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Annual Report2016-17

e cL I M I T E D

EICL Limited

ChairmanMr. Karan Thapar

DirectorsMr. Vijay Dilbagh RaiMr. T. BalakrishnanMr. Vijay Kishore SharmaMs. Shivpriya NandaMr. Joy Kumar Jain

Executive DirectorMr. Suresh Kumar Jain

Chief Operating OfficerMr. S. Ramakrishnan

Chief Financial OfficerMr. Mahendra Kumar Gupta

Company Secretary &Dy. G.M. (Corporate Legal)Mrs. Shalini Chawla

BankersAxis Bank LimitedICICI Bank LimitedInduslnd Bank LimitedHDFC Bank Limited

Registered OfficeTC-79/4, VeliThiruvananthapuram – 695 021Kerala

Head Office5th Floor, PTI Building16/7, Miller Tank Band AreaVasanth NagarBangalore – 560 052 (Karnataka)

Company InformationCIN : U26939KL1963PLC002039

AuditorsWalker Chandiok & Co. LLPChartered Accountants

Cost AuditorsA. R. Narayanan & Co.Cost Accountants

Internal AuditorsT. R. Chadha & Co.Chartered Accountants

Secretarial AuditorsCPA & Co.Company Secretaries

Registrar & Share Transfer AgentRCMC Share Registry Pvt. Ltd.B-25/1, Okhla Industrial Area, Phase – IINew Delhi – 110 020

Corporate Office801-803, Tower-B, 8th FloorGlobal Business Park, M. G. RoadGurgaon – 122 002 (Haryana)

WorksThiruvananthapuram (Kerala)Yamunanagar (Haryana)Shimoga (Karnataka)

CONTENTS Page No.

Board’s Report ............................................................................................................................... 3

Auditor’s Report .......................................................................................................................... 23

Balance Sheet .............................................................................................................................. 28

Profit and Loss Account ............................................................................................................... 29

Statement of Cash Flows ............................................................................................................. 30

Notes ........................................................................................................................................... 32

BOARD’S REPORTTo,The Members,Your Directors have pleasure in presenting the 53rd Annual Report of the Company and the audited financial statements forthe financial year ended 31st March, 2017.

FINANCIAL SUMMARYThe Company’s financial performance for the financial year ended 31st March, 2017 is summarized below:-

(`̀̀̀̀ in Crores)

31st March, 2017 31st March, 2016

Gross Profit before interest, depreciation & tax 65.98 67.78

Less : Interest 11.26 13.15

Gross Profit before Depreciation 54.72 54.63

Less : Depreciation 12.01 12.22

Profit before tax and exceptional items 42.71 42.41

Less : Exceptional Items 1.51 —

Tax Expenses :

Current Tax 13.97 14.91

Earlier year tax 0.25 0.06

Deferred Tax 0.08 0.05

Profit after Tax 26.89 27.39

Surplus brought forward from the previous year 98.74 87.15

Balance available for appropriation 125.63 114.54

Appropriations:

Dividend

- Preference Shares 2.35 3.30

- Equity Shares 5.03 7.54

Tax on Dividend 1.50 2.22

Transfer to Capital Redemption Reserve 20.00 -

Transfer to General Reserve 2.69 2.74

Surplus carried forward to next year’s account 94.06 98.74

RESERVESYour Company redeemed preference shares of ` 20.00 Crores and hence transferred ` 20.00 Crores to Capital RedemptionReserve during the year.The Directors of the Company propose to transfer a sum of ̀ 2.69 Crores to General Reserve out of the profits for the currentyear.

DIVIDENDYour Directors are pleased to recommend a final dividend @ ̀ 0.50 (25%) per Equity Share on 5,02,76,013 Equity Shares, face

3

Annual Report 2016-17

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value of ̀ 2/- each, amounting to ̀ 2,51,38,006 and a dividendof ` 2.75 per Preference Share on 10,00,000 11% CumulativeRedeemable Preference Shares, face value of ` 100/- each,amounting to ` 27,50,000/-. During the year, the Company had declared and paid twointerim dividends @ ` 0.50 (25%) each per equity share on5,02,76,013 equity shares of ` 2/- each, total amounting to ` 5,02,76,013/- and ` 5.50 and ` 2.75 per preference shareon 11% Cumulative Redeemable Preference Shares of `100/-each, total amounting to ` 2,34,61,644/- for the year ended31st March, 2017.During the year, the Company has redeemed 10,00,000 11%Cumulative Redeemable Preference Shares of ` 100/- eachon 4th September, 2016 and 10,00,000 11% CumulativeRedeemable Preference Shares of ̀ 100/- each on 17th March,2017 out of 30,00,000 Preference Shares of the Company heldby DBH International Pvt. Ltd., which was already approvedby the Board of Directors.The total outgo on account of dividend (including finaldividend of ` 2,78,88,006 as proposed by Board of Directorssubject to approval of shareholders) will be ` 12,23,14,618(including dividend tax of ̀ 2,06,88,964) for the financial yearended 31st March, 2017.

STATE OF THE COMPANY AFFAIRS/CHANGES IN THE NATUREOF BUSINESS, IF ANY.During the year under review, your Company registered a grossoperating profit (EBIDTA) of ` 65.98 Crores as against ` 67.78Crores in the previous year ended 31-03-2016 which ismarginally lower than the previous year. The profit after taxfor the year ended 31-03-2017 is ` 26.89 Crores viz-a-viz` 27.38 Crores in the previous year ended 31-03-2016, whichis after provision of exceptional item of ` 1.51 Crore.The total turnover of the Company was higher at ` 494.74Crores for the year ended 31-03-2017 as against ` 471.53Crores in the previous financial year ended 31-03-2016. TheOperating Profit of Clay Business got adversely affected mainlydue to higher raw material cost and higher fuel cost causedby increase in crude oil prices during the year. As regardsStarch Business, its Operating Profit got affected due to higherraw material cost and lower sales realization despite savingon bio-mass (Rice Husk) cost and other cost reductionmeasures.During the year, there is no change in the nature of businessof the Company.There is no qualification, reservation or adverse remark ordisclaimer by the Statutory Auditors which requires anyexplanation or comments from the Board of Directors of theCompany.

MATERIAL CHANGES EFFECTING FINANCIAL POSITION OF THECOMPANYThere are no material changes and commitments occurred,affecting the financial position of the Company, between theend of the financial year and the date of this report.There is no order passed by any regulator or court or tribunalagainst the Company, impacting the going concern conceptor future operations of the Company.

INVESTOR EDUCATION AND PROTECTION FUNDPursuant to Section 124 of the Companies Act, 2013, theamount of dividend remaining unpaid /unclaimed for a periodof seven years from the year 2009-10 has to be transferred tothe Investor Education and Protection Fund (IEPF) of theCentral Government of India. The unpaid/unclaimed dividendamount has been transferred to the IEPF.

COMPOSITION AND NUMBER OF MEETINGS OF THE BOARDThe Board of Directors of the Company comprises of wellqualified and experienced persons having expertise in theirrespective areas. It has appropriate combination of Executiveand Non-Executive Directors.The Board meets at least Four times in a year. Annual calendarfor the Board meetings for the financial year is fixed at thebeginning of each year. If necessary, the Board meetings arealso convened beyond the four meetings. During the financialyear 2016-17, the Directors met four times i.e., on 3rd May,2016, 27th July, 2016, 2nd November, 2016 and 17th February,2017.No Director is related to any other Director on the Board.

A STATEMENT ON DECLARATION GIVEN BY INDEPENDENTDIRECTORSPursuant to section 149(6) of the Companies Act, 2013 eachof the Independent Directors of the Company has given hisdeclaration in 2nd May, 2017 Board meeting confirming thatthey meet the criteria of independence.Majority of the Board, 5 out of 7, are Independent Directors.All the Independent Directors of the Company at the time oftheir first appointment to the Board and thereafter, at thefirst meeting of the board in every financial year, give adeclaration that they meet with the criteria of Independenceas provided under Section 149(6) of the Companies Act, 2013.

DIRECTORS/KEY MANAGERIAL PERSONNELMr. Karan Thapar (DIN: 00004264), retires by rotation at theforthcoming Annual General Meeting, and being eligible,offers himself for re-appointment. The Board recommendshis re-appointment.Mr. Vijay Dilbagh Rai (DIN : 00075837) and Mr. Vijay KishoreSharma (DIN : 05313925) were appointed as Independent

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Directors for a term of 3 years as approved by the Shareholdersin their meeting held on 20th June, 2014 who will hold officeupto the date of ensuing Annual General Meeting of theCompany.The Board recommends the appointment of Mr. Vijay DilbaghRai and Mr. Vijay Kishore Sharma for a further term of 5(Five)years upto the conclusion of the Annual General Meeting ofthe Company in the calendar year 2022.Mr. Vijay Dilbagh Rai who has attained the age of 70 years on13-10-2016, his appointment as an Independent Director willbe considered subject to the review by the Board of Directorsas per the retirement policy of Directors of the Company.Mr. Joy Kumar Jain (DIN: 06406359), Director of the Companyhas been appointed as an Independent Director of theCompany, not liable to retire by rotation, by the Board of theCompany in their meeting held on 27-07-2016, asrecommended by Nomination & Remuneration Committee,for a term upto the conclusion of the Annual General Meetingof the Company in the calendar year 2019, subject toShareholders approval.His appointment is submitted for your approval.Mrs. Shalini Chawla (ACS-22060) has been appointed as aCompany Secretary of the Company w.e.f. 2nd November, 2016.

STATEMENT ON ANNUAL EVALUATION MADE BY THE BOARDA formal evaluation of the Board, its Committees and of theindividual Director is one potential effective way to respondto the demand for greater Board’s accountability andeffectiveness. The effectiveness and performance of theBoard, its Committees and its members are evaluated andmeasured, considering the following parameters:-1. Performance of the Board/Committee against the

performance benchmark set.2. Overall value addition by the discussions taking place at

the Board meetings/Committee meetings.3. The regularity and quality of participation of the

individual Director in the deliberation of the Board andits Committees, close monitoring of the various actionstaken for the implementation of the Board’s decision.

The performance evaluation of Directors includingIndependent Directors is done by the entire Board of Directorsexcluding the Directors being evaluated. A questionnaire isprepared and is being circulated amongst the Directors fortheir comments. Review of the performance of theChairperson of the Company is done by taking into accountthe views of Executive and Non-Executive Directors of theCompany.

COMPOSITION OF AUDIT COMMITTEEIn compliance with the requirement of Section 177, asapplicable to the Company, the Board of Directors has

constituted Audit Committee. The members of the AuditCommittee possess financial/accounting expertise/exposure.The Audit Committee assists the Board in its responsibilityfor overseeing the quality and integrity of the accounting,auditing and reporting practices of the Company and itscompliance with the legal and regulatory requirements. Apartfrom the matters provided under Section 177(4) of theCompanies Act, 2013, the Audit Committee also review thesignificant legal cases pending and all material developmentsare reported to the Board.The Audit Committee comprised of Mr. Vijay Kishore Sharma(Chairman of the committee), Ms. Shivpriya Nanda and Mr.Joy Kumar Jain. However, the Audit Committee reconstitutedw.e.f. 2nd May, 2017 and the following are the members ofthe Audit committee:1. Mr. Joy Kumar Jain, Chairman of the Committee2. Mr. T. Balakrishnan, Independent Director3. Ms. Shivpriya Nanda, Independent DirectorStatutory Auditors and the Internal Auditors are thepermanent invitees at the committee meetings. Mr. SureshKumar Jain, Executive Director and Mr. Mahendra KumarGupta, Chief Financial Officer are also the permanent inviteesat the committee meetings. Mrs. Shalini Chawla, CompanySecretary was the Secretary of the Committee.For the Financial year 2016-17, the Audit committee met fourtimes i.e., on 2nd May, 2016, 27th July, 2016, 2nd November,2016 and 17th February, 2017.The recommendations given by the Audit Committee areconsidered and reviewed by the members of the Board of theCompany. However, there is no such case where the Boarddissented or did not accept the recommendation of the AuditCommittee.

A STATEMENT ON DEVELOPMENT AND IMPLEMENTATION OFRISK MANAGEMENT POLICYThe Strategy, Risk Review and Corporate Social ResponsibilityCommittee comprised of Mr. Karan Thapar (Chairman of theCommittee), Mr. Vijay Dilbagh Rai, Mr. Vijay Kishore Sharmaand Mr. Suresh Kumar Jain, Executive Director. However, theStrategy, Risk Review and Corporate Social ResponsibilityCommittee reconstituted w.e.f. 2nd May, 2017 and thefollowing are the members of the Committee:1. Mr. Karan Thapar, Chairman of the Committee2. Mr. Vijay Kishore Sharma, Independent Director3. Mr. Joy Kumar Jain, Independent Director4. Mr. Suresh Kumar Jain, Executive DirectorThe Company periodically reviews the Company’s risk profileunder ‘PESTLE’ nomenclature and management’s plans tomitigate /minimize the risks.

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The Committee evaluates the existing as well as anticipatedrisks and the strategy to mitigate those risks within a definedtime frame. The Company has in place a risk identificationand mitigation policy.The Company continues to face a risk in the long termsustainability of it’s Clay operations at Thiruvananthapuramdue to the continuing opposition to mining by a section ofthe population and the Government apathy. No new leaseshave been granted by the successive Governments in the lastdecade. Kaolin was reclassified as a minor mineral in theamendments carried out in the year 2014. Thus the entirecontrol of regulating the mining of Kaolin is vested with theGovernment of Kerala ever since. To mitigate this risk, theCompany is working on a plan to establish Clay beneficiationplant outside Kerala.The Committee does not foresee anyother material risks which may threaten the existence of theCompany.During the financial year 2016-17, the Strategy, Risk Reviewand CSR Committee met once i.e. on 17th February, 2017 underthe Chairmanship of Mr. Karan Thapar.

POLICY ON CORPORATE SOCIAL RESPONSIBILITYThe details about the Corporate Social Responsibility policydeveloped and implemented by the company and the variousinitiatives taken during the year and other particulars areenclosed in the prescribed form as Annexure – A.

COMPANY’S POLICY ON DIRECTORS APPOINTMENT ANDREMUNERATIONThe Nomination & Remuneration Committee comprised ofMr. Vijay Dilbagh Rai (Chairman of the Committee), Mr. KaranThapar and Mr. T. Balakrishnan. However, the Nomination &Remuneration Committee reconstituted w.e.f. 2nd May, 2017and the following are the members of the Committee:1. Mr. Vijay Kishore Sharma, Chairman of the Committee2. Mr. Karan Thapar3. Ms. Shivpriya NandaThe Committee met three times i.e., on 2nd May, 2016, 27th

July, 2016 and 2nd November, 2016.The Nomination & Remuneration Committee considering therequirement of the skill sets on the Board, integrity of thepersons having standing in their respective field/professionand who can effectively contribute to the Company’s businessand policy decisions, recommend the appointment to theBoard for approval.The Committee has approved a policy with respect to theappointment and remuneration of the Directors and SeniorManagement personnel. The objectives of this policy are:a) to create a transparent system of determining the

appropriate level of remuneration throughout all levels

of the Company;b) encourage people to perform to their highest level;c) allow the Company to compete in each relevant

employment market;d) provide consistency in remuneration throughout the

Company;e) align the performance of the business with the

performance of key individuals and teams within theCompany;

f) long term value creation; andg) to attract and retain the best professionals.The policy details, the types of remuneration to be offered bythe Company and factors to be considered by the Board,Nomination & Remuneration Committee and managementin determining the appropriate remuneration strategy.

SHARE TRANSFER/ SHAREHOLDERS’ GRIEVANCE COMMITTEEThe Company has constituted a “Share Transfer/Shareholders’Grievance Committee”which consist of the followingDirectors:-1. Mr. Vijay Dilbagh Rai, Chairman of the Committee2. Mr. Karan Thapar3. Mr. Joy Kumar Jain

STATUTORY AUDITORM/s Walker, Chandiok & Co. LLP, Chartered Accountants, theStatutory Auditors were appointed in the last Annual GeneralMeeting of the company held on 15-06-2015 for a period of 5years till the conclusion of the Annual General Meeting heldin the Calendar year 2020, subject to ratification by theshareholders at each Annual General Meeting.

INTERNAL AUDITORThe Company has appointed M/s T.R. Chadha & Co., CharteredAccountants, as the Internal Auditors of the Companypursuant to Section 138 read with Rule 13 of the Companies(Accounts) Rules, 2014, for one year to conduct the internalaudit for the financial year 2016-17.

COST AUDITORM/s A.R. Narayanan & Co., Cost Accountants, have beenappointed as Cost Auditors for the financial year 2016-17 toconduct the cost audit of the accounts maintained by thecompany. They have confirmed their eligibility forappointment under the provisions of Section 148 of theCompanies Act, 2013. The remuneration proposed to be paidto the Cost Auditors is submitted for ratification by theshareholders of the Company.

SECRETARIAL AUDITORM/s. CPA & Co. (formerly Manju Laur & Associates), Company

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Secretaries in practice have been appointed as SecretarialAuditors to conduct the Secretarial Audit for the financial years2016-17 of the company. They have confirmed their eligibilityfor appointment under the provisions of Section 204 of theCompanies Act, 2013.

SECRETARIAL AUDIT REPORTThe Secretarial Audit report in terms of Section 204 of theCompanies Act, 2013 read with the Companies (Appointment& Remuneration of Managerial personnel) Rules, 2014, hasbeen annexed to this report as Annexure - B. The Board notedthat there was no qualification or observation in theSecretarial Audit report which requires any explanation.M/s.CPA & Co. (formerly Manju Laur & Associates), CompanySecretaries in practice has conducted Secretarial Audit of theCompany for the financial year 2016-17.

EXTRACT OF ANNUAL RETURNPursuant to the provisions of section (3) of Section 92 of theCompanies Act, 2013 read with Rule 12 of the Companies(Management & Administration) Rules, 2014, an extract ofthe annual return of the Company for the year ended 31st

March, 2017 has been given in the prescribed Form MGT-9 asAnnexure- C.

DIRECTOR’S RESPONSIBILITY STATEMENTPursuant to section 134 (3) (c) and (5) of the Companies Act,2013, with respect to Directors’ Responsibility Statement, itis hereby confirmed that:a) the Company has followed the applicable accounting

standards in the preparation of the annual accounts forthe year ended 31-03-2017 and there is no materialdeviation from the previous year.

b) the Directors have selected such accounting policies andapplied them consistently and made judgments andestimates that are reasonable and prudent so as to givea true and fair view of the state of affairs of the companyas on 31st March, 2017 and of the profit for the year ended31st March, 2017.

c) the Directors have taken proper and sufficient care forthe maintenance of adequate accounting records inaccordance with the provisions of the Companies Act,2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularitiesand;

d) the Directors have prepared the annual accounts of thecompany on a going concern basis.

e) the Directors have devised proper system to ensurecompliance with the provisions of all applicable laws andthat such systems were adequate and operatingeffectively.

f) the Directors have laid proper internal financial controland that such financial control are adequate and areoperating effectively.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTSUnder section 186 of the Companies Act, 2013 the companyhas neither given any loan, guarantee nor provided anysecurity in connection with a loan, directly or indirectly, toany person or other body corporate. The company has alsonot made any investments by way of subscription, purchaseor otherwise, in the securities of any other body corporateduring the financial year ended 31st March, 2017.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITHRELATED PARTIESThe details of the related party transactions, as perrequirement of Accounting Standard, 18 are disclosed in notesto the financial statements of the company for the financialyear 2016-17. All the directors have disclosed their interest inform MBP-1 pursuant to section 184 of the Companies Act,2013 and as & when any changes in their interest take place,such changes are placed before the Board at its meetings.None of the transactions with any of the related parties wasin conflict with the interest of the company. A statement inthe prescribed Form AOC-2 is annexed to this report asAnnexure - D.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,FOREIGN EXCHANGE EARNINGS AND OUTGOAs required under Section 134(3)(m) read with Rule 8(3) ofthe Companies (Accounts) Rules, 2014, the details ofconservation of energy, technology absorption, foreignexchange earnings and outgo are as follows :-

(A) Conservation of energy(i) Steps taken or impact on conservation of energy

are as under :a) Replacement of old equipment and motors with

low energy efficient equipment and motors.b) Automation of processes wherever possible and

modification of process which helps in energysavings in addition to processing costs.

c) Insulation to get better energy management.d) Optimize the voltage level in lighting circuits and

replacement of Lamps to LED lights.e) Regular usage of biogas generated in ETP

digesters as fuel in the packaged boiler anddrying of Gluten.

f) Installation of Waste Heat Recovery System atclay manufacturing locations.

g) Energy audit is being conducted at both the clay

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manufacturing plants and corrective actions arebeing taken to conserve energy.

h) Automation of fuel feeding system to control theboiler operating pressure and pressure controlvalves are being installed at appropriate pointsto rationalize steam consumption.

(ii) Steps taken by the company for utilizing alternatesources of energy:The Company is using Bio-mass (Rice Husk) at itsplant at Yamunanagar.

(iii) Capital investment on energy conservationequipmentDuring the current financial year, the Company hasnot incurred any major capital expenditure on theenergy conservation equipment except maintenancecapex and shifting of boiler from one location toanother for improving operational efficiencies.

(B) Technology absorptionThe Company has not imported any technology duringthe last three years. Hence, the particulars with respectto efforts made towards technology absorption andbenefits derived etc. are not applicable to the Company.

(C) Research & Development activitiesYour company lays special emphasis on Research &Development activities with an objective to develop newproduct line for the growth of the Company. TheCompany’s commitment and strong research orientationhas played in the past a stellar role in new productdevelopment, application support to the customers aswell as technical support to plant operations.Expenditure incurred on Research & Development are asunder:-

(`̀̀̀̀)

31st March, 31st March,2017 2016

a) Capital 75,79,897 70,16,353

b) Recurring 1,51,78,012 2,22,86,390

c) Total 2,27,57,909 2,93,02,743

d) Total R&D Expenditure 0.47 0.63as a percentage oftotal turnover

(D) Foreign Exchange earnings and outgoThe company has recorded export earnings of ` 50.23Crores, import payments of ` 13.70 Crores and expensesin foreign exchange of ̀ 1.08 Crore, details of which have

been incorporated in the Notes to Accounts No.35 to 37.

VIGIL MECHANISM POLICYThe company has a “Vigil Mechanism Policy” to facilitate theDirectors and employees at all levels, to voice their concernsor observations to the Chairman of Audit Committee. Thepolicy provide a framework to promote responsible and securewhistle blowing.The Company has provided a dedicated email ID which canbe accessed only by the Chairman of the Audit Committee.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMANAT WORKPLACE (PREVENTION, PROHIBITION ANDREDRESSAL) ACT, 2013The Company has put in place an Anti-Sexual Harassmentmechanism in line with the requirements of the SexualHarassment of Women at the Workplace (Prevention,Prohibition & Redressal) Act, 2013. Internal ComplaintsCommittees have been set up to redress complaints receivedregarding sexual harassment. All employees (Permanent,Contractual, Temporary, Trainees) are covered under thispolicy. The Company has not received any complaint of sexualharassment during the year 2016-17.

HUMAN RESOURCESYour Company has successfully aligned human capital withbusiness and organizational objectives. The emphasis has beenon team work, skill development and development ofleadership and functional capabilities of the employees.

INDUSTRIAL RELATIONSThe Board of Directors places on record the active, dedicatedand valuable contribution made by employees of the Companyat all levels in achieving the results in the operations of theCompany. The Industrial relations remained cordial at all unitsof the Company.

ACKNOWLEDGEMENTThe Board of Directors places on record their appreciationfor the continued support and confidence received from Banksviz. Axis Bank Ltd., HDFC Bank Ltd., ICICI Bank Ltd., IndusIndBank Ltd. and Central and State Governments and otherGovernment authorities.The Directors are also thankful to all other stakeholders fortheir valuable sustained support to the Company.

For and on behalf of the Board

Sd/-Karan Thapar

Place : Gurugram ChairmanDate : 02-05-2017 DIN : 00004264

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LIST OF ANNEXURES

Annexure A : CSR Activities

Annexure B : Secretarial Audit Report (Form No. MR-3)

Annexure C : Extract of Annual Return (Form No. MGT-9)

Annexure D : Contract/arrangements entered into by theCompany with Related Parties (Form No. AOC-2)

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Annexure– A(Report on Corporate Social Responsibility activities)

1. A brief outline of the Company’s CSR Policy, including overview of projects or programmes proposed to be undertakenand a reference to the web-link to the CSR Policy and projects and programmes:The Committee has approved a Corporate Social Responsibility policy and the major guiding principle to attain the CSRobjectives in a professional and integrated manner, are as under:-• Undertake proactive engagement with stakeholders to actively contribute to the socio-economic development of

the periphery/community in which it operates.• Using environment friendly and safe processes in production.• Create a positive footprint within the society by creating inclusive and enabling infrastructure/environment for livable

communities.• Ensure environmental sustainability by adopting best ecological practices and encouraging conservation/judicious

use of natural resources.• Work towards mainstreaming the marginalized segments of the society by striving towards providing equal

opportunities and making meaningful difference in their lives.• Focus on educating the girl child and the underprivileged by providing appropriate infrastructure, and groom them

as future value creators.• Assist in skill development by providing direction and technical expertise to the vulnerable thereby empowering

them towards a dignified life.• Emphasize on providing basic nutrition/health care facilities with special focus on establishing health centers for the

mother and child as well as the elderly.• Facilitate water conservation by reducing water consumption at the plants and taking up rain water harvesting

projects.The CSR projects are headed by the Executive Director of the Company and the progress in implementation of the projectsare presented before the CSR Committee and the Board from time to time.

During the year 2016-17, the Company had taken the following activities:-1. Rain water harvesting and supply of potable water in the nearby villages free of cost.2. Painter skill training which was discontinued due to poor response.3. Special intervention coaching for students of Class VI - VIII.4. Self-employment for women.5. Other Social welfare.

2. The Composition of the CSR Committee:The CSR committee consists of Mr. Karan Thapar, Chairman, Mr. Vijay Dilbagh Rai, Mr. Vijay Kishore Sharma, IndependentDirectors and Mr. Suresh Kumar Jain, Executive Director of the Company. Mr. Karan Thapar is the Chairman of theCommittee.

3. Average net profits of the Company for the last three financial years:` 3,582.78 lacs.

4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above)` 71.65 lacs

5. Details of CSR spent during the financial year.a) Total amount spent for the financial year: : ` 54.58 lacsb) Amount unspent, if any; : ` 17.07 lacs

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c) Manner in which the amount spent during the financial year is detailed below:-

1 2 3 4 5 6 7 8

S. CSR Sector in Projects or programs Amount Amount spent on Cumulative AmountNo. project or which the (1) Local area or other outlay the projects or expenditure spent : Direct

activity Project is (2) Specify the State (budget) programs Sub- upto to the or throughidentified covered and district where project or heads: (1) Direct reporting implementing

projects or programs programs expenditure on period agency*was undertaken wise (`̀̀̀̀) projects or programs

(2) Overheads (`̀̀̀̀)Revenue Expenditure

1 Rain water harvest/ Social Thiruvananthapuram 50 Lacs 51,52,445 Directwater to villagers welfare

2 Coaching for Class VI Education Thiruvananthapuram 3 Lacs 0 Direct& Class VII students

3 Self-employment Employment Thiruvananthapuram 2 Lacs 76,250 Directfor women

4 Painter skill Education Thiruvananthapuram 5 Lacs 1,41,000 Directtraining training

5 Others Social Welfare Thiruvananthapuram 10 Lacs 88,440 DirectTOTAL 70 Lacs 54,58,135

Capital Expenditure5 Water Filtration Unit Nil Nil Direct

* Give details of implementing agency : NA6. During the year, the budget outlay of ` 70 lacs has been approved by the Board of Directors. As per the programme, the

Company has started implementation of CSR activities. However, during the year, it was considered pragmatic to spend` 54.58 lacs. The Company has a stringent process for selecting CSR Projects. Only these projects that yield maximumimpacts are selected and supported. During the year the company has not been able to find right projects to spent wiselyand effectively on CSR. The company is actively looking to identify additional projects to increase its CSR Spending.

7. The implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the company.

Sd/-KARAN THAPAR

ChairmanDIN: 00004264

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Annexure – BForm No. MR-3

SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 2017[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and

Remuneration Personnel) Rules, 2014]To,The Members,EICL LIMITEDWe have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to goodcorporate practices by EICL LIMITED (hereinafter called the company). Secretarial Audit was conducted in a manner thatprovided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.Based on our verification of the EICL LIMITED books, papers, minute books, forms and returns filed and other records maintainedby the company and also the information provided by the Company, its officers, agents and authorized representatives duringthe conduct of Secretarial Audit, We hereby report that in our opinion, the company has, during the audit period covering thefinancial year ended on 31st March, 2017 and has complied with the statutory provisions listed hereunder and also that theCompany has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to thereporting made hereinafter:We have examined the books, papers, minute books, forms and returns filed and other records maintained by EICL LIMITED(“the Company”) for the financial year ended on 31st March, 2017, to the extend applicable to the company according to theprovisions of:

(i) The Companies Act, 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign DirectInvestment, Overseas Direct Investment and External Commercial Borrowings;

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBIAct’):-(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)

Guidelines, 1999;(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993

regarding the Companies Act and dealing with client;(g) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;

All the aforesaid sub-clauses are not applicable to the company(h) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and

(vi) Other Laws as applicable to the Industry:(a) Food Safety and Standards Act, 2006(b) Mines Act, 1952

We have also examined compliance with the applicable clauses of the following:(i) Secretarial Standards issued by The Institute of Company Secretaries of India.

BOARD’S REPORT

13


(ii) The Listing Agreements entered into by the Company with the Stock Exchange(s);The company is not listed on any stock exchange.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines,Standards, etc. mentioned above subject to the following observations:No specific non compliances / observations / audit qualification, reservation or adverse remarks were observed.We further report that The Board of Directors of the Company is duly constituted with proper balance of Executive Directors,Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took placeduring the period under review were carried out in compliance with the provisions of the Act.Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent atleast seven days in advance, and a system exists for seeking and obtaining further information and clarifications on theagenda items before the meeting and for meaningful participation at the meeting.Majority decision is carried through while the dissenting members’ views are captured and recorded as part of the minutes.We further report that there are adequate systems and processes in the company commensurate with the size and operationsof the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.No specific non compliances / observations / audit qualification, reservation or adverse remarks were observed.

We further report that during the audit period the company has:(a) The Company has during the year Redeemed Preference shares worth ̀ 20,00,00,000 to DBH International Private Limited

and has further increased the tenure of ` 10,00,00,000 Preference Shares which were due to be Redeemed on04th September, 2016 for a further period of 5 years.

(b) During the audit period the company has been sanctioned term loan of ` 15,00,00,000 from a Bank, and replaced its oneof the banker for working capital facilities to the extent of ` 25,00,00,000.

(c) The Audit Committee and the Board of Directors have approved all the Related Party Transaction. In view of the Board, allthe transactions with Related Parties are at Arm’s Length Price.

Sd/-Prashanth Kumar Gupta

PartnerCPA & Co.

Company Secretary in PracticeACS. 37201

C.P.No.:13958

BOARD’S REPORT

14


Annexure – CForm No. MGT-9

EXTRACT OF ANNUAL RETURNAs on the financial year ended on 31st March, 2017

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies(Management and Administration) Rules,2014]

I. REGISTRATION AND OTHER DETAILS:

i) CIN: U26939KL1963PLC002039

ii) Registration Date: 18th November, 1963

iii) Name of the Company: EICL Limited

iv) Category / Sub-Category of the Company: Public Limited /Limited by shares

v) Address of the registered office and contact details: TC-79/4, Veli, Thiruvananthapuram - 695021 (Kerala)Phone: 0471-4095111, Fax: 0471-2742233Web: www.eicl.in, Email: [email protected]

vi) Whether listed company: No

vii) Name, Address & Contact details of Registrar and RCMC Share Registry Pvt. Ltd.,Transfer Agent, if any: B-25/1, First Floor, Okhla Industrial Area,

Phase-II, New Delhi - 110020Phone: 011-26387320, Fax: 011-26387322,Web: www.rcmcdelhi.comEmail: [email protected]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANYAll the business activities contributing 10% or more of the total turnover of the company shall be stated:-

Sl. Name and Description of NIC Code of the % to total turnoverNo. Main products Product / service of the company

1 Mining of clay 08108 61%

2 Manufacture of starch 10621 39%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES-

Sl. Name and Address of the Company CIN Holding/ % of ApplicableNo. Subsidiary/ Shares Section

Associates Held

1 D B H International Pvt. Ltd. U74899DL1940PTC057209 Holding 64.96 2(46)713, Ansals Vikasdeep Building,Laxmi Nagar District Centre,Laxmi Nagar, Delhi – 110 092

BOARD’S REPORT

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IV. SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)i) Category-wise Share Holding

Sl. Category of No. of Shares held at the No. of Shares held at the % changeNo. Shareholders beginning of the Year end of the Year during

Demat Physical Total % of Demat Physical Total % of theTotal Total year

Shares SharesA. Promoters(1) Indiana) Individual/ HUF 11238 0 11238 0.02 0 0 0 0 0.02b) Central Govt 0 0 0 0 0 0 0 0 0c) State Govt (s) 0 0 0 0 0 0 0 0 0d) Bodies Corp. 46034701 0 46034701 91.56 46053825 3746 46057571 91.61 0.05e) Banks /FI 0 0 0 0 0 0 0 0 0f) Any Other…. 0 0 0 0 0 0 0 0 0

Sub-total (A)(1):- 46045939 0 46045939 91.58 46053825 3746 46057571 91.61 0.03(2) Foreigna) NRIs -Individuals 0 0 0 0 0 0 0 0 0b) Other – Individuals 0 0 0 0 0 0 0 0 0c) Bodies Corp. 0 0 0 0 0 0 0 0 0d) Banks/ FI 0 0 0 0 0 0 0 0 0e) Any Other…. 0 0 0 0 0 0 0 0 0

Sub-total (A)(2):- 0 0 0 0 0 0 0 0 0Total shareholding of Promoter : 46045939 0 46045939 91.58 46053825 3746 46057571 91.61 0.03(A)=(A)(1)+(A)(2)

B. Public Shareholding1. Institutionsa) Mutual Funds 0 0 0 0 0 0 0 0 0b) Banks/ FI 0 0 0 0 0 0 0 0 0c) Central Govt 0 0 0 0 0 0 0 0 0d) State Govt(s) 0 0 0 0 0 0 0 0 0e) Venture Capital Funds 0 0 0 0 0 0 0 0 0f) Insurance Companies 0 0 0 0 0 0 0 0 0g) FIIs 0 0 0 0 0 0 0 0 0h) Foreign Venture Capital Funds 0 0 0 0 0 0 0 0 0i) Others (specify) 0 0 0 0 0 0 0 0 0

Sub-total (B)(1):- 0 0 0 0 0 0 0 0 02. Non- Institutionsa) Bodies Corp.i) Indian 197674 607 198281 0.39 189714 607 190321 0.38 0.01ii) Overseasb) Indivisualsi) Individual shareholders holding 3013650 77461 3091111 6.15 3005579 77573 3083152 6.13 0.02

nominal share capital upto ` 1 lakhii) Individual shareholders holding nominal 905600 0 905600 1.80 905600 0 905600 1.80 0.00

share capital in excess of ` 1 lakh

BOARD’S REPORT

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Sl. Category of No. of Shares held at the No. of Shares held at the % changeNo. Shareholders beginning of the Year end of the Year during

Demat Physical Total % of Demat Physical Total % of theTotal Total year

Shares Shares

c) Others:

i) Clearing Member 10424 0 10424 0.02 11057 0 11057 0.02 0.00

ii) Non residents 21835 2553 24388 0.05 25489 2553 28042 0.06 0.01

iii) Trust 270 0 270 0.00 270 0 270 0.00 0.00

Sub-total (B)(2):- 4149453 80621 4230074 8.41 4137709 80733 4218442 8.39 0.02

Total Public Shareholding 4149453 80621 4230074 8.41 4137709 80733 4218442 8.39(B)=(B)(1)+ (B)(2):

C. Shares held by Custodian for 0 0 0 0 0 0 0 0GDRs & ADRs

Grand Total (A+B+C) 50195392 80621 50276013 100 50191534 84479 50276013 100

(ii) Shareholding of PromotersSl. Shareholder’s Name Shareholding at the Shareholding at the

No. beginning of the year end of the year

No. of % of total % of Shares No. of % of total % of SharesShares Shares Pledged/ Shares Shares Pledged/

of the encumbered of the encumberedcompany to total shares company to total shares

1 DBH International Private Limited 32635326 64.91 0 32658196 64.96 0 0.052 Karun Carpets Private Limited 13399375 26.65 0 13399375 26.65 0 03 Sulochana Thapar 11238 0.02 0 0 0 0 0.02

Total 46045939 91.58 0 46057571 91.61 0 0.03

(iii) Change in Promoters’ Shareholding (please specify, if there is no change)

Sl. Shareholder’s Name Shareholding Cumulative ShareholdingNo. during the year

No. of % of total shares No. of % of total sharesshares of the company shares of the company

At the beginning of the year Date wise increase / decreaseAt the end of the year in Shareholding

1. DBH International 32635326 64.91 DBH International Pvt. Ltd. Promoter 32658196 64.96Private Limited 32658196 64.96 of the Company has Acquired the

equity shares of the company1) 01-04-2016 : 1122) 26-04-2016 : 4373) 07-05-2016 : 1124) 26-05-2016 : 15005) 02-06-2016 : 12276) 19-07-2016 : 4007) 20-07-2016 : 568) 08-08-2016 : 11259) 25-08-2016 : 20010) 10-09-2016 : 5611) 17-09-2016 : 84312) 19-09-2016 : 500

% changein Share-

holdingduring

the year

BOARD’S REPORT

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Sl. Shareholder’s Name Shareholding Cumulative ShareholdingNo. during the year

No. of % of total shares No. of % of total sharesshares of the company shares of the company

At the beginning of the year Date wise increase / decreaseAt the end of the year in Shareholding

13) 28-09-2016 : 57414) 05-10-2016 : 84315) 07-10-2016 : 33716) 10-10-2016 : 102317) 19-10-2016 : 11218) 21-10-2016 : 112519) 01-11-2016 : 70020) 10-01-2017 : 118721) 12-01-2017 : 423022) 20-01-2017 : 20023) 15-02-2017 : 200024) 01-03-2017 : 22525) 29-03-2017 : 3746Total purchase : 22870

2. Karun Carpets 13399375 26.65 No Change 13399375 26.65Pvt.Ltd. 13399375 26.65

3. Sulochana Thapar 11238 0.02 Transferred 0 0.020

Total At the end of the year 46045939 91.58 46057571 91.61

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

Sl. For Each of the Top 10 Shareholders Shareholding at the Cumulative ShareholdingNo. beginning of the year during the year

No. of % of total No. of % of totalShares Shares Shares Shares

of the of thecompany company

At the beginning of the year 1073515 2.12

1. Hitesh Ramji Javeri 500100 0.99 500100 0.99

2. Radhabai Ramji Javeri 105100 0.21 105100 0.21

3. Ami Hitesh Javeri 100200 0.20 100200 0.20

4. Mitali Hitesh Javeri 100100 0.20 100100 0.20

5. Harsha Hitesh Javeri 100100 0.20 100100 0.20

6. Siddhivinayak Dealcom Pvt. Ltd. 56250 0.11 56250 0.11

7. Basons Investments Pvt. Ltd. 32144 0.06 32144 0.06

8. Alkaben Vasantbhai Vora 30125 0.06 30125 0.06

9. S.B. Builders Pvt. Ltd. 28125 0.06 28125 0.06

10. Rina S Kamdar 21271 0.04 21271 0.04At the End of the year 1073515 2.12(or on the date of separation,if separated during the year)

BOARD’S REPORT

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(v) Shareholding of Directors and Key Managerial Personnel:

Sl. For Each of the Directors and KMP Shareholding at the Cumulative ShareholdingNo. beginning of the year during the year

No. of % of total No. of % of totalShares Shares Shares Shares

of the of thecompany company

At the beginning of the year 12836 0.02 12836 0.02

1) Rai Vijay Dilbagh 12836 0.02 12836 0.02

At the End of the year 12836 0.02

V. INDEBTEDNESSIndebtedness of the Company including interest outstanding / accrued but not due for payment (`̀̀̀̀)

Secured Loans Unsecured Deposits Totalexcluding deposits Loans Indebtedness

Indebtedness at the beginning of the financial year

i) Principal Amount 84,22,47,179 - 84,22,47,179 84,22,47,179

ii) Interest due but not paid - - - -

iii) Interest accrued but not due - - - -

Total (i+ii+iii) 84,22,47,179 84,22,47,179 84,22,47,179

Change in Indebtedness during the financial year

• Addition 13,51,60,961 - 13,51,60,961 13,51,60,961

• Reduction (11,20,45,407) - (11,20,45,407) (11,20,45,407)

Net Change 2,31,15,554 2,31,15,554 2,31,15,554

Indebtedness at the end of the financial year

i) Principal amount 86,53,62,733 - 86,53,62,733 86,53,62,733

ii) Interest due but not paid - - - -

iii) Interest accrued but not due - - - -

Total (i+ii+iii) 86,53,62,733 - 86,53,62,733 86,53,62,733

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNELA. Remuneration to Managing Director, Whole-time Directors and / or Manager:

Name of MD/WTD/ ManagerSr. Particulars of Remuneration Mr. Suresh - - - Total

No. Kumar Jain Amount (`̀̀̀̀)(Executive Director)

1. Gross salary

(a) Salary as per provisions contained in 97,43,804 97,43,804section17(1) of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) 0 0Income-tax Act, 1961

(c) Profits in lieu of salary under section17(3) Income- tax Act, 1961

BOARD’S REPORT

19


Name of MD/WTD/ ManagerSr. Particulars of Remuneration Mr. Suresh - - - Total

No. Kumar Jain Amount (`̀̀̀̀)(Executive Director)

2. Stock Option - -

3. Sweat Equity - -

4. Commission

- as % of profit

- Others, specify… - -

5. Others, please specify - -

Total (A) 97,43,804 97,43,804

Ceiling as per the Act 2,21,48,723

B. Remuneration to other directors:

Sl. Particulars of Remuneration Name of Directors TotalNo. Amount (`̀̀̀̀)

Vijay Dilbagh V.K. Shivpriya T. Balakrishnan Joy KumarRai Sharma Nanda Jain

1. Independent Directors

• Fee for attending board/ 3,35,000 3,60,000 2,30,000 1,90,000 2,85,000 14,00,000committee meetings

• Commission 4,42,975 3,54,380 3,54,380 3,54,380 3,54,380 18,60,495

• Others, please specify

Total (1) 7,77,975 7,14,380 5,84,380 5,44,380 6,39,380 32,60,495

2. Other Non-Executive Directors Karan Thapar

• Fee for attending board/ 2,95,000 2,95,000committee meetings

• Commission 25,69,250 25,69,250

• Others, please specify

Total (2) 28,64,250 28,64,250

Total (B)=(1+2) 61,24,745

Total Managerial Remuneration 1,58,68,549

Overall Ceiling as per the Act 2,65,78,468

BOARD’S REPORT

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C. Remuneration to Key Managerial Personnel other than MD / MANAGER / WTD

Sr. Particulars of Remuneration Key Managerial PersonnelNo. P.S. Saini Shalini Chawla, M.K. Gupta, Total (`̀̀̀̀)

Upto April Company Secretary CFO2016 (w.e.f. 2-11-2016)

1. Gross salary

(a) Salary as per provisions contained in 2,78,415 9,04,142 64,31,878 76,14,435section 17(1) of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) 0 0 21,600 21,600Income-tax Act, 1961

(c) Profits in lieu of salary undersection17(3) Income-tax Act, 1961

2. Stock Option - - - -

3. Sweat Equity - - - -

4. Commission - - - -- as % of profit- others, specify…

5. Others, please specify - - - -

Total 2,78,415 9,04,142 64,53,478 76,36,035

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of Brief Details of penalty/ Authority Appeal made,Companies description punishment/Compounding [RD/NCLT/ if any give

Act fees imposed Court] details

A. COMPANY

Penalty NIL NIL NIL NIL NIL

Punishment NIL NIL NIL NIL NIL

Compounding NIL NIL NIL NIL NIL

B. DIRECTORS




C. OTHER OFFICERS IN DEFAULT




BOARD’S REPORT

21


Annexure - DForm No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2)of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred toin sub-section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions under third provisothereto

1. Details of contracts or arrangements or transactions not at arm’s length basis

(a) Name(s) of the related party and nature of relationshipN.A.

(b) Nature of contracts/arrangements/transactionsN.A.

(c) Duration of the contracts/arrangements/transactionsN.A.

(d) Salient terms of the contracts or arrangements or transactions including the value, if anyN.A.

(e) Justification for entering into such contracts or arrangements or transactionsN.A.

(f) Date(s) of approval by the BoardN.A.

(g) Amount paid as advances, if any:Nil.

(h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188N.A.

2. (a) Details of material contracts or arrangement or transactions at arm’s length basis

i. Bharat Starch Products Pvt. Ltd.

ii. Premium Transmission Ltd.

iii. Aravali Sports & Cultural Foundation

iv. DBH Consulting Ltd.

(b) Nature of contracts/arrangements/transactions

i. Bharat Starch Products Pvt. Ltd. - Rent paid

ii. Premium Transmission Ltd. - Purchase of Store supply/sharing of corporate exp.

iii. Aravali Sports & Cultural Foundation - Donation paid

iv. DBH Consulting Ltd. - Advisory and Consultancy services

BOARD’S REPORT

22


(c) Duration of the contracts/arrangements/transactionsValue

i. Bharat Starch Products Ltd. - 1-04-2016 to 31-03-2017 ` 20,68,500/-

ii. Premium Transmission Ltd.

- Purchase of spare parts - 1-04-2016 to 31-03-2017 ` 40,605/-

- Service charges (common exp.) - 1-04-2016 to 31-03-2017 ` 96,48,937/-

iii. Aravali Sports & Cultural Foundation - 1-04-2016 to 31-03-2017 ` 10,00,000/-

iv. DBH Consulting Ltd. - 1-04-2016 to 31-03-2017 ` 20,59,666/-

(d) Salient terms of the contracts or arrangements or transactions including the value, if any:The above transaction are in the ordinary course of business and at an arm’s length basis.

(e) Date(s) of approval by the Board, if any:27-07-2016, 02-11-2016, 17-02-2017 & 02-05-2017

(f) Amount paid as advances, if any:Nil

Sd/-KARAN THAPAR

ChairmanDIN : 0004264

BOARD’S REPORT

23


INDEPENDENT AUDITOR’S REPORTTo the Members of EICL Limited

Report on theFinancial Statements1. We have audited the accompanying financial statements

of EICL Limited (‘the Company’), which comprise theBalance Sheet as at March 31, 2017, the Statement ofProfit and Loss, the Cash Flow Statementfor the year thenended, and a summary of the significant accountingpolicies and other explanatory information.

Management’s Responsibility for the FinancialStatements

2. The Company’s Board of Directors is responsible for thematters stated in Section 134(5) of the Companies Act,2013 (‘the Act’) with respect to the preparation of thesefinancial statements that give a true and fair view of thefinancial position, financial performance and cash flowsof the Company in accordance with the accountingprinciples generally accepted in India, includingtheAccounting Standards prescribedunder Section 133 of theAct, read with Rule 7 of the Companies(Accounts) Rules,2014 (as amended). This responsibility also includesmaintenance of adequate accounting records inaccordance with the provisions of the Act for safeguardingthe assets of the Company and forpreventing anddetecting frauds and other irregularities; selection andapplication of appropriate accounting policies; makingjudgments and estimates that are reasonable andprudent; and design, implementation and maintenanceof adequate internal financial controls, that wereoperating effectively for ensuring the accuracy andcompleteness of the accounting records, relevant to thepreparation and presentation of the financial statementsthat give a true and fair view and are free from materialmisstatement, whether due to fraud or error.

Auditor’s Responsibility3. Our responsibility is to express an opinion on these

financial statements based on our audit.

4. We have taken into account the provisions of the Act,the accounting and auditing standards and matters whichare required to be included in the audit report under theprovisions of the Act and theRules made thereunder.

5. We conducted our audit in accordance with the Standardson Auditingspecified under Section 143(10) of the Act.Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtainreasonable assurance about whether these financialstatements are free from material misstatement.

6. An audit involves performing procedures to obtain auditevidence about the amounts and the disclosures in thefinancial statements. The procedures selected depend onthe auditor’s judgment, including the assessment of therisks of material misstatement of the financial statements,whether due to fraud or error. In making those riskassessments, the auditor considers internal financialcontrols relevant to the Company’s preparation of thefinancial statements that give a true and fair view in orderto design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating theappropriateness of the accounting policies used and thereasonableness of the accounting estimates made by theCompany’s Directors, as well as evaluating the overallpresentation of the financial statements.

7. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for ourauditopinion on these financial statements.

Opinion8. In our opinion and to the best of our information and

according to the explanations given to us, the aforesaidfinancial statements give the information required by theAct in the manner so required and give a true and fairview in conformity with the accounting principlesgenerally accepted in India, of the state of affairs of theCompany as at March 31, 2017, and its profit and its cashflows for the year ended on that date.

Report on Other Legal and Regulatory Requirements9. As required by the Companies (Auditor’s Report) Order,

2016 (‘the Order’) issued by the Central Government ofIndia in terms of Section 143(11) of the Act, we give inthe Annexure A a statement on the matters specified inparagraphs 3 and 4 of the Order.

10. Further to our comments in Annexure A, as required bySection143(3) of the Act, we report that:a. we have sought and obtained all the information and

explanations which to the best of our knowledge andbelief were necessary for the purpose of our audit;

b. in our opinion, proper books of account as requiredby law have been kept by the Company so far as itappears from our examination of those books;

c. the financial statements dealt with by this report arein agreement with the books of account;

d. in our opinion, the aforesaid financial statementscomply with the Accounting Standards prescribed

AUDITOR’S REPORT

24


under Section 133 of the Act, read with Rule 7 of theCompanies (Accounts) Rules, 2014 (as amended);

e. on the basis of the written representations receivedfrom the directors and taken on record by the Boardof Directors, none of the directors is disqualified ason March 31, 2017 from being appointed as adirector in terms of Section164(2) of the Act;

f. we have also audited the internal financial controlsover financial reporting (IFCoFR) of the Company ason March 31, 2017 in conjunction with our audit ofthe financial statements of the Company for the yearended on that date and our report dated May 02, 2017as per Annexure B expressed an unmodified opinion;

g. with respect to the other matters to be included inthe Auditor’s Report in accordance with Rule 11 ofthe Companies (Audit and Auditors) Rules, 2014 (asamended), in our opinion and to the best of ourinformation and according to the explanations givento us:i. the Company,as detailed in Note 40.3 to the

financial statements, has disclosed the impactof pending litigations on its financialposition;

ii. the Company did not have any long-termcontracts including derivative contracts forwhich there were any material foreseeablelosses;

iii. there has been no delay in transferring amounts,required to be transferred, to the InvestorEducation and Protection Fund by the Company;

iv. the Company, as detailed in Note 43 tothefinancial statements, has made requisitedisclosures in these financial statements as toholdings as well as dealings in Specified BankNotes during the period from November 8, 2016to December 30, 2016. Based on the auditprocedures performed and taking intoconsideration the information and explanationsgiven to us, in our opinion, these are inaccordance with the books of accountmaintained by the Company.

For Walker Chandiok & Co LLPChartered AccountantsFirm’s Registration No.: 001076N/N500013

Sd/-per Ashish GuptaPartnerMembership No.: 504662

Place : GurugramDate : May 02, 2017

Annexure A to the Independent Auditor’s Report of evendate to the members of EICL Limited, on the financialstatements for the year ended March 31, 2017Annexure ABased on the audit procedures performed for the purpose ofreporting a true and fair view on the financial statements ofthe Company and taking into consideration the informationand explanations given to us and the books of account andother records examined by us in the normal course of audit,and to the best of our knowledge and belief, we report that:i) (a) The Company has maintained proper records

showing full particulars, including quantitative detailsand situation of fixed assets.

(b) The Company has a regular program of physicalverification of its fixed assets under which fixed assetsare verified in a phased manner over a period of 3years, which, in our opinion, is reasonable havingregard to the size of the Company and the nature ofits assets. In accordance with this program, certainfixed assets were verified during the year and nomaterial discrepancies were noticed on suchverification.

(c) The title deeds of all the immovable properties(which are included under the head ‘fixed assets’)are held in the name of the Company except for thefollowing properties:

Nature of Total Whether Gross block Net block Remarksproperty Number leasehold as on March as on March

of Cases /freehold 31, 2017 31, 2017(`̀̀̀̀) (`̀̀̀̀)

Unit- Shimoga 1 Freehold 6,97,10,732 6,97,10,732 The Company has acquired landunder Sale cum lease agreement,registration in the name of theCompany is pending

Unit - Veli 1 Leasehold 15,040 15,040 Lease deed is pending for renewal

AUDITOR’S REPORT

25


ii) In our opinion, the management has conductedphysical verification of inventory at reasonableintervals during the year and no materialdiscrepancies between physical inventory and bookrecords were noticed on physical verification.

iii) The Company has not granted any loan, secured orunsecured to companies, firms, Limited LiabilityPartnerships (LLPs) or other parties covered in theregister maintained under Section 189 of the Act.Accordingly, the provisions of clauses 3(iii)(a), 3(iii)(b)and 3(iii)(c) of the Order are not applicable.

iv) In our opinion, the Company has not entered intoany transaction covered under Sections 185 and 186of the Act. Accordingly, the provisions of clause 3(iv)of the Order are not applicable.

v) In our opinion, the Company has not accepted anydeposits within the meaning of Sections 73 to 76 ofthe Act and the Companies (Acceptance of Deposits)Rules, 2014 (as amended). Accordingly, the provisionsof clause 3(v) of the Order are not applicable.

vi) We have broadly reviewed the books of accountmaintained by the Company pursuant to the Rules

made by the Central Government for themaintenance of cost records under sub-section (1)of Section 148 of the Act in respect of Company’sproducts and are of the opinion that, prima facie,the prescribed accounts and records have been madeand maintained. However, we have not made adetailed examination of the cost records with a viewto determine whether they are accurate or complete.

vii) (a) Undisputed statutory dues including provident fund,employees’ state insurance, income-tax, sales-tax,service tax, duty of customs, duty of excise, valueadded tax, cess and other material statutory dues,as applicable, have generally been regularlydeposited to the appropriate authorities, thoughthere has been a slight delay in a few cases. Further,no undisputed amounts payable in respect thereofwere outstanding at the year-end for a period ofmore than six months from the date they becamepayable.

(b) The dues outstanding in respect of income-tax, salestax, service tax, duty of customs, duty of excise andvalue added tax on account of any dispute, are asfollows:

Statement of Disputed DuesName of Nature of dues Amount Amount Period to Forum where disputethe statute (`̀̀̀̀) paid under which the is pending

Protest (`̀̀̀̀) amount relatesCentral Excise MODVAT claimed 10,73,69,735 12,41,379 Year Hon’ble Supreme Court of IndiaAct, 1944 on lubricant and 2000 to 2004 (Refer note 40.3 to the

transformer oil financial statements)Kerala Tax On Entry tax 1,51,33,588 1,51,33,588 Year 2002 to 2004 Hon’ble Supreme Court of IndiaEntry of Goods and (Refer note 40.3 to theinto the Local Year 2005 to 2007 financial statements)Area Act, 1994Central Excise Demand with respect 6,11,10,974 - Year Hon’ble Supreme Court of IndiaAct, 1944 to classification of 1997 to 2001 (Refer note 40.3 to the

maize starch financial statements)Haryana Local Entry tax 32,16,190 32,16,190 Year Hon’ble Supreme Court of IndiaArea Development 2001 and 2007 (Refer note 40.3 to theTax (LADT) financial statements)Act, 2000

AUDITOR’S REPORT

viii) The Company has not defaulted in repayment of loans orborrowings to any bank or financial institution orgovernment during the year. The Company did not haveany outstanding debentures during the year.

ix) The Company did not raise moneys by way of initial publicoffer or further public offer (including debt instruments).In our opinion, the term loans were applied for thepurposes for which the loans were obtained.

x) No fraud by the Company or on the Company by itsofficers or employees has been noticed or reported duringthe period covered by our audit.

xi) Managerial remuneration has been paid and providedby the Company in accordance with the requisiteapprovals mandated by the provisions of Section 197 ofthe Act read with Schedule V to the Act.

26


xii) In our opinion, the Company is not a Nidhi Company.Accordingly, provisions of clause 3(xii) of the Orderis notapplicable.

xiii) In our opinion all transactions with the related partiesare in compliance with Sections 177 and 188 of Act, whereapplicable, and the requisite details have been disclosedin the financial statements etc., as required by theapplicable accounting standards.

xiv) During the year, the Company has not made anypreferential allotment or private placement of shares orfully or partly convertible debentures.

xv) In our opinion, the Company has not entered into anynon-cash transactions with the directors or personsconnected with themcovered under Section 192 of theAct.

xvi) TheCompany is not required to be registered underSection 45-IA of the Reserve Bank of India Act, 1934.


Sd/-per Ashish GuptaPartnerMembership No.: 504662


Annexure BIndependent Auditor’s report on the Internal FinancialControls under Clause (i) of Sub-section 3 of Section 143 ofthe Companies Act, 2013 (“the Act”)

1. In conjunction with our audit of the financial statementsof EICL Limited (“the Company”) as of and for the yearended March 31, 2017, we have audited the internalfinancial controls over financial reporting (IFCoFR) of thecompany as of that date.

Management’s Responsibility for Internal FinancialControls

2. The Company’s Board of Directors is responsible forestablishing and maintaining internal financialcontrolsbased on internal control over financial reporting criteriaestablished by the Company considering the essentialcomponents of internal control stated in the GuidanceNote on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered

Accountants of India. These responsibilities include thedesign,implementation and maintenance of adequateinternal financial controls that were operating effectivelyfor ensuring the orderly and efficient conduct of thecompany’s business, including adherence to company’spolicies, the safeguarding of its assets, the prevention anddetection of frauds and errors, the accuracy andcompleteness of the accounting records, and the timelypreparation of reliable financial information, as requiredunder the Act.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on theCompany’s IFCoFR based on our audit. We conducted ouraudit in accordance with the Standards on Auditing,issued by the Institute of Chartered Accountants of India(ICAI) and deemed to be prescribed under section 143(10)of the Act, to the extent applicable to an audit of IFCoFR,and the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the “Guidance Note”)issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirementsand plan and perform the audit to obtain reasonableassurance about whether adequate IFCoFR wereestablished and maintained and if such controls operatedeffectively in all material respects.

4. Our audit involves performing procedures to obtain auditevidence about the adequacy of the IFCoFR and theiroperating effectiveness. Our audit of IFCoFR includedobtaining an understanding of IFCoFR, assessing the riskthat a material weakness exists, and testing andevaluating the design and operating effectiveness ofinternal control based on the assessed risk. Theprocedures selected depend on the auditor’s judgement,including the assessment of the risks of materialmisstatement of the financial statements, whether dueto fraud or error.

5. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our auditopinion on the Company’s IFCoFR.

Meaning of Internal Financial Controls over FinancialReporting

6. A company’s IFCoFR is a process designed to providereasonable assurance regarding the reliability of financialreporting and the preparation of financial statements forexternal purposes in accordance with generally acceptedaccounting principles. A company’s IFCoFR includes thosepolicies and procedures that (1) pertain to themaintenance of records that, in reasonable detail,accurately and fairly reflect the transactions and

AUDITOR’S REPORT

27


dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded asnecessary to permit preparation of financial statementsin accordance with generally accepted accountingprinciples, and that receipts and expenditures of thecompany are being made only in accordance withauthorisations of management and directors of thecompany; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorisedacquisition, use, or disposition of the company’s assetsthat could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls overFinancial Reporting

7. Because of the inherent limitations of IFCoFR, includingthe possibility of collusion or improper managementoverride of controls, material misstatements due to erroror fraud may occur and not be detected. Also, projectionsof any evaluation of the IFCoFR to future periods aresubject to the risk that IFCoFR may become inadequatebecause of changes inconditions, or that the degree ofcompliance with the policies or procedures maydeteriorate.

Opinion

8. In our opinion, the Company has, in all material respects,adequate internal financial controls over financialreporting and such internal financial controls overfinancial reporting were operating effectively as at March31, 2017, based on internal control over financialreporting criteria established by the Company consideringthe essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controlsover Financial Reporting issued by the Institute ofChartered Accountants of India.


Sd/-per Ashish GuptaPartnerMembership No.:504662


AUDITOR’S REPORT

28


(`)

Balance Sheet as at Notes March 31, 2017 March 31, 2016

EQUITY AND LIABILITIESShareholders’ fundsShare capital 2 20,05,52,026 40,05,52,026Reserves and surplus 3 1,74,20,89,274 1,56,19,25,506

1,94,26,41,300 1,96,24,77,532Non current liabilitiesLong term borrowings 4 17,01,84,357 20,30,51,564Deferred tax liabilities (net) 5 23,52,52,116 23,44,51,738Other long term liabilities 6 1,62,51,520 1,57,14,270Long term provisions 7 17,96,75,723 1,79,66,496

60,13,63,716 47,11,84,068Current liabilitiesShort term borrowings 8 56,34,64,354 52,83,03,393Trade payables 9(a) Total outstanding dues of micro

enterprises and small enterprises 1,05,21,664 45,37,050(b) Others 36,61,73,182 28,42,52,359Other current liabilities 10 19,44,49,472 17,01,90,190Short term provisions 11 6,58,82,723 8,64,03,122

1,20,04,91,395 1,07,36,86,114TOTAL 3,74,44,96,411 3,50,73,47,714ASSETSNon current assetsFixed assets 12

Tangible assets 2,54,81,98,676 2,34,48,45,117Intangible assets 17,60,990 28,65,731Capital work in progress 2,06,79,541 3,55,83,069

Non current investments 13 5,00,000 5,00,000Long term loans and advances 14 2,63,32,280 4,92,31,258Other non current assets 15 23,59,883 18,17,935

2,59,98,31,370 2,43,48,43,110Current assetsInventories 16 46,77,77,015 42,97,81,931Trade receivables 17 57,11,67,908 55,39,71,903Cash and bank balances 18 1,39,05,707 1,45,48,665Short term loans and advances 19 7,72,29,982 5,94,31,176Other current assets 20 1,45,84,429 1,47,70,929

1,14,46,65,041 1,07,25,04,604TOTAL 3,74,44,96,411 3,50,73,47,714Summary of significant accounting policies 1and other explanatory informationThe accompanying notes are an integral part of the financial statements

This is the Balance Sheet referred to in our report of even dateFor Walker Chandiok & Co LLP For and on behalf of the Board of DirectorsChartered Accountants Sd/- Sd/-

Suresh Kumar Jain Vijay Kishore SharmaExecutive Director DirectorDIN : 00003500 DIN : 05313925

Sd/- Sd/- Sd/-Ashish Gupta (Membership No.: 504662) Mahendra Kumar Gupta Shalini ChawlaPartner Chief Financial Officer Company SecretaryPlace : GurugramDate : May 2, 2017

BALANCE SHEET

29


(`)

Statement of Profit and Loss for the year ended Notes March 31, 2017 March 31, 2016

INCOMERevenue from operations (gross) 21 4,94,73,76,350 4,71,52,99,552Less: Excise duty 12,49,94,026 12,27,12,330

Revenue from operations (net) 4,82,23,82,324 4,59,25,87,222Other income 22 1,42,83,911 89,77,817

Total income 4,83,66,66,235 4,60,15,65,039

EXPENSESCost of materials consumed 2,06,33,82,252 1,89,18,47,260Decrease/(Increase) in inventories of 23 80,06,728 (1,13,53,787)finished goods and work in progressPurchase of traded goods 8,59,17,148 2,98,87,377Employee benefits expense 24 55,89,31,829 54,93,72,756Finance costs 25 11,26,21,597 13,14,66,009Depreciation and amortisation expense 12 12,00,53,362 12,21,66,904Other expenses 26 1,46,06,91,112 1,46,41,03,770

Total expenses 4,40,96,04,028 4,17,74,90,289Profit before tax and exceptional items 42,70,62,207 42,40,74,750Exceptional items 27 1,51,33,588 -

Profit before tax 41,19,28,619 42,40,74,750

Tax expense:- Current tax 13,96,79,800 14,91,35,364- Taxes for earlier years 25,35,503 6,00,210- Deferred tax 8,00,378 4,86,340

Profit for the year 26,89,12,938 27,38,52,836

Earnings per share: 28- Basic 4.72 4.66- Diluted 4.72 4.66

Summary of significant accounting policies 1and other explanatory informationThe accompanying notes are an integral part of the financial statements

This is the Statement of Profit and Loss referred to in our report of even date

For Walker Chandiok & Co LLP For and on behalf of the Board of DirectorsChartered Accountants Sd/- Sd/-


Sd/- Sd/- Sd/-Ashish Gupta (Membership No.: 504662) Mahendra Kumar Gupta Shalini ChawlaPartner Chief Financial Officer Company Secretary


STATEMENT OF PROFIT AND LOSS

30


(`)

Statement of Cash Flows for the year ended March 31, 2017 March 31, 2016

A. Cash flow from operating activities:Net profit before tax 41,19,28,619 42,40,74,750

Adjustments for:Depreciation and amortisation 12,00,53,362 12,21,66,904Interest expense 10,06,90,425 13,14,66,009Site restoration amortisation 1,19,31,172 -Interest income (19,54,970) (18,90,550)Unrealised exchange fluctuation loss 27,03,650 27,22,187Profit on sale of fixed assets (net) (12,84,002) (30,450)Receivables/advances written off (Exceptional items) 1,51,33,588 -Provisions no longer required written back (29,55,084) -Provision for bad and doubtful debts/advances 6,63,251 18,00,661Amortisation of government grant (2,22,222) (2,22,222)

Operating profit before working capital changes 65,66,87,789 68,00,87,289

Adjustments for changes in working capital :- Movement in trade receivables (1,76,07,822) 2,38,84,441- Movement in other receivables (1,08,93,082) 81,20,920

(current and non current)- Movement in inventories (3,79,95,084) 3,94,34,232- Movement in trade and other payables 8,94,99,139 27,41,517

(current and non current)

Cash generated from operations 67,96,90,940 75,42,68,399Direct taxes paid (12,58,69,359) (15,08,89,940)

Net cash generated from operating activities (A) 55,38,21,581 60,33,78,459

B. Cash flow from investing activities:Additions to fixed assets and capital work in progress (15,57,14,882) (7,40,91,509)Proceeds from sale of fixed assets 52,21,933 1,18,550Investment in Margin Money deposits with banks (6,33,587) 78,26,152Interest received 21,41,470 20,49,825

Net cash used in investing activities (B) (14,89,85,066) (6,40,96,982)

STATEMENT OF CASH FLOW

31


(`)

Statement of Cash Flows for the year ended March 31, 2017 March 31, 2016

C. Cash flow from financing activities:Proceeds from borrowings- Receipts 10,00,00,000 -- Repayments (11,11,24,257) (17,01,11,622)Proceeds from cash credits/working capital demand loan (net) 3,51,60,961 (11,19,91,476)Interest paid (10,07,43,478) (13,85,78,072)Redemption of preference share capital (20,00,00,000) -Dividends paid (10,70,67,938) (10,84,14,021)Dividend taxes (2,18,08,644) (2,20,70,538)

Net cash used in financing activities (C) (40,55,83,356) (55,11,65,729)Net decrease in cash & cash equivalents (A+B+C) (7,46,841) (1,18,84,252)Cash and cash equivalents at the beginning of the year 64,31,814 1,83,16,066

Cash and cash equivalents at the end of the year 56,84,973 64,31,814

Cash and cash equivalents compriseCash 4,92,958 7,77,487Savings account with post office 272 272Balance with scheduled banks in current accounts 51,91,743 56,54,055

Total 56,84,973 64,31,814

Note:Figures in parentheses indicate cash outflow

This is the Statement of Cash Flows referred to in our report of even date





STATEMENT OF CASH FLOW

32


1. Background and nature of operationsEICL Limited (formerly known as English Indian ClaysLimited), a Company incorporated in India in 1963, underthe Companies Act 1956, was part of the erstwhile ThaparGroup. The Company is engaged in the business of miningof clay (kaolin) and manufacturing of processed clay,starch and allied products.

2. Basis of preparationThe financial statements have been prepared to complywith the Accounting Standards as prescribed underSection 133 of the Companies Act, 2013 (‘Act’) read withRule 7 of the Companies (Accounts) Rules, 2014 (asamended). The financial statements have been preparedunder the historical cost convention on the accrual basis.The accounting policies have been consistently appliedby the Company and are consistent with those used inthe previous year.

3. Use of estimatesIn preparing the Company’s financial statements inconformity with the accounting principles generallyaccepted in India, management is required to makeestimates and assumptions that affect the reportedamounts of assets and liabilities and the disclosure ofcontingent liabilities at the date of the financialstatements and reported amounts of revenues andexpenses during the reporting period. Actual results coulddiffer from those estimates. Any revision to accountingestimates is recognised prospectively in the current andfuture periods.

4. Property, Plant and Equipment (Fixed assets)Property, Plant and Equipment comprised of tangiblefixed assets including capital spares, leaseholdimprovements, restoration obligation by law, technicalknowhow costs and research and development assets arestated at cost and less accumulated depreciation andimpairment losses, if any. Cost includes direct expensesrelated to acquisition, installation, restoration andinterest incurred during construction period. Cost ismeasured at amounts incurred initially to acquire orconstruct tangible fixed assets and includes any costdirectly attributable to bringing the assets to the locationand conditions necessary for it to be capable of operatingin the manner intended. Cost also includes estimates ofsite restoration recorded at present value of obligation.Intangible assets are recognised if it is probable that thefuture economic benefits attributable to the asset willflow to the enterprise and cost of the asset can be

measured reliably in accordance with AccountingStandard – 26, ‘Intangible assets’.

5. Depreciation/Amortisationa) Tangible fixed assets

i) Depreciation on fixed assets is provided as perstraight line method at higher of the followinga) Depreciation on original cost as specified in

Schedule II to the Companies Act, 2013 orb) Depreciation based on the residual /

estimated useful life of the asset.** Since the list of the assets is too large, it is notpracticable to give the individual depreciation ratesfor each of the assets.In respect of additions and deletions, depreciationcharge is restricted to the period of use. All assetscosting ` 5,000 or less are fully depreciated in theyear of addition.Leasehold land and leasehold improvements aredepreciated on a straight line method basis over theperiod of lease.Category Useful life (years)Factory and other buildings 30 - 60Plant and equipment 10 - 25Furniture, fixtures 10Office equipment 5Vehicles and cycles 8

b) Intangible assetsIntangible assets including technical know-how/brand and computer software/ licence fee areamortised on straight line basis over their useful livesof 10 years and 5 years respectively from the date ofacquisition / implementation. The amortisationperiod and method are reviewed at each year end.

6. InvestmentsInvestments that are readily realisable and intended tobe held for not more than one year are classified ascurrent investments; all other investments are classifiedas long term investments. Long term investment is carriedat cost less provision (if any) for decline in value which isother than temporary in nature. Current investments arecarried at lower of cost and fair value.

7. Impairment of assetsThe Company assesses at each balance sheet datewhether there is any indication that an asset may be

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTES

33


impaired. If any such indication exists, the Companyestimates the recoverable amount of the asset. If suchrecoverable amount of the asset or the recoverableamount of the cash generating unit to which the assetbelongs is less than its carrying amount, the carryingamount is reduced to its recoverable amount. Thereduction is treated as an impairment loss and isrecognized in the Statement of profit and loss. If at thebalance sheet date there is an indication that a previouslyassessed impairment loss no longer exists then therecoverable amount is reassessed and the asset isreflected at the recoverable amount subject to amaximum of depreciated historical cost.

8. InventoriesInventories, including stores and spare parts (other thanstores and spares accounted for as Property, Plant andEquipment), raw materials (including clay matrix-minedand purchased), work in process and finished goods, arevalued at lower of cost and net realisable value. Costincludes direct expenses and is determined on the basisof weighted average method.Total mining expenses are considered as raw material costfor clay matrix – mined.In respect of finished goods and work in progress, costincludes raw material cost plus conversion costs and otheroverheads incurred to bring the goods to their presentlocation and condition based on normal operatingcapacity. Cost of finished goods also includes excise duty,wherever applicable.

9. Employees benefits(a) Short term employee benefits

Short term employee benefits are recognised in theperiod during which the services have beenrendered.

(b) Long term employee benefits(i) Defined contribution plans (Provident fund and

employees state insurance schemes)All employees of the Company are entitled toreceive benefits under the Provident Fund,which is a defined contribution plan. Both theemployee and the employer make monthlycontributions to the plan at a predeterminedrate of the employees’ basic salary. Thesecontributions are made to the fund administeredand managed by the Government of India andby an approved trust (to the extent employeescovered under the trust) for this purpose. Inaddition, some employees of the Company are

covered under the employees’ state insuranceschemes, which are also defined contributionschemes recognised and administered by theGovernment of India.In respect of employees, the Company makesspecified monthly contribution towards theemployees’ provident fund to the provident fundtrust administered by the Company. Theminimum interest payable by the provident fundtrust to the beneficiaries every year is notifiedby the Government. The Company has anobligation to make good the shortfall, if any,between the return on respective investmentsof the trust and the notified interest rate.The contributions made to provident fund trustare charged to Statement of Profit and Loss asand when they become payable. In addition, theCompany recognises liability for shortfall in theplan assets vis-à-vis the fund obligation, if any.The Guidance on implementing AS 15, EmployeeBenefits (revised 2005) issued by AccountingStandard Board (ASB) states that benefitsinvolving employer established provident funds,which require interest shortfalls to berecompensed are to be considered as definedbenefit plans. Pending the issuance of theguidance note from the Actuarial Society ofIndia, the Company’s actuary has expressed aninability to reliably measure provident fundliabilities. Accordingly, the Company is unableto exhibit the related information.The Company’s contributions to both theseschemes are expensed in the Statement of profitand loss.Superannuation plan - Some employees of theCompany are entitled to superannuation, adefined contribution plan which is administeredthrough Life Insurance Corporation of India(“LIC”). Superannuation benefits are recordedas an expense as incurred in the Statement ofprofit and loss.

(ii) Defined benefit plans (Gratuity)The Company provides for gratuity obligationsthrough a defined benefit retirement plan (the‘gratuity plan’) covering all employees. Thegratuity plan provides a lump sum payment tovested employees at retirement or terminationof employment based on the respectiveemployees’ salary and years of employment withthe Company. The Company has taken gratuity

NOTES

34


policy with HDFC Insurance to cover the liability.The Company provides for the gratuity planbased on actuarial valuations in accordance withAccounting Standard 15 (revised).Actuarial gains and losses arising fromadjustments and changes in actuarialassumptions are charged or credited to theStatement of profit and loss in the year in whichsuch gains or losses arise.

(iii) Other employee benefitsLeave encashment – The Company hasrecognised liability for short term compensatedabsences on full cost basis with reference tounavailed earned leaves at the year end. To theextent, the compensated absences qualify as along term benefit, the Company has providedfor the long term liability at year end as per theactuarial valuation using the Projected UnitCredit Method.Actuarial gains and losses arising fromadjustments and changes in actuarialassumptions are charged or credited to theStatement of profit and loss in the year in whichsuch gains or losses arise.

10. Foreign currency transactionsi) Initial recognition

Foreign currency transactions are recorded in thereporting currency, by applying to the foreign currencyamount the exchange rate between the reportingcurrency and the foreign currency at the date of thetransaction.

ii) ConversionForeign currency monetary items are reported using theclosing rate. Non-monetary items which are carried interms of historical cost denominated in a foreign currencyare reported using the exchange rate at the date of thetransaction; and non-monetary items which are carriedat fair value or other similar valuation denominated in aforeign currency are reported using the exchange ratesthat existed when the values were determined.

iii) Exchange differencesExchange differences arising on the settlement ofmonetary items or on restatement of the Company’smonetary items at rates different from those at whichthey were initially recorded during the year, or reportedin previous financial statements, are recognised as incomeor as expenses in the year in which they arise.

As per the amendment of the Companies (AccountingStandard) Rules, 2006-‘AS 11’ relating to ‘The Effects ofChanges in Foreign Exchange Rates’ exchange differencearising on conversion of long term foreign currencymonetary items is recorded under the head ‘ForeignCurrency Monetary Item Translation Difference Account’and is amortised over period not extending beyond,earlier of March 31, 2020 or maturity date of underlyinglong term foreign currency monetary items.Obligations under forward exchange contracts aretranslated at contracted rates of exchange and thedifference between the contracted rate and the exchangerate at the date of the transaction is recognised as incomeor expense over the life of the contract. Further exchangedifference on such contracts i.e. difference between theexchange rate at the reporting/settlement date and theexchange rate on the date of inception of contract/thelast reporting date, is recognised as income/expense forthe period.

11. Research & development expensesRevenue expenditure incurred on research anddevelopment is charged to Statement of profit and lossin the year it is incurred. Capital expenditure is includedin the respective heads under fixed assets anddepreciation/amortisation thereon is charged todepreciation in the profit and loss account.

12. Government grantGovernment grants relating to depreciable fixed assetsare treated as deferred income and recognised in theStatement of profit and loss over the remaining usefullife of the related assets.

13. Revenue recognitionRevenue is recognised to the extent that it is probablethat the economic benefits will flow to the Company andthe revenue can be reliably measured.i) Sales

a) Revenue from sale of goods is recognised whenall the significant risks and rewards of ownershipare transferred to the buyer and the Companyretains no effective control of the goodstransferred to a degree usually associated withownership; and

b) No significant uncertainty exists regarding theamount of the consideration that will be derivedfrom the sale of goods.

ii) InterestInterest income is recognised on a time proportion

NOTES

35


basis taking into account the amount outstandingand the interest rate applicable.

14. Borrowing costsBorrowing costs are charged to revenue except in caseswhere costs relate to qualifying assets in which case suchcosts are capitalised as a part of cost of respective assetstill the date they are put to their intended use.

15. TaxationTax expense for the year, comprising current tax anddeferred tax is included in determining the net profit forthe year. Provision for the current tax is made based onliability computed in accordance with the relevant taxrates and tax laws. Provision for deferred tax is made forall temporary timing differences arising between thetaxable income and accounting income at currentlyenacted tax rates. Deferred tax assets are recognised onlyif there is reasonable certainty that they will be realisedsubstantially and are reviewed for the appropriatenessof their respective carrying values at each balance sheetdate.

16. Segment accountingThe accounting policies applicable to the reportablesegment are the same as those used in the preparationof the financial statements as set out above.Segment revenue and expenses include amounts whichare directly identifiable to the segment or allocable on areasonable basis.Segment assets include all operating assets used by thesegment and consist primarily of debtors, inventories andfixed assets. Segment liabilities include all operatingliabilities and consist primarily of creditors and statutoryliabilities.

17. Earnings per share (EPS)The earnings considered in ascertaining the Company’sbasic EPS comprises net profit after tax. The number ofshares used in computing basic EPS is the weightedaverage number of shares outstanding during the year.The earnings considered in ascertaining the Company’sdilutive EPS comprises net profit after tax as adjusted forexpenses or income that would result from the conversionof the dilutive potential equity shares. The number ofshares used in computing diluted EPS is the weightedaverage number of shares outstanding during the periodas adjusted for the effects of all dilutive potential equityshares.

18. LeasesLease payments under an operating lease are recognisedas an expense in the profit and loss account on a straightline basis over the lease term.

19. Provisions and contingenciesThe Company creates a provision when there is a presentobligation as a result of a past event that probablyrequires an outflow of resources and a reliable estimatecan be made of the amount of obligation. A disclosurefor a contingent liability is made where there is a possibleobligation that arises from past events and the existenceof which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events notwholly within the control of the Company or wherereliable estimate of the obligation cannot be made. Alllong term provisions are discounted to present value offuture obligations.

NOTES

36


2 SHARE CAPITALParticulars As at March 31, 2017 As at March 31, 2016

Number `̀̀̀̀ Number `̀̀̀̀

Authorised share capitalEquity shares of ` 2 each 9,00,00,000 18,00,00,000 9,00,00,000 18,00,00,000Preference shares of ` 100 each 30,00,000 30,00,00,000 30,00,000 30,00,00,000

Total 48,00,00,000 48,00,00,000

Issued, subscribed and fully paid up share capitalEquity shares of ` 2 each 5,02,76,013 10,05,52,026 5,02,76,013 10,05,52,02611% cumulative redeemable preference shares 10,00,000 10,00,00,000 30,00,000 30,00,00,000of ` 100 eachTotal 20,05,52,026 40,05,52,026

a) There is no movement in the equity share capital during the current year and the previous year. However, preferenceshare to an extent of ` 20,00,00,000 redeemed during the year.

b) Terms and rights attached to equity sharesThe Company has only one class of equity shares having the par value of ` 2 per share. Each holder of equity shareis entitled to one vote per share. The Company declares and pays dividend in Indian Rupees.During the year ended March 31, 2017, the amount of per share dividend recognised as distributions to equityshareholders was ` 1.0 per share (2015-16 : ` 1.50 per share including proposed dividend of ` 0.50 per share).Board of Directors proposed a final dividend of ` 0.50 per share on May 2, 2017 subject to approval of share holders.In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets ofthe Company, after distribution of all preferential amounts. The distribution will be in proportion to the number ofequity shares held by the shareholders.

c) Terms and rights attached to preference sharesPreference shares carry a cumulative dividend of 11% p.a. Each holder of preference share is entitled to one vote pershare only on resolutions placed before the Company which directly affect the rights attached to the cumulativepreference shares. The Company declares and pays dividend in Indian Rupees.During the year ended March 31, 2017, the amount of per share dividend recognised as distributions to preferenceshareholders was ` 8.25 and dividend paid on pro-rata basis for preference shares redeemed during the year (2015-16: ` 11.00 per share including proposed dividend of ` 2.75 per share).Board of Directors proposed a final dividend of ` 2.75 per share on May 2, 2017 subject to approval of share holders.11% Cumulative redeemable preference shares are redeemable at par at the option of the Company not earlier than18 months but not later than 5 years from the date of allotment/renewal September 04, 2016, i.e. between March4, 2018 to September 4, 2021.During the year ended March 31, 2017, 10,00,000 preference shares of ` 100 each redeemed at par on September04, 2016 and 10,00,000 preference shares of ` 100 each redeemed at par on March 17, 2017.

NOTES

37


d) Shares held by Holding CompanyEquity shares

Particulars As at March 31, 2017 As at March 31, 2016Number `̀̀̀̀ Number `̀̀̀̀

DBH International Private Limited 3,26,58,196 6,53,16,392 3,26,35,326 6,52,70,652

11% cumulative redeemable preference shares

Particulars As at March 31, 2017 As at March 31, 2016Number `̀̀̀̀ Number `̀̀̀̀

DBH International Private Limited 10,00,000 10,00,00,000 30,00,000 30,00,00,000

e) Aggregate number of bonus shares, equity shares issued for considerations other than cash and shares boughtback during the period of five years immediately preceding the reporting period.

Particulars Year (aggregate number of shares)2015-16 2014-15 2013-14 2012-13 2011-12

Equity shares :Fully paid up by way of bonus shares - - - - -

f) Details of shareholders holding more than 5% shares in the Company

Name of shareholders As at March 31, 2017 As at March 31, 2016Number of % of Number of % of

shares held holding shares held holding

Equity sharesDBH International Private Limited 3,26,58,196 64.96 3,26,35,326 64.91Karun Carpets Private Limited 1,33,99,375 26.65 1,33,99,375 26.65

11% cumulative redeemable preference sharesDBH International Private Limited 10,00,000 100.00 30,00,000 100.00

NOTES

38


3 RESERVES AND SURPLUS(`̀̀̀̀)

Particulars As at As atMarch 31, 2017 March 31, 2016

Capital reserves 6,33,688 6,33,688

Capital redemption reserveOpening Balance 4,41,37,764 4,41,37,764Add: Additions during the year 20,00,00,000 -

Balance at the end of the year 24,41,37,764 4,41,37,764

General reserveBalance at the beginning of the year 52,97,93,954 51,26,02,592Less: Depreciation on fully used assets due to Componentisation - (1,01,93,922)

as per Schedule II of Companies Act, 2013 (refer note 12(h))Add: Transferred from surplus in Statement of Profit and Loss for 2,68,91,294 2,73,85,284

the year

Balance at the end of the year 55,66,85,248 52,97,93,954

Surplus in Statement of Profit and LossBalance at the beginning of the year 98,73,60,100 87,14,98,606Add: Profit for the year 26,89,12,938 27,38,52,836

AppropriationsLess: Proposed dividends

- Preference shares - 82,50,000- Equity shares - 2,51,38,007

Less: Interim dividends- Preference shares 2,34,61,643 2,47,50,000- Equity shares 5,02,76,013 5,02,76,014

Less: Corporate dividend tax 1,50,11,514 2,21,92,037Less: Transfer to capital redemption reserve 20,00,00,000 -Less: Transfer to general reserve 2,68,91,294 2,73,85,284

Balance at the end of the year 94,06,32,574 98,73,60,100Total 1,74,20,89,274 1,56,19,25,506

NOTES

39


4 LONG TERM BORROWINGS(`̀̀̀̀)

Particulars As at March 31, 2017 As at March 31, 2016Non current Current Non current Current

SecuredTerm loansRupee term loans from banks (note a) 14,35,59,657 10,80,47,622 15,16,20,614 9,37,48,572Foreign currency loan from bank (note b) 2,66,24,700 2,36,66,400 5,14,30,950 1,71,43,650

Total 17,01,84,357 13,17,14,022 20,30,51,564 11,08,92,222

Notes:a) Rupee term loans from banks comprises of:

(i) Loan of ` 20,00,00,000 taken from IndusInd Bank during the financial year 2014-15 and carries interest @ 1 yearMCLR + 0.55% p.a (2015-16: Base rate + 0.15% p.a). The loan is repayable in 12 equal quarterly instalmentsstarted from June 30, 2015.

(ii) Loan of ` 27,50,00,000 (including ECB of US$ 15,00,000) from ICICI Bank of which loan of ` 10,00,00,000 and` 7,30,00,000 taken from ICICI Bank during the financial year 2012-13 and 2013-14 respectively, which carriesinterest @ 1 year MCLR + 1.85% p.a (2015-16 : Base rate + 2.75% p.a.). The loan is repayable in 24 and 28 equalquarterly instalments starting from February 14, 2014 & March 29, 2014 respectively.

(iii) Loan of ` 10,00,00,000 taken from ICICI Bank (sanctioned amount of ̀ 1,50,00,00,000) during the financial year2016-17 and carries interest @ 1 year MCLR + 0.80% p.a. The loan is repayable in 14 equal quarterly instalmentsstarting from December 13, 2017.

b) Foreign currency loan of US$ 15,00,000 taken from ICICI Bank during the financial year 2011-12 carries interest @Libor + 4.65% p.a (2015-16 : Libor + 4.65% p.a.). The loan is repayable in 28 quarterly instalments starting fromMarch 08, 2012.

c) All term loans from banks are secured by an equitable charge on all immovable properties of the Company, bothpresent and future and are also secured by way of hypothecation of the Company's movable properties includingmovable plant and machinery, machinery spares, tools and accessories and other movables both present and future(except book debts) subject to prior charges created in favour of the Company's bankers on stocks of raw materials,consumable stores, finished goods, etc. for working capital facilities. The above charges rank pari-passu with chargescreated/to be created by the Company in favour of other term lending banks.

d) Current maturities of long term liabilities are disclosed under the head other current liabilities (refer note 10).

NOTES

40


5 DEFERRED TAX LIABILITIES (NET)(`̀̀̀̀)


Fixed assets: Impact of difference between tax depreciation and 27,09,80,195 26,72,22,746depreciation charged in the books[net of deferred tax assets of ` Nil(2015-16: ` 53,95,021) on adoption of componentisation of fixed assets)

Gross deferred tax liabilities 27,09,80,195 26,72,22,746

Deferred tax assetsEmployee benefits 2,18,79,952 1,99,24,190Provision for doubtful debts and advances 1,15,64,837 1,28,46,818Site restoration obligation 22,83,290 -

Gross deferred tax assets 3,57,28,079 3,27,71,008Deferred tax liabilities (net) 23,52,52,116 23,44,51,738

6 OTHER LONG TERM LIABILITIES(`̀̀̀̀)


Deferred government grants 20,00,002 22,22,224Deposits from vendors 89,04,146 81,53,646Deposits from customers 53,47,372 53,38,400

Total 1,62,51,520 1,57,14,270

7 LONG TERM PROVISIONS(`̀̀̀̀)


Provision for employee benefitsGratuity (also refer note 30) 1,00,34,002 99,36,872Leave encashment 1,02,64,884 80,29,624Site restoration obligation [Note (a)] 15,93,76,836 -

Total 17,96,75,722 1,79,66,496

Notes :(a) Site restoration obligation w.r.t. mining land of clay business is

recognised on April 1, 2016 in view of the requirement of AS 10 readwith AS 29. The details are given belowPresent value of obligation as on April 1, 2016 15,54,46,056 -Less : Amount paid during the year (80,00,392) -Add : Finance charge during the year 1,19,31,172 -

Present value of obligation as on March 31, 2017 15,93,76,836 -

The Ministry of Corporate Affairs (MCA) vide its notification in the Official Gazette dated March 30, 2016 notified therules to amend the Companies (Accounting Standards) Rules, 2006 prescribed under Section 133 of the Companies Act,2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. Pursuant to revised Accounting Standards (AS) 29 -Provisions, Contingent Liabilities and Contingent Assets and Accounting Standard (AS) 10 - Property, Plant & Equipment,the Company has created obligation on site restoration of ̀ 15,54,46,056 as of April 1, 2016 with a corresponding additionto the cost of land.

NOTES

41


8 SHORT TERM BORROWINGS(`̀̀̀̀)


SecuredLoans repayable on demandFrom banksCash credit account with scheduled banks (note a and b) 21,34,64,354 10,33,03,393Working capital demand loans (note a and b) 35,00,00,000 42,50,00,000

Total 56,34,64,354 52,83,03,393

Notes:a) Cash credit and working capital demand loans along with bank guarantees and letters of credit facilities given by the

banks are secured by hypothecation of finished goods, semi-finished goods, consumable stores and spares, rawmaterial and book debts at Yamunanagar, Thiruvananthapuram and Shimoga factories and second pari passu chargeon block of fixed assets of the Company.

b) Cash credit and working capital demand loans from the bank comprises of the following:(i) Cash credit of ` 30,00,00,000 sanctioned by Axis Bank is repayable on demand and carries interest @ 3 months

MCLR + 0.50% p.a. (2015-16 : Base rate + 2.50% p.a.). Working capital demand loan ` 15,00,00,000 carriesinterest @ 3 months MCLR (2015-16 : Base rate + 0.75% p.a.).

(ii) Cash credit/working capital demand loan of ̀ 20,00,00,000 from HDFC Bank is repayable on demand and carriesinterest @ 1 year MCLR + 0.35% p.a. Working capital demand loan of ̀ 15,00,00,000 carries interest @ 3 monthsMCLR + 0.01% p.a.

(iii) Cash credit/working capital demand loan of ` 10,00,00,000 from IndusInd Bank is repayable on demand andcarries interest rate @ 1 year MCLR + 0.20% p.a. (2015-16 : Base rate + 1.00% p.a.). Working capital demand loancarries interest @ 3 months MCLR + 0.15% p.a. (2015-16 : Base rate + 0.00% p.a.).

(iv) Cash credit/working capital demand loan of ` 10,00,00,000 sanctioned by ICICI Bank during the financial year2012-13 is repayable on demand and carries interest @ 6 months MCLR + 0.50% p.a. (2015-16 : Base rate +2.75% p.a.). Working capital demand loan of ` 5,00,00,000 carries interest @ 3 months MCLR + 0.20% p.a.(2015-16 : Base rate + 1.45% p.a.).

9 TRADE PAYABLES(`̀̀̀̀)


Due to Micro, Small and Medium Enterprises (refer note below) 1,05,21,664 45,37,050Other trade creditors 18,45,45,575 13,55,05,239Creditors for expenses 18,16,27,607 14,87,47,120

Total 37,66,94,846 28,87,89,409

Note:Dues to micro, small and medium enterprises pursuant to Section 22 of the Micro, Small and Medium EnterprisesDevelopment Act (MSMED), 2006

NOTES

42



Principal amount remaining unpaid 1,05,21,664 45,37,050Interest due thereon - -Interest paid by the Company in terms of Section 16 of MSMED Act, 2006, - -along with the amount of payment made to the suppliers and serviceproviders beyond the appointed day during the yearInterest due and payable for the period of delay in making payment - -(which has been paid but beyond the appointed day during the year)but without adding the interest specified under MSMED Act, 2006Interest accrued and remaining unpaid as at Balance Sheet date.Further interest remaining due and payable even in the succeeding years, - -until such date when the interest dues as above are actually paid to thesmall enterprise for the purpose of disallowance as a deductibleexpenditure under Section 23 of the MSMED Act, 2006.

1,05,21,664 45,37,050

The management has identified enterprises which have provided goods and services to the Company and which qualifyunder the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises DevelopmentAct, 2006 (‘MSMEDA’). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at BalanceSheet date has been made in the financial statements based on the information received and available with the Company.

10 OTHER CURRENT LIABILITIES(`̀̀̀̀)


Current maturities of long term borrowings (also refer note 4) 13,17,14,022 11,08,92,222Interest accrued but not due on borrowings 1,85,181 2,38,234Unpaid dividends 18,11,543 17,41,573Unclaimed matured public deposits - 30,888Employee related payables 2,40,45,133 2,43,02,520Capital creditors 66,49,294 64,12,166Advance from customers 50,51,848 48,98,215Deferred government grants 2,22,222 2,22,222

Statutory duesExcise duty payable 24,34,303 45,78,649Provident fund payable 40,94,077 41,02,615Sales tax payable 75,94,634 72,57,982Tax deducted at source payable 39,97,466 38,86,974Employee state insurance payable 2,51,350 64,201Service tax and other statutory dues 52,96,316 50,118

Other liabilitiesOther payables 11,02,083 15,11,611

Total 19,44,49,472 17,01,90,190

NOTES

43


11 SHORT TERM PROVISIONS(`̀̀̀̀)


Provision for employee benefitsGratuity payable (also refer note 30) 1,64,90,212 1,62,59,083Leave encashment payable 2,64,33,139 2,33,45,474

OthersProvision for taxes, net of advance taxes paid including tax deducted 2,29,59,372 66,13,428at source ` 40,07,80,049 (2015-16: ` 33,62,73,534)Proposed dividend (note a) - 3,33,88,007Provision for taxes on dividend - 67,97,130

Total 6,58,82,723 8,64,03,122

Note:a) Details with respect to proposed dividend:

Dividend proposed to:- Equity shareholders - 2,51,38,007- Preference shareholders - 82,50,000

Proposed dividend per share:- Equity shareholders - 0.50- Preference shareholders - 2.75

NOTES

44

Annual Report 2016-17NOTES12

FIXE

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For t

he y

ear e

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in `̀̀̀̀

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Nil)

in vi

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f the

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ns to

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ry in

clude

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tions

to re

sear

ch an

d de

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t ass

ets a

mou

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g to ` 7

5,79

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(201

5-16

: ` 70

,16,

353 )

and

depr

eciat

ion

char

ge fo

r the

year

inclu

des `

63,

36,1

48 (2

015-

16: `

57,02

,268

) on

acco

unt o

f res

earc

h an

d de

velo

pmen

t ass

ets.

c)Ad

ditio

ns to

plan

t and

mac

hine

ry in

clude

addi

tions

to C

orpo

rate

Socia

l Res

pons

ibilit

ies (C

SR) a

sset

s am

ount

ing t

o Ni

l (20

15-1

6: `

8,13

,947

) an

d de

prec

iatio

n ch

arge

for t

he ye

ar in

clude

s ` 37

,294

(201

5-16

: ` 9

3).

d)Pu

rsuan

t to

the s

ale cu

m le

ase a

gree

men

t dat

ed M

ay 22

, 200

8, th

e Com

pany

has

acqu

ired

land

for t

he p

urpo

se o

f set

ting u

p a s

tarc

h m

anuf

actu

ring p

lant a

t Shi

mog

a, Ka

rnat

aka.

The C

ompa

ny h

as pa

id an

amou

nt o

f ` 5,

31,3

0,00

0 as a

llotm

ent c

onsid

erat

ion

and

the l

and

shall

be t

rans

ferre

d in

the n

ame o

fth

e Com

pany

on a

freeh

old b

asis

at en

d of 1

0 yea

rs, pa

ymen

t of r

egist

ratio

n cha

rges

, sta

mp d

uty a

t pre

vailin

g pric

e upo

n ful

film

ent o

f cer

tain

cond

ition

s. As

per a

gree

men

t the

land

has b

een t

rans

ferre

d on l

ease

basis

to Co

mpa

ny fo

r the

perio

d of 1

0 yea

rs an

d Com

pany

is re

quire

d to p

ay le

ase r

ent o

f ` 68

,410

and

main

tena

nce c

harg

es o

f ` 9

9,60

0 pe

r ann

um.

e)Gr

oss b

ook v

alue a

nd ne

t boo

k valu

e doe

s not

inclu

de fix

ed as

sets

held

for s

ale am

ount

ing t

o ` 1,

50,53

,397

(201

5-16

: ` 1,

50,53

,397

) and

` 1,

45,8

4,42

9 (20

15-1

6: `

1,45

,84,

429)

resp

ectiv

ely, lo

cate

d at K

ollam

unit,

whi

ch m

anag

emen

t inte

nds t

o dive

st wi

thin

the n

ext 1

2 mon

ths a

t am

ount

s equ

al to

or ex

ceed

ingth

e ass

et ca

rryin

g valu

es at

the r

espe

ctive

Bala

nce S

heet

dat

es.

f)(D

eletio

ns) /

addi

tions

to fa

ctor

y and

oth

er b

uild

ings

inclu

des (` 3

,58,

438)

(201

5-16

: ` 16

,61,

186)

and

addi

tions

to p

lant a

nd m

achi

nery

inclu

des (` 5

,62,

712)

(201

5-16

` 25

,93,

264)

on

acco

unt o

f cap

italis

atio

n of

fore

ign ex

chan

ge fl

uctu

atio

n of

long

term

bor

rowi

ngs.

g)De

prec

iatio

n fo

r the

year

exclu

des d

epre

ciatio

n am

ount

ing o

f Nil (

2015

-16 N

il)on

asse

ts he

ld fo

r sale

(Kol

lam U

nit).

h)Du

ring t

he ye

ar en

ded

Mar

ch 31

, 201

6, th

e Com

pany

has

carri

ed o

ut co

mpo

nent

isatio

n fo

r Plan

t & M

achin

ery,

Equip

men

t and

Bui

lding

as p

er th

e req

uirem

ent o

f Sch

edul

e II o

f Com

pani

es A

ct 20

13. T

he af

ores

aid ch

ange

did

not

hav

e a m

ater

ial im

pact

on

state

men

t of p

rofit

and

loss

for t

he ye

ar. H

owev

er,

in ac

cord

ance

with

the t

rans

ition

al pr

ovisi

on, u

nam

ortis

ed de

prec

iatio

n am

ount

ing to

` 1,

55,8

8,94

2 tow

ards

tang

ible

asse

ts th

at sh

ould

hav

e bee

n fu

lly de

prec

iated

bas

ed o

n th

e rev

ised

usef

ul lif

e give

n in

Sche

dule

II of

the C

ompa

nies A

ct, 2

013,

has

bee

n ad

juste

d to

the o

penin

g res

erve

s and

surp

lus af

ter

adju

sting

the d

efer

red

tax a

sset

s of `

53,9

5,02

1.

45


13 NON CURRENT INVESTMENT(`̀̀̀̀)


Trade investments (valued at cost unless otherwise stated)Investment in equity instruments 5,00,000 5,00,000

Total 5,00,000 5,00,000

Details of trade investments (unquoted) Name of the body corporate Number of shares Face value Partly paid/ Amount Amount

(`̀̀̀̀) Fully paid (`̀̀̀̀) (`̀̀̀̀)1 2 3 4 5 6

As at As at As at As atMarch 31, March 31, March 31, March 31,

2017 2016 2017 2016

EquityKerala EnviroInfrastructures Limited 50,000 50,000 10 Fully paid 5,00,000 5,00,000

50,000 50,000 5,00,000 5,00,000

14 LONG TERM LOANS AND ADVANCES(`̀̀̀̀)


Unsecured, considered goodCapital advances 24,54,999 33,14,665Security deposits 1,95,56,739 2,57,78,583Loans and advances to related parties (note a) 2,00,000 2,00,000

Other loans and advances- Duty / taxes paid under protest recoverable (also refer note 40.1) 22,49,962 1,73,83,550- Others 18,70,580 25,54,460

Unsecured, considered doubtfulDuty paid under protest (also refer note 40.1) 3,04,86,255 1,53,52,667Less: Provision for doubtful advances (3,04,86,255) (1,53,52,667)

Total 2,63,32,280 4,92,31,258

Note:a) Amounts due from related parties:

- Bharat Starch Products Private Limited 2,00,000 2,00,000

b) Out of duty paid under protest ` Nil (2015-16 : ` 12,588) have been written off against the provision.

c) Provision for doubtful advances of ` 1,51,33,588 shown as exceptional item.

NOTES

46


15 OTHER NON CURRENT ASSETS(`̀̀̀̀)


Margin money deposits (note a) 23,59,883 18,17,935

Total 23,59,883 18,17,935

Note:a) Margin money deposits are under lien with banks for issuance of bank guarantee and letter of credits.

16 INVENTORIES(`̀̀̀̀)


Raw materials 14,40,03,364 10,63,40,869Work in progress 1,66,29,958 1,32,13,982Finished goods* 20,04,92,939 21,19,15,643Stores and spares 10,66,50,754 9,83,11,437

Total 46,77,77,015 42,97,81,931

* Including by product of ` 98,69,803 (2015-16 ̀ 58,87,057) and traded goods of Clay products of ̀ 1,72,00,366 (2015-16` 14,07,301)

17 TRADE RECEIVABLES(`̀̀̀̀)


Trade receivables outstanding for a period less than six monthsfrom the date they are due for paymentSecured, considered good 48,16,654 50,48,502Unsecured, considered good 56,06,39,246 54,33,91,325

56,54,55,900 54,84,39,827

Trade receivables outstanding for a period exceeding six monthsfrom the date they are due for paymentSecured, considered good 7,50,012 3,20,615Unsecured, considered good 49,61,996 52,11,461Unsecured, considered doubtful 1,80,63,991 2,17,68,280Less: Provision for doubtful debts (note a) (1,80,63,991) (2,17,68,280)

57,12,008 55,32,076Total 57,11,67,908 55,39,71,903

Note:a) Out of this ` 14,12,456 (2015-16 : ` 80,988) have been written off against the provision and realised ` 29,55,084

(2015-16 : ` Nil) during the year.

NOTES

47


18 CASH AND BANK BALANCES(`̀̀̀̀)


Cash and cash equivalentsCash on hand 4,92,958 7,77,487Post office savings deposits 272 272

Bank balances- in current accounts 51,91,743 47,04,055- in deposits with maturity of less than three months - 9,50,000

56,84,973 64,31,814

Other bank balancesMargin money deposits (note a) 64,09,190 63,17,551Unpaid dividend accounts 18,11,544 17,99,300

82,20,734 81,16,851Total 1,39,05,707 1,45,48,665

Notes:a) Margin money deposits are under lien with banks for issuance of bank guarantee and letter of credits.

19 SHORT TERM LOANS AND ADVANCES(`̀̀̀̀)


Unsecured, considered goodAdvances to vendors 2,20,43,796 1,51,89,036

Other loans and advances- Deposits with excise and other tax authorities 4,05,97,803 3,04,82,226- Prepaid expenses 91,14,829 94,25,656- Others 54,73,554 43,34,258

Total 7,72,29,982 5,94,31,176

20 OTHER CURRENT ASSETS(`̀̀̀̀)


Unsecured, considered goodFixed assets held for sale (at lower of cost and net 1,45,84,429 1,45,84,429realisable value) (note a)Interest receivable - 1,86,500

Total 1,45,84,429 1,47,70,929

Note:a) Fixed assets held for sale represent land and buildings of gross book value ` 1,50,53,397 (2015-16: ` 1,50,53,397)

and net book value ` 1,45,84,429 (2015-16: ` 1,45,84,429) located at Kollam unit, which management intends todivest within the next 12 months at amounts equal to or exceeding the asset carrying values at the respectiveBalance Sheet dates.

NOTES

48


21 REVENUE FROM OPERATIONS(`̀̀̀̀)

Particulars Year ended Year endedMarch 31, 2017 March 31, 2016

Sale of products 4,93,44,17,186 4,69,93,41,123Other operating revenues- Sale of scrap 1,29,59,164 1,59,58,429

Total 4,94,73,76,350 4,71,52,99,552

Details of products sold (`̀̀̀̀)Particulars Year ended Year ended

March 31, 2017 March 31, 2016

Clay products 2,85,75,67,242 2,70,97,55,028Starch and allied products 1,64,56,54,929 1,58,01,33,946By products and others 44,41,54,179 42,54,10,578

Total 4,94,73,76,350 4,71,52,99,552

22 OTHER INCOME(`̀̀̀̀)


Government grants 2,22,222 2,22,222Provisions no longer required written back 29,55,084 -Net gain on sale of fixed assets 12,84,002 30,450Exchange fluctuation (net) - 23,21,142Interest on deposits (gross) [tax deducted at 19,54,970 18,90,550source of ` 1,92,713 (2015-16: ` 1,85,664]Miscellaneous income 78,67,633 45,13,453

Total 1,42,83,911 89,77,817

23 INCREASE IN INVENTORY OF FINISHED GOODS AND WORK IN PROGRESS(`̀̀̀̀)


Opening stockFinished goods 21,19,15,643 20,39,16,811Stock in process 1,32,13,982 98,59,027

Total 22,51,29,625 21,37,75,838

Closing stockFinished goods 20,04,92,939 21,19,15,643Stock in process 1,66,29,958 1,32,13,982

Total 21,71,22,897 22,51,29,625Decrease/(Increase) in inventory of finished goods and work in progress 80,06,728 (1,13,53,787)

NOTES

49


Details of inventory:(`̀̀̀̀)


Finished goodsClay products 17,36,44,938 14,65,22,404Starch and allied products 1,69,78,198 5,95,06,182By products and others 98,69,803 58,87,057

Total 20,04,92,939 21,19,15,643

Stock in processClay products 94,77,406 80,18,312Starch and allied products 66,98,567 51,19,340By products and others 4,53,985 76,330

Total 1,66,29,958 1,32,13,982

24 EMPLOYEE BENEFITS EXPENSE(`̀̀̀̀)


Salaries, wages and bonus 49,01,07,785 47,92,36,784Contribution to provident and other funds 2,28,15,151 2,36,73,432Gratuity expense (note a) 1,52,57,853 1,62,57,510Staff welfare expenses 3,07,51,040 3,02,05,030

Total 55,89,31,829 54,93,72,756

Notes:a) Net of amount recovered from related parties ` 70,407 (2015-16: ` 1,02,558 ).b) Employee benefit expenses includes research and development expenses (also refer note 42).

25 FINANCE COSTS(`̀̀̀̀)


Interest expense- On fixed period loans 6,32,54,131 6,34,56,309- Others (Note a) 4,93,67,466 6,80,09,700

Total 11,26,21,597 13,14,66,009

Notes :a. Includes ` 1,19,31,172 (2015-16: ` Nil) towards finance charges for the year on the site restoration cost provided

based on present value of future obligation on April 1, 2016.

NOTES

50


26 OTHER EXPENSES(`̀̀̀̀)


Manufacturing expensesStores consumed 6,13,38,490 6,03,21,811Power and fuel 75,52,19,898 75,94,33,821Repairs and maintenance- Plant and machinery 10,61,40,680 11,18,78,002- Factory buildings 1,94,90,371 1,56,57,355- Others 1,72,69,513 1,77,15,830Other manufacturing expenses 9,73,68,919 7,82,27,422Less : Amount adjusted against site restoration obligation (80,00,392) -Royalty 3,04,81,901 2,23,02,832(Decrease)/ Increase in excise duty on finished goods (26,41,214) 9,89,120

Total (A) 1,07,66,68,166 1,06,65,26,193

Administration expensesRent 3,83,16,929 3,74,89,785Rates and taxes 99,15,373 75,59,050Insurance 43,70,144 38,54,278Exchange fluctuation (net) 25,66,507 -Directors’ sitting fees 16,95,000 14,90,000Office and other expenses (note a) 7,98,92,550 9,90,24,431Payment to auditors (note 29) 49,15,000 47,99,448Travelling and conveyance 2,89,46,607 3,00,56,664Charity and donation 23,81,500 21,66,100Provisions for doubtful debts/advances 6,63,251 18,00,661Other financing charges 55,08,961 58,97,248Expenses / contribution towards CSR (note b) 54,58,135 60,59,536

Total (B) 18,46,29,957 20,01,97,201

Selling and distribution expensesPacking and forwarding expenses 13,42,93,844 13,30,45,452Commission to selling agents and others 1,60,90,147 1,29,92,722Rebates and discount 98,76,346 1,33,43,695Other selling expenses 3,91,32,652 3,79,98,507

Total (C) 19,93,92,989 19,73,80,376Total (A + B + C) 1,46,06,91,112 1,46,41,03,770

Note:a) Office and other expenses includes research and development expenses (note 41).b) As per Section 135 of the Companies Act, 2013, a CSR committee has been formed by the Company. The areas of CSR

activities are rain water harvesting, supply of water and promoting education to villagers. The funds were primarilyallocated and utilised for the activities which are specified in Schedule VII of the Companies Act, 2013. The amountrequired to be spent ` 71,65,563, against which an amount of ` 54,58,135 incurred during the year.

NOTES

51


Particulars Year ended March 31, 2017In Cash Yet to be paid in cash

(`̀̀̀̀) (`̀̀̀̀)

(i) Construction / acquisition of any asset - -(ii) On purposes other than (i) above 54,58,135 -

Total of (i) and (ii) 54,58,135 -

Particulars Year ended March 31, 2016In Cash Yet to be paid in cash

(`̀̀̀̀) (`̀̀̀̀)

(i) Construction / acquisition of any asset 8,13,947 -(ii) On purposes other than (i) above 60,59,536 -

Total of (i) and (ii) 68,73,483 -

27 EXCEPTIONAL ITEMSExceptional items relates to provisions made during the year relating to Entry Tax levied by the Government of Kerala onSpecial Kerosene Oil and paid under protest ` 1,51,33,588 (2015-16: ̀ Nil) is charged during the year in view of the orderof Hon’ble Supreme Court dated on November 11, 2016 authorising the State Government to charge Entry Tax.

28 EARNINGS PER SHARE(`̀̀̀̀)


a) Weighted average number of equity sharesNumber of equity shares at the beginning of the year 5,02,76,013 5,02,76,013Net profit after tax 26,89,12,938 27,38,52,836Less : Dividend on 11% cumulative redeemable preference shares 3,15,47,810 3,97,18,140(including tax)

Net profit after tax available to equity shareholders 23,73,65,128 23,41,34,696

b) Potential number of equity shares at the end of the yearTotal number of equity shares as per (a) above 5,02,76,013 5,02,76,013Potential dilutive shares 5,02,76,013 5,02,76,013

c) Net profit after tax available for potential equity shareholdersNet profit after tax available to equity shareholders 23,73,65,128 23,41,34,696

23,73,65,128 23,41,34,696

d) Basic EPS (`̀̀̀̀) 4.72 4.66

e) Diluted EPS (`̀̀̀̀) 4.72 4.66

f) Nominal value of equity share (`̀̀̀̀) 2 2

NOTES

52


29 AMOUNT PAID TO AUDITORS(`̀̀̀̀)


For audit 41,00,000 33,12,000For certification 2,95,000 8,00,000For expenses 5,20,000 6,87,448Total 49,15,000 47,99,448

30 EMPLOYEE BENEFITSDuring the year, the Company has recognised the following amounts in the Statement of Profit and Loss:

Defined contribution plans (`̀̀̀̀)Particulars Year ended Year ended

March 31, 2017 March 31, 2016

Employer’s contribution to provident fund * 2,28,15,151 2,36,48,439Employer’s contribution to superannuation fund * - 24,993Employer’s contribution to ESI** 13,08,536 6,29,848

* Included in contribution to provident and other funds** Included in welfare expenses

Defined benefit plansCompany has defined benefit plan in terms of gratuity.

a. The assumptions used to determine the gratuity benefit obligations are as follows: (`̀̀̀̀)Particulars Year ended Year ended

March 31, 2017 March 31, 2016

Discount rate 6.82% 7.81%Expected rate of increase in compensation levels 7.00% 7.00%Rate of return on plan assets 6.82% 7.81%

b. Reconciliation of opening and closing balances of benefit obligations: (`̀̀̀̀)Particulars Year ended Year ended

March 31, 2017 March 31, 2016

Projected benefit obligation at the beginning of the year 13,21,52,153 11,56,11,586Current service cost 76,10,457 68,93,213Interest cost 1,03,21,083 91,91,121Benefits paid (66,81,787) (76,24,366)Actuarial loss/ (gain) 64,31,875 80,80,599Projected benefit obligation at the end of the year 14,98,33,781 13,21,52,153

c. Reconciliation of fair value of assets: (`̀̀̀̀)Particulars Year ended Year ended

March 31, 2017 March 31, 2016

Fair value of plan assets at the beginning of the year 10,59,56,199 9,07,75,700Expected return on plan assets 82,75,179 72,16,668Contributions 1,50,00,000 1,50,00,000Benefits paid (66,81,787) (76,24,366)Actuarial (loss) / gain on plan assets 7,59,976 5,88,197Fair value of plan assets at the end of the year 12,33,09,567 10,59,56,199

NOTES

53


d. Gratuity expense recognised in the Statement of Profit and Loss: (`̀̀̀̀)Particulars Year ended Year ended

March 31, 2017 March 31, 2016

Current service cost 76,10,457 68,93,213Expected return on plan assets (82,75,179) (72,16,668)Interest cost 1,03,21,083 91,91,121Actuarial (gain) / loss 56,71,899 74,92,402Total (also refer note 24 (a)) 1,53,28,260 1,63,60,068

e. Amounts for the current and previous years are as follows:

Particulars 2016-17 2015-16 2014-15 2013-14 2012-13(`̀̀̀̀) (`̀̀̀̀) (`̀̀̀̀) (`̀̀̀̀) (`̀̀̀̀)

Defined benefit plan-GratuityDefined benefit obligation (14,98,33,781) (13,21,52,153) (11,56,11,586) (10,13,92,624) (9,40,14,821)Plan assets* 12,33,09,567 10,59,56,199 9,07,75,700 7,92,98,833 7,43,11,533Surplus / (deficit) (2,65,24,214) (2,61,95,954) (2,48,35,886) (2,20,93,791) (1,97,03,288)

Experience adjustment on plan liabilities (32,13,644) 24,71,852 15,61,650 1,45,26,067 12,24,358Experience adjustment on plan assets 7,59,976 5,88,197 5,76,964 (8,69,065) (12,37,482)

* Plan assets are maintained with insurance companies in debt and traditional funds.

31 LEASE COMMITMENTS:The Company has entered into leasing arrangements for office buildings and godown for storage of inventory that arecancellable at the option of the Company. Rent expense on account of cancellable leases for the year ended March 31,2017 amounts to ` 3,83,16,929 (2015-16 : ` 3,74,89,785).The Company has entered into leasing arrangements for Bangalore office on July 1, 2013 for the period of 9 years, out ofwhich the minimum commitment is for 5 years. There after the lease can be cancelled at the option of lessee.The details of lease commitments in terms of minimum lease payments within the non-cancellable period are as follows:

(`̀̀̀̀)Payments falling due: As at As at

March 31, 2017 March 31, 2016

Payable not later than 1 year 42,69,666 40,64,547Payable later than 1 year not later than five years 10,67,417 52,27,388

53,37,083 92,91,935

32 SEGMENT INFORMATIONA. Primary Segment reporting (by business segments)i. Composition of Business segments

The Company’s business segments are organised as under:a) Clay products: Segment manufactures and supplies the clay products to various industries like paper, paint,

rubber and fibreglass etc.,b) Starch products: Segment comprising starch/ speciality starch, syrups and modified starch, manufactures and

supplies the starch products to various industries like paper, textile, food and pharma etc.,

NOTES

54

Annual Report 2016-17NOTESPr

imar

y se

gmen

t(A

mou

nt in

`)

CLAY

STAR

CHTO

TAL

Part

icul

ars

Mar

ch 3

1, 2

017

Mar

ch 3

1, 2

016

Mar

ch 3

1, 2

017

Mar

ch 3

1, 2

016

Mar

ch 3

1, 2

017

Mar

ch 3

1, 2

016

-Se

gmen

t rev

enue

Gros

s sal

es to

ext

erna

l cus

tom

ers

2,92

,25,

62,6

462,

77,7

7,52

,082

2,02

,48,

13,7

041,

93,7

5,47

,470

4,94

,73,

76,3

504,

71,5

2,99

,552

Oth

er in

com

e73

,78,

517

42,3

8,16

352

,43,

526

31,1

1,91

41,

26,2

2,04

373

,50,

077

4,95

,99,

98,3

934,

72,2

6,49

,629

-Se

gmen

t res

ult (

Oper

atin

g pr

ofit)

49,4

1,60

,726

49,3

8,77

,175

5,99

,35,

786

7,87

,54,

342

55,4

0,96

,512

57,2

6,31

,517

Less

:Un

-allo

cate

d (in

com

e) /

expe

nses

1,44

,12,

708

1,70

,90,

758

Inte

rest

exp

ense

11,2

6,21

,597

13,1

4,66

,009

Exce

ptio

nal i

tem

s1,

51,3

3,58

8-

Inco

me

taxe

s (ne

t)14

,30,

15,6

8115

,02,

21,9

14Ne

t pro

fit a

s per

Sta

tem

ent o

f Pro

fit a

nd L

oss

26,8

9,12

,938

27,3

8,52

,836

-To

tal c

arry

ing

amou

nt o

f seg

men

t ass

et2,

53,0

8,68

,501

2,25

,41,

76,3

271,

16,1

9,06

,249

1,20

,33,

40,4

973,

69,2

7,74

,750

3,45

,75,

16,8

24Un

-allo

cate

d5,

17,2

1,66

14,

98,3

0,89

0

3,74

,44,

96,4

113,

50,7

3,47

,714

-Se

gmen

t lia

bilit

ies

48,6

0,12

,354

27,5

8,46

,314

16,4

7,95

,227

12,0

2,43

,036

65,0

8,07

,581

39,6

0,89

,350

Un-a

lloca

ted

1,15

,10,

47,5

301,

14,8

7,80

,832

1,80

,18,

55,1

111,

54,4

8,70

,182

-Ca

pita

l exp

endi

ture

dur

ing

the

year

#12

,06,

95,8

238,

15,3

8,48

82,

75,1

2,17

821

,50,

611

14,8

2,08

,001

8,36

,89,

099

Un-a

lloca

ted

86,7

0,45

88,

04,7

83

15,6

8,78

,459

8,44

,93,

882

-De

prec

iatio

n/Am

ortis

atio

n7,

71,6

1,11

87,

50,3

8,42

93,

78,0

6,38

33,

94,0

4,04

611

,49,

67,5

0111

,44,

42,4

75Un

-allo

cate

d50

,85,

861

77,2

4,42

9

12,0

0,53

,362

12,2

1,66

,904

# Do

es n

ot in

clude

s site

rest

orat

ion

prov

ision

of `

15,

54,4

6,05

6 cr

eate

d du

ring

the

year

pur

suan

t to

Acco

untin

g St

anda

rd (A

S) 2

9 - P

rovi

sions

, Con

tinge

nt Li

abili

ties

and

Cont

inge

nt A

sset

s and

Acc

ount

ing

Stan

dard

(AS)

10

- Pro

pert

y, Pl

ant &

Equ

ipm

ent.

B.Se

cond

ary

Segm

ent

(Am

ount

in `)

Indi

aO

utsid

e In

dia*

Tota

lPa

rtic

ular

sM

arch

31,

201

7M

arch

31,

201

6M

arch

31,

201

7M

arch

31,

201

6M

arch

31,

201

7M

arch

31,

201

6-

Reve

nue

4,44

,50,

31,0

134,

25,1

0,68

,040

50,2

3,45

,337

46,4

2,31

,513

4,94

,73,

76,3

504,

71,5

2,99

,553

-To

tal a

sset

s3,

67,7

0,19

,585

3,42

,85,

28,6

546,

74,7

6,84

27,

88,1

9,07

83,

74,4

4,96

,427

3,50

,73,

47,7

32-

Capi

tal e

xpen

ditu

re d

urin

g th

e ye

ar15

,68,

78,4

548,

44,9

3,88

3-

-15

,68,

78,4

548,

44,9

3,88

3*

Repr

esen

ts e

xpor

ts to

Japa

n, A

ustr

alia

, Uni

ted

King

dom

, Nep

al, B

angl

ades

h, E

gypt

, Ken

ya, M

aurit

ius,

U.A.

E, Ye

men

, Om

an, S

audi

Ara

bia,

Iran

, Jor

dan,

Bah

rain

, Sri

Lank

a, M

alay

sia, I

ndon

esia

, Tha

iland

, Phi

lippi

nes,

Turk

ey, G

erm

any,

Italy,

Gre

ece,

Kuw

ait,

Sing

apor

e, S

wed

en a

nd M

alta

.

55


33 Related party transactions

A. Holding CompanyDBH International Private Limited

B. AssociatesEnterprises which have significant influence over the Company:Karun Carpets Private Limited

C. Enterprises over which substantial shareholders of the Company and their relatives have significant influence:Greaves Cotton LimitedPremium Transmission LimitedPembrill Industrial & Engineering Co. LimitedGreaves Leasing Finance LimitedDee Greaves LimitedBharat Starch Products Private LimitedAravali Sports & Cultural FoundationDBH Consulting LimitedDBH Investments Pvt. LimitedGreaves Auto Limited

D. Firm in which directors are interested as director or partnerJ. Sagar Associates

E. Key management personnel and their relativesMr. Karan Thapar – ChairmanMs. Devika Thapar (Daughter of Mr. Karan Thapar)Mr. Karam Thapar (Son of Mr. Karan Thapar)Mr. B. M. Thapar (Father of Mr. Karan Thapar) (demised on September 12, 2016)Mr. Vijay Kishore Sharma - DirectorMr. Praveen Sachdev - Director (Upto June 15, 2015)Mr. J.K. Jain - Director (Upto June 15, 2015)Mr. T. Balakrishnan - DirectorMr. Vijay Dilbagh Rai - DirectorMs. Shivpriya Nanda - DirectorMr. Joy Kumar Jain - DirectorDr. Venkatesh Padmanabhan -Managing Director and Chief Executive Officer (Upto September 30, 2015)Mr. Suresh Kumar Jain -Executive Director (from November 06, 2015)Mr. Mahendra Kumar Gupta - Chief Financial OfficerMr. P. S. Saini (demised on April 11, 2016)Ms. Shalini Chawla - Company Secretary (from November 2, 2016)

NOTES

56

Annual Report 2016-17NOTESa)

Tran

sact

ions

with

rela

ted

part

ies

(Am

ount

in `̀̀̀̀

)Pa

rticu

lars

Hold

ing

Com

pany

Ente

rpris

e w

hich

has

Ente

rpris

es o

ver w

hich

Key

man

agem

ent

Tota

lsig

nific

ant i

nflu

ence

ove

rsu

bsta

ntia

l sha

reho

lder

spe

rson

nel

the

com

pany

and

thei

r rel

ativ

es h

ave

and

thei

r rel

ativ

essig

nific

ant

influ

ence

2016

-17

2015

-16

2016

-17

2015

-16

2016

-17

2015

-16

2016

-17

2015

-16

2016

-17

2015

-16

Purc

hase

of g

oods

Prem

ium

Tra

nsm

issio

n Lim

ited

--

--

40,6

0562

,748

--

40,6

0562

,748

Purc

hase

of c

apita

l goo

dsDB

H In

tern

atio

nal P

rivat

e Lim

ited

1,60

,000

--

--

--

-1,

60,0

00-

Reim

burs

emen

t of e

xpen

ses

Prem

ium

Tra

nsm

issio

n Lim

ited

--

--

96,4

8,93

71,

16,5

9,44

9-

-96

,48,

937

1,16

,59,

449

Bhar

at S

tarc

h Pr

oduc

ts P

rivat

e Lim

ited

--

--

7,78

87,

090

--

7,78

87,

090

Karu

n Ca

rpet

s Priv

ate

Limite

d-

-23

,494

22,6

88-

--

-23

,494

22,6

88DB

H In

tern

atio

nal P

rivat

e Lim

ited

30,3

611,

47,5

70-

--

--

-30

,361

1,47

,570

Rece

ivin

g of

serv

ices

DBH

Cons

ultin

g Lim

ited

--

--

--

20,5

9,66

623

,85,

115

20,5

9,66

623

,85,

115

Rent

pai

dBh

arat

Sta

rch

Prod

ucts

Priv

ate

Limite

d-

--

-20

,68,

500

20,5

0,08

0-

-20

,68,

500

20,5

0,08

0Di

vide

nd p

aid

on p

refe

renc

e sh

ares

DBH

Inte

rnat

iona

l Priv

ate

Limite

d3,

17,1

1,64

43,

30,0

0,00

0-

--

--

-3,

17,1

1,64

43,

30,0

0,00

0Re

dem

ptio

n of

pre

fere

nce

shar

e ca

pita

lDB

H In

tern

atio

nal P

rivat

e Lim

ited

20,0

0,00

,000

--

--

--

-20

,00,

00,0

00-

Divi

dend

pai

d on

equ

ity sh

ares

DBH

Inte

rnat

iona

l Priv

ate

Limite

d4,

89,6

9,77

44,

87,7

9,31

6-

--

--

-4,

89,6

9,77

44,

87,7

9,31

6Ka

run

Carp

ets P

rivat

e Lim

ited

--

2,00

,99,

063

2,00

,99,

063

--

--

2,00

,99,

063

2,00

,99,

063

Dire

ctor

’s co

mm

issio

nM

r. Ka

ran

Thap

ar-

--

--

-25

,69,

250

22,3

7,01

225

,69,

250

22,3

7,01

2M

r. Vi

jay

Kish

ore

Shar

ma

--

--

--

3,54

,380

7,45

,670

3,54

,380

7,45

,670

Mr.

T. B

alak

rishn

an-

--

--

-3,

54,3

803,

72,8

353,

54,3

803,

72,8

35M

r. Vi

jay

Dilb

agh

Rai

--

--

--

4,42

,975

3,72

,835

4,42

,975

3,72

,835

Ms.

Shiv

priya

Nan

da-

--

--

-3,

54,3

803,

72,8

353,

54,3

803,

72,8

35M

r. Jo

y Ku

mar

Jain

--

--

--

3,54

,380

3,72

,835

3,54

,380

3,72

,835

Dire

ctor

’s sit

ting

fees

Mr.

Kara

n Th

apar

--

--

--

2,95

,000

2,20

,000

2,95

,000

2,20

,000

Mr.

Vija

y Ki

shor

e Sh

arm

a-

--

--

-3,

60,0

002,

80,0

003,

60,0

002,

80,0

00M

r. T.

Bal

akris

hnan

--

--

--

1,90

,000

2,20

,000

1,90

,000

2,20

,000

Mr.

Vija

y Di

lbag

h Ra

i-

--

--

-3,

35,0

002,

70,0

003,

35,0

002,

70,0

00M

s. Sh

ivpr

iya N

anda

--

--

--

2,30

,000

2,00

,000

2,30

,000

2,00

,000

Mr.

Joy

Kum

ar Ja

in-

--

--

-2,

85,0

002,

00,0

002,

85,0

002,

00,0

00M

r. Pr

avee

n Sa

chde

v-

--

--

--

50,0

00-

50,0

00M

r. J.K

. Jai

n-

--

--

--

50,0

00-

50,0

00Re

mun

erat

ion

Mr.

Sure

sh K

umar

Jain

--

--

--

97,4

3,80

422

,53,

718

97,4

3,80

422

,53,

718

Dr. V

enka

tesh

Pad

man

abha

n-

--

--

--

1,07

,31,

413

-1,

07,3

1,41

3M

r. M

ahen

dra

Kum

ar G

upta

--

--

--

64,5

3,47

853

,80,

633

64,5

3,47

853

,80,

633

Mr.

P.S. S

aini

--

--

--

2,78

,415

45,0

6,19

62,

78,4

1545

,06,

196

Mrs

. Sha

lini C

haw

la-

--

--

-9,

04,1

42-

9,04

,142

-Ot

her e

xpen

ses

Arav

ali S

ports

& C

ultu

ral F

ound

atio

n-

--

-10

,00,

000

10,0

0,00

0-

-10

,00,

000

10,0

0,00

0

57


b) Outstanding balances: (`̀̀̀̀)Particulars As at As at

March 31, 2017 March 31, 2016

1. Enterprises over which substantial shareholders and theirrelatives have significant influenceBharat Starch Products Private Limited 2,00,000 2,00,000

Note:Figures in parenthesis denote credit balances.

34 DETAILS OF RAW MATERIAL AND COMPONENTS CONSUMED(`̀̀̀̀)


Clay matrix (note a) 19,11,46,490 14,23,76,298Maize 1,13,57,01,731 1,10,55,52,889Maize starch 6,92,17,654 6,09,92,564Tapioca starch 53,40,789 14,48,927Others (note b) 66,19,75,588 58,14,76,582Total 2,06,33,82,252 1,89,18,47,260

Note:a) Clay matrix cost is inclusive of clay mining expenses.b) Others includes chemicals, packing materials and etc.

35 VALUE OF IMPORTS ON C.I.F BASIS :(`̀̀̀̀)


Raw material 13,20,43,300 10,84,56,138Stores and spare parts 9,72,556 10,74,072Capital goods 39,65,692 1,86,272Total 13,69,81,548 10,97,16,482

36 EARNINGS IN FOREIGN EXCHANGE CALCULATED ON F.O.B. BASIS:(`̀̀̀̀)


Export of : Clay products 33,21,70,971 29,43,37,156Starch and allied products 17,01,74,366 16,98,94,357

Total 50,23,45,337 46,42,31,513

NOTES

58


37 EXPENDITURE IN FOREIGN CURRENCY(`̀̀̀̀)


Commission 37,99,684 35,07,430Travelling 10,69,007 8,00,958Consultancy 20,59,666 45,89,560Interest 34,56,085 38,77,184Salaries - 37,16,111Others 4,62,777 13,54,222Total 1,08,47,219 1,78,45,465

38.1 PARTICULARS OF UNHEDGED FOREIGN CURRENCY EXPOSURE:Particulars As at March 31, 2017 As at March 31, 2016

Amount(US$) Amount(`̀̀̀̀) Amount(US$) Amount(`̀̀̀̀)

- Sundry debtors 4,43,977 2,83,79,010 4,75,438 3,10,98,400- Sundry creditors (46,411) (30,51,041) (34,033) (22,88,039)- Foreign currency loans (7,65,000) (5,02,91,100) (10,20,000) (6,85,74,600)

Total (3,67,434) (2,49,63,131) (5,78,595) (3,97,64,239)

38.2 PARTICULARS OF HEDGED FOREIGN CURRENCY EXPOSURE:Particulars As at March 31, 2017 As at March 31, 2016

Amount(US$) Amount(`̀̀̀̀) Amount(US$) Amount(`̀̀̀̀)

- Forward contracts against sundry debtors 6,00,000 3,83,52,000 6,00,000 3,92,46,000Total 6,00,000 3,83,52,000 6,00,000 3,92,46,000

39 INDIGENOUS AND IMPORTED CONSUMPTION:Particulars Indigenous Imported Total

Value Value ValueAmount (`̀̀̀̀) % Amount (`̀̀̀̀) % Amount (`̀̀̀̀)

Raw material(s)2016-17 1,88,03,50,713 91.13% 18,30,31,539 8.87% 2,06,33,82,2522015-16 1,76,33,62,100 93.21% 12,84,85,160 6.79% 1,89,18,47,260

Consumables2016-17 6,04,09,047 98.48% 9,29,443 1.52% 6,13,38,4902015-16 5,94,51,153 98.56% 8,70,658 1.44% 6,03,21,811

40.1 CONTINGENT LIABILITIES(`̀̀̀̀)


a) Entry tax levied by the Government of Kerala on Special Kerosene - 1,51,33,588Oil (SKO), pending before Hon’ble Supreme Court of India againstwhich an amount of ` 1,51,33,588 (March 31, 2015 ` 1,51,33,588)deposited under protest and the same was provided in books duringthe year 2016-17 [Refer note 40.3(ii)].

NOTES

59


40.2 COMMITMENTSEstimated amounts of contracts remaining to be executed on capital account (net of advances) ` 49,00,641 (March 31,2016 : ` 1,17,13,713).

40.3 LITIGATIONi) Excise matters:

a) Demands aggregating to ` 10,73,69,735 for the year 2000 to 2004 with respect to using of lubricating oiland transformer oil in the plant and machinery used for manufacture of excisable and as well as exemptedgoods and cenvat credit of service tax, which was subsequently quashed by the Central Excise and ServiceTax Appellate Tribunal (CESTAT), referring the matter back for fresh assessment. The Commissioner, CentralExcise, Panchkula instead of fresh adjudication, went into appeal before the Hon’ble High Court atChandigarh which was dismissed by the Hon’ble High Court. The Commissioner, Panchkula filed a SpecialLeave Petition before the Hon’ble Supreme Court of India, where the matter is pending for adjudication.Consequently amount deposited under protest amounting to ` 12,41,379 have been considered goodand recoverable and no provision for the same has been considered necessary. Further, till the timedemands are received by the Company amounts of contingent liabilities, if any, is not ascertainable.

b) With respect to classification of maize starch for excise purposes, the Commissioner, Excise raised a demandof ` 6,11,10,974, which was set aside by CESTAT. The Commissioner filed an appeal before the Hon’bleSupreme Court of India against the order of CESTAT, where the matter is pending for adjudication.

ii) With respect of imposition of Entry Tax on SKO (Oil) imported at Thiruvananthapuram (Kerala). The writ petitionfiled by the Company before the Hon’ble Supreme Court of India, is pending for disposal. The above writ petitionwas filed challenging the validity of the Kerala (Tax on Entry of Goods into Local Areas) Act, 1994 (hereinafterreferred to as the Act). The Company has already deposited a sum of about ` 1,51,33,588 pursuant to the ShowCause Notice (SCN) served on the Company at that time. The Writ Petition (Civil) No. 66 of 2004 is now connectedto Civil Appeal No.3453 of 2002. The Company has provided for the amounts so deposited.

iii) Local Area Development Tax is the entry tax levied by the State Government of Haryana on the goods purchasedfrom other States. The Company has paid an amount of ̀ 32,16,190 under protest. The Company filed an Appealwith the Supreme Court of India which is pending for hearing by a Constitution Bench. The Civil Appeal No.8251of 2003 is now connected to Case No.3453 of 2002. The Company has provided for the amounts so deposited.

iv) With respect to a dispute of lease charges of ` 12,04,59,737 on the lease land at Veli, the Company approachedthe Hon’ble High Court of Kerala and the Hon'ble High Court has directed the Principal Secretary (Revenue) tomake fresh assessment in this matter. The Principal Secretary (Revenue) convened a meeting in March 2017 andheared our explanations and arguements. Final order from Principal Secretary (Revenue) is awaited.

40.4 SHOW CAUSE NOTICE ON CLASSIFICATION OF PRODUCTSThe Company had received a show cause notice on April 9, 2015 from Directorate General of Central Excise Intelligence(DGCEI) dated March 31, 2015 on mis classification of clay products for which the Company has represented and filedthe reply with the authority and a favourable order was passed by the Commissioner of Central Excise and CustomsTrivandrum. Subsequently, the department has filed an appeal against the order of Commissioner, which is pending forhearing.

41 RESEARCH AND DEVELOPMENT EXPENSES :(`̀̀̀̀)


Employee benefit expenses 97,08,052 1,66,04,504Office and other expenses 54,69,960 56,81,886

NOTES

60


42 JOINT VENTURE AGREEMENTThe Company had entered into a joint venture agreement with MAC Group Limited of Tanzania in FY 2014-15 for prospectingof mines and evaluation of proposed clay manufacturing facility in Tanzania (East Africa). Since, there was no commerciallyviable proposal worked out, the management decided to windup the Company for which application is already filed.

43 SPECIFIED BANK NOTES POST DEMONITISATIONHoldings and dealings in Specified Bank Notes (SBNs) during the period form November 8, 2016 to December 30, 2016

(`̀̀̀̀)Particulars SBNs Other denomination Total

notes / Coins

Closing cash in hand as on November 8, 2016 16,02,000 1,02,859 17,04,859(+) Permitted receipts - 34,68,205 34,68,205(-) Permitted payments - 18,69,170 18,69,170(-) Amount deposited in Banks 16,02,000 11,60,000 27,62,000

Closing cash in hand as on December 30, 2016 - 5,41,894 5,41,894

44 PREVIOUS YEAR FIGURESPrevious year figures have been re-grouped/reclassified, wherever necessary to conform the current year classification.





NOTES

-Veli Plant-Veli Plant-Veli Plant

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