STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

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62 Escorts Limited 71 Annual Report 2016-17 63

• Earnings per share is of B13.43 for the year under review.

Directors’ Report • Your Company sold 63,786 tractors during the year under
General Meeting. His appointment is appropriate and in the
best interest of the Company.

review. Dr. S.A. Dave had resigned as Director of the Company

Management Discussion & Analysis
Management Discussion & Analysis which forms an integral
part of this Annual Report provides a detailed analysis on
the performance of individual businesses and their outlook.
Dividend
Your Directors have pleasure in presenting the Seventy First Annual Report and the Company’s audited financial statements
Your Directors are pleased to recommend a Dividend of
(standalone and consolidated) for the financial year ended on March 31, 2017.
B1.50 per Equity Share (15%) on the face value of B10/- each,
w.e.f. September 20, 2016. The Board places on record its
warm appreciation for the valuable guidance and services
rendered by Dr. Dave during his tenure with the Company.
The Board of Directors, in their meeting held on May
29, 2017, had recommended the re-appointment of Mr.
P.H. Ravikumar and Mrs. Vibha Paul Rishi as Independent
Directors for a further period of 5 years for approval of
members of the Company at the ensuing AGM.

Financial Results aggregating B18.39 Cr. (exclusive of tax on dividend) for the Pursuant to the provisions of Section 149 and other
financial year ended March 31, 2017. The dividend payout is applicable provisions of the Act, your directors are seeking
Particulars Year ended on Year ended on
subject to the approval of members at the ensuing Annual re-appointment of Mr. P.H. Ravikumar and Mrs. Vibha Paul
March 31, 2017 March 31, 2016
General Meeting (AGM). Rishi as Independent Directors for a period of 5 years.
Gross Revenue 4,211.04 3,494.49
Excise Duty 74.42 71.91 The dividend, if approved at the ensuing AGM, will be The Company has received declarations from all the
paid to members whose names appear in the Register of Independent Directors of the Company confirming that
Net Revenue 4,136.62 3,422.58
Members as on September 8, 2017, in respect of shares they meet with criteria of independence as prescribed
Profit from continuing operations before Interest, Depreciation, Exceptional 367.17 232.55
held in dematerialized form and members whose names under sub-section (6) of Section 149 of the Act and
Items & Tax
are furnished by National Securities Depository Limited and under Regulation 16(1)(b) of SEBI (Listing Obligations and
Finance Cost 31.11 49.54
Central Depository Services (India) Limited, as beneficial Disclosures Requirements) Regulation, 2015 (hereinafter
Profit from continuing operations before Depreciation, Exceptional Items 336.06 183.01
owners as at that date. referred as “the Listing Regulations“). The policy for selection
& Tax
The dividend payout for the period under review has been of directors and determining directors independence is
Depreciation & Amortisation 63.07 57.50
formulated in accordance with shareholders’ aspirations attached as Annexure - B and forms an integral part of this
Profit from continuing operations before Exceptional Items & Tax 272.99 125.51
and the Company’s Dividend Distribution Policy to pay Report.
Exceptional Item (3.76) 12.29
Profit from continuing operations before Tax 276.75 113.22
sustainable dividend linked to long-term growth objectives The Company has devised a Policy for performance
of the Company to be met by internal cash accruals. evaluation of Independent Directors, Board, Committees
Tax Expense 75.60 12.50
Profit from continuing operations after Tax 201.15 100.72
and other individual Directors which includes criteria
Employee Stock Option Scheme for performance evaluation of the Non-Executive and
Profit/(Loss) from discontinued operations before tax (58.46) (25.96)
The particulars with regard to the Employees Stock Options Executive Directors. In accordance with the Policy, a
Tax expense of discontinued operations (17.75) (8.99) as on March 31, 2017 as required to be disclosed pursuant process of evaluation was followed by the Board for its
Net profit/(loss) from discontinued operations after tax (40.71) (16.97) to the provisions of Clause 12 of SEBI (Employees Stock own performance and that of its Committees and individual
Net profit for the period 160.44 83.75 Option Scheme and Employees Stock Purchase Scheme) Directors. The remuneration policy for directors, key
Appropriations for the year:- Guidelines, 1999, as amended, are enclosed at Annexure – managerial personnel and other employees is annexed as
Dividends (14.35) (14.30) A and forms an integral part of this Report. Annexure – C and forms an integral part of this Report.
Tax on Dividends (2.99) (2.99)
Directors The brief resumes and other details relating to the Directors
Dividend received on shares held by beneficiary trust* 4.48 4.48
In accordance with the provisions of Companies Act, 2013 who are proposed to be appointed/ re-appointed, as
* for more information please refer note 45 of the notes to accounts of standalone financial statement (hereinafter referred as “the Act”) and Articles of Association required to be disclosed under the Listing Regulations is
of the Company, Ms. Nitasha Nanda, Whole-time Director given in the Annexure to the Notice of the 71st AGM.
and Mr. G.B. Mathur, Director retires by rotation at the Your Directors recommend the appointment/ re-
Financial Performance • Profit from continuing operations Before Interest,
ensuing AGM and being eligible, offers themselves for re- appointment of the above said Directors at the ensuing
The brief highlights of the Company’s performance Depreciation, Amortisation, Exceptional Items & Tax
appointment. AGM.
(standalone) for the financial year ended March 31, 2017 stood at B367.17 Cr.
are:- The Board of Directors, in their meeting held on May The Company has devised a process where various
• Profit from continuing operations Before Tax (PBT) stood
29, 2017, had recommended the re-appointment and presentations/ programs are being conducted to make
• Net Revenue of the Company for FY 2017 of B4,136.62 cr. at B276.75 Cr and Profit from continuing operations After
remuneration of Mr. Nikhil Nanda as Managing Director for them familiarise with various developments at Industry level,
was higher by 20.86% over the last year (B3,422.58 cr. in Tax (PAT) stood at B201.15 Cr. Net profit for the period
a further period of 5 years w.e.f September 19, 2017, subject new business initiatives and organisation strategies etc.
FY 2016). stood at B160.44 Cr.
to the approval of the shareholders in the ensuing Annual

64 Escorts Limited
The details of programme for familiarisation of Independent
Directors with the Company, their roles, rights, responsibilities
in the Company, nature of industry in which the Company
operates, business model of the Company and related
matters are put up on the website of the Company – www.
escortsgroup.com.
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 Section 134(3)(m)
of the Act read with Companies (Accounts) Rules, 2014 are
provided as Annexure - D and forms an integral part of this
Report.
Corporate Governance
Your Company reaffirms its commitment to the good
corporate governance practices and has adopted the Code
of Conduct which has set out the systems, processes and
policy conforming to international standards. Pursuant to
Regulation 34(3) of the Listing Regulations 2015, Corporate
Governance Report and Auditors’ Certificate regarding
compliance of conditions of Corporate Governance are
enclosed as Annexure - E and forms an integral part of this
Report.
Corporate Social Responsibility (CSR)
The key philosophy of all CSR initiatives of the Company
is to make CSR a key business process for sustainable
development of the society. The initiatives aim at enhancing
welfare measures of the society based on the immediate
and long term social and environmental consequence of
its activities.
The Company intends to undertake other need based
initiatives in compliance with Schedule VII of the Act.
The CSR Policy may be accessed on the Company’s website
www.escortsgroup.com under Investors Information
Section. During the year, the Company has spent B3.30 Cr.
(1.93% of the average net profits of last three financial years)
on CSR activities.
The Annual Report on CSR activities is enclosed as Annexure
– F and forms an integral part of this Report.
Indian Accounting Standards
The Ministry of Corporate Affairs (MCA) on February 16,
2015, notified that Indian Accounting Standards (Ind AS) are
applicable to certain classes of companies from April 1, 2016
with a transition date of April 1, 2015. Ind AS has replaced
the previous Indian GAAP prescribed under Section 133 of
the Companies Act, 2013 (“the Act”) read with Rule 7 of the
Companies (Accounts) Rules, 2014. Ind AS is applicable to
the Company from April 1, 2016.
The reconciliations and descriptions of the effect of the
transition from previous GAAP to Ind AS have been set
out in Note 49 in the notes to accounts in the standalone
financial statement and in Note 49 in the notes to accounts
in the consolidated financial statement.
Consolidated Financial Statements
The Consolidated Financial Statements have been prepared
in accordance with the Act and Indian Accounting
Standard (IND AS) - 110 applicable to the Consolidated
Financial Statements read with IND AS-28 on Accounting
for Investments in Associates and IND AS-31 on Financial
Reporting of Interests in Joint Ventures issued by The
Institute of Chartered Accountants of India. The Audited
Consolidated Financial Statements along with the Auditors’
Report thereon are annexed with this Report.
Subsidiaries, Joint Ventures and Associate
Companies
The statement containing salient features of financial
statements of subsidiaries, associate and joint venture
companies prepared in accordance with Section 129 of the
Act read with Rule 5 of Companies (Accounts) Rules, 2014,
forms an integral part of this Report. The Consolidated
Financial Statements presented by the Company include
the financial results of its subsidiaries, associate and joint
venture companies.
The Company will make available the Annual Accounts
of its subsidiaries, associate and joint venture companies
and related information to the members of the Company
who may be interested in obtaining the same. The annual
accounts of its subsidiaries, associate and joint venture
companies will also be kept open for inspection at the
Registered Office of the Company.
Contracts and Arrangements with Related
Parties
All contracts/ arrangements/ transactions entered by the
Company during the financial year with related parties were
in the ordinary course of business and on an arm’s length
basis. During the year, the Company had not entered into
any contract/ arrangement/ transaction with related parties
which could be considered material in accordance with the
policy of the Company on the materiality of related party
transactions.
STRATEGIC REPORT GOVERNANCE
The particulars of contracts and arrangement with related
parties under Section 188(1) of the Act in Form AOC-2 is
enclosed as Annexure – G.
The Policy on materiality of related party transactions and
dealing with related party transactions as approved by the
Board may be accessed on the Company’s website www.
escortsgroup.com under Investors Information Section.
Your Directors draw attention of the members to Note 48 in
the notes to accounts in the standalone financial statement
and to note 47 in the notes to accounts in the consolidated
financial statement which sets out related party disclosures.
Auditors and Auditors’ Report
Statutory Auditors
Pursuant to the provisions of Section 139 of the Act read
with Companies (Audit and Auditors) Rules, 2014, M/s. S.N.
Dhawan & Co. LLP, Chartered Accountants, Delhi (Firm
Registration No. 000050N/N50004) Statutory Auditors of
the Company, hold office till the conclusion of the ensuing
AGM and are not eligible for re-appointment.
M/s. Walker Chandiok & Co LLP, Chartered Accountants,
New Delhi (Firm Registration No. 001076N/ N500013)
have shown their interest to act as Statutory Auditors of the
Company for a period of 5 years subject to the ratification
of their appointment at every AGM.
The Company has received letter of confirmation from
M/s. Walker Chandiok & Co LLP, Chartered Accountants to
the effect that their appointment, if made, would be within
the prescribed limits under Section 139 of the Act and that
they are not disqualified for such appointment within the
meaning of Section 141 of the Act, read with Companies
(Audit and Auditors) Rules, 2014.
The observations and comments given by M/s. S.N. Dhawan
& Co. LLP, Chartered Accountants, Statutory Auditors in
their report read together with notes to Accounts for the
year ended March 31, 2017 are self-explanatory and hence,
do not call for any further comments under Section 134 of
the Act.
Cost Auditors
The Board of Directors of the Company has re-appointed
M/s. Ramanath Iyer and Co., Cost Accountants, New
Delhi (Firm Registration No. 000019), Cost Auditors of the
Company under Section 148 of the Act, for conducting the
audit of cost records for the financial year 2017-18.
FINANCIAL STATEMENTS OTHER INFORMATION
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71 Annual Report 2016-17 65
The due date of filing the Cost Audit Report for the year
ended on March 31, 2016 was September 30, 2016 and the
same has been filed on September 28, 2016.
Secretarial Auditors
The Board of Directors of the Company had appointed
M/s. Jayant Gupta and Associates, Practicing Company
Secretary to conduct secretarial audit of the Company
for the financial year 2016-17. The Secretarial Audit Report
for the financial year ended March 31, 2017 is enclosed as
Annexure – H and forms an integral part of this Report.
The observations and comments given by the Secretarial
Auditors in their report are self-explanatory and hence, do
not call for any further comments under Section 204(3) of
the Act.
The Board has also re-appointed M/s. Jayant Gupta and
Associates, Practicing Company Secretary to conduct
secretarial audit of the Company for the financial year
2017-18.
Risk Management
A Risk Management Committee which has been
entrusted with the responsibility to assist the Board in (a)
overseeing and approving the Company’s enterprise wide
risk management framework; and (b) Overseeing that
all the risks that the organisation faces such as strategic,
financial, credit, market, liquidity, security, property, IT, legal,
regulatory, reputational and other risks have been identified
and assessed and there is an adequate risk management
infrastructure in place capable of addressing those risks. The
Risk Management Policy was reviewed and approved by the
Committee.
Internal Financial Controls
The Company has in place adequate internal financial
controls for ensuring the orderly and efficient conduct of
its business. During the year, such controls were tested and
no reportable material weakness in the design or operation
was observed.
Disclosures
Meetings of the Board
Five meetings of the Board of Directors were held during the
year. For further details, please refer Report on Corporate
Governance annexed as Annexure – E to this Report.

66 Escorts Limited
Audit Committee
For constitution and other details of the Audit Committee,
please refer Report on Corporate Governance annexed as
Annexure-E to this Report.
All the recommendations made by the Audit Committee
were accepted by the Board.
Extracts of Annual Return
In terms of provisions of Section 92 of the Act read with the
Companies (Management and Administration) Rules, 2014,
the extracts of Annual Return in Form MGT-9 is enclosed as
Annexure – I and forms an integral part of this Report.
Vigil Mechanism
The Company has a vigil mechanism for Directors and
Employees to report their concerns about unethical
behavior, actual or suspected fraud or violation of the
Company’s Code of Conduct. The mechanism provides
for adequate safeguards against victimization of effected
Director(s) and Employee(s). In exceptional cases, Directors
and Employees have direct access to the Chairman of the
Audit Committee. The Whistle Blower Policy is available on
Company’s website.
Registrar and Share Transfer Agent
The Share Transfer and related activities are being carried
out by M/s Karvy Computershare Private Limited, Registrar
and Share Transfer Agents (Karvy RTA), from the following
address: -
M/s Karvy Computershare Private Limited
Karvy Selenium, Tower B, Plot No. 31-32,
Gachibowli, Financial District, Nanakramguda,
Hyderabad-500032, Telengana
All correspondence may kindly be sent to the above address
only.
Particulars of Loans given, Investments made,
Guarantees given and Securities provided
Particulars of loans given, investments made, guarantees
given and securities provided along with the purpose for
which the loan or guarantee or security is proposed to be
utilised by the recipient has been given elsewhere in the
Annual Report and forms an integral part of this Report.
Particulars of Employees and related
disclosures
In terms of provisions of Section 197(12) of the Act, read
with the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, a statement showing
the names and other particulars of the employees drawing
remuneration in excess of the prescribed limits are available
with the Company Secretary. Having regard to the provisions
of Section 136(1) of the Act, the Annual Report excluding
the aforesaid information is being sent to the members of
the Company. Any member interested in obtaining such
particulars may write to the Company Secretary of the
Company and the same will be furnished on request.
Disclosures pertaining to remuneration and other details
as required under Section 197(12) of the Act read with Rule
5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 is annexed as Annexure
– J and forms an integral part of this Report.
Public Deposits
The Company has not accepted/ renewed any Fixed
Deposit during the financial year.
Transfer to Investor Education and Protection
Fund
Pursuant to the provisions of Section 205A(5) of the Act, the
dividend which remained unclaimed or unpaid for a period
of seven years has been transferred by the Company, from
time to time on due dates to the Investor Education and
Protection Fund.
As on March 31, 2017, no unclaimed deposits are pending
for transfer to Investor Education and Protection Fund.
Divestment of Auto Products Business
During the year, the Company has divested its OEM & Export
Business of Auto Product Division as a part of the planned
strategic reorientation of the business to focus on core
verticals in the Agri-Machinery, Construction Equipment
and Railway Equipment segments.
Credit Rating
During the year, the credit rating of the Company have
been upgraded as under:
India Ratings has upgraded the long-term rating from ‘IND
A-’ to ‘IND A’.
ICRA Limited has upgraded the long-term rating from “A-”
to “A” with upward change in outlook from “STABLE” to
“POSITIVE”.
Business Responsibility Report
As stipulated under the Listing Regulations, the Business
Responsibility Report describing the initiatives taken by the
Company from an environmental, social and governance
STRATEGIC REPORT GOVERNANCE
perspective can be accessed at the website of the Company
www.escortsgroup.com under Investor Information Section.
Directors’ Responsibility Statement
Pursuant to the requirement under Section 134(5) of the
Act, with respect to Directors’ Responsibility Statement,
your Directors hereby state that:
(i) in the preparation of the annual accounts for the year
ended March 31, 2017, the applicable accounting
standards read with requirements set out under
Schedule III to the Act, have been followed alongwith
proper explanation relating to material departures;
(ii) the Directors have selected such accounting policies
and applied them consistently and made judgements
and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the
Company as at March 31, 2017 and of the profit and loss
of the Company for the year ended on that date;
(iii) the Directors have taken proper and sufficient care
for the maintenance of adequate accounting records
in accordance with the provisions of the Act, for
safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(iv) the Directors have prepared the annual accounts for
financial year ended March 31, 2017 on a ‘going concern’
basis;
(v) the Directors have laid down internal financial controls
to be followed by the Company and that such internal
financial controls are adequate and are operating
effectively; and
(vi) the Directors had devised proper systems to ensure
compliance with the provisions of all applicable laws
and that such systems are adequate and operating
effectively.
Place: Faridabad
Date: May 29, 2017
FINANCIAL STATEMENTS OTHER INFORMATION
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71 Annual Report 2016-17 67
General
Your Directors state that no disclosure or reporting is
required in respect of the following items as there were no
transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of
the Act.
2. Issue of equity shares with differential rights as to
dividend, voting or otherwise.
3. Issue of shares (including sweat equity shares) to
employees of the Company under any scheme save
and except ESOS referred to in this Report.
4. Neither the Managing Director nor the Whole-time
Directors of the Company receive any remuneration or
commission from any of its subsidiaries.
5. No significant or material orders were passed by the
Regulators or Courts or Tribunals which impact the
going concern status and Company’s operations in
future.
Your Directors further state that during the year under
review, there were no cases filed pursuant to the Sexual
Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.
Acknowledgement
Your Directors would like to express their sincere
appreciation of the positive co-operation received from
the Central Government, the Government of Haryana
and Uttaranchal, Financial Institutions and the Company’s
Bankers, Customers and Dealers.
The Directors also wish to place on record their deep
sense of appreciation for the commitment displayed by
all executives, officers, workers and staff of the Company
resulting in the successful performance of the Company
during the year.
The Board also takes this opportunity to express its deep
gratitude for the continued co-operation and support
received from its valued shareholders.
For and on behalf of the Board of Directors
Sd/-
RAJAN NANDA
Chairman & Managing Director