empee distilleries limited annual report 2017 - 2018 · sugumar& co., cost accountants, chennai...

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


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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


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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


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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6

“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.”


Amount(Rs. in lakhs)

Particulars

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“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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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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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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(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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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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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


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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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.

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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


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


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


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


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


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. R.Rangachari

Mr. M.P.Purushothaman


Mr. R.Rangachari

Ms. Nisha Purushothaman upto

March 15, 2018.



Mr. R.Rangachari


Ms. Nisha Purushothaman upto

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


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


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


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


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


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


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


“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


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


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


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


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


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


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


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.


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


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


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


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


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


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


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


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


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


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


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


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


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


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


(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


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


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


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


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


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


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


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


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.


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


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.


F.R.No.004636S


56


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


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)


(Appeals)


(Appeals)


(Appeals)


(Appeals)


(Appeals)


(Appeals)


(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


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.


F.R.No.004636S


59


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


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



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




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


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


(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


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


(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


STATEMENT OF PROFIT AND LOSSFOR THE YEAR ENDED MARCH 31, 2018



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)









31/3/2018 31/3/2017

64


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



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



for Venkatesh & Co.,Chartered Accountants

Firm Registration No.04636S

CA Dasaraty V

Partner

Membership No.026336

Place : Chennai

Date : 30.05.2018






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.

65

67


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.

68


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


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



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


2.7 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

71


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


31/3/2018 31/3/2017

31/3/2018 31/3/2017

72


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

73


Particulars


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


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


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


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

74


Particulars

Particulars


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

75


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


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

76


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


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


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


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


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


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)


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

77


5.4 Finanace Cost


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)


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


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

78


5.5 Other Expenses


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


79

80


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 :


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 :


1 Present value of obligation at the beginning of the year 138.58 122.89




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 :


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


5 Actuarial gain / (loss) on plan assets - (0.15)

6 Fair value of plan assets at the end of year 23.78 22.20


(iv) The amounts recognized in Balance Sheet are as follows :


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 :



2 Past service cost


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


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


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


83

Other related parties

Empee Holdings Limited

Empee International Hotels & Resorts Limited

South (India) Hotels Pvt Ltd

Appollo Alchobev Limited

Aruna Exports Pvt Ltd


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


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.


85

EMPEE DISTILLERIES LIMITED Annual Report 2016 - 20172.

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86


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


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


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


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


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.


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




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


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



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


Madras

Before Dist. Court at

Nashik, Maharastra

Before Retd .Justice

K.P.Sivasubramaniam

Before DRT II, Chennai

Before NCLT, Chennai

Bench




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



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


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”).


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


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.


F.R.No.004636S


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



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


(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


(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









The accompanying notes form an integral part of the financial statemets ( Note No. 1 )



95


CONSOLIDATED STATEMENT OF PROFIT AND LOSSFOR THE YEAR ENDED MARCH 31, 2018



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








The accompanying notes form an integral part of the financial statemets

31/3/2018 31/3/2017

96



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



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



for Venkatesh & Co.,Chartered Accountants

Firm Registration No.04636S

CA Dasaraty V

Partner

Membership No.026336

Place : Chennai

Date : 30.05.2018





98


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


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


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.

101


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



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


2.7 Cash & Cash Equivalents



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



31/3/2018 31/3/2017

31/3/2018 31/3/2017

Particulars

105



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


Particulars

Revaluation Reserve


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


Add: Addition during the year (IND AS) - -

6,821.96 6,821.96


Closing Balance (B) 6,821.96 6,821.96

Securities Premium Account


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


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


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



31/3/2018 31/3/2017

31/3/2018 31/3/2017

107


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


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


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


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



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


Scrap Sales 76.07 153.50

Miscellaneous Income 223.77 244.19

299.84 397.69


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


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


5.4 Finanace Cost


Bank Charges 28.53 55.04

Interest Expenses 4,843.58 3,906.91

4,872.12 3,961.95


5.1 Cost of Material Consumed


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


Opening Inventory


Work-In-Progress 1,019.53 838.48

3,735.19 2,713.03

Closing Inventory


Work-In-Progress 694.24 1,019.53

2,949.70 3,735.19

785.49 (1,022.15)

110

5.5 Other Expenses


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


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.


111


112

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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.


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 :


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 :


Signature :……………………………………………………. or failing him;

(3) Name :


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

empee distilleries limited annual report 2017 - 2018 · sugumar& co., cost accountants, chennai...

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