EMAMI LIMITED

[Audio] Good morning everyone! Today, I'll be presenting to you EMAMI Limited's Cost Audit Summary for the Fiscal Year 2022-2023. We'll be discussing a variety of topics, including EMAMI Limited's operations, scope of audit, performance analysis, margin review, capacity utilization, and other observations to reach a conclusion and provide recommendations. Let's get started!.

[Audio] We'll move on to Slide 2 now to discuss the agenda for our audit. This audit has been arranged to review the cost structure of EMAMI LIMITED for the FY 2022-2023 and to evaluate the performance, margins, and capacity utilization. Additionally, our review will include any other observations and a conclusion with recommended corrective action. Let's begin..

[Audio] Taking a closer look at Emami Limited's Cost Audit Summary for the financial year 2022-2023, we can gain insight into the company's performance and operational efficiency. This audit covers a multitude of areas, affording us a better understanding of our cost structure, potential risks, opportunities, and obstacles. With this knowledge, we aim to increase profits and reach our business objectives. Let's examine the details..

[Audio] Emami Limited, a leading Indian manufacturing company, has a formidable presence in seven different units across the country. The fully operational units are Pacharia, Amingoan, Pant Nagar, Vapi, Masat, Dongri, and Abhoypur, with one unit being partially operational and one non-operational. These assets were evaluated and listed in the cost audit summary for the financial year 2022-2023..

[Audio] V K Jain & Co., as the cost auditors of Emami Limited, have conducted a comprehensive audit of their cost for the financial year 2022-2023. We ensured that all aspects of the audit complied with The Companies Act, 2013, The Companies Rules, 2014 and the Cost and Works Accountants Act. The audit focused on Drugs and Pharmaceuticals and Organic Chemicals CTA codes 30049011 and 34029012. All the products under the mentioned CTA codes that were produced or traded were included in the audit process. A consolidated report of all uncovered products was included in the final report. Products in the audit scope that were solely traded were excluded..

[Audio] The chart in this slide shows the performance of key products and total turnover for the past two financial years. In the current financial year, Ayurvedic Medicine products have seen a notable growth of 17,179 compared to the previous year's value of 2,32,735. On the other hand, Other Products Manufacturing and Trading has gone down by 15,407 from the previous year. All in all, total turnover has decreased by 7,834 in comparison to the earlier year. These figures reveal the present financial performance of our organization..

[Audio] EMAMI Limited's cost audit summary reveals that the profitability of its ayurvedic products has decreased by 2.72% to Rs 661.82 Cr, yet overall profitability has improved by 4.7% to Rs 598.66 Cr. Per ton margins of ayurvedic products have increased by 2.79%, however, volumes have decreased by 5.35% resulting in a reduction of the realisation per metric ton by .006%. Cost of production per metric ton has increased by 2.8%, likely due to higher material prices..

[Audio] Cost audits can be complicated to analyze, but Emami Limited's situation for the 2022-2023 fiscal year has been assessed. Production volumes dropped 8.9% to 32,692.5 metric tons, and capacity utilization decreased from 37.03% to 33.4%. This equates to an annual decline of 10.9%. Capacity saw changes, with the Amingaon unit increasing by 2,680MT, the Pacharia unit by 3,599.8MT, and the Abhoypur unit decreasing by 5,280MT, resulting in a net increase of 999.8MT. As a result, idle costs totaled 10.40 crores over 240 days at the Dongri unit..

[Audio] During our audit in Abhoypur, it was observed that there was a loss in the trading activity of RM & PM. We would kindly request your cooperation to share the completed accounts with us after the allocation of expenses from units and other details, in order for us to expedite our auditing process and make it more efficient. During our review of the Cost of Goods Sold, a new G/L account named 'Abnormal Loss' was created to track process losses incurred this year. We propose renaming this account to better reflect the nature of these expenses. We have also noted other observations during our audit, which we will include in our report..

[Audio] In the financial closing valuation, the 'Stock at Factory' items were incorrectly categorized. After consulting with Mr. B. Das, it was made clear that these items should be associated with Brand expenses. For precise inventory tracking, we suggest establishing a distinct column for such inventory. At the Amitgaon plant, all repair expenses linked to the production process were linked to the 'CREAM Pkg' cost center. To ensure accurate cost allocation and better cost management, these expenses should be distributed to their respective cost centers. We recommend that separate product-wise sub-contracting reports be created for Unit sub-contracting, E-commerce-related sub-contracting, and Combo items, noting any Mother-Child relationships. This approach can give greater insights into subcontracting activities and costs..

[Audio] I'd like to thank you for your time and attention today. We appreciate that you have taken the time to look at our Cost Audit Summary for EMAMI LIMITED for FY 2022-2023. We hope that this information can help you further understand the financial position of the company. Again, thank you for your consideration..

[Audio] Cost management is an integral part of realizing any organization’s strategic objectives. The audit summary of EMAMI Limited for fiscal year 2022-2023 delivered by V K Jain & Co. gives us instructive proposals concerning cost reliance and cost optimization. Incorporating these proposals, if executed in the organization, can aid EMAMI Limited to gain augmented proficiency and amplified bottom-line outcomes. I strongly suggest the organization to take these proposals into consideration and make them a component of their customs..