BOARD'S REPORT TO THE MEMBERS OF EVEREST INDUSTRIES LIMITED Your Directors are pleased to present the Eighty Third Annual Report together with the Audited Financial Statements for the financial year ended 31st March, 2016. DIVIDEND The Board of Directors have recommended a dividend of 50% i.e. Rs. 5/- per equity share of Rs. 10/- each for the Financial Year ended 31st March, 2016 subject to approval of the members. The total outgo on account of dividend including tax on dividend will be Rs. 931.54 lacs as against Rs. 917.42 lacs for the previous financial year. The Indian economy has certainly performed creditably compared to most developed and emerging markets of the world in the past year. The macroeconomic condition is stable and consumer price inflation is well under control. Even as the economy has made progress, this has yet to show a positive impact on significant demand revival and improved corporate earnings. Two consecutive weak monsoon seasons along with stalled reforms due to political discord remain concerns. Despite the constraints, the Company has achieved mile stone in turnover of more than Rs. 1,300 crores. The Highlights of the Company's standalone performance are as under: 1. Driven by growth in Steel Building segment the Revenue from operations during the year at Rs. 1,31,335.63 lacs was up 6.73% as compared with Rs. 1,23,049.54 lacs in 2014-15. Top line in building products segment recorded a degrowth of 4.28% whereas in the steel building segment the same recorded a growth of 33.03%. 2. Production volume in the two business segments were as follows: a. In building products segment the production at 7,09,433 MT was lower by 4.67% over 7,44,164 MT in 2014-15. b. In steel buildings segment the production at 47,347 MT was up by 48.10% over 31,969 MT in 2014-15. 3. Operating Profit (EBIDTA) at Rs. 8,317.14 lacs was up by 1.51% over Rs. 8,193.37 lacs in 2014-15 4. Improved operating performance increased Profit before Tax by 6.37% to Rs. 5,134.56 lacs compared to Rs. 4,827.26 lacs in the earlier year. 5. Cash profit was Rs. 6,368.56 lacs as compared to Rs. 6,155.53 lacs in the previous year. The consolidated revenue from operations of the Company for the year ended 31st March, 2016 was Rs. 1,31,337.34 lacs up by 6.67% from Rs. 1,23,126.43 lacs in the previous year. The consolidated operating profits before other income and depreciation at Rs. 6,318.32 lacs as compared to Rs. 6,326.52 lacs in the previous year. Profit after tax was at Rs. 3,444.13 lacs as against Rs. 3,422.97 lacs in the previous year. TRANSFER TO RESERVES The Company proposes to transfer Rs. 360 lacs to the general reserves for the Financial Year ended March 31, 2016. DIRECTORS' RESPONSIBILITY STATEMENT Your Directors state that: a) in the preparation of the annual accounts for the year ended 31st March, 2016, 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, 2016 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) t he 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. Manish Sanghi, Managing 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. The Board of Directors in their meeting held on 29th April, 2016 have re-appointed Mr. Aditya Vikram Somani as Whole Time Director designated as Chairman of the Company for a further period of five years w.e.f. 21st June, 2016 to 20th June, 2021 and Mr. Manish Sanghi as Managing Director of the Company for a period of five years w.e.f. 1st October, 2016 to 30th September, 2021 subject to the approval of the shareholders of the Company. The resolutions pertaining to their re-appointment are set out in Item nos. 5 & 6 respectively of the Notice of the forthcoming Annual General Meeting. The Nomination and Remuneration Committee in their meeting held on 29th April, 2016 have recommended the appointment of Mr. M.L. Gupta, a Non-Executive Director of the Company, as Independent Director of the Company w.e.f. 29th April, 2016 to 30th September, 2019 to the Board of Directors for approval. The Board, in their meeting held on 29th April, 2016, has approved the appointment of Mr. M.L. Gupta as Independent Director of the Company subject to the approval of the members. Mr. M.L. Gupta has given a declaration to the Board that he meets the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The resolution pertaining to his appointment as Independent Director is set out at item no. 7 of the Notice of the forthcoming 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. BOARD EVALUATION Pursuant to the applicable provisions of the Companies Act, 2013 and SEBI (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. A structured questionnaire was prepared after circulating the drafts forms, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. 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 The Company has one subsidiary in India viz. Everest Building Solutions Limited and three subsidiaries outside India viz., Everest Building Products in Mauritius, Everestind FZE in Jebel Ali Free Zone, Dubai, UAE and Everest Building Products LLC in Ras Al Khaimah, UAE. Everest Building Solutions Limited has become subsidiary of the Company w.e.f. 1st August, 2015. 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 Board's Report as ANNEXURE - 1. DEPOSITS 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. CORPORATE GOVERNANCE 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 Company's website at the link: <http://www.everestind.com/about->us/share-holderinformation. 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 is 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 Company's website at the link: <http://www>. everestind.com/corporate-social-responsibility The Company has identified five focus areas of engagement which are as under: 1. Environmental sustainability 2. Employment enhancing vocational skills 3. Health, hygiene & sanitation 4. Promotion of education 5. Promotion of sports 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. 106.13 lacs on CSR activities. The financial data pertaining to the Company's CSR activities for the Financial Year 2015-16 is attached in the prescribed format in ANNEXURE -2 to the Board's Report. The Company is undertaking the CSR activities through its trust 'Everest Foundation'. MANAGEMENT'S DISCUSSION AND ANALYSIS The Management's 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 SCHEMES 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, 2016 with regard to the Employees' Stock Option Schemes (ESOS) are provided in ANNEXURE - 3 to the Board's 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 the resolution passed by the members. The certificates would be placed at the Annual General Meeting for inspection by the members. STATUTORY AUDITORS M/s. Deloitte Haskins & Sells, Chartered Accountants, Statutory Auditors of the Company, who were appointed by the Members of the Company at the 81st Annual General Meeting ('AGM') of the Company, held on 30th July, 2014 from the conclusion of 81st AGM till the conclusion of 84th AGM to be held in the year 2017. M/s. Deloitte Haskins & Sells vide their letter dated 15th April, 2016 have informed that they do not wish to offer themselves for re-appointment as statutory auditors of the Company for the financial year ending 31st March, 2017. M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, vide their letter dated 18th April, 2016 have expressed their willingness to be appointed as Statutory Auditors of the Company and to the effect that their appointment, if made, would be within the prescribed limits under section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for appointment. The Board in their meeting held on 29th April, 2016, based on recommendation of Audit Committee, has recommended the appointment of M/s S.R. Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors of the Company in the forthcoming Annual General Meeting. The members are requested to appoint M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, as statutory auditors of the Company as set out at Item no. 4 of the Notice of the forthcoming Annual General Meeting. AUDITORS' REPORT There are no qualifications, reservations or adverse remarks made by M/s Deloitte Haskins & Sells, Statutory Auditors of the Company, in their report for the financial year ended March 31, 2016. The Statutory Auditors have not reported any incident of fraud to the Audit Committee or to the Board of the Company in the year under review. COST AUDITORS 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 2016-17. 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. SECRETARIAL AUDITOR The Board has appointed M/s Tanuj Vohra & Associates, Practicing Company Secretaries to conduct the Secretarial Audit of the Company for the financial year 2015-16 as required under Section 204 of the Act and Rules made thereunder. The Secretarial Audit Report for the financial year 2015-16 is attached as ANNEXURE - 4 to the Board's 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. M.L. Narula (Chairman), Mr. M.L. Gupta (Member), Mr. B.L. Taparia (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 Committee oversees and administers executive compensation, operating under the policy adopted by the Board. The Nomination and Remuneration Committee of the Board comprises of Mr. M.L. Narula (Chairman), Mr. M.L. Gupta (Member), 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 Board's Report. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE The Board has laid out the Company's policy on Corporate Social Responsibility (CSR), and the CSR activities of the Company are carried out as per the instructions of the Committee. The CSR Committee of the Board comprises of Mr. A.V. Somani (Chairman), Mr. M.L. Gupta (Member), Mr. M.L. Narula (Member), Mr. Manish Sanghi (Member) and Mr. Y. Srinivasa Rao (Member). For details, please refer to Corporate Governance Report attached to this report. The CSR Policy is available on Company's website at the link: <http://www.everestind.com/corporate-social-responsibility>. 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 The Vigil Mechanism Policy of the Company, which also incorporates a Whistle Blower Policy in terms of the Listing Agreement/ SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 for directors and employees to report concerns about unethical behavior, actual or suspected fraud. Protected disclosures can be made by a whistle blower in writing to the Ombudsman and under the said mechanism, no person has been denied direct access to the chairperson of the Audit Committee. The Vigil Mechanism Policy may be accessed on the Company's website at the link: <http://www.everestind.com/about-us/share->holder-information. RISK MANAGEMENT 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 Board 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 2015-16, 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 Listing Agreement/ SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 The details of investments covered under the provisions of Section 186 of the Companies Act, 2013 are disclosed in the Note No. 2.10 to the Standalone Financial Statement. The Company has not given any loans and guarantees under Section 186 of the Act during the Financial Year 2015-16. 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 Board's Report. In accordance with Section 134(3) (a) of the Companies Act, 2013, and Extract of Annual Return in the prescribed format is attached as ANNEXURE - 7 to the Board's Report. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in ANNEXURE - 8 to the Board's 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 Board's Report. GENERAL 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. Details relating to deposits covered under Chapter V of the Act. 2. Issue of equity shares with differential rights as to dividend, voting or otherwise. 3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report. 4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries. 5. 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. 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. HUMAN RESOURCES The Company has continuously adopted structures that help attract best external talent and promote internal talent to higher roles and responsibilities. Everest's people centric focus providing an open work environment fostering continuous improvement and development helped several employees realize their career aspiration during the year. INDUSTRIAL RELATIONS During the year, the industrial relations at all the works of the Company were cordial. ACKNOWLEDGEMENT Your Directors wish to place on record their gratitude to the Company's 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 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 Company's motivated team members from all Zones, Works and Offices. For and on behalf of the Board Manish Sanghi Managing Director Y. Srinivasa Rao Executive Director Delhi, 29th April, 2016 Place : Mumbai, |