None of the Directors had an interest in the shares of the company at any time during the year.

Transcription

1 EMAMI BANGLADESH LIMITED DIRECTORS REPORT FOR THE PERIOD 01 st APRIL 2014 TO 31 st MARCH 2015 The directors present their report and the financial statements for the period 1 st April 2014 to 31 st March Directors Responsibilities Directors are required to prepare financial statements, which give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for the period ending on that date. In preparing those financial statements, directors are required to: Select suitable accounting policies and apply them consistently; Make judgments and estimates that are reasonable and prudent; Prepare the financial statements on a going concern basis unless it is inappropriate to presume that the company will continue in business. Directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure the financial statements, comply with rules and regulations applicable. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Incorporation The company was incorporated on 25 th November, 2004 under a licence issued by the Government of Bangladesh. Principal Activities The principal objectives of the company is to carry on the business of manufacturing, processing, packing, repacking and distribution of any raw material, semi-finished of finished products, merchandising of all types and of ayurvedic medicinal products, herbal products, cosmetic products and byproducts. Directors and their interests The Directors who held office during the year were as follows: Naseem Shafi Yogesh Goenka (Appointed on 30/03/2015) Amitabh Goenka (Appointed on 30/03/2015) Mohsin Ahmed (Appointed on 30/03/2015) Anjesh Som (Appointed on 30/03/2015) Sushil Kumar Goenka (Resigned on 31/03/2015) Aditya Vardhan Agarwal (Resigned on 31/03/2015) Prashant Goenka (Resigned on 31/03/2015) Ashish Goenka (Resigned on 31/03/2015) None of the Directors had an interest in the shares of the company at any time during the year. Election to dispense lying accounts The company has elected to dispense with laying accounts before the members in general meeting. Members, may however, may by notice in writing to the company at its registered office require that accounts are laid before the members in general meeting. Approved by the Board and signed on its behalf by: Date: 11th MAY 2015 Place: Kolkata Mohsin Ahmed Director

2 To The Members of Emami Limited Report on the Financial Statements made out as per the requirements of section 129 of the Companies Act We have checked the accompanying financial statements of EMAMI BANGLADESH LIMITED( the Company ) incorporated at Bangladesh, which comprise the Balance Sheet as at 31st March 2015, and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, being made in accordance with the requirements of Indian Companies Act 2013 ( the Indian Act ), from the audited accounts of the company under the statute of the country of its incorporation which have been relied upon by us. Management s Responsibility for the Financial Statements The Company s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ( the Act ) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility The audit was conducted under statute of country of incorporation of the company, by the local auditor at Bangladesh in Bangladesh currency, followed by our further check of true and fairness of accounts drawn up in terms of requirement of Indian Act,. Management has prepared the financial statements, based on the audited accounts, in accordance with the provisions of the Indian Act, in Indian Rupees. We have checked the financial statements prepared by the management, in Indian currency. We did not audit the financial statements of the company. These financial statements were audited by the local auditors whose reports have been furnished to us, and our opinion is based solely on the reports of other auditors. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.

3 Report on Other Legal and Regulatory Requirements I. The Companies (Auditor s Report) Order, 2015 ( the Order ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, is not applicable to the company. II. As required by Section 143 (3) of the Act, we report that: a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our checking. b. In our opinion and based on the audit report of local auditor, proper books of account as required by law have been kept by the Company. c. In our opinion and based on the audit report of local auditor, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account. d. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, e. With respect to the other matters to be included in the Auditor s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. The Company has disclosed the impact of pending litigations on its financial position in its financial statement- Refer Note 2.8; ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. For, S. K. AGRAWAL & CO. Chartered Accountants Registration No E Sd/- RadhaKrishan Tondon Partner Kolkata Membership No: Dated: 13 th May 2015

4 Amount in Shareholders funds Share capital 2.1 2,782 2,782 Reserves and surplus ,300 88,082 53,623 56,405 Non-Current Liability Long-term borrowings ,085 24,205 Deferred tax liabilities Current liabilities Short-term borrowings 2.5-6,214 Trade payables ,356 93,796 Other current liabilities ,537 9,175 Short-term provisions , ,307 3, ,193 ASSETS EMAMI BANGLADESH LIMITED BALANCE SHEET AS AT 31ST MARCH 2015 Note No. As at EQUITY AND LIABILITIES As at , ,802 Non-current assets Fixed assets 2.9 Tangible assets 97, ,734 Capital work-in-progress 2,657 99, ,467 Long-term loans and advances ,602 4,946 Current assets Inventories ,443 21,722 Trade receivables ,204 Cash and cash equivalents ,049 36,826 Short-term loans and advances , ,860 4,638 84,390 Significant accounting policy and notes on accounts 1 & 2 380, ,802 For S. K. Agrawal & Co. Chartered Accountants Radhakrishan Tondon Partner Mohsin Ahmed Director Dated : 13th MAY 2015 Place : Kolkata

5 EMAMI BANGLADESH LIMITED STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31ST MARCH 2015 Note No. Amount in I.Revenue from operations , ,705 II. Other income ,297 - III. Total Revenue (I + II) 830, ,705 IV. Expenses: Cost of materials consumed , ,736 Purchases of Stock-in-Trade , ,358 Changes in inventories of stock in trade 2.19 (8,454) 3,141 Employee benefits expense ,759 27,737 Finance costs ,709 10,592 Depreciation and amortization expense ,087 19,994 Other expenses , ,269 Total expenses 782, ,827 V. Profit before tax (III- IV) 48,071 40,878 VI. Tax expense: Current tax 17,441 11,431 Deferred tax VII. Profit for the year (V-VI) 29,759 29,447 Earnings per equity share: (1) Basic (2) Diluted Significant accounting policy and notes on accounts 1 & 2 For S. K. Agrawal & Co. Chartered Accountants Radhakrishan Tondon Partner Mohsin Ahmed Director Dated : 13th MAY 2015 Place : Kolkata

6 EMAMI BANGLADESH LIMITED Significant Accounting policies and notes on accounts Accounts of EMAMI BANGLADESH LIMITED ( a wholly owned subsidiary of Emami Ltd., a company incorporated in India ) incorporated at Bangladesh having its principal place of business in Dhaka, originally audited by the overseas auditors pursuant to law of the country of its incorporation have been made out as per requirement of Sec 129(2) of Indian Companies Act, 2013.This entailed drawing up the Balance Sheet & Statement of Profit and Loss (including the Auditor s report theron) of the subsidiary in a manner so as to make it appear conforming to requirements of Indian Companies Act, 2013 for the purpose of annexing the particulars of the company with its holding company under section 129(2) of the Indian Companies Act, 2013 Translation of various heads of accounts has been done in terms of Accounting Standards specified under Section a. 133 of the Companies Act, 2013 read with Rule 7 of Companies (Accounts) Rules, 2014 Presentation of accounts are in terms of Schedule III of Companies Act, 2013 including disclosure of necessary b. information as laid down under section 129(1) of Companies Act, Significant accounting policies 1.1 Basis of Accounting These accounts have been prepared on historical cost basis and on the accounting principles of a going concern to comply in all material aspects with applicable accounting principles in India, the Accounting Standards specified under Section 133 of the Companies Act 2013 read with Rule 4 of Companies (Accounts) Amendment Rules, 2014 and other relevant provisions of the Companies Act, Revenue and Recognition Income & Expenditure are recognized on accrual basis. 1.3 Sales The company s turnover represents the value, including value added tax, of goods and services supplied to customers during the year 1.4 Fixed Assets Fixed Assets are stated at cost less Depreciation. 1.5 Depreciation Depreciation is provided on Reducing Balance Method or based on the useful life of the assets whichever is higher. Rates of depreciation are as follows:- Computer & accessories - 20% Furniture & fixture -10% Factory building - 20% Plant & machinery - 20% Electrical equipment - 20% Vehicles - 20% Other assets - 30% 1.6 Inventories The inventories are valued at cost or net realizable value whichever is lower after due regards for obsolete and slow moving stocks. 1.7 Provisions & Contingent Liabilities Provisions are recognized when the company has a legal and constructive obligation as a result of a past event, for which it is probable that a cash outflow will be required and a reliable estimate can be made of the amount of the obligation. Contingent liabilities are disclosed when the company has a possible obligation or a present obligation and it is probably that a cash flow will not be required to settle the obligation. 1.8 Foreign Currency Transactions Monetary Assets & Liabilities in foreign currency that are outstanding at the year end and not covered by forward contracts are translated at the year end exchange rates. 1.9 Borrowing Cost Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. All other borrowing costs are charged to revenue. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use Translation of accounts from the currency of country of it s incorporation BDT to INR: a Fixed assets are translated to INR in terms of the exchange rate ruling at the year end. b Current assets have been recognized in accounts at exchange rate ruling at the year end. c All outside liabilities have been recognized in accounts at exchange rate ruling at the year end. d Income and expenses have been recognized in accounts in weighted average of monthly exchange rate. e Equity Shares has been recognized in accounts at the exchange rate ruling at the time of their issuance. f Resulted gain/loss because of the above is accounted for as foreign currency translation reserve in the Balance The translation for current year is done at current year prevailing exchange rate and for previous year at previous g year prevailing exchange rate.

7 2. Notes on accounts for the year ended 31st March' Share Capital Authorised shares BDT BDT Equity Shares of BDT 100/- each Issued Subscribed & fully paid up shares Equity Shares of BDT 100/- each held by 2,782 2,782 Emami Limited the holding Company TOTAL 2,782 2,782 The reconciliation of number of shares outstanding and the amount of share capital as on 31st March' 2015 and 31st March' 2014 is set out below: Number Number Shares outstanding at the beginning of the year , ,782 Shares outstanding at the end of the year , ,782 The company has only one class of equity shares having a par value of BDT 100 each. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of 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 share held by the shareholders. Details of shareholders holding more than 5% shares in the company: Name of Shareholder No. of Shares held % of Holding No. of Shares held % of Holding Emami Limited % % Mr. A.V Agarwal-on behalf of Emami Ltd % % Mr. Ashish Goenka-on behalf of Emami Ltd % % TOTAL % % 2.2 Reserves & Surplus a. Foreign Currency Translation Reserve Opening balance 3,743 1,854 Current Year Transfer 1,918 1,890 Closing Balance 5,661 3,743 b. Surplus Opening balance 49,880 20,433 Net Profit for the current year 29,759 29,447 Closing Balance 79,639 49,880 TOTAL 85,300 53,623

8 2.3 Long Term Borrowings Secured a. Term Loans from HSBC Limited (USD) 17,085 24,205 TOTAL 17,085 24,205 * The term loan from HSBC (USD) for import of plant and machinery and carries LIBOR plus 5%. The loan is repayble in quarterly installments with interest from the date of loan over period of 5 years. The loan is secured by 1st charge over stocks, book debts and plant & machineries (present & future) of the company and coprorate guarantee from holding company. 2.4 Deferred tax liabilities Deferred Tax Liabilities Tax impact due to difference between tax depreciation and book depreciation Deferred Tax Assets - - Tax impact of expenses charged off in financial statement but allowance under tax law deferred TOTAL Short Term Borrowings Secured Other loans and advances from HSBC Limited(cash credits) - Secured by first charge over stocks, book debts and plant & machinery (present & future) TOTAL - 6,214 6,214 * The term loan from HSBC for civil construction and carries 14.5%. The loan is repayble in quarterly installments with interest from the date of loan. The loan is secured by 1st charge over stocks, book debts and plant & machineries (present & future) of the company and coprorate guarantee from holding company. 2.6 Trade Payables For supplies 29,336 12,909 For Expenses 70,609 77,451 Royalty Payable 9,043 3,436 Others 1,369 - TOTAL 110,356 93, Other Current liabilities Current maturities of long-term borrowings 8,307 7,807 Income received in advance 9,255 - Employees benefit payable 10,976 1,368 TOTAL 28,537 9, Short Term Provisions Duties & Taxes-VAT 117, Provision for Taxation 17,441 2,604 [Net of Advance Tax Rs thousand (PY thousand)] TOTAL 135,414 3,008

9 2.9 Fixed Assets Balance as at Additions Gross Block Accumulated Depreciation Net Block Disposals/ Adjustments Adjustment due to translation Balance as at Balance as at Depreciation charge for the year Adjustment due to translation On Balance as at disposals Balance as at Balance as at Tangible Assets Building 52,811 2,731-1,062 56,603 12,056 8, ,902 35,701 40,755 Plant & Machinery 47,137 7, ,320 9,052 8, ,829 37,491 38,085 Furniture and Fixtures 6,701 1, , ,094 7,050 5,865 Computer & Accessories 3,546 1, , ,373 3,406 2,858 Office Equipment 10,994 1, ,366 1, ,150 10,216 9,895 Motor Vehicles 978 1, , , Other assets 7, ,195 2,402 2, ,143 2,052 4,651 Total 129,220 15, , ,975 26,485 22, ,749 97, ,734 Capital work in progress 732 1, , , Grand total 129,952 17, , ,632 26,485 22, ,749 99, ,467 Previous Year's Figures 84,846 39,134 2,452 8, ,952 6,219 19, , ,467 78,627

10 2.10 Long-term loans and advances (Unsecured, Considered Good) Capital Advances 20,354 1,203 Security Deposits for water - 2 Security Deposit for Rent 4,249 3,740 TOTAL 24,602 4, Inventories Stock in Trade 11,487 3,033 Raw Material 23,302 12,839 Packing Material 14,654 5,850 TOTAL 49,443 21,722 Notes Stock is valued at Cost or Net Realisable Value whichever is lower Trade Receivables (Unsecured Considered Good) Others - 21,204 TOTAL - 21, Cash and Cash equivalents Balances with banks Current account 33, Fixed Deposit Account* 143,663 15,420 Cheque in hand - 21,203 Cash in hand TOTAL 177,049 36,826 *Period of maturity is less than 12 months Short Term Loans and Advances Balance with VAT Autority 1,918 1,516 Advance to Suppliers 16,439 - Pre paid Insurance 568 Advance for Expenses 22 3,122 Balance with Incometax Authority 10,422 TOTAL 29,368 4, Revenue from Operation Cosmetic & Toiletries 250, ,772 Ayurvedic Medicines 573, ,932 TOTAL 823, , Other Income Interest Income 6,297 - TOTAL 6,297 -

11 2.17 Cost of Material Consumed Cost of Material Consumed 256, ,736 TOTAL 256, , Purchase of Stock in Trade Purchase of Cosmetic & Toiletries 174, ,358 TOTAL 174, , Changes in inventories of stock in trade I. Opening Stock - Cosmetic & Toiletries 1,720 6,173 - Ayurvedic Medicines 1,313-3,033 6,173 II. Closing Stock- Cosmetic & Toiletries - Cosmetic & Toiletries 9,970 1,720 - Ayurvedic Medicines 1,518 1,313 11,487 3,033 (I - II) (8,454) 3, Employees Benefit Expenses Salaries and wages 57,525 26,601 Staff welfare expense 234 1,137 TOTAL 57,759 27, Finance Cost Interest expense 1,709 10,592 TOTAL 1,709 10, Other Expenses Consumption of stores and spare parts Power and fuel 3,698 2,597 Rent 10,124 9,340 Repairs -Building Machinery Others 1, Insurance 2,296 2,966 Taxes on Sales 144, ,833 Rates and taxes, excluding taxes on income 35 1,259 Foreign Exchange Fluctuation (Gain)/Loss - (44) Auditor's Remuneration 131 1,639 Advertisement & Sales Promotion 93,316 46,669 Legal and Professional Fees 8,819 7,192 Travelling and Conveyance 6,110 5,253 Miscellaneous Expenses 5,750 7,418 TOTAL 277, ,269

12 2.22 Payment to Auditors 31st Mar'15 31st Mar'14 As auditor: Audit Fees In other capacity: Taxation matters 3, Company law matter 5 20 Other services 5,038 1,261 Reimbursement of expenses Total 8,950 1, Income & expenditure in foreign currency This company being incorporated in Bangladesh, information relating to expenditure in foreign currency, CIF value of imports and earnings in foreign exchange are not applicable hence not reported Transaction with related parties for the year ended 31st March 2014 are as follows; Holding Co. Emami Ltd. Total Outstanding During the Year During the Year As at As at Purchase FG 92, ,370 2,011 6,167 Raw Material 59,921 35, NIL Packing Material NIL NIL NIL NIL Royalty 5,538 3,231 9, All the figures have been expressed in Rupees in thousands ( 000s) unless stated otherwise. Previous year s figures have been regrouped/rearranged wherever necessary. For S. K. Agrawal & Co. Chartered Accountants Radhakrishan Tondon Partner Mohsin Ahmed Director Dated : 13th MAY 2015 Place : Kolkata

13 EMAMI BANGLADESH LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2015 Rs. '000 Rs. ' st March st March 2014 A CASH FLOW FROM OPERATING ACTIVITIES: Net Profit before tax and extraordinary items 48,071 40,878 Add : Adjustments for: Depreciation 22,087 19,994 Finance Cost 1,709 10,592 Foreign exchange fluctuation - (44) Less : Interest income (6,297) - Operating Profit before working capital changes 65,570 71,420 Adjustment For : Increase in trade receivable 21,204 52,293 Increase in short term advances (24,328) 782 Increase in inventory (27,720) (10,598) Long-term loans and advances (19,148) 2,146 Security deposit for land & flat (508) (1,076) Working capital loan from HSBC (6,214) (71,199) Other current liabilities 140,742 10,335 Trade payables 16, ,588 39,645 22,329 VAT Current Account Balance (402) (523) (402) (523) Cash generated from operating activities 165,756 93,226 Less : Taxes paid 8,939 8,939 Net Cash flow from operating activities 156,817 84,287 B C CASH FLOW FROM INVESTING ACTIVITIES: Purchase of fixed assets (18,680) (45,106) Interest income 6,297 (12,383) - (45,106) Net Cash Used in Investing Activities (12,383) (45,106) CASH FLOW FROM FINANCING ACTIVITIES: Short Term Loan-HSBC (Term loan) - (8,695) Long Term Loan-HSBC (USD Loan) (7,120) 14,403 Interest Paid (1,709) (8,829) (10,592) (4,884) Net Cash Used in Financing Activities (8,829) (4,884) D Foreign Exchange Fluctuation - 44 E Foreign Exchange Fluctuation Reserve 4,618 4,618 1,890 1,934 Net Changes in cash & cash equivalents (A+B+C+D) 140,223 36,231 *Cash and Cash equivalents in opening balance 36, *Cash and Cash equivalents in closing balance 177,048 36,826 *Represent Cash & bank Balance as indicated in 177,049 36,826 Note 2.13 For S. K. Agrawal & Co. Chartered Accountants Radhakrishan Tondon Partner Mohsin Ahmed Director Dated : 13th MAY 2015 Place : Kolkata