The Members of Everest Industries Limited
Your Directors take great pleasure in presenting Eighty-Seventh (87th)Annual Report of Everest Industries Limited ("Company" or "Everest")together with the Audited Financial Statements for the financial year ended March 312020.
|articulars || |
Financial Year ended
| || |
| ||31.03.2020 ||31.03.2019 ||31.03.2020 ||31.03.2019 |
|Revenue from Operations & Other Income ||129279.82 ||141059.60 ||129486.00 ||141479.37 |
|Profit before Depreciation & Finance Costs ||5218.01 ||1 1307.32 ||5165.32 ||11105.14 |
|Less : Depreciation ||2373.63 ||2055.50 ||2373.63 ||2055.50 |
|: Finance Costs ||704.17 ||761.57 ||704.17 ||763.20 |
|Profit before Tax ||2140.21 ||8490.25 ||2087.52 ||8286.44 |
|Tax Expense ||735.20 ||2069.87 ||735.20 ||2100.69 |
|Profit for the Year ||1405.01 ||6420.38 ||1352.32 ||6185.75 |
|Other comprehensive income for the Year net of tax ||(32.10) ||(35.95) ||(46.34) ||(45.26) |
|Total comprehensive income for the Year net of tax ||1372.91 ||6384.43 ||1305.98 ||6140.49 |
|Add: Balance in Profit & Loss Account ||32000.16 ||2684021 ||31866.77 ||26950.76 |
|Minority share ||- ||- ||- ||- |
|Profit Available for Appropriation ||33373.07 ||33224.64 ||33172.75 ||33091.25 |
|Appropriations: || || || || |
|General Reserve ||- ||- ||- ||- |
|Dividend ||1172.73 ||1015.70 ||1172.73 ||1015.70 |
|Tax on Dividend ||241.06 ||208.78 ||241.06 ||208.78 |
|Closing Balance ||31959.28 ||32000.16 ||31758.96 ||31866.77 |
The Board of Directors ("Board") have recommended a dividendof 10%
i.e Rs. 1/- per equity share of Rs. 10/- each for the financial yearended March 31 2020 subject to the approval of the members. The total outgo on account ofdividend including tax on dividend will be Rs. 156.36 lakhs as against Rs. 1413.79 lakhsfor the previous financial year
The Company has achieved a Total Revenue of Rs. 1293 crores during thefinancial year 2019-20 ("Year"). The highlights of the Company's performance onstandalone basis during the Year are as under:
1. Revenue for the Year at Rs. 1292.80 crores was lower by 8.4% ascompared with Rs. 1410.60 crores in the previous year Top line in Building Productssegment recorded a decrease of 7.3% whereas in the Steel Buildings segment the samerecorded a decrease of 10.8%.
2. Production volume in the two business segments were as follows:
a. In Building Products segment the production for the Year at 759276MT was lower by 11.88% over 861650 MT in the previous year
b. In Steel Buildings segment the production for the Year at 46486 MTduring the year was lower by 11.18% over 52338 MT in the previous year
3. Operating Profit (EBIDTA) d s
lower by 53.85% over Rs. 113.07 crores in the previous year
4. Profit before Tax during the Year at Rs. 21.4 crores was lower by74.79% as compared to Rs. 84.90 crores in the previous year
5. Cash profit was Rs. 40.94 crores as compared to Rs. 85.26 crores inthe previous year
The consolidated revenue of the Company for the Year was Rs. 1294.86crores lower by 8.48% from Rs. 1414.79 crores in the previous year The consolidatedoperating profit for the Year was Rs. 51.65 crores as compared to Rs. 111.05 crores in theprevious year Consolidated Profit after Tax for the Year was Rs. 13.52 crores as againstRs. 61.86 crores in the previous year
Financial year 2019-20 was one of the most challenging years for theIndian economy which faced several headwinds from a slowdown in domestic and globalgrowth and geopolitical uncertainties. This was exacerbated by the outbreak of theCoronavirus disease ("COVID-19") pandemic in the second part of the fourthquarter Faced with a crisis with no parallels in recent history most governments acrossthe world including in India prioritised life over anything else and imposed a lockdown tobreak the chain of transmission.
The human impact of the virus and the containment efforts have resultedin supply and demand disruptions resulting in a sharper growth deceleration. Thesituation remains volatile with the trajectory of the virus undetermined evolving hotspot geographies the success of containment measures uncertain the severity and durationof resulting economic crisis and the extent of structural damage unknown. There are manyunknowns today and hence the near-term outlook is extremely uncertain. Our focus remainson safety of our people protecting supply lines serving demand contributing to thesociety and optimising cost and cash.
The Company's focus on liquidity supported by a strong balance sheetand acceleration in cost optimization initiatives would help in navigating any near-termchallenges in the demand environment. Accordingly at present the management does not seeany medium to long term risks in the Company's ability to continue as a going concern andmeeting its liabilities as and when they fall due.
Transfer to Reserves
The Company proposes to retain the entire amount of profits in theProfit and Loss account.
During the Year under review there was no change in the Share Capitalof the Company. The Share Capital of the Company as on March 31 2020 was Rs.156363400/- divided into 15636340 equity
shares of Rs. 10/- each.
Directors' Responsibility Statement
Your Directors state that:
a) in the preparation of the annual accounts for the financial yearended March 31 2020 the applicable accounting standards have been followed and there areno material departures from the same;
b) the Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at March 31 2020and of the profit of the Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a goingconcern' basis;
e) the Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and areoperating effectively; and
f) the Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.
Directors and Key Managerial Personnel
In accordance with the provisions of the Companies Act 2013("Act") Mr Y. Srinivasa Rao Director of the Company retires by rotation atthe forthcoming Annual General Meeting and being eligible offers himself forre-appointment. The Board of Directors recommends his re-appointment as Director of theCompany.
The Board on the recommendation of Nomination & RemunerationCommittee ("NRC") and in accordance with provisions of the Act and SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 ("ListingRegulations") has appointed Mr Anant Talaulicar as an Additional IndependentDirector for a period of five (5) years on November 21 2019 subject to the approval ofmembers at the forthcoming 87th Annual General Meeting ("AGM") of the Company.
He shall hold office as an Additional Director upto the date of theAGM. Mr Talaulicar is eligible for appointment as an Independent Director The Board is ofthe opinion that Mr Talaulicar possesses requisite qualification experience expertiseand holds high standards of integrity. The resolution pertaining to appointment of Mr.Anant Talaulicar as an Independent Director is set out in Item no. 4 of the Notice of theAGM.
The Board in its meeting held on March 24 2020 has re-appointed Mr YSrinivasa Rao Whole Time Director designated as Executive Director of the Company for afurther period of two years w.e.f. April 23 2020 to April 22 2022 subject to theapproval of the members of the Company. The resolution pertaining to his re-appointment& the remuneration payable to him is set out at item no. 5 of the Notice of the AGM.
During the Year members of the Company in the 86th Annual GeneralMeeting have fixed the remuneration to be paid to Mr Manish Sanghi Managing Director ofthe Company for the remaining period of his current term as Managing Director of theCompany by passing a Special Resolution.
During the Year members of the Company in the 86th Annual GeneralMeeting have re-appointed Mr M. L. Gupta as an Independent Director for a second term offive (5) years on the Board of the Company with effect from October 1 2019 upto September30 2024.
At the time of fixation of remuneration of Mr Manish Sanghi ManagingDirector and Mr Y. Srinivasa Rao Executive Director the Company had adequate profits andthe remuneration paid / payable to Mr Sanghi and Mr Rao was well within the limitsprescribed under section 197 of the Act. However during the Year the Company hadinadequate profits for payment of remuneration to Managing Director and Executive DirectorAs a result the remuneration paid to Mr Sanghi and Mr Rao for the Year has exceeded thelimits specified under Section 197 of the Act read with Schedule V thereto. Pursuant toSection 197(10) of the Act the members of the Company can waive the recovery of excessremuneration by passing a special resolution. The Special Resolutions for approval of themembers for waiver of recovery of excess managerial remuneration paid by the Company to MrSanghi and Mr Rao are set out at Item No. 6 & 7 of the Notice of the AGM respectively.
In view of COVID-19 pandemic it is likely that the Company may haveinadequate profits in coming years to pay managerial remuneration to its executivedirectors. Therefore Special Resolution for approval of the members for payment ofremuneration to Mr Manish Sanghi Managing Director of the Company for the period April01 2020 to September 30 2021 is set out at Item No. 8 of the Notice of AGM.
The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet the criteria of independence asprescribed under the Act and Listing Regulations. All the Independent Directors of theCompany have registered themselves in the data bank maintained with the Indian Instituteof Corporate Affairs.
Pursuant to the provisions of the Act and Listing Regulations theBoard has carried out the annual performance evaluation of its own performance theDirectors individually as well as the evaluation of the working of its Board Committees.The exercise was carried out through a structured evaluation process covering variousaspects of the Board's functioning such as adequacy of the composition of the Board andits Committees 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 theentire Board excluding the Directors being evaluated. The performance evaluation of theBoard as a whole and the NonIndependent Directors was carried out by the IndependentDirectors.
The Board of Directors expressed their satisfaction with the evaluationprocess.
Holding Subsidiaries Associate & Joint Venture Companies
During the Year under review Falak Investment Private Limitedpromoter of the Company has become holding company of the Company w.e.f. March 23 2020.
The Company has a subsidiary in India viz. Everest Building SolutionsLimited. This company is engaged mainly in rendering of erection and other relatedservices to its customers. The subsidiary had a total income of f 40.15 Lakhs andincurred a Loss of f 32.01 lakhs during Year
During the Year the Board has approved the scheme of merger of EverestBuilding Solutions Limited (wholly owned subsidiary) with the Company under section230-232 of the Act in the Board meeting held on May 1 2019. A joint application undersection 230-232 of the Act was made before the Hon'ble National Company Law TribunalMumbai Bench ("NCLT"). The Hon'ble NCLT vide its order dated December 13 2019had dispensed with the requirement of holding meeting of shareholders and securedcreditors of the Company and directed that a meeting of those unsecured creditors of theCompany who have outstanding amount of f 2 Lakhs or more be held for the purpose ofapproving the scheme of Merger Unsecured creditors of the Company approved the aforesaidscheme of merger in their meeting held on February 20 2020. A joint Petition underSection 230232 of the Companies Act 2013 was made before the Hon'ble NCLT for obtainingsanction to the aforesaid scheme of merger and the same was admitted on March 12 2020.The Hon'ble NCLT vide its order dated March 12 2020 had fixed April 9 2020 as date forhearing of the aforesaid Petition. However hearing did not take place because ofnationwide lockdown due to COVID-19 pandemic.
The Company has a subsidiary in Mauritius viz. Everest BuildingProducts. This company operates as a holding company for its subsidiary in the UAE. Duringthe Year the subsidiary earned an interest income of f 0.02 lakhs and a net lossof f 25.38 lakhs mainly arising on account of impairment of investment.
The Mauritius subsidiary has a subsidiary Everestind FZE incorporatedin UAE. Everestind FZE is a legal entity involved in the trading of Company's products inthe Middle East and foreign markets. During the Year entity earned a total income of f2456.83 lakhs and a net loss of f 47.22 lakhs out of trading of Company'sproducts.
In terms of proviso to sub-section (3) of Section 129 of the Act thesalient features of the financial statement of the subsidiaries is set out in theprescribed Form AOC-1 which forms part of the Board's Report as ANNEXURE-1. During theYear no entity has become or ceased to be a subsidiary or Joint Venture or Associate ofthe Company.
The Company has not accepted any deposits from the public during theYear and as such no amount on account of principal or interest on public deposits wasoutstanding as on March 31 2020.
The Company is committed to maintain the highest standards of corporategovernance and adhere to the corporate governance requirements set out by Securities andExchange Board of India ("SEBI"). A separate Report on Corporate Governancealong with a certificate from M/s TVA & Co. LLP Company Secretaries on compliancewith the conditions of Corporate Governance as stipulated under Listing Regulations isprovided 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 a related party as specified under section 188 of the Act. 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 www.everestind.com/uploads/Files/161invuf Related-Party.pdf.
Corporate Social Responsibility
In accordance with the requirements of Section 135 of Act the Companyhas constituted a Corporate Social Responsibility (CSR) Committee. The composition andterms of reference of the CSR Committee are provided in the Corporate Governance Report.
The CSR Committee has formulated and recommended to the Board a CSRPolicy indicating the activities to be undertaken by the Company which has been approvedby the Board. The CSR Policy may be accessed on the Company's website at the link www.everestind.com/uploads/Files/194invuf CSR-Policy Final.pdf. The Company has identified five focusareas of engagement which are as under:
Capacity building skill development training and employmentgeneration.
Promotion of education art culture and sports.
Preventive health care and sanitation
Eradicating hunger & poverty
The Company also undertakes other need-based initiatives in compliancewith Schedule VII to the Act. During the Year the Company has spent f 117.6 Lakhson CSR activities as compared to the statutory requirement of f 118.76 Lakhs. Nationwidelockdown announced by the Government of India from March 25 2020 necessitated immediatesuspension of all the CSR Projects and consequently the Company could not spend remainingamount of f 1.16 Lakhs. Annual Report on CSR activities for the financial year2019-20 in the prescribed format is annexed as ANNEXURE-2 to this Board's Report. TheCompany is undertaking the CSR activities through its trust "EverestFoundation".
Business Responsibility Report
Business Responsibility Report for the Year under review as stipulatedunder regulation 34 of Listing Regulations in the prescribed format is annexed asANNEXURE-3 to this Board's Report.
Employees' Stock Option Scheme
The Nomination and Remuneration Committee of the Board of the Company inter-aliaadministers and monitors the Employees' Stock Option Schemes of the Company in accordancewith the applicable SEBI Regulations.
The applicable disclosures as stipulated under the SEBI (Share BasedEmployee Benefits) Regulations 2014 as on March 31 2020 with regard to the Employees'Stock Option Schemes (ESOS) is annexed as ANNEXURE-4 to this Board's Report.
The Company has received certificates from the Statutory Auditors ofthe Company that the Schemes have been implemented in accordance with the applicable SEBIRegulations and as per the special resolutions passed by the members in the Annual GeneralMeetings. The aforesaid certificates shall be available for electronic inspection by themembers during the 87th Annual General Meeting.
M/s S.R. Batliboi & Co. LLP Chartered Accountants has beenappointed as Statutory Auditors of the Company in the 83rd Annual General Meeting for aperiod of five (5) years subject to ratification
by the members at every annual general meeting. Pursuant to theamendment to section 139 of the Act effective from May 7 2018 ratification by membersevery year for the appointment of the Statutory Auditors is no longer required andaccordingly the Notice of forthcoming 87th Annual General Meeting does not include theproposal for seeking members' approval for ratification of Statutory Auditors'appointment.
There are no qualifications reservations or adverse remarks made byM/s S.R. Batliboi & Co. LLP Chartered Accountants Statutory Auditors of the Companyin their report for the financial year ended March 31 2020. The Statutory Auditors havenot reported any incident of fraud to the Audit Committee or to the Board under section143(12) of the Act during the Year under review.
The Company is required to maintain the cost records as specified bythe Central Government under section 148(1) of the Act and accordingly such accounts andrecords are made and maintained. As per the requirement of Central Government and pursuantto Section 148 of the Act read with the Companies (Audit and Auditors) Rules 2014 asamended from time to time the Company has been carrying out audit of its cost records.
The Board on the recommendation of Audit Committee has appointed M/sChandra Wadhwa & Co. Cost Accountants as Cost Auditors to audit the cost records ofthe Company for the financial year 2020-21. As required under the Act a resolutionseeking approval of the members for the remuneration payable to the Cost Auditors formspart of the Notice convening the forthcoming 87th Annual General Meeting.
Secretarial Auditor and Secretarial Standards
The Board has appointed M/s TVA & Co. LLP Company Secretaries toconduct the Secretarial Audit of the Company for the financial year 2019-20 as requiredunder Section 204 of the Act and the rules made thereunder The Secretarial Audit Reportfor the financial year 2019-20 is attached as ANNEXURE-5 to the Board's Report. TheSecretarial Audit Report does not contain any qualification reservation or adverseremark.
During the Year the Company has complied with the applicableSecretarial Standards issued by the Institute of Company Secretaries of India.
Disclosures Audit Committee
The Audit Committee of the Board as on March 31 2020 comprises of MrRajendra Chitale (Chairman) Mr B. L. Taparia (Member) Mr M. L. Gupta (Member) Mrs.Bhavna Doshi (Member) Ms. Padmini Somani (Member) and Mr Anant Talaulicar (Member). MrRajendra Chitale has been appointed as chairman of the Audit Committee w.e.f. May 3 2019.Ms. Padmini Somani and Mr Anant Talaulicar have been appointed as members of the AuditCommittee w.e.f. July 24 2019 and December 6 2019 respectively. For details pleaserefer to Corporate Governance Report attached to the Annual Report. The Board has acceptedall the recommendations made by the Audit Committee.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Board as on March 312020 comprises of Mr B. L. Taparia (Chairman) Mr. M. L. Gupta (Member) Mrs. BhavnaDoshi (Member) Ms. Padmini Somani (Member) and Mr Anant Talaulicar (Member). Mr B.L.Taparia has been appointed as Chairman of the Nomination and Remuneration Committeew.e.f October 24 2019. Ms. Padmini Somani and Mr. Anant
Talaulicar have been appointed as Members of the Nomination andRemuneration Committee w.e.f. April 10 2019 and December 6 2019 respectively. Fordetails please refer to Corporate Governance Report attached to this Annual Report.
The Nomination and Remuneration Committee has framed the NominationRemuneration and Board Diversity Policy. Nomination
Remuneration and Board Diversity Policy is available on the website ofthe Company at www.everestind.com/uploads/Files/342invufNomination-BoardDiversitvPolicv.pdf.
Corporate Social Responsibility Committee
The CSR Committee of the Board as on March 31 2020 comprises of Ms.Padmini Somani (Chairperson) Mr M. L. Gupta (Member) Mr Alok Nanda (Member) Mr ManishSanghi (Member) and Mr Y Srinivasa Rao (Member). For details please refer to CorporateGovernance Report which forms part of this Annual Report.
Stakeholders Relationship Committee
The Stakeholders Relationship Committee of the Board as on March 312020 comprises of Mr M. L. Gupta (Chairman) Mr Manish Sanghi (Member) and Mr Y SrinivasaRao (Member). For details please refer to Corporate Governance Report which forms part ofthis Annual Report.
Vigil Mechanism Policy
Pursuant to Section 177 of the Act read with rules made thereunder andthe Listing Regulations the Company has in place a mechanism for Directors employeesvendors customers and other stakeholders to report concerns about unethical behaviouractual or suspected fraud violation of Code of Conduct of the Company etc. The mechanismalso provides for adequate safeguards against victimization of Whistle Blower who availthe mechanism and also provides for direct access to the Chairman of the Audit Committee.A dedicated helpline managed by an independent professional organisation has been set upby the Company for the Whistle Blowers to report concerns about unethical behaviouractual or suspected fraud violation of Code of Conduct etc.
The Vigil Mechanism Policy may be accessed on the Company's website atthe link www.everestind.com/uploads/Files/163invuf VigilMechanisimPolicy.pdf.
The Company has Risk Management Policy to mitigate the risks. TheCompany manages and monitors the principal risks and uncertainties that can impact itsability to achieve its strategic objectives. The Internal Auditor of the Company preparesquarterly risk analysis reports which are reviewed and discussed in the Audit CommitteeMeetings.
Internal Financial Controls
The Company has in place adequate internal financial controls withreference to financial statements. During the Year such controls were tested and noreportable material weaknesses in the design or operation were observed.
Number of Meetings of the Board
The Board met six (6) times during the Year 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 under the Actand Listing Regulations.
Particulars of Loans Guarantees or Investments bythe Company
The details of investments covered under the provisions of Section 186of the Act are disclosed in the Note No. 2.05 to the Standalone Financial
Statements. The Company has neither given any loans nor provided anysecurity or fresh guarantee under Section 186 of the Act during the Year
Conservation of Energy Technology Absorption andForeign Exchange Earnings and Outgo
The required particulars relating to conservation of energy technologyabsorption foreign exchange earnings and outgo are attached as ANNEXURE-6 to the Board'sReport.
Extract of Annual Return
As per the requirements of Section 92(3) of the Act and rules framedthereunder the Extract of the Annual Return for financial year 2019-20 is given inANNEXURE-7 in the prescribed Form No. MGT-9 which is a part of this report. The completeAnnual Return is available on the Company's website at www.everestind.com/disclosures-under-statutory-enactments.
Particulars of Employees and Related Disclosures
In terms of the provisions of Section 197(12) of the Act read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended a statement showing the names and other particulars ofthe top ten employees in terms of remuneration drawn as set out in the said rules areprovided in ANNEXURE-8 to the Board's Report.
Disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in ANNEXURE-9 to theBoard's Report.
Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theYear under review:
1. Issue of equity shares with differential rights as to dividendvoting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of theCompany under any scheme.
3. Neither the Managing Director nor the Whole-time Directors of theCompany receive any remuneration or commission from any of its subsidiaries.
4. No significant or material orders were passed by the RegulatorsCourts or Tribunals which impact the going concern status of the Company and its futureoperations.
5. No material changes and commitments affecting the financial positionof the Company have occurred from the end of the last financial year till the date of thisreport.
6. No change in the nature of the business of the Company happenedduring the Year under review.
Your Directors further state that during the Year under review theCompany has complied with provisions relating to the constitution of Internal ComplaintsCommittee under the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and there were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
The Company has continuously adopted structures that help to attractbest external talent and promote internal talent to higher roles and responsibilities.Everest's people-centric focus providing an open work environment fostering continuousimprovement and development helped several employees realize their career aspirationduring the Year
During the Year the industrial relations at all the works of theCompany were cordial.
Your Directors wish to place on record their gratitude to the Company'sbusiness associates trade partners dealers customers shareholders vendors bankerstechnology providers and other stakeholders all over India and overseas for the continuedsupport and co-operation extended by them to the Company during the Year Your Board alsothanks the Government of India State Governments and other Government Authorities fortheir continued support and encouragement to the Company and look forward to their supportin future.
Your Directors especially wish to place on record their sincereappreciation of the efficient services rendered by the Company's motivated team membersfrom all Zones Works and Offices.
For and on behalf of the Board
|Manish Sanghi ||Y. Srinivasa Rao |
|Managing Director ||Executive Director |
Noida May 29 2020