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Andrew Yule & Company Ltd.

BSE: 526173 Sector: Others
NSE: ANDREWYULE ISIN Code: INE449C01025
BSE 00:00 | 25 Apr 30.00 -0.50
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NSE 05:30 | 01 Jan Andrew Yule & Company Ltd
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VOLUME 148442
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P/E 48.39
Mkt Cap.(Rs cr) 1,467
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OPEN 30.10
CLOSE 30.50
VOLUME 148442
52-Week high 46.85
52-Week low 23.55
P/E 48.39
Mkt Cap.(Rs cr) 1,467
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Andrew Yule & Company Ltd. (ANDREWYULE) - Director Report

Company director report

Dear Shareholders

Your Directors take pleasure in presenting the 69th Annual Report onthe operations of the Company together with the Auditor's Report and AuditedFinancial Statements for the year ended 31st March 2017 :

[01] FINANCIAL RESULTS

The financial results of the Company for the year 2016-17 in comparisonwith the previous financial year 2015-16 are highlighted hereinbelow : [Rs in lakh]

Year ended 31st March 2017 Year ended 31st March 2016
Revenue from Operations and other Operational 40761.48 36800.16
Income
Other Income 4173.61 2197.57
Total Revenue 44935.09 38997.73
Profit before Tax 3391.68 927.36
Less: Provision for Tax
– Income Tax 168.66 114.87
– MAT Credit (–) 43.38 --
Entitlement
– Wealth Tax for (-) 6.30 --
Earlier Years
– Deferred Tax 534.13 (–) 22.80
653.11 92.07
Profit after Tax 2738.57 835.29
Balance brought forward from previous year 1621.86 786.57
Transfer from Bond 666.67 -
Redemption Reserve
Proposed Dividend 488.95 -
Dividend Distribution Tax 95.10 -
Balance carried forward to Balance Sheet 5027.10 1621.86

[02] FINANCIAL PERFORMANCE

Your Company's results during the year under review have improvedas compared to the previous year. Your Company has recorded revenue from operations andother income of Rs449.35 crore during the financial year 2016-17 as compared to

Rs389.98 crore as recorded in the previous year.

Profit before Tax (PBT) during the financial year

2016-17 stood at Rs33.92 crore as compared to Rs9.27 crore for theprevious financial year registering an increase by 265.91%. Profit after Tax (PAT) forthe financial year 2016-17 had been Rs27.39 crore as compared to Rs8.35 crore during theprevious financialyearregisteringanincreaseby22802%

[03] DIVIDEND

In view of improved financial position of the Company your Directorshave the pleasure in recommending a dividend @ 5% on the Paid up value of Equity Shares ofRs2/- each for the financial year 2016-17.

[04] PROSPECTS / OPERATIONS

4.1. Tea Division

[a] North Indian Batting Order (Ranking): Being a prime"Quality" parameter 4 (Four) AYCL gardens featured in Top10 4 (Four) gardensbetween Top11 to Top20 and rest i.e. 3 (Three) gardens/manufacturing units between Top21to Top29. Thus all Assam & Dooars Gardens are now within Top 29 during the fiscalyear

2016-17 which emphasises marked improvement in the batting order/ranking.

[b] The Tea Division continues to grow from strength to strengththrough its special emphasis on quality of its produce and is now recognised as one of the"Top Quality Tea Producer" in the industry.

[c] At a sale average of Rs185.00 / Kg. (own crop) and North Indiansale average of Rs141.15 / Kg.; the overall increase compared to the District Sale Averageis Rs43.85 / Kg. this year. [d] Own Crop increased from 100.72 lakh kgs last year to102.34 lakh kgs this year maintaining the increasing trend; primarily due to extensiveuprooting and replanting programme undertaken each year for its long term sustainability /viability.

[e] Maximising existing manufacturing resources margin from BoughtLeaf operations this year is Rs2.08 crore compared to Rs2.03 crore last year. [f] Allgardens of the group are now having FSSAI License to operate and manufacture tea. All theAssam & Dooars gardens are Trustea certified.

All Assam gardens are also Rainforest

Alliance certified. The lone Darjeeling garden "Mim" isRainforest Alliance

& UTZ certified. While all Assam group gardens & Mim are ISO9001

ISO 22000 & HACCP certified Dooars group gardens are ISO 22000certified.

[g] Tea exports this year was 0.82 lakh kgs with FOB Rs1.78 crorecatering to markets primarily in Georgia USA Germany Australia & Canada. [h]Manufactured specialty teas for both export & domestic markets. The specialty &various types of flavored teas are also offered as boutique collection of tea at"Yule Tea Lounge" at Eco Park Kolkata.

[i] The one acre plot of Tea Garden at Eco Park Kolkata has beenraised very successfully and is now a model setup done for the first time in Kolkata.

[j] The Yule Tea packets have been successfully sold through variouse-commerce outlets like www. amazon.in www.bigbasket.com & www.madeinbengal.in.

[k] Other Packet Tea outlets are - TRIFED outlets in Gangtok BhopalDelhi & Bengaluru; BISWA BANGLA outlets in Kolkata Delhi Darjeeling & Bagdogra;Aeroart Emporium at Kolkata; Cottage Industry outlets in Delhi Mumbai Chennai Kolkata& Bengaluru; Yule Tea Lounge at Eco

Park Kolkata and Yule Tea Kiosks at Eco Park & Sukhiapokhri.

[l] With better field practices and major emphasis on Crop &Quality the Division will continue maintaining its the near future.

4.2 Electrical Division (Kolkata Operation)

[a] Highest turnover of Rs90 crore in the history of the Divisionachieved due to various initiatives taken by the Management of the Company.

[b] 50% growth in Net Sales [Rs90 crore compared to Rs61 crore in2015-16]. [c] Complete turnaround in operations achieved at PBDIT Level after several

Decades.

[d] Highest in-house production of DTs achieved after re-orientation ofthe Factory infrastructure.

[e] Opened a new Business vertical for execution of 132KV SubstationTurnkey Projects.

[f] Highest collection of Payments (Rs91 crore) in a single financialyear.

[g] 1st Billing of 100 KVA DTs using Amorphous Core after successfulcompletion of CPRI testing.

[h] 63% growth in sale of Distribution

Transformer from Rs42 crore (2015-16) to Rs68 crore (2016-17).

Electrical Division (Chennai Operation)

[a] Bagged first 220kV Order from

TSGENCO (supply of 1No 12.5MVA 220/33kV Power Transformer forPulichintala Hydro Power Station).

[b] Achieved Highest Turnover of Rs66.90 crore during the year 2016-17compared to last year's Turnover of Rs56.43 crore.

[c] Achieved Highest Order Booking for 2016-17 Rs83.55 crore comparedto last year 2015-16 Order booking of Rs70.73 crore.

[d] Achieved Highest payment collection of Rs86.59 crore for 2016-17compared to last year's payment collection of Rs76.22 crore.

[e] New Product development (Received first Cast Resin Transformerorder

63KVA 33/0.433KV for Karwar site MES).

[f] Commencement of Testing Bay Expansion.

[g] Outsourcing of part manufacturing activities in shop floor.

4.3 Engineering Division

[a] Order Booking was Rs32.48 crore

(+6% YOY).

[b] Net Sales was Rs30.80 crore (+28% YOY).

[c] Division recorded All Time High Steel consumption of 917 MT (+6%YOY) for Industrial Fan & 310 MT for Bridge Girder.

[d] Capacity utilization also reached all Time High as number ofImpellers produced in-house stands at 309

(+1.3% YOY).

[e] Productivity increased with process improvement like introductionof non-bolted composite liner use of plasma cutting for refurbishment job. [f] Firstbilling of newly developed Axial Fan done during the year.

[g] Opened 2 new Business verticals in

Air Pollution Control (APC) and Water Pollution Control (WPC).

[h] Booked and executed 1st order worth Rs4.40 crore in APC and 1storder in

WPC is under process and will be received in May 2017.

[05] MANAGEMENT DISCUSSION & ANALYSIS REPORT

Management Discussion & Analysis Report for the year under reviewas stipulated under the

SEBI (LODR) Regulations 2015 is presented in a separate sectionforming part of the Board's Report as Annexure I.

[06] CORPORATE GOVERNANCE

The report on Corporate Governance as stipulated under the SEBI (LODR)Regulations 2015 together a Practicing Company with certificate Secretaryconfirming compliance is annexed and forms part of the Annual Report.

[07] SUBSIDIARY COMPANIES

The Company has three wholly owned subsidiaries as on 31st March 2017.

In accordance with the provisions of Section 129(3) of the CompaniesAct 2013 the Company has prepared a Consolidated Financial Statement of the Company andall the subsidiaries viz. Hooghly

Printing Co. Ltd. Yule Engineering Ltd. and Yule Electrical Ltd. incompliance with the applicable accounting standards and the SEBI (LODR)

Regulations 2015.

[08] PERFORMANCE OF SUBSIDIARIES ASSOCIATE COMPANIES AND JOINTVENTURE COMPANIES AS REQUIRED

UNDER RULE 8(1) OF THE COMPANIES

(ACCOUNTS) RULES 2014

A statement containing salient features of the financial statements ofthe subsidiaries and associates in Form AOC - 1 is attached to the financial statements ofthe Company.

[09] CONSOLIDATED FINANCIAL STATEMENTS

The Audited Consolidated Financial Statements of your Company as on31st March 2017 have been prepared in accordance with the relevant Accounting Standardsissued by the Institute of Chartered Accountants of India and Regulation 33 of the SEBI(LODR) Regulations 2015 and also in accordance with the applicable provisions of theCompanies Act 2013 and form part of this Annual Report. The Financial Statements asstated above are also available on the website of the Company and can be accessed athttp://www.andrewyule. com.

[10] CHANGES IN SHARE CAPITAL

During the year under review the Company has allotted 12462500 and142850000 Equity Shares of Rs2/- each to Bank of Baroda and the Govt. of Indiarespectively on preferential basis as per directions given by the Cabinet Committee on

Economic Affairs (CCEA) and BIFR respectively.

Consequently the Paid-up Equity Share Capital of your Company as on31st March 2017 stands increased to Rs977901956/- divided into 488950978 OrdinaryShares of Rs2/- each fully paid-up. During the year the Company has not issued any shareswith differential voting rights neither granted stock options nor sweat equity. TheOrdinary Shares issued during the year rank pari passu with the existing Ordinary Sharesof your Company.

[11] EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in FormMGT- 9 as required under Section 92 of the Companies Act 2013 is marked as Annexure IIwhich is annexed hereto and forms part of the Board's Report.

[12] NUMBER OF MEETINGS OF BOARD OF DIRECTORS

There were 7 (Seven) meetings of the Board of Directors of the Companyheld during the year 2016-17 on 12th May 2016 30th May 2016 18th June 2016 12thAugust 2016 10th November 2016 and 9th February 2017 (2 meetings were held). Theintervening gap between the meetings was within the period prescribed under the Companies

Act 2013 and SEBI (LODR) Regulations 2015.

[13] DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) read with Section134(5) of the Companies Act 2013 with respect to Directors' Responsibility

Statement it is hereby confirmed that :

[i] in the preparation of the annual accounts for the financial yearended 31st March

2017 the applicable accounting standards had been followed along withthe proper explanation relating to material departures if any;

[ii] the Directors had selected such accounting policies and appliedthem consistently and made judgements and estimates that were reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period; [iii] theDirectors had taken proper and care for the maintenance of adequate accounting records inaccordance with the provisions of this Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities;

[iv] the Directors had prepared the annual accounts on a going concernbasis; [v] the Directors had laid down internal financial controls to be followed by theCompany and that such internal financialcontrols were adequate and operating effectively;and

[vi] the Directors had devised proper system to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

[14] PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

Pursuant to Section 186 of the Companies Act

2013 the details of the loans given guarantees or securities providedand investments made by the Company during the year under review have been disclosed inthe financial statements.

[15] MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIALPOSITION OF THE COMPANY

There are no material change(s) and commitment(s) affecting thefinancial position of the Company occurring between the end of the financial year towhich these financial statements relate and the date of the report.

[16] DIRECTORS

Shri Sunil Munshi Director (Personnel) was holding the AdditionalCharge for the post of Chairman & Managing Director of the Company for the period from1st April 2016 to 16th August 2017.

The Department of Heavy Industry Ministry of Heavy Industries &Public Enterprises Govt. of India vide letter F. No. 10(8)/2014-PE.I dated 16th August2017 has appointed Shri Debasis Jana Director (Planning) as the Chairman & ManagingDirector of the Company for a period of 5 (five) years from the date of his assumption ofcharge of the post i.e. 17th August 2017 or till the date of his superannuation or untilfurther orders whichever is the earliest.

Shri Sudhir Jhunjhunwala and Dr. Dhanpat Ram

Agarwal have been appointed as Part-time Non-official

Independent Directors for a period of 3 (three) consecutive years witheffect from 4th July 2016.

In terms of the provisions of the Companies Act 2013 and otherapplicable provisions if any Smt. Sipra Goon has sufficient been appointed as Part-timeNon-Official Independent

Director designated as Additional Director for a period of

3 (three) consecutive years with effect from 2nd February

2017. However being Additional Director she will hold office upto thedate of the ensuing Annual General Meeting and is eligible for appointment for specifiedperiod(s) on approval of the shareholders. The Company has received notice in writingunder Section 160 of the Companies Act 2013 proposing her name for appointment asDirector.

In accordance with the provisions of Section 152(6)(c) of the CompaniesAct 2013 and your Company's Articles of Association Shri Bhaskar Jyoti MahantaDirector of the Company retires by rotation at the ensuing Annual General Meeting and iseligible for re-appointment. Appropriate resolutions seeking appointment of Shri BhaskarJyoti Mahanta and Smt. Sipra Goon as Directors are appearing in the Notice convening the69th Annual General Meeting of the Company.

The brief resume / details relating to Shri Bhaskar Jyoti Mahanta andSmt. Sipra Goon are furnished in the notes annexed to the Notice of the ensuing AnnualGeneral Meeting of the Company.

Pursuant to the provisions of the SEBI (LODR)

Regulations 2015 it is disclosed that no Director shares anyrelationship inter se.

[17] KEY MANAGERIAL PERSONNEL

The following Key Managerial Personnel of the Company were appointed /resigned during the year 2016-17 in compliance with the provisions of Section 203 of theCompanies Act 2013 : [a] Shri Ayan Dutta ceased to be the Company Secretary as well asKMP of the Company w.e.f. 10th August 2016 and re-designated as Assistant CompanySecretary.

[b] Smt. Sucharita Das has been appointed as Company Secretary anddesignated as a KMP of the Company w.e.f. 12th August 2016.

[18] DECLARATION BY INDEPENDENT DIRECTORS

The Company has received the necessary declaration from all theIndependent Directors of the Company in accordance with Section 149(7) of the CompaniesAct 2013 that they meet the criteria of Independence as prescribed under Section 149(6)of the Companies Act 2013 and the SEBI (LODR) Regulations 2015.

[19] APPOINTMENT AND REMUNERATION POLICY

Being a Central Public Sector Enterprise the appointment tenureperformance evaluation remuneration etc. of the Directors are made/fixed by the Govt. ofIndia. The remuneration of officers Related is decided as per Government guidelines on PayRevision and remunerations of other employees of the company are decided as per WageSettlement Agreement entered with their Union every five years. Theappointments/promotions etc. of the employees are made as per Recruitment and PromotionPolicy approved by the Board.

[20] CORPORATE SOCIAL RESPONSIBILITY

In accordance with Section 135 of the Companies Act 2013 and the rulesmade thereunder the Company has formulated a Corporate Social Responsibility Policy abrief outline of which along with the required disclosures is given in Annexure IIIwhich is annexed hereto and forms a part of the Boards' Report.

The detail of the CSR and Sustainability Policy is also posted on thewebsite of the Company and may be accessed at the link - http://www.andrewyule.com/pdf/policies/CSR_and_ Sustainability _Policy.pdf.

[21] RISK MANAGEMENT

As part of our governance philosophy the Board has formed a RiskManagement Committee to ensure a robust risk management system in line with the applicablelaws. The details of Committee and its terms of reference are set out in the CorporateGovernance Report which is part of the Board's Report and is available as a separatesection in this Annual Report. Our risk-management framework is designed to be simpleconsistent and clear for managing and reporting risks from the Group's businesses tothe Board. Our management systems organisational structures processes standards andcode of conduct together form the system of internal controls that govern how we conductbusiness and manage associated risks.

[22] COMMITTEES OF BOARD

Details of various committees constituted by the Board of Directors asper the provisions of the

Companies Act 2013 and SEBI (LODR) Regulations

2015 are given in the Corporate Governance Report and forms part ofthis report.

[23] RELATED PARTY TRANSACTIONS

The Company does not have a material unlisted

Subsidiary as defined under Regulation 16(1)(c) of the SEBI (LODR)Regulations 2015. During the year under review your company did not have any relatedparty transactions which required prior approval of the shareholders. There has been no

Transactions material significant during the year under review havingpotential conflict with the interest of the Company. Necessary disclosures required underthe Accounting Standard (AS-18) have been made in the Notes to Financial Statements. Henceno disclosure is made in form AOC-2 as required under Section 134(3)(h) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014.

The Related Party Transaction Policy for determining materiality ofrelated party transaction and also on dealing with related parties is uploaded on theCompany's website at the link -http://www.andrewyule.com/pdf/policies/Policy_Related_ Party_Transactions.pdf.

[24] DISCLOSURES UNDER RULE 8(5) OF THE

COMPANIES (ACCOUNTS) RULES 2014

[i] Financial summary or highlights : As detailed under the heading‘Financial Performance'. [ii] Change in the nature of business if any : None

[iii] Details of Directors or Key Managerial Personnel (KMP) who wereappointed or resigned during the year :

[a] Director(s) appointed Dr. Dhanpat Ram Agarwal
Shri Sudhir Jhunjhunwala
Smt. Sipra Goon
[b] Director(s) resigned ...
[c] KMP(s) appointed Smt. Sucharita Das as
Company Secretary
[d] KMP(s) resigned Shri Ayan Dutta (re- designated as Asst. Company Secretary)

[iv] Names of Companies which have become or ceased to be SubsidiariesJoint Venture Companies or Associate Companies during the year: There were no suchCompanies in terms of the provisions of the Companies Act 2013.

[v] Details relating to deposits: There were no fixed deposits of theCompany from the public outstanding at the end of the financial year. No fixed deposithas been accepted during the year and as such there is no default in repayment of thesaid deposits. [vi] There has not been any deposit which is not in compliance with therequirements of Chapter V of the Companies Act 2013. and material orders have [vii] Nosignificant been passed by any Regulator(s) or Court(s) or Tribunal(s) impacting the goingconcern status and Company's operations in future.

[25] INTERNAL CONTROL SYSTEMS

The Board has devised systems policies and procedures / frameworkswhich are currently operational within the Company for ensuring the orderly and efficientconduct of its business

This includes adherence to the Company's policy safeguardingassets prevention and detection of frauds and errors accuracy and completeness of theaccounting records and timely preparation of reliable financial information. In line withbest practices the Audit Committee and the Board reviews these internal control systemsto ensure they remain effective and are achieving their intended purpose. Whereweaknesses if any are identified as a result of the reviews new procedures are put inplace to strengthen controls. These controls are in turn reviewed at regular intervals.

[26] REPORTABLE FRAUD

No fraud has been reported by the Auditors under

Section 143(12) of the Companies Act 2013 during the year underreview.

[27] DISCLOSURE AS PER RULE 5(1) OF

COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL)RULES 2014

The Company being a Central Public Sector Enterprise is exempted tomake disclosure pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014. Hence no information is required to beappended to this report in this regard.

[28] PARTICULARS OF EMPLOYEES RULE 5(2) & 5(3) OF COMPANIES(APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014

Your Company has not paid any remuneration attracting the provisions ofRule 5(2) & 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014. Hence no information is required to be appended to this reportin this regard.

[29] MANPOWER

Manpower of the Company as on 31st March 2017:

Category Executives Non-executives Total
Male 219 7846 8065
Female 05 6715 6720
Total 224 14561 14785

[30] WELFARE OF WEAKER SECTIONS OF THE SOCIETY

Statutory welfare facilities as incorporated in the

Factories Act 1948 and The Plantation Labour Act 1951 areadministered by the Company for its employees. Apart from the statutory welfarefacilities the Company extends scholarships to the off spring of the employees toencourage academic excellence for the ultimate betterment. In addition financialaccommodation is extended to the employees for their welfare to address eventuality andcontingency. To promote sports talent in far flung areas of North Eastern India Soccertournaments are organized at our Tea Gardens annually.

Percentage of employees in total strength of the Company belongs to SC/ ST / OBC is as follows: SC

17.18% ST 29.65% and OBC 50.39%.

[31] EMPOWERMENT OF WOMEN

Development of society is closely linked with development of womenwhich is why empowering and encouraging women lies at the core of all our

CSR programmes. We do it through embedding a gender perspective in mostof our programmes but we also do it through direct interventions with women. Thewomen's Self Help Groups (SHG) has successfully and systematically empoweredmarginalised women through awareness raising capacity building economic empowerment andsolidarity. All necessary measures/ statutory provisions for safeguarding the interests ofwomen employees in issues like payment of wages hours of work health safety welfareaspects and maternity benefits etc . arebeingfollowedbythe Company

Total number of women employees as on 31st March 2017 were as follows:

Executive 05 (five)
Non-unionised Supervisor 03 (three)
Staff 44 (forty-four)
Subordinate Staff 55 (fifty-five)
Plantation Worker 6613 (six thousand six hundred thirteen)
Total number of Women employees 6720 (six thousand seven hundred twenty)

[32] PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

In accordance with the provisions of The Sexual

Harassment of Women at Workplace (Prevention

Prohibition & Redressal) Act 2013 the Internal ComplaintsCommittee has been constituted and the same holds meetings at regular interval. Nocomplaint or allegation of sexual harassment has yet been received.

[33] GRIEVANCE REDRESSAL MECHANISM

The Company expeditiously disposes of the public grievance and copy ofthe reply is sent to the controlling Ministry in case the public grievance is forwarded bythem.

[34] INDUSTRIAL RELATIONS

During the year under review Industrial Relations at theCompany's units continued to remain cordial and peaceful.

[35] SIGNING OF MEMORANDUM OF UNDERSTANDING (MOU) FOR THE YEAR

2017-18

Your Company has signed Memorandum of Understanding (MoU) with theMinistry of Heavy Industries and Public Enterprises for the year 2017-18. The MoU setsforth various targets and parameters of performance which are assessed against actualachievements after close of financial year. The rating for 2016-17 has not been issued sofar.

[36] IMPLEMENTATION OF THE RIGHT TO

INFORMATION ACT 2005

The Company abides by the provisions of the Right to Information Act2005 (RTI Act) and information seekers are furnished with relevant information by thePublic Information Officers. Every endeavour is there on the part of the Company todispose of the applications expeditiously.

During the year ended on 31st March 2017 the number of applicationsreceived / accepted / rejected / disposed of under RTI Act is as follows :

Applications received 30 (thirty)
Applications accepted 30 (thirty)
Applications rejected NIL
Applications disposed of 30 (thirty)

[37] VIGILANCE

The functioning of vigilance department includes preventive as well aspunitive vigilance and the main thrust is on the systems improvements in the organisation.Various activities of vigilance department during the year 2016-17 are as under : [i] TheCompany has already implemented e-procurement policy (Rs2 lakhs & above) as per theguidelines of the Ministry across all the divisions.

[ii] The disposal of scrap materials is also being done throughe-tendering by MSTC for all the divisions.

[iii] As per the instructions of Central Vigilance Commission (CVC) andMinistry quarterly structured meetings of vigilance department with the management arebeing conducted regularly. During 2016-17 4 (four) meetings were conducted. Issuesrelated to e-governance leveraging of technology updation of DOP etc. have beendiscussed. [iv] Tea division Engineering Division and Electrical Division have commencede-procurement & e-payment.

[v] Updation of manuals is undertaken by respective functional heads /departments; and in case the draft manual is forwarded to Vigilance Department beforeputting up to the Board the same is examined.

[vi] Training programme : Periodical training programmes workshopsinteractive sessions presentation etc. are organized by Vigilance Study Circle KolkataChapter. Being a corporate member the programmes are attended by Officers from differentdepartments of AYCL as per the nomination of the Management.

[vii] Annual Property Returns : Annual Property Returns of executivesand non-unionized supervisors are being scrutinized regularly as per the guidelines ofCVC.

[viii] Vigilance awareness week : Vigilance awareness week was observedfrom 31st October 2016 to 5th November 2016 at all the locations/offices of AYCL.Various competitions workshops and seminars are conducted during the week for theemployees of the Company. Online Integrity Pledge had been taken by the employees of theCompany and individual certificates downloaded. Whistle Blower Mechanism and PIDPIguidelines of CVC were deliberated upon as well as affixed on the notice board of theRegistered Office of the Company for perusal of the employees. Workshop/

Sensitization programme on Purchase Procedure and Conduct Discipline& Appeal Rules of the Company was conducted at the

Registered Office of the Company.

[ix] Customer redressal camp had been organized at the Yule Tea Loungeat Eco Park

New Town Kolkata.

[38] PROGRESSIVE USE OF HINDI

In AYCL the Unicode system has been implanted in majority of thecomputers of the Company.

The Company has provided Hindi Language software in computers andimparting training to its employees so that AYCL's employees can use the same intheir day-to-day workings. For propagating and implementation of the provisions ofOfficial Language Act 1963 the company continuously organizing Hindi competitions likeslogan writing Kabya Path Competition etc. and the same are published in the in-housemagazine "Yule Observer". Employees are being given retraining under the"Hindi Education Scheme" which is a continuous process in the Company. Employeesof the company are encouraged to participate in various competitions in Hindi conducted byother institutions.

[39] CORPORATE WEBSITE OF THE COMPANY

The Company maintains a website www. andrewyule.com where detailedinformation of the Company is provided.

[40] RESEARCH & DEVELOPMENT (R & D) FACILITIES OF THECOMPANY

The main focus of in house R & D facilities in the Company is toprovide continuous up-gradation to the existing products to match the demand of thedomestic market as well as to grab the opportunity in export market. Some of the R & Dactivities carried out by the company's different Divisions were as follows : [a] ForTea research & development we are members of Tea Research Association under TeaBoard Ministry of Commerce.

Latest developments/recommendations are adopted by the Company forimproving land productivity and quality of our tea produce.

[b] Engineering Division has developed Metal

Die casting to cater to almost 80% of the full range of newly developedAxial Fan. The new design for development for Jet fans has already been commenced.

[c] Electrical Division has developed Level II type transformers upto100 KVA and it has been initiated in a phased manner to cater to the needs of the ongoingDDUJY & IPDS Projects. [d] Electrical Division has taken initiative for development ofinfrastructural facility for dry type transformer upto 3MVA and Power Transformer upto12.5 MVA 33kV class has already been initiated to include a mix in the product basket.

[41] CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO

The particulars relating to Conservation of Energy TechnologyAbsorption Foreign Exchange Earnings and Outgo as required to be disclosed underprovisions of Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3) of theCompanies (Accounts) Rules 2014 are furnished in Annexure IV and forms part ofthis report.

[42] PROCUREMENTFROMMICROSMALLAND

MEDIUM ENTERPRISES DEVELOPMENT (MSMED) ACT 2006

As per requirement of Micro Small and Medium Enterprises Development(MSMED) Act 2006 and notifications issued by Central Government in this regard PSUs arerequired to purchase minimum

20% of total annual purchase of specified products produced andservices rendered by MSEs. It further requires that 4% out of 20% shall be earmarked forprocurement from MSEs owned by Scheduled Castes or Scheduled Tribes entrepreneurs. It alsorequires the PSUs to report goals set with respect to aforesaid procurement andachievements made thereto in its Annual Report.

In this regard it is to mention that the total procurement of goodsduring 2016-17 amounts to Rs169.71 crores out of which total value of goods procured fromMSEs (including MSEs owned by Scheduled Castes or Scheduled Tribes entrepreneurs) isRs95.21 crores which amount to 56.10% of total annual procurement of products produced byMSEs.

Thus the Company is complying with requirement of MSMED Act 2006.

[43] TRAINING PROGRAMME

Duringtheyear2016-17total22trainingprogrammes (internal and external)were conducted. Out of 156 participants who were imparted training during the year invarious programmes 52 were executives and unionized supervisors and 104 workers. Total156 man days of training was completed on various topics during the year under review.

AYCL has been encouraging its workmen to show their inherent skills andhas been providing various platforms to exhibit their skill.

[44] STATUTORY AUDITORS AND AUDIT REPORT

In terms of Section 143 (5) of the Companies Act 2013 M/s V. Singhi& Associates Chartered Accountants have been appointed by the Comptroller &Auditor General of India as auditors of your Company for the financial year 2016-17. TheStatutory Auditors'

Report is attached which is self explanatory.

In respect of the comments made by the Statutory Auditors in theirreport your Directors have stated that:

Type of Audit Qualification

Management Explanation

Standalone Audit Qualification

[1] No provision has been made in respect of diminution in the value of investments in WEBFIL Ltd. Fort Gloster Industries Ltd. Katras Jherriah Coal Co. Ltd. The New Beerbhoom Coal Co. Ltd. amounting to '33.84 lakh.

Diminution in the value of long term equity investment as stated point no. 1 is in the opinion of the management not of a permanent nature and accordingly no provision has been made in the Accounts. A suitable disclosure in this regard has been made in the Note No.10.08.

 

[2] No provision for diminution in the value of investments in 6% Cumulative Redeemable Preference Shares amounting to '204.40 lakh and Zero Rate Unsecured Redeemable Bond amounting to '305.00 lakh of WEBFIL Ltd. The Company has decided to increase the moratorium period in respect of 6% Cumulative Redeemable Preference Shares-WEBFIL of '204.40 lakh and WEBFIL Ltd. Zero Rate Unsecured Redeemable Bond of '305.00 lakh for a period of 7 (seven) years commencing from 1st April 2014 and 20th December 2014 respectively. Hence Management feel no provision is required and suitable disclosure in this regard has been made in the Note No.10.22.
Consolidated Audit Qualification
[3] No provision has been made in the Financial Statements for diminution in the value of non-current investments amounting to '543.24 lakh (Refer Note No.10.10). Diminution in the value of long term equity investment as stated in point no. 3 it is in the opinion of the management not of a permanent nature and accordingly no provision has been made in the Accounts. A suitable disclosure in this regard has been made in the Note No.10.10.
The Company has decided to increase the moratorium period in respect of 6% Cumulative Redeemable Preference Shares- WEBFIL of '204.40 lakh and WEBFIL Ltd. Zero Rate Unsecured Redeemable Bond of '305.00 lakh for a period of 7 (seven) years commencing from 1st April 2014 and 20th December 2014 respectively. Hence Management feel no provision is required and suitable disclosure in this regard has been made in the Note No.10.27.
[4] In the financial statements of The Hooghly Printing & Co .Ltd : The matter will be reviewed in next financial year.
The difference in value as per books of account and audited financial statements as on 31st March 2016 in respect of Plant & Machinery for '0.10 lakh being short as per books of account and in respect of Furniture for '0.07 lakh being excess as per books of account have been adjusted during the year crediting the Statement of Profit and Loss for the year by '0.03 lakh (net). We are unable to comment on the reason for such opening difference and the basis of adjustment.

[5] In the financial statements of The New Beerbhoom Coal Co. Ltd. :

[a] No provision has been made in the financial statements for diminution in the value of long term Investments in Yule Financing and Leasing Co. Ltd. Yule Agro Industries Ltd. & WEB- FIL Ltd. amounting to '8.67 lakh. Group share in Consolidated Financial Statements is '2.86 lakh (Refer Note No. 10.11[ii]). Diminution in the value of long term equity investment as stated in point No. 5(a) it is in the opinion of the management not of a permanent nature and accordingly no provision has been made in the Accounts.
[b] No provision has been made against non realisability of the principal on maturity amounting to '4.50 lakh due from a body corporate. Group Share in Consolidated Financial Statements is '1.48 lakh. (Refer Note No. 10.11[iv]). Regarding the matter stated in point No. 5(b) Management is of the view that the amount is realisable.

[6] In the financial statements of Katras Jherriah Coal Co. Ltd. :

[a] Only those claims in relation to cok- ing/non coking coal mines have been admitted by the respective commissioners of payments or are subject to appeal filed b)i the claimants and still pending with the Appellate Courts have been included in other long term liabilities. Accordingly the extent of adjustments as may be required in respect of claims under appeals still pending with the Appellate Court is not ascertainable. Refer Note 10.15(a). Financial impact is not ascertainable and the matter is sub-judiced.

 

[b] From the available records and information it has not been possible to ascertain the extent to which amount receivable '1.79 lakh ma)i eventually be realized. Group Share in Consolidated Financial Statements is '0.57 lakh [Refer Note No. 10.11(v)]. The amount stated in point no. 6(b) is realisable as per the opinion of the Management.
[c] No provision has been made against diminution in value of investments in Yule Agro Industries Ltd. and The New Beerbhoom Coal Co. Ltd. amounting to '4.73 lakh. Group Share in Consolidated Financial Statements is '1.50 lakh (Refer Note No. 10.11[iii]). Diminution in the value of long term equity investment as stated in point no. 6(c) it is in the opinion of the management not of a permanent nature and accordingly no provision has been made in the Accounts.
[d] No provision has been made against non realisability of the principal on maturity amounting to '2.00 lakh due from a body corporate. Group share in the Consolidated Financial Statements is '0.63 lakh (Refer Note No. 10.11[vi]). The amount stated in point no. 6(d) is realisable as per the opinion of the Management.
[7] In the financial statements of Yule Electrical Ltd. & Yule Engineering Ltd. : Noted.
The financial statements of Yule Electrical Ltd. and Yule Engineering Ltd. indicate that the companies are not going concern as defined in Accounting Standard 1 on Disclosure of Accounting Policies issued by the Institute of Chartered Accountants of India since there are no operating activities in the current year as well as in recent past.

[45] SECRETARIAL AUDITOR AND AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 yourCompany has appointed M/s. Vinod Kothari & Company Practising Company Secretaries toconduct Secretarial Audit of the Company for the financial year ended 31st March 2017.Accordingly they have conducted Secretarial Audit for the year 2016-17 and submittedSecretarial Audit Report in Form No. MR-3 which is attached hereto as Annexure V and formspart of the Board's Report.

The observations of the Secretarial Auditor alongwith ManagementExplanation are tabulated as under :

Matter of Emphasis Management Explanation
[1] As on 31st March 2017 the Board was comprised of 8 (Eight) directors viz. Functional Directors of PSUs are appointed by GOI as per the
[a] 3 (Three) were Whole Time Directors viz. Director (Personnel) and Chairman & Managing Director (Addl. Charge) Director (Finance) and Director (Planning) recommendations of PESB. Govt. Nominee and Independent Directors are appointed by Administrative Ministry. Hence the Company could not comply with the said provision.
[b] 2 (Two) were Parttime Non-executive Government Nominee Directors from Department of Heavy Industries; and
[c] 3 (Three) were Nonexecutive Independent Directors.
Pursuant to section 152(6) of the Act 2/3rds of the total directors (except Independent Directors) of a company shall be rotational directors. Thus while the Company needed 3 (Three) rotational directors it had only 2 (Two) rotational directors on its Board.

 

[2] In terms of sec 149 (4) of the Act Regulation 17(1)(b) of the Listing Regulations 2015 where Chairman of the Board is an executive director atleast half of the Board shall comprise of Independent Directors. In view of the total number of non-independent directors on board viz. 5 (Five) directors the Company has only 3 (Three) Independent Directors on its Board. Thus the Board of directors of the Company is not duly constituted in terms of the Act Listing Regulations 2015 and the Corporate Governance Guidelines issued by Department of Public Enterprises. Functional Directors of PSUs are appointed by GOI as per the recommendations of PESB. Govt. Nominee and Independent Directors are appointed by Administrative Ministry. Hence the Company could not comply with the said provision.
[3] Since there were no Independent Directors on the Board of Directors from 1st April 2016 till 11th August 2016 the provisions of the Act and the Listing Regulations 2015 relating to the composition of the Committees viz. Audit Committee Nomination and Remuneration Committee CSR Committee were not complied with by the Company during that period. Functional Directors of PSUs are appointed by GOI as per the recommendations of PESB. Govt. Nominee and Independent Directors are appointed by Administrative Ministry. Since there were no Independent Directors on the Board of Directors of the Company during the period 1st April 2016 till 11th August 2016 Audit Committee Nomination and Remuneration Committee and CSR Committee could not be constituted at that time.
[4] The Company has constituted Audit Committee Stakeholders Relationship Committee Nomination and Remuneration Committee Corporate Social Responsibility Committee and Risk Management Committee at its board meeting held on 12th August 2016. However the Company was unable to hold the requisite number of Audit Committee meetings during the Financial Year 2016-17 as required under regulation 18 of the Listing Regulations 2015. Functional Directors of PSUs are appointed by GOI as per the recommendations of PESB. Govt. Nominee and Independent Directors are appointed by Administrative Ministry. Since Independent Directors were appointed on 12th August 2016 the Company could not convene requisite number of Audit Committee meetings during the Financial Year 2016-17 as required under regulation 18 of the Listing Regulations 2015.
[5] As reflected from the financial statement of the Company for the Financial Year 2016-17 the Company has granted loan to its wholly owned subsidiaries and has provided guarantee to its Associate Companies. However the same was not approved b)i the Audit Committee in terms of section 177(4)(iv) and (v) of the Act since the Audit Committee did not exist on the relevant date. The said transactions were placed before the Board and the Committee of the Board for review and approval. Functional Directors of PSUs are appointed by GOI as per the recommendations of PESB. Govt. Nominee and Independent Directors are appointed by Administrative Ministry. Since there were no Independent Directors on the Board of Directors of the Company Audit Committee could not be constituted at that time and the Company could not comply with the said provisions.

[46] COST AUDITORS AND COST AUDIT REPORT

The Company has appointed M/s. DGM & Associates Cost Accountants(Firm Registration No: 000038) as Cost Auditors of the Company for the year 2017-18 at theremuneration as set out in Item No.5 of the Explanatory Statement attached to theNoticewhichissubjecttotheratificationof the members in the ensuing Annual GeneralMeeting. The Company submits its Cost Audit Report with the

Ministry of Corporate Affairs within the stipulated time period.

[47] COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA ONTHE ACCOUNTS

The Comptroller and Auditor General of India (CAG) had conductedSupplementary Audit under Section 143(6)(a) of the Companies Act 2013 of the financialstatements of Andrew Yule & Co. Ltd. for the year ended 31st March 2017. The commentsof Comptroller & Auditor General of India under Section 143(6)(b) of the CompaniesAct 2013 on the Accounts of the Company for the year 2016-17 forms part of this report.

[48] GREEN INITIATIVES

As in the previous years this year also the electronic copies of theNotice have been sent to all the Members whose email IDs are registered with theCompany/Company's Registrar and Share Transfer Agent/ Depository Participant(s) forcommunication purposes. The electronic copies of the Annual Report for the year 2016-17are being sent to all Members whose email addresses are registered with theCompany/Company's Registrar and Share Transfer Agent/ Depository Participant(s). Formembers who have not registered their email addresses physical copies of Annual Reportare being sent in the permitted mode.

[49] CAUTIONARY STATEMENT

Statements in the report describing the Company's objectivesexpectations and/or anticipations may be forward looking within the meaning of applicable

Securities Law and Regulations. Actual results may differ materiallyfrom those stated in the statement. Important factors that could influence theCompany's operations includes global and domestic supply and demand conditionsaffecting selling prices of finished goods availability of inputs and their priceschanges in the Government policies regulations tax laws economic developments withinthe country and outside and other factor such as litigation and industrial relations.

The Company assumes no responsibility in respect of the forward-lookingstatements which may undergo changes in future on the basis of subsequent developmentsinformation or events.

[50] ACKNOWLEDGEMENT

Your Directors place on record their appreciation of the endeavour ofthe employees at all levels and the services rendered by them.

The Board also gratefully acknowledges the valuable guidance supportand cooperation received from Department of Heavy Industry Ministry of Heavy Industries& Public Enterprises Government of India as well as other Ministries in both Centraland State Governments.

The Board is also thankful to the Company's valued shareholdersesteemed customers for their valued patronage and for the support received from thebankers financial institutions and suppliers in India and abroad.

For and on behalf of the Board
Debasis Jana
Kolkata Chairman & Managing Director
21st August 2017 DIN: 07046349