The Members of
Everest Industries Limited
Your Directors are pleased to present the Eighty-Fifth Annual Report together with theAudited Financial Statements for the financial year ('year') ended 31st March 2018.
| || || || ||K In Lakhs) |
|Particulars || |
Financial Year ended
| || |
| ||31.03.2018 ||31.03.2017 ||31.03.2018 ||31.03.2017 |
|Net Revenue from operations & Other Income ||127859.88 ||123716.67 ||130694.43 ||124977.12 |
|Profit before Depreciation & Finance Costs ||9725.15 ||5160.48 ||9994.54 ||5074.49 |
|Less : Depreciation ||2354.61 ||2545.80 ||2354.61 ||2545.80 |
|: Finance Costs ||1259.18 ||2082.80 ||1259.18 ||2082.80 |
|Profit before Tax ||6111.36 ||531.88 ||6380.75 ||445.89 |
|Tax Expense ||1043.05 ||132.89 ||1074.67 ||144.00 |
|Profit for the year ||5068.31 ||398.99 ||5306.08 ||301.89 |
|Other comprehensive income for the year (net of tax) ||129.40 ||(17.75) ||129.4 ||(17.75) |
|Total comprehensive income for the year (net of tax) ||5197.71 ||381.24 ||5435.48 ||284.14 |
|Add: Balance in Profit & Loss Account ||21828.51 ||22373.35 ||21740.71 ||22311.46 |
|Add: Minority share || || ||20.86 ||71.19 |
|Profit Available for Appropriation Appropriations: ||27026.22 ||22754.59 ||27197.05 ||22666.79 |
|Dividend ||154.55 ||769.44 ||154.55 ||769.44 |
|Tax on Dividend ||31.46 ||156.64 ||31.46 ||156.64 |
|Closing Balance ||26840.21 ||21828.51 ||27011.04 ||21740.71 |
The Board of Directors have recommended a dividend of 65% i.e. Rs.6.50/- per equityshare of Rs.10/- each for the Financial Year ended 31st March 2018 subject to theapproval of the members. The total outgo on account of dividend including tax on dividendwill be Rs.1222.45 lakhs as against Rs.186.01 lakhs for the previous financial year.
The Company has achieved a turnover of Rs.1244 crores. The Highlights of the Company'sstandalone performance are as under:
1. Revenue from operations (net of excise duty) during the year at Rs.124485.16 Lakhswas higher by 8.49% as compared with Rs.114745.07 Lakhs in the previous year. Top linein building products segment recorded a increase of 10.71% whereas in the steel buildingsegment the same recorded a increase of 5.30%.
2. Production volume in the two business segments were as follows:
a. In building products segment the production at 756894 MT was higher by 14.27% over662463 MT in the previous year.
b. In steel buildings segment the production at 53032 MT was higher by 12.45% over47161 MT in the previous year.
3. Operating Profit (EBIDTA) at Rs.9153.99 Lakhs was higher by 115.41% overRs.4249.56 Lakhs in the previous year.
4. Profit before Tax at Rs.6111.36 Lakhs was higher by 1049% as against Rs.531.88 Lakhsin the previous year.
5. Cash profit was Rs.7087.99 Lakhs as compared to Rs.2976.74 Lakhs in the previousyear.
The consolidated revenue from operations (net of excise duty) of the Company for theyear ended 31st March 2018 was Rs.127051.66 Lakhs higher by 9.52% from Rs.116003.46Lakhs in the previous year. The consolidated operating profits before other income anddepreciation at Rs.7731.15 Lakhs as compared to Rs.2078.71 Lakhs in the previous year.Profit after tax was at Rs.5308.08 Lakhs as against Rs.301.89 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 March 2018 theapplicable accounting standards have been followed and there are no material departuresfrom 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 2018 and of the profitof 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 detecting fraud andother 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. Y. Srinivasa Rao Executive Directorretires by rotation at the forthcoming Annual General Meeting and being eligible offershimself for re-appointment. The Board of Directors recommends his re-appointment.
Mr. Y Srinivasa Rao has been re-appointed by the Members of the Company as Whole TimeDirector designated as Executive Director of the Company for a period of five (5) yearsw.e.f. April 23 2015 to April 22 2020 at the 82nd Annual General Meeting of the Companyheld on August 26 2015. Subsequently in order to comply with the conditions specified inthe amended schedule V of the Companies Act 2013 for availing the enhanced limits ofremuneration for managerial personnel as per the schedule V the Board in its meeting heldon January 25 2017 approved the change in the period of remuneration to be paid to Mr.Rao from five (5) years to three (3) years w.e.f. April 23 2015. Such change in period ofpayment of remuneration was also approved by the Members of the Company on March 8 2017by way of Special Resolution through Postal Ballot. Consequently it was also decided thatthe Company would seek fresh approval from the members of the Company for payment ofremuneration to Mr. Rao on the expiry of said 3 years for the remaining period of histenure as per the Special Resolution passed at 82nd Annual General Meeting. Mr. Rao'speriod of three (3) years for which remuneration was approved by the shareholders has beencompleted and the Board in its meeting held on May 1 2018 on the recommendation ofNomination & Remuneration Committee fixed the remuneration of Mr. Rao for theremaining period of his tenure as Whole Time Director designated as Executive Directorwhich is subject to approval of Members of the Company. The resolution pertaining tofixation of remuneration of Mr. Rao is set out in Item no. 5 of the Notice of theforthcoming Annual General Meeting.
A brief resume nature of expertise details of other directorships and otherinformation of Mr. Y. Srinivasa Rao Executive Director as stipulated in SecretarialStandard 2 issued by Institute of Company Secretaries of India and Regulation 36 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is appended as anannexure to the notice of the ensuing Annual General Meeting.
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)Regulation 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.
SUBSIDIARIES ASSOCIATE & JOINT VENTURE COMPANIES
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.2424 Lakhs and earned a profit of Rs.73lakhs during the financial year 2017-18.
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 had a net loss of Rs.999 lakhs mainly arising on account of certain writeoffs.
The Mauritius subsidiary had two subsidiaries viz. Everestind FZE and Everest BuildingProducts LLC both incorporated in UAE out of which Everest Building Products LLC ceasedto be subsidiary w.e.f 27th November 2017 as the same has been de-registered under thelaws of UAE in line with decision of the Company in this regard. Consequently EverestBuilding Products LLC ceased to be subsidiary of the Company from the date of itsde-registration. Everestind FZE is a legal entity involved in the trading of Company'sproducts in the middle east and foreign markets. This entity had a turnover of Rs.1688lakhs and a net loss of Rs.146 lakhs mainly on account of certain write offs.
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 year2017- 18 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 Certificate fromM/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/uploads/ Files/161 invuf_Related-Party.pdf
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 and recommended to theBoard a Corporate Social Responsibility Policy (CSR Policy) indicating the activities tobe undertaken by the Company which has been approved by the Board. The CSR Policy may beaccessed on the Company's website at the link: http://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 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.71.34 lakhs on CSRactivities. The financial data pertaining to the Company's CSR activities for theFinancial Year 2017-18 is attached in the prescribed format in ANNEXURE-2 to theBoard's Report. The Company is undertaking the CSR activities through its trust 'EverestFoundation'.
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 Company interalia 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 2018 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.
M/s S.R. Batliboi & Co. LLP Chartered Accountants has been appointed as StatutoryAuditors of the Company in the 83rd Annual General Meeting for a period of 5 years subjectto ratification by the Members at every 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 are requestedto ratify the appointment of M/s S.R. Batliboi & Co. LLP Chartered Accountants asStatutory Auditors of the Company as set out in the Notice convening the forthcomingAnnual 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 March 31 2018. The Statutory Auditors have notreported any incident of fraud to the Audit Committee or to the Board of Directors undersection 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/s.Chandra Wadhwa & Co. Cost Accountants as Cost Auditor to audit the cost records ofthe Company for the financial year 2018-19. 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 2017-18 as required under Section204 of the Act and Rules made thereunder. The Secretarial Audit Report for the financialyear 2017-18 is attached as ANNEXURE-4 to the Board's Report. The Secretarial AuditReport 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 detailsplease refer to Corporate Governance Report attached to this report.
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/uploads/Files/163invuf_
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 five times during the financial year 2017-18 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. 2.04 to the Standalone Financial Statement. TheCompany has neither given any loans nor provided any security or fresh guarantee underSection 186 of the Act during the Financial Year 2017-18.
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 to theBoard'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-8 tothe 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. Issue of equity shares with differential rights as to dividend voting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save and except ESOS referred to in this Report.
3. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.
4. 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.
5. 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.
6. 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.
COMPLIANCE WITH APPLICABLE SECRETARIAL STANDARDS
During the year under review the Company has complied with the provisions of the SS-1(Secretarial Standard on meeting of the Board
of Directors) & SS-2 (Secretarial Standard on General Meeting) issued by theInstitute of Company Secretaries of India and approved by the Central Government underSection 118 of the Act.
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 1st May 2018 || |