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நிறுவன பெயரின் முதல் சில எழுத்துக்களை நிரப்பி 'கோ' பட்டனை கிளிக் செய்யவும்

Emami Ltd. இன் கணக்கு குறிப்புகள்

Mar 31, 2023

Nature and purpose of reserves

Securities Premium

Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares /buyback of shares in accordance with the provisions of the Companies Act, 2013.

General Reserve

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.

Capital Reserve

Capital Reserve has been primarily created on amalgamation in earlier years.

Retained Earnings

This Reserve represents the cumulative profits of the Company and effects of remeasurement of defined benefit obligations. This Reserve can be utilized in accordance with the provisions of the Companies Act, 2013.

Other Comprehensive Income

This Reserve represents the cumulative gains (net of losses) arising on the revaluation of Equity Instruments measured at Fair Value through Other Comprehensive Income, net of amounts reclassified, if any, to Retained Earnings when those instruments are disposed of.

Capital Redemption Reserve

Represents the nominal value of Equity shares bought back pursuant to Buyback in accordance with Section 69 of the Companies Act, 2013. The capital redemption reserve may be applied by the company, in paying up unissued shares of the company to be issued to shareholders of the company as fully paid bonus shares.

(i) The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The Gratuity Plan provides a lump sum payments to vested employees at retirement, death, incapacitation or termination of employment, of an amount equivalent to 15 days salary for each completed year of service. Vesting occurs on completion of 5 continuous years of service as per Indian law. However, no vesting condition applies in case of death.

The Company makes contributions to Himani Limited Gratuity Fund, J.B.Marketing and Services Employees Gratuity Fund, Zandu Pharmaceuticals Employees Gratuity Fund, Kemco Chemicals Employees Gratuity Fund and Other Funds, which is funded defined benefit plan for qualifying employees.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

(vi) Effect of Plan on Entity''s Future Cash Flows

a) Funding arrangements and Funding Policy

The Company has purchased an insurance policy to provide for payment of gratuity to the employees. Every year, the insurance company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

(vii) Description of Risk Exposures

Valuations are performed on certain basic set of pre determined assumptions and other regulatory frame work which may vary over time. Thus, the Company is exposed to various risks in providing the above gratuity benefit which are as follows:

Interest Rate Risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).

Liquidity Risk: This is the risk that the Company is not able to meet the short-term gratuity pay outs. This may arise due to non availability of enough cash/cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.

Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumptions considered for the valuation.

Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts. (e.g. Increase in the maximum limit on gratuity of H20,00,000).

Asset Liability Mismatching or Market Risk: The duration of the liability is longer compared to duration of assets, exposing the Company to market risk for volatilities/fall in interest rate.

Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

(i) In respect of certain employees, provident fund contributions are made to a Trust administered by the Company.

The defined benefit obligation arises from the possibility that during any time period in the future, the scheme may earn insufficient investment income to meet the guaranteed interest rate declared by government/EPFO/relevant authorities.

The net defined benefit obligation as at the valuation date, thus, represents the excess of accrued account value plus interest rate guaranteed liability over the fair value of plan assets.

(v) Liability sensitivity analysis

Significant actuarial assumptions for the determination of the guarantee liability are interest rate guarantee and discount rate.

The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The results of sensitivity analysis is given below:

3.43 CONTINGENT LIABILITIES & COMMITMENTS (Contd.)

H in Lacs

(b) Guarantees

As at 31.03.2023

As at 31.03.2022

Bank Guarantees

223.98

453.62

Corporate Guarantee issued on behalf of a subsidiary company (Net of Provision -Refer note no. 3.27)

1,481.91

1,490.61

Letter of Comfort issued on behalf of subsidiary company

1,755.29

2,024.59

II) Commitments:

Hin Lacs

Particular

As at 31.03.2023

As at 31.03.2022

(a) Capital Commitments : Estimated amount of commitments [net of advances of H176.01 Lacs (31.03.2022- H514.10 Lacs)] on capital account not provided for

1,031.09

981.64

(b) EPCG Commitments : The Company had procured capital goods under the Export Promotion Capital Goods Scheme of the Government of India, at a concessional rate of customs duty / excise on an undertaking to fulfil quantified export obligation within the specified periods, failing which, the Company has to make payment to the Government of India equivalent to the duty benefit enjoyed along with interest. Related export obligation to be met is H28.34 Lacs (31.03.2022 - H1,043.08 Lacs ). In addition, the Company needs to maintain the average annual export turnover of H6,910.99 Lacs to meet the above export obligation. The Company is confident that the above export obligation will be met during the specified period.

(c) Other Commitments : The Company has ongoing commitment to extend financial support to its wholly-owned subsidiary Emami Lanka (Pvt) Ltd., Srilanka and Step-down subsidiary Pharma Derm SAE Co, Egypt. The future cash flow in respect of the above cannot be ascertained at this stage.

These valuations are based on valuations performed by the management (other than registered valuer) based on the available market prices of the properties using the level 2 inputs.

The Company has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

The Company has not disclosed fair value of financial instruments such as cash and cash equivalents, other bank balances, trade receivables and trade payables because their carrying amounts are a reasonable approximation of the fair values due to their short term nature.

The Company has not disclosed fair value of Lease Liability as per Ind AS 107.

Investment in equity shares of subsidiaries and associates which are carried at cost and hence are not required to be disclosed as per Ind AS 107 "Financial Instruments Disclosures". Hence, the same have been excluded from the above table.

3.47 FAIR VALUE HIERARCHY

Level 1- Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The fair value of financial instruments that are not traded in an active market is determined using market approach and valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

There has been no change in the valuation methodology for Level 3 inputs during the year. There were no transfers between Level 1 and Level 2 during the year.

The Taxation Laws (Amendment) Ordinance, 2019 was promulgated on 20th September, 2019 which amends the Income Tax Act, 1961, and the Finance (No. 2) Act, 2019. The Ordinance provides domestic companies with an option to opt for lower tax rates, provided they do not claim certain deductions. Further, CBDT has clarified that the tax credit of MAT paid by the domestic company exercising option under section 115BAA of the Act shall not be available consequent to exercising of such option.

As there is no time line within which option under section 115BAA can be exercised, it may be noted that a domestic company having credit of MAT may, if it so desires, exercise the option after utilising the said credit against the regular tax payable. The management has assessed the impact of the above ordinance and CBDT clarification and in view of the significant amount of MAT credit and a unit having tax holiday, the management has chosen not to opt for lower tax rates and continue with the normal tax rate.

The Company had MAT credit balance as at the end of previous year as one of its manufacturing facilities i.e Pacharia, is eligible for availing income tax benefits under section 80IE of Income Tax Act, 1961 (IT Act). The aforesaid income tax benefit would expire by FY 2025-26 and also due to the improvement in pandemic situation, the Company had reassessed its position and recognized MAT credit entitlement amounting to H28,808.55 lacs (H23,033.00 lacs pertaining to earlier years) in the previous year. Further, during the current year the company has recognised MAT credit amounting to H8,554.00 lacs in order to determine the utilization of MAT credit in future years, the management has projected its book profits and tax profits and based on the same, MAT credit has been recognized. Subsequent to the recognition of MAT credit amounting to H37,362.55 Lacs, there is an unrecognised MAT credit amounting to H5,568.00 Lacs which will expire between AY 2024-27, as it is not reasonably certain that such credit can be utilised against future taxable income.

Owing to the recognition of MAT credit entitlement relating to earlier years, the tax expense for the year ended 31st March, 2022 is lower by H23,033.00 lacs and profit after tax is higher by H23,033.00 lacs. This has positively impacted the EPS of the Company by H5.18 per share for the year ended 31st March, 2022.

3.50 LEASESCompany as a Lessee

The Company has lease contracts for Warehouse and office spaces used in its operations. These generally have lease terms between 1 to 5 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets.

Company as a Lessor

The Company has entered into commercial property leases on its investment property portfolio. The Company has determined, based on an evaluation of the terms and conditions of the arrangements, such as the lease term not constituting a major part of the economic life of the commercial property and the present value of the minimum lease payments not amounting to substantially all of the fair value of the commercial property, that it retains substantially all the risks and rewards incidental to ownership of these properties and accounts for the contracts as operating leases.

The Company is not having any minimum rental receivables under non-cancellable operating lease as on 31st March, 2023 and 31st March, 2022 respectively.

3.51 CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep the gearing ratio upto 15%. Net debt is defined as current and noncurrent borrowings (including current maturity of long term debt and interest accrued and excluding lease liabilities) less cash and cash equivalents.

There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31st March, 2023 and 31st March, 2022.

3.52 FINANCIAL RISK MANAGEMENT Financial Risk Factors

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk. The Company uses derivative financial instruments to mitigate foreign exchange related risk exposures.

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk include loans and borrowings, deposits, debt and equity investments and derivative financial instruments.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to balance the Company''s position with regards to interest income and interest expense and to manage the interest rate risk, treasury performs comprehensive interest rate risk management. The Company is not exposed to significant interest rate risk as at the respective reporting dates.

Foreign Currency Risk

The Company operates both in domestic market and internationally and consequently the Company is exposed to foreign exchange risk through its sales in overseas countries, and purchases from overseas suppliers in foreign currencies. The Company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures.

Derivative financial instruments

The Company holds derivative financial instruments such as foreign currency forward to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank or a financial institution.

Commodity Price Risk

The Company is affected by the price volatility of its key raw materials. Its operating activities requires a continuous supply of key material for manufacturing of hair oil, talc, balm and other products. The Company''s procurement department continuously monitor the fluctuation in price and take necessary action to minimise its price risk exposure.

Security Price Risk

Securities price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded prices.

The Company invests its surplus funds in various mutual funds, debt instruments and equity instruments. These comprise of mainly liquid schemes of mutual funds, short term debt funds & income funds (duration investments) and certain quoted equity instruments. To manage its price risk arising from investments in mutual funds and equity instruments, the Company diversifies its portfolio. Mutual fund and equity investments are susceptible to market price risk, mainly arising from changes in the interest rates or market yields which may impact the return and value of such investments.

The Company''s exposure to securities price risk arises from investments in mutual funds and equity investments held by the Company and classified in the Balance Sheet as fair value through profit or loss / fair value through other comprehensive income is disclosed under Note No.3.5 & 3.11

Credit Risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to H25,969.71 Lacs and H19,354.50 Lacs as at 31st March, 2023 and 31st March, 2022, respectively. Trade receivables includes both secured and unsecured receivables and are derived from revenue earned from domestic and overseas customers . Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. An impairment analysis is performed at each reporting date on an individual basis based on historical data of credit losses.

No customer individually accounted for more than 10% of the revenues from external customers during the year ended 31st March, 2023 and 31st March, 2022.

Liquidity Risk

The Company''s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations as well as investment in mutual funds. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

# In compliance with the provisions laid under Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 and Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021, the Company has provided for expenditure towards unspent Corporate Social Responsibility (CSR) towards ongoing projects. Subsequent to the year end, the said amount which is remaining unspent under section 135(5) of the Act, on account of ongoing projects, has been transferred to a special account opened by the Company within prescribed time limit in a scheduled bank. In respect of other than ongoing projects, there are no unspent amounts that are required to be transferred to a fund specified in Schedule VII of the Companies Act, in compliance with second proviso to sub-section 5 of section 135 of the Act

Terms and conditions of transactions with related parties

The sales and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.

Loan given to related parties are made on terms equivalent to those that prevail in arm''s length transactions and have following terms:

a) Loans to subsidiaries carries interest and has a tenure of 1-3 year from the date of loan given.

b) Loans to associate carries interest and are convertible to equity at the option of issuer / borrower or repayable on happening of certain event.

c) Loan receivable from Emami Lanka (Pvt) Ltd. aggregating to H259.10 lacs (31.03.2022 H276.20 lacs)

, net of provision H238.00 lacs (31.03.2022 H183 lacs) is payable in FY 2023-24 as per the renewed/ revised agreement.

* The Company has investments, trade receivables and guarantees given with respect to its wholly owned subsidiary viz. Emami International FZE (Emami FZE). During the previous year, the Company had performed an impairment assessment in connection with the total exposure in Emami FZE by examining its financial position and recorded liability towards financial guarantee aggregating H4,839.62 lacs. Such provisions are adjusted based on the profit earned / loss incurred by the subsidiary on periodic basis. Accordingly, during the year ended March 31, 2023, there has been an decrease by H907.12 lacs on the basis of performance of the subsidiary in the current year, which comprises of increase in liability towards financial guarantee by H497.09 lacs and decrease in provision for doubtful trade receivable amounting to H1,404.21 lacs.

** The Company has investments, loans, trade receivables and guarantees given with respect to its wholly owned subsidiary viz. Emami Lanka (Pvt) Limited. During the current year, the Company had performed an impairment assessment in connection with the total exposure in Emami Lanka (Pvt) Limited by examining its financial position and impaired its Loan receivable aggregating H238.00 lacs lacs which is equivalent to negative net worth of Emami Lanka (Pvt) Limited.

3.55 CRITICAL ESTIMATES AND JUDGEMENTS

The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. These estimates and associated assumptions are based on historical experience and management''s best knowledge of current events and actions the Company may take in future.

Information about critical estimates and assumptions that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities are included in the following notes:

i) Estimation of defined benefit obligations

The liabilities of the Company arising from employee benefit obligations and the related current service cost, are determined on an actuarial basis using various assumptions Refer Note No. 3.38 and 3.39 for significant assumption used.

ii) Estimation of tax expenses, assets and payable

Deferred tax assets are recognised for unused tax credit and on unused losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Taxes recognized in the financial statements reflect management''s best estimate of the outcome based on the facts known at the balance sheet date. These facts include but are not limited to interpretation of tax laws of various jurisdictions where the company operates. Any difference between the estimates and final tax assessments will impact the income tax as well the resulting assets and liabilities. Refer Note No. 3.8, 3.19 and 3.48.

iii) Estimation of provisions and contingencies

Provisions are liabilities of uncertain amount or timing recognised where a legal or constructive obligation exists at the balance sheet date, as a result of a past event, where the amount of the obligation can be reliably estimated and where the outflow of economic benefit is probable. Contingent liabilities are possible obligations that may arise from past event whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events which are not fully within the control of the company. The Company exercises judgement in recognizing the provisions and assessing the exposure to contingent liabilities relating to pending litigations. Judgement is necessary in assessing the likelihood of the success of the pending claim and to quantify the possible range of financial settlement. Due to this inherent uncertainty in the evaluation process, actual losses may be different from originally estimated provision. Refer Note No. 3.22, 3.29, 3.40 and 3.43.

iv) Estimation of expected useful lives and residual values of property, plants and equipment and intangible assets.

Property, plant and equipment and intangible assets are depreciated/ amortized at historical cost using straight-line method based on the estimated useful life, taking into account residual value. The asset''s residual value and useful life are based on the Company''s best estimates and reviewed, and adjusted if required, at each Balance Sheet date. Refer Note No. 3.1, 3.2, 3.3 & 3.4.

v) Impairment of intangible assets

The Company has significant intangible assets arising from the acquisition of brand, trademark, knowhow etc. in the normal course of its business. In case, there are indicators that the carrying value of the intangibles may not be recovered through its continuing use, the management performs impairment testing in accordance with Ind AS 36. Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget over the remaining useful life (including terminal value) and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. Recoverability of these assets is based on forecast of projected cash flows over the remaining useful life of underlying intangible assets and their discounted present value (after considering terminal value), which are inherently highly judgmental and is subject to achieving forecasted results.

vi) Impairment of non financial assets / investment in subsidiaries and associates

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The carrying amounts of the Company''s non-financial assets /investment in subsidiaries and associates are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the recoverable amounts of cash-generating units have been determined based on value in use calculations. These calculations require the use of estimates such as discount rates and growth rates.

vii) Fair Value Measurements

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair values are measured using valuation techniques which involve various judgements and assumptions that may differ from actual developments in the future. For further details refer Note No. 3.47

3.56 The Board of Directors of the Company, at its meeting held on 24th March, 2023 approved Buyback of the Company''s fully paid-up equity shares of face value of H1 each from the eligible equity shareholders of the Company other than promoters, promoter group and persons who are in control of the company, at a price not exceeding H450 per equity share (Maximum Buyback price), for an aggregate amount not exceeding H18,600 lacs (Maximum Buyback size), payable in cash from the open market route through the stock exchange mechanism under the Companies Act, 2013 and SEBI Buyback Regulations 2018 . The Maximum Buyback Size was 9.94% of aggregate of the Company''s paid up equity capital and free reserves based on the audited financial statements of the Company as at 31st March, 2022 in compliance with the maximum permissible limit of 10% of the total paid up equity share capital and free reserves in accordance with Section 68(2) of Companies Act, 2013 and SEBI Buy Back Regulations 2018.The Buyback has not been commenced till 31st March, 2023. The Company has incurred H99.34 lacs towards transaction cost and taxes.

During the previous year, subsequent to the approval of the Board of Directors , the Company bought back 33,63,740 equity shares in total cash consideration of H20,005.03 Lacs (including H128.40 lacs towards transaction costs of Buyback and H3,755.18 lacs towards Buyback distribution tax). These equity shares were extinguished in the month of March 2022 as per the records of the depositories. In line with the requirement of Companies Act, 2013, an amount of H7,224.80 lacs have been utilised from the securities premium, H12,780.23 lacs from general reserve for the Buyback. Further, capital redemption reserve of H33.64 lacs, representing the nominal value of shares bought back, has been created in accordance with Section 69 of the Companies Act, 2013.

3.57 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and postemployment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

3.59 The Company has presented segment information in the consolidated financial statements which are presented in the same financial report. Accordingly, in terms of Paragraph 4 of Ind AS 108 ''Operating Segments'', no disclosures related to segments are presented in this standalone financial statements. The Chief Operating Decision Maker ("CODM") evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators considering a single business segment. The CODM reviews revenue and profit from operations as the performance indicator considering a single business segment. The CEO & CFO and Managing Director are the CODM of the Company.

*The quarterly statements submitted to banks were prepared and filed before the completion of financial statement closure activities including Ind AS adjustments / reclassification and regrouping as applicable, which led to these difference between final books of accounts and provisional quarterly statement submitted to banks.

**Trade Payables includes only creditors for goods which is determined by the management through manual exercise and does not include creditors for services / provisional liabilities. Hence, the same have been excluded from the above table.

3.64 During the year a foreign subsidiary had declared dividend which was subsequently cancelled in Extraordinary General Meeting of its shareholders, due to inability to repatriate the dividend to India on account of ongoing foreign currency crisis in the country in which it is domiciled. Accordingly, the Company has not accounted for income in current year.

3.65 OTHER STATUTORY INFORMATIONS

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(iii) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(iv) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other person or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(v) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

(vi) The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

(vii) There is no exceptional item for the year ended 31st March, 2023.

(viii) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.

(ix) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017

(x) There are no events or transactions after the reporting period which is required to be disclosed under Ind AS 10.

(xi) The Company is not a Core Investment Company as defined in the regulations made by Reserve Bank of India. The Company has total two Core Investment companies as part of the Group.

3.66 The figures of previous year have been regrouped / reclassified / rearranged, wherever required.


Mar 31, 2021

(b) Terms and Rights attached to equity shares

The Company has only one class of equity shares having a par value of Re 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares & pays dividend in Indian Rupees. The dividend proposed by the board of directors is subject to the approval of the shareholders in the ensuing annual general meeting and is accounted for in the year in which it is approved by the shareholders in the general meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Securities Premium

Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares /buyback of shares in accordance with the provisions of the Companies Act, 2013.

General Reserve

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.

Capital Reserve has been primarily created on amalgamation in earlier years.

Retained Earnings

This Reserve represents the cumulative profits of the Company and effects of remeasurement of defined benefit obligations. This Reserve can be utilized in accordance with the provisions of the Companies Act, 2013.

Other Comprehensive income

This Reserve represents the cumulative gains (net of losses) arising on the revaluation of Equity Instruments measured at Fair Value through Other Comprehensive Income, net of amounts reclassified, if any, to Retained Earnings when those instruments are disposed of.

3.37 DEFINED BENEFIT PLAN ( GRATUITY) :

(I) The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The Gratuity Plan provides a lump sum payments to vested employees at retirement, death, incapacitation or termination of employment, of an amount equivalent to 15 days salary for each completed year of service. Vesting occurs on completion of 5 continuous years of service as per Indian law. However, no vesting condition applies in case of death. The Company makes contributions to Himani Limited Gratuity Fund, J.B. Marketing and Services Employees Gratuity Fund, Zandu Pharmaceuticals Employees Gratuity Fund & Kemco Chemicals Employees Gratuity Fund, which is funded defined benefit plan for qualifying employees.

(vI) Effect of Plan on Entity''s Future Cash Flows

a) Funding arrangements and Funding Policy

The Company has purchased an insurance policy to provide for payment of gratuity to the employees. Every year, the insurance company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

(vII) Description of Risk Exposures

Valuations are performed on certain basic set of pre determined assumptions and other regulatory frame work which may vary over time. Thus, the Company is exposed to various risks in providing the above gratuity benefit which are as follows:

Interest Rate risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).

Liquidity Risk: This is the risk that the Company is not able to meet the short-term gratuity pay outs. This may arise due to non availability of enough cash/cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.

Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumptions considered for the valuation.

Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts. (e.g. Increase in the maximum limit on gratuity of H20,00,000).

Asset Liability Mismatching or Market Risk: The duration of the liability is longer compared to duration of assets, exposing the Company to market risk for volatilities/fall in interest rate.

Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

3.38 DEFINED BENEFIT PLAN ( PROVIDENT FUND)

(i) In respect of certain employees, provident fund contributions are made to a Trust administered by the Company.

The defined benefit obligation arises from the possibility that during any time period in the future, the scheme may earn insufficient investment income to meet the guaranteed interest rate declared by government/EPFO / relevant authorities. The net defined benefit obligation as at the valuation date, thus, represents the excess of accrued account value plus interest rate guaranteed liability over the fair value of plan assets.

(b) EPCG Commitments : The Company had procured capital goods under the Export Promotion Capital Goods Scheme of the Government of India, at a concessional rate of customs duty / excise on an undertaking to fulfill quantified export obligation within the specified periods, failing which, the Company has to make payment to the Government of India equivalent to the duty benefit enjoyed along with interest. Related export obligation to be met is H2,408.32 lacs (31.03.2020 -H1,427.06 lacs ). In addition, the Company needs to maintain the average annual export turnover of H3,345.33 lacs to meet the above export obligation. The Company is confident that the above export obligation will be met during the specified period.

(c) Other Commitments : The Company has ongoing commitment to extend financial support to its wholly-owned subsidiary Emami Indo Lanka (Pvt) Ltd., Srilanka and Step-down subsidiary Pharma Derm SAE Co, Egypt. The future cash flow in respect of the above cannot be ascertained at this stage.

Level 1- Quoted prices (unadjusted ) in active markets for identical assets or liabilities

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of March 31,2021 :

Deferred Tax Assets for MAT Credit entitlement amounting to ''27,985.28 lacs (31.03.2020 - ''28,328.35 lacs ) and deferred tax asset on temporary differences amounting to ''927.55 lacs (31.03.2020 - ''559.85 lacs) has not been recognised by the Company considering that the availability of taxable profit against which such deductible temporary difference can be utilised cannot be ascertained with required level of certainty. Deferred Tax Credit amounting to ''125.13 lacs during the year is on account of adjustment related to fair valuation of equity instrument through other comprehensive income.

The Taxation Laws (Amendment) Ordinance, 2019 was promulgated on 20 September 2019, which amends the Income Tax Act, 1961, and the Finance (No. 2) Act, 2019. The Ordinance provides domestic companies with an option to opt for lower tax rates, provided they do not claim certain deductions. Further, CBDT has clarified that the tax credit of MAT paid by the domestic company exercising option under section 115BAA of the Act shall not be available consequent to exercising of such option.

As there is no time line within which option under section 115BAA can be exercised, it may be noted that a domestic company having credit of MAT may, if it so desires, exercise the option after utilising the said credit against the regular tax payable. The management has assessed the impact of the above ordinance and CBDT clarification and in view of the significant amount of MAT credit and a unit having tax holiday, the management has chosen not to opt for lower tax rates and continue with the normal tax rate.

Company as a Lessor

The Company has entered into commercial property leases on its investment property portfolio. The Company has determined, based on an evaluation of the terms and conditions of the arrangements, such as the lease term not constituting a major part of the economic life of the commercial property and the present value of the minimum lease payments not amounting to substantially all of the fair value of the commercial property, that it retains substantially all the risks and rewards incidental to ownership of these properties and accounts for the contracts as operating leases.

The Company has entered into operating leases on its investment property portfolio consisting of certain office (see Note 3.2). These leases have terms of between 1-5 years. All leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. The lessee is also required to provide a residual value guarantee on the properties. Rental income recognised by the Company during the year is ''370.12 lacs (31.03.2020: ''404.29 lacs).

For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep the gearing ratio between 0% and 15%. Net debt is defined as current and non-current borrowings (including current maturity of long term debt and interest accrued) less cash and cash equivalents.

3,51 FINANCIAL RISK MANAGEMENT Financial risk factors

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk. The Company uses derivative financial instruments to mitigate foreign exchange related risk exposures.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk include loans and borrowings, deposits, debt and equity investments and derivative financial instruments.

Foreign Currency risk

The Company operates both in domestic market and internationally and consequently the Company is exposed to foreign exchange risk through its sales in overseas countries, and purchases from overseas suppliers in foreign currencies. The Company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures.

3.51 FINANCIAL RISK MANAGEMENT (Contd.)Derivative financial Instruments

The Company holds derivative financial instruments such as foreign currency forward to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank or a financial institution.

Commodity Price Risk

The Company is affected by the price volatility of its key raw materials. Its operating activities requires a continuous supply of key material for manufacturing of hair oil, talc, balm and other products. The Company''s procurement department continuously monitor the fluctuation in price and take necessary action to minimise its price risk exposure.

Security Price Risk

Securities price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded prices.

The Company invests its surplus funds in various mutual funds, debt instruments and equity instruments. These comprise of mainly liquid schemes of mutual funds, short term debt funds & income funds (duration investments) and certain quoted equity instruments. To manage its price risk arising from investments in mutual funds and equity instruments, the Company diversifies its portfolio. Mutual fund and equity investments are susceptible to market price risk, mainly arising from changes in the interest rates or market yields which may impact the return and value of such investments.

The Company''s exposure to securities price risk arises from investments in mutual funds and equity investments held by the Company and classified in the Balance Sheet as fair value through profit or loss / fair value through other comprehensive income is disclosed under Note No.3.5 & 3.11

Credit Risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to H9,971.77 lacs and H18,168.67 lacs as at 31.03.2021 and 31.03.2020, respectively. Trade receivables includes both secured and unsecured receivables and are derived from revenue earned from domestic and overseas customers. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. An impairment analysis is performed at each reporting date on an individual basis based on historical data of credit losses.

No customer individually accounted for more than 10% of the revenues from external customers during the year ended 31st March 2021 and 31st March 2020.

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.

Loan given to related parties are made on terms equivalent to those that prevail in arm''s length transactions and have following terms:

a) Loans to subsidiaries carries interest and has a tenure of 3 year for the date of loan given.

b) Loans to associate carries interest and are convertible to equity at the option of issuer / borrower or repayable on happening of certain event.

c) Interest and Principal aggregating to H36.00 lacs and H332.91 lacs respectively, receivable from Emami Indo Lanka was originally stipulated to be repaid in the current year, however, the terms of the underlying agreement has been renewed/ revised and now the interest and principal is payable in next and subsequent years respectively.

* The Company has investments, loans, trade receivables and guarantees given with respect to its wholly owned subsidiary viz. Emami International FZE (Emami FZE). During the previous year, the Company had performed an impairment assessment in connection with the total exposure in Emami FZE by examining its financial position and impaired its investments aggregating ''18.98 lacs, recorded liability towards financial guarantee aggregating ''4,766.29 lacs and provided for doubtful trade receivables aggregating ''2,015.70 lacs. Such provisions are adjusted based on the profit earned / loss incurred by the subsidiary on periodic basis. Accordingly, during the year ended March 31,2021, there has been a reversal of said provision by ''592 lacs (net) on the basis of performance of the subsidiary in the current year, which comprises of reversal of liability towards financial guarantee by H887 lacs and a further provision for doubtful trade receivable amounting to ''295 lacs.

3.54 CRITICAL ESTIMATES AND JUDGEMENTS

The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. These estimates and associated assumptions are based on historical experience and management''s best knowledge of current events and actions the Company may take in future.

Information about critical estimates and assumptions that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities are included in the following notes:

i) Estimation of defined benefit obligations

The liabilities of the Company arising from employee benefit obligations and the related current service cost, are determined on an actuarial basis using various assumptions Refer Note no. 3.37 for significant assumption used.

II) Estimation of tax expenses, assets and payable

Deferred tax assets are recognised for unused tax credit and on unused losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. Taxes recognized in the financial statements reflect management''s best estimate of the outcome based on the facts known at the balance sheet date. These facts include but are not limited to interpretation of tax laws of various jurisdictions where the company operates. Any difference between the estimates and final tax assessments will impact the income tax as well the resulting assets and liabilities. Refer Note No. 3.22 and 3.47.

III) Estimation of provisions and contingencies

Provisions are liabilities of uncertain amount or timing recognised where a legal or constructive obligation exists at the balance sheet date, as a result of a past event, where the amount of the obligation can be reliably estimated and where the outflow of economic benefit is probable. Contingent liabilities are possible obligations that may arise from past event whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events which are not fully within the control of the company. The Company exercises judgement and estimates in recognizing the provisions and assessing the exposure to contingent liabilities relating to pending litigations. Judgement is necessary in assessing the likelihood of the success of the pending claim and to quantify the possible range of financial settlement. Due to this inherent uncertainty in the evaluation process, actual losses may be different from originally estimated provision. Refer Note No. 3.28,3.39 and 3.42.

Iv) Estimation of expected useful lives and residual values of property, plants and equipment and Intangible assets.

Property, plant and equipment and intangible assets are depreciated/ amortized at historical cost using straight-line method based on the estimated useful life, taking into account residual value. The asset''s residual value and useful life are based on the Company''s best estimates and reviewed, and adjusted if required, at each Balance Sheet date .Refer Note No. 3.1,3.2, 3.3, 3.4 & 3.55.

v) Impairment of Intangible assets

The Company has significant intangible assets arising from the acquisition of brand, trademark, know-how etc. in the normal course of its business. In case, there are indicators that the carrying value of the intangibles may not be recovered through its continuing use, the management performs impairment testing in accordance with Ind AS 36. Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget over the remaining useful life (including terminal value) and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. Recoverability of these assets is based on forecast of projected cash flows over the remaining useful life of underlying intangible assets and their discounted present value (after considering terminal value), which are inherently highly judgmental and is subject to achieving forecasted results.

vi) Impairment of non financial assets / Investment In subsidiaries and associates

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The carrying amounts of the Company''s non-financial assets /investment in subsidiaries and associates are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the recoverable amounts of cash-generating units have been determined based on value in use calculations. These calculations require the use of estimates such as discount rates and growth rates.

vii) Fair Value Measurements

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair values are measured using valuation techniques which involve various judgements and assumptions that may differ from actual developments in the future. For further details refer Note No. 3.46

3.55 Considering the Dynamic market condition, the management has revised the useful life of the Tangible asset related to Moulds (included in Plant & Machinery) and Intangible asset related to acquired Brands and Trademarks from 10 years to 7 years in the current year resulting in an increase in depreciation by ''1,506.91 lacs and increase in amortisation by ''13,221.02 lacs for the year respectively.

3.56 The Board of Directors, at its meeting held on 19th March, 2020, approved Buyback of the Company''s fully paid-up equity shares of face value of ''1 each from the eligible equity shareholders of the Company other than promoters, promoter Company and persons who are in control of the company, for an aggregate amount not exceeding ''19,199.43 lacs (Maximum Buyback size), payable in cash from the open market route through the stock exchange mechanism under the Companies Act, 2013 and SEBI Buyback Regulations. The Buyback commenced on 29th March, 2020 and got completed on 9th July 2020.

The Company has bought back 94,21,498 equity shares under the buy Back by utilising ''19,198.73 lacs (excluding brokerage, transactions cost and taxes). All the shares bought back have been extinguished as per the records of the depositories.

3.57 With effect from 16th December, 2020 "Fravin Pty Ltd." and its step down subsidiary companies, Diamond Bio Tech Laboratories Pty Ltd. and Abache Pty Ltd. ceased to be subsidiaries companies. The aforsaid subsidiary companies were inoperative.

3.58 Recently, there has been a spike in the covid-19 cases again across the Country and as a result all the states are currently closely monitoring the situation. Some of the states have imposed restrictions on the free flow of public in their respective states in varied manner. The management is monitoring the situation closely and is operating its plants and depots with the required workforce as permitted by the Government. The management has made an initial assessment, based on the current situation, of the likely impact of the covid-19 on overall economic environment and on the Company, in particular, based on which it expects the demand to remain stable; and further, does not anticipate any challenge in the Company''s ability to continue as a going concern or meeting its financial obligations. The Company has additionally assessed its property, plant and equipment and intangible assets for impairment as on March 31, 2021. Based on projections, future outlook and carrying value of property, plant and equipment and intangible assets, there is no impairment charge that needs to be recognised. However, the above evaluations are based on internal and external information available upto the date of approval of these financial statements, which are very dynamic and subject to uncertainties that COVID-19 outbreak might pose on economic recovery.

3.59 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020.The Code has been published in the Gazette of India. However the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

3.60 Pursuant to Early Exit Scheme for Kolkata Manufacturing Unit, the Company has paid compensation amounting to ''325.68 lacs to its temporary workers for the year ended 31st March, 2020.

3.62 The Company has presented segment information in the consolidated financial statements which are presented in the same financial report. Accordingly, in terms of Paragraph 4 of Ind AS 108 ''Operating Segments'', no disclosures related to segments are presented in this standalone financial statements. The Chief Operating Decision Maker ("CODM") evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators considering a single business segment. The CODM reviews revenue and profit from operations as the performance indicator considering a single business segment. The CEO & CFO and Managing Director are the CODM of the Company.

The accompanying notes are an integral part of these standalone Ind AS financial statements.


Mar 31, 2019

1. COMPANY OVERVIEW

Emami Limited (“the Company”) is one of India’s leading FMCG Companies engaged in manufacturing & marketing of personal care & healthcare products with an enviable portfolio of household brand names such as BoroPlus, Navratna, Fair and Handsome, Zandu Balm, Kesh King, Zandu Pancharishta, Mentho Plus Balm and others.

The Company is a public limited company domiciled in India and is primarily listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The registered office of the Company is located at 687, Anandapur, E.M. Bypass, Kolkata, West Bengal.

2.1. BASIS OF PREPARATION

The standalone Ind AS financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to the Companies Act, 2013 .These standalone Ind AS financial statements are prepared under the historical cost convention on the accrual basis except for following assets and liabilities which have been measured at fair value or revalued amount :

a) Derivative financial instruments

b) Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments)

c) Defined benefit plans - plan assets

The standalone Ind AS financial statements were approved for issue in accordance with the resolution of the Board of Directors on 27th May, 2019.

(b) Terms and Rights attached to equity shares

The Company has only one class of equity shares having a par value of Re 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares & pays dividend in Indian Rupees. The dividend proposed by the board of directors is subject to the approval of the shareholders in the ensuing annual general meeting and is accounted for in the year in which it is approved by the shareholders in the general meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Nature and purpose of reserves Securities Premium

Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

General Reserve

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.

Capital Reserve

Capital Reserve has been primarily created on amalgamation in earlier years.

Retained Earnings

This Reserve represents the cumulative profits of the Company and effects of remeasurement of defined benefit obligations. This Reserve can be utilized in accordance with the provisions of the Companies Act, 2013. “

Other Comprehensive Income

This Reserve represents the cumulative gains (net of losses) arising on the revaluation of Equity Instruments measured at Fair Value through Other Comprehensive Income, net of amounts reclassified, if any, to Retained Earnings when those instruments are disposed of.

Notes :

1. Cash credit is repayable on demand & carries interest in the range of 7.9%-10% (31.03.2018 : Interest rate 7.9% - 8.5%)

2. Working Capital demand loan is repayable within 60 days & carries interest in the range of 7.5% - 9.2% (31.03.2018 : Interest rate 7.9% - 8.5%)

3. Packing credit is repayable within 6 months & carries interest in the range of 4.8%- 5.5% (31.03.2018 : Interest rate 4.8% -5.0%)

4. Commercial paper is repayable within 3 months & carries interest in the range of Nil (31.03.2018 : Interest rate 6.7% - 6.8%)

3.1 DEFINED BENEFIT PLAN (GRATUITY):

(i) The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The Gratuity Plan provides a jump sum payments to vested employees at retirement, death, incapacitation or termination of employment, of an amount equivalent to 15 days salary for each competed year of service. Vesting occurs on completion of 5 continuous years of service as per Indian law. However, no vesting condition applies in case of death.

The Company makes contributions to Himani Limited Gratuity Fund, J.B.Marketing and Services Employees Gratuity Fund, Zandu Pharmaceuticals Employees Gratuity Fund & Kemco Chemicals Employees Gratuity Fund, which is funded defined benefit plan for qualifying employees.

(ii) Details as per actuarial valuations recognised in the financial statements in respect of Employees benefit scheme.

(v) Sensitivity Analysis :-

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The results of sensitivity analysis is given below:

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

(vi) Effect of Plan on Entity’s Future Cash Flows

a) Funding arrangements and Funding Policy

The Company has purchased an insurance policy to provide for payment of gratuity to the employees. Every year, the insurance company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

b) Expected Contribution during the next annual reporting period

c) Maturity Profile of Defined Benefit Obligation

(vii) Description of Risk Exposures

Valuations are performed on certain basic set of pre determined assumptions and other regulatory frame work which may vary over time. Thus, the Company is exposed to various risks in providing the above gratuity benefit which are as follows:

Interest Rate risk: The plan exposes the Company to the risk off all in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).

Liquidity Risk: This is the risk that the Company is not able to meet the short-term gratuity pay outs. This may arise due to non availability of enough cash/cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan’s liability.

Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumptions considered for the valuation.

Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts. (e.g. Increase in the maximum limit on gratuity of RS. 20,00,000).

Asset Liability Mismatching or Market Risk: The duration of the liability is longer compared to duration of assets, exposing the Company to market risk for volatilities/fall in interest rate.

Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

3.2 DEFINED BENEFIT PLAN (PROVIDENT FUND)

(i) In respect of certain employees, provident fund contributions are made to a Trust administered by the Company.

The defined benefit obligation arises from the possibility that during any time period in the future, the scheme may earn insufficient investment income to meet the guaranteed interest rate declared by government/EPFO / relevant authorities.

The net defined benefit obligation as at the valuation date, thus, represents the excess of accrued account value plus interest rate guaranteed liability over the fair value of plan assets.

(ii) Details as per actuarial valuations recognised in the financial statements in respect of Employees benefit scheme.

(v) Liability sensitivity analysis

Significant actuarial assumptions for the determination of the guarantee inability are interest rate guarantee and discount rate.

The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The results of sensitivity analysis is given below:

Based on discussions with the solicitors/favourable decisions in similar cases/legal opinions taken by the Company ,the management believes that the Company has a good chance of success in above-mentioned cases and hence, no provision there against is considered necessary. The timing of outflow of resources is not ascertainable.

(b) EPCG Commitments : The Company had procured capital goods under the Export Promotion Capital Goods Scheme of the Government of India, at a concessional rate of customs duty / excise on an undertaking to fulfill quantified export obligation within the specified periods, failing which, the Company has to make payment to the Government of India equivalent to the duty benefit enjoyed along with interest. Related export obligation to be met is RS. 2,077.91 Lacs (31.03.2018 -RS. 4,629.54 Lacs). In addition, the Company needs to maintain the average annual export turnover of RS. 2,249.80 Lacs to meet the above export obligation. The Company is confident that the above export obligation will be met during the specified period.

(c) Other Commitments : The Company has commitment to make investments in 85,490 Compulsorily Convertible Preference Shares (CCPS) of RS. 10/- each to be issued by ‘Brilliare Science Private Limited’ amounting to RS. 600.00 Lacs @ RS. 701.85 per CCPS.

These valuations are based on valuations performed by the management based on the available market prices of the properties.

The Company has no restrictions on the reallsabiiity of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

The Company has not disclosed financial instruments such as cash and cash equivalents, other bank balances, trade receivables and trade payables at carrying value because their carrying amounts are a reasonable approximation of the fair values due to their short term nature.

3.3 FAIR VALUE HIERACHY

Level 1- Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of March 31, 2019 :

The fair value of financial instruments that are not traded in an active market is determined using market approach and valuation techniques which maximise the use of observable market data and reify as little as possible on entity-specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

There has been no change in the valuation methodology for Level 3 inputs during the year. There were no transfers between Level 1 and Level 2 during the year.

3.4 INCOME TAXES

A reconciliation of the income tax provision to the amount computed by applying the statutory income tax rate to the income before income taxes is summarised below :

Deferred Tax Assets for MAT Credit entitlement amounting to RS. 24866.39 Lacs (31.03.2018 - RS. 25,344.22 Lacs) has not been recognised considering that the availability of taxable profit against which such deductible temporary difference can be utilised cannot be ascertained with required level of certainty.

Proposed dividend on equity shares are subject to approval at the annual general meeting and are recognised as a liability (including DDT thereon) in the year in which it is approved by the shareholders.

* During the year, Bonus Shares were allotted on 25th June, 2018 in the ratio of 1 equity share of Re. 1 each for every 1 equity share. Therefore, previous year’s Dividend per share is not comparable.

3.5 LEASES

The lease rentals charged during the year is as under:

The obligations on long-term, non-cancellable operating leases payable as per the rentals stated in the respective agreements are as follows:

The operating lease arrangements are renewable on a periodic basis. The period of extension depends on mutual agreement. These lease agreements have price escalation clauses.

3.6 CAPITAL MANAGEMENT

The Company’s capital management is driven by its policy to maintain a sound capital base to support the continued development of its business. The Board of Directors seeks to maintain a prudent balance between different components of the Company’s capital. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Net debt is defined as current and non-current borrowings (including current maturity of long term debt and interest accrued) less cash and cash equivalents.

3.7 FINANCIAL RISK MANAGEMENT Financial risk factors

The Company’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company’s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk. The Company uses derivative financial instruments to mitigate foreign exchange related risk exposures.

Market risk Foreign Currency risk

The Company operates both in domestic market and internationally and consequently the Company is exposed to foreign exchange risk through its sales in overseas countries, and purchases from overseas suppliers in foreign currencies. The Company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures.

For the year ended 31.03.2019 and 31.03.2018, every percentage appreciation in the exchange rate between the Indian rupee and U.S. dollar, would increase the Company’s Profit before tax by approxRS.50.27 Lacs and RS.4.33 Lacs respectively.

Derivative financial instruments

The Company holds derivative financial instruments such as foreign currency forward to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank or a financial institution.

The table below analyzes the derivative financial instruments into relevant maturity groupings based on the remaining maturity period.

Commodity Price Risk

The Company is affected by the price volatility of its key raw materials. Its operating activities requires a continuous supply of key material for manufacturing of hair oil, talc, balm and other products. The Company’s procurement department continuously monitor the fluctuation in price and take necessary action to minimise its price risk exposure.

Security Price Risk

Securities price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded prices.

The Company invests its surplus funds in various mutual funds, debt instruments and equity instruments. These comprise of mainly liquid schemes of mutual funds, short term debt funds & income funds (duration investments) and certain quoted equity instruments. To manage its price risk arising from investments in mutual funds and equity instruments, the Company diversifies its portfolio. Mutual fund and equity investments are susceptible to market price risk, mainly arising from changes in the interest rates or market yields which may impact the return and value of such investments.

The Company’s exposer to securities price risk arises from investments in mutual funds and equity investments held by the Company and classified in the Balance Sheet as fair value through profit or loss / fair value through other comprehensive income is disclosed under Note No.3.43 “

Credit Risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to RS. 14,225.44 Lacs and RS. 7,002.74 Lacs as at 31.03.2019 and 31.03.2018, respectively. Trade receivables includes both secured and unsecured receivables and are derived from revenue earned from domestic and overseas customers. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. An impairment analysis is performed at each reporting date on an individual basis based on historical data of credit losses.

Liquidity Risk

The Company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations as well as investment in mutual funds. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.

3.8 CRITICAL ESTIMATES AND JUDGEMENTS

The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates and assumptions that affect the reported balances of assets and inabilities and disclosures relating to contingent assets and inabilities as at the date of the financial statements and reported amounts of income and expenses during the period. These estimates and associated assumptions are based on historical experience and management’s best knowledge of current events and actions the Company may take in future.

Information about critical estimates and assumptions that have a significant risk of causing material adjustment to the carrying amounts of assets and inabilities are included in the folioing notes:

i) Estimation of defined benefit obligations

The inabilities of the group arising from employee benefit obligations and the related current service cost, are determined on an actuarial basis using various assumptions Refer Note no. 3.35 for significant assumption used.

ii) Estimation of tax expenses, assets and payable

Deferred tax assets are recognised for unused tax credit and on unused losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax paining strategies.

Taxes recognized in the financial statements reflect management’s best estimate of the outcome based on the facts known at the balance sheet date. These facts include but are not limited to interpretation of tax laws of various jurisdictions where the company operates. Any difference between the estimates and finai tax assessments will impact the income tax as well the resulting assets and inabilities. Refer Note No. 3.21 and 3.45.

iii) Estimation of provisions and contingencies

Provisions are inabilities of uncertain amount or timing recognised where a legal or constructive obligation exists at the balance sheet date, as a result of a past event, where the amount of the obligation can be reliably estimated and where the outflow of economic benefit is probable. Contingent liabilities are possible obligations that may arise from past event whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events which are not fully within the control of the company. The Company exercises judgement and estimates in recognizing the provisions and assessing the exposure to contingent liabilities relating to pending litigations. Judgement is necessary in assessing the likelihood of the success of the pending claim and to quantify the possible range of financial settlement. Due to this inherent uncertainty in the evaluation process, actual losses may be different from originally estimated provision. Refer Note No. 3.27,3.37 and 3.40.

iv) Estimation of expected useful lives and residual values of property, plants and equipment and intangible assets.

Property, plant and equipment and intangible assets are depreciated/ amortized at historical cost using straight-line method based on the estimated useful life, taking into account residual value. The asset’s residual value and useful life are based on the Company’s best estimates and reviewed, and adjusted if required, at each Balance Sheet date. Refer Note No. 3.1, 3.2 & 3.3.

v) Impairment of intangible assets

The Company has significant intangible assets arising from the acquisition of brand, trademark, know-how etc. in the normal course of its business. There are indicators that the carrying value of the intangibles may not be recovered through its continuing use and hence, the management has performed impairment testing in accordance with Ind AS 36. Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget over the remaining useful life (including terminal value) and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested. Recoverability of these assets is based on forecast of projected cash flows over the remaining useful life of underlying intangible assets and their discounted present value (after considering terminal value), which are inherently highly judgmental and is subject to achieving forecasted results. Based on the impairment testing done, the Company believes that no impairment charge is required in this regard. “

vi) Fair Value Measurements

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair values are measured using valuation techniques which involve various judgements and assumptions that may differ from actual developments in the future. For further details refer Note No. 3.44

3.9 Pursuant to Voluntary Retirement Scheme at Kolkata Unit, the company has paid compensation amounting to RS. 979.89 Lacs (31.03.2018 - H Nil) to its employees which has been charged as exceptional expense.

3.10 On 25th January 2019, the Company has acquired Skin and Body Care brand “Creme 21”. The Company has recorded this transaction as asset acquisition as per Ind AS 38 and recognised the Brand under Intangible assets. The brand has been recorded at the amount of consideration paid along with the related transaction costs.

3.11 During the year Emami International FZE, Dubai a wholly owned Subsidiary of the company has incorporated its subsidiary namely “Emami Rus (LLC) in Russia and “Fentus 113. GMBH” in Germany which is registered with the Registrar of Companies of Russia and Germany respectively for business purpose.

The shareholders of the Company had approved issuance of Bonus shares on 9th June 2018. During the year, Bonus Shares were allotted on 25th June 2018 in the ratio of 1 equity share of Re. 1 each for every 1 equity share. Consequently, basis, diluted & cash earnings per share for previous year have been restated in terms of Ind AS 33, Earnings per Share.

3.12 The Company has presented segment information in the consolidated financial statements which are presented in the same financial report. Accordingly, in terms of Paragraph 4 of Ind AS 108 ‘Operating Segments’, no disclosures related to segments are presented in this standalone financial statements.

3.13 REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregated revenue information

Set out below is the disaggregation of the Company’s revenue from contracts with customers:

Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days. Contract liabilities includes advance from customers received for supply of goods.

Performance obligation Sale of products

The performance obligation is satisfied upon delivery/dispatch of the goods. Sales are made generally after receipt of advance except for certain customers where payment is due within 30 to 90 days from day of sales.

3.14 NEW AND AMENDED ACCOUNTING STANDARDS (IND AS)

A. Standards effective during the year

Ind AS 115 Revenue from Contracts with Customers

Ind AS 20 Government grant related to non-monetary asset

Appendix B to Ind AS 21 Foreign Currency Transactions and Advance Considerations

Ind AS 40 Investment Property

Ind AS 28 Long-term interests in associates and joint ventures

Ind AS 115 - Revenue from Contracts with Customers

Ind AS 115 was issued on 28 March 2018 and supersedes Ind AS 11 Construction Contracts and Ind AS 18 Revenue and it applies, with limited exceptions, to all revenue arising from contracts with its customers. Ind AS 115 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be recognised at an amount that reflects the consideration to which an entity expects to be entities in exchange for transferring goods or services to a customer.

Ind AS 115 requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers.

The Company adopted Ind AS 115 using the modified retrospective method of adoption with the date of initial application of 1 April 2018. The cumulative effect of initially applying Ind AS 115 under modified retrospective application approach is recognised at the date of initial application as an adjustment to the opening balance of retained earnings. Therefore, the comparative information was not restated and continues to be reported under Ind AS 11 and Ind AS 18.

The Company has done adjustments in respect of expected claims for volume rebates and return of damaged goods from its customers. The same is in the nature of variable consideration as per Ind AS 115 and should be netted off with Revenue. The Company has netted off the estimated cost of such rebates and returns to be incurred in the subsequent year based on actual claims made by the end- customer from revenue.

Following impact has been considered in respect of this adjustment:

As on April 1, 2018, provision for rebates & damage return amounting to RS. 977.13 iacs has been created with a corresponding debit to retained earnings of RS. 977.13 iacs.

Ind AS 20- Government grant related to non-monetary asset

The amendment clarifies that where the government grant related to asset, including non-monetary grant at fair value, shall be presented in balance sheet either by setting up the grant as deferred income or by deducting the grant in arriving at the carrying amount of the asset. Prior to the amendment, Ind AS 20 did not allow the option to present asset related grant by deducting the grant from the carrying amount of the asset. The Company has adopted the method of deducting grant from the carrying amount of the asset. However, this amendment does not have any significant impact on the financial statements

Appendix B to Ind AS 21 - Foreign Currency Transactions and Advance Considerations

The appendix clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary inability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are muitipie payments or receipts in advance, then the entity must determine the date of the transactions for each payment or receipt of advance consideration. This Interpretation does not have any significant impact on the financial statements.

Ind AS 40 - Transfers of Investment Property

The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management’s intentions for the use of a property does not provide evidence of a change in use. These amendments have been considered while transferring property into investment property.

Ind AS 28 - Long-term interests in associates and joint ventures

The amendments clarify that an entity applies Ind AS 109 to long-term interests in an associate or joint venture to which the equity method is not applied but that, in substance, form part of the net investment in the associate or joint venture (long-term interests). This clarification is relevant because it implies that the expected credit loss model in Ind AS 109 applies to such long-term interests.

The amendments also clarified that, in applying Ind AS 109, an entity does not take account of any losses of the associate or joint venture, or any impairment losses on the net investment, recognised as adjustments to the net investment in the associate or joint venture that arise from applying Ind AS 28 Investments in Associates and Joint Ventures.

The amendments should be applied retrospectively in accordance with Ind AS 8 for annual reporting periods on or after 1 April 2019. These amendments does not have any significant impact on the financial statements.

B. Standards issued but not effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2019 and Companies (Indian Accounting Standards) Second Amendment Rules, 2019 amending the following standard:

Ind AS 116 Standards Issued but not yet effective

Appendix C to Ind AS 12 Uncertainty over Income Tax Treatment Ind AS 109 Prepayment Features with Negative Compensation

Ind AS 19 Plan Amendment, Curtailment or Settlement

Ind AS 116 - Leases

Ind AS 116 Leases was notified on March 30, 2019 and it replaces Ind AS 17 Leases, including appendices thereto. Ind AS 116 is effective for annual periods beginning on or after April 1, 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under Ind AS 17. The standard includes two recognition exemptions for lessees - leases of ‘low-value’ assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset.

Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset.

Lessor accounting under Ind AS 116 is substantially unchanged from today’s accounting under Ind AS 17. Lessors will continue to classify all leases using the same classification principle as in Ind AS 17 and distinguish between two types of leases: operating and finance leases.

The Company intends to adopt this standard. However, adoption of this standard is not likely to have a significant impact in its Financial Statements.

Appendix C to Ind AS 12 - Uncertainty over Income Tax Treatment

The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of Ind AS 12 and does not apply to taxes or levies outside the scope of Ind AS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The Interpretation specifically addresses the following:

- Whether an entity considers uncertain tax treatments separately

- The assumptions an entity makes about the examination of tax treatments by taxation authorities

- How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates

- How an entity considers changes in facts and circumstances

An entity has to determine whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments. The approach that better predicts the resolution of the uncertainty should be followed. In determining the approach that better predicts the resolution of the uncertainty, an entity might consider, for example, (a) how it prepares its income tax filings and supports tax treatments; or (b) how the entity expects the taxation authority to make its examination and resolve issues that might arise from that examination.

The interpretation is effective for annual reporting periods beginning on or after 1 April 2019, but certain transition reliefs are available. The Company will apply the interpretation from its effective date.

Ind AS 109 - Prepayment Features with Negative Compensation

Under ind AS 109, a debt instrument can be measured at amortised cost or at fair value through other comprehensive income, provided that the contractual cash flows are ‘solely payments of principal and interest on the principal amount outstanding’ (the SPPI criterion) and the instrument is held within the appropriate business model for that classification. The amendments to Ind AS 109 clarify that a financial asset passes the SPPI criterion regardless of the event or circumstance that causes the early termination of the contract and irrespective of which party pays or receives reasonable compensation for the early termination of the contract.

The amendments should be applied retrospectively and are effective for annual periods beginning on or after 1 April 2019.

Ind AS 19 - Plan Amendment, Curtailment or Settlement

The amendments to Ind AS 19 address the accounting when a plan amendment, curtailment or settlement occurs during a reporting period. The amendments specify that when a plan amendment, curtailment or settlement occurs during the annual reporting period, an entity is required to:

- Determine current service cost for the remainder of the period after the plan amendment, curtailment or settlement, using the actuarial assumptions used to remeasure the net defined benefit liability (asset) reflecting the benefits offered under the plan and the plan assets after that event.

- Determine net interest for the remainder of the period after the plan amendment, curtailment or settlement using: the net defined benefit liability (asset) reflecting the benefits offered under the plan and the plan assets after that event; and the discount rate used to remeasure that net defined benefit liability (asset).

The amendments also clarify that an entity first determines any past service cost, or a gain or loss on settlement, without considering the effect of the asset ceiling. This amount is recognised in profit or loss.

An entity then determines the effect of the asset ceiling after the plan amendment, curtailment or settlement. Any change in that effect, excluding amounts included in the net interest, is recognised in other comprehensive income.

The amendments apply to plan amendments, curtailments, or settlements occurring on or after the beginning of the first annual reporting period that begins on or after 1 April 2019. These amendments will apply only to any future pian amendments, curtailments, or settlements of the Company.

C. Annual improvement to Ind AS (2018)

Ind AS 12 Income Tax

Ind AS 23 Borrowing Costs

Ind AS 12- Income Taxes

The amendments clarify that the income tax consequences of dividends are inked more directly to past transactions or events that generated distributable profits than to distributions to owners. Therefore, an entity recognises the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events.

An entity applies those amendments for annual reporting periods beginning on or after 1 April 2019. Since the Companies current practice is in line with these amendments, the Company does not expect any effect on its financial statements.

Ind AS 23- Borrowing Costs

The amendments clarify that an entity treats as part of general borrowings any borrowing originally made to develop a qualifying asset when substantially all of the activities necessary to prepare that asset for its intended use or sale are compete.

An entity applies those amendments to borrowing costs incurred on or after the beginning of the annual reporting period in which the entity first applies those amendments. An entity applies those amendments for annual reporting periods beginning on or after 1 Aprii 2019. Since the Companies current practice is in line with these amendments, the Company does not expect any effect on its financial statements.

The accompanying notes are an integral part of these financial statements


Mar 31, 2018

Notes -

(a) During the year Company has incorporated a wholly owned subsidiary company " Emami Indo Lanka Pvt Ltd" in Sri Lanka on 27th June, 2017.

(b) During the year, the Company has invested in 30.87% equity shares of Helios Lifestyle Private Limited consequent to which it has become an associate of the Company with effect from 7th December 2017. The investments includes commitment to further subscribe to 24,260 equity shares (9.74%) amounting to H 800 Lacs. The committed number of shares and its present value of H 744.19 Lacs is included in the investment details above.

1.EQUITY SHARE CAPITAL (Contd.)

(b) Terms and Rights attached to equity shares

The Company has only one class of equity shares having a par value of H 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares & pays dividend in Indian Rupees. The dividend proposed by the board of directors is subject to the approval of the shareholders in the ensuing annual general meeting and is accounted for in the year in which it is approved by the shareholders in the general meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Notes :

1. Cash credit is repayable on demand & carries interest in the range of 7.9% - 8.5%

2. Working capital demand loan is repayable within 20 days & carries interest in the range of 7.9% - 8.5% (31.03.2017 : Interest rate 8 - 8.5%)

3. Packing credit is repayable within 4 months & carries interest in the range of 4.8% - 5.0% (31.03.2017 : Interest rate 4.9 - 6.3%)

4. Commercial paper is repayable within 3 months & carries interest in the range of 6.7% - 6.8% (31.03.2017 : Interest rate 6.65%)

2. DEFINED BENEFIT PLAN (GRATUITY) :

i. The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The Gratuity Plan provides a lump sum payments to vested employees at retirement, death, incapacitation or termination of employment, of an amount equivalent to 15 days salary for each completed year of service.

The Company makes contributions to Himani Limited Gratuity Fund, J.B.Marketing and Services Employees Gratuity Fund, Zandu Pharmaceauticals Employees Gratuity Fund & Kemco Chemicals Employees Gratuity Fund, which is funded defined benefit plan for qualifying employees.

3. DEFINED BENEFIT PLAN (GRATUITY) : (Contd.)

vii. Description of Risk Exposures

Valuations are performed on certain basic set of pre-determined assumptions and other regulatory frame work which may vary over time. Thus, the Company is exposed to various risks in providing the above gratuity benefit which are as follows:

Interest Rate risk: The plan exposes the Company to the risk off all in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).

Liquidity Risk: This is the risk that the Company is not able to meet the short-term gratuity pay outs. This may arise due to non-availability of enough cash/cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.

Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts.

Asset Liability Mismatching or Market Risk: The duration of the liability is longer compared to duration of assets, exposing the Company to market risk for volatilities/fall in interest rate.

Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

4. DEFINED BENEFIT PLAN (PROVIDENT FUND) :

i. In respect of certain employees, provident fund contributions are made to a Trust administered by the Company.

The defined benefit obligation arises from the possibility that during any time period in the future, the scheme may earn insufficient investment income to meet the guaranteed interest rate declared by government/EPFO / relevant authorities.

The net defined benefit obligation as at the valuation date, thus, represents the excess of accrued account value plus interest rate guaranteed liability over the fair value of plan assets.

Based on discussions with the solicitors/favorable decisions in similar cases/legal opinions taken by the Company, the management believes that the Company has a good chance of success in above-mentioned cases and hence, no provision there against is considered necessary. The timing of outflow of resources is not ascertainable.

(b) EPCG Commitments : The Company had procured capital goods under the Export Promotion Capital Goods Scheme of the Government of India, at a concessional rate of customs duty / excise on an undertaking to fulfill quantified export obligation within the specified periods, failing which, the Company has to make payment to the Government of India equivalent to the duty benefit enjoyed along with interest. Related export obligation to be met is RS, 4,629.54 Lacs (31.03.2017 -RS, 10,736.70 Lacs). In addition, the Company needs to maintain the average annual export turnover of RS, 2,209.55 Lacs to meet the above export obligation. The Company is confident that the above export obligation will be met during the specified period.

(c) Other Commitments : The Company has commitment to make investments in 1,13,986 Compulsorily Convertible Preference Shares (CCPS) of RS, 10/- each to be issued by ''Brilliare Science Private Limited'' amounting to RS, 800.00 Lacs @ RS, 701.85 per CCPS.

*Carrying Value of assets / liabilities carried at amortized cost are reasonable approximation of its fair values.

The Company has disclosed financial instruments such as cash and cash equivalents, other bank balances, trade receivables and trade payables at carrying value because their carrying amounts are a reasonable approximation of the fair values due to their short term nature.

5. FAIR VALUE HIERARCHY

Level 1- Quoted prices (unadjusted ) in active markets for identical assets or liabilities

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as at 31.03.2018:

Deferred Tax Assets for MAT Credit entitlement amounting to RS, 25,344.22 Lacs (31.03.2017 - RS, 22,666.51 Lacs) has not been recognized considering that the availability of taxable profit against which such deductible temporary difference can be utilized, cannot be ascertained with required level of certainty.

Proposed dividend on equity shares are subject to approval at the annual general meeting and are recognized as a liability (including DDT thereon) in the year in which it is approved by the shareholders.

The operating lease arrangements are renewable on a periodic basis. The period of extension depends on mutual agreement. These lease agreements have price escalation clauses.

6. CAPITAL MANAGEMENT

The Company''s capital management is driven by its policy to maintain a sound capital base to support the continued development of its business. The Board of Directors seeks to maintain a prudent balance between different components of the Company''s capital. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep the gearing ratio between 10% and 25%. Net debt is defined as current and non-current borrowings (including current maturity of long term debt and interest accrued) less cash and cash equivalents.

7. FINANCIAL RISK MANAGEMENT Financial risk factors

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk. The Company uses derivative financial instruments to mitigate foreign exchange related risk exposures.

Market risk

The Company operates both in domestic market and internationally and consequently the Company is exposed to foreign exchange risk through its sales in overseas countries, and purchases from overseas suppliers in foreign currencies. The Company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures.

For the year ended 31.03.2018 and 31.03.2017, every percentage appreciation in the exchange rate between the Indian rupee and U.S. dollar, would affect the Company''s Profit before tax by approx RS, 4.33 Lacs and RS, 15.00 Lacs respectively.

Derivative financial instruments

The Company holds derivative financial instruments such as foreign currency forward to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank or a financial institution.

The table below analyzes the derivative financial instruments into relevant maturity groupings based on the remaining maturity period.

Commodity Price Risk

The Company is affected by the price volatility of its key raw materials. Its operating activities requires a continuous supply of key material for manufacturing of hair oil, talc, balm and other products. The Company''s procurement department continuously monitor the fluctuation in price and take necessary action to minimize its price risk exposure.

Security Price Risk

Securities price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded prices.

8. FINANCIAL RISK MANAGEMENT (Contd.)

The Company invests its surplus funds in various debt instruments and equity instruments. These comprise of mainly liquid schemes of mutual funds, short term debt funds & income funds (duration investments) and certain quoted equity instruments. To manage its price risk arising from investments in mutual funds and equity instruments, the Company diversifies its portfolio. Mutual fund and equity investments are susceptible to market price risk, mainly arising from changes in the interest rates or market yields which may impact the return and value of such investments.

The Company''s exposer to securities price risk arises from investments in mutual funds and equity investments held by the Company and classified in the Balance Sheet as fair value through profit or loss / fair value through other comprehensive income is disclosed under Note No. 3.43

Credit Risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to RS, 7,002.74 Lacs and RS, 3,413.19 Lacs as at 31.03.2018 and 31.03.2017, respectively. Trade receivables includes both secured and unsecured receivables and are derived from revenue earned from domestic and overseas customers. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. An impairment analysis is performed at each reporting date on an individual basis based on historical data of credit losses.

Liquidity Risk

The Company''s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations as well as investment in mutual funds. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

The table below provides details regarding the contractual maturities of significant financial liabilities.

B. Other Related Parties with whom transactions have taken place during the period

i) Key Management Personnel

1 Shri R. S. Agarwal Chairman

2 Shri R. S. Goenka Executive Director

3 Shri Sushil Kr. Goenka Managing Director

4 Smt. Priti Sureka Executive Director

5 Shri Mohan Goenka Executive Director

6 Shri H. V. Agarwal Executive Director

7 Shri Prashant Goenka Executive Director

8 Sri N.H. Bhansali CEO - Finance, Strategy & Business Development and CFO

9 Sri Arun Kumar Joshi Company Secretary & VP- Legal

9. RELATED PARTY TRANSACTIONS (Contd.)

ii) Other Directors

1 Shri Aditya Vardhan Agarwal Non Executive Director

2 Shri K.N.Memani Independent Director

3 Shri Amit Kiran Deb Independent Director

4 Shri Y.PTrivedi Independent Director

5 Shri S.B.Ganguly Independent Director

6 Shri Sajjan Bhajanka Independent Director (Ceased w.e.f. 2nd August, 2017)

7 Shri P.K.Khaitan Independent Director

8 Shri M.D.Mallya Independent Director

9 Shri C.K.Dhanuka Independent Director (Appointed from 2nd August, 2017)

10 Smt. Rama Bijapurkar Independent Director

iii) Relatives of Key Management Personnel

1 Ms. Usha Agarwal 17 Ms.Shreya Goenka

2 Ms. Saroj Goenka 18 Ms.Vidula Agarwal

3 Ms. Indu Goenka 19 Shri Suresh Kr. Goenka

4 Ms. Rachna Bagaria 20 Shri Madan Lal Agarwal

5 Ms. Laxmi Devi Bajoria 21 Shri Raj Kr. Goenka

6 Ms. Jyoti Agarwal 22 Shri Manish Goenka

7 Ms.Pooja Goenka 23 Shri Jayant Goenka

8 Ms.Smriti Agarwal 24 Shri Sachin Goenka

9 Ms. Sobhna Agarwal 25 Shri Rohin Raj Sureka

10 Ms.Vidisha Agarwal 26 Shri Vibhash Vardhan Agarwal

11 Ms.Avishi Sureka 27 Shri Yogesh Goenka

12 Ms. Jyoti Goenka 28 Shri Saswat Goenka

13 Ms. Mansi Agarwal 29 Ms. Chikky Goenka

14 Ms. Rachna Goenka 30 Ms. Vidhishree Agarwal

15 Ms.Rashmi Goenka 31 Shri Vihan Vardhan Agarwal

16 Ms.Richa Agarwal

iv) Entities where Key Management Personnel and their relatives have significant influence

1 Suntrack Commerce Private Limited 13 AMRI Hospital Limited

2 Diwakar Viniyog Private Limited 14 Zandu Realty Limited

3 Bhanu Vyapaar Private Limited 15 Prabhakar Viniyog Private Limited

4 Suraj Viniyog Private Limited (Formerly known as Emami High Rise Pvt. Ltd.)

5 Emami Paper Mills Limited 16 Ravi Raj Viniyog Private Limited

6 Emami Cement Limited (Formerly known as Emami Enclave Makers Pvt. Ltd)

7 Emami Frank Ross Limited 17 Emami Nirman Private Limited

8 Pan Emami Cosmed Limited 18 Emami Vriddhi Commercial Private Limited

9 Emami Infrastructure Limited 19 Emami Estates Private Limited

10 Emami Agrotech Limited 20 Emami Projects Private Limited

11 CRI Limited 21 Emami Capital Markets Limited

12 Aviro Vyapar Private Limited 22 Emami Group Of Companies Private Limited

10. RELATED PARTY TRANSACTIONS (Contd.)

iv) Entities where Key Management Personnel and their relatives have significant influence

23 Emami Home Private Limited 27 Emami (Meghalaya) Cement Limited

24 Emami Centre for Creativity Pvt. Ltd. 28 Emami Natural Resouces Private Limited (Formerly known as Emami Institute 29 Emami Constructions Private Limited

Of Corporate Solutions Private 30 Emami Buildcon Private Limited

Limited)

31 Dev Infracity Private Limited

25 Emami Power Limited

32 Emami Beverage Limited

26 Narcissus Bio-Crops Private

33 TMT Viniyogan Limited

Limited (Formerly known as Emami

International Private Limited) 34 EPL Securities

v) Trust where Key Management Personnel and their relatives have significant influence

1 Himani Limited Staff Provident Institution

2 Emami Foundation

3 Aradhana Trust

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.

11. RECENT INDIAN ACCOUNTING STANDARDS (IND AS)

Ministry of Corporate Affairs ("MCA") through Companies (Indian Accounting Standards) Amendment Rules, 2018 has notified the following new and amendments to Ind AS''s which the Company has not applied as they are effective for annual periods beginning on or after April 1, 2018:

Ind AS 115 Revenue from Contracts with Customers

Ind AS 21 The Effect of Changes in Foreign Exchange Rates

Ind AS 12 Income Taxes

Ind AS 40 Investment Property

Ind AS 28 Investments in Associates and Joint ventures Ind AS 115 - Revenue from Contracts with Customers

The Company is currently evaluating the impact of implementation of Ind AS 115 "Revenue from Contracts with Customers" which is applicable to it w.e.f 01.04.2018. However, based on the evaluation done so far and based on the arrangement that the Company has with its customers for sale of its products, the implementation of Ind AS 115 will not have any significant recognition and measurement impact. However, there will be additional presentation and disclosure requirement, which will be provided in the next year''s financial statements.

Ind AS 21 - The Effect of Changes in Foreign Exchange Rates

The amendment clarifies on the accounting of transactions that include the receipt or payment of advance consideration in a foreign currency. The appendix explains that the date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability. If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt. The Company is evaluating the impact of this amendment on its financial statements.

Ind AS 12 - Income Taxes

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.

Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognized in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief must disclose that fact.

These amendments are effective for annual periods beginning on or after 1 April 2018. These amendments are not expected to have any impact on the Company as the Company has no deductible temporary differences or assets that are in the scope of the amendments.

Ind AS 40 - Investment Property

The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management''s intentions for the use of a property does not provide evidence of a change in use.

Entities should apply the amendments prospectively to changes in use that occur on or after the beginning of the annual reporting period in which the entity first applies the amendments. An entity should reassess the classification of property held at that date and, if applicable, reclassify property to reflect the conditions that exist at that date. Retrospective application in accordance with Ind AS 8 is only permitted if it is possible without the use of hindsight.

Ind AS 28 - Investments in Associates and Joint ventures

Clarification that measuring investees at fair value through profit or loss is an investment-by-investment choice :

i) An entity that is a venture capital organization, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss

ii) If an entity, that is not itself an investment entity, has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate''s or joint venture''s interests in subsidiaries. This election is made separately for each investment entity associate or joint venture, at the later of the date on which: (a) the investment entity associate or joint venture is initially recognized; (b) the associate or joint venture becomes an investment entity; and (c) the investment entity associate or joint venture first becomes a parent.

The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. These estimates and associated assumptions are based on historical experience and management''s best knowledge of current events and actions the Company may take in future.

Information about critical estimates and assumptions that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities are included in the following notes:

i) Estimation of defined benefit obligations

The liabilities of the Company arising from employee benefit obligations and the related current service cost, are determined on an actuarial basis using various assumptions Refer Note No. 3.34 for significant assumption used.

ii) Estimation of current tax expenses and payable

Taxes recognized in the financial statements reflect management''s best estimate of the outcome based on the facts known at the balance sheet date. These facts include but are not limited to interpretation of tax laws of various jurisdictions where the company operates. Any difference between the estimates and final tax assessments will impact the income tax as well the resulting assets and liabilities. Refer Note No. 3.20 and 3.44.

iii) Estimation of provisions and contingencies

Provisions are liabilities of uncertain amount or timing recognized where a legal or constructive obligation exists at the balance sheet date, as a result of a past event, where the amount of the obligation can be reliably estimated and where the outflow of economic benefit is probable. Contingent liabilities are possible obligations that may arise from past event whose existence will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events which are not fully within the control of the company. The Company exercises judgment and estimates in recognizing the provisions and assessing the exposure to contingent liabilities relating to pending litigations. Judgment is necessary in assessing the likelihood of the success of the pending claim and to quantify the possible range of financial settlement. Due to this inherent uncertainty in the evaluation process, actual losses may be different from originally estimated provision. Refer Note No. 3.26, 3.36 and 3.39.

iv) Estimation of expected useful lives and residual values of property, plants and equipment

Property, plant and equipment are depreciated at historical cost using straight-line method based on the estimated useful life, taken into account at residual value. The asset''s residual value and useful life are based on the Company''s best estimates and reviewed, and adjusted if required, at each Balance Sheet date. Refer Note No. 3.1.

v) Fair Value Measurements

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair values are measured using valuation techniques which involve various judgments and assumptions that may differ from actual developments in the future. For further details refer Note No. 3.43

12. The Board has recommended issue of Bonus Shares in the ratio of 1 : 1 i.e. issue of 1 share for every 1 equity share held by the Shareholders of the Company. The Bonus is subject to approval of shareholders to be sought through postal ballot. The Bonus issue if approved by the shareholders shall be entitled for Dividend for the financial year 2018-19 and thereafter.

13. The Company has presented segment information in the consolidated financial statements which are presented in the same financial report. Accordingly, in terms of Paragraph 4 of Ind AS 108 ''Operating Segments'', no disclosures related to segments are presented in this standalone financial statements.

14. The Ind AS financial statements of the Company for the year ended March 31, 2017, included in these Ind AS financial statements, have been audited by a firm of Chartered Accountants other than S.R. Batliboi & Co. LLP


Mar 31, 2017

1. Company Overview

Emami Limited ("the Company") is one of India’s leading FMCG Companies engaged in manufacturing & marketing of personal care & healthcare products with an enviable portfolio of household brand names such as BoroPlus, Navratna, Fair and Handsome, Zandu Balm, Kesh King, Zandu Pancharishta, Mentho Plus Balm and others. The Company is a public limited company domiciled in India and is primarily listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The registered office of the Company is located at 687,Anandapur, E.M. Bypass, Kolkata, West Bengal.

2.1 First-Time Adoption of Ind-AS

These standalone financial statements of Emami Limited for the year ended March 31, 2017 have been prepared in accordance with Ind AS. For the purposes of transition to Ind AS, the Company has followed the guidance prescribed in Ind AS 101-First Time Adoption of Indian Accounting Standards, with April 1, 2015 as the transition date and IGAAP as the previous GAAP

The transition to Ind AS has resulted in changes in the presentation of the financial statements, disclosures in the notes thereto and accounting policies and principles. The accounting policies set out in Note 1 have been applied in preparing the standalone financial statements for the year ended March 31, 2017 and the comparative information. An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s Balance Sheet, Statement of Profit and Loss, is set out in note 2.2.1 and 2.2.2. Exemptions on first time adoption of Ind AS availed in accordance with Ind AS 101 have been set out in note 2.1.1 .

2.1.1 Exemptions availed on first time adoption of Ind-AS 101

Ind-AS 101 allows first-time adopters certain exemptions from thereto respective application of certain requirements under Ind AS. The Company has accordingly applied the following exemptions:

(a) Business Combination

In accordance with Ind AS 101, the Company has elected not to restate business combinations that occurred before the date of transition i.e 1st April 2015. In view of the same, the Indian GAAP carrying amounts of assets and liabilities, that are required to be recognised under Ind AS, is their deemed cost at the date of the acquisition. After the date of the acquisition, measurement is in accordance with respective Ind AS.

(b) Property Plant and Equipment, Intangible Assets and Investment Properties

In accordance with Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP for all the items of Property, Plant and Equipment. The same election has been made in respect of intangible assets and investment property also.

(c) Designation of previously recognised financial instruments

Ind AS 101 permits an entity to designate particular equity investments (other than equity investments in subsidiaries, associates and joint arrangements) as at fair value through other comprehensive income (FVOCI) based on facts and circumstances at the date of transition to Ind AS (rather than at initial recognition). Other equity investments are classified at fair value through profit or loss (FVPL).

The Company has opted to avail this exemption to designate certain equity investments as FVOCI on the date of transition.

(d) Investment in Subsidiaries

Under previous GAAP, investment in subsidiaries were stated at cost and provisions made to recognise decline, other than temporary. Under Ind AS, the company has elected to regard such carrying amount as at 31st March 2015, as deemed cost at the date of transition.

2.2 Reconciliation

The following reconciliation provides the effect of transition to Ind AS from IGAAP in accordance with Ind AS 101

1. Equity as at April 1, 2015 and March 31, 2016

2. Net profit for the year ended March 31, 2016

Explanations for reconciliation of Balance Sheet as previously reported under IGAAP to IND AS

a. In accordance with Ind AS 40, the company has reclassified land & buildings to investment property. Under previous GAAP, this was disclosed as a part of Property, Plant & Equipment.

b. In accordance with Ind AS 103, acquisition cost capitalised under previous GAAP has been expensed out.

c. Under previous GAAP, non- current investments were stated at cost. Where applicable, provision was made to recognise a decline, other than temporary, in valuation of such investments. Under Ind AS, financial assets in equity instruments other than investment in subsidiaries have been classified as Fair Value Through Other Comprehensive Income (FVTOCI) through an irrevocable election at the date of transition.

d. Under previous GAAP, current investments were stated at lower of cost and fair value, under Ind AS, these financial assets have been classified as fair value through profit or loss on the date of transition and fair value changes after the date of transition has been recognised in profit or loss.

e. Under previous GAAP, the premium or discount on derivative instruments were expensed over the period of the contract. Under Ind AS, the net mark to market loss/gain on fair valuation of such instruments are recognised in Statement of Profit & Loss.

f. Under previous GAAP, dividend payable is recognised as a liability in the period to which it relates. Under Ind AS, dividends to shareholders are recognised when declared by the members in a general meeting.

g. Under previous GAAP, Grant or Subsidy relating to assets were shown as part of capital reserve. Under Ind AS, such grants are treated as deferred income and are recognized as other income in the Statement of Profit & Loss on a systematic and rational basis over the useful life of the asset.

h. Adjustments to retained earnings, other comprehensive income and deferred tax has been made in accordance with Ind AS, for the above mentioned line items. In addition, as per Ind-AS 19, actuarial gains and losses are recognized in other comprehensive income as compared to being recognized in the statement of profit and loss under IGAAP

Explanations for Reconciliation of Profit and Loss as previously reported under IGAAP to IND AS

a. Under Ind AS, revenue from sales of goods is inclusive of excise duty and are net of sales tax, discounts and secondary trade promotions. Under previous GAAP, sales included sales tax but was shown net of excise duty. Secondary promotions linked to sales was disclosed as part of advertisement & promotion under other expenses. Field Force expenses has been shown as part of employee benefit expenses.

b. Under Ind AS, Grants/Subsidy earlier treated as reserve now considered as deferred income and amortized to income based on the useful life of assets against which the same was received.

c. Under Ind AS, Mutual Funds, Forward & Option Contracts have been measured at Fair Valued Through Profit or Loss (FVTPL). Under Ind AS, financial assets in equity instruments other than investment in subsidiaries have been classified as Fair Value Through Other Comprehensive Income (FVTOCI) through an irrevocable election at the date of transition.

d. Under Ind AS, Actuarial Gain/Loss on Gratuity routed through Other Comprehensive Income instead of profit or loss.

e. Acquisition related costs expensed off instead of being capitalized with intangible assets.

2.2.1 Cash flow statement

There were no significant reconciliation items between cash flows prepared under IGAAP and those prepared under Ind AS.

Sensitivity Analysis :-

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The results of sensitivity analysis is given below:

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

There is no change in the method of valuation for the prior period.

Effect of Plan on Entity’s Future Cash Flows

a) Funding arrangements and Funding Policy

The Company has purchased an insurance policy to provide for payment of gratuity to the employees. Every year, the insurance company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

For Leave, the Scheme is partly managed on funded basis.

b) Expected Contribution during the next annual reporting period

c) Maturity Profile of Defined Benefit Obligation

Liability sesitivity analysis

Significant actuarial assumptions for the detemination of the guarantee liability are interest rate gaurantee and discount rate.

The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The results of sensitivity analysis is given below: 3.36

The Company has made a provision of Rs. 126.48 Lacs (P.Y.- 105.89 Lacs) towards Indirect Taxes resulting mainly from issues, which are under litigation/dispute as shown below :

3.1

There were no dues outstanding for more than 45 days to any Micro, Small and Medium Enterprises Creditor. The above information regarding Micro, Small and Medium Enterprise has been determined to the extent such communication has been received from the respective parties by the company.

3.2

Long Term Loans & Advances include Security Deposit of Rs. 5.75 Lacs (P.Y.-Rs. 5.85 Lacs) due from Directors of the Company against tenancies. (Maximum amount outstanding during the year - Rs. 5.85 Lacs (P.Y.-Rs. 7.04 Lacs).

3.3 Contingent Liabilities & Commitments I) Contingent Liabilities:

Note: Contingent Liability disclosed above represent possible obligations where the possibility of cash outflow to settle the obligation is remote and is exclusive of interest and penalty. (if any)

In addition, the company is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The company’s management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the company’s results of operations and financial condition.

3.4 DISCLOSURE ON SPECIFIED BANK NOTES (SBN’S)

During the year, the Company had specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated March 31, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December, 30 2016, the denomination wise SBNs and other notes as per the notification is given below :

3.5 FAIR VALUE HIERACHY

Level 1 - Quoted prices (unadjusted ) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The operating lease arrangements, are renewable on a periodic basis and for most of the leases extend upto a maximum of ten years from their respective dates of inception and relates to rented premises. Some of these lease agreements have price escalation clauses.

3.6 FINANCIAL RISK MANAGEMENT Financial risk factors

The Company’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company’s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk. The Company uses derivative financial instruments to mitigate foreign exchange related risk exposures.

Market risk Foreign Currency risk

The Company operates both in domestic market and internationally and a major portion of the business is transacted in foreign currencies and consequently the Company is exposed to foreign exchange risk through its sales in overseas countries, and purchases from overseas suppliers in foreign currencies. The Company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures.

For the year ended March 31, 2017 and March 31, 2016, every percentage appreciation in the exchange rate between the Indian rupee and U.S. dollar, has affected the Company’s Profit before tax by approx Rs. 24.53 Lacs.

Derivative financial instruments

The Company holds derivative financial instruments such as foreign currency forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank or a financial institution.

Credit Risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to Rs. 3413.19 Lacs and Rs. 5063.28 Lacs as of March 31, 2017 and March 31, 2016, respectively. Trade receivables includes both secured and unsecured receivables and are derived from revenue earned from domestic and overseas customers. Credit risk has always been managed by the group through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Group grants credit terms in the normal course of business.

Credit risk on cash and cash equivalents is limited as we generally invest in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies. Investments primarily include investment in liquid mutual fund units, certificates of deposit which are funds deposited at a bank for a specified time period.

Liquidity Risk

The company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations as well as investment in mutual funds. The company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

As of March 31, 2017, the Company had a working capital of Rs. 7255.24 Lacs (PY. Rs. 2747.67 Lacs).

3.7

The underspend in the CSR activities in financial year 2016-17 amounting Rs. 191.63 Lacs was mainly due to extraneous factors and also due to better planning and negotiations which resulted in savings despite carrying the activities as envisaged . Besides, some projects are multiyear projects and so expenditure can be done stages/ year wise which may result in lower expenditure in a particular year.

3.8

Commercial production of the Company’s Newly setup plant in Pacharia, Dolapathar, Kamrup, Assam has commenced from 23rd February 2017.

3.9

On 12th June 2015, the Company acquired Hair & Scalp Care business under the "Kesh King" and allied Brands at Rs 1,68,400 Lacs (Including duties & taxes). Intangible Assets viz. Brands/Trademarks including Goodwill has been valued based on valuation report of an expert. In accordance with the provisions of Ind AS 38- Intangible Assets, the management has estimated useful life of various intangible assets at 5 to 10 years, except Goodwill of Rs 1,050 Lacs which has been charged to the statement of profit & loss. For the year ended 31st March 2017, amortisation of acquired Trade Marks/ Brands includes Rs 23,996.68 Lacs (P Y Rs 19,517 lacs) respectively provided on intangible assets of ‘Kesh king’ business on pro-rata basis.

3.10

Previous year’s figures have been rearranged/regrouped wherever necessary


Mar 31, 2014

1.1 CONTINGENT LIABILITIES & COMMITMENTS

Rs.in Lacs

Particulars 31st March, 2014 31st March, 2013

i) Contingent Liabilities

(a) Claims against the Company not acknowledged as debt (Net of Advances) :

i) Excise Duty demands 254.04 516.78

ii) Sales Tax demands under appeal 885.04 833.62

iii) Entry Tax 133.51 11.28

iv) Others 45.47 45.47

Note : Contingent Liability disclosed above represent possible obligations where the possibility of cash outflow to settle the obligation is remote and is exclusive of interest and penalty (if any).

(b) Guarantees and counter guarantees given 5,913.32 5,300.56

1.2 The Company has entered into a Put Option Contract Agreement with ICICI Bank and Emami Paper Mills Limited in connection with the External Commercial Borrowings facilities availed of by Emami Paper Mills Limited from ICICI Bank for a sum of USD 20.62 lacs equivalent to H1,239.56 lacs (P.Y. USD 48.10 lacs equivalent to H2,616.13 lacs)

1.3 The Company has opted to follow the extension for accounting the exchange differences arising on long term foreign currency monetary items in line with Companies (Accounting Standard) Amendment Rules, 2009 on Accounting Standard 11 relating to "The Effects of Changes in Foreign Exchange Rates" notified by Government of India on March 31, 2009 and as amended by Notification No. G.S.R 378(E), dated 11th May, 2011 & G.S.R 913(E), dated 29th December, 2011.

As per the above notification,Foreign exchange loss of Rs. Nil (P.Y. Rs.54.57 lacs) has been charged to the Statement of Profit & Loss and Rs.664.82 lacs (PY H490.70 lacs) has been capitalised as cost of capital assets.

1.4 Miscellaneous Receipt includes EPCG benefits amounting to Rs. Nil (P.Y.- Rs. 536.49 lacs)

1.5 Miscellaneous Expenses includes contribution to Bharatiya Janata Party amounting to Rs.2.00 Lacs (P.Y. Rs. Nil)

1.6 Exchange differences on the principal amount of the foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs as mandated by paragraph 4(e) of Accounting Standard 16 have been disclosed under note " Finance Cost". Such exchange differences on principal amount of foreign borrowing are not interest on the foreign borrowing.

1.7 The company has reviewed the useful lives of all the tangible assets on which depreciation was provided on straight line basis as stated in accounting policy Note 1(iv). Consequent to this,the charge of depreciation for the year is higher by Rs.1,100.77 lacs and the net block of fixed assets and reserves and surplus are lower by Rs1,100.77 lacs.

1.8 RELATED PARTY TRANSACTIONS

B. Other Related Parties with whom transactions have taken place during the year

i) Key Management Personnel

1 Shri R. S. Agarwal

2 Shri R. S. Goenka

3 Shri Sushil Kr. Goenka

ii) Relatives of Key Management Personnel

1 Smt. Usha Agarwal

2 Smt. Saroj Goenka

3 Smt. Priti. A Sureka

4 Smt. Indu Goenka

5 Smt. Rachna Bagaria

6 Smt. Laxmi Devi Bajoria

7 Shri Suresh Kr. Goenka

8 Shri Raj Kr. Goenka

9 Shri Mohan Goenka

10 Shri A. V. Agarwal

11 Shri Manish Goenka

12 Shri H. V. Agarwal

13 Shri Jayant Goenka

14 Shri Sachin Goenka

15 Shri Madan Lal Agarwal

iii) Entities where Key Management Personnel and their relatives have significant influence

1 Suntrack Commerce Private Limited

2 Bhanu Vyapaar Private Limited

3 Diwakar Viniyog Private Limited

4 Suraj Viniyog Private Limited

5 Emami Paper Mills Limited

6 Aviro Vyapar Private Limited

7 Emami High Rise Private Limited

8 Emami Enclave Makers Private Limited

9 Emami Foundation

10 Aradhana Trust

11 Bansilal Jankidevi Agarwal Trust

1.9 Previous year''s figures have been rearranged/regrouped wherever necessary.


Mar 31, 2013

1.1 Denvative Instruments:

The Company uses Forward Exchange Contracts and Options to hedge its risk associated with fluctuations in foreign currency and interest rates relating to foreign currency liabilities and some forecasted transactions related to foreign currency trade. The use of forward contracts and options is governed by company''s overall strategy. The company does not use forward contract and options for speculative purposes.

There were no dues outstanding for more than 45 days to any Micro, Small and Medium Enterprises Creditor. The above information regarding Micro, Small and Medium Enterprise has been determined to the extent such communication has been received from the respective parties by the company. This has been relied upon by the Auditors.

Long Term Loans & Advances include Security Deposit of H 9.15 Lacs (P.Y.-H 15.67 Lacs) due from Directors of the Company against tenancies. {Maximum amount outstanding during the year - H 15.67 Lacs (P.Y.-H 15.77 Lacs)}.

The Company has entered into a Put Option Contract Agreement with ICICI Bank and Emami Paper Mills Limited in connection with the External Commercial Borrowings facilities availed of by Emami Paper Mills Limited from ICICI Bank for a sum of USD 4.81 million.

The Company has opted to follow the extension for accounting the exchange differences arising on long term foreign currency monetary items in line with Companies (Accounting Standard) Amendment Rules 2009 on Accounting Standard 11 relating to "The Effects of Changes in Foreign Exchange Rates" notified by Government of India on March 31, 2009 and as amended by Notification No. G.S.R 378(E), dated 11th May, 2011 & G.S.R 913(E), dated 29th, December, 2011.

As per the above notification,Foreign exchange loss of H 54.57 lacs has been charged to the Statement of Profit & Loss.

Miscellaneous Receipt includes EPCG benefits amounting to H 536.49 lacs (P.Y.- H 1,502.67 lacs)

Miscellaneous Expenses includes contribution to Assam Pradesh Congress Committee amounting to Nil (P.Y.- H 10 lacs) Amount due and outstanding to be credited to Investor Education and Protection Fund - Nil (P.Y. - Nil)

Exchange differences on the principal amount of the foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs as mandated by paragraph 4(e) of Accounting Standard 16 have been disclosed under note " Finance Cost". Such exchange differences on principal amount of foreign borrowing are not interest on the foreign borrowing.

1.2 Re1ated Party Transactions :

A. Parties where Control exists :

B. Other Related Parties with whom transactions have taken place during the year

i) Key Management Personnel

1. Shri R. S. Agarwal

2. Shri R. S. Goenka

3. Shri Sushil Kr. Goenka

ii) Relatives of Key Management Personnel

1. Smt. Usha Agarwal

2. Smt. Saroj Goenka

3. Shri Suresh Kr. Goenka

4. Shri Raj Kr. Goenka

5. Shri Mohan Goenka

6. Shri A. V. Agarwal

7. Shri Manish Goenka

8. Shri H. V. Agarwal

9. Smt. Priti Sureka

iii) Entities where Key Management Personnel and their relatives have significant influence

1. Diwakar Viniyog Private Limited

2. Suntrack Commerce Private Limited

3. Emami Paper Mills Limited

4. Emami Foundation

5. Aradhana Trust

6. Emami Infrastructure Limited

7. Emami Realty Limited

8. Zandu Realty Limited

9. Aviro Vyapar Private Limited

10. K.D.Goenka & Sons HUF (Ceased w.e.f. 16.11.2012)

11. R.S.Agarwal HUF (Ceased w.e.f. 16.11.2012)

2 Previous year''s figures have been rearranged/regrouped wherever necessary.


Mar 31, 2012

1.0 a. Business Segment

As the Company's business activity falls within a single primary business segment,viz."Personal and Healthcare", the disclosure requirements of Accounting Standard-17 "Segment Reporting", notified in the companies Accounting Standard Rules, 2006 are not applicable.

2. Derivative Instruments:

The Company uses Forward Exchange Contracts and Options to hedge its risk associated with fluctuations in foreign currency and interest rates relating to foreign currency liabilities and some forecasted transactions related to foreign currency trade. The use of forward contracts and options is governed by companies overall strategy. The company does not use forward contract and options for speculative purposes.

3. There were no dues outstanding for more than 45 days to any Micro, Small and Medium Enterprises Creditor. The above information regarding Micro, Small and Medium Enterprise has been determined to the extent such communication has been received from the respective parties by the company. This has been relied upon by the Auditors.

4. Long Term Loans & Advances include Security Deposit of Rs. 15.67 Lacs (P.Y. Rs. 15.77 Lacs) due from Directors of the Company against tenancies. (Maximum amount outstanding during the year - Rs. 15.77 Lacs) (P.Y. Rs. 16.82 Lacs).

5.Contingent Liabilities & Commitments

i) Contingent Liabilities 31.03.2012 31.03.2011

a) Claims against the Company not acknowledged as debt:

i) Excise Duty demands 502.35 833.88

ii) Service Tax 44.45 35.91

iii) Sales Tax demands under appeal (Net of Advances) 664.19 643.89

iv) Income Tax 32.08 5.22

v) Other Taxes (Net of Advances) 9.28 9.28

vi) Claims against Company not acknowledged as Debts 66.64 58.93

Note : Contingent Liability disclosed above represent possible obligations where the possibility of cash outflow to settle the obligation is remote.

b) Guarantees and counter guarantees given 182.90 10,203.94

6. The Company has entered into a Put Option Contract Agreement with ICICI Bank and Emami Paper Mills Limited in connection with the External Commercial Borrowings facilities availed of by Emami Paper Mills Limited from ICICI Bank for a sum of USD 7.56 million.

7. The Company has opted to follow the extension for accounting the exchange differences arising on long term foreign currency monetary items in line with Companies (Accounting Standard) Amendment Rules 2009 on Accounting Standard 11 relating to “The Effects of Changes in Foreign Exchange Rates” notified by Government of India on March 31, 2009 and as amended by Notification No. G.S.R 378(E), dated 11th May, 2011 & G.S.R 913(E), dated 29th December, 2011.

As per the above Notifications, foreign exchange loss of Rs. 54.57 Lacs chargeable to Statement of Profit & Loss has been transferred to “Foreign Currency Monetary Item Translation Difference Account” to be amortised in subsequent periods, but not beyond 31st March, 2020.

8. Miscellaneous Receipt includes EPCG benefits amounting to Rs. 1,502.67 lacs (P.Y.- NIL)

9. Miscellaneous Expenses includes contribution to Assam Pradesh Congress Committee amounting to Rs. 10.00 lacs (P.Y.- NIL)

10. Amount due and outstanding to be credited to Investor Education and Protection Fund - Nil (P.Y. - Nil)

11. Exchange differences on the principal amount of the foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs as mandated by paragraph 4(e) of Accounting Standard 16 have been disclosed under note “Finance Cost”. Such exchange differences on principal amount of foreign borrowing are not interest on the foreign borrowing.

B. Other Related Parties with whom transactions have taken place during the year

i) Key Management Personnel

1) Shri R. S. Agarwal

2) Shri R. S. Goenka

3) Shri Sushil Kr. Goenka

ii) Relatives of Key Management Personnel

1) Smt. Usha Agarwal

2) Smt. Saroj Goenka

3) Shri Mohan Goenka

4) Shri A. V. Agarwal

5) Shri Manish Goenka

6) Shri H. V. Agarwal

7) Smt. Priti Sureka

iii) Entities where Key Management Personnel and their relatives have significant influence

1) Diwakar Viniyog Private Limited

2) Suntrack Commerce Private Limited

3) Emami Paper Mills Limited

4) Emami Foundation

5) Aradhana Trust

6) Emami Infrastructure Limited

7) Emami Realty Limited

8) Zandu Realty Limited

9) K.D.Goenka & Sons HUF

10) R.S.Agarwal HUF

11) Himani Ayurveda Science Foundation

12) Aviro Vyapar Private Limited

12 Previous year's figures have been rearranged/regrouped wherever necessary.


Mar 31, 2011

1 a. Business Segment

As the Company's business activity falls within a single primary business segment,viz."Personal and Healthcare", the disclosure requirements of Accounting Standard-17 "Segment Reporting", notified in the companies Accounting Standard Rules, 2006 are not applicable.

2. Derivative Instruments:

The Company uses Forward Exchange Contracts and Options to hedge its risk associated with fluctuations in foreign currency and interest rates relating to foreign currency liabilities and some forecasted transactions related to foreign currency trade. The use of forward contracts and options is governed by companies overall strategy. The company does not use forward contract and options for speculative purposes.

3. Taxes on Sales is net of Rs. 1087.70 Lacs being reversal of excess provisions / payments made in earlier years

4. The assets of the company have been assessed for impairment in accordance with Accounting Standard 28 ''Impairment of Assets", consequently, during the year an impairment reversal of Rs. 181.47 Lacs was recognised (P.Y. impairment charge of Rs. 181.47 Lacs).

5. There were no dues outstanding for more than 45 days to any Micro, Small and Medium Enterprises Creditor. The above information regarding Micro, Small and Medium Enterprise has been determined to the extent such communication has been received from the respective parties by the company. This has been relied upon by the Auditors.

6. Security for Term Loan from Banks of Rs. 4465.00 Lacs is yet to be created.

7. Loans & Advances include Security Deposit of Rs. 14.72 Lacs (Previous Year- Rs. 14.82 Lacs) due from Directors of the Company against tenancies. (Maximum amount outstanding during the year - Rs. 14.82 Lacs) (Previous Year -Rs. 15.01 Lacs).

8. The Company has incurred a sum of Rs. 134.52 Lacs (Previous Year - Rs. 168.64 Lacs) on Research & Development which is charged to the Profit and Loss account under Miscellaneous Expenses.

9. a) Contingent Liabilities not provided for in respect of :

(Rs. in lacs)

March 31, 2011 March 31, 2010

i) Excise Duty demands 833.88 668.51

ii) Service Tax 35.91 35.91

iii) Sales Tax demands under appeal (Net of Advances) 643.89 500.92

iv) Income Tax 5.22 --

v) Other Taxes 9.28 9.28

vi) Claims against Company not acknowledged as Debts 58.93 57.20

Note : Contingent Liability disclosed above represent possible obligations where the possibility of cash outflow to settle the obligation is remote.

10. The Company has entered into a Put Option Contract Agreement with ICICI Bank and Emami Paper Mills Limited in connection with the External Commercial Borrowings facilities availed of by Emami Paper Mills Limited from ICICI Bank for a sum of USD 16.50 million.

11. The company had opted for accounting the exchange differences arising on reporting of long term foreign currency monetary items in line with Companies (Accounting Standards) Amendment Rules 2009 on Accounting Standard 11 notified by Government of India on March 31, 2009.

As per the above notification foreign exchange translation reserve of Rs. 141.16 Lacs has been credited to Profit & Loss Account.

12. Amount due and outstanding to be credited to Investor Education and Protection Fund - Nil (Previous Year - Nil)

13. a. The Ministry of Corporate Affairs, Government of India vide its General Notification No. S.O.301(E) dated 8th February 2011 issued under Section 211(3) of the Companies Act, 1956 has exempted certain classes of companies from disclosing certain information in their profit & loss account. The company being an manufacturing & trading company is entitled to the exemption. Accordingly, disclosures mandated by paragraphs 3(i)(a), 3(ii)(a) and 3(ii)(b) of Part-II, Schedule VI to the Companies Act, 1956 have not been provided.

b. The Ministry of Corporate Affairs, Government of India vide its General Circular No. 2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with Section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidaries has been included in the Consolidated Financial Statements.

14. Related Party Transactions :

A. Parties where Control exists :

Subsidiaries % of Holding

i) Emami UK Limited 100.00%

ii) Emami Bangladesh Limited 100.00%

iii) Emami- International FZE 100.00%

iv) Emami Overseas FZE - Subsidiary of Emami International FZE (w.e.f. 25/11/2010) 100.00%

v) Pharma Derm SAE Co.- Subsidiary of Emami Overseas FZE (w.e.f. 04/12/2010) 90.60%

B. Other Related Parties with whom transactions have taken place during the year i) Key Management Personnel

1 Shri R. S. Agarwal

2 Shri R. S. Goenka

3 Shri Sushil Kr. Goenka

ii) Relatives of Key Management Personnel

1 Smt. Usha Agarwal

2 Smt. Saroj Goenka

3 Shri Mohan Goenka

4 Shri A. V. Agarwal

5 Shri Manish Goenka

6 Shri H. V. Agarwal

7 Smt. Priti Sureka

iii) Entities where Key Management Personnel and their relatives have significant influence

1 Diwakar Viniyog Private Limited

2 Suntrack Commerce Private Limited

3 Bhanu Vyapaar Private Limited

4 Emami Paper Mills Limited

5 Emami Foundation

6 Bansilal Jankidevi Agarwal Trust

7 Keshardeo Ratnidevi Goenka Trust

8 Zandu Foundation Health Care

9 Emami Infrastructure Limited

10 Emami Realty Limited

11 Zandu Realty Limited

12 K.D. Goenka & Sons HUF

13 R.S. Agarwal HUF

14 Himani Ayurveda Science Foundation

15 Aviro Vyapar Private Limited

15. Previous year's figures have been rearranged/regrouped wherever necessary


Mar 31, 2010

1 a. Business Segment

As the Companys business activity falls within a single primary business segment, viz. "Personal and Healthcare", the disclosure requirements of Accounting Standard-17 "Segment Reporting", notified in the companies Accounting Standard Rules, 2006 are not applicable.

2 Derivative Instruments:

The Company uses Forward Exchange Contracts and Options to hedge its risk associated with fluctuations in foreign currency and interest rates relating to foreign currency liabilities and some forecasted transactions related to foreign currency trade. The use of forward contracts and options is governed by companies overall strategy. The company does not use forward contract and options for speculative purposes.

3 On July 6, 2009 Company has allotted 1,00,00,000 Equity shares of Rs. 2/- each at a price of Rs.310/- per share to Qualified Institutional buyers (QIBs) through QIP route. The fund has been used for Repayment of borrowings and Share issue expenses.

4 The assets of the Company have been assessed for Impairment in accordance with Accounting Standard 28 "Impairment of Assets". Consequently, impairment of Rs. 181.47 Lacs (Previous Year : Rs. Nil) in Pondicherry units has been provided in the accounts during the year.

5 VRS compensation of Rs. 725.98 Lacs is after adjusting Rs. 600.00 Lacs received from Zandu Realty Limited.

6 There were no dues outstanding for more than 45 days to any Micro, Small and Medium Enterprises Creditor. The above information regarding Micro, Small and Medium Enterprise has been determined to the extent such communication has been received from the respective parties by the company. This has been relied upon by the Auditors.

7 Loans & Advances include Security Deposit of Rs. 14.82 Lacs (Previous Year- Rs. 15.01 Lacs) due from Directors of the Company against tenancies. (Maximum amount outstanding during the year - Rs. 15.01 Lacs) (Previous year -Rs. 15.01 Lacs).

8 The Company has incurred a sum of Rs. 168.64 Lacs (Previous Year - Rs. 231.72 Lacs) on Research & Development which is charged to the Profit and loss account under Miscellaneous Expenses.

9 a) Contingent Liabilities not provided for in respect of :

(Rs. in lacs)

March 31, 2010 March 31, 2009

i) Excise Duty demands 545.59 89.82

ii) Service Tax 158.83 -

iii) Sales Tax demands under appeal (Net of Advances) 500.92 834.23

iv) Other Taxes 9.28 34.22

v) Claims against Company not acknowledged as Debts 57.20 166.74



Note : Contingent Liability disclosed above represent possible obligations where the possibility of cash outflow to settle the obligation is remote.

10 The Company has entered into a Put Option Contract Agreement with ICICI Bank and Emami Paper Mills Limited in connection with the External Commercial Borrowings facilities availed of by Emami Paper Mills Limited from ICICI Bank for a sum of USD 16.50 million.

11 The company has opted for accounting the exchange differences arising on reporting of long term foreign currency monetary items in line with Companies (Accounting Standards) Amendment Rules 2009 on Accounting Standard 11 notified by Government of India on March 31, 2009.

Foreign exchange gain of Rs. 33.87 Lacs was credited to Profit & Loss Account in Financial Year 2007-08. As per the above notification, the same was Credited to Fixed Assets under respective heads and the effect of the same was debited to General Reserve in FY. 2008-09.

As per the above notification foreign exchange gain of Rs. 271.16 Lacs for the year has been amortised over the period of the loan. Therefore, a sum of Rs. 130 Lacs has been credited to Profit & Loss Account and the balance of Rs. 141.16 Lacs has been transferred to Foreign Currency Monetary Item Translation Difference Account to be amortised in subsequent periods, but not beyond March 31, 2011.

12 Amount due and outstanding to be credited to Investor Education and Protection Fund - Nil (Previous Year - Nil).

13 Pursuant to to experts report, the management has reviewed the useful life of the various intangible assets embedded in the goodwill, which was accounted for in financial year 2008-09, consequent to the scheme of arrangement with Zandu from 20 years to 5 years. Due to this change there is excess amortisation of goodwill of a sum of Rs.7814.29 Lacs for the year and simultaneous increase in transfer from General Reserve to Profit and Loss Account by equivalent amount.

14 Related Party Transactions :

A. Parties where Control exists :

Subsidiaries % of Holding

i) Emami UK Limited 100.00%

ii) Emami Bangladesh Limited 100.00%

iii) Emami- International FZE 100.00%

B. Other Related Parties with whom transactions are taken place during the year i) Key Management Personnel

1 Shri R. S. Agarwal

2 Shri R. S. Goenka

3 Shri Sushil Kr. Goenka

ii) Relatives of Key Management Personnel

1 Smt. Usha Agarwal

2 Smt. Saroj Goenka

3 Shri Mohan Goenka

4 Shri A. V. Agarwal

5 Shri Manish Goenka

6 Shri H. V. Agarwal

7 Smt. Priti Sureka

iii) Entities where Key Management Personnel and their relatives have significant influence

1 Diwakar Viniyog Private Limited

2 Suntrack Commerce Private Limited

3 Bhanu Vyapaar Private Limited

4 Emami Paper Mills Limited

5 Emami Foundation

6 Bansilal Jankidevi Agarwal Trust

7 Keshardeo Ratnidevi Goenka Trust

8 Zandu Foundation Health Care

9 Emami Infrastructure Limited

10 Emami Realty Limited

11 Zandu Realty Limited

12 K.D. Goenka & Sons HUF

13 R.S. Agarwal HUF

15 In terms of the Scheme of Arrangement, pursuant to provisions of sections 391 to 394 of the Companies Act, 1956, Zandu FMCG undertaking of The Zandu Pharmaceutical Works Limited was demerged into Emami with effect from the appointed date i.e. November 5, 2008, as a result of which previous years figures are not comparable.

16 Previous years figures have been rearranged/regrouped wherever necessary.


Mar 31, 2009

1 A. Business Segment

As the Companys business activity falls within a single primary business segment,viz."Personal and Healthcare", the disclosure requirements of Accounting Standard-17 "Segment Reporting", notified in Companies (Accounting Standards) Rules, 2006 are not applicable.

2 Derivative Instruments:

The Company uses Forward Exchange Contracts and Options to hedge its risk associated with fluctuations in foreign currency and interest rates relating to foreign currency liabilities and some forecasted transactions related to foreign currency trade. The use of forward contracts and options is governed by Companys overall strategy. The Company does not use forward contract and options for speculative purposes. Rs. in lacs

3 Since external and internal sources of information do not provide for any indication for impairment of fixed assets based on cash generating unit concept, no further impairment is required during the year.

4 There were no dues outstanding for more than 45 days to any Micro, Small and Medium Enterprises Creditor. The above information regarding Micro, Small and Medium Enterprise has been determined to the extent such communication has been received from the respective parties by the Company. This has been relied upon by the Auditors.

5 Loans & Advances include Security Deposit of Rs. 15.01 lacs (Previous Year - Rs. 15.01 lacs) due from Directors of the Company against tenancies. (Maximum amount outstanding during the year - Rs. 15.01 lacs) (Previous year - Rs. 15.01 lacs).

6 The Company has incurred a sum of Rs. 231.72 lacs (Previous Year - Rs. 81.14 lacs) on Research & Development which is charged to the Profit and loss account under Miscellaneous Expenses.

7 Against an order of Income Tax Appelate Tribunal in favour of the Company, the Income Tax Department has filed an appeal before the Honorable Kolkata High Court against a demand of Rs. 438.87 lacs for the A.Y.2000-01. The Company has been legally advised that no adverse order is likely to come against the same.

8 The Company has entered into a Put Option Contract Agreement with ICICI Bank and Emami Paper Mills Limited in connection with the External Commercial Borrowings facilities availed of by Emami Paper Mills Limited from ICICI Bank for a sum of USD 16.50 million.

9 The Company has opted for accounting the exchange differences arising on reporting of long term foreign currency monetary items in line with Companies (Accounting Standards) Amendment Rules 2009 on Accounting Standard 11 notified by Government of India on March 31, 2009.

Foreign exchange gain of Rs. 33.87 lacs was credited to Profit & Loss Account in Financial Year 2007-08. As per the above notification, the same has now been Credited to Fixed Assets under respective heads and the effect of the same has been debited to General Reserve. Due to the above, depreciation has been reduced by Rs. 1.46 lacs for the year.

As per the above notification foreign exchange loss of Rs. 341.10 lacs chargeable to Profit & Loss Account has been amortised over the period of the loan. Therefore, a sum of Rs. 27.34 lacs has been charged to Profit & Loss Account and balance of Rs. 313.76 lacs has been transferred to Foreign Currency Monetary Item Translation Difference Account to be amortised in subsequent periods,but not beyond March 31, 2011.

As a result of this change in accounting for exchange differences, profit before tax for the year ended is higher by Rs. 315.22 lacs.

10 Amount due and outstanding to be credited to Investor Education and Protection Fund - Nil (Previous Year - Nil)

11 a) In terms of the Scheme of Arrangement (hereinafter referred as “the Scheme”) pursuant to provisions of sections 391 to 394 of the Companies Act, 1956, between the Company (Emami), its subsidiary company, The Zandu Pharmaceutical Works Limited (Zandu) and Emami Infrastructure Limited (EIL) and their respective share holders, as approved by the shareholders of the respective Companies in the Court convened meeting held on September 11, 2009 and sanctioned by the Honourable High Court, Kolkata vide its order dated November 17, 2009. Zandu FMCG undertaking of Zandu is demerged into Emami and simultaneously Realty Undertaking of Emami, including Emami Realty Limited and Emamis interest in Zandus Noncore Business including Real Estate, is demerged into EIL with effect from the appointed date i.e. November 05, 2008. The aforesaid scheme is effective from December 02, 2009, being the date of filing of the certified copy of the Order of the High Court, with the Registrar of Companies, West Bengal. The scheme has accordingly been given effect to in these financial statements.

b) i Pursuant to the Scheme, Zandu FMCG undertaking with all the asset and liablities pertaining to this division is

demerged into the Company and transferred to and is vested in the Company on a going concern basis.

ii In terms of the Scheme, out of the carrying value of investment in the equity shares of Zandu in the books of Emami a sum representing the proportion of the net book value of the assets of Zandu FMCG undertaking to the networth of Zandu is treated as the cost of acquisition of the shares of Zandu FMCG undertaking and the carrying value that remains after reducing such Zandu FMCG cost is treated as the cost of aquisition of Zandu Non Core Undertaking.

iii In terms of the Scheme, the excess of Zandu FMCG cost over book value of net assets of Zandu FMCG undertaking transferred to and vested in Emami, after reckoning the par value of shares to be issued by Emami to the shareholders of Zandu, is considered as goodwill amounting to Rs. 47,899.11 lacs.

iv In terms of the Scheme, Emami has to issue Equity shares of the Company to the shareholders of Zandu in proportion to 14 new Equity shares of the Company of Rs. 2/- each fully paid up for every one equity share of Zandu of Rs. 100/- each fully paid up aggregating to 35,10,696 equity shares amounting to Rs. 70.21 lacs. Pending allotment of these shares the aggregate paid up value thereof is credited to share capital suspense account.

v Accounts of Zandu FMCG undertaking with effect from the appointed date to March 31, 2009 have been accounted for in the books of the Company as certified and audited by the statutory auditors of Zandu. The same have been relied upon by the auditors of the Company.

c) i Emami Realty undertaking with all its assets and liabilities pertaining to this division is demerged from the Company on a going concern basis into EIL in terms of above scheme.

ii In terms of the Scheme, the book value of the net assets of Emami Realty undertaking are transferred to EIL by adjusting Amalgamation Reserve of Rs. 268.38 lacs and General Reserve of Rs. 2,555.08 lacs.

iii The Company has carried on the business and activities of the Demerged Emami Realty undertaking from the appointed date onwards till the effective date and has held and possessed all the assets and properties of the Emami Realty undertaking for and on account of and in trust of EIL. All profit or income accruing or arising to the Company or expenditure or losses arising or incurred by it relating to Emami Realty undertaking are for all purposes, treated and deemed to be accrued as the profit or income or expenditure or losses, as the case may be, of EIL. After the "Effective Date", EIL will take necessary steps for transfer of all the assets and properties of Emami Realty undertaking in its name.

d) Order of the Honourable High Court of Kolkata confirming the reduction in the Capital Redemption Reserve account of Zandu pursuant to clause 12.3 of the scheme has not yet been passed.

e) In terms of the Scheme of arrangement, a sum of Rs. 964.54 lacs equivalent to the amount of Goodwill amortisation has been transferred from General Reserve to Profit and Loss Account.

12 There is a change in accounting policy for accounting for Government Grants related to acquisition of Fixed Asset which were earlier credited to Capital Reserve & now credited to Fixed Asset. However due to the above change in accounting policy there is no impact on profits since no capital subsidy has been accounted for during the year.

B. Other Related Parties with whom transactions are taken place during the year

i) Key Management Personnel

1 Shri R S Agarwal

2 Shri R S Goenka

3 Shri Sushil Kr. Goenka

ii) Relatives of Key Management Personnel

1 Smt. Usha Agarwal

2 Smt. Saroj Goenka

3 Shri Mohan Goenka

4 Shri A V Agarwal

5 Shri Manish Goenka

6 Shri H V Agarwal

7 Smt. Priti Sureka

iii) Entities where Key Management Personnel and their relatives have significant influence

1 Diwakar Viniyog Private Limited

2 Suntrack Commerce Private Limited

3 Bhanu Vyapaar Private Limited

4 Emami Paper Mills Limited

5 Emami Foundation

13 Previous years figures have been rearranged/regrouped wherever necessary.

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