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Emmbi Industries Ltd.

BSE: 533161 Sector: Industrials
NSE: EMMBI ISIN Code: INE753K01015
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OPEN 101.00
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VOLUME 1005
52-Week high 125.00
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P/E 12.06
Mkt Cap.(Rs cr) 178
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OPEN 101.00
CLOSE 101.30
VOLUME 1005
52-Week high 125.00
52-Week low 68.10
P/E 12.06
Mkt Cap.(Rs cr) 178
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Emmbi Industries Ltd. (EMMBI) - Director Report

Company director report

[(Disclosure Under Section 134(3) Of The Companies Act 2013) {Read With Companies(Accounts) Rules 2014}]

To

The Members

Emmbi Industries Limited

Your Directors have pleasure in presenting the 26th Annual Report of your Company andthe Audited Accounts for the year ended 31st March 2020. Your Company has recorded yetanother year of good performance in its operations. The highlights of the results are setout below:

FINANCIAL RESULTS (INR MILLION)

Particulars Year ended on 31 March 2020 Year ended on 31 March 2019
Gross Sales 3331.40 3148.45
Less: Goods & Service Tax (292.07) (258.37)
Net Sales 3039.34 2890.08
Other income 1.61 1.37
Total revenue 3040.95 2891.45
Profit before Depreciation Finance Cost Exceptional item & Tax 375.80 411.22
Less: Depreciation 69.73 62.60
Profit before Finance Cost Exceptional item & Tax 306.06 348.62
Less: Finance Costs 119.42 109.58
Profit before Exceptional Items & Tax 186.64 239.04
Add: Exceptional Items 0.00 0.00
Profit before tax 186.64 239.04
Less: Tax expenses 40.37 61.14
Profit after Tax 146.27 177.90
Opening Balance of retained earnings 700.07 532.82
Profit available for appropriation 0.00 0.00
Balance available for appropriation 700.07 532.82
Adjustment relating to fixed assets 0.00 0.00
Adjustments with other Equity (1.51) 0.02
Less: Proposed Dividend / Paid (8.85) (8.85)
Less: Distribution tax on Dividend (1.82) (1.82)
Closing Balance of retained earnings 834.17 700.07

OPERATIONS

During the year under review your Company has achieved Revenue from Operations and theIncome aggregating to Rs. 3039.34 million as against Rs. 2890.08 million during theprevious year registering an increase of about 5.16 % over the previous year Profit afterproviding for taxes is Rs. 146.27 million as against Rs. 177.90 million during theprevious year.

There is no change in the nature of business of the Company. DIVIDEND

Your Directors are pleased to recommend a dividend of Re. 0.40 per equity share of theface value of Rs. 10/- each for the year ended on 31st March 2020 (Re. 0.50 per share forthe previous year) subject to the Members' approval. Dividend is subject to approval ofmembers at the ensuing Annual General Meeting (AGM) and shall be subject to deduction ofincome tax at source.

EXPORTS

Values of Exports during the year under review were Rs. 1439.38 million as against Rs.1469.88 million. Exports in the current financial year contributed to 43.21% in the grosssales. Company has expanded its presence in 57 countries which has resulted healthy growthin the territory of operation.

HUMAN RESOURCE DEVELOPMENT

Companies management team is focused on creating the best environment for theenthusiastic and dedicated workforce of Emmbi Many New Programs and Work patterns wereintroduced during the quarter to enhance the "experience of work " of theemployees For Example a "Suvidha Work from Home" policy was introduced for theWomen workforce which will offer them a privilege work From home situation on thedifficult days of mensuration cycle. This will help the to take care of their work fromthe comfort of their Home.

We continue to align the skill sets and capabilities of our current workforce and thetalent available in the market with the organization's ongoing and future business plansto maximize return on investment and secure continual success. We also emphasize thisthrough the blue colour in the company's logo as it reflects the loyalty and trust thatwe bring to our blue collared workforce.

Our continued self-development initiatives include relevant training programmes andseminars that addresses the needs of the workforce as well as the senior management.

The Kalyani Brigade- Example of Resilience and Innovation

What started as a seemingly small viral health issue quickly became a pandemic thatchallenged systems we had taken for granted for a long time. Migrant workers from acrossthe country moved home to be closer to their families - of course this is understandablebut it also meant that we were extremely short on the manpower that we are dependent onfor efficient production. To aid this our production team created the Kalyani Brigade - agroup of local women who would be trained as tailors so that we could deliver ourmaterial on time to customers across India and the world.

Since Garden Waste Bags are easy to make this was the first assignment given to them.Although they started off slow under the leadership of the Varna team they were able toreach 100% efficiency for Garden Waste Bags within one month. They are now moving on tobags that are tougher to create.

The Kalyani Brigade is a perfect example of resilience and innovation - that we can getthrough the toughest times if we think outside the box and implement our quirky ideas.

A special congratulations to the team at our Vama Unit for this incredible story ofsuccess during these tough times!

Operation Dronacharya

In order to Keep the Talent Pool of Workers intact we have started a Special SkillUpgradation Program Named "Operation Dronacharya" under this we have alreadyenrolled more than 150 individuals of which after training more than 50 are transferredto Main Manufacturing Lines. Operation Dronacharya will continue to run till the entireneed of Skilled manpower is taken care of.

QUALITY INITIATIVES

Man-Machine interphase will only produce the accuracy and skill required for being asuccessful company in the coming years. Specially Manufacturing sector is changing itsshape using modern technology tools like loT (Internet of things) and ML (MachineLearning). The whole new concept of industry 4.0 will be practiced and implemented inEmmbi during coming years of operation.

This will also augment the project of Lean manufacturing which was adopted during pastfew years to control and make best use of the Human Capital. We are successfullypracticing the same and the result can be seen in the in the increase of defect freeproduction in year after year. The efforts of Lean Enterprise Management have led tohigher productivity and increased profitability.

The above initiatives and our continuous adherence to strict quality standards hascreated tangible as well as intangible benefits to strengthen brand Emmbi.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICHHAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIALSTATEMENTS RELATE AND THE DATE OF THE REPORT

GLOBAL PANDEMIC - COVID-19

The outbreak of Coronavirus (COVID-19) pandemic globally and in India is causingsignificant disturbance and slowdown of economic activity.

COVID-19 is significantly impacting business operation of the companies by way ofinterruption in production supply chain disruption unavailability of personnel closure/ lockdown of production facilities etc. On March 24 2020 the Government of Indiaordered a nationwide lockdown for 21 days which further got extended till May 3 2020 toprevent community spread of COVID-19 in India resulting in significant reduction ineconomic activities.

Covid-19 has impacted the business operations of the company by way of interruption inproduction activities supply chain and availability of manpower. There were some majorimpact of Covid-19 as under following:

A) Steps taken by Emmbi to combat the COVID-19 & mitigate the problems.

We have broken the problem into Four Major Steps which will cover all the aspectsconnected to Capital and Financial resources Profitability Liquidity Ability to servicedebt.

1) Supply Side Management: We have ensured that for all the critical and non-criticalitems minimum 3 suppliers are maintained and a special focus is given in ensuringgeographic separation to all supply sources. This will spread the Risk of common failurefrom all the suppliers at the same time. We are also maintaining slightly higher stockthan our normal inventory level to avoid any stock out condition.

Kindly note that Emmbi continues its policy of non-speculative operations & wealways do the procurement of inputs on the receipt of confirmed sales order.

2) Demand Side Management: In order to maintain and create new demand we have startedvarious Short Term and Long Term Marketing and Sales initiatives Like reaching out toevery customer and explaining them about the various products of Emmbi which they are notpresently using.

We have started the training of the Sales team of the distributor using the videoconferencing in order to create better demand of our products.

3) Manufacturing Side Management: In the present time availability of the RightlySkilled Employees in one of the largest challenges.

Presently all other parameters of the Manufacturing are under control.

4) Liquidity Management: Company is in a very stable financial condition. In thepresent situation two of our banking partners have approved emergency COVID funding.

The Company was remarkably successful in maintaining its Debtor realization. There havebeen no delays in the realization from the exports. Also note that entire Export debts areinsured by party wise insurance by ECGC. Domestic Debtors are reflecting delay in payingas many of our buyer companies are situated in the Red Zones and the work pattern insluggish.

In order to fight the Challenges created by Covid-19 the Company have taken all theabove mentioned steps.

Other financial arrangements assets internal financial reporting and control supplychain demand for Company's products/services:

1. None of the assets of the Company have been impacted or impaired due to COVID-19.

2. The Company has efficient systems in place for Internal Financial reporting andcontrol. Even during the period of lockdown with work from home all reporting systemsworked seamlessly without any disruption.

3. The supply chain was the cause for concern during the initial lockdown periodhowever gradually this issue has been sorted out. Going forward the company is confidentof coming back to normal shortly.

4. The Company's export order book remains robust and demand for the Company's productshas not slackened leading us to believe that the company is far better placed to serve itsglobal customers.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

Management's Discussion and Analysis Report for the year under review as stipulatedunder the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") is presented in aseparate section forming part of the Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:

(i) that in the preparation of the annual accounts for the year ended March 31 2020the applicable accounting standards had been followed along with proper explanationrelating to material departures if any;

(ii) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at March 31 2020 and of the profit ofthe company for the year ended on that date;

(iii) the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;

(iv) the directors have prepared the annual accounts on a going concern basis;

(v) the directors further state that they have laid down internal financial controlsto be followed by the company and that such internal financial controls are adequate andare operating effectively and

(vi) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Retirement by rotation

In accordance with the provisions of the Companies Act 2013 Mrs. Rinku M. Appalwar(DIN 00171976) Director of the Company retires by rotation at the ensuing Annual GeneralMeeting of the Company and being eligible offers herself for re-appointment.

Key Managerial Personnel (KMP)

The following have been designated as the Key Managerial Personnel of the Companypursuant to sections 2(51) and 203 of the Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014:

Sr. No. Name of the Person Designation
1 Mr. Makrand Appalwar Chairman & Managing Director
2 Mrs. Rinku Appalwar Chief Financial Officer
3 Mr. Kaushal Patvi Company Secretary

There has been no change in the KMPs during the year under review.

There has been no change in the constitution of Board of Directors of the Companyduring the financial year 2019-2020.

Re-Appointment of Mr. Makrand M. Appalwar as the Chairman and Managing Director of theCompany

The Board of Directors of the Company at its meeting held on 12th February 2020 hassubject to the approval of members re-appointed Mr. Makrand M. Appalwar (DIN 00171950) asthe Chairman and Managing Director of the Company for a period of five years with effectfrom March 31 2020 on the terms and conditions at an existing remuneration as recommendedby the Nomination and Remuneration Committee of the Board and approved by the Board.

It is proposed to seek members' approval for the re-appointment of Mr. Makrand M.Appalwar (DIN 00171950) as the Chairman and Managing Director of the Company in terms ofthe applicable provisions of the Act.

Re-Appointment of Mrs. Rinku M. Appalw ar as the CFO & Executive Director-FinanceDirector of the Company

The Board of Directors of the Company at its meeting held on 12th February 2020 hassubject to the approval of members re-appointed Mrs. Rinku M. Appalwar (DIN 00171976) asthe CFO & Executive Director-Finance Director of the Company for a period of fiveyears with effect from March 31 2020 on the terms and conditions at an existingremuneration as recommended by the Nomination and Remuneration Committee of the Board andapproved by the Board.

It is proposed to seek members' approval for the re-appointment of Mrs. Rinku M.Appalwar (DIN 00171976) as the CFO & Executive Director-Finance of the Company interms of the applicable provisions of the Act.

Re-Appointment of Independent Directors for a Second Term

The Nomination and Remuneration Committee on the basis of performance evaluation ofIndependent Directors and taking into account the external business environment thebusiness knowledge acumen experience and the substantial contribution made by Mr.Prashant K. Lohiya and Dr. Venkatesh G. Joshi during their tenure has recommended to theBoard that continued association of Mr. Prashant K. Lohiya and Dr. Venkatesh G. Joshi asIndependent Directors would be beneficial to the Company. Based on the above and theperformance evaluation of Independent Directors the Board recommends re-appointment of:

(i) Mr. Prashant K. Lohiya for a further period five consecutive years commencing from31st March 2020 to 30th March 2025 and

(ii) Dr. Venkatesh G. Joshi for a further period of five consecutive years commencingfrom 31st March 2020 to 30th March 2025

to hold office as Independent Directors of the Company not liable to retire byrotation on the Board of the Company.

DECLARATION BY AN INDEPENDENT DIRECTOR(S)

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The Board is of the opinion that the Independent Directors of theCompany hold highest standards of integrity and possess requisite expertise and experiencerequired to fulfill their duties as Independent Directors.

In terms of Section 150 of the Companies Act 2013 read with Rule 6 of the Companies(Appointment and Qualification of Directors) Rules 2014 Independent Directors of theCompany have confirmed that they have registered themselves with the databank maintainedby The Indian Institute of Corporate Affairs Manesar ('IICA'). The Independent Directorsare also required to undertake online proficiency self-assessment test conducted by theIICA within a period of 1 (one) year from the date of inclusion of their names in the databank unless they meet the criteria specified for exemption. The Independent Directorswill be undertaking the said test in due course.

PERFORMANCE EVALUATION

The Company has devised a Policy for performance evaluation of the Board Committeesand other individual Directors (including Independent Directors) which include criteriafor performance evaluation of Non-executive Directors and Executive Directors. Pursuant tothe provisions of the Companies Act

2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Board has carried out an annual evaluation of its own performance and that of itsCommittees as well as performance of the Directors individually. Feedback was sought byway of a structured questionnaire covering various aspects of the Board's functioning suchas adequacy of the composition of the Board and its Committees Board culture executionand performance of specific duties obligations and governance and the evaluation wascarried out based on responses received from the Directors.

The performance evaluation of the non- executive directors is done by the Boardannually. The performance evaluation of the Chairman & Managing Director ChiefFinancial Officer and the Executive Director is carried out by the Independent Directorsannually. The Board of Directors expressed their satisfaction with the entire evaluationprocedure.

FAMILIARISATION PROGRAMME FOR DIRECTORS

The Members of the Board of the Company are afforded many opportunities to familiarisethemselves with the Company its Management and its operations. The Directors are providedwith all the documents to enable them to have a better understanding of the Company itsvarious operations and the industry in which it operates.

All the Independent Directors of the Company are made aware of their roles andresponsibilities at the time of their appointment through a formal letter of appointmentwhich also stipulates various terms and conditions of their engagement.

Executive Directors and Senior Management provide an overview of the operations andfamiliarise the new Non-Executive Directors on matters related to the Company's values andcommitments. They are also introduced to the organisation structure constitution ofvarious committees board procedures risk management strategies etc.

Strategic Presentations are made to the Board where Directors get an opportunity tointeract with Senior Management. Directors are also informed of the various developmentsin the Company through Press Releases emails etc.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES

The Company has a Strategic Joint Venture with Global Bag sro Czech RepublicanCompany. The Company has with 25% investment in Global Bag sro. COMPLIANCE WITH THEPROVISIONS OF SECRETARIAL STANDARD 1 AND SECRETARIAL STANDARD 2

The applicable Secretarial Standards i.e. SS-1 and SS-2 relating to 'Meetings of theBoard of Directors' and 'General Meetings' respectively have been duly complied by yourCompany.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by the Securities and ExchangeBoard of India (SEBI). The report on Corporate Governance as stipulated under the ListingRegulations forms an integral part of this Report. The requisite certificate from theSecretarial Auditors of the Company confirming compliance with the conditions of CorporateGovernance is attached to the report on Corporate Governance.

VIGIL MECHANISM

The Vigil Mechanism as envisaged in the Companies Act 2013 the Rules prescribedthereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is implemented through the Company's Whistle Blower Policy to enable the Directorsemployees and all stakeholders of the Company to report genuine concerns to provide foradequate safeguards against victimisation of persons who use such mechanism and makeprovision for direct access to the Chairman of the Audit Committee. Whistle Blower Policyof your Company is available on the Company's website and can be accessed at the Web-link:www.emmbi.com.

PREVENTION OF SEXUAL HARASSMENT POLICY

The Company has a detailed policy in place in line with the requirements of The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.Internal Complaints Committees (ICC) have been set up to redress complaints receivedregarding sexual harassment and the Company has complied with provisions relating to theconstitution of Internal Complaints Committee under The Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013. The Company policy mandatesprevention of sexual harassment and to ensure a free and fair enquiry process with cleartimelines for resolution.

DEPOSITS FROM PUBLIC

During the financial year under review the Company has not accepted any deposits frompublic and as such no amount on account of principal or interest on deposits from Publicwas outstanding as on the date of the Balance Sheet.

PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIES PROVIDED

The Company has not given any loan guarantees or made any investments as prescribed inSection 186 of the Companies Act 2013.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in its ordinary course of business and on an arms' lengthbasis.

During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions.

The Policy on Materiality of Related Party Transactions and on dealing with RelatedParty Transactions as approved by the Board may be accessed on the Company's website at:www.emmbi.com.

There were no materially significant related party transactions which could havepotential conflict with interest of the Company at large.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has focused on several corporate social responsibility programmes. TheCompany continued its endeavour to improve the lives of people and provide opportunitiesfor their holistic development through its different initiatives in the areas of RuralTransformation; Health; Sanitation & Hygiene; Education; Sports for Development;Disaster Response; Arts Culture Heritage etc.

CSR POLICY

The Corporate Social Responsibility Committee had formulated and recommended to theBoard a Corporate Social Responsibility Policy (CSR Policy) which was subsequentlyadopted by it and is being implemented by the Company. The CSR Policy can be accessed atthe Company's website through the Web-link: www.emmbi.com.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION ETC. & FOREIGN EXCHANGE EARNINGS ANDOUTGOINGS:

The information as required under Section 134(3)(m) of The Companies Act 2013 readwith Rule 8(3) of The Companies (Accounts) Rules 2014 with respect to conservation ofenergy technology absorption and foreign exchange earnings is given below:

1. CONSERVATION OF ENERGY:

a. The Company is making continuous efforts on ongoing basis for energy conservation byadopting innovative measures to reduce wastage and optimise consumption. Energy continuesto be a material aspect from climate change as well as operational perspective. Emmbi'scommitment to decouple energy and carbon footprint from business growth reflects in thereduction in specific consumption that Emmbi has achieved.

b. Steps are taken to institutionalized process of identifying and understandingincrease and decrease in energy use by monitoring energy consumption trends to determinefuture energy use when planning future changes in the business and diagnose specific areasof wasted energy.

c. Significant reductions in energy consumption and cost of production of goods havebeen observed by the implementation of above referred measures.

d. Implementation of referred measures have resulted in increased facility reliabilityas well as improved equipment performance.

2. TECHNOLOGY ABSORPTION:

The Company continues to adopt and use the latest technologies to improve theproductivity and quality of its products. The Company's operations do not requiresignificant import of technology.

(A) Research and Development:

The Silvassa unit of the company located at —99/2/1&9 Madhuban IndustrialEstate Madhuban Dam Road Rakholi Village U. T. of Dadra & Nagar Haveli Silvassa 396230 is accorded In-house R&D recognition up to 31/03/2021 from Department ofScientific And Industrial Research Ministry of Science & Technology Government ofIndia New Delhi.

In pursuit of R & D endeavors the company is regularly incurring expenditure on R& D on the following activities

- Design and Development of New Products;

- Continuous improvement of existing products for enhanced durability and performance;

- Product optimization using advanced technology;

- Testing and adaptation of New Materials ;

- New processes up gradation & production process improvement of existingprocesses;

- Redesigning of the manual processes in to Automation;

- Environment compliance by products and processes.

(B) Benefits:

Benefits derived as a result of R & D: It has resulted in the improvement ofquality of the products and reduced operation cost. Up gradation of products to the newrequirements has been possible because of R & D done in the Company on a continuousbasis. This has resulted into enhanced customer satisfaction new business opportunitiesreduced costs higher quality and adapting the latest technologies.

(C) Future Plan of action:

Future R&D efforts will continue along similar lines as at present but with morefocus thrust and endeavors.

(D) Expenditure on R&D:

The expenditure on R&D activities incurred during the year is given hereunder:

Particulars (Rs. In Millions)
Capital Expenditure 1.97
Revenue Expenditure 30.53
Total R&D Expenditure 32.51
Total Turnover (Net Sales) 3039.34
Total R&D Expenditure as a percentage of Total turnover 1.07

3. Foreign exchange earnings and Outgo:

The Company has continued to maintain focus and avail of export opportunities based oneconomic considerations. During the year the Company has exports (FOB value) worth Rs.1393.57 millions.

(Rs. In Millions)

Particulars 2019-20 2018-19
Foreign Exchange Earnings 1393.57 1377.55
Foreign Exchange Outgo 30.10 40.02

RISK MANAGEMENT POLICY

Your Company has a well-defined risk management framework in place. The risk managementframework works at various levels across the enterprise. The Company has a robustorganisational structure for managing and reporting on risks. A statement includingdevelopment and implementation of a risk management policy for the Company is attached andforms a part of the Board's Report as Annexure 2.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNALS

No significant or material orders were passed by the Regulators or Courts or Tribunalsor Statutory or Quasi-Judicial body which impact the going concern status and Company'soperations in future.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 124(5) of the Companies Act 2013 if thedividend transferred to the Unpaid Dividend Account of the Company remains unpaid orunclaimed for a period of seven years from the date of such transfer then such unclaimedor unpaid dividend shall be transferred by the Company along with interest accrued if anyto the Investor Education and Protection Fund ('the IEPF') a fund established undersub-section (1) of section 125 of the Act. The details of unclaimed/unpaid dividend areavailable on the website of the Company viz. www.emmbi.com.

Accordingly an amount of Rs. 64833.30/- being unclaimed / unpaid dividend for FY11-12 and which remained unpaid and unclaimed for a period of 7 years has been transferredby the Company to the IEPF.

Further the unclaimed / unpaid dividend amount pertaining to the FY 12-13 will betransferred to IEPF during FY 20-21.

MANDATORY TRANSFER OF SHARES TO DEMAT ACCOUNT OF INVESTORS EDUCATION AND PROTECTIONFUND AUTHORITY (IEPFA) IN CASE OF UNPAID/ UNCLAIMED DIVIDEND ON SHARES FOR A CONSECUTIVEPERIOD OF SEVEN YEARS

In terms of Section 124(6) of the Companies Act 2013 read with Rule 6 of theInvestor Education and Protection Fund Authority (Accounting Audit Transfer and Refund)Rules 2016 (as amended from time to time) (IEPF Rules) shares on which dividend has notbeen paid or claimed by a shareholder for a period of seven consecutive years or moreshall be credited to the Demat Account of Investor Education and Protection Fund Authority(IEPFA) within a period of thirty days of such shares becoming due to be so transferred.Upon transfer of such shares all benefits (like bonus etc.) if any accruing on suchshares shall also be credited to such Demat Account and the voting rights on such sharesshall remain frozen till the rightful owner claims the shares.

Shares which are transferred to the Demat Account of IEPFA can be claimed back by theshareholders from IEPFA by following the procedure prescribed under the aforesaid rules.

The Company has sent out individual communication to the concerned Members whose sharesare liable to be transferred to IEPFA to take immediate action in the matter. As requiredunder the IEPF Rules the Company has also published a Notice informing the Members' whohave not claimed their dividend for a period of 7 years to claim the same from the Companybefore they are transferred to IEPFA.

Accordingly the Company has transferred 4426 shares to IEPF according to the GeneralCircular No.12/2017 for which dividend is unpaid/unclaimed for a period of 7 years.

Therefore it is in the interest of shareholders to regularly claim the dividendsdeclared by the Company.

Members whose unclaimed dividends/shares are/will be transferred to the IEPF Authoritycan claim the same by making an online application to the IEPF Authority in web Form No.IEPF-5 by following the refund procedure as detailed on the website of IEPFAuthorityhttp://www.iepf.gov.in/IEPF/refund.html.

STATUTORY AUDITOR

R. Daliya & Associates Chartered Accountants (Firm Registration No. 102060W)statutory auditor of the Company were appointed for a period of five years at the 23rdAnnual General Meeting as Statutory Auditors till the conclusion of 28th Annual GeneralMeeting subject to ratification at every Annual General Meeting and as per Notificationissued by MCA the Company need not place the resolution for ratification at the AGM andhence no resolution is placed before the AGM. The Auditors have confirmed that they arenot disqualified from continuing as Auditors of the Company.

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 hasappointed Mr. Sanjay R. Dholakia Practising Company Secretary to conduct SecretarialAudit for the FY 2019-20. The Secretarial Audit Report for the financial year ended 31stMarch 2020 is attached and forms part of the Board Report as Annexure 3.

OBSERVATIONS - STATUTORY AUDITOR & SECRETARIAL AUDITOR

There are no qualifications reservations observations disclaimers or adverse remarkscontained in the Auditors Report or the Secretarial Audit Report. REPORTING OF FRAUDSBY THE AUDITORS

During the year under review the Statutory Auditor and Secretarial Auditor have notreported any instances of frauds committed in the Company by its Officers or Employees tothe Audit Committee under Section 143(12) of the Companies Act 2013.

ANNUAL RETURN

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act 2013 read withRule 12(1) of the Companies (Management and Administration)

Rules 2014 an extract of the Annual Return as on 31st March 2020 in Form No. MGT-9is attached as Annexure 1.

BOARD MEETINGS

During the year under review Four (4) Board Meetings were convened and held. Detailedinformation on the meetings of the Board and all its Committees are included in the reporton Corporate Governance which forms part of this Annual Report. The intervening gapbetween the meetings was within the period prescribed under the Companies Act 2013 andthe listing regulations.

AUDIT COMMITTEE

The Board has constituted the Audit Committee as under:-

Mr. Prashant Lohiya Independent Director as Chairman Dr. Venkatesh Joshi IndependentDirector as a member Mr. Rama Krishnan Independent Director as a member Mrs. RinkuAppalwar Executive Director as a member

The Terms of reference of the Audit Committee number and dates of meetings heldattendance of the members of the Committee and more details on the Committee are given inthe Corporate Governance Report which forms part of this Annual Report.

All the recommendations of the Audit Committee were accepted by the Board.

NOMINATION AND REMUNERATION COMMITTEE

The Board has constituted a Nomination and Remuneration Committee as under:-

Mr. Prashant Lohiya Independent Director as Chairman Dr. Venkatesh Joshi IndependentDirector as a member Mr. Rama Krishnan Independent Director as a member

The Terms of reference of the Nomination and Remuneration Committee number and datesof meetings held attendance of the members of the Committee and more details on theCommittee are given in the Corporate Governance Report which forms part of this AnnualReport.

The Company has defined the policy on Director's appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a Director.The nomination & remuneration policy adopted by the Company has been posted on theCompany's website www.emmbi.com.

STAKEHOLDERS' RELATIONSHIP COMMITTEE

The Board has constituted the Stakeholders' Relationship Committee as under:-

Mr. Prashant Lohiya Independent Director as Chairman Dr. Venkatesh Joshi IndependentDirector as a member Mr. Rama Krishnan Independent Director as a member Mrs. RinkuAppalwar Executive Director as a member.

The Terms of reference of the Stakeholders' Relationship Committee number and dates ofmeetings held attendance of the members of the Committee and more details on theCommittee are given in the Corporate Governance Report which forms part of this AnnualReport.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Board has constituted the Corporate Social Responsibility Committee as under:-

Dr. Venkatesh Joshi Independent Director as Chairman Mr. Rama Krishnan IndependentDirector as a member Mr. Prashant Lohiya Independent Director as a member Mrs. RinkuAppalwar Executive Director as a member.

The Corporate Social Responsibility Policy is available on the Company's websitewww.emmbi.com. The Terms of reference of the Corporate Social Responsibility Committeenumber and dates of meetings held and attendance of the members of the Committee aregiven separately in the attached

Corporate Governance Report. Details of amount spent on CSR activities during thefinancial year 2019-20 is attached and forms part of the Board Report as Annexure 4. Moredetails on the Committee are given in the Corporate Governance Report which forms part ofthis Annual Report.

MANAGERIAL REMUNERATION

The information required under Section 197(12) of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and formingpart of the Directors' Report for the year ended March 31 2020 is given in a separateAnnexure to this Report.

The above Annexure is not being sent along with this Report to the Members of theCompany in line with the provision of Section 136 of the Companies Act 2013. Members whoare interested in obtaining these particulars may write to the Company Secretary at theRegistered Office of the Company. The aforesaid Annexure is also available electronicallyfor inspection by the members during the AGM and will also be available for inspectionwithout any fee by the members from the date of circulation of this notice upto the dateof AGM. Members seeking to inspect such documents can send an email to info@emmbi.com

The Company doesn't have any employee within the purview of Section 197 of theCompanies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 hence no such details to be provided.

ACKNOWLEDGEMENT

Your Directors would like to express their appreciation for the assistance andco-operation received from the investors customers distributors dealers suppliersstock exchanges banks financial institutions Export Promotion Councils Trade BodiesRegulators such as SEBI BSE NSE ROC RBI etc Central and State Governmentauthorities other Semi Government & local authorities Administration of UnionTerritory of Dadra & Nagar Haveli and business associates at all levels during theyear under review.

The Board of Directors also wish to place on record their deep appreciation for thecommitted services and excellent work done by the employees of the Emmbi family at alllevels during the year.

For and on behalf of the Board of Directors
Place: Silvassa Makrand Appalwar
Date: 18th June 2020 Chairman & Managing Director
DIN:00171950

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