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Emmsons International Ltd.

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Annual Report

For Year :
2015 2014 2013 2012 2011 2010 2009 2008 2007

Director’s Report

Dear Members, The Directors have pleasure in presenting this 22nd Annual Report on the business and operations of the Company together with Audited Financial Statement for the financial year ended March 31, 2015. FINANCIAL HIGHLIGHTS The highlights of financial results of the Company for the Financial Years 2014-15 and 2013-14 are as under: 2014-2015 2013-2014 Particulars Amount US$ in Amount US$ in (Rs. in Lacs) Million (Rs. in Lacs) Million Gross Sales and Income 76093.52 121.77 152554.06 254.72 Profit before interest, Depreciation, Exceptional Item and taxation 932.65 1.49 7931.59 13.24 Interest and financial Charges 8758.58 14.02 7498.67 12.52 Depreciation 113.63 0.18 79.96 0.13 Profit before taxation and exceptional item (7939.56) (12.71) 352.96 0.59 Exceptional Item (34.11) (0.05) (30.46) (0.05) Provisions of Taxation - - 155 0.25 Provision for deferred taxation/(tax effect of timing differences during year) (14.95) (0.02) (12.22) (0.02) Profit after tax (7890.49) (12.62) 240.64 0.40 DIVIDEND In view of the Loss the Board has not recommended any dividend payment for the financial year 2014-15. FINANCIAL AND OPERATIONAL PERFORMANCE During the financial year 2014-15, the Company has on a standalone basis, registered total revenues of Rs. 761 Crores as compared to Rs. 1526 Crores in the previous year, reflecting a substantial decline. The Company has incurred a Net Loss of Rs. 78.90 Crores as compared to the Net Profit of Rs. 2.40 Crores in the previous year. Your Company has been experienced difficulties on account of Delay in collection of receivables from overseas customers, Slowdown in the global commodities markets, interest and other charges by banks, the Cumulative impact of all the above factors on the Company has been harsh and the Company has suffered badly. FIXED DEPOSITS Your Company has not accepted any deposits in terms of Chapter V of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014, during the year under review. PERFORMANCE OF SUBSIDIARY COMPANIES, OVERSEAS The Company had till the end of the financial year has three Subsidiary Companies, overseas namely: - Emmsons Gulf DMCC, - Emmsons Grains Limited - Emmsons SA. Emmsons Gulf DMCC: In line with slump in the global commodities markets, the business of the Company''s subsidiary Emmsons Gulf DMCC was also affected adversely. During the year, under review it has posted Total Revenue of Rs. 71,003.11 Lac as compared to Rs.1,82,962.63 Lacs in previous year. The Company has incurred a loss of Rs. 7616.21 Lacs as compared to Profit of Rs. 465.21 Lacs in the previous year Emmsons Grains Limited, Cyprus: Emmsons Grains Limited (EGL), Cyprus is holding farming business through subsidiaries Companies operating in Ukraine. The fall in the prices of commodities also affected the performance of farming operations. The Company has incurred a loss of Rs. 441.44 Lacs as compared to loss of Rs. 463.97 Lacs in the previous year. Emmsons S.A: The operations of Emmsons S.A, has slowed down, however your Management constantly been trying to re-establish the operations of the Company. The Company has incurred loss of Rs. 9.80 Lacs as compared to loss of Rs. 20.07 Lacs in the previous year. In accordance with the Companies Act, 2013, the Audited Consolidated Financial Statement is provided in the Annual Report. MEETINGS OF BOARD OF DIRECTORS Eleven meetings of the Board of Directors were held during the year. For further details, please refer report on Corporate Governance forming part of Annual Report. DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the Articles of Association of the Company, Mr. Rajesh Monga retires by rotation at this Annual General Meeting and is eligible for re-appointment The Nomination and Remuneration Committee in its meeting held on 14.08.2015 and Board of Directors in its meeting held on 14.08.2015 passed the resolution, subject to the approval of shareholders for re-appointment of Mr. Anil Monga as Managing Director of the Company for a further period of three years effective from 1st September, 2015 without remuneration. Mr. Shivaz Monga and Mr. Vijay Kumar Kakkar has resigned from the Directorship of the Company. The Board of Director in their meeting held on 30th October, 2015, took note of the same. Pursuant to the provisions of Section 161(1) of the Act and the Articles of Association of the Company, the Board of Directors of the Company has appointed, Ms Soni Benydin Jaiprakash, as an Non Executive-Independent Director (Additional Director) of the Company with effect from 14th February, 2015. In terms of the provisions of Section 161(1) of the Act, Ms. Soni Benydin Jaiprakash would hold office up to the date of the ensuing Annual General Meeting. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as mentioned under Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchange. The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other Individual Directors which include criteria for performance evaluation of the Executive Directors and non Executive Directors. The details of the programmes for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put on the website of the Company http://www.emmsons.com/files/familiarization-program.pdf The following policies of the Company are attached herewith marked as Annexure 1: a) Remuneration Policy for Directors, Key Managerial Personnel and other employees b) Criteria for determining qualification, positive attributes and independence of a Director PARTICULARS OF LOANS GIVEN, INVESTMENT MADE, GUARANTEE GIVEN AND SECURITIES PROVIDED The particulars of the Loans given, investment made, guarantee given, securities provided is mentioned in Standalone financial statement (please refer Note 13, 15 and 34 of standalone financial statement) CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES All the contract(s)/arrangement(s)/transaction(s) entered by the Company during the financial year with related parties were in the Ordinary course of business and on arm''s length basis. The particulars of contract/arrangement entered into by the Company with Related Parties at Arms length transactions under third proviso thereto is attached herewith marked as Annexure-2. The Policy on Related Party transactions may be accessed on the Company''s website at the link http://www.emmsons.com/files/ related-party-transaction-policy.pdf CORPORATE SOCIAL RESPONSIBILITY (CSR) The Corporate Social Responsibility Committee comprise of the following members: Mr. Vijay Kumar Kakkar Mr. Anil Monga Mr. Rajesh Monga Mr. Shivaz Monga The Corporate Social Responsibility Committee has formulated and recommended to the Board , a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be assessed on the Company''s website at the link http://www.emmsons.com/files/corporate-social-responsibility- policy.pdf The Company has identified areas of engagement which are as under: - To collaborate with communities and institutions to contribute to eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation and make available safe drinking water - To contribute and promote education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects. - To contribute and promoting gender equality, empowering women, setting up homes and hostels for women and orphans, setting up old age homes, day care centre''s and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups. - To sustain and continuously improve standards of Environment sustainability, Ecological Balance, Protection of Flora and Fauna, conservation of Natural Resources and maintaining quality of soil, air and water. - To contribute for the protection of national heritage, art and culture including restoration of building and sites of historical importance, setting up public libraries, promotion and development of traditional arts and handicrafts. - To contribute to the Prime Minister''s National Relief Fund or any other fund set up by the Central Government for socio - economic development and relief and welfare of schedules castes, the scheduled tribes, other backward classes and women. - To contribute and encourage the training to promote rural sports, nationally recognized sports, Paralympic sports and Olympic Sports. - To contribute and measures for the benefit of armed forces veterans, war widows and their dependents. - Contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government. The Company would also undertake other need based initiatives in compliance with Schedule VII of the Companies Act, 2013. The Company is required to spend every year atleast, 2% of the average net profit made during the three immediately preceding financial years in pursuance of its Corporate Social Responsibility Policy. During the year under review, the Company has incurred Net loss of Rs. 78.90 Crores and The Board of Directors is of view that it is not viable to spent 2% of the average net profit made during the three immediately preceding financial years in the current financial year ending on 31st March, 2015. However, during the year under review, the Company has spent Rs. 3.42 Lacs on CSR activities. The Annual Report on CSR activities is annexed herewith marked as Annexure-3 EXTENSION OF TIME FOR HOLDING ANNUAL GENERAL MEETING Your Company has the following subsidiaries, overseas:- - Emmsons SA, in Switzerland - Emmsons Grains Limited, in Cyprus - Emmsons Gulf DMCC, in UAE. Emmsons Gulf DMCC, is a Company incorporated in UAE and had its subsidiaries, inter-alia Emmsons Asia Pte Ltd, operating in Singapore and PT Star Emmsons operating in Indonesia. The Financial Data of Emmsons Asia Pte Ltd maintained in accounting software had damaged consequently the Auditing of the Financial Data of the Company delayed for financial year ended 31st March, 2015. Pursuant to the provisions of section 129(3) of the Companies Act, 2013, where a Company has one or more subsidiaries, it shall, in addition to financial statement, prepare a consolidated Financial Statement of the Company and of all the subsidiaries in the same form and manner that of its own which shall also be laid before the Annual General Meeting of the Company. On account of delay in receipt of the Audited Financial Statement of the subsidiary, Your Company has not been able to finalize the consolidated financial statement. Accordingly, The Board of Directors of the Company in its meeting held on 28th May, 2015 has approved the Audited Financial statement alongwith Auditors'' Report for the financial year ended on 31st March, 2015 on Standalone Basis. Your Company made an application with Registrar of Companies, NCT of Delhi & Haryana seeking extension of time for holding Annual General Meeting, subsequently the Registrar of Companies has granted two months time upto 30th November, 2015 for conducting Annual General Meeting. AUDIT COMMITTEE The Audit Committee comprises Independent Directors namely Mr. Satish Chandra Gupta (Chairman), Mr. Vijay Kumar Kakkar (Member) and Mr. Viresh Shankar Mathur(Member). All recommendation made by the Audit Committee were accepted by the Board. AUDITOR''S REPORT The Auditors'' observations are self explanatory and do not call for any further comments except on the consolidated Financial Statement of the Company which is related with Emmsons Gulf, a subsidiary company in Dubai. The Auditors of Emmsons Gulf DMCC has expressed qualified audit opinion which is as under: The Group trade receivables (note 11) and Advance to suppliers (note 12) include balances amounting to AED 98,483,991 (Rs. 1,674,631,631) and AED 20,953,350 (Rs. 356,292,859) respectively, which are overdue for more than 12 months. For the aforesaid balances, we have neither received independent balance confirmations nor we were able to satisfy ourselves on the recoverability of these amounts through audit procedures. The management has not made any allowances for doubtful receivables against these balances in the books of accounts: The Management justification on the above: In spite of delays in recovery of the receivables, the management continues to be confident of recovering the amount. Further, since the IFRS are not applicable to the Company in India, hence the qualification does not have any impact on the consolidated accounts. AUDITORS M/s. Suresh & Associates, Chartered Accountants, the Auditors of the Company retire at the ensuing Annual General Meeting and have expressed their willingness and eligibility to continue in the office, if re-appointed. They have confirmed their eligibility to the effect that their re-appointment, if made would be within the prescribed limits under the Companies Act, 2013 and that they are not disqualified for re-appointment. Members are requested to re-appoint them and authorize the Board to fix their remuneration and pay out of pocket expenses. SECRETARIAL AUDITOR The Board has appointed M/s. Saurabh Agarwal & Co., Practicing Company Secretaries, New Delhi to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Auditor Report for the financial year ended March 31, 2015 is annexed herewith marked as Annexure-4 to this Report. VIGIL MECHANSIM The Vigil Mechanism of the Company, which also incorporates, a Whistle Blower Policy in terms of the Listing Agreement entered with Stock Exchange. The Policy on Vigil Mechanism may be accessed on the Company''s website at the link http://www.emmsons.com/ files/vigil-mechanism.pdf EXTRACT OF ANNUAL RETURN In accordance with the provisions of section 134 of the Companies Act, 2013 an extract of Annual Return of the Company in the prescribed format is annexed herewith as Annexure- 5 to this Report. CORPORATE GOVERNANCE We believe that it is important for us to manage our business affairs in the most fair and transparent manner with a firm commitment to our values. Your Company is committed to maintain the highest standards of Corporate Governance. A Separate section on Corporate Governance together with a certificate from the Practicing Company Secretary confirming the compliance of conditions of Corporate Governance as stipulated in Clause 49 of the listing agreement with the Stock Exchange is annexed hereto. The requisite Certificate from the Practicing Company Secretary of the Company confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 of the Listing Agreement is attached to this Report. MANAGEMENT DISCUSSION AND ANALYSIS REPORT A detailed Management Discussion and Analysis Report as required under Clause 49 of the Listing Agreement with the Stock Exchange is annexed as Annexure-6 to this report. LISTING OF SECURITIES The Equity Shares of your Company are listed at Bombay Stock Exchange Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai. The scrip code of the Company for the Bombay Stock Exchange Limited is 532038. The Company has duly paid the listing fee to the aforesaid Stock Exchange for the financial Year 2015-16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Considering the nature of business of the Company, energy does not form a significant portion of the cost for the Company yet wherever possible and feasible, continues efforts are being put for conservation of energy and minimizing power cost. Keeping in view of the nature of business of the Company, no technology is being used. Details of Foreign Exchange used and earned is as follows: - Foreign Exchange Earning : Rs. 5,033,569,534 Foreign Exchange outgo : Rs. 169,516,399 STATEMENT OF PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURE In terms of the provisions of section 197 (12) of the Companies Act, 2013 read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) rules, 2014 information of the employees are provided as an Annexure-A. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided as an Annexure-A. DIRECTORS'' RESPONSINBILITY STATEMENT Your Directors state that:- a) In the preparation of the Annual Accounts, the applicable accounting standards have been followed and there are no material departure from the same; b) Appropriate accounting policies have been selected and applied them consistently and have 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 at the end of the financial year and of the profit or loss of the company for the period; c) Proper and sufficient care has been taken 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; and d) The Annual Accounts have been prepared on a going concern basis e) Proper internal financial controls were followed by the Company and that such internal financial control are adequate and are operating effectively and; f) Proper systems are devised to ensure compliance with the provisions of all applicable laws and that systems are adequate and operating effectively. ACKNOWLEDGEMENT Your Directors wish to place on record their appreciation for the co-operation extended to the Company by Government, Commercial Banks, Business Associates, Shareholders, Customers and Executives, Officers and staff at all level. For and on behalf of the Board Sd/- Sd/- Date : 30.10.2015 (ANIL MONGA) (RAJESH MONGA) Place : New Delhi Managing Director Whole Time Director (DIN : 00249410) (DIN : 00249642)

Director’s Report