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The Members of,
Everest Industries Limited
Your Directors are pleased to present the Eighty-Fifth Annual Report together with the Audited Financial Statements for the financial year (year) ended 31st March, 2018.
|K In Lakhs)|
Financial Year ended
|Net Revenue from operations & Other Income||127,859.88||123,716.67||130,694.43||124,977.12|
|Profit before Depreciation & Finance Costs||9,725.15||5160.48||9,994.54||5,074.49|
|Less : Depreciation||2,354.61||2545.80||2,354.61||2,545.80|
|: Finance Costs||1,259.18||2082.80||1,259.18||2,082.80|
|Profit before Tax||6,111.36||531.88||6,380.75||445.89|
|Profit for the year||5,068.31||398.99||5,306.08||301.89|
|Other comprehensive income for the year (net of tax)||129.40||(17.75)||129.4||(17.75)|
|Total comprehensive income for the year (net of tax)||5,197.71||381.24||5,435.48||284.14|
|Add: Balance in Profit & Loss Account||21,828.51||22373.35||21,740.71||22,311.46|
|Add: Minority share||20.86||71.19|
|Profit Available for Appropriation Appropriations:||27,026.22||22754.59||27,197.05||22,666.79|
|Tax on Dividend||31.46||156.64||31.46||156.64|
The Board of Directors have recommended a dividend of 65% i.e. Rs.6.50/- per equity share of Rs.10/- each for the Financial Year ended 31st March, 2018 subject to the approval of the members. The total outgo on account of dividend including tax on dividend will be Rs.1,222.45 lakhs as against Rs.186.01 lakhs for the previous financial year.
The Company has achieved a turnover of Rs.1,244 crores. The Highlights of the Companys standalone performance are as under:
1. Revenue from operations (net of excise duty) during the year at Rs.1,24,485.16 Lakhs was higher by 8.49% as compared with Rs.1,14,745.07 Lakhs in the previous year. Top line in building products segment recorded a increase of 10.71% whereas in the steel building segment the same recorded a increase of 5.30%.
2. Production volume in the two business segments were as follows:
a. In building products segment the production at 7,56,894 MT was higher by 14.27% over 6,62,463 MT in the previous year.
b. In steel buildings segment the production at 53032 MT was higher by 12.45% over 47161 MT in the previous year.
3. Operating Profit (EBIDTA) at Rs.9,153.99 Lakhs was higher by 115.41% over Rs.4,249.56 Lakhs in the previous year.
4. Profit before Tax at Rs.6111.36 Lakhs was higher by 1049% as against Rs.531.88 Lakhs in the previous year.
5. Cash profit was Rs.7,087.99 Lakhs as compared to Rs.2,976.74 Lakhs in the previous year.
The consolidated revenue from operations (net of excise duty) of the Company for the year ended 31st March, 2018 was Rs.1,27,051.66 Lakhs higher by 9.52% from Rs.1,16,003.46 Lakhs in the previous year. The consolidated operating profits before other income and depreciation at Rs.7,731.15 Lakhs as compared to Rs.2,078.71 Lakhs in the previous year. Profit after tax was at Rs.5,308.08 Lakhs as against Rs.301.89 Lakhs in the previous year.
TRANSFER TO RESERVES
The Company proposes to retain the entire amount of profit in the Profit and Loss account.
DIRECTORS RESPONSIBILITY STATEMENT
Your Directors state that:
a. in the preparation of the annual accounts for the year ended 31st March, 2018, the applicable accounting standards have been followed and there are no material departures from the same;
b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2018 and of the profit of the Company for the year ended on that date;
c. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 (Act) for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d. the Directors have prepared the annual accounts on a going concern basis;
e. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Act, Mr. Y. Srinivasa Rao, Executive Director, retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. The Board of Directors recommends his re-appointment.
Mr. Y Srinivasa Rao has been re-appointed by the Members of the Company as Whole Time Director designated as Executive Director of the Company for a period of five (5) years w.e.f. April 23, 2015 to April 22, 2020 at the 82nd Annual General Meeting of the Company held on August 26, 2015. Subsequently, in order to comply with the conditions specified in the amended schedule V of the Companies Act, 2013 for availing the enhanced limits of remuneration for managerial personnel as per the schedule V, the Board in its meeting held on January 25, 2017 approved the change in the period of remuneration to be paid to Mr. Rao from five (5) years to three (3) years w.e.f. April 23, 2015. Such change in period of payment of remuneration was also approved by the Members of the Company on March 8, 2017 by way of Special Resolution through Postal Ballot. Consequently, it was also decided that the Company would seek fresh approval from the members of the Company for payment of remuneration to Mr. Rao on the expiry of said 3 years for the remaining period of his tenure as per the Special Resolution passed at 82nd Annual General Meeting. Mr. Raos period of three (3) years for which remuneration was approved by the shareholders has been completed and the Board in its meeting held on May 1, 2018 on the recommendation of Nomination & Remuneration Committee fixed the remuneration of Mr. Rao for the remaining period of his tenure as Whole Time Director designated as Executive Director which is subject to approval of Members of the Company. The resolution pertaining to fixation of remuneration of Mr. Rao is set out in Item no. 5 of the Notice of the forthcoming Annual General Meeting.
A brief resume, nature of expertise, details of other directorships and other information of Mr. Y. Srinivasa Rao, Executive Director as stipulated in Secretarial Standard 2 issued by Institute of Company Secretaries of India and Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended as an annexure to the notice of the ensuing Annual General Meeting.
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulation, 2015.
Pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Board Committees. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, leadership attribute of directors through vision and values, strategic thinking and decision making, adequacy of business strategy etc.
The performance evaluation of the Independent Directors was done by the entire Board excluding the Directors being evaluated. The performance evaluation of the Chairman, Board as a whole and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.
SUBSIDIARIES, ASSOCIATE & JOINT VENTURE COMPANIES
The Company has one subsidiary in India viz. Everest Building Solutions Limited. This Company is engaged mainly in rendering of erection and other related services to its customers. The subsidiary had a turnover of Rs.2424 Lakhs and earned a profit of Rs.73 lakhs during the financial year 2017-18.
The Company also has a Subsidiary in Mauritius viz. Everest Building Products. This Company operates as a holding company for its subsidiaries in the UAE. During the year, the subsidiary had a net loss of Rs.999 lakhs mainly arising on account of certain write offs.
The Mauritius subsidiary had two subsidiaries viz. Everestind FZE and Everest Building Products LLC, both incorporated in UAE out of which Everest Building Products LLC ceased to be subsidiary w.e.f 27th November, 2017 as the same has been de-registered under the laws of UAE in line with decision of the Company in this regard. Consequently, Everest Building Products LLC ceased to be subsidiary of the Company from the date of its de-registration. Everestind FZE is a legal entity involved in the trading of Companys products in the middle east and foreign markets. This entity had a turnover of Rs.1688 lakhs and a net loss of Rs.146 lakhs mainly on account of certain write offs.
In terms of proviso to sub-section (3) of Section 129 of the Act, the salient features of the financial statement of the subsidiaries is set out in the prescribed Form AOC-1, which forms part of the Boards Report as ANNEXURE-1. During the financial year 2017- 18, no Company has become or ceased to be a Joint Venture or Associate of the Company.
Your Company has not accepted any deposits from the public during the year and, as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.
The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by Securities and Exchange Board of India (SEBI). A separate Report on Corporate Governance along with Certificate from M/s. TVA & Co., LLP, Company Secretaries on compliance with the conditions of Corporate Governance as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 is provided as part of this Annual Report.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
During the year, the Company has not entered into any contract/ arrangement with a related party as specified under section 188 of the Companies Act, 2013. Therefore, disclosure in Form AOC-2 is not required. The Policy on materiality of related party transactions and dealing with related party transactions is available on the Companys website at the link: http://www.everestind.com/uploads/ Files/161 invuf_Related-Party.pdf
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In accordance with the requirements of Section 135 of Companies Act, 2013, your Company has constituted a Corporate Social Responsibility Committee. The composition and terms of reference of the Corporate Social Responsibility Committee are provided in the Corporate Governance Report.
The Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Companys website at the link: http://www.everestind. com/uploads/Files/194invuf_CSR-Policy_Final.pdf. The Company has identified five focus areas of engagement which are as under:
Capacity building, skill development, training and employment generation
Promotion of education, art, culture and sports
Preventive health care and Sanitation
Eradicating Hunger & Poverty
The Company would also undertake other need-based initiatives in compliance with Schedule VII to the Act. During the year, the Company has spent Rs.71.34 lakhs on CSR activities. The financial data pertaining to the Companys CSR activities for the Financial Year 2017-18 is attached in the prescribed format in ANNEXURE-2 to the Boards Report. The Company is undertaking the CSR activities through its trust Everest Foundation.
MANAGEMENTS DISCUSSION AND ANALYSIS REPORT
The Managements Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2)(e) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of the Annual Report.
EMPLOYEES STOCK OPTION SCHEME
The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employees Stock Option Schemes of the Company in accordance with the applicable SEBI Regulations.
The applicable disclosures as stipulated under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 as on March 31, 2018 with regard to the Employees Stock Option Schemes (ESOS) are provided in ANNEXURE-3 to the Boards Report.
The Company has received certificates from the Statutory Auditors of the Company that the Schemes have been implemented in accordance with the SEBI Regulations and as per the special resolutions passed by the members in the Annual General Meeting. The certificates shall be placed at the Annual General Meeting for inspection by the members.
M/s S.R. Batliboi & Co. LLP, Chartered Accountants has been appointed as Statutory Auditors of the Company in the 83rd Annual General Meeting for a period of 5 years subject to ratification by the Members at every annual general meeting.
In terms of provisions of Section 139 of the Companies Act, 2013, it is proposed to ratify the appointment of M/s S.R. Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors of the Company from the conclusion of ensuing Annual General Meeting till the conclusion of 88th Annual General Meeting of the Company. Members are requested to ratify the appointment of M/s S.R. Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors of the Company as set out in the Notice convening the forthcoming Annual General Meeting.
There are no qualifications, reservations or adverse remarks made by M/s S.R. Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors of the Company, in their report for the financial year ended March 31, 2018. The Statutory Auditors have not reported any incident of fraud to the Audit Committee or to the Board of Directors under section 143(12) of the Companies Act, 2013 during the year under review.
As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 as amended from time to time, the Company has been carrying out audit of cost records.
The Board of Directors on the recommendation of Audit Committee has appointed M/s. Chandra Wadhwa & Co., Cost Accountants as Cost Auditor to audit the cost records of the Company for the financial year 2018-19. As required under the Companies Act, 2013, a resolution seeking members approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the forthcoming Annual General Meeting.
The Board has appointed M/s TVA & Co. LLP, Company Secretaries to conduct the Secretarial Audit of the Company for the financial year 2017-18 as required under Section 204 of the Act and Rules made thereunder. The Secretarial Audit Report for the financial year 2017-18 is attached as ANNEXURE-4 to the Boards Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
DISCLOSURES AUDIT COMMITTEE
The Audit Committee of the Board comprises of Mr. B.L. Taparia (Chairman), Mr. M.L. Gupta (Member), and Mrs. Bhavna G Doshi (Member). For details, please refer to Corporate Governance Report attached to this report. The Board has accepted all the recommendation made by the Audit Committee.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee of the Board comprises of Mr. M.L. Gupta (Chairman), Mr. Amitabh Das Mundhra (Member) and Mr. B.L. Taparia (Member). For details, please refer to Corporate Governance Report attached to this Annual Report.
The Nomination and Remuneration Committee has framed the Nomination, Remuneration and Board Diversity Policy. A copy of Nomination, Remuneration and Board Diversity Policy is attached as ANNEXURE-5 to the Boards Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Board has laid out the Companys policy on Corporate Social Responsibility (CSR), and the CSR activities of the Company are carried out as per the instructions of the Committee.
The CSR Committee of the Board comprises of Mr. A.V. Somani (Chairman), Mr. M.L. Gupta (Member), Mr. Manish Sanghi (Member) and Mr. Y. Srinivasa Rao (Member). For details, please refer to Corporate Governance Report attached to this report.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The Committee reviews and ensures redressal of investor grievances. For details, please refer to Corporate Governance Report attached to this report.
The Stakeholders Relationship Committee of the Board comprises of Mr. M.L. Gupta (Chairman), Mr. A.V. Somani (Member) and Mr. Manish Sanghi (Member).
VIGIL MECHANISM POLICY
Pursuant to Section 177 of the Companies Act, 2013 and rules made thereunder and the Listing Regulations, the Company has in place a mechanism for Directors, employees, vendors and customers to report concerns about unethical behaviour, actual or suspected fraud, violation of Code of Conduct of the Company etc. The mechanism also provides for adequate safeguards against victimization of Whistle Blower who avail the mechanism and also provides for direct access to the Whistle Blower to the Chairman of the Audit Committee. Pursuant thereto, a dedicated helpline "Ethics Helpline" has been set-up which is managed by an independent professional organization.
The Vigil Mechanism Policy may be accessed on the Companys website at the link: http://www.everestind.com/uploads/Files/163invuf_
The Company has Risk Management Policy to mitigate the risks. The Company manages and monitors the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Internal Auditor of the Company prepares quarterly risk analysis reports which are reviewed and discussed in the Audit Committee Meetings.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.
NUMBER OF MEETINGS OF THE BOARD
The Board met five times during the financial year 2017-18, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY
The details of investments covered under the provisions of Section 186 of the Companies Act, 2013 are disclosed in the Note No. 2.04 to the Standalone Financial Statement. The Company has neither given any loans nor provided any security or fresh guarantee under Section 186 of the Act during the Financial Year 2017-18.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The required particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required are attached as ANNEXURE-6 to the Boards Report.
EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act, 2013, Extract of Annual Return in the prescribed format is attached as ANNEXURE-7 to the Boards Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, a statement showing the names and other particulars of the top ten employees in terms of remuneration drawn set out in the said rules are provided in ANNEXURE-8 to the Boards Report.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the ANNEXURE-9 to the Boards Report.
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Issue of equity shares with differential rights as to dividend, voting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report.
3. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.
4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status of the Company and its future operations.
5. No material changes and commitments affecting the financial position of the Company have occurred from the end of the last financial year till the date of this report.
6. No change in the nature of the business of the Company happened during the financial year under review.
Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The Company has continuously adopted structures that help attract best external talent and promote internal talent to higher roles and responsibilities. Everests people-centric focus providing an open work environment fostering continuous improvement and development helped several employees realize their career aspiration during the year.
During the year, the industrial relations at all the works of the Company were cordial.
COMPLIANCE WITH APPLICABLE SECRETARIAL STANDARDS
During the year under review, the Company has complied with the provisions of the SS-1 (Secretarial Standard on meeting of the Board
of Directors) & SS-2 (Secretarial Standard on General Meeting) issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118 of the Act.
Your Directors wish to place on record their gratitude to the Companys business associates, trade partners, dealers, customers, shareholders, vendors, bankers, technology providers and other stakeholders all over India and overseas for the continued support and co-operation extended by them to the Company during the year. Your Board also thanks to the Government of India, State Governments and other Government Authorities for their continued support and encouragement to the Company and look forward to their support in future.
Your Directors especially wish to place on record their sincere appreciation of the efficient services rendered by the Companys motivated team members from all Zones, Works and Offices.
|For and on behalf of the Board|
|Manish Sanghi||Y Srinivasa Rao|
|Managing Director||Executive Director|
|Mumbai, 1st May 2018|