Note 1 — Corporate Information

Andrew Yule &Company Limited (AYCL) was incorporated in 26.05.1919 as a Private Sector Company with an objective to work as managing agency. With the abolition of managing agency system, the Company lost its traditional business and Government of India acquired the Company in 1979. AYCL is a Schedule-”B” CPSE in Medium and Light Engineering Sector together with Tea producing and manufacturing business under the administrative control of Ministry of Heavy Industries and Public Enterprises, Department of Heavy Industry with 89.25% shareholding by the Government. Its Registered Office is situated 8, Dr. Rajendra Prasad Sarani, Kolkata-700001, West Bengal.

AYCL is a nationalized enterprises in the business of both manufacturing and sale of Black Tea, Transformers, Regulators/Rectifiers, Circuit Breakers, Switches, Industrial Fans, Tea Machinery, Turnkey jobs etc. It has five (5) Operating Units in West Bengal at Kalyani (1 Unit), Kolkata (3 Units) and in Chennai, Tamilnadu (1 Unit) and 15 Tea Gardens accross Assam and West Bengal. The Company is functioning in three main sectors namely Engineering, Electrical and Tea. AYCL has three 100% Subsidiaries namely Hooghly Printing Co. Ltd., Yule Engineering Ltd., and Yule Electrical Ltd. The enterprise has an employee strength of 14785 as on 31.03.2018. Its shares are listed at BSE.

The Financial Statements were approved for issue in accordance with the resolution of the Board of Directors on 30th May, 2018

Note 2 — Employee Benefits

[2.1] [a] Leave Obligation :

The Company provides for encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leaves subject to certain limits for future encashment. The liability is provided on the basis of number of days of accumulated leave at each Balance sheet on actuarial valuation. The scheme is unfunded. The amount of provision for leave encashment is Rs.1301.18 lakh (Rs.1327.85 lakh) is presented as current and non-current as per actuarial valuation basis.

[b] Medical Benefits :

The Medical benefits for the employees for domiciliary treatment is for a block of three years and shall lapse yearly thereafter if the concerned employee does not avail it. The liability towards such unveiled quantum of Medical benefits has been determined on actual basis instead of actuarial valuation method since the eligible amount will remain fixed during the next block. The total amount of liability as on 31st March, 2018 is Rs.299.54 lakh (Rs.216.59 lakh) has been taken into accounts.

[2.2] Post Employment Obligation — Defined Benefits Plans :

[a] Gratuity :

The Company has an obligation towards Gratuity payable to eligible employees as per the Payment of Gratuity Act,1972. The Company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimation of expected Gratuity payment. The plan is being managed by a separate trust created for the purpose and obligation of the Company is to make contribution to the trust based on actuarial valuation. The scheme is funded.

[b] Post retirement Medical Scheme :

Under the scheme employee gets one time benefits subject to certain limit of amount. The liability for this is determined on actual cost. The scheme is unfunded.

[c] Pension fund :

The Company has a defined benefit pension fund for certain eligible employees. The scheme is managed by a separate trust created for the purpose.

[2.3] Post Employment Obligation :

Defined Contribution plan :

The Company has defined contribution plan viz PF and ESI. The expenses recognized during the period towards Defined contribution plan is as follows :

Note 3

The Company has incurred revenue expenditure of Rs.150.81 lakh (Previous year Rs.43.23 lakh) on account of Research & Development expense the break-up of which is as follows :

[4.1] The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities related to income taxes levied by the same tax authority.

[4.2] During the year ended 31st March, 2017, the Company has paid dividend to the shareholders. This has resulted in payment of DDT to the taxation authorities. The Company believes that DDT represents additional payment to taxation authority on behalf of the shareholders. Hence DDT paid is charged to equity.

[4.3] During the year ended 31st March 2018 the current income tax expense of Rs.58.21 lakh relates to Assam and West Bengal agricultural income tax after adjustment of unabsorbed carry forward loss and eligible mat credit. There is no liability on account of Central Income Tax Act 1961.

Note 5 — Reconciliation between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

Note 6

Pending transfer of Assets and Liabilities of Engineering and Electrical Division to two 100% subsidiaries incorporate in the name of Yule Engineering Ltd and Yule Electrical Ltd as per Sanctioned Rehabilitation Scheme (SRS) all transactions for the year ended 31st March 2018 related to aforesaid divisions entered into by the Company in the Name of Andrew Yule & Company Ltd. (AYCL) have been accounted for in the Books of Accounts.

Note 7

Other Receivables includes Rs.23.96 lakh paid as Electricity duty which is considered receivable vide Circular Number 233-IR/O/IM-4/2003 dated 25th February, 2014 issued by Govt of West Bengal under “West Bengal Industrial Renewal Scheme, 2001” stated that the amount paid as electricity duty under the Provisions of Bengal Electricity Rules, 1935 shall be waived for period of five years with effect from 31st March, 2006.

Note 8

Sanctioned Rehabilitation Scheme approved by Board for Industrial and Financial Reconstruction (BIFR) vide Order dated 30th 0ct.,2007 with the cut off date of 31st March, 2006 is under implementation and the Company has come out from BIFR as per Order of BIFR dated 8th July, 2015.

Pursuant to Sanctioned Rehabilitation Scheme (hereinafter SRS) of BIFR stated above, the necessary effects have been given in the Financial Statements as under :

[a] West Bengal Sales Tax Loan amounting to Rs.250.00 lakh was granted by Government of India in 1999 repayment of which was to commence from 1st April, 2001and was payable in 5 equal instalments. BIFR vide its Order dated 30th October, 2007 recorded the issue of the said outstanding loan and prescribed that the accrued interest as on 31.03.2016 amounting to Rs.131.42 lakh, on the above principal amount of Rs.250.00 lakh will be added to the later and will be converted into an additional soft loan and prescribed a fresh repayment schedule, wherein the said Sales Tax Loan amounting to Rs.381.42 lakh was to be repaid over 8 (Eight) years in 16 (Sixteen) semi-annual instalments with a moratorium of three years, subject to rephasement by the Government of West Bengal. However, no rephasement of loan has been done by the Govt. of West Bengal as yet. As per present discussion with the respective Dept. of Govt. of West Bengal and as advised by them vide their letter dated 05.12.2017, Andrew Yule on 09.03.2018 deposited the Principal outstanding loan of Rs.250.00 lakh as full & final payment against the abovesaid due. Accordingly, the entire balance amount of Rs.530.44 lakh standing in the books as on 31.03.2018 has been written back.

Note 9

The Company has decided to increase the moratorium period in respect of 6% Cumulative Redeemable Preference Shares- WEBFIL of Rs.150.68 lakh (Discounted as per IND AS) (previous year Rs.136.11 lakh ) (Original value Rs 204.40 lakh) and zero rated unsecured Redeemable Bond of Rs.194.79 lakh (Discounted as per IND AS) (Previous year Rs.183.47 lakh) (Original value Rs.305.00 lakh) of WEBFIL for a period of 7 (Seven) years commenced from 1st April, 2014 and 20th December, 2014 respectively.

However, due to improvement in the financial position, WEBFIL has paid Rs.5.00 lakh to AYCL against their due for Unsecured Redeemable Bond.

Note 10

The Employees Provident Fund Organization has raised a demand Vide Order No. RRC-II/21 (88)05/WB amounting to Rs.566.37 lakh against which an amount of Rs.83.58 lakh has been paid under protest and Rs.16.84 lakh has been attached by Provident Fund Authority from Bank account maintained at State Bank of India, Kalyani Branch. The Hon’ble BIFR vide MA No.126 of 2014 has passed an order dated 23 rd June, 2015 to waive off the said demand. Our application to EPFO in this regard is still pending.

Note 11

[a] Figures in Bracket are of previous year.

[b] The fig in these accounts have been rounded off to nearest lakh of Rupees.

[c] Previous year figures have been rearranged and re-grouped wherever necessary as per the Indian Accounting Standards format.

Note 12 — First time adoption of IND AS

[12.1] Exemptions and Exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

[12.1.1] Ind AS Optional Exemptions

[12.1.1.1] Deemed Cost

Ind AS 101 permits a first time adopter to elect to continue with the carrying value for all of its property, plant and equipment, measured as per the previous GAAP and use that as its deemed cost at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38.

Accordingly, the Company has elected to measure all of its property, plant and equipment, intangible assets and investment property at their previous GAAP carrying value.

[12.1.1.2] Designation of previously recognized Financial Instruments

Ind AS 101 allows an entity to designate investments in equity instruments at Fair Value through Other Comprehensive Income (FVOCI) on the basis of facts and circumstances at the date of transition to Ind AS except investment in Associate and Subsidiary Company.

The entity has elected to apply this exemption for its investments.

[12.1.1.3] Leases

Ind AS requires an entity to assess whether a contract or arrangement contains a lease. This assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS.

[12.1.2] Ind AS mandatory exceptions

[12.1.2.1] Estimates

An entity’s estimates in accordance with Ind AS at the date of transition with a view thatInd AS shall be consistent with estimates made for the same date in accordance with previous GAAP.

Ind AS estimates at 1st April, 2016 are consistent with the estimates as at the same date made with conformity with previous GAAP.

[12.1.2.2] De-recognition of Financial Assets and Liabilities

Ind AS 101 requires a first time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first time adopter to apply the de-recognition retrospectively from a date of entity’s choosing.

The entity has elected to apply the de-recognition provisions prospectively from the date of transition.

[12.1.2.3] Classification and Measurement of Financial Assets

Ind AS 101 requires an entity to assess classification and measurement of assets on the basis of facts and circumstances that exist at the date of transition to Ind AS.

The entity has applied this exception.

[12.1.2.4] Fair Valuation of Investments

Under the previous GAAP, investments were classified as long term investments or current investments based on the intended holding period and realizability. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments have been recognized in retained earnings as at the date of transition.

[12.1.2.5] Deferred Tax

The disclosure relating to deferred tax is given in Note 43.

[12.1.2.6] Trade Receivables

The Company applies the simplified approach of recognizing the expected losses from initial recognition of the receivables on case to case basis as provision for impairment.

[12.1.2.7] Bank Overdrafts

Under Ind AS, bank overdrafts repayable on demand are included in cash and cash equivalents for the purpose of presentation of statement of cash flows. Under previous GAAP, bank overdrafts were considered as part of borrowings.

[12.1.2.8] Proposed Dividend

Under the previous GAAP, dividends proposed by the Board of Directors after the Balance Sheet date, before the approval of the financial statements were considered as adjusting events. Under Ind AS, such dividends are recognized when the same is approved by shareholders in the general meeting.

The Board has proposed dividend @ 1.96% amounting to Rs.191.73 lakh (Dividend Distribution Tax thereon Rs.39.03 lakh) at its meeting held on 30th May, 2018, subject to approval of members in the Annual General Meeting.

[12.1.2.9] Excise Duty

Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented as part of expenses.

[12.1.2.10] Recognition of Assets for WIP of Bearer Plants

As per Standard Accounting practice being followed in Tea Industry, all tea plants planted are treated as matured tea after its nurturing for three consecutive years & cost thereof for those sections which have attained maturity are shown as addition to block on the fourth year of its maintenance from Capital WIP.

[12.1.2.11] Remeasurements of Post-employment Benefit Obligations

Under the Ind AS, actuarial gains and losses and the return on plant assets, are recognized in other comprehensive income. Under the previous GAAP, they were forming part of the profit and loss for the year.