Your Directors are pleased to present the 27th Annual Report on the business andoperations of the Company along with the Audited Financial Statements for the financialyear ended March 312020.
1. FINANCIAL RESULTS AND OPERATIONS:
i. Financial Results:
The Company's financial performance for the year ended March 31 2020 as compared withthe previous year is summarized below:
Amount in Rs.
|Particulars ||2019-20 ||2018-19 |
|I Total Revenue ||1686651691 ||1563930473 |
|II Profit before Financial Cost Depreciation and Tax ||206165268 ||183764988 |
|III Less : Financial Cost ||33156781 ||32132959 |
|IV Less : Depreciation ||32081445 ||28358426 |
|V Profit Before Tax ||140927042 ||123273603 |
|VI Less : Provision for Income Tax ||22700000 ||27000000 |
|VII Less: Deferred Tax ||9260165 ||21187818 |
|VIII Profit After Tax ||108966877 ||75085785 |
|IX Other Comprehensive Income ||- ||- |
|X Total Comprehensive Income for the period ||108966877 ||75085785 |
|XI Add: Brought forward from Previous Year ||179755769 ||106821994 |
|XII Closing Balance of Reserves & Surplus ||262021544 ||179755769 |
During the year under review your Company has register a total revenue of Rs.1686651691/- as against Rs. 1563930473/- for the previous corresponding year showinga year-on-year growth of 7.30%.
Whereas the Net Profit of the Company was Rs. 108966877/- as against Net Profit ofRs. 75085785/- for the previous year showing a rise of 45.12% in the profit of theCompany. Earnings per share for the year was Rs. 13.62.
2. COVID - 19 AND ITS IMPACT:
The impact of COVID-19 on the Company is being closely reviewed with the Management bythe Directors from time to time. Your Company has temporarily suspended operations at itsPlant site as per the directives given by the Central and State Government and keeping inview the safety of work force. After seeking necessary approvals from the Governmentauthorities and maintaining social distancing norms and utmost safety of employeesoperations were commenced at the Plant site. However dispatches were affected due torestriction on movement of finished product to the ports for exports towards the end ofthe financial year.
Your Directors are pleased to recommend a dividend @ 10% i.e. Rs. 1.00/- (Rupees Oneonly) per equity shares of Rs. 10/- each for the FY 2019-20 subject to the approval ofthe shareholders at the ensuing 27th Annual General Meeting (AGM) of the Company. Dividendwill be paid to those shareholders whose names appear on the register of members of theCompany as on September 02 2020.
4. TRANSFER TO RESERVES:
The Company has not proposed to transfer any amount to the general reserves for theyear ending March 312020.
5. SHARE CAPITAL
There was no change in the Share Capital of the Company during the year 2019-20. Thepaid up Equity Share Capital as on March 312020 was Rs. 80000000/- (Rupees Eight Croresonly).
6. DEPOSITS FROM PUBLIC:
The Company has not accepted any deposits from public pursuant to the provision ofsection 73 of the Companies Act 2013 and as such no amount on account of principal orinterest on deposits from public was outstanding as on the date of the balance sheet.
7. CHANGE IN THE NATURE OF BUSINESS IF ANY:
During the year under review there was no change in the nature of the business of theCompany.
8. SUBSIDIARY / JOINT VENTURE / ASSOCIATE COMPANIES:
The Company does not have any subsidiary / joint venture / associate companies duringthe year under review.
9. MANAGEMENT DISCUSSION & ANALYSIS REPORT:
The detailed report on the Management Discussion and Analysis for the year under reviewas stipulated under Regulation 34 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 is presented and forms part ofthis Annual Report.
10. CORPORATE GOVERNANCE:
In compliance with the requirement of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 and the Companies Act 2013 theReport on Corporate Governance as on March 31 2020 as stipulated under the ListingRegulations forms part of this Report. The requisite certificate from the SecretarialAuditors of the Company confirming compliance with the conditions of Corporate Governanceis attached to the report on Corporate Governance and forms part of this Annual Report.
11. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
Relevant information on composition of the Board and number of meetings is provided inBoard of Directors' section of Report on Corporate Governance which forms part ofthis Annual Report.
a) Statement of Declaration given by Independent Director:
The Independent Directors have submitted the Declaration of Independence as requiredpursuant to Section 149 (7) of the Companies Act 2013 stating that they meet the criteriaof Independence as provided in sub-section (6) and Regulation 16(1)(b) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (ListingRegulations).
b) Directors Retire by Rotation:
In accordance with the requirements of the Companies Act 2013 and Article ofAssociation of the Company Mr Sri Kakarlapudi Harikrishna and Mr. Akella ParvathisemDirectors retire by rotation and offer themselves for re-appointment. Your Board ofDirectors recommends their reappointment. Their brief profile has been provided in thenotice and forms part of this Annual Report.
c) Key Managerial Personnel:
Pursuant to the provisions of section 203 of the Companies Act 2013 the KeyManagerial Personnel of the Company are - Dr. Srikakarlapudi Srihari Raju ManagingDirector Mr. Ramakrishna Peruri Chief Financial Officer and Ms. Rekha Singh CompanySecretary.
Remuneration and other matters provided in section 178(3) of the Act have beendisclosed in the Report on Corporate Governance which forms part of this Annual Report.
d) Meetings of the Board:
During the FY 2019-20 four meetings of the Board of Directors were held. For detailsof meetings of the Board please refer to the Report on Corporate Governance forming partof this Annual Report.
e) Committee of Board and details of meetings:
There are various Board constituted Committees as stipulated under the Companies Actand Listing Regulations namely Audit Committee Stakeholders Relationship CommitteeNomination and Remuneration Committee and Corporate Social Responsibility (CSR) Committee.All the recommendations made by the Committees of Board including the Audit Committee wereaccepted and approved by the Board. Brief details pertaining to composition terms ofreference meetings held and attendance thereat of these Committees during the year hasbeen enumerated in Report on Corporate Governance which forms part of this Annual Report.
f) Board Evaluation:
As per provisions of the Companies Act 2013 and Regulation 17 (10) of the ListingRegulations an evaluation of the performance of the Board its committees and members wasundertaken. For details please refer to the Report on Corporate Governance forming partof this Annual Report.
g) Appointment of Directors and Remuneration Policy:
The assessment and appointment of members to the Board is based on a combination ofcriterion that includes ethics personal and professional stature domain expertisegender diversity and specific qualification required for the position. The potentialindependent Board member is also assessed on the basis of independence criteria defined inSection 149(6) of the Companies Act 2013 and Regulation 16(1) (b) of the ListingRegulations.
In accordance with Section 178(3) of the Companies Act 2013 and on recommendations ofNomination and Remuneration Committee the Board adopted a remuneration policy forDirectors Key Management Personnel (KMPs) and Senior Management which is available on thewebsite of the Company www.everestorganicsltd.com.
h) Compliance with Secretarial Standards;
In terms of section 118 (10) of the Companies Act 2013 the Company continues tocomplies with the various provision of all Secretarial Standards as issued by theInstitute of Company Secretaries of India.
12. ADEQUACY OF INTERNAL FINANCIAL CONTROL SYSTEMS:
The Company has in place proper and adequate Internal Financial Control systemscommensurate with the nature of its business size and complexity of its operations withreference to financial statements. Internal control systems comprising of policies andprocedures designed to ensure reliability of financial reporting timely feedback onachievement of operational and strategic goals compliance with policies procedureapplicable laws and regulations and that all assets and resources as acquired are usedeconomically.
13. DIRECTOR'S RESPONSIBILITY STATEMENT:
In accordance with clause (c) of sub-section 3 of section 134 of the Companies Act2013 the Directors of the Company state:
a. That in the preparation of the accounts for the financial year ended March 31 2020the applicable accounting standards had been followed along with proper explanationrelating to material departures;
b. That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for the year under review;
c. That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d. That the Directors have prepared the accounts for the financial year ended March312020 on a going concern basis';
e. That the Directors have laid down internal financial controls to be followed by theCompany and that such financial controls are adequate and operating effectively;
f. The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively;
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutoryauditors and external consultants and the reviews performed by management and the relevantboard committees including the audit committee the board is of the opinion that theCompany's internal financial controls were adequate and effective during the financialyear 2019-20.
14. RELATED PARTY TRANSACTIONS;
All Related Party Transactions are in compliance of the Companies Act and the SEBI(LODR) Regulations 2015. There are no materially significant related party transactionsmade by the Company with Promoters Directors or Key Managerial Personnel etc. which mayhave potential conflict with the interest of the Company at large.
All Related Party Transactions entered into by the Company were in the Ordinary Courseof Business and at an Arm's Length basis and were reviewed and approved by the AuditCommittee and the Board. Omnibus approval is obtained for transactions which areforeseeable and repetitive in nature. A statement of all Related Party Transactions ispresented before the Audit Committee on quarterly basis specifying the nature value andterms and conditions of the transactions. Complete details of RPT are given in the Notesto Financial Statement forming part of this Annual Report.
The Policy on Materiality of Related Party Transactions and on dealing with RelatedParty Transaction as approved by the Board may be accessed on the Company's website:www.everestorganicsltd.com.
Information on transactions with Related Parties pursuant to Section 134(3) (h) of theCompanies Act 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014 are givenin Form AOC-2 and is attached as BR_Annexure I to this Annual Report.
15. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company believes in upholding professional integrity and ethical behaviour in theconduct of its business. To uphold and promote these standards the Company has a VigilMechanism / Whistle Blower Policy which serves as a mechanism for its Directors andemployees to report genuine concerns about unethical behaviour actual or suspected fraudor violation of the Code of Conduct without fear of reprisal. The policy also providesaccess to the Chairperson of the Audit Committee under certain circumstances. The detailsof establishment of such mechanism are available on the website of the Companywww.everestorganicsltd.com.
Whistle Blower Policy and affirmation that none of the personnel have been deniedaccess to the Audit Committee. The Company has in place a Whistle Blower Policy for Vigilmechanism for Directors and employees to report to the management about the unethicalbehavior fraud violation of Company's Code of Conduct.
16. AUDITORS AND AUDIT REPORT:
a) Statutory Auditors;
Pursuant to the provisions of Section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 as amended from time to time M/s. Suryam &Co. Chartered Accountants Hyderabad (FRN: 012181S) was appointed as Statutory Auditorsof the Company at its 24th Annual General Meeting held on September 27 2017 for a term offive (5) years subject to the ratification by shareholders at every Annual GeneralMeeting.
However the Ministry of Corporate Affairs (MCA) vide its notification dated May 72018 has omitted the requirement under the first proviso to Section 139 of the CompaniesAct 2013 and Rule 3(7) of the Companies (Audit and Auditors) Rules 2014 regardingratification of appointment of statutory auditors by shareholders at every subsequent AGM.Accordingly no resolution for ratification of appointment of statutory auditor wasincorporated in the Notice of 27th Annual general Meeting of the Company.
b) Board's response on Auditors' Qualifications Reservations or Adverse Remarks;
The qualifications made by the Statutory Auditors in the Auditors' Report for thefinancial year ended March 31 2020 read with explanatory notes therein areself-explanatory and therefore do not call for any further explanation or comments fromthe Board under Section 134 (3) of the Companies Act 2013 other than those mentionedbelow:
i. Gratuity provisions made for Rs. 100.18 lakhs payment made to the Gratuity Fund isRs. 70.31 Lakhs only.
Directors' Comments: During the year under review the Company has made a payment ofRs. 70.31 lakhs in the Gratuity fund. However the Company have initiated the necessaryactions towards the payment of balance amount in the following financial year.
c) Internal Auditors;
The Board of Directors based on the recommendation of the Audit Committee has appointedM/s. Harikrishna & Associates Chartered Accountants as the Internal Auditors of yourCompany. The Internal Auditors are submitting their reports on quarterly basis.
d) Cost Auditors;
The Board of Director based on the recommendation of Audit Committee has appointed M/s.PKR & Associates LLP Cost Accountants Hyderabad as the Cost Auditors of the Companypursuant to the provisions of section 148 of the Companies Act 2013 for the financialyear 202021. The provisions also require that the remuneration of the cost auditors beratified by the shareholders and accordingly the same is put forward to the shareholdersin the ensuing 27th Annual General Meeting for their ratification.
e) Cost Audit Report for the year ended March 31 2020;
The Cost Audit Report for the financial year 2019-20 issued by M/s. PKR &Associates LLP Cost Accountant are self-explanatory and therefore do not call for anyfurther explanation or comments from the Board. The same will be filed with the CentralGovernment within the stipulated timeline.
f) Cost Records;
The provisions of Cost Records are applicable to the Company and the company hascoplied with the said provisions.
g) Secretarial Auditor;
In compliance with the provisions of section 204 of the Companies Act 2013 read withcorresponding Rules framed thereunder M/s. D. Hanumantha Raju & Co. Company Secretaryin practice were re-appointed as the Secretarial Auditors of the Company to carry out theSecretarial Audit for the year ending March 312021.
h) Annual Secretarial Audit Report;
In terms of Section 204 of the Companies Act 2013 and Regulation 24A of SEBI (ListingObligation and Disclosure Requirements) Regulations 2015 a Secretarial Audit Reportgiven by the Secretarial Auditors in form no. MR-3 is annexed as BR_AnnexureII to this Annual Report.
The qualifications made by the Secretarial Auditors in the Secretarial Audit Report forthe financial year ended March 312020 is mentioned below:
i. Credit Rating Report dated 19.02.2020 received from credit rating agency on24.02.2020 and the same was to be intimated to Stock Exchange within 24 hours pursuant toRegulation 30 of SEBI (LODR) Regulations 2015 but it was intimated on 18.05.2020
Directors' Comments: We do admit there was delay and it was because ofinter-departmental miscommunication as well as pressure of closure of the financial yearending March 31 2020. Thereafter the Covid -19 lockdown situation resulted in shut downof the corporate office for a while. As soon as the corporate office startedfunctioning we intimated the report on May 18 2020.
i) Annual Secretarial Compliance Report;
A Secretarial Compliance Report for the financial year ended March 31 2020 oncompliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunderwas obtained from M/s. D. Hanumantha Raju & Co. Secretarial Auditors and submitted tothe stock exchanges.
17. RISK MANAGEMENT POLICY:
The Company has instituted a proper mechanism for identifying and establishing controlsto effectively manage different kinds of risks. At present the threats risks and concernsbeing felt are stiff competition in the market consolidation of manufacturers who havebranded products and fluctuations in prices as well as availability of raw materials.
18. DECLARATION ABOUT COMPLIANCE WITH CODE OF CONDUCT BY MEMBERS OF THE BOARD ANDSENIOR MANAGEMENT PERSONNEL:
The Company has complied with the requirements about the Code of Conduct for Boardmembers and Senior Management Personnel. A compliance certificate by the Managing Directorforms part of this Annual Report.
19. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:
The Company has always believed in proving a safe and harassment free workplace forevery individual working in its premises through various policies and practices. TheCompany always endeavours to create and provide an environment that is free fromdiscrimination and harassment including sexual harassment.
The Company has adopted a policy on Prevention of Sexual Harassment at Workplace whichaims at prevention of harassment of employees and lays down the guidelines foridentification reporting and prevention of undesired behaviour. An Internal ComplaintsCommittee (ICC) has been set up by the senior management (with women employeesconstituting the majority). The ICC is responsible for redressal of complaints related tosexual harassment and follows the guidelines provided in the Policy.
During the year ended March 31 2020 no complaints pertaining to sexual harassmenthave been received.
20. OTHER DISCLOSURES:
a) Extract of Annual Return;
An extract of Annual Report prepared in accordance with section 92(3) and 134(3)(a) ofthe Companies Act 2013 read with Rule 12 of the Companies (Management and Administration)
Rule 2014 in Form MGT-9 is annexed as BR_Annexure III to thisAnnual Report and is also available on the website of the Companywww.everestorganicsltd.com.
b) Conservation of Energy Technology Absorption Foreign Exchange Earning andOutgo;
Particulars pertaining to conservation of energy technology absorption and foreignexchange earnings and outgo pursuant to the provisions of Section 134 (3) (m) of theCompanies Act 2013 read with Rule 8 of Companies (Accounts) Rules 2014 as amended fromtime to time are annexed as BR_Annexure IV to this Annual Report.
c) Loans/ Guarantees/ Investments under section 186 of the Companies Act 2013;
During the year under review the Company has not given any loans and Guarantees ormade any Investments and securities provided pursuant to the provisions of Section 186 ofthe Companies Act 2013.
d) Disclosure regarding Employees Stock Option Scheme:
Pursuant to the provision of Sections 62 (1) (b) of the Companies Act 2013 read withRule 12 (9) of the Companies (Share Capital and Debentures) Rules 2014 the Company hasnot issued any equity shares under Employees Stock Option Scheme during the year underreview.
The Board of Directors at their meeting held on 09.08.2017 have proposed to approveEmployee Stock Option Scheme which was later approved by the members at the 24th AnnualGeneral Meeting of the Company held on 27.09.2017 as the ESOP Scheme 2017. The Company isplanning to proceed with said approval soon.
e) Details of Nodal Officer;
The Company has designated Ms. Rekha Singh Company Secretary and Compliance Officer asa Nodal Officer for the purpose of IEPF.
f) Disclosure regarding Unclaimed Shares;
Pursuant to the provisions of SEBI (LODR) Regulations 2015 the Company had transferred207972 (Two Lakh Seven Thousand Nine Hundred Seventy Two) unclaimed Equity Shares to theEverest Organics Limited - Unclaimed Suspense Account. 182880 (One Lakh Eighty TwoThousand Eight Hundred and Eighty) Equity Shares were still lying under EverestOrganics Limited - Unclaimed Suspense Account as on 31.03.2020.
21. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS:
During the year there are no significant and/or material orders passed by any Courtor Regulator or Tribunal which may impact the going concern status or the Company'soperations in future.
22. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYAFTER THE CLOSE OF THE YEAR TILL THE DATE OF THIS REPORT:
The material events that have occurred after the close of the year till the date ofthis report are as follows:
1. Osaltamivir API is introduced and commercialized.
2. Remdesivie API a Covid treatment drug is developed in the R & D.
Other than these no other material changes and commitments have occurred which mayaffect the financial position of the Company after the close of the year till the date ofthis report.
23. CORPORATE SOCIAL RESPONSIBILITY:
During the year under review the Company has constituted a Corporate SocialResponsibility (CSR) Committee in accordance with the provisions of Section 135 of theCompanies Act 2013.
The details of the CSR Policy of the Company its development and initiatives taken bythe Company on CSR during the year are annexed herewith as BR_Annexure V andforms part of this Annual Report. The said Policy is available on the website of theCompany www.everestorganicsltd.com.
24. PARTICULARS OF EMPLOYEES AND REMUNERATION:
In compliance with the requirement of Section 197 (12) of the Companies Act 2013 readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 a statement containing the remuneration details of Directors and employees areannexed herewith as BR_Annexure VI and forms part of this AnnualReport.
25. HUMAN RESOURCE:
Your Company considers its Human Resources as the key to achieve its objectives.Keeping this in view your Company takes utmost care to attract and retain qualityemployees. The employees are sufficiently empowered and such work environment propels themto achieve higher levels of performance. The unflinching commitment of employees is thedriving force behind the Company's vision. Your Company appreciates the spirit of itsdedicated employees.
Your directors place on record their sincere appreciation for the significantcontribution made by its employees through their dedication hard work and commitment atall levels. The board of directors also acknowledge the support extended by the analystsbankers government agencies media customers suppliers shareholders and investors atlarge. The Board look forward to your continued support in the Future.
| || |
For and on behalf of the Board of Directors
| ||Sd/- ||Sd/- |
| ||K. Ramakrishnam Raju ||Sri Kakarlapudi Srihari Raju |
| ||Chairman ||Managing Director |
| ||DIN: 01735481 ||DIN:01593620 |
|Date: 31.07.2020 || || |
|Place: Hyderabad || || |