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Notes to Accounts of Emami Ltd.

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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