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Directors Report of Everest Kanto Cylinder Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present the 36th Annual Report and the Audited Accounts for the financial year ended March 31, 2015. FINANCIAL RESULTS

The financial performance of the Company for the year ended March 31, 2015 is summarized below:

(Rs. in Lakh)

Particulars Standalone

2014-15 2013-14

Sales 19,720.60 22,137.65

Less: Excise Duty 2,015.28 2,126.27

Total Sales 17,705.32 20,011.38

Profit before Finance Charges, Depreciation, Provision for Doubtful Debts, Foreign Exchange Variation (net), Exceptional Items and Tax (775.34) (1,717.04)

Less:

- Finance Charges 5,010.54 4,855.59

- Depreciation 1,715.10 2,241.81

Profit before Foreign Exchange Variation, Exceptional Items and Taxation (7,500.98) (8,814.44)

Provision for Doubtful Debts 185.32 -

Foreign Exchange Variation - Gain / (Loss) (248.32) (18.78)

Profit before Exceptional Items and Taxation (7,934.62) (8,833.22)

Exceptional Items (1,980.00) -

Profit before Tax (9,914.62) (8,833.22)

(Less) / Add: Provision for Taxation

- Current Tax - -

- Deferred Tax - -

Profit for the year (9,913.09) (8,833.22)

Add: Prior period adjustments and Tax adjustments of earlier years (Net) - (1.53)

Net Profit (9,913.09) (8,833.22)

Transitional adjustment on account of Schedule II to Companies Act, 2013 (100.88) - (101.07)

Balance Brought Forward from Previous Years (6,366.07) 2,467.15

Balance Available for Appropriation (16,380.04) (6,366.07)

Appropriation:

Proposed Dividend - -

Provision for Dividend Tax - -

Transfer to Reserves - -

Balance Carried Forward (16,380.04) (6,366.07)

Basic and Diluted Earnings Per Share (9.25) (8.24) of ' 2 each

Particulars Consolidated

2014-15 2013-14

Sales 48,877.25 50,694.86

Less: Excise Duty 2,015.28 2,126.27

Total Sales 46,861.97 48,568.59

Profit before Finance Charges, Depreciation, Provision for Doubtful Debts, Foreign Exchange Variation (net), Exceptional Items and Tax 963.85 (1,769.82)

Less:

- Finance Charges 5,700.17 5,600.09

- Depreciation 7,054.95 6,829.90

Profit before Foreign Exchange Variation, Exceptional Items and Taxation (11,791.27) (14,199.81)

Provision for Doubtful Debts 2,197.39 1.34

Foreign Exchange Variation - Gain / (Loss) (241.80) 396.89

Profit before Exceptional Items and Taxation (9,835.68) (13,801.58)

Exceptional Items - -

Profit before Tax (9,835.68)~ (13,801.58)

(Less) / Add: Provision for Taxation

- Current Tax 1.00 20.51

- Deferred Tax (62.90) (5.89)

Profit for the year (9,773.78) (13,816.20)

Add: Prior period adjustments and Tax adjustments of earlier years (Net) (1.53) -

Net Profit (9,772.25) (13,816.20)

Transitional adjustment on account of Schedule II to Companies Act, 2013 (100.88) -

Balance Brought Forward from Previous Years 5,985.86 19,802.06

Balance Available for Appropriation (3,887.46) 5,985.86

Appropriation:

Proposed Dividend - -

Provision for Dividend Tax - -

Transfer to Reserves - -

Balance Carried Forward (3,887.46) 5,985.86

Basic and Diluted Earnings Per Share (9.12) (12.89) of ' 2 each

PERFORMANCE REVIEW

During the financial year 2014-15, there being no improvement in the economies, business conditions and environment, the demand and operations remained, like in the preceding three years, under stress across most business geographies and segments. Resultantly, the topline witnessed de-growth, with concomitant impact on the bottomline. The Finance Charges continued to remain a major contributor to the Net Loss during the financial year.

On standalone basis, for the financial year 2014-15, revenues at Rs. 19,720.60 Lakhs were lower by around 10.92% over the previous year's revenues of Rs. 22,137.65 Lakhs and Net Loss at Rs. 9,913.09 Lakhs saw increase by around 10.89% over the previous year's Net Loss of Rs. 8,833.22 Lakhs. The Net Loss for the financial year 2014-15 includes provision of Rs. 1,980.00 Lakhs made in respect of the value of the investments in two subsidiary companies. On consolidated basis, revenues for financial year 2014-15 at Rs. 48,877.25 Lakhs were lower by around 3.59% over the previous year's revenues of Rs. 50,694.86 Lakh and Net Loss at Rs. 9,772.25 Lakhs saw a decrease by around 29.27% over the previous year's Net Loss of Rs. 13,816.20 Lakhs.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Section 129 of Companies Act, 2013 and the Accounting Standard AS-21 on Consolidated Financial Statements, the Audited Consolidated Financial Statements are provided in the Annual Report. As a significant part of the Company's business is conducted through its subsidiaries, the Directors believe that the consolidated accounts provide a more accurate representation of the performance of the Company.

INTERNAL FINANCIAL CONTROLS

The Company has adequate Internal Financial Controls with reference to the financial statements which result in timely preparation of financial statements that provide true and fair view of the financial results and financial position. The Internal Financial Controls are being followed and adhered to.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the financial year 2014-15, as stipulated under Clause 49 of the Listing Agreements with the Stock Exchanges, is presented in a separate section forming part of the Annual Report.

DIVIDEND

The Directors have not proposed any dividend for the financial year in view of the loss during the year and absence of accumulated profits.

CREDIT RATING FROM CARE RATINGS

In respect of the borrowings of the Company, CARE Ratings have, during the year, downgraded the Long Term and Short Term Ratings, as under:

Sr Amount N0 Facility (Rs. in Rating Remarks Crore)

1. Long Term fund 295.17 CARE D Revised from based bank [Single D] CARE BB facilities (Term Loan) [Double B Plus]

2. Long Term fund 150.19 CARE C Revised from based bank facilities [Single C] CARE BB [Double B Plus]

3. Short Term Bank 60.92 CARE A4 Revised from Facilities [A Four] CARE A4 (Non Fund Based) [A Four Plus]

Total 506.28

DEPOSITS UNDER CHAPTER V OF COMPANIES ACT, 2013

The details of deposits falling under Chapter V of Companies Act, 2013 are as under:

Particulars Numbers Amount (Rs.)

As at the beginning of the year 2 368,190

Accepted during the year - -

Repaid / Settled during the year 2 368,190

As at the close of the year - -

No. of cases where default on repayment of deposits or interest thereon has been committed - -

No. of Deposits which are not in compliance with requirements of Chapter V of Companies Act, 2013 - -

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans given, guarantees provided and investments made have been duly disclosed in the financial statement.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of the Report.

SUBSIDIARIES

As on 31 st March, 2015, the Company had (a) three wholly owned overseas subsidiary companies, viz., EKC International FZE in Dubai, UAE, EKC Industries (Tianjin) Co. Ltd. in China and EKC Industries (Thailand) Co. Ltd. in Thailand, (b) three step down wholly owned overseas subsidiary companies, viz. EKC Hungary Kft in Hungary, CP Industries Holdings, Inc. in USA, EKC Europe GmbH in Germany and (c) one Indian subsidiary Company viz., Calcutta Compressions & Liquefaction Engineering Ltd.

During the year, there were no new subsidiaries and no Company which was a subsidiary as at the beginning of the year, ceased to be so.

The Current Corporate Structure is as under:

As provided for in section 129(3) of Companies Act, 2013, a statement containing the salient features of the financial statements of the subsidiaries in the prescribed Form AOC-1 is attached to the financial statements of the Company. The financial statements and the related information of the subsidiaries will be made available to any shareholder of the Company and of the subsidiaries who may be interested in obtaining the same at any point of time, and are also available at the Registered Offices of the Company and the subsidiary companies for inspection by any shareholder of the Company and of the subsidiaries. The Consolidated Financial Statements presented by the Company include the financial results of the subsidiary companies.

The financial results of the subsidiaries Company are uploaded on the website of the Company and the weblink thereto is http:// www.everestkanto.com/financialResults.aspx.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

As per the provisions of section 152 of Companies Act, 2013 and Article 137 of Article of Association of the Company, Mr. Puneet Khurana, Non-Executive Non-Independent Director, retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment as a Director, liable to retire by rotation at the ensuing Annual General Meeting. Brief Profile of Mr. Puneet Khurana is provided in the Report of Corporate Governance forming part of the Annual Report.

Mrs. Suman Khurana was appointed as an Additional Director of the Company on February 10, 2015 and has resigned as a Director of the Company on August 11, 2015.

Mrs. Uma Acharya was appointed as an Additional (Independent) Director of the Company on May 26, 2015 and holds office till the date of the Annual General Meeting. The Company has received a notice in writing from a Member, along with the requisite deposit, proposing the candidature of Mrs. Uma Acharya, as an Independent Director of the Company. Mrs. Uma Acharya has offered her candidature for appointment as an Independent Director, not liable to retire by rotation. Brief profile of Mrs. Uma Acharya is provided in the Report of Corporate Governance forming the part of Annual Report.

Mr. M. N. Sudhindra Rao was appointed as an Additional (Independent) Director of the Company on August 11, 2015 and holds office till the date of the Annual General Meeting. The Company has received a notice in writing from a Member, along with the requisite deposit, proposing the candidature of Mr. M. N. Sudhindra Rao, as an Independent Director of the Company. Mr. M. N. Sudhindra Rao has offered his candidature for appointment as an Independent Director, not liable to retire by rotation. Brief profile of Mr. M. N. Sudhindra Rao is provided in the Report of Corporate Governance forming the part of Annual Report.

Mr. Krishen Dev, Mr. Naresh Oberoi and Mr. Mohan Jayakar were appointed as Independent Directors under section 149 of the Companies Act, 2013, during the year. As Mr. Vyomesh Shah was not appointed as an Independent Director under section 149 of Companies Act, 2013, due to his pecuniary relationship with the Company during the two immediately preceding financial years and during the current financial year, his tenure as a Director of the Company ceased on March 31, 2015.

The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013 and Listing Agreements.

Ms. Kanika Sharma resigned as the Company Secretary with the effect from 27th February, 2015.

NUMBER OF BOARD MEETINGS DURING THE YEAR

During the year, six meetings of the Board of Directors were held on May 27, 2014, August 12, 2014, November 11, 2014, February 10, 2015, February 21, 2015 and March 14, 2015.

NOMINATION, REMUNERATION AND EVALUATION POLICY

The Company's policy on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under section 178(3) of Companies Act, 2013 has been specified in Nomination, Remuneration and Evaluation Policy approved by the Board. The Policy has been posted on the Company's website and the weblink thereto is http:// www.everestkanto.com/policies.html.

BOARD EVALUATION

The Board of Directors has adopted a Nomination, Remuneration and Evaluation Policy which, inter alia, provides for the manner in which annual evaluation will be made by the Board of its own performance and that of its Committees and individual Directors. The Independent Directors in their separate meeting held during the year evaluated the non-Independent Directors based on the criteria provided in the Policy. The Board of Directors in its meetings during the year and subsequent thereto evaluated its own performance and that of the Independent Directors.

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 annual accounts for the year ended March 31, 2015, the applicable accounting standards have been followed and there are no material departures;

ii) 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 on 31st March, 2015 and of the profit and loss of the company for the period ended on that date;

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the annual accounts on a going concern basis;

v) 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

vi) the Directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

AUDIT COMMITTEE

The details pertaining to composition of the Audit Committee are included in the Corporate Governance Report, which forms part of this Report.

AUDITORS

At the Annual General Meeting held in the year 2014, M/s. Walker . & Co LLP, Chartered Accountants, were appointed as the Statutory Auditors of the Company to hold office from the conclusion of that Annual General Meeting till the conclusion of the fourth consecutive Annual General Meeting to be held in the year 2018, subject to ratification by the shareholders at every Annual General Meeting. Accordingly, their appointment will be put up for ratification by the shareholders at the ensuing Annual General Meeting.

M/s. Arun Arora & Co., Chartered Accountants, Branch Auditors, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a letter from M/s. Arun Arora & Co. to the effect that their re-appointment, if made, from the conclusion of the ensuing Annual General Meeting until the conclusion of next Annual General Meeting, would be within the limits prescribed under Section 141 (3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment within the meaning of Section 141 of the said Act.

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, 2013, for conducting audit of cost records for the financial year 2014-15. The Cost Auditor will submit his Report to the Board for its review and examination, which will then be filed with the Central Government within the prescribed time.

On the recommendation of the Audit Committee, the Board of Directors has appointed Mr. Vinayak B. Kulkarni, Cost Accountant, (Membership No. 28559) as the Cost Auditor of the Company for the financial year 2015-16 on a remuneration recommended by the Audit Committee. As required under the Act, the remuneration will be put up for ratification by the members at the ensuing Annual General Meeting.

SECRETARIAL AUDITOR

The Board of Directors has appointed Aashish K. Bhatt & Associates, Practicing Company Secretaries, as the Secretarial Auditor under section 204 of the Companies Act, 2013, for conducting Secretarial Audit for the financial year 2014-15. The Report of the Secretarial Auditor forms part of this Report as Annexure 1.

STATUTORY AUDITOR'S QUALIFICATIONS' EXPLANATION

As regards the qualification by the Auditors in their Report on the Standalone accounts regarding the provision of Rs. 15.00 Crore made by the Company towards the diminution in the value of the investment of Rs. 69.25 Crores by the Company in its subsidiary in China, namely, EKC Industries (Tianjin) Company Limited, as against significant accumulated losses of the subsidiary and substantial erosion of its net worth as on March 31,2015, on the basis that in the absence of sufficient appropriate evidence, they are unable to comment upon the carrying value of the investment and the consequential impact, if any, on the accompanying financial statements, the Board of Directors is of the view, on holistic consideration and assessment of the relevant factors, such as, the long term nature of the investment, future business prospects in the markets in which the subsidiary operates, expected appreciation in the fair value of the assets of the subsidiary, etc., the provision of Rs. 15.00 Crore made by the Company is sufficient.

As regards the delay in transferring of the amount of Rs. 0.66 lakhs required to be transferred by the Company by 8th August, 2014 to the Investor Education and Protection Fund, the same happened due to oversight. The amount has since then been transferred on 28th May, 2015.

SECRETARIAL AUDITOR'S QUALIFICATION'S EXPLANATION

As regards the delay in transferring of the amount of Rs. 0.66 lakhs required to be transferred by the Company by 8th August, 2014 to the Investor Education and Protection Fund, the same happened due to oversight. The amount has since then been transferred on 28th May, 2015.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under section 134(3)(m) of the Companies Act, 2013, are provided in Annexure 2 to this Report.

TRANSACTIONS WITH RELATED PARTIES

None of the transactions with the related parties fall under the scope of Section 188(1) of the Companies Act, 2013. Information on the transactions with the related parties under Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure 3 in Form AOC-2 and forms the part of this Report.

All compliances with Related Party Transactions as provided in the Companies Act, 2013 and Listing Agreements have been done.

The policy on Related Party Transaction framed under Listing Agreements is available on Company's website and the weblink thereto is http://www.everestkanto.com/policies.html.

CORPORATE GOVERNANCE

The Company is committed to achieving and maintaining the highest standards of Corporate Governance and places high emphasis on business ethics. Pursuant to Clause 49 of the Listing Agreements, the Report on Corporate Governance and the Certificate from a Practising Company Secretary on the Report as stipulated under Clause 49 of the Listing Agreements form part of the Annual Report.

RISK MANAGEMENT

The Company has adopted a Risk Management Policy which lays down the framework to define, assess, monitor and mitigate the business, operational, financial and other risks associated with the business of the Company.

CORPORATE SOCIAL RESPONSIBILITY

As the provisions of section 135 of Companies Act, 2013 dealing with Corporate Social Responsibility are not applicable to the Company during the financial year, the Company has 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 the Companies (Management and Administration) Rules, 2014, extract of the Annual Return of the Company 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 of Managerial Personnel) Rules, 2014, the details are as under:

(a) Ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2014-15:

Median Ratio to Name of Designation Remuneration remuneration median Directors of Directors of Employees remuneration

Mr. P. K. Chairman Nil 1,87,902 - Khurana & Managing Director

Mrs. Suman Non-Executive 20,000 1,87,902 0.11 Khurana** Additional Director

Mr. Pushkar Non-Executive Nil 1,87,902 - Khurana Director

Mr. Puneet Non-Executive Nil 1,87,902 - Khurana Director

Mr. Krishen Independent 1,80,000 1,87,902 0.96 Dev Director

Mr. Mohan Independent 1,10,000 1,87,902 0.59 Jayakar Director

Mr. Naresh Independent 1,80,000 1,87,902 0.96 Oberoi Director

Mr. Vyomesh Independent 30,000 1,87,902 0.16 Shah Director

* Remuneration to directors during the financial year (and also in the previous financial year) comprises solely of sitting fees for attending the meetings of Board of Directors and of the Committees thereof

** Mrs. Suman Khurana was appointed as Director on February 10, 2015.

(b) Percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year 2014-15:

Director, Chief % increase Financial Officer, in Chief Executive Designation remuneration Officer and in financial Company Secretary year

Mr. P K. Khurana Chairman & Managing Director 0.00

Mrs. Suman Khurana* Non-Executive Additional Director 100.00

Mr. Pushkar Khurana Non-Executive Director 0.00

Mr. Puneet Khurana Non-Executive Director 0.00

Mr. Krishen Dev Independent Director 28.57

Mr. Mohan Jayakar Independent Director 120.00

Mr. Naresh Oberoi Independent Director 100.00

Mr. Vyomesh Shah Independent Director 0.00

Mr. Vipin Chandok Chief Financial Officer 6.88

Ms. Kanika Sharma** Company Secretary 9.87

* Mrs. Suman Khurana was appointed as Director on February 10, 2015.

** Ms. Kanika Sharma has resigned as the Company Secretary with the effect from February 27, 2015 .

(c) Percentage increase in the median remuneration of employees in the financial year 2014-15: 9.97%.

(d) Number of permanent employees on the rolls of Company: 372.

(e) Explanation on the relationship between average increase in remuneration and Company performance:

Particulars Amount

Increase in Remuneration in financial year 2014-15 (Rs. in Lakhs) 39.68

Increase / (Decrease) in Revenue (Rs. in Lakhs) (2,417.05)

Increase in Remuneration as % of Increase / (Decrease) in Revenue *Not Meaningful

Increase / (Decrease) in Profit before tax (PBT) (Rs. in Lakhs) (1,081.40)

Increase in Remuneration as % of Increase / (Decrease) in PBT *Not Meaningful

* Due to the Decrease in Remuneration and Decrease in Profit before Tax in FY 2014-15, the percentage comparison is not meaningful.

(f) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company:

Particulars Amount

Aggregate remuneration of Key Managerial Personnel (KMP) in 51.97 financial year 2014-15 (Rs. in Lakhs)

Revenue (Rs. in Lakhs) 19,720.60

Remuneration of KMP (as % of revenue) 0.26

Profit before tax (PBT) (Rs. in Lakhs) (9,914.62)

Remuneration of KMP (as % of PBT) *Not Meaningful

* 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 At the end of the year of the year - April 1, 2014 - March 31, 2015

Market Capitalization

NSE (Rs. in Lakhs) 17,573.86 9,965.66

BSE (Rs. in Lakhs) 17,573.86 9,944.23

Price Earning Ratio *Not Meaningful *Not Meaningful

* As the EPS of the Company is negative at the beginning of and at the end of the financial year ended March 31, 2015, the Price Earning Ratio of the Company cannot be ascertained.

(h) Percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer:

Particulars March 31, IPO* Adjusted % 2015 IPO** Change

Market Price (BSE) Rs. 9.28 Rs. 160 Rs. 32 (71.00)

Market Price (NSE) Rs. 9.30 Rs.160 Rs. 32 (70.94)

* Face value of Rs. 10/- per share.

** Face value of Rs. 2/- per share after share split.

(i) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The average percentile increase in the salaries of employees other than the managerial personnel in the financial year 2014-15 is 4.28% whereas the percentile increase in the managerial remuneration* during the year is 40.54%.

* The managerial remuneration comprises solely of the sitting fees paid to the Directors for attending the meeting of the Board of Directors and of the Committees thereof.

(j) Comparison of the each remuneration of the Key Managerial Personnel against the performance of the Company:

Particulars Mr. P. K. Mr. Vipin Mrs. Kanika Khurana, Chandok, Sharma, Managing Chief Financial Company Director Officer Secretary

Remuneration in FY 2014-15 (Rs.in Lakhs) Nil 40.40 11.58

Revenue (Rs.in Lakhs) 19,720.60 19,720.60 19,720.60

Remuneration as % of revenue - 0.20 0.06

Profit before tax (PBT) (Rs. in Lakhs) (9,914.62) (9,914.62) (9,914.62)

Remuneration as *Not *Not % of PBT - Meaningful Meaningful

* In the view of negative profit before tax (PBT)

(k) Ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year:

The remuneration of the two highest paid Directors during the financial year 2014-15 is ' 180,000 each (being sitting fees only). As there are 190 employees who are not directors but received remuneration during financial year 2014-15 in excess of Rs. 180,000, 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 average remuneration of these 190 employees is 0.48.

(l) Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms that the remuneration is as per the remuneration policy of the Company.

(m) Name of employee of Company, who were employed throughout the financial year or for part of year, was in receipt of remuneration for that year which, in the aggregate, was not less than Sixty Lakh Rupees per financial year or Five Lakh Rupees per month:

None.

(n) Name of employee of Company, who employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the Managing Director or Whole- Time Director or Manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the Company:

None

DISCLOSURE REQUIREMENTS

Following policies are posted on the website of the Company and weblink thereto is http://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

On the SEBI (Prohibition of Insider Trading) Regulations, 2015 coming into effect on May 15, 2015, the Company has adopted the Policies on Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information and Code of Conduct for Prevention of Insider Trading and Code of Corporate Disclosure Practices and Policies, which have been posted on the website of the Company and the weblink thereto is http://www.everestkanto.com/policies.html.

ACKNOWLEDGEMENT AND APPRECIATION

The Directors would like to express their appreciation for the assistance, support and co-operation received from the banks, Government authorities, customers, vendors and members during the year under review. The Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company globally.

For and on behalf of the Board

P. K. Khurana Mumbai Chairman & Managing Director August 11, 2015 DIN: 00004050


Mar 31, 2014

Dear Shareholders,

The Directors are pleased to present the 35th Annual Report and the Audited Accounts for the financial year ended March 31, 2014.

FINANCIAL RESULTS

The financial performance of the Company for the year ended March 31, 2014 is summarized below:

(Rs. in Lakh)

Particulars Standalone Consolidated

2013-14 2012-13 2013-14 2012-13

Sales 22,137.65 26,770.20 50,694.86 55,849.48

Less: Excise Duty 2,126.27 2,711.19 2,126.27 2,711.19

Total Sales 20,011.38 24,059.01 48,568.59 53,138.29

Profit before Finance Charges, Depreciation, Provision for Doubtful Debts, Foreign Exchange Variation (net) and Tax (1,717.04) 718.15 (1,769.82) 3,533.17

Less:

- Finance Charges 4,855.59 3,318.72 5,600.09 3,817.90

- Depreciation 2,241.81 2,254.32 6,829.90 6,963.06

Profit before Foreign Exchange Variation and Taxation (8,814.44) (4854.89> (14,199.81)(7,247.79)

Provision for Doubtful Debts - - 1.34 (4,026.74)

Foreign Exchange Variation - Gain / (Loss) (18.78) (985.56) 396.89 (1,027.99)

Profit before Tax (8,833.22) (5,840.45)(13,801.58>(12,302.52)

(Less) / Add: Provision for Taxation

- Current Tax - - 20.51 -

- Deferred Tax - 1,121.08 (5.89) 839.74

Profit for the year (8,833.22) (4,719.37) (13,816.20)(13,142.26)

Add: Prior period adjustments and Tax adjustments of earlier years (net) - 30.37 - 39.04

Net Profit (8,833.22) (4,749.74) (13,816.20)(13,181.30)

Balance Brought Forward from Previous Years 2,467.15 7,467.63 19,802.06 33,234.10

Balance Available for Appropriation (6,366.07) 2,717.89 5,985.86 20,052.80 Appropriation:

Proposed Dividend - 214.32 - 214.32

Provision for Dividend Tax - 36.42 - 36.42

Balance Carried Forward (6,366.07) 2,467.15 5,985.86 19,802.06

Basic and Diluted Earnings Per Share of Rs. 2 each (8.24) (4.43) (12.89) (12.30)

PERFORMANCE REVIEW

During the financial year 2013-14, the business environment and conditions continued, like past couple of years, to remain difficult and challenging, impacting the topline as well as the bottom line, across business segments and geographies. The subdued performance of Indian economy in general as well as its particular segments of importance to your Company''s business, namely, automotive, industrial and gas segments further slowed down the demand and put pressure on the margins.

On standalone basis, for FY2013-14, revenues at Rs. 20,011.38 Lakh were lower by around 17% over the previous year''s revenues of Rs. 24,059.01 Lakh and Net Loss at Rs. 8,833.22 Lakh saw increase by around 86% over the previous year''s net loss of Rs. 4,749.74 Lakh. On consolidated basis, revenues at Rs. 48,568.59 Lakh were lower by around 9% over the previous year''s revenues of Rs. 53,138.29 Lakh and Net Loss at Rs. 13,816.20 Lakh saw increase by around 5% over the previous year''s net loss of Rs. 13,181.30 Lakh.

DIVIDEND

The Directors have not proposed any dividend for the financial year in view of the loss during the year and inadequacy of accumulated profits.

SUBSIDIARIES

As on March 31, 2014, the Company had (a) three wholly owned overseas subsidiary companies, viz., EKC International FZE in Dubai, UAE, EKC Industries (Tianjin) Co. Ltd. in China and EKC Industries (Thailand) Co. Ltd. in Thailand (b) three step down wholly owned overseas subsidiary companies, viz. EKC Hungary Kft in Hungary, CP Industries Holdings, Inc. in USA and EKC Europe GmbH in Germany and (c) one Indian subsidiary Company viz., Calcutta Compressions & Liquefaction Engineering Ltd.

The Current Corporate Structure is as under:

Pursuant to the provision of Section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs, Government of India vide its circular dated February 8, 2011 has granted general exemption from attaching the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies with the Balance Sheet of the Company. Accordingly, the Board of Directors of the Company has decided to avail of the exemption. As required under the circular, a Statement containing the brief financial details of the subsidiaries for the financial year ended March 31, 2014 is included in the Annual Report. The annual accounts and the related detailed information of the subsidiaries will be made available to any shareholder of the Company and of the subsidiaries who may be interested in obtaining the same at any point of time, and are also available at the registered offices of the Company and the subsidiary companies for inspection by any shareholder of the Company and of the subsidiaries. The Consolidated Financial Statements presented by the Company include the financial results of the subsidiary companies.

FIXED DEPOSITS

The Company has not accepted any fixed deposits during the year under review.

DIRECTORS

Mr. Gurdeep Singh, an Independent and Non-Executive Director of your Company, resigned from the Board of Directors with effect from August 16, 2013 on account of personal commitments.

Mr. Varun Bery, a Non-Independent and Non-Executive Director of your Company resigned from the Board of Directors with effect from August 27, 2013 as TVG India Investment Holdings Limited, a shareholder of your Company who he was representing, withdrew his nomination.

TVG India Investment Holdings Limited nominated Mr. Hon Cheong Lam in place of Mr. Varun Bery as a Director on the Board of Directors of the Company from August 27, 2013. Pursuant to Section 260 of the Companies Act, 1956 [corresponding to Section 161(1) of the Companies Act, 2013] and Article 125 of the Articles of Association of the Company, Mr. Hon Cheong Lam was appointed as an Additional Director of your Company. Mr. Hon Cheong Lam has since resigned on May 20, 2014 from the Board of Directors of the Company.

The Independent Directors of the Company, namely, Mr. Mohan Jayakar, Mr. Naresh Oberoi, Mr. Vyomesh Shah and Mr. Krishen Dev were appointed as directors liable to retire by rotation under the provisions of the erstwhile Companies Act, 1956. The Board of Directors is of the opinion that Independent Directors so appointed would continue to serve the term that was ascertained at the time of appointment as per the resolutions pursuant to which they were appointed. Therefore, it stands to reason that only those Independent Directors, namely Mr. Mohan Jayakar and Mr. Naresh Oberoi, who will complete their present terms at the ensuing Annual General Meeting, being eligible and seeking re-appointment, be considered by the shareholders for re-appointment for a term of upto March 31, 2019.

The two Independent Directors, namely Mr. Krishen Dev and Mr. Vyomesh Shah, who do not complete their term at the ensuing Annual General Meeting, will continue to hold office till the expiry of their term (based on retirement period calculation) and thereafter would be eligible for re-appointment for a fixed term in accordance with the Companies Act, 2013 and the amended Listing Agreement.

Brief resume of the Directors proposed to be re-appointed and the nature of their expertise in specific functional areas and the names of public limited companies in which they hold directorships and memberships/chairmanships of Board Committees, as stipulated under Clause 49 of Listing Agreements with the Stock Exchanges in India, are provided in the Report on Corporate Governance forming part of the Annual Report.

CREDIT RATING FROM CRISIL

In respect of the borrowings of your Company, CARE has, during the year, provided the Long Term and Short Term ratings, as under:

(a) Long Term Rating:

Date of Rating / Re-Rating Rating

May 21, 2013 (Initial) CARE BBB- March 4, 2014 From CARE BBB- to CARE BB

(b) Short Term Rating:

Date of Rating / Re-Rating Rating

May 21, 2013 (Initial) CARE A3

March 4, 2014 From CARE A3 to CARE A4

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is presented in a separate section forming part of the Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts for the year ended March 31, 2014, the applicable accounting standards have been followed and there are no material departures from the same;

(ii) 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

March 31, 2014 and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts of the Company on a going concern basis.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements, the Audited Consolidated Financial Statements are provided in the Annual Report. As a significant part of the Company''s business is conducted through its subsidiaries, the Directors believe that the consolidated accounts provide a more accurate representation of the performance of the Company.

AUDITORS

M/s. Walker Chandiok & Co LLP, Chartered Accountants, Statutory Auditors, (formely Walker, Chandiok & Co.) and M/s. Arun Arora & Co., Chartered Accountants, Branch Auditors, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received a letter from M/s. Walker Chandiok & Co LLP, to the effect that their re-appointment, if made, from the conclusion of the ensuing Annual General Meeting until the conclusion of the fourth consecutive Annual General Meeting of the Company, to be held thereafter, would be within the limits prescribed under Section 139 of the Companies Act, 2013 and that they are not disqualified for re-appointment within the meaning of Section 141 of the said Act.

The Company has received a letter from M/s. Arun Arora & Co. to the effect that their re-appointment, if made, from the conclusion of the ensuing Annual General Meeting until the conclusion of next Annual General Meeting, would be within the limits prescribed under Section 143 of the Companies Act, 2013 and that they are not disqualified for re-appointment within the meaning of Section 141 of the said Act.

COST AUDITORS

The Board of Directors has appointed M/s. Vinayak B. Kulkarni, Cost Accountant, as the Cost Auditor under section 233B of the Companies Act, 1956, for conducting cost audit for the financial year 2013-14. The Cost Auditor will submit his Report to the Board for approval, which will then be filed with the Central Government before September 30, 2014.

On the recommendation of the Audit Committee, the Board of Directors has appointed M/s. V. R. & Associates, Cost Accountant, (Firm Registration No. 000516) (formely M/s. Vinayak B. Kulkarni,

Cost Accountant) as the Cost Auditors of the Company for the financial year 2014-15 under the provisions of the Companies Act, 2013. As required under the Act, the remuneration shall be determined by the members at the ensuing Annual General Meeting.

CORPORATE GOVERNANCE

The Company is committed to achieving and maintaining the highest standards of Corporate Governance and places high emphasis on business ethics. Pursuant to Clause 49 of the Listing Agreement, a Management Discussion and Analysis Report and the Report on Corporate Governance form part of the Annual Report.

The requisite Certificate from a practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 also forms part of the Annual Report.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the particulars of employees are set out in annexure to this Report.

However, having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are provided as an Annexure to this Report.

ACKNOWLEDGEMENT AND APPRECIATION

The Directors would like to express their appreciation for the assistance, support and co-operation received from the banks, Government authorities, customers, vendors and members during the year under review. The Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company globally.

For and on behalf of the Board

Mumbai P. K. Khurana

May 27, 2014 Chairman & Managing Director


Mar 31, 2013

Dear Shareholders,

The Directors are pleased to present the 34th Annual Report and the Audited Accounts for the financial year ended March 31, 2013.

FINANCIAL RESULTS

The financial performance of the Company for the year ended March 31, 2013 is summarized below:

(Rs.in Lakh)

Particulars Standalone Consolidated 2012-13 2011-12 2012-13 2011-12

Sales 26,770.20 33,106.08 55,849.48 69,548.56

Less: Excise Duty 2,711.19 2,600.92 2,711.19 2,600.92

Total Sales 24,059.01 30,505.16 53,138.29 66,947.64

Profit before Finance Charges, Depreciation, Provision for

Doubtful Debts, Foreign Exchange Variation (net) and Tax 718.15 4,715.84 3,533.17 10,511.81

Less: - Finance Charges 3,318.72 1,255.96 3,817.90 1,777.72

- Depreciation 2,254.32 2,387.10 6,963.06 6,680.77

Profit before Foreign Exchange Variation and Taxation (4,854.89) 1,072.78 (7,247.79) 2,053.32

Provision for Doubtful Debts (4,026.74) (151.27)

Foreign Exchange Variation Gain / (Loss) (985.56) (3,060.58) (1,027.99) (2,747.00)

Profit before Tax (5,840.45) (1,987.80) (12,302.52) (844.95) (Less) /

Add: Provision for Taxation

Current Tax (2.09)

- Deferred Tax / Credit (1,121.08) (266.15) 839.74 (815.66)

Profit for the year (4,719.37) (1,721.65) (13,142.26) (31.38)

Add: Prior period adjustments and Tax adjustments of earlier years (net) 30.37 (500.00) 39.04 (500.00)

Net Profit (4,749.74) (1,221.65) (13,181.30) 468.62

Minority Interest Loss Absorbed (69.49) (37.70)

Balance Brought Forward from Previous Years 7,467.63 9,000.63 33,234.10 33,114.53

Balance Available for Appropriation 2,717.89 7,778.98 19,983.31 33,545.45

Appropriation:

Proposed Dividend 214.32 267.89 214.32 267.89

Provision for Dividend Tax 36.42 43.46 36.42 43.46

Balance Carried Forward 2,467.15 7,467.63 19,732.57 33,234.10

Basic and Diluted Earnings Per Share of Rs. 2 each (4.43) (1.14) (12.30) 0.44

PERFORMANCE REVIEW

The financial year 2012-13 continued to witness difficult and competitive business scenario and conditions across all business segments and geographies of the Company, in tune with the gradual slow-down of the Indian economy, quarter on quarter, in general, and the automobile sector in particular, resulting in lower sales and margins of the Company on standalone basis. The subsidiaries of the Company operating in different geographies across the globe witnessed similar situation and conditions due to various factors impacting each of them. The persistent depreciation during the year of the Indian Rupee vis-à-vis the US Dollars too added to losses during the first half of the financial year.

On standalone basis, for FY 2012-13, revenues at Rs. 24059.01 Lakh were lower by around 21% over the previous year''s revenues of Rs. 30,505.16 Lakh and Net Loss at Rs. (4,749.74) Lakh was increase by around 289% over the previous year''s net profit of Rs. (1,221.65) Lakh. On consolidated basis, revenues at Rs. 53,138.29 Lakh were lower by around 21% over the previous year''s revenues of Rs. 66,947.64 Lakh and Net Loss at Rs. (13,182.30) Lakh was increase by around 2913% over the previous year''s net profit of Rs. 468.62 Lakh. The Standalone Net Loss is after considering Foreign Currency Loss of Rs. 985.56 Lakh and the Consolidated Net Profit is after considering Foreign Currency Losses of Rs. 1,027.99 Lakh and Provision for Doubtful Debts of Rs. 4,026.74 Lakh.

DIVIDEND

The Directors have recommended a dividend of Rs. 0.20 per Equity Share of Rs. 2 each (10%) (last year Rs. 0.25 per Equity Share) for the financial year ended March 31, 2013, amounting to Rs. 250.74 Lakh (inclusive of dividend tax of Rs. 36.42 Lakh).

FINANCE

The Foreign Currency Convertible Bonds (FCCBs), having principal value of US$ 35 Million, that were issued by the Company in 2007 fell due in October 2012. On maturity of the bonds, as per the terms of the issue thereof, the Company redeemed the FCCBs in full with premium of US$ 14.98 Million. The redemption of the FCCBs was entirely financed from long term loan from a bank.

SUBSIDIARIES

As on March 31, 2013, the Company had (a) three wholly owned overseas subsidiary companies, viz., EKC International FZE in Dubai, UAE, EKC Industries (Tianjin) Co. Ltd. in China and EKC

Industries (Thailand) Co. Ltd. in Thailand, (b) three step down wholly owned overseas subsidiary companies, viz. EKC Hungary Kft in Hungary, CP Industries Holdings, Inc. in USA, EKC Europe GmbH in Germany and (c) one Indian subsidiary Company viz., Calcutta Compressions & Liquefaction Engineering Ltd.

The Current Corporate Structure is as under:

Pursuant to the provision of Section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs, Government of India vide its circular dated February 8, 2011 has granted general exemption from attaching the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies with the Balance Sheet of the Company. Accordingly, the Board of Directors of the Company has decided to avail of the exemption. As required under the circular, a Statement containing the brief financial details of the subsidiaries for the financial year ended March 31, 2013 is included in the Annual Report. The annual accounts of the subsidiaries and the related detailed information will be made available to any shareholder of the Company and of the subsidiaries who may be interested in obtaining the same at any point of time and are also available at the registered office of the Company and that of the respective subsidiary companies for inspection by any shareholder of the Company and of the subsidiaries. The Consolidated Financial Statements presented by the Company include the financial results of the subsidiary companies.

FIXED DEPOSITS

The Company has not accepted any fixed deposits during the year under review.

DIRECTORS

Mr. Puneet Khurana, on moving to China to look after the day to day operations of EKC Industries (Tianjin) Company Limited, resigned as the Whole-Time Director of the Company with effect from September 30, 2012. He continues as a Non-Executive Director of the Company.

Mr. P. M. Samvatsar, Whole-Time Director of the Company, on account of personal commitments, resigned from the Board of Directors of the Company w.e.f. March 1, 2013.

As per the provisions of Article 137 of the Articles of Association of the Company, Mr. Pushkar Khurana and Mr. Varun Bery retire by rotation at the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment as Directors at the ensuing Annual General Meeting. The Board of Directors recommends their re-appointment by the shareholders at the ensuing Annual General Meeting.

Brief resume of the Directors proposed to be re-appointed, nature of their expertise in specific functional areas and names of public limited companies in which they hold directorships and memberships / chairmanships of Board Committees, as stipulated under Clause 49 of Listing Agreements with the Stock Exchanges in India, are provided in the Report on Corporate Governance forming part of the Annual Report.

CREDIT RATING FROM CRISIL

In respect of the borrowings of the Company, CRISIL has, during the year, revised the Long Term and Short Term ratings, as under:

(a) Long Term Rating:

Date of Revision Rating from Rating to

May 10, 2012 Crisil A / Stable Crisil A / Stable

August 29, 2012 Crisil A / Stable Crisil BBB / Negative

October 1, 2012 Crisil BBB / Negative Crisil BBB- / Negative

November 19, 2012 Crisil BBB- / Negative Crisil BBB- / Stable

(b) Short Term Rating:

Date of Revision Rating from Rating to

May 10, 2012 Reaffirmation as Crisil A1

August 29, 2012 Crisil A1 Crisil A2

October 1, 2012 Crisil A2 Crisil A3

November 19, 2012 Reaffirmation as Crisil A3

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts for the year ended March 31, 2013, the applicable accounting standards have been followed and there are no material departures from the same;

(ii) 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 March 31, 2013 and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts of the Company on a ''going concern'' basis.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements, the Audited Consolidated Financial Statements are provided in the Annual Report. As a significant part of the Company''s business is conducted through its subsidiaries, the Directors believe that the consolidated accounts provide a more accurate representation of the performance of the Company.

AUDITORS

M/s Dalal & Shah, Chartered Accountants, Statutory Auditors, and M/s Arun Arora & Co., Chartered Accountants, Branch Auditors, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

M/s. Dalal & Shah have intimated that they would not seek reappointment as the statutory auditors at the ensuing Annual General Meeting. It is proposed to appoint M/s. Walker, Chandiok & Co., Chartered Accountants, as the statutory auditors in their place. The Company has received a letter from Walker, Chandiok & Co., to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for re-appointment within the meaning of Section 226 of the said Act.

The Company has received a letter from M/s. Arun Arora & Co. to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for re-appointment within the meaning of Section 226 of the said Act.

COST AUDITORS

The Company has appointed Mr. Vinayak B. Kulkarni, Cost Accountants, as Cost Auditors under section 233B of the Companies Act, 1956, for conducting cost audit for the financial year 2013-14. The Cost Auditors have submitted their Cost Audit Report for the financial year 2011-2012, which has also been filed with Central Government on February 26, 2013.

CORPORATE GOVERNANCE

The Company is committed to achieving and maintaining the highest standards of Corporate Governance and places high emphasis on business ethics. Pursuant to Clause 49 of the Listing Agreement, a Management Discussion and Analysis Report and the Report on Corporate Governance form part of the Annual Report.

The requisite Certificate from a practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 also forms part of the Annual Report.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the particulars of employees are set out in annexure to this Report.

However, having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid

information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are provided as an Annexure to this Report.

ACKNOWLEDGEMENT AND APPRECIATION

The Directors would like to express their appreciation for the assistance, support and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. The Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company globally.

For and on behalf of the Board

Mumbai P.K. Khurana

May 30, 2013 Chairman & Managing Director


Mar 31, 2012

The Directors are pleased to presents the 33rd Annual Report and the Audited Accounts for the financial year ended March 31, 2012.

FINANCIAL RESULTS

The financial performance of the Company for the year ended March 31, 2012 is summarized below:

(Rs in Lakh)

Particulars Standalone Consolidated

2011-12 2010-11 2011-12 2010-11

Sales 33,106.08 39,993.83 69,548.56 79,997.92 Less: Excise Duty 2,600.92 2,523.50 2,600.92 2,523.50

Total Sales 30,505.16 37,470.33 66,947.64 77,474.42 Profit before Finance Charges, Depreciation,

Foreign Exchange Variation 4,715.84 6,190.12 10,360.54 14,402.24 Less:

- Finance Charges 1,255.96 314.84 1,777.72 822.72

- Depreciation 2,387.10 2,419.02 6,680.77 6,389.29

Profit before Foreign Exchange Variation and Taxation 1,072.78 3,456.26 1,902.05 7,190.23

Foreign Exchange Variation - Gain / (Loss) (3,060.58) 91.46 (2,747.00) 268.02

Profit before Tax (1,987.80) 3,547.72 (844.95) 7,458.25

(Less) / Add: Provision for Taxation

- Current Tax - - (1,330.00) (2.09) (1,330.00)

- Deferred Tax 266.15 28.33 815.66 892.66

Profit for the year (1,721.65) 2,246.05 (31.38) 7,020.91

Add: Prior period adjustments and Tax adjustments of earlier years (net) (500.00) 5.70 (500.00) 5.70

Minority Interest - - - 24.45

Net Profit (1,221.65) 2,251.75 468.62 7,051.06

Balance brought forward from previous year 9,000.63 9,707.17 33,114.53 29,021.76

Balance Available for appropriation 7,778.98 11,958.92 33,583.15 36,072.82 Appropriations

Proposed Dividend 267.89 1,607.37 267.89 1,607.37

Provision for Dividend Tax 43.46 266.96 43.46 266.96

Dividend and Dividend Tax for the year 2009-10 - 83.96 - 83.96

Transfer to General Reserve - 1,000.00 - 1,000.00

Balance carried forward 7,467.63 9,000.63 33,271.80 33,114.53 Basic and Diluted earnings per share of

Rs2 each before excess depreciation* (1.14) 2.13 0.44 6.66

* Calculated on weighted average number of shares.

PERFORMANCE REVIEW

The financial year 2011-12 turned out to be a difficult year for some segments and geographies of the group, especially from the second quarter. The situation was compounded by the sudden and sharp depreciation of the Rupee against the US Dollar and the adverse geo-political situation in some of the relevant markets.

On consolidated basis for financial year 2011-12, revenues at Rs 66,947.64 Lakhs were lower by around 13.59% over the previous year's revenues of Rs 77,474.42 Lakhs. Net profit at Rs 468.62 Lakhs was lower by around 93.35% over the previous year's net profit of Rs 7,051.06 Lakhs. During the year, the consolidated sales volume of cylinders was 743,271 numbers as against 884,339 numbers in the previous year. The Standalone Net Loss is after considering Foreign Currency Loss of Rs 3,060.58 Lakhs and the Consolidated Net Profit is after considering Foreign Currency Losses of Rs 2,747 Lakhs mainly incurred by Everest Kanto Cylinder Limited.

DIVIDEND

Your Directors have recommended a dividend of Rs 0.25 per Equity Share of Rs 2 each (12.50%) (last year Rs 1.50 per Equity Share) for the financial year ended March 31, 2012, amounting to Rs 311.35 Lakhs (inclusive of dividend tax of Rs 43.46 Lakhs).

SUBSIDIARIES

During the year EKC International FZE, a wholly owned subsidiary of the Company, set up a wholly owned subsidiary in Germany, EKC Europe GmbH. The German subsidiary will be engaged in technology development and in marketing of the products of the other group companies in Europe. Mr. Pushkar Khurana, Non- Executive Director of the Company and Managing Director of EKC International FZE has been appointed as the Managing Director of EKC Europe GmbH.

As on March 31, 2012, the Company had three wholly owned overseas subsidiary companies, viz., EKC International FZE in Dubai, UAE, EKC Industries (Tianjin) Co. Ltd. in China and EKC Industries (Thailand) Co. Ltd. in Thailand and three step down wholly owned overseas subsidiary companies, viz. EKC Hungary of in Hungary, CP Industries Holdings, Inc. in USA, EKC Europe GmbH in Germany and one Indian subsidiary Company viz., Calcutta Compressions & Liquefaction Engineering Ltd.

The Current Corporate Structure is as under:

Pursuant to the provision of Section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs, Government of India vide its circular dated February 8, 2011 has granted general exemption from attaching the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies with the Balance Sheet of the Company. Accordingly, the Board of Directors of the Company has decided to avail of the exemption. As required under the circular, a Statement containing the brief financial details of the subsidiaries for the financial year ended March 31, 2012 is included in the Annual Report. The annual accounts of the subsidiaries and the related detailed information will be made available to any shareholder of the Company and of the subsidiaries who may be interested in obtaining the same at any point of time and are also available at the registered office of the Company and that of the respective subsidiary companies for inspection by any shareholder of the Company and of the subsidiaries. The Consolidated Financial Statements presented by the Company include the financial results of the subsidiary companies.

FIXED DEPOSITS

The Company has not accepted any fixed deposits during the year under review.

DIRECTORS

Mr. Akash Mehta who had been appointed as an alternate Director to Mr. Varun Bery w.e.f. January 31, 2011 ceased to be an alternate Director to Mr. Varun Bery w.e.f. May 13, 2011.

Mr. Hon Cheong Lam has been appointed as an alternate director to Mr. Varun Bery w.e.f. May 27, 2011 also ceased to be an alternate director to Mr. Varun Bery w.e.f. August 7, 2011.

Mr. Shailesh Haribhakti, Independent Director of the Company, on account of professional commitments and pre-occupation with his firms, has resigned from the Board of Directors May 30, 2012.

As per the provisions of Article 137 of the Articles of Association of the Company, Mr. Krishen Dev, Mr. Puneet Khurana and Mr. P.M. Samvatsar, retire by rotation and being eligible offer themselves for re-appointment at the ensuing Annual General Meeting. The Board of Directors recommends their re-appointment by the shareholders at the ensuing Annual General Meeting.

Brief resume of the Directors proposed to be re-appointed, nature of their expertise in specific functional areas and names of public limited companies in which they hold directorships and memberships/chairmanships of Board Committees, as stipulated under Clause 49 of Listing Agreements with the Stock Exchanges in India, are provided in the Report on Corporate Governance forming part of the Annual Report.

CREDIT RATING FROM CRISIL

In respect of the borrowings programme of the Company, CRISIL has revised the Long Term rating to "CRISIL A/ Stable" from "CRISIL A /Stable" and has reaffirmed (retained) the Short Term rating as "CRISIL A1".

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts for the year ended March 31, 2012, the applicable accounting standards have been followed and there are no material departures from the same;

(ii) 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 March 31, 2012 and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts of the Company on a "going concern"basis.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements, your Directors provide the Audited Consolidated Financial Statements in the Annual Report. As a significant part of your Company's business is conducted through its subsidiaries, your Directors believe that the consolidated accounts provide a more accurate representation of the performance of your Company.

AUDITORS

M/s. Dalal & Shah, Chartered Accountants, Statutory Auditors, and M/s. Arun Arora & Co., Chartered Accountants, Branch Auditors hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received letters from M/s. Dalal & Shah and M/s. Arun Arora & Co. to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for re-appointment within the meaning of Section 226 of the said Act.

CORPORATE GOVERNANCE

Your Company is committed to achieving and maintaining the highest standards of Corporate Governance and places high emphasis on business ethics. Pursuant to Clause 49 of the Listing Agreement, a Management Discussion and Analysis Report and the Report on Corporate Governance forms part of the Annual Report.

The requisite Certificate from the Auditors of the Company, M/s. Dalal & Shah, confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 forms part of the Annual Report.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the particulars of employees are set out in annexure to this Report.

However, having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are provided as an Annexure to this Report.

ACKNOWLEDGEMENT AND APPRECIATION

Your Directors would like to express their appreciation for the assistance, support and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company globally.

For and on behalf of the Board

Mumbai P.K. Khurana

May 29, 2012 Chairman & Managing Director


Mar 31, 2011

The Directors are pleased to present the 32nd Annual Report and the audited accounts for the financial year ended 31st March, 2011.

FINANCIAL RESULTS

The financial performance of the Company, for the year ended 31st March, 2011 is summarized below:

(Rs. in Lac)

Particulars Standalone Consolidated 2010-11 2009-10 2010-11 2009-10

Sales 39,993.83 37,166.69 79,997.92 67,225.43

Less: Excise Duty 2,364.41 2,260.18 2,364.41 2,260.18

Total Sales 37,629.42 34,906.51 77,633.51 64,965.25

Profit before Finance Charges, Depreciation, Foreign Exchange Variation (net) and Tax 6,192.62 2,660.23 14,404.74 6,419.16

Less:

- Finance Charges 314.84 312.20 822.72 1,135.39

- Depreciation 2,419.02 1,429.00 6,389.29 5,688.34

Profit before Foreign Exchange Variation (net) and Taxation 3,458.76 919.03 7,192.73 (404.57)

Foreign Exchange Variation – Gain (net) 91.46 2,434.99 268.02 2,235.03

Profit before Tax 3,550.22 3,354.02 7,460.75 1,830.46 (Less) / Add: Provision for Taxation - Current Tax (1,330.00) (580.00) (1,330.00) (580.00)

- Deferred Tax 28.33 (627.13) 892.66 33.86

- Wealth Tax (2.50) (2.00) (2.50) (2.00)

Profit for the year 2,246.05 2,144.89 7,020.91 1,282.32

Add: Prior period adjustments and Tax adjustments of earlier years (net) 5.70 1,903.90 5.70 2,860.41

Minority Interest – – 24.45 8.32

Net Profit 2,251.75 4,048.79 7,051.06 4,151.05

Balance brought forward from previous year 9,707.17 8,073.88 29,021.76 27,286.21

Balance Available for appropriation 11,958.92 12,122.67 36,072.82 31,437.26 Appropriations

Proposed Dividend 1,607.37 1,213.89 1,607.37 1,213.89

Provision for Dividend Tax 266.96 201.61 266.96 201.61

Dividend and Dividend Tax for the year 2009-10 83.96 – 83.96 –

Transfer to General Reserve 1,000.00 1,000.00 1,000.00 1,000.00

Balance carried forward 9,000.63 9,707.17 33,114.53 29,021.76

Basic and Diluted earnings per share of Rs. 2 each before excess depreciation* 2.13 2.04 6.66 1.19

Basic and Diluted earnings per share of Rs. 2 each after excess depreciation* 2.13 4.00 6.66 4.10

* Calculated on weighted average number of shares.

PERFORMANCE REVIEW

Financial Year 2010-11 marked a strong resurgence in volume and demand growth post the financial crisis. The Company has registered a strong broad based sequential growth across all key markets and customer segments.

On consolidated basis for FY 2010-11, revenues at Rs. 77,634 Lac were higher by around 20% over the previous years revenues of Rs. 64,965 Lac. Net profit at Rs. 7,051 Lac was higher by around 70% over the previous years net profit of Rs. 4,151 Lac. During the year, the total consolidated sales volume of cylinders increased to 884,339 nos. as against 687,212 nos. in the previous year.

This was achieved mainly on account of overall improvement in sales volume, increase in sales of high value added products and continuing efforts to control costs and improve profitability. The growth in international business also contributed towards the overall profitability of the Company.

DIVIDEND

Your Directors have recommended a dividend of Rs. 1.50 per Equity Share (last year Rs. 1.20 per Equity Share) for the financial year ended 31st March, 2011, amounting to Rs. 1,874.33 Lac (inclusive of dividend tax of Rs. 266.96 Lac).

The dividend payout for the year under review has been formulated in accordance with the Companys policy to pay sustainable dividend linked to long term growth objectives of the Company to be met by internal cash accruals.

PREFERENTIAL ALLOTMENT OF EQUITY SHARES

Pursuant to the approval accorded by the members at the Extraordinary General Meeting held on 19th June, 2010, your Company had raised Rs. 81 crores by allotting 6,000,000 equity shares to 2 schemes of Reliance Mutual Fund on a preferential basis at Rs. 135/- per equity share (including a premium of Rs. 133/- per share) on 19th June, 2010. The proceeds of the proposed preferential offer were utilised for capital expenditure, working capital and repayment of debt.

SUBSIDIARIES

Your Company established a wholly owned subsidiary (WOS) in Thailand on 7th Oct, 2010 by the name of EKC Industries (Thailand) Co. Ltd. Since Thailand is promoting Natural Gas Vehicles in a big way, EKC looks forward to expanding its market share in Thailand.

As on 31st March, 2011, the Company had three wholly owned subsidiary companies, viz., EKC International FZE in Dubai, UAE, EKC Industries (Tianjin) Co. Ltd. in China and EKC Industries (Thailand) Co. Ltd. in Thailand and two step down wholly owned subsidiary companies, viz. EKC Hungary Kft in Hungary and CP Industries Holdings, Inc. in USA and one Indian Subsidiary Company viz., Calcutta Compressions & Liquefaction Engineering Ltd.

Pursuant to the provision of Section 212(8) of the Companies Act, 1956 (the Act), the Ministry of Corporate Affairs, Government of India vide its circular dated 8th February, 2011 has granted general exemption from attaching the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies with the Balance Sheet of the Company. A statement containing brief financial details of the Companys subsidiaries for the financial year ended 31st March, 2011 is included in the Annual Report. The annual accounts of these subsidiaries and the related detailed information will be made available to any member of the Company who may be interested in obtaining the same at any point of time and are also available for inspection by any member of the Company at the registered office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include the financial results of the subsidiary companies.

FIXED DEPOSITS

The Company has not accepted any fixed deposits during the year under review.

SHIFTING OF ACTIVITIES OF AURANGABAD UNIT TO GANDHIDHAM UNIT

With a view to consolidate and promote synergy amongst similar facilities which would result in effective utilization of the manufacturing facilities and also considering the feasibility and viability of order execution and prompt delivery of committed supplies to customers, it was considered prudent to shift the entire activities of the plant located at Aurangabad, Maharshtra to the companys larger unit located at Gandhidham, Gujarat which has the resources and the capacity to handle the incremental volume of business as a result of such change.

DIRECTORS

Mr. Arvind Malhan ceased to be alternate director to Mr. Varun Bery w.e.f. 1st January, 2011. Mr. Akash Mehta who had been appointed as an alternate director to Mr. Varun Bery w.e.f. 31st January, 2011 also ceased to be alternate director to Mr. Varun Bery w.e.f. 13th May, 2011. Mr. Hon Cheong Lam has been appointed as an alternate director to Mr. Varun Bery w.e.f. 27th May, 2011.

As per the provisions of Article 137 of the Articles of Association of the Company, Mr. Naresh Oberoi, Mr. Vyomesh Shah and Mr. Gurdeep Singh, retire by rotation and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting. The Board of Directors has also recommended their re- appointment for consideration of the shareholders.

Brief resume of the Directors proposed to be re-appointed, nature of their expertise in specific functional areas and names of public limited companies in which they hold directorships and memberships / chairmanships of Board Committees, as stipulated under Clause 49 of Listing Agreements with the Stock Exchanges in India, are provided in the Report on Corporate Governance forming part of the Annual Report.

CREDIT RATING FROM CRISIL

The Company continues to have the highest domestic credit rating of P1 for short term borrowings and A+ / Stable for long term borrowings by CRISIL. Strong credit ratings by the leading rating agency reflect the Companys financial discipline and prudence.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts for the year ended 31st March, 2011, the applicable accounting standards have been followed and there are no material departures from the same;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgements 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, 2011 and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts of the Company on a going concern basis.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements, your Directors provide the Audited Consolidated Financial Statements in the Annual Report. As a significant part of your Companys business is conducted through its subsidiaries, your Directors believe that the consolidated accounts provide a more accurate representation of the performance of your Company.

AUDITORS

M/s. Dalal & Shah, Chartered Accountants, Statutory Auditors and M/s. Arun Arora & Co., Chartered Accountants, Branch Auditors hold office until the conclusion of the ensuing Annual General Meeting and are elligible for re-appointment.

The Company has received letters from M/s. Dalal & Shah and M/s. Arun Arora & Co. to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for re-appointment within the meaning of Section 226 of the said Act.

CORPORATE GOVERNANCE

Your Company is committed to achieving and maintaining the highest standards of Corporate Governance and places high emphasis on business ethics. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. The requisite Certificate from the Auditors of the Company, M/s. Dalal & Shah, confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is annexed hereto as "Annexure A” and forms part of this report.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the particulars of employees are set out in annexure to this Report.

However, having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are provided as "Annexure B” to this Report.

ACKNOWLEDGEMENT AND APPRECIATION

Your Directors would like to express their appreciation for the assistance, support and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company globally.

For and on behalf of the Board

P.K. Khurana

Chairman & Managing Director

Mumbai

27th May, 2011


Mar 31, 2010

The Directors have pleasure in presenting the 31st Annual Report together with the audited accounts for the financial year ended 31st March, 2010.

FINANCIAL RESULTS

The financial performance of the Company for the Financial Year ended 31st March, 2010 is summarized below:

(Rs. in Lac)

Particulars Standalone Consolidated

2009-10 2008-09 2009-10 2008-09

Sales 37,166.69 38,308.99 67,225.43 88,661.82

Less: Excise Duty 2,260.18 3,006.50 2,260.18 3,006.50

Total Sales 34,906.51 35,302.49 64,965.25 85,655.32

Profit before Finance Charges, Depreciation, Foreign Exchange Variation (Net) and Tax 2,660.23 10,662.97 6,419.16 27,505.14

Less:

- Finance Charges 312.20 553.84 1,135.39 2,717.48

- Depreciation 1,429.00 2,264.75 5,688.34 6,927.80

Profit before Foreign Exchange Variation (Net) and Taxation 919.03 7,844.38 (404.57) 17,859.86

Foreign Exchange Variation - (Loss)/ Gain (Net) 2,434.99 (2,058.84) 2,235.03 (1,887.89)

Profit before Tax 3,354.02 5,785.54 1,830.46 15,971.97

(Add)/Less: Provision for Taxation

- Current Tax (580.00) (2,060.00) (580.00) (2,060.00)

- Deferred Tax (627.13) 687.68 33.86 529.12

- Fringe Benefit Tax -- (26.50) -- (26.50)

- Wealth Tax (2.00) (1.50) (2.00) (1.50)

Profit for the year 2,144.89 4,385.22 1,282.32 14,413.09

Add/(Less): Prior period adjustment and Tax adjustment of earlier years (Net) 1,903.90 (660.46) 2,860.41 (660.46)

Minority Interest -- -- 8.32 --

Net Profit 4,048.79 3,724.76 4,151.05 13,752.63

Balance brought forward from previous year 8,073.88 6,769.31 27,286.21 15,953.77

Balance available for appropriation 12,122.67 10,494.07 31,437.26 29,706.40

Appropriations

Proposed Dividend 1,213.89 1,213.89 1,213.89 1,213.89

Provision for Dividend Tax 201.61 206.30 201.61 206.30

Transfer to General Reserve 1,000.00 1,000.00 1,000.00 1,000.00

Balance carried forward 9,707.17 8,073.88 29,021.76 27,286.21

Basic and Diluted earnings per share of Rs. 2 each before Excess Depreciation on reworking (in Rupees)* 2.04 3.68 1.19 13.60

Basic and Diluted earnings per share of Rs. 2 each after Excess Depreciation on reworking (in Rupees)* 4.00 3.68 4.10 13.60

*Calculated on weighted average number of shares.

PERFORMANCE REVIEW

The year under review was a transformational year for the Company that required EKC to demonstrate its ability to adapt quickly to the changing economic scenario. This was a challenging year for the Company across all markets given the extraordinary situation due to price volatility and demand slowdown. The Company had to take steps for realigning its policies and practices which helped the company to post growth in certain markets despite the overall slowdown. This was achieved through increased focus on niche markets and customers, prudent procurement policies and continued focus on improving productivity and quality to serve the customers more efficiently than ever before.

The Consolidated revenues were at a level of Rs. 64,965 Lac for the year ended 31st March, 2010 as compared to Rs. 85,655 Lac for the previous year resulting primarily from slowdown in the markets across certain geographies as well as due to drop in realizations. For the same period, Consolidated Profit before Tax was at Rs. 1,830 Lac as against Rs. 15,972 Lac. Consolidated Profit after Tax was at Rs. 4,151 Lac which is lower by around 70% as compared to that of Rs. 13,753 Lac in the previous year.

During the year, the total consolidated sales volume of cylinders decreased to 687,212 nos. as against 691,478 nos. in the previous year.

Your attention is also invited to Note No. 12 of Notes forming Part of Accounts regarding change in the method of charging Depreciation on fixed assets. Hitherto, the company has been following the WDV (Written Down Value) method of providing depreciation on all its fixed assets at the rates prescribed under the Companies Act. Due to accelerated depreciation in earlier years, the Net Block has eroded faster than necessary considering the useful life of the assets and the economic benefits derived from the use of such assets. Considering the above factors, the Board of Directors considered it prudent to change the method of Depreciation to SLM (Straight Line Method) basis. This would also prepare the company for convergence with IFRS which shall be effective April 2011 as per which depreciation would have to be provided based on useful life of the asset and the depreciation should reflect the pattern in which the asset’s economic benefits are consumed.

OUTLOOK

Despite the downturn, EKC continues to enjoy market leadership in the domestic market and favourable position in international markets on account of its long history in business and adherence to the highest quality standards. Our customers have always benefited from high quality products delivered at the most competitive prices.

With renewed focus on emerging markets, EKC continues to invest in new technologies. With increased capacities and coupled with its strong customer relationship, EKC is ideally positioned towards attaining leadership status globally as well in the coming years.

DIVIDEND

Your Directors are pleased to recommend, for approval of the Members, payment of a dividend for the financial year ended 31st March, 2010 at the rate of Rs. 1.20 per Equity Share of Rs. 2 each which is the same as paid last year. While the dividend payout on profits is higher in percentage terms when compared to the earlier dividend payouts, the Directors believe that in view of the fact that the immediate resource requirements for capital expansion have been met and considering the adequate cash accumulations, it was appropriate to maintain the dividend payable to shareholders.

PREFERENTIAL ALLOTMENT

The Board of Directors at their meeting held on 19th May, 2010, subject to the approval of members and other statutory approvals, approved the raising of Rs. 81 crores by allotment of 60,00,000 equity shares to 2 schemes of Reliance Mutual Fund on a preferential basis at Rs. 135/- per share (including a premium of Rs. 133/- per share). The proceeds of the proposed preferential offer will be utilised for capital expenditure, working capital and repayment of debt.

Accordingly, an Extraordinary General Meeting of the members of the Company has been convened on 19th June, 2010 to obtain their approval for the said preferential issue.

SUBSIDIARIES

As on 31st March, 2010, the Company had two wholly owned subsidiary companies, viz., EKC International FZE in Dubai, UAE and EKC Industries (Tianjin) Co. Ltd. in People’s Republic of China and two step down wholly owned subsidiary companies, viz. EKC Hungary Kft in Hungary and CP Industries Holdings, Inc. in USA and one Indian Subsidiary Company viz., Calcutta Compressions & Liquefaction Engineering Ltd (“CC&L”). During the year under review, there has been a change in the status of CC&L from ‘Private’ to ‘Public’ Limited.

Ministry of Corporate Affairs, Government of India has granted approval that the requirement to attach various documents in respect of subsidiary companies, as set out in Section 212(8) of the Companies Act, 1956, shall not apply to the Company. Accordingly, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. Financial information of the subsidiary companies, as required by the said approval, is disclosed in the Annual Report. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and at the Registered Office of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies.

FIXED DEPOSITS

The Company has not accepted any fixed deposits during the year under review.

DIRECTORS

Mr. Varun Bery has been nominated as Investor Director by TVG India Investment Holdings Limited (“TVG”), the allottee of 32,00,000 Equity Shares in terms of Clause 8.1 of the Investment Agreement entered into by the Company with TVG (“the Agreement”). Accordingly, pursuant to the provisions of Section 260 of the Companies Act, 1956 and Article 125 of the Articles of Association of the Company, Mr. Varun Bery was appointed as an Additional Director w.e.f. 30th January, 2010.

Mr. Varun Bery is a non-executive non-independent director and would hold office up to the date of the ensuing Annual General Meeting. The Company has received a notice in writing from a member proposing the candidature of Mr. Varun Bery for the office of Director liable to retire by rotation.

Mr. Arvind Malhan ceased to be a non-executive non-independent director w.e.f. 30th January, 2010.

In terms of Clause 8.5 of the Agreement, TVG has nominated Mr. Arvind Malhan as an alternate director to Mr. Varun Bery and accordingly, pursuant to the provisions of Section 313 of the Companies Act, 1956 and Article 124 of the Articles of Association of the Company, Mr. Arvind Malhan has been appointed as an alternate director to Mr. Varun Bery w.e.f. 30th January, 2010.

As per the provisions of Article 137 of the Articles of Association of the Company, Mr. Pushkar Khurana, Mr. Shailesh Haribhakti and Mr. Mohan Jayakar, retire by rotation and being eligible, offer themselves for reappointment at the ensuing Annual General Meeting. The Board of Directors has also recommended their reappointment for consideration of the shareholders.

Brief resume of the Directors proposed to be appointed / reappointed, nature of their expertise in specific functional areas and names of public limited companies in which they hold directorships and memberships / chairmanships of Board Committees, as stipulated under Clause 49 of Listing Agreements with the Stock Exchanges in India, are provided in the Report on Corporate Governance forming part of the Annual Report.

CREDIT RATING FROM CRISIL

The Company has been assigned the highest domestic credit rating of P1 for short term borrowings and A+ / Stable for long term borrowings by CRISIL.

Strong credit ratings by the leading rating agency reflect the Company’s financial discipline and prudence.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors’ Responsibility Statement, it is hereby confirmed that :

(i) in the preparation of the annual accounts for the year ended 31st March, 2010, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departures from the same;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgements 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, 2010 and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts of the Company on a ‘going concern’ basis.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements, your Directors provide the Audited Consolidated Financial Statements in the Annual Report. As a significant part of your Company’s business is conducted through its subsidiaries, your Directors believe that the consolidated accounts provide a more accurate representation of the performance of your Company.

AUDITORS AND AUDITORS’ REPORT

M/s. Dalal & Shah, Chartered Accountants, Statutory Auditors and M/s. Arun Arora & Co., Chartered Accountants, Branch Auditors hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

The Company has received letters from M/s. Dalal & Shah and M/s. Arun Arora & Co. to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for reappointment within the meaning of Section 226 of the said Act.

The Notes on Accounts referred to in the Auditors’ Report are self-explanatory and therefore do not call for any further comments.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

CORPORATE GOVERNANCE

Your Company is committed to achieving and maintaining the highest standards of Corporate Governance and places high emphasis on business ethics. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The declaration regarding compliance with EKC - Code of Conduct and Ethics for all Board Members and Senior Management Personnel of the Company forms part of Report on Corporate Governance.

The requisite Certificate from the Auditors of the Company, M/s. Dalal & Shah, confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is annexed hereto as “Annexure A” and forms part of this report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are provided as “Annexure B” to this Report.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the particulars of employees are set out in annexure to this Report.

However, having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

ACKNOWLEDGEMENT AND APPRECIATION

Your Directors would like to express their appreciation for the assistance, support and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company.

For and on behalf of the Board of Directors

P.K. Khurana Chairman & Managing Director

Mumbai 26th May, 2010