Emami Management Discussions

MD&A and Integrated Report

Emamis Integrated Value-Creation report

Emamis multi-decade growth has been derived through the interplay of various competencies

The foundation of Emamis value-creation framework is a positive sectorial context

Global economic overview

The global economy reported a de-growth of 3.3% in 2020 compared to a growth of 2.9% in 2019. This steep decline in global economic growth was largely due to the outbreak of the novel coronavirus and the consequent suspension of economic activities across the world. This led to global supply chain disruptions, resulting in a de-growth in some of the largest global economies. The global economy is expected to grow 6% in 2021 and 4.4% in 2022 as per IMF.

Indian economic review

The Indian economy passed through one of the most volatile periods in living memory in 2020-21. The Indian government announced a complete lockdown in public movement and economic activity from the fourth week of MarcRs 2020. The outbreak of the novel coronavirus and the consequent suspension of economic activities due to the pandemic-induced lockdown, coupled with muted consumer sentiment and investment, had a severe impact on the Indian economy during the first quarter of the year under review. The Indian economy de-grew 23.9% in the first quarter of 2020-21, the sharpest de-growth experienced by the country since the index was prepared. The central and state governments selectively lifted controls on movement, public gatherings and events from June 2020 onwards, each stage of unlocking linked to corresponding economic recovery. Indias relief consumption, following the lifting of social distancing controls, translated into a full-blown economic recovery. A number of sectors in India – real estate, steel, cement, home building products and consumer durables, among others - reported unprecedented growth. India de-grew at a relatively improved 7.5% in the July-September quarter and reported 0.4% growth in the October-December quarter and a 1.6% growth in the last quarter of the year under review. Indias GDP contracted 7.3% during 2020-21, largely on account of the sharp depreciation of the first two quarters. This sharp Indian recovery – among the most decisive among major economies – validated Indias long-term consumption potential.

Regional growth % 2020 2019
World output (3.3) 2.9
Advanced economies (4.9) 1.7
Emerging and developing economies (2.4) 3.7

Growth of the Indian economy, 2020-21

Q1, FY21 Q2, FY21 Q3, FY21 Q4,FY21
Real GDP growth (%) (23.9) (7.5) 0.4 1.6

(Source: Economic Times, IMF, EIU, Business Standard, McKinsey, Financial Express)

Senior Management Team
01 N. H. Bhansali, CEO - Finance, Strategy & Business Development and CFO 02 Punita Kalra, CEO - Research &
Innovation Strategy and CQA 03 Dr. C.K. Katiyar, CEO – Technical (Healthcare) 04 Vivek Dhir, CEO – International
Business 05 Dhiraj Agarwal, Head - Media 06 Vinod Rao, President, Sales - Consumer Care 07 Gul Raj Bhatia, President -
Healthcare 08 Rajesh Sharma – President, Finance & Investor Relations 09 Shagun Tulsyan – President, Legal & Revenue
10 Sanjay Madan – President, Operations 11 Pradeep Kumar Pandey – President, Packaging

The overview of Indias FMCG sector


The FMCG sector is the fourth largest sector in the Indian economy with US$110 billion in revenues in 2020. The packaged foods segment, which accounts for 50% of the industrys revenues, is expected to grow by up to 12% in 2020-21 compared to 10% in 2019-20, owing to a shift to branded products and deeper penetration of product segments. The Personal and Home Care segment, accounting for a third of FMCG revenue, is also expected to grow 8-9% in 2020-21 compared to 6-7% in 2019-20.

In the April-June period (Q1 2020-21), the FMCG sectors value growth declined by 17%, due to the demand and supply shock induced by the COVID-19 pandemic, caused by limited mobility and supply-chain disruptions during the lockdown, and lower income visibility for consumers, which affected sales. However, essential products such as packaged food and beverages that form a bulk of FMCG demand, have seen a rise in demand as consumers stuck at home continued to stock packaged foods and staples. Most FMCG companies reported recoveries in core categories during the July to September quarter (Q2 2020-21); demand was mostly driven by health and hygiene offerings and immunity-boosting foods. Moreover, rural demand continued to outperform the urban, growing at 1.2x, compared to 0.5x in the previous year.

Emamis key initiatives, 2020-21


• Products available in 4.5 million retail outlets across India

• Direct reach to 9.4 lac retail outlets; nearly half across rural India

• Frontline sales force of more than 3,400 personnel covered most markets

• Increased rural coverage; invested in additional manpower and evaluated van markets to drive rural growth

Accelerated offtake with a thrust on B2C initiatives and joint business plans with Modern Trade chains

• Created a separate structure with activation programmes to leverage standalone Modern Trade offtake

• Enhanced focus on e-commerce with the launch of special packs and cross-sales

• Used technology to capture real-time data, aiding efficient decision-making

• Rolled out CDMS for distributors and hand-held devices to front-line sales force, enabling analytics and efficiencies


• Increased focus on core brands and extensions

• Launched 40+ products in the domestic business

• Launched Personal Hygiene products under the BoroPlus brand

• Focussed R&D approach on product efficacy

• Extended Emamis international presence to more than 60 countries

• Launched multiple SKUs and LUPs to enhance affordability

• Brand spending stood at Rs 458 crore

• Brand spending stood at 15.9% of revenues


• Manufactured throughput comprises more than 300 products

• Manufactured value stood at Rs 930 crore

• Seven manufacturing units operated in India and one in Bangladesh

International business

• Worked on ayurvedas globalisation; introduced localised herbal products

Focused on top five countries where key brands attained leadership positions

• Introduced health, hygiene and immunity boosting products

• Expanded the products portfolio; launched the entire oil range in Bangladesh including Navratna, 7 Oils in One and Kesh King

• Introduced Creme 21 in Bangladesh: extended the brand into skin care; transformed it into a multi-category platform

• Introduced federal structure; empowered teams in countries to grow their businesses

• Established supply chain localisation (own manufacturing in Bangladesh and third party manufacturing in Germany, Sri Lanka and Dubai)

Positive impacts

• Domestic revenues grew by 10% (online sales grew by >3x and Modern Trade revenues 15%)

• International business revenues grew 12%

• Gross margin increased 70 bps to 67.7% in 2020-21

• EBIDTA grew by 28%; margins increased 470 bps to 30.7%

• PAT grew 50%; margins increased 440 bps to 15.8%

Cash profit grew 29%; margins increased 440 bps to 28.5%

• Net cash surplus stood at RS 357 crore

• Cumulative senior management experience was a ricRs 619 person-years

• 42% employees had been employed with the Company for 5+ years

• Strengthened interest cover to 44.2 in 2020-21 from 8.82 in 2015-16

• Vendors stood at 4,300+

• Primary customers were 2,800+

• Resolved 100% consumer complaints

Our stakeholder engagement

Emami recognises the importance of enduring relationships with key stakeholders throughtransparent,sincereandeffective engagement.

Emamis stakeholders (persons, groups or organisations) are directly impacted by its activities, as well as those (persons, groups or organisations) reasonably foreseen to be impacted by its activities. A structured engagement ensures the timely communication of accurate and relevant information.

Stakeholder group Emami consideration Stakeholder interest Emamis engagement Key capitals impacted
Customers Products are used by customers and it is imperative that they are aware of their indications, benefits and side- effects; while the Company needs an understanding of perceptions and expectations • Quality products • Understands customer needs; introduces new products and improves the existing • Manufacturing
• Value-for-money proposition • Consistent, reliable and on- time supply • Intellectual
• Impact of product recalls or any quality, efficacy concerns • Swift addressal of customer complaints through dedicated cells
• Regular communication about products through different media channels
• Communication with customers
Government and regulatory authorities Emamis ability to produce, market and distribute personal care • Legal and regulatory compliance • Responsible products • Audits of manufacturing sites to ensure Good Manufacturing Practices and regulatory compliance • Social and Relationship • Manufacturing
and healthcare products is dependent on manufacturing licenses and regulatory approvals issued by the authorities • Social and environmental impact of operations • Participation in industry bodies • Natural
• Tax revenues and local investment Reports confirming legislative and regulatory compliance policies and processes
• Involvement in government programmes to create jobs and uplifting the disadvantaged
• Establishment of system- based compliance control
Employees and collective labour organisations Employees play an important role in achieving the Companys strategic objectives. The Company needs to understand the requirements, challenges and aspirations of this important stakeholder group • Job security • Equitable remuneration packages, performance incentives and benefit • Understanding employee needs and provide enabling work environment • Human
structures • Diversity and inclusivity • Internal communication such as HR portal, announcements and
• Performance management, skill development and career planning posters
• Induction and internal training
• Reputation as an ethical employer • Employee surveys
• Employee health, safety and wellness • Effective talent management and succession planning
• Employee bargaining and organisational rights • Employee health, safety and wellness campaigns
Suppliers, service providers, consultants and business partners Empowering the Company • Fair engagement terms and timely settlement • Strategic stakeholder management program • Social and Relationship
in meeting commitments to customers and other service providers • Ongoing communication on expectations and service levels • Fair contract terms and selection processes • Periodic communication on service levels and other delivery expectations • Financial
• Interactions about quality, safety and other regulatory compliances
Investors and financiers As providers of capital, these stakeholders require to be kept informed of material developments impacting the Company and its future prospects • Revenue, EBIDTA and returns on investment growth • Dedicated investor communication and analyst presentations • Financial
• Appropriate management of capital expenditure, working capital and expenses • Timely stock exchange intimations, press releases, conference calls and newspaper publication of financial results
• Gearing, solvency and liquidity
• Dividends • Annual general meetings
• Security over assets, ethical stewardship of investments and good corporate governance • Investor communication section on the corporate website
• Fair executive remuneration • Engagement with the media
• Robust corporate governance system and disclosures

Integrated Report / Risk Management

How we manage risks at Emami


The subject of risk management is increasingly relevant in every business in view of the uncertainties affecting economies and businesses. At Emami, business sustainability is derived through the identification of probable business downsides and their proactive de-risking. The more competently we manage these risks, the stronger our capability to weather market cycles and the various unforeseens. The

‘how influences the ‘what: the process influences the effectiveness of risk mitigation at our Company. At Emami, our risk management practices are founded on our guiding principles, which we consistently strive to apply across all our risk categories. The purpose of the Companys Risk Management Committee is to ensure that the executive management team has a risk management framework in place that includes policy, procedures and assessment methodologies that help the Company monitor and manage organisational risks.

Our principal risks and mitigation measures

Key risks Explanation Mitigation measures
Economy & Industry risk The Companys performance could be affected in the event of an economic slowdown. The Company provided value-added products at affordable prices Most of the Companys flagship brands are available in affordable low unit packs (24% of revenues)
The Company launched multiple products in health and hygiene segment and offered ayurveda-based innovative products to address consumer needs
The Company made significant investments in the channels of the future, digitalising its traditional distribution.
The Company strengthened its e-commerce and Modern Trade visibility by hiring experienced resources
Competition risk An increasing number of players could increase competition and moderate market share The Company possesses extensive scale, brand recall and operational efficiency.
The Company is among a handful to work with ayurveda ingredients backed by scientific studies. Emamis quality emphasis translated into enhanced competitiveness.
The Company countered competitive action through brand building, product launches and extensions.
Most Emami products are present in niche spaces with limited competition.
Raw material & packing material risk Volatile raw material costs could impact margins The Companys manufacturing units are proximate to raw material sources and maintain sufficient stock to ensure continuous availability. Besides, the Company develops multiple raw material vendors, using the reverse auction method to moderate costs. The dedicated purchase team monitors raw material sources and prices. Based on market intelligence, effective hedging offsets an increase in raw material costs.
The Company developed multiple vendors for seamless delivery.
Regulatory & compliance risk Inability to comply with regulatory norms could result in penalties being levied The Company is an ethical player, responding with a sense of governance. Over the years, governance has reflected in complete alignment with the certification and compliance needs of business, no injury related to operations, workplace safety, commitment to customer interests and addressing statutory obligations. Emami implemented a compliance system and management tools to ensure that all its functions and units were aware of regulations.
Climate risk Unfavourable and delayed seasonal influences could impact offtake The Company possesses a range of products relevant across seasons. Emami extended to discretionary products, creating round- the-year sales visibility.
Apart from seasonal products, brands like Emami 7 Oils in One, Zandu, Kesh King and Fair and Handsome are largely perennial with no seasonal impact.
In 2020-21, Emami launched BoroPlus Organic Aloe Vera Gel, BoroPlus Hygiene range, EMASOL Home Hygiene range and various healthcare products under Zandu, which mitigates seasonal impact.
Currency risk Volatility in currency valuations could impact the bottom-line The Company manages currency risks by monitoring exposures coupled with prudent hedging.
Innovation risk Inability to introduce innovative products could affect growth. Existing brands are being constantly nurtured and upgraded for a better consumer experience. Consumer studies and clinical studies are conducted to address consumer preferenc and brand promise. Emamis R&D team addresses the needs of consumers; it launched 40+ products in the domestic business in the last financial year. Emami made investments in digitalising traditional distribution. Emami strengthened its Modern Trade and e-commerce initiatives.
Acquisition risk Acquisitions not in line with the Companys strategy could impact long-term growth Emami made successful acquisitions like Zandu, Kesh King and Creme 21 in the past. The Companys recently-acquired Creme 21 was integrated and introduced in new markets.
Human capital risk There is always a requirement of talented professionals to manage day- to-day operations The Company defined career paths to enhance talent retention, offering the best compensation packages in the industry. The Company reported a high employee retention of 91.7% in 2020-21.
42% employees had been associated with the Company for more than five years.
Emami developed a leadership pipeline.
Finance and liquidity risk Rising interest rates could affect profitability Emamis cash-and-carry business model enhanced cash flows.
Emami enjoyed a comfortable debt-equity ratio of 0.05.
Emami was rated (by CARE and CRISIL) A1+ (highest rating) for short-term borrowings of Rs 500 crore.
Emami was net cash surplus (RS 357 crore) at the close of 2020-21.
Pandemic risk The unpredictable mutation of the pandemic virus could impact growth The Company is convinced of increased health and wellness needs during the pandemic. The Company developed multiple remedial products in the Healthcare, Immunity, Personal Hygiene and Home Hygiene categories to address emerging needs.

Brand Capital

The Emami Brand Report


At Emami, we like to perceive our brands as ‘properties – enduring assets

(self-generated brands are not reflected in the Balance Sheet due to accounting limitations) – that generate revenue and profits well into the long-term. Our five Power Brands (average age

21 years) accounted for ~80% of the

Companys revenues in 2020-21.

Market leadership

At Emami, we focus on sustained market leadership as an index of our brand effectiveness.

Five Emami brands were decisive market leaders as on 31st March, 2021 and been market leaders for ten years or more. Eight Emami brands figured in the top three of their operating segment as on 31st March, 2021. This capacity of sustained market leadership has transformed the brands into annuity revenue drivers, an assurance of revenues and profit visibility in an uncertain world.

Brand Year of launch/ acquisition Category penetration (HHP Mar21) Market share (MAT Dec19) Leadership position Market share of the next highest competing brand
BoroPlus Antiseptic Cream 1982 25% 74% 1 25%
Navratna Cool Oil 1989 12% 66% 1 29%
Fair and Handsome Cream 2005 2% 65% 1 28%
Zandu & MenthoPlus Balms 2008 39% 55% 1 18%
Kesh King Ayurvedic Oil 2015 8% 27% 1 20%


At Emami, we believe that the success of our brands is not reflected as much in their longevity as much as in our capacity to sustain them with low-to-moderate annual investments. Most of our brands do not warrant substantial re-investments in positioning or visibility, making it possible for the

Company to benefit by allocating savings into new brands and launches. The capacity to sustain new launches in 2020-21 through accruals provides the Company with a platform for profitable and sustainable growth.

There is another factor that drives the success of our brands: the speed with which we mature our brands towards break-even point and subsequent profitability. This speed is derived from the strength of our eco-system: the strength of our Balance Sheet makes it possible to draw on resources and productise in response to emerging market opportunities; the capacity to build a critical mass of launch quantity; the ability to seed the newly-launched product through the Companys vast distribution network; the capacity to leverage diverse media and build visibility; the capacity to procure resources, materials, space and services at a low cost incidence; the ability to manufacture around the highest standards of quality and certifications; the ability to leverage the Emami brand rub-off to excite trade partners and consumers.

Promotional science

At Emami, we do not claim to be the largest promotional spenders; we claim to be prudent investors in consistent brand messaging.

Our promotion has been driven by visible advertising across prominent media (TV, print, digital and social media).

Our promotion effectiveness is derived from consistent brand positioning, use of celebrity endorsements, intensity of promotion and prudent selection of the communication channel.

Emamis prudent aggregation – art more than science – has helped the Company report significant brand gains, strengthening business sustainability.

Emami has been a pioneer in engaging celebrities to endorse its brands.

Emami was first to engage in in-film advertising in the 1980s with the filmAgar Tum Na Hote, starring superstar Rajesh Khanna, Rekha and Raj Babbar.

The Company has engaged renowned names from Indias film industry, sports and art fraternity.

Indian cinema icons like Amitabh Bachchan and Shah Rukh Khan have been endorsing Emami brands for more than a decade.

More than 60 celebrities have been associated with Emami brands over the years.

Measuring our brand efficiency

At Emami, we measure the efficiency of our brand through a simple metric: how much we can extract from our brands compared with what we put into them.

The more efficient we become in terms of brand spending, the greater bang we generate from our buck and the larger our capacity to reinvest in the existing brands basket or additional brands.

Pillars of our brands strategy

Building mother brands Creating sub- brands around mother brands Focusing on innovative products and launches Evolving our messaging Enhancing clarity and consistency of our brand product salience
Sustaining our brand promotion Strengthening our endorsement compatibility Messaging around desired consumer aspirations (not products) Translating brand strengths into quicker offtake and a shorter receivables cycle

The strengths of the Emami brand

Recall Trust Availability Accessibility
The Emami brand is not a logo or a product; the brand is a multi-decade tradition across generations in India The Emami brand stands for ‘bharosa or a peace of mind on account of its product, service and corporate integrity The Emami brand is available whenever consumers need it – adequately stocked (without being dumped in the market) – which means that no consumer needs to return disappointed The Emami brand is available across more than 45 lac retail points across India, ensuring that it is never too distant to buy when consumers need it
Affordability Choice Consistency Growing the market
The Emami brand provides a superior price-value proposition to consumers – a considerably superior return on their spending that encourages them to pay a reasonable premium and buy repeatedly The Emami brand stands for a wide choice across a range of products that makes it a single-stop solution provider for family needs The Emami brand stands for superior consistency batch after batch, which means that consumers can bank on the highest efficacy standards The Emami brand does not just focus on market share accretion; it is focused on innovation and solution evangelism that makes it possible to grow the market instead

Financial Capital

Emamis Financial Capital

How Emami has created a foundation of profitable and sustainable growth, enhancing shareholder value


At Emami, our objective is to consistently enhance shareholder value and, in doing so, outperform the returns we may have generated in the past through the prudent utilisation of resources at our disposal.

Over the years, the Company consistently reinvested accruals with the objective to maximise growth, generate robust cash flows, strengthen margins and enhance shareholder value. During the year under review, the Company encountered an unexpected market disruption on account of a pandemic outbreak and erosion in consumer sentiment.

Despite this headwind, the Company reported 8% sales growth, 28% EBIDTA growth and 470 bps increase in EBIDTA margin.

Key challenges and counter-initiatives

There was a challenge in addressing the need for cash flows to meet the ongoing overheads on the one hand and business investments on the other, reconciling the existing needs of the business with growth.

The Company focused on generating a sustainable cost advantage by reducing fixed costs. This was achieved through a structured programme that comprised a review of administrative costs and regular raw material price monitoring for effective hedging. This War on Waste (WoW) project is expected to generateRS 80-100 crore through cost reduction across various expense heads (media, materials, administration and selling costs, among others).


The Company enjoys one of the highest margins in Indias FMCG Companies, generating an attractive corpus for reinvestment. The Company is debt-free despite having invested more than RS 2,600 crore in acquisitions over 12 years.

The Company has been consistently paying a dividend of ~40%; it engaged in a share buyback in 2020-21, acquiring 94.2 lac shares amounting to RS 192 crore (excluding tax).

The Company was rated at A1+by CRISIL and CARE, validating its financial foundation.

Highlights, 2020-21

The Companys performance was impacted due to the pandemic-induced lockdown. However, margins increased witRs 8% sales growth due to stringent cost control and benign raw material prices.

The Company declared Interim Dividends of RS 4/ per equity share during the second and third quarters of the year under review.

The Company achieved its highest EBIDTA margin during the year under review.

Outlook, 2021-22

Going forward, the Company intends to maintain decent margins on the back of stringent cost control and volume-led growth. Increase in raw material costs could be absorbed through higher operational efficiency and judicious price increases.

Financial review

Particulars Revenue Growth Gross margin EBIDTA growth EBIDTA margin PAT growth PAT margin Cash profit growth Cash profit margin
Q1, 2020-21 -26% 66.5% -8% 25.5% 1% 8.2% -7% 23.8%
(+230 bps) (+490 bps) (+220 bps) (+ 480 bps)
Q2, 2020-21 11% 70.3% 33% 35.0% 23% 16.1% 31% 31.7%
(+60 bps) (+570 bps) (+160 bps) (+480 bps)
Q3, 2020-21 15% 70.4% 29% 36.4% 45% 22.4% 32% 32.5%
(+210 bps) (+390 bps) (+460 bps) (+420 bps)
Q4, 2020-21 37% 62.6% 65% 22.3% 276% 12.0% 57% 23.4%
(-260 bps) (+380 bps) (+760 bps) (+300 bps)
2020-21 8% 67.7% 28% 30.7% 50% 15.8% 29% 28.5%
(+70 bps) (+470 bps) (+440 bps) (+440 bps)

The Companys performance was impacted due to the pandemic-induced lockdown. However, margins increased despite lower sales due to stringent cost control and benign raw material prices.

The Company declared a first and second interim dividend of RS 4 per equity share during the second and third quarters of the year under review.

The Company achieved its highest ever EBIDTA margin during the year under review.

Key Ratios

Parameters 2020-21 2019-20 Reasons for variance
ROE (on cash profit) 46.6% 35.1%
ROCE (on cash profit) 44.2% 31.4% Higher sales and reductionincostsledtogrowthincashprofit
Return on Net Worth 25.8% 16.6%
Debt Equity Ratio (x) 0.05 0.12 Due to a decrease in borrowings and increased net cash
Interest Cover (x) 43.9 18.8 Due to a higher EBIDTA over the previous year
Current Ratio (x) 1.3 1.4

Working Capital

Parameters (days) 2020-21 2019-20
Trade receivables* 29 42
Inventory 38 33
Trade payables 44 45
Other receivables** 18 29
Net Working Capital 41 59

* Due to an increase in collections from customers ** Due to a reduction in advance from various vendors

Internal control systems and their advocacy

The Company has in place an adequate system of internal controls commensurate with its size, requirements and the nature of operations. These systems are designed keeping in view the nature of activities carried out at each location and various business operations. The Companys in-house internal audit department carries out internal audits at all manufacturing locations, offices and sales depots across the country as well as overseas subsidiaries. The objective is to assess the existence, adequacy and operation of financial and operating controls set up by the Company and to ensure compliance with the Companies Act, 2013, SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and corporate policies. The Companys internal audit department and risk management system have been accredited with ISO 9001:2015 and ISO 31000:2009 certifications, respectively. A summary of all significant findings by the audit department along with the follow-up actions undertaken thereafter is placed before the Audit Committee for review. The Audit Committee reviews the comprehensiveness and effectiveness of the report and provides valuable suggestions and keeps the Board of Directors informed about its major observations from time to time.

Human Capital

Emamis Human Capital

Over the years, Emami has invested in skills, experience and knowledge to build a passionate and outperforming company


Emamis HR practice conforms to all the norms laid down in the national and international labour regulations. The Company is an equal opportunity employer with no bias for gender, race, religion, linguistic or geographic preference. Professional credentials are the only criteria for selection of a candidate by the Company.

The demographic profile of the Company reflects national diversity. Built on the foundation of its values and a commitment to the Group Code of Conduct, Emami strives to provide a safe, challenging and rewarding environment for each of its employees. The Company provides a learning work environment where necessary resources are provided to employees to maximise productivity. The Companys strength lies in its diverse, experienced, talented and professional workforce, enabling it to survive in the dynamic business environment.


Large organisation marked by rising retention Nearly half the organisation is below 35 years of age 16% of the Company staff comprises MBAs Revenue per employee rose 11% in 2020-21

Key inputs

• Continued investments in capability building for current and future skill sets

• Talent management and succession planning to ensure continuity with respect to critical skills

• Focused on achieving workforce diversity and inclusion

• Constructive engagement with employees and representative labour organisations

• Fostering our commitment to integrity and value-driven leadership

• Increased focus on employee health, safety and wellbeing

• Introduced flexible work processes and schedules to enable employees to effectively deliver on their mandates

• Benchmarked remuneration, incentives and performance management practices

• Deployed a digital platform for enabling employees to work virtually and remotely

• Invested in technology to enhance workforce agility


• Superior business performance delivered by motivated teams

• High performance culture and the ough retention of critical talent

• Stable employee relations

• Safe, healthy and engaged workforce

Learning and development

At Emami, we believe that regular employee training and development contribute to sustainable growth. The learning and development agenda is based on two key criteria: the need for the business and the individuals aspiration. In consultation with functional leaders, the key business challenges are identified and people capability requirements mapped. Individual learning and growth needsareidentified annual performance review process.

These inputs define the learning and development agenda for the Company. The Company provides opportunities to employees to develop skill-sets for career progression.

During the 70 days of the nationwide lockdown in 2020-21, the Company introduced innovative ways to stay connected with employees. Initially, due to a slowdown in business activities, employee time was effectively used by initiating new learnings across areas. All learning initiatives and content were delivered virtually through self-paced and facilitator-led sessions.

The Company provides a learning based work environment where all necessary resources are provided to employees to maximise productivity.


Appreciation at Emami goes a long way in building self esteem, fellowship,

Employee appreciation badge

This is an Emami e-appreciation initiative, which enables employees to appreciate each other for their valued support and contribution by gifting e-badges. On the basis of the number of badges received, the top three recipients are recognised each quarter.

Emami Annual Excellence Award

Emamis functional heads respond with nominations to three award categories to showcase extraordinary contributions made by their team members. A Jury Board consisting of senior leaders of the organisation evaluates nominations; after in-depth deliberation and discussions, two winners are awarded for each category.

The Annual Excellence Gold and Silver awards are given in various categories

Leadership succession

(Design and implementation of Talent Management Program)

Emamis HR team helps the Company in the identification of key and critical talent who can be potential successors for key roles. These employees are assessed for their performance and potential, based on assessment reports, they are trained for larger responsibilities.

Competency framework

The corporate HR team has undertaken a project to define a

‘Competency Framework applicable for five work levels of employees across all functions. This enables the organisation to assess, develop and deploy talent based on the evaluation of an individuals competencies against the desired competencies of the role.

This increases the efficiency of various people processes.

Talent acquisition

The year 2020-21 imposed severe challenges in acquiring and onboarding talent due to uncertain business circumstances triggered by the pandemic. Emami has always been a socially and ethically responsible business entity, who stood by its hiring commitment offered to multiple candidates nationally and overseas despite business challenges.

Despite major challenges faced in acquiring talent remotely, Emamis HR team has been instrumental in creating ways and means in successfully navigating interviewing, onboarding, induction and all employee life cycle transactions including exit. The Emami HR team institutionalised the process of campus hiring and internships distantly.

To facilitate the interviewing skills of hiring managers, multiple e-workshops were organised to increase hiring effectiveness.

Emami is promoting Kolkata as a job destination to attract prospective employees from other cities. It is creating a digital campaign for prospective employees, promoting the work culture, living conditions in the city, and infrastructure like education system for children, among others.

Performance management system

Emami has always considered performance management process as one of its key business management process levers. The performance management system has matured and accepted across a cross-section of employees. Emami stood by its philosophy of recognising and rewarding performing talents responsible for growth during difficult times. This attempt at rewarding employees in trying times boosted morale which transpired in profitable growth.

Employee safety

Employee safety is of importance at Emami. Besides providing training to employees, the Company adopted multiple safety initiatives to ensure that all employees and their families remained safe and healthy in body and mind during the pandemic.

Emami formed a task force responsible for addressing employee concerns and remained vigilant in administering an adherence with safety protocols.

Emamis Intellectual Capital : R&D

How Emamis forward-looking R&D function has strengthened consumer loyalty


At Emami, our research and development has been directed around not just the creation of better ayurveda-based products; it has also consistently focused on a progressive reduction costs with the objective to enhance the price-value proposition. There are a number of reasons for this priority. One, Emami is focused on democratising the virtues of ayurveda-based products for the largest slice of the Indian population through enhanced product affordability.

Two, in a world where it is becoming increasingly difficult to pass costs to consumers, there is a greater focus on seeking cost economies from within the Companys operations. Three, Emami believes that the most sustainable company is the one with the lowest cost structure, putting a premium on research-led process improvements. The result is that the research and development function at Emami is continuously engaged in seeking better ways of doing the same things.

R&D in healthcare

Zandu brings its century old experience to the ayurveda healthcare space.

Following the acquisition of Zandu,

Emami extended its scientific expertise to existing products to improve their value and quality. Emamis healthcare R&D initiative was reinforced through scientific collaborations. In the last couple of years, the Company undertook a pharmacological efficacy project with NSHM at Kalyani in West Bengal to conduct claim support studies. Emamis R&D started conducting Herb Drug Interaction studies on most new drugs for lifestyle disorders; the Company emerged as the only one in India to conduct a herb-to-drug interaction study before product introduction. The Company is involved in the development of two new phytopharmaceutical drugs, a new category – with Indian Council of Medical Research, Ministry of Health and Family Welfare, GoI and the Department of Bio Technology (DBT), Ministry of Science and Technology, GoI – across five-year projects. It entered into a tripartite agreement with DBT and Zandu Foundation to widen sustainable cultivation and provide a buyback guarantee to the cultivated produce of medicinal plants.

The Company focused on quality and safe product manufacturing as per WHO-GMP (World Health Organisation Good Manufacturing

Practices) requirements. To enhance safety guarantee, the Company tests four contaminants – heavy metals (mercury, cadmium, arsenic and lead), aflatoxin

(metabolite of fungus and its trace in the finished product), pesticide residue (ensuring pesticides below standards) and microbial load (bacterial test) in all health care products. The Company was the first in India to test across these parameters for each product and production batch (as opposed to sample testing).

The Company commenced cell-based efficacy studies in a special bio-assay laboratory to accelerate efficacy elevation during drug development, making it possible to launch effective products faster.

Our strengths

Team: The R&D team comprises scientists, PhDs and post-graduates with specialisations in ayurveda, chemistry, pharmaceutics, pharmacognosy, microbiology, molecular pharmacology and biotechnology.

Alliances: The Company is engaged in alliances with research or educational institutions, catalysing path-breaking innovation.

Infrastructure: The Company invested in a state-of-the-art research and development centre in Kolkata to deepen product innovation, product processing science, competition intelligence, analytical development, perfumery science, quality assurance, packaging and development. Testing facilities comprise sophisticated testing and quality assurance equipment approved by Ministry of AYUSH and accredited by NABL. The unique bioassay laboratory has been designed and equipped to provide efficacy studies in line with the latest scientific parameters, deepening a culture of claims substantiation, a competitive differentiator. Besides, a specialised facility makes it possible to isolate and characterise pure phytochemical compounds used in the quality management of certain finished products; a resident library of about 150 compounds from medicinal plants was created.

Quality: Quality testing methods extend beyond regulatory requirements to the use of phytochemical marker compounds in testing products like sennosides in the Nityam tablet, andrographolide in the Kalamegha capsule, curcumin in the Turmeric capsule and Withaferin A in the Ashwagandha tablet.

Knowledge-driven: The Companys dedicated team studies developments in the global market. Its responsive R&D is harmonised with rapidly changing external developments facilitated by collaborative products development with a range of vendors, widening the Companys opportunity window. Focus: The Companys institutionalised process comprises a competent examination of processes, resource suppliers, global technology improvements (that enhance output with a corresponding reduction in the per unit production cost) and substitutes identification (without compromising product quality and related interventions).

Emamis key research partners

Indian Council of Medical Research: Apex body for the formulation, coordination and promotion of biomedical research. The Councils research priorities coincide with national health priorities.

Department of Bio-technology: Under the Ministry of Science and Technology responsible for administrating development and commercialisation in the field of modern biology and biotechnology in India.

Indian Institute of Integrative Medicine: National

Institute of the Council of Scientific & Industrial

Research (CSIR) of India, focusing primarily on the research on drug discovery from natural products (medicinal plants and microbial species).

Zandu Foundation: Engaged in community, personal and social services. It started the Biotech – KISAN Hub of Gujarat, a part of Department of Biotechnologys novel initiative to promote the cultivation of quality medicinal plants through the sustainable use of bio-resources that generate additional income for local farmers.

R&D in Consumer Care

At Emami, the development of aspirational products to enhance consumer life quality has been central to the business. During the pandemic year, the role of R&D was of paramount importance. The Company placed a greater emphasis on Personal and Home Hygiene products and launched multiple categories during the year under review.

Highlights, 2020-21

• Developed BoroPlus Personal Hygiene range consisting of sanitisers, soaps, handwash, body wash and hygiene liquid.

• Developed Emasol Home Hygiene range with distinctive BGV24 technology and a unique 24-hour protection proposition.

• Developed the Navratna Therapy range without sulphate, artificial colours, fragrance, silicone and parabens.

• Streamlined processes around a scientific approach, effective collaboration, better management and improved productivity, which generated attractive savings.

Preparing for the future

The Company is building capabilities in the following areas:

• Natural, organic, ayurvedic formularies with Ecocert, Cosmos and

NPOP certification, with customised tweaks for critical sensorial and fragrances etc.

• Partnering external manufacturers for differentiating technologies to support new business opportunities.

• Investing in training and grooming talent; studying new products and segments.

Social & Relationship Capital : Governance

Emamis Social & Relationship Capital

Sharda Shah has been an investor in Emami since its publicissue in 2005. The reason for her long-term holding: timely

communication about the performance, a detailed annual report, presentations every quarter and superior corporate growth. This has helped grow her investments 42x in 16 years.


Emami is more than the name of a Company; it is a metaphor for things that enhance societal value. The result is a positive rub-off of the Companys product integrity into a larger corporate recall that stands for enduring engagements with stakeholders, value-creation, community respect and responsible citizenship.

Key priorities

• Enduring relationships with all stakeholders (communities, customers, regulators, investors, suppliers, distribution partners, service providers, governments, media and other key stakeholders)

• Responsible corporate citizenship

• Robust governance framework

• Enunciated policies and processes

Key initiatives, 2020-21

• Engagements with key stakeholders; management of reasonable stakeholder expectations

• Socio-economic investments focused on enhancing community standards

• Support for economically marginalised communities (education, livelihood and other areas)

• Implementing a company-wide ethical framework and legal compliance processes (system-based control)

• Meetings with stakeholders through the virtual mode


Recognition as a good corporate citizen with a reputation for quality products, processes and practices Value delivered to stakeholders Meeting legitimate stakeholder expectations Uplifting community lives

Emamis governance commitment

Emami is a governance-driven organisation led by a strong Board, having outlined SOPs for most functions, proactive investment in digitalisation and an extensive compliance commitment. Emamis stakeholder-inclusive governance is marked by transparency and communication. During the year under review, the Company entered into a range of structured engagements with its stakeholders.

Composition of the Board

16 Directors

• 8 Independent Directors

• 7 Executive Directors

• 1 Non Executive Director

• 12.5% of the Board comprised women

Special Board committees

• Corporate Governance Committee

• Share Transfer Committee

• Finance Committee

• Buy-back Committee (dissolved on 5th November, 2020)

Statutory Board Committees

• Audit Committee

• CSR Committee

• Nomination and Remuneration Committee

• Risk management Committee

Sector- specific skills of Directors Financial planning Taxation and foreign taxation Strategic planning Corporate affairs Commercial & corporate law Arbitration Foreign collaborations
Banking Mergers and acquisitions Corporate restructuring Factory operations Distribution Procurement Packaging
Human resource management Information technology Corporate communication Media and advertising functions Marketing Brand development Understanding of consumer behaviors Risk management and stakeholder management

Engaging with stakeholders

Emami focuses on strengthening returns to shareholders through a robust business model, communication transparency, investor engagement through conference telephone calls, presentation and publication of financial results across media formats.

The Companys detailed annual report represents a powerful tool to highlight performance and strategy. Its grievance redressal system addresses investor grievances through timely resolution. Emami also engages with government agencies in driving projects for industry benefit. It is engaged with the Ministry of Ayush for various projects, government institutions for the preservation of endangered medicinal plants in the north-east, conducting pharmacological studies and developing Ayurveda-based medicines. It is also a member of various industry associations like Confederation of Indian Industry (CII), Federation of Indian Chamber of Commerce and Industry (FICCI), MCC Chamber of Commerce and Industry (MCCI), Bharat Chamber of Commerce (BCC) and Indian Chamber of Commerce (ICC).