The Members of
Everest Industries Limited
Your Directors are pleased to present the Eighty-Fourth Annual Report together with theAudited Financial Statements for the financial year (year') ended 31stMarch 2017.
(Rs. In Lakhs)
|Particulars ||Financial Year ended |
| ||Standalone ||Consolidated |
| ||31.03.2017 ||31.03.2016 ||31.03.2017 ||31.03.2016 |
|Net Revenue from operations & Other Income ||115537.64 ||131335.63 ||116796.04 ||131337.34 |
|Profit before Depreciation & Finance Costs ||4622.83 ||9981.74 ||4536.74 ||9995.67 |
|Less: Depreciation ||2488.36 ||2562.70 ||2513.60 ||2562.70 |
|- Finance Costs ||1889.53 ||2284.47 ||1889.53 ||2284.49 |
|Profit before Tax ||244.84 ||5134.56 ||134.00 ||5048.48 |
|Tax Expense ||(1.20) ||1603.92 ||9.91 ||1604.35 |
|Profit for the year ||246.04 ||3530.64 ||123.70 ||3444.13 |
|Add: Balance in Profit & Loss Account ||22694.79 ||20455.69 ||22597.75 ||20445.16 |
|Add: Minority Interest ||- ||- ||71.19 ||- |
|Profit Available for Appropriation ||22940.83 ||23986.33 ||22792.64 ||23889.29 |
|Appropriations: || || || || |
|General Reserve ||- ||360.00 ||- ||360.00 |
|Dividend ||- ||771.67 ||- ||771.67 |
|Tax on Dividend ||- ||159.87 ||- ||159.87 |
|Closing Balance ||22940.83 ||22694.79 ||22792.64 ||22597.75 |
The Board of Directors have recommended a dividend of 10% i.e. Rs. 1/- per equity shareof Rs. 10/- each for the Financial Year ended 31st March 2017 subject to theapproval of the members. The total outgo on account of dividend including tax on dividendwill be Rs. 185.63 lakhs as against Rs. 931.54 lakhs for the previous financial year.
The Indian economy has performed creditably compared to most developed and emergingmarkets of the world in the past year. The macroeconomic condition is stable and consumerprice inflation is well under control. Even as the economy has made progress the impactof demonetisation was felt during the months of November 2016 to February 2017on demand. Under these constraints the Company achieved a turnover of Rs. 1155 crores.The Highlights of the Company's standalone performance are as under:
1. Revenue from operations during the year at Rs. 115537.64 lakhs was lower by 12.03%as compared with Rs. 131335.63 lakhs in the previous year. Top line in building productssegment recorded a decrease of 11.32% whereas the steel building segment recorded adecrease of 13.25%.
2. Production volume in the two business segments were as follows:
a. In building products segment the production at 662463 MT was lower by 6.62% ascompared to 709433 MT in the previous year. b. In steel buildings segment the productionat 47161 MT was lower by 0.39% as compared to 47347 MT in the previous year.
3. Operating Profit (EBIDTA) at Rs. 3716.77 lakhs was lower by 57.24% as compared toRs. 8691.35 lakhs in the previous year.
4. Profit before Tax decreased by 95.23% to Rs.244.84 lakhs as compared to Rs. 5134.56lakhs in the previous year.
5. Cash profit was Rs.2632.26 lakhs as compared to Rs. 6368.56 lakhs in the previousyear.
6. The consolidated revenue from operations of the Company for the year ended 31stMarch 2017 was Rs. 116796.04 lakhs lower by 11.07% as compared to Rs. 131337.34 lakhsin the previous year.
The consolidated operating profits before other income and depreciation was Rs.1739.18lakhs as compared to Rs.6318.32 lakhs in the previous year. Profit after tax wasRs.123.70 lakhs as against Rs. 3444.13 lakhs in the previous year.
TRANSFER TO RESERVES
The Company proposes to retain the entire amount of profit in the Profit and Lossaccount.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors state that:
a. in the preparation of the annual accounts for the year ended 31st March2017 the applicable accounting standards have been followed and there are no materialdepartures from the same;
b. the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2017 and ofthe profit of the Company for the year ended on that date;
c. the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013(Act') for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities;
d. the Directors have prepared the annual accounts on a going concern' basis;
e. the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
f. the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Act Mr Aditya Vikram Somani Chairmanretires by rotation at the forthcoming Annual General Meeting and being eligible offershimself for re-appointment. The Board of Directors recommends his re-appointment.
A brief resume nature of expertise details of other directorships and otherinformation of Mr Aditya Vikram Somani Chairman as stipulated in Secretarial Standard 2and Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is appended as an annexure to the notice of the ensuing Annual GeneralMeeting.
During the year under review the Board on the recommendation of Nomination andRemuneration Committee in its meeting held on 29th April 2016 approved theappointment of Mr M L Gupta as Independent Director of the Company w.e.f. 29th April2016 to 30th September 2019 which was duly approved by the members at the 83rdAnnual General Meeting of the Company. Mr Madan Lal Narula resigned from the directorshipof the Company w.e.f. 30th January 2017 as his tenure as Independent Directoras per the Company's policy ended on 29th January 2017. The Board places onrecord its appreciation for the invaluable contribution and guidance provided by Mr MadanLal Narula during his tenure as director of the Company.
The Board in its meeting held on 25th January 2017 approved the change inthe period for which remuneration to be paid to Mr Y Srinivasa Rao Whole time Directordesignated as Executive Director Mr Aditya Vikram Somani Whole time Director designatedas Chairman and Mr Manish Sanghi Managing Director of the Company from 5 (five) years to3 (three) years with effect from 23rd April 2015 21st June 2016and 1st October 2016 respectively to comply with the provisions of schedule Vof the Companies Act 2013 which was approved by the members of the Company on 8thMarch 2017 by way of special resolution through Postal Ballot.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theCompanies Act 2013 and SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015.
Pursuant to the provisions of the Companies Act 2013 and Securities and Exchange Boardof India (Listing Obligations & Disclosure Requirements) Regulations 2015 the Boardhas carried out the annual performance evaluation of its own performance the Directorsindividually as well as the evaluation of the working of its Board Committees. Theexercise was carried out through a structured evaluation process covering various aspectsof the Board's functioning such as adequacy of the composition of the Board and itsCommittees leadership attribute of directors through vision and values strategicthinking and decision making adequacy of business strategy etc.
The performance evaluation of the Independent Directors was done by the entire Boardexcluding the Directors being evaluated. The performance evaluation of the Chairman Boardas a whole and the Non-Independent Directors was carried out by the Independent Directors.The Board of Directors expressed their satisfaction with the evaluation process.
The Company has one subsidiary in India viz. Everest Building Solutions Limited. ThisCompany is engaged mainly in rendering of erection and other related services to itscustomers. The subsidiary had a turnover of Rs. 1173.49 Lakhs and earned a Profit of Rs.24.92 lakhs before tax during the financial year 2016-17.
The Company also has a Subsidiary in Mauritius viz. Everest Building Products. ThisCompany operates as a holding company for its subsidiaries in the UAE. During the yearthe subsidiary earned an interest income of Rs. 35.37 lakhs and a net profit of Rs. 20.64lakhs mainly arising on account of interest on loans given.
The Mauritius subsidiary has two subsidiaries viz. Everestind FZE and Everest BuildingProducts LLC both incorporated in UAE. Everestind FZE is a legal entity involved in thetrading of Company's products in the middle east and foreign markets. This entity earned aturnover of Rs. 1149.33 lakhs and a net profit of Rs. 79.86 lakhs out of trading ofCompany's products and Interest on Loans during the year under review.
Everest Building Products LLC is currently setting up a project to manufacture fibrecement boards in the Middle East. The current market conditions prompted the management toput the project on hold and accordingly the expenditure on the preoperative stage to theextent of the deferral of the project has been charged to the profit and loss account. Theentity has in the meantime invested surplus funds in deposits to earn an income of Rs.0.49 lakhs and according the net loss for the financial year under review was Rs. 198.73lakhs.
In terms of proviso to sub-section (3) of Section 129 of the Act the salient featuresof the financial statement of the subsidiaries is set out in the prescribed Form AOC-1which forms part of the Board's Report as ANNEXURE-1. During the financial year2016-17 no Company has become or ceased to be a Joint Venture or Associate of theCompany.
Your Company has not accepted any deposits from the public during the year and assuch no amount on account of principal or interest on public deposits was outstanding ason the date of the Balance Sheet.
The Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements set out by Securities and Exchange Boardof India (SEBI'). A separate Report on Corporate Governance along with Certificatefrom M/s TVA & Co. LLP Company Secretaries on compliance with the conditions ofCorporate Governance as stipulated under SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 is provided as part of this Annual Report.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
During the year the Company has not entered into any contract/ arrangement with arelated party as specified under section 188 of the Companies Act 2013. Thereforedisclosure in Form AOC-2 is not required. The Policy on materiality of related partytransactions and dealing with related party transactions is available on the Company'swebsite at the link: http://www.everestind.com/about-us/share-holderinformation.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In accordance with the requirements of Section 135 of Companies Act 2013 your Companyhas constituted a Corporate Social Responsibility Committee. The composition and terms ofreference of the Corporate Social Responsibility Committee are provided in the CorporateGovernance Report.
The Corporate Social Responsibility Committee has formulated a Corporate SocialResponsibility Policy (CSR Policy) indicating the activities to be undertaken by theCompany which has been approved by the Board. The CSR Policy may be accessed on theCompany's website at the link: http://www.everestind.com/corporate-social-responsibility.The Company has identified five focus areas of engagement which are as under:
Capacity building skill development training and employment generation.
Promotion of education art culture and sports.
Preventive health care and Sanitation
Eradicating Hunger & Poverty
The Company would also undertake other need-based initiatives in compliance withSchedule VII to the Act. During the year the Company has spent Rs. 79.80 lakhs on CSRactivities. The financial data pertaining to the Company's CSR activities for theFinancial Year 2016-17 is attached in the prescribed format in ANNEXURE - 2 to theBoard's Report. The Company is undertaking the CSR activities through its trustEverest Foundation'.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
The Management's Discussion and Analysis Report for the year under review asstipulated under Regulation 34(2)(e) of SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 is presented in a separate section forming part of theAnnual Report.
EMPLOYEES' STOCK OPTION SCHEME
The Nomination and Remuneration Committee of the Board of Directors of the Companyinter alia administers and monitors the Employees' Stock Option Schemes of the Company inaccordance with the applicable SEBI Regulations.
The applicable disclosures as stipulated under the Securities and Exchange Board ofIndia (Share Based Employee Benefits) Regulations 2014 as on March 31 2017 with regardto the Employees' Stock Option Schemes (ESOS) are provided in ANNEXURE - 3 to theBoard's Report.
The Company has received certificates from the Statutory Auditors of the Company thatthe Schemes have been implemented in accordance with the SEBI Regulations and as per thespecial resolutions passed by the members in the Annual General Meeting. The certificatesshall be placed at the Annual General Meeting for inspection by the members.
During the year the Board in its meeting held on 29th April 2016 based onthe recommendation of Audit Committee recommended the appointment of M/s S.R. Batliboi& Co. LLP Chartered Accountants as Statutory Auditors of the Company in the 83rdAnnual General Meeting and the members appointed M/s S.R. Batliboi & Co. LLPChartered Accountants as Statutory Auditors of the Company in the 83rd AnnualGeneral Meeting for a period of 5 years subject to ratification by the shareholders atevery Annual General Meeting.
In terms of provisions of Section 139 of the Companies Act 2013 it is proposed toratify the appointment of M/s S.R. Batliboi & Co. LLP Chartered Accountants asStatutory Auditors of the Company from the conclusion of ensuing Annual General Meetingtill the conclusion of 88th Annual General Meeting of the Company. Members arerequested to ratify the appointment of M/s S.R. Batliboi & Co. LLP CharteredAccountants as Statutory Auditors of the Company as set out in the Notice convening theforthcoming Annual General Meeting.
There are no qualifications reservations or adverse remarks made by M/s S.R. Batliboi& Co. LLP Chartered Accountants as Statutory Auditors of the Company in theirreport for the financial year ended 31st March 2017. The Statutory Auditorshave not reported any incident of fraud to the Audit Committee or to the Board ofDirectors under section 143(12) of the Companies Act 2013 during the year under review.
As per the requirement of Central Government and pursuant to Section 148 of theCompanies Act 2013 read with the Companies (Audit and Auditors) Rules 2014 as amendedfrom time to time the Company has been carrying out audit of cost records.
The Board of Directors on the recommendation of Audit Committee has appointed M/sChandra Wadhwa & Co. Cost Accountants as Cost Auditor to audit the cost records ofthe Company for the financial year 2017-18. As required under the Companies Act 2013 aresolution seeking members' approval for the remuneration payable to the Cost Auditorforms part of the Notice convening the forthcoming Annual General Meeting.
The Board has appointed M/s TVA & Co. LLP Company Secretaries to conduct theSecretarial Audit of the Company for the financial year 2016-17 as required under Section204 of the Act and Rules made thereunder. The Secretarial Audit Report for the financialyear 2016-17 is attached as ANNEXURE - 4 to the Board's Report. The SecretarialAudit Report does not contain any qualification reservation or adverse remark.
DISCLOSURES AUDIT COMMITTEE
The Audit Committee of the Board comprises of Mr B L Taparia (Chairman) Mr M L Gupta(Member) and Mrs Bhavna G Doshi (Member). For details please refer to CorporateGovernance Report attached to this report. The Board has accepted all the recommendationmade by the Audit Committee.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee of the Board comprises of Mr M L Gupta(Chairman) Mr Amitabh Das Mundhra (Member) and Mr B L Taparia (Member). For detailsplease refer to Corporate Governance Report attached to this Annual Report.
The Nomination and Remuneration Committee has framed the Nomination Remuneration andBoard Diversity Policy. A copy of Nomination Remuneration and Board Diversity Policy isattached as ANNEXURE - 5 to the Board's Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Board has laid out the Company's policy on Corporate Social Responsibility (CSR)and the CSR activities of the Company are carried out as per the instructions of theCommittee.
The CSR Committee of the Board comprises of Mr A V Somani (Chairman) Mr M L Gupta(Member) Mr Manish Sanghi (Member) and Mr Y Srinivasa Rao (Member). For details pleaserefer to Corporate Governance Report attached to this report. The CSR Policy is availableon Company's website at the link: http://www.everestind.com/corporate-social-responsibility.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The Committee reviews and ensures redressal of investor grievances. For details pleaserefer to Corporate Governance Report attached to this report.
The Stakeholders Relationship Committee of the Board comprises of Mr M L Gupta(Chairman) Mr A V Somani (Member) and Mr Manish Sanghi (Member).
VIGIL MECHANISM POLICY
Pursuant to Section 177 of the Companies Act 2013 and rules made thereunder and theListing Regulations the Company has in place a mechanism for Directors employeesvendors and customers to report concerns about unethical behaviour actual or suspectedfraud violation of Code of Conduct of the Company etc. The mechanism also provides foradequate safeguards against victimization of Whistle Blower who avail the mechanism andalso provides for direct access to the Whistle Blower to the Chairman of the AuditCommittee. Pursuant thereto a dedicated helpline "Ethics Helpline" has beenset-up which is managed by an independent professional organization.
The Vigil Mechanism Policy may be accessed on the Company's website at the link:http://www.everestind.com/about-us/share-holder-information.
The Company has Risk Management Policy to mitigate the risks. The Company manages andmonitors the principal risks and uncertainties that can impact its ability to achieve itsstrategic objectives. The Internal Auditor of the Company prepares quarterly risk analysisreports which are reviewed and discussed in the Audit Committee Meetings.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation were observed.
NUMBER OF MEETINGS OF THE BOARD
The Board met six times during the financial year 2016-17 the details of which aregiven in the Corporate Governance Report that forms part of this Annual Report. Theintervening gap between any two meetings was within the period prescribed by the CompaniesAct 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY
The details of investments covered under the provisions of Section 186 of the CompaniesAct 2013 are disclosed in the Note No. 2.09 to the Standalone Financial Statement. Duringthe financial year 2016-17 the Company has given a guarantee to Yes Bank Limited of Rs.10 crores on behalf of its wholly owned subsidiary Company M/s Everest Building SolutionsLimited (EBSL) on account of EBSL availing working capital facility from Yes Bank Limited.The Company has not given any loans or provided any security under Section 186 of the Actduring the Financial Year 2016-17.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The required particulars relating to conservation of energy technology absorptionforeign exchange earnings and outgo as required are attached as ANNEXURE - 6 tothe Board's Report.
EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act 2013 Extract of AnnualReturn in the prescribed format is attached as ANNEXURE - 7 to the Board's Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended a statement showing the names and other particulars of the top ten employees interms of remuneration drawn set out in the said rules are provided in ANNEXURE - 8to the Board's Report.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided in the ANNEXURE - 9 to the Board'sReport.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save and except ESOS referred to in this Report.
4. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.
5. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status of the Company and its future operations.
6. No material changes and commitments affecting the financial position of the Companyhave occurred from the end of the last financial year till the date of this report.
7. No change in the nature of the business of the Company happened during the financialyear under review.
Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
The Company has continuously adopted structures that help attract best external talentand promote internal talent to higher roles and responsibilities. Everest's people-centricfocus providing an open work environment fostering continuous improvement and developmenthelped several employees realize their career aspiration during the year.
During the year the industrial relations at all the works of the Company were cordial.
Your Directors wish to place on record their gratitude to the Company's businessassociates trade partners dealers customers shareholders vendors bankers technologyproviders and other stakeholders all over India and overseas for the continued support andco-operation extended by them to the Company during the year. Your Board also thanks tothe Government of India State Governments and other Government Authorities for theircontinued support and encouragement to the Company and look forward to their support infuture.
Your Directors especially wish to place on record their sincere appreciation of theefficient services rendered by the Company's motivated team members from all Zones Worksand Offices.
| ||For and on behalf of the Board |
|Manish Sanghi ||Y Srinivasa Rao |
|Managing Director ||Executive Director |
|Mumbai 3rd ||May 2017 |
ANNEXURE - 1
STATEMENT CONTAINING SALIENT FEATURES OF THE FINANCIAL STATEMENTS OF SUBSIDIARIESASSOCIATE AND JOINT VENTURES OF THE COMPANY.
(Pursuant to the first proviso to Sub-Section (3) of Section 129 of the Companies Act2013 read with Rule 5 of the Companies (Accounts) Rules 2014-AOC-1)
PART A: SUBSIDIARIES
(Rs. In Lakhs)
|Name of the subsidiary ||Everest Building Products LLC* ||Everest Building Products ||Everestind FZE ||Everest Building Solutions Limited |
|1. Reporting period for the subsidiary concerned if different from the holding company's reporting period ||01.04.2016 To 31.03.2017 ||01.04.2016 To 31.03.2017 ||01.04.2016 To 31.03.2017 ||01.04.2016 To 31.03.2017 |
|2. Reporting currency and Exchange rate as on the last date of the relevant Financial Year in the case of foreign subsidiaries. ||AED Rs.17.6533 ||USD Rs.64.8386 ||AED Rs.17.6533 ||Rs. |
|3. Share capital ||176.60 ||2781.63 ||176.67 ||5.00 |
|4. Reserves & surplus ||(185.89) ||(30.90) ||(13.50) ||16.30 |
|5. Total assets ||2571.84 ||2758.38 ||2586.63 ||680.56 |
|6. Total Liabilities ||2581.12 ||7.65 ||2423.46 ||659.26 |
|7. Investments ||- ||263.24 ||- || |
|8. Turnover ||0.49 ||35.37 ||1149.33 ||1173.49 |
|9. Profit before taxation ||(198.73) ||24.28 ||79.86 ||24.92 |
|10. Provision for taxation ||- ||3.64 ||- ||7.47 |
|11. Profit after taxation ||(198.73) ||20.64 ||79.86 ||17.45 |
|12. Proposed Dividend ||- ||0 ||- ||- |
|13. % of shareholding ||49% ||100% ||100%** ||100% |
*Everest Building Products LLC is Company's subsidiary as the Company controls thecomposition of its Board of Directors.
**Everestind FZE is the wholly owned subsidiary of the Company's wholly ownedsubsidiary i.e. Everest Building Products Mauritius.
PART B: ASSOCIATES AND JOINT VENTURES: Not applicable
1. Everest Building Products Mauritius was incorporated on 9th September2013 Everestind FZE in Jebel Ali Free Zone Dubai UAE was incorporated on 18thDecember 2013 and Everest Building Products LLC in Ras Al Khaimah UAE was incorporated on7th December 2014.
2. Everest Building products LLC is yet to commence its Business operations.
For and on behalf of the Board
|Manish Sanghi ||Y Srinivasa Rao ||Nikhil Dujari ||Neeraj Kohli |
|Managing Director ||Executive Director ||Chief Financial Officer ||Company Secretary |
|Mumbai 3rd May 2017 || || || |