EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018 Annual Report 2017-18.pdf · 2018. 9. 15. ·...
Transcript of EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018 Annual Report 2017-18.pdf · 2018. 9. 15. ·...
Board of Directors Mr. M. P. Purushothaman Chairman (Non-Executive)
Ms. Nisha Purushothaman Joint Managing Director
(upto March 15, 2018)
Mr. Shaji Purushothaman Managing Director
(from March 15, 2018)
Mr. R.Rangachari Independent Director
Mr. Suresh Raj Madhok Independent Director
Chief Financial Officer Mr.N.Chandrasekaran
Company Secretary & Mr. R. Venkatesh
Compliance Officer
Audit Committee Mr. R.Rangachari
Mr. Shaji Purushothaman
Mr. Suresh Raj Madhok
Stakeholders Mr. R.Rangachari
Relationship Committee Mr. Shaji Purushothaman
Mr. Suresh Raj Madhok
Nomination and Mr. Suresh Raj Madhok
Remuneration Committee Mr. M.P. Purushothaman
Mr. R.Rangachari
Corporate Social Mr. Suresh Raj Madhok
Responsibility Committee Mr. Shaji Purushothaman
Mr. R.Rangachari
Statutory Auditors Venkatesh & Co,
Chartered Accountants
Sri Ranga, 151, Mambalam High Road,
T. Nagar, Chennai - 600 017.
Bankers Andhra Bank
Union Bank of India
Registered Office Empee Tower, No. 59, Harris Road,
Pudupet, Chennai – 600 002.
Phone : 044 – 2853 1111
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EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Factories: IMFL : 1. Tamilnadu Unit :Mevaloorkuppam Village,
Sriperumpudur Taluk,
Kancheepuram District,
Tamil Nadu.
2. Kerala Unit :NIDA, Menonpara Road,
Kanjikode Post,
Palakkad District, Kerala.
3. Karnataka Unit :Arabikothanur Village,
Kolar District,
Karnataka.
4. Power Plant :Kottadivayal Village,
Aranthangi Taluk,
Pudukottai District, Tamil Nadu.
5. Grain Based Alcohol Plant :Choutkur Village, Pulkal Mandal,
Sangareddy Taluk,
Medak District, Telangana.
Important Communication to Members
The Ministry of Corporate Affairs has taken a “Green Initiative in the Corporate Governance” by allowing paperless
compliances by the companies and has issued circulars stating that service of notice / documents including
Annual Report can be sent by e-mail to its members. To support this green initiative of the Government, members
who have not registered their e-mail addresses so far, are requested to register their e-mail addresses in respect
of their holdings in demat form through their concerned Depository Participants. Members who hold shares in
physical form are requested to fill in and forward the e-mail address Registration Form given in this Annual Report
to M/s.Cameo Corporate Services Ltd, No.1, Subramaniam Building, Club House Road, Chennai – 600 002 (or) at
email: [email protected].
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Registrars and Cameo Corporate Services Ltd.,
Share Transfer Agents : No.1, Subramaniam Building,
Club House Road, Chennai – 600 002
Phone : 044-28460390; Email : [email protected]
Stock Exchanges where 1. National Stock Exchange of India Ltd, Mumbai.
the share are Listed : 2. Bombay Stock Exchange Limited, Mumbai.
Corporate Identity Number L15511TN1983PLC010313
Debenture Trustee IBDI Trusteeship Services Ltd., Mumbai
Cost Auditors M/s. G. Sugumar & Co., Cost Accountants, Chennai.
Website www.empeegroup.co.in
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
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INDEX Page Nos.
Notice to shareholders 5
Board’s Report 16
Management Discussion and Analysis Report 18
Corporate Governance Report 42
Auditors’ Report 52
Balance Sheet 61
Profit and Loss Account 63
Cash Flow Statement 64
Notes to Financial Statement 65
Auditors’ Report on Consolidated Financial Statement 86
Consolidated Balance Sheet 93
Consolidated Profit & Loss Account 95
Consolidated Cash Flow Statement 96
Notes to Consolidated Financial Statement 98
Attendance Slip and Proxy Form 113
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
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FINANCIALS AT A GLANCE
Particulars 2017-18 2016-17 2015-16 2013-15 2012-13
Sales 512.71 501.60 610.88 1256.44 997.89
Profit before Tax (44.88) (33.79) 3.37 (72.54) 39.39
Profit after Tax (76.69) (25.35) 1.72 (46.12) 22.80
Fixed Assets 307.80 166.59 178.57 239.72 104.13
Current Assets 185.27 180.71 172.56 189.92 138.57
Shareholders Funds 238.88 286.68 304.70 404.48 286.26
Current Liabilities 148.76 240.35 253.58 197.04 189.95
Basic Earnings Per Share (0.00038) (13.33) 0.91 (1.45) 5.83
Dividend per Share __ __ __ __ Rs 1/-
*Figures have been reclassified/regrouped wherever necessary.
Rs. in Crores
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
NOTICE TO SHARE HOLDERS
NOTICE is hereby given that the 33 rd Annual General Meeting of Empee Distilleries Limited
(CIN:L15511TN1983PLC010313) will be held on Thursday, the 27th September 2018 at 3.30 p.m. at Sri P Obul
Reddy Hall, Vani Mahal , T Nagar, Chennai – 600 017 , to transact the following business :
ORDINARY BUSINESS :
1. To receive, consider and adopt the :
(a) Audited Standalone Financial Statement of the Company for the Financial Year ended March 31, 2018,
and the reports of the Board of Directors and Auditors thereon.
(b) Audited Consolidated Financial Statement of the Company for the Financial Year ended March 31,2018
and the report of the Auditors thereon.
2. To appoint a Director in place of Mr.M P Purushothaman (DIN00088631) who retires by rotation and being
eligible, offers himself for re-appointment.
SPECIAL BUSINESS :
3. To consider and, if thought fit, to pass with or without modification(s), the following resolution as an Ordinaryresolution:
“RESOLVED THAT pursuant to the provisions of Section 149,152, 160 and all other applicable provisions,
if any, of the Companies Act, 2013 (“Act”) read with the Companies (Appointment and Qualification of
Directors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof, for the time being
in force Securities and Exchange Board of India (Listing Obligations And Disclosure Requirements)
Regulations, 2015, and any other applicable regulations and as approved and recommended by the
Nomination and Remuneration Committee of the Board, Mr. Shaji Purushothaman (DIN: 00044893), who
was appointed as an Additional Director by the Board of Directors pursuant to provisions of Section 161 of
the Companies Act, 2013 w.e.f. March 15, 2018 be and is hereby appointed as Director of the Company.
RESOLVED FURTHER THAT the Board of Directors of the Company be and are hereby authorised to do all
such acts, deeds and things and to take all such steps as may be necessary, proper or expedient to give
effect to this resolution.
4. To consider, and if thought fit, to pass, with or without modification(s), the following resolution as an SpecialResolution.
“RESOLVED THAT pursuant to the provisions of Sections 196, 197 and 203 read with Schedule V and
other applicable provisions, if any, of the Companies Act, 2013, The Companies (Appointment and Remuneration
of Managerial Personnel) Rules 2014 and other rules as may be applicable (including any statutory modification
or re-enactment thereof, for the time being in force) and pursuant to the Articles of Association of the
Company and subject to approval of the Central Government and other approvals, if so required, the consent
of members of the company be and is hereby accorded for the appointment of Mr. Shaji Purushothaman
(DIN: 00044893) as Managing Director of the Company for a period of three years commencing from
March 15, 2018 till March 14, 2021 on the terms and conditions as specified in the Explanatory Statement.
RESOLVED FURTHER THAT the Board of Directors of the Company be and are hereby authorised to do all
such acts, deeds and things and to take all such steps as may be necessary, proper or expedient to give
effect to this resolution.”
5. To consider and, if thought fit, to pass with or without modification(s), the following resolution as an OrdinaryResolution :
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EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
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“RESOLVED THAT pursuant to provisions of Section 148, and other applicable provisions of the Companies
Act, 2013 read with The Companies (Cost Records and Audit) Rules 2014 and The Companies (Audit and
Auditors) Rules 2014, approval of the company be and is hereby given, by way of ratification, for the
appointment of M/s G. Sugumar& Co., Cost Accountants, Chennai as Cost Auditor, as recommended by
the Audit Committee, to conduct Cost Audit of the cost records of the company, for the purpose of submission
of Cost Audit Report, for the Financial Years 2015-16, 2016-17 and 2017-18 in the place of Mr. N. Thiagarjan,
Cost Accountant, who has since submitted his resignation.
RESOLVED FURTHER THAT, as determined by the Audit Committee, remuneration payable to M/s G.
Sugumar & Co., Cost Accountants, Chennai, at Rs.50,000/- (Rupees fifty thousand only), plus out of pocket
expenses and applicable GST, for conducting cost audit of the cost records of the company for the purpose
of submission of Cost Audit Report, for each of the Financial Years 2015-16, 2016-17 and 2017-18, be and
is hereby ratified.
6. To consider and, if thought fit, to pass with or without modification(s), the following Resolution as an OrdinaryResolution:
RESOLVED THAT pursuant to provisions of Section 148, and other applicable provisions of the Companies
Act, 2013 read with The Companies (Cost Records and Audit) Rules 2014 and The Companies (Audit and
Auditors) Rules 2014, approval of the company be and is hereby given for the appointment of M/s G.Sugumar
& Co., Cost Accountants, Chennai to conduct Cost Audit of the cost records of the company for the purpose
of submission of Cost Audit Report, for the Financial Year 2018-19.
RESOLVED FURTHER THAT as recommended by the Audit Committee of the Board, M/s. G. Sugumar &
Co, Cost Accountants be paid a remuneration of Rs.50,000/- (Rupees fifty thousand only), plus out of
pocket expenses and applicable GST, for conducting cost audit of the cost records of the company for the
purpose of submission of Cost Audit Report, for the Financial Year 2018-19.
7. To consider and, if thought fit, to pass with or without modification(s), the following resolution as a SpecialResolution:
“RESOLVED THAT pursuant to the provisions of Section 188 read with Rule 15 of Companies (Meetings of
Board and its Powers) Rules, 2014, and all other applicable provisions if any of the Companies Act, 2013,
and Regulation 23 of the SEBI (LODR) Regulations, 2015 and any other applicable regulations, consent of
the members of the Company, be and is hereby accorded to enter into transactions for the financial
year 2018-19 as per details given below.
Business & Auxiliary Services – M/s.Empee Holdings Ltd 197.56
Rent payable for Head Office – M/s.Aruna Constructions 62.16
“RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to take
such steps as may be necessary for obtaining approvals, in relation to the above and to settle all matters
arising out of and incidental thereto, and to sign and execute all deeds, agreements, applications and
documents that may be required, on behalf of the Company and generally to do all acts, deeds, matters and
things that may be necessary, proper, expedient or incidental thereto for the purpose of giving effect to this
resolution.”
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Amount(Rs. in lakhs)
Particulars
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EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
“RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to
determine the actual sums to be involved in the proposed transaction from time to time within the overall
limits stated above and the terms and conditions related thereto and all other matters arising out of or
incidental to the proposed transaction.”
8. To consider and, if thought fit, to pass with or without modification(s), the following resolution as a SpecialResolution :
“RESOLVED THAT pursuant to provisions of Section 180, 185, 186, 188 and other applicable provisions,
if any, of the Companies Act, 2013 read with The Companies (Acceptance of Deposit) Rules 2014 and other
applicable Rules under the Companies Act, 2013, SEBI (LODR) Regulations 2015 (including any statutory
modification(s) or re-enactment thereof for the time being in force and subject to approval of the Central
Government, other statutory authorities and stakeholders, if so required, the consent of the Company be
and is hereby accorded to the Board of Directors of the Company (hereinafter referred to as “the Board”)
which term shall be deemed to include any Committee which the Board may constitute for this purpose or
any person(s) authorized by the Board for the conversion of existing Share Application Money of Rs.140.36
Crores (Rs One Hundred Forty Crores and Thirty Six Lakhs Only) in Empee Sugars & Chemicals Limited,
a listed subsidiary of the company, into Unsecured Loan.
RESOLVED FURTHER THAT for the purpose of giving effect to the above resolution , the Board be and is
hereby authorized to agree, make and accept all such term(s), condition(s), modification(s) and alteration(s)
as it may deem fit, and the Board is also hereby authorized to finalize and execute all agreements, documents
and writings and to do all acts, deeds and things in this connection as the Board in its absolute discretion
deem fit, without being required to seek any further consent or approval of the members or otherwise, to
give effect to the foregoing resolution.
By Order of the BoardFor Empee Distilleries Limited
Place : Chennai M.P. PurushothamanDate : 13.08.2018 Chairman
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EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
NOTES :
1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING IS ENTITLED TOAPPOINT A PROXY TO ATTEND AND VOTE ON A POLL ON HIS BEHALF AND THE PROXY NEED NOTBE A MEMBER OF THE COMPANY. THE PROXY FORM DULY COMPLETED AND STAMPED MUSTREACH THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN 48 HOURS BEFORECOMMENCEMENT OF THE MEETING.
2. A PERSON CAN ACT AS A PROXY ON BEHALF OF MEMBERS NOT EXCEEDING FIFTY AND HOLDING
IN THE AGGREGATE NOT MORE THAN TEN PERCENT OF THE TOTAL SHARE CAPITAL OF THE
COMPANY CARRYING VOTING RIGHTS. A MEMBER HOLDING MORE THAN TEN PERCENT, OF THE
TOTAL SHARE CAPITAL OF THE COMPANY CARRYING VOTING RIGHTS MAY APPOINT A SINGLE
PERSON AS PROXY AND SUCH PERSON SHALL NOT ACT AS PROXY FOR ANY OTHER PERSON OR
SHAREHOLDER.
3. Corporate Members intending to send their authorized representative to attend the Meeting are requested to
send to the Company a certified copy of the Board resolution authorizing their representative to attend and
vote on their behalf at the meeting.
4. The Register of members and share transfer books of the company will be closed from 21.9.2018 to 27.9.2018(Both days inclusive).
5. Members/proxies should bring the attendance slip duly filed along with copy of Annual report for attending
the meeting.
6. In case of joint holders attending the AGM, the member whose name appears as the first holder in the order
of names as per the Register of Members of the Company will be entitled to vote.
7. Members who hold shares in dematerialized form are requested to quote Depository Account number
(client ID No.) for recording of attendance at the AGM.
8. Members are requested to intimate changes if any, in their address to the Registrar and share transfer
Agents, M/s. Cameo Corporate Services Limited, “Subramanian Building”, V Floor, 1, Club House Road,
Chennai - 600 002.
9. The Company’s equity shares are listed on The National Stock Exchange of India Ltd.(NSE) and BSE
Limited (BSE) and the Company have paid listing fees up to date.
10. The Register of Directors and KMPs and their shareholding maintained under Section 170 of the Companies
Act will be available for inspection by the Members at the AGM.
11. The relevant details as required by Clause 36, of the SEBI’s (LODR), 2015 entered into with the Stock
Exchange, of Directors seeking appointment/re-appointment are provided in the annexure..
12. The unclaimed dividend amount of Rs.4,11,240/- pertaining to final dividend declared for the Financial Year
2009-10 has been transferred to Investor Education and Protection Fund (IEPF) on 16.10.2017.
13. In accordance with provisions of Section 108 of the Companies Act, 2013 read with the Companies
(Management and Administration) Rules, 2014 as amended till date and the SEBI’s (LODR), 2015, Company
is providing facility for voting by electronic means (remote e-voting) and the business may be transacted
through such voting. Further, the facility for voting through ballot or polling paper shall also be made available
at the venue of meeting and members attending the meeting who have not already cast their vote by
remote e-voting shall be able to exercise their right at the meeting. The Board of Directors has appointed
M/s. S. Dhanapal & Associates, Practising Company Secretaries, Chennai, as the Scrutinizer, for conducting
the e-voting process in a fair and transparent manner. The Company has engaged the services of Central
Depository Services (India) Limited (“CDSL”) to provide e-voting facilities enabling the members to cast their
vote in a secured manner. The e-voting facility will be available at the link www.evotingindia.com during
the voting period.
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EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
14. The members who have cast their vote by remote e-voting prior to the meeting may also attend the meetingbut shall not be entitled to cast their vote again.
15. The procedure and instructions for remote e-voting is furnished in this notice.
16. The Scrutinizer will submit his report to the Company after completion of the scrutiny and the results of theballot/ poll/ e-voting will be announced by the Company on its website – www.empeegroup.co.in within 48hours of the Annual General Meeting.
17. Members who have not registered their e-mail ID are requested to update the same with the Company, ifheld in physical form or to the Depository if held in Demat mode.
18. All documents referred to in the Notice and Explanatory Statement shall be open for inspection at theRegistered Office of the Company during normal working hours on all working days upto the date of AGM.
19. Explanatory Statement pursuant to Section 102 of the Companies Act, 2013, in respect of businesses to betransacted under item Nos. 3 to 8 of the Notice, is attached herewith.
20. The Route map for the venue of the AGM is annexed.
The instructions for shareholders voting electronically (remote e-voting) are as under :
(i) The remote e-voting period begins on 24.9.2018 and ends on 26.9.2018. During this period shareholders’of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off datewhich has been fixed as 20.9.2018, may cast their vote electronically. The e-voting module will bedisabled by CDSL thereafter
(ii) The shareholders should log on to the e-voting website www.evotingindia.com.
(iii) Click on Shareholders / Members
(iv) Now Enter your User ID
a. For CDSL: 16 digits beneficiary ID,
b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID,
c. Members holding shares in Physical Form should enter Folio Number registered with the Company.
(v) Next enter the Image Verification as displayed and Click on Login.
(vi) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted onan earlier voting of any company, then your existing password is to be used.
(vii) If you are a first time user follow the steps given below :
For Members holding shares in Demat Form and Physical Form
Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department (Applicable for both
demat shareholders as well as physical shareholders)
l Members who have not updated their PAN with the Company/Depository Participant are
requested to use the first two letters of their name and the 8 digits of the sequence number in
the PAN field.(Sequence number has been provided as Serial Number (SL NO.) in the Address
Label
l In case the sequence number is less than 8 digits enter the applicable number of 0’s before
the number after the first two characters of the name in CAPITAL letters. Eg. If your name is
Ramesh Kumar with sequence number 1 then enter RA00000001 in the PAN field.
Enter the Dividend Bank Details or Date of Birth (in dd/mm/yyyy format) as recorded in your
demat account or in the company recordsin order to login.
If both the details are not recorded with the depository or company please enter the member
id / folio number in the Dividend Bank details field as mentioned in instruction (iv)
Dividend
Bank
Details
OR Date
of Birth
(DOB
PAN
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EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
(viii) After entering these details appropriately, click on “SUBMIT” tab.
(ix) Members holding shares in physical form will then directly reach the Company selection screen.
However, members holding shares in demat form will now reach ‘Password Creation’ menu wherein
they are required to mandatorily enter their login password in the new password field. Kindly note that
this password is to be also used by the demat holders for voting for resolutions of any other company
on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is
strongly recommended not to share your password with any other person and take utmost care to
keep your password confidential.
(x) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions
contained in this Notice.
(xi) Click on the EVSN for the relevant <Company Name> on which you choose to vote.
(xii) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option
“YES/NO” for voting. Select the option YES or NO as desired. The option YES implies that you assent
to the Resolution and option NO implies that you dissent to the Resolution.
(xiii) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.
(xiv) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will
be displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on
“CANCEL” and accordingly modify your vote.
(xv) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.
(xvi) You can also take out print of the voting done by you by clicking on “Click here to print” option on the
Voting page.
(xvii) If Demat account holder has forgotten the changed login password then Enter the User ID and the
image verification code and click on Forgot Password& enter the details as prompted by the system.
(xviii) Shareholders can also cast their vote using CDSL’s mobile app m-Voting available for androidbased mobiles. The m-Voting app can be downloaded from Google Play Store. Apple andWindows phone users can download the app from the App Store and the Windows PhoneStore respectively. Please follow the instructions as prompted by the mobile app while votingon your mobile.
(xix) Note for Non – Individual Shareholders and Custodians
· l Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian are required
to log on to www.evotingindia.com and register themselves as Corporates.
l A scanned copy of the Registration Form bearing the stamp and sign of the entity should be
emailed to [email protected].
l ·After receiving the login details they have to create compliance user should be created using the
admin login and password. The Compliance user would be able to link the account(s) for which
they wish to vote on.
l ·The list of accounts should be mailed to [email protected] and on approval of the
accounts they would be able to cast their vote.
l A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in
favour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer
to verify the same.
(xix) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked
Questions (“FAQs”) and e-voting manual available at www.evotingindia.com, under help section
or write an email to [email protected].
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EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
General Instructions :
(i) Any person, who acquires shares of the Company and becomes member of the Company after dispatch
of the notice and holding shares as of the Cut Off date i.e.20.09.2018 may follow the same procedure
for e-Voting as mentioned above.
(ii) A person, whose name is recorded in the register of members or in the register of beneficial owners
maintained by the depositories as on the cut-off date only shall be entitled to avail the facility of remote
e-voting/voting at the AGM through ballot paper.
(iii) The Chairman shall, at the AGM, at the end of discussion on the resolutions on which voting is to be
held, allow voting with the assistance of scrutinizer, by use of “Ballot Paper” / “Polling Paper” for all
those members who are present at the AGM but have not cast their votes by availing the remote
e-voting facility.
(iv) The Scrutinizer shall after the conclusion of voting at the AGM, first count the votes cast at the meeting
and thereafter unblock the votes cast through remote e-voting in the presence of at least two witnesses
not in the employment of the Company and shall make, not later than 48 hours of the conclusion of the
AGM, a consolidated scrutinizer’s report of the total votes cast in favour or against, if any, to the
Chairman or a person authorized by him in writing, who shall countersign the same and declare the
result of the voting forthwith.
(v) The voting rights of the shareholders shall be in proportion to their share of the paid-up equity share
capital of the Company as on 20.09.2018.
(vi) The results declared along with the Scrutinizer’s Report shall be placed on the Company’s website
www.empeegroup.co.in and on the website of the CDSL e-voting within 48 hours of the passing of
the resolutions at the Annual General Meeting of the Company, and communicated to The National
Stock Exchange of India Limited and BSE Ltd.
Details of Director(s) seeking appointment / re-appointment at the Annual General Meeting :
Mr. M P Purushothaman, Chairman, aged 82 years, has over 50 years of experience in various line of
business like Distilleries, Sugar, Hotel, Power, Education and Property Development.
Directorships in the following Companies Member of any committee in any otherPublic Company
Empee Sugars and Chemicals Limited
South (India) Hotels Pvt Ltd
Empee International Hotels and Resorts Limited
Empee Power Company (India) Limited
Aruna Constructions (India) Limited
Empee Hotels Limited
Appollo Distilleries and Breweries Pvt Ltd
Aruna Exports Pvt Ltd
Empee Power and Infra Pvt Ltd.
EDL Properties Limited
Empee Hospitality Pvt Limited
EDL Marketing Pvt Ltd
N I L
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EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Details of Director(s) seeking appointment / re-appointment at the Annual General Meeting :
Mr Shaji Purushothaman, aged 44 years, has more than a decade of Management and Administration
experience in the IMFL industry. He holds a degree in Bachelor of Arts and also completed ‘A level‘ from
Oxford University, UK.
Directorships in the following Companies Member of any committee in any otherPublic Company
Empee International Hotels & Resorts Limited
Empee Holdings Limited
Empee Power Company (India) Ltd
Empee Hotels Limited
Aruna Constructions (India) Ltd
Empee Agro Farm Products Pvt Ltd
Empee Marine Products Pvt Ltd
Apollo Distilleries and Breweries Pvt Ltd
Apollo Wind Energy Pvt Ltd
Universal Spirits Pvt Ltd
Appolo Beers Pvt Ltd
N I L
Annexure to the NoticeExplanatory Statement under Section 102 of the Companies Act, 2013
Item No. 3
Mr. Shaji Purushothaman was appointed as an Additional Director of the Company with effect from 15th March,
2018, in accordance with the provisions of Section 161 of the Companies Act, 2013, read with the Articles of
Association of the Company. Pursuant to Section 161 of the Companies Act, 2013, the said Director holds office
only up to the date of the ensuing Annual General Meeting of the Company. Appointment of Mr. Shaji Purushothaman
as Director and also as MD has the approval of the Nomination and Remuneration Committee of the Board.
None of the Directors and Key Managerial Personnel of the Company and their relatives except Mr.Shaji
Purushothaman, being an appointee and Mr. M P Purushothaman, Chairman ( Father of MrShaji Purushothaman)
are concerned or interested, financial or otherwise, in the resolution.
Item No. 4
The Board of Directors of the Company, on the recommendation of the Nomination and Remuneration Committee,
approved the appointment of Mr. Shaji Purushothaman as the Managing Director of the company for a period of
3 years with effect from 15th March 2018.
Mr Shaji Purushothaman has more than a decade of Management and Administration experience in the IMFL
industry. He holds a degree in Bachelor of Arts and also completed ‘A level‘ from Oxford University, UK.
In terms of Section 196, 197, 203 read with Schedule V and other applicable provisions of the Companies Act
2013, approval of the Members, by way of a Special Resolution, is required for the appointment of Mr. Shaji
Purushothaman as the Managing Director of the company.
Terms & Conditions
1. Period of Appointment: Three Years with effect from 15.3.2018
2. Remuneration : Nil
(Since Mr. Shaji Purushothaman, is already holding the position of Managing Director in Appollo Distilleries
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EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
and Breweries Private Limited (ADL) , which is a subsidiary of the Company, and drawing remuneration
from ADL, no remuneration is payable to him for the position of Managing Director in the Company).
GENERAL INFORMATION
Nature of Industry
Date or expected date of commencement of
Commercial Production
In case of new Companies , expected date of
commencement of activities as per project
approved by financial institutions appearing in the
prospectus.
Financial Performance based on given indicators
Foreign Investment or collaborations , if any
Distillery
15.9.1983
N A
Pls refer the Financial Statements attached
N A
Information about the appointee :
More than a decade of experience in
Management and Administration.
N A
N A
He has more than a decade of experience in
management and Administration in IMFL
industry , which will benefit the Company.
N A
N A
Pecuniary relationship – NIL
Son of Mr M P Purushothaman - Chairman
Background Details
Past Remuneration
Recognition or awards
Job Profile and his suitability
Remuneration Proposed
Comparative remuneration profile with respect to
industry , size of the Company , profile of the
position and person (in case of expatriates the
relevant details would be with respect to the
country of his origin)
Pecuniary relationship directly or indirectly with
the company or relationship with managerial
personnel , If any.
Other Information :
Reason of loss or inadequate profits
Steps taken or proposed to be taken for
improvement
Expected increase in productivity and profits in
measurable terms.
N A
The Board recommends the resolution set forth in Item No.4 for the approval of the Members.
None of the Directors and Key Managerial Personnel of the Company and their relatives except Mr.Shaji
Purushothaman, being an appointee and Mr. M P Purushothaman, Chairman ( Father of Mr Shaji Purushothaman)
are concerned or interested, financial or otherwise, in the resolution.
14
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Item No. 5
In terms of Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Rules
2014 and The Companies (Audit and Auditors) Rules 2014, maintenance of Cost Records as well as submission
of Cost Audit Report is applicable to the Company. Accordingly, the Board, on the recommendation of the Audit
Committee, appointed Mr. N. Thiagarajan, Cost Accountant, to conduct audit of the cost records of the company
for the purpose of submission of Cost Audit Report for the Financial Years 2015-16, 2016-17 and 2017-18 and
also fixed the remuneration payable to him. The Company had also taken approval of the shareholders at the
Annual General Meeting for the appointment and payment of remuneration to Mr.N. Thiagarajan, Cost Auditor.
However, Mr. Thiagarajan, Cost Auditor appointed by the company, citing personal reasons had expressed his
inability to conduct Cost Audit and furnish Cost Audit Report for the Financial Years 2015-16, 2016-17 and 2017-
18 and consequently the company has to appoint another person in his place.
Accordingly, the Board, on the recommendation of the Audit Committee, appointed M/s G. Sugumar& Co, Cost
Accountants, as Cost Auditor for the Financial Years 2015-16, 2016-17 and 2017-18 and fixed their remuneration
at Rs.50,000 (Rupees fifty thousand only), plus out of pocket expenses and applicable GST, for each of the said
financial years.
The Board of Directors recommends the Ordinary Resolution for approval by the Members.
None of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or
interested, financial or otherwise, in the resolution.
Item No. 6
In terms of Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Rules
2014 and The Companies (Audit and Auditors) Rules 2014, maintenance of Cost Records as well as submission
of Cost Audit Report is applicable to the Company.
Accordingly, It is now proposed to reappoint M/s G. Sugumar& Co, Cost Accountants, as Cost Auditor for the
Financial Year 2018-19 . The Audit Committee of the Board had earlier considered and approved the appointment
of M/s G. Sugumar& Co, Cost Accountants, as Cost Auditor and also fixed his remuneration at Rs.50,000/-p.a
plus out of pocket expenses and applicable GST.
The Board recommends the ordinary resolution for approval of the members.
None of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or
interested, financial or otherwise, in the resolution.
Item No. 7
The Company proposes to enter into transactions with the related parties in the financial year 2018-19 mentioned
in the resolution which requires the approval of the shareholders by means of a special resolution. The details
regarding the transaction as required under the Act are given below :
Name of the related parties 1. Empee Holdings Ltd
2. M/s. Aruna Constructions
Name of the Director or Key Managerial Mr. M.P. Purushothaman
Personnel who is related, if any Ms. Nisha Purushothaman
Nature of Relationship Director / Partner
Nature, Material Terms, Monetary Value and Business & Auxiliary Services : Rs.197.56 lakhs
Particulars of the Contract or arrangement Head Office Rent : Rs. 62.16 lakhs
Duration of Contract or arrangement 1. Business auxiliary services yearly basis on
actual as per agreement.
2. Rent forHead Office as per agreement.
15
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
The Directors/KMPs of the respective companies as mentioned above are concerned / interested in the resolution
being Directors/KMPs and/or shareholders to the extent of their shareholding in the company.
The Directors recommend the resolution as set out in the Notice for the approval by the members as a Special
Resolution.
ITEM NO. 8
The Company (EDL) paid share application money of Rs.140.36 crs to Empee Sugars and Chemicals Ltd
(ESCL), the subsidiary company from 7th July 2008 to 30th September 2012. ESCL had to allot 0% convertible
preference shares to EDL and the Company was informed by ESCL that BSE and SEBI approvals could not be
obtained for allotment of shares, and hence the share application money is kept pending. In the meantime
due to erosion of the entire net worth of ESCL, it was registered as a Sick Company under the provisions of
SICA with BIFR vide its Orders dated 18.11.2014. When BIFR proceedings were in progress, the GOI
abolished SICA and introduced IBC in its place in December 2016 and as a result the BIFR was abolished.
Hence ESCL filed an application under the provisions of IBC before NCLT, Hyderabad as a corporate debtor.
Further It was communicated to the Company that since most of the Bank loans aggregating to 92% of their
total bank borrowings are assigned to ARC, Edelweiss Asset Reconstruction Company Ltd, Mumbai,(EARC) the
Company thought it appropriate to withdraw the IBC application. However the share application is still pending in
the books of ESCL to be converted into shares. It was informed to the Company that due to serious financial
issues and impending problems challenging the ESCL’s survival, ESCL has decided to convert the said application
money into unsecured loan subject to approval of EDL. The Board at its meeting held on 30th May 2018 decided
to agree for the ESCL’s proposal to convert the share application money into unsecured loan. Hence the Company
(EDL) as abundant caution, will secure the shareholders’ approval for conversion of the share application money
into unsecured loan in the forthcoming AGM.
ESCL, the listed subsidiary of the company, which is primarily required to take the approval of the shareholders
for conversion of Share Application Money of Rs.140.36 Crores brought in by Empee Distilleries Limited (the
holding company - Promoters) and which is taking necessary action in this regard,
The Board recommends the Special resolution for approval of the members.
Except to the extent of shareholding held by them in their individual capacity, none of the Directors and Key
Managerial Personnel of the Company and their relatives are concerned or interested, financial or otherwise, in
the resolution.
By order of the BoardFor Empee Distilleries Limited
Place: Chennai M.P. PurushothamanDate : 13.08.2018 Chairman
16
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
BOARD’S REPORT
Your Directors have pleasure in presenting the Board’s Report together with the audited Accounts for the year
ended 31st March 2018.
FINANCIAL RESULTS (Rs.in lacs)
Particulars 2017-18 2016-17
(For the Year ended (For the period ended
31.03.2018) 31.03.2017)
Total Income 51271.47 50160.47
Operating Profit before Interest and Depreciation (926.21) 1477.06
Less : Interest 2824.74 2805.82
Depreciation 736.77 275.42
Profit before exceptional item and tax (4423.05) (1604.18)
Other Comprehensive Income (64.67) -
Extra-ordinary items (loss on sale of Investments) - -
Profit /Loss before Tax (4487.72) (1604.18)
Provision for Taxation - -
Provision for Defferred Tax 3182.11 3546.41
Earlier Tax provision reversed - -
Exceptional Item - 2769.00
Profit / Loss After Tax (7669.83) (5150.59)
Profit brought forward (7669.83) (5150.59)
Add : Prior period income - Depreciation - -
Transfer of profit to General Reserve - -
Proposed Dividend - -
Dividend tax on proposed dividend - -
Profit carried forward (7669.83) (5150.59)
PERFORMANCE REVIEW :
Financial and Operational related performance
During the year under review, your Company registered a total income of Rs.512.71 Crs and incurred a loss of
Rs 76.69 Crs , as against the total income of Rs.501.60 crs and a loss of Rs.51.50 crs for the year ended 31st
March 2017.
IMFL Division :
IMFL units at Mevalurkuppam, Palghat and Kolar registered a net turnover of Rs. 506.44 Cr and resulted in a net
operating loss of Rs 36.06 Cr during FY 2017-18 as compared to a turnover of Rs. 476.12 crs and Rs 7.22crs. of
loss in the last financial year (2016-17)
In Kerala, Vasco and Chevalier have high potential for growth.
Kolar : Your company is focusing on increase in exports to Dubai and Mahe with total focus on premium brands
only.
17
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Power Division :
The revenue from the Power Division was Nil with a loss of Rs.0.43 Cr during the financial year under review
as against the revenue of Rs 376.30 lakhs and net profit of Rs 74.36 lakhs during the previous financial
period 2016-17
Grain Based Alcohol Unit :
During the year 2017-18 the 60 KLPD Grain Based Alcohol unit at Chotkur, Andhra Pradesh earned a revenue
of Rs 5.06 Cr with a net operating loss of Rs 3.18 Cr as against a revenue of Rs 21.72 crs and a net loss of Rs
27.31 crs in the previous financial year.
Current State of Affairs
The performance of the company for the year under review continue to be impacted, similar to previous financial
year, due to closure of more than 3000 retail vending shops in TN and Kerala due to Supreme Court Orders,
increase in price of basic raw materials like ENA, Maize, non production of power from Aranthangi Unit due to
restrictive measures taken by Tamil Nadu Government.
The Company could not operate the IMFL Unit at Mevaloorkuppam, Tamil Nadu for close to two months during
the FY 2017-18 and for about four months for the FY 2018-19 due to cash flow issues arising out of TASMAC
withholding payment for the supplies made earlier on account of pending Sales Tax dispute with them and other
third parties.
While the turnover for the Financial Year ended 31.3.2018 is marginally higher than that of the previous financial
year, the company has not received any orders, from Tamilnadu State Marketing Corporation Limited (TASMAC)
for the past four months for the reasons stated above. Based on the submissions made by the Company, the
Supreme Court passed necessary orders for settlement of the sales tax dues in a staggered manner.
The grain based Distillery Unit at Chotkur, Telengana, which remained shut for close to three months during the
Financial Year 2017-18, due to pollution related issues, has resumed production.
Your Directors are taking all the required measures to maintain optimum production in all the units
Demand for Economy and Regular brands continue to remain buoyant. Company is also focusing on increasing
the sale volumes of its premium brands which provides for better margins and also exploring newer export
markets for its premium brands.
In Tamil Nadu sale of premium brands have surged to 15% and our own brands such as Chevalier and Carte
Royale are very popular and in good demand.
FUTURE OUTLOOK :
With rising income at all levels and social drinking on the rise , outlook for the liquor industry continue to remain
positive.
CHANGE IN THE NATURE OF BUSINESS, IF ANY :
There is no change in the nature of the business during the year.
DIVIDEND :
Due to losses for the FY 2017-18, the Board of Directors are unable to recommend any dividend for the financial
year ended 31.03.2018.
TRANSFER TO RESERVES :
Your Company does not propose to transfer amounts to the General Reserve due to losses incurred during the
year under review.
18
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
EQUITY SHARE CAPITAL
There is no change in the Authorised / Paid-up share capital of the company during the year under review.
DEPOSITS
Your Company has not accepted any deposits from the shareholders or from the public during the year under
review.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 :
The particulars of loans, guarantees and investments u/s 186 of the Companies Act, 2013 is annexed herewith as
Annexure-A.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYBETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT:
There are no material changes and commitments affecting the financial position of the company between the end
of the financial year and the date of the report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT :
The Management Discussion and Analysis Report is annexed herewith as Annexure–B.
DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVERESIGNED DURING THE YEAR :
Ms Nisha Purushothaman , Managing Director , has submitted her resignation on March 15, 2018 and the
same was accepted with immediate effect and Mr Shaji Purushothaman was appointed in her place w.e.f.
15th March 2018.
DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors of the Company have submitted a declaration u/s.149(7) of the Act that each of them
meets the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the
circumstances which may affect their status as Independent Director during their directorship.
NUMBER OF BOARD MEETINGS HELD DURING THE YEAR 2017-18:
The Company has duly complied with the provisions of the Companies Act, 2013 in holding Board meetings and
the details of the meetings are furnished in the Corporate Governance Report.
DETAILS OF POLICIES
(i) Nomination and Remuneration Policy
The Board has, on the recommendations of the Nomination & Remuneration Committee framed a policy for the
selection and appointment of Directors, Senior Management and their remuneration. The Company’s Nomination
and Remuneration Policy is available on the Company’s website www.empeegroup.co.in
(ii) Corporate Social Responsibility (CSR)
The Board has framed a CSR Policy and the same is available on the Company’s website www.empeegroup.co.in.
Due to absence of profits, the Company could not allocate funds for CSR activities.
(iii) Risk Management Policy
Business Risk Evaluation and Management is an ongoing process within the Organization. Pursuant to Section
134(3)(n) of the Companies Act , 2013 , the Board has framed a Risk Management Policy for the Company. The
Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business
19
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
objectives. Major risks identified by the business and functions are systematically addressed through mitigating
actions on a continuining basis.
At present the Company has not identified any element of risk which may threaten the business of the Company.ent
of risk which may threaten the business of the Company.
(iv) Whistle Blower Policy – Vigil Mechanism
Your Company has formulated a Vigil Mechanism Policy with a view to provide a mechanism for employees and
Directors of the Company to approach the Chairman of the Audit Committee to ensure adequate safeguards
against victimization. This policy would held to create an environment wherein the individuals feel free to secure
to raise an alarm, whenever any fraudulent activity takes place or is likely to take place. It will also ensure that
complainant(s) are protected from retribution , whether within or outside the organization. The Board has elected
Mr R Rangachari, who is the Chairman of the Audit Committee as the Ethics Counsellor under the Vigil Mechanism
Policy. The details of the vigil mechanism policy is displayed on our website www.empeegroup.co.in.
CORPORATE GOVERNANCE
The Statutory Auditors of the Company have examined the requirements of Corporate Governance with reference
to SEBI (LODR), 2015 and have certified the compliance as required under said regulations.
BOARD COMMITTEES
Name of the Committee Composition Details of Meetings held during the year 2017-18
Mr. R.Rangachari
Mr Suresh Raj Madhok
Ms.Nisha Purushothaman upto
March 15, 2018.
Mr Shaji Purushothaman
(from March 15,2018)
Mr Suresh Raj Madhok
Mr. R.Rangachari
Mr. M.P.Purushothaman
Mr Suresh Raj Madhok
Mr. R.Rangachari
Ms. Nisha Purushothaman upto
March 15, 2018.
Mr Shaji Purushothaman
(from March 15,2018)
Mr. R.Rangachari
Mr Suresh Raj Madhok
Ms. Nisha Purushothaman upto
March 15, 2018.
Mr Shaji Purushothaman
(from March 15,2018)
AUDIT COMMITTEE
NOMINATION &REMUNERATIONCOMMITTEE
CSR COMMITTEE
STAKEHOLDERS’RELATIONSHIPCOMMITTEE
29.5.2017, 21.8.2017, 09.09.2017,
15.11.2017, 14.12.2017, 12.2.2018
And 15.3.2018
29.5.2017, 21.8.2017,
14.12.2017, 15.3.2018
12.02.2018
29.5.2017, 09.09.2017,
14.12.2017, 12.2.2018
DETAILS OF RECOMMENDATIONS OF AUDIT COMMITTEE WHICH WERE NOT ACCEPTED BY THE BOARDALONG WITH REASONS
The same is not applicable as the Audit Committee’s recommendations were accepted and implemented by the
Board.
20
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURESOR ASSOCIATE COMPANIES DURING THE YEAR –
None of the Companies has ceased to be subsidiaries , joint ventures or associate companies during the year.
Subsidiaries
The Consolidated Accounts of the Company includes the audited accounts of subsidiaries namely EDL
Properties Ltd and M/s.Appollo Distilleries and Breweries Pvt Ltd. Audited Accounts of Empee Sugar and
Chemicals Ltd (ESCL) , the listed subsidiary of the Company , has not been taken into consolidation , as in
earlier years , for the reason that ESCL was referred to BIFR as a Sick Company , abolition of BIFR consequent
to introduction of IBC , application before NCLT , Hyderabad , under IBC and the subsequent withdrawal of
application before NCLT due to assignment of total bank borrowings to Edelweiss ARC, ESCL’s inability to allot
shares against the share application money provided by the Company or refund the money due to erosion of
networth , EDL’s efforts to bring down the shareholding in ESCL to less than 20% of the Paid-Up capital of the
ESCL , invocation of shares pledged by EDL with IFCI factors.
A statement containing salient features of the subsidiaries in Form AOC – 1 is annexed herewith marked as
Annexure- G and forms part of this report.
AUDITORS
a. Statutory Auditors
M/s. Venkatesh & Co, Chartered Accountants, who were appointed as Statutory Auditors for five years in terms
of Sec. 139, 141 of the Companies Act, 2013 shall hold office till the conclusion of the 34th AGM of the Company
to be held in the year 2019. The Companies Act , 2013 has been amended so as to dispense with the requirement
of ratification of appointment of Statutory Auditors at every subsequent AGM. Hence seeking approval of shareholdes
does not arise.
AUDITORS QUALIFICATIONS
A. Details of Audit Qualification :
The company Empee Distilleries Ltd (EDL) has made an investment of Rs.1.59 Crores as Equity Shares
and further investment by way of share application money of Rs.140.36 Crores to its subsidiary Empee
Sugars and Chemicals Limited. The Company Empee Sugars have been incurring losses. No Provision
for diminution in the value of investment in respect of the above company has been considered in the
accounts.
Reply :
The Company (EDL) paid share application money of Rs.140.36 crs to Empee Sugars and Chemicals
Ltd (ESCL), the subsidiary company from 7th July 2008 to 30th September 2012. ESCL had to allot 0%
convertible preference shares to EDL and the Company was informed by ESCL that BSE and SEBI
approvals could not be obtained for allotment of shares, and hence the share application money is kept
pending. In the meantime due to erosion of the entire net worth of ESCL, it was registered as a Sick
Company under the provisions of SICA with BIFR vide its Orders dated 18 11 2014. When BIFR proceedings
were at progress, the GOI abolished SICA and introduced IBC in its place in December 2016 and as a
result the BIFR was abolished. Hence ESCL filed an application under the provisions of IBC before NCLT,
Hyderabad as a corporate debtor. Further It was communicated to the Company that since most of the
Bank loans aggregating to 92% of their total bank borrowings are assigned to ARC, Edelweiss
Reconstruction Company Ltd, Mumbai, (EARC) the Company thought it appropriate to withdraw the IBC
application. However the share application is still pending in the books of ESCL to be converted into
shares. It was informed to the Company that due to serious financial issues and impending problems
challenging the ESCL’s survival, ESCL has decided to convert the said application money into unsecured
21
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
loan subject to approval of EDL. The Board at its meeting held on 30th May 2018 decided to agree for the
ESCL’s proposal to convert the share application money into unsecured loan. Hence the Company (EDL)
as abundant caution, will secure the shareholders’ approval for conversion of the share application money
into interest free unsecured loan in the forthcoming AGM.
Audit Qualification (Qualification 2) :
a. Details of Audit Qualification :
Other Advances amounting to Rs. 31.01 Crores out of 46.80 Crores under the head Current Financial
Assets, Sundry Debtors Rs.77.80 Crores and Loan and advances to related parties Rs. 26.22 Crores,
Other Long Term Liabilities Rs. 29.28 Crores and Trade Payable of Rs. 63.88 Crores and debit balances
of Suppliers account of Rs. 25.84 Crores are subject to confirmation and reconciliation. The impact on
profitability is not ascertainable.
Reply :
The reconciliation and confirmation in respect of above advances, and liabilities are in progress and will be
completed soon.
(i) Auditors’ Comments on (i) or (ii) above : Noted
b. Secretarial Auditors
As per provisions of Sec. 204 of the Companies Act, read with Rule 9 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules 2014, your Company appointed M/s. S Dhanapal & Associates,
a firm of Practising Company Secretaries, Chennai as Secretarial Auditors of the Company for the Financial
year ended 31.03.2018. The Secretarial Audit Report in Form No: MR 3 is attached as Annexure-H tothis report.
c. Cost Auditors
Pursuant to Sec. 148(3) of the Act, the Board of Directors had appointed M/s. G Sugumar & Co. (Reg.
No:102522) as Cost Auditors of the Company for conducting the audit of the Cost records of the
Company.
DETAILS IN RESPECT OF FRAUD REPORTED BY AUDITORS UNDER SECTION 143 OF THE ACT.
Not Applicable
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND.
The details of transfer of unclaimed dividend to Central Government is specifically mentioned in the Corporate
Governance Report.
AUDIT COMMITTEE
The Audit Committee consists of Mr R Rangachari as Chairperson , Mr Suresh Madhok and Mr Shaji
Purushothaman as members.
The Audit Committee meeting was held 29.5.2017 , 9.9.2017 , 14.12.2017 and 12.2.2018 during the year under
review.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee consists of Mr Suresh Madhok as Chairperson , Mr R Rangachari
and Mr M P Purushothaman as members. The Nomination and Remuneration Committee meeting was held on
29.5.2017 , 21.8.2017 , 14.12.2017 and 15.3.2018 during the year under review.
22
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATESOCIAL RESPONSIBILITY INITIVATIVES.
The Company does not meet any of the criteria specified in section 135(1) of the Companies Act , 2013 for the
purpose of constituting a Corporate Social Responsibility Committee and consequently the question of
developing and implementing a policy on Corporate Social Responsibility does not arise.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO
Information regarding conservation of Energy, Technology absorption and Foreign Exchange earnings and outgo
is given as Annexure -I and forms part of this Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES.
There were no materially significant transactions with Related Parties during the financial year under review,
which were in conflict with the interest of the Company. The details of Related Party Transactions during the year
ending 31.03.2018, being arm’s length transactions have been reported in the Financial statements and forms
part of this report as per Annexure - J.
MANAGERIAL REMUNERATION/ PARTICULARS OF EMPLOYEES
The details / particulars of employees/managerial persons remuneration as required to be given u/s 197 of the
Companies Act, 2013 read along with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial
personnel) Rules 2014 as applicable is attached herewith as Annexure-K.
DETAILS OF PECUNIARY RELATIONSHIP OR TRANSACTIONS OF THE NON-EXECUTIVE INDEPENDENTDIRECTORS VIS-À-VIS THE COMPANY
There is no pecuniary relationship or transactions of the Non-Executive Independent Directors vis-à-vis the Companyfor the year ended 31.3.2018.
BOARD’S EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Clause 17 of the SEBI ( LODR) , 2015 , the Board
has carried out the annual performance evaluation of its own performance, the Directors individually as well as
the evaluation of the working of its Audit, Nomination and Remuneration Committee.
While independent directors in their separate meeting have carried out to assess the performance of Chairman,
JMD and other Directors of the Board more particularly about their business acumen and contribution to the
Company, the performance evaluation of the Independent Directors was carried out by the entire Board.
The Independent Directors expressed their satisfaction with the evaluation process, functioning such as adequacy
of the composition of the Board and its Committees, Board culture, execution and performance of duties,
obligations, responsibilities and governance.
ADEQUACY OF INTERNAL FINANCIAL CONTROL SYSTEM
The Company has a proper and adequate internal control system to ensure that all assets are safeguarded and
protected against loss from unauthorized use or disposition and those transactions are authorised, recorded and
reported correctly.
The Internal Audit/Control is exercised through an external auditor namely, M/s.Ramesh Subramaniam & Co.,
Chartered Accountants, Chennai. The audit observations and corrective action taken thereon are periodically
reviewed by the audit committee to ensure effectiveness of the internal audit/control system.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going
concern status and company’s operations in future
23
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
EXTRACT OF ANNUAL RETURN
For details forming part of extract of Annual Return in form MGT-9 , kindly refer our website www.empeegroup.co.in
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITIONAND REDRESSAL) ACT, 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirements of
The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.
Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual
harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
The Company has not received any complaint on sexual harassment during the financial year ended 31.03.2018.
INDUSTRIAL RELATIONS
The Industrial relations continued to remain congenial during the year.
DIRECTORS’ RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that :
a. In the preparation of the annual accounts, the applicable accounting standards have been followed along with
proper explanation relating to material departures.
b. The directors have selected such accounting policies and applied them consistently and made judgments
and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year and of the profit or loss of the Company for the year under review.
c. The directors have taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities.
d. The directors have prepared the annual accounts on a going concern basis.
e. The directors had laid down internal financial controls to be followed by the company and that such internal
financial controls are adequate and were operating effectively.
f. The directors had devised proper system to ensure compliance with the provisions of all applicable laws and
that such system were adequate and operating effectively.
ACKNOWLEDGEMENT
Your Directors wish to express their gratitude for the continuous assistance and support extended by the Banks,
Financial Institutions, Customers and Government authorities and also to the shareholders for their confidence in
the management. Further, your Directors also place on record their deep sense of appreciation for the contributions
made by employees at all levels to the growth and success of the company.
For and on behalf of the Board of Directors
M.P. PurushothamanChairman
Place : ChennaiDate : 13.08.2018
24
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Annexure - A
LOANS, INVESTMENTS & GUARANTEES U/S. 186 OF THE COMPANIES ACT
The particulars of loans , guarantees and investments under section 186 of the Act read with Companies (Meetings
of Board and its Powers) Rules , 2014 for the financial year 2017-18 are given in Notes to financial statements.
Annexure - B
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
i. Industry Over view :
As per reliable sources, there has been a significant y-o-y growth in all segments of liquor. Low per capital
consumption of liquor in the country in a way augurs well for the growth of the industry. Excise and VAT being the
second largest revenue driver in every state, it is for the companies concerned to aggressively push for the sales
of their products.
Challenges in the form of regulations and restrictions are well known and the Liquor Industry in India has adapted
itself to cope with these challenges.
Entry of international brands has not made much of an impact on the domestic liquor companies.
ii. Segment–wise or product-wise performance :
During the year ended 31.03.2018, the Company produced 41,88,182 cases of IMFL as against the production
of 42,85,502 . The sales was 42,81,535 cases of IMFL for the year ended 31.03.2018 as against 34,07,827
cases sold in the previous period ended 31.03.2017 . Due to various uncontrollable difficulties (listed in the
Directors Report) the Production and Sales were low for the period ended 31/03/2018.
During the year under review, the power division at Aranthangi, Tamilnadu could not produce power due to imposition
of restrictive measures by TNEB.
iii. Financial performance and Outlook :
The financial performance and outlook is furnished in the Directors’ Report.
iv. Risks and concerns :
The liquor industry in India is highly Government regulated in terms of constraints on manufacturing, storage as
well as distribution, duties, inter-state movements from Tamilnadu etc. All these factors will affect the Company
in the coming years. The rising input cost of bottles, caps, labels, transport charges etc, will also impact the
profitability of the company.
v. Internal control systems and their adequacy :
The company has an internal control system commensurate with the size and business operations of the Company.
Authorization guidelines and internal procedures, are in place. Independent external/internal auditors are periodically
reviewing and making continuous assessment of the adequacy and effectiveness of the internal control and
systems. The Audit Committee and the Board review the findings of the Internal Auditors Report to enable the
Company to take immediate appropriate action wherever necessary.
Cautionary Statement :
Statements in the Management discussion and analysis report outlining the Company’s estimates, perceptions
and expectations may be forward looking statements within the meaning of applicable laws and regulations. The
Actual results may differ materially from those expressed hereinabove due to certain factors which may be
beyond the control of the Company.
25
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Annexure – C
Nomination and Remuneration Policy
INTRODUCTION
In pursuance of the Company’s policy to consider human resources as its invaluable assets, to pay equitable
remuneration to all Directors, key managerial personnel and employees of the company, to harmonize the
aspirations of human resources consistent with the goals of the company and in terms of the provisions of the
Companies Act, 2013 and the SEBI (LODR) Regulations (as amended from time to time), this policy on nomination
and remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management has been formulated
by the Nomination and Remuneration/Compensation Committee (“NRC”) and approved by the Board of Directors
of the Company.
CONSTITUTION OF COMMITTEE
The Board of Directors of the Company (the Board) constituted the committee to be known as the Nomination
and Remuneration Committee (NRC) consisting of three non-executive independent directors. The Chairman of
the Committee is an Independent Director.
OBJECTIVE
The Nomination and Remuneration/Compensation Committee and this Policy shall be in compliance with
Section 178 of the Companies Act, 2013. The objective of this policy is to lay down a framework in relation to
remuneration of directors, KMP, senior management personnel and other employees. The Key Objectives of the
Committee would be
l To guide the Board in relation to appointment and removal of Directors, Key Managerial Personnel and
Senior Management.
l Formulate the criteria for determining qualifications, positive attributes of a director and recommend to
the Board a policy relating to the remuneration of Directors, key managerial personnel and other
employees.
l To recommend to the Board on Remuneration payable to the Directors, Key Managerial Personnel and
Senior Management.
l To provide to Key Managerial Personnel and Senior Management reward linked directly to their effort,
performance, dedication and achievement relating to the Company’s operations.
l To retain, motivate and promote talent and to ensure long term sustainability of talented managerial
persons and create competitive advantage.
APPLICABILITY
l Directors (Executive and Non Executive)
l Key Managerial Personnel
l Senior Management Personnel
DEFINITIONS
“Act” means the Companies Act, 2013 and Rules framed there under, as amended from time to time.
“Board” means Board of Directors of the Company.
“Directors” mean Directors of the Company.
26
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
“Key Managerial Personnel” means
i. Managing Director, or Chief Executive Officer or Manager and in their
ii. absence, a Whole-time Director;
iii. Chief Financial Officer;
iv. Company Secretary; and
v. such other officer as may be prescribed.
“Senior Management” means Senior Management means the personnel of the company who are members of
its core management team excluding Board of Directors comprising all members of management one level below
the executive directors, including the functional heads.
Unless the context otherwise requires, words and expressions used in this policy and not defined herein but
defined in the Companies Act, 2013 as may be amended from time to time shall have the meaning respectively
assigned to them therein.
POLICY FOR APPOINTMENT AND REMOVAL OF DIRECTOR, KMP AND SENIOR MANAGEMENT
1. Appointment Criteria and Qualifications
a) The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the
person for appointment as Director, KMP or at Senior Management level and recommend to the Board
his / her appointment.
b) A person should possess adequate qualification, expertise and experience for the position he / she is
considered for appointment. The Committee has discretion to decide whether qualification, expertise and
experience possessed by a person is sufficient / satisfactory for the concerned position.
c) The Company shall not appoint or continue the employment of any person as Whole-time Director who has
attained the age of seventy years. Provided that the term of the person holding this position may be extended
beyond the age of seventy years with the approval of shareholders by passing a special resolution based on
the explanatory statement annexed to the notice for such motion indicating the justification for extension of
appointment beyond seventy years.
2. Term / Tenure
a) Managing Director / Whole-time Director :
The Company shall appoint or re-appoint any person as its Executive Chairman, Managing Director or Executive
Director for a term not exceeding five years at a time. No re-appointment shall be made earlier than one year
before the expiry of term.
b) Independent Director :
An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and
will be eligible for re-appointment on passing of a special resolution by the Company and disclosure of such
appointment in the Board’s report.
No Independent Director shall hold office for more than two consecutive terms of upto maximum of 5 years each,
but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become
an Independent Director.
Provided that an Independent Director shall not, during the said period of three years, be appointed in or be
associated with the Company in any other capacity, either directly or indirectly.
27
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
At the time of appointment of Independent Director it should be ensured that number of Boards on which such
Independent Director serves is restricted to seven listed companies as an Independent Director and three listed
companies as an Independent Director in case such person is serving as a Whole-time Director of a listed
company or such other number as may be prescribed under the Act.
The Committee shall carry out evaluation of performance of every Director, KMP and Senior Management Personnel
at regular interval (yearly).
3. Removal
Due to reasons for any disqualification mentioned in the Act or under any other applicable Act, rules and regulations
there under, the Committee may recommend, to the Board with reasons recorded in writing, removal of a Director,
KMP or Senior Management Personnel subject to the provisions and compliance of the said Act, rules and
regulations.
4. Retirement
The Director, KMP and Senior Management Personnel shall retire as per the applicable provisions of the Act and
the prevailing policy of the Company. The Board will have the discretion to retain the Director, KMP, Senior
Management Personnel in the same position/ remuneration or otherwise even after attaining the retirement age,
for the benefit of the Company.
POLICY FOR REMUNERATION TO DIRECTORS/KMP/SENIOR MANAGEMENT PERSONNEL
1. Remuneration to Managing/Whole-time / Executive / Managing Director, KMP and Senior ManagementPersonnel :
The Remuneration / Compensation/ Commission etc. to be paid to Director / Managing Director etc. shall be
governed as per provisions of the Companies Act, 2013 and rules made there under or any other enactment for
the time being in force.
2. Remuneration to Non- Executive / Independent Director :
The Non-Executive Independent Director may receive remuneration / compensation / commission as per the
provisions of Companies Act, 2013. The amount of sitting fees shall be subject to ceiling/ limits as provided under
Companies Act, 2013 and rules made there under or any other enactment for the time being in force.
DUTIES IN RELATION TO NOMINATION MATTERS
The duties of the Committee in relation to nomination matters include:
l Ensuring that there is an appropriate induction in place for new Directors and members of Senior
Management and reviewing its effectiveness;
l Ensuring that on appointment to the Board, Non-Executive Directors receive a formal letter of appointment
in accordance with the Guidelines provided under the Act;
l Identifying and recommending Directors who are to be put forward for retirement by rotation
l Determining the appropriate size, diversity and composition of the Board;
l Developing a succession plan for the Board and Senior Management and regularly reviewing the plan;
l Evaluating the performance of the Board members and Senior Management in the context of the
Company’s performance from business and compliance perspective;
l Making recommendations to the Board concerning any matters relating to the continuation in office of
any Director at any time including the suspension or termination of service of an Executive Director as
an employee of the Company subject to the provision of the law and their service contract.
28
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
l Delegating any of its powers to one or more of its members or the Secretary of the Committee;
l Recommend any necessary changes to the Board; and
l Considering any other matters, as may be requested by the Board.
DUTIES IN RELATION TO REMUNERATION MATTERS
The duties of the Committee in relation to remuneration matters include:
l Considering and determining the Remuneration Policy, based on the performance and also bearing in
mind that the remuneration is reasonable and sufficient to attract retain and motivate members of the
Board and such other factors as the Committee shall deem appropriate all elements of the remuneration
of the members of the Board.
l Approving the remuneration of the Senior Management including key managerial personnel of the
Company maintaining a balance between fixed and incentive pay reflecting short and long term
performance objectives appropriate to the working of the Company.
l Delegating any of its powers to one or more of its members or the Secretary of the Committee.
l Considering any other matters as may be requested by the Board.
REVIEW AND AMENDMENT
i) The NRC or the Board may review the Policy as and when it deems necessary.
ii) The NRC may issue the guidelines, procedures, formats, reporting mechanism and manual in supplement
and better implementation to this Policy, if it thinks necessary.
iii) This Policy may be amended or substituted by the NRC or by the Board as and when required and also by
the Compliance Officer where there is any statutory changes necessitating the change in the policy.
Annexure – D
CSR Policy
Our aim is – “to actively contribute to the social and economic development of the downtrodden communitiesand promote education among under privileged class. By doing so, we anticipate a sustainable way of life forthem.”
Implementation process :
The socio-economic development of the downtrodden people, ST/SC communities and their welfare are promotedthrough government sponsored projects. We are involved in the upliftment of social status of ST/SC peoplethrough contribution to the Charitable Trusts, State Governments for socio-economic development and relief fundfor the welfare of ST/SCs, other backward classes, minorities and women.
This apart, the focus areas that have emerged are Education and Infrastructure development for school childrenthus espousing social causes. The school projects are carried out under the aegis of Empee Educational andcharitable Trust (EET). EET is running a school called “National Matriculation Higher Secondary School over theyears for under privileged to impart quality education from Pre-KG till 12th Standard. This school has been inoperation since 1982 and had provided knowledge to thousand of students who have passed out successfullyover the years. EET has been carrying out a systematic improvement in the infrastructural facilities of theschool. It has identified certain key area where fresh infrastructure facilities are required to be provided :
1. Renovation of existing class rooms
2. Construction of additional class rooms
3. Updation of Computer lab
4. Furnishing of furniture and equipments
5. Updating the library facilities etc.
29
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
In Infrastructure Development we endeavour to contribute to the Government sponsored schemes such as :
1. Basic infrastructure facilities
2. Drinking water
3. Sanitation & hygiene etc.
Organisational mechanism :
The Empee Educational and Charitable Trust (Registered) provides the vision under the leadership of its ChairmanMr. M P Purushothaman. This vision underlines all CSR activities to promote education. The successful andtime bound implementation of the projects of promoting education and socio-economic development are dependenton quality education, students development and socio-economic development policies of Governments. TheChairman reviews the progress of such projects frequently and takes effective steps to further improve the CSRactivities.
Budgets
A specific budget is allocated for CSR activities.
Information dissemination
The Company’s engagement in this domain is disseminated on its website, annual reports.
Management Commitment
Our Board of Directors and the Management subscribe to the philosophy of compassionate care. We believeand act on an ethos of generosity and compassion, characterised by a willingness to build a society which isvital for socio-economic development.
Our Corporate Social Responsibility policy conforms to the Corporate Social Responsibility Guidelines issuedby the Ministry of Corporate Affairs, Government of India.
Annexure – E
ANNUAL REPORT ON CSR ACTIVITIES
1. Brief outline of the Company’s CSR Policy, including overview of projects or programs proposed to beundertaken and a reference to the web-link to the CSR Policy and projects or programs. : CSR Policy isavailable at website www.empeegroup.co.in
2. Composition of the CSR Committee :Mr.R.Rangachari , Mr Suresh Raj Madhok and Ms.Shaji Purushothaman.
3. Average net profit of the Company for the last three financial years : NIL
4. Prescribed CSR expenditure (2% of the average net profit of the company in the immediately precedingfinancial year) : N A.
5. Details of CSR spent during the financial year.
a) Total amount to be spent for the financial year : N A
b) Amount unspent, if any : NIL
c) Manner in which the amount spent during the financial year is detailed below : N.A.
6. In case the company has failed to spend the two percent of the average net profit of the last three financialyears or any part thereof, the reasons for not spending the amount. : N.A.
During the Financial Year 2017-18, the Company has incurred a loss of Rs 76.69 Cr. Pursuant to theprovisions of Section 135 of the Companies Act , 2013 the average net profit during the immediate precedingfinancial year also resulted in loss. Therefore the Company could not allocate any funds for CSR activitiesduring the year under review.
7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, isin compliance with CSR objectives and Policy of the Company. : Yes.
30
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Annexure – F
Whistleblower Policy
Introduction
Empee Distilleries Limited (EDL) is firmly committed to conducting its business and relationships with all
stakeholders including employees, customers, suppliers, shareholders and business associates in a manner
that is lawful and ethically responsible and at all times, in a way that reflects the Company’s values. It will not
tolerate attitudes or activities that constitute a breach of law or trust or infringe collective or individual liberties in
any way. This approach is described in the Company’s Code of Conduct & Ethics.
The Whistleblower policy formalises EDL’s commitment to enabling employees and business associates to
make fair and prompt disclosure of circumstances where it is genuinely believed that a part of EDL’s business is
engaged in inappropriate practices and that the Code of Conduct & Ethics is being violated. The policy sets out
arrangements that encourage individuals to report concerns about unethical behaviour, actual or suspected fraud
or violations of the Code of Conduct & Ethics, knowing that in so doing, they are acting in the best interests of all
EDL stakeholders. This policy also ensures that the whistleblower will be protected from retaliation and reprisal.
Normally any such concern about a workplace situation should be raised with the employee’s immediate line
manager or if identified by a business associate, raised with the appropriate member of the EDL Management
Team. However, it is recognised that because of the seriousness and sensitivity of some issues, together with
the knowledge of who the employee or business associate thinks may be involved in wrongdoing, this may be
difficult or even impossible.
Scope of Policy
This policy is intended to cover any concerns which are in the public interest. These might include :
l Breach of any internal controls or Company policy relating to financial malpractice or fraud
l Failure to comply with a legal obligation
l Dangers to health and safety of the environment
l Criminal activity
l Miscarriage of justice
l Violation of the Company’s Code of Conduct & Ethics
l Attempts to conceal any of the aboves
This is not intended to be a complete list and any matter raised under this policy will be considered seriously.
However, matters of purely operational nature should not be raised under this policy. Instead such matters should
be raised through the usual organisational channels.
SafeguardsProtection
This policy is designed to offer protection to those employees or business associates who disclose such concerns
provided the disclosure is made in:
i. Accordance with the procedures laid down,
ii. Good faith, and
iii. The reasonable belief of the individual making the disclosure that malpractice has taken place.
Confidentiality
The Company will treat all such disclosures in a sensitive manner and will endeavour to keep the identity of an
individual making an allegation confidential. However, the investigation process may inevitably reveal the source
of the information and the individual, making the disclosure may need to provide a statement which cannot be
kept confidential if legal proceedings arise.
31
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Anonymous Allegations
This policy encourages individuals to put their name to any disclosures they make.
Untrue/Malicious/Vexatious Allegations
If an individual makes an allegation, which is not confirmed by subsequent investigation and then it shows that an
individual has made malicious or vexatious allegations for personal leverage and particularly if he or she persists
with making them, disciplinary action may be taken against the concerned individual.
Procedure for Making a Disclosure
Employees are entitled to make their disclosure in the first instance through their line manager or if they feel it
would be more appropriate to approach directly the Compliance Officer, the Managing Director, the Audit Committee
Chairman or the Chairman of the Board.
Contact should be made by phone, email or in writing and should include as much detail and evidence as
possible. Upon receipt of the disclosure the matter will be investigated immediately to ascertain all the facts and
a recommendation will be made to the Board. The recommendation will include a revision of Company policies
and procedures to reduce the risk of re-occurrence.
Protection Against Retaliation
EDL commits to ensure that no retaliatory action, of any sort, will take place against any employee or business
associate making a disclosure in good faith.
Reporting
The Compliance Officer, the Managing Director, the Chairman of the Audit Committee or the Chairman of the
Board will be responsible for reporting any whistleblowing disclosures to the Audit Committee.
Contacts
The relevant contacts are :
Person Position Email Address
Mr. M.P. Purushothaman Chairman of the Board [email protected]
Mr. Shaji Purushothaman Managing Director [email protected]
Mr. R. Rangachari Independent Director [email protected]
32
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Annexure – GForm AOC - I
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)
Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures
Part “A” : SubsidiariesRs. in lacs
1 Sl. No. 1 2 3
2 Name of the subsidiary Empee Sugars and EDL Properties Ltd Appollo Distilleries &
Chemicals Ltd Breweries Pvt Ltd
3 Reporting period for the 01.4.2017 01.4.2017 01.4.2017
subsidiary concerned, if To To To
different from the holding 31.3.2018 31.3.2018 31.3.2018
company’s reporting period
4 Reporting currency and
Exchange rate as on the N.A. N.A. N.A.
last date of the relevant
Financial year in the case
of foreign subsidiaries.
5 Share capital (Rs.) 41,97,29,000 1,00,00,000 45,77,65,000
6 Reserves & surplus - - (2579.07)
7 Total assets 51622.37 97.27 12234.41
8 Total Liabilities 51622.37 97.27 12234.41
9 Investments - - -
10 Turnover 1714.56 - 11082.00
11 Profit before taxation (3361.79) - (19.11)
12 Provision for taxation / (363) - -
Deferred taxation
13 Profit after taxation (2998.79) - (464.06)
14 Proposed Dividend - - -
15 % of shareholding 62.80 75.00 91.41
Notes : The following information shall be furnished at the end of the statement :
1. Names of subsidiaries which are yet to commence operations : M/s. EDL Properties Ltd.
2. Names of subsidiaries which have been liquidated or sold during the year : Nil
33
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Part “B” : Associates and Joint Ventures
Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companiesand Joint Ventures :
Name of Associates / Joint Ventures
Latest audited Balance Sheet
1) Shares of Associate / Joint Ventures held by thecompany on theyear and
2) No. of Shares
3) Amount of Investment in Associates / JointVenture
4) Extend of Holding %
5) Description of how there is significant influence
6) Reason why the associate/ joint venture is notconsolidated
7) Net-worth attributable to Shareholding as perlatest audited Balance Sheet
Profit / Loss for the yeari. Consolidate in Consolidation
ii. Considered in Consolidation
N.A.
1. Names of associates or joint ventures which are yet to commence operations.
2. Name of associates or joint ventures which have been liquidated sold during the year.
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
34
Annexure – HFORM NO. MR-3
SECRETARIAL AUDIT REPORTFOR THE FINANCIAL YEAR ENDED 31.03.2018
[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,
EMPEE DISTILLERIES LIMITED,
Chennai
1. We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence
to good corporate practices by M/s.Empee Distilleries Limited,(hereinafter called the company). Secretarial
Audit was conducted based on records made available to us, in a manner that provided us a reasonable basis
for evaluating the corporate conducts/statutory compliances and expressing our opinion/understanding thereon.
2. Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other
records maintained by the Company and made available to us and also the information provided by the
Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we,on
strength of those records, and information so provided, hereby report that in our opinion and understandings,
the Company has, during the audit period covering the financial year ended on March 31, 2018,appears to
have complied with the statutory provisions listed hereunder and also in our limited review, that the Company
has proper andrequired Board-processes and compliance-mechanism in place to the extent, in the manner
and subject to the reporting made hereinafter.
We have examined the books, papers, minutes book, forms and returns filed and other recordsmaintained by the
Companyand made available to us, for the financial year ended on March 31, 2018 according to the applicable
provisions of:
i) The Companies Act, 2013 (the Act) and the rules made thereunder and the Companies Act, 1956 and the
rules made thereunder as applicable;
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 Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India
Act, 1992 (‘SEBI ACT’) :-
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; Not applicable as the Company has not issued any
shares/options to directors/employees under the said guidelines / regulations during the year
under review back or propose to buy-back any of its securities during the year under review and
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
35
e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations,
2008; Not applicable as the Company has not issued any debt securities which were listed
during the year under review
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; Not applicable as the
Company is not registered as Registrar to Issue and Share Transfer Agent during the year under
review
g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; Not
applicable as the Company has not delisted / propose to delist its equity shares from any Stock
Exchange during the year under review and
h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; Not
applicable as the Company has not bought back or propose to buy-back any of its securities
during the year under review and
vi) The management has identified and confirmed the following laws as being specifically applicable to the
Company:
1. Tamil Nadu Liquor (License & Permit) Rules, 1981 and the like Act for Andhra Pradesh, Kerala
and Karnataka.
2. Tamil Nadu IMFS (Manufacture) Rules,1981
3. Tamil Nadu Prohibition Act 1937
We have also examined compliance with the applicable clauses of the following :
i) Secretarial Standards issued by The Institute of Company Secretaries of India with respect to Meetings
of Board of Directors (SS-1) and General Meetings (SS-2) made effective 1st July, 2015 and revised witheffect from 01.10.2017.
ii) The Listing Agreements entered into by the Company with National Stock Exchange of India Limited and
BSE Limited and The Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
During the period under review, the Company has complied with the applicable provisions of the Act, Rules,
Regulations, Guidelines, Standards, mentioned above subject to few lapses under the Companies Act, 2013
relating to delay in filing of forms, delay in Appointment of Cost Auditor, conducting Cost Audit and filing of Cost
Audit Report, loan to related entities, delay in filing FLA and FCGPR return with Reserve Bank of India.
It is represented to us that the company has initiated measures, wherever required, to address issues raised by
the statutory authorities and letters/notices received by the Company during the financial year under various
enactments as applicable to the company.
We further report that the related documents that we have come across depict, that
The Board of Directors of the Company is constituted as applicable with proper balance of ExecutiveDirectors,
Non-Executive Directors and Independent Directorsduring the year and the changes in the composition of the
Board of Directors that took place during the period under review were carried out in compliancewith the provisions
of the Act.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed noteson agenda
were sent at least seven days in advance and a system exists for seeking and obtainingfurther information and
clarifications on the agenda items before the meeting and for meaningfulparticipation at the meeting
Majority decision is carried through while the dissenting members’ views are captured and recordedas part of the
minutes.
36
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
We further report thatbased on review of compliance mechanism established by the Company and on the basis
of the Compliance Certificate(s) issued by the Company Secretary and taken on record by the Board of Directors
at their meeting(s), there appear adequate systems and processes in the company commensurate with the size
and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and
guidelines.
We further report that during the Audit period the Company has sought the approval of the members forfollowing main events :
l Amendments to the Main Objects Clause of the Memorandum of Association of the Company
l Increase in Authorised Share Capital from Rs.30.00 Crores to Rs.50.00 Crores.
l Ratification of remuneration paid to Ms.NishaPurushothaman, JMD for the period from 01.04.2016 to
31.03.2017.
l Approval of Related Party Transactions
l Ratification of Remuneration payable to Cost Auditor
l Appointment of Mr.Suresh Raj Madhok as an Independent Director
We further report that, as per the information provided to us, during the audit period , we also came across a
number of legal proceedings pending against the company including proceedings under Insolvency and Bankruptcy
Code, 2016 which the management of the company informed is being taken care of at their end and
We further report that, during the year , the company has applied to Central Government for ratification of excess
managerial remuneration of Rs. 85.04 Lakhs to Ms. NishaPurushottaman, Joint Managing Director during the
year 2016-17. The form is in process and is yet to be approved.
We further report that our Audit is subjected only to verifying adequacy of systems and procedures that are in
place for ensuring proper compliance by the Company and we are not responsible for any lapses in those
compliances on the part of the Company.
For S Dhanapal & Associates(A firm of Practicing Company Secretaries)
N. Ramanathan
(Partner)C.P.No 11084
Place : Chennai
Date : 13.08.2018
37
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
This Report is to be read with our testimony of even date which is annexed as Annexure A and formsan integral part of this report.
Annexure A
ToThe Members,
EMPEE DISTILLERIES LIMITED
Chennai
Our report of even date to be read along with this letter.
Management’s Responsibility
a. Maintenance of secretarial record is the responsibility of the Management of the Company. Our
responsibility is to express an opinion on these secretarial records based on our audit.
Auditor’s Responsibility
b. Our responsibility was to express an opinion on the secretarial records, standards and procedures
followed by the company with respect to secretarial compliances.
c. We believe that audit evidence and information obtained from company’s management is adequate and
appropriate for us to provide a basis for our opinion.
d. Where ever required, we have obtained Management representation about the compliance of laws, rules
and regulations and happenings of events etc.
Disclaimer
e. The Secretarial Audit is neither an assurance as to the future viability of the company nor of the efficacy
or effectiveness with which the management conducted the affairs of the Company.
For S Dhanapal & Associates(A firm of Practicing Company Secretaries)
N. Ramanathan
(Partner)C.P.No 11084
Annexure – I
Conservation of energy, technology absorption, foreign exchange earnings and outgo
(A) Conservation of energy:
i. Steps taken or impact on conservation of energy : Nil
ii. Steps taken by the company for utilising alternate sources of energy : Nil
iii. Capital investment on energy conservation equipments : Nil
(B) Technology absorption:
i. Efforts made towards technology absorption : Nil
ii. Benefits derived like product improvement, cost reduction, product development, import
substitution : Nil
Place : Chennai
Date : 13.08.2018
38
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
iii. In case of imported technology (imported during the last 3 years reckoned from the beginning of
the financial year), following:
(a) Details of technology imported : Nil
(b) Year of import. : Nil
(c) Whether the technology been fully absorbed : Nil
(d) If not fully absorbed, areas where absorption has not taken place, and the reasons
therefor.
iv. Expenditure incurred on Research and Development : Nil
(C) Foreign exchange earnings and Outgo : 34.78 lakhs
Annexure - J (i)FORM NO. AOC - 2
(Pursuant to clause(h) of sub-section (3) of Section 134 of the Companies 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 to in sub section (1) of section 188 of the Companies Act, 2013 including certain arms length transaction
under third proviso thereto.
1. Details of contracts or arrangements or transactions not at Arm’s length basis :
SL. No. Particulars Details
a) Name (s) of the related party & nature of relationship -
b) Nature of contracts/arrangements/transaction -
c) Duration of the contracts/arrangements/transaction -
d) Salient terms of the contracts or arrangements or -transaction including the value, if any
e) Justification for entering into such contracts or -arrangements or transactions’
f) Date of approval by the Board -
g) Amount paid as advances, if any -
h) Date on which the special resolution was passed -in General meeting as required under first provisoto section 188
39
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
2. Details of contracts or arrangements or transactions at Arm’s length basis. :
SL.No. Particulars Details
a) Name (s) of the related party & nature of relationship Empee Holdings Ltd., Aruna Constructions
b) Nature of contracts/arrangements/transaction Business Rent
Auxiliary Services
c) Duration of the contracts/arrangements/transaction 12 Months 12 Months
d) Salient terms of the contracts or arrangements or Rs.197.56 lacs Rs.62.16 lacs
transaction including the value, if any
e) Date of approval by the Board 13.02.2017 13.02.2017
f) Amount paid as advances, if any - -
By order of the BoardFor Empee Distilleries Limited
Place: Chennai M.P. PurushothamanDate : 13.08.2018 Chairman
Annexure - K
PARTICULARS OF THE EMPLOYEES
The information required under Section 197 of the Act. read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 are given below :
a. The ratio of the remuneration of each director to the median remuneration of the employees ofthe company for the financial year :
S.No. Name of the Director / KMP Ratio to median % increase in
remuneration remuneration in
the financial year
1 Ms. Nisha Purushothaman N.A. N.A.
b. The median remuneration for the year 2017-18 is : Rs. 2.09 lacs.
c. The percentage increase in the median remuneration of employees in the financial year : NIL
d. The number of permanent employees on the rolls of Company : 536
e. The explanation on the relationship between average increase in remuneration and company performance :
The average increase in remuneration per employee is in line with normal pay revisios which is linked to
individual performance and the Company’s performance.
40
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
f. Comparision of the remuneration of the Key Managerial Personnel against the performance of the Company.
Aggregate remuneration of Key Managerial Personnel (KMPs) in 1120.26
FY 2017-18 (Rs. in lakhs)
Net Revenue (Rs. in lakhs) 51271.47
Remuneration of KMPs (as % revenue) 0.02
Profit before Tadx (PBT) (Rs.in lakhs) (4487.72)
Remuneration of KMPs (as% of PBT) -
g. Variations in the market capitalization of the Company, price earnings ratio as the closing date of the current
financial year and previous financial year and Percentage increase over decrease in the marked quotations of
the shares of the company in comparision to the rate at which the Company came out with the last public offer
:
Particulars Unit As at As at Variation
March 31,2018 March 31,2017 %
Closing rate of shares Rs. 17.60 52.05 (67%)
at BSE
EPS Rs. (41.89) (23.85)
Market capitalization at Rs. 355.09 10501.47 (96 %)
BSE in lakhs
Price Earnings Ratio Ratio - - -
h. Average percentile increase already made in the salaries of employees other than the managerial personnel in
the last financial year and its comparison with the percentile increase in the managerial remuneration and
justification thereof and point out if there are any exceptional circumstances for increase in the managerial
remuneration :
Increase in remuneration is based on remuereation policy of the Company.
i. Comparison of each remuneration of the Key Managerial Personnel against the performance of the Company.
Particulars Mr. Nisha Mr N Chandrasekaran Mr. R.Venkatesh
Purushothaman Chief Financial Company
Jt. Managing Officer Secretary
Director
(upto March 15, 2018)
Remuneration in FY - 19.20 lakhs 5 lakhs
2017-18 (Rs. in lacs.)
Revenue - 51271.47 lakhs 51271.47 lakhs
(Rs. in lacs.)
Profit before Tax (PBT) - (7669.83) lakhs (7669.83) lakhs
(Rs. in lacs.)
Remuneration as % of - - -
PBT
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
41
j. The key parameters for any variable component of remuneration availed by the Directors :
Non-Executive Directors (NEDs) are remunerated by way of Sitting fee for each meeting of the Board /
Committees of the Board attended by them.
k. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but
receive remuneration in excess of the highest paid director during the year : N.A.
l. Affirmation that the remuneration is as per the remuneration policy of the Company :
The company affirms remuneration is as per the remuneration policy of the company.
m. The statement containing particulars of employees as required under Sec 197(12) of the Act read with Rule
5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules, 2014, is provided in
a separate annexure forming part of this report. Further, the report and the accounts are being sent to the
members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for
inspection at the Registered Office of the company during business hours on working days of the company
upto the date of the ensuing Annual General Meeting. Any shareholder interested in obtaining a copy of the
same may write to the company Secretary and the same will be provided free of cost to the shareholders.’
On behalf of the Board of Directors
For Empee Distilleries Ltd.,
M.P. PurushothamanChairman
Place : Chennai
Date : 13.08.2018
42
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Report on Corporate Governance in terms of SEBI’s (Listing Obligations and DisclosureRequirements) Regulations, 2015 (LODR).
1. Company’s Philosophy on Corporate Governance
The Company firmly believes that good Corporate Governance is the foundation of corporate excellence. A sound
governance process consists of a combination of business practices which result in enhancement of shareholder
value and enable the Company to fulfill its obligations to customers, employees, lenders, and to the society in
general. The Company aims to increase and sustain its corporate value through Board, various Committees, to
maintain action plan to match with performance. Your Company has been observing the key principles of the
code and is committed to take adequate measures towards achieving full compliance of the Corporate Governance
code in consonance with the SEBI regulations.
2. Board of Directors
Board of Directors of the Company consists offour Director out of which one is an Executive Director and twoare
Non-Executive Independent Directors as on the date of this report. TheNon-Executive Directors are independent
and they have no pecuniary relationship with the Company in their capacity as Director and they maintain their
limits of directorships as per SEBI listing norms. During the year ended 31.03.2018, the Board met 7 times and
the maximum gap between two meetings was not more than 120 days. The above composition of the Board
meets the requirements of the SEBI (LODR), 2015 and the Companies Act, 2013.
3. Board and Committee Memberships
All the Directors have made necessary disclosures regarding Committee positions held by them in other
Companies. None of the Directors on the Board is a Member of more than ten Committees and none is a
Chairman of more than five Committees across all the Public Limited Companies in which they are Directors. The
table below gives the details of Directorships, Committee Memberships and Chairmanships in the Companies
as on 31st March 2018. It excludes Directorships of Private Limited Companies, Foreign Companies and Section
8 Companies. For the purpose of reckoning the limit, the Chairmanship / Membership of the Audit Committee and
the Stakeholders’ Relationship Committee alone has been considered.
During the period, Board Meetings were held on 29.05.2017, 21.8.2017, 09.9.2017, 15.11.2017, 14.12.2017,
12.02.2018, 15.03.2018.
Mr.M.P. Purushothaman Promoter – 7 Yes 9 - -
Non- Executive
Ms. Nisha Purushothaman Promoter – 5 Yes 9 3 -
(upto 15/3/2018) Executive
Mr. Shaji Purushothaman Promoter - 1 - 9 3 -
(From 15.03.2018) Executive
Mr. R. Rangachari Independent – 7 Yes 4 3 2
(w.e.f. 09.05.2016) Non-Executive
Mr. Suresh Raj Madhok Independent 7 N.A. 6 3 1
(w.e.f. 26.12.2016) Non-Executive
Name of Director Category
No. ofBoard
meetingsattended
Whetherattendedlast AGM
Number ofDirectorshipsin other Indian
PublicCompanies
No. ofCommittee
positions heldin otherPublic
Companies
No. ofCommittee
Chairmanshipheld in
other PublicCompanies
43
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Inter-se relationship of Directors :
Mr. M.P. Purushothaman and Mr. Shaji Purushothaman are relatives as per the provisions of the Companies Act.
Meeting of Independent Directors :
During the year, a meeting of Independent Directors was held on12.02.2018 and reviewed the performance of the
Board as a whole on parameters of achievement and assessed the quality, quantity and timeframes of flow of
information etc between the management and the Board. Mr.R. Rangachari, Chairman of the meeting presided
over the meeting and the Independent Directors assessed the performance of Executive Director and Chairman.
Familiarisation Programme :
The Company follows familiarization programme through various reports/statements/internal policies for all the
Directors with a view to make them understand the updates of the Company’s policies and programmes. The
details of familiarisation programme can be had from the Company’s website : www.empeegroup.co.in.
4. Audit Committee :
The Audit Committee of the Company comprises of the following Directors as members of the Committee.
Mr. R.Rangachari Independent Non-Executive (Chairman)
Mr. Suresh Raj Madhok Independent Non-Executive (Member)
Mr. Shaji Purushothaman Promoter - Executive (Member)
The terms of reference of the audit committee cover the matters specified under Regulation 18 of the SEBI’s
(LODR), 2015 and Section 177 of the Companies Act, 2013, besides other terms as may be referred to by the
Board of Directors from time to time. Internal/Statutory Auditors are invited to the Audit committee meetings. The
Statutory auditors are present where quarterly, half-yearly financials results are discussed and finalized.
Meeting and the attendance during the year were as follows :
Sl. No. Name of Member No. of meetings Held No. of meetings attended
1 Ms. Nisha Purushothaman 4 2
2 Mr R.Rangachari 4 4
3. Mr Suresh Raj Madhok 4 4
5. Nomination and Remuneration Committee :
a) The Nomination and Remuneration Committee, comprising of Mr.Suresh Raj Madhok, Mr.R.Rangachari and
Mr.M.P. Purushothaman, has been constituted under the Chairmanship of Mr.Suresh Raj Madhok to determine
the quantum and components of the remuneration to be paid to the Whole-time Directors/KMPs.
The Non-Executive/Independent Directors of the Company are paid sitting fees for attending Board/Committee
meetings and reimbursement of expenses towards travel, and miscellaneous expenses.
The terms of reference of the Nomination and Remuneration Committee cover the matters specified under
Clause 19 of the SEBI’s (LODR), 2015 and Section 178 of the Companies Act, 2013, besides other terms as
may be referred to by the Board of Directors from time to time.
Nomination and Remuneration Policy of the Company is annexed to the Board’s Report as Annexure - C.
44
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Non-Executive Directors :
Name of the Director Sitting Fee (Rs.)
1. Mr.M.P. Purushothaman 75000
2. Mr.R. Rangachari 115000
3. Mr.Suresh Raj Madhok 115000
During the year the committee met on 29.5.2017, 21.8.2017, 14.12.2017 and 15.03.2018
6. Stakeholders’ Relationship Committee :
The Stakeholders’ Relationship Committee consists of the following :
i) Mr. R.Rangachari Chairman of the Committee
ii) Mr. Suresh Raj Madhok Member
iii) Ms. Nisha Purushothaman Member (upto March 15, 2018)
iv) Mr. Shaji Purushothaman Member (from March 15, 2018)
The Committee, inter alia, approves share transfers, transmissions and also requests for issue of duplicate
certificates, split/consolidation of shares etc. and oversees all matters connected with securities transfers and
other processes and meetings are held frequently. The Committee also looks into redressal of shareholders’
complaints related to share transfers, non receipt of balance sheets, non-receipt of dividend etc. The committee
oversees the performance of the RTA and recommends overall improvement of the quality of investor services.
Four meetings of this Committee were held on 29.5.2017, 09.09.2017, 14.12.2017 and 12.2.2018,during the year
under review. During the year 2017-18,no complaint was received and no investor complaint was pending as on31.03.2018.Mr R Venkatesh , Company Secretary acts as the Compliance Officer.
7. CSR Committee :
The CSR Committee, comprising of Mr.Suresh Raj Madhok, Mr.R.Rangachari and Mr Shaji Purushothaman has
been constituted under the Chairmanship of Mr.Suresh Raj Madhok. A meeting of this Committee was held on
12.02.2018 during the year under review. Since the Company has incurred loss during the year under review and
overall average of profits during the last three financial years also loss, no amount could be allocated for the
purpose of CSR activities
8. General Body Meetings :
The last three Annual General Meetings were held as under:
Year Location Date Time Special
resolutions passed
2016-17 P.Obul Reddy Hall, Vani Mahal, 27/09/2017 11.30 A.M. Yes
T.Nagar, Chennai – 600 017.
2015-16 P.Obul Reddy Hall, Vani Mahal, 26/09/2016 11.30 A.M. Yes
T.Nagar, Chennai – 600 017.
2013-15 Hall II, IMAGE Auditorium, 25/06/2015 11.00 A.M. Yes
R.A.Puram, Chennai – 600 028.
4545
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Details of Directors who have attended the last three general meetings held by the Company :
Sl .No. Name Designation Held on Held on Held on 27-09-2017 26-09-2016 26-06-2015
1 Mr.M.P.Purushothaman Chairman Attended Attended Attended
2 Ms.Nisha Purushothaman JMD Attended Attended Attended
3 Mr.R.Rangachari Director Attended N.A. N.A.
Postal Ballot / Extra Ordinary General Meetings :
Postal Ballot Notice dated November 15, 2017 was sent to all the shareholders and it was carried out
successfully. The Scrutiniser’s Report declaring the results of postal ballot is also available on our website
www.empeegroup.co.in.
9. Code of Conduct :
In consonance with the requirements of the amended Regulation 17(5) of the SEBI ( LODR), 2015, Board of
Directors has laid down a code of conduct for the Board members and senior management of the Company. The
said code of conduct has also been posted on the Website of the company, www.empeegroup.co.in. The directors
and senior management are committed to strict adherence of the code and to conduct the business in an ethical
and transparent manner.
10. Risk Management :
The company has laid down procedures to inform Board members about the risk assessment and minimization
procedures. The Board periodically discusses the significant business risks identified by the management and
the mitigation process being taken up.
11. Prevention of Insider Trading :
The company has framed a code of conduct for prevention of Insider Trading based on SEBI’s (Insider Trading)
Regulations, 1992. This code is applicable to all directors/officers/designated employees. The code ensures the
prevention of dealing in company’s shares by persons having access to unpublished price sensitive information.
12. Disclosures :
i. There were no materially significant related party transactions that may have potential conflict with the
interests of company at large.
ii. There are no non-compliances by the Company on any matter related to capital markets, during the last
three years. There were no penalties, strictures imposed on the Company by Stock Exchange or SEBI
or any statutory authority, on any matter related to capital markets, during the last three years.
iii. The Company has a Whistle Blower policy. No personnel has been denied access to the audit committee.
iv. The Company has complied with all the mandatory requirements of this clause. With regard to the
adoption of non-mandatory requirements, the non-Executive Chairman has been provided with a Chairman’s
office at the Company’s expense. A remuneration committee has been formed to determine the
remuneration of executive directors.
v. Investor complaints of non-receipt of dividends, non-receipt of annual report etc., forwarded by SEBI are
periodically resolved and updated into SCORES (SEBI Complaints Redress System) website and no
complaints is pending during the year under review.
46
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
vi. Performance Evaluation of Directors, Board and Committees are given in the Directors report.
vii. Policy on dealing with Related Party Transactions has been disclosed on the website of the Company,
which can be accessed at the weblink www.empeegroup.co.in.
viii. Pecuniary relationship or transactions of the non-executive directors vis-à-vis the company.- Nil
ix. Number of shares and convertible instruments held by non-executive directors - Nil
13. Subsidiary Companies :
The minutes of the board meetings of the subsidiary companies namely M/s.Empee Sugars and Chemicals Ltd,
M/s.EDL Properties Ltd and M/s.Appollo Distilleries and Breweries Pvt Ltd are placed before the Board of
Directors of the Company for their review.
14. Compliance with Corporate Governance Norms :
The Company has complied with the mandatory requirements of the code of Corporate Governance as stipulated
in SEBI(LODR), 2015 . The certificate from statutory auditors is annexed to the Directors’ Report.
15. Means of Communication :
The Company is publishing quarterly Un-audited / Annual Audited financial results in the Trinity Mirror in English
and Makkal Kural (vernacular language). The Company has posted the quarterly/ annual results in the Company’s
website www.empeegroup.co.in. No presentations were made to Institutional Investors or to the analysts
during the period.
Web-Site: The Company’s website displays details and information to the interest of the shareholders at
www.empeegroup.co.ins
16. General Shareholder Information :
i. AGM Date, Time and Venue 27th September 2018, at 3.30 p.m.
Sri P.Obul Reddy Hall, Vani Mahal,
T.Nagar, Chennai - 600 017.
ii. Financial year 2017-18
iii. For the year ended 2018-19
First quarter result Before 14th August, 2018
Second quarter result Before 14th November, 2018
Third quarter results Before 14th February, 2019
Fourth quarter results Before 31st May, 2019
(subject to any extension of time granted
by the statutory authorities)
iii. Date of Book closure 21st September 2018 to 27th September 2018
iv. Listing on Stock Exchanges National Stock Exchange of India Ltd
Bombay Stock Exchange Ltd
v. Stock Code
National Stock Exchange of India Ltd EDL
BSE Limited 532920
47
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
vi. Stock Market Data :
BSE Ltd (BSE) & National Stock Exchange of India Ltd (NSE); (Face value of Rs.10/-each)
NSE BSE
High Price Low Price Closing High Low Closing Price Price Price Price
(Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.)
Apr-17 49.69 47.86 48.41 53.10 45.60 46.35
May-17 46.74 44.64 45.30 49.60 42.10 44.30
Jun-17 46.05 44.06 44.69 49.35 41.95 43.40
Jul-17 45.69 43.84 44.64 49.70 42.45 44.05
Aug-17 41.39 39.73 40.24 44.05 37.60 39.35
Sep-17 39.99 37.76 38.67 42.45 35.25 39.30
Oct-17 42.79 40.54 41.37 49.70 38.15 45.30
Nov-17 48.99 46.26 47.41 53.95 43.15 49.70
Dec-17 50.55 47.74 48.73 56.25 46.00 52.15
Jan-18 61.85 57.23 59.18 71.85 47.80 49.55
Feb-18 46.03 43.58 44.53 50.30 41.60 43.20
Mar-18 36.79 34.8 35.12 44.50 28.50 28.50
Months
vii. (a) Stock Price performance in comparison to BSE Sensex :
48
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
(b) Stock Price performance in comparison to NSE Nifty :
viii. Registrars and Share Transfer Agents : M/s.Cameo Corporate Services Limited
No.1, Subramaniam Building,
Club House Road, Chennai – 600 002.
ix. Share Transfer system Share transfers are registered and returned within a period of
30 days from the date of receipt, if the documents are clear in
all respects, by the Committee.
x. Distribution of shareholding as on 31st March, 2018 :
No. of equityshares held
No. offolios
No. of sharesheld
% ofshare-holding
1 to 100 18894 749455 3.7146
101 to 500 4077 1076617 5.3361
501 to 1000 924 748263 3.7087
1001 to 2000 475 711852 3.5282
2001 to 3000 157 401739 1.9911
3001 to 4000 81 289006 1.4324
4001 to 5000 64 303664 1.5050
5001 to 10000 107 794061 3.9357
10001 and above 114 15101096 74.8477
Total 24893 20175753 100.0000
49
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
xi. Shareholding pattern as on 31st March, 2018 :
No. of equity shares held No. of folios No. of shares held % of share-holding
Promoters 2 669914 33.20
Directors and their relatives 7 64702933 23.31
FIs/ Banks 2 14503 0.07
Private Corporate Bodies 220 1211248 6.00
Indian Public 2447 7357654 36.48
NRIs and OCBs 215 190269 0.94
Total 24893 20175753 100.00
xii. Dematerialisation of 98.73% of total equity share capital is held in dematerialized
shareholding and liquidity form with NSDL and CDSL.
xiii. Outstanding GDR/ADR/Warrants Nil
or any convertible instruments,
conversion date and impact on equity
xiv. Plant locations 1. Tamilnadu Unit :Mevaloorkuppam, Sriperumpudur,
Kancheepuram, Tamil Nadu.
2. Kerala Unit :NIDA, Menonpara Road Kanjikode,
Palakad District, Kerala.
3. Karnataka Unit :Arabikothanur Village,
Kolar District, Karnataka.
4. Power Plant :Kottadivayal Village,
AranthangiTaluk, Pudukkottai District,
Tamilnadu.
5. Grain Based Alcohol Plant :Choutkur Village, Pulkal Mandal,
Medak District, Telangana.
xv. Address for correspondence Empee Tower, No.59, Harris Road,
Pudupet, Chennai – 600 002.
E-mail ID : [email protected]
50
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
xvi. The following are the details of dividends declared by the Company and the respective due dates for
transfer of unclaimed / unpaid dividend to the Investor Education and Protection Fund (IEPF).
Date of Dividend Due date of credit Due date of transfer declaration for the to the Central to the Central of dividend financial year Government Government
29-09-2011 2010-11 03-10-2018 03-11-2018
28-12-2012 2011-12 03-01-2019 03-02-2019
30-12-2013 2012-13 29-12-2020 29-01-2021
It may be noted that no claim of the shareholders will be entertained by the Company for the unclaimed / unpaid
dividends after their credit to the Investors Education & Protection Fund.
In view of the above, the shareholders are advised to send their unencashed dividend warrants to the Registered
Office of the Company for revalidation and encash them before the due date for credit to the IEPF.
Board’s Evaluation :
Pursuant to the provisions of the Companies Act, 2013 and Clause 17 of the LODR, 2015, the Board has carried
out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation
of the working of its Audit, Nomination and Remuneration and Compliance Committees.
While Independent Directors in their separate meeting have carried out to assess the performance of Chairman,
JMD and other Directors of the Board more particularly about their business acumen and contribution to the
Company, the performance evaluation of the Independent Directors was carried out by the entire Board.
The Independent Directors expressed their satisfaction with the evaluation process, functioning such as adequacy
of the composition of the Board and its Committees, Board culture, execution and performance of duties,
obligations, responsibilities and governance.
Chief Executive Officer and Chief Financial Officer Certificate :
Mr.ShajiPurushothaman, Managing Director and Mr N Chandrasekaran , CFO has submitted to the Board of
Directors the certification as per Regulation 27 of the SEBI (LODR), 2015.
DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENTPERSONNEL WITH THE COMPANY’S CODE OF CONDUCT PURSUANT TO REGULATION34 ANDSCHEDULE V OF THE SEBI’s (LODR), 2015.
As required by the SEBI’s (LODR), 2015, this is to confirm that the Company has adopted a Code of Conduct
and Ethics for all Board Members and Senior Management of the Company. The Code is available on the
Company’s website.
I further confirm that the Company has in respect of the financial year ended 31st March, 2018, received from all
the Board Members and Senior Management of the Company, a declaration of compliance with the Code, as
applicable to them.
For the purpose of this declaration, Senior Management Team shall mean heads of the various functions of the
Company.
Place : Chennai M.P. PurushothamanDate : 13.8.2018 Chairman
51
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
CERTIFICATION BY MANAGING DIRECTOR AND CHIEF FINANCIAL OFFICER
We hereby certify that we have reviewed the Financial Statements and the Cash Flow Statement for the financialyear ended 31st March, 2018 and that to the best of our knowledge and belief:
1. These statements do not contain any materially untrue statement or omit any material fact or containstatements that might be misleading.
2. These statements together present a true and fair view of the Company’s affairs and are in compliancewith existing Accounting Standards, applicable laws and regulations.
3. There are, to the best of our knowledge and belief, no transactions entered into by the Company duringthe aforesaid period which are fraudulent, illegal or violative of the Company’s Code of Conduct.
4. We accept responsibility for establishing and maintaining internal controls for financial reporting and thatwe have evaluated the effectiveness of the internal control systems of the Company pertaining to financialreporting and we have disclosed to the Auditors and the Audit Committee, deficiencies in the design oroperation of such internal control systems, if any, of which we are aware, and that we have taken therequired steps to rectify these deficiencies.
5. We have indicated to the Auditors and the Audit Committee that:
(a) there have been no significant changes in internal control over financial reporting during the year.
(b) there have been no significant changes in accounting policies during the year.
(c) there have been no instances of significant fraud of which we have become aware and the involvementtherein, if any, of the management or an employee having a significant role in the Company’sinternal control system over financial reporting.
For Empee Distilleries Ltd
Place: Chennai. Shaji Purushothaman N.ChandrasekaranDate : 13.08.2018 Managing Director Chief Financial Officer
CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCE
ToThe Members of Empee Distilleries Limited
We have examined the compliance of conditions of Corporate Governance by Empee Distilleries Limited (“the
Company”) for the year ended 31st March 2018 as stipulated in Regulation 34 of the SEBI’s (LODR), 2015 of the
said Company with the relevant Stock Exchanges.
The compliance of the conditions of Corporate Governance is the responsibility of the Management. Our examination
was limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring
compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the
financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us and the representations
made by the Directors and the Management, we certify that the Company has complied with the conditions of
Corporate Governance as stipulated in the above-mentioned Listing Agreement.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the
efficiency or effectiveness with which the Management has conducted the affairs of the Company.
For Venkatesh& Co.,Chartered Accountants (F.R.No.004636S)
CA Dasaraty VPartnerM. No.026336
Place : Chennai
Date : 13.08.2018
52
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
INDEPENDENT AUDITOR’S REPORT
To
The Members of
M/s. Empee Distilleries Limited.
Report on Financial Statements
We have audited the accompanying standalone financial statements of Empee Distilleries Limited (“the
Company”), which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss
(including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows
for the year then ended and a summary of the significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act,
2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and
fairview of the financial position, financial performance including other comprehensive income, cashflows and
changes in equityof the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under
section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and
other accounting Principles Generally Accepted in India.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions
of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting policies; making judgments and estimates that
are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to
the preparation and presentation of the standalone financial statements that give a true and fairview and are free
from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit. In
conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards
and matters which are required to be included in the audit report under the provisions of the Act and the Rules
made thereunder and the Order issued under section 143(11) of the Act.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the
standalone financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud
orerror.In making those risk assessments, the auditor considers internal financial control relevant to the Company’s
preparation of the standalone financial statements that give a true and fair view in order to design audit procedures
that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as
evaluating the overall presentation of the standalone financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit
opinion on the standalone financial statements.
53
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Basis for Qualified Opinion
a. The company has made an investment of Rs.1.59 Crores as Equity Shares and further investment by
way of share application money of Rs.140.36 Crores to its subsidiary Empee Sugars and Chemicals
Limited. The Company Empee Sugars have been incurring losses. No Provision for diminution in the
value of investment in respect of the above company has been considered in the accounts.
b. Other Advances amounting to Rs. 31.01 Crores out of 46.80 Crores under the head Current Financial
Assets, Sundry Debtors Rs.77.80 Crores and Loan and advances to related parties Rs. 26.22 Crores,
Other Long Term Liabilities Rs. 29.28 Crores and Trade Payable of Rs. 63.88 Crores and debit balances
of Suppliers account of Rs. 25.84 Crores are subject to confirmation and reconciliation. The impact on
profitability is not ascertainable.
Qualified Opinion :-
In our opinion and to the best of our information and according to the explanations given to us, except for the
effects of the matter described in the Basis for Qualified Opinion paragraph, the aforesaid standalone financial
statements give the information required by the Act in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at
March 31, 2018, and its loss, total comprehensive income, the changes in equity and its cash flows for the year
ended on that date.
Report on Other Legal and Regulatory Requirements :-
1. As required by the Companies (Auditor’s Report) Order, 2016(“ the Order”) issued by the Central
Government of India in terms of sub section (11) of section 143 of the Act, we give in ‘Annexure A’ a
statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.
2. As required by section 143(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
and belief were necessary for the purposes of ouraudit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as
it appears from our examination of thosebooks.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income,
Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in
agreement with the books of account.
d) Inouropinion,theaforesaidstandalonefinancialstatementscomplywiththeIndianAccounting Standards
prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors of the Company as on March
31, 2018 taken on record by the Board of Directors, none of the directors are disqualified as on
March 31, 2018 from being appointed as a director in terms of Section 164(2) of theAct.
f) With respect to the adequacy of the Internal Financial Controls over financial reporting of the Company
and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our
report expresses an opinion on the adequacy and operating effectiveness of the Company’s internal
financial controls over financialreporting.
g) WithrespecttotheothermatterstobeincludedintheAuditor’sReportinaccordancewithRule 11 of the
Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our
information and according to the explanations given to us:
54
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
i. A statement on the pending litigations of the company which would impact its
financial positionare given in the “Annexure C”.
ii. The company did not have any long-term contracts including derivative contracts for which there
were any material foreseeable losses.
iii. No amounts were required to be transferred, to the Investor Education and
Protection Fund by theCompany.
2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government
in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in
paragraphs 3 and 4 of the Order.
For Venkatesh& Co.,Chartered Accountants
F.R.No.004636S
CA Dasaraty VPlace : Chennai M.No.026336Date : 30.05.2018 Partner
ANNEXURE ‘A’ TO INDEPENDENT AUDITORS’ REPORT(Referred to in paragraph 1 under the heading of “Report on other Legal and Regulatory Requirements”
of our Report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub- section 3
of Section 143 of the Companies Act, 2013 (“the Act”)
We have audited the internal financial controls over financial reporting of Empee Distilleries Limited(“the
Company”) as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the
Company for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishing and maintaining internal financial controls
based on the internal control over financial reporting criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design,
implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring
the orderly and efficient conduct of its business, the safeguard in gofits assets, the prevention and detection of
frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of
reliable financial information, as required under the Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company
based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial
Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India
and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent
applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether
adequate internal financial controls over financial reporting was established and maintained and if such controls
operated effectively in all material respects.
55
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal
financialcontrolssystemoverfinancialreportingandtheiroperatingeffectiveness.Ourauditofinternal financial controls
over financial reporting included obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness
of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement,
including the assessment of the risks of material misstatement of the financial statements, whether due to fraud
or error.
Webelievethattheauditevidencewehaveobtained,issufficientandappropriatetoprovideabasisfor our audit opinion on
the Company’s internal financial controls system over financialreporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal financial control over financial
reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures
of the company are being made only in accordance with authorizations of management and directors of the
company; and
(3) providereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,use, or
disposition of the company’s assets that could have a material effect on the financialstatements.
Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility
of collusion or improper management override of controls, material misstatements due to
errororfraudmayoccurandnotbedetected.Also,projectionsofanyevaluationoftheinternalfinancial
controlsoverfinancialreportingtofutureperiodsaresubjecttotheriskthattheinternalfinancialcontrol
overfinancialreportingmaybecomeinadequatebecauseofchangesinconditions,orthatthedegreeof compliance with
the policies or procedures maydeteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in
all material respects, an adequate internal financial controls system over financial reporting and such internal
financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal
control over financial reporting criteria established by the Company considering the essential components of
internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting
issued by the Institute of Chartered Accountants of India.
However the Size and volume of operations of the company, require an extended and enhanced scope forthe present Internal Audit System to ensure coverage of all areas.
For Venkatesh& Co.,Chartered Accountants
F.R.No.004636S
CA Dasaraty VPlace : Chennai M.No.026336Date : 30.05.2018 Partner
56
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
ANNEXURE ‘B’ TO INDEPENDENT AUDITORS’ REPORT
(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section
of our report to the Members of Empee Distilleries Limited of evendate)
i. In respect of the Company’s fixed assets :
(a) The Company has maintained proper records showing full particulars, including quantitative details and
situation of fixedassets.
(b) As explained to us, all the fixed assets have been physically verified by the management during the
year, which in our opinion is reasonable, having regard to the size of the company and the nature of its
assets. No material discrepancies were noticed on such physical verification.
(c) As per information provided to us, the title deeds of immovable properties are held in the name of the
company.
ii. In our opinion and according to information provided to us, the inventories have been physically verified
during the year by the Management and no material discrepancies were not noticed during the physical
verification.
iii. (a) The company has out-standing Interest free loans amounting to Rs. 26.22 crores granted to its related
parties with the repayment of principal being stipulated only from this year.
(b) In the light of (a) we do not comment on the interest or other conditions or security of loans.
(c) In the light of (a) we do not comment on the Payment of principal or interest.
iv. According to explanation given to us, the company has given interest free unsecured loans to its related
parties covered under section 186 of the Companies Act, 2013. Earlier the period of repayment was not
stipulated. However from this year it is stipulated that the same is repayable in 8 years from 01/04/2016 with
the first repayment commencing from FY 2018-19.
v. The Company has not accepted deposits during the year and therefore the provisions of the clause 3 (v) of
the Order are not applicable to theCompany.
vi. In our opinion and according to the explanations given to us, maintenance of cost records has been specified
by the Central Government under sub-section (1) of section 148 of the companies Act,2013.The accounts
and records as prescribed have been maintained.
vii. According to the information and explanations given to us, in respect of statutory dues :
(a) The Company has been regular in depositing undisputed statutory dues, including Income Tax, Service
Tax, Goods and Service Tax, Value Added Tax and other material statutory dues applicable to it with
the appropriate authorities with some delay, except for the TDS of Rs. 2.56 Crores and Service Tax of
Rs. 1.56 Croresand VAT of Rs.117.72 Crores.
(b) According to the records of the Company and as per the information and explanations given to us, there
are no dues of Income tax, Wealth tax, Sales tax, Excise duty and cess which have not been deposited
on account of any dispute except as stated here under:
57
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Sl Name of the statue Nature of Dues Amount Period to which Forum where dispute isNo In Lacs the amount pending relates
1 Income Tax Act, 1961 Income Tax 190.00 2005-06 Income Tax Appellate Tribunal
2 Income Tax Act, 1961 Income Tax 24.49 2008-09 Commissioner of Income Tax
(Appeals)
3 Income Tax Act, 1961 Income Tax 346.09 2009-10 Commissioner of Income Tax
(Appeals)
4 Income Tax Act, 1961 Income Tax 745.89 2010-11 Commissioner of Income Tax
(Appeals)
5 Income Tax Act, 1961 Income Tax 718.94 2011-12 Commissioner of Income Tax
(Appeals)
6 Income Tax Act, 1961 Income Tax 2541.45 2012-13 Commissioner of Income Tax
(Appeals)
7 Income Tax Act, 1961 Income Tax 473.17 2013-14 Commissioner of Income Tax
(Appeals)
8 Income Tax Act, 1961 Income Tax 594.65 2014-15 Commissioner of Income Tax
(Appeals)
9 Income Tax Act, 1961 Income Tax 512.07 2015-16 Commissioner of Income Tax
(Appeals)
10 Central Excise Act, Customs and 594.67 2013-14 The order dt.12-3-2014, of the
1944 Excises Commissioner of customs,
Tuticorin directed to pay
differential duty in the purchase
of coal amounting to
Rs. 28,60,189/-with penalty of
Rs 30,00,000/—and penalty of
Rs.1,00,000/-against individual
name of GM of EDL
viii. Based on our audit procedures and according to the information and explanations given to us, except in the
following casethe company has not defaulted in repayment of dues to financial institutions and banks after
restructuring of the loans.
(Amount in Lacs)
Name of the Principal Interest Total Total Liability Bank Over Due Over Due Over Due as on 31.03.2018
Union Bank of
India 850.29 123.03 973.32 1137.89
Andhra Bank – I 120 49.27 169.27 1473.27
Andhra Bank – II 18 7.76 25.76 51.36
xi. The Company has not raised moneys by way of initial public offer or further public offer (including debt
instruments)or term loans and hence reporting under clause 3(ix) of the Order is not applicable to the
Company.
58
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
x. We had not noticed any fraud by the company or any fraud on the Company by its officers or employees
to be reported during the year
xi. In our opinion and according to information and explanations furnished to us, the Company has not paid
any remuneration to its Directors. Hence requirements of complying with the Provisions of Section 197 of
Companies Act 2013 doesn’t arise.
xii. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of the Order is not applicable
to theCompany.
ixiii. In our opinion and according to the information and explanations given to us, the Company is in compliance
with Section 188 of the Companies Act, 2013 where applicable, for all transactions with the related parties
and the details of related party transactions have been disclosed in the standalone financial statements
as required by the applicable accounting standards. The provisions of Section 177 are complied by the
company.
xiv. During the year, the Company has not made any preferential allotment or private placementof shares or
fully or partly paid convertible debentures and hence reporting under clause 3 (xiv) of the Order is not
applicable to theCompany.
xv. In our opinion and according to the information and explanations given to us, during the year the Company
has not entered into any non-cash transactions with its Directors or persons connected to its directors
and hence provisions of section 192 of the Companies Act, 2013 are not applicable to theCompany.
xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act,1934.
For Venkatesh& Co.,Chartered Accountants
F.R.No.004636S
CA Dasaraty VPlace : Chennai M.No.026336Date : 30.05.2018 Partner
59
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
ANNEXURE ‘C’ - PENDING LITIGATION
S No Case No. Court / Party GIST of the Case Status
CS175of 2005
Appeal filed by EDL
and others before CE,
Tribunal, Chennai.
CMA1026 of 2015
Appeal C/41496/
2014-DB
MACTOP cases
7613,7614,279to281
of 2014
RFA No 119/2015 filed
by us against judgment
in OS 537/2008
dt.29-8-2014 filed by
M/s Vintage Marketing
Before High Court of
Chennai filed by Mohan
Meakin Ltd against EDL
Customs and Excise
Tribunal-SZ Bench At
Chennai
Before the High court of
Madras – Madurai Bench
Before Customs Excise
& Service Tax Appellate
Tribunal, Chennai
SCC-Motor accident
Claims Tribunal
Before High court of
Kerala
1.
2.
3.
4.
5.
6.
Trial Completed.
Pending for high court
hearing.
Stay granted Posted
for final disposal.
before Larger Bench
at Chennai
Pending
Pending for directions
of the court. Counter
to be filed by EDL
Pending,Counter to befiled – Next date is yetto be fixed by thecourt.
Stay on operation ofjudgment granted. Wehave furnished securityand went in appeal.Appeal is pending forfinal disposal
Against Trade Mark logo
Old Secret XXX Rum
Appeal was filed by the Companyagainst the order dt.12-3-2014, ofthe Commissioner of custom,Tuticorin who directed to paydifferential duty in the purchase ofcoal amounting to Rs 28,60,189/-with penalty of Rs 30,00,000/- andpenalty of Rs 1,00,000/-againstindividual name of GM of EDL
Against the order as stated above,and to refer to Larger bench byTribunal
Thecommissioner of customs,Tuticorin filed an appeal against itsorders granting exemption forcustoms duty to the tune ofRs 35,23,458/- under notification46/2011 of coal import from Asiancountries against EDL
Five individuals filed separate claimagainst accident involved by BenzCar TN 10X 5979-in the name ofEDL
Case relates to marketing services -Judgment and Decree forRs 18,01418 with costs and interest@ 18% per annum passed bySubJudge Palakkad against EDL.The Company has filed the appeal.
OP732 of 2015 before
High Court of Madras
against Arbitration
Award passed by
Retd.Justice
J.Kanakaraj
First appeal 264 of
2013, Filed by EDL
Arbitration
Before High court of
Madras
Before Dist. Court at
Nashik, Maharastra
Before Retd .Justice
K.P.Sivasubramaniam
7.
8.
9.
OP by way of Appeal
admitted.Pending for
final disposal.
Pending for orders
Reply and counter
claim for
Rs 22,69,65608/- filed.
Against the Counter
filed by us, Khoday
has filed a rejoinder.
Next hearing is slated
on 22.06.2018
OP filed against the award of
payment of 15,00,000/- with 12 %
interest from the year 2005 against
the Arbitration raised by
Mrs.Indumathi of RVS Enterprises,
Pondicherry against EDL and others.
Counter claim by EDL also filed.
Filed against the judgment in Suit11/2002 filed by M/s. DolphinImpressions P Ltd, Nashik for theclaim of Rs 5,43,661, with interest@24%
Initiated by M/s Khoday India Ltd
against EDL for dispute and claim of
Rs. 22,45,11,819/- with interest.
60
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
S No Case No. Court / Party GIST of the Case Status
OA 87/2017
CP 280/2018
CS 28 of 2017
MACT OP No.1375/
2014
Cs 161/2018, High
Court of Madras
Before DRT II, Chennai
Before NCLT, Chennai
Bench
Before High Court of
Chennai filed by Mohan
Meakin Ltd against EDL
Small causes court –
Motor accident Claims
Tribunal, Chennai
High Court of Madras –
Gimpex Pvt. Ltd filed a
suit for recovery of dues
of Rs.19.51 crs payable
by ESCL. Since EDL has
undertaken to pay partly
EDL has been included as
a Party.
10.
(a)
10.
(b)
11.
12.
13.
Ex parte order is being
set aside.
NCLT adjourned the
case to 7th June 2018
since the Company
has indicated a
settlement scheme to
UBI.
Aruguments
completed. Reserved
for orders.
Pending counter to be
filed.
Case came up for
hearing on 28 3 2018
and High court closed
all the applications of
Gimpex and EDL and
directed TASMAC not
to pay dues if any
from 9/2/2018 to
19/3/2018 to any
entity. According to
the Company we have
settled all the dues by
way of transfer of
apartments at
whitefield, Bangalore.
The suit is pending.
UBI filed an original application
against the company for a claim of
Rs.12.45 Crores alongwith interest .
UBI filed a company ptn. before
NCLT for the recovery of a claim
amount of Rs.12.45 crs alongwith
interest
Against EDL for interest of Rs.3.00
crs on the overdues already paid
(Rs.7.50crs)
Accident -Compensation of Rs
4,00,000/- against involvement of
vehicle TN01AC 2460 TATA ACE of
Empee Distilleries Ltd by Miss
Abinaya D/o Karunakaran.
Gimpex besides filing a suit, moved
a garnishee application against EDL
to attach the receivables of
TASMAC.
61
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
BALANCE SHEET AS AT MARCH 31, 2018(Currency: Indian Rupees in Lakhs)
Particulars Note No. 31/3/2018 31/3/2017
A) Non - Current Assets
a) Property Plant and Equipment 2.1 30,780.47 31,404.31
b) Financial Assets
(i) Investments 2.2 18,465.42 18,464.93
(ii) Trade Receivables 2.3 328.01 328.01
(iii) Loans 2.4 3,172.07 2,899.40
B) Current Assets
a) Inventories 2.5 5,864.58 7,653.40
b) Financial Assets
(i) Trade Receivables 2.6 7,780.57 6,180.11
(ii) Cash and cash Equivalents 2.7 172.36 139.59
(iii) Advances 2.8 4,680.07 4,047.01
c) Other Current assets 2.9 29.18 51.13
Total Assets 71,272.73 71,167.90
62
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
(Currency: Indian Rupees in Lakhs)
As per our report of even date
for Venkatesh & Co.,Chartered AccountantsFirm Registration No.04636S
CA Dasaraty VPartnerMembership No.026336
Place : ChennaiDate : 30.05.2018
For and on behalf of the Board of Directors of
EMPEE DISTILLERIES LTD
M.P. Purushothaman Shaji Purushothaman Chairman Managing Director
N. Chandrasekaran R. Venkatesh Chief Financial Officer Company Secretary
Particulars Note No.
EQUITY & LIABILITIES
A) Equity
a) Equity Share Capital 3.1 2,017.58 2,017.58
b) Other Equity 3.2 21,870.53 29,560.11
B) LIABILITIES
Non - Current Liabilities
a) Financial Liabilities
(i) Borrowings 3.3 6,890.57 8,143.48
b) Provisions 3.4 154.56 151.33
c) Deferred tax liabilties (net) 3.5 7,727.39 4,545.28
d) Other Non Current Liabilities 3.6 2,928.47 2,715.03
Current Liabilities
a) Financial Liabilities
(i) Borrowings 3.7 6,367.31 6,606.84
(ii) Trade Payables 3.8 6,388.35 7,934.68
(iii) Other financial Liabilities 3.9 2,120.26 1,798.90
b) Provisions 3.10 14,807.71 7,694.67
Total Equity & Liabilities 71,272.73 71,167.90
31/3/2018 31/3/2017
63
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
STATEMENT OF PROFIT AND LOSSFOR THE YEAR ENDED MARCH 31, 2018
(Currency: Indian Rupees in Lakhs)
Particulars Note No.
I. Revenue from operations 4.1 51,149.61 49,922.44
II. Other income 4.2 121.85 238.03
III. Total Revenue (I + II) 51,271.47 50,160.47IV. Expenses :
Cost of materials consumed 5.1 16,637.00 17,550.90
Changes in inventories of finished goods,
work-in-progress 5.2 553.22 (866.05)
Employee benefits expense 5.3 1,927.66 2,014.87
Finance costs 5.4 2,824.74 2,805.82
Depreciation and amortization expense 2.1 736.77 275.42
Other expenses 5.5 33,015.12 30,776.41
Total Expenses 55,694.52 52,557.37
V. Profit / (loss) before exceptional items and tax (4,423.05) (2,396.90)
VI Exceptional items - 2,769.00
VII Other Comprehensive Income 5.6 -64.67 (1,976.28)
VIII Profit / (loss) before tax (4,487.72) (1,604.18)
IX Tax Expenses :
(1) Current Tax - -
(2) Deferred Tax 3,182.11 3,546.41
IX Profit (Loss) for the period from continuing operations (7,669.83) (5,150.59)
X Profit (Loss) for the period from discontinued operations - -
XI Profit (Loss) for the period (7,669.83) (5,150.59)
XI Earnings Per Share :
(1) Basic (0.00038) (0.00026)
(2) Diluted (0.00038) (0.00026)
As per our report of even date
for Venkatesh & Co.,Chartered AccountantsFirm Registration No.04636S
CA Dasaraty VPartnerMembership No.026336
Place : ChennaiDate : 30.05.2018
For and on behalf of the Board of Directors of
EMPEE DISTILLERIES LTD
M.P. Purushothaman Shaji Purushothaman Chairman Managing Director
N. Chandrasekaran R. Venkatesh Chief Financial Officer Company Secretary
31/3/2018 31/3/2017
64
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Particulars Year ended Year endedMar. 31, 2018 Mar. 31, 2017
A. Cash Flow from Operating Activities
Net Profit before taxation (4,423.05) (2,396.90)
Adjustments for:
Depreciation on fixed assets 736.77 275.42
Interest expense 2,803.39 2,775.74
Other Comprehensive Income (64.67) (1,976.28)
Interest income (5.86) (7.62)
Operating Profit before Working Capital changes (953.41) (1,329.65)
Adjustments for :
(Increase) / Decrease in Inventories 1,788.82 (1,195.73)
(Increase) / Decrease in Trade receivables (1,600.46) 448.87
(Increase) / Decrease in Current Assets (611.11) (372.41)
(Increase) / Decrease in Non Current Assets (0.49) (1.50)
(Increase) / Decrease in Long term loans and advances (272.66) (1,332.37)
Increase / (Decrease) in Liabilities (1,224.97) (448.08)
Increase / (Decrease) in Other long term liabilities 213.44 (917.57)
Increase / (Decrease) in Long term Provisions 3.23 12.96
Increase / (Decrease) in Provisions 7,113.04 (461.09)
CASH GENERATED FROM OPERATIONS 4,455.43 (5,596.55)
Income tax Paid - -
Income tax Reversal - -
Net Cash inflow from/ (outflow) from Operating activities 4,455.43 (5,596.55)
B. Cash Flow from Investing Activities
(Purchase) of investments - 2,769.00
Purchase of fixed assets (including CWIP) (132.69) (15.86)
Sale Proceeds from fixed assets - -
Interest received 5.86 7.62
Dividend received - -
Net Cash inflow from/ (outflow) from Investing activities (126.84) 2,760.76
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2018(Currency: Indian Rupees in Lakhs)
65
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Particulars Year ended Year endedMar. 31, 2018 Mar. 31, 2017
C. Cash Flow from Financing Activities
Increase in Working Capital Loan (239.52) (414.08)
Increase in Term Loan (1,252.91) 4,968.57
Interest paid (2,803.39) (2,775.74)
Dividend paid - -
Increase in share capital and securities premium - 753.10
Dividend distribution tax paid - -
Net Cash inflow from/ (outflow) from Financing activities (4,295.82) 2,531.85
Net increase / (decrease) in cash and cash equivalents 32.77 (303.94)
Opening Cash and Cash Equivalents
Cash in hand 24.25 11.79
Bank balances 115.34 431.75
139.59 443.54
Closing Cash and Cash Equivalents
Cash in hand 14.26 24.25
Bank balances 158.10 115.34
172.36 139.59
(Currency: Indian Rupees in Lakhs)
As per our report of even date
for Venkatesh & Co.,Chartered Accountants
Firm Registration No.04636S
CA Dasaraty V
Partner
Membership No.026336
Place : Chennai
Date : 30.05.2018
For and on behalf of the Board of Directors of
EMPEE DISTILLERIES LTD
M.P. Purushothaman Shaji Purushothaman Chairman Managing Director
N. Chandrasekaran R. Venkatesh Chief Financial Officer Company Secretary
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Notes forming part of financial statements for the year ended March 31, 2018
Note 1: SIGNIFICANT ACCOUNTING POLICIES
1.1 Basis of Accounting :
These consolidated financial statements have been prepared in accordance with the Indian Accounting Standards
(referred to as “Ind AS”) prescribed under Section 133 of the Companies Act, 2013 read with the Companies
(Indian Accounting Standards) Rules as amended from time to time.
1.2 Current and Non Current Classification :
All assets and liabilities have been classified as current or non-current as per the Company’s normal operating
cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products
and the time between the acquisition of assets for processing and their realization in cash and cash equivalents,
the Company has determined its operating cycle as twelve months for the purpose of current-non current
classification of assets and liabilities.
1.3 Use of Estimates
The preparation of consolidated financial statements in conformity with the recognition and measurement principles
of Ind AS requires management to make estimates and assumptions that affect the reported balances of assets
and liabilities, disclosures of contingent liabilities at the date of the consolidated financial statements and the
reported amounts of income and expenses for the periods presented.
1.4 Revenue Recognition ( Ind AS 18 )
Revenue is recognized only when it can be readily measured and it is reasonable to expect ultimate collection.
Revenue from operations includes sale of goods, services, sales tax, service tax and excise duty adjusted for
discounts (net) and Value added tax. Dividend income is recognized when right to receive is established.
Interest income is recognized on time proportion taking into account the amount outstanding and rate applicable.
1.5 Property, Plant & Equipment ( Ind AS 16 )
Fixed assets are stated at cost less accumulated depreciation /amortization. Direct costs are capitalized until
fixed assets are ready for use. These costs include freight, installation costs, duties and taxes and other directly
attributable costs incurred to bring the assets to their working condition for intended use. The company has been
able to complete the Component based depreciation as per the applicable India accounting Standard as per the
technical opinion obtained stating that the useful life of significant component of the asset is not different from
the useful life of the fixed assets.
Depreciation on fixed assets is provided using the straight-line method at the rates specified in Schedule II to the
Companies Act, 2013 as per the new provisions.
Depreciation is calculated on a pro-rata basis for assets purchased / sold during the year with reference to the
month in which the fixed assets are put to use or commissioned.
Capital Work-in-progress comprises outstanding advances paid to acquire fixed assets and the cost of fixed
assets that are not yet ready for their intended use at the balance sheet date. Capital work-in progress is stated
at cost.
1.6 Borrowing cost ( Ind AS 33 )
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part
of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready
for its intended use. All other borrowing costs are charged to profit and loss account.
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EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
1.7 Impairment of Fixed Assets ( Ind AS 36 )
As asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment
loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired except for
the Investments made. The impairment loss recognized in the prior accounting period is reversed if there has
been a change in the estimate of recoverable amount.
1.8 Cash flow Statement ( Ind AS 7 )
Cash flows are reported using the indirect method, whereby profit / (loss) after tax is adjusted for the effects of
transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments.
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions
of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows
from regular revenue generating, financing and investing activities of the Company are segregated.
1.9 Investments ( Ind AS 40 )
Current investments are carried at lower of cost and quoted/fair value. Long term investments are stated at cost.
Provision for diminution in the value of long term investments is only if such a decline is other than temporary.
Investment by Empee Distilleries Ltd in subsidiaries
In Equity Shares :
Sl No. Name of the Company No of shares held
1 Empee Sugars and Chemicals ltd 26,360,532
2 EDL Properties Ltd 750,000
3 Appollo Distilleries & Breweries Pvt Ltd 41,846,500
1.10 Inventories ( Ind AS 2 )
Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any.
Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing
overheads incurred in bringing them to their respective present location and condition. Cost of raw materials,
stores and spares are determined on first-in-first-out basis while finished goods are determined on weighted
average basis.
1.11 Foreign Currency Transaction ( Ind AS 21 )
a) Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of
transaction or that approximates the actual rate at the date of transaction.
b) Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of
items which are covered by forward exchange contracts, the difference between the year end rate and rate on the
date of contract is recognized as exchange difference and the premium paid on forward contracts is recognized
over the life of the contract.
c) Non monetary foreign currency items are carried at cost.
d) Any income or expense on account of exchange difference either on settlement or on translation is recognized
in the Statement of Profit and Loss except in case of long term liabilities, where they relate to acquisition of fixed
assets, in which case they are adjusted to the carrying cost of such assets.
1.12 Prior Period and Extra Ordinary Items ( Ind AS 8 )
Prior Period and Extra Ordinary items having material impact on the financial affairs of the Company are disclosed,
wherever applicable. There is no major deviation in the accounting policy during the current year.
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EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
1.13 Provision for Current Tax and Deferred Tax
Provision for current tax is made after taking into consideration benefits admissible under the provisions of the
Income Tax Act, 1961. Deferred tax resulting from “timing difference” between taxable and accounting income is
accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet
date. Deferred tax asset is recognized and carried forward only to the extent that there is virtual certainty that the
asset will be realized in future.
1.14 Provisions, Contingent Liabilities and Contingent Assets ( Ind AS 37 )
Provisions involving substantial degree of estimation in measurement are recognized when there is a present
obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent
Liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor
disclosed in the financial statements.
1.15 Earnings per Share ( Ind AS 33 )
Basic earnings per share is computed by dividing the profit after tax by the weighted average number of equity
shares outstanding during the year/period. Diluted earnings per share is computed by dividing the profit after tax
as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity
shares, by the weighted average number of equity shares considered for deriving basic earnings per share and
the weighted average number of equity shares which could have been issued on the conversion of all dilutive
potential equity shares.
1.16 Employee Benefits ( Ind AS 33 )
a) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of
Profit and Loss of the year in which the related services are rendered.
b) Post-employment and other long term employee benefits are recognized as an expense in the Statement of
Profit and Loss for the year in which employee has rendered services. The expense is recognized at the present
value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in
respect of post employment and other long term benefits are charged to the Statement of Profit and Loss.
69
Particulars
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED MARCH 31, 2018
NOTE 2 : Notes on Accounts - ASSETS
2.1 Property Plant & Equipment(Currency: Indian Rupees in Lakhs)
Land 18,366.00 18,366.00
Buildings 2,883.28 2,971.00
Plant and Equipment 9,292.75 9,809.00
Furniture and Fixtures 7.88 8.71
Vehicles 217.25 233.70
Office Equipments 13.14 15.90
Computers 0.17 -
Total 30,780.47 31,404.31
Investments in Equity Instruments 4,419.83 4,420.00
Investments in Preference Shares - -
Investments in Mutual Funds 9.09 8.43
Other investments 14,036.50 14,036.50
Total 18,465.42 18,464.93
Aggregate amount of Quoted Investments: 169.27 168.78
Aggregate amount of UnQuoted Investments: 18,296.15 18,296.15
2.2 Investments
Particulars
Particulars
Secured Considered good - -
Unsecured Considered good 328.01 328.01
Doubtful - -
Total 328.01 328.01
2.3 Trade Receivables
31/3/2018 31/3/2017
31/3/2018 31/3/2017
31/3/2018 31/3/2017
70
Particulars
Particulars
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
(Currency: Indian Rupees in Lakhs)
Raw materials 3,016.59 4,252.19
Work-in-progress 684.23 842.57
Finished goods 2,163.76 2,558.64
Total 5,864.58 7,653.40
Unsecured Considered good
Outstanding for a period less than six months 5,822.32 4,676.03
Outstanding for a period exceeding six months 1,958.25 1,504.08
Total 7,780.57 6,180.11
2.6 Trade Receivables
2.7 Cash and cash equivalents
Cash On Hand 14.26 24.28
Balances with Banks 151.63 103.37
Balances lying in unpaid dividend account 6.47 11.94
Total 172.36 139.59
2.5 Inventories (at Cost or NRV whichever is Lower)
Particulars
Particulars
2.4 Loans (Unsecured)
Security Deposits
Depostis - with government departments 484.33 506.09
Other Deposits 64.75 64.75
Loans to related parties 2,622.98 2,328.56
Total 3,172.07 2,899.40
31/3/2018 31/3/2017
31/3/2018 31/3/2017
31/3/2018 31/3/2017
31/3/2018 31/3/2017
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EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Particulars
Particulars
2.8 Advances
Security Deposits 10.45 12.00
Other Advances (unsecured) 4,669.62 4,035.01
Total 4,680.07 4,047.01
2.9 Other Current Assets
Prepaid Expenses 29.18 51.13
Total 29.18 51.13
(Currency: Indian Rupees in Lakhs)
31/3/2018 31/3/2017
31/3/2018 31/3/2017
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EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Notes on Accounts - EQUITY & LIABILITIES
3.1 Share Capital(Currency: Indian Rupees in Lakhs)
Authorised Capital3,00,00,000 Equity Shares of Rs.10/- each 3,000.00 3,000.00
Total 3,000.00 3,000.00
Issued, Subscribed & Paid-up Capital2,01,75,753 Equity Shares of Rs.10/- each fully paid up 2,017.58 2,017.58
1,90,08,893 Equity Shares of Rs10/- each fully paid up - -
Total 2,017.58 2,017.58
Number of Equity Shares at the beginning and end of the reporting year
Details of Shareholders holding more than 5% shares in the company
Particulars
Shares outstanding at the beginning of the year 20,175,753 2,018 19,008,893 1,900.89
Shares issued during the year - - 1,166,860 116.69
Shares outstanding at the close of the year 20,175,753 2,017.58 20,175,753 2,017.58
As at 31-03-2018 As at 31-03-2017
No. ofshares Amount
No. ofshares
Amount
Particulars
Mr.M.P. Purushothaman 2,094,514 10.83% 2,094,514 10.83%
Mrs.Aruna Purushothaman 1,800,000 8.92% 1,800,000 8.92%
Mrs.Nisha Purushothaman 1,002,000 4.97% 1,002,000 4.97%
Mr.Sheeju Purushothaman 1,002,000 4.97% 1,002,000 4.97%
Mrs.Sheena Purushothaman 888,923 4.41% 888,923 4.41%
M/s.Empee Holding Ltd 4,471,301 22.16% 4,875,273 24.16%
As at 31-03-2018 As at 31-03-2017
No. ofshares
% ofHoldings
No. ofshares
% ofHoldings
Particulars 31/3/2018 31/3/2017
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EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Particulars
(Currency: Indian Rupees in Lakhs)
3.2 Other Equity
Revaluation Reserve
Opening balance 1,573.16 1,592.94
Add : Addition during the year - -
1,573.16 1,592.94
Less: Deduction during the year 19.78 19.78
Closing Balance (A) 1,553.38 1,573.16
General Reserve
Opening balance 6,821.96 6,821.96
Add: Addition during the year (IND AS) - -
6,821.96 6,821.96
Less: Deduction during the year - -
Closing Balance (B) 6,821.96 6,821.96
Securities Premium Account
Opening balance 18,051.00 17,414.59
Add: Premium credited - 636.41
18,051.00 18,051.00
Less: Premium utilised during the year - -
Closing Balance (C) 18,051.00 18,051.00
Profit & Loss Account
Surplus from Profit & Loss Account 3,113.99 8,264.58
Add: Profit/(Loss) for the year (7,670) (5,151)
Add: Other adjustments on account of transition to Ind AS - -
(4,555.83) 3,113.99
Less: Deduction during the year - -
Closing Balance (D) (4,555.83) 3,113.99
Total (A to D) 21,870.53 29,560.11
31/3/2018 31/3/2017
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EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Particulars
Particulars
(Currency: Indian Rupees in Lakhs)
Bonds or debentures 14 % Redemable-Non-Convertible Debentures 3,562.50 4,512.50
(Secured by the properties at Kuthambakkam Village,
Arabikothanur Village, Fixed Assets and Current Assets
at Palakad, Kolar and Chotkur. Personal Guarantee of the
Directors & Pledge of 51% of their holding in
Equity shares of the company.)
Term Loans(I) from banks
60 Klpd project in Chotkur, Andhrapradesh
Andhra Bank 1,152.23 1,578.05
Union Bank of India 969.80 943.68
(lI) from other Parties
(Loans from banks were Secured by way of first charge
on pari-pass basis on the fixed assets including plant
and machineries of grain based division at Sangareddy,
AP. Second paripassu charge on current assets and
personal guarentee of Directors)
Secured
SBI Global Factors 459.39 121.31
(SBI Global factors were secured by book debts and
Personal Guarantee of the directors and this is repayable
in 24 installments of Rs.30.04 Lakhs per installment)
UnsecuredOthers 746.65 987.94
Total 6,890.57 8,143.48
Aggregate amount of Loans Guaranteed by Directors 6,890.57 8,143.48
3.3 Borrowings
Provision for employee beneflts
Gratuity payable 148.10 139.39
Other Provisions
Unpaid dividends 6.47 1.94
Total 154.56 151.33
3.4 Provisions
31/3/2018 31/3/2017
31/3/2018 31/3/2017
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EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Particulars
Particulars
3.6 Other Non Current Liabilities
EMD Received from Customer 468.40 468.40
Other Payables 979.75 772.15
Others (Payable to related Parties) 1,480.32 1,474.48
Total 2,928.47 2,715.03
3.7 Borrowings
Bonds or debentures
Term Loans
(I) from banks
a) Cash Credit Loan 5,637.43 5,755.20
(II)from other Parties
IFCI Factors 729.88 851.64
(Secured by Receivables and
Personal Guarantee of the directors)
Total 6,367.31 6,606.84
Aggregate amount of Loans Guaranteed by Directors 6,367.31 6,606.84
Particulars
3.5 Deffered Tax Liability (Currency: Indian Rupees in Lakhs)
WDV as per Companies Act 30,780.47 31,404.31
WDV as per Income Tax Act 5,708.06 6,416.26
Difference 25,072.41 24,988.05
DTL 7,747.37 7,721.31
Investment Revaluation 0.49 (9,532.21)
Group Company Balances ( Receivables ) 144.44 (1,860.27)
Group Company Balances ( Payables ) - 1,177.94
Capital Work In Progress written Off 209.59 (63.87)
Loss 64.67 (10,278.40)
DTA 19.98 (3,176.03)
Net DTL 7,727.39 4,545.28
Opening DTL 4,545.28 998.88
31/3/2018 31/3/2017
31/3/2018 31/3/2017
31/3/2018 31/3/2017
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EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Particulars
Current maturities of long-term debt 2,120.26 1,798.90
Total 2,120.26 1,798.90
3.9 Other Financial Liabilities
Provision for Employee Benefits
-Salary & wages payable 105.81 21.41
-Bonus payable 51.70 76.58
Others
Provision for taxation (net of advance tax) 643.27 669.84
PF payable 24.76 43.09
ESI payable 7.73 5.42
Sales tax payable 11,772.70 4,869.54
GST payable 70.33 - -
Service Tax payable 156.85 163.64
TDS Payable 256.73 190.10
Excise Duty payable 33.07 32.81
Provisions for expenses 1,678.30 1,614.20
Provision for audit fees 6.48 8.05
Total 14,807.71 7,694.67
3.10 Provisions
(Currency: Indian Rupees in Lakhs)
Particulars
3.8 Trade Payables(Currency: Indian Rupees in Lakhs)
Particulars
Trade Payables 6,388.35 7,934.68
6,388.35 7,934.68
The vendors of the Company are yet to submit their status under Micro, Small and Medium Enterprises; hence
the relevant information is not available with the company. Accordingly no disclosures relating to MSME have
been made in books of accounts.
Except for the party Krishna Cap Box, Where the Interest Provision on the amounts due were recognized in
books of accounts amounting to 18.58 Lakhs
31/3/2018 31/3/2017
31/3/2018 31/3/2017
31/3/2018 31/3/2017
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
4.2 Other Income
5.1 Cost of Material Consumed
5.2 Changes in inventories of finished goods, Stock-in-Trade and work-in-progress
Particulars As at As at Mar. 31, 2018 Mar. 31, 2017
Scrap Sales 21.79 38.72
Miscellaneous Income 100.07 199.31
121.85 238.03
Particulars As at As at Mar. 31, 2018 Mar. 31, 2017
Opening Stock of Raw Materials 4,252.19 3,922.51
Add: Purchases of Raw Materials 16,381.15 17,880.59
Less: Closing Stock of Raw Materials 3,996.35 4,252.19
16,637.00 17,550.90
Particulars As at As at Mar. 31, 2018 Mar. 31, 2017
Opening Inventory
Finished Goods 2,558.64 1,715.82
Work-In-Progress 842.57 819.34
3,401.21 2,535.16
Closing Inventory
Finished Goods 2,163.76 2,558.64
Work-In-Progress 684.23 842.57
2,847.99 3,401.21
553.22 (866.04)
Notes on Accounts - PROFIT & LOSS A/C.
4.1 Revenue from Operations (Currency: Indian Rupees in Lakhs)
Particulars As at As at Mar. 31, 2018 Mar. 31, 2017
Sale of Products (Gross) 77,427.17 74,929.67
Less : Excise Duty 27,516.05 26,373.83
49,911.13 48,555.84
Other operating Revenues 1,238.49 1,366.60
51,149.61 49,922.44
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EMPEE DISTILLERIES LIMITED Annual Report 2016 - 2017
5.4 Finanace Cost
Particulars As at As at Mar. 31, 2018 Mar. 31, 2017
Bank Charges 21.35 30.08
Interest Expenses 2,803.39 2,775.74
2,824.74 2,805.82
5.3 Employees Benefit Expenses(Currency: Indian Rupees in Lakhs)
Particulars As at As at Mar. 31, 2018 Mar. 31, 2017
Salaries and incentives 1,687.83 1,773.63
Contributions to -
Provident fund & ESI 85.84 102.20
Gratuity fund contributions 16.05 20.27
Staff welfare expenses 137.93 118.77
1,927.66 2,014.87
5.6 Other Comprehensive Income
Particulars As at As at Mar. 31, 2018 Mar. 31, 2017
Profit as per P&L ( IGAAP ) (3,967.90) (5,441.15)
Add: IGAAP Depreciation 3,977.78 3,035.63
Fixed Asset Revaluation / Depreciation (756.551) 275.42
Investment Revaluation 0.49 1.50
Group Company Balances (Receivables) 144.44 (643.98)
Group Company Balances (Payables) (209.59) (1,269.93)
Capital Work In Progress written Off - (63.871)
Profit as per P&L (IND AS) 821.22 (2,251.70)
Profit on Sale of Shares to be recognized (Extra Ordinary Item) - 2,769.00
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EMPEE DISTILLERIES LIMITED Annual Report 2016 - 2017
5.5 Other Expenses
Particulars As at As at Mar. 31, 2018 Mar. 31, 2017
Manufacturing expenses 1,019.71 1,310.96
Excise Label 460.96 358.75
VAT 27,222.42 25,017.03
Interest On VAT 1,153.04 229.80
Interest On MSME Payables 18.58 -
Rent 63.84 75.36
Rates & Taxes 415.27 371.28
Audit Fees 7.08 8.05
Postage & Telegram 3.18 4.01
Printing and Stationery 8.67 14.75
Repairs and Maintenance 46.78 70.41
Donations 1.95 4.31
Sitting Fee 3.95 7.30
Telephone Expenses 23.36 25.58
Managerial Remuneration - 85.04
Consulting Charges 60.02 145.18
Travelling Expenses 52.62 77.97
Travelling Expenses - Directors 10.35 9.94
Miscellaneous Expenses 448.82 514.49
Discounting Charges -Tasmac 311.78 227.60
Advertisement & Publicity 3.22 1.41
Travelling Expenses - Marketing - 7.66
Freight & Handling Charges 308.75 361.24
Loading & Unloading charges 32.13 193.52
Sales Promotion expenses 9.61 24.33
Cash Discount 701.85 514.01
Other Selling expenses 627.18 1,116.41
33,015.12 30,776.41
(Currency: Indian Rupees in Lakhs)
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EMPEE DISTILLERIES LIMITED Annual Report 2016 - 2017
6. OTHER NOTES
6.1 Contingent Liabilities, Guarantees & Capital commitments
A. Contingent Liabilities (Currency: Indian Rupees in Lakhs)
Particulars 31.03.2018 31.03.2017
a) Claims against the company not acknowledged as debts 28.00 36.19
b) Disputed Income tax demand 5,352.48 1,859.5
c) Disputed Central Excise 59.60 59.60
d) Disputed Cases 28.00 20.64
e) Bank Guarantees Nil 3,94.18
B. Capital Commitments
Particulars 31.03.2018 31.03.2017
Estimated amount of capital contracts remaining to be executed - -
6.2 Employee Benefits
a) Defined Contribution Plans : Contribution to defined contribution plan, recognized as expenses for the FY
2017-18 pertaining to employers’ contribution to provident fund, Employees State Insurance Funds, Gratuity
fund.
b) Defined Benefit Plans :
Leave encashment :
The company has dispensed off the leave encashment policy during the current period; hence no provision
had been recognized in the books of accounts for the period.
Gratuity :
The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to 15 days
salary (includes dearness allowance) last drawn for each completed year of service. The same is payable on
termination of service, or retirement, or death whichever is earlier. The benefit vests after five years of
continuous service.
(i) The changes in the present value of defined benefit obligation representing reconciliation of opening and
closing balances thereof are as follows :
(Currency: Indian Rupees in Lakhs)
Particulars As at As at 31 Mar 2018 31 Mar 2017
1 Present value of obligation at the beginning of the year 138.58 122.89
2 Interest cost 10.45 9.80
3 Current service cost 15.36 14.60
4 Benefits paid (7.34) (3.77)
5 Actuarial (gain) / loss on obligation (8.95) (4.94)
6 Present value of obligation at the end of year 148.09 138.58
(ii) The changes in the fair value of plan assets representing reconciliation of opening and closing balances
thereof are as follows :
Particulars As at As at 31 Mar 2018 31 Mar 2017
1 Present value of obligation at the beginning of the year 138.58 122.89
2 Interest cost 10.45 9.80
3 Current service cost 15.36 14.60
4 Benefits paid (7.34) (3.77)
5 Actuarial (gain) / loss on obligation (8.95) (4.94)
6 Present value of obligation at the end of year 148.09 138.58
(iii) Actuarial gain / loss recognized as follows :
Particulars As at As at 31 Mar 2018 31 Mar 2017
1 Fair value of plan assets at the beginning of the year 22.20 20.75
2 Expected return on plan assets 1.58 1.61
3 Contributions 7.34 3.77
4 Benefits paid (7.34) (3.77)
5 Actuarial gain / (loss) on plan assets - (0.15)
6 Fair value of plan assets at the end of year 23.78 22.20
(Currency: Indian Rupees in Lakhs)
(iv) The amounts recognized in Balance Sheet are as follows :
Particulars As at As at 31 Mar 2018 31 Mar 2017
1 Present value of obligation as at the end of the year 138.58 138.58
2 Fair value of plan assets as at the end of the year 23.78 22.20
3 Funded / (unfunded) status (114.80) (116.37)
4 Excess of actual over estimated - -
5 Net assets / (liability) recognized in balance sheet (114.80) (116.37)
(v) The amounts recognized in Profit and Loss Account are as follows :
Particulars As at As at 31 Mar 2018 31 Mar 2017
1 Current service cost 15.36 14.60
2 Past service cost
3 Interest cost 10.45 9.80
4 Expected return on plan assets (1.72) (1.61)
5 Net actuarial (gain)/loss recognized in the year (8.82) (4.78)
6 Expenses recognized in the statement of profit and losses 15.27 18.01
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
81
82
(vi) Principal actuarial assumptions at the balance sheet date are as follows :
A. Economic Assumptions
The principal assumptions are the discount rate and salary growth rate. The discount rate is generally based
upon the market yield available on the Government bonds at the accounting date with a term that matches that
of the liabilities and salary growth rate takes account of inflation, seniority, promotion and other relevant factors
on long term basis
B. Demographic Assumption
Particulars As at As at 31 Mar 2018 31 Mar 2017
1. Discount rate 7.75% 7.50%
2. Salary growth rate 6% 6%
1. Retirement Age 58 Years (58 years ) previous year
2. Mortality table LIC (1994-96) duly modified
3. Withdrawal Rates Ages Withdrawal Rate (%)
Up to 30 Years 7%
Up to 44 Years 4%
Above 44 Years 3%
6.3 Balances with regard to Other advances, Sundry Debtors, Trade payables, Loans and advances of Related
Parties, Long term Liabilities are subject to confirmation from the party concern.
6.4 Related party transactions (Ind AS 24)
Related Parties :
Subsidiary Company
Empee Sugars & Chemicals Limited
EDL Properties Limited
Appollo Distilleries & Breweries Private Limited
Empee Power Company (India) Limited
Appollo Wind Energy Pvt. Ltd
Key Management Personnel
Mr.M.P.Purushothaman Chairman
Mr.Shaji Purushothaman Director
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
83
Other related parties
Empee Holdings Limited
Empee International Hotels & Resorts Limited
South (India) Hotels Pvt Ltd
Appollo Alchobev Limited
Aruna Exports Pvt Ltd
Empee Hotels Limited
Aruna Constructions (India) Limited
Empee Agro Farm Products Pvt Ltd
Empee Marine Products Limited
Appollo Beers Pvt Ltd
Empee Leasing & Finance Limited
Empee Communications Limited
Universal Spirits Ltd
Empee Construction Company Ltd
Empee Power & Infrastructure Pvt Ltd
Empee Packaging Industries
Aruna Constructions
Empee Hospitality Pvt. Ltd
Transactions with Related parties
Remuneration Nil Nil Nil Nil Nil
(-) (85.04) (-) (-) (85.04)
Receiving of Services Nil Nil Nil 167.88 167.88
(-) (-) (-) (159.69) (159.69)
Rent Paid Nil Nil Nil 62.17 62.17
(-) (-) (-) (60.93) (160.93)
HoldingCompany
KeyManagement
Personnel
Relatives of KeyManagement
Personnel
Otherrelatedparties
For theyear ended
31.03.18Particulars
With regard to Group Company Loans and advances there is no stipulation as to Principal or Interest in earlier
years, however in the current financial year the said amount is converted into Interest free Unsecured loan with a
stipulation as to repay in 8 financial years starting the first installment from FY 2018-19.
6.5 Quantum of Excise Duty included in closing stock of finished goods is Rs. 658.49 Lakhs.
6.6 Payment to Auditors
Particulars Year ended Period ended 31 March 2018 31 March 2017
Statutory audit fee 6.00 6.00
Limited Review Fees 1.00 1.00
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
84
6.7 The Company received share application money of Rs.140.36 Crores from promoters namely Empee
Distilleries Limited (EDL), the holding Company from 7th July 2008 to 30th September 2012. The Company
had to allot 0% convertible preference shares to EDL the holing Company and since stock exchange
(BSE) and SEBI approvals could not be obtained, the same is kept pending. In the meantime due to
erosion of the entire net worth of the Company, the Company was registered as a Sick Company under
the provisions of SICA with BIFR vide its orders dated 14.11.2014. When BIFR proceedings were at
progress, the GOI abolished SICA and introduced IBC in its place in December 2016 and as a result the
BIFR was abolished. Hence the Company filed an application under the provisions of IBC before NLCT,
Hyderabad as a corporate debtor. But most of the Bank loans aggregating to 92% of the total bank
borrowings are assigned to ARC, Edelweiss Reconstruction Company Ltd, (EARC) Mumbai, the Company
thought it appropriate to withdraw the IBC application. However the share application is still pending in
the books of the Company to be converted into shares. Due to serious financial issues and impending
problems challenging the company’s survival, the Company thought it appropriate to convert the said
money into unsecured loan and hence requested the holding company accordingly. The holding company
has accepted the proposal vide its board decision dated 30.05.2018. Hence the Company will approach
Edelweiss Reconstruction Company Ltd, Mumbai, for the said conversion and also seek the shareholders’
approval in the forthcoming AGM to be held in September 2018.
6.8 The Company has issued 14% Secured, Listed, Redeemable Non-convertible Debentures amounting to
Rs.47.50 Crores under private placement basis. As per the provisions of the Companies Act, 2013 and
pursuant to the circular dated 11/02/2013 issued by the Ministry of Corporate Affairs, the Company has
been mandated to provide a Debenture Redemption Reserve (DRR) at the rate of 15% of the principal
amount of Debentures which would be redeemed during the current financial year i.e. 2018-2019 and
this works out to Rs.1.43 Crores. Such DRR needs to be created latest by 30th April 2018. Since the
Company has incurred loss for the FY ended 31/03/2018 and is also facing with financial difficulties, the
DRR could not be deposited in a ‘no lien account’ with the banks.
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
85
EMPEE DISTILLERIES LIMITED Annual Report 2016 - 20172.
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86
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
INDEPENDENT AUDITOR’S REPORTToThe Members ofEmpee Distilleries Limited
Report on Consolidated Financial Statements
We have audited the accompanying ConsolidatedFinancial Statements of Empee Distilleries Limited (“the Holding
Company”), and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”)
comprising of the Consolidated Balance Sheet for the year ended as at March 31, 2018, the Consolidated
Statement of Profit and Loss, the Consolidated Cash Flow statement for the yearended on that date, and a
summary of significant accounting policies and other explanatory information (hereinafter referred to as “the
Consolidated Financial Statements”).
Management’s Responsibility for the Financial Statements
The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial
statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as “the Act”) that give
a true and fair view of the consolidated financial position, consolidated financial performance and consolidated
cash flows of the Group in accordance with the accounting principles generally accepted in India, including the
Indian Accounting Standards referred to in Section 133of the Act, read with (Indian Accounting Standards)Rules,
2015 as amended, and other Accounting Principles generally accepted in India.
The respective Board of Directors of the companies included in the Group are responsible for maintaining adequate
accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for
preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting
policies; making judgements and estimates that are reasonable and prudent; and the design, implementation
and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy
and completeness of accounting records, relevant to the preparation and presentation of the financial statements
that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have
been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding
Company, as aforesaid.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. While
conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards
and matters which are required to be included in the audit report under the provisions of the Act and Rules made
there under.
We conducted our audit in accordance with the Standards on Auditingspecified under section 143(10) of the Act.
Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud
or error. In making those risk assessments, the auditor considers internal control relevant to the Holding Company’s
preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures
that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Holding
Company has an adequate internal financial controls system over financial reporting in place and the operating
effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well
as evaluating the overall presentation of the consolidated financial statements.
87
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms
of their reports referred in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for
our audit opinion on the consolidated financial statements.
Other Matters
Consolidation of financial statements consists of M/s. Empee Distilleries Limited, M/s. Appollo Distilleries Private
Limited and M/s. EDL Properties Limited. Financial statements of Empee Sugars and Chemicals Limited and its
subsidiaries have not been considered for the purpose of consolidation of accounts for the 12 months period
ended 31stMarch 2018 on account of which net worth is higher by Rs. 32,950.82 Lacs.
We did not audit the financial statements of M/s. Empee Power Company (India) Limited a subsidiary of
Companywhose financial statements reflects total assets of Rs.76.12 Crores as at 31st March, 2018 and total
revenue (net) of 1.33 crores for the year ended on that date, as considered in the consolidated financial statements.
These financial statements of M/s. EmpeePower Company (India) Limited have been audited by other auditors
for the year ended 31st March 2017 and whose report have been furnished to us by the management.
Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements
below, is not modified in respect of the above matters with respect to our reliance on the work done and the
reports of the other auditors and the financial statements/ financial information certified by the Management.
Basis for Qualified Opinion
a. The company has made an investment of Rs.1.59 Crores as Equity Shares and further investment by way
of share application money of Rs.140.36 Crores to its subsidiary Empee Sugars and Chemicals Limited.
The Company Empee Sugars have been incurring losses. No Provision for diminution in the value of
investment in respect of the above company has been considered in the accounts.
b. Other Advances amounting to Rs. 31.01 Crores out of 46.80 Crores under the head Current Financial
Assets, Sundry Debtors Rs.77.80 Crores and Loan and advances to related parties Rs. 26.22 Crores,
Other Long Term Liabilities Rs. 29.28 Crores and Trade Payable of Rs. 63.88 Crores and debit balances of
Suppliers account of Rs. 25.84 Crores are subject to confirmation and reconciliation. The impact on
profitability is not ascertainable.
c. In respect of Appollo Distilleries & Breweries Limited, subsidiary company, Trade Payables of Rs. 5,65,50,491/-
and Other Payables of Rs. 12,75,97,139/- Crores is subject to confirmation and reconciliation. The effect
of the same on the financial position is not ascertainable.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the
effects of the matter described in the Basis for Qualified Opinion paragraph, the aforesaid consolidated financial
statements give the information required by the Act in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India, of of the state of affairs of the Company as
at March31, 2018, and its loss, total comprehensive income, the changes in equity and its cash flows for the year
ended on that date
Report on Other Legal and Regulatory Requirements :-
1. As required by section 143(3) of the Act, we report, to the extent applicable, 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 of the aforesaid consolidated financial statements.
b) In our opinion proper books of account as required by law relating to the preparation of aforesaid consolidatedfinancial statements have been kept by the Group so far as it appears from our examination of those booksand the report of the other auditors.
88
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, and Consolidated CashFlow Statement dealt with by this Report are in agreement with the relevant books of account maintained forthe purpose of preparation of consolidated financial statements.
d) In our opinion, theaforesaid consolidated financial statements comply with the Indian Accounting Standardsreferred to in Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015,as amended, and other accounting Principles Generally Accepted in India.
e) With respect to the adequacy of the internal financial controls over financial reporting and the operatingeffectiveness of such controls; refer to our report in “Annexure A”, which is based on the Auditors’ Reportsof the company and its subsidiary companies incorporated in India. Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the internal financial controls over financial reportingof the company and its subsidiary companies incorporated in India.
f) On the basis of written representations received from the directors of the Holding Company as on March 31, 2018taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditorsof its subsidiary companies incorporated in Indianone of the directors of the Group companies are disqualifiedas on March 31, 2018, from being appointed as a director in terms of Section 164(2) of the Act.
g) With respect to the matter to be included in the Auditors’ Report in accordance with Rule 11 of the Companies(Audit and Auditor’s) Rules, 2014, in our opinion and to the best of our information and according to theexplanations given to us :
1. The company has the following pending litigations which would impact its financial position.
S No Case No. Court / Party GIST of the Case Status
CS175of 2005
Appeal filed by EDL
and others before CE,
Tribunal, Chennai.
CMA1026 of 2015
Appeal C/41496/2014-
DB
MACTOP cases
7613,7614,279to281 of
2014
RFA No 119/2015 filed
by us against judgment
in OS 537/2008
dt.29-8-2014 filed by
M/s vintage marketing
Before High Court of
Chennai filed by Mohan
Meakin Ltd against EDL
Customs and Excise
Tribunal-SZ Bench At
Chennai
Before the High court of
Madras – Madurai Bench
Before Customs
Excise&Service Tax
Appellate Tribunal,
Chennai
SCC-Motor accident
Claims Tribunal
Before High court of
Kerala
1.
2.
3.
4.
5.
6.
Trial Completed.
Pending for high court
hearing.
Stay granted Posted
for final disposal.
before Larger Bench
at Chennai
Pending
Pending for directions
of the court. Counter
to be filed by EDL
Pending,Counter to befiled – Next date is yetto be fixed by thecourt.
Stay on operation ofjudgment granted. Wehave furnished securityand went in appeal.Appeal is pending forfinal disposal
Against Trade Mark logo Old Secret
XXX Rum
Appeal was filed by the Companyagainst the order dt.12-3-2014, ofthe Commissioner of custom,Tuticorin who directed to paydifferential duty in the purchase ofcoal amounting to Rs 28,60,189/-with penalty of Rs 30,00,000/- andpenalty of Rs 1,00,000/-againstindividual name of GM of EDL
Against the order as stated above,and to refer to Larger bench byTribunal
Thecommissioner of customs,Tuticorin filed an appeal against itsorders granting exemption forcustoms duty to the tune of Rs35,23,458/- under notification 46/2011 of coal import from Asiancountries against EDL
Five individuals filed separate claimagainst accident involved by BenzCar TN 10X 5979-in the name ofEDL
Case relates to marketing services -Judgment and Decree forRs 18,01418 with costs and interest@18% per annum passed bySubJudge Palakkad against EDL.The Company has filed the appeal.
89
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
S No Case No. Court / Party GIST of the Case Status
OP732 of 2015 before
High Court of Madras
against Arbitration
Award passed by
Retd.Justice
J.Kanakaraj
First appeal 264 of
2013, Filed by EDL
Arbitration
OA 87/2017
CP 280/2018
CS 28 of 2017
MACT OP No.1375/
2014
Cs 161/2018, High
Court of Madras
Before High court of
Madras
Before Dist. Court at
Nashik, Maharastra
Before Retd .Justice
K.P.Sivasubramaniam
Before DRT II, Chennai
Before NCLT, Chennai
Bench
Before High Court of
Chennai filed by Mohan
Meakin Ltd against EDL
Small causes court –
Motor accident Claims
Tribunal, Chennai
High Court of Madras –
Gimpex pvt. Ltd filed a
suit for recovery of dues
of Rs.19.51 crs payable
by ESCL. Since EDL has
undertaken to pay partly
EDL has been included as
a Party.
7.
8.
9.
10.
(a)
10.
(b)
11.
12.
13.
OP by way of Appeal
admitted.Pending for
final disposal.
Pending for orders
Reply and counter
claim for
Rs 22,69,65608/- filed.
Against the Counter
filed by us, Khoday
has filed a rejoinder.
Next hearing is slated
on 22.06.2018
Ex parte order is being
set aside.
NCLT adjourned the
case to 7th June 2018
since the Company
has indicated a
settlement scheme to
UBI.
Aruguments
completed. Reserved
for orders.
Pending counter to be
filed.
Case came up for
hearing on 28 3 2018
and High court closed
all the applications of
Gimpex and EDL and
directed TASMAC not
to pay dues if any
from 9/2/2018 to 19/3/
2018 to any entity.
According to the
Company we have
settled all the dues by
way of transfer of
apartments at
whitefield, Bangalore.
The suit is pending.
OP filed against the award of
payment of 15,00,000/- with 12 %
interest from the year 2005 against
the Arbitration raised by
Mrs.Indumathi of RVS Enterprises,
0050ondicherry against EDL and
others. Counter claim by EDL also
filed.
Filed against the judgment in Suit 11/
2002 filed by M/s. Dolphin
Impressions P Ltd, Nashik for the
claim of Rs 5,43,661, with interest
@24%
Initiated by M/s Khoday India Ltd
against EDL for dispute and claim of
Rs. 22,45,11,819/- with interest.
UBI filed an original application
against the company for a claim of
Rs.12.45 Crores alongwith interest .
UBI filed a company ptn. before
NCLT for the recovery of a claim
amount of Rs.12.45 crs alongwith
interest
Against EDL for interest of Rs.3.00
crs on the overdues already paid
(Rs.7.50crs)
Accident -Compensation of Rs
4,00,000/- against involvement of
vehicle TN01AC 2460 TATA ACE of
Empee Distilleries Ltd by Miss
Abinaya D/o Karunakaran.
Gimpex besides filing a suit, moved
a garnishee application against EDL
to attach the receivables of
TASMAC.
90
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
S No Case No. Court / Party GIST of the Case Status
Cs 161/2018, High
Court of Madras
Molson Coors Cobra India
Pvt Ltd (MCCI)/High Court
of Karnataka
14. The case was lastly
heard in April 2018 and
posted for further
hearings in June 2018
(date to be fixed by the
court).
Due to MCCI’s non-performance of
the contract, the contract was
terminated and the security deposit
of Rs 5 crores was required to be
refunded by ADL.ADL had so far
paid an amount of Rs. 2.55 Crores
against Rs. 5 Crores and hence
MCCI filed a winding up case before
the Hon’ble High Court of Karnataka.
2. The Group do not have any material foreseeable losses in long-term contracts including derivative
contracts.
3. There were no amounts which were required to be transferred to the Investor Education and Protection
Fund by the Holding Company and its subsidiary companies incorporated in India.
For Venkatesh & Co.,Chartered Accountants
FRN 004636S
Place : Chennai CA Dasaraty VDate : 30.05.2018 M.No.026336
Partner
91
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
ANNEXURE ‘A’ TO INDEPENDENT AUDITORS’ REPORT(Referred to in paragraph (e) under ‘Report on Other Legal and Regulatory Requirements’
section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub- section 3
of Section 143 of the Companies Act, 2013 (“the Act”)
We have audited the internal financial controls over financial reporting of EMPEE DISTILLERIES LIMITED (“the
Group”) as of March 31, 2018 in conjunction with our audit of the consolidated financial statements of the
Company for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The respective of the Board of Directors of the Company and its subsidiary companies incorporated in India, are
responsible for establishing and maintaining internal financial controls based on the respective internal control
over financial reporting criteria established by the company and its subsidiary companies incorporated in India
considering the essential components of the internal control stated in the Guidance Note on Audit of Internal
Financial controls over financial reporting issued by the Institute of Chartered Accountants of India (“ICAI”). These
responsibilities include the design, implementation and maintenance of adequate internal financial controls that
were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to
company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy
and completeness of the accounting records, and the timely preparation of reliable financial information, as
required under the Companies Act, 2013 (“The Act”).
Auditor’s Responsibility
Our responsibility is to express an opinion on the Consolidated Company’s internal financial controls over financial
reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal
Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants
of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the
extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that
we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether adequate internal financial controls over financial reporting was established and maintained and if such
controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial
controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls
over financial reporting included obtaining an understanding of internal financial controls over financial reporting,
assessing the riskthat a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error.
We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors of the
subsidiary companies incorporated in India, in terms of their reports referred to in the other Matter paragraph
below, is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial
controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal financial control over financial
92
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with generally accepted accounting principles, and that receipts and expenditures of the company
are being made only in accordance with authorizations of management and directors of the company; and (3)
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition
of the company’s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility
of collusion or improper management override of controls, material misstatements due to error or fraud may occur
and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to
future periods are subject to the risk that the internal financial control over financial reporting may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
Opinion
In our opinion to the best of our information and according to the explanations given to us, the Company and its
subsidiaries companies incorporated in India, in all material respects, an adequate internal financial control
system over financial reporting and such internal financial controls over financial reporting were operating effectively
as at 31st March, 2018, based on the internal controls over financial reporting criteria established by the Company
and its subsidiary companies incorporated in India considering the essential components of internal controls
stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by ICAI.
Other Matter :
Our aforesaid report under section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal
financial controls over the financial reporting insofar as it relates to M/s. EDL Power Company (India) Limited,
subsidiary company, incorporated in India, is based on the corresponding reports of the auditors of such companies
incorporated in India.
With respect to Holding Company – Empee Distilleries Limited –
However the Size and volume of operations, of the company require an extended and enhance scope forthe present Internal Audit System to ensure coverage of all areas.
With respect to Subsidiary Company – Appollo Distilleries & Breweries Limited –
However the Size and volume of operations, of the company require an extended and enhance scope forthe present Internal Audit System to ensure coverage of all areas.
For Venkatesh& Co.,Chartered Accountants
F.R.No.004636S
CA Dasaraty VPlace : Chennai M.No.026336Date : 30.05.2018 Partner
93
CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2018(Currency: Indian Rupees in Lakhs)
ASSETS
A) Non - Current Assets
a) Property Plant and Equipment 2.1 38,845.42 40,672.51
b) intangible Assets
(i) Goodwill on Consolidation 2,035.20 2,035.20
c) Financial Assets
(i) Investments 2.2 14,205.77 14,205.28
(ii)Trade Receivables 2.3 328.01 328.01
(iii) Loans 2.4 5,506.16 4,329.67
B) Current Assets
a) Inventories 2.5 7,082.38 9,163.07
b) Financial Assets
(i) Trade Receivables 2.6 8,451.46 7,305.90
(ii)Cash and cash Equivalents 2.7 207.75 780.92
(iii) Advances 2.8 4,680.07 4,047.01
c) Other Current assets 2.9 37.76 116.89
Total Assets 81,379.97 82,984.47
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Particulars Note No. 31/3/2018 31/3/2017
94
EQUITY & LIABILITIES
A) Equity
a) Equity Share Capital 3.1 2,017.58 2,017.58
b) Other Equity 3.2 21,520.89 29,872.97
c) Non-Controlling interest 187.52 306.78
B) LIABILITIES
Non - Current Liabilities
a) Financial Liabilities
(i) Borrowings 3.3 10,220.55 12,189.88
b) Provisions 3.4 161.73 157.34
c) Deferred tax liabilties (net) 3.5 8,569.48 4,916.76
d) Other Non Current Liabilities 3.6 3,041.20 3,256.36
Current Liabilities
a) Financial Liabilities
(i) Borrowings 3.7 7,904.29 8,126.01
(ii) Trade Payables 3.8 6,955.39 9,021.72
(iii) Other financial Liabilities 3.9 4,041.94 3,697.55
b) Provisions 3.10 16,759.42 9,421.53
Total Equity & Liabilities 81,379.97 82,984.47
As per our report of even date attached
for Venkatesh & Co.,Chartered AccountantsFirm Registration No.04636S
CA Dasaraty VPartnerMembership No.026336
Place : ChennaiDate : 30.05.2018
For and on behalf of the Board of Directors of
EMPEE DISTILLERIES LTD
M.P. Purushothaman Shaji Purushothaman Chairman Managing Director
N. Chandrasekaran R. Venkatesh Chief Financial Officer Company Secretary
(Currency: Indian Rupees in Lakhs)
The accompanying notes form an integral part of the financial statemets ( Note No. 1 )
Particulars Note No. 31/3/2018 31/3/2017
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
95
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
CONSOLIDATED STATEMENT OF PROFIT AND LOSSFOR THE YEAR ENDED MARCH 31, 2018
(Currency: Indian Rupees in Lakhs)
Particulars Note No.
I. Revenue from operations 4.1 62,054.45 67,109.18
II. Other income 4.2 299.84 397.69
III. Total Revenue (I + II) 62,354.30 67,506.87
IV. Expenses :
Cost of materials consumed 5.1 19,644.30 23,516.56
Changes in inventories of finished goods,
work-in-progress 5.2 785.49 (1,022.15)
Employee benefits expense 5.3 2,233.83 2,377.46
Finance costs 5.4 4,872.12 3,961.95
Depreciation and amortization expense 2.1 1,220.39 823.90
Other expenses 5.5 37,912.96 39,922.44
Total Expenses 66,669.09 69,580.16
V. Profit / (loss) before exceptional items and tax (4,314.79) (2,073.29)
VI Exceptional items - 2,769.00
VII Other Comprehensive Income 5.6 (509.71) (1064.57)
VIII Profit / (loss) before tax (4,824.51) (908.86)
IX Tax Expenses :
(1) Current Tax - 31.05
(2) Deferred Tax 3,627.06 3,872.95
IX Profit (Loss) for the period from continuing operations (8,451.56) (4,812.86)
X Profit (Loss) for the period from discontinued operations - -
XI Profit (Loss) for the period (8,451.56) (4,812.86)
XI Earnings Per Share :
(1) Basic - -
(2) Diluted - -
As per our report of even date attached
for Venkatesh & Co.,Chartered AccountantsFirm Registration No.04636S
CA Dasaraty VPartnerMembership No.026336
Place : ChennaiDate : 30.05.2018
For and on behalf of the Board of Directors of
EMPEE DISTILLERIES LTD
M.P. Purushothaman Shaji Purushothaman Chairman Managing Director
N. Chandrasekaran R. Venkatesh Chief Financial Officer Company Secretary
The accompanying notes form an integral part of the financial statemets
31/3/2018 31/3/2017
96
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Particulars Year ended Year endedMar. 31, 2018 Mar. 31, 2017
A. Cash Flow from Operating Activities
Net Profit before taxation (4,314.79) (908.86)
Adjustments for:
Depreciation 1,220.39 823.90
Reversal of Non Cash Item - 2.63
Interest on Secured Loans 4,843.58 3,961.96
Gain From Investments - (2,769.00)
Interest Income (119.95) (38.79)
Operating Profit before Working Capital changes 1,629.23 1,071.84
Movements in Working Capital :
(Increase) / Decrease in Sundry Debtors (1,145.56) (345.60)
(Increase) / Decrease in Loans and advances (553.94) (433.37)
(Increase) / Decrease in Stocks 2,080.69 (2,326.91)
Increase / (Decrease) in Trade Payables (2,066.34) (1,324.62)
Increase / (Decrease) in Current Liabilities & Provisions 7,686.68 1,696.02
CASH GENERATED FROM OPERATING ACTIVITIES 7,630.76 (1,662.65)
Direct Taxes / Appropriations - -
Net Cash from Operating Activities 7,630.76 (1,662.65)
Cash flow from Investing Activities :
Purchase of Fixed Assets (112.27) (83.83)
Sale of Investments - 2,769.00
Proceeds from Sale of Fixed Assets - -
Interest Received 119.95 38.79
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2018(Currency: Indian Rupees in Lakhs)
97
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Particulars Year ended Year endedMar. 31, 2018 Mar. 31, 2017
NET CASH FLOW FROM INVESTING ACTIVITIES 7.68 2,723.96
Cash flow from Financing Activities :
Increase / (Decrease) in Secured Loans (2,191.05) 4,084.48
Increase / (Decrease) in Other Long term liabilities - (864.38)
(Increase) / Decrease in Long Term Assets (1,176.98) (743.67)
Interest Paid (4,843.58) (3,961.96)
Increase in share capital - 753.10
Net Cash from / (used) in Financing Activities (8,211.62) (732.44)
Net increase in cash and cash equivalents (573.18) 328.87
Cash and Cash equivalents at the beginning of the year 780.92 452.05
Cash and Cash equivalents at the end of the year 207.75 780.92
(Currency: Indian Rupees in Lakhs)
As per our report of even date
for Venkatesh & Co.,Chartered Accountants
Firm Registration No.04636S
CA Dasaraty V
Partner
Membership No.026336
Place : Chennai
Date : 30.05.2018
For and on behalf of the Board of Directors of
EMPEE DISTILLERIES LTD
M.P. Purushothaman Shaji Purushothaman Chairman Managing Director
N. Chandrasekaran R. Venkatesh Chief Financial Officer Company Secretary
98
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Notes forming part of Consolidated financial statements for the year ended March 31, 2018
Note 1: SIGNIFICANT ACCOUNTING POLICIESA. Principles of consolidation
The consolidated statements relate to Empee Distilleries Limited (“the company”) and its subsidiary companies
viz EDL Properties Limited, Apollo Distilleries Private Limited. The consolidated financial statements have been
prepared on the following basis:
a) The financial statements of the company and its subsidiary companies are combined on a line-by-line basis
by adding together the book value of like items of assets, liabilities, income and expenses as per the
respective financial statements duly certified by the management of the respective companies, after fully
eliminating intra-group balances and intra-group transactions in accordance with Indian Accounting
Standards
b) The difference between the cost of investment in the subsidiaries, over the net assets at the time of acquisition
of shares in the subsidiary companies is recognized as Goodwill or Capital Reserve as the case may be.
c) Non Controlling Interest’s share of net profit of consolidated subsidiary companies for the year is identified
and adjusted against the income of the group in order to arrive at the net income attributable to the shareholders
of the company.
d) Non Controlling Interest’s share of net assets of consolidated subsidiary companies is identified and presented
in the consolidated balance sheet separate from liabilities and equities of the company’s shareholders.
e) As far as possible, the consolidated financial statements are prepared using uniform accounting policies for
like transactions and other events in similar circumstances and are presented in the same manner as the
company’s separate financial statements.
B. Investments other than in subsidiary companies have been accounted as per Indian Accounting Standard
(AS) 27 on “Consolidated and Separate Financial Statements”.
C. Other significant accounting policies
These are set out under “Significant Accounting Policies” as given in the company’s separate financial statements.
The subsidiary companies considered in the consolidated financial statements are :
Name of the company Proportion of ownership Interest
EDL Properties Limited 75.00% (Direct)
Appollo Distilleries and Breweries Private Limited 91.41% (Direct)
99
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
1.1 Basis of Accounting :
These consolidated financial statements have been prepared in accordance with the Indian Accounting Standards
(referred to as “Ind AS”) prescribed under Section 133 of the Companies Act, 2013 read with the Companies
(Indian Accounting Standards) Rules as amended from time to time.
1.2 Current and Non Current Classification :
All assets and liabilities have been classified as current or non-current as per the Company’s normal operating
cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products
and the time between the acquisition of assets for processing and their realization in cash and cash equivalents,
the Company has determined its operating cycle as twelve months for the purpose of current-non current
classification of assets and liabilities.
1.3 Use of Estimates
The preparation of consolidated financial statements in conformity with the recognition and measurement principles
of Ind AS requires management to make estimates and assumptions that affect the reported balances of assets
and liabilities, disclosures of contingent liabilities at the date of the consolidated financial statements and the
reported amounts of income and expenses for the periods presented.
1.4 Revenue Recognition (Ind AS 18)
Revenue is recognized only when it can be readily measured and it is reasonable to expect ultimate collection.
Revenue from operations includes sale of goods, services, sales tax, service tax and excise duty adjusted for
discounts (net) and Value added tax. Dividend income is recognized when right to receive is established.
Interest income is recognized on time proportion taking into account the amount outstanding and rate applicable.
1.5 Property, Plant & Equipment (Ind AS 16)
Fixed assets are stated at cost less accumulated depreciation /amortization. Direct costs are capitalized until
fixed assets are ready for use. These costs include freight, installation costs, duties and taxes and other directly
attributable costs incurred to bring the assets to their working condition for intended use. The company has been
able to complete the Component based depreciation as per the applicable India accounting Standard as per the
technical opinion obtained stating that the useful life of significant component of the asset is not different from
the useful life of the fixed assets.
Depreciation on fixed assets is provided using the straight-line method at the rates specified in Schedule II to the
Companies Act, 2013 as per the new provisions.
Depreciation is calculated on a pro-rata basis for assets purchased / sold during the year with reference to the
month in which the fixed assets are put to use or commissioned.
Capital Work-in-progress comprises outstanding advances paid to acquire fixed assets and the cost of fixed
assets that are not yet ready for their intended use at the balance sheet date. Capital work-in progress is stated
at cost.
1.6 Borrowing cost (Ind AS 33)
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part
of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready
for its intended use. All other borrowing costs are charged to profit and loss account.
100
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
1.7 Impairment of Fixed Assets ( Ind AS 36 )
As asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment
loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired except for
the Investments made. The impairment loss recognized in the prior accounting period is reversed if there has
been a change in the estimate of recoverable amount.
1.8 Cash flow Statement ( Ind AS 7 )
Cash flows are reported using the indirect method, whereby profit / (loss) after tax is adjusted for the effects of
transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments.
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions
of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows
from regular revenue generating, financing and investing activities of the Company are segregated.
1.9 Investments ( Ind AS 40 )
Current investments are carried at lower of cost and quoted/fair value. Long term investments are stated at cost.
Provision for diminution in the value of long term investments is only if such a decline is other than temporary.
Investment by Empee Distilleries Ltd in Subsidiaries
In Equity Shares :
Sl No. Name of the Company No of shares held
1 Empee Sugars and Chemicals ltd 26,360,532
2 EDL Properties Ltd 750,000
3 Appollo Distilleries & Breweries Pvt Ltd 41,846,500
1.10 Inventories ( Ind AS 2 )
Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any.
Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing
overheads incurred in bringing them to their respective present location and condition. Cost of raw materials,
stores and spares are determined on first-in-first-out basis while finished goods are determined on weighted
average basis.
1.11 Foreign Currency Transaction ( Ind AS 21 )
a) Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of
transaction or that approximates the actual rate at the date of transaction.
b) Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of
items which are covered by forward exchange contracts, the difference between the year end rate and rate on the
date of contract is recognized as exchange difference and the premium paid on forward contracts is recognized
over the life of the contract.
c) Non monetary foreign currency items are carried at cost.
d) Any income or expense on account of exchange difference either on settlement or on translation is recognized
in the Statement of Profit and Loss except in case of long term liabilities, where they relate to acquisition of fixed
assets, in which case they are adjusted to the carrying cost of such assets.
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EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
1.12 Prior Period and Extra Ordinary Items ( Ind AS 8 )
Prior Period and Extra Ordinary items having material impact on the financial affairs of the Company are disclosed,
wherever applicable. There is no major deviation in the accounting policy during the current year.
1.13 Provision for Current Tax and Deferred Tax ( Ind AS 12 )
Provision for current tax is made after taking into consideration benefits admissible under the provisions of the
Income Tax Act, 1961. Deferred tax resulting from “timing difference” between taxable and accounting income is
accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet
date. Deferred tax asset is recognized and carried forward only to the extent that there is virtual certainty that the
asset will be realized in future.
1.14 Provisions, Contingent Liabilities and Contingent Assets ( Ind AS 37 )
Provisions involving substantial degree of estimation in measurement are recognized when there is a present
obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent
Liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor
disclosed in the financial statements.
1.15 Earnings per Share ( Ind AS 33 )
Basic earnings per share is computed by dividing the profit after tax by the weighted average number of equity
shares outstanding during the year/period. Diluted earnings per share is computed by dividing the profit after tax
as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity
shares, by the weighted average number of equity shares considered for deriving basic earnings per share and
the weighted average number of equity shares which could have been issued on the conversion of all dilutive
potential equity shares.
1.16 Employee Benefits ( Ind AS 15 )
a) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of
Profit and Loss of the year in which the related services are rendered.
b) Post-employment and other long term employee benefits are recognized as an expense in the Statement of
Profit and Loss for the year in which employee has rendered services. The expense is recognized at the present
value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in
respect of post employment and other long term benefits are charged to the Statement of Profit and Loss.
102
Particulars
ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED MARCH 31, 2018
NOTE 2 : Notes on Accounts - ASSETS
2.1 Property Plant & Equipment(Currency: Indian Rupees in Lakhs)
Land 19,303.44 19,303.44
Buildings 4,477.35 4,616.58
Plant and Equipment 14,381.29 15,283.17
Furniture and Fixtures 12.93 13.50
Vehicles 390.62 488.84
Office Equipments 273.24 232.75
Computers 6.55 9.62
Capital Work in Progress - 724.62
Total 38,845.42 40,672.51
Investments in Equity Instruments 160.18 160.35
Investments in Preference Shares - -
Investments in Mutual Funds 9.09 8.43
Other investments 14,036.50 14,036.50
Total 14,205.77 14,205.28
Aggregate amount of Quoted Investments: 169.27 168.78
Aggregate amount of UnQuoted Investments: 14,036.50 14,036.50
2.2 Investments
Secured Considered good - -
Unsecured Considered good 328.01 328.01
Doubtful - -
Total 328.01 328.01
2.3 Trade Receivables
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Particulars
Particulars
31/3/2018 31/3/2017
31/3/2018 31/3/2017
31/3/2018 31/3/2017
103
Particulars
Particulars
Security Deposits
Depostis - with government departments 610.46 627.60
Other Deposits 234.58 234.72
Loans to related parties 4,661.11 3,467.35
Total 5,506.16 4,329.67
2.4 Loans (Unsecured)
Raw materials 4,132.68 5,427.88
Work-in-progress 775.94 999.59
Finished goods 2,173.76 2,735.60
Total 7,082.38 9,163.07
Unsecured Considered good
Outstanding for a period less than six months 6,493.21 5,801.82
Outstanding for a period exceeding six months 1,958.25 1,504.08
Total 8,451.46 7,305.90
2.6 Trade Receivables
2.7 Cash & Cash Equivalents
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
(Currency: Indian Rupees in Lakhs)
2.5 Inventories (at Cost or NRV whichever is Lower)
Particulars
Particulars
Cash on Hand 25.96 31.98
Balances with Banks 175.31 737.00
Balances lying in unpaid dividend account 6.47 11.94
Total 207.75 780.92
31/3/2018 31/3/2017
31/3/2018 31/3/2017
31/3/2018 31/3/2017
31/3/2018 31/3/2017
104
Particulars
Particulars
Security Deposits 10.45 12.00
Other Loans 4,669.62 4,035.01
Total 4,680.07 4,047.01
2.8 Advances
Prepaid Expenses 37.76 116.89
Total 37.76 116.89
2.9 Other Current Assets
Notes on Accounts - EQUITY & LIABILITIES
3.1 Share Capital(Currency: Indian Rupees in Lakhs)
Number of Equity Shares at the beginning and end of the reporting year
As at As atMar. 31, 2018 Mar. 31, 2017
Authorized Capital3,00,00,000 Equity Shares of Rs.10/- each 3,000.00 3,000.00
Issued ,Subscribed and fully paid Share Capital
2,01,75,753 Equity Shares of Rs.10/- each fully paid up 2,017.58 2,0178.58
1,90,08,893 Equity Shares of Rs10/- each fully paid up - -
Total 2,017.58 2,017.58
Shares outstanding at the
beginning of the year 20,175,753 2,018 19,008,893 1,900.89
Shares issued during the year - - 1,166,860 116.69
Shares outstanding at the
close of the year 20,175,753 2,017.58 20,175,753 2,017.58
As at March 31, 2018 As at March 31, 2017
No. of Shares Amount No. of Shares AmountParticulars
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
(Currency: Indian Rupees in Lakhs)
31/3/2018 31/3/2017
31/3/2018 31/3/2017
Particulars
105
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
(Currency: Indian Rupees in Lakhs)
Details of Shareholders holding more than 5% shares in the company
Mr.M.P.Purushothaman 2,094,514 10.83% 2,094,514 10.83%
Mrs.Aruna Purushothaman 1,800,000 8.92% 1,800,000 8.92%
Mrs.Nisha Purushothaman 1,002,000 4.97% 1,002,000 4.97%
Mr.Sheeju Purushothaman 1,002,000 4.97% 1,002,000 4.97%
Mrs.Sheena Purushothaman 888,923 4.41% 888,923 4.41%
M/s.Empee Holding Ltd 4,471,301 22.16% 4,875,273 24.16%
As at March 31, 2018 As at March 31, 2017
No. of shares % of HoldingName of Shareholder
No. of shares % of Holding
(Currency: Indian Rupees in Lakhs)
Particulars
Revaluation Reserve
Opening balance 1,573.16 1,592.94
Add : Addition during the year - -
1,573.16 1,592.94
Less: Deduction during the year 19.78 19.78
Closing Balance (A) 1,553.38 1,573.16
General Reserve
Opening balance 6,821.96 6,821.96
Add: Addition during the year (IND AS) - -
6,821.96 6,821.96
Less: Deduction during the year - -
Closing Balance (B) 6,821.96 6,821.96
Securities Premium Account
Opening balance 18,051.00 17,414.59
Add: Premium credited - 636.41
18,051.00 18,051.00
Less: Premium utilised during the year - -
Closing Balance (C) 18,051.00 18,051.00
3.2 Other Equity
31/3/2018 31/3/2017
106
(Currency: Indian Rupees in Lakhs)
Particulars
Profit & Loss Account
Surplus from Profit & Loss Account 3,113.99 8,264.58
Add: Profit/(Loss) for the year (7,669.83) (5,151.00)
Add: Other adjustments on account of Consolidation (349.64) 312.84
(4,905.47) 3,426.83
Less: Deduction during the year - -
Closing Balance (D) (4,905.47) 3,426.83
Total (A to D) 21,520.89 29,872.97
3.3 Borrowings
Particulars
Bonds or debentures
14 % Redemable-Non-Convertible Debentures 3,562.50 4,512.50
Term Loans
(I) from banks
60 Klpd project in Chotkur, Andhrapradesh
Andhra Bank 1,152.23 1,578.05
Union Bank of India 969.80 943.68
Punjab National Bank 2,724.88 3,474.51
HDFC Bank 605.09 571.88
(lI) from other Parties
Secured
SBI Global Factors 459.39 121.31
Unsecured
Others 746.65 987.94
Total 10,220.55 12,189.88
Aggregate amount of Loans Guaranteed by Directors 10,220.55 12,189.88
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
31/3/2018 31/3/2017
31/3/2018 31/3/2017
107
(Currency: Indian Rupees in Lakhs)
Particulars
Provision for employee beneflts
Gratuity payable 155.26 145.40
Other Provisions
Unpaid dividends 6.47 11.94
Total 161.73 157.34
3.4 Provisions
Particulars
EMD Received from Customer 468.40 468.40
Other Payables 1,039.88 911.40
Others (Payable to related Parties) 1,532.92 1,876.56
Total 3,041.20 3,256.36
3.6 Other Non-Current Liabilities
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Particulars
3.5 Deffered Tax Liability
WDV as per Companies Act 30,780.47 31,404.31
WDV as per Income Tax Act 5,708.06 6,416.26
Difference 25,072.41 24,988.05
DTL 7,747.37 7,721.31
Opening DTL 7,721.31 998.88
Entry :
Profit & Loss 26.06 6,722.43
To DTL 26.06 6,722.43
31/3/2018 31/3/2017
31/3/2018 31/3/2017
31/3/2018 31/3/2017
108
3.8 Trade Payables
Particulars
Trade Payables 6,955.39 9,021.72
Total 6,955.39 9,021.72
(Currency: Indian Rupees in Lakhs)
The vendors of the Company are yet to submit their status under Micro, Small and Medium Enterprises; hence
the relevant information is not available with the company. Accordingly no disclosures relating to MSME have
been made in books of accounts.
3.9 Other Financial Liabilities
Particulars
Current maturities of long-term debt 3,026.49 2,709.79
Advance from Customers 676.44 670.50
Others - Liabilty for Expenses 339.01 317.26
Total 4,041.94 3,697.55
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Particulars
Bonds or debentures
Term Loans
(I) from banks
a) Cash Credit Loan 7,174.41 7,253.22
(II) from other Parties - 21.15
IFCI Factors 729.88 851.64
(Secured by Receivables and
Personal Guarantee of the directors)
Total 7,904.29 8,126.01
3.7 Borrowings
31/3/2018 31/3/2017
31/3/2018 31/3/2017
31/3/2018 31/3/2017
Notes on Accounts - PROFIT & LOSS A/C.
4.1 Revenue from Operations
(Currency: Indian Rupees in Lakhs)
Particulars As at As at Mar. 31, 2018 Mar. 31, 2017
Sale of Products (Gross) 89,828.38 94,470.30
Less : Excise Duty 29,012.42 28,727.73
60,815.96 48,555.84
Other operating Revenues 1,238.49 1,366.60
62,054.45 67,109.18
4.2 Other Income
Particulars As at As at Mar. 31, 2018 Mar. 31, 2017
Scrap Sales 76.07 153.50
Miscellaneous Income 223.77 244.19
299.84 397.69
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
3.10 Provisions
Particulars
Provision for Employee Benefits
-Salary & wages payable 105.81 21.41
-Bonus payable 51.70 76.58
Others
Provision for taxation (net of advance tax) 608.49 700.89
PF payable 29.57 45.21
ESI payable 15.88 14.40
Sales tax payable 12,427.70 5,615.03
GST payable 88.30 -
Service Tax payable 156.85 183.49
TDS Payable 278.37 206.10
TCS Payable 1.04 0.49
Excise Duty payable 33.07 32.81
Provisions for expenses 2,954.27 2,514.49
Provision for audit fees 8.39 10.64
Total 16,759.42 9,421.53
31/3/2018 31/3/2017
109
5.3 Employees Benefit Expenses
Particulars As at As at Mar. 31, 2018 Mar. 31, 2017
Salaries and incentives 1,967.77 2,095.59
Contributions to -
Provident fund & ESI 99.53 116.13
Gratuity fund contributions 17.21 26.28
Staff welfare expenses 149.31 139.47
2,233.83 2,377.46
(Currency: Indian Rupees in Lakhs)
5.4 Finanace Cost
Particulars As at As at Mar. 31, 2018 Mar. 31, 2017
Bank Charges 28.53 55.04
Interest Expenses 4,843.58 3,906.91
4,872.12 3,961.95
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
5.1 Cost of Material Consumed
Particulars As at As at Mar. 31, 2018 Mar. 31, 2017
Opening Stock of Raw Materials 5,427.88 4,123.11
Add: Purchases of Raw Materials 19,328.85 24,821.34
Less: Closing Stock of Raw Materials 5,112.43 5,427.88
19,644.30 23,516.56
5.2 Changes in inventories of finished goods, Stock-in-Trade and work-in-progress
Particulars As at As at Mar. 31, 2018 Mar. 31, 2017
Opening Inventory
Finished Goods 2,715.65 1,874.55
Work-In-Progress 1,019.53 838.48
3,735.19 2,713.03
Closing Inventory
Finished Goods 2,255.46 2,715.65
Work-In-Progress 694.24 1,019.53
2,949.70 3,735.19
785.49 (1,022.15)
110
5.5 Other Expenses
Particulars As at As at Mar. 31, 2018 Mar. 31, 2017
Manufacturing expenses 1,550.23 2,171.15
Excise Label 460.96 358.75
VAT 31,774.94 32,191.02
Interest on MSME Payable 18.58 -
Rent 63.84 75.36
Rates & Taxes 566.80 500.72
Audit Fees 9.57 12.36
Postage & Telegram 3.26 4.71
Printing and Stationery 11.24 18.82
Repairs and Maintenance 66.00 84.76
Donations 3.97 8.09
Sitting Fee 3.95 7.30
Telephone Expenses 25.81 29.61
Managerial Remuneration 26.00 145.04
Consulting Charges 66.01 193.40
Travelling Expenses 53.18 95.11
Travelling Expenses - Directors 10.35 9.94
Miscellaneous Expenses 507.45 587.54
Discounting Charges -Tasmac 311.78 227.60
Advertisement & Publicity 3.22 1.41
Travelling Expenses - Marketing - 7.66
Freight & Handling Charges 308.75 361.24
Loading & Unloading charges 32.13 193.52
Sales Promotion expenses 9.61 24.33
Cash Discount 701.85 514.01
Other Selling expenses 1,323.48 2,098.97
Other Comprehensive Income - -
37,912.96 39,922.44
(Currency: Indian Rupees in Lakhs)
6.1 Balances with regard to Other advances, Sundry Debtors, Trade payables, Loans and advances of Related
Parties, Long term Liabilities are subject to confirmation from the party concern.
6.2 With regard to Group Company Loans and advances there is no stipulation as to Principal or Interest in
earlier years, however in the current financial year the said amount is converted into Interest free Unsecured
loan with a stipulation as to repay in 8 financial years starting the first installment from FY 2018-19.
6.3 Figures of the previous year have been regrouped / reclassified wherever necessary.
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
111
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
112
2.1
FIX
ED
AS
SE
TS
Par
ticu
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ss
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Ac
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31,
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tory
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4
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6
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3
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nt &
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258
60,9
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96
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1
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049
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nitu
re &
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-
1,
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244,
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1
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15
-
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6
1,
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570
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9,58
5
Veh
icle
s
5
4,09
9,19
7
1
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-
55
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4,82
2,90
8
4,97
2,21
6
-
9
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276,
289
Offi
ce E
quip
men
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27
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29
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27 3
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2,0
68,6
37
-
5,44
8,23
9 2
1,90
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3,94
6,82
5
Com
pute
rs
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242
16,
610
-
462
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15
6,55
0
4
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8
-
2
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9,69
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1
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89,6
16
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324
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-
206
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3
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3,9
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50,5
38
As
at
Ma
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31,
2018
As
at
Ma
rch
31,
2017
De
pre
cia
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ch
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e
for
the
yea
r
De
pre
cia
-
tio
ns
on
De
leti
on
s
As
at
Ma
rch
31,
2018
(Am
ount in
Rupees)
As
at
Ma
rch
31,
2018
Net
Blo
ck
As
at
Ma
rch
31,
2017
De
leti
on
s
du
rin
g t
he
Ye
ar
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
ATTENDANCE SLIP
EMPEE DISTILLERIES LIMITEDL15511TN1983PLC010313
Regd. Office : Empee Tower, 59, Harris Road, Pudupet, Chennai – 600 002.
Phone : 044-28531111; Email : [email protected]; Website : www.empeegroup.co.in
33rd ANNUAL GENERAL MEETING
I/We hereby record my/our presence at the 33rd Annual General Meeting of the Company being held at Sri
P.Obul Reddy Hall, Vani Mahal, T.Nagar, Chennai – 600 017 on Thursday, the 27th September 2018 at 3.30 p.m.
Members Folio No./
Client ID No. :
Member’s Name /
Proxy’s Name :
Member’s signature /
Proxy’s signature :
Note :
1. Please complete the Folio/ DP ID-Client ID No. and name, sign this Attendance Slip and hand it over at
the Attendance verification counter at the entrance of the meeting hall.
2. Electronic copy of the Annual Report and Notice of the Annual General Meeting (AGM) alongwith
Attendance slip and Proxy form is being sent to all the members whose email address is registered with
the Company/ DP unless any member has requested for a hard copy of the same. Members receiving
electronic copy and attending the AGM can print copy of this Attendance slip.
3. Physical copy of the Annual Report and Notice of the AGM along with Attendance slip and Proxy form is
sent in the permitted mode(s) to all members whose email is not registered or have requested for a hard
copy.
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
Route Map :
Date :
Dear Sir / Madam
Pursuant to the Green Initiative in the Corporate Governance initiated by the Ministry of Corporate Affairs (MCA) vide
its circular dated 21/4/2011, your company has proposed to send the Notice / Annual Report / documents through
electronic mode to our shareholders.
This, you will appreciate, would facilitate fast, secured communication and contribute towards improved environment.
Kindly arrange to send the following details to our above address duly signed, which will be considered by us for
sending the future communication through Email.
Company Name
Folio No.
Name (1st / Sole Holder)
Email ID
Mobile Number
Pan (Optional)
In case if you are holding the shares in electronic mode, you may kindly register / update your correct email id with
your DP, so that the future communication can be sent through the same.
Signature of the Shareholder
Thanking You,
Yours truly,
For Empee Distilleries Ltd.,
Sd./
Chairman
Empee Distilleries Ltd.,
E-mail Format :
EMPEE DISTILLERIES LIMITED Annual Report 2017 - 2018
PROXY FORM
EMPEE DISTILLERIES LIMITEDL15511TN1983PLC010313
Regd. Office : Empee Tower, 59, Harris Road, Pudupet, Chennai – 600 002.
Phone : 044-28531111; Email: [email protected]; Website: www.empeegroup.co.in
Name of the member(s) :
Registered address :
E-mail ID :
Folio No./Client ID No. :
I/We being the member(s) of ………......….…… shares of the above named Company hereby appoint :
(1) Name :
Address : Email ID :
Signature :…………………………………………………..... or failing him;
(2) Name :
Address : Email ID :
Signature :……………………………………………………. or failing him;
(3) Name :
Address : Email ID :
Signature :……………………………………………………. or failing him;
as my/our proxy to attend and vote for me/us and on my/our behalf at the 33rd Annual General Meeting of the
Company, to be held on Thursday, the 27th September 2018 at 3.30 p.m. at Sri P.Obul Reddy Hall, Vani Mahal,
T.Nagar, Chennai – 600 017 and at any adjournment thereof in respect of such resolutions as are indicated below :
Optional
Res. No. Resolutions For Against
Ordinary Business1. Adoption of Financial Statements standalone and consolidated for the
year ended 31.3.2018.
2. Re-appointment of Mr.M.P. Purushothaman, who retires by rotation.
Special Business3. Regularistion of the appointment of Mr.Shaji Purushothaman as Director.
4. Appointment of Mr.Shaji Purushothaman as Managing Director.
5. Appointment of Cost Auditor for the years 2015-16, 2016-17 and 2017-18.
6. Appointment of Cost Auditor for the year 2018-19.
7. Approval for Related Parties Transactions.
8. Conversion of Share Application money in
Empee Sugars and Chemicals Ltd into unsecured Loan.
Signed this Day of September 2018
Signature of shareholder : …………………………….
Signature of Proxy holder :…………………………….
Note :
1. The Proxy form must be deposited at the Registered office of the Company at Empee Tower, 59, Harris Road, Pudupet,Chennai–2 not less than 48 hours before the commencement of the meeting.
2. For the resolution, explanatory statement and notes, please refer to the Notice of the AGM.
3. It is optional to put ‘X’ in the appropriate column against the Resolutions indicated in the box. If you leave the ‘For’ or Against columnblank against any or all Resolutions, your Proxy will be entitled to vote in the manner as he/she thinks appropriate.
4. Please complete all details including details of member(s) in above box before submission.
Affix
Stamp