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India Glycols Ltd.

BSE: 500201 Sector: Industrials
BSE 00:00 | 17 Aug 452.65 1.15






NSE 00:00 | 17 Aug 454.00 2.85






OPEN 457.75
VOLUME 10748
52-Week high 619.90
52-Week low 160.35
P/E 10.61
Mkt Cap.(Rs cr) 1,401
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 457.75
CLOSE 451.50
VOLUME 10748
52-Week high 619.90
52-Week low 160.35
P/E 10.61
Mkt Cap.(Rs cr) 1,401
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

India Glycols Ltd. (INDIAGLYCO) - Director Report

Company director report

To The "Members

Your Directors are pleased to present the 34th Annual Report on the businessand operations of the Company together with the Audited Financial Statements of yourCompany for the financial year ended 31st March 2018.


(Rs. in Crores) (except earnings per share)
Particulars Year ended 31.03.2018 Year ended 31.03.2017
Gross Sales and other income 4165 3590
Earnings before interest taxes depreciation and amortization 335 244
Profit/(loss) before depreciation and amortization exceptional item and tax 218 122
Depreciation and amortization 69 68
Profit /(loss) before tax 149 54
Provision for tax 51 9
Net profit/(loss) 98 45
Earnings per share (in Rs.) 31.68 14.38
Proposed dividend on Equity Shares 12.38 3.10
Tax on dividend 2.55 0.63

Gross Sales till 30th June 2017 includes Central Excise Duty asapplicable and thereafter is net of Goods and Service Tax in accordance with theprovisions of Ind-AS.


Keeping in view the good performance of your Company your Directors are pleased torecommend a dividend of Rs.4/- (Rupee Four Only) per equity share of face value of Rs.10/-each (i.e. 40%) for the financial year ended 31st March 2018 subject to theapproval of the Shareholders in the ensuing Annual General Meeting. The total outgo onaccount of dividend will be Rs.14.93 Crores including dividend tax.


During the FY 2017-18 on a standalone basis your Company recorded total revenue ofRs.4165 Crores as compared to Rs.3590 Crores in FY 2016-17 an increase of about 16%.The profit after depreciation and tax for the FY 2017-18 increased to Rs.98 Crores ascompared to Rs.45 Crores earned during the FY 2016-17 an increase of about 120%representing robust growth over the previous year. The Nutraceutical and Chemicalbusinesses performed well and remained major contributors to the good financialperformance of the Company.

The other factors for the Company's good performance were favorable realization valuefor Mono Ethylene Glycol in the international and domestic markets ample availability ofmolasses a feedstock at competitive prices. Also due to diversion of alcohol towardsEthanol Blending in Gasoline given the exorbitant price offered by the Government forprocurement of ethanol the Company is importing the same since last 2-3 years and havecontinued the same trend in the year under review as the same is available ininternational market at lower prices vis-a-vis the local market.

Under the current scenario the outlook continues to remain encouraging in the nearterm.

During the year under review no amount was transferred to reserve.


There were no material changes and commitments affecting the financial position of theCompany between the end of financial year and date of this report. There has been nochange in the nature of the business of the Company.


During the year under review your Company has been awarded/conferred the followingawards:

1. Best Innovative Logistics Award" in the category of "Smart Exporter -Chemicals"

2. Rs.Grand Gold Award' for seventh year in a row by Monde Selection CommitteeBelgium for attaining high level of quality for Extra Neutral Alcohol (ENA).

During the year under review India Ratings & Research (Ind-Ra) a credit ratingAgency up-graded the Company's Long-term Issuer Rating to ‘IND BBB+' from ‘INDbBb' with Outlook stable. The instrument-wise ratings are as follows:

Instrument Type Rating/outlook Rating Action
Fund-based Limit IND BBB+/Stable/ IND A2 Upgraded
Non Fund based Limit IND A2 Upgraded
Term Loan IND BBB+/Stable Upgraded


The Company is the largest manufacturer of Bio-Mono Ethylene Glycol (Bio-MEG) in theworld made out of renewable feedstock i.e. Molasses and Ethanol. Bio-MEG has anapplication inter-alia in making PET bottles which is used for packaging of beverageproducts.

Sales of Glycols [Monoethylene Glycol (MEG) Diethylene Glycol (DeG) TriethyleneGlycol (tEg) and Heavy Glycols] have increased from 88294 MT during the FY 2016-17 to113439 MT in FY 2017-18 and whereas the sales value was at Rs.649 Crores and Rs.965Crores respectively.

Sales under Ethylene Oxide Derivatives (EOD) business increased to 99609 MT in FY2017-18 from 98107 MT during previous year and the sales value was Rs.980 Crores andRs.981 Crores respectively.

During the year your Company produced 108204 MT of Glycols compared to 82711 MTlast year. Ethylene Oxide Derivatives (EODs) production has been 98283 MT compared to97322 MT last year.


Your Company achieved the export sales value of Rs.917 Crores during the year underreview as compared to Rs.864 Crores during previous year.

The Company continue to hold the ‘Three Star Export House' status as granted byGovernment of India.


During the year your Company registered total sales value of Rs.1379 Crores ascompared to Rs.1301 Crores last year in the Ethyl Alcohol (Potable) division. Due topersistent efforts for export of high quality Extra Neutral Alcohol (ENA) the Company hasgained the position of premium quality ENA supplier in the international markets.

The existing tie-up with Bacardi for bottling of their products at the Kashipurbottling unit continues to grow in strength. Your Company is having license for operationsin and sale of Country Liquor and Indian Made Foreign Liquor (IMFL) in the States of UttarPradesh and Uttarakhand. Further during the year under review the Company launched‘Soulmate Blu' a Premium Whisky in semi-premium segment in few more states inaddition to the States of Uttarakhand and Haryana. Also under the new liquor policy ofState of Uttar Pradesh effective from 1st April 2018 opening the market forall players for their brands the Company intends to start selling its own IMFL brands inthe state.

The Company being a registered supplier to Indian Defense forces through CSDintroduced premium Rum under the brand name ‘Beach House 3 X' in addition to theother regular brands of Rum during the year under review.


The Ennature Bio-pharma division of the Company is operating in the space ofNutraceuticals Phytochemicals & health supplement ingredients. The manufacturingfacility is located at Dehradun and is accredited with EU written confirmation WHO GMPCurrent Good Manufacturing Practices (cGMP) ISO 9001 ISO 22000 Hazard Analysis andCritical Control Points (HACCP) Kosher and Halal. The unit was an EOU however givensurge in growth in domestic market and with GST paving the way for ensuring level playingfield the unit voluntarily applied for cessation to be an EOU and post requisiteapprovals from the authorities the unit ceased to be an EOU w.e.f. 31st May2017.

The unit has an advanced production facility including organic certified supercritical Fluid extraction & ethanol extraction facility for production ofStandardized Botanical Extract Phytochemicals food supplements Spice Extracts andActive Pharmaceuticals ingredients (API) of natural plant origin. During the yearadditional capacity has been created to meet the surging demands of the products.

The APIs derived from plant sources have been doing exceedingly well with some of themolecules having gained significant growth and captured major market share in theburgeoning global pharmaceutical market.

Your Company is working on many new APIs which will be launched in the next few years.

The division has achieved sales of Rs.180 Crores for FY 2017-18 as compared to Rs.148Crores over previous year. Both domestic & exports sales have shown markedimprovement existing products sales have increased with increase in the customer base andmore usage from the old customers.

Some of the products developed successfully during the year include Liquid Nicotine& various salts for the cigarette replacement therapy in addition to organic NaturalAstaxanthin. The Company is growth & result oriented with an objective & concernfor environment transforming lives through green technology for isolation &purification of phytochemicals.


During the year under review the Company from its Air separation unit produced 21315MT of Liquid Oxygen and 957 MT of Liquid Nitrogen. Both Liquid Oxygen and Liquid Nitrogenwere sold in the market and also used for in house requirements. In addition Argon of2764 MT was also produced and its sales were 2757 MT.

Industrial Gas Division also produced Beverage and Industrial Grade Liquid CarbonDi-oxide (LCO2) at Kashipur. During the year your Company has produced 32551MT of LCO2 and its sale was 33107 MT.

Your Company also produced ETO (Ethylene Oxide & Carbon Dioxide Gas Mixtures) underthe trade name IGL-STERI GAS at its Kashipur Plant. It is suitable for sterilization ofDisposable Surgical & Medical Devices spices and packing substances like rubberplastic etc. The Company has in house facility for production of EO and LCO2which are also used in production of ETO and as such it is the only plant in India to havesuch manufacturing facility which gives us a distinct edge over other suppliers in themarket. During the year under review the Company has sold 1051 MT of Steri Gas ascompared to 1013 mT in the last year.

Further the Industrial Gases segment registered total sales of all gases of Rs.37Crores during FY 2017-18 against a sale of 39 Crores during the last year.


India's first multi feedstock continuous flow plant has been commissioned at IndiaGlycols Ltd. Kashipur site with a capacity of 10 ton per day biomass processing based onDBT-ICT Technology.

This Technology is designed for handling all types of agricultural residues likeBagasse Rice Straw Wheat Straw Bamboo Cotton Stalk Corn Stover Wood chips etc. withoptimum product yields.

So far your Company has determined optimal plant performance and finally validatedthis technology for feed stocks like Bagasse Rice Straw & Wheat Straw & cottonstalk. The Company has also generated detailed performance data sufficient to transforminto full scale commercial plant. Altogether this plant is capable of building a sugarplatform which can further be transformed into various value added sugar based chemicalsthrough biotech (green) route other than Alcohol.

Production of Green Lactic Acid and higher esters are also planned on this facility.Technology validation trials are under progress.


Your Company has continuously been focusing on innovations for products as well as forprocesses to maintain market leadership and competitive advantage. In order to ensure thatthe new products are delivered in time as per the needs of the customers a system of NewProduct Development has been put in place. Also improvements in cost of many of ourlarge-volume products were done through process validation to improve yield productionefficiency and usage of alternative Raw Materials.

Your Company has steadily been moving from being supplier of commodity products to asupplier of performance-driven specialty products. Emphasis is being given to maximizeconsumption of Ethylene Oxide (EO) for high value products for niche markets.

Manufacture of Bio-MEG/Green MEG going into packaging products with green label usedin niche markets such as processed food health care including pharmaceutical and personalcare etc. is one of the most prominent success stories of your Company in recent times.In addition multiple initiatives have been taken to develop more Green products to meetthe rising demand of environment-friendly surfactants and specialty chemicals based onrenewable resources like Rice bran oil Coconut oil Groundnut oil Soybean oil Palm oilCashew-nut shell liquid etc. A large number of products based on Alkyl Phenols (APEO) willhave to be replaced with base materials from renewable resources. Thus meeting the needsof customers especially those who are engaged in Exports your Company has developedspecialty surfactants to replace APEO-based products. Some of the notable productsintroduced recently includes: (a) ‘Ether Carboxylates' the specialty surfactants forapplications such as cosmetics and personal care high-end formulations of pesticidesemulsion adhesives etc. as they have high resistance to temperature and water hardnesscritical for these application (b) ‘Specialty Ethoxylates' with unique propertiessuch as low surface tension high dispersing high wetting and low foaming tendencies etc.which are desired for advanced applications (c) ‘Environment-friendly surfactants'having special characteristics of stabilizing newer range of agrochemicals formulationssuch as OD ZC EW mixed formulations (d) ‘New generation green brake fluids' ofDOT 4+ and 5.1 for automotive sector catering to most modern cars etc.

Also a number of products were introduced for high- end applications in industrysectors such as textiles household and institutional cleaning personal care fabriccare water treatment agrochemicals paints and coatings etc. These developments willprovision cost effective products to our customers who are currently using importedproducts.

All such products involving new chemistries and new processes will be suitable forniche applications. Thus there will be better business for your Company in differentindustry sectors thanks to these new products.


During the year under review your Company has raised term loan and other creditfacilities amounting to Rs.167 Crores. The Company renewed the EPBG advance for USD 91.20million (' 581.09 Crores) after meeting commitments for 2 years. Out of which an amountof USD 5.00 million (' 31.86 Crores) to the customers were paid against the commitmentsreducing the total liability to USD 86.20 million (' 549.23 Crores) as on 31stMarch 2018. Further the Company has re-paid upon maturity term loan of Rs.115.73Crores during the year.

The Company has been regular in meeting its obligations towards payment ofprincipal/interest to Financial Institutions/Banks.

Details of the Loans Guarantees and Investments covered under the provisions ofSection 186 of the Companies Act 2013 are provided in the notes to the standalonefinancial statements which form part of the Annual Report. The Company had discontinuedits fixed deposits scheme in the FY 2009-10 and has not accepted any fresh depositscovered under Chapter V of the Companies Act 2013 during the year. There are no overduedeposits except unclaimed deposits amounting to Rs.0.20 Lakhs. During the year underreview unclaimed deposit of Rs.0.40 Lakhs was transferred to Investor Education andProtection Fund (IEPF).

W.e.f 1st July 2017 the Government of India has introduced the Goods andService Tax (GST). The Company smoothly transitioned itself into the new indirect taxregime. The Gross Sales till 30th June 2017 includes Central Excise Duty asapplicable and thereafter is net of GST in accordance with the provisions of Ind-AS.

For the Company Ind-AS is applicable from 1st April 2016 with a transitiondate of 1st April 2015. The financial statements of the Company(includingsubsidiaries) have been prepared in accordance with the recognition and measurementprinciples laid down under Ind-AS as presented under Section 133 of the Companies Act2013 read with the relevant rules issued thereunder and the other accounting principlesgenerally accepted in India as applicable.


The Company has in place adequate internal financial controls commensurate with thesize scale and complexity of its operations. The Company periodically discusses andreviews at its Audit Committee and with its auditors the effectiveness of the internalfinancial control measures implemented by the Company including with reference to theFinancial Statements of the Company.

The Company has a proper and adequate system of internal financial controls whichincludes the policies and procedures for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information.


The shares of the Company are listed on BSE Limited (BSE) and the National StockExchange of India Limited (NSE).The respective stock code no. and symbol of the Companyare 500201 and INDIAGLYCO. The annual listing fees for the year 2018-19 have been paid inadvance to the Stock Exchanges.


As on 31st March2017 the Company had Four (4) subsidiaries and One (1)Joint Venture Company. During the year under review there were no changes in subsidiaryand Joint Ventures of the Company. A brief of each of them is given below:

Shakumbari Sugar and Allied Industries Limited

The Company has a sugar manufacturing plant in the state of Uttar Pradesh through itssubsidiary Company Shakumbari Sugar and Allied Industries Ltd. (SSAIL) with a crushingcapacity of 5500 tons crushed per day (TCD) along with a modern distillery of 65 KL perday (KLPD) producing high quality rectified spirit and an internal bagasse firedco-generation plant of 11 MW catering to the captive power needs of the sugar anddistillery units.

With the abolition of BIFR SSAIL continues to evaluate and explore options inconsutation with expert(s) and stakeholders for restructuring/revival/disinvestment.

During the year under review the Central Bank of India (CBOI) has sanctioned One TimeSettlement (OTS) w.r.t. the credit facilities obtained by SSAIL from CBOI and SSAIL ispaying the installments as per OTS which will be completely paid off by August 2018while the term loans from Axis Bank Ltd. and IDBI bank Ltd. were fully re-paid during theyear under review. Further during the year no operations at the sugar manufacturingplant were carried out. During the year ended 31st March 2018 SSAIL hasearned a profit of Rs.46.06 Lakhs.

IGL Finance Limited

IGL Finance Ltd. (IGLFL) is a 100% subsidiary of the Company. IGLFL had invested fundsin short term commodity financing contracts of the National Spot Exchange Ltd. (NSEL).

NSEL has defaulted in settling the contracts on due dates for which IGLFL hasinitiated legal and other action. IGLFL is confident of recovery of its dues from NSELover a period of time in view of the measures which have so far been taken for and pendingbefore the Government and other agencies. During the year ended 31st March2018 IGLFL has registered a loss of Rs.0.24 Lakhs.

IGL Chem International Pte. Ltd.

IGL Chem International Pte. Ltd. is a 100% subsidiary of the Company in Singapore toaugment its activities in South Eastern region and help the marketing of products fromChemical Plant Natural Gums Plant and Supercritical Fluid Extraction facility to largebuyers in US Europe and South East Asia. During the year ended 31st March2018 IGL Chem International Pte. Ltd. suffered a loss of Rs.107.35 Lakhs.

IGL Chem International USA LLC

Your Company has also set up a 100% subsidiary Company in USA named as IGL ChemInternational USA LLC with the main objective of marketing of the Company's products andrelated activities in the American and Latin American regions. During the year ended 31stMarch 2018 IGL Chem International Pte. Ltd. has suffered a loss of Rs.71.15 Lakhs.

Kashipur Infrastructure and Freight Terminal Private Limited

Kashipur Infrastructure and Freight Terminal Pvt. Ltd. (KIFTPL) a joint venture ofyour Company and Apollo Logisolutions Limited ("ALS") engaged in the businessof providing railway based logistic services and other facilities through its PrivateFreight Terminal and Inland Container Depot at Bazpur Road Kashipur Uttarakhand has onreceipt of all approvals become fully operational during the year under review. Thefacility will serve as a multi-modal logistic facility for both EXIM and domestic cargohandling.

Your Company along with its affiliates hold 48.91% of the share Capital (44.99% by theCompany and 3.92% by the affiliates) of KIFTPL while 51% of the share capital is held byALS.

ALS is engaged in the business of providing complete and comprehensive servicesrelating to container freight station transportation of containers cargo handling andhas the requisite technical expertise to operate and manage inland container depot.

KIFTPL has marked its presence in the logistics segment by handling decent volumes ofboth inbound and outbound cargo during the year under review and is well poised for growthin the coming years.

During the year ended 31st March 2018 KIFTPL has suffered a loss ofRs.308.47 Lakhs.

The consolidated financial statements of the Company and its subsidiaries jointventure for the FY 2017-18 prepared in accordance with the applicable provisions of theAct and applicable accounting standards issued by the Institute of Chartered Accountantsof India (ICAI) forms part of this Annual Report. Pursuant to the provisions of Section136 of the Act financial statements of the subsidiary companies are not required to besent to the members of the Company. The Company will provide a copy of separate annualaccounts in respect of each of its subsidiary/associate to any member of the Company if sodesired and said annual accounts will also be kept open for inspection at the registeredoffice of the Company. Further the audited annual accounts of the subsidiary companiesare also available on the website of the Company viz. .

A separate statement containing salient features of the financial statements ofsubsidiaries and Joint venture under first proviso to sub-section (3) of section 129 inForm AOC-1 forms part of the financial statements.


During the year under review Shri Ashwini Kumar Sharma (DIN: 00157371) NomineeDirector of State Bank of India ("SBI") the lead Lender ceased to be theDirector of the Company w.e.f. 31st August 2017 (Close of business hours) uponcompletion of his term. However upon his re-nomination as a Nominee Director by SBI ShriSharma was again appointed as a nominee director of SBI w.e.f. 9th November2017 till 31st August 2019 .

Smt. Jayshree Bhartia (DIN: 00063018) Director of the Company is retiring by rotationat the ensuing Annual General Meeting (AGM) and being ligible offers herself forre-appointment. Your Directors recommend the re-appointment of Smt. Jayshree Bhartia theretiring Director for your approval.

On the recommendation of the Nomination and Remuneration Committee the Board ofDirectors at their meeting held on 13th February 2018 approved there-appointment of Shri M.K. Rao (DIN: 02168280) as Executive Director of the Company for afurther period of two (2) years w.e.f 1st April 2018 till 31stMarch 2020 subject to the approval of the Shareholders of the Company in ensuing AGM .

Further subsequent to the year ended 31st March 2018 Shri Sajeve Deora(DIN: 0003305) was appointed as Additional director in the category of IndependentDirector w.e.f 1st May 2018 for a period of 5 (five) years. The appointment ofShri Deora as independent director of the Company is also proposed in the forthcoming AGM.

Brief resume of the Director seeking appointment/re- appointment along with the otherdetails as stipulated under Regulation 26 and 36 of SEBI (Listing Obligations andDisclosure Requirements) Regulation 2015 [SEBI Listing Regulations] and SecretarialStandard on General Meetings (SS-2) are provided in the Notice for convening AnnualGeneral Meeting.

Except as mentioned above there is no change in the Key Managerial Personnel duringthe year under review.

All the Independent Directors have furnished declarations that they fulfill thecriteria of Independence as prescribed under Section 149(6) of the Act and SEBI ListingRegulations. During the Financial Year 2017-18 Five (5) Board Meetings were held. Thedetails of the Board meetings and the attendance of the Directors there at are provided inthe Corporate Governance Report and forms part of this Report.


Pursuant to the applicable provisions of the Companies Act 2013 and SeBi ListingRegulations the Board has carried out the annual performance evaluation of its ownperformance the Directors individually as well as the evaluation of Committees. Theevaluation was carried out based on parameters such as level of engagement andcontribution independence of judgement safeguarding the interest of the Company and allstakeholders etc.

The performance evaluation of the Independent Directors was done by the entire Boardexcluding the Directors being evaluated. The performance evaluation of the Chairman Boardas a whole and the Non-Independent Directors was carried out by the Independent Directors.The Board of Directors expressed their satisfaction with the evaluation process.


The Nomination and Remuneration Policy containing inter-alia guiding principles forpayment of remuneration to Directors Senior Management Key Managerial Personnel andother employees along with criteria for determining qualifications positive attributesindependence of Directors and Board evaluation are provided in the Corporate GovernanceReport and forms part of this Report.


In accordance with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 the Company has constituted an InternalComplaints Committee where any grievance of sexual harassment at workplace can bereported. No complaint pertaining to sexual harassment at workplace has been reported tothe Committee during the financial year ended 31st March 2018.

The Company has also adopted policy on prevention of Sexual Harassment at workplace.The objective of the policy is to provide its women employees a workplace free fromharassment/discrimination and that every employee is treated with dignity and respect. Thesaid policy is available on the website of the Company i.e. www.indiaglycols.comunderlink: women-at-workplace.pdf.


In terms of provisions of Section 177 of the Companies Act 2013 read with Rulesthereunder and SEBI Listing Regulations the Company has established a VigilMechanism/Whistle Blower Policy to deal with the instances of fraud and mismanagement.

The details of the Vigil Mechanism/ Whistle Blower Policy are provided in the CorporateGovernance Report and also hosted on the website of the Company (http://www policy.pdf).

As on 31st March 2018 the Audit Committee comprises three Non-ExecutiveIndependent Directors namely Shri Pradip Kumar Khaitan (Chairman) Shri RaviJhunjhunwala Shri Jagmohan N. Kejriwal and one Executive Director Shri M.K. Rao. Thedetails of the Audit Committee meetings and the attendance of the members thereat areprovided in the Corporate Governance Report and forms part of this Report. During theyear all the recommendations made by Audit Committee were accepted by the Board.


In terms of provisions of Section 134(5) of the Act to the best of their knowledge andability your Directors confirm that:

(a) in the preparation of the annual accounts for the year ended 31st March2018 the applicable accounting standards had been followed along with proper explanationrelating to material departures;

(b) they have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31st March 2018 and theprofit and loss of the Company for that period;

(c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d) they have prepared the annual accounts on a going concern basis;

(e) they have laid down the internal financial controls to be followed by the Companyand that such internal financial controls are adequate and were operating effectively; and

(f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.


The Management Discussion and Analysis Report as required under SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 forms part of this Report.


The Corporate Governance Report as stipulated under Schedule V(C) of SEBI ListingRegulations forms part of this Report.

The requisite certificate from the Statutory Auditors of the Company M/s K. N.Gutgutia & Co. Chartered Accountants confirming compliance with the conditions ofcorporate governance as stipulated under the aforesaid clause is attached to CorporateGovernance Report.


Statutory Auditors

As per Section 139 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 M/s K.N. Gutgutia & Co. Chartered Accountants (RegistrationNo. 304153E)[KNG] were appointed as the Statutory Auditors of the Company with theapproval of members at the 33rd Annual General Meeting (AgM) to hold officetill the conclusion of 38th AGM subject to ratification of the appointment atevery AGM if required. The first year of Audit was for FY 2017-18.

The Board of Directors of the Company at their meeting held on 1st May 2018on the recommendation of the Audit Committee have recommended the appointment of KNG asthe Statutory Auditors of the Company to hold the office from the conclusion of 34thAGM till the conclusion of the 35th AGM for ratification by the Members.Appropriate resolution for the purpose is appearing in the Notice convening the 34thAGM of the Company.

The Company has received the consent letter and a certificate u/s 139 of the CompaniesAct 2013 from KNG to the effect that their ratification of appointment if made shall bein accordance with the applicable provisions of the Act and the Rules made thereunder.

Audit Report

The Report given by M/s K.N. Gutgutia & Co. Chartered Accountants (RegistrationNo. 304153E) Statutory Auditors on the financial statements of the Company for theFinancial year 2017-18 is part of the Annual Report. The notes on financial statementsreferred to in the Auditor's Report are self-explanatory and do not call for any furthercomments. There has been no qualification reservation or adverse remark or disclaimer intheir Report on standalone and consolidated financial statements for FY 2017-18.

During the year under review the Auditors had not reported any matter under Section143 (12) of the Act.


The Board appointed M/s Mukesh Agarwal & Co. Company Secretaries (CP No.- 3851) asSecretarial Auditor for the Financial Year 2017-18 in terms of provisions of Section 204of the Companies Act 2013. The Secretarial Audit Report for the financial year ended 31stMarch 2018 was considered by the Board in its meeting held on 1st May 2018and is enclosed as "Annexure A" to this report. The Secretarial AuditReport does not contain any qualification reservation or adverse remark which needs anyexplanation or comment of the Board.

During the year under review the Company has complied with all the applicableSecretarial Standards as issued by the Institute of Company Secretaries of India.


The Company has appointed M/s R.J. Goel & Co. Cost Accountants (FRN 000026) asCost Auditors of the Company for the financial year 2018-19 under section 148 of theCompanies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014 includingamendments if any. Cost Auditors have confirmed that they are eligible under Section 141(3) of the Companies Act 2013 for reappointment.

The Cost Auditors' Report for the year 2016-17 was filed with Central Government withinthe prescribed time.


During the FY 2017-18 Related Party transactions(RPTs) as defined under Section 188 ofthe Act read with rules made thereunder and the SEBI listing Regulations were at arm'slength and in ordinary course of business. Pursuant to the provisions of Section 177 ofthe Act read with Regulation 23 of SEBI listing Regulations all transaction with relatedparties were reviewed and approved by the Audit Committee and were in accordance with thepolicy on RPTs as formulated by the Company.

During the year under review your Company did not enter into any RPT which may beconsidered material in terms of Section 188 of the Act read with rules made thereunder andthus disclosure in Form AOC-2 is not required to be made by the Company. The disclosurespertaining to RPTs in compliance with the applicable Accounting Standards have been givenin Note no. 55 of the Standalone financial statements forming part of the Annual Report.


Your Company is working actively on various projects efficiently approaching andtargeting towards Clean Development Mechanism (CDM) and reduction in Green House Gases(GHG) emissions.

The Company has installed unique technology for converting distillery spent wash intofuel at both the plants viz. Kashipur and Gorakhpur. Through this technology the spentwash is concentrated through five effect evaporator. The concentrate is utilized as fuelto substitute coal in a specifically designed boiler.

The high pressure steam so generated is passed through the turbine for power generationand low pressure steam after turbine is utilized in the plant for operation. Due to thisyour Company is saving fossil fuel in terms of coal and substituting the essential powergeneration through DG sets.

The Biomass based Cogeneration Project activity taken up by the Company at itsGorakhpur U.P. plant is successfully registered under Clean Development Mechanism (CDM)project by United Nations Framework Convention on Climate Change (UNFCCC) for ten yearfixed crediting period 16th December 2010 to 15th December 2020.Under the Clean Development Mechanism emission reduction (or emission removal) projectsin developing countries can earn certified emission reduction credits. Your Company hasreceived certification of Energy Management System (ISO 50001:2011) under integratedmanagement system.

The information in accordance with the provisions of Section 134(3)(m) of the CompaniesAct 2013 read with the Rule 8 of the Companies (Accounts) Rules 2014 is given at "AnnexureB" to this report.


Corporate Social Responsibility (CSR) is a way of conducting business by whichcorporate entities visibly contribute to the social good. The essence of CSR is tointegrate economic environmental and social objectives with the Company's operations andgrowth. CSR is the process by which an organization thinks about and evolves itsrelationships with society for the common good and demonstrates its commitment by givingback to the society for the resources it used to flourish by adoption of appropriatebusiness processes and strategies.

As the Company had incurred losses in terms of section 198 of the act during the last 3financial years accordingly as per Section 135 of the Act the Company was not requiredto spend any amount towards CSR activities during the financial year 2017-18. Howeverkeeping in view its social responsibility commitments the Company has voluntarilycontributed to the CSR activities during the financial year ended 31st March2018 amounting to Rs.24.21 Lakhs.

In accordance with the provisions of Section 135 of the Act read with the Companies(Corporate Social Responsibility Policy) Rules 2014 the annual report on CSR activitiesis given at "Annexure C" to this Report.

The CSR Committee comprises two Executive Directors namely Shri U.S. Bhartia (Chairman)and Shri M. K. Rao and one Non Executive Independent Director namely Shri Pradip KumarKhaitan. The details of the CSR Committee meetings and the attendance of the membersthereat are provided in the Corporate Governance Report and forms part of this Report.


The Company has constituted a Risk Management Committee to monitor the Risk ManagementPlan and to mitigate the risks attached to the business of the Company. The RiskManagement Committee consists of Directors and the senior management personnel of theCompany details whereof are provided in the Corporate Governance Report and forms part ofthis Report.

Your Company's objective of risk management is to have a meaningful identificationmeasurement prioritization of risks or exposures to potential losses on a continual basisthrough active participation of all members of the Company and accordingly establishcontrols and procedures to build a visible & structured enterprise-wide riskmanagement framework; reduce the risk levels and mitigate their effects in the likelihoodof a risk event with an aim to protect the Company from harm; and have a contingency planto manage risks having high probability and high impact.

Risk management framework is created to ensure that risk management principles areimplemented and integrated all over the organization and that information retrieved fromthe risk management process are correctly reported.

This framework provides a stable foundation for the risk management work orient theorganizational arrangements properly in order to have a clear risk strategy across theorganization & share information experiences amongst different sites of the Company.

Considering the importance of keeping the risk management process dynamic a periodicalreview of the risks is carried out across sites and departments for necessary key risksand risk management strategies are communicated to the Board of Directors for theirassessment for minimization of effects of risk. The details of the Risk Management meetingare provided in the Corporate Governance Report.


The extract of the Annual Return in form MGT-9 is enclosed at "Annexure D"to this Report.


During the year under review there were no significant material orders passed by theregulators or courts or tribunals impacting the going concern status of the Company andits future operations.


The required information as per Section 197 of the Companies Act 2013 read with Rule 5of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isgiven at "Annexure E" to this Report.


Your Directors wish to express the grateful appreciation for the continued assistanceco-operation and encouragement received from Central Government the State Governments ofUttarakhand and Uttar Pradesh other governmental authorities Banks vendors members andother business associates during the year under review.

Your Director also extends their appreciation to the employees for their committedservices and unstinting efforts at all levels. The Company look forward for theircontinued support in the future.

For and on behalf of the Board
Place : Noida U.S. Bhartia
Dated : 1st May 2018 Chairman and Managing Director
DIN: 00063091