��7.7�

�60�8.��

17,633.55

197.44

16,494.24

750.83

1.97

8.80

36.55

21.57

195.42

35,340.37


��

SCHeDULe �8 : empLOYee COST

Salary&Allowances

ContributiontopF&ESI

StaffWelfareExpenses

Gratuitypaid

BonusandExgratia


58�.59

�0.87

�0.0�

�.56

�5.��

66�.�8

YearEnded30.09.2006(RsinLacs)

374.75

19.04

19.27

1.31

18.39

432.76

Schedule �9 : ADmINISTRATIVe eXpeNSeSAuditFees

BankCharges

postage&Telegram

printing/Stationery

Repairs&Maintenance

Donations

TelephoneExpenses

ConsultingCharges

TravellingExpenses

MiscellaneousExpenses

Cashdiscount

DiscountingCharges

�.75

�6.�5

0.��

��.0�

89.��

�.88

�5.0�

�7.9�

55.�6

��6.69

��5.8�

��.86

8��.8�

1.50

14.34

0.25

10.62

81.96

6.49

21.60

45.35

55.86

110.51

337.50

20.21

706.19

SCHeDULe �0 : SeLLING & DISTRIBUTION eXpeNSeS

Advt&publicity

TravellingExpenses-Mktg

ManufacturingMargin

Freight&HandlingCharges

Loading&UnloadingCharges

SalespromotionExpenses

OtherSellingExpenses

�.9�

�6.��

0.00

�56.70

6�.�0

�6�.9�

�65.0�

��97.78

10.40

25.00

178.38

280.16

49.76

924.28

354.78

1,822.76

SCHeDULe : �� FINANCIAL CHARGeSInterestpaid 5�7.50

5�7.50312.85

312.85


��

SCHeDULe -��: SIGNIFICANT ACCOUNTING pOLICIeS AND NOTeS ON FINANCIAL STATemeNTS

I SIGNIFICANT ACCOUNTING pOLICIeS

�. Basis of Accounting

The financialstatementsarepreparedandpresented inaccordancewithgenerallyacceptedaccountingprinciplesinIndiaandtheprovisionsoftheCompaniesAct,1956.Thecompanyfollowstheaccrualmethodofaccountingunderhistoricalcostconvention.

�. Recognition of Income & expenditure

Allincome&expenditureareaccountedforonaccrualbasisasstatedhereinexceptinrespectofsuchitemsasarespecificallymentionedhereunderandinthenotes.

Salesincomesareaccountedinclusiveofexcisedutyandsalestaxwhereverapplicablebutnetoftradediscounts.

�. Fixed Assets and Depreciation Amortization

3.1. Fixed Assets include assets for Financing Lease. These assets are stated at their original costof acquisition (including expenditure for the acquisition and/or installation) less accumulateddepreciation.

3.2. DepreciationonFixedassetshasbeenprovidedonStraightLineMethodat theapplicable ratesprescribedunderScheduleXIVtotheCompaniesAct,1956.Depreciationonadditiontofixedassetsduringtheyearisreckonedonaproratabasiswithreferencetothemonthinwhichthefixedassetsareputtouseorcommissioned.

3.3 FixedAssetscostinglessthanRs.5,000/-aredepreciatedfullyintheyearofacquisition

�. Impairment of Fixed Assets

Wherever events of changes in circumstances indicate that the carrying value of fixed assets may beimpaired, theCompanysubjectssuchassets toa testof recoverability,basedondiscountedcash flowsexpectedfromuseordisposalthereof.Iftheassetsareimpaired,theCompanyrecognizesasimpairmentlossasthedifferencebetweenthecarryingvalueandfairvaluelesscostofsale.NoneoftheCompany’sfixedassetsareconsideredimpairedasontheBalanceSheetdate.

5 Capital Work in progress.

CapitalworkinprogressisstatedatcostandincludesCapitaladvancespaidtothesuppliers.

6. Investments

6.1 Investmentsareclassifiedas“LongTerm”Investments.

6.2 Alllong-terminvestmentsarestatedatcost.provisionfordiminutioninvalue,otherthantemporary,isconsideredwherevernecessaryonanindividualbasis.

6.3 Investment Cost is arrived at on weighted average method for the purpose of valuation ofinvestment.


��

7 Inventories

Inventoriesarevaluedasunder:

a) FinishedGoods:Atcostormarketvaluewhicheverislower

b) Work-in-progress:Atmaterialcost,labourandproportionateDirectoverheads

c) RawMaterialsandStores&Spares:AtLandedCostonFIFObasis

8 Foreign Currency Transaction

8.1 Foreign Exchange transactions are recorded at the exchange rates prevailing at the time oftransaction.

8.2 AssetsandLiabilitiesexpressedinForeignCurrencies(totheextentnotcoveredagainstexchangefluctuations)aretranslatedintoIndianRupeesattheexchangerateprevailingattheBalanceSheetdate and any loss or gain arising there from has been included in Finance Charges as per theprovisionofAccountingStandards16and11issuedbyTheInstituteofCharteredAccountantsofIndia.

9. prior period and extra Ordinary Items

priorperiodandExtraOrdinaryItemshavingmaterialimpactonthefinancialaffairsoftheCompanyaredisclosed,whereverapplicable.

�0. Retirement and Other Benefits

10.1. TheCompanyAccountsGratuityLiabilityasandwhenGratuityispaidtotheemployees.

10.2. Contribution to provident Fund is made as per provisions of Employees provident fund andMiscellaneous provisions Act, 1952 and charged to profit and Loss Account and disclosedseparately.

10.3. The Company accounts leave encashment as and when the leave encashment is paid to theemployees.

��. Income Tax

TheIncomeTaxliabilityisprovidedinaccordancewiththeprovisionsoftheIncometaxAct1961.Deferredtaxisrecognized,subjecttoconsiderationofprudence,ontimingdifferences,beingthedifferencebetweentaxableincomesandaccountingincomethatoriginateinoneperiodandarecapableofreversalinoneormoresubsequentperiods.

��. Segment Reporting

A. Business Segments:

BasedontheguidingprinciplesgiveninAccountingStandardAS-17“SegmentReporting”issuedbytheInstituteofCharteredAccountantsofIndia,theCompany’sbusinesssegmentsincludeLiquor(IMFL)andpower.


��

B. Segment Accounting policies:

Inadditiontothesignificantaccountingpoliciesapplicabletothebusinesssegmentsasgiveninnotes,theaccountingpoliciesinrelationtosegmentaccountingareasunder:

a) Segment Revenue and expenses:

Joint revenueandexpensesof segmentsareallocatedamongst themona reasonablebasis.All othersegmentrevenueandexpensesaredirectlyattributabletothesegments.

b) Segment Assets and Liabilities:

Segmentassetsincludealloperatingassetsusedbyasegmentandconsistprincipallyofoperatingcash,debtors,inventoriesandfixedassets,netofallowancesandprovisions,whicharereportedasdirectoffsetsinthebalancesheet.Segmentliabilitiesincludealloperatingliabilitiesandconsistprincipallyofcreditorsandaccruedliabilities.Segmentassetsandliabilitiesdonotincludedeferredincometaxes,ShareCapital,Reserves,Loans,Investments,MiscellaneousExpenditureandprofitandLossAppropriationAccount.Whilemostoftheassets/liabilitiescanbedirectlyattributedtotheindividualsegments,thecarryingamountofcertainassets/liabilitiespertainingtobothsegmentsareallocatedtothesegmentsonareasonablebasis.

c) Inter Segment Sales:

Intersegmentsalesbetweenoperatingsegmentsareaccountedforatmarketprice.Thesetransactionsareeliminatedinconsolidation.

��. earnings per Share

TheCompanyreportsbasicanddilutedearningsperEquityShareinaccordancewithAccountingStandard–20,EarningsperShareissuedbytheInstituteofCharteredAccountantsofIndia.BasicearningsperEquitySharehavebeencomputedbydividingnetprofitaftertaxattributabletoEquityShareholdersbytheweightedaveragenumberofEquitySharesoutstandingduringtheyear.DilutedearningsduringtheyearadjustedforeffectsofalldilutivepotentialequitysharesperEquityShareiscomputedusingtheweightedaveragenumberofEquitySharesanddilutivepotentialEquitySharesoutstandingduringtheyear.ForBasicandDilutedearningsbeforeextra-ordinaryitems,theamountofextra-ordinaryitemsandtaxthereonareexcludedforcomputation.

��. miscellaneous expenditure

MiscellaneousExpenditureincludes:

(i) DeferredRevenueExpenditurewhichiswrittenoffovertheperiodoffiveyearsonstraightlinemethod.

(ii)ShareIssueExpenseswhichwillbewrittenoffovertheperiodoftenyearsonstraightlinemethodfromtheyearofthepublicissue.

II NOTeS ON FINANCIAL STATemeNTS:

1. TheCompanyclosesitsAccountingYearon30thSeptembereveryyear.

2. BonusShares

During thepreviousyear, theCompanyhad issuedbonusshares in the ratio1:1of thesharesheldon29.04.2006.TheBonusSharesareissuedoutofGeneralReserveandCreditBalanceinprofitandLossAccountoftheCompanytothetuneof41.02lacs.


�5

3. ExtraordinaryItems-ChangeinmethodofDepreciation

Duringthepreviousyear,theCompanyhadchangedthemethodofdepreciationfromwrittendownmethodtostraightlinemethod.Becauseofthechangeinthemethodofdepreciation,thecompanyhascreditedtheexcessdepreciationupto30thSept2005amountingtoRs.563.31lacsasDepreciationwrittenback.

Hadthechangehasnottakenplace,theprofitbeforetaxforthepreviousyearwouldbereducedfromRs.1769.05LacstoRs.1205.74Lacs.

4. EventsoccurringaftertheBalanceSheetDate

TheCompanyallotted48,04,893sharesofRs.10eachatapremiumofRs.390pershareaggregatingtoRs.400persharethrough100%bookbuildingprocess.Theshareshasbeenallottedtotherespectivesuccessfulapplicantson16thNovember2007.ThetotalproceedsofthepublicissueisRs.19219.57LacsconsequenttolistingoftheCompany’sSharesintheStockExchange.

5. Segment wise details as required by AS �7 issued by the Institute of Chartered Accountants of India are as under: (Rs.inLacs)

particulars ImFL power Unallocated Total

RevenueSalesOtherIncomeTotalRevenue

ResultSegementResultOperatingprofitInterestExpensesDepreciationNetprofit

Other InformationSegmentAssetsSegementLiabilitiesDepreciation

Capital expenditure

62569.591179.60

6�7�9.�9

��8�.082095.33

547.50163.73

��8�.�0

11844.823391.01

163.73

7�5.9�

41.52-

��.5�

��.�630.86

-17.60��.�6

3007.75-

17.60

�65�.86

---

613.11613.11

--

6��.��

3380.79--

-

62611.111179.60

6�790.7�

�0�0.�52739.30

547.50181.33

�0�0.�7

18233.363391.01

181.33

3380.79

6. SeCUReD LOANS:

1) WorkingCapitalFacility(OCC)fromAndhraBank,EgmoreBranch,Chennai-8forRs.1000lacsissecuredbyHypothecationofRawMaterials,StoresandConsumables,Work-in-process,FinishedGoodsandSalesReceivables(notolderthan90days)andfurthersecuredbyCollateralSecuritiesofsecondchargeonfixedassetsofthecompanyWDVofRs.1440.10lacsasof30.9.2002togetherwithassetstobeprocuredworthRs.532lacs,alsobypersonalguaranteeofthepromoterDirectorsMr.MppurushothamanandMrs.AkAruna.Loanisrepayableondemand.CurrentRateofInterest14%

2)WorkingCapitalFacility(OCC)fromAndhraBank,EgmoreBranch,Chennai-8forRs.500lacsissecuredbyHypothecationofRawMaterials,StoresandConsumables,Work-in-process,FinishedGoodsandSales


�6

Receivables(notolderthan90days)andfurthersecuredbyCollateralSecuritiesofsecondchargeonfixedassetsoftheCompanyIndustrialarea,kanjikode,pallakadDist.,kerala,LandandBuildingsituatedintheIndustrialDevelopmentArea,kanjikode,pallakadDist.,kerala,havingatotalextentof3.88acres,andalsobypersonalguaranteeofthepromoterDirectorsMr.M.p.purushothamanandMrs.A.k.Aruna.Loanisrepay-ableondemandCurrentRateofInterest15%

3) Term Loan from Indian Renewable Energy Development Agency Limited (IREDA) for Rs.633.00 lacs issecuredbywayofchargeonthewholeoftheimmovableandmovablepropertiesoftheCompanypertainingto2.00MWWindFarmprojectatperiyakumarapalayam,periyarDistrictintheStateofTamilNaduacquiredoutofIREDAloanandCompany’sownfunds,andalsobypersonalguaranteeofthepromoterDirectorsMr.M.p.purushothamanandMrs.A.k.Aruna.RepaymentwillbeuptoJan’08,RateofInterest12.5%,Repay-mentin28quartelyinstalmentsofRs.24.51lacseach.

4) Term Loan from Andhra Bank, Egmore, Chennai for Rs. 500.00 lacs is secured by way of first chargeonwholeof the immovablepropertiesof the company includingmachinery spares, tools&accessorieswhether installedornotat theCompany’s factory, premisesandgodownsat Industrial area,kanjikode,pallakadDist.,kerala,landandbuildingsituatedintheIndustrialDevelopmentarea,kanjikode,pallakadDist.,kerala,havingatotalextentof3.88acres,andalsobypersonalguaranteeofthepromoterDirectorsMr.M.p.purushothamanandMrs.A.k.Aruna.Rateofinterest12.75%.CurrentRateofInterest14.25%,Re-paymentin24quarterlyinstalmentsofRs.20.83lacseach.

5) TermLoanfromAndhraBank,EgmoreBranch,Chennai–8forRs.400lacstowardsmodernization/additionofplant&Machinery,BuildingsandConstructionofbottlingstorageyardetc..TheTermLoanissecuredbyFirstChargeontheexistingFixedAssetsconsistingofLand,Buildingandplant&MachineriesatMev-aloorkuppamVillage,SriperumbudurTaluk,kanchineepuramDist.WDVofRs.1440.10lacsason30.9.02togetherwithassetstobeprocuredworthofRs.532lacswiththeproposedTLofRs.400lacs,andalsothepersonalGuaranteeofMr.Mppurushothaman,Chairman&ManagingDirectorandMrs.AkAruna,Direc-tor.TheavailedtermloanisRs.322.34LacsCurrentRateofInterest15.25%.Repaymentin20quarterlyinstalmentsofRs.20lacseach.

6) TermLoan–powerDivision,fromAndhraBank,MountRoad,ChennaiforRs.500lacssecuredbywayofplantandMachineryproposedtobepurchasedfromoutoftheTermLoan&FirstchargeontheFixedAssetsoftheAranthangidivisionandalsobypersonalguaranteeofthepromoterDirectorsMr.M.p.purushothamanandMrs.A.k.ArunaCurrentRateofInterest14%.Repaymentin28quarterlyinstalmentsofRs.78.72lacseach.

7. CorporateLoanfromIndianOverseasBank,CathedralBranch,Chennai,forRs.1000lacscollateralsecurityofLandandBuildingofthe3Star“GrandOrientHotel”atAnnaSalai,ChennaiSituatedoveralandareaof5840Sq.ft.belongingtoourassociates,EmpeeInternationalHotels&ResordtsLimitedCurrentRateofInterest14.25%.Repaymentin36monthlyinstalmentsofRs.27.78lacseach.

8.CorporateLoanfromAllahabadBank,ThousandLightsBranch,Chennai,forRs.700lacscollateralsecurityofLandsituatedinS.No.782/2A,786/2,787,781/F,781/1D,778/2,779/1,&778/1ofkuthambakkamVillage,SriperumpudurTaluk.CurrentRateofInterest14.25%.Repaymentin36monthlyinstalmentsofRs.19.50lacseach.


�7

7. earning per Share

Basic and Diluted earning per Share – Before extra-Ordinary Items (Rs.inlacs)

particularsYear ended �0th

Sept �007YearEnded

30thSept2006

a. NetprofitaftertaxattributabletoEquityShareholders �0�0.�7 1164.48

b. WeightedaveragenumberofEquitySharesBasic/Diluted(Nos.) ��,0�,000 142,04,000

c. NominalvalueofEquityShare(Rs) �0/- 10/-

d. Basic/DilutedEarningperShare(Rs.) ��.�5 8.20

Basic and Diluted earning per Share – after extra-Ordinary Items

particularsYear ended �0th

Sept �007YearEnded

30thSept2006

a. NetprofitaftertaxattributabletoEquityShareholders(Rs.inlacs) �0�0.�7 1538.18

b. WeightedaveragenumberofEquitySharesBasic/Diluted(Nos.) ��,0�,000 142,04,000

c. NominalvalueofEquityShare(Rs) �0/- 10/-

d. Basic/DilutedEarningperShare(Rs.) ��.�5 10.83

8. Contingent Liabilities 8.1 CorporateGuaranteestotheBanks:Rs.1681.69Lacs(previousyearRs.2267Lacs)

8.2 Claimsagainstthecompanynotacknowledgedasdebts:Rs.87lacs(previousyearRs.41.77Lacs)

8.3 DisputedIncometaxdemandRs.1572lacs(previousyearRs.287.80Lacs)

8.4 DisputedSalesTaxdemandRs.1640lacs(previousyearRs.1639.83Lacs)

9. Esimatedamountofcapitalcontractsremainingtobeexecuted(Netofadvances)Rs.1215Lacs(previousyear–Rs.1275Lacs)

�0.During theyear,Rs.41.56hasbeenwrittenoff fromDeferredRevenueExpenditure. AllLaunchingex-pensesviz.Advertisement,publicity&promotionalExpensesofthebrandOSRtothetuneofRs.207.80LacshadbeentreatedasDeferredRevenueExpenditureandhasbeenwrittenoffoveraperiodof5yearscommencingfromthefinancialyear2002-03.

��.Balancesinsomeofthepartiesaccountedaresubjecttoconfirmation.

��.Intheabsenceofreceiptofinformationregardingsmallscaleindustrialstatusfromtheparties,thedetailsofnamesofsmallscaleindustrialundertakingtowhichthecompanyoweanysumtogetherwithinterestoutstandingformorethan30dayscouldnotbeascertained.


�8

C. Key management personnel

Name Designation

M.p.purushothaman Chairman&ManagingDirector

Ms.Nishapurushothaman JointManagingDirector

D. Transactions with related parties

a. Transactions with Subsidiary – empee Sugars and Chemicals Limited (Rs.inlacs)

Nature of Transaction �006-07 2005-06

SalesofAssets 6�8.00 -

InterestReceived 65.�7 -

ShareEquitycontributionsincashorkind �68.7� 168.74

Receivable ��8.�� 425.99

��. Related party Transaction

A. Related parties

i. EmpeeHoldingsLimited

ii. SubsidiaryCompany

1. EmpeeSugars&ChemicalsLimited

iii. Fellow-SubsidiaryCompany

1. EmpeepowerCompany(India)Limited

B. Associate Companies / Firms

EmpeeInternationalHotels&ResortsLtdSouth(India)Hotelspvt.LtdAppolloAlchobevLtd.ArunaExportspvt.LtdEmpeeHotelsLtdArunaConstructions(India)LtdEmpeeAgroFarmproductspvt.LtdEmpeeMarineproductsLtd.AppolloWindEnergypvt.LtdAppolloBeerspvt.Ltd

EmpeeLeasing&FinanceLtd.EmpeeHeritageInnpvt.LtdEmpeeAirwaysLtd.UniversalSpiritsLtdEmpeeConstructionCompanypvt.LtdEmpeepower&Infrastructurepvt.LtdEDLpropertiesprivateLimitedEmpeepackagingIndustriesArunaConstructionsN.S.Travels


�9

b. Transactions with Associate Companies / Firms / Individuals (Rs.inlacs)

Nature of Transaction and Associates �006-�007 2005-2006

Rentpaid–ArunaConstructions �5.8� 15.79

CartonsBox-EmpeepackagingIndustries 55.�6 52.63

SaleofInvestments–EmpeeHoldingsLimited �.50 -

ShareApplicationMoney–EmpeeMarineproductsLtd �00.00 200.00

ShareApplicationMoney–AppolloAlchobevLtd �00.00 300.00

ShareApplicationMoney–EmpeeHotelsLtd 50.00 50.00

ShareApplicationMoney–EmpeepowerCompany(I)Ltd 50.00 50.00

Investment-EmpeeHotelsLtd �5.00 35.00

HouseRentpaidtoMrs.Sheenapurushothaman 0.�5 -

c. Transactions with Key managerial personnel (Rs.inlacs)

Nature of Transaction �006-�007 2005-2006

Director’sremuneration(Ms.Nishapurushothaman) ��.00 12.04

��. Auditor’s Remuneration: (Rs.inlacs)

particulars �006-�007 2005-2006

AuditFees �.�5 1.25

TaxAuditfee 0.�5 1.25

Forotherservices 0.�5 -

Total �.75 1.50

�5. Details of Fixed Assets Revaluation Reserve: (Rs.inlacs)

particulars �006-�007 2005-2006

OpeningBalance ��7�.�� 2662.66

Less:Writtenoffduringtheyear 7��.�� 134.99

Less:Depreciationontherevaluedasset 5�.69 56.33

ClosingBalance �685.�5 2471.34

�6. AspertheAS13issuedbyTheInstituteofCharteredAccountantsofIndia,theInvestmentRevaluationreserveamountingtoRs.843.66lacshasbeennettedoffagainsttheinvestmentaccountduringtheyear.

�7. UnsecuredloanrepresentsshorttermloanavailedfromGlobalTradeFinanceLimitedwiththecurrentrateofinterestof12.50%.Theloanisrepayableondemand.


�0

Details of Subsidiary Companies required to be disclosed as per the approval for exemption granted by the Government of India Under Section ��(8) of the Companies Act, �956.

(Rs.inlacs)

particulars empee Sugars and Chemicals Ltd

empee power Company (india) Ltd

FinancialYear 2006-07 2005-06 2006-07 2005-06

ShareCapital 4,197.01 4,197.01 5.00 5.00

Reserves&Surplus (610.08) (653.62) - -

TotalLiabilities* 5,941.32 3,334.35 154.31 43.80

TotalAssets 8,028.25 5,377.74 123.51 19.14

TotalIncome(includingotherincome) 6,115.54 10,151.62 - -

profitBeforeTax 54.26 830.49 - -

provisionforTax (33.31) (200.59) - -

profitAfterTax 87.57 1,031.08 - -

proposedDividend(includingTax) - - - -

Details of investment (Other than Subsidiaries)6yrsNSCVIIIsssue

0.11 0.11 - -

*TotalLiabilities=LoanFunds+CurrentLiabilities

BALANCe SHeeT ABSTRACT AND COmpANY’S GeNeRAL BUSINeSS pROFILe (As required under part of Schedule VI to the Companies Act,�956)

I. Registration detailsRegistrationNo. 10313 Statecode 18BalanceSheetDate 30.9.2007 II.Capital Raised during the year (Rs. in thousands)publicissue Nil Rightissue NilBonusIssue Nil privateplacement Nil III. position of mobilisation and Development of funds ( Rs. in Thousands)TotalLiabilities �569� TotalAssets �569� Sources of funds: paid-upCapital 1420 Reserves&Surplus 5980SecuredLoans 5956 UnsecuredLoans 1802DeferredTaxLiabilities 534 Application of funds:NetFixedAssets 7754 Investments 807NetCurrentAssets 7088 Misc.Expenditure 43IV. performance of the Company ( Rs. in thousands)Turnover 63778 TotalExpenditure 60792profit/(Loss)Beforetax 2986 profit/(Loss)aftertax 2010EarningperShareinRs. 14.15 DividentRate% Nil V. Generic Names of Three principal products/ Services of Company (as per monetary items) ItemCodeNo(ITCCode) 220810 productDescription IMFL


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�8. Information pursuant to part II of Schedule VI of the Companies Act, �956 :

As at Asat �0.09.�007 30.9.2006 (in cases) (incases)A Licensed Capacity:

IMFLproducts-TN �8��800 3024000

IMFLproducts-kerala ��60000 2160000

BInstalled Capacity :

IMFLproducts-TN �8��800 3024000IMFLproducts–kerala ��60000 2160000

C production:

IMFLproducts-TN ��70506 2758468

IMFLproducts–kerala 570856 417703

D Sales :

IMFLproducts-TN ��6��05 2792785IMFLproducts-kerala 56�980 415650

e ClosingStocks:

IMFLproducts-TN 9��6 3125

IMFLproducts–kerala �98�5 20969

F a)ValueofImported(Rs.Lac)

RawMaterials,Spare

partsandcomponentsconsumed Nil Nil

RawMaterials,Spare

partsandcomponentsconsumed Nil Nil

a)CapitalGoods �96.78 Nil

b)Others Nil Nil

G expenditure in Foreign currency (Rs. Lac) Travel --- ---

H. earnings in foreign currency Nil Nil

19. Thepreviousyear’sfigureshavebeenregrouped/rearranged,whereverconsiderednecesary.

As per my report of even date annexed For and on behalf of the Board

N.C. Ananthakumar M.P. Purushothaman Nisha PurushothamanChartered Accountant Chairman & Managing Director Joint Managing DirectorMembership No:23667

Place : Chennai T.S.Raghavan N.S.SuryanarayananDate : 05.12.2007 Director Company Secretary


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CASH FLOW STATemeNT FOR THe YeAR eNDeD �0TH SepTemBeR �007(Rs.inlacs)

DESCRIPTION As at30.09.2007

As at30.09.2006

A. Cash Flow from Operating Activities: Net Profit before tax & extra ordinary items 2,986.08 1,205.74 Adjustment for: Depreciation 181.33 146.56 Interest Paid 547.50 312.85 (Profit)/Loss on Sale of Assets (613.11) - (Profit)/Loss on Sale of Investments 14.75 (245.68) Expenses Written off 41.56 39.47 Operating Profit before Working Capital Charges 3,158.11 1,458.95 (Increase)/Decrease in Stock (288.70) 37.84 (Increase)/Decrease in Current Assets (2,432.23) (2,803.59) Increase/(Decrease) in Current Liabilities 11.38 (317.37)Cash generated from Operations 448.55 (1,624.17) Tax Paid (844.16) (12.06)Net Cash used in operating activities (395.60) (1,636.23)

B. Cash flow from Investing Activities

Purchase of Fixed Assets (incl CWIP) (3,380.79) (865.92) Sale of Fixed Assets 598.13 - Sale/ (Purchase) of Investments 16.25 249.97 Miscellaneous Expenditure (1.05) - Net cash from investing activities (2,767.45) (615.95)

C. Cash flow from Financing Activities

Increase in Working Capital 463.37 805.04 Net of increase/decrease in Term Loan 3,139.67 1,660.24 Interest Paid (547.50) (312.85)Net Cash used in Financing Activities 3,055.55 2,152.43 Increase in Cash and Cash Equivalents (107.51) (99.75)Cash and Cash Equivalents at the beginning of the year 315.33 415.10

Cash and Cash equivalents at the end of the year 207.82 315.33

As per my report of even date annexed For and on behalf of the Board

N.C. Ananthakumar M.P. Purushothaman Nisha PurushothamanChartered Accountant Chairman & Managing Director Joint Managing DirectorMembership No :23667

Place : Chennai T.S.Raghavan N.S.SuryanarayananDate : 05.12.2007 Director Company Secretary


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RepORT OF THe AUDITORS TO THe BOARD OF DIReCTORS OF empee DISTILLeRIeS LImITeD

IhaveauditedtheattachedconsolidatedBalanceSheetofEmpeeDistilleriesLimitedanditsSubsidiaries(theGroup)asat30thSeptember,2007,andalsotheconsolidatedprofitandlossaccountandtheconsolidatedcashflowstatementfortheyearendedonthatdate,annexedthereto.TheseconsolidatedfinancialstatementsaretheresponsibilityofEmpeeDistilleriesLimited’smanagementandhavebeenpreparedbythemanagementon the basis of separate financial statements and other financial information regarding components. Myresponsibilityistoexpressanopinionontheseconsolidatedfinancialstatementsbasedonmyaudit.

IconductedmyauditinaccordancewiththeauditingstandardsgenerallyacceptedinIndia.ThoseStandardsrequirethatIplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexaminingonatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.Anauditalsoincludesassessingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallfinancialstatementpresentation.Ibelievethatmyauditprovidesareasonablebasisformyopinion.Ididnotauditthefinancialstatementsofsubsidiaries,whosefinancialstatementsreflect theGroup’sshareof totalassetsofRs.7856.12Lacsasat30thSeptember,2007and theGroup’sshareof total revenuesofRs.6647.65Lacs for theyearendedonthatdate,andnetcashinflowsamountingtoRs.220.45Lacsfortheyearendedonthatdateasconsideredintheconsolidatedfinancialstatements.Thesefinancialstatementsandotherfinancialinformationhavebeenauditedbyotherauditorswhosereportshavebeenfurnishedtous,andmyopinion,insofarasitrelatestotheamountsincludedinrespectofthesesubsidiaries,isbasedsolelyonthereportsoftheotherauditors.

I report that the consolidated financial statements have been prepared by Empee Distilleries Limited’smanagement in accordance with the requirements of Accounting Standard 21, Consolidated FinancialStatementsissuedbytheInstituteofCharteredAccountantsofIndia.Basedonmyauditandonconsiderationofthereportsofotherauditorsonseparatefinancialstatementsandontheotherfinancialinformationofthecomponents,inmyopinionandtothebestofmyinformationandaccordingtotheexplanationsgiventous,theattachedconsolidatedfinancialstatementsgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia:

(a)inthecaseoftheconsolidatedbalancesheet,ofthestateofaffairsofEmpeeDistilleriesLimitedasat30thSeptember,2007;

(b)inthecaseoftheconsolidatedprofitandlossaccount,oftheprofitfortheyearendedonthatdate;and

(c) inthecaseoftheconsolidatedcashflowstatement,ofthecashflowsfortheyearendedonthatdate.

Date:05.12.2007 N.C.ANANTHAkUMARCharteredAccountant

MembershipNo.23667

CONSOLIDATeD ACCOUNTSempee DISTILLeRIeS LImITeD

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CONSOLIDATeD BALANCe SHeeT (RsinLacs)

pARTICULARS

Schedule As at Asat

�0.09.�007 30.09.2006

SOURCeS OF FUNDS ShareCapital 1 ��0.�0 1420.40MinorityInterest 6��.�8 629.29Reserve&Surplus 2 6��6.�� 5859.12SecuredLoans 3 �0�6�.00 6315.78UnsecuredLoans �95�.�5 212.90DeferredTaxLiabilities 4 788.�� 684.57 TOTAL ��80.�7 15122.06 AppLICATION OF FUNDS FixedAssets 5 GrossBlock �0��.�� 10905.78Less:AccumulatedDepreciation �005.56 3905.38

NetBlock 6��8.66 7000.40Add:CapitalWIp 55�9.8� 1429.04

��958.�9 8429.44 Investments 6 6�8.59 654.82 CurrentAssets,Loans&Advances Inventories 7 �5�6.0� 2175.22SundryDebtors 8 ��85.08 1373.86Cash&BankBalances 9 ��7.0� 324.07Loans&Advances 10 70�0.7� 5631.97 ��78.8� 9505.12Less: CurrentLiabilities&provisions 11 �568.95 3510.97 NetCurrentAssets 8809.89 5994.15 MiscellaneousExpenses 12 7�.�0 43.65(Totheextentnotwrittenofforadjusted) TOTAL ��80.�7 15122.06

Significantaccountingpoliciesandnotesonfinancialstatements 22 Aspermyreportofevendateannexed ForandonbehalfoftheBoard

N.C.Ananthakumar M.p.purushothaman NishapurushothamanCharteredAccountant Chairman&ManagingDirector JointManagingDirectorMembershipNo:23667

place:Chennai T.S.Raghavan N.S.SuryanarayananDate:05.12.2007 Director CompanySecretary


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pARTICULARS

Schedule Year ended YearEnded

�0.9.�007 30.9.2006

INCOme

SalesIncome 13 69,�80.�8 55,447.71OtherIncome 14 588.69 723.96StockMovement 15 �75.�� (205.35)

69,9��.�9 55,966.32 eXpeNDITURe:

Manufacturing&OtherExpenses 16 �6,05�.�6 12,846.04Rents,Rates&Taxes 17 �6,�08.8� 35,803.19EmployeeCost 18 �,�0�.80 817.93AdministrativeExpenses 19 �,�87.69 1,016.19Selling&DistributionExpenses 20 �,�97.78 1,829.71powers&Fuels ��.�0 483.99

66,�6�.56 52,797.05

profitBeforeinterest,depandTax �,580.7� 3,169.27FinanceCost 21 8�8.�� 780.66Depreciation 5 �95.97 355.88DeferredRevenueExpenses ��.56 41.56

profitbeforeTax&ExtraOrdinary.Items �,�05.�0 1,991.17Add:DepreciationWrittenBackduetoChangeinMethodofDepreciation 563.31

�,�05.�0 2,554.48 provisionforTaxation-Current 8��.�6 12.06-DeferredTax �0�.67 159.99 profitafterTaxation �,�57.�6 2,382.43Add/(Less):MinorityInterest �6.�� (300.75)Add/(Less):CostofControlAccount 9.66

Retainedearnings �,�7�.�8 2,091.34

EarningperEquityShare(Basic/Diluted)before Extraordinaryitems(FaceValueRs.10/-perShare) 9.67 12.11

EarningperEquityShare(Basic/Diluted)after Extraordinaryitems(FaceValueRs.10/-perShare) 9.67 14.72

Significantaccountingpoliciesandnotesonfinancialstatements 22

(RsinLacs)CONSOLIDATeD pROFIT & LOSS ACCOUNT

Aspermyreportofevendateannexed ForandonbehalfoftheBoardN.C.Ananthakumar M.p.purushothaman Nishapurushothaman CharteredAccountant Chairman&ManagingDirector JointManagingDirectorMembershipNo:23667

place:Chennai T.S.Raghavan N.S.Suryanarayanan Date:05.12.2007 DirectorCompanySecretary

CONSOLIDATeD pROFIT AND LOSS AppROpRIATION ACCOUNT

Balancebroghtforwardfrompreviousyear ��7�.86 286.57Add:Netprofittransferredfromprofit&LossAccount �,�7�.�8 2,091.34Add:TransferfromGeneralReserve 669.17Add:priorperiodAdjustment 37.98AmountavailableforAppropriation �,7�8.�� 3,085.06Less:BonusShareissued (710.20)proposedDividend -BalanceCarriedtoReserves&surplus �,7�8.�� 2,374.86


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SCHeDULeS TO THe CONSOLIDATeD ACCOUNTS(RsinLacs)

As at Asat �0.09.�007 30.09.2006

SCHeDULe �: SHARe CApITAL Authorised:

3,00,00,000EquitySharesofRs.10/-each �000.00 3000.00

Issued,Subcribed&paidup: 142,04,000EquitySharesofRs.10/-each ��0.�0 1420.40

SCHeDULe �: ReSeRVeS & SURpLUS CapitalReserve(CostofControlA/c) ��.9� 312.92FixedAssetsRevaluationReserve �685.�5 2471.34GeneralReserve 700.00 700.00profit&LossAppropriation �7�8.�� 2374.86 6��6.�� 5859.12SCHeDULe �: SeCUReD LOANS TermLoanfromBanks&FinancialInstitutions 767�.65 4382.95WorkingCapitalLoanfromBanks ��70.�� 1906.76SecuredLoansfromNBFC’s ��7.�� 26.07 �0�6�.00 6315.78SCHeDULe �: DeFeRReD TAX LIABILITIeS Depreciation �090.�� 1014.81Less:Broughtforwardlosses (�0�.89) (330.24)

788.�� 684.57SCHeDULe 5 : FIXeD ASSeTS (Rs.inlacs)

GrossBlock DepreciationBlock NetBlock

Opening Additions Deletions Closing Opening Forthe Deletions Closing ason asonNameoftheasset Balance Balance Balance year* Balance 30.09.07 30.09.06 01.10.06 30.09.07 01.10.06 30.09.07

Land 1,740.95 294.66 48.36 1,987.25 0.00 0.00 0.00 0.00 1,987.25 1,740.90

FactoryBuildings 2,061.86 0.00 150.81 1,911.05 567.06 68.35 47.31 588.10 1,322.95 1,494.85

plant&Machinary 6,482.10 250.28 904.17 5,828.21 2,987.55 315.92 293.86 3,009.61 2,818.60 3,494.55

Furniture&Fittings 35.52 3.51 0.00 39.03 24.13 2.46 0.00 26.59 12.44 11.39

MotorVehicles 443.63 44.56 18.26 469.93 242.85 44.61 9.31 278.15 191.78 200.77

Computer 85.40 41.42 0.00 126.82 67.66 16.46 0.00 84.12 42.70 17.74

OfficeEquipments 56.32 5.61 0.00 61.93 16.13 2.86 0.00 18.99 42.94 40.19

GrandTotal �0,905.78 6�0.0� �,��.60 �0,��.�� ,905.�8 �50.66 �50.�8 �,005.56 6,��8.66 7,000.�9

previous year �0,6�6.87 �96.65 7.75 �0,905.78 �,�95.�� .�0 �.�6 �,905.�8 7,000.�9 6509.7�

* Depreciation for the year amounts to Rs.5�.69 Lacs (previous year Rs.56.�� Lacs) is charged to Fixed Assets Revaluation Reserve A/c


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SCHeDULe 6: INVeSTmeNTS (AtCost) QUOTeD INVeSTmeNTS AndhraBank Cost(1000equityshares) Marketvalue(asof30thSeptember2007Rs.1.04Lakhs) 0.96 0.96

UNQUOTeD INVeSTmeNTS

NSC 0.�� 0.11ShareApplicationMoney 600.00 600.0025000preferenceSharesofRs.10/-eachatCeatFinanceLtd �.50 2.50EmpeeHotels-Unquoted �5.00 35.00ZiqitzaHealthcareLtd - 16.25 6�8.59 65�.8�TotalQuotedInvestment-CostRs.0.96Lacs -Marketvalueasof30thSeptember2007Rs.1.04Lacs

SCHeDULe 7: INVeNTORIeS

FinishedGoods 659.6� 590.84Workinprogress �00.9� 194.40RawMaterials/Stores �585.�6 1389.98

�5�6.0� 2175.22

SCHeDULe 8: SUNDRY DeBTORS (UnsecuredbutConsideredGood) DebtsOutstandingforaperiodnotexceeding6months ��0�.7� 1196.43Others �8�.�� 177.43 ��85.08 1373.86

SCHeDULe 9: CASH & BANK BALANCeS

CashinHand �0�.�6 104.87CashatBankinCurrentAccounts ��.55 219.20

��7.0� 324.07SCHeDULe �0: LOANS & ADVANCeS (AdvanceRecoverableincashorinkindorforthevaluetobereceived) (Unsecuredbutconsideredgood) Loans and Advances

AdvancetoSuppliers&OtherAdvance 6,�9�.88 4914.61

prepaidExpenses 57.�� 21.39

Deposits

FixedDepositwithBanks �57.7� 3.52DepositwithGovernmentDepartments 67.65 118.75IncomeTax 6.9� 347.64OtherDeposits ��9.�� 226.06

70�0.7� 5631.97

As at �0.09.�007

Asat30.09.2006


�8

SCHeDULe ��: CURReNT LIABILITIeS & pROVISIONS SundryCreditorsforSupplies ��80.67 1089.36TradeDeposits ��.88 42.30OtherCurrentLiabilities �578.7� 1687.91provisions 666.69 691.40

�568.95 3510.97

SCHeDULe ��: mISCeLLANeOUS eXpeNSeS: (Totheextentnotwrittenofforadjusted)

OSRLaunching&AdvertisementExpenses - 41.56

ShareissueExpenses ��.60 2.09

pre-operativeexpenses �0.80 -

7�.�0 43.65

Year ended YearEnded �0.09.�007 30.09.2006SCHeDULe - �� SALeS Sales-Basic ��,8�8.6� 19,553.93

ExciseDutyCollected ��,�6�.�5 17,931.31

SalesTaxCollected ��,��.9� 16,560.83

Sales-kerala �,766.�8 1,297.27

Sales-Andhrapradesh - 104.37

69,�80.�8 55,447.71

SCHeDULe - ��OTHeR INCOme DividendReceived 0.0� 0.04MakingCharges �9.�5 94.80profitonSaleofInvestements - 245.68profitonSalesofAssets 9.�8 -Debit/CreditBalanceWrittenOff ��5.80 102.34ScrapSales 67.�� 64.98WindMillGeneration ��.5� 52.93MiscellaneousIncome 5.77 163.19

588.69 723.96SCHeDULe - �5DIFFeReNCe IN STOCK (FINISHeD GOODS)ClosingStock:FinishedGoods 659.6� 590.84Work-in-process �00.9� 194.40

960.56 785.24

Less:OpeningStock:FinishedGoods 590.8� 740.19Work-in-process �9�.�0 250.40

785.�� 990.59

Difference in Closing Stock �75.�� (205.35)

As at �0.09.�007

Asat30.09.2006


�9

SCHeDULe �6 : RAW mATeRIAL CONSUmpTION

A. Opening Stock -RawMaterials �,�89.98 1,108.40

�,�89.98 1,108.40

B. pURCHASeS

Spirit&SpecialSpint 5,��0.�9 3,867.31

BottlingMaterials �,�66.6� 2,802.17

ppCaps 6��.�� 477.72

kraftpaper �5�.�6 216.17

Labels ��.�5 197.81

Essence&Flavours �00.8� 79.91

OtherRawMaterialpurchased 59�.55 931.10

ConsumptionofStores&Spares �99.�6 112.34

Sugarcanepurchased �,050.�� 3,674.53

RawSugarpurchased - 105.74

FreightInward&HandlingCharges �6.6� 9.65

Molassespurchase �66.9� 653.17

�6,��6.6� 13,127.62C. Closing Stock -RawMaterials �,585.�6 1,389.98

�,585.�6 1,389.98

RAWMATERIALSCONSUMED(A+B-C) �6,05�.�6 ��,8�6.0�

SCHeDULe �7 :ReNT, RATeS & TAXeS

ExciseDuty ��,�6�.�0 17,979.37

ExLabel �79.�� 197.44

SalesTax/Vat ��,��.00 16,563.22

AdditionalSalesTax ��.�5 750.83

SalesTaxonScrapSales �9.97 1.97

LabelRegn.Fee 0.�5 8.80

LabelRenewalFee ��.�� 36.55

Rent �0.7� 42.37

Rates&Taxes ��7.7� 222.64

�6,�08.8� 35,803.19

Year ended �0.09.�007

YearEnded30.09.2006


50

SCHeDULe �8: empLOYee COST

Salary&Allowances 97�.87 718.27ContributiontopF&ESI 6�.�8 42.46StaffWelfareExpenses �5.5� 21.77Gratuitypaid 7.7� 9.90Bonus ��.�� 25.53

�,�0�.80 817.93

SCHeDULe �9 : ADmINISTRATIVe eXpeNSeS AuditFees �.77 4.61BankCharges �6.56 50.63postage&Telegram ��.�� 2.12printing/Stationery �6.6� 12.74Repairs&Maintenance �58.�5 115.78Donations �.88 7.56TelephoneExpenses �5.0� 33.10ConsultingCharges 86.�9 45.35TravellingExpenses �08.69 85.61MiscellaneousExpenses �6�.�6 658.69CashDiscount ��5.8� -DiscountingCharges ��.86 -

�,�87.69 1,016.19

SCHeDULe �0 : SeLLING & DISTRIBUTION eXpeNSeS

Advt&publicity �.9� 17.27

TravellingExpenses-Mktg �6.�� 25.00

ManufacturingMargin - 178.38

Freight&HandlingCharges �56.70 280.16

Loading&UnloadingCharges 6�.�0 49.84

SalespromotionExpenses �6�.9� 924.28

OtherSellingExpenses �65.0� 354.78

�,�97.78 1,829.71

SCHeDULe �� : FINANCIAL CHARGeS

Interestpaid 8�8.�� 780.66

8�8.�� 780.66

Year ended �0.09.�007

YearEnded30.09.2006


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Schedules forming part of Consolidated Accounts

SCHeDULe - �� : SIGNIFICANT ACCOUNTING pOLICIeS AND NOTeS ON FINANCIAL STATemeNTS

I SIGNIFICANT ACCOUNTING pOLICIeS

�. Basis of Accounting

The financialstatementsarepreparedandpresented inaccordancewithgenerallyacceptedaccountingprinciplesinIndiaandtheprovisionsoftheCompaniesAct,1956.Thecompanyfollowstheaccrualmethodofaccountingunderhistoricalcostconvention.

�. principles of Consolidation

(i) TheconsolidatedfinancialstatementsrelatetoEmpeeDistilleriesLimited(theCompany)andit’sSub-sidiaryCompanies.TheConsolidatedfinancialstatementshavebeenpreparedonthefollowingbasis.

ThefinancialstatementsoftheCompanyanditsSubsidiarieshavebeenpreparedonalinetolinecon-solidationbyaddingtogetherthebookvaluesoflikeitemsofassets,liabilities,incomeandexpensesasper the respective financialstatementsdulycertifiedby theauditorsof the respectivecompanies.Intra-groupbalancesand intra-group transactionsand theunrealizedprofits on stocksarisingoutofintra-grouptransactionshavebeeneliminated.

TheConsolidated financialstatementshavebeenpreparedusinguniformaccountingpolices for liketransactionsandothereventsinsimilarcircumstances.

(ii)TheSubsidiaryCompaniesconsideredintheconsolidatedfinancialstatementsare:

NameoftheCompany %ofvotingpowerheldonSeptember30,2007

Direct Indirect

EmpeeSugarsandChemicalsLimited 67.00 67.00

EmpeepowerCompanyIndiaLimited - 67.00

�. minority Interest (Rs.inlacs)

30.09.2007 30.09.2006

MinorityInterestasatthedateofinvestmentinthesubsidiaries 237.20 237.20

MinorityInterestinpostacquisitionprofit 375.98 392.10

Total 613.18 629.29

�.Retirement and Other Benefits

4.1. TheCompanyaccountsgratuityliabilityasandwhengratuityispaidtotheemployees.

4.2. ContributiontoprovidentFundismadeasperprovisionsofEmployeesprovidentfundandMiscel-laneousprovisionsAct,1952andchargedtoprofitandLossAccountanddisclosedseparately.

4.3. TheCompanyaccountsleaveencashmentasandwhentheleaveencashmentispaidtotheemployees.


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5. Income Tax

TheIncomeTaxliabilityisprovidedinaccordancewiththeprovisionsoftheIncometaxAct1961.Deferredtaxisrecognized,subjecttoconsiderationofprudence,ontimingdifferences,beingthedifferencebetweentaxableincomesandaccountingincomethatoriginateinoneperiodandarecapableofreversalinoneormoresubsequentperiods.

6. Segment Reporting

A. Business Segments:

BasedontheguidingprinciplesgiveninAccountingStandardAS-17“SegmentReporting”issuedbytheIn-stituteofCharteredAccountantsofIndia,theCompany’sbusinesssegmentsincludeLiquor(IMFL),power,SugarandIndustrialAlcoholicplant(IAp).

B. Segment Accounting policies:

Inadditiontothesignificantaccountingpoliciesapplicabletothebusinesssegmentsasgiveninnotes,theaccountingpoliciesinrelationtosegmentaccountingareasunder:

a) Segment Revenue and expenses:

Jointrevenueandexpensesofsegmentsareallocatedamongstthemonareasonablebasis.Allotherseg-mentrevenueandexpensesaredirectlyattributabletothesegments.

b) Segment Assets and Liabilities:

Segmentassetsincludealloperatingassetsusedbyasegmentandconsistprincipallyofoperatingcash,debtors,inventoriesandfixedassets,netofallowancesandprovisions,whicharereportedasdirectoffsetsinthebalancesheet.Segmentliabilitiesincludealloperatingliabilitiesandconsistprincipallyofcreditorsandaccruedliabilities.Segmentassetsandliabilitiesdonotincludedeferredincometaxes,ShareCapital,Re-serves,Loans,Investments,MiscellaneousExpenditureandprofitandLossAppropriationAccount.Whilemostoftheassets/liabilitiescanbedirectlyattributedtotheindividualsegments,thecarryingamountofcertainassets/liabilitiespertainingtobothsegmentsareallocatedtothesegmentsonareasonablebasis.

c) Inter Segment Sales:

Intersegmentsalesbetweenoperatingsegmentsareaccountedforatmarketprice.Thesetransactionsareeliminatedinconsolidation.

7. earnings per Share

TheCompanyreportsbasicanddilutedearningsperEquityShareinaccordancewithAccountingStandard–20,EarningsperShareissuedbytheInstituteofCharteredAccountantsofIndia.BasicearningsperEquitySharehavebeencomputedbydividingnetprofitaftertaxattributabletoEquityShareholdersbytheweightedaveragenumberofEquitySharesoutstandingduringtheyear.DilutedearningsduringtheyearadjustedforeffectsofalldilutedpotentialEquitySharesperEquityShareiscomputedusingtheweightedaveragenumberofEquitySharesanddilutivepotentialEquitySharesoutstandingduringtheyear.ForBasicandDilutedearningsbeforeextra-ordinaryitems,theamountofextra-ordinaryitemsandtaxthereonareexcludedforcomputation.


5�

8. miscellaneous expenditure

I MiscellaneousExpenditureinclueds:

(i) Deferredrevenueexpenditurewhichiswrittenoffovertheperiodoffiveyearsonstraightlinemethod.

(ii)Shareissueexpenseswhichwillbewrittenoffovertheperiodoftenyearsonstraightlinemethodfromtheyearofthepublicissue.

II NotesOnFinancialStatements:

1. TheCompanyclosesitsaccountingyearon30thSeptembereveryyear.

2. Bonus Shares

During the previous year, the Company had issued bonus shares of one share for the shares held on29.04.2006.TheBonusSharesareissuedoutofGeneralReserveandCreditBalanceinprofitandLossAccountoftheCompanytothetuneof41.02lacs.

3. extraordinary Items - Change in method of Depreciation

Duringthepreviousyear,thecompanyhaschangedthemethodofdepreciationfromwrittendownmethodtostraightlinemethod.Becauseofthechangeinthemethodofdepreciation,theCompanyhascreditedtheexcessdepreciationupto30thSept2005amountingtoRs.563.31lacsasDepreciationwrittenbackHadthechangehasnottakenplace,theprofitbeforetaxforthepreviousyearwouldbereducedfromRs.1769.05LacstoRs.1205.74Lacs.

4. events occurring after the Balance Sheet Date

TheCompanyallotted48,04,893sharesofRs.10eachatapremiumofRs.390pershareaggregatingtoRs.400perSharethrough100%BookBuildingprocess.TheShareshasbeenallottedtotherespectivesuccessfulapplicantson16thNovember2007.ThetotalproceedsofthepublicissueisRs.19219.57LacsconsequenttolistingoftheCompany’sSharesinthestockexchange.


5�

5. Segment wise details as required by AS �7 issued by the Institute of Chartered Accountants of India are as under:

(Rs.inLacs)

particulars ImFL pOWeR SUGAR IApUNALL

OCATeDeLImI

NATIONTOTAL

Revenue

Sales 62,569.59 4670.26 1940.43 - 69,180.28

OtherIncome 1,179.61 41.52 36.96 (669.40) 588.69

TotalRevenue 63,749.20 41.52 4,707.22 1,940.43 - (669.40) 69,768.97

Less:InterSegment (669.40) 669.40 -

6�,079.80 ��.5� �,707.�� ,9�0.�� - - 69,768.97

Result

SegmentResult ��8�.08 ��.�6 (8�7.6�) 768.�6 6��.�� (60�.9�) �,�57.�6

Operatingprofit 2095.31 30.86 (352.35) 939.28 613.11 (669.40) 2,656.81

InterestExpenses 547.50 0 317.03 104.52 - (65.47) 903.58

Depreciation 163.73 17.60 148.24 66.40 - 395.97

Netprofit �,�8�.08 ��.�6 (8�7.6�) 768.�6 6��.�� (60�.9�) �,�57.�6

Other Information

SegmentAssets 11,844.82 3007.75 5548.47 2307.56 3380.79 (1752.06) 24,337.33

SegmentLiabilities 3,391.01 0 512.95 213.32 0 (548.13) 3,568.95

Depreciation 163.73 17.60 148.24 66.40 0.00 0.00 395.97

Capital expendi-ture 725.93 2654.86 431.42 938.64 - - 4,750.85

6. earning per Share

Basic and Dilutive earning per share – Before extra-Ordinary Items

particularsYear ended

�0th Sept �007YearEnded

30thSept2006

a. NetprofitaftertaxattributabletoEquityShareholders 1373.38 1719.50

b. WeightedaveragenumberofEquitySharesBasic/Dilutive(Nos.) 142,04,000 142,04,000

c. NominalvalueofEquityShare(Rs) 10/- 10/-

d. Basic/DilutiveEarningperShare(Rs.) 9.67 12.11


55

Basic and Dilutive earning per share – after extra-Ordinary Items

(Rs.inlacs)

particularsYear ended

�0th Sept �007YearEnded

30thSept2006

a. NetprofitaftertaxattributabletoEquityshareholdersRs.inLacs 1373.38 2091.34

b. WeightedaveragenumberofEquitySharesBasic/Dilutive(Nos.) 142,04,000 142,04,000

c. NominalvalueofEquityShare(Rs) 10/- 10/-

d. Basic/DilutiveEarningperShare(Rs.) 9.67 14.72

7. Contingent Liabilities

7.1 CorporateGuaranteestotheBanks:Rs.1681.69Lacs

7.2 Claimsagainstthecompanynotacknowledgedasdebts:Rs.259.63lacs

7.3 DisputedIncometaxdemandRs.1572lacs

7.4 purchasetaxRs.818.15lacs

7.5 DisputedSalesTaxdemandRs.1640lacs

8. Esimated amount of capital contracts remaining to be executed (Net of advances)Rs.4763.94Lacs

9. Related party Transaction

A. Key management personnel

Name Designation

1.M.p.purushothaman Chairman/ManagingDirector

2.Ms.Nishapurushothaman JointManagingDirector-EmpeeDistilleriesLimited

3.Mr.k.Jayachandran JointManagingDirector–EmpeeSugarsandChemicalsLimited


56

a. Transactions with Associate Companies / firms / Individuals

(Rs.inlacs)

Nature of Transaction and Associates �006-07 2005-06

Rentpaid–ArunaConstructions(EDL) 15.84 15.79

Rentpaid–ArunaConstructions(ESCL) 15.79 15.79

CartonsBox-EmpeepackagingIndustries 55.46 52.63

SaleofInvestments–EmpeeHoldingsLimited 1.50 -

ShareApplicationMoney–EmpeeMarine 200.00 200.00

ShareApplicationMoney–AppolloAlchobevLtd 300.00 300.00

ShareApplicationMoney–EmpeeHotels 50.00 50.00

ShareApplicationMoney–Empeepower(I)Ltd 50.00 50.00

Investment-EmpeeHotelsLtd 35.00 35.00

HouseRentpaidtoMrs.Sheenapurushothaman 0.45 -

b. Transactions with Key managerial personnel (Rs.inlacs)

Nature of Transaction �006-07 2005-06

Mr.M.p.purushothaman(DirectorRemuneration)EmpeeSugars&ChemicalsLimited

30.00 40.53

Ms.Nishapurushothaman(DirectorRemuneration)EmpeeDistilleriesLimited

24.00 12.04

Mr.Jayachandran(DirectorRemuneration)EmpeeSugar&ChemicalsLimited

19.80 4.26


N.C.Ananthakumar M.p.purushothaman Nishapurushothaman CharteredAccountant Chairman&ManagingDirector JointManagingDirector MembershipNo:23667

place:Chennai T.S.Raghavan N.S.Suryanarayanan Date:05.12.2007 DirectorCompanySecretary


57

CONSOLIDATeD CASH FLOW STATemeNT(Rs.InLacs)

As at As atDeSCRIpTION �0.09.�007 �0.09.�006

A.CashFlowfromOperatingActivities:

NetprofitbeforeTax&ExtraOrdinaryItems 2,305.10 1,991.17

Adjustmentfor:

Depreciation 395.97 355.88

Interestpaid 838.11 780.66

(profit)/LossonSaleofAssets (9.18) -

(profit)/LossonSaleofInvestments 14.75 (245.68)

ExpensesWrittenoff 41.56 41.56

OperatingprofitbeforeWorkingCapitalCharges �,586.�� ,9��.59

(Increase)/DecreaseinStock (370.80) (56.30)

(Increase)/DecreaseinCurrentAssets (2,389.98) (2,743.42)

Increase/(Decrease)inCurrentLiabilities 57.98 (554.94)

CashgeneratedfromOperations 88�.5� (��.07)

Taxpaid (844.16) (12.06)

NetCashusedinOperatingActivities �9.�5 (��.��)

B.CashflowfromInvestingActivities

purchaseofFixedAssets(inclCWIp) (4,750.85) (1,650.15)

SaleofFixedAssets(Revaluationadjusted) 48.90 4.29

Sale/(purchase)ofInvestments(Revaluationadjusted) 1.50 249.97

MiscellaneousExpenditure (71.31) (2.09)

NetcashfromInvestingActivities (�,77�.77) (�,�97.98)

C.CashflowfromFinancingActivities

IncreaseinWorkingCapital 2,201.62 773.91

Netincrease/decreaseinTermLoan 3,481.85 1,722.43

Interestpaid (838.11) (780.66)

NetCashusedinFinancingActivities �,8�5.�6 �,7�5.68

IncreaseinCashandCashEquivalents ��.9� (��5.��)

CashandCashEquivalentsatthebeginningoftheyear ��.07 ��9.5�

CashandCashEquivalentsattheendoftheyear ��7.0� ��.07


N.C.Ananthakumar M.p.purushothaman Nishapurushothaman CharteredAccountant Chairman&ManagingDirector JointManagingDirector MembershipNo:23667

place:Chennai T.S.Raghavan N.S.Suryanarayanan Date:05.12.2007 Director CompanySecretary

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