Emmsons International Limited
Your Directors have pleasure in presenting this 22nd Annual Report on the business andoperations of the Company together with Audited Financial Statement for the financial yearended March 31 2015.
The highlights of financial results of the Company for the Financial Years 2014-15 and2013-14 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 |
In view of the Loss the Board has not recommended any dividend payment for thefinancial year 2014-15.
FINANCIALAND OPERATIONAL PERFORMANCE
During the financial year 2014-15 the Company has on a standalone basis registeredtotal revenues of Rs. 761 Crores as compared to Rs. 1526 Crores in the previous yearreflecting a substantial decline. The Company has incurred a Net Loss of Rs. 78.90 Croresas 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 ofreceivables from overseas customers Slowdown in the global commodities markets interestand other charges by banks the Cumulative impact of all the above factors on the Companyhas been harsh and the Company has suffered badly.
Your Company has not accepted any deposits in terms of Chapter V of the Companies Act2013 read with the Companies (Acceptance of Deposit) Rules 2014 during the year underreview.
PERFORMANCE OF SUBSIDIARY COMPANIES OVERSEAS
The Company had till the end of the financial year has three Subsidiary Companiesoverseas namely:
Emmsons Gulf DMCC
Emmsons Grains Limited
Emmsons Gulf DMCC:
In line with slump in the global commodities markets the business of theCompanys subsidiary Emmsons Gulf DMCC was also affected adversely. During the yearunder review it has posted Total Revenue of Rs. 71003.11 Lac as compared toRs.182962.63 Lacs in previous year. The Company has incurred a loss of Rs. 7616.21 Lacsas 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 subsidiariesCompanies operating in Ukraine. The fall in the prices of commodities also affected theperformance of farming operations. The Company has incurred a loss of Rs. 441.44 Lacs ascompared to loss of Rs. 463.97 Lacs in the previous year.
The operations of Emmsons S.A has slowed down however your Management constantly beentrying 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 FinancialStatement is provided in the Annual Report.
MEETINGS OF BOARD OF DIRECTORS
Eleven meetings of the Board of Directors were held during the year. For furtherdetails 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 retiresby 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 Boardof Directors in its meeting held on 14.08.2015 passed the resolution subject to theapproval of shareholders for re-appointment of Mr. Anil Monga as Managing Director of theCompany for a further period of three years effective from 1st September 2015 withoutremuneration.
Mr. Shivaz Monga and Mr. Vijay Kumar Kakkar has resigned from the Directorship of theCompany. The Board of Director in their meeting held on 30th October 2015 took note ofthe same.
Pursuant to the provisions of Section 161(1) of the Act and the Articles of Associationof the Company the Board of Directors of the Company has appointed Ms Soni BenydinJaiprakash as an Non Executive-Independent Director (Additional Director) of the Companywith effect from 14th February 2015. In terms of the provisions of Section 161(1) of theAct Ms. Soni Benydin Jaiprakash would hold office up to the date of the ensuing AnnualGeneral Meeting.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as mentioned under Companies Act2013 and Clause 49 of the Listing Agreement with the Stock Exchange.
The Company has devised a Policy for performance evaluation of Independent DirectorsBoard Committees and other Individual Directors which include criteria for performanceevaluation of the Executive Directors and non Executive Directors.
The details of the programmes for familiarization of Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company and related matters are put onthe 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 securitiesprovided is mentioned in Standalone financial statement (please refer Note 13 15 and 34of standalone financial statement)
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All the contract(s)/arrangement(s)/transaction(s) entered by the Company during thefinancial year with related parties were in the Ordinary course of business and on arm'slength basis.
The particulars of contract/arrangement entered into by the Company with RelatedParties at Arms length transactions under third proviso thereto is attached herewithmarked as Annexure-2.
The Policy on Related Party transactions may be accessed on the Company's website atthe 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 theBoard a Corporate Social Responsibility Policy (CSR Policy) indicating the activities tobe undertaken by the Company which has been approved by the Board.
The CSR Policy may be assessed on the Company's website at the linkhttp://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 eradicatinghunger poverty and malnutrition promoting preventive health care and sanitation and makeavailable safe drinking water
To contribute and promote education including special education and employmentenhancing vocation skills especially among children women elderly and the differentlyabled and livelihood enhancement projects.
To contribute and promoting gender equality empowering women setting up homesand hostels for women and orphans setting up old age homes day care centre's and suchother facilities for senior citizens and measures for reducing inequalities faced bysocially and economically backward groups.
To sustain and continuously improve standards of Environment sustainabilityEcological Balance Protection of Flora and Fauna conservation of Natural Resources andmaintaining quality of soil air and water.
To contribute for the protection of national heritage art and culture includingrestoration of building and sites of historical importance setting up public librariespromotion and development of traditional arts and handicrafts.
To contribute to the Prime Minister's National Relief Fund or any other fund setup by the Central Government for socio -economic development and relief and welfare ofschedules castes the scheduled tribes other backward classes and women.
To contribute and encourage the training to promote rural sports nationallyrecognized sports Paralympic sports and Olympic Sports.
To contribute and measures for the benefit of armed forces veterans war widowsand their dependents.
Contributions or funds provided to technology incubators located within academicinstitutions which are approved by the Central Government.
The Company would also undertake other need based initiatives in compliance withSchedule VII of the Companies Act 2013.
The Company is required to spend every year atleast 2% of the average net profit madeduring the three immediately preceding financial years in pursuance of its CorporateSocial Responsibility Policy. During the year under review the Company has incurred Netloss of Rs. 78.90 Crores and The Board of Directors is of view that it is not viable tospent 2% of the average net profit made during the three immediately preceding financialyears in the current financial year ending on 31st March 2015. However during the yearunder 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 subsidiariesinter-alia Emmsons Asia Pte Ltd operating in Singapore and PT Star Emmsons operating inIndonesia.
The Financial Data of Emmsons Asia Pte Ltd maintained in accounting software haddamaged consequently the Auditing of the Financial Data of the Company delayed forfinancial year ended 31st March 2015.
Pursuant to the provisions of section 129(3) of the Companies Act 2013 where aCompany has one or more subsidiaries it shall in addition to financial statementprepare a consolidated Financial Statement of the Company and of all the subsidiaries inthe same form and manner that of its own which shall also be laid before the AnnualGeneral Meeting of the Company.
On account of delay in receipt of the Audited Financial Statement of the subsidiaryYour 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 2015has approved the Audited Financial statement alongwith Auditors' Report for the financialyear 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 theRegistrar of Companies has granted two months time upto 30th November 2015 for conductingAnnual General Meeting.
The Audit Committee comprises Independent Directors namely Mr. Satish Chandra Gupta(Chairman) Mr. Vijay Kumar Kakkar (Member) and Mr. Viresh Shankar Mathur(Member). Allrecommendation made by the Audit Committee were accepted by the Board.
The Auditors' observations are self explanatory and do not call for any furthercomments except on the consolidated Financial Statement of the Company which is relatedwith Emmsons Gulf a subsidiary company in Dubai.
The Auditors of Emmsons Gulf DMCC has expressed qualified audit opinion which is asunder:
The Group trade receivables (note 11) and Advance to suppliers (note 12) includebalances amounting to AED 98483991 (Rs. 1674631631) and AED 20953350 (Rs.356292859) respectively which are overdue for more than 12 months. For the aforesaidbalances we have neither received independent balance confirmations nor we were able tosatisfy ourselves on the recoverability of these amounts through audit procedures. Themanagement has not made any allowances for doubtful receivables against these balances inthe books of accounts:
The Management justification on the above:
In spite of delays in recovery of the receivables the management continues to beconfident of recovering the amount.
Further since the IFRS are not applicable to the Company in India hence thequalification does not have any impact on the consolidated accounts.
M/s. Suresh & Associates Chartered Accountants the Auditors of the Company retireat the ensuing Annual General Meeting and have expressed their willingness and eligibilityto continue in the office if re-appointed. They have confirmed their eligibility to theeffect that their re-appointment if made would be within the prescribed limits under theCompanies Act 2013 and that they are not disqualified for re-appointment.
Members are requested to re-appoint them and authorize the Board to fix theirremuneration and pay out of pocket expenses.
The Board has appointed M/s. Saurabh Agarwal & Co. Practicing Company SecretariesNew Delhi to conduct Secretarial Audit for the financial year 2014-15. The SecretarialAuditor Report for the financial year ended March 31 2015 is annexed herewith marked asAnnexure-4 to this Report.
The Vigil Mechanism of the Company which also incorporates a Whistle Blower Policy interms of the Listing Agreement entered with Stock Exchange. The Policy on Vigil Mechanismmay 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 extractof Annual Return of the Company in the prescribed format is annexed herewith as Annexure-5 to this Report.
We believe that it is important for us to manage our business affairs in the most fairand transparent manner with a firm commitment to our values. Your Company is committed tomaintain the highest standards of Corporate Governance. A Separate section on CorporateGovernance together with a certificate from the Practicing Company Secretary confirmingthe compliance of conditions of Corporate Governance as stipulated in Clause 49 of thelisting agreement with the Stock Exchange is annexed hereto.
The requisite Certificate from the Practicing Company Secretary of the Companyconfirming compliance with the conditions of Corporate Governance as stipulated under theaforesaid 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 theListing 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 PhirozeJeejeebhoy Towers Dalal Street Mumbai. The scrip code of the Company for the BombayStock Exchange Limited is 532038.
The Company has duly paid the listing fee to the aforesaid Stock Exchange for thefinancial 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 significantportion of the cost for the Company yet wherever possible and feasible continues effortsare being put for conservation of energy and minimizing power cost. Keeping in view of thenature of business of the Company no technology is being used.
Details of Foreign Exchange used and earned is as follows: -
Foreign Exchange Earning: Rs. 5033569534
Foreign Exchange outgo: Rs. 169516399
STATEMENT OF PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURE
In terms of the provisions of section 197 (12) of the Companies Act 2013 read withRule 5 of Companies (Appointment and Remuneration of Managerial Personnel) rules 2014information of the employees are provided as an Annexure-A.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5 of the Companies (Appointment andRemuneration 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 havebeen followed and there are no material departure from the same;
b) Appropriate accounting policies have been selected and applied them consistently andhave made judgements and estimates that are reasonable and prudent so as to give a trueand fair view of the state of affairs of the company at the end of the financial year andof the profit or loss of the company for the period;
c) Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of thecompany 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 suchinternal financial control are adequate and are operating effectively and;
f) Proper systems are devised to ensure compliance with the provisions of allapplicable laws and that systems are adequate and operating effectively.
Your Directors wish to place on record their appreciation for the co-operation extendedto the Company by Government Commercial Banks Business Associates ShareholdersCustomers 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) |