The Directors are pleased to present the 38th Annual Report and the Audited Accountsfor the financial year ended March 31 2017.
The financial performance of the Company for the year ended March 31 2017 issummarized below:
| || || |
(Rs. in Lakh)
|Particulars ||Standalone ||Consolidated |
| ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Sales ||26526.44 ||18713.98 ||58849.62 ||52180.10 |
|Less: Excise Duty ||2485.69 ||1795.41 ||2485.69 ||1795.41 |
|Total Sales ||24040.75 ||16918.57 ||56363.93 ||50384.69 |
|Profit/(Loss) before Finance Charges Depreciation Provision for Doubtful Debts Foreign Exchange Variation (net) Exceptional Items and Tax ||4369.14 ||(1311.51) ||7171.66 ||1436.77 |
|Less: || || || || |
|- Finance Charges ||3602.06 ||4716.44 ||4452.69 ||5351.40 |
|- Depreciation ||1475.08 ||1695.08 ||4335.81 ||7153.00 |
|Profit/(Loss) before Foreign Exchange Variation Exceptional Items & Taxation ||(708.00) ||(7723.03) ||(1616.84) ||(11067.63) |
|(Provision)/Recoveries for Doubtful Debts ||(24.55) ||(327.18) ||294.83 ||155.33 |
|Foreign Exchange Variation Gain/(Loss) ||385.65 ||(405.81) ||(364.55) ||(952.80) |
|Profit/(Loss) before Exceptional Items and Taxation ||(346.90) ||(8456.02) ||(1686.56) ||(11865.10) |
|Exceptional Items - Gain/(Loss) ||7527.19 ||(2934.42) ||9571.06 ||(408.39) |
|Profit/(Loss) before Tax ||7180.29 ||(11390.44) ||7884.50 ||(12273.49) |
|(Less)/Add: Provision for Taxation || || || || |
|- Current Tax ||- ||- ||15.30 ||15.94 |
|- Deferred Tax ||- ||- ||- ||13.75 |
|Profit/(Loss) for the year ||7180.29 ||(11390.44) ||7869.20 ||(12303.18) |
|Less: Prior period adjustments and Tax adjustments of earlier years (net) ||- ||105.68 ||- ||105.68 |
|Minority Interest ||- ||- ||- ||- |
|Net Profit/(Loss) ||7180.29 ||(11496.12) ||7869.20 ||(12408.86) |
|Transitional adjustment on account of Schedule II to Companies Act2013 ||- ||(4.55) ||- ||(4.55) |
|Balance Brought Forward from Previous Years ||(27880.71) ||(16380.04) ||(16300.87) ||(3887.46) |
|Balance Available for Appropriation ||(20700.42) ||(27880.71) ||(8431.67) ||(16300.87) |
|Appropriations: || || || || |
|Proposed Dividend ||- ||- ||- ||- |
|Provision for Dividend Tax ||- ||- ||- ||- |
|Transfer to Reserves ||- ||- ||- ||- |
|Balance Carried Forward ||(20700.42) ||(27880.71) ||(8431.67) ||(16300.87) |
|Basic and Diluted Earnings Per Share of Rs. 2 each ||6.40 ||(10.73) ||7.01 ||(11.58) |
During the financial year 2016-17 the Company saw the upward trend in the salescompared to sales in the previous year. The Company has encountered an increase in demandtowards end of the financial year due to CNG cylinders requirements in Northern India forcontrolling the pollution due to recent ruling by Supreme Court for not registering DieselVehicles. Further due to decrease in debt capital the Company was able to reduce theburden of financial cost which has which has resulted in improvement in profits During theyear Company has sold its land and building located in Gandhidham Gujarat and theproceedings received from the sale has been accounted in the financials for 2016-17.
On standalone basis for the financial year 2016-17 revenues at ` 26526.44 Lakhs werehigher by around 41% over the previous year's revenues of Rs. 18713.98 Lakhs and NetProfit at Rs. 7180.29 Lakhs against Net Loss of Rs. 11496.12 Lakhs in the previous year.The Net Profit for the financial year 2016-17 includes provision of ` 2826.47 Lakhs asagainst previous year's provision of Rs. 1980.00 made in respect of the value of theinvestments in two subsidiary companies.
On consolidated basis the Company manufactured 530048 units as compared to 473575units in the financial year 2015-16. During the said period the Company sold 493225 unitsas compared 445336 units in the previous financial year. Revenues for financial year2016-17 at Rs. 58849.62 Lakhs were higher by around 12.78% over the previous year'srevenues of Rs. 52180.10 Lakh and Net profit at Rs. 7863.20 Lakhs compared to Net Loss ofRs. 12408.86 Lakhs in the previous year.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with Section 129 of Companies Act 2013 and the Accounting Standard AS-21on Consolidated Financial Statements the Audited Consolidated Financial Statements areprovided in the Annual Report. As a significant part of the Company's business isconducted through its subsidiaries the Directors believe that the consolidated accountsprovide a more accurate representation of the performance of the Company.
SHARE CAPITAL STRUCTURE
The Paid Up Share Capital of the Company is ` 22.44 Crore divided into 112207682Equity Shares of ` 2/- each.
INTERNAL FINANCIAL CONTROL SYSTEM
The Company has adequate internal financial control system commensurate with the sizescale and complexity of its operations. The Company has in place a mechanism to identifyassess monitor and mitigate various risks to key business objectives. Major risksidentified by the business and functions are systematically addressed through mitigationaction on continuing basis. These are routinely tested and certified by Statutory as wellas Internal Auditors. The Audit observations on internal financial controls areperiodically reported to the Audit Committee.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the financial year 2016-17 as stipulatedunder Regulation 34(2)(e) of the SEBI(Listing obligations and Disclosure Requirements)Regulations 2015 is presented in a separate section forming part of the Annual Report.
DETAILS OF FRAUD REPORTED BY AUDITORS
There were no frauds reported by the Statutory Auditors under provisions of Section143(12) of the Companies Act 2013 and rules made thereunder.
SIGNIFICANT DEVELOPMENTS DURING THE YEAR
The Company during the year 2016-17 sold Companies Land and Building along withelectric installations attached to such land and building situated at Gandhidham Gujaratto SNF Flopam India Private Limited for the consideration of USD 29 Million (approx. Rs.194 crore). Company sought members approval via Postal Ballot by passing SpecialResolution on September 17 2016 for the sale of aforesaid land and building of theCompany.
The Directors have not proposed any dividend for the financial year 2016-17 in view ofthe absence of accumulated profits.
TRANSFER TO RESERVES
The Company does not propose to transfer any amount to reserves.
CREDIT RATING FROM CARE RATINGS
In respect of the borrowings of the Company CARE Ratings has during the yeardowngraded the Long Term and Short Term ratings as under:
|Sr. No. ||Facility ||Amount (` in Crore) ||Rating ||Remarks |
|1 ||Long Term Fund Bank Facilities- Yes Bank (Term Loan) ||206.96 ||CARE B [Single B] ||Revised from CARE D (Single D) |
|2 ||Long Term Bank Facilities-EXIM Bank Term Loan ||32.09 ||CARE B [Single B] ||Revised from CARE C (Single C) |
|3 ||Long Term Fund based Bank Facilities- Cash Credit ||81.00 ||CARE B [Single B] ||Revised from CARE C (Single C) |
|4 ||Short Term Bank Facilities (non fund based) ||44.92 ||CARE A4 [A Four] ||Reaffirmed |
| ||Total ||364.97 || || |
| || ||(ThreeHundred Sixty Four Crore & Ninety Seven Lakhs only ) || || |
DEPOSITS UNDER CHAPTER V OF COMPANIES ACT 2013
The Company has not accepted any Deposits from the public within the ambit of Section23 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The particulars of loans given guarantees provided and investments made have been dulydisclosed in the financial statement
MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year and the date of theReport.
As on 31st March 2017 the Company had (a) three wholly owned overseas subsidiarycompanies viz. EKC International FZE in Dubai UAE EKC Industries (Tianjin) Co. Ltd. inChina and EKC Industries (Thailand) Co. Ltd. in Thailand (b) three step down wholly ownedoverseas subsidiary companies viz. EKC Hungary Kft in Hungary CP Industries HoldingsInc. in USA EKC Europe GmbH in Germany and (c) One Joint Venture Company in Tanzaniaviz Kamal EKC industries Ltd (d) Two Indian subsidiary Companies viz. CalcuttaCompressions & Liquefaction Engineering Ltd. and EKC Positron Gas Ltd. and one whollyowned Indian subsidiary Company viz. Next gen Cylinder Private Limited.
During the year Company has formed new wholly owned subsidiary Company as Next genCylinder Private Limited. The Current Corporate Structure is as under:
As provided for in section 129(3) of Companies Act 2013 a statement containing thesalient features of the financial statements of the subsidiaries in the prescribed FormAOC-1 is attached to the financial statements of the Company. The financial statements andthe related information of the subsidiaries will be made available to any shareholder ofthe Company and of the subsidiaries who may be interested in obtaining the same at anypoint of time and are also available at the registered offices of the Company and thesubsidiary companies for inspection by any shareholder of the Company and of thesubsidiaries. The Consolidated Financial Statements presented by the Company include thefinancial results of the subsidiary companies. The financial results of the SubsidiaryCompanies are uploaded on the website of the Company and the weblink thereto is http://www.everestkanto.com/subsidiaries.aspx
DIRECTORS AND KEY MANAGERIAL PERSONNEL RETIREMENT BY ROTATION
In accordance with the provisions of Section 152(6) of the Companies Act 2013 Mr.Pushkar Khurana (DIN 00040489) will retire by rotation at the ensuing Annual GeneralMeeting of the Company and being eligible offers himself for re-appointment. The Boardrecommends his re-appointment.
CESSATION OF INDEPENDENT DIRECTOR
Mr. Naresh Oberoi has resigned as the Independent Director of the Company w.e.f. August20 2016 due to personal reasons.
APPOINTMENT OF KMP
Mr. Puneet Khurana has been appointed as the Chief Executive Officer of the Companyunder Section 203(2) of the Companies Act 2013 w.e.f. February 10 2017. Mr. PuneetKhurana is a Commerce graduate from Mumbai University and has done Masters in BusinessAdministration (International Business) from European University Montreux Switzerland.He has relevant experience in field of marketing and has significantly contributed inexploring international markets.
Mr. Alok Bodas has been appointed as the Company Secretary and Compliance Officer ofthe Company under Section 203(2) of the Companies Act 2013 w.e.f. February 09 2017. Mr.Alok Bodas is an Associate Member of the Institute of Company Secretaries of India andpossesses requisite qualification under Companies (Appointment and Qualification ofSecretary) Rules 1988.
CESSATION OF KMP
Ms. Bhagyashree Kanekar has resigned from the post of Company Secretary and ComplianceOfficer of the Company w.e.f. November 14 2016.
INDEPENDENT DIRECTOR DECLARATION
All the Independent Directors have submitted their declaration that each of them meetsthe criteria of independence as provided in Section 149(6) of the Act and Regulation 25 ofthe SEBI (Listing Obligation and Disclosures Requirements) Regulations 2015 and there hasbeen no change in the circumstances which may affect their status as an independentdirector during the year. During the year the non-executive directors of the Company hadno pecuniary relationship or transactions with the Company other than sitting feescommission and reimbursement of expenses incurred by them for the purpose of attendingmeetings of the Company.
NUMBER OF BOARD MEETINGS DURING THE YEAR
During the year five meetings of the Board of Directors were held on May 30 2016July 29 2016 August 11 2016 November 14 2016 and February 09 2017.
NOMINATION AND REMUNERATION POLICY
In accordance with the provisions of the Section 178 of the Companies Act 2013 readalong with the applicable Rules thereto and Regulation 19 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Company has formulated"Nomination and Remuneration Policy" containing criteria for determiningqualifications positive attributes independence of a director and other matters providedunder section 178(3) of Companies Act 2013 for selection of any Director Key ManagerialPersonnel and Senior Management Employees.
The said policy is attached as Annexure 5 to this report and is available on theCompany's website and the web link thereto is http://www.everestkanto.com/policies.html.
The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 (SEBIListing Regulations'). The Company evaluated performance of the Board on the basis ofcriteria(s) such as the board composition and structure effectiveness of board processesinformation and functioning etc. as mentioned in the Guidance Note on Board Evaluationissued by the Securities and Exchange Board of India on January 5 2017.
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of criteria such as the composition of committeeseffectiveness of committee meetings etc.
The Board and the Nomination and Remuneration Committee reviewed the performance ofindividual directors on the basis of criteria such as the contribution of the individualdirector to the board and committee meetings like preparedness on the issues to bediscussed meaningful and constructive contribution and inputs in meetings etc.
In a separate meeting of independent directors performance of non-independentdirectors and the board as a whole was evaluated taking into account the views ofexecutive directors and non-executive directors. The same was discussed in the boardmeeting that followed the meeting of the independent directors at which the performanceof the board its committees and individual directors was also discussed. Performanceevaluation of independent directors was done by the entire board excluding theindependent director being evaluated.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) of the Companies Act 2013 with respect to Directors'Responsibility Statement it is hereby confirmed that: i) in the preparation of the annualaccounts for the year ended March 31 2017 the applicable accounting standards have beenfollowed and there are no material departure; ii) The Directors have selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe company as on 31st March 2017 and of the profit and loss of the company for theperiod ended on that date; iii) The Directors have taken proper and sufficient care forthe maintenance of adequate accounting records in accordance with the provisions ofCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; iv) The Directors have prepared the annualaccounts on a going concern basis; v) The Directors have laid down internal financialcontrols to be followed by the Company and that such internal financial controls areadequate and are operating effectively; and vi) The Directors have devised proper systemto ensure compliance with the provisions of all applicable laws and that such systems areadequate and operating effectively.
The details pertaining to composition of the Audit Committee are included in theCorporate Governance Report which forms part of this Report.
a) Statutory Auditors
In accordance with the provisions of Section 139(2) of the Companies Act 2013 and theCompanies (Audit and Auditors) Rules 2014 the members of the Company at their 35thAnnual General Meeting held on August 02 2014 had appointed M/s. Walker Chandiok & CoLLP Chartered Accountants as the Statutory Auditors of the Company for one term of fiveyears to hold office from the conclusion of aforesaid Annual General Meeting till theconclusion of the Annual General Meeting to be held in the year 2018 subject toratification by the shareholders at every Annual General Meeting. Accordingly theirappointment will be put up for ratification by the shareholders at the ensuing AnnualGeneral Meeting.
b) Branch Auditors
The Board of Directors of the Company at their Meeting held on May 30 2017re-appointed M/s. Arun Arora & Co. Chartered Accountants Branch Auditors of theCompany for financial year 2017-18. The Company has received a letter from M/s. Arun Arora& Co. to the effect that their reappointment if made for the financial year 2017-18would be within the limits prescribed under Section 141(3)(g) of the Companies Act 2013and that they are not disqualified for re-appointment within the meaning of Section 141 ofthe said Act.
c) Cost Auditors
The Board of Directors has appointed Mr. Vinayak B. Kulkarni Cost Accountant(Membership No. 28559) as the Cost Auditor under section 148 of the Companies Act 2013for conducting audit of cost records for the financial year 2016-17. The Cost Auditor willsubmit his Report to the Board for its review and examination which will then be filedwith the Central Government within the prescribed time. On the recommendation of the AuditCommittee the Board of Directors has appointed M/s. V R & Associates CostAccountant (Firm Registration No. 000516) as the Cost Auditor of the Company for thefinancial year 2016-17 on a remuneration of Rs. 150000/- recommended by the AuditCommittee and as required under the Act the remuneration was ratified by the members atthe Annual General Meeting held on September 26 2016.
d) Secretarial Auditor
The Board of Directors has appointed Aashish K. Bhatt & Associates PracticingCompany Secretaries as the Secretarial Auditor under section 204 of the Companies Act2013 for conducting Secretarial Audit for the financial year 2016-17. The Report of theSecretarial Auditor forms part of this Report as Annexure 1. There is one adverse remarksin the Secretarial Audit Report.
STATUTORY AUDITOR'S QUALIFICATIONS' EXPLANATION
As regards to the qualification by the Auditors in their Report on the StandaloneAccounts with respect to the Investment by way of share capital of Rs. 6925.07 Lakhs inEKC Industries (Tianjin) Company Limited a wholly owned subsidiary based in China theCompany is of the considered view based on the assessment of the relevant factors suchas the long term nature of the investment future business prospects in the markets inwhich EKC Industries (Tianjin) Company Limited operates expected appreciation in the fairvalue of the assets of EKC Industries (Tianjin) Company Limited etc. that no provisionfor the diminution in the value of the Investment is required. However on a conservativebasis an aggregate amount of Rs. 5500 Lakhs (including Rs. 3500 Lakhs upto 31 March2016) has been provided towards such diminution and has been disclosed as an 'ExceptionalItem' in the financial results.
As regards to the qualification by the Auditors in their Report on the ConsolidatedAccounts in respect to Short term loans and advances and other current assets include anamount of Rs. 1724 Lakhs (Rs. 1724 Lakhs as at 31 March 2016) towards securedinter-corporate deposit advanced to Hubtown Limited (formerly Akruti City Limited) andaccrued interest thereon. The deposit and accrued interest are outstanding for aconsiderable period. These deposits are secured against mortgage rights of anunder-construction commercial property in favour of the Company. Based on its on-goingdiscussion with Hubtown Limited (formerly Akruti City Limited) the Company is confidentof recovering the inter-corporate deposit with accrued interest thereon and thereforebelieves that no provision for potential losses if any on account of non-recoverabilityof outstanding amounts is necessary at present. The Management does not expect any losssince the outstanding amount is sufficiently secured by way of mortgage of property.
SECRETARIAL AUDITOR'S QUALIFICATION'S EXPLANATION
The Company has executed Shareholders' Agreement with Brightwill Limited and TVG IndiaInvestment Holdings Limited (hereinafter referred to as "the erstwhileshareholders") on November 02 2006 and November 19 2007 respectively. The clausesof the aforesaid agreement have been incorporated in the Articles of Association of theCompany as per the requirement of the said agreements.
The erstwhile shareholders have gradually sold their entire holdings and hence theaforesaid Shareholders' Agreement stands redundant. Further on the redundancy of suchagreement one of the Promoters of the Company has entered into the business of FireFighting Equipments.
However the Company is yet to alter the Articles of Association for removal of theclauses pertaining to the erstwhile shareholders and hence the Secretarial Auditor hasmentioned the same in his report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under section 134(3)(m) of theCompanies Act 2013 are provided in Annexure 2 to this Report.
TRANSACTIONS WITH RELATED PARTIES
None of the transactions with the related parties falls under the scope of Section188(1) of the Companies Act 2013. Information on the transactions with the relatedparties under Section 134(3)(h) of the Companies Act 2013 read with Rule 8(2) of theCompanies (Accounts) Rules 2014 are given in Annexure 3 in Form AOC-2 and forms the partof this Report.
All compliances with Related Party Transactions as provided in the Companies Act 2013and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 have beencomplied with.
The Policy on Related Party Transactions framed under the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is available on Company's website and web linkthereto is http://www.everestkanto.com/policies.html.
The Company is committed to achieving and maintaining the highest standards ofCorporate Governance and places high emphasis on business ethics. Pursuant to SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Report onCorporate Governance and the Certificate from a practicing Company Secretary on the Reportas stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 form part of the Annual Report.
The Company has adopted a Risk Management Policy which lays down the framework todefine assess monitor and mitigate the business operational financial and other risksassociated with the business of the Company.
CORPORATE SOCIAL RESPONSIBILITY
As the provisions of section 135 of Companies Act 2013 dealing with Corporate SocialResponsibility are not applicable to the Company during the financial year the Companyhas not laid down any policy on Corporate Social Responsibility.
EXTRACT OF ANNUAL RETURN
Pursuant to section 92(3) of the Companies Act 2013 read with Rule 12(1) of theCompanies (Management and Administration) Rules 2014 extract of the Annual Return of theCompany in the prescribed Form MGT-9 is attached to the Report as Annexure 4.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Rule 5 of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 the details are as under:
(a) Ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2016-17:
|Name of Directors ||Designation ||Remuneration of Directors* ||Median remuneration of Employees ||Ratio to median remuneration |
|Mr. P.K. Khurana ||Chairman & Managing Director ||Nil ||213395 ||- |
|Mr. Pushkar Khurana ||Non-Executive Director ||Nil ||213395 ||- |
|Mr. Puneet Khurana (Till February 09 2017)** ||Executive Director ||Nil ||213395 ||- |
|Mr. Mohan Jayakar ||Independent Director ||140000 ||213395 ||0.65 |
|Mr. Naresh Oberoi (Till August 20. 2016)*** ||Independent Director ||70000 ||213395 ||0.33 |
|Mr.Sudhindra Rao ||Independent Director ||180000 ||213395 ||0.84 |
|Ms. Uma Acharya ||Independent Director ||140000 ||213395 ||0.65 |
* Remuneration to directors during the financial year (and also in the previousfinancial year) comprises solely of sitting fees for attending the meetings of Board ofDirectors and of the Committees thereof
** Mr. Puneet Khurana has resigned as Executive Director of the Company w.e.f February10 2017
*** Mr. Naresh Oberoi has resigned as Director of the Company on August 20 2016.
(b) Percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the Financial Year2016-17:
|Director Chief Financial Officer Chief Executive Officer and Company Secretary ||Designation ||% increase in remuneration in financial year |
|Mr. P.K. Khurana ||Chairman & Managing Director ||0.00 |
|Mr. Pushkar Khurana ||Non-Executive Director ||0.00 |
|Mr. Puneet Khurana (Till February 092016) ||Executive Director ||0.00 |
|Mr. Mohan Jayakar ||Independent Director ||0.00 |
|Mr. Naresh Oberoi (Till August 202016) ||Independent Director ||(46.15) |
|Mr. Sudhindra Rao ||Independent Director ||63.63 |
|Ms. Uma Acharya ||Independent Director ||40.00 |
|Mr. Kishore Thakkar ||Chief Financial Officer ||0.00 |
|Ms. Bhagyashree Kanekar (Till November 142016) ||Company Secretary ||0.00 |
|Mr. Puneet Khurana (w.e.f. February 102017) ||Chief Executive Officer ||0.00 |
|Mr. Alok Bodas (w.e.f. February 092017) ||Company Secretary ||0.00 |
(c) Percentage increase in the median remuneration of employees in the financial year2016-17: 6.09%
(d) Number of permanent employees on the rolls of Company: 595
(e) Explanation on the relationship between average increase in remuneration andCompany performance:
|Particulars ||Amount |
|Increase in Remuneration in Financial Year 2016-17 (` in Lakhs) ||109.13 |
|Increase / (Decrease) in Revenue (` in Lakhs) ||7598.4 |
|Increase in Remuneration as % of Increase / (Decrease) in Revenue ||1.44% |
|Increase / (Decrease) in Profit before tax (PBT) (in `) ||4210.15 |
|Increase in Remuneration as % of Increase / (Decrease) in PBT ||2.59 |
(f) Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company:
|Particulars ||Amount |
|Aggregate remuneration of Key Managerial Personnel (KMP) in financial year 2016-17 ||41.38 |
|Revenue ||25100.35 |
|Remuneration of KMP (as % of revenue) ||0.16 |
|Profit before tax (PBT) ||7180.29 |
|Remuneration of KMP (as % of PBT) ||0.58 |
* In the view of negative profit before tax (PBT)
(g) Variation in the Market Capitalization of the Company and Price Earning Ratio
|Particulars ||At the beginning of the year April 1 2016 ||At the end of the year March 31 2017 |
|Market Capitalization || || |
|NSE(` in Lakhs) ||18794.79 ||41292.43 |
|BSE (` in Lakhs) ||18817.23 ||41180.22 |
|Price Earning Ratio ||*Not Meaningful ||5.74 |
* As the EPS of the Company is negative at the beginning the financial year ended March31 2017 the Price Earning Ratio of the Company at the beginning can not be ascertained.
(h) Percentage increase over decrease in the market quotations of the shares of thecompany in comparison to the rate at which the company came out with the last publicoffer:
|Particulars ||March 31 2017 ||IPO* ||Adjusted IPO** ||% Change |
|Market Price (NSE) ||Rs. 36.70 ||Rs. 160 ||Rs. 32 ||14.68 |
|Market Price (BSE) ||Rs. 36.80 ||Rs. 160 ||Rs. 32 ||15.00 |
* Face value of Rs. 10/- per share.
** Face value of ` 2/- per share after share split.
(i) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration
The average percentile increase in the salaries of employees other than the managerialpersonnel in the financial year 2016-17 is 13.88% whereas there is percentile decrease inthe managerial remuneration during the year by 18.47%.
* The managerial remuneration comprises solely of the sitting fees paid to theDirectors for attending the meeting of the Board of Directors and of the Committeesthereof.
(j) Comparison of the each remuneration of the Key Managerial Personnel against theperformance of the Company
| ||Mr. P.K. Khurana Managing Director ||Mr. Puneet Khurana Chief Executive Officer ||Mr. Kishore Thakkar Chief Financial Officer ||Ms. Bhagyashree Kanekar Company Secretary ||Mr. Alok Bodas Company Secretary |
|Remuneration in FY 2016-17 (` in Lakhs) ||Nil ||12.00 ||27.00 ||04.04 ||0.87 |
| || ||(Appointed W.e.f February 10 2017) || ||(Till November 14 2016) ||(Appointed w.e.f February 09 2017) |
|Revenue (in ` in Lakhs) ||25100.35 ||25100.35 ||25100.35 ||25100.35 ||25100.35 |
|Remuneration as % of revenue ||- ||0.05 ||0.11 ||0.02 ||0.003 |
|Profit before tax (PBT) (in ` in Lakhs) ||7180.29 ||7180.29 ||7180.29 ||7180.29 ||7180.29 |
|Remuneration as % of PBT ||- ||0.17 ||0.38 ||0.06 ||0.01 |
(k) Ratio of the remuneration of the highest paid director to that of the employees whoare not directors but receive remuneration in excess of the highest paid director duringthe year.
The remuneration of the two highest paid directors during the financial year 2016-17 isRs. 180000 and 140000 respectively (being sitting fees only)As there are 310 employeeswho are not directors but received remuneration during financial year 2016-17 in excess ofRs. 160000 the individual ratio in respect of each such employee is not provided herein.However the ratio of the remuneration of the two highest paid directors to the averageremuneration of these 310 employees is 0.56.
(l) Affirmation that the remuneration is as per the remuneration policy of the Company.
The Company affirms remuneration is as per the remuneration policy of the Company.
(m) Name of employee of Company who were employed throughout the financial year or forpart of year was in receipt of remuneration for that year which in the aggregate wasnot less than Sixty Lakh Rupees per financial year or Five Lakh Rupees per month.
Mr. Puneet Khurana Chief Executive Officer
(n) Name of employee of Company who employed throughout the financial year or partthereof was in receipt of remuneration in that year which in the aggregate or as thecase may be at a rate which in the aggregate is in excess of that drawn by the managingdirector or whole-time director or manager and holds by himself or along with his spouseand dependent children not less than two percent of the equity shares of the Company:None
Following policies are posted on the website of the Company and weblink thereto ishttp://www.everestkanto.com/policies.html.
i. Policy on Related Party Transactions
ii. Policy on Material Subsidiaries
iii. Policy on Board Diversity
iv. Policy on Nomination Remuneration & Evaluation
v. Code of Conduct for Directors & Senior Management
vi. Vigil Mechanism
vii. Policy on Sexual Harassment of Women at Workplace
viii. Policy on Preservation and Archival of documents
ix. Policy on Determination of Materiality of Events.
On the SEBI (Prohibition of Insider Trading) Regulations 2015 coming into effect onMay 15 2015 the Company has adopted the Policies on Code of Practices and Procedures forFair Disclosure of Unpublished Price Sensitive Information and Code of Conduct forPrevention of Insider Trading and Code of Corporate Disclosure Practices and Policieswhich have been posted on the website of the Company and the weblink thereto ishttp://www.everestkanto.com/policies.html.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION ANDREDRESSAL)
Everest Kanto Cylinder Limited is committed and dedicated in providing a healthy andharassment free work environment to every individual of the Company a work environmentthat does not tolerate sexual harassment. We highly respect dignity of everyone involvedat our work place whether they are employees suppliers or our customers. We require allemployees to strictly maintain mutual respect and positive attitude towards each other.
Number of complaints pending as on the beginning of the financial year Nil
Number of complaints filed during the financial year- Nil
Number of complaints pending at the end of the financial year-Nil
LISTING OF SECURITIES
The Equity shares of the Company are listed on the Stock Exchanges viz. BSE Limited andNational Stock Exchange of India Limited.
ACKNOWLEDGEMENT AND APPRECIATION
The Board of Directors would like to express it's deepest admiration and sinceregratitude for professional guidance rendered to the Company by Mr. Naresh Oberoi who hasserved as the Distinguished Member of the Board of the Company for more than a decade.
The Directors further would like to express their appreciation for the assistancesupport and co-operation received from the banks Government authorities customersvendors and members during the year under review. The Directors also wish to place onrecord their deep sense of appreciation for the committed services by the executivesstaff and workers of the Company globally.
| ||For and on behalf of the Board |
| ||P. K. Khurana |
| ||Chairman & Managing Director |
|Place: Mumbai || |
|Date: May 30 2017 || |
Annexure 2: Conservation of Energy Technology Absorption and Foreign Exchange andoutgo
Information pursuant to section 134 of the Companies Act 2013 read with the Companies(Accounts) Rules 2014 in respect of conservation of energy and technology absorption:
A. Conservation Of Energy:
I. Efficient use of Energy:
The company has taken various actions to achieve efficiency in energy utilization andusing cleaner fuels for reduction of pollution such as:
a. Efficiency in the use of Thermal energy by switching over from liquid fuels like LDOto LPG / Natural Gas. a. Discontinue use of less efficient furnaces operated on LDO asfuel.
b. Convert all boilers from LDO to Natural Gas by using services of Original EquipmentManufactuer Thermax.
c. Minimizing heat losses by improved insulation etc.
b. Efficiency in the use of electrical energy by installing power efficient equipmentat all the plants/offices
c. We have added a small furnace for heat treatment of small cylinders only. These werehitherto being heat treated in large furnace resulting in loss of energy.
d. Furnaces consume large amounts of fuel so it is preferred to ensure they run withhigh load factor with least number of starts and stops. This is achieved now by sharingthe furnace capacity with output of additional hot spinning machine.
e. To improve load factor of the plant and to achieve higher energy efficiency themanufacturing loads are rescheduled for larger batch sizes. For this the some productionloads from one plant are shifted to other plant.
f. Efforts are made to streamline processes to reduce down times. This ensuresuninterrupted production with least idling thereby reducing energy requirements percylinder.
g. Large power consuming equipment are run in staggered manner so that peak load onsystem is reduced resulting in reduced transmission losses.
h. Heavy electrical loads are scheduled equally in all shifts to take advantage of timeslab concessions.
i. Successfully developed cascades for use with BIO METHANE for storage and conveying.The Bio-methane is produced by conversion of bio waste in digesters to produce the gas andorganic fertilizers which are very rich.
j. Developed industrial cylinders for Hydrogen to be used for Fuel Cell applications.Hydrogen is considered as fuel of the future due to zero pollution it would generate.
k. Due to industrial turndown we have cut down on the entire shifts instead of runningthe plants partially for all the shifts. This has resulted in power savings.
II. Energy Conservation measures undertaken at the Plants:
Following measures are continuously undertaken to conserve energy at the Plants:
1. Installation of larger heat exchangers and making use of cooling tower water inplace of cold water from refrigerated chillers.
2. Installation of VF drive and programmable logic controls for paint booth suctionblower for cyclic speed swings thereby reducing power consumption per cylinder.
3. Installation of automatic power factor control panels with capacitors at variousload centres for keeping the currents at lower level and also for keeping the power factorunder control. Savings will also be made due to the incentive offered for better powerfactor by the electricity companies.
4. Use of High Density Poly Ethylene and FRP (Fibre Glass Reinforced Plastic) pipelines to reduce the pressure losses consequently leading to lower energy requirement.
5. Deployment of distributed pumping stations and cooling towers to save energy.
6. Installation of automatic shut-off devices on air compressors to ensure they shutdown when compressed air demand is low.
7. Installation of energy saving transformer for lighting.
8. Medium bay light fittings in factory sheds at optimum locations in place of high bayfittings which consume more power and give uneven light. Help of special lighting softwarefrom light fittings suppliers was taken for this purpose.
9. Installation of wind driven roof ventilators for ventilation to save electricalenergy.
10. Installation of transparent windows in addition to the transparent roofing sheetsin the side walls of the taller sheds for better ventilation and lighting.
11. Use of boiler in place of usual method of thermic fluid heating for heatingrequirement in surface treatment plant. With steam it is possible to transmit much higherheat per kg of water pumped which leads to major energy saving.
12. Installation of camel back style oven for the painting system to avoid funneling ofair and resultant heat losses.
13. Installation of zero discharge Effluent Treatment Plant with multiple effectevaporators. This reuses steam and reduces energy consumption. Additionally the recoveredwater is reused in the process.
14. Installation of more wind driven roof ventilators as energy saving devices.
15. Installation of more power saving transformers for the lighting load.
III. Impact of measures on reduction of energy consumption and consequent impact on thecost of production of goods:
The Company continues to draw to benefits in the area of energy conservation throughits wind power projects. The Company had undertaken Wind farm projects at Kandla in thestate of Gujarat and Satara in the state of Maharashtra the brief details of which aregiven in the following table:
|Place of Installation ||No. of Wind- mills installed ||Energy Generation Capacity ||Investment (` in Lakh) ||Energy Generated during the year ||Energy Generated during previous year |
|Kandla Gujarat ||1 ||1.650 MW ||1125.00 ||223865 units ||2212714 units |
|Satara Maharashtra ||3 ||3 x 0.225 MW = 0.675 MW ||349.14 ||589924 units ||667118 units |
a. The wind farm projects as mentioned in the preceding parts have been undertaken inthe states of Gujarat and Maharashtra where the Company is having its own manufacturingfacilities. Considering the present power policy of Governments the Company has directlybenefited in terms of captive consumption of energy generated by aforesaid wind farm andalso from the sale of power generated from these wind mills.
b. At Satara the energy generated is sold to Maharashtra State Electricity Board asper the Government's policy.
IV. The details of energy consumption are given below.These details cover theoperations of the Company's factories at Tarapur Gandhidham and KASEZ
|Particulars ||Current Year ||Previous Year |
|A) Power and Fuel consumption: || || |
|a) Electricity purchased || || |
|Units (kwh in Lakhs) ||148.08 ||96.61 |
|Total Amount (` in Lakhs) ||1282.56 ||924.17 |
|Rate per Unit (`) ||8.66 ||9.57 |
|b) Oxygen purchased || || |
|Units (Cu.M. in Lakhs) ||4.36 ||3.88 |
|Total Amount (` in Lakhs) ||60.03 ||42.78 |
|Rate per Cu.M. (`) ||13.77 ||11.03 |
|c) LDO purchased || || |
|Units (Ltrs. in Lakhs) ||8.44 ||5.37 |
|Total Amount (` in Lakhs) ||289.8 ||201.38 |
|Rate per Ltr. (`) ||34.35 ||37.48 |
|d) LPG purchased || || |
|Units (Kg. in Lakhs) ||7.72 ||7.13 |
|Total Amount (` in Lakhs) ||333.17 ||255.66 |
|Rate per Kg. (`) ||43.18 ||35.84 |
|B) Consumption per unit of production: || || |
|i. Electricity (kwh / MT) ||776.81 ||827.44 |
|ii. Oxygen (Cu.M / MT) ||22.88 ||33.21 |
|iii. LDO (Ltr. / MT) ||44.26 ||46.02 |
|iv. LPG (Kg. / MT) ||40.48 ||61.10 |
TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION:
The Management understands the importance of technology in the business segments itoperates in and lays utmost emphasis on the systems development and the use ofcutting-edge technology available in the industry. The management keeps itself abreastwith technological advancements in the industry and ensures continued and sustainedefforts towards absorption of technology adaptation as well as development of the same tomeet business needs and objectives. The Company has procured the latest equipment and itspersonnel are trained from time to time on the use operation and maintenance of suchhighly sophisticated equipment.
1. Technology Absorption
i. Complete process was developed to manufacture Jumbo cylinders from High Alloy HighStrength Steel pipes without any technical collaboration or help from other company. Thismajor step has made EKC the only manufacturer in India to make these High Alloy HighStrength Jumbo Cylinders from tubes. It has opened up new markets which were hithertoinaccessible.
ii. One major landmark achievement is the qualification received to manufacturecylinders to the US
Department of Transportation (US DOT). This was achieved under very strict controlsform the officers of the USA federal government department of transportation DOT. Thisqualification would open the USA market which was hitherto most difficult to enter.
2. Technology Adaptation:
We are participating wholeheartedly in the Government's initiative of Make In India.Hitherto we have been importing certain raw materials as they were not manufactured inIndia. Now one PSU has come forward to manufacture it in India and we shall be theapplication testing partners in that program for defence.
EKC also started the initiative to support Indian tube manufacturers in their effort toproduce tubes for high pressure gas cylinders. This project is on way.
a. New cylinder models are developed to meet varying needs of different overseasstandards which are much stringent than the standards which we operated till now.
b. Developed Tube Trailers for storage and transportation of Bio-Methane.
c. For the first time in India developed Ultra Large Cylinder for Hydrogen working at300 bar. This is for a prestigious project of Indian Space Research Organization (ISRO).
d. Designed Very large capacity storage complex for gases to be stored at very highpressures which was not done in the country so far. This project is under implementation.
4. Foreign Exchange earning and outgo:
Total Foreign Exchange used and earned:
|Particulars ||Current Year ||Previous Year |
|I. Foreign Exchange used ||11660.01 ||8964.82 |
|II. Foreign Exchange earned ||13891.38 ||778.96 |
Annexure 3: Particulars of Contracts or Arrangement with Related Parties Form No. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)
Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arms length transactions under third proviso thereto
1. Details of contracts or arrangements or transactions not at arm's length basis: Nil
2. Details of material contracts or arrangement or transactions* at arm's length basis:Nil
* Material Related Party Transaction means a transaction with a Related Party enteredinto individually or with previous transactions during a financial year which exceeds tenpercent of the annual consolidated turnover of the Company as per last audited financialstatements of the Company.
For and on behalf of the Board of Directors of Everest Kanto Cylinder Limited
P. K. Khurana
Chairman & Managing Director
Annexure 5: Nomination Remuneration and Evaluation Policy
This Nomination Remuneration and Evaluation Policy (the "Policy") applies tothe Board of Directors (the "Board") Key Managerial Personnel (the"KMP") and the Senior Management Personnel of Everest Kanto Cylinder Limited(the "Company"). This Policy is in compliance with Section 178 of the CompaniesAct 2013 read along with the applicable Rules thereto and Clause 49 under the ListingAgreement.
"Employees' Stock Option" means the option given to the directors officersor employees of a company or of its holding company or subsidiary company or companies ifany which gives such directors officers or employees the benefit or right to purchaseor to subscribe for the shares of the company at a future date at a pre- determinedprice.
"Independent Director" means a director referred to in Section 149(6) of theCompanies Act 2013.
"Key Managerial Personnel" " (KMP) means -(i) Chairman & ManagingDirector; (ii) Company Secretary; (iii) Whole-time Director; (iv) Chief Financial Officer;and (v) Such other Officer as may be prescribed.
"Nomination and Remuneration Committee" " shall mean a Committee ofBoard of Directors of the Company constituted in accordance with the provisions ofSection 178 of the Companies Act 2013 and the Listing Agreement. "Remuneration"means any money or its equivalent given or passed to any person for services rendered byhim and includes perquisites as defined under the Income-tax Act1961.
"Senior Management Personnel" (SMP) means to include all members other thanthe Directors and KMPs of the Company who are the functional heads of the departments/divisions/branches of the Company.
The terms used in this Policy but not defined in this Policy shall have the samemeaning as defined under the Companies Act 2013.
The primary objective of the Policy is to provide a framework and set standards for thenomination remuneration and evaluation of the Directors Key Managerial Personnel andofficials comprising the senior management. The Company aims to achieve a balance ofmerit experience and skills amongst its Directors Key Managerial Personnel and SeniorManagement.
(i) The Board is ultimately responsible for the appointment of Directors and KeyManagerial Personnel.
(ii) The Board has delegated responsibility for assessing and selecting the candidatesfor the role of Directors Key Managerial Personnel and the Senior Management of theCompany to the Nomination and Remuneration Committee which makes recommendations &nominations to the Board.
4. NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee is responsible for: (i) reviewing thestructure size and composition (including the skills knowledge and experience) of theBoard at least annually and making recommendations on any proposed changes to the Board tocomplement the Company's corporate strategy with the objective to diversify the Board;(ii) identifying individuals suitably qualified to be appointed as the KMPs or in thesenior management of the Company; (iii) recommending to the Board on the selection ofindividuals nominated for directorship; (iv) making recommendations to the board on theremuneration payable to the Director/ KMPs / SMPs so appointed / reappointed; (v)assessing the independence of independent directors; (vi) such other key issues/matters asmay be referred by the Board or as may be necessary in view of the Listing Agreement andprovision of the Companies Act 2013 and Rules thereunder; (vii) making recommendations tothe Board concerning any matters relating to the continuation in office of any Director atany time including the suspension or termination of service of an Executive Director as anemployee of the Company subject to the provision of the law and their service contract;(viii) ensuring that level and composition of remuneration is reasonable and sufficientrelationship of remuneration to performance is clear and meets appropriate performancebenchmarks; (ix) devising a policy on Board diversity; (x) developing a succession planfor the Board and to regularly review the plan.
5. COMPOSITION OF THE NOMINATION AND REMUNERATION COMMITTEE
(i) The Committee shall consist of a minimum three (3) non-executive directorsmajority of them being independent.
(ii) Minimum two (2) members shall constitute a quorum for the Committee meeting. (iii)Membership of the Committee shall be disclosed in the Annual Report. (iv) The CompanySecretary of the Company shall act as Secretary of the Committee.
(i) The Chairman of the Committee shall be an Independent Director.
(ii) The Chairman of the Company may be appointed as a member of the Committee butshall not be a Chairman of the Committee.
(iii) In the absence of the Chairman the members of the Committee present at themeeting shall choose one amongst them to act as Chairman.
(iv) The Chairman of the Nomination and Remuneration Committee meeting could be presentat the Annual General Meeting or may nominate some other member to answer theshareholders' queries.
7. FREQUENCY OF THE MEETINGS OF THE COMMITTEE
The meeting of the Committee shall be held at such regular intervals as may berequired.
8. COMMITTEE MEMBERS' INTERESTS
(i) A member of the Committee is not entitled to be present when his or her ownremuneration is discussed at a meeting or when his or her performance is being evaluated.
(ii) The Committee may invite such executives as it considers appropriate to bepresent at the meetings of the Committee.
(i) Matters arising for determination at Committee meetings shall be decided by amajority of votes of Members present and voting and any such decision shall for allpurposes be deemed to be a decision of the Committee.
(ii) In the case of equality of votes the Chairman of the meeting will have a castingvote.
10. MINUTES OF THE MEETING
Proceedings of all meetings must be minuted and signed by the Chairman of the saidmeeting or the Chairman of the next succeeding meeting. Minutes of the Committee meetingwill be tabled at the subsequent Board and Committee meeting.
This Policy is applicable to:
(i) Directors (Executive Non-Executive and Independent) (ii) Key Managerial Personnel(iii) Senior Management Personnel (iv) Other employees as may be decided by the Nominationand Remuneration Committee
12. CRITERIA FOR APPOINTMENT OF DIRECTORS/KMPs/ SENIOR MANAGEMENT PERSONNEL
(i) Enhancing the competencies of the Board and attracting as well as retainingtalented employees for role of KMPs are the basis for the Nomination and RemunerationCommittee to nominate a candidate for appointment by the Board. When recommending acandidate for appointment the Nomination and Remuneration Committee shall have regard to:(a) assessing the appointee against a range of criteria which includes but not be limitedto qualifications skills regional and industry experience background and otherqualities required to operate successfully in the position with due regard for thebenefits from diversifying the Board; (b) the extent to which the appointee is likely tocontribute to the overall effectiveness of the Board work constructively with theexisting directors and enhance the efficiencies of the Company; (c) the skills andexperience that the appointee brings to the role of KMP/SMP and how an appointee willenhance the skill sets and experience of the Board as a whole; (d) the nature of existingpositions held by the appointee including directorships or other relationships and (e) theimpact they may have on the appointee's ability to exercise independent judgment.
(ii) Personal Specifications:
(a) Degree holder in relevant disciplines;
(b) Experience of management in a diverse organization; (c) Excellent interpersonalcommunication and representational skills; (d) Demonstrable leadership skills; (e)Commitment to high standards of ethics personal integrity and probity; (f) Commitment tothe promotion of equal opportunities community cohesion and health and safety in theworkplace; (g) Having continuous professional development to refresh knowledge and skills.
Details of the personal specifications are provided in the Annexure hereto.
13. LETTERS OF APPOINTMENT
Each Director/KMP/SMP is required to sign the letter of appointment with the Companycontaining the terms of appointment and the role assigned to him in the Company.
14. REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT PERSONNEL
The guiding principle is that the level and composition of remuneration shall bereasonable and sufficient to attract retain and motivate Directors KMPs and other SMPs.The salary of Directors Key Management Personnel and other Senior Management Personnelshall be based & determined on the individual person's responsibilities andperformance and in accordance with the limits as prescribed statutorily if any.
The Nomination & Remuneration Committee shall determine individual remunerationpackages for Directors KMPs and SMPs of the Company taking into account factors it deemsrelevant including but not limited to market business performance and practices incomparable companies having due regard to financial and commercial health of the Companyas well as prevailing laws and government/other guidelines. The Committee shall consultwith the Chairman of the Board as it deems appropriate. The remuneration/ compensation/commission etc. to Directors and KMPs determined by the Committee will be recommended tothe Board for its approval. The remuneration/ compensation/ commission etc. shall besubject to the prior/post approval of the shareholders of the Company and CentralGovernment wherever required. Increments to the existing remuneration/ compensationstructure of Directors and KMPs shall be recommended by the Committee to the Board whichshould be within the slabs approved by the Shareholders in the case of Directors. Whereany insurance is taken by the Company on behalf of its Directors KMPs and SMPs forindemnifying them against any liability the premium paid on such insurance shall not betreated as part of the remuneration payable to any such personnel. Provided that if suchperson is proved to be guilty the premium paid on such insurance shall be treated as partof the remuneration.
(B) Provisions Under Companies Act 2013
In Respect Of Directors
(i) The remuneration and commission to be paid to Directors shall be as per thestatutory provisions of the Companies Act 2013 and the rules made there under for thetime being in force.
(ii) The total managerial remuneration payable by the Company to its Directorsincluding Managing Director and Whole Time Director (including its Manager if any) inrespect of any financial year shall not exceed eleven percent of the net profits of theCompany computed as per the manner prescribed under the Act.
(iii) The Company with the approval of the Shareholders and Central Government mayauthorise the payment of remuneration exceeding eleven percent of the net profits of thecompany subject to the provisions of Schedule V of the Act.
(iv) The Company may with the approval of the shareholders authorise the payment ofremuneration upto five percent of the net profits of the Company to any one ManagingDirector/Whole Time Director/ Manager and ten percent in case of more than one suchofficial.
(v) The Company may pay remuneration to its Directors other than Managing Director andWhole Time Director upto one percent of the net profits of the Company if there is aManaging Director or Whole Time Director or Manager and three percent of the net profitsin any other case.
(vi) If any Director draws or receives directly or indirectly by way of remunerationany such sums in excess of the limits prescribed under the Companies Act 2013 or withoutthe prior sanction of the Central Government where required he / she shall refund suchsums to the Company and until such sum is refunded hold it in trust for the Company. TheCompany shall not waive recovery of such sum refundable to it unless permitted by theCentral Government.
(vii) The net profits for the purpose of the above remuneration shall be computed inthe manner referred to in Section 198 of the Companies Act 2013. (viii) The IndependentDirectors shall not be entitled to any stock option and may receive remuneration by way offee for attending meetings of the Board or Committee thereof or for any other purpose asmay be decided by the Board and profit related commission as may be approved by themembers. The sitting fee to the Independent Directors shall not be less than the sittingfee payable to other directors.
(C) Remuneration Composition
(i) Remuneration to Executive Directors and KMPs
(a) Executive Directors and KMPs shall be eligible for a monthly remuneration as may beapproved by the Board on the recommendation of the Nomination and Remuneration Committeein accordance with the statutory provisions of the Companies Act 2013 and the rules madethereunder for the time being in force. (b) The break-up of the pay scale and quantum ofperquisites including employer's contribution to P.F pension scheme medical expensesclub fees etc. shall be decided and approved by the Board on the recommendation of theCommittee and approved by the shareholders and Central Government wherever required.
The Executive Directors and KMPs may participate in a performance linked variable payscheme which will be based on the individual and company performance for the yearpursuant to which the Executive Directors and KMPs are entitled to performance-basedvariable remuneration.
(ii) Remuneration to Directors other than Executive Directors:
(a) The Non- Executive / Independent Directors may receive remuneration by way of feesfor attending meetings of Board or Committee thereof.
(b) Provided that the amount of such fees shall not exceed the maximum amount asprovided in the Companies Act 2013 per meeting of the Board or Committee or such amountas may be prescribed by the Central Government from time to time.
The Non- Executive / Independent Directors may receive Commission on yearly basis asper the Policy of the Company with regards to the profits achieved by the Company duringthe year and within the limits prescribed under Companies Act 2013.
(iii) Remuneration to Senior Management Personnel:
(a) The Nomination and Remuneration Committee may determine from time to time theremuneration payable to Senior Management Personnel including the increments payable asper the Policy.
(b) The authority of such determination of remuneration of the SMPs may be delegated tothe Managing Director by the Nomination and Remuneration Committee as the Committee deemsfit in this regard.
(c) The Managing Director shall from time to time intimate the Nomination andRemuneration Committee the remuneration payable to the Senior Management Personnel in caseof delegation of authority to him by the Nomination and Remuneration Committee. Fixed Pay:(a) Senior Management Personnel shall be eligible for a monthly remuneration as may beapproved by the Nomination and Remuneration Committee. However in case of Manager asdefined under Companies Act 2013 the remuneration shall be in accordance with thestatutory provisions of the Companies Act 2013 and the Rules made there under for thetime being in force.
(b) The break-up of the pay scale and quantum of perquisites including employer'scontribution to P.F pension scheme medical expenses club fees etc. shall be decided andapproved by the Nomination and Remuneration Committee.
The Senior Management Personnel may participate in a performance linked variable payscheme which will be based on the individual and Company performance for the yearpursuant to which the Senior Management Personnel are entitled to performance-basedvariable remuneration.
15. CRITERIA FOR EVALUATION OF DIRECTORS/ KMPs/ SMPs OF THE COMPANY
(i) The evaluation of the Directors KMPs and the SMPs of the Company shall beconducted on an annual basis which shall further satisfy the requirements of the ListingAgreement.
(ii) The following criteria may be considered in determining how effective theperformances of the Directors/ KMPs / SMPs have been:
(a) Leadership & stewardship abilities
(b) contributing to clearly define corporate objectives & plans
(c) Communication of expectations & concerns clearly with subordinates
(d) obtain adequate relevant & timely information from external sources.
(e) review & approval achievement of strategic and operational plans objectivesbudgets
(f) regular monitoring of corporate results against projections
(g) identify monitor & mitigate significant corporate risks
(h) assess policies structures & procedures
(i) direct monitor & evaluate KMPs SMPs
(j) review management's succession plan
(k) effective meetings
(l) assuring appropriate board size composition independence structure
(m) clearly defining roles & monitoring activities of committees
(n) review of corporation's ethical conduct
(iii) Evaluation on the aforesaid parameters will be conducted by the IndependentDirectors for each of the Executive/Non-Independent Directors in a separate meeting of theIndependent Directors.
(iv) The Executive Director/Non-Independent Directors along with the IndependentDirectors will evaluate/ assess each of the Independent Directors on the aforesaidparameters. Only the Independent Director being evaluated will not participate in the saidevaluation discussion.
16. TERM OF APPOINTMENT AND LIMITS ON NUMBER OF DIRECTORSHIPS
(i) Managing Director or Whole Time Directors
The Company shall appoint or re-appoint any person as its Managing Director /Whole-Time Director for a term not exceeding five years at a time. No reappointment shallbe made earlier than one year before the expiry of term.
(ii) Independent Directors
(a) An Independent Director shall hold office for a term up to five consecutive yearson the Board of the Company and will be eligible for re-appointment on passing of aspecial resolution by the Company and disclosure of such appointment in the Board'sreport.
(b) No Independent Director shall hold office for more than two consecutive terms butsuch Independent Director shall be eligible for appointment after expiry of three years ofceasing to become an Independent Director.
Provided that an Independent Director shall not during the said period of three yearsbe appointed in or be associated with the Company in any other capacity either directlyor indirectly.
(c) At the time of appointment of Independent Director it should be ensured that numberof Boards on which such Independent Director serves is restricted to seven listedcompanies as an Independent Director and three listed companies as an Independent Directorin case such person is serving as a Whole-time Director of a listed company.
(d) The maximum number of public companies in which a person can be appointed as adirector shall not exceed ten.
For reckoning the limit of public companies in which a person can be appointed asDirector directorship in private companies that are either holding or subsidiary companyof a public company shall be included.
(e) The appointment shall be subject to the other applicable provisions of CompaniesAct 2013.
17. FAMILIARIZATION PROGRAMME FOR INDEPENDENT
The Company shall familiarize the Independent Directors with the Company their rolesrights responsibilities in the Company nature of the industry in which the Companyoperates business model of the Company etc. through various programmes seminars andplant visits.
Due to reasons for any disqualification mentioned in the Companies Act 2013 rulesmade thereunder or under any other applicable laws rules and regulations the Committeemay recommend to the Board with reasons recorded in writing removal of a Director KMPsubject to the provisions and compliance of the applicable laws rules and regulations.
The Directors & KMPs shall retire as per the applicable provisions of the CompaniesAct 2013 and the prevailing policy of the Company while SMPs shall retire as per theprevailing policy of the Company. The Board will have the discretion to retain theDirectors KMPs SMPs in the same position / remuneration or otherwise even afterattaining the retirement age in the best interest and benefit of the Company.
The Company shall disclose the Policy on Nomination and Remuneration in the BoardReport.
21. DEVIATION FROM THE POLICY
The Board may in individual or collective case deviate from this Policy in itsabsolute discretion if there are particular reasons to do so. In the event of anydeparture from the
Policy the Board shall record the reasons for such departure in the Board's minutes.However the deviations made in the Policy shall not be in contradiction to the CompaniesAct 2013 the Listing Agreement and any other laws or rules applicable thereto amendedfrom time to time.
22. AMENDMENTS TO THE POLICY
The Board of Directors on its own and / or as per the recommendations of Nomination andRemuneration Committee can amend this Policy as and when deemed fit.
23. In case of any amendment(s) clarification(s) circular(s) etc. issued by therelevant authorities not being consistent with the provisions laid down under thisPolicy then such amendment(s) clarification(s) circular(s) etc. shall prevail upon theprovisions hereunder and this Policy shall stand amended accordingly from the effectivedate as laid down under such amendment(s) clarification(s) circular(s) etc.
Personal Specification for Directors
Degree holder in relevant disciplines (e.g. management accountancy legal); or
Experience of management in a diverse organisation
Experience in accounting and finance administration corporate and strategicplanning or fund management
Demonstrable ability to work effectively with a Board of Directors
Excellent interpersonal communication and representational skills
Demonstrable leadership skills
Extensive team building and management skills
Strong influencing and negotiating skills
Having continuous professional development to refresh knowledge and skills
4. Abilities and Attributes
Commitment to high standards of ethics personal integrity and probity
Commitment to the promotion of equal opportunities community cohesion andhealth and safety in the workplace
5. Political inclinations and opinions.
ANNEXURE 6: POLICY ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
Everest Kanto Cylinder Limited ("Company" / "EKC") is committed anddedicated in providing a healthy and harassment free work environment to every individualof the Company. A work environment that does not tolerate sexual harassment. We highlyrespect dignity of everyone involved at our work place whether they are employeessuppliers or our customers. We require all employees to strictly maintain mutual respectand positive attitude towards each other.
Meaning of Sexual Harassment
a) Sexual Harassment is unwanted conduct of a sexual nature.
The unwanted nature of sexual harassment distinguishes it from behaviour that iswelcome and mutual. Physical conduct of a sexual nature includes all unwanted physicalcontact.
b) Verbal forms of sexual harassment include abusive language or insults unwelcomeinnuendoes suggestions and hints sexual advances comments with sexual overtonesobjectionable sex-related jokes or unwelcome graphic comments about individual's bodystructure in their presence or directed towards them.
c) Any other unwelcomed physical verbal or non-verbal conduct of sexual nature orinappropriate inquiries and unwelcomed whistling directed at a person or group ofpersons.
d) Non-verbal forms of sexual harassment include unwelcomed gestures inappropriateexposure and the unwelcomed display of sexually explicit pictures and objects in anymedia.
e) The following circumstances among other circumstances if it occurs or is presentin relation to or connected with any act or behaviour of sexual harassment as defined in(a) above may amount to sexual harassment:
(i) Implied or explicit threat of detrimental treatment at work; or
(ii) To threat about present or future employment status; or
(iii) Interference and disturbance with work or creation of an intimidating oroffensive work environment; or
(iv) Humiliating treatment likely to affect health safety or self-esteem.
a) All Company employees will maintain high standards of dignity respect and positiveregard for one another in all their dealings.
b) All Company employees will understand and appreciate the rights of an individual tobe treated with respect and dignity.
c) All Company employees are required to maintain a harassment free environment in theoffice premises.
d) All Company employees will refrain from committing any acts of sexual harassment atwork place.
e) Allegations of sexual harassment will be dealt seriously expeditiously sensitivelyand with confidentiality.
f) This policy will protect Company employees from victimization retaliation forfiling or reporting acomplaint on sexual harassment and will also be protected from falseaccusations.
Procedure for dealing with complaints of sexual harassment
a) Company shall form an internal Sexual harassment Internal complaint committee("Committee") to deal with all the matters related to sexual harassment. ASenior female Everest Kanto employee will head the committee. The committee will alsoconsist of a third party either an NGO or any other body familiar with the issue ofsexual harassment.
b) If the person believes that he/she has been subjected to sexual harassment then thecomplaint/ grievance should be promptly reported to the Internal Sexual harassmentCommittee through the respective HR Manager or the Unit/ Location/Department Head.
c) Ideally the complaint should be lodged immediately or within a reasonable period 1month from the date of incident/last incident.
d) All complaints / grievances of sexual harassment will be taken seriously will beheld in strict confidence and will be investigated promptly in an impartial manner. Theremay be a need to nominate a senior person to head the investigation if required in aparticular matter.
e) The Committee will thoroughly investigate the complaint / grievance and will takethe necessary appropriate course of action.
e) Any victimization of or retaliation against the complainant or any Companyemployee who gives evidence regarding sexual harassment or bullying will be subject todisciplinary action up to and including termination of employment.
f) The Committee would examine each case on its merit and take a decision from time totime for conducting the enquiry proceedings.
g) In case the complaint lodged is found to be false malicious or forged andmisleading documents have been produced the Committee post investigations may recommenddisciplinary action against the complainer.
In case any such conduct amounts to a specific offence under the Indian Penal Code orunder any other law the company shall initiate appropriate action in accordance with thelaw by lodging complaint with the appropriate authority.