Emmsons International Ltd

a) Company Snapshot

The company had a satisfactory year of performance, particularly in the backdrop ofglobal meltdown in the commodities markets. The efforts made by the company in the lastfew years came handy to tackle on the most difficult periods. With passing of the mostdifficult phase, normalcy seems to be returning back to business now. During the yearunder review, the company added a few more products to its basket. Its internationaloperations are now set to add to its strengths. The company is quite hopeful of buildingon the strengths.

b) Future Directions

The company now looks to shed its India centric tag, though exports from India wouldcontinue to be its main focus. In the backdrop of its expanded international operations,the company is now focusing on developing third country trading opportunities and a smallbeginning has just been made and the company now looks to take advantage of itsinternational presence.

The company is now in the process of formalizing its interest in the internationalventures i.e. coal mining in Indonesia and fanning in Ukraine. The entire exercise isexpected to be completed by next financial year.

Besides the company set-up a new trading subsidiary in Dubai. The new company styled asEmmsons Gulf DMCC has just commenced commercial operations. The company would like todevelop Emmsons Gulf DMCC as main vehicle for international trading operations.

With the culmination of these international ventures, your company is set to emerge atrue multinational company in the years to come.

c) Risk Management

The company has been hedging its Imports and Exports on the main Commodity exchangeswherever possible. Company is also securing forward exchange contracts to minimize/ avoidthe risk of variation in foreign currency rates. Risk Management techniques have beenadded at every level to ensure that company is prepared to take the competition head onwithout making itself vulnerable to the occasional bumps in the market.

In event of unforeseen Risks, the company would rely on the experience and dedicationof its Board to tackle any issues that may affect its performance. The Managementstructure as well as Staffing has also been shaken up to enhance the performance and makethe board more accountable in the decision-making processes.

d) Segment wise Performance

As the company's business activity falls within single primary business segment viz.trading of commodities, hence reporting of segment wise performance is not applicable.

e) Internal Control system and their adequacy

Your company maintains adequate internal control system designed to provide reasonableassurance that assets are safeguarded. Transactions are executed in accordance withmanagement's authorization and are properly recorded and accounting records are adequatefor preparation of financial statements and financial information. Your company has welldefined procedure to execute the financial transaction. Furthermore, the Audit Committeeand the Board of Directors screen each financial transactions.

f) Financial and Operational Performance

During the year ended 31st March 2009, the turnover of your company increased up to Rs.708.72 Crore as compared to Rs. 584.22 Crore and Rs. 375.66 Crore for the year 2007-08 and2006-07 respectively.

Increase in Sales over the last five years :

Company has also earned the profit after taxation of Rs. 6.38 Crore during the year ascompared to Profit of Rs. 10.08 Crore and Rs. 6.39 Crore for the year 2007-08 and 2006-07respectively.

The financial statements of the company for the year under review have been prepared inCompliance with the requirements of the Companies Act, 1956 and Generally AcceptedAccounting Principles in India. The management of the company accepts the responsibilityfor the integrity and objectivity of these financial statements.

g) Human Resources and No. of employees employed

The Company constantly reviews its HR policies in order to keep pace with marketchanges and has embarked on a range of initiatives to create a positive work environment,ample opportunities for development and growth and high levels of motivation andengagement. The company has remained focus on strengthening human capital throughcontinuous training and development and by upgrading the skills of employees to meet thecompany's objectives.

The Human Resources function of the Company continued its initiatives to develop andnurture talent. During the year under review, the company conducted surveys across variouscategories of employees at all level to gauge the level of employee satisfaction. Based onthe feedback, appropriate initiative were initiated. The Corporate Human ResourcesDepartment (HRD) of the Company is committed to improve employee satisfaction at alllevels and create a motivated, responsive and accountable organization.

The Company considers its human resources as one of its main assets and is constantlyfocusing on strengthening its organizational culture with a view to attract and retainbest talent. Notable steps were taken in respect of critical area of knowledge building bygiving special thrust to people development, learning, sharing of knowledge and bestpractices. External training programmes were aimed at development of key talent.Leadership and Management Development programmes conducted to enhance managerialcapability.

The total number of employees working with the company as on the end of the year underreview was 80 and the company continued to enjoy a cordial and harmonious relations withits employees at all level.

4. INSURANCE

All assets of the company including its plant and machinery and stocks have beenadequately insured.

5. FIXED DEPOSITS

The company had not accepted any deposit from public during the year ended 31st March,2009, pursuant to the provisions of section 58-A of the Companies Act, 1956.

6. SUBSIDIARY COMPANIES

The Company's vision of a being a Global Commodity Trader warrants its presence outsideIndia. As a first step, the Company has established 2 Subsidiaries as mentioned below:

Emmsons S.A. intends to capitalize on the emerging opportunities presented in theEuropean Markets for Agricultural Commodities and Raw Materials. In operation for slightlymore than a year, this subsidiary has already generated substantial Business for yourcompany by registering a total income of CHF 12,578,399.73 (Rs. 56.23 Crores). The samehas been achieved at a small, but significant Profits keeping in view of developing andmaintaining long-term relationships with the major Trading Houses in Europe. In addition,the Company would facilitate the Shipping Business of Group by dealing with major EuropeanShip Owners and Brokers.

Emmsons Gulf DMCC has been strategically set-up to not just ramp up Company's presencein the Middle East to build upon its existing Business with customers, but also focus onthe emerging markets for the African Continent for Agricultural Commodities. The Companywill be instrumental in Marketing Commodities from around the World to these markets andcarry the vision of your company towards greater heights.

7. INTERNATIONAL PROJECTS

Coal is an Important Component for the Infrastructure Sector and keeping in view of thelong-term dependence of emerging economies, including but not limited to India for thisfossil fuel, the Company went into Trading of this Raw Material. With the long-term focuson developing own sourcing for the fuel, the Company ventured into Coal Mining inIndonesia in a JV with a multi-national Company.

The Project has been progressing Satisfactorily with the team working in over-drive tosecure the various licences needed to start Mining of Coal in Indonesia. In addition, thedevelopment of Road and Jetty Infrastructure is also gathering steam and the JV expectsthe Project to be Operational by the starting of the next Financial Year.

Once the Project commences Operations, the Company would focus on more Opportunities inthe Mining Sector, not just in Indonesia, but other Mining driven Economies such asAustralia and South Africa as well.

Ukraine is considered the Bread basket of Europe and presents multiple Opportunitiesfor your Company in the field of Agri-Commodities. A small beginning was made in the lastfiscal year and the company is progressing satisfactorily with its vision to farm,process, store, manage and trade various Commodities directly to the end customer aroundthe world. This will ensure that your Company would be present in the entire Value Chainand assume a massive advantage over its Competitors.

Even though Agricultural markets around the world went through a period of Turmoil, thepresence of your Company at the top of the Value Chain as a fanner, hedged its overallposition as an International Trader. Normalcy has returned to Ukraine and it is hoped thatthe Venture would prove a turning Point for your company and provide good, solid returnsin times to come.

8. DIRECTORS

Mr. Mohammad Tariq Raza and Mr. Satish Chandra Gupta, Director of the company willretire by rotation at the forthcoming Annual General Meeting and being eligible offerhimself for reappointment. Further, the Board of Directors of the Company in their meetingheld on 16th February, 2009 after recommendation by the Remuneration Committee hasapproved the re-appointment of Mr. Rajesh Monga as Whole-Time Director, whose terms ofappointment has expired on 31st December, 2008. subject to approval of the members in theforthcoming Annual General Meeting.

Your Directors recommend the reappointment of Mr. Mohammad Tariq Raza and Mr. SatishChandra Gupta as Director and Mr. Rajesh Monga as Whole-Time Director of the company.

Further, pursuant to provisions of the clause 49 of the listing agreement, the briefresumes of the Directors, who are to be reappointed in this Annual General Meeting, areprovided in the corporate governance section, which is a part of the Annual Report of thecompany.

9. AUDITOR'S REPORT

The Auditors observations are serf-explanatory and, therefore do not call for anyfurther comments.

10. AUDITORS

M/s Suresh & Associates, Chartered Accountants, the Auditors of the company retireat the ensuing Annual General Meeting and have expressed their willingness to continue inthe office, if re-appointed. Members are requested to re-appoint them and authorize theBoard to fix their remuneration and pay out of pocket expenses.

11. REPORT ON CORPORATE GOVERNANCE

A detailed report on the procedures adopted by the company on the Corporate Governancealong with the certificate of Auditors of your company regarding compliance of theconditions of Corporate Governance as stipulated in clause 49 of the listing agreemententered with Stock Exchange is enclosed and form part of this Annual Report.

12. LISTING OF SECURITIES

The Equity shares of the company are listed in The Bombay Stock Exchange, PhirozeJeejeebhoy Towers, Dalai Street, Mumbai only. The scrip code for The Stock Exchange,Mumbai is 532038.

The company had duly paid the listing fee to the aforesaid Stock Exchange for thefinancial Year 2009-2010.

13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OTUGOING

As the company is not covered in schedule A of Companies (Disclosure of particulars inreport of Board of Directors) Rules, 1988, provisions of Section 217(1) (e) of theCompanies Act, 1956 are not applicable.

14. STATEMENT OF PARTICULARS OF EMPLOYEES

Information required as per section 217(2A) of the Companies Act, 1956 read withCompanies (Particulars of Employees) rules, 1975 and forming part of Director's Reportsfor the year ended 31st March, 2009 is given in the Annexure 'A'.

15. DIRECTORS' RESPONSIBILITY STATEMENT

As required under section 217(2AA) of the Companies Act, 1956, it is hereby statedthat:

a) in the preparation of the Annual Accounts, the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b) the Directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit or loss of the company for the period;

c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities; and

d) the Directors had prepared the Annual Accounts on a going concern basis.

16. ACKNOWLEDGEMENT

Your Directors wish to place on record their thanks and gratitude to various Centraland State Government Authorities for their co-operation and providing different approvals,Bankers of the company for the financial facilities and support extended, Overseastraders, customers, retailers and other associated with the company as its tradingpartners for their continued support & trust and the shareholders of the company fortheir confidence in the company.

Your Directors also wish to place on record their appreciation of the officers andemployees at all levels for their dedicated services and contribution to the growth of thecompany.

ANNEXURE A'

Information required as per section 217(2A) of the Companies Act, 1956 read withCompanies (Particulars of Employees) rules, 1975 and forming part of Director's Reportsfor the year ended 31* March, 2009.

(A) Persons employed throughout the financial year, who were in receipt of remunerationfor the year, which, in the aggregate, was not less than Rs. 24.00 Lacs.

(B) Persons employed for a part of the financial year who were in receipt ofremuneration for any part of the year, at a rate which, in the aggregate, was not lessthan Rs. 2.00 Lacs per month.

Nil

(C) Persons employed throughout the financial year or part thereof, was in receipt ofremuneration in that year which, in the aggregate, or as the case may be, at a rate which,in the aggregate is in excess of that drawn by the managing director or whole-timedirector or manager and holds by himself or along with his spouse and dependent children,not less than two percent of the equity shares of the company.

Nil

Notes :

1. Remuneration includes Salary, House Rent Allowance, Bonus, Contribution to ProvidentFund, Leave Travel Concession, Medical Assistance and other allowances paid in cash andtaxable value of non cash perquisites.