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Andrew Yule & Company Ltd Directors Report

31.35
(-1.57%)
Oct 25, 2023|03:54:43 PM

Andrew Yule & Company Ltd Share Price directors Report

Dear Shareholders,

Your Directors take pleasure in presenting the 75th Annual Report on the operations of the Company together with the Auditors Report and Audited Financial Statements for the year ended 31st March, 2023:

1. FINANCIAL HIGHLIGHTS:

Key highlights of standalone and consolidated financial performance of the Company for the financial year ended 31st March, 2023 are summarized as under:

(Rs. in lakh)
Particulars Standalone Consolidated
2022-23 2021-22 2022-23 2021-22
Revenue from Operations and Other Operational Income 37403.60 41439.28 37403.60 41439.28
Other Income 3175.27 5658.86 3175.27 5658.94
Total Revenue 40578.87 47098.14 40578.87 47098.22
Total Expenses 39680.64 43719.04 39681.64 43724.86
Profit/(Loss) before Exceptional/Extraordinary Item and Tax 898.23 3379.10 897.23 3373.36
Exceptional/Extraordinary Items - 2265.94 - 2265.94
Profit/(Loss) after Exceptional/Extraordinary items and before Tax 898.23 1113.16 897.23 1107.42
Less: Tax Expenses 780.76 1208.06 780.76 1208.06
Profit/(Loss) after Exceptional/Extraordinary items and after Tax 117.47 (94.90) 116.47 (100.64)
Profit/(Loss) from discontinued operations after Tax - 5.19 - 5.19
Share of Profit/(Loss) from Group Companies - - 1148.00 (438.84)
Profit/(Loss) for the period 117.47 (89.71) 1264.47 (534.29)
Other Comprehensive Income (after Tax) (184.56) 73.30 (184.56) 73.30
Total Comprehensive Income for the period (67.09) (16.41) 1079.90 (460.99)
Profit & Loss: Balance brought forward from the previous year 5793.40 6493.42 24479.84 24939.26
Add: Profit for the period 117.47 (89.71) 1264.47 (534.29)
Add: Other Comprehensive Income (net of Tax) (184.56) 73.30 (184.56) 73.30
Profit available for Appropriation 5726.31 6477.01 25559.75 24478.27
Less: Dividend and Dividend Tax & other adjustments (6.70) 683.61 (6.70) (1.57)
Profit & Loss: Balance to be carried forward 5733.01 5793.40 25566.45 24479.84

The financial statements of the Company for the financial year ended 31st March, 2023 have been prepared in accordance with the Indian Accounting Standards (IND-AS) notified under Section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014.

2. FINANCIAL PERFORMANCE OF THE COMPANY:

Standalone Financial Results:

During the financial year 2022-23, your Company earned total revenue of Rs. 405.79 crore as against Rs. 470.98 crore in 2021-22 i.e. a decrease of 16.06% from the previous year mainly due to the following reasons -

i) Heavy rainfall and the subsequent floods in Assam and West Bengal have affected immensely in the tea production of the region. Consequent depletion in soil health and imbalance in the soil pH led to poor bush health due to limited uptake of nutrients, thus finally resulting in low production of tea by 4.48 lac kg compared to last financial year. The infestation of fungal and other secondary diseases like fusarium, Red Rust, Black rot etc has also increased over the last few years. Further substantial increase in cost of all the major inputs i.e fertilizers, pesticide, gas, coal etc along with the escalation in basic wages by more than 69% over last 5 (five) years has been increasing manifold the cost of production of tea per kg. However, the price realization is not keeping in pace with the cost increase, thereby largely affecting the profitability of the tea division of the Company.

ii) As a result, income from operations of Tea Division has decreased to Rs.213.64 crore during the financial year 202223 from Rs.229.23 crore during the previous financial year thereby decreased by Rs.15.59 crore due to decrease in sales quantity by Rs.17.98 crore. Other operating income of tea division has decreased to Rs. 0.07 crore during the current financial year from Rs.2.02 crore from the previous FY ended 31.03.2022 thereby decreased by Rs.1.95 crore due to decrease in recovery of price in sale of tea waste than last year. As a consequence, profit before tax of tea division drops to Rs.(-)10.82 crore for the year ended 31.03.2023 from Rs.18.72 crore from the previous financial year ending on 31.03.2022.

iii) Net sales of Engineering Division were increased from Rs.46.44 crore to Rs. 55.18 crore thereby increased by Rs. 8.74 crore i.e 18.82% increase in sales in comparison to the last financial year due to better execution of jobs resulting in higher order booking as well as fast lifting by customers in comparison to last financial year ending on 31.03.2022. Profit before tax of this division is Rs. 8.63 crore during the current FY ending on 31.03.2023 from Rs.1.96 crore from the previous FY ended on 31.03.2022.

iv) Net sales of Electrical- Chennai Operations increased to Rs.102.56 crore during the current financial year in comparison to Rs. 57.97 crore during the corresponding periods in the previous financial year ending on 31.03.22 and thereby increased by Rs. 44.59 crore due to increase in in-house production as well as through outsourcing contracts. Other operating income increased to Rs. 0.86 crore during the current FY ended on 31.03.2023 from Rs. 0.65 crore during the previous FY ended on 31.03.2022 due to increase in sale of scrap. Profit before tax of this division is Rs.3.09 crore during the current FY ending on 31.03.2023 from Rs.1.03 crore from the previous FY ended on 31.03.2022.

Resulting to all above, Profit before Tax (PBT) during the financial year 2022-23 stood at Rs.8.98 crore [Rs11.13 crore in 2021-22] and Total Comprehensive Income (TCI) stood at Rs. (0.67) crore [Rs.(0.16) crore in 2021-22] after making necessary income tax provisions and other adjustment.

The overall financial performance of the Engineering division and Electrical- Chennai operation of the Company has shown significant improvement in comparison to the last financial year. Tea division is also on the growing path.

Consolidated Financial Results:

Your Company has recorded Revenue from Operations and other Operational Income of Rs. 374.04 crore during the financial year 2022-23 (Rs. 414.39 crore in 2021-22).

During the financial year 2022-23, Profit before Tax (PBT) stood at Rs. 8.97 crore (Rs.11.07 crore in 2021-22) and Total Comprehensive Income (TCI) stood at Rs.10.80 crore [Rs.(4.61) crore in FY2021-22].

3. BRIEF DESCRIPTION OF THE COMPANY?S WORKING DURING THE YEAR AND STATE OF THE COMPANY?S AFFAIRS:

Operating highlights 3.1. TeaDivision:

AYCL is the only Central Public Sector Enterprises (CPSEs) having Tea Gardens and manufacturing activities in Tea. Turnover of Tea Division of the Company was Rs. 210.89 crore during the FY 2022-23 compared to Rs. 228.38 crore during the previous financial year 2021-22. Tea exports during the year was 7.22 lakh Kgs. with FOB Rs.27.16 crore (catering to markets in UK, Poland and UAE) compared to 1.79 lakh Kgs with FOB Rs.5.39 crore during the previous financial year with a year-on -year increase of 431%. Own crop decreased from 98.83 lakh Kgs to 94.35 lakh Kgs. As such, annual yield/hectare (Made Tea/Hectare) decreased from 1629.69 Kgs to 1509.29 kgs.

Physical performance:

Product Achievement (Own and bought leaf) crop % of Change
2021-2022 2022-2023
(Lakh Kgs) (Lakh Kgs)
Drier Mouth Tea 98.83 94.35 (-) 4.53

Sales:

Physical > in quantum) achievement Value achievement
2021-22 (Lakh Kgs) 2022-23 (Lakh Kgs) % of Change 2021-22 (Rs. in lakh) 2022-23 (Rs. in lakh) % of Change
94.95 86.51 (-) 8.89% 22838.78 21089.79 (-) 7.65

During the FY 2022-23, Tea division has made loss but expected to do well in the coming years considering measures being taken for improvement in quality of tea, improved brand image, cost control in spite of bearish tea prices in the Indian market. However, despite several hurdles, your Company achieved a growth of 431% in export value of Tea from Rs. 5.11 crore in FY 22 to Rs. 27.16 crore in FY 23. This has earned accolades for the division both from the esteemed offices of the Honble Prime Minister and Honble Minister of Heavy Industries. Retail presence to be increased gradually across India. With various certification, market penetration with AYCL teas (both domestic and international) and e-commerce outlets, the division consistently endeavor to enhance its brand equity as well as value addition.

3.2 Electrical - Chennai Operations (E-CO):

Electrical Chennai Unit has make a history becoming the first (+) INR 100 crore turnover unit of AYCL. A successful outsourcing model is key to this.

This unit has planned to expand the present manufacturing capacity by extending one of the bay and with that revenue can be increased by another Rs. 40 crore annually. In- house manufacturing capacity is currently valued at Rs. 80 crore. This can be increased by another Rs.40 crore by extending the bay. Annually Rs. 40 crore increase in sales to be planned through internal resources and balance shall be executed in "outsourced mode".

Physical performance:

Product Achievement % of Change
2021-22 2022-23
Power Transformer (MVA) 616.00 812.00 31.82

Sales:

Product Physical (in numbers) Value % of Change
2021-22 2022-23 % of Change 2021-22 (Rs. In crores) 2022-23 (Rs. In crores)
Power Transformer 31 nos. 38 nos. 22.58 57.97 102.57 76.94

At present E-CO has made profit in FY23 and expected to do well in the coming years considering improvement in inhouse higher production, cost control etc. Unit has stepped up marketing effort to increase customer base across several states and participated in various tenders for getting more job orders.

Current order in hand is Rs.74.65 crore (as on 1st June 2023) including the recently bagged Rs.28.11 crore worth of order.

Details of completed projects as well as ongoing projects are as follows:

Completed Projects FY 2022-23
SI. No. Client Account Qty Description
1 KPTCL KPTCL 18 20 MVA 110/33-11 kV
2 SPR Construction SPR Construction 3 8 MVA 66/11 kV
3 Sadguru Construction Sadguru Construction 1 10 MVA 110/11 kV
4 SM Engg SM Engg 3 31.5 MVA 66/11 kV
5 OM Associates OM Associates 4 10 MVA 110/11 kV
6 Nandini Electricals Nandini Electricals 2 31.5 MVA 66/11 kV
7 KPTCL KPTCL 7 31.5 MVA 66/11 kV
Ongoing Projects
S.No Client Account Qty Description
1 KPTCL KPTCL 2 20 MVA 110/33-11kV
2 KPTCL KPTCL 2 31.5 MVA 66/11 kV
3 KPTCL KPTCL 4 10 MVA 110/33-11kV
4 1 Scientific KPTCL 9 10 MVA 110/11 kV
5 Bagmane Developers Pvt. Ltd. KPTCL 4 31.5MVA, 66/11kV
6 Hitech Electricals KPTCL 2 10 MVA 110/11 kV
7 SMS Constructions KPTCL 1 10 MVA 110/11 kV
8 V R Patil KPTCL 2 31.5 MVA 66/11 kV

In the current year, further orders will be taken depending on execution status of orders in hand. Products of E-CO are known for better quality compared to peers.

3.3 Engineering Division:

The Division has a full product range in its line of operation i.e. Industrial Fans - both in axial and centrifugal type. Capacity of these products in terms of air/gas volume flow rate, pressure rise, operating temperature, etc. along with high energy efficiency features compete well with three to four major international competitors having outfits in India. As such the product range of Engineering Division remains viable.

The factory has good infrastructure facilities at par with the best in the country with spacious and high shades with adequate material handling facility up to 45 MT and with several automatic and semi-automatic production equipment?s. Its industrial fans have a good brand image in terms of good performance and reliability. Products of Engineering Division are known for better quality compared to peers.

Physical performance:

Product Achievement % of Change
2021-22 2022-23
Industrial Fan (Nos.) 289 288 (-) 0.35

Sales:

Value % of Change
2021-22 (Rs. in crore) 2022-23 (Rs. in crore)
46.44 55.18 18.82%

Engineering Division has scope for capacity enhancement from 300 nos to 360 nos impellers per annum with a CAPEX outlay of INR 2(two) crore in next two years. In- house manufacturing capacity is currently valued at INR 70 crore working in single shift for fan and fan spares. This can be increased by another INR 70 crore by extending operating with 2 (two) production shift with additional manpower, sub-contracting and outsourcing for fan and fan spares with inclusion of modern machineries, high-capacity testing beds. By doing, this unit can achieve two-fold growth in fans and fan spares revenue by 2027-28 i.e Rs.180 crore.

At present Engineering division has made profit in FY23 and expected to do well in the coming years considering improvement in in- house higher production, through increased marketing effort, product improvement, cost control. Current order in hand is Rs. 47.70 crore (as on 1st June 2023) including the recently bagged order book value more than rupees one crore are as follows:

W/O NO CLIENT QTY DESCRIPTION VALUE (crore) PO DATE
23007C JINDAL STEEL ODI- SHA LIMITED 1NO 2040 MM DIA COMBUSTION AIR FAN 1.05 22-Apr-23
23027C JINDAL STEEL ODI- SHA LIMITED 4NOS 2150 MM DIA PCI FAN AND 1870 MM DIA HSG FAN WITH SPARES 1.285 18-May-23

In the current year, further orders will be taken depending on execution status of orders in hand. Its industrial fans have a good brand image in terms of good performance and reliability. Products of Engineering division are known for better quality compared to peers.

4. RETURN OF SURPLUS FUNDS TO SHAREHOLDERS (DIVIDEND)

The Directors have recommended a final dividend of 0.35% (Rs.0.007 per ordinary share) on the ordinary shares of Rs.2/- each for the financial year 2022-23. The final dividend for 2022-23, if approved, will be distributed to the eligible shareholders within 30 (thirty) days from the date of the 75th Annual General Meeting.

5. DIVIDEND DISTRIBUTION POLICY:

The Company has a dividend distribution policy in place in pursuance to the requirements of regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations").

The policy is available on the Companys website at: http://www.andrewyule.com/pdf/policies/Dividend_Distribution_ Policy.pdf.

6. TRANSFER TO RESERVE:

During the year under review, the Company has transferred Rs.1.17 crore to the General Reserves. As on 31st March, 2023, Reserves and Surplus of the Company were at Rs. 57.33 crore.

7. UNCLAIMED DIVIDENDS:

The Company has uploaded the details of unclaimed and unpaid amounts lying with the Company as on 31st March, 2022 on the Company?s website (www.andrewyule.com) and also on the Ministry of Corporate Affairs? website.

The details of unclaimed and unpaid dividends previously declared and paid by the Company are also given under the corporate governance report.

8. CAPITAL EXPENDITURE:

During the financial year 2022-23, your Company incurred Rs.42.69 crore towards capital expenditure, a majority of which was towards new cultivation expenses at Tea gardens as per IND AS norms.

9. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

As stipulated under Regulation 34(2)(f) of the SEBI Listing Regulations, as amended, the Business Responsibility and Sustainability Report describing the initiatives taken by the Company from environmental, social and governance perspective forms a part of the Annual Report.

10. COMPLIANCE UNDER SECRETARIAL STANDARDS

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government under section 118(10) of the Companies Act, 2013. Such systems are adequate and operating effectively in the Company during the year under review.

11. CREDITRATING:

CRISIL Ratings Ltd., a full-service Credit Rating Agency registered with the Securities and Exchange Board of India (SEBI) has assigned the long-term rating as ‘CRISIL BBB-/Negative and the short-term rating as ‘CRISIL A3 to the bank loan facilities of Rs.155.00 crore (enhanced from Rs.125.00 crore).

12. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report for the year under review, as stipulated under the SEBI Listing Regulations, is presented in a separate section forming part of the Boards Report as Annexure-I.

13. CORPORATEGOVERNANCE:

The report on Corporate Governance as stipulated under the SEBI Listing Regulations, together with a certificate from a Practicing Company Secretary confirming compliance, is annexed and forms part of the Annual Report.

14. PERFORMANCE OF SUBSIDIARIES AND ASSOCIATE COMPANY AS REQUIRED UNDER RULE 8(1) OF THE COMPANIES (ACCOUNTS) RULES, 2014:

The Company has 2 (two) Wholly-owned Subsidiaries viz. Yule Engineering Ltd. and Yule Electrical Ltd. and one Associate Company viz. Tide Water Oil Co. (I) Ltd. as on 31st March, 2023.

Pursuant to provisions of section 129(3) of the Companies Act, a statement containing salient features of the financial statements of the subsidiary(ies) and associate company as on 31st March, 2023 in Form AOC-1 is attached to the financial statements of the Company. The Company has no joint venture.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries, are available on the Companys website www.andrewyule.com

15. CONSOLIDATED FINANCIAL STATEMENTS:

As required under SEBI Listing Regulations, consolidated financial statements of the Company prepared as on 31st March, 2023 in accordance with the Indian Accounting Standards (IND AS), duly audited by the statutory auditors, form a part of the annual report and are reflected in the consolidated financial statements of the Company.

16. CHANGESINSHARECAPITAL:

The paid-up equity share capital as on 31st March, 2023 was Rs.97,79,01,956/- divided into 48,89,50,978 ordinary shares of Rs.2/- each, fully paid-up. During the year under review, the Company has not issued any ordinary shares or shares with differential voting rights neither granted stock options nor sweat equity.

17. TRANSFER OF AMOUNTS AND SHARES TO INVESTOR EDUCATION AND PROTECTION FUND:

Pursuant to the provisions of section 124 of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2019, read with all relevant notifications as issued by the Ministry of Corporate Affairs, from time to time, all shares in respect of which dividend has remained unpaid or unclaimed for a period of seven consecutive years have been transferred by the Company, within the stipulated due date, to the Investor Education and Protection Fund (IEPF) established by the Central Government.

Members / claimants whose shares or unclaimed dividend, have been transferred to the IEPF Demat Account or the Fund, as the case may be, may claim the shares or apply for a refund by approaching the Company for issue of Entitlement Letter along with all the required documents before making an application to the IEPF Authority in Form IEPF - 5 (available on http://www.iepf.gov.in) along with requisite fee as decided by the IEPF Authority from time to time.

A list of shareholders along with their folio number or DP ID and Client ID, who have not claimed their dividends for the last seven consecutive years i.e. 2016-17 onwards and whose shares are therefore liable for transfer to the IEPF, has been displayed on the website of the Company besides sending individual communication to the concerned shareholders and issuance of public notice in the newspapers. Details of such unclaimed dividend and shares, communication sent to the shareholders and copies of the newspaper publications are available on the Companys website at http://www.andrewyule. com/unpaid_dividend.php.

Members are requested to ensure that they claim the dividends and shares, before they are transferred to the said fund.

18. ANNUAL RETURN:

Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, copy of the Annual Return for the financial year 2022-23 is placed on the website of the Company at http:// www.andrewyule.com/annual_return.php.

19. NUMBER OF MEETINGS OF BOARD OF DIRECTORS:

The Board of Directors of the Company met 4 (four) times in the financial year 2022-23. The details pertaining to the Board meetings and attendance are provided in the Corporate Governance Report. The intervening gap between two Board meetings was within the period prescribed under Companies Act, 2013 and SEBI Listing Regulations, as amended.

20. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

Pursuant to section 186 of the Companies Act, 2013, the details of the loans given, guarantees or securities provided and investments made by the Company during the year under review, have been disclosed in the financial statements.

21. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT AND CHANGE IN NATURE OF BUSINESS, IF ANY:

There have been no material changes and commitments affecting the financial position of the Company subsequent to the close of the financial year to which financial statements relate and the date of the Report.

22. VIGIL MECHANISM WHISTLE BLOWER POLICY:

In view of the requirement as stipulated by Section 177 of the Companies Act, 2013 read with Rule 7 of the Companies (Meeting of Board and its power) Rules, 2014 and Corporate Governance under SEBI Listing Obligations and Disclosure Regulations, 2015 as amended, the Company has complied with all the applicable provisions and has adopted a Whistle Blower Policy duly approved by the Audit Committee to report concerns about unethical behavior, actual and suspected frauds, or violation of Companys Code of Conduct and Ethics. The policy is hosted on the website of the Company.

The same provides for adequate safeguards against victimization of director(s)/employee(s) who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases. It is affirmed that no person has been denied access to the Audit Committee.

23. DIRECTORS:

The Ministry of Heavy Industries (MHI), Govt. of India vide their order dated 16th August, 2022 had appointed Shri Rajinder Singh Manku as Director (Planning) of the Company with effect from the date of his assumption of charge of the post till the date of his superannuation i.e. 30.06.2025, or until further orders, whichever is earlier. Shri Manku had assumed the charge of the post of Director (Planning) of the Company with effect from 18th August, 2022.

Shri Viswanath Giriraj, Shri Anil Kumar Goyal and Rear Admiral Anil Kumar Verma ceased to be Directors of the Company with effect from the close of business on 27th January, 2023 as per MHI order dated 28th January, 2020.

The Board places on record its deep appreciation of the valuable services and guidance rendered by Shri Viswanath Giriraj, Shri Anil Kumar Goyal and Rear Admiral Anil Kumar Verma during their association with the Company.

In accordance with the provisions of section 152(6)(c) of the Companies Act, 2013 and your Companys Articles of Association, Shri Vijay Mittal, Director of the Company, retires by rotation at the ensuing Annual General Meeting and is eligible for re-appointment.

Appropriate resolution seeking re-appointment of Shri Vijay Mittal, as Director is appearing in the Notice convening the 75th Annual General Meeting of the Company.

The brief resume/details relating to Shri Vijay Mittal is furnished in the notes annexed to the Notice of the ensuing Annual General Meeting of the Company.

Pursuant to the provisions of the SEBI Listing Regulations, it is disclosed that no Director shares any relationship inter se.

24. KEY MANAGERIAL PERSONNEL:

Pursuant to the provisions of section 203 of the Companies Act, 2013, Shri Sanjoy Bhattacharya, Chairman & Managing Director, Shri K. Mohan, Director (Personnel) being Whole-time Director, Shri Rajinder Singh Manku, Director (Planning) holding additional charge of Director (Finance) being Chief Financial Officer and Smt. Sucharita Das, Company Secretary are the Key Managerial Personnel of the Company.

25. DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received the necessary declarations from all the Independent Directors of the Company in accordance with section 149(7) of the Companies Act, 2013 read with regulation 25(8) of SEBI Listing Regulations, as amended, that they meet the criteria of independence and that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective of independent judgement and without any external influence as prescribed under section 149(6) of the Companies Act, 2013 and regulation 16(1)(b) of SEBI Listing Regulations and the same have been noted by the Board. The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, domain knowledge, experience and expertise in the fields of finance, administration, management, etc. and that they hold highest standards of integrity.

All the Independent Directors of the Company have registered themselves with the Indian Institute of Corporate Affairs, Manesar (‘IICA?) as required under Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and thereby have complied with the provisions of sub-rule (1) and subrule (2) of Rule 6 of the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019 to the extent applicable. All the Independent Directors have also complied with the provisions of sub-rule (4) of Rule 6 of the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019. This may be deemed to be a disclosure as required under Rule 8(5)(iiia) of the Companies (Accounts) Rules, 2014, as amended.

During the year, Independent Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company. Details of the Familiarization program for Independent Directors of the Company are available on the website of the Company.

26. APPOINTMENT, PERFORMANCE EVALUATION AND REMUNERATION POLICY:

Being a Central Public Sector Enterprise (CPSE), the appointment, tenure, performance evaluation, remuneration, etc., of Directors are made/fixed by the Government of India.

Ministry of Corporate Affairs has exempted Government Companies from applicability of some of the provisions/sections of the Companies Act, 2013 vide notification dated 5th June, 2015. As per the notification, the Nomination and Remuneration Committee is not required to formulate the criteria for appointment of Directors, their remuneration policy and carrying out their performance evaluation. In AYCL, being a CPSE, the appointment of Directors and their performance evaluation are undertaken by administrative ministry i.e., Ministry of Heavy Industries, Government of India and as such, performance evaluation by the Board of its own performance, that of its Committees and individual Directors, are not applicable/ required.

The remuneration of officers (executives) is decided as per Government guidelines and remunerations of the nonexecutives are decided as per Wage Settlement Agreement entered into periodically with their Union. Appointments, promotions, etc. of the employees are made as per Recruitment & Promotion Policy approved by the Board.

27. EMPLOYEE STOCK OPTION SCHEME:

Your Company has not provided any Employee Stock Option, therefore disclosure requirement in relation to ESOP under Rule 12(9) and Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014 is not applicable.

28. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Board of Directors of the Company laid down the CSR and Sustainability Policy covering the objectives, focus areas, governance structure and monitoring and reporting framework among others.

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

The CSR budget allocation of the Company for the financial year 2022-23 was "nil" as per calculations made pursuant to the provisions of the Companies Act, 2013 read with the rules made thereunder.

29. RISK MANAGEMENT:

The Company has developed and implemented a risk management framework for identification of elements of risk, which in the opinion of the Board need close scrutiny.

The Risk Management Committee of the Company periodically reviews the risk management framework, identifies risks with criticality and ensured that appropriate methodology, processes and systems are in place to monitor, evaluate and mitigate the risks associated with the business of the Company, which in the opinion of the Board may threaten the existence of the Company. The risk management policy is also uploaded in the Companys website www.andrewyule.com.

30. AUDIT COMMITTEE:

The Company has in place a Board level Audit Committee in terms of the requirements of the Companies Act, 2013 read with rules made thereunder and regulation 18 of SEBI Listing Regulations, the details in respect of which are given in the corporate governance report. All the issues are fairly and transparently deliberated in the Audit Committee meetings which are held at regular intervals. The views and suggestions of the Audit Committee members are positively taken into account and imbibed into the Companys processes. Further, there has been no instance where the Board of Directors have not accepted the recommendations of the Audit Committee.

31. OTHER COMMITTEES OF BOARD:

Details of various other committees constituted by the Board of Directors as per the provisions of the Companies Act, 2013 and SEBI Listing Regulations are given in the corporate governance report and forms part of this report.

32. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The Company does not have a material unlisted subsidiary as defined under regulation 16(1)(c) of SEBI Listing Regulations. During the year under review, your Company did not have any related party transactions which required prior approval of the shareholders.

There have been no material significant related party transactions during the year under review, having potential conflict with the interest of the Company. Necessary disclosures required under the Accounting Standard (AS-18) have been made in the notes to financial statements. Hence, no disclosure is made in form AOC-2 as required under section 134(3) (h) of the Companies Act, 2013 read with rule 8 of the Companies (Accounts) Rules, 2014.

In line with the requirements of the Act and the SEBI Listing Regulations, the Company has also formulated a policy on related party transactions for determining materiality of related party transaction and also on dealing with related parties which has been amended to incorporate the regulatory amendments in the SEBI Listing Regulations. The updated policy can be accessed on the Companys website at the link - http://www.andrewyule.com/ pdf/policies/Materiality_Related_ Party_Transactions.pdf.

33. 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 were appointed/resigned/retired during the year:

a. Director(s) appointed : Shri Rajinder Singh Manku

b. Director(s) resigned : --

c. Cessation of Directorship : Shri Viswanath Giriraj

Shri Anil Kumar Goyal

Rear Admiral Anil Kumar Verma

d. KMP(s) appointed : Shri Rajinder Singh Manku as Whole-time Director and CFO

e. KMP(s) resigned : --

KMP(s) retired : -

iv. Name of Companies which have become or ceased to be Subsidiaries, Joint Venture Companies or Associate

Companies during the year: During the financial year 2022-23, none of the Companies have become or ceased to be Subsidiaries or Associate Company.

v. Details relating to deposits: There were no fixed deposits of the Company from the public, outstanding at the end of the financial year. No fixed deposit has been accepted during the year and as such, there is no default in repayment of the said deposits.

vi. There has not been any deposit, which is not in compliance with the requirements of Chapter V of the Companies Act, 2013.

vii. No significant and material orders have been passed by any Regulator(s) or Court(s) or Tribunal(s) impacting the going concern status and Companys operations in future.

viii. The Company is required to maintain the cost records as specified by the Central Government under section 148(1) of the Companies Act, 2013 and accordingly such accounts and records are maintained and audited by M/s DGM & Associates, cost auditors of the Company for the financial year 2022-23.

ix. There has been no instance of any one-time settlement with any Bank or Financial Institution during the year and as such the requirement of disclosure in connection with difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions, does not arise.

34. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of frauds, error reporting mechanisms, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures.

The Company has independent external internal audit firms for the purpose of internal audit of all its divisions/units. The statutory auditors have also examined and issued a report on internal financial control of the Company, which forms a part of this annual report. The Audit Committee also deliberates with the members of the management, considers the systems as laid down and meets the statutory auditors to ascertain their views on the internal financial control systems. The observations and comments of the Audit Committee are placed before the Board of Directors for reference. Refer to "Internal Control Systems" in Managements discussion and analysis in this Annual Report.

35. REPORTABLE FRAUD:

No fraud has been reported by the auditors under section 143(12) of the Companies Act, 2013 during the year under review.

36. DISCLOSURE AS PER RULE 5(1) OF COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) AMENDMENT RULES, 2016:

The Company, being a Central Public Sector Enterprise, is exempted to make disclosure pertaining to remuneration and other details as required under section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016. Hence, no information is required to be appended to this report in this regard.

37. PARTICULARS OF EMPLOYEES - RULE 5(2) AND 5(3) OF COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) AMENDMENT RULES, 2016:

Your Company has not paid any remuneration attracting the provisions of rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016. Hence, no information is required to be appended to this report, in this regard.

38. MANPOWER:

Manpower of the Company as on 31st March, 2023:

Category Executives/NUS Non-executives Total
Male 183 7142 7325
Female 04 6896 6900
Total 187 14038 14225

39. WELFARE OF WEAKER SECTIONS OF THE SOCIETY:

Statutory welfare facilities as incorporated in the Factories Act, 1948 and The Plantation Labour Act, 1951 are administered by the Company for its employees.

Percentage of employees in total strength of the Company as on 31st March, 2023 belongs to SC/ST/OBC is as follows: SC: 8.07 %, ST: 27.60% and OBC: 55.47%.

Your Company has been complying with the Presidential Directives and other instructions/guidelines issued from time to time pertaining to policies and procedures of Govt. of India regarding reservation, relaxations, concessions etc. for SC/ST/ OBC in direct recruitment.

40. EMPOWERMENT OF WOMEN:

Development of society is closely linked with development of women, which is why, empowering and encouraging women lies at the core of all our programme. All necessary measures/ statutory provisions for safeguarding the interests of women employees in issues like payment of wages, hours of work, health, safety, welfare aspects and maternity benefits etc. are being followed by the Company.

Total number of women employees as on 31st March, 2023 were as follows:

Executives - 04 (four)

Non-unionised Supervisors - Nil

Non-Executives (including Tea Workers) - 6896 (six thousand eight hundred ninety-six)

Total number of Women employees - 6900 (six thousand nine hundred only)

41. HEALTH, SAFETY AND ENVIRONMENT:

AYCL is committed to providing a safe and healthy working environment and achieving an injury and illness-free work place. AYCL conducts all its activities in a manner that is protective for the environment, and in ensuring the health and safety of its employees, contractors, visitors, and the community around which it operates.

AYCL has implemented various health and safety measures in the Company including its factory units such as:

? the employees are being trained related to safety matters on regular basis. All occupational health and safety standards are adhered to as per the Factories Act, 1948.

? Environmental Management System in Engineering Division is in accordance with ISO 9001, ISO 14001.

? Engineering Division has implemented the "New Occupational Health and Safety Management System" (OHSMS) as per ISO 45001.

? Engineering Division has also installed Solar Power System (10KW generation) at the administrative building in line with the Governments aim for use of renewable energy as much as possible and Division is proud to say that this generation is being used by the Division for their industrial purpose since 2018-19. Engineering Division has used average 5000kwh unit from solar systems in the FY 2022-23 for industrial purpose.

? All tea gardens, have necessary certifications like ISO 22000 (Food, Safety, Management), Trustea, Rain Forest Alliance etc.

? Tea industry is a non-hazardous industry. The safety of its workforce remains a prime concern. Occupational health issues have been given prime importance through advocacy on appropriate nutrition, prevention of anemia. Medical check-ups are carried out amongst the sprayers at regular intervals.

? Electrical-Chennai Operation is having ISO 9001 and Central Power Research Institute (CPRI) Certification for 10MVA, 12.5 MVA, 20MVA and 31.5 MVA.

42. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

In accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Internal Complaints Committee has been constituted. No complaint or allegation of sexual harassment has been received at the Company during the period under review.

43. GRIEVANCE REDRESSAL MECHANISM:

The Company expeditiously disposes of all the public grievances during the financial year 2022-23 and copy of the replies are sent to the controlling Ministry, in case the public grievance was being forwarded by them.

The status of the public grievances during the financial year 2022-23 is as follows:

Type of Grievance Grievances out^anding as on 01.04.2022 No. of Grievances received during the year No. of Grievances disposed off No. of Grievances pending as on 31.03.2023
Public Grievances Nil 4 (four) 4 (four) Nil

44. INDUSTRIAL RELATIONS:

During the year under review, industrial relations at the Company continued to remain cordial and peaceful in all the units/ divisions.

45. MEMORANDUM OF UNDERSTANDING (MOU):

The Memorandum of Understanding (MoU) with the Ministry of Heavy Industries for the financial years 2023-24 and 202425 have been signed. The MoU sets forth various targets and parameters of performance, which are assessed against actual achievements after close of the financial year. The rating for 2022-23 is not yet finalized. The rating for 2021-22 was "Good".

46. IMPLEMENTATION OF THE RIGHT TO INFORMATION ACT, 2005:

The Company abides by the provisions of the Right to Information Act, 2005 (RTI Act) and information seekers are furnished with relevant information by the Public Information Officers. Every endeavor is there on the part of the Company to dispose of the applications expeditiously.

During the year ended 31st March, 2023, the number of applications received/ accepted/rejected/disposed of under RTI Act are as follows:

Applications received : 34 (thirty- four)

Applications accepted : 34 (thirty- four)

Applications rejected : Nil

Applications disposed of : 34 (thirty- four)

47. VIGILANCE:

A. The status of the various activities monitored by the Vigilance Department during the year 2022-23 are as under:

E-governance: The Company has already implemented e-procurement policy (Rs.2 lakh and above), e-payment and e-tendering/e-auction as per the guidelines of the Ministry across all the Divisions of the Company. E-office

system has already been implemented in the General Division of the Company and in other units/divisions, it will be implemented shortly.

Structured Meeting: Quarterly Structured Meetings between CVO and CMD are being held in time and the minutes are forwarded to the competent authority.

B. Status of various activities undertaken by the Vigilance Department during the year 2022-23 are as under:

i. System Improvements: Some of the suggestions from Vigilance Department for system improvement are:

a) Digitization of existing manual submission of Annual Property Returns for Executives and Non-unionized supervisors of AYCL.

b) Implementation of Integrity Pact.

c) Proper penal provision to be incorporated in the appointment letter of Consultants.

d) E-Office in Head office may be extended to all the gardens including Tea (Head Office) so that all the approval could be routed through the Online system.

e) Database should have the option to see all types of remittances to individual executives.

f) Office -wise/Garden-wise "Power of Attorney" should be available with the online database stating the name of the executives with designation and validity of the same.

ii. Annual Property Returns: Annual property Returns are being scrutinized regularly as per the guidelines of CVC.

iii. Vigilance Awareness Week: "Vigilance Awareness Week-2022" was observed in AYCL on the theme of "Corruption free India for a developed Nation" in a befitting manner from 31.10.2022 to 06.11.2022, as per the instructions of the Central Vigilance Commission.

The following activities as directed by the commission were organized during the "Vigilance Awareness Week-2022":

? Integrity Pledge had been administered by the Director (Personnel) of the Company at the Board Room on 31.10.2022 at 11 a.m. Oath had also been taken across the divisions / units / tea gardens on the same day.

? Integrity Pledge had been also administered to all employees of Registered Office on 31.10.2022.

? Interactive Session on company CDA Rules, Purchase Procedure were organized on 31.10.2022 at Registered Office, Kolkata.

? Anti-Corruption pamphlets were distributed among vendors / common citizens during the occasion in all our divisions and Tea Gardens.

? Banners were displayed at the prominent and strategic positions at Units/Tea gardens/ including registered office.

* Essay writing competition was organized among employees and their families of the Company. A total of 11 nos. of Essay received from employees, out of which 6 nos. in English and 5 nos. in Hindi language.

Details of the vigilance cases during the financial year 2022-23 are as follows:

Opening balance as on 01.04.2022 Received during the year Disposed of during the year Balance as on 31.03.2023
3 (three) 1 (one) 2 (two) 2 (two)

48. PROGRESSIVE USE OF HINDI:

In AYCL, the Unicode system has been implanted in majority of the computers of the Company. The Company has provided Hindi Language software in computers and imparting training to its employees, so that AYCLs employees can use the same in their day-to-day workings. For propagating and implementation of the provisions of Official Language Act, 1963, the company is continuously organizing Hindi competitions.

During the financial year 2022-23, Hindi poem recitation competition was held on 27th September, 2022 and Hindi slogan writing competition was held on 29th September, 2022. Hindi seminars were conducted on 30th June, 2022, 29th September, 2022, 27th December, 2022 and 29th March, 2023. Employees of the Company were encouraged to participate in various competitions in Hindi conducted by other institutions.

Presently, Board meetings and other Board Committee meetings of the Company are being conducted in Hindi also and the agenda and minutes of the said meetings are also being drafted in Hindi.

49. SWACHHTA PAKHWADA:

The Company celebrated Swachhta Pakhwada between 16th August, 2022 to 31st August, 2022 with great enthusiasm and grandeur. The Swachhta Pledge was taken by all employees of the Company. "Swachh Bharat" banners were displayed at different locations of the Company during the fortnight. Surroundings of the establishments of the Company were cleaned and senior officials took part in the programme. Workshops and meetings on Swachhta were organized to explain the need of a clean and hygienic work environment at the Registered Office, all factories and tea gardens which generated lot of enthusiasm amongst the participants. Company officials exercised campaigning to keep the environment clean and hygienic. Pamphlets on Swachhta were distributed during the period.

50. AZADI KAAMRIT MAHOTSAV

AYCL being a uniquely diversified CPSE having interests in the Tea, Electrical and Engineering industries have made an earnest endeavor to celebrate "Azadi Ka Amrit Mahotsav" throughout the organization. The allotted week for the Companys celebration was from 10th to 16th January, 2022 and various activities were undertaken at all levels throughout the organization to celebrate 75 years of Indias independence. The celebration encompasses within its fold various activities viz. webinars, discourses, drawing competitions, quiz contests, "Fit India" runs, rendering of National Anthem, cleaning and disinfection drive at the Tea estates, etc.

51. CORPORATE WEBSITE OF THE COMPANY:

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

52. RESEARCH & DEVELOPMENT (R&D) FACILITIES OF THE COMPANY:

The main focus of in-house R&D facilities in the Company is to provide continuous up-gradation to the existing products to match the demands of the domestic market as well as to seize the opportunities in export market. Some of the R&D activities carried out by the company?s different Divisions were as follows:

a. Tea Division:

We in the Tea Industry being member of Tea Research Association - TRAhave all updated research findings which are published monthly as well as discussed in monthly council meetings at different regions. TRA being an autonomous body is highly dedicated to research & development of Tea Industry which has always helped us to improve upon land productivity and quality of tea produced.

b. Engineering Division:

(i) Oil lubricated housing: Engineering division has completed design activities for SR-200 Bearing Housing suitable for 200 mm dia. shaft. Now it is under physical development stage. It will reduce cycle time by at least 1 (one) month and yearly cost saving will be Rs. 2.00 lakh per programme set.

(ii) Technology Development: Thick Seal Ring fabrication by cutting, bending and radiography welding incurs lengthy process and man-hour involvement is more. Procurement of single piece forged thick seal ring from vendor eliminates above mentioned lengthy process and reduced cost.

53. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under provisions of section 134(3)(m) of the Companies Act, 2013 read with rule 8(3) of the Companies (Accounts) Rules, 2014, are furnished in Annexure-II and forms part of this report.

54. PROCUREMENT FROM MICRO, SMALL AND MEDIUM ENTERPRISES:

As per requirement of Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 and notifications issued by Central Government in this regard, PSUs are required to purchase minimum 25% of total annual purchase of specified products produced and services rendered by MSMEs. It further requires that 4% out of 25% shall be earmarked for procurement from MSMEs owned by scheduled caste or scheduled tribe entrepreneurs. Further a minimum 3% procurement from women-owned MSME is envisaged within the abovementioned 25% reservation. It also requires the PSUs to report goals set with respect to aforesaid procurement and achievements made thereto in its Annual Report.

In this regard, it is to mention that the total procurement of goods from MSME achieved during the financial year 202223 was 45.82% of procurement against target of 25%. Further, the Company achieved 0.94% procurement from SC/ST MSME, 0.52% of procurement from MSME owned by women out of the total MSME procurement during the financial year 2022-23.

55. PROCUREMENT THROUGH GeM:

The Government e-Marketplace (GeM) is a government run e-commerce portal. It is a one-stop to facilitate and enable easy online procurement of goods and services that are needed by various Government departments, organizations and PSUs. AYCLs all work centers are registered on GeM Portal and procuring the goods and services available on the portal through GeM only.

During the financial year 2022-23, AYCL has made procurement of Rs.138.50 crore through GeM as compared to Rs.94.07 crore in during the previous financial year.

56. TRAINING PROGRAMME:

During FY 2022-23, 2 (two) online external training programmes and 7 (seven) internal training programmes were conducted.

Total 97.5 mandays external training programmes were conducted on various topics during the year under review. 37 participants had been imparted training during the year through various training programmes.

57. STATUTORY AUDITORS AND AUDIT REPORT:

In terms of section 143(5) of the Companies Act, 2013, M/s. S. K. Basu & Co., Chartered Accountants was appointed by the Comptroller & Auditor General of India as the statutory auditors of your Company for the financial year 2022-23. The statutory auditors report is attached, which is self-explanatory.

In respect of the comments made by the statutory auditors in their report, your Directors have stated that:

Type of Audit Qualification Management Explanation
Standalone Audit Qualification
1. In absence of balance confirmation certificates and sufficient and appropriate audit evidence from Debtors and Creditors we are unable to form an opinion regarding correctness of the balances of Debtors and Creditors and actual provision required to be made. Effect of the above, if any, on profit and loss of the Company is not ascertainable. The company has no policy to provide for receivables on the basis of age. Debtors outstanding for more than 36 months in each of the divisions of the company are as follows: Para 2.9 As per Companys accounting policy, trade receivables are recognized initially at transaction price and subsequently measured at cost less provision on the basis of internal analysis of credit risk by the Company. Based on the above, the Company, after due analysis have made adequate provisions in respect of such cases where risk of recovery is comparatively higher. Further in Note No 59 It has been explained that "the Company has system of seeking year ending balance confirmation certificates from debtors and creditors. However, the Company has maintained the figures available in accounts for cases wherein, no response from debtors/creditors is received.
Name of the Division Total Receivables (In Rs. lakh) as on 31.03.2023 Receivables over 36 months (In Rs. lakh) Provisions available as on 31.03.23 (Rs. lakh)
Tea Division 280.96 NIL 8.39
Engineering Division 3992.83 892.56 329.36
Electrical Chennai 8287.65 413.22 514.95
General Division 106.48 32.48 Nil
Total 12667.93 1338.26 852.70

Hence, we are unable to comment on the adequacy of provisions made by the Company.

2. It was resolved in the meeting of the Audit Committee and passed by the Board of Directors in the meeting held on 12th November,2021 above that the entire unused stock and machinery (including any unaccounted-for old goods not in stores/asset register), scrap of Electrical division is to be sold through MSTC. However, the unaccounted-for goods if any detected, should be accounted for. It is not clear to us how such goods would have escaped physical verification and remained unaccounted for. Out of such unaccounted stock, materials were disposed of during the financial year 2022-23 for a consideration of Rs. 10.76 lakhs. Due to presence of such unaccounted-for inventories, we are not in a position to opine whether proper value of inventories has accounted for in the books of the Electrical division. The effect on profits or losses of the Company due to the above, if any is not ascertainable. The entire stock of Brentford and Switch gear division of the Company of Rs. 662.89 Lakhs has been provided in the accounts. However, no value has been considered for old process scraps, failed parts of Transformers, VCB which were already charged in consumption at the time of issue of material during production in earlier years. The sale value of these items as received have been booked as income.
3. The net carrying amount of Property, Plant and Equipment of Electrical Division, Kolkata amounting to Rs. 534.49 lakhs has been included in the Property Plant and Equipment of Electrical Division, Kolkata after reclassification and disposals at the lower of net carrying value and fair market value. It was previously classified as "Assets held for Disposal" in the previous year. As the intention of the management to sell the above assets has not been changed to date in our opinion the asset should have remained in Assets Held for Disposal and should not have been reclassified in Property Plant and Equipment. Had the reclassification not been done, net profit would have been more by Rs.22.42 Lakhs and carrying value of assets would have been more by Rs.22.42 Lakhs. As approved by the Board of Directors in their meetings date 12/11/2021 and 05/01/2022, the Land, Building, Plant & Machinery including Electrical installation of three units of Electrical Kolkata Operations were decided to be disposed of. Accordingly, during the finalization of the Annual Accounts for the Financial year 2021-22, following the principles laid down in INDAS 105, the said assets were treated as "Assets held for sale". Since even after expiry of one year, as stipulated in INDAS 105, in respect of land and building the company is yet to receive approval from Govt of India and in respect of Plant & machinery which did not find any buyer even after conducting repeated auctions, those assets held for sale has been reclassified back to normal fixed assets at lower of A) Its carrying amount before the asset (or disposal group) was classified as held for sale, adjusted for any depreciation, amortization or revaluations that would have been recognized had the assets (or disposal group) not been classified as held for sale. B) Its recoverable amount i.e realizable value less cost of disposal at the date of the subsequent decision of reclassification.
C) Further wherever realizable value is not readily ascertainable, the carrying value of such assets has been considered as nil. The gains and losses have been considered as arising from continuing operation and presented as gains or losses recognized in relation to re measurement of fair value of assets in Note 35 "Other Expenses" of Rs. 147.47 lakhs. Further as per INDAS 105 after reclassification of the Assets of Electrical Kolkata, the results of operations of those Assets previously presented in discontinued operations in accordance with paragraph 33-35 of INDAS has been reclassified and included in income from continuing operations.
Consolidated Audit Qualification
1. In absence of balance confirmation certificates and sufficient and appropriate audit evidence from Debtors and Creditors we are unable to form an opinion regarding correctness of the balances of Debtors and Creditors and actual provision required to be made. Effect of the above, if any, on profit and loss of the Company is not ascertainable. The company has no policy to provide for receivables on the basis of age. Debtors outstanding for more than 36 months in each of the divisions of the company are as follows: As per Companys accounting policy trade receivables are recognized initially at transaction price and subsequently measured at cost less provision on the basis of internal analysis of credit risk by the Company. Based on the above, the Company, after due analysis have made provisions in respect of such situations where risk of recovery is comparatively higher.
Name of the Division Total Receivables (In Rs. lakh) As on 31.03.23 Receivables over 36 months (Rs. lakh) Provisions available as on 31.03.23 (Rs. lakh)
Tea Division 280.96 NIL 8.39
Engineering Division 3992.83 892.56 329.36
Electrical Chennai 8287.65 413.22 514.95
General Division 106.48 32.48 Nil
Total 12667.93 1338.26 852.70

Further in Note No 59 it has been explained that "the Company has system of seeking year-end balance confirmation certificates from debtors and creditors. However, the Company has maintained the figures available in accounts for cases wherein no response from debtors/creditors is received.

Hence, we are unable to comment on the adequacy of provisions made by the Company.

It was resolved in the meeting of the Audit Committee and passed by the Board of Directors in the meeting held on 12th November,2021 above that the entire unused stock and machinery (including any unaccounted-for old goods not in stores/asset register), scrap of Electrical division is to be sold through MSTC. However, the unaccounted-for goods if any detected, should be accounted for. It is not clear to us how such goods would have escaped physical verification and remained unaccounted for. Out of such unaccounted stock, materials were disposed of during the financial year 2022-23 for a consideration of Rs. 10.76 lakhs. The entire stock of Brentford and Switch gear division of the Company of Rs. 662.89 Lakhs has been provided in the accounts. However, no value has been considered for old process scraps, failed parts of Transformers, VCB which were already charged in consumption at the time of issue of material during production in earlier years. The sale value of these items as received have been booked as income.
Due to presence of such unaccounted-for inventories, we are not in a position to opine whether proper value of inventories has accounted for in the books of the Electrical division. The effect on profits or losses of the Company due to the above, if any is not ascertainable.
3. The net carrying amount of Property, Plant and Equipment of Electrical Division, Kolkata amounting to Rs. 534.49 lakhs has been included in the Property Plant and Equipment of Electrical Division, Kolkata after reclassification and disposals at the lower of net carrying value and fair market value. It was previously classified as "Assets held for Disposal" in the previous year. As the intention of the management to sell the above assets has not been changed to date in our opinion the asset should have remained in Assets Held for Disposal and should not have been reclassified in Property Plant and Equipment. Had the reclassification not been done, net profit would have been more by Rs.22.42 Lakhs and carrying value of assets would have been more by Rs.22.42 Lakhs. As approved by the Board of Directors in their meetings date 12/11/2021 and 05/01/2022, the Land, Building, Plant & Machinery including Electrical installation of three units of Electrical Kolkata Operations were decided to be disposed of. Accordingly, during the finalization of the Annual Accounts for the Financial year 2021-22, following the principles laid down in INDAS 105, the said assets were treated as "Assets held for sale". Since even after expiry of one year, as stipulated in INDAS 105, in respect of land and building the company is yet to receive approval from Govt of India and in respect of Plant & machinery which did not find any buyer even after conducting repeated auctions, those assets held for sale has been reclassified back to normal fixed assets at lower of
A) Its carrying amount before the asset (or disposal group) was classified as held for sale, adjusted for any depreciation, amortization or revaluations that would have been recognized had the assets (or disposal group) not been classified as held for sale.
B) Its recoverable amount i.e realizable value less cost of disposal at the date of the subsequent decision of reclassification.
C) Further wherever realizable value is not readily ascertainable, the carrying value of such assets has been considered as nil. The gains and losses have been considered as arising from continuing operation and presented as gains or losses recognized in relation to re measurement of fair value of assets in Note 35 "Other Expenses" of Rs. 147.47 lakhs.
Further as per INDAS 105 after reclassification of the Assets of Electrical Kolkata, the results of operations of those Assets previously presented in discontinued operations in accordance with paragraph 33-35 of INDAS has been reclassified and included in income from continuing operations.

RECOMMENDATIONS MADE BY THE COMMITTEE ON PAPERS LAID ON THE TABLE (RAJYASABHA) IN ITS 150th REPORT:

Details to be provided in the Annual Report in terms of recommendations made by the Committee on Papers laid on the table (Rajya Sabha) in its 150th report are as under:

i. Details of the vigilance cases for the financial year 2022-23:

Opening balance as on 01.04.2022 Received during the year Disposed of during the year Balance as on 31.03.2023
3 (three) 1 (one) 2 (two) 2 (two)

ii. Status of pending CAG paras and management replies: NIL

58. SECRETARIAL AUDIT AND COMPLIANCE REPORT:

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed M/s. A K Labh & Co., Company Secretaries in wholetime practice, to conduct secretarial audit of the Company for the financial year ended 31st March, 2023. Accordingly, they have conducted secretarial audit for the financial year 2022-23 and submitted secretarial audit report in form no. MR-3 which is attached hereto as Annexure-III and forms part of the boards report.

There are four observations in the secretarial audit report. One is related to the composition of the Board of Directors of the Company. Being a Central Public Sector Enterprise (CPSE) under the administrative control of the Ministry of Heavy Industries (MHI), Govt. of India, all Directors are appointed by the administrative ministry. Second observation is related to achieving Minimum Public Shareholding of at least 25%, in which an exemption has been granted by the Department on Economic Affairs till 1st August, 2024. Regarding the third observation, due to connectivity issues, there was one day delay in submission of Auditors Report, Statement of Assets and Liabilities, Cash Flow Statement and Statement of Impact of Audit Qualifications for the quarter and year ended 31st March, 2022. Fourth observation is related to rotational Directors wherein reply is same as in observation one.

Further, pursuant to the SEBI Circular no. CIR/CFD/CMD1/27/2019 dated 8th February, 2019 read with regulation 24A of SEBI Listing Regulations, M/s. A K Labh & Co., Company Secretaries in whole-time practice has issued an Annual Secretarial Compliance Report to the Company for the financial year ended 31st March, 2023, with respect to compliance of all applicable regulations, circulars and guidelines issued by the Securities and Exchange Board of India. The said report has been duly submitted to BSE Ltd. Further a copy of the report is available at the Companys website at the weblink http://www.andrewyule.com/ pdf/investor-relations/ASCR_2022_23.pdf.

59. COST AUDITORS AND COST AUDIT REPORT:

M/s. DGM & Associates, Cost Accountants (firm registration no: 000038) carried out the cost audit for the Company for the financial year 2022-23. They have been re-appointed as cost auditors for the financial year 2023-24 at the remuneration as set out in item no. 5 of the explanatory statement attached to the notice, which is subject to the ratification of the members in the ensuing Annual General Meeting.

The Company submits its cost audit report with the Ministry of Corporate Affairs within the stipulated time period.

60. COMMENTS OFTHE COMPTROLLER AND AUDITORGENERAL OF INDIA ON THE ACCOUNTS:

The Comptroller and Auditor General of India (C&AG) had conducted supplementary audit under section 143(6)(a) of the Companies Act, 2013 of the financial statements of Andrew Yule & Co. Ltd. for the year ended 31st March, 2023. The comments of Comptroller & Auditor General of India under section 143(6)(b) of the Companies Act, 2013 on the accounts of the Company for the year 2022-23 forms part of this report.

In respect of the comments made by C&AG in their reports, your Directors have stated that:

Standalone Financial Statements:

CAG Comments Management Rep ly
Assets Balance Sheet Non-Current Assets Financial Assets Other Financial Assets (Note 5) Earnest Money Deposit (EMD): Rs. 57.38 Lakh This includes Rs. 50.00 lakh being the amount paid to Tamilnadu Transmission Corporation Limited (TTCL) towards EMD for participation in tenders for supply of Power Transformers. Due to failure of the Company to execute an order (January 2019), TTCL terminated (February 2022) the contract and penalized the Company for an amount of Rs. 96.76 lakh and thus, forfeited the EMD and claimed the balance amount of Rs. 46.76 lakh. However, the Company has not made any provision for the above amount. This will be reviewed in FY 2023-24 and necessary effects will be passed in the Books of Accounts for FY 2023-24.
This has resulted in overstatement of above head by Rs. 50 lakh, understatement of current liabilities & provision by Rs. 46.76 lakh with corresponding overstatement of profit by Rs. 96.76 lakh
Current Assets This will be reviewed in FY 2023-24 and necessary
Inventories (Note-8) effects will be passed in the Books of Accounts for FY
Scrap: Rs. 40.82 lakh 2023-24.
This represents the value of scrap amounting to Rs. 40.82 lakh relating to Engineering Division of the Company. The above scrap has no other use in the production process of the Company and held for sale directly in the market as scrap. Further the scrap which is not to be used in the production process should not be included in Inventory and needs to be accounted for on realization basis. Hence, treating of scrap as inventory and valuation thereof has resulted in overstatement of the above head as well as profit by Rs. 40.82 lakh each.

Consolidated Financial Statements:

CAG Comments Management Reply
Assets Balance Sheet Non-Current Assets Financial Assets Other Financial Assets (Note 5) Earnest Money Deposit (EMD): Rs. 57.38 Lakh This includes Rs. 50.00 lakh being the amount paid to Tamilna- du Transmission Corporation Limited (TTCL) towards EMD for participation in tenders for supply of Power Transformers. Due to failure of the Company to execute an order (January 2019), TTCL terminated (February 2022) the contract and penalized the Company for an amount of Rs. 96.76 lakh and thus, forfeited the EMD and claimed the balance amount of Rs. 46.76 lakh. However, the Company has not made any provision for the above amount. This has resulted in overstatement of above head by Rs. 50 lakh, understatement of current liabilities & provision by Rs. 46.76 lakh with corresponding overstatement of profit by Rs. 96.76 lakh This will be reviewed in FY 2023-24 and necessary effects will be passed in the Books of Accounts for FY 2023-24.
Current Assets Inventories (Note-8) Scrap: Rs. 40.82 lakh This represents the value of scrap amounting to Rs. 40.82 lakh relating to Engineering Division of the Company. The above scrap has no other use in the production process of the Company and held for sale directly in the market as scrap. Further the scrap which is not to be used in the production process should not be included in Inventory and needs to be accounted for on realization basis. Hence, treating of scrap as inventory and valuation thereof has resulted in overstatement of the above head as well as profit by Rs. 40.82 lakh each. This will be reviewed in FY 2023-24 and necessary effects will be passed in the Books of Accounts for FY 2023-24.

61. INSOLVENCY AND BANKRUPTCY CODE, 2016:

AYCL has filed a Misc. Application before the Hon?ble NCLT seeking exemption of Long-Term Capital Gains arising out of sale of shares of its erstwhile Associate Company i.e. M/s Dishergarh Power Supply Co. Ltd. and its Joint Venture M/s Phoenix Yule Ltd. as approved in the BIFR Scheme of Revival.

However, despite repeated notices and advertisement made in various Newspapers, none of them had appeared before the Income Tax Directorate. Hence, the Honble Bench Members, Kolkata Bench has reserved the order. The matter was listed on July 3, 2023 before The Learned National Company Law Tribunal, Kolkata Bench-II. The matter was adjourned on that day.

62. DETAILS OF LAND

Pursuant to the guideline of the Ministry of Heavy Industries, Govt. of India, the status of lands possessed by AYCL as on 31st March, 2023 is annexed as Annexure-IV and forms part of the annual report.

63. DIRECTORS? RESPONSIBILITY STATEMENT:

Pursuant to the requirement under section 134(3)(c) read with section 134(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 year ended 31st March, 2023, the applicable accounting standards had been followed along with the proper explanation relating to material departures, if any;

ii. the Directors had 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 and loss of the Company for that period;

iii. the Directors had 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;

iv. the Directors had prepared the annual accounts of the Company on a going concern basis;

v. the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls were adequate and operating effectively; and

vi. the Directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

64. CAUTIONARY STATEMENT

Statements in the report, describing the Companys objectives, expectations and/or anticipations may be forward looking within the meaning of applicable Securities Law and Regulations. Actual results may differ materially from those stated in the statement. Important factors that could influence the Company?s operations includes global and domestic supply and demand conditions affecting selling prices of finished goods, availability of inputs and their prices, changes in the Government policies, regulations, tax laws, economic developments within the country and outside and other factors such as litigation and industrial relations.

The Company assumes no responsibility in respect of the forward-looking statements, which may undergo changes in future on the basis of subsequent developments, information or events.

65. ACKNOWLEDGEMENT

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

The Board also gratefully acknowledges the valuable guidance, support and cooperation received from the Ministry of Heavy Industries, Government of India as well as other Ministries in both the Central and State Governments. The support and co-operation extended by the Comptroller & Auditor General of India, statutory auditors, cost auditors, internal auditors, secretarial auditors, tax auditors and other stakeholders, need special mention and the Directors acknowledge the same.

The Board is also thankful to the Companys valued shareholders, esteemed customers for their valued patronage and for the support received from the bankers, financial institutions and suppliers in India and abroad.

For and on behalf of the Board
Kolkata, Sanjoy Bhattacharya
7th August, 2023 Chairman & Managing Director

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