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Emami Ltd.

BSE: 531162 | NSE: EMAMILTD |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE548C01032 | SECTOR: Personal Care

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Annual Report

For Year :
2019 2017 2016 2015 2014 2013 2012 2011 2010

Director’s Report

It gives me great pleasure to share with you the performance of your Company along with audited accounts for the financial year ended March 31, 2019.

1. Performance highlights

FY2018-19 witnessed the industry recovering from the impacts of GST implementation. The sectoral scenario slowly improved and came back to normalcy, which also helped brighten growth prospects. Hence, despite the challenges, the Company reported a commendable performance. Your Company earned revenues worth RS.2,69,294 Lacs during FY2018-19, reporting a growth of 6%over FY2017-18. It also reported an EBIDTA of RS.72,553 Lacs, a growth of 1% over FY2017-18.

In the past few years, the Company has taken a host of measures for brands like Kesh King, Fair and Handsome as well as the international business to drive growth. The efforts have started paying off dividends. The international business reported a growth of 12% in FY2018-19 over FY2017-18 while the newly-relaunched Kesh King reported a growth of 13%.

The Pacharia plant saw its first full-year of operations backed by superior procedural efficiency and cutting-edge technology. The Company also saw significant savings in costs. The Company continued to invest in branding and communication and roped in a number of celebrities. The Company strengthened its presence in the modern trade channel by making its products available across major online platforms.

During the year under review, the Company has acquired a leading personal care brand, Creme 21, a German brand with strong roots & brand recall. The brand has a strong presence in Middle East and other focus markets offering skin care and body care products such as creams and lotions, shower gels, sun care range, men’s range, etc. The acquisition is expected to boost and complement Emami’s international business & portfolio particularly in MENA, SAARC and Russian markets.

Financial Results

(Rs. lacs)

Particulars

Standalone

Consolidated

2018-19

2017-18

2018-19

2017-18

Revenue from Operations

248327

2,36,427

269294

2,54,083

Profit before interest, depreciation and taxation

74363

72,772

76212

73,894

Interest

1929

3,317

2140

3,431

Depreciation and amortisation

31804

30,531

32531

31,086

Profit Before Tax and Exceptional Items

40629

38924

41541

39377

Exceptional Items

980

-

980

-

Profit before taxation

39650

38,924

40561

39,377

Less: Provision for taxation

- Current tax

8637

6,565

9723

7,275

- Deferred tax ( net )

488

7

366

(49)

- MAT credit entitlement

-

1,400

-

1,400

Profit after taxation

30524

30,952

30473

30,751

Share of minority interest

-

-

(70)

(84)

Profit after minority interest

30524

30,952

30543

30,835

Share of profit/(loss) of associate

-

-

(220)

(121)

Profit for the year

30524

30952

30323

30714

Cash profit

62328

61,482

62854

61,800

Balance brought forward

59082

42,148

63077

46,404

Profit available for appropriation

89606

73100

93400

77,118

Appropriation

Effects of adoption of new accounting standard , i.e, Ind AS 115

977

-

3552

-

Final dividend

15888

11,916

15888

11,916

Corporate dividend tax

3133

2,298

3133

2,298

Re-measurement of net defined benefit plans (net of tax)

(356)

(196)

(294)

(173)

Balance carried forward

69964

59,082

71121

63,077

Total

89606

73,100

93400

77,118

2. Changes in the nature of business, if any

There has been no change in the nature of business of the Company during the financial year 2018-19.

3. Dividend

Your Directors are pleased to recommend a dividend of RS.4/- per share (400% of the Company’s share capital) in adherence with Dividend Distribution Policy. The dividend is subject to approval of shareholders at the ensuing Annual General Meeting. The dividend, if approved, will be paid to members whose names appear in the Register of Members as on 1st August 2019. With respect to the shares held in dematerialised form, it would be paid to the members whose names are furnished by National Securities Depository Ltd (NSDL) and Central Depository Services (India) Ltd ( CDSL) as owners on the said date. The total dividend outgo for the financial year ended March 31, 2019 amounted to RS.21889/- lacs including the dividend distribution tax of RS.3732 lacs. The dividend payout ratio works out to 72.2%.

4. Transfer to reserve

Your Directors do not propose to transfer any amount to the general reserve.

5. Material changes and commitments

No material changes and commitments have occurred from the date of close of the financial year till the date of this Report, which might affect the financial position of the Company.

6. Share capital

During the year under review, the Authorised Share capital of the Company was increased from RS.25,00,00,000/- to RS.50,00,00,000/- divided into 50,00,00,000 equity shares of face value of RS.1 each. The Company issued 22,69,67,619 bonus shares of face value of RS.1 each as fully credited on 25th June , 2018 in a ratio of 1:1 (i.e. one equity share for every one equity share already held) to the Members of the Company. With this allotment, the total issued and paid-up capital of the Company has stood to RS.45,39,35,238 comprising 45,39,35,238 equity shares of face value of RS.1 each.

7. Internal control systems and their adequacy

Your Company has in place, an adequate system of internal controls commensurate with its size, requirements and the nature of operations. These systems are designed keeping in view the nature of activities carried out at each location and various business operations.

Your Company’s in-house internal audit department carries out internal audits at all manufacturing locations, offices and sales depots across the country. The objective is to assess the existence, adequacy and operation of financial and operating controls set up by the Company and to ensure compliance with the Companies Act, 2013, SEBI (Listing Obligations & Disclosures Requirements) Regulations, 2015 and corporate policies.

Your Company’s internal audit department and risk management system have been accredited with ISO 9001:2015 and ISO 31000:2009 certifications, respectively.

A summary of all significant findings by the audit department along with the follow-up actions undertaken thereafter is placed before the Audit Committee for review. The Audit Committee reviews the comprehensiveness and effectiveness of the report and provides valuable suggestions and keeps the Board of Directors informed about its major observations, from time to time.

8. Internal financial controls

The Company has in place adequate financial controls commensurate with its size, scale and complexity of its operations. The Company has in place policies and procedures required to properly and efficiently conduct its business, safeguard its assets, detect frauds and errors, maintain accuracy and completeness of accounting records and prepare financial records in a timely and reliable manner.

9. Subsidiary and Associate companies

A. Subsidiary Companies

Pursuant to Section 134 of the Companies Act 2013 and Rule 8(1) of the Companies (Accounts) Rules 2014, the report on performance and financial position of subsidiaries is included in the Consolidated Financial Statements of the Company. The Company has a policy for determining the materiality of a subsidiary, which is available at www.emamiltd.in/investor-info/pdf/Policy-for-Determining-Materiality-of-Subsidiaries. pdf As of March 31, 2019, your Company had the following subsidiary companies:

i) Emami Bangladesh Ltd., wholly-owned subsidiary of Emami Limited

ii) Emami International FZE, wholly-owned subsidiary of Emami Limited

iii) Emami Indo Lanka (Pvt.) Ltd., Sri Lanka a wholly-owned subsidiary of Emami Limited

iv) Emami Rus (LLC), Russia, 99.99% subsidiary of Emami International FZE

v) Emami Overseas FZE, UAE, wholly-owned subsidiary of Emami International FZE

vi) Pharma Derm S A E Co, Egypt, 90.60% subsidiary of Emami Overseas FZE

vii) Fravin Pty. Ltd., Australia, 85% subsidiary of Emami International FZE

viii) Greenlab Organics Ltd., Australia, a subsidiary of Fravin Pty. Ltd.

ix) Diamond Bio-tech Laboratories Pty. Ltd., Australia, a subsidiary of Fravin Pty. Ltd.

x) Abache Pty Ltd, Australia, a subsidiary of Diamond Bio-tech Laboratories Pty. Ltd.

xi) Fentus 113. GmbH, Germany, Wholly owned subsidiary of Emami International FZE

In compliance with IND-AS-110, your Company has prepared its consolidated financial statements, which forms part of this Annual Report. Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a separate statement containing the salient features of the subsidiary companies in the prescribed form (AOC#1) is a part of the consolidated financial statements. The accounts of the subsidiary companies will be available to any member seeking such information at any point of time. The financial statements of the Company along with the accounts of the subsidiaries will be available at the website of the Company, www.emamiltd.in, and kept open for inspection at the registered office of the Company.

Brief financial and operational details of the subsidiary companies are provided hereunder:

Emami Bangladesh Ltd.

Emami Bangladesh Ltd., a wholly-owned subsidiary of Emami Limited, was incorporated on November 25, 2004 under the Companies Act of Bangladesh. It is engaged in the manufacture, import and sale of cosmetics and ayurvedic medicines from its manufacturing unit in Dhaka. During the financial year ended March 31, 2019, the Company clocked revenues worth RS.11,136 lacs (previous year RS.8,884 lacs) and profit after tax of RS.2,021 lacs (previous year RS.1,265 lacs).

Emami International FZE

Emami International FZE, a wholly-owned subsidiary of Emami Limited, was incorporated on November 12, 2005 in the Hamriyah Free Zone, Sharjah, UAE and is governed by the rules and regulations laid down by the Hamriyah Free Zone Authority. It is engaged in the business of purchasing and selling cosmetics and ayurvedic medicines.

During the financial year ended March 31, 2019, the Company clocked revenues worth RS.16,873 lacs (previous year RS.17.430 lacs) and profit after tax of RS.(673) lacs [previous year RS.(316) lacs ].

Emami Indo Lanka (Pvt) Ltd.

Emami Indo Lanka (Pvt) Ltd., Sri Lanka, which was incorporated on 27th June 2017, is a wholly-owned subsidiary (WOS) of Emami Limited. With an objective of tapping the potential of the local market, it started manufacturing locally in FY 2017-18 through a contract manufacturer.

During the period ended March 31, 2019, the Company earned revenues of RS.752 lacs (previous year RS.402 lacs) and Profit after tax of RS.(59) lacs, (previous year RS.(35) lacs).

Emami (RUS) LLC

Emami (RUS) LLC, a subsidiary of Emami International FZE, UAE, was incorporated on 14th August, 2018 with an objective of trading of Perfumery products, Cosmetics products and Pharma products.

During the period ended March 31, 2019, the Company earned Nil revenues and Profit after tax of RS.(12) Lacs.

Emami Overseas FZE

Emami Overseas FZE, a wholly-owned subsidiary of Emami International FZE, was incorporated on November 25, 2010. It is the holding company of Pharma Derm S. A. E. Co. in Egypt.

During the financial year ended March 31, 2019, the Company recorded revenues worth Nil (previous year: nil) and profit after tax of RS.(8) lacs (previous year profit of RS.804 lacs).

Pharma Derm S. A. E. Co.

Pharma Derm S. A. E. Co. is a 90.60% subsidiary of Emami Overseas FZE and was registered on September 6, 1998 under the relevant Companies Act of Egypt.

The Company was acquired to manufacture pharmaceuticals, disinfectants, cosmetics, chemicals, among others in FY 2010-11. The Company has not yet commenced operations due to volatile political and economic conditions in Egypt.

During the financial year ended March 31, 2019, the Company recorded revenues worth RS.(67) lacs (previous year RS.326 lacs) and profit after tax of RS.(331) lacs (previous year RS.(529) lacs).

Fravin Pty. Ltd.

Fravin Pty. Ltd. (Australia based subsidiary) is an 85%of Emami International FZE. It was acquired in FY 2014-15. It had major strength in research, development and manufacture of natural and organic personal care products. Fravin is a recipient of various prestigious awards in recognition of its qualitative excellence. Fravin, together with its group companies, manufactures a full range of hair care and skin care products certified by various certification bodies in Australia and United states such as the Australian Certified Organic and the United States Department of Agriculture, to name a few.

During the financial year ended March 31, 2019, the Company clocked revenues worth RS.53 lacs (previous year: RS.147 lacs) and a Profit after tax of RS.(246) lacs (previous year loss of RS.(199) lacs).

Greenlab Organics Limited

Greenlab Organics Limited UK, a UK-based subsidiary of Fravin Pty. Ltd., is involved in registration of brands and related activities. However, it is yet to commence operations.

Diamond Bio Tech Laboratories Pty. Ltd.

Diamond Bio Tech Laboratories Pty. Ltd., an Australia-based subsidiary of Fravin, is involved in the export of organic products.

During the financial year ended March 31, 2019, the Company recorded Nil revenues (previous year: nil) and a Profit after tax of RS.(4) lacs (previous year RS.(15) lacs).

Abache Pty. Ltd.

Abache Pty. Ltd., a subsidiary of Diamond Bio-Tech Laboratories Pty. Ltd., Abache has several personal care products in its portfolio. Abache was awarded the first place in the ‘Green Formulations’ category at the Sustainable Beauty Awards 2014 held in Paris.

During the financial year ended March 31, 2019, the Company earned Nil revenues (previous year Nil) and Profit after tax of RS.(8) lacs (previous year RS.(17) lacs).

Fentus 113. GmbH, Germany

Fentus 113 GmbH. Germany a wholly owned subsidiary (WOS) of Emami International FZE, UAE, was incorporated on 3rd Jan, 2019.

The Company is in the process of completing the licence & regulatory requirements before commencing the business.

B. Associate companies

Helios Life Style Private Limited

Helios is engaged in online male grooming sector and during the financial year ended March 31, 2019, earned revenues worth RS.2020 lacs (previous year RS.1201 lacs) and a profit after tax of RS.(707) lacs (previous year RS.(544) lacs).

Brillare Science Private Limited

The Company made strategic investment by way of subscribing Compulsory Convertible Preference shares (CCPS) in Brillare, which is engaged in manufacturing of professional saloon products. The said CCPS have been converted into equity shares and the company subsequently holds 34.70% of voting rights of Brillare which has become Associate of the company with effect from 22nd April 2019.

10. Deposits

The Company has not accepted any public deposits covered under Chapter V of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

11. Non-convertible debentures

The Company did not issue any non-convertible debentures during the financial year 2018-19.

12. Consolidated financial statements

The consolidated financial statements, prepared in accordance with IND-AS 110 consolidated financial statements, form part of this Report. The net worth of the consolidated entity as on March 31, 2019, stood at RS.207,606 lacs as against RS.201,361 lacs at the end of the previous year.

13. Secretarial Standards of ICSI

The Ministry of Corporate Affairs has mandated SS-1 and SS-2 with respect to board meetings and general meetings respectively. The Company has ensured compliance with the same.

14. Auditors and Auditor Report Statutory auditor

Your Company’s Auditors, M/s. S. R. Batliboi & Co. LLP, Chartered Accountants (firm registration number 301003E/E300005), were appointed as the Statutory Auditors from the conclusion of the 34th Annual General Meeting till the conclusion of the 39th Annual General Meeting of the Company.

The Auditors report to the shareholders on the financial statement of the Company for the financial year ended on 31st March 2019 does not contain any qualification, reservation or adverse remark or disclaimer.

Secretarial auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed M/s MKB & Associates, Practicing Company Secretaries, as its secretarial auditor to undertake the secretarial audit for FY2018-19. The secretarial audit report certified by the secretarial auditors, in the specified form MR-3 is annexed herewith and forms part of this report (Annexure I). The secretarial audit report does not contain any qualification, reservation or adverse remarks. Furthermore, the Secretarial Auditor M/s MKB & Associates, Practicing Company Secretaries, have also certified the compliance as per the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 and same has been intimated to the stock exchanges within the stipulated time.

Cost auditor

Your Company’s cost accountants, M/s. V.K. Jain & Co. (firm registration number 00049), were appointed by the Board of Directors at its meeting held on May 3, 2018 to audit the cost accounting records, as may be applicable to the Company for FY2018-19, and their remuneration was approved during the previous Annual General Meeting.

M/s V. K. Jain & Co, were reappointed as cost auditors for FY2019-20 and the remuneration payable to the cost auditors is required to be placed before the members in the ensuing Annual General Meeting for their ratification. Accordingly, a resolution seeking members’ ratification for the remuneration payable to them is included in the notice convening the Annual General Meeting. The Board recommends the same for approval by members at the ensuing Annual General Meeting.

15. Conservation energy, technology and foreign exchange outgo

The particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo in accordance with the provisions of Section 134(3) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts of Companies) Rules, 2014, is annexed herewith and forms part of this Report. (Annexure II)

16. Extract of Annual Return

The extracts of the annual return in form MGT 9 in terms of provisions of Section 92, of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, is attached herewith and form part of this report,as (Annexure-III) and the same can be accessed from the website of the Company by clicking on the following link http://www.emamiltd.in

17. Corporate social responsibility

Corporate social responsibility forms an integral part of your Company’s business activities. Your Company is a responsible corporate citizen, supporting activities which benefit the society as a whole and has fulfilled its CSR obligations for FY 2018-19. The Company carries out its corporate social responsibility initiatives not just in letter but also in spirit and thus has touched thousands of lives across India.

In compliance with Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has adopted a CSR policy, which is available at: http://www.emamiltd.in/holistic-living/pdf/ CorporateSocialResponsibilityPolicyofEmamiLtd.pdf

The Annual Report on CSR expenditures for the FY 2018-19 is annexed herewith and forms part of this report (Annexure IV).

18. Directors and key managerial personnels

In accordance with provisions of Section 152 of the Companies Act, 2013 read with Rules made thereunder, Shri A.V Agarwal (DIN 00149717), Shri R.S. Goenka (DIN 00152880) and Shri. S.K. Goenka (DIN 00149916) are liable to retire by rotation at the 36th Annual General Meeting and being eligible, offer themselves for reappointment.

The Board of Directors reappointed Shri Prashant Goenka, as Whole-time Director of the Company upon completion of his present term on 19th January 2019 for a period of 5 (five) years w.e.f 20th January 2019 subject to approval of the members in the ensuing Annual General Meeting.

Late Shri M. D. Mallya, ceased to be Director effective from 25th November 2018 due to his sudden demise. The Board puts on record its appreciation for the valuable guidance provided by him during his tenure as an Independent Director of the Company.

Shri Debabrata Sarkar was appointed as an Additional-cum-Independent Director of the Company with effect from February 21, 2019 for a term of 5 (five) years, by the Board of Directors subject to the approval of shareholders at the 36th Annual General Meeting of the Company.

The Company has received declarations from all the Independent Directors that they meet the criteria of independence as prescribed in the Companies Act, 2013 and SEBI Listing Regulations, 2015.

None of the Directors of the Company is disqualified for being appointed as Director, as specified under Section 164(2) of the Companies Act, 2013 and Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014.

A brief resume of the Directors proposed to be reappointed, is provided in the Notice of the Annual General Meeting forming part of the Annual report.

19. Business responsibility report

As required under Regulation 34 of SEBI Listing Regulations 2015, the Business Responsibility Report of the Company for the financial year ended March 31, 2019 is attached as part of the Annual Report.

20. Dividend Distribution Policy

The Company has formulated a Dividend Distribution Policy, which is disclosed in (Annexure V). The same is also displayed on the website of the Company, http://www.emamiltd. in/investor-info/pdf/Dividend_Distribution_Policy_ Emamiltd.pdf

21. Board induction, training and familiarization programme for Independent Directors

Prior to the appointment of an Independent Director, the Company sends a formal invitation along with a detailed note on the profile of the Company, the Board structure and other relevant information. At the time of appointment of the Director, a formal letter of appointment which inter alia explains the role, functions, and responsibilities expected of him/her as a Director of the Company is given. The role, functions, and responsibilities of the Director are also explained in detail and informed about the various compliances required from him/her as a Director under the various provisions of the Companies Act 2013, SEBI Listing Regulations, 2015, SEBI (Prohibition of Insider Trading) Regulations, 2015, the Code of Conduct of the Company and other relevant regulations.

A Director, upon appointment, is formally inducted to the Board. In order to familiarise the Independent Directors about the various business drivers, they are updated through presentations at Board Meetings about the performance and financials of the Company. They are also provided presentations about the business and operations of the Company from time to time.

The Directors are also updated on the changes in relevant corporate laws relating to their roles and responsibilities as Directors. The details of the Board familiarisation programme for the Independent Directors can be accessed at: http //www.emamiltd in/investor-info/pdf/EmamiLtdFamiliarizationProgramme ForIndependentDirectors.pdf

22. Performance evaluation

Pursuant to the provisions of Section 178 of the Companies Act, 2013 read with rules made thereunder, Regulation 17(10) of the SEBI Listing Regulations and the Guidance note on Board evaluation issued by SEBI vide its circular dated January 5, 2017, the Company has framed a policy for evaluating the annual performance of its Directors, Chairman, the Board as a whole, and the various Board Committees. The Nomination and Remuneration Committee of the Company has laid down parameters for performance evaluation in the policy.

The Board also evaluated the performance of each of the Directors, the Chairman, the Board as whole and all committees of the Board. The process of evaluation is carried out in accordance with the Board Evaluation Policy of the Company and as per the criteria laid down by the NR Committee. The Board members were satisfied with evaluation process.

23. Number of meetings of the Board

The Board of Directors held four meetings during the year on 3rd May 2018, 1st August 2018, 30th October 2018 and 31st January 2019. The maximum gap between any two meetings was less than 120 days, as stipulated under SEBI’s Listing Requirements, 2015. The details of Board Meetings held and attendance of Directors are provided in the Report on Corporate Governance forming part of this report.

24. Committees of the Board

The Company has constituted various Board-level committees in accordance with the requirements of Companies Act, 2013 and SEBI (LODR) Regulations, 2015. The Board has the following committees as under:

I. Audit Committee

II. Nomination and Remuneration Committee

III. Share Transfer Committee

IV. Stakeholders Relationship Committee

V. Finance Committee

VI. Corporate Governance Committee

VII. Corporate Social Responsibility Committee

VIII. Risk Management Committee

Details of all the above Committees along with composition and meetings held during the year under review are provided in the Report on Corporate Governance forming part of this Report.

25. Separate meeting of Independent Directors

Details of the separate meeting of the Independent Directors held and attendance of Independent Directors therein are provided in the Report on Corporate Governance forming part of this Report.

26. Whistleblower policy

The Company has established an effective Whistleblower policy (Vigil mechanism) and procedures for its Directors and employees. The details of the same are provided in the Report on Corporate Governance, which forms part of this Report. The policy on vigil mechanism may be accessed on the Company’s website at: http://www.emamiltd.in/ investor-info/pdf/WhistleBlowerPolicyEmami.pdf

27. Remuneration policy

The remuneration policy of the Company aims to attract, retain and motivate qualified people at the executive and Board levels. The remuneration policy seeks to employ people who not only fulfil the eligibility criteria but also have the attributes needed to fit into the corporate culture of the Company. The remuneration policy seeks to provide well-balanced and performance-related compensation packages, taking into account industry standards and relevant regulations.

The remuneration policy ensures that the remuneration to the directors, key managerial personnel and the senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals. The remuneration policy is consistent with the ‘pay-for-performance’ principle.

The Company’s policy on remuneration and appointment of Board members as mentioned in the Remuneration Policy have been disclosed on the Company’s website: http://www.emamiltd.in/ investor-info/pdf/Remuneration-Policy-Emami-Ltd.pdf and annexed the Directors’ Report which forms part of the Annual Report (Annexure VI)

28. Related party transactions

All related party transactions entered into by the Company during the financial year were conducted at an arm’s length basis. No material contracts or arrangements with related parties were entered into during the year under review. During the year, the Audit Committee had granted an omnibus approval for transactions, which were repetitive in nature for one financial year. All such omnibus approvals were reviewed by the Audit Committee on a quarterly basis. All related party transactions were placed in the meetings of Audit Committee and the Board of Directors for the necessary review and approval. Your Company’s policy for transactions with the related party was reviewed by the Audit Committee and approved by the Board, can be accessed at: http://www.emamiltd.in/investor-info/pdf/PolicyforTransactionswithRelatedParties. pdf Accordingly, disclosure of Related party Transaction as required under Section 134(3)(h) of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in form AOC-2 is not applicable.

The Company has developed and adopted relevant SOPs for the purpose of monitoring and controlling such transactions.

29. Particulars of loans, guarantees and investments

Particulars of loans, guarantees and investments made by the Company pursuant to Section 186 of the Companies Act 2013 are given in the notes to financial statements. During the year, the Company has granted loans, provided guarantee and made investment in its wholly owned subsidiary (ies) for their business purpose. The Company has also subscribed to securities of other bodies corporate as strategic investors and the said bodies corporate have issued the said securities for their business purposes. Details of loans granted, guarantee provided and investment made are provided in the notes to the accounts.

30. Particulars of employees and managerial remuneration

The information of employees and managerial remuneration, as required under Section 197(2) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, and other details are annexed herewith and forms part of this Report. (Annexure VII)

31. Management discussion and analysis and Corporate Governance Report

As per Regulation 34(3) read with Schedule V of the SEBI Listing Regulations 2015, Management Discussion Analysis, Corporate Governance Practices followed by your Company, together with a certificate from the Company’s auditors confirming compliance of conditions of Corporate Governance are an integral part of this Report.

32. Risk management system

The Company has developed and implemented a risk management policy which is periodically reviewed by the management. The system also complies with the requirements laid down under the ISO 31000: 2009 norms.

In accordance with Regulation 21 of SEBI Listing Regulations, 2015, the enterprise risk management policy of the Company, which has been duly approved by the Board, is reviewed by the Risk Management Committee, Audit Committee and the Board on a quarterly basis. The risk management process encompasses practices relating to identification, assessment, monitoring and mitigation of various risks to key business objectives. Besides exploiting the business opportunities, the risk management process seeks to minimise adverse impacts of risk to key business objectives.

33. Prevention of sexual harassment at workplace

Your Company is committed to provide a work environment which ensures that every woman employee is treated with dignity, respect and equality. There is zero-tolerance towards sexual harassment and any act of sexual harassment invites serious disciplinary action.

As per the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH), your Company has established a policy to prevent sexual harassment of its women employees. The policy allows every employee to freely report any such act with the assurance of prompt action to be taken thereon. The policy lays down severe punishment for any such act. The Company has complied with provisions relating to the constitution of internal complaints committee under POSH. During the year under review, the company has received two complaints which were redressed as per policy and law.

Several initiatives were undertaken during the year to demonstrate the Company’s zero tolerance philosophy against discrimination and sexual harassment including awareness programme, which included creation and dissemination of comprehensive and easy-to-understand training and communication material.

34. Details of significant and material orders passed by regulators/courts/tribunals

There was no instance of any material order passed by any regulators/courts/tribunals impacting the going concern status of the Company.

35. Directors’ Responsibility Statement

Pursuant to the requirements laid down under Section 134(5) of the Companies Act, 2013, with respect to the Directors’ Responsibility Statement, the Directors confirm that:

I. In the preparation of the annual accounts for the year ended March 31, 2019, the applicable accounting standards have been followed and no material departures have been made.

II. The Directors have selected such accounting policies and applied them consistently and made judgments 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 on March 31, 2019, and of the profit 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 Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

IV. The annual accounts were prepared on a going concern basis.

V. The Directors have laid down effective internal financial controls to consistently monitor the affairs of the Company and ensured that such internal financial controls were adequate and operating effectively.

VI. The Directors have devised a proper system to ensure compliance with the provisions of all applicable laws and that the same are adequate and operating effectively.

36. Acknowledgements

Your Directors would like to acknowledge and place on record their sincere appreciation of all stakeholders - shareholders, bankers, dealers, vendors and other business partners for the unstinted support received from them during the year under review. Your Directors recognise and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to its progress.

For and on behalf of the Board

Place: Kolkata R.S. Agarwal

Date: May 27, 2019 Chairman

Director’s Report